An Overview for Homebuyers

When embarking on the journey of buying a home in Alberta, understanding the intricacies of insured mortgages is crucial for those unable to make a 20% down payment on their new home. An insured mortgage, often a necessity for many first-time buyers and those with limited upfront capital, comes with its own set of rules and implications.

What is an Insured Mortgage?

In Alberta, an insured mortgage is required for homebuyers who have less than 20% of the purchase price available for a down payment. This type of mortgage, classified as a high-ratio mortgage, has a loan-to-value (LTV) ratio exceeding 80%, indicating that more than 80% of the property’s value needs financing. As a result, the loan must be insured against default for the benefit of the lender.

Key Elements of Insured Mortgages

Mortgage Default Insurance: This is insurance that protects the lender in case the borrower defaults on the loan. As mentioned above, this insurance is mandatory on high-ratio mortgages with an LTV that exceeds 80%. It is important to note that although the lender passes on the cost to the borrower, this insurance is for the lender's protection and benefit, not the borrower's.

Down Payment Requirements: The minimum down-payment required for an insured mortgage in Alberta, is 5% for the portion of a home’s price below $500,000, and 10% for any portion exceeding $500,000 (up to $1 million).

Insurance Providers: In Canada, mortgage insurance is most commonly provided by the Canada Mortgage and Housing Corporation (CMHC), but private insurers like Genworth Financial Canada (now Sagen) and Canada Guaranty provide mortgage insurance as well.

Premiums Costs & Payment: Premiums are calculated as a percentage of the loan, and are based on the size of your down-payment. The higher the percentage of the home’s value (price) you borrow, the higher percentage you will pay in insurance premiums. In other words, the premium rate escalates as the down payment size decreases. However, you will often receive a lower interest rate on your mortgage, offsetting some of the cost.

These premiums, which can be substantial, are added to the mortgage amount and are paid throughout the loan's lifespan. Here is a table of CMHC’s premiums as an example:

Loan-to-Value Ratio: Insured mortgages typically have an LTV ratio greater than 80%. This higher LTV ratio signifies a higher risk for the lender, which the insurance mitigates.

Credit Score Criteria: A good credit score is usually required to qualify for an insured mortgage, reflecting the borrower's financial stability.

Property Price Limits: Mortgage loan insurance is only available for properties with a purchase price below $1 million in Canada.

Impact on Interest Rates: As mentioned, due to the decreased risk to the lender associated with an insured mortgage, borrowers with insured mortgages may encounter lower interest rates than they would typically qualify for with a conventional mortgage.

Summary

In essence, an insured mortgage in Alberta is a strategic option for those who are looking to buy a home but are unable to afford a large down-payment. While it facilitates home-ownership, it's important for potential buyers to understand the additional costs and requirements involved. Insured mortgages are particularly prevalent among first-time homebuyers, offering a pathway to home-ownership while ensuring lenders are protected.

How to Prepare Your Home for the Real Estate Market

When it comes to selling your home, first impressions are everything. Properly staging and preparing your home for sale is a critical first step in attracting potential buyers and achieving the best possible price. Here’s how to ensure your home is market-ready:

Declutter and Depersonalize

Reducing Clutter: Clearing clutter makes your home appear larger and more inviting. Remove unnecessary items from countertops, shelves, and closets to create a sense of spaciousness.

Depersonalization: Buyers need to envision themselves living in your home. Remove personal items like family photos, memorabilia, and personalized décor.

Make Necessary Repairs

Small Fixes: Address minor repairs such as leaky faucets, squeaky doors, or chipped paint. These small fixes can make a big difference in the buyer’s perception.

Major Repairs: Assess if major issues should be fixed pre-listing. Sometimes, offering a discount on the sale price is more viable. Consult your Realtor for advice on balancing the cost and benefit of these repairs.

Boost Curb Appeal

Lawn and Garden: Keep your lawn trimmed, bushes pruned, and flower beds tidy. Positive first impressions are crucial, and the exterior of your home is the first thing a buyer sees.

Exterior Maintenance: Ensure the home’s exterior is in good condition, including clean siding, a well-maintained roof, and clean gutters.

Welcoming Entry: Make the entryway inviting with a clean doormat, potted plants, and a fresh coat of paint on the front door if needed.

