Monday, September 27, 2010
The difference between a 3.69% and 6.0% interest on your mortgage.
I've talked to a few folks recently that are kinda sitting on the fence regarding the purchase of a new home.
One of the most important considerations in waiting is to consider mortgage rates. Today, someone with good credit can get a 3.69% fixed 5 year mortgage. Lets compare that to a 6% mortgage which is what folks saw in 2006/2007.
The Jones family wants to buy a home around $400,000 with 5% down ($20,000). Lets estimate heating costs at $100 per month, property taxes at $1850 per month and monthly debts of approx $300. We will also calculate on a 35 year ammortization and include CMHC premiums.
At a 6.0% interest rate, the family income required to qualify would be $92,616.94. Monthly payments would be approximately $2770.
At a 3.69% interest rate, the family income required to qualify would be $71,667.56. Monthly payments would be approximately $2211.
Did you expect such a big difference?
If you have locked in a low mortgage rate, talk to your financial advisor/mortgage broker to understand your qualifications and payments should you let the rate go. While some folks believe the market will decline a bit more, others believe it is already on its way up so prepare yourself with the information you need to make your best decision.
As always, don't hesitate to contact me with questions. I'm happy to help early in the buying process to help you find your new home on your terms.
Numbers provided by Daryl Marsden, VERICO Canada Mortgage Direct
Friday, September 24, 2010
Top buyer priority: Good School
Many of my clients have children. The baby boom in Calgary in recent years has resulted in many little munchkins and those munchkins will soon be or are just starting school.
With some schools at capacity, parents are working hard to choose homes in catchment for the schools they prefer. When consulting with buyers as they search for a new home one of the items on their list is often 'close to a good school'. The difficulty for me is what does 'good school' mean to you? With many different options regarding schools including public, catholic, charter, francophone and private and with the Calgary School Board working hard to provide options to parents, I find this one just plain hard to answer for folks.
Instead, what I can do is provide buyers with the information to make the best choice for them.
Below are a few resource to help you decide the best school for your little munchkins.
If you need some help in finding the right neighbourhood for you, just contact me and I would be happy to help.
Monday, September 20, 2010
The effect of changing to bi-weekly or weekly mortgage payments - save money
We are all looking for ways to save a bit of money on our mortgage.
You can start using this method of saving money on your mortgage the day you read it. You simply call your bank and ask to start taking your payments out bi-weekly or on an accelerated or rapid payment plan.
You can also request that the bank coordinate your payments with your pay day. It has always been easier to pay your bills on the day you get paid... simply request this at the time that you change your payment method. By implementing this strategy you can save over four year's worth of interest and payments.
Based on a $100,000 mortgage at 6% interest for a 5-year term amortized over 25 years.
Your monthly payments would be $639.81.
You would pay $28,225.07 in interest over the first 5 years.
You would pay $10,163.50 in principle over the same 5 years.
Implementing a Bi-Weekly Payment:
(Using the same $100,000 mortgage at 6% interest for a 5 year term amortized over 25 years:)
You now would be paying bi-weekly payments of $319.91.
You end up making two extra payments during each calendar year: one in November and one in July which, when totalled, is only one extra payment per year.
You would pay $27,646.99 in interest over the first 5 years.
You would pay $13,941.31 in principle over the same 5 years.
What You Will Save:
First, you will save $578.08 in interest payments over the first 5 years
Second, you will have paid an extra $3,777.78 in principle over the 5 years
Third, your payment stays close to the same except you now make two extra payments instead of one each month and they are made when you get your pay cheque.
In other words, you will pay off your mortgage faster just by paying your mortgage on a bi-weekly basis. The best part is that you won't likely even notice it after a few months. Just like anything we do that's new to us, it takes time to turn it into a routine. You need to adjust a little to plan for payments, but will like the numbers on your updated mortgage statement.
Courtesy of Daryl Marsden, VERICO Canada Mortgage Direct
Friday, September 17, 2010
Do you consider yourself a "green" client?
