The Benefits of Staging your Home

Staging your home has many benefits. Staged homes sell 6%-15% over the asking price, and House staging is affordable and fast. If your house is in disarray and has been on the market for some time, I highly recommend staging it. And here’s why:

Get Higher offers
Highlighting your home’s best features by making a few minor repairs and highlighting those features by properly staging it can increase the value making buyers see your home as more valuable. Staged homes sell on average higher than nonstaged homes.

First Impressions
You only get one first impression. If your house is a mess and cluttered, no matter how tremendous and perfect for the buyer, they may not be able to see anything but the chaos. When we go to the store to buy products, we usually pick the ones with more likable, more organized labeling. Selling your house is no different.

Appeal
One of the benefits of staging your home is that it can make it seem much more luxurious, clean, and comfortable than it is typically. The magic of home staging tricks potential buyers into thinking their lives will be comfortable, clean, and luxurious if they buy your home.

Make it easier for buyers to envision living in the home.
Depersonalizing your home is vitally important. Buyers need to see themselves living the home as everyone’s home life is a tad different. Some spend most of their time in the kitchen, and others in the living room. When staging your home, think about what potential buyers could do to the space and highlight the key features in each room. For example, big windows in the living room or a large walk-in pantry in the kitchen. 

Better for in-person and online viewings
It is becoming more popular to search for houses on your own using real estate websites rather than depending on agents to find them. Staging your home for pictures can make your home look immaculate and inviting for anyone who clicks on its profile. Potential buyers may even refuse to see houses suggested by their agents based on their digital-first impressions.

Less time on the market
Not only will staging your home get you higher offers, but it will also lessen the time it spends on the market. So why not give us a call and we can help you stag your home to sell!

How to improve Credit score

Your payment history is the most important factor for your credit score.

To improve your payment history:

• always make your payments on time
• make at least the minimum payment if you can’t pay the full amount that you owe
• contact the lender right away if you think you'll have trouble paying a bill
• don't skip a payment 

• Don’t go over your credit limit. Borrowing more than the authorized limit on a credit card can lower your credit score.
• Try to use less than 35% of your available credit. It’s better to have a higher credit limit and use less of it each month.

The longer you have a credit account open and in use, the better it is for your score. Your credit score may be lower if you have credit accounts that are relatively new.

To control the number of credit checks in your report:

• limit the number of times you apply for credit
• get your quotes from different lenders within a two-week period when shopping around for a car or a mortgage. Your inquiries will be combined and treated as a single inquiry for your credit score.
• apply for credit only when you really need it

Hard hits versus Soft hits

Hard hits are credit checks that appear in your credit report and count toward your credit score. Anyone who views your credit report will see these inquiries.

Examples of hard hits include:

• an application for a credit card
• some rental applications
• some employment applications

Soft hits are credit checks that appear in your credit report but only you can see them. These credit checks don't affect your credit score in any way.

Examples of soft hits include:

• requesting your own credit report
• businesses asking for your credit report to update their records about an existing account you have with them

Your score may be lower if you only have one type of credit product, such as a credit card.

It's better to have a mix of different types of credit, such as:

• a credit card
• a car loan
• a line of credit

A mix of credit products may improve your credit score. Make sure you can pay back any money you borrow. Otherwise, you could end up hurting your score by taking on too much debt.

Credit Report

Your credit report is a summary of your credit history. It is created when you borrow money or apply for credit for the first time. Lenders send information about your accounts to credit reporting agencies.

Credit Score

Your credit score is a number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money. Your credit score will change over time as your credit report is updated.

Factors that may affect your credit score include:

• how long you’ve had credit
• how long each credit has been in your report
• if you carry a balance on your credit cards
• if you regularly miss payments
• the amount of your outstanding debts
• being close to, at or above your credit limit
• the number of recent credit applications
• the type of credit you’re using
• if your debts have been sent to a collection agency
• any record of insolvency or bankruptcy

Credit Score Ranges

• 800 to 850: Excellent
  Individuals in this range are considered to be low-risk borrowers. They may have an easier time securing a loan than borrowers with lower scores.
• 740 to 799: Very good
  Individuals in this range have demonstrated a history of positive credit behavior and may have an easier time being approved for additional credit.
• 670 to 739: Good
  Lenders generally view those with credit scores of 670 and up as acceptable or lower-risk borrowers.
• 580 to 669: Fair
  Individuals in this category are often considered “subprime” borrowers. Lenders may consider them higher-risk, and they may have trouble qualifying for new credit.
• 300 to 579: Poor
  Individuals in this range often have difficulty being approved for new credit. If you find yourself in the poor category, it's likely you'll need to take steps to improve your credit scores before you can secure any new credit.

There are two main credit bureaus in Canada:

• Equifax
• TransUnion

These are private companies that collect, store and share information about how you use credit.

