Tag Archives: female buyers

Crucial inspections coverage

“Whether you’re thinking of buying or selling, a home transaction can be an extremely stressful process,” said Jackie Chetcuti, head of Home Protection Solutions at FCT. “Buyers often fear that they may have to incur significant expenses soon after acquiring a home, and sellers may be hesitant to get an inspection at the risk of significant repair costs prior to listing their property.

“These products seek to reduce this anxiety by assessing over 400 features around the house through an

independent home inspection, and provide warranty coverage on a property’s larger, stress-inducing blind spots that are often expensive to fix.”

FCT is offering one product for buyers and another for sellers that offer comprehensive third-party home inspections with warranties that are transferable, and that cover up to $20,000.

Home purchases are usually characterized as the most expensive purchases of people’s lives, and with good reason. However, that could become compounded by something a home inspector might miss.

 

“When you go in as a buyer, you get a home inspector, but there’s not such a paradigm shift with a product like that because people are doing home inspections on the buy side,” said Chetcuti. “You get a full home inspection with over 400 points of data on the home, and that comes with a 21-month warranty.”

Real estate sales representatives, in particular, can save themselves headaches will unhappy clients by informing them about their different options, particularly if they’re millennials, she added.

“For a real estate agent, it’s important that people let their clients know that this is an option available in the market. It also provides more transparency around what people are buying,” said Chetcuti. “There’s a demand for information with millennials. A lot of the time, for a realtor with millennial clients, they’ll show up already knowing more about the house before you even take them through it. It puts the information out there before someone gets attached to a home and then finds something out about it.”

Source: Canadian Real Estate Wealth – by Neil Sharma 04 Jul 2018

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Smart strategies for single women trying to buy a home

Shop during the right seasons, when prices traditionally are more negotiable and inventory is better.

The real estate website Estately recently conducted a study showing how the continued gender wage gap in America affects home affordability and ownership for women.

To answer this question Estately used 2016 U.S. Census data to compare men’s and women’s median salaries in the 50 most populated U.S. cities.

Based on those salaries (and assuming a monthly mortgage payment of 28% of the gross monthly income) the site used a mortgage calculator to determine the maximum home price each salary could afford.

Armed with all of this information and after a review of the homes currently for sale in major cities across the country, Estately identified what percentage of homes men versus women could afford by city.

The results in some urban centers were bleak. Seattle for instance, has the biggest wage-based housing gap. Men can afford nearly 150% more homes than women. Colorado Springs, Miami, San Diego and San Jose also topped the list with significant gaps. For instance, in Colorado Springs men can afford 122.5% more homes than women, while further down the list in San Diego, the difference is still a significant 68.5%.

With these results in mind, we asked real estate and personal finance experts to share their top tips for single women seeking to purchase a home.

Don’t let the down payment scare you away

Coming up with the funds to make a down payment on a home can often seem impossible, particularly when so many Americans have sizable student loan bills and more.

Andrina Valdes, division president at Cornerstone Home Lending, urges buyers not to let this part of the process discourage them.

“Over and over again, potential home buyers report saving for the down payment as the biggest hurdle to homeownership. When you’re relying on one income to save up for it, the problem can seem insurmountable,” says Valdes.

Read: As house prices rise, this is how much more you need to save for a down payment

The good news is there are all kinds of down payment assistance programs that can help individuals get into a home for less money down.

The Federal Housing Administration loan is popular among first-time and single-income home buyers thanks to its 3.5% down payment requirement. There are also programs offered by the Department of Veterans Affairs and USDA loans that may require no down payment at all, says Valdes.

Line up a guarantor or co-purchaser

The reality is that many single income households, whether they’re run by men or women, need assistance buying a home in today’s market.

Experienced agent Julie Gans of Triplemint suggests lining up a qualified guarantor, co-purchaser or someone who might be able to gift money for your home purchase.

“These three options help buyers with lower income, lack of reserve funds or the total overall funds to purchase properties,” said Gans. “Finding the right [property] that will allow these options are important and help women and single income families be successful in their purchases.”

Consider a fixer upper

A growing trend among home buyers with limited means has been buying older properties and rehabbing them, says Ralph DiBugnara, president of Home Qualified.

