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How to Make Your Offer Stand Out From the Rest
Posted on Fri, 30 Sep 2016, 10:10:00 AM  in Home buying tips,  Home selling tips, etc.
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In a competitive real estate market where demand outpaces inventory, the seller gets to call the shots. Sellers have the knowledge that they can name almost any price and still receive multiple offers. This places buyers in the position of trying to get their offer to stand out from those of other bidders. The following tips will give you a leg up if you should find yourself in a bidding war.

 

Write a Letter:

Make your offer stand outLetting the seller get to know a little about you and your family can increase your chances of having your offer accepted. Even though they are moving, most sellers still love the home and want to know that it will be well-cared for by the next family. Writing a personal letter letting the seller know why you love the home and feel that it is perfect for your family may put your offer on top.

 

Be Flexible Regarding Inspections:

In a multi-offer situation, it may help to shorten your inspection time. This will show that you are motivated and willing to work with the seller for an expedited closing. You can also agree to an “as is” inspection. This allows you to find out about the condition of the property, and the seller will not be forced to pay for a long list of costly repairs. You then have the choice of accepting the house and paying for the repairs or walking away.

 

Be Willing to Adjust the Closing Date:

Closing dates are typically agreed upon by both the buyer and the seller. You may gain favor with the seller if you agree to adjust the timetable to meet their needs for either an expedited or delayed closing. Of course, you need to be able to handle the financial implications of such an arrangement, including the possibility of having to pay two mortgages if you end up closing before your current home sells.

 

Make Your Offer Non-contingent:

The majority of home offers are contingent on appraisal and financing, which allows the buyer to receive a refund of their deposit if their financing falls through or the appraisal is below the purchase price. By waiving these conditions, you put yourself on an equal footing with cash offers. If you choose this approach, you should make sure that you have already been completely approved for the mortgage and have enough funds on hand to make up the difference if the appraisal should fall short of the purchase price.

 

Add an Escalation Clause:

Many buyers expect an opportunity to counteroffer and tend to save their best and final offer until the end. In a multi-offer situation, the seller may accept the highest offer and reject the others without any attempt at negotiation. An escalation clause automatically increases your offer by a specified amount over a competing offer up to a pre-determined amount. This lets the seller know that you are willing to pay more but not more than is necessary to win the contract.

 

Get Pre-approved:

A preapproval lender from a mortgage lender shows that you have already submitted the necessary documentation to qualify for the loan. This helps alleviate any fears on the part of the seller that the offer may fall through at the last minute because of a lack of financing.

Finally, trust your realtor. They can give you valuable insight into the market value of a property and the possible motivations of the seller.


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Consumers Looking to Buy or Sell Homes
Posted on Thu, 15 Sep 2016, 10:05:00 AM  in Home buying tips,  Home selling tips, etc.
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Canadian real estate continues to have unusual periods of activity in which prices and sales increase faster than their average rates. Prices have surged dramatically in some markets recently. For example, prices rose sharply and some high profile sales occurred in the current quarter in Vancouver. A large number of which involved foreign investors.

 

Bubble Talk Rises

Looking to buy and sellAs prices soared in Vancouver and increased in Toronto, the talk in the financial news raised the notion of a real estate bubble. In Canadian financial news, bubble talk rises whenever prices show spurts of rapid growth, and this is no exception. The realistic assessment of price increases, when compared to wages and incomes, makes a stark picture. Prices rise much faster than wages and incomes. The conclusion from those facts for some analysts is that prices will outstrip income, and the real estate market will crash. The bubble did burst in recent memory, but it was in the US in 2006.

 

Speculation in the Hot Markets

Speculation can be a symptom and a cause of overheating in real estate markets. In the case of Vancouver real estate, it is clearly a symptom. The market has been warm for more than a decade and occasionally goes into a heightened state. There is a significant amount of speculation in the Vancouver market and real estate investors take passing positions on a property to get a quick flip and short-term profit.

