Edmonton Real Estate Blog

You’ve found a house that you like but it needs improvements. The Purchase Plus Improvement program will allow you to add the renovation cost to the purchase price, so you can benefit from a low mortgage interest rate and make only one payment.
Before, you go and make an offer, there are a few conditions that will help determine whether this program suits your needs. One of the first misunderstandings with Purchase Plus Improvement, is that most people do not realize that they will have to pay for the renovations themselves, until the work is completed. The lender will mandate that the solicitor “hold back” the additional cost added to the mortgage, that represents the improvement amount. Once the work has been completed, an appraiser will have to supply the lender with an inspection report, to verify the work has been completed as agreed. The lender will instruct the solicitor to release the funds from his trust account, to pay for the improvements. My advice in these circumstances, is to take advantage of family, or lines of credit to finance these costs until completion. Some renovation companies my not require payment until work is complete.
Secondly, CMHC and Genworth both have guidelines regarding maximum improvement allowance. The improvements cannot exceed 10% of improved value or $40,000.
Thirdly, before I can submit this type of transaction to the lending institution, you will need to supply me with a quote and/or a renovation contract. For self-renovations provide cost of supplies from Home Depot/ Rona. Note, lender will not pay for borrower’s own labor.

Please ensure to keep all invoices and receipts. All invoices and receipt must also be provided to the lender before instructions are sent to the lawyer to release funds. The cost of appraisal is the responsibility of the borrower.
Here is an example of a Purchase Plus Improvement mortgage. The house is priced at $300,000 but it needs another $20,000 in renovations. You can add in the renovations cost to the purchase price and CMHC or Genworth will lend against the total value (purchase price plus the renovation cost).
Purchase price $300,000
Renovations $20,000
Total cost $320,000
Lending value $320,000
Max. Mortgage $304,000 (95% of $320,000)
Min. down payment $ 16,000
Please don’t hesitate to contact me if you have any questions or require additional information.

Do you have stuff in your home that you need to sell? Perhaps you have some suits or dresses that no longer fit, an older living room set that you’ve just had replaced, or a vinyl record collection you’ve been hanging onto for years.
If a traditional garage sale is not an option for you, there are other ways to sell those items.
For example, you could rent a stall for the weekend at a local flea market. This is relatively inexpensive and can be a fun activity for the whole family.
Another option is to advertise in your local community newspaper. Advertising rates in local publications are often much lower than in major newspapers.
You can also advertise on the internet. There are several popular sites, such as Craigslist.com and eBayClassifieds.com (Kijiji.com in Canada) where you can advertise for free.

Consider this scenario for a moment, the individual on the left invested $2,000 a year for nine years, a total of only $18,000 at which time she became disabled and stopped investing. Her friend on the right took the disability as a wake up call and decided it was time to start her own $2,000 a year investment program but she’s starting nine years later. At the age of 65, when they’re both ready to retire, there is still a difference in their investments even after one of them invested $70,000 over 35 years.

Douglas J. Bodtcher                               
Investors Group Financial Services Inc.
780-448-1988 ext. 284

As, April 19, 2010, CMHC made changes to minimum down payment requirement for purchasing rental/investment property. Also, rental income allowance to help qualify has been reduced. Ultimately both initiatives have made it more difficult for investors to purchase additional properties.

In order to purchase a rental property, minimum 20% down is required, hence, making it conventional. For investors to acquire multiple units, they will need to qualify for the mortgages using their own income and rental income.

Different lenders use different formulas for rental income. It is important to ensure you maximize your purchase power by using lenders that will allow more of your rental income.

The most conservative lenders use only 50% of the rental income. This amount is added to the applicant’s income and maximum 44% of that income can be used for housing costs and debt (i.e. Mortgage payment, property tax and heat)

Some lenders will allow you to use all of your rental income given they are declared and verified on your income taxes. These lenders will simply take the positive cash flow to add to your income or add the deficit as a liability.

Other lenders will use a rental worksheet. These worksheets will equate to 70% utilization of rental income.

Since, rental properties are not insured, each lender has their own nuances on requirements. This is where it gets tricky. In cases where investors’ portfolios include multiple units it is important to work with a mortgage associate prior to purchasing to review the portfolio and discuss various options. Also, since large portfolios also involve more documentation it would speed the purchasing process to ensure all documentation is in order.

