If you’re like most Canadians, your home is probably the most important investment you will ever make. But how do

To help you determine if you are financially ready to buy a house, CMHC offers a number of simple calculations that you can do to evaluate your current financial situation, how much [...]]]>

Are You Financially Ready?

If you’re like most Canadians, your home is probably the most important investment you will ever make. But how do

To help you determine if you are financially ready to buy a house, CMHC offers a number of simple calculations that you can do to evaluate your current financial situation, how much house you can afford and the maximum home price that you should be considering.

you know if you are financially ready for all the responsibilities that come with homeownership?

To help you avoid any unpleasant surprises, Canada Mortgage and Housing Corporation (CMHC) offers the following tips on how to assess your current financial situation, calculate your monthly expenses and determine how much house you can afford:

• First, calculate your net worth. Your net worth is the total of all of your assets (including any investments, savings, properties, vehicles and other assets you own) minus your liabilities (such as any mortgages, car loans, personal or student loans, credit cards or other debts). Your net worth will give you an accurate snapshot of your current financial situation, as well as an idea of how large a down payment you can afford.
• Next, calculate your current monthly expenses to determine what kind of mortgage payment could comfortably fit into your budget. Your monthly expenses include your current housing expenses (such as rent, utilities, parking and other fees) as well as all other regular, non-housing related costs (such as cable TV/Internet, debt payments, insurance, car fuel and repairs, clothing, medical and dental costs, child care expenses, groceries, entertainment and other expenses).
• Once you have a clear picture of your financial situation, figure out how much you can afford in monthly housing costs. As a general rule, your total monthly housing costs (including mortgage principal and interest, taxes and heating) shouldn’t exceed 32 per cent of your gross household monthly income. In addition, your entire monthly debt load (including mortgage payments, car or student loans, and credit cards) shouldn’t be more than 40 per cent of your gross household monthly income.
• If you have made all the necessary calculations and feel you are ready, it can be a good idea to select a lender and ask them to pre-approve you for a mortgage. Getting pre-approved lets you know in advance what price range you should have in mind when you are shopping for your new home.
• For most people, the hardest part of buying a home — especially a first home — is saving for the down payment. With CMHC mortgage loan insurance, you can purchase a home with a down payment of five per cent of a home’s price.. To find out more, contact CMHC or talk to your lender.

For more information related to buying a home, visit www.cmhc.ca and search keyword: Step by Step for the Homebuying Step by Step Consumer Guide and Workbook. For the largest collection of housing-related information in Canada on buying, renovating or maintaining your home, visit www.cmhc.ca or call 1-800-668-2642. For more than 60 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency and a source of objective, reliable housing expertise.

If you’re like most Canadians, your home is probably the most important investment you’ll ever make. Whether

Whether you’re buying a home or refinancing your existing home, making the right decision now can help save you money and provide greater financial stability for your family in the [...]]]>

What You Should Think About When Financing Your Home

If you’re like most Canadians, your home is probably the most important investment you’ll ever make. Whether

Whether you’re buying a home or refinancing your existing home, making the right decision now can help save you money and provide greater financial stability for your family in the future.

you’re buying a home or refinancing your existing home, making the right decision now can help save you money and provide greater financial stability for your family in the future.

To help you make an informed decision, Canada Mortgage and Housing Corporation (CMHC) offers the following tips on what you should think about when financing a home:

• Calculate in advance how much home you can afford. Mortgage Professionals use a few variables to determine the maximum mortgage you can afford: your household income, your down payment and your debt payments including your new planned mortgage along with major related expenses such as property taxes and heating. If you want to do some calculations of your own, CMHC has created a very simple online Mortgage Affordability Calculator at www.cmhc-schl.gc.ca/en/co/buho/buho_007.cfm.
• Consider getting a smaller mortgage than the maximum amount you can afford. Your future financial picture may not be the same as it is today. By taking on a smaller mortgage than the maximum amount you can afford, you will gain the flexibility and peace of mind to manage your other obligations today and deal with any unforeseen events that might occur in the future.
• Evaluate the impact rising interest rates could have on your monthly payment. For many homeowners, a rise in interest rates could have a significant impact on their housing costs. For example, if you are renewing a mortgage of $250,000, an increase of just two per cent in the interest rate could cost you around $300 extra each month. Evaluating the impact of future interest rate increases today could help you avoid potential financial difficulties tomorrow.
• Become mortgage-free faster by reducing your amortization period. On a mortgage of $250,000, choosing a 25-year amortization instead of a 35-year amortization will increase your monthly payments by about $200, but will also save you around $90,000 in interest over the life of your mortgage, and make your family mortgage-free 10 years sooner. Choosing an accelerated payment option (equivalent to one extra payment per year), making lump sum payments or increasing your regular payment amount all contribute to reducing your amortization period. For example, making one extra payment per year on your 35 year mortgage will make you mortgage-free 6 years sooner.

