Category Archives: construction loans

Why Canadians who own Florida homes need both hurricane and flood insurance

About 3 million Canadians visit Florida every year, and thousands own property there. So with Hurricane Irma threatening to do heavy damage to the state, should those property owners have flood or hurricane insurance?

The short answer is yes, they need both.

The latest forecasts suggest Irma’s winds could carve up much of Florida’s coast, damaging property from the Florida Keys through Jacksonville, and some experts say this could become the costliest storm in U.S. history.

For Canadian owners of property in Florida, the one bit of good news is that Irma is moving swiftly and should bring less than a quarter of the rain that Hurricane Harvey dumped on Texas when it stalled over the state. South Florida is also used to flooding and has a better flood control system than Texas.

Still, Irma could still cause significant water and wind damage. That’s why property owners need to be sure they have both hurricane and flood insurance – two distinct policies, says Brad Hubbard of National Flood Experts, a U.S.-based company that helps homeowners decide what kind of disaster insurance they need.

“If you have home insurance or even hurricane coverage, it does not cover flood. And flood insurance does not cover hurricane (damage). They are two, totally separate policies,” he told CTV Toronto from Tampa, Fla.

For Canadian snowbirds hoping to buy last-minute coverage before Irma hits, they will find they are out of luck. Most flooding polices must be purchased 30 days before a storm.

Property owners in areas known as Special Flood Hazard Zones are required to have federal flood insurance, through the National Flood Insurance Program (only a few private insurers offer flood insurance in Florida.).

In fact, U.S. mortgage lenders are required to make sure property owners living in flood hazard zones have the insurance in order to qualify for federally-backed loans.

Yet, according to an investigation by The Associated Press, just 42 per cent of homes in Florida’s 38 coastal counties are covered. In the counties currently under partial evacuation orders, only 34.3 per cent have proper coverage.

With storms becoming more severe and arriving more unpredictably, purchasing flood insurance is simply a smart investment for Canadians, says Hubbard.

Because Florida is particularly vulnerable to hurricane damage, many private insurance companies are reluctant to offer coverage to property owners who live in southern, coastal areas of the state.

That’s in part why the Florida state government created Citizens Property Insurance Corporation, a non-profit government agency that provides insurance to owners unable to find insurance in the private market.

Citizens’ spokesperson, Michael Peltier, says insurance premiums can vary depending on the type and the location of a property. He says premiums for “multi-peril insurance” — which includes hurricane coverage — in Miami-Dade County, for example, can range from an average of US$930 for a condominium unit, to $3,400 for a single-family home.

The same insurance in Orlando, Orange County, will cost an average of $1,400 for a single family home, simply because the county is further inland.

He recommends that Canadians who own property in Florida should ensure they are fully protected, before storms like Irma arrive.

“We would urge them to contact their insurance agent to make sure they have the coverage they need,” he told CTVNews.ca.

Source; With a report from CTV Toronto’s Pat Foran and files from The Associated Press

Advertisements
Tagged , ,

When planning home improvements, finding a reliable contractor is an important first step

Hiring the right contractor can make all the difference when renovating your home

Skyrocketing Toronto real estate prices are motivating many existing homeowners to improve their homes, rather than replace them. “We’re seeing a big trend to add value to homes through renovations and to increase living space by building ‘up or out,’” said Kris Potts, president of Toronto’s Norseman Construction & Development. “In doing so, existing homeowners are achieving the living space improvements they would normally seek by moving to another home, but at a much lower cost.”

Whether the homeowner’s goal is to add living space by ‘building up or out’ or just to bring kitchens, bathrooms, and other rooms up to 2017 standards, their biggest challenge is often finding a contractor who can be trusted to do the job right; on time and on budget.

With an impressive 83 per cent score on the consumer rating site HomeStars.com, Norseman Construction & Development is one such contractor. Established in 2005, this family-owned-and-operated company listens to its customers throughout the design and build process; keeping them constantly informed about their project’s progress until it is completed, and each customer has received exactly what they asked for.

“We do our best to take each homeowner’s vision and make it a reality, ensuring that the finished product exceeds their expectations,” said Potts. “We do this by keeping on top of the perpetual advancements in the field, and by addressing the constantly changing needs of local homeowners. Add Norseman’s wealth of experience, superior workmanship and unparalleled attention to detail, and we are able to provide our customers with innovative solutions, competitive pricing and timely results on all their home improvement projects.”

Norseman’s attention to customer needs starts with the company’s consultation process. “Book an appointment on our website, and one of our skilled estimators will come to your home to provide a free quotation on whatever you have in mind,” said Kevin Potts, Norseman’s Operations Manager. “We will do our best to come up with a plan that not only meets your needs, but also fits within your budget and schedule.”

