Most of the time; Owners or Tenants of Condo Unit think that Condo Corporation has Building Insurance and they do not need to buy additional insurance. 

In Realty, Condo Building Insurance does not cover the interior of any unit. It only covers: 

- Buildings and Structure on Condominium plan and declaration

- Common elements such as Lobby, Elevators, Gardens, Swimming Pool and other amenities.

- Fixtures in the building, Lobby furniture

- Condominium liability for claims of property damage and bodily injury suffered by others. 

It does not cover:

- Owner’s personal clothing, appliances, furniture and items in your locker

- Additional living expenses in case owners are forced to leave the unit in case of fire, water damage from another units of flooding of the unit

- Owner’s personal liability for bodily injury or property damage unintentionally caused to others

To protect the interior of the unit or unexpected issues in the unit, owners can buy Optional Coverage that protects:

- Improvements in the unit done by you or the previous owner

- If Condominium insurance coverage is insufficient; contingency coverage will cover your unit

- If the Liability Loss of common elements exceeds corporation's policy limits; Optional coverage will cover owner's share for liability loss

- Owners can buy extra contents insurance for personal belongings 

- Deductible insurance coverage

Tenanted Units:

Owners should buy Landlord or Owner Insurance

Owners should get Tenants to buy Tenant Liability Insurance Coverage and ask them to renew every year

Tenant insurance covers Tenant’s belongings and living expenses in case they need to move to another location due to fire, flood or other issues in the rented unit.

Landlords and Tenants should make sure that Tenants have enough Liability and Contents Insurance Coverage.

Being a realtor, I always advise my clients to call their insurance brokers and ensure that they have enough coverage to protect against any unforeseen losses. More information can be found on Insurance Bureau of Canada's Website.

Buyers usually ask me the following questions about buying a resale home or condo?

Downpayment Amount: 

If you are a 1st time home buyer, you will need:

Home Price: $500,000 – Need Downpayment of $25,000

Home Price: $700,000 - Need Downpayment of $45,000

If you already have a home but want to buy an investment property, then you need:

Home Price: $500,000 – Need Downpayment of $100,000

Home Price: $700,000 – Need Downpayment of $140,000

Closing Costs:

Land Transfer Taxes:

Vary depending upon where property is located

First Time Buyers get a Rebate

Lawyer Fees

Mortgage Broker Fees

Moving Expenses

Insurance Costs

Appraisal Costs

Condo fees (If it is a condo)

Purchasing a property is probably the most significant investment you're about to make. And it's quite normal that your emotions come into play with such a huge and personal purchase. Especially for first-time buyers, buying a new place can seem overly complicated and even confusing.

Instead of only focusing on finding your dream home or being a home improvement expert, you should be as rational as you can with your decision, no matter how personal this purchase is. Knowing what problems to expect, you can avoid expensive errors and feel more confident while shopping.

Here are the 5 most costly mistakes buyers keep repeating (but you don't have to):

#1 Skipping Mortgage Pre-Approval

Pre-approval is necessary before placing an offer on a home or even before you go house-hunting. It doesn't only give you an overview of what budget to plan for. Most sellers won't accept offers nowadays without a pre-approval letter. Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, such as finance a car purchase.

#2 Not Getting a Home Inspection

A home inspection is an essential part of the home-buying process. It can uncover hidden problems or defects that may not be apparent during a walkthrough. Skipping a home inspection to save money or speed up the buying process can cost you much more in the long run. A professional inspector can identify issues with the property's structure, plumbing, electrical, and HVAC systems that could lead to costly repairs or replacements.

#3 A Fixer-Upper Is Not Always a Good Idea

Yes, a fixer-upper sounds like a good idea until you actually have to start fixing it. If you are on a strict budget, look for homes the potential of which has yet to be realized. The upgrades you make will increase the value of your home and thus give you a bigger budget for your next purchase. However, be careful not to overestimate the type and amount of work you can do by yourself. Also, consult your real estate agent to learn what upgrade will add the most value to your home.

#4 Overbidding for Fear of Losing Out

Jumping in too fast or waiting too long to put in an offer are both risky in terms of cost and what kind of property you might end up with. To make sure you are not overbidding or repeatedly writing offers with no success, hire an experienced real estate agent. An experienced agent knows how much above or below the asking price properties in an area are sold and can help you devise an effective offer strategy.

#5 Not Shopping Around Enough

Many buyers think they're best off taking a mortgage with the lender they currently bank at. But this may not be the case. You can use a mortgage broker to learn about the different options you have at your disposal. Always make sure to have a breakdown of the total costs of each mortgage option on the table, including penalties for breaking the mortgage early.

How to Avoid a Money Pit: Be on the Lookout for these 6 Warning Signs That Could Mean Expensive Repairs...

Many people think that serious defects in a home are easy to spot, but the truth is, often the most serious and costly problems can only be detected upon very close inspection. When you are considering buying a home, look for the following six telltale signs of serious problems...

1. Roof

Leaks are the most common problem with roofs, and are tough to detect from outside. However, from inside an attic, you can often see water marks where there is a leak.

2. Plumbing System

Make sure you are confident that both water systems: the one that brings fresh water in and the one that takes sewage out are functioning well before signing on the dotted line.

3. Electrical Systems

Before you agree to buy you should make sure that you can run all of the appliances you want to and even power tools at the same time without having a power failure. You also want to make sure that the electrical system is safe and does not present a fire hazard.

4. Heating and Cooling Systems

Be sure to thoroughly inspect the heating and air conditioning systems in any home you are considering purchasing.

5. Bad Paint and Signs of Rotting

The paint inside and outside the house can reveal a lot about the condition of the underlying material. Check several places on several walls, using your eyes and a screwdriver for poking.

6. Cracks and other important signs

Cracks in walls, doors not closing properly and uneven floors can all be signs that there is a problem with the foundation. If the foundation is not strong, the entire house could literally collapse, so you should carefully check for these signs. A bad foundation may not mean imminent disaster, but it could be used to bargain for a lower sale price, or you could ask to have the owner repair it before the sale.

How to Save Thousands of Dollars in Interest and Pay Your Mortgage off Faster

There are a few easy ways to make extra principal payments that can save you a ton of money in interest expenses and get you mortgage-free sooner than you thought possible. Here are a few simple strategies you can use:

1. Round your monthly payment up

The results of this simple strategy can save you a fortune and drastically reduce the length of your mortgage.

As an example, if your monthly mortgage payments were $734 dollars a month, but you rounded it up to $800 per month, you would save more than $48,000 in interest payments, and reduce the length of your mortgage by 7.5 years!

2. Make One Time Pre-Payments Using Your Income Tax Refund

This is an easy way to save money and shorten your mortgage. For example, if you have a $100,000 mortgage, and you have a $1000 tax refund this year, you take apply that refund to your mortgage. Over time, this will save you more than $8600 and shave 1 year and 1 month off your mortgage! That's another amazing result from a simple strategy.

3. Choose a 15 Year Mortgage

If you can afford it, you are far better off getting a 15 year mortgage instead of 30. It won't cost you much more, and the interest savings are truly incredible.

If you have a mortgage of $100,000 at 8% interest over 15 years, your monthly payment would be about $200 more, but you'd end up saving $92,083 in interest over the life of your mortgage!

Using these strategies is the easiest way to reduce your interest expenses and shorten your mortgage period.

How Your Credit Score Affects You

Your credit score is critical to your financial health, as it rates your creditworthiness. Essentially, your credit score determines how much money you can borrow, what interest rate and how much in fees you'll have to pay. Your credit score is based on your credit report, which includes information about your credit history - your payment history, how much debt you owe, how long you've had credit, the types of credit you have, and how often you apply for credit.

In Canada and the US, most lenders use the FICO credit score system, which ranges from 300 to 900. The higher your credit score, the more likely you will be approved for a mortgage and the better the terms you'll receive.

For example, if you have a credit score of 750 or higher, you can get a mortgage with a low interest rate and a small down payment. A lower interest rate means lower monthly payments, which can save you thousands of dollars over the life of your mortgage.

On the other hand, if your credit score is below 600, you may have difficulty getting approved for a mortgage and may be required to make a larger down payment or pay a higher interest rate. A higher interest rate means higher monthly payments, which can make it harder to afford your mortgage payment and other expenses.

