A Guide to Financing Home Improvements and How Mortgage Refinancing Can Help

If you’re planning to remodel or renovate your home in the near future – whether to provide a better living environment or as part of a house flip – you’ll need to find a way to pay for your home improvements. There are several different possible sources of renovation money, each with their own advantages and disadvantages. One option that is gaining popularity is mortgage refinancing.

How does mortgage refinancing work, and how does it compare to other renovation financing options? How can you use a mortgage refinance to get the most out of your renovation? Here’s what you need to know.

Home Improvement Investments: Which Renovations Generate The Best Returns?

If you’re considering a mortgage refinance in order to fund your home improvements, you’ll want to concentrate on doing renovations that increase your home’s value. Otherwise, you’ll be taking on more debt without gaining anything in return.

If you want to max out your return on investment, re-finishing your kitchen is your best strategy. Remodeling Magazine’s annual cost-to-value renovation analysis shows that new appliances, a new coat of paint, and new surface finishes in the kitchen generate the biggest returns. Meanwhile, swimming pools and home offices tend to generate the lowest returns because they appeal only to a select group of buyers.

Your Options For Financing Home Improvement Projects

Financing for a home improvement project is a critical consideration. Unless you can afford to pay $20,000 out of pocket for a remodeling project, you’ll need to secure financing of some sort.

Your options for home improvement financing include home equity lines of credit, renovation mortgages, and refinancing. A Home Equity Line of Credit may not be an ideal solution, as repayment requires discipline, while a renovation mortgage (or home renovation loan) is typically used only for foreclosures and other properties requiring major renovation work.

Mortgage Refinancing: A Smart Option For Savvy Borrowers

If you’re looking to simply make improvements to your existing home, a mortgage refinance is likely your best option. A straight refinance gives you a lump sum of cash that you can use to pay for renovations upfront.

There’s also a “refinance plus improvements” arrangement, which can provide you with extra capital as you need it. Under this model, you can get up to 80% of your home’s post-renovation appraisal value – however, you’ll only get the money as the renovations are completed and inspected. With a straight refinance, you’re not out of pocket for any length of time.

Making smart home improvements is a great way to boost your home’s value and improve your living conditions. An experienced mortgage professional can help you to find financing for those renovations without a hassle. Feel free to contact the J Team if you have any questions, we will answer what we can and can also point you in the right direction for an expert Mortgage advisor opinion.

3 ‘Must Know’ Pieces of Advice for First-time Home Buyers

When delving into the realities of home ownership, there can be many factors involved that make it difficult to determine what you need to know and what can wait until later. If you happen to be a first-time buyer who’s looking for the best tips for purchasing a home, the following three pointers can help to set you on the right path.

Get Familiar With Your Credit Score

If you haven’t looked at your credit report for a long time, it can be a daunting task to request this information. Fortunately, your credit report is free and you can do it online at sites such as Borrowell, Credit Karma Canada, Equifax Canada and Transunion Canada. Accessing these online programs will not affect your credit rating and it is important to know that when a bank or other lending agencies check your score, it will affect your credit rating. It can be a good way to prepare you for what lenders are going to see. By taking this important step, you will be able to determine any delinquent accounts or balances owing that have gone to collections, and hopefully have these cleaned up before they can become a problem for your mortgage.

Determine The Price You Can Pay

While you may have a price in mind for what you’re willing to pay for a home, it’s important to determine your Total Debt Service Ratio before putting in an offer. Your TDS ratio can be determined by calculating a formula that can be accessed at www.cmhc-schl.gc.ca Within this site there is very valuable information about buying a home and if you are in need of being qualified through Canada Mortgage Housing Corporation (CMHC)

Organize Your Housing History

If you have a good history as a tenant, the next step will probably be the easiest of all, but it’s very important in order to prove you’re a responsible candidate for home ownership. Once you’ve acquired a Verification of Rent from any applicable landlord in the previous year, you’ll want to ensure that you have money in the bank. While RRSP’s can make a good impression, having a cash downpayment is extremely helpful to not only take your payment down a little but also determines whether you require assistance from an institution such as CMHC.

