Nov 15, 2017

All about getting a HELOC: Home Equity Line of Credit

When refinancing your home, a newer trend is the option to put a portion of those funds into a HELOC (Home Equity Line of Credit). A HELOC provides greater flexibility in accessing funds – but it is important to determine if it’s the right choice for your financial situation.

When refinancing you can utilize up to 80% of the value of your home (known as loan to value, or LTV), but with a HELOC you are limited to only 65% of the home’s value.

Let’s break down the math!

Home value: $750,000
80% of value – maximum LTV for a refinance = $600,000
65% of value – maximum LTV for a HELOC = $487,500

But there are ways to combine products and maximize a loan. Access up to 80% loan to value by managing different components, for example:

HELOC component of $487,500
Mortgage component of $112,500
Both components = $600,000

Another example would be if you have an existing mortgage for $300,000 on your home valued at $750,000. If you keep this existing debt in a mortgage product, you can still unlock up to 80% LTV with the HELOC, as the HELOC funds are not more than the initial 65% LTV, for example:

Home value: $750,000
80% of value – maximum LTV for a refinance = $600,000

HELOC component of $300,000
Mortgage component of $300,000
Both components = $600,000

Typically, with a HELOC, you pay a higher interest rate for the advantage of having an “open” term. The open term means you can draw the funds or pay off the funds at any time without encountering a penalty.

Because a HELOC has a higher interest rate, it would be cost effective to place your current mortgage debt into another fixed mortgage product (fixed or variable, depending on your own preference), while utilizing your equity through a HELOC.

The benefits to having a HELOC are endless, whether you want the ability to invest the funds for a high return, use the funds for a down payment on a second residence, have funds available to use for your child’s college or university education, or assist with a child’s down payment on their first home.

HELOCs are becoming more popular with the new influx of tighter mortgage restrictions. Traditionally, most lenders allowed an equity withdrawal of up to $200,000 on any refinance. But with new rules and regulations, lenders have tightened the gap and are now releasing fewer funds, if any extra at all. If they are going to release funds they also will want to know what exactly the funds are for. This means the advantage of a HELOC is that you can do as you please with your money – though it comes at that slightly higher interest rate.

Posted by CENTUM Canada on November 3, 2017

Nov 15, 2017

Best Fall Renovations

Winter in Canada can be intense, snowy and freezing. Pretty much everywhere. Some provinces experience temperatures below -30 degrees Celsius during their coldest part of the year, so it makes sense to think of better ways to save energy and conserve heat in the winter. Some of these ways require renovations, and fall is the best time to start your home renos, with kids back to school and the summer heat behind you. Then you’ll enjoy the warmth of energy savings during the cold clutches of winter.

Here are some fall renovations ideas to help make your winter cozier and utility bills a little lower.

Heated Floors
Radiant floors have become a very popular home trend, especially for new construction. Under-floor heating provides an even heat across the floor without stirring up dust like traditional furnaces. The installation can take some time as you have to remove current flooring to install the radiant heat pad. When first launched, heated floors were designed for tiles only, but now companies have been able to produce a heated floor product able to go underneath hardwood, laminate and even carpet!

Rain Chains
Rain chains are a wonderful idea that has been around for centuries, originating in Japan and called “Kusari-Doi”, which means chain gutter. These were used in Japan for two reasons: rainwater collection for household use as well as in temples to provide water music, or tranquility. These chains attach to a standard gutter, where your downspout would commonly be. In the winter, these chains have an advantage over a typical downspout. Downspouts can freeze solid in the winter and possibly cause damage. Chain gutters accumulate water, but it can easily melt on a sunny day.

Smart Thermostats
With advancing technology, smart thermostats are allowing you to control your home temperatures by smart phone, tablets and even voice command. Your classic thermostat must be set, programmed or adjusted constantly to keep in the right temperature range. But why waste your time? Smart thermostats learn your habits, such as when you leave for and arrive back home from work, and use that data to plan a heating and cooling schedule. These thermostats are so advanced that some of them are now rated ENERGY STAR.

Fireplaces
If you have a wood burning fireplace, you will want to switch it out. And fast! Not only do wood burning fireplaces create more pollutants, they also lose more heat than today’s common gas or electric fireplaces. There has been a debate on gas versus electric fireplaces in homes and what is more energy efficient, and the winner is electric!

The electric fireplace is not only more energy efficient, it also doesn’t require as much maintenance over time. A wood burning fireplace needs annual chimney cleaning and maintenance to prevent build up and reduce fire risk. Gas fireplaces also need a good annual maintenance to ensure all wearable parts are in good condition and there are no gas leaks. Electric fireplaces need a lightbulb changed every 2-3 years but otherwise are maintenance free! (Don’t forget some electric fireplaces come with a remote, and you may also need to replace the battery.)

