Technology is evolving every day, making our daily life more efficient and enjoyable. Switching on lights, setting thermostats, operating locks, and even your fridge controls are just one voice command or a click away, thanks to “smart upgrades.” Today, installation of automated devices plays a key part in contemporary homes. However, the benefits go beyond convenience and safety. Like any renovation or upgrade, a smart home has the potential to sell faster, with the possibility of a higher price. Keeping all these benefits in mind, investing in smart gadgets may pay off.

5 Smart Upgrades to Improve Your Home and Life

Since it is raining innovations in the home technology market, you might be confused about where to begin. Here’s a quick guide on which smart upgrades to consider adding to your home.

Smart Thermostats

Scorching summer days are on their way, and nothing can serve you better than a smart thermostat device. You can crank up the AC on your way back home from work, conserving energy while you’re away. A smart thermostat will perform admirably through an app to control the system from anywhere you want. Returning from work to a nicely cooled home after the daily hustle-bustle will put a smile on your face every day.

You can also pre-program the device to keep the temperature as comfortable as you prefer. Many of these state-of-the-art thermostats can also sense if somebody is home or away to modify the temperature controls accordingly, saving you money on your monthly utility bills.

Security Cameras

Home security is now safer, more flexible, and less expensive, thanks to innovative home technology. Today, a range of security cameras with various features is available, including motion sensors, smart doorbells, and window monitors. These security cameras offer comprehensive protection to houses of any size and are easy to install.

Modern smart security cameras stay alert round the clock, sending homeowners instant notifications about suspicious activities. Moreover, no hard drive storage is required; these devices record and store images directly on the cloud.

Smart Lighting

Lighting plays a crucial role in a property of any size. Whether living in a condo or a detached home, you need an appropriate lighting fixture in every room. But with a transition to smart lights, you can see a massive change in your home’s lighting system. Forget to switch off the light in the kitchen? No need to rush back! One-click “all-off” feature will do the job for you.

These lights also come with a personalization feature, allowing you to adjust the lighting based on your requirements and mood. Moreover, the installation of smart lights is not limited to interiors. You can even use them on patios, gardens, pool decks, or driveways. This cutting-edge technology will adapt to any setting smoothly.

Touch-Free Faucets

If sustainable living is your goal, touchless faucets can help you achieve this goal. As the name suggests, you can open the tap without touching it. Simply place your hands near the faucet spout, and water will begin to flow.

Automatic faucets use sensors to operate, which saves you from needing to open and close the tap for water. You’ll use less water while shaving or brushing your teeth. You’ll also avoid sharing and picking up germs by touching fewer communal surfaces.

Smart Cooking

Make your kitchen life easier and more streamlined by switching to smart cooking appliances. You can smoothly monitor these advanced kitchen gadgets from your mobile device while sitting on your couch. There are many ways to automate your regular kitchen chores, from smart refrigerators, microwaves, and coffee makers to the sensor trash can and garbage disposal.

Control your coffee maker from your phone or talk to your microwave, all for real! Your meal prep will be less labour intensive once you connect smart kitchen appliances to your home Wi-Fi. As a bonus, these appliances can help you to reduce your energy costs, so enjoy a stress-free and connected cooking lifestyle.

The Bottom Line…

Home automation is here to stay. To manage your life more seamlessly, consider upgrading to a connected home. Installing these simple but smart gadgets will boost the convenience and functionality of your place, while boosting your property value potential.

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Is the performance of the Canadian real estate market based on fundamentals or speculation? And what about local markets, such as Peterborough real estate?

Before the COVID-19 public health crisis, many financial experts argued that the housing market was in a bubble, consumed by too much speculation in the major urban centres, from the single-detached homes in downtown Toronto to the condominiums in downtown Vancouver. But while the pre-pandemic housing boom was concentrated in only a few pockets of the Canadian real estate market, the COVID-era increase happened nationwide.

Whether in suburban or rural communities, prices are up significantly, leading to an affordability crisis throughout the nation (although recent data suggests they may be starting to cool). Of course, some markets are more overvalued than others, including Peterborough real estate.

This municipality located north of Toronto has witnessed exceptional gains over the last couple of years, as more people enjoyed the freedom to work remotely, allowing households to relocate to cheaper parts of the province, and different provinces entirely. But is Peterborough really the most overvalued market in Canada?

Moody’s Analytics recently published its fourth-quarter assessment of housing price valuations in Canada. Peterborough was at the top of the list of most overvalued housing markets, coming in at 107.8 per cent. The next city on the list was St. Catharines-Niagara, at 106.9 per cent.

