Friday, May 2, 2014
Tuesday, April 8, 2014
Things to Consider Before you Buy Your First Home. What can you afford?
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No. 1 of 10 Things to Consider Before you Buy Your First Home
What can you afford? Have a Budget: Buying a home shouldn’t be taken lightly; it is a big step and probably the largest financial decision you will make. Before making the decision to buy, take time to work out your personal budget which includes what you can afford and the different costs you will incur between renting and owning. Your budget is not necessarily referring to the maximum you qualify for, but what is more in line with your own personal spending habits. This is imperative if you don’t want to have to change your lifestyle significantly because each month you are financially strapped, or worse, regret it and lose your home because you can’t afford it! Use our FREE Budget Planner Tool to figure out what you can realistically afford.Contact me at rephard@tmacc.com for the Budget Planner.
Monday, April 7, 2014
Tuesday, March 25, 2014
Why you might want to get a head start on the Spring Market!
Canada Mortgage and Housing Corporation (CMHC) just announced an increase to their default insurance rates. Anyone purchasing their home with less than a 20% down payment is required to have their mortgage insured against default. The premium charged for that insurance has increased to as much as 3.15% of the amount borrowed from the current 2.75%. What this means is that on a mortgage of $250 000 the increase will amount to an additional $1000 on your mortgage which will increase in your monthly mortgage payment.
The good news is that this doesn’t come into effect until May 1, 2014 As long as you arrange your mortgage prior to May 1, 2014 (closing date can be after May 1, 2014) you won’t be subject to this increase. Click here to read the CMHC article.
Interest rates are still low and house prices continue to slowly move upwards even though sales have been down slightly over the last couple months. According to the latest announcement from Royal Lepage “housing has continued to maintain its momentum and expect a 3.7% increase in home prices this year”.
The Canadian mortgage landscape seems to change monthly. Having a mortgage professional who is not only knowledgeable but passionate about all things mortgages is your best bet when it comes to offering sound advice. If you know someone that has a question about buying a home or refinancing contact me anytime.
Wednesday, March 5, 2014
Top grants and rebates for property buyers and owners
1.Home Buyers’ Plan
Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time.
For more information go to Canada Revenue Agency at www.cra.gc.ca
Enter ‘Home Buyers’ Plan’ in the search box or call 1.800.959.8287
2.GST Rebate on New Homes
New home buyers can apply for a rebate for the 5 per cent GST if the purchase price is $350,000 or less. The rebate is equal to 36 per cent of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. At $450,000 and above the rebate is nil.
For more information call 1.800.959.8287 or go to Canada Revenue Agency www.cra.gc.ca and enter ‘RC4028’ in the search box.
3.BC Property Transfer Tax (PTT) First-Time Home Buyers’Program
Qualifying first-time buyers may be exempt from paying the PTT of 1 per cent on the first $200,000 and 2 per cent on the remainder of the purchase price of a home priced up to $475,000. There is a proportional exemption for homes priced up to $500,000. At $450,000 and above the rebate is nil.
For more information go to BC Ministry of Small Business and Revenue at www.sbr.gov.bc.ca/business/Property_Taxes/Property_Transfer_Tax/ptt.htm or call 250.387.0604.
4.First-Time Home Buyers’Tax Credit (HBTC)
This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year (15 per cent in 2012) x $5,000. For the 2013 tax year, the maximum credit is $750.
For more information go to Canada Revenue Agency at www.cra-arc.gc.ca or call 1.800.959.8281.
5.BC Home Owner Grant
Reduces property taxes for home owners with an assessed value of up to $1,100,000. The basic grant gives home owners:
• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver and Fraser Valley regional districts;
• an additional grant of $200 to rural homeowners elsewhere in the province; and
• an additional grant of $275 to seniors aged 65+, those who are permanently disabled and war veterans of certain wars.
For more information go to BC Ministry of Small Business and Revenue at www.rev.gov.bc.ca/hog or contact your municipal tax office.
6.BC Property Tax Deferment Programs
Property Tax Deferment Program for Seniors. Qualifying home owners aged 55+ may be eligible to defer property taxes.
Financial Hardship Property Tax Deferment Program. Qualifying low-income home owners may be eligible to defer property taxes.
Property Tax Deferment Program for Families with Children. Qualifying low-income home owners who financially support children under age 18 may be eligible to defer property taxes.
For more information go to www.sbr.gov.bc.ca.
7. Canada Mortgage and Housing (CMHC) Residential Rehabilitation Assistance Program (RRAP) Grants
This federal program provides financial aid to qualifying low-income home owners to repair substandard housing. Eligible repairs include heating, structural, electrical, plumbing and fire safety. Grants are available for seniors, persons with disabilities, owners of rental properties and owners creating secondary and garden suites.
For more information go to www.cmhc-schl.gc.ca or call 1.800.668.2642.
8.Home Adaptations for Independence (HAFI)
A program jointly sponsored by the provincial and federal governments provides up to $20,000 to help eligible low-income seniors and disabled home owners and landlords to finance modifications to their homes to make them accessible and safer.
For more information go to BC Housing at www.bchousing.org/Options/Home_Renovations or call 604.646.7055 or toll-free 1.800.407.7757 extension 7055.
9.CMHC Mortgage Loan InsurancePremium Refund
Provides home buyers with CMHC mortgage insurance, a 10 per cent premium refund and possible extended amortization without surcharge when buyers purchase an energy efficient home or make energy saving renovations.
For more information go to www.cmhc.ca or call604.731.5733.
