31 Jan

Love Where You Live

General

Posted by: Kimberly Livingston

Canadians genuinely celebrate livability within their neighborhood when it comes to choosing a property to buy and live in. These are the qualities that give each homeowner the true satisfaction of his/her home. They are generally determined by a delicate balance of available green spaces, arts and culture, public institutions and local small businesses, as well as housing options.

The 2020 RE/MAX Livability Report further explores these qualities to determine the most important livability factors for Canadians today.

It turns out, livability is so important to Canadians that 8 in 10 (82 percent) would sacrifice at least one desirable attribute to live in a neighborhood that most meets their livability “must-haves”. This report also revealed that 9 out of 10 Canadians (90 percent) love where they live!

Livability is all about living life at the local level. Not surprisingly, the most important criteria for respondents when it comes to these factors is affordability, at the top 61%. While this is nearly double the value of other criteria, Canadians also consider walkability (37%) and proximity to work (34%), as well as proximity to transit, access to green spaces or dog parks, and low-density neighborhoods (all at 30%) to be important livability criteria factors.

Affordability has become a major factor in recent years due to rising house prices and increased financial awareness across the country, due to situations such as COVID-19 requiring a hard look at our personal finances. This report also looked at other personal factors beyond affordability, such as city lovers, suburban families, retirees and luxury seekers to determine the top neighborhoods in the country.

top neighborhoods based on livability criteria

AFFORDABILITY:

If you are someone who has affordability as one of your top livability criteria, hot markets like Vancouver and Toronto are no longer at the top of your list. In fact, if you have been priced out of the city and are looking for an affordable compromise, some of the top neighborhoods include: Boyle Street in Edmonton, Beltline in Calgary and Dartmouth Commons in Halifax, as well as Orleans Chatelaine Village (Ottawa), Clairville (Toronto) and Austin Heights (Vancouver). Some other areas in Winnipeg, Edmonton and Ontario are also suitable for individuals wanting an affordable compromise.

LUXURY SEEKERS:

For those Canadians still focused on luxury with proximity to restaurants and bars as well as access to green spaces, Vancouver and Toronto still rank high. Top neighborhoods in Toronto include West Don Lands and City Place with the top spots in Vancouver being the West End and the Downtown area. Other considerations include Downtown Halifax, Downtown East Village in Calgary and Downtown Edmonton.

CITY LOVERS (NO KIDS):

So you love the city and you have no kids, so you are free to do what you like! If you fall into this category, the major livability factor is proximity to work, transit, restaurants and entertainment, as well as vibrancy and high-density neighborhoods. For these buyers, the top neighborhoods in Canada include: Beltline in Calgary, Downtown Edmonton and Centretown in Ottawa as well as Ryerson (Toronto), Barrington South (Halifax) and Downtown Vancouver.

CITY LOVERS (WITH KIDS):

If you have kids but aren’t quite ready to let go of the city, your top livability factors for 2020 included walkability, access to green spaces as well as proximity to good schools and public transit. The top neighborhoods for these factors included: McCauley in Edmonton, Downtown West End in Calgary and Dartmouth Commons in Halifax. Other neighborhoods for consideration are Lowertown (Ottawa), Corktown (Toronto) and Uptown New Westminster (Vancouver).

SUBURBAN FAMILIES:

For those of you who prefer a more suburban lifestyle, Winnipeg and Edmonton both rank high for low-density neighborhoods, proximity to transit, access to green spaces and affordability. The top neighborhoods included: Bellevue in Edmonton, Greenview in Calgary and Thornhill Park in Halifax. Additional neighborhoods suitable for suburban family living are Orleans Chatelaine Village (Ottawa), Clairville (Toronto) and Mayfair/Pacific Reach (Vancouver).

RETIREES:

Lastly, when it comes to retirees, Edmonton and Halifax are considered the best options due to their vibrancy, green spaces and walking paths, proximity to health care or pharmacies and quietness. Some neighborhoods among the top for retirees include: Mill Woods Park in Edmonton, Melville Cove in Halifax and Belcarra in Vancouver. Additional mentions for retirees include Bridle Path (Toronto), Parkland (Calgary) and Beaverbrook (Ontario).

top neighborhoods in canada’s major cities

This report also broke down the top neighborhoods in Canada’s major cities. The results were:

Victoria: Downtown, North Park and Burnside are among the top neighborhoods due to their abundant green spaces and dog parks, as well as shopping, locally owned restaurants and good schools.

Vancouver: Downtown, Strathcona and Fairview are all notable for their proximity to public transit, green spaces and social spots such as bars, restaurants and shopping. The added outdoor activities available in Vancouver also factors into the livability of these top neighborhoods.

Edmonton: Downtown, Cromdale and McCauley are among the top neighborhoods in Edmonton thanks to their green spaces and dog parks, walkability and proximity to bike lanes, transit, shopping and shorter work commutes.

Calgary: Beltline, Downtown East Village and the Downtown West End are among the top neighborhoods and offer good walkability and bike lanes and access to green spaces and dog parks.

Saskatoon: Central Business District, Kelsey-Woodlawn and Caswell Hill are among the top neighborhoods due to their green spaces, parks, walkability and proximity to retail.

Winnipeg: River Heights, Norwood Flats and Osborne Village are the top three neighborhoods for Winnipeg, boasting proximity to green spaces, parks, transit and retail as well as affordability.

Toronto: Corktown, Kensington Market West and Don Lands are among the top liveable neighborhoods when considering factors such as vibrancy, proximity and green spaces. When it comes to affordability, the top Toronto neighborhoods are Trinity Bellwoods, East York and The Junction.

Halifax: Dartmouth Commons, Kempt Road and Penhorn are among the top neighborhoods for livability, as well as North End Halifax, Downtown Dartmouth and Clayton Park. Each of these options have high walkability and proximity to work and retail.

Saint John (New Brunswick): Millidgeville, East Saint John and Uptown are the most livable and most affordable neighborhoods.

St. John’s (Newfoundland): Churchill Square, Airport Heights and Clovelly Trails are among the top for livability with Galway, Rivers Edge and Grand Meadows in Paradise having the best affordability. All have access to green spaces and close proximity to retail.

Charlottetown: Parkdale, Sherwood and Spring Park are among the most livable neighborhoods in Charlottetown with improvements expected in the next three to five years for accessibility to walking paths and added bike lanes.

27 Jan

Renting Vs. Buying: What You Need to Know!

General

Posted by: Kimberly Livingston

When it comes to the Canadian housing market, there are lots of options for where to live! From renting an apartment to owning a single-family home, it all comes down to where you see yourself living and what you can afford! The beauty is, there is no right or wrong answer when it comes to renting versus buying but let’s break down the pros and cons of both and hopefully help you to decide which is best for you!

why do people rent?

One of the most common answers to this question is affordability. Most people rent because they believe it is cheaper than owning a home. This can be true in some cases, but there are also times when monthly rent costs are higher than monthly mortgage payments. Of course, there are also cases where rent is far more affordable than buying, especially when you factor in the cost of a down payment and maintenance on a home you own, rather than one you rent. Affordability is fairly dependent on an individual’s situation, but it is not the only decision factor for choosing to rent.

Another reason individuals may choose to rent is that they simply aren’t sure where they want to live, or maybe they cannot find a place that fits their needs. If you are new to an area, you may want to rent in the meantime so you can get to know the neighbourhoods and determine which area is the right fit for you. In some cases, you simply may be unable to find a home that is affordable to buy in the area you want or within a reasonable commute from your work.

For individuals who travel a lot for work or like to be free-floating, renting can be the perfect option but if you simply believe buying a home to be out of the question, it is time to take a hard look at your options because it may not be so far fetched!

pros and cons of renting:

To help you decide if renting is right for you, we have put together a little list of pros versus cons to help you see if it is the right fit.

