Count the Cost of Buying a Home

What does it cost to buy a home? Beside the cost of the home and lawyers fee you need to be prepared with closing costs and other costs that could mean extra thousands of dollars.

Deposit
The deposit is required when you actually make an offer to purchase the home to show the seller that you are serious about buying his home. This will be part of your down payment. The deposit amount will vary with the cost of the home but could be 5 to 10 percent. If you back out of the deal without having purchasing conditions, like financing, home inspection, insurance and such, you could lose your deposit or even be sued for damages. Your agent can better advise you on this.

Mortgage Loan Insurance Premium
If your deposit is less than 20% then you are considered to have a high-ratio mortgage which means that your lender will need mortgage loan insurance. Mortgage loan insurance protects the lender. You could if you qualify invest in a term life insurance for the length of the mortgage to protect yourself. The difference here is that if you or your spouse passed away the Mortgage loan insurance would go directly to pay the lender but the term insurance would go to you and you could decide what the money goes toward. Depending on your financial situation of course this might be a better option especially if you have enough income to maintain the mortgage payment on a monthly basis rather than see the mortgage paid off. You should check your options and not necessarily take the pressure of the lending institution.

Home Inspection Fee
Home inspection is normally part of the purchasing agreement as a condition of purchase. We highly recommend to all of our clients to get a home inspection done by a qualified inspector. They will not only provide you with the condition of the home but many will also include some kind of manual or reports that will help you maintain your home in the future. Cost will vary depending on the age of the home, its size, its condition.

Prepaid Property Taxes and/or Utility Bills
The seller may have already paid property taxes or other expenses that apply to the time after the sale has closed. You might need to pay back taxes or utilities to the seller.

Legal Fees
The legal fees must be paid on closing day and will include charges to check on the legal status of the property.

Property Insurance
The mortgage lender will require that you have property insurance in the same way you have car insurance which protects you if your home and its content needed to be replaced after a fire for example. Property insurance must be in place on closing day.

Survey or Certificate of Location Cost
If a survey is more than five years old, the mortgage lender may request for an up-to-date survey or certificate of location. You can request this from the seller or if he is unwilling to obtain one you might have to pay for it yourself to get it done. A survey or certificate of location can cost $1,000 to $2,000.

Appraisal Fee
An appraisal is an estimate of the value of the home. This could be requested by your mortgage lender as part of the mortgage loan approval. Your Realtor can help you find an independent appraiser.

Title Insurance
Your lender or lawyer may suggest that you get title insurance which will cover loss caused by defects of title to the property.

Land Registration Fees
Sometimes called Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax. These may have to be paid to the municipality or province at closing. The cost is a percentage of the property’s purchase price. Your Realtor will be able to let you know if such fees apply to the home you are buying as these can equate few thousand dollars.

Water Tests and Septic Tank
If the home you are purchasing has a well or septic tank you will want to get the water tested for quality and to ensure adequate water supply and that the septic system is in good working order.

Estopel Certificate Fee
If you are buying a condominium you will want to obtain a Status Certificate or Estopel Certificate which is about $100. The certificate outlines a condominium corporation’s financial and legal status.

Other Costs
Beside the above you will want to consider moving costs, renovations or repairs, condominium fees, service connections such as phone, cable, and internet. You might also need to purchase appliances, gardening or snow removal equipment, hand tools, decorating materials such as curtains, paint or wallpaper.
It might all seem like a lot right now but until you investigate whether or not you can become a home owner it’s all in vain. Give me a call to find out what you need to do to become a homeowner and to get your dream of home ownership that much closer to reality.

H.S.T. Rebate on New Property

You may or may not be aware that when you buy a new home or new units you will be charged H.S.T on the price of that property. Good news is that you could be entitled to an H.S.T.  rebate.   Many folks however do not read or understand the rulings on this rebate. It is only available on closing and you must occupy the home or unit as your primary residence on the closing date.

Many investors buy solely for that purpose and some do not realize that the builder will increase the Agreement of Purchase and Sale to cover the amount of the H.S.T. that they would lose otherwise when that investor fails to occupy the home or unit.

If an investor wants to take advantage of the rebate all is not lost however as he must apply for it after closing but must be accompanied by a one year lease. The Investor Rebate can be obtained fairly speedily with an average of about two months wait. The investor should be ready with the increased price for closing in case of any delay.

The H.S.T. rebate could however be lost altogether if a third-party that is not a close relative is added to the title for financing purposes. Those considered close relative according to the Income Tax Act are mother, father, sister, child and grandchild and they must occupy the unit as their primary residence to be eligible for the rebate. Even if only 1% was assigned to a long lost rich uncle, the buyer would not be entitled to any rebate as per Canada Revenue Agency.

