The Truth About 20% Down

Most homebuyers strive to save 20% down when looking to purchase.  Why? Because they can avoid the mandatory insurance premium when you put down less than 20%.  However, we are seeing more and more why this may not be the best choice for everyone.  How is that possible?  If I can get away with not paying insurance, why wouldn't that be the best bet for me?  Well, here are a couple of reasons why:

Rate:  Better rates are offered to 'high ratio' (purchases that have less than 20% down) clients.  At first glance, this is seemingly unfair - if I've saved enough money to put 20%, and need to borrow less, why are you penalizing me?  Well, look at it this way - your two friend Jim and Bob approach you and ask to borrow $1000; Jim is employed, and Bob is looking for work - whom would you feel more comfortable lending the money to?  Obviously, Jim, because you know he can pay you back.  When a high ratio client borrows from a lender, the mortgage must be insured, therefore there is no risk to the lender - whatever happens, they will get their money.  The client who has put 20% down is a greater risk to the lender than the one who puts less, so, in turn, they offer higher rates to mitigate that risk.

Property: When a mortgage is insured, the insurer (CMHC, Genworth or CG) not only assesses the applicant, but the property as well.  They are by far more stringent than the lender.  So, if you and your property are okay with the insurer, chances are, you are okay with the lender.  But, in the instance where you are putting 20% down, and are not insured, this property assessment is not done.  This doesn't mean that the lender doesn't do this, it just means that the bill for this gets turned over to you.  Appraisals are practically mandatory when buying with 20% down, and this usually comes up to about $300-$400.  Not a huge amount, but extra nonetheless.

Debt:  People often save 20% down, but still have balances on their credit cards or lines of credit.  I had a client the other day, who had saved $80,000 to buy a $400,000 home.  She had a loan that amounted to $15,000 and was paying $450/month for it.  When we did the math, it turned out that she was better off putting 15% down ($60,000), paying off her loan, and simply paying the small insurance premium.  We calculated the interest she was paying on her loan, and that amounted to more than the insurance premium.  Plus, it made more sense for her monthly budget as well.

This doesn't mean that you should never put 20% down - every situation is different.  However, look into your options thoroughly before you decide.  It's kind of the lesser of two evils and the greater of two goods.

Prefab Homes

Prefabricated homes (or, prefab homes) are homes that are created offsite, then shipped to the place of dwelling to be assembled.  They are more inexpensive because they are often mass produced, and require less materials and labour because they are manufactured offsite.  Though they are growing in popularity, the prefab home is not a new concept - they were introduced in the early1900's, and gained more popularity mid century across North America and Europe.  The craze has hit again as of late - though not in the form of Sears Catalog Homes anymore.  Ikea has had a line of prefab housing (Boklok) that is offered in Europe for the past 20 years, in which they offer apartment complexes, semis, townhouses, etc...  Go Green initiatives in the prefab world are also growing in popularity, which is optimal because you're able to get an inexpensive, environmentally friendly home delivered to you.  One of the companies who had received a lot of recognition and online buzz as of late is Toronto based Meka, which was the creation a local  designer, a Toronto entrepreneur, and a UofT Professor.  They created a prefab home made of a shipping container, which was 70% recycled material, and is shipped 95% assembled.

HARPER GOVERNMENT TAKES FURTHER ACTION TO STRENGTHEN CANADA’S HOUSING MARKET - What It Means

There's quite a buzz circulating today over Finance Minister Jim Flaherty's changes to government insured mortgages.  He noted that 

“Our Government stands behind the efforts of hard-working Canadian families to save by investing in their homes and their future,” said Minister Flaherty. “The adjustments we are making today will help them realize their goals, build on the previous measures we have introduced to keep the housing market strong, and help to ensure households do not become overextended. As just one example, the reductions to the maximum amortization period since 2008 would save a typical Canadian family with a $350,000 mortgage about $150,000 in borrowing costs over the life of that mortgage.”

The main changes that were implemented today are the following:
1. Maximum amortization for government insured mortgages reduced from 30 to 25 years.
2. Lower the maximum refinance amount from 85% to 80%
3. Re-adjust lending requirements for a GDS of 39% and a TDS of 44%.