Feel free to call if you have any questions or would like some more information.

When you’re looking for a new home, you want to find one in a great neighbourhood – or, at least, in a neighbourhood that is on the upswing. How can you tell if a particular area is improving? Here are some common indicators:

• Pride of ownership. Take a walk around the neighbourhood. Do you get a sense that people take good care of their homes? Are the lawns mowed? Is the landscaping trimmed? Are flowers planted? Homeowners are more likely to look after their properties when they like where they are living.

• Home improvements. Are people investing in their homes? Are they getting their driveways re-done? Their windows replaced? Are there signs of home improvement projects? If so, this is a clear indication that homeowners like the area enough to invest in their properties.

• Real estate sales activity. Do homes tend to sell quickly in the area? Do they sell for a good price? If so, the neighbourhood is probably in demand. If people want to live there, it’s a desirable area. • Business investment. Are businesses investing in the surrounding area? Is there an increase in the number of upscale shops, health clubs, restaurants, and other commercial enterprises that often locate near desirable neighbourhoods?

• Community involvement. Are there signs that the community plays an active role in the look and lifestyle of the neighbourhood? Are there neighbourhood picnics, yard sales and other get-togethers? Check Facebook.com to see if the neighbourhood has a community page.

• City plans. Find out what plans the city has for the area. Will there be road improvements done in the near future? Are there any major construction projects on the schedule, such as a new school or community centre. Although such projects can be disruptive in the short term, they may improve the neighbourhood – and, as a result, boost the value of any home you buy – in the long-term Of course, the best way to find out the desirability of a neighbourhood is to talk to a good REALTOR® who knows the area. Call today 780-634-8151

To view and search all MLS listed houses for sale visit us at www.EdmontonHomesForSale.biz

The average university graduate earns almost twice as much as someone with a high school diploma. Over a 30 year career, that could add up to $1.1 million of additional income.1

A $208.33 monthly contribution to an RESP for 18 years combined with a $500 annual government grant for 14.4 years compounded at 6.5% over 18 years can provide you with a pre-tax market value of $99,018 to finance a post secondary education.2

Feel free to contact with questions or more information

Douglas J. Bodtcher                               
Investors Group Financial Services Inc.
780-448-1988 ext. 284

1 2001 Census Data – Statistics Canada. Average earnings for a High School graduate: $34,631; for a University graduate: $61,156. Assuming an average annual inflation rate of 1.99% (Bank of Canada,
June 1997 – June 2012), the difference over 30 working years will total $1,095,765.
2 Assuming a $208.33 lump sum contribution on the first of each month, a $500 annual Canada Education Savings Grant (CESG) for 14 years and a $200 CESG in year 15 providing a maximum $7,200 lifetime
CESG. The CESG and Canada Learning Bond (CLB) are provided by the Government of Canada. CLB eligibility depends on family income levels. Some provinces make education savings grants available to
their residents. The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values or returns on investment.
Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment
advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant.
™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations.
“Kids need to learn to earn”© Investors Group Inc. 2012 MP1286 (08/2012)

Prettify your porch or patio with these time-sensitive decorating boosts you can do yourself

With advance planning and perhaps a few friends to help (bribe them with dinner out), you can make a big difference in your patio in a single weekend. Arranged from fast and easy (hang lanterns, make a repurposed table) to more time- and labor-intensive (create a canopy, paint the floor) projects, these DIYs are sure to offer something to suit your time commitment and style

1. Make a quick table. Cluster a trio of ceramic garden stools together and top them with a glass tabletop for a nearly instant outdoor coffee table.

2. Warm up a look with candles and solar lights. Enhance the ambience at night by setting out lanterns filled with votive or battery-operated candles, solar garden lights and string lights. Try surrounding your seating area with lights, light up the pathway or place lights in the landscaping along a fence line.

3. Enhance your seating area with a backrest. Use a small curtain rod with decorative finials to re-create the look of this eclectic patio seating area. Just be sure to measure the hanging height of your rod with someone seated there — you don’t want it so low that it will be bumped into. Finish by sewing fabric ties to a rectangular cushion and hang it from the rod.

4. Try a wall planter. Jazz up a big, empty wall with a wall-mounted garden. Use store-bought planters designed for this purpose or fashion your own using found materials.

