Home financing

Houses For Sale During a Pandemic

by Bevony on September 16, 2020 No comments

We see people bidding up house prices even though we are in a pandemic and what may turn out to be one of the deepest recessions in history. This is not only true for British Columbia, but we can also see a lot of the real estate market across Canada which is red-hot especially in the market for single-family homes. While this defies all rational logic, it is where we are. People are looking for the security of owning a home even with people losing their jobs and getting pay cuts. 

Herd Following

Herd Following is a theory stumbled upon in 1906 when Francis Galton observed a competition. The competition was for persons to guess the weight of an ox. When all the guesses were averaged, the total average gues was 1,197lbs. The actual weight of the ox was 1,198lbs. Since then, there have been a lot of studies on the theory of collective intelligence which have shown similar results. 

Information from the Canadian Bankers Association indicates that around 15% of mortgages have been deferred, this is a total of 743,000 mortgages. As the days go by, we see that “the reopening” is not going as well as we would’ve wanted it to go. We see infections getting higher and more businesses are going back to closed doors and working from home. Look at Apple, they have closed seven of their area stores in Houston and 14 of their stores in Florida since the reopening. Of course, they have enough cash to afford to close their stores, but other businesses are not as fortunate with a lot of white-collar jobs been axed. 

What are the Banks Doing? 

We see central banks flooding the system with liquidity so much so that free-market price discovery is almost entirely out of the window. And so now we see cash finding its home in hard assets. 

What Does This Mean for Society on a Whole?

We are getting to that tipping point and this is certain to have long-lasting effects on our society. There are several possible outcomes that we must be ready for. 

What We’re Watching

  1. Bond Yields Trading – these are currently at their lowest level in history. 
  2. The US is currently not showing a V shape recovery in current business conditions and this is right across the country. 
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  1. Small businesses that are bringing back all employees account for only 50% of the total small businesses in the US. 
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How SilverBeam Homes can help you in selling your existing home

by Bevony on July 29, 2020 No comments

A lot has changed since the start of this pandemic. People have lost jobs, or are now working fewer hours. While many economies are reopening, there looms the need for further lockdowns. It is obvious that this pandemic is not going anywhere soon, and we now have to adapt our life as we know it to meet these needs. 

While everybody’s situation is different, housing needs are changing for one reason or another. Some persons are finding their family counts reduced as they lose loved ones to the virus while others are seeing an increase as cohabitating becomes are a more affordable and feasible option. Whether you need to go up in the house or go down in the house we can help you. 

How Can SilverBeam Homes Provide You with a Housing Solution?

Sell your old/current home to us and let us help you to construct a new home based on your specific needs. Here, at SilverBeam Homes, we are home builders, but in this crisis, we want to meet you more than halfway. We want to help you with everything from selling your current home. That way you can focus more on the things that need your attention, and we will get the work done for you. 

What You Need to Know Before Buying or Selling a Home 

Buying/Selling a home

Buying/Selling a home was always a huge undertaking. Imagine now doing both in a pandemic! Now more than ever, you have to make sure that you make a very wise choice. Are you currently at that place (between a rock and a hard place) considering the sale of your home and moving your family into a different home?

If your needs have changed, then you have a good enough reason to sell and repurchase or have us build you a new home. The advantage of building a new home is that you now will have the opportunity to have just what you and your family needs. 

Why You May Need to Sell your Home

  1. Your current location has become unsuitable. If your job situation has changed and you now need to travel further for work, it may make sense to move. With many people having lost their jobs in the pandemic, we are now having to really become more flexible and that may mean taking a job that is further away. If you are the sole breadwinner, moving closer to cut commute time could help you better manage your finances. 
  1. Your household as shrunk or grown. Your current house may become too expensive to maintain in the event of a loss. Or maybe your extended family will now need to come live with you or vice versa. Either way, if your space needs have changed, then you will benefit from purchasing a new home. 
  2. Leave sad memories behind. If you lost a family member during the pandemic, even if your space needs haven’t changed, you may want to leave the bad memories behind. If you are financially able to make the move, then selling your current home and moving into a new one may not be a bad idea. 

