When the personal becomes professional: Assembling your home buying team

Most of you would agree that meeting the love of your life is a monumental event. From observing my clients over the last thirty years, I’d argue that falling in love with a home runs a close second. Walking into a new home or model and feeling your pulse quicken is a magical sensation. When you feel a strong personal connection with a certain place, you won’t sleep until it’s yours.

It may seem strange that such a personal experience involves working with so many other people. But when you’re making the biggest financial investment of your life, it’s always wise to depend on the advice and expertise of professionals. Depending on your personal circumstances, you may consider consulting with the following:

Mortgage Specialist: Ideally, you will have met with a mortgage broker or mortgage specialist from your bank or lending institution prior to beginning your home hunt. Understanding how much money you have to work with is an excellent first step to narrowing your search, and obtaining a pre-approved mortgage can save both time and grief in the long run.

Realtor: While it’s possible to purchase a new home without the assistance of a realtor, there are several benefits – and no drawbacks – to having a real estate professional in your court. Realtors understand the market better than anyone else, and can provide terrific insights on neighbourhoods, investment values and negotiating with a builder. Best of all, there’s NO COST associated with hiring a realtor to purchase a home.

Real Estate Lawyer: This is an absolute must. A good lawyer will walk you through the paperwork, explain fees, and protect you from real estate fraud.

Home Inspector: Because new homes in Ontario are covered under the Tarion Warranty, and because a pre-delivery inspection with the builder is part of the new home buying process, many purchasers of new homes choose not to hire a home inspector. However, I often encourage my clients to spend the few hundred dollars it costs to ensure that their new home has been built to code.

Most homebuyers are smart cookies. But, in matters of love, the heart rules the head. That’s why, when it comes to buying a home, it pays to have professionals do some of the thinking for you.




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Give Yourself Credit: A Beginner’s Guide to Arranging a Mortgage

Over the years, I’ve worked with clients whose ease with numbers would make your head spin - from accountants to engineers. But, in my experience, such “mathletes” are far outnumbered by those of us who face financial calculations with apprehension.

Thank heaven for mortgage specialists. Whether you opt to go through a broker or your financial institution, a good specialist will guide you through the intricacies of choosing a mortgage with patience and know-how.


Remember that mortgage pre-approval is the way to go. This means visiting your specialist before shopping for a home, and obtaining a realistic budget to work from. Pre-approval also speeds up the purchasing process once you’ve found your perfect home.

In comparison with the early 80s, when mortgage rates surpassed 20%, today’s rates – which tend to hover below 4% – seem astonishingly low. But substantial savings can still be found by choosing certain mortgage features over others. Here are some of the most basic options you’ll encounter:

Term Length: A term is a set length of time, typically ranging from one to ten years, in which a certain mortgage rate applies. At the term’s end, you’ll renew your mortgage for another term. The shorter the term, the lower the interest rate; however, by choosing a longer term, you’re insuring yourself against the possibility of skyrocketing mortgage rates in the future.

Fixed rates, variable rates and capped rates: A fixed interest rate remains the same throughout the term, while a variable rate rises and falls along with prime rate. While the second option means accepting some unpredictability, it may yield greater savings than a fixed rate. A capped rate is a type of variable rate that cannot exceed a set upper limit. If interest rates are low but you’re facing a longer closing date, you may choose to be locked into a capped rate, which will apply once your mortgage payments begin.

Frequency of payments: Most lenders offer weekly, bi-weekly, semi-monthly or monthly payments. While, at first glance, the difference between bi-weekly payments (every other week) and semi-monthly (twice a month) may seem unimportant, it works out to two more payments per year. Ultimately, those extra installments could take a couple of years off the life of your mortgage.
Of course, there are many more mortgage features that your specialist can introduce to you. Trust me: by the end of the process, you’ll feel like a specialist yourself.

To receive a FREE copy of a new special report titled "Homebuyers: How to Save Thousands of Dollars When You Buy" email sales@bennettpros.com

Marnie Bennett is a broker and the marketing director for Bennett Property Shop Realty, a full premium service real estate brokerage specializing in marketing and selling new and resale homes, condominiums and investment real estate. Marnie is the host of the weekly radio show the Real Estate Hour, a millionaire real estate investor and a wealth management coach. bennettpros.com

Moving Tips For Moving with Children

If you have children, buying and moving to a new home in Ottawa it will undoubtedly become more complicated than moving as a couple or a single person

Moreover, moving can be a scary experience for children, especially if it means they will have to change schools or leave their friends behind. There are things you can do as a parent to make the entire process go smoothly and be less upsetting.

