New CMHC rules for self-employed borrowers take effect today

The new CMHC rules for self-employed borrowers take effect tomorrow and pose new challenges for this category of client.

First off, self-employed borrowers with more than three years in the same business who apply for a mortgage using stated income, as well as commissioned-income borrowers, are now required to provide to provide traditional proof of income (or "third party validation") through documents like financial statements, contracts and T4s.

Those who have recently become self-employed and don't have third-party validation can still apply for a mortgage, but have to come up with a 10 per cent down payment instead of five per cent. Refinancing will also be cut to 85 per cent loan to value instead of the previous 90 per cent.

Brokers have been giving the rule changes mixed reviews. Mark Fidgett, owner of Verico Notapennydown.com said the latest move was "off the wall" and hopes that if enough people talk about their displeasure with the changes, the CMHC might alter its decision. "I don't think this was a good decision - it doesn't make sense now," he said, adding it also makes writing off income for tax purposes more difficult for BFS clients.

Dominion Lending Centres broker Stephen Gilmour, on the other hand, agrees with CMHC's decision.
"The more people who default on loans, the worse the market becomes," he said, noting he felt a lot of self-employed people have qualified for mortgages when they shouldn't have. "This provision for self-employed is going to put the right people in the right structure of home."

Read the comments on this article here: http://www.mortgagebrokernews.ca/news/43649/details.aspx

Canadian Mortgage Industry Headlines

From Dominion Lending Centres Weekly Bulletin - Industry News Highlights]

Mortgage Application

Mortgage fraud may not be the most serious crime in the grand scheme of things, but it’s not something the government should be helping. But that’s exactly what real estate professionals say is a likely result of the new mortgage rules being put into place on April 19th.

“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.

Clarification on Qualifying Interest Rate

On February 16th, the government announced new parameters regarding the application of the government guarantee supporting the mortgage insurance industry, but did not stipulate the rules around qualifying interest rates. Effective April 19th, 2010, the qualifying interest rate used to assess borrower eligibility will change only for loans with an LTV greater than 80% as follows.

Fixed-Rate & Variable-Rate Mortgages

For loans with a fixed-rate term of less than five years and for all variable-rate mortgages, regardless of the term, the qualifying interest rate is the greater of:

• The benchmark rate
• The contract interest rate

For loans with a fixed-rate term of five years or more, the qualifying interest rate is:

• The contract interest rate

Mortgages with Multiple Interest Rates (eg, Multi-Component Mortgages)

Each component must be qualified using the applicable criteria defined above.

CMHC defines the benchmark rate as the Chartered Bank – Conventional Mortgage Five-Year rate that is the most recent interest rate published by the Bank of Canada in the series V121764 as of 12:01am (ET) each Monday, which can be found at: www.bankofcanada.ca/en/rates/interest-look.html

CMHC Self-Employed Policy Changes

CMHC Self-Employed Policy Changes

Mortgage loan insurance applications submitted to CMHC on or after April 9th, 2010 will include different criteria for self-employed borrowers without traditional third-party validation of income.

CMHC is reducing the maximum LTV for the Self-Employed Product Without Third-Party Validation of Income as follows:
For purchase and portability transactions, the maximum LTV is being reduced from 95% to 90%
For refinances, the maximum LTV is being reduced from 90% to 85%
The CMHC Self-Employed Product Without Traditional Third-Party Validation of Income is intended for self-employed borrowers who have difficulty providing documentation for their current income level. Typically, these are borrowers who recently became self-employed.

Accordingly, self-employed borrowers who have been self-employed in the same business for more than three years will not be eligible under this product. CMHC continues to require that the borrower have a minimum of two years of experience in the same field. This can include time spent working as a non-self-employed worker in the same field.

As CMHC has found that commissioned income can be relatively easily substantiated, borrowers who earn income through commission will no longer be eligible for the CMHC Self-Employed Product Without Traditional Third-Party Validation of Income.

New Canadian Mortgage Rules to Come into Force April 19th, 2010

Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules which are set to come into force on April 19th, 2010.

This means the government will adjust the rules for government-backed insured mortgages as follows:

1) 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.

2) Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90% from 95% of the value of their homes. This will help ensure home ownership is a more effective way to save.

3) Require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

Click here for additional details on the changes.

DLC supports the Government's measures as a prudent and balanced approach.

We've seen a rise in consumer debt and we anticipate interest rates will go up in the future, so it makes sense to put policies in place early to protect consumers.

