Month: June 2017

WELCOME TO CANADA-BUYING A HOME IN CANADA IS A BIG STEP

General Barb Horvat 29 Jun

Oh Canada; Our home and Native Land.
The land of opportunity.

You’ve arrived in a new country with hopes and dreams. If you’re an immigrant like me, one of these dreams is to own a home, and what better way to put down roots.
The first thing you want to do is open a bank account and start building credit as soon as possible with a credit card. Fortunately, there are also programs to help new Canadians purchase their first home and make it easier for your family to become established in Canada.
The new to Canada program will assist you with getting into home ownership sooner than you think.

Here is a list of documentation required:
• Valid work permit or verification of landed immigrant status
• Income Confirmation: You will need to provide proof that you have been working full time in Canada for at least three months. Proof of income through either an employment contract and pay stubs
• Proof of down payment: The total down payment will vary based on the final purchase price. The down payment can come from your own savings or it may be possible for your family to provide you with a gift. CMHC will insure newcomers with permanent resident status with as little as five per cent down, while non-permanent residents must have a 10 per cent down payment to purchase a home
• Purchase and Sale Agreement

A good credit history is important, however, as a newcomer, you may provide alternative credit supporting documentation.

Two (2) alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The two alternative sources required are:
• Rental payment history confirmed via letter from landlord and bank statements
• One other alternative source (hydro/utilities, telephone, cable, cell phone and auto insurance) to be confirmed via letter from the service provider or 12 months billing statements

Buying a home in Canada is a big step. A Dominion Lending Centres mortgage broker can assist you with all the details.

Welcome to Canada, the great White North.

ALISON LOPES

Dominion Lending Centres – Accredited Mortgage Professional
Alison is part of DLC Premier Mortgages based in Waterloo, ON.

KEEPING YOUR ECONOMIC FUTURE ON THE RIGHT PATH

General Barb Horvat 28 Jun

Most working Canadians have an income range in the middle class.
This income class includes teachers, firefighters, plumbers, engineers, nurses, construction managers and chefs – workers from across the economic spectrum. They provide and consume the bulk of services that keep society afloat, driving economic growth and investment with every purchase.
The middle class also has great challenges. Wages have been stagnant and the cost of housing and everyday goods puts a squeeze on the average budget, leaving six out of 10 Canadians living paycheque-to-paycheque with most accumulating debt.
In part, this has to do with everyday life and the growing demands on our set of unique challenges. However, we need to “control the controllables” and be smart and strategic to get ahead.

Here are some tips to keep your economic future on the right path:
1. Spend within your means.
Most people keep a balance at months end on their credit cards and lines of credit – some out of necessity, but some by choice because they want to keep up with the Joneses or fill an emotional void. If you are trying to get ahead financially, ask yourself what your plan is to get rid of that debt? It should not be something that is with you to carry over a balance. It’s time to assess your lifestyle and how you are using your home equity and the market to your advantage if you own a home. Holding the debt is a costly mistake- most debts outside a mortgage range from more than five per cent to 19 per cent. Credit is an important part of life and you need it. The biggest life hack is to pay it in full every month with an auto setup payment – this one strategy saves costs, debt and stress.

2. Emergency fund is a must.
Ask yourself this, what would happen right now if your car broke down, your house need a new roof, or you lost your job? Most Canadians would have to go to credit cards or lines of credit.
You need six months of expenses put aside, period. If you don’t have this you will begin a cycle of debt. There are ways to do this automatic withdrawal into an account from your paycheque or when your mortgage renewal is up.

3. Giving your retirement a raise and start in high school.
Consider how long wages have felt stagnant while the cost of everything goes up. When you are young and your wages go up, increase your retirement contribution. Get compound interest working for you. Time is your friend. By saving a percentage automatically by paying yourself first, your investment grows your options. There are tax free savings accounts and RRSP’s that will begin the foundation of your financial future. It should start from the moment you get your first job, then when you fast forward through your 20s to 50s, your investment doesn’t have to be as large. Life will throw you enough challenges at that time to deal with, and you already have time and compound interest working for you, and you are in front of it, not chasing to catch up.