So what do these new guidelines mean, and how do they affect us? Well, decreasing the maximum amortization - though it does mean buyers pay less interest - equates to higher monthly prices, which then challenges affordability and qualifying.  A $300,000 home on a 30 year amortization may cost $1200/month, but on a 25 year am can cost upwards of $1400/monthly.  You end up paying off your home at a faster pace, but the other complication is what the bank will allow for you to purchase.  When you look to make a purchase, the bank weighs your income against your debt and the mortgage price of your home.  They then determine if your income qualifies you to sustain this mortgage.  When the monthly payment becomes higher, the strings start to tighten, and what may have been affordable at a 30 year amortization, may no longer be affordable at a 25 year amortization.

Lowering the maximum refinance amount to 80% ensures that owners maintain equity and liquidity in their home.  This also means that insurance will no longer be required.  The percentage is calculated as a percentage of the value of your home - not of your current or previous mortgage, but of the market value of your home.

GDS (Gross Debt Service) and TDS (Total Debt Service) measure how much your responsibilities are serviced by your income.  Simply put, GDS is your mortgage (and taxes) versus your income, and TDS is your mortgage, taxes, and debt, versus your income.  Previously, your ratios could be GDS - 35% and TDS - 44% (depending on your credit score).  Now, GDS is increased to 39%.  This is of a very minimal impact, as the TDS has not changed.

I know this is all a bit heavy, but what we need to keep in mind is that this is for government insured mortgages.   In Canada, you can have your mortgage insured by CMHC, Canada Guaranty or Genworth - so there are still options available.  We have to remember that our government will do anything possible to avoid mimicking the US housing crisis - in which the American government had to provide financial aid to Fannie Mae (their version of CMHC).  They are tightening CMHC guidelines to ensure this.

Check Out My Grills!!!

I LOVE BBQ.  It's one of the best things about summer, and no matter how hard you try, you can't duplicate that grilled taste.  I put together a few really cool grills that I came across...because everything about bbq is amazing.

Bye Bye Baggies

So, Mayor Ford went in yesterday attempting to ban our 5 cent plastic bag fee, and not only came out defeated, but was slapped with an even bigger ban.  As of January 1, 2013, city council is implanting an all around ban on plastic bags.  Kind ridiculous to say the least.  Environmentalists are ecstatic, but there are a lot of valid questions and concerns floating around.  It's recommended that retailers offer paper bags as an alternative.  Firstly, paper bags are more costly to retailers - who will eat up the costs for that?  Higher prices?  Secondly, I can't imagine going to the grocery store and having to carry my juice, flour, and heavier items in a paper bag.  What if it rains?  Thirdly, what is going to happen to the large companies that produce these plastic bags?  It's hard to imaging shopping sans plastic bags, but maybe we're just a bit spoiled and careless.  I have tons of reusable bags, but always forget them when I do my grocery shopping.  I guess I can buy those biodegradable garbage bags for my garbage.  Hmmm...there are still a lot of questions, but maybe it's not that bad....?

Some Of My Favorite Toronto Patios

The Drake Hotel
1150.Queen.Street.West

Cadillac Lounge

1300.Queen.Street.West

The Boiler House

55.Mill.Street

Archeo

31.Trinity.Street

Balzac's

55.Mill.Street

Boardwalk Pub

1681.LakeShore.Boulevard.East

Murphy's Law

1702.Queen.Street.East

Globe Bistro

124.Danforth.Avenue

The Pilot Tavern

22.Cumberland.Street

180 Panorama

55.Bloor.Street.West

Watermark Pub

207.Queen's.Quay

Spice Route

499.King.Street.West

Reservations For 2 In The $38Million Yorkdale Food Court Please

Yorkdale has really topped it off this time.  After a tough day of shopping at Tiffany's, Burberry or Cartier, you can stroll into their 45,000 square foot food court and sit at your reserved table - "Would you like to be seated indoors, or on the outdoor terrace".  The court not only has a terrace, but fireplaces and hand bag hooks under the tables.  It doesn't just stop at fixtures, you also have services available to you - a 'perfume butler' will greet you, offering you different scents to freshen up.  There are also translators available, should you need directions, or your meal ordered for you.  Of course your food is served on beautiful melamine plates, with actual cutlery and glasses.

