What’s Next For Your Home After A Separation?

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Growing up, most people dream about living that fairy tale life with a wonderful partner and a life of bliss. Unfortunately, real life is not always a fairy tale and not every relationship lasts forever. In fact, latest statistics show that 38 percent of all marriages in Canada end in divorce.

Separating, whether through divorce or ending a common law relationship, is never an easy step. Losing someone close to you (whether for the better or not) is hard – but it doesn’t have to mean losing your home too. Most individuals who are going through a separation expect that they will be forced to sell their home and split the equity, but there is another way.

Spousal buy-outs

Spousal buy-outs are one of the mortgage industries best kept secrets and we want to blow the lid on this great alternative! While not everyone will want to remain in their home, many individuals may opt to remain rooted – especially for those with children who are already enrolled in school and happy in their neighborhood. This is where the Spousal Buy-Out Program comes in.

Backed by all three of Canada’s mortgage insurance providers (Canada Mortgage and Housing Corporation, Sagen™ and Canada Guaranty), this program is designed to allow one party to refinance the shared home up to 95 percent of its appraised value. In order to qualify, both you and your ex-partner must currently be on the deed to the property. As a one-time opportunity, the Spousal Buy-Out Program can also be used to pay off other debts outside the separation agreement, further assisting with the transition.

Now you may be thinking “I wish I could, but I can’t afford it”. Well, don’t sell yourself short just yet! We understand the cost of purchasing a home, whether outright or from your partner, can be high. Fortunately, The Spousal Buy-Out Program was designed to help YOU and mitigates these costs by allowing individuals to bring on a co-signer, such as an existing family member or even a new partner, to assist.

If you are separating from your spouse or partner and would really like to hold onto your shared home, there are a few things you will need including:

  1. AN APPRAISAL

An appraisal report will likely have been obtained to determine Equalization of Assets. However, in some cases the appraisal may not be acceptable to a lender unless it was originally ordered by a third party. The appraisal must also have been produced within 90 days (less with some lenders) to ensure accuracy. If the original report was done more than 90 days previously, a new one must be obtained.

  1. A SIGNED SEPARATION AGREEMENT

To qualify the lender must be provided a signed copy of the separation agreement. The details of asset allocation must be clearly outlined.

  1. AN AGREEMENT OF PURCHASE AND SALE

A standard agreement of sale will be required indicating the new ownership.

  1. AN EMPLOYMENT LETTER OR RECENT PAY STUB

This is required so the lender can verify your ability to manage your mortgage payments.

  1. DEBT PAYOUT LIST

This is an optional one-time opportunity for paying off additional debts outside of the separation agreement. The proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly noted in the signed separation agreement.

Moving on in life can often be difficult, but this program allows you to maintain some of your routine and security by ensuring you – and your children – can remain in the home you love.  

 

By: Jason Woods 

 

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2021 Real Estate Market in Review: Hamilton

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It’s no secret that the housing market has been booming since the early days of the pandemic, but just how crazy is it? The Toronto Regional Real Estate Board (TRREB) recorded home sales at the second-highest level on record for October 2021. Inventory remains at an all-time low, with new listings down almost one-third compared to October 2020.

In the Hamilton-Burlington residential area, single-family detached properties are the most competitive, with an average price reaching a new record of $1,000,000. Townhouses had an eight percent increase in sales compared to September 2021, yet overall, sales began to dip slightly after the summer months.

“In line with seasonal trends, July and August tend to have fewer new listings and sales, which is exactly the case here,” says Realtors’ Association of Hamilton-Burlington (RAHB) President Donna Bacher. “Even though we have fewer active listings and sales, we are also seeing a slight dip in the average sale price. Overall, the same story continues, and that is that the level of inventory remains at critically low levels. We definitely need more supply on the market.”

Current Hamilton MLS® stats indicate an average house price of $877,800 as of October 2021.

Despite the slight drop in sales prices, there is still an urgent need for affordable housing solutions, and experts agree the government needs to step in.

“The only sustainable way to address housing affordability in the GTA is to deal with the persistent mismatch between demand and supply. Demand isn’t going away. And that’s why all three levels of government need to focus on supply. The federal government has stated that collaboration with provinces and municipalities is required. This collaboration could be spearheaded, at least in part, with housing-related incentives tied to federal infrastructure investment,” said TRREB President Kevin Crigger.

So, if demand is so high, it begs the question – why is inventory so low?

