Localism: North, AB

How Credit Score Affects Your Interest Rate

Tue, 16 Sep 2008 17:17:18 -0500

Each year thousands of prospective homeowners are shocked to discover their credit history will hinder their ability to own their dream home.

The very first thing that your loan officer checks when you apply for a mortgage or any kind of credit is your credit score. You are rated in terms of the score which in most cases influences the amount you can borrow. Understanding your credit score in a better way enhances your chances to develop a higher score and thus benefit from loans at better terms and conditions.

A credit score consists of many factors: your payment history, your credit card balances, bank accounts, including savings and checking accounts, and any other form of credit including all outstanding personal loans, mortgage loans, store credit cards, etc.

Credit scores are calculated from many different forms of credit data in your credit report. Each credit reporting bureau has their own standards and formulas that they use for the purpose of calculating a consumer's credit score. The following is a generalized classification of a credit score rating:

Excellent credit rating - No late payments, no collection notices, no bankruptcies or repossessions.

Good credit rating - May contain a late payment within the last two years.

Fair credit rating - More than one late payment. May or may not have a bankruptcy or repossession in the last two to three years.

Poor credit rating - Recent collection attempts, late payments within the last year, bankruptcies and/or repossessions within the last two to three years.

The reason why a credit score is important is that it will determine your eligibility for a loan. A low credit score may hinder approval, and it will also impact the interest rate you will have to pay for the money that you borrow.

Since individuals with less than perfect credit traditionally present more of a risk of defaulting on a loan. Lenders are able to justify charging more interest to those consumers. The extra interest the lender earns on the loan is intended to compensate the lending agency in the event the consumer defaults on the loan. Over the course of a 15 or 30 year mortgage, those extra interest points can add up to an astounding amount of money.

Your credit score is the indication of your financial health. You should do your best to avoid damaging your credit history with late or missing payments, too many outstanding loans or too many loan requests. Watching your credit score closely especially before you make any major purchases will help you avoid unwanted surprises.

The Giants of Mining

Fri, 12 Sep 2008 08:59:30 -0500

The sun sets on an old buckethauler at Syncrude's oil sands project on August 28, 2006. The mining is now done primarily with trucks and shovels.

The entire site runs virtually non-stop 24/7 including huge Caterpillar mine trucks hauling their payloads at Shell's Muskeg River Mine project in the Alberta Oil Sands north of Fort McMurray.

Let's Get Started! Helping people is what I do! Taking the stress of buying or selling a home out of your next transaction is my goal and commitment to my customers. Visit www.McMurraysBestHomes.com

Now serving 89,000 in Fort McMurray

Fri, 12 Sep 2008 08:49:29 -0500

Most people arriving in Fort McMurray are looking for jobs; looking for the opportunity to pocket some of the financial benefits of working in the oilsands capital of the world.

But a recent look-see by a couple of big names had more to do with what was going on there than it had about money. The first- and third-ranked richest men in the world recently came to this northern Alberta city, mostly out of curiosity.

A source for Warren Buffett, chairman of Berkshire Hathaway Inc., and Bill Gates, co-founder of Microsoft Corp., says the duo came to McMurray to "satisfy their own curiosity," but also with "investment in mind." Both men have recently said they favour investing in Canadian oilsands because it offers a secure supply of oil to the United States.

The quick-hit visit may have given the men an overview of the industry, but may not have been enough time to get the full tour of the city, or to find out the downside of the multi-billion-dollar oil play, such as the lack of housing -- a major issue facing the largest municipality in the Wood Buffalo regional district -- coupled with continued expansion of population growth as workers far and wide arrive looking for their share of the oilsands pie.

"Oilsands development continues to be the main economic drive in Wood Buffalo," says Richard Corriveau, Prairie region economist for Canada Mortgage and Housing Corp. "Current production is full speed ahead, with more than $107 billion worth of projects either being proposed, under construction or completed."