Furnace
Furnace heating is an area where most home owners know to clean air filters annually and vacuum out ducts. But is your furnace the most energy efficient? Most homes still have a mid-efficiency furnace, which is defined as an annual efficiency of 78-82%. Newer high-efficiency condensing furnaces offer an annual efficiency of 90-98%! This makes a huge difference when adding up how much you spend to heat your home in those cold, cold months of winter.

Insulation
Insulation is one of the costliest items to upgrade in your home as installation could require removing and replacing your home’s drywall. Fiberglass batts were the most commonly used insulation for many years, but the most energy efficient way to insulate your home nowadays is spray foam insulation or expanding polystyrene.

Insulation is measured in R-Value (thermal resistance) with a higher number being better. Fiberglass ranges at 3.5-3.7 whereas expanding polystyrene has almost double the R-value of 6.5! Fiberglass batts are not as energy efficient and they can be hazardous to you. If you are handling fiberglass batts you can expect itchiness, rashes and irritation – or worse if ingested or inhaled.

Whether it’s a complete re-install of insulation, flooring or furnace, or a less extensive (and less expensive) project like upgrading your thermostat or downspouts, fall is the time to start home renovations. Upgrades will leave you cozier and saving money this winter when the snow falls and temperatures drop.

Posted by CENTUM Canada on September 22, 2017

Aug 29, 2017

Bank of Canada raises interest rate for 1st time in 7 years to 0.75%

CBC News
July 12, 2017

The Bank of Canada has raised its key interest rate as expected to 0.75 per cent — the central bank's first move upward in the cost of borrowing in seven years.

The bank's target for the overnight rate — at which major financial institutions make one-day loans to each other — moved up by one-quarter of a percentage point from 0.50 per cent.In a statement accompanying the rate decision, the central bank said the Canadian economy has been robust, fuelled by household spending.

"As a result, a significant amount of economic slack has been absorbed," the bank said, adding that the remaining slack is expected to be gone around the end of this year, which is earlier than the bank anticipated in its April Monetary Policy Report.The move means consumers will likely pay more for borrowing such as variable-rate mortgages and lines of credit.

In the wake of the rate hike, the Canadian dollar shot up. The loonie was up 1.05 cents at 78.48 cents US as of 4:33 p.m. ET on Wednesday. The daily average exchange rate for the Canadian dollar on Wednesday was 78.16 cents US, up 0.76 cents from Tuesday's average.

The interest rate increase had been widely expected after senior Bank of Canada officials signalled in speeches and interviews over the past weeks that lower rates had done their job, and the Canadian economy was performing well.

Speaking at a news conference on Wednesday in Ottawa, Bank of Canada governor Stephen Poloz acknowledged that the bank raised its key rate despite inflation currently lagging below its stated target of two per cent. Poloz said the bank considers that weakness in inflation to be temporary.

"It is worth remembering that it can take 18 to 24 months for a monetary policy action to have its full effect on inflation. This means that central banks must target future inflation by anticipating future deviations from target."

"It is about where we expect inflation to be," Poloz told reporters.

The bank is currently expecting a "modest overshoot" of the two per cent inflation target in 2019.

More increases seen coming

RBC chief economist Craig Wright thinks the bank's move signals a turning point to a longer-term trend in rising interest rates.

"I think it's the Bank of Canada having confidence that the breadth and durability of the expansion in Canada can sustain these small increases in interest rates," Wright told CBC News Network.

'We're going to see more [rate hikes] as we move forward, assuming growth holds up," he said.

Sherry Cooper, chief economist at Dominion Lending Centres, said she expects another rate hike in the fourth quarter of this year."The Federal Reserve will also likely increase rates in [the fourth quarter]," Cooper said in a release. "Look for a slow crawl upward in interest rates from both central banks in 2018."

The economy "can handle very well this move we have today and of course you need to preface that with an acknowledgment that of course interest rates are still very low," Poloz told reporters.

"People need to understand that in the full course of time I don't doubt that interest rates will move higher, but there's no predetermined path in mind at this stage."

Any future changes to the central bank's key interest rate will depend on economic data in the months ahead, he added.

The bank's next decision on interest rates is scheduled for Sept. 6.

Performing well

The Bank of Canada hadn't increased the overnight rate since August 2010, when it nudged it up to one per cent. After Poloz took over as governor of the bank, the rate was lowered twice in 2015 to 0.5, where it remained until Wednesday.With the economy performing well, the bank has also nudged up its forecast for growth this year. The bank said real gross domestic product (GDP) is now expected to grow by 2.8 per cent in 2017, up from the April outlook of 2.6 per cent.

The central bank said growth is expected to moderate over the next two years, coming in at two per cent in 2018 and 1.6 per cent in 2019.

With files from The Canadian Press

May 03, 2016

The new down payment rule: what changed on February 15

On February 15, the Government of Canada effected a change to the rules for down payments. The change, which was officially announced on December 11, 2015, increases the minimum down payment for new insured mortgages from 5 per cent to 10 per cent, for the portion of the house price above $500,000.

The change does not affect home owners who hold mortgages obtained prior to February 15, and the 5 per cent minimum down payment for properties up to $500,000 remains unchanged.

What does this mean for consumers?

Before February 15, 2016, a 5 per cent minimum down payment was required for insured mortgages up to $1 million. For example, an insured mortgage for a home purchased for $800,000, prior to February 15, would have required a minimum down payment of $40,000 ($800,000 @ 5%).

After February 15, 2016, down payments for insured mortgages are divided in two: a 5 per cent minimum down payment is required on the first $500,000 of property, and 10 per cent is required on the remaining value. For example, an insured mortgage for a home purchased for $800,000, after February 15, will require a total minimum down payment of $55,000 (the first $500,000 @ 5% and remaining $300,000 @ 10%).

"We recognize that, specifically in the Toronto and Vancouver markets, we have seen house prices that have been elevated," Finance Minister Bill Morneau told reporters "and we want to make sure we create an environment that protects the people buying homes so they have sufficient equity in their home."

Jan 28, 2016

Our 2016 Pledge To You

For most people, the purchase of a home is the single largest financial investment they will make.

This means that the process can be very stressful without the right support.

As a consumer, you have a lot of options when it comes to selecting the right team of real estate and mortgage professionals. Surrounding yourself with experts who understand the market and industry can make a huge difference in your journey to home ownership.

As your CENTUM Mortgage Professional I will work closely with you to ensure that your needs are first and foremost. I want your home buying experience to be as smooth as possible, so that you can focus on this exciting new chapter in your life.

My pledge to you is simple. I will:

1) Present you with options so that you can make informed decisions.

2) Communicate clearly with you throughout the mortgaging process.

3) Treat you with respect and understanding.

4) Look Out for Your Best Interest®.

A home is more than just a roof and four walls. It is an investment in your family’s future, and a place where memories are made. It is important that you are able to make decisions based on as much information as possible so that when you look to the future, you are confident that you have done everything you can to protect your investment.

My duty is to find you the best rate, and ensure that the mortgage you acquire is flexible enough for your specific financial goals. I work with multiple lenders so that you can decide the best fit for your financial requirements.

At CENTUM, our business and client relationships are built on integrity and honesty. Our relationships are the reason we can proudly say that we are Canada’s premier mortgage brokerage brand.

Dec 10, 2015

The best gift for your Holidays? Keep your credit history in shape!

Winter has already hit Canada, and we are approaching the Holidays very quickly. With Holidays come the purchasing of presents and quite often credit utilization.
As credit history is one of several main components of a qualifying for a mortgage, budgeting for the Holidays and, furthermore, not maxing out your credit can avoid negative surprises in 2016.

While building a budget, you need to ask yourself one of the many important questions:
“What is my Holiday budget, based on my current financial situation?”
The answer to this question will take into consideration your credit utilization and your future projects and goals.
Several elements are considered when it comes to your Credit Score also taking into consideration your homeownership goals. As a first time home buyer, are you or will you be saving for a Down Payment? As an existing homeowner, maybe you will be looking at refinancing or renewing your mortgage?

A few key questions should be asked in order to determine a budget for the Holidays:
1-   How much can you (and are you willing to) spend?
2-   Who are you going to purchase presents for?
3-   What does my credit utilization look like right now? Have I made any late payments recently and what is my actual percentage used of my credit limits?
4-   Will I have the funds during all celebrations to pay these purchases in time?
5-   How will these purchases affect my long term financial goals?
6-   How can I track my Holiday spending?

Getting by making the minimum payment is not enough. Add on Holiday spending, and even your minimum payments can become no longer affordable. Keep in mind that credit delinquency appears for 6 years on your Credit Report, therefore maxing out your credit might not be worth it. Just remember, your friends and family wouldn’t want you to go into debt for the holidays.
After Christmas, to get a handle on credit card debt, make a list of your unpaid balances, match them with their interest rate, and pay down the one with the higher interest rate first.

Some of us may not have immediate home ownership or refinancing projects, but the Holidays happen every year. For those planning on ownership and refinancing, CENTUM Mortgage Professionals are always looking for your best interest and can help you accomplish your projects. If you have any questions or require assistance we have access to tools, services and education needed to improve your credit score along with guidance on how to get there.

Oct 22, 2015

How to Prepare Your House for Sale

Prepping and staging your home for sale takes time and energy. Here are some practical pointers to help you prepare your house for sale.

Depersonalize: When staging your home it’s all about the imagination of the buyer. You want to help them picture their life in your home. The fundamental statement you want a buyer to make is “I can see myself living here” not “I wonder what kind of people live in this home.” One of the best ways to do this is by removing personal photos and other items that could distract potential homebuyers. You can think of this process as a head-start in packing for your move.