Pros of Renting Cons of Renting
Less maintenance
Fewer repairs
Lower upfront costs
Short-term commitment for people unsure of where they want to plant roots
Protection from potential decrease in property values
Monthly payments may increase
Potential for being evicted / lease renewal not being approved
Paying to someone else’s mortgage instead of building your own equity
Requiring permission to paint or remodel

why do people buy?

According to the most recent data, Canada boasts an overall homeownership rate of 67.8%. Even for those Canadians aged 35 and under, more than 40% of households own their own homes. This is quite an impressive statistic! So, let’s look at why people choose to buy.

One of the main reasons that people choose to buy a home is to have the stability and peace of mind of owning the place you live. This means you are not at risk of being put in a situation where the landlord wants to move their parents into the basement suite and you have to leave or having to deal with increased costs if you go to renew a lease agreement.

For others, the benefit to buying comes in building up equity and ensuring that nest egg for your future. When you choose to rent, you are paying into someone else’s mortgage and into their future but when you work towards buying your own home, suddenly all that money you invested is going to your future instead. This is an extremely important aspect to consider in today’s age when many are having trouble with the idea of saving for retirement.

Now I get it, you may be thinking “if I can’t afford to retire, how can I afford to buy a house” but if you can afford to pay the high cost of rent in today’s market, then home ownership isn’t as far out of reach as you think. This is especially true if you buy a two-story home and rent out the basement, giving you ample living space upstairs but also additional income to pay your mortgage.

pros and cons of buying:

To further show the benefits and costs to buying, we have broken down some pros and cons to help you to determine if this is the right path for you.

Pros of Buying Cons of Buying
Freedom to renovate or modify your home as you wish
You are building up equity in a safe, secure investment as you pay down your mortgage
Potential for additional income if you have a rental suite
Stability and peace of mind from being in control of your investment and owning the place where you live
The risk of losing your home value when you sell
Responsibility for all ongoing costs, including mortgage principal and interest, property taxes, insurance and maintenance
Monthly payments can increase if interest rates go up at renewal time
Possibility of unexpected and potentially costly repairs

to rent or buy, that is the question!

Did you know? 4 in 10 households spend more than 30 per cent of their pre-tax income on rent, which is above the commonly accepted affordability threshold.

The latest National Bank report revealed that monthly mortgage costs for median-priced condos was higher than the average monthly rent for a similar unit in Toronto, Montreal, Vancouver, Victoria and Hamilton. At the same time, monthly mortgage payments were lower than rents in Calgary, Edmonton, Quebec City, Winnipeg and Ottawa. While this data does not include suburbs, it shows a staggering difference between mortgage payments and rent payments.

If someone can rent for $900 a month or pay a mortgage of $1200 a month, it may seem like a no brainer but it is important to remember that paying rent does not build equity! However, if you are unsure of where you want to live or cannot find a suitable and affordable home with a close enough commute to work, renting may be your only option. This is where checking listings and discussing with a real estate agent may open doors and where a mortgage broker can come in handy to help you determine if purchasing a home is viable in your near future.

yes, you can buy!

The reality is that in the long run, homeowners often fare financially better than renters because homeownership enables forced savings that accumulate over the years, growing into a sizeable nest egg.

If you are unhappy renting or really prefer the idea of owning your own home, you CAN. It is time to stop assuming you cannot make the leap from renting to buying – all you need is the right information and the right preparation!

To determine if you are able to purchase a home, a good place to start is the My Mortgage Toolbox app from Dominion Lending Centers. This app is perfect for seeing what you can afford. Using the app to calculate minimum down payments and monthly mortgage costs can help you to get a good picture of the financial landscape and your options. Looking at your budget and evaluating your current rent costs and other monthly expenses can also help you to determine your affordability bracket.

Some other things to consider before buying include:

  • Your credit score – do you have good financial standing to be approved for a mortgage?
  • Your savings – do you have any money put away for a downpayment? If not, do you have wiggle room in your budget to start saving?
  • Your time – do you have the resources to maintain a home from the yard to any necessary repairs?

