We haven’t blogged in a long time!

General Trish Pigott 29 Jan

We are getting back in the saddle with our blogging! Stay tuned for more frequent updates to the mortgage world and all things home ownership! 2020 is off to a good start!

Speculation and Vacancy Tax

General Trish Pigott 21 Jan

The speculation and vacancy tax is a key measure in tackling the housing crisis in major urban centres in British Columbia, where home prices and rents have skyrocketed out of reach for many British Columbians. The provincial government is taking action because people who live and work in B.C. deserve an affordable place to call home.

The speculation and vacancy tax is a part of government’s 30-Point Plan to make housing more affordable for people in our province.

This new annual tax is designed to:

  • Target foreign and domestic speculators who own residences in B.C. but don’t pay taxes here
  • Turn empty homes into good housing for people
  • Raise revenue that will directly support affordable housing

All owners of residential property in the designated taxable regions of B.C. must complete an annual declaration. Over 99% of British Columbians are estimated to be exempt from the tax.

How to Exempt Yourself

To claim your exemption, you must register your property by March 31, 2019 – and it’s easy to do, either by phone or online. The information you’ll need to register your property declaration will be mailed by mid-February to all owners of residential property within the taxable regions.

Contact us if you’re expecting a declaration letter from us and haven’t received one by late February.

Please note that if your property has more than one owner, even if the other owner is your spouse, a separate declaration must be made for each owner.

How the Tax Will Be Charged If You’re Not Exempt

The speculation and vacancy tax rate varies depending on the owner’s tax residency and whether the owner is a Canadian citizen or permanent resident of Canada, or a member of a satellite family.

By levying the highest tax rate on foreign owners and satellite families (those who earn a majority of income outside the province and pay little to no income tax in B.C.), the speculation and vacancy tax is a way to make sure these property owners are paying their fair share in taxes.

The speculation and vacancy tax applies based on ownership as of December 31 each year.

CLICK HERE to visit the provincial page for more information.

Bank of Canada Rate Update

General Trish Pigott 13 Dec

Last week the Bank of Canada announced that they would leave rates unchanged.  This is great news for Variable Rate Mortgage holders as everything will remain the same as the Bank feels that they have have made the impact they wanted to so far with increased rates and the stress test.  This has brought the market back in line and with the recent announcement about Canada’s oil production and overall growth not meeting expectations, the Bank has decided to leave things unchanged at this point.

Today’s Prime rate is at 3.95% and your Variable Rate Mortgage or Line of Credit will be based on that.  At this time, there will be no change.  With the Variable Rate Mortgages still being lower than the Fixed Rates, it is still the more popular product at this time for new and existing home owners.  If you would like us to assess your current situation, feel free to reach out for a no cost Mortgage Review.

CLICK HERE to read the full article.

Reverse (CHIP) Mortgages

General Trish Pigott 26 Nov

We have just been through the certification program with Home Equity Bank and are happy to answer any questions you may have with the CHIP product.  This is a great option for clients when they want to remain in their home but access equity to purchase rec properties, investment properties, help family purchase a home or consolidate debts and just have some extra cash.

Here’s a few details about it:

  • Great for pensioners that have a large amount of equity but low monthly income
  • No mortgage payments need to be made as long as they live in the home
  • Available for home owners over 55 years of age
  • Available for condo’s, townhouses and detached homes
  • Must live in the property
  • Interest rates range from 6-6.5%
  • Applicants do not have to go through the government stress test
  • Income qualification is not required
  • Set up fees are $1,795 for the legal process and about $300 for appraisal
  • Mortgage can be set up to payout in a large lump sum or clients can draw a regular monthly payment to help with the cost of living and enjoy life doing what they want
  • Very simple process with minimal paperwork required

Bank of Canada Announcement

General Trish Pigott 25 Oct

The Bank of Canada (BoC) announced that they have increased the overnight target rate which in turn affects the Prime Rate.  Currently the Prime rate with almost all banks is 3.70% and that will increase to 3.95%.  This affects Variable Rate Mortgage clients and anyone that has loans or lines of credits attached to the Prime rate.

If you would like some advice and direction on whether a variable rate may be good for you or if you want to chat about your current rate, please contact me directly and I will be happy to review your current situation.

Here are a few reminders for Variable Rate Mortgages and today’s announcement:
  • For every $100,000 in mortgage, your payment will increase approximately $13.00 per month with a .25% increase to the rate
  • With certain lenders you can request to have a fixed payment so that when Prime changes, you will not have a payment adjustment
  • If you are concerned about affording the payment after multiple increases, please contact my office so we can discuss options at 604-552-6190
  • If you are considering locking in, you will be locking into today’s rates with your current lender and your payment will be adjusted based on that new rate
  • You can lock in for a term equal to or greater than the amount of time you have left in your mortgage
  • With most lenders, we can review options directly with your lender on your behalf, some lenders require you to go in to a branch, but if we can help you avoid that, we will
  • You can request a lock in agreement if you are considering locking in and usually have 7-10 days to send back the signed agreement once you decide
  • Ask yourself how comfortable you will be with an increase to your payments over the next 12 months
  • Remember to call or email me directly with questions about your own situation
  • Remember the news and the media are always going to be negative sources.  Friends and family often have good intentions but are usually not aware of your personal finances so their advice may not be in your best interest. 

