13 Nov

Escrow and What You Need to Know


Posted by: Clarissa Yap

Let’s talk about escrow! While this arrangement may not necessarily impact your mortgage, it can be helpful to understand should anything come up throughout your term.

What is Escrow

Starting with the basics, what IS escrow exactly?

Escrow refers to a financial agreement where assets or finances are held by a third party on behalf of two other parties (such as a homeowner and bank). The escrow party is a neutral entity that holds funds during the transaction process.

Homebuyer’s Escrow

Most of you will likely be familiar with this from a real estate and notary perspective, which is known as a homebuyer escrow. This is when you sell or purchase a home, your money is transferred to the notary for processing property transfer taxes, existing overdue payments, real estate fees, etc. Once they have processed it and the transaction is completed, the remaining funds then get deposited to you and your mortgage begins.

Escrow is also the instance where you put a deposit down on a property and the cheque or deposit is held until the transaction is completed.

Homeowner’s Escrow

There is also another escrow known as homeowner escrow. This is slightly different from your homebuyer’s escrow whereby the agreement ends when the sale is closed. For homeowner escrow, the account is designed as a holding area for funds to pay off various property-related costs, such as:

  • Homeowners insurance premiums
  • Private mortgage insurance (PMI) premiums
  • Flood or wildfire insurance premiums
  • Property taxes

Homeowners may choose to have their funds in escrow for these expenses to avoid missing any payments. Lenders would generally collect these expenses as part of the borrower’s monthly mortgage payment.

Benefits of Escrow

There are a variety of different benefits for using an escrow depending on whether you are a buyer, seller or lender including:

  • Buyers:
    • Buyer may get their earnest money back if a sale falls through.
    • Earnest money is often applied to down payment or closing costs.
    • Mortgage escrows break insurance premiums and property taxes into monthly payments.
    • A lender manages the mortgage escrow account on the homeowner’s behalf.
  • Sellers:
    • Escrow ensures that a property doesn’t change hands before the sale is complete.
    • If the buyer doesn’t uphold the purchase agreement, the seller could keep the earnest money.
  • Lenders:
    • Can ensure payments are made on time and reduce lending risks.
    • Managing the account can help avoid late fees or liens against the property.

Drawbacks of Escrow

As with any potential agreement, there can be drawbacks to escrow that are important to consider and understand before you jump in. These disadvantages include:

  • Setting up your escrow account may require an upfront deposit.
  • You may be charged additional fees for escrow services.
  • Insurance premiums or property tax increases could affect monthly mortgage payments.
  • Moving your money into escrow can limit the amount of cash flow on hand.

If you are looking at buying or selling in the future, don’t hesitate to reach out to me to determine how escrow could affect the process and your mortgage agreement! I’d be more than happy to review your situation and recommend the best course of action before you move ahead.


Written by DLC Marketing Team
6 Nov

So, you need a tenant


Posted by: Clarissa Yap

If you have a basement suite or rental property and you are currently looking for a tenant, there are some things to know! Whether this is your first tenant or you have other rental properties, it is a good idea to familiarize yourself with the specifics to ensure a harmonious tenancy.

As always, your responsibility as the landlord is to keep your rental properties in good condition and ensure they meet health, safety, and housing standards. However, as a landlord, you also have additional responsibilities around the rental agreement and tenant regulations.

Tenancy Agreement

Landlords are required to prepare a written agreement for every tenancy. Bear in mind, if this agreement is not prepared the standard terms for your province will still apply, especially if a security deposit is paid. This agreement should clearly outline the following:

  • Who the agreement is between
  • The length of the tenancy
  • Rent amount and due date
  • Required deposits (if any)
  • Pet restrictions (if any)
  • Additional terms (smoking or non-smoking, etc)

The tenancy agreement should also outline if there is the ability to add a roommate, and whether or not utilities, parking, storage, laundry, etc. are included.


Typically, a security or damage deposit is requested by the landlord to establish tenancy and cover any unexpected issues that may arise. The deposit can be no more than half of the first month’s rent.

