The Real Deal about Transfers and Switches

General Mitchell Goode 13 Sep

Most people who are thinking about a transfer or switch want to take advantage of a lower interest rate or to get a new mortgage product with terms that better suits their needs.

Up for Renewal?

If your mortgage is approaching renewal and you are considering a transfer or switch – great news! You won’t be charged a penalty. BUT you are still required to qualify at the current qualifying rate and need to consider potential costs around legal charges, appraisal fees and penalty fees (if applicable). In some cases, the lender will offer you the option to include these fees in your mortgage or even cover the costs for you.

Currently have a Collateral Charge Mortgage?

If you have a collateral charge mortgage (which secures your loan against collateral such as the property), these loans cannot be switched; they can only be registered or discharged. This means you would need to discharge the mortgage from your current lender (and pay any fees associated) before registering it with a new lender (and pay any fees associated).

Still locked into your Mortgage?

If you’re considering a transfer or switch in the middle of your mortgage term, you will likely incur a penalty for breaking that mortgage. Typically, transfers and switches are done to take advantage of a lower interest rate (and lower monthly payments), but you want to be confident that the penalty doesn’t outweigh the potential savings before moving ahead.

Things to consider for a transfer or switch:

  1. You may be required to pay fees associated with the transfer or switch, including possible admin and legal fees.
  2. You will need to requalify under the qualifying rate to show that you can carry the mortgage with the new lender.
  3. You will be required to submit documents that may include, but are not limited to, the following (depending on the lender):
  • Application and credit bureau
  • Verification of income and employment
  • Renewal or annual statement indicating mortgage number
  • Pre-Authorized Payment form accompanied by VOID cheque
  • Signed commitment
  • Confirmation of fire insurance is required
  • If LTV is above 80%, confirmation of valid CMHC, Sagen or Canada Guaranty insurance is required
  • Appraisal
  • Payout authorization form
  • Property tax bill

If your mortgage is currently up for renewal, consider reaching out to your DLC Mortgage Expert. Not only can they advise you of any penalties or fees that may be associated with your desired transfer or switch, but they also have the knowledge and ability to shop the market for you to find the best options to meet your needs. This extensive network of lender options allows brokers to ensure that you are not only getting the sharpest rate, but that the mortgage product and terms are suitable for you now – and in the future.

 

Article From:https://dominionlending.ca/mortgage-tips/the-real-deal-about-transfers-and-switches

 

Bank of Canada hiked overnight rate by 75 bps to 3.25% with more to come

General Mitchell Goode 9 Sep

The Bank of Canada Hiked Rates Again And Isn’t Finished Yet
The Governing Council of the Bank of Canada raised its target for the overnight policy rate by 75 basis points today to 3.25% and signalled that the policy rate would rise further. The Bank is also continuing its policy of quantitative tightening (QT), reducing its holdings of Government of Canada bonds, which puts additional upward pressure on longer-term interest rates.

While some Bay Street analysts believed this would be the last tightening move this cycle, the central bank’s press release has dissuaded them of this notion. There has been a misconception regarding the so-called neutral range for the overnight policy rate. With inflation at 2%, the Bank of Canada economists estimated some time ago that the neutral range for the policy rate was 2%-to-3%, leading some to believe that the Bank would only need to raise their policy target to just above 3%. However, the neutral range is considerably higher, with overall inflation at 7.6% and core inflation measures rising to 5.0%-to-5.5%. In other words, 3.25% is no longer sufficiently restrictive to temper domestic demand to levels consistent with the 2% inflation target.

As the Bank points out in today’s statement, though Q2 GDP growth in Canada was slower than expected at 3.3%, domestic demand indicators were robust – “consumption grew by about 9.5%, and business investment was up by close to 12%. With higher mortgage rates, the housing market is pulling back as anticipated, following unsustainable growth during the pandemic.”

Wage rates continue to rise, and labour markets are exceptionally tight, with job vacancies at record levels. We will know more on the labour front with the release of the August jobs report this Friday. But the Bank is concerned that rising inflation expectations risk embedding wage and price gains. To forestall this, the policy interest rate will need to rise further.

Traders are now betting that another 50-bps rate hike is likely when the Governing Council meets again on October 25th. There is another meeting this year on December 6th. I expect the policy rate to end the year at 4%.
Bottom Line

The implications of today’s Bank of Canada action are considerable for the housing market. The prime rate will now quickly rise to 5.45%, increasing the variable mortgage interest rate another 75 bps, which will likely take the qualifying rate to roughly 7%.

