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New mortgages up 63% among Canadians aged 73-93: TransUnion

NEWS: MONEY 123: WEIGHING THE COSTS AND BENEFITS OF REVERSE MORTGAGESX

https://globalnews.ca/video/embed/4359268/#autoplay&stickyiframe=video_4359268&mute

WATCH: Reverse mortgages have recently increased in popularity as nearly one-third of Canadians are approaching retirement with little or no savings.

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The volume of new mortgages across Canada has been slowing down in recent months, amid rising interest rates and tougher federal regulations, a new TransUnion report shows. But the country’s oldest homeowners are bucking that trend – big time.

Among Canadians aged 73 to 93, the so-called silent generation or pre-war generation, the number of mortgages issued between January and March of 2018 was up a whopping 63 per cent compared to the same period last year, TransUnion data shows. Baby boomers are also getting new mortgages, although the increase in loan originations among Canada’s 54- to 72-year-olds is a more modest 18 per cent.

 

That stands in stark contrast with what’s happening with the country’s first-time homebuyers and younger generations in general. Mortgage originations were down 19 per cent among millennials (ages 24-38) and 22 per cent among gen-Z (18-23).

 

Overall, the number of new mortgages issued between January and March was down 3.4 per cent compared to the same period last year. This follows at eight per cent drop in the last three months of 2017 compared to the last three months of 2016. (New mortgages include brand new loans, loans renewed at a different lender and refinancing.)

Older generations could be re-mortgaging or borrowing against their home equity in order to “support retirement or to financially support younger generation family members,” the TransUnion report reads.

Research shows that retirement expenses tend to skyrocket around age 80, due to health care and long-term care costs.

WATCH: Why women need to save more for retirement

But the pre-war generation is also joining forces with boomers to help the younger kin.

“We hear of parents and grandparents supporting their children and grandchildren, whether it’s student loans or buying a house,” Matt Fabian, director of financial services research and consulting for TransUnion Canada, told Global News.

 

That said, as large as the six-fold surge in new mortgages issued to Canada’s 70-to-90-year-olds may seem, the volume of mortgages in that age group remains very small, Fabian said. (The data does not include reverse mortgages, TransUnion said.)

Still, the numbers do suggest that the stricter mortgage rules introduced on Jan. 1 of this year are having a much bigger impact on newer generations.

“The stress-testing rules are about affordability,” Fabian said. Younger mortgage applicants may be either finding out that they don’t qualify or that they can’t get the amount and loan type they want, he added.

Older Canadians who have enjoyed remarkable home-equity gains in the last few years don’t have to worry about stricter standards on things like loan-to-value ratios, Fabian said.

The data also shows significant variations across cities. While new mortgages dropped by almost 18 per cent in Toronto, they remained virtually flat in Vancouver, with growth of less than one per cent in the first three months of 2018 compared to the previous year.

But new mortgage volumes rose in Ottawa (up 8.4 per cent) and Montreal (up 5.2 per cent), where relatively low real estate prices have been attracting an influx of buyers.

WATCH: How mortgage stress tests are affecting millennials

More credit cards and higher balances

Canadians may be having a harder time getting a mortgage, but they aren’t giving up their credit cards.

TransUnion reported a “surge” in the number of credit cards issued in the first three months of 2018, which was up 5.6 per cent year-over-year across all age groups.

“This represents a dramatic shift compared to an approximate 10 per cent decline year-over-year from [the first quarter of] 2016 to [the first quarter of] 2017,” the report said.

The average consumer now carries a balance of $4,200, the data shows. Collectively, Canadians now owe $99 billion through their credit cards.

READ MORE: Here’s what happens to $1K in credit card debt when you make only minimum payments

Total non-mortgage debt still rising, although at a slower rate

Overall, the average Canadian had almost $29,650 in debt excluding mortgages in the period between April and June, an increase of almost four per cent compared to the same three months in 2017, TransUnion said.

“This is the third consecutive quarter where the quarterly change is less than the change seen in the previous year,” the report noted.

In other words, Canadians continue to borrow more, but at least the pace at which they’re piling on debt has slowed.

Source: Global TV – 

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The solution to debt isn’t more credit

Here’s the litmus test for determining if you have too much debt: if your income was delayed, could you pay your monthly bills? “If you couldn’t meet those expenses, you’ve got too much debt,” says Doug Hoyes, licensed insolvency trustee for debt relief experts Hoyes, Michalos & Associates. “We often see our clients facing this situation. They might think the answer is to borrow to alleviate the immediate problem. But the solution to too much debt is not to get into more debt. You have to get off the hamster wheel.”

