Why Real Estate is the Ultimate Hedge Against Inflation

5. December 2022 05:43

If it feels like the cost of goods and services continues to go up, the likely culprit is probably inflation. Over the last few years inflation has started to have a broader impact on the economy, from your morning coffee to the gas you put in your car to commute to work. One of the best ways to hedge against inflation is through real estate.


Historically, real estate has been a great tool that has been championed by experts for its ability to withstand inflationary pressures. Today, people are turning to real estate to help combat inflation as it continues to impact the economy.


Even with rising inventory and a higher interest rate environment, real estate continues to be an effective asset people can turn to as inflation impacts purchasing power. If you are concerned about inflation, here are a few reasons why real estate may be the best tool in your arsenal to hedge against rising inflation.




1. Real Estate is a Tangible Asset


Inflation is troublesome for many reasons. One of the biggest reasons to watch what inflation is doing is because inflation can decrease your purchasing power, whether you realize it or not. When purchasing power begins to decline, investors often look to other assets that hold their value better against rising prices.


Real estate is considered one of the gold standard assets to combat high inflation because it's a tangible asset. While tangible assets like real estate can depreciate over time, they are still a physical asset so they aren’t really devalued by inflation.


2. Property Values Historically Outpace Inflation


Generally, real estate performs better against inflation over other investments like stocks, which are often negatively impacted by curbed consumer spending.


Inflation can also make it more difficult for investors to value companies. For example, as price increases make it hard to predict how companies can compete against peers or how they will grow in comparison to the market.


On the other hand, real estate values have historically outpaced inflation. Since real estate is considered a long-term investment, it can help preserve wealth over time.


3. Owning Real Estate Helps with Cost of Living


Another way real estate is a good method for hedging against inflation is that it can help you keep up with the cost of living despite rising costs. Investment real estate does well against inflation by providing investors with healthy streams of rental income which can keep pace with market price trends.


Similarly, people often use mortgage financing to purchase a new home. Those that have locked into a fixed-rate mortgage have a significant advantage over those that pay rent because their monthly housing payment won’t change. Comparatively, rent often goes up alongside inflation.


4. Shelter is a Basic Human Necessity


Lastly, consider that real estate is shelter, a basic human necessity. That means there will always be a demand for real estate, whether people choose to own or rent. Owning real estate is certainly more beneficial and has been found to be one of the biggest contributing factors to building generational wealth.1


Key Takeaways


No one likes to deal with inflation, but using real estate to hedge against rising inflationary pressures is a smart financial decision.


There are several reasons why real estate is the ideal asset to hedge against high inflation. Being a tangible asset, real estate values often provide more protection because they increase during periods of monetary devaluation.


Real estate is also a necessity meaning there is always demand for it in some capacity. While owning a home can help normalize your monthly housing costs, investing in rental properties can offer both appreciation and streams of rental income that can work in tandem to fight rising inflation.




1 Butler, I. (2022, September 21). How to Build Generational Wealth in Canada. The Motley Fool Canada. https://www.fool.ca/investing/how-to-build-generational-wealth/



What's a Trigger Rate and How Does it Impact Your Monthly Mortgage Payment?

4. October 2022 17:58

Recent inflation has had a tremendous impact on thousands of household budgets across Canada. However, higher food and gas prices are the least to worry about for some consumers who either bought a new home or refinanced at peak pandemic conditions.


The Bank of Canada has taken to rapidly increasing interest rates to help curb inflationary pressures. But if you are a borrower that has a variable-rate mortgage with a fixed payment, you may be close to hitting your trigger rate which may subsequently cause your monthly mortgage payment to go up.


Many lending experts are concerned that if interest rates continue to increase, nearly 750,000 borrowers could also be stuck paying higher mortgage payments1. As a result, this could put more pressure on the economy by forcing borrowers to slash spending even more.


Nevertheless, if you are in fact a borrower that has a variable-rate mortgage, don’t panic just yet. You will have a few different choices to deal with reaching your trigger rate. Let’s take a closer look at how trigger rates work and how to manage them.




What is a Trigger Rate?


Few borrowers with variable-rate mortgages may know what a trigger rate entails. A trigger rate refers to the interest rate that lenders can increase a mortgage holder's monthly payment, even if it would normally be fixed.


As the central bank increases interest rates, lenders adjust mortgage rates to shifts in the market benchmark. Variable-rate mortgages are pegged to these benchmarks, which means if you have a variable-rate mortgage, your payment can be subject to change.


However, some borrowers opt for a variable-rate mortgage with a fixed payment. Similarly, these loans are subject to adjustment based on fluctuations in the benchmark interest rate.


However, rather than increase your monthly mortgage payment when interest rates rise, lenders reallocate how much of your payment goes towards interest rather than the principal balance of your loan.


Normally small interest rate adjustments aren’t a major issue, but the sharp increase to the benchmark interest rate has left several borrowers in the situation where reallocating their payment would result in no amount going towards principal. In fact, the new rate wouldn’t even be enough to cover the interest.


Since Canadian lending rules don’t typically allow negative amortization, borrowers hitting their trigger rate will need to choose from a handful of options once hitting this threshold.


