What Insurance Protection Does Your New Home Need?

Home Tips Trish Pigott 30 Aug

More buyers are coming off the sidelines and looking to enter the market. Prices are high, so protecting your investment and home is more important than ever.

What insurance will you need to protect your new home? A quick Google search will turn up title and home insurance entries. They each protect consumers but from very different things. Here’s a quick breakdown of each type of insurance and why appropriately protecting yourself takes both:

Title insurance

What is title insurance?

Title insurance protects your right to own your property. It deals with hidden issues your home may have and future risks like fraud. This is just some of what title insurance covers:

  • Title defects that can keep you from selling,
  • Title fraud and home title theft,
  • Encroachment and access issues,
  • Tax arrears and unpermitted work from previous owners.

Want to know more about title insurance coverage?

How much is title insurance?

You only pay once for title insurance, usually between $250—$1000, depending on where your home is and how much you bought it for. Premiums will often be based on purchase price or current market value. There are no monthly or annual payments, and your coverage lasts for as long as you or your heirs have an interest in the property.  This is arranged with the lawyer or notary when you complete your purchase.

Home insurance

What does home insurance cover?

Home insurance covers four main things:

  • Damage to your home or other structures on the property,
  • Lost, damaged or stolen valuables, depending on your policy,
  • Liability for accidents or injuries that happen on your property,
  • Losing use of your home because of an event covered by your home insurance (usually to do with damage to the house).

How much is home insurance?

It varies, but the average cost of home insurance can range between $1,000-$2500 per year. Your price can change yearly if you switch providers or update your coverage. Many home insurance policies also allow you to purchase additional coverage, like flood protection, which increases your premiums.  The higher your insured value is, usually affects your annual premium.  Home insurance can be paid in a lump sum annually or can be paid monthly with most providers.

Which do you need, home insurance or title insurance?

They cover very different things, so you need both. It’s the only way to protect both your home itself and your ownership of it.  Home insurance is required by all mortgage lenders for all single detached homes and if you are purchasing in a strata, you will want appropriate coverage for your strata insurance deductible as they can be extremely high.

  • Title insurance doesn’t cover most property damage, lost or stolen items, or medical/injury liability.
  • Home insurance doesn’t cover fraud, back taxes, or the City forcing you to alter or remove structures on your property.

Example of a title insurance claim

A north Ontario homeowner and her neighbour had discovered that her water and sewage lines didn’t connect to her street. Instead, they related to the next road via her neighbour’s property. They forced her to relocate her water and sewer lines at a huge expense.

But fortunately, she had a title insurance policy in place with FCT. We stepped in to resolve the issue for her, and we were able to cover the total cost of moving her water and sewer lines.

Paid: $115,284.32

Without title insurance, where would the homeowner, in that case, have come up with $115,000? The risks title insurance protects you from are unpredictable and expensive. If you don’t have title insurance and home insurance, the truth is that you’re at risk.

How can you get protected?

You can get title insurance coverage, even if you own your home with an existing homeowner’s policy. But the best time to start protecting your new home is while purchasing it. Talk to your lawyer or notary about title insurance from FCT or other providers, or learn more about residential title insurance here.

For Home Insurance, we have some great partners that we will offer to connect you with at the time of your mortgage completion.  They too are brokers so they will shop the insurance market for you to ensure you are getting the best coverage with the best premium.

Have any questions about your next purchase? There are never too many questions when it comes to protecting your home. Give us a shout at 604-552-6190 if you ever have any questions.

support@primexmortgages.com

Trish & The Primex Team

 

Five Steps to Crush Your Credit Card Debt

Home Tips Trish Pigott 23 Aug

Although most credit card interest rates have not been affected by the recent surge in the prime lending rate, the fact remains that credit card debt is usually the most expensive debt you can have. The average is around 20%, and even the so-called ‘low interest’ cards carry a rate above 10%. Expediting the demise of your credit card balance should be the number one focus for anyone looking to improve their financial situation. Here are five actions to get you started.

