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Author name: Davelle Morrison

The Morrison Report

Mortgage Agent Discusses Millennials

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Ben Sammut Mortgage Agent Discusses Millennials. What millennials need to know about getting a mortgage. How to accept family gifts for down payments. How to buy a house in this competitive market.   Transcript Davelle:              Welcome to the Morrison Report. I really wanted to create a podcast that would give people insights into the Toronto real estate market. You can follow me on Twitter @DavelleMorrison and on Instagram as Davelle Morrison, and you can also like my business page on Facebook. On today’s episode, we have Ben Sammut with us. He is a mortgage agent with Mortgage Architects. He’s also a millennial. So today we’re gonna be talking about issues affecting millennials and their mortgages, so join me speaking with Ben. So Ben, tell us, what are some of the most important things for millennials to know and do about getting a mortgage? Ben:                     Well, I think it first and foremost starts with the fact that we need to differentiate ourselves from the American market. Usually what happens is a lot of millennials are getting the news from these dismal housing markets going on in the States and dismal job markets, and while the job market is a little different nowadays from what our parents had, mortgage financing is a bit of a different animal down there. So, we don’t need to be as discouraged, and I always start with just, just start with a plan. See where you are now. Davelle:              Cool. Awesome. Ben:                     Yeah. Davelle:              That’s great advice. So, someone comes in to see you. What’s the first thing that you take them through or you do with them? Ben:                     So, the process of pre-approval is pretty straightforward. It’s the same with a mortgage broker that it would be with the banks, but sometimes a little bit more detailed. So, we’ll have a first, or a primary conversation, just to go through their needs. We see what they want to do, see if their expectations are realistic, and then from there we just try to find the perfect fit between their income, their debt ratios, what their credit can afford them, and then really what kind of options they can pull on from there. So, if Mom and Dad are able to help, if there’s anything like income suites that we can look at, and I’m sure we’ll speak to that a little bit later on, but we really just want to make sure that all options are explored for them, so that they’re realistic when, by the time they’re ready to go out with you, they know what they’re looking for. Davelle:              So, before they come and see you, would you suggest that they pull their credit history beforehand so they have an idea of where they stand, or is that something that you would do for them? Ben:                     It’s something that we do. One of the benefits of working with a broker is that we’re able to only pull one bureau and then present that to all of our banks. So, there’s a common misconception that multiple pulls on your credit bureau can damage it pretty badly. It’s true that if you pull a few bureaus for, let’s say, a car loan, then a student loan, credit card, mortgage, things like that, it’ll affect your credit score negatively. But, if you’re just checking in and you take one of those consumer reports that are offered free through certain websites, it doesn’t hurt for you to know but we’ll be able to give you a much better analysis anyways, so … You’re really free to do either way, but we’ll certainly make sure you know what’s going on. Davelle:              So, what are things that you might want to suggest that millennials could do now to make sure that they have a good credit history, before they come and see you? Ben:                     One of the things that I would definitely advise against is applying for multiple credit cards. So, I have plenty of friends my age and slightly older that would always get free newspaper subscriptions or boxes of cookies or Raptors tickets for signing up for a card that they never use, and they think because they never use it that it’s never going to affect their credit score. But there is a portion of your score calculated based on the amount of credit you have available to you, and I think a lot of people don’t realize that it’s not good to have $10,000 in unsecured debt available that could cripple you at any moment, if you’re looking to apply. So I say, the best thing to do is start off with one credit card. Make sure you’re keeping on time with your payments, and then from there, just establish a good repayment history. As brokers, we’re able to tell you which are gonna really help out your credit score, which ones not so much. So as long as you’ve got somebody who’s somewhat financial savvy to advise you and tell you exactly which ways to move forward. The main concern is just that you are actually thinking of your credit score. Davelle:              So, what if you’re the kind of person that doesn’t want to have a credit card at all, and you want to pay cash for everything? How’s that going to affect their credit score? Ben:                     Well, it really isn’t. It’s not going to do any damage to their credit score, but when they go to apply for a quarter of a million dollars in a mortgage, and they don’t even have any repayment history on a $2,000 credit card, it’s a little difficult for banks to learn to trust them. So, you’re almost better off taking on a little bit of debt and establishing a good payment history before you actually try to take on larger debts like car loans and mortgages, because if you pay cash for everything, you’re trying to establish a cash-only standard and it’s just not really possible

