Thoughtful Agent in Ottawa

So What is Affordable Housing?

2012-01-30T19:40:00.000-08:00

Rarely available Freehold end unit offered for sale: $189,900.00

855 Grenon Ave Unit # 1 Ottawa / West Britannia - All brick semi-detached/row home built 1975. Common elements fee of $55 per month for Snow clearing and grass and tree care. Parking adjacent to unit. Not a condominium!

Freehold, three bedroom, two bath, end unit with 5 appliances. Private, west facing, fenced back yard. Mature Jack Pine trees. Finished basement with lavatory hook up.( was once a hair cutting salon ) High ceilings. Five Appliances included. Parquet hardwood on first and second floors. Newer windows, Gas Furnace 2004. Best value in the area!

So what is affordable housing?
Let's look at the numbers for today's interest rate which is 2.75%

A minimum of 5% down payment is required to purchase           = $9,450.
Closing costs would be needed out side of the down payment
which would cover Lawyers fees and disbursements                    = $3,780.
If you are a first time buyer you qualify for a provincial tax credit = $2,000.

Total amount needed to purchase up front cash is                      =$11,230.

A Canada Housing and Mortgage insurance fee would be added to your mortgage amount to cover the protected amount that equals about 15% of the purchase ( This fee covers the remaining part of the conventional mortgage amount or 20% down payment. 5% was calculated above)

The monthly mortgage payment would be   $847.
Taxes calculated monthly would be             $166.
Monthly association fee for grass and snow $55.
Insurance monthly would be about                $84.
Monthly Heat and light would be about        $150.

Total monthly living cost would be             $1,302.

The average of 82 rental listings in Ottawa today, excluding apartment building style living is $1,992. per month with the lowest rent at $1,925 per month.

With low interest rates, stable world markets, it is a good choice to purchase a home instead of renting.

Small is Beautiful in Westboro, Highcroft Ave Ottawa

2011-12-21T19:30:00.000-08:00

Easy to find bigger but it's rare to find smaller! Perfect location, funky bungalow in Westboro. Close to the busy retail/restaurant Richmond road strip and schools, tucked away on a tranquil tree lined street. Original sparkling stone stucco exterior; easy to maintain fenced lot 37 X 70 ft. Spacious open concept interior design. Smarts front closet/foyer addition.

Recent upgrades include mostly newer windows and doors, roof shingles, kitchen remodelled and high efficiency gas furnace installed. Spacious bedrooms all with oak hardwood flooring. Deep closets. Large, bright family room on the lower level beside a two piece bath. More photos to follow. Well priced to sell. Call Martin Elder for details. 613-236-5959

Priced to sell at $399,900.

With 10% down payment and a mortgage of $390,000 monthly payments would be $1,805.87

New Home Infill in Ottawa West - 372 Whitby Ave

2011-11-29T20:25:00.000-08:00

New homes command a premium price in Westboro. Raw land is so valuable that older homes in need of repairs will frequently be sold, torn down and new homes built in their place. Often there will be two semi detached homes on the raw land. Sometimes when the land is narrow a detached home will be build. The photo above is a good example of early infill projects where a property with sufficient side land would sever half the lot and permit the building of a detached home.

This home was build in 1990 at the beginning of the plateau years. Prices didn't rise significantly during the 10 years period. After that prices took off in 2000 when interest rates went down to historic lows. What suggests this house was built 20 years ago?

The first tip that this is an early infill is the simple roof lines and the sunken garage floor. The use of old railway ties as retaining wall material was typical of the period. Today there are concrete brick and block products that do an excellent job of retaining earth without the soil contamination and wood rot problems. Designers and architects were experimenting with the placement of the garage in relationship to the house. Instead of putting it behind with a side lane it was placed inside the house because the lots were narrow and didn't allow a side lane and the depth of the house increased due to the narrowness.

The attached inside entry became the new norm. This garage is partially submerged in the basement which is a good feature and above the living room, dining room and Kitchen are one great open living space. Very nice feature. Today that garage is on the main floor taking up taking up 244 square feet of living space. It makes for a narrow entry hall and frequently there is a powder 1.5 bathroom adjacent to the narrow hall.

All the windows and doors have recently been replaced on this house. That is a great feature costing about $24,000. New windows work mechanically better than old style period windows and they are much more airtight and efficient at holding heat in and keeping summer heat out. This house has an air exchange rating of about 5 per hour which is very good for the period year and much superior to when first built.