Fixed mortgage rates, tied to the 5-year government of Canada bond yield, will also rise, but not nearly as much. The 5-year yield has reversed some of its immediate post-announcement spike and remains at about 3.27% (see charts below). Expectations of an economic slowdown have muted the impact of higher short-term interest rates on longer-term bond yields. This inversion of the yield curve is consistent with the expectation of a mild recession next year. It is noteworthy that the Bank omitted the usual comment on a soft landing in the economy in today’s press release. Bank economists realize that the price paid for inflation control might well be at least a mild recession.

Another implication of today’s policy rate hike is the prospect of fixed-payment variable-rate mortgages taken at the meagre yields of 2021 and 2022, hitting their trigger rate. There is a good deal of uncertainty around how many these will be, as the terms vary from loan to loan, but it is another factor that will overhang the economy in the next year.

We maintain the view that the economy will slow considerably in the second half of this year and through much of 2023. The Bank of Canada will hold the target policy rate at its ultimate high point– at least one or two hikes away– through much of 2023, if not beyond. A return to 2% inflation will not occur until at least 2024, and (as Governor Macklem says) the Bank’s job is not finished until then.

 

Article From: https://dominionlending.ca/economic-insights/bank-of-canada-hiked-overnight-rate-by-75-bps-to-3-25-with-more-to-come

 

 

Advice for Single Homebuyers

General Mitchell Goode 30 Aug

Buying a home is an exciting experience for anyone, and even more of a milestone when you’re doing it solo, but it can be a little different when you’re purchasing on your own. While it can be easier to tailor your mortgage and home search to exactly your needs, it can be somewhat more stressful handling the purchase of a home on your own… fortunately, that’s where a Dominion Lending Centres mortgage expert can help! They assist with your mortgage application, pre-approvals and final financing to make the entire mortgage process much smoother.

In addition to using a mortgage expert and having a trusted realtor, here are some other tips that can help improve your homebuying experience:

1. Be Aware of Your Financial History

Understanding your credit score and your financial history can help to improve your qualification potential. If your credit score is a little lower than it should be, or lower than you’d like for what you are trying to qualify for, you can take steps to improve this prior to seeking a mortgage and get better results.

2. Ramp Up Your Savings

Of course, while a mortgage will cover a large chunk of your home purchase, you are also required to have a down payment. In addition, you need to consider closing costs (1.5-4%) of the purchase price, as well as ongoing maintenance and costs for your new home (repairs, utilities, property taxes). It is important to determine your budget so you are aware of what you can afford monthly.  BUT before you shop is also a great time to start ramping up your savings account so you can put more down and potentially reduce the overall mortgage.

3. Study The Marketplace

One of the most important aspects of homeownership is understanding what you can afford and where you want to live. These two key components can help you to determine your budget and the areas that you should be looking for a home, as well as what type of home size, amenities, etc. Understanding what is available can provide you with more information and help you fine-tune your shopping list.

4. Be Flexible When Possible and Firm When Not

While shopping for a home on your own can be much easier as you’re only concerned about your own needs, it is still important to be flexible. While it is easier to find a home that fits just ‘you’, keeping your options open can also have its benefits. Of course, if there are things you cannot live without or a location you really need to be in, it’s important to be firm about those things as well. Creating a list of wants and needs can help you determine where there is room to be flexible, and where there isn’t.

5. Consider Your Present and Future Needs

While you’re shopping for your new home for you today, you will also want to consider what your life might look like in the future. What are you doing 5 years from now? 10 years? Do you want to start a family or have children? Do you plan on changing jobs or perhaps requiring a move in a few years? All these things are important to be aware of so you can make the best choice for you today, but also ensure that you are considering your future needs.

6. Protect Yourself

Lastly, while you might not be purchasing your current home with a partner, it is important to leave room for this in the future to ensure that you and your home are protected. If you have another individual move into your home down the line, you could become common-law and that could cause complications. Having an honest conversation about expectations and responsibilities can help, as well as writing up a document for both parties to sign, indicating these responsibilities as well as outlining the investment made by the original owner and new partner.

If you are a single homeowner looking to make a purchase, but are not sure where to start, don’t hesitate to reach out to a Dominion Lending Centres mortgage expert. As an expert in mortgages, they have experience in all types of situations and purchases and the knowledge to walk you through the process and ensure you get the best home and mortgage for YOU.