Once the home improvement project is underway, Norseman keeps customers ‘in the loop’ about the project’s progress on a daily basis. “Our people use a program called Buildertrend to upload status reports and photos of each day’s work,” Kevin Potts said. “Our homeowners can log into it as often as they wish to see firsthand how their build is going, and to get answers to any questions they may have.”

“Today’s homeowner is very savvy, thanks to all the home improvement shows on TV,” said Becky Potts, Norseman’s Marketing Manager. “Here at Norseman, we respect this level of awareness by giving homeowners open access to information about their projects at all times. Check out our Facebook, Instagram, and Twitter pages, and you will see our customer-first values in action!”

‘Customer-first values’ is a phrase that means something at Norseman Construction & Development. It is why this contractor provides a two-year warranty on its work – many other contractors only provide a year’s coverage.

It is also why the Potts family insists on alerting customers to project-related issues should they occur. All construction projects carry with them some element of the unknown. Opening walls or floors can bring to light new information not present at the project’s beginning. “Setbacks happen,” said Kris Potts. “When they do, we tell the customer about them upfront, and we fix them in consultation with the customer.”

As well, customer-first values drive Norseman’s approach to its skilled tradespeople. “Unlike some other contractors who are focussed on profits first, Norseman treats its trades fairly,” said Kevin Potts. “In return, we inspire loyalty in the most skilled tradespeople in the industry. The payoff is the best quality work on our customers’ homes.”

That’s not all: Norseman invests money and time in ‘giving back’ to the GTA community. Its charitable efforts include underwriting the annual free Messiah for the City Christmas concert for clients and staff of the United Way. This much-loved music is performed by the Toronto Beach Chorale and members of the Toronto Symphony Orchestra. Norseman also supports Habitat for Humanity, which aids low-income families in attaining affordable housing; serves hot meals at the Scott Mission, and funds numerous local sports and charity events in the GTA.

“The way we treat our customers and our community underscore what Norseman Construction & Development stands for,” concluded Kris Potts. “When you hire us for your home improvement project, you will receive quality-oriented, customer-focussed service from a stable firm that truly puts you first, and who cares about the community we all live in.”

For more information about Norseman & Construction & Development, visit their website or connect on Facebook.

This story was created by Content Works, Postmedia’s commercial content division, on behalf of Norseman Construction.

Source: National Post

Tagged , , , ,

The rise of Willowdale, Toronto’s hottest new neighbourhood

Infill houses line much of the block of Elmwood Ave., across the street from 165 Elmwood Ave., an original North York backsplit that just sold in Oct. 2015 for $1.5 million.

Builders are always looking for bargains, so it caused quite a stir when a pleasant backsplit went on the market in North York’s Willowdale area earlier this month for what may have seemed like a crazy amount to anyone else — $1.1 million.

It didn’t matter that its four bedrooms featured a virtual rainbow of wall-to-wall carpeting, or that its panelled kitchen was far more dated than designer.

All that counted to the dozens of interested builders who filed through the front door the first two frantic days was the patch of grass and asphalt on which the house has stood since 1961 — all 40 by 131 feet of it.

By Day 3 some 17 offers had been registered. The best was for $1.551 million — more than $400,000 over the asking price.

“Seventeen isn’t so crazy. That’s happening a lot here now,” says long-time next-door neighbour Johnny Yoon, who is also a realtor in this booming Yonge St. and Sheppard Ave. area.

This once-sleepy suburban neighbourhood is one of the hottest real estate markets in Toronto right now, partly due to demand from wealthy Persians and Chinese.

All that foreign interest has spurred a staggering remake of this quiet residential pocket that started some years ago but has exploded, this year in particular, in bidding wars for its relatively tiny postwar homes, simply because of lots, which tend to average 50 feet, but can stretch in some cases to 70 or 90 feet.

It’s also helped skew overall real estate values for Toronto as original houses are replaced with new ones coming on the market at two to three times the former price.

Willowdale is far from alone. Rebuilds have broken out all along aged City of Toronto streets as builders cash in on the massive move to intensification across the region and a greenbelt that has set firm parameters on how much land is left for residential development.

“You’re just seeing a lot of market forces at play now,” says land economist Mark Conway of N. Barry Lyon Consultants, who’s seen a significant pickup in teardowns in his own Scarborough Bluffs neighbourhood.

“It’s pretty easy for me to understand why people are doing this — the economics are completely in line with the market when you consider that a detached house in the City of Toronto is worth over $1 million now.

