Home Renovations

Home Renovations

Financing Home Renovations

The first three months of the year are the busiest time for planning home renovations. If your spring renovation plans involve larger projects, it can pay to refinance your mortgage, which allows you to get the very best borrowing rates by using the equity in your home.

A mortgage refinance will allow you to spread your payments over a longer period of time than with a line of credit. You may also be able to consolidate a range of higher interest borrowings (credit cards and car payments, for example) at the time of your mortgage refinancing. We can look carefully at your financing needs and advise on how best to secure additional mortgage funding.

If you take the time now to establish a clear idea of the improvements to your home and how you will pay for them, you could be putting those plans into action by the time warmer weather finally arrives. Ideally, a well-planned renovation can boost both your enjoyment of your home and its equity.

Invis

Trouble signs are there: Hot market finally slowing down

Real estate chill; Trouble signs are there: Hot market finally slowing down
The Toronto Sun
Fri 22 Feb 2008

Blame Mayor David Miller's municipal land transfer tax. Blame one of the harshest winters on record. Blame skyrocketing property taxes. Blame a high dollar and gouging energy costs which are killing Ontario's golden goose.

And blame bonehead politicians who believe anyone who scrimps and saves to buy a home is fair game for higher taxes.

Here it comes: Finally, signs our hot real estate market that's been rockin' and rollin' since 1997 is slowing down.

In its latest report released yesterday, real estate giant Re/Max -- Ontario/Atlantic Canada, describes the last decade as one of the best ever with sales up 57% since 1997 to more than half a million sales last year, as more Canadians bought into the dream of home ownership.

PRICES ALMOST DOUBLED

Across the country, average prices almost doubled rising from $154,606 in 1997 to $307,265 in 2007. That's a decent 7.1% annual return on investment, even though there were some tumultuous events, like the high-tech meltdown, 9/11, SARS, mad cow disease and a blackout.

Returns were especially sweet out West, where record oil prices sparked a gusher of economic growth. Edmonton led the country with a whopping 203% spike in average home prices.

Calgary's prices were up 188.9%. And in Vancouver, home to the highest prices in the country, values were up 98.8%.

Even the GTA saw incredible growth, with prices up 78.1% to $376,236.

According to the Toronto Real Estate Board (TREB), price gains continue this year, with an average GTA home at $385,735 by mid February, up 7% from a year ago. And in the City of Toronto, they're up 11% year over year to $434,657.

HARDEST HIT

But, cracks are showing with GTA sales down 14% to 3,240 homes changing hands in the first two weeks of February, compared to a year ago.

Hit hardest was the City of Toronto, where Miller's hated municipal land transfer tax kicked in Feb. 1 and where sales plunged 18% to only 1,066 homes sold. Meanwhile, in the 905 suburbs, where there is no municipal land transfer tax, sales were off by only 11%.

TREB president Maureen O'Neill blames a brutally harsh winter for a slump in sales and inventory.

"If you can't get buyers out to your open house, then you are less inclined to list. And fewer listings means less appealing products for the potential homebuyers. It's a compound effect," she said.

O'Neill is still predicting a strong spring market based on strong economic fundamentals. Re/Max is also optimistic predicting "healthy activity" across the country, even though the pace will moderate.

But yesterday, economists at Scotiabank downgraded Ontario's outlook warning we'll only see 1.4% growth in 2008, while Canada's economy shrinks to 1.9% growth, down from 2.6% in 2007.

But again, it's best out West with 3% growth.

A GREAT DECADE

Here's how average prices increased in housing markets from 1997 to 2007:

CITY - 1997 PRICE - 2007 PRICE - % CHANGE

VANCOUVER - $287,094 - $570,795 - 98.8%
VICTORIA - $218,398 - $466,974 - 113.8%
KELOWNA - $178,525 - $497,322 - 178.6%
CALGARY - $143,305 - $414,066 - 188.9%
EDMONTON - $111,587 - $338,636 - 203.5%
SASKATOON - $98,270 - $232,754 - 136.9%
WINNIPEG - $86,040 - $187,456 - 117.9%
BARRIE - $140,569 - $258,999 - 84.3%
TORONTO GTA - $211,307 - $376,236 - 78.1%
HAMILTON-BURLINGTON - $151,538 - $268,857 - 77.4%
LONDON-ST. THOMAS - $131,382 - $202,908 - 54.4%
KITCHENER-WATERLOO - $141,387 - $252,429 - 78.5%
SUDBURY - $108,521 - $182,536 - 68.2%
KINGSTON - $124,123 - $222,300 - 79.1%
OTTAWA-CARLETON - $143,866 - $277,058 - 92.6%
HALIFAX-DARTMOUTH - $109,827 - $216,339 - 97.0%
PRINCE EDWARD ISLAND - $86,403 - $133,457 - 54.5%
ST. JOHN'S - $92,226 - $149,258 - 61.8%
SAINT JOHN - $86,171 - $140,544 - 63.1%

NATIONAL - $154,606 - $307,265 - 98.7%

SOURCE: CREA, local boards and RE/MAX

New mortgages allow more immigrants to buy real estate

Changing the rules; New mortgages allow more immigrants to buy real estate
The Ottawa Sun
Fri 22 Feb 2008

Immigration is nothing new to Canada, with 250,000 immigrants arriving in this country every year. And with so many arriving, it should come as no surprise that 20% of the Canadian population is now foreign-born, according to Statistics Canada.

It should also come as no surprise that increasingly, immigrants are making their numbers felt in the housing market as they get settled and make the transition from renter to home owner.

Invis, Canada's largest mortgage brokerage firm, says that the influence of immigrants on real estate markets across the country will grow in the decades to come as the Canadian population ages and more newcomers arrive in this country.

However, there are home-ownership hurdles faced by immigrants that Canadian-born residents don't encounter.

"While many new immigrants to Canada would like to join in the investment advantages and pride of home ownership, they often face barriers when buying a home," says Invis' Jim Rawson. "One of the biggest challenges for new immigrants is establishing credit because they often don't have a financial history in Canada."

Rawson points out that without a credit history, it can be a struggle to get mortgage financing from traditional financial institutions. A 2007 study on the home-buying experiences of immigrants suggested that 91% of new immigrants said buying a home was important, yet nearly 75% of respondents felt the lack of credit history was a barrier.

A second home-ownership hurdle is that many financial institutions have traditionally insisted that new immigrants provide a downpayment of between 25% and 35%.

However, this is starting to change as more and more lenders in Canada begin to offer mortgages tailored to the needs of new immigrants, including those with non-landed status. These mortgages feature looser rules regarding proof of credit history and a much lower downpayment requirement -- up to 100% financing is available in some cases.

These mortgage product changes will help fuel the real estate sector, especially since many immigrants settle in Canada's larger -- and expensive -- cities.

Rawson adds that immigrants should shop around and get expert advice.

"It is important that newcomers know their options and explore mortgage choices before jumping into home ownership."