By Bill Bischoff | MarketWatch

Prices in many real-estate markets may be close to bottoming out. We hope. So the old adage about buying low

may be something to consider if you have a kid who will soon be heading off to college. The idea is to buy a condo

for the kid to live in while attending school. That way, you’ll avoid paying through the nose for a dorm room or

apartment with no hope of any profit. And if you buy a condo that has some extra space, you can rent it out to your

kid’s friends and offset some of the ownership cost.

Lots of parents have made good money by following this strategy for the four or five or, God forbid, six years their

kids spent in college and then selling the condo after graduation. Of course, the longer you can hold onto the

property, the better the odds of cashing out for a profit. The other key factor to consider is the tax benefits. Here’s

what you need to know.

Deducting college condo ownership expenses

The tax rules generally prevent you from deducting losses incurred from owning and renting out a residence that’s

used more than a little bit by you or a member of your immediate family. However, a favorable exception applies

when you rent at market rates to a family member who uses the property as his or her principal home. In this

case, you can deduct tax losses from the rental activity (subject to the passive loss rules, which I’ll explain later).

This beneficial loophole is open for you if you buy a condo and rent it out to your college-going child (and roomies,

if any) at market rates.

You can deduct the mortgage interest and real-estate taxes. If you pay mortgage points, you can amortize them

over the term of the loan. You can also write off all the other operating expenses—like utilities, insurance,

association fees, repairs and maintenance, and so forth. As a bonus, you can depreciate the cost of the building

(not the land) over 27.5 years, even while it is (we hope) increasing in value.

So where will your poverty-stricken son or daughter get the money to pay you market rent for the condo? The same

place he or she would get the cash to pay for a dorm room or an apartment rented from some third party. In other

words, from you! You can give your kid up to $13,000 annually without any adverse federal tax consequences. If

you’re married, you and your spouse can together give up to $26,000. Your child can use that money to write you

monthly rent checks. Just make sure he or she actually sends the checks and make sure they say they are for

rent. Also, it’s best if you open up a separate checking account to handle the rental income and expenses. Taking

these simple steps will help keep the IRS off your back if you ever get audited.

Passive loss rules may postpone tax losses

If the condo throws off annual tax losses (which it probably will after counting depreciation deductions), the

passive activity loss (PAL) rules generally apply. The fundamental PAL concept goes like this: you can only deduct

passive losses to the extent you have passive income from other sources -like positive taxable income from other

rental properties you own or gains from selling them. Fortunately, a special exception says you can deduct up to

$25,000 of annual passive losses from rental real estate provided: (1) your annual adjusted gross income (before

the real estate loss) is under $100,000 and (2) you “actively participate” in the rental activity. Active participation

means being energetic enough to at least make management decisions like approving tenants, signing leases,

and authorizing repairs. You don’t have to mop the floor or snake out the drains.

If you qualify for this exception, you won’t need any passive income from other sources to claim a deductible rental

loss of up to $25,000 annually (your loss probably won’t be that big). Unfortunately, however, if your adjusted gross

income (AGI) is between $100,000 and $150,000, the special exception gets proportionately phased out. So at AGI

of $125,000, you can deduct no more than $12,500 of passive rental real estate losses each year (half the normal

$25,000 maximum). If your AGI exceeds $150,000 and you have no passive income, you can’t currently deduct any

rental real estate losses. However, any disallowed losses are carried forward to future tax years, and you’ll be

able deduct them when you sell the college condo. All in all, this is not a bad tax outcome--as long as your losses

are mostly of the “paper” variety from noncash depreciation write-offs.

Favorable tax rules when you sell

When you sell rental real estate that you’ve owned for over a year, the profit—the difference between sales

proceeds and the tax basis of the property after subtracting depreciation—is long-term capital gain. However, part

of the gain—the amount equal to your cumulative depreciation write-offs—can be taxed at a maximum federal rate

of 25%. The rest of the gain will be taxed at a maximum federal rate of no more than 15% under the current rules

(which I hope will be extended to post-2012 years).

Remember those carryover passive losses that we talked about earlier? You get to use them to offset any gain

from selling the condo.

By Liam Lahey | Yahoo! Finance Canada

There's good debt and bad. For first-time homebuyers, knowing the difference between the two and how to

manage debt wisely is a critical step towards owning a home.