For one thing, housing development slowed considerably during the pandemic, with some builds just starting to pick back up again. And while builders may now have the green light, soaring lumber prices have made construction more costly and complex. The supply chain has been backed up for almost two years which results in even more delays. Existing plans have either been scrapped altogether or require builders to accept losses, neither a favourable option. In many cases, projects have been put on hold until corporations assess the pandemic’s overall impact on the construction sector.

Outside of Toronto, many suburbs have seen changes in zoning to protect the Green Belt. While this is a positive for protecting the environment and green space, much of the current zoning is outdated and requires a new strategy to consider the growing population while protecting vulnerable areas.

In addition, many homebuyers who at one time could list their home knowing they’d find something quickly once it sold are now afraid that low inventory means not finding a property in the area they want or at a price they can afford. Bidding wars also turn many homebuyers off. The high stress of multiple bids and a highly competitive market create a better argument for staying put and upgrading the current home instead.

Wherever you sat on the spectrum this year, it was undoubtedly an exciting market to watch.

By: Julie Achtermeier

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The Exploding Real Estate Market & Where It’s Headed

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Over the past ten years, we’ve seen a steady climb in real estate prices across Ontario. Despite some fluctuations over the years, prices have remained high while interest rates have remained relatively low. The onset of the pandemic 18 months ago caused a surprising spike in house prices, especially in the suburbs, as families moved outside city limits for more space and a new remote work lifestyle. Lack of inventory led to bidding wars becoming the norm, and it wasn’t unusual to see a home sell for $100K over asking.

Almost two years later, the market is beginning to stabilize with prices levelling out, yet the overall average sale price has not dropped.

“There is such low inventory that if a property gets nine offers, the eight whose offers aren’t accepted are still looking for a home,” explains Rina DiRisio from Royal LePage Real Estate Services Ltd.

Despite a slight increase in inventory in recent months, many potential sellers are too nervous about selling. “There’s a real reluctance to sell right now,” explains Rina. “Homeowners are afraid if they sell their home, even for top dollar, they won’t be able to find a home to move into, and this is a real concern.” It also contributes to the low inventory issue, creating a bigger problem in the market.

WHAT WILL IT TAKE TO CAUSE A MARKET CORRECTION?

“Without any real government intervention, the only way a market correction can happen is if interest rates go up, and that’s horrible news for homeowners,” says Jordan Zalter of RE/MAX Escarpment Realty in Ancaster. “At the same time, the only way supply will increase is if people are forced to leave their homes, also not a good solution.”

Despite some rumblings of housing correction promises during the federal election, the government has lacked any real leadership to solve the affordability issues.

The Ontario Real Estate Association (OREA) has a proposed plan to make homeownership an attainable dream once again, and it would serve the government well to listen. The focus centres around two main areas: Lowering the land transfer tax for first-time homebuyers and introducing Save the Canadian Dream Act, 2021 (to build on the current Housing Supply Action Plan). The Act would permit innovative housing solutions, stop
money laundering in the real estate market and end exclusionary single-family zoning. For more information, visit https://bringaffordabilityhome.com/our-plan

JEOPARDIZING A GENERATION?

For first-time homebuyers, the dream of homeownership continues to feel out of reach. Tighter lending rules went into effect in July 2021, making it more difficult for buyers to get approved for a mortgage, but it hasn’t corrected real estate prices yet. While the stress test now requires all borrowers to qualify for their mortgage payments at 5.25% (up from 4.79%), established homeowners motivated to buy can still use the equity in
their homes. It’s the first-time buyers who struggle the most. “We see a lot of parents helping their adult children get into the market,” says Rina.
“Without the financial help, most first-time homebuyers are effectively shut out of the market.”

And, where first-time homebuyers were once able to buy in the suburbs, they are now looking even further into rural areas or sacrificing space for more affordable condo living.

Real estate experts advise getting into the market if they can, despite the adversity first-time homebuyers face. Prices will only continue to climb, even if they climb more slowly.

“The most realistic advice I can give to first-time homebuyers is don’t wait on the sidelines for prices to drop because historically, they haven’t,” explains Jordan. “If you want into the market, you may need to adjust your expectations and location as well as ensure you don’t buy more than you can afford, but you should get out there and do it.”

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7 Questions to Ask a Potential Contractor

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When it comes to renovating your home, be it a kitchen remodel or a bathroom overhaul, you want to be sure you hire the right professional for the job. This is the person you are depending on to tear down your walls and spend your dollars wisely. Avoid a renovation nightmare by researching a few different contractors and setting up an interview with each of them. Here are seven interview questions to ask a potential contractor to ensure you hire the right pro!