The cycle Hoyes is talking about goes something like this: Something happens to cause an initial shortfall. It might be that you get sick, injured, lose your job, split with your partner. You start to put too much on your credit cards and you can’t pay them off. “Then, you get an additional credit card and you continue to rack up more and more debt on your cards. The number of cards and balances keep going up.”

When you’re finding it difficult to make ends meet, more borrowing isn’t the answer.
When you’re finding it difficult to make ends meet, more borrowing isn’t the answer.  (CONTRIBUTED)

Now you have a problem, so you decide to solve it by consolidating your debt. You might try and apply for a line of credit, which you may not qualify for, or get a payday loan with monstrous interest rates. “Once you start getting payday loans, it’s very difficult to recover,” warns Hoyes. “In some instances, payday loans cost you $15 for every $100 you borrow. In order to pay it off, many of our clients have to get another payday loan.”

So how do you stop this cycle of debt? “Rather than continuing to add more to what you already owe, it’s important to stop borrowing and stop the bleeding,” says Hoyes. He suggests taking an inventory of what you owe and then making an honest budget to see if you can find a way to pay it back on your own. “You might also consider ways to add income rather than just deal with expenses. Perhaps you get a second job or a roommate to help with expenses.” In the likely situation where you discover you can’t do it on your own, consider talking with a Licensed Insolvency Trustee to help you find a way to pay off a few debts.

For most clients, the best way to deal with debt is a consumer proposal or bankruptcy, explains Hoyes. “In a consumer proposal, we make a deal to pay back considerably less than the amount owing. Instead of making minimum payments for decades or declaring bankruptcy — your last resort — with a consumer proposal, you pay an agreed amount that’s much less than what you owe over a five-year period. Then three years later, it comes off your credit report.”

As Hoyes explains, it’s not about consumers running from debt. “It allows them an opportunity to make manageable payments and ultimately, get a fresh start.”

 

Source: The Star – Thu., Aug. 16, 2018

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How to keep your income property from taking over your life

How to keep your income property from taking over your life

For Terri Ronci, renting out her in-demand Toronto condo meant having the financial freedom to seek out a career change.

After years in advertising she wanted to go back to school to pursue other interests and return to her hometown of Montreal.

“I had a really great conversation with my dad who (said), imagine if you could rent that place for more than you’d have to pay out, it might give you that cushion and (be) a retirement nest egg,” she said.

“If you sell it, that money is available now, but in the long term, think about the steady income that this investment will bring in, along with the fact the selling price will go up. It’s the best way to maximize the return on your investment.”

Ronci, 40, decided to rent – and the decision paid off. She was able to cover her mortgage and expenses with the rent she got off her condo, and have enough money leftover to pursue the lifestyle changes she was after.

In Ronci’s case, having a well-situated apartment and trustworthy property managers made renting her condo on the side a lucrative and stress-free process.

But while an income property can be rewarding, would-be landlords need to think about what they’re buying and the kind of return they’ll get for their efforts, said Milton, Ont-based realtor Andrew Roach.

“When I talk to my investment clients, we sit down and we say, what are you willing to invest … and we’re not talking just about money,” said Roach, 38, who owns multiple properties on his own or through side ventures.

“When buying a property people are investing more than just their hard-earned money. They’re also investing their time and energy.”

A property manager and the careful screening of your tenants will go a long way toward safeguarding your free time, but it’s often the finances that can trip people up the most.

““You have to make sure the income being produced, the cash flow, can support the debt, said Brenda Burjaw, director of commercial services at Meridian Credit Union Limited.

Whether you’re renting out one condo to supplement your income or a slate of properties, she adds, the money side is the same.

You have to do your due diligence up front to make sure the property will give you the return you want, you should be clear on your risk tolerance (since that will guide your strategy) and you need to carefully budget to make sure you can cover off the operating cost of running the unit – both in terms of capital needs for big expenses and to service the debt outstanding on your mortgage.

Operating costs are the part of the equation that you can have some level of control over by budgeting for repairs and maintenance, said Burjaw.

“You need to be mindful of always having some sort of a reserve set aside for when you have to re-lease the unit – paint it, replace an appliance, fix a window,” she said.

“Each year a prudent property owner should look and budget what the coming year operating costs are going to look like, and find efficiencies where possible.”