Repeated warnings from the Bank of Canada and elsewhere that Canadians are overextended on debt might be

keeping some potential buyers at bay. But Rob Macdonald, a mortgage broker with Invis in Vancouver, says the

key to understanding whether or not it's time to buy comes down to planning and how you manage your debt.

"One of the biggest mistakes first-time homebuyers make is they get absolutely fixated on what interest rates are.

The interest rate in a mortgage is just a piece of the puzzle," he explains. "Managing the debt through the length of

the term is one of the more important features. Managing your mortgage to avoid payment shock can save you

thousands of dollars versus the best rate you would've got originally."

An average mortgage in Macdonald's market (the Fraser Valley neighbourhood in Vancouver) presently falls

between $300,000 to $400,000. Interest rates are terrific today he acknowledges -- a five-year mortgage is at 3.3

per cent currently versus 5.5 per cent just a few years ago.

"If you get a low rate today at 3.3 per cent you're enjoying a mortgage payment of around $2,000 a month," he

explains. "Five years from now it goes to 5.5 per cent and your payment jumps by $350 to $400 a month."

Chris Kiskunas, regional mortgage sales manager, Royal Bank of Canada (RBC) in Toronto, says to be wary of

the proliferation of personal debt.

"Sometimes a few hundred dollars on a credit card doesn't seem like a lot (of debt). But when you also have the

same or a little more on other cards and you total it all up, it can actually prohibit your ability to qualify for as much

as you might on a home," she says. "For someone preparing for first-time home ownership, evaluate your

financial situation and determine what you owe, to whom, and what are the interest rates? Position yourself to

qualify for the most home you can buy."

Kiskunas recommends potential buyers take in the big picture when thinking of home ownership, which will help

first-time buyers to get a sense of how much it costs to actually own and maintain a home.

"Any financial institution or lender that is going to consider approving you for a mortgage is going to look at the

mortgage principle and interest payments, the taxes on the property and the estimated cost of heating the

property," she explains. "The industry rule of thumb is all of those costs should not exceed 32 per cent of your

gross combined income."

Any other debt (credit cards, line of credit, car loans, etc.) should not exceed 40 per cent of your total gross income.

"The mistake that people make is they don't calculate the cost of carrying that home. Beyond taxes and heat

there's gas, hydro, TV and Internet, insurance, and then any other payments you're responsible for," she adds.

"When you want to determine the affordability factor on a home you want to know you have money at the end of the

month to be able to eat."

What to do when rates rise?

With current interest rates being as attractive as they are, is it worthwhile to strike while the iron is hot and buy

now? Or is it wiser to remain a renter for the time being? It depends on personal circumstances, Macdonald says,

but if interest rates are going to climb you'll likely face the same hike in the rental market. In short, it's a catch-22.

"If you don't buy today for example and interest rates start to go up, what happens is it's less likely more people will

be buying in the coming years. That'll put pressure on the rental market," he says. "That means less vacancy and

then landlords have the ability to raise rates. And if mortgages get more costly for landlords, landlords will typically

download that expense on the tenant."

Never too early to starting your research

Perhaps sorting that out comes down to having a discussion with a mortgage broker. But should you wait until you

believe you have everything lined up? Or is it recommended to embark upon the effort much sooner? RBC's

Kiskunas believes the latter is best.

"Studies have shown that regardless of the fact that people might feel better educated (about mortgages and real

estate) they still want to talk somebody," she says. "It's never too early to get educated about what you're planning

to do. You can get really good advice from a mortgage specialist whether or not you choose to buy within the next

six months or the next two years. The relationship should start now."

As for the all-important down payment, Macdonald says it too is based on individual circumstances. If you're

buying within your means and it's an affordable monthly payment not too far removed from the amount of rent

you're paying, most are comfortable with five per cent down.

"As long as you follow a plan and have someone assisting you with managing your mortgage that's taking

advantage of opportunities along the way -- if you were to lock-in for a longer term or an early renewal for instance -

- I don't think five per cent down is a bad thing," he says.

However, it's been reported Ottawa is considering raising the minimum down payment for homebuyers from five

to seven per cent in order to stop some consumers from taking on too much debt.

"It'd certainly be more challenging for many homebuyers to get into the market (should a hike come to fruition) in

some of the bigger cities," Macdonald adds. "At the end of the day, I don't think it'd be a tremendously bad thing for

Canada. It just means we're a little more cautious as to what our risk might be in the market."