 

Article From:https://dominionlending.ca/life-style/advice-for-single-homebuyers

 

3 Advantages of a Pre-Approval

General Mitchell Goode 25 Aug

While getting pre-qualified can give you a ballpark estimate on what you can afford, getting pre-approved is where the real magic happens.

Mortgage pre-approval means that a lender has stated (in writing) that you do qualify for a mortgage and what amount, based on submitted documentation of your current income and credit history.

A pre-approval usually specifies a term, interest rate and mortgage amount and is typically valid for a brief period of time, assuming various conditions are met.

There are three benefits to pre-approval including:

1. It confirms the maximum amount you can afford to spend

Not only does getting pre-approved make the search easier for you, but helps your real estate agent find the best home in your price range. Temptation will always be to start looking at the very top of your budget, but it is important to remember that there will be fees, such as mandatory closing costs, which can range from 1 to 4% of the purchase price. Factoring these into your maximum budget can help you narrow down a home that is entirely affordable and ensure future financial stability and security.

2. It can secure you an interest rate for 90-120 days while you shop for your new home

Getting pre-approved doesn’t commit you to a single lender, but it does guarantee the rate offered to you will be locked in from 90 to 120 days which helps if interest rates rise while you are still shopping. If interest rates actually decrease, you would still be offered the lower rate. Another benefit to pre-approval is that, when it comes time to purchase, pre-approval lets the seller know that securing financing should not be an issue. This is extremely beneficial in competitive markets where lots of offers may be coming in.

3. It lets the seller know that securing financing should not be an issue

Lastly, pre-approval lets the seller know that you are able to make the purchase. This can be very helpful in competitive markets where lots of offers may be coming in, as it helps to inform the seller that you’re a sure thing versus other potential bidders who may not have pre-approval.

Keep in mind, once you get your pre-approval, you will want to make sure not to jeopardize it. Until your mortgage application and sale is completed, be sure you don’t quit or change jobs, buy a new car or trade up, transfer large sums of money between bank accounts, leave your bills unpaid or open up new credit cards. You do not want your financial or employment details to change at all until you have closed on the new mortgage.

If you have any questions or want to get your pre-approval started today, don’t hesitate to reach out to a Dominion Lending Centres mortgage professional!

 

Article From: https://dominionlending.ca/mortgage-tips/3-advantages-of-a-pre-approval

 

Construction and Pre-Construction Mortgages

General Mitchell Goode 23 Aug

Construction and Pre-Construction Mortgages.

Building or renovating your own home is such an exciting time and allows you to create something tailored to you and your family!  But when it comes to construction mortgages, there are a few different types of loans: new construction and even pre-construction.  Let’s break it down so you can determine the best choices for you.

Construction Mortgage

Construction mortgages service both new builds and large home renovations. The purpose of a construction mortgage is to advance you the full funds for your mortgage in stages as outlined below.

These stages align with the construction process of your home (or through major renovations if you are doing an upgrade) and inspectors are required at each stage to confirm the current construction and allow for advancement of the next set of funds.

 

Draw Stage Required Completion Construction Stage  

% of Total Mortgage Advanced

 
1st Draw (Optional) 15% complete Excavation and foundation complete. You can also use this first draw to purchase land.  

15%

 
2nd Draw 40% complete Roof is on, the building is weather-protected (i.e. airtight, access secured)  

25%

 
3rd Draw 65% complete Plumbing and wiring is started, plaster/ drywall is complete, furnace installed, exterior wall cladding complete, etc.  

25%

 
4th Draw 85% complete Kitchen cupboards installed, bathroom completed, doors have been hung, etc.  

20%

 
5th Draw 100% complete Ready for occupancy with seasonal and exterior work completed  

15%

 

In addition to the difference in receiving funds from a construction mortgage versus a traditional mortgage, there are a few other key differences:

  1. Home construction loans are short-term agreements with generally one-year in length while mortgages have varying terms and range anywhere from 5 to 30 years in length.
  2. Most construction loans will not penalize you for early repayment of the balance, unlike traditional mortgages which can have pre-payment penalties if not part of your agreement.
  3. Monthly payments are interest-only until the end of construction.
  4. Construction loans only charge interest on the amount of the loan used during the construction. The borrower does not have to pay interest on any unused portions. Traditional mortgages require the borrower pays interest on the entire amount of the loan.
  5. Construction loans can provide upfront funds to purchase land for your build, while traditional mortgages typically do not service land-only purchases.
  6. Any remaining costs of construction can be paid down by acquiring a mortgage on the home once it’s completed.

