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Mortgage Myths

Posted on February 14, 2020 by Nancy Bergman

A home is the most expensive purchase most of us will ever make. Combine that with rising real estate prices, the need to save for a down payment, and trying to find the lowest mortgage rate; buying a home can also be one of the most stressful purchases we’ll ever make. Here is the truth about some of the most common mortgage myths.

Myth No. 1: You need to make a down payment of at least 20% to secure a mortgage.

A 20% down payment is required on homes valued at more than $1 million, but the lower the sale price the lower the down payment. The minimum down payment for a house priced from $500,000 to $999,999 requires a 5% down payment on the first $500,000 and then 10% based on the remaining amount. A house priced less than $500,000 requires a 5% down payment. However, a minimum down payment is subject to the lender’s approval and they may require more, especially, if you have a poor credit history or are self employed.

Myth No. 2: The maximum amortization time for a mortgage is 25 years.

25 years is the maximum amortization time for an insured mortgage in Canada, uninsured homebuyers—those who make a minimum down payment of at least 20%—can have an amortization on their mortgage for up to 30 years. A longer mortgage reduces your monthly payment, but it increases the amount of interest you pay over the life of the mortgage.

Myth No. 3: Pre-qualification and Pre-approval are the same thing.

Mortgage pre-qualification is the first step in buying a home and comes before pre-approval. Pre-qualification is a simple process that involves supplying a lender with your income, debt, and asset information, which can often be done over the phone. This information allows the lender to estimate the interest rate you could expect, so you can estimate your monthly mortgage payments. The pre-approval stage involves a more detailed look into your finances including your credit rating. During this time, your lender will decide the maximum size of a mortgage you qualify for and at what interest rate.

Myth No. 4: Being pre-approved guarantees you’ll get a mortgage.

A pre-approval is only one step in securing a mortgage. But being pre-approved doesn’t guarantee you’ll receive the maximum amount. The value of the home you intend to purchase and the amount of your down payment are other factors a lender will look at when deciding how much, if anything, to lend you.

Myth No. 5: It’s always best to wait until the spring to purchase a home.

It’s true that property sales and mortgage activity start to increase in March and continues through the summer, but that has nothing to do with interest rates. It is because of the warming weather. It is easier to look for a home or put it up for sale when the weather is nice. The busiest time for lenders is during spring and summer, but the best time to move is the time that’s best for you.

Buying a home is definitely stressful. So look for a mortgage broker or lender who can work with you to help reduce some of that stress.

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Questions to Ask Your Mortgage Broker: That Could Save You Thousands

Posted on February 7, 2020 by Nancy Bergman

Posted in Mortgage & Finance

Questions to Ask Your Mortgage Broker: That Could Save You Thousands

After signing their mortgage, many homeowners forget about it, until it comes due for renewal. With changes in the mortgage world happening all the time, your mortgage broker or banker should be able to help you find ways to improve your financial health, say mortgage professionals.

Here are five questions to ask those professional:

Do the Stress Test rules apply to me?

The test was designed to ensure borrowers would be able to pay their loan if interest rates increased. But the rules do not apply to mortgage renewals, as long as they are with the borrower’s existing lender. You may even be able to move your existing mortgage to a new lender for better rates, without having to apply the stress test.

Does refinancing make financial sense to access my equity for other things?

Even with mortgage payout penalties, your savings could be significant. This could help you increase cash flow by eliminating credit card balances or lines of credit. This in turn may allow you to increase your mortgage payment to pay it off faster and save interest. Maybe your properties need maintenance, or you’re wanting to renovate. Leveraging your equity can also play an important role in successful investing.

Is there room for improvement in my mortgage structure?

If you own more than one property or want to pursue tax-deductible investments, changing your mortgage structure can save you money at tax time. For example, many multi-level mortgage products allow you to separate non-deductible mortgage payments from your deductible mortgage interest.

When should I lock in my variable-rate mortgage?

Current fixed rates are often lower, so if you plan to keep the property for a long time, it’s worth having your professional do a comparison between fixed rates and your current variable rate. A key consideration are the penalties charged for breaking the mortgage contract early.

How can I pay my mortgage off faster?

Mortgage payments determine amortization length: the higher the payment, the lower the amortization; the lower the payment, the longer it takes to pay the mortgage off. One strategy worth looking at is extending amortization on revenue properties and reducing it on your residential mortgage.

If you have other mortgage questions, talk to your mortgage professional.

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Time To Declutter

Posted on January 13, 2020 by Nancy Bergman

Posted in Organizing, Your Home

It’s a new year, time to set goals, change habits and reorganize our homes. But it’s often hard to know where to begin. Warm up by doing something easy and satisfying: get rid of things you don’t need or want. Pick a few from this list or all of them. It won’t take a lot of time or effort but the sense of accomplishment you feel, might just help you get motivated for more and create new habits.

Coffee Mugs

If you took all your mugs out of your cupboards, you may find that they are not cohesive or attractive. That’s fine, but most of us are wasting valuable cabinet space on mugs in sizes and motifs that we never use. Assess how many mugs you really need and take the rest to be donated. Someone’s trash is someone else’s treasure.