These changes will help moderate the market without being too severe. They help protect first-time home buyers.

DLC Industry News

[Sources (Various) - Dominion Lending Centres]

Housing starts have started to recover and are expected to continue to improve in the second half of 2009. Starts are expected to reach 141,900 for the year and will increase to 164,900 for 2010, according to CMHC’s fourth quarter Housing Market Outlook, Canada Edition report.

“We expect housing markets across Canada to strengthen leading into and over the course of 2010 as economic conditions improve,” said Bob Dugan, Chief Economist for CMHC. “Demand for existing homes has rebounded since the beginning of the year. In addition, lower inventory levels characterize both the new and existing home markets. As a result, stronger housing demand will be reflected in higher levels of housing starts in 2010.”

The strong pace of MLS sales seen in the second and third quarters of this year reflects, in part, activity that was delayed in the previous two quarters and is not likely to be sustained. The level of sales is expected to move back closer in line with anticipated economic conditions. As a result, existing home sales, as measured by the MLS, will reach 441,300 units in 2009 and increase to 445,150 units in 2010. The average MLS price is expected to be $312,950 in 2009 and $324,500 in 2010.

Luxury homes sales continue to accelerate as economic recovery takes hold in major markets in Ontario and Atlantic Canada, according to a report released yesterday by RE/MAX.

The RE/MAX Upper End Report found that momentum is building in St John’s, Saint John, Halifax-Dartmouth, Ottawa, Kingston, Greater Toronto, Hamilton-Burlington and London as purchasers realize that the best buying period in recent history is about to come to a close. Sales are already on par or ahead of last year’s levels in 50% of cities surveyed, while the remaining markets are set to reach 2008 figures by year-end.

“Twelve months of healthy home buying activity have clearly been crammed into five short months,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “It’s hard to believe that the transition in the market began in May. We’ve seen steady upward momentum since that time, with solid year-over-year gains posted each and every month.”

Pent-up demand and greater affordability have been the catalyst. Increased selection in all markets – except Greater Toronto – as well as record low interest rates have also helped fuel move-up activity from Ontario to Newfoundland.

To read more, click here.

Canadians in the housing market will pay less in realty commissions and fees if the federal Competition Bureau has its way.

In a landmark investigation, the bureau has concluded the Canadian Real Estate Association (CREA) has anti-competitive rules and must change its ways, according to documents obtained by the Toronto Star.

Details of a settlement have yet to be decided, but the bureau’s findings are expected to have a profound impact on the real estate industry – by permitting more innovative discount brokers into the market while allowing sellers to list their properties less expensively on the Multiple Listing Service.

“The Bureau is concerned that CREA’s rules have restricted consumer choice and limited the scope of alternative business models,” says an internal memo by CREA President Dale Ripplinger. “Unfortunately, the Bureau seems to believe that CREA’s rules... create restrictions and barriers.”

The bureau launched its investigation in 2007. Consumers have complained in the past about high realty fees and the need for more affordable services. The vendor of an average-priced $400,000 home in Toronto can pay a commission of as much as 5% or $20,000.

To view the full article, click here.

Australia’s central bank raised its key interest rate by a quarter percentage point for the second month in a row yesterday, declaring the global downturn over and warning that inflation was set to rise.

The decision to hike rates was widely expected by analysts and moves Australia further away from most economies, which have yet to respond to signs that the financial crisis has eased by raising lending rates.

The Reserve Bank of Australia board decided at its monthly meeting to raise the cash rate by 25 basis points to 3.5%. A month earlier, Australia became the first major economy to raise interest rates since the outbreak of the crisis when the bank hiked its key rate by a quarter point from a 50-year low.

Governor Glenn Stevens said in a statement explaining the decision that inflation “will probably not fall as far as earlier thought” and “will probably rise somewhat over the coming year.” – Globe and Mail

Kudos to the Ontario Government, which announced Monday that starting in September 2011, students from grade 4 to grade 12 will be learning about money management through an “integrated” approach to boosting financial literacy.

This announcement by Ontario Education Minister Kathleen Wynne said a working group co-chaired by Parliamentary Assistant Leeanna Pendergast will provide a report to the Ministry’s Curriculum Council by next summer.

