Windsor Real Estate Blog

Opportunity is knocking for those considering homeownership for the first time. Historically low interest rates, lower home prices in most markets and the Canadian first-time homebuyer tax credits – have brought first-timers to the market in droves throughout the year.

On top of the programs which allow first time homebuyers to withdrawl up to $25,000 from their RRSP and non-payment of the firsat $2000.00 in Land Transfer Tax we are also experiencing historically low interest rates which make now the perfrct time to buy a home in Windsor Ontario Canada. Visit your #1 source for Windsor Real Estate. We are here to help.

Today’s opportunities aside, here are eight time-honored reasons why those considering homeownership for the first time should make their move.
1. Pride of Ownership
Owning your own home adds to your own sense of self-esteem and personal pride. The satisfaction that comes from feeling connected to the land you occupy and the home in which you live is ages-old.

2. Security of Tenancy
With homeownership comes stability. When renting, you never know when you may have to move because of new ownership, rent increases or other changes. As a homeowner, you decide when and if you want to move.

3. Privacy
While there are usually some limits on the access landlords have to property, almost all landlords can access your property for necessary inspections and maintenance. For many renters, this lack of privacy is a significant discomfort. Homeowners on the other hand generally have much stronger property rights and experience an increase in perceived and actual privacy.

4. Decorating
Homeowners are free to decorate, remodel and accessorize a home any way they want. Not only do you have the right to make improvements, but the value of those improvements becomes yours as well. Having your living space and exteriors just the way you want them can significantly increase your satisfaction with your living environment.

5. Financial Predictability
When you buy a home with a fixed-rate mortgage, you have more predictability over future housing costs. Because your interest rate never changes, the amount of your payment never changes. Financial planning and credit are more easily managed with a fixed-rate mortgage compared to renting.

6. Building Equity
When you own your own home, you pay rent to yourself instead of a landlord. Most homeowners pay for their purchase by obtaining a mortgage. As you pay off that mortgage, your equity builds and you gain an increasingly larger share in a valuable asset. Over time, that asset can work for you in many ways, such as home equity lines of credit. And of course, a home is a wonderful asset to pass along in an estate.

7. Investment Appreciation
There are certainly no guarantees of property value appreciation. In the long-term, however, real estate valuations almost always increase. This means that when you decide to sell your home, its value may be significantly higher than when you purchased it. The difference in value is called appreciation. You can reinvest that appreciation in other real estate or you may wish to downsize and keep the value of that appreciation for retirement or other purposes. Windsor Ontario is the most affordable place to live in all of Canada and we can help you find your dream home at historically low prices. Visit Windsor Real Estate for more information

8. Tax Benefits
In Canada, the cost of home mortgage interest and property taxes can be tax-deductible. Depending on your circumstances, thousands of dollars in taxes can be saved each year. Some additional benefits are designed specifically for first-time homebuyers which include using your RRSP and associated deductions to contribute to your first home purchase and provide you with a sizable tax deduction. Call me anytime at (519) 817-5588 or visit windsor real estate and I can help you to get the most out of your first home purchase.

If you have any doubts, contact the #1 source for Windsor real estate. I can answer any questions you may have about homeownership and explain the buying process to you. I am here to help.

