Spring Forward: Preparing Your Finances for the Home-Buying Season

Spring is one of the busiest seasons in the real estate market, with buyers eager to find their dream home before summer.

If you're planning to purchase a home in Spring 2025, now is the time to get your finances in order. Being financially prepared can help you secure a mortgage with favorable terms and make your home-buying journey smoother. Here’s how to get ready:

1. Check and Strengthen Your Credit Score

Your credit score is one of the most important factors in mortgage approval, influencing both your eligibility and the interest rate you’ll receive. A higher score can save you thousands over the life of your mortgage, so it’s worth taking the time to improve it.
 

Start by checking your credit report for errors, and if you spot any inaccuracies, dispute them immediately.

Pay down outstanding debts to lower your credit utilization ratio, which plays a big role in your score.

Avoid opening new lines of credit in the months leading up to your mortgage application, as this can temporarily lower your score.

By reaching out to me, I can help preserve your credit score as they will pull your credit report once to shop your application. Note: Multiple credit checks in a short period can lower your credit score.
 

2. Build a Strong Down Payment

The more you can put down up front, the better. A larger down payment can reduce your monthly mortgage costs, give you access to better loan terms, and, in some cases, eliminate the need for mortgage insurance.
 

Set a savings goal based on home prices in your target area so you have a clear plan.

Explore first-time homebuyer programs that offer down payment assistance—there are plenty of government and lender-based options.

Make saving a habit by automating deposits into a dedicated home savings account.

Avoid moving your money around to multiple accounts prior to applying for your mortgage. Lenders require a 90-day history of your down payment and a history of moving your money around can make this more difficult to easily verify your down payment.
 

3. Reduce Your Debt-to-Income Ratio (DTI)

Lenders use your debt-to-income ratio (DTI), aka GDS/TDS, to assess how comfortably you can handle a mortgage payment on top of your existing obligations. A lower DTI signals financial stability, improves your chances of loan approval and can expand your borrowing power.
 

Work on paying off high-interest debts or debts with high monthly payments, like credit cards and personal loans, to free up more of your income.

Hold off on making large purchases or taking on new loans, such as car financing, before applying for a mortgage.

If possible, look for ways to increase your income—whether through a raise, side gig, or freelance work—to strengthen your financial standing. Note self employed income or part time non guaranteed hours employment generally require a 2-year history.
 

4. Get Pre-Approved for a Mortgage

A mortgage pre-approval is a game-changer in a competitive market. It gives you a clear budget, shows sellers that you’re a serious buyer, and can even speed up the closing process.
 

Start gathering essential documents like tax returns, pay stubs, and bank statements—lenders and myself will need these to assess your financial health.

Reach out to me today for information to help you compare mortgage rates and terms, ensuring you get the best deal.

Take time to discuss your mortgage options with me, from fixed to variable rates, different term lengths, or special programs available to you.
 

5. Budget for Additional Costs

The home price isn’t the only expense you’ll need to plan for. Homeownership comes with extra costs that can catch buyers off guard if they’re not prepared.
 

Closing costs typically range from 1.5% to 4% of the home’s purchase price, covering legal fees, land transfer taxes, and more. This is money you need on top of your down payment

Property taxes, Condo fees and homeowners' insurance can add to your monthly expenses—make sure to factor them into your budget.

Set aside a fund for home maintenance and emergency repairs to avoid financial strain when unexpected expenses arise.
 

6. Research the Housing Market

Spring is a competitive time to buy, so being well-informed about the market can give you an edge.
 

Keep an eye on housing prices in your preferred neighborhoods to understand trends and pricing expectations.

Stay updated on current interest rates, as they directly impact affordability and your monthly payments.

Work with a trusted real estate agent who can help you navigate bidding wars, negotiate offers, and find the right home for your needs.
 

7. Consider Locking in an Interest Rate

Interest rates can fluctuate, and even a small increase can affect your monthly payments. If rates are expected to rise, securing a lower rate in advance could save you money over time.
 

Ask me about rate lock options and how long they’re valid for. Rate holds on average are valid for 120 days before they expire and a new rate hold period is requested

Compare fixed and variable rates to see which aligns best with your financial goals.

