This article appears in the April issue of Our House Magazine 

Looking back at predictions from 50 years ago of what a home would look like and be able to do today, it’s almost laughable. Back then, the home of the future would include rooftop pools that act as air conditioners and a garage for our airplane automobile that has folding wings. Fast forward 50 years from now and depending on where you live in the future, a garage for your car may not even be needed.
Dave Pedigo is the VP of Emerging Technologies with CEDIA, a North American association representing the home technology industry. In 50 years from now, he believes homes will be filled with artificial intelligence, doing things we could only dream of today. The home will know what you like and don’t, where you spend more time and adjust accordingly. Don’t like doing laundry? You might not be alive to see it, but your offspring probably won’t have to worry too much about the annoying chore. There will be one machine that washes, dries and folds all your laundry and a robot to put it away.
Pedigo also predicts the future home will know your health better than you, calculating when you’re on the path to a catastrophic event like a heart attack days before, all while calling emergency services when needed.
“It’s going to be an incredibly, incredibly intelligent home,” he told Our House Magazine. “It will make our lives a lot easier.” While some of that technology is a lifetime away, some of it is closer than you think.
Pedigo explained a couple years back, CEDIA had an opportunity to design and display a home of the future for an exhibition. The home included a concrete wall that will appear invisible. With a touch of a button, the wall will come alive giving you the opportunity to display anything, even the previous day’s weather if you wanted. That feature may only be 10 years away.
“I think in general the goal is to make the home more comfortable, more enjoyable and healthier,” Pedigo said. “By the time we get to 50 years from now, it’s going to be amazing.” Pedigo also noted new technology tends to start off being for the wealthy, but quickly expands to the masses at a much cheaper cost.
We know technology will be a big part of homes, but they still have to be constructed. And the bones of a home will also look very different in the future.
Larry Stadnick has been building custom homes in the Calgary area for decades under his company Corey Homes. He believes homes in the future will be sleek, smaller and very efficient. The builder also sees homes getting boxier, flatter and similar to the mid-century modern style.
The trend Stadnick noted is to build the shell of the home using the insulated concrete form (ISF) which makes the home more energy efficient, quieter and stronger in a natural disaster. The
ICF is basically a cinder block, surrounded by Styrofoam with concrete in the middle. About 30 per cent of new homes in Calgary use the ICF today with that number expected to grow to 40 per cent in the next five years, according to Stadnick.
“With ICF you can control everything, you have total control of the environment [in the home],” he said.
If you talk to anyone with a heritage home built about 100 years ago, they’ll swear the quality of the home is far superior to anything new. But Stadnick sees it very differently, arguing the traditional wood frame home “sucked”, adding their construction was dependent on the forest industry, and how they would react in the weather.
While the latest technology may improve the home in a number of ways, it’s not particularly cheap. And cost is partly why Stadnick also suggests homes in the future, especially single-family homes, will be much more expensive.
“I’d be buying one now if I was a young kid,” he said, adding the cost of material and available land will also continue to rise.
The insides of homes in the future will also be healthier.
The Calgary home builder noted the construction industry is already staying away from certain plastics and materials that can be toxic.
Meanwhile, the organization tasked with representing the residential construction industry in Canada is also looking toward the future.
David Foster, a spokesperson for the Canadian Home Builders’ Association, said his organization is working on new national building codes that will come into place in the 2030s.
He too sees a home that will be extremely energy efficient and safer to live.
The CHBA already has a program in place called Net Zero Housing, where the home generates as much energy as it consumes.
As for safety, Foster pointed out the number of residential fires has plummeted in recent decades and the trend will continue.
“We’re building homes that are more comfortable, healthier to live in, and that will just continue,” Foster said.
The single-family home could also be an endangered species 50 years from, especially in urban areas. With millions of people expected to flood the larger population centres, the CHBA, believes the majority of homes will be multi-unit developments near transit.
But back in Calgary, Stadnick jokes he won’t be around in 50 years to see the home of the future, although he’s confident they’ll be better than today and people will enjoy them just as much. “I’ve lived in more than 30 new homes and every one of them was exciting, and new and fresh and fun.”

