How to pay off your mortgage faster

HOW TO PAY OFF YOUR MORTGAGE FASTER…©

A mortgage is often the largest debt that one undertakes and as a result, many homeowners look to pay it off as soon as they can. In addition to reducing overall debt, paying off your mortgage early enables you to purchase a second home or investment property. Try one of these strategies to reduce your mortgage principal.

Make bi-weekly mortgage payments Bi-weekly payments involve 26 half-payments each year instead of the standard 12 full payments. By making 13 full payments each year, you’ll pay down the principal sooner and reduce the amount of interest you’ll pay over the long run.

• Increase your mortgage payment You can also increase the amount you pay towards the principal of the payment each month. Most people have higher incomes a few years into their mortgage than they did when they first took it out. Keeping your payment on par with your increases in income will help reduce your mortgage amount significantly and may also reduce the amount of your monthly payment over time.

Make additional payments If bi-weekly payments or increasing your monthly mortgage payment are not feasible, try to make extra payments when you can. If you have extra money at the end of the year, put it toward your principal.

The majority of consumers who have a mortgage feel it’s important to pay it off as soon as possible, especially if nearing retirement.

If you’re considering paying off your mortgage early, consider the following:

· Do you have the cash available to pay down the debt? If you’ve accumulated six months in emergency reserves and have paid off other loans and credit cards, your mortgage should be the next debt you target.

· Will you have enough cash to save for retirement and other financial goals?

·How long do you plan to stay in the home? It may make more sense to keep your money liquid and not tied up in a home you might sell in a few years.

If you have mortgage questions and would like to know what your best options are, give me a call (613-407-4309) or send me an e-mail – joannebeaton@royallepage.ca – I am happy to put you in touch with the right people!

 

Our new homes finishing touch.

Contractor of the Month

As homeowners who recently moved to a new, unlandscaped, unfinished basement, un-eavestroughed home we have been making use of lots of the local contractors in and around the Almonte area.  Every year we take on another project, as time and money permit, and our most recent “home” project was to complete a patio and walk-way to our yard.

Rick Peplinski from Everlasting Landscaping is a local contractor with many years of experience in the landscaping business.  He has a small company – one employee and himself, and we found him to be professional and wonderful to deal with.  He did one part of our landscaping job last fall – and promised to have it finished in time for my client party – which he did!  The fall weather didn’t cooperate for him to finish, so he put us at the top of his list for this spring…  and again the weather made it difficult for him to get started…

He has just completed the walkway to our back yard and we are thrilled with his work.  If you are planning a landscaping project this year (or next) and are looking for a referral, I wouldn’t hesitate in recommending Rick!  Let him know you got his name for me!

Everlasting Landscaping 

Rick Peplinski
Phone: (613)858-8437
Phone: (613)222-8437
Email: rick.chris@bell.net
www.everlastinglandscaping.ca

Finding the right home inspector.

Ask the Home Inspector

Steve Ott is a Registered Home Inspector and a member of the Ontario Association of Home Inspectors (www.oahi.com) and a full-time Home Inspector by trade. Steve is the sole owner and operator of Ottawa Valley Home Inspections Ltd (www.ovhi.ca) which provides home & septic system inspection services throughout the valley and Ottawa area.

Did you know that unlike a plumber or electrician, the home inspection industry in Ontario is not regulated? So, what does this mean to the consumer? It means that anyone can go out with a flashlight and a business card and say that they’re a home inspector. Thus, to ensure that one is getting an HI that is a professional, they should check up on their credentials before hiring them. What one should check is that the HI is a member of the Ontario Association of Home Inspectors because the OAHI is the only professional association recognized by the provincial government. And the OAHI requires all members to keep up their education and to maintain their professional standings annually.

Ask questions such as how long have they been in business? Is it their sole occupation or do they do other work (quite common)? How long does a typical home inspection take? It should be around 3 hours. What kind of report will they receive? It should be electronic or written, not verbal. Ask questions and be comfortable with who you are hiring. In addition, any OAHI inspector can be looked up on www.oahi.com to see if they are a current member in good standing.

If you have any questions please feel free to email them to Steve Ott at steve@ovhi.ca.

I have personally used Steve on many of our investment property home inspections, and many of my clients have also used him, with great satisfaction.  He isn’t a “Mike Holmes Drama Queen” who tells you that the light bulb is burned so you are going to have to rewire the entire house (OK – a dramatic example, but those HGTV Home Inspection shows are also dramatic)!  He offers sound, practical advice, and is often able to offer suggestions of how to remedy a situation or who to turn to for advice.  If you decide to engage the services of Steve, let him know I sent you!

 

Why do you need a home inspection?

Why Do You Need a Home Inspection?

