10 Nov

B20 Demystified. Mortgage Market Update November 10, 2107

General

Posted by: Anne Martin

MARKET UPDATE
B20 DEMYSTIFIED  The office of the Superintendent of Financial Institutions (OFSI) announced some regulatory changes on October 17, 2017. There were 3 changes announced, but it was the introduction of a qualifying rate stress test to all non-insured mortgages that will have the most impact on consumers.Home Buyers with a down payment of 20% or more must now qualify at a new minimum qualifying rate, which is the greater of the five year Bank of Canada Benchmark rate or the lender contractual rate +2%

What does this mean?

The biggest impact will be on the amount in which the homebuyer will be able to qualify. For example, if a homebuyer needs a $400,000 mortgage, has 20% down payment and a 25 year amortization, here is the difference:

Actual Rate to be Paid:            To Qualify:
Mortgage Amount $400,000 Contract rate 3.49%  The greater of the two: 4.99%, the current BOC Benchmark Rate OR 3.49% contract rate + 2%,WHICHEVER IS HIGHER = 5.49%
Monthly Payment for Debt Ratio Qualification $1994.98   $2439.24
Minimum Income Requred to Qualify $76,724.12   $90,052.14

E & OE – rates shown are subject to changing market conditions and OAC

To recap:

Uninsured Mortgages- Homebuyers/owners will now have to qualify for a mortgage using the benchmark rate, which is the Bank of Canada rate (currently 4.99%) or the lender rate + 2%, whichever is greater.

Insured Mortgage- Homebuyers must qualify using the Bank of Canada Rate (again, currently 4.99%). This came into effect in 2016 and has not been affected by the recent rule changes.

Can you still refinance your home? – yes. Homebuyers still can refinance up to 80% of the value of the property but the new stress test applies.

What if you have a contract written prior to October 17, 2017? – This depends on the lender. Some lenders will use current rules up to January 1, 2018. Others will implement the necessary changes before this deadline.

Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, book an appointment today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.84%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE
 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”
3 Nov

Are you prepared for the next round of new mortgage rules?

General

Posted by: Anne Martin

Anyone who has 20% or more equity in their home or planning to use more than 20% down payment on a home purchase after January 1, 2018, may qualify for a smaller mortgage than they did before that date.  This is a result of the latest changes in mortgage rules determined by the Office of the Superintendent of Financial Institutions (OSFI).

The governments new stress test will apply to all federally regulated banking institutions and will affect all conventional mortgages (more than 20% down payment or equity), including refinances, renewals and purchases.  If you are buying a home using less than 20% down payment, you will still pay mortgage default insurance(CMHC, Genworth or Canada Guaranty)  and qualify at the benchmark rate, currently 4.99% for most institutions.

No need to panic regarding your mortgage renewal.  You won’t have to requalify at renewal time unless you make changes, such as moving it to another institution or increase the amount, etc.  If you don’t qualify, your only choice may be to keep what you have and accept whatever is offered by your current lender.

At this time, it appears that provincially regulated financial institutions are not included.  ie credit unions.

It appears that applications submitted to lenders prior to January 1, 2018 will be honored under the old rules.  We are still waiting for further clarification from the government.

An important point is that many lending institutions have begun implementation early as requested by OSFI.

These changes may also greatly affect debt consolidations considering that you may not be able to refinance your home for as much as needed to pay out those high interest rate loans as you would presently be able to.

If you are considering a mortgage refinance, debt consolidation or purchase, you should consider talking with a mortgage professional as soon as possible.

Robert McLister of Ratespy wrote an excellent article in the Globe and Mail explaining further.  Please see the attached. Preparing for OSFI

 

2 Nov

New mortgage rules heat up Toronto. Mortgage Market Update November 2, 2017

General

Posted by: Anne Martin


New mortgage rules expected to heat up Toronto housing before winter chill    The sales slump in Toronto real estate is persisting into the fall, but average annual prices across the region are holding up thanks to double-digit price gains in the condo sector.      Find out more


Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs.  Regulatory changes may have a direct impact on your ability to refinance your mortgage or purchase a home. Please do not hesitate to contact me should you have any questions.

If you are in the market for a mortgage, contact me today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.84%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE

 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”

Check with your Dominion Lending Centres Mortgage Professional for full details and to determine what rate will be available for you.

20 Oct

What do these new mortgage rules mean?

General

Posted by: Anne Martin

Effective January 1, 2018 the Office of the Superintendent of Financial Institutions will require tough new mortgage rules for home buyers and mortgage refinances.  These guidelines will have a significant affect on mortgage qualification for anyone purchasing with more than 20% down or in the case of a refinance, more than 20% equity in their home.

At this time, it is not known how this will affect credit unions as they are regulated differently.

The main focus of these changes will be –

• the minimum qualifying rate for uninsured mortgages
• expectations around loan-to-value (LTV) frameworks and limits
• restrictions to transactions designed to work around those LTV limits.

Geoff Lee – mortgage agent with Dominion Lending Centres explains it in laymans terms.  Click here.