There are a lot of things to know when it comes to buying a home, but if you’re a first time buyer the most important thing is to ensure that your finances are organized and that you’re not diving into more house than you can afford. By taking the time to determine your Total Debt Service Ratio and looking into your credit, you can ensure a positive first-time buying experience. If you’re wondering about homes for sale in your area, please feel free to contact us. We would love to sit down and chat with you about your dream home.

Buying a Home? 3 Reasons Why You’ll Want to Work with a Professional Mortgage Advisor

If you’re planning to buy a home in the near future, you’re probably already looking at mortgages available through your bank and other lenders, seeking pre-approval. But before you choose a mortgage and sign on for a loan worth hundreds of thousands of dollars, you’ll want to carefully consider whether you’re truly better off with the DIY approach or whether a mortgage advisor might be able to help you. Mortgage advisors are trusted professionals who work with private clients to get the best terms and rates available.

Here are just three reasons why finding an experienced mortgage advisor is in your best interests.

 

1.) A Mortgage Advisor Can Give You An Independent Second Opinion

Oftentimes, when dealing with your bank, it can feel like there aren’t that many options available when it comes time to find a mortgage. And although many banks do offer loyalty rewards through their mortgage offerings, that doesn’t necessarily mean the mortgage itself is a good deal.

A mortgage advisor is someone who has seen hundreds of mortgage deals and knows what kinds of terms and rates you can reasonably expect. Before signing on for a mortgage, have an independent advisor review your contract to spot potential problem areas.

2.) A Mortgage Advisor Has Access To Better Rates

When you walk into a bank or lender as a consumer, your lending officer is going to provide you with the bank’s standard market rate for the average borrower with your credit rating and income. But just because you’re getting a standard rate, that doesn’t mean you’re getting a good rate.

A professional mortgage advisor has access to an extensive network of lenders with a variety of offerings, which means your mortgage advisor can almost certainly get you a better rate than what your bank offers. And on a purchase as large as a mortgage, every interest point matters.

3.) A Mortgage Advisor Is A Strong Negotiator

When it finally comes time to make a deal, most first-time homebuyers simply accept mortgage terms without much second thought. After all, getting approved for a mortgage at all is great news for many. But just because you’re offered a mortgage, that doesn’t mean it’s the best mortgage you could get.

A mortgage advisor is an experienced negotiator who knows what the banks and lenders can offer you – and knows when they’re holding back. That’s why you’ll never want to walk into a negotiation without a mortgage advisor on your side.

Working with a professional mortgage advisor can make the mortgage process easier and help you to get a better mortgage. To learn more about how a mortgage advisor can help you, contact your local mortgage professional today. If you are not sure how to do that then please give us a call and we can help you with a list of local advisors who might be able to help you.

Dealing with an Empty Nest? 5 Great Reasons to Downsize into a New Condo

There’s a good chance if your children have recently moved out for good that your home is feeling a lot larger than it used to and maybe a little more empty and perhaps you’re re-considering the extra space. If downsizing to a condo is on your mind and you’re weighing the benefits of this kind of move, here are some that might make it worth the switch in size.

A Little Extra Money

With the additional money you should be making from the sale of your home, there’s a good chance that downsizing may provide you with extra assets to tuck away for retirement, travel or whatever you have been dreaming of doing once you are free of the daily grind. If you don’t need the money, it might not matter, but in the retirement years a little extra can be of great benefit.

Minimize Your Costs

Usually, there are many utility and heating costs that go along with home ownership, but by moving into a condo you can alleviate many monthly payments instantly. Instead of paying for every utility, condo living can help to simplify and minimize the amount you owe each month. Condo living would reduce maintenance tasks and costs if you hire a company for snow removal or landscaping or if you are the chief of all things labour intensive for your home, there would be no more shovelling in the winter months and no more mowing and raking in the summer allowing you more time to do exactly what you love.

Free Up Your Retirement

Often times it may seem like home ownership is the dream, but many people approaching retirement would rather have the flexibility of renting. Because there are limited responsibilities with a rental, it means you can spend the winter months someplace warm and sunny without having to worry about who will take care of your home.

