Archive for the ‘Pickering Real Estate’ Category
First-Time Home Buyers Tax Credit
The First-Time Home Buyers Tax Credit (HBTC) is one of the measures provided by the federal government in 2009 to encourage investment in Canadian housing.
For 2009 and subsequent years, the HBTC is a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., generally means that the closing is after this date).
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit was $750. Each year, the credit is recalculated, so it may be higher or lower than previous years.
How do you qualify for the tax credit?
You, and anyone you purchase the home with, must be considered a first time home buyer to be eligible for the tax credit. The home must be used as your principal residence, and if you purchase with your spouse, common-law partner, or even a friend, then either one of you can claim the credit (or share it). However, the combined total cannot exceed $750.
If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first time home buyer. See the Government of Canada website for further details.
What is a qualifying home?
To qualify for the First-Time Home Buyers Tax Credit, a home must be a housing unit located in Canada, including mobile homes, condominiums and apartments. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
Also, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.
How to Claim the First-Time Home Buyers Tax Credit?
First-time homebuyers purchasing a home may claim the HBTC on their income tax returns. Starting with the 2009 taxation year, line 369 is incorporated into the Schedule 1, Federal Tax to allow you to claim the credit in the year in which you acquired the qualifying home.
The home must be registered in your or your spouse’s or common-law partner’s name in accordance with the applicable land registration system.
Claimants should ensure that documentation supporting the purchase transaction is available if requested by the Canada Revenue Agency. Claimants are also responsible for making sure that all applicable eligibility conditions are met.
Keep the HBTC in mind when you consider buying a Canadian home. It’s just another great reason to take the final step of real estate home ownership.
For more Information visit: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html
————————————————————————————————————–
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————–
Understanding Your Local Real Estate Market
Experts always say that real estate is a great investment because the value of homes is always going up. To some extent, there’s truth in that. But it’s also a fact that the real estate market fluctuates. Many people mistakenly rely on national trends when evaluating the real estate market, however, this could at times be misleading. The key is to focus on and understand your local market.
Focusing on your local real estate market is the key to evaluating real estate deals. This however could be difficult to evaluate since there is often less information on particular areas versus the national situation. To understand your real estate market, here are a few factors to focus on.
Understand the market trend. Sometimes it’s a buyer’s market and sometimes it’s a seller’s market. And there are actually other times when the real estate market is in transition. A transitional real estate market poses certain issues for people who are buying and selling homes and you should be aware of them. This is especially true for anyone involved in real estate right now because the real estate market in many areas is either in transition or could be in transition shortly.
Supply and demand. Real estate is governed by the law of supply and demand. This rule is absolute and without exception. The appreciation of a market, the expectations of buyers and sellers, and the velocity of market sales are all dictated by the supply of, and the demand for, real estate for sale.
New construction is another area to consider when evaluating your market. In this case, we are focusing on supply and demand. The more homes available to buyers, the harder it will be for sellers to move properties. Most communities have some new construction, but the key is to determine if it is outpacing the demand.
Increased job growth and in-migration. Where there is strong growth, there are new workers. New workers need some place to live. A vast percentage of these people will be moving in from other areas and often are bringing money from a previous home. If job growth is strong, your real estate market should be stable and showing appreciation.
Real estate doppler effect. Real estate is governed by the law of cause and effect. Positive situations cause positive outcomes, and vice versa. For example, a vibrant economic growth leads to a vibrant real estate market and strong appreciation of homes, while loss of jobs and a languishing economy produce exactly the opposite effect.
The conditions that make a good market can change literally overnight. All it takes is the entrance of a major employer or a little word of mouth and buyers looking for a bargain and seeing others take a chance, and before you know it, a neighbourhood has turned around. Homes that sat unsold are selling for high prices. Young people are moving in, making improvements, and making the area cool to live in.