Real Estate and “Subject To” Clauses 

“Subject To” clauses in contract negotiation are your safety hatch. They allow you a means of escaping a contract in the event that anything goes wrong. You can find a list of clauses from The Real Estate Council of British Columbia’s website. The most common clauses you may come across are;

  1. Subject to Financing 

This type of clause limits your ability to negotiate. The buyer cannot remove this clause at the offer/counteroffer phase. It means the buyer needs a mortgage, so they are making the offer with the hope that they will receive the necessary financing to be able to purchase your home. 

  1. Subject to Inspection 

This clause can be easily negotiated since an inspection takes on average three days to arrange. If you want to get your house sold faster you can ensure that the inspection is completed a lot quicker so the buyer knows exactly what they are getting into. You can even have the inspection done and report ready if a buyer requests it. 

  1. Subject to Sale 

This clause gives your buyers a particular amount of time in which they need to sell their current home. Chances are your buyer can’t afford to be paying for two different homes. So you want to include some time in the clause for them to get their home sold, so they can purchase yours. This is usually a period of 4 to 6 weeks. 

What We Offer 

If you opt to complete your sale and repurchase with SilverBeam homes we can help provide a hassle-free process flow. With us, you don’t have to worry about listing with a realtor. We will offer a cash payment for your house and ensure a speedy closing process. If the funds from your home cannot cover the cost of your new home we can help you by putting you in touch with finance professionals to get the additional funds. 

Contacts us today to recreate your reality and have a home that allows for the execution of our new normal. 

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BevonyHow SilverBeam Homes can help you in selling your existing home

Mortgage Support in Times of Trouble

by Bevony on July 2, 2020 No comments

Many people are facing financial pressure right now due to the global COVID-19 pandemic. Families have lost jobs, lost breadwinners, and have been placed in unique financial circumstances. If you need mortgage support you should not hesitate to speak with a mortgage specialist from your mortgage provider. Check out their websites to find support phone numbers where you can reach specialists.  

Lenders are aware of the challenges and are willing to provide support to meet the needs of their customers. Some have options to even offer long-term support for those who are facing challenging financial circumstances. 

Your mortgage provider has options.

You will find some offering;

To note, taking payment deferrals may not be the best option if you have income coming in. This is because the deferred interest will be added to your outstanding balance later and further interest will be accumulating on your new balance. So be sure to ask the pertinent questions before choosing this option. If you must choose the payment deferral option, here are some ways to deal with while helping to keep your balance from ballooning too much. 

Make a Single Prepayment 

Make an extra payment if or when you can.

If and when your circumstances improve and you have the ability to make one lump sum payment in the amount of your deferred payment this will provide a reduction in the life of your mortgage. 

Persons with the standard closed mortgage have the ability to prepay up to a particular percentage of their original principal amount once in an annual period. 

The prepayment will be applied directly to your mortgage principal. When you get to your renewal date you have the option of making any amount of prepayments to your principal and even have the option for paying off the entire mortgage as well as the option for refinancing without any prepayment charges. 

Make Extra Payments 

Most lenders offer you the option to make extra payments. Find out what your lender allows, for some the extra payments can only be made on the payment date and for others, you can only pay up to a certain amount extra each payment period. 

Any extra payment made is applied to the principal balance and this will end up reducing the life of your mortgage while also saving you money in interest costs. 

Increase Your Payments After the Deferral Period

Typically, you can increase the amount of your payment by up to 10% once in each annual period. The increased payment, of course, goes directly to your principal which means your total interest charges will decrease. This will earn you some savings in the longer term. 

Refinancing your Mortgage 

Refinancing may get you better terms and rates.

If your situation puts you in need of additional funds you may have the option to refinance your mortgage. You can make use of the equity in your home to refinance your current mortgage. This will allow you to readjust the terms and rates of your mortgage. This often works out to be a better way to borrow money rather than taking out an additional loan to meet your needs. 

If you opt to take this route there are a number of variables that you will need to consider. Your mortgage specialist can help you to cover everything in detail. This way you can decide what is the best option for your situation and your needs. 

You can refinance with your current lender or take a look at mortgage rates in British Columbia to see which lender will provide the best option. 

If you are a student there may be additional housing resources available to you that are not mentioned above. 

We hope this information helps you to navigate these difficult times. If you have any tips or advice to add, we’d love to hear in the comments. If you arent already a homeowner and think this is the right time to build, contact us today so we can turn your dream of owning a home into a reality.

