Tag Archive for canada mortgage and housing corporation

Best Practices for Hiring a Contractor

1. Build a Short List

Despite there being tens of thousands of contractors in throughout Canada, it’s surprisingly difficult to find one. Here’s what you can do to build a list of potential candidates.

Neighbours and Fliers

One really great way of finding a contractor is simply by collecting and saving those ads you receive all year from local contractors in your area.

Ask Friends and Family

This is a good first step but you should be a bit wary of references from friends and family – there could be some bias in their referral. More importantly, contractors on larger jobs work in teams and the team that worked on your friend’s renovation may not be the same team that works on yours.

Online Classifieds

Websites like Craigslist and Kijiji are great for buying and selling items locally but remember that contractors can list their businesses there completely anonymously and for free. This should be a last-ditch place to look if you really can’t find someone.

Online Search and Directories

Google and rating and review sites are a great next stop. The thing to watch for here is that a search engine’s ranking is not related to a contractor’s quality. Just because a contractor appears at the top of your search doesn’t mean they’re the best in the city. Check those that do rank high by also searching specifically for their business name. See who has written about them and see who links back to them. If the websites that link back are legitimate – i.e. not just spam sites – it’s a good sign. If they’re linked back from sites that verify their qualifications, it’s an even better sign.

Sites Like uknowa

If searching for contractors doesn’t sound like the way you like to spend the first two weeks of your renovation, sites like ours offer a way of posting a job and having contractors come to you.

2. Check References

Not only will the contractor be coming to your home and interacting with your family, you don’t want them to disappear when they’re in the middle of a finished basement renovation.

Check or ask for a list of the following when interviewing contractors for your project:

Past customers – ask if they were satisfied with the contractor and their employees’ performance, the quality of workmanship, and whether the project was completed on schedule. Also ask if the contractor kept their work area clean and if there were any unpleasant situations that arose during the project.

Building material vendors – most contractors have building supply vendors they favour and you should ask him or her to provide you with a few names. Check that the contractor pays his bills on time.

Canadian Council of Better Business Bureaus –check with the Better Business Bureau for any bad reports on the contractors you’re considering.

3. Check Their License

Hiring an unlicensed contractor might seem like a good way to save a few dollars, but it could cost a bundle if things go wrong. If your home insurance company can prove that you knowingly hired an unlicensed contractor, they may not cover any damage that might be left behind.

Every province and territory in Canada handles licensing differently. If you are planning a kitchen remodel, finished basement renovation, bathroom remodel, or just hiring roofers to install shingles, there’s a pretty good chance that the contractors involved need a license.

Contact your city’s licensing office before signing any written contract.

4. Understand Contractor Insurance

Imagine a scenario where an employee of the roofing contractor you’ve hired has an accident while working on your home. Or the contractor who’s renovating your basement accidently floods the lower level of your home. Who pays for the bills? If your contractor doesn’t have insurance, the answer might be you, or perhaps your homeowner’s insurance policy.

At a minimum, your contractor should have:

Public Liability and Property Damage Insurance – covers damage to your home or property while your project is underway.

Vehicle Insurance – most accidents involving contractor vehicles on your personal property should be covered by the contractor’s liability insurance policy.

Workers’ Compensation Insurance – helps with medical costs caused by jobsite accidents and can also provide some income for the worker while they’re recuperating.

5. Create a Contract

It just takes one bad experience to make you wish there had been a written contract for the job.

What Your Contract Should Include The complexity of your contract is normally determined by the size of your project. The following items should be covered within the contract:

* Blueprints or project drawings with the latest revision date
* Site plans and permits if the project is a separate building or home addition
* Warranty information

An in-depth description of the scope of work including a list of any special fixtures or appliances agreed upon. This description can be the original estimate for the project if it’s detailed enough and all parties agree to include it as an addendum.

Where To Find Contract Templates

One of the easiest places to access contract documents for your project is the Canada Mortgage and Housing Corporation at the Government of Canada website : CMHC Sample Home Renovation Contract

A few books you may find helpful for setting up your contract:

Ready, Set, Build: A Consumers’ Guide to Home Improvement Planning & Contracts by Steve Gonzalez

The Homeowners Guide to Managing a Renovation: Tough-as-Nails Tactics for Getting the Most for your Money by Susan E. Solakian

uknowa.com is the online matching engine that easily connects homeowners with qualified and available local contractors. Like word-of-mouth on steroids, uknowa allows homeowners throughout Ontario to post their renovation and repair jobs for vetted, interested and available local contractors and receive multiple bids within 24 hours, allowing them to easily compare prices and be confident they are paying the right price for their job. uknowa.com is the answer to the question we all ask our friends when we need to hire someone to do a job: ‘Do uknowa’ good contractor?’

————————————————————————————————————–

Contact the Jeffrey Team for more information  -  416-388-1960

————————————————————————————————————–

Incoming search terms for the article:

CMHC Survey Shows Homebuyers Taking the Time to Plan

Canada Mortgage and Housing Corporation (CMHC) released its 2011 Mortgage Consumer Survey today providing insight into the attitudes and behaviours of Canadian mortgage consumers.