The house has had repair to foundation cracks. Last summer 5 cracks in total were repaired costing about $5000. That's a lot of money but a good investment to protect the basement and reduce humidity levels inside.

The roof was replaced using superior shingles and underlay. Grace water shield was just introduced in the 1990s and it has proved very good at preventing damage to ceilings and walls due to ice daming on the exterior lower portion of roofs.

Other significant upgrades include new gas furnace and tank less Rennai hot water system. With three bedrooms three bathrooms, family room and great room this is good value for an updated home in centre Westboro at $649,900. 372 Whitby Ave

Executive Down Town Condos Ottawa

2011-10-27T19:57:00.000-07:00

Rarely offered, executive Condos in down town Ottawa Under 500K penthouse, low rise unit with views of Rideau River, Court Yard, Vanier Village, Rideau Tennis Club. Two balconies, Hardwood floors, freshly painted in designer colours, Southern Exposure, Two bed, two bath with additional loft for guests or office. Condo supplies fireplace wood. Elevator, Spectacular views!

Receive a complete list of executive condo units in central Ottawa North of the Queensway visit www.martinelder.ca and request your executive condo list. To learn what your home is worth or what STAGING will do for your home value. Call Martin Elder for a no obligation home evaluation. Knowledge and experience you can trust.

Provided courtesy of Martin Elder, Broker, Keller Williams Ottawa Realty 613-236-5959

Advantages of Hiring an Ottawa building inspector

2011-10-21T21:12:00.000-07:00

Hiring a building inspector

In Ottawa the climate has extremes of winter freezing with mid January rains and summer hot spells that cause asphalt roads to ooze black tar. Home buyers should be aware that these extremes have an adverse effect on the exterior of a house shell. The roof shingles are made of asphalt and fiberglass with a granular top coat and the sun will dry out the shingle making it curl and fail. The winter will cause ice damming close to the eves of the roof and this will cause cold water to leak into the roof in winter and penetrate into the interior drywall.

The basement concrete or block foundation is exposed to additional freeze thaw cycles in the early winter unlike winters of 20 years ago when more snow insulated the ground from a deep penetrating freeze. I've seen basement walls crack and buckle from winter stress and it is expensive to rebuild a foundation wall. Assessing structural matters requires and in depth knowledge of building practice and force analysis.

Electrical wiring, insulation, furnaces and cooling systems are often a mixture of old and new. It takes experience to identify what is adequate and what could be dangerous. Your Ottawa real estate agent in conjunction with a certified building inspector will help to put it all in perspective and protect you from future difficulties.

Call now for the advantages of a pre-inspection for home sellers and for strategies to have the seller pay for the home inspection for the buyer. Be informed!

When to call your Ottawa Home Inspector, before or after an offer?

2011-10-16T22:15:00.000-07:00

At today's Open House I was asked when to do a home inspection, before submitting an offer or after?

That's a great question. So much depends on the market energy and the ability of the buyer to perceive possible problems and solutions. Imagine if four people are lined up to make an offer on the Ottawa house you want? It is smart to ask your real estate agent in advance what experience they have with building inspectors, building practices, old and new and what their track record is with the building report once completed. What is a home inspection supposed to do?

I'd be inclined to secure the house you want with an accepted offer. Then I'd proceed with an inspection. This way the buyer can always renegotiate when something is discovered that causes concern.

There are two emotional peaks buyers and seller experience when moving through a purchase transaction. The offer stage is a big emotional stress for everyone, then it calms down a bit when both parties agree on a price and date. The building inspection is booked and another worrisome period begins. Many sellers don't know what is in the attic or how the foundation is holding up. Who knows if the wiring is adequate or a safety hazard. Will the insurance company insure your Ottawa home? Just because the seller has lived in the house for 30 years doesn't mean the buyer wants to inherit the problems!

Sometimes there are minor concerns that are taken care of by the seller before the sale closing date. Sometimes the price is reduced to compensate for larger problems. Your real estate professional is the key to "pulling it all together" .Talk about the Ottawa home buying process and discuss the "what ifs" with your agent.

Electrified mouse in the panel!