Keep an eye on Bank of Canada rate announcements and economic trends that could impact mortgage rates. Note: With recent Bank of Canada announcements variable rates which are tied to Prime are dropping
 

Taking these steps now will set you up for success. The more financially prepared you are, the smoother the process will be—and the better your chances of landing your dream home at the right price.

Understanding Second Mortgages: Are They Right for You?

One of the biggest benefits to purchasing your own home is the ability to build equity in your property. This equity can come in handy down the line for refinancing, renovations, or taking out additional loans - such as a second mortgage.

A second mortgage refers to an additional or secondary loan taken out on a property for which you already have a mortgage. Some advantages include the ability to access a large loan sum, better interest rates than a credit card and the ability to use the funds how you see fit. However, keep in mind interest rates are typically higher on a second mortgage versus refinancing and can add additional cash flow tension to your monthly bills. Talk to a mortgage professional today to determine if this is the best option for you!

What is a second mortgage?

First things first, a second mortgage refers to an additional or secondary loan taken out on a property for which you already have a mortgage. This is not the same as purchasing a second home or property and taking out a separate mortgage for that. A second mortgage is a very different product from a traditional mortgage as you are using your existing home equity to qualify for the loan and put up in case of default. Similar to a traditional mortgage, a second mortgage will also come with its own interest rate, monthly payments, set terms, closing costs and more.

Second mortgages versus refinancing

As both refinancing your existing mortgage and taking out a second mortgage can take advantage of existing home equity, it is a good idea to look at the differences between them.

Firstly, a refinance is typically only done when you're at the end of your current mortgage term so as to avoid any penalties with refinancing the mortgage. The purpose of refinancing is often to take advantage of a lower interest rate, change your mortgage terms or, in some cases, borrow against your home equity.

When you get a second mortgage, you are able to borrow a lump sum against the equity in your current home and can use that money for whatever purpose you see fit. You can even choose to borrow in installments through a credit line and refinance your second mortgage in the future.

Some key things to note when looking at a second mortgage or refinancing:
 

If you have a favorable interest rate on your first mortgage, a second mortgage allows you to keep the lower rate on your primary loan, resulting in a lower blended rate.
Refinancing resets the amortization schedule, which could extend the loan term. A second mortgage leaves the existing term intact, helping you stay on track with your overall financial goals.
Second mortgages often come with more flexible terms, such as interest-only payments, fully open, or shorter term, which can suit your immediate needs.
 

What are the advantages of a second mortgage?

There are several advantages when it comes to taking out a second mortgage, including:
 

Homeowners can access a significant portion of their home equity (typically 80%-85% LTV).

Better interest rate than a credit card as they are a ‘secured’ form of debt.

You can use the money however you see fit without any caveats.

Allows you to access your home equity without breaking your existing mortgage and incurring penalty fees.
 

What are the disadvantages of a second mortgage?

As always, when it comes to taking out an additional loan, there are a few things to consider:
 

Interest rates tend to be higher on a second mortgage than refinancing your mortgage.

Additional financial pressure from carrying a second loan and another set of monthly bills.
 

Before looking into any additional loans, such as a secondary mortgage (or even refinancing), be sure to reach out to me!

Regardless of why you are considering a second mortgage, it is a good idea to get a review of your current financial situation and determine if this is the best solution before proceeding.

10 Smart Spring-Cleaning Tips to Revitalize Your Home

As the days grow longer and the sun shines brighter, it's the perfect time to refresh your home with a thorough Spring clean! A clean, organized space can help you feel more energized and ready to embrace the season ahead.

Here are some tips to make your Spring cleaning both efficient and enjoyable:
 

• Create a Playlist: Make cleaning fun by curating a playlist of your favorite upbeat songs. Music not only makes the time fly but can also turn your cleaning routine into an enjoyable activity. Dance while you dust and sing while you sweep—your home will thank you!
   
