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10 words to know when buying a home

Buying a home is one of the most important financial decisions you will make. To help you understand the process and have confidence in your choices, consult the following glossary of common terms you may encounter during the homebuying process.

1. Amortization

Length of time over which the debt will be repaid.

2. Mortgage term

Length of time that the mortgage contract conditions, including interest rate, is fixed.

3. Closing costs

Costs in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on closing day. They range from 1.5% to 4% of a homes selling price.

4. Down Payment

The portion of the home price that is not financed by the mortgage loan. The buyer must pay the down payment from his/her own funds or other eligible sources before securing a mortgage.

5. Equity

The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the mortgage is reduced through regular payments. Market values and improvements to the property may also affect equity.

6. Fixed / variable mortgage interest rate

A fixed mortgage interest rate is a locked-in rate that will not increase for the term of the mortgage. A variable mortgage interest rate can fluctuate based on market conditions, but the mortgage payment remains unchanged.

7. Gross Debt Service Ratio (GDS) / Total Debt Service Ratio (TDS)

GDS is the percentage of the gross income that will be used for payments of principal, interest, taxes and heating costs and 50% of any condominium maintenance fees or 100% of the annual site lease for leasehold tenure. TDS is the percentage of gross income that will be used for payments of principal, interest, taxes and heat and other debt obligations, such as car payments or payments of other loans.

8. High-ratio mortgage / conventional mortgage

A high ratio mortgage is a mortgage loan higher than 80% of the lending value of the property. A conventional mortgage is a mortgage loan up to a maximum of 80% of the lending value of the property.

9. Mortgage loan insurance

Mortgage loan insurance is typically required for residential mortgage loans with a loan-to-value ratio of more than 80%, and is available from CMHC or private companies. It is important not to confuse mortgage loan insurance with mortgage life insurance, which gives coverage for your family if you die before your mortgage is paid off.

10. Open / closed mortgage

An open mortgage is a flexible mortgage that allows you to pay off your mortgage in part or in full before the end of its term. A closed mortgage, in some cases, cannot be paid off in whole or in part before the end of its term. In other cases, the lender may allow for partial prepayment of a closed mortgage in the form of an increased mortgage payment or a lump sum prepayment. However, any prepayment made above stipulated allowances may incur penalty charges.

The information is provided by CMHC for general illustrative purposes only, and does not take into account the specific objectives, circumstances and individual needs of the reader. It does not provide advice, and should not be relied upon in that regard. The information is believed to be reliable, but its accuracy, completeness and currency cannot be guaranteed. Neither CMHC and its employees nor any other party identified in this Article (Lender, Broker, etc.) assumes any liability of any kind in connection with the information provided. CMHC stakeholders are permitted to distribute the materials at their expense. The above mentioned stakeholder organization is responsible for the distribution of this document.

July 2021 Market Statistics

INDY’S COMMENTS 

July continued to be a steady month with a slight dip of sales compared to the 2020 year.   The hot button topic of sale prices continues to be the topic to Buyers and Sellers. The average price hasn’t come down and we are still seeing a consistent up trend.  So despite there being fewer sales this past month, the continued pent up demand from lack of inventory has not caused any relief. 

KAMLOOPS AND DISTRICT NEWS

While summer is expected to be a good time for sales, market reports show a drop in residential sales for the second month in a row in Kamloops real estate. According to KADREA President, Chelsea Mann, “We had a great first 6 six months in terms of real estate sales and Kamloops is one of the few areas in BC that’s sustained it’s market performance through summer. One will notice a negative difference if we compare our last month’s performance to the same month last year, but we’re still performing above average for the season. This is because the hot market erupted during the same time last year and was fueled by pent-up demand after the coronavirus lockdown. I believe that moderate sales during this time is a healthy sign for the market to pick up again, which it usually does, during fall.”

