Pat Miazga

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Global News has learned the government’s First-Time Home Buyer Incentive will launch on September 2, days before an expected fall election call.


The new program was announced in the federal budget last March, but some of the key details about how the program would work were left out.


Under the plan, the government would help some first-time buyers by advancing an interest-free loan of up to five per cent of the purchase price of an existing home, and up to 10 per cent of the cost of a new home. This would allow the homebuyers to take out a smaller mortgage and keep their monthly payments lower.


Buyers must repay the incentive after 25 years or if the property is sold, and they can repay it at any time without any penalty.


Global has learned that if the house price goes up, the government will get a percentage of the price increase. And if the house price decreases, Ottawa will shoulder a percentage of the loss.


For example, a new house that is purchased for $100,000 could qualify for a 10 per cent interest-free loan worth $10,000. If the home was later sold for $110,000, the home buyer would need to repay $11,000.


The government says the incentive means that a home that is purchased for $485,000 would save $3,327 a year on mortgage payments.


There are a number of caveats to the program. Buyers must have a household income below $120,000 a year. The amount of the insured mortgage plus the CMHC incentive would be capped at four times the homebuyers’ annual incomes, or up to $480,000. That means the most expensive home you can hope to buy under the plan would be worth somewhere between $500,000 and $600,000, depending on the size of your down payment.


The government has allocated $1.25 billion over three years for the First-Time Home Buyer Incentive. Social Development Minister Jean-Yves Duclos will announce the new details Monday morning in Mississauga.


Critics say this program will not do much to help buyers in Vancouver and Toronto, where average home prices sit at $925,000 and $765,000, respectively. But the government is confident it will help homebuyers even in Canada’s biggest cities.


Having a sharp income cutoff also means that homebuyers with incomes just under $120,000 would have a significant advantage over those just above the threshold, who would not qualify for the CMHC incentive.


After the budget was announced, TD economists estimated the new mortgage incentive could actually help push up home sales and prices by between two and five per cent by 2020. But their calculation also included the expected effect of another budget measure that would allow first-time homebuyers to use up to $35,000 — rather than $25,000 — of their funds held in a registered retirement savings plan (RRSP) for a home purchase without tax consequences.


With files from Erica Alini

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More than $47 million will be spent for a new elementary school on Coquitlam’s Burke Mountain residential area, where Premier John Horgan says development outpaced school growth.


The provincial government has announced a $67-million investment in schools in Coquitlam, creating another 820 spaces for students in the district.


More than $47 million will be spent for a new elementary school in Coquitlam’s Burke Mountain residential area, where Premier John Horgan says development has outpaced school growth.


Another $20 million will be used to upgrade Dr. Charles Best Secondary, Panorama Heights Elementary and Westwood Elementary, providing almost 400 seats for students.


The Burke Mountain school and upgrades to the high school and Panorama Heights are expected to be complete by 2021, while the addition to Westwood school should be finished by next year.


Education Minister Rob Fleming said there are currently 110 portables in the district, and just one elementary school has been built in the past decade.


Horgan says his government has committed $1.1 billion for new schools, seismic upgrades or land purchases since 2017.


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Vancouver is certainly pricey, but average per-square-foot price for a downtown condo pales in comparison with some global cities

We all know Vancouver is an extremely expensive real estate market – especially in terms of affordability, when compared with local average incomes. But even Vancouver's high average per-square-foot condo price is relatively modest compared with some cities around the globe.


Vancouver, being a young city with a relatively underdeveloped housing market, tends to have much more space in condos than a lot of expensive world cities. This brings down the average price per square foot – so you get a lot more condo for your buck.


Real estate website Point2Homes has published an analysis of condo prices per square foot in 11 pricey real estate markets around the world – Vancouver, London, New York, San Francisco, Singapore, Paris, Hong Kong, Tokyo, Zurich, Geneva and Monaco.

 


Point2Homes looked at the price of a typical 185-square-metre (1,831-square-foot) condo in downtown Vancouver on its website, which it found to be a whopping $2,660,000. That comes in at $14,378 per square metre ($1,452 per square foot).


The analysts also found that the average price across all downtown Vancouver condos is $11,605 per square metre ($1,078 per square foot).


That number may be high, but it pales in comparison with Monaco, where the equivalent large downtown condo would cost nearly $14.9 million. In this European resort city, the average downtown condo costs $82,766 per square meter, or $7,689 per square foot.


Hong Kong was found to be the second most-expensive downtown condo market, in terms of price per square metre, followed by London, Singapore and New York.


In fact, on a cost-vs-size basis, Vancouver was the least-pricey downtown condo market of the 11 cities studied.

The study authors wrote, “The results show that Vancouver might be expensive, but only for Vancouverites. The other cities in our analysis completely eclipsed Canada’s most exorbitant market.”

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Poloz Says Mortgage Market Should Offer More Options

In a speech early this week, Bank of Canada Governor Stephen Poloz said that it is time for some fresh ideas for Canada's mortgage market. He suggested that changes could include encouraging longer than 5-year duration fixed-rate mortgage loans, the creation of a market for private mortgage-backed securities and the launch of shared-equity mortgages for first-time homebuyers proposed in the March federal budget.

Taking these in turn, only two percent of all fixed-rate loans issued in 2018 had durations longer than five years. For borrowers, this would mean less interest-rate risk if they dealt with fewer renewals; however, this is not the full story.

Firstly, 65% of all 5-year mortgage holders break their mortgage by around month 33. Also, some banks and many mortgage brokers offer fixed-rate loans with durations of 7, 8, or even 10 years. However, the borrower pays dearly for this insurance against rising rates. Since the introduction of mortgage stress tests, many borrowers have trouble qualifying for loans as it is. Most want lower, rather than higher, monthly payments and demand for longer-duration mortgages is so low because they cost a full 100 basis points or more above existing 5-year mortgage loans. Besides, interest rates have been low and even falling over most of the period since 1982. Fear of significant rate spikes has diminished dramatically.

Poloz agrees there is some momentum in Canada towards the creation of a private market for mortgage-backed securities. He said it would provide a more flexible source of long-term funds for mortgages not insured by CMHC. To the extent that enhanced sources of capital would reduce the cost of funding for lenders, it might reduce the rate spread between 5-year and longer-duration mortgages, making them more attractive. But, again, perceived rate risk and the actual less than 5-year duration of most mortgages begs the question of why Poloz is providing an answer to a question no one is asking.

Indeed, data show that Millennials in Canada are buying homes in Canada's most expensive cities. Royal Bank economists found that "apart from a short-lived slowdown in 2015 resulting from changes in the temporary foreign worker program, the population aged 20-to-34 in Vancouver, Toronto and Montreal has grown solidly over the last dozen years. ...The inflow of millennial immigrants is poised to grow in the coming years. Canada will increase its annual immigration target from 330,000 in 2019 to 350,000 in 2021, and our largest cities will likely get the lion’s share of newcomers. In recent years, Vancouver, Toronto and Montreal together welcomed approximately half of all new immigrants aged 20-34."

Finally, the shared-equity mortgage for first-time homebuyers may well prove to be unpopular. A similar program was offered in British Columbia a few years ago, and there were very few takers.

The BC Home Owner Mortgage and Equity Partnership program, introduced in late 2016, was cancelled effective March 31, 2018, due to lack of interest. The province anticipated that the program would provide 42,000 loans over three years. However, as of January 31, 2018, there were fewer than 3,000 loans approved.

The new federal program will provide a larger downpayment for first-time buyers, but it only applies to homes priced just over $500,000 or less, which might help in some parts of the country, but in higher-cost regions homes that cheap are slim pickings.

Canadians don't want to share the equity gains in their homes, as most first-time buyers don't imagine that their home equity could decline. Governor Poloz, himself, forecast in the same speech that he's confident Canada's housing market will return to growth later this year. Population and job growth has been rapid pointing to the resumption of growth in depressed housing markets later this year.

Poloz is a champion of the B-20 guidelines, saying they have done what they were intended to do--remove the froth from bubbly housing markets. During the press conference following his speech, reporters asked if the governor would support a reduction in the roughly 200 basis point spread between the qualifying rate and the contract rate to which he responded in essence-- a resounding, no.


Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

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Metro Vancouver home sales in 2018 were the lowest annual total in the region since 2000.

The Real Estate Board of Greater Vancouver (REBGV) reports that sales of detached, attached and apartment properties reached 24,619 on the Multiple Listing Service® (MLS®) in 2018, a 31.6 per cent decrease from the 35,993 sales recorded in 2017, and a 38.4 per cent decrease compared to the 39,943 residential sales in 2016.

Last year’s sales total was 25 per cent below the region’s 10-year sales average.

“This past year has been a transition period for the Metro Vancouver housing market away from the sellers’ market conditions we experienced in previous years,” Phil Moore, REBGV president said. “High home prices, rising interest rates and new mortgage requirements and taxes all contributed to the market conditions we saw in 2018.”

Home listings in Metro Vancouver reached 53,614 in 2018. This is a 1.9 per cent decrease compared to 54,655 homes listed in 2017 and a 6.9 per cent decrease compared to the 57,596 homes listed in 2016.

“The supply of homes for sale will be an important indicator to follow in 2019. We’ve had record building activity in recent years and many projects will complete soon. This will provide additional housing options for home buyers across the region,” Moore said.

The MLS® HPI composite benchmark price for all residential homes in Metro Vancouver ends the year at $1,032,400. This is a 2.7 per cent decrease compared to December 2017.

