Brenda Joynson

If you’re looking to buy your first house or your next house, it’s a good idea to plan ahead and consider all the costs associated with buying.

Your closing costs represent the things you will have to pay for out of your pocket, and the amount of money necessary to finalize the purchase of your new property.

The best time to work through the costs associated with closing your mortgage is before you even start looking for a place to buy. Closing costs should be part of the pre-approval conversation; they are just as important as saving for your downpayment.

Here is a list of the things that will cost you money:

Home Inspection or Appraisal

A home inspection is when you hire a professional to assess the condition of the property to make sure that you won’t be surprised by unexpected issues.

An appraisal is when you hire a professional to compare the value of the property against other properties that have recently sold in the area.

The cost of a home inspection is yours, while the cost of the appraisal can be covered by high-ratio insurance, or sometimes your responsibility depending on your specific circumstances.

Lawyer or Notary Fees

To handle all the legal paperwork, you will be required to hire a real estate lawyer. Chances are, this will be one of your most significant expenses.

Taxes

Depending on which province you live in, and the purchase price of the property you are buying, you might have to pay a property transfer tax or land transfer tax.

Insurance

Before any financial institution lends you money, they will want to see that you already have property/home insurance in place for the purchase.

Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation.

Moving Expenses

Congratulations, you have a home, now you have to get all your stuff there! Don’t underestimate the cost of moving your stuff.

Utilities

Hooking up new services to a property is more time consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services.

So there you have it, this most of the costs associated with buying a new property. However, this list is by no means exhaustive, so if you have any questions about your closing costs, or anything else mortgage-related, contact me anytime, I’d love to hear from you!

When looking to qualify for a mortgage, typically a lender will want to review four main areas of your mortgage credit, downpayment/equity, and the property itself.
So if you currently own a home, and are looking to upsize, downsize, take on a renovation challenge, or purchase investment, it’s good to keep in mind that the condition of the property you are looking to finance matters. If to purchase isn’t in good condition, it could be hard to arrange mortgage financing.
The property matters because the property you are looking to purchase is the collateral the lender holds in case mortgage.
You can expect that any lender will make every effort to ensure that any property they finance is without defect. a property is “prime and marketable”. In the rare case that you happen to default on your mortgage, they want repossess, they can liquidate (sell-off) the property quickly and recoup their money.
So to establish value, an appraisal is always required on every purchase. Now, if your mortgage is insured through or Sagen, they will have used an automated system to appraise the property (you might not even have known conventional mortgage applications, a physical appraisal; where an actual appraiser goes to the property, is required.
Now, what happens if you want to purchase a property that might not be in the greatest condition? Well, you a purchase plus improvements can be a great mortgage option.

If you have any questions about financing your next property or potentially using a purchase plus improvements to buy a fixer-upper, please don’t hesitate to contact me anytime!

1. Buying a home with a 5% down payment is available to everyone. Contrary to popular belief, you don’t Home Buyer, this is available to anyone as long as you qualify. In theory, you could turn your current home property and buy another home with only a 5% down payment. Newer rules state that any home purchase 10% down payment. ie. 700k home purchase price. 500k @ 5% down payment = 25k and 200k @ 10% + $20k = $45k down payment required.
2. You can even buy a home with 0% down. Assuming you qualify, you’re allowed to borrow the minimum payment from your LOC, Credit Card, Installment Loan, etc, and use it to buy a property. Keep in mind, factor in the monthly payments associated with the borrowed funds.
3. You could knock 2 years and 8 months off your mortgage by simply changing your payment frequency example, if your current mortgage payment is every 15 days you would just change it to every 14 days. once a month, just divide that payment by 2 and make that payment every 14 days. I assumed a 25 year this example.
4. The potential mortgage penalty for a fixed-rate mortgage can be 4 to 8 times higher than a variable. Variable-rate mortgages come with a predictable 3-month interest penalty no matter if you break it at rate penalties are the higher of 3-months interest or IRD (Interest rate differential). They usually end up bank/lender has their own formula for calculating this. Both variable and fixed rates have their pros and advantage is the potential lower penalty which equals flexibility.
5. The cost of a daily fancy coffee could take 2.5 years off your mortgage. For example, if you have a increase your mortgage payment by $5/day instead of indulging in a fancy coffee (I’m all for this by the $20,000 of interest over the life of your mortgage.