This week was yet another reminder that the Canadian resale housing market is driving the economic recovery in Canada. In particular, residential investment has been one above average growth to boot. The strength in residential construction has been supported by renovation activity – as homebuyers renovate their new purchases, and sellers attempt to add value to their homes before putting them on the
market. Homebuilders have begun to responded favourablyto strong housing demand, and in December housing starts rose for a third consecutive month – rising 5.9% from month ago levels. At 174,000 units, housing starts are now up 47% from the trough in April 2009. The strength in starts suggests new homebuilding likely grew in the range of 15-20% in the last quarter of 2009 alone.
While the impact of housing demand on economic growth has been favourable, the strength in home prices has gained the attention of policy markers for a different reason. Canadian existing home prices have been heated, growing close to 20% Y/Y in Q4 2009. Not only have home prices retraced the losses that occurred over the very short-lived correction early last year, but they are now well above pre-recession (and historical) peaks. Policy markers have noted that they are not currently worried about the level of
home prices, and this is just one mechanism through which monetary policy is working to help support the economic recovery. But if this momentum continues, it may signal that a bubble is indeed forming.
What would the Bank of Canada do in the event that a “housing bubble” does develop? Probably nothing. This
week, we heard a speech prepared by Timothy Lane, Deputy Governor of the Bank of Canada in which he reinforced the belief that central banks remain weary of using monetary policy to curb a bubble in the housing market, because it could curtail economic growth in the process. This is because
excluding housing related goods and services, other areas of the economy remain weak and require support from monetary stimulus. For instance, non-residential building permits were down 22% in November, indicating
yet another contraction in non-residential investment in the fourth quarter of 2009. Furthermore, import data suggest that following a strong positive third quarter, investment in quarter of the year.
Meanwhile, international trade data out this week underscore the belief that the export sector will continue to face drop in real terms in November, exports are currently on track for a second consecutive double digit quarterly gain in Q4 2009. But over much of the second half of 2009, restocking, and increased demand for autos from the American Cash for Clunkers program – both effects which are expected to be temporary. Indeed, sharp declines in foreign demand for industrial goods and materials, machinery and equipment, and automotive products in November suggest that the inventory restocking process is already slowinig.
Moving into 2010, the export sector still has to contend with a strong Canadian currency.
The loonie is slowly creeping towards parity – and this week breeched the 97 U.S. cent level. If the Bank of Canada were to react to the housing market, and move earlier and more aggressively with interest rate hikes, it would risk pushing the loonie up sharply, putting more pressure on the
already struggling export sector. Instead, if a housing bubble does form, there are other tools at hand. For instance, federal government authorities would introduce regulation, such as
controls on leverage ratios, higher minimum down payment requirements, shorter maximum mortgage amortization periods, or other tighter terms and conditions for mortgage
insurance, to help temper demand for housing. And the federal government has hinted that it would be willing to introduce these regulations, if need be.

So what does all this mean to the home buyer standing on the sidelines. Mortgage rates are at historic lows with 5 year fixed rate mortgages available at 3.75% and variable rate mortgages as low as 2.25%. With the Canadain Government likely to use regulatory measures to cool down the housing market it could cost you more money to purchase a home in the form of larger downpayment requirements. It could also push those with less than perfect credit and slighltly higher debt loads out of the market. I can help you find the perfect home in Windsor Ontario before it’s too late. Visit the #1 source for Windsor real estate. We are here to help!

With interest rates at an all-time low, many Canadians are taking advantage of the savings by refinancing their mortgages to consolidate debt, make home renovations, invest in real estate or other ventures, or moving up the property ladder.
Following are ways to take even further advantage of this excellent rate environment by paying down your mortgage faster.
Tip #1
Prepay early in the mortgage
Make extra payments as early as you can after getting a mortgage because the loans are interest-heavy upfront and the faster you pay down your principal, the more interest savings you will accumulate over the long run. Within the first five to seven years of your mortgage is where the largest portions of interest payments are contained. This not only will save you thousands of dollars in interest payments, but it will also increase the speed at which you are accumulating equity in your property. Many mortgage products allow you to make up to 20% more in payments per year.
Tip #2
Make an annual lump sum payment
Whether you use your tax refund, receive an inheritance or get a Christmas bonus, you should apply as much as possible directly to your principal. Most lenders allow you to pay 20% in lump sum payments per year without penalty.
Tip #3
If your payments go down, don’t lower the payment amount
If you are on a variable-rate mortgage and the rates go down your payment will also often go down. Instead of making the lower mortgage payments, however, it’s best to call your lender and let them know that you would like to continue making payments for the original amount. This will help you pay down your principal faster.
Tip #4
Round up your payments even if it’s just a little
If your monthly mortgage payment is $776.22 and you were to round up your payment an extra $23.78 a month to $800 – that’s less than a dollar a day – you would effectively reduce your mortgage amortization from 35 years to just over 32 years right away or from 25 years to just over 23 years.
TIP #5
Increase your payments with your pay increases
If your income increases, try not to keep your mortgage payments the same. Although the disposable income is a joy to spend on unnecessary luxuries in the short-term, the long-term benefits of being mortgage free faster and saving those interest payments will far outweigh the short-term joys. Pretend that your income did not increase and maintain the lifestyle that you are currently living.
Tip #6
Increase the frequency of your payments
You can also change the way you make your payments by opting for accelerated bi-weekly mortgage payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. Basically, with accelerated bi-weekly mortgage payments, you’re making one additional monthly payment per year.
As always, if you have any questions about real estate or mortgage financing look to the #1 source for windsor real estate, I am here to help!

