How Can You Avoid the Government Premium on Your Mortgage?

There are many great Calgary area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a list of Featured Properties so you know what buyers will pay for your home in today's market. You may also call me at (403) 660-6200 for a FREE home buying or selling consultation to answer any of your real estate questions.

Traditional mortgages are pretty easy to understand. You take a down payment, make an application, and use the down payment toward the purchase price of your home. If you mortgage 80% of your home, you have 20% down on the purchase price. Anything less than 20% down will require you to pay insurance to the government for your mortgage. The government will tack on an insurance premium up to 3.5% of the mortgage amount, which could add up quickly.

Let's say you have a $100,000 home and an $80,000 mortgage. Since you put 20% down, the government will not charge a premium. If you put only 5% down, however, and have a $95,000 mortgage, you will have to pay that 3.5% on your mortgage. Because of this, your mortgage payment will be $98,500. You're essentially paying more for the same amount of home.

If you can't afford to put that 20% down, there are options available to you other than the traditional mortgage. Using a home equity line of credit on your residence gives you greater flexibility and allows you to do things outside of your residence for investment purposes. It's not risky, but simply another form of mortgage on your property that may not be as costly as a traditional mortgage.

If this is something you might be interested in, or would like more information on, don't hesitate to reach out to us. We'd be happy to help you explore your options!

Real Estate Market Update for Fall 2014

There are many great Calgary area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a list of Featured Properties so you know what buyers will pay for your home in today's market. You may also call me at (403) 660-6200 for a FREE home buying or selling consultation to answer any of your real estate questions.

 Today we are going to talk about our yearly sales results in the Calgary marketplace. There have been some interesting changes over the past year that we want you to be aware of so you can better understand our market.

In August of 2013, there were approximately 2900 homes sold for an average sales price of $445,000. In August of 2014, both those figures rose. In August 2014, there were 3000 home sold for an average of $475,000. We are seeing a significant increase in values of homes and a huge net migration in the city of Calgary. 

These statistics are relevant right across the board in the city, but you really need to look at each specific neighborhood for your specific purposes. A steady increase in the average sales price over time in an area is a good sign. This sustains value in the market. 

If you'd like to sit down with us and talk about real estate, we would love to meet with you. Give us a call or send us an email so we can set something up. We look forward to chatting with you!

How to Determine Whether We're in a Real Estate Bubble

There are many great Calgary area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a list of Featured Properties so you know what buyers will pay for your home in today's market. You may also call me at (403) 660-6200 for a FREE home buying or selling consultation to answer any of your real estate questions.

This summer a lot of people have asked us if we are in a real estate bubble. To answer that question, it's important to understand two of the main criteria involved in creating such a bubble.

1. Significant increases in interest rates have a destabilizing effect on the market. Governments are typically cautious about raising them because they can have a substantial impact on manufacturing and job creation. Right now, both internationally and here in Canada,we are still seeing pretty favorable rates.
2. A significant increase in unemployment is another sign that the market may be on shaky ground. Here in Alberta we are seeing significant job growth - in May we accounted for 90% of all new jobs created in Canada. 

Because interest rates are low throughout Alberta and the nation as a whole, and we are seeing job creation throughout the province, we can say with confidence that we are not experiencing another real estate bubble and that we don't expect to see the above criteria met any time soon. But, of course,real estate is hyper-local - some areas have higher turnovers than others, so you need to look at specific neighborhoods to get a good idea of whats going on. Give us a call or shoot us an email with all of your questions and concerns, we would love to be your real estate resource.