One of the goals is to advise how to “seamlessly integrate” a list of financial literacy concepts and skills into the existing curriculum. Currently, personal finance is partially addressed in the existing grade 9 to grade 12 curriculum through courses in business studies, mathematics, guidance and career education, social sciences and the humanities. The ministry will work with the Investor Education Fund to develop resources for teachers.

Wynne’s goal is to “develop a made-in-Ontario solution that aims to be a leading example – globally – of how financial education can be integrated into schools.” Pendergast said students will require critical financial skills needed to “navigate an increasingly complex global financial and economic system.”

To read the full Financial Post article, click here.

Karen Kinsley, President and CEO of CMHC, recently voiced her “disappointment” at the Financial Post for suggesting that the mortgage insurer was “reckless” while at the same time comparing it to Freddie Mac and Fannie Mae in the US.

In a letter to the Post published on October 31^st, Kinsley points to some key differences between the Canadian and American economies, such as a “lack of subprime issues, strong economic fundamentals,” and low interest rates in Canada.

She then goes on to note that while CMHC is entitled to insure up to $600 billion in mortgages, it only insures $480 billion now, it maintains capital reserves for future losses that are twice the minimum requirement set by the Office of the Superintendant of Financial Institutions (OFSI), and it is “subject to stringent government oversight” that includes regular reporting to Parliament.

To read the full letter, click here.

Housing Activity to Strengthen in 2010

[Source - www.cmhc.ca]
OTTAWA, November 2, 2009 — Housing starts have started to recover and are expected to continue to improve in the second half of 2009. Starts are expected to reach 141,900 for the year and will increase to 164,900 for 2010, according to Canada Mortgage and Housing Corporation’s (CMHC) fourth quarter Housing Market Outlook, Canada Edition report.

“We expect housing markets across Canada to strengthen leading into and over the course of 2010 as economic conditions improve”, said Bob Dugan, Chief Economist for CMHC.

Read Full Story Here: http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2009/2009-11-02-0815.cfm

Home Maintenance Tips for Spring

[Source - CMHC]
Protect Your Home — and Your Investment!

One of CMHC’s Home Maintenance Tips for Spring is to make sure your sump pump is operating properly before the spring thaw sets in, and ensure the discharge pipe allows water to drain away from the foundation.If you're like most Canadians, your home is probably your most important investment. It's also the place where you and your family tend to spend a great deal of time. A regular schedule of seasonal maintenance can help you protect that investment for years to come, and help keep your home — and your family — healthy, safe and sound all year round.

This spring, Canada Mortgage and Housing Corporation (CMHC) has a short checklist of simple inspections and repairs that can help you put a stop to the most common and costly problems before they occur, in as little as a few minutes a week, including:

Check your furnace, air exchanger and air conditioner filters, and clean or replace them if needed.

Check and clean your range hood filters on a monthly basis.

Make sure all indoor and outdoor air vents (intake, exhaust and forced air) are clear of snow and debris.

From the ground or any overlooking windows, check your roof for missing or damaged shingles. Have any damaged ones repaired.

Check the condition of caulking around windows and doors. Replace as necessary.

Test ground fault circuit interrupter(s) on electrical outlets each month by pushing the test button, which should cause the reset button to pop up.

Consult your hot water tank owner’s manual and follow its recommendations for testing the temperature and pressure relief valve to ensure it isn’t stuck. If you are unsure, consult a plumber.

Shut down and clean the furnace humidifier, and close the furnace humidifier damper on units with central air conditioning.

Have your fireplace or woodstove and chimney cleaned and serviced as needed.
Clear all drainage ditches and culverts of debris.

Check smoke, carbon monoxide and security alarms, and replace their batteries.
Clean all windows, screens and window hardware. Repair any holes in screens or replace them if necessary.

Open the valve to the outside hose connection once any danger of frost has passed.
Examine the foundation walls for cracks, leaks or signs of moisture, and repair them if required.

Repair and paint fences as needed.

Make sure your sump pump is operating properly before the spring thaw sets in, and ensure the discharge pipe allows water to drain away from the foundation.

Re-level any exterior steps or decks which may have moved due to frost or settling.
Clean any debris from eavestroughs and downspouts, reattach any sections that are loose, and make sure they are securely attached to your home and that the flow of water discharges away from your foundation.

Have well water tested for quality, and test for bacteria every six months.

Carry out any spring landscaping and, if necessary, fertilize young trees.