Never Wait On Hold Again??

I'd have to say that waiting on hold is one of my BIGGEST pet peeves.  Sometimes if I know I have to call somewhere that will have me waiting on hold forever (ie. government offices), I will wake up early just so I can be the first person calling.  Then I found this fantastic website - lucyphone.com - that does it for you!!  So, basically, you enter the phone number that you're calling, and a phone number that Lucy can call you back at.  Once you've gone through the menu and chosen where you want to be, you enter ** and it disconnects you while Lucy stays on the phone for you.  Once someone picks up, she calls you back! So the first thing I did was test it out - I called Rogers, AND IT WORKED!!!  The second thing I did was check to see if there was an iPhone app, AND THERE IS!!!  Now, my life is complete.

Concept Appliances

14 Concept Appliances That Need To Be Made

Yet, here are 14 interesting concept appliances that have made it to the model stage and look so good that we hope they go into development soon.Concept appliances give us a peek into the future. They are often aesthetically pleasing and offer interesting and unique features; however, it is a rare concept appliance that makes it off of the drawing board and into the showroom. Unrealistic designs, high production costs and lack of consumer demand are often the reason for many ideas to be scrapped.

iBasket

The iBasket is a hamper/washer/dryer combo. The transparent iBasket stores your dirty clothes. Once filled, the automatic wash and dry cycle begins. After it has finished drying, the iBasket will send you an email or text message to let you know it’s done.

Why do consumers need the iBasket?

The iBasket saves time and energy as you’ll never have to transfer your clothes from the hamper to the washer to the dryer again. Plus, you won’t have to worry about your lucky shirt being dirty when you need it for a special occasion.

Features:

• Transparent body
• Built-in air refresh system that removes the smell of dirty clothes
• Wi-Fi enabled to help you monitor it from your PC or laptop

The one drawback to the iBasket is that it is very small. It has a capacity of approximately 3-5 kg which works out to be around 3 t-shirts and 2 trousers.

FlatShare

The FlatShare refrigerator is made up of a single base station and up to 4 stackable modules. Each module is a self-contained unit so no one will need to deal with other roommates’ rotting leftovers and failed science projects. The modules are designed with a tall section for bottles, a spot for produce, and a small freezer for frozen items.

Why do consumers need the FlatShare?

Living with roommates can be fun and exciting until it comes time to clean the fridge. The FlatShare avoids potential conflicts by keeping each person’s food and mess separate.

Features:

• Customizable color skins
• Bottle openers
• White board
• A handle on the side of the module for easy transport

Coox

Coox is a mobile cooking table that lets users cook and eat wherever they like. Not only does it cook the food, it can also be an extension of the dinner table or desk since the table legs are adjustable. The Coox uses induction technology so once you are done cooking, the surface cools immediately to prevent burns.

Why do consumers need the Coox?

Everyone is on the go these days, looking for new and improved ways to save time. The Coox is perfect for someone who works through lunch or eats at their desk while trying to finish up last minute projects. They can prepare themselves a hot snack or keep their tea warm without having to go to the kitchen.

Features:

• Adjustable height
• Induction technology
• 3-burner glass ceramic cooking surface
• Cools down immediately after the cooking process has stopped
• Warming area on one corner
• Portable
• Concept Appliance Parts Available

E-Bag

The E-Bag is a portable cooler bag that works by using human energy. The E-Bag’s cooling system is powered by someone swinging it back and forth as they walk. So, the longer the walk, the cooler the E-Bag gets. The E-Bag’s rotating handle charges the battery with the user’s arm motion. The cooling system uses so-called Peltiertechnology, a kind of solid-state heat pump that transfers heat from one side of the device to the other.

Why do consumers need the E-Bag?

This bag is environmentally friendly as it uses no external energy source. It’s perfect for picnics, walks in the park or an outing at the beach. And if you’re tired, don’t worry, kids have energy to burn. Let them carry it for awhile.

