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CMHC Clampdown on Mortgage Fra

CMHC Clampdown on Mortgage Fra

Recently the Canadian Mortgage and Housing Corporation (CMHC) formally asked the Canada Revenue Agency (CRA) to take a more active role in verifying income claimed on mortgage applications in an effort to clamp down on mortgage fraud.

The CMHC says the move is necessary given that the industry’s current detection tools have not kept pace with the increasing sophistication of threat we face. 

Data backs this up, with a 2017 Equifax study finding that a full 13% of Canadians would be comfortable lying in order to get a mortgage approval. The study also noted a 52% rise in suspected fraudulent mortgages since 2013.

The CRA Solution: Independent Income Verification

As a result of the CMHC request, the CRA says it is now exploring ways to improve how it delivers taxpayer-specific information in a secure manner, including securely sharing tax information with financial institutions contingent on client consent.

Fraudulent income documents can be easily created for salaried employees and self-employed alike.

The mortgage application process can be extremely document heavy. This creates opportunities for fraud. Giving lenders direct access to CRA data will allow for accuracy and speed in confirming income.

But not everyone is behind CMHC’s request for direct involvement from the CRA, arguing that this is an issue best left to underwriters.

Their job is to verify the claims. If they can’t they should be fired and replaced by someone who can.

Others point out that credit rating is more important than income verification anyway. If someone has a high credit rating, it shouldn’t matter what their income is. If they fight and scrap for under-the-table money to pay their bills on time, then it should be of no interest to the insurance company where the money comes from.  And besides, involving CRA opens more people up to audit.

Keeping you informed, keeping me in mind.

JUNE 2018 MARKET PERFORMANCE

JUNE 2018 MARKET PERFORMANCE

As many of you head off to enjoy summer vacations, we take this time to look at the market performance In our area, Pinedale/Forestwood neighbourhood, in order to keep you well informed and up to date with the real estate market.

In early May, 2018 the Bank of Canada announced another increase in the mortgage stress test interest rate used for those seeking a home loan.

The rate increased by 20 basic points, from 5.14% to 5.34%. Previously only those seeking an insured mortgage ( paying less than 20% of a down payment ) were required to go through the stress test. 

But os of 2018, all homeowners must pass.

The stronger stress test is meant to ensure that borrowers can still keep up with their mortgage payments as interest rates are rising.

The strict rules mean more first-time buyers will have to wait longer and save up more before diving into homeownership, or seek other ways to boos their downpayment, most often asking help from parents.

If you are contemplating a move this year, just call or email me and I will make sure that you receive detailed related information to help you make an educated decision that most support your needs. 

Our neighbourhood continues to be a highly sought after location, for its preferred lot sizes, proximity to HWY and all family life conveniences.

The buying market are seeking out well presented homes, which are often quickly receiving an offer. This is a key component to realizing the maximum value for our sellers.  

In June our neighbourhood had 41 sales, with average days on the market between 27-31 days.

In general, we had less listings on the market, fewer sales and lower prices compared to June 2017.

However, it is important to keep in mind that 2017 was a very unusual year for real estate to say the least.  Therefore, to compare 2018 performance to 2017 is not a fair perspective on real estate in general.

 

Now to the real numbers & total transactions for June 2018. Sales in our neighbourhad included:

3 condo apartments, with average sale price $ 493,000

5 condo townhouse, with average sale price $ 481,000

10 freehold townhouses, with average sale price $ 583,000

4 detached 2 story home, with average price $ 979,000

3 detached back split homes, with average sale $ 840,000

5 detached side split homes, with average sale $ 714,000

6 bungalow homes, with average price $ 752,000

I semi detached, with average price $ 555,000

 

TIPS FOR RENTING OUT AN INVESTMENT PROPERTY

TIPS FOR RENTING OUT AN INVESTMENT PROPERTY

4 tips for renting out an investment property

Buying an investment property can be an exciting way to generate additional monthly income& increase your assets. But, there are a number of things to keep in mind to ensure it’s a successful venture.

Here are some tips to ensure a positive results:

1-SCREEN TENANTS

This includes a credit check, a call not to their previous landlord only (who might be willing to lie in order to get rid of the tenant), but at least 2 references

2-TALK WITH YOUR INSURANCE BROKER

Renting out a unit to tenants can have an effect on your home insurance. Connect with your broker from the outset will help ensure you are adequately protected in case any issues arise

3-KNOW YOUR RESPONSIBILITIES

The Residence & Tenancy Act has set aside a number of responsibilities that landlords should be aware of. You need to familiarize your self with them in order to keep the law on your side

4-BE PREPAID IN CASE OF AN EMERGENCY

Have a list of trade people the ready, and provide emergency contact information to tenants so they can always reach the right person promptly.