If you are charging a pet deposit fee, note that guide or service pets are exempt from any damage deposits. In addition, you cannot charge fees beyond the pet damage deposit.

Move In

To ensure the move-in goes smoothly, tenants and landlords should schedule a move-in time that works for everyone. At the beginning of the tenancy, you may also consider an inspection before the new tenant has moved in to ensure everyone is on the same page and the condition of the unit is clear in regard to any potential damages or fixes needed.

As a landlord, you are also responsible for changing the locks (at your cost) should the new tenant request it.

Additional Considerations

As a landlord, you will want to assess the suitability of any new tenant before signing the agreement. There are a few things you can do to ensure a smooth process and the right choice of tenant:

  • Ask for proof of identity
  • Thoroughly check all references
  • Contact previous landlords to ask about rental and payment history
  • Conduct a credit check to confirm income and financial suitability
  • Get the names of all persons to be living in the rental unit

Once you have reviewed the above, you will be in a good position to determine if the potential tenant is a good fit for the rental space.

However, keep in mind that you cannot refuse to rent to a tenant based on any discriminatory aspects such as race, gender, sexual orientation, religion, etc. In addition, you cannot refuse to rent to individuals on income assistance.

While it can seem like a lot, with the proper preparation and understanding of tenant laws and regulations in your area, you can ensure a smooth and successful rental process!


Written by DLC Marketing Team


30 Oct

6 Things for Co-Signers to Consider


Posted by: Clarissa Yap

Are you thinking about co-signing on a loan? If you’re looking to help out a family member or loved one, this is a great way to do that as a co-signer can help overcome stress testing and borrowing limits.

However, it is important to be aware of the implications when co-signing on any loan.

  1. Credit History: If you are acting as a co-signor or guarantor on any loan, you essentially allow them access to your credit history. This means, if the borrower is late on the payments or there are issues with the loan, it will affect your credit score as well as theirs.
  2. Legal Implications: Always be sure to understand the taxes, legal and estate situations that go along with co-signing, should the borrower fail to pay. A lawyer can help you review the loan agreement and advise of any items you may need to take note of.
  3. Timeline: Understanding how many years the co-signer agreement will be in place and what your options are for making changes will help you determine the scope of the loan and if you are able to make changes at any point should the borrower become able to assume the entirety of the mortgage on their own in the future.
  4. Personal Income Tax: Depending on the loan, you may have an obligation to pay capital gains taxes so it is a good idea to review your personal tax situation with an accountant prior to signing off on the co-borrower agreement to ensure no surprises.
  5. Relationship with Borrower: This is a vital consideration for going in on any loan. Do you trust the individual? Are you aware of their financial situation? Are you willing to potentially put yourself at risk to assist them? These are all important questions as many of us may want to help out family or loved ones, but it is important to ensure that the individual is reliable.
  6. Future Finances: Lastly, consider your future finances and if you had any plans in the future that could be impacted by an additional loan. How much flexibility do you need for yourself and your family? If you have plans to refinance for a renovation or make changes to your own mortgage, being a co-signor could affect your options.

Co-signing for a loan always requires careful consideration as it is a large responsibility. However, when done correctly and with people you trust, it can be a great way to assist family members or loved ones with their goal of homeownership. If you are considering co-signing on a loan and have any questions or would like more clarity, please don’t hesitate to reach out to me today!


Written by DLC Marketing Team
23 Oct

Your RRSP Contribution Deadline


Posted by: Clarissa Yap

When it comes to your money, RRSPs are one of the best ways to save. Known as a “Registered Retirement Savings Plan”, RRSPs have tons of benefits including: reducing your taxable income, earning compound interest, savings protection and more.

One major component of RRSPs are your contributions! You have a maximum contribution amount that is equal to 18% of your total income for the previous year, not exceeding the annual limit (set per year by the Canadian government).

