Ensure Your House Is Vacation Ready

As summer draws near, many Canadians plan extended visits to the family cabin or vacations in distant locations. The excitement of an impending trip can be distracting, but it is important to remember that several steps must be taken to ensure your home is vacation ready.

“Summer vacations are a great way to relax with family, friends, and loved ones,” says Wade Webb, a broker with Royal LePage Kelowna, “but returning from vacation could be far from relaxing if you leave without preparing your home for your absence.”

To set your mind at ease and enjoy your vacation to the fullest, Webb recommends these three home preparation tips:

. Unplug all non-essential electronics and appliances. Appliances and electronic devices left plugged in will continue to drain energy, even when not in use. Why add unnecessary costs to your energy bills? Any electrical appliance that is left plugged in also has the potential to cause a fire.

. Ask a trusted neighbour to check on your house. If you are away for an extended period of time, it helps to know that a reliable person will keep an eye on your home. Any-thing suspicious can be reported to the local police or brought to your attention. A house-sitter can give the appearance of an occupied home, deterring potential burglars – and they can also take care of your pets and plants.

. Cancel the newspaper delivery. No matter how reliable your neighbour is, a pile of newspapers at your doorway is a sure sign of your absence. Call your local newspaper provider to cancel service for the duration of your vacation. Most publishers will be happy to help you resume your service when you return.

http://goo.gl/Zf4J8

Steven Giffin

REALTOR® with Keller Williams Realty

902.233.7756 Mobile

902.482.5832 Fax

stevengiffin.kwrealty.com

            

Mortgage Terminology: A Simple Guide

Mortgage terminology: A simple guide

Understanding the nuts and bolts of your mortgage may seem intimidating at first, but it’s not as difficult as it sounds. Learning more about how mortgages work could save you thousands of dollars in interest or penalties.

There are three basic parts to a mortgage: the amortization, the term, and the interest rate, which could be fixed or variable.

Amortization: This is the total number of years it will take to pay off your mortgage completely. The maximum is 30 years. The longer the amortization, the lower your monthly payments, but you’ll end up paying more interest over the life of your mortgage.

Term: The term is the length of time you have agreed to a certain interest rate and payment schedule. It can range from six months to 25 years, but homebuyers tend to go for terms of three or five years. Ten-year terms have become more popular recently, because fixed mortgage rates are at historic lows.

Variable rates: The interest rate on a variable-rate mortgage is tied to the bank’s prime rate. The prime rate, in turn, goes up and down according to the overnight rate, which is set by the Bank of Canada. A variable rate mortgage can typically be locked-in at a fixed rate, but sometimes there is a fee. Ask your lender for more details!

Fixed rates: These rates are locked in for the length of your term, and they tend to be higher, but you’re paying for peace of mind. The payments, and the amount of interest that you owe, will not change during the term. These rates are dictated by supply and demand in the bond market, which, in turn, is influenced by world events — anything from the European debt crisis to the health of the Chinese economy to the health of Canada’s manufacturing sector can push these rates up and down — that’s why it’s so difficult even for experts to know where rates are headed.

Open: An open mortgage means you can pay the mortgage down or off entirely at any time without any penalties. These typically carry a higher interest rate.

Closed: A closed mortgage means that you will be restricted to how much of the principal you can pay down ahead of schedule. Most mortgages allow what are known as pre-payments or extra payments towards the principal of about 20 per cent per year. Check with your lender for more details! Some mortgages allow you to double up on your payments.

Pre-approval: A lender will typically pre-approve you for a maximum mortgage amount based on your income level at a certain rate for 120 days. If rates drop during that time, you should qualify for a lower rate. If rates increase, you’ll still get the lower rate.

Your monthly mortgage payment consists of interest and principal. Early on in your mortgage, most of your payment will go to interest.

Q. What happens when the variable rate goes up?

A: Either your monthly payment will increase, because you will now owe more interest on your mortgage, or the payment could stay the same, and you will end up making the payments for a longer period of time.

Q. What happens if you pay off your mortgage early?

A: You may face a penalty of either three months interest or what’s known as interest-rate differential, whichever is greater. Interest-rate differential is the difference between the interest rate charged at the time you signed your mortgage and the interest rate available at the time of refinancing. This could add up to thousands of dollars. Ask your lender for more details!

Keep in mind that just because you’ve been pre-approved doesn’t mean you will get the financing for your home. Whether you are approved for a mortgage depends on the home you want to buy in the end. Your lender will need to know the total cost, including property taxes or maintenance fees, and conduct an appraisal before lending to you.

Q. How much do I need for a down-payment?

A: If your down-payment is 20 per cent or more of the home price, you will qualify for a conventional mortgage. If it is less than 20 per cent, you will be required to insure it with mortgage-default insurance from the Canada Mortgage and Housing Corp. These premiums can either be paid in a lump sum or amortized over the length of the mortgage. The larger your down-payment, the less you will need to borrow and the less you will pay in interest.

The Home Buyers’ Plan allows those who are eligible to withdraw up to $25,000 tax-free from their Registered Retirement Savings Plan to buy or build a home. It is a loan and must be repaid within 15 years. To be eligible, the buyer must not have owned or occupied a home as a principal residence at any time for four years. Check with your lender or financial advisor to see if you qualify!