Recent data from the Bank of Canada indicates that at the end of 2021 roughly a third of homeowners that had a mortgage had a variable interest rate. Of those borrowers, 80% had fixed payments2.


What Are Your Options if You Hit Your Trigger Rate?


If you are a borrower with a variable-rate mortgage that has a fixed monthly payment and you are expected to hit your trigger rate, don’t panic.


Your lender should be reaching out to you to discuss a few different choices to deal with your rate adjustments. A few different options include3:


1.   Changing Your Payment


The first option to deal with hitting your trigger rate is to simply change your monthly mortgage payment so that at least some portion is going toward reducing your principal balance. This could mean extending the term of your loan if you have room to do so. If you can’t extend your loan term, increasing your fixed payment amount could also work.


2.   Make a Prepayment


Since your trigger rate is partially calculated by how much money you owe on your mortgage, making a one-time lump sum payment could be a variable option to help push your trigger rate higher.


Keep in mind that some lenders may have special rules for how many additional payments you can make and how they are applied to your loan. Make sure you review your mortgage documentation to see if this is permissible.


3.   Switch to a Fixed-Rate Mortgage


If you're really in a bind, your mortgage lender may permit you to switch your loan to a fixed-rate mortgage. While this is certainly an option, the downside is that your monthly mortgage payment will probably still go up. Also, note your rate will be locked in based on current market rates which could wind up costing you more money over time.


4.   Payoff Your Mortgage


Lastly, you always have the option to pay your mortgage off in full to avoid your trigger rate. However, depending on your loan balance this may not be an option for most borrowers. Even if you have the means, consider the impact tapping into your cash reserves may have on your current budget and future financial goals.


Key Takeaways


As Canada continues to try to manage the economic impacts of inflation, thousands of homeowners might soon see their monthly mortgage payments spike.


Those borrowers that chose variable-rate mortgages with a fixed monthly payment might soon hit their trigger rate if rate increases continue.


But while hitting your trigger rate isn’t ideal, rest assured there are still a variety of options that can help manage changes to your mortgage.


Adjusting your monthly payment, prepaying, or even modifying your loan to be a fixed-rate mortgage could all be ways to address your trigger rate without breaking your budget.




1 STOREYS. (2022, August 29). 750,000 Canadian Mortgages at Risk of Rising Trigger Rate Payments This Fall. Retrieved October 3, 2022, from https://storeys.com/750000-canadian-mortgages-at-risk-of-rising-trigger-rate-payments-this-fall/


2 Alini, E. (2022, July 27). What is your mortgage trigger rate? This calculator helps you estimate it. The Globe and Mail. Retrieved October 3, 2022, from https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-calculate-mortgage-trigger-rate/


3 Choi, B. (2022, September 7). What is your trigger rate, and how does it affect your variable-rate mortgage? MoneyWise Canada. Retrieved October 3, 2022, from https://moneywise.ca/investing/mortgage-trigger-rates#:%7E:text=Generally%20speaking%2C%20the%20trigger%20rate,mortgage%20in%20January%20for%201.5%25


Homeowner's Guide: How to Declutter to Sell Your Home

15. May 2022 11:06

There is a lot that goes into preparing your home for sale, ideally leaving buyers with a great first impression that will hopefully result in them making an offer. But one of the things that might feel a bit intimidating is decluttering your space.


Research shows homes that are too cluttered make it much more difficult for buyers to envision themselves living in the space. Consequently, too much clutter can leave homes feeling smaller than they truly are.


According to the Processional Organizers of Canada (POC), unorganized homes are less appealing to homebuyers which can adversely impact your overall sales price.1 It may also have buyers questioning whether your home was properly cared for or not.


Here are a few of the top strategies you should consider using to help you declutter your home and get it ready for potential buyers.



1. Perform an Initial Inventory and Spot Check


The first step to decluttering your home is understanding what you are working with. From larger projects to simple ones, taking a few minutes to look over effects that have accumulated will help you with goal setting and time management.


First, look at your home through the eyes of a potential buyer. Start by addressing the first things that catch your eye as these are the items that tend to be the immediate eyesores.


One of the best ways to create the illusion of more space is to focus on clearing off horizontal surfaces, such as counters, tables, and mantles.2 Entertainment consoles and the tops of fridges are also often overlooked areas.


2. Divide Up Your Workload


One thing that helps a lot of sellers is divvying up the work to make decluttering your home more manageable. Tackling too much all at once can leave you feeling frustrated, stressed, and unmotivated.


Instead, consider decluttering from room-to-room basis. Starting with high traffic areas is ideal, however your starting point should make the most sense to your process and flow.


If working by room doesn’t resonate with you, consider decluttering by category. Some professional organizers feel the room-by-room approach isn’t always the most efficient method of decluttering.


Cleaning by category focuses on like-items and clearing those out before moving on to another subset. For example, if you have a lot of papers scattered from room-to-room, work on cleaning up those first (storing, recycling, junking, etc.) before moving onto something else. Clothes, books, and movies are a few other examples that could work well with the categorization method.


3. Create a Plan and Stick to It


Decluttering an entire home can be a large project. Once you have taken a preliminary inventory and divided up your work, the next step is to create a plan and schedule.


Having a formal plan will help you chip away at the work and will allow you to set key benchmarks. For example, say you only have a few set hours to declutter.