Preferred October Mortgage rates

2011-10-12T07:06:00.000-07:00

Mortgage rates are very important because they affect a buyer's ability to purchase or refinance a home. The current posted rates below show a surprise in that the two year rate is now slightly better than the one year rate. The big news is that between the least expensive short tern rate and the long term rate there is a difference in payment of $238 per month per $100K.

So if you had a $300,000 mortgage and you choose the short term over the long term you would save $714. per month. Sweet!

This is what it would look like:

300k mortgage per month carrying cost ten year term = $2,055.

300K mortgage per month carrying cost two year term = $1,341.

Savings-------------------------------------------------------------- = $   714.

Term             Bank Rates          Rates I like!

1 YEAR               3.50%              2.89%

2 YEARS             3.55%             2.49%

3 YEARS             4.05%              2.89%

4 YEARS              4.79%            2.99%

5 YEARS              5.29%             3.29%

7 YEARS              6.35%            4.49%

10 YEARS            6.75%            4.79%

Call for a personal evaluation on your ability to qualify for a mortgage. Once you know how much you can comfortably finance it makes it a lot more fun to go out an buy your house! 613-236-5959 ask for Martin Elder, Broker at Keller Williams Ottawa Realty

Westboro homes for sale

2011-09-26T19:16:00.000-07:00

Westboro encompasses a large area of interest in Ottawa west. From steps to the Ottawa river bank to proximity to bicycle paths and still some might say I want to be close to the Richmond road strip of coffee shops, restaurants, and outing goods stores like the Trail Head, Mountain Co-op Equipment Store and Bustakah Store. Many Westboro homes are modest in size like this bungalow. Westboro in my mind includes McKellar Park and Highland park communities

This little bungalow dating from the 1950 is highly upgraded. The uncommon feature of this home is the tandem double car garage with entry and exit car doors. It's perfect for the hobbyist or restorer of fine vehicles/ aircraft builder. And Attractive price! just $298,000 Hurry call for a visit ! 613-296-8065

Westboro Condos - Churchill Ave

2011-08-11T05:16:00.000-07:00

Gracious steps lead to the front entrance of your new condo building. It is the first level unit as depicted left of the entrance. Master bedroom facing south and bathroom windows shown above the juniper bushes.

Recently built, this low rise condo in Ottawa West Westboro is ready to move into. choose from several available from a two or three bedroom and spa -like bathroom freshly painted. Hardwood flooring and Tiger textured granite counter tops in the kitchen make this a very attractive condo for the price!

Low key energy efficient windows, casement style, freshly painted walls and darker stained hardwood are decorator features. Call for details and a list of services in the neighbourhood.
Tel: 613.296.8065

Affordable Condos Ottawa west

2011-08-09T19:49:00.000-07:00

114 Valley Stream Drive Ottawa

Short Walking distance to Queensway Carleton Hospital and Valley Stream Manor. Easy access to public transit to Algonquin Collage or Bells Corners.

Nestled among beautiful mature conifer trees. Feed the birds..Private, quiet & safe. Bright end unit with additional west facing windows, inside entry to garage.

Three bedrooms, three bathrooms, en suite, spacious walk out from living room to the patio. Charming wood burning fireplace. Lots of basement storage!

Natural gas furnace

Central air conditioning

Price: $239,000.

Condo fee: $283.

For: Water, Management, Caretaker, Building Insurance, Snow removal.

Why rent? Hurry

Call 613-296-8065

Nicely maintained landscaping with fence wall to the right. There is a seldom used rail line on the other side.

Park like setting to grow some flowers. A great place to call home!

Ottawa Civic Hospital Rental

2011-08-09T19:18:00.000-07:00

A rare Rental in Ottawa City Centre!

Located beside Civic Hospital on Carling Avenue and close to Little Italy a short walk east to tempting restaurants and choice cafes. Dows Lake and the Experimental Farm are just a step across the street. Fabulous light filled executive Condo residence. Warning! Very quiet and private. This is a micro Condo community choosing calm and reserve over wild and wicked. LOL

Choice Stainless appliances, granite counters. Hardwood floors & Wood fireplace. Four bedroom two en suite baths; all large and spacious. Walk in Closet, of course. Freshly painted and well maintained. Garage with inside entry and possible second car parking if asked for in a diplomatic way. Snow removal and condo fee included.