• Clean One Room at a Time: A clean home doesn’t happen overnight, so avoid feeling overwhelmed by tackling one room at a time. Start small, such as with bathrooms or closets, and work your way up to larger spaces like the kitchen or living room. Alternatively, dedicate one or two rooms per weekend, and by the time May rolls around, your home will sparkle!
   
• Declutter as You Go: Spring cleaning isn’t just about scrubbing and polishing—it’s also the ideal time to declutter. Sort through closets, cupboards, and drawers, and separate items into "keep," "donate," and "discard" piles. Haven’t used that appliance or worn that sweater in over a year? It’s time to let it go. Clearing out the clutter not only makes cleaning easier but also creates a more organized and calming space.
   
• Go Green: Keep your cleaning eco-friendly by opting for natural solutions. Vinegar and baking soda are versatile and effective for a variety of tasks, from cleaning countertops to unclogging drains. A steam cleaner can also be a fantastic tool for deep-cleaning floors, appliances, and even outdoor spaces without the need for harsh chemicals. Choose sustainable products to keep your home fresh and the environment happy.
   
• Work From Top to Bottom: When cleaning, always start high and work your way down. Dust light fixtures, ceiling fans, and shelves first to avoid re-cleaning surfaces below. This method ensures maximum efficiency and minimizes extra work!
   
• Don’t Forget Hidden Spaces: Pay attention to often-overlooked areas like baseboards, window tracks, and behind large furniture. Use a vacuum attachment to get into tight corners, and wipe down walls and doorframes for a truly comprehensive clean.
   
• Freshen Up the Fridge & Freezer: Spring is the perfect time to clean out your fridge and freezer. Empty the contents, toss expired items, and clean the interior surfaces with a mixture of water and mild soap or vinegar. If defrosting is needed, plan ahead to minimize food waste. Restocking a fresh, clean fridge feels fantastic and can even inspire healthier eating habits!
   
• Revitalize Air Quality: Spring allergens can wreak havoc on your sinuses, but replacing your HVAC and furnace filters can help. Upgrade to a higher-quality filter for added protection against allergens, chemicals, and odors. Consider adding an air purifier for an extra boost to your home’s air quality.
   
• Wash Fabrics & Upholstery: Take time to wash or vacuum curtains, upholstery, and throw pillows, as they can harbor dust and allergens. Rotate or clean your mattress, and swap out heavy winter bedding for lighter, seasonal options. Fresh linens make a big difference in creating a rejuvenated space.
   
• Tidy Outdoor Areas: Spring cleaning isn’t limited to the indoors! Sweep porches, patios, and decks, and clean outdoor furniture. If you have a garden, take this opportunity to prepare for planting by clearing debris and cleaning tools. A fresh outdoor space is the perfect complement to your revitalized home.

Embrace these tips, and your Spring clean will leave your home feeling fresh, organized, and ready for the new season!

Resolutions for Your Home and Finances

As the new year approaches, it's a natural time to reflect on our personal goals and set resolutions for the months ahead. Your home and finances are key areas where small, intentional changes can lead to big improvements in security, stability, and quality of life. Here are some resolutions to get you started!

Create a Realistic Home Budget

A well-planned budget is essential for financial peace of mind. Whether you're new to budgeting or want to refine your approach, creating a realistic budget helps prioritize spending, track bills, and put money toward meaningful goals.

• Identify Fixed and Variable Expenses: List out fixed costs, like mortgage payments, utilities, and insurance, as well as variable ones, such as groceries and entertainment.
• Set Savings Goals: Include savings as a "non-negotiable" in your budget, earmarking funds for home repairs, investments, or emergencies.
• Track and Adjust: Track spending throughout the month and adjust where necessary. Financial apps like Mint or You Need a Budget (YNAB) make it easier to stay on course.

Set Goals to Build Home Equity

Building home equity is a key path to increasing net worth. Whether you're planning to sell or stay in your home long-term, building equity can offer financial flexibility and security.

• Make Extra Mortgage Payments: Even a small additional payment toward your mortgage principal each month can shorten your loan term and reduce interest costs. A biweekly payment plan is another effective method to pay down the principal faster.
• Consider Strategic Home Improvements: Invest in upgrades that boost home value, like kitchen and bathroom remodels, or energy-efficient upgrades like new windows or solar panels. Prioritize improvements that add the most value to your property.

