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    Like Our Recent Blog Topics? Here Are More Great Resources for You to Check Out

    Last updated 7 years ago

    Would you like to learn more about the topics covered in our recent blog posts? Whether you’re embarking on your first home buy or interested in refinancing your loan, you might find these resources both informative and helpful.  

    • This useful mortgage calculator from the Canadian Mortgage and Housing Association can help you find the perfect mortgage payments within your budget.
    • Do you know what “due on clause” means? How about “reverse annuity mortgage”?  To learn some helpful terminology, check out this extensive glossary from Mortgage101.com
    • At eHow.com, read a brief guide to refinancing your mortgage.  This article also includes specific information about benefits and considerations you should consider.
    • On Investopedia, browse through an in-depth introduction to financing basics.  From fixed to adjustable rate loans, this website weighs the pros and cons of different types of loans you’ll want to know as a savvy homebuyer.
    • For helpful tips on shopping for a second mortgage, check out MortgageLoan.com.

    To get in touch with an expert, call Nelson Sousa at (877) 817-9984.

    Using your RRSP for a down payment

    Last updated 7 years ago

    If you're a first-time buyer with a home purchase in your near future, you might want to consider taking advantage of the Federal government's Home Buyers' Plan (HBP).

    In a nutshell, the HBP allows each buyer (provided they're both first-timers) to use up to $25,000 of their RRSPs as a down payment towards a home that is going to be their primary residence. This is a great opportunity for first-time buyers to accumulate a larger down payment than they would have been able to otherwise. That's because any money you put into an RRSP is tax-deductible. If you sock money away in it - and then sock away your respective tax return - the amount will quickly add up. It's also forcing you to save for retirement - something you may not be thinking about right now.

    As for the details, the program is pretty straight-forward. Here's how it works:

    -    You're not required to pay taxes on the $25,000, as long as you pay the balance back within 15 years. You're required to start making payments in the second year after you purchase the home. Minimum annual payments are 1/15 of the total amount borrowed.

    -    If you're buying a home as a couple, and one person has already owned a home, then only one half of the couple is considered a "first-time homebuyer" and eligible for the program. The one exception is if the previous homebuyer sold their home a minimum of four years earlier and hasn't owned another one since. In that case, they're eligible again.

    -    The home has to be a primary residence, so you have to plan to live in the home yourself within one year of purchasing it or building it.

    For more information on the HBP, visit the Canada Revenue Agency's website at: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html or feel free to give me a call at (877) 817-9984.

    Turning your principal residence into a rental

    Last updated 7 years ago

    So, you're ready to move out of your starter home and into a larger residence. The thing is, your first home is so well-located that you'd love to hold onto it for a little longer - and maybe use it as a tool to launch you into the rental market. Before you make the commitment, however, here are a few things to consider:

    1.    Will you need to refinance?

    Chances are, in the time you've owned your primary residence, you've had an opportunity to build up equity. The question is, will you need some of this equity to use towards a down payment on a second home - or do you have a separate down payment fund saved up?

    If you need to tap into your home's equity, you're going to have to refinance - and you can only do so up to 85% of the value of your home. You'll also have to consider that, with a refinance, you'll likely have to take on a new mortgage term, rate and amortization - and, depending on the details of your mortgage, this may come with some hefty fees. It should also be noted that keeping that 35-year amortization with less than 20% equity can prove difficult since it's been phased out under new government rules.

    2.    Ensuring positive cash flow.

    If you have to pull out some equity in your home for a second down payment, your mortgage payments are going to increase on your primary residence. For a rental property to make sense, you're going to have to make sure that you have positive cash flow - which means the going rental rate can cover your mortgage payments, property taxes and maintenance costs. Check out similar rental properties in your area either through viewit.ca, craigslist.com or kijiji.ca.

    To keep your costs as low as possible, it's best to go with the longest amortization you can get your hands on - and the lowest mortgage rate.

