Replacement Cost verses Market Value

Homes must be insured to value. Insurance Brokerages do this by asking square footage, # of Storey’s, Brick, Vinyl or Log, is the basement finished, pool, garages, decks or porches etc. and that information is inputted into the insurance company’s computer software to determine the value of the house.

Insurance companies must insure to value so that insured’s’ are properly covered in the event of a total loss. The replacement cost includes debris removal

Market Value is not an accurate assessment for insurers.

Example is a home with a square footage of 1500 in Toronto might pay $800,000 yet for the same home in Peterborough the client might pay $270,000 but the cost to replace the home is the same, average is approximately $200.00 a square foot.
Homes must be insured to value. Brokerages do this by asking square footage, # of Storey’s, Brick, Vinyl or Log, is the basement finished, pool, garages, decks or porches etc. and that information is inputted into the insurance company’s computer software to determine the value of the house.

As you can see, you must be careful when it comes to adjusting the replacement cost of your home downward. Unless you want 50% of your home rebuilt, it is wise to perform a replacement cost estimate to determine your replacement value. Keep in mind that the market value of your home could improve and often time surpass the replacement value. In this case the value of the land has improved but will not necessarily cause the replacement cost to increase.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Home Insurance Checklist

Be prepared. These are some of the basic questions you or your clients may be asked in their application for insurance:

• How old is the home? (years old or built in)

• What is the construction type of the home? (Brick veneer, cinder block, wood frame, etc.)

• What type of roof does it have? (Shingle, steel, shake, etc.)

• How old is the roof?

• What is the estimated replacement value of the home?

• Is the home connected to municipal services or on a septic and well system?

• What type of heating system does the home have? (Oil, electric, solar, etc.)

• Is there any form of wood burning appliances in the home?

• Is it certified?

• What type of electrical entry is there? (110V, 220V)

• How far is the home from the nearest fire hydrant of fire station

• What type of plumbing does the home have/ (Cooper, ABS)

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

June 2011 Unemployment Rate

Employment rose for the third consecutive month, up 28,000 in June. The unemployment rate was unchanged at 7.4% as the number of people participating in the labour market increased. Over the past 12 months, employment has grown by 238,000 (+1.4%).

Employment was up in transportation and warehousing in June, while it fell in professional, scientific and technical services. There was little change in the other industries.

Increases in the number of employees working in the public and private sectors were tempered by a decline in the number of self-employed. Over the past 12 months, public sector employment rose by 2.5%, private sector employment was up 1.5%, while the number of self-employed was little changed.

Ontario, Alberta and Nova Scotia posted employment gains in June, while there were declines in Quebec as well as Newfoundland and Labrador. Employment was little changed in the other provinces.

The bulk of June's employment increase occurred among women aged 25 to 54.

Compared with 12 months earlier, the unemployment rate for students aged 17 to 19 was down in June, while it was little changed for students aged 20 to 24.

Unemployment in Peterborough

Peterborough area had the highest unemployment rate in the country last month at 10%, despite an additional 40,000 jobs in the province and a 0.2% dip in the provincial unemployment rate to 7.7%.

The Peterborough census metropolitan area's unemployment rate increased slightly to 10% in June from 9.9% in May, Statistics Canada's Labour Force Survey shows.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Mortgage Protection Insurance

If you've ever bought a home, you've probably been there: you meet with a lender to sign your mortgage documents and he or she offers you mortgage protection insurance. It can be as simple as ticking off a box and signing on the dotted line to accept the premiums and insure you and your family against death, disability or other catastrophic event that might leave you unable to make your mortgage payments.

But are those premiums competitive? How much will you pay annually for what type of coverage; and what is written in the fine print?

Lending institutions ancillary mortgage products are not the only ones on the market. Independent insurance companies also offer varying types of mortgage protection that can save consumers hundreds of dollars annually.

Whichever mortgage insurance plan you select, it’s good to know that even with mortgage protection insurance, there is competition. There is nothing stopping you from shopping around for the best mortgage protection for you with the most affordable premiums - the same as you would for any product.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Pay down your mortgage faster

Buying a home is probably the best investment you will ever make. That's because you can pay off your mortgage and build equity in your home over time. Renters on the other hand will continue to pay rent and will likely see their rent payments increase significantly as time goes by.

From the moment you make that first mortgage payment, you will probably be dreaming of the day when you can make your last one and be "mortgage-free." For most people that day is pretty far off in the future, but it is possible to speed up the process.

Your REALTOR® will be able to advise you on ways you can pay down your mortgage as quickly as possible. This information will be helpful when you are arranging financing on your home. Be sure to discuss various options with your financial institution before choosing a mortgage.
Amortization schedule
One of the best ways to pay off your mortgage faster is to shorten the "amortization period." By choosing a shorter amortization, you will not only pay for your home in less time, but you will make substantial savings in interest too.

For example, the most common mortgage amortization is 25 years. By shortening that period to 15 years, you will erode the amount of money you owe much more quickly and make fewer interest payments. Shortening the amortization period is not for everyone as it does mean larger payments, but for many people the benefit of long term savings is worth it.