Note: If you are choosing to do a self-build, you will need to prove that you have enough experience to properly handle the construction from start to finish.

Keep in mind that, similar to traditional mortgages, construction loans have varying rates and terms depending on the type of property you’re building, the amount of construction and length of the construction.

Pre-Construction Mortgage

Somewhat different from a construction mortgage is a “pre-construction” mortgage. These typically apply to condominiums, townhouses and other new builds. When it comes to pre-construction condo purchases, mortgage approval is required as this tells the developer that you have the ability to finalize on the unit later.

Typically, mortgage pre-approval is required within 30-90 days of purchase but you can get mortgages as early as 2-3 years from when the project is due to be completed. In these cases, you may not necessarily be able to get a rate guarantee due to the timeframe but it is worth asking for a commitment letter if you’re seeking a mortgage closer to the final build.

Similarly with traditional mortgages, your ability to get approval for a pre-construction mortgage is determined by your credit score, income-to-debt ratio and your employment history.

Closing happens once the building has been registered and when you receive the title to your unit. However, with a pre-construction mortgage, your payments will start with the builder occupancy fees from the time of occupancy to final closing, which can be a period of 3-6 months depending on the project.

If you are looking to purchase a new build or are interesting in building your own home or renovating your current one, please be sure to reach out to your Dominion Lending Centres mortgage expert and discuss your options to ensure you’re getting the best construction loan for your project.

 

Article From:https://dominionlending.ca/mortgage-tips/construction-and-pre-construction-mortgages

 

5 Reasons You Don’t Qualify for a Mortgage

General Mitchell Goode 16 Aug

When it comes to shopping for a mortgage, it is important to know what you need to qualify – but it is just as important to understand some of the reasons why you DON’T qualify so that you can make some changes and budget accordingly for when the time is right.

If you are in the market for a home, make sure you know the 5 major reasons you may not qualify for a mortgage:

1. Too Much Debt

One of the biggest reasons that individuals fail to qualify for a mortgage is that they are carrying too much debt already. This debt can be in the form of credit cards, lines of credit or other loans. Regardless of where the debt comes from, it all contributes to your Total Debt Servicing ratio (TDS), which is one of the qualifiers for a mortgage loan. The goal is for your monthly debt payments to NOT exceed 40% of your gross monthly income.

PRO TIP: Find ways to lessen your expenses, budget or consolidate debt where possible.

2. Credit History

Another indicator of not qualifying for a mortgage can be your credit history. It is always important to pull your credit score before you start house hunting so that you can understand what your credit rating is to help determine what you qualify for. Your credit score is a direct reflection of your potential risk and, if you have a poor credit history then it makes it harder to secure a mortgage loan.

PRO TIP: To improve your credit score, be sure to avoid late or missed payments, exceeding your credit card limit or applying for multiple new credit cards.

3. Insufficient Assets or Income

With rising housing prices and stagnant income levels, one roadblock for mortgage approval can be lacking sufficient income or assets to put against your loan. For some buyers, the only option is to save up more money for your down payment to reduce the overall mortgage or look at suite income or alternative lenders.

4. Not Enough Down Payment

Another reason you may not qualify for a mortgage could be that you do not have enough of a down payment. In Canada, a 20% down payment is required to avoid mortgage default insurance BUT you can still purchase a home with less than 20%; you simply need to account for the insurance premiums, which are calculated as a percentage of the loan and is based on the size of your down payment.

5. Inadequate Employment History

Lastly, employment history can have a big impact on mortgage approval. Most lenders prefer a 2-year consistent employment history. If you do not have an adequate employment history, have been at your job for a short time or do not have a record of long-term positions, you might find it harder to get a mortgage loan.

Whether you’re looking to get your first mortgage, are ready to move or are simply shopping around, understanding what can impact your mortgage application will help ensure you have greater success!

If you are struggling currently with your mortgage approval or have recently been denied – that’s okay! Don’t be deterred. With a little effort and patience, as well as the support of your trusted Dominion Lending Centres mortgage expert, you will be able to put yourself in a better position to reapply in the future!  If you’re ready, contact one of our experts today to discuss your options.