Before your RRSP deadline, there are a few things to consider to help you get a jump start in planning for the future and increasing your peace of mind:

  • Should you invest in a RRSP or focus on paying down your mortgage?
  • Is a debt consolidation mortgage right for you?
  • Should you consider the Home Buyers’ Plan to help fund your down payment on your first home?

If you already contributed this year, or missed the deadline, that’s okay! These are great questions to consider before next years contribution.

If you’re wondering if you still have the ability to contribute to your RRSP this calendar year, you can check your contribution levels on your Notice of Assessment from last year’s tax return or on the CRA My Account website.

To help understand your financial direction and what benefits paying down your mortgage might have versus adding to your RRSPs, please don’t hesitate to reach out to me today! I’d be more than happy to review your situation and take a look at your mortgage to help determine the best course of action.


Written by DLC Marketing Team


16 Oct

Going away? Vacation checklist for your home


Posted by: Clarissa Yap

Whether you’re jetting off to sunshine and warm sand, an international adventure, or a weekend getaway, before you go there are a few things you can do to protect your home while you’re away!

  1. Unplug all electronics and appliances: To reduce energy costs while you are traveling (and mitigate any risk of unexpected fires), it is a good idea to unplug all electronics and appliances. This includes your microwave, toaster, televisions, entertainment and gaming systems, computers, etc.
  2. Clear out your fridge and take out any trash: The last thing anyone wants is to come back home and realize they forgot to clean up before they left! To avoid any odours or unwelcome surprises when you get home, be sure to clear out your fridge and take out any and all trash before heading off on your holidays!
  3. Adjust your thermostat: While potentially not as necessary for a weekend getaway, this is extra important for longer trips. Depending on when you’re traveling, whether it is summer versus winter, you may want to adjust your thermostat to maintain humidity balance and avoid your home being stuffy when you return. On the other hand, some individuals will opt to leave their thermostats at a comfortable temperature when traveling during colder seasons to ensure a nice warm welcome upon return!
  4. Close and lock all windows and additional entrances: Ensure that all your windows and entrances are locked and sealed tight. You can choose to close blinds or leave them open, depending on your comfort levels and the items in your home. Be mindful that the more you leave open, the more potential thieves will be able to see inside.
  5. Water plants: Again, depending on the length of your trip, you may be fine to simply give your plants one last big drink before traveling, or you may consider having someone check on your home while you’re away and look after your plants.
  6. Set up a pet sitter and/or someone to check on your home: Similar to point five, depending on your situation and whether or not you have pets, you may choose to have someone stay in your home or pop by every day to check on them and provide food and water. In some cases, you may opt to board your pet instead, but having someone stop by your home every other day while you’re away is a good rule of thumb to avoid potential issues.
  7. Leave a vehicle in your driveway: This is a simple step that can help with deterring potential thieves by implying that there is someone at home.
  8. Set your home alarm: If you have an alarm installed, be sure to set it to an appropriate level for while you’re away. If you leave your alarm activated, be sure to provide the code to whomever will be checking your home, as well as potentially a neighbour you trust should anything happen in the home. If you don’t have a home alarm, you may consider setting your lights on a timer or utilizing a motion sensor bulb to create the illusion of movement in your home.
  9. Check your smoke detector: Ensure your smoke detector is working properly before you leave. Turning off your electronics per step 1 and adjusting your thermostat per step 3 will assist with reducing any potential risk of fire damage, but having a working smoke alarm is imperative to alert neighbours for quick action while you are out of your home.
  10. Leave your emergency contact information with a neighbour: Lastly, we have mentioned neighbours a few times as, depending on your relationship with them, they are important contacts for when you are traveling. If you have someone else stopping by to check your home, it can be a good idea to simply leave that individual’s contact information with a neighbour so that your trusted friend can check out any situations that might arise.

At the end of the day, a few quick checks to your home can save you a headache while you’re trying to enjoy your holidays, and also reduce any issues upon return!


