Posts Tagged ‘CMHC’
New Mortgage Regulation Myths – Pt1
I posted a couple of weeks ago talking about the recent announcement of new mortgage rates in Canada. On the surface it appears that the Finance Minister, Jim Flaherty, had the best interests of Canadians at heart when he carefully crafted these mortgage changes. I'm sure he did, but what most Canadians don't know is there were other forces at play. If you followed the news at all I am sure you heard several reasons mentioned as to why these rules were put in place and over my next few posts I am going to talk about these reasons and why they may not produce the desired results. You may or may not heard the reports that Canadians were tired of CMHC playing fast and loose with taxpayer money backstopping mortgages for the banks. In other words why is taxpayer money being used to protect for profit institutions? I can see how this could be a valid ...
New To Canada Mortgages – What you need to know
Are you or someone you know looking to immigrate to Canada? Are you curious about what it takes for a new Canadian to get a mortgage? Well, it is probably easier than you thought. Genworth and CMHC both have programs in place for new Canadians to purchase homes with minimal downpayments. Those with more than 20% to put down on a property do not fall under most of the guidelines below. Four things New Immigrants need to know to get a mortgage in Canada: CREDIT - You don't necessarily need Canadian credit. The insurers will consider alternative sources to prove credit worthiness. The most obvious would be a credit report from your home country, but they will also consider things such as proof of rent being paid on time as well as utilities. RESIDENCY STATUS - Both permanent and non-permanent residents have access to mortgages. However, those with non-permanent status are only eligible for purchases and can ...
5 Hotspots for First Time Homebuyers in The GTA
Yesterday, I attended a conference held by one of the mortgage industry's governing bodies, the Canadian Association of Accredited Mortgage Professionals (CAAMP). There were several sessions throughout the day on subjects from Social Media Marketing to the Canadian mortgage securitization industry. One of the most informative sessions in my opinion was the talk CMHC economist Shaun Hildebrand gave on the housing market in the GTA. I took away quite a bit of information from his presentation and my next few blog posts will cover the key points. So where are the top 5 affordable neighbourhoods for first time home buyers in Toronto (GTA)? As you can imagine, the central corridor of Toronto is the most expensive and probably out of reach for most first time home buyers. However there are a few areas in the "C's" that Shaun felt were still fairly priced and accessible to most. Those areas were C7 and C15. They are a little further north, but still within an easy commute via transit. Surprisingly there is still some opportunity in C1 for first time buyers in the condo developments going up.
Ottawa Considers Tighter Mortgage Regulations
It appears the powers that be in Ottawa read the newspaper. The media has been reporting for the last couple of months that Canada is in the midst of a real estate bubble and after what happened in the US, "Real Estate Bubble" is now a dirty word. Of course if you listen to the experts such as CIBC's Benjamin Tal you will get a more realistic view of what is actually happening. In short the Government's stimulus package is actually working. The lower interest rates we have been enjoying have increased home sales in Canada and in turn help boost the economy. Well, the Conservative Government is now worried that Canadians are piling on too much debt while interest rates are low and will ultimately get into trouble when interest rates increase. Is their fear valid? Maybe, but I personally find most of my clients ar not stretching themselves thin and are keeping a healthy cushion to allow for an increase in rates. The Finance Minister said in an interview with CTV that they are considering increasing the minimum downpayment from 5% to something greater....maybe 10%. As well they would get rid of 35 year mortgages. CIBC's Chief Economist Benjamin Tal ...
Pros and Cons Of Investing In Apartment Buildings
There was an interesting article in the Financial Post last week by Garry Marr talking about the merits of apartment buildings as investments. It makes a great point that stock markets have lacked stability for quite some time, but apartment buildings generally hold their value through a recession because of steady financing, low vacancy rates and a supply constrained environment created by government regulations. During the last housing bubble speculators and flippers were making their fortunes by buying low and selling high. This type of activity can reward the players with healthy returns, but it is not for the weak of heart and is definitely not predictable or dependable. What many forget is 1/3 of Canadians still do not own a home and require places to rent. According to CMHC, apartment vacancy rates were 2.7% in April, 2009 which was up only slightly over the previous year. The problem is it is hard to find an apartment building for sale. Very few new apartment buildings are being built due to rent controls and current owners are not eager to sell their properties. The good news is even though there are some large companies and REITS controlling large blocks of buildings, about 90% ...
Canada’s Housing Bubble
I was reading the Financial Post the other day and came across an interesting article on Canada's housing bubble and how CMHC has contributed to our situation. Diane Francis brought up quite a few valid points. As a mortgage broker I see the benefits every day of CMHC insurance and how it allows homebuyers to purchase their home with as little as 5% down. However, the by-product of making housing more available to more people is it drives up home prices. If you ever took economics 101 in school you will know that increasing the demand for an item while keeping supply constant will result in increased prices. When you add our historically low interest rates to the mix.......well it could be a recipe for disaster. After all what contributed to the economic melt down in the US? You guessed it.....the availability of financing to people that probably should not have had it. In fairness CMHC does impose criteria far more strict than the US, but the basic principal is the same. Diane also brings up a good point concerning interest rates which I have actually wondered about myself. Why do banks charge a homebuyer with only 5% down the same interest ...
The ABC’s of Mortgage Insurance
One of the biggest roadblocks for first time homebuyers is saving the downpayment. With the burdens of paying rent, student loans and other expenses it is not realistic to expect you can save 20% of a home's purchase price for your downpayment. What is Mortgage Loan Insurance? Mortgage Loan Insurance is just that — insurance from a trusted third party, which protects lenders against default on a mortgage loan by a homeowner. In Canada, Mortgage Loan Insurance is generally required whenever a homebuyer has less than 20% of the purchase price available as a down payment. Because the lender is protected, they are able to offer mortgage financing even if you have a smaller down payment, at a rate of interest that is comparable to the lower rates typicallyreserved for homebuyers with a larger down payment. To obtain Mortgage Loan Insurance, an insurance premium must be paid based on the total amount of the loan (the purchase price minus the down payment). This premium can be paid in a lump sum, or added to your mortgage and included in your monthly payments. The latter is normally the case. How Much Does it Cost? In general, the larger your down payment, the lower your premiums will ...
