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Purchasing a home is an expensive undertaking. By the time you’ve forked over the down payment, legal fees, and moving costs, you will be financially and emotionally drained. Before deciding to buy a home, you must think beyond the purchase price because those costs, while substantial, are a one-time thing.

Maintaining a home is costly and every homeowner needs to understand what they’re getting into before their mortgage is approved.

Property Costs

In the GTA, each homeowner must pay property taxes every year. The cost is devised by multiplying a property’s assessed value by the tax rate. There is flexibility with respect to the payment schedule, meaning homeowners can pay monthly, annually or make six equal payments a year.

Exterior Costs

If you own a house, you will have monthly costs to care for the exterior of your property.  Some of these are discretionary whereas others are required for the health of the house. These costs include:

• Cleaning the gutters
• Lawn care and gardening
• Roof Care
• Snow removal for driveway
• Window washing

Remember, some of these tasks can be performed by the homeowner, assuming they know what they’re doing and have the time. Doing a lackluster job could cost you more money in the future as you’ll have to pay someone to undo your work and then complete the job.

The Guts of the Home

There’s a lot of essential equipment and technologies that need regular upkeep in your house. Furnaces and hot water heaters need regular inspection and maintenance. You will also have to pay for general repairs and some opt to pay for housekeeping.

A good rule is that the annual maintenance of a home will cost one percent of the purchase price. If your home costs $500,000, then you should budget $5000 for ongoing maintenance. Anything left over can just roll into the budget for the following year. Some prefer to calculate maintenance costs per square foot. The rule here is to budget $1 per square foot. A 1,000 square foot home would conceivably cost $1,000 in maintenance.

For maintenance, repairs, and upgrades cash flow is essential. A home equity loan is a proven way to leverage your equity into maintaining or increasing the value of your property. If cash flow isn’t an issue, then be sure to properly budget.

A home equity line of credit (HELOC) is a way for homeowners to gain access to funds by securing their mortgage against the loan or line of credit. By leveraging the equity in your home instead of your credit rating and assets, you can receive more money and a better interest rate.

Here are some tips on getting a good deal on your HELOC.

Shop Around

Often, lenders offer different terms based on an application. This can include different penalties or fluctuating introductory rates. It’s smart to speak with a variety of lenders and institution to get a sense of the different deals and then decide what is best for your financial situation. When you home is being used as collateral, it’s worthwhile to exercise more due diligence.

Once you’ve chosen a lender, be sure to ask about how the rate can change, especially if you are taking advantage of an introductory rate. In addition, inquire as to whether your rate will fluctuate with prime or if it is fixed.

Do you Have Enough Equity? 

Your equity in your home determines the loan or line of credit amount you can receive. It can also influence the interest rate.  The simple formula is comprised of approximately 75% of a home’s value (determined by an appraiser) minus the amount owed. Some lenders will go as high as 80%. Ultimately, this formula ensures that you don’t borrow more than the value of your home.

The less you owe towards a mortgage, the more you can borrow against the value of your home. You might want to wait until you have enough equity.

Spend the Money Wisely 

You want to use a HELOC for very specific reasons like education, medical or home renovations. For those with market savvy or business aspirations, using the money to invest or to start a business is common.

Whatever the money is used for, pay it back immediately. Like any loan or line of credit, this will limit the amount of interest you pay, and can help when applying for this product in the future.

A HELOC is a great way to fund certain aspects of your life or to increase cash flow. Putting more effort into your application and understanding the process will go a long way to making sure you enjoy the benefits of this financial product.

The GTA housing market has been interpreted many ways by experts and homeowners. Some see potential in the market while others are expecting a decline to occur before the market gradually gets stronger. Overall, a positive market view has surfaced leaving the fear of the bubble in the rearview mirror.

There is a sense of optimism, which began in late 2017 and could carry throughout the year. What is causing this optimism and is it founded?

iStock.com/LightFieldStudios

National Housing Market

Confidence in Canada’s housing market is gaining, fueling a renewed optimism for the GTA. Homes in Toronto and its surrounding areas, which are experiencing constant development and enhanced infrastructure, could increase in value. This does come with a shift to long-term thinking and less concern with short-term gains.

Supply vs. Demand 

Toronto is still experiencing a shortage of supply, which will drive the market. The optimism is due in part to demand leading to higher sale prices which will increase the average house cost.

There also doesn’t seem to be a lot of public backlash towards the new stress test. This could present a small speedbump but it shouldn’t curb the market. It is designed to protect lenders, which can help the market by vetting borrowers. This could improve the market without slowing it down.

Suburbia

Areas like Thornhill, Oakville, Richmond Hill and Aurora have been attractive to homeowners for a long time. Their continued investment in infrastructure, evidenced by the York University subway line, and fair pricing will drive more people to suburbia. This will sustain the peripheral markets if central Toronto experiences any dips.

A Healthy Economy

In the broadest sense, there’s no bigger reason for optimism than the economy. The economy is expected to grow 2% in 2018 and further growth is forecasted for 2019. Unexpected downturns can be expected and there are variables—the minimum wage increase, inflation and the growing tech sector—but the economy is headed in the right direction for now.

There are legitimate reasons to be optimistic about the GTA’s housing market in the near term. All Canadians are hoping that it proves to be true.

Renovations can be tiring, expensive and disruptive. Choosing what to renovate and knowing the ins and outs can not only streamline the process but add value to your home. To sellers, the kitchen is your biggest showstopper and strongest selling feature. Best of all, every dollar spent can equate to bigger offers down the road.

What do people renovating their kitchen need to know?

Is it for Living or Listing?

First, determine if your goal is resale value or to enhance the personal appeal of your living quarters. Unless you have already decided that your home will be listed, you should renovate based on your needs and desires. Your personal tastes should be placed at the forefront.

Consistency and Flow

If you are undertaking a kitchen renovation, remember that the rest of your home will remain the same. A Victorian-style home filled with antiques will make a modern kitchen feel detached. Renovate with your home in mind and create a consistent feel that flows from room to room. Your renovations shouldn’t render your kitchen some floating appendage.

Appliances

Instead of just opting for the latest and priciest, invest more in the appliances that you will use. If you won’t regularly use an anti-griddle or a heat lamp, then spend your money elsewhere.

A better dishwasher, a stove with extra burners and more counter space are useful parts of a kitchen to focus on, rather than a salamander or pizza oven

Functionality Trump Trends

Trends come and go. It’s far too easy to get caught up in one only to have regret when the trend shifts, as it inevitably will. A kitchen needs to be functional, logical and safe. Everything else can be placed in the “wish” pile. Of course, you can indulge here and there, but make choices to create a kitchen that you will still love five years in the future. Remember, kitchens should not be renovated every year. One renovation should have lasting power.

Renovating your kitchen is a great way to refresh a home and increase its overall value. Your tastes and needs are the perfect guide.