5 Benefits on How to Protect Your Mortgage With Life Insurance

For potential homebuyers and current homeowners, a home is a costly investment with a long-term commitment. That's why every homeowner carrying a mortgage needs to get life insurance. Life insurance that covers a mortgage is called mortgage life insurance or mortgage protection insurance. This kind of insurance is designed to protect the lender, just in case they are unable to pay for their monthly mortgage fees. In this article, let's highlight five benefits on how to protect your mortgage with life insurance.

1. May protect homeowners due to sudden unemployment

With Canada's unemployment rate fluctuating every year, sometimes homeowners might face unexpected job loss due to termination or disability. The benefit of having mortgage life insurance alleviates the stress and financial burden related to unemployment by covering the period when the homeowner is out of work. At Northwood Mortgage, we offer a series of mortgage life insurance options that target the specific time frame if a homeowner loses their job, falls ill, or becomes physically disabled, causing unemployment.

2. May protect homeowners due to unexpected death

If the homeowner dies, the mortgage life insurance will cover the remaining amount left on the mortgage. Along with unemployment, death in the family can cause financial strain, especially when the homeowner passes away. Mortgage life insurance is a great benefit because homeowners are assured that after death, the mortgage will not become their family's responsibility.

3. Mortgage life insurance frees up your budget

When it comes to having mortgage life insurance, homeowners can free up their budget by the funds they get from other insurance policies. For example, the funds received from a personal life insurance or employer benefits could be used for payments on other financial obligations such as car payments, other bills, and university tuition. What would usually go towards the mortgage can be spent wisely on other expenses because the homeowner has mortgage life insurance.

4. Mortgage life insurance is convenient

Another benefit that mortgage life insurance offers is convenience. By covering unemployment, death, and other bills, it is an added layer of security in case unexpected circumstances should occur. With all its benefits, it is also easy to qualify. To purchase a mortgage life insurance policy, homeowners do not require to submit to a life insurance medical exam. This is a very convenient benefit to have for sickly individuals. In case the homeowner is denied life insurance due to medical illness, the homeowner with mortgage life insurance is financially protected.

5.Mortgage life insurance accommodates new homebuyers

For potential first-time homebuyers who can only afford a small down payment, getting mortgage life insurance can secure the home of their dreams. They can use mortgage life insurance through the Canada Mortgage Housing Corporation, which requires a 5% downpayment.

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As you can see, choosing a mortgage insurance policy should be decided carefully. However, investing in mortgage insurance can safeguard you and your family's future in the long run.

At Northwood Mortgage, we have an expert staff of mortgage agents specializing in life insurance and mortgages in Toronto, Brampton, Mississauga, and the GTA. We take the time to listen to your needs, and we cater our services to each client.

If you would like more information on mortgage insurance coverage and protection in Toronto and the GTA, we invite you to book a FREE consultation with one of our Northwood Mortgage agents by calling 416-969-8130 ext. 111, toll-free at 888-492-3690, or contact us here. Once we receive your request, one of our mortgage agents will contact you within 24-48 hours to arrange an appointment.

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US New Home Sales Drop 12.8% in July

Sales of new U.S. homes fell a steep 12.8% in July, but the drop came after revisions to June sales showed the sales highest growth in 12 years.

The Commerce Department said Friday that new homes sold at a seasonally adjusted annual rate of 635,000 units. That’s down from a sharply revised upward rate of 728,000 in June. So far this year, sales have risen 4.1%, a sign that buyers are beginning to respond to lower mortgage rates.

The volatility in home sales reflects broader uncertainty in the housing market. Buyers have been eager to take advantage of wage growth and historically-low mortgage rates. The average rate on a 30-year loan declined to 3.55% this week, according to mortgage buyer Freddie Mac. The revisions to the June figure, coupled with a rebound in existing home sales in July according to data released by the National Association of Realtors, show sales reacting largely well to lower borrowing costs.

However, the rush has further constrained inventories at a time when new construction is limited. Robert Frick, a corporate economist at Navy Federal Credit Union, said that while the revised June figures were a positive sign for the market, low inventory remained the core problem dragging home sales growth.

“The average sales price for a new home was $388,000, and half of the home buyers are looking for a sub $300,000 home. Until more, less expensive homes and condos come to market, millions of Americans will be shut out of homeownership,” Frick said.

A big 50% jump in sales in the Northeast was offset by declines in the West, Midwest, and South this month.