If the thought of a higher minimum downpayment is causing anxiety, than it may be best for first-time buyers to

reconsider their purchase plan, Kiskunas  says. "If (Ottawa) shortens the amortization or imposes a higher

qualifying rate from an interest rate perspective, if it's that close to the wire for that individual buyer, then I'd suggest 

that maybe this isn't the right time to buy.

"You need to leave yourself some financial wiggle room to help insulate yourself against any changes that might

be brought in like that."

In any event, there are online tools that are worthwhile to use in order to gauge the difference between paying a

mortgage and paying rent. CanadaMortgage.com provides an online calculator that draws these comparisons.

So too does the online calculator offered by Industry Canada. Also useful is the Canada Mortgage and Housing

Corp.'s guides to renting a home and buying a home. RBC, too, provides a free, online tool for helping calculate

whether you should rent or buy.

Julian Beltrame, The Canadian Press

OTTAWA — For most Canadians their home is the biggest investment they’ll ever make — but they might be

surprised to learn you can use if for more than just sleeping.

People generally don’t think of their homes as a potential pile of cash in the bank, but experts say it’s something

worth pondering now that home prices in Canada may have hit their peak.

In fact, analysts say if finance is the only consideration, conditions now and into next year or so form a seldom

seen sweet spot for using home equity as a type of asset for investment.

Why might it be a good time to sell?

At about $370,000 average nationally — and just under $800,000 in Vancouver — home prices are already at

record levels. Many observers believe prices are long due for a downward correction of anywhere from 10 per cent

to 25 per cent, perhaps more in some of the hottest markets.

“Home prices to income, housing price to rent, all the indicators are setting off warning signals,” said Derek

Burleton, a senior economist with TD Bank.

“If you are purely in it for reaping profits, now is not a bad time to sell” before prices drop.

The profits from selling a home can be used to build savings, eliminate debt, make traditional investments or,

ironically, buy more real estate — albeit in a different market where home prices are lower.

Of course, even if it makes sense financially, selling the family home to rent or move to a less expensive housing

market doesn’t make lifestyle sense for the vast majority of Canadians.

Burleton knows how they feel.

“I wouldn’t want to sell my home right now even if I wind up taking a hit on the home price, just because I enjoy

where I’m living and moving is a pain,” he said.

While there’s no guarantee of a correction, observers note there are additional signs that the housing market

could cool off in a big way.

With ownership levels near a record 70 per cent, demand is expected to wane, making it a buyers market for the

first time in years.

And Bank of Canada governor Mark Carney warned last month he was preparing to hike rates, which along with

tighter lending rules being applied by federal authorities could trigger a flight from real estate.

In market terms, selling a home at the peak is a way of “locking in” profits accumulated over the past decade of

price appreciation — and tax free if it’s the principal home.

Meanwhile, home valuations have been rising far faster than the rent they would fetch since at least 2000.

Canada’s home price-to-rent ratio is well above historic norms and among the highest in the advanced world.

That is a hard indicator that homes are over-valued, but also that renting is relatively cheap compared to buying.

David Madani of Capital Economics, who anticipates a 25 per cent price crash over the next few years, cautions

that like selling stock shares, timing is always tricky.

“We’re dealing with irrational exuberance. We’ve been treating housing like some magical financial asset that is

going to solve all our problems because prices are always going up,” he said.

“Of course, when the turn comes, the over-confidence that drove the market up can turn to fear. You are dealing

with emotion … so I don’t believe in a soft landing.”

The market is clearly at or near peak, he said, so soon may indeed be the time to act.

But then again he felt that way a year ago, he points out, and if households had acted on his advice they might not

have gotten all the value they could from the premature sale.

By Michele Lerner | Bankrate.com

You spend a lot of cash when you buy a home. The down payment for your mortgage is only one expense. There

are other outlays: appraisal, inspection, deposit, cash reserves and more. The costs add up.

"How much cash you'll need depends a lot on the size of your home purchase and how much you intend to

finance," says Tim Ross, president and CEO of Ross Mortgage, based in Royal Oak, Mich.

Here are other expenses homebuyers incur (and have to save up for).

Earnest money deposit. Hopeful buyers need to be prepared with cash for a deposit to attach to their purchase

offer. The amount of the deposit varies, depending on local custom, the amount of your down payment and size of

your home purchase.

Ross says deposits can range from a flat fee of $500 to 1 percent or even up to 5 percent of the purchase price. An

experienced Realtor can advise you on how much to offer.