4. Relying on RRSP’s, OAS and CPP.
Contributing to tax advantaged products are one component of investing, but they have restrictions. Also, government future income plans are always going to be changing. Having a proactive mortgage and finance plan will allow you to get your assets working for you, so you can have multiple streams of income. Being self-sufficient is empowering, then if and when the other options are still available and advantageous, they are a bonus and you are in control based on your proactive abilities.
5. Spending too much on depreciating assets.
The average Canadian spends $570 a month on a new car payment. This can go up to as much as $1,400 per month- that’s just for the car, not insurance, gas, or maintenance. The problem is that it’s a depreciating asset. To put it into perspective, that range in payment takes away qualification for a whopping $150,000 to $400,000 in mortgage amount qualification. So for someone in the middle class who intends to buy a home, which is an appreciating asset, the car payment should be the absolute lowest priority, and should be avoided whenever possible. Think of the power you could have saving that kind of money or having it in an income-generating asset.

6. Having a will and keeping it current.
Your will should include your up-to-date investments, insurance policies, real estate and family gems. With life happening so quickly, it’s easy to have a few stages fly by, but then things can get messy. You don’t want your hard earned money in the hands of anyone but whom it’s intended for.

It’s never a bad idea to speak to a Dominion Lending Centres mortgage specialist if you have a question.

ANGELA CALLA

Dominion Lending Centres – Accredited Mortgage Professional

MAY’S EMPLOYMENT GROWTH BUILDS ON GAINS SINCE JULY 2016

General Barb Horvat 14 Jun

Another Sign Of A Economic Strength

Statistics Canada just released the Labour Force Survey for May, adding to the stream of positive economic indicators. While the jobless rate edged up 6.6% from a cycle-low 6.5%, it was the result of more optimism about job prospects as more people participated in the labour market. The jobless rate has been trending down in a see-saw pattern since February of last year (see chart). Adjusted to the way calculations are made in the U.S., Canada’s unemployment rate was 5.6% in May, compared with 4.3% in the U.S. The labour force participation rate in Canada (adjusted to U.S. concepts) was 65.7% in May compared with 62.7% in the United States. On a year-over-year basis, the participation rate increased by 0.2 percentage points in Canada, while it edged up by 0.1 percentage points in the United States.

Unemployment Rate in Canada (Chart)

 

Canada added 54,500 jobs last month, driven by a 77,000 increase in full-time jobs. This continues the upward trend in job growth that started in July 2016. May’s rise in employment was the third biggest one-month rise in the past five years–stronger than economists had expected.

There were notable employment gains in Ontario, British Columbia, Manitoba and Prince Edward Island. There was little change in the other provinces. Quebec’s unemployment rate fell to a record low of 6%. Manitoba has the lowest jobless rate in the country at 5.3%.
In May, employment increased in several industries, led by professional, scientific and technical services as well as manufacturing. The gain in manufacturing jobs at 25,300 is the most since 2002. There were smaller increases in transportation and warehousing; wholesale and retail trade; as well as health care and social assistance. In contrast, fewer people worked in finance, insurance, real estate, rental and leasing; information, culture and recreation; and public administration.

The number of private sector employees increased in May, while public sector employment and self-employment were little changed.

The stellar performance in job growth also finally came with a pick-up in wages. The pace of annual wage rate increases accelerated to 1.3% in May, after falling to a record low 0.7% in April. Another sign of potential tightness in the market is that wages for temporary workers are up 4.8% year-over-year.

The employment gains bode well for the continuation of the country’s expansion, which is the fastest among the G7 countries, as Canada emerges from the oil price collapse and benefits from a soaring real estate market.

It also could raise pressure on the Bank of Canada, which has recently sounded much more confident in the strength of the economy. Most economists anticipate a rate increase in the first half of next year. A separate report released Friday by Statistics Canada showed utilization of industrial capacity at the highest since 2007.

Over the past year, the economy created 316,800 new jobs, which was the most robust performance since February 2013, well before the oil price collapse. This pace of job growth has been rarely seen since the 2008-2009 recession.

The initial market reaction was a rise in the Canadian dollar.

In direct contrast, the U.S. posted disappointing job growth in May, just one of several signs indicating that the U.S. economy has hit a soft patch. The Federal Reserve may have reasons to be cautious and refrain from increasing interest rates when the Fed meets next week. However, most economists expect the Fed to hike rates once again next week and to signal its baseline expectations of another interest rate action later this year. The Fed will perhaps begin to outline its approach to slowly shrink its $4.5 trillion balance sheet. The Fed purchased Treasury bonds and mortgage-backed securities during the financial crisis and its aftermath, known as ‘quantitative easing.’ But the time is nearly ripe for the Fed to begin its reversal.

Provincial Unemployment Rates in April In Descending Order (percent)
(Previous months in brackets)

— Newfoundland and Labrador 14.0 (14.9)
— Prince Edward Island 10.3 (10.1)
— New Brunswick 8.7 (8.4)
— Nova Scotia 8.3 (8.6)
— Alberta 7.9 (8.4)
— Quebec 6.6 (6.4)
— Saskatchewan 6.2 (6.0)
— Ontario 5.8 (6.4)
— British Columbia 5.5 (5.4)
— Manitoba 5.4 (5.5)

DR. SHERRY COOPER

Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.

A FRESH START-OUR HOUSE MAGAZINE SPRING 2017

General Barb Horvat 13 Jun

The following is from the Spring issue of Dominion Lending Centres’ Our House Magazine.

Cara Brookins built a new home for her family from the ground up

A house is often considered more than just a place to live. It’s a place of memories, stability and safety.
No one understands this sentiment more than Cara Brookins. The Arkansas mother of four has recently garnered a lot of international attention for her story. Brookins, who had no experience and little know-how, built her five-bedroom house with little more than a small loan and YouTube videos. It’s a considerable feat for sure, but it’s what got her to that point and what she’s learned since that makes her story even more intriguing. Brookins had been involved in a couple of bad relationships, including being terrorized one of her ex-husbands for a decade. Her last husband appeared to offer protection, but he too became physically violent and the pair divorced. It was 2007 and Brookins, who worked a good job as a computer programmer and analyst, admits that she and her family were destroyed emotionally and financially.

Building a foundation

Instead of buying a small home or an apartment in her town of Bryant, a suburb of Little Rock, she got the idea to build the home she wanted—herself.
“At the time, it seemed like obviously what anybody in my position, who had been through what I had, would do,” she told Our House magazine. “In retrospect, I don’t think that’s what everybody would do. I felt this desperation that I had to do something quick to make [my children] feel more powerful and in control of their lives and give them some courage before they went out into the world. This was an opportunity to do something that would give us the house we needed in the end, but that would also give us some sort of inner strength and family strength.”
Brookins researched the local building codes, drew up plans and headed straight to the bank for a loan. She got turned down numerous times until a bank finally gave her what she wanted. Brookins was approved for nine-month, $130,000 construction loan. So, in December of 2007, as the cold Midwest winter set in, she bought an acre plot of land and started to build. That meant laying down the concrete foundation, installing plumbing and getting electricity to the building. With her older teenaged children, aged 17 and 15, by her side to help, Brookins went to her day job in the mornings and worked on the house in the evenings.
“I knew we could build a house. I absolutely knew we could figure out a way to put this together,” says Brookins, noting her days were often 19 hours long. “Once we started, I doubted it many times.” But Brookins and her young family persevered, finishing the 3,500-square-foot house in the nine-month timeline, getting all the occupancy permits and moving in by 2009. She said she really had no choice. “I knew once I spent all that money, there was no way out, but it also felt good,” says Brookins, adding that when there is that much pressure, it’s amazing what people can do.
Moving in, however, wasn’t a cause for celebration. Instead, she described it as a feeling of absolute emotional and physical exhaustion. Adding to it, the day the family moved in, Brookins’ mother had a blood clot and tragically died. It ultimately took months to settle in to the home and appreciate what she and her family had actually accomplished.

Sharing her experience

It also took years before Brookins told her story. Rather than boast about her accomplishment, she said she hid it from people out of embarrassment. She explains she was ashamed of the decisions she had made, which put her family in a situation where she felt no choice but to build a house on her own. An avid writer in her spare time, a few years later Brookins opened up about her experiences to an author at a writer’s convention. She was encouraged to share her story with the world. So she did, writing her memoir, Rise: How a House Built a Family. The book was released in January 2017. When Brookins decided to put pen to paper, she wanted to include her entire story, warts and all. “To really own my history, it took six years and several different versions of this book to do that.” Brookins says she never imagined people would be interested in her story, but it turns out she was wrong. She has now parlayed her experience into motivational speaking, more book writing and even a potential television show.