 

Tax collection Issues Surface

Speculators sometimes play a useful role in bringing more transaction to a timely close. These investors have speed and profits as their driving forces. They can sometimes create enormous streams of personal and corporate cash as real estate activity can rise to impressive spikes at times. In Vancouver, news media carried a number of headlines and reports and prominent investigations by the Canadian Revenue service into tax payments. With information focused on particular individuals, the reports create a picture of active foreign investors and real estate agents fully engaged in the high paced current market.

 

Taxes Are Good for the Public

Real estate taxes and income taxes benefit the Canadian people and government. The high volume of sales causes an enormous amount of financial, and other economic activity. The tax revenues from sellers and agencies involved in the record levels of sales volumes is a boost for the government. This increase in revenues comes during a time when oil revenues bring less than anticipated due to a global slowdown in crude oil.

 

Investigations may Change the Laws

Some discussion includes the idea of enforcement. Other officials have ventured the possible need to change policies or amend the tax laws to get a better and more just level of enforcement. Local officials can determine the extent of compliance with the law in their areas; the national government would have to consider the impact on government financing and the economy

 

BC and Ontario Bear the Brunt

Toronto and Vancouver are the centers of real estate market growth, high sales spikes, and speculation. They will have to work with the national government to resolve issues and develop more effective revenue collection policies. Many media reports and investigations centered around these two markets, and the House of Commons has initiated hearings to study the issues.

 

Speculation and Overheating

Tax collection is part of a larger problem in the major markets. Speculation can lead to overheating in these major markets which could adversely affect the national real estate market. The idea of speculation as a major factor in Vancouver and Toronto would concern the entire Canadian financial system. While Toronto and Vancouver would have a strong interest in curbing speculation, they can do no more than enforce current laws. The impact of overheated markets is a national issue.


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The Value of Property
Posted on Tue, 30 Aug 2016, 02:55:00 PM  in Real Estate Market
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Sturdier Homes

Many places in Canada see extremely harsh winters. Houses that have stood the test of time have value in more than just location and amenities. They've also accrued historical value, as well as utility. A house that can survive a subzero winter for decades while remaining functional has exceptional sturdiness to it. That said, these houses aren't always properly represented by the market. Right now, China has been fostering a false bubble in Canada. Though predictions have been against the bubble's growth for the last several years, as of August, 2016, it has yet to burst. How this has been done is through foreign purchases of luxury properties. This kind of buying has facilitated an up-spike in property values.

Canadian Debt

property valueCurrently, Canadians are spending more than they make. There is substantial debt, and the housing bubble has pushed credit expansion to the furthest limit. As a result, the cost of homes today and their actual value aren't going to be equivalent. Some properties which are of exceptional value will be passed over because of their location, while newly-built subdivisions may boast outlandish prices, but never be filled with home owners. Indeed, as the bubble becomes undone, there will be a ubiquity of empty subdivisions priced unrealistically in Canada. When the bubble finally bursts, it will totally reshape the market.

Profiting in a "Down" Market

Excessive debt causes foreclosing and a ubiquity of apartment rental. There are going to be a lot of people that need a place to stay when the bubble bursts, but can't afford anything expensive, and certainly cannot afford to buy a house. Getting in now and buying up an inexpensive property with four or more bedrooms could be a great way to capitalize on this. Subletting (where legal in your community) can allow you to pay off your own mortgage incredibly fast. Imagine if your mortgage is $2000 a month, and you're able to take on four renters at $800 a month. You also pay about that much. Well now you're paying double the mortgage every month. On a $100,000 house just outside of town, you could have the property paid off from zero in two years and one month, depending on your APR. In such a case it would be wise to plan for about three years.

Anticipation

The key to profiting when a bubble bursts is to anticipate where the fallout is going to strike. If you're in a market that has appreciated wildly, selling immediately could make you a boatload of cash that can be turned into an even better property after the bubble bursts and prices plummet. Pay attention to the market, and plan ahead of it. They're saying the crash is imminent right now. But they've been saying the exact same thing since 2014. The fact is, market indicators are not the same as market predictors. Indicators can point to a good or bad market and turn up wrong every time. While there are many indicators which point toward a declination in Canadian real estate, as yet concrete predictors are not known--though China's stance on the issue, and their deliberate facilitation of the bubble, do point toward market collapse sometime in the near future.

