"Nicolle worked with my wife and I over a 3 plus year period to find the perfect home, and to sell our home. Despite the fact that we made her take us to over 50 homes over this time period she always kept a smile on her face and a very professional manner. She hand-held us through the complete process of purchasing a new home and selling our existing home, all of this despite many obstacles. The day of our closing we had an issue in our existing home's basement with a leak, Nicolle jumped into action, from making phone calls to even physically pitching in to dry up the water in our basement. She is a wealth of knowledge not only in the real-estate industry, but in home improvements, construction, community development, etc. despite the fact that we were a "little" client compared to many of her other clients, she treated us with the highest level of respect and customer service imaginable. Nicolle is my real-estate agent of choice and I would personally recommend her, and her expertise for any home and or business owner out there."
Most Islanders aspire to own their own PEI home. You probably do too if you are reading this, in fact if you are visiting PEI real estate websites such as this. You may find that you qualify easily for a mortgage but should that not be the case, here is some information about securing a mortgage and repairing your credit so that you qualify to make a PEI real estate purchase for your to perusal.
Get your Credit Report - Understand It - and Know Your Credit Score and its Significance in terms of qualifying to purchase PEI real estate.
Most people dont know what is on their credit report and the first time they get worried is if they are turned down on a credit application. Plan your financial health the same way you would your dental health. Get a checkup and that means get your credit report. Your credit report tells who you owe what money too. It tells if there are any outstanding claims against you as well. If you know the score you can have inaccuracies corrected before you attempt to purchase PEI real estate. This part of your credit report is free. Your Credit Score, which is a number between 300-900 is not. You will have to buy this part of your report (usually just over $20) from a credit reporting agency such as Equifax or Transunion. If your score is less than 600 you will have a harder job securing PEI home financing and the interest rate on your PEI real estate purchase if you do will be higher - so start repairing your credit. The possibility of being able to get into the PEI real estate market and purchase a PEI home depends very much on your credit. Your bank or financial institution will look very carefully at your credit history when deciding if you qualify to borrow on a PEI real estate investment.
Paying all your bills on-time will smooth the path to PEI real estate ownership! Lenders don't like lateness; so don't be late EVER!
Make sure that you have a convenient method such as online banking or bill paying at your ATM to ensure that you can easily pay your bills in a timely manner. If you have to be late be sure to talk to creditors prior to the incident and get their co-operation ensuring that they don't file a report with a credit agency. Credit reports filed for late payment will negatively affect your creditworthiness to borrow on a PEI real estate purchase and delay PEI home ownership.
Saving Money and building a Down Payment will increase the likelihood of investing in PEI real estate and buying your PEI home!
Lenders like to see that you have savings. It shows financial responsibility as well as financial capability. You have been able and had the foresight to put a portion of your monthly income away so that you can make a PEI real estate investment. You will need money in the bank for closing costs, down payment and as a contingency fund should anything unforeseen happen after purchasing your PEI home, whether repairs, loss of income, sickness etc.
Pay Your Current Rent on Time increases the chances of PEI home ownership.
Make sure that you pay your rent on time, as well as any utilities. Ensure that you have made timely rent payments for at least a year. If you are in a lease, although that is less common when discussing PEI real estate rentals, make sure that if you are going to break that lease that you pay any penalties that the lease imposes. Failure to pay these could result in a negative credit report in the same manner as any other default in payment and this will also impact in a negative way on your chances for PEI home ownership and making an investment in PEI real estate.
Reducing Your Credit Card Debt has a positive impact on the chances of making a PEI real estate purchase and PEI home ownership being in your future! With an average of $2000 in credit card debt per household, lenders are seeing increased credit card reliance as a warning sign. Try to pay off as much credit card and other consumer debt as you can. Additionally, do not borrow for a new car or any major purchase before applying for a mortgage as this will change your financial debt ratios and decrease your chances for a successful PEI real estate purchase. Make sure that other major purchases are done after your mortgage is in place and your purchase has closed. Be aware that lenders may not follow through on a pre-approval if your financial situation changes and this can destroy your chances to make a smart PEI real estate investment and enter the ranks of PEI home owners.