If buying a home to live in is out of the question due to the availability in your area or cost of homes close to work, another option is to consider an investment opportunity. Maybe you cannot afford to buy in the area you want so you rent in order to keep your commute short and be in a neighbourhood you love. However, you can still reap the equity benefits by investing in a vacation or rental property which would give you the necessary nest egg and help you feel more secure about your future financial situation. You could keep the investment property as long as you want! If you end up finding the perfect home in your area down the line, you could always sell your investment property and take the earnings for a down payment on the right home – or keep it as an extra security blanket!

Regardless of whether you choose to continue renting or make the leap to owning your own home, the most important factor is your financial security. What works for your friend or your parents may not work for you – and that is okay! However, educating yourself and looking into all the options will ensure that, at the end of the day, you are in the best situation for yourself.

I can help you determine if buying is an option for you now or help you prepare to buy in the future. Email me anytime at kimlivingston@shaw.ca

 

20 Jan

First-Time Home Buyer

General

Posted by: Kimberly Livingston

First-Time Home Buyer

Being on the path to purchasing your first home is one of the most exciting and most rewarding moments in life! While people don’t always dream of the perfect mortgage, we do grow up thinking of a white picket fence and our dream home. Even if you imagined your dream home as a 6-bedroom mansion, we all have to start somewhere!

Regardless of whether you’re buying an apartment, townhouse, rancher or two-story family house, there is nothing quite like your first home. Not only is it an amazing accomplishment and a great sense of freedom and security, but buying your first home is also a great step into the real estate market and can provide you equity and a leg-up towards future expansion.

are you ready to own a home?

Before you jump on in, there are some things you should ask yourself. As amazing as it is to be a first-time home buyer, it is important to remember that this is likely the largest financial decision you will ever make. There are a few questions you can ask yourself to make sure you’re ready to take this incredible leap!

  1. Are you financially stable?
  2. Do you have the financial management skills and discipline to handle this large of a purchase?
  3. Are you ready to devote the time to regular home maintenance?
  4. Are you aware of all the costs and responsibilities that come with being a homeowner? Let’s find out!

COSTS OF HOME OWNERSHIP:

There are two major costs of home ownership – let’s make sure you’re ready to take it on!

Upfront Costs: The initial amount of money you need to buy a home, including down payment, closing costs and any applicable taxes.

Ongoing Costs: The continued cost of living in a home you own, including mortgage payments, property taxes, insurance, utility bills, condominium fees (if applicable) and routine repairs and maintenance. It is also important to keep in mind potential major repairs, such as roof replacement or foundation repair, that may be needed now or in the future. In addition, if you choose a property that is not hooked up to municipal services (such as water or sewer) there may be additional maintenance costs to consider.

buying your first home

If you’ve decided to take the plunge, you now need to start by figuring out what you can afford. Fortunately, there are all kinds of calculators and tools available. A great place to start is the free My Mortgage Toolbox app which can help you find a mortgage broker in your area. A mortgage broker is a great alternative to traditional banks and can help you find the best rate in the market, as well as save you time by doing the leg work for you!

Regardless of whether you choose a mortgage broker or traditional bank, the first step begins with your down payment.

SECURING YOUR DOWN PAYMENT

If you are ready to get your first mortgage, you will need a down payment. The minimum down payment on any mortgage in Canada is 5 percent but putting down more is beneficial whenever possible as it will lower the amount being borrowed. However, if you can only afford the minimum that is perfectly okay! Just remember, if you are putting down less than 20 per cent to purchase your home, default insurance will be mandatory to protect the investment.

Ideally, individuals looking to purchase their first home will have built up a nest egg of savings that they can apply towards a down payment. However, we know this is not possible for everyone so if you don’t have it all saved, don’t worry! Besides being a vital savings plan for retirement, RRSPs can be a great resource for first-time home buyers and can be cashed in up to $25,000 individually towards a down payment. In fact, most mortgage brokers will tell you nearly half of all first-time buyers use their RRSPs to help with the payment. Those first buyers who choose this option will have 15 years to pay it back and can defer these payments for up to two years if necessary. Always remember though, deferring a payment can increase the time to pay off the loan and you will still owe the full amount!