Rent $2,400. per month

One year minimum

Utilities extra

Condo fees included in rent

available immediately

http://www.martinelder.ca/

Hurry! Call now. 613-296-8065

I am in a maze of boxes, what a mess, but I love being here!

2011-07-25T20:57:00.000-07:00

A lovely note that reads like poetry!

Home buyer down sizing. Wishing to be close to work place and wanting privacy to cultivate a glorious perennial garden. Cute house, garage and good neighbourhood.

Just received from a home buyer:

"I am in a maze of boxes, what a mess, but I love being here! Looking forward to making this house a home. Discovered lovely morning light comes through my bedroom window -- here is yesterday's dawn. thank you for your patience"

As a real estate professional, I want to help people make their dream home come true. I want to see them get to where they want to be in the least amount of fuss and pain. This was a great thank you note!

Martin

Westboro semi detached value, Ottawa

2011-07-07T20:31:00.000-07:00

Semi detached in Westboro Hampton Park
An Exceptional Executive semi detached home in Westboro Village with all the trimmings to please the empty nesters and the soon to have nesters! Three bedroom four bathroom with plenty of Hardwood flooring. I like the open space feeling of the great room where mom and dad can entertain the neighbours in style. Step out on the deck and turn the sizzling salmon. Pop back in and see how the game is going on the wide screen. There is plenty to love in this newly constructed home. Attached wide garage with additional parking in front.

Love the granite counters! I like especially the DCS gas professional series stove, combo with stainless venting, refrigerator and dishwasher... Groen single lever faucet. But who'd buy a house because of a faucet? I'd want more to see more befor I choose this one!

Oh! and compare this lovely home others in Westboro; It's stands out. Would you spend more money with fewer great features? . Call 613-296-8065

Westboro Village Detached Home

2011-05-18T20:01:00.000-07:00

Presenting: A lovely Fraser Ave home a two story all brick home with detached garage, backing onto NCC parkland and located within sight of the Ottawa river on a quiet neighbourhood street. There is a long list of upgrades. Newer roof shingles, doors and windows. Note the special attention to detail in the choice of replacing the original window. I like the high efficiency gas furnace, renovated kitchen and bathrooms, but I especially like the gleaming hardwood flooring and wood fireplace. For a home backing onto the park the spacious deck invites morning coffee and a newspaper while listening to bird song. Great for families to have all three bedrooms on the second floor so Mom and Dad can say nighty night! Separate dining room and lower level family room, there is lots to like. Hurry , call for more details and arrange a visit. Freshly painted and ready for your next move...

More photos and information to follow. Call 613.296.8065

Free On Line Market Evaluation

2011-03-18T12:40:00.000-07:00

Question: If the average price of a home in Ottawa was $361,000. in February 2011 what is the average price today?

Easy, an on line evaluation for your home is possible using a simple proprietary math formula. No obligation, and no need to phone. All I just need your address. I calculate your free on line http://www.martinelder.ca/ home market appraisal and send it to your email address. Just email me with your address. List the upgrades in the last 5 years and I'll respond usually the same day.

Use this link to email: melder@kwottawa.ca or visit my web site www.martinelder.ca for your free home appraisal.http://www.martinelder.ca/

Soeurs de la Visitation Broadview meeting

2011-03-03T08:34:00.000-08:00

Reporting on the controversial high density massive condo project by Ashcroft Developments; The standing room only meeting last night at Broadview Public school was boisterous and outspoken. I am pleased to see Highland, McKellar, Island Park residents speaking out with outrage over the City of Ottawa inaction regarding the development of former Soeurs de la Visitation site, 114 Richmond rd. Is it is a historic site or just a site of particular interest? Never before were people able to see over the of the high walled cloister. This areal view shows the other side of the walls showing a beautiful 19 century stone clutch of buildings and classic gardens.

Online Market Evaluation of Your Home - What's my house worth

2011-02-27T10:13:00.000-08:00

What's my Ottawa home worth?

Quick, on line market value for your Ontario home is possible using a simple proprietary mathematical formula. No obligation, and I won't phone you. I just need reference data retrievable from provincial government records and I calculate your free on line home market appraisal and send it to your email address. And I won't have to visit your home to see the interior. Of course, the appraisal is more accurate when you provide additional information about the upgrades you've completed to the house over the years. No form to fill out. Just email me with your address. List the upgrades in the last 5 years and I'll respond the same day. Use this link to email: melder@kwottawa.ca for your free home appraisal.