Knowing whether you will occupy the new property and who will be named on the title is extremely important information that needs to be shared with your Realtor when looking to buy a new home, condo or investment property if you want to be eligible for the H.S.T. rebate.

No Pets Allowed, sort of!

You’ve probably heard of situation where people rented an apartment that supposedly had a “no pet” clause but when they moved in they found out that many tenants had pets in their units and some of them even more than one.

Unfortunately the laws in Ontario can’t prevent a tenant from bringing a pet into a property unless it is a condominium and that the building declaration specifically says: “no pets”. So even if a tenant and landlord sign a lease that has a no pet clause, the tenant can basically bring in 3 dogs, 2 cats and a fish on the day that he moves in and there’s nothing the landlord can do about it.

The annoying part to this lack of judicial resource is the fact that other tenants who expect a pet free environment and then move in to find that pets are living in their building have to put up with it.

The landlord can refuse to approve tenants if he knows that they have pets but if the tenants lie about it then there’s really nothing they can do. To protect themselves some landlords ask for an extra deposit for any damages that the pet could cause but that is actually illegal and the landlord cannot demand additional rent to covert pet damages. Small claims court would be the Landlord’s resource to recoup the cost of the damages that may be caused by a pet. If on the other hand, the pet is a nuisance like a barking dog then the landlord would have causes for eviction as this would disturb other tenants.

Leaving the unit free of damages at the end of your tenancy will help avoid any extra cost for repairs. References from a previous landlord that you kept the place up to par even with a pet could be all that is required for the new landlord to feel that you would take the same care of their place too.

Honestly between the landlord and tenants is always the best advice for a friendly and positive relationship.

If you just don’t want to go through the headache as far as owning your pet and renting why not consider home ownership. Your pet will love the back yard and so will you. Call me today to get started on your home search.

Weekend wonder projects for your home

(NC)—Sprucing up your house doesn’t have to mean spending huge amounts of time and money. In fact, there are many projects that you can complete in a weekend to improve the look and feel of your living space. With a little guidance and the right tools, you can easily get your home in top shape by Monday morning.

Paint refresh~Commonly recognized as one of the easiest and most cost-effective interior updates, painting is a weekend project that can completely transform your home. However, low-quality, inexpensive paint will likely require a number of coats to get the coverage needed. “To avoid increased time and cost, choose a premium line of paint in a colour that you love,” says Donna Schroder, the colour marketing manager for Pratt & Lambert Paints. “The Accolade line, for instance, guarantees excellent hide and durability, and is available in more than 1,000 rich colours to complement any home’s style.” When choosing paint for your next weekend project, remember that a quality product will achieve the best end result and save you time and money in the long run.

Lighting update~Tired of the same old lamps sitting on your end tables but don’t have the funds to revamp your lighting decor? A new lamp shade will completely change the look of any piece. You can also easily transform pieces by renewing the lamp bases; a quick walk down the spray paint aisle will show limitless possibilities of colours and finishes. You can even renew plastic pieces with Krylon Fusion for Plastic, the first paint of its kind. Create a cohesive look by bringing that new finish to your hanging fixtures as well.

Accessorize~Adding trendy, fun accessories will give any room a new and more put-together look. Think vases and bowls, wall art and rugs. When adding accessories, look for colours that complement what is already in the room. Plants and flowers can also add energy, some with the added bonus of a pleasant aroma.

Furniture renewal~One easy way to update furniture on a budget is by recovering it or using slip covers. Pre-made covers are available in a wide variety of fabrics and designs, or you can create a custom cover for your sofa or armchair. More ambitious crafters may actually reupholster furniture to create a completely new-looking seating option. After re-padding and covering cushions, sand and stain or paint wood pieces for a completely modern feel.

Modern flooring ~Has your carpet seen better days? Replace it. Hardwood is scuffed and dull? Refinish it. You can also achieve the look of natural wood or stone flooring with luxury vinyl tile. This affordable option is no longer your grandmother’s vinyl, now available in a variety of natural finishes that are both durable and modern. If replacement isn’t in your budget, simply give your flooring a good cleaning and use accent rugs to cover blemished areas.

Check off a project on your home improvement to-do list this weekend, and enjoy the results for months to come.

Looking for help with  your project check out our 411Directory4Business.

Higher property assessment doesn’t necessarily mean higher taxes – Yourhome.ca

Ontario property owners may soon be in for a shock when they receive their new property assessment notice, but it doesn’t necessarily mean their taxes are going up.

Sometime this fall, all Ontario property owners are scheduled to receive notice of their 2012 assessed values from the Municipal Property Assessment Corp. (MPAC). In some areas of the province, the average valuations will show an increase of as much as 29 per cent over 2008, but that does not mean that property taxes will automatically increase.

This year’s assessment update is the second in Ontario’s new four-year assessment and phase-in cycle.

