Building your dream home can sound really exciting, but have you thought about everything that goes into building a new home?

Here are 7 Questions you should ask yourself before making any concrete plans.

1. What are my expectations with this new home?

Are you looking for a custom home build where you are responsible for every single decision made or do you want to choose an existing floor plan and build a house that is almost entirely predetermined for you? Or maybe you are looking for a mix of both? Regardless…

EVERY HOME BUILDER HAS A UNIQUE APPROACH TO BUILDING. MAKE SURE YOUR LEVEL OF INVOLVEMENT IS CRYSTAL CLEAR FROM THE START!

2. How familiar am I with the local builders and the homes they build?

Although there are standards for how your home will be built (code), there are no standards for pricing. Each builder will quote prices using different specifications for the different homes they build. If one builder is coming in with an estimated build price that is considerably less than another builder, you should dig deeper into the quality of materials being used.

Is the flooring hardwood and tile or carpet and lino? Am I getting the basic white appliance package or stainless steel (or are appliances even included?).

Knowing your local builders and the homes they build will let you compare apples to apples and ensure you get the best home!

3. Do I have any specific needs or features I want included?

If you are looking to add a feature to your home to meet a specific need, make sure your builder has previous experience building in this area. Practical features like wheel chair accessibility or a separate basement suite should be considered as well as lifestyle features like a backyard pool or a below the kitchen wine cellar.

Always consider experience when choosing a builder and don’t be afraid to ask for references!

4. Is possession date important to me?

Building a home is a long process – there are so many moving parts that delays are almost inevitable. If you have a specific timeline with a very narrow window for possession, building might not be your best option.

IF YOU DON’T HAVE FLEXIBILITY AROUND WHEN YOU TAKE POSSESSION OF YOUR NEW HOME, BUILDING MIGHT NOT BE YOUR BEST OPTION.

5. Can I afford this home if interest rates go up before I take possession?

Given that the building of a home has no guaranteed end date, it is important to take a comprehensive look at your personal finances and discuss your financing options with a mortgage professional. That is where I come in!

Because most lenders will only hold an interest rate for 120 days, it’s a good idea to make sure that you have allowed some room in your debt service ratios for a potential rate increase before possession date.

6. How well do I handle stressful situations?

Building a home can be a very stressful experience, there is no doubt about it. How well you handle stress should determine what type of house you build. Go back to point one and determine your expectations with an honest evaluation of not only what you want, but what you are capable of handling!

7. Is it better for me to build a home or buy an existing home?

Sometimes people fall in love with the idea of building a home more than they actually enjoy building the home! There is a chance your dream home is out there, already built, priced comparably, ready to buy without going through 2 years of waiting, decision making and delays!

MAKE SURE YOU ARE LOOKING AT ALL YOUR OPTIONS AND NOT JUST FIXATING ON BUILDING FOR THE SAKE OF BUILDING!

If you are considering building a home, please let me know… I would love to discuss some of the financing options available to you through Dominion Lending Centres!

Courtesy of Michael Hallett – Accredited Mortgage Professional – DLC Producers West Financial

Around the end of May 2014, the market started to experience a declining trend in mortgage rates. Though the housing market was already superb, professionals in the industry began gearing up for an influx in home buying. Their predictions were correct and we’ve seen more and more houses of higher value being sold since that time.

When an area with a hot market such as Vancouver, Calgary and Toronto experiences a mortgage rate decline, many renters make the hasty decision to purchase a dwelling before the rates jump up again. Though you could get a great deal, you need to ask yourself if you’re truly ready for everything that home ownership entails.

Here are 6 key ways to decide if it’s the right time for you to buy.

1. You’re Ready to Commit

When looking to buy a home you need to consider your future. Do you see yourself living in the home for at least three to five years? This is the minimum ownership time you need to consider as it takes three to five years to regain your buying and selling costs. If you were to sell before you’ve recovered those costs then you may lose money and could be liable to pay capital gains taxes. Unless you’re sure that you can commit to a place for a few years then it’s better to continue renting until you’re more settled.

