Election Day – What Each Party is Offering for Housing

With the election day today, our team of Abbotsford Mortgage Brokers took it upon themselves to take apart what’s been said and do a quick write up on what each political party is offering for the housing market. Keep in mind no government can fulfill these promises, based on reasoning.

 

Liberal:

  • Expand the First-time Home Buyer Incentive for people in Victoria, Vancouver and Toronto. The value of a qualifying home will go from 500,000 to nearly 800,000
  • Add a one per cent annual tax on residential properties owned by those who are not Canadians and who do not live in Canada
  • Help homeowners and landlords pay for retrofits by giving them an interest-free loan of up to $40,000
  • Help people buy newly built homes that are certified zero-emissions by giving them a Net Zero Homes Grant of up to $5,000
  • Create a low-cost national flood insurance program
  • Make Energy Star certification mandatory for all new home appliances, as of 2022
  • Give interested homeowners and landlords a free energy audit
  • Retrofit 1.5 million homes, over the next five years

 

Conservative

  • Increase amortization periods on insured mortgages to 30 years for first-time homebuyers
  • Launch inquiry into money laundering in real estate
  • Remove stress test for mortgage renewals

 

NDP

  • Create 500,000 units of quality, affordable housing in the next 10 years
  • Double the Home Buyer’s tax credit to $1,500 for first time buyers
  • Remove GST/HST on the construction of new rental units
  • Re-introduce 30-year terms to Canada Mortgage and Housing Corporation (CMHC) insured mortgages for first time home buyers
  • Add $5 billion to spending on affordable housing in first 18 months in office
  • Set up “fast-start” funds available to communities to kick-start construction of co-ops, social and non-profit housing; amount not specified
  • Invest $40 million over four years in the Shelter Enhancement Program

 

Green Party

  • Legislate that housing is a legally protected fundamental human right for all Canadians and permanent residents
  • Increase the National Housing Co-investment Fund by $750 million for new builds, and the Canada Housing Benefit by $750 million for rent assistance for 125,000 households
  • Get rid of the first-time home buyer grant
  • Restore tax incentives for building purpose-built rental housing
  • Remove “deemed” GST when a developer with empty condo units puts them on the rental market
  • Change the legislation that stops Indigenous organizations from accessing financing through CMHC

 

 

 

 

 

 

CMHC First Time Home-Buyers Program

CMHC First Time Home-Buyers Program

As Abbotsford Mortgage Brokers, we’ve taken it upon ourselves to write up all the information that you need to know about the new “CMHC First Time Home-Buyers Grant”.

 

2019 federal budget includes tantalizing pitch for prospective first-time home-buyers

  • An applicant must make a household income of under 120,000 per year to qualify
  • Applicant must be able to come up with a minimum down 5% payment
  • The programs caps out 4 times the applicant’s annual income
  • Which means the loan can only help homeowners buy properties where the mortgage value plus CMHC loan doesn’t exceed 480,000
  • So, if the 1st time home buyer approved all conditions above, CMHC would kick in up to 10% of the values newly built home.
  • Co signers are permitted as long as the combined annual income is no higher than 119,999
  • Stress test for these mortgages do not apply with the loan. The loan is considered cash.

What CMHC wants in return:

  • In exchange for an equity stake in the home (so the funding comes with a bill to be paid)
  • If a buyer wants a 400,000 house – they got to come up with 20,000 min
  • 380,000 loan — 40,000 in funding = 10% stake in your home —-Bringing mortgage down to 340,000 w/ standard %3.5 interest, bringing payments down $200/month = 2700 in savings/year
  • Pay when you sell your house or sooner, it’s up to you.
  • CMHC shares in a – Loss OR Gain – of the value of profit
  • Loan must be paid in full no later than 25 years of purchase
  • Enough for 100,000 new buyers over the next 3 years.

Taking out new loans from CMHC or retirement savings doesn’t make housing more affordable, It just allows another source of debt financing that must be repaid.

Did You Know That Your Kids Could Increase the Mortgage Amount You Qualify For?

Are you and your family looking to purchase your first home or upgrade to accommodate for your growing little’s? We can help.

Our clients know the difference between using a BRMC Abbotsford mortgage broker vs other competitors. Our team of skilled experts have the resources to secure some of the lowest mortgage rates while obtaining your mortgage, quickly and efficiently. We will work to meet or exceed your purchase price expectations.

Many of us are aware of the recent changes in the lending/banking industry which have made it increasingly difficult to obtain financing for a home. These new rules resulted in lessening the maximum purchase price a borrower would typically qualify for. We do, however have some good news. Our team of Abbotsford mortgage brokers have exclusive access to three lenders that allow us to include Child Tax Credit on your application to help increase your purchase price.

The option to add your Child Tax Credit onto your income is not available through the major banks and excludes majority of lenders, meaning – there’s a good chance you won’t find this anywhere else.

Here is an example:

The Williams’ family:

  • Mr. Williams’ annual salary: $50,000
  • Mrs. Williams’ annual salary: $85,000
  • Mr. and Mrs. Williams’ have 3 children
  • Down-payment: $150,000
  • Mr. and Mrs. Williams’ are both debt free
  • Mr. Williams’ credit score: 720
  • Mrs. Williams’ credit score: 650
  • MAX PURCHASE PRICE: $962,000 

*Based on today’s best interest rate and a 5-year fixed term

The Williams’ family when using a BRMC Abbotsford mortgage broker:

  • Mr. Williams’ annual salary: $50,000
  • Mrs. Williams’ annual salary: $85,000
  • Mr. and Mrs. Williams’ have 3 children
  • Down-payment: $150,000
  • Mr. and Mrs. Williams’ are both debt free
  • Mr. Williams’ credit score: 720
  • Mrs. Williams’ credit score: 650
  • Add child tax benefit to your income of $4,500/year
  • MAX PURCHASE PRICE: $992,000 – increase of $30,000

*Based on today’s best interest rate and a 5-year fixed term

By including your Child Tax Credit on your mortgage application, we can increase your purchase price by $30,000.

Contact our team today to explore your home buying options.

 

 

Some of Our Finest Moments & a Look at What to Expect In 2019

 

Abbotsford, BC – Just like that it’s over, 2018 has officially come and gone. We hope you enjoyed the holidays as much as we did. Rather than boring you with a long-winded year in review we thought we’d skip through that and just share a few of our favorite photos captured throughout 2018. Here’s a look at some of our finest moments.

From left to right: (1) Jordi’s big Hollywood debut (2) Coach Dave and son Cooper (3) Annual Browne family Christmas tree hunt (4) Green lake cabin, family photobombing (5) Jordi embracing his inner Moana as Maui for Halloween, Vienna looking less than impressed by her father’s attempt (6) Jordi and Natalie accompanying the Homelife Real Estate team at the Canadians baseball game (7) Coach Dave and son Cooper posing with the Abbotsford Bluejays (8) Annual Browne family pumpkin carve-off competition (9) Jordi, Vienna, Chase and Natalie enjoying their trip to Green Lake cabin.

 

Interest Rates 2019

The Bank of Canada has decided to maintain its benchmark rate at 1.75%. Throughout 2018 gradual rate increases were almost a regular occurrence but towards the end of the year the Bank of Canada geared down as the market began to get back to normalcy.

In December the bank said that the Canadian economy is operating close to its capacity, with unemployment at its lowest level in decades and inflation on target. As a result, further rate increases in 2019 were highly anticipated.

Reports released in December showed consumer spending had increased by only 1.2 per cent, and annual car sales had fallen for the first time since the financial crisis. The Canadian Real Estate Association is also expecting home sales to decrease in 2019, largely due to consumers adjusting to the restrictive financial conditions, such as the B-20 stress test and the 5 interest rate increases since July 2017.

With interest rates remaining stagnate and a slower real estate market, now could be the time for potential home buyers to consider acting while competition isn’t quite as intense.

The hold on interest rates may only last us a short while as the Bank is predicting growth to reach 1.7% by the end of 2019, however the decision to do so is based on several factors such as the housing market, oil and consumer spending.

***FLASH SALE***

Keep your eyes and ears peeled this spring for an interest rate flash sale! We’ve seen signs of an interest rate sale this past week which means opportunity for those looking to buy, renew or refinance. Contact our team for further details.

Important Changes You Need to Know About

Federal tax changes are underway this 2019, some of which will affect your paycheque, bills and even small businesses.

Canadian Pension Plan – starting this January, contributions will increase .15% from 4.95% to 5.1% set to affect earnings between $3500 – $57000.

Employment Insurance Premiums – premiums will drop per $100 of insurable earnings from $1.66 to $1.62.

Tax Free Savings Accounts – The contribution limit will be increase from $5,500 to $6,000 per year.

Gas Prices – Provinces that are imposing the carbon tax will see an increase in gasoline at 4.42 cents per litre and an increase in natural gas at 3.10 cents per litre. Canadians in these provinces will receive a direct rebate as a result to offset the increase.

Tax Changes for Small Business Owners – Effective January 1st, small business owners are permitted to generate up to $50,000 in passive income while still having access to lower rates. If businesses hold an excess on passive income, a portion of the first $500,000 in earnings will be subject to a higher rate. This will be dependant on how much they exceed the limit.

Canada Workers Benefit – Low income workers can now qualify for a more substantial “Canada Workers Benefit”, designed to help low income workers remain employed.

Postage – prices will increase to $1.05 per single domestic letter stamp, $1.27 for US letter mail stamp and $2.56 for an international stamp.