Mortgage Options to Consider Ouch!

2011-02-22T07:14:00.000-08:00

Current Mortgage Interest Rates Ottawa Feb 22, 2011

Term Bank Rates Attractive Rates

1 YEAR 3.50% 2.64%

2 YEARS 3.75% 3.29%

3 YEARS 4.35% 3.59%

4 YEARS 5.14% 3.84%

5 YEARS 5.44% 3.94%

7 YEARS 6.34% 4.94%

10 YEARS 6.65% 5.15%

Let me comment on the two highlighted rates; the one year and the ten year rate. It's a long time ten years and you notice the rate of interest doubles over that period. You will have paid more than twice the interest over the longer term if you choose the longer term.

The monthly payments don't appear to differ that much; one year $948. per month as opposed to the ten year monthly payment $1065. that's about $100 dollars difference. So? You say; I can afford to pay more for peace of mind! Like," I don't want to loose my house if I run into difficulty or the rates skyrocket !" I understand your concern... and think about this...

So at the end of two years you'd have paid $4,803. interest and after the same period of time you'd pay $9,416. with the ten year rate. If $5000 is a lot of interest money then $10,000 is really a lot more money to have paid when it doesn't buy much except a feeling of security and a great account balance for the lending institution. This is after two years only. Condider after eight more years the potential interest differencial could be astounding! Would it not be smart in the begining to pay double the monthly payment at the lowest rate so you pay off the principal sooner?

Ok, I know you say there'll be changes in the rates every year and they will be going up so my simplistic comparison is inaccurate. You're right, and if you always choose the lowest rate and after ten years you still choose the lowest rate then you'll have paid off more principal owing and be better off financially. That's the way I see mortgage decisions!

Some people may have personal circumstances. When it comes time to renew your mortgage call me. Let's talk...

Current Mortgage Rates

2011-02-14T21:20:00.000-08:00

Current Mortgage Rates Available Ottawa Feb 15, 2011

Terms                  Bank Rates   Rates I like

      1 YEAR              3.50%             2.64%
      2 YEARS            3.75%             3.29%
      3 YEARS             4.35%             3.39%
      4 YEARS            5.14%             3.84%
      5 YEARS             5.44%             3.94%
      7 YEARS             6.34%              4.94%
    10 YEARS             6.65%              5.15%

The one year discounted rate is the most attractive interest rate for some people. Bear in mind that these rates are for closed mortgages meaning that they can not be paid off early unless an interest penalty is paid. If you expect to sell your house in several months consider an open mortgage that can be paid off at any time. Bridge financing is an interim loan based on the value of your present or future home and helps to bridge a house sale and purchase that do not land on the same date. Call for a confidential review of your mortgage needs.

Ottawa West Changing Market Conditions

2011-02-07T19:46:00.000-08:00

http://www.martinelder.ca/

"I'm down on the shore of Westboro Beach and snow is falling gently."

You can see the open water in the distance. There are signs of spring in the river.
The Ottawa west real estate market is also awakening and alive. Of the 46 listings since new year, there are 26 homes for sale now in .
There have been 15 sales with 5 conditional sales this year.
The average price of homes for sale but not yet sold is $718,500.
The average price of homes sold is $526,500.
Many of the new homes listed are newer or are just being built.

Considering a Career in Real Estate Sales ?

2011-01-18T21:21:00.000-08:00

This is for you! If you are considering a career in Real estate sales. Real estate agents are independent sales people who run their own businesses governed by the Law of the Business Broker Act of 2002.

To become a licensed salesperson a series of three courses are taken and then there is an articling period of two years during which they work with a brokerage and take an additional three courses. The six courses cost about $600 dollars each so the total start up expense with be about $1800 plus $1800 = $3,600 There are ongoing courses based on a two year cycle after probation ends. The courses are recorded and credits are earned. Each credit costs about $30 and 18 credits are needed before the cycle repeats.

There is no leniency for forgetting. Licensed salespersons are responsible for maintaining their good standing or their license is terminated. During the time a new licensee begins working with a company there is the expectation of guidance and continuing instruction from the brokerage with the practical part of working with buyers and sellers, signing representation contracts and closing sales transactions. There is certainly a lot to learn in a short time frame!

