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Things your Mortgage Broker wants you to know

The right mortgage broker can be a huge asset in your journey to homeownership in Canada. Mortgage brokers are there to guide you through the often confusing process of financing your home purchase and help you secure the best deal on your mortgage.

Here are things your Mortgage Broker wants you to know when working with them. Realtor.com recently outlined the top important points to keep in mind. While there is always much to consider, when making a mortgage application, these key points rank the highest of importance.

Call your broker with any and all questions first – Things Your Mortgage Broker Wants You to Know

Reach out to your broker first: Your broker is a valuable part of your real estate team, so don’t hesitate to contact them with any questions or concerns about your mortgage. Brokers want to be seen as partners in the homebuying process and should be your first point of contact for any financing-related queries. It’s always a good idea to check in with them during the homebuying process before making a financial decision of any type. Whether it be big or small, your mortgage broker will have the answer and are always happy to assist.

Understand the rules around down payments

Understand down payment rules: It’s crucial to have a clear understanding of the rules around down payments. For example, it’s important to know that borrowing money for a down payment is not allowed. Any funds received as a down payment should be documented as a gift, not a loan, to avoid jeopardizing the home purchase. Under Canadian mortgage, lending rules, is important to understand what options you actually have when it comes to down payment sources. The Last thing you want to do is render your mortgage offside while waiting to close on the home of your dreams.

Don’t make any sudden changes

Avoid sudden financial changes: While the loan process may be underway, it’s important to avoid making any sudden financial changes. Big purchases or job switches can potentially lead to the denial of your loan. If you are considering any changes, consult your broker first and be prepared to wait until after closing. Ideally, your financial situation needs to mirror until at least closing date as when you first submitted your application. Changes that you think are small, could be seen as material by the lender. Don’t be fooled, lenders often do last minute checks on credit and employment status right up until closing day.

Conclusion

In summary, working with a mortgage broker can greatly benefit your Canadian homeownership journey. Understanding their role and following their advice will help ensure a smoother process. Full disclosure of any, and all challenges is paramount during the mortgage application process. Often, we can help you navigate any bumps or bruises that we know about. However, it can be very difficult to explain to a lender something we were, unaware of. That could make the lending approval null and void. Remember to communicate openly, follow the rules, and avoid any sudden financial changes.

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2024 Property Assessments

Stable Values

The story for 2024 Property Assessments for British Columbia overall is stability. The assessed value of properties across B.C. has generally stabilized, with some outliers like Lytton, Haida Gwaii, and Tumbler Ridge experiencing significant increases in worth. According to the B.C. Assessment Authority, as of July 1, 2023, property values changed between minus 10% and plus 5% on average. In the Lower Mainland, the range was between minus 5% and plus 5%. B.C. Assessment’s lead assessor, Bryan Murao, stated that the overall housing market has generally stabilized in value across the Lower Mainland and throughout B.C. Most homeowners can expect modest changes in the range of minus 5% to plus 5%, which is notably less than previous years. For example, the average detached home in Vancouver saw an increase of 9% in value in 2022 and 16% in 2023.

Commercial and Development Values

Murao also mentioned that commercial and industrial properties are generally increasing in value at a higher rate than residential properties, particularly in areas like the Fraser Valley, where limited industrial land is driving up property values. In the Lower Mainland region, the overall total assessment values increased from about $1.94 trillion to nearly $2 trillion. Almost $27.2 billion of the increased assessments in the region are attributed to new construction, subdivisions, and rezoning of properties.

Residential Properties

In terms of specific areas, for single-detached homes, 2024 property assessments increased by 4% in Vancouver, Burnaby, and Coquitlam, with the average detached home price in Vancouver now at $2,209,000. The average assessed value of a detached home in Surrey remained unchanged at $1,609,000. The District of Hope experienced a 13% decline in assessed value, with the average detached home now worth $611,000. Notably, the value of detached homes in Hope rose 14% last year and 45% the year before during the COVID-19 real estate boom.

