Are You Still Qualified for A Loan/Mortgage?

Are You Still Qualified for a MortgageWith the recent major changes by the government to the lending rules, the usual way of doing business may no longer apply.  Even if you were ‘approved’ before, you may not qualify for a loan today.  This especially applies to the self-employed, commission earners as well as purchases with longer closing dates such as new homes.  Even though, I dislike jargon as much as the next person here are two terms you might not be familiar with but affect your ability to borrow: TDSR and GDSR.

GDSR stands for Gross Debt Service Ratio and TDSR stands for Total Debt Service Ratio.  These terms are percentages that lenders use to figure out how much debt you can afford or ‘the ability for you borrower to service their debt’.

The Gross Debt Service Ratio (GDSR) is based on your typical monthly housing costs.  Normally, that includes your mortgage principle and interest payments, property taxes, secondary financing, heating and condo fees, if applicable.  If you take all those expenses and add them up then divide it by your household family income, the government would like to see that number to be less than 32-39%.

The Total Debt Service Ratio (TDSR) is based on all of housing costs (same as GDSR) plus payments on lines of credit, credit cards and other debt. If you take all those expenses and add them up then divide it by your household family income, the government would like to see that number to be less than 44%.

Keep in mind that your income is your gross monthly income, not your net (take home amount).  Banks need to follow the lending rules set out by the government and approvals are always subject to changes in lending rules like those that just happened.  If you had an approval, you may want to get it re-approved.  If you have not been approved, don’t assume you qualify.

Please note that I’ve assumed your purchase is for a personal residence.  If you are considering buying for investment, speculation or any reason other than your primary residence.  Many more factors come into play.

Do you have a real estate question you want answered?  Feel free to call me at 1-855-737-8383 or send an email to Info@StevenSilvaTeam.com  Perhaps I’ll feature your question in the next issue!

Tarion Performance Guidelines 2013

Download the Ontario New Home Warranty Performance Guidelines Here

The Construction Performance Guidelines – Third Edition provides criteria that sets out the minimum performance required in the construction of New Homes in Ontario . They relate to work and materials deficiencies and complement the Ontario Building Code.

The Third Edition of the Construction Performance Guidelines apply to conciliations, claim inspections and warranty reviews conducted by Tarion on or after January 1,2013.

What Home Inspectors Don’t Tell You

Home Inspectors dont tell you

Getting a Home Inspection when you buy a home is very wise.  Unfortunately, Realtors and Buyers can rely too heavily on the Home Inspection and be surprised after they close and move in. Even if you use a Registered Home Inspector, here are some limitations that you should know about.

Home Inspectors Don’t Sweat the Small Stuff:  They know that you are buying a very expensive property and they typically have a short time to inspect (about 3 hours).  While home inspectors will try to find as many little things as they can, they will typically look for things that will cost you over $500 in the next few years (unless it is a safety issue).

Water Quality, Water Quantity, Water Source, Septic Systems, Air Quality, Asbestos Radon Gas and Mould are not included:  In a standard home inspection, special tools are not used.  There is no chemical analysis, water sampling or laboratory testing.  A home inspector looks for signs of moisture, not mould.   Mould would be evidence of moisture. They also can’t comment on the quality of air or test materials to see what they are.  They can sometimes identify materials that may contain these potential health hazards but they can’t comment on their presence or their effect on you.

Termites and Pests: Many inspectors can identify termite tubes if they are readily visible but they are not Termite Inspectors.  If termite tubes are suspected get a termite investigation first before you hire a home inspector.

Swimming Pools, Chimneys Flues, Wood Burning Fireplaces, Wells and Stoves: Most inspectors will recommend a “further evaluation by a specialist” as they are not part of a home inspection standard of practice although they may point out defects that are obvious to the home inspector.

Many experienced Realtors will know the limitations of their preferred home inspector and will recommend additional due diligence if needed.  Just make sure that you have enough time to perform them.  I will often do a Home Pre-Screening in order to identify what will be required before a home inspector is called.  If you have a home that you want to sell that is over 20 years old or are thinking of buying one, a home inspection may not be enough to protect you.  Buying a home with unforeseen problems can lead to high unexpected costs.  Be sure to hire the right team of advisers to protect you during your next Real Estate transaction.

If you are looking to Buy, Lease or Sell From the Toronto West End up through Vaughan, Aurora Newmarket, East Gwillimbury, Keswick, Bradford, West Gwillimbury, Bond Head, Innisfil we can help. If you need someone you trust outside our area, we have partners throughout southern Ontario and would be happy to connect with a local professional. Call Toll Free 1-855-737-8383 any time or send an email to StevenSilvaTeam@gmail.com

How Do I Get the Best Home for the Lowest Price?

Getting the most value for your dollar... Click to Read More

Price is only one of several factors to consider when purchasing a home.  The process of buying includes looking at the big picture and seeing the value of the home.  Even if you are a seller, you should think like a buyer and highlight the home’s value.

The best home is rarely the cheapest one.  Factors that affect the value of a home are:

Preferences:  I suggest Buyers make two lists with one outlining their needs and the other a list of their wants.  They should compare lists with other members involved in the buying process so that everyone agrees on what’s important before the buyers start looking.  As a seller, which needs and wants did the home satisfy with you?

Budget:  Buyers should be pre-approved by a qualified mortgage specialist before their search and find out what monthly mortgage payments are possible given their debt and income.  For example, a home with income potential can alleviate costs compared to a less expensive home without the income.

Location:  The “best” price is usually not the cheapest price.  Desirable locations demand higher prices and communities with higher prices also often retain their value the best.  Buyers should consider the amenities and sellers should highlight them as much as possible.

 Negotiation:  Inexperienced buyers sometimes want to “lowball” their initial offer.  Too often they end up disappointed for a variety of reasons such as competition with other buyers, a negative reaction from the seller, and the need to start all over again if negotiations fail.  Understanding the types of negotiation styles and the benefits as well as the disadvantages of each will affect the final purchase price.

Buyers that understand their preferences, buy within their budget, in a location that serves them best and, negotiate effectively, end up spending less in the big picture.  Sellers that understand this can provide buyers with what they want and also put more money in their pocket.

As always, if you have any Real Estate Questions we are here to help.

If you are looking to Buy, Lease or Sell From the Toronto West End up through Vaughan, Aurora Newmarket, East Gwillimbury, Keswick, Bradford, West Gwillimbury, Bond Head, Innisfil we can help.  If you need someone you trust outside our area, we have partners throughout southern Ontario and would be happy to connect with a local professional.  Call Toll Free 1-855-737-8383 any time or send an email to StevenSilvaTeam@gmail.com

Getting Ready To Sell Your Property…

In preparing to sell your property…

Steven_Silva_TeamSteven_Silva_TeamThe Steven Silva Team will first assess your situation: – the motivation for selling – market timing – your expectations of the Real Estate Market – your expectations of the Brokerage – your expectations of the Realtor.  Secondly, we assess the property itself by: – identifying potential issues that may come up, such as during a home inspection – compiling a list of features and benefits – comparing the property with similar properties currently for sale – comparing the property with similar homes that recently sold. Finally, we will discuss how best to present the property for buyers. Together we can come up with a marketing strategy and asking price that fits your needs and works in the current market. Call me direct  1-855-737-8383 or email AskStevenSilva@gmail.com to get started.

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