Home inspection. "Every buyer should have a home inspection, usually within 10 to 15 days after the contract is

approved," says Dyan Pithers, a sales associate with Coldwell Banker Residential Brokerage in Tampa, Fla.

Costs vary; Pithers says the home inspection can set you back $325 or more. In Bankrate.com's annual closing

costs survey, pest inspections (which are separate from home inspections) averaged $119 in 2011.

If you are not on county or city water systems, a well inspection can cost $400, Pithers says.

Appraisal. In Bankrate's annual closing costs survey, the average appraisal cost a little more than $400 in 2011.

Buyers sometimes pay for the appraisal when it takes place, and sometimes the fee is included in the closing

costs paid on settlement day.

Down payment. "While some low- to moderate-income borrowers can find low down payment programs and zero

down payment programs, in general, most people need at least 3.5 percent of the purchase price as a down

payment on (a Federal Housing Administration) loan," says Michael Jablonski, executive vice president and retail

production manager for BB&T Home Mortgage, based in Wilson, N.C.

Veterans Affairs loans, available to veterans and active-duty military families, have no down payment

requirements.

"For conventional loans, a minimum down payment of 5 percent is acceptable for borrowers with excellent credit,

but they will also have to pay private mortgage insurance," Ross says.

Some conventional loan and jumbo loan borrowers need to pay as much as 20 percent of the purchase price as a

down payment.

Mortgage origination fees and title insurance. Loan origination fees vary from lender to lender, and title insurance

varies from location to location, so there's no rule of thumb that applies everywhere.

"Sometimes buyers can negotiate to have the sellers cover their closing costs, but it's better to negotiate the home

price first and then negotiate the closing cost assistance to make sure the sellers haven't just inflated their price to

cover closing costs," Jablonski says.

Ross says buyers should be careful to review their good faith estimate as soon as they receive it, so they have an

idea of how much their mortgage origination fees and title insurance will cost.

Moving costs. "How much moving costs depends a lot on how far you are moving," Pithers says. "If you are moving

nearby and have friends and family to help, it can cost almost nothing. But a long-distance move of a 2,000-

square-foot home, including having the packing done for you, could cost $5,000 to $7,000."

Ross says the average moving cost is likely to be less than $1,000, especially if you are moving nearby.

Necessary home purchases. If you are moving from an apartment to a single-family home, you may have to buy

items such as a lawn mower, a snow shovel or window treatments.

"You need to be careful to really weigh each item against your budget," Jablonski says. "You don't have to start with

a top-of-the-line lawn mower, for example. It's a great idea to do some research, and talk to people in the area

where you are buying. See what they had to purchase right away, so you can budget for it."

Pithers says you may need to make deposits for utilities such as the water company or electric company,

especially if you are moving from another locale.

Cash reserves. "Lenders typically want you to have at least two house payments, including principal, interest,

taxes and insurance, in the bank after the closing," Ross says.

Jablonski says it's better to have six months' mortgage payments in savings after closing.

By Gail Johnson | Yahoo! Finance Canada

Buying a home can be as exciting as it is overwhelming. Two real-estate experts share their insights into all-too-

common house-buying mistakes.

Not being pre-approved for a mortgage
“This is the number-one mistake,” says Kimberley Marr, a Toronto real-estate broker and author of Your First

Home—A Buyer’s Kit for Condos and Houses. “I wouldn’t even go look at a house until you know what you’re

preapproved for. It’s a benefit when you’re putting in an offer, especially in a multiple-bid offer, being able to

provide written proof to sellers that you can complete this transaction. It could provide leverage in getting the

house.”

Marr also suggests shopping around for a mortgage and being clear on the terms and conditions. In other words,

don’t be too excited about a low rate until you read the fine print.

Not being clear about your needs and wants
“A lot of people want to go out and buy a house but they don’t have a plan,” Marr says. “Then they get hooked into

the emotional link to a home. They get caught up in the excitement and overlook necessary features like how many

bedrooms and bathrooms? What about Parking? Closet space? Don’t rush into looking before preparing and

considering what you’re looking for.”

Couples not being on the same page
“One will want to be in Langley and one will want to be in North Vancouver,” says Vancouver real-estate agent and

former developer David Setton. “Or one is just going along but not expressing what they really want. It’s not a good

use of anybody’s time. Sometimes one partner will delegate the other to find the house because they’re too busy

at work. If couples don’t do everything together, you spin your wheels.