“There are a few mortgage products in the market right now that make that easier,” said DiBugnara. “Fannie Mae has a loan called Home Style and FHA has what’s called a 203k loan. They both allow you to not only finance the purchase price but also construction costs in the loan to help your home look new. This is one way women can buy less inexpensive homes and make them new, also giving them a much higher valued property at completion.”

Look at homes well below your means

Real-estate analyst Julie Gurner, of FitSmallBusiness.com, says it’s critical that single income households buy properties that are well below the amount they’ve been preapproved for.

“You see that gorgeous home at the top of your range? Pass on it, and you’ll be glad you did,” said Gurner. “Single women and single income families have to be especially mindful to buy a home below their means…It gives them an additional expense cushion every month. Things come up. Doctor visits, your car breaks down, or your furnace breaking can be a big financial hit if you don’t have the ability to absorb it. On months where nothing goes wrong, you have the ability to save.”

As a single income earner, it’s important to protect yourself financially and be able to provide the necessities that make life stable. Having a home below your means can give you both and a great place to live.

House hunt during the right season

When it comes to finding an affordable home, time of year can make a big difference.

That means shopping during the right seasons, when prices traditionally are more negotiable and inventory is better, says Valdes.

Also read: How to get certified as a woman-owned business

Recent data from Trulia shows that there’s a 7% spike in starter home inventory during the fall, making it an ideal time to find a good deal. On the flip side, starter home inventory drops by more than 20% during the summer, making the warmer months a less appealing market.

Minimize credit card debt

As you embark upon your housing search, it’s critical that you reduce existing debt. This helps on a variety of levels.

You might like: One big reason it’s so hard for first-time buyers to find the right starter home

For instance, not only does it make you a better mortgage applicant, it will also help once you’re in your new home dealing with a whole host of new expenses.

Gans, of Triplemint, suggests tackling credit card debt in particular.

“Pay off all credit cards prior to purchase to lower your income to debt ratio,” advises Gans. “This reduces your liability and makes you look more appealing to a seller.”

Source:  Credit.com –  MIA TAYLOR

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Millennials On The Move Are Creating Major Market Opportunities For Baby Boomers

Millennials are now the largest group of home buyers. They have a different wish list than their parents and face different challenges to obtaining the American dream.

Millennials are on the move and fast becoming the largest segment of home buyers, creating major market opportunities for baby boomers downsizing. According to realtor.com’s latest numbers, in November 2017, Millennials (born between 1982 and 2000) made up a 39.6% Share of Mortgage Originations.

Shutterstock: Millennials Like Old Town Alexandria, Virginia  Where They Can Walk To All

The median price for mortgage originations in November, 2017 was a median price of $238,000 and an average price of $270,000. That number soars when you look to major metro areas Millennials flock to. Take Boston where according to Zillow  the median home value was $561,600 as of November 30, 2017.

Director of Economic Research for realtor.com, Javier Vivas sees the Millennial market share growing. “Many millennials are buying a home for the first time, so there is inherent enthusiasm in how they approach the process. But for many young homebuyers there is also an increased sense of urgency. Life events and market conditions are accelerating their need to enter the market,” Vivas observes. “Millennials are a driving force in today’s housing market. They already dominate lower price home mortgages and are getting close to overtaking older generations for mid- and upper-tier mortgages. In 2018, we expect millennials (buyers aged 18-34) to gain market share – even in the face of challenges.” he adds.

Those challenges include Millennials taking on more debt. According to Vivas, record home price increases in most major cities (where Millennials like to live) is growing faster than income. “We see them being forced to take on more expensive mortgages with the same down payment,” Vivas explains.

Add in that pesky student loan debt and some Millennial couples are facing a harsh reality. Listen to Rick Ross, co-founder of College Financing Group, a national consulting firm specializing in financial aid and student loan repayment counseling . “We are now seeing the direct impact of student loan debt for those in their late 20’s as the major hurdle to buying a home,” says Ross . “Lenders see couples with a $100,000 of combined student debt when qualifying them for a mortgage.”

