Why the Toronto Real Estate Market Cooling Down is Normal

Buying a home in Toronto has been nothing but challenging these past years, but as the housing market begins to cool down, there is more hope that buyers may have chance of purchasing their dream homes soon.

Turning of the Tides?

The TREB shared that some home owners have cashed out their equity after hearing about the provincial housing policy in April and the increase in supply of resale homes in May due to the first quarter’s strong prices.

Sellers that listed their homes in spring are seeing lower and fewer offers from would-be-buyers. In fact, home prices in Toronto dipped 7% in May compared to April although it is still 15% higher than May of last year’s average home price.

Toronto Real Estate Board director of market analysis Jason Mercer shared that a month-to-month decline did happen although the market soared. The details were released in the end of May statistics by TREB.

The May cool down occurred with a 43% hike in active listings but Mercer was quoted that this is not an indication that the housing bubble will burst. He added that for that to happen, a dramatic economic change has to take place. Examples of such would be a real increase in lending rates or a significant change in regional employment.

Toronto Housing Competition Still Fierce?

Mercer further shared that there is still enough buyer competition to keep pushing home prices up – if the average price growth of about 15% and less than 2 months of housing inventory is to be looked upon. He also said that buyers are simply taking a step back this month to see how the new government policies and foreign buyers’ tax will affect the market,

A housing commentary from RBC Economics Research stated that buyers and sellers are locking horns because we’ve entered a period of price expectations adjustment. This will predict whether a buyer’s market will be coming in the months ahead.

One realtor said that buyers should not expect to chance upon a steal in the near future but that they can expect to have more choices and more negotiating power.

Owner of Spring Realty Ara Mamourian shared that a lot of buyers are misunderstanding available data and thinking that there is a crash where there is none. There is no huge buying opportunity but rather an increased opportunity to buy with less competition, not an absence of it and certainly no huge discounts coming soon. He added that for safe measure, sellers must make sure that their realtors have sold their old home first before buying their next home, taking a 180 degrees turn from the first quarter’s real estate advice.

Desmond Brown of Royal LePage said that the current market is not a new normal, rather only a return of the old normal. He also shared that he is welcoming this market change because this will allow people to move to a bigger home if they need to without having to jump hoops because they can’t afford to.

Thinking of taking advantage of the changes in the Toronto real estate market to purchase a home soon? Contact us at Mortgage Central Nationwide to find out how we can help.

Planning to Turn Your Basement into an Apartment or Income Suite? Read This!

Plenty of people are converting their basements into an apartment or income suite to be a source of extra income to help pay for mortgage and many other things. Other people simply have too much space and don’t want to waste an income opportunity. However, before you pool your resources and start construction or renovation, keep in mind that there are so many things to consider before transforming your basement into a basement apartment.

Questions You Must Ask Yourself

  • Do you really need to do this?
  • Do you know where to get funds to push through with this project?
  • Will converting your basement into an apartment be legal?
  • Will your plan for the basement apartment comply with the retrofit guidelines from the fire code?

If the answers to the questions above are all favourable, then you are on your way to having a basement apartment that can increase the overall value of your home and give you extra income. Note that doing anything illegal such as failing to comply with local fire codes and zoning laws mean that you will have to pay thousands of dollars in fine once reported to authorities such as your Town’s Building or Fire Department.

Things to Check

In the event that you will be buying a home with basement apartment that needs fixing, keep in mind that just because it is there does not necessarily mean that it is legal. You will have to check with your local Fire Department or with the city municipal standards department to find out if your baseline apartment is registered as a second unit. If this isn’t the case, then you will have to research how to secure a permit for it to be legal and comply with the fire code.

Also note that your area may or may not permit the building or conversion of a basement apartment. An example would be that basement apartments that were rented out prior to the 31st of October 1995 are considered legal although the local zoning code does not permit it.

Toronto Basement Apartment Considerations

In 2000, the City of Toronto has permitted having second suites on all semi-detached and detached homes in the city as long as they meet the following conditions:

  • The house and any additions should be at minimum 5 years old
  • The second suite must have its own bathroom and kitchen, a self-contained unit
  • The second suite cannot have a floor area that is larger than the rest of the house
  • The home with the second suite on most cases, must have a minimum of two parking spaces
  • Existing second suites should comply with the property standards, zoning standards and Fire Code in Ontario

All homes that do not meet the above must apply to the City for permission and note that other areas such as Vaughan, Mississauga, and Brampton, still do not permit second suites unless built or rented prior to November 1, 1995.

The four basic requirements of the Fire Code must also be upheld as well. They are as follows:

  • The main home and the second suite must have adequate fire separation
  • The basement apartment must have its own separate fire exit
  • Smoke alarms must be installed
  • The Electrical Safety Authority must conduct an electrical inspection to ensure that all occupants of the home and basement apartment will have access to sufficient electricity

More technicalities have to be observed but the above are the main requirements.