10. Energy Saving Mortgages
Financial institutions offer a range of mortgages to home buyers and owners who make their homes more energy efficient. For example, home owners who have a home energy audit within 90 days of receiving an RBC Energy Saver™ Mortgage, may qualify for a rebate of $300 to their RBC account.
For more information go to www.rbcroyalbank.com/products/mortgages or call 1.800.769.2511.
11. Low Interest Renovation Loans
Financial institutions offer ‘green’ loans for home owners making energy efficient upgrades. VanCity’s Bright Ideas personal loan offers home owners up to $20,000 at prime + 1 per cent for up to 10 years for ‘green’ renovations. RBC’s Energy Saver loan offers 1 per cent off the interest rate for a fixed rate installment loan over $5,000 or a $100 rebate on a home energy audit on a fixed rate installment loan over $5,000.
For information visit your financial institution.For more information go to www.vancity.com/Loans/TypesOfLoans/BrightIdeas and www.rbcroyalbank.com/products/personalloans/energy-saver-loan.html
12. BC Hydro Appliance Rebates
Mail-in rebates for purchasers of ENERGY STAR clothes washers, refrigerators or freezers.
For more information go to www.bchydro.com/powersmart or call 1.800.224.9376.
13. BC Hydro Fridge Buy-Back Program
This ongoing program rebates BC Hydro customers $30 to turn in spare fridges in working condition.
For more information go to www.bchydro.com/powersmart or call604.881.4357.
14. FortisBC Rebate Program
A range of rebates for home owners include a $75 rebate for upgrading to an ENERGY STAR clothes washer, $300 rebate on an Ener-Choice fireplace and a $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating system.
For more information go to www.fortisbc.com/NaturalGas/Homes/Offers/Pages/default.aspx or call 1.888.224.2710.
15. FortisBC Rebate Program for Businesses
For commercial buildings, provides a rebate of up to $60,000 for the purchase of an energy efficient boiler, up to $15,000 for the purchase of a high-efficiency water heater and receive funding towards a new construction energy study.
For more information go to www.fortisbc.com/NaturalGas/Business/Offers/Pages/default.aspx or call 1.866.884.8833.
16. LiveSmartBC Small Business Program
Business Energy Advisors (BEAs) delivers free energy assessments. Help business owners tap into available product incentives and cash rebates for lighting, hot water, heating and ventilation improvements. Help business owners coordinate product installation. NOTE: this program expires March 31, 2014.
For more information go to www.livesmartbc.ca/incentives/small-business/index.html or call 1-866-430-8765.
17. City of Vancouver Rain Barrel Subsidy Program
The City of Vancouver provides a subsidy of 50 per cent of the cost of a rain barrel for Vancouver residents. With the subsidy, the rain barrel costs $75. Buy your rain barrel at the Transfer Station at 377 W. North Kent Ave., Vancouver, BC. Limit of two per resident. Bring proof of residency. There is also a limited time offer for short rain barrels for small yards. Cost $50.
For more information go to http://vancouver.ca/engsvcs/watersewers/water/conservation/programs/rainbarrel.htm or call 604.736.2250.
Other municipalities have similar offers.
18. Local Government Water Conservation Incentives
Your municipality may provide grants and incentives to residents to help save water. For example, the City of Coquitlam offers residents a $100 rebate and the City of North Vancouver, District of North Vancouver, and District of West Vancouver offer a $50 rebate when residents install a low-flush toilet.
Visit your municipality’s website and enter ‘toilet rebate’ to see if there is a program.
19.Local Government Water Meter Programs
Your municipality may provide a program for voluntary water metering, so that you pay only for the amount of water that you use. Delta, Richmond and Surrey have programs and other municipalities may soon follow. Visit your municipality’s website and enter ‘water meter’ to find out if there is a program.
Source: Real Estate Board of Greater Vancouver.
How lower interest rates are making variable mortgages more tempting
Consumers facing record housing prices are probably increasingly tempted to go with a floating rate mortgage and all the risks that come with an interest rate linked to prime. The lure is right in your face on every mortgage rate comparison site.
Read more...
Recent Bank of Canada announcement on changes to their Overnight Rate
As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.
At 10:00 am EST, Wednesday March 5th, 2014 the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is fabulous news but are you still making the most of the low payments you still have, as the rate will increase in the future. No doubt you are getting ready to file in 2013 Income Tax Return – are you getting a refund? Give me a call and we can chat about helping you make the most of that refund and the savings you continue to make on your mortgage – I have some great budgeting and savings strategies for you – let me know as I would be happy to assist.
Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision today:
“The global economy is evolving largely as anticipated, with growth expected to strengthen in 2014 and 2015. The United States is still expected to lead the acceleration in advanced economies, although recent data have been softer, largely owing to weather effects. Volatility in global financial markets has increased somewhat, reflecting buoyant market conditions in most advanced economies and increased risk differentiation among emerging markets. More recently, tensions in Ukraine have added to geopolitical uncertainty. In Canada, economic growth in the fourth quarter of 2013 was slightly stronger than the Bank anticipated. Although exports have been a little stronger than previously thought but continue to underperform, and overall business investment has yet to pick up.”
Just as before, the Bank still does not expect to increase their rate in the foreseeable future with any change most likely to occur late 2014 or even not until 2015! They need to wait to see economic growth continue on a more upward direction and become more sustainable long term. Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won’t see a large significant increase all at once.
Fixed rates dropped just slightly since the last announcement to around 3.19% to 3.39% for a five year fixed term.
Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I’d recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is April 16th, 2014 at which time I’ll be in touch again.
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