Some excellent advice from my friends at Pillar to Post!

1. Caulk around exterior door and window frames for a tight seal. Look for gaps where pipes or wiring enter the home and caulk those as well. Not only does heat escape from these openings, but water can enter and damage underlying materials, and even cause structural damage.
2. Check the roof for missing or damaged shingles. Water, wind, ice and snow can cause serious damage to a vulnerable roof, leading to a greater chance of further damage inside the home. Always have a qualified professional inspect and repair the roof, but binoculars can be used to do a preliminary survey from the ground.
3. Clear gutters of leaves, sticks, and other debris. If the home gets heavy leaf fall, this may need to be done more than once during the season. If the gutters can accommodate them, leaf guards can be real time-savers and prevent clogging. Check the joints between sections of the gutter, as well as between the gutter and downspouts, and make any necessary adjustments or repairs. Make sure downspouts direct water away from the house.
4. In cold-weather climates, garden hoses should be drained and stored indoors to protect them from the harsh winter elements. Shut off outdoor faucets and make sure exterior pipes are drained of water. Faucets and pipes can easily freeze and burst, causing leaks and increasing the potential for serious water damage.
5. Have the furnace inspected to ensure that it’s safe and in good working order. Most utility companies will provide basic, no-cost furnace inspections to their customers, but schedule early as there can often be a long waiting list as the weather cools down. Replace disposable furnace air filters or clean the permanent type according to the manufacturer’s instructions. Using a clean filter not only helps with interior air quality, it will help the furnace run more efficiently, saving money and energy.
6. A wood-burning fireplace can be a real pleasure on a chilly fall evening. For safety, have the firebox and chimney professionally cleaned before use this season. Creosote, a byproduct of wood burning, can build up to dangerous levels and cause a chimney fire that can spread to the rest of the house.

Some great insight on the recent Bank of Canada hold on interest rates from DLC’s Dr. Sherry Cooper, Chief Economist.

AUGUST 27, 2019 – Some valuable insight on the new FTHBI from our friends at Zoocasa. For those living in BC, the impact will not be the same as in many other provinces across the country. 

Good news for those looking to break into the Canadian housing market: the new federal First-Time Home Buyer Incentive (FTHBI) will officially be open for business as of September 2^nd.

Designed to alleviate mortgage costs for first-time home buyers, the FTHBI will take a bite out of monthly payments by providing shared equity loans of 5% toward the down payment of a resale home, and 5% or 10% for newly-built homes. By boosting the size of buyers’ down payments, the FTHBI whittles down monthly mortgage costs, offering some relief on the costs of home ownership.

Who Can Use the FTHBI?

To qualify for the FTHBI, home buyers must satisfy the following:

• At least one person in the household must be a first-time home buyer, meaning they have not owned a home, or dwelled in a home owned by their spouse, over the last four years. (An exception is made for buyers who’ve had a breakdown of marriage or common-law relationship.)
• Buyers must have a minimum 5% down payment saved in order to qualify for an insured mortgage.

• Buyers’ combined household income cannot exceed $120,000. This includes the income of any guarantors co-signing on the mortgage, as well as any rental income generated if part of the home is tenanted out.

• The buyers’ Mortgage-to-Income Ratio (MTI) cannot exceed four times their income, including the portion that’s provided by the FTHBI. This means the maximum down payment for a resale home cannot exceed 14.99%, and 9.99% for a new build.

How Does the FTHBI Work?

The funds provided via the FTHBI are registered as a second mortgage, and don’t incur interest. This second mortgage must be paid back in full when the first insured mortgage matures at 25 years or when the home is sold, whichever comes first, though homeowners may pay it back as a lump sum early without penalty.

Because it is a shared equity mortgage, the amount to be paid back will fluctuate along with the value of the home over time: if the home’s assessed value rises, the loan repayment will increase by the same per cent. However, the same will occur if the home has lost value by the time it is sold or the mortgage matures.

Who Will Benefit from the FTHBI?

Since its big reveal in the March 2019 budget, the FTHBI has been the subject of debate; some mortgage experts point out that borrowers taking out a traditional mortgage would actually qualify for a larger loan based on more generous MTI criteria, while others argue that home buyers could be on the hook for a much larger loan repayment if they live in a particularly hot market where real estate prices are rising.

The largest points of contention are the FTHBI’s income and MTI caps; based on the criteria, a household earning the maximum income of $120,000 and making a 5% down payment would be limited to a resale home purchase price of $505,000 – an amount too low to have much traction in larger markets. For example, sold prices in Toronto and Vancouver were $806,755, and $967,314 in July, respectively.

FTHBI Could Be Used in 19 of 25 Markets

However, new analysis from Zoocasa reveals that the FTHBI may be an option in the majority of the nation’s major urban centres; a study of July 2019 average prices in 25 markets across the nation finds home buyers with the maximum income of $120,000 and a 5% down payment could feasibly qualify for the Incentive in 19 cities. These include markets in Eastern Canada, Quebec, and Prairies, as well as smaller urban centres in Ontario.

