CHANGES FOR BC’s FIRST TIME HOME BUYERS

This is what we know so far, we don’t know everything yet. 🙂

We are not sure which banks are supporting this but we do know the repayment after the 5 years interest free period will be at P+.50%. Current prime rate would equate to 3.20% interest after the 5 years.

We are assuming by borrowing your down payment from the BC Governments proposed plan that comes into effect mid January, that we will be charged slightly higher CMHC fees.(Current Flex Down CMHC Fee is 3.85% Vs. Regular Down Payment is 3.60% with only 5% down payment).

The program ends March 1st 2020. The down payment loan is Interest free up to $37,500.00 as long as you can match or exceeds this amount with your own money.

You can put as little as 2.5% down now to buy a home and the other 2.5% will get matched by this loan program.

  • Amortized over 25 years
  • Borrower must qualify under 4.64% still
  • Combined household income must be under 150K
  • You must have saved a down payment amount at least equal to the loan amount for which they are applying from government.
  • You have been a Canadian citizen or permanent resident for at least five years.
  • Have lived in B.C. for at least one year prior to the sale.
  • Be a first-time buyer who has not owned an interest in any residential property anywhere in the world at any time.
  • The home must have a purchase price of less than $750,000.
  • The buyer must already be able to qualify for an insured high-ratio first mortgage for at least 80 per cent of the purchase price.
  • The most ideal scenario to reduce cost is to get 5% from the Gov’t and put 14% down payment from your own resources!

Sorces:

http://vancouversun.com/news/local-news/b-c-government-offers-down-payment-loans-to-first-time-homebuyers

By Referral Mortgage Consultants*

“Click, Call, Chat – Award Winning Brokers”

Dave  604 897 2741 Jordi 604 615 1312
www.AbbotsfordsMortgageBroker.com

www.ChilliwackMortgageBroker.com

www.BRMC.ca

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*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp.

Abbotsford Mortgage Qualification Changes

How do the changes affect you?

In situations of high ratio  mortgages home buyers with less than a 20% down payment will have a mortgage qualification based on the Bank of Canada posted rate.

This affects you due to the fact that the Bank of Canada rates are higher than the rates offered by banks and lenders.

How does the changes not affect you?

Essentially, for a low ratio mortgage all remains the same if a buyer has more than a 20% down payment.

An exception to that rule- if the mortgage has a term of 4 years or less and/or is a variable rate mortgage, which is subject to the new Mortgage Qualifying Rate. Otherwise, you will still be able to qualify for mortgages using the contract rate.

Property Transfer Tax Trials & Tribulations

Below are 7 facts regarding the new 15% Property Transfer Tax charges for foreign buyers, but the one fact that sticks out the most in my opinion is: Regardless of when the contract is signed, even if the contract was signed weeks ago, if it completes after August 2, 2016 there is a higher tax! – Wow. That is immediate.

But this tax increase is not applicable in our areas of Chilliwack, Abbotsford and Mission. So what does that mean? Will this maybe create a foreign buying frenzy in our area maybe? Can our prices potentially rise even more?

Time will tell but in our opinion, the impact will not be too great.

Here is what we know.

1. You must be a permanent resident of Canada to be a Canadian citizen. This also applies to companies. If a company is being purchased in Canada, that company must also be incorporated in Canada. Companies controlled in whole or in part by a foreign national, or other foreign corporation, are not Canadian companies.

2. The increased tax only applies to properties in the Greater Vancouver Regional District, and does not apply elsewhere in the Province, or the Tsawwassen First Nations Lands.

3. The tax only applies to residential properties, not commercial.

4. This is in addition to the regular PTT to be paid, and is paid on closing.

5. August 2, 2016 is when the increased tax will take effect, regardless of when the contract is signed. Even if the contract was signed weeks or even months ago, after August 2, 2016 there will be a higher tax.

6. Clients need to be prepared to have their SIN number confirmed and compared to additional government documentation such as a passport or SIN card.

7. The additional tax is payable even if there would normally be an exemption available. Transfers between related individuals, transmission to surviving joint tenant and other such items now attract the additional tax.