Maybe dividing those up equally over the weekend makes the most sense. You can even set a specific goal to have any given room done by a specific date.


Most importantly, don’t try to do everything all at once. It's more important to make incremental strides so you get a sense of accomplishment that will continue to motivate you through project completion.


4. Focus on Depersonalizing Your Space


If you want to draw in more buyers, focus your decluttering efforts on depersonalizing your space. When people look to buy a house, they want to imagine how they could potentially use the space. That is a bit hard with your personal photos and knick-knacks everywhere.


Alternatively, try to put more personal possessions in a safe storage space. This may include family photos, eclectic artwork, and unique decor.


Other key tricks to making your place less personalized is by repainting, focusing on neutral colors and schemes. You should also open curtains to allow natural light to flow into your home and provide the illusion of more space.




1 Professional Organizers in Canada. (2016, May 26). SOLD: Decluttering to sell your home. POC. Retrieved May 10, 2022, from https://organizersincanada.com/sold-decluttering-to-sell-your-home/


2 HomeChannel.ca. (2020, January 2). Selling a Home? How to Declutter in Two Weeks. HomeChannel.ca - News | Blog. Retrieved May 10, 2022, from https://www.homechannel.ca/news/selling-a-home-how-to-declutter-in-two-weeks


How Does Inflation Affect Real Estate?

4. April 2022 16:55

You often hear economists talk about the housing market in terms of sales metrics, mortgage rates, and home prices. But what many experts subtly discount is the role inflation has on market performance.


While inflation may seem like a strange concept, but it’s really just the measure of price increases for goods and services over a set period of time. This means that as inflation increases, your subsequent purchasing power declines.


For many, inflation often squeaks through without you ever really considering it's there. Maybe you pay a little more at the pump or spend a few more dollars on groceries each week.


But on a macroeconomic level it can have a tremendous effect on the economy, especially real estate. Let’s take a deeper dive and look at how this one key metric might be impacting your ability to buy a new home, obtain a mortgage, or lease that new downtown apartment.




The Impacts of Inflation on Canadian Real Estate


Canada’s inflation rate recently reached a high point in early February, hitting 4.8%. That’s not anything to scoff at especially when you consider the trajectory of housing prices.1


For decades home prices have been on an upward climb, making affordability an ongoing concern. The COVID-19 pandemic certainly exacerbated this trend, although lower financing rates have certainly helped.


According to the Canadian Real Estate Association (CREA), home prices have grown over 300% over the course of the last two decades.1


But the real problem is that rising inflation will only create another headwind that will impede buyers looking to purchase new homes by restricting their purchasing power.


Some buyers are already finding current home prices to be a challenge, with the average home price set at around $713,500.1


Adding inflation into the mix, it can create additional barriers for potential buyers looking to obtain a new mortgage meaning they may delay buying and continue to rent for a longer period.


However, real estate investors should rejoice as investing in real estate has traditionally been an effective way to hedge against inflationary pressure. Furthermore, as more people turn to renting, there is the opportunity to earn a higher return on your investment compared to other asset types.


Another way inflation impacts real estate markets is by putting added pressure on inventory. New construction is one area that often struggles as inflation rises due to higher building costs.


Factoring in existing supply chain disruptions felt by the recent global health crisis, inflation could damper new housing starts for a prolonged period, translating to less homes available on the market for potential buyers.


Lastly, inflation often has an indirect impact on mortgage interest rates. As inflation increases, the government often raises rates to make borrowing more expensive and helps to cool the economy.


In early March, the Bank of Canada increased the benchmark interest rate to 0.5% which should help mitigate inflationary pressure.2 On the flip side, higher interest rates make obtaining a new mortgage more expensive, hindering new home buyers. It's a fine, double-edged sword.


The Bank of Canada has recently announced its plans on additional rate hikes over the next year. While mortgage interest rates remain low, who knows how long that will last.2 Despite where home prices are at, it may be advantageous to buy a home now before rates get any higher.




1 Boisvert, N. (2022, February 2). Inflation isn’t the main factor driving Canada’s sky-high housing costs, experts say. CBC News. Retrieved March 24, 2022, from https://www.cbc.ca/news/politics/housing-inflation-conservatives-1.6335633


2 Ting, M. (2022, March 6). Interest rates are rising. Is it time to switch to a fixed rate mortgage? CBC News. Retrieved March 24, 2022, from https://www.cbc.ca/news/canada/british-columbia/fixed-rate-variable-mortgage-interest-rates-1.6373827


Interest Rates Are Rising. Should I Buy Now or Wait Until Later?

23. February 2022 12:55

There is no debate that the housing market has been performing exceptionally well over the last couple of years, despite headwinds brought about by COVID-19. However, borrowers now face new challenges in the form of increasing inflation and rising interest rates.


Mortgage interest rates have been near historical lows for some time as demand for homeownership remains high. But as the old saying goes, nothing lasts forever.


The Bank of Canada has already signaled it will begin to increase rates over the next year, starting near the end of February.1


In fact, many analysts predict rates to jump fairly quickly. Markets anticipate around seven hikes throughout the year, although this would largely be dependent on how the economy is performing as a whole.


