Archive for the ‘Buying’ Category

As a Buyer, You Don’t Pay The Realtor’s Commission

So many first time buyers wonder, “do you have to pay a real estate agent if you are buying a home?” For some, the thought of having to shell out extra cash when they are already doing all they can to save for their down payment is enough to make them walk away from the entire process before they even get going. Many are surprised to find out that the answer is actually no. A home buyer does not pay their agent, rather the agent earns their commission from the seller side of the transaction.

Need help finding an agent? Connect with Earl Taylor


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As a result of its annual review of its insurance products and capital requirements, CMHC is increasing its mortgage loan insurance premiums for homeowner and 1- 4 unit rental properties to reflect its increased capital targets.
CMHC’s capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Higher capital targets are consistent with Canadian and international industry trends and make the financial system more stable and resilient. As CMHC mortgage insurance is backed by taxpayers, capital holdings reduce Canadian taxpayers’ exposure to the housing market, and contribute to the long term stability of the financial system.
For the average Canadian homebuyer requiring CMHC-insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market. Effective May 1, 2014, the premiums will increase by 15%, on average.

The premiums** and premium surcharges will be as follows:
Standard Premiums Loan-to-Value Ratio Total Loan Amount Increase to Loan Amount
Up to and including 65% 0.50% 0.60%
Up to and including 75% 0.65% 0.75%
Up to and including 80% 1.00% 1.25%
Up to and including 85% 1.75% 1.80%
Up to and including 90% 2.00% 2.40%
Up to and including 95% 2.75% 3.15%
90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%

Self-Employed Borrowers without Third Party Validation of Income Loan-to-Value Ratio Total Loan Amount Increase to Loan Amount
Up to and including 65% 0.90% 1.75%
Up to and including 75% 1.15% 3.00%
Up to and including 80% 1.90% 4.45%
Up to and including 85% 3.35%* 6.35%
Up to and including 90% 5.45%* 8.05%

*Rental Loans (1–4 Units) Loan-to-Value Ratio Total Loan Amount Increase to Loan Amount
Up to and including 65% 1.45% 3.15%
Up to and including 75% 2.00% 3.45%
Up to and including 80% 2.90% 4.30%
Note: Premiums shown with “*” do not apply for Refinance transactions.
**For purchase/new construction loan applications, the premium rate is applied to the Total Loan Amount. For portability and refinance loan applications, the premium is the lesser of the premium rate applied to the Increase to Loan Amount; or the premium rate applied to the Total Loan Amount.
Premium Surcharges Extended Amortization Surcharge (for each 5 year period beyond 25 years) 0.25% Blended Amortization Surcharge 0.60% Conversion surcharge for self-employed borrowers without traditional documentation to support income verification 1.75%
CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after May 1, 2014. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to May 1, 2014, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.
CMHC reviews its premiums on an annual basis and has adjusted them several times since being commercialized in 1998. Adjustments have included both increases and decreases to the premiums. Going forward, CMHC plans to announce decisions on premiums in the first quarter of each year.
To help you respond to consumer inquiries, CMHC has information available on the new premiums at http://www.cmhc.ca

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The purpose of Mortgage Insurance is to provide your loved ones with a way to pay for the mortgage if something were to happen to you, the home owner.
When buying a home, there are 2 ways to protect you and your family – through your bank when you apply for a mortgage or through an insurance broker. Purchasing your coverage through an independent Insurance Broker will insure you get the very best price available and your policy is fully underwritten at the time of application. You will know up front that you are covered. Basically it’s a life insurance policy based on the amount of your mortgage. When you apply for insurance through a bank the underwriting is not done until the time of claim, which could mean that if you get sick or injured at any time prior to a claim you can be deemed NOT eligible for a pay-out even though you have been paying your premiums. Why would you take a risk like this?
The other benefit in purchasing your mortgage insurance through a Broker, is that the total original amount of the policy, not just the mortgage balance, is paid out directly 100% to your beneficiary and they can decide what to do with the insurance money. The bank insurance simply pays the bank for the amount owing.