The data, which covers a 19 day period between June 10 and June 29, was gathered from Property Transfer Tax forms, which were recently modified to require foreign nationals to list their country of residence.

Premier Christy Clark’s Liberals are poised to adopt legislation that includes an additional 15 per cent property transfer tax on foreign nationals who buy residential real estate in Metro Vancouver. The tax, which takes effect August 2/2016, would add $300,000 to the price of a $2-million home.

Here are some stats.

• In the 5,118 transactions in Metro Vancouver just 260 involved foreign buyers 234 from China, or 4.57% of all Metro Vancouver transactions. Other countries such as Korea, Taiwan, India, Romania, Japan and the United Kingdom account for the other 26 purchases.

• Total value for Metro Vancouver transactions by foreign residents was $350,940,465, or 6.5% of the total value of all of the transaction within the 19 day period. In contrast $5,042,992,716 was attributed to Canadian Citizens and Permanent Residents.

• New data released by the province on Thursday states that only 5.1% of housing transactions across Metro Vancouver in June involved foreign buyers.

• By comparison the number of transactions by foreign nationals was as high as 14% in Richmond and 11% in Burnaby, whilst the City of Vancouver was slightly lower at 4% and the total figure for BC came in at 3.1%

• Interestingly across the province the average investment by a Canadian citizen or Permanent Resident stood at $735,000 during the 19 day period whilst that of a foreign national was significantly higher at $1.157 million

Bank of Canada maintains rate target at 1/2 per cent

Hey Abbotsford, Chilliwack, and Mission mortgage clients. Hope everyone’s having a great June so far! I recently got back from San Francisco / Napa , it was interesting to hear some of the opinions on mortgage rates down south that could effect us. Here is some info i thought would be of interest regarding your mortgage rates.

The Bank of Canada announced on May 25th, 2016 that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

The current rate is expected to stay where it is well into 2017, depending on economic conditions in the United States, the direction of global oil prices and the impact of new federal stimulus spending.

The global economy is evolving largely as the Bank projected in its April Monetary Policy Report (MPR). In the United States, despite weakness in the first quarter, a number of indicators, including employment, point to a return to solid growth in 2016.

In Canada, the economy’s structural adjustment to the oil price shock continues, but is proving to be uneven. Growth in the second quarter of 2016 will be much weaker than predicted because of the devastating Alberta wildfires.

The Bank’s preliminary assessment is that fire-related destruction and the associated halt to oil production will cut about 1 1/4 percentage points off real GDP growth in the second quarter. The economy is expected to rebound in the third quarter, as oil production resumes and reconstruction begins.

Inflation is roughly in line with the Bank’s expectations. Total CPI inflation has risen recently, largely due to movements in gasoline prices, but remains slightly below the 2 per cent target.

Canada’s housing market continues to display strong regional divergences, reinforced by the complex adjustment underway in the economy. In this context, household vulnerabilities have moved higher.

For those of you with variable rate mortgages, this means the payments will remain unchanged.

 

By Referral Mortgage Consultants*

“Click, Call, Chat – Award Winning Brokers”
 1 – 32540 Logan Ave
Mission BCV2V 6G3

&

360-3033 Immel St

AbbotsfordBCV2S 6S2

&

8387 Young Rd

ChilliwackBCV2P 4N8

Dave  604 897 2741 Jordi 604 615 1312
www.AbbotsfordsMortgageBroker.com

 

www.BRMC.ca

 

www.PeaceOfficeMortgageBroker.com

Connect with us on!
 BRMC Facebook

 

BRMC Google review Chilliwack Office

BRMC Google review Abbotsford Office

BRMC Google review Mission Office 

http://www.linkedin.com/company/2410358

https://twitter.com/brmcmortgages

http://www.youtube.com/user/BRMCmortgages

We’re active on Facebook, Twitter, LinkedIn & YouTube. We really appreciate reviews! Good or Bad please let the world hear your voice! Connect with us for ongoing industry news items, contests & prizes.

*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp.