If it feels good, do it!

The average buyer has about ten items on their wish list when they look for a home or condo:

1. Price
2. Location
3. Number of Bedrooms
4. Number of Bathrooms
5. Amenities
7. Finishes
8. Layout
9. Style
10. And…..the X factor

Unless your budget is limitless, you will not find the “perfect” home.  While most buyers and agents focus on number one on the list as the starting point, it is usually number ten that seals the deal. Buying a home is largely an irrational act, and driven by an emotional connection to the property. So, to make the search easier, perhaps you should focus more on how you feel about the home and less about how it conforms to the other list of requirements.


Another Happy Client

“We began our journey to home ownership with a basic idea of what we wanted to purchase; a centrally located condo.  We had a fairly tight budget of approximately 300k but felt optimistic. Tyler showed us a few units and we then became a little worried about finding something that best suited our needs but was also within budget.  After some discussion, we then realized that we did not have a clue what we wanted.  With patience, Tyler took us to visit a wide variety of homes; those centrally located that required some updates and some new homes in the suburbs.  Nothing really spoke out.  After all those visits and us giving our feedback, Tyler knew just the place for us. 

We visited the model and thought it was too good to be true.  We had to be sure and therefore actually returned to the model half a dozen times.  We were finally convinced it would be the perfect “starter” home for us.  It has the storage we need, the lifestyle of condo living without the fees and is centrally located.

Tyler was patient, flexible, respectful and his knowledge about the market trends, neighbourhoods was refreshing.  He made this somewhat overwhelming process easy and stress free.  We would definitely use Tyler again.”

Jeff Duffy and Vittoria De Caria

Don’t Pay Another Cent to Your Landlord in Rent…

The problem that most renters face isn’t your ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down payment on something more permanent.

But saving for this lump sum doesn’t have to be as difficult as you might think. Consider the following 6 important points:

1. You can buy a home with much less down than you think

There are some local or federal government programs (

as 1st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. Ensure your real estate agent is informed and knowledgeable in this important area and can offer programs to help you with your options.

2. You may be able to get your lender to help you with your down payment and closing costs

Even if you do not have enough cash for a down payment, if you are debt free, and own an asset free and clear (such as a car for example), your lending institution may be able to lend you the down payment for your home by securing it against this asset.

3. You may be able to find a seller to help you buy and finance your home

Some sellers may be willing to hold a second mortgage for you as a seller take-back. In this case, the seller becomes your lending institution. Instead of paying this seller a lump sum full amount for his or her home, you would pay monthly mortgage installments.

4. You may be able to create a cash down payment without actually going into debt

By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a down payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.

5. You can buy a home even if you have problems with your credit rating

If you can come up with more than the minimum down payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation.

6. You can, and should, get pre-approved for a home loan before you go looking for a home

Pre-approval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written pre-approval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for. Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. Typically there is no cost or obligation to enquire.

There are many important issues you should be aware of that affect you as a renter. Why on earth would you continue to lose thousands by throwing it away on rent when with your agent you could take a few minutes to discuss your specific needs so that you can stop renting and start owning.

This conversation costs you nothing. And, of course, you shouldn’t have to feel obligated to buy a home at the time you review this. But by taking the time to explore your options, and learn about the ways you can afford to buy a home, think how prepared and relaxed you’ll be when you are ready to make this important step.

Free Advice!

Maybe there is such a thing as a free lunch after all.  Working with me to buy a home is absolutely free, I actually get compensated by the individual selling their home.  If the seller agent, for example, has agreed to sell a home for 5%, they will in turn pay me, the co-operating buyer agent, 2.5%.  The same is true when buying a new construction home.  Most builders in the city will also pay out  a commission to Realtors who bring their clients into the sales centre.

There is also a misconception in the market place, that when working with an agent your options are limited as to what they can show you.  This couldn’t be further from the truth.  My team, the Bennett Real Estate Professionals, has access to all for sale by owner homes, bank foreclosures, all new home sites (not to mention a very thorough understanding of new construction homes) and of course the very best homes to hit the market as they hit the market.

So what does this mean for you?   You can work with me, have access to every single home out there on the market and it is absolutely free.  If you are thinking about purchasing a home, and would like a complete list of homes that fit your criteria, please give me a call or send me an email.  I am never too busy for my friends.

How Much Can You Afford?

When you start thinking about buying your first home, one question that comes to mind is “how much can I afford?”  The following calculations will help you determine this amount. Of course, this is just an example and you should always get a mortgage pre-approval from a qualified lender. 

Gross Debt Service (GDS) Ratio – Your total monthly housing costs, including Principal, Interest, property Taxes, Heating (P.I.T.H.), and 50% of applicable condominium fees, shouldn’t represent more than 32% of your gross household income.

Total Debt Service (TDS) Ratio – The total debt load shouldn’t be more than 40% of your gross household income. The TDS is your P.I.T.H. + 50% of condominium fees (if applicable) + payments on all other debt (including but not limited to car loans, credit cards, lines of credit, student loans) / gross annual household income.

Let’s say that you have a household income of $60,000 a year, and you are looking to buy a condo.  We’ll assume that you are a first time home buyer and have the minimum 5% down, condo fees are $200/month, heating will cost you roughly $100/month with equal billing (your heating bill spread out equally over the entire year), your monthly tax bill will be $258 (based on the Ottawa Tax Estimator) and you have a 5 year variable mortgage at a rate of 3% (most banks are offering a rate of 2.85%).  Let’s find out how much you can you afford.

Step 1 – Calculating GDS

We must first find out our maximum monthly payment.

i)Monthly Income

$60,000 (annual gross income) / 12 = $5000.00

ii) Monthly GDS

$5000.00 x 0.32 = $1600

Therefore, the maximum we can contribute monthly to the mortgage principal and interest, property tax and heat is $1600.00.

Step 2 – Find Maximum Monthly Mortgage Payment

i) $1600 (GDS) – $100 (50% of condo fee) – $100 (heat) – $258 (tax) = $1142.00

Step 3 – What Will $1142.00 Get You?

This calculation is tricky so I will just tell you.  The cost of carrying a $237,500 mortgage at 3% is $1124, $18.00 under our calculated GDS.  However, we also have the additional 5% down payment required.

$250,000 (Purchase Price) x 0.05 = $12,500 (Down Payment)

Therefore, under the circumstances in this example the buyer’s maximum budget would be $250,000.  This budget would increase if he or she purchases a home with out condo fees.

$237,500 (Mortgage Amount) + $12,500 (Down Payment) = $250,000

When it comes to calculating the TDS, no two situations are exactly the same.  Use the equation above to find out if you also satisfy the criteria for the TDS Ratio.  For a list of preferred lenders drop me a line at tyler@bennettpros.com or feel to give me a call.

First-Time Homebuyer Tax Credit

The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes, can be a particular burden for first-time homebuyers who must pay these costs, as well as save money for a down payment. To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home. For an eligible individual, the credit will provide up to $750 in federal tax relief.  For more information click here.

Decisions, Decisions

For most of us, desciding that you are going to buy your first home is probably the biggest decision you have had to make up to his point, and with thousands of homes on the market at any given time how do you even begin to choose one.  Imagine going into a shoe store where there are thousands of options.  There are different sizes, styles, and price points and not only can you only choose one pair, but you will have to wear that one pair everyday for say, five years.  You will also have to deal with other people who also want what you want and at any given time your perfect shoe could hit the shelves, but be scooped up by somebody else because you weren’t given the heads up.   Oh and one more thing,  the longer you wait, the more expesive those shoes become.  So why not give me a call. I can help you every step of the way and we may even have a little fun.