James C Tworek

As a team of Professional Calgary Mortgage Brokers, we get asked this quite a bit and we’re always happy to help guide our clients through the haze. There are a series of related questions that we’ll walk through here in order to help clarify and simplify the process.

When is an appraisal required?
If you’re a homeowner, you’ll likely only need to order an appraisal of your property if you’re wanting to refinance. In some cases, by renewing or breaking your current mortgage term your lender could request an appraisal as well.

If you are financing a home with a high-ratio mortgage (greater than 80% of the property’s value is financed), your appraisal costs - if required - are included in your CMHC/Genworth insurance fee, so no out-of-pocket expense for you.

If you are financing (purchase or refinance) a residential property with an un-insured mortgage (ie: you have 20% downpayment or greater), an appraisal is generally required and so is its relative expense.

Some lenders have the internal infrastructure that allows them to offer the services of their in-house appraisal system for both purchase and refinance transactions. For refinance transactions, your lender may also streamline the processing of your transaction via their in-house legal department for a reduced cost (varies by lender).

How much should an appraisal cost?
In Calgary, the average appraisal cost that our colleagues charge is in the range of $325+ GST - $380+ GST for a 'standard' single residential home or condo. Larger homes, homes on large plots of land (acreages), bare land and properties outside of major cities and 'unique' properties will generally have a higher cost relative to the increased amount of time and effort that would go into the work.

From time to time, your mortgage lender may also 'waive' these costs for you (seasonal 'sale'). For new builds, some homebuilders and developers offer a reduced rate or *sometimes* no-cost legal services for closing your new home purchase via their legal partners... be in the know and save some dough!


How is an appraisal’s value determined?
We are not Appraisal Professionals, but generally speaking, you may find that the appraisal value of your home may differ from what you're seeing other homes actively list for in your area. Ask your Appraisal Professional for more information about this, but I'll try to paint with broad strokes: Appraisals will take into account two different approaches to your home's valuation. From one perspective, they will look at a 'cost to rebuild' the same property based on current economics. The other perspective is that they will take a 'market' approach and review similar properties that have sold on the MLS system and in the marketplace over the last 90 days (preferred) or fair relative time frame (usually with properties in rural or smaller communities if the average sales time is longer). Finally, your Appraisal Professional will calculate an average between these two values (cost to rebuild + market approach) in order provide a fair assessment of where the property's value is at that exact point in time.

It is important to note that appraisal values can differ from what a Realtor may coach you on in terms of prospective sales values. Appraisals deal with hard-fact proof of sales values for trades that have closed within a fair and relative timeline. We are not Realtors either: to speak broadly, a Realtors' assessment of where to 'price your property when listing for sale' will be a reflection of what is currently listed for sale (pre-negotiation, non-closed sales), past comparable (closed) sales as well as your need or drive to sell your property (emotion, financial need).


When is an appraisal and/or a property inspection required?
In addition to the answers above: if you're purchasing a new home, your Realtor and your own education in reviewing general property pricing (welist.com, comfree.com, kijijii.ca, craigslist.com are general, free sources of education and information) should be able to help you justify the price that you're offering to pay. If your offer is in the general range or on the low side of the overall current market pricing, the valuation of the property would generally be quite 'safe' and acceptable to your lender. In the case that the valuation of your purchase price and the lender/insurer’s perception of current value differ dramatically, it is common that an appraisal would be required. In addition, depending on your financing strategy for the property, the actual valuation of the property that you intend to purchase will likely be taken care of as part of the mortgaging process.

At what point in the transaction should I order a home inspection?
Your Realtor can coach you on the necessity or recommendation of making your offer conditional upon several things (inspection, review of condo documents, minor visible repairs, etc). Once your offer goes 'conditional', depending on the property’s age, condition and history, there's a huge amount of value in taking the time to hire a walkthrough of the property with an inspector: there are so many variables in a home that you can't see with your own eyes but that an inspector will poke, prod, open up, crawl under and dust off for you.

Beyond our own team's personal experiences with this, we've had many clients report back that working with the inspector was the most interesting, educational and money-saving way to spend +/- $400: it's literally a 3-4 hour 'crash course' on your property and it provides as much value for condos as well as homes, new or old. Check the roof, mechanical (heating/HVAC), plubming, electrical, structure, windows, doors, etc... They'll uncover things like "you will likely need a new water heater in 'x' years", "the foundation has shifted and that could mean cracking and subsequent water/mould damage", etc... These are all good things to know - you can either re-negotiate your offer down or back out altogether if the property isn't up to your standards and desires.

