CMHC Mortgage Loan Insurance
An insurance that covers a lender’s risk which is linked with financial loss (normally occurring when the person is unable to pay mortgage loan) is known as the CMHC’s Mortgage Loan Insurance. CMHC stands for Canadian Mortgage and Housing Corporation. Such non payment of loans increases the demand of this insurance under the best interest rate. The amount of the premium paid under this insurance can vary between 0.65% and 2.74% depending upon the proportion of the buy price or the home value is invested with the mortgage loan. With the help of CMHC Mortgage Loan Insurance, one can be the owner of the property by paying a down payment which can be as low as 5% of the purchase price. It is a good idea to make a down payment of five percent as a minimum of the residence price, but it also depends on the property price -
• For a solo family and two unit residence - minimum five percent down payment is required.
• For up to a four unit residence - minimum of ten percent down payment is essential.
But it should be remembered that only Canadian citizens can apply for CMHC Mortgage Loan Insurance.
CMHC Mortgage Loan Insurance has many advantages –
1. It can be applied to various kinds of housing.
2. It is available everywhere in Canada.
3. It has several flexible products and options to help the buyer in going for the best investment.
In a normal case, the buyer pays the minimum down payment. Sometimes, first time homebuyers receive gifts from the relatives for the down payment. Any promotions offered by the lender and money borrowed from friends and family is acceptable as additional sources of down payment for the borrowers through CMHC’s Flex Down product.
Before applying for CMHC, a person should keep following points in mind -
• The qualifying criteria
• Is the lender approved by CMHC?
• The total housing cost including Principal amount, Interest accrued, property tax and heating costs (P.I.T.H.) should not be more than thirty two percent of the gross household income.
• The total debt should be less than forty percent of the gross income. To get the Total Debt Service (TDS) ratio add up the P.I.T.H. and payments on all other debt / gross annual household income and 50% of condominium fees (if applicable).
• Take the closing cost (like the lawyer fees, adjustments, land transfer tax if applicable, PST and GST as applicable etc.) into account. This is usually two to four percent of the purchase price.
• There are certain details which may vary from case to case and one needs to get in touch with the lender to know about them.
The premium of the CMHC Mortgage Loan Insurance is based on the amount of the down payment made and is proportional to the cost of the house or the value that one borrows. The higher the value of the house the higher will be the insurance premiums. This insurance is paid by the lender, who later passes on the charges to the actual buyer.
So, in order to pay less interest rates and avoiding the administrative charges, one should go for the mortgage insurance.
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Ben Hirsh is a Realtor in Buckhead GA and an expert on that market. He also enjoys the study of other markets. His unique website features a Buckhead GA MLS search and an informative report on Buckhead GA real estate .
Developing A Successful Real Estate Referral Marketing Strategy
Referral marking is one of the best ways to let others know about your real estate services. Perhaps the best thing about referral marketing is that you don’t have to pay any money it. There is not much work involved with referral marketing and even the majority of that work is done by clients.
People naturally want to spread the word when they have received a good service. This word of mouth is known as referral marketing. When your clients have a positive experience with you, they naturally want to tell others about it. The more people who are informed about your excellent services, the more clients you will have. The more clients you have the more money you will make. What’s good about referral marketing is that you get money for making money.
The large part of your real estate business’s referral marketing strategy will come from the way you operate your business. The other part is developing an awareness of your referral marketing tactics. Your clients have to know that you want them to refer you to others. Otherwise, you can’t rely on them to do so. If you have already been informing your clients that you would like them to refer you to others, then you can relax, this part of your work has been completed. On the other hand, if you made the assumption that your clients will naturally refer others to your business then you have some work to do.
Assuming you haven’t informed any clients of your referral marketing strategy, you now need to determine that this will be a part of your business practices. Each customer that you deal with from now on should know, in some form or another, that you would like for him to refer you to another client. You might consider offering some kind of discount for each referral. Many real estate businesses offer such incentives.
