Category Archives: home buyers

Canada’s Top 25 Best Places to Live in 2018

25. Whitby, Ont.

Rank in 2017: 103
Population: 136,657
Estimated Unemployment Rate: 5.7%
Median Household Income: $101,792
Average Household Net Worth: $817,453
Property Tax: 11.1%
Total Days Above 20°C: 100
Crime Rate Per 100,000:* 3,251
Family Doctors Per 100,000:* 81
See more stats about Whitby, Ont. here.


24. New Tecumseth, Ont.

Rank in 2017: 170
Population: 36,745
Estimated Unemployment Rate: 5.7%
Median Household Income: $96,041
Average Household Net Worth: $755,965
Property Tax: 20.5%
Total Days Above 20°C: 122
Crime Rate Per 100,000:* 2,906
Family Doctors Per 100,000:* 95
See more stats about New Tecumseth, Ont. here.


23. Newmarket, Ont.

Rank in 2017: 56
Population: 90,908
Estimated Unemployment Rate: 5.7%
Median Household Income: $95,636
Average Household Net Worth: $947,429
Property Tax: 16.1%
Total Days Above 20°C: 107
Crime Rate Per 100,000:* 2,749
Family Doctors Per 100,000:* 95
See more stats about Newmarket, Ont. here.


22. Bonnyville No. 87, Alta.

Rank in 2017: 228
Population: 14,658
Estimated Unemployment Rate: 3.9%
Median Household Income: $103,652
Average Household Net Worth: $789,157
Property Tax: 94.0%
Total Days Above 20°C: 86
Crime Rate Per 100,000:* 4,899
Family Doctors Per 100,000:* 93
See more stats about Bonnyville No. 87, Alta. here.


21. The Nation, Ont.

Rank in 2017: 123
Population: 13,275
Estimated Unemployment Rate: 5.1%
Median Household Income: $88,088
Average Household Net Worth: $478,620
Property Tax: 54.9%
Total Days Above 20°C: 113
Crime Rate Per 100,000:* 2,186
Family Doctors Per 100,000:* 142
See more stats about The Nation, Ont. here.


20. Whistler, B.C.

Rank in 2017: 84
Population: 13,193
Estimated Unemployment Rate: 4.3%
Median Household Income: $86,423
Average Household Net Worth: $1,460,422
Property Tax: 98.6%
Total Days Above 20°C: 83
Crime Rate Per 100,000:* 14,137
Family Doctors Per 100,000:* 159
See more stats about Whistler, B.C. here.


19. St. Albert, Alta.

Rank in 2017: 7
Population: 70,874
Estimated Unemployment Rate: 6.8%
Median Household Income: $123,948
Average Household Net Worth: $900,192
Property Tax: 66.3%
Total Days Above 20°C: 84
Crime Rate Per 100,000:* 5,313
Family Doctors Per 100,000:* 129
See more stats about St. Albert, Alta. here.


18. King, Ont.

Rank in 2017: 68
Population: 26,697
Estimated Unemployment Rate: 5.7%
Median Household Income: $110,816
Average Household Net Worth: $2,655,435
Property Tax: 18.1%
Total Days Above 20°C: 114
Crime Rate Per 100,000:* 2,749
Family Doctors Per 100,000:* 95
See more stats about King, Ont. here.


17. Lévis, Que.

Rank in 2017: 9
Population: 147,403
Estimated Unemployment Rate: 3.4%
Median Household Income: $79,323
Average Household Net Worth: $387,146
Property Tax: 65.1%
Total Days Above 20°C: 94
Crime Rate Per 100,000:* 2,784
Family Doctors Per 100,000:* 106
See more stats about Lévis, Que. here.


16. Toronto, Ont.

Rank in 2017: 129
Population: 2,933,262
Estimated Unemployment Rate: 5.7%
Median Household Income: $55,945
Average Household Net Worth: $906,663
Property Tax: 66.0%
Total Days Above 20°C: 117
Crime Rate Per 100,000:* 3,847
Family Doctors Per 100,000:* 75
See more stats about Toronto, Ont. here.


