Tag Archives: mortgage

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The Benefits of Working with a Real Estate Broker

Spring is on our doorstep. For many of you, it’s the final race to buy that first home. In fact, why not make your last-minute rush a little less stressful by calling a real estate broker. It comes with a long list of advantages. Here are the major ones.

If time is of the essence, the real estate broker will be more than welcome. Not only will the real estate professional deal with the bulk of the work, but he or she will also work at a fast pace without skipping any steps.

First buyers usually have two common concerns: a possible budget overrun and buying a home with latent defects, which would implicate unforeseen renovation work and maybe even legal complications. Again, the real estate broker is there to assist first buyers and give them the proper advice to minimize those risks.

The real estate broker also helps first buyers to better manage their stress and avoid a ton of pitfalls, such as hasty decisions causing devastating consequences, poor knowledge of the laws and regulations or a lack of communication with the coveted house’s current owner. Continue reading

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The list price is right — but have you factored in these 8 extra costs?

Review this checklist so the home you buy doesn’t break the bank.

Consider these 8 home-related expenses:

  1. Home inspection fee: Before closing, it’s customary for the buyer to hire a home inspector to confirm the home meets building standards and is “up to code” for that city. The inspection cost is based on the size and complexity of the home’s systems, but on average the fee should be between $375 and $500, according to our BMO Home Buyer’s Guide. You are responsible for paying this to the inspector. It’s a good idea to make your offer conditional, based on a successful home inspection. Sure, the house might look beautiful, but your inspector may detect structural or other problems that you can then negotiate with the seller to either fix or deduct the repair cost from the agreed-upon price.
  1. Appraisal fee: Your mortgage lender will require an appraisal (for example, the current market value of the home) before they’ll finalize your loan. Appraisals generally cost between $250 and $500, according to the Canadian Mortgage and Housing Corporation (CMHC), and you may have the option to roll it into your closing costs.
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  1. Utility bills: Unlike renters — who may have utilities built into their monthly rent payment — homeowners are responsible for all bills, such as water, gas, electric, home phone, cable and Internet. And this can add up faster than you may think. For example, keeping a home warm in the winter and cool in the summer can be pricey, depending on where you live. In fact, heating accounts for a significant part of the total expenses of Canadian households, according to Statistics Canada. Its Survey of Household Spending found Canadians spend an average of $1,895 on electricity, natural gas and other heating and cooking fuel a year. Need help planning? Use Natural Resources Canada’s home energy calculator to estimate how alternative energy sources and energy system replacements could potentially affect your energy bills.

Continue reading

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Sell or rent your house?

It happens to a lot of us. A death, change jobs, fall in love, financial problems coming or, on the contrary, the sudden desire to make money fast. In other words, there are a lot of reasons for finding yourself at a crossroads where you have to decide if you want to sell your house or rent it.

Renting comes with a whole new set of responsibilities: finding good tenants, making sure that the house is in order, responding to emergencies, assimilating the new tax calculations. It’s not for everyone.

Selling is much easier, but may not pay as much in the long term. Much less. And if you’re nearing retirement, you have to take the time to think about it, because people are living much longer today. You need more money if you want to maintain an enjoyable lifestyle. Continue reading

How Long Should it Take to pay off a Mortgage?

“The faster you pay off a mortgage, the more you save in interest,” says Louis-François Éthier, product manager at National Bank.

The truth is, paying off a $100,000 mortgage in a short period of time is extremely difficult without both a sizable and stable income, and relatively few expenses. A small regular payment stretched out over a longer amortization period (the total time required to pay off the mortgage) is usually considered an expensive strategy. This is because mortgage payments mostly cover interest and little of the principal until the interest is paid, so it can take decades to pay off the balance.

“The amount of your mortgage payments should be based on your overall budget,” says Louis-François Éthier.

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How much of your budget should go toward mortgage payments?
Most financial institutions recommend that no more than 30% of your total budget go towards mortgage payments, municipal taxes, and heating. “It’s the classic ratio in the industry: mortgage to total debt,” says Mr. Éthier. “It’s crucial to also consider other debts, such as car loans and balances on credit cards. Mortgage counsellors can help you make the right choice.”

Of course, the expected time if would take to pay off the mortgage directly influences the amount that we spend on our regular payments. Continue reading

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Helpful tips from BMO Bank of Montreal

Buying your first home as a couple? Check out these six tips.

Become a savvy home-buying duo.

Are you and your partner gearing up to be first-time homebuyers? You aren’t alone.

With real estate prices on the rise, taking on a mortgage payment as a couple may be more realistic than attempting to buy independently.

You may also find the process intimidating ― but fear not. Take note of these six tips that will help you and your partner be properly equipped to make the biggest purchase of your life: Continue reading