Due to Canada's tax system's Principal Residence Exemption, when we sell our homes, any increased value or “capital gains” are not taxed.

This generous tax break matters to Canadian homeowners. Collectively, we have about $3 trillion in home equity and our homes are often our largest financial asset.

However, starting with our 2016 income tax returns, there are some changes in how homeowners qualify for the Principal Residence Exemption.

Until now, the Canada Revenue Agency has not required Canadians to report on a home sale when during tax season. If you sold your home in 2016 or later, you will need to complete a Schedule 3, Capital Gains of the T1 Income Tax and Benefit Return in order to report your sale.

The good news is that, in terms of taxes, nothing has changed. The same tax benefit is available to anyone who sells their home, provided the property was the principal residence for every year you owned it – even if you use part of your home for business purposes. There is no “new tax” involved – only a requirement that we report the sale details on our tax returns.

So, if there is still no tax to pay, why the extra paperwork?

When it comes to taxes, not everyone plays by the rules. The Principal Residence Exemption is a very generous tax break and it is occasionally misused by those involved in speculative “house flipping” in order to evade taxes on their profits. In these cases, people were claiming the exemption for homes they owned, but may never have lived in. Reporting these sales allows the government to make sure that only eligible homeowners get the benefit that they are entitled to.

So, if you sold you home in 2016, make sure to report the sale when you file your 2016 tax return. You will still get the same tax break and you will help prevent the misuse of this important homeowner tax benefit.

 

Quite simply, it is the ability to do more with less.

If you wanted to change a tire on your car, you wouldn’t be able to lift the vehicle on its own. But, with the help of a car jack, you could then lift the car and change the tire. This is called leverage
When most people talk about the word leverage, it usually involves talking about real estate. This then starts a conversation around risk tolerance, market conditions, home values, and everyone seems to have an opinion - real estate is a very popular topic amongst us Canadians.
If you own a home then you have already leveraged someone else’s money and I’m sure you’ve done very well off that investment. So why stop there? Why not continue that pattern? I think it’s because the word leverage scares people. Truth be told, we are all using leverage to benefit us each and every day.
Technology - using your cell phone allows you to take your office and emails with you. You are leveraging the technology to allow you to do your work on the go.
Other People’s Time - hiring a cleaning person or a mechanic to change your oil. You are leveraging their time so you can save yours.
Other People’s Knowledge - hiring an accountant, lawyer, mortgage broker, etc. You are leveraging their knowledge so you are protected and you don’t have to waste time figuring it out yourself.
Education - taking a course, going to school, reading a book, attending a seminar. There is no point in learning by trial and error what someone else has already learned and they can teach you.
Leverage is the key to many areas of success in our lives.
In order to create any kind of wealth in this world, you will need to leverage other people’s money, time, and knowledge. I love leverage in real estate because for every $1 I have, someone is willing to give me $4. And I then use that $5 to buy real estate.

Here is an example:
John uses $100k to buy Stocks/RRSP/Mutual Funds.
Sally uses $100k as a down payment which allows her to buy a $500k investment property.
15 years later…
Let’s assume an annual rate of return of 5% for both (No matter what number we use here, the theory is the same). John’s $100k is worth $207k = $107k profit.
Sally’s property is worth $1M, $400k mortgage paid down to $200k, payback the original $100k down payment = $700k profit.
This $700k can then go towards paying off Sally’s principle residence, sending her kids to college with no debt, early retirement, etc.
It’s obvious Sally is the clear winner over John when it comes to how to leverage your money.
If you’re interested in being more like Sally then we need to talk.
 