When to Tell Your Kids

The best time to let your children know about a possible move is as soon as possible. If you are still in the process of looking at Ottawa homes, you might want to bring the kids with you to view the houses. Letting kids see where their new bedrooms or play areas will be can lessen the anxiety that is often associated with a move. If the move means the children will go to a new school, you  might want to take them to see the school as soon as you can.

If you are moving to a new state or province and can't travel there with your children before the move, take the time to teach your child as much as you can about their new home. Look up the city or town online to learn about its history. Use the internet to find out about clubs and sports your child can participate in, in the new town.

Packing Up

Your children can help you pack up the old house. Set aside a time a week or so before the move to help your children pack their belongings. You can use this time to purge toys and objects your child no longer uses, but try to be respectful of his or her wishes. Moving is a stressful time for kids. Don't add to the stress by demanding that they get rid of all of their toys – as some may be memorable keep-sakes.

On Moving Day

How involved your kids are on moving day depends on their age. Older children and teenagers can help you load up the moving van and finish packing. Toddlers and very young children will probably just get in the way of the process. You might want to hire a babysitter to look after them as you pack up the van. A babysitter can be helpful after you've moved as well, to watch the kids while you unload the van.

After the Move

After you've moved to your new Ottawa home, try to get settled into your new home as quickly as you can. Unpack your kids' rooms first, so that they have a place to themselves. Get your children involved in your new community’s or school’s activities as soon as possible so that they can start making friends and building a new life.

Visit www.bennettpros.com for all your real estate needs.

How to Buy An Abandoned House

An abandoned house is a vacant property. The folks at The Bennett Property Shop Realty are experienced in how to go about buying an abandoned house in Ottawa. Abandoned houses are most often the result of the fact that the house’s former owners ran into financial difficulties and “lost” their property ownership to their mortgagor and the former owners have had to move out. Other abandoned houses are tied up in legal red-tape with one level of government or another. Abandoned properties are sometimes neglected and in need of repair; and they are also sometimes in the process of foreclosure. Banks often take over ownership of houses and leave them abandoned and unoccupied for a while.

Buying a Ottawa house is often a strategic investment because these properties usually have very low - and usually below-market - prices.

The steps to buying an abandoned house are:

1.     Preparing your finances.

2.     Researching the property.

3.     Making a realistic offer.

The begin with, you first want to make sure that you can actually afford to buy a new home. Although they are generally cheaper than Ottawa houses for sale in the normal re-sale marketplace, abandoned houses can still have large price tags. Unless you already have the cash, you will need to qualify for a mortgage.

Do Your Research

When looking around for an abandoned house to buy, you might want think about certain unoccupied or ill- or sporadically maintained houses that you drive by on a regular basis. If you do not have a particular house in mind, you can look in real-estate listings. However, if the owner is absent, or if a legal entanglement is involved or if a foreclosure is in process, there might not be any listings for that house. This is precisely when an Ottawa real-estate agent can help you find an abandoned house to buy.

Determining who the owner of the house often requires dedicated and well-informed research. Check county deed records if you do not already know the name of the owner of the property you are interested in. These records will also provide information on liens and whether all of the property’s land taxes are in arrears or up-to-date.

Once you learn who owns the property, have your agent contact the owner in order to make an offer on the abandoned house. Interestingly, owners of properties that are going through the foreclosure process are often surprised to find out that they still have rights to the property (especially if it has been abandoned for some time), if the foreclosure process has not been finalized yet.

If the house has already been foreclosed, talk to the bank or lender as they are the current owners of the property. This information will also be listed in the deed records. It is important to know that banks are well-known to delay foreclosures and to move slowly when it comes to selling an abandoned house.

Because abandoned houses often have many technical problems, make sure to have the target in appraised and inspected. These reports and estimates will give you a good idea of the home's value as well as its likely repair costs; and this information will greatly help you to determine how much to offer and what other conditions to put into your offer to purchase the house.

Make an Offer

Once you have done your research and planned your offering strategy, you are ready to make your offer to the owner or the lender. In formulating your offer, the experts at The Bennett Property Shop Realty remind you that you should always consider the additional costs - such as closing costs, fees, land transfer taxes and repair costs. As a basic starting-point strategy, you should bid lower than the value of the house as you can usually “up” your offer – but can rarely reduce your offer.

Once your offer is accepted, schedule a closing date, and begin preparing for renovations and moving into it or renting it out.