15. Fort St. John, B.C.

Rank in 2017: 160
Population: 21,251
Estimated Unemployment Rate: 5.7%
Median Household Income: $106,327
Average Household Net Worth: $440,481
Property Tax: 99.5%
Total Days Above 20°C: 64
Crime Rate Per 100,000:* 14,000
Family Doctors Per 100,000:* 104
See more stats about Fort St. John, B.C. here.


14. Saugeen Shores, Ont.

Rank in 2017: 17
Population: 14,109
Estimated Unemployment Rate: 4.9%
Median Household Income: $105,210
Average Household Net Worth: $777,845
Property Tax: 14.2%
Total Days Above 20°C: 110
Crime Rate Per 100,000:* 5,113
Family Doctors Per 100,000:* 107
See more stats about Saugeen Shores, Ont. here.


13. Mont-Royal, Que.

Rank in 2017: 8
Population: 21,172
Estimated Unemployment Rate: 6.3%
Median Household Income: $145,853
Average Household Net Worth: $2,392,238
Property Tax: 1.4%
Total Days Above 20°C: 117
Crime Rate Per 100,000:* 4,594
Family Doctors Per 100,000:* 124
See more stats about Mont-Royal, Que. here.


12. Red Deer, Alta.

Rank in 2017: 330
Population: 107,564
Estimated Unemployment Rate: 4.9%
Median Household Income: $90,844
Average Household Net Worth: $628,900
Property Tax: 86.7%
Total Days Above 20°C: 83
Crime Rate Per 100,000:* 19,460
Family Doctors Per 100,000:* 99
See more stats about Red Deer, Alta. here.


11. Camrose, Alta.

Rank in 2017: 216
Population: 19,488
Estimated Unemployment Rate: 3.9%
Median Household Income: $61,873
Average Household Net Worth: $519,846
Property Tax: 74.9%
Total Days Above 20°C: 83
Crime Rate Per 100,000:* 9,520
Family Doctors Per 100,000:* 99
See more stats about Camrose, Alta. here.


10. Halton Hills, Ont.

Rank in 2017: 24
Population: 65,782
Estimated Unemployment Rate: 5.7%
Median Household Income: $108,410
Average Household Net Worth: $1,190,923
Property Tax: 24.3%
Total Days Above 20°C: 120
Crime Rate Per 100,000:* 2,133
Family Doctors Per 100,000:* 91
See more stats about Halton Hills, Ont. here.


9. Saint-Lambert, Que.

Rank in 2017: 55
Population: 22,432
Estimated Unemployment Rate: 4.9%
Median Household Income: $83,626
Average Household Net Worth: $881,272
Property Tax: 12.5%
Total Days Above 20°C: 118
Crime Rate Per 100,000:* 3,724
Family Doctors Per 100,000:* 96
See more stats about Saint-Lambert, Que. here.


8. Westmount, Que.

Rank in 2017: 52
Population: 21,083
Estimated Unemployment Rate: 7.5%
Median Household Income: $117,755
Average Household Net Worth: $3,953,205
Property Tax: 8.9%
Total Days Above 20°C: 117
Crime Rate Per 100,000:* 4,594
Family Doctors Per 100,000:* 124
See more stats about Westmount, Que. here.


7. Canmore, Alta.

Rank in 2017: 29
Population: 14,930
Estimated Unemployment Rate: 5.1%
Median Household Income: $75,848
Average Household Net Worth: $1,478,315
Property Tax: 99.0%
Total Days Above 20°C: 64
Crime Rate Per 100,000:* 7,482
Family Doctors Per 100,000:* 138
See more stats about Canmore, Alta. here.


6. Milton, Ont.

Rank in 2017: 151
Population: 120,556
Estimated Unemployment Rate: 5.7%
Median Household Income: $111,875
Average Household Net Worth: $1,129,276
Property Tax: 67.7%
Total Days Above 20°C: 120
Crime Rate Per 100,000:* 2,133
Family Doctors Per 100,000:* 91
See more stats about Milton, Ont. here.


5. Lacombe, Alta.

Rank in 2017: 299
Population: 13,906
Estimated Unemployment Rate: 4.9%
Median Household Income: $97,800
Average Household Net Worth: $754,291
Property Tax: 76.6%
Total Days Above 20°C: 81
Crime Rate Per 100,000:* 7,932
Family Doctors Per 100,000:* 99
See more stats about Lacombe, Alta. here.


