Even homeowners who do all their homework before buying are occasionally surprised by how quickly the many expenses of home ownership add up each and every month. But rest assured; if you stick to your budget and make a few sacrifices here and there, it is possible to save money and maybe even pay off your mortgage a few years early!
Mortgages are compounded with hundreds of payments to slowly reduce both your principle loan as well as interest charges, so you can expect interest-heavy payments for the first five to seven years as your bank makes lending you all that money worth their while. But there are ways to pay down your mortgage faster and save money in the long run!
Bi-weekly is best – Opting for an accelerated biweekly payment schedule will not only allow you to make 26 payments a year, it will also reduce both your interest rates and principle amount faster. Lenders may charge you an additional fee, but this is money well spent.
Round it up – Did you know that a hypothetical increased payment of $1,000 instead of $830 could save up to $48,000 over the course of the mortgage? That’s nearly eight years of payments! Ask your lender if this is an option for you.
Make a lump payment – If you get an annual bonus or consistently receive a substantial income tax return, consider using the windfall as a lump payment at the time of your mortgage renewal or sooner if your lender allows it.
When it comes to saving money, it’s common to have difficulty during your first few years of homeownership as you adjust to the added expenses. But it can be done. Here are a few simple ideas to help you cut back:
- Online grocery shopping. How many times do you walk into a grocery store with nine or ten items on your list and leave with a cart full? Instead, do your shopping online and simply drive to the store to pick up your order – no more impulse buying! Check your local retailers to see if the service is offered
- Make your own lunch and coffee every day
- Use public transportation if available
- Install a programmable thermostat to save on energy bills
The spring real estate market is upon us and in many cities and communities across the GTA, inventory is low and prices are high. With tales swirling of homes selling for hundreds of thousands of dollars over listing price and bidding wars becoming the norm, you might be wondering if the time is right to purchase a new home.
Since there is no easy answer, some homeowners may decide to wait for a more stable market in which to sell and buy a new home. If you do decide to wait but are craving a change, take this time to tackle a home renovation! You can increase the value of your current home – always a good thing – create more square footage for your family and possibly position yourself better for a quick sale down the road.
Getting a high return on your investment is on most homeowners’ minds when planning a home renovation project. Kitchen and bathroom remodels almost always increase the value of a home. Any project that adds additional living space to your home will likely be a smart investment, including finishing the basement or attic space or building on an addition. As with any major project, getting the right permits and hiring a reputable contractor is key.
There are also dozens of projects you can take on around the home that will make it more enjoyable for your family for the time being and make it more appealing to prospective buyers when the time to sell does come. Exterior upgrades are becoming very popular amongst Canadian homeowners, with many families spending big bucks on landscaping projects, including new decks, fencing and driveways. With the price of cottages on the rise, outdoor kitchens are gaining popularity in Canada as well, as many homeowners aim to create the perfect “staycation” space in their own backyard.
Another goal of many home renovators is energy saving. Replacing your home’s windows or roof and beefing up insulation might not be the most exciting way to spend your reno dollars, but it will help you save big time on monthly energy costs while increasing the value of your home.
Home inspections have become commonplace in the Ontario real estate industry. In fact, many deals hinge on the completion of a home inspection report that is satisfactory to the buyer involved. Traditionally, the buyer has been responsible for paying for and arranging an inspection after the offer has been accepted. The seller agrees to facilitate access to the home for the inspector, the buyer and usually the buyer’s realtor during an agreed upon time frame before the deal becomes firm.
In recent years, however, some sellers have taken the reins and obtained a pre-listing home inspection before their home even hits the market. There are a number of reasons why a pre-listing home inspection can benefit sellers.
1. Be the first to find out about any problems. Obtaining an inspection before listing a home puts the seller in the driver’s seat when it comes to necessary fixes, whether major or minor. Some buyers will get hung up on small repairs, especially if a few start piling up during a home inspection. By having a pre-listing inspection done, the seller can repair leaky faucets, secure handrails on staircases, improve inadequate insulation, etc. before buyers begin viewing their home. And if there are major issues discovered, the seller can decide how to proceed, attaching any repair estimates or paid invoices to the inspection report.
2. It encourages a firm deal. If a buyer can view a completed home inspection report before making their offer, they know exactly what they purchasing and will likely feel more comfortable forgoing a home inspection condition in the offer.
3. Convenience. By obtaining a pre-listing home inspection, the seller is able to hire a reputable inspector (choose one who is a member of the OAHI – the Ontario Association of Home Inspectors) and schedule the appointment at their convenience.
A pre-listing home inspection also benefits buyers. It will help them determine a fair offer price and decide if they are willing to repair any highlighted issues before making an offer. Buyers will also enjoy a savings of $350-$500 off their closing costs (the typical cost of an inspection).
When it comes to buying or selling a home, there are a few important documents that will come into play during the process. Some of these forms include pre-written clauses that your realtor will discuss and explain to you. Due to the nature of these contracts, be sure to read them thoroughly and always, always ask for clarification if needed.
Seller Representation Agreement (Listing Agreement): The listing agreement serves a number of functions. It establishes the relationship between the brokerage (and real estate representative) and the seller, it outlines specifics about the property for sale and it explains the services that will be performed and remuneration agreed upon. A Data Input Form will also be completed, describing the property in more depth i.e. legal description, age, room dimensions, zoning, etc.
Seller Property Information Statement (SPIS): Completing this form is optional for sellers. This form expands on information already provided about the property for sale, including items like restrictive covenants, known easements, details about past renovations, moisture issues, etc. If a SPIS has been provided by the seller, the salesperson should inform potential buyers of its existence. It is important to note that the SPIS is not a warranty or guarantee for buyers and should not replace a home inspection.
Buyer Representation Agreement: This agreement is an authority granted by a buyer to a real estate brokerage to act on his or her behalf during the purchase of a property. It outlines and explains the responsibilities of both parties and the commission arrangement. While a realtor in Ontario is required to complete the agreement and submit it to the buyer before any offer is made, the buyer is under no obligation to sign it.
Agreement of Purchase and Sale: An agreement of purchase and sale is like a conversation in writing that expresses the buyer’s wish to purchase a property and the proposed terms of sale. It only becomes legally binding when everything is mutually agreed upon and signed by both parties. Commonly referred to as an offer, this document summarizes the terms that the buyer is seeking. Items always covered in the agreement of purchase and sale will be deposit amount and sale price, conditions, chattels and fixtures, completion (closing) date, etc.
While the exact forms may vary from city to city across the province, the fundamental concept behind each is the same.