Most know that mortgage refinancing is when you take an existing home mortgage, break it, and typically replace it with another mortgage having different terms and conditions.We all want smart refinancing tips, but what about a refinancing Secret that can be used in Canada.A mortgage refinancing Secret that forced CRA to send an $18,000 thank you cheque to our client.When we showed this mortgage refinancing strategy to financial planners, they were blown away.Go ahead and see for yourself...
Imagine buying a home or worse yet, removing subjects, then finding out that you're on the hook for a $100,000 or more.
Many homes built between the 1920s and 1960s used oil as a heating fuel, with oil tanks buried close to the foundation of a home. Few homes use oil now, but many home owners may not realize that they have an old tank on their property.Underground storage tanks, even if capped and filled with sand, pose significant risk and potential costs.Hiring a professional Oil Tank Contractor is the best way to ensure your property is tank free. Please contact a Registered Environmental Consultant.Underground Oil Tank Fact Sheet
We all know the lure of Vancouver, but why are the wealthy Chinese so keen to purchase properties in Vancouver?
Sure the Economist Intelligence Unit (EIU) again named Vancouver as the “Most Livable City in the World” for 2011, but that’s only one reason Vancouver real estate prices are red hot.
But why are wealthy Chinese bidding up the properties in Vancouver, sending prices in the city soaring in the past three years.
There are a couple fundamental reasons.
Yes they’re anxious to raise their families in the West, but that’s only half the story.
The fact is, the Chinese Government is worried by the real estate boom in China so they’re restricting people to buying no more than two properties.
Now wealthy residents are turning to Vancouver.
Add to that, the fact that those two properties they’re buying in China are LEASED.
That’s right, you CAN’T own a property outright in China, it’s not possible.
Houses are leased for a maximum of 70 years.
Now you can understand why even though a small apartment for half a million dollars in Vancouver might seem expensive, being able to have outright ownership in such a beautiful city is priceless.
As to how high and how long?
Only time will tell.
Mark Fidgett, Your Mortgage Consultant For Life
604-273-2002
P.S. Who’s the next person you know who needs to discuss a mortgage – and not just rates? Be sure to give me a call to discuss how I can help them
You may want to think twice about your divorce after Canada’s top court ruled Thursday that a discharge from bankruptcy destroys the right to enforce a claim for equalization of property in some cases. Unless you live in BC…
As seen in the Financial Post:
When dividing up family property, if one spouse owes the other a hefty payment, they may be able to dodge it through a bankruptcy claim.
In a unanimous ruling, the Supreme Court of Canada said a claim for equalization in divorce proceedings is a provable claim under the Bankruptcy and Insolvency Act. If the spouse entitled to payment doesn’t pursue the claim as a creditor in bankruptcy, it will be released along with most other claims.
This is unlike claims for spousal support and child support, which cannot be avoided through a bankruptcy claim.
The Court said the matter is “ripe for legislative attention so as to ensure that the principles of bankruptcy law and family law are compatible rather than being at cross-purposes.”
But absent Parliamentary action to change the federal bankruptcy law, the Court warned that spouses owed equalization payments should keep the pitfalls of the legislation in mind.
The couple in Schreyer v. Schreyer were in the midst of divorce proceedings in Manitoba when the husband filed for bankruptcy, unbeknownst to the wife, who was not listed as a creditor. When he was discharged about a year later, the husband remained the sole owner of the family farm, which was exempt from creditors.
Meanwhile, the two had gone through the process of valuing their assets to divide them up under the family law regime in the province and the husband owed the wife about $40,000.
The Supreme Court noted that had she made a claim as a creditor in the bankruptcy, the wife, unlike other creditors, could have sought an ownership interest in the farm and enforced that even after he was discharged.
The Court also said if the wife has an outstanding support claim, a family court could take into account the fact that she never received the property payment and award her more support. But that would be up to the judge hearing the case.