Only Take Sustainable Risks

Whatever you do, be careful. In the real estate market, you've got to pay to play; but that doesn't mean going all in on your first hand, or even subsequent hands. In poker, the best players never go all in until the end of the game. In real estate, the stakes are so much higher. Know your market, and be ready to move when the time comes.


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The Top Things To Consider When Buying Or Selling
Posted on Mon, 15 Aug 2016, 02:50:00 PM  in Home buying tips,  Home selling tips, etc.
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It doesn't matter if you actually want to buy a new home or sell the one you are currently in, so long as you remember there are a handful of things that can significantly effect the cost of the house. While many people may think it is important to have high end finishes, the truth of the matter is you need to be wary of some of the high dollar items. Finishes are just that; finishes. But, if you have to dig into the bones of a home to make changes whether you are prepping to sell or considering buying, these are the items you must be conscious of.

Mold and Mildew

considerAny time a potential buyer spies mold or mildew growing on or inside of a house it can be a significant problem. Not only does mold signify there are tremendous problems with respect to drainage or leaks, but the fact of the matter is if you have mold in or around your house it can be a nightmare. Mold isn't just an allergic and poisonous substance by itself, but it can spread and get into other things all around the rest of the home before you even know it. In order to remove the mold spores you have to pull up finishes and expose the underlying wood, and the remediation can be extremely touchy as well to make sure you have removed it all. If you are preparing to buy then you definitely need to have a mold test. And, if you are going to sell, you should ensure you know about any mold problems far in advance as well.

Rotting Wood or Dryrot

If you happen to be in an area that has termites or you think you could wind up having any other problems with unfinished and untreated wood in a given house, then you have to be aware of wood problems. Because woods are the bones of your home you should be able to imagine the complications that can occur when your structural integrity is compromised. Not only could you see minor shifts in the house or home if support starts to give away, but you can also wind up having more problems come in through the holes where wood used to be. Throw in the fact that termites or other pests may still be present once you have seen signs of them being there and you can tell why checking for dry rot or other wood problems like termites can be very important to sniff out ahead of time.

Foundation Issues

If you want to buy a house and there are cracks in it, you should keep your eyes open. Obviously houses settle and shift over time. However, if you have a problem with the actual structural foundation itself then you could absolutely be looking into significatn costs. Likewise, if you are going to try and sell your home at some point then you should verify any minor structural problems now to stop them from getting worse and to fix them for later. 

General Pests

Pests can be a problem in any home for a few reasons, but one of the worst things about pests is the damage they can leave behind. Not only will fumigating and general cleanup run a decent amount of money, but you can also see the tremendous amount of long term annoyance that can come with trying to find the holes, cracks, or entryways that pests use and will continue to use.

As long as you are able to consider all of the problems or potential pitfalls that can come with buying a house, then you should be in a much better position for pricing and awareness. However, if you are looking to sell your house then you should absolutely be aware of the highest cost items to repair when it comes time to sell.


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What to Look for in an Investment Rental Property
Posted on Sat, 30 Jul 2016, 03:35:00 PM  in Home selling tips,  Real Estate Market, etc.
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When you look at rental homes for sale, you might look at dozens of properties with your agent without knowing what you should look for or what home is best for your needs. While you may have an idea in mind about whether you prefer a home for one family or multiple families, you may have no clue what you need. You may also focus more on your own likes and preferences than what tenants would like. Before looking at another rental home, check out a simple list of what to look for in a rental property.

Size and Space

One thing you need to focus on is the overall size of that house and the space available. Depending on the city where you buy, you may find that homes are extremely close together and that homes have tiny yards. Other cities offer more space between neighboring houses and larger yards. Keep in mind that the amount of available space may determine the type of tenants interested in renting that home. A couple with two small children won't like a house that has no backyard and small bedrooms.