“It’s definitely changing the character of neighbourhoods and it’s certainly not good for affordability. But it’s inevitable. We’re becoming a victim of our own success as a city.”

Values have especially skyrocketed in central Willowdale because its quiet, tree-lined streets are close to two subway lines (Yonge and Sheppard), highways, top-ranked schools and a host of big-city amenities — all of that now at a discount, thanks to the weak Canadian dollar.

Peyvand Jalali, one of the top real estate agents in the area has a roster of developers looking for original homes to raze and rebuild. Land values alone have escalated so dramatically the last couple of years in this area just east of the North York Civic Centre that Jalali says banks are appraising most original homes at 97 per cent land value.

That means a developer can buy an existing home for $1.5 million, tear it down, build a top-of-the-line new 3,000- or 4,000-square-foot home and make $500,000-plus, with prices now heading north of $3 million for rebuilds here boasting suburban-style basics like grand family rooms, granite-clad kitchens and spacious ensuite bathrooms.

All the demand is also being felt at city hall, where applications for zoning variances are up dramatically and there’s growing pressure from builders to go bigger than ever or sever 50-foot lots and build two homes, instead of one.

“It’s just becoming the Wild West,” says area councillor John Filion who has a dedicated staff member charged with keeping on top of rebuilding requests.

“We have bylaws for a reason and you are supposed to have a good reason to vary them, and a good reason isn’t because you want to make more money.”

Some realtors have taken to going door-to-door, says Jalali, searching for owners of original homes willing to sell. Developers like Kingsgate Luxury Homes, which didn’t return phone calls from the Star, simply post signs at existing build sites: More Lots Wanted.

All those new builds aren’t all bad, stresses land economist Conway.

Much of the city’s housing stock is aging out and not built to modern standards. They are tiny for today’s families, lack ensuite bathrooms and workable kitchens but, more importantly, they “just aren’t healthy.

“They aren’t insulated properly, some have asbestos and urea-formaldehyde so there’s good reason to rebuild many of them anyway.”

Out with the old …

328 Princess Ave.

50 by 131 foot lot

Listed Feb. 26, 2015 $1.28 million

Sold Feb. 27, 2015 $1.518 million

328 Princess Ave, which sold for $1.518 million in February.

/

328 Princess Ave, which sold for $1.518 million in February.

331 Princess Ave.

50 by 133 foot lot

Listed March 28, 2015 $1.288 million

Sold March 30, 2015 $1.568 million

331 Princess Ave, which sold for $1.568 million in March 2015.

/

331 Princess Ave, which sold for $1.568 million in March 2015.

395 Empress Ave.

50 by 125.5 foot lot

Listed March 16, 2015 $1.288 million

Sold March 26, 2015 $1.534 million

395 Empress Ave, which sold for $1.534 million in March 2015.

/

395 Empress Ave, which sold for $1.534 million in March 2015.

In with the new …

369 Hollywood Ave.

Asking price $2.89 million

Replaced original 1.5 storey, 2 bedroom house

Sold for $1.039 million in September 2013

369 Hollywood Ave, which has an asking price of $2.89 million.

/

369 Hollywood Ave, which has an asking price of $2.89 million.

156 Elmwood Ave.

Asking price $3.28 million

5 bedroom, 4,000 sf-plus

Replaced original 1.5 storey, 3 bedroom house

Sold for $1.246 million in February 2014

156 Elmwood Ave, which sold for $1.246 million in February 2014.

/

156 Elmwood Ave, which sold for $1.246 million in February 2014.

122 Kingsdale Ave.

Asking price $3.199 million

5 bedroom, 4,000 sf-plus

Replaced original post-war home

Sold for $1.2 million in June 2014

122 Kingsdale Ave, which sold for $1.2 million in June 2014.

/

122 Kingsdale Ave, which sold for $1.2 million in June 2014.

Willowdale by the numbers

Willowdale by the numbers:

46.8 % — GTA house price growth in past 5 years

63.5 % — Willowdale house price growth in past 5 years

$230 to $250 per square foot — average cost of top-of-the-line rebuild

$1.5+ million — average price of original house on 40-foot lot

$1.7+ million — average price of original house on 50-foot lot

13 — applications to sever lots in 2012

20 — applications to sever lots just to October 2015

177 — applications for variances to build bigger homes in 2012

247 — applications for variances just to October 2015

Source: Toronto Star –  Business Reporter, Published on Sat Oct 24 2015

 

To get your construction financing request reviewed, contact the Ray C. McMillan Team to arrange your no-obligation consultation or visit www.RayMcMillan.com

Tagged , ,

Self-employed? Prepare for a long conversation with your mortgage broker

Getting financing isn’t as easy as it used to be, say mortgage brokers — and for the 15% of Canadians who earn money for themselves without a steady employer’s salary, it’s harder still.

