What comes first the mortgage or the house?

Many people get it backwards. They shop for a home, and then make an emotional decision without knowing what they are able to afford. And then are surprised and disappointed to find out that they cannot get the financing. Thankfully the banks in Canada do their homework on the applicant to see whether they have the ability to repay the loan while in the lifestyle they are accustomed to.

Somethings to consider about your lifestyle:

  • Are you single or a family of six? Costs for food and clothing alone are very different.
  • Do you take annual vacations.
  • How often do you like to eat out.
  • Are you involved in costly sporting activities.
  • Would you be willing to sacrifice these things for a bigger or nicer home.

The banks will take into consideration the following:

  • Do you have car payments.
  • Do you have to repay student loans.
  • How much do you owe on your credit cards.
  • Do you have bad debts.


Falling in love with a home without considering the REAL impact on your lifestyle is a recipe for unhappiness….either in re-adjusting to a “lesser” home or disappointment over the lack of vacations or entertainment.

My advice is to first work on your financing. Go the logic route. Find out what you can afford from a bank’s perspective, but then, spend some time considering the cash flow realities of your choice. Work with your bank to make wise choices.

Additionally, your bank should be advising you on ways to properly represent and transfer your assets, how to explain and document your income, as well as, assisting you in methods to get your optimal credit score. This counsel can be invaluable in smoothing out some of the bumps in the mortgage process, besides giving you the best chance to get the best mortgage rate available.

The choice is  clear get the mortgage before the house!


Canadian home prices rise to new record

This is an article from the Financial Post.


Resale home prices in Canada rose in July for the eighth consecutive month to a new record high, according to the Teranet-National Bank Composite House Price Index.

The index, which tracks price changes for repeat sales of single-family homes in six metropolitan areas, showed prices rising 1.3% in July from the previous month.
It was the fourth consecutive monthly increase exceeding one per cent and sent the index to a reading of 146.51.

Prices rose in five of the six metropolitan areas, advancing 2.3% in Calgary, 1.7% in Toronto, one per cent in Ottawa, 0.9% in Vancouver and 0.5 per cent in Montreal, while declining 0.9% in Halifax.

Five of the six areas hit all-time highs in July, with the exception being Calgary, where prices were still down 8.8% from the all-time high set in August 2007.

On an annual basis, prices were ahead 5.3%. The largest 12-month advance was in Vancouver, where prices were ahead 8.5%.


Think I should try something like this in cottage country

Beer being offered as incentive for Calgary home purchase

$1,000 worth on day of possession

Read more: http://www.calgaryherald.com/business/Beer+being+offered+incentive+Calgary+home+purchase/5438277/story.html#ixzz1Z5KSmWDZ

CALGARY — Two MLS homes for sale in Calgary are offering a unique incentive  for prospective buyers.


The sellers of homes in Hidden Valley and Coventry Hills, both listed by  realtor Robyn Moser of MaxWell South Star Realty, are offering to leave $1,000  in beer behind to the buyers.

“The homeowners are offering any purchaser who is willing to purchase a home  $1,000 in beer on possession day as part of the offering price of a home,” said  Moser, who works with a team of realtors called Robyn Moser &  Associates.

“It’s most likely going to have to be (left) either in the garage or  depending on the temperature in the house.”

Moser came up with the idea after seeing a story in Chicago where a seller  was offering beer with the purchase of the home and how showings on the property  increased by 300 per cent.

“And with those two listings in particular I knew that the clients were very  receptive to trying out new ideas,” she said. “And I felt I would pass along the  information of what they tried down in Chicago and how successful it was down  there.

“Plus at the same time, like we all discussed, there’s nothing more Canadian  than beer.”

The two-storey, 1,800-square-foot home in Hidden Valley is listed at  $424,900. “Buy this home and on possession day the seller will leave you $1,000  in beer,” says the listing to that property.

The Coventry Hills home is two storeys and 1335 square feet and listed at  $349,900. “Homeowners are offering $1,000 in beer to buyer of this home,” says  the listing.

“It’s a homeowner incentive, not a realtor incentive because we can’t put  those out there,” said Moser, adding that the kind of beer left behind will be  negotiated as part of the purchase agreement.

David Finch, assistant professor of marketing at the Bissett School of  Business at Mount Royal University, called the idea “intriguing.”

“At the end of the day, incentive is very audience specific,” he said. “The  incentives for 10-year-old kids are very different from seniors.”

Finch said he doesn’t think someone would purchase a home simply because of  the $1,000 beer incentive.

“But the first step in any type of consumer transaction is awareness,” he  said. “You don’t shop somewhere or consume anything you’ve never heard of. This  is less of an incentive but more of a promotion where they’re building awareness  and buzz around the property for sale not pretending in fact that somebody’s  going to sign on the dotted line to get $1,000 in beer.”

He said he’s heard of cars being used as incentives to buying a property.

“We’re going to try it out with the first two homes and see how it works,” said Moser. “So far actually the response after one day has been pretty  positive.

“I’m sure that if it works really well we’ll probably look at doing it with  some other listings or find other things that suit the clients’ house or  neighbourhood

Read more: http://www.calgaryherald.com/business/Beer+being+offered+incentive+Calgary+home+purchase/5438277/story.html#ixzz1Z5JbpICp

First Blog

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