Expansion of the region's oilsands region has led to more employment opportunities and as of the end of May, there were an additional 4,900 jobs compared to a year earlier -- and all of them are full-time positions.

Since 1999, the average annual population growth in the municipality has been nine per cent, says Dennis Peck, general manager of planning and development for the Regional Municipality of Wood Buffalo.

"But when you include the addition of new work camps, the rate of growth was 16 per cent in 2007 alone," he adds.

The 2007 municipal census put the regional population at 89,167, with more than 65,00o of whom living in Fort McMurray.

There are the obvious strains that growth has put on infrastructure, but regardless, housing demand remains high as all economic indicators continue to surge ahead, says Corriveau.

In addition, there is also a certain level of pentup demand for housing as serviced land was at a minimum.

"Was" is the key word. A decided lack of land is the major reason single-family construction will drop by nearly 21 per cent this year and why multi-family work will fall 39 per cent, according to CMHC figures.

Now, the region has annexed and serviced two parcels of land -- Parcels D and F -- and combined that with more land in the Timberline area of the city they will contribute over 5,000 housing units in the coming years. In addition, the province earlier announced plans to develop 1,600 hectares of land in Saline Creek Plateau and Parsons Creek.

Peck estimates together, these developments will be able to house 55,000 people at buildout, with 40,000 of them living in Saline Creek Plateau and Parsons Creek.

So with new construction on Parcels D and F, CMHC expects single-detached starts to increase and relieve some of the pent-up demand. This year, single-family starts will total 750 units. Despite the decline, 750 starts is still above the five-year starts average. In 2009, detached starts are expected to rise by 13 per cent to 850 units.

On the multi-family side, starts produced a record year in 2007, with the majority of units being sold as apartment condominiums.

Another 750 multiple-unit starts are forecast for 2008, as prices for single-detached units continue to climb. There will be more emphasis on multi-family construction in 2009 as buyers react to higher prices in both the resale and single-detached sectors. Starts are expected to reach 925, up 23 per cent over 2008.

For the seventh consecutive year, MLS sales reached a new record, with 2,373 in 2007.

"As we move further into the forecast period, sales are expected to ease off of record activity as the average MLS price climbs higher and buyers look to new homes over resale homes," says Corriveau.

This year, CMHC forecasts sales to fall by one per cent to 2,350. Another drop of two per cent is expected in 2009, which will bring year-end sales to 2,300.

Selling prices, though, will go up. Following growth of nearly 24 per cent in 2007, the average resale price is still expected to climb but to a lesser degree over the forecast period due to a decline in sales activity and an increase in active listings.

This year, the average price is forecast to increase by 17 per cent to $540,000, then in 2009 the average price is expected to reach $585,000, an eight per cent increase.

Despite slower price growth over the forecast period, Wood Buffalo will continue to have the highest average resale price out of the seven largest centres in Alberta.

Understanding the hidden costs of buying a home

Thu, 04 Sep 2008 11:54:40 -0500

Purchasing a home can be a stressful experience for anyone, but especially for first-time buyers who may not be aware that there are a host of costs associated with buying a home other than the actual purchase price and real estate commissions. It helps to know what those costs are in advance rather than get an unexpected surprise at closing and add to an already stressful experience.

Many of the costs are a factor of the purchase price, the value of the home and/or the amount of financing you are obtaining.

Closing costs. These generally refer to legal fees, property tax and utility adjustment costs and, in some provinces, land transfer taxes.

Legal costs go to cover lawyer (notary in Quebec) fees and legal transactions such as reviewing the terms of the offer, preparing and signing a mortgage, conducting a title search on the property, registering a new title, obtaining relevant documentation and determining appropriate adjustment costs.

You should consider hiring a real estate lawyer to handle your transaction. If you don't have or know of a lawyer, your best referral source is family or friends, or through the law society in your area.

Land transfer tax. In some provinces this tax is levied when property changes hands. It varies with the purchase price of the property.

Other costs. Costs other than closing costs can include but are not limited to the following:

Property Survey. This is undertaken to verify the location of property's boundaries, measurements and structures and identify any easements, rights of way or encroachments on your, or adjacent properties. Title insurance is often an alternative to a property survey.

Interest Adjustments. This covers any interest accrued between the closing date of the purchase and the first regular payment date of the mortgage.

Goods and Services and Sales Taxes. GST and sales taxes will depend on the type of property being purchased. Always ask if either or both of these taxes apply before signing an offer to purchase.

Service Charges. These are charges to hook up utilities such as electricity, gas, and telephone service.

Home Inspection. It can be a good idea to have an inspection done before completing the purchase to evaluate the structural and mechanical condition of the property. This could save you lots of money in future repairs.

Appraisal fees. Some purchasers want to ensure they are paying a reasonable market price for the home they are purchasing. You may want to condition your offer subject to a satisfactory appraisal by a member of the Appraisal Institute of Canada.

Mortgage Life Insurance. Special insurance coverage to cover the cost of discharging your mortgage in the event of death or severe illness is available from most lenders.

Moving costs. Although it may sound obvious, purchasers may not consider moving as a cost of buying a home. Moving costs will depend on the distance of the move and the amount of furniture and goods to be transported. Get several movers in to give you an estimate before choosing one.

Appliances. Check to see whether appliances are included in the purchase agreement. If not, you will need to go out and buy them.

Landscaping, Fencing, Decks, etc. If purchasing a newly constructed home, keep in mind that there will likely be a need to landscape and fence the yard in the first year or two.

Annual maintenance. Homes like other possessions require care and maintenance to maintain their value. You need to plan for future painting, and replacement of any needed items like roof shingles, appliances, furnaces, depending on the age of the home you are buying.

CLOSING COSTS SAMPLE CALCULATION FORM

To assist you in preparing for closing costs, Dominion Lending Centres has created this document so that there won't be any surprises come closing time. Please contact me with any questions you have regarding any of the below items. Costs will vary.

$	Property Transfer Tax First Time Buyers are exempt in most cases
$	Legal Costs Sample costs are; actual legal fees, title filing, mortgage filing, insurance binder, form A certificate, out of pocket expenses etc.
$	Interest Adjustment This is the interest you will pay for receiving your mortgage money before the official start of your mortgage. (eg. if your "completion" were on the 23rd of a 30 day month, your interest adjustment would be 7 days interest)
$	Property Tax Adjustments Most municipal taxes are paid July 1st, for the calendar year If you purchase a property before July 1st, the seller will be paying you for the days they owned the home after January 1st, and you will pay the city. if you purchase a property after July 1st, the seller will have already paid the city and you will pay the seller for the days you own the property up to December 31st
$	Property value Appraisal (included if CHMC/Genworth insured)
$	Property condition Inspection (optional)
$	Property survey certificate (not required if condo or townhouse) Sometimes available from seller if they previously had a mortgage
$	Fire Insurance (not required for most condos or townhouses)
$	Moving Expenses and post office Change of Address and Mail Forwarding service
$	Utility Connections (telephone, electricity and gas, cablevision...)
$	Strata Costs Adjustments (if applicable)
$ _________ TOTAL

8 Reasons Why You Should Work With a REALTOR®

Tue, 02 Sep 2008 13:05:10 -0500

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here's why it pays to work with a REALTOR®.

1. Navigate a complicated process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multipage settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They'll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Help finding the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Negotiating skills. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn't sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner's contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

6. Someone who speaks the language. If you don't know a CMA from a PUD, you can understand why it's important to work with a professional who is immersed in the industry and knows the real estate language.

7. Experience. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. Even if you have done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Objective voice. A home often symbolizes family, rest, and security - it's not just four walls and a roof. Because of this, homebuying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they'll every make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

For you Real Estate needs in Fort McMurray, Alberta please call Patrick Dardis 780 215 7355 or visit my web site at www.McMurraysBestHomes.com