Written by DLC Marketing Team
9 Oct

Converting Your Basement to an Income Suite


Posted by: Clarissa Yap

With the current interest rates and economic scenarios, many Canadians may be looking for ways to bring in some extra cash. One option for this is to put your home equity to work and consider renovating your basement into a legal income suite! You can do this by using a secured credit line (home equity line of credit or HELOC) to help fund the upfront cash to make changes to your home.

A few things to consider before you invest in renovating to create an income suite include:

Zoning: Before looking into doing anything with an income suite, always double-check if you are zoned accordingly for a smooth renovation. If your zoning does not allow for secondary suites, see if you can rezone.

Local Regulations: Depending on your location, there may be particular regulations that you need to follow or be aware of regarding your suite. A few examples of how the regulations can differ between provinces or cities include:

  • In Coquitlam, you cannot have a suite that is more than 40% of the main house floor plan. You are also required to offer a parking spot for tenants.
  • In Kelowna, you can only have one secondary suite and the home must have an “S” designation.
  • In Calgary, updated zoning legislation has now made it easier to add income suites.
  • Toronto has also proposed reforms that will make it easier to add suites.
  • In Montréal, anyone carrying out a project involving the addition of at least 1 dwelling and a residential area of ​​more than 450 m² (equivalent to approximately 5 dwellings) must enter into an agreement with the City of Montréal in order to contribute to the supply of social, affordable and family housing. It can be a new building, an extension, or the conversion of a building.

Visit the official municipal websites or consult local building departments to obtain accurate and up-to-date information on the rules and requirements in your area BEFORE getting started.

Insurance & Legal Considerations: Before adding your secondary suite, ensure that you have proper insurance coverage or the ability to add additional coverage to protect both the primary residence and suite. In addition, you will want to consult a lawyer and draw up a tenant or rental agreement for any potential tenants. Ontario has a mandatory standard lease agreement that all landlords must use.

Unit Layout and Design: If the zoning and regulations in your area allow you to build an income suite, the next steps are to look at the suite layout and dimensions. Confirm any size restrictions or minimum ceiling height requirements as you are laying out the design for the unit. The unit should have, at minimum the following:

  • A separate parking space for the renter.
  • A separate entrance, kitchen, bathroom, and living/sleeping areas.
  • Ventilation and soundproofing measures to enhance livability.
  • Consideration of natural light.
  • Interlink smoke detectors for primary and secondary residences.
  • Separate, independently-controlled ventilation and heating system.
  • Proper drainage, sewage connections, and utility separations.
  • Outlets, circuits, and lighting that meet electrical code requirements.

Ensure that however your income suite is designed, you are hiring the appropriate building, plumbing, and electrical experts to ensure your suite is up to code and avoid any potential disasters.

Building & Trade Permits: Once you have confirmed that you are properly zoned and able to add an income suite and understand all the regulations for your area, you will want to draft your blueprints and submit a permit application, along with the fee, before you get started. For instance, in B.C. you are required to have a Building Permit for any suite to be considered legal.

IMPORTANT: Even if you are not required to have a building permit, it is important to get these permits for other aspects including insurance coverage should anything happen. Having a building permit will help protect your investment.

In addition to your building permits, you will need to get permits for any plumbing, electrical, and gas renovations prior to beginning your work.

Inspections & License: Once you have your permits and have begun construction, make sure you understand what inspections are required throughout the process and you schedule them accordingly with local authorities to ensure compliance with building codes, fire safety standards, and health regulations.

If the work meets all requirements, your suite will be approved. The last step is determining if you need a business licence. This is not required if your family (parents, children, etc.) will be living in the suite. In Vancouver, for example, if you intend to rent out your suite long-term, you DO need a license. Be sure to check any rules on this in your area.