“As the total supply of homes for sale began to accumulate in the spring, we began to see downward pressure on prices across all home types throughout the latter half of the year,” Moore said.

The benchmark price of detached homes in the region declined 7.8 per cent over the last 12 months and 7.3 per cent since June 2018. Apartment homes increased 0.6 per cent over the last 12 months and have declined 6.4 per cent since June 2018. The benchmark price for townhomes in Metro Vancouver have increased 1.3 per cent since December 2017 and have decreased 5.3 per cent over the last six months.

December summary

REBGV reports that residential home sales in the region totalled 1,072 in December 2018, a 46.8 per cent decrease from the 2,016 sales recorded in December 2017, and a 33.3 per cent decrease from November 2018 when 1,608 homes sold.

Last month’s sales were 43.3 per cent below the 10-year December sales average.

There were 1,407 detached, attached and apartment homes newly listed for sale on the MLS® in Metro Vancouver in December 2018. This represents a 25.6 per cent decrease compared to the 1,891 homes listed in December 2017 and a 59.3 per cent decrease compared to November 2018 when 3,461 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,275, a 47.7 per cent increase compared to December 2017 (6,958) and a 16.5 per cent decrease compared to November 2018 (12,307).

For all property types, the sales-to-active listings ratio for December 2018 is 10.4 per cent. By property type, the ratio is 7.1 per cent for detached homes, 12 per cent for townhomes, and 14.2 per cent for apartments.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

Sales of detached homes in December 2018 reached 348, a 43.6 per cent decrease from the 617 detached sales recorded in December 2017. The benchmark price for a detached home is $1,479,000. This represents a 7.8 per cent decrease from December 2017 and a 1.4 per cent decrease compared to November 2018.

Sales of apartment homes reached 535 in December 2018, a 34 per cent decrease compared to the 1,028 sales in December 2017. The benchmark price of an apartment home is $664,100. This represents a 0.6 per cent increase from December 2017 and a 0.6 per cent decrease compared to November 2018.

Attached home sales in December 2018 totalled 189, a 49.1 per cent decrease compared to the 371 sales in December 2017. The benchmark price of an attached home is $809,700. This represents a 1.3 per cent increase from December 2017 and a 1.1 per cent decrease compared to November 2018.

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The Government has made changes to the Speculation Tax and I wanted to make sure you are aware of those changes this morning.

The CBC reported that the B.C. government made a number of changes to its proposed speculation tax which will reduce both the number of British Columbians paying the tax and the amount they'll pay.

The tax, first announced during February's budget, was to be assessed at 0.5 per cent of a vacant property's assessed value this year and two per cent in 2019.

This morning, B.C. Finance Minister Carole James announced the tax would remain at 0.5 per cent for properties owned by B.C. residents but would now only rise to one per cent for out-of-province Canadian residents, and still remain at two per cent for foreign investors.

The government also said the tax would no longer apply to properties in the Gulf Islands, Parksville, Qualicum Beach or rural Fraser Valley.

The tax will still apply in the following areas:

Metro Vancouver, Chilliwack, Abbotsford and Mission (excluding Bowen Island).
The Capital Regional District (excluding the Gulf Islands).
The municipalities of Nanaimo, Lantzville, Kelowna and West Kelowna.

The government said a tax credit would make homes worth less than $400,000 exempt for British Columbians only, along with those rented for more than six months of the year.

Regards,

Peter D. Morris
Greenstead Consulting Group
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Effective January 1, 2018, home buyers who don’t require mortgage insurance — those with a down payment of 20 per cent or more — must qualify for their mortgage at a higher rate

This new stress test won’t apply to people renewing their uninsured mortgage.

Canada’s Office of the Superintendent of Financial Institutions (OSFI) announced these rule changes today. Draft changes were released in the summer for public feedback. (The Canadian Real Estate Association submitted this response to the draft rules in August on behalf of REALTORS® across the country.)

Under the new rules, the minimum qualifying rate for uninsured mortgages will be the greater of the Bank of Canada’s five-year benchmark rate or the contractual mortgage rate plus two per cent.

OSFI will also require lenders to enhance their loan-to-value (LTV) limits and restrict certain lending arrangements designed to circumvent LTV limits.

These changes apply to all federally regulated financial institutions.

This is the seventh time since 2008 that the federal government has made mortgage policy changes.

Read the government’s full announcement here.

Economic analysis from the BC Real Estate Association (BCREA):

“The impact of the new stress test requirement will be to lower the purchasing power of households by up to 20 per cent. Like past tightening of mortgage regulations, we anticipate that the market impact will be sharp but temporary. In the past, we’ve seen home sales decline in the three to nine months following the implementation of tighter mortgage lending standards, with the severity of the impact fading within one year. However, these new regulations impact a larger pool of mortgages and so the impact could be more significant than in the past,” said Cameron Muir, BCREA chief economist

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As the CRA heads to court to obtain data on presale condo buyers and sellers, some observers say the provincial government could cool speculation in the presale market.