There are many reasons why it is advantageous to buy now rather than waiting until later when rates are higher. If you were on the fence deciding whether now is the right time to buy a new home, here are some things you should consider that may make you think twice about pushing off that new home purchase.



1.Lower Pricing and Costs


Buying your new home now versus waiting a couple of months could translate to thousands of dollars in savings. While small, incremental rate increases may not seem like a lot, when you consider the average home price across the country is around $720,850, even a fractionally higher interest rate can mean a lot more interest you will have to pay over the life of your loan.2


Similarly, lenders are also shifting focus to purchase activity as higher interest rates may start to dissuade and erode applications for refinancing. This means lenders will be competing against one another. Leverage the pricing competition to your advantage as markets transition into a purchase heavy cycle.


2.Heightened Purchasing Power


Increasing interest rates have a direct impact on the amount of home you can afford. Experts have often said that for every 1% increase to rates translates to approximately 10% less buying power.


Higher rates have a direct impact on loan amounts. For example, suppose you decide to purchase a modest new house, but have a strict budget that you cannot exceed for your monthly housing payment.


All else equal, your purchase power could decline substantially with even a minor increase in rates because in order to keep the payment the same for a mortgage with a higher rate, you would have to compromise by lowering the loan amount.


A swing in rates could spell a reduction of thousands of dollars in buying power which is why it's ideal to leverage your elevated purchasing power now, while rates are effectively low. Don’t lose out on your ability to get the most home for your budget.


3.Liberal Lending Standards


Another reason to buy a home now while rates are still low is because you never know when credit will be this cheap or easy to obtain again. In general, Canadian credit scores have been improving making it easier for you and other borrowers to qualify for a new home loan.


According to Borrowell, the average score in 2021 was 667, up from 649 in 2020.3 While your credit score may be well above or below this curve, the fact remains that creditors are still very willing to lend out money and the trend indicates borrowers should meet the benchmark criteria in qualifying for a new mortgage.


It's important to buy while credit standards remain more liberal and while borrower credit trends are improving. As rates increase, lenders may tighten lending requirements, which can make it harder to qualify for a new loan.


Key Takeaways


It’s finally time to take a step back and accept the fact that mortgage interest rates will be going up. The Bank of Canada has all but guaranteed rate increases over the next several months.


While it shouldn’t come as a shock since rates have been near historic lows for quite some time, now is the time to act to ensure you don’t leave thousands of dollars on the table.


Waiting to buy and see what rates will do is a risky move which could have wider implications than you realize. You could end up paying more for a similar home in a couple of months.


Far worse is if you are already someone who is on the edge of being able to afford a new home, rising rates could delay your ability and opportunity to buy a home for the foreseeable future.


It's important to consider buying now while factors like lower pricing, heightened purchasing power, and liberal lending requirements are still to your advantage.




1 Hughes, S. (2022, January 26). What a Bank of Canada rate hike could mean for mortgages and the housing market. Financialpost. https://financialpost.com/real-estate/mortgages/what-a-bank-of-canada-rate-hike-could-mean-for-mortgages-and-the-housing-market


2 Hughes, S. (2021, December 15). Average home price in Canada hits all-time high of $720,850. Financialpost.

Retrieved February 23, 2022, from https://financialpost.com/real-estate/average-home-price-in-canada-hits-all-time-high-of-720850


3 Surman, R. (2021, January 18). What is the Average Canadian Credit Score? BorrowellTM. Retrieved February 21, 2022, from https://borrowell.com/blog/highest-canadian-credit-score-study


A Condo Owners Guide to Organizing and Maximizing Storage Space

4. January 2022 08:40

Don’t worry, it's not just you. Over the last few years, the size of condos has seen incremental declines in size and available space.


New data suggests that between 2015 and 2017, the median size of condominium units has decreased by around thirty-four square feet1. While that may not seem like a lot, when you are already living in a smaller space every inch of space goes a long way.


Nevertheless, the fact remains that condos continue to be great investments and remain popular among owners (especially in metro areas). However, you may need to get creative when maximizing and organizing your living space.


If you are looking to get the most out of your small living space, consider these tips and techniques to help you get the most out of your condo’s storage space.




Store Smarter Not Harder


Since you are already working with less space than a traditional home, it's important to maximize functionality whenever possible. One of the best ways to do this is to buy furniture that has built in storage.


Using bed frames, sofas, or sectionals that have built-in storage underneath will help give you an extra place to stash your effects and help keep your floor free of clutter.


Similarly, aesthetic furnishing can have cross functionality2. A great example is living room storage benches, chairs, or accents that work as additional seating if you’re hosting guests, but also work as a storage container for throw blankets, pillows, or other items.


Investing in smaller appliances with stacking storage are also an efficient way to keep your living space functional without sacrificing livability.


Up and Out of the Way


Loosen that feeling of crampedness by removing clutter off the ground by storing it up and away. One way to store away furnishings is to invest in floating shelves which can easily free up space and provide more breathing room to your space.


Storage hangers or bins placed on the back of doors can also help utilize unused space. Consider storing shoes, coats, or even towels this way, keeping them out of sight and out of mind.