The typical assessment notice will show any change in value between the last assessment date of Jan. 1, 2008, and the new date, Jan. 1, 2012. On average, sale prices for residential properties province-wide have risen 17 per cent between those two dates, but in Toronto the jump is 23 per cent, in the region of York the figure is 28 per cent, and the bump in Halton and Peel is 22 per cent. The districts of Cochrane and Timiskaming hold the record average jump at 29 per cent and Windsor is the lowest with no increase.

Larry Hummel is MPAC’s chief assessor. In a recent announcement he stated, “Property owners should remember that an increase in assessment does not necessarily mean an increase in property taxes. It all depends on a number of factors including the amount of revenue required by your municipality or taxing authority to deliver services.”

Municipal taxes are calculated by multiplying a property’s assessment by the municipal mill rate. In Toronto, the mill rate for single-family residential homes is .7711981 per cent. Applying this figure to a house assessed in 2008 at $500,000 would result in annual property taxes of $3,855.99.

If the value of that house increases to $615,000 as a result of the 2012 reassessment, the mill rate would drop by 23 per cent if the city budget remained neutral. Taxes would only increase by the percentage approved by city council.

In order to arrive at the 2012 property valuations, MPAC has used reported sale prices of arm’s-length market transactions between a willing seller and willing buyer. Where a property has not been sold, the current value is what MPAC believes is the most probable sale price based on an analysis of all sales transactions in the local market.

To help provide a measure of tax stability, the Ontario government has introduced a phase-in program where market increases in assessed values between 2008 and 2012 will be phased in over four years, from 2013 to 2016. The full benefit of any decrease will be applied immediately, in 2013.

Here’s how it works: if all residential property in a municipality has increased by 16 per cent since 2008 and the assessed value of one home has increased by 20 per cent over the same period, then the homeowner may pay four per cent more than the average property tax being paid in that area. With the phase-in program, the assessment-related property tax increase in this example would be phased in at 1 per cent a year over four years.

Inevitably, many homeowners will object to the new valuation for their homes. They are welcome to contact MPAC to discuss their assessment and they will be allowed to obtain information on up to 24 additional properties of their own choice and up to six selected by MPAC.

If the owner is still dissatisfied, he or she can file a Request for Reconsideration (RFR) without charge, prior to March 31 of the tax year, starting in 2013. Owners can also file an appeal with the Assessment Review Board (ARB), an independent tribunal of the Ontario government.

At the ARB hearing, the onus is on MPAC to prove the accuracy of the assessed value and the homeowners will have an opportunity to provide other evidence disputing MPAC’s position.

Homes and condominiums built between 2008 and 2012 will be assessed on the purchase prices excluding the harmonized sales tax.

Bob Aaron is a Toronto real estate lawyer and consumer advocate. He can be reached at bob@aaron.ca. Visit his website at aaron.ca.

Before Renting a Principal Residence

When renting-out a Principal Residence, there’s some planning. First on the to-do list — review the Tax Act. it outlines specific ways to designate the change of use of a Principal Residence — including capital gains rules.

Generally, rental income and expenses would be reported on an annual tax return. Deductions could include mortgage interest, insurance premiums, property taxes, advertising costs to rent the house, utilities, travel to and from the property, as well as legal and accounting costs. Find out more at www.cra-arc.g.ca

Also, replace the homeowners policy with a rental policy. This type of insurance usually covers the building and provides liability protection but doesn’t cover possessions, so it tends to cost less than a regular homeowners policy. The lease should include a section requiring tenant to buy renters Contents & Liability Insurance and provide proof of the same.

I can help you purchase investment homes. Call me now!

Women more likely to purchase a home in next two years

 

 

 

 

 

 

 

 

 

 

(Sympatico.com)

Despite concerns over down payments, job security and overall readiness, more women than men appear to be gearing up to make their first home purchase in the next two years.

According to an RBC study, despite being more cautious than men when it comes to weighing the costs and affordability of home ownership, women appear to be reaching comfortable ground in increasing numbers.

In fact, results of the annual RBC Homeownership Poll reveal that:

49% of women surveyed plan to buy their first home within the next two years, as opposed to just 35% of men;

47% of Canadian women who recently became first-time home owners noted affordability as their biggest obstacle to an earlier purchase;

16% of women were less likely to take on a variable mortgage, compared to 25% of men;

40% of women were comfortable with the prospect of taking on a fixed rate mortgage, reflecting the current trend where Canadians want to lock in at historically low interest rates;

44% of women are likely to consider a combination mortgage, as opposed to just 31% of men.