  1. If you carry a balance, the first step is to put the card(s) away. Whether you put your card in the food processor or temporarily turn them off (our recommendation), you must own up to your mistake and not add fuel to the fire. If it’s the case where you have no choice but to use the card (a prepayment, for example), make sure to make a payment to cover that charge right away.
  2. Take a minute to understand the consequences of a credit card balance fully. Search out the details of your credit card statement until you find the section that tells you exactly how many years it will take to eliminate that balance with minimum payments. While you are at it, confirm the interest charge for that month and just how little of your payment is going toward reducing the balance. It can be a bit shocking, but also quite motivating! The government has a simple online calculator for you to analyze different repayment options easily.
  3. Plan your repayment attack. Making a few random spending sacrifices and hoping you will have a little more left at the end of the month to pay towards your card is wishful thinking. You need to figure out ASAP the maximum amount you can throw at your credit card debt every month and chart out when you will be debt-free. Set up an automatic transfer from your bank account to your card every payday and make that money invisible – you can’t spend what you can’t see!
  4. Investigate the balance-transfer credit card option. But only if you have a plan and are confident you can pay off the balance within the prescribed period! A balance transfer card shifts your debt to a new card (for little or no fee) which offers a limited period (usually 6 -12 months) with a very low-interest rate (often 0%) to pay off the balance. This cuts your interest expense to zero and ensures that 100% of your payment goes to reducing the balance. However, you must be very disciplined and have the income to make regular payments. The card company is banking on you to fail and hopes you will miss the payment deadline because that will trigger an avalanche of penalties, fees and interest charges that will put you worse off than ever!
  5. Pick up the phone and call your card company. It might be possible and easier than you think to negotiate a lower interest rate on your credit card. If you have had a card for a while, carrying a balance, and making the minimum payments, you are a valued customer! Your card issuer is very interested in keeping your business and may be willing to negotiate. You will have to get through to the right people and know what to say, but 15 or 20 minutes on the phone could save you a chunk of cash – even a few percentage points would help.

The above tips will help you get started on the road to eliminating your credit card balance. There are no shortcuts, and it may require a lot of sacrifices depending on your debt, but the mental burden that lifts when you see a big zero under “balance due” will be worth it!

Refinancing your mortgage and doing a debt consolidation is also another option for existing homeowners that have enough equity in the property to consolidate the debt with the mortgage.  This will lower the rate and improve cash flow drastically by bundling all payments into one.  We start with running the numbers first to ensure it makes sense to do that.

If you have any questions at all, we are always here to help. We are your number one supporters and wish to see you thrive! We can also help create a plan to help you pay off your debt and raise your credit score to help obtain the best mortgage possible.

Trish & The Primex Team

Market Beware: Subject Free Offers

General Trish Pigott 9 Aug

When purchasing a home, most offers include conditions or subjects, which are requirements or criteria to be met before the sale can be finalized and the property is transferred. Some of the most common subjects include:

  • Financing approval
  • Home inspection
  • Fire/home insurance protection
  • Strata document review if appliable

The purpose of these subjects is to protect the buyer from making a poor investment and ensure no hidden surprises regarding financing, insurance, or the state of the property.

These conditions are written up in the purchase offer with a removal date. The seller agrees to this before the sale is finalized. The deal can go through, assuming the subjects are lifted by the removal date. If the subjects are not lifted (perhaps financing falls through or something is revealed during the home inspection), the buyer can waive the offer, and the purchase becomes void.

However, recently, especially in heightened housing markets, subject-free (or condition-free) offers have emerged. These are purchase offers that are submitted without any criteria required! Essentially, what you see is what you get.