A condo is a good option for anyone who is low risk or doesn’t want to spend much time worrying about their side property because condo fees take care of a lot of the maintenance. If your tenant agrees, you can also automate payments and appointment bookings by signing up with a company like Get Digs, which lets renters pay with their credit cards and make sure landlords get the rent on time.

That will keep you from having to chase tenants for their rent, since legislation brought in in places like Ontario means you’re no longer allowed to ask tenants for post-dated cheques to cover their rent for the year ahead.

Property managers can help ease the burden, for a fee, and so can having a go-to list of people to call in an emergency to replace a window or fix a leaky toilet.

If you choose to outsource that work, you’ll need to factor property management fees into your budget and consider how that will impact your cash flow.

You should also be thinking about whether your tenant will pay the hydro bills and whether you can charge extra for amenities like parking.

When you’re estimating your costs and possible return, it’s also important to be conservative, said Pauline Lierman, director of market research with Urbanation Inc., a firm that tracks the rental condo and new purpose build market in Toronto.

“You have to look at what the balance sheet of the condo is, what the maintenance fees are,” she said.

“Be aware of what the type of unit you have in your building is renting (at), be aware of who else around you may be adding new units going forward.”

But while careful math and planning is needed to make sure a rental side hustle pays off, for landlords like Ronci, the result is worth it.

“If you’re wanting to make a change in your life, an investment like this can give you the break or pause you need to breathe.”

Source: Financial Pipeline – ROMINA MAURINO
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Benefits of Homeownership Reaffirmed in New Study

Despite deteriorating housing affordability across the country, buying a home is still the more affordable option when compared to renting.

A new report from Mortgage Professionals Canada has determined that, despite the rapid rise in home price, those who are able to invest in a home would end up “significantly better off” in the long term compared to renting.

The report, authored by the mortgage broker association’s chief economist Will Dunning, found that while upfront monthly costs are in fact cheaper in most locations, the “net” cost of ownership is less than the equivalent cost of renting in a majority of cases, and becomes even more cost effective over time.

“The costs of owning and renting continue to rise across Canada,” Dunning noted. “However, rents continue to rise over time whereas the largest cost of homeownership–the mortgage payment–typically maintains a fixed amount over a set period of time – usually for the first five years. The result is that the cost of renting will increase more rapidly than the cost of homeownership.”

Additionally, the costs of ownership include considerable amounts of repayment of the mortgage principal. “When this saving is considered, the ‘net’ or ‘effective’ cost of homeownership is correspondingly reduced,” Dunning added.

On average, the monthly cost of owning exceeds the cost of renting by $541 per month. But when principal repayment is considered, the net cost of owning falls to $449 less than renting.

Interest Rate Scenarios

The analysis compared the cost of renting vs. owning both five and 10 years into the future, with higher interest rates factored into the equation. In all cases, owning comes out ahead:

Scenario #1: If interest rates remain the same (using an average of 3.25%), after 10 years the average net cost of owning is $1,014 less than the monthly cost of renting.

Scenario #2: If interest rates rise to 4.25% after five years, the average net cost of owning falls to $1,295 less than the monthly cost of renting.

Scenario #3: If interest rates rise to 5.25% after five years, the average net cost of owning is still $726 less than the monthly cost of renting.

“By the time the mortgage is fully repaid in 25 years (or less) the cost of owning will be vastly lower than the cost of renting,” the report adds, noting that the cost of owning, on average, would be $1,549 per month vs. $4,655 for an equivalent dwelling.

Canada Still a Country of Homeowners

Despite rising home prices and deteriorating affordability, Canada remains a nation of aspiring homeowners.

The study pointed to the continued strong resale activity as one indicator of this.

Resale activity in 2017 was still the third-highest year on record, at 516,500 sales, just off the peak of 541,2220 sales in 2016.

But other polls have also found a strong desire among younger generations that still dream of owning.

RBC’s Homeownership Poll found a seven-percentage-point increase in the percentage of overall Canadians who planned to buy a home within the next two years (32%), and a full 50% of millennials.

Similarly, a RE/MAX poll found more than half of “Generation Z” (those aged 18-24) also hope to own a home within the next few years.

Perhaps the biggest question is whether those aspiring homeowners will have the means to surpass the barriers to homeownership, namely larger down payments and the government’s new stress test.

“While recent changes to mortgage qualifying have made the barrier to entry higher, those who can qualify will be much better off in the long term,” Paul Taylor, President and CEO of Mortgage Professionals Canada said in a statement. “Given the economic advantages of homeownership, Mortgage Professionals Canada would recommend the government consider ways to enable more middle-class Canadians to achieve homeownership.”

Despite its affordability benefit over renting, Dunning addresses some of the impediments of homeownership, namely the longer timeframe needed to save for the down payment. Despite higher home prices and larger down payments required, first-time buyers still made an average 20% down payment.

Additional Tidbits from the Report

Some additional data included in Dunning’s report include:

  • Average house price rose 6.2% per year from $154,563 in 1997 to $510,090 in 2017
  • Average weekly wage growth was up just 2.6% per year from 1997 to 2017
  • The average minimum interest rate for the stress test during the study period: 5.26%
  • The average annual rates of increase for the following housing costs:
    • Property taxes: 2.8%
    • Repairs: 1.9%
    • Home insurance: 5.4%
    • Utilities: 1.6%
    • Rents: 2.4%

Source: Canadian Mortgage Trends – STEVE HUEBL

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5 questions every first-time homebuyer should ask their mortgage advisor

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Photos: James Bombales

Between considering mortgage terms and insurance to viewing properties with your realtor, buying your first home is a busy and stressful time. And when you’re talking about the biggest financial commitment you’ll probably make in your life, it can be pretty intimidating too. While there are mortgage professionals available to provide advice on your home purchase and help find the best mortgage solution for your specific situation, you’ll still need to go into the meeting with your advisor prepared with questions. So even if you’re totally mystified by the mortgage process, these five questions will help set you on the right track.

1. How do I know if I’m ready to buy a home?

“Knowing if you’re ready to buy a home could mean a lot of things and ultimately depends on the person’s own situation,” Wan Li, Mortgage Specialist at TD Group Financial Services, tells Livabl. “Potential homebuyers need to consider how much they’ve saved up for a downpayment, whether they have stable, continuous income and if they anticipate any large purchases or major life events in the future.”

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2. What factors determine my eligibility for a mortgage loan?

Unless you’re rolling in cash, most homebuyers will need to apply for a loan from a bank or mortgage broker. However, whether or not you’ll be approved for a loan and the amount you’re eligible for depend on many factors.

“Even if you have a large down payment and have cash available, a bank will not lend you money without a job and stable income.” says Li. “It’s also better if you’ve worked for the same company for over half a year or at least have passed your probation period.”

Your credit rating is another important factor that can mean the difference between getting approved or denied for your loan. Credit scores range from 300 to 900 and are affected by late payments and debt level. The higher your score, the better chance of being considered for a mortgage.

“Ideally, you’ll want to have a credit score of at least 600 to be approved by a bank,” explains Li. “Any less and you’ll likely need to go to a private B-lender which aren’t as strict, but have higher interest rates and charge administration fees.”

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3. How much do I need for my down payment?

Depending on where you live and the total cost of the home, the minimum down payment you need can vary from 5 per cent to 20 per cent. However, if you have less than 20 per cent, you’re going to have to pay for mortgage insurance which protects your lender in the event that you can’t pay your loan.

“In Canada, those who put less than 20 per cent down will have to pay for the Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance,” says Li. “It’s typically calculated as a percentage of your mortgage and is added to your regular mortgage payments.”

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4. What does pre-approval mean and should I get pre-approved?

Before you head out and start viewing properties for sale, it’s highly recommended that you first get pre-approved. A mortgage pre-approval will help you determine your maximum budget for your new home and can also give you an edge on the competition should you find yourself in a bidding war. Plus, once you do find your perfect home, you’ll be able to move on it quickly since you know you’re already pre-approved on your finances.

“Getting pre-approved involves filling out a mortgage application and providing documents on your financial history to your bank or lender,” says Li. “The bank will then look at your current income and credit history to determine if you qualify for a mortgage loan. The assessment will usually include a specific term, interest rate and mortgage amount depending on your situation.”

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5. What’s the difference between the term and the amortization?

The mortgage term and amortization period are two common phrases in the homebuying process that often cause confusion for first-time homebuyers. The mortgage term refers to the period of time that you have locked in the agreed upon terms and conditions, including the interest rate and monthly or bi-weekly payments towards your mortgage. Five-year mortgage terms are the most common, however they can range from three to 10 years. By contrast, the amortization period is the total number of years that you choose to pay off your mortgage and can be up to 30 years depending on your down payment.