If you’re self-employed and about to apply for a mortgage, be prepared for some serious form-filling. Getting financing isn’t as easy as it used to be, say mortgage brokers — and for the 15% of Canadians who earn money for themselves without a steady employer’s salary, it’s harder still.

“Back in the day, five years ago you could hold up three fingers and say ‘I promise I earn $100,000, and many lenders would take your word for it,” says Claire Drage, a senior mortgage agent with Mortgage Alliance in Greater Toronto. But things have changed, she warns. “It will take more paperwork, more documentation, more justification from the borrower on why they should be approved.”

Since 2008, the government has lowered the maximum amortization period from 40 to 25 years, and reduced the maximum gross and total debt service ratios to 39% and 44% respectively. Then, last October, the Office of the Superintendent of Financial Institutions’ B-20 rules put the underwriting practices of federally regulated financial institutions under scrutiny.

“Generally these changes have made for more rigorous review of documentation which does impact the self-employed borrower programs to a greater extent than salaried borrowers,” says Gary Siegle, Alberta-based VP of the Prairies for mortgage services firm Invis.

The self-employed often hinder themselves with creative accounting to lower their income. “They may have a different way of reporting all their income, reducing all their taxes as much as possible. Those are the ones that are more challenging,” says Daryl Harris, a broker at Verico One Link Mortgage & Financial in Winnipeg, and chair of the Canadian Association of Accredited Mortgage Professionals. Those not reporting cash jobs also reduce their provable income, making it harder to get a mortgage.

 

“Even though you’re self-employed and you benefit from amazing tax breaks, and your personal income tax return is incredibly low, you still have to prove to the lender that you can afford to pay this mortgage back,” adds Ms. Drage.

For those that find it hard to prove their income, stated income programs are an option. Designed for those with less than three years’ business operation, it requires at least a 10% downpayment, and not all lenders support it. TD Canada Trust, for example, looks instead at documented income such as T1 financials, business financials, and notices of assessments.

Changing attitudes among lenders makes it more difficult for the self-employed to deal with top-tier banks, says Don Barr, president of Verico Select Mortgage in Victoria. “It is forcing a lot of stuff out of the ‘A’ business and into the alternative business,” he says. Alternative lenders, some of which are not federally regulated, may take a less rigid approach when assessing self-employed applicants. However, the trade-off is often a higher interest rate.

There are several things to remember when applying for financing:

• Loan-to-value matters. Offering a 10% downpayment will make the process far more difficult. They care more than ever about up-front equity.
• Keep up with your payments. Make sure that you are up to date with the CRA before applying to a lender.
• Be organized. Ensure that all your accounting and tax documentation is up to date, and that you are reporting
• Pay off your credit. Get those outstanding cards and lines of credit paid down before you let your lender score you.
• Be prepared to adjust your expectations. You may have to adjust your target price after talking to a lender.
• See if your lender will ‘gross up’ your income. Some lenders may add a percentage when assessing your taxable and/or non-taxable income to allow for business expenses you incur.

And above all, start early in the process, preferably with a pre-approval before you look for a home, because one thing’s for sure: you’ll be doing more hoop-jumping than you think.

Source: Danny Bradbury, Special to Financial Post |September 19, 2013 

Tagged , , , , ,

Homebuyers are increasingly using mortgage brokers

Source: MortgageBrokerNews.ca

Homebuyers are increasingly using mortgage brokers// p”).eq(1).after(‘

The CMHC’s latest annual survey of mortgage consumers reveals some interesting insights into the habits and thoughts of those we do business with. Sixty per cent of mortgage renewers do so before the scheduled date with most doing so to avoid perceived mortgage rate increases. Almost half of mortgage consumers pay more than their minimum payment to pay off the loan sooner and 32 per cent have made a lump sum payment or increased their regular payment since their last renewal.

First-time and repeat homebuyers are two times more likely to use the services of a mortgage broker than homeowners who are renewing or financing (49 per cent compared to 24 per cent). Broker market share among repeat buyers has increased from 32 per cent in 2012 to 42 per cent in 2015. For first time buyers the market share for brokers has increased from 48 per cent last year to 55 per cent in 2015. The market share among renewers is stable at 21 per cent.

The survey also shows that there is a high level of loyalty towards mortgage lenders especially for renewers (86 per cent) with first time buyers less likely to use a lender that they already deal with (47 per cent). Rates are important when switching lenders (63 per cent) but so is an existing relationship (58 per cent).