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Showing posts from December, 2016

Why buy when you can lease

Why buy when you can lease

If you have a closed mortgage, you will incur what is called a pre-payment charge.

If you have a closed mortgage, you will incur what is called a pre-payment charge.

Inheritance is treated as the disposal of an asset and is therefore subject to Capital Gains Tax, currently 25 per cent.

Canada has no Inheritance Tax as such.

Unless buying a new property from a developer, potential purchasers are required to register with an estate agent (realtor).

Vancouver is the most expensive area of Canada for residential property

Vancouver - British Columbia, Canada's westernmost province, is also one of its most beautiful, with glorious mountains, lakes, rivers and beaches.
It has Canada's most temperate climate and some of its friendliest people.

Traditionally, Montreal has had the lowest residential property prices of Canada’s major urban areas.

Traditionally, Montreal has had the lowest residential property prices of Canada's major urban areas.

You can start investing in a real estate investment fund to either start up or diversify your portfolio

generate a passive income stream through careful property holdings, rentals and property management.

generate a passive income stream through careful property holdings, rentals and property management.

Real estate is always out there quietly turning profits for a lot of investors

Real estate is always out there quietly turning profits for a lot of investors

94-year-old woman dies in Scarborough house fire

94-year-old woman dies in Scarborough house fire

Do you pay bills from your credit card?

If that card number changes, notify the company right away to avoid missed payments.

If you’re applying for a mortgage, missing a cellphone bill can sometimes kill an approval.

Even an unnoticed cellphone charge can cause credit-score disaster.

Report from the Canada Mortgage and Housing Corp showed housing starts softening

Canada’s housing market showed some signs of softening in November

B.C. to offer loans to first-time buyers as BoC issues debt warning

when affordability is a bad, the better approach is to pull back, keep renting and save some more.

Cost of house maintenance and upkeep

plumbers, electricians, roofers, foundation repair and much more.

Toronto median total household income can be estimated at about $76K using 2013 Statistics Canada numbers and adjusting them to the 2016 level using recent inflation rates.

First-time buyers don’t have a hope of buying a detached house in Toronto

First-time buyers don’t have a hope of buying a detached house in Toronto without exceptionally good incomes and mega down payments.

In the city of Toronto, a couple with combined gross income of $120,000 can afford a house worth about $650K

Not enough supply causes soaring real estate prices.

The shortage of housing units available to buy – especially fully detached, single-family houses – has been cited by the Canadian Real Estate Association and Toronto Real Estate Board as one factor behind soaring real estate prices.

Toronto is overtaking Vancouver for the title of Canada's most in-demand housing market.

Toronto is overtaking Vancouver for the title of Canada's most in-demand housing market.

real estate is a win-lose environment.

real estate is a win-lose environment.

If your down payment is 20% or more, it’s considered a conventional mortgage and can be amortized over a maximum of 30 years.

Don’t buy unless you’re confident you won’t have to move for at least five years

There are a lot of out-of-pocket expenses that come with buying and selling a house

owning a home would mean an extra $10,000 annually in housing costs.

HSBC has been ordered to pay $59.3m in compensation to borrowers who lost their homes between 2008 and 2012.

If you are concerned that interest rates will rise quickly, you may consider a variable interest rate mortgage that can be converted to a fixed rate at any time within your current term.

Why do you need a pre-approved mortgage?

A pre-approved mortgage gives you important advantages in the home buying process: You know how much you can borrow before starting your home searchYou get a guaranteed interest rate for up to 60 days, even if interest rates go up (with no obligation to accept the mortgage offer)You can narrow your search to homes within your price rangeSellers are more interested in offers from pre-approved buyers

Canada’s National Housing Act mandates that for variable-rate mortgages, the penalty is always equivalent to three months’ interest.

It’s worth breaking your mortgage when you can get a new rate that’s at least two percentage points lower than your current one.

Your mortgage is probably the most complex contract you’ve ever signed.

Make a wrong move and you’ll end up on the hook for penalties of $20,000 or more.