How much does a home inspection cost?
+/- $400 is a small price to pay for the peace of mind knowing to uncover 'hidden evils' that you can't detect by yourself and the vendor/developer might but doesn't choose to disclose. With 11+ years in the finance/Real Estate business, I've heard some horror stories as well as have lived through a few myself... buyer beware!

So now you know the ‘hidden truths’ of your home and you’re still comfortable with going ahead with the purchase… now what?
If the inspection goes well but uncovers a few minor updates or renovations to improve the property's condition, beyond negotiating a better price on the home, you can actually request that your mortgage lender include an allowance for these repairs: it's called a 'purchase-plus-improvements' mortgage and it can cover renovation expenses of up to 10% of the value of the home. Any major renovations that cost beyond this 10% threshold, such as large additions/extensions or whole-scale remodeling of the property requires a similar financing product called a ‘construction draw’ mortgage.

The purchase-plus-improvements mortgage works like this: you still purchase the property with the (anticipatedly) lower purchase price and include a spec sheet and/or contractor quotes for the repairs/replacements that are required. Once the work is complete (you normally have up to 90 days to complete the work), your lender will complete an inspection and if it's complete and up to snuff for them, they'll cut you a cheque immediately and reimburse you/pay your trades off right away. The value of the renovations gets rolled into your mortgage amount and your monthly payments increase (slightly) relative to the renovation expenses.

Pretty cool, eh? It sure beats maxing out your credit cards and lines of credit AFTER you get into a new place!

Helping you make educated decisions about your real estate purchases,

James C. Tworek and the Trimor team!
www.trimormoney.com

Monday was a busy day to say the least!

Preparing for the AMBA Industry Night was nerve-wracking as we received our collapsible tradeshow booth late in the day and were unable to set it up as I arrived late to the venue. Never shy in the face of ‘interesting’ luck, I rolled up my sleeves, spread out the promo-educational tools that our team created and started to shake hands with this season’s wave of new mortgage associates.

I had a great time meeting with some of Calgary’s mortgage brokerage community ‘old guard’, young guns and newbies all at the same time! Even cooler: I've been so swamped with calls from new potential team mates since the event that it's taken me THIS long to post about it!

Some great lessons learned from this trade show:

o Learning the general profiles of the the Newbies entering the industry:

- What are they looking for in terms of the parent brokerage where they will ‘hang their hats’?

- What is their professional background?

- Where are they coming from and where will they find some of their successes?

o The common questions that they ask, how to help them grow beyond the "how much do you pay; how many free deals will you give me?" cycle. We all want freebies! We'll teach you "how to fish" and that will GUARANTEE your success if you invest the effort.

- What are other brokerages offering in terms of their ‘USP’ to the new agents coming on the scene?

- Who the ‘most motivated’ brokerages are: who else is trying to grow? How can we grow together? My take on it is that sure we're direct competitors in one sense, but there's also a TONNE of peripheral competition that we can align ourselves against as an industry to guarantee the growth and success of Canadian Mortgage Brokers as a whole. Isn't this why ABMA and CAAMP exist in the first place?

- Some interesting points of conversation with the up and comers as well: team support, planning, more ‘group’ presentations from each brokerage that was there, maybe a presence by some of our lenders?

How Trimor sizes up:

We’re always looking to grow our team with quality people and support their growth through the rigours of their career startup and long-term success in this industry!

First off, we’re a Calgary-based mortgage brokerage that promotes a family atmosphere of support and mentoring while providing opportunities for its associates to grow and prosper through superior administrative and sales support and excellent compensation.

Other reasons why Trimor is a great choice for helping Mortgage Associates make the transition into the Mortgage Brokerage industry:

- We consider it an asset and competitive advantage that we have a formal office space for our Specialists to work from. We are located at #207, 264 Midpark Way SE. For obvious reasons, we recommend being in the office environment for the first 3-6 months for training, education and mentoring. Having said this, we do not ‘chain’ our associates to desks either: we openly encourage our team to be out of the office for appointments, work with their clients and referral sources and growing their businesses. Further, some people prefer to work from home as they already have offices set up: beyond basic and ongoing training, we respect and encourage that as well!

- We have team training sessions as well as one-on-one tailored training programs based on where our new Specialists are coming from, where their strengths are and where they feel they need to grow more. - We take every effort to support your entry, growth and long-term success in the industry. Many brokerages don’t ask for much in terms of a business plan from their team members: we do. We feel that this helps our team set goals, maintain focus and work towards them

- We believe in actively training our Specialists hands-on as we work on files together: shadowing, mentoring and actively supporting their interactions

- We have a no-added-cost internal administrative structure that helps to free up much of our Specialists’ time to help them focus on growing their business instead of processing paperwork.

- We actively encourage and support our Specialists’ marketing efforts on a national, local and personal level: training, providing product and mentoring through the process.

- We are a ‘work hard, play hard’ team of professionals that believes strongly in a solid work/life balance. There are times where we are overrun and overtime is a reality of this career; we try to offset this with fun team outings and events. From another perspective, It is far too easy to spend long hours in front of our computer screens as we work diligently for our clients on a day-to-day basis. Having said this, life is too short to only work hard – we will train you to work smarter so that you can make the most of your working hours, successfully uphold your clients’ needs AND have an enjoyable ‘home life’ all at the same time.

If you’re interested in learning more about how we here at Trimor can support your career growth and transition into the Canadian Mortgage Brokerage industry, please feel free to contact us at jobs@trimormoney.com for more information!

To your growth and success,

James C. Tworek and the Trimor team!

www.trimormoney.com

When planning renovations, don’t overlook the value of your yard. Nothing adds more immediate curb appeal than attractive landscaping. Choosing the right plan will definitely make your home more saleable. Even if you’re not planning to sell anytime soon, you can enjoy the benefits of enhanced landscaping and be confident they have lasting value.

Long-lasting community appeal is something that its residents need to work at consistently in order to maintain: this effort will be reflected in the overall desirability of the neighborhood to its current residents as well as prospective buyers’ willingness to pay top-dollar for your home. More so than simple pride in my own home – please allow me to “geek out” for a minute – I’m a firm believer in the broken window hypothesis and preventing its negative effects from affecting the neighbourhoods that I live in.

Amidst the literal maze of options to update and refresh my own home, my wife and I felt that we had spent enough time painting and replacing hardwood (amongst other upgrades) that we should finally take a look at the outside of the home and increase its eye-appeal to drivers-by. Although initially daunting, it’s some simple and cost-effective changes dramatically improve the immediate as well as long-term curb appeal of the home.

Something interesting: how well do you know your neighbours? As my wife and I were out ‘playing in the dirt’ as we upgraded our yard ourselves, we were amazed that people from all over the neighbourhood would walk up to us and strike up conversation – many of them appreciative and some congratulatory of us working on the project ourselves. In one case, my neighbor two doors down started digging holes, planting new shrubs and doing some eye-catching brickwork on his yard… perhaps there’s a counter-point to the ‘broken window hypothesis’ in that it works both ways?

It’s good sense to run any contractor – from painters to carpenters to landscapers - through a gauntlet of questions and price quotes before making my final decision on the plan of action. To give you an idea of the range of painting quotes, we’ve gotten hit with everything between $11,000 to $3000 for the same service. For landscaping? Between $3500-2000. We’re pretty handy and did it ourselves for less than $1000 all-in for BOTH projects. My own experience reinforces my gratitude towards family members, friends, neighbours and colleagues with more experience than I – and are willing to lend some insight (and a helping hand from time to time) as well. A Realtor’s insights and market savvy are also a wealth of knowledge waiting to be tapped in order to sell your home.

Here are some landscaping strategies that offer the highest return:

- Concentrate on the entryway of your house—that’s what buyers see first. Replace worn-out stairways with decorative concrete blocks. Make it staggered or curved for extra impact, and edge it with raised planters. Continue the raised planters along the front of your home to enhance drainage and tie the landscaping into the architecture.

- Xeriscaping your yard—a style of landscaping that requires little irrigation or maintenance—is inexpensive to do, saves ongoing costs and appeals to today’s time-squeezed buyers.

- Adding a deck is a (relatively) inexpensive way to increase the apparent floor space of your home. Make outdoor and indoor space blend seamlessly by using French doors and indoor-style light fixtures and furnishings. The deck shouldn’t be more than one-third of the square footage of your home’s main floor.

- Replace hard-to-maintain slopes in your yard with terraces that feature plantings or mini patios with furniture.

- Add lush vegetation, but don’t go overboard. Everyone—including you!—enjoys green, leafy surroundings. But few buyers—including you!—like high-maintenance gardens. Choose hardy perennials and shrubs, and use ground cover planting to reduce weeding and watering.

- Getting closer to fall (August/September here in Canada) and the end of the growing season, it’s still safe to purchase and plant trees, shrubs and other types of hardy vegetation in your yard. Checking out your local nurseries around this time of year can yield some great savings on trees and shrubs – sometimes in the range of 35-75% off! Sure, there is likely to be less product variety, but even running from one Home Depot to the next or between different nurseries can save you literally hundreds - if not thousands - of dollars depending on the scope of your project.