Koki Adasi, an associate broker at Long & Foster in the Millennial laden Woodley Park area of Northwest Washington DC works with many Millennials. “They want an urban lifestyle with good schools and walkability to restaurants, libraries and parks. Millennial wish lists include; open concept living spaces and home offices. Some in-demand areas include; Arlington Virginia, DC’s Chevy Chase, Old Town Alexandria, Virginia and Bethesda, Maryland.” On any weekend you’ll find these spots loaded with strollers, dogs and Millennial parents. “Because prices are steep, I see more buyers getting assistance with down payments either from their parents or from government and municipal programs,” notes Koki who also points to lenders recently loosening up on down payment requirements which should help Millennials.

Poolside View At CANVAS in Miami

Head south to Miami’s vibrant and developing, Arts & Entertainment District located just north of downtown Miami. Nir Shoshani and partner Ron Gottesmann of NR Investments (NRI) had the vision to transform what was urban blight into an urban village concept. “We wanted to create a different type of urban living and entertainment experience with the Arts & Entertainment District, dedicated to happiness and mindfulness,” Shoshani said.

NRI’s current condominium project, CANVAS ready in early 2018 with 37 floors and 513 units soars above the Arts and Entertainment District. It’s only two blocks from Miami’s free Metromover, a plus for Millennials. With 20 street artists creating murals throughout CANVAS’ public spaces and a state-of-the art fitness centers with training walls designed for couples, CANVAS which is Fannie Mae approved for up to 97% loan amount hits all the sweet spots for Millennial buyers. These include; indoor/outdoor yoga garden, 30,000 square feet of amenities and Children’s Playroom and Lab.

Danielle Coughlin, 32 and fiancé Angelo Lavorgna, 34 recently purchased a 1,544 square foot home in Palm Desert, California after renting a much smaller apartment. They couldn’t be happier with home ownership. “I had been saving and saving for a down payment. Then the right place at the right time at the right price just came along and we jumped on it,” says Coughlin. Competing against higher offers, Coughlin said their 20% down payment helped them land the property. A personal letter to the seller explaining how Coughlin and Lavorgna hoped to raise their family in that house, cinched the deal.

If you’re a baby boomer selling, there’s probably a Millennial buyer just right for your family home.

Source: Forbes.com ,  Dec 27, 2017  Opinions expressed by Forbes Contributors are their own.

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Make your deposits carefully as they are rarely refundable: Ask Joe

Providing a deposit on a home is both a gesture of good faith and a serious commitment, Joe Richer writes.

I’m very interested in buying a certain house, but the seller wants me to fork over a really big deposit. If I change my mind, can I get my deposit back?

The short answer to your question is that, in most cases, real estate transaction deposits are not refundable.

There’s no set amount for deposits, however. If the owner’s demand for a large deposit is a major sticking point, you could ask your real estate representative to try to negotiate a lower deposit amount with the seller.

A deposit is the money you put down to secure a property that you want to purchase. Providing a deposit is both a gesture of good faith and a serious commitment. Once the seller accepts your written offer, it becomes an Agreement of Purchase and Sale (APS), which is a legally binding contract.

Once the APS is signed and the deposit is provided to the seller’s rep, attempting to renege on the APS by saying, “Sorry, I’m no longer interested” is highly inadvisable. You will almost certainly lose your deposit. The seller also might sue you for damages for any difference between the amount of your offer and the amount they accept from another buyer, along with any additional legal fees and carrying costs. You don’t want to go down that road.

Deposits are sometimes returned to would-be buyers when conditions are placed on an offer and the conditions aren’t satisfied. For instance, if you make an offer on a house on the condition of financing, but your bank won’t approve it. Or your purchase depends upon the successful sale of your current home, but it doesn’t sell in time. Or you make your purchase conditional on a home inspection and the home inspector discovers a problem that stops you from moving forward.

If you can’t go through with the purchase because your conditions haven’t been met and you want your deposit back, you’ll have to sign a release form and get the seller’s signature, too. It’s a pretty straightforward procedure and sellers will usually go along with such requests. But if the seller suspects you didn’t act in good faith, they could refuse to hand over the money.

What happens next? Well, the deposit would stay in a trust account, usually with the seller’s brokerage, and the dispute between you and the seller would become a legal matter. If you and the seller are unable to arrive at a settlement, a judge could eventually release the funds through a court order. But I’ll warn you: that can take a long time.

It’s a myth that a seller can pocket a buyer’s deposit any time a deal falls through. Cases involving deposits of $25,000 or less can be decided in small claims court, which is relatively inexpensive and easy for ordinary Ontarians to use. Cases involving larger deposits, however, are decided in Ontario’s much more formal Superior Court of Justice. Court cases can quickly become expensive, so you should carefully consider all of your options before taking this route.

If you’re serious about buying this house, I strongly recommend working closely with both a lender — to get your financial ducks in a row — and a real estate salesperson before you commit yourself to a deal and hand over a deposit.

Source: By Sat., Jan. 27, 2018

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HOW TO BUY A TORONTO CONDO IN 2018: NEW RULES + TIPS

How to Buy a Toronto Condo in 2018

Whether you’re a first-time buyer or a seasoned investor, there are new rules in 2018 that you will want to understand if you plan to buy a condo in Toronto. In this blog post we are going to explain the new rules and give you some tips to navigate them.

The 2018 condo market at a glance:

How to Buy a Toronto Condo in 2018, average price for condos

What are the new rules and changes?

 

We spoke with James Harrison, President of Mortgages.ca, to give us a full understanding of what to expect this year.

The new rules are simple:

As of January 1st, 2018, the Bank of Canada’s “Universal Stress Test” is in effect.

The buyer must now qualify for their mortgage based on the 5yr posted rate (4.99% today) or their contracted rate plus 2.00%, whichever is greater.

 

What does it mean for buyers in 2018?

 

“In my opinion, this will negatively impact one’s buying power by approximately 15-20% on average,” says James Harrison.

This stress test is an expected addition to the federal government’s measures to limit over-leveraged buyers from entering the housing market. In February of 2016, the federal government raised the minimum down payment from 5% to 10% for properties between $500,000 to $1 million. As we discussed in a previous blog post about those down payment rules and changes, the aim was to “reduce taxpayer exposure and support long-term stability.”

In October of 2016, a first round of stress tests was introduced to target insured mortgages (borrowers with less than 20% down payment). These borrowers were required to qualify at the Bank of Canada’s posted rate, which was 4.64% at the time, in hopes of creating a buffer against over-leveraged home purchases.

The newest round of stress tests is also about creating a buffer zone, but it applies to uninsured mortgages (borrowers with 20% down payment). Effectively, everyone applying for a loan through a regulated lender will now be stress tested. In a previous post, we explained in plain words how your buying power may change under the new mortgage rules.

“This will have a huge impact on some buyers but not all,” says James Harrison. “I believe this will negatively affect first time buyers as they tend to have lower incomes and also carry some debt from school. With one’s buying power negatively affected by 15 to 20% you would think this will mean prices will come down. I would be surprised if prices came down more than 5% in 2018.”

“For the well qualified buyers (those with higher incomes and little to no debt) 2018 will most likely see less competition, which could mean more of a buyer’s market. We have not seen this in a very long time in the GTA.”

“If you purchased a property prior to January 1st, 2018, you can still qualify for a new mortgage based on the old mortgage rules (with some lenders). Some top Brokers may also have lenders that can still qualify clients under the old rules (or at least using the discounted 5 fixed rate of 3.29% for example) and a 25yr amortization. This can increase one’s buying power by about 10- 15%.”

“If a buyer bought a property (same for pre-construction) prior to October 2016 (they could also qualify for an insured mortgage based on the rules prior to the first stress test for insured buyers). This is a huge benefit for some buyers of pre-construction units.”

 

What to do if you’re not approved for a mortgage under the new rules?

 

“If a buyer no longer qualifies to purchase a property they want they may have to look for a strong co-borrower to sign on to the mortgage to help increase the income and bring the debt services ratios in line.  Unfortunately, this may mean a lot more potential buyers will now be looking for a rental property, which in itself is already very challenging in Toronto.”

Alternatively, there are mortgage lenders that operate outside The Office of the Superintendent of Financial Institutions (OSFI). The ‘stress-tests’ apply only to lenders that are regulated under OSFI, such as the Big Five banks, while some second-tier banks and credit unions fall outside the new rules. These lenders have often been painted as “shadow lenders,” but they do fill a gap in the home buying process.

For buyers who don’t approve under the new mortgage stress tests, these non-regulated lenders can be a viable option and many of them offer rates competitive with top tier banks. One thing to keep in mind, however, is that non-regulated lenders are still hoping to limit risk, which means they tend to prefer borrowers with strong credit history. If your credit is weak, you may face higher rates on your mortgage. As always, it’s best to do some research.