Incentives: Beyond the ability to earn extra income per month, there are a few additional government incentive programs when it comes to suites including:

  • First Nations: If you live on a First Nations reserve, you may be eligible for federal funding that will provide up to $60,000 to help you build an inexpensive secondary suite rental linked to your principal home. If you live in a northern or remote area, this amount is increased 25%. This is a 100% forgivable loan that is not required to be paid back assuming all guidelines are followed.
  • Residential Rehabilitation Assistance Program (RRAP) – Secondary and Garden Suites: This program is open to all First Nations or individual First Nation members, particularly those who own a family home that can be converted to include a self-contained suite for a senior or adult with disability.
  • Multigenerational Home Renovation Tax Credit: A credit for a renovation that creates a secondary unit within the dwelling to be occupied by the qualifying individual or a qualifying relation. The value of the credit is 15% of the lesser of qualifying expenditures and $50,000.
  • British Columbia: Beginning in early 2024, BC homeowners will be able to access a forgivable loan of 50% of the cost of renovations, up to a maximum of $40,000 over five years, for income suites.
  • Ontario: There are multiple secondary suite programs throughout Ontario, depending on your region. These loans provide $25,000 to $50,000 in funding and are forgivable assuming continuous ownership for 15 years.

While it is important to look online and do your research. Your best resource will be visiting local authorities at the “City of” to confirm that you completely understand the considerations before moving forward with implementing an income suite.


Written by DLC Marketing Team
2 Oct

Mortgage Portability


Posted by: Clarissa Yap

When it comes to getting a mortgage, one of the more overlooked elements is the option to be able to port the loan down the line.

Porting your mortgage is an option within your mortgage agreement, which enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. Thereby allowing you to move or ‘port’ your mortgage over to the new home. Plus, the ability to port also saves you money by avoiding early discharge penalties should you move partway through your term.

Typically, portability options are offered on fixed-rate mortgages. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate. When it comes to variable-rate mortgages, you may not have the same option. However, when breaking a variable-rate mortgage, you would only be faced with a three-month interest penalty charge. While this can range up to $4,000, it is much lower than the average penalty to break a fixed mortgage. In addition, there are cases where you can be reimbursed the fee with your new mortgage.

If you already have the existing option to port your mortgage, or are considering it for your next mortgage cycle, there are a few considerations to keep in mind:

  1. Timeframe: Some portability options require the sale and purchase to occur on the same day. Other lenders offer a week to do this, some a month, and others up to three months.
  2. Terms: Keep in mind, some lenders don’t allow a changed term or might force you into a longer term as part of agreeing to port you mortgage.
  3. Penalty Reimbursements: Some lenders may reimburse your entire penalty, whether you are a fixed or variable borrower, if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand-new term of your choice and start fresh. Keep in mind, there can be cases where it’s better to pay a penalty at the time of selling and get into a new term at a brand-new rate that could save back your penalty over the course of the new term.

To get all the details about mortgage portability and find out if you have this option (or the potential penalties if you don’t), contact me today for honest advice and a helping hand throughout your mortgage journey!


Written by DLC Marketing Team
25 Sep

Choosing Your Ideal Payment Frequency


Posted by: Clarissa Yap

Your payment schedule is the frequency that you make mortgage payments and ranges from monthly to bi-monthly, bi-weekly, accelerated bi-weekly or even weekly payments. Below is a quick overview of what each of these payment frequencies mean:

Monthly Payments: A monthly payment is simply a single large payment, paid once per month; this is the default that sets your amortization. A 25-year mortgage, paid monthly, will take 25 years to pay off but includes the added burden of one larger payment coming from one employment pay period. With this payment frequency, you make 12 payments per year.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have a monthly payment of $4,156.19. No term savings; no amortization savings.

Bi-Weekly Payments: A bi-weekly mortgage payment is a total of 26 payments per year, calculated by multiplying your monthly mortgage payment by 12 months and divided by the 26 pay periods.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have a bi-weekly payment of $1,915.98 with term savings of $177 and total amortization savings of $1,769.