Features:

• Capacity is approximately 3 liters
• 3 LED lights indicate beverage coldness
• No batteries required

Pure Washer

Pure Washer is a rotating dual sink that acts as a sink and dishwasher. The two sinks are designed so that only one sink is exposed at a time. After the dishes have been put into it; the exposed sink rotates under the counter to expose another sink that is exactly the same as the first. Pure Washer washes the dishes under the counter with degassed water – no detergent required. There is also a cycle for washing fruits and vegetables.

Why do consumers need the Pure Washer?

Pure Washer is perfect for the single person who lives on their own. Freshly soiled dishes are easy to clean so each wash will only take a few minutes. Plus, it is a space saver since there is no need for a sink and dishwasher.

Features:

• Dish cycle
• Fruit and vegetable cycle
• Reduces water consumption
• Reduces energy used
• No detergent required

Nevale Food Carrier

The Nevale Food Carrier is designed to keep hot foods hot and cold foods cold, all in the same container. It is built with 4 independent layers that have their own independent heating and cooling system. The digital display provides information on the conditions of each layer and can be programmed to reheat a certain layer at specific times.

Why do consumers need the Nevale?

Today’s busy lifestyle makes it hard to eat healthy, home-cooked meals. The Nevale lets you carry a wholesome hot or cold lunch with you wherever you go. It can even be programmed to re-heat your main course for you while still keeping your dessert chilly.

Features:

• Can hold up to 4 different types of hot and/or cold food
• Programmable digital control screen
• Each layer operates independently of the others
• Uses a plug or rechargeable battery
• Vacuum storage system keeps food safe from bacteria

Organic Cook

The Organic Cook is a compact, table-top appliance that can grill, boil or fry. It uses high-efficiency radiant energy that sends high frequency electromagnetic waves to cook while the vacuum system ensures that the food retains its flavor. This technology means that your food is ready in a fraction of the time required for traditional cooking.

Why do consumers need the Organic Cook?

The Organic Cook offers healthy oil-free frying, grilling and boiling, all in one portable appliance. The food is cooked in a fraction of the time and retains all of its natural flavors, plus it’s easy to use.

Features:

• Internal cooking pad offers flexible cooking options – grill, boil or fry
• Infrared technology and vacuum cooking
• Intuitive touch sensitive cooking selector
• Prepares food in a fraction of the time
• Portable

VESSTO

The VESSTO portable stove is an environmentally friendly appliance that uses an advanced version of theStirling Engine to power itself. Once the small battery gets the VESSTO at a high enough temperature, the Stirling engine can run by itself by using heat from the stove to expand and contract small quantities of gas inside. The aluminum base plate protects any surface it is placed on and it is also a key component of the Stirling engine as it helps to disperse the heat and reuse it.

Why do consumers need the VESSTO?

The VESSTO stove is the perfect way to reduce energy consumption in your home. The simple control panel makes it easy to use and it even has a sleep function that automatically switches off the stove after a specific amount of time. It is compact and lightweight enough to take anywhere, including outdoors.

Features:

• Renewable energy power source
• Extremely quiet
• Easy to read control panel can display recipes, notes or other downloadable cooking information
• Sleep function
• Ceramic coating for easy cleaning
• Portable
• Aluminum base plate
• Offered in red, yellow, blue and black

Go Fresh Fridge

The Go Fresh Fridge is made up of a main frame that houses 12 removable, temperature-controlled compartments. The food is identified by scanning a picture of it and then the compartment automatically sets the optimal temperature for that type of food. Once the compartment reaches the correct temperature, the cold air inlet closes to save on energy consumption.

Why do consumers need the Go Fresh Fridge?

The Go Fresh Fridge saves energy and increases the lifespan of your food (which in turn should reduce food waste) and this is good for the environment. In addition, it is so cool looking that you will be the envy of all your friends (if not, then at least it is a great conversation piece).