Buying a house can be a problem for so many reasons

Some people change jobs, even cities they live in, often. For them, buying a house can be a problem for so many reasons, including the hassle and commissions of buying and selling.

A short-term mortgage refers to a mortgage with a term of 2 years or less.

Short-term rates are usually lower than long-term rates. A short-term mortgage is ideal if you want to take advantage of lower interest costs and/or expect to repay your mortgage in the near future (for instance, if you are planning to sell your property).

When is mortgage insurance required?

If your down payment is less than 20% of the value of the property, the mortgage is considered a high-ratio mortgage and you must purchase mortgage insurance (this is not the same as mortgage life insurance, which pays off your mortgage in the event of your death).

What is the difference between a closed term mortgage and an open term mortgage?

An open mortgage term can be repaid in part or in full any time without paying a prepayment charge. A closed mortgage contains certain restrictions on the amount you can prepay on your mortgage balance. If you pay off your mortgage before the end of the term, or prepay more than is allowable according to the mortgage prepayment options set out in your Mortgage Loan Agreement, you may have to pay a prepayment charge.

A mortgage down payment is the amount of money you have saved to purchase your home.

You can have as little as 5% of the purchase price amount for a down payment to qualify for a mortgage.

In real estate, above grade means the portion of a home that is above the ground.

Above grade is usually used to describe a room or square footage.  For example, 3 bedrooms above grade means 3 bedrooms that are not in a basement.
Above grade rooms and sizes matter a lot. If you are looking for a home with 4 bedrooms upstairs and a real estate listing showed there were a total of 4 bedrooms, you wouldn’t know if 1, 2 or even 3 of those bedrooms were in the basement! Also, if a total square footage number was given for a home, you might not know that half of it was below grade. This could mean that a home you thought was 1000 ft² on the main floor turns out to only be 500 ft² with a 500 ft² basement!

What is a Co-op?

When you buy a house or a condominium, you are getting real property. When you buy a co-op you are not actually purchasing the physical apartment. You’re buying shares in the cooperative corporation which owns the building in which the apartment is located. You will own the number of shares allocated for that apartment based on its size and location. Instead of the deed you receive when you buy a house or a condo, with a co-op you get a stock certificate and a proprietary lease or occupancy agreement. The lease spells out the rights and obligations of the coop and the shareholder for the use and occupancy of the apartment. The shareholder becomes part owner of the building and has a proprietary lease on a specific apartment.

The interest rate differential (IRD) is your lender’s way of determining how much interest they’ll be losing by letting you break your contract early

One of the biggest drivers of your mortgage penalty is whether you have a variable or fixed mortgage rate.

Fixed rate holders pay the greater of interest rate differential or three months interest, while variable rate holders pay just three months interest.

If you hold a variable rate mortgage, then expect to pay a penalty of three months interest, and if you hold a fixed rate mortgage, then you will pay the greater of three months interest or interest rate differential penalty (IRD).

Breaking your contract for a lower interest rate can save you money over time

Don’t let penalties deter you; first, know the numbers. Breaking your contract for a lower interest rate can save you money over time, depending on the penalty and the size of your outstanding mortgage.

When breaking your mortgage contract early, usually because of a refinance or the sale of your home, you will unfortunately have to pay your lender a penalty called a prepayment penalty.

There is limited downside to obtaining a mortgage pre-approved

You are not obligated to the bank or mortgage broker to whom you received your mortgage pre-approval, and there is no cost. A mortgage pre-approval shows you, the homebuyer, what value of home you can afford, and the mortgage payments associated with various purchase prices. It also guarantees a mortgage rate for a period of time; therefore, protecting you against potential rate increases.

Don’t make low rates your only criterion when choosing a lender

Ask the right questions ahead of time

Cancellation of a mortgage contract involves a penalty

You could be forced to sell your house because you couldn’t afford to live in your house any more.

If you have to sell or refinance before the mortgage term ends, you can be hit with a costly penalty.

Early exit from closed mortgage can cost you a lot

When you buy a house and sign up for a fixed-rate mortgage, you should ask about the cost of getting out early.