1 Are you licensed, bonded and insured?

Contractors in Ontario must work through Tarion, a program created by the province, to become registered in their profession. Make sure you ask to confirm that they are registered, and that they carry insurance. If they are insured, so are their employees. This is vital when choosing a contractor, because if they are not insured and someone gets injured on your property, you will be liable and they can sue. Bonds, such as a surety bond, will ensure that if they go out of business mid-renovation or they do not finish the job for another reason, you are not liable for the additional costs to fix the job or pay their bill.

2 What is the cost breakdown?

Never settle for a general or overall price estimate. Asking for an itemized cost breakdown is a vital step in the interview process. This way, you can see what they are charging you for and decide on any changes before they start. Oftentimes, there are many hidden fees that a homeowner may never know about. With a cost breakdown, you can discuss your options, update plans and even consider more cost-effective materials for your project.

3 What is the anticipated timeline for this project?

After discussing the cost, you want to understand how much time your project will take. Of course, you will likely not be offered a set finish date, as weather and other incidents may change things. Remember that delays are common and unforeseen circumstances may end up changing the completion date. Work closely with the contractor to set an anticipated start and end date, and if you need the work finished by a specific date, be sure to mention this now rather than later.

4 How long have you worked in this area?

In order to build a good reputation in a city or community, contractors must perform at a high-quality standard. Understanding how long they have been in business and how long their employees have been working with them will give you a better idea of how the finished product will look. If they have experience working in your area before, they will have a better understanding of permit regulations and any possible issues in your area, such as piping and electrical work, that you may not be privy to.

5 Can you share references from past customers?

Previous customers are your best source of information on how well a contractor performed. In addition to doing your own research and reading online reviews, ask them to share a few past customers for you to speak with. When you do reach out, ask questions such as, “Were deadlines and expectations met?” and “What were your best and worst experiences working with this contractor?” This will help you get a better understanding of the contractor’s communication skills, as well as the quality of work you are paying them for.

6 Will you obtain the correct permits?

Permits are almost always required for professional remodeling jobs. Make sure that your potential contractor understands the rules and guidelines for permits in your area, and that they will help to schedule a visit from an inspector. Once a building inspector reviews the project and approves it, your contractor will be issued a permit to start the work. Remember to ask for copies of any and all permits for your records. If a contractor tells you they do not need a permit, do not hire them!

7 Can we put everything in writing?

In addition to collecting copies of the required permits, you want to ensure everything is put in writing. Every detail should be included in a contract, such as payment schedules, cost breakdown, timetables, materials purchased and other essential information. Before you decide on a contractor, be sure contracts are complete and signed before any work is started. Do not trust a contractor who refuses to put things in writing or tries to talk you out of a contract.

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Should You Buy A Student Rental Property?

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If you have children about to enter university or are considering a property investment, purchasing a home to rent in a university town can be a lucrative business. But before you hire a realtor, be sure to do some research and understand this new venture’s benefits and potential drawbacks.

Benefits of Renting to Students

Choosing a property close to the school ensures you will always be able to fill the home with student renters who are looking for affordable housing. International students present an opportunity for a steady income stream as most come to Canada alone and must rent accommodation.

Renting to students can seem a bit daunting as these are tenants without a credit history and no source of income, but in most cases their parents are paying their way and will be the ones responsible for the rent. Getting a parent or guardian to sign the rental agreement helps ensure you will be issue-free throughout the year.

As a bonus, if you have a child attending university, you have the peace of mind knowing you’re providing a safe home for them to live in while they attend school.

Drawbacks of Student Rental Properties

The main downside of renting to students is that they are young adults who are not accustomed to looking after a home and may not treat it with the same care and consideration as a mature working adult. Parties run rampant in university settings, which can lead to unruly behaviour and damage to the home. There is also the concern of uncleanliness and improperly stored food, leading to vermin, mould, or insects. Choose your tenants wisely!

Becoming a landlord in another city or town makes it more challenging to maintain the property, like cutting the grass or replacing a broken appliance. If your primary residence is more than an hour away from the rental, it would be wise to find a local plumber or home improvement company in the area to save you a long drive in the evening to unclog a toilet.