Develop a Plan to Pay Down Debt

Paying down debt (especially after the holidays!) can help free up cash flow. It is key to focus on high-interest debts first, such as credit cards, to maximize your payments.

• Use the Debt Avalanche or Snowball Method: The avalanche method involves paying off high-interest debts first, while the snowball method focuses on smaller debts first. Choose the one that best fits your motivation style.
• Consider Refinancing or Consolidation: If you have a high-interest mortgage or multiple debts, refinancing or consolidating might reduce interest rates, making debt repayment more manageable.
• Celebrate Milestones: Paying off debt can feel challenging, so celebrate progress. Every milestone achieved brings you closer to financial freedom.

Commit to Energy Efficiency to Lower Bills

Saving on energy costs can have a significant impact on your budget, especially in colder or warmer months. Simple changes around the home can save you money while benefiting the environment!

• Invest in Smart Thermostats: A programmable thermostat can automatically adjust heating and cooling based on your schedule, saving energy when you’re not home.
• Switch to LED Lighting: LED bulbs use significantly less energy and have a longer lifespan than traditional bulbs.
• Insulate Windows and Doors: Adding weatherstripping to doors and windows keeps drafts out, making your heating and cooling systems more efficient.

Review Your Insurance Policies and Coverage

Insurance is a key element of financial security, but it’s easy to forget about it until something goes wrong. As you head into the new year, this is a great time to make sure you’re fully covered!

• Assess Homeowners and Mortgage Insurance: Review coverage limits and ensure your policy covers potential risks, including natural disasters if you live in high-risk areas.
• Shop for Better Rates: Contact your provider for discounts or shop around for new rates. Bundling policies, like home and auto insurance, can often yield savings.
• Update Beneficiaries and Coverage: Life circumstances change, and your insurance should reflect that. Update your beneficiaries, adjust coverage, and ensure policies align with your financial goals.

Setting resolutions for your home and finances doesn’t have to be daunting! Start with small, actionable goals to help transform your finances - and your mindset - for 2025!

12 Tips for Decluttering Your Space

Decluttering can bring a sense of calm and order to your space, especially as the holiday season approaches. Here are some practical tips to help get organized:

• Start Small and Set Achievable Goals: Avoid overwhelm by breaking down the decluttering process into manageable steps. Set realistic goals, such as dedicating just 15 minutes a day to tidying up. Begin with a small area—like a single drawer or shelf—and gradually expand to larger spaces as you build momentum and confidence.
• Use the “One-In, One-Out” Rule: For every new item you bring into your home, make it a rule to remove an old one. This simple habit keeps your space from accumulating unnecessary items and helps maintain a balanced, organized environment.
• Sort and Categorize with Purpose: Sorting items as you go makes it easier to stay organized and keep track of where everything belongs. Use boxes or bins labeled "Keep," "Donate," "Sell," and "Recycle/Trash" to give each item a clear destination. This method ensures that you can tackle everything in one go without second-guessing.
• Focus on Essentials and Joy: When deciding what to keep, ask yourself, “Does this item serve a purpose, or does it bring me joy?” If the answer is no, it’s probably time to let it go. Focusing on essentials and things that spark joy can help you make more meaningful decisions about what truly belongs in your home.
• Digitize Paper Clutter: Free up physical space by scanning or photographing important documents and storing them digitally. Use cloud storage or an external hard drive to keep these files secure and easily accessible. This practice reduces paper clutter and provides a backup in case of loss or damage.
• Declutter in Layers for Lasting Results: Tackle clutter in layers to avoid feeling overwhelmed. Start with the most obvious items—like broken or rarely used belongings—and gradually work your way through more sentimental or difficult-to-decide items. Revisiting each area multiple times helps you refine your space down to the things you truly need or cherish.
• Adopt a “Capsule” Mindset for Clothes and Accessories: Build a capsule wardrobe by focusing on versatile, high-quality clothing pieces that you love and regularly wear. Store out-of-season items separately to keep your main closet neat and functional. This approach simplifies decision-making and can make daily routines smoother.
• Set Up Regular Decluttering Routines: Make decluttering a habit by scheduling quick, regular clean-ups—a few minutes each day or a larger session every month. Consistency prevents clutter from building up over time and helps you maintain a tidy, organized space effortlessly.
• Involve the Whole Family: Encourage family members to declutter their own spaces and lead by example. Demonstrating the benefits of a tidy, organized home can inspire everyone to participate, making the whole process faster and more enjoyable.
• Treat Your Space as “Prime Real Estate”: View the most visible and accessible areas of your home as “prime real estate.” Reserve these spaces for the items you use and love the most, and relocate or discard things that aren’t worth taking up valuable room.
• Embrace Simple Storage Solutions: Use baskets, bins, and clear containers to keep your belongings organized and out of sight. Labeling containers makes it easy to find what you need at a glance, keeping everything in order while reducing visual clutter.
• Reevaluate Seasonal Items Regularly: After each season, go through holiday decorations, seasonal clothing, and other temporary items to decide what’s worth keeping. Donate, sell, or discard anything you no longer use. This ongoing process will help prevent excess accumulation year after year.