This has first-time homebuyers priced out of the market, especially local buyers. The average annual household income in Peterborough is about $70,000, which means they would be approved for a mortgage of roughly $300,000. But since the average home is on par with the national average, too many prospective homebuyers are still stuck waiting to achieve the dream of home ownership.

Study authors note that housing market investors have taken over the Peterborough landscape, doubling in the last couple of years. Housing experts note that real estate investment trusts (REITs) have contributed to the overvaluation of residential properties. Blind bidding, speculation and low interest rates have been the other factors contributing to Peterborough’s ascent.

But can Peterborough continue posting remarkable gains? The April statistics point to the same types of developments as other parts of Canada, from sliding home sales to climbing home prices.

Peterborough Real Estate – The Most Overvalued Housing Market in the Country

The latest data from the Kawarthas Association of REALTORS® Inc. show that residential property sales plunged at an annualized rate of 34.3 per cent in May, with 222 homes sold. In the first four months of 2022, home sales slumped 18 per cent year-over-year, totalling 975 units.

Historically, sales have been down as well, sitting 7.2 per cent below the five-year average, and 17.7 per cent below the decade average for this time of the year.

Prices are the key in the Peterborough real estate market. Association data highlight that the MLS® Home Price Index (HPI) for a single-family home advanced 27.4 per cent year-over-year to $793,800. The average price of homes sold in May 2022 jumped by nearly 19.8 per cent to $836,843.

“Sales activity was down in May from last year’s near-record level, a trend that we’re seeing play out almost everywhere in Southern Ontario,” said Kate Kidd, President of the Peterborough and the Kawarthas Association of REALTORS® Inc. “New listings are beginning to return to the market, which is lifting overall inventories from their historically low levels. However, it’s going to take more than a few months of stronger supply to have any meaningful impact on the market balance in the long term.”

Indeed, the Peterborough housing market saw the new number of residential listings increase by 8.4 per cent in May, to 425 new units. For the month of May, this is 11 per cent above the five-year average but three per cent below the decade average.

Active residential listings rose 44.3 per cent to 339 units. On a historical level, active listings were 18.8 per cent below the five-year average and more than almost 50 per cent below the 10-year average.

Months of inventory were 1.5 at the end of May, up from 0.7 months from the same time a year ago. This is a commonly used measurement since it takes into account the number of months it would take to exhaust current stockpiles at the present rate of sales activity.

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The average sales price for a home in the Canadian real estate market is around $740,000. Even when Toronto and Vancouver are removed from the equation, house prices are still more than $600,000. But believe it or not, there are still some places where you can buy a home for under $200,000.

When the down payment, land transfer taxes, and the plethora of closing costs added to the mix to high housing prices, it can be challenging for the typical household to afford to purchase a single-family house, townhome or even a condominium unit.

Is the Canadian dream of home ownership dead in the water? Not exactly, because there are still many residential properties available that are selling for below $200,000. Sure, you may not be looking at buying a home in the heart of a big city for this price, but ownership is still doable in this heated housing environment.

So, where can you buy a home for under $200,000 anyway? You may need to open your eyes to one of the world’s most beautiful countries, and expand your search beyond southwestern Ontario and British Columbia.

Here is a list of 10 places where you can buy a home for less than $200,000.

10 Places Where You Can Buy a Home for Under $200,000

#1 Airdrie, Alberta

The Alberta real estate market is heating up, with many pockets of the province witnessing notable price gains and sizeable sales activity. But while it might seem challenging to acquire a home in the revived provincial economy, prospective homebuyers can find opportunities in Alberta that are under $200,000.

#2 Fort McMurray, Alberta

You can add Fort McMurray as another Alberta municipality that can offer affordable housing options, be it a detached house or an apartment-style unit. There are many available homes for sale that are priced under $200,000.

#3 Saskatoon, Saskatchewan

Surprisingly, multiple residential properties are listed for $200,000 or less in Saskatoon. Despite turning into a red-hot housing market in the Prairies and enjoying considerable growth, not everyone is being left out in the cold, with homes selling for less than $200,000.

#4 Winnipeg, Manitoba

The Winnipeg real estate market has been booming. At the same time, housing experts agree that growth has not been as immense as its major counterparts, suggesting that it can withstand the era of higher interest rates. Indeed, there are multiple areas in Winnipeg where you can scoop up a home for less than $200,000.

#5 Sault Ste. Marie, Ontario

Is the Ontario real estate market a lost cause for the many households wishing to acquire affordable property? Places such as Sault Ste. Marie have plenty of homes in the under-$200,000 range.