The seven-member panel of the Supreme Court dismissed the wife’s appeal from the Manitoba Court of Appeal but ordered no costs in the case.
What’s more, the Act applies differently to litigants depending on what province they live in. In places like Manitoba and Ontario, where the distribution of family assets upon marriage breakdown is done through an equalization payment based on the value of what both spouses’ own, the claim can be extinguished through a discharge from bankruptcy.
But in provinces that follow a division of property scheme, such as British Columbia, divorcing spouses are entitled to a ownership interest in the assets themselves, not just a monetary claim. In those provinces, a bankruptcy discharge could not destroy that interest.
Mark Fidgett, Your Vancouver Mortgage Broker For Life
We’ve all heard of insurance, in fact, it’s common place to pay for insurance for some type of protection.
Well CMHC (Canadian Mortgage & Housing Corporation) mortgage default insurance is also a protection, BUT not for you.
It protects the bank (lender), BUT YOU pay.
That’s right, you pay in order to protect the bank in the event that you default and can’t pay your mortgage.
I’ve heard so many definitions of when this CMHC insurance is required.
You must pay CMHC mortgage default insurance if your down payment is less than 20% of the purchase price of your home.
This is called a HIGH-RATIO MORTGAGE.
If you can muster up at least 20% of the purchase price of your home as a down payment, you will have what is referred to as a conventional mortgage.
In this case, CMHC mortgage default insurance is not required.
Mortgage default insurance is provided by three companies. CMHC being the largest and most commonly referred to.
Canada Mortgage and Housing Corporation (CMHC)
Genworth Financial
Canada Guaranty Mortgage Insurance Company.
The premium —that is, the actual cost of CMHC mortgage default insurance, varies depending on the percentage you have as a down payment: the bigger your down payment, the lower your CMHC mortgage default insurance premium. Usually, CMHC mortgage default insurance premiums vary from 0.5% to 3% of the borrowed amount.
Example: CMHC Mortgage default insurance premiums
Mary’s down payment of $20,000 is 5% of the $400,000 purchase price.
Because her down payment is less than 20%, she will need to get CMHC mortgage default insurance.
Lets assume that
the CMHC premium is added to the mortgage of $380,000 (you don’t pay for it up front, it’s added to the mortgage)
the CMHC insurance premium rate is 2.75%
the mortgage will be amortized over 25 years (Add .20 for a 5 year longer amortization)
the interest rate is 5%.
The CMHC mortgage default insurance premium will cost $380,000 x 2.75% = $10,450
The total mortgage loan would then be $380,000 + $10,450 = $390,450
In the above example, this CMHC mortgage default insurance would cost Mary $10,450 and would be added to the mortgage total.
The monthly payment would increase from $2,211 to $2,271.
As you can see in this example, Mary can elect to put 20% down ($80,000) and not pay the CMHC high ratio mortgage insurance or increase her monthly payment by $60 and put only 5% down.
While you would benefit from having a 20% down payment, in both interest and premiums saved, CMHC mortgage loan insurance serves a purpose by allowing people to buy a home with a smaller down payment. Being insured against loss, the bank is less concerned about the higher risk they take on, which allows the buyer to stop renting and start building equity in a home of their own.
Mark Fidgett, Your Vancouver Mortgage Broker For Life
The average price of a resale home in Canada will fall by more than 10 per cent over the next couple of years, an analysis by TD Economics predicted Wednesday.
Calling it a “moderate correction,” the report’s authors also say sales will decline by more than 15 per cent over the same period.
“A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first time home buyers are expected to be the chief culprits behind the slowdown,” the report said.
TD economists profiled 12 urban markets across the country. They highlighted Vancouver and Toronto — currently the two most expensive housing markets in Canada — as the cities most vulnerable to a larger-than-average decline, “reflecting in part their exposure to the condominium segment, which appears particularly ripe for a correction.”