If you’re on the verge of purchasing and are planning to stay in your home for a long time, you could contemplate a Purchase-Plus-Improvements mortgage to cover the expenses of landscaping, appliance purchase and renovations to update your home as you move in. On the flip side of the coin, if you’ve been living in your home for a while and are looking at updating its appeal to a prospective buyer, chances are you already have enough equity in your home to pay for everything—and with today’s record-low HELOC and mortgage rates, you’ll probably end up with lower mortgage payments too!

Helping you enjoy your property more and maximize the sale value of your home,

James C. Tworek and The Trimor Team!

www.trimormoney.com

Did you know that if you were to just make simple monthly payments throughout the life of your 25-year mortgage, you’d end up paying more than DOUBLE than your original purchase price over time? Even scarier: if you were one of the ‘lucky’ ones that was able to catch a 40-year amortization, you’d spend around THREE times your original purchase price?

Don’t believe us?

Check out our monthly mortgage calculator and see for yourself!

Here are some effective ways to pay off your mortgage sooner, build equity faster and save thousands in interest.

• Change your payments. Simply increasing your payment frequency to bi-weekly or weekly costs nothing and can save thousands of dollars over the life of your mortgage. If you can afford to pay a little extra, consider accelerated bi-weekly payments— this will make the largest ‘dent’ in your mortgage over time for two reasons:

a) There are 52 weeks in a year; divide this in two (bi-weekly) and you’ll get 26 payments per year. This will let you squeeze in two more payments than a semi-monthly (12 months x 2 payments per month = 24 payments) frequency.

b) Because you’re paying more frequently, you are actually fighting the compounding of interest over time, therefore working towards paying off both mortgage interest and principal a bit faster every two weeks.

• Make lump sum payments which can realize savings several times as great over the life of your mortgage. Depending on what your mortgage contract allows for, you may be able to throw in lump-sum downpayments between 10%-20% of your mortgage’s ORIGINAL principal balance each and every year. *technically* (and we’ve only seen this done in the past 10 years), you could pay your whole mortgage off within 4-5 years. • Re-read your mortgage contract. If it’s been a few years, you may be a bit fuzzy on other ways that you can pay down your mortgage: annual double-up payments, monthly payment increases, etc… This could help you pay things down faster as well!

• HELOCs or All-in-one mortgages. Instead of making extra payments, consider switching to a mortgage that pays off the principal faster without costing you anything more. Some HELOCs act like an All-in-one mortgage: they combine a line-of-credit mortgage with a daily chequing account to reduce interest costs. This could help you and your family pay off your mortgage in as little as half the time, without changing your spending habits. How does it work? Your paycheque gets deposited into the all-in-one account and pay bills as you normally would. While you’re not using your money, it’s used to reduce your daily loan balance. Over the life of the loan, this can save hundreds of thousands of dollars in interest! What’s more: you always have the HELOC in place after the fact so that you can purchase more cash-flowing investments for your retirement or a second home!

To help decide which of these options is the best way for you to become mortgage-free sooner, please contact us for a no-obligation review of your own personal situation!

As mortgage brokers, we work with our host of lenders helps us provide top-notch mortgage lending products for the mainstream population as well as specifically-tailored products to meet the needs of niche areas of the economy.

Through the past few years, the team here at Trimor has proudly helped literally hundreds of Canadian small business owners with their home financing needs as they have purchased and refinanced their homes, vacation homes and rental properties. By understanding the needs of our clients first-hand (as mortgage specialists, we’re all self-employed too!), our team can better assess and help ‘fit’ borrowing products to the needs of entrepreneurs and small business owners.

Now, in addition to our long-standing relationships with residential, commercial and private mortgage lenders, we are proud to offer a new host of products that can help with the startup, business acquisition and inventory financing needs of our clientele as well. These small business finacing loan products can include bank and non-bank sources as well as initial consulting on provincial and federal grants. Depending on your needs and current corporate financial situation, there is the possibility of obtaining financing products in the range of up to $150,000 with a personal and partial corporate guarantee.

If you are a business owner that is seeking to finance your company’s next level of growth, please fill out our preapproval form and we would be happy to meet with you to review your current financials and help consult on the possibility of applying for one of several different avenues of business financing products.

We are honored to help you with your growth plans - both on the personal side of things as well as related to your business.

To your growth and success,

The Trimor team!