MUST READ - NEW MORTGAGE RULES

If you were planning on purchasing your home with less than 20% downpayment (meaning you are putting down as little as 5%)….. the mortgage amount you could qualify for has significantly decreased.

This new rule was imposed by the Federal Government to ‘ensure a stable housing market’.

What it really does…..limits the borrowing power of the regular person.

EXAMPLE: Assuming 5% down

If you earn $50,000/ year salary….you could qualify for a mortgage of approximately $333,000. Purchase price of $348,000

As of October 17, 2016……the max mortgage you can qualify for is approximately $262,000. The purchase price is approximately $275,000.

This decreases your purchasing power by 21%.

This might work in the rest of Canada, but in Vancouver with the non-existent rental supply now making it harder for the regular person to own their home……it is only to get harder and harder to put a roof over your head.

If you have 20% downpayment, no worries…….

BUT….if you have been sitting on the sidelines with 5% downpayment….you should jump into the market.

CALL or EMAIL us if you would like to know what you can qualify for and how this federal law will affect you!

Details here:  

http://www.fin.gc.ca/n16/data/16-117_1-eng.asp

Only Freak Out With Less Than 20% Down

Everyone and their dog has probably read about the crazy real estate market...folks, it's just another roller coaster.  The media makes it sound like an earthquake had hit the real estate market.  In reality, it's just another bump and in 8-10 years from now, this will happen again.

The only thing that remains constant is change.  We will all adapt and life goes on.

For now, here is the low-down on what's happened and how it may affect you:

If you have less then 20% down, you are going to lose 20% of your purchasing power. 

This means the following:
If you wanted to live in Vancouver, you are now living in Burnaby.
If you wanted to live in Burnaby, you are now living in Coquitlam.
If you wanted to live in Coquitlam, you are now living in Langley.
If you wanted to live in Langley, you are now living in Abbotsford.
If you wanted to live in Abbotsford, you are now living in Chilliwack.  
and so on...

Overall, if you do not have 20% down, you are moving East.

You have till November 30th to have an offer on a property to bypass this.  

For everyone else with access to 20% down, we have lenders that will not be affected by these rule changes.   Call, text or email me if you want some assurance on your situation.

Michael Campbell Commentary

Click to Listen to Michael Campbell's Commentary

The new mortgage rules put in place by the Federal Government have the potential to cripple the real estate industry Canada wide. The timing couldn't be worse as BC's new tax has triggered Vancouver's serious real estate slowdown.

Great Article Regarding the New Lending Requirements!

Written by VERICO Economist Michael Campbell:

The Ghost of the Sub Prime Mortgage Crisis Haunts the Finance Minister

By now you will have seen the details of the significant changes to the mortgage market announced by the Finance Minister but how will they impact the market?

In a nutshell – it will be big. The changes fundamentally impact the demand side of the supply/demand relationship. Over that past 7 years, market demand at the entry and mid level have been fueled by record low interest rates. The new regulations are the equivalent of a significant increase in rates.

By forcing all insured borrowers to qualify based on the posted rate of 4.64% instead of the actual negotiated rate, the changes are the equivalent of a jump of 2% in mortgage rates.  Time will tell how many people, especially first time buyers and other low equity buyers will be forced out of the market with most estimates centering around 1 in 5 but a much higher percentage may see their mortgage limit drop.

In major centers like Vancouver, Calgary and Edmonton, the timing couldn’t be worse.  Following a dismal August, Vancouver’s September numbers are just as bad with single detached home sales plunging 72% compared to September, 2015.  Calgary and Edmonton have been slow for far longer. While many rural communities never experienced anything approaching Vancouver-like gains over the last 5 years, they’re all subject to the rule changes.

Given that Vancouver’s city government is going forward with their new vacancy tax and the provincial government has the foreign buyers tax as well as tax changes for foreign buyers in the new regulations, you’d be forgiven for thinking government won’t rest until they do for real estate what they’ve done for the energy industry.

Two Surprises

It’s amazing that the changes come amid an outcry over affordability and will put home ownership farther out of reach for many first time buyers, especially in cities like Vancouver and Toronto.

Secondly, the changes come on the heels of a slew of downward revisions to Canada’s economic growth. The latest came today from International Monetary Fund, which now pegs Canada’s growth at 1.2% this year and 1.9% next year. The latest changes will put further downward pressure on the economy given that real estate is the most important industry in 7 out of 10 provinces.