For those eyeing home ownership in the months and years ahead, here are five helpful tips from RBC for getting your ducks in a row:

• Assess total costs: Balance the costs of homeownership against your lifestyle, leaving yourself enough wiggle room to enjoy what’s important to you;
• Get your finances in order: Get pre-approved for a mortgage, with professional advice that will help you understand the long-term costs;
• Budget for extras: Closing costs, including legal fees, land transfer taxes and new home warranties, can typically run another 1-2% of your final purchase price;
• Build an emergency fund: Protect yourself against unexpected expenses such as a leaky roof, a defective furnace or an increase in fees or taxes;
• Increase your revenue: Look for opportunities to help offset expenses in the first few years of home ownership.

What’s the Pay Back on That Reno?

To some the pounding of hammers, buzzing of saws, smell of woodchips, dust of dry walls are all staples of Canadian summer renovations. With real estate prices in a state of flux, the eager beavers have begun the stampede into Home Depot, Rona and Canadian Tire to pick up the necessaries for the upcoming home renovations in hope of increasing the property value. As you all know not all renovations are created equal and before you sink your hard-earned cash into a job worthy of Tim the toolman Taylor you should consider the revenue in renovations.
There is a neat online tool, compliments of the Appraisal Institute of Canada, to help you determine what you can expect back in revenue on the sale of  your home for each type of renovations. (The AIC is a self-regulating professional association and the largest property valuation organization in Canada, with 4,800 members in Canada and around the world.) All you have to do is choose a reno, enter the expected cost, and the system will tell you what you should expect the reno to bring back. A $2000 bathroom reno is likely to get 75 to 100 percent of that investment back.
These are general guidelines, not set in stone fast rules as what you spend will affect what you get back. Ceramic, hardwood and granite will cost more than laminate and linoleum for instance and will certainly up the value. On the same token spending $80,000 on a spa bathroom worthy of the grandest hotel,  in a  house that’s barely worth the double of that will likely never payback the investment. Choosing a renovation should certainly be more than just a return on investment after all it’s your castle and should bring  you enjoyment. But if you’re contemplating one job over another and you have plans to sell in the near future you might want to experience prudence and go for the finished basement rather than the interlocking driveway.

The blue ribbon winners in the home  upgrades are by far given to the kitchens and the bathrooms. Don’t sneer at a good coat of neutral paint as this is the close runner-up in return on investment along with basements, windows/doors replacement, rec room addition, furnace and heating systems and exterior siding.

The lowest returns come from paving, landscaping, fences, interlocking driveway and even home theatres which all return about 25-50%. The least revenue comes from skylights, swimming pools and whirlpools.

So, before you start the reno, call me and I can give you a good idea about where you should be spending to bring the highest value to  your home.

 

Grow Your Savings

Regardless of the state of the economy, paying yourself is one of the most important step in budgeting. Here are some tips to help you grow your savings:

Set up an emergency savings account.
Having money set aside for emergencies will prevent you from dipping into your retirement or having to cash in RRSP’s. General rule of thumb is to set aside three months of living expenses but I prefer six months especially in challenging economy.

Save money for long-term goals.
Having a goal will make saving easier. If a portion of your retirement contribution is matched by your employer you would be passing up free money if you don’t take advantage of it. A little bit off every pay cheque will add up to big dividend in the long run.

Automatic savings.
You can set up your online banking account to automatically transfer a small portion of your pay cheque from your chequing account to your saving account.

Don’t break the bank.
Even if you can’t afford to put a lot of money towards your savings right away, starting small will establish some routine, even if it’s only $25 a month at first.

Shop for best rates.
Comparison shop for the best savings rates available. A high yield account can double your interest. 

Flip a payment into savings.
Once you’ve paid off a loan or credit card, add that payment amount or 50% of it to  your monthly savings amount.  

Save your windfall.
Because you get a bonus, an inheritance, a tax refund doesn’t mean that you have to spend it. Money set aside now will reward you later-and with interest.

 

Save money on your mortgage. We deal with over 40 lenders. www.BestMortgagesOnline.com

 

Aberfoyle Home is best kept secret – no more!

Nestled in an upscale community of “The Meadows of Aberfoyle” this home offers you a lifestyle that you deserve. This larger 1817 sq.ft. 2 bedroom bungalow is a great deal. Situated on a premium, pond with view, lot backing on to greenspace. Features include 9′ ceilings, 8′ doors, combination of hardwood and ceramic floors. Impressive kitchen has granite counters, deep undermount sinks and upgraded faucets. Also included is a kitchen island, stove top and built in oven, microwave and stainless dishwasher. The large master bedroom has impressive ensuite bath, garden doors to rear yard and walk in closet. This beautiful home is also ideal for Cambridge, Kitchener and surrounding area commuter as it is easy access to the 401.

What is your Cambridge, Ontario home worth? Get a FREE Home Evaluation online.

114 Aberfoyle Mill, Aberfoyle ON