Category Archives: Financing

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Real estate: A safe long-term investment

In good years and bad, property is a safe investment. It is, however, an area where it’s better to think long term than to try to turn a quick profit by betting on speculation. Here’s an overview of real estate trends, to help you better understand the opportunities available.

The real estate market is influenced by many factors. The strength of the economy, the unemployment rate, demographics and consumer confidence are just some of the elements that impact this sector, both for new builds and resale. Should this lead us to believe that real estate is an unstable market? On the contrary. Over the long term we see clear growth, slow but constant. That’s why real estate is considered to be a safe investment, as long as you give it the time to do its work. Nevertheless, it’s important to remember a few basic rules, and to understand how market growth works.

Investment strategy

Although yearly statistics and projections are good indicators, Samir Bachir, broker, speaker, real estate coach and president of OSE Real Estate Coaching, recommends having a long term vision. “When you look at statistics from the last 15 years, you can see that overall, sales as well as supply and demand stay constant over time,” he says.

In other words, buying property is an excellent investment. But don’t forget that it’s the passing of time that brings the value up, through inflation. “You also need to keep in mind that several factors can have a major influence on that value, in particular location, and the demand for a certain type of property,” specifies Bachir. So, if you’ve targeted the right market – for example a neighbourhood with a high potential for growth given its growing popularity – and the right type of product, you’ve got a recipe for a strong return. Continue reading

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Mortgages: 3 myths that deter first-time buyers

Thinking of buying your first home but worried about making such a big commitment? We address 3 concerns shared by first-time buyers.

  1. Young people can’t afford to buy a house anymore. 

When the Government of Canada tightened mortgage requirements last fall, it was all over the news. House prices have evened out a little; as for condos, it’s still very much a buyer’s market. And that’s good news for first-time buyers!

Here are some tips to be able to afford your first home:

  • Get started early
  • Save for a down payment
  • Consider your financial commitments
  • Set aside 3% of the value of your house for start-up costs
  • Get pre-approved for a mortgage loan
  • Work with expertsand ask questions

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Purchasing real estate: Your rights and obligations in 8 questions

Purchasing real estate is one of the biggest investments one can make in their lifetime, which is why it is so important to fully understand the associated legal implications. Can an offer to purchase be cancelled? What is a latent defect? A defect of consent? Interview with Martin Janson, real estate lawyer at Janson, Larente, Roy in Montréal.

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1. Is there a difference between an offer to purchase and a promise to purchase?

The term “offer to purchase” is often used, but the correct term is actually “promise to purchase”. In this document, the buyer proposes an amount to the seller to acquire the property and sets a deadline for a response. Once the promise is signed, there is to a certain extent a contract. One party is obligated to purchase, while the other is obligated to sell. However, the buyer can stipulate conditions to the promise to purchase. The most common are obtaining the necessary financing, the sale of their current property, and a satisfactory inspection report. Continue reading

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Want to be mortgage-free faster?

5 tips for making a dent in your debt.

According to a BMO 2015 home-buying report, the average Canadian expects to pay off their mortgage by age 59 — but 31 per cent think they’ll still have a mortgage by their 65th birthday. Looking to ditch your debt quicker — without over-extending your budget? It may save you hundreds (if not thousands) in the long run.
The biggest benefit is saving money on interest charges. The longer it takes to pay down your mortgage, the more you’ll pay in interest. The BMO report found that, on average, Canadians believe they’ll pay approximately $60,000 in interest on their mortgage (and this number hits $100,000 for B.C. residents).

First-time homebuyer tip: Curious how mortgage payments work? It’s all about the amount of money you’re borrowing and the length of the loan. Based on these factors, your lender will calculate your payment schedule. Some of your payment will go toward interest (the amount paid on the amount you borrowed), and some will go toward your principal (the amount initially borrowed under the mortgage). You may pay more toward interest than principal in the first few years of your loan, and more toward principal in the later years. Calculate your potential payment schedule with our nifty mortgage calculator.

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