Finding sanctuary

Now nearly 10 years since she hatched a plan to build a house with her own two hands, Brookins, 45, still lives in her home. Her favourite room is the library, which is her quiet sanctuary. Her eldest daughter and son have moved out and are embarking on careers of their own. Her daughter runs a successful business and helps mentor young entrepreneurs. Their success is something the proud mother never would have thought possible had she not brought them along in building a house. Brookins has no intention of building another house, except perhaps helping her own children if they ask. It was never her goal to be a contractor. When she shares her story with people, she said the point isn’t the house, but rather that anyone can follow their dreams.

GO LONG OR SHORT WITH YOUR RATE

Mortgage Tips Barb Horvat 9 Jun

With all the news about interest rates rising do you go long or short with your rate when you set up your mortgage?

After discussing your current life situation and answering some key questions with your Dominion Lending Centres mortgage broker you can make some decisions and set your mortgage rate and term to best fit your needs. There are many interest rate terms to choose from (1, 2, 3, 4, 5, 7, 10 year fixed and 3 and 5 year variable). If you are looking to lock in to a short or long term fixed rate, consider this:

A long-term mortgage makes sense if:

• If rates were on the rise and you could not take the hit. A long term rate gives you peace of mind.
• You don’t have a nest egg of savings or investments to fall back on
• You have little equity or net worth
• Your income could change based on a growing family or retirement for example

A short-term mortgage may be the way to go if:

• You expect to pay off large chunks of your mortgage or sell your home within the next three years
• You have a short remaining amortization (e.g. 5-6 years or less)
• Your credit is impaired and you need alternative lending till you repair your credit so you can qualify at a better rate in one year.
• You need to refinance in coming years to access your equity for education, investment purposes, etc
• You believe rates won’t rise soon and you have a short-term rate where you can make higher-than-required payments to maximize the reduction of your mortgage

With two year rates in the low two per cent, five-year fixed rates under three per cent and 10 year terms under four per cent there is enough of a spread that some borrowers can decide easily to go long or short with your rate. If you want flexibility go short. If you have little equity and want to play it safe maybe the long term rate for 5,7 or 10 years is for you. As rates shift upwards and the spread between the five and 10 year shortens you have to consider if a difference of .5 per cent in a rate may be so insignificant that locking in to a long term rate may make sense for some, while others will take the risk and continue to play the short game. We have seen the spread between the short and long term rates become slim which creates the opportunity for discussion. These are decisions you can only make once you run the numbers with your DLC mortgage broker.

Maybe it is time to add a call to your mortgage broker to review your mortgage plan.

PAULINE TONKIN

Dominion Lending Centres – Accredited Mortgage Professional
Pauline is part of DLC Innovative Mortgage Solutions based in Coquitlam, BC.

 

SHOULD YOU RENEW OR SWITCH LENDERS?

Mortgage Tips Barb Horvat 8 Jun

Renew (the mortgage industry meaning): to remain with the current lender by simply signing the renewal letter that comes in the (e)mail.

Switch (again, the mortgage industry meaning): to move from the existing lender to a different lender without leveraging any additional funds/equity; the outstanding balance remains the same.

Is renewing your mortgage with the current lender the best option, or should you consider switching to a new lender? The answer is provided with some simple math. As mortgage consumers, we want to save as much money as possible, plain and simple.

Seventy percent of borrowers that currently hold a mortgage simply sign the renewal letter they get. Most of the time they are leaving 20 – 40 basis points or 0.20% – 0.40% on the table. This puts millions of dollars back into the pockets of the lenders and their shareholders.

There are times when the current lender does not offer the best market rate or product for your situation. How will you know you are getting the best rate for your scenario? By contacting Dominion Lending Centres Mortgage Professional who works for you… not the lender.

So first things first: contact your DLC Mortgage Broker four months before the term matures to discuss the next term’s strategy. What do the next two, three or even five years look like? This will then lead to an interest-rate discussion. Can there be some money saved?

I have been working with a client over the past couple of weeks as her current mortgage is coming to maturity. Had she just signed at the bottom of the renewal letter she would have been overpaying by 30 basis points.

Current lender offered 2.84% for a 5-year Fixed term (Renew)

New lender offered 2.54% for a 5-year Fixed term (Switch)

Here’s what that looks like. Note the mortgage balance used was $330,000 (25-year amortization). This just happens to be the average mortgage amount in British Columbia.