5. Add style and privacy with outdoor curtains. Outdoor curtains can be pulled closed to block unsavory views, provide privacy from close neighbors and shade you from the sun — and even when open, they add to the ambience.

If you have any sort of framework or roof on your patio, you can attach curtain rods. Be sure to choose hardware and curtains meant for outdoor use for the most durability.

6. Repaint outdoor furniture. Give your old patio furniture a lift with a bright new coat of paint. Even metal furniture can be repainted — look for a paint designed for use on metal, such as Rust-Oleum.

Don’t feel like doing it yourself? Have your metal patio set powder coated at an auto paint shop instead.

7. Create a chic new floor with gravel. If the only space you have to work with has a floor made of cracked concrete or unsightly asphalt, consider covering it up with a few inches of compacted, crushed gravel.

8. Build a unique planter from cinder blocks. Architectural photographer Zack Benson came up with the innovative idea of using stacked and glued cinder blocks to create a cheap and easy DIY succulent planter. You can find more information about this project on his blog.

9. Filter the light. Unfurl rolls of bamboo trellising over a pergola or similar structure (free of plants) to form a roof that will protect you from the sun. If you can climb a ladder and wield a hammer, this should be a pretty doable weekend project. Attach the bamboo using a heavy-duty staple gun or by hammering in U-shaped nails.

10. String up a canopy. Whip up a lovely, albeit temporary, outdoor roof by tying lengths of lightweight fabric to bamboo stakes, fence posts or even a nearby tree.

11. Paint the ceiling or floor. If you have a covered patio, paint the ceiling for a major lift. Pale blue and sunshine yellow are great foolproof options.

If you have a cement or wood floor on your patio, consider giving it a new look with a few coats of porch and floor paint.

12. Get crafty with stripes or stencils. Take your floor paint job to the next level by painting wide stripes or layering stenciled designs over a solid base color.

Turn Your Carport Into an Outdoor Dining Room

Source: Houzz.com

A good credit report and credit score are important factors in determining whether or not you will be approved for a mortgage. Here are some simple steps you can take to maintain a good credit history and improve your chances of being approved.

What is a Credit Score

Your credit score is a number that illustrates your financial health at a specific point in time. It also serves as an indicator of your financial past, and how consistently you pay off your bills and debts. This is one of the factors mortgage professionals consider in qualifying you for a mortgage.

How to Check Your Credit Score

To find out your credit score, contact Canada’s two credit-reporting agencies: Equifax Canada at www.equifax.ca and TransUnion Canada at www.transunion.ca.

For a fee, these agencies will provide you with an online copy of your credit score as well as a credit report – a detailed summary of your credit history, employment history and personal financial information on file. You can also obtain a free copy of your credit report by mail. If you find any errors in your report, notify the credit-reporting agency and the organization responsible for the inaccuracy immediately.

If You Do Not Have a Credit Score

It’s important to begin building a credit history as early as possible. You can begin to build one by applying for – and responsibly using – a credit card. Your financial institution or mortgage professional can help.

How to Improve Your Credit Score

Demonstrating your ability to manage credit is key to maintaining a good credit score. There are a number of things you can do to improve your credit score.

These include:

• Always pay your bills in full and on time. If you cannot pay the full amount, try to pay at least the required minimum shown on your monthly statement.

• Pay off your debts (such as loans, credit cards, lines of credit, etc.) as quickly as possible.

• Never go over the limit on your credit cards, and try to keep your balances well below the limits.

• Reduce the number of credit card or loan applications you make.

Once your credit score has improved, work with your mortgage professional to obtain a mortgage that works for you.

Find Out More

To find out more about credit scores and reports, visit the Financial Consumer Agency of Canada website at http://www.fcac-acfc.gc.ca and download or request a free copy of their guide, Understanding Your Credit Report and Credit Score. This guide provides practical, straightforward information on how to obtain and understand your credit report and score, as well as how to build and maintain a good credit.

Source: CMHC Resource

Many Canadians wait until the RRSP deadline each year to make their annual contribution, but they may be leaving the possibility of increased investment returns on the table. There really is a tangible benefit to making RRSP contributions early. Investing annually on January 1 can make a significant difference but, if your budget won’t allow for that, talk to us about the value of monthly contributions.

Feel free to contact with questions or more information

Douglas J. Bodtcher                               
Investors Group Financial Services Inc.
780-448-1988 ext. 284