“If you put less than 20 per cent down, your maximum amortization period is 25 years, but if your down payment is more than 20 per cent, you can have an amortization period of up to 30 years,” says Li. “However, while a longer amortization may result in lower monthly payments, you’re also going to end up paying a lot more in interest.”

Source: Livab.com –  

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Seven Renovations That Could Backfire and Hurt Your Home’s Value

If you live in an area where homes are selling like hot cakes, you may be feeling exceptionally confident in the value of your property. And as a result, you may be considering a home upgrade you’ve been dreaming of for years. Perhaps you want to add a pool, or maybe you want to add more square footage to your home. Or maybe you’re just aching to do something because you’ve been watching way too much HGTV.

Before you dip into your savings account or apply for a home equity loan, experts say you should think long and hard about your financial investment and your choices. Just because a specific upgrade seems like a good idea right now doesn’t mean it will pay off later. Plus, there are some upgrades that many homeowners regret almost instantly, either because they wind up overspending or because were a bad idea in the first place.

Seven Home Improvements You May Live to Regret

Home remodelers, beware. Spending money to “upgrade” your home doesn’t always pay off, and it could even hurt your home’s value in the long run. Here are some upgrades the experts suggest you steer clear of:

#1: Garage conversion

A garage conversation can seem like a good idea if you need more living space and don’t mind parking in the driveway or street. However, this remodeling project comes with plenty of risk. Not only are garage conversations often done poorly and in a way that makes them look obvious — and awkward — but you can face problems if you remodel your garage without getting proper permits.

Vincent Nepolitan of Planet Home Lending points out another potential problem: When you go to sell, you may find a more limited pool of potential buyers. Not having a garage for buyers to park their vehicle can limit the number of people you get through the door, thus preventing you from getting the sales price you want for your home. This is especially true in areas where all the neighboring homes have garages, Nepolitan says, and in areas with hard winters or sizzling-hot summers.

#2: Converting a bedroom for another purpose

With more people working remotely than ever before, it may seem like a good idea to convert a spare bedroom into an office. This can be a good idea if you only make superficial upgrades like replacing a bed with a freestanding desk. But there could be financial consequences if you pour a lot of resources into the renovation or make structural changes — converting the closet into a built-in desk area, for example — so the room no longer qualifies as a bedroom afterward.

The reason for this? Homes with more bedrooms can fetch a higher sales price and tend to attract a larger pool of buyers, says Georgia-based real estate investor Shawn Breyer. A buyer with two children might insist on having three bedrooms, for example, and be unwilling to consider any two-bedroom homes. They might also be willing to pay a premium to secure a home with a fourth bedroom they could use as a guest room.

The bottom line: When it comes to a home’s value, the more bedrooms the better — so don’t think long and hard before getting rid of one.

#3: Adding a pool

It’s easy to think having a pool would make your life more fun and more relaxing. After all, what’s better than spending a lazy day floating in the water with a cold drink or a good book?

Unfortunately, the reality of pool ownership doesn’t always line up with expectations. Pools may be great for summer, but they’re often expensive to maintain over the long haul, says CEO of Patch Homes Sahil Gupta, and require a lot of work, from adding chemicals to cleaning and maintenance.

And, you may not find your pool quite as fun in a few years’ time. Gupta notes that pools tend to go unused during winters and once kids leave the house, and that they may eventually become a safety hazard for grandkids or pets. (In fact, a pool can increase your home insurance premiums.)

Finally, only a limited number of buyers will even want a pool in certain parts of the country, so you might wind up selling your home for less than you wanted or waiting longer for a buyer as a result.

#4: Kid-related upgrades

While pools are commonly added by families with kids, there are other kid-related upgrades homeowners may rush into without thinking them through, says Julie Gurner, senior real estate analyst at TheClose.com. “Some upgrades consumers tend to regret are, for example, linked to children and their temporary place in the home,” says Gurner.

A solid example would be adding a basketball court to your backyard because your child is really into the sport. “Sports courts require maintenance and take up a large portion of the backyard recreation space,” says Gurner. And not every buyer will want a basketball court in their yard when you go to sell.

Before you go through with a costly upgrade that may only be needed for a few years, consider whether there are less permanent and less costly options available.