Active inventory count in Kamloops has fallen since June 2021. Chelsea Adds, “Like I’ve mentioned before, supply is a long-term problem that needs to be addressed. Our active inventory numbers have plateaued significantly due to factors that may not be under our control. The effects of the wildfires in the province can be a reason why people would be holding off making a selling decision at this time of the year. As inventory has never been lower, sellers may also be finding it difficult to move to a new home if they wish to continue living in Kamloops. It is a cyclical issue that will be broken once sellers in Kamloops decide to get good value for their properties; as the province continues it’s path to strong economic recovery for the rest of 2021.”

Neighbourhoods with the most sales in  July (# of sales): 

  1. Sahali (43)
  2. Brocklehurst (32)
  3. South Kamloops (24)
  4. Aberdeen (19)
  5.  North Kamloops (17)
  July 20 July 21 Year to Date
NEW LISTINGS 333 281 2392
TOTAL SALES 256 243 1958
AVG. RESIDENTIAL SALE PRICE $493,102  $564,551   $553,617
AVG. DAYS ON MARKET 61 37 44
ACTIVE LISTINGS 746 624  

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YTD 2020 2021
NEW LISTINGS 1797 2392
TOTAL SALES 1164 1958
AVG. RESIDENTIAL SALE PRICE $468,528 $553,617 
DAYS ON MARKET 55 44

 

*Table Stats are for Kamloops area only, all types of housing as of Aug 6/21  – Kamloops only: Brocklehurst, Sahali, North Kamloops, Aberdeen, South Kamloops, Sun Peaks, Barnhartvale, Dallas, Westsyde, Campbell Creek/Deloro, Pineview Valley, Valleyview, Batchelor Heights, Cherry Creek/Savona, Dufferin/Southgate, Heffley, Juniper Heights, Pinantan, Rayleigh, South Thompson Valley, Sun Rivers, Knutsford-Lac Le Jeune, Tobiano *

May 2021 Market Statistics

INDY’S COMMENTS 

As we’re all feeling a bit lighter these days with end of restrictions nearly in sight, we can cautiously say the same for our market. While activity continues to remain strong and will do so for some time, the increase in new listings is relieving some pressure on our market locally. For many home purchasers, the quick pace of the market this past year coupled with increasing housing prices has made many people re-evaluate their plans, especially first time home buyers who are more budget conscious. The good moving forward is interest rates remain low and will continue to do so for some time and with supply slowly increasing that will stabilize demand as we near the end of the year.  For Home Seller’s it continues to be a good time for moving; whether up or down but still remains a careful balance of needing to list before being able to commit to a purchase. 

KAMLOOPS AND DISTRICT NEWS

The Kamloops Real Estate market is showing signs of a slight relaxation, as the sales numbers level out, but not to the same degree of slowdown that most of the other regions in BC have seen after their sales peaked in April 2021. “As we haven’t entered the post-pandemic market, I wouldn’t say that the market has necessarily peaked in Kamloops for 2021 yet. Our sales figures in May have indeed fallen by a few units as compared to April, but this is a regular annual trend. I look at it more like an indicator that the market is balancing itself towards stability. If you notice, our May 2021 sales figures are still very strong and Kamloops Realtors® have been out-performing themselves month-on-month. I am looking forward to the next couple of months, as we usually see a spike in sales during summer”, said KADREA President, Chelsea Mann.

Kamloops is about 1000 listings adrift of the average number of active listings the region normally has. Chelsea adds, “It is true that our Active Listing count is still below the balanced-market levels. While we keep adding new listings at a faster rate, it will take some time for the market to achieve the desired supply and demand equivalence. As sellers continue to experience multiple-offer scenarios in Kamloops, we’ll continue to see more people wanting to list properties. But when the market is hot, these properties sell fast as well. Numbers suggest that we’ve been adding at least 100 listings more than we’re selling every month. At this rate and unless this number improves exponentially, Kamloops will remain in a Seller’s market for the rest of 2021.”

It’s been over a year since we first experienced the aftermath of lockdowns in the province. As BC prepares to re-open, there could be unexpected market behaviour in the days to come. “One thing is for sure, there is going to be an uptick in Real Estate activity over summer. As lockdown restrictions are already being lifted across the province, one can’t deny that business activity is only going to grow and Real Estate like any other market, will respond likewise. I’m proud of all the Realtors® in the region who have supported each other through the difficult times and have put the interests of consumers first through the pandemic. We’ll continue to do this in the days to come” added Mann.

Neighbourhoods with the most sales in  May (# of sales): 

  1. Sahali (60)
  2. Brocklehurst (44)
  3. South Kamloops (30)
  4. North Kamloops (29)
  5.  Westsyde (25)
  May 20 May 21 Year to Date
NEW LISTINGS 236 411 1725
TOTAL SALES 117 325 1438
AVG. RESIDENTIAL SALE PRICE $467,493  $561,426 $545,728
AVG. DAYS ON MARKET 59 31 46
ACTIVE LISTINGS 694 554  

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YTD 2020 2021
NEW LISTINGS 1144 1725
TOTAL SALES 695 1438
AVG. RESIDENTIAL SALE PRICE $445,204 $545,728
DAYS ON MARKET 53 46

 

*Table Stats are for Kamloops area only, all types of housing as of June 7/21  – Kamloops only: Brocklehurst, Sahali, North Kamloops, Aberdeen, South Kamloops, Sun Peaks, Barnhartvale, Dallas, Westsyde, Campbell Creek/Deloro, Pineview Valley, Valleyview, Batchelor Heights, Cherry Creek/Savona, Dufferin/Southgate, Heffley, Juniper Heights, Pinantan, Rayleigh, South Thompson Valley, Sun Rivers, Knutsford-Lac Le Jeune, Tobiano *

September 2020 Market Statistics

We have have officially entered fall yet real estate is continuing to climb upwards with the summer market not yet ‘falling’.’ House sales in September surpassed last years number by 42%  — with the total years sales overall down only by 7%. A good strong market here is anticipated to continue despite the pandemic.

“Real estate sales numbers for last month have once again shown us that the impact of the pandemic on the market has been more positive than originally predicted…  While sales usually dip in September and then pick up again during the fall months until winter, the trend we are seeing right now is unlike anything that we have seen before”, says KADREA President Wendy Runge. “… As we expect interest rates to continue to stay low, probably until 2023, Kamloops Realtors® are confident that we will end the year on a high note” added Runge.

Single-family homes (148)  have continued to be the highest demand market compared to any other type of property in Kamloops followed by townhouse (42) and condo (25) not far behind.

With the winter season quickly approaching around the corner (its only 11 WEEKS till Christmas!), it is not unusual for sales to slow down towards the end of the year. “We are neither seeing the signs nor expecting a slowdown, at least, for the next couple of months. Provided that people continue to want to sell their homes, I can imagine that Kamloops will continue to be a healthy market for real estate sales”, said Runge.

Neighbourhoods with the most sales in  September (# of sales):

  1. Brocklehurst  (30)
  2. Sahali (28)
  3. Aberdeen (25)
  4. Westsyde  (20)
  5. South Kamloops /Downtown  (15)
  SEPT 2019 SEPT  2020 Year to Date
NEW LISTINGS 270 345 2732
TOTAL SALES 185 263 1704
AVG. RESIDENTIAL SALE PRICE $476,233 $509,862 $475,726
AVG. DAYS ON MARKET 43 62 56
ACTIVE LISTINGS 812 1046  

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YTD 2019 2020
NEW LISTINGS 2636 2732
TOTAL SALES 1829 1704
AVG. RESIDENTIAL SALE PRICE $445,726 $475,726
DAYS ON MARKET 46 57

 

* Stats are for Kamloops area only, all types of housing as of OCT 5/20 *