#6 Amherst, Nova Scotia

Atlantic Canada has and continues to be one of the top housing markets in the entire country. Prices are surging, while sales activity is strong. But do not let these trends fool you: You can find homes throughout the eastern province that will cost you less than $200,000.

#7 Newfoundland and Labrador

Newfoundland and Labrador has been home to some of Canada’s most affordable real estate, including New Hartford. In this area, you can buy a small property or even a mobile home and enjoy all the benefits of living in the province.

#8 Fenwick, Nova Scotia

Indeed, many homes here for sale will cost the buyer less than $200,000. This is far from what you would expect in major urban centres or even small towns in Ontario. But Fenwick has various residential properties for sale below the $200,000 mark.

#9 Truro, Nova Scotia

Life outside the main city centre of Halifax in the delightful province of Nova Scotia has attracted many buyers from near and far. Indeed, the eastern seaboard is developing as officials try to take advantage of the housing boom on the east coast. The smaller towns of Nova Scotia make it easy to enjoy the fruits of home ownership at an affordable price.

#10 Regina, Saskatchewan

Can you find a home for less than $200,000 in the capital of Saskatchewan? Yes. Of course, it might not be a palace in Regina, but living close to the city and spending less than $200,000 on a home is an attractive prospect.

National or Regional Affordability Crisis?

Last year, some housing experts posited that Canada was not going through a national housing affordability crisis but rather a regional one. This could be a compelling argument after combing through multiple municipalities throughout the Canadian real estate market. It takes some due diligence and some additional research with your real estate agent. And, remember, be realistic in your hunt for a $200,000 home because it may not always be found in the downtown core of Toronto. Instead, explore other part of Canada where you may enjoy a long list of benefits not found in any major urban centre.

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Traditionally, cottage country had been an ecosystem of affordable recreational properties for both middle- and high-income families. Households would purchase a cabin in the woods, or a waterfront home to visit throughout the year and enjoy the sights and sounds of nature and a quieter pace. In the aftermath of the first wave of the coronavirus pandemic, many Canadians transitioned to a work-from-home environment, no longer confined to the office landscape from Monday to Friday, 9 a.m. to 5 p.m., prompting a shift in many Canadian real estate markets. Many people thought this trend would be the new normal on a permanent basis, prompting them to leave big cities and relocate to suburban or rural communities and in many cases, different provinces.

With solid equity levels in their pockets and historically low interest rates, many made the move to small towns and scoop up the lower-priced properties. This became the new trend in cottage country, so many sellers took advantage to sell at a higher price. As a result, nearly every segment of the Canadian real estate market enjoyed a boom, from detached houses to condominiums to cottages.

But while last year’s red-hot housing sector left many prospective homebuyers sitting on the sidelines, there is ostensibly a slowdown forming, presenting homebuyers with an opportunity to get into the market. And yes, this may include cottages.

So, is the cottage market slowing down? If so, why? Let’s explore.

Last Year’s Sizzling Cottage Market is Showing Signs of Slowing Down: Here’s Why

The sizzling Canadian real estate market might be showing signs of cooling off as interest rates begin to accelerate.

The Bank of Canada (BoC) is moving to fight inflation by hiking interest rates. This, of course, could result in a number of scenarios, such as a hard landing for the Canadian economy, a decline in the stock market, or a drop in the housing sector.

Indeed, as the nation’s benchmark interest rate creeps up, fixed- and variable-rate mortgages will respond. Economists argue that this will lead to a decline in sales and prices – just by how much remains to be seen. And recreational properties are already showing signs of decelerating in this rising-rate economy.

Muskoka is a premier cottage hotspot in the Canadian housing market. So, many industry observers look to this small Ontario town to determine the trajectory of the broader cottage market.

According to The Lakelands Association of REALTORS®, residential non-waterfront sales activity tumbled 34 per cent in April from the same time a year ago, totalling 530 units. Waterfront sales also fell nearly 59 per cent year-over-year to 104 units.

Supply levels are still at historical lows, which means that if we see a continued moderation in sales activity, there is ample room for the market to absorb a welcome increase in available listings,” said Chuck Murney, the President of the Lakelands Association of Realtors, in a statement. “Prices are still trending near all-time highs but have begun to show signs of topping out.”

But experts purport prices are unlikely to return to pre-pandemic levels. Waterfront properties in Muskoka have skyrocketed at an annualized pace of 26.4 per cent to more than $1.2 million. Non-waterfront median prices jumped more than 17 per cent to $750,000.

Suffice it to say, according to housing market analysts, a considerable number of cottage owners are unlikely to list their properties, choosing to hold onto them instead.

That said, there is an issue that might be considered: the return to the office.

Since more companies are reopening their doors and requiring employees to return to the office, people will need to head back to the city unless they wish to restart their daily four-hour commutes. If this is the case, they might need to ditch their beautiful chalets and cabins in favour of an urban dwelling.

Bubble Talk

Is this evidence that the Canadian real estate market was entrenched in a pandemic-induced housing bubble? Before the COVID-19 public health crisis, immense speculation existed that a bubble had been brewing in key cities. Today, this bubble discussion has spread nationwide – including to Cottage Country.

Bubble or no bubble, it may be necessary to rebalance these strong seller’s market conditions. Moreover, when 64 per cent of Ontario’s cottage country, such as Haliburton, South Georgian Bay and the Kawarthas, are considered overvalued, the situation must be rectified.

Wait a minute. Sixty-four per cent? This figure was presented by the Bank of Montreal (BMO) in a new report that assessed sharp over-valuations, although broader trends indicate gains have been diminishing in a broad array of asset classes.

Froth is coming out of home prices, just as it is across a number of other asset classes that were boosted by excessively stimulative policy,” said BMO Senior Economist Robert Kavcic in a research note. “While a much cooler housing market will weigh on economic growth, we believe that this will be largely an asset-price phenomenon, with underlying fundamentals eventually setting a floor, and the financial system well protected.

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Are the effects of the Bank of Canada’s (BoC) tightening cycle being felt in the Canadian real estate market?

For at least two years and probably longer than that, the nation’s housing market has been sizzling, with nearly every pocket of the country experiencing soaring prices and impressive sales activity. The laws of supply and demand have been in full force since the beginning of the coronavirus pandemic – inventory is low and demand has been strong – but historically low interest rates have also played a significant role.

When rates are low, prospective homeowners can take advantage of monetary conditions to increase their purchasing power and outcompete other buyers who may be interested in the same property. Now that rates are on the path to normalization, the same activity level will be challenging to emulate.

Is the central bank dousing the sizzling housing boom? The data suggest that higher rates are easing buying trends in many parts of the Canadian real estate market.

What Just Happened to the Canadian Real Estate Market?

According to the Canadian Real Estate Association (CREA), national home sales tumbled 12.6 per cent month-over-month in April. Although the number of transactions was 25.7 per cent below the last year’s record-breaking April, this represented the third-best April on record, sitting behind 2021 and 2016.

In April, the national average home price advanced at an annualized pace of 7.4 per cent, climbing to $746,000. Also, on a month-over-month basis, the Aggregate Composite MLS® Home Price Index (HPI) slid 0.6 per cent. This was the first monthly drop since April 2020.

Inventory levels experienced a tepid monthly dip as many housing markets attempted to rebalance. On a month-over-month basis, new residential listings fell 2.2 per cent, CREA data highlight.

In addition, the number of months of inventory, which gauges the amount of time it would take to exhaust current supply levels at the present rate of sales activity, measured at 2.2 months. This historically low figure was also below the long-term average of five months for this time of the year.

After 12 years of ‘higher interest rates are just around the corner,’ here they are,” said Shaun Cathcart, CREA’s Senior Economist, in a news release. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year because that is already being factored into fixed mortgage rates.”

Cathcart added that the major market reaction is because the discounted five-year fixed rates have risen from three per cent to about four per cent in just one month. In addition, the stress test has increased from 5.25 per cent to roughly six per cent in just one month.

It won’t take much more movement by the Bank of Canada for this to start to affect the variable space as well,” the economist added.

The positive development in the Canadian real estate market, at least from the perspective of homebuyers, is that with declining demand, greater supply could coming to the market.

According to Canada Mortgage and Housing Corporation (CMHC), housing starts advanced eight per cent month-over-month in April, totalling 267,330 units. Put simply, new housing construction activity is on the rise.

On a trend and monthly SAAR basis, the level of housing starts activity in Canada remains historically high, hovering well above 200,000 units since June 2020 and increased from March to April,” said Bob Dugan, CMHC’s Chief Economist, in a news release. “The increase in monthly SAAR housing starts in Canada’s urban areas was driven by higher multi-unit and single-detached starts in April. Among Montreal, Toronto and Vancouver, Toronto was the only market to post a decrease in total SAAR starts, which was driven by lower multi-unit and single-detached starts.”

Looking Ahead to 2023

With inflation running hotter than many economists expected, the BoC and its central bank counterparts could turn more hawkish this year and heading into 2023. Rising interest rates in an effort to tamp down inflation could also impact Canadians’ ability to purchase a home, which could hit average home prices.