#5: Trendy interiors

Gurner points out another mistake that’s often fueled by HGTV mania — following fads and planning your home upgrades around what’s currently “hip.” Gurner points to the recent shiplap craze as an example, noting that the wooden-board wall cover that’s trending now may be the “wood paneling of the future.”

Other ubiquitous home improvement trends that could leave you wincing at your choices later on include stainless steel appliances, open kitchen shelves, brass accents, and basically anything that’s shabby chic. When it comes to fashion and trends, whatever’s “in” now is always on its way out at some point.

#6: Textured walls and ceilings

Speaking of outdated trends: Textured walls are so 1980s, but some people who never got the memo still slap a layer of popcorn on before they paint, even if it’s just to match other rooms in the house. But Breyer says that adding texture to walls and ceilings is a mistake — partly because it can turn off potential buyers when you go to sell, but also because it’s expensive to remove if you change your mind.

Breyer says that, most of the time, it costs $1 to $2 per square foot of space to have textured walls refinished with a smooth surface. Plus, you’ll also face the cost of repainting your walls and/or ceilings after the removal is complete.

#7: Over-improvements

Real estate agent Justin Moundas says that over-improvements tend to leave homeowners regretting their choices. “It never pays to be the nicest or biggest house on the block,” he says. “Often people regret investing so much into the home that it can’t be justified in the resale value for the area.”

According to Remodeling Magazine’s 2018 Cost vs. Value Report, some remodeling projects that don’t offer a great bang for your buck include big-ticket investments like backyard patios (47.6% return), a master suite addition (48.3% return), a major kitchen remodel (53.5% return), and the addition of a bathroom (54.6% return).

Each of these projects may help you enjoy your home while you live there, but they may leave you wishing you had spent your money elsewhere if you move within a few years.

If you want a home that’s a lot nicer than the one you have now, Moundas says upgrading to a different home can be a better deal than remodeling. By finding a different home that already has the floorplan and upgrades you want, you can avoid the hassle and stress of remodeling along with runaway costs.

The Bottom Line

If you watch popular real estate shows on HGTV all the time, it’s easy to think that home remodeling projects always pay off. After all, the stars of shows like Flip vs. Flop and Fixer Upper almost always turn bargain basement homes into spectacular investments, mostly by choosing the right upgrades and getting them for the right price.

But real life is not like television. In the real world, home upgrades are usually only a good idea if you plan to stay in your home and pick finishes that would appeal to the masses if you needed to sell.

Before you spend your hard-earned dollars on a pricey remodeling project, ask yourself what your goals are. Do you want to enjoy your chosen upgrades for years to come? Or are you simply following trends and keeping up with the Joneses? Do you absolutely need to upgrade to make your home livable, or could you get by with the home you have?

Be honest with yourself, and you may find a home upgrade is the last thing you need.

Source:  The Simple Dollar –

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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So Now You Own a Home. Do You Know How to Maintain it?

Althea Sandiford took a seven-week home maintenance course to help her tackle projects around her Long Island home.© Heather Walsh for The New York Times Althea Sandiford took a seven-week home maintenance course to help her tackle projects around her Long Island home.Home maintenance classes can help you save money and be smarter about what needs to be done to keep your new home in shape.

After the heady early days of homeownership wear off, first-time buyers often quickly realize that they lack even the most basic skills needed to take care of their new home.

For New Yorkers accustomed to calling the super for every repair, using a drill to hang drapes or an Allen wrench to fix a leaky faucet can be nearly as daunting as the idea of performing brain surgery.

You can get all the inspiration you need from do-it-yourself shows and videos, but what if you don’t know how to properly hammer a nail and don’t even own the right tools?

This is where home repair classes can help, giving uninitiated homeowners hands-on training. Courses cover a range of skills, from basic home maintenance to more elaborate tasks like tiling a bathroom, installing locks and repairing or replacing drywall.

A skilled labor shortage that makes it increasingly difficult to find a reliable handyman is what drove Mary McCabe to take a series of home repair classes at the New York City College of Technology, at the City University of New York.

 

First, she was irked when a tiler took five days to tile her small kitchen floor; then an electrician disappeared after disconnecting the electricity in her two-family home in Bayside, Queens. That is when it dawned on Ms. McCabe: “I trust myself, and I am handy,” she said. “I can learn to do some of this on my own.”

Comfortable around tools, because her father had been a carpenter, Ms. McCabe has taken five classes this year and has used her newfound skills to re-grout her bathroom tiles and fix a lawn mower.