These tips can help you create a cleaner, more peaceful environment and build habits to stay organized in the long term. Happy decluttering!  

Refinancing Your Mortgage

Refinancing your mortgage can be a smart financial move for many reasons, and as your trusted mortgage advisor, I’ve seen how much it can benefit homeowners!

Ideally, refinancing is done at the end of your mortgage term to avoid penalties, but the timing can vary depending on your goals. For some, it’s about unlocking the equity in their home to fund renovations or cover big expenses like college tuition. For others, it’s an opportunity to consolidate debt, lower their interest rate, or change up their mortgage product.

Let’s take a closer look at some of the ways refinancing your mortgage can help!

• Get a Better Rate: As interest rates have continued to decrease with the Bank of Canada updates these past few months, now is a great time to consider refinancing for a better rate and lower overall mortgage payments!  Experts anticipate the Bank of Canada will move to have the overnight rate down to 4.0% at year-end and potentially down to 2.75% next year.

• Consolidate Debt: When it comes to renewal season and considering a refinance, this is a great time to review your existing debt and determine whether or not you want to consolidate it onto your mortgage. In most cases, the interest rate on your mortgage is less than you would be charged with credit card companies or other forms of financing you may have. Plus, having all your debt consolidated into a single payment can keep you on track!

• Unlock Your Home Equity: Do you have projects around the house you’ve been dying to get started on? Need funds for a large purchase such as a new vehicle or post-secondary education? When you are looking to renew your mortgage, it is a great opportunity to consider refinancing in order to take advantage of the home equity you have built up to help with these larger changes in your life!

• Change Your Mortgage Product: Are you unhappy with your existing mortgage product? If you have a variable-rate or adjustable-rate mortgage, you may be considering locking it in at the lower rates. Alternatively, you may want to switch your current fixed-rate mortgage to a variable option with the interest rates expected to continue decreasing into 2025. You can also utilize your refinance to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

PLUS! Some latest changes by the Government of Canada will make it even easier for you when it comes to your renewal and refinancing options:

Those of you who may have an uninsured mortgage will no longer have to pass the stress test as of November 21st. This means that you have more flexibility when it comes to rates and mortgage products in renewal or refinance cases in cases where you wish to switch lenders without adding additional funds to your mortgage!

Beginning January 15, the federal government will allow default-insured mortgages to be refinanced to build a secondary suite. If you’ve been considering adding a suite to your property, you may be eligible to access up to 90% of your home’s equity for this purpose.

No matter your plans or situation, please don’t hesitate to reach out to me for expert mortgage advice!

DiY Holiday Gifting Ideas

Looking for some creative and thoughtful DIY holiday gifting ideas that are easy to make and can add a personal touch to your gifts this season? These affordable, fun, and personalized options can suit anyone in your life – and they’ve never been easier to make!

