Edmonton Real Estate Blog

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

If you are planning to purchase a new build. There are two types are mortgages available. Completion or Draw mortgage. A Completion mortgage is when builder does not require funds require funds until property is completed.  Whereas, in terms of a Draw mortgage, the funds are advanced during the building process. The builder will advise which type is required and you simply advise your mortgage associate.

New builds require 6 to 12 months. In which, the mortgage with a one year rate holds will be required. Minimum down payment is 5%, which the builder will require as a deposit.

Borrowers qualify at time of purchase.  Once your purchase contract is signed with the builder, you have roughly 10 days to work with a mortgage associate to get the financing approved. Within those 10 days, buyers will sign documents and provide supporting documentation for the lender to review.

It is important to note that the lender will recheck credit and employment before possession. So, ensure you don’t finance any large purchases since any changes in your circumstance could negatively affect your application and possibly disqualify you completely.

Aside, from the type of mortgage, builders may differ in their process including upgrades. In some cases the purchase contract will includes all upgrades at the time of purchase. So, the client will be required to decide on their upgrades upfront and the mortgage amount can be determined at time of approval.

Whereas, others the purchase contract simply outlines cost of the base model. Upgrades are to be chosen at a later date and a final price quote will be provided a month before completion. In this case, I will estimate the total cost of all upgrades and submit for a mortgage amount that is includes the estimate. When, the final price quote is received then the lender will re-adjust the mortgage amount to reflect actual amount.

Although, different builders may require different types of mortgages or the processes may vary. I can help you get the right mortgage and make your purchasing experience a breeze!

If you need clarification, don’t hesitate to contact me. I would be happy to explain further.

How to identify your best long-term alternative

Have you ever wondered whether it makes more sense to pay off your mortgage or to contribute to a Registered Retirement Savings Plan? Perhaps you’re expecting to receive some extra money from an inheritance or an employment bonus, and you’re not sure which route to take.

The truth is, there is no easy answer. There are many variables that must be taken into account. Concentrating on paying down a mortgage may be the best route for one person, while focusing on an RRSP may benefit another.

Here are some factors to consider:

• Your age. When you’re young, it is wise to make your RRSP a priority. The sooner you get money into a sheltered retirement plan, the longer it will grow on a tax-deferred basis. But don’t overlook the need to build home equity. It can give you a head start on the expenses of moving to a larger home as your family grows.
• Your income. The more you earn, the higher the rate of tax you’ll pay. That means you must earn more in before-tax dollars to make mortgage payments. If you’re a high income earner you may want to quickly reduce this expensive debt.
• Investment returns. Pay attention to the rate of investment returns you could reasonably expect to earn when you contribute to your RRSP. Astute investors could be further ahead by investing their money than paying down the mortgage. The benefits of investing are magnified by an RRSP, with tax-deferred growth within the plan and tax deductions on contributions.
• Your mortgage rate. If your mortgage rate is higher than your expected investment return on your RRSP, then paying down your mortgage may be prudent – especially if you expect borrowing costs to rise in the future. But if your mortgage rate is low, it may make more sense to contribute to an RRSP.
• Are you behind on your RRSP? If you have made less than your maximum annual RRSP contribution in the past, a lump sum could allow you to catch up. You are allowed to make up for unused contribution room that you’ve accumulated from past years – which can also generate a significant tax refund.
• Your pension plan. Those with generous workplace pension plans that provide for a secure retirement may be able to concentrate on a mortgage without giving up financial security in retirement. Of course, you can focus on both your RRSP and mortgage. For example, contribute to your RRSP and then apply the tax refund it generates towards a prepayment on your mortgage.

Sincerely,

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

Homeowners who haven’t listed their property in recent years may be surprised and somewhat skeptical of the advantages of styling or “staging” a home in order to maximize its resale price. However, it is a fact that detailing is very effective. When a professional designer is enlisted to optimize the appearance of a home, it leaves a positive impression on the potential buyers. its not just about style. A proper consultation can identify means of emphasizing a homes best assets, such as improving sightlines with strategic furnishing, or making a room more welcoming with improved lighting, a carpet, or an attractive piece of art. Whether it’s kitchen hardware replacement, new bathroom decor or a fresh coat of paint, property staging is a worthwhile investment. It may require a bit of work, or may involve renting a few items, but is sure to make a home more attractive to potential buyers.

To View & Search All MLS Listed Houses for Sale Visit Us At:

www.EdmontonHomesforSale.biz