4. Saint-Bruno-de-Montarville, Que.

Rank in 2017: 6
Population: 27,171
Estimated Unemployment Rate: 4.9%
Median Household Income: $96,757
Average Household Net Worth: $864,221
Property Tax: 18.8%
Total Days Above 20°C: 118
Crime Rate Per 100,000:* 3,724
Family Doctors Per 100,000:* 96
See more stats about Saint-Bruno-de-Montarville, Que. here.


3. Russell Township, Ont.

Rank in 2017: 21
Population: 17,155
Estimated Unemployment Rate: 5.1%
Median Household Income: $112,644
Average Household Net Worth: $509,564
Property Tax: 50.1%
Total Days Above 20°C: 78
Crime Rate Per 100,000:* 2,540
Family Doctors Per 100,000:* 142
See more stats about Russell Township, Ont. here.


2. Ottawa, Ont.

Rank in 2017: 1
Population: 999,183
Estimated Unemployment Rate: 5.1%
Median Household Income: $93,975
Average Household Net Worth: $695,242
Property Tax: 39.3%
Total Days Above 20°C: 117
Crime Rate Per 100,000:* 3,782
Family Doctors Per 100,000:* 142
See more stats about Ottawa, Ont. here.


1. Oakville, Ont.

Rank in 2017: 15
Population: 209,039
Estimated Unemployment Rate: 5.7%
Median Household Income: $112,207
Average Household Net Worth: $1,742,036
Property Tax: 21.4%
Total Days Above 20°C: 107
Crime Rate Per 100,000:* 2,133
Family Doctors Per 100,000:* 91
See more stats about Oakville, Ont. here.

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Tagged , , ,
female home buyers, first time buyer benefits, home affordability, home buyers, housing affordability, millennial buyers, Uncategorized

In 2018, these homes will sell the fastest

With reduced buying power next year, expect house hunters to scoop up everything under $500,000.

Paul D’Abruzzo, an investment advisor with Rockstar Real Estate, says that while most people will qualify for less money on their mortgages, they won’t be completely shut out of the market. They will simply adjust their demands.

“If somebody was preapproved for $500,000, their new approval will be $400-450,000, so they will lose 10-20% of their preapproval amount,” he told CREW. “It won’t shut people out, it will just move them lower. If some were on the brink of getting approved, you’ll lose some there, but lower-priced properties will do very, very well.”

In Toronto, that will put single-family detached homes even further out of the reach than they are now, but the popularity of condos will keep soaring.

“In Toronto, with everybody’s sightline coming down, condos will be the most popular,” said D’Abruzzo. “In the GTA, like Mississauga or Vaughan, it will be condos and maybe townhouses.”

Single-family detached homes will become difficult, but not impossible, to afford. The Greater Toronto Area’s fringes still have moderately priced detached houses for sale, and even with the new mortgage rules, that won’t change.

“In Hamilton, Kitchener and St. Catharines, $400,000 gets you a detached home,” he said, “so you’ll see a continued trend of population spreading out into the horseshoe.”

According to D’Abruzzo, 2018 will not be kind to sellers—at least not through the first few months—but he recommends being patient.

“Right now, people are trying to get their places sold before the mortgage rules kick in,” he said. “Next year, inventory will be crap in January and February. If anyone is scared or fearful and waiting to sell their house, patience is the solution right now. Just wait and see, because nobody knows for sure what it will be like.”

Akshay Dev, a sales agent with REMAX Realty One, echoed that wait-and-see approach. While nobody will miss out because of too much time on the sidelines, Dev says Toronto’s chronic housing shortage will continue working in sellers’ favour next year.

“Whatever correction was needed is done, and in the spring we should see the market picking up and being strong,” he said. “In the Toronto area, there’s a huge shortage of housing, so it’s still going to be a seller’s market, but I don’t expect crazy bidding wars. Sellers will still get the prices they’re expecting.”

Contrary to popular belief, first-time buyers won’t have trouble purchasing starter homes, especially because cheaper abodes will be in high demand. However, they might live in those homes longer than the historical average.

“Historically, we’ve seen that when people graduate from their first buying experience, it takes anywhere from three to five years to move into the next level of housing, but it may become five to seven years with new rules,” said Dev.

