Bruce Coleman Mortgage Brokers

Tips to Make your Home Renovations Profitable – Consult with a Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

Tips to Make your Home Renovations Profitable

There are many older homes in the City of Vancouver. If you’re either buying an older home or planning to put yours on the market then you should know you can add some significant value to your house by incorporating some remodelling or renovation work.

Some home renovation projects are well worth the return on your investment. You can not only increase the value of the house but earn back the money you invested by selecting the right kinds of home renovation projects so you aren’t left out of pocket.

Here are some suggestions for you to consider making your home not only more marketable but to also sell it more quickly when you do put it up for sale.

Home Project Repairs

You might be surprised to know that even minor repairs can make your property more appealing to buyers.

Some of the better repair projects are relatively simple. You can have you windows re-caulked and fix the gutters if they are warped or not functioning. You can replace an exterior door if it looks too weathered and sun beaten.

The interior of the home can always use some repairs such as applying new grouting to your tiles, or replacing dated plumbing fixtures such as faucets which might be tarnished or stained. Even something simple as replacing a toilet seat and adding some new towel racks can quickly spruce up the bathroom

Take a look at your walls and start by taking down a painting that’s been hanging on the wall for a few years and look at the difference. Plasterboard and drywall takes a beating not only from wear and tear but can crack or buckle slightly as the house settles. This might be the perfect time to fix those dings and cracks and apply a new paint job.

Simple jobs like this can make all the difference when it comes to enhancing the appeal of an older home.

Major renovations

There are other major renovation projects which can increase the value of the home. One of the primary areas which have an excellent return on your investment includes a new roof replacement if yours is excessively old and showing significant signs of deterioration.

Two other areas which also could use a significant makeover especially if they have been untouched for awhile include the kitchen and the bathroom. Both of these projects can be costly and should be planned well before you undertake them.

However, these are two of the prime areas that prospective buyers look at when they view a home and base their decision to buy or leave alone. A renovation project to upgrade your kitchen or bathroom can also include more eco-friendly aspects which also have added appeal.

If you have areas such as your basement which are unfinished or in poor shape then this can also be a profitable home renovation project especially if it enhances the additional living space.

Some projects which have a very poor return on your investment include adding on additional room to increase square footage. Other projects which can be costly and don’t provide a good return include adding a pool or performing major landscaping renovations unless you plan to live in the house for a number of years.

Home renovations are popular these days and for good reasons. Upgrading your home with more technologically advanced and environmentally friendly technology can also help you save money over time.

Pick the right term, pay off mortgage faster – Ask Bruce Coleman, Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at Verico IntelliMortgage, a mortgage brokerage.

You can also follow him on twitter at @CdnMortgageNews

The trick to making a mortgage disappear faster is to minimize your total borrowing cost. And nothing dictates total borrowing cost more than the term you chose.

Picking the right term is even more important than selecting the best lender, choosing the appropriate mortgage features and finding the lowest rate. Choosing the wrong term can lock you into a punitive rate for years to come or, conversely, expose you to rising rates because you haven’t locked in for long enough.

“Term” refers to the length of a mortgage contract. The most common option is the five-year fixed term, chosen by well over half of Canadian borrowers.

But popularity doesn’t make a mortgage right for you. The ideal term will vary as interest rates and your financial circumstances change.

In the last two months, longer-term fixed rates have jumped by up to half a percentage point. That’s made certain terms less appetizing than others. These are some of the best and worst terms du jour – the stars and the dogs of today’s mortgage market.

THE STARS

Four-year fixed

Four-year fixed rates are still less than 3 per cent, and will save you about one-third of a percentage point versus the interest rate on a five-year fixed term. Multiply that by four years and you’re talking about potential savings of more than a couple thousand dollars of interest on a $200,000 mortgage.

To be sure, a five-year fixed term may shield you from rate hikes for one extra year, but it also boosts your chances of paying a penalty if you break or renegotiate your mortgage early.

If you instead take a four-year term and renew into a one-year term, you’ve covered the same five-year timespan and given yourself more flexibility in the process. Bump up the payment on your four-year mortgage to match a higher five-year payment and you’ll whittle down your mortgage even quicker.

One-year fixed

One-year fixed mortgages are low-margin products that most lenders don’t push, but they can be an attractive product for the right borrower. For starters, one-year fixed mortgages come with rock-bottom interest rates, roughly 2.39 per cent as we speak.

That’s a good solution for well-qualified borrowers with less than 15 years remaining on their mortgage – who don’t mind taking a gamble that interest rates will stay low for longer.

One-year terms are also an ideal substitute for a variable rate. The rates on a one-year term are lower up front and you can renew into a variable rate mortgage in 2014, a time when many expect variable-rate discounts to improve. If you would rather lock into a fixed rate at renewal, you can secure that rate ahead of time – typically six to nine months after starting your one-year mortgage.

