The Mitten Real Estate Team

Introduction:

Thank you for visiting our blog, this week for our weekly blog article we would like to talk about the area of financing your real estate purchase.  Financing is a very important consideration when you are thinking of purchasing real estate. The reason for this is first, unless you have a lot of cash you won’t be able to make a purchase without financing and second, if a buyer ca not get financing at a reasonable interest rate and amortization the cost of financing may be too great.  Therefore it is very important for most buyers to be able to obtain financing at an affordable cost.  Additionally, for self-employed people buying a home or investment property can be a bit more challenging as lenders have added additional requirements that self-employed people must meet in order to qualify for financing.

If you are thinking of buying a home and need financing and especially if you are self-employed, understanding the requirements lenders will want you to meet is very important.  Equally important is receiving expert advice on the financing of your home.  While we are experts in the area of purchasing, selling and marketing real estate we are not mortgage brokers.  That is why if our clients are not yet working with a mortgage broker we put them in touch with an experienced mortgage broker who can guide them through the process of financing. 

Thus we would like bring you what some information about what is required for self-employed people to qualify for financing for Ken McLellan and Marcy Koopmans, who are experienced mortgage brokers with Canadian Mortgage Experts.

Here is What Mortgage Brokers Ken McLellan and Marcy Koopmans Had To Say:

A survey from the Canadian Federation of Independent Businesses indicates that for the first time in 4 months, “small businesses report higher levels of optimism.” The report from CKNW notes that while scores from 65-75 point to a growing economy, BC’s score rose from 56.4 in August to 59 in October, and that this reflects a similar trend across the country. It’s been clear for some time now that small businesses and self employment are more popular career choices than ever before, and while being your own boss comes with unique challenges and costs, there is no denying the appeal. New Westminster itself is home to many small businesses, and in fact, it’s one of the things that I most enjoy about the city. I could go on about the mix of independent and chain business and their locations in New West, but what I would really like to address is what to expect if you are working for yourself (also known as “business for self” or BFS) and you need to get a mortgage.

Where do you start?

If currently have a mortgage that you got while you were working at a regularly paying job, then you will likely be given a renewal offer by your lender when your mortgage maturity date comes up (i.e. the end of the term you initially agreed to, usually 5 years). This will be based on what they are currently offering for rates, though little else will change. Accepting a renewal offer usually means the lender does not re-qualify you; they don’t ask again for your pay stub or job letter or check your credit, as they assume if you’ve been making all your payments that you’re in the same financial situation as when your relationship began. However, if you are now BFS and want to switch to a new lender or you are getting an entirely new mortgage, then there are some pieces of information that it’s important to know.

The paperwork

Most lenders, if they are to give you their best available rate, want to see 2 years of employment. This goes for regular jobs as well, though there are exceptions for if you’ve just started at a new company but have been in the industry for many years, or you have just left school and begun working in a related field to your studies. The same goes for self-employed individuals. The difference is in how they calculate your yearly income. With a regular employee, the most recent year’s income can be used. For self-employed borrowers, however, a two-year average, taken from T4s or notices of assessment, is used (this is also how lenders will calculate and verify part-time work). In addition, lenders will usually want to see proof of business for self in the form of the business’s articles of incorporation or accountant-prepared T1 Generals. There are other programs available that don’t require income verification like this, however due to the increased risk to the lender, the borrower will need to pay a higher interest rate. Basically, what is most important for BFS borrowers is to have been working for themselves for at least two years, to have all tax documentation in order, and to have a realistic idea of how much money they made over those two years.

Every borrower is different

There are so many variables that can change what a particular person needs in a mortgage, so it’s fairly impossible to give universal advice. Furthermore, each lender is going to have its own standardsand requirements. In the BFS category, the requirements used to be less stringent, but as more and more people have been quitting their corporate jobs, and as the economy has struggled in other ways, lenders have tightened up their expectations for this kind of borrower. This is where a mortgage broker can really make a difference with increased knowledge of how to navigate borrowing when you’re self-employed

Ken and Marcy’s Blog can be found here:

http://newwestmortgages.ca/working-for-yourself/

Here is a link to their website:

http://newwestmortgages.ca/about/

Conclusion:

As you can see from the comments above self-employed buyers do need to meet a few extra requirements compared to those with conventional employment.  However with the right guidance getting satisfactory financing for you next real estate purchase can be accomplished.