Below we have outlined the impact of subject-free offers on both buyers and sellers to help you better understand the risks and outcomes:

Pros of Subject-Free Offers

  • Buyers: The main benefit of a subject-free offer for a buyer is the ability to “beat the competition” in a heated market. However, it is not without risks.
  • Sellers: Typically, a subject-free offer will include a competitive price, willingness to work with the dates the seller prefers, and evidence that the buyer has already done as much research as possible. If time is sensitive for the seller because they are trying to purchase another home or want to move as soon as possible, they may also choose your offer over subject offers to expedite the process.

Cons of Subject-Free Offers

  • Buyers: As a buyer submitting a subject-free offer, you are assuming a great deal of risk in several areas, including financing, inspection, and insurance:
    • Financing: While buyers may feel that they have a pre-approval, so they don’t require a subject to financing, it is crucial to recognize that a pre-approval is not a guarantee of funding. If you submit a subject-free purchase based on a pre-approval, buyer beware. The financing is subject to the lender approving the property and the sale, from the price and location to the property type or other variables the lender deems essential. By submitting a subject-free offer without a financing guarantee (or an inspection, title check, etc.), there is a risk that the deal can fall through. Even when you do not include subjects on the offer, you still are required to finance your purchase. In addition, as sales are typically submitted with a deposit, there is a risk that the buyer will lose their deposit if the subject-free offer falls through. This amount can vary in the thousands and is typically a percentage of the purchase price or down payment.
    • Inspection & Insurance: If a buyer is also opting to skip the home inspection and home insurance protection subjects to have the offer accepted, then they assume massive risk as they do not know what they are getting and whether or not the property is up to code for insurance.
    • Due Diligence: With subject-free offers, there is no opportunity for due diligence after the offer. This requires the buyer to do all their research before their initial bid. Because it is firm and binding, a buyer who decides to back out will likely be met with severe legal ramifications. Submitting an offer without subjects is not due diligence and is at the buyer’s behest.
  • For Sellers: When it comes to the individual selling the property, there is less risk with subject-free offers but not zero. While the benefit is essentially there is no wait to accept the offer on the seller’s side, they do not know for sure if financing will come through.

Financing Around Subject-Free Offers

When submitting a subject-free offer, it is up to the buyer to do as much due diligence as possible before submitting. They must identify what the lender seeks to ensure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their best to secure financing beforehand.

Contractual Obligations

Be mindful when it comes to purchasing offers versus purchase agreements. While your purchase offer is a written proposal to purchase, the purchase agreement is an entire contract between the buyer and seller. The purchase offer acts as a letter of intent, setting the terms you propose to buy the home. If financing falls through, for example, the contract is breached, where the buyer may lose the deposit.

It is also essential to be aware of a breach of contract if a seller chooses to take action. For example, if you submit a subject-free offer of $500,000 and cannot secure financing for that offer, and the seller turns around and is only able to get a $400,000 deal with another buyer, they could potentially sue the initial buyer for the difference due to breach of contract.

Preparing a Subject-Free Offer

If you have decided to go ahead with a subject-free offer, regardless of the risks, there are some things you can do to mitigate potential issues, including: 

  • Get Pre-Approved: Again, this is not a guarantee of financing when you make an offer, but it can help you determine whether you would be approved.
  • Financing Review: Identify what the lender seeks to ensure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their best to secure financing beforehand.
  • Do Your Due Diligence: Look into the property and determine if there have been significant renovations or a history of damage. This could come in the form of a Property Disclosure Statement. While this statement cannot substitute a proper inspection, it can help identify potential issues or areas of concern. If possible, conduct an inspection before submitting your bid/offer.
  • Get Legal Advice: This can help you determine your potential risk and ramifications of the offer, should it be accepted or otherwise.
  • Title Review: Be sure to review the title of the property.
  • Insurance: Confirm that you can purchase insurance for the home. Remember that an inspection may be required for this, but in some cases, you can substitute for a depreciation report if it is recent.
  • Strata Documents (if applicable): Thoroughly review strata meeting minutes and related documents to determine areas of concern.