Another option for securing your down payment is a gift from a family member, typically a parent. All that is required for this is a signed Gift Letter from the parent (or family member providing the funds) which states that the money does not have to be repaid and a snapshot showing that the gifted funds have been transferred.

MORTGAGE PRE-QUALIFICATION

The first step to realizing the dream of owning your first home is pre-qualification. This process provides you with an estimate of how much you can afford based on your own report of your financial situation. The benefit of this is that it sets the baseline for a realistic price range and allows you to start looking for that perfect home within your means! Now this process is not a mortgage approval, or even a pre-approval but it helps to establish your budget. You must supply an overview of your financial history (income, assets, debt and credit score) but the real requirements come with the pre-approval process where you submit your actual documentation.

MORTGAGE PRE-APPROVAL

This is the meat of the pre-purchase process and determines the actual home price you can afford. The difference between this and pre-qualification is that pre-approval requires submission and verification of your financial history to ensure the most accurate budget to fit your needs.

Pre-Approval can help determine:

  • The maximum amount you can afford to spend
  • The monthly mortgage payment associated with your purchase price range
  • The mortgage rate for your first term

Not only does getting pre-approved make the search easier for you, but helps your real estate agent find the best home in your price range. Temptation will always be to start looking at the very top of your budget, but it is important to remember that there will be fees, such as mandatory closing costs, which can range from 1 to 4% of the purchase price. Factoring these into your maximum budget can help you narrow down a home that is entirely affordable and ensure future financial stability and security.

While getting pre-approved doesn’t commit you to a single lender, but it does guarantee the rate offered to you will be locked in from 90 to 120 days which helps if interest rates rise while you are still shopping. If interest rates actually decrease, you would still be offered the lower rate. Another benefit to pre-approval is that, when it comes time to purchase, pre-approval lets the seller know that securing financing should not be an issue. This is extremely beneficial in competitive markets where lots of offers may be coming in.

PROTECTING YOUR PRE-APPROVAL

  • Refrain from having additional credit reports pulled once you have been pre-approved
  • Refrain from applying for new credit, closing off credit accounts or making large purchases until after the sale is complete
  • Be prepared to show a papertrail – any unusual deposits in your bank account may require explanation. Also if your down payment comes from savings, the bank will want 90 days of statements to ensure the funds are accounted for.

FINANCING APPROVAL

You’re almost there! Financial approval is the last step to getting your mortgage and buying your first home! You will need to keep in mind that just because you are pre-approved, it doesn’t guarantee that the final mortgage application is approved. Being entirely candid with your home-buying team throughout the process will be vital as hidden debt or buying a big ticket item during your 90-120 day pre-approval can change the amount you are able to borrow. It is best to refrain from any major purchases (such as a new car) or life changes (such as changing jobs) until after closing and you have the keys to your new home!

In some cases, pre-approval may not be guaranteed for reasons outside of your control. For instance, if the home was appraised below the purchase price, is a heritage home or has safety issues like asbestos, the lender may deny financing. Find a realtor that will be your advocate while showing you homes and always utilize an appraisal and inspection from foundation to roof to ensure that you do not encounter any hidden roadblocks!

CLOSING DAY

Phew, you made it. Closing day is one of the most exciting moments where all the house hunting and paperwork really pays off! It is on this day that you will want to make use of your lawyer or a notary.

To complete the process of closing the sale, your lender gives your lawyer the mortgage money. You would then pay out the down payment (minus the deposit) and the closing costs (typically 1 to 4% of the purchase price). From there, the lawyer or notary then pays the seller, registers the home in your name and gives you the deed and the keys!

Congratulations, you are now a home owner!!

Don’t hesitate to contact me if I can answer any questions. It’s a journey, buying a home, and one I am happy to help you with!