The Difference Between A Banker And A Broker
While we have likely already done business together, and you understand the difference between a banker and a broker, it might be worth a quick refresh, in case you have a friend or family member who could use this information! Feel free to pass this on.
What's The Difference?
The difference between a banker and a broker comes down to the products each can offer, and where their allegiances lie.
A banker is paid by the bank, to make the bank money at your expense, while a mortgage broker is paid by the lender to get you the best mortgage available, which is to your benefit.
Mortgage Brokers
A mortgage broker has access to multiple lenders and shops around to get their clients the best mortgage product available.
Working with a mortgage broker provides you with options right across the board. Instead of having to go in and fight the bank for a deal, your mortgage broker does all the leg work and outlines your options at several lenders. As the lender pays the mortgage broker upon closing, there is no cost to you.
Bankers
A banker works for a single financial institution, and can only offer mortgage products from that institution.
As banks can only offer you their rates and products, they are very limited in how they can help you. They never offer you the best deal to start with, however, will eventually negotiate on terms and rates, but you will be responsible for doing the negotiations on your own.
Renewal Time?
If you have a mortgage up for renewal, or you would like to refinance, it is always in your best interest to contact your mortgage broker instead of dealing with the lender who currently holds your mortgage. Just because they were the best option previously, that doesn't mean they will be the best option in the future.

If you or someone you know is considering a new mortgage, let's connect to get you the best mortgage options available!

Trick question - it’s always a good time.
If you are like most Canadian homeowners, then you likely set yourself up when you bought your home and really haven’t really considered your mortgage much since. But I actually recommend that you check in on your mortgage at least once per year to run the numbers and reflect on how both your personal situation and the economic landscape have changed.
Here are just a few of the ways that reviewing your mortgage could help you today.
Outsmarting your renewal
If you are in a 5-year low-rate term right now then you’re likely just waiting for that lender renewal offer to appear right before your term is up, right? But here’s the thing - not only do you not have to wait for that offer, you actually shouldn’t wait at all. Most often, lenders will throw you their best posted fixed rate that day and forget about it. Working with a trusted broker well in advance gives you the opportunity to find the best possible mortgage for you on the market, potentially saving you thousands.
Accessing cash sooner
Most lenders are hesitant to hand you an umbrella on a rainy day - they’d much rather lend when things are looking sunny! This is why, if you’ve been considering refinancing to loosen up some cash flow, you should review your mortgage and consider your options to create a financial safety net before you actually need it.
And of course, it’s always wise to review your mortgage payment. The mortgage landscape is always launching innovative new options. So, if your payment is becoming burdensome for your household, checking in to see what a simple restructuring could do is never a bad idea.
Think of your mortgage like your car - sure, you could just bring it in for maintenance when the “check engine” light comes on, and probably face a hefty bill. Or, you could check the engine from time to time, just to make sure she’s doing okay, and keep more of your cash in your pocket. Let’s pop that hood today!

Quite simply, it is the ability to do more with less.

If you wanted to change a tire on your car, you wouldn’t be able to lift the vehicle on its own. But, with the help of a car jack, you could then lift the car and change the tire. This is called leverage
When most people talk about the word leverage, it usually involves talking about real estate. This then starts a conversation around risk tolerance, market conditions, home values, and everyone seems to have an opinion - real estate is a very popular topic amongst us Canadians.
If you own a home then you have already leveraged someone else’s money and I’m sure you’ve done very well off that investment. So why stop there? Why not continue that pattern? I think it’s because the word leverage scares people. Truth be told, we are all using leverage to benefit us each and every day.
Technology - using your cell phone allows you to take your office and emails with you. You are leveraging the technology to allow you to do your work on the go.
Other People’s Time - hiring a cleaning person or a mechanic to change your oil. You are leveraging their time so you can save yours.
Other People’s Knowledge - hiring an accountant, lawyer, mortgage broker, etc. You are leveraging their knowledge so you are protected and you don’t have to waste time figuring it out yourself.
Education - taking a course, going to school, reading a book, attending a seminar. There is no point in learning by trial and error what someone else has already learned and they can teach you.
Leverage is the key to many areas of success in our lives.
In order to create any kind of wealth in this world, you will need to leverage other people’s money, time, and knowledge. I love leverage in real estate because for every $1 I have, someone is willing to give me $4. And I then use that $5 to buy real estate.