While there are things that can be done to help with subject-free offers, it is still risky. Ultimately submitting an offer with subjects gives you the time and ability to gather information on the above and access to the property or home for inspections.

Before making any offers, get a Pre-Approval in place so you can make the best decision. If you are intent on submitting a subject-free offer, discuss it with your real estate agent, as they can determine if a subject-free offer is necessary or if a short closing window would suffice to seal the deal. A good realtor will also keep you informed of potential interest and other bids during the process. Their goal should be to maximize your opportunity and minimize your risk.

Getting ready to put an offer in on your dream home? Call us first, we have many strategies to help shorten the traditional subject period and make your offer more competitive without going subject free to protect yourself.

604-552-6190

support@primexmortgages.com

Trish & The Primex Team

Are you Moving soon?

Home Tips Trish Pigott 2 Aug

If you want to up or downsize your home and are moving during your current mortgage cycle, keep a few things in mind. First, making any change to your mortgage during your mortgage term is considered “breaking” the mortgage.

Portability

If your mortgage is portable, moving up and scaling down will be much simpler. If you are unsure of the term, “porting” your mortgage refers to taking your existing mortgage (including your rates and terms) and transferring it from the original property to another. This can only be done if you’re purchasing a new property at the same time you’re selling your old one. However, unlike mortgage refinancing, porting does not require breaking your mortgage or paying penalties.

Consider The Penalties

Whenever you break your mortgage, there are penalties associated with that, as it is a contract. Depending on the type of mortgage you have (variable vs. fixed-rate) and how much time is left (1 year, two years, etc.) will determine the level of penalty. Typically, these are calculated in one of two ways:

Interest Rate Differential:

In Canada, there is no one-size-fits-all rule for calculating the Interest Rate Differential (IRD), and it can vary significantly from lender to lender. This is due to the various comparison rates that are used. However, typically the IRD is based on the following:

  • The amount remaining on the loan
  • The difference between the original mortgage interest rate you signed at and the current interest rate a lender can charge today

Ideally, you should know your IRD penalty before breaking your mortgage, as it is not always the most viable option.

Three Months Interest: 

Sometimes, the penalty for breaking your mortgage is equivalent to three months of interest. This penalty typically accompanies a variable-rate mortgage.

Re-Qualifying

If you are unable to port your mortgage, you would need to re-qualify for a new mortgage at the current rates offered by lenders and would be subject to government changes – including recent “stress test” rules.

If it has been a while since you bought your first home, you may be unfamiliar with the “stress test.” If you are purchasing a new home with a new mortgage, it is essential to understand this test, as it is a requirement to qualify.

The Stress Test was introduced in October 2016 for insured mortgages (down payments of less than 20%). Still, as of January 1, 2018, this includes all mortgages, regardless of the down payment percentage. This test determines whether a home buyer can afford their principal and interest payments should interest rates increase. It is based on the 5-year benchmark rate from the Bank of Canada or the customer’s mortgage interest rate plus 2% – whichever is higher.

Shopping for your next home? Let’s get you prepared. We can go over your options with your current mortgage, and decide what works best for you!

Let’s connect!

604-552-6190

support@primexmortgages.com

Trish & The Primex Team

The Difference Between Guarantors and Co-Signers

Home Tips Trish Pigott 19 Jul

Thank you to our partners at First National for a breakdown on the difference between the two.

  • What is the difference between a Guarantor and a Co-signer?
    • Guarantors are not on title to the property but will provide a guarantee to ensure the mortgage debt is being paid by signing the mortgage commitment and the mortgage charge as a guarantor. The guarantor should be able to contribute to servicing the mortgage debt if called upon.
    • Co-signers will be on title to the property and will provide a guarantee to ensure the mortgage debt is being paid by signing the mortgage commitment, the mortgage charge and any other documents that would normally be signed by a borrower on title to a property. The co-signer should be able to contribute to servicing the mortgage debt if called upon. Co-signers are normally required when the main applicants have poor credit and income.
  • Insured and Insurable Mortgages
    • Must be immediate family members – father, mother, child, brother, sister, grandparent, legal guardian or legal dependent, spouse or common law partner.
    • Does not need to occupy the property.
  • Conventional, Uninsurable Mortgages
    • Guarantor must be a spouse or common law partner.
    • Must be occupying the property.