What to Consider When Purchasing a Property for Student Tenants

Ultimately, you want the rent to cover the mortgage cost and have some additional money set aside for repairs or emergencies. It makes the most sense to purchase a home with maximum rental space. A 3-bedroom home can become a 4- or 5-bedroom by adding two rooms in the basement, for example.

Today’s student is looking for affordable, yet desirable living accommodations so minor upgrades will go a long way. Choose quality products for installations like toilets and sinks. While it may cost a few extra hundred dollars upfront, they will last longer and cause you less in repairs in the long run. When choosing flooring, use laminate or vinyl-tiled options, which are cost-effective and durable.

Where to Buy

A recent report from Canadian Real Estate Magazine listed the top five cities for making a real estate investment in 2021. Ironically, all five have a large Canadian university. Windsor (University of Windsor and Odette School of Business), Guelph (University of Guelph), Hamilton (McMaster University), Kingston (Queen’s University) and Vancouver (University of British Columbia). With the exception of Vancouver, each of these cities boast an affordable housing market which makes it a win-win situation when combining affordable house prices with a high demand for rentals.

Overall, students can be great tenants, and their short-term leases allow you time for updates, renovations, or the flexibility to sell when the time is right. With the proper planning and foresight, renting to students can be a rewarding and lucrative business.

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Choosing Your Mortgage Broker

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There is a little doubt that the biggest purchase of your life will be your home. When embarking on your home ownership journey, having the right support and information will make all the difference. Fortunately, as a mortgage broker I can help!

With access to more than 230 lending institutions including big banks, credit unions and trust companies, mortgage brokers are experts in mortgages. These connections provide them with a vast array of available mortgage products, and also ensures that the advice they offer is unbiased. A mortgage broker is a third-party service provider who gets paid no matter which bank they sign you with. This means they can provide the best rate AND unbiased advice because they are focused on helping you achieve your dream.

It is estimated there are nearly 20,000 mortgage professionals in Canada. With so many choices, it is important to find a mortgage broker who works best FOR YOU.

With so much information at your fingertips on any given broker, how do you narrow down the search? Tools like the Dominion Lending Centres – TLC Mortgage Group’s exclusive My Mortgage Toolbox app make it easier. The app is available on Google Play and at the iStore.

Some features available through this application include a variety of calculators to help clients determine:

  1. What you can afford
  2. The minimum down payment required
  3. Closing cost estimates
  4. Total monthly ownership costs

While mortgage brokers spend a lot of their time neck-deep in mortgages and tend to use industry jargon, a professional broker will understand if you are a first-time homebuyer and will do his or her best to explain the terms and the process to you. Understanding is vital in your home ownership journey, so make sure to seek out a broker who is going to keep it simple for you and be honest, allowing you to understand exactly what you’re getting in your mortgage.

When choosing the mortgage product that is right for you, don’t be blinded by interest rates. It is important that your broker explains everything to you from term conditions to penalties, as well as why you qualified for the rate you have been offered. Of course, the rate matters, but the characteristics of your mortgage matter more, and could end up costing you in the long run. You want a broker who’s going to listen to you and ask you about your needs and future goals. What are your plans five or ten years from now? Why are they so important to you as an individual? When looking at any mortgage product, consider that nearly 70 percent of mortgages are broken within three years. Even if you’re sure of your future today, life happens and tomorrow could be different. Therefore, you must consider the penalties for ducking out of your mortgage earlier and you should know if it is portable.

The best mortgage brokers in the business will make sure all of your bases are covered, and you’re fully aware of what you’re signing onto. The right broker will make the process easier for you, whether it’s buying your first home, shopping for a better rate, or even jumping into investment properties. No matter what stage of life you are in, we’ve got a mortgage product – and a broker – for that!

 

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Got Kids? 5 Things to Look for in a Home

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Searching for a home on its own can be stressful enough. Throwing kids into the mix can leave you feeling frustrated and overwhelmed. To make the experience more enjoyable for all, consider this advice when house-hunting with a young family.

Location, Location, Location

It always comes back to location, and when you have kids, location is more important than ever. Depending on your children’s ages and interests, where you choose to raise your family can significantly impact how everyone settles in. Consider the type of community you want – rural, urban or suburban? A quiet life in the country sounds lovely, but if it’s a long way from schools, community centres or shopping, you could spend a considerable amount of time driving back and forth. Likewise, a city atmosphere may not be ideal if children have no place to play or the streets are busy.

