18 Oct

New Mortgage Rules effective January 1st, 2018

General

Posted by: Chase Belair

Mortgage Mortgage Rules

New mortgage rules in effect January 1st 2018 will affect your purchasing power and your ability to refinance your home.  Please don’t hesitate to contact us for further details pertinent to your specific situation.

The government (Office of the Superintendent of Financial Institutions) is implementing new mortgage rules that will reduce purchasing power on conventional purchases and refinancing of all homes. The new qualifying rules will come into effect January 1, 2018 requiring all conventional mortgages to qualify at the greater of; a rate 2% higher than the contract rate, or the qualifying rate (currently 4.89%). The new rules will impact your mortgage affordability by approximately 20%.

Example: An average family income of $100,000 translates into approximately a $500,000.00 mortgage approval at current rates. With the new rules, the example family’s ability to qualify for a mortgage will be reduced to approximately $400,000.00. For the purpose of this example, our mortgage calculations are based on a 30-year amortized mortgage and no other outstanding debts (Example assumes approved credit. Rate used is subject to change).

What does that mean for you?

  • If you are purchasing with 20% down payment or more, you must have a signed Agreement of Purchase and Sale prior to January 1 st 2018 or else your current purchasing power may be reduced by approximately 20%. To confirm: The Purchase agreement must be signed and dated prior to January 1st , 2018 to qualify under the existing rules.
  • Are you planning on consolidating debt or withdrawing equity from your home in the near future? If an investment opportunity or consolidating debt is on your mind, you may wish to consider refinancing now, prior to the qualifying rules changing on January 1st 2018, as it may not be an option in the New Year depending on your circumstances.For further information on the announcement, please visit this link to the Office of the Superintendent of Financial Institutions press release:
    http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx

Please do not hesitate to write or call if you have any questions, concerns, or if we can be of any service to you.

2 Jul

Home-buying can be very intimidating, it helps to know the process:

General

Posted by: Chase Belair

While this post is geared towards the first time home-buyer, the information within is relevant for any and all potential and current home-buyers.

  1. Get pre-qualified by your bank and/or a mortgage broker to determine maximum affordability and address any potential issues. This step may also include a rate-hold to protect you in the event that mortgage rates rise during your home-search.
  2. View listings online(realtor.ca is my favourite resource), and those provided by your realtor to determine which ones you wish to go see. This process can take anywhere from a day or two, to up to many months. (Don’t hesitate to ask me who my favourite Ottawa realtors are!)
  3. Once you find the perfect home, you can put in an offer. In most cases, your realtor will include a clause within the offer for: Financing, Inspection and anything else your realtor may recommend. This clause provides you with 5-10 days(you can choose the exact timeline) to make all necessary arrangements with regards to your mortgage, a home inspector, etc. It’s important to know that there is still no cost or obligation involved at this point, you can back out of the offer at anytime during this period and your deposit will be returned to you(important to note that it can take up to 4 weeks to get your deposit back).
  4. Once your offer is accepted, your realtor will forward me a copy so that I can obtain a full approval. A formal approval often has better rates and terms than a pre-approval.
  5. Once all arrangements have been made to your satisfaction, you may then “firm up” on your offer to Purchase. Once you “firm up” by waiving your conditions, you may no longer back out of the transaction and there is now a cost and obligation to proceed.
  6. From here, while you await your scheduled closing date, your lawyer and myself will be doing all of the work behind the scenes so you can focus on the important things.

Three main perks of being a First Time Home Buyer:

  1. Home Buyers RSP Plan – Here’s a really great video produced by RateHub that walks you through how it works. Buying your first home is the only opportunity that you will have to take advantage of this program. Take a peak and don’t hesitate to ask me any questions: https://www.youtube.com/watch?v=f5iz26AflGI
  2. Land Transfer Tax Refund – $4,000 off the Land Transfer Tax that would be payable on your closing date through your lawyer.
  3. First-time Home Buyers’ Tax Credit – Claim up to $5000 for a maximum refund of $750 while filing your income tax for the tax year that you first purchased in.

By Chase Belair, Mortgage Agent, Licence #M11001814

Independently Owned & Operated as Brokerage #12236