A secret to evaluating your local real estate market is to look at people around you. One sign of a hot real estate market is the number of people who suddenly become real estate investors. These tend to be people using the equity in their primary home to make secondary purchases. There is no statistical analysis for this factor. Just keep an ear out for friends or neighbours who are suddenly investing in multiple properties.
Understanding the real estate market requires various skills such as knowledge of land price, an insight for land in the future, the risk factors for a property, laws that apply for property, etc. Moreover, the real estate market has changed tremendously over the year. It takes much time and effort for an individual to understand it completely. The real estate market is an adventurous place to get in to, with the prices of property increasing as the time passes.
If you are thinking of buying or selling a property, consult with your local real estate agent. He or she is equipped with the right tools and knowledge to insure your investment is a successful one.
————————————————————————————————————–
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————–
Pre-Qualified Vs. Pre-Approved – What’s The Difference?
By Brian O’Connell – Investopedia.com
Ralph Waldo Emerson, American essayist and poet, once said that the future belongs to those who prepare for it. This is sage advice for home buyers who need to lay the necessary groundwork to buy the home of their dreams.
Without good preparation, many buyers get lulled into the mistaken notion that if a lender pre-qualifies them for a mortgage this means that they have been pre-approved for a home loan. Unfortunately, there’s a world of difference between these two terms. If you’ve ever been confused by the two, we’ll bring you up to speed on how these terms differ – and why a misunderstanding can mean disaster for borrowers.
The Skinny on Pre-Qualified
Getting pre-qualified is the initial step in the mortgage process, and it’s generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. Pre-qualification can be done over the phone or on the internet, and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.
The initial pre-qualification step allows you to discuss any goals or needs you may have regarding your mortgage with your lender. At this point, a lender can explain your various mortgage options and recommend the type that might be best suited to your situation.
Because it’s a quick procedure, and based only on the information you provide to the lender, your pre-qualified amount is not a sure thing; it’s just the amount for which you might expect to be approved. For this reason, a pre-qualified buyer doesn’t carry the same weight as a pre-approved buyer who has been more thoroughly investigated.
The Skinny on Pre-Approved
Getting pre-approved is the next step, and it tends to be much more involved. You’ll complete an official mortgage application (and usually pay an application fee), and then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. (Typically at this stage, you will not have found a house yet, so any reference to “property” on the application will be left blank). From this, the lender can tell you the specific mortgage amount for which you are approved. You’ll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock-in a specific rate. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. Obviously, this puts you at an advantage when dealing with a potential seller, as he or she will know you’re one step closer to obtaining an actual mortgage.
The other advantage of completing both of these steps – pre-qualification and pre-approval – before you start to look for a home is that you’ll know in advance how much you can afford. This way, you don’t waste time with guessing or looking at properties that are beyond your means. Getting pre-approved for a mortgage also enables you to move quickly when you find the perfect place. When you make an offer, it won’t be contingent on obtaining financing, which can save you valuable time. In a competitive market, this lets the seller know that your offer is serious – and could prevent you from losing out to another potential buyer who already has financing arranged.
Once you have found the right house for you, you’ll fill in the appropriate details and your pre-approval will become a complete application.
Getting Committed
The final step in the process is what’s called a “loan commitment”, which is only issued by a bank when it has approved you, the borrower, and the house in question. This means the home should be appraised at or above the sales price. The bank may also require more information if the appraiser brings up anything he or she feels should be investigated (i.e. structural problems, accessibility issues, outstanding liens or litigation in progress). Your income and credit profile will be checked once again to ensure nothing has changed since the initial approval.
A loan commitment letter is issued only when the bank is certain it will lend, so the commitment date on your purchase contract should be closer to closing than to the date of your offer. (The seller can ask to see that letter as soon as the date has passed, so beware of anyone who tries to put an early commitment date into your contract).
One Last Word
Be warned. Pre-approved and pre-qualified are not the same thing, so don’t assume that the bank will provide your loan until you have the former. The mistake could cost you your new home!
————————————————————————————————————–
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————–