Skipping a home inspection
“You need to make an offer conditional to a satisfactory professional inspection by a qualified home inspector,”

Marr says. “This is the opportunity for the inspector to discover and give you a heads-up about any flaws or issues

you may not have been aware of and help you understand the difference between maintenance issues or major

structural issues, faulty systems.

“When people get caught up in multiple offers or bidding wars, which happen often in cities like Calgary, Toronto,

Vancouver, a lot of them to try and look good so they clear the inspection from conditions. That is not something

you want to give up. And attend the inspection; don’t just hire someone to do it without you being there.”

Similarly, people looking at a condo should make the offer conditional on seeing strata certificate, which includes

information such as its budget, rules and regulations, and upcoming assessments or expenditures.

Leaving home insurance until the last minute
“Most people for some reason forget about it and leave it till day before they’re closing,” Marr says. “But you need to

make sure the property is insurable, especially if it’s a rural property. Maybe it’s heated with oil or has old wiring.  If

you can’t get insurance, the bank will not advance funds on closing.

Digging their heels in when negotiating
“Let’s say it’s a $500,000 home; the buyer wants$ 483,000 the seller wants $484,500,” Setton says. “I’ve seen

people say, ‘No, I want to win.’ Negotiating isn’t about winning; it’s about compromise. People might be 20 days

apart on completion date, and one will say ‘I’m not willing to wait.’ It can be a deal-breaker but shouldn’t be. In the

grand scheme of things, it’s nothing.”

Being swayed by bling
Granite countertops and stainless-steel appliances are appealing, but Setton says you need to focus on the floor

plan. “You can change everything else: cabinetry, lighting, wallpaper, carpet, and flooring. But you can’t change the

floor plan. Look for efficiency in your floor plan, especially if you’re buying a condo.”

Being indecisive
Sometimes people will see a home they love but they don’t make an offer because it’s the first one they’ve looked

at. “They hesitate,” Setton says. “Not being decisive can make you lose a house you really like. It’s never going to

be perfect. It’s never going to be 100-percent.”

Trying to time the market
‘That’s a huge mistake,” Setton says. “It’s not possible. If I could do it, I’d be a millionaire. There are too many

factors that affect the market; interest rates, global influence... I can tell you what the market is like right now and

maybe even three months from now, but if a world financial crisis hits or a tsunami hits... Anything can happen.

“A lot of it comes down to being ready in your mind. Are you really committed to buying right now or just curious

about what’s happening? The best realtor in the world can’t convince you to buy anything if you’re not ready. The

right time to buy is when you’re in the financial position to buy.”

By: Sonja Rasula HGTV

Are you considering making a spare space in your home into an apartment? Whether the kids have all moved out,

or you've thought about renting a space in your home to help with the mortgage, creating a second suite, and

becoming a landlord, can have many advantages.

While the most obvious benefits are the financial ones (income can subsidize the cost of ownership, property

value increases and tax deductions become available), becoming a landlord may give some a sense of pride and

responsibility, help derive a greater sense of safety and perhaps even provide a social, community atmosphere.

If you're thinking about renting space in your home, there are many things to think about, and lots of work to be

done. Read on to find legal and safety considerations, plus tips on finding great tenants.

Legal & Safety Considerations

How to Prepare

Before you place an ad in the paper, start installing a stove or get a set of keys made, you need to find out what

exactly makes a secondary suite legal. Make sure you check with your local municipality for the zoning bylaws-

don't wait until you've put time and energy into building a second suite to find out if you're even allowed to have

one! If you've purchased a home with an existing second suite, you need to make sure it stands up to fire code

requirements and planning standards. The Landlord's Self-Help Centre in Toronto suggests two extra steps to

further reduce liability once you've legalized your second suite:

1. Make your insurance provider aware of the second suite and enhance your insurance coverage accordingly.

2. Ensure your mortgage holder is informed about your second suite.

Once the Apartment is Ready

There is only one thing you need to think about now, the legal responsibilities of being a landlord. Before you start

to look for renters, you need to make sure you understand all your legal responsibilities as an acting landlord.

Some of the things you'll need to know include:

· How to comply with Fair Housing Laws, and not discriminate against anyone.

· How and when to make necessary maintenance repairs.

· Once rented, when and why you are allowed to enter the suite.

· Rent increase laws and how to inform tenants of an increase.

· How to serve an eviction notice.

