The proposed changes for increasing the qualifying rate, not yet set in stone, is targeting purchases with 20% down payment or more, which equates to about 5% less borrowing power.

This potential change will NOT impact borrowers putting less than 20% down on a purchase.

Did you know you don’t have to be a first-time homebuyer to put 5% down?

The Office of the Superintendent of Financial Institutions (OSFI) is implementing the revision and will impact Banks specifically, this will not affect Credit Unions or many Mortgage Finance Companies so if you are putting 20% down or more you will have options.

So, who does this really impact?

The lower to middle class who’s are barely making the debt servicing ratios as is

Be extra cautious when purchasing pre-construction that you more than easily qualify and are not ‘just squeaking through’.

*Side Note* We do have lenders who will buy on assignment for the current price! (not the original price) With the builder’s consent

Will this slow down our crazy hot market? Probably not…

Did you know how long it takes to get a building permit for a warehouse?

Here is the wait for permits:
South Korea: 28 days
Singapore: 36 days
Denmark: 65 days
Finland: 65 days
Toronto: 249 days

Source: CD Howe institute testifying at Industry committee on the Gatekeeper Economy.

What will help?

Increasing the supply could actually help. The Green-belt has been a cheat sheet for Real Estate investors who have understood we can’t build past a certain and the population keeps rapidly growing in the GTA which boils down to economics 101…supply and demand.

They are planning the changes to take place June 1, if you already have a commitment with a lender and closing after the date it will not affect your ratios.

Winter is coming… With the changing of the seasons, it can be a good time to take stock of your home and ensure you are ready for the winter and it’s colder weather. To help you feel more comfortable, save on bills, and prevent future repair costs, there are some simple things you can do to prepare for the coming season.

Tending to minor problems yourself, or booking a professional now, will save you time and aggravation later. Once the poor weather hit, it makes it harder to tackle home maintenance jobs!

MIND THE GAPS

Search exterior window frames, doors, and siding for cracks and gaps where water could get in. Doors and windows commonly have gaps that let cold in and heat out. Some will be easy to fill or fix yourself but could save you money and damage down the line!

CHECK YOUR PIPES

Checking your pipe joints for leaks that could cause rot and damage will save you trouble in the future. Repair any cracks you find, especially those around electrical outlets and alarm system lines. Another tip is covering your pipes around your hot water tank. This will help them hold the heat in and keep the water warmer longer without fuel. Many inexpensive options are available for all tank and pipe sizes. Make use of blankets if you are on a budget!

INSULATION IS KEY!

On a snowy day go outside and look at your roof; you should see snow on the roof. If you can see your roof that means the attic is not insulated well, therefore heat is escaping and melting the snow. Almost any home can benefit from added insulation; invest in a good solution now to save you in the future. Foam pipe insulation is easy to install and can prevent energy loss and potential water damage from frozen pipes. Plus, if you find you are really having a hard time keeping the heat in, you can consider insulated flooring! Massive heat loss occurs through your floors. Even an added area rug can improve insulation, and make sure to fill any gaps in your flooring with silicone.

SERVICE YOUR HEAT SOURCE

Before Winter starts, be sure to have a professional check and clean your heat sources. You should have your chimney cleaned regularly if heated by wood, or make sure to update your oil heater’s filters and service gas furnaces regularly. A technician can check for both efficiency and hazards.

MANAGE YOUR THERMOSTAT

As tempting as it is to turn your heat all the way up in the winter, proper thermostat management will help you save in the long run. Have your heat sources inspected for efficiency. Also be sure to check for gaps and drafts in your home to help it retain heat much better! By using a thermostat with a timer, you can save even more! Turn it on early so the room heats up in time for use versus cranking the heat when you need to get warm quickly. Have the heat turn off 30 minutes before bed or before leaving the home. If you find you are chilly at night, a safely positioned space heater and closed door will be much cheaper!

CLOSE THAT DOOR!

To keep your heating system from working too hard, close doors when rooms are not in use. This prevents heat transfer out of vacant rooms, and will ensure your active space remains warm and cozy.

CREATE A STORM KIT

A storm kit is a handy source of essential items in the event of losing power. Consider what you and your family might need. Some basics include a flashlight with new batteries, candles, matches, a portable radio, water and snacks. Keep your kit somewhere easy to access.

If you are new to the world of mortgages, you probably have a lot of questions – such as whether to choose a fixed-rate mortgage or variable -rate mortgage. Even experienced homeowners can sometimes struggle with this and may wonder if they made the right choice or if they should switch.

Before we get to that, let me explain the differences between fixed and variable-rate mortgages. A fixed-rate mortgage is just that – a fixed amount of interest that you would pay for the term of the mortgage. A variable-rate, on the other hand, is based on the current Prime Rate and can fluctuate depending on the markets. Fixed rates are typically tied to the world economy where the variable rate is linked to the Canadian economy.

Why Consider a Fixed-Rate Mortgage?
First-time home buyers typically love the stability of a fixed rate when just entering the mortgage space. The pros of this type of mortgage rate are that your payments don’t change throughout the life of the term. However, should the Prime Rate drop, you won’t be able to take advantage of potential interest savings. Adversely if prime increases your fixed rate and payment are protected against the hike.

Why Consider a Variable-Rate Mortgage?
Variable-rate mortgages are based on the Prime Rate in Canada. This means that the amount of interest you pay on your mortgage could go up or down as the economy fluctuates. When considering a variable-rate mortgage, some individuals will set standard payments (based on the same mortgage at a fixed-rate), this means that should Prime drop and interest rates lower, they are paying more to the principal as opposed to paying interest. If the rates go up, they simply pay more interest instead of direct to the principal loan. Other variable-rate mortgage holders will simply allow their payments to drop with Prime Rate decreases, or increase should the rate go up.

Watch out for Penalties!
If you are presently considering converting your fixed-mortgage to a variable-rate mortgage, it is important to consider potential penalties. If you are currently up for renewal, you should have no issues with switching your mortgage, but it is always important to check your contract before making any changes that could “break” the mortgage. Penalties are determined differently depending on your current rate and term and the lender you signed with. Continue reading →