Call me, I am happy to chat anytime about your mortgage or lock in options!!

What to do if you’ve purchased a new house but your current home has not yet sold…

General Trish Pigott 18 Oct

This blog post is coming from a scenario we actually encountered this week.   We had some stressed clients, who purchased a new property and had no doubt that their current home would sell! The current home still has not yet sold but we were extremely happy to reassure them with a number of solutions for this situation.  A couple solutions brought to the clients attention were:

  • Equity take out on the current property, as bridge financing is not an option without a firm sale
  • Short term second mortgage
  • Add a co-signer to afford both properties

Key points for you to consider if you are put in this situation:

  • Do you qualify to carry two properties and two mortgages?
  • Do you have access to other funds for the down payment such as gifted funds from family or saving?
  • If a refinance is needed on current home, the listing will have to be cancelled as banks will not offer traditional lending rates on homes that are currently listed

As a result, to complete on time I was able to secure financing for them with fully discounted rates, use rental income to qualify, put 50% of the mortgage portion on the new property in a line of credit. That way it is fully open, so when their home sells there will be no penalty to pay down the line portion of the new mortgage.

If you happen to find yourself in this position – please do not hesitate to contact us here at the office and we will help you!

Legalization of Cannabis & Mortgage Lending

General Trish Pigott 11 Oct

**How will the Cannabis Act affect mortgage lending??**

The legalization of Cannabis is set to take place on October 17th. We just received confirmation that CMHC will continue to insure mortgage loans for residential properties where cannabis was previously grown and/or will be legally grown. At this time we only have one lender who is willing to loan on such properties and with that loan comes a 1% premium on the interest rate, as well as, the client must pay the CMHC insurance premium no matter the downpayment amount. Regardless if it is a previous grow-op or a legalized grow-op the main reason lenders don’t lend on such properties is due to the high level of humidity required to grow, creating mold issues. We our in process of contacting each of our lenders on this to see if any new policies will be coming down the pipe with the impeding legalization.

This is a confusing topic, so please do not hesitate to contact us with questions!

Mortgage Renewal

General Trish Pigott 20 Sep

Are you almost at the end of your mortgage term? Are you not sure if the mortgage product or lender that you have is the right fit for you? Maybe you want to move from a variable rate into a fixed rate or vice versa. Or maybe you want to access extra equity in your home.

Contact us to review your current situation… we would love to help you and make sure your mortgage is right for you!

Interest Rate Outlook

General Trish Pigott 30 Aug

Interest Rate Outlook

In light of the deceleration in business investment, the Bank of Canada has little reason to hike interest rates at the Bank’s next policy meeting on September 5. Investors are betting that a rate hike in October is a near certainty according to Bloomberg Canada.

Bank of Canada Governor Stephen Poloz played down inflation worries and the prospect of aggressive interest rate increases last week at a Fed conference in the US. Poloz argued that the recent spike in inflation to 3% in July, the highest in the G-7, was due to transitory factors that would eventually be reversed. The wage measures in today’s GDP report, along with the separate May employment earnings numbers, point to the Bank of Canada’s ‘wage-common’ measure rising 2.4% in Q2,  little changed from the increase in the first quarter.

Even though Canada is bumping up against capacity constraints and labour shortages are rising, Governor Poloz appears to be in no hurry to bring interest rates all the way back to non-stimulative levels. He has repeatedly made a case for gradualism citing heightened uncertainty over geopolitics and trade as well as economists’ inability to measure critical parameters like potential growth.

The Bank of Canada has raised its benchmark interest rate four times since July 2017 to cool the economy, and market indicators suggest investors are expecting as many as three more hikes over the next year, after which the central bank is anticipated to go into a long pause. That will leave the target for the benchmark rate, currently at 1.5%, at 2.25%–below the 3% “neutral” rate the Bank estimates as a final, non-stimulative resting place for overnight borrowing costs.

Sept. 5, 2018 marks the day of the next Bank of Canada announcement.  Economists indicate this week that we most likely will not see any changes as the Bank initially committed to making gradual rate increases.  Since we just had one in July of this year, many analysts are confident they will remain unchanged.  That being said, Scotiabanks economist is one who thinks that we could see an increase as inflation has grown quicker than anticipated.  If you are in a variable rate, you may or may not see an increase next week.  We will be reaching out to our current clients that are in a variable to ensure you are comfortable with your rate and current terms.

Stay tuned, you will find our comments to next weeks announcements on Facebook and Instagram and we will have an update out to all clients shortly after.  CLICK HERE to read an article from the Financial Post.

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