Transitioning from renter to homeowner is one of the biggest decisions you’ll make throughout your lifetime. It can also be a stressful experience if you don’t plan ahead by building a budget and saving prior to embarking upon homeownership.
Budgeting is a core ingredient that helps alleviate the stress associated with money issues that can sometimes arise if you purchase a home without knowing all of the associated costs – including down payment, closing expenses, ongoing maintenance, taxes and utilities.
The trouble is, many first-time homeowners fail to carefully think about their finances, plan a budget or set savings aside. And in this society of instant gratification, money problems can quickly escalate.
The key is to create a realistic budget based on your goals. Track your spending and make your dollars go further by sticking to your budget once it’s in place. Budgeting offers a step-by-step formula for figuring out how to best save your hard-earned money to invest in homeownership.
Start by listing your household income, then your household expenses, and review your spending habits. All of this can be done on a pad of paper or on a computer spreadsheet.
Keeping receipts for everything that you purchase will enable you to accurately keep track of where your money is going each month so that you can review and make necessary changes to your plan on an ongoing basis.
Examine all areas of your life from entertainment to the type of food you buy, where you buy your food and clothes, and how and where you travel. Also look at your spending personality and make necessary adjustments. Are you a saver, a splurger, a spontaneous shopper or a hoarder? Become smarter with your money and avoid impulse buying.
If you find you’re spending a lot of money in one area, such as entertainment for instance, set aside a reasonable amount each month and prepare to stop spending money in this area once your budget has been exhausted.
Budgeting provides you with the opportunity to re-evaluate your needs and wants. Do you really need the magazine subscriptions, the gym membership and all the other things you may spend money on each month? Although everyone needs some “me time” to wind down, could you not get that by taking a walk or reading a good book you borrowed from the library?
If you can set your budget solidly in place before you head out home or mortgage shopping, you will be far more prepared to purchase your first home.
Following are three top tips to help you prepare for the purchase of your first home:
1. Set up a savings account. You can deposit a predetermined amount into this account each pay period that you will not touch unless it’s absolutely necessary. This will enable you to put money aside for a down payment and cover closing costs, as well as address ongoing homeownership expenses such as maintenance, taxes and utilities.
2. Save up for big-ticket items. As you accumulate money in your savings account, you will be able to also save for specific purchases to help furnish your home – avoiding the buy now, pay later mentality, which can have a negative impact on your credit when you’re seeking mortgage financing.
3. Surround yourself with a team of professionals. When you’re getting ready to make your first home purchase, enlist my services as a licensed mortgage professional and find a trusted real estate agent. Experts are invaluable to you as you set out on the road to homeownership because we help first-time buyers through the home purchase and financing processes every day. Experts can answer all of your questions and set your mind at ease. I have access to multiple lenders who can help you get pre-approved for a mortgage so you know exactly what you can afford to spend on a home before you head out house hunting and as a real estate agent I will be able to match your needs with a house you can afford. And, best of all, these services are typically free. Experts will also be able to refer you to other reputable professionals you may need for your home purchase, including a real estate lawyer and home appraiser.

For more helpful real estate tips and ideas visit Windsors #1 source for real estate.

You have bought a house, bank financed, they immediately ask you if you want “mortgage insurance”. Reluctant to leave an unpaid debt when you die, you say yes. Within minutes, your application is approved and the cost is added to your mortgage payments. This product is sold by bank personnel who have limited training, and who would be unlikely to identify possible underwriting concerns. If you say no they make you sign a waiver form agreeing not to hold the lender responsible if something happens to you. For lenders, life insurance is an easy sell. They suggest it at a time when you most vulnerable and when you cannot do any comparison shopping. Most people don’t realize that the life insurance issued by mortgage lenders is different than life insurance purchased and from life insurance agents and brokers.