Clean & Clutter: Streamline your home. You will want to ensure that everything in your home looks polished, washed, and dusted. You want to create the best first impression you can. You will also want to declutter. Remove anything unnecessary in the space; piles of shoes, toys, stacks of mail, etc. You want buyers to focus on the various features and attributes of your home, not how messy it is.

Neutralize: As much as you may like your turquoise basement, it could turn buyers off. By repainting in neutral colour’s you can help buyers focus on seeing themselves in your home, instead of focusing on the colour of your walls. In conjunction, try to remove bulky furniture, it will assist in the flow of your home and make the space feel less cramped. This goes for clothing as well, sort through your clothes and make your closets look as efficient, organized, and big as possible.

Light & Nature: Open all the windows you can to increase natural light. If there are darker rooms in your home bring in some lamps as well-lit spaces will make your home seem larger and more inviting. Just as natural light helps your space look more beautiful, so does bringing nature inside. Potted plants or flowers in a vase add colour and life to your home. If you have empty corners, fill them with healthy plants, then sit back, and watch buyers take notice.

Prepping your home for sale can be stressful, but remember the more work you put in the more buyers will take notice.

Oct 08, 2015

The Future of the Reverse Mortgage

In the last couple of months, we have heard more and more about Reverse Mortgages. This post will help you have a better understanding of this product.

First, who can get a reverse mortgage?
This kind of loan is available for homeowners that are 55 or older.

What is a reverse mortgage?
A reverse mortgage allows you to get up to 55% of your home equity (home equity = value of your home – unpaid balance) meaning that the amount of cash you receive uses the actual equity as a collateral. However, you will have to fully pay any outstanding loans secured by your home when you use this product. As you aren’t making monthly payments, the interest on your reverse mortgage accumulates over the years and the equity you hold in your home will decrease. Reverse mortgages are subject to higher interest rates than most other types of mortgages. And the balance of your loan cannot exceed the fair market value of your home, so you cannot owe more than the fair market value.

This type of mortgage helps you borrow a tax-free lump sum, or a loan to set up planned advances that provides you a regular income, or a mix between these two, without losing the ownership of your home (meaning that you still have to pay for property taxes, insurance and other regular maintenance fees). Beyond that, even if your equity decreases as your reverse mortgage increases, keep in mind that real estate values can increase as well. And, even if you owe more than the fair value of your home, you will never pay more than the fair market value of your home at the date of sale.

There are, of course, plenty of other aspects to discuss with your CENTUM mortgage professional. Do not hesitate to call one of our brokers as we are always looking for your best interest®.

Sep 25, 2015

The Ready to Move-In Home vs. the Requires More Work Home

Buying a home is a complex problem requiring you to ask numerous questions about your lifestyle. What is a good location? What neighborhood best suits you? What is your budget? What are your basic needs? What kind of home do you envision yourself in? A new sleek and modern home in a trendy neighborhood? Or a simpler house in a small neighborhood? And lastly, how much work do you want to put into your home?

Some individuals crave a new project and wouldn’t consider a new build because of this, others can’t be bothered by the hassle and prefer and would prefer a newer home. Below are some of the advantages and disadvantages of each.

Move-In-Ready Home: Advantages

Ease of Transition: A newly finished or move-in-ready home is easy and you can get down to the fun tasks like painting and decorating immediately.

Technology: In a newer home there typically will be newer technology already in place. This may be items such as built in speakers, newer appliances, etc.

Efficiency: Not only is there new technology, the house itself will most likely be more efficient with better insulation, glazing, and heating methods. It is difficult to make older homes as efficient as newer ones.

Move-In-Ready Home: Disadvantages

Expense: While there are many positive features of a new home they commonly are more expensive as you are paying a premium for someone else’s work. When you do the work on a fixer-upper you pocket the profit.

Decision Making: When you buy a newer home, often design decisions will have been made for you. With a new home you may have to sacrifice some stylistic autonomy.

Quality: When you don’t oversee the build it could mean it is not done to your expectations. Before you purchase a new home ensure you have an inspection done.

Home-That-Requires-Work: Advantages

Less expensive: The most obvious benefit is price. A home that requires work will typically be less expensive than a newer home in great condition.

Value Added: By putting in work to fix up an older home you can increase the value of the home. This means if you turn around and sell the home you could stand to make a profit in the right market.

Your Dream Home: When you fix up a home you can create the home of your dreams. You will have the decision power when it comes to everything as decisions are entirely yours.

Home-That-Requires-Work: Disadvantages

Effort: Whether you physically do the work yourself or hire a contractor, someone will need to get their hands dirty. Ensure you are ready for your undertaking before you pay a down payment on a house that requires substantial work.

Time: Do you need to move into your home right away? With a home that requires work it may be weeks or months before the home is livable. It may take even more time before your house feels like your home. Even small upgrades take time. Be certain you are okay with this before choosing a fixer-upper.