Visit www.bennettpros.com for all your real estate needs.

Steps to Take Before Buying a House in Ottawa

The Bennett Property Shop Realty understands that Ottawa home ownership is a big dream and a huge step for many people. Turning this dream into a fact or a reality requires a lot of dedication and effort and anyone who wants to realize it has to both financially and mentally commit to the project because buying a house requires one to spend a lot of time and energy both when hunting for that Ottawa home and afterwards when maintaining and managing it and paying off its mortgage.

Since the vast majority of home-buyers use the services of lenders, this article will assume that the reader will borrow some money to buy their home and explains what actions a buying borrower needs to do to better their borrowing success.

Strengthen Your Credit

The first step towards home ownership is to strengthen your credit. The better your credit, the better (i.e. the lower) the interest rate your will qualify for. Make sure to pay off your credit cards and settle up any credit delinquencies or disputes.   Even if you cannot pay off a card’s entire balance make sure that you pay the stated minimum payment by the due date indicated on your monthly statement.  Also, get a credit report so that you can evaluate it and understand what the lenders will be looking at and basing their lending decision on before you approach a lender for a loan.

Determine What You Can Afford

Figure out how much you can afford for a house and how much you will be able to borrow. Most people taking out loans for home ownership are expected to put down 10% to 20% of the appraised value of a home. For example, if you have $30,000, you can make a down-payment for a home that is worth $300,000 (with a 10% down-payment) or $150,000 (with a 20% down-payment).

You also want to calculate your projected housing expenses. Determine the average annual costs for insurance, natural gas or oil, electricity and real-estate taxes in your area. Add that to the price of the home you want to buy and also add how much you are estimated to pay in closing costs (lawyer fees and land transfer taxes etc.). You can either use an on-line mortgage calculator or make a spreadsheet to calculate the total. If you find that the total is above 28% of your gross annual income, then it is probably not a good time to get a mortgage.

Get Pre-approved

Now you are prepared to seek the actual amount of money that you will need to borrow for your new home. When you do apply to various lenders, submit all of these applications within the span of a two-week period so that your inquiries do not alter your credit report as repeated credit report requests (other than ones that you request for yourself; and obviously each possible lender  will request) have a negative effect upon your credit rating. So that you have a realistic idea of what money you will have and therefore what price range you can afford, make sure to do this before you get in touch with a real estate agent. If you do qualify for a loan, make sure to look at first-time buyers' programs - which usually have lower down-payment requirements. These are sometimes offered by various lenders and/or by various levels of governments.

Start House Shopping

To get a sense of all your options, make sure to check out as many Ottawa homes for sale and open houses and housing styles as possible.  Do not make any rash decisions. In order to help with this process, sign a buyer representation agreement with a well-known local real estate agent, they can then sign you up for the Multiple Listing Service (MLS), which is an “Alerting” service that helps you search for properties in your desired areas by letting you know when a property becomes available in an area in which you are considering buying.

Also, find a real-estate agent who is knowledgeable about your target area to represent you and work with you in your search process. Make sure to provide him or her with every “must have” or “Must not have” detail of the home you are seeking: such as the number of bedrooms, bathrooms, the size of the yard, whether you want a garage, the overall layout (bungalow, duplex, town-home, split-level), traffic and population densities, etc.

Scout out the area in which you would like to live by visiting it at different time of the day and week.  Check out its proximity to shopping, schools, public transportation, and other amenities that you want. Also take note of the amount and the speed of vehicular traffic, available parking, noise levels, and business and general activities in the area and whether the neighbourhood is being up-graded by new residents or its overall maintenance is drifting sideways or downwards. Once you have assessed all these factors, then you will be far better informed as to how much and what sort of house or in what neighbourhood you can afford and wish to make an offer to buy.

Visit www.bennettpros.com for all your real estate needs.

New vs. Used - The Difference is in the System

The first question you will ask yourself when you decide to buy a home is if you should buy a new house or an older one? When you are looking through Ottawa real estate properties, you are bound to get confused. One thought that you may think is that older homes are built better than newer ones. On the other hand, there are also many reasons that may incline you towards choosing a new home over an old one.

Better Built

One thing you should know is that new technology has helped improve the construction process as well as the building material used during construction. Canadian Building Standards have improved drastically over the years. Most new townhouses and detached houses include at least two full bathrooms on the upper storey and a powder room off the entrance hall. Improved kitchen standards and laundry areas have also made the new homes more convenient and acceptable.

