How to avoid owning Two Homes

When your sale closes after your purchase

• to get the best price for your home often you have to compromise and choose dates that may not match
• this means you need to leverage the equity in your home, for the required time between the purchase and sale to fund your down payment into your new home

Example of Bridge Financing

Sold $ 270,000 Purchase $ 450,000

less deposit w/offer $ 15,000

Real estate commission New Mortgage $ 335,000

13% HST Real estate commission

Mortgage balance legal fees on sale and purchase

Equity $ 100,000 Funds to close $ 100,000

SALE closes May 31 PURCHASE closes April 28

BRIDGE FINANCE of $100,000 for 33 days for $750 estimated fee

How can a secured credit line save me money?

• in our previous example some lenders will allow you to register up to 80% of the purchase price.. Let’s say $360,000
• known as a “Collateral Mortgage”, this additional $25,000 could be used as a secured credit line towards your down payment
• Reduces Bridge loan to $75,000 & cost down to approximately $540
• Saving you $210
• Credit line paid to ZERO from the proceeds of the sale in 33 days
• The credit line is available when needed always at a preferred rate
• This allows greater flexibility and reduces interest costs for you

What if you sell before you buy?

• There are still some situations where this happens. Owner is motivated and grabs your offer!
• This means you will have to pay out your mortgage and any penalty, as there will be a shortfall .. until your move in date.
• Most lenders will reimburse the penalty, if you have a move in date within 90 days of your sale & come back with the same terms; conditions to the mortgage

What if you want to keep your property and rent it ... instead?

• If you have considerable equity, you may want to rent out your property as an investment
• Your home can be re-financed to where the rent will carry the mortgage payment, condominium fees and property taxes.
• You could then buy, your new home with less down payment.
• You can always sell your investment at a later date to maximize your sale price.
• Having a plan for your mortgage is key

We give you a Firm Approval

We are able to approve the bridge financing as well as your mortgage at the same time.

This combined approval is unique in Toronto

Peace of Mind & no surprises for you

Things can change quickly between the time you buy, until you move in to your new home.

• … Job change, need credit for new appliances
• … Many lenders pull a second credit bureau, verify your employment or even leave the appraisal till a week before closing date

Ready to get Started?

Contact Lindsay Doke RBC Financial Trusted Mortgage Advisor 416 464 6423

Do you rent or Do you Buy?

Will you rent or will you buy?

Interest rates on savings at your Bank? 1 - 1.5% annually

Average rental on a two bedroom with den Two full bath? $1,800

With the interest rates hovering around 3.89 - 4.09 % five year fixed; yes we would all like to have the variable at 2.35% .

Expected rate of annual value increase? I would use 4%

Try it and tell me. How did your model work?

Lets get you started.

We are all afraid of...

Yes the neighbour from Hell!

Who lives next door; How do they keep their place? How will we get along? This is a fun although sad vignette that I found in MacLeans

The builder tells a different story: “[The client] spent more than he intended; he asked for things that weren’t part of the contract, and he manufactured deficiencies.” The matter went to court, resulting in suits and countersuits; issues remain before the courts, which is why none of the parties agreed to be named. A few months into the fight, witnesses report, the businessman turned into a neighbourhood building-code vigilante, calling in inspectors to check other houses the builder had constructed in the area, even reporting hedges that were mere inches higher than code allowed. “He would get up at 6 a.m. every morning to move his car three houses to block access to a building site,” the builder claims. The businessman counters that the builder blocked his car and spewed obscenities one morning when he was driving his children to school.

When the businessman saw the builder’s name associated with the annual fair for the local school, which his children attended, he threatened to pull his own sponsorship. “He told the principal, ‘I’ll bury you in policy,’ ” says a neighbour. The businessman says he reviewed the school bylaws and noticed the school was in flagrant violation of many of them. One casualty was a lottery for the daycare centre, which was shut down for lack of a proper licence. “They lost 40 per cent of their funding,” says his neighbour. He even tried to ban cotton candy at the fair because it didn’t comply with the school’s healthy-eating policy. “The nitpicking was unbelievable,” says one resident. “He could have cured cancer with the time he put into creating problems in the community.” The businessman’s vigilance “created total paranoia,” says a neighbour, so much so residents were afraid he’d report their annual Canada Day fireworks display, which didn’t have a licence.

http://www2.macleans.ca/2011/01/21/the-next-door-neighbour-from-hell/

You really need to read the rest of the story to find the dedication and effort this neighbour placed in Getting the other Guy!

Do you have a neighbour from hell story?

Tell me about it....