Wednesday, 8 August 2012
How Much Do I Qualify For My New Home?
When buying a home, it is helpful to determine the type of home you like and how much you can afford before beginning your search. Most lenders allocate approximately 28% of your GROSS MONTHLY INCOME to housing expense. Housing expense includes principal, interest, taxes and insurance (PITI). To get an idea of how much you can afford to pay each month for a home, multiply your gross monthly income by 28%.
When coupled with current outstanding loans, the total for your debt service should not exceed 36% of your gross monthly income. Some lenders may have slightly more liberal requirements or loan interest rates which may increase your purchasing power.
Mortgage interest, property taxes, loan fees or "points" are currently tax deductible (up to allowable limits). Points are generally deductible in the year paid. A point equals 1% of the mortgage amount. If you are in the 28% tax bracket, this is equivalent to receiving a 28% discount on your mortgage interest and property taxes. During the first years of the mortgage your tax savings are especially high because most of your monthly payment goes toward loan interest.
Have a lovely day and tune in next week for some more great info.
Monday, 5 March 2012
Thinking Of A Spring Reno?????
What a remarkably sunny day it is today in the GTA. You almost feel like spring is going to just pop out at you right out at you. Well it certainly gets your brain working - like thinking about all the things you need to get done this year. If home renovation is on your list, here are some tips for you to consider: Considering a Spring Reno? Here are ten projects that will add value to your home Can't stand your dark, drab basement? Have the purple-and-olive tiles and porcelain in your bathroom seen better days? Maybe you've had enough of your old vinyl floor and tacky fittings in your cramped kitchen. But what do you tackle first? It depends on your goals and plans. If you're thinking of selling your property soon for the highest possible price, your priorities are different than if you're planning to stay for a few years. Here are ten worthwhile renos and the payback that you could expect at resell (seller's market). 1. Painting If you're only going to do one thing, paint. Interior/exterior painting is one of the very few improvements on which you are likely to realize a profit-as long as you choose tasteful, current, neutral colours and the work is very professional. Payback: As much as 300%. 2. Kitchen remodeling Typically one of the most expensive improvement projects, to avoid running up a huge bill, carefully plan and shop wisely. Take care to keep the project in line with the style and quality of the rest of the house; and be reasonable, don't install a $50,000 kitchen in a $200,000 house. Payback: 68-120%. 3. Bathroom addition If most homes in your neighbourhood have two, three or more bathrooms, and yours has just one or one-and-a-half, you will definitely increase your property value by adding a bath. Payback: 80-130%. 4. Bathroom remodeling Play it safe and choose white porcelain, it is the safe, timeless choice. Payback: 65-120%. 5. Finishing unfinished space Finishing your attic or basement will add significant value to your home, increasing square footage without having to build. Payback: 50-90%. 6. Window/door replacement Do it if your windows or doors are wasting energy or simply decrepit-looking. Stick to standard styles; odd shapes and highly customized arrangements do little for resale value. Payback: 50-90%. 7. Deck addition/improvement/expansion Decks are one of the few exterior renos with any significant return, apart from painting. Payback: 65-90%. 8. Room additions Increasing square footage is almost always an excellent use of remodeling dollars, but don't expand your home so much that there's little outdoor space left. Payback: 50-83%. 9. Home office remodeling Plan for plenty of electrical and cable outlets to accommodate all the required machines and gadgets and don't skimp on lighting. Payback: 60-73%. 10. Energy efficiency upgrages Retrofits, like insulation and high-efficiency furnaces, pay for themselves relatively quickly. Others, like solar panels, and tank-less water heaters, may take years to pay for themselves. Payback: Highly variable. Two renos that don't pay off: swimming pools and excessive landscape. Have an absolutely fabulous day. Talk to you again next week!!!! Radha Diaram (Sales Representative) Re/Max Real Estate Centre Inc. 1 (800) 461-2686 |
Monday, 6 February 2012
THE JOY OF SPRING (MARKET)
When winter gets gloomy, it's comforting to know that spring is just a few short months away.
Spring is revitalizing. There are more hours of energy-giving sunshine, happy little flowers start springing to life, and lenders fight like alley cats for spring mortgage business. (Yes, great mortgage deals can be invigorating!).
Indeed, "spring market" is prime time in the home loans business. Some mortgage planners do over half their annual volume in the four months from March to June.
Real estate activity reflects a somewhat similar upswing. Higher volumes make spring a prized opportunity for lenders to build market share and make progress on their revenue targets. That can spark some sizzling rate discounts.
With spring market around the corner, someone asked the other day if lenders will start lowering rates soon. The answer is "probably" ..... in the near term anyway.
Longer out, it's impossible to foretell what this spring will bring. Most analysts call for relatively flat rates over the next 1 - 2 quarters, and that may be true. But we can't kid ourselves. The next 4-5 months are not without upside rate risk.
Among the possibilities:
The Euro-debt crisis could boil over that would potentially drive yields lower fixed mortgage rates typically move in tandem with yields, but the exception is when systemic risk makes investors demand higher returns on mortgages. The default of a Euro-member could therefore be a net negative for mortgage rates, for at least some period of time. The Italian 10-year bond provides a guage of European risk. A new high in Italy's yields (e.g., a 10-year bond over 7.5%) would signal stormy weather ahead. Europe could get a happy ending. If the EU assured the world that its debt crisis was contained, traders would likely sell "safe" North American treasuries and buy riskier assets. This asset rotation could drive up bond yields and, due to their linkage, fixed mortgage rates. By contrast, variable discounts from prime, could actually improve in this scenario. Inflation could scare the bejesus out of fixed income investors. Traders don't need to see actual inflation, just the threat of it. This too would let some air out of the bond bubble. Other things being equal, yields and mortgage rates would rise as a result. For what it's worth, analysts assign very low probabilities of inflationary pressure in the near term. Yet another possibility is an ongoing diet of lacklustre economic performance. That may not make for an upbeat spring, but at least it would be a plus for mortgage rates.
Whatever happens, hold your hat tight, because the 2012 spring rate market will come with surprises.
And if your mortgage is closing in the next 180 days, don't sit back to see how all the news plays out. Cover your ass-ets with a rate hold!!!
Spring is revitalizing. There are more hours of energy-giving sunshine, happy little flowers start springing to life, and lenders fight like alley cats for spring mortgage business. (Yes, great mortgage deals can be invigorating!).
Indeed, "spring market" is prime time in the home loans business. Some mortgage planners do over half their annual volume in the four months from March to June.
Real estate activity reflects a somewhat similar upswing. Higher volumes make spring a prized opportunity for lenders to build market share and make progress on their revenue targets. That can spark some sizzling rate discounts.
With spring market around the corner, someone asked the other day if lenders will start lowering rates soon. The answer is "probably" ..... in the near term anyway.
Longer out, it's impossible to foretell what this spring will bring. Most analysts call for relatively flat rates over the next 1 - 2 quarters, and that may be true. But we can't kid ourselves. The next 4-5 months are not without upside rate risk.
Among the possibilities:
The Euro-debt crisis could boil over that would potentially drive yields lower fixed mortgage rates typically move in tandem with yields, but the exception is when systemic risk makes investors demand higher returns on mortgages. The default of a Euro-member could therefore be a net negative for mortgage rates, for at least some period of time. The Italian 10-year bond provides a guage of European risk. A new high in Italy's yields (e.g., a 10-year bond over 7.5%) would signal stormy weather ahead. Europe could get a happy ending. If the EU assured the world that its debt crisis was contained, traders would likely sell "safe" North American treasuries and buy riskier assets. This asset rotation could drive up bond yields and, due to their linkage, fixed mortgage rates. By contrast, variable discounts from prime, could actually improve in this scenario. Inflation could scare the bejesus out of fixed income investors. Traders don't need to see actual inflation, just the threat of it. This too would let some air out of the bond bubble. Other things being equal, yields and mortgage rates would rise as a result. For what it's worth, analysts assign very low probabilities of inflationary pressure in the near term. Yet another possibility is an ongoing diet of lacklustre economic performance. That may not make for an upbeat spring, but at least it would be a plus for mortgage rates.
Whatever happens, hold your hat tight, because the 2012 spring rate market will come with surprises.
And if your mortgage is closing in the next 180 days, don't sit back to see how all the news plays out. Cover your ass-ets with a rate hold!!!
Monday, 23 January 2012
10 Deadly Mistakes Buyers Make When Buying A Home!
1) Making an Offer on a home without being prequalified.
This step will make your purchase easier - take the time to speak to a lender.
