Home Buying and Selling

Pre-Construction Condos

Pre-Construction Condos

Are Pre-Construction Condos a Good Idea?

The question a lot of you might be asking yourself is, are they a good idea? That can be a hard question to answer, since it’s so based on the individual. It’s been reported that the condo market is “on fire” and this is especially true within the major urban centres. The condo market has recently had a turnaround since the hight of the pandemic. 

According to some experts, this year might end up being a record-breaking year for condo sales. These experts also point out that if you’re living in Toronto or Vancouver you’ll notice “a crane on every corner.” This is very true to what it feels like downtown Burlington at the moment and the surrounding areas. 

It would seem that more and more people are looking at pre-construction condos. This is partly due to the fact that when you’re buying this type of property, you’re often offered perks and discounts. But what are the pros and cons to pre-construction? Recently, REMAX Canada created a list and we’re going to go over some of their points. 

Pros To Buying Pre-Construction  

When it comes to pre-construction condos there are lots of pros and cons. This can be true with anything in life, and it can be an important step when making the choice to make a major decision. 

One major pro to purchasing this type of property is the down payment. Coming up with the 20 per cent you need for a condo can be daunting for some people. But with pre-construction you can make pay it off over a four year period. 

Another really great point REMAX makes is that there are no bidding wars with pre-construction. “Because many units are available for purchase before the project starts, you do not need to engage in cutthroat bidding wars that add obscene premiums to the asking price.”

Another fantastic pro would be that you’re moving into a new unit, there’s nothing to replace because all the appliances are new, the floors are new, etc. In some cases you might have picked out everything yourself. Plus the value of the property would have appreciated before you ever moved in. 

Cons To Buying Pre-Construction  

Some of the cons to pre-constriction are the longer wait times, waiting for your property to be completed. Patience is important here, once you sign the agreement and pay the down payment it could take four to five years for your condo to be completed. 

The next con would be the sales tax involved, REMAX explains it like this, “there is a harmonized sales tax (HST) for pre-construction buildings because these units are brand new. While you are not paying a separate amount, the HST and the HST rebate will be factored into the price.” 

Finally, the closing costs are considered a con on this list and they usually run between 1.5 and three per cent of the purchasing price. However, when it comes to pre-construction condos it can be more. 

There are pros and cons to everything in life and it’s always important to review and examine them. Then you can make an informed decision, the help of a REALTOR can make this process easier. Lori and her team and here to help you through all of the steps of purchasing this type of property, or any type of property you’re interested in. 

Contact Lori VanDinther and Team 

Lori and her team of experienced real estate agents are ready to help you find the home of your dreams. Whether that’s a pre-construction condo or another type of property, they’re ready to help you make the right decision. 

If you have any questions about the topic of this blog or any other real estate questions, please contact Lori today. You can reach her and her team by calling 905-632-2199, or by email at info@loriv.com.

How Mortgages Work

How Mortgages Work

Mortgages and the Down payment 

Have you been wondering how mortgages work? When it comes to buying a home we all have to think about how we’ll finance it. It’s a major purchase and one that is life changing, you’re becoming a homeowner, it’s exciting. First we should review how mortgages work. 

There’s a lot that goes in to purchasing a home, you need to do a mortgage stress test. This test will determine what sort of mortgage you qualify for, we’ll discuss more of that later. We want to make sure that you also understand the two different types of mortgages as well, open and closed. We’ll start by discussing the down payment. 

The Down payment 

The down payment is just one part of the whole sale process, it’s a way of letting the mortgage lenders know that you, the buyer, are able to handle the financial sound. It also let’s the lender know that you’re able to make the monthly payments. It’s important for you to start saving for the downpayment well in advance of making an offer on a home. 

When it comes to the first step that you’ll take in this process, after saving, will be to find a mortgage lender. What is a mortgage lender? They’re a bank or an organization that is willing to lend you the money you need to purchase your new home. 

In Canada, there are a few lenders to choose from, for example, The Royal Bank of Canada, Scotia Bank, etc. In order to be able to get a loan you need to be eligible, this is determined by completing the pre-approval process. In this stage it’ll involve the mortgage stress test. We actually covered this in a previous blog. We’ll do a quick review of that here. 

The Mortgage Stress Test  

What is the mortgage stress test? To get more details please also check out a previous blog. To answer this question, in short, the stress test is designed to determine and see whether you qualify for a mortgage. Most lenders will require you to supply government ID, proof of address, employment information, employment history, credit history, credit score, and that you have an account with a Canadian bank. 