There are ongoing expenses of licensing fees, insurance and membership fees for the Ottawa Real Estate Board, the Ontario Real Estate Association and the Canadian Real Estate Association. There are also fees frequently called desk fees and they are paid to the Brokerage for training and telecommunications and additional resources. I'm suggesting these ongoing expenses would be about $300 per month. There are also commission splits to the company and they would occur when sales finalize.

Generally speaking, beginning licensees will be offered commission splits of 50/50 60/40 and 70/30. It is important not to put too much emphasis on the commission split arrangement. Consider the complete package of services offered by the company; the history, the education available the company culture and the ethics of the company will over time to be more important for the beginning Salesperson.

The size of the company will also be an important factor. It might be thought that a smaller company with under 40 salespersons would be desirable. Yes! On the other hand a larger company should be able to afford more services and attract more accomplished professionals who in turn act as models of successful business practice for new licensees.

A licensed salesperson is a semi professional career that is knowledge and experience based but it's continually powered through meeting and networking with people. It is a very exciting and dynamic profession. Emotions run high and tragedy is frequently a heartbeat away. I would suggest that the real estate business is risky because there is no promise of pay or compensation after months of work, however where risk is high, pay is proportionately high. The real estate business is not for all personality types. It is very much a disciplined, go getter type of activity.

On the positive side there are a lot of wonderful people to meet and help. I like the thrill of finding a house and seeing the happiness shine in people's eyes. I also like a good fight, to negotiate and win for the people I represent. Doing the right thing, and allowing all sides to win at some level is very satisfying. I love architecture and community dynamics. Successful licensees have something personal they bring with them from previous businesses, careers, or hobbies that enhance the selling process.

Currently there are about 2600 licensed sales persons in Ottawa. They sold about 11,000 homes last year or about 4 homes each. The average price of homes fluctuate per month however if the average home was about $340K it would generate a commission of $8,500. The average licensee would then earn about $32,000 with the four sales. Generally speaking the "break even" point is selling six homes. This means generating $50,000 in commissions will pay expenses after which there is income to live on. This simplistic formula is not a true picture of the industry but it provides a guideline. A better expectation of sales activity would be where an agent makes one sale per month and earns $102,000. per year. High producing licensees will sell two homes a month or 40 homes and earn about $300,000 per year. A person selling 40 homes a year would be doing very well depending of course on the value of the home sold. licensees selling higher priced homes earn substantially more per sale than they would selling lower priced homes.

There is simply a maximum number of transactions a person can manage before hiring a personal assistant becomes a necessity. Most never reach this level of success and choose different careers after two years. Finally there are real estate teams with even higher sales units. One hundred sales a year would generate sales amounting to $700,000 or more. The highest producing real estate teams in Ottawa sold upwards of 300 homes last year and they consist of up to 12 licensees and several non-licensed staff.

This may all look very exciting, yet there are very real costs to building a business and maintaining it through out a year where heavy borrowing may be required to pay expenses such as Revenue Canada, GST, advertising, promotions, fees, vehicle expenses, and technical expenses at times when little revenue is generated especially at the beginning of the year. Can you imagine haveing to pay your icome taxes at the end of March when you have'nt even made one sale during that period! The high cost of running a real estate business means that in a start up situation an additional salary is very welcome to lean on while the business grows.

The splitting of commission with a brokerage varies among companies. It usually has a cap of about $20,000 after which 100% goes to the agent. One company has instituted profit share program where 48% of monthly profit is returned to agent for life. This is an attractive program as there is no support, retirement or pension fund when an agent decides to stop working, is injured or shifts to another line of work. After a successful career, it is very difficult to sell a personal real estate business unlike other businesses.

The average age of a licensee in Ottawa is surprisingly 56 years old, however the largest number of sales are generated by a younger group aged about 34 years. Young licensees in their 20 are also successful. The most important factor in success is networking with family, friends and existing relationships and asking them to support you with referrals or introductions. Ask them the following question: Who do you know who is interested in buying or selling a house in Ottawa this year. Follow up with all your contacts regularily. Soon, relationships will strengthen and you will find yourself on course for an exciting career in Real estate sales.

Any thoughts ..... ?????

Content written by Martin Elder. Trademarks owned or controlled by The Canadian Real Eastate Association. Used under licence.