Monthly Payment Annual Payment Payments Over 5 Yrs O/S Balance After 5 Yrs Interest Paid
2.84% $1,534.74 $18,416.88 $92,084.40 $281,194.12 $43,278.52
2.54% $1,484.87 $17,818.44 $89,092.20 $279,529.82 $38,622.02
Total Savings $49.87 $598.44 $2,992.20 $1,664.30 $4,656.50

The biggest saving is in the total interest saved over 5 years. At the end of the day this borrower saved $4,656.50. Guess what she decided to do? Yes, SWITCH lenders.

In this scenario, it will cost the borrower $0 to make a switch. Would you put four 1000-dollar bills, six 100-hundred-dollar bills, one 50-dollar bill, one five-dollar bill, one loonie and two quarters in the fire? No, you would not.

Bottom line, make sure you have a discussion with your independent Mortgage Broker before (potentially) burning thousands of dollars.

MICHAEL HALLETT

Dominion Lending Centres – Accredited Mortgage Professional
Michael is part of DLC Producers West Financial based in Coquitlam, BC.

HOW DOES THE GROWTH OF OUR AGING POPULATION AFFECT CANADIANS?

General Barb Horvat 6 Jun

According to the latest Statistics Canada’s 2016 census data released last month, Canadian seniors now outnumber children for the first time, with 5.9 million Canadian seniors compared to 5.8 million Canadians 14 years of age or younger. The number of Canadian seniors is expected to continue to grow because of the gains in life expectancy.
As the only financial institution in Canada working exclusively with seniors, we often conduct research studies to get direct insight into the behaviour of the Canadian aging population. HomEquity Bank’s latest research study (May 2017), The Home Stretch: A review of debt and home ownership among Canadian seniors indicated that 91% of Canadians over 65 prefer staying in their home throughout retirement, however 78% have savings and investments, and only 40% of those have less than $100,000 set aside.

What does this mean for aging Canadians?
Canadian seniors are getting more comfortable with their debt, with many financing their lifestyle with debt. In this study by HomEquity Bank using Equifax data, it shows that among Canadian seniors, 15% still carry a mortgage, 30% carry unsecured lines of credit (LOC) and 10% have a home equity line of credit (HELOC). The total debt average for seniors is $29,973, which translates to $15,493 per Canadian senior.
On a geographical basis, British Columbia has the highest debt balance for seniors with an average of $41,054 per person compared to the national average of $29,973. This is due primarily to a higher mortgage debt. On average mortgage debt per senior mortgage holder in B.C. is $128,338 compared with the national average of $95,737, with 17.7% of the senior population in B.C. still holding a mortgage.
Moreover, Canadian seniors now rely heavily on government and other retirement benefits during their retirement.
– 77% rely on the Canada Pension Plan as their primary expected source of income;
– 73% rely on Old Age Security; whereas only
– 57% are drawing upon their RRSPs;
– 48% have a work pension; and
– 48% have savings

How can a CHIP Reverse Mortgage help?
The growing senior demographic in Canada prefers to age in place in the comfort of their home, despite their limited savings for retirement. The CHIP Reverse Mortgage from HomEquity Bank, provides a way for Canadians aged 55+ to unlock the value of equity in their home. Seniors can consolidate their existing debt and finance their retirement while continually protecting a portion of that equity, and they can help relieve the financial burden on their children.
Unlike a loan or conventional mortgage, the CHIP Reverse Mortgage from HomEquity Bank does not require any monthly mortgage payments, not even interest payments, and is only repaid once the homeowner(s) no longer live(s) in the home (when they move, sell or pass away). A reverse mortgage is a great solution that provides access to tax-free cash when Canadians need it the most and best of all, they get to remain in their memory filled homes for the remainder of their lives.

To read the complete HomEquity Bank and Equifax study on Debt and Homeownership from May 2017, click here.

For more info, contact your Dominion Lending Centres mortgage specialist.

 

YVONNE ZIOMECKI

HomEquity Bank – Senior Vice President, Marketing and Sales

MR. MORTGAGE BROKER, PLEASE GIVE ME THE BEST RATE!”