“Most people are intimidated with using tools, but taking a hands-on class really boosted my confidence,” she said. She estimated that she has saved about $3,000 so far, just by learning how to do simple home repairs herself.

Most of the home repair classes in the city are offered through housing-related nonprofit organizations and the continuing education divisions of community colleges, including Bronx Community College. The Home Depot also offers free classes in several Manhattan, New Jersey and Long Island locations.

Just as learning how to save for and finance a home is important to financial literacy, educating yourself on how to maintain your home will not only give you a sense of mastery, but can also help you save money on repairs. And you’ll have a better sense of when you need to call a professional.

a man standing in front of a building: John Rearick has taken classes to learn basic carpentry skills, as well as how to use a circular saw and repair Sheetrock.© Tony Cenicola/The New York Times John Rearick has taken classes to learn basic carpentry skills, as well as how to use a circular saw and repair Sheetrock.

The beginners’ repair classes at City Tech — which include Homeowner’s Basic Tool Kit and Everyday Electricity You Can Do Yourself — cost $70 for a one-time, three-hour night class at the school’s Downtown Brooklyn location. That is not a lot of money when you consider that it could save you hundreds of dollars a year, said Debra Salomon, a City Tech program director in the division of continuing education.

A July 2018 HomeAdvisor survey found that, on average, homeowners spent $6,649 on home improvement projects per household over the previous 12 months. Understanding the need for extra financial reserves to pay for repairs should be part of the educational process of becoming a homeowner, said Yoselin Genao-Estrella, the executive director of the nonprofit organization Neighborhood Housing Services of Queens CDC, Inc.

The Woodside-based community development corporation has classes on first-time home buying and financial literacy, offers foreclosure service and, for about 20 years, has offered an eight-week home maintenance course. The course costs $175 and is held on the second floor of a Sterling National Bank branch in Woodside.

“Knowing how to fix simple things in your home empowers you,” Ms. Genao-Estrella said, especially if you are a low- or moderate-income homeowner. “What’s the point of finally being able to own your home, but you go into debt because you’re always hiring someone to fix everything?”

Ms. Genao-Estrella has taken the course herself. When her home in the Canarsie section of Brooklyn was damaged by Hurricane Sandy almost six years ago, she hired a contractor to fix the structural damage and a plumber for other repairs, but the plumbing problems kept reoccurring.

“I’m not saying I need to become a plumber myself, but I felt I was getting the short end of the stick every time I was having a conversation, especially as a woman,” she said. Knowing how your house works is important, she added, because you can be more specific about repair requests when hiring someone.

And that doesn’t just apply to homeowners: Among the students who have taken the class have been a number of renters, she said: “I think some people have landlords that don’t fix things right away.”

Althea Sandiford, who owns a single-family home in Brentwood, Long Island, said she was able to patch up some holes in her basement and clear a clogged drain in her shower after taking a seven-week home maintenance program at the nonprofit Community Development Corporation of Long Island.

The class size was small — between three and six people, depending on the week — said Ms. Sandiford, an insurance auditor. Classes are held at the organization’s headquarters in Centereach, N.Y., and the fee depends on a family’s size and income, but is never more than $80. Ms. Sandiford’s instructors were licensed contractors who taught her how to repair and replace Sheetrock, how to lay tile and the basics of plumbing.

Before taking the class, she said, she felt like she was “throwing money out the window” on small repair jobs: “It’s just good to have the knowledge of how the small things in your house work. Now I want to do more.”

Tricia Gleaton, vice president of the organization’s homeownership center, said many of the students who sign up for the class have never picked up a hammer, and students include both singles and couples, some of whom have bought fixer-uppers nearby.

Cable channels like HGTV and DIY Network have turned home repair projects into entertainment, but the do-it-yourself industry is extensive in online platforms too. In addition to the content available on YouTube, websites like Hometalk and Terry Love Plumbing and Remodel DIY and Professional Forum and podcasts like Fix It Home Improvement and Fix It 101 have solid followings.

But there is no point in watching and listening to all that content if you don’t know how to use a simple power drill, said Stephanie Lombardi Werneken, director of new digital products at Trusted Media Brands, publisher of the magazine Family Handyman.

Trusted Media started the online Family Handyman DIY University in 2015, so people could take quick classes to learn things like how to buy and use a table saw, or how to drill into materials like wood or masonry. Each class can be completed in one to three hours, and the fee is less than $20. “These basic classes are there so you can be safe, and not burn down the house,” she said.

