February 16, 2010
The Honorable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada’s housing market and continue to encourage home ownership for Canadians.
“Canada’s housing market is healthy, stable and supported by our country’s solid economic fundamentals,” said Minister Flaherty. “However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing.” The Government will therefore adjust the rules for government-backed insured mortgages as follows:
Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.
“There’s no clear evidence of a housing bubble, but we’re taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it,” said Minister Flaherty. “If some lenders aren’t willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families.”
These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.
November 18, 2009
(NC)—There’s nothing quite like owning your own home – getting to know your neighbours, decorating your home and creating a place that you can call your own. But owning a home is not quite as simple as finding the right home in the right neighborhood; your financial situation can be an important factor in the type of home you can afford. For example, you will need to determine how much you have available for a down payment, and, based on your budget, what mortgage payment you can comfortably carry. By answering these questions, you will be able to make a smart and informed decision before you buy the home that is right for you.
One of the most common first-time home buyer questions is affordability. Here are four ways to help make your home buying experience smooth and straightforward:
1. Understand Your Financial Situation: Your financial needs will change and evolve throughout your life. Working with a trained professional to understand your current financial situation and your future goals can help you assess what type of home you can afford.
2. Ask About Your Credit History: A credit rating is a measure of how dependable you are in repaying your debts. A good credit rating goes a long way in helping you obtain credit and determine the interest rate you will receive. For example, if you pay your bills on time, or if you repay a loan, you will be in good standing with the credit bureau. So, when it’s time to borrow, a lending institution will know that you are credit worthy. For more information on your credit history, contact TransUnion or Equifax Canada and get your credit report free of charge by mail.
3. Get Pre-Approved: By getting pre-approved, you will know how much home you can afford which will allow you to shop with confidence within your price range and prove to sellers you are a serious buyer. Plus, obtaining a pre-approval is absolutely free.
4. Ask About Extended Amortization: The extended amortization feature is available on most mortgage products. The feature provides home buyers the flexibility of lowering their mortgage payments by spreading them over a longer period of time helping ease budget and cash flow issues. But keep in mind by extending your amortization you will increase the amount of interest that makes up your mortgage payment. Given this, it is important to choose a mortgage that allows you to increase your payments and make lump sum payments when you can. Currently, most financial institutions are offering up to 35 year amortization periods.
News Canada
Editors Footnote:
We at YorkRegionMortgages.com are committed to a turn around time for approvals and preapprovals of 24 hours, however due to the higher than usual volume of applications we have received in the past week or so approvals have taken up to two days. We apologize to our Real Estate Partners and other referral sources and will make every attempt to rectify this situation as soon as possible.
November 5, 2009
Genworth Study Reveals…
The desire for homeownership is alive and well in Canada, with many Canadians willing to go to great lengths for it. According to the Genworth Mortgage Insurance Company Canada (“Genworth Financial Canada”) First-Time Homebuyer’s Monitor, 68 per cent of renters said they would be willing to delay major purchases and more than half would give up vacations in order to own their own home.
The national opinion poll provides insight into what Canadians would do – or would not do – to fulfill their dream of homeownership or to stay in a home they have purchased when times are tough:
82 per cent of current owners would fore-go vacations in order to keep up with mortgage payments.
65 per cent say they would take on a second job if they risked losing their home.
44 per cent say they would take on a renter to maintain homeownership.
While today’s report shows what Canadians would do to achieve homeownership, just 16 per cent of Canadians are fully prepared for an interruption in income that puts their home in jeopardy.
“The survey findings confirm that people remain passionate about their homes,” said Peter Vukanovich, President of Genworth Financial Canada. “When faced with financial difficulties, staying in a home they own is a priority. At Genworth Financial, we help them do just that through our Homeowner Assistance Program.”
For more information on Genworth’s Homeowner Assistance Program, visit www.HomeownerAssistance.ca For ca, call 1-800-511-8888 or contact your lender or mortgage broker.
The survey of 2,000 Canadians was conducted in September, 2009, and builds on results from an earlier poll of 2,541 Canadians conducted in May, 2009. The complete Genworth Financial Canada First-Time Homebuyer’s Monitor with a regional breakdown is available at www.genworth.ca.
October 29, 2009
A home is one of life’s most important purchases. Before committing to a purchase it makes sense to learn as much as possible about any property you wish to acquire. Understanding the important differences between an appraisal and a home inspection will help you to obtain detailed information about the home’s value and condition.
An Appraisal
An appraisal allows the lending institution to determine if the property being purchased is suitable as security for a mortgage. For conventional mortgages, a lender will in most cases require that a professiona
l third party assess the property to ascertain its current market value. In the case of a “high-ratio” mortgage (with a down payment of less than 20 per cent), the mortgage insurer will go through its own internal appraisal process. In particular, lenders and insurers are concerned that the property (in terms of its age, condition, and remaining economic life) constitutes a good match with the borrower and their ability to repay the mortgage. An appraisal does not usually include a detailed property inspection.
A Home Inspection
A home inspection is not used to determine property value, but will provide an assessment of the physical condition of a property. A well-trained home inspector will perform a comprehensive visual inspection to determine the condition of the building and all of its major systems (for example the roof, structural, heating, plumbing and electrical systems). While an appraisal is intended to provide the lender with sufficient information to decide on mortgage financing, a home inspection will hopefully reveal to a potential homebuyer whether the building and its systems are in sound working order. If there are outstanding issues, a good inspector will provide the potential purchaser with a schedule outlining the estimated costs and when these repairs will need to be completed.
