My update on the 2017 Real Estate Market

Mortgages / Real Estate Changes and Outlook for the future real estate market

We have had a very heated real estate market over the last couple of years. We have been seeing year over year increases of over 20% in most areas and across most market types.   The government has been introducing a number of different measures to curtail the rapid increase.  As many of you were aware there were some changes, introduced by the government, that took affect October 17^th. .The number one of these changes was the way buyers with less than 20% would qualify for their mortgage at the current posted rate compared to the discounted rate. The way it works is that, years ago when you wanted a mortgage you would have to negotiate from the rate on the window (posted rate) or now the web site to a discounted rate, the bank depending on the business you were bringing to them would decide how much they would negotiate. Lately most banks offer you the discounted rate right from the start and you would qualify at the rate that they offered you. As of October 17^th, if you are putting down less than 20%, you will still get a discounted rate but will have to qualify at the posted rate. What that means is most people will now qualify for over $100,000 less on what they could have purchased before. There were some other changes, but they will not have as much affect. 

Since then we are seeing banks increasing and decreasing mortgage rates, discounts and even prime rates, as TD did recently. Which means rates are all over the map. This is also further fueled by some restrictions on some non-chartered banks, coming into effect on November 30^th, which will limit some of the choices people have on purchases over a million, investments properties and more.

As of November 15^th, government also stated that they would be increase the land transfer tax rebate that was being offered to first time buyer from $2000 to $4000 as of January 1, 2017.

I recently came back from a conference in which one of the most important and respected major bank Chief Financial Officer spoke and explained what he believed was the forecast for the upcoming real estate market.  First of he agreed with the move that the government was doing in, basically making it much more difficult for people with less than 20% to purchase a home or at least the same valued home that they were able to purchase before October 17^th.  He stated that if there ever was a change in interest rates or other market changes, these people would be able to absorb it now that they had to qualify at a higher interest rate. He mentioned that it seemed that the new outlook for the government was that it was ok to rent and that not everyone had to own their own home. He stated that interest rates would not be going up or changing much, since most other developed countries around the world had interest rates still lower than us.  Since our economy was not doing as well as the government would like, we might even see further drops. Then in regards to foreign investors, he stated that this would also continue because other countries might devalue their currencies further to stimulate their manufacturing sector, thus causing funds to flow out, into a secure and profitable area – Canada.

As you can see there are lots of changes that are happening, and it looks like things will stay steady and we will continue with a fairly strong real estate market.

Mortgage Rates might Drop

There seems to be pressure on mortgage rates moving downward. At our office meeting this morning we received information that we might see mortgage rates drop this year instead of going up as first predicted.

FREE DOWNPAYMENTS in Peel Region

FREE DOWNPAYMENT: The Region of Peel might once again be offering free downpayments to qualified applicants for 2015.

What is the Home in Peel Affordable Ownership Program?

The Home in Peel Affordable Ownership Program is designed to provide low-to-moderate income residents who are currently renting a unit in the Region of Peel (Brampton, Caledon or Mississauga) the opportunity to qualify for down payment loan assistance to buy a home in Peel Region.

This program will assist eligible applicants who have a total gross (pre-tax) household income of $80,000 or less to purchase a resale home in the Region of Peel that does not exceed a purchase price of $295,000.

Participant Eligibility

Applicants must be 18 years of age or older
Applicants must be a Canadian citizen or have permanent resident status
Applicants must not own or have an interest in another residential property in Canada or elsewhere
The home must be the sole and principal residence of the purchaser
The applicant must currently be renting in Peel and looking to buy a sole and principal residence
The applicant must have a total gross (pre-tax) household income not exceeding $80,000
The applicant must be able to obtain a mortgage pre-approval from a bank/lender that is approved and insured by a mortgage default insurer such as Canada Mortgage and Housing Corporation (CMHC) and must submit it with their application
Participants may not include anticipated rental income from a portion of the property in order to obtain a mortgage
The applicant must be able to pay all additional closing costs
The applicant must supply all necessary documentation to the Region of Peel within the required timeframe

http://www.peelregion.ca/housing/home-in-peel/apply/qualifications.htm

*** Currently the region is waiting for confirmation of funding to confirm that it will be available for 2015, They are expecting a response around March, it is on a first come first served basis, so interested parties need to be constantly looking at the web site.

Jim Flaherty is changing mortgage insurance once again

It looks like the government is looking on ways to hold back the market, and it will be putting up the cost of high ratio insurance in the new year.
Full report from The National Post

Mortgage: Self Employed or Empolyee

Thinking of buying a house in the near future, and you have an option of either working self-employed or employee. Go for the employee option, self-employed (sub-contractor) is getting much more difficult to qualify for a mortgage with.

Affordability is not for everyone!

Every day I look at people's incomes, and they have very good jobs and work very hard, but what they are getting paid is close what what students working p/t make. I have heard the same thing from friends in the banking industry and this morning on TV from Ralph Nader (re referred to the U.S.). The problem is that is looks like are middle class has a big gap in it, and many people are at the bottom. With these incomes, there are very very few places, even combined, that these people would be able to purchase their 1st home. The previous very affordable areas are now going up faster than everywhere else.

Buy a house that feels right for you.

When I first started as a REALTOR in 1994, I would always advise clients to get the most for the money. The biggest, most upgraded or best area for the MONEY. As TIME went on and I saw different odd things happen and also seeing many cultures beliefs, I changed my tune. I now advise me clients, choose the home that FEELS RIGHT for you. 

Power of Sales & Foreclosure, when it happens to you!

I get many calls from people looking for great deals on power of sales and foreclosures. As you know in life when one looses the other gains. Well this article addresses the other side of the story. As many of you know I am called for positive occasions and also for negative occasions. There are many changes in life that sometimes will not allow us to continue to pay all our financial commitments.


No matter what the situation you should take control and face the bank and financial institution. The most important thing is to take action quickly before it is too late. If you take quick actions, the bank is sometimes willing to renegotiate the terms of the mortgage, CHMC or Genworth sometimes have programs to assist, and I have even seen the banks allow you to skip a couple of payments.

Many times you have equity in the property; this can disappear quickly when you stop paying. The best thing to do is to put the house on the market and take out your equity. Even if you break even, you are still better off because the house did not go power of sale, meaning that you did not end up with of a record of non payment. Unlike a bankruptcy, I have seen where the bank that went power of sale and CHMC, have not easily forgiven the person that did not pay. This means that years down the road it would be very difficult to purchase another home with less than 20% down or to get financing through that bank or finance institution.

If things seem to be that you cannot easily sell, I have also seen some financial institutions allow a short sale, meaning that they have reduced some of the penalties and interest, in order to allow for the house to sell.

There are many steps and strategies that you can do minimize your losses and that of the bank. The main thing is to be aware of the process, and keep an eye on how much time you have left. Just as a reminder, if they mention that they are sending it to their legal department, this means that you will now be charged legal fees and that there is normally no more negotiating, just pay the full arrears.

No matter what the situation might be, give me a call and I can assist you.