Source: Canada Real Estate Magazine – by Neil Sharma 8 Dec 2017
Tagged , , , , , ,
home buyers, mortgage qualification, Uncategorized

Top dollar: How high can you go?

Affordability is a major concern for today’s aspiring first-time homebuyers. In hot real estate markets like the Greater Toronto and Greater Vancouver regions, however, the desire for affordability can be challenged by the competitive fervour caused by escalating prices and bidding wars. As anyone who has researched homeownership in these markets knows, it’s easy to feel the pressure to bid higher than you’d like.

Resist the urge. It’s important to go house hunting with a firm price range in mind. If something is outside of your budget, it’s not affordable – period. A successful home purchase isn’t about beating out 20 other offers; it’s about sealing the deal on a home you can afford, with money left over each month after your mortgage is paid, to cover your other expenses, savings and a little bit of fun, too.

It’s a tall order, but there is a formula to help you find that sweet spot.

FIND YOUR RIGHT PRICE

Lenders and mortgage insurers look at two debt service ratios when qualifying you for a mortgage (and mortgage insurance, which you will need if you make a down payment of less than 20 per cent the cost of the home).

  • Gross debt service (GDS)
    The carrying costs of your home, such as mortgage payments, taxes, heating, etc., relative to your income.
  • Total debt service (TDS)
    Home carrying costs (mortgage payments, taxes, heating, etc.) plus your debt payments (credit cards, student loans, car loans, etc.), again relative to your income.

The highest allowable GDS ratio is 39 per cent, and the highest allowable TDS ratio is 44 per cent.

Want a shortcut to determining affordability? Use Genworth.ca’s “What Can I Afford?” online mortgage calculator. Input your income, current monthly debt payments and other details for an instant result that shows how much mortgage you can comfortably afford. (Note: For the interest rate, be sure to input the Bank of Canada’s conventional five-year mortgage rate, as that is what lenders use when determining GDS and TDS.)

DOWN PAYMENT STRATEGIES

Once you know how much mortgage you can manage, limit your house hunt to homes that keep you in that price range. That way, you won’t panic or find yourself in financial trouble if interest rates go up in the future.

 

You can buy “more house” for the same total mortgage if you have a larger down payment. Saving aggressively is one way to do that. Pair that with other strategies, such as the following:

  • Borrowing money from your RRSP under the government’s Home Buyers’ Plan.
  • Asking family for help via gifts or loans. (Don’t be embarrassed: 23 per cent of respondents in the 2017 Genworth Canada First-Time Homeownership Study say they’d do it!)
  • Taking on a side gig or second job.
  • Gulp! Moving back home with your parents so you can save on rent.

LOCATION, LOCATION, LOCATION

The other way to end up with a smaller mortgage is to buy a less pricey house. Fixer-uppers help, but the most dramatic payoff may come from expanding your search to a wider radius.

Consider buying in a nearby city or suburb that you can commute to work from. Or blaze new ground by moving farther afield in search of a new home and new adventures – with the spare cash to enjoy them both!

Source: HomeOwnership.ca 

Tagged , , , , ,
condo developments, condo living, female home buyers, first time buyers, foreign buyers, home buyers, millennial buyers, Uncategorized

Is it cheaper to buy a house than a condo in the GTA? This expert thinks so

While many first-time buyers look to condos as a relatively affordable option, one Toronto housing market expert says that it is actually less expensive to buy a low-rise home in the GTA.

According to Realosophy Brokerage co-founder John Pasalis, when you control for the size difference between low-rise and condos in the GTA, condos are more expensive per-square-foot.

In the Maple neighbourhood of Vaughan a 1,385 square-foot rowhouse costs $685,000, while a condo of a similar size in the area would likely cost $684 per-square-foot, or $947,000. It’s just one example of a price difference that can be seen across markets in the GTA.

Pasalis believes that this discrepancy in prices can be chalked up, in part, to investor demand.

“The majority of new condominium construction is driven by investor demand — not demand from families,” he writes in a recent blog post. “Investors are willing to pay much more (on a per-square-foot basis) than end users are.”

Pasalis says that investors prefer smaller units, which typically have a better return on investment, which means that developers are creating units that are too small for families, at prices they cannot afford.