The Morrison Report

Advice for First-Time Home Buyers

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Why first-time home buyers should still buy real estate. Advice on how they can get more bang for their buck. The importance of having a basement apartment. Why having a real estate lawyer, mortgage broker & home inspector as part of your team is important   Transcript Davelle M.:        Welcome. Thanks for listening … You are listening to The Morrison Report, real estate insights for Toronto. So today what I really wanted to talk about is those first time home buyers and what a hard time they’re having in the market place right now, given the price point of where things are sitting right now in the city of Toronto. And obviously its great for current homeowners, that we’ve obviously made a great amount of money on our real estate at the moment, but it’s very difficult for first time home buyers to get in the market. So let’s go over a couple of things about what they need to know and why should they still consider getting involved in the real estate market. I mean really, maybe they should just keep renting, because renting is easier and the markets are difficult. Well, for me, it’s all about: Why buy real estate? And I would say you have to buy real estate because number one, we all know the market is changing, but the mortgage rates are at an all time low right now. When you purchase a property it really acts as a forced savings and it really helps you to build equity in the long run. You know I always say to people, “Imagine being retired 60-65 and still having to pay rent.” What I love about owning real estate, and why I think it’s really important for first time home buyers to get into the market, is because at some point when they retire this way they will own their own home, their mortgage will be paid off, and they will have a place to live rent free, which I think is really important. You know, sure, you can say it’s great to be renters, it’s very cheap right now, but for a lot of renters, they have to keep moving around because their landlords want to sell the properties that they are currently living in. So they don’t end up staying there forever and it’s this constant shifting and moving around. You never really have a place to call home. One thing I love about owning real estate is that it actually does act as a forced savings plan. I always read in the media, and people say “Oh, you know, you could just save money instead, you could pay rent and save the balance in, whatever, your RRSP, or some sort of investment account.” But that’s not really realistic for the average person. For me, and I think for most other real people, we just need the for savings. If you’ve got the mortgage payment, you know that a good chunk of that money is actually going to be going towards paying yourself first, and not paying off your landlord. The challenge with having a landlord, of course, as much as I love being a landlord myself, is that you’re paying somebody else’s mortgage. And wouldn’t it be nice to pay your mortgage off first? I think that’s one of the really important things about building a nest egg for yourself. I think also, owning real estate is one of the fastest ways to achieve wealth. My accountant always says to me, you know, he’s looked at people’s books over the last 30-40 years and he can really, truly see, that the big difference in those that are doing well and those who are not doing well is those who own real estate. And he can see, over time, that owning real estate has really helped build their portfolio. There’s no capital gains tax on primary residence, so if you do own your own home, and you choose to sell, and it’s made a quite a bit of money, as a lot of the houses have in the Toronto marketplace right now, at least you get to keep that money tax free, which is another huge advantage to owning real estate. Also, the values, as we’ve seen in the city, again, have kept increasing and increasing, you’re almost looking at people doubling the worth of their property every six or seven years. And for a lot of people in this city, I think they’re really seeing that their house actually is making more money on an annual basis than they are in their regular jobs. Where can you earn that kind of return, but in real estate? The other great thing about purchasing real estate is that you don’t have to use all of your own money, because the banks will loan you up to 95% of the value of the home. So, again, it’s a great way to get into the market because you don’t actually have to play with all of your own money to get into the market in the first place. So those are some of my reasons why I say it’s very important for first time home buyers to get into the market, and also it’s a place to call home. It’s a place where you can hang your hat, and paint, and do renovations. And a place where you can start a family, or have friends and family over. So I think it’s a really good important thing and I think it really does sort of help you to build that root base, that you know you’ve got a place to call home and a place you’re going to stay. So if we look at the average prices in Toronto, they have definitely skyrocketed over the last couple of years, and in particularly this year, for sure. We are looking at well over semi-detached houses and detached houses, for the most part, being worth over a million dollars

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How to buy a home in a scarce marketplace?

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The Toronto real estate market right has become incredibly competitive due to the lack of condo and house listings. Because the majority of condos don’t have offer dates, it means getting clients into great condos within the first couple of days of the suite hitting the market is critical. A few weeks ago I made an offer on behalf of a client for a condo townhouse in the Yonge & Eglinton area. The townhouse came on the market on Friday. I showed it to my client Saturday. Sunday we put in our offer. By Sunday night, there were now 4 offers on this unit and unfortunately we lost out. In the housing market, even though there are offer dates, I encourage clients to skip the queue and make a bully or pre-emptive offer long before offer night. I recently helped my clients purchase a great home on in the Yonge & Lawrence area using this tactic. I spend a lot of time looking for new listings in the areas my clients are searching, and on Monday around 3pm, I noticed what I felt could be the perfect home for them. The husband was available to see the home at 4pm. After our showing, he decided he loved it and his wife needed to see it, so at 5:30pm his wife came in to see the home and she loved it too. While at the house, I noticed that only the business cards of my colleague & me were present, so it would be a great opportunity to present a bully offer as we were the only ones who had seen the house. I mentioned to my clients that people on property match (daily listings clients receive from their agents) or using realtor.ca would see this house the next day on Tuesday so they wouldn’t have a chance to react. In addition, it was the first day back to school from March Break so people wouldn’t be as focused on their house hunting right now. We put in our offer that night and Tuesday afternoon, my clients had an accepted offer and a new home. They were thrilled. Their home search had finally come to an end in the perfect neighbourhood. I worked with another couple looking for a large downtown condo. The perfect 1300+ sq ft condo with 2 +1 beds and 2.5 bathrooms overlooking Roy Thompson Hall came on the market. We went to see the condo on its second day on the market and made an offer the next day. My clients finally had the place of their dreams and the listing agent informed me that she was receiving many calls from other agents whose clients were upset she sold it so quickly to my clients. As I always say, the early bird gets the worm and that seems to really be playing out in the 2016 real estate market, where buyers and their agents need to be really aggressive with what they want in order to buy the place of their dreams. Toronto has become like New York: if you want it, someone else does too and your only advantage is to beat them to it.

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Large Triplex 84 Rusholme Rd Listed for $1,150,000

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This deceptively large triplex has a 2 bedroom basement apartment, generous 1 bedroom apartment on the main floor and a FIVE (5) bedroom 2nd & 3rd floor apartment that is ready for your creative touch. It also has 1 parking spot, right out front. The upper unit is vacant and could be used by an owner who wishes to have well over $2,000 in rental income each month OR if you’ve been dying to get into the housing market, buy it with a friend or family member and each have your own space to roam. Haven’t you heard? Sharing is the new owning. This wide semi is perfectly situated where hip meets cool meets style a stones throw away from Dundas, Queen & Ossington. It comes on the market the first week of February. To see MORE pictures and get ALL of the details about this triplex visit www.84rusholme.com If you know of anyone who would like to get into the market or improve their retirement savings be sure to tell them about this amazing opportunity. With a Starbucks on the next corner, TONS of restaurants, an amazing YMCA and an A+ school district 84 Rusholme Rd is a property that’s worthy of your attention.

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2181 Yonge St Suite 4004

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This suite is a stylishly done 1+1 bedroom and 1 bath with a south facing unobstructed view with a sweet balcony. This suite is beautiful with stunning hardwood floors and spacious enough for a dinner party. The entire north tower has fresh new plumbing & spa-like amenities including a party room, gym, exercise room & pool and with a Starbucks, Eglinton subway station restaurants & movie theatre at its feet. Visit www.4004-2191yonge.com For Floor Plan.

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How To Find A Great Tenant?

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I’m often asked what are the best ways to find a good tenant. It’s important to get a quality tenant right from the beginning. Attracting a good tenant means having a quality place to rent out. First and foremost, make sure you have pictures. Then make sure the pictures offer a fair representation of what the house or apartment looks like. Write up a great description then post the pics & other details on various websites. Padmapper.com, Kijiji.ca & Viewit.ca are great places to start. Padmapper.com is a free rental posting site which will aggregate all of the postings on MLS, and other sites so that you can see what other landlords are charging in the area. Although Kijiji.ca is free, I would highly recommend paying for more guaranteed exposure on their site, like on the top of the page. Viewit.ca will also cost money. I have found the best success using padmapper.com & kijiji.ca. Increase your exposure by posting your kijiji link to your Facebook profile in case any friends or friends of friends are looking for a place to live. Once you have your listing posted and you start to receive inquiries, it’s time to use the powers of Google to search each prospective tenant to make sure they are on the up and up. Google them so that you can peruse their Facebook and Linkedin profiles to determine if you have any mutual contacts. If you do, it can be a great opportunity to get an authentic reference. Once they have decided to rent your place, make sure they fill out a rental application so that you can call their references, employer & previous landlords. It’s important to invest the time before someone moves in to make sure they are a respectable person. Unfortunately the Landlord Tenant Board only favours the tenant so once someone is in, it will be hard to get them out so make sure you choose correctly from the beginning. You should also run a credit check on them to make sure they do pay their bills on time. A credit score of at least 650 is ideal. And they should be paying their bills within 30 days, at an R1 level. An R2 level means they pay their bills within 60 days, R3 within in 90days. And if they pay people within 90 days what’s to stop them from paying you in the same fashion. You can also work with a real estate agent who can take care of all of these details for you. They will also post your rental on MLS. The fee for doing this is usually 1 month’s rent. Half a months rent will go to the person who found the tenant and half a month’s rent will go to the agent for posting and handling the listing. As a real estate investor, I believe that learning to find your own tenants is a good skill to acquire. If you are looking for some handholding on finding a tenant on your own, I’m happy to help. Once your new tenant moves in, don’t forget to treat them nicely. A welcome gift of something bubbly is always a nice touch and don’t forget them at Christmas time.