Not surprisingly, the six markets where the average home buyer would not qualify for the FTHBI include homes for sale in Toronto and several markets in its proximity in the Greater Golden Horseshoe such as Hamilton-Burlington and Kitchener-Waterloo, as well as in Greater Vancouver and neighbouring Victoria and Fraser Valley.

However, it’s important to note that the study’s calculations are based on average home prices and maximum incomes; home buyers’ ability to use the FTHBI in each city may range based on their income, size of their down payment, and the price of their desired home.

Check out the infographic below to see where the FTHBI may be most utilized in Canada’s major cities:

Source

Average home prices for July 2019 were sourced from the Canadian Real Estate Association (CREA).

Are interest rates headed for change? Some valuable insight from our friends at First National

Canadian employment took an unexpected hit in July and that has market watchers turning to the Bank of Canada to see if there will be a response.  There are a few forecasters predicting a rate cut by the bank in October, but they are in the minority at this time.

Economists will tell you that job numbers are notoriously hard to predict on a month by month basis, so it makes more sense to look at trends and long-term averages.

In July the Canadian economy shed 24,200 jobs, pushing the unemployment rate up 0.2% to 5.7% and marking the third straight month of softening employment numbers.  This follows several months of outsized growth.  Over the longer term, Canada has more than 350,000 new jobs, compared to a year earlier, most of them full time.

July’s increase in unemployment is also counter balanced by an increase in wage growth.  Working Canadians saw their hourly wage jump 4.5% on a year-over-year basis.

This is seen as an indication the labour market is finally starting to tighten up after a long period of economic growth.  Analysts also see this as a sign that economic growth may be about to flatten out.

The Bank of Canada is trying to balance its policies between good domestic growth and slowing economies in the U.S. and around the world.

So far those numbers do not add up to any rate moves, up or down.

A valuable outline from our friends at Planswell to help you reach your home ownership goals!

While it doesn’t always make sense for everyone, home ownership is often a financial goal for many Canadians. It can be the ideal setting to raise a family, build wealth in equity, or set yourself up for retirement.

A recent Globe and Mail feature shed some good news “that roughly three-quarters of Canadians live in communities where home ownership is affordable.” But no matter where you live or how much the average house price is, there are certain steps you need to work through on your journey to home ownership.

Before charging ahead, be honest with yourself if owning a home makes sense for your life goals and plans. If it does, then keep reading – we’ve broken it down in a step by step list for how to get you to your home ownership goal: 

Establish how much you can afford

Once you’ve decided that all of the responsibilities that come along with home ownership is the right direction for you, start by taking a hard look at your finances.

Make sure your credit score is in tip-top shape while you’re establishing how much you can afford. “Ensure your credit score is in tip top shape leading up to getting preapproved. No late payments, try to minimize the amount owing, don’t take out any new credit,” said Planswell Mortgages’ Samson Tella.

Do some market research and figure out where you want to live

Establishing how much you can afford may provide some direction when it comes to where you want to look. Every town and city is different, but they’ll all have areas that are considered more desirable and you’ll see that reflected in the price.

Our advice? Sometimes the greatest gem is hard to see at first. Be open to fixer-uppers that you can build into your dream home out of and you’ll often see a greater financial return over time.

Get pre-approved for a mortgage

Because you’ve been focused on maintaining a tip-top credit score since the time you started to establish what you can afford, the pre-approval process will be a lot smoother.

Another aspect to consider before you are in search of your pre-approval is the stability of your income. Don’t change careers when you’re looking to purchase a home. Lenders aren’t very friendly when looking at applicants that are still in that probationary period.

If you have a fluctuating income, a lender will want to look at a two-year running average so have your notice of assessments ready if you want to qualify for more than your base hours/salary. This includes OT/Bonuses/Car Allowances/Etc.

Don’t forget to disclose any additional factors that may help you get pre-approved. Have a lot of liquid assets? Have a cosigner? Have a side hustle that you claim on your taxes? Let your mortgage broker know. The clearer the picture your mortgage broker has, the stronger of a case they can make to get you approved for a mortgage that is right for you.

Establish your down payment

When it comes to down payments, minimums are required. You’ll need 5% of the purchase price for homes valued under $500,000 and 10% of the balance above $500,000 up to $1,000,000 purchase price. For homes with a purchase price over $1,000,000, you’ll need at the very least 20% down, if not more, depending on the lender.

How are you going to get there? Save, save, save

This is where a strict budget comes in handy. Try out our monthly budget calculator and try to be as strict with your spending as you can. Keep in mind that you have a goal you’re working towards, and you’re only going to get there by changing the way you’ve been doing things when it comes to your spending.

Once you have that down payment all ready and saved up, don’t be moving it around to different accounts – especially not locked in accounts like an RRSP. Sure, if you’re a first-time home buyer the RRSP Home Buyers’ Plan may be a fit for you, but there are many stipulations like the funds have to have been in the RRSP for at least 90 days. Check out this article to learn more about the ins and outs of the RRSP Home Buyers’ Plan.

Find that dream home (or as close to as possible!)

Now that you know how much you’re going to be putting down, and you have a target price you’re able to afford you can narrow in on where you can look for that dream home.