No city will experience a housing boom in the near-term, the authors say. But price drops in Regina, Saint John, N.B., Halifax, Calgary and Edmonton will be less than the average — what the report calls “a soft landing.”
On a national basis, the report’s prediction of an average 10.2 per cent price decline translates into an average resale price of $329,000 in 2013, down $38,000 from its 2011 peak.
But the red-hot Vancouver market, where the average resale home now goes for about $793,000, the authors predict a 14.8 per cent decline by 2013 to a still lofty $675,000 — a drop of $118,000.
“Vancouver has been the poster child for those individuals worried about a real estate bubble here in Canada,” the report says, with the authors pointing out that household debt levels are higher in Vancouver than in any other city.
Toronto’s forecast price drop over the same period will be almost as dramatic — an 11.7 per cent cent decline to $415,000 by 2013. That’s $55,000 lower than the current peak.
The authors note that sales are already off their peak. But they say the biggest drivers of housing demand are likely to remain “supportive” for the rest of 2011. The bulk of the price correction will come in 2012 and 2013, they say.
TD economists say the Bank of Canada is likely to start hiking interest rates again at the start of 2012.
With the central bank’s policy rate directly tied to variable rate mortgages — which 40 per cent of current mortgage holders now have — the authors point out that a $400,000 mortgage will cost $440 a month more to service by mid-2013, assuming the Bank of Canada raises its key overnight rate from the current 1.00 per cent to 3.00 per cent by that point.
I think we’ve been around this corner before.
I always come back to the same answer…
Experience shows, there isn’t always a black & white answer as it relates to specific indivuals and circumstances.
It’s good to know that our philosophy is to ensure that our clients buy responsibly and understand all the financial repercussions they’re facing. Whether that’s a Zero Down mortgage or not.
604-273-2002 or on the web
Mark Fidgett, Your Vancouver Mortgage Broker For Life
Apparently, the finance ministry’s legal oversight of the pink elephant, aka CMHC, was long overdue…
In March, Maclean’s warned that the Canada Mortgage and Housing Corporation, the quasi-governmental insurer that underwrites $500 billion of residential mortgages, answers to no one—not Canada’s top financial regulator or even the minister of finance. That all quietly changed last month when Ottawa passed a law that puts the CMHC strictly under the watchful gaze of both the finance minister and the Office of the Superintendent of Financial Institutions (OSFI).
With the new law, CMHC must hand over “prescribed books, records and information” and make those records available to the public. The legislation also allows the minister to set capital requirements and impose fees to compensate the government for the risks it assumes by backstopping mortgages.
CMHC has always said the money it sets aside to cover insurance losses exceeds that required by OSFI. But Finn Poschmann, a C.D. Howe researcher, told the House of Commons finance committee the new law is overdue. “There are a number of informal arrangements through which our oversight agencies are able to have a look at what it is that the CMHC does and the risks to which taxpayers are exposed,” he said. “However, it is an informal arrangement. It’s good to have this in legislation.”
It will be very interesting to see what if any changes take place.
If you’re wanting to do something, better get it done quick!
604-273-2002 or on the web
Mark Fidgett, Your Vancouver Mortgage Broker For Life
You may be surprised to learn how long certain information, actually stays on your credit bureau.
As you probably know, credit is one the most important factors in the mortgage approval process.
The length of time that information must stay in your report depends on: the province or territory where you live, and the type of information
The following charts illustrates how long it takes before negative credit information is removed from your credit report by Equifax.
The unfortunate fact about the info above is the small print that says ‘from the date paid or last activity’.
As soon as you pay it, it becomes new again.
Let’s say the debt has been on your bureau for 5 years. It has a lessening effect as time goes by, BUT as soon as you pay it, it becomes NEW again and NOW stays on your bureau for another 6 years AND affects your score even more.
You may want to contact me first for a few secrets that will help you move around these roadblocks.
I can tell you one thing for sure: Having strong credit is essential in today’s world.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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