The survey found that the internet continues to be a valuable resource for homebuyers. Among recent buyers using an online search engine, the most popular search terms included interest rates (86%), mortgage options (76%) and mortgage calculators (69%). Of those who noted using the internet during their research, 86% used an on-line mortgage calculator, 56% printed information, 54% did a financial self assessment and 50% researched other financial products.

Results also showed that Canadians take, on average, 11 months to plan their purchase while the majority of homebuyers (88%) indicated they had a good sense of how much mortgage they could afford before purchasing a home.

“Buying a home is one of the biggest financial decisions most Canadians will make in their lifetimes” stated Pierre Serré, Vice President, Insurance Product and Business Development. “CMHC is committed to supporting homebuyers throughout their decision making process.”

As Canada’s national housing agency, CMHC offers a number of online tools, such as the Household Budget and Mortgage Affordability Calculators, and publications, such as Homebuying Step-by-Step, to support Canadian homeowners and homebuyers as they pursue their housing goals.

“Through our online calculators and resources, CMHC will continue to support Canadians in the making of informed and responsible home buying decisions” noted Serré.

The survey also found that three-quarters (75%) of recent homebuyers felt it is very important to pay-off their mortgage as soon as possible while many have already taken steps to do so. Almost four-in-ten (39%) recent buyers have their mortgage payment set higher than the minimum required while 20% have made a lump-sum payment since taking out their mortgage.

Further, most home buyers (80%), to some extent, follow a household budget and when establishing their budgets assessed to some degree, the impact of rising interest rates (71%), the impact of a loss of income (69%) and the impact of rising expenses (79%). Moreover, 81% of recent buyers have set aside money in some form of additional savings.

However, opportunities exist to enhance the service and education provided to mortgage consumers. The survey also showed that during their mortgage research 23% of first time buyers received advice on budgeting while 18% received advice on managing debt. In addition, the survey found that one in four (25%) recent buyers is not sure where to go to receive reliable advice in case of financial difficulty.

————————————————————————————————————–

Contact the Jeffrey Team for more information  -  416-388-1960

————————————————————————————————————–

Incoming search terms for the article:

How mortgage insurance can help buy a house

By Krystal Yee – Toronto Star Moneyville

For many  first-time home buyers, coming up with the 20 per cent down payment required to qualify for a mortgage without paying extra for insurance is tough. So most first-timers end up having to pay for the insurance, which can cost anywhere from  half a per cent  to 2. 9 per cent of the total mortgage amount.

The Canada Mortgage and Housing Corporation (CMHC)  provides the insurance which protects your bank against from a default. This means, if you can’t pay and the bank can’t get its money back after it has sold your property, the insurance will cover the lender’s expenses.

Here are a few more things you should know about mortgage loan insurance:

Self-employed people pay more
Homebuyers who have a stable income will have a lower insurance premium than those who own their own business or are self-employed. For example, a homebuyer with a stable job who puts down 10 per cent on a property would have to pay 2 per cent mortgage loan premium. If a self-employed person without income validation put the same 10 per cent down on a property, they would have to pay 4.75 per cent. That’s a huge difference!

What this means is, if you have a stable job and were to buy a $500,000 house with a $50,000 down payment (10 per cent), you would pay $9,000 for the insurance. But, if you were self-employed without income validation and put the same $50,000 down, you would have to pay $21,375.

25-year or 30-year amortization
Homebuyers who choose a 30-year amortization will pay what is called an Extended Amortization Surcharge. This adds an additional two-tenths of a per cent to the insurance premium. On a $100,000 home with 5 per cent down and a traditional 25-year mortgage, you would pay $2,612.50 as a premium. With a 30-year mortgage, you would pay $2,802.50.

There are payment options
The mortgage loan insurance can be paid in cash, or the homebuyer can choose to blend the premium into their mortgage payments. Most borrowers blend the payment because even though they will be charged interest on the premium, it allows them to pay the amount off over the life of the mortgage, instead of incurring a large one-time fee.

Get environmentally friendly
CMHC offers an incentive to purchase environmentally features. If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations, or renovate your existing home to make it more energy-efficient, you might be eligible for a 10 per cent refund of your mortgage loan insurance premium. You could also have the added flexibility of an extended amortization (up to a maximum of 30 years) without a premium surcharge. This is a great incentive that will allow you to save money and help the earth.

In order to qualify for mortgage  insurance:
• The home is located in Canada.
• You must have a down payment of at least 5 per cent of the price of a single-family or two-unit dwelling.
• You must have a down payment of at least 10 per cent for a three or four-unit dwelling.
• Your total monthly housing costs should not exceed 32 per cent of your gross household income.
• Your total debt load should not exceed more than 40 per cent of your gross household income.

Please visit the CMHC website for more information.

Mortgage insurance allows homebuyers who cannot come up with a 20 per cent down payment to purchase a home of their own. For many first-time homebuyers, it seems to be worth the cost of the premiums compared to the idea of potentially never getting into the housing market.

I am trying everything that I can to avoid paying   mortgage insurance,  although I must admit, saving 20 per cent of the cost of a home in Vancouver is a pretty daunting task. And, while the premium might not seem like a lot of money when compared to the size of a mortgage, rolling it into the life of a mortgage will end up costing you much more in the long run once interest over 25 or 30 years is calculated.

————————————————————————————————————–

Contact the Jeffrey Team for more information  -  416-388-1960

————————————————————————————————————–

Incoming search terms for the article: