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“There’s going to be a dramatic increase in mortgage fraud again,” says Don Campbell, President of the Real Estate Investment Network (REIN), a Calgary-based association of investors who collectively own more than $3 billion in property. “You watch this thing start to take off.”
The reason? It’s virtually impossible for investors to buy a third rental property without putting 20% down because the new CMHC rules use a 50% add-back policy instead of an 80% offset for rental income. Essentially, that means investors get less mileage from the rent that is typically used to pay off the mortgage.
The more difficult financing multiple properties beomes, the more tempting it is to cheat the system. One way to get around the rules is to not claim properties as investment vehicles.
“People are going to start signing documents and say, ‘Ah, yes, I’m moving in,’ or ‘This is my principal residence,’ just to get a mortgage that doesn’t require 20% down, but is 5% down,” says Campbell.
Click here to read more in the Financial Post.
Continued low interest rates and quickly rising home prices are helping encourage those who have been on the fence about buying their first home to go ahead and take the plunge.
But according to a TD Canada Trust poll of female homeowners, there are a number of things that they wish they’d known before they bought – for example, 25% said they’d wished they’d researched their mortgage options better.
“Whether you choose a variable-rate or a long-term fixed interest rate mortgage will depend on your comfort with interest rate fluctuation and your ability to carry a higher mortgage payment if interest rates rise,” says Chris Wisniewski, the bank’s group product manager for real estate secured lending.
“As anticipation about rising interest rates grows, more women may be interested in exploring longer-term fixed interest rate mortgages. Either way, it’s important to consider all options early because once you put in an offer, things will move very quickly.”
Click here to read the full story in The Province.
The honeymoon isn’t exactly over, but the partners – new home buyers and low mortgage rates – drifted apart a bit last week as seven major Canadian banks raised their posted rates.
The increases reflect a strong bond market, with the key five-year closed rate affected the most, rising 0.6% to 5.85%.
It means a homeowner taking the new rate will see monthly payments on a $250,000 mortgage rise to $1,577, up from $1,489 – an increase of $88 per month.
The rate increases come three weeks before new federal government regulations on minimum mortgage qualification requirements come into effect April 19th.
Click here to read the full Calgary Sun article.
According to the March RBC Canadian Consumer Outlook Index, most Canadians (65%) are losing sleep over their finances. More than one-in-four Canadians (27%) are up at night worrying about paying off their debt, followed by nearly one-in-five (18%) who worry about having enough for retirement and 16% who worry about having no emergency fund.
The survey also found that one-in-three (34%) were not confident about any aspect of their financial situation.
More Canadians believe the national economy will worsen over the next 12 months (20% in March compared to 13% in February). Similar to February’s findings, Canadians are still divided on the overall state of the economy, but the balance remains in positive territory with 54% of Canadians believing the economy is good and 46% describing it as bad.
Overall, the March RBC Canadian Consumer Outlook Index remained virtually flat at 108 points, down from 109 in February, suggesting Canadians see the overall economic recovery as a bumpy road ahead.
Click here to read more about the RBC index.
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