When you find the condo or house of your dreams and want to make an offer, do you need a financing condition? Unless you can pay cash for the home, then yes you do. That little phrase – “conditional on financing” – is an important protection for buyers.
When an offer to purchase is made “conditional on financing”, we gain the time needed i.e. 3 to 5 days to...
Housing affordability in Vancouver has been occupying the headlines for well over a year. While many young families are priced out and therefore leaving Vancouver for smaller cities, our condominium and townhouse market is seeing an explosion in selling prices. With very few listings in the market, multiple offers are common, and competition is fierce, however, never in history have we seen...
An anomaly in the current market is the reliance by buyers on the myth of "price per square foot" as representing real market value. It is perpetrated by reality television, market gossip and inexperienced advice.
The concept of price per square foot is used by developers in their pro-forma to cost out a development, and to estimate profit. At the same time, developers will add a...
As widely predicted, the Bank of Canada announced today that it is holding the key rate steady. While noting that “economic growth has been faster than expected”, the bank said it’s too early to determine if the economy is on a “sustainable growth path”, citing weakness in export growth, business investment and employment. The Bank’s three measures of core inflation,...
For the 70% of Canadians who own a home, it is a place to live, raise a family, and connects them to their community.
Due to Canada’s tax system’s Principal Residence Exemption, when we sell our homes, any increased value or “capital gains” are not taxed.
This tax break matters to Canadian homeowners. Collectively, we have about $3 trillion in home equity and our homes...
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(Article by Invis - Canada's Mortgage Experts™)
This is why mortgage rates are suddenly way more complicated.
If you’ve been shopping for a mortgage lately, you’ll have figured out that rates can be all over the map. That’s because you’re not comparing apples to apples anymore. Thanks to new mortgage rules, the mortgage pricing matrix is much more complicated, and quick online mortgage quotes are less reliable. That’s why it’s important to have a basic understanding of the mechanics behind mortgage rates. Here’s a quick guide:
Variable mortgages and lines of credit hinge on the Bank of Canada’s “overnight rate”. Eight times a year the Bank of Canada determines if they are changing this rate. While they may hold the rate, they will increase it when the economy strengthens and inflation is a concern, and decrease it if they need to get the economy moving. It’s a careful balance. The chartered banks base their prime lending rate on this overnight rate because it influences their own borrowing. So if the central bank changes the overnight rate, it’s sending a signal to the banks to change their prime rate, which in most cases they will, passing on some or all of the change to their variable/line of credit clients.
Fixed-rate mortgages are different. Lenders use Government of Canada bonds to establish pricing for fixed-rate mortgages so you need to watch bond yields to determine where fixed mortgage rates are heading.
Whether it’s a fixed or variable-rate mortgage, the new mortgage rules mean lenders now have different rules and rates for insurable vs. uninsurable mortgages. If a mortgage is insurable, it will qualify for the best rates. Most homebuyers know that if they have less than 20% downpayment, they need to pay for mortgage insurance as a way to protect the lender. In order to obtain the lowest cost of funds, some lenders use this insurance to insure mortgages with more than 20% equity. Mortgages that are “uninsurable” can include rental properties and second homes, switch mortgages that move to another lender, 30-year amortizations, refinance mortgages, mortgages over $1 million, and even some conventional 5-year mortgages. These mortgages are charged a rate premium and some lenders no longer offer them. Additionally, interest rate surcharges are often charged if it’s difficult to prove your income or you have bad credit, the property is in a rural location, you want a long rate hold, you want the best pre-payment privileges and porting flexibility, and you don’t want refinance restrictions. As a result, be wary of rates you see online, because you might not qualify for them.
Without a doubt, insurable vs. uninsurable has made the mortgage landscape significantly more confusing. Getting good solid advice is critical, and Mortgage Brokers have never been more important in the home financing process. We have access to all the lenders we need, and the experience and knowledge to get you the best mortgage for your situation. We are here to help you! |
These market statistics are general in nature, as they include all municipalities in the Lower Mainland (excluding the Fraser Valley). For specific information in your micro-market, contact me.
Vancouver City Council has approved a new one percent (1%) tax on empty and under-utilized homes. The goal of the Empty Homes Tax is to provide an incentive for property owners to rent out their homes, which will increase housing supply and help families and young people to stay in our community at a time when the rental vacancy rate is near-zero.
The majority of homeowners, including ...
If you’re in the market for an insured mortgage, then you might want to get that mortgage before March 17, 2017.
Canada Mortgage and Housing Corporation (CMHC) is raising premiums for insuring mortgages on Canadian homes for the third time in three years. Canadian homebuyers are required to have mortgage insurance if they have less than a 20 per cent downpayment. The insurance...
The new BC Home Owner Mortgage and Equity (HOME) Partnership program will begin accepting applications on January 16, 2016.
For a first-time homebuyer who has saved a down payment:
