New “Stress-Test” 2017 / 2018 Mortgage Rules Changes Explained Recently as you have probably heard in the major news media, like Global News and CBC, late in 2016, new rules were announced by OSFI with respect to residential home mortgages. The decisions leading up to these new rules are primarily driven by ‘expert’ concerns about rising home prices in a few Canadian markets Vancouver, and Toronto.  Prices in Victoria, BC are up significantly as well but our demand continues to outstrip supply even after the first wave of new rules have been implemented.  The thinking behind making it more difficult for Canadians to buy and refinance is that it might calm down the housing market, and specifically limit price increases. I’m not going to get into it too deeply here but the thinking behind these new rules is counter-intuitive, and possibly quite damaging to Canadian families and the Canadian economy […]

When you’re house hunting anywhere in the greater Victoria area; from James Bay to Oak Bay, from Saanich to Langford, it’s a great idea to know the mortgage amount you qualify for, your monthly payments, and that your interest rate will be held for a specified period of time i.e. 90 to 120 days. In some cases the pre-approval and rate-hold period can be even longer.  This way you can shop within your price range, you don’t have to worry about rates rising, and both realtors and sellers will know you’re a serious buyer. This is particularly important in a tight market where inventory is low and there is competition between several buyers. Be realistic and make sure you can afford that pre-approved amount; review all of your home ownership expenses and your monthly budget including property taxes and regular upkeep. Keep in mind that not all pre-approvals are the […]

Look behind Deeply Discounted Rates and Understand the Possible Penalties. Have you found a deeply discounted rate in Victoria, BC?  Is the broker local in Victoria or in another city?  Is it a national bank or and can they clearly explain the penalty structure?  We pride ourselves on offering the best rates, on mortgage products that are client-friendly.  We have heard of national ‘rate sites’ promoting rates that are ultimately not available, and people have wasted a lot of time and created more stress than is required, at an already stressful time. Talk to us first.  You can make an appointment to come in and sit down with for a no cost, no obligation discussion.  We’ll help you find the right mortgage with the rate, flexibility, and freedom you need to be a happy homeowner. A large number of Canadians are forced to terminate their mortgage contracts early due to […]

So you’re one of those buyers who absolutely loves older homes: the character, the unique architecture, the settled neighbourhood… and maybe the great value.  Maybe its James Bay, or Fairfield or Oak Bay.  Sometimes older homes with “great bones” sometimes need a little renovation to turn them into the home of your dreams. The Victoria market has many older homes that can benefit from a great renovation and there is the very real possibility of turning your hard work and vision into increased home equity.  Unfortunately, sometimes on top of the home purchase price, a few costly renovations can be a big burden on your savings or even worse, your credit cards. We have good news.  We can bundle the cost of those immediate renovations right into the mortgage: so instead of sky-high credit card and line of credit bills… you’ve got your mortgage and renovations looked after in one […]

What is a collateral charge mortgage?  Here’s how it works: the bank registers the mortgage for more than the value of the home at closing.  So if you have a $400,000 mortgage and a $700,000 home, the bank will register a charge up to $875,000.  This has several side-effects, including locking you in to the lender, their limited products an their rates. We’re not big fans of the collateral charge mortgage – because we’re all about keeping your options open. Collateral charge mortgages are very difficult to transfer to another lender. So you might see a great rate or mortgage feature at another lender, but it’ll cost you to switch.  Generally, you would need to start from the beginning of the process all over again, including time and paperwork, and pay new legal fees. There are some lenders who only offer collateral charge mortgages, with catchy marketing terms they like […]

Canada Mortgage and Housing Corp. (CMHC) recently announced that as of May 30th, it will stop insuring both second homes and self-employed borrowers who don’t have standard documents to prove their income. Canada’s private mortgage insurers did not follow suit, although putting limitations on their second-home programs. Other new rules currently under review could mean the complete elimination of cash-back down payments. There have been many changes to the mortgage landscape in the last few years, making it more important than ever to get expert and timely mortgage advice and access to as many options as possible. If you’re concerned about how changing rules might impact your home ownership goals, let’s talk!

The NDP provincial government has released its new budget. From a housing perspective here are the highlights (or lowlights depending on your perspective). 1. Speculation Tax This new, annual property tax will apply to foreign and domestic homeowners who do not pay income tax in BC, including those who leave their properties vacant. The new tax will initially apply to homes in Metro Vancouver, the Fraser Valley and capital regional districts in Victoria and Nanaimo, Kelowna and West Kelowna. In 2018, the tax rate will be 0.5% of assessed value. In 2019, it will rise to 2.0% of assessed value. 2. Victoria Area Foreign Buyers Tax Effective Wednesday February 21, 2018, the government will increase the foreign buyers tax from 15% to 20% and extend the tax to the Fraser Valley, the capital regional districts in Victoria and Nanaimo and the Central Okanagan Regional Districts. What is a foreign buyer? See […]

The Canadian Press Posted: Apr 15, 2017 10:10 PM PT Victoria makes it easier and cheaper for homeowners to build garden suites: Previously garden suite applications were evaluated by council on case-by-case basis Victoria city councilors have voted to allow garden suites in all single-family homes in a move to increase rental housing options. The city says there are 6,700 single family homes in Victoria and allowing more garden suites could alleviate the very tight rental market. “It has the potential to be a very large step, we hope homeowners will consider it,” said Victoria mayor Lisa Helps. Until now, garden suite applications were evaluated by council on a case-by-case basis. Only 18 garden suites have been built in Victoria since 2011, far fewer compared to cities such as Vancouver. The city says the change doesn’t override regulations for privacy and safety for building garden suites, but it will make […]

March 14, 2017 The Bank of Canada left their overnight rate unchanged at 0.50% as Canada’s economy continues to operate with excess capacity. Recent changes by the government to stabilize our housing market will temper residential investment and our broader economy. This will help keep inflation low and bodes well for continued low interest rates in the foreseeable future. After trending higher in the last few months, bond yields have stabilized with mortgage interest rates now hovering in the 2.24% – 2.94% range OAC. In the USA the US Federal Reserve signaled they may raise their overnight lending rate March 15th. 77% of analysts are expecting an increase unless last minute data from non-farm payrolls and average hourly wages fall dramatically this week. This should drive the US Dollar higher and help Canada’s exports as long as trade negotiations with the Trump administration don’t cause a disruption. This uncertainty remains […]

BC Budget Announcement: First Time Home Buyer Property Transfer Tax Full Exemption Raised to $500,000 FIRST TIME HOME BUYERS PROPERTY TRANSFER TAX EXEMPTION Property Transfer Tax should not be confused with Property Tax. The Property Transfer Tax is a one time tax paid to the Provincial Government by purchasers of real estate. The Property Tax is the tax paid on an annual basis to the local City/Municipality. “First Time Home Buyers” who qualify, may be exempt from the British Columbia Property Transfer Tax. This tax is normally 1% of the first $200,000.00 of market value and 2% of any amount above $200,000.00. The following are some guidelines to determine if you are eligible for the first time home buyers exemption. Please consider if you meet the following criteria: * You are purchasing a residential property within the province of British Columbia which has a fair market value that does not […]