CMHC Rate Increase & More…
This is the blog version of the Winter Update 2014:
Insurer Rate Increase – Technical Details – and the B20 Rules Phase In.
1. Much to do about nothing: CMHC increases mortgage insurance.
- May 1st the new CMHC fee increase goes into effect.
- Genworth quickly followed, matching the effective date and premium increases. Canada Guaranty has not yet but is expected to increase their rates by the same amount – so rates for all will be the same but are not right now.
- To AVOID the increase:
- The purchase must be underwritten and submitted to the insurer by the bank BEFORE end of day April 30. We will still be in the Spring rush so banks may be backed up; it is important to avoid last minute rushes during this time.
- The fee is inconsequential. A $400,000 mortgage has a monthly payment increase of less than $10.
Down Payment
OLD: One-time CMHC fee added to mortgage
New fee
May 1, 2014
5%(borrowed)
2.90%
3.35%
5%
2.75%
3.15%
10%
2.00%
2.40%
15%
1.75%
1.80%
Nowhere in the news: Very little is being discussed on self-employed borrowers without traditional proof of income. Their premiums are going up as well.
Get your RRSP deduction & use it for down payment !! A legal loophole.
If you know you are buying your first home in the next 90 days, you can make a $25,000 RRSP contribution or $50,000 for two people. That means a big refund in April. You then withdraw the $25,000 or $50,000 to pay for that initial home’s down payment.
SUMMER = when interest rates are going to rise!!!
Hot off of the press – below the Bank of Canada expects mortgage rates to rise in the summer of 2014 !!!
Warren buffet said everyone knows what is going to happen – [rates rising] – but no one knows when. Now we know, or at least we think we know. The article does a good job explaining that when the market rises, bonds have to pay more to get people to buy them and this increases the bond rates. Surprise, higher bond rates = higher mortgage rates.
Proof the Banks do not Love you – Big Bank (TD) does 25% car loan
On a daily basis people call me to talk mortgages and think that the big Canadian Bank loves them. It does not!
Only in Canada do we feel great if they rip us off – just give me the security blanket of a big bank – and I’ll gladly pay more of my hard-earned, post-tax dollars!
Calgary homes summary for 2013 and higher prices for 2014
Below is part of an article that notes all the in-bound migration supporting home prices …
Mark Herman
Calgary sales powered by economy
In Calgary, 16,302 single family homes changed hands, an eight per cent increase, and 4,007 condos were sold, a 14 per cent rise.
The benchmark price for a single-family home was $472,200 in December, an 8.6 per cent increase from the previous year.
Property Tax assessments – add 6% to average home value
Your Calgary property tax assessment is probably going to go up by 6%.
Mark Herman
—
City assessment finds values of residential properties in Calgary up 6% between 2013 and 2014
By Jenna McMurray ,Calgary Sun
First posted: Friday, January 03, 2014 07:59 PM MST | Updated: Friday, January 03, 2014 08:08 PM MST
Property values for both single family homes and condos are up in Calgary, according to the city’s assessment findings.
What does Calgary housing have left for price increases in 2014?
This is part of Garry Marr’s article where he looks at what prices may do in 2014.
Mark Herman
Investors in Toronto continue to bet on price appreciation in the face of negative cash flow, leaving them vulnerable to a market shift.
Glut of job vacancies in Alberta; 52,800 vacancies – supports home prices
This is more great news and more data on why people will continue to move to Alberta and need places to live thereby supporting home prices.
Mark Herman
Job vacancies in Alberta outstrip available labour
Province led the nation in employment opportunities in September
CBC News Posted: Dec 30, 2013 5:50 AM MT Last Updated: Dec 30, 2013 5:50 AM MT
Alberta employers have more job openings than there are job seekers to fill them.Alberta continued to be the best place in the country for job-seekers in the fall of 2013.
Businesses in the province reported 52,800 vacant jobs in the month of September. Statistics Canada says that is fewer than the previous year, but still the highest number in the country.
Renewing your mortgage early? It may cost you
We get this question all the time – should I renew early. Do early mortgage renewals save or cost you money? Below Rob does a great job summarizing the situation.
ROBERT MCLISTER
Special to The Globe and Mail
Alberta still the fastest growing economy in Canada
Here is a bit about the post from last week where I noted that if Alberta were a country it would tie China for growth. No surprise Alberta hast he strongest economy in Canada. All this of course will support home prices while others move her for high quality jobs.
Mark Herman
Alberta Mortgage Broker
Alberta economy fastest growing in Canada
Forecast 3.4% annual growth in 2014
By Mario Toneguzzi, Calgary Herald December 9, 2013 3:00 PM Alberta’s economy will outperform all other provinces in 2014CALGARY – Alberta has been the largest contributor to economic growth in the country for three consecutive years, outpacing the much larger economies of Central Canada, says a new report released Monday by the Conference Board of Canada.