The Bright Spot

The one short term bright spot is that people with an existing mortgage agreement and those who get a deal done prior to the October 17th start date are not subject to the new regulations but have to have the mortgage funded by March 1, 2017. That could result in a buying surge for those scrambling to avoid the new rules.

In Conclusion

Clearly the Finance Minister is worried about all the mortgage insurance risk for CMHC and exposure for the banks. Fair enough but at what cost? Right now it looks like reduced activity, erosion of existing homeowner’s equity, hurting many first time buyers and reeking havoc for non-bank lenders.

Canadians Are Spending More on Taxes

Canadians now spend more on taxes than on food, clothing and shelter combined according to the most recent study by Fraser Institute.

The study concludes that visible and hidden taxes would have been equal to 42.4% of income for an average Canadian family in 2015.

By comparison, the study estimates the average Canadian family spent about 37.6% of income on food, clothing and shelter.

Read the rest of the story here. 

Peak Of the Market Line of Credits

If this is the peak of the market for Vancouver, I'd suggest getting a line of credit behind your mortgage so you can get access to funds whenever you want.  

Odds are there is now a ton of new equity behind your properties that you can get access to for the future. 

There is a 1 month window in where appraisers can use comparables from 2 months ago (highest market value) to determine the value of your property.  

Higher the appraisal, more of a line of credit you can get.    

The above picture shows what math was involved to figure this out :).

Refinance Your Mortgage like a Pro!

Refinancing your mortgage is an excellent opportunity to get your household finances in order.  Here are a few ideas to help you do it like a pro.

Determine Your Goals – This may seem somewhat simple, but consider that your mortgage is often the single biggest monthly expense and debt for your household.  How can you set up your mortgage so that it is working at its very best for your financial situation?  Consider these five goals to make your mortgage work for you.

Pay off my mortgage quickly – Is your goal to pay down the debt so future you can live mortgage free? By switching to Accelerated bi-weekly payments, you can knock years off of your mortgage. If you switch to Accelerated bi-weekly payments, and increase your mortgage payment by 5% every year, you can pay off your twenty-five year mortgage in just over fifteen years!

Maximize Cash flow – Has your life changed in the last five years? Does aggressively paying down the mortgage not sound as great as it once did, now that you have additional expenses and other dreams? Consider increasing your mortgage amortization and lowering your payments to put more money in your pocket month-to-month. 

Take out Equity – If you are planning to make an investment or property renovations, you can use the equity that you have accumulated in your home (through appreciation or paying down your mortgage) and put it in your pocket. Lenders will let you borrow up to $200K or up to 75% of the value of your home and add it onto your mortgage, allowing you pay back the equity over a longer period of time.

Set up a Line of Credit – Are you planning a renovation or need an infusion of cash, but would like to pay back your loan at your own pace? Consider a Home Equity Line of Credit, which is a line of credit that is secured to the value of your home. You will get access to equity in your home at a lower interest rate than your bank’s unsecured Line of Credit or credit cards.  It can be a flexible financing option.

Consolidate debt – Do you have a credit card that is running close to the limit that you don’t seem to able to pay down? What about your unsecured Line of Credit? Put all these debts together in your mortgage and pay down your debt at a lower rate over a longer period of time.

Have You Considered Refinancing to Pay off Debt?

Have you considered refinancing to pay off debt

This may be the perfect time to get a fresh start by refinancing your mortgage and freeing up some money to pay off that high-interest credit card debt.  It is a sellers market, and many of my clients' homes are appraising much higher than their initial purchase price, allowing them to wrap some high interest debt at today's low rates.

How the New Foreign Ownership Is Affecting Canadians

COQUITLAM, B.C. - Cardboard moving boxes are piled about the living room of an otherwise half-packed house nestled on a tree-lined residential street in a quiet Vancouver-area suburb _ a scene frozen in time that the home's owners blame on British Columbia's controversial new tax on foreign buyers.

Read the full story here;

http://www.repmag.ca/news/how-the-new-foreigner-tax-is-affecting-canadian-homeowners-212265.aspx

BC Adds 15% Property Tax to Foreign Buyers

I'm sure you've all heard of this new tax and have read negative stories. I thought I'd put a recap here. 

The new 15% Property Tax to Foreign Buyers came into effect on Tuesday, August 02, 2016. This new tax applies to all Metro Vancouver residential properties purchased by foreign nationals. The bill was passed unanimously without any proposed amendments brought forward by the Official Opposition and despite concerns expressed by many groups.

This meant Residential Real Estate transactions involving foreign buyers in the Greater Vancouver and the Fraser Valley communities like North Delta, Langley, Surrey and White Rock are subjected to the additional 15% PTT. Real Estate transactions, including pre-sales, which completed on August 2 or after are subject to the tax.

The foreign buyers who are caught in the middle of all this will have to come up with an extra $300,000 on a $2 million purchase on closing.

What really gets me is that, even those who have had signed contracts in place for weeks or months prior to this new law, will find they are in line for an unexpected 'kick in the teeth' if their completion dates are after Aug 2. It wouldn't surprise me if our government will be in line for a multitude of lawsuits shortly.

Personally, I feel that is totally unfair and it puts a black mark on all Canadians. Is it fair play to change the rules after a contract has been signed? How would you feel if you were buying a house, had all subjects removed and were just waiting for the completion date and then found out you need to pay another 15%?

Please read the rest of the article here.

Despite the concerns shared by many in the industry, the provincial government has decided to implement a tax in a way that will negatively affect our local communities' ability to attract workers, and will generate more stress and confusion in an already busy housing market and result in unexpected domino effects.

The other issue which is coming up is our provincial government could be in violation of NAFTA with the implementation of this new tax. Hopefully we taxpayers don't end up paying for the government's mistake.

Read more on the NAFTA violation here as reported by Financial Post.

What They Didn't Teach Us In School About Money

Here’s some common sense about money that kids should hear from their parents.

Don’t confuse net worth with self-worth. It’s only natural to want expensive things. But it’s more important to feel good about yourself, regardless of how much money or stuff you have. People respect you for the person you are, not your flashy lifestyle.

Make the best of the hand you’re dealt. Some rich, successful people claim they earned it. In reality, our destiny is shaped by luck, parenting, health, access to education, and economic factors. Keep this in mind before judging others—or yourself.

Learn from scarcity. Feeling poor at some point in your life helps teach you the value of money. You quickly learn the difference between needs and wants, how to shop for bargains, how to fix what’s broken, and how to handle life’s ups and downs.

Make your goals about more than money. You may think once you’ve saved a million dollars, everything will be great. But then you only want more! Instead of focusing on money, make your goals about fulfillment for you and your loved ones.

Don’t be afraid to change plans. Just because you decided on a career when you were 18 doesn’t mean it has to be a lifetime sentence. Try a few things, stay flexible. If your first career doesn’t fit, move onto something more inspiring.

Owning Versus Renting

It's all about timing

There are many pros and cons to both owning a home and renting a home and this is especially a pressing issue in the case of Vancourites with rising housing (and living) costs.

Not that's it's ever a bad idea to buy, but if buying causes you to be strapped for cash and puts you in jeopardy of walking a very fine line every month with regards to paying basic bills, then it might not be the right time.

The most important thing is to sit down with your advisor and look at the overall picture - see how much you have, how much you can save, and how much you can afford to put aside for not only a downpayment, but also the monthly mortgage, property tax and possibly strata fees that come with being a home owner. When you have a written financial plan created with specific goals in mind, you'll find that you achieve them not only much quicker, but also with less stress.

Don't Give Money Direct To Developer for Pre-Sales

Here is an interesting story of a development going bad in Edmonton and how it was saved.  You can view what happened with the link below.

The moral of the story is do not give your deposits direct to a developer.  Give it to a lawyer to be held in trust.  

http://edmontonjournal.com/news/politics/david-staples-generous-developer-comes-to-the-aid-of-screwed-condo-buyers

First Time Home Buyers' Tax Credit Eligibility

Lots of people ask about this, so here is the 4-1-1 on the First Time Home Buyers' Tax Credit.

Did you buy a new home in 2015?

You can claim an amount of $5,000 for the purchase of a qualifying home acquired in 2015, if both of the following apply:

- you or your spouse or common-law partner acquired a qualifying home; and
- you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).

Not sure if you're eligible? Check out the video here:

http://www.cra-arc.gc.ca/vdgllry/ndvdls/menu-eng.html?clp=ndvdls/hmbyrs-eng&fmt=mp4

Creating your Home's Flow & Energy

Feng Shui video

Imagine improving your health, grades, & relationships just by rearranging your furniture or coordinating the colours of your room.  Well, all of this is possible according to the ancient study of Feng Shui.  

The idea of Feng Shui revolves around the belief that the earth's energy, called Chi, should flow freely throughout space, creating peace.  

Feng Shui originated in ancient China & continues to guide how buildings are designed & furnished.  Experts on the topic note that, in order to see positive affects, you should always keep a positive attitude to encourage positive Chi to flow naturally through your room or house.  

So, what can you do to improve the energy in your dorm room or apartment or home?  

One good place to start is by looking at the Bagua Map illustrated. To utilize the map in your room, stand in the doorway facing in, & imagine the bottom of the map (black) is the wall next to the entrance; if your door does not face North, just rotate the map so the appropriate direction is closest to you.  The map will point to which corners & areas of the room correspond in the picture.

Client vs. Customer - There is a Difference!

The most important difference between a “CUSTOMER” and a “CLIENT” is that a client receives ADVICE from a realtor!!! Realtors cannot legally give advice to a customer...this is reserved for buyers or sellers who have a contractual relationship with the Realtor.

That means only Buyer Clients can get advice on prices of homes they viewed, guidance on how to structure an offer in their own best interest, as well as many, many other questions and concerns that need to be addressed.

Being just a customer is not an advantageous position to find yourself in!

So, do not be confused that the friendly real estate salesperson driving you around showing you homes is automatically on your side.

Make no mistake, unless you have a written agency agreement with that salesperson, the real estate act and the law of agency obliges them to act in the best interests of the seller, not you!

So if you choose to disregard this opinion and be sold by the Seller's agent, "Let the BUYER BEWARE."

DIY Kids Playhouses

Under the Stairs Playhouse Ideas

Low on space, but looking for a cool place to send your child/furbaby/husband when you are looking for quiet time? I absolutely love these indoor playhouses built under stairways.  Don't forget- if you need some extra funds to do these or other renos, let's chat! :)

Getting Ready To Sell Your Home?

Getting Your Home Ready to Sell Checklist

The Spring real estate market is upon us and many people are going to be listing their homes or rental properties for sale soon. Here's a great checklist not only for those getting ready to sell their home like us, but also for those shopping the market this Spring. 

What Do I Do When My Mortgage Is Up For Renewal?

Occasionally I will have a client call to tell me that their mortgage is up for renewal at their bank within 4-6 months time. The bank is "allowing" them to renew early at a certain rate, but they want to know if they are getting a good "deal".

Here are some things to think about when your mortgage is up for renewal:

-Do you have any high interest credit cards or loans you would like to roll into your mortgage?

-Any reno needs/wants coming up within the next 1-3 years?

-Any plans to move or maybe buy an investment property in the next few years?

-How does your existing lender calculate mortgage penalties?

No matter what, you have time, so ask more questions and don't succumb to bank pressure!  At the very least, give me a shout and I can tell you whether or not the interest rates offered are decent.  We can also discuss what other options are out there. You might be surprised!

Be patient. It could save you money!

The 7 Best Bars on Commercial Drive

Biercraft Tap and Tapas Bar

The name says it all – come, drink beer and eat tapas. Biercraft Tap and Tapas Bar does not distinguish itself with its food or wine selection. Although there is a fantastic brunch served with an exceptional eggs on cornbread that rival many other breakfast places in the area. But what truly sets Biercraft apart is the beers. While the accent seems to be on Belgian ales, other continental European and ‘craft’ beers from North America can be found in plenty on the menu. There are even a few from Japan and France! More than a dozen on tap and a huge variety of bottled beers will leave any beer lover well catered for.

Watch out for: the beer selection and eggs on cornbread

Opening Hours: Monday-Tuesday 11am-11:30pm, Wednesday-Thursday 11am-12am, Friday 11am-11:30pm, Saturday 10am-1am, Sunday 10am-11:30pm

To read about the other 6, check the link below.

http://theculturetrip.com/north-america/canada/articles/the-7-best-bars-on-commercial-drive-vancouver/

March Foreclosures

Burnaby-Attached
Cloverdale-Detached
Commercial-Fraser Valley
Commercial-Greater Vancouver
Coquitlam-Attached
Coquitlam-Detached
Langley-Attached
Langley-Detached
Maple Ridge-Attached
Maple Ridge-Detached
Mission-Detached
New Westminster-Attached
North Vancover-Attached
Port Coquitlam-Attached
Single Family lots Victoria
Surrey-Attached
Vancouver-Attached
Vancouver-Detached
White Rock-Attached

This month there is a definite increase in both detached and attached foreclosure listings throughout the Lower Mainland. Activity has cooled down just a little but still very active.  

Changes to Property Transfer Tax

The Province of British Columbia made a few changes to the Property Transfer Tax rules.

1. There are no changes to the first time home buyer exemption limits

2. All buyers (whether first time buyers or not) no longer pay PTT on purchases of NEW homes up to $750,000 in value; note the buyer must be a Canadian citizen or a permanent resident; there is a partial exemption for homes between $750,000.00 and $800,000.00

3. PTT has changed so that there is now a 3% tax on amounts over $2,000,000.00. The 3% tax is only paid on the amount over $2,000,000.00, not the full price.

So.....if you have an accepted offer on new construction...you just became a little bit richer. 

Full details here: New Rules to Property Transfer Tax Program

February 2016 - Court Ordered / Foreclosure list

January 2016 - Abbotsford - Detached
January 2016 - Coquitlam - Attached
January 2016 - Delta - Detached
January 2016 - Langley - Detached
January 2016 - Maple Ridge - Detached
January 2016 - Mission - Detached
January 2016 - New West - Attached
January 2016 - North Vancouver - Attached
January 2016 -Pemberton - Detached
January 2016 - Pitt Meadows - Attached
January 2016 - Port Coquitlam - Attached
January 2016 - Richmond - Attached
January 2016 - Surrey - Detached

We have short supply of court ordered sales due to the continued hot market.. this trend looks to continue until at least the summer.. 

What Do I Do Six Months Before My Mortgage Is Up For Renewal?

Occassionally I will have a client call to tell me that their mortgage is up for renewal at their bank in 6 months from now. The bank is "allowing" them to renew early at a certain rate, but they wanted to know if I can help them out and provide them with a better mortgage.

Now as a Mortgage Broker, I can guarantee you a rate once we are within a 4 month window of your renewal. So when clients ask me if I can provide them with a better rate 6 months out, I let them know that although rates do not appear to be moving a lot, we would have to wait a couple months for me to provide them with an official rate hold.

Sometimes clients will commit to the bank's offer. Other times they will wait it out, and stick with me.

As it stands today, 100% of the clients who waited a couple months were able to get a better interest rate with me than what the bank was offerring them.

My advice - don't let your bank pressure you into renewing early. Be sure to explore your options. Be patient. It will save you money.

How to Increase my "Credit Score"?

Many people often talk about wanting to increase their credit scores.

Some will pay off their credit cards in full every month; others will choose not to use their credit at all.

Before we can go about trying to increase our credit rating, we must first understand how Debt is calculated.  Check out this article (click linky).

CMHC is set to increase Minimum Down Payment >$500K

By the end of January, the Department of Finance may recommend raising the minimum down payment to 10%. That’s what I’m hearing from a high-level lender source connected with the DoF, who declined to be identified.

Policy-makers are reportedly considering a graduated scale based on either the home value or mortgage amount—something like this:

• $0 to $500,000 requires at least 5% down
• $501,000 to $700,000 requires at least 7% down
• Over $700,000 requires 10% down

Read more... 

December 2015 - Foreclosure (Court Ordered Sales) List

November 2015 - Abbotsford - Attached
November 2015 - Burnaby - Attached
November 2015 - Burnaby - Detached
November 2015 - Cloverdale - Attached
November 2015 - Coquitlam - Attached
November 2015 - Langley - Attached
November 2015 - Langley - Detached
November 2015 - Maple Ridge - Attached
November 2015 - Mission - Detached
November 2015 - North Vancouver - Attached
November 2015 - North Vancouver - Detached
November 2015 - Pitt Meadows - Attached
November 2015 - Port Coquitlam
November 2015 - South Surrey - Detached
November 2015 - Sunshine Coast - Detached
November 2015 - Surrey - Attached
November 2015 - Surrey - Detached
November 2015 - Vancouver - Attached
November 2015 - Whistler - Detached

This months list is at an all time low.. the market is red hot everywhere even throughout the holidays. 

Proactive Property Managament: CRA Rules For Contractors

Statement of Contract Payments - T5018

CRA (Canada Revenue Agency) is cracking down on businesses in regards to contractor services.

If you use the services of a contractor, you are required to submit a T5018 Statement of Contract Payments at the end of the year.

The threshold requirement is $500 per year per contractor. Anything less than $500 per year is considered casual work and the T5018 is optional. CRA will track the contractor’s income tax return to ensure that they claimed the full amount that was invoiced.

Contractors must have more than one client to be considered a true contractor. If you are the only client for a contractor, then they are technically an employee and subject to source deductions.

If the contractor earns less than $30,000 per year, they do not have to apply for a GST number. Any business can apply for a GST number even if they earn less than the $30,000 threshold.

Contractors can get their GST refunded known as GST Input Tax Credits or ITC’s but they need a GST number.