23 Mar

Getting the Most from your Renovation Dollars

General

Posted by: Jordan Thomson

GETTING THE MOST FROM YOUR RENOVATION DOLLARS

For most of us, the family home is likely to be the largest single investment we will make. While the purchase of a home is driven primarily by the need to provide shelter for your family, all homeowners anticipate that the value of their home will increase over time.

The extent of this increase depends very much on market factors such as location and overall economic conditions. In recent years we’ve seen tremendous volatility in some parts of the country and this has led to a price distortion in these markets, but over the course of twenty or more years of ownership, the expectation is that a home’s value will continue to appreciate.

As the last wave of the Baby Boomer generation prepares for retirement, many plan to downsize and use the proceeds of the sale of their principal residence to purchase a smaller home. Remaining funds can then be added to retirement portfolios or used to pay off other debts.

For those planning to make this transition within a few years, it can be highly tempting to complete expensive renovations in the hopes of boosting the home’s selling price. While this can be an effective strategy, it is critical to proceed with caution! When it comes to makeover projects, some renovations are definitely better than others; here are just a few things to keep in mind to help ensure you get the best return for your renovation investment.

Bathrooms and Kitchens

Bathrooms and kitchens are frequent upgrade targets and it is generally accepted that money spent updating these rooms gives you the best opportunity to maximize your investment. In many cases, you can make a significant impact with relatively inexpensive upgrades to fixtures and lighting but anything beyond that will require a greater investment.

When upgrading a bathroom, for instance, costs will quickly escalate if installing upgraded amenities such as soaker tubs and whirlpool baths. The same holds true for kitchen renovations and once you start replacing appliances and upgrading counters and cabinets, costs will mount at an alarming rate.

Basements

Basements are also very common renovation projects and a basement that adds more living space to the home is a strong selling feature. Converting an unfinished basement into a comfortable space is an expensive proposition but a well-designed, modern basement will give your home a tremendous advantage once it hits the market.

Families with growing children will definitely appreciate the extra space, and basements that can be easily converted into a legal apartment with a separate entrance provide the potential for the new owner to earn extra rental income. Not all buyers are interested in renting out their basement, of course, but as the number of intergenerational families continues to rise, the ability to provide a self-contained apartment for aging parents makes this a very attractive feature for many buyers.

Renovations to Avoid

Just as some renovation projects can help boost the value of your home, others may actually have a negative impact on the future selling price. At the top of this list is the installation of a pool, and while lounging on the deck of your own pool is something you may enjoy, not everyone shares this feeling.

Families with small children, for example, often shun homes with pools over safety concerns. For others, the work and expense of maintaining a pool is not something they wish to take on further limiting demand for your home.

It is also common to see smaller homes that have had attached garages converted to an expanded living room or extra bedroom. Again, converting the garage may have served the owners well at the time, but the loss of garage space may be seen as undesirable by many potential buyers.

Align Your Priorities

Finally, while these things may not add to your home’s “curb appeal”, it’s important that major items are in good repair. Things like the condition of the roof, as well as the age of your cooling and heating systems, are all areas that new buyers will closely examine. If after conducting an inspection it is discovered that these critical systems costing thousands of dollars to replace are in poor repair, prospective buyers may insist on a lower purchase price, or may even pull their offer altogether.

Pino Decina

EVP Residential Mortgage Lending
Home Trust Company

20 Mar

How a DLC Mortgage Broker Can Really Help You!

Mortgage Tips

Posted by: Jordan Thomson

HOW A DLC MORTGAGE BROKER CAN REALLY HELP YOU!

How a DLC Mortgage Broker Can REALLY Help You!

While it’s certainly easy to be intimidated by the prices that you might see as you browse MLS into the wee hours of the night, mortgage interest rates are still at a historical low.  If you’re looking at purchasing for the first time, you’re thinking, “What does that mean?!”

With rates as low as they are, the cost of borrowing associated with your mortgage is lower than ever before.  You also need to look at other fees that can be tied to different mortgage products.  For example, some mortgages don’t allow for additional or increased payments, while others allow you to pay down your principal mortgage amount by up to an additional 20% per year, saving you money over the lifetime of your mortgage. It’s important to recognize and understand these options and fees, and that is where a Dominion Lending Centres Mortgage Broker comes in.  Brokers and their agents are experts in the products that they offer and will work to save you the most money.

