- Increasing the minimum down payment from 5%
- Shortening the maximum amortization prior from 25 years (possibly to 20 years)
- Limiting mortgage insurance for high-priced home.
Higher Down Payments
The Canadian Association of Accredited Mortgage Professionals (CAAMP) recently did a survey of those Canadians who had purchase a home during 2013 up to May 2015. I n the report titled "A Profile of Home-Buying in Canada they asked :
Fortunately 62% of all buyers (380,000) definitely would have been able to make the purchase and a further 20% (125,000 buyers) probably would have been able to make the purchase.
Table 1: Impact on Ability to Purchase Current Home if Minimum Down Payment was 10%
|1st Time Buyer||2nd Time Buyer||
|Probably Not Able||50,000||10,000||15,000||80,000|
|Definitely Not Able||25,000||5,000||5,000||35,000|
Source: Survey by Bond Brand Loyalty for CAAMP; analysis by the author.
The results of the survey suggest the an increase in the minimum required down payment from 5% would have drastic consequences for the housing market and would negatively impact the broader economy.
- Staying in my home is critical to the quality of my retirement lifestyle.
- The idea of renting instead of owning a home bothers me.
- My income consistently falls short of ongoing expenses.
- I expect my retirement savings to run out within the next few years.
- I am comfortable with using the value of my house to fund retirement.
If you have reached age 55, you may be eligible for CHIP. It lets you convert up to 50 per cent of the equity in your home into tax-free cash.
Here are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment five to six times what they cost.
Flooring is one of the most important aspects of your house. You will see an immediate rise in property valuation with the installation of hardwood floors. Existing hardwood floors that you can refinish are ideal as they are less costly to restore and in higher demand than new flooring materials. For the bathroom, tile will always be in demand and retain value exceptionally well.
Kitchens often look tired and dated, in large part due to old fixtures. Replacing or updating cabinet hardware, light fixtures, countertops and faucets will result in an immediate increase in your home’s value. This small, but effective upgrade will also revitalize the entire home. Pot lights are in high demand in open concept style homes.
The bathroom is the second most important room in the home in terms of valuation. If you can add a three-piece bathroom to a home with only one full bathroom, you will see a dramatic rise in the market value of your home. While you should never compromise bedroom space for a bathroom, try sneaking one in dead space in the home. Scott managed to fit in a three piece bathroom under a staircase – the width of the room measured just 44 inches. As an added tip, use glass for the shower to make the bathroom feel more spacious.
Kitchens are the single most important room in the home relating to valuation. The kitchen can make a significant difference in the value of your home. As such, it is crucial that you invest in having a modern, fresh and desirable kitchen. Modern cabinetry, under cabinet lighting and new appliances will all significantly increase the value of your home on the market. To save on cost without compromising construction and desirability, look at options like Ikea cabinets as opposed to custom cabinetry.
#1 An Income Suite
No surprise, but the single biggest way to increase the value of your home is to build an income suite within the property. Whether this is converting your basement into a rental, or another floor in the home, an income property will increase your home’s worth. The main reason for this is that it covers a portion, or sometimes all of your mortgage payments, and results in your home being cash flow positive – which creates real wealth that can supplement your income.
If you would like to talk to us about refinacing your home to take advantage of these value enhancing improvements please call (250) 862 1806 or email [email protected].
Dreaming of a new fire pit? A deep soaker tub?
With summer on its way, lots of families have renovations on their minds. Did you know that home buyers can apply for a Purchase Plus Improvement Mortgage and get access to funds for renovations?
If you or a family member are looking to buy a home but are allocating all your savings for the down payment, here is a way to access more funds to do the renovations that will make that purchase into the perfect home.
Ask me about getting a Purchase Plus Improvement Mortgage.
This mortgage product allows you to borrow up to an extra $40,000 or more. At today’s low interest rates, this is a great way to finance your renovations.
This mortgage product could be perfect if you are interested in buying a fixer upper in your perfect, but pricier neighbourhood.
To find out if you or a friend or family member qualifies for a Purchase Plus Improvement mortgage product, contact me directly (250 862 1806 or [email protected]) and I’d be happy to assist you.
Read more Home Finance articles
- Mortgage costs Jun 8
- Cash stressed seniors May 25
- Mortgage penalties May 11
- Buy versus rent Apr 27
- Reverse mortgage solution Apr 13
- Down payment Mar 30
- Pre-approved for mortgage? Mar 16
- Refinance your mortgage? Mar 2
- What will Bank of Canada do next? Feb 16
- Expect record low rates for spring Feb 2
- Beware of mortgage insurance! Jan 19
- Goal setting keeps resolutions on track Jan 5
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