Minimalism Meets Orderly


Incorporating a bit of minimalism can make your condominium feel like it's bigger than it actually is3. It can also supplant poor organizational habits to help make your space more orderly3.


Consider using various organizational containers with labels in your kitchen to help maximize your eating area and counterspace. Don’t stop there. Labeling can help you organize storage bins in other areas through your home including closets and bathrooms.


Embracing minimalism and doing more with less will help simplify household processes and help reduce clutter. For example, simple bulletin boards or wall organizers are also great and remove the need for that designated junk drawer, leaving you with more storage space.



Lock It Away


If you are buying a new condominium, consider if it came with a storage locker. While many older condos are void of separate designated storage areas, new units usually have such spaces for owners to stash belongings.


In order to maximize this resource, make sure to optimally organize your locker as best you can. Consider putting heavy items near the front so you don’t have to move and navigate through smaller items to get to them4.


Also, storage lockers are also prone to theft so make sure to keep more valuable items near the back if at all possible.


Lastly, consider your condo storage locker as a staging area for unwanted clutter. Use the space to clear up space around your unit until you find time to sell or donate unwanted effects4.




1 Grant, C. (2021, October 20). Assessing average condo size: Toronto paying more for less. Canadian Real Estate. Retrieved December 21, 2021, from https://www.canadianrealestatemagazine.ca/news/assessing-average-condo-size-toronto-paying-more-for-less-334871.aspx


2 Lue, A. (2017, January 09). 5 smart ways to maximize space in the incredible shrinking condo. Retrieved December 21, 2021, from https://storeys.com/5-smart-ways-to-maximize-space-in-the-incredible-shrinking-condo/


3 Breaux, A. (2020, January 10). This Tidy Toronto Condo is Packed with Organizing Ideas You'll Want to Steal. Retrieved December 21, 2021, from https://www.apartmenttherapy.com/organizing-and-storage-ideas-in-a-toronto-condo-tour-36701812


4 Assan, H. (2018, January 04). Living In A Condo? 4 Tips On How To Efficiently Use Your Storage Locker: Jiffy Self Storage Blog. Retrieved December 21, 2021, from https://www.jiffystorage.com/blog/storage-units/living-condo-4-tips-efficiently-use-storage-locker/


What Do Lenders Look at When Approving You for a Mortgage?

21. November 2021 09:13

Whether you are buying a new home or already an experienced homeowner looking to refinance, lenders look at a multitude of factors when approving you for a new mortgage.


Recent data shows that 410,000 new mortgages originated in the second quarter of 2021 alone, which is a 60% increase compared to the same period the year prior1. This isn’t surprising as home prices have gone up substantially over the last two years.


The Canadian Association of Accredited Mortgage Professionals (CAAMP) also notes that the average homebuyer finances roughly 67% of their purchase price2. If you are looking to buy a new home or refinance to take advantage of the low-rate environment, here are a few factors your lender will be sure to analyze.




Credit Score


One of the first things that lenders look for when qualifying you for a new mortgage is your credit score. Credit data is pulled from the two Canadian credit repositories, namely Equifax Canada and TransUnion.


Scores often range between 300-900, with the lower representing poorer credit and the top end representing someone with excellent credit3. Requirements vary from lender to lender but, in general, most lenders require a credit score at or above 6503.


You can request a free copy of your credit report each year. The types of credit, payment history, credit utilization, and new inquiries all go into determining your overall credit score.


Outstanding Debt and Payment History


Lenders will review your outstanding debts and payment history to help determine your likelihood and ability to repay new credit requests.


While your payment history is already considered, in part, by your credit score, lenders will still review any outstanding balances you carry and their relation to your income to make sure you can support taking on new debt.


Ideally, you want to have no late or delinquent tradelines, especially on current or previous mortgages. However, the existence of these factors may not necessarily outright disqualify you from obtaining a new mortgage, so long as blemishes can be sufficiently explained and documented. If you can demonstrate you are a responsible borrower that can manage credit, you could still get approved for a new mortgage.


Qualifying Income


The amount of money you earn is a major factor that lenders analyze when approving you for a mortgage. Not only do they need to verify how much you earn but also the stability of your income and its likelihood of continuance.


For example, a full-time salaried borrower may have less hoops to jump through than self-employed borrowers or those relying on variable sources of income for qualification.


Lenders will typically want to see that you have a two-year history of receiving any income being used for qualification substantiated by supporting documentation such as recent paystubs, T4 statements, and/or personal T1 generals4.


Liquid and Non-Liquid Assets


Most lenders will want an itemized summary of your assets to review as part of your mortgage application4. This includes liquid assets such as checking and savings accounts but could also include non-liquid assets such as registered retirement savings plans (RRSPs) and vehicles.


Borrowers with substantial assets are often considered more responsible borrowers in the eyes of lenders because you have access to additional reserves should an unexpected event occur, that could temporarily impact your income used to make your monthly payments.


Down Payment


If you are buying a new home, lenders will want to know how much of your own money you are contributing to your purchase transaction. Putting down more money is more favorable than putting down less money because it reduces the overall risk to the lender.


If your down payment is coming from a typical bank account, lenders will often want to see a 90-day history showing the source of funds being used.


Other down payment sources, such as the net equity from the sale of another property should be documented with a fully executed purchase agreement and a mortgage statement for any existing mortgage loan secured by the property.