Strategic Staging

Neutralize and Modernize: Opt for neutral colors in walls and furnishings to allow buyers to imagine the home as their own.

Furniture Layout: Organize furniture to optimize space and flow, removing oversized or excess pieces.

Arrange Furniture: Arrange furniture to maximize space and flow. Consider removing oversized items or excess furniture.

Feature Highlighting: Accentuate your home's best attributes, like a cozy fireplace or a picturesque window view.

Deep Clean

Comprehensive Cleaning: A spotless home speaks volumes about how it has been maintained. Ensure every corner, including carpets and windows, is immaculate.

Odor Elimination: Neutralize any persistent smells, such as those from pets or cooking.

Optimize Lighting

Brighten Up Spaces: Bright, well-lit spaces feel more open and inviting. Open curtains, clean windows, and strategically place lighting fixtures to enhance each room's ambiance.

The Final Touches

Creating Ambiance: Small details like fresh flowers or a fruit bowl in the kitchen can make a significant difference.

Comfortable Climate: Ensure the home is heated or cooled to a pleasant temperature during showings, regardless of the season.

Remember, the aim is to present your home in a manner that appeals to a broad range of buyers. By following these steps, you can significantly elevate your home's appeal, paving the way for quicker sales and more attractive offers.

The Top Benefits of Hiring a Property Manager

As a property owner, the idea of maximizing your investment while minimizing daily hassles is not just a dream—it's a possibility. Hiring a property manager can transform your experience as a property owner, and here's why this move can be a game-changer for your investment.

Navigating the Complex World of Real Estate Regulations

Property managers bring a wealth of knowledge in local, provincial, and federal real estate laws, including those tricky landlord-tenant laws, housing regulations, and the complexities of eviction processes. Their expertise is your safeguard against legal pitfalls, ensuring you stay compliant and out of legal trouble.

The Art of Tenant Screening

Finding the right tenant is more than a lucky draw. Property managers are skilled in conducting thorough tenant screenings. This is crucial for securing tenants who are not only reliable in paying rent on time but also respectful of your property, saving you unnecessary repair costs and significantly reducing turnover rates.

Streamlined Rent Collection and Financial Management

The financial aspects of property management are often overwhelming. Property managers streamline this process, handling everything from rent collection to budgeting for maintenance and preparing financial reports, ensuring a steady and hassle-free cash flow.

Ensuring Timely Maintenance and Repairs

The condition of your property directly impacts its value. Property managers have a network of skilled contractors to ensure timely maintenance and repairs, keeping your property in top shape and preserving its value.

Minimizing Vacancy Periods

Vacant properties are a landlord's nightmare. Property managers excel in marketing and understanding the local market dynamics, filling vacancies faster with competitive and profitable rent pricing.

Handling the Day-to-Day: A Hands-Off Approach for You

Dealing with tenant complaints, emergency repairs, and routine inspections is all in a day's work for property managers. This hands-off approach for property owners reduces your daily burden, giving you peace of mind.

Maximizing Your Property's Value and Income

It's not just about maintaining; it's about enhancing. Property managers don't just keep your property running; they suggest and implement improvements to boost its value and your income.

Professional Distance from Tenants

A property manager acts as a professional buffer between you and your tenants, which is invaluable for enforcing lease terms, handling difficult situations, and preventing potential conflicts.

Saving Time and Reducing Stress

For property owners, especially those with multiple properties or living far away, managing properties can be overwhelming. A property manager takes on these responsibilities, freeing up your time and reducing stress.

Providing Market Insights and Advisory

Property managers are not just managers; they're your advisors. With insights into current market trends, they offer invaluable advice on various aspects of property investment and management.

The Takeaway

In essence, a property manager is more than just a facilitator; they are a key asset in ensuring the professional management of your property and in maximizing your returns. If you're looking to take your investment to the next level with minimal personal involvement, hiring a property manager could be your best move yet.

What is Radon?

Radon is a colorless, odorless, and tasteless radioactive gas that naturally occurs from the decay of uranium in soil, rock, and water. As uranium breaks down, it converts into different elements, giving off radioactive alpha and beta particles during the process. One of the elements formed during this chain of decay is Radon gas. When these radioactive particles carried in the Radon gas are inhaled, they pose a significant health risk. The #1 leading cause of lung cancer in non-smokers is Radon exposure.

