The Calgary Real Estate Blog

Different Ways to Insure a Mortgage

Jared Chamberlain — Tue, 22 Jan 2013 06:16:14 +0000

Calgary Real Estate News

I found a very informative article here about insuring a mortgage! Read the full article below.

Our home is one of the biggest and most important financial assets we own in our lifetime, and our mortgage is typically one of our biggest debts.

Recently, Jack and Shannon asked me if it was better to buy mortgage insurance through the bank or if they should purchase a term life insurance policy through their insurance broker. Here are some factors for Jack and Shannon to think about.

The death benefit

With mortgage insurance, the death benefit declines as the mortgage balance declines and the benefit is paid directly to the bank. For example, Jack and Shannon are getting a $265,000 mortgage, which means the mortgage insurance would start at $265,000 of coverage. After five years, the mortgage balance would drop to $240,500, but so would the mortgage insurance coverage.

With term life insurance, a $265,000 policy would have the same death benefit regardless of the mortgage balance. Although the policy is designed to pay off the mortgage, it is a separate policy from the mortgage. They could designate any beneficiary with the intent that the proceeds would be used to pay off the mortgage balance. Any extra proceeds above the mortgage amount would go to beneficiaries. With mortgage insurance, there would be no extra.

What is the cost?

Comparing the cost of mortgage insurance to that of a term life insurance policy is challenging, because it’s not always an apples-to-apples comparison. The one thing I always suggest is to shop around for the best price. That being said, here are a few generalizations I can provide.

With mortgage insurance, the cost of the insurance stays the same despite the declining death benefit. Continuing with Jack and Shannon’s example, after five years, although the death benefit drops from $265,000 to $240,500, the monthly cost of the insurance does not drop.

With a term insurance policy, the cost also stays the same for the length of the term. For example, if you buy a 10-year term policy, the premiums will stay the same for 10 years but then will increase for the next 10 years. Many life insurance agents would suggest a 20-year term policy for mortgage insurance coverage. In a case where the amortization period of the mortgage is longer than 20 years, premiums would go up after that period. The death benefit could be reduced at that time to reflect a lower mortgage balance.

Generally speaking, if you are healthy, buying a personal term insurance policy will likely be cheaper than getting the mortgage insurance from the bank. However, if you are a smoker or have health issues, the mortgage insurance may be the more cost effective option.

Will your claim be paid?

When you apply for personal life insurance, you must get a medical; all of the underwriting is done prior to the policy being issued. Mortgage insurance offered through the banks is different. In most cases, there is no medical – just a really long questionnaire that’s not always easy to read and understand. With mortgage insurance, part of the underwriting is done at the time of claim, which has proved to be problematic at times. A while back, CBC Marketplace did an investigation into mortgage insurance and found two people that were denied claims after paying premiums on their mortgage insurance policy because of inconsistencies on the application. So even though you are paying for mortgage insurance, you may not actually be covered, because part of the underwriting is done after the claim has been made. This highlights the importance of completing these medical questionnaires properly and the benefit of buying insurance from a qualified, licensed insurance agent who knows what the insurance companies are underwriting.

Portability and flexibility

When you buy mortgage insurance through the banks, the policy is attached to a specific mortgage. If you move your mortgage to another company, you may have to re-qualify for new mortgage insurance coverage through the new financial institution.

With a personal life insurance policy, you own the policy regardless of where the mortgage is taken out. If you wish to change the coverage, you have the flexibility to make changes.

With mortgage insurance there is basically one policy for everyone. With personal life insurance, there is opportunity and flexibility to customize these policies to your personal needs.

The whole point of having mortgage insurance is to make sure the mortgage is paid off in case of death. It sounds like a simple concept, but there may be more to evaluating mortgage insurance than you might think.

Make sure you do your homework before signing on the dotted line.

Different Ways to Insure a Mortgage – by Edmonton Journal

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...

Buying a Rental Property? How the Financing Game has Changed

Jared Chamberlain — Tue, 11 Dec 2012 05:05:59 +0000

Calgary Real Estate News

I found this great article about buying a rental property. There are some few important things you need to know about how the game has changed in the market and that’s what you need to find out below.