Accelerated Bi-Weekly Payments: An accelerated bi-weekly mortgage payment is also 26 payments per year, but the payment amount is higher than a regular bi-weekly payment frequency. Opting for an accelerated bi-weekly payment will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. This frequency also allows the mortgage payment to be split up into smaller payments vs a single, larger payment per month. This is especially ideal for households who get paid every two weeks as the reduction in cash flow is more on track with incoming income.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have accelerated bi-weekly payments of $2,078.10 with term savings of $1,217 and total amortization savings of $145,184. Plus, you would save 4 years, 12 months of payments by reducing scheduled amortization.

Weekly Payments: Similar to monthly payments, your weekly mortgage payment frequency is calculated by multiplying your monthly mortgage payment by 12 months and dividing by 52 weeks in a year. In this case, you would make 52 payments a year on your mortgage.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have weekly payments of $957.50 with term savings of $253 and total amortization savings of $2,526. You can move to accelerated weekly payments to save even more!

Prepayment Privileges: In addition to fine-tuning your payment schedule, most mortgage products include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This can help reduce your amortization period (the length of your mortgage).

By exercising your prepayment privileges, you can take time off your mortgage. For instance:

  • Extra $50 bi-weekly is $32,883 total savings and an additional 1 year, 2 months time saved
  • Extra $100 bi-weekly is $62,100 in total savings and an additional 2 years, 3 months time saved on your mortgage
  • Extra $200 bi-weekly is $111,850 in total savings and an additional 4 years, 1 month of time saved on your mortgage.

Understanding the different payment frequencies can be key in managing your monthly cash flow. If you’re struggling to meet a large payment, breaking it up can be effective; while the same can be true of the opposite. Individuals struggling to make a weekly or bi-weekly payment, may benefit from one monthly sum where they have time to collect the funds.

Contact me or download our My Mortgage Toolbox app from Google Play or the Apple Store and check out the different payment calculators!

Written by DLC Marketing Team
18 Sep

Market Beware: Subject Free Offers


Posted by: Clarissa Yap

When it comes to purchasing a home, most offers include conditions or subjects, which are requirements or criteria to be met before the sale can be finalized and the property is transferred. Some of the most common subjects include:

  • Financing approval
  • Home inspection
  • Fire/home insurance protection
  • Strata document review if appliable

The purpose of these subjects is to protect the buyer from making a poor investment and ensure that there are no hidden surprises when it comes to financing, insurance, or the state of the property.

These conditions are written up in the purchase offer with a date of removal. This is agreed to by the seller before the sale is finalized. Assuming the subjects are lifted by the date of removal, the sale can go through. If the subjects are not lifted (perhaps financing falls through or something is revealed during the home inspection), the buyer can waive the offer and the purchase becomes void.

However recently, especially in heightened housing markets, there has been an emergence of subject-free (or condition-free) offers. These are purchase offers that are submitted without any criteria required! Essentially, what you see is what you get.

Below we have outlined the impact of subject-free offers on both buyers and sellers to help you better understand the risks and outcomes:

Pros of Subject-Free Offers

  • Buyers: The main benefit of a subject-free offer for a buyer is the ability to “beat the competition” in a heated market. However, it is not without risks.
  • Sellers: Typically, a subject-free offer will include a competitive price, willingness to work with the dates the seller prefers, and evidence that the buyer has already done as much research as possible. If time is sensitive for the seller because they are trying to purchase another home or want to move as soon as possible, they may also choose your offer over subject offers to expedite the process.