Construction of New Affordable Housing Project Underway in Regina

December 19, 2016
by via CMHC News Releases — All Releases

The average new GTA detached home shot passed $1 million

What is the difference between a mortgage interest rate and an APR?

The difference between a mortgage interest rate and an annual percentage rate is that a mortgage interest rate is the cost you pay each year to borrow money for a mortgage. An annual percentage rate reflects the mortgage interest rate and other charges. There are many costs associated with taking out a mortgage. These include:The interest ratePointsFeesOther charges The interest rate is the cost you will pay each year to borrow the money, expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan. An annual percentage rate (APR) is a broader measure of the cost to you of borrowing money. The APR reflects not only the interest rate but also the points, mortgage broker fees, and other charges that you have to pay to get the loan. For that reason, your APR is usually higher than your interest rate.

How to choose the right mortgage term

Mortgage terms vary so that you can take advantages of opportunities that align with your current financial circumstances. There are advantages to both short- and long-term commitments.  TermAdvantagesConsiderationsShortShorter terms typically have lower rates.
You have the option to renew your mortgage more often, taking advantage if interest rates decline.You could find yourself having to renew your mortgage at a higher rate if interest rates increase.
Short-term mortgages are advantageous if you foresee the opportunity to pay off your entire balance in the near future.LongLonger terms provide predictability and stability.Committing to an interest rate for a long period of time may make it more difficult for you to obtain a lower rate if rates drop over time.

Chinatown is one of the Vancouver’s lowest income neighbourhoods.

Repairs and Renovations Coming to Edmonton Affordable Housing

December 16, 2016
by via CMHC News Releases — All Releases

TD Bank raises mortgage rates again

The sales price of a home sold in Canada last month was up 2.3, including gains in Vancouver and Toronto.

Sales in Toronto were down 2.4 per cent, 3.4 per cent in Vancouver.

Sales fell 5.3 per cent in November, the Canadian Real Estate Association said in a statement.

Canadian home sales in November recorded their biggest decline since 2012

Real estate has cycles just like every other investment

Nobody really knows which way the Canadian real estate market is headed from here.

In 1980, Vancouver average home prices dropped over 40 per cent within one year.

From 1989 to 1996 Toronto average home prices dropped 36 per cent.

Many first-time buyers are now looking to rent part of their home

to generate income so they can afford to buy a house.

Mortgage Professionals Canada, the national mortgage broker channel association

Canadian five-year and 10-year bond yields moved slightly higher following the announcement from the U.S. Federal Reserve.

The Federal Reserve signaled as many as three rate increases in the year ahead.

The U.S. central bank cited strong signs of economic growth and expectations that inflation will climb higher as reasons for the rate hike.

B.C. government offers first-time home buyers five-year, interest-free down-payment loans

In the city of Toronto’s detached property class, prices soared 32.2 in November from a year ago to $1,345,962.

Canada’s housing sector is unlikely to be as strong a source for economic growth as compared to before mortgage regulations were recently tightened

When incomes are rising at three per cent and house prices at 20 per cent, that’s not healthy.

Ontario is forecast by CREA to see a 2.7 per cent decline in sales in 2017 but a one per cent increase in prices.

Consumers must now qualify based on the posted five-year fixed rate, now 4.64 per cent, instead of the much lower rate on their contract.

Mortgage rates are rising in response to government and regulatory changes to housing finance rules, as well as higher long-term bond yields that are increasing lender funding costs.

Bank of Canada says new “household vulnerabilities” will be mitigated over time by new housing finance rules, which are expected to slow the housing market.

Nearly a third of recent Canadian homebuyers with so-called high-ratio mortgages wouldn't qualify for their loans under new rules recently implemented by the federal government.

North American stock markets retracted amid news that the U.S. Federal Reserve was hiking interest rates for the first time this year.

Canadian household debt hit a record high in the third quarter

The U.S. Federal Reserve raised interest rates

The U.S. Federal Reserve raised interest rates this Wednesday December 14, 2016 by only a quarter-point—from 0.50% to 0.75%

For the first-time since 2007, Canada will have a lower central bank rate than its southern neighbour.

Repairs and Renovations Coming to Social Housing in Calgary

December 14, 2016
by via CMHC News Releases — All Releases

¼ of homeowners have less than $1,000 in bank — Manulife

Bank of Canada is highly unlikely to raise its interest rates

While homeowners with mortgages like the low interest rates, savers have been punished by the returns they can earn with GICs.

The Federal Reserve interest rate affects long-term interest rates in both the U.S. and Canada

A mortgage calculator can take advantage of the PMT function from Excel

Increasing the supply of housing

TREB’s director of market analysis, Jason Mercer, said Toronto’s house prices are the result of a lack of supply, and future efforts to cool it should focus on increasing the supply of housing, instead of reducing buyers’ ability to borrow.

Up to one million Canadian borrowers may not be able to absorb the increase in their monthly payments if interest rates rise by just one full percentage point.

Statistics Canada reported that the debt-to-disposable-income ratio for the average Canadian is 165%.

That's a record high.

Canada has seen the largest increase in household debt relative to income of any major developed country since 2000

Canada has seen the largest increase in household debt relative to income of any major developed country since 2000

For years Canadian home prices experienced consistent growth, especially in major cities such as Toronto and Vancouver.

For years Canadian home prices experienced consistent growth, especially in major cities such as Toronto and Vancouver.

Home Capital Group Inc. (TSX:HCG)

Home Capital Group Inc. (TSX:HCG), Canada's largest subprime lender with a real focus on the Greater Toronto Area.

Every bubble ends badly. It’s only a matter of time.

Every bubble ends badly. It's only a matter of time.

A lot of first-time buyers–people are worried if they don’t get in today, they’ll be shut out forever.

New condos are still being built as fast as developers can

New condos are still being built as fast as developers can

Bidding wars are still commo

Bidding wars are still commo

Genworth MI Canada Inc (TSX:MIC), the privately held alternative to CMHC

Consulting businesses face many challenges getting started.

One in six canadians couldn't handle a $500 monthly mortgage increase

That boost in bond yields is a big factor in pushing up fixed mortgage rates in Canada

Federal Reserve is going to raise interest rates this Wednesday.

Interest rates are about to rise south of the border

In 2011, the Competition Bureau sued TREB, Canada's largest real estate board, for restricting the ways in which its member agents could release data from the Multiple Listing System.

Toronto Economic Bulletin provides a monthly snapshot of the regional economy, and includes data on labour market information, GDP estimates, real estate activity, retail sales, transportation and city rankings.

Lowe's Canada

Based in Boucherville, Que., Lowe's Canada operates more than 535 corporate and independent affiliate dealer stores under the Rona, Rona-Depot, Ace and Lowe's brand names.

The federal Competition Tribunal ordered the Toronto Real Estate Board must let its member brokers release more home sales data to the public via the internet.

A general rule for prospective home buyers and owners who want to be able to comfortably afford a house is to keep a maximum RLR score in the 60 to 70 range.

That way, they’ll have room to cover housing costs, save for the future and keep some financial flexibility.

Housing economics are very complicated

Housing economics are very complicated

Short-term rental web sites

Airbnb, Expedia.ca, Kayak.com, hotels.com and Orbitz.com.

An Ontario court has said that condominium corporations have the authority to ban unit owners from renting out their properties on services such as Airbnb or Expedia.

Crystallized intelligence - your knowledge of facts and how to perform particular tasks

generally increases through your 50s and 60s,

New Affordable Rental Homes in Brampton Officially Opened

December 9, 2016
by via CMHC News Releases — All Releases

Canadian Housing Starts Trend Held Steady in November

December 8, 2016
by via CMHC News Releases — All Releases

Montréal CMA Housing Starts Trend Down Slightly in November 2016

December 8, 2016
by via CMHC News Releases — All Releases

Toronto Housing Starts Decrease in November 2016

December 8, 2016
by via CMHC News Releases — All Releases

Vancouver Housing Starts Pick Up in November