Written by Jeremy Deutsch

Closing costs are a necessity when it comes to purchasing a home. They are not included in down payments, they are not included in monthly mortgage payments, nor are they included in the purchase price of a home, but you are still responsible for paying them, in full. Knowing they exist is half the battle, and correctly budgeting yourself to pay them when the time comes can be a huge weight off your shoulders, especially when the alternative is finding out a week before you close on the purchase of a home that you still owe thousands of dollars.

Lenders will require you to have 1.5% of a property’s purchase price available in cash to be able to cover closing costs. This amount is on top of the 5% minimum required for a down payment. Closing costs that you may be expected to pay, depending what province you live in, when purchasing a home in are as follows:

1. Appraisal- determining the value of a home.
2. Interest Adjustment- amount of interest due between your mortgage start date and the date the first mortgage payment is calculated from.
3. Property Transfer Tax- a tax paid to the provincial government when a property changes hands.
4. Legal Fees- costs associated with finalizing the sale or purchase of a property.
5. Prepaid Property Tax & Utility Adjustments- amount you will owe if the person selling you the home has prepaid any property taxes or utility bills.
6. Property Survey- legal description of the property you are purchasing including it’s location and dimension.
7. Sales Taxes- some properties are sales tax exempt (GST and/or PST), and some are not. Always ask before signing an offer.

As you can see, many factors go into determining the size of these costs. That is why it is also important to speak with a mortgage broker prior to making an offer on a home. Also, some costs may be exempt, such as the property transfer tax for first-time home buyers. Contact a Dominion Lending Centres mortgage professional to find out if you would qualify to have these costs covered.

Written by Ryan Oake

DISCLAIMER: This post is written for buyers, in other words people who do not currently own a tenanted property.
This post is not suggesting in any way that the rights of an existing tenant be infringed upon

Purchasing a residential property?

Two words that matter this Spring; Vacant Possession

Your contract had best contain a ‘Vacant Possession’ clause.

Why?

Mortgage lenders will not concern themselves with your best intentions; it is not about what will be – it is purely about what is.

And if the property is tenanted at the time of possession, then you are effectively applying for a rental mortgage. This means a minimum 20% down payment, higher interest rates, and far more stringent qualifying criteria.

‘But wait, we only have 5% down and we plan to give notice and move in 60 days after we take possession’

There is virtually no lender that will approve this under any circumstances, and this has to do with the recent changes made by our federal government. The lenders want to trust you, the lender wants to help you, the lender wants to approve you, but the new government guidelines eliminate lenders’ ability to be flexible. Lenders must answer to Big Brother, and Big Brother is very rigid.

Vacant Possession – demand it.

‘But wait, we’re buying the property as a rental anyway, so it’s a good thing that it already has a tenant… right?’

No, an existing tenant is rarely a good thing.

How is their lease written?
Does it protect you?
Are rents reflective of current market rents?
Is there a provision for annual rent increases?
Your costs will be increasing every year, cover yourself.
What is your duty for notice to evict the tenant?
Why is the seller refusing to give simple notice?

Don’t risk inheriting the seller’s errors and/or headaches.

Whether your new purchase is meant to be owner occupied, or an investment property, demand vacant possession or walk away.

If you have any questions, contact your local Dominion Lending Centres mortgage professional.

Written by Dustan Woodhouse

Recently one of the former members of the boy band New Kids on the Block expressed an interest in buying this lighthouse off the coast of Virginia in the U.S. Unique homes can be a lot of fun to own and to live in. However, there are some things you should be aware of before you make an offer on a unique property. He probably paid cash for this property because unique properties can be difficult to find financing for.

While we don’t have lighthouses in Western Canada, another type of property does come onto the market from time to time; church conversions.
I had a client last year who owned a church conversion in a small town in Saskatchewan. The building was great. It had lots of room, and it was on a large lot.

