Mortgage 101 – coastal development | April 2021 Part 2

In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on News 95.7, the guys talk about coastal development, right of ways and easements, plus how insurance is underwritten.

Mortgage 101 with Clinton Wilkins & Todd Veinotte – April 2021 – Part 2

Don’t feel like watching the video? Check out the transcript below.

Transcript:

Welcome back to Mortgage 101!

Todd Veinotte: [00:00:09:20] We’re back on News 95.7 with Mortgage 101 Your Guide to Homeownership with Clinton Wilkins and myself, Todd Veinotte. And do you know who that is singing? I know you do because,

Clinton Wilkins: [00:00:18:23] I know because I teed it up. But here’s the thing: we could do a whole show of just like country tunes. I know, here, people are really tuning us in, you know, tuning in to hear us talk about mortgage lending and real estate. But, you know,

Todd Veinotte: [00:00:31:04] I think they’re just tuning in to hear these, these teasers.

Clinton Wilkins: [00:00:34:25] I mean, I think we picked some good songs. I think I really had some good songs in, like, the last like a year or two years, three years that we’ve been on the radio. And you know what? I think it just lightens it up a little.

Todd Veinotte: [00:00:45:29] Why do you like doing these radio shows so much? Because you really enjoy them. I mean, I know I do them because I get paid to do them. Why do you enjoy doing them?

Clinton Wilkins: [00:00:52:21] I like doing it because it’s education and, you know, Todd. I would venture to say you’d probably still want to do it if you weren’t getting paid.

Todd Veinotte: [00:00:59:06] As a volunteer?

Todd Veinotte: [00:01:00:00] Yeah.

Todd Veinotte: [00:01:00:25] Yeah, I think I actually would.

Clinton Wilkins: [00:01:01:27] I think you would. Because you know what? Now you’re really passionate.

Todd Veinotte: [00:01:04:22] Being sarcastic, right now by the way.

Clinton Wilkins: [00:01:06:01] Well, that’s all right. You can be as sarcastic as you want.

Todd Veinotte: [00:01:08:05] Did you mention the producer, by the way, we gave a shout out to Jonathan.

Clinton Wilkins: [00:01:11:20] Yeah. We have our executive producer here.

Todd Veinotte: [00:01:13:11] Yeah. Do you have an associate producer as well?

Clinton Wilkins: [00:01:15:14] We do.

Todd Veinotte: [00:01:16:16] Who is it?

Clinton Wilkins: [00:01:17:16] Her name’s Bethanee and she’s working here in our office.

Todd Veinotte: [00:01:20:01] Doesn’t she have a last name? Like Cher or something like that. Maybe?

Clinton Wilkins: [00:01:23:02] Maybe she wants the anonymity. Who knows?

[00:01:25:19] Maybe you just don’t know her last name.

Clinton Wilkins: [00:01:26:26] I do know her last name because I know everything.

Todd Veinotte: [00:01:31:09] She’s your employee and you don’t even know her last name. That’s sad.

Todd Veinotte: [00:01:33:26] I do, because I even asked her if she was related to other people with the same last name because it’s kind of like an uncommon last name.

Todd Veinotte: [00:01:41:00] Maybe you should just go with Clinton. No longer, no longer your last name just Clinton.

Clinton Wilkins: [00:01:44:23] The Clinton maybe.

Todd Veinotte: [00:01:45:28] No, not “The” just Clinton. Or Clint!

Clinton Wilkins: [00:01:49:09] I mean, you can call me whatever you want. Yeah. As long as you call me.

Todd Veinotte: [00:01:55:20] Okay.

Clinton Wilkins: [00:01:56:05] I don’t know if that’s a thing or not, but, or you can just check us out online at TeamClinton.ca/Radio. If you really want to hear about mortgage lending, maybe you just need to surf to the website and then there’s lots of great content on there. But hopefully everybody’s having a good weekend.

Coastal development

Todd Veinotte: [00:02:09:11] Yes, I think they absolutely are. Okay, all right. This week I heard an interesting story, actually chatted about this on News 95.7 and I thought we would talk about it on the weekend here. But there’s concern about coastal development because there’s provincial legislation, which is, which has had royal assent, but it’s not fully enacted yet, which is going to limit developers’ ability to build along the coast. But before that’s fully enacted, many developers I’ve heard are building along the coast. And there’s some concerns about coastal erosion and the environment and all of that stuff. So. What I would like to ask you is do lenders, how closely do the lenders look at this type of development and these concerns?

Clinton Wilkins: [00:02:53:15] Well, the one of the first questions that they ask us, we have to put in all the security details when someone’s, you know, financing a property. Like how big is the land, how many square feet is a house, what is the style of the home, is there a garage, et cetera, et cetera. One of the main questions they ask in there: are there any environmental concerns? You know, it’s important. They want to make sure their security is okay. They want to make sure that there’s not going to be any negative implications from any zoning bylaw issues, and sometimes they’ll write directly into the approval that the lawyer has to check and see if there’s any zoning or environmental or covenant issues. And, you know, the lenders want to know that if they do have a loss where they have to foreclose, that that property has value and that they can resell it again. And there’s not going to be any concerns around reselling and they have their security.

Todd Veinotte: [00:03:44:26] Okay, so to answer the question. Are there possibilities where mortgages aren’t approved, lenders say no because of coastal development?

Clinton Wilkins: [00:03:54:05] I think if there is an environmental issue, yes, it may not be approved,

Todd Veinotte: [00:03:58:24] It sounds like a political answer to me. I mean, give me the real answer, Clinton.

Clinton Wilkins: [00:04:02:14] I think that we would lend on any valuable security, honestly.

Todd Veinotte: [00:04:05:20] You do?

Clinton Wilkins: [00:04:05:29] I do. As long as the property is viable and, you know, there as well and septic and as long as there’s no negative implications from like the province, they’ll get a mortgage. But if someone goes and they build where they can’t build, they don’t get a building permit, you know, it’s against byelaws, et cetera, et cetera, then in that case, maybe they won’t. I’ve certainly seen properties that were rogue properties because, you know, in rural Atlantic Canada, people do what they do and sometimes they don’t have the proper permits, et cetera, that can negatively impact their ability to get a mortgage.

Insurance and the environment

Todd Veinotte: [00:04:45:10] But what about on the insurance side of things?

Clinton Wilkins: [00:04:47:22] I think on the insurance side of things, I think that can be a problem, too. I think if there is a, you know, any issue with the property or you’re not disclosing it, you know, that could negatively impact your financing, but also your insurance and your insurability. Like what happens if you did have a claim? That, that’s a problem. What happens if you’re trying to resell this property and you can’t resell it because there is some negative, you know, consequence? I don’t know. I think it’s something that people really need to think about. We’ve certainly seen areas of Nova Scotia, and Atlantic Canada, that have had problems with erosion. You know, your land falling away into the ocean may negatively impact the value.

Todd Veinotte: [00:05:25:20] It may?

Clinton Wilkins: [00:05:26:11] It may and it will. You know, there’s been properties that literally have gone away because of erosion. I think it certainly is a concern. And, you know, if the province is getting involved and limiting, you know, situations that may not be good for the environment, like I’m all for that.

Todd Veinotte: [00:05:44:16] Okay, so how much are you seeing of these types of properties? How much lending do you do for coastal properties?

Clinton Wilkins: [00:05:52:22] I think we see it everyday.

Todd Veinotte: [00:05:54:12] Everyday?

Clinton Wilkins: [00:05:55:02] Yeah. And I think especially around Halifax, we’re in a coastal community, you know, and that’s one thing that’s really interesting about Nova Scotia. You can drive, I think, probably 20 minutes anywhere and you can be on the coast. And so much of our land in Nova Scotia is along the coast. And I think that’s one of the great things about living in a in an area, in a province, in a city specifically of Halifax. We can, like, literally look out our door and see the ocean. Not everyone gets that. And I think that’s one of the nice things about Nova Scotia. But I think it’s something that we also need to be cognizant of in terms of protection. And, you know, if the province is going to get involved, there’s obviously been problems or they know that they need to put in some more protection in place.

Right of ways and easements

Todd Veinotte: [00:06:42:06] Are there any, at times, concerns about right of ways and things like that? I would think there must be right.

Clinton Wilkins: [00:06:48:06] Yeah, right of ways and easements are certainly a concern. And if someone’s buying a home, normally what they do is they have a lawyer’s clause in their agreement for the lawyer to review those type of things. And sometimes easements and right of ways can be a real mess. Especially in more rural properties, because maybe it’s not documented properly, or maybe you think your driveway’s on your land, but it’s actually on your neighbour’s land. And I think having, you know, a good lawyer that can really search the title and know exactly what’s going on, I think that’s important. But there are products available out there for people who are buying. It’s called title insurance, and it protects you from a whole slew of different challenges. I know we’ve talked about title insurance before. Normally, when someone’s buying a home, they either need to have title insurance or they need to have a survey of the property. New construction properties typically always have a survey because you need a survey to get a building permit. But the survey that you’re doing maybe your buyer cannot rely on because it’s in your name. Title insurance is always a better option. Even if there is, even if there is a survey. And with title insurance, there is a homeowner policy. And that homeowner policy can protect you as a buyer against a variety of different title issues and defects that may come up. And I can tell you specifically, in more rural areas, there are defects that happen because, you know, maybe the property wasn’t on land titles, maybe it was on the old registry system. And maybe when it was migrated, there were problems or maybe,

Todd Veinotte: [00:08:25:16] What type of problems?

Clinton Wilkins: [00:08:26:25] For example, there was a news story in Nova Scotia a couple of years ago that someone’s garage, for the house that they bought, they thought was on their land, but it was actually on their neighbor’s land. So guess what? You don’t own your garage. Maybe you have to tear down your garage. That could really negatively impact the value of your property. So I think that anybody who’s doing a purchase, if you’re doing a refinance, you should certainly talk to your lawyer around title insurance. A lot of mortgage lenders require it, at least the lender side of the policy. But I think it’s really important for the homeowner to have a policy as well. It’s a one time hit. We’re talking about a couple hundred dollars. It’s not like it’s thousands of dollars, but not having title insurance can certainly cost you thousands of dollars down the road.

How is insurance underwritten?

Todd Veinotte: [00:09:13:08] Well, how is it underwritten?

Clinton Wilkins: [00:09:15:03] It’s underwritten by an insurance company. Now, there are some Canadian-owned title insurers. There’s three or four title insurance companies here in our region that insure the properties. So the way that it’s underwritten is the lawyer submits for the insurance policy. The lawyer basically does a letter that states, you know, the covenant of the title, you know, any risks, et cetera, et cetera, and then that the insurance company would issue a policy to the lender and potentially that homeowner.

Todd Veinotte: [00:09:46:15] What do you want to talk about in the next segment?

[00:09:48:10] Well, I think, you know, it’s spring, and I think that we need to talk about, you know, the spring market, what’s going on here in Halifax. If we can talk about mortgage rates and, you know, we’re seeing a lot of refinancing. So I think certainly clarifying some issues there, I think will be important.

Todd Veinotte: [00:10:01:26] All right. Sounds like lots to get to. Again, thanks so much, everybody, for tuning in and listening to Mortgage 101 with Clinton Wilkins and myself, Todd Veinotte here on News 95.7. And we’ll get to that when we come back.

If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.