Are you thinking about selling your home in 2022? We saw huge increases in property prices throughout 2021 and with the trend of low inventory continuing we don’t expect to see that change in 2022. We’ve put together our top 3 New Year’s Resolutions to help you sell your property in the quickest time for the highest price.
Repair And Replace
When it comes time to sell your property it’s important to assess its condition. Check for any simple and cost effective repairs that can easily be carried out. Cracked drywall, damages to flooring, burned out lightbulbs, paint touch ups etc. Anything that could impact offers on your home. After those tasks have been completed, ask your For Sale On Georgian Bay agent to stop by and evaluate your home. Your agent will provide constructive criticism and offer suggestions on which renovation provide the best return on investment.
Receive A Proper Home Evaluation
It’s important to be informed – knowledge is power. Whether you’re thinking of selling right away, in 3-6 months or even at the end of the year, you should always stay up to date with what your property is worth. Don’t fall into the trap of online valuations or listening to what your friend’s house sold for. Ask your For Sale On Georgian Bay agent for a complimentary property evaluation. Keep in mind that a variety of factors may affect your home’s selling price, like lot size; landscaping and interior finishes; proximity to busy streets, public transit, schools and parks; or supply and demand in the marketplace. Your agent will reassess your home just prior to listing, to ensure you set the right price to attract serious buyers.
Declutter, Destress
A cluttered home can suggest lack of space, which can impact offers. Depending on lifestyle and length of time spent in the home, this can be a big undertaking. Take it step by step, room by room, and you’ll get through it. Be honest about what you want, need and love, and what you can do without. The bonus? You won’t have to pack, move and clutter your new home with stuff you don’t want.
Selling your home is a journey but with For Sale On Georgian Bay you have a Sherpa to help undertake all the heavy lifting for you. We’ll be with you every step of the way. Starting with these three New Year resolutions is a great way to start the process of selling your home in 2022.
The thing that is on all prospective home buyers’ minds before they start getting a mortgage is the down payment required to begin the process. According to Canadian regulations, you can not simply get a mortgage with no down payment amount towards the purchase price of the home.
This means you will need to save up at least some level of down payment before you are able to purchase real estate. Just how much you decide to, or are able to, save will depend on your own situation and the loan in question. This article will explain how minimum down payments work, how mortgage loan insurance affects how much you pay, and how much of a down payment is right for you.
Is a down payment a deposit?
A down payment should not be confused with a deposit. In terms of buying a home, a deposit is an amount of money that you have to provide to the seller along with your offer to buy a property. The purpose of this deposit is to prove that you are serious about buying and that you have the money to handle the related closing fees. Upon the sale of the home, you can put the deposit towards your down payment or towards the closing fees. Deposits are typically much smaller than down payments.
Your down payment is essentially the amount of the purchase price that you pay upfront. This means while it is not returned, it does get converted into an ownership stake in the property and its equity. Your down payment is important for your lender as they will have down payment requirements that determine your mortgage eligibility and rates.
Is there a minimum down payment?
There is a minimum amount of money you will be required to put down as a down payment. The amount of the minimum will depend on the purchase price of the property being acquired. Generally, the higher the purchase price, the higher the down payment percentage you will be required to pay.
Homes valued at $500,000 or less
For a home with a value of $500,000 or less, you will be required to put a minimum down payment of 5% of the purchase price.
Homes under $1 million
For a home with a value above $500,000 and up to $999,999, you will be required to pay a minimum down payment of 5% on the first $500,000 of the purchase price and then 10% on any amount above that. For example, if your home was valued at $750,000 and you wanted to make the minimum down payment, you would first pay 5% of $500,000, or $25,000, then you would pay 10% of $250,000, another $25,000. Your total minimum down payment would be $50,000, or about 6.6% of the total value.
Homes above $1 million
For a home with an assessed value above $1 million, the minimum down payment is a much steeper 20% of the value.
Remember, these are the legal minimums. That means that based on your own situation, the bank may require a larger down payment from you, but they will never allow you to pay lower than the minimum.
When you need to purchase mortgage default insurance
In order to protect Canadian mortgages from default, it’s required that for mortgages paying a down payment below 20% that the borrower also purchases mortgage default insurance, also known as mortgage loan insurance. Mortgage loan insurance offers no protection to you as the borrower but pays out to the lender in the event of you failing to meet payments. You may even be required to cover the costs of the payment going to the lender. Your lender may also require you to buy default insurance as a part of their mortgage terms, even with a down payment of 20% or more.
The price of your mortgage default insurance will depend on your loan to value ratio. The smaller your down payment, the higher the mortgage insurance premium will be. This can complicate the idea of a minimum down payment because though your down payment may be low, the effective amount of money you are paying is higher than that.
Example
For example, with CMHC insurance, a 5% down payment is required to purchase mortgage loan insurance at a rate of 4% of the total home value. In some provinces, you will also pay provincial sales tax on your insurance. That means your 5% down payment will actually cost you about 9%.
Luckily, mortgage insurance does not need to be paid in a lump sum (though that is an option). Instead, you can add it to your mortgage principal and pay it through your monthly mortgage payments. However, you will now pay interest on the value of your insurance, meaning more interest paid overtime, and possibly a higher monthly payment.
Your mortgage loan insurance payment, along with your mortgage rates, is why it is not always the best idea to go for the lowest possible down payment, as you can end up paying a lot more in the long run.
