Canadian Real Estate News Round up

August 9, 2013 · Filed Under Real Estate Articles · Comments Off 

Here is a round up of interesting real estate articles I stumbled upon this week.  Some great reads if you follow the Canadian Real Estate Market and the latest mortgage changes.

Rob Carrick wrote a great article listing five strategies for those worried about the housing market?

Being at all time lows the past few years, it was only a matter of time before the interest rates increased.  Canada Mortgage and Housing Corp. is limiting guarantees it offers banks and other lenders on mortgage-backed securities – CMHC moves to take steam out of housing market. 

Housing starts were trending at 1,543 units in July compared to 1,531 in June according to CMHC.  Read the full press release – July 2013 Housing Starts for the St. John’s real estate market

First-time buyers likely to feel impact of new CMHC restrictions as housing market starts to surge again – New CMHC restrictions could impact mortgage rates

Curious to see how the Canadian mortgage rates moved over the past 23 years? Check out this chart of the slow decline in mortgage rates since 1990.

Here is a great article from ratehub.ca – What does CMHC’s latest announcement mean for Canadians?

Statistics Canada says its new housing price index rose 0.2% in June, following a pattern of similar gains over the past 15 months. – Prices of new Canadian homes continue to march higher

Changes made to Canadian Mortgages

February 17, 2010 · Filed Under First Time Buyers, Real Estate Canada · 1 Comment 

April 19th is the deadline for the old mortgage rules.  After this, the new changes proposed by the Canadian government earlier this week will be in effect.  Personally I think the rules are a good move from the governments part and in the long run protect Canadians from taking on additional debt.  As well, for those thinking we are in a housing bubble it should assist in slowing the pace a little.

Starting April 19th, the new mortgage rules are as follows:

1) All new borrowers will have to meet standards for the 5 year fixed-rate mortgages even if they’re seeking a shorter, variable-rate loan.

2) The maximum amount Canadians can withdraw when refinancing is now 90% of the value of their homes down from the current 95 per cent.  It’s a good idea to personally cap this at 80% – if you go over 80%, CMHC fees are applicable.

3) For those interested in an investment property, you will be required to have a 20% down payment for government-backed mortgage insurance on speculative investment properties.

The third rule change seems to be the harshest of the three as there are a number of people interested in buying investment properties for the long term (ie for retirement). It’s a big price hike for a down payment on an investment property now.  An average 2-apartment home in St. John’s is around $250,000.  This means a purchaser would need $50,000 for the down payment.  Again, the 20% will help avoid your CHMC fees when purchasing an investment property.

What are your thoughts for the new upcoming changes in Canada’s mortgage rules?

Say Goodbye to 40 year mortgages and 100% financing

July 10, 2008 · Filed Under First Time Buyers, Mortgages, Real Estate Articles, St. John's Real Estate · Comments Off 

The Canadian Government is making it tougher for home buyers to obtain a mortgage and with good reason.  Starting October 15 of this year, the new rules will take effect.

We are all familiar with the  sub-prime mortgage meltdown in the States the past year but while Canada is not even close to this disaster the government still feels it necessary to secure and maintain a strong mortgage and housing market.

The changes include:

  • Cutting the maximum amortization period to 35 years from 40.
  • Requiring a minimum down payment of five per cent, whereas loans for 100 per cent of the price are possible now.
  • Establishing a requirement for a consistent minimum credit score.
  • Introducing new loan-documentation standards.

The people effected are the purchasers with less the 20% downpayment for a property as they are the people that require mortgage insurance with the purchase of real estate.

Mortgage insurance protects lenders (ie Royal Bank, Scotia Bank etc) when a borrower  (the Purchaser) defaults on the loan if the sale of the property doesn’t cover the debt.

I for one am in agreement with this change.  The zero down, 40 year mortgage that was introduced a couple years ago allowed home buyers the ability to purchase a home yet become heavily in debt.  There was a lot of buyers that entered the real estate market in Canada during this time and probably shouldn’t have.

It will be interesting to see the public’s reaction to these changes.