The problem was trying to find a lender who would lend on a church conversion. I found out that the big banks would lend but only in larger cities and towns. They would lend on homes in small towns in Saskatchewan and Alberta but not both. The only solution was to go to a local credit union that knew the property and the town.

Why won’t big banks do unique homes like this in smaller centres? Marketability – if the borrower doesn’t keep up their payments it would take months to find a buyer who wanted something like this and it would cost the bank a lot to keep the property until a buyer could be found.
Another lesson to be learned – before you make an offer on a unique property always check with your Dominion Lending Centres mortgage professoinal to see if you can get financing on your special home.

Written by David Cooke

People have a lot of different ideas on how they want their home to look. Some want a modern look while others like traditional cottages. But one thing that more and more people want is smart technology in their homes. This adds value and desirability to your home making it easier to sell for the asking price.

In a recent survey, 35% of first time home buyers put smart technology as a priority in their home purchase.
What is a smart home? A smart home is a residence that uses internet-connected devices to enable the remote monitoring and management of appliances and systems, such as lighting and heating.

Smart thermostat – Is a thermostat that can be controlled remotely by your smart phone and will eventually learn your heating and cooling patterns. You can turn up the A/C in the summer from your office and the house will be cool by the time you get home. These features are convenient but they also help you save money on home heating and cooling costs.

Connected Lights – allow you to turn on or dim lights at different times of the day. Combined with a Smart thermostat they can help you to save half your average energy costs.

Smart Locks – these are really cool ! You can program your front door to unlock when guests arrive using Bluetooth or WiFi or some smart phones.

Wireless Security – We have all seen photos of burglars stealing packages from the front door of a home , or perhaps you have seen the TV ad of the lady at the spa who can see 2 unsavory looking guys at her front door and speaking to them and scaring them off. You may have seen the YouTube video of a house that caught fire in Ft. MacMurray and the firefighters extinguishing the blaze. The home owners were able to watch this from a hotel room in Edmonton. Check with your insurance company, you may qualify for a large discount in your rates by having this home security.

Finally, not only is your home more desirable and comfortable, but this is achievable in both new and existing homes. Speak to your Dominion Lending Centres mortgage broker about having these additions to your home added to your mortgage either with a Purchase/Refinance Plus Improvements or a HELOC. They can advise you on the best options for your particular needs.

Written by David Cooke

Prepayment, Portability and Assumability

Prepayments

One of the most common questions we get is about mortgage prepayments. The conditions vary from lender to lender but the nice thing about prepayments is that you can pay a little more every year if you want to pay off your mortage faster. A great way to do this is through prepayments.

They’re always something to ask your broker about because each lender is very different. You can always do an increase on your payments and that means that you pay a little bit more each week or each month when you make your mortgage payment. You can also make a lump sum payment. Perhaps you get a bonus every year or you get a lot of Christmas money. You can just throw that on your mortgage. It goes right on the principle so you’re not paying interest on those extra funds. Paying a big chunk at once also means that a higher percentage of future payments will also go towards the principle.

Portability

Portability means that if you sell your house and you want to take your current mortgage and move it to your new house you can. The one thing about portability that we always have to keep in mind is that we can’t decrease the mortgage amount but we can do a little bit of an increase often through a second mortgage or an increase we call a blend and extend. It just gives you the flexibility of moving the mortgage from one property to the next property. It also gives you the flexibility of being in control of where you mortgage is going and not having to break your mortgage every time you decide to move.

Moving a mortgage to a new property avoids things like discharge fees, the legal cost of registering a new mortgage and the possibly of a higher interest rate. It’s great to be able to keep that rate for the full term rather than having to break and pay those penalties half way through.

