Friday, September 21, 2012

A Smaller House

Tips for buying a smaller house that is more affordable:

Truth #1: Rising interest rates hurt more with a bigger, more expensive house. With gobs of people wondering how they’ll manage their whopper mortgages because of the spectre of rising interest rates, smaller is starting to look sweeter. We’re at the tail end of a generation-long cycle of declining interest rates, so people are thinking about how their increasing costs will squeeze their cash flows when they have to renew their mortgages at higher interest rates.
Truth #2: No down-payment mortgages are gone. They were stupid to begin with. They let people who had done no planning for home ownership into an arena many weren’t prepared for. They got eaten by the lions. If you can’t afford to save a downpayment, you likely can’t afford to be a homeowner.
Truth #3: Longer amortizations cost way more money. Choosing a 35-year amortization on a mortgage was the only way some people could afford the huge homes they were buying. The fact that they would end up paying almost three times the cost of the home after all was said and done seemed of little concern. With the shift to getting out of debt, which, please God, I hope is firmly taking hold, a 35 year mortgage is far less attractive to smart home buyers.
Truth #4: A home is a place to live, not a retirement savings account. The era of double-digit annual gains in home prices is gone. Tying up all your money in mortgage payments when you should be investing for retirement is far less attractive now. Buying smaller means more money for RRSPs, TFSA and unregistered investment portfolios.
Truth #5:  Smaller homes have lower carrying costs. It’s not just the mortgage. It’s the property taxes and insurance. It’s the utility bills and maintenance. And it’s all the stuff it takes to furnish a bigger home.  Spending less to keep your home all gussied up means more money for a life now, and a future.

Source: Gail Vaz-Oxlade

Thursday, September 13, 2012

What Does a Home Inspection Entail?

There are four basic steps to the home inspection.

First, the inspector arrives at the property, makes general introductions and both explains what is going to take place and asks about any special questions or requests.

Next, while the inspection agreement is being reviewed, the inspector will make a quick circuit of the property to size up the scope of the inspection.

Then, there will be an in-depth walk-through inspection with the client. This involves inspecting all visible areas and reviewing all accessible items and areas, including the heating system, central air conditioning system, interior plumbing and electrical systems, the roof, attic space and all visible insulation, the walls,ceilings, floors, doors, windows, basement or crawlspace area, and the foundation and all visible structural components. Any questions or items of special interest regarding a particular system or structural component are usually addressed at this time.

Finally, a check of the entire property is made to verify that the condition of the property is the same as when the inspection started. After this last circuit, the inspector will complete the hard copy of the inspection report. All deficiencies and maintenance recommendations will be noted and a recap of deficiencies will be entered onto the summary sheet for the client.

Source: Active Rain