Just four short years ago, you could buy an investment property with nothing down and get the best interest rates in the market.

That was then. Today, rental financing is night-and-day different. To mortgage a small (a one-to-four unit, non-owner occupied) rental property now, you need to plop down one-fifth of the purchase price. And even then, you don’t always get the lowest rate.

With a tipsy housing market and the credit crisis still fresh in memory, regulators and lenders are putting higher-risk borrowers under a microscope. That includes real estate investors.

As a result, it’s now trickier to qualify for a rental property mortgage – especially compared to the days before April 19, 2010. (That’s when federal legislation put an end to insured rental mortgages with less than 20 per cent down.)

So if you are considering a small rental property and need a mortgage soon, here are some things to remember.

You’ll need an ample down payment
If you buy a rental home that you won’t live in, almost every lender in Canada will want at least 20 per cent down. That’s $72,000 on the average $360,000 residential property.

And if you’re purchasing a condo or buying in a “higher-risk” city (like Vancouver), many lenders will want an additional 5 per cent.

Picking the right lender matters more than ever
If you want to be approved, your “total debt ratio” must fall within lender limits. At the risk of oversimplifying, your “total debt ratio” is generally your total monthly expenses divided by total monthly income from all sources, including rentals.

That sounds simple, but it’s not. A borrower’s ability to qualify often depends on how much of her rental income the lender recognizes.

You’d think that if a tenant pays you $1,000 a month, you could add that $1,000 to your income when qualifying for a mortgage. But in many cases, lenders will credit you with only 50 per cent of the rental income you receive, making it harder for you to qualify.

In all, there are four ways that lenders calculate your debt ratios, which are beyond the scope of this column. Suffice it to say, any competent mortgage adviser can point out lenders with borrower-friendly methods.

And there’s one last thing to keep in mind about debt ratios. Different lenders have different limits. Some lenders let you have a 42 per cent total debt ratio. Most others permit just 40 per cent. That extra 2 per cent can make a big difference , especially for folks with mortgages on multiple properties.

The moral here is that the lender you pick can have a major impact on your approval chances. If your qualifications aren’t perfect, you’ll need a lender that is open to some common sense underwriting exceptions, and those are getting harder to find.

Multiple rental properties = headaches
Many lenders prohibit you from owning and/or financing an unlimited number of rental properties.

Even if they don’t explicitly forbid it, the inability to count all your rental income in debt ratio calculations can make approvals challenging, and sometimes impossible. In fact, it often forces people with big rental portfolios to renew mortgages with their existing lender at unfavourable rates and terms.

So if you plan to finance a small rental empire, find a broker that has several clients with 10 or more rental properties. They’ll need that experience to help you know which lenders to use, and in what order.

The key to remember is that lenders with the best rates often have the tightest rules. If you want the best terms, you’ll want to use the more restrictive lenders early in your empire building and save the flexible ones for last. That ensures you don’t run out of competitive lenders when your portfolio gets big.

More paperwork
A few years ago, it was easier to use an appraiser’s estimate of a property’s rental income in lieu of a signed lease. Today, more and more lenders want to see a signed written lease or other proof of rental income.

It also helps to have two years’ tax returns available. That’s because using tax returns to show your net gain or loss on a property can make it easier to qualify, as opposed to using other standard debt service calculations.

The rate is often secondary
Rental mortgages are higher risk so many lenders now charge rate premiums.

Fortunately, you can still find lenders that extend their best rates on investment financing. The question is, do they offer the other features you need?

In keeping with supply and demand, the most flexible mortgages usually cost more. That’s especially true for investment property financing. Be prepared to pay a little extra if you need a lender that satisfies more than a few of these criteria:

has highly flexible rental income rules
allows you to carry a greater debt ratio
lets you put a property in a company name for liability protection
lets you finance more than four or five properties
doesn’t impose a minimum net worth requirement
allows 30– to 35-year amortizations to maximize your cash flow
lets you prove rental income with “market rent” appraisals
allows a gifted or borrowed down payment
allows you to add a second mortgage
will lend on large mortgages (e.g., $750,000+)
has a low minimum credit score (e.g. 600 versus 650)
allows rental income from suites that don’t conform with current municipal bylaws
provides cash back (sometimes handy for improvements and closing costs)
allows you to add a vendor take-back mortgage (this is where part of your purchase is financed by the property seller)
offers a line of credit with your rental mortgage
pays for your switching fees (this is far less common with rental mortgages than it is for regular mortgages)

Choose your broker carefully
If you want the best rental rate and most flexibility, an experienced no-fee broker is the way to go.

Rental financing is truly a specialization and probably only one in 10 mortgage professionals are actually proficient at it.

Rick Robertson, founder of the lender comparison firm Mortgage Mentor, says one way to screen brokers is to ask how many properties they’ve financed in the last year. If the number is less than 10 or 15, find a more experienced broker.

And Mr. Robertson adds, “Deal with a broker that uses a lot of lenders. Each lender has its own niche and no two lenders in Canada have the same rental policy.”

Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at VERICOintelliMortgage. You can also follow him on twitter at @CdnMortgageNews.

Buying a Rental Property? How the Financing Game has Changed – by The Globe and Mail

Any thoughts about this? Let us know what you think by commenting below.

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...

Property Values Near West LRT Line Have More Calgary Owners Looking to Sell

Jared Chamberlain — Mon, 10 Dec 2012 05:08:18 +0000

Calgary Real Estate News

This is a great article where our very own Jared Chamberlain was interviewed about the increasing value of properties near West LRT line. You got to read the full article below.

As the west LRT opening looms, Ann Zee is seeing her neighbours move away.

Zee lives in a condominium within walking distance of the 45 Street station. She said many of the other condo owners are planning to sell their homes to capitalize on higher property values.

“This is a great inner-city location and being right next to the LRT station is such a plus,” she said.

Properties within one kilometre of new transportation hubs typically see their values go up, according to Jared Chamberlain, real estate agent with The Chamberlain Group.

According to assessments by the City of Calgary, property values in Rosscarrock, Glendale, Killarney and Shaganappi were either at or below the city median in 2010. In 2012, those communities – within one kilometre one of the new stations – were at or above the city median by as much as 10 per cent.

“When you have access to an area, it creates more demand,” Chamberlain said. “It’s going to bump those places up pricewise.”

Properties close to the LRT could see a two per cent increase over the next two years, according to Robin Spiers of Real Estate Professionals Inc.

“The LRT is going to be one factor that helps these neighbourhoods, but there are a lot of other factors that have a bigger effect on the value of these homes,” Spiers said.

One of the major influences Spiers cited was Calgary’s resilience to a weak global economy.

He added that if everyone puts their homes on the market at the same time, it would likely weaken demand among buyers.

Property prices:

A two-bedroom condo near the 45 Street Station is assessed at $199,000, according to the city.

The new section of the LRT system has six stations in West Calgary.

The west LRT line opens on December 10.

Is accessibility to LRT a major consideration for you when buying a home in Calgary? Let us know your thoughts by commenting below.

Property Values Near West LRT Line Have More Calgary Owners Looking to Sell – by MetroNews.ca

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...

Consider a Townhome for sale in Calgary vs a Condo Apartment

Jared Chamberlain — Sat, 08 Dec 2012 22:33:44 +0000

Are you in the market for a new home? Are you considering a townhome in Calgary?

Sometimes buyers when they start out looking for a condo apartment but then soon realize that it won’t be enough space. Perhaps the storage isn’t going to be enough or the fact that they just don’t want to have the typical shared hallway smells of a building.

You know what I’m talking about… the first 10 ft is meatballs, the next is some curry and the last 20 ft to the elevator is cat piss… Lovely!

On the other hand, if you already own a condo apartment, you could simply be done and want to move out!

Purchasing a townhome in Calgary is a great idea. There’s nothing like unlocking your own front door, or driving into your own garage to make one feel great!

Find a Townhome in Calgary today:

NW Calgary Townhomes for Sale | SW Calgary Townhomes for Sale
SE Calgary Townhomes for Sale | NE Calgary Townhomes for Sale

Top 3 Reasons to purchase a townhome in Calgary:

Convenience – Having a townhome is a great mid point between getting a full single family home and a condo. If you are in the lifestyle of needing more space than 600-800 sq ft like most condo apartments give you, this is a great option. You are able to find many styles of townhomes to suite all lifestyles.