Neighborhood Specs

Taking a short drive through the neighborhood surrounding that house is the best way to get a feel for that area and to learn more about the neighborhood in general. When tenants come to look at that house, they'll ask you questions about the school district, whether there are any parks nearby and whether the neighborhood is safe. Though you can find cheap homes in some neighborhoods that cost as little as $10,000 or less, you might have a difficult time finding tenants or finding tenants willing to stick around and renew their leases.

rental-investmentUnique Features

One or more unique features can make a house more appealing to tenants and get you more money too. Look at comps for the neighborhood before looking at houses. You can then compare the features found on traditional homes nearby to the features found on the home you want to buy. Features on rental homes that tenants like include a large fenced-in backyard, ample parking on the street, a large garage with its own garage door opener and a large front or side porch. You can also highlight other features like a walk-in closet or en suite bathroom in the master bedroom or built-in shelving in the living room.

Overall Condition

A turnkey property is one that you can turnover almost as soon as you buy it. If you buy a rental home that is in great condition, you can often advertise that property for rent and find tenants less than a month after becoming the new owner. If, however, you buy a house that needs a significant amount of work, it might take months before you even start looking for renters. Homes that are in poor or bad condition will require more money upfront, which cuts into your overall profits.

Current Residents

As you look at rental homes, give some thought to the current residents living there too. Talking with them or seeing how they act can tell you a lot about that property. You can easily see if they are the type of people who take care of regular maintenance and keep the home in good shape, or if they are the type of people who will spray paint the walls and leave behind mountains of trash that you need to remove later.

Buying a rental home requires more than just finding a house that is in good condition. You also need to look at the current residents, the surrounding neighborhood, the space available and any unique features it has.


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Tips for Summer Showings
Posted on Fri, 15 Jul 2016, 03:20:00 PM  in Home selling tips,  Real Estate Market, etc.
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Rising temperatures mean rising home sales! Whether you’re just putting your home on the market or it has been sitting there a while, follow these easy and affordable tips to have your home ready for summer showings.

Manage the Thermostat

Use a programmable thermostat to ensure the inside temperature is around 23 degrees Celsius (75 degrees Fahrenheit) during showings. This will leave your home cool and comfortable for potential buyers, but not use excessive energy while the home is vacant. If you've already moved out of the home, consider a Wi-Fi-enabled “smart” thermostat that will allow you to adjust the temperature specifically during scheduled showing times.

Keep Up With Curb Appeal

Maintaining a yard can be difficult work, but you’ll want your buyers to believe the beauty is effortless. Continue a regular lawn-mowing schedule to keep weeds at bay. If you’re unable to do it yourself, hire a service or find a teenager in the neighborhood who wants to make some extra money each week. In drier weather, run your sprinkler or sprinkler system a little each morning to keep the grass lush and green. Consider adding some color to your path or front steps with hardy annual flowers. Trim bushes and trees so that your house is visible from the street and plenty of natural light shines through the windows inside.

summerEasy Sweat Equity

Was that rosy-colored front door once a vibrant red? Is the siding on the back of the house supposed to be white? Freshening up painted items such as doors, shutters, railings, and mailboxes can be relatively inexpensive but can produce substantial results. Use a house-washing product or some elbow grease to scrub your siding if it hasn’t been cleaned in a while. Make the home look fresh and clean instead of old and dated.

Highlight Outdoor Living Spaces

If you have a deck or patio, stage the area so that potential buyers see the space as another room on the house. Use outdoor furniture, cushions, and accessories to make the space inviting and to give the buyer an idea of what it would be like to entertain in the space. Hide items like air conditioners or gutters behind bushy plants. Be sure to open curtains inside the house so that buyers walking through can see and appreciate this extra outdoor space.

Have Photos Updated

If your home has been on the market for a while, it’s possible that buyers are still seeing photos of your home with snow. Ask your Realtor if it would be beneficial to have your outdoor photos updated to highlight how the property looks today.