If you have any questions about this article or any other real estate related questions please feel free to contact us we would be happy to assist you. We can be contacted through this website or you can phone us directly at 604-882-8384.

Sincerely,

Doug, Bonnie and David Mitten

(Mitten Real Estate Team)

Introduction:

At Mitten Real Estate Team we would like to thank you for reading our blog.  This Week we are pleased to bring you our latest Blog article courtesy of the Fraser Valley Real Estste Board that we are a member of. This report gives some details of the market activity in the Fraser Valley during October of 2014, it is our hope that this article will be informative to both our current and potential clients.

Fraser Valley Real Estate Board's Comments on Report:

During October 2014 the Fraser Valley Real Estate Board processed 1,448 sales on its Multiple Listing Service (MLS®), an increase of 16 per cent compared to the 1,249 sales during the same month last year and 2 per cent more than in September.Fraser Valley Real Estate Board’s president, says, “Sales overall continue to outperform last year and as we’ve seen for anumber of months now are the best they’ve been in five years.

“Demand remains steady in our region for single family detached homes and townhomes. Last month, the market share of sales of single family homes increased by almost five per cent compared to last year; while the share of condo sales decreased by the same amount and we’re seeing that preference reflected in prices.”   

The MLS® Home Price Index (MLS® HPI) benchmark price of a detached home in October was $573,500 an increase of 4 per cent compared to October 2013, when it was $551,400.  The MLS® HPI benchmark price of townhouses increased 1 per cent from $295,500 in October 2013 to $298,500 last month. The benchmark price of apartments decreased year‐over‐year by 3.5 per cent, going from $199,500 in
October of last year to $192,600 in October 2014. In the last five years, the MLS® HPI benchmark price of a detached home in the Fraser Valley has increased by 16.6 per cent. For townhouses, the price is flat having increased by 0.5 per cent and for apartments; the price has decreased by 6 per cent.  The Board's President adds, “With the influx of new developments and a steady supply of resale units, we’ve never had a better selection of condos than we do right now at prices the lowest they’ve been in years. For those that say housing isn’t affordable in Metro Vancouver, you need to check out the opportunities currently for condo buyers in the Valley.”     

In October, new listings in the Fraser Valley increased by 3 per cent, going from 2,336 last year to 2,395 last month taking the number of active listings to 8,807, a decrease of 3 per cent compared to the 9,047 active listings in October of 2013. “Inventory is edging down, which is typical for this time of year,” says the board president. “The result is we’re seeing good quality homes that are priced right moving quickly.”

Conclusion:

If you would like to read the full PDF report pleas click on the link below:

http://www.fvreb.bc.ca/statistics/Package%20201410.pdf

As always if you have any questions about this article or any other real estate realted questions please feel free to contact us we would be happy to help you. we can be contacted through this website or you can phone us directly at 604-882-8384.

Sincerely,

Doug, Bonnie and David Mitten

(Mitten Real Estate Team)

Introduction:

At Mitten Real Estate Team we are pleased to bring you this week's Blog article which  focuses on the typical expenses that you can expect when you are buying or selling your home.  We are bringing this article in the hopes that it will be a useful resource to both our current and potential clients.  The information we are providing is part of our  “Buyer Assistance Program”  and has been designed, after years of successfully assisting people to find and acquire the perfect property for them and to assist our clients in achieving thier real estate goals.  We will also provide information on the expenses that sellers can expect which derived from our "Seller's Assistance Program", which seeks to educate sellers on all the cost of selling.

Buyer Expenses:

One of the things which is important to buyers is that they know what the typical expenses involved in a purchase will be.  Accordingly we have put together the following outline of typical expenses which one would see in a typical purchase in the area which we service. It should be noted that each transaction is unique and may carry with it unique expenses and in order to ensure that you are fully apprised of all expense on your transaction you should work with a reputable real estate agent that you trust.

1.)     Home inspection:                                   $450.00 - $900.00

A Home inspection usually occurs after a buyer puts an accepted offer on a home, they will have the home inspected by a qualified home inspect to determine if there are any problems with the home before the buyer removes the subjects on thier offer.  This is very important in protecting buyers from hidden problems with a home.

2.)         Appraisal:                                                $150.00 - $400.00

An appraisal of the homes value is often times required by a bank before they will provide financing to the buyer, some banks do provide the appraisal for free while others may require potential buyers to pay for the appraisal.