“When developers are pricing a unit, they’re thinking to themselves, why would I charge this much when I can get this much?” Pasalis tells BuzzBuzzNews. “And those prices don’t make sense for a two- to three-bedroom unit, which is likely why we’re not seeing as many of those units being built [in the GTA.]”

In order for a condo to be good-value-for-money for a young GTA family, Pasalis says that low-rise prices would have to increase at a much faster rate than they currently are.

“The rate of appreciation for low-rise homes in the 905 region isn’t going to be very high in 2018,” says Pasalis. “So I don’t see this trend changing in the next year or so.”

While Pasalis admits that for families with a budget of $400,000 or less, a condo may be the only option for homeownership, he says that those with one of $700,000 or more should consider their options.

“They can choose to buy a two-bedroom 1,000 square-foot condo in Maple for that price, or a three bedroom 1,385 square-foot row house with a finished basement and backyard. For most, it’s a pretty simple choice,” he says.

Source: BuzzBuzzHome.com –  

Tagged , , , , , ,
female home buyers, first time buyers, home buyers, millennial buyers, Private sales, Uncategorized

No listing? No problem

For Sale By Owner

Source: MoneySense.ca by  

 

 

No listing? No problem

Here’s what buyers need to know before signing on the dotted line in a private home sale

What if, while cruising around the neighbourhood on your bike, you spied a Private Sale sign on the lawn of your perfect home? What if, when you called the number, it turned out the sellers were in their 80s, had wildly overpriced their home and had been struggling to find a buyer for the past six years? Notice any red flags?

Buying a For Sale By Owner house

Stephanie Barker did, but the senior vice president at Arm Energy also recognized a big opportunity to own the house of her dreams—a four-bedroom, custom-built, one-owner with a large backyard and a converted attic office space. An Internet search, a generic sales contract and a lengthy phone call later, Barker and her boyfriend, Rob Maykut, became the proud new owners of a beautiful Canmore, Alta. family home, located just north of 8th Street. Were they mad?

For some, the idea of buying a For Sale By Owner (FSBO) home conjures up the image of a penny-pinching, emotionally charged seller flogging a defect-laden house. But if you’re in the market for a new home, choosing to avoid FSBOs may mean eliminating up to 25% of the homes currently listed for sale. Not a smart strategy. Instead, would-be FSBO buyers can learn a thing or two from Barker—and realize that, just like all real estate transactions, buyers of FSBOs simply need to do their own homework.

 

First: Know your market

Barker didn’t bat an eye when she heard how much the sellers wanted for their home. She already knew it was too high. “I’d watched the sales activity in the neighbourhood for at least six months. I knew what homes in that area were worth.” So Barker went in with an initial offer that was 50% less than what they were asking. “They didn’t even counter our offer,” recalls Barker. That didn’t stop her. “We had wiggle room, so I called the sellers.” For 45 minutes Barker discussed price, timing and conditions. “That conversation helped me appreciate where they were coming from and helped them appreciate where I was coming from,” she says. Once off the phone, Barker drafted a second and final offer. This time the sellers accepted. “I paid just a little over half of what the seller’s originally wanted and I’m sure we would never have reached a deal had we not been able to talk.”

Next: Get the right papers

Since the sellers were in their 80s, Barker took it upon herself to find a home sales contract online. “I didn’t want them to feel the added stress of trying to find a contract,” says Barker. She got lucky, says Jeff Kahane, a Calgary real estate lawyer. “At the end of the day a spit and a handshake is sufficient to close the deal, as long as nothing goes wrong,” Kahane says, But when things do go drastically wrong, it can be devastating. For instance, the bank can refuse to give you a mortgage if the home has a lien against it, if there’s a health advisory, the owners owe back taxes or the house is deemed overvalued by the appraiser. Quite often, even the seller is unaware of these potential pitfalls. “The sad fact is, it costs as little as $400 to get a sales contract from a lawyer, but you can pay $40,000 or more in fees to get out of a signed deal.”

Then: Do some digging

Getting an iron-clad contract is just the start. There are other pitfalls that can occur within a real estate transaction, explains Monika Furtado, a Calgary Re/Max real estate agent. For example, Ontario buyers can take legal possession of a property without a survey, but in Alberta a buyer must have a Real Property Report—a legal document that shows the location of visible improvements relative to property boundaries. “Neglect to ask for one and the buyer will have to pay $1,000 for the report to close the deal.”

