Generations X and Y Will Prove They Believe in Homeownership

Contrary to what many have hypothesized over the last few years, young adults (18-35 year olds) are just as committed to homeownership as previous generations. Recent studies have shown:

• 43% already own a home
• 72% see homeownership as part of their personal American Dream
• 93% of those currently renting plan to buy a home

This, along with the increase in household formations mentioned above, makes us believe that 2013 will be the year that many of these young adults will jump into homeownership

Unfortuately there are many foreclosures properties in Calgary…

While you can buy some foreclosure real estate at below-market prices, it also brings a unique set of circumstances that you may not encounter in a more typical home buying scenario.

Many markets saturated with foreclosed properties, more prospective homebuyers are taking a closer look at these types of properties than ever before. Purchasing a foreclosure isn't just a simple matter of scoring a dirt-cheap bargain, however. What should you worry about--or not--when buying a foreclosed property?

Foreclosures being sold by banks have long been an attractive opportunity for real estate investors. But today many consumers are purchasing them as primary residences.

The big attraction of purchasing a foreclosure is the expectation that it can be bought at bargain-basement prices. Whether that expectation holds true depends largely on local market conditions and Terri Stephens with CIR Realty calls the "desperation factor" of the bank that needs to sell the property.

Foreclosure properties are just harder to deal with. Here's what you need to know…

"People want to get houses for half price, and that's not going to happen," says  an industry member. 

In general, Foreclosures do offer some discount from the market value of the property--anywhere between 5 percent to just over 30 percent. If foreclosure sales didn't come with some discount, there would be no reason for buyers to deal with the myriad headaches that these transactions can present. Make no mistake, short sales come with headaches, so you need to know what to expect.

Even though Foreclosures can be a bargain, that doesn't mean you should jump in with your eyes closed. "Foreclosure buyers need to do their homework so they understand the property, the market, the neighborhood, and the process,"

Here's what you need to know as a potential buyer of Foreclosure property in today's market.

Real estate agents can pull up foreclosures offerings for you. Most mortgage lenders want their REO properties listed on the multiple listing service (MLS) so that any real estate agent can show them to potential buyers.

Discounts on foreclosures vary greatly, depending on whether the homes are severely damaged and where they're located. Although damaged Foreclosures might sell for a relatively minor discount -- 5 percent to 7 percent off comparable private sales of non-damaged homes -- some might offer as much as a 30 percent discount.

But being listed as an Foreclosure doesn't mean that a property will automatically be a bargain. Banks are in business to make money, so of course they're going to price homes as competitively as possible. This is why it's important to have solid representation on the home you plan to purchase.

Foreclosures are sold "as-is," and that's why you need a home inspection before committing to a purchase. A thorough inspection is even more important for an Foreclosure than for a standard property.

Be financially savvy

I encourage potential buyers to get prequalified for a loan so that the seller knows the borrower will be able to close.

If you want to buy an Foreclosure property, will you have trouble getting a mortgage? If the property you're considering is in good condition, you shouldn't have more trouble qualifying simply on the basis of the home being Foreclosure, and likewise, you won't pay higher mortgage rates just because the lender knows you want to buy Foreclosure.

However, a significantly damaged property may close off some options for financing, because few mortgage financing programs exist for these types of homes.

Closing may take awhile…

Bidding on an Foreclosure isn't quite like making an offer on a privately-owned home, where you hear back from an owner fairly quickly. Instead, you'll submit your bid then you'll wait for a response with a counteroffer. Since a bank is a business, you may end up dealing with more than one person or department, and it can take awhile to get all of the paperwork processed.

The process can be frustrating and take more time.  On the other hand, because the home is an Foreclosure, the bank will already have taken care of any liens on the property, so your title search should be a breeze.

It's possible to turn a fixer-upper into your own personal castle, as long as you are patient and don't expect that an Foreclosure listing means an automatic windfall.

For Informed, experienced and successful representation.

I'm here to help you every step of the way.

The coming year will see a rise in mortgage rate comparison websites, variable-rate mortgage discounts and non-prime lending, according to The Globe and Mail.

Highlighting likely real estate industry trends for 2013, the newspaper’s Robert McLister predicts that, among other things, the proliferation of digital media will result in more popularity for mortgage rate comparison websites.

Meanwhile, McLister also forecasts that variable-rate mortgages will increase in popularity due to steeper discounts.

Finally, McLister predicts that tighter mortgage restrictions will lead to more borrowers taking out loans from higher-cost non-prime lenders.

“Those borrowers include the self-employed, property investors and anyone who needs secondary financing or refinancing above 80 per cent loan-to-value,” he writes.

While tighter mortgage restrictions have led to a cooldown in Canada’s overall housing market, Alberta mortgages, fueled by activity in Calgary, are leading the nation in growth.

The Canadian Real Estate Association reports that Alberta will lead the country in resales during both 2012 and 2013.

The province is expected to end this year with a 13.1 increase in resales compared to the same time last year, and is projected to grow by another 1.3 percent during 2013. 