For more information or a free copy of the "About Your House" fact sheet Home Maintenance Schedule and other fact sheets on owning, maintaining or renovating your home, ask CMHC at 1-800-668-2642 or visit our Web site at www.cmhc.ca. For over 60 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency, and a source of objective, reliable housing expertise.

For story ideas or to access CMHC experts or expertise, contact CMHC Media Relations — National Office at: 613-748-2799 or by e-mail: media@cmhc-schl.gc.ca

Mortgage rates to remain stable: CMHC

[Source - CMHC]
Mortgage rates are expected to remain within 25 to 75 basis points of their current level for the remainder of 2009, according to CMHC's second quarter Housing Market Outlook, keeping them "very low in a historical context."

"Movements in mortgage rates are difficult to predict due to volatile economic conditions," the report stated. "Nevertheless, rates are expected to remain steady this year and edge higher in 2010."

Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebounding to 150,300 in 2010.

"The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007," said CMHC chief economist Bob Dugan. "Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period."

Everything you need to Open New Doors - CMHC

CMHC for Consumers

The local market still looks sound

Many people are wondering whether the housing crisis in the U.S will be the same here in Canada, and specifically Ontario. There are many reasons why it will not, and that is good news. There was a great article in Friday's Globe in Mail that puts into perspective and spoke about the key indicators to consider.

The local market still looks sound
[Source - DEREK RAYMAKER, From Friday's Globe and Mail October 17, 2008]

There's an old saying that goes: when the water-hole dries up, that's when all the animals start to look at each other funny.

The last two weeks have seen a spectacular crash of global equity markets and a virtual paralysis in capital flow. The headlines are frightening, but digging behind them even slightly is enough to make your blood run cold.

This is especially true if you are close to retirement and have just watched your investments go for a swan dive off the tallest peak of Bay Street, ripping one-third or more of their value on the way down. But the scariest part of a good old-fashioned economic meltdown is waiting for the other shoe to drop. That's when the terror sets in — not having a clue what comes next.

As last week's stock market collapse showed, psychology can drive events to a crisis point as much as real economic happenings such as job losses, trade slowdowns, property foreclosures and bank failures. So how do home buyers and sellers keep their heads on straight in these troubled times?

Read entire article here

Mortgages, capital and that darn TED spread

[Source - ReportonBusiness.com]

The Report on Business takes questions on the financial crisis.

Who owns Canada Mortgage and Housing Corp. and can it go under?

CMHC was set up by the federal government just after the Second World War to help deal with a housing shortage exacerbated by the huge number of soldiers returning home. It helped finance home construction and provided funds for low-income housing. In the 1950s, when banks got into mortgage lending, CMHC started insuring "high-ratio" mortgages where home buyers initially made only a small down payment. This summer CMHC stopped insuring mortgages with zero down payment or 40 year amortizations.

CMHC also subsidizes aboriginal housing, provides loans and grants for certain kinds of renovations, and gathers statistics on the housing market. It also buys mortgages from financial institutions, and repackages them as mortgage-backed securities, which it sells to investors.

Because CMHC is a Crown corporation - unlike Fannie Mae and Freddie Mac which were private companies - it is backed by Ottawa and could not really "go under."

Read the whole story here: http://www.theglobeandmail.com/servlet/story/LAC.20081010.RBANKSEXPLAINER10/TPStory/Business

Flaherty unveils $25-billion mortgage plan

[Source - Paul Vieira and Jamie Sturgeon, Financial Post]

The federal government said Friday it would inject up to another $25-billion of liquidity into the financial system through the purchase of insured mortgage pools.

In a speech delivered in Ottawa, Jim Flaherty, the Minister of Finance, said the move is aimed at maintaining the availability of long-term credit, which is under severe strain at present as banks are unwilling to lend to each other.

"It is becoming increasingly clear that the continuing disruption of global credit markets, which has been severe and protracted, is making it difficult for our financial institutions to raise long-term funding. This is beginning to affect the availability of mortgage loans and other types of credit in Canada," Mr. Flaherty said.

Read the whole story here: http://www.nationalpost.com/news/canada/story.html?id=873182

Fall House Maintenance

Timing of the seasons varies not only from one area of Canada to another, but also from year to year in a given area. For this reason, we have not identified the months for each season. The maintenance schedule presented here, instead, is a general guide for you to follow.The actual timing is left for you to decide, and you may want to further divide the list of items for each season into months.


Have furnace or heating system serviced by a qualified service company every two years for a gas furnace, and every year for an oil furnace.