General Barb Horvat 5 Jun

In the past, it was easy to give our clients the best mortgage rate available. Unfortunately, new government regulations have created a fragmentation of interest rates that make “giving you our best rate,” more complex.
It’s important to distinguish between what is “insurable” and “uninsurable.” An “insurable” mortgage is approved at 25 years amortization and at a higher rate than what a borrower would actually be paying (called the qualification rate – at time of this article, it is 4.64%). An uninsurable mortgage is any refinance, mortgage on rental properties, mortgages approved at 30 years amortization, and properties worth more than $1 million.
Below is some information that outlines which scenarios allow you to get the best interest rate available, and what type of lender can provide these rates.
Please note: I am assuming average to above average credit in the scenarios below.

Best Rates – Monoline Lenders
Insured Mortgages
• On all purchases with less than 20% down payment, insurance is mandatory
• On purchases with 20% down payment or more, insurance may also be obtained
The absolute best rates are for mortgages that are insured by one of the three Canadian mortgage insurance companies: CMHC, Genworth or Canada Guarantee. When your mortgage is insured, the insurance company steps in to pay your monthly mortgage payments to the lender if you don’t pay. An insured mortgage is inherently a lower risk for the lender than a mortgage that is not insured.

Great to Best Rates – Monoline Lenders
Insurable, low loan to value Mortgages
• You have a large down payment
• Your mortgage is for a purchase on a property under $1 million in value
• Your mortgage is approved at 25 years amortization at 4.64%
When your mortgage can be insured, Monoline lenders take it upon themselves to insure your mortgage for you, making the mortgage less risky to them so that they can provide you with the lowest rates. However, insurance costs for lenders increase with mortgage loan to value. This increase in insurance cost is transferred to you, the borrower, providing you with slightly higher interest rates.

Good to Great Rates – Banks and Credit Unions
Uninsurable Mortgages or insurable, high loan-to-value Mortgages
• On refinances
• On mortgages that require 30-years amortization
• On mortgages where properties are over $1 million in value
For uninsurable mortgages, our normal go-to lenders have higher interest rates because they are forced to insure their mortgages, making them pass the extra costs to you, the borrower. On the other hand, banks and credit unions are not required to insure their mortgages, making them the best fit for higher loan-to-value mortgages.

Good Rates – Monoline Lenders, Banks, and Credit Unions
Rental properties and stated income
• Rental properties
• Stated Income
Most lenders will increase your interest rate on rental properties because they see these mortgages as having a higher risk than ones on owner occupied homes. Also, lenders may also increase interest rate for self-employed individuals who need to prove a higher income than what they have stated on their tax returns.

Highest Rates – Private Lenders
Mortgages that cannot be approved through regular lenders
• Stated Income B Side
• Equity Mortgages
When a stated income cannot be insured, lenders increase their interest rate to offset the risk of someone who cannot prove their income. An equity mortgage is one where a client has down payment or equity but no income shown. Lenders look at these files as having the highest risk.

Call a Dominion Lending Centres mortgage professional today to see how we can help you get the best interest rate on your mortgage so you can buy your dream home!

EITAN PINSKY

Dominion Lending Centres – Accredited Mortgage Professional
Eitan is part of DLC Origin Mortgages based in Vancouver, BC.

GETTING A MORTGAGE AFTER CONSUMER PROPOSAL OR BANKRUPTCY

General Barb Horvat 2 Jun

Life can definitely throw some challenging financial situations your way. As mortgage professionals, we can provide solutions and strategies during or after these challenging times in order to get you back on track. We have access to banks, trust companies and mortgage companies that specialize in this transitional period to help you move forward with the best mortgage plan for you. We protect your credit by negotiating with multiple lenders to find a solution for you.

If you have never owned a home and have had a consumer proposal, the good news is that you are already accustomed to the discipline of saving money every month. Should you choose to continue to grow your savings, those funds can then be put toward a down payment and re-establishing credit.

If you own a home already, there are lenders that will help you refinance and pay out your proposal earlier in order to accelerate your transition period.

After bankruptcy, different lenders will issue mortgages based on the amount of time since you were discharged, the amount of down payment on a purchase and/or the current equity in your home if your already own. Lenders then price their rates based on these aspects of your application.

At Dominion Lending Centres, we look forward to learning about your journey while protecting your credit and guiding you through the best strategy on a moving forward basis.

ANGELA CALLA

Dominion Lending Centres – Accredited Mortgage Professional
Angela is part of DLC Angela Calla Mortgage Team based in Port Coquitlam, BC.