Gifted funds may also be an eligible source of down payment provided you have a signed gift letter and proof the funds have been received into your bank account from the donor.


Property Condition and Value


Lastly, lenders will need to analyze the condition and value of the subject property that will be used as collateral to secure your new mortgage loan.


Your lender may require an appraisal inspection report be completed before approving your credit request to make sure the value supports your requested loan amount. It also helps the lender identify any issues related to the property’s condition.


In some cases, you may find a lender who will approve a mortgage based on an automated valuation model (AVM) to determine your home’s property value, but it's never a guarantee.




1 Evans, P. (2021, September 05). Canadians have record-high mortgage debt. What happens when rates rise? | CBC News. Retrieved November 15, 2021, from https://www.cbc.ca/news/business/debt-mortgage-feature-1.6162668


2 Dunning, W. (2015, June). A Profile of Home Buying in Canada (Rep.). Retrieved November 15, 2021, from Canadian Association of Accredited Mortgage Professionals website: https://mortgageproscan.ca/docs/default-source/default-document-library/a-profile-of-home-buying-in-canada.pdf?sfvrsn=e54ef47e_0


3 Logan, H. (2021, August 18). Minimum Credit Score for a Mortgage in Canada. Retrieved November 15, 2021, from https://www.nerdwallet.com/ca/mortgages/minimum-credit-score-for-mortgage-canada


4 Cooper, S. (2021, October 21). Mortgages 101: Guide to Getting Your Mortgage. Retrieved November 15, 2021, from https://www.greedyrates.ca/blog/mortgages-101-a-guide-to-getting-your-mortgage/




Three DIY Projects to Add Value That Any Homeowner Can Do

5. October 2021 12:26

Being a homeowner can be very rewarding, but sometimes it requires you to roll up your sleeves and get your hands dirty. If you want your home to retain or increase in value, you may want to consider doing some home renovations or improvements.


Hiring a contractor or handyman can cost thousands of dollars, even for the smallest project. Rather than dip into your savings, consider completing a modest project yourself.


No matter your skill set, there are several home projects that you can complete to add incremental value to your home to help keep it looking fresh and modern. Let's look at three DIY home projects that any homeowner can do.




1. Paint the Front Door


You might not think it's a big change, but something as simple as painting your front door could have a big impact on your home’s value.


A recent analysis by Zillow found that homeowners who painted their front doors black or charcoal gray could sell their home for nearly $6,000 more1.


Even if black or gray doesn't work for you, painting your front door makes it look newer and adds curb appeal. Consider choosing a bright color that contrasts with a neutral exterior.


The best part about painting a front door is that it doesn’t cost much and takes little time to complete. Expect to spend about $75 on materials and an afternoon to complete.


Tools and Materials


-Sanding block -Paint stir stick
-Paint brush -Combination paint and primer
-Painter’s tape -Rags, drop cloths, and spare towel
-Paint roller and tray  


Tips and Suggestions


1)    Remove hardware (knobs, locks, hinges, etc.) from the door before you start painting and cover any built-in hardware, such as the peephole, with painter’s tape.


2)    Lay down drop cloth or other material to catch any dripping paint before you apply your first coat. Two coats may be necessary to get full coverage


3)    Start in recessed areas with a brush and then follow up by using a roller on flat areas


2. Frame Bathroom Mirror and Paint a Vanity


If you don’t want to spend the money or the time renovating your home, focusing on minor improvements to your bathroom could help boost your property’s value.


A recent cross-Canadian survey found that bathroom renovations can increase the value of your home anywhere from 2.5-12.5%2.


Adding a frame to your mirror can give your bathroom a more finished look. Similarly, painting your vanity can make the space feel bigger than it is and provide a nice boost of eye-popping color.


Adding a fresh coat of paint and installing a new frame around the mirror doesn’t require much. Expect to spend around $200 and allocate the majority of a day to complete.


Tools and Materials


-1 x 4 x 8’ (x 2) for most mirrors -Construction adhesive
-Miter saw -Caulk and caulk gun
-Paint primer -Electric drill and screws
-Paint brush -Painter’s tape
-Paint roller and tray -Rags, drop cloth, and spare towel
-Semi-gloss paint -Flat L brackets (x 4)
-Sanding block -Level
-Clear coat polyurethane  


Tips and Suggestions


1)    Go around the vanity with painter’s tape to protect the wall from paint and use a high-quality small-nap roller to avoid it from looking streaky when you apply your paint.


2)    Cut the boards so they will have a ½” overhang on the mirror’s perimeter and make sure to add a clear coat of polyurethane to repel moisture.


3. Swapping Out Kitchen Hardware


Sometimes the simplest changes can add the most value. It should be no surprise that completing kitchen renovations is one of the best ways to increase the value of your home.


But a common misconception is that you must do extensive work to see a high return on your investment (ROI). In actuality, even a minor kitchen remodel can earn you around 78% return on your investment4.


A minor remodel may include replacing cabinets, installing new appliances, or swapping out counter tops. If you want a simple project to get you started that will give your kitchen a newer modern feel, consider swapping out your date kitchen hardware with high quality materials3.