Hidden Costs: You have budgeted for the full renovation only to find out there are numerous unforeseen costs involved. Build yourself a buffer or set aside some funds in case there are costs you had not anticipated.

Aug 18, 2015

What You Should Know Before Buying a Home

Buying a home can be a daunting process. It is one of the biggest and most important financial decisions people make. It thereby is a process that requires time & effort to ensure you get the home you want for the right terms and price. Below are some of the top things you should know before getting into the housing market

Career: Lenders want to see applicants in a stable career. This typically means at least two years at a job, or within the same field of employment. If applicants switch careers, know that lenders will want to see steady employment from an applicant in their new career before they will consider them for a mortgage. If candidates are self-employed, the process can be more complicated as lending standards are tough. It is highly recommended that applicants seek out the assistance of a mortgage broker about getting the right product for their needs and long term goals.

Learn The Basics: The basics of saving, credit, and budgeting are crucial to an individual’s long-term financial security. Saving will be critical when it comes to being able to afford a down payment. A recommended method is to start putting aside 10% of a monthly paycheck, this over-time will help build up substantial savings. Inquire with your bank about a tax-free savings account. This allows people to set aside money tax-free throughout their life.

Lenders want a picture of how people manage their money. They will do this by looking at an applicant’s credit and repayment history. Lenders will use this as a metric to predict a borrower’s future financial behavior. Thereby, it is important for individuals to ensure they have the best credit possible when applying for a mortgage. This will assist in getting more funding and having access to better rates. Practically, this means paying off credit cards and other credit obligations each month.

Budgeting is a key to saving and knowing how much you can afford. Budgeting can help you dictate what spending is essential and what is not, a key tool for helping you save. There are numerous apps or programs that can assist with this. Try setting aside the amount your monthly mortgage payment will be in order to ‘prep’ yourself for the real thing.

Associated Costs: There are numerous costs associated with a mortgage. A down payment is one of the largest expenses. The minimum a borrower currently needs in Canada is 5%, however anything less than 20% will require a customer to pay a loan insurance premium with CMHC. In conjunction, borrowers will have to pay closing costs, home and title insurance, appraisal fee’s, property transfer tax, and lawyer fee’s.

Have Some Cash In Reserve: As a potential home owner, ensure you have some money on hand in case there are unexpected costs that arise once you take possession of the house. While a home inspection is likely to catch potential problems with the home, it is recommended you keep some money on hand just in case something does arise.

Be Realistic About Fixer-Uppers: The idea of a fixer-upper in a great neighborhood for a good price is a very romantic idea. However, in reality they can be a little more work than expected. Consider your timeline and budget. How long will you be living in the house while renovating? Will you be doing all the repairs yourself? Have you budgeted in case you have to live in a hotel for a period of time?

That stated, “Sweat Equity” can save thousands if done right. Home improvement projects can drastically increase the value of a home.

Mortgages are complicated, you need an expert. Before you go house shopping and find the home of your dreams, be in contact with a mortgage professional. It will be helpful to know where you stand and how much you can afford before getting to deep into the buying process.

Jul 15, 2015

Saving For a Down Payment?

Are you looking to get into the housing market? You’ve attended a few open houses and have been following the market for months, but now reality is setting in. A down payment will be necessary to buy your first home. Below are some of the top ways to save for a down payment.

Scale down Your Lifestyle: Finding less expensive ways to do the things you enjoy, or foregoing them for a period of time could save you thousands over the course of a year.

Dial down your vacations: Try a stay-cation in your own city or go somewhere close by.

Eat out less: This could mean halving the number of times you eat out over the course of a month or eating at less expensive restaurants. If you bring your own lunch to work every day you could save yourself upwards of a $1,000 a year.

Spend less on hobbies and entertainment: Do you read a lot? Instead of buying books start using the library more often. Do you go to see a lot of movies? Try subscribing to an on-demand video streaming service and watch more movies at home. Do you spend a lot on your hobbies? Spend less this year, or try finding a different hobby for a period of time. Look for small day-to-day ‘luxury’ expenses that you can cut down on – at least until the down payment is saved.

Save More From Work: Make up a spread sheet with all your monthly expenses. Try to set aside a fixed amount from your pay cheque for savings. Even if it’s a small percentage, every dollar will count. If you get a raise at work, allot the difference between your previous salary and your raise for savings.

Pay off your credit card debt: It is difficult to save money when paying substantial interest to someone else. Begin by paying down the smallest high interest loan. Once that has been paid off, take the minimum payment from that debt and use it towards another. This will snowball until all debts have been paid off. If you have numerous outstanding debts you could always inquire about a debt consolidation loan. These loans typically offer a lower interest rate and mean you only have one monthly payment to worry about.

Use a Tax Free Savings Account: Tax Free Savings Accounts are a fantastic way to save money. The money in a TFSA can grow tax free, meaning any income you earn in this account is entirely yours.

