Sep 12 | 2017

5 Terms Every Property Owner Should Know When Refinancing

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Whether 5 Terms Every Property Owner Should Know When Refinancingyou’re looking for more cash flow, want to lock in a good interest rate or just change the terms of your loan, you may be considering refinancing your home. One thing to keep in mind is that unless you’re already at the end of your loan term, there will likely be additional costs involved in the process. Before you move forward, make sure you’ve done all the calculations to check if the penalties and fees make the refinance worthwhile.

Once you’ve decided that refinancing is the best choice for you, it’s time to sit down with your mortgage broker or financial institution and go over your options. To prepare for your meeting, it’s important for you to understand the following terms and how they will affect you*:

1. Amortization period: This is the number of years it will take to pay off your new mortgage. While amortization periods can go up to 35 years, you should remember that even though your monthly payments are lower with a longer period, you’re paying more interest in the long run. It’s important to pay attention to this because if the Bank of Canada increases their rate, your lender may increase your amortization period in order to accommodate it.  Amortization period is often confused with the term of your loan, which is the period in which you commit to the interest rate and other conditions related to your mortgage with a specific lender – usually for about 5 years.

2. Debt-to-income ratio: To determine what products and services you may qualify for, a lender will check your debt-to-income ratio. This figure calculates your monthly expenses versus your monthly income and the resulting percentage is your ratio. It tells the lender how much more debt you can afford to take on. If you have a low debt-to-income ratio, you’re less of a risk to the lender.

3. Loan-to-value (LTV) ratio: This percentage refers to the amount of the mortgage divided by the value of the home. The maximum LTV ratio that lenders require to qualify for a mortgage/refinance is usually 80%. It determines whether you or your lender will need extra protection like mortgage insurance.

4. Portability: If you’re planning to move before your mortgage is fully paid off or you’re just not sure how much longer you’ll be staying, look out for the portability feature of your mortgage. It allows you to move your mortgage with the same interest rate and conditions to a new property with no penalty.

5. Prepayment penalties: With any mortgage, you will likely face a penalty if you pay it off before the term is up. It varies between lenders and depends on whether you have a fixed or variable rate. For instance, the penalty may be 3 months interest on a variable rate term but might be higher for a fixed term.  It’s important to find out the prepayment penalties before choosing a lender as some may have stricter rules and higher costs that make it harder to pay off.

Refinancing your home is not as simple as finding the best interest rate. The lowest rate doesn’t necessarily mean that you’re getting the best product. It’s important to evaluate all the other conditions that come with your new mortgage carefully before making a decision.

If you have questions about refinancing, you can always talk to your mortgage broker or lender.

*This is meant to provide a general overview only. Speak to your lending professional for more information.

 

Jun 16 | 2017

Title Insurance: What Every Homeowner Needs to Know

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Title Insurance: What every homeowner needs to knowYou combed through websites, apps, maybe even the papers and visited dozens of places until finally! You found the perfect house! Your biggest achievement, your biggest asset – how do you keep it safe? Or like in this case, how can you even make sure that it’s all yours?

Before you purchased your home, the property may have changed hands several times leaving room for mistakes like an incorrect survey, a non-existent permit or title-related issues. Even with a new build, somewhere along the way there may have been an error that could affect your ability to sell, mortgage, or lease your property in the future. These are the types of things that a title insurance policy can protect you against.

What exactly is title insurance?

Title insurance is a unique form of insurance. Unlike home insurance where you are insuring the structure and contents, title insurance protects you, the homeowner, against losses related to the title (ownership) and other defects relating to your property. Plus, it may cover fixing issues or legally defending your ownership, which can be very costly and stressful.

Do you automatically get a title insurance policy when you purchase property?

It’s a common misconception that homeowners automatically get a residential title insurance policy when buying property. While a lender policy is required on every purchase, a homeowner policy is not. It’s up to you to make sure that you have the protection available to you through title insurance.

Does the lender or loan policy cover you?

No, a lender aka loan policy covers lenders only  and protects their interests when it comes to priority and enforceability of your mortgage, title and survey defects, municipal issues and title fraud.