Every Showing Counts

When you first put your home on the market, you will probably make sure it is perfectly staged and clean from top to bottom. You will quickly realize that preparing for each showing can take a lot of time and energy, and it can be hard to muster that dedication every day. The truth is, however, it’s important to treat every showing as if it were your first. You never know when the right buyer is going to walk through the door. Create a showing plan and stick to it every time. If you’re planning to go on vacation, prepare your home accordingly and notify your Realtor so that she can open your home for showings all day while you’re gone.

Many home buyers are eager to finalize purchases soon in order to close and be settled before school begins. Use these tips to take advantage of summer’s beautiful backdrop and to present your home in the best light to the most potential buyers.


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Upgrading Your Home's Entry Points
Posted on Thu, 30 Jun 2016, 10:25:00 AM  in My services
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Your home may have several new exterior improvements, including paint and roofing, but there are other areas that are in need of upgrades as well. The structure's entry points are numerous, and they include windows, doors and garage doors. These items swing and slide open on a daily basis. Although you may not give much thought to their use, potential home buyers might concentrate on their beauty and functionality. Consider some of these entry-point upgrades that you can make and earn that perfect home-sale price.

Replace the Garage Door

entryOne of the simplest entry points that can be upgraded in just a few hours is the garage door. Some doors might be more than 20 years old, and they creak when they're opened. Add a metal, roll-up door to your home. These models come with several style and color options in order to match the structure's decor almost perfectly. Professionals will usually remove your old door at no charge at the same time. If any upgrades are being considered, the garage door should be first.

Add Replacement Windows

Single-pane windows allow noise and air to filter through the home. When buyers walk through a property, they'll notice old windows and make a mental note of them. Ask a contractor to add replacement windows. The frames remain intact, but workers attach new glass panels as an upgrade. Look for dual-pane windows with trapped air or gas within the assembly. The home will have better energy conservation and less noise pollution. These windows often come with extensive warranties that can be transferred to the new owners in time.

Weatherstrip Windows and Doors

If new windows and doors cannot be installed on your budget, your current materials can be improved as an alternative. Purchase a weatherstripping kit from a local home-improvement store. Add the kit to every door and window in the household. These kits essentially seal the space between the frames, doors and windows. Drafty homes are completely contained as air-conditioned air remains inside the structure. You can point out this upgrade to your potential buyers too. Buyers might think of weatherstripping as a hassle, and a turnkey home is a feature that they keep in mind.

Adjust the Doors

If some of your doors seem to get stuck as they swing open, it's time to rehang them. Ask a local contractor to adjust each of your doors. Each door should swing open and close with ease. They shouldn't slam shut by themselves either. As buyers walk through a home, they'll notice the ease with which the doors move. Take the opportunity during the rehanging process to replace the door's hardware too. New doorknobs and locks are features that stand out to potential buyers.

Consider New Window Screens

The home's window screens are protective elements that are often overlooked. They might be full of holes or torn. Take some time out to replace the mesh. Home-improvement stores sell the mesh in rolls in order for you to use it on each window. Pull the frames from the windows, and carefully remove the mesh. Stretch the new mesh across the frame, and lock it into place. New screens give the windows a fresh appearance. Buyers may even believe that the entire window is brand new if you clean it up before an open house.

If you're unsure about which entry point should be upgraded first, ask the opinion of a trusted friend. They have a different perspective that can be valuable as your home sale approaches. Take their opinion and weigh it against your budget options. Changing just one item can mean the difference between multiple bids and no buyers at all.


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Trying to Sell Your Home - Avoid These Mistakes
Posted on Wed, 15 Jun 2016, 10:20:00 AM  in Home selling tips
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Selling a home can be stressful. It is not unusual for some houses to sit on the market for a long time. It is a buyers market. In order to sell your home in this competitive landscape, it is important to be aware of how you might be unknowingly turning sellers off and avoiding making these mistakes.