What is mortgage life insurance?
Mortgage life insurance, also known as mortgage insurance or creditor insurance, is offered by most banks and lending institutions. It is a life insurance policy that pays the balance of your mortgage to the lending institution if a person listed on the mortgage dies. The original application will be underwritten and reviewed to prove the applicant qualifies for insurance when a claim is made.

What is Broker/Agent issued life insurance?
Real Life insurance policies are issued by broker/agents. They have a level death benefit and level premiums for a pre-determined period of time. All of these policies are underwritten at the time of application and hard copies of polices are issued directly to the insured from the insurance companies. Most term life insurance policies provide an opportunity to convert to a permanent plan without providing medical evidence of insurability.

How much life insurance does a person actually need?
Life insurance should be purchased to replace the financial value of the person who died. It should be related to income and not just debt. There is no correct answer. Everyone has their own assessment of needs and objectives.

I Would like to highlight six key areas which I feel make life insurance sold by agents far superior to mortgage insurance offered by traditional financial institutions.

1.Underwriting – Insurance applications issued through life insurance agents are reviewed (or underwritten) at inception. Conversely mortgage insurance is only reviewed at the time of a potential claim (post claim underwriting of medical evidence).
2.Rate classes – Mortgage insurance is a one size-fits all product based on age alone. For example smokers and non smokers are lumped into one single category. Typically individual term life insurance policy premiums will be cheaper for a majority of people compared to mortgage insurance.
3.Level premiums and level death benefits- Both forms of insurance have level costs for a predetermined period of time. Individual life insurance policies have level death benefits for the term of the policy whereas mortgage insurance benefits decease over time as your mortgage balance decreases.
4.Portability – Individual life insurance polices are issued directly to the applicant from the insurance company. Mortgage insurance is offered through the financial institution providing the mortgage. Clients may have to reapply and qualify medically when they decide to change financial institutions at renewal.
5.Expiry – Mortgage insurance polices end when your mortgage is fully discharged. Term life insurance can be converted to a permanent plan without providing additional proof of insurability.
6.Beneficiaries – With an individual insurance policy you name the beneficiary. The financial institution is automatically the beneficiary with mortgage insurance. Individual life insurance policies provide flexibility as your loved ones can decide what to do with the proceeds of a life insurance policy.

These topics are reiterated in a professional video from CBC marketplace. Marketplace aired a piece on the difference between fully underwritten life insurance and mortgage insurance which highlights the six points above.

You can see the article and video at:
www.cbc.ca/marketplace/2008/02/06/in_denial/

My company makes the insurance experience easy and convenient for customers. Canadian Term Insurance (CTI) has created an online web portal which provides resources for individuals to:

1.Complete a needs analysis which assists them in determining their specific insurance needs.
2.Explore product offerings and research terms with an extensive insurance glossary.
3.Download a copy of a fact finder which will guides people through a process of data gathering and assists them in organizing information.
4.Review the 13 insurance companies that we represent ensuring an unbiased opinion by CTI.
5.Most importantly they can run an online quote which analyses 35+ insurance companies in Canada based upon particular client parameters entered and returns the results in a report based upon price.

Canadian Term Insurance can be found at: www.canadianterm.com

Article courtesy of Jeffrey B. Comiskey, MBA

#128 – 4500 Blakie Road
London, ON N6L 1G5
Tel: 519-473-4549
Fax: 519-652-1627
Toll Free: 1-866-943-4549
Email: jeffcomiskey@canadianterm.com
www.canadianterm.com

The basic strategy is to ensure that the interest you pay on your mortgage becomes tax deductible.

The tax deductible mortgage is the norm in the United States but there is now a way for Canadians to convert their mortgage interest into tax deductible interest.

Mortgage payments are made up of two components: principal and interest. By re-borrowing what you pay down on the principal of your mortgage and investing that portion into a non registered portfolio, you will create an annual tax deduction that will produce a tax refund. When you apply that refund towards your mortgage each year, you will decrease your mortgage amortization and build an investment portfolio for your retirement at the same time.

Visit Windsor real estate for more hints and tips to save you money.