Premium courses are being offered for the first time this year, for $89 to about $200. They last a few weeks, and students can ask their instructors specific questions online. The courses include kitchen cabinetry making and building your own tiny house, and some courses come with blueprints and other materials.

About 70 percent of the nearly 4,000 students who have taken DIY University’s online classes have been male, and students range in age from 35 to 70, Ms. Werneken said. Some of the older students have taken the class to fix up their homes before selling them, she said, but the younger students seem to have embraced a “DIY holistic-homeownership lifestyle” to mirror that of the popular hosts of some DIY television shows.

Raya Fliker, a homeowner in Port Monmouth, N.J., took a class on wood-finishing at DIY University, and also learned how to tile a kitchen backsplash. With her newfound knowledge, Ms. Fliker built a simple bench to fit into a small nook in her back entryway. She also built a plywood countertop to cover up a granite top on a kitchen island that she didn’t like.

Ms. Fliker, a nurse and mother of three, preferred taking classes online, she said, because she could do it whenever she had time, and the instructors taught her specific tasks that she wanted to learn. “I have loved how every project has turned out, and my husband is now buying tools for me,” said Ms. Flicker, who recently refurbished a mudroom for a friend’s house.

Not every project has gone smoothly, of course. Although she wanted to install a new kitchen backsplash, the granite border on her kitchen counter was extremely difficult to remove, she said. When she pried off a small portion near the refrigerator, Ms. Fliker ended up with a big hole.

“It was too hard for me to handle, so I fixed the hole and painted over it,” she said, after watching a YouTube tutorial. Then she abandoned the backsplash project.

John Rearick, a high school English teacher, took two home repair classes through Neighborhood Housing Services of Brooklyn, a community development corporation with locations in East Flatbush and Canarsie. Mr. Rearick said he took his first class almost 10 years ago after hearing about it from a friend.

He learned basic carpentry skills, as well as how to use a circular saw, repair Sheetrock and build mock flooring. His instructor, Mark Whittingham, a licensed general contractor, owner of M.W. Enterprise and project manager at Thor Helical USA, a masonry restoration firm, taught him how to build things and then take them apart.

“Understanding the mechanics of things helped a lot,” said Mr. Rearick, who lives in a single-family house in Kensington, Brooklyn.

He has since patched up a large hole in his third-floor hallway, damage that happened years ago, after his son and a friend had an impromptu basketball game there. More recently, he replaced a leaking water valve in the basement, which cost him about five dollars. “I did wonder, if I hadn’t fixed that myself, would I have paid someone to do it for me for $200?” he said.

Mr. Rearick repeated the same class this spring — a seven-week course currently held at the Flatbush YMCA, for $175 — as a refresher. “Besides saving money, there are emotional benefits of being able to fix things yourself,” he said.

Both he and Ms. McCabe, in Queens, said they were eager to take more advanced classes. Ms. McCabe said she was interested in hanging a new chandelier in her dining room, installing other light fixtures and changing out some old doors.

Making mistakes in the classroom was key, she said. Her instructor, Peter Grech, who has worked as a superintendent for residential buildings in the city for more than 40 years, reminded her that screwing up the installation of one 20-cent tile “is no big whoop.”

As she put it, “He taught us in a way that made me believe I can do it, and it worked.”

Mr. Grech, who also trains superintendents, makes a point of teaching his students when they should call a licensed professional. One example: You can fix leaky faucets and clogged drains yourself, he said, but you shouldn’t try to move pipes.

“There’s a fine line of being confident and doing things yourself, but you shouldn’t get in over your head,” he said. “And if you’re afraid of doing your first project in your own home, I tell all my students to do it at your in-laws’ house first.”

A list of tools every homeowner should have for basic maintenance.

To be prepared for basic repair tasks, homeowners should arm themselves with a few essential tools. Peter Grech, an instructor at New York City College of Technology, City University of New York, who has worked as a superintendent for various residential buildings, suggested investing in the following:

  • Hammer
  • Phillips and straight-blade screwdrivers
  • Utility knife
  • Speed or combination square
  • Channellock pliers
  • Electrical pliers
  • Electrical tester
  • Circular saw or handsaw
  • Battery drill, at least 18 Volts
  • Set of high-speed drill bits
  • Set of masonry bits
  • Level tool
  • Flashlight
  • Measuring tape
  • Safety goggles

Source: NY Times – By KAYA LATERMAN

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