Personal information in your credit report

Your credit report may contain your:

• name
• date of birth
• current and previous addresses
• current and previous telephone numbers
• social insurance number
• driver’s license number
• passport number
• current and previous employers
• current and previous job titles

Financial information in your credit report

Your credit report may contain:

• non-sufficient funds payments, or bad cheques
• chequing and savings accounts closed “for cause” due to money owing or fraud committed
• credit you use including credit cards, retail or store cards, lines of credit and loans
• bankruptcy or a court decision against you that relates to credit
• debts sent to collection agencies
• inquiries from lenders and others who have requested your credit report in the past three years
• registered items, such as a car lien, that allows the lender to seize it if you don't pay
• remarks including consumer statements, fraud alerts and identity verification alerts

Your credit report contains factual information about your credit cards and loans, such as:

• when you opened your account
• how much you owe
• if you make your payments on time
• if you miss payments
• if your debt has been transferred to a collection agency
• if you go over your credit limit
• personal information that is available in public records, such as a bankruptcy

Your credit report can also include chequing and savings accounts that are closed “for cause”. These include accounts closed due to money owing or fraud committed by the account holder.

THE DIFFERENT TYPES OF MORTGAGES

OPEN MORTGAGES
If you want to make large payments on your mortgage or pay off the entire mortgage without penalty, then an open mortgage is for you. An open mortgage offers maximum flexibility. These homeowners are willing to accept some fluctuation in the interest rate for the flexibility of paying off part or the entire mortgage before the term is complete.

CLOSED MORTGAGES
A closed mortgage is a commitment with a pre-determined interest rate over a pre-determined period. A buyer who uses a closed mortgage will likely have to pay the lender a penalty if the loan is paid fully before the end of the closed term. With a closed mortgage, the borrower may select a fixed or variable/adjustable rate depending on their needs or preference. 

Closed mortgages generally have lower interest rates than open mortgages. Most lenders will allow borrowers with closed mortgages to make a lump sum payment of up to 20% of the original mortgage amount once a year without penalty. This payment goes directly toward paying down the principal of the amount owing. Many lenders will allow a borrower to increase the mortgage payment up to 20%, as well as allow the lump sum payment.

CONVERTIBLE MORTGAGES
A convertible mortgage is an agreement made at the beginning of a term that allows homeowners to change the type of mortgage they hold during its term. A convertible mortgage is a right choice if a homeowner wants to start with an open mortgage and then lock into a closed mortgage. It offers lower rates than an open mortgage and has the option of switching to a closed term. Most lenders can also do a conversion to a fixed rate mortgage when the borrower initially selected a variable rate mortgage and now wishes to move to a fixed rate before the end of the term.

HYBRID MORTGAGES
A hybrid mortgage is a term used when there is more than one type of mortgage contained in a single mortgage registration. The registration could include:

• A fixed-rate portion.
• A variable rate portion.
• A line of credit portion.
• Any combination of these.

Each lender will have their own name for this type of mortgage, allowing from 2 to 100 different products contained in the registration of the mortgage. This product is suggested for the savvy borrower who will use this as part of their overall financial plan.

REVERSE MORTGAGES
This type of mortgage allows homeowners 55 years and older to convert their home equity into either a lump sum payment or monthly cash payment(s), generally for living expenses. A homeowner's equity is drawn down by the lender to the homeowner - the borrower. The loan balance is due when the homeowner no longer wishes to occupy the property as their principal residence or upon the borrower's death. The loan balance is settled from the proceeds of the sale of the property either by the owner themselves or their heirs.

WHAT IS A MORTGAGE?

 A mortgage is a loan that allows individuals to buy a property without paying the total price all at once. 

When negotiating the amount of your mortgage loan, you will most likely be required to provide a down payment. The down payment will go towards the total purchase amount.

The mortgage loan amount is determined by the home's purchase price minus your down payment. The borrower must repay a mortgage loan with interest. There are different types of payment methods that make up the different kinds of mortgages available.

The monthly payments are divided into two parts. One part goes towards paying the principal (the amount of money borrowed), and the other part pays the interest (the fee charged for borrowing the money.)

• The more money put down, the less you will have to borrow and the less interest you will have to pay over the length of the mortgage.
• You will have a conventional mortgage with a down payment of 20% or more of the purchase price.
• You will have a high-ratio mortgage if your down payment is less than 20% of the purchase price. A high-ratio mortgage must be insured to protect the lender. This insurance is called mortgage default insurance, which covers the lender in case the borrower defaults on the loan.
• Canada Guaranty, Canada Mortgage and Housing Corporation (CMHC), and Genworth Canada help first-time home buyers who do not have funds for a down payment.

The mortgagor is the person borrowing money.

The mortgagee is the lender of the money. 

PRE-APPROVAL 
It is essential to obtain pre-approval for the amount of money you can borrow from a lender and avoid looking at homes that are out of your price range. The pre-approval process usually guarantees a rate of 90 days. In some cases, a lender may ask for a guarantor to provide additional security for the lender. 

A Guarantor is a person who signs the mortgage documents along with the borrower but does not have any interest in the ownership of the property.