Is there a maximum down payment?
There is technically no maximum down payment you can put on a mortgage, in fact, you can buy a home outright if you wanted to. You should actually aim to pay as high as is realistic for you, as it will reduce the amount of debt you hold.
The thing is that for most people saving a sizable down payment takes long enough, and saving more money than needed is not really in your interest. Consider the cost of living while you are saving for a down payment. If you spend decades saving for a large down payment, you could have used a smaller down payment to secure a mortgage and pay into your home’s value instead of paying rent.
There are some cases where a larger down payment is beneficial, however, such as if you have a poor credit history and the lender is wary of giving you a loan.
What is the normal amount to put down on a house?
The average down payment that Canadians pay varies a lot by region, as home prices, household incomes, and market conditions, can all affect the amount one chooses to pay. The Canada real estate and housing market report from lowestrates.ca presents their recent findings from mortgage data in 5 of Canada’s provinces. Here’s what they found.
Canadians generally opt for high down payments
Generally, though there are options for lower payments, Canadians prefer to pay larger amounts whenever possible. In British Columbia, people paid the highest average down payment amount at 22.45%. Based on the average home price, that means a payment of almost $160,000.
Ontarians paid the second-highest average down payments at 20.35%. People from Nova Scotia paid 18.54% on average, while Alberta and Quebec paid 15.15% and 14.68% respectively.
How much should I put down?
Generally, the more you can put down the better. A higher down payment can reduce or eliminate the burden of mortgage default insurance. In addition, it will allow you to get better mortgage rates from your lender, and pay less on your monthly mortgage payment. Overall, you will save a lot of money if you are able to put up a large down payment.
If you aren’t able to save up such a large amount, or you are eager to get into your home as soon as possible, there is nothing wrong with paying a lower down payment. It is just important that you inform yourself of the impacts it will have on your mortgage and make sure it is financially worth it for you.
Use up your Christmas dinner leftovers to make our ultimate toastie with turkey, stuffing and homemade bubble and squeak. Plus, we share the greatest toastie secret you’ll ever learn…
How to make the perfect toastie
Putting mayonnaise, instead of butter, on the outside of the bread is the greatest toastie hack you’ll ever learn. It gets infinitely more crisp than butter
Ingredients
white bloomer bread 4 slices
mayonnaise 4 tbsp
cranberry sauce 6 tbsp
cooked turkey a few slices
cooked stuffing a few slices
brie 8 slices
coleslaw 4 tbsp
Bubble & Squeak
roast potatoes 6, finely chopped
cooked brussels sprouts 25g, finely chopped
roast parsnips 50g, finely chopped
roast carrots 50g, finely chopped
pigs in blankets 2, finely chopped
vegetable oil 2 tsp
Cooking Steps
STEP 1 Start by making the bubble and squeak. Put the roast potatoes, sprouts, parsnips, carrots and pigs in blankets in a bowl with the pickle and lots of seasoning. Mash with a potato masher until it starts to combine and the mixture holds together when squeezed. Form into two 10cm x 7cm patties. Heat ½ the vegetable oil in a frying pan and fry the patties for 2 minutes on each side until golden and crisp.
STEP 2 Put the bloomer slices onto a large chopping board and spread the outsides with mayonnaise. Spread 1 tbsp of cranberry sauce on the inside of each slice and divide the turkey and stuffing between 2 of the slices. Spoon the remaining cranberry sauce over the top of the bubble and squeak patties, followed by the brie slices. Put onto the sandwiches, followed by the beetroot and coleslaw, and top with the remaining 2 bloomer slices.
STEP 3 Wipe the frying pan clean with kitchen paper and heat the remaining tsp of oil, then wipe with kitchen paper. Fry the sandwiches, weighing them down with a clean pan, for 2-3 minutes on each side or until really golden and crisp. Cut in half and serve.
Let us know your favourite Christmas Dinner leftover recipe!
This month’s data showed a decline in sales year-over-year, down 17% compared to last November. However, the price of residential units sold continued to rise, now sitting at $836,147 which is a 39% rise compared to last year. This evidences that, the supply of homes still cannot keep pace with the demand right now.
Year over year we’re seeing a raise in Sale Prices of over 32% with the average sale clocking in at more than $787k. Active residential listings numbered 241 units on the market at the end of November, a considerable drop of 39% from the end of November 2020. Active listings haven’t been this low in the month of November in more than 25 years. Active listings were 68% below the five-year average.
As prices rise and the theme of low inventory continues, now is the time to take advantage of the market and achieve maximum price for your property.
Christmas is just around the corner and as we look back on 2021, we’ve seen another strong seller’s market. Focussing on November, across the region we saw 214 sales logged which was down 3.6% on this time last year and down 17% compared to 2019. After seeing a slight rise in October, active listings are down 22% compared to 2020. Inventory is still incredibly low – down more than 76% compared to pre pandemic numbers. This has continued the 2021 theme of low inventory. With less options on the market, we continue to see house prices rise as the new average house price sits at $798,340 – up around 17%. As we move towards the new year, buyers will become even more motivated so expect to see prices continue to rise.
Across our communities, we saw these trends continue. Midland’s average price rose 32% compared to last year whilst Tiny’s average price edged towards the $900k mark at $846k. With low competition, it’s still a great time to take advantage of the market and achieve maximum price for your property.