DARRYL DYCK/THE CANADIAN PRESS

A Federal Court judge has approved at least one court order that will require a British Columbia developer to turn over information to tax officials about people who bought and flipped condo units before or during construction.

And several similar applications are under way, reflecting the federal government's efforts to crack down on potential tax cheating in the presale market.

A July 25 Federal Court order requires the developers of the Residences at West, a Vancouver condo project at 1738 Manitoba St., to provide the Canada Revenue Agency (CRA) with documents related to presale flips, also known as assignments, in the building, including proof of payments and correspondence between the developers and people who buy the assignments.

 

That order followed a June 29 application from the federal government.

In September, the Minister of National Revenue applied for court orders related to One Pacific, a Concord Pacific project, and Telus Gardens, a downtown project developed by Westbank Corp.

 

Both developers said they would comply with the request for documents.

"Customer information is protected by privacy laws and is not at the developer's liberty to disclose unless ordered by the Court," Matt Meehan, senior vice-president of planning at Concord Pacific Developments Inc., said in an e-mail.

"To protect our customers' information and ensure any release will be compliant with the law, we have asked CRA to obtain a court order, which we will adhere to."

In an e-mailed statement, Westbank said it would comply with the minister's application.

The CRA is investigating potential tax cheating in the presale market.

 

Developers presell units in projects to obtain bank financing. Those sales agreements can be "assigned," or flipped, to somebody else before the building is finished.

A unit may be flipped several times before a project is completed. But only the transfer of legal title from the developer to the final purchaser is registered with the B.C. land title office.

That means the CRA does not know the identities of any buyer but the final one, and has no way to check whether the others have paid applicable taxes on those transactions.

The provincial government last May announced new regulations designed to limit assigning: Sellers have to consent to the transfer of the contracts, and any resulting profit must go to the original seller. But those new rules apply to single-family homes, not condo presales.

As the CRA heads to court to obtain data on presale buyers and sellers, some observers say the provincial government could cool speculation in the presale market – and support federal tax-enforcement efforts – by changing reporting requirements.

Presale purchasers may include people who are not Canadian residents and whose profit from flipping a presale contract would be subject to a federal withholding tax, said Richard Kurland, a Vancouver immigration lawyer.

 

He used the example of a person from Iran who buys a presale contract for $100,000 and sells it for $125,000 a month later. Under the Income Tax Act, that profit – because it went to someone who is not a tax resident of Canada – would likely be subject to a 25 per cent withholding tax, he said.

"If nobody knows that you're from Iran and not a tax resident, and nobody withholds the money, you just walked off with $6,000 tax-free," he said.

If information on buyers' identities were routinely provided, the agency could more readily check to determine if, for example, anyone was claiming the principal-residence exemption on more than one property, Mr. Kurland said.

Asked if the CRA would like the province to make changes such as requiring routine disclosure of the identities of presale buyers, agency spokesman Bradley Alvarez said in an e-mail that, "any additional information, including that obtained from other governments and third parties, enhances the CRA's ability to detect non-compliance."

The CRA has found some flips are reported incorrectly or not at all and "the CRA welcomes any endeavours to obtain any information that can assist the Agency in detecting non-compliance."

Developers support the CRA's goals, but have to take privacy regulations into account, said Anne McMullin, president of the Urban Development Institute.

"It's not the developers not wanting to hand over information, it's, 'Let's do this safely,' because of privacy laws," Ms. McMullin said.

The NDP, which came to power after the May election, had said while in opposition that the Liberals were not doing enough to curb speculation in B.C. real estate.

In its election campaign platform, the NDP promised to set up a multi-agency task force to fight tax fraud and money laundering in the B.C. real estate marketplace.

Finance Minister Carole James was not available for an interview.

In a statement, her office said the province is monitoring the federal government's court action, and tax fraud is "something that is taken very seriously."

The B.C. government is working on a comprehensive housing strategy, and any policy or legislative changes will be made public once that strategy is developed, the statement added.

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Is It Time To Lock In A Variable Rate Mortgage?

 

 

 

 

 

 

 

 

 

Approximately 32 per cent of Canadians are in a variable rate mortgage, which with rates effectively declining steadily for the better part of the last ten years has worked well.

Recent increases triggers questions and concerns, and these questions and concerns are best expressed verbally with a direct call to your independent mortgage expert – not directly with the lender. There are nuances you may not think to consider before you lock in, and that almost certainly will not be primary topics for your lender.

Over the last several years there have been headlines warning us of impending doom with both house price implosion, and interest rate explosion, very little of which has come to fruition other than in a very few localised spots and for short periods of time thus far.