Borrow from your RRSP: If you already have some RRSPs you can withdraw up to $25,000 to buy your first home. Though you should be cautious with this method, if the money you took from your RRSP is not repaid with 15 years it will be treated as income. You will thereby have to pay tax on the money you withdrew as if it where income.

At the end of the day saving for something like a home is all about priorities. If saving for a home is a priority then find some areas that you can cut expenses back on. This best way to do this is draft yourself a budget and identity key areas where you think you can save.

Jun 12, 2015

Renovations That Improve or Hurt Your Home's Resale Value

Want to renovate your home to better suit your lifestyle and also increase your home’s resale value? Here are some of the top renovations to increase the beauty and functionality of your home without hurting its resale value:

Bathroom Refurbish: Short of a full remodel, there are numerous subtle changes to a bathroom that will increase both its allure and usability. Replacing an old toilet, faucet or vanity are all great places to start. Good lighting can be a huge value booster; try adding a window or switching the placement of certain fixtures. Lighting is often a primary culprit for why bathrooms feel “tired.”

Kitchen Renovation: Upgrading your kitchens appliances or installing new countertops made of either granite or engineered stone is one of the easiest ways to increase the value of the space. Both can assist in improving the overall aesthetic of your kitchen and boost its functionality. Similarly, open living spaces tend to be quite popular; try knocking down a wall to connect the kitchen to other spaces in the home.

Are your cabinets structurally sound yet looking tired? A cabinet door reface is another great way to boost the energy in your kitchen without breaking the budget. Similarly, detail renovations are a superb way to subtly transform your kitchen. For detail renovations think cabinet handles, faucets and light fixtures.

Built-In Speakers: People love gadgets. Centralizing the sound system in your home and putting speakers in each room will impress potential buyers and improve your experience in your home. Controlling music from anywhere in the home from a central remote is a proposition that never grows old.

Sprinkler System: Green grass seems to be an almost universal wish of homeowners. Adding a high quality sprinkler system is a small but key investment as it assists you and would-be-homebuyers in maintaining the curb appeal of your home.

The following renovations may look flashy and make you happy, but don’t always lead to increase in the value of your home.

Pool: We often associate pools with fun, and thereby assume pools will ensure buyers flock to our home. However, often the opposite is true, especially in colder climates. Families typically don’t want to deal with the hassle of maintenance or the liability of injury.

Ornate Lighting: Lighting is a key element to the overall look and feel of your space. However, breaking the bank on ornate fixtures and chandeliers typically means you won’t make your investment back. The next owner may choose to renovate or may not like the fixture, thereby, there is always an inherent risk in purchasing expensive light fixtures.

Remodeling Your Garage: Converting your garage into a family or play room is tempting, especially if there is ample street parking available to you. However, buyers are typically going to want the garage to be a garage. This can sometimes be a deal-breaker for buyers, coming off as a completely unnecessary renovation once they take over the residence.

Installing Carpet: Natural flooring is a popular choice among buyers. People like the feel, look and practicality of hardwood. Carpeting thereby may alienate buyers weary of having to pull up carpet and lay down or refinish flooring.

Converting a Bedroom: Turning a bedroom into a room that better fits your lifestyle may benefit you now, but could come back to hurt you when it is time to sell. Once you start customizing bedrooms, you can decrease the value of your home as the next owner may not want to spend the money renovating the room back to its original purpose.

Before you renovate be sure to weigh the impact of your renovation against your future plans. Are you looking to sell soon? Will you be planning to live here for many years to come? At the end of the day though, trust your instincts and make the renovation decisions that work best for you.

May 26, 2014

The Challenge of being Millennial

In recent years there has been a surge of discussion surrounding the challenges that Generation Y, or the Millennials, will be experiencing as they enter the work force. The key items of discussion are (a) Education Costs (b) Cost of housing - both important topics because they both heavily impact an entire generations ability to be upwardly mobile.

If we consider first the cost of education there seems to be a disconnect between the actual average amounts that will be owing at the end of a four year degree. If you look at the numbers presented by the Canadian Federation of Students debt will hover anywhere from $27,000 to $37,000. If you look at other sources the number hovers around $25,000 to $27,000 - anyway you look at it, those are some big numbers. Using the middle of the road number of $26,000 our student are accumulating debt at a pace of approximately $6,500 per year, or $541.67 per month.

It may not seem like much when you break it down to those simple numbers, but factor in interest rates, and repayment terms stretching over a decade, and it becomes a financial burden. All things being equal it is not necessarily the debt that poses the challenge, it is the dim employment prospects that make the debt seem insurmountable. With youth unemployment (under the age of 25) hovering at 13.40% it means that finding gainful, and well paying employment is at best a challenge. For most of the younger generations we are still playing the waiting game looking to the boomers to finally retire and open up opportunity that presents some upward mobility. The average income for a household in Canada, net of taxes, has been improving from $59,000 in 1993 to $79,600 in 2011 (We do not have current stats available to us since the government got rid of the long form census…). That does bode well for future generations, however there is still some catching up to do so incomes can keep pace with cost of living.

