Archive | May, 2012

Survey says

May 30, 2012

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Someone asked me an interesting question the other day: what happens if there is a mistake in the survey and I don’t find out until after closing?

20 years ago, when you bought property in Ontario, your lawyer would have done a full certification of title. There would have been a dozen searches and probably a brand-new survey commissioned that showed the exact location of the house and any accessory structures (sheds, decks, etc.) so that your lawyer could, with some certainty, tell you exactly what was there.

The thing was, though, that in the the vast majority of cases, everything is exactly where it is supposed to be and those searches were becoming somewhat of an extra and not completely necessary expense. Enter title insurance, which protects against defects in title from certain searches not being done as well as from the lack of an up-to-date survey. When you purchase title insurance, which is required by most lenders if there is not an up-to-date survey, fewer searches are required. Most notably, as lawyers, we are able to rely on older surveys.

If, after closing, you discover that something is in the wrong place, and you have title insurance, you are protected. Whether it involves moving an accessory structure, or compensation for the property not being what you thought it was, your title insurer will take care of it. It’s an excellent, economical product that neatly does what it is supposed to do: save buyers money and time.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she's not online, she can usually be found in her garden.

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Should You Consider a 10-Year Mortgage?

May 28, 2012

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There’s been a lot of talk lately about whether or not folks should be taking advantage of the sub-4% 10-year fixed mortgages.

With the 5-year fixed mortgages hovering just above the 3% mark, you will pay a little bit more to lock in for 10 years (though the spread between the 5-year and 10-year is a lot less than it has been in the past).  That alone makes the 10-year a little less popular (it’s hard to commit to a little bit higher rate up front in the hopes that rates go up enough to justify the extra cost).

Another common concern about locking in for 10 years is the fear of the penalties if you have to get out of that mortgage early for one reason or another.  While it’s true if you need to break that mortgage in the first 5 years, the penalties can be high (though with most mortgages you can easily port it to a new house, so it’s not like you’re locked into that property for 10 years…).  But what most people don’t realize is that in Canada, the most your penalty can be beyond the first 5 years of the term is a 3-month interest penalty.

The best way I’ve heard it described is this:

Think of it as a slightly higher 5-year rate, and with that slightly higher rate, in 5 years you have the option to renew at the same rate for an additional 5 years. The cost of not exercising that renewal option is only a 3-month interest penalty.

Obviously whether or not you pick a variable rate, a 3-year term, a 5-year term, or a 10-year term, will depend on your tolerance for risk.  There are pros and cons associated with any term… but in my opinion, with sub-4% 10-year mortgages out there to be had, make sure to give the 10-year a long, hard look.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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High and low

May 23, 2012

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A client recently asked me, out of curiosity, how high up and down she would own when her first home closed. Essentially, at common law, you own “up to the heavens and down to the centre of the earth”. That being said, in many jurisdictions there are limits that have been placed on the common law rule.

In Ontario, whether you own down into the earth depends on whether there are mining or subsurface rights held by another entity (including the Crown, which owns mining rights in a large part of the north). If no one owns the subsurface rights, then you own to the midpoint of the earth – where the person on the other side of the planet takes over.

Above your house is a little trickier. While you do in fact own all of the air directly above your roof, there is no right to light or a view of any sort in Ontario. So you could, in fact, have all that space, but the apartment next door could entirely block any use of it.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she's not online, she can usually be found in her garden.

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Enjoy the Long Weekend!

May 21, 2012

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For some reason, it seems like all the holidays this year are falling on a Monday, which means there’s no Mortgage Monday blog post again this week.  But hey, who wants to be thinking about mortgages on a long weekend with BEAUTIFUL weather, right?

Most people refer to this yearly holiday as the May 2-4, it’s actually Victoria Day that gives us this 3-day weekend.  Here’s what Wikipedia has to say about Victoria Day (because I know you’re dying to know):   😉

Victoria Day is a federal Canadian public holiday celebrated on the last Monday before May 25, in honour of Queen Victoria’s birthday. The date is also, simultaneously, that on which the current reigning Canadian sovereign’s official birthday is recognized. It is sometimes informally considered as marking the beginning of the summer season in Canada.  The holiday has been observed since before Canada was formed, originally falling on the sovereign’s actual birthday, and continues to be celebrated in various fashions across the country on the fixed date.  It is a statutory holiday federally, as well as in six of Canada’s ten provinces and all three of its territories.

So there you have it.  Now get back outside and enjoy what’s left of this beautiful long weekend!

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Checking on your home inspector

May 16, 2012

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TheRedPin.com posted this article a while ago about what home inspectors do and do not check when doing the inspection on your home – or rather, what they are and are not required to check. The list is quite informative, especially if you have not bought a home recently. A home inspection is incredibly important to ensure that you know what you are buying before you buy, but there are items that won’t be on the inspector’s checklist and you will want to know about these ahead of time.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she's not online, she can usually be found in her garden.

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