• Homemade Scented Candles: These are easy to make requiring only a few ingredients but can be a great statement for friends and family! Pick their favourite scent in essential oil (lavender, peppermint, cinnamon, sage, etc.) and mix in with melted wax and pour into jars with a wick! Plus, you can customize them further with fun holiday-themed tags or labels on the jars.
• DiY Bath Bombs: Surprisingly easy to make, these bath bombs pair especially well with a homemade candle or handmade soap for the ultimate personal-scented bath set! Requiring just baking soda, citric acid, Epsom salts and essential oils to set in molds, these are a fun, low-cost gift idea!
• Handmade Soaps: Another great gift idea to make a personalized statement are handmade soaps! All you need is a soap base, essential oils, and additives to pour into molds to set! Want to get extra personalized? Find unique and fun molds that celebrate the personality of that friend or family member! 
• Personalized Photo Calendars: Fun for the whole family, personalized calendars can be a great way to snapshot your previous year and highlight the good times as you head through 2025! You can have these created online or do it yourself by printing photos and a template, binding the pages with ribbon, and adding handwritten, personal notes on special dates.
• Custom Recipe Book: Do you have fun family recipes or have friends with a list of top treats? Why not create a custom recipe book with their favourite eats! All you need is a blank notebook or binder, printed recipes plus some photos for added personalization.
• Knitted Outdoor Wear: With the temperatures starting to drop, why not give the gift of comfort with a scarf or hat knitted with love? Combine their favourite colours or patterns and even add a personalized name tag!

The season of giving has never been easier with these affordable, fun and personalized gift ideas for all those special folks in your life!

December 15th, 2024

Insured mortgage cap is being raised from 1 million to 1.5 million for people that wish to put less than 20% down.

If the cap on insured mortgages increases from $1 million to $1.5 million, this could significantly impact the housing market. Here are some potential effects: 

• Increased Access to Financing: Buyers looking for higher-priced homes will have more access to insured mortgage options, making it easier to finance larger purchases. 

• Market Dynamics: This change could stimulate demand in the higher-end market, potentially driving up prices in certain areas. 

• Encouragement for Buyers: With a higher cap, buyers may feel more confident entering the market, knowing they can secure favorable financing for larger homes. 

• Potential Risks: While it may help some buyers, it could also increase risks for lenders if higher loan amounts lead to more defaults in economic downturns. 

• Impact on Affordability: While this change could assist some buyers, it might also contribute to affordability challenges in competitive markets, as higher limits could lead to increased competition and prices. 

1.5 million dollars required $300,000 down and under new rules buyers can purchase with $125,0000 down as a minimum.  Calculating downpayment is 5% of the first $500,000 and 10% of the remainder.  Standard insurance premiums apply and are added to the mortgage based on downpayment.  If a first-time buyer, the client is allowed to take a 30-year amortization for an additional .20% insurance premium. That is a home purchase with $175,000 less downpayment! 

First Time Buyers can amortize their financing over 30 years from 25 years.

If first-time buyers are allowed to use 30-year amortizations after December 15, 2024, this could have several significant implications: 

• Lower Monthly Payments: A longer amortization period typically means lower monthly mortgage payments, making homeownership more accessible for first-time buyers. 
• Increased Affordability: With lower payments, buyers might qualify for larger loans, which can help them purchase homes in more competitive markets. 
• Longer Loan Terms: While this offers short-term relief, buyers should be aware that extending the amortization period can lead to paying more interest over the life of the loan. 
• Financial Planning: First-time buyers might have more flexibility in budgeting and financial planning, allowing them to allocate funds to other priorities. 
• Market Impact: Increased affordability could boost demand among first-time buyers, potentially driving up home prices if supply doesn’t keep pace. 

A $850,000 house purchase with a minimum down of $60,000 has a payment of $4451.91 on 25 years and $4050.59 on 30 years.   The payment difference is $401.32/month and income required to purchase this house is $10,000 less for the 30-year amortization.  Allowing families with disruption to income due to maternity leave, a bit more wiggle room in qualifying for a home purchase. 

Staying informed about these changes and their implications is essential for both buyers and the market overall! If you have specific questions or need more information, let me know!  Call or email me if you wish to discuss how the rules can help you purchase!