Benifits of Short Term vs Long term mortgages

2010-12-24T12:57:00.000-08:00

Westboro Home for sale 499 Highcroft - $569,900.

5 bed 4 bath and with a direct entry garage

walk to the Westboro village shops and services

Current as of Tuesday Dec 22, 2010

                    Bank Rate           Rates I like

Closed                 3%                    2.25%

1 Year Closed    4.30%               2.35%
2 Year Closed    3.85%              3.00%
3 Year Closed    4.15%               3.19%
4 Year Closed    4.94%               3.49%
5 Year Closed    5.19%               3.74%
7 Year Closed   6.30%               4.45%
10 Year Closed 6.75%               4.99%

Mortgage Rates in Ottawa :
Buying a house envolves a long period of borrowing to pay it off. Here are some thoughts on how to borrow and not get burned.
A number of people choose a long term mortgage of 3 to 5 years because they want something stable that matches their salary pay date and ability to afford. They reflect, now that they have a house they want peace. This strategy may be fine for the first few years but think what might happen if you had a change of plans. Let's say you need to sell the house; job transfer, marriage break up, ouch! need a bigger home for the growing family, yes, the mortgage rates rise of you loose an income source or you receive an inheritance, what then?

Banks will try to adapt to your new direction. They will carry the mortgage to a new home. That's called porting a mortgage from the existing home to the new one. If there is a pay out before the anniversary they will charge a penalty of unpaid interest due to them. This amount could be as much as 6 months of interest and fees. Can you imagine having to pay $5,000 interest to settle up the mortgage agreement? This scenario would occur when you want to sell your house and you're not buying another one. The bank could also carry the mortgage to a new purchase where you need more money. Then they will blend the different interest rates into one new rate on the balance. Ask how they have arranged the blending and ask if there are additional fees tacked into the blended rate! Don't be surprised!

I like to be on a personal rapport level with my bank representative. So meeting with them more frequently a week before the mortgage renewal date is a good thing. I like to review my net worth profile and ask if there is any words of wisdom they might have that I can pass on to my valued clients. A short term mortgage may be a good thing.

Call now for an opinion on your situation. It pays to ask questions and then make up your own mind.

Popular Condos in Ottawa

2010-11-21T20:10:00.000-08:00

There are a number of condos built in the 1970s to 1985 period that are excellent value compared to newly built condominiums. They are high rise properties located in pockets along the east west corridor of Ottawa; Richmond Road, Carling Ave, Parkdale Ave, Baseline Road, St. Laurent Blvd and Rideau Streets .

These early units can be characterized as rental buildings which were later converted to condo ownership. They have grand entries and wide halls. There is underground parking and open landscaped areas around the building. Frequently the laundry is on every other floor or is located in the basement. Balconies are deep and spacious. These condos have rooms for wood working, libraries, and social gathering areas. The buildings often feature an indoor pool, guest room suites and bicycle rooms are growing in popularity. There are active social environments in these buildings because the layout promotes interaction between owners.

The price for a two bed two bath condo with a balcony ranges from $220,000 to $260,000 and condo fees are from $360 to $530 a month for heat hydro, A/C , water and management fees. Most of these condos are located in low density residential areas. A walk to the grocery store or coffee shop is possible. Bus transportation routes service these condos. Many are located close to the Ottawa River so park land is a walk away to forests quiet water settings where ducks and turtles are found.

Northwest One, Halcyon, Marina Bay, The Barclay are some popular condos in this group. The Poulin of Northwest One is pictured on the left below and the Barclay is to the right.

Another Episode of Watch Your Money!

2010-11-17T20:27:00.000-08:00

Fraud Watch: Count Your Money Episode 2

This just in. It's a true story about one of my clients who's Ottawa home I recently sold. People in the habit of receiving cash directly for the bank teller take note; Count your money!

Here's the scenario. Senior gentleman regularly visits the bank just before 10 am to receive $400 cash from the teller. He likes to exchange a word with the young teller. He likes the attention. She smiles and counts out the cash, compiles it, and with a tap she passes the withdrawal to the client. She smiles, makes eye contact. She wishes him a good afternoon. She knows he is in the habit of placing the money directly into his wallet without counting. He smiles and leaves the bank.

