Building Green Homes in Canada

Did you know around 20 percent of the energy consumed in Canada is used in our homes? Purchasing an energy-efficient house or turning one by energy-saving renovations into a green home can offer big savings for home owners.

CMHC has a slogan “Help the Planet, Help Your Wallet” which has added environmentally friendly features to the Mortgage Loan Insurance it offers. If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, there is a 10% refund on the Mortgage Loan Insurance premium, and a premium refund for a longer amortization period (if applicable) may be available to you.

This also applies to if you’re thinking of building an energy-efficient home.

How it works

Step 1: Documentation

Find out how energy-efficient your house or unit is and obtain the supporting documentation

For houses and units located in low rise residential buildings the house or unit must:

    • have been built under a CMHC-eligible energy-efficient building program; or
    • have been assessed by a Natural Resources Canada (NRCan) qualified energy adviser
    • and have an EnerGuide rating that complies with the applicable requirement stated below:
For purchases with a closing date: Energy Guide Rating Required
On or after January 1st, 2013 82
From April 1st, 2010 to December 31st, 2012 80
From July 27st, 2005 to March 31st, 2010 77

You must obtain and provide CMHC with one of the following supporting documents:

The CMHC-eligible energy-efficient building program certification; or the first page of the EnerGuide performance report showing the EnerGuide rating of the house.

To be eligible, the supporting documentation must be dated no more than five years prior to the date of the application for a partial premium refund. Where the applicable supporting documentation is older than 5 years, the borrower is required to obtain a current energy efficiency evaluation.

This credit also applies to high rise residential buildings. If you are planning on building a new home and your builder is not a member of a CMHC-eligible energy-efficient building program, you should have an energy adviser evaluate the building plans before the house is built. This can help you ensure that you will meet CMHC’s requirements once the construction of the home is complete and it is evaluated.

Step 2: If required, boost your energy efficiency

If the house you plan to buy does not meet the applicable energy-efficiency requirement, to be eligible for a refund, you will need to obtain an EnerGuide rating through an NRCan qualified energy adviser and renovate using part of the CMHC insured funds based on your energy adviser’s list of recommendations in order to increase your score by at least 5 points and to a minimum overall rating of 40.

Step 3: Discuss and arrange a CMHC-insured mortgage

Talk to your lender and ask for a CMHC insured mortgage. (The rules have just changed to prevent fraud and misuse of funds).

Step 4: Confirm the improvement

After you make the renovations recommended by your energy advisor, you will need to have a second assessment done to determine the energy-saving effectiveness of the renovations.

Step 5: Apply for Refund

Apply for your Premium Refund

The following are steps for if you own a home and are thinking of renovating to make your home more energy-efficient:

Step 1: Obtain an energy rating for your home.

To qualify for this refund, you must carry out the steps described below within a reasonable time after funding of the CMHC insured loan. Normally, the time period between the date of funding (purchase with improvements or refinance) and the date of the post-retrofit assessment should not exceed 24 months.

Contact an NRCan qualified energy adviser to obtain the current energy rating for your home. You will receive a list of straightforward recommendations to increase your energy rating.

Step 2: Discuss CMHC insured refinancing.

Talk to your lender or your financial institution about which options are available to you. (The rules have just changed to prevent fraud and misuse of funds)

Step 3: Improve your rating

Improve your rating by using your energy adviser’s recommendations, renovate or upgrade to increase your energy rating.

Step 4: Confirm

Confirm the improvement by your energy adviser coming in and they will assess your home again after the energy-saving renovations are finished. If this test shows that the house’s energy rating has improved by at least 5 points and has achieved an overall rating of at least 40, a premium refund may be available.

Step 5: Apply

Apply for your Premium Refund online or through paper.

NRCan has developed an energy assessment and labeling system to help homeowners make energy-saving choices when buying a home or renovating. For a fee, an NRCan qualified energy adviser will evaluate the house to determine its energy efficiency rating on a scale of 0 – 100.

For more detailed information and specifics of these sorts of programs, please visit the NRCan web Site.
and if you are looking for a green home please feel free to get in touch with me.

Cheers!

Nilay Ertemur

References: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_008.cfm

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Happy new year everyone!

It is the second week of the new year and we are well immersed back into school, work and it’s time to evaluate Ottawa 2016 Real Estate Market!

In order for us to make any kind of prediction for the future, we need to look at what has happened at least in 2015 and its relation to the previous year (2014).  Members of the Ottawa Real Estate Board sold 703 residential properties in December through the Board’s Multiple Listing Service® System, compared with 638 in December 2014, an increase of 10.2 per cent. The five-year average for December sales is 653. The total number of residential and condo units sold through the Board’s MLS® System throughout all of 2015 was 14,658, compared with 13,919 in 2014, an increase of 5.3 per cent. Separately, residential and condo unit sales each outperformed the 2014 numbers. (OREB)

As for the general Canada picture in real estate of 2016, national sales are forecast to reach 498,600, down 1.1 per cent from 2015 as activity in B.C. and Ontario moderates and housing market conditions soften in Alberta. Moreover, interest rates are now expected to begin rising later than previously predicted. They are expected to remain on hold until late 2016, therefore low interest rates will continue to support sales and prices in near future (CREA).

From a mortgage side of the picture, home buyers will have to put a 10% down payment on the portion of the price of a home over $500,000. Anything under $500,000 will still only require a 5%  down payment. The changes are to take effect Feb. 15, 2016 (CBC).

For the rental market in Ottawa, in 2016, the vacancy rate will move down once more to 2.4 per cent. As for the resale market over the 2015-2016 period, sales of existing homes are expected to remain fairly flat with a downward trend. Employment should rise slightly into 2016 as overall economic activity stabilizes and the LRT project expands further.  (CMHC)

In brief, this year is still good here in the capital to make plans with your real estate aspirations, just contact me through your most preferred way communication, and I will be happy to serve you or any of your referrals.

Cheers!

Author: Nilay Ertemur

REFERENCES:

http://www.crea.ca/stats/quarterly-forecasts

http://www.cbc.ca/news/politics/morneau-home-ownership-finance-1.3360

http://www.cmhc-schl.gc.ca/odpub/esub/64311/64311_2015_B01.pdf

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LRT update from the city mayor, Jim Watson:
On September Wednesday the 16th, I was at a briefing conference organized by Ottawa Young Professionals Network for the city realtors to get updated on various Ottawa City News!
Accordingly, the LRT project is to create around 20 thousand more jobs!
At the moment the number of people can be accommodated into Downtown core is 9.000 but with LRT there will be around 24 thousand people capacity per hour into downtown core!
60 percent of the Ottawa core businesses think that this is a positive direction and the figure is expected to go higher as the project gets closer to finishing!
Meanwhile, Lyon station is 84%, Rideau is 44 % and the Parliament Station is 40 % done.
Once the stage 1 process gets opened to public use, then the Stage 2 construction is expected to start for Algonquin, Carleton, Ottawa Universities, Le Cite College, Bayshore and Place de Orleans. Plans are to extend the LRT from Bayshore to Moodie and then to Kanata, and even to extend it to Gatineau!

Spark Street news update: So far the street has lots of stakeholders with federal government owning all the buildings on the north side of the street, but due to the complexity of the street governance, leases have tended to be short term, with lots of empty stores… Recently some stores are opening and some new investment has been in place and more to happen on the street according to the mayor!

Last but not the least, Canada’s 150th year anniversary which will take place in 2017 is supposed to be the talk of the country! Guy Laflamme – Chairperson of the Ottawa 2017 Committee explained a new Ottawa brand is expected to be created, and the capital has the desire to lead the celebrations!
Arts and the culture will be the focus of these celebrations, citizens and visitors will have a chance to experience Ottawa like never before! The celebrations are expected to bring a lasting effect in terms of economic growth and the image of the city! Through complimentary events/ attractions, and community grassroots activities, and with more specifically welcoming/celebrating cultures in Landsdowne Park, community gardens, kitchens, 1 million trees planting initiative, the advise is to finish your basement to have visitors over in Ottawa in coming years!
And call me for any of your investment or personal real estate plans since the city is becoming more and more attractive for everyone!
Cheers!
Nilay Ertemur

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Realtors (real estate agent) these days not only need to know you at a personal level, become experts in their local market area and get involved in the community but also they need to be good at using social media networks where more and more people spend time every day.

There is no question that the power of person to person and voice to voice communication are the most important elements for trust in any given relationship but when the traditional marketing channels are being replaced with the new ones, is your realtor following and adapting to these changes well? The things that they do to market their business is a good indicator of how they would market your house.

Here is a list of what your realtor should be doing in order to market your property or the industry efficiently. Not all of them are necessary but doing at least couple of them well is important in today’s real estate market.

1-Having a well thought and organized website or blog

This is where you can see lots of details regarding your realtor; their testimonials, causes they believe in, communities they serve, and of course their featured listings…

2-Have a business Facebook page

Running a separate professional FB page where they do their announcements, engagements and marketing in general is a good indicator that they will spend the time on your property making sure that it is being shown and advertised properly.

3-Have a LinkedIn account:

This is where you can see what your realtor has done professionally and is interested in. What connections they have and how they engage with their audience is again important in evaluating their performance in marketing or negotiation process, which is crucial in real estate.

4-Being on Twitter

Whether they are following industry related news, or posting their recent listings, open houses, etc indicates that they are active and motivated and they will be when it comes to your house marketing efforts.

5-Google+

After all Google is where people mostly go to search anything. Hence being on the social media outlet of Google gives your realtor more visibility and search engine optimization capabilities, which benefits your property in return.

6-Pinterest

What are their likes, chosen pics tell you the taste they have when it comes to staging your house, interior design, and related areas.

7-Instagram

How they are engaging with the followers, what they share, and emphasize, tell you about their taste of life and motivation they have, and after all you are trying to find that agent who can get the job done yet someone at your or industry communication level so that the process of buying or selling becomes enjoyable and easy.

8-Youtube

Search and see if they created a Youtube channel where they share their listing videos, their own marketing material, etc. Being shy on the Internet when it comes to real estate is just not a very good sign these days esp for further exposure and visibility. There are some other social media outlets such as Tumblr, Flickr, etc therefore like anything else, do your homework and choose your realtor with confidence…

Cheers!

Nilay Ertemur

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Forecasting 2015 Housing Market in Ottawa

As we all know predictions are not easy, especially for the future, but we can certainly go through some stats to find out how the market has been doing in the near past, to figure out how this year might turn out for Ottawa.

Mortgage and interest rate cut

Let’s look at the mortgage picture first, the average five-year mortgage rate in Canada is at a record-low 4.79%, according to central-bank data (Source: Financial Post ). Lower rates can be obtained from banks and other private lenders, such as Mortgage Brokers Ottawa, the mortgage rate on their site states 2.89 for a 5 year fixed (26 Jan 2015).
On 21 Jan 2015, Bank of Canada has lowered its interest rate to 0.75, it dropped the lending rate by a quarter of a percentage point. What that means is the cut will result in lower interest rates for variable rate mortgages, lines of credit and other loans that float with prime rates. They have called that fixed rates would be lowered also, and Royal Bank offered a five-year fixed rate of 2.84% on Jan. 24. (Source: Financial Post)

Prices of Houses and Comparisons

If we compare 2013 to 2014 market prices, we see some increases.

Month Average Home Sale Price Result
January 2014 $346,744 increase of 1.0% over January 2013
February 2014 $353,407 ncrease of 2.0% over February 2013
March 2014 $359,051 increase of 0.3% over March 2013
April 2014 $374,015 increase of 0.8% over April 2013
May 2014 $381,172 increase of 3.2% over May 2013

Ottawa is a healthy market that prices don’t go up and down like they do in some other Canadian cities, where there could be a very large influx of price ups and downs such as in Alberta… Prices of houses are still slowly going up here in Ottawa, with some minor adjustments in various neighbourhoods. 2014 was a year that average days on the market for a property increased significantly from the previous years and that was certainly not usual. Properties considered as luxurious in remote areas and the ones far from Ottawa core got hit first when it came to price reductions, however many city properties still held their value and on average saw a price increase by around 1 % in 2014.

And last but not least, this chart is key for us to understand what the economy has been doing in the near past and what the expected figures are for the coming years.

2012 2013 2014 2015 2016
Total Employment (000s) 697.6 687.4 696.5 706.0 715.5
% change 2.4 -1.5 1.3 1.4 1.3
Unemployment Rate 6.4 6.3 6.5 6.0 5.9
MLS® Res. Sales 17,184 16,539 16,472 16,750 17,400
% change 0.2 -3.8 -0.4 1.7 3.9
MLS® Res. Avg. Price 327,656 334,320 339,785 344,000 350,000
% change 2.4 2.0 1.6 1.2 1.7
Residential Permits (Units) 8,211 6,643 8,950 7,800 8,000
% change 2.7 -19.1 34.7 -12.8 2.6

Source (Ontario Chamber Commerce)

Conclusion

As we can see the prediction of 2015 would be business might proceed as usual, some adjustments are in effect but there are still increases in price for some areas in Ottawa. If you are planning for your new purchase or selling your existing house, or investment contact me and I will be able to provide you a FREE CMA (Comparative Market Analysis) report of your house value, or for the area you are looking for.

Here are some stats you can tweet:

ottawa2015

Ottawa 2015 prediction

Disclaimer: As this article has been published by the author, mortgage rates might have been changed again in the last couple of days, therefore it is recommended to talk to a mortgage broker about the latest rates and mortgage rules and regulations.

Sources:
Financial Post
CBC News

Author: Nilay Ertemur

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The old man winter is coming soon, and since the weather has changed in early September here in Ottawa, most people are probably thinking (although one does not want to) about ways to winterize their homes.

Here are 10 tips to get your home ready for the winter:

1. Clean your gutters
September onward would be the best time to clean up all the tree branches, leaves or toys that are stuck in the gutters. You do not want the fall rain to be draining towards your house, you want it away from your foundation, having them cleared for rain/water flow would benefit any home. If you have a tree that sheds it’s leaves late in fall, you may wish to do this later in the season.