Usually each mortgage payment is blended and applied to both the principal and interest so at the beginning, the interest portion of the payment is extremely high. However, with each payment, more and more of is applied to the principal. Ask your REALTOR® to give you examples of what your payments would be at the current interest rate amortized over 25 years as compared to 15 years.

Payment options
It used to be that most people made monthly mortgage payments, but weekly, bi-weekly and semi-monthly payments are more popular today. With these types of payment options you will reduce the amount of principal you owe faster because you make payments on a much more frequent basis and less interest is accrued. Many mortgages also offer homeowners the option of making an additional payment each year or increasing your payment each month. Making the equivalent of one extra payment a year can save you a considerable amount over time.
Anniversary date
Many mortgages allow you to make a lump sum payment on the anniversary date of your mortgage. Again this reduces the amount of money you pay interest on resulting in long term savings. It's wise to find out what "pre-payment" privileges are available on the mortgage you choose.

Your REALTOR® along with either your bank, trust company or mortgage broker can help you look at all the possibilities for financing your home and can tailor a mortgage that fits your income and your goals.
Shop around
Look for a mortgage that has as much flexibility as possible. Be sure you can make at least one extra payment a year and can choose the payment plan that works best for you. Your REALTOR® is experienced and knowledgeable about the many mortgage options and the types of payment plans available and can act as your guide to help you become mortgage free sooner.

REALTOR® is a registered trademark of REALTOR Canada Inc., a company owned equally by The Canadian Real Estate Association and the National Association of REALTORS® and refers to registered real estate practitioners who are members of The Canadian Real Estate Association. Used under license.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Source: Ontario Real Estate Association

Canadian Real Estate Forecast

A burst of activity- particularly in British Colombia, has caused CREA to adjust its’ forecast for 2011 and 2012.

They now expect national sales activity to reach 441,100 units in 2011, which is down by 1.3 % from 2010. This is slightly better than the 1.6 % decline forecast by CREA in February, driven in part to stronger than expected activity in British Columbia in Q1 2011.

Looking forward to 2012, CREA expects that that national sales activity will rise by 2.6 % to 452,500 units. This is much the same as the previous forecast, and is in line with the ten year average for annual activity.

Looking at average home prices across the country, CREA forecasts that prices will rise a respectable 4% this year and an additional nine-tenths of a per cent in 2012, to $352,500 and $355,800 respectively.

This reflects an increase over the previous forecast, due to an unexpected surge of buying activity of multi-million dollar homes in British Colombia- in particular in Vancouver. This emphasizes the tremendous impact too, that this activity localized to BC will actually have on the whole country.

There is some expectation too, that a rise in interest rates in the next few months will not have a huge material impact on housing sales, and CREA largely expects gains to reported on the heels of a modest dip in the last quarter.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com

Almost 40% of Young Condo Buyers Not Aware of New Lending Rules

A recent poll conducted by Environics Research Group for TD Canada Trust reveals, not surprisingly, that the majority of urban Canadian condo buyers are first-time home buyers.

Environics polled 806 people in Montreal, Toronto, Calgary and Vancouver who have bought a condo in the past 24 months or intend to buy a condo in the next 24 months. Results revealed interesting attitudes among participants under the age of 35.

For example, under-35 buyers surveyed don't plan to stay in their condos long: 45 percent plan to move after four to six years and 22 percent don’t intend to stay more than three years.

Despite extensive media coverage of Federal changes to mortgage lending rules, 39 percent of survey respondents under age 35 who are planning to buy a condo were not aware of these changes, which could significantly impact their buying options and payments.

The survey also found that, for younger respondents, affordability is the biggest driver in choosing a condo and two-thirds of young urban Canadians would rather buy a house. The opposite is true for the over-50 age group surveyed, who are thinking about downsizing.

The survey results beg the question: “Are young home buyers being realistic about home ownership?” In today’s market, there are likely investment advisors who would strongly caution first-time buyers against buying condos with the assumption that they will have enough equity to ‘trade up’ to a more expensive home after only a few years.

Maintenance and amenity fees combined with monthly interest payments must be factored in when considering the purchase of a condo. The higher these payments - the less equity you could be building over the short term.

Perhaps it is the unbridled pace of growth and low interest rates that have influenced a belief that profits can be made quickly in real estate. Those who got in at the bottom of the real estate boom saw great returns on investment; but like everything else, markets are cyclical. Over-leveraging yourself on the assumption you can turn around and sell your home quickly can be dangerous.

With lending rates predicted to rise, using a mortgage broker to shave even a few points off your mortgage rate and maximizing your down payment can add up to big savings over the life of your mortgage, not to mention smaller monthly payments. This means less money going to pay off interest and more going into your pocket.

It’s Your Career – I’m Here to Support YOU!
Constantine Isslamow | Broker of Record

CENTURY 21 United Realty Inc. Brokerage
387 George Street South, P.O. Box 178
Peterborough Ontario. K9J 6Y8
Direct Line: 705.743.4444 | Fax: 705-743.3702
Constantine.Isslamow@gmail.com
www.ConstantineIsslamow.com