2. Budgeting is Second-Nature

Mortgage payments are bound to be your biggest monthly expense, but they aren’t the only payment you’ll be liable for when purchasing a home. You also need to factor in the insurance, property tax, and condominium fees if you live in a shared building. All of these expenses add up and you need to have solid budgeting skills to keep your finances in order so you know what you can afford. Always go into home buying with a budget so you don’t end up looking at homes out of your price-range.

3. Your Finances are in Order

Home ownership comes with an extremely high price tag and you need to be 100% sure you can afford it. Before buying a home, make sure you have a reliable job and income. Your expenses will come due every month no matter what changes your situation may experience. If you can’t pay them, you could end up losing your investment and going into debt. Besides the income security, you also need to make sure you have little to no debt and good credit. These two aspects are the things a mortgage professional will look at first to make sure you’re financially stable and won’t have problems making payments.

4. You Have Savings

Homes don’t just have mortgages, they have down payments and hidden costs. You need to have a sizeable savings account to ensure you’re prepared for the initial and unexpected costs your investment will most certainly bring. Having a large down payment helps get you a lower interest rate, therefore, saving you money in the end. A large down payment typically means 20% of the home’s value. You also need to have an emergency savings fund for those unexpected costs, such as repairs, or in case you don’t have an income for a period of time if you get laid off.

5. Everything has been Researched

Do you know what the past and current mortgage rate trends are? Have you looked into what they’re predicted to do in the future? Do you know what kind of home you want and what they’re currently selling for? These are all things you need to know before buying your first home, plus much more. Make sure to do your research to ensure your investment is a sound one.

6. You’re Prepared to be a Landlord

Are you ready to take on the responsibility of a landlord? No longer will you be able to call up your manager to come unclog the toilet or fix appliances that have broken. All those tasks will fall on you and could be rather time consuming. You also need to be prepared if you plan on renting out the home to tenants in the future. This will involve collecting money and being on-call if the renters need anything.

If you’ve said yes to everything on this list then you could begin seeing mortgage and real estate professionals to begin the home buying process! If however, you weren’t confident in one or more areas on this list then you need to take some time to resolve any barrier that may be in your way. You could also make appointments with real estate agents and Dominion Lending Centres mortgage professionals to discuss what your options are and what you can do to prepare for home ownership. It’s always best to take a little extra time to make sure that your investment is something you actually want, at the right time, and for a price you can afford. Happy house hunting!

Courtesy of Pam Pikkert – Mortgage Professional – DLC Regional Mortgage Group 

I have many friends that shop online and go to dozens of different sites in order to save a few bucks on books, TVs, appliances, etc. Is this a good idea? It definitely is if the savings are worth it and you don’t mind taking the time out of your busy day to do all the research.

What about buying a home and getting a mortgage? This is one clear-cut example of why you absolutely need to spend time and do your homework when getting a mortgage. Yes, getting an excellent rate is one part of it, but there are costs that can surface down the road without you even thinking of it now, which can cost you a lot more than you think (I’m talking about mortgage penalties).

Lucky for the consumer, your Dominion Lending Centres Mortgage Broker does this work for you. Your Mortgage Broker has access to dozens of financial institutions, corresponding to hundreds of mortgage products… this means that you really do have a one-stop-shop for shopping around. Your Mortgage Broker is an expert at mortgages and will give you the best deal around for your specific situation.

On the other hand, many clients do choose to consult their bank first; that’s ok! However, if you do go to your bank, it’s best to be armed with the right questions:

• Ask the bank representative how many mortgage clients they’ve had and how long they’ve been in the banking industry.
• Ask if he/she plans on being in that same position for a while or if they’re working on a promotion (or even leaving the industry). This is important so that you know if the person will still be there once you find your place and if they’ll be around in the future if you have any questions. I used to work at a bank and that was the number one complaint from clients (that bank representatives are always moving around). It’s not their fault. They just want to get promoted and keep moving up the ranks.
• Ask how their bank registers the mortgage (collateral vs standard charge) and what the differences are between the charges.
• Most of us want to pay down our mortgages faster, so ask about pre-payment privileges and how it works.
• Ask about the different types of mortgage terms and rates.
• Most importantly, ask how prepayment penalties are calculated and ask for an example. This is important as down the road you may have to get out of your mortgage before the maturity date.