A Condominium Community

The great thing about many condo buildings is that they are built close to amenities like grocery stores, drycleaners and restaurants, so you don’t have to worry about venturing far out. It might not seem important if you’re used to driving to the store to make your purchases, but being able to walk might make you a convert to a different way of life.

Mythbusting: Is Winter a Bad Time to Buy a Home? No – and Here’s Why

 

The cooler months of winter often seem like the best time to hibernate and wait for spring to appear, but it can actually be a prime opportunity to start looking for a new home. If you’re not interested in waiting until next season, here are a few reasons you may want to get started on your home search a little earlier than expected.

Opportunity For A Lower Price

With prime moving time occurring during the months of fall and spring, there’s a good chance that a home purchase will end up costing you less in winter than it will during other times of the year. Most home sellers are not going to want to keep their house on the market for an extended period of time, so if it happens that their house is still for sale when the winter comes, they’ll likely be willing to consider a lower offer or include some perks.

More Attention From Your Agent

Since fewer people will be selling and buying in the winter months, it’s quite likely that your real estate agent will have a bit more free time on their hands and will be able to give you more of their attention. Instead of sitting back and waiting for the warmer weather to arrive, take the opportunity to redefine your needs to your agent so – no matter the season – you’ll have someone who’s truly prepared to tackle the market for you.

The Added Perks Of A Slower Season

Most home sellers will have been advised by their real estate agent that the winter market is a lot slower, so you may be able to get some added benefits along with your purchase that make for a better deal. Whether you can garner a better negotiation, a quicker closing date or provide an offer that includes updated home appliances, there will probably be a few opportunities which will make the cooler winter search worth the effort.

So you could choose to hibernate all winter, or you can be on the hunt for your forever home. With the typical slower selling season, you may be able to take advantage of lower prices and you may find that you will get a few more perks with your purchase.

If you’re planning on moving a little bit sooner than expected, you may want to contact your local real estate professionals to see if your new home on the market today!

If you do not have an agent please feel free to give us a call, we would be honoured to brave the chilly climate along side of you and join the hunt.

Fixed-rate vs. Adjustable-rate Mortgages: The Pros and Cons of Each

Whether or not you’re new to the housing market, you’ve likely heard about low interest rates and are wondering what kind of impact these can have on your mortgage. Both fixed and adjustable-rate mortgages have their benefits and drawbacks, but what will work for you depends on your financial health and knowledge of the real estate market. If you’re currently comparing the pros and the cons of each, here are some pointers on how they can impact your home purchase.

The Security Of A Known Rate

With the relatively low interest rates of the last few years, many people can be enraptured with the idea of a variable rate mortgage that may save them money. However, while a variable rate mortgage can certainly provide a benefit if low interest rates remain in place, a fixed rate can provide the homebuyer with the economic security of knowing exactly what their rate is for the entire length of their loan period.

A Lower Mortgage Cost

It goes without saying that there’s a strong benefit in knowing exactly what your mortgage payment will be each month. However, while a fixed-rate mortgage can offer this assurance, an adjustable-rate can actually end up costing you a lot less in the long term. Since mortgage rates will fluctuate over the term of your loan and a lower interest rate means a lowered monthly payment, this can result in a more economical price tag when it comes to your biggest investment.

How Market Savvy Are You?

Many homebuyers feel confident enough in timing the market and getting a good price that they aren’t as concerned with the choice between an adjustable and fixed-rates. However, if you’re not savvy when it comes to the real estate, deciding on a variable rate can make a monthly payment difficult if you’re already pushing your financial capabilities. Instead of making a rash decision, ensure you’re aware of your flexibility before deciding which rate option to choose.

There are a variety of benefits on both sides of the equation, whether you choose a fixed-rate or an adjustable-rate mortgage. However, what works best for you can depend entirely on your economic situation and your loan period so it’s important to consider all the variables before making a decision. If you’re currently on the market for a home and are considering all your options, you may want to contact one of our mortgage professionals for more information.

For more about mortgages and which is best for you, contact the JTEAM.

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