These are general guidelines and there may be more to the borrower’s application. Each application is different and may be subject to further adjudication and conditions. At Primex, we will double check to make sure you qualify.

Have any questions or are looking for mortgage assistance? Contact us today at 604-552-6190 or email us at support@primexmortgages.com

CLICK HERE to book a quick call to review your mortgage!

Trish & The Primex Team 

9 Tips for a Successful Appraisal

Home Tips Trish Pigott 5 Jul

Before banks or lending institutions can consider loaning money for a property, they need to know the current market value of that property.

An appraiser’s job is to check the general condition of your home and determine a comparable market value based on other homes in your area. Appraisals are required for any buy or sell situation.

To help make the appraisal as smooth as possible and ensure you are getting top market value, check out the tips below:

  1. Clean Up: The appraiser is basing the value of your property on how good it looks. A good rule of thumb is to treat the appraisal like an open house! Stage it as you would a home for sale, clean and declutter every room, vacuum and tidy to show the appraiser that the property is well cared for. Where applicable, remove any personal items that might make the appraiser lower the value of your home.
  2. Curb Appeal: First impressions can have a significant impact on an appraisal. Spending time ensuring the outside of your property, from your driveway entrance to the front step, is clean and welcoming can make a difference. Yard work and removing debris and garbage will make a big difference.
  3. Visibility: The appraiser must be able to see every room of the home, with no exceptions. YES, every room, including outbuildings, garage, closets, basement… Refusal to allow an appraiser to see any room can cause issues and potentially cause a decline of your file. If there are any issues with any spaces in your home, be sure to take care of them in advance to allow the appraiser full access. NOTE: If tenants are in your home, ensure you give them the appropriate amount of notice for access. If the appraiser can not get access to every room, they will have to return and can be an added expense to you for the return trip.
  4. Upgrades and Features: Ensuring the appraiser knows any upgrades and features can go a long way. Make a list and include everything from plumbing and electrical to new floors, new appliances, etc. This way, they have a reference for what has been updated and how recent or professional that work was done. Knowing the age of the roof and HVAC items like the water tank is essential. Also, ensure the breaker box is MIN 100amps as most lenders cannot finance a home with amps under 100; older homes from the 1930 area are generally only 60amps.
  5. Be Prudent About Upgrades: While the bathroom and kitchen are popular areas, there are better options than the be-all-end-all for getting a higher home value. These renovations can be pretty costly, so it is a good idea to be prudent about how you spend your money and instead focus on easy changes such as new paint, new light fixtures or plumbing and updated flooring to avoid breaking the bank while still having your home look fresh. Removing clutter, adding a new coat of paint and doing a deep cleaning will help make these spaces shine.
  6. Know Your Neighbourhood: You already know where you live better than the appraiser. Looking at similar homes in your neighbourhood and noting what they sold for will give you a ballpark. Keep in mind that an appraiser has to use comparable solds in your area and not current active listings. Generally they will collect 3-6 comparables over the last 90 days.
  7. Be Polite: The appraiser is there to get in and get out, so let them have the run of the house while they are there. Please do not follow them around, avoid asking them too many questions or making too many comments, and simply be prepared should they have questions. Once they have completed the review of your home, that is an excellent time to bring up any comments you might have. Remember, the onsite inspection usually is only 15 minutes through the house. The rest of the time is spent gathering data and reviewing sales and other forms of research to create the appraisal report.
  8. The Report: Even though the customer pays for the appraisal, the report belongs to the lender that it is prepared for. The reports are not given to the customer directly. Don’t be offended if your mortgage broker or the lender does not share the report with the homeowner, this is policy for all appraisal firms and lenders.
  9. Know The Costs: Every appraiser charges differently. There are a number of factors involved with the range in cost of an appraisal.  Whether it is an acreage property, large square footage or unique overall, those are a few examples of upcharges. Travel time can also be an extra charge for an appraiser if they have to travel to get to your location. You will pay for your appraisal usually through an online portal with your credit card information.

