Are The New Mortgage Rules a Good or Bad Thing for First-Time Home Buyers?

Some of you may know that in July of this year major changes to the rules regarding Canadian mortgages were put into effect by the Canadian government. These new policies included a decrease in the maximum amortization period from 30 years to 25 years for mortgages insured by the Canada Mortgage and Housing Corporation, that lenders could allow home equity loans for up to 80% of a property’s value (reduced from 85% previously) and that homes worth more than 1 million dollars were no longer eligible for government insured (CMHC) mortgages (for example, anyone wanting to buy a home worth more than $1 million must now have a down payment of at least $200,000).


For first-time buyers the biggest change was the shortening of the maximum amortization period from 30 to 25 years. Now, is that necessarily a bad thing? Perhaps not as this will force borrowers to pay back their debt sooner, thereby ultimately reducing the amount of interest they'll pay over the life of the loan, saving them thousands of dollars in interest costs over the life of the mortgage. However, the flip side of the coin is that the borrower’s mortgage payments will be larger as more debt gets paid back with each payment.

Some experts say that the new rules may help prevent first-time buyers from stretching themselves too thin, will allow them to build equity in their home faster and become mortgage-free sooner.

There is a great article in The Star which addresses the pros and cons of the new mortgage rules in Canada for first-time home buyers, to read the article click here.

Hope all of you first-time buyers find this article interesting and informative. If you have any questions about how the new rules may affect your new home purchase, please don’t hesitate to give us a call – we are here to help!

Until next time,

The Jamie Dann Team.

Wondering if now is a good time to Buy??

Hi All,

Recently I came across a very interesting article in "Moneyville" put out by the Toronto Star, talking about all the reasons why now is a great time to buy.

To summarize, it is a great time to purchase a home in Canada because:

1) Mortgage rates are at historic lows. As we know, when interest rates are low, they have no where to go but up. So, make sure you lock in your rate and get pre-approved so that you are guaranteed to get a lower rate when rates rise.

2) Canada has great appeal due to its stability both economically and politically.

3) There is a great draw of Immigrants to Canada, many of whom have sold homes in their country of origin and have money to spend.

4) It appears that Canadian's are really good at paying their mortgages as compared to those home owners in the States.

5) Similarly, when there are financial challenges in paying one's mortgage, it seems that Canadian banks are more apt to work with home owners vs. immediately foreclosing on the home

6) Canada has a healthy income to price ratio of 3.5 when you look at the Median Canadian income as compared to the Median cost of homes

7) Because the interest rates are so low, it is a great time to consolidate your debt. This will make the amount to service the debt much more manageable.

8) Given the US is having an election this year, it is likely that the economy will remain steady if not improve. None of the Presidential hopefuls want the economy to fail.

If you would like to speak with a GREAT mortgage specialist who can help you get pre-approved, consolidate your debt, or just give you a road map, please contact us, as we work with some awesome professionals.

To read the full article click here.

Until next time!

The Jamie Dann Team

http://www.thejamiedannteam.com/
http://www.thejamiedannteam.ca/

Why You Still Need a REALTOR®

Buying and selling “stuff” can be easy, but it depends on the item. Sure, you can save some money if you sell something yourself, all profits go directly to you. However, buying or selling a house may be a different story.


It is not always advantageous to buy or sell a house by yourself without seeking the assistance of a REALTOR®. Buying or selling a house is most likely the largest financial decision you will make. REALTORS® are trained professionals who are very knowledgeable in all aspects of the real estate industry and whose job it is to assist you with any of your real estate questions and concerns. They are well versed in negotiating and may, in fact, SAVE you thousands of dollars.

REALTORS® have access to vast network of fellow REALTORS® and real estate listings which is very advantageous to most buyers. For sellers, REALTORS® are available to meet with various potential buyers at the buyer’s convenience, allowing the home owners to not worry about the inconvenience of “dropping everything” to show their home to a potential buyer who may or may not bother to show up for a scheduled viewing. For both buyers and sellers, REALTORS® guide their clients through all of the paper work (making sure everything gets where it needs to go), make valuable suggestions and keep track of important deadlines and appointments.

To read more about the benefits of using a REALTOR®, click here.

Until next time,
Jamie