Assumability

Assuming a mortgage comes into play more often where there are family ties. Say your parents have a mortgage and you move into that house. Rather than you going out and getting a new mortgage and your parents having to pay those discharge fees, you have the ability to assume their existing mortgage at that current rate. All you have to do is apply and make sure you can actually afford the mortgage at what they’re paying. You have to be able to be approved on the remaining balance on the mortgage just like you would on any other mortgage. Just because your parents have an eight hundred thousand dollar mortgage doesn’t mean you’ll be able to take that over.

If you have any questions, contact a Dominion Lending Centres mortgage specialist for help.

Written by Tracy Valko

Short Version:

The most important question a home-seller must ask their Broker or their banker this Spring:

‘Do I QUALIFY to port my mortgage?’

You must re-qualify to port your mortgage to a new property, and you must re-qualify under stringent new rules.

How stringent?

Long Version:

Let’s say you have impeccable credit, a $100,000 income, and bought a house with a basement suite last year – you may have a mortgage of ~ $675,000…which you qualified for in 2017.

In 2018, your new maximum mortgage amount is closer to ~$530,000.

And if rates were to move up another 0.50% you’d be capped at ~$490,000.

If rates were to move up a full percentage point ~$455,000

Either way, even with no further upward movement, the family in this example, were they to enter into a binding sale agreement without confirming their qualifications would not be able to re-enter the market at the same price point.

Key Point – Do not ask if your mortgage is ‘portable’ (99% are). Ask if you currently qualify to move your mortgage to a new property. This will require an actual application and full review.

Key Point – The federal government has created a dynamic in which qualifying rates have shifted radically, and more precisely the ground has shifted under tens of thousands of middle class Canadians feet. You have been protected from yourself, and you don’t even know it.

Key Point – Since Jan. 1, 2018, you’re subject to the new stress test. Even though you have impeccable credit, have never missed a payment, and even got a 3% raise last year – too bad.

Conclusion

Don’t list your home for sale without having something in writing from your current lender confirming that you QUALIFY to move your existing mortgage to a new property. If you have any questions, contact your local Dominion Lending Centres mortgage professional.

Written by Dustan Woodhouse

As property prices continue to rise across Canada, the conversation around “how to climb the property ladder” has made a subtle shift to “how to get on the property ladder in the first place.” Especially if you’re single.

Whereas before it was assumed anyone would qualify to buy a starter home (or condo), nowadays with increased housing prices and the government making it tougher to qualify for a mortgage through a financial stress test, becoming a homeowner isn’t a walk in the park. Qualifying for a mortgage on a single income is becoming increasingly difficult.

Unfortunately, just because you have a proven ability to pay rent on time doesn’t mean you will qualify to make mortgage payments in the same amount. So if you are looking to get into the housing market, but don’t qualify on your own, maybe you should consider co-ownership as an option!

So what is co-ownership anyway? Well, co-ownership is when more than one applicant takes on the financial responsibility of owning a property together. Co-ownership can take on many forms. Obviously owning a home with your spouse or life partner is the most common form of co-ownership, while having your parents co-sign on a mortgage is another. But for the sake of this article, let’s think past these arrangements.

Did you know that there are really no limitations with whom you can purchase a property? This is assuming they meet the lending criteria.
Maybe a brother, sister, cousin, neighbour, co-worker, friend, your mechanic, financial advisor, or some distant relative just happens to be looking to get into the housing market as well? There is a good chance that by combining your incomes together, you will qualify for a mortgage that neither of you would qualify on your own. Bringing someone else into the picture, or even a group of people, can significantly increase the amount you qualify to borrow on a mortgage. Most lenders will accept up to four applicants on a mortgage, while some lenders have even gone as far as launching products designed to make buying with friends and family easier. Buying a property with someone(s) in a co-ownership arrangement is becoming way more commonplace.

However, before making the decision to buy a house with someone, there is no doubt going to be a list of things you are going to want to work through. You will want to get everything out in the open and ask yourself questions like…

• Do I trust this person?
• Can I live with this person?
• Am I comfortable making decisions about the home with this person?
• How will conflict be managed when it arises?
• What happens if either party runs into financial trouble?
• What is the exit plan?

The more you work through ahead of time, the better chance you have at successfully co-owning a house with someone. A lot of people who purchase a property in a co-ownership agreement treat it like a business arrangement.
If you’d like to talk more about what this would look like for you personally, please don’t hesitate to contact a Dominion Lending Centres mortgage specialist. They can walk you through the process step by step and get you (and your partner in real estate) the best mortgage available to you!

Written by Kris Grasty

If you haven’t seen your credit score, you’re not alone.

Many of our clients don’t know about their credit score or even know what it is when we first meet with them. During our initial consultation, we go over your complete credit report with you. As an added bonus, we’ll even teach you how to read it.

So, how can you make sure you have a great credit score? Here are a few tips to get you started.

1. You need to have credit. It may be surprising – but your credit score goes up as more credit is available to you. We recommend at least two facilities: a credit card and a line of credit (or 2 credit cards).
2. You also have to pay your bills when they are due. That goes for your internet, cell phone and even parking tickets.
3. It also helps to start as soon as possible. The longer you have a clean record of paying your credit card, loans or other credit facilities, the better your credit becomes.
4. Finally, make sure to carry a low balance. One of the least known ways to hurt your credit is to have high utilization.

Don’t ever hesitate to contact a Dominion Lending Centres mortgage professional about your mortgage related needs when you’re buying a property anywhere in Canada.

Written by Eitan Pinsky

With changes to mortgage rules and interest rates on the rise here are some tips for your variable rate mortgage that could save you thousands.

Since 2009 the prime lending rate has shifted from a high of 6% down to 2% range remaining fairly level for the past few years before rising to a present day level of 3.45%. During that time, lenders have offered consumers high discount variable mortgage as low as 1.2% when rates were at their lowest, to current rates of 2.45 (depending on the lender and if the mortgage is insured or not).

Historically the choice of a variable rate mortgage over a fixed term has allowed borrowers to save in interest costs.

I always recommend if my clients can qualify and it makes sense for their specific situation to choose variable only if they will take full advantage of the lower rate. By setting their payment to the equivalent of the 5 year fixed rate at the time, the difference in payment goes directly to principal pay down.

Every 10% increase in payment shaves three years off the amortization of a five-year term so every bit extra matters and can make a difference.

If your mortgage is maturing in the next 90-180 days, it is time to talk to your Dominion Lending Centres mortgage professional for tips for your variable rate mortgage that could save you thousands.

You may feel the pressure to lock in to a fixed rate after the recent increases in the prime lending rate. For some this may be an option. However, I have the same advice every time someone asks me this question: It depends on your situation and we need to do a review. Take the extra time to review the current rate, remaining term of the mortgage, the new offer, how that will impact payments and your plans for staying in your home, moving and/or if this is an investment property.

For example Amy and Jake have a current balance of $300,000 on their mortgage with a variable rate at Prime minus .80% (2.65%). Current payments set at $703 bi-weekly. The mortgage matures in 24 months but they are considering to lock in for a new five-year term offered at 3.34%. New payments would be $739. They love their condo but not sure if they will stay or move in two years or not.

After a review of their mortgage we offer a second option. Keep the remaining variable rate mortgage in place for the remaining two years. Set payments at 3.34% or $739 bi-weekly.

They decide on this second option because:

• In 24 months the savings on interest is $4,000 and their outstanding balance is $4,000 less than by staying in the fixed rate
• They won’t be locked into a mortgage for another five years
• If they choose to sell before the maturity date, the penalty on a variable mortgage is only three months interest
• In two years they can either choose to stay with the same lender or move to another lender without penalty

With this strategy they don’t have to feel pressured into locking in today and they can continue to take advantage of the lower variable rate.

So if you are in a variable rate mortgage and not sure what to do. Remember my tips for your variable rate mortgage that could save you thousands.

Written by Pauline Tonkin