Unflattering Listing Photos

sellingBuyers make snap judgments of houses immediately. Many search for homes online and if the photos turn them off, they will not bother to visit the house in person. So, it is important that their first impression of your home be a positive one. When marketing your home online, show as many photos of your property as possible. Help buyers visualize themselves in your space by posting high-quality interior photos. Make sure that the photos highlight your home’s best features. Buyers want to see photos of the kitchen, bathrooms and the living space. Declutter and clean up. Nothing can turn a buyer away quicker than a cluttered, unkempt home. As more and more buyers use mobile apps to shop for homes, the quality and quantity of photos matter. It might be worth it to invest in high-quality professional photos. Although it can cost a bit of money, the cost will usually be recouped in the form of better offers on your home.

Bad Odors

Bad smells are one of the biggest turn-offs for home buyers, according to real estate research. Pet odors, food smells and cigarette smoke are big culprits. Strong smells, such as onions, tend to stay around long after the meal is over. Therefore, if you have your home on the market, try to diffuse these smells as much as possible. Leave windows open while cooking. After you are finished with the meal, make a DIY home fragrance with cinnamon or another natural deodorizer. Avoid strong fragrance sprays, as they can make the problem worse, especially for buyers with asthma or allergies.

A Kid's Room That Looks Like It Came From a Disney Movie

Although, your child’s Disney princess themed room might be very cute, it will likely turn off potential buyers who do not share the same love for Disney. If your home attracts first time home buyers without children or families with teens, for instance, your child’s cute Disney-themed room will likely be a turn off. Many home buyers will not want to bother with re-decorating the room themselves. They will just move on the next home. So, before putting your home on the market, repaint the room a neutral shade, change out themed lights and wall fixtures for more neutral toned fixtures.

Fixtures and Appliances that Came From the 1970's

Disco-era fixtures and appliances will turn off potential buyers. They might wonder whether or not you have bothered to make any updates to the home since the 1970s. Tarnished doorknobs, outdated cabinet knobs and pulls and ancient ceiling fans are easily updated at little cost. Small updates can go a long way towards increasing a home’s attraction to potential buyers. Most buyers want a home that is move-in ready. They do not want the hassle of having to update fixtures and knobs after moving in.

Avoiding the above common buyer turn-offs can help you attract more buyers to your home. Most of the above things can be easily taken care of with very little hassle and cash. Home buyers want to be able to visualize themselves in your home; just small changes can make this happen.


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Breaking Down the Mortgage Payment
Posted on Mon, 30 May 2016, 10:50:00 AM  in Home buying tips
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When you buy a home, you're greeted with a complex mortgage payment that may appear confusing at first. Unlike a rental payment, the monthly mortgage amount is a mixture of several different charges. For first-time home buyers, it's important to understand what you're paying for each month. With mortgages lasting 20 years or longer, understanding them should be a top priority for investors.


Principal and Interest
The main parts to any mortgage are principal and interest. The principal is the amount you agreed to pay the sellers during the bidding process. For example, the initial home price or principal might have been $150,000. When you pay your mortgage each month, you slowly pay down the principal's initial amount. The interest amount is the money charged to your loan by the lender based on your good credit. When you begin your mortgage payments, you'll normally pay more interest than principal. As time goes by, the principal will be paid off faster than the interest. Most lending institutions use this amortisation schedule for their clients.

Trust Accounts Explained
If you only paid the principal and interest on the mortgage, you'd have a rude awakening when property taxes and insurance are due. Every year, you must calcpay a certain amount of taxes on your property. These taxes pay for community resources, such as schools and emergency services. Depending on your Canadian region, taxes could be due every quarter or on a semiannual basis. Insurance is required by the lender because the home must be covered in the event of a catastrophic accident or natural disaster. You can easily pay for taxes and insurance by adding a trust account to your mortgage payment. In one lump sum, you'll pay the principal, interest, taxes and insurance. As a result, you won't receive a huge bill for these items. They're simply paid off in small increments across the entire year.

