Are you preparing to purchase a home?  Many people make 3 common mistakes right before applying for a mortgage.  In this video, we define these mistakes and give you tips on how to avoid them.  By avoiding these mistakes, you will make your home buying process smoother and your mortgage application stronger!

Don’t have cash for a down payment?  Don’t worry…if you have RRSP’s and you are wanting to purchase your first home…the Canadian Government has a program designed especially for you!  Watch the video below to learn how to use your RRSP’s to help purchase your first home.

This episode of the Mortgage Minute begins to decode the language used when applying for your mortgage.  Knowing “mortgage” language gives you a leg up when trying to understand your mortgage and how to personalize your mortgage to your situation.  This video explains the difference between amortization and term as it applies to your mortgage!

There is still a lot of confusion around the eligibility for the Federal Home Renovation Tax Credit.  At this time, the credit has not been legislated in the Income Tax Act, nor has draft legislation been released, but  some information is available on the Federal website.  A recap of eligible and ineligible expenses are listed below.

Canadian Homeowners can claim a 15% non-refundable tax credit for the eligible expenditures exceeding $1000, but not more than $10,000 which works out to a maximum credit of $1,350 which can be claimed on 2009 tax returns.

ELIGIBLE EXPENSES:

• Windows/Doors
• Flooring
• Furnace, boiler, woodstove, fireplace, water heater, oil tank
• Ventilation systems
• Central Air
• Reverse osmosis systems
• septic system
• well upgrades
• electrical wiring
• security systems
• solar systems
• painting
• building of additions, sheds, garages, decks
• roofing
• driveway resurfacing
• exterior shutters/awnings
• permanent installation of pools or hot tubs
• pool resurfacing
• solar heaters/heat pumps for pools
• landscaping – sod, perennials, trees, rock, lighting, water features, retaining walls
• interior fixtures – blinds, shades, shutters, lighting, fans
• kitchen, bathroom, basement renovation
• labor expenses for all of the above

INELIGIBLE EXPENSES

• furniture, appliances, AV
• tools
• cleaning/maintenance
• maintenance contracts
• financing costs

In order to be eligible for the tax credit, the work must be completed between January 27th, 2009 and February 1, 2010 and claimed on your 2009 tax return.  For more information visit the CRA website at http://www.cra-arc.gc.ca

This has left thousands of people wondering how they will financing the repairs to their condos, if and when they are necessary.  With many, many buildings still not assessed for damages, the cancellation of the Reconstruction-loan program may lead to thousands of condo-owners needing financing for home repairs.

Although there are still options the standard financing options for people who can qualify for standard home loans, the people this strands are those that cannot qualify for conventional loans.  Especially with the falling property appraisal values, many people do not have the equity in their home to draw from.  Compound that with the tight economy and many job losses, many people are having difficulty qualifying for loans.  Hence, the need for the government-assisted, interest-free reconstruction-loan program.

Think for a minute about those who will receive an assessment of repair for $50,000 (although many repair bills come in as high as $80,000 per unit) without any idea where the funds are going to come from.  Unfortunately, many experts foresee a large number of these units going into foreclosure with their owners declaring bankruptcy because of a lack of funding options.

If you are in this position, information and action is key. There may be options still available.  Please consult your financial institution or mortgage advisor for possible options and information.

The largest recovery was experienced by White Rock/South Surrey (6.5% increase in sales over May of 2009); however, this segment also experienced the smallest decline (5.2%) over the previous year.  The only two market segments that are still experiencing sale declines are Surrey (-0.3% from May 2009 to June 2009) and Mission (-2.6% from May 2009 to June 2009).

This increase in sales is a promising light at the end of a year long downward tunnel that Real Estate Sales have experienced in Greater Vancouver and the Fraser Valley.  Much of the increase in sales can be attributed to low interest rates, a slight rebound in the stock market, and a lack of product on the market.

Activity in the month of June marked the fifth consecutive month of rising sales and the highest level of activity since January 2008, on a seasonally adjusted basis.

“Housing markets around BC continued to post higher sales in June, fuelled by attractive mortgage rates and lower prices,” said Bryan Yu, BCREA Economist.

