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CMHC’s First Time Buyer Program
What you need to know

CMHC ( Canada Mortgage and Housing Corporation ) officially announced yesterday to release details of its First-Time Buyer Incentive ( FTHBI ). Here is a Recap: CMHC will contribute 5% of a down payment for the purchase of an existing home or 10% for the purchase of a new build The mortgage must be default insured The applicants’ household income must be less than $120,000 No monthly payments are required, and this amount can be paid back at any time, or upon the sale of the house CMHC shares in both the proportionate gains or losses in home value The insured mortgage plus incentive cannot be more than four times the participants’ household income (roughly a $565,000 maximum purchase price

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Why Canada’s mortgage regulator thinks the stress tests are ‘working’
But house prices continue to climb....so IS IT "WORKING" ??

The federal financial-system regulator responsible for creating Canada’s mortgage stress tests says the rules are “working,” countering repeated calls from the industry for reform. “Since the B-20 revisions were put in place, lenders are approving fewer mortgages for the most highly indebted or over-leveraged borrowers,” reads a statement the Office of the Superintendent of Financial Institutions (OSFI) issued this week. Guideline B-20, which became policy in January 2018, included a so-called stress test for uninsured mortgage applicants. The test requires borrowers with downpayments of 20 percent or more to qualify a rate that is 2 percentage points above their contract rate. To obtain a five-year fixed-rate mortgage at 3 percent, for example, a borrower would have to show they could

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Next Rate Move Will be Lower: CIBC
Some ideas about where rates will go next.

Just months ago, the prospect of an additional Bank of Canada rate hike by the end of 2020 was very much on the table. In recent weeks, however, whispers that the next rate move may in fact be down have been growing louder. In December, Capital Economics said they expected a rate cut before the end of 2019—a call that turned some heads. But now, heavyweights like JPMorgan Chase & Co. and CIBC are adding their voices to those forecasting an impending rate cut rather than a rate hike. JPMorgan Chase has reduced its Canadian growth forecast to 1.5% from 2.25% and expects the BoC to deliver a 25-bps cut at its October rate meeting. Economists at CIBC also expect

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Don’t kill the mortgage stress test
But do modify it...radically

The dreaded “stress test”…. Is it the stress test that is preventing people from buying homes in Canada? Certainly, it has a big impact on affordability but I would argue that the seemingly uncontrollable rising  house prices and/or current level of home prices have much more to do with getting into a new home than does the stress test. The stress test should be modified to take into consideration the current leveling of interest rates; the fact that incomes rise within the 5-year term of a mortgage; and that principal is being paid down prior to the maturity of any mortgage term.  Perhaps these points should lead to a stress test that inputs a rate of 1% over contract vs.

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Down Payment Confirmation
Confirming the source is as important as having the funds available

The time leading up to the closing day on your new home purchase can be very stressful and there are a number of things that must come together before you are handed the keys to your new home. One of these requirements involves your down payment and the verification of the source of your down payment. This is to ensure that borrowed money is not being used for the down payment. This information is required by your lender, as well as, in some cases, insurance providers such as the Canada Housing and Mortgage Corporation (CMHC). Down payment sources fall into one of the following three categories: Down Payment from the Sale of Your Current Home When selling your current home

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New mortgage rules help first time home buyers
The latest Federal Budget has incentives to purchasers

Finally, some relief in the mortgage world. While the winds of change aren’t as forgiving as we would have hoped, they are at least moving in the right direction. The centerpiece of budget is a plan to boost home ownership and help ease the difficulty of obtaining a new mortgage. The new First-Time Home Buyer Incentive, for those with an annual income of $120,000 or less, would provide an interest free loan of up to 5% of the value of an existing property or 10% of a new construction home. The government says the $1.25 billion in financing will help 100,000 Canadians over three years. Another $100 million in financing will be administerd by third party groups, including non-government organizations.

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Mortgage Pre Approvals in Cambridge

I Read a great post by Elan Weintraub the other day and had to share his thoughts as it mirrors our opinion. Should pre-approvals be made illegal?  These Cambridge Mortgage Brokers agree with Elan Weintraub. He says that there’s no weight behind actual pre-approvals, and that they only serve to confuse consumers and we agree. “The word ‘pre-approval,’ as anyone who has experience in the mortgage industry knows, has no weight behind it, and it creates misinformation for buyers and for realtors,” he told Mortgage Broker News.  “That misinformation can have dire consequences. There are some lenders who advertise prequalification in 30 seconds, but that cements in buyers’ minds that they could buy a house for, say, $800,000 and then

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Is it time to go Variable?
Find out what some experts are saying...

Many industry and economic insiders were pointing to 3-4 more rate hikes in the next 18 