Still, prices remain close to 30 per cent higher than in December 2019. Plus, with greater levels of immigration happening in the coming years and the industry still experiencing a shortage of housing supply, the situation could be “fairly manageable,” says Jimmy Jean, chief economist and strategist for Desjardins.

Housing is an investment normally you make for the long-term,” Jean said in the report. “Ultimately, you’re buying a product to raise a family, to live into. So, over the long term, things will stabilize and pick up again. So, it’s not a major concern from that perspective.

There could be a consequence of higher prices: Homeowners unable to afford their homes. A recent Manulife survey revealed that about one-quarter of homeowners would need to sell their residential properties if rates go up even more.

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When purchasing a home, one of the first steps is finding out just how much mortgage you can afford. The mortgage amount is determined on several factors, such as how much debt you carry, what your income level and if you pass the mortgage stress test. Prospective buyers often consult with a number of lenders to find the best mortgage rate available. This is where mortgage brokers come in. There are many benefits of using the services of a mortgage broker, including that the buyer doesn’t receive a bill for this service. So, how do mortgage brokers get paid?

What is a Mortgage Broker?

A mortgage broker is an intermediary who links borrowers to potential lenders to assist the borrowers in obtaining the best possible mortgage terms. One of the main reasons borrowers use mortgage brokers is because the broker will do most of the work during the application process, saving the borrower both time and money.

The Role of a Mortgage Broker

While working to help a client obtain a mortgage, a mortgage broker will gather loan options from various lenders and then present these to the potential borrower. At the same time, the mortgage broker will submit the borrower’s profile to each lender. The broker will need proof of income, assets, employment documentation, a credit report and other documents to secure the best mortgage rate. This gives the lender the information to properly assess how much risk the potential borrower carries, allowing each lender to give their best quote to the broker.

Upon analyzing the borrower’s profile, the broker will determine an appropriate loan amount and submit all the information to each lender for approval. Throughout this process, the mortgage broker is the middleman who communicates with both the lender and the borrower until closing.

Mortgage brokers can be found through the referral of a real estate agent, an online search, or by asking friends and family for a recommendation. When considering a mortgage broker, the borrower needs to play the field and look at all options before settling on a broker, as this relationship is an essential piece in the home-buying process.

How Do Mortgage Brokers Get Paid?

So now that you know what a mortgage broker is and why they are helpful, you probably wonder how they get paid. The first thing to understand is that a mortgage broker is not an employee of a bank or another lender, and therefore, they are not salaried – they work entirely on commission or a finder’s fee. This finder’s fee comes out of the lender’s pocket that the borrower chooses to do business with, costing the borrower nothing.

Mortgage brokers will secure a deal with a lender on the buyer’s behalf, and then the lender will pay the broker a commission for securing the deal. This fee is a one-time payment, although there are times that a broker will receive an additional amount should the borrower renew their mortgage at the end of the term. From the lender’s perspective, this extra payment is for security purposes. Upon renewal time, the broker can persuade the borrower to switch lenders to find a better rate (and obtain another commission). However, by offering a commission at renewal, lenders can reduce the risk of losing the borrower – this also benefits the borrower as they won’t incur any switching costs associated with transferring to a new lender.

In other instances, the mortgage broker may receive a recurring payment after the borrower takes on the mortgage – this is known as a trailer. Essentially, the commission paid upfront to the broker will be less, but the broker will receive a regular, steadier income.

Usually, because mortgage brokers charge the lender, there is no cost to the borrower for their services. However, there are some unique circumstances where there is an upfront fee called a lender fee or application fee, which will either cover part of the broker’s commission or go to the lender for administrative costs.

When working with a mortgage broker, it is essential to shop around for one who fits your profile the best. Often, recommendations from real estate professionals are ideal as they are attuned to the market and the industry and can steer you in the direction of a broker who best suits you and your specific needs.

 

Sources:

Wealth Track Investopedia Money Sense .fusion-body .fusion-builder-column-5{width:100% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-5 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:1024px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-6{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}

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When first thinking about renovating our homes, we often get lost in daydreams and fantasies of new bathrooms, kitchens, walk-in closets, and a whole host of other great renovation ideas. Eventually, though, we come back to reality and the daunting thought of the cost associated with renovations. So, how do home renovations work? Let’s dig in.

Home renovations can run anywhere from a few hundred dollars up to hundreds of thousands of dollars, and there are many different ways to pay for them. While inexpensive upgrades such as new light fixtures, countertops and windows can be paid for using either a line of credit or a savings account, large reconstruction projects take far more time and money, often requiring home renovation loans to cover the cost.

How do Home Renovation Loans Work?