Don’t worry!  A Broker can also help you take advantage of low interest rates as a homeowner, too!  It could be the right time to look at your other financials and consider consolidating other outside debts to take advantage of the savings that could be available to you.  It isn’t hard to see the savings between a balance owed on a credit card at 19% or the balance owing on your car at 6.25% and consolidating one (or both!) with your mortgage balance at much lower interest rate.  A broker can look at your current mortgage terms and timelines and can help you save a considerable amount of money each year!

A Mortgage Broker’s service doesn’t stop there.  Since the demand for new homes is so high right now, a Mortgage Broker will also help both first-timers and home-owners peeking around the markets with a pre-approval before you start considering making an offer on a new home. This means that you can confidently make an offer on the home that you love without making a condition on financing.  In a busy market, where purchases often end in bidding wars, having your financing in line could make your offer stand out against the rest.

Since properties are being scooped up like hotcakes, homeowners can also take advantage of selling their homes to downsize and save for retirement, or vacations, or spoiling their grandkids!

Now if you’d rather “love it” than “list it”, you can benefit from today’s high demand, too!  If you have been thinking about adding that basement bathroom, or are in need of upgrading your furnace and air conditioning units, a Broker can help you take advantage of the equity that you have gained in your home since you bought it.  In the last year, the demand for homes has soared, which means that your home could be worth a good chunk more than you might think.  Regardless if your mortgage is up for renewal or not, a Mortgage Broker can help you make sense of the mortgage that you’re in, and look at payout options that could work in your favour.  And a mortgage evaluation will always be free with a licensed Broker.

Today’s market has a lot of characteristics that can work in your favour, but can also throw a little wrench in your plans.  Always make sure to sit down with a licensed, local Dominion Lending Centres Broker to make sure you’re armed with the knowledge that you need to get the most for your money!

Thank you to DLC’s Tracy Valko for this info!

15 Mar

5 Common Mistakes to Avoid When Shopping For a Mortgage

Mortgage Tips

Posted by: Jordan Thomson

5 COMMON MISTAKES TO AVOID WHEN SHOPPING FOR A MORTGAGE

Avoid these 5 common mistakes, and you will have no problem getting your mortgage faster, more efficiently, and with a clear understanding of the process:

1. Thinking banks are the first and best place to go for a mortgage

Mortgage brokers can often beat the bank rates by using different lending institutions. The bank is limited to one lender, but if you use a mortgage broker, they have the option to shop for you with multiple lenders to find you the best product.

2. Not knowing your credit score

Your credit score is a HUGE factor in your mortgage application. The first thing lenders look at is your history and your score—then from there they build your file.

You should know where you stand because so much of your lending availability is tied to your credit score. In mere minutes, a mortgage broker can help you obtain a copy of your credit report, and go through it to ensure the information is correct.

3. Shopping with too many lenders

When you shop from institution to institution you will have your credit score pulled multiple times. Lenders typically frown upon this and it may interfere with your mortgage application. If you go to a mortgage broker though, your score is pulled ONE time only.

4. Not keeping your taxes up-to-date

Plain and simple: If you are self employed or the mortgage application is requiring a 2 year income average to qualify (utilizing overtime wages and/or bonuses) and you haven’t filed your taxes and kept them up to date, you cannot get a mortgage. Lenders will ask for your notice of assessment if your tax filings are not up to date, and you will not get your mortgage until they are filed properly and a Notice of Adjustment from the latest year it is received.

5. Not understanding that the real estate market you qualify in TODAY will adjust in the future

Rates may be at an all time low right now, but new rules, government regulation, and changes when you are up for renewal can change the circumstances. You must be able to carry your mortgage payment at a higher rate or with new laws imposed.

Remember, securing a mortgage isn’t always about getting the best deal. It’s about getting a home you want and establishing yourself as a homeowner. That means not overextending yourself and taking your qualifying amount to the maximum. Leave some breathing room because no one knows what the future may hold!

But one thing’s for sure – you should contact a mortgage professional at Dominion Lending Centres!

Thanks to DLC’s Geoff Lee for this info!