Just recently I finished my requirements to be certified with the National Association of Realtors (NAR) Green Designation. It is the only green real estate professional designation recognized by NAR, the association that represents all Realtors in the USA. I am also working on my certification in Canada with the National Assocation of Green Agents and Brokers (NAGAB).
What does all that mean? Well, it means I have the personal interest to invest in my ongoing education and I have chosen this field as one that really needs to be well understood.
I am finding more clients asking about energy efficiency, safer building materials, design choices and about buying better homes. These questions aren't asked as 'green'. They are just folks wanting a better home, lower maintenance cost, more efficient homes, safer materials for their children and a sense that their personal choices make a difference in the global picture. Are green homes better? A lot of folks believe so. It all depends on the conscious choices that are made and if they align with your personal goals.
I also have a personal interest. I have a family myself and also want to make the best choices for us regarding our home, community and contribution.
My question to you is this. Are you a 'green' client? Contact me and let me know what you are looking for either in a home or in specific information and I will be happy to find out and share it.
Wednesday, September 15, 2010
Client comments from recent showings
With inventory levels higher than sales numbers, folks are having to work a little extra hard to sell their homes. There are active buyers out there and homes are selling (874 in the last 30 days according to the CREB stats today Sept 15, 2010). Most people aren't really looking for a showhome, but they are looking for a home that has been well cared for and they will take the showhome if they can find one.
Buyers have the option to view many homes right now. It takes some marketing to get them into your home and then it takes some work to get them to love it once they are there.
These are some recent comments heard over the last couple weeks (as close to word by word as I can remember).
You can't change your location, but you can change the presentation. Can you guess which homes didn't make the shortlist and which did?
If you need some help with preparations to sell your home give me a call at 403-850-2446 or contact me anytime.
Friday, September 3, 2010
Open House Sunday - Come by and say hello
If you have been watching the Tuscany market, checking Tuscany listings on my website and want to stop by on Sunday I'd be happy to introduce you to this great home, the community of Tuscany and answer any questions you may have.
On Sunday, Sept 5 from 1 to 4pm I will be at 43 Tuscany Glen Place NW.
This estate home is within catchment for St Basil's and of course Tuscany Elementary. Over 2200 sq ft above grade plus a fully finished walkout basement provide ample room for a growing family.
See you on Sunday.
Thursday, September 2, 2010
Real Estate Update - August 2010
The Calgary Real Estate Board (CREB) yesterday released the statistics for residential real estate activity for August. The numbers indicate a continuation of the current trend which shows a correction to the market over the last 4 to 5 months.
“There has been much talk recently about the potential for a housing bubble in Canada--but the economic fundamentals at play make this scenario unlikely for Calgary. What we are seeing is an adjustment to higher levels of inventory and a shift to a buyer’s market.”
“A slower than anticipated pace of mortgage rate hikes and continued improvements in employment are more likely to bring stability rather than volatility into Calgary’s housing market as we move into 2011,” adds Scott.
“We expect a period of correction will continue into the fall of this year. Prices may sag in the short-term and level off as we move into 2011,” says Scott.
The median price of a single family home in the city of Calgary for August 2010 was $395,000, showing a 1 per cent decrease from July 2010 and August 2009, when the median price was $400,000. The median price of a condominium in August 2010 was $260,000, showing a 3 per cent decrease from July 2010, when the median price was $268,000, and no change from August 2009, when it was the same – $260,000.
“Total month end inventory for the wider Calgary region is down marginally when compared to July—a trend we expect will continue in the coming months. New listings are also likely to recede in the coming months in response to slowing sales,” adds Scott.
So what do these statistics mean to you? It depends on whether you are buying or selling and the area of the city and type of market you are considering. Careful pricing, presenting your home for sale and great marketing are needed to get your home noticed. If you are a buyer, keep an out for great homes at competitive prices.
As always, don't hesitate to contact me with any questions.