 

Keeping you informed. Keeping me in mind!

 

SUMMER VACATION

SUMMER VACATION

Summer vacation is almost here and you still don’t know what to do? You dont have to think far places to have an awsome time. Consider Quebec, where the most visited regions are: Montreal, Quebec City and Easter Townships. Here are great reasons to spend your vacation just around the corner in our beautiful Canada:

 1. No exchange rate

Travelling in Quebec means not having to worry about the value of the Canadian dollar with respect to the American dollar or the Euro, or chasing down ATMs or a bank or currency exchange counter to change your money!

2. Awe-inspiring scenery

The whales in Tadoussac, Perce Rock, Anticosti Island, or a cruise on the Saint-Lawrence with views of the Chateau Frontenac.

These are just a few of Quebec’s main attractions! Without a doubt, Quebec is beautiful and grandiose, and just as majestic as countless other places on the planet.

3. A not-so-far-away voyage

Why spend days driving or hours waiting in airports? Quebec’s holiday roads aren’t that long, which means your kids won’t be asking you “Are we there yet?” over and over again.

5. Quebec is for foodies

With its many restaurants, food truks, diners and public markets, there are tons of dining options to whet your appetite.

Thanks to gourmet cuisine with local flair, it’s not surprising that the Belle Province is home to 28 of the top 100 restaurants in Canada! 

6. So many activities you won’t know what to do

In the summertime, activities and festivals abound.

Young and old, sports fans and cultural enthusiasts… there’s something for everyone..

8. No jet lag

Travelling in Quebec also has the advantage of not wreaking havoc on your body clock due to jet lag.

9. Taking your pet along

Leaving a pet behind, even for just a few days, is not always easy…

However, when travelling in Quebec, your bestest pal in the whole wide world can come along for the ride.

No need to ask a family member, or anyone else for that matter, to take care of your four-legged friend while you’re gone!

Plan your summer vacation well this year and Happy Travel!

 

NEW APP FOR DOWNTOWN PARKING!

NEW APP FOR DOWNTOWN PARKING!

Parking in downtown Burlington is getting a digital upgrade!

The city announced real-time information on available spots and a new payment app will be among the new initiatives it’s introducing to make it easier for drivers to find spaces and pay for parking.

Beginning in 2017 and continuing into this year, the City of Burlington has installed occupancy sensor technology that show real-time information about available parking spaces in the downtown, at every on-street parking space and all spots at city-owned lots.

Small sensors are placed in every parking space and send a wireless signal to a nearby receiver when a vehicle is parked in a spot.

Using the data from the occupancy sensors, real-time parking supply information is displayed on new digital counter signs showing drivers the number of available spaces.

The signs have been installed and are expected to be operational by the end of May.

The city is also installing new “digital way-finding” signs on primary downtown streets within the next few weeks.

These signs will also display real-time information about the number of available parking spaces in nearby lots and use directional arrows to guide drivers to those parking lots with empty parking spaces.

Residents and visitors to Burlington can now use a new mobile parking app called HonkMobile, which launched on April 30.

The app, which is used as the mobile parking provider in 11 southern Ontario cities, allows users to search, pay for and top-up parking payments directly from their smartphone, tablet or computer.

It also sends notifications to users when their parking time is about to expire to allow them to buy additional time remotely and avoid parking tickets.

The mobile app can be downloaded from the Apple App Store or Google Play store using any internet-connected device. Users are required to sign up for an account and pay a transaction fee of $0.35 for each payment.

HonkMobile replaces the city’s former online payment tool Telepark and can be used at on-street spaces and in city parking lots.

Those who download the app can use the code BURLINGTON to receive $5 off the cost of parking with their first payment between now and June 30.

The City of Burlington also recently improved its pay-by-plate parking machines, which launched in 2016 in the downtown, to make the machines easier to use.

The updates include:

• new, step-by-step, easy-to-follow instructions displayed on the payment screen;

• new stickers on the outside of the machine to provide visual markers;

• increasing the brightness of the payment screens;

• the relocation of a remote server to reduce payment processing time.

For more information on parking in the city, visit www.burlington.ca/parking.

OUR NEIGHBOURHOOD MARKET UPDATE

OUR NEIGHBOURHOOD MARKET UPDATE

2018 started with big changes in real estate, from introducing the " Stress Test" in the mortgage world, to applying greater restriction on foreigner buyers, as well the incresed interest rate from bank of Canada. All combined reflected with buyers and sellers taking extra time before making any moves, in order to get a firmer grip on these new changes.