“The larger urban regions of Greater Vancouver and Victoria exhibited balanced market conditions in June, while others have recorded improved market stability. Stronger demand and a decline in home listings are stabilizing home prices in many BC markets.”

Year-to-date, MLS® residential sales dollar volume was down 20 per cent to $16.3 billion over the same period last year. A total of 36,329 units were sold in the first six months of 2009, down 15 per cent from 2008, while the average MLS® price declined 5 per cent to $448,381.

Most Canadian homeowners are not only unaware they’re eligible for a federal tax credit, but they’re probably already spending money they could be claiming on their next return, a recent study has shown.

The Home Renovation Tax Credit was announced in January’s federal budget as an incentive to boost spending and stimulate the economy. Canadians renovating their homes and cottages can claim between $1,000 and $10,000 per family and receive a 15 per cent credit on their tax return.

“People are not used to this kind of credit, where it’s so encompassing that they’re missing out,” says Doug Northrup, master tax specialist at H&R Block in Moncton. “They don’t understand exactly what it is or how extensive it can be.

“It covers things like kitchens and bathrooms, windows and doors, but it can also do things like putting in a new well or home-security system, putting a new driveway in or doing some landscaping as well.”

A recent Angus Reid poll showed most people do not realize the full scope of the credit. Most Atlantic Canadians scored lower than 50 per cent on a quiz of what projects qualify and 95 per cent said they knew “little or nothing” about the program.

Robert Hunter, president of Avalon Developments renovation and contracting company, says the main thing stopping people from taking advantage of the program is concern about the economy.

“I think it’s been well-communicated,” he said. “I think they’re maybe a little more hesitant with their dollars. After all, you do have to spend a lot of money to get anything back.

“If I were to guess, I’d say people would probably take advantage of it a little later on (in the summer). Maybe it will pick up when they see the economy has stabilized or if they get some more positive news. It’s hard to read.”

Northrup says the program includes several simple improvements around the house that many people don’t expect to be able to claim.

“It’s not something you have to have a contractor come in and do. You can turn around and do it yourself, you just have to have all your receipts,” Northrup says, adding Revenue Canada’s website contains information detailing what work qualifies, as well as forms to help people file their returns.

For example, a fresh coat of paint on the inside or outside of the house, building a new deck or even planting new perennial flowers and shrubs are all do-it-yourself projects that qualify for the credit.

“I’m sure 90 per cent of the people who go to garden centres and buy perennials have no idea to keep the receipts for those,” Northrup says.

“When people think home renovations, they don’t think it extends to the garden as well.”

In addition, projects that also qualify under the government’s energy efficiency retrofit plan can be claimed twice.
Northrup noted, however, that some things don’t qualify, such as furniture, tools or cleaning up from construction.

“Other than that, there’s not much on the list that isn’t eligible,” he says.

In order to qualify for the credit, work must be paid for before Feb. 1, 2010.

The Angus Reid Strategies poll was conducted from June 5 to 11, 2009. It surveyed 1,398 randomly selected Canadian homeowners, with a margin of error of plus or minus 2.6 per cent, 19 times out of 20.

*This article was featured in the Times & Transcript and from Rita Singh, First National

According to John Bordignon, Executive VP of Strategic Development with MERIX, there isn’t a lot of changes expected in mortgage rates in the near future. While the economy is recovering, it isn’t recovering as fast as initially expected.

In order for the economy to continue to recover, a number of factors need to improve, including :

• A decrease in unemployment rates and job-loss statistics
• A stabilization in oil prices
• The TSX is still fairly volatile, and needs to stabilize
• Stabilization of oil and other commodities at a price that will stimulate the economy
• Overall world economic stabilization

However signs of stability in Canada’s economy are evident in the bond and rate markets:

• Bond yields have improved over the last month
• The yields and spreads are now within the “comfort zone” of 1.8 to 2.0%.  The banks are comfortable with the spreads and will likely not change rates unless the spreads rise above 2.0%.
• Variable rate mortgages are settling in at between Prime +35 and +45

For all intents and purposes, we are on the road to recovery, how quickly we will actually get there and what the long-term consequences for the last 8-10 months will be is yet to be known.