The median sales price fell to $312,800. That is down 4.5% from a year ago but marks the highest level since April.

source: usa.inquirer.net

New ‘co-living’ housing option spreads its wings in New York

Nandita Iyer landed in New York, United States from Bombay, India without knowing anyone, but she did not want to live alone in a “sketchy studio.” So instead she opted for a room in a “co-living” unit.

She lives with roommates in one of the 14 apartments in a small building run by the housing start-up Quarters in the trendy Lower East Side neighborhood.


The best part of the arrangement she said, are the common areas, a large kitchen with a big table and comfy couches, a terrace where she can work and a luxurious rooftop patio.

“I met people from such different backgrounds. And I became very good friends with them,” she said.

And she even found mentors to help with her job search.

Group living arrangements are not new. Many people have lived with roommates, in student dormitories or retirement homes.


But with housing costs skyrocketing in major cities and amid changing lifestyles, start-up companies are offering to take care of everything for renters, including the social life of their residents.

Demand for these new group housing arrangements is on the rise, especially among young people aged 18 to 35, the millennials, so more and more projects are appearing on the rental landscape.

Real estate brokers Cushman & Wakefield estimated in May that the major U.S. co-living start-ups had about 3,200 rooms available with 16,700 in the pipeline. The new players include Quarters, Common, Ollie, Starcity, X Social Communities, The Collective and WeLive.

Quarters manages three residences in New York and Chicago and is preparing to grow quickly. Its German-based parent company, Medici Living, just raised $300 million to expand in the U.S. market, in addition to one billion euros to develop in Europe.

Social network

“We provide an easy solution for people looking to move into big cities,” said Gil Hirak, head of U.S. operations for Quarters.

From the virtual tour to the signing of the lease, everything can be done online. Then “you just move in with a suitcase,” since units are furnished.

The companies also reduce many traditional sources of friction between roommates by taking care of all the practical details: basic products such as toilet paper, cleaning, Internet or electricity bills.

“During the week, we are so busy. Housekeeping is really helpful,” said resident Eric Tauro, a 29-year-old architect.

After finishing his studies he was “researching what would be the easiest way” to move to New York.

He set his sights on Ollie’s third project in a large new building in fast-growing Long Island City. The start-up occupies a third of floors in the complex, with 422 beds available in 169 apartments.

Amenities are more sophisticated than at Quarters, residents have access to a gym, golf simulator and top floor with open views of Manhattan, Brooklyn and Queens.

Like many co-living providers, Ollie’s boasts that it organizes social events several times a week, like museum visits or cooking classes. It also allows residents to communicate with each other on a dedicated application.

“Millennials do not like to own a lot of things,” said Alex Cohen, real estate agent for Compass. “They want to be part of a community.”

And since they are already at home with services like Airbnb or Uber, “they do not mind sharing” the common areas. 

Cheaper option for renters?

Everything about the projects is geared towards optimizing the use of the space.

“In a normal apartment building, there is so much lost space,” said Sophie Wilkinson, who is in charge of the design for Common.

Their response was to shrink the size of the rooms and expand living spaces like the kitchen.

With smaller rooms, co-living is 15 to 30% cheaper than a studio in the same area, the companies say. But that does not necessarily make them more affordable than a traditional roommate situation.

Common, which offered 800 rooms in 27 buildings in six U.S. cities in June, hopes to be able to offer 2,000 by the end of the year. Every week, the company receives 3,000 requests.

Noting the rapid rise in popularity of coworking by companies like WeWork, Medici Group spokesman Volker Binnenboese said that “something similar could happen to co-living.”

“We are now focusing on these millennials, but they grow older. We can perfectly imagine doing the same things for young families in our buildings,” he told AFP.

Projects for families could include shared childcare services, for example. HM/JB

source: business.inquirer.net

Christmas aid as UK homelessness becomes ‘national crisis’

Volunteers at a drop-in center in north London hand out food, healthcare and advice to homeless people as they do every Christmas – except that this year, the numbers needing help have reached crisis point.

At a school emptied of children for the holidays, visitors are offered a hot meal and a chat, dental and medical check-ups, and even a sewing repair service for damaged sleeping bags.

The pop-up center is among 13 set up across Britain by homelessness charity, Crisis, to provide some festive cheer to an estimated 4,500 people, who might otherwise be on the streets.

Among those stopping by for a cup of tea before Christmas was Paula, a 48-year-old former care worker who spent three months living in her car after being evicted following problems with her landlord.

“My car was my safest bet because I could lock the doors, but it wasn’t warm – luckily it was summer,” she told AFP.

It was also deeply uncomfortable and exacerbated an existing back problem, to the point that she collapsed and had to be taken to hospital.

She has since found a new place to live, but Crisis warned that cases like hers are increasingly common, estimating that thousands of people across Britain are forced to sleep in cars, trains, buses, and tents.

These “hidden” homeless are in addition to the more than 9,000 people living on the streets in England at any one time, up 134 percent since 2011, according to a scathing report by lawmakers published this week.

The MPs said the growth was “appalling”, adding: “The extent of homelessness across England is a national crisis.”

Housing shortages 

Opposition Labor lawmaker Jeremy Corbyn highlighted the plight of rough sleepers in his Christmas message on Sunday, as well as that of an estimated 78,000 households who are living in temporary, often sub-standard accommodation.

He has previously described it as a “national disgrace”.

Crisis chief executive Jon Sparkes said there were numerous reasons why people lost their homes, including the breakdown of relationships, but the biggest recent factor has been the ending of a private sector tenancy.

“What’s becoming really clear to us is that the impact of not building social houses, the impact of spiraling cost of housing, the impact of welfare reform and cuts to benefits is creating and driving a really worrying growth in rough sleeping and broader homelessness,” he told AFP.

The MPs said the government’s attitude in the face of a growing problem had been “unacceptable complacent”.

They also warned about the impact of a lack of affordable, decent homes, calling for a “renewed focus” on housing policy.

Challenged on the subject earlier this month, Prime Minister Theresa May said the government was investing £500 million (563 million euros, $668 million) in tackling homelessness.

Speaking in the House of Commons, she also noted measures announced in November’s annual budget to increase the supply of affordable housing.

“We are going to be a government who put a clear focus on housing, on building the homes that people need, on ensuring that people are given help to get into those homes, and on acting to prevent homelessness before it happens,” she said.

At the drop-in center, volunteer Mhari Colvin, who has worked with Crisis for 13 years now, reflected on “just how easy it is for people to become homeless”.

“They are just you and me, they’re the same people, they’ve just had one or two runs of bad luck and it can be just one thing and their whole world falls apart,” she said. /kga

source: newsinfo.inquirer.net

US housing in 2017: higher mortgage rates, home sales, prices

Nate Lowenstein has been shopping for a home in Los Angeles, on and off, for more than a year. His search has been stymied by a stubbornly low roster of homes on the market and the hurdles that come with it: multiple competing bids and higher prices.

“It’s not a great market, from a buyer’s perspective,” said Lowenstein, a lawyer. “The one good thing is that interest rates were quite low.”

As recently as last summer, homebuyers had ultra-low mortgage rates on their side. It was good news for any borrower, but especially for those in expensive housing markets like Los Angeles, Boston and Seattle.

That was then. While mortgage rates remain very low by historical standards, they’ve risen sharply over the past couple of months, with the average rate on a 30-year fixed-rate mortgage reaching 4.2 percent this past week. The rate got as high as 4.32 percent a week before that, its highest level since 2014 and well above the past year’s average of 3.65 percent.

Economists predict that mortgage rates will continue to climb this year, just one of the trends that suggest that 2017 will be a more challenging year for homebuyers.

“With higher mortgage rates, you’re increasing the cost, challenging the budgets, challenging the ability to qualify and, as a result, likely reducing somewhat the pool of potential buyers,” said Jonathan Smoke, chief economist for Realtor.com.

So far, the rate increases haven’t begun to worry Lowenstein, who is in the market for a house with at least three bedrooms in L.A.’s affluent west side. His budget: Between $1.6 million and $1.8 million.

“We’re not priced out yet,” Lowenstein said. “But if it goes up to 5 percent or 6 percent, at some point we would be.”

Long-term mortgage rates tend to track the yield on the 10-year U.S. Treasury note. The yield goes down when investors bid up bond prices, as they did following last summer’s vote in Britain to exit the European Union. The move sent long-term mortgage rates tumbling as low as 3.41 percent.

The reverse happened after Election Day. Investors bet that a Republican-controlled White House and Congress will have a clear path to implement policies that will drive inflation and interest rates higher. A sell-off in U.S. bonds drove the yield on the 10-year Treasury note in mid-December to the highest level in more than two years, and mortgage rates have floated higher with the tide.

But will they continue to do so?

Smoke predicts mortgage rates will reach 4.5 percent in 2017. Other economists expect rates to remain above 4 percent but not to go beyond 5 percent this year. That range would mean mortgage rates that would be low compared with the past decade.