When you couple in the cost of housing however, it means that home ownership will present a larger challenge for the younger generation. With the cost of a detached home exceeding the million dollar mark in Toronto and Vancouver (The two hottest real estate markets in Canada) one has to wonder if owning a detached home is even on the horizon. For many it seemed that the condo market was a solution, it allowed people to own their own home while providing life style and affordability. That however is even being challenged by a condo market that continues to see escalated prices. So with all of this doom and gloom, what does it mean for future generations who are seeking to enter into the housing market? It means that there has to be a change in mind set in how we approach what is, for most people, the largest purchase they will ever make.

It also means that more than ever it is important to ensure we are seeking the advice of professionals. Not just for insurance and investments, but also when it comes to determining a sound home ownership plan. It means, that more than ever a mortgage broker can play a significant role in ensuring you are well positioned to make the most of your dollar when investing in the purchase of a home.

CENTUM Mortgage Advisors have been helping Canadians make Smart Home Ownership decisions for over a decade.

**Paul Therien is the Vice President of Operations for Centum Financial Group Inc. and has over 20 years of experience in the financial sector. He is a sought after public speaker and regularly talks on this subject and provides insights into housing as well as other socially relevant topics. In 2013 he was listed as one of the most influential people in the mortgage industry in Canada.**

Feb 05, 2014

Centum Financial Group Appoints New CEO

VANCOUVER, BC (February 4, 2014) – Centum Financial Group, part of the Charlwood Pacific Group of companies (CPG), is pleased to announce the appointment of Martin Charlwood to the role of Chief Executive Officer.

Concurrently, Don Lawby will be retiring from his important role as President and Chief Operating Officer of Centum Financial Group.

"We’re very thankful to Don for his significant contribution to the success of our enterprise since its inception," said U. Gary Charlwood, Executive Chairman of the Charlwood Pacific Group.

CPG is committed to Centum Financial Group's long-term success with several exciting initiatives planned for 2014, including the upcoming CENTUM Chairman's Circle meeting in California. This annual meeting is held exclusively for the top CENTUM franchises nationally.

"Don has been an inspirational leader for the CENTUM brand, and we wish him all the best in his upcoming retirement and less hectic schedule ahead," said Paul Therien, Vice President, Operations, Centum Financial Group. "I look forward to working with Martin. He is a dynamic young executive who brings extensive leadership experience to the table to launch the next chapter for the CENTUM brand in Canada."

The Vancouver-based CPG has an impressive record of accomplishments in building successful franchise organizations. CPG has expertise in all facets of the franchise industry: founding Centum Financial Group, one of the fastest growing mortgage brokerage companies in the country, developing the CENTURY 21 Brand into one of the leading real estate organizations in Canada and the Asia-Pacific region, and recently launching Real Canadian Property Management to fill the lucrative and underserved property management market.

Collectively, CPG, including its travel division Uniglobe, operates in over 60 countries with more than 1,600 franchised locations and over 20,000 support associates worldwide, making it a true franchising leader.

Jan 17, 2014

Looking at the Bigger Picture

All parties – bankers, lenders, mortgage brokers — have a responsibility to perform due diligence with every valued client we deal with. However, there is one step that is either over looked, or not valued, by some folks in this business. And it is a step that I feel should probably be held in the highest interests: placing our clients in a mortgage that will be serviceable not just today, but for years to come.

I’m not sure why some institutions don’t seem to value this aspect when providing their clients with a mortgage. Is it because it is hard thing to do? Maybe. But all it really takes to do this is to provide the best estimation of your balance at the end of the first term as possible, and wager against what future rates might look like.

Let’s start with what we know right now: rates are bound to go up at some point. Just how much they’ll go up… now that we don’t know. That’s where the “wager” comes in. If I wager that rates will be up between 3% and 5% over the next 5 years (or whatever initial term you’re partial to), it stands to reason that I’m doing my best to limit your risk of entering into a “said” mortgage for today.

I’ll also take your estimation of what you think your salary will look like in 5 years. That gives us an idea of what we can expect down the line. From this perspective, we can devise a “likelihood” of what your future mortgage might look like. At the very least, you’re going into this mortgage with an idea of what could happen over the course of this major investment.

Of course, we could be off. Rates could be up 6% to 8%, or maybe even less than 3%. It’s impossible to tell. But by going through a few scenarios, I can help you plan for the inevitable ups and down that come with a mortgage. I believe it is important that you enter into this investment with both eyes open, and that you are prepared for a number of different scenarios.