Should you still wish to build a basement apartment and need extra cash to fund such a renovation, or need some funds to ensure an existing suite is made legally compliant, a second mortgage or a home equity loan would surely help. Contact us to know more!

Everything You Need for Mortgage Refinancing Checklist

So we’ve talked about mortgage refinancing, but here we’re going to go over a quick checklist you’ll need when you come speak with one of our Toronto mortgage brokers. If there are any special documents you need aside from these we’ll let you know – but this list will about cover it. While a few things won’t apply to you, it’s important to read over the whole list! Don’t skip it! Read it right now! Before it’s gone forever – well no not really, but you get the point.

  • Photo or Picture ID – You need a way of proving that you are you. It’s better that the bank is paranoid about proving that you’re you and not some identity thief intent on stealing all of your equity with you none of the wiser. Passports, driver’s licenses, ID cards, anything generally issued by the government will help you establish your identity to a prospective lender.
  • Proof of Income – What do you do for a living? Self employed? Using your business to prove that you’ve got some kind of income rolling in? Paystubs? All of these things will help show that you have an income to pay your mortgage.
  • Bank Statements (Private and Business) – You’ll need bank statements for the last 3 to 6 months (farther back the better) to show that you have money in your account.
  • Divorce or Marriage Documents – Are you receiving alimony, child support from a divorce? You’ll need to bring in your divorce decree. Have you married since your mortgage started and you need to show that you have another income in your household that you want considered as your own? Bring your marriage documents with you.
  • Mortgage Documents – The loan origination document is VERY handy to have. You’ll also want to bring in statements (the most recent is best) from the current mortgage lender to show that you’re current with your payments. Don’t leave home without these if you have them, especially the most recent statement.
  • Tax Forms for 2 Years Prior – Showing proof of your income with your taxes is the best way to go about it. If you want your business income to be considered also bring tax returns for your business too.
  • Utility Bill – Most lenders are going to want proof that THIS is your home. A utility bill usually suffices to prove that this isn’t another mortgage refinancing on a rental property.

There are other things you might need to bring – but you’ll find these out when you schedule an appointment with one of our Canada mortgage brokers. Remember that each lender will be different and their criteria can range widely! Some won’t care if you’re refinancing a rental property or that you don’t have a utility bill. Others won’t care if you bring in information to prove that you and your partner live together. It all ranges wildly from one lender to the next, but when you work with us you’ll find out what you need to know.

Learn more about our great rates for mortgage refinancing here!

Open Up the Tap on Your Equity with a Home Equity Loan

You’ve been making timely payments all these years, isn’t it time your home started to give a little back? With the right mortgage broker (us!) and a home equity loan you can get all the money you need to consolidate your debts, send your kids to university or even start a business. With any kind of equity loan the devil is in the details and you don’t want to try and negotiate this one your own. Let’s explore how they work and why you would want one.

What is Equity?

If you don’t know, equity is how much you have invested in your home. If your mortgage(s) are completely paid off you have 100% equity. If you’re still paying off half your house you have 50% equity. You can figure out how much equity you have in your home by subtracting the remaining debt from the most recently appraised value of the home. This way you’ll be able to know exactly how much of a home equity loan you can take out.

Don’t Take Out a Large Home Equity Loan

Just because you’re approved for a big amount doesn’t mean you should actually borrow that much! You’ll want to work with one of our Toronto mortgage brokers; we understand the market, the tricks lenders pull and we’ll work hard to help you get the best equity loan possible. Every situation is different, don’t take a cookie cutter mortgage that just isn’t in your best interest. Also be careful about what the terms are before you sign on that dotted line.

Plan Ahead

When it comes to home equity loans you need to have a plan for the future. Why are you borrowing this money? Will you get some kind of return on it? Are you going to be able to pay it back? How much will you need to pay each month to pay back your home equity loan? If you don’t know the answers to these questions one of our Canada mortgage brokers can help. We have a lot of experience when it comes to home equity loans and we’ll be able to show you how to get the right loan.

Your Equity is Important

Each time you make a mortgage payment you’re socking away money for the future – that future is now. Why should you get robbed of your equity because you didn’t know any better? We’ll work with you to help you understand your rights and obligations as a borrower and to really understand what you’re signing. From finding the right mortgage lender to signing we’ll be there with you for every step of the way.

You’ve worked hard for your home and you shouldn’t have to lose it. Working with us as your Toronto mortgage broker will help you not only get the money you need now but keep your home in your future for years to come. Don’t get a bad deal, get the right deal!

Discover our home equity loans today!