What does a homeowner title insurance policy cover?

A typical title insurance policy covers common issues that may have happened both before and after you’ve purchased your home. This is sometimes referred to as pre- and post-policy because the day you take ownership of your home is generally also the effective date of the policy.

The main areas of coverage in the Homeowner Policy are:

  • Fraud — a person fraudulently transfers your property without your knowledge or consent.
  • Forgery — someone forges your signature on a registered document, which allows them to sell or mortgage your property.
  • Encroachments — if a structure built by a previous owner sits outside the property’s boundaries or if a neighbour builds a structure that is partially on your property after you purchase your policy.
  • Lack of building permits — if a previous owner completed work to your property without the required building permits, you could be forced by your municipality to remove or fix the structure.
  • Duty to defend — if you have to protect and restore your title as a result of a covered title risk, FCT will pay for the legal fees and costs associated with it.

How much does a policy cost?

  • For a low one-time premium, you can ensure that you have the protection you need for as long as you own your home. Your lawyer can provide you with a quote within minutes.

Don’t put yourself at risk. For a free quote, visit fct.ca today!

This is provided as general information only. For further details regarding coverage, please review your policy.

 

Jun 9 | 2017

What Can Buyers do to Avoid Surprises and Delays in Closing?

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Tips for closing successfullyWith rising prices and stricter controls on mortgages, housing affordability is getting more challenging. And once you finally obtain funding (after squeezing out every last drop of your savings for a down payment), it’s still not a done deal till the closing date. A number of unexpected issues can come up that may kill or delay a deal.

Here’s a checklist that will help you get to the finish line successfully:

  • Don’t start spending big – Now that you’ve secured funding for your house, you might think that it’s time to start buying furniture for your new home. Try not to spend large sums of money, whether cash or credit, as it will affect your standing with the lender. Your financial status will be checked a few days prior to closing and any major changes from your initial evaluation will need to be reassessed to ensure you still have the ability to pay off your mortgage.
  • Be wary of changing jobs – While it might seem like a great idea to take a higher paying job before your closing date, it may affect your lender’s decision to close as scheduled. They may want a few months of pay stubs from your new position to prove that you have stable income. While it may not be a deal breaker for your lender, it may delay the closing date.
  • Provide documents on time – Your closing date can be anywhere from 30-90 days after signing the agreement of purchase and sale. You do have some time to provide your mortgage broker and lawyer with the documents that they require, but don’t delay! The sooner you provide all the paperwork necessary, the sooner your team will be able to handle any unexpected findings or issues that may arise.
  • Try not to skip the home inspection – With the hot market and multiple offer scenarios nowadays, a lot of homes are being sold without conditions. While presenting a clean offer may win you the home of your dreams, it can also end up costing you more than you expected. When you’re mortgaged to the max, you can’t afford costly surprises like leaks or repairs that you come across when you finally move in.
  • Keep extra funds on hand – Buyers often put as much money as they can into their down payment. However, you should always keep extra money on hand to prepare for closing costs like land transfer fees, legal fees and any bills the sellers may have prepaid, such as property taxes or utilities. You may also need to put down a larger down payment if the lender appraisal values your house at a significantly lower price than you paid for it.
  • Don’t forget the title insurance – Make sure you’re protected by asking your lawyer to purchase title insurance for you. It not only allows you to close fast even in the absence of a survey and provides gap coverage, but it also protects you from paying any liens or debts the previous owners left behind.

Have you encountered unexpected issues before closing? Share your stories in the comment section below!

May 24 | 2017

8 Tips for Selling your Home

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8 tips for selling your homeCompetition can be fierce in the real estate business, especially in these uncertain times. One day it’s a seller’s market and the next it’s not. So how do you make sure your home stands out in the marketplace?

While there are a lot of factors beyond a homeowner’s control—such as market conditions and regulatory environment— there are certain things a homeowner can do to maximize opportunity and profit.

Here is a quick list to help you make the most of your selling experience before you even put your home up for sale.