Open furnace humidifier damper on units with central air conditioning and clean humidifier.

Lubricate circulating pump on hot water heating system.

Bleed air from hot water radiators.

Examine the forced air furnace fan belt for wear, looseness or noise; clean fan blades of any dirt buildup (after disconnecting the electricity to the motor first).

Turn ON gas furnace pilot light.

Check and clean or replace furnace air filters each month during the heating season.Ventilation system, such as heat recovery ventilator, filters should be checked every two months.

Vacuum electric baseboard heaters to remove dust.

Remove the grilles on forced air systems and vacuum inside the ducts.

If the heat recovery ventilator has been shut off for the summer, clean the filters and the core, and pour water down the condensate drain to test it.

Clean portable humidifier, if one is used.

Have well water tested for quality. It is recommended that you test for bacteria every six months.

Check sump pump and line to ensure proper operation, and to ascertain that there are no line obstructions or visible leaks.

Replace window screens with storm windows.

Remove screens from the inside of casement windows to allow air from the heating system to keep condensation off window glass.

Ensure all doors to the outside shut tightly, and check other doors for ease of use. Renew door weatherstripping if required.

If there is a door between your house and the garage, check the adjustment of the self-closing device to ensure it closes the door completely.

Ensure windows and skylights close tightly.

Cover outside of air conditioning units.

Ensure that the ground around your home slopes away from the foundation wall, so that water does not drain into your basement.

Clean leaves from eavestroughs and roof, and test downspouts to ensure proper drainage from the roof.

Check chimneys for obstructions such as nests.

Drain and store outdoor hoses. Close valve to outdoor hose connection and drain the hose bib (exterior faucet), unless your house has frost proof hose bibs.

If you have a septic tank, measure the sludge and scum to determine if the tank needs to be emptied before the spring.Tanks should be pumped out at least once every three years.

Winterize landscaping, for example, store outdoor furniture, prepare gardens and, if necessary, protect young trees or bushes for winter.

[Source: CMHC - http://www.cmhc.ca/en/co/maho/gemare/gemare_003.cfm]

Condo hunting: 5 advantages of resale

5 advantages of resale: no surprises, if you do your homework

Yesterday we reviewed the advantages of buying a new condo, here are the advantages to buying resale. Up for sale by the current owner, resale condos are usually available in older buildings and have already been occupied.
"What you see is what you get with resale condos," says our expert. "You can see exactly what you're paying for — the unit, common elements, amenities, location and neighbours." That can be a big comfort to some buyers. Other benefits:

1) Established neighbourhood. "You already know what to expect from a neighbourhood and who your neighbours will be," informs Mr. Hill. New condo buildings, on the other hand, may be in an up-and-coming neighbourhood that may change substantially in the next few years. "Speak with condo board members and owners in the building," he also advises, to get the feel of the condo community.

2) Books to review. "You can also review the condo reserve fund and other documents to get a sense of whether or not the condo has sufficient funds to see to repairs and replacements," adds Mr. Hill. "That will help ensure that you don't get hit with an unexpected charge for repairs to common elements such as elevators, balconies, parking garages and roofing, for example."

3) A firm moving date. Your closing agreement firmly determines when the place will be yours, unlike new developments, where move-in dates can be rescheduled.

4) More predictable costs. You don't have to pay GST on a resale condo (unless the unit has been substantially renovated). You'll also have a firmer grasp of maintenance fees, current utility bills and property taxes.

5) Spacious floor plans. In many cities, new condos are getting smaller and smaller. Older condominiums may offer larger units.

For more information on buying a new or older condo, download the CMHC's Condominium Buyers' Guide.

Source: The Smart Life - August 2008 - TD Bank]

If you have any questions on obtaining financing for a condominium, please call Greg at DLC Perfect Mortgages.

Have a great day and happy condo hunting!

Condo Hunting: 5 advantages of buying new

Enticed by those ads for a new condo development? Or looking for a resale condo in an existing building? If you're on a serious house hunt, it can be worth weighing the advantages of both new and resale condos, suggests Duncan Hill, manager of Sustainable Housing Policy and Research for the Canada Mortgage and Housing Corporation (CMHC). "If new and resale condos are available where you choose to live, look at both in order to choose a condo that best fits your needs and lifestyle."