Remember to contact us at Primex Mortgages if you have questions about your existing home or mortgage or want to sell and relocate! CLICK HERE to book a quick call to review your mortgage!

Trish & The Primex Team

Contact us today!

604-552-6190

support@primexmortgages.com

Renovating to Save Money.

General Trish Pigott 3 May

Are you planning on buying an eco-friendly home, or plan to make improvements to your home for energy efficiency purposes? Did you know that there are many incentive programs to support households make these changes?

Under the Low Carbon Economy Leadership Fund, the federal government is helping British Columbians with financial incentives to help households save energy and reduce greenhouse gas emissions by switching to high-efficiency heating equipment. This is a part of the Government of Canada’s plan to achieve carbon neutrality by 2050.

CleanBC Better Homes has many rebate programs to help British Columbia residents make the switch to save energy. Many of these programs have rebates for upgrading heat pumps, insulation, windows/doors, heat pump water heaters and electric service upgrades. Click here to see their many programs to find out what you qualify for. You must apply for the grant before you begin renovating.

There is also the Canada Greener Homes Grant, which is an initiative that provides grants and a loan for EnerGuide evaluations for retrofits. They provide grants from $125 to $5,000 depending on what your home qualifies for, they also provide up to $600 that goes towards the total costs of your pre- and post retrofit EnerGuide evaluations. You must apply for the grant before you begin renovating. You can check your eligibility here.

But did you also know that if you qualified for mortgage insurance, each insurance company has their own program for refunds towards energy efficient upgrades?

At Canada Guaranty, one of Canada’s mortgage insurance companies, they have the Energy-Efficient Advantage Program. The program allows you to qualify for a 25% premium refund for borrowers who are purchasing an energy efficient home or making energy efficient upgrades. This is applicable to all Canada Guaranty mortgage insurance products. Applications for this refund must be submitted within 24 months of the mortgage closing date. Refunds are processed and mailed directly to the homeowner within 30 business days.

Mortgage Insurance Premium Refund Example (25%)

$475,000 Mortgage at 95% LTV Premium Payable*
Standard Premium Amount (95% LTV = Premium rate of 4.00%)

Energy-Efficient Premium Refund (25% of premium amount)

Total New Premium (minus refunded amount)

 $19,000.00

($4,750.00)

$14,250.00
*For the purpose of this example, the mortgage insurance premium does not include any applicable provincial sales tax.

Find out if you are eligible here.

At Sagen, another Canadian mortgage insurance provider, previously known as Genworth Canada, they have the Energy Efficient Housing Program. The program offers a refund of 25% of the mortgage insurance premium for borrowers purchasing an energy efficient home or making energy-saving renovations. This program is available to all homeowners with Sagen mortgage insurance products. To apply, you can complete the online application or download and mail the document to their headquarters. You can learn more about the program and apply online here.

Lastly, at CMHC, another one of Canada’s mortgage insurance providers, they have the program CMHC Eco Plus. Which again offers 25% of your mortgage insurance premium back. Find out your eligibility here.

If you’re thinking of renovating, or purchasing with improvements, call us today at 604-552-6190. Or you can book a time to chat with Trish here to find out how you can refinance your mortgage to start renovating your home.

 

Trish & The Primex Team 

 

How to Talk to Your Parents about Reverse Mortgages.

General Trish Pigott 26 Apr

Some more good information about Reverse Mortgages from the Dominion Lending Centres House Blog. 

