If you’ve been to the launch of a new housing community, you’ll know emotions can run high from excitement to frustration.
As demand for new homes continues at historic levels, grand openings can see huge lineups and as you’ve likely seen in news stories, free-for-alls.
Out of respect for you and your time, we plan our launches to try to encourage the excitement and limit the frustration.
Here are a few pro tips so you can arrive prepared and avoid disappointment:
Are you “registered”? That means you’re on our email list. The people on our list will be the first to know about important things like launch dates, presentation centre location, and links to secure a coveted time slot in advance (if applicable). Those details go out via email so be sure you’re on the list.
Mortgage pre-approval letter. You’ll need to bring your mortgage pre-approval letter with you to the opening. Getting pre-approved for a mortgage is win-win. You want to know exactly how much you can borrow so you know what you can afford and to ensure you don’t overspend. And as your home builder, we want to know that you will qualify for a mortgage when your new home is ready. If this is your first mortgage, you may find our Mortgage 101 article handy. Be sure to book your appointment with your bank in advance of opening day.
Certified cheque or bank draft. Please bring a certified cheque or bank draft in the amount of $10,000. This is the initial deposit on your new home. The fees for drafts and certified cheques can vary so you may want to ask which has the lower fee.
Personal cheques. Be sure to bring your chequebook (with at least 3 cheques). These post-dated cheques will make up the balance of your down payment. The current deposit schedule for The Altona Towns nows provides an extra 60 days to complete your deposit as follows*:
$10,000 certified cheque or bank draft upon signing the agreement (as outlined above).
Balance of 5% in 30 days
2.5 % in 60 days
2.5% in 180 days
5% on occupancy
All cheques should be payable to Harris, Sheaffer LLP (in trust)
Photo ID. And last but not least, you’ll need to bring government-issued photo ID. Things like your passport, driver’s license or health card are all acceptable.
And that, in a nutshell, is how to arrive prepared. You’ll be ready to seize the day and capitalize on the excitement of a new home.
*Subject to change. Please confirm with our sales team.
Deciding where to buy a home is a tough decision. Do you stay in your current neighbourhood, or venture outside your postal code in search of a property that ticks off more of your must-haves?
One of the biggest struggles potential homebuyers wrestle with is the market, especially if the property is in a location you’re not familiar with. You want to know if the market is going up, if it’s going down, if there is too much supply or if there is too much demand.
Luckily there’s a lot of data available on the state of the housing marketing. We’ve done the research for you and compiled ten important findings to help you better understand the market and the opportunities we think will help you feel good about Pickering as a real estate investment. So let’s jump in.
1. Demand: Townhouses remain very popular in Pickering, with the 160 under construction in September, representing the highest level since 2013 (CMHC). If you’re considering a townhouse, you’re in good company. Everyone wants to buy something others will want down the road.
2. Supply: Looking at the wider Pickering/Ajax/Uxbridge area, of the 851 new homes completed in the last 12 months (of all types), only four are unsold — and not a townhouse among them. What’s the takeaway? Almost everything sells before they’re completed. Buyers are getting in on opportunities early.
3. Bang for buck: According to Altus Data Solutions, the average new townhouse available in Pickering will cost you $440 per-square-foot (psf), compared to $1,100 psf for the average condominium apartment in downtown Toronto. You get more bang for your buck in Pickering … and you don’t have to pay extra for a parking spot.
4. Price appreciation: According to the Canadian Mortgage and Housing Corporation (CMHC), the average new single-detached house that was completed and sold in September 2017 was $933,283, an increase of 14.4% annually. Double-digit price gains indicate that demand is far exceeding supply, and waiting to buy could cost you.
5. Resale strength: According to the Toronto Real Estate Board, the average resale property in Pickering sold for 105% of the list price in September, and it took just 13 days on average to sell a home. In the current market climate, you’ll have peace of mind knowing your future home has strong resale value.
6. Townhouses are popular: According to the MLS House Price Index, townhouses in Pickering have increased by 9.3% annually. Buyers are looking to maximize their indoor square footage, often at the expense of a side yard. Townhouses continue to gain market share.