2. Replace your furnace filter
Most of us forget about replacing our furnace filters (which causes us to reach the furnace company for a service call only for them to advise us to change our filter and the furnace works just fine again) they do get dusty over the summer even though your furnace may not be running that much (remember it still runs if you have an air conditioning unit), replace your filter and mark the date on your calendar so that you know when the filter was last changed.

3. Caulk any gaps at windows or doors
Caulking is one of the cheapest solutions to block draft air coming into your home. The process is by simply moving your hand around the edges of your door and windows and find out if there is any air coming in. Caulk around where you feel the draft, don’t forget the attic door, and your laundry dryer vent might need caulking as well.

4. Check door and garage door weatherstripping
Check the main entrance door weatherstripping, if its damaged, replace it and also the weatherstripping for the door that enters your house through the garage. There is weather stripping for your outside garage doors that one can purchase from Lowes or Home Depot. Having garage door sealers/weatherstrips adds an extra layer or blockage of wind and breeze, thus it keeps your garage and house warmer.

5. Insulate electrical outlets and switches
Most people may not realize that electrical outlets also bring in some draft air into houses, and one can purchase a simple styrofoam socket sealer from Home Depot or Lowes. Remember when working with electricity, one has to turn it off from the main electrical panel before starting to unscrew any socket.

6. Add attic insulation
Houses lose most heat through the roof/attic, I have an article of how to insulate your attic, and it does really help in warming your house when you increase your attic insulation!

7. Reverse your ceiling fan
Most people think of using their ceiling fans only in summer, but in winter if you reverse the rotation (i.e running clockwise) it will bring back the warm air from the ceiling back down to be recirculated.

8. Wrap those pipes
Turn off those outside water sprinklers or faucets so that you don’t get your pipe frozen and end up with unpleasant insurance claims and flooding problems , turn them off from the inside if you can access them, also get pre-molded pipe sleeves to wrap up any hot water pipe so that less heat is lost through them for your hot water tank.

9. Get a programmable thermostat
If you are still using a non-programmable thermostat, go and obtain one that you can program, it will save you money. Hydro Ottawa peak saver plus runs a free program to get free thermostat till the end of September 2014.

10. Seal up any ducts
The ducts that run around your house can also be sealed up with aluminum foil tape, if you find/reach any heating duct, check if there is any leakage around them, usually leakage is found around the joints. Use your hands to feel if there is any breeze, and put some extra tape to seal it up.

And remember to enjoy winter, it will not last forever…

Author: Nilay Ertemur

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What is CMHC?

Canadian Mortgage and Housing Corporations Mortgage loan insurance is typically required by lenders when home buyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20 % down payment.

What does CMHC insurance do for me as a lender?

Well, CMHC is not life insurance, it is DEFAULT insurance, thus in the case that you default on your mortgage (stop paying your mortgage, and have your home potentially foreclosed), the loss will be covered. BUT, here’s where many people get confused, it is the lender’s loss that is covered, NOT YOURS. CMHC will likely still come after you, and the default will still go against you. Thus, you are paying to have less risk to the lender not yourself.

So whats the point of CMHC, if I am not covered?

Well think of it this way, if CMHC insurance wasn’t around, we will all be waiting until we could save up 20% down payments, to purchase our homes. Think about how long it took you, especially first time home buyers, to save that 5% down payment, 20% is simply out of reach for many people.

Although CMHC is a large cost, it saves us the time, and money we will spend along the way of renting and waiting. Thus enabling more people to get into the housing market, and helping keep the market strong with many buyers.

Just 5% down?
Yes, you can buy a home with a down payment of less than 10%:

Single-family dwelling: 5%

Two-unit dwelling: 7.5%

Minimum Equity of 5% from your own resources is required. Gifted down payments from an immediate relative are acceptable.

Once the following conditions are satisfied, you are eligible for CMHC Mortgage Loan Insurance:

  • Your principal residence is located in Canada.
  • You have a down payment of at least 5% of the purchase price of the property.
  • Your home-related expenses do not exceed 32% of your gross household income.
  • Your total monthly debt load does not exceed 40% of your gross monthly household income.

The minimum down payment for a second home purchase in Canada is 5%. CMHC allows Canadians to own up to two high ratio insured properties. To be eligible for a second home property purchase with a 5% down payment, borrowers must intend to occupy the property either themselves or have it occupied by an immediate family member. No rentals are allowed under this program.

Misconceptions on CMHC

  • CMHC insurance does not cover you when you pass away. You should still look into mortgage life insurance, or a term or permanent insurance product.
  • CMHC is not house insurance, it doesn’t protect your house or it’s contents. It’s important to still insure your home and contents against fire, theft, etc.                                                                                                  Author: Nilay Ertemur
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