Before accepting what a lender may offer as a lock in rate, especially if you are considering freeing up cash for such things as renovations, travel or putting towards your children’s education, it is best to have your mortgage agent review all your options.

And even if you simply wanted to lock in the existing balance, again the conversation is crucial to have with the right person, as one of the key topics should be prepayment penalties.

In many fixed rate mortgage, the penalty can be quite substantial even when you aren’t very far into your mortgage term. People often assume the penalty for breaking a mortgage amounts to three months’ interest payments, which in the case of 90% of variable rate mortgages is correct. However, in a fixed rate mortgage, the penalty is the greater of three months’ interest or the interest rate differential (IRD).

The ‘IRD’ calculation is a byzantine formula. One designed by people working specifically in the best interests of shareholders, not the best interests of the client (you). The difference in penalties from a variable to a fixed rate product can be as much as a 900 per cent increase.

 

The massive penalties are designed for banks to recuperate any losses incurred by clients (you) breaking and renegotiating the mortgage at a lower rate. And so locking into a fixed rate product without careful planning can mean significant downside.

Keep in mind that penalties vary from lender to lender and there are different penalties for different types of mortgages. In addition, things like opting for a “cash back” mortgage can influence penalties even more to the negative, with a claw-back of that cash received way back when.

Another consideration is that certain lenders, and thus certain clients, have ‘fixed payment’ variable rate mortgages. Which means that the payment may at this point be artificially low, and locking into a fixed rate may trigger a more significant increase in the payment than expected.

There is no generally ‘correct’ answer to the question of locking in, the type of variable rate mortgage you hold and the potential changes coming up in your life are all important considerations. There is only a ‘specific-to-you’ answer, and even then - it is a decision made with the best information at hand at the time that it is made. Having a detailed conversation with the right people is crucial.

It should also be said that a poll of 33 economists just before the recent Bank of Canada rate increase had 27 advising against another increase. This would suggest that things may have moved too fast too soon as it is, and we may see another period of zero movement. The last time the Bank of Canada pushed the rate to the current level it sat at this level for nearly five full years.

Life is variable, perhaps your mortgage should be too.

As always, if you have questions about locking in your variable mortgage, or breaking your mortgage to secure a lower rate, or any general mortgage questions, I’m here to help!

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Recent articles in the Vancouver Sun deal with 2 different strata developments, both with their own set of very difficult issues. The articles I refer to are at:

http://vancouversun.com/news/local-news/dan-fumano-vancouver-real-estate-developer-faces-mounting-lawsuits-extradition-to-u-s-on-fraud-charges

https://www.pressreader.com/canada/vancouver-sun/20170908/281633895392621

I do not know what will happen to the buyers who purchased a pre-sold unit in these buildings, but the articles remind me of the trust placed with the developer in these types of situations. The buyer hands over money and waits for a few years. Most times the project gets built and the buyer receives their units, but not all the time.

I am often asked about pre-sale purchases, and my first questions are always “Who is the developer, who are their directors, what is their track record, have they been around a while and will they be here in a few years?”  I have never seen articles such as these from some of Vancouver’s top developers, such as Polygon Homes, Bosa Construction, Bosa Developments or a number of other well-known developers. All developers have issues over the years, but how they respond is the key.

While location is the key in buying real estate, buying from the correct developer is equally important.

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In the wake of the Bank of Canada's move Wednesday to boost a key interest rate, Canada's big banks have boosted their prime rates.

RBC was first off the mark, followed quickly by the others, raising their prime rates to 3.2 per cent from 2.95 per cent, where they had been since the central bank's last rate increase in July.

Canadian consumers can expect to feel some financial effects following the Bank of Canada's decision.

 

"It's going to raise borrowing costs a little bit for everyone," Eric Lascelles, chief economist at RBC Global Asset Management, told CBC News Network.

Here's where and how consumers could feel the hike:

1. Mortgages

Consumers with variable-rate mortgages, also known as adjustable-rate mortgages, will feel the increase in the overnight rate quickly now that some financial institutions have begun pushing up their lending rates.

Canadians with a fixed-rate mortgage won't have to deal with the impact until it's time to renew at the end of their fixed term. 

"Anyone who currently has a variable rate mortgage should consider if now is a good time to lock into a fixed-rate mortgage," said James Laird, co-founder of Ratehub.ca and president of CanWise Financial mortgage brokerage.

Laird also said anyone currently looking for a home should get a pre-approval that guarantees today's fixed rates for 120 days.

 

2. Lines of credit/home equity lines

 
In a report issued Sept. 1, RBC economist Laura Cooper said Canadian households added $10 billion to $12 billion to their consumer credit balances in each of the past four quarters.
 