There were significant changes in Whistler, as the average assessed value of a detached home went down 2%, now sitting at $2,842,000. Last year, a detached Whistler home saw an increase in value of 11%, and 29% the year before. In the strata property class (condos and townhouses), the Lower Mainland saw varying performance across different areas.

Call us to discuss further and to Check your own Property Assessment NOW at bcassesment.ca

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Difference between a Home Inspection and Home Appraisal

Are you planning to buy your dream home? If so, you may need to apply for a mortgage loan. Before you take this big financial step, it’s important to understand the difference between a home inspection and a home appraisal to avoid any surprises in the long run.

Home Inspection:

A home inspection is a thorough examination of the conditions of a property, focusing on the current state of the various components of the house structure. Inspectors will check for any visible damage, such as leaks, cracks, and wear and tear on the building. Additionally, they will examine the electrical, heating, and cooling systems in the house. They will also look at the plumbing system and assess the condition of the roof, flooring, walls, windows and doors.

Home Appraisal:

A home appraisal, on the other hand, is a completely different process. It provides an estimation of the property’s worth based on current market conditions. Lenders require appraisals to determine an accurate evaluation of the potential value of the property, comparing it to the current prices of similar homes in the area. An appraiser will consider factors such as location, square footage, condition (based on the home inspection), and the number of bedrooms and bathrooms. They’ll also consider the age of the property, the lot size, and the unique features that may affect the home’s value.

The Difference Between Home Inspection and Home Appraisal:

A home inspection focuses more on the physical structure of the property while an appraisal is more concerned with its overall value. Both are essential when getting a mortgage, as lenders want to make sure they’re investing in a property that has been adequately appraised and inspected to ensure that it’s in good condition and can withstand the test of time.

Conclusion:

Ultimately, it’s imperative to keep in mind that both a home inspection and a home appraisal are crucial steps in the home buying process to ensure you are making an informed investment. Talk to your lender or real estate agent to make sure you understand the differences between these two processes and how they impact your loan approval. Being informed will help ensure that you can make an informed decision and find a home that meets your needs while being a sound financial investment.

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Canadian Mortgage Rate Forecast for 2024

Canadian Mortgage Rate Forecasts for 2024: What You Need to Know

Are you a Canadian homeowner or looking to invest in Canadian real estate? If so, chances are you’re constantly monitoring mortgage rates and trying to predict where they’re headed. While there’s no crystal ball to tell us exactly what will happen in the housing market, experts and economists can make educated guesses based on market trends, economic indicators, and other factors. In this blog post, we’ll take a deep dive into Canadian mortgage rate forecasts for 2024, including the probabilities of low and high rates, and what it all means for you.

The Bank of Canada has a significant influence on mortgage rates, as it sets the target overnight rate, which affects borrowing costs for banks. Based on current economic conditions and projections for the future, here are some potential scenarios for mortgage rates in 2024:

1. Low Rates:

Experts predict that the Bank of Canada will keep interest rates low until at least 2023, which could result in continued low mortgage rates for homeowners. If the economy continues to recover from the pandemic, we could see the government reduce stimulus measures like quantitative easing, which could cause rates to rise slightly, but they will still be historically low.

2. High Rates:

On the other hand, if inflation rises sharply and the economy overheats before 2024, the Bank of Canada may feel compelled to increase rates to curb inflation. However, this is seen as less likely by most economists.

3. Stable Rates:

The most likely scenario is that rates remain stable or rise slightly in 2024. The Bank of Canada has signaled that it plans to keep rates at historic lows until the economy fully recovers, which could take several years.

4. Variable Rates:

Another factor to consider is whether you have a fixed or variable-rate mortgage. If you have a variable-rate mortgage, your payments will fluctuate based on changes to the prime rate. While variable rates have been historically lower than fixed rates, they are more volatile and can increase rapidly if the economy heats up.