Apart of creating awareness of your referral marketing strategy, you need to resolve to always operate in a manner that will give clients a reason to refer others to you. If a client does not have a positive experience with you, chances are that the client will tell someone of his bad experience. This will counter your referral marketing efforts. All it takes is ‘one bad apple’. Be aware of your actions at all times.
If there are several facets to your business make sure that each client knows of these services as well. There may be times when a client only receives one of the services that you provide. This same client might know someone who is in need of another service that you provide but does know to refer the person to you. When this happens, your referral marketing has failed. Your referral marketing strategy must include informing clients of all the services you provide. By doing this you are ensuring that referral marketing works best for you.
Developing a referral marketing strategy is not difficult to do. The two major aspects of referral marketing include letting clients know to refer you to others and giving them a reason to refer you. Once you have done both of these things, your referral marketing efforts will begin to bring in new clients for your services.
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Ben Hirsh is the owner of the Ben Hirsh Real Estate Group and an expert on Atlanta GA real estate . His unique website features a helpful sellers page where he explains what he can do as your Atlanta GA listing agent to sell your home. The site also features a Atlanta GA MLS search, Search where home sellers can study other homes on the market.
Smart Real Estate Investors Reap Hefty Profits Despite Cooling Trends
"There's talk about the real estate bubble bursting," says Neb Essayas, "but what's happening is that sellers aren't making windfall profits anymore. The housing market has been so hot over the past five years that so-called investors could afford to pay market value, watch the property appreciate, and sell at a profit."
Because Essayas, the founder of Premier Real Estate Solutions, LLC (www.ReadEstateMadeEasy.net), uses a different strategy, he isn't even breaking a sweat - despite the slowing pace of home re-sales, which were down 2.8 percent in January, and the 5 percent drop in new home sales. In fact, Essayas says that the market slowdown in major cities represents "the most exciting time for our business.
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Utilizing private lenders, Premier Real Estate Solutions buys properties in northern Virginia, central Maryland, and the District of Columbia at 25 to 50 percent below market value. The company then renovates the homes and re-sells them at market value.
Premier Real Estate Solutions makes its profit going into the deal - through buying the right properties at the right prices. "As a rule of thumb, we do all of our numbers right and build in our profit margin before purchasing the property," says Essayas. "We only buy two types of properties: those where we can quickly create equity through renovations and those where we buy equity from motivated sellers who need a quick sale."
Now that the real estate market isn't so forgiving, Essayas says that buying the right properties at the right prices is key. "The numbers have to be right, not only to ensure that our company makes a profit, but to secure our private investors' loans."
Those numbers are providing hot returns on investments, regardless of the price range of the home. For example, Premier Real Estate Solutions purchased a home for $405,000, spent $1,000 in upgrades, and sold the home for $599,000. Similarly, Essayas put $32,000 of renovations into a home purchased for $229,000 and sold it for $390,000. "Recently, within a three and a half week period, we bought a home for $77,000, spent $12,000 fixing it up, and found a buyer willing to pay $170,000," he says.
Using private investments to purchase and renovate homes gives Premier Real Estate an advantage over developers using institutional lenders, in that the company can move nimbly when it finds a bargain. "The private capital we've been using has allowed us to close on these properties in as little as three days," says Essayas.
As for investors, they appreciate being able to earn a better return through Premier Real Estate than they can with traditional investments. According to Harry Roupas, who has made significant investments in Premier Real Estate Solutions properties over the past three years, "The excellent returns I have seen on my investments demonstrates to me that Premier's business model is sound. Buying properties below market value, renovating them, and selling them at a profit is the right approach for today's real estate market, but you need a Premier Real Estate to make it all work just right."
And Premier Real Estate is hard at work, planning to purchase between 50 and 60 properties in the Washington, D.C. Metro area this year, and looking to a future in larger development projects, such as condominiums and hotels.
While Essayas anticipates that the market's cooling trend will result in a longer turnaround time for sales, he emphasizes that "we factor higher carrying costs into our equation before making an offer to purchase a property."
He concludes, "Because we never pay market value for a property to begin with, we can continue to take advantage of the current real estate market to secure properties at prices well below market level, renovate them, and sell them at a profit."