18 Oct

Canadian Bank Regulator (OSFI) announces new mortgage lending rule changes.

General

Posted by: Anne Martin

MARKET UPDATE

Ten ways the new mortgage rules will shake up the lending market

T-minus 76 days (January 1st, 2018 and counting until Canada’s banking regulator launches its controversial mortgage stress test.

It’ll be squarely aimed at people with heavier debt loads and at least 20 per cent equity – and it will be a tide turner.

Find out more

This is a critical time to sit down and review your household financing needs.  If  you are considering a mortgage refinance, it is of the utmost importance to seriously discuss your plan to close prior to January 1.   Please do not hesitate to contact me should you have any questions.


Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
If you are in the market for a home, book an appointment today to see how these changes affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.


Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.79%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.84%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE

 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”

6 Oct

How will upcoming new mortgage rules impact you?

General

Posted by: Anne Martin

MARKET UPDATE

Tougher mortgage rules would cause ‘substantial damage,’ says broker

In response to an open letter to the Prime Minister and Finance Minister asking them to reconsider the recent rule changes that have affected the vast majority of Canadians when it comes to qualifying for a mortgage, the Toronto Star has published this article expanding further on the impact on Canadians.

Read here


Best fixed rates are as low as *2.89 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, or need to refinance in the next year, it is really important to make an appointment today to find out how these changes may affect you.

**rates subject to change with market conditions –                          *OAC  **conditions apply  E. & O. E.


Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.79%
2 YEARS 3.04% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.94%
5 YEARS 4.94% *2.89 – 3.49 %
7 YEARS 5.30% 3.39%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE

 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”

5 Oct

Go Green & Save on your mortgage insurance!

General

Posted by: Anne Martin

CMHC has a program called “The CMHC Green Home Program” whereby you can save up to 25% of your mortgage default insurance by purchasing an energy efficient home.  It applies to a new home being built or a resale home that has energy efficient upgrades.  Please read further details below.

Go Green & Save!

27 Sep

What should we be talking about? Taxes or real estate?

General

Posted by: Anne Martin

Welcome to the September issue of my monthly newsletter !

This month’s edition addresses the imbalance of time we spend discussing real estate (in most cities) as compared to income taxes, as well as a look at the age old real estate related topic of ‘Location, location, location.’

Please let me know if you have any questions or feedback regarding anything outlined below.

Thanks again for your continued support and referrals!


Time To Talk Taxes

In Canada, and certainly in the large urban centres, there are few topics that get more press than real estate these days. It seems that few conversations are capable of lasting more than a single digit number of minutes before some aspect of the topic arises.

Much of the talk is about how action should be taken to rein in rising prices — and to be fair, even those who currently own property are part of this group, as many are parents who would one day like to see their adult children living in homes of their own.

According to a new study by the Fraser Institute, the average Canadian family spent more on taxes in 2016 than any other one thing.

The study cites average family earnings in 2016 as $83,105. Housing costs, which considered both rents and mortgage payments, combined with food and clothing, totaled $31,069.

Total taxes came to $35,283.

Housing costs alone stood at 22.1% of household costs, yet taxes took a 42.5% share.

While taxes are important, as of course they fund many critical public services that we rely on, there is still some question as to the return on investment of our tax dollars.

Perhaps there is a certain sense of futility we feel when it comes to changing taxation in any way, and perhaps that is why there are few rallies to reduce taxes, or to encourage more efficient use of tax dollars, as compared to rallies for action on affordable housing.

The level of futility seems to be growing when it comes to real estate though. And no doubt it is always a concern when governments do take specific actions in a free market society, as often those actions have unintended consequences.

In any event, it would be interesting if, instead of discussing real estate, an equal amount of time, energy, and media attention focused on where our tax dollars go, and why the government requires so many of them.

Location, Location, Location

The true costs of commuting are often overlooked during the home-buying process. Few homebuyers fleeing city-living for the suburbs ever make the advance effort of spending a dark winter’s week purposely engaging in what will be their new commute during peak travel times. Instead it is usually a Sunday afternoon drive that leads them to their new home. And when the reality of the daily commute from Monday to Friday takes effect, it can be quite painful to adjust to.

Having done a bit of research at www.caa.ca around the cost of commuting, a fair figure to use is 45 cents per kilometre. With the average commute at 40 km for many Canadians, this is a $36 daily cost, excluding parking. Aside from the financial cost, there is the social and emotional cost of spending an average of one hour per day alone in a car to consider.

Admittedly there are public transport options that save money, although this is often in exchange for even more time sacrificed due to less than perfect public transit solutions in many suburban areas. Also a consideration is the inflexibility with transit of fitting errands, especially child related errands, into the commute.

Ten hours per week spent commuting is ten hours not invested in…

  •     Socializing
  •     Finding a mate (if this is a goal)
  •     Having children (if this is a goal)
  •     Raising children
  •     Relaxing (absence of children)

Ten hours per week goes a long way.Some might be inclined to work those extra two hours, which even at a reasonable $20 per hour is an extra $10,400 per year gross income.Less the expenses of commuting: $7920 ($36 x 220 working days).The extra earnings, combined with the added savings, may well make staying closer to your workplace the more affordable option.

Perhaps, after deeper reflection, spending the hours focused on career or on the social side of life, rather than commuting is the sensible plan.If we apply this math to a double-income household, and were the wage closer to $25 per hour for those extra two hours per day, the purchasing power increases that much more. Food for thought during today’s hour-long commute.

Did you know…
Only 23% of Canadians know their credit score, and just 26% knew their credit rating at the time they applied for a mortgage, reports a recent Equifax survey. A good credit score can be a major negotiating tool in getting lower interest rate mortgages from financial institutions. The study also found that 10% of Canadians surveyed say it’s okay to inflate your income when applying for a mortgage. And 9% say they have lied on credit card or mortgage applications. The numbers came as a shock to Equifax officials, given that the July survey of 1,500 Canadians was really aimed at gauging their concerns about protection of personal data.
Homeowner Tips Fall Lawn Care:
What you do for your lawn during the fall will have a great impact on what your lawn will look like next spring. There are four simple steps you can take to help ensure your lawn will be healthy, green and the envy of the neighbourhood next year:

  • Aerate. This means to puncture your lawn with small holes throughout to allow the fertilizer, sunlight, water and important nutrients that grass needs to grow deep within the ground;
  • Fertilize. Basically this means feed your lawn before it goes to sleep for the winter;
  • Overseed. This is when you spread new grass seed all over your existing lawn with a spreader; and
  • Mow. In November, mow your lawn one more time as short as you can without scalping your lawn. This will help all the other steps above work better.

22 Sep

More proposed new mortgage rules may effect mortgage refinances.

General

Posted by: Anne Martin

Be prepared!

The Office of the Superintendent of Financial Institutions (OFSI) is proposing more new mortgage rules that may come into effect October 2017, exactly the same time of the year that the last big changes were made in 2016.

The last round of changes affected first time buyers the most because of the increase in the qualifying interest rate for insured purchases, however, the most prominent change in the proposed rules is an increase in the qualifying rate for ALL mortgages, including refinances.

The qualifying rate is used as a “stress test” to confirm that the borrower will still be able to afford the mortgage should interest rates increase significantly in the following years.

This will affect all mortgage borrowers because if you had less than 20% down payment when you bought the home, you had to qualify for the mortgage at the Bank of Canada rate, now you will have to qualify at the Bank of Canada rate, or something similar again when your home has increased in value and/or you would like to refinance to increase your mortgage amount.  This can significantly reduce your borrowing potential and impact your current and future plans.

Geoff Lee of DLC GLM Mortgage Group based in Vancouver, BC tells us more.  http://ow.ly/57SY30fmu6h

If you are considering a refinance of your current home mortgage, give me a call now.  Consultations are free!  Anne Martin 705-791-6683

18 Sep

Residential Real Estate Statistics for Barrie, Ont. August 2017

General

Posted by: Anne Martin

“The housing market is becoming more balanced in comparision with earlier this year.  In this changing market, it’s important you use your local, professional REALTOR® for your real estate needs.”  -says Rob Alexander, 2017 President, Barrie & District Association of REALTORS® Inc. (BDAR)

*The Barrie and District Association of Realtors changed to a new data systems, therefore, statistics may be approximate.

City of Barrie

In the City of Barrie detached homes in August 2017 sold for an average selling price of $515,922 which is an increase of 14% over August 2016.  With townhouses, link and semi-detached homes selling for an average of $380,862, meaning an average increase of 11% over August 2016.

Surprisingly, condo sales averaged a 5% increase over August 2016 with an average price of $330,942.  This is a contrast to Toronto who reported a a 21% decrease in sales in the second quarter of 2017 of condo townhouses from 2016, and a 8.3% decrease in sales of condo apartments for the same time period.  Please see http://creastats.crea.ca/treb/mls02_category.html

Essa Township

Detached residential properties sold for an average of $457,470 in August 2017, a decrease of 10% over August 2016.

Innisfil

The Innisfil real estate market showed detached residential properties in decreased by 3% to $529,229.

Oro-Medonte Township

The average selling price for detached homes in Oro-Medonte was $717,906, an increase of 14% over August 2016.

Springwater 

This township showed a whopping increase of 30% to $774,716.

It appears that multiple offer situations and crazy bidding wars have come to a close, for the most part!  This may be due to the new mortgage rules implemented by the federal and provincial governments in the Spring of this year.  Most notably is the decrease in pricing and sales in Toronto most likely due to the new foreign buyer tax implemented by the provincial government.  Oro and Springwater showed a nice increase over last year but will they slow down and become more balanced like the Barrie real estate market shortly?

The Federal government is currently in consultations with mortgage industry professionals to discuss how to best implement new proposed changes to mortgage rules.  How will the effect Barrie and area real estate is important to see in the future.

These proposed changes could slow the market even more and make it difficult for not only home purchasers but also home owners who want to refinance their existing mortgages.  It will be important to see how this plays out!

Information available at https://www.bdar.ca/public/Stats/August2017StatsMediaRelease.pdf