Average long-term mortgage rates were above 6 percent during the height of the last housing boom, and they hadn’t hit 5 percent before 2008.

So someone looking to buy a home in the next few months doesn’t need to panic, said Svenja Gudell, chief economist at Zillow, a real estate information company.

“My advice to buyers would be to not freak out and feel a sense of urgency,” she said. “If you aren’t able to buy a house at 4.5 percent, you probably weren’t able to buy a house at 4 percent.”

The stakes are a bit higher for buyers in expensive markets, where housing can eat up a much larger share of household income.

If mortgage rates continue to climb, there are moves that would-be homebuyers can make to better offset some of the higher borrowing costs.

Consider lowering the interest rate by paying a fee to the lender up front, something known as buying down the interest rate. Or go with an adjustable-rate mortgage, which has a low fixed rate for a few years, typically five or 10, then adjusts to a higher rate.

Another move: Ask the seller to pay the buyer’s closing costs. That can free up more cash for buyers to manage the higher borrowing costs.

Higher mortgage rates could have one silver lining: As some buyers are priced out, sellers may have to be more flexible on prices. Over time, that could help stem home prices.

Low inventory and strong demand helped increase prices in 2016 at the fastest pace in 10 years, according to an analysis by Zillow. The company predicts that U.S. prices will increase about 3 percent on average in 2017, down from a gain of about 6.5 percent last year.

Declining affordability is one reason the National Association of Realtors predicts that homes sales will rise 2 percent this year. Compare that with the 15 percent increase in sales through the first 11 months of 2016.

Even buyers who can weather higher mortgage rates may have to brace for a long home search this year.

The inventory of homes for sale is expected to be tighter in 2017 than it was last year. While it varies by market, nationally, fewer than 1.9 million homes were on the market in November, down 9 percent from a year earlier, according to the NAR.

Homebuilders aren’t building enough homes to make up for the shortage, citing a lack of ready-to-build land, labor shortages and rising building materials costs.

Buyers can also expect more competition in 2017 as millennials continue to transition from renting to homeownership, particularly in more affordable markets in the Midwest and South.

First-time buyers accounted for roughly 32 percent of home purchases through the first 11 months of 2016, up from 30 percent in the same period a year earlier, according to the NAR.

Affordability remains a hurdle for many first-time buyers, but qualifying for financing may get a bit more accessible in 2017.

Fannie Mae and Freddie Mac increased the limit of the mortgages they will buy from lenders on Jan. 1 to $424,100 from $417,000. In more expensive markets, the mortgage giants will accept loans as high as $636,150, up from $625,500.

Banks may also have an incentive to loosen lending standards if rising mortgage rates continue to dampen demand for mortgage refinancing. –Alex Veiga

source: business.inquirer.net

What are Cash Back Mortgages?

When it comes to choosing a mortgage, there are many possibilities. A cash back mortgage is often recommended to first-time homebuyers because it gives you exactly what its name states: Cash back – money in your pocket to use as you please.

 How do cash back mortgages work?
With a cash back mortgage you will need to come up with a down payment – like any other mortgage – but you will be entitled to a lump sum after your mortgage closes.

What can I use my cash for?
This is entirely up to you. Most people use the money to help them with moving, closing costs, land transfer tax, lawyer’s fees or renovations – basically things required to get them into their new home.

How is the amount of cash calculated?
The amount you receive is based on the size and term of your mortgage. This translates to roughly 5-7% of its value with a maximum of $20,000.

When do I get access to my cash?
Usually, you are given access to your cash directly following the closing of your mortgage. This works out well for most people since they need these funds to cover the expenses that go along with moving, renovations, and other similar factors.

What are the benefits of this type of mortgage?
Besides using the advanced cash to pay for fees and taxes associated with moving, you can also use the money to apply it towards your mortgage as an immediate prepayment of the principal.

What are the drawbacks of a cash back mortgage?
If you break your mortgage terms before it’s reached maturity, you will unfortunately have to pay back the cash you received along with the standard penalty that goes along with refinancing. Also, rates are higher with cash back options and they are not available for variable rate mortgages.

Is this type of mortgage right for me?
Cash back mortgages aren’t ideal for every homebuyer, but the Canadian housing market is conducive to different types of mortgages that suit every kind of buyer. If you’re a first-time homebuyer, a cash back mortgage may be better suited to you because it can help pay for the expenses linked with purchasing a home.