Typically, this decay, or breaking-down, of uranium happens under the soil and safely away from the air that humans are breathing. When Radon is released from the ground into the outdoor air, it is diluted and not a concern, but in enclosed spaces like homes, it can accumulate to dangerously high levels and become a risk to the health of you and your family.

When homes are built, builders must dig down below the frost line to lay the foundation in order to prevent it from heaving during the winter months. This is why homes in Alberta almost always have basements. However, now that the home is sitting below the surface grade of the earth, the foundation walls and floor slab are all surrounded by soil and possibly bedrock which may contain uranium.

Where is Radon Found Geographically?

Uranium is a common element found everywhere in the earth’s crust, and as a result Radon gas can be found almost anywhere in the world, but it is found in higher concentrations in specific regions. Canada has one of the largest shares of uranium in the world. The Athabasca Basin, for example, is home to several uranium mines and mills.

In the context of housing, Radon gas from the decay of uranium can be found anywhere. Almost all homes in Canada will have some degree of exposure to Radon but it is not uniform. It’s possible to appear at dangerously high levels on one street, or even home, and not a neighboring street or home. Luckily, there are cheap, simple, and effective ways to both test for, and mitigate, Radon gas levels in your home. We will discuss these options later in the article.

How Radon Enters Homes

Radon normally enters homes and buildings through cracks and openings in the foundation. 

For several reasons, the soil around your home’s foundation has a higher pressure than the air inside the basement. The weight of the soil and moisture outside your home produces a positive pressure on air trapped within the soil as it tries to escape to the surface. Meanwhile, your home has ventilation, both helping exit stale air from your home and introduce new, fresh air. Since heat rises, there is also typically a significant temperature difference between the upstairs of your home, and the basement, (especially in 2-storey homes). This difference in temperature draws warm air upwards, creating a negative pressure in the basement.

The lower pressure in your basement compared to the surrounding soil, allows air and gasses to seep in through any cracks or other openings in your floor slab, foundation walls, or sometimes even where the wood frame meets the foundation.

What Happens Once Radon is Inside the Home?

Radon is 7.5x heavier than air. This means it will tend to accumulate in basements and crawl spaces, especially ones without adequate ventilation. If you think about your average 2-storey home, it will have 2-3 windows, near the ceiling of the basement, which are surrounded by a window well outside and rarely if ever opened. 

A home with a walk-out basement for example, with a doorway and several large windows that do get opened regularly, is at less risk for accumulating Radon than a 2-storey home with a couple of small, high, windows that are almost never opened. Even in a walk-out though, during the cold winter months, Radon can accumulate inside.

Testing for Radon

There are several different ways to test for Radon in your home, but most reliable tests take a minimum of 3 months to complete. Radon can vary daily and seasonally. Factors such as temperature changes, barometric pressure, and ventilation patterns can cause Radon levels to fluctuate, making short-term test results more variable. These tests provide a snapshot in time, which may not accurately represent the average Radon exposure in your home throughout the year. For that reason, we do not recommend short-term Radon testing.

Long-term testing captures a broader range of conditions, including seasonal variations, making them more representative of the typical Radon exposure in your home. Accurate and reliable test kits can cost around $60 to purchase, and sometimes come with a lab charge of $40 or so when you submit your kit for analyzing.

Essentially, you place one or two test kits in your basement, and wait 3-6 months as instructed by the product manufacturer. Once the time has passed, you send it away to a lab to be analyzed.

There are different types of tests but the most common for long-term testing are Alpha Track Detectors. Alpha Tracks use a plastic film that records “tracks” left from the impact of alpha particles. These tracks are microscopic damage, or tiny little pits and lines, created by the energy of the alpha particles as they collide with the film. Measuring the amount of tracks compared to the amount of time it was left in the test area allows the lab to determine the average Radon levels.

Short-term tests, which we do not recommend, can take place from anywhere from a few days to a few weeks. Activated Charcoal Detectors and Electret Ion Chambers are the most common short-term tests. A device containing activated charcoal will absorb Radon gas from the air over a short period of time, typically 2-7 days. Electret Ion Chambers use a charged Teflon disk (electret) that loses charge when exposed to ionizing radiation from Radon. With either of these test instruments, you simply place it in your basement, then send it to the lab for analysis.

Whichever test you choose to perform, you are best off by conducting it during the winter months when your windows are closed and you have the least fresh air circulating in your home. This will help show you the levels at their worst, rather than giving you a false confidence that levels are fine by testing during the summer months.

Test Results and Radon Levels

Radon is measured in Becquerels per cubic meter. A Becquerel is a measurement of the rate of radioactive decay, with one becquerel representing one decay event per second.

Health Canada recommends taking action to reduce Radon levels in your home if the concentration exceeds 200 Bq/m3. The World Health Organization recommends taking action at 100 Bq/m3.

Reducing Radon Levels

The good news is that mitigating or reducing Radon levels is not unaffordable or especially difficult to achieve.

In Alberta, homes built in 2015 or later are required to have Radon mitigation systems roughed-in by law. What this means is that underneath your floor slab there is a series of perforated pipes that come together, and come up through your floor slab somewhere in your basement. When you purchase your home, this pipe will be plugged or capped and not in service. There is also a plugged or capped piece of piping that exits the sidewall of your home above the foundation level, located directly above the floor pipe. After moving in, you can complete a Radon test, and if high levels of Radon are detected, you simply install a low voltage fan, in a piece of piping that connects the floor pipe to the sidewall outlet. This fan pulls a vacuum from underneath your floor slab, dispersing the air and gas to outside where it can be diluted by the atmospheric air. Since there is now a negative pressure under and around your basement, Radon gas will not enter your home but rather, air from your home would escape outward into the ground from any cracks in your foundation.

If your home was built before 2015, you can still install this system fairly easily. The only difference is that some of your concrete floor slab will need to be cut out and then replaced after the installation of the perforated piping. The cost of this work depends heavily on the size of your home, whether your basement is finished or not, and other unique qualities like if you have heated floors for example. Typically the cost to install a Radon mitigation system is around $2500-4000 if you have an unfinished basement. If you will  need to refinish floors etc, you can add on costs from there. 

Other simple and effective ways to reduce Radon levels are to increase ventilation, or seal any foundation and floor slab cracks. Opening windows, and recirculating your furnace, will help change out the stale, heavy air in the basement with fresh clean air.

Radon in Water

Radon can also be present in water, particularly in well water. If Radon is detected in your water supply, treatment options include:

• Aeration Systems: Bubble air through the water and vent the Radon outdoors.

• GAC Filters: Granular activated carbon filters can remove Radon from water.

Professional Help

There is a program called the Canadian National Radon Proficiency Program (C-NRPP) that is managed by the Canadian Association of Radon Scientists and Technologists (CARST), which certifies Radon professionals in Canada.

If you would like testing, or Radon mitigation work completed for you, C-NRPP has a “Find A Professional” feature on their website: www.c-nrpp.ca. Alternatively, you can ask your Realtor for a referral to a reliable Radon technician.

Resources and Support

Unfortunately, there are no specific programs in Alberta that directly subsidize the cost of Radon testing or mitigation for homeowners. However, there are resources and initiatives that can help homeowners understand and manage Radon risks, as well as potential rebates or incentives from other organizations. Here are some options to explore:

• Alberta Health Services (AHS): Alberta Health Services provides information and resources about Radon, its health risks, and guidance on testing and mitigation. While they do not offer financial assistance, they can help you understand the importance of addressing Radon in your home. www.albertahealthservices.ca. 
• Lung Association, Alberta & NWT: The Lung Association works to raise awareness about Radon and offers resources for testing and mitigation. www.ablung.ca. 
• Health Canada: Health Canada provides information on Radon, including testing and mitigation guidelines. www.canada.ca/en/health-canada/services/health-risks-safety/radiation/radon.html. 
• Canadian National Radon Proficiency Program: The C-NRPP can help you find Radon measurement and mitigation professionals who may offer competitive rates or financing options. www.c-nrpp.ca. 

Conclusion

Radon is a serious health risk that can be easily and affordably managed with proper testing and mitigation. There is no way to know which homes may have high Radon levels without long-term testing. Although scientists and medical professionals are now aware of Radon and its harsh effects on people, such as lung cancer, very few homeowners, or people in general, are aware of Radon or its risks. This means if you are purchasing a home, you should test it after you move-in. Testing and taking action to reduce high Radon levels can help protect you and your family from the harmful effects of Radon exposure.