30 May

Rocket Science; 5 Simple Steps to Owning Your Own Home.

Mortgage Tips

Posted by: Jonathan Barlow

Home

The view from my sisters’ home.

Often, it can seem like the route to owning your own home can seem like a trip to the moon and back.

Really though, it comes down to five key steps:

1 – Manage your credit wisely.
If there is one thing that will gum up the purchase of that perfect home, it’s an unwise purchase or extra credit obtained. Keep your credit spending to a minimum at all times, make every payment on time and most of all pay more than the minimum payment. Remember that if you just make the minimum payment on your credit cards, chances are you will still be making payments 100 years from now..

2- Assemble a down payment.
At first glance, the challenge of finding a down payment can seem insurmountable. In fact, you just need to consider all the sources for down payment funds. yes, you will have saved some but remember you can also, in some situations, use RRSP funds, grants ( BC Home Equity Partnership for example ) and non traditional sources like insurance settlements, severance and of course, gifted funds from a family member. Don’t forget that you’ll need to demonstrate that you’ve had the funds on deposit for up to 90 days and also that you have an additional one and a half percent of the mortgage amount for closing costs.

3- Figure out how much you can afford.
Its at this point that most people usually stop and scratch their heads. Some even try and tough it out, using the raft of online calculators to figure it out but new mortgage rules can make even that a challenge.
If you talk to a mortgage broker ( like me! ) though, they can help you figure it out and even go as far as getting you a “pre-approval” from a financial institution. This can give you the confidence you need to actually start looking around.

4- Figure out what you want.
You’ll want to make a list of things your new home has to have and what the neighbourhood has to have. Things you want to think about are the things that are important to you now; is there access to a dog park? Is there ensuite laundry? Divide the list into things you can’t live without and things you’d like to have. It’s way easier to look when you know what you want to look at.

5- Look with your head, buy with your heart.
The final step is, with the help of a realtor, look at properties that meet your requirements. Yes, the market is a little frenzied at the moment, but remember, if your perfect property is sold to someone else, the next perfect property will soon appear.

When you do finally buy, chances are, you’ll buy with your heart. My sister Noona moved to London some years back and after settling in, decided to buy. Her list was fairly lengthy, one of the key elements was being able to walk to work. In a market similar to what we face now, she found a property that met most of her requirements. In the end though, she bought with heart, mostly because of the view from the balcony.

The decision which home to buy is a tricky thing, it should be made with your head and heart. Deciding, while balancing what you think and feel, really is rocket science.

I know that this may seem to be an oversimplification but really, the thing that complicates the process is your own emotions – all of the stress that comes along with making a life change can make the process challenging.  If you need help or advice in any one of the stages, just give me a call.

25 May

Where I work matters as much to you as it does to me – The DLC Difference

General

Posted by: Jonathan Barlow

When I made the decision to become a mortgage broker, I was cautioned by friends already in the field to choose wisely where I would plant my flag.

After a bit of deliberation, I chose a franchise that was very familiar to me – the owners were people I had worked with in my previous life. I will admit though, to being less sure about the parent company. The face of their advertising campaign had for some time been errr, well, a kind of obnoxious sports caster. I wasn’t sure the values of the parent company really reflected my own. That sounds a bit pompous and businessy, I know, but really, it comes down to wanting to work with people who treat others the way you do.

Coming up on a year down the road, I’m certain I’ve landed on my feet not only with the franchise office but also the the parent company. There are tons of reasons for me to celebrate but I think how DLC works for you impresses me the most.

Here are five reasons why my working at DLC matters to you, even more than it matters to me:

Size Matters

I am one of 2300 plus like-minded brokers who work under the DLC banner. The franchise office I work from has 80 brokers alone. This means access to more options, better “buying power”, when finding financing for you.

Advocacy

Some of you may have noted that in October, the federal government made changes to the mortgage qualification rules. One consequence of the changes was that your mortgage buying power has reduced by 20%, even while prices go up. All 2300 hundred of us have been involved in a campaign to reduce the harmful effects of these rule changes. DLC’s corporate office have even made presentations to the parliamentary committee studying the matter.

The Best Advice

Because we are 2300 experienced professionals and we talk to each other, we always have the right solution at hand.

The Most Up To Date Information

Our access to current information is remarkable, even in an industry where interest rates fluctuate like gas prices. We receive 30-50 updates a day. When we meet with you, you get the benefit of the most recent, most accurate information we have.

A Single Purpose – Our Relationship With You.

When you win, we win. The one thing that drives success for all of us at DLC is having a great relationship with you; a relationship where you can end up living where you want to, comfortably and sustainably.

Give us a try sometime.

Regards,

JB

Jonathan Barlow
778-230-2572
jbarlow@dominionlending.ca

11 May

Advice and options mean you’re in control.

General

Posted by: Jonathan Barlow

mortgage advice

Be in control.