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Millennials and Home Buying

by Bevony on April 22, 2020 No comments
Millennials and Home Buying

Sellers are finding creative ways to entice home buyers. You will find anything from apartment builders using clever marketing. Sellers are offering free wine and some go the extreme of offering a lucky home buyer a Tesla! The main focus of this marketing is millennial buyers and renters. These are those people between the ages of 20 and 40 years.  Or if you want to look at it another way; people born between 1980 and 2000. In Canada, that target market makes up approximately 10 million people according to a Nielsen study. This number represents approximately ¼ of the Canadian population so it is a large enough target market.

Why Target the Millenials

The Housing Market is realizing that the Millenials have different values from those of the generations before them. One example of this is the fact that Millenials have a preference for cycling and car-sharing rather than opting to own a car. They are known to be the shoppers looking for organic products, shopping locally and prefer urban lifestyles over rural ones.  

An RBC study done in April 2019, shows a trend of Millenials leaving major Canadian cities for more affordable communities within provinces. Statistics show that on average 9  Millenials are moving from different provinces or countries.  

The statistics show that Millenials are more immersed in the digital age and social media and are inclined to ordering things online. This generation, for the most part, is not looking forward to yard work on a weekend. 

What Everybody Wants

We all want a Happy Family and a Happy Home

Regardless of what era you are born in, there are some things that all potential homebuyers have in common. They want to find homes that are affordable to rent or buy. A CIBC study, published in Bloomberg News shows that 94% of individuals want to buy a home. And there is much variety of available for those who seek homes for purchase. You can find apartments, townhomes, condos duplexes and even have the opportunity to build your dream home from the ground up.

Challenges for Home Buyers

With the stress test that the federal government introduced, some are finding owning a home to be a bit more difficult. As such, one in three Canadians has put off their plans to own a home. This data can be found in a published survey found in the Financial Post. 

After criticism from young voters, the federal government decided to offer the “homebuyer incentive” program. This would mean, one could have a bank mortgage, this “incentive” loan and a student loan. With approximately 35% of millennials still living with their parents, this can be a frustrating thing to consider. This causes a delay for many and their independence which further impacts their lives as they start their families later on in life and thereby produce smaller families. 

In the above report, the comparison was also made with the wealth of Millenials compared to other generations in the Canadian population. The results show that millennials have more wealth, more assets but also more debt than Gen-Xers at their age. The study showed that educated Millenials make more money than their Gen-X counterparts did with 216% for Millenials, 125% for younger Gen-Xers and 80% for baby boomers. 

In addition to the above, there is also a rising tax burden that very often goes overlooked. The taxation of home purchases has increased and is being increased. This has a direct correlation to the affordability of housing options overall. It also has a correlation with the costs of maintaining a home. In Vancouver, we see typical new apartments with government taxes and fees up to 26% of the cost. These fees are often embedded in the final prices of these offerings. 

The Consensus

With all these costs to factor in, most millennials’ only choice is to rent. As per Statistics Canada homeownership rates of millennials versus baby boomers have a noticeable difference. In 1981, boomers of the same age owned homes. The statistics show that in 1981 55.5% of boomers owned homes compared to 30-year-olds today at 50.2%. 

While it is harder for Millenials to purchase a home. They do want to own one. An Environics study shows that they aspire to be financially secure, own a home, have a strong family relationship and achieve in their career. These are the same aspirations of all previous generations. So at the end of the day, we are looking for the same things.

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What is Mortgage Default Insurance?

by Bevony on March 4, 2020 No comments

So you’ve heard about it and now you want to know what is mortgage default insurance. This is one requirement placed upon first time home buyers by the Government of Canada. Who is required to pay this?
Persons that are first-time homeowners.

Persons with a downpayment of less than 20%

Banks are allowed under the Bank Act to lend a maximum of 80% of the purchase price of a home. If you have your 20% downpayment there is no need for mortgage default insurance. If you have your 20% downpayment you will qualify for a conventional mortgage. When you don’t have the required deposit amount you can be granted a high ratio mortgage. In such a case, the insurance company will compensate the mortgage lender in the event that you default on your mortgage.

