November 18, 2009
Book, First Time Home Buyer, Interest Rates
No Comments
Most mortgages that people get are closed. See my post describing Open vs Closed here. Closed mortgages typically have lower rates because the lender knows the term of the mortgage (and therefore their revenue). But closed mortgages have penalties associated with them when people do not carry though until the end of the term.
So for example if you get a 5 year fixed closed mortgage and decided to move to another house 3 years later then you would be forced to end your mortgage and pay the penalty fee.
But portability is an option in most mortgages of this type.
So in this example you may be better off to port your mortgage to the new property. This means that you would not have to pay the penalty and you would get to keep the rate that you had for the past three years. If further money was needed you would borrow that amount at the rates of that time. These two amounts and their rates would be blended into one convenient payment.
So by using this option people can really save themselves lots of money and get the home they want.
October 22, 2009
Book, First Time Home Buyer
No Comments
Ok … now that you know what TIPP is how do you get signed up?
The following is from the City of Calgary website. Just follow their instructions and soon you be on board.
Cheers!
To join the Tax Installment Payment Plan (TIPP) you need to:
- request a TIPP application form,
- agree to the terms and conditions of the plan,
- complete and return your application no later than the “Return by” date shown, and
- include a void cheque and any applicable initial payment with your application.
If you own more than one property you must complete an application of each location. We only require one void cheque if all payments are to be withdrawn from the same bank account.
Condo owners please note: If you own one or more titled parking stalls, an application is required for your unit and a separate application is required for each parking stall.
Request a TIPP Application
Request a Tax Installment Payment Plan (TIPP) application using one of the following methods:
- Request for TIPP Application 3-1-1 Online
- Send an e-mail to property.tax@calgary.ca
- Fax your request to 403-268-3550
- Phone 3-1-1
You may join at any time during the year. However, if you join after January 1, there is a filing fee of 2% of the missed installments.
You will need to make an initial payment equal to the missed installments from January 1, plus the filing fee at the time of application.
http://www.calgary.ca/portal/server.pt/gateway/PTARGS_0_0_784_203_0_43/http%
October 14, 2009
Book, Employed Persons, First Time Home Buyer, Pre Approval
No Comments
We pay taxes. This should not come a surprise to anyone. All levels of government require that we pay taxes. The city is no exception.
The way that the city of Calgary collects taxes is not through our income or by a tax on goods and services – they do it though the properties that are owned by businesses and home owners. The value of your home as assessed by the city of Calgary lets the them know what your portion of the tax bill will be for the coming year.
Lenders want to make sure you pay your city taxes. They believe that if people pay their taxes once per year (in June) that that tax bill can be hard for some families to pay. They want to make paying your taxes easier for you and this is why they encourage you to pay using a program offered by the city of Calgary called the TIPP program.
The following is an excerpt and link from the City of Calgary explaining the TIPP program.
Property Tax Installment Payment Plan (TIPP)
What is TIPP?
The Tax Installment Payment Plan (TIPP) is a popular program which allows you to pay your property taxes on a monthly basis instead of one payment in June.
Your payment automatically comes out of your chequing account the first day of every month, making budgeting easier and helping you avoid the risk of a 7% penalty.
How does TIPP work?
Each year property taxes are billed in May, due June 30 and cover the period from January 1 to December 31.
If you pay through TIPP you don’t need to worry about the payment deadline or late payment penalties. Your taxes are spread over 12 months, starting January 1, with your account being paid in full after your December 1 installment.
Your installment amount is calculated by dividing your most recent annual tax levy by 12, rounded up to the nearest dollar. This amount is paid through automated withdrawals from your bank account the first day of each month.
When you receive your annual tax bill in May your installment will be adjusted to reflect the actual tax levy, ensuring your account is paid in full by year end.
Your tax bill will show:
- The TIPP credit-to-date.
- The new installment amount for the remainder of the year.
- The date we will start withdrawing the new installment amount.
At year-end:
- TIPP automatically continues from year to year.
- All installment amounts are reviewed in December.
- If an adjustment is made to your installment amount, you will be notified.
http://content.calgary.ca/CCA/City+Hall/Business+Units/Finance+and+Supply/Property+Tax/Tax+Installment+Payment+Plan+TIPP/Property+Tax+Installment+Payment+Plan.htm
October 7, 2009
Book, Employed Persons, First Time Home Buyer, Interest Rates
No Comments
The Offer to Purchase is a very important document for when people are buying and selling houses.
CMHC defines the Offer to Purchase as “a written contract setting out the terms under which the buyer agrees to buy the home. If the Offer to Purchase is accepted by the seller, it forms a legally binding contract that binds those who have signed it to certain terms and conditions.”
It is the official document that shows to all parties involved the complete terms of the sale. For example is shows the following:
- Property address;
- Purchaser;
- Seller;
- Purchase price;
- Deposit amount;
- Possession date;
- Financing condition date;
- and many more important pieces of information.
The lender needs this document because it shows them that the person really is purchasing a home, for how much and when the file is closing.
Most lenders will need to see this paperwork before they will even start processing your file.
This is why it is key to arrange to have this document sent to your mortgage broker as soon as is possible. This allows the mortgage broker to add the data to your application and submit it to the lender without delay. In turn you get your approval sooner.
For further information about these important documents see (http://www.cmhc-schl.gc.ca/en/co/buho/hostst/hostst_007.cfm)
September 8, 2009
Book, Employed Persons, First Time Home Buyer, Interest Rates, Pre Approval
No Comments
Condominium fees (often referred to as condo fees) are the monthly fees that people who own a property within a condominium complex. These funds are used to cover the common use areas of the facility. Condo fees can range quite a bit in what they cover and how much the fees can be. Speak with a qualified Realtor to find out all about these fees and how they may affect you.
When people purchase or refinance a condominium property one factor we have to work into our qualification ratios, GDS and TDS, is the condo fees. Each of these ratios include a provision for condo fees.
So when we pre qualify people who are considering purchasing a condo it is best to get a sample of the range of what the monthly condo fees are for the properties you are considering. Because these number potentially have a large effect on what you qualify for it is important to be very conservative in these estimates used in the pre approvals.
What I often tell my customers is that if the condo fees are 10% more than what I put into the pre approval application then give me a quick call or email and I will run the numbers for them so we can be 100% sure that they will qualify with the new condo fees.
My services are complimentary so use me to help you get peace of mind.