Cons of Subject-Free Offers

  • Buyers: As a buyer submitting a subject-free offer, you are assuming a great deal of risk in several areas including financing, inspection, and insurance:
    • Financing: While buyers may feel that they have a pre-approval and so they don’t require a subject to financing, it is important to recognize that a pre-approval is not a guarantee of financing. If you are submitting a subject-free purchase based on a pre-approval, buyer beware. The financing is subject to the lender approving the property and the sale; from the price and location to type of property or other variables the lender deems important. By submitting a subject-free offer without a financing guarantee (or an inspection, title check, etc.), there is a risk that the deal can fall through. Even when you do not include subjects on the offer, you still are required to finance your purchase. In addition, as deals are submitted typically with a deposit, there is a risk that if the subject-free offer falls through the buyer will lose their deposit. This amount can range vary in the thousands and is typically a percentage of the purchase price or down payment.
    • Inspection & Insurance: If a buyer is also opting to skip the home inspection and home insurance protection subjects to have the offer accepted, then they assume huge risk as they do not know what they are getting and whether or not the property is up to code for insurance.
    • Due Diligence: With subject-free offers, there is no opportunity for due diligence after the offer has been made. This requires the buyer to do all their research before their initial bid. Because it is firm and binding, a buyer who decides to back out will likely be met with serious legal ramifications. Submitting an offer without subjects is not due diligence and it is at the buyer’s behest.
  • For Sellers: When it comes to the individual selling the property, there is less risk with subject-free offers but not zero. While the benefit is essentially there is no wait to accept the offer on the seller’s side, they do not know for sure if financing will come through.

Financing Around Subject-Free Offers

When submitting a subject-free offer, it is essentially up to the buyer to do as much due diligence as possible before submitting. They will need to identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their very best to secure financing beforehand.

Contractual Obligations

Be mindful when it comes to purchasing offers versus purchase agreements. While your purchase offer is a written proposal to purchase, the purchase agreement is a full contract between the buyer and seller. The purchase offer acts as a letter of intent, setting the terms you propose to buy the home. If financing falls through, for example, then the contract is breached and this is where the buyer may lose the deposit.

It is also important to be aware of a breach of contract in the event that a seller chooses to take action. For example, if you submit a subject-free offer of $500,000 and cannot secure financing for that offer and the seller turns around and is only able to get a $400,000 deal with another buyer, they could potentially sue the initial buyer for the difference due to breach of contract.

Preparing a Subject-Free Offer

If you have decided to go ahead with a subject-free offer, regardless of the risks, there are some things you can do to mitigate potential issues, including:

  • Get Pre-Approved: Again, this is not a guarantee of financing when you do make an offer, but it can help you determine whether you would be approved or not.
  • Financing Review: Identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their very best to secure financing beforehand.
  • Do Your Due Diligence: Look into the property and determine if there have been major renovations or a history of damage. This could come in the form of a Property Disclosure Statement. While this statement cannot substitute a proper inspection, it can help identify potential issues or areas of concern. If possible, conduct an inspection before submitting your bid/offer.
  • Get Legal Advice: This can help you determine your potential risk and ramifications of the offer should it be accepted, or otherwise.
  • Title Review: Be sure to review the title of the property.
  • Insurance: Confirm that you are able to purchase insurance for the home. Keep in mind, an inspection may be required for this but in some cases, you can substitute for a depreciation report if it is recent.
  • Strata Documents (if applicable): Thoroughly review strata meeting minutes and any related documents to determine areas of concern.

While there are things that can be done to help with subject-free offers, it is still risky. Ultimately submitting an offer with subjects gives you the time and ability to gather information on the above, as well as access to the property or home for inspections.

If you are intent on submitting a subject-free offer, be sure to discuss it with your real estate agent as they can determine if a subject-free offer is necessary, or if perhaps a short closing window would suffice to seal the deal. A good realtor will keep you informed of potential interest and other bids during the process as well. Their goal should be to maximize your opportunity and minimize your risk. In addition, before making any offers, contact me to discuss your mortgage and financing so you can make the best decision.


Written by DLC Marketing Team
11 Sep

Home Renovations – Reality vs. Television


Posted by: Clarissa Yap

Watching home renovation shows is inspiring, often providing us with ideas for our own spaces. However, there is a bit of a downside when it comes to these shows – they can be misleading when it comes to the renovation process.

While we may want to recreate something from one of these shows, without knowing all of the ins and outs, you could be starting a project you’re not ready for! In order to sort out what is real and what is television magic, we have broken down some of the components that go along with a renovation.

Budget & Financing

When it comes to most home renovation shows, there is little to no discussion regarding finances. In reality, if you’re looking to renovate your home you would want to discuss with your mortgage broker or a mortgage expert from Dominion Lending Centres to determine your options.

Some of the ways that you can finance a renovation include:

  1. Mortgage Refinancing: This option will allow you to borrow up to 80% of your home’s appraised value (less any outstanding mortgage balance). Refinancing your mortgage (if approved) will provide you to access funds immediately and tends to have lower interest rates than a standard credit card or personal loan. This is best suited to large-scale renovations or remodels. You will want to refinance at the end of the mortgage term whenever possible to avoid breaking your mortgage and owing penalties.
  2. Purchase Plus Improvements Mortgage: This is a great option if you haven’t yet bought that home and will allow you to finance your renovation at the time of purchase. This type of mortgage is available to assist buyers with making simple upgrades, not conducting major renovations where structural modifications are made. Simple renovations include paint, flooring, windows, a hot-water tank, a new furnace, kitchen updates, bathroom updates, a new roof, basement finishing, and more. Depending on your mortgage, the Purchase Plus Improvements (PPI) product can allow you to borrow between 10% and 20% of the initial value for renovations.
  3. Financing Improvements Upon Purchase: Similarly to Purchase Plus Improvements, this option allows you to finance your renovation project at the time of a new purchase by adding the estimated costs to your mortgage with CMHC Mortgage Loan Insurance. You can obtain financing with only a 5% down payment for both the purchase of your home and the renovations for up to 95% of the value after renovations! Plus, there are no additional fees or premiums and you can earn added rebates for energy-saving renos.
  4. Line of Credit or Home Equity Loans: Lastly, you always have the option of utilizing a secured line of credit or home equity loan to pay for your renovation. Securing your renovation loan against the equity in your home can typically be up to 80% of the property value; accessible at any time. This will typically provide lower interest than non-secured financing and allows you to access funds at any time.

Once you have your source of renovation financing, you need to create a budget. On television, it is very hard to determine whether a renovation budget that is listed is accurate. In fact, in some cases the network or show itself even adds to the budget behind the scenes! As viewers, we are simply not aware of what has been factored into those numbers by the television producers such as design fees, permits, labour, material costs, promotional giveaways, etc.

Fortunately, when it comes to reality, you can easily create a realistic budget for your renovation by simply doing some research and requesting quotes. Working with a professional contractor in these cases is crucial to ensure all the work done is to code and to avoid any surprises down the line. A professional can also help you create a detailed budget and timeline for your project so you know what to expect. During all stages of the renovation from picking out paint and new tile to labour costs, be sure to consult your budget. You don’t want to be partway through your renovation only to find out that you’ve run out of money due to making changes or selecting more expensive materials!

Renovation Timeline

Perhaps one of the least realistic aspects of home renovation shows is the timeline. It can seem like just a few short weeks to re-do your entire kitchen, but in reality, that timeline is often stretched.

Working with your contractor to create a realistic timeline based on your goals will help make the process less stressful and ensure you know what you’re getting into BEFORE you start.

Keep in mind, just because you’re ready to renovate, that doesn’t mean a contractor will be available. You may also run into snags such as material shortages or other issues so keep that in mind when you are planning out your timeline.

Planning & Design

When it comes to home renovation television, there is often an interior designer who comes in and makes decisions without the clients; in reality, that is not the case. When it comes to a real-life renovation, all the changes would be well-documented and planned out in advance with the clients (or by the client). In addition, unlike television shows that don’t show certain aspects, you will need to ensure you get building permits and inspections done throughout your renovation. While it can be time-consuming, this is extra important to ensure that your renovation is legal and therefore covered by insurance should anything happen.

While doing a home renovation in real life is different from television, with the right planning and support team for financing and contracting, you can bring your vision to life! Contact your Dominion Lending Centres mortgage expert to get started.


Written by DLC Marketing Team