Here is an example:
John uses $100k to buy Stocks/RRSP/Mutual Funds.
Sally uses $100k as a down payment which allows her to buy a $500k investment property.
15 years later…
Let’s assume an annual rate of return of 5% for both (No matter what number we use here, the theory is the same). John’s $100k is worth $207k = $107k profit.
Sally’s property is worth $1M, $400k mortgage paid down to $200k, payback the original $100k down payment = $700k profit.
This $700k can then go towards paying off Sally’s principle residence, sending her kids to college with no debt, early retirement, etc.
It’s obvious Sally is the clear winner over John when it comes to how to leverage your money.
If you’re interested in being more like Sally then we need to talk.
 

There are a lot of Very, Very low rate mortgages currently being advertised out there. However, you have to be aware of the Limitations and Restrictions that may make these mortgages not such a "good deal" down the road! You can give me a call to walk you through the Maze anytime.

1 Get independent advice on your financial options. As independent mortgage brokers and mortgage agents,
we’re not tied to any one lender or range of products.  Our goal is to help you successfully finance your home or property. We’ll start by getting to know you and your homeownership goals. We’ll make a recommendation, drawing from available mortgage products that match your needs, and we will decide together on what’s right for you.

2 Save time with one-stop shopping.  It could take weeks for you to organize appointments with competing mortgage lenders — and we know you’d probably rather spend your time house-hunting! We work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. It makes comparison-shopping fast, easy, and convenient.

3 We negotiate on your behalf. Many people are uncertain or uncomfortable negotiating mortgages directly with their bank. Brokers negotiate mortgages each and every day on behalf of Canadian homebuyers.  You can count on our market knowledge to secure competitive rates and terms that benefit you.

4 More choice means more competitive rates. We have access to a network of major lenders in Canada, so your options are extensive. In addition to traditional lenders, we also know what’s being offered by credit unions, trust companies, and other sources. And we can help you take care of other requirements before your closing date, such as sourcing mortgage default insurance if your down payment is less than 20% of the purchase price.

5 Ensure that you’re getting the best rates and terms. Even if you’ve already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping! Let us investigate to see if there is an alternative to better suit your needs.

6 Get access to special deals and add-ons. Many financial institutions would love to have you as a client, which is why they often offer incentives to attract creditworthy customers. These can include retail points programs, discounts on appliances, shopping clubs, and more. We do the math on which offers might be worth your attention when it comes to financing or mortgage insurance — so you get the perks you deserve.

7 Things move quickly! Our job isn’t done until your closing date goes smoothly. We’ll help ensure your mortgage transaction takes place on time and to your satisfaction.

8 Get expert advice. When it comes to mortgages, rates, and the housing market, we’ll speak to you in plain language. We can explain the various mortgage terms and conditions so you can choose confidently.

9 No cost to you. There’s absolutely no charge for our services on typical residential mortgage transactions. How can we afford to do that? Like many other professional services, such as insurance, mortgage brokers are generally paid a finder’s fee when we introduce trustworthy, dependable customers to a financial institution. These fees are quite standard and nearly industry-wide so that the focus remains on you, the customer.

10 Ongoing support and consultation. Even once your mortgage is signed and paperwork is complete, we are here if
you need any advice on closing details or even future referral needs. We are happy to be of assistance when you need it.