· What a lease/renter's agreement should look like and include.

In order to educate yourself on the legal responsibilities, you should contact your municipal government for help,

as well, check your yellow phone book for any landlord or housing agencies listed under Social Services.

Tips on Choosing Tenants

First, be on the ball and be organized. It's your job to be prepared for both telephone calls and visitors. The best

thing to do is to create a list of basic information (monthly rent, size, advantages such as location or new

appliances), so you don't forget anything when talking to interested people over the phone. As well you should

have an application form ready to fax or handout.

The law is definitely on your side when it comes to choosing tenants. There are many great services available to

make sure you have sufficient information to make a decision. Credit checks are a great way to see an applicant's

history and confirm his or her actual identity.

Doing a credit check is not something to be overlooked because of the fees involved. The tenants you choose 

might appear to be wonderful people, but when it comes down to it, you need to know more about them before you

let them into your home. You have the right to ask for and contact references and past landlords. You can even ask

for their banking information, in order to obtain their history. While you can ask for income information, it is only

legal to do so if you also ask for rental history, credit information and get approval for a credit check (making a

decision based on income alone would be discrimination).

Don't just "go for the green" when choosing tenants. It's up to you to find trustworthy, reliable renters, but it's just as

important to choose renters you get along with. Once you have applicants that have passed the tests mentioned

above, there are helpful ways to decide between tenants:

· Set up a short interview, which will enable you to see what they are like, and allow for open communication

between both parties.

· Make sure to ask questions about their lifestyle habits. For instance, if they play an instrument, find out if they are

willing to restrict playing it to certain hours.

· Is their personality compatible with yours, and other family members that live in your household?

· Do they have pets? If you have pets, are they allergic?

The biggest differences between a mortgage broker and a bank lender is the range of choice

By Tracy Hanes | Moneyville

When Chris Vale and his wife Keli Hines bought a home in Oshawa, they arranged a mortgage through an in-

house firm their real estate agent’s company had.

“We were told, ‘Here’s the rate and here’s what you pay,’ ” Vale recalls of the transaction, which took place several

years ago.

Then Vale met mortgage broker Marshall Spencer and got to learn what a broker could offer. When their mortgage

came up for renewal three years ago, he and Hines used Marshall, who found a mortgage for them at two per cent

lower than the posted bank rate.

Vale owns an Ajax web-design company.

“Marshall explained a lot of things to us, such as out clauses and penalties. It really set the path for finding the

mortgage that was going to work for us,” says Vale. “When we had questions, we could pick up the phone and get

answers from the same person every time. Having that personal one-on-one relationship was important.”

Albert Collu, president of Independent Mortgage Brokers Association (IMBA) of Ontario and president and CEO of

Argentum Mortgage and Finance Corp., says one of the biggest differences between a mortgage broker and a

bank lender is the range of choice.

“Imagine going to the grocery store and down the cereal aisle all you see is one brand of cereal. When you walk

into a bank, the bank is predominantly focused on moving its own products and a lending officer or branch

employee can only offer one brand,” says Collu. “With a broker, it’s like you are going down the cereal aisle and a

huge variety of different brands.”

Brokers deal with as many as 30 or 40 different lenders, including banks, credit unions, large institutions that only

offer mortgages, and small, private lenders, says Collu. “That provides flexibility as different lenders have different

appetites for certain loans. We are able to be more nimble than the bank.”

While some Canadians like to use mortgage brokers, there are advantages to dealing with your bank directly,

according to the Canadian Bankers Association.

Many customers value the relationship that they have with their bank and often have other personal banking

products and services there (such as chequing accounts, credit cards, and investments), as well as a mortgage,

so this provides ease in managing all accounts and personal financial needs within one institution, says the CBA.

Banks also have a variety of resources such as mortgage specialists, booklets, calculators and comprehensive

websites and many have staff who will meet the customer at home, according to the CBA. Consumers can also

negotiate lower rates than the posted rate at banks and can choose from various payment options and mortgage

solutions.

Collu says mortgage brokers are specialists who have in-depth knowledge about mortgages, while most bank

employees may have limited or very general knowledge. Collu says IMBA advises consumers to call a broker for a

consultation, before renewing a mortgage. There’s no charge and no obligation, he adds

“Most consumers don’t know what a mortgage broker does,” says Collu. “Thirty years ago, people would say,

under their breath, that they had to go to a mortgage broker. It was almost an embarrassing thing to admit.”