Privacy - Most townhomes offer you the ability to have your own entrance from the outside world. Enough said! If your not one to become a sardine in a can like many condo apartments offer, this is an excellent option for you.

Turn Key - Being that you pay condo fees, all your exterior maintenance is typically taken care of for you. You are able to literally lock up and leave for months on end, and everything will be ok! OR if you just hate shovelling snow… well, your going to love this then!

Whatever it is that your looking for in a townhome, there is something for you… Go ahead, take a peek and fall in love with one today!

NW Calgary Townhomes for Sale | SW Calgary Townhomes for Sale
SE Calgary Townhomes for Sale | NE Calgary Townhomes for Sale

photo credit: ohad* via photopin cc

The Ultimate Real Estate Search Engine

Jared Chamberlain — Wed, 24 Oct 2012 13:21:54 +0000

Have you ever found yourself being frustrated with the MLS.ca website when you’ve been looking for homes for sale in Calgary? I know I have and majority of our clients have too. So we set out to create and get the best search engine that we could find out there and get it in the hands of our clients.

It took the better part of two years to find, create and implement SearchCalgaryListings.ca. But once we had it, we knew we were on to something. We ultimately wanted something that you could search on your own schedule and time frame.

This is seriously some powerful software we now have in our hands. The searches that one can do are limitless and how the site notifies you when new properties are available or prices reduced and so on is incredibly slick!

We have all homes for sale in Alberta through this site. So if your not looking in Calgary, or want to help look for a friend in another city in our wonderful province, you can do that through this site!

Here are the top 3 incredible things this site can do:

Mobile Search
- If you are on the go, simply open your mobile browser (iPad, iPhone, Android etc.) to www.SearchCalgaryListings.ca and the site is ready to go for you. Save it to your home screen as a web app and your ready to go.
- The best part about the mobile is it will use your location and you can find properties right close to you! (see image below)

Search Alerts
- If you are looking for a specific type of property and you want to be kept up to date on what’s happening with new listings, price reductions and so on, you can set up your saved searches to email you on a daily, weekly, bi-weekly etc. basis so you are able to stay in the loop!

It’s EASY
- Ok… I know it’s not a ‘thing’ but it’s how it works. This is the most simple laid out system I’ve ever seen in the home search realm. I’m not kidding… For example, when your on your mobile device and you see a property using your GPS and Nearby Property tab, you can simply swipe the photos to see them all. All the info is laid out in a way that is friendly and enjoyable to read and browse.

You need to try this for yourself!

If you want to give it a test run, just head over to www.SearchCalgaryListings.ca and give us your feedback… I’m sure you won’t be disappointed!

The Chamberlain Group

Skilled and Conscientious Service

Jared Chamberlain — Tue, 18 Sep 2012 06:40:21 +0000

Calgary Real Estate News

REALTORS® need to stick to their knitting – i.e. the areas of real estate they know best – to avoid potential liability.

If they try practising in an area in which they’re not competent or qualified, there can be serious consequences.

Article 12 of the REALTOR® Code deals with two related aspects of competent service. It requires REALTORS® to provide services which meet the standards of competence and skill reasonably expected within the chosen discipline and not accept assignments they are unqualified to handle.

One of the most difficult challenges facing brokers is making sure their associates are up to date on the latest legislation, board rules and regulations, municipal legislation, bylaws, and zoning and planning initiatives. This is not only a requirement of the REALTOR® Code but also of the Real Estate Act of Alberta and CREB®’s Rules and Regulations. Want to read more in depth on this article? Just click the link below.

Skilled and Conscientious Service – by Creblink.com

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...

Luxury Housing Sales Growth Encouraging

Jared Chamberlain — Fri, 24 Aug 2012 06:00:15 +0000

Calgary Real Estate News

Calgary may not be booming quite like it did in 2007, but the city’s luxury home market is showing real signs of strength.