Features:

• Energy efficient
• Removable, insulated compartments
• Increases the lifespan of your food since it is stored at optimal temperatures
• Food odors cannot seep into other compartments

Rockpool Waterless Dishwasher

The Rockpool Waterless Dishwasher uses no water or chemicals; instead it uses super critical carbon dioxide in a closed loop system. The carbon dioxide is pressurized into a liquid with excellent grease and oil fighting properties. The carbon dioxide then combines with a small amount of environmentally friendly detergent to get the dishes clean. Once the washing cycle is finished, the carbon dioxide and dirt are separated so that the carbon dioxide can be used again.

Why do consumers need the Rockpool Dishwasher?

The Rockpool dishwasher takes an existing technology and puts it to good use in one of the most used appliances in the home. The closed loop system means that the carbon dioxide gets used over and over again while the dishwasher never uses a drop of water.

Features:

• Closed loop system means that the carbon dioxide gets used again and again
• Very quiet
• Simple user interface

NFridge

The NFridge has a modular design composed of small, stackable refrigeration cubes. Each piece is self-contained and works independently of the others. It uses magnetic refrigeration that produces a constant cold, faster than conventional refrigerators.

Why do consumers need the NFridge?

Not only does the NFridge use an earth-friendly cooling system, but the cold air is not released from the entire fridge when you remove an item. The modular design is perfect for people with large or small families. You can purchase the number of cubes you need and you don’t need to cool any cubes you aren’t using.

Features:

• Space saving design
• See-though modular compartments
• Soft touch operating digital membrane
• Magnetic refrigeration
• Resistant to dust and water
• Available in a variety of colors

Fog Shower

The Fog Shower is a showerhead that uses approximately 2 liters of water for a 5 minute shower. It does this by creating a fog or vapor flow of microscopic water droplets. The water is heated into water vapor which is then directed onto the person showering. An intelligent sensor sends the water in different directions based on the person’s movements.

Why do consumers need the Fog Shower?

The Fog Shower is a simple and easy way to reduce your water consumption by 18 liters/day which adds up to over 6500 liters/year. And since there is less water to heat up, you will reduce your energy consumption too.

Features:

• Reduces water usage
• Reduces energy consumption
• Intelligent sensor

Agbot

The Agbot is a solar-powered robot that can fertilize your lawn, plant seeds and guard your house at night. Its built-in GPS plots out the lay of the land in order to fulfill these tasks. In fact, its security system is so advanced that it will take a picture of an intruder and send it to you via email all before the intruder even knows he’s been spotted.

Why do consumers need the Agbot?

The security system alone is a great reason to get an Agbot. Its motion detector, night-vision camera and alarm system will make any intruder think twice before breaking into your home. And if you require lawn maintenance, the Agbot can take care of that for you too.

Features:

• Takes 40 seconds per planting
• The fertilizer system is designed to avoid inconsistent dispersal that causes lawn burn
• Solar powered
• Speed as fast as 6 miles/hour
• Night vision camera on a 360 degree swivel
• High-frequency alarm system
• Advanced motion detector
• Artificial intelligence
• Built-in GPS
• Bluetooth

The Agbot still needs some improvements since its battery only lasts for 4 hours. However the programmers are continuing to make improvements and expect the Agbot to run longer in the near future. They also have plans to expand its functionality and make it customizable for the consumer’s individual needs.

A short video about AgBot.

Bra Dryer

The Bra Dryer is a unique appliance that has the sole purpose of drying bras. Bras are made of wiring, fabric and padding that can be damaged using conventional dryers. The Bra Dryer’s patent-pending design preserves the bras shape while using a gentle infrared heat source that evaporates moisture from the bra fabric while silent fans inside the appliance remove the moisture.

Why do consumers need the bra dryer?

Bras can be very expensive and need special care. Therefore they need a special dryer to keep them from getting damaged by conventional dryers. Air drying takes far too long and blow drying your bra is inconvenient, time consuming and never does a really great job.

Features:

• Comes in a variety of cup and chest sizes to fit every woman’s needs
• Can be used with all types of bras
• Available in black and white

Plans are in place to start producing the bra dryer in 2010. It will also be available in a modular variation, thus letting you dry multiple bras at the same time.

via mybadpad.com