CREDIT SCORE
A credit score summarizes your credit history and how consistently you pay your financial obligations. Good credit history and credit score are critical when purchasing a home. A poor credit score may determine whether you have to pay a higher interest rate. Your credit score indicates how likely you are to repay future debts and can speed up or slow down your mortgage approval process. More than one credit report bureau keeps records on you. Equifax and TransUnion are the two principal credit bureaus in Canada. Click the links to find out your score

Equifax or Transunion 

TERMS
The term of a mortgage is the length of time a lender will loan mortgage funds to a borrower. This duration can be from six months to ten years, with two to five years being the most common.  The shorter the duration of a mortgage term, the lower the interest rate. At the end of each term, you will either pay off the balance owing or renegotiate the mortgage for another term until the entire mortgage is paid back.It can take 15 to 30 years to pay off your mortgage ultimately. Amortization is fully paying off your loan in installments of principal and interest over a definite period. 

SHORT TERM
Short-term agreements are usually for two years or less. Short-term mortgages offer lower interest rates than long-term mortgages. People who believe that interest rates are currently higher than they will be in the future generally choose a short-term mortgage. 

LONG TERM
Long-term agreements are for three years or more. Long-term mortgages cost more than short-term mortgages, so that the interest rate will be higher. A higher interest rate appeals to borrowers who value the stability and predictability of fixed expenses over a set period. A stable mortgage payment is more accessible to budget.

RATES
An interest rate is the amount of interest charged on loan. It is based on the rate the Bank of Canada charges lenders to lend money. Interest rates are generally lower if you borrow money for a short period and higher if you borrow the money for a more extended period. The interest is usually paid as part of your regular mortgage payment, along with an amount paid to the principal. This is referred to as a blended principal and interest payment.

FIXED-RATE MORTGAGE
With a fixed-rate mortgage, your interest rate will not change during the term of your mortgage. You will know exactly how much your payments will be and how much your mortgage will be left by the end of the term. At the end of the term, if there is still a balance and time left on your amortization period, the lender will offer a renewal with a choice of a new term and the interest rate available.

VARIABLE/ADJUSTABLE-RATE MORTGAGE
When you agree to a fluctuating interest rate for the length of the term, you have a variable-rate mortgage. Interest rates fluctuate with the bank's prime lending rate and may vary monthly. When interest rates change, your payment amount remains the same, but the amount applied to the principal will change. Therefore, if interest rates drop, more of your mortgage payment is applied to the principal balance owing.

With an adjustable-rate mortgage, the payment will automatically adjust when there is a change in the prime interest rate. And will ensure that enough money will be paid toward each payment's principal amount to have the mortgage paid off at the end of the amortization term.

FINALIZING YOUR MORTGAGE
When you and the seller agree on the price to be paid for the house, you must provide a deposit. A deposit is an advance payment of part of your down payment. It is paid at the time of signing the Agreement of Purchase of Sale, a legal document the buyer and seller approve detailing the price & terms of the transaction.

It is important to keep in mind that you will also be required to pay property tax. Property tax is paid on privately owned property and is usually paid semi-annually or monthly. As well as some other closing costs like an appraisal. Here is a list of closing costs you should expect.

You will be required to provide the following list of information to your mortgage professional to finalize the mortgage:

• Valid identification
• Confirmation of income or employment earnings
• Current bank information
• Evidence of your down payment
• List of assets
• List of liabilities
• Contact information for your lawyer
• Copy of the Purchase Agreement
• Copy of the MLS listing
• Contract and building plans if your home is being built
• Authorization to perform a credit bureau inquiry
• Letter from the insurance company

• indicating sufficient property insurance coverage for the new purchase
• showing the lender as a lien holder should be added

 CLOSING COSTS

• Appraisal Fee
  The process of assessing the value of a home is usually to determine a selling price. This value may or may not be the same as the home's purchase price.
• Deposit
  Money is put towards purchasing a home to prove the buyer is committed to fulfilling the purchase transaction. The amount of the deposit varies based on the purchase price.
• Down Payment
  A partial payment is made at the time of purchase. When purchasing a property, first-time home buyers can put as little as zero.
• Home Inspection Fee
  The cost is paid to a building inspector to examine the house before purchase and is usually selected by the purchaser.
• Land or Property Transfer Tax
   A tax paid on property that changes hands. First-time buyers may be eligible for a rebate in certain provinces.
• Legal Fees
  The cost paid to have a lawyer finalize the property transfer between the seller and the purchaser.
• Mortgage Loan (Default) Insurance
   Mortgage loan insurance enables homebuyers to purchase a home with as little as 5% down payment. The insurance premium amount depends on the amount borrowed from the lender.
• Title Insurance (optional)
  Title Insurance provides the purchaser coverage against title risks inherent in real estate transactions (including title fraud) for as long as you own your home. In many cases, it is required by the lender that the borrower has title insurance to provide coverage for the lender. Most lawyers recommend that the borrower also gets additional coverage for themselves.

Looking for more information

The Different types of mortgages