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When is the best month to list your house?

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I’m often asked when is the best time to list a house. The answer might be surprising. Many people feel that the spring market is the best time to list a home to get the most value. Well, I disagree. January is the absolute best time to list your house. Here’s why. The visits to realtor.ca increase significantly over the holidays and many people make a new year’s resolution to buy a new home or change their living situation (ie get a divorce). Then January hits and you have these buyers who are anxious to make a move with nothing to buy. Then the second week of January hits and they have this pent up desire to buy something – anything. During those first couple of weeks in January, there isn’t a lot of inventory to choose from. So when that first house comes on the market in January, all of those buyers pounce, create a larger bidding war then usual which thereby drives up the price. Over the years, I’ve noticed that the properties that come on the market during the last half of January fare the best, garner the most offers and therefore the highest price. By the time the spring market begins, there is so much more competition for the same amount of buyers so sellers don’t always fare as well as those who came on the market in January. So if you are in the market to sell and want the biggest bang for your buck, January is your month.

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What do the new mortgage rules mean for you?

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So the mortgage rules just changed for the amount of a downpayment required and many people are in support of making it more difficult for first time home buyers to get into the market. Many claim that coming up with an extra $5,000 or $10,000 downpayment isn’t such a hardship. Really!? I mean really!? Does the government realize it’s the holidays and many people have turned their attention toward spending time with their families and friends? Let’s face it, many people are spending more money doing their holiday shopping. So the government, in my opinion, has kicked first-time home buyers in the Toronto market in the gut over the holidays. Merry Christmas folks! You better reign in your holiday spending and forgo that winter vacation so that you can spend an additional $5,000, $10,000 or whatever the case maybe after Feb. 15th, 2016. The alternative is, stop buying presents for your friends & family and quick go buy a property before Feb. 15th, 2016. Those don’t sound like great options for first time buyers. And to exacerbate the situation there aren’t that many properties on the market during this time of the year so not only must they buy now, but they don’t have the widest selection. Then there are the people that were already putting 10% down that don’t feel this announcement affects them. Well it actually increases the competition in the marketplace, so they will be affected too. It will be interesting to see what the next 2 months of the Toronto real estate market will look like before this deadline sets in. Check out my interview with Pat Foran from CTV News on this subject here

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When’s the best month to get a deal in real estate?

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The holidays are here and it’s a time when our waistline expands and our wallets contract. It’s also the time when SOOO many people turn their attention to their holiday shopping that they miss out one of the best shopping opportunities out there.  What’s that you may ask? Well real estate of course. There are currently OVER 400 PRICE REDUCTIONS in condos & houses on MLS right now. This means that there are a lot of people who would like to sell RIGHT NOW, before the end of the year. Guess what? The end of the year is fast approaching so it’s TIME TO MAKE A DEAL. One of my colleagues last week sold a house for $950,000 after 3 offers. I know that sounds high but if this house were on the market a month prior, it would have had at least 5 offers and sold for closer to $1.1 million. Now stay with me here, don’t get all doom and gloom about the real estate market and the high prices are coming to an end. The reason the buyer got such a deal (yes I know I just said that $950K was getting a deal) is because of the time of year. So if you’re looking for a deal, whether you’re looking to purchase a house or a condo, NOW is the time to MAKE A DEAL because the opportunity is out there RIGHT NOW. In January, everyone makes a resolution to purchase a property, then nothing comes out for a few weeks, then they all pounce on the same property driving the prices up further and making sellers extremely happy. Now if you want to follow the herd and spend more money than you need to? By all means, go for it. However if you’d like to MAKE A DEAL and buy smartly, there is a great opportunity waiting for you, RIGHT NOW. Buying a new home for the holidays? Now that’s a REAL present. Plus you’ll have time off from work to unpack and start the new year in fresh digs. Let me know what you’re looking for and I can help you find something. 

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#304 – 300 Balliol Street

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Located In Davisville Vill., This Pristine Sun-Filled, Rarely Available Condo With A Split Bedroom Floor Plan Boasts 2 Large Bedrooms With Master Walk-In Closets Is Walking Distance To TTC, Restaurants, Stores, Groceries, Starbucks & Tim’s. Ideal For Nature Lovers As The Beltline Trail & Moore Park Ravine Are Just Around The Corner. Other Features Includes 2 Bathrooms, Kitchen W/ Breakfast Bar, Balcony + Oversized Hall Closet.

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