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For my opinions on the local real estate market and lots of helpful tips for home buyers and sellers, please visit my blog. I value your feedback and your input, so please feel free to comment on my blog posts.

BC Home Sales Trending Toward Normal Activity

Vancouver, BC – May 12, 2022. The British Columbia Real Estate Association (BCREA) reports that a total of 8,939 residential unit sales were recorded by the Multiple Listing Service® (MLS® ) in April 2022, a decrease of 34.9 per cent from a record April 2021. The average MLS® residential price in BC was $1.065 million, a 12.9 per cent increase from $943,765 recorded in April 2021. Total sales dollar volume was $9.5 billion, a 26.5 per cent decline from the same time last year.



“Canadian mortgages have sharply increased, surpassing 4 per cent for the first time in a decade,” said BCREA Chief Economist Brendon Ogmundson. “With interest rates rising, demand across BC is now on a path to normalizing. However, given existing levels of supply, markets conditions remain tight.”

Provincial active listings were 7.5 per cent lower than this time last year, though listings are starting to accumulate in some markets as demand fades. However, it will likely take a year or more for the supply of listings to return to balanced market levels.

Year-to-date, BC residential sales dollar volume was down 10.7 per cent to $38.4 billion, compared with the same period in 2021. Residential unit sales were down 24.2 per cent to 35,618 units, while the average MLS® residential price was up 17.8 per cent to $1.078 million. 

Source: BCREA

Best Ways To Finance Renovations




















Upon deciding to upgrade your home, whether you’re planning to stay there or sell, the topic of money arises quickly. It’s well known that home renovations can be costly. Sure, some small upgrades such as new light fixtures, faucets and paint don’t typically cost a whole lot of money, but remodels are known to snowball and the costs can add up quickly.

Here are 8 of the best ways to finance major home renovations to help you forge ahead, with confidence that you’ll have the financial means to make your vision a reality!

1. Home Equity Line of Credit
When buying a home, most people apply for a mortgage. Your home equity is the portion of your home that you have already paid off.
As long as interest rates remain low, as they currently are, tapping into your home equity to take out a Home Equity Line of Credit (HELOC) can be a great way to fund a renovation. With a HELOC, you can use as little or as much as you need, paying back only what you use, at a rate that is lower than those of credit cards or personal loans.

2. Refinance Your Mortgage
Refinancing your mortgage is another viable option to pay for a costly home renovation. Simply put, refinancing your mortgage means adding to the amount of money you originally borrowed to purchase your home. This new mortgage amount is rolled into the current balance on your mortgage.
When you refinance your mortgage, you get a set amount of money at a set interest rate; therefore, it isn’t possible to spend more than you have, and the payments will remain consistent and affordable.

3.Unsecured Line of Credit
If the first two options are not available to you, it may be worth looking into an unsecured line of credit. Anyone can apply for an unsecured personal loan or personal line of credit through a financial institution.
A line of credit starts out with a set amount of money you can charge against it, and as you pay it back, you can repay the gap funds. However, the downside of this option is the high interest rates. Personal lines of credit will always have far higher interest rates than a mortgage because there is nothing securing it. 

4. Take Out a Second Mortgage
Instead of refinancing a mortgage or using equity, some people choose to take out a second mortgage to pay for home renovations. This option will provide you with the instant cash you need to complete your project, at a lower interest rate than a personal line of credit or credit card, however it can leave you with double the mortgage payments.

5. Credit Card
Not the best option available, due to the high interest rates involved, but using a credit card to finance major home renovations is always an option.
Typically, credit cards have an interest rate of 19.99% interest rate or higher – meaning that you will be paying a hefty fee on any residual charges you haven’t paid off come month end.

6. Loan from Family or Friends
While not available to everyone, another viable option is borrowing from family or friends. It’s common knowledge that borrowing money can complicate a relationship, but this option comes with the ability to specify repayment terms with the person you are borrowing from, and eliminates the need to use a bank or other financial institution.

7. Save and Pay as You Go
If you aren’t in a time crunch to get the renovations done, you can always save and pay as you go. This will inevitably slow down the remodel process, however, it is one of the only ways to ensure that you don’t get overburdened by interest fees on your renovation spend.

8. Use your Savings
The final way to pay for home remodels without borrowing funds from another entity is to simply use your savings. This is a good option for those who want to get the renovations done as quickly as possible, and don’t want to be stuck owing money once they are completed.

Take Your Time Before Committing

Now that we’ve reviewed 8 of the best ways to finance major home renovations, it is important to consider other factors such as purpose, time and your personal preference for financing. As you review your options, remember that there is no right choice, but there will be a best-fit option for your needs. A financial consultant can be a great resource in helping you choose your best route for financing.

Sources:
Blog.remax.ca
Canadian Mortgages Inc
Money Sense

5 Reasons Why You Should Get Pre-Approved for a Mortgage

Buying a home for the first time is an exciting experience. One of the most significant ways to limit unnecessary anxiety is to get pre-approved for a mortgage before you begin your house-hunting adventure.
To put it simply, being pre-approved for a mortgage means that a lender says you have qualified to borrow a specific amount of money for the purchase of a home. Pre-approval is based on various factors, and the process involves several different steps.
As the borrower, you can shop around for mortgages and compare options from different lenders. Throughout this process, you will learn the maximum amount of mortgage you qualify for and the estimated mortgage payments on the amount borrowed, while locking in an interest rate for up to 130 days from the date of the pre-approval.
On the lender side of the process, they will look at your financial circumstances including your income-to-debt ratio, credit score and financial history. The lender uses all these factors to assess your borrowing risk and determine the amount of mortgage, interest rate and terms you’ll qualify for. It is important to note that the mortgage pre-approval process does not guarantee you will be approved for a mortgage.

5 Reasons to Get Pre-Approved for a Mortgage Before You Begin Your Home Hunt
1. You’ll Have an Idea of How Much Money You Have to Work With 
Buying a home is a significant investment of your money and time. This time investment only increases as competition in the housing market rises. This is precisely why having a mortgage pre-approval is essential before starting your search. By beginning the process with the knowledge of just how much money you can spend, you can keep your search realistic and give your real estate agent an appropriate price range.
Being well prepared with realistic expectations and a clear price range will save you time, eliminating homes that are out of your reach financially. You’ll also be able to give your real estate agent the information they need to find you a home that fits both your desired specifications and your budget.

2. Your Scope of Search Will be Narrowed
Knowing how much mortgage you can afford will narrow your search considerably. It will also give you a more realistic idea of what the market has for you. Perhaps the home of your dreams isn’t in the cards just yet based on your pre-approval, but maybe you can afford to buy a home that you can renovate and put back on the market at a higher price in a few years.
Being aware of your buying power before starting your hunt will cross any homes you cannot afford off your list.

3. You Become a More Competitive Buyer
In some areas, you could be competing for the same home with dozens of other potential buyers. Time is of the essence when the market is hot, and competitiveness is high. During the time it would take you to ask a lender if you can afford a home, that home will be snatched up by another buyer who already has their pre-approval in hand.
 
4. You Become a More Desirable Buyer
When the market is tight, and there are competing offers on a home, the prospective buyer who makes a firm offer is more likely to win over someone who doesn’t.
 
5. It May Shorten Your Closing Period 
The closing process on the house starts with securing financing for the home. The process itself can take almost two months from start to finish. By already having your financing pre-approved, you can move on to the next step in the closing process.
As you begin your journey on purchasing either your first or your next home, getting pre-approved for a mortgage should be your first step to make the home buying process smoother.
 
Source: RE/MAX Blog