How to Qualify for Mortgage Default Insurance

If you think you may be eligible for mortgage default insurance, first contact your bank. Find out what are the usual qualifications for a mortgage and find out what the underwriting standards are for your mortgage insurer. Not sure where to find this type of insurance? Contact the Office of the Superintendent of Financial Institutions. They can give you a list of their approved insurers offering this type of insurance. Each insurer from this list will have their own criteria of evaluation so you need to check out if you meet their qualifications as well as if the property you are interested in meets their qualifications for this insurance as well.

Benefits of Mortgage Default Insurance

The primary purpose of mortgage default insurance is to protect the lender. The insurance protects them in the event that you default on your mortgage payment. But it also benefits you. With this insurance, you now are able to purchase your home a lot sooner and with a downpayment as low as 5%.

Important points to note about mortgage default insurance;

  • This does not provide protection to you or your interest in the property purchased in the event that you default, you will lose all.
  • You don’t have coverage for a mortgage payment under this insurance policy. If you are unable to make your payment or if you pass away your mortgage goes into default.
  • This insurance is only available for homes that are priced at less than $1,000,000.
  • Your premium will be calculated as a percentage of the borrowed amount.
  • You can have a lower premium if your down payment is bigger.
  • Payments can be made over a period of 25 years and these can be combined with your monthly mortgage payments.
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BevonyWhat is Mortgage Default Insurance?

Getting a Mortgage When You’re Self Employed

by Bevony on January 8, 2020 No comments

As a self-employed individual, you work hard. However, you may have already experienced hardships in obtaining credit, whether it is for a credit card, any type of loan or a mortgage. This is especially true if your business is new. Why? Because as a self-employed individual you won’t have a standard regular income that a regularly paid employee will have, some institutions will see you as a high risk. There are, however, institutions that have special lending programs just for you.

One example of this is a lending program that allows an eligible self-employed individual to qualify for mortgage financing. In such a case, they use what they call “reasonable stated income” to frame the terms of the loan. This is mainly because some self-employed people choose to reduce their personal income in an effort to grow their business or to be beneficial for tax purposes. Under this type of program, you will be able to access a mortgage that allows up to 65% financing of the purchase price. There is also the confirmed down payment that is necessary as well as a good credit rating. With the last two in place, you can own home as a self-employed individual.

Documents Necessary for Your Application

If you are self-employed, here are some documents you will need for your application for mortgage financing.

  • T1 General
  • NOA – Notice of Assessment
  • Financial Statements for Your Business
  • Articles of Incorporation
  • Business License
  • Business Credit Report
  • GST/HST Return Summary
  • Proof of Other Income if any

In addition to these documents, the mortgage specialist you deal with may ask you for other documents that may be unique to the type of business you offer.

Flexible Mortgage Options

Several entrepreneurs are opting for flexible mortgage options. There are a number of these available including the Homeline Plan from RBC. This is not the only place you can find this type of offering as most lenders have this type of mortgage product. These types of plans allow you to access both your personal and your business credit under one umbrella. If you opt for this you can even customize your mortgage financing and leverage the equity on your current home.

Our team of experts here you can find the financing you need if you choose us to be your custom home builders. Give us a call today and set up a consultation. Let’s show you how our team can help you make your dream a reality.

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BevonyGetting a Mortgage When You’re Self Employed

Closing Day – What You Need To Know

by Bevony on November 6, 2019 No comments

When it is time to close, you may think that it is the end of the road and all will be easy and well. But as it turns out, closing day can be one of the most stressful days of the entire process. Let us get you through closing day.

General practices will often vary but you will find yourself working with several different parties throughout the process of closing. You will find yourself interacting with, the seller or builder, the realtor, a lawyer/ closing agent/ notary and the lawyer or notary of the seller. There will be several financial and legal documents for you to review at closing. There will also be the closing costs which will be many fees including;

  • Your down payment
  • PST and mortgage insurance premiums
  • Title insurance
  • Land transfer tax
  • Property tax
  • Utility bill adjustments
  • Notarial or Legal fees and disbursements Upgrades for your new home construction

Additional Closing Costs

In addition to the above-mentioned costs, you can also have costs related to appliances, furniture and carpeting.

What to Bring to Closing

You should bring to closing, a bank draft for the amount of your closing cost balance. You can find this amount for closing on the document labelled the “buyer’s statement of adjustments”. You will also need to bring your proof of property insurance along with two different forms of ID.