Significant Factors Impacting Your Credit Score

Here are the most important factors affecting your credit score:

#1 Defaulting on a Loan Defaulting on a loan has the most severe negative impact on your credit score. It means you have failed to repay the loan as agreed, and it can stay on your credit report for up to seven years. A default can significantly reduce your credit score and make it challenging to get approved for credit in the future.

#2 Late Payments

Payment history is the most significant factor determining your credit score. Late and missed payments significantly reduce your credit score. The longer you delay your payments, the more it negatively affects your score. Even one late payment can have a considerable impact on your credit score.

#3 Credit Utilization

Credit utilization is the ratio of outstanding credit card balances to credit limits. A high credit utilization ratio indicates that you are using a significant amount of your available credit, which may suggest that you are overextended and need help to make payments. Keeping your credit utilization ratio below 30% is ideal for maintaining a good credit score.

#4 Credit Applications

When you apply for credit, the lender performs a hard inquiry on your credit report. Too many hard inquiries in a short period can lower your credit score as it suggests you are actively seeking credit and may be at a higher risk of defaulting on your payments.

#5 Credit Accounts

Closing credit accounts also negatively impacts your credit score, especially if you have a long credit history. Creditors prefer to see that you have a lengthy credit history and can manage multiple credit accounts effectively. Closing an account will reduce the average age of your credit accounts, which can harm your credit score.

Maintaining a Healthy Credit Score

Here are some tips to keep your credit score healthy:

• Pay your bills on time every month
• Keep your credit card balances below 30% of your credit limit.
• Don't apply for too much credit. Only apply for credit when you need it.
• Apply for credit products with lower interest rates you will likely be approved for (e.g. personal loans)
• Check your credit report regularly. Errors on your credit report can hurt your score, so you must check your report regularly and dispute any errors you find.
• Build a long credit history. The longer you've had credit, the better it looks to lenders. If you're new to credit, consider getting a secured credit card. With a secured card, you'll need to make a deposit upfront, which is collateral for your credit limit. Making regular payments on a secured card can help build your credit history and improve your score.

Building Up Your Credit Score

Improving your credit score takes time and effort, but because it results in getting the best terms on your mortgage, it is worth it. Here's how you can improve your credit score:

#1 Get a copy of your credit report

The first step to rebuilding your credit score is to get a copy of your credit report. You can request a free copy of your credit report from Equifax or TransUnion in Canada. Review your credit report carefully to identify any errors or inaccuracies that may negatively impact your score. If you find any errors, dispute them with the credit bureau.

#2 Pay down your debts

While having debt - if you are paying it off on time - helps you build your credit score, the amount of debt you have limits the amount you can borrow. If you have high credit card balances or other debts, work on paying them down as quickly as possible. If you're using a significant amount of your available credit, this may suggest that you are overextended and may struggle to make payments. The less debt you have, the better your credit utilization ratio will be, which can help improve your credit score.

#3 Start budgeting to pay your bills on time

Start paying your bills on time with no exceptions. Make this the #1 priority each month. Creating a monthly budget helps you take care of your financial health. You can use a budgeting app or a Google or Excel sheet to plan your expenses.

#4 Seek professional help

If you are struggling to rebuild your credit score, consider seeking professional help from a credit counselor or financial advisor. They can help you develop a plan to improve your credit score, manage your debts, and create a budget.

 
Here Is A Simple Formula If You Want To Calculate How Much Mortgage You Can Carry:
 
Assume Your:
 
Gross Family Income = $100,000 a Year
Car Loan, Line Of Credit etc. = $0 a year
Property Taxes For a Property You Want to Buy = $6,000 a Year
 
You Can Have = $100,000 * 30%  = $30,000 - $6,000 = $24,000 Per Year For Mortgage Payments or $2,000 per Month in Mortgage Can Be Paid
 
Most of the People are Paying Rents as Follows:
 
3 Bed, 2 Bath Townhouse in Mississauga = $2,100 - $2,300 + Utilities  
1 Bedroom 500- 600 Sq. Ft. Condo in Square 1 Area = $1,900-$2,000 + Hydro  
2 Bedroom 2 Bath Condo in Downtown Area = $2,800 - $3100 + Hydro  
4 Bed, 3 Bath Home in Brampton Area = $2,400 - $2,600 + Utilities  
 
If You Compare Mortgage With Rent; You Can Easily See Which One is Better.
 