Tools and Materials


-Kitchen hardware (including knobs, pulls, and back plates)

-Screwdriver or electric drill



Tips and Suggestions


1)    Consider matte or satin black finishes, which have been found to be incredibly popular in 2020 and going into 2021, to give your home a sleeker, modern look5.

2)    Invest in a plastic installation template to make sure your hardware is even and lined up correctly.




1 Zillow, Inc. (2018, July 20). Homes with Tuxedo Kitchen Cabinets and Black Front Doors Can Sell Up to $6,000 More than Expected [Press release]. Retrieved September 29, 2021, from http://zillow.mediaroom.com/2018-06-20-Homes-with-Tuxedo-Kitchen-Cabinets-and-Black-Front-Doors-Can-Sell-Up-to-6-000-More-than-Expected


2 Remodeling. (2018, July 06). Canadian Survey Compares Added Value of Nine Renovation Projects. Retrieved September 29, 2021, from https://www.remodeling.hw.net/article/canadian-survey-compares-added-value-of-nine-renovation-projects_c


3 Sagan, A., & The Canadian Press. (2019, October 25). Renovation ideas that will increase the value of your home. Retrieved September 29, 2021, from https://globalnews.ca/news/6081302/home-renovations-with-the-most-value/


4 Little, D. (2021, April 08). Renovations That Add Value to Your Home. Retrieved September 29, 2021, from https://ama.ab.ca/articles/valuable-home-renovations


5 Shaughnessy, J. (2020, December 04). Kitchen Hardware Trends 2021. Retrieved September 29, 2021, from https://jennakateathome.com/kitchen-hardware-trends/#Trends_For_Kitchen_Cabinet_Hardware

Three Untold Benefits to Buying Newly Constructed Home

16. August 2021 13:59

When it comes to real estate, people often say that bigger is better. But what they fail to mention is that newer is also better. If you are in the market for a new home, you should consider all your buying options, including newly constructed homes.


Newly constructed homes are becoming increasingly popular amongst new homebuyers. In July alone, new home construction was up about 16% from the previous month1.


The reason why several buyers are turning to new construction is because it offers multiple benefits that existing homes just cannot provide. Here are three untold benefits to buying a new constructed home that you may not have considered.




1. More Choices, Personalization, and Value


Sometimes buying an existing home might not be the best option if you want a home to truly call your own. That’s because you are buying a property that has already been designed and curated to fit someone else’s taste and aesthetic.


Buying a newly constructed home gives you the freedom and opportunity to make more decisions that have an impact on where and how you live. For example, you can choose your builder, what design you want, and even what neighborhood you want to build in.


Today, homes are built to meet higher quality and standards. Similarly, developments are being designed to foster interaction and togetherness. Often you will see areas designed to incorporate parks, bike paths, and other recreational areas for social gatherings.


But the buck doesn’t stop there. The Canadian Home Builders Association also notes that buying a new construction gives you more choices to personalize and customize your home to make it your own2.


2. GST/HST New Housing Rebates


An added benefit to a newly constructed home is that you can qualify for a tax rebate. Individuals can recover some of the goods and services tax (GST) or the federal part of the harmonized sales tax (HST). Additionally, other provincial new housing rebates may also be available for the provincial part of the HST. This can be used in combination with the rebate for the federal portion, although it may not be available in all areas3.


The rebate applies to buyers who will occupy the subject property as primary residence3. Buyers who will co-own the house with another entity who is not an individual (i.e., corporation, partnership, etc.) cannot qualify for the rebate3.


In general, the house must be a single-unit home (detached or semi-detached), including condos, townhomes, and co-ops, or a duplex3. Mobile or modular homes may also qualify. The property must also be a qualified owner-built home or purchased from a builder. Mobile or modular homes may also qualify3.


Homes that are also going to be used for commercial purposes, such as a bed and breakfast or short-term rental, are also eligible for this incentive provided 50% or more of the property is being used as your primary place of residence3.


If you are a real estate investor, similar rebates are also available although different guidelines apply4. Residential landlords that purchase a new or substantially renovated residential rental property from a builder or construct an addition to a multi-unit rental property can claim a rebate for some of the HST when certain situations apply4.


3. Warranty Protection


It's important that if you do purchase a newly constructed home that the build is completed in a workman-like manner and free of material defects. This is why it’s important to work with a reputable builder.


However, if issues do arise, many homes are covered under warranty. In fact, by law, all new homes in Ontario must be provided with a warranty by a builder5. The warranty is administered by the non-for-profit consumer protection organization called Tarion.


The province’s new home warranty program offers multi-layered protection that covers multiple issues. Throughout the first year the warranty covers defects in materials, as well as protection against unauthorized substitutions and building code violations5.


Overlapping the first year, you also get a two-year warranty that protects against certain foundational issues, windows, plumbing, electrical, and other defects related to major systems within the home5.


Lastly, you can rest assured knowing you are fully protected with an additional final layer of coverage that covers major structural defects defined by the Ontario New Home Warranties Plan Act for up to seven years5.


While there are guidelines and exceptions in place, filing a claim is simple. You can also feel safe knowing you have some recourse buying a newly constructed home, as opposed to an existing dwelling where who knows what hidden issues might be lurking underneath the surface.