Proximity to Schools

Considering the home’s proximity to schools may seem obvious, but it’s surprising how many people talk themselves into the “perfect” home only to discover it’s too far from a school or the walking route isn’t safe (think busy intersections or no sidewalks). Your employment situation and hours can also impact the ideal school location – will you be walking the kids or dropping them off on the way to work? The reputation of the school is also important and what it offers in addition to education. Does it have sports teams or an arts program? A home close to a good quality school will also keep reselling prices high, making selling easier if you choose to move again down the road.

Size and Layout of the Home

When considering the size of the home you need, take into account the sports or activities your children play. A hockey player may need a mudroom to store smelly equipment, whereas a musician may need instruments in a finished basement to keep noise levels down. Also, consider how long you plan to stay in the home. If this is a long-term move, will the space be large enough for teenagers or young adults? Students who go away to university or college usually move back home for a while as they search for employment and save for rent or a down payment. You may want to consider a basement with an apartment or a walk-out with a separate entrance.

It Takes a Village

It takes a village to raise a child – even in 2021. Finding a community where you can meet like-minded families is key to creating a happy home environment. Research the demographics for the area and determine if there are other families with children of similar ages. Check crime rates to determine if the neighbourhood will be safe for you and your family, then take a walk through the streets and get a good feel for the area. Can you see yourself there? Does it feel right? Your gut instincts can say a lot about a place, so take the time and check it out thoroughly.

Let Your Kids be Part of the Process

Depending on the age of your children, keeping them involved in house hunting as much as possible will make the prospect of moving more exciting. Ultimately, you will decide where to live, but involving them may go a long way to creating an easier transition. Consider leaving them at home for the initial visit and include them only when you have narrowed down your search. There’s a fine line between confusing them with too many options and keeping them involved, so try not to schedule more than two house visits in one outing. Kids who get bored will also become more disruptive and could cause tension during the visit.

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Market Update: Hamilton

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Are You Ready for Home Ownership?

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While most people know the main things they need to buy a home, such as stable employment and enough money for a down payment, there are a few other factors that may help you realize that you’re ready – perhaps even earlier than you thought! In fact, there are four  main things that can help you determine if you are ready for home ownership.

YOU CAN AFFORD YOUR DOWN PAYMENT AND ONGOING COSTS

It is easy for potential homeowners to get wrapped up in focusing on having enough money for the down payment and then forget about afterwards. It is important that you are not only financially able to afford the down payment, but that you can manage the monthly mortgage payments and ongoing maintenance as well. The My Mortgage Toolbox app from Dominion Lending Centres has some great calculators to help you determine what you can afford on a monthly basis before you get in too deep. You can scan the QR code below to download the app.  If you have enough funds in the bank for a down payment and are able to manage the monthly costs associated with the size and price range of home you would need, then you may be ready to start house-hunting!

YOU HAVE GOOD CREDIT

As most people know, credit score plays a major role in qualifying for financing to purchase a home. If you have a good credit score, which should now be at least 680 to qualify, then you have nothing to worry about! However, if your credit score is below this, it is more likely that you will be paying higher interest rates (and therefore have higher payments), or that you could be denied all-together. Before you begin your home buying journey, it is vital to have your credit score in order to ensure you can get the best mortgage product and rates. Working with a mortgage professional can help you get on the right track in the shortest time possible. Sometimes all that’s needed are a few subtle changes, or debt consolidation, to improve your credit score within a couple of months.

NO OTHER LARGE, UPCOMING EXPENSES

Do you plan on buying two new vehicles in the next two years? Are you thinking of starting a family? Are you considering going back to school? Although you may think you can afford to purchase a home right now, it is vital to be honest about your future plans. What does your life look like in 1 year? 5 years? 10 years? If you know that you aren’t planning on incurring big expenses that you need to factor into your budget anytime soon, then that’s something that may help you decide to buy a home.

YOU ARE DISCIPLINED

One of the most important factors for purchasing a home is budgeting. You have to know what you can afford – and stick with it! It is easy to be tempted by a gorgeous 6 bedroom home or a backyard pool or private community, but at what cost? If going all-in is going to leave you scrambling each pay cheque or derail any plans of future financial stability, it is worth rethinking. Understanding what you NEED in a new home, versus what you WANT, is a good step towards determining what you’re looking for and planning a budget that suits your needs so that you can continue to live comfortably.

 

These are just four signs that you may be ready to purchase a home. If you’re seriously considering buying or selling, reach out to me today to ensure you have the best experience when it comes to buying a home!

 

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MARKET UPDATE – HAMILTON

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