Mortgage Amount Will Decrease Over Time, Increase The Value of Your Property & Generates Equity
Rent Will Increase Over Time, You Do Not Get Any Money From Landlord, Basically No Savings and When You Think Of  Buying a House --- Prices Will Be Way Higher and Hard To Afford
 
Please Call Me to Buy Rather Than Rent A Home!!!

&

Make A Better Move!!!

Recently I was reading an article where a Landlord got charged for not Following up on FIRE CODE. He RENTED OUT ROOMS TO Different Tenants but did not Comply with Fire Code meaning that:

 - The Smoke Detectors on the Rented Property Were not Working and Fire Caused Death of a Tenant. 

For those who own a Rental Property whether it is a Condo or a House; please make sure the following measures have been taken:

- Working Smoke Detectors on Each Floor
- Cabon Monoxide Detectors
- Accessible Fire Route
- INFORM your Insurance Company that you are Renting out the Basement, Condo or Each Room to Different Individuals.
- When a New Tenant moves in make sure that Smoke and Carbon Monoxide detectors are checked.
- Ask tenants to have personal and contents insurance coverage before they move in.
- If you do Business from the basement; notify your insurance company.
- When you move into a new home; make sure you install new Smoke Detectors and have New Carbon Monoxide Detector.
- Even though it is landlord's responsibility. However, Tenants can also check out Fire Safety equipment since they going to live there for extra security and Report any issues to their Landlord.

Insurance company must be notified in any of these cases. They do not worry whether it is legal or illegal basement but they should know that someone is living in the basement.


A lot of Homeowners buy properties to rent out either Rooms or Basement.

IF you are also renting out your property or living in a rented home or basement; make sure everything for Fire Prevention and Fire Detection is in Proper order.

Documents needed to apply for a mortgage.

Are you buying a home for the first time, refinancing your current home, or buying another property as an investment?

Lending institutes have stringent procedures for qualifying when someone applies for a mortgage, line of credit, or refinancing. 

You should always have the following documents ready:

1. Latest Employment letter 

2. Latest 2-3 pay stubs

3. T4 slips from your work for the last 2 to 3 years.

4. T1 Generals from your accountant for the last 2 to 3 years 

5. Notice of Assessment from Revenue Canada for at least the last 2 years. Please note: if you owe any money to Revenue Canada, settle the payment. 

6. RRSP contribution statements if you are a first-time buyer

7. Your FHSA Statement if you are a first-time buyer

8. Bank Statements from each bank you have accounts with.  

9. If you own any rental properties, make sure you have the Property Tax Bills that show the Assessment Value of the Property and lease Documents.

10. Copy of Child tax benefits if you are getting any of these benefits

Having these documents ready will help a lending institution provide you with an answer faster, thus reducing your stress.

It's totally normal for first time buyers to want to know what the difference is between a freehold and a condominium.

Home is any place that you want to buy and fits within your budget.

You can buy a Freehold Home where owners maintain the inside and outside of the home such as driveway, lawn, windows, roof....etc. Freehold homeowners can control their expenses for utilities and pay their own share.

In a condo; owners own part of the space in the big building and will maintain most of inside the unit but Condo Corporation takes care of the outside of the building, such as parking, locker areas, roof, lawns. Owners contribute towards these common expenses and also may contribute to utilities. Owners do not have control over utilities use by other residences so they may end up paying more.

In some condos, owners pay their own utilities but have to pay for the exterior maintenance.

Freehold homes are usually expansive than Condos or condo townhomes.

It also depends upon location where you want to buy. Since land is getting more expansive and if you are planning to buy a home for upto $400,000. You may find a freehold home in suburban areas only. But in cities like Toronto's downtown areas, you may be able to afford a condo apartment.

Based on your needs and location, you really need to make a decision.

IF you are thinking of buying a home.... my suggestion is to buy a home within your budget and see how you can build equity in it. Any home you live in will be good towards your savings.

For any further questions or to buy a home, condo any where in GTA....
Please call me at 416-996-5834.


Harbinder Panesar, Sales Representative
Loyalty Real Estate Brokerage