What to do if your Credit is not currently good enough to qualify to make that PEI real estate purchase.
If your credit score is substandard you may need to consider a 'bad credit' mortgage. These are mortgages carried by lenders willing to accept the higher risk that you represent in exchange for a higher return (interest rate) than a customer with a higher credit score would get. However you will still get better terms if you have a demonstrable long term work history (long time with same employer), a good income to debt ratio, and/or a substantial down payment. All the preceding factors can help a bad situation when buying PEI real estate.
You should choose your mortgage lender with some care and avoid lenders who charge a high fee for securing your mortgage that is added to the mortgage principal, if the lender insists that you pay for unnecessary or overly expensive insurance, or takes any action that would result in you having a higher than required loan. You do not want to add to the front end of your PEI real estate purchase.
If you are planning to re-finance your PEI real estate purchase soon as your credit becomes better you should consider the penalty for early payment and other re-mortgaging costs against the savings to be had at the lower interest rate. This should be considered when choosing a term for your mortgage as well.
While it is possible to purchase PEI real estate even with less than stellar credit or simply a lack of credit history (in the case of young people) there are certainly pitfalls to avoid when trying to enter the PEI real estate market with poorer credit. Don't hesitate to call on Nicolle to answer your PEI real estate questions. She may be able to offer you unique solutions to your financial situation and PEI real estate ownership.
Nicole Morrison and Century21 Northumberland Realty are pleased to be able to help you secure financing for your next PEI home purchase. Be sure to talk to Nicolle about financing through Centum Financial Services. With an office in-house, our mortgage advisor will be on the spot to give you help and advice regarding securing a mortgage on your PEI real estate purchase as well as great rates and service. Try the Centum Financial calculators below to determine your current financial strength.
Contact Nicolle today for more information on mortgage brokerage services and for other tips and help with PEI home buying!
Here in Prince Edward Island we tend to think of PEI real estate and a PEI home purchase as being the best of investments and we conversely tend to think of renting as throwing our money away. It is certainly true that rent, once paid, is gone and other than a place to live for a month, brings no other benefit. On the other hand investing in our PEI real estate market and buying a PEI home increases your net worth by increasing equity, or the portion of the value of the PEI real estate that you could lay claim to, if you sold your PEI home.
Generally it is thought that the amount that you pay in rent is a key factor to determining, when compared with the cost of purchasing, the value of investing in the PEI real estate market and buying a PEI home versus renting. A factor of 0.6% is considered the break-even point in determining the value of owning PEI real estate and being on the hook for a monthly mortgage payment. If you can rent a PEI home for less than 0.6% per month of the purchase price of a similar PEI home then it will be cheaper to rent. In regards to PEI real estate that means that since the lowest priced PEI homes in Summerside's west end would cost $70,000, that if you can rent a similar PEI home for $420 per month then there would be little or no difference between renting and buying a PEI home in Summerside and PEI real estate market. It is unlikely that you would rent this type of PEI home for such a low amount. Therefore we see that PEI real estate investment provides quite a good return to its landlords and as such an investment in PEI real estate is one that will create a good return on investment for you as well.
This is true with a few caveats. Here is a list of considerations to determine if PEI real estate ownership is right for you and if you should be looking to buy a new PEI home:
1. Are you likely to stay in this PEI home and/or own this PEI real estate for at least 5 years. There are costs associated with buying and selling PEI real estate that should be considered. If you are moving oftener than once in 5 years then any investment gains in the PEI real estate market will be eaten up in costs. Of course there are markets that outperform these costs but that type of investment is highly speculative and not common when discussing PEI real estate.
2. Is your current employment stable? Every month you will have a mortgage payment to make on yourPEI real estate purchase as well as utilities. There are consequences to not being able to make these payments, however are they any more dire than not being able to pay your rent. People get caught up in a fear of losing their PEI real estate investment caused by 'mortgage default' and foreclosure. You should remember that we all have to find payments for shelter every month if we expect to keep a roof over our heads and this applies to both mortgage and rent. You should not let fear overtake common sense when considering entering the PEI real estate market and buying your PEI home.
3. Will I qualify for a mortgage and be able to make an investment in PEI real estate? Generally you are expected to pay no more than 32% of your gross income in housing costs and as such you will have no more than this amount to make your PEI real estate purchase. In addition it is expected that no more than 40% of your gross income will be used for debt service which includes mortgage on your PEI home, car payments, credit cards and any other consumer loans that you may have. If you are out of line with these percentages then you will have trouble securing a mortgage to purchase your PEI real estate through conventional means (banks).
Helping families build better lives is what Real Estate is all about!
As alluded to above, as an investment, PEI home ownership works best if you can stay in a home for 5 years or more and/or hold your PEI real estate investment for that time. Generally, the longer you own your PEI real estate investment the better, as you have had a chance to develop equity. When you first start making mortgage payments you are paying predominately interest on your PEI home purchase. However, as you continue to pay each month this begins to shift and you pay more and more principle. This adds equity to your PEI real estate investment and your general economic prosperity, equity being the amount of money that you could recover after mortgage repayment if you sold your PEI real estate investment today. Of course if you are renting, your rent will increase at the rate of inflation and you will have developed no equity in the PEI property. This means that PEI home ownership is an investment in something you need anyway 'a roof and shelter' while renting is simple a cost necessitated by the same need.
We have talked about buying vs. renting a PEI home from a strictly financial point of view. There are other emotional and practical issues as well. By purchasing our PEI home and investing in our future through PEI real estate we remove ourselves from any capricious behaviour on the part of landlords. While there are protections for tenants built into most provincial Residential Tenancy Acts, ultimately, the landlord owns where you live and can have you removed. Additionally before making ANY changes, improvements or using a PEI property for any additional purposes you MUST get approval from the landlord. Although municipalities and cities do have bylaws governing use of any PEI real estate this is by no means as stringent as the rights a landlord has to impose either changes of his making or preventing you from making changes that would be desirable to you. So if you want to control your own environment, have a measure of control over your PEI home, make money and have the pride of ownership while you do it, then buying PEI real estate may be right for you!
Contact Nicole Morrison today for more information on mortgage services and how she can help you buy your own PEI property!
A PEI real estate manager takes the landlord's place in the daily responsibilities of running a rental PEI property. These include maintaining the building and grounds including handling repair issues with regard to tenant's space as well as common space, the cleaning of the PEI property, and the implementation of any improvements to their PEI real estate investment that the owner may wish to make.
In addition, a PEI real estate manager may look after the financial side of PEI property rental for the owner. This includes renting the your PEI property, including doing a financial check on prospective tenants, as well as paying expenses for trades and workers providing services to rental PEI real estate properties, real property taxes, insurance etc. In a situation where a PEI real estate manager is handling all aspects of operating the PEI real estate property, the owner is simply providing the capital necessary to own the PEI property and has nothing to do with day-to-day operations unless there is a major problem associated with a PEI property that the PEI real estate manager may not directly handle, such as a legal issue.
Different jurisdictions have differing legal requirements to work as a property manager. Many provinces accept a real estate agent's license as sufficient to function as a property manager while others have separate certifications. PEI real estate managers are not required to be certified in any way.
That is why it is important to have someone experienced working for you as your PEI real estate manager. Nicolle Morrison of Century21 has 22 years experience in PEI real estate and is a landlord herself. She has the contacts and the savvy to know who should, and should not, rent your PEI property and she knows how to 'vet' potential clients to ensure that you rent only to well qualified tenants.
If you are looking for a rental property she can (while wearing her PEI realtor hat) put her experience to work, as she has for herself, finding you a PEI property that will be a good PEI real estate investment and then she can just as easily (putting on her PEI real estate manager hat) turn that potential into reality.
Ultimately, the PEI real estate manager acts as the liaison between the owners and the tenants of a PEI property. As such, their responsibilities are as great, if not greater, than that of an owner. Tenants generally expect all of the same things from a PEI real estate manager that they would from an owner, and owners expect a great deal from their PEI real estate manager as well. You can rely on Nicolle Morrison to ensure that all expectations are met!
Contact Nicolle Morrison of Century21 today for more information on PEI real estate management.
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