So, what does all of this mean for Canadian homeowners? If you’re planning to buy or refinance in the next few years, it’s essential to think about your long-term financial goals. While low rates may make it tempting to borrow more money, it’s critical to consider the potential for rates to rise in the future. Make sure you’re comfortable with your mortgage payments both now and in the future, which can be helpful in withstanding any interest rate hikes.

While we can’t predict the future with certainty, having an understanding of Canadian mortgage rate forecasts can help you make informed decisions about your finances, whether you’re a homeowner or an investor. As with any investment, it’s crucial to do your research and consider all options to ensure you’re making the best decisions for your financial future. Remember to consider your long-term goals and expectations and consult with a trusted mortgage broker to get expert advice on the best course of action for you.

BC Secondary Suite Incentive Program and Get a $40,000 Forgivable Loan

Gone are the days when a home serves only one purpose. With the rising costs of housing and the changing demographics, secondary suites are becoming more popular and essential. Many homeowners in British Columbia are converting their basements, garages, or even adding rooms to their homes to create additional living spaces. If you’re one of them, you can now take advantage of the newly introduced BC Government Secondary Suite Incentive Program. The program provides homeowners with a $40,000 forgivable loan for the construction of a secondary suite in their homes. In this blog post, we’ll delve deeper into the program, explaining the requirements, benefits, and how to apply.

What is the BC Government Secondary Suite Incentive Program?

The BC Government Secondary Suite Incentive Program is a new initiative aimed at providing support to homeowners who are building a rental unit in their homes. The initiative is funded by the Province of British Columbia and administered by BC Housing. The program provides a forgivable loan of up to $40,000 to eligible homeowners who construct a secondary suite in their primary residence. The loan is forgiven after 5 years, provided that the rental unit remains rented out for the full five years and meets all eligibility requirements.

Who is Eligible for the Secondary Suite Program?

To be eligible for the program, the homeowner must meet certain requirements, including:

• Own and occupy the home;
• Construct a new rental unit within their primary residence;
• The rental unit must meet local zoning and building code requirements;
• The rental unit must be offered for rent at an affordable rate to tenants with moderate incomes.

What are the Benefits of the Program?

The program provides several benefits to homeowners who take advantage of it. First and foremost, the forgivable loan of up to $40,000 can be used to offset construction costs of a secondary suite within a primary residence, making the process more affordable. Additionally, homeowners can generate rental income by renting out the additional living space, which can help them pay off their mortgage faster or supplement their income. Also, the rental unit may be suitable for family members or friends who can’t afford a rental that meets their needs. Finally, homeowners who take advantage of the program are contributing to the creation of more affordable housing options in British Columbia.

How to Apply for the $40,000 Forgivable Loan Program?

To apply for the program, eligible homeowners must first ensure that their rental unit meets all zoning and building code requirements. Next, they must complete the BC Housing’s Secondary Suite Program application form and attach the necessary supporting documents. The application will be reviewed, and eligible homeowners will be contacted with further instructions.

Conclusion:

The BC Government Secondary Suite Incentive Program is an excellent opportunity for homeowners in British Columbia to create an additional rental space in their primary residence. With the help of a forgivable loan of up to $40,000, building a secondary suite can be more affordable and accessible. The program’s focus on helping provide affordable rental housing for moderate-income renters is a critical step towards addressing the housing crisis in British Columbia. If you’re a homeowner considering adding a rental unit to your home, take advantage of this program to save money while investing in the future. Contact us for more details TODAY!

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Canadian Mortgage Charter

As part of their fall budget update, the Canadian government has recently introduced a new mortgage charter for the country. The charter is aimed at regulating the mortgage industry in Canada, an industry that has faced some turbulence in recent times due to rising interest rates and a slowdown in the Canadian housing market. While the new mortgage charter has been introduced with the aim of protecting the interests of homeowners and making it easier for them to navigate the Canadian mortgage industry, it also has its fair share of pros and cons.