Among the highlights in the 2012 Observer:

• The recently introduced Canadian Covered Bond Legal Framework, which will support financial stability by facilitating diversified funding for lenders and strengthening the robustness of the Canadian covered bonds market;
• Annual housing starts and the average mortgage payment as a percentage of personal disposable income per worker are both close to their long-term averages, while debt-service ratios are below or near their long-term averages;
• Most mortgage holders have substantial equity in their homes, while the percentage of residential mortgages three months or more in arrears has been declining;
• Housing designed with flexibility in mind is better able to adapt to meet the needs of an aging population and accommodate the accessibility and other needs of persons with mobility, cognitive and agility disabilities.  

A summary of factors that affect your credit score:

The BEACON score is calculated based on the information contained in your Equifax credit history. While knowing your actual score is a good start, understanding the key factors affecting your BEACON score is much more important. These factors will provide you direction on how you can increase or maintain your BEACON score over time.

The negative factors listed below are reasons why your BEACON score might not be very high. Your focus on these factors will help you to raise your BEACON score over time. These negative factors are provided in order of impact to your score, the first factor listed indicates where you stand to gain the most points over time and so on.

You have recently been seeking credit as reflected by the number of inquiries posted on your credit file in the last 12 months

Research shows that consumers who are seeking new credit accounts are riskier than consumers who are not seeking credit. Inquiries are the only information lenders have that indicates a consumer is actively seeking credit.

There are different types of inquiries that reside on your credit bureau report. The score only considers those inquiries that were posted as a result of you applying for credit. Other types of inquiries, such as account review inquiries (where a lender with whom you have an account has received your credit report) or consumer disclosure inquiries (where you have requested a copy of your own report) are not considered by the score.

The scores can identify "rate shopping" so that one credit search leading to multiple inquiries being reported is usually only counted as a single inquiry. For most consumers, the presence of a few inquiries on your credit file has a limited impact on BEACON scores.

A common misperception is that every single inquiry will drop your score a certain number of points. This is not true. The impact of inquiries on your score will vary - depending on your overall credit profile. Inquiries will usually have a larger impact on the score for consumers with limited credit history and on consumers with previous late payments. The most prudent action to raise your score over time is to apply for credit only when you need it.

As time passes the age of your most recent inquiry will increase and your score will rise as a result, provided you do not apply for additional credit in the meantime. Our best recommendation - apply for credit only when you need it.

The length of time your revolving or non-revolving accounts have been established is too short

This reason is based on the age of the revolving or non-revolving charge accounts on your credit bureau report. A revolving account such as Visa, MasterCard, or retail store card allows consumers to make a minimum monthly payment and roll or "revolve" the remainder of their balance to the next month. Non-revolving accounts such as American Express and Diners Club must be paid off in full each month.

Research shows that consumers with longer credit histories have better repayment risk than those with shorter credit histories. Also, consumers who frequently open new accounts have greater repayment risk than those who do not.

It is a good idea to only apply for credit when you really need it. Meanwhile, maintain low-to-moderate balances and be sure to make your payments on time. Your score should improve as your revolving credit history ages.

The amount owed on your accounts is too high

The score measures how much you owe on the accounts (revolving, non-revolving, and installment) that are listed on your credit bureau report. Research reveals that consumers owing larger amounts on their credit accounts have greater future repayment risk than those who owe less. (For credit cards, the total outstanding balance on your last statement is generally the amount that will show in your credit bureau report. Note that even if you pay off your credit cards in full each and every month, your credit bureau report may show the last billing statement balance on those accounts.)

Paying off your debts and maintaining low balances will help to improve your credit score. Consolidating or moving your debt around from one account to another will usually not, however, raise your score, since the same amount is still owed.

Proportion of loan balances to original loan amounts is too high

Simply having installment loans and owing money on them does not mean you are a high-risk borrower. To the contrary, paying down installment loans is a good sign that you are able and willing to manage and repay debt, and evidence of successful repayment weighs favorably on your credit rating. The BEACON score examines many aspects of your current installment loan and revolving balances. One measurement is to compare outstanding installment balances against the original loan amounts. Generally, the closer the loans are to being fully paid off, the better the score. Compared to other measurements of indebtedness, however, this has limited influence on the BEACON score.

Paying down installment loans on a timely basis generally reflects well on your credit score. But if you want to improve your score, one way to do it is to try to pay the loans, down as quickly as you can.

While on Realtor Tour today - Dec. 11, 2012

I saw a great home that boast a fully developed lower level, plus bonus room and 3 bedrooms up.  Total of 4 bedrooms and 4 bathrooms.

Fully fenced yard, and rear deck with dog run area.  Home has been taken care of for a foreclosure.  $411K  - In Cooper's Crossing 

With a quick possession - and negotiable price...this home can be yours - or a great revenue property - that could rent out for atleast $1800 plus a month.

I also found a few condos - townhouses in Airdrie that might appeal to a few folks.  Affordable living with easy care.  Condo fees cover the exterior maintenance - if you don't want the yard work.

I also saw a recently renovated older home - kitchen has been renovated very nicely.  House is a bit overpriced - but I'm sure there is room for negotiation.  Nice thing is the oversized guys dream garage.

Terri Stephens - at your service