Their specific questions in regard to income, debt, etc., will help you determine the price range
you can afford. It is an essential step to homeownership.
2) Limiting your search to open houses, ads or the internet.
Many homes listed in magazines or on the internet have already been sold. Your best course
of action is to contact a Re/Max Realtor. They have up-to-date information that is unavailable
to the general public and are the best resource to help you find the home you want.
3) Choosing a Real Estate Sales Representative who is not committed to forming a strong
business relationship with you.
Making a connection with the right Realtor is crucial. Choose a professional who is dedicated
to serving your needs - before, during and after the sale.
4) Thinking that there is only one perfect house out there.
Buying a home is a process of elimination, not selection. New properties arrive on the market daily,
so be open to all possibilities. Ask your Realtor for a comparative market analysis. This compares
similar homes that have recently sold, or are still for sale.
5) Not considering long-term needs.
It is important to think ahead. Will the home suit your needs 2-5 years from now?
6) Not having a home inspection.
Trying to save money today can end up costing you tomorrow. A qualified home inspector will detect
issues that many buyers can overlook.
7) Not examining insurance issues.
Advice from an insurance agent can provide you with answers to any concerns you may have. You
might be looking at a home with knob and tube wiring, etc. Purchase adequate insurance. Get a
quote.
8) Not buying mortgage insurance.
Except in the case where you may have enough life insurance to pay off the mortgage in case of death,
mortgage insurance is likely the best coverage. Make sure that both spouses are covered.
9) Not knowing total costs involved.
Ask your Realtor or Lender up-front, for an estimate of closing costs: Land Transfer Tax; Legal Fees;
Appraisal Fees and Canada Mortgage And Housing Corporation (CMHC) insurance cost (in the case of
a High Ratio Mortgage).
10)Not following through on due diligence.
Buyers should make a list of any major concerns they have regarding schools; neighbourhood;
powerlines; environmental conditions etc. Ask the important questions before you make an offer
on a home. Be diligent, so that you can have confidence in your purchase.
This step will make your purchase easier - take the time to speak to a lender.
Their specific questions in regard to income, debt, etc., will help you determine the price range
you can afford. It is an essential step to homeownership.
2) Limiting your search to open houses, ads or the internet.
Many homes listed in magazines or on the internet have already been sold. Your best course
of action is to contact a Re/Max Realtor. They have up-to-date information that is unavailable
to the general public and are the best resource to help you find the home you want.
3) Choosing a Real Estate Sales Representative who is not committed to forming a strong
business relationship with you.
Making a connection with the right Realtor is crucial. Choose a professional who is dedicated
to serving your needs - before, during and after the sale.
4) Thinking that there is only one perfect house out there.
Buying a home is a process of elimination, not selection. New properties arrive on the market daily,
so be open to all possibilities. Ask your Realtor for a comparative market analysis. This compares
similar homes that have recently sold, or are still for sale.
5) Not considering long-term needs.
It is important to think ahead. Will the home suit your needs 2-5 years from now?
6) Not having a home inspection.
Trying to save money today can end up costing you tomorrow. A qualified home inspector will detect
issues that many buyers can overlook.
7) Not examining insurance issues.
Advice from an insurance agent can provide you with answers to any concerns you may have. You
might be looking at a home with knob and tube wiring, etc. Purchase adequate insurance. Get a
quote.
8) Not buying mortgage insurance.
Except in the case where you may have enough life insurance to pay off the mortgage in case of death,
mortgage insurance is likely the best coverage. Make sure that both spouses are covered.
9) Not knowing total costs involved.
Ask your Realtor or Lender up-front, for an estimate of closing costs: Land Transfer Tax; Legal Fees;
Appraisal Fees and Canada Mortgage And Housing Corporation (CMHC) insurance cost (in the case of
a High Ratio Mortgage).
10)Not following through on due diligence.
Buyers should make a list of any major concerns they have regarding schools; neighbourhood;
powerlines; environmental conditions etc. Ask the important questions before you make an offer
on a home. Be diligent, so that you can have confidence in your purchase.
Monday, 16 January 2012
Market Watch - Second-Best Year on Record for Sales
January 5, 2012 - Greater Toronto REALTORS reported 4,718 transactions through the TorontoMLS system in December 2011. The December result capped off the second-best year on record under the current Toronto Real Estate Board (TREB) boundaries. Total sales for 2011 amounted to 89,347 - up four per cent in comparison to 2010.
"Low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with major housing costs," said TREB President Richard Silver. "If Buyers had not been constrained by a shortage of listings over the past 12 months, we would have been flirting with a new sales record in the Greater Toronto Area," added Silver.
The average selling price in December was $451,436 - up four (4) per cent compared to December 2010. For all of 2011, the average selling price was $465,412, an increase of eight (8) per cent in comparison to the average of $431,276 in 2010.
Months if inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices," said Jason Mercer, TREB's Senior Manager of Market Analysis.
TREB's baseline forecast for 2012 is for an average price of $485,000, representing a more moderate four (4) per cent annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook," continued Mercer.
"Low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with major housing costs," said TREB President Richard Silver. "If Buyers had not been constrained by a shortage of listings over the past 12 months, we would have been flirting with a new sales record in the Greater Toronto Area," added Silver.
The average selling price in December was $451,436 - up four (4) per cent compared to December 2010. For all of 2011, the average selling price was $465,412, an increase of eight (8) per cent in comparison to the average of $431,276 in 2010.
Months if inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices," said Jason Mercer, TREB's Senior Manager of Market Analysis.
TREB's baseline forecast for 2012 is for an average price of $485,000, representing a more moderate four (4) per cent annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook," continued Mercer.
Monday, 2 January 2012
HAPPY NEW YEAR!!!!!
Happy New Year to Everyone. Hope the holidays were enjoyable and that we all got an apportunity to spend with our families and friends. Times have changed so much over the years. I remember when I was a teenager, my home was always full of family over the Christmas holidays. My immediate family consisted of five siblings, their spouses, my parents and 12 nieces and nephews.
Guess who always had to clean up and do the dishes on Christmas day?? And we had no dishwasher at the time! Whew!! It took me over an hour to get that done.
Looking back, I'll do it over and over again if I had to. All in all, it was precious time spent with my family and the memories will always stay with me. My husband and I miss those times terribly whenever we spend the holidays here in Canada. Most of our family lives in Trinidad and so we miss out on a lot of the family gatherings and fun. We are grateful, though, because we get to go back almost every year. And sometimes for Christmas also.
Let us celebrate and ring in the New Year with gratitude. Gratitude for even the smallest gifts that we are blessed with. Things which, if we didn't have, would make our lifes more difficult and trying. But most of all, let's be grateful for opening our eyes each day and being able to welcome the new day with all the beautiful opportunities it brings to us. Time is always of the essence, and life is what we "will it to be".
Have an amazing 2012, filled with good health, happiness and prosperity.
Radha Diaram
Guess who always had to clean up and do the dishes on Christmas day?? And we had no dishwasher at the time! Whew!! It took me over an hour to get that done.
Looking back, I'll do it over and over again if I had to. All in all, it was precious time spent with my family and the memories will always stay with me. My husband and I miss those times terribly whenever we spend the holidays here in Canada. Most of our family lives in Trinidad and so we miss out on a lot of the family gatherings and fun. We are grateful, though, because we get to go back almost every year. And sometimes for Christmas also.
Let us celebrate and ring in the New Year with gratitude. Gratitude for even the smallest gifts that we are blessed with. Things which, if we didn't have, would make our lifes more difficult and trying. But most of all, let's be grateful for opening our eyes each day and being able to welcome the new day with all the beautiful opportunities it brings to us. Time is always of the essence, and life is what we "will it to be".
Have an amazing 2012, filled with good health, happiness and prosperity.
Radha Diaram
Tuesday, 6 December 2011
Funny Christmas Story
Don't Try This at Home!
Pastor Tony is walking down the street on Christmas eve when he notices a Larry, a small boy, trying to press the doorbell of a house across the street. However, Larry is very small and the doorbell is too high for him to reach. After watching the boy's efforts for some time, Pastor Tony moves closer to Larry's position. He steps smartly across the street, walks up behind the little fellow and, placing his hand kindly on the child's shoulder, leans over and gives the doorbell a solid ring.
Crouching down to Larry's level, Pastor Tony smiles benevolently and asks, 'And now what, my little man?'
To which Larry replies with a beaming grin,
'Now we run!'
Sincerely
Radha Diaram
ReMax Real Estate Centre Inc.
(800)461-2686
www.radhadiaram.com
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