Monthly or Weekly Payments?
In most cases, you'll pay for your mortgage on a monthly basis. The interest is calculated monthly, and allows you to make 12 payments each year. This payment schedule usually culminates in a mortgage period that lasts 15 or 30 years. However, you do have the option of paying for your mortgage on a weekly basis. Essentially, your monthly payment is divided by four, and the bank withdraws this lower weekly amount on a day of your choosing. Because there are 52 weeks in a year, you'll make an extra monthly payment with this scheduling type. As a result, you'll pay fewer interest charges and complete the mortgage in less time than a standard monthly payment.

Adding Onto Your Payment
Another way to pay off your mortgage faster is adding an amount to the standard monthly payment. Every time you receive your mortgage bill, there's a section for an additional payment. Add any funds you can to the principal. Over time, you'll reduce the mortgage's length and save substantially on interest amounts. However, don't compromise your budget to add this extra amount. Always pay the required mortgage, and only add to it when it's possible. You should still have a comfortable lifestyle with any mortgage amount.

A smart way to start any home buying process is beginning with a trusted lender. This bank can look over your income and compare it to your liabilities. Using complex calculations, the lender forms a mortgage payment that you can afford. It's based on a given property value range, such as $200,000 to $250,000. Use this pre-approved lender amount to guide your property search. When you remain within the pre-approved price range, you'll have no problems affording the monthly payment.


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How to Clean Up Your Credit Before Buying a House
Posted on Sun, 15 May 2016, 11:15:00 AM  in Home buying tips,  My services, etc.
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Since mortgage interest rates have been low for several years, many home buyers are under the misconception that their credit score won’t make that much difference in the amount they pay over the life of the loan. In reality, even a point or two difference in the interest rate can easily amount to $50,000 to $100,000 over the term of the average 30-year home loan. A lower interest rate may also result in lower monthly payments, which can leave extra cash in your pocket. The secret to qualifying for the best interest rate on your mortgage is to start whipping your credit score and history into shape at least a year before applying for your loan. The following steps will help you improve your financial picture so that you can face your mortgage lender with confidence.


What Is a Good Credit Score?
Credit scores range anywhere from 300 to 850. Your score is calculated using a combination of factors, including the length of credit history, past payment history, type of credit, and amounts owed in relation to available credit. As a general rule, individuals with credit scores 740 and above are in a position to qualify for the best loan rates. You may still qualify for a mortgage even if your score is below 740; however, you will likely pay one to two points more in interest.

Get Your Credit Report:
It is important to review your credit report at least once a year, so you will have a clear picture of where you stand. Be sure to dispute any inaccuracies that youmoney may find with the credit bureaus.

Lower Your Debit-to-Income Ratio:
Your debit-to-income ratio is the amount of debt your lender believes your income will support. It is recommended that you keep housing payments at no more than 28 percent of your monthly income. You should strive to keep the total of all your debt to less than 36 percent of your income. You can lower your debt-to-income ratio by eliminating any low-balance loans that are close to being paid off and reducing your outstanding credit card debt.

Get Rid of “Toxic” Accounts:
In-store financing and rent-to-own accounts have horrendous interest rates, high payments, and have a bigger impact on your credit score than other types of debt. It is best to pay off and close these accounts as quickly as possible.

Pay on Time:
Almost everyone has had a few late payments here or there. You can lessen the effect of past payment problems by ensuring that you have at least six to 12 months of consistent on-time payments before applying for a mortgage.

Lower the Amount of Credit You Utilize:
You should try to keep credit card balances to less than 20 percent of the total credit line. You should also avoid closing credit cards as you pay them off unless they are store cards or have an annual fee. Closing the accounts will lower your amount of available credit and actually increase your debt-to-income ratio.

Avoid Applying for New Debt:
Opening up a lot of new credit lines at once can lower your credit score. Each time you apply for credit, the lender places a hard inquiry on your credit, which has an adverse effect on your overall score. An influx of new accounts also raises a red flag for lenders that you are about to become overextended. 

It can be frustrating to have to delay your home search in order to work on your credit; however, a little patience and diligence can earn you thousands of dollars in savings. 

 


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