The REALTORS® Association of Hamilton-Burlington (RAHB) reported:

- The median price of freehold properties increased by 2.7 % in February over the same month of the previous year while the median price for condominium properties increased by 4.5 % compared to the same period.

 - The average price of freehold properties in was 3.6 % lower than in February 2017 ; the average sale price in the condominium market increased by 2.7 % compared to the same period.
 
- Prices in both the freehold and condominium markets have moderated from the year - over - year increases we saw through the last couple of years. Condo prices showed gains in both average prices, but the freehold market saw a dip in average sale price.
 
- The average number of days on market increased to 37 days from 22 days in the freehold market and in creased to 34 days from 21 days in the condominium market, compared to the same month last year .
 

While the days on market has increased substantially from last February, you have to remember that last February was a remarkably active month with record sales for the month. In fact, February 2017 sales were 27.7 per cent higher than the 10 - year average. This February, the average time it took to sell a listed property actually followed the normal pattern for the month – that is, it was lower than it was in January . With the sales - to - new - listings ratio still in the low end of seller’s market, Like most years, we are seeing the sprouting of the spring market that we usually see in February.

As for our neighbourhood, here are the activities that took place in the first 2 months of 2018:

CONDO APARTEMENT

JANUARY: We had 3 sales. Average days on the market (ADOM) 26. Average sale price (ASP) $ 402,967 

FEBRUARY: We had 5 sales. ADOM 75. ASP $ 464,100

TOWN HOUSES/SEMI

JANUARY: We had 8 sales. ADOM 22. ASP $ 535,631

FEBRUARY: We had 4 sales. ADOM 61. ASP $ 532,475

DETACHED 2 STORY

JANUARY: We had 1 sale. ADOM 91. ASP % 942,000

FEBRUARY: We had 1 sale. ADOM 11. ASP $ 775,000

DETACHED SIDESPLIT

JANUARY: We had 10 sales. ADOM 60. ASP $ 722,290

FABRUARY: We had 2 sales. ADOM 25. ASP $ 736,000

DETACHED BACKSPLIT

JANUARY: We had 0 sale.

FEBRUARY: We had 2 sales. ADOM 65. ASP $ 731,450

DETACHED RAISED RANCH

JANUARY: We had 3 sales. ADOM 67. ASP $ 753,300

FEBRUARY: We had 1 sale. ADOM 18. ASP $ 808,000

 

If you have any questions or concerns, or you would like a more indepth report on your property just call or email me today. I live in the neighbourhood, and it's my pleasure to assist in every way I can!

 

CAPITAL GAINS EXPEMPTION

CAPITAL GAINS EXPEMPTION

in 2017 The Federal government have imposed an obligation to report the sale of a principle residence on your following tax return. This is so even though no tax is payable on a principle residence.

If you purchase and sell principle residences within a relatively short period of time, Canada Revenue will probably audit you at some point in time to-claim that the principle residence exemption does not apply.

Canada Revenue can take the position that you are engaged in the business of buying and selling properties and the entire gain would be taxable. It might also be taxed as business income.

Failure to report the sale of a principle residence may result in penalties, fines and legislation actually gives Canada Revenue the right to disallow the capital gains exemption even though you may be entirely otherwise entitled to the exemption. 

Keeping you well informed is my everyday business.

Burlington public library offers light therapy!

Burlington public library offers light therapy!

A specialty lamps are used to help those suffer with seasonal affective disorder (SAD), a type of depression that coincides with the decrease in day light hours during the long cold winter.

The light therapy box mimics natural outdoor light, by delivering mega bright UV filtered light, to help boost mood and energy levels. 

Unlike the Fluorescent bulbs that can be tiring to sit under.

This is a great step to increase awareness on mental health, and increase access to things that align directly with it.

So if you find yourself more sluggish or irritable these days, you are invited to enjoy a daily dose of brightness at your local library!

Even when winter is just a memory, light therapy lamps are available to use year around at BPL, whenever you need a pick me up!

YOUR RETIREMENT SAVING PLAN

YOUR RETIREMENT SAVING PLAN

It's this time of year again! What will it be, RRSP ( registered retirement saving plan ) or TFSA ( tax free saving account )? 

One thing for sure, either one you chose, your future is already looking brighter.

To help you make the best decision, here are few important facts to consider and some tips to help you decide:

 

RRSP

 

-  Tax deductible: contributions reduce the personal income tax you pay.

