Ruby Cheung Mortgages Newsletter October 2016 Edition No. 3

Ruby Cheung - Mortgage Broker

Centum Pacific Mortgages Inc.

msrubycheung@gmail.com
604.720.6176
http://www.rubycheung.ca/
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October Foreclosures

 

Oct Burnaby Attached
Oct Coquitlam Attached
Oct New West Attached
October Abbotsford Attached
October Chilliwack Attached
October Chilliwack Detached
October Langley Attached
October Langley Detached
October Mission Detached
Oct Pitt Meadows Detached
Oct Port Moody Attached
Oct Richmond Attached
Oct Surrey Attached
Oct Surrey Detached
Oct Vancouver Attached
Oct Vancouver Detached
Oct West Vancouver Attached

Above is a list of foreclosures in the Lower Mainland.There are some great deals to be had for either your own home or as a rental property. Check them out at the links above.

The main risk of purchasing a foreclosure property, is that it is purchased on an “as is, where is” basis. Sometimes fixtures such as lights, faucets and cabinets may have been removed from the property or are damaged. The property is often left unclean with unwanted trash and items left behind.

You must do your due diligence even more so when buying these properties.There is usually a good reason that a foreclosure is not selling ... but occasionally (once you identify the issues) you can turn these lemons into your personal "little gold mines!"

Do your homework before investing

Above is a list of foreclosures in the Lower Mainland.There are some great deals to be had for either your own home or as a rental property.  Check them out at the links above.

The main risk of purchasing a foreclosure property, is that it is purchased on an “as is, where is” basis. Sometimes fixtures such as lights, faucets and cabinets may have been removed from the property or are damaged. The property is often left unclean with unwanted trash and items left behind.

You must do your due diligence even more so when buying these properties.There is usually a good reason that a foreclosure is not selling ... but occasionally (once you identify the issues) you can turn these lemons into your personal "little gold mines!"

Do your homework before investing!



2016-17 Housing Forecast

 

The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity in 2016 and 2017.

Sales in the Lower Mainland of BC have braked more abruptly than anticipated, reflecting buyer uncertainty following the introduction of the new property transfer tax on Metro Vancouver foreign home buyers.

By comparison, transactions in Ontario have held steady in recent months near record levels and have yet to show signs of cooling.  

Taking these factors into consideration, sales forecasts have been revised upward for Ontario and downward for British Columbia.

British Columbia is still forecast to post the largest annual increase in activity this year (+14.6 percent) notwithstanding that much of its strength is in the rear-view mirror at this point.

Year-over-year average home price in BC showed tentative signs of moderating. As a result, the average home price forecast is revised lower for B.C., reflecting a bigger than anticipated decline in higher-priced single detached home sales in the Lower Mainland region.  



13 Proactive Ways to Increase Rent & Add Value to Your Rental Property

 

As a real estate investor Buy and Hold is prudent since it is difficult to time the market. If you plan to be a real estate investor it would be beneficial to know how to increase the rent and the return from your rentals. Doing so encompasses all factors of property management.

Leasing faster, and to higher quality tenants will definitely increase your return. Renting for a higher price and increasing the rent upon renewal will as well. And so will preventing maintenance problems before they come up, as well as increasing tenant retention. But the question I usually get is how do we achieve all of these ends?

Here are 13 of the best ways you could increase the rent and value of your rental property:

1. Improve the appearance of the front of the property for curb appeal

2. Quality Advertising with high quality pictures 

3. Make sure the unit is well lit and smells good for showings

4. Don't just show the property and let the tenant walk through....sell it to them

5. Don't start your rent too low

6. Screen, screen, screen and then screen more. Bad tenants always diminish your

     cash flow.

7. Always raise rent upon lease renewal

8. Charge more for month to month rentals

9. Allow for pets and charge pet rent

10. Be on top of regular and preventative maintenance

11. Maintain contact with tenants in other ways like newsletters and social media

12. Charge for amenities and perks

13. Increase renewals with a resident program

The more you can raise the rents, lower costs, and increase retention, the better your bottom line will be. Good management can save bad investments, and bad management can destroy good ones.

Be proactive in increasing your rental returns and Happy Investing!



Cool App that Allows you to Text without Wi-Fi or Data

 

I just came across this app and I had to share with you! This is the answer we have all been looking for when headed across the border or abroad. This app allows you to text without having wifi or a mobile plan available. The kicker......it's FREE and you can be completely OFF THE GRID. However it does have its limitations since it  is not secure or private.

I am not a tech guru but read all about on Business insider: More About Fire Chat



Canadian Thanksgiving

 

How Canadian Thanksgiving Began

The origins of Canadian Thanksgiving are more closely connected to the traditions of Europe than of the United States.

Long before Europeans settled in North America, festivals of thanks and celebrations of harvest took place in Europe in the month of October. The very first Thanksgiving celebration in North America took place in Canada when Martin Frobisher. an explorer from England, arrived in Newfoundland in 1578.

He wanted to give thanks for his safe arrival to the New World. That means the first Thanksgiving in Canada was celebrated 43 years before the pilgrims landed in Plymouth, Massachusetts!



New Rules to Qualify for a Mortgage

 

This week, Department of Finance Minister Bill Morneau announced further regulations in the Canadian Housing market.  These changes include:

Standardizing lending criteria for high and low ratio mortgages, including a Mortgage Stress Test Closing loopholes for capital gains exemptions for non-residents Consulting industry stake holders to ensure risk is properly distributed, including possible risk sharing

 

The first point above is the one causing the biggest uproar in the industry this week.  Here is how it can affect you:

 

Mortgage Stress Test

 

Starting October 17th 2016, all new insured mortgages (this includes all mortgages with less than 20% downpayment) will be required to qualify for a new mortgage at the Bank of Canada Benchmark rate of 4.64% instead of the Contract Rate.

 

What this means, is if you were planning to buy a home with less than 20% downpayment, the mortgage amount you qualify for has just drastically reduced.  This new rule was imposed by the Department of Finance and applies to all Canadian mortgages.

 

Let’s take a look at what that means to an average consumer:

Example: A young couple are planning to buy their first home.  They earn $60,000 combined family income, with a $15,000 balance on their line of credit and no other debt.  The estimated property taxes of their new home are $2500 per year and Heat will cost them $100 per month on average.

 

Under the Old Rules, they qualify for a mortgage of $279,036.  With 5% down that’s approximately a purchase price of $285,000.  This example is calculated under the old rules and applying the Contract Rate, which today’s 5 year fixed rate is approximately 2.44%.

 

Under the New Rules starting October 17th 2016, they now only qualify for a mortgage of $221,219.  With 5% down that is approximately a purchase price of $225,000.  This example is calculated the government enforced Bank of Canada Benchmark Rate of 4.64% to qualify.  Although you are still only paying the contract rate of 2.44% interest, you must now qualify using a “stress test” calculation, effectively meaning average consumers now have about 21% less buying power than they did last week.

 

If you are currently pre-approved for a mortgage, you should aim to complete a purchase offer and have an approval in place before October 17th.  If this is not possible, you should talk to your broker or banker about what you now qualify for under the new mortgage rules as it could be less than you are pre-approved for now.

 

Part of the new changes also involves standardizing rules for high ratio and low ratio mortgages.  High ratios are those with less than 20% downpayment, and low ratios are mortgages with 20% downpayment or equity (in the case of refinancing).

 

Genworth Canada has stated that approximately 1/3 of it 2016 insured business would have difficulty qualifying under the new rules.  This is a startling number.

Genworth published a great primer on what those requirements are:
 

A loan whose purpose includes the purchase of a property or subsequent renewal of such a loan;A maximum amortization length of 25 years;A maximum property purchase price below $1,000,000 at the time the loan is approved;For variable-rate loans that allow fluctuations in the amortization period, loan payments that are recalculated at least once every five years to conform to the original amortization schedule;A minimum credit score of 600 at the time the loan is approved;A maximum Gross Debt Service ratio of 39 per cent and a maximum Total Debt Service ratio of 44 per cent at the time the loan is approved, calculated by applying the greater of the mortgage contract rate or the Bank of Canada conventional five-year fixed posted rate; and,A property that will be owner-occupied.

 

As a homebuyer today, brace yourself for the upcoming changes and be prepared by re-qualifying for your pre-approved mortgage as soon as possible so your dream home doesn’t slip through your hands due to the new rules.

 

For homeowners, be prepared for tougher rules for qualifying to refinance your home, take out equity, or buy an investment property.  Having your mortgage broker or other professional calculate the figures for you, will allow you to continue your homeownership dreams stress free.

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501688
My address is:
Ruby Cheung
Centum Pacific Mortgages Inc.
421 Pacific St
Vancouver, V6Z 2P5
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