For more information on any other aspect of owning, maintaining or buying a home, visit our website at www.cmhc.ca or call CMHC at 1-800-668-2642. For more than 60 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency and a source of objective, reliable housing expertise.

This is Cancun, If you have ever visited this city you will never forget [...]]]> Long time visitors of this newsletter will know I have been advocating the benefits of owning real estate overseas.  I am constantly searching for excellent deals for my clients and now I am proud to announce a great discovery in Cancun, Mexico.

This is Cancun, If you have ever visited this city you will never forget its beautiful beaches, its amazing food, excellent climate, thrilling nightlife, interesting historical sites, and I could go on and on endlessly, but I will stop only because this is not a tourism information website, it is a real estate investment one.  The point is that the region is in the highest rank of quality in tourism destinations.

Cancun has a robust infrastructure to support tourism as well. From its high-end hotels to themed adventure parks and tourist oriented shopping malls.  Everything you could possibly desire is close at hand.  In the Hotel district, you could be forgiven if you forget you are in a foreign country.  Whenever you own property, you must be happy with the neighbourhood, when you own in Cancun, you will live in paradise.

There are some differences to owning a home in Cancun rather than Toronto.  The first thing you will notice is that home prices are much lower than you will be used to. You could probably buy your Mexican home for cash. In fact I highly recommend that you do, as the interest rates are much higher in Mexico than here in Canada.  Together, we can talk about the best way to finance your purchase.

The structure of houses themselves are of different materials.  They can be made from poured concrete with re-enforced steel rebar rods inside, or even concrete blocks covered with stucco, making the walls a very strong structure indeed.  The lot will be much smaller than you would expect from a house in Canada, meaning there is not too much to maintain.  The warmer climate means there will be no need for a basement.

Actually, your house will feel more like a condo apartment, as it has more in common with our condos than with our houses.  The design inside will be open concept; the living room and kitchen will be one large open space.  This becomes less true if you buy an older Mexican property.

You will park your car on a row of concrete slabs on the front lawn of your house.

Annual taxes will be considerably lower, around 10% of what you are used to.  As for your day–to-day activities, groceries, liquor and other purchases will be much lower in Mexico, as wages there are lower than ours.  This is just an overview, when we speak together we can get more specific.

Aside from what I am offering, when you buy properties for investment purposes, it is important to buy in an area that is being developed, as your property will increase in value because the neighbourhood is attaining more amenities.  This was another important factor I was looking for in selecting the site because the location of these new homes is in such an area.  New construction in the immediate area includes a future Wal-Mart, a series of hotels, as well as a major new arterial road to support all the traffic to these new developments.

I am recommending this development because of its investment potential, it is in a beautiful area anyone would love to stay, it has a wide range of activities for active people to stay occupied, it has a large support infrastructure, and specifically this site is in an area that is beginning to be developed.

This particular housing development is a subdivision of 45 houses. The only difference between them is the lot size.  The houses themselves are all identical three bedrooms, three bathrooms, 2 levels, and are 1104 square feet. The three choices for the lot size are;

• 45 ft x 108 ft, those start at $1,200,000 Pesos (MXN), which is around $98,000 Canadian,
• 16 ft x 78 ft, starting at $760,000 MXN  = $62,000 CAD and,
• 16 ft x 59 ft starting at $700,000 MXN = $57,000 CAD

Lower Level on the left, Upper Level on the right.

These are just the base unit, which would give you just a plain concrete floor and a roughed in kitchen.  The builder is offering a completed kitchen at an additional cost of $30,000 MXN ($2,400 CAD)

Each of the homes has a private back yard, and the subdivision itself has a shared park equipped with slides and other climbing and swinging equipment for children.

This type of investment gives you many options.  You can own a house, living in it yourself, and retire to a lifestyle more suited toward relaxation.  Or, you could use it as a vacation home, visiting it only a few weeks out of the year. While the rest of the time, you could rent it to other people who want to enjoy all the pleasures Cancun has to offer.  Think how quickly you can profit from your investment.  I can coordinate the management of your property from Canada using a local Cancun team.

If you would like to explore this opportunity a bit more with me, please feel free to contact me, Marcus Assalone Real Estate Saleperson for Coldwell Banker Terrequity, either by email or call me at 416 495-2362.

More information at http://mexico.marcus-assalone.com