Today, you and your spouse go looking for a new home. You’re excited because after years of scrimping and saving, you can finally afford your own place.

You’ve engaged a realtor and he’s called you to say that he’s found your new home. You visit the property and while its not perfect, your realtor insists that this is the home for you. He says there’s nothing else available that’s better suited and urges you to make an offer. He mentions at one point that he’s actually the owner of the property he’s showed you. You make an offer at the price he suggests and, hey presto, the offer is accepted!

You move in at the end of the month, happy that you’ve at least got a roof over your head.

It all sounds pretty unbelievable, doesn’t it? You can’t really imagine doing that, can you?

Let’s look at a similar scenario; one where you make a very similar choice.

A month or two earlier, you casually mention to your mum and dad that you’re going to start looking for a home. They’re both pleased and proud – they ask about your mortgage financing – and recommend you go see their account manager at Big Blue Blank.

Like most Canadians, you prefer going to the dentist over applying for credit, so after you meet with Cal from Big Blue, you’re pleased and relieved when he calls you later that day to say you’ve been pre approved for financing at a fixed rate. He’s even guaranteed the rate for 90 days! When you end up buying that not so perfect home, the mortgage is in place in a blink of an eye.

This time, the whole scenario is way more familiar, isn’t it? Why is the second scenario any more acceptable than the first?

A Mortgage Brokers’ value proposition is based upon the ability to offer independent advice about multiple products provided by multiple lending partners.

How we demonstrate that proposition is by providing both advice and options; advice on not only obtaining the right financing, but also repayment strategies and strategies to handle a changing interested rate environment.

By combining options on rates, terms, repayment privileges and to minimize penalties, we provide you with the one thing you didn’t get in either of the two scenarios – informed choice.

Dealing with a broker, any broker, gives each of us back something we are always looking for; control.

As always, if you have any questions, need help or would like to run through some (real) scenarios, please call or email.

Regards,

JB

Jonathan Barlow
778-230-2572
jbarlow@dominionlending.ca

1 May

Vancouver’s Rental Market Needs Carrots, Not Sticks.

General

Posted by: Jonathan Barlow

rentals

Summer is coming

At any given time, in every housing market in Canada, there will be a segment of the population that cannot afford to own their own homes, regardless of any discussions about affordability.

We all want to live within a reasonable distance of where we work, no matter what we do, and one of the ways for that to happen is to rent. The rental market in this city, as with many others, needs to be recognized as a vital part of the housing spectrum. Unfortunately, it appears that all levels of government do not consider it to be so.

Rental real estate Investors can be roughly divided into two groups; the commercial ventures, that own apartment buildings, multiple units etc., and the limited door investor, usually an individual investment property owner . The key difference between the two is the commercial business is in it to cash flow, earn a profit. The limited door investor – perhaps your next door neighbours – a couple who owns their own home and perhaps a condo downtown that they rent out, is not in it for revenue generation. Rather they are in it for wealth accumulation instead of profit. The theory is, as long as the rental pays for itself, their “business” is a success because their key profit driver is the increase in property values.

Right now each level of government uses various “sticks” to drive the rental market, although it appears there is little thought given to the consequences of doing so, particularly when it comes to affordability in the housing market.

The Federal Stick; Stand alone rental properties are no longer eligible for default insurance. Financing options are now limited to half the lenders previously available and all are more costly than even a year ago.

The Provincial Stick; The BC Home Equity Partnership Program.

The Municipal Stick: Combining a 15% foreign buyers tax with a 1% vacant property surtax.

In so many ways, each of these “sticks” make sense on their own, however as a combination, they do nothing to make either rental or non rental housing more affordable. In fact they do the opposite.

Removing the default insurance option from what is a vital part of the rental market not only limits the number of new rental units coming on to the market but also endangers existing rental housing, increasing costs and not allowing owners to refinance repairs and refurbishment.

Ignoring the rental market in favour of offering interest free loans for downpayment also ignores the the fact that a rental housing shortage will drive competition for what today is barely affordable first time housing and will actually increase prices.

If a 15% foreign buyers tax has done nothing meaningful to cool the housing market because foreign buyers are prepared to pay a premium to own here, how will an additional vacancy surtax address that problem?

Perhaps we should consider the following “carrots”?

1. Return default insurance coverage to the stand alone investment (rental) housing sector.
2. Develop a provincial rental housing policy, including tax concessions for commercial, multi unit residential rental projects.
3. Rebate 3% annually of the Foreign Buyers tax for five years, provided that the property is occupied during the entire term ( rental or owner occupied ).
4. Give planning preference and municipal tax incentives for rental housing.

Why am I, a Mortgage Professional, talking about the rental market? Its pretty simple; with an effective, stable rental housing market, competition slows to a more measured pace in the first time homebuyer’s market and demand decreases. As demand decreases, prices moderate. ‘See where I am going with this?