THE DOGS

Five-year variable

You’ll save 0.40 percentage points by choosing a variable rate mortgage instead of a four-year fixed term. But you give up all rate protection, which could come in handy by 2015. Moreover, the 0.5 percentage point discounts on the prime rate (that today’s variable mortgages offer) could improve by next year with a drop in lenders’ cost of funding these mortgages.

Three-year fixed

Unless there’s a good chance you’ll break your mortgage in three years, look elsewhere. The 0.10 percentage points you’ll save off a four-year fixed term could easily be offset by higher rates when you renew.

Seven-year fixed

Mathematically, seven-year terms are a bad idea and almost always have been.

The few extra years of certainty simply don’t justify the rate premium you’ll pay over a four- or five-year fixed rate.

If you’re that worried about inflation driving up interest rates, shell out another tenth of a percentage point and get a 10-year term.

THE IDEAL MORTGAGE

Calling one mortgage term the “best” is like declaring the best flavour of ice cream. The ideal mortgage is different things to different people.

Picking the right term rests on your individual circumstances and will depend upon the risks that you may face. If there’s a significant possibility that your cash flow may dip in a few years, or that you won’t be able to prove your income or credit worthiness at renewal, then a one– or four-year mortgage may not be worth it.

Instead, the extra up-front cost of a 10-year fixed might actually be justified.

Moreover, if your debt levels are above-average, you might not even qualify for a variable-rate or a one- to four-year fixed term. (Lenders’ affordability standards are stricter on those terms.) If that’s the case, you may be forced into a five- or 10-year fixed term. There’s no question that more folks will wind up in this boat as rates climb and qualifying becomes tougher.

All that said, spend as much time on picking a term as you do on picking a rate. Your investment in time will pay dividends through lower borrowing costs.

Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at Verico IntelliMortgage, a mortgage brokerage.

You can also follow him on twitter at @CdnMortgageNews

Get a mortgage without a salary – Consult with a Vancouver Mortgage Broker for help

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

There are things that you can do to help you qualify for a mortgage.

Landing a mortgage is trickier for the self-employed than their salaried counterparts. Not only do self-employed people face higher interest rates and CMHC mortgage insurance premiums, they are also more likely to have their loan applications rejected outright. If you’re self-employed, you’re best off seeing a mortgage broker a few years prior to your purchase so you can make a plan.

It sounds counterintuitive, but you may want to keep tax deductions to a minimum for at least two years before applying for a mortgage. You’ll show more income on your tax return, which will make it easier to qualify. “It’s about foregoing some short-term tax savings in order to qualify for a future mortgage,” says Scott Plaskett, CEO at Ironshield Financial Planning. You want to show income stability, he says.

Keep in mind that the larger the down payment, the better your chances of getting a low-rate mortgage, as greater equity means less risk to your lender. While banks are fairly strict on their lending criteria, a mortgage broker can help you access other types of lenders that are more likely to approve your loan.

-Vanessa Santilli

By Special to MoneySense | From MoneySense Magazine, Summer 2013

101 Series – Preparing your Landscaping for Home Viewing Re-Sale

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

One of the first things that a prospective buyer notices when they approach your home is your front yard. This is known as “curb appeal” and makes a vital first impression when you are trying to sell your home.

How important is the quality of yard? Well, you might be surprised to learn that a well-groomed front yard actually helps sell a home five times quicker than an unkempt yard. It’s the psychological effect that can create a positive or a negative mindset of a prospective buyer before they even step inside your home.

Although you might have taken the time and spent some money on prepping the inside of your home, take some time and groom the exterior as well.

Here are a few ideas to get you started in the right direction.

Planning

You want to draw u some kind of plan before you make any landscaping improvements. Most landscaping experts suggest you take a two-fold approach. The reason is that most properties consist of both the front and the back yard.

You should draw a scaled diagram and for both yards and consider that each has a different function. The front yard is a reflection of the people who own the home and what you want to focus on here is “eye-appeal.”  This is the area that should concentrate on a bit of artistic endeavour.

The back yard is where people like to relax and enjoy their down-time. Here, you might want to consider both privacy and the deck area along with an aesthetic or functional approach.

Basic Maintenance

If you don’t have the cash or a lot of time to spend on your yards, you still have to do the basic maintenance when you are showing your house. Sweeping the walkway or hosing down the driveway will make it look cleaner.

Don’t forget your exterior windows and make sure they look nice and clean. Sweep away any cobwebs and maybe consider adding some fresh caulking if it’s looking old, weathered or cracked.

You also might want to consider pressure washing the siding or the back yard deck. If your deck is showing a bit of wear and tear then you it might be time for some fresh staining.

If you have a wooden door or shutters, then a bit of prep work and some fresh paint can make all the difference.

You want to weed any flower beds, and trim away all the dead branches. It is also a good idea to neatly trim the edges of flower or shrub beds. And, nothing makes a yard look more appealing when the lawn is freshly mowed and raked.

Also, clear away any clutter such as toys, bikes and tools because the neater the look the greater the appeal it has for a prospective buyer.

Increase Eye Appeal by Adding Some Colour

If your front yard is plain or bland looking than you might want to add some colour to give your property some extra visual impact. If you’re are lacking some ideas then take a walk around the neighbourhood to see what catches your eye or visit the local garden center as they have the expertise on how to get some very appealing colour contrast that will add some visual appeal.

You can get perennials or shrubs that flower at different times of the growing season so your yards always have some stunning colour that stands out.

It’s the little things that catches a person’s eye and says a lot about the people who own the house.

Rent-to-own works, but beware the pitfalls – Ask Bruce Coleman, Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Renting to own a house can be a very effective way for a buyer without enough of a down payment to buy a home. But do your homework.

By: Mark Weisleder Real Estate

Can you handle higher interest rates? – Consult with a Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

Garry Marr  | @DustyWallet

It may be stressful to think about it but higher mortgage rates are on the horizon.

The questions for homeowners is whether they can handle a hike in interest rates.

Bank of Montreal says consumers should stress test their mortgages a couple of ways, considering higher interest rates and a shorter amortization period.

Canadians new to the home market can be particularly vulnerable to changes in the mortgage market.

“First-time buyers should stress-test their mortgage to ensure they are well financially prepared for home ownership and a potential upswing in interest rates, not only to manage costs but also to pay off their mortgage as soon as possible,” said Frances Hinojosa, a mortgage expert with Bank of Montreal.

While new governor Stephen Poloz did not raise the overnight lending rate, the Bank of Canada did indicate this past week the long-term goal is still a “gradual normalization” of rates. The overnight lending rate, which prime tracks, has an immediate impact on variable rate mortgage.

Consumers with long-term loans may already be feeling the squeeze. If you are coming up for renewal, it may be time to work in higher rates into your budget.

The fixed-rate five-year closed mortgage, which was once as low as 2.99%, has risen steadily in the past few weeks and is closer to 3.5% at most banks. It’s only a different of 50 basis points but it means a larger payment.

On a $500,000 mortgage with a 25-year amortization, at 3% your monthly payment would be $2,366.23 and you would pay $69,346.66 in interest over a five-year term. Take that same mortgage and raise the rate to 3.5% and the monthly payment jumps to $2,496.36 and the interest over the term reaches $81,180.96.

The real question might be what are you going to do if rates rise to 5%. That $500,000 mortgage with a 25-year amortization would now cost you $2,908.03 and the total interest cost over the five-year term would jump to $117,018.99.

“It remains vital for Canadians, particularly homeowners, to be prepared for for the inevitable rise in interest rates,” said Ms. Hinojosa, adding Canadians should also consider shorter amortization periods.

It’s been just over a year since federal government cracked on the maximum length allowed for amortization for insured mortgages backed by taxpayers. The maximum length is now 25 years, down from a peak of 40 years. A longer amortization period lowers monthly payments and allows consumers to qualify for a larger loan.

That $500,000 mortgage with a 5% rate would become even more burdensome if the amortization length was cut to say 20 years — not something Ottawa is currently considering though.

With a 20 year amortization, the monthly payment would jump to $3,285.63. The good news is the interest over the five-year term would drop to $114,029.48

gmarr@nationalpost.com
Financial Post
twitter.com/dustywallet

How to turn your property into a vacation rental- Ask a Vancouver Mortgage broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

Want to make a few extra bucks renting out your home when you’re out of town? Or maybe you have a cottage you’d like to rent out when you’re not using it. Here’s what you need to know to turn your property into a money-making vacation destination.

Dropping off the keys

All property owners have their own rules about handing over the keys, says Bordo. Some hide them under a rock, others have secure key holders near the front door that require a pass code. Some even take the time to meet with renters in person and walk them around the property. Returning the keys can be as simple as tossing them through a mail slot in the door.

Go the extra mile

“Marketing your property doesn’t end when your renter signs up,” says Bordo. You need to offer the same level of hospitality as a hotel. “Leave a bottle of wine or chocolates as thank-you gifts,” says Bordo. Doing so will help ensure they’ll rent from you again and they’ll give you a great review.”

Avoiding problem guests

Worried your place will be trashed? Ask your renters for references and look them up on Facebook and LinkedIn—a professional is less likely to punch holes in your walls. Rental sites can tell you if anyone has lodged a complaint about them. If you’re really worried, try meeting the renter in person or chat by phone. As a final protection make sure you ask for a deposit of between 15% to 20% of the rental fee to pay for any damages.

Your sales pitch

Before you can rent your place, you have to get noticed. Sites likeCottageCountry.com and Airbnb offer one-stop spots for listings, but you still need to stand out from the crowd. Start by writing a detailed description of your property that flaunts the features of your place and highlights local amenities and activities, says Mark Bordo, founder and president of CottageCountry.com. Crisp high-quality photos are key. Make sure rooms are cleared of clutter and well-lit.

Make sure you’re covered

“Once you start offering your property for rent the standard home insurance policy won’t apply,” warns Pete Karageorgos of the Insurance Bureau of Canada. If renters damage your property you may not be covered. Before you rent, call your insurance company to add appropriate coverage (usually called a rider or endorsement), he says. You also need to be aware of any local or provincial laws that could restrict short-term rentals.

What should you charge?

Airbnb suggests researching nearby hotels and other vacation rentals to get a sense of what the market will bear. Low prices are a good way to get people through the door initially and will help you build up reviews. There’s money to be made: The average place on CottageCountry.com goes for about $1,500 a week. The major sites accept credit cards from renters and pay you directly so you don’t have to worry about a renter skipping out on the bill. Typically the money is transferred to you via PayPal when the renter leaves.

More Canadians in debt, making lower monthly payments poll finds – Consult with Bruce Coleman, Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

By: Linda Nguyen The Canadian Press

101 Series: How to Find an Interior Designer – Consult with a Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

Self Employed

Whether you just bought a home or condo, you might not be satisfied with the look. It doesn’t matter whether it’s a brand new or older property as you want may very well likely want to make your own statement about what your new purchase says about you.

How to Pay Off Your Mortgage Faster with the Right Term – As a Vancouver Mortgage Broker

Canadian Mortgage News

CMI 101 Series

Dreyer Group 101 Series

First Time Buyers

Home Buying 101

Home Insurance

Latest News

Mortgage Rates

Refinancing

How to Pay Off Your Mortgage Faster with the Right Term

One of the best ways to pay off your mortgage quicker is to reduce the cost of how much you borrow. There is nothing which impacts this more than the term you select for your mortgage.

Choosing the most suitable term is more vital than even finding the lowest mortgage rates or features found in your mortgage contract. Finding the best term can protect you from being locked into a punitive rate or from increasing rates if you neglected to lock yourself in for a sufficiently longer term.

What is meant by a mortgage “term?” It simply refers to the actual length of the contract for your mortgage. The most popular term selected by over 50 percent of Canadian mortgage borrowers is the 5 year fixed term.

However, keep in mind that simply because a 5 year fixed is more popular doesn’t necessarily mean it’s right for your particular situation. The reason is that the ideal term  will vary and is dependent according to how interest rates change and to your specific financial predicament.

For example, in just the last 2 months alone, some of the longer-term fixed rates have increased by as much as half a percentage point which has made some terms less appetizing.

Here are some of the best and worst terms that are currently found on the mortgage circuit.

Best Current Term Mortgages 

1. Four-year fixed Term

You will find many four-year fixed rates which are still below 3 per cent. With this term you can save yourself almost as much as a third of a percentage point than the interest which you would find on a five-year fixed term.

This could mean a savings as much as $2,000 over 4 years on a mortgage worth $2,000.000. Although a 5 year term might give you an extra year of protection from a rate increase, you are also more likely to have pay a penalty should you to decide to renegotiate or break from your mortgage before the term expires.

You could take a 4 year term and renew into a 1 year term so that you still get 5 years protection from rate increases and greater flexibility.

2. One-year fixed Term

Many lenders don’t push the one year term because of their low margin but they can be very handy in certain circumstances. One reason is that they have extremely low rates and are presently at around 2.39 percent. They can be a very suitable choice for people who have less than 15 years on their mortgage and are willing to take the risk that rates will continue to remain low.

A 1 year term can also be a suitable alternative for a variable rate.

Terms to Avoid 

Here are some terms you presently avoid.

1. Five-year variable Term

Although you might save as much as 0.40 percentage points with this term versus a four-year fixed term, you also lose your rate protection which might be important come 2015.

2. Three-year fixed Term

If your not planning to break your mortgage in three years, then you should select something else because the 0.10 percentage points you could save from a four-year fixed term might be offset by higher rates when you go to renew.

3. Seven-year fixed Term

From a math perspective a 7 year term has always been considered a poor choice because you really can’t justify the premium rate, and if you are concerned about whether inflation will raise interest rates that it might well be worth while to pay another 1/10^th of a percentage point and get yourself a 10 year term instead.

Choose your Term Wisely

In some instances you might not even qualify for some of these terms and it a lot depends on your individual and future financial circumstances when it comes to a renewal. The bottom line is that you should spend as much time picking the most suitable term for your needs as you do in choosing interest rates.