Thanks to Sylvie Ann Messer for this great write-up!  If you have any questions regarding this article or any other mortgage related topic, you can reach Sylvie at:

Key Mortgage Solutions Inc – DLC Capstan
Office: 506-206-3672
Cell: 506-471-3775
Fax: 506-206-4655
www.keyms.ca

You can also contact myself of course at:

Steven Giffin

REALTOR® with Keller Williams Realty 

902.233.7756 Mobile

902.482.5832 Fax

stevengiffin.kwrealty.com

Lessons Learned From A Year As A Home Owner

By Krystal Yee.

A  year ago, I made the biggest financial decision of my life and bought a home. Although it hasn’t always been easy, I am still extremely happy with my purchase.

Here are a few lessons I’ve learned:

1. Buy for less than you can afford
When I first started my home search, I knew that the bank would approve me for more than I was comfortable spending. I was pre-approved for close to $300,000,  but decided to cap my mortgage at $250,000, because no matter how stable you might think your life is, things can change.

When faced with the choice between a one-bedroom townhouse, and a  two-bedroom option. I ended up buying the  one-bedroom option because it freed up more money to put towards other things.

I ended up with a $238,000  mortgage, which meant my monthly payments are just under $1,100. I   increased my payments by 20 per cent, and opted for a bi-weekly schedule. Had I chosen a more expensive home, I wouldn’t be able to save for retirement or quit my full-time job to start a freelancing career.

Related: 1st time homebuyers share their lessons

2. Save for home improvement projects 
It can be so tempting to head to Home Depot or IKEA and go on a home improvement and decorating shopping spree. But  if you haven’t set aside the money, it’s better to hold off until you can afford to pay for your purchases in cash. Once you’ve made a list of what changes you want to make to your home, and the approximate cost, make sure to save an extra 10 or 15 per cent because you’re bound to spend more than you think you will.

Before I purchased my home, I had saved  approximately $4,500 for home improvement projects. I ended up blowing my budget by spending more than $5,000 for new floors, paint, decorations, and furniture. And there’s much more I want to do. However, instead of dipping into savings, I plan to set aside extra money for the additional renovations.

3. Buying is for the long-term 
If you don’t know where you will be in a couple of years, or if your financial situation might change drastically, home ownership might not be right for you. In today’s real estate market, you might need to stay put in your home for at least four or five years – maybe even more – just to break even. So for that reason, it is extremely important to evaluate where you think you will be in the next five years, as well as whether your home will still be functional for your lifestyle within that time frame.

When I bought my home, I had no idea that, eight months later, I would be presented with the opportunity to move overseas. I consider myself  lucky that my mortgage payments are small enough that I was able to afford to take that opportunity to move to Germany for seven months.

4. Have all your finances in order 
Before you even start looking at homes, you should be working to get your finances in order. This includes taking into consideration your work history (many lenders look at an average of the past two to three years of income), credit history, and cash savings. You might not think those late payments to your credit card company were a big deal, but the cleaner your overall financial history is, the better chance you will have at snagging the best interest rate possible on your mortgage.

I started thinking about becoming a homeowner six years before I closed on my townhouse. In that time, I eliminated all of my debt, saved for a down payment, created an emergency fund, and tucked money aside for closing costs, moving expenses, renovations, and furniture.

Doing my research and making sure I had enough money to cover every expense made my home buying experience a lot less stressful.

5. Be friendly with the neighbours 
You might be annoyed with your neighbour’s loud sound system, or the fact that their cats are always on your porch, but it’s in your best interest to be friendly. You never know when you’ll need someone to pick up the  mail when you’re out of town, watch your pet for a few days, or water your garden.

Related: The true cost of home ownership? Ouch!

What were the biggest lessons you learned during your first year of home ownership? 

http://goo.gl/jSxYC

Steven Giffin

REALTOR® with Keller Williams Realty 

902.233.7756 Mobile

902.482.5832 Fax

stevengiffin.kwrealty.com

            

Changes Propose Sale Prices Being Published In Nova Scotia

As it stands, Nova Scotia is the only province in Canada that does not allow the information to be published, except on a limited basis.

Municipal Relations Minister John MacDonell says the change to the Municipal Government Act would make property sales more transparent.

MacDonell has also introduced amendments to the Assessment Act that would give homeowners more time to appeal property assessments.

Appeals must be filed within 21 days after assessment notices are mailed, but the change would extend the deadline to 31 days.

The government says it is aiming to have the changes in place next year.

http://goo.gl/ZZLex

Steven Giffin

REALTOR® with Keller Williams Realty 

902.233.7756 Mobile

902.482.5832 Fax

stevengiffin.kwrealty.com

            

Home Owners: Claim Your Tax Credits!

Home owners may benefit from certain non-refundable tax credits when filing their income tax and benefit return.

Important facts

– First-time home buyer’s tax credit: If you are a first-time home buyer, a person with a disability buying a home, or an individual buying a home on behalf of a related person with a disability, you may be able to claim a non-refundable tax credit of up to $750 when you buy a qualifying home.

– Non-refundable tax credits can only be used to reduce your federal income tax payable. If the total of your non-refundable tax credits is more than your federal income tax payable, you will not receive a refund for the difference.

– Other credits and deductions may be available to you. For more information, go to www.cra.gc.ca/myhome.

The CRA‘s online services make filing even easier

With the CRA’s online services you can file your return, track your refund, and change your personal information. You can also sign up for direct deposit to receive your refund in your account at your Canadian financial institution – no more waiting for cheques to arrive in the mail. It’s fast, easy, and secure. For more information, go to www.cra.gc.ca/getready.

http://goo.gl/iZulG

Steven Giffin

REALTOR® with Keller Williams Realty

902.233.7756 Mobile

902.482.5832 Fax

stevengiffin.kwrealty.com