Northwood Mortgage can advise you on which type of mortgage products will work for your particular situation. Your mortgage should fit your needs because it’s your home and your money. Talk to our experts today to find out more!

source: northwoodmortgage.com

Home cheap home: Vietnam architect’s quest for low-cost housing

LONG AN, Vietnam - Vo Van Duong's bamboo and coconut leaf house looks much like others deep in Vietnam's Mekong Delta. But unlike them, his seemingly simple abode is designed to withstand typhoons, flooding and earthquakes—and at a cost of less than $4,000 could herald a new wave of cheap, sustainable housing.

The natural materials on its surface belie the hi-tech internal structure of the farmer's new home, which uses steel struts and wall panels as a defense against the elements in this natural disaster-prone region.

"The new house is safer, I'm not afraid that it will collapse," the 48-year-old papaya farmer told AFP inside the house he moved into nine months ago.

Duong is testing a prototype by an award-winning Vietnamese architecture firm looking for low-cost housing solutions for communities vulnerable to climate change.

His S-House 2 was free, but if rolled-out on a wider scale could be sold for less than $4,000.

"There was water coming down from the roof in my old house. Sometimes, when there was a strong wind, I was so afraid the house wouldn't survive," Duong said, adding his new home was the envy of his neighbors.

The eco-home is the brainchild of Vo Trong Nghia, who joins other architects around the world in trying to fill a demand for cheap and easy to assemble housing—from flat-pack refugee shelters to shipping-container homes for tsunami victims.

He says all architects have a duty to help the poor.

"What about those with low income, billions of them, how can they live?" Nghia told AFP. "They have the right to live in comfortable, functional places."

But he wants to go further, creating a home residents can take pride in.

"I don't want people to be looking at it as 'cheap houses' but as resort-quality accommodation close to nature, so [residents] can live a life of the highest quality."

Flat-pack homes

The design is still being refined by his team, who are eventually aiming to create a flat-pack home. The newest version, S-House 3, can be built by five people in three hours.

"Our goal for S-house is for the owner to construct it by themselves," said Kosuke Nishijima, a partner at the firm.

The latest design also allows for multiple houses to be tacked together, a function that could allow, for example, the construction of a storm-proof school easily transportable to remote areas or a larger family home.

Nghia has already been approached by NGOs in disaster-prone Bangladesh and the Philippines, but is not yet ready to supply the house commercially.

From saline-intrusion and flooding in the Mekong Delta to typhoons along the central coast, Vietnam is also home to communities living in high risk areas.

For decades, Vietnamese families have adapted their houses themselves, many building ad hoc mezzanines to avoid flooding.

In more recent years organizations including the Red Cross and Women's Unions, as well as local authorities, have been trying to help people develop more resilient housing.

But in order to ensure such projects are successful, "private architects' support is critical," according to Boram Kim, an urban specialist with UN-Habitat in Vietnam.

"State and local government authorities are well aware that such houses are needed for the poor, but have little technical knowledge for realising their ideas," she told AFP.

"Architects have technical knowledge for reducing the housing construction cost while making it storm proof," she said, cautioning that it was important for designers to listen to the needs of local communities.

Architect for the poor

Nghia's firm found that one of the problems facing rural Vietnamese living in traditional bamboo shacks or stilted river-bank dwellings is the costly upkeep they require to withstand increasingly extreme weather.

Although the S-House 2's outer casing of coconut leaf may need replacing every four years, the structure itself should require no expensive maintenance, said engineer Lien Phuoc Huy Phuong.

"It can last a long time, the structure is sound," he told AFP during a tour of the small building.

Despite its solid exterior, the house is spacious and airy inside, with large windows and doors to bring residents closer to nature.

"We tried to design this house with the best ventilation system, with spaces by the roof and windows for better air flow," Phuong said, pointing out strategic gaps that should reduce the need for electric fans.

Architect Nghia, who used bamboo as a key element in Vietnam's country pavilion for the 2010 World Expo in Shanghai, has long sought to incorporate natural and local materials into his work.

One of his first projects in Vietnam's Ho Chi Minh City was an ecologically-conscious take on a traditional Vietnamese tube home, known as Stacking Green house.

Built in 2011 for around $150,000, the building is made of a series of concrete slabs and gaps filled with plants to provide privacy while still allowing plenty of air and light.

Nghia is in strong demand for high-end projects from hotels to private houses, but said the low-cost S-House is his personal obsession.

"I want to live in S-House. If my family will agree," he said. — AFP

source: gmanetwork.com