 

Article From:https://dominionlending.ca/mortgage-tips/5-reasons-you-dont-qualify-for-a-mortgage

 

Canadian Home Sales Slow Further in July

General Mitchell Goode 16 Aug

Housing Slowdown Continues in July
Statistics released today by the Canadian Real Estate Association (CREA) show that the slowdown that began in March in response to higher interest rates continued in July, albeit at a slower pace. Home sales recorded over Canadian MLS® Systems fell by 5.3% between June and July 2022. The pace of home sales last month was well below its 10-year moving average as buyers and sellers moved to the sidelines in response to rising mortgage rates and a reassessment of the outlook. While this was the fifth consecutive month-over-month decline in housing activity, it was also the smallest of the five.Sales were down in about three-quarters of all local markets, led by the Greater Toronto Area (GTA), Greater Vancouver, Fraser Valley, Calgary and Edmonton.

The actual (not seasonally adjusted) number of transactions in July 2022 came in 29.3% below that same month last year.

Housing market analysts at the Canadian banks continued to revise their home price forecasts over the next year. Royal Bank, TD, Desjardin and BMO all project that Canadian benchmark prices will fall roughly 20%-to-25% from their February peak by the end of 2023. Of course, this will vary from region to region. The hardest hit has been the geographies where prices surged the most, especially in the Greater Golden Horseshoe in Ontario and, to a lesser extent, in BC.

However, even if these forecasts prove to be correct, home prices in most regions will remain well above the levels posted before the pandemic began in early 2020. Housing in Canada’s largest cities will remain unaffordable for median-income households.
New Listings

The number of newly listed homes fell back by 5.3% month-over-month in July. The decline in new supply was broad-based, with listings decreasing in about three-quarters of local markets, including most significant markets.

With sales and new listings down by 5.3% in July, the sales-to-new listings ratio remained unchanged at 51.7% – slightly below the long-term average for the national sales-to-new listings ratio of 55.1%.

There were 3.4 months of inventory on a national basis at the end of July 2022, still historically low but up quite a bit from the all-time low of 1.7 months set at the beginning of 2022.
Home PricesThe Aggregate Composite MLS® Home Price Index (HPI) edged down 1.7% month-over-month in July 2022. This was similar but less than the 1.9% decline in June.

Regionally, most of the monthly declines in recent months have been in markets across Ontario and, to a lesser extent, in British Columbia.

Prices continue to be more or less flat across the Prairies while only now showing minor signs of dipping in Quebec. On the East Coast, prices continue to rise at a much slower pace. The exception is relatively more expensive Halifax-Dartmouth, where prices have dipped slightly.

The non-seasonally adjusted Aggregate Composite MLS® HPI was still up by 10.9% on a year-over-year basis in July. However, those year-over-year comparisons have been winding down quickly from the near-30% record year-over-year increases logged in January and February.
Bottom Line

The Bank of Canada raised the overnight policy rate by a percentage point on July 13, so the full effect of this jumbo hike will likely spill into the August data. Inflation fell a bit more than expected last month in the US. We expect to see a decline in Canadian CPI inflation in July, as well, when it is published tomorrow morning. Nevertheless, central banks will continue to tighten monetary policy further. CREA today said they expect an additional 100 bp hike in the remainder of this year, which would take the policy rate up to 3.5% by yearend. That would imply a prime rate of 5.7%.

In contrast, the five-year government of Canada bond yield is hovering just under 2.8%, reflective of the economic slowdown in Canada in the second half of this year. This could make fixed mortgage rates more attractive to future borrowers. Should the prime rate hit those levels, many fixed-payment variable rate borrowers that first booked their mortgages when prime touched 2.45%–it’s low posted since mid-March 2020– might be hearing from their lenders regarding potential trigger points. Will this temper Bank of Canada rate hikes?

Probably not. The Governing Council makes its next decision on September 7. Another 50-to-75 bps is baked in at this point.

 

Article From: https://dominionlending.ca/economic-insights/canadian-home-sales-slow-further-in-july

 

5 Ways to Renovate your Home to make it safer for Canadians 55+

General Mitchell Goode 5 Aug

While 86% of Canadian baby boomers prefer to age in place in the homes they love, not many plan for home renovations that simplify their lives during these golden years. It is not just about preparing for a disability or mobility issue. It is about including standard components and amenities that boost the accessibility and comfort of all ages and making your day-to-day living more pleasurable.

