The Housing Recovery has seemed to take hold across all of Canada. It all started back in the summer of 2009 where the activity for new builds and existing house sales started to increase. This trend continued into the fall and winter. Usually in the last two months of the year home sales slow but even through the winter months of November and December this increasing sales trend continued. Housing sales in 2009 were better than 2008 due to the extraordinary 4th quarter. In addition the average price of detached bungalows rose to $315,055 (up six per cent), the price of a standard two-storey home rose to $353,026 (up 5.2 per cent), and the price of a standard condominium rose to $205,756 (up 6.4 per cent).
This strong recovery in the housing market was attributed to the low mortgage rates as well as some pent up buyer demand. It is expected that this home sales trend and price appreciation should continue while interest rates stay low. As interest rates start to increase the hot real estate market will level off to more normal historical levels during the second half of 2010.
So if you are looking to purchase a property, now is an excellent time with low interest rates for the near future and continued price appreciation during the coming years. Contact us today to take your first step of mortgage financing to purchase you new property.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
Monday, January 25, 2010
Monday, January 4, 2010
Property Taxes 101
The time has come for a new property tax year. In most areas property taxes are based from January to December but must usually be paid in full in June. There are three ways to pay your property taxes 1) Lump sum 2) Through a monthly municipality program (eg. TIPPS) and 3) Through the lender.
1) Lump Sum – You can pay your property taxes when due with one payment but most lenders do not allow this. It also can be very difficult to pay a large $2,000 tax bill fully when due. In addition if the full amount is not paid on time penalties will be charged in addition to your tax payment. It is more advisable to spread your tax payments throughout the year.
2) Monthly Municipality program – Most areas will allow you to pay your taxes on a monthly basis directly to the city or town. These programs are designed to help spread out the responsibility instead of one lump sum payment. In addition you can avoid any late payment penalties if you cannot come up with the full amount using the lump sum option.
3) Through the Lender – This option is similar to option 2 above. The lender collects the taxes along with your regular mortgage payments spreading the tax bill over the entire year. When the taxes are due the lender pays for your taxes in full with the payments collected from you over the year.
With options 2 and 3 payments may be adjusted higher or lower when your property tax payment amount is set by the municipality. Therefore if you pay your property taxes monthly with taxes due in June, the taxes are collected from July to June to pay the taxes fully in June. Please look at the following example.
Tax bill in June 2009 was $1,200.
Start making your monthly tax payments of $100 starting July 1st 2009.
In January of 2010 you receive your property tax assessment (Your property taxes owing be for 2010 due in June).
Based on your new tax assessment, your monthly payments can be adjusted higher or lower, also remembering you have already paid $700 ($100 per month) in taxes From July 1st to January 1st. If your new tax assessment comes in higher at $1,300 your payments get adjusted to $1,300 - $700 = $600 / 5 months remaining until tax bill due in June = $120 per month. If your new tax assessment comes in lower at $1,100 your payments get adjusted to $1,100 - $700 = $400 / 5 months remaining until tax bill due in June = $80 per month.
One misconception is that if you pay your taxes through the lender you pay higher property taxes. This is false as your property taxes are not set by the lender and no matter what option chosen your property taxes paid are always the same. We recommend using options 2 and 3 as they are the best ways to manage and pay for your property taxes.
When purchasing a new property, how property taxes are accounted for is different for your first tax bill. The easiest way to illustrate is with the following example:
Purchase a home with property tax bill for 2010 of $1,200 due in June 2010.
1) If you purchase the property between January and June, upon signing the papers at the lawyers you will receive a property tax credit. For example, if you purchased the property May 1st, the original owner has paid the property taxes from January to April ($400). Therefore when you sign the papers at the lawyers you will receive $400 credit to you from the sellers part of the property taxes. However, you will now be responsible for the full $1,200 property tax bill due in June. This means that if you pay through a monthly tax program you only have 2 months to pay the full $1,200 and the next two payments would be $600 each. Starting July 1st your monthly tax payment will go down to $100. Typically the lenders may let you spread the payments for the current taxes ($600/month) over a longer period of time to ease your payments however the effect is that your payments will not return to the $100 level on July 1st.