This scene repeats itself week after week and the senior is happy to wait for his favourite teller to serve him, in fact he knows her work schedule so that he can make his withdrawals on her shift. He loves to see her friendly smile. It makes his day!

Yesterday, the senior receives a call from the bank manager asking him to come into the branch office for a special meeting. The manager sits across from his big desk and tells the senior gentleman that a teller has been flagged. She has been shorting changing customers. The manager calculates $1,400 is owing!

Incredulous, the senior refuses to accept that he has been defrauded of any money. He's concerned his favourite teller will be dismissed or worse yet, face a jail term. Only after the manager describes in detail each occurrence with dates and amounts withheld does the gentleman begin to accept the deceit. It's all on video says the manager. This incident has been kept within house by the manager so that it doesn't go public and draw attention to the bank name, at least so far. Corporate image to protect, know what I mean?

The bank manager offers the senior a cheque for $1,400 to cover his shortfall. Makes you think differently about the automatic bank teller. I thought they were more likely to miss a twenty here and there. In fact the automatic tellers have an accuracy of 99.9 % and they deliver 24 - 7. But, the smile is missing!

So why then do I count the bills I get from the automatic teller and not those I receiver from the human teller? Watch the video and watch your money!

Save Your Money!

2010-11-16T08:28:00.000-08:00

Terms            Bank Rates          Our Rates

1 YEAR           3.20%                  2.44%
2 YEARS         3.45%                  2.69%
3 YEARS         4.00%                  2.90%
4 YEARS         4.94%                  3.44%
5 YEARS         5.19%                  3.49%
7 YEARS         6.09%                  4.75%
10 YEARS       6.40%                  5.15%

Current mortgage interest rates have settled down to a prolonged, low, factor that allows buyers to borrow substantial amounts of capital to purchase good homes. I say prolonged and predictable because over the last ten years rates have become more and more affordable. The origin of our low interest rates began with a world recession that started about 15 years ago. It appears that with the world economy still very sensitive to the US financial crisis of 2008 interest rates will remain low for the next 5 years because inflation rates are extremely low. Governments fear the chaos that inflationary prices have on political security and when inflation begins to rise they use an effective tool to keep inflation in check. They raise the prime borrowing rate charged to banks who in turn pass the interest rate hikes to the consumer. When borrowing become more expensive, consumer spending and speculation slows down too. Inflation is kept in check.

So the interest rate chart above shows a spread of less than two points between the one year and the ten year rate. This is called the interest rate spread. This means that you can borrow today at 2.44 % for one year but maybe because of fear there will be increases in the future you decide to pay a little extra to lock in at 5.15 %. What the heck, you can afford the small amount more and its worth the peace of mind. Right? This sounds fine now but who is to say that interest rates will skyrocket in the near future? It doesn't seem logical that rates will explode upward when the spread is this flat. And what is the spread? Less than 3%! or, $146. more per monthly payment. Well, here's what banks won't tell you. Why not add the amount to your monthly payment in the begining. That way you save!

So what if rates go up? That will eventually happen but probably slowly and with lots of tell tale signs. What can you do if you have chosen the short term, least expensive rate? Consider these five points:

Your ability to pay off a mortgage increases over time.
You may have a pay raise.
Your principal amount borrowed will decrease year after year through your blended payments.
Say you invest your RRSP return in your mortgage principal taking off $10,000 per year; very smart by the way!
The net effect of these actions mitigates against choosing the more expensive long term interest rate because the amount you borrow decreases so that if and when the rates go up you pay the higher rate on the lower amount. So Save Your Money!

Choose a shorter amortization instead of a long term interest rate. For example choose 23 years instead of 25 years. Invest the spread in your amortization. This will increase your payments but pay off the principal and interest sooner saving you money. When the year is up go for another year's term and you will always benefit from the lowest interest rate available. The cumulative effect is you pay less and create wealth for yourself instead of the shush, b a n k. If for some reason you need to revert to the original amortization period you can renegotiate with the bank at the end of the year.

You have lots of bargaining power because the banks wants to keep steady customers. If for some reason you need to move or sell your house you will have more freedom because the interest term is shorter. How convenient when you want flexibility and affordability.
My strategy is buy as much house as you can and then stretch some more. You'll grow into the house in five years! Interest rates have not been this low in 30 years.

Comment on this post or send an email. I'll offer my opinion if you'd like to talk about your approaching mortgage renewal.