  1. Ask yourself the important questions – Is now the best time to sell from both a personal and a marketability perspective? How much do I want/need to get in terms of a selling price?
  2. Prepare yourself to have people in your home. Potential buyers will scrutinize your living space and you should be ready for the feedback.
  3. Put yourself in the buyer’s shoes and do a thorough walkthrough, critiquing your home from their perspective. Making a few small touch-ups and repairs can make a big impression.
  4. Clean, de-clutter and de-personalize your home so that prospective buyers can envision living in the space. For a complete listing of areas to consider when making your home look its best, click here.
  5. Gather paperwork such as utility and tax bills, warranties, property surveys and permits that will answer any questions for a prospective buyer.
  6. Maximize curb appeal to create a powerful first impression. Here are some good ideas to make your home more inviting, as suggested by MoneyTalksNews.com.
  7. Interview several realtors before selecting one to represent you. It is important to choose one that specializes in your area and type of home; one that has a solid reputation and valid credentials.
  8. Consider using the Certified Resale Home service – a pre-listing home inspection backed by an 18-month transferrable warranty to help your home stand out. By understanding what repairs your home needs, you can get in front of potential conditions that can delay or kill a deal. Visit thecertifiedresalehome.ca for more information on how to put FCT’s innovative service offering to work for you.

Do you have any other tips to share?  Please comment below!

 

Apr 19 | 2017

How can you Mitigate Real Estate Fraud?

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real estate fraudMortgage fraud has quickly become the fastest growing crime in North America, most often affecting the institutions that lend money to individuals purchasing property.

The most common form of mortgage fraud involves fraudsters who acquire property and then artificially increase its value through a series of sales between themselves and an accomplice. A mortgage is then secured on the property based on the falsely inflated price.

FCT is dedicated to helping our valued lending partners protect themselves against losses inflicted by fraudsters. Since 2012, FCT has identified more than $401 million in suspicious mortgage transactions. A title insurance lender policy from FCT provides the ultimate protection and allows a financial institution:

  • the ability to protect its financial interests
  • to safeguard its reputation and business by easily mitigating risk associated with claims

We have created a list of fraud flags and tips to help you mitigate your risk of becoming a victim of mortgage fraud. Whether you are a bank branch lender, credit union lender, a mortgage broker or a mortgage specialist, these tips can help inform you of what to look for when processing a mortgage transaction.

For more information about how to protect you and your customers against mortgage fraud, please visit www.fct.ca or contact your dedicated Business Development Manager.

Apr 5 | 2017

Introducing a Better Way to Sell Homes

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17-119_SM_CRH_BlogPost_03-17_2XCertified Resale Home launches in Ontario

Owning a home is the largest financial commitment most Canadians will make, so it’s understandable that both the buyer and the seller will approach a transaction with caution. In an effort to alleviate some of the stress involved, FCT partnered with AmeriSpec Inspection Services to create Certified Resale Home (CRH).

CRH is a simple, cost-effective way to differentiate your listing in the market and reduce anxiety for the seller and the buyer. It includes a pre-listing home inspection combined with a $20,000 18-month warranty* on key components of the home, such as the cooling and heating systems, roof and foundation. The inspection provides an impartial, honest and expert assessment of the home backed by a warranty on items that are considered ‘blind spots’ for a home inspector.

After spending a number of years testing the waters and gathering key customer feedback, we are proud to launch Certified Resale Home throughout Ontario. This service leverages FCT’s core competencies of process optimization, risk management and customer experience.

In today’s hot market, when buyers are going in with no conditions, you might be wondering why this product is even relevant.

Here’s how it helps all parties:

Realtors:

  • Provides a superior full-service listing experience
  • Enhances client satisfaction and generates referrals
  • Offers a proactive approach to handling issues for the client
  • Closes listings faster

Sellers:

  • Gets the best possible offers faster
  • Provides detailed information on the home before listing to avoid surprises that can kill the deal
  • Differentiates the property to make it stand out
  • Removes the probability of a condition of sale

Buyers:

  • Reduces anxiety and promotes a cleaner offer
  • Reduces the “Buyer Beware” mentality
  • Builds trust by offering information through two leading brands – FCT and AmeriSpec Inspection Services
  • Optimized for a multiple offer scenario

For more information on our brand new offering, visit thecertifiedresalehome.ca

*Assumes standard inspection and warranty coverage. Optional swimming pool equipment coverage is an additional $30; optional septic tank system coverage is an additional $20. The warranty commences the day of the inspection, applies during the listing and transfers automatically to the buyer on closing.