New condominiums, whether under construction or newly built, give you a fresh slate with respect to design and amenities. "You have the advantage of new appliances and modern fixtures in your unit and new common elements, such as elevators, pool or gym," says Duncan Hill. The upside doesn't stop there, however:

1) New building condition. "New buildings can have less wear and tear than older buildings," he says. "And the condo unit and common elements should be in good condition for years to come, meaning there may be less risk of expensive and disruptive repairs and renovations."

2) Choice of units. "If you buy early, you have more choice of units in the building." You may even be able to choose what floor and direction your unit faces.

3) Customized finishes. In addition to choosing finishes for countertops, cabinetry and even flooring, you can usually pay for upgrades on appliances or other fixtures.

4) More efficient construction. New developments may be built to higher standards of energy efficiency, and also include recycling facilities. New construction is also subject to the most recent building codes
Expert tip: Ask about special measures taken to protect your comfort levels. "Are there any special provisions to limit noise transmission between units? How are the units heated, cooled and ventilated? How are odours controlled?" All of these are factors to ask about so that you are better informed.

5) New home warranty protection. To ensure that new dwellings are properly constructed, "many provinces have new home warranty programs," explains Mr.Hill. If anything covered goes wrong during the warranty period, the homeowner is protected
Expert tip: If you do buy a new condo, take advantage of the GST Housing Rebate that allows you to recover some of the GST or federal portion of the HST you pay. Note that some developers include GST/HST in the listing price and others don't.

[Source: The Smart Life - August 2008 - TD Bank]


Tomorrow we will review the 5 advantages to buying resale

If you have any questions on obtaining financing for a condo you have just purchased, please call Greg at DLC Perfect Mortgages.

How to Find Your Perfect Home

Looking for a home can be an exciting and exhilarating experience. But before you start your search, you first need to figure out where you want to live, what your housing needs will be both now and in the future, and how much you can spend.

To help you find the home that’s right for you, Canada Mortgage and Housing Corporation (CMHC) suggests you ask yourself the following questions:

How large a home do you need?

Do you need several bedrooms, more than one bathroom, a home office or a two-car garage?

Are you planning on making any lifestyle changes in the near future, for example, are you planning on having children?

Do you have teenagers who will be moving away soon? Or are you close to retirement, and looking to downsize to a smaller home? By clearly setting out your priorities in advance, you can help save yourself a great deal of time and trouble later.

Are there any special features you’d like your home to have, such as air conditioning, a swimming pool or a spare room for a hobby?

What kind of neighbourhood do you want to live in? Remember to take into account such features as how easy it will be to commute to work, whether your children will have a school close by, and how close you will be to family, friends and safe recreational areas and facilities.

Would you prefer to live in a new home or a resale? New homes offer such advantages as more personalized choices, up-to-date appliances and finishings, and often lower maintenance costs. But resale homes can provide easier access to more established services and mature landscaping, and may save you from having to pay GST/HST on your purchase.

What type of home would you feel most comfortable living in? The choices available on the market today range from single-family detached houses, semi-detached and duplexes to townhouses, modular homes and condominiums.

When you’re ready to start looking for a home, some good sources include newspapers, real estate magazines, the Internet, real estate agents and word of mouth. If you’ve decided which neighbourhoods you’re interested in, you can also spend a few days driving around them to look for new development sites or “For Sale” signs.

Another very important step in the home buying process is to contact a Mortgage Agent and get pre-approved for your financing. Now you will know what price range you can look in and this will also help your realtor do their research for your perfect home.

For more information on getting the perfect mortgage for your family, visit Dominion Lending Centres Perfect Mortgages www.gregbarrow.ca, or call 416 807 7123. You can apply online, by phone or by fax

For more information on what features to look for and other factors associated with buying a home, visit www.cmhc.ca, search "Homebuying Step-by-Step" or call CMHC at 1-800-668-2642. For more than 60 years, CMHC has been Canada’s national housing agency and a source of objective, reliable housing expertise.

[Published in part @ www.cmhc.ca February 05, 2008]

Government of Canada Moves to Protect, Strengthen Canadian Housing Market

On July 9, 2008 the Government of Canada announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian housing market. The new measures include:

• Fixing the maximum amortization period for new government-backed mortgages to 35 years;
• Requiring a minimum down payment of five per cent for new government-backed mortgages;
• Establishing a consistent minimum credit score requirement; and
• Introducing new loan documentation standards.

Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.

Read more here: http://www.fin.gc.ca/news08/08-051e.html