The Kitchen Sponge

For those of you who are vigilant about making sure you get rid of your sponges on a regular basis or you never use them, please ignore this. For the rest of you, get rid of those babies right now.

Instead of filling landfills with them, consider alternatives like reusable dishrags, which can be washed regularly or eco-friendly sponges made of biodegradable cellulose. If you come up with a good use for reusing your old sponges, please post it on Pinterest.

Unwanted Books

For most of us it is hard to give up our books, but the likelihood of them just collecting dust on your shelves is hard to deny. Those volumes could be bringing joy to others. Ask yourself this when trying to whittle down your book collection:

Will I read or use this again?
Does it have sentimental meaning to make it worth keeping?
Do I want it here so visitors can enjoy it?
Do I know someone who would like/could use it?

Based on these answers, decide what to keep and what you are willing to let go of. Give them to friends, donate to a book bin or take to your local school or library.

Old Magazines

If you haven’t read the magazine in the last year, let’s be honest, your not going to read it in 2020. Don’t feel like you might one day need that recipe, the How to, or the information. You can always look it up on the internet.

Magazines are easily recycled and if you would rather they be enjoyed by someone else first, take them to a book bin, the library or give them to a school. They can always be used to make collages and vision boards.

Equipment Manuals

If you are like my husband, you keep every manual, for every item you have ever owned, maybe the boxes too. If they are still sealed in the plastic they came in and you never registered the product anyway; get rid of it. Chances are most of the information contained in those manuals is available online. If your not sure they are available digitally, check first before recycling. Recycle the boxes too, they just take up too much space!

Your Toothbrush

Toothbrushes are often a hard item for people to throw out. If the bristles are bent, broken or frayed, it’s time to get a new one. The Canadian Dental Association recommends changing your toothbrush every 3 to 4 months. If you already have a collection of “cleaning toothbrushes” recycle and rotate them. There are new eco-friendly options or those with replaceable heads.

Expired Food

Go through your fridge and pantry, make 2 piles: expired items and items you won’t use. Toss or compost the expired items (recycle boxes, plastic containers, metal cans etc) and donate the still good items you won’t use, to your local food bank or charity.

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Lower Property Assessments for 2020

Posted on January 8, 2020 by Nancy Bergman

Posted in Your Home

Most of you have probably just received your 2020 Property Assessments and many of you may be surprised. It is the first time in 20 years that BC’s total property assessment values have decreased, says BC Assessment.

Here on the Sunshine Coast properties on average in Gibsons have decreased by about 3% and in Sechelt by 6%. The lower mainland saw the biggest decrease between 7-10%.

BC Assessments are used to calculate property taxes, based on the property’s assessed value as of July 1st of the previous year, in this case 2019. The assessments are based on sales in the neighbourhood, along with the size, age, quality, condition, view and location of the property.

But a lower assessment, does not necessarily translate to lower property taxes. How your assessment changes relative to the average change in your community, is what actually affects your property taxes.

Paul Sullivan, Head of the property tax division, said, “The declining assessments might be good news for people looking to get into the market, but will be far less welcome to those who have recently bought in.” Sullivan also noted that higher-end properties dropped more significantly. “The higher end values have gone down a lot more, than the lower end values. You are going to see an automatic shift in the tax burden to the lower end homes.”

If you disagree with the valuation of your home, you can take the assessment to a formal, independent review.

Although assessed values have gone down, analysts have seen the real estate market heating up again after the slow 2019 year. Therefore, home sales and prices are expected to start to climb again in 2020.

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Tips For Selling Your Home In Winter

Posted on December 9, 2019 by Nancy Bergman

Posted in Tips For Selling

Many people believe it is more difficult to sell your home in winter, but the reality is, it comes down to curb appeal. You want to highlight your house not everything around it.

The key is to make your home warm and inviting. Therefore, you need to keep your home neat and tidy at all times.

Add A Little Light

The winter months are not as bright as spring and summer, but there are easy ways to make your house seem brighter and more inviting.

Put up Christmas lights, like white lights around the entry way or floodlights that highlight the house at dusk. Make sure all the lights in your house are working and no bulbs have burnt out. You want to create that warm feeling when you walk through the doors.

Window Treatments

Make sure your blinds aren’t crooked and are cohesive. If possible always keep them clear and open. Look at your house from the outside and just make sure your blinds and shades are up and open.

Out of Sight

It might be convenient to have your garbage bins in the driveway during the winter, but it’s not a good idea for selling. Having them visible just doesn’t make your house look good. Put them somewhere where they can’t be seen from the street.

Planting Outdoors

Adding some outdoor plants makes a home look more appealing. It shows your pride in ownership. It doesn’t have to be an evergreen, it could be any winter plant even twigs and branches as long as they are arranged in a neat and tidy way. For that little extra, run some lights through it.

Clearing Snow

If you are lucky or unlucky enough to get snow, make sure your driveway and walkways are cleared. No one wants to hike over snowbanks to get a look inside your house. Also if you have icicles hanging off your eaves, it is a good idea to knock them off. Otherwise, it might suggest a heat problem.

The winter can seem like a challenging time to list your home, but it could actually end up being to your advantage. Often there are fewer properties on the market and the summer brings much more competition. If your house looks warm and inviting, it will increase the chances of people coming to look at it.

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