“It is more important than ever for each and every buyer (or anyone looking for a mortgage) to connect with a very experienced Mortgage Broker. Going to your local bank branch is simply not a smart option anymore and has not been for years, but the new stress test will show this even more. A good Mortgage Broker will be able to help explain this fully and find you more options.  Even if you are a well-qualified buyer you may not qualify with your bank but you may still qualify for excellent schedule A products with another lender.  Do not give up until you speak with a good broker.”

 

Why is the government implementing these new mortgage rules?

 

“The reality of these most recent mortgage rules is that the federal government has serious concerns with the level of personal debt loads in Canada. So, they are continuously coming out with ways to help make sure everyone can truly afford the mortgage they are taking on. I personally feel this was too much, and I would not be surprised if the government is forced to pull this back within the next two to three years.”

“I am optimistic that 2018 will still be a strong year in real estate, but realistically a lot of buyers may be out of the market completely. I expect that 2018 will most likely be the year of mom and dad providing the down payment and co-signing for the mortgage as well.”

“I strongly encourage each and every buyer to contact a well-qualified and experienced mortgage broker for all of their mortgage needs, whether it is a purchase, refinance, or renewal.”

Source: Data sourced via Condos.ca on Jan 4, 2018

 

 

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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
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first time buyers, millennial buyers, Uncategorized, young buyers, young families

The best way to help your child buy a home – The complications and benefits of gifting funds to your son/daughter to buy a condo

Q: I am in the process of helping my daughter buy a condo, here is what we have done so far:

We signed the mortgage with her as primary and me as co-signer,  I will be giving her the down payment and she is going to be living there and she will be the one paying the mortgage and all expenses.

My question is what would be the best way to do this transaction looking it at both a legal and tax perspective. From the tax perspective: How should I arrange/declare that I am gifting her the down payment on this condo? And when do we claim the tax breaks for her as a first time buyer? Would that be at time of paying the lawyer for land transfer etc.? Also, I would like to still be able to have some room on my credit as to buy another property so we were thinking if her owning 90% of the condo and me keeping just 10% would work for this purpose. According to the lawyer, we both have to have some percentage assigned because we are both on the mortgage.

From a legal perspective, we are thinking about joint tenancy as the best way to protect the asset if one of us passes away unexpectedly.

My intention is really just to help her “fly on her own,” but with all the legal and tax implications, we’d really like to do it in the best way possible.

—Claudia

A: Hi Claudia. First, let me congratulate you and your daughter! It’s wonderful that you are in a financial position to help her with the purchase of her first property.

It appears you’ve given the current and future implications of this decision a great deal of thought.

I can only assume that your lawyer has asked for a percentage split on the property because you are co-signing the mortgage and because you are opting to have both you and your daughter on title as owners’ of the property.

This legal structure helps limit the amount of taxes you owe, as you can specify that your share in the property is nominal, say 10%. Just keep in mind that each joint tenant can gift or sell their portion of the property. That means, your daughter has the legal right to sell her 90% stake in the condo even if you don’t want or agree to the sale. It also means that you are exposing yourself to creditors, should your daughter file for bankruptcy or become a defendant in a lawsuit. Finally, the 10% that you own will not be sheltered under the principal residence exemption as this property is not your primary residence.

But there is a silver lining. The Canada Revenue Agency does not tax gifted money. That means if you opt to gift your daughter the entire down payment to purchase the condo neither you nor your daughter are required to pay tax on that gifted money. If, however, lenders find out that this gift is, in fact, a loan, this can seriously impact whether or not your daughter can qualify for a mortgage as all debts (even loans to family members) are included in debt ratios used to qualify borrowers for mortgages.

Finally, your lawyer or legal representative handling this real estate transaction will take care of the paperwork when it comes to the first-time home buyers’ tax credits and rebate. That said, ask your lawyer to confirm that your daughter won’t be exempt from these credits because you are on title. According to the CRA, a buyer is disqualified from claiming these credits if they’ve already owned a home or they lived in a home owned by their spouse or common-law partner now or in the last five years. While it seems remote that your daughter would lose eligibility to these credits, it’s still better to check now than find out the hard way.

Source: MoneySense.ca – Romona King, November 13th 2017

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