The field has evolved since then, says Collu. Brokers must complete required courses, write exams, and be

mentored and trained at an established brokerage.

Above all, they are required to be licensed with the Financial Services Commission of Ontario which can provide

consumers with a list of licensed brokers and lists those that are not. It also handles consumer complaints. If your

mortgage is for $300,000 or less, the mortgage brokerage cannot accept, or require you to make, an advance

payment or deposit, for any expenses or services that will be offered by the brokerage or one of its employees.

There is usually no fee to use a mortgage broker.

“If only I had dime for every time someone has said, ‘Well, mortgage brokers charge fees,” says Collu. “Generally,

that’s not true, and we are not conduits to loan sharks.

“How does a broker get paid? It works the same as an insurance agent: We are paid a commission by the

institution we arrange a mortgage with.”

Collu says about eight out of every 10 people renew their mortgage with their bank, and, of those, about 70 per

cent sign back at the posted rate, while a broker could get them a rate at 1 per cent to 1.5 per cent less, or even

lower, and secure terms that suit their needs.

While anyone can use a mortgage broker, Collu says many clients are “credit-challenged people, looking for

prime rates,” those requiring complex financing, people building a house or the self-employed, many of whom can

find it difficult to qualify for a mortgage through a bank.

“I can save people time and time is the new currency,” says Spencer, who operates Prime Rates mortgage

brokerage in Whitby. He started his career working in a bank. “A mortgage broker can shop the whole mortgage

market so you don’t have to.”

Spencer says brokers “don’t have to push a particular product or cross-sell.

“I am not going to try to convince you to open a new savings account or buy mutual funds.”

A broker’s commission is not based on what the interest rate of the mortgage is, so they will try to get clients the

lowest rate possible, he adds.

To determine the best mortgage for clients, mortgage brokers will typically ask them questions about where they

want to be in five years, if they are planning to change jobs, whether their family will grow or if they need income

from a rental unit in their house.

“A lot of people only see the interest rate and are distracted by that. When arranging a mortgage, don’t stop your

questions there. Ask what privileges you have, if you can increase payments by an extra 10 per cent or 20 per cent

or can make lump payments without penalty,” says Spencer.

Vale and Hines are pleased with their decision to use a brokerage, not a bank.

“For as long as we need a mortgage, we’ll be going the broker route,” says Vale.

Mortgage Broker facts

  •  The mortgage broker industry is governed by the Financial Services Commission of Ontario. It licenses

mortgage brokers, agents, brokerages and administrators and its website has a wealth of information for

consumers, including a list of licensed brokers, information about law governing mortgage brokers and how to file

a complaint. There are also brochures on mortgage-related topics that can be downloaded.

  •  The Independent Mortgage Brokers Association of Ontario (IMBA) provides education and professional

development for mortgage brokers and provides consumer information about brokers’ code of conduct, FAQs

about the industry and a listing of licensed brokers in the province.

By Amber Dowling HGTV

For the past ten years, Scott McGillivray, a 30-year-old real estate entrepreneur, has made a living by

transforming houses into income properties. The 30-year-old currently manages 18 properties with over 100

tenants, and now he's coming to HGTV to help a "house poor" generation create legal income suites and help

offset their rising mortgage payments.

Whether it's a 100-year-old Victorian home, a multi-apartment property or a fully renovated unit in a hip urban area,

this entrepreneur can do it all. Check out 10 tips we learned from McGillivray by watching the first episode of

HGTV'sIncome Property:

1. Make sure it's worth it
   As McGillivray says, the cost of renovations has to be able to pay itself back within two years rent. Scout out local markets, get a professional opinion, and be sure to watchIncome Property. Because, hey, who doesn't want to make a couple of bucks on something they need anyway?
   
   
2. Tag team, if you can
   To use a cliché, two heads are better than one, and home-owning is no exception. Getting to your desired final product is a journey, and having a teammate to share frustrations, anxieties and most importantly, costs with is invaluable.
   
   
3. The best way to learn is to go through the experience
   As one homeowner in the show puts it, "you can read as many books as you want, but you have to experience it." Every home is unique, and every home will reveal its own problems and potential solutions.
   
   
4. Whatever you budget, add 25 per cent
   When renovating your space, despite what a professionally quoted budget says, add 25 per cent, just in case. If you don't go over, nothing lost. But if you do, at least you were expecting it.
   
   
5. Houses are like onions
   The more layers you peel back, especially while demolishing, the more problems you're going to find. Count on hidden gems like mould, live wires and any other hidden costs, just in case.
   
   
6. Consider all the options
   If you have a three-story plus basement house, why just rent out only the basement? As we learn in the first episode, doubling the space not only allows you to live mortgage-free by increasing the rent, it also increases the value of the home. But it also may not be the option for you, especially if you plan on expanding a family or you want access to your backyard.
   
   
7. Make sure the space is livable
   If the kitchen has zero counter space and the bedroom can only fit a bed, not only is it going to be hard to find someone to rent out your unit, but think of the types of people who might be wanting to rent out your unit.
   
   
8. Don't skimp on the drywall, especially on the ceiling
   Not only do you want a fire barrier between you and your new housemates, you might be thankful for a little bit of sound-proofing in the long run.
   
   
9. Start on the outside
   A separate entrance is key when renting out a basement, especially if you don't want to mingle too much with your new lessees. And you might want to make sure there are no potential lawsuits hanging around — such as slippery stairs or rotting wood.
   
   
10. Don't turn your house into a home... right away
    If a long-term investment is what you seek, turning your space into a home right off the bat isn't going to help pay those accumulating bills. Your No. 1 priority should be making your home into an income source, or at least a manageable entity.

By Marissa Ponikowski  - HGTV

When it comes to condos, staying on the cutting edge of style and decor is key. The general perception of what’s

hot and what’s not can change daily, so choosing trendy yet timeless decorating styles and furniture pieces is the

true challenge for the condo dweller. Always keep resale value in mind when you paint or make upgrades.

Chances are, you won’t live in this condo forever and when you do sell, you want the place to be attractive to a wide

demographic–rather than simply to those who share the same tastes you do.

What’s Hot: 

Clutter-Free Living
The choice to live in a condo generally means one must commit to living clutter-free. Although most condos have a

storage locker and at least one closet, the space for storage is quite limited compared to that of other types of

homes. That’s why it’s so important to adopt a Zen-like approach to clutter and possessions. If you don’t need it,

sell it, give it to charity or throw it out. If you don’t know where you’ll put it, don’t buy it. Life is much easier without

too much stuff, and condos are much more attractive when they aren’t packed with useless possessions.

Flowing Decor
When decorating a condo, choose a theme and stick with it. Condos and condo townhouses are generally open-

concept and fairly small, and introducing too many colour schemes will overpower the space. When painting,

choose a colour that you can repeat–for example, paint your bedroom the same colour as your washroom to give

the impression of an ensuite and then chose a lighter or darker version of the shade for the living area and

kitchen.

Dramatic Wood Finishes
It’s tempting to go with deep, dark paint colours when seeking to add drama to your condo decor, but particularly in

a small space, this is not a great idea. Instead, stain the floors a dark oak or cherrywood finish. Cupboards can be

outfitted with dramatic finish as well and furniture in rich distressed black stain is another attractive way to add

depth to your decorating.

Streamlined Storage
Maximize closet space by building shelves and installing closet organizers. Make every square foot count–even

under the bed! Buy thin plastic storage boxes which slide easily into small spaces and use them to store

seasonal clothing, wrapping paper, gift bags and more. Invest in drawer organizers and cupboard shelves, too.

What’s Not:

Garish Paint Colours
Lime green may be your favourite colour–and very in to boot–but that doesn’t mean lime is a wise paint colour

choice. If you love it, don’t shy away completely, but don’t make it the main focus of your space, either, as rich

colours tend to dominate. Instead, choose boldly-coloured accessories such as blankets, throws, candles and

vases. If you simply must paint in a dramatic shade, choose a single wall to adorn with shocking colour. 

Fading Floors
Even if you didn’t upgrade your floors, it’s important to keep them in great condition. Laminate floors should not be

washed with water, because it can leak through cracks and cause bubbling. Instead, sweep well and spot clean

with a damp cloth. If you have hardwood, keep it in mint condition by cleaning and waxing regularly. If you plan to

sell, a floor sand and refinish may be a good investment.

Too Much Bulk
You may not plan to live in a condo forever, and thus would rather invest in furniture that will make the transition

from condo to house with ease – but big, bulky, house-size furniture just doesn’t compute in a small condo.

Choose your stuff wisely, and don’t break the bank on condo furniture. There are bargains to be had, especially on

small, streamlined stuff.