After you visit your bank, go and contact your local Dominion Lending Centres Mortgage Broker and ask them the same questions.

In just  two or so hours – an hour at your bank and an hour with your Dominion Lending Centres Mortgage Broker – you would have covered 230+ lending institutions. To be clear, you would have covered one lending institution with your bank and 230+ with Dominion Lending Centres!

In my opinion, spending the two hours can potentially save you many headaches and thousands of dollars down the road.

Courtesy of Joe Cutura – Mortgage Professional – DLC Canadian Origin

Looking to purchase a Condo in a Strata?

During my time as a Mortgage Broker,  I have helped Buyers side step a few pitfalls.

Most of these are really easy to avoid and come down to simply doing your own due diligence prior to and during the shopping process.

#1 – Work With Your Own Realtor!

The first and most common issue that I have seen is only working with the Listing Realtor or the Realtor in the Sales office.  There should be no surprise here that the selling Realtor/Agent is working on the Seller’s behalf and even if they agree to work with you too, their end goal is to sell the unit.

There is nothing wrong in looking around and initiating conversation with a Realtor in the Sales office, as they should be quite knowledgeable about the current build status and features within the units.  It is still advisable to enlist the help of your own Realtor from day 1; A Buyer’s Agent!  It will cost you nothing yet you gain the benefit of a Realtor working in your corner and covering your best interests.

When clients work only with the Sales Agent, there are far fewer Subjects or safety clauses in the contract that cover the buyer and allow them a few ways out of the contract.  Far more important details will be pointed out by your own realtor than getting the fireplace put in or a free microwave.  Perhaps you have a large SUV and the parking stall appointed at the vendor’s discretion has a large ventilation unit or obstruction leaving it useless to you.  Use your own Realtor!

#2 – Ensure Strata Documents are Readily Available

On several occasions this year clients have put in a rush offer with a short, four business day Subject Removal yet the Listing Realtor had not pre ordered the Strata Documents, Engineers Reports and/or Depreciation Reports.  These documents, along with meeting minutes and insurance papers, should be on hand and ready for review immediately on acceptance of your offer.

An expedited sale contract requires a quick mortgage broker and lender review that is difficult without these papers and reports.  A rush order for Strata docs can jump from a standard fee to over $150.00 if required this quickly.  Before putting in an offer to purchase, your Realtor should ensure that the Property Documents are readily available for you immediately on acceptance of your offer.

#3 – Purchasers Need Time To Review Strata Documents

Most importantly, YOU are the intended purchaser of this property.  You should have ample time to review these documents while you are also working on booking your home inspection, re-negotiating your offer to purchase and ensuring that you have your financing in place.   There is much to do in a short time.

This rush scenario with little time to review docs has seen people go into a binding contract only to realize that they have major repairs scheduled or that the Strata is ill funded.

#4 – Self Managed or Poorly Managed Strata

Better to find out early on and possibly before spending hundreds on a home inspection that the Strata Corp has failed to order a Depreciation Report, or that the contingency funds are not there to support the ongoing maintenance that your home will need.  Lack of proper funds saved now equal special assessments and possibly large financial burdens in your future.

Lenders are looking more carefully at Self-Managed Strata’s and are scrutinizing Depreciation Reports if they are available.  They want to make sure whether the Strata is self-managed or not, that the property is sound and that it is run with a good financial picture.  You should too.

With a good Realtor and Dominion Lending Centres in your corner, you should have all of your documents ready up front and ensure that all personal and property information is readily available prior to setting a subject removal date.   A quick file can be a breeze and you will be far less stressed when all is in hand ready to go!

Courtesy of Kris Grasty – Mortgage Broker – DLC Canadian Mortgage Experts