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.
So you bought your first home! Congratulations, we are super happy for you to have reached this milestone in your life. But what do you do now? We know you are tempted to purchase all the home goods at all the home goods and furniture stores but wait, let’s hold off on all of that for right now. Yes, we understand that your new home is a new start and filling it with a bunch of new things feels like the right thing to do. But let’s face it, there are monetary constraints and it makes no sense to put yourself into debt with a house full of brand new items. So what do we suggest should be the new purchases for your home? Keep reading to find out.
Lighting is a very important factor in every home. In most cases, each room will require different levels of lighting based on how it will be used. Your office may require more lighting than your TV room for instance as well as your bathroom may require more lighting than your bedroom. The fact of the matter is you will need lighting before you attempt to move anything into your new house so let’s start here.
2. Window Treatments
Window Treatments – the jury is still out whether you should take care of lighting before you take care of the window treatments. These window treatments can really add some happiness to an empty room and they can also keep outside eyes from seeing what’s going on in your house while you are unpacking, moving in, sorting out your space. They can also keep the wandering eyes from knowing that your living room is still empty even though you moved into your new home three months ago. I hear you though, you haven’t got the color scheme and design all figured out yet. You can start off with basic window treatments that are only for allowing privacy. Get some drab drapes or some basic blinds until you have your full design figured out.
3. Side/End Tables
Side/End Tables – you never realize just how important these little pieces of furniture are until you have nowhere to place stuff. The great thing about these is even if you haven’t decided on your design theme or color story you can find neutral tables that can later fit into your chosen theme or story. These tables are very versatile and as such provide you with an exceptional bang for your buck since they can be placed in every room in your home.
4. The Necessities
The Necessities – now we cant list these out for you as these are different for each family. You will need to take stock of all home items you already own and first get those into space. Remember you can always change out into new things later, but for right away we want you to take all functional items that are still working and move them into your new space. Its all about making responsible fiscal decisions. Choose necessities that you don’t currently own and start with those purchases first.
While we understand that each homewoners needs are different going into their first home this list is a great place to start. It wont be a complete list for many and there may even be unnecessary things on there for some but it gives you a good idea to start off your new home purcashing or wish list with.
After a 2018 survey, it was found that residents of Metro Vancouver wanted to see a reduction in the cost of homes. Fast forward to May 2019 and we can safely say that they have been granted their wish. Even so, there are some people who simply cannot afford to purchase a home.
If you are one of those, you don’t have to worry about giving up on your dream of owning a home. Co-ownership of a home can provide you and a friend or family member the ability to meet your dreams. What is co-ownership and how can you go about getting a co-owned home?
What is Co-Ownership?
With co-ownership of a home, there is a difference from that of a shared home as in a husband and wife situation. With co-ownership, you can split the homeownership percentage however you find necessary for your situation. So it could be split 50/50 or it could be split 30/70. A co-ownership even allows you the option to have separate mortgage payments. This is one of the high points of this type of arrangement. Especially if you are going into this deal with a friend. In such a case it is understandable that you will need a clear separation. This includes separation of ownership and expenses related to the new home.
Challenges of Co-Ownership
Co-ownership can help you find a way to own a home but it can also have its downsides. Though you get to explicitly determine how much percentage of the house each owner gets there are challenges. It will be hard to draw these lines physically in the home space. This is due to the fact that many homes are not designed for co-ownership and as such there will be a lot of shared areas. The best way to forego this challenge is to choose to build your co-owned home from scratch. That’s where us here at SilverBeamHomes come in. Check out our process and get in touch with us so we can help make your dream of owning a home a reality.
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.