Sales of $1 million-plus properties are up 20% in the first half of this year, said Calgary Real Estate Board chief economist Ann-Marie Lurie, signifying a solid local economy.

“This is almost a testament to the long term prospects of the city,” she said.

“Nobody is really buying these homes with the intention of flipping them right away.

“They’re committed to Calgary, they’re going to be here for a while and they have a very strong long-term outlook.”

So far in 2012, there have been 339 sales above $1 million-plus properties compared to 281 in the same period of 2011. Want to read more in depth on this article? Just click the link below.

Luxury Housing Sales Growth Encouraging – by Calgary Sun

Want to get updated about Calgary Housing Market Stats?

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...

Proposals Sought for Pair of Proposed Calgary Recreation Centers

Jared Chamberlain — Thu, 23 Aug 2012 06:00:44 +0000

Calgary Real Estate News

The city is ready to dive into the development of two brand new rec centres.

Proposals from companies looking to work on the design, procurement and construction of the Seton and Great Plains facilities are now being requested.

They are two of four new centres — the others planned for Quarry Park and Rocky Ridge — that are estimated to cost $480 million

In June, council approved carrying an additional debt load of $250 million to pay for the projects after $100 million of federal funding fell through last year.

Ald. Shane Keating, whose Ward 12 will eventually be home to two of the new facilities, said the city has not scaled back plans for the facilities despite having to shoulder a much bigger financial burden than was initially expected.

“All the facilities and all the amenities are still going to go ahead,” said Keating.

“We have to go ahead and bite the bullet, spend the money. Want to read more in depth on this article? Just click the link below.

Proposals Sought for Pair of Proposed Calgary Recreation Centers- by Calgary Sun

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Jared & Rebecca
About The Chamberlain Group:
Jared and Rebecca Chamberlain are Calgary REALTORS® who are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary faster and for far more money. They would be honored to have the chance to work with you and earn your business. ____________________________________________________

Canada’s Housing Market Seen Cooling into 2013

Jared Chamberlain — Wed, 22 Aug 2012 06:00:29 +0000

Calgary Real Estate News

Canada’s robust housing market is expected to soften over the next few months and into 2013, with a slowdown in the pace of housing starts, the Canada Mortgage and Housing Corporation said on Tuesday.

But the government’s housing agency also assumes that average 2013 prices will exceed those in 2012, a still-strong performance in a country that never suffered the housing market meltdown seen in the United States.

In its quarterly housing market outlook, CMHC said it expected housing starts of 207,200 this year and 193,100 units in 2013.

Existing home sales will hit 466,600 units this year and climb modestly to 469,600 units in 2013, it said.

The agency said it expected average resale prices to rise to $377,300 in 2013, up 2.5 percent from $368,000 in 2012. Want to read more in depth on this article? Just click the link below.

Canada’s Housing Market Seen Cooling into 2013 – by Calgary Sun

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...

Trico Ensures Quality is Set in Redstone

Jared Chamberlain — Mon, 06 Aug 2012 01:47:49 +0000

Calgary Real Estate News

CALGARY, AB – An exciting new development in Calgary’s northeast allows Trico Homes to expand into a new area of growth in the city, with the community of Redstone.

“Trico Homes is very excited to be building in Redstone because it means that we have projects in all four quadrants of the city,” says Clark Hogan, vice-president of marketing for Trico Homes.

“The northeast is an area of Calgary with really strong growth and we’re happy be to represented here.”

In Redstone, Trico Homes is building their carriage, or duplex homes, that offer a single-family lifestyle for a price that suits first-time buyers. There are two showhomes on display within the community.

“There is a flood of natural light that enters each of these two-storey homes,” Hogan says. Want to read more in depth on this article? Just click the link below.

Trico Ensures Quality is Set in Redstone – by Calgary Sun

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Jared & Rebecca

About The Chamberlain Group Real Estate Expert Advisors:

Jared and Rebecca Chamberlain are Real Estate Expert Advisors in Calgary and are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary fast and for far more money. They would be honored to have the chance to work with you and earn your business.

If you would like to consider real estate as a career option or would like to learn about working on our team as a partner check out our ONEday Internship...