The concept of central air-conditioning was not available for condos in the 1970s. Now, however, this has changed. Also, a home office is another essential room that is now available in many new homes that wasn’t available a few years back.

Less Maintenance Required

A new home won’t require much maintenance for at least the first 10 to 15 years. This is usually because the building material used is more advanced and long lasting. The presently used vinyl-clad window frames don’t require frequent repairs unlike older wooden frames. Nor do you have to worry about roof repairs with every change in weather. If you buy an old home, you will be worried about aluminum wiring and steel or lead plumbing. The brick front also adds to the durability of the new home.

Energy Efficient

Insulation standards have improved in all new homes and the furnaces installed are more energy efficient nowadays. Since 1993, basement insulation has become a common practice and the minimum ceiling heights have also been increased. The flimsy windows have been replaced with double-glazed casement windows that help keep the cold drafts out and the warmth trapped in. The new Energy Star Program has helped bring down monthly energy costs for home owners.

Tarion Warranty

This new warranty has provided an added protection for new home buyers. It helps with all repairs and corrections that are required during the initial years of the home.

All homes in Ottawa are required to meet safety standards and smoke detectors are to be wired in with the updated electric systems. Older homes will have to replace aluminum wiring, if it has not already been done by the previous home owner.

Amenities

The newer communities in Ottawa are designed to make sure that parks and playgrounds are within walking distance. Different environmental factors have also been considered during the planning of these communities. There are some builders who specialize in creating small communities where children can grow up without worry.

Even with all these advantages, you will still have to cater to the one most important fact before you buy a house – Location. You will find that most of the best locations in Ottawa already have communities built and the houses that are available are all resale. Therefore, check with your Ottawa real estate agent and find the best house for your family.

Visit www.bennettpros.com for all your real estate needs.

Mortgage FAQs

Once you find your dream home in Ottawa you will need to look at your different mortgage solutions

Mortgage solutions are provided by many bankers and mortgage brokers in Ottawa and other cities in Canada. Though there are many things you have to consider about mortgage payments, there are a few questions that are frequently asked by Canadians who are looking for a good mortgage plan and payment solution.

Why hire a mortgage broker when the Bank is there?

When you deal with a bank for the mortgage solution, you are bound by the list of products they have. It is possible that the list does not have the best solution for you. Also, banks have to think about their profit margin and will offer you the highest rate that is acceptable to you. A mortgage consultant on the other hand will have a list of lenders and mortgage products. You could potentially benefit from lower interest rates. However, if you are buying a new home or condo that is not built and you require a pre-approval letter, you must go through a bank, because a mortgage broker cannot guarantee the rate for long enough.

What fee charges are involved?

Typically there is no fee. The lenders who receive your mortgage application hand a certain amount of commission to mortgage consultants. If your application is not accepted because of job instability or bad credit, you are subjected to brokerage fee.

Do I have to wait for my mortgage to mature?

It is not a good idea to wait for that long. You should inform your mortgage consultant around 4 months before the time of maturity of your mortgage. During this time, the consultant can easily shop for other mortgage rates and your mortgage will be easily transferred if there is a possibility.

I recently heard of Mortgage Loan Insurance. What is it?

Mortgage loan insurance is required by law and is provided by three major companies in Canada: AIG Insurance, Genworth Financial Canada and Canada Mortgage and Housing Corporation (CMHC). Do not confuse this with mortgage life insurance. Here the lenders are ensured against default on mortgages with an 80% ratio of loan to value. Borrowers pay insurance premium between 0.5% and 3.7% which is directly added to the mortgage account.

What is a high-ratio mortgage and how is it different from conventional mortgage?

Conventional mortgage is the typical mortgage where the down payment is equal to 20% or more of the property’s purchase price and there is no mortgage insurance required for it.

High-ratio mortgages are where the down payment is less than 20% of the purchase price. You are required to attain mortgage loan insurance from one of the three companies that provide insurance. The borrower is allowed to purchase the house with a small amount of down payment and the lender is also protected with the loan insurance.

What form of down payment is acceptable?

If you have cash, then it is good. If, however, you do not have cash, you can use:

•             Accumulated savings

•             Sales proceeds that you gain from an existing house

•             Your Registered Retirement Savings Plans (RRSP). Up to $20,000 can be used for down payment and if it is repaid within 15 years it will not be subjected to income tax.

•             Investments that are not registered

•             Borrowings from an unsecured Line of Credit.

For more information contact your local real estate agent inOttawa today.

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