The Pros

One of the main benefits of the new Canadian mortgage charter is that it aims to make the Canadian mortgage industry more transparent. This means that mortgage brokers and lenders will be required to provide borrowers with more information about the terms and conditions of their mortgage. This will make it easier for homeowners to understand the terms of their mortgage and avoid any hidden charges or fees. The charter will also help protect borrowers from predatory lending practices, which have been a problem in the past.

Another pro of the Canadian mortgage charter is that it will make it easier for borrowers to transfer their mortgage from one lender to another. This will increase competition within the industry and put pressure on lenders to offer better rates and terms to borrowers. It will also make it easier for borrowers to find a mortgage that fits their specific needs and preferences.

The Cons

While the Canadian mortgage charter has many benefits for borrowers, it also has some downsides. One of the main concerns is that the new regulations may make it more difficult for some borrowers to get a mortgage. This is because lenders may become more cautious about who they lend money to, due to the new regulations and guidelines. This could make it harder for some borrowers, particularly those with lower credit scores or unstable income, to find a lender willing to work with them.

Another concern is that the new regulations may result in higher mortgage rates for some borrowers. This is because lenders may pass on the extra costs of complying with the new regulations to borrowers in the form of higher interest rates or fees. While this may not be an issue for borrowers with strong credit scores and high incomes, it could be a problem for those who are already struggling to make ends meet.

Conclusion

Overall, the new Canadian mortgage charter has a lot of potential to help borrowers navigate the mortgage industry and protect them from predatory lending practices. However, it also has some downsides that could make it harder or more expensive for some borrowers to get a mortgage. As with any major regulatory change, it will be important to monitor the impact of the new mortgage charter on the Canadian housing market and make adjustments if necessary. In the meantime, borrowers should make sure to carefully read and understand the terms of their mortgage and work with a reputable lender to ensure they are getting a fair deal.

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Bank of Canada holds interest rate steady

Are you a homeowner or homebuyer who is juggling budgeting for your mortgage amidst an ever-changing economy? We have some news for you: The Bank of Canada has announced that it will hold its benchmark interest rate steady. This positive news could mean savings in your pocket and lower overhead expenses on housing if inflation. Assuming of course that as projected by the Bank, slows down this year. Read on to learn more about how this decision can affect you as a homeowner or prospective buyer.

The Latest Bank of Canada NEWS

The Bank of Canada held its breath, keeping interest rates at a steady 4.5 per cent, bracing for the impact of its previous hikes to settle. Economists were expecting this decision, after the bank’s announcement that it would take a break from raising rates. The bank had raised rates eight times between March 2022 and February of this year. Stemming from their aggressive campaign to increase rates after the pandemic’s early days, when they slashed the benchmark lending rates. With inflation soaring, Canada’s inflation rate reached its highest level in decades, peaking at over eight per cent in June 2022. This before cooling to just over five per cent by February 2023. Stay tuned for next week’s data on March where it is expected to show continued progress downward.

What’s Next for the Bank of Canada RATES?

The Bank of Canada has made the wise decision to hold off on any major policy changes. At least until further notice due to the cooling of inflation. The latest Monetary Policy Report predicts that the official inflation rate will dip to three per cent in the coming months.  Eventually, it is expected to reach the bank’s target rate of two per cent next year. Governor Tiff Macklem acknowledged the relief that Canadians will experience, but also emphasized that their work is not done until price stability is fully restored. The destination is clear and the bank is determined to stay the course.

Have Rate Hikes worked to battle Inflation?

The bank’s top officials are keeping a close eye on inflation. They indicate they will not hesitate to increase rates again if necessary. However, it is confident that the current rate hikes have been effective in achieving the desired results. Deputy Governor Carolyn Rogers did note that the previous increases have already slowed down consumption and restored economic balance.