Read the Globe and Mail Article – Ottawa tightens mortgage rules to avoid ‘bubble’

Read the CBC News release – Ottawa tightens mortgage insurance rules

Norm Fishers Saskatoon Blog Article – Canadian Government Says, “No More 40-year Mortgage for You!”

Edmonton Real Estate Blog – No More Zero Down, 40 Year Mortgages

Energuide Rebate Incentives

June 8, 2008 · Filed Under Energuide Info, Home Maintenance, St. John's Real Estate · Comments Off 

From hybrid cars to energy efficient appliances, no matter where you turn these days going green and reducing your energy footprint in the world seems to be the norm. Not only is reducing energy important for the environment but with the cost of oil and gas sky high, it can be very helpful to your budget.

Did you know that after furnaces and water heaters, household appliances are the biggest energy users in the average Canadian home?

Major electrical appliances (think kitchen and laundry room) consume on average up to 14 percent of the total energy used in the home.

Although the upfront costs can be a little more expensive, over the long haul you will save. Compare a $1 old fashioned 100w light bulb to a $7.50 23watt fluorescent bulb. Times that by 15 bulbs and the price difference is quite significant.

Not only will you save in the long haul, there are government incentives to help reduce the upfront costs.

ecoENERGY Retrofit provides federal grants and incentives to homeowners and small and medium-sized businesses, industry and public institutions to help them invest in energy and pollution-saving upgrades. In addition to the grants available under ecoENERGY Retrofit – Homes, selected provincial, territorial and municipal entities also offer grants and incentives to homeowners who conduct energy saving upgrades.

When you get a mortgage on your home check out CMHC’s Mortgage Loan Insurance Rebate for energy efficient homes. If you use CMHC insured financing to buy an energy efficiency home, purchase a home and make energy-saving renovations or renovate your existing home, a 10% refund on the mortgage loan insurance premium may be available.

Newfoundland Light and Power has a Wrap Up for Savings Rebates & Financing. If you upgrade the insulation in your basement, attic or crawl space, you may be eligible for a cash rebate.

Free St. John’s Real Estate listings on kijiji – Is it worth it?

May 23, 2008 · Filed Under St. John's Real Estate · Comments Off 

I just was introduced to the world of kijiji. Kijiji is a website where you can post anything for sale or post looking for items to buy. Similar to to craigslist.org

I looked under the real estate section of St. john’s Kijiji and noticed there was 45 ads to sort through. The problem that I saw was the 40 ad’s from Realtors in Edmonton, PEI real estate, BC Real estate and realtors, free mortgage advice and online mortgage approvals from no name ad’s. However there was 5 listings there but you really had to look closely and sort through the Google Ad’s (St. John’s Real Estate Blog – www.stjohnsrealestateonline.com was there 4 times) and sponsored links. Of course I’m biased but I do not see a “free classified” online website the optimal way to promote your home for sale.

I looked on craigslist.org and ebay.ca as well for real estate listings. Much easier to find and sort through, however extremely limited in selections.

Personal plug: Why not just use a Realtor to purchase your home? It’s free to have a Realtor in St. John’s assist you in the purchasing of your new home. Both pre-existing homes and new home construction apply. Contact your local Realtor today and ask them how they can help.

Homebuyers pay down mortgages faster

March 26, 2008 · Filed Under Mortgages · 1 Comment 

Canadians who have recently purchased real estate plan on paying off the mortgage as quickly as possible according to an annual mortgage consumer survey released Wednesday by Canada Mortgage and Housing Corp.

Seventy-eight per cent of respondents said they wanted to pay their mortgages off as fast as possible and one-third said they had made a lump-sum payment toward that end.

Eighty-four per cent of homeowners who are making weekly or biweekly payments on their mortgages are doing so at an accelerated rate in order help to shorten their amortization period, according to the mortgage insurer.

The fact that new homeowners are working to pay down principal early and are accelerating payments is a good indication that this responsible behavior will continue throughout the life of their mortgage.

More Canadians are becoming aware that, since mortgage interest is not tax-deductible in Canada, (as it is in the US), you are making mortgage payments of both principal and interest with money that you’ve already paid tax on “after tax dollars”. This makes it even more important to pay down your mortgage as soon as possible!

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