"Borrowing from banks accounted for the bulk of the rise led by personal lines of credit, notably home equity lines of credit," she said, adding that this component made up more than half the rise in the second quarter of 2017, its greatest contribution since 2011.

Against that growth in consumer credit, economists say Canadians will feel the biggest impact, after their variable-rate mortgages, in their lines of credit, which are tied to the prime rates charged by banks.

 

3. Credit cards

The bulk of credit card interest is charged at a fixed rate, although some cards do carry a variable rate. So it can be worth checking the rate on any cards you use.

However, if you begin to miss payments on your card debt, some cards will begin charging a higher interest rate on your outstanding balance.

4. Student loans

Student loan interest rates can be either fixed or variable. As with mortgages, somebody repaying a variable-rate student loan could see an immediate hit from the latest Bank of Canada hike, while those on fixed rates won't see the bump until it is time for renewal.

The road ahead

Cooper pointed out in her report on credit growth that the country's heavy borrowing is likely to subside as support for monetary tightening increases.

"A notable shift in major housing markets alongside elevated household indebtedness and tighter financial conditions are likely to dampen credit growth and eventually temper consumer spending growth," Cooper said in the report.

"We anticipate that households on the whole will be able to absorb rising costs given an expected gradual pace of policy tightening and ongoing hiring gains. But as is the case with all goods things — the borrowing binge is likely coming to an end," she said.

 

**** Posted by 

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Unlike the experience of buying a first home, when you're looking to move-up, and already own a home, there are certain factors that can complicate the situation. It's very important for you to consider these issues before you list your home for sale. 

Not only is there the issue of financing to consider, but you also have to sell your present home at exactly the right time in order to avoid either the financial burden of owning two homes or, just as bad, the dilemma of having no place to live during the gap between closings.


Mistake 1: Rose-colored glasses


Most of us dream of improving our lifestyle and moving to a larger home. The problem is that there's sometimes a discrepancy between our hearts and our bank accounts. You drive by a home that you fall in love with only to find that it's already sold or that it's more than what you are willing to pay. Most homeowners get caught in this hit or miss strategy of house hunting when there's a much easier way of going about the process. A Buyers House Hunting plan will take the guesswork away and will help to put you in the home of your dreams. This type of program will cross-match your criteria with ALL available homes on the market and supply you listings by email. A program like this helps homeowners take off their rose-colored glasses and, affordably, move into the home of their dreams. 

Mistake 2: Failing to make necessary improvements


If you want to get the best price for the home you're selling, there will certainly be things you can do to enhance it in a prospective buyer's eyes. These fix-ups don't necessarily have to be expensive. But even if you do have to make a minor investment, it will often come back to you ten-fold in the price you are able to get when you sell. It's very important that these improvements be made before you put your home on the market. If cash is tight, investigate an equity loan that you can repay on closing. Keep in mind that I have years of experience in Home renovations and have a keen eye to point out easy improvements


Mistake 3: Not selling first


You should plan to sell before you buy. This way you will not find yourself at a disadvantage at the negotiating table, feeling pressured to accept an offer that is below-market value because you have to meet a purchase deadline. If you've already sold your home, you can buy your next one with no strings attached. If you do get a tempting offer on your home but haven't made significant headway on finding your next home, you might want to put in a contingency clause in the sale con-tract which gives you a reasonable time to find a home to buy. If the market is slow and you find your home is not selling as quickly as you anticipated, another option could be renting your home and putting it up on the market later - particularly if you are selling a smaller, starter home. You'll have to investigate the tax rules if you choose this latter option. Better still, find a way to eliminate this situation altogether by getting your agent to guarantee the sale of your present home (see point number 5 below). 

Mistake 4: Failing to get a pre-approved mortgage


Pre-approval is a very simple process that many homeowners fail to take advantage of. While it doesn't cost or obligate you to anything, pre-approval gives you a significant advantage when you put an offer on the home you want to purchase because you know exactly how much house you can afford, and you already have the green light from your lending institution. With a pre-approved mortgage, your offer will be viewed far more favorably by a seller - some-times even if it's a little lower than another offer that's contingent on financing. You can lock in the lowest rate for a 90-120 day period, so that if rate do go up, you will retain the lowest rate. Don't fail to take this important step. 

Mistake 5: Failing to coordinate closings


With two major transactions to coordinate together with all the people involved such as mortgage experts, appraisers, lawyers, loan officers, home inspectors, home insurance agents or pest inspectors the chances of mix-ups and miscommunication go up dramatically. To avoid a logistical nightmare ensure you work closely with your agent.

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On July 12, 2017 the Bank of Canada announced that they increased their key interest rates by 0.25 percentage points, to 0.75%. All 5 major Canadian banks in turn raised their prime interest rates from 2.7% to 2.95%. The Royal Bank of Canada was the first to implement this increase, followed closely behind by TD Canada Trust, Bank of Montreal, Scotiabank and CIBC. 


Homeowners will inevitably feel this shift, some more than others. Those who purchased a property with a variable mortgage plan will see the increase in interest rates immediately, where as those who are on a fixed term mortgage wont actually see any changes until their term ends. 

 

Find out the full scoop on the increase in key and prime interest rates here.

 

Find out how this is affecting Canadian mortgages, and other loans here. 

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Check it out! 

The RE/MAX 2017 Recreational Property Report is here

 

 

In this years report: 

- Over a quarter of Canadians with children under the age of 18 would consider selling their primary residence in the city in which they live to help finance the purchase of a cottage or cabin


- Young families are fueling demand: 73 per cent of regions surveyed reported that young families with children drive demand for recreational property


- Buyers are increasingly selling their homes in Canada's two largest urban centres and using the equity from the sale to purchase a cottage, cabin or ski chalet


- Almost two-thirds (65 per cent) of Canadian millennials (18-34 years old) would consider buying a recreational property in the next 10 years


- Peace and quiet was rated as the most important feature to Canadians when considering spending time at a cottage or cabin



Check out the full report below!

Enjoy,


Pat Miazga 















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*** Articles, information and writing bJames Bell - Owner/Operator of Solid State Inspections Inc. ***

 

 

 

Spring is a great season for renewal in your home. It is a time to clean out after a long winter and get your house and yard ready for warmer months ahead. Regular home maintenance is necessary to avoid major unexpected costs. Maintenance left undone can be a major detriment to a homes value in the future and creates a lot of red flags in a potential Home Inspection.

Below you'll find tips and tricks that are useful and relevant to the season ahead! 

 


Tree's and Landscaping

 

When we drive through older neighbourhoods, one of the biggest pleasures is looking at all the mature trees and landscaping while we imagine how nice it would be to drive home everyday under the canopy of majestic trees. Trees and landscaping are beautiful but can have a significant impact on our houses and condos and require regular maintenance. Here are some concerns we as Home Inspectors help our clients understand.

Large Trees

Large shade trees are wonderful for helping our homes stay cool in the summer while still allowing the sun's rays to help heat our home in the winter. If you are buying a house with large trees nearby, every fall you need to clean the leaves out of the gutters. Failure to do this can cause concentrated water in winter rains and snows to run off in unexpected places and possibly enter your home or basement. During a home inspection, we check to see if the gutters are free of debris and advise our clients if maintenance is needed. If you are not comfortable with cleaning your own gutters, there are many products you can add to your gutters to help keep leaves out.

Falling or waving branches can physically damage our homes and overhead electrical wires. Wind driven rains, particularly on the West Coast, can then drive water into damaged areas creating more damage. Tree branches contacting buildings also provide a path for unwanted critters to access our roof where they may find access to warm attic spaces. During home inspections, we recommend trimming tree branches back from buildings to avoid damage.

Tree root networks can be as expansive as the branch networks above. Roots can visually affect things near the surface like walkways and driveways, but they can also do costly hidden damage to water pipes, gas lines, and foundation drainage. In worst cases, roots can crack and shift foundation walls causing thousands of dollars in damage. Unfortunately, underground damage from trees cannot be seen a home inspection but if you have trees branches that reach your home, you risk having tree roots there as well.

Smaller Bushes and Vegetation

Smaller bushes and shrubs need to be trimmed back from our home’s siding materials to encourage proper drying, prevent mechanical damage, and to help prevent critter access. Vines can be particularly bad as they inhibit drying of surface materials, and can cause damage where vine's creepers grab the building. We always recommend removal of wall climbing vines in home inspections

Smaller bushes and flowering plants have a tendency to overgrow their space much sooner than larger trees. Don’t be afraid to remove and replace these regularly. Not only will you help prevent damage to your home, but you will have a fresh look to your landscaping every few years.

Garden Beds, Grading, and Lawns

Soil is an excellent conductor of moisture and should never be in contact with the siding of our homes. Even if you have non-organic siding like vinyl, stucco, or brick, you need to keep soil off the siding as wicking water will get into plywood sheeting behind the surface or can cause freeze/thaw cracking in the materials. Garden beds and lawns always need to be 6-8” below the level of siding against our homes to prevent water from wicking or splashing up in rains. During home inspections, if we cannot see 6-8” of concrete foundation visible from grade level we alert our clients of the possibility of hidden damage.

Your lawn and property needs to be sloped to direct water away from buildings or towards appropriate drainage. Water that is allowed to flow towards buildings will enter in foundation cracks or potentially cause foundation shifting. During home inspections, we will report on grading that runs towards the building and advise improvements.

Final Thoughts

Good landscaping is an important part of the curb appeal of your home but like many other systems of your home, it has a regular maintenance schedule that you need to keep up with or you can run into large costs in the future. If you are looking to buy a new home, a professional home inspector will help you to know what maintenance is required now and what to watch for as you own your home into the future.

 

 

 

Spring


Spring is a great season for renewal in your home. It is a time to clean out after a long winter and get your house and yard ready for warmer months ahead. Regular home maintenance is necessary to avoid major unexpected costs. Maintenance left undone can be a major detriment to a homes value in the future and creates a lot of red flags in a home inspection.

This maintenance list is not exhaustive or tailored to your home but is a good place to help you get started on maintaining your home:

  • A Special note about Strata’s
    • If you are in a strata, many common exterior maintenance items are covered by your strata fees. We have highlighted common items covered by strata management with a “

Spring Maintenance

  • Make sure your window screens are properly mounted and free of holes
  • Turn back on any outside hose bibs/taps that may have been winterized
  • Prepare your central A/C for the season (remove covers, activate power)
  • Disconnect your humidifier (especially important if you have central A/C as it may cause your A/C to ice up)
  • Clean out your wood burning appliances and fireplaces. Now would be a good time to have the chimney cleaned out too.
  • When heating season is over, turn off your furnace and fireplace pilot lights where and when possible
  • Repair any exterior areas where water may have lowered the grade level next to your home and check your visible foundation for any new cracks ✪
  • Repair and fill any damage to the exterior of your home to prevent pests from entering ✪
  • Repair and paint any trim, fencing, facia that may be in need of service ✪
  • Put some lubrication on door hinges and garage door moving parts 
  • Apply spring fertilizers to the grass ✪ and get the patio furniture out of storage
  • Test the pressure relief valve on the hot water tank to ensure correct operation
  • Flush out your hot water tank to remove sediment
  • While you were at all this organizing, perhaps it is time to clean behind the fridge and the stove, and …


Regular Maintenance

These areas of your home should be checked as frequently as possible regardless of the season.

  • Ensure you have fire extinguishers charged and in proximity to the kitchen 
  • Regularly check stair handrails and all guardrails to ensure they are secure and can hold an adult’s bodyweight in a fall
  • Test your smoke detectors and replace batteries as needed
  • Test your ground fault circuit interrupters (GFCI)’s on your breaker panel or at each outlet to ensure they trip correctly when the test button is pressed.
  • Ensure all your home’s air intakes and exhausts (e.g. dryer vents, furnace air intakes) are not blocked ✪
  • Check and clean the filters in your range hood and ensure the vents are not blocked
  • Replace your furnace filter every 6-8 weeks during heating season and during cooling season if you have central A/C or a heat pump
  • For hot water or steam heating systems, check your expansion tank to ensure it has not become water logged
  • During or after any prolonged rain period, check to ensure drains and weather seals are keeping or draining water as needed to protect your home ✪
  • Monitor caulking in kitchen and baths and maintain as needed

If you have any concerns about maintaining your home for spring, consider calling in your local home inspector to help you learn about your home and regular maintenance.

 

*** Articles, information and writing bJames Bell - Owner/Operator of Solid State Inspections Inc. ***


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"As Pierre Trudeau once said about living so close to the United States "Living next to you is in some ways like sleeping with an elephant. No matter how friendly or even tempered is the beast, one is affected by every twitch and grunt”. That statement, said almost 40 years ago, still holds very true today.


Our economies are even more intertwined now and it’s no wonder many Canadians are paying close attention to policymakers and politicians south of the boarder, particularly the U.S. Federal Reserve.


The U.S. Federal Reserve recently raised interest rates by 25bps (one quarter of one percent) this month and for the second time in 3 months. It has also stuck to its outlook for two additional rate increases this year while remaining cautious before implementing any further increases. “We have seen the economy progress over the last several months in exactly the way it was anticipated and we have some confidence in the path the economy is on” Fed Chair Janet Yellen said at a recent press conference. Employment numbers in the U.S. continue to look impressive and economic activity is expanding which helps keep the bond market relatively calm with no immediate increases in yields.


What does this mean for you?


For the time being this is good news for Canadians. The lack of bond yield increase in the U.S. has resulted in the Canadian bond prices to remain unchanged as well. If you are looking to get a 5 year mortgage, this means that you shouldn’t see any increases in rates as typically fixed term mortgages are tied to the yields (returns) on Canadian bond prices. Also, no significant changes are expected for variable rate mortgages as it appears the statements made by the U.S Federal Reserve will push the Bank of Canada’s decision to increase our Bank of Canada benchmark rate a little further into the future.''


Courtesy of:


Michael Fortin, 
Mortgage Consultant
Mortgage Alliance


(604) 618-0777 
mfortin@mortgagealliance.com
http://www.mortgagealliance.com/MichaelFortin


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