Warranty Services by First Canadian Title Company Limited
® Registered Trademark of AmeriSpec Inspection Services.

Mar 7 | 2017

What You Need to Know About Real Estate Fraud

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Real estate and legal professionals need to stay vigilant as criminals are getting craftier with real estate fraud today. We take fraud seriously at FCT and strive to combat it at every step in the process. We have a certified fraud examiner on staff specializing in early detection and protection. We also underwrite for it in our policies, and we defend our clients who fall victim to it.

March is fraud prevention month, so we’ve included a round-up of the real-estate scams to look out for:

  • Title fraud and forgery: The ownership or title of a property is fraudulently changed or documents are forged to allow a fraudster to illegally sell or refinance the property.
  • Mortgage fraud: A mortgage is obtained from a lender under false pretenses. This is also known as application fraud.
  • Value fraud: A lender is led to believe a property is worth more than it really is through conceareal estate fraudlment or intentional misrepresentation of the property’s attributes and value.
  • Foreclosure Fraud: A homeowner in default on their mortgage is deceived into transferring their property title either in exchange for a loan or for assistance with their mortgage. The fraudster imposes payments that are not sustainable for the homeowner and they end up losing their property and equity along with it. The homeowner’s payments are not used to pay off the mortgage and the fraudster can resell or remortgage the home.
  • Shadow flipping: A realtor or investor sells the same property multiple times at increasing prices before the initial sale closing date. The initial seller ends up making less while the last buyer pays an inflated value for the property.

While you cannot prevent fraud from occurring, you can protect yourselves and your clients by carefully reviewing the details of all your deals and by following our recommended best practices.

The best way to protect against title fraud is to get both an owner and lender title insurance policy from FCT.

With a title insurance policy, owners can rest easy knowing their title will be defended in the event it is ever challenged* and they will be protected from other issues like survey and title defects. Lenders will be protected against losses associated with the priority and enforceability of the mortgage, title and survey defects, municipal issues as well as title fraud. Lawyers can rest easy knowing that all parties are protected and FCT has their back in the event of fraud.

Have you come across any fraudulent transactions lately? Tell us about it in the comments section below!

* Insurance by FCT Insurance Company Ltd. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request.  Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

Nov 29 | 2016

How Jay Seabrook Co-built the Financial Literacy Revolution in Canada

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financial literacyAs you may or may not know November is Financial Literacy Month (FLM) in Canada. FLM is led by the Financial Literacy Leader, Jane Rooney, and promotes the cooperation of organizations to improve the financial literacy of all Canadians at any age. For those of you that are unfamiliar with the term, financial literacy refers to the knowledge and skills that are required to make responsible personal financial decisions.

Why is Financial Literacy Month important?

FLM aims to teach Canadians about the importance of creating and following budgets and living within your means.  According to the
Government of Canada
less than half (46%) of Canadians currently have a budget, and 42% of 35-44 year olds are not keeping up with bills and financial obligations. Only 66% of Canadians are financially prepared for retirement and 52% of Canadians admit that they could not cover at least six months’ worth of living expenses if they lost their main source of income.

These alarming trends are being passed onto Canadian youth, and inspired Jay Seabrook, the focus of this month’s EXPERT/ease feature, to create a financial literacy program for high school students.

Jay and his long-term business partner Kevin Cochran built the EnRICHed Academy content to target the comprehension of high school students “so they could really understand how to build wealth in a fun and entertaining way.” EnRICHed Academy recognizes that everyone deserves financial awareness and is dedicated to financial education, a premise that won over the business brains on Dragon’s Den in Season 7.