Talking about money is one of the last taboos and can make people feel very uncomfortable – a feeling that’s only amplified when it comes to talking about your parents’ money. However, when a conversation is difficult, that normally means it’s worthwhile having; and getting transparency on your parents’ financial situation can help you help them make the best financial decisions for their future.

If you think a reverse mortgage would be beneficial to your parents, we’ve put together some top tips to help you broach the topic with them.

Sensitivity is Key

Your parents may feel uncomfortable talking about their finances with you, especially if they have any worries regarding their situation, so be sure to approach any financial talk with sensitivity. Listen to them, show empathy, give them the space to speak, and show your willingness to help them find the solution that works for them.

You might also want to reassure them that you have no expectations regarding inheritance and that you’d rather they live their retirement the way they’ve always wanted.

Choose the Right Time

Conversations around finances mustn’t be rushed so set a date for the conversation when you both have plenty of time. If possible, meet up face to face and give the conversation your full attention – don’t do chores as you talk.

Start the Conversation Right

There are several ways of broaching the topic of reverse mortgages with your parents. If you’re comfortable being direct, you could simply ask: “Mom, are your finances ok?”.

If you’d rather be more subtle, you could start the conversation in a more roundabout way. Perhaps you could ask about the house and whether there’s anything they’d like to update, or maybe you ask about their retirement and whether they’re able to do all the things they’d like to.

These conversations can lead naturally into a discussion about monthly income, assets, and savings and provide an opportunity to explore how the reverse mortgage can help them increase their cash flow and boost their standard of living – all while staying in their own home!

Come Prepared

While you don’t need to prepare an entire script, it’s a good idea to think about what you’ll say beforehand. Do some research on the CHIP Reverse Mortgage and get a clear idea of how it would benefit your parents. Think about the questions they might have and come up with some answers.

It’s also a good idea to bring resources with you such as a CHIP Reverse Mortgage brochure or our new book Home Run: The Reverse Mortgage Advantage, which takes a deep dive into using reverse mortgages as a strategic retirement tool.

Follow Up the Conversation

Don’t ask for a reaction or any kind of decision right away. Give your parents time to digest what you’ve spoken about, re-read any information you’ve given them, and think about any questions they have. Don’t expect one chat to accomplish everything, follow up in the next few days with a call.

Talking about finances is difficult at the best of times – even more so when the finances in question are your parents’. But hopefully, with the help of these tips, it’s a conversation you’ll now find easier to have. ~ This article was provided to DLC from Sue Pimento

If you have any further questions about reverse mortgages, or would like to see if this would work for you and your family, you can contact us at 604-552-6190, email us at support@primexmortgages.com or CLICK HERE to book a free call with Trish!

Trish & The Primex Team 

 

How to provide a tax-free gift to your children with the CHIP Reverse Mortgage.

Home Tips Trish Pigott 19 Apr

The current economic landscape can be challenging for young Canadians to navigate as they face uncertainty with heightened interest rates and inflation.

This can be frustrating as they are just starting to build their career, considering buying a home or starting a family. If you are a parent, you may be thinking about how you can help your child during this period.

The CHIP Reverse Mortgage by HomeEquity Bank is a sound financial solution that can help you support your loved ones by providing a tax-free gift.

The Gift of Early Inheritance 

As a parent, you may want to provide an early inheritance to see your adult children use the funds to improve their lives in a time of need.

By giving an early inheritance, you can avoid probate fees (estate administration tax) and save money by bringing you to a lower tax bracket (*HomeEquity Bank requires all clients to receive independent legal advice to review the mortgage contract and ensure they fully understand the terms and conditions). With an early inheritance, your children can pay for their wedding, start a business, pay off student loans, make a down payment on their home, and much more.

Speak to your tax specialist for more details.