There are several different ways to finance your major home renovations. For starters, you could opt for what is called cash-out mortgage refinancing. This is where you refinance your existing mortgage for more than what you currently owe. For example, if you owe $250,000 on your mortgage, you could refinance for $400,000. This would leave you with $150,000 to put toward renovations.

The amount of money you can access using this option depends on how much equity you have in the home – this is the difference between the value of your home and the amount you owe on your mortgage. Typically, the amount of money you can free up is positively correlated to how long you have owned your home. You will usually be able to refinance to about 80 per cent of the home’s value. In the example above, your home would need to be worth $500,000 or more in today’s market.

This option is advantageous because it will carry a lower interest rate and you’re using an asset you already have in order to pay for your renovations. The other benefit is that you are leveraging the current value of the home to further increase its value through the renovations.

A second option is a home improvement loan. Making home improvements is one of the quickest ways to add to your home’s value, while also increasing your enjoyment of it.

Home improvement loans are ideal because lenders can customize your loan, including your repayment plan, with an affordable interest rate. This is based on the borrower demonstrating that they can repay the loan and that their home carries a value worth funding.

Another name for a home improvement loan is a renovation mortgage. With renovation mortgage financing, some of the funds will go toward paying for the home or the balance on your existing mortgage, and the rest can be allocated towards making improvements to your home. Sometimes lenders will add specific instructions to these loan agreements. For example, you may be required to have a construction company on-hand to immediately receive the funds from the bank – this is done to ensure that the funds are used for their intended purpose.

When applying for one of these loans or mortgages, it is ideal to have your renovations planned out and have contractors and materials ready to go upon approval. This demonstrates to the lender that you will be using the funds appropriately.

Lenders will examine your employment history to ensure that you have a steady income and present a low risk of defaulting on your loan. Your debt-to-income ratio will also be taken into account; this is the amount of debt you carry in relation to the income you make each month.

Other Factors to Consider

When looking to get a mortgage renovation loan or a home improvement loan, there are a few factors that come into play. The first is how much money you require. The second is the amount of time it will take you to repay the loan. The third is the interest rate. The greater the number associated with any of these factors, the more you will spend paying back the loan. This makes each of them a key aspect to consider when comparing the full cost of the renovations versus your home’s increased value once they are completed.

As with any loan, it is important to remember that interest starts accruing from the day the renovation funds get deposited to your bank account, whether you use them to cover your renovation costs or not. Therefore, it is prudent to have everything pre-planned and coordinated, to allow you to begin as soon as you receive the funds.

Before making any financial decisions, consult with a professional to hear about all the available options that you qualify for and to make sure you are matched with a loan that adequately covers your needs.

Sources:

CMHC Loans Canada Manulife Bank .fusion-body .fusion-builder-column-6{width:100% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-6 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:1024px) {.fusion-body .fusion-builder-column-6{width:100% !important;order : 0;}.fusion-builder-column-6 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-6{width:100% !important;order : 0;}.fusion-builder-column-6 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-7{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}

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When housing markets begin to cool after record highs, some homebuyers get cold feet. Imagine you buy a home for $1.2 million. When it comes time to close after you have signed your purchase agreement, you notice a comparable home down the street sells for $855,000. What happens when a buyer backs out of a real estate deal?

Some homebuyers choose to walk away when it comes to closing day, despite agreeing to purchase the property. Another common scenario occurs when a homebuyer backs out after overbidding in a hot market and going over budget. Once it comes time to close, the bank completes an appraisal and refuses the entire mortgage amount. The homebuyers need to come up with hundreds of thousands of dollars to close. They walk away because they don’t have the money, despite signing an agreement to purchase.

No matter the scenario, walking away at closing after you sign a purchase agreement can have significant legal and financial consequences.

When you back out of the deal, it will cost you. You instantly forfeit the deposit you submitted with your offer. You are also at risk of being sued by the seller for money they have lost on the sale of their home. Understanding the purchase agreement and adding conditions to protect you from unforeseen circumstances is essential.

Understanding your Agreement of Purchase and Sale

An Agreement of Purchase and Sale is a firm and binding deal that allows the buyer and seller to proceed with the sale. It outlines the terms and conditions of your home purchase. As a legal agreement, backing out comes with serious consequences.

Once the buyer and seller sign a purchase agreement, it becomes legally binding. Typically, the buyer provides a deposit between one and three per cent of the purchase price to show the seller that they will honour their agreement and complete the purchase. Backing out of the deal after signing the contract and paying the deposit means you do not get that money back.

Are there legal ways to back out of a real estate deal?