Here are some helpful home renovation ideas for Canadians 55 and over:

  1. Reposition electrical switches and outlets: Re-arrange your light switches at a height that does not require you to stretch your arms excessively above your shoulders. Try to keep electrical outlets high enough that you do not need to bend down to reach them.
  2. Make your life in the kitchen a breeze: Consider lowering the height of the countertops and cabinets to make the space more comfortable. Within the cabinetry, install shelves for ease of use and organization. Getting close enough to the prep spaces can add to your comfort while working in the kitchen.
  3. Plan for safer bathrooms: Replace one bathroom shower with a curb-less or walk-in model. Fold-down shower seats, elevated toilets, or grab bars are other home improvement opportunities for people requiring minimal investment and can make your bathroom safer as you age.
  4. Focus on flooring: One of the essential items on the home repairs checklists for Canadians 55+ should be fixing and updating your flooring to remove any height changes, dips, odd transitions, or curbs. Look into slip-resistant materials, such as textured tiles or gentle-on-the-feet cork flooring. If you prefer area rugs and carpets, try to have a non-slip rug pad underneath to prevent slips.
  5. Plan features that enable single-level living: Some carefully prepared home renovations for aging in place could allow single-level living even in a multi-level home. This includes:
  • Moving the laundry space to the main floor.
  • Remaking an existing guest room or unused dining room on the main floor into the primary bedroom.
  • If space permits, then extend the powder room into a 3-piece with a shower stall.

Other home renovations for aging in place that will make living at home a lot more comfortable are:

  • Extending the width of doorways
  • Installing ramps for entranceways
  • Adding stair lifts or home elevators
  • Maintaining threshold-free doorways
  • Switching to lever handles for your interior doors for a better grip while entering or leaving the rooms.

Even with grants or provincial loans, you may need extra money to renovate your home for your future needs. If you’re a homeowner aged 55-plus, the CHIP Reverse Mortgage® from HomeEquity Bank is a great option to provide you with the funds you need. You can borrow up to 55% of your home’s appraised value and never have to make any regular mortgage payments. When you move out or sell your home, you only pay what you owe.

Contact your DLC mortgage expert to find out how the CHIP Reverse Mortgage by HomeEquity Bank can be a viable option to help you live your best retirement!

 

Article From: https://dominionlending.ca/sponsored/5-ways-to-renovate-your-home-to-make-it-safer-for-canadians-55

 

Could an Investment Property Be Your Pension?

General Mitchell Goode 25 Jul

An investment (or rental) property, can be a great option for generating additional monthly income and growing your wealth over time, if done properly.

This strategy has multiple options and outcomes that can benefit Canadians such as:

  • Supplementing income now and boosting pension in the future creating more financial freedom
  • Allowing you to buy your dream retirement home now and rent it out until you’re ready to use it
  • Increase monthly cash flow for potential expenses beyond retirement savings
  • Utilize a multi-unit home (such as a duplex) by renting out one of the units

However, before you buy an investment property, there are a few things to know. Firstly, buying a property for the purpose of renting it out to someone else comes with different qualifying criteria and mortgage product options than traditional home purchases.

Before you look at purchasing a rental property, be aware that:

  1. The minimum down payment required is 20% of the purchase price, and the funds must come from your own savings; you cannot use a gift from someone else. Another option is to utilize existing equity in your primary residence and refinance for the cash to purchase your rental or investment property. Be sure to factor in funds for closing costs, potential repairs and maintenance in your amount.
  2. Only a portion of the rental income can be used to qualify and determine how much you can afford to borrow. Some lenders will only allow you to use 50% of the income added to yours, while other lenders may allow up to 80% of the rental income and subtract your expenses.
  3. Interest rates usually have a premium when the mortgage is for a rental property versus a mortgage for a home someone intends on living in. The premium can be anywhere from 0.10% to 0.20% on a regular 5-year fixed rate.

With the right purchase price and rental costs per month, this can be a great way to supplement income and make the most out of your retirement. Not only does it offer monthly cashflow, but you also will have the ability to sell the property down the line if you so choose. However, bear in mind, the sale will be subject to capital gains tax. Your accountant will be able to help you with that aspect if you do decide to sell in the future.

Before getting started, it is important to calculate the cost of your investment (purchase price and closing costs), as well as consider maintenance amounts (approximately 1% of the property value for the year) and compare to current rental prices to be sure it is a profitable investment before purchasing.

If you’re looking to purchase an investment property, be sure to reach out to a Dominion Lending Centres mortgage expert to discuss your options and understand what is required.

 

Article From: https://dominionlending.ca/life-style/could-an-investment-property-be-your-pension

 

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