2) If you purchase the property between July and December, upon signing the papers at the lawyers you must pay extra for the property taxes. For example, if you purchased the property September 1st, the original owner has paid the full property taxes of $1,200 in June but only owes from January to August ($800). So when you sign the papers at the lawyers you will pay an extra $400 to the previous owner as they have paid the taxes to December. Now your monthly payment for your next years tax bill will be $1,200 / 10 months remaining until next property tax bill = $120. When your new assessment comes in January this monthly payment may be higher or lower.
You now have the basics of how your property taxes are collected and paid. If you have any further questions please feel free to contact us any time and we would be happy to assist you with your questions.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Wishing you, your family and friends a healthy and prosperous New Years in 2010.
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
1) Lump Sum – You can pay your property taxes when due with one payment but most lenders do not allow this. It also can be very difficult to pay a large $2,000 tax bill fully when due. In addition if the full amount is not paid on time penalties will be charged in addition to your tax payment. It is more advisable to spread your tax payments throughout the year.
2) Monthly Municipality program – Most areas will allow you to pay your taxes on a monthly basis directly to the city or town. These programs are designed to help spread out the responsibility instead of one lump sum payment. In addition you can avoid any late payment penalties if you cannot come up with the full amount using the lump sum option.
3) Through the Lender – This option is similar to option 2 above. The lender collects the taxes along with your regular mortgage payments spreading the tax bill over the entire year. When the taxes are due the lender pays for your taxes in full with the payments collected from you over the year.
With options 2 and 3 payments may be adjusted higher or lower when your property tax payment amount is set by the municipality. Therefore if you pay your property taxes monthly with taxes due in June, the taxes are collected from July to June to pay the taxes fully in June. Please look at the following example.
Tax bill in June 2009 was $1,200.
Start making your monthly tax payments of $100 starting July 1st 2009.
In January of 2010 you receive your property tax assessment (Your property taxes owing be for 2010 due in June).
Based on your new tax assessment, your monthly payments can be adjusted higher or lower, also remembering you have already paid $700 ($100 per month) in taxes From July 1st to January 1st. If your new tax assessment comes in higher at $1,300 your payments get adjusted to $1,300 - $700 = $600 / 5 months remaining until tax bill due in June = $120 per month. If your new tax assessment comes in lower at $1,100 your payments get adjusted to $1,100 - $700 = $400 / 5 months remaining until tax bill due in June = $80 per month.
One misconception is that if you pay your taxes through the lender you pay higher property taxes. This is false as your property taxes are not set by the lender and no matter what option chosen your property taxes paid are always the same. We recommend using options 2 and 3 as they are the best ways to manage and pay for your property taxes.
When purchasing a new property, how property taxes are accounted for is different for your first tax bill. The easiest way to illustrate is with the following example:
Purchase a home with property tax bill for 2010 of $1,200 due in June 2010.
1) If you purchase the property between January and June, upon signing the papers at the lawyers you will receive a property tax credit. For example, if you purchased the property May 1st, the original owner has paid the property taxes from January to April ($400). Therefore when you sign the papers at the lawyers you will receive $400 credit to you from the sellers part of the property taxes. However, you will now be responsible for the full $1,200 property tax bill due in June. This means that if you pay through a monthly tax program you only have 2 months to pay the full $1,200 and the next two payments would be $600 each. Starting July 1st your monthly tax payment will go down to $100. Typically the lenders may let you spread the payments for the current taxes ($600/month) over a longer period of time to ease your payments however the effect is that your payments will not return to the $100 level on July 1st.
2) If you purchase the property between July and December, upon signing the papers at the lawyers you must pay extra for the property taxes. For example, if you purchased the property September 1st, the original owner has paid the full property taxes of $1,200 in June but only owes from January to August ($800). So when you sign the papers at the lawyers you will pay an extra $400 to the previous owner as they have paid the taxes to December. Now your monthly payment for your next years tax bill will be $1,200 / 10 months remaining until next property tax bill = $120. When your new assessment comes in January this monthly payment may be higher or lower.
You now have the basics of how your property taxes are collected and paid. If you have any further questions please feel free to contact us any time and we would be happy to assist you with your questions.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Wishing you, your family and friends a healthy and prosperous New Years in 2010.
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
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