3.)         Site Survey:                                            $400.00 - $600.00

A Site Survey essentailly shows the position of the buildings on the property to ensure that any buildings are infact within the property boundaries and are not over any property lines. A  Site Survey may be required as a condition of financing, alternativley title insurance can often times be obtained.  In Some cases there may already be a fairly recent site surey for a home however it is not always avalible in which ase a buyer may have to pay to have one produced.

4.)         Property Transfer Tax:                          1% on the first $200,000 and 2% there-after.

The Property Transfer Tax is a government imposed tax which buyers must pay when they purchase real estate.  There are certain exemptions that you may qualify for, so please contact us if you are thinking of buying or selling and we can disscus if you qualify for any exemptions.

5.)         Legal Fees:                                             $750.00 - $1500.00

6.)         Property Tax Adjustment:              Cost is dependant on the property taxes for the property.

The Property tax adjustment results from a monitary adjustment based on the amount of time the buyer and seller own the property during the purchase year.  

For Example if the buyer took possesion of the property on October 31, they would have to repay the seller for the remaining two months worth of property taxes which the seller would have already paid to the municipality.  Conversly. if the sale took place in march the seller would have to repay the buyer for property taxes due later in the year (that cover the whole year) that have not yet been paid by the seller.

7.)       Septic Inspection:                                       $600.00- $1,000.00

A Septic inspection is only required if the home uses a septic system to treat sewage.  If the home does use a septic system it is important to have the septic system inspected by a qualified septic inspector to insure it is in good working order (a new septic system can cost in excess of $20,000 - $30,000) or if repairs are required.

8.)        Water Test:                                                    $300.00 - $500.00                                                       

A Water Test is only usually required if the home is using a well.   A water Test is usually taken by taking a sample of the water from a property to a lab where they determine if it meets the standards set for drinking water.

9.)     Home Insurance:                                Cost is dependant on the replacement value of the home 

10.)   GST:                                                     Not usually payable on used residetial real estate 

GST is payable on all real estate,  EXCEPT USED RESIDENTIAL REAL ESTATE.  However thier are a few exceptions to this exemption.     This means that purchasers of bare land and new construction homes are usually required to pay GST while most purchasers of used residential real estate (for personal use) are not usually required to pay GST.

Seller Expenses:

In Addition to thier being costs associated with buying real estate there are also cost associated with selling real estate.  the following list should provide a good idea of what costs you can expect to incur when selling real estate.

1.)  Real Estate Fees:                                          Typicall 7% on first 100,000 and 2.5% there-after.

The real estate fees are split between the buyer's agent and the seller's agent.  The Real Estate Fees cover the cost of determining the value of the home, Marketing and advertising, MLS fees, strata documents,advise on sale preprations, negotiations, real estate agents time, equipment and signs, etc...  Real Estate fees are usually only payable if your home is suscessfully sold.

2.)  Legal Fees:                                                  $500.00 - $600.00

3.)  Prepayment Penalty for Mortgage:               Depends on mortgage terms.

A Pre-Payment Penalty on a mortgage cost depends on the terms of the mortgage.  Often times a bank may make a seller pay a penalty for paying off the mortgage early. In some case the bank may wave this penalty but in other cases they may require a seler to pay it.

4.) Property Tax Adjustment:                       Depends on time of prucahse and cost of property taxes

As was discussed in the buyers expenses section, this is a monitary adjustment based on the amount of time the buyer and seller own the property during the purchase year.  

For Example if the buyer took possesion of the property on October 31, they would have to repay the seller for the remaining two months worth of property taxes which the seller would have already paid to the municipality.  Conversly if the sale took place in march the seller would have to repay the buyer for property taxes due later in the year (that cover the whole year) that have not yet been paid by the seller.

Conclusion:

As always if you have any questions about this article or any other real estate realted questions please feel free to contact us we would be happy to assist you  we can be contacted through this website or you can call us directly at 604-882-8384.

 Additionally to be sure you are fully and correctly informed of all of the cost realted to your purchase and sale and to recieve the best quality service please employ us to assist you, we would be honored to assist you with your next home purchase or sale.

Sincerely,

Doug, Bonnie and David Mitten

(Mitten Real Estate Team)

Introduction:

This week for our latest blog article we would like to give you some advice on how to keep you home safe while you are away or on vaction.  Since theft and vandlism is something that every home owner worries about while they are away we hope this article will be a useful tool in helping to keep you home safe while you are away.

Idea #1:  Suspend newspaper delivery and arrange for someone to pick up your mail, this will prevent mail or newspapers from stacking up, which gives aways that you are not home.