7. Relative affordability: According to Zolo.ca, Pickering is ranked 18th of 23 municipalities in terms of average resale house price, an indication of how affordable the city is. In comparison to the adjacent municipalities to the west, Pickering is still very affordable.
8. Top 5 for sales: Over the past 30 days, Pickering is tied for the 5th fastest selling municipality in the GTA for resale housing (Zolo.ca). It shouldn’t be a surprise that the more affordable homes in Pickering are selling very quickly in the high-priced Greater Toronto Area market.
9. Easy commute: According to GO Transit, it takes 28 minutes to get from Union Station to the Pickering Go Station on an express train. It might take you that long to go three blocks on a downtown streetcar during rush hour, the commute is quite manageable.
10. Compare: Nearby Markham, less than 20 minutes from Pickering, will cost you $300,000 more on the the price of a home, based on average housing values from Zolo.ca.
With changes coming to the mortgage qualification rules in January, it will become that much more difficult to afford the home you really want. Buyers will flock to markets with the most affordable homes as they find themselves further priced out of their current communities. Pickering will be a market drawing even more attention, a small community with big data and enormous potential.
If you’ve never owned a home before, you may not be too familiar with mortgages and what you need to do to get one. The first step is to understand what a mortgage is. So let’s start there.
The basics: what a mortgage is…
The common definition states that “a mortgage is a loan secured by real property.” You will be borrowing money to buy a home and a Charge (a legal document that outlines the terms of the loan) is registered on the title of the property to secure the loan. A lender will require this security in case the borrower defaults on their loan.
That might sound a little technical and scary, but it isn’t. In most cases, a homebuyer will take out a mortgage on a portion of the home’s price. If you have saved $40,000, and intend to use it to purchase a property, subtract that amount from the home’s price and that will be the amount of your mortgage, often called the mortgage principal.
A typical first-time buyer will take a 25-year mortgage (the amortization period – how many years it will take you to pay it off) with a 5-year term. A term is the amount of time before the mortgage contract must be prepaid or renegotiated. Don’t worry, you don’t have to pay back the full amount in five years, when the term expires, a lender will typically offer a new 5-year contract with the same or new interest rate, depending on the lending environment at the time.
As you might expect, a lending institution wants to make a profit from providing you with a mortgage, and they accomplish that by charging you interest. The interest rate is a fee paid to the lender for borrowing money. An interest rate can be fixed, meaning it doesn’t change for the entire term, or variable, which means the interest rate charged varies as market interest rates change. If you choose a variable rate, your payments will vary as well. Many first-time buyers choose a fixed rate as they know what their payment will be throughout their mortgage term, which helps them budget accordingly.
If you’re putting down less than 20% of the purchase price, you’ll also need mortgage insurance of about 2.8% to 4% of the purchase price. Most lenders will simply add that fee to your mortgage payment and make it easy for you.
Now that you know the mortgage basics, it is fun to play around with the numbers to get a sense of how much you can afford based on your expected monthly payment. TD has a great mortgage calculator on their website (here), where you can plug in your expected principal, interest rate and term, amortization period, and how often you want to pay per month. Paying weekly will save you interest, but you may prefer paying monthly.
Getting “pre-approved” (and how to do it…)
However, before you go out and buy a home, it is advisable to get pre-approval from a bank or other mortgage lender. You want to know exactly how much you can borrow so you know what you can afford and to ensure you don’t overspend. You should be aware that recent changes to the mortgage rules in Ontario require a borrower to qualify for a mortgage at a rate approximately 2% higher than your contracted rate, keep that in mind when you’re punching numbers into the mortgage calculator before you start the approval process.
There is a couple of different options:
You can go directly to your existing bank. Be sure you bring details on any accounts that you don’t have at that bank (and your significant other if you’re buying with them). You’ll want to have a letter of employment with your salary, plus any other details on your income, assets, and debts (i.e. student loans or car payments).
Another option is to work with a mortgage broker, a practicing professional who assesses a borrower’s financial goals, and acts as an intermediary with several lenders to try to land you the best deal. If you are self-employed or new to Canada, working with a mortgage broker can help you connect with lenders that specialize in these types of buyers. Mortgage brokers are experts when it comes to comparing interest rates, mortgage terms, default insurance, and title insurance.
When buying a new home, you also have a third option, many banks offer special deals to builders and developers given their access to a multitude of interested buyers. At Altona Towns, TD Bank will offer qualified buyers a special interest rate, which is capped until the homes are completed and occupied.
It wouldn’t hurt to explore all three mortgage options to ensure you fully understand what you can afford, how much a lender will allow you to borrow, how much you have to pay on a monthly basis, and the various options you have to choose from given those constraints. Getting a pre-approval doesn’t bind you to that lender, if you come across a better deal before you close on a home, you can take it!
Turning your pre-Approval into a mortgage
Once you’ve made your decision on your new home, take your Agreement of Purchase and Sale to your preferred lender and they’ll prepare everything for you, and ensure you have the mortgage funds you need when you move into your dream home.
You’ve made up your mind, it’s time to buy your first home, but where do you start? Purchasing your first property can be a daunting task. The first step should be a visit to your bank to see what you can realistically afford. You’ve likely been dreaming of your first home for several years, but be realistic, you won’t get everything you want the first time around, don’t be this guy:
Setting your budget will help you narrow your search, but the next big consideration is location. Do you want a skyline view or a backyard?
Let’s take a closer look at Option A: The Downtown Condo
Downtown Toronto may sound appealing, with its array of bars, nightclubs, and trendy shops, but a new condominium in the Entertainment District will run you $500,000 for just 500 square feet. Add in a parking spot at $75,000, a locker at $7,000, two land transfer taxes, and a hefty monthly maintenance fee. You’ll be paying a lot for the “fun” of downtown living and that high-rise view, assuming you can afford the additional $1,000 per floor premium and clear the neighbouring towers. When deciding where and what to buy, you should not only think about your current needs, but your future needs as well.
It won’t be long before you find that tiny condo is a little too crowded, that elevator ride is a little too long, and that spiral underground parking ramp extremely annoying. You’ll find yourself looking for a bigger, hassle-free home. You might think that moving isn’t expensive because you’ll just buy your uncle a case a beer to hall all of your stuff for you, but there are a lot more costs. A Realtor’s commission can cost you over $10,000, you will need a lawyer to review your sales contract, and you may have to pay to break your existing mortgage.
You might not be thinking about starting a family now, but things can change quickly. If you think housing is expensive, take a look at downtown daycare costs. If you survive those years, you might not be able find you’re a school for junior anywhere near your high-rise.
Option B: The Financial Benefits of Being Flexible
A key consideration that will save you a lot of money when buying your first home is flexibility. Perhaps a larger townhouse with a short commute is a better choice. You may not get the gimmicky condo amenities like a golf simulator, a bowling alley, a zen spa, or super high-end appliances, but you don’t really need the first three, and you can always upgrade your countertop, backsplash and refrigerator a couple years down the road. If you have a second child, need to park another car, a townhouse provides you with that level of flexibility.
As we’ve witnessed in 2017, market conditions can change quickly, and right when you want to move-up from your downtown condominium, prices might be down and the market slow. Skip a step, and make an affordable move-up now.
Marshall Homes has launched a brand new community in west Pickering, a collection of family-friendly townhouses from 1,617 square feet to 1,927 square feet. The Altona Towns may cost you more than a tiny condominium in downtown Toronto, but you’ll get two parking spaces, a backyard, three bedrooms and up to four times the space. There is only one land transfer tax in Pickering (you’ll save $8,000 to $10,000 dollars — think of what you can do with that) and you won’t have to shell out for that constantly-rising condo fee.
And importantly, you won’t need to move again next year meaning another round of legal, real estate and moving expenses to add to the tally.
Add it all up and a smart purchase today could end up saving you tens of thousands of dollars.
It’s possible to get more for your money and we can help you with that.
A home at The Altona Towns will not only give you peace of mind by offering a new home warranty, you’ll have the flexibility to grow into it, and you might just have have more fun in Pickering anyway.