A home is the single largest investment most individuals will ever make. Oftentimes a Buyer will look for ways to save costs on their purchase; however, home inspections have proven to be a positive and educational experience for prospective home buyers. An impartial inspection by a professional will provide a large measure of protection from unpleasant surprises and allow you to make an informed decision about your purchase.

Having a professional home inspection may also reveal serious issues with a property you intend on purchasing. Is the homes electrical wiring up to code? Is there evidence of water leaks in the basement? Would you know what to look for? These are all issues that a professional home inspector will make you aware of during your home inspection. Miss them, and your family’s health and safety may be at risk, not to mention what it may cost to resolve the issues.

The purpose of an inspection is to determine the condition of a property at the time of purchase. Knowledge is power so why wouldn’t you want to know everything possible before making your final decision.

Typically a home inspection will take between 3 and 4 hours, occasionally longer, and includes an examination of all the major areas of a home such as roofing, structural, exterior and interior finishes, electrical, heating/air conditioning, insulation, and plumbing.

A professional home inspector does not provide appraisals, quotes for repairs, noncompliance with building code requirements, and does not provide guarantees or warranties.  Well water analysis and septic inspections are not part of a standard home inspection, but they are very important and your favourite Realtor will often help with these. Air Conditioners cannot be inspected except during the summer months. Pools and spas are not included as inspection items. Wood burning appliances such as fireplaces and wood stoves require a separate inspection by a WETT certified inspector (Wood Energy Technology Transfer), and if you choose the right Inspector, they can do this for you at the same time as the home inspection.

Knowing what to expect will help you make an informed decision about the value of the home as well as the costs of future upkeep.  Depending on how old your home is, or how long you have lived in it, you may even want to consider having a pre-home inspection done before you list your home!  It can help you determine things that need to be repaired and can prevent that “we need to ask for a price reduction based on the home inspection” call that all Sellers hate to receive.

Getting the best bang for your renovation buck.

HOUSE IT GOING…

Spring is the time of year when people turn their thoughts to new beginnings  – and often times a new beginning might include their home.  Just because you may have decided that a move is in your future, it doesn’t mean your home is ready!

I am often asked to look at homes and offer up suggestions of what a homeowner can do to improve the value of their home, or at the very least, get a better market value on the sale of their home.  There are lots of sources to get this information from including Homes and Garden Television (HGTV), the National Association of Realtors (NAR), and, of course, from your favourite Realtor!

Renovations can be expensive and it’s important to spend your money where you will see the best return on your home.  Consumers often get confused about all the advice available, and it makes me sad to see a client who has installed granite countertop in their row-house, for instance.  Granite countertop will not be appreciated in an entry- level, starter home.  Well, it may be appreciated, but the Buyer will not be willing to pay $5,000 more for this feature.
According to NAR these are the top home improvements that help you realize the most on your renovation dollars.

Please remember that these are a National Average and I would highly recommend that you consult with an expert in YOUR area before you undertake any of these renovations. Oftentimes you can get the best return on your investment with lower cost projects!  It’s also important to remember that curb appeal speaks volumes. You only get 1 chance to make a first impression – and if you can’t get anyone in your door to see the work you have done, your renovations and improvements won’t be worth anything!

Please don’t hesitate to call me for a free consultation. I would be happy to walk through your home and offer my experience on how you can get more value for your home.

What you need to know if you sold your home in 2016.

Did you sell your home last year?

Did you sell your home last year?

What you need to know if you SOLD your home last year… (or if you will ever sell your home in the future!)

There are two changes that were made to Ontario’s real estate policies in 2016 which will affect the market in 2017 – and this is the perfect time of year to remind you about those.

Beginning January 1st, 2017, first-time homebuyers are now eligible to receive a refund of up to $4000 from the land transfer tax rebate (twice the previous refund of $2000 for new homebuyers). The increase in this rebate was designed to encourage more young people to make their first big purchase by reducing their closing costs and help them save money for their down payment.

You can read more about the First-time Homebuyer’s Land Transfer Rebate on the Ministry of Revenue Bulletin.

http://www.fin.gov.on.ca/en/bulletins/ltt/1_2008.html

The second big change for 2017 comes from the Canada Revenue Agency, and affects something that many Canadians know little about: taxation on primary residences.

Most home sellers know that the gains of their sale are protected from taxation by the Primary Residence Exemption (PRE). Other properties, however, like vacation homes, or investment properties, are not primary residences, and therefore are not exempt. The CRA will soon make reporting every sale of a primary residence on your tax forms mandatory, whether you owe taxes on the property or not. A key thing to note is that foreign investors in Canadian real estate will now be forced to abide by Canadian tax rules, as will Canadians who often dodged paying tax on their primary residences in the past. (The sale of primary residences is NOT subject to tax; however, some individuals have attempt to have more than 1 primary residence at a time – a cottage? An investment property financed as if it is owner-occupied, etc.)