The stress test will allow the lender to determine a budget and how much you’ll be able to afford. Which is very important when it comes to what price range you can look at when house hunting. It’s also important to know so that you can budget for each month, making sure that you can make your mortgage payments, along with other payments that go in to having a home. There are two types of mortgages and this test will also help determine which one might be best for you. 

What are Open and Closed Mortgages?

Did you know that there are two types of mortgages? In Canada, when it comes to how mortgages work, all mortgages are either open or closed. Each one has different terms, and these terms will determine what’s allowed and what’s not. The terms also decide how often payments can be made and how much can be paid off. You can prepare choosing what type of mortgage you want, you’ll need to review you finical situation to do this. 

Closed mortgages have lower interest rates, however, they have more payment penalties. The penalties will be outlined in the montage details and will state how much money can be paid for each payment. You can lowed the monthly payment in exchange for a longer amortization period. 

Open mortgages have payment privileges at a higher interest rate. In this case your monthly payments don’t have a limit to what the specific amount can be. You can make lump sum payments if you choose. With an open montage you’re able to pay it off faster in many cases. 

When you’re deciding what mortgage is best for you, you’ll need to ask yourself a few questions. Some of the questions you might want to ask yourself are; what is your financial situation, can you pay your mortgage off early, when do you plan on selling, do you plan on selling before the mortgage term is up, what mortgage rate will you be able to afford. These are just a few important questions you need to try and answer. The next step will be actually applying for a mortgage. 

Applying for a Mortgage 

Now you’re ready to apply for a mortgage loan, but how do you do that? When applying for a mortgage it can be pretty straight forward, and the current market is flexible. Because the market is flexible it means that it’s easier for homeowners, and new homeowners, to get a loan that will suit their needs. You’ll apply for your mortgage through the financial institution of your choice, we listed a few above. They’ll walk you through the process in greater detail.

If you want lower rates and more freedom with loans, you’ll need to compete the qualifying criteria and also prove that you are able to make the monthly payments, the stress test will help determine this. Then when you’re ready you can begin to look for the house of your dreams, this is the really fun part. I can’t want to help you along in this journey. 

Contact Lori VanDinther and Team 

Taking the step to look for your new home can be a big one for some, and I want to make sure that you have a wonderful experience. Myself and my team work hard to make sure that our clients are happy and in love with their new home. 

You can contact me either by phone to email and I will be happy to answer any questions about how mortgages work, and any others you might have. If you’ve been wondering what your home is worth, you can use my What’s My Home Worth calculator. I’m looking forward to working with you soon! 

Social Distancing Home For Sale Real Sign

Real Estate is an Essential Service

Social Distancing and Real Estate

Since March we have been practicing social distancing and it has had us make some adjustments to how we operate our real estate business. Since these measures were put in place, they have caused many business to close, and because of this, many people have wondered whether or not real estate is in fact an essential service.

The truth is, REALTORs are an essential service, as it has been classified in both Canada and the U.S., some believe that it isn’t an essential service. While that might come from a good place, it just isn’t true. The consequences of closing down this type of business would be detrimental to so many and for many reasons.

RE/MAX

It’s true that RE/MAX lobbied and continues to lobby for real estate during this time, that it is an essential service. With some agents advertising to their clients to hold off on selling, it’s important to understand that in a normal situation, waiting isn’t an option for many people.

One issue is that when someone has already sold their home and now has to look for a new one. It’s can be true that many of Canada’s housing markets were in the sellers territory earlier in the year, and with a low housing supply and a growing demand. it has motivated a lot of homeowners to list their property.

Anther issue is that, for some, it might be that they have to sell to finance the new home they’re already agreed to purchased. There might be a situation where a family is living in a precarious place, and have no choice but to sell and move. Other reasons could be that the neighbourhood has crime or there are unsafe conditions within the home, these issues along with many more, might be what forces someone to sell.

Spring 2020

It was reported recently that Canada’s unemployment rate in March 2020 reached 7.8%, that’s up from 5.6% in February 2020. Also, incomes are down, while monthly bills continue to come in.

This Spring has made it clear that the real estate market is not as busy as it would usually be. This is due to the fact that there is a global pandemic, preventing Open Houses to take place. The real estate industry has taken steps to ensure the safety of clients and REALTORs, but using virtual tours and other technologies to limit face-to-face contact.

Real estate agents have been able to adapt their business procedures to make sure they are following the guidelines set out by the government. These include digital listing presentations, virtual open houses and showings, video conferences, e-signatures and more. RE/MAX agents have been doing completely digital transactions, and clients have been open to these new ways of conducting business.

Contact Lori VanDinther

If you’ve been thinking about selling, buying, or have any questions about COVID-19 safety measures, please contact Lori today. We know this is an unprecedented time, Lori and her team are working hard to make sure clients safety is number one.