    3.    Tax implications.

    If you end up using the money from your refinanced first property as a down payment for your second, you're going to find it difficult to legally take advantage of the tax deductibility of your new rental property. This is because borrowed funds are only tax deductible if they're used to fund a rental property - and you'll be using them to fund a new primary residence. This article at Million Dollar Journey does a great job of explaining the issue, and ways to get around it:

    http://www.milliondollarjourney.com/converting-a-principal-residence-into-a-rental-property.htm


    4.    Are you really ready to be a landlord?

    Becoming a landlord brings on its own new set of responsibilities - and potential late-night emergencies. Before you pull the trigger, really think about if you're ready to take care of the maintenance needs of two residences - and if you're prepared to carry the costs of two residences if you can't rent your first one out for a month or two.

    For further reflection, consider reading these articles about nightmare tenants:

    13 outrageous tenant excuses

    http://realestate.msn.com/13-outrageous-tenant-excuses?page=2

    Tenants from hell

    http://www.property118.com/index.php/tenants-from-hell-part2/

    The Home Inspection Process

    Last updated 7 years ago

    From a simple toaster to a state-of-the-art television set, it’s important to know what you’re getting for your money. When it comes to buying a home, you should know exactly what you’re buying before you sign the papers for one of the biggest purchases you’ll ever make.

    A home inspection is an unbiased report about the physical conditions of your property from foundation to ceiling. In this video, you can learn the basics of what’s included in an inspection and why you should seriously consider hiring a professional to appraise your house. Regardless of whether you’re a first time homeowner or considering refinancing your current mortgage, this video informs you of what you should expect and the benefits of investing in a home inspection.

    In the long run, an appraisal can save you thousands of dollars. You’ll be confident about your home’s quality and your private lender will be able to determine whether the house is worth the price.

    If you have any questions or simply want more information on home inspections, contact Nelson Sousa to set you up with a qualified home inspector in Edmonton. Talk to us today and set up an appointment at (877) 817-9984.

    4 Steps You Can Take Toward Lowering Your Mortgage Rate

    Last updated 7 years ago

    You signed the paperwork and were handed the keys. You are now a homeowner. Thankfully, your mortgage rate is not permanently set when you sign the loan document. Homeowners in today’s housing market encounter unprecedented mortgage opportunities every day. Here are a few ways you can lower your payments:

    1.      Refinance your Loan

    In instances when market interest rates drop, refinancing is a great option. This process involves taking out a new loan to pay off a previous one. While a lower rate may seem attractive, it’s important to consider other fees and charges associated with closing out the previous mortgage. If you calculate it correctly, you can determine when and how to break your existing loan for a mortgage with a better rate.

    2.      Renew your Current Mortgage

    When it’s time to renew your mortgage terms, don’t just sign the dotted line. Many lenders hope most customers won’t do research on their own and will remain stuck with their old rates. Be a discerning homeowner, shop around, and have an honest conversation about your finance goals with your current mortgage lender. Renegotiating different terms or switching lenders often leads to significant savings and shorter payoff periods.

    3.      Cut Back on Your Lifestyle

    Is there anything in your life you can live without? Think about what you can cut out of your lifestyle like TV channels, going out for lunch, long distance telephone plans that are never used, or lower vehicle or home insurance policies. With the savings you can prepay your mortgage down to cut down on the amortization.

    4.      Evaluate Yourself

    There are a number of steps you can take regardless of market conditions. Keeping up with your payments and maintaining a strong credit score lead to lower rates. Increased income and less outstanding debt also mean more money in your wallet.

    Finding a method to lower your mortgage rate is a rewarding process that requires dedicated research. A private home lender can work with you and develop hassle-free strategies to lower your mortgage payments. We’d be happy to answer any questions and provide you with information about renewing your mortgage and lowering your rates. Contact mortgage lender Nelson Sousa to set up an appointment. Call us at (877) 817-9984 or visit our website today.

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