Idea #2:  Ensure all doors and windows are locked - for sliding glass doors, use locks specially designed to prevent the door from being lifted out of its track.

Home Window Lock

Idea #3: Use timers to turn lights, and possibly the TV or radio, on/off during the day and night.

Home Light Timer

Idea #4:   Have someone cut/water the lawn if you plan to be away for more than a week.

Idea #5:  Turn the volume down on the telephone so anyone outside can't hear it ringing for extended periods.

Idea #6:  Leave a generic message on your answering machine - never say that you are away on vaction.

Idea #7:  Secure all tools and ladders so they can't be used to break into your home.

Idea #8:  Trim shrubbery around doors and windows so there's nothing to conceal the actions of would-be intruders.

Idea #9:   Leave blinds or curtains in normal position - don't close them completely.

Idea #10:  Consider installing security bars on basement windows, especially those shielded from view or in the back of the house.

Idea #11:  Close and lock the garage door. You might even want to unplug your electric garage door opener and put a lock in the track of the garage door to prevent it from being forced open.

Garage Door Lock

Idea #12:  Remove anything of extreme value and put it in a safe place while you're gone.

Idea #13:  Make sure your home insurance doesn't expire while you're out of town and that it provides adequate coverage for your belongings.

Idea #14:  Tell someone where you're going, how to reach you in case of an emergency and when you'll be back.

Idea #15:  Ask a reliable neighbour to 'keep an eye' on your home and report anything suspicious to police.

Idea #16: Consider asking someone you trust to "house sit", especially if you plan to be away for an extended period of time.   If you notice signs of forced entry when you return home, do not go inside! Call the police from your cell phone or a neighbour's house.  Do not enter the house until you know there is no one hidding inside as many criminals may have weapons and be very damgerous or even mentally un-stable so it is best to avoid any chances of a direct confict.

Conclusion:

To Conclude we hope these ideas will help you keep you home safe while you are away on vacation.  If you have any real estate questions or are thinking of buying or selling your home we would be please to assist you.  You can contact us through this site or call us at 604-882-8384.

Sincerely,

Doug, Bonnie and David Mitten

(Mitten Real Estate Team)

Introduction:

This week at Mitten Real Estate Team we are pleased to bring you a market update on Fort Langley.  This article was created as part of our ongoing market research and we hope it will be informative to both our current and prospective clients.  If you have any questions please feel free to ask!

Community Description:

Fort Langley is Langley's oldest community and is the Birth Place of British Columbia were the original decloration creating british columbia as a british colony was signed.  For a short Time it was also the capital of the new territory.  The Current Fort is about 4km up stream from the orriginal location.

Fort Langley National Historic Site

Present Day Fort Langley is a unique community that maintains its 'small town' feel and combines it with beautiful scenery and views of the Fraser river.  Building codes have also encouraged the area to have a unique heritage look.  In addition Fort Langley is host to several interesting festivals each year as well as weekly farmers markets for most of the year making it a truly unique place to live.

Fort Langley Hall 

Acreages:

During September 2014 Ther were 2 sales of acreages which was up from 1 sale in september 2013. The prices increased 8.4% for acreages in Fort Langle which is strong increase however the average days on the market required to sell saw a notable increase.  Thus is would seem that although prices have risen that they may level off somewhat near term based on this data.

Single Family Detached Homes:

In september there were 2 sales of single family detached homes in Fort Langley, which was down compared to 4 sales in September 2013.  However prices increased 6.33% from one year ago, additionally the days on the market required to sell also saw a notable decrease.  This data would suggest to us that although prices saw a solid increase over the last year if other factors stay the same prices mat continue to increase in ths segment as demand for this type of homes is strong and supply continues to be limited leading to price increases.

Townhomes:

Townhomes are still a fairly small market segment in Fort Langley, most of the townhomes are part of the 'New'  'Bedford Landing' area of the fort.  Unfortunatly there were no sales of townhomes in september 2013 which meant we could not analyze current market compared to one year ago.  However in the chart below is a summary of the market activity in the segment for Seotember 2014:

Apartments:

Apartments are still a fairly small market segment in Fort Langley, most of the Apartments are part of the 'New'  'Bedford Landing' area of the fort.  Unfortunatly there were no sales of townhomes in September 2013 which meant we could not analyze current market compared to one year ago.  However in the chart below is a summary of the market activity in the segment for Seotember 2014: