CMHC Changes Policies for Insured Mortgages

As we have all witnessed in the last couple of months, the Canadian economy, including housing and countless other sectors have been greatly affected by the COVID-19 pandemic. 

The Canada Mortgage and Housing Corporation (CMHC) is bringing in the following changes to limit their assumed risk by changing policies for Insured Mortgages (when someone is buying with LESS than a 20% down payment).

Effective July 1st, 2020 the CMHC will be making the following changes:

  • CMHC is lowering the percentage of your income that can go towards paying your mortgage / taxes / heat from 39% to 35%.
  • Establish a minimum credit score of 680 for at least one borrower. (previously 600)
  • Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.

What does this mean for you?

  • The average consumer who has less than 20% down will now have their max purchase price reduced 12%.
  • Your credit score must be higher. 
  • You will no longer be allowed to borrow your down payment. (Gifted funds from family is still ok)

If you or anyone you know have questions regarding these new changes and how it applies to your own personal situation please reach out to our team. We want to inform, equip, and help you navigate these new changes.

The Interest Rate Spring War Has Arrived, Lower Rates to Come

Hi Abbotsford, Chilliwack and Mission mortgage clients! We have good news for you. Rates appear to be dropping further, therefore this may be an opportune time to renegotiate and secure a mortgage. If you’ve considered buying, refinancing or renewing your mortgage, we suggest giving our team a call so we can look at your current mortgage and see if it’s worth making a move.  Here are a few reasons why we believe now would be a good time to review your mortgage or for home buyers, a good reason to consider purchasing while rates are at historical lows.

  • A shifting economy will push the BOC (Bank of Canada) to lower interest rates further
  • Negative growth in demand over the last two quarters
  • The BOC has recently moved to a more neutral bias, rather than tightening
  • US Federal Reserve has entertained the idea to make a cut mid way through 2019, Canada generally follows
  • Recessionary conditions in other parts of the world will likely influence Canada

We have a seasoned mortgage consultant on our team who specializes in placing those looking to refinance, in a strategic mortgage plan during the spring rate wars that take place every year. We are prepared to work hard on your behalf because feeling a little more financially free, or paying off your mortgage sooner, is a priority to each one of our team members.

Give us a call for your complimentary mortgage review.

Source: https://www.mortgagebrokernews.ca/news/boc-will-likely-cut-interest-rates-next–economist-255388.aspx

First-Time Home Buyers’ Tax Credit

 

Abbotsford, BC – If you are a first-time home buyer and recently purchased a home, we encourage you to speak with your Abbotsford mortgage broker as you may qualify for a tax credit up to $5,000, which can reduce your taxes by $750. The home buyers tax credit was introduced to assist first time home buyers purchase a home.

There is also a a credit for those with or living with those with disabilities.

For more information on the First-Time Home Buyers’ tax credit visit Canada Revenue Agency., or follow this link: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-369-home-buyers-amount.html

Home Owner Grant – Online Application

With the first official day of summer just one week away, like most of us, we’re all waiting in anticipation to rid ourselves of responsibility and enjoy those longer evenings and sunny days. If you have kids you might find yourself scrambling to register them for camp or anything under the sun to keep them occupied over the summer holidays. However, before we all get into vacation mode, there is one more “adulting” duty to be attended to, your Home Owners Grant.

To make your life a little easier we’ve gone ahead and included each city’s online Home Owners Grant application form below. To avoid 5% late payment penalty on the HOG portion of your taxes, ensure you have your HOG submitted prior to July 2nd 2018. Please note, you will need your tax notice to complete the online form.

Abbotsford

Burnaby

Chilliwack

Coquitlam

Delta

Hope

Langley

Maple Ridge

Mission

New Westminster

North Vancouver

Pitt Meadows

Port Coqtuilam

Port Moody

Richmond

Surrey

Township of Langley

Vancouver

West Vancouver

White Rock

 

Basic Grant:

If your property has an assessed value of $1,650,000 or less, you may be eligible to claim the full grant amount of $570.

 

If your property’s assessment value is $1,650,000 or greater, you may qualify for a reduced grant amount. The grant is reduced by $5 for every $1,000 above the assessed value and completely eliminated at an assessed value above $1,764,000.

 

Additional Grant:

If you are 65 years of age or older, you may be eligible for an additional grant of $275. The Additional Home Owners Grant is completely eliminated if your property has an assessed value above $1,819,000.