It’s often recommended not going to your maximum mortgage amount when you’re looking for your home. There are often things you forget when going from a renter to a home buyer: legal fees, property taxes, condo fees in some cases, water heater rentals, association fees… I could go on and on here.

Basically, don’t go crazy here – stay well within your budget to ensure that you’re not feeling stretched thin when it comes to all of the new expenses you’re about to incur with being a homeowner.

You can sometimes expect to pay 1.5% – 3.0% of the value of the home in other fees on the day of closing. This includes tax on the CMHC premium (if applicable), property tax, and many other fees. For example, if you’re purchasing a $700,000 house you can expect to pay around $20,000 in fees on the closing date.

Secure your mortgage

After you’ve placed your “offer to purchase”, your next step is to contact your mortgage broker to get your mortgage approval. Your mortgage broker can help you here, but you’ll also need a lawyer for their assistance.

Once you’ve secured your mortgage, you need to fulfill the mortgage and legal requirements to fund your mortgage as scheduled to ensure your plan goes off without a hitch. This looks different depending on what lender your mortgage is coming from, but don’t worry – your mortgage broker should hold your hand through this process to make sure you don’t miss any steps.

Well, there you have it: a step-by-step guide to your journey from being a renter to a homeowner. While this is an overview and there are of course many more in-depth aspects to each part of your journey, there is one overarching theme here that will determine your success as a homeowner: having a financial plan.

By Lauren Arnold, Planswell

JULY 28, 2019

Insight from our friends at FNAT…

As was widely predicted the U.S. Federal Reserve has gone ahead with an interest rate cut. It is the first reduction by the American central bank since the financial collapse more than a decade ago.

The Fed trimmed a quarter-point off its benchmark rate bringing it to a range of 2.0% to 2.25%, and a step closer to the Bank of Canada’s policy rate of 1.75%. It remains unlikely the BoC will be doing anything to widen that gap any time soon.

The economies in both countries are strong with good employment numbers. Some market watchers have noted that the data do not make a clear argument for the cut. Fed chair Jerome Powell characterized the move as pre-emptive, against downside risks.

The U.S. did report a one percentage point drop in GDP growth in the second quarter, dipping to 2.1%. It pointed to headwinds from slowing global growth and ongoing trade conflicts. Given that those conflicts have been triggered by the current U.S. administration the Fed’s 25 basis point cut can been seen as more political than economic, with the “headwinds” blowing out of the White House.

Canada, on the other hand, saw GDP increase 0.2% in May. Thirteen of 20 sectors advanced, led by manufacturing. Annual GDP growth now stands at 1.4%. The Bank of Canada appears happy with that. It is also satisfied with the jobs picture and inflation.

Aug 6, 2019
First National Financial LP

Some more weight has been added to the scale that is tipping in favour of an interest cut in the United States.  Economic growth, in the U.S., slowed to 2.1% in the second quarter, down a full percentage point, from 3.1% in the first quarter.

A key factor in the slowdown is a 5.2% drop in exports.  Many analysts see that as self-imposed pain brought on by the Trump administration’s trade fight with China.  The dispute is also contributing to the slowdown in Europe, and elsewhere.

The drop in GDP growth is seen as additional ammunition for those targeting the U.S. Federal Reserve for a rate cut this week.  However, there are prominent analysts who say a cut is not needed at this time.  U.S. growth remains above the five-year average and unemployment is at 50 year lows.

Last week the European Central Bank held the line on its benchmark interest rate, but made it clear it intends to take steps to boost the Euro-Zone’s sagging economy.  The ECB is signalling the distinct possibility of rate cuts and it is also looking at restarting its simulative bond buying program.

The Bank of Canada remains firmly on the sidelines.  It is content with the country’s employment rate, inflation, and its current growth figures.

Jul 29, 2019
First National Financial LP

Some great insight into when it’s the right time to get into the market from our friends at EQ Bank.

Some great tips from our friends at Pillar & Post on helping to maintain your property’s value!

Exterior Upkeep To Do Now

Try these essential tips to keep your home’s exterior in good shape and to help preserve its value.

ROOF AND SIDING

• Use binoculars to check the roof for missing or damaged shingles. Flashing should be tight and secured to prevent leaks. Have any problem areas repaired by a licensed, qualified roofing contractor.
• Repair any cracks or gaps in the siding and around windows. Make sure these are repaired before you decide to paint.
• No need to paint? Power washing makes quick work of removing built up dirt and mildew and will brighten your home immediately. You can hire a professional to do this, or rent the equipment by the day or half day.

GUTTERS AND DRAINAGE

• Clean debris from gutters and evestroughs, then flush with a garden hose.
• Check all downspouts to make sure they direct water away from the house.
• Clear basement window wells of debris, weeds, and other materials. Don’t use window wells to store items such as garden hoses or tools. Obstructing the wells’ drainage system can cause water to leak into the house.

WALKWAYS AND DRIVEWAY

• Repair gaps and cracks using materials appropriate for your specific surfaces, such as concrete, asphalt, etc.
• On walkways and steps, repair uneven or heaved surfaces that can create a tripping hazard.

A well-maintained exterior not only looks good and can help prevent big problems down the road, it will make you feel good about coming home every day.