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Mortgage Pre-Approval Survival Tips

Buying a home is an exciting experience and a significant financial decision. It’s important to take every precaution to ensure that it will be a successful purchase, and one of the best ways to do this is through mortgage pre-approval. Mortgage pre-approval gives you guaranteed access to the funds needed for your desired home loan, as long as you are approved by your chosen lender. To make sure your mortgage pre-approval process goes smoothly, we’ve gathered some useful Mortgage Pre-Approval survival tips that you should know. Read on to learn more about how you can successfully navigate the mortgage process with ease.

Finding a Home Before Getting Pre-Approved

The excitement of house hunting can easily cloud the importance of getting a mortgage pre-approval. Unless you plan on paying cash for the property, it’s crucial to prioritize this step. You wouldn’t want to fall in love with a dream home only to have your lender reject your application. Taking the time to get pre-approved first is the smarter way to approach the house hunt. Don’t leave your search to chance – get pre-approved and confidently begin your search for the perfect abode.

Do Not Use All Your Cash on the Down Payment

Buying a home is a major investment and requires a solid financial plan. Saving up for a down payment is just the beginning – there are other costs to consider such as earnest money, closing costs, and moving expenses. First time home buyers should not rely on the seller to foot the bill for all closing costs. Furthermore, owning a home comes with the added responsibility of maintenance and repairs, so it’s important to budget accordingly. It’s wise to leave some funds in savings to prepare for unforeseen repairs. Don’t let unexpected expenses catch you off guard – be prepared with a comprehensive financial plan for your home purchase.

Buying a Home is MUCH MORE Than the Monthly Payment

Buying a home is an exciting process, but it’s important to remember that there are costs beyond the down payment and monthly mortgage payments. Lenders often require buyers to prove they have funds for closing costs, which includes money for property taxes and homeowner’s insurance. If the buyer doesn’t make a 20% down payment, they will also have default mortgage insurance which will be added to the mortgage principal. And these are just the basics! Homeowners also face expenses like association dues and higher utility bills. It’s important to budget for all of these costs to ensure a smooth transition into homeownership.

No New Debt After Getting Pre-Approved

The news of being pre-approved for a home loan can give people a sense of invincibility. Suddenly, the world seems full of possibilities and obstacles seem conquerable. However, it’s crucial to remember that this pre-approval is based on the borrower’s current debt situation. Financing a new car or furniture may seem enticing, but it can actually jeopardize the pre-approval status. Any new debt can cause lenders to reconsider and potentially cancel the pre-approval altogether. So, it’s important to resist the temptation to make big purchases before finalizing the home loan process.

Do Not Try to Save Pennies by Doing Everything Yourself

For first-time home buyers, the excitement of purchasing their dream home can lead to foolish decisions like handling all real estate negotiations themselves. The consequences of skipping important steps like a home inspection and property survey could be catastrophic. This is arguably the most important mortgage pre-approval survival tip! A seasoned agent can help locate the perfect home, negotiate a fair price, and entertain any potential issues that may arise. Keep in mind, the agent representing the seller is working in their client’s best interest, not the buyer’s. That’s why it is critical for buyers to have their own agents to advocate for their needs.

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Tax-Free First Home Savings

The Canadian government has introduced a new and exciting program called the Tax-Free First Home Savings Account, which will launch on April 1st, 2023. The program is designed to help young people save for their first home purchase by offering tax savings benefits. Contact Callum Greig today to get the ball rolling on this initiative.

How it Works – Tax-Free First Home Savings

Under the program, eligible members can put away up to $40,000 per person or $80,000 per couple in a special tax-free savings account. The balance in the account can be accessed anytime without incurring taxes when it comes time to make your down payment on your first property purchase. This program is in addition to regular TSFA accounts which also enjoy tax-free savings status. AND just like an RSP contribution the Tax Free Savings is also tax deductible.

This program is great news for those trying to save for their first home. It will allow them to accumulate greater savings than with other programs that only offer tax credits or rebates. Plus, you won’t have to worry about paying taxes when you withdraw funds from the account for use as a down payment on your home.

Who to call – Tax-Free First Home Savings

In addition to the tax advantages of this first home savings account, members also have access to financial advice from mortgage brokers who are knowledgeable about this type of saving product and familiar with its various rules and regulations. This service can be invaluable when determining the best financing options available and applying for mortgages.

Bonus!

Individuals can also combine their Tax Free First Home Savings Account with other incentives such as RSP HB Plan. This will make it easier to access additional funds which will go towards their dream home’s down payment. Finally, prospective homeowners have more flexibility when planning their finances and making decisions around purchasing.

Are thinking of buying your first home and looking for ways to save money before taking out a mortgage loan? Look no further than the Tax Free First Home Savings Account. Inquire today to learn more about this incredible opportunity.  Plan ahead and start benefiting from these amazing tax savings benefits come April 1st 2023.

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The Basics of Canadian Mortgages

 

The Basics of Canadian Mortgages

Introduction

Navigating the world of mortgages in Canada can be overwhelming, especially for first-time homebuyers. Understanding the basics of Canadian mortgages, including key terminology and options available to you. This blog post will discuss essential information about Canadian mortgages, including mortgage types, rates, pre-approvals, and how to qualify for a mortgage in Canada.

Mortgage Basics in Canada

A mortgage is a loan that borrowers take to finance the purchase of a property. In Canada, mortgages typically require a down payment of at least 5% of the property value. The higher the down payment, the less you will owe on your mortgage, and the lower your monthly payments will be.

Types of Mortgages in Canada

There are two main types of mortgages in Canada: fixed-rate mortgages and variable-rate mortgages. Fixed-rate mortgages have an interest rate that remains constant for the entire term. They offer stability as your mortgage payments will be the same for the duration of your term. In contrast, variable-rate mortgages have an interest rate that fluctuates based on the lender’s prime rate. Although variable-rate mortgages may offer lower initial rates, they carry inherent risks due to market fluctuations.

Mortgage Terms and Amortization

The mortgage term is the duration of your mortgage agreement, typically ranging from 6 months to 5 years in Canada. After your term expires, you can renegotiate your mortgage with your lender or move to a new lender at a new rate. Amortization is the length of time it takes to pay off your mortgage in full. In Canada, the standard amortization period is 25 years, but longer periods of up to 30 or 35 years are available to those with larger down payments. Amortization is a key part of the basics of Canadian Mortgages.

Mortgage Rates in Canada

Mortgage rates in Canada can vary depending on your chosen lender, your credit score, the size of your down payment, and other factors. It’s essential to shop around and compare mortgage rates from different lenders to find the best deal for your financial situation. You can consult with a mortgage broker, conduct online research, or speak directly with banks and credit unions to gather and compare mortgage rate quotes.

Mortgage Pre-Approvals

Before beginning your house hunting process, it’s a good idea to get a mortgage pre-approval. A mortgage pre-approval is a commitment from a lender to provide you with a mortgage up to a specific amount, based on your financial information. This pre-approval gives you an idea of the price range you can afford and could potentially strengthen your offer when negotiating with sellers.

Qualifying for a Mortgage in Canada

When applying for a mortgage, lenders will consider several factors, including your credit score, income, employment history, and debt-to-income ratio. Lenders use these factors to determine how much they are willing to lend you and at what interest rate. It’s crucial to have good credit history and a stable income to qualify for a competitive mortgage rate.

In conclusion, understanding the basics of Canadian mortgages is essential when buying property in the country. Familiarize yourself with mortgage types, terms, and rates to make informed decisions to meet your needs. It’s also crucial to have a mortgage pre-approval and maintain good financial standing to qualify for a mortgage in Canada. Education and research are essential for a stress-free and successful home buying experience in the Canadian real estate market.