There are a few legal ways to back out of a deal. The first is if the sale was conditional and the conditions were not met. It could result from a significant issue in the home inspection, a low appraisal, or the inability of the buyer to sell their current home. Regardless of the reason, the deal dies automatically if the conditions are not fulfilled.

Additionally, an agreement could become null and void for reasons outside the contract’s conditions. Common issues that can end a deal are a lien on the home, substantial damage to the property before closing, or if the buyer can prove that the seller knowingly misrepresented the property in a significant way (however, misrepresentation can be hard to prove in court).

The risks of backing out of a deal at closing

Buyer’s remorse is not part of real estate. Once the buyer and seller have signed the purchase agreement and the conditions have been satisfied, both parties must abide by the contract. There is typically not much leeway to cancel a real estate purchase.

Sellers may feel that they overpaid, or their financial circumstances have changed, but those reasons may not justify the potential consequences of walking away.

If the buyer walks away, they may forfeit their deposit and could be sued by the seller for loss in the value of their property on resale.

If the seller eventually sells their home for a lower price, they may sue for the difference in price. Let’s say there was an agreement to purchase the house for $850,000. The closing day comes, and the buyers back out. The home then goes back on the market. The best offer is $700,000. The home buyers that backed out on closing day now must make up the money the sellers lost. In this case, that is $150,000.

This nightmare scenario has played out. In Gamoff v. Hu, the buyers lost their $30,000 deposit, and they were ordered by the Ontario Superior Court of Justice to pay $470,000 in the lost value after they backed out.

You may also be responsible for the seller’s legal fees, mortgage carrying costs, and any other losses the seller suffered.

How to avoid the risks of backing out at closing?

With the help of legal representation, there are a few things that you can do to protect yourself from these circumstances. Consult with your lawyer before signing an Agreement of Purchase and Sale to determine if there are terms to add that will protect you, as the buyer.

Setting the right contingencies within the contract is the best way to protect yourself from some of the most common issues home buyers encounter.

With a low inventory and rising competition for homes across Canada, it may be tempting to waive any conditions, especially when competing against multiple offers. Discuss the situation with your lawyer, consult a financial advisor and consider getting a mortgage pre-approval, to help ensure that you add the right conditions to your Agreement of Purchase and Sale before signing on the dotted line.

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Soaring home prices across Canada can be worrying to some real estate investors. However, while places like Toronto and Vancouver have reported record highs, many markets in Alberta have risen more moderately. Here are some of the best places to buy real estate in Alberta, if you’re in the market.

6 best places to buy real estate in Alberta in 2022:

1. Leduc – Situated just south of Alberta’s capital city of Edmonton, Leduc boasts the highest population growth in Alberta at 2.4 per cent between 2011 and 2016. The Nisku Business Park has many employment opportunities that create a stable economy, mainly in the agriculture industry.

Real estate prices in Leduc have risen at a slower rate than in other places in Canada, with the average currently hovering around $406,000. Since Edmonton’s average real estate prices are generally about $50,000 higher, Leduc is a very desirable city for real estate buyers.

2. Calgary – If you want to live in a large city, then Calgary is a place to consider. It had a population of 1.4 million in 2021 and ranked among the fastest-growing cities in Canada. Calgary comes second only to Toronto in the concentration of headquarter offices in the country and has a stunning skyscraper line to show for it. The city also has a fantastic cultural scene, including its own NHL team and the world-famous Calgary Stampede that is hosted here each summer.

Real estate sales in Calgary have jumped by a large margin throughout the past two years, yet the average house price has not seen the same jump that has occurred in other parts of Canada, up 4.6 per cent year-over-year. As a result, urban real estate buyers have an excellent opportunity to make an affordable purchase in Calgary.

3. Red Deer – The corridor between Edmonton and Calgary is densely populated and full of cities and towns that are affordable to live in. Red Deer is the largest city in central Alberta and became the third Alberta city to surpass 100,000 residents in 2016. The nearby cities of Lacombe and Camrose and the town of Sylvan Lake are also very desirable locations. 

Real estate prices in Red Deer and its neighbouring communities sit well below the provincial average, currently hovering at $315,000. Red Deer was also the only large community in the province to see a decline in average price going into January 2022. This could be a great time for first-time homebuyers looking to get into the Red Deer real estate market.

4. Canmore – Canmore lies west of Calgary, bordering Banff National Park. Its desirable location and beautiful scenery make it a great place to set down roots and start a family, and property developers are working to meet demand.

Canmore is the only Rocky Mountain resort town that welcomes private real estate investments, so it is a great location for buyers looking for a property close to the mountains. The average house price is higher than most other locations in the province, but the proximity to the mountains and the neighbouring city of Calgary is worth it.