To learn more about Jay’s path to success with EnRICHed Academy and Dominion Lending Centres read the November edition of EXPERT/ease.

Aug 17 | 2016

Certified Resale Home: Delivering a superior customer experience

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customer experienceIt’s pretty clear that brands with a good understanding of the value of customer experience manage to be so successful in large part because of word of mouth. This level of exposure is what every company strives for!

Looking at real estate, agents are typically chosen based on referrals and/or repeat business (having worked with the same client previously). But what really underlies this choice?  In my opinion, CUSTOMER EXPERIENCE.

There have been numerous technological advancements that have made buying and selling a home much easier (i.e. online property searches, buy and sell checklists, electronic transaction platforms with e-signature etc.) but the secret ingredient will always remain the same – give a customer a great experience and they will come back for more or let others know about it.

When it comes to return on investment, delivering a superior customer experience will go beyond any marketing spend. It was one of the key opportunities we identified when FCT started to devise our Certified Resale Home service. Of course, it helps that delivering superior customer experiences has been our core value for the past 25 years.

Certified Resale Home is an impartial, honest and expert assessment of a home that provides greater transparency and information so that the seller, realtor, and buyer can make informed decisions.

Here’s what it can do for everyone involved:

The seller – get the best possible offer, quicker

  • Immediately differentiate the property and make it stand out
  • Optimize purchase offers
  • Enhance buyer comfort

The buyer – reduce anxiety and reduce the buyer beware environment

  • Build trust by offering more transparent information through a recognized ‘brand’
  • Ensure they have an impartial and honest inspection to rely on and peace of mind and confidence with a warranty to fall back on

The agents – increase customer satisfaction and generate referrals

  • Take control of the situation and get out in front of issues for their client
  • Reinforce their value with a superior full-service experience
  • Time is money – close listings faster

We are currently piloting with RE/MAX Niagara (Ontario) and Century21Carrie.com (Winnipeg).  If you are a homeowner looking to sell in those areas, contact us for more information. All pre-listing home inspections are fulfilled by AmeriSpec® Inspection Services.

Warranty Services by First Canadian Title Company Limited
® Registered Trademark of AmeriSpec Inspection Services.

Jun 8 | 2016

Why hasn’t smart home technology taken off?

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smart homeIt’s a science fiction film cliché, the responsive house that all but turns down your bed and butters your toast. For the past decade, sensor-based technologies have been marketed, in aggregate, as “the smart home,” with big companies and technology giants queueing up to integrate the possibilities of cloud-based processing and ever more refined sensors.

But the headline isn’t that any of these name brands are blowing the doors off. To the contrary — the smart home market is kind of a replay of the early days of the videocassette: no industry standard, lots of innovation off the beaten track…and siloed technologies blocking real progress.

Silos are definitely not what the house doctor ordered; the vision is all the other way—appliances, control systems/devices and home entertainment platforms all interoperably linked and smoothly interfaced.

Not.

It’s more like a hobbyist’s approach: one widget at a time. (One suspects people are still sufficiently peeved at their remote to have much faith in a house full of remotes.) That’s on the consumer side; on the company side, insurance companies and grocery super brands are already experimenting with individual technologies as outreach programs to build engagement with customers in a whole new way. So the game looks far more like a slow aggregation and integration of niche markets (wins with integrated safety, thermostats and security systems (“background apps”) migrating customers to softer, more personalized interactivities around entertainment, cooking, health management and monitoring special needs family members (“foreground apps”).

And what about fun? These devices can’t be simply widgets: the winners, like the now-legendary HitchBot—a “social robot” which traversed Canada, parts of Germany and several US cities before being destroyed in Philadelphia in July 2015, winning some 500,000 Facebook followers—will become part of our complex, all too human lives.

At home, we are most ourselves. Technology has a long way to go to reflect that fact, inhibited as progress is by high product prices, limited consumer interest and overlong device replacement cycles—but the highest barrier is interoperability: too many networks, too many platforms, far too many niggling problems (“I have to program this remote? What?!” Remember that one?). What’s wanted is an innovator to crash the barriers and build an ecosystem that actually works as if people mattered.