Starting with the 2016 tax year, (generally filed in April 2017), you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.  This change was designed to prevent foreign investors from “cheating the tax system”., as well as catching individuals who have made a practice of flipping houses.Untitled-6 copy

New Mortgage Rules on October 17th, 2016

New Mortgage Rules… again…

Anticipated changes to the mortgage rules were announced and released by the Ministry of Finance office.

Effective October 17th, 2016, borrowers who take out insured mortgages that are fixed-rate loans of five years or longer will be subject to a more stringent “stress test”. Currently borrowers who take a five year insured mortgage (less than 20 percent down payment) qualify for their mortgage based on the actual rate they receive. Under the new rule the mortgage amount that a borrower qualifies for will be based on the Bank of Canada’s posted 5 year rate which is currently 4.64%. The actual mortgage payment of course will still be based on the rate received from the lender.  This will result in most Canadians qualifying for a far less mortgage amount then they had anticipated.

Another change is that effective this tax year, any financial gain from selling your primary residence must be reported at tax time to Canada Revenue Agency. Any financial gain (capital gains) from the selling of your home will still be tax-free.  This change is intended to prevent foreign buyers who buy and sell homes from claiming a primary residence tax exemption for which they are not entitled.  The government claims that foreign investors are flipping homes in Canada and falsely claiming the primary residence exemption.

As new information is produced, I’ll include it in future ezines.  Don’t be afraid to discuss these changes with either your Accountant or Mortgage Broker.

New rules taking place on October 17th, 2016

New rules taking place on October 17th, 2016

The power of a home inspection.

The Power of Getting a Home Inspection Done WHEN You Put Your Home on the Market…

It continues to be a Buyer’s Market in and around the Almonte, Carleton Place and surrounding area.  Recent figures from the Ottawa Real Estate Board indicate that it is close to being a balanced market, but any of my Sellers with homes still on the market will agree that it feels more like a Buyer’s Market.

There is something to be said for having a pre-listing inspection done of your home, particularly if it is more than 10 years old. Every Seller believes that their home is a “castle”, and it is, it’s their castle… and as owner of your castle, it can be easy to overlook little quirks about your home that a Buyer may find objectionable.  One of my favourite home inspectors recently confessed that the hot and cold water taps were reversed in his shower at home, and after 6 years he has just never bothered to change them because they are used to it.  But would a Buyer be so willing to cope with that?

A pre-listing inspection allows you to discover problems that you aren’t even aware of with your home, and deal with them up front before they become a negotiating tool with your potential Buyer. When these deficiencies are already addressed, you have the potential to realize closer to your full asking price – because the home inspection reveals nothing wrong!

A pre-listing inspection eliminates stress during a purchase, for both the Buyer and the Seller, and takes away any surprises that may be uncovered during a home inspection. Sellers are often shocked when they learn something about their home during an inspection.  “What do you mean there is knob-and-tube wiring in the attic?  Uncle Bob didn’t find anything when he looked at that attic when we purchased!”  Stress and surprises become very emotional – with the Buyers wondering what else the Sellers are trying to hide from them, and Sellers feeling like they are being “nickel and dimed” to death when the Buyer wants to renegotiate because of these deficiencies.

Lastly, a pre-inspection can create trust. The Seller has invested $500 into exposing their home to the Buyer. They are showing they have nothing to hide, and disclosing that they have already taken care of any deficiencies (keep receipts for any of the work that you have done post inspection). The Buyer may be so impressed they may even decide there is no need for their own inspection.

This can be a great way to stand-out during the days of a Buyer’s Market…. and can help make the negotiations go more smoothly for all parties.INspection

Investment Properties.

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Investment Properties

While not everyone is interested in or thinking about owning investment properties, there is a real shortage of rental properties in some communities – like Almonte and Carleton Place, and this provides an opportunity! Any community should have about 40% of it’s housing available to the rental market, and that’s because 40% of the population are renters. Almonte has approximately 20% of it’s housing available for rent, and Carleton Place is slightly better with about 23-24%. So, now do you see the opportunity?

One of the challenges is that there are few duplex, triplex or multi-unit buildings available in these towns, and often the ones that do become available are past the point of no-return and would be better off bull-dozed.

An over-looked opportunity is in high-ranch, and side-split or back-split style homes, where the unit can be legally suited into a 3 bedroom up/2 bedroom down home, which can rent for $1200-$1,300 upper and $1,000-$1,100 below. It can be challenging to make a single-family home create cash flow for the Owner by renting out one unit, but throw an additional unit into the mix, (combined with a little extra cash for retro-fitting and likely a little elbow-grease) and a lovely single family home can easily be converted to a nicely cash-flowing duplex!

I am currently working with clients who have a conditional offer on their next project, just after celebrating the anniversary of their first project from last spring.  Want to be included on the list to watch for these types of investment opportunities?
Give me a call! 613-407-4309