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When buying a home, your lawyer will talk to you about buying a Title Insurance policy. Your next question is going to be WHY?
A Title Insurance policy offers you many benefits such as:
1. It eliminates the need for an up-to-date survey, real property report or building location certificate (“the survey”), while covering you against defects that might have been revealed once obtained.
2. It covers you against errors in surveys and other official public records or documents related to your property such as registry / land titles office, local municipal offices and tax departments.
3. It protects you in the event of encroachments onto a neighbouring property, zoning infractions, contravention of subdivision, development and other agreements.
4. It may reduce your closing costs by eliminating some disbursements your lawyer might otherwise have to incur.
Your lawyer can obtain a Title Insurance policy on your behalf prior to the closing date. Once a policy is issued and you take title or ownership to the property, your Title Insurance Company that holds the Policy assumes the risk for all covered problems, protecting your right to the property as long as you own it.
So when your lawyer mentions Title Insurance Policy – say YES!

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Daily Market Update

Renewing a home loan shouldn’t be too painful for the next six months according to a new report from The Canadian Association of Accredited Mortgage Professionals. It’s predicting that the low rates should continue well into 2015 and that means those that have been used to paying at a higher rate can look forward to savings and that will be good news for the economy as a whole. CAAMP says that of the 1.35 million homeowners that have renewed or refinanced their loans during this year 1.05 million are now paying at a lower rate. Their figures also show that 16 per cent of those with a mortgage have increased the level of their monthly payments or paid a lump sum to pay down their loan faster. Another 7 per cent have increased the frequency of their loan repayments to fortnightly. Around 11 per cent have taken equity out of their home for other purposes including debt consolidation, home renovation or investments. Among first-time buyers the average down payment is 21 per cent with 11 per cent of respondents being gifted the money from a relative and 6 per cent receiving a loan from a family member.
Information provided by Jamie Henry, 19 Nov 2014 Real Estate Wealth

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Real Estate market remains strong in St Thomas

March 2013 came in and went out like a lion but St. Thomas weathered the storms of March much better than London. In St Thomas, 50 homes sold in March 2013, the same number as last March. This follows a brisk start to the year with sales up 5% in January 2013 and up 38.9% in February over the same months of 2012.
Year-to-Date sales are up 12.8% in St. Thomas, while the average price for a home Year-to-Date stands at $198,548, up 3.6% from the year before.
Active listings for March are down 1.7% over March 2012 and down only 3.8% Year-to-Date over last year.

The Spring Market was off to a slow start in London in March with 612 home sales, down 20.5% over 2012. New listings were also down 9.4% overall, while inventory – the number of active listings at the end of the month, were down 7.2%.

Compliments of Earl Taylor- Broker
Coldwell Banker at Success Realty

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The holiday season is fast approaching. It’s a time that is traditionally taken up with family gatherings, parties and general celebration, with all the flurry of activities that go with it. Real estate is often the furthest thing from the most people’s minds – but I’d like to tell you that if you’re one of the home buyers and sellers who think that way, you could be missing out! The holiday season can have definite advantages for both buyers and sellers. If you currently have your home listed for sale, you may find yourself caught up in the time demands of shopping and entertaining. You may be feeling that you don’t need the added stress of keeping your home in “show-ready” condition at a time of year when viewings may tend to slow down. In fact, some home sellers won’t accept viewing appointments during the holiday season. While that’s your choice, you should be aware that a decision like that could result in a missed opportunity. After all, in today’s ethnically diverse society, there are still many prospective buyers who may not be celebrating the holiday season, yet they still have time off to view properties. Also, with some homes not accepting viewing appointments, your listing may have less competition during the holiday period. Of course, if your home is decorated for the holidays, it probably looks at its most attractive. Holiday viewings have the advantage of showing off your home at its most welcoming, and prospective buyers can envision themselves in its warm and inviting atmosphere. So why not roll out the welcome mat to potential buyers too? The holiday season offers advantages for buyers as well. Fewer buyers actively looking during the holidays means there’s less competition from other buyers. It’s still an excellent time to go house hunting. As your local Coldwell Banker real estate professional, I can help bring you a home for the holidays!

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