1 CBC News. (2020, August 11). New home construction surged in July. Retrieved August 12, 2021, from https://www.cbc.ca/news/business/cmhc-housing-starts-july-1.5681883


2 Canadian Home Builders Association. (n.d.). A New Home - or an Existing One? Retrieved August 12, 2021, from https://www.chba.ca/CHBA/BuyingNew/NewExistingHome.aspx


3 Canada Revenue Agency. (2021, March 12). GST/HST New Housing Rebate. Retrieved August 12, 2021, from https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028/gst-hst-new-housing-rebate.html


4 Canada Revenue Agency. (2020, October 30). GST/HST New Residential Rental Property Rebate. Retrieved August 12, 2021, from https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4231/gst-hst-new-residential-rental-property-rebate.html


5 Tarion. (n.d.). An Outline of Your Warranty. Retrieved August 12, 2021, from https://www.tarion.com/homeowners/your-warranty-coverage/warranty-outline

How to Maintain a Swimming Pool

24. June 2021 11:19

Whether you are laying out, soaking up some rays or hosting a backyard summer barbeque, owning a home with a pool certainly has its perks.


In fact, the number of homeowners that invested in adding a swimming pool to their home went up in 2020, partially to cope with the COVID-19 pandemic1.


Some companies have experienced so much more volume that they are pushing orders into 2022 as the industry experiences a shortage of materials for installation and landscaping2.


But while having a pool is great, there is a lot that goes into maintaining one. It's especially important to make sure your pool is equipped to weather the colder months and for growing families, safety can also be a concern.


After spending days outside splashing in the water and enjoying the sun, here are the key things you should do to help maintain your pool while it's in use and during the off-season.




Check Your Primary Components


Pools have a lot of working systems that you should look over periodically throughout the year. Verifying the pumps and pipes are all in working order becomes even more important when the summer starts to taper off into fall.


As temperatures drop, pipes can freeze and damage systems. Cracks can also form that can cost you a substantial amount of money to remedy.


To help prevent major maintenance and repairs, make sure to drain the water from the heater, filter, and pump with a motorized pump or pool vacuum.


You should also clean your pool walls and floor with a pool brush and use a pool skimmer regularly (don’t forget to check the basket!). Similarly, check and clean your filtration system and replace any older filters where applicable.


Chemicals Are Your Friend


While nobody really loves that residual chlorine smell, the fact is that adding the right chemicals and solutions to your pool will help it survive the winter and last longer.


Algaecide is a tool that many pool providers recommend you add to your water before you close it down in the off-season to help prevent algae from building up. Adding other winterizing products, such as PoolTec's Winter Lay-Up Pool Treatment, will also help prevent bacteria and growth of other microorganisms.


Other enzyme products, such as Pool Perfect, can also be employed to help breakdown contaminants. Things like pollen, bird droppings, and other organic particulates can get into the water which if untreated can cause a ring to form, like a bathtub if left uncleaned for some time.


Rather than scrubbing out your entire pool every year, adding specific solutions to your pool can help reduce the amount of physical maintenance you need to perform throughout the seasons.


Lastly, it's important you maintain the right pH level throughout the year as well as periodically adding chlorine. Many homeowners make the mistake of adding too much chlorine right before winter. However, adding too much chlorine can bleach your pool liner.


Make Sure to Cover Up


One of the best ways to maintain your pool for years to come is to invest in the right pool safety cover. Make sure you get a pool cover that properly fits your pool to help prevent the accumulation of debris, bugs, and other particulates.


If your cover has cables, make sure to check these throughout the winter to make sure they are tight and secure.


An air pillow can be a great investment by protecting your pool from ice and snow damage. It can also help keep your cover secure and stable.


Additionally, keeping the pool maintained may require you to clear your cover of organic matter, such as sticks and leaves during the warmer months, and ice and snow build up during the winter.


Removing ice and snow is important otherwise your cover may stretch and become damaged. Do not use a shovel or anything with sharp edges to remove snow or else you run the risk of puncturing your cover. Instead use a broom to push snow off the cover or a leaf blower for lesser accumulation.


Leave it to the Professionals


Maintaining a pool can be a lot of work. If you are having trouble finding the time to take care of the basic upkeep or are unsure if you are taking care of all the tasks needed to properly open and close your pool for the seasons, consider hiring a professional pool maintenance company.


There is no shame in asking a professional pool maintenance company to maintain the pool especially when opening and closing the pool. In fact, this might be the best option if you only occupy the property on a seasonal basis. Just make sure you do your research and find a reputable pool maintenance company that will give it the proper tender love and care it deserves.




1 Canadian Press. (2020, June 25). CANADA: Homeowners outfitting backyards with pools to deal with COVID-19 pandemic. Retrieved June 17, 2021, from https://www.thoroldtoday.ca/around-ontario/canada-homeowners-outfitting-backyards-with-pools-to-deal-with-covid-19-pandemic-2518791


2 Foran, P. (2021, June 02). Ontario pool companies now taking orders for next summer as pandemic drags on. Retrieved June 17, 2021, from https://toronto.ctvnews.ca/ontario-pool-companies-now-taking-orders-for-next-summer-as-pandemic-drags-on-1.5453687