  • Tax sheltered: investments income in an RRSP are not taxed
  • Tax deferred: money inside an RRRSP is not taxed until withdrawn

 

TFSA

 

  • Non tax deductible : contributions do not reduce your personal income tax.
  • Tax sheltered : investment income inside a TRSF is not taxed.
  • Tax free : money taken out of a TSFA are not taxed.

 

Three important questions to answer:

 

1-What’s your goal?

 

Saving for a short term goal? 

A TSFA may be better choice because withdraws are not taxed.

Buying your first home?

Consider saving your money in an RRSP to use the first -time-home- buyer plan ( HBO). Once your RRSP reaches $25,000.00 from your RRSP ( the limit you can withdraw under  the HBP tax free), redirect savings to a TFSA. This way you can withdraw from your RRSP and additional savings from the TFSA also tax free for your new home.

 

Remember: 

 

HBP withdraws need to be returned to your RRSP over a maximum of 15 years.

If your goal is long term, say saving for retirement, an RRSP is still a good option.

 

2 - Are you in a high or low tax bracket?

 

RRSP contributions lower the income you pay tax on. When your income goes up, so does your personal tax rate.

So if you’re in a higher tax bracket, consider putting your money into an RRSP to reduce taxes.

If you’re in a low tax bracket but think you will be earning more in the future, consider parking your money in a TSFA. In the meantime, carry forward your RRSP contribution room into the future when you get into a higher tax bracket. Then use your TFSA savings to make a sizeable RRSP contribution to reduce the tax you pay. 

When you increase your RRSP contribution amount, you can also boost your income tax refund, which can be used to pay off debt.

 

3 - will you get a big pension?

 

TFSA withdraws are not considered income and are not taxed as a result.

In retirement, if you have a high income, you may lose or become intelligible for some federal income benefits such as Old Age Security benefit ( OAS). 

To provide perspective, the OAS clawback threshold for 2017 is $74,788. 

Any income above this threshold reduces the benefits you can get.

If you expect a big pension, put some savings into a TFSA to keep your taxable income low so you don’t risk losing some government benefits.

 

MARKET TURNAROUND IN 2017

MARKET TURNAROUND IN 2017

The Realtors Association of Hamilton-Burlington reported, that even while sales were down from the previous year, the total $ volume of sales reached a new high and resulted in a 14.4 % increase in all property average sale price for the 2017 year.

The real estate market in 2017 was notable for the abrupt change through the spring.

The market went from a strong, prolonged seller's market, where the average time to sell a property was 14 days, to a more balanced market where buyers had more time to view and compare properties before putting in an offer to purhase and an opportunity to negotiate a fair price for both parties.

In the residential market, listings were uo 16.4 % compared to the previous year, and sales were down 6%.

In the overall residential market, the median sale price was up 15.3 % over the previous year, and the average price was up 14.6 %.

The median sale price for freehold properties was 15.7 % higher than 2016, while the median for condominium properties was 16.9 % higher.

From those highs, there were minor fluctuations up & down, but the general trend continued downward to the end of the year. Yet even with the median & avarage prices settling after the highs, they were still above 2016 levels by a good margin for the year.

One thing to always keep in mind is that the year end review of the real estate market should not be understood to be an indicator of what a particular property is worth.

Amarket has many and varying influences, so what might be average in one area is quiet different from what is average in another.

For a detailed, accurate and up to date market evaluation of your property, give me a call. 

 

 

 

 

Should You Rent Out Part of Your Home?

Should You Rent Out Part of Your Home?

Have you ever considered renting out a room to a student or renovating your basement into a self-contained rental apartment?
It’s a big decision. There are many pros and cons to consider.
On the pro side, renting can provide you with additional income. An extra few hundred dollars a month can go a long way towards paying down your mortgage or splurging on an exotic summer vacation.
Creating rentable living space in your home —
for example, an “in-law suite” featuring a kitchenette and bathroom — may also increase your property’s market value.
On the con side, you’ll have more costs and responsibilities as a landlord. For example, you might need to purchase extra insurance because basic home insurance policies typically do not cover rental units, even if you’re just renting out a room. You’ll also be responsible for dealing with repairs sometimes in the middle of the night.
Also, if you’re not careful about the renter you choose, you might end up with a “problem tenant”. For example, you could have a tenant who is consistently late on rent payments or simply stops paying. That can be stressful.
If you’re deciding whether or not to rent, be sure to check local laws and regulations. Many jurisdictions have very strict rules regarding renting out space in a residential property, and those rules change frequently. Make sure you get the latest information. For more assisstance you can call or email me.

EVENING MOONLIGHT SNOWSHOE HIKE!

EVENING MOONLIGHT SNOWSHOE HIKE!

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