 

FIND YOUR PERFECT HOME TYPE

Mortgage Tips Barb Horvat 1 Jun

Single-family detached homes are the most popular choice of Canadian homeowners, but aspiring first-time homebuyers should consider all their options before starting their house hunt. Don’t overlook the perfect option for your family – you may be surprised by what’s out there, at or below your budget.

According to Statistics Canada, over half (55 per cent) of Canadian households have opted for the classic single-family detached house. While condos are a distant second with roughly a quarter of homeowners opting for them, they are significantly more popular in big metro areas like Toronto and Vancouver. Rounding out the homeowner choices at 17.8 per cent of households, are other housing options like row houses, semi-detached houses, mobile or modular homes, and other single-attached dwellings (such as urban infill homes).

What starter home is right for you? Read on for a look at the most common (and lesser known) home options. Consider all your options, so you can maximize your opportunity to find the perfect dwelling to call home sweet home.

SINGLE FAMILY DETACHED:
Definition: A single-family, standalone house that sits on its own lot
Strengths:
• Privacy
• Less noise from neighbours
• Consistent demand in established neighbourhoods
Considerations:
• Generally costs more to buy
• Maintenance costs
• Highly competitive market in large metro areas, which can include bidding wars and houses selling for well over asking price

SINGLE-FAMILY, SEMI-DETACHED:
Definition: A single-family house attached to another house on one side only
Strengths:
• More affordable to buy than a fully detached home
• Most of the privacy of a single family detached
• Can be more affordable to maintain than a fully detached home
Considerations:
• Less privacy than a detached home
• Some noise from neighbours through shared wall

DUPLEX:
Definition: A structure with two single-family units on separate levels
Strengths:
• Great way to reduce home purchase and carrying costs: live in one unit, rent the second one out
• Flexibility: move adult children or ageing parents into the second unit as needed down the road
Considerations:
• Less privacy than a single-family detached home
• Some noise from tenants through floor/ceiling

TOWNHOUSE OR ROWHOUSE:
Definition: A row of single-family homes, connected on both sides to the next home (except for the end units which are only connected on one side). All have their own separate yards. May be freehold or have condo-style shared ownership rights and responsibilities.
Strengths:
• More affordable to buy than a detached or demi-detached home
• Can be more affordable to maintain than a fully detached home
• Private yard
Considerations:
• Less privacy than a single-family detached home
• Some noise from neighbours through shared walls
• Condominium-style ownership include monthly condo fees/maintenance costs.

CONDOMINIUM:
Definition: Low- or high-rise buildings containing many apartment units. Units are individually owned, with shared ownership rights and responsibilities to the common areas and building.
Strengths:
• Affordable
• Swimming pool, fitness centre, party room and other shared amenities are standard
• Minimal maintenance work required
Considerations:
• Monthly condo/maintenance fees in addition to mortgage payments
• Less privacy/more noise with neighbours on all sides, plus shared common areas
• Typically smaller than detached or semi-detached homes

MODULAR or MOBILE HOME:
Definition: Factory-built homes delivered to a home-site for installation. The home is owned outright, while the land it sits on could be owned or rented.
Strengths:
• Affordable
• Flexibility: if you relocate, you could sell the mobile home in situ, or move it with you to a different home-site
• Useful in areas where it can be hard to build (due to climate or location)
Considerations:
• Less resale demand than other housing types
• Annual rent increases if renting land in a mobile home community

CARRIAGE HOUSE or URBAN INFILL:
Definition: A carriage house is located on the periphery of a single family detached house. Urban infill homes are a modern solution to crowded cities, re-purposing existing spaces in established residential or commercial areas to maximize use and reduce urban sprawl.
Strengths:
• Often located in interesting, urban environments
• Unique, character dwellings
• Often less expensive than a typical single-family detached house
Considerations:
• Limited inventory
• Potential for noise pollution in a busy location
• Limited or non-existent yard space
• Finding the right home for your needs means considering your lifestyle and budget now, as well as where you’ll be a few years down the road. Want more new-homeowner inspiration?

Contact Dominion Lending Centres to learn more about your options when it comes to buying and owning a home. Access more great articles and tips at www.homeownership.ca.

Marc Shendale

MARC SHENDALE

Genworth Canada – Vice President Business Development