5. Medicine Hat – Canada’s sunniest city of Medicine Hat is located in southeast Alberta near the Saskatchewan border. There are plenty of parks and walking trails, and the Canadian Badlands and Cypress Hills lie just over an hour away for pleasant day trips with the family.

Medicine Hat ranks among the best places to buy real estate in Alberta because of its peaceful setting. The low home prices there have always been a draw for first-time home buyers and real estate investors alike, going down to a median price of $310,000 over the first quarter of 2022.

6. Lloydminster – Lloydminster is a unique city in Alberta because it lies on the Saskatchewan border, with about half of the city on each side. However, the city operates with a single municipal administration. Residents are drawn in by the rural feel with the convenience of city amenities.

Real estate in Lloydminster has remained virtually unchanged while prices soar elsewhere in Canada. The average price is currently $332,000, down less than a percent from last year. Houses here generally take a little bit longer than elsewhere to sell, averaging 30 to 40 days, giving homebueyrs and property investors extra time to examine properties they might have their eye on.

The most populated province in Canada’s prairies is full of cities and towns that are desirable for real estate investors. Buying a good home in Alberta at an affordable price is possible with the right information and help from the right real estate agent.

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If you’re considering buying a cottage in Canada and have been watching the market, you already know this market segment has seen a surge in competition between buyers over the last decade. In recent years, cabins and cottages have been in high demand, as interest in renting out personal properties for extra income has become more accessible through various online platforms.

While purchasing a cottage as a recreational property or even as a year-round home can be an excellent investment in both the short and long term, there are some important factors to consider during your hunt for the perfect getaway home. Below we break down five important factors to consider when purchasing a recreational property

5 Factors to Consider When Buying a Cottage

Year-Round Maintenance Requirements

Before purchasing your getaway home, it is crucial to have a thorough evaluation to ensure the home is weather-proofed for the summer and winter months. When considering year-round maintenance, key considerations include checking out the age of the roof, doors and windows. You’ll also want to confirm the level of insulation, including under the floors.

Cottage roofs typically undergo a lot of strain in the winter months as snow, ice and other debris accumulate over time. In addition, the age of the doors and windows is important because you don’t want to have any cracks or openings where animals or the elements can enter the cottage. If you aren’t planning on visiting your cottage to complete regular maintenance during the winter, having the roof, doors and windows in good condition can save you money and work come springtime.

In addition to the actual structural requirements, it is essential to familiarize yourself with the local by-laws for winter snow removal. Some regions have rules that state a pathway must always be cleared during the winter months. After reading up on the local by-laws, it might be worth the investment to find someone to check in on your cottage and clear away any snow, ice, or debris in your offseason should you live a far distance away.

Plumbing

Piggybacking on the year-round maintenance requirements is being aware of the type of plumbing the cottage has – or even if it has plumbing at all! When looking at cottages for sale, make a list of important amenities, such as having indoor plumbing. Many cottages don’t have indoor plumbing, equipped only with an outhouse. In addition, many properties in recreational markets run on a septic system which requires a different amount of maintenance, care and attention year-round.

Ease of Access

A cottage can be a great investment; however, location does play a significant role in whether it may generate rental income, as well as the times of year you visit your vacation home. A property that is only accessible by water will probably just be used as a summer home – and in this case, you’ll need to consider the price of purchasing a boat when buying a cottage located on an island.

Some properties in very rural areas may be accessible by car but might not have winter access as many backcountry roads are not maintained in the winter months.

Also, location when it comes to distance from amenities is important to consider. Many cottages are in very rural parts of the country, meaning the drive to a grocery store or gas station could be significant.

Before investing in a secondary residence, ease of access and location regarding other amenities are key factors to consider.

Rental Potential and Rules Surrounding Renting

Cottage homes can be an excellent investment if you also choose to use them to produce rental income. When purchasing a cottage as a rental property, key amenities are the number of bedrooms and bathrooms, ease of access, and location.

Suppose the idea of renting is your main driving force behind buying a recreational property. In that case, it is strongly advised that you review the rules and regulations regarding renting out seasonal property and learn your way around the different web platforms available for renting, such as Airbnb.

Taxes and Capital Gains

A cottage is known as a personal-use property, which means there are different tax implications. If the property is used solely as personal recreational property, there are other tax rules than if you decide to rent out your cottage. In addition, upon sale of the cottage, you will be responsible for paying taxes on any capital gain of the property.

Before making any significant financial decision and purchasing a property, it is essential to consider both your financial situation and your needs and wants in the property. Reaching out to a professional for advice is always a wise first step!

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