How the CHIP Reverse Mortgage Works

You may have heard of people using a home equity line of credit (HELOC) or liquidating their investments to give an early inheritance. However, there are disadvantages associated with loss of earnings or tax payable when it is time to sell their investments.

The CHIP Reverse Mortgage by HomeEquity Bank allows you to unlock up to 55% of the equity in your home without any of these challenges. With the CHIP Reverse Mortgage, your investments remain intact, and no monthly mortgage payments are required. Therefore, your income is not affected, and best of all, the money you get from the CHIP Reverse Mortgage is tax-free!

Interested in giving a gift to your children or would like to know more about eh CHIP Reverse Mortgage? Contact us at 604-552-6190 to find out if this product is right for you and your family.

You can also CLICK HERE to book a free call with Trish to review your mortgage!

Trish & The Primex Team 

Do you need title insurance for a new-build home?

General Trish Pigott 15 Mar

The housing supply shortage is one of the top issues in Canada’s real estate market. But, cities are seeing a massive boom in new-build housing.

New construction offers many advantages, like more energy-efficient heating and cooling systems. Their titles can also feel less risky to transfer. After all, if the land was previously vacant, there’s no chance of unpermitted work from a previous owner causing losses for new buyers.

But did you know that new builds carry most of the same title and off-title risks as existing homes? Here’s why.

The home may be new, but the land isn’t

Even unimproved land belongs to someone. The land for the new construction may have changed hands several times before the developer bought it. Every transfer of the land can add defects to the title. Those defects can cause losses for the people who buy homes built on that land. On top of that, both the municipality and the developer might make a mistake or miscommunicate, which can end up causing a problem with the property.

Here are just some of the issues that can cause losses for owners, even on new constructions:

  • Zoning mistakes, which can happen on either the municipality or the developer side.
  • Setback agreements the developer didn’t know about, which results in homes built too close to the road.
  • Pre-existing liens, for example from property tax still owed by the previous owner.
  • Errors in the registration of the title.
  • Pending legal action against the property that the developer didn’t know about.
  • Builders’ liens, if the developer wasn’t able to fully pay a supplier or contractor.

Subdivisions can add extra complications

When an owner buys a property in a subdivision, they’re getting the title to that specific property. But all the land in that subdivision would have been under one original title before it was parceled out. The problem is, if someone has a claim against that original title, every property in the subdivision could be subject to it.

If the land for the subdivision was assembled from existing properties, that can add complications to the title of the assembled land. Those issues can then impact the new properties parceled out of that assembled land.

The developer could also make mistakes setting the property lines in a subdivision. If that happens, or if there are issues with the Real Property Reports/surveys conducted for any of the properties, the owners of those properties could have to deal with the consequences down the road.

How can title insurance help new housing starts?

Title insurance is a great solution for new construction because it can cover homebuyers for the risks associated with all properties, risks introduced by subdividing land, and even title fraud. A title insurance policy protects the insured for as long as they have an interest in the property. It also works as a better closing solution than Western Conveyancing Protocol alone, or gap-only insurance.

Builders help with some of the risks of new construction by issuing a Real Property Report to the owner. It’s a useful document, but it has a limited scope and doesn’t offer owners any recourse if an issue comes up. It also becomes obsolete if an owner puts up a new exterior structure, like a fence or a deck. A title insurance policy covers the outside elements of a property as well as the home itself, which means it still provides protection to future buyers if the current owner adds structures.

Post construction endorsement

FCT, The First Canadian Title Company, offers more protection on new construction with our Post Construction Endorsement. It advances the policy date by one year for 14 covered risks, including encroachments, work orders and zoning bylaw violations.

That means the policy covers any later improvements to the property the developer had contracted for before the closing date. Owners can take possession of their new-build home knowing that FCT is here to help handle surprises down the road.

If you have any questions on how this may affect your home, don’t hesitate to contact us! Our job is to ensure your mortgage process goes smoothly.

Trish & The Primex Team

 

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