What to Do Before Closing

Ensure you review all documents. This way you have a better understanding of your mortgage, the various fees, the interest rate, the schedule and the payment amount. If you need confirmation, ask questions before you sign any documents. All the experts will be there to answer the questions you have.

When you are comfortable with everything you can now sign your closing documents and the keys to your new home!

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Why You Should Buy New!!

by Bevony on May 22, 2019 No comments

With housing prices falling, purchasing a brand new home is a great investment or those who can afford it. A more buyer favorable housing market means more ROI for you which is always a good thing when purchasing anything and especially housing.

But there are a number of hidden costs involved when purchasing a property – you say.

You may find that more affordable homes can be the older ones, with an older structure there is a high chance that this home will need you to get some amount of work done to get the home up to code. At this point, you may see how something that seems like a great deal can turn out to actually not be. You don’t want to purchase a home that ends up being a money pit and that is reason # 1 to Purchase a Brand New Home – you will get Value for Money. What are things to look out for when looking for your new home?

Location

With new construction, this typically means you are getting a brand new home in an up and coming area. This can mean a lot of benefits which include;

  • Good school districts
  • Low crime rates
  • Great roads
  • Nice parks
  • Nice sidewalks

New Appliances and Warranties

When purchasing a new home, we here at SilverBeam Homes provide a warranty on the property. We do this because we are certain of the quality of our homes and all the materials, techniques and technology that we use to build you a strong, safe home for you and your family. Also, any appliances included with your purchase have never been used and so you don’t have to worry about them conking out within the first month. And that gives you reason # 2 to buy a new home – Peace of Mind.

A Custom Built Home

Here at SilverBeam Homes, we offer you the option to create a customized home that will intimately and precisely meet the needs of you and your family. This is not something you can get when you purchase an older home. And that is reason # 3 supporting why you should purchase a brand new home – The Ability to Customize the Home. You can choose your location, choose your floorplan and choose your amenities.

Immediate Inventory

When it comes to purchasing a home, it is not always smooth sailing. Statistics show that 1 in 5 homes get canceled at closing. So new homes will often offer you a better price and less stress as closing can be done as soon as the next day. You see in these instances, the builders are motivated to sell. We may even have a discount we can offer if you are willing to close earlier. 

Choose the Seller’s Mortgage Company

Going with the mortgage company that your seller works with can help to streamline the entire process. This makes the builder more comfortable as well as it helps the entire process to go through faster and smoother. You may even get some sort of discount or additional offer that make the deal even a little bit sweeter. Opt to ask for other partner companies that the builder works with. These may be companies you need for other things related to purchasing your new home and getting settled in there.

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BevonyWhy You Should Buy New!!

Vancouver House and Condo Price Trends

by Bevony on April 24, 2019 No comments

Are you wondering where house and condo prices in Vancouver are heading? If you are looking to find a new home, then you will be happy to know that these prices are mostly going down. If you are looking to sell your home then this may not be the best news for you. the truth is that house prices have doubled in the last 10 years which equates to price increases of an average of 7% per year while our incomes have only increased on average around 1.5%.

House prices dropped in the summer of 2016 after the foreign buyer tax was introduced but the prices later recovered. The drop back then was a shallow drop and when you think of you, you really wonder just how volatile the market is. The truth is that prices in the Metro Vancouver area have already dropped by 12% which works out to approximately $192,000. While this drop may seem very significant just by looking at the numbers the truth of the matter is that this drop still leaves house prices out of reach for a lot of residents of Vancouver. Residents of the Westside and West Vancouver have been the hardest hit but there have been significant declines in East Vancouver and Richmond as well.

What About Condo Prices?

Within the same timeframe of 10 years, there has been a decline in the prices of Condos as well. This downturn had continued on the downward trend until last summer. While there was a decline in Condo prices it was not as notable as the decline in prices of houses.

What does this Mean for the Market?

With a market like this, buyers have a better chance of getting more house for their money. Sellers, on the other hand, will have to lower their prices to remain competitive and to increase their chances of closing a sale. First-time buyers who have been saving up for buying a home will be happy about the current market statistics but those who don’t have a sizeable amount saved up could still be second guessing buying a home at these prices.

At the end of the day, it all comes down to how much money you make and how much you have saved to help get your home. There are many people who remain in a good position no matter which way the market goes and there are those can just hope and pray that the market continues to show a decline in the price of homes.

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