When a lender tells you what you can qualify for on paper as a maximum mortgage… I highly recommend that you consider letting me play the scenarios first! It’s easy to get starry eyed with how much you can afford on paper today. But by running through the scenarios as we just discussed, I can help you protect your risks today, while taking into account tomorrow’s uncertainties.

This isn’t as wild as it sounds, and I believe it is more than worth the time involved. So before you jump into a mortgage with a bank, let’s run the numbers a few different ways, so I can provide you with a more complete picture

of what you are capable of when it comes to committing to a mortgage. That’s my job, and I love it!

******

The above blog post is courtesy of Chris Turcotte; a Mortgage Broker and Owner of CENTUM Mortgage Choice in Brandon, MB.

Nov 19, 2013

Housing Bubble?

CTV reported that Minister Flaherty stated he would act again if needed to cool an over heated market. For most Canadians this could translate in to stiffer rules when applying for home financing. For most existing home owners changes would only have an impact if they choose to purchase a new home, refinance their existing mortgage, or at renewal time.

When the United States had the market crash in 2008 for the first time mortgages became a household topic for people around the world. Speculation on real estate and its viability were soon topics of the day as consumers attempted to sort through the myriad of predictions about the future of the economy and the housing market.

Although there are many opinions of the state of the housing market in Canada, indicators seem to demonstrate that our healthy market will continue so long as interest rates remain low and employment remains strong. Does that mean that there is no chance of a market adjustment? No, but it does reduce the likelihood of that happening.

The best solution for any Canadian who is concerned about their own situation is to make sound decisions, not just for today, but for long term stability. As individuals we cannot control all of the variables that impact the economy or the housing market, but what we can do is to ensure that we have a sound plan in place that allows us to best meet possible challenges.

A seasoned mortgage professional takes the time to understand your concerns and helps you to build a home ownership plan that best accommodates your lifestyle and your future plans. By understanding what your options are and having a contingency plan, we can better be prepared for economic disruptions in our lives.

At CENTUM our mortgage professionals are here to Look out for your best interest and do what they can to help you plan a strong future for you and your loved ones.

Sep 06, 2013

What will a rate increase mean for you?

With the recent interest rate increase mainstream media has published doom and gloom scenarios about what will happen to the average Canadian home owner. In a recent article in the Globe and Mail the headline read: "Sink or swim: How will you cope with higher mortgage payments?"

We all know that bad news sells. For most people looking at their personal finances a large jump in mortgage interest rates does have the potential to be just that, bad news.

For the past several years we have enjoyed an environment of low interest rates and relatively easy money. Credit has flowed at historically high rates as Canadians accumulated debt to support a lifestyle of consumerism. The same lifestyle that has driven our economy and helped to keep our heads above water during the world wide financial crises.

It may be that the time has come for most of us to tighten our belts and start focusing on paying down debt and increasing our savings. A big part of that strategy is going to include looking at the mortgage we have and determining what our options are to better manage household finances. In doing that it is important to also have a clear understanding of what a rate increase will mean.

For most people who are in a mortgage product where the rate is locked in for a set period of time a rate increase today will not impact your current situation. Come renewal time however it is something that needs to be considered so having a plan in place today is the best thing you can do to protect yourself.

Here are some things to consider when looking at rate increases:

Let's say that you have a mortgage amount of $300,000.00 and your current rate of interest is 3.39%, your monthly payment when amortized over 25 years is $1480.45 (not including property tax, etc.)

If rates increased by a full 1% to 4.39% your mortgage payment would be $1642.14, an increase of $161.69 per month. If rates increased to 5.39% your monthly payment would be $1812.01 or $331.56 more per month. For most people increases are still manageable.

There is one thing however that the media does not consider when looking at how a mortgage will be impacted with rate increases. Simply that if you make all of your payment on time, you will not owe as much as you did at the start. Let's illustrate what that means to the average consumer who has a $300,000 mortgage.

A mortgage of $300,000.00 amortized over 25 years, on a five year term, at 3.39% will have a balance of approximately $258,316.00 at maturity. If you renew your mortgage leaving your amortization at 20 years your payment at 4.39% per annum is $1613.45, and at 5.39% is $1752.28 - still an increase but not as dramatic as what some people may think.

You also have the option of extending your amortization again to 25 years, that means that at 4.39% your monthly payment is $1413.96 which is actually lower than your original payment of $1480.45! If you were to renew at 5.39% and extend your amortization to 25 years your monthly payment is only $1560.24 or an increase of $79.79 per month. Not nearly the doom and gloom scenario that some would have you believe.

We all certainly want to have our mortgage paid off sooner rather than later, but our point here is that Canadians have multiple options to consider if rates do increase. Talking to a licensed mortgage professional is your best option to understanding what a rate increase will mean to you and to build a strategy to help you cope with any increases in interest rates.

At CENTUM we believe that working with our clients and helping them to structure a sound home ownership financing plan is the most important thing we do for our clients. We are always Looking out for your best interest®.