Then there’s the measurements of a home. “Most sellers don’t realize that we have standards when recording home measurements,” says Furtado. “Like, the bottom level of a side-split shouldn’t be included in the total square footage because it’s below-grade living space.”

And what about a title search? While anyone can go to the land records office and pay for this document, not everyone understand what to look for and why it’s important. Furtado will often pull this document during the early stages of an offer. “I want to verify ownership, check setbacks and confirm there’s enough equity in the home to sell it,” explains Furtado. She’s known cases where sellers, caught with little or no equity, stay put in a sold house, refusing to vacate the home because they have no money to move.

Finally: Buy some advice

The big reason why a seller chooses FSBO is to save money on realtor commissions. “Nothing wrong with that,” says Furtado, “but because the house listing hasn’t been vetted by another realtor it often means a lot more work for me or the buyer.”

The key, says Kahane, is to get professional, knowledgeable advice. At the best of times sellers tend to inflate the value of their home, because of all they’ve put into it, while buyers struggle between emotion and logic. “You may go into Sears or Ikea 20 times before picking out a bed, but spend only 40 minutes before signing a contract to buy a home.” It’s one reason why Kahane is a strong advocate for representation—a real estate lawyer, a real estate agent and a home inspector. “These professionals have obligations and responsibilities to help and protect you.”

That’s exactly how Barker handled her last purchase: “I took my signed contract to my attorney. He looked it over and, once satisfied, we finalized the deal.” That’s how most transactions go, says Kahane.

But on those occasions when things don’t go so smoothly you have a choice: Pay a little bit of money for some good advice in advance, or pay a lot to fix a problem that could have been avoided in the first place.

For Sale By Owner

Tagged , , , ,
home affordability, home buyers, home equity loans, Uncategorized

15 home insurance myths to stop believing now

home insurance

Source: Moneyense.ca – by  

Find out what your home insurance does and doesn’t cover

Home insurance can be a tricky topic, and if you’re not reading the fine print, you could be relying on inaccurate myths to inform your coverage decisions. Luckily, InsurEye, a Canadian insurance education site has compiled a massive list of 111 insurance myths that are out there. Last month we looked at the top 10 auto insurance myths to debunk. This month we’ll look at the top 15 home insurance myths and get the facts.

1.MYTH: You must have home insurance.

FACT: Unlike auto insurance, home insurance has not been made mandatory by the government. If you own the property and have a mortgage on it, often, your bank or lender will require that you hold an active home insurance policy and name them on that policy. If you do not own the property but are renting it, your landlord may require that you have renter’s insurance.

2. MYTH: If I am away on vacation, my house is covered.

FACT: If you simply leave for vacation without taking precautions, you are not always covered. Thus, if you go away during the “usual heating season” then you usually need to either:
Shut off the home’s water supply and empty all pipes or take steps to ensure the home’s heating is maintained. If you don’t take one of these two precautions, then you may not be protected against water damage resulting from frozen pipes that burst. Check with your provider to determine what length of vacation requires you to take extra precautions, such as somebody visiting your place on a regular basis in your absence. Different policies may require different frequency of those visits, but in general it is every 3-7 days.

3. MYTH: If I have valuables, they are covered.

FACT: A standard home insurance policy covers your personal property and most valuables up to the selected limit of insurance. It’s important to note that sub-limits often apply to specialty property, like jewellery or furs. For these items, you have the option of adding coverage to your policy. Often, you will need to provide proof of value (e.g. an appraisal or a receipt).

4. MYTH: If I have a home insurance policy, I am protected against sewer backup.

FACT: Sewer backup damage occurs when the sanitary and storm sewer systems cannot handle high volumes of water, which causes water to back up into your home through toilets and drains. As is the case with freshwater flood protection, most providers offer some sort of OPTIONAL sewer backup protection, but it is not usually included on default standard insurance policies. Just a few providers include it in their standard home insurance policies.

5. MYTH: My insurance protects me against flooding.

FACT: It depends on the type of insurance policy you have. Typically, a home insurance policy protects you against sudden and accidental entry, or release of, water in your home (e.g. burst pipes).

A standard home insurance policy often would not protect you against “overland flooding” (when water flows over normally dry land and enters your home through doors and windows, such as due to a river overflowing its banks or snow melting).

Prior to 2015, flood insurance was not available in Canada at all. Instead, homeowners and renters had to rely on the disaster financial assistance programs offered by the government. Today, most home insurance providers offer some sort of freshwater flood OPTIONAL protection. A few providers, such as Square One Insurance, automatically include it in all eligible policies.

6. MYTH: My home insurance only covers the house.

FACT: Home insurance policies cover your house and its contents. They also cover any detached structures on the property, additional living expenses you may incur if the house is uninhabitable, and personal liability exposures you may face.

For condos, policies also cover unit owner improvements and some assessments made against you by the condo corporation. Make sure that you have a thorough understanding of what it covers. Our overview of condo insurance (including quoting) will explain the details of condo insurance coverage.

7. MYTH: Home insurance covers the market value of my house.

FACT: Home insurance does not cover market value, only the rebuilding or replacement value of your house. If your house burns down, the purpose of home insurance is to cover the costs required to re-build the house as it was before the loss. Rebuilding value is typically lower than market value because it does not include the value of the land. Back to the example of your house burning down, the land is still there so your insurance does not need to “replace” the land. An insurance policy can often include costs to clean up the debris, such as after a fire.

8. MYTH: Home insurance covers earthquakes.

FACT: Your home insurance covers earthquake damage only is you purchased an “earthquake rider” on your policy. These are mostly meaningful in British Columbia and Quebec. Some providers, like Square One Insurance, automatically include earthquake protection in their policy.

9. MYTH: Insurance is cheaper for older, less expensive homes.

FACT: Insurance is usually more expensive for older houses since there is a higher chance that something will go wrong, and it will cost more for the insurer to fix it. Also, many older house elements, such as plumbing, are more likely to fail than plumbing in new homes that use upgraded pipes and materials.

10. MYTH: Insurance covers damages caused by termites and other insects.

FACT: Usually not. Make sure that you know how your insurance policy treats this kind of damage.

11. MYTH: Condominium corporations provide insurance that covers my condo.

FACT: Condominium corporation insurance will cover the overall building structure, its exterior finishes, roof, windows and common areas like elevators and hallways. It does not cover the contents of your condo, its upgrades and 3rd party liability should you cause damage to other condo units (i.e. via flooding).

12. MYTH: If I am a tenant, my landlord’s insurance covers everything—it is his/her responsibility.

FACT: No. Landlord’s insurance does not cover your liability (i.e. if you flood your neighbours) and your contents (if something is stolen from your unit). A landlord may require you to have a tenant insurance policy.

13. MYTH: Damage from natural disasters or Acts of God are excluded by home insurance.

FACT: No, there is no such thing as an Act of God exclusion in home insurance policies. In fact, most policies cover damage from hailstorms, lightning, wildfires, etc. Optional coverage is available for certain types of natural disasters, like earthquakes. Other types of natural disasters, like seawater flooding or landslides, are excluded.

14. MYTH: If I get in a fight with someone and they sue me, my home insurance will defend me and cover any costs.

FACT: No, the personal liability protection included in your policy only covers accidental and unintentional injury of others or damage to the property of others. So, if you intentionally injure someone, you’re on your own.

15. MYTH: If my dog bites and injures someone, my home insurance will not protect me. I need a special insurance policy.

FACT: As long as you properly answered any questions relating to your pets in the application and investigation process, then your policy will cover costs associated with your dog biting and injuring a third party.

home insurance

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first time buyer benefits, first time buyers, home buyers, millennial buyers, mortgage qualification, Uncategorized, young buyers

Ten ways the new mortgage rules will shake up the lending market

THE CANADIAN PRESS

 

Source: The Globe and Mail – SPECIAL TO THE GLOBE AND MAIL

T-minus 76 days and counting until Canada’s banking regulator launches its controversial mortgage stress test. It’ll be squarely aimed at people with heavier debt loads and at least 20 per cent equity – and it will be a tide turner.

Given where Canada’s home prices and debt levels are at, this is easily the most potent mortgage rule change of all time. Here are 10 ways it’s going to shake up Canada’s mortgage market for years to come:

1. It’s like a two-point rate hike: Uninsured borrowers can qualify for a mortgage today at five-year fixed rates as low as 2.97 per cent. In a few months that hurdle will soar to almost 5 per cent. If you’re affected by this, you could need upward of 20 per cent more income to get the same old bank mortgage that you could get today.

2. Quantifying the impact: An OSFI spokesperson refused to say how many borrowers might be affected, calling that data “supervisory information” that is “confidential.” But at least one in six uninsured borrowers could feel the blow based on the Bank of Canada estimates of “riskier borrowers” and predictions from industry economists like Will Dunning. Scores of borrowers will be forced to defer buying, pay higher rates, find a co-borrower and/or put more money down to qualify for a mortgage.

3. Why OSFI did it: Forcing people to prove they can afford much higher rates will substantially increase the quality of borrowers at Canada’s banks. OSFI argues that this will insulate our banking system from economic shocks, and to the extent it’s correct – that’s good news.

4. A leap in non-prime borrowing costs: Many home buyers with above-average debt, relative to income, will resort to much higher-cost lenders who allow more flexible debt ratio limits. At the very least, more will choose longer amortizations (i.e., 30 years instead of 25 years) and take longer to pay down their mortgage. Non-prime lenders will also become pickier. Why? Because they’ll see a flood of formerly “bankable” borrowers getting declined by the Big Six. That could force hundreds of thousands of borrowers into the arms of lenders with the highest rates. If you have a higher debt load, weak credit and/or less provable income, get ready to pay the piper.

5. A safer market or riskier market? The shift to expensive non-prime lenders could boost mortgage carrying costs and overburden many higher-risk borrowers, exacerbating debt and default risk in the non-prime space. “We’re very aware of the potential migration risk [from banks to less regulated lenders],” Banking superintendent Jeremy Rudin told BNN on Tuesday. “It’s not something that would be a positive development.” If rates keep rising, non-prime default rates could spike over time. Albeit, keep in mind, we’re talking a single-digit percentage of borrowers here. The question people will ask is: Does growing debt risk in the non-prime mortgage market, combined with home price risk and a potential drop in employment and consumer spending truly lower banks’ risk?

6. Provincially regulated lenders win: Unless provincial regulators follow OSFI’s lead (if history is a guide, they won’t), it’ll be a bonanza for some credit unions. Many credit unions will still let you get a mortgage based on your actual (contract) rate, instead of the much higher stress-test rate. That means you’ll qualify for a bigger loan – if you want one. We could also see a few non-prime lenders charge lower rates to help people qualify for bigger mortgages, while tacking on a fee to mortgage for that privilege.

7. Trapped renewers: Lenders are thrilled about one thing: customer retention. As many as one in six people renewing their mortgage could be trapped at their existing bank because they can’t pass the stress test at another lender. And if a bank knows you can’t leave, you can bet your boots they’ll use that as leverage to serve up subpar renewal rates.

8. A short-term spurt: Expect a rush of buying in the near term from people who fear they won’t qualify after Jan. 1. The question is, how much of that short-term demand will be offset by people selling, as a result of the rule change’s perceived negative impact. In the medium term – other things equal – this is bearish for Canadian home prices. Period. That said, borrowers will likely adapt within two to five years. And prices will ultimately resume higher.

9. The stress test could change…someday: While few credible sources expect OSFI’s announcement to trigger a housing crash, the higher rates go, the more this will slow housing. Financial markets expect another rate hike by January, with potentially two to four – or more – to come. Mr. Rudin says OSFI may “revisit” the restrictiveness of the stress test if rates surge, but will the regulator act in time to prevent diving home values? That’s the trillion-dollar question. The good news is that rates generally rise with a strengthening economy, which is bullish for housing – for at least a little while.

10. Questions abound: Tuesday’s news will undoubtedly spark contentious debate over whether this was all necessary, given already slowing home prices, provincial rule tightening, rising rates and the fact that uninsured default rates are considerably lower than for people with less than 20 per cent equity.

OSFI says its responsibility is to keep banks safe and sound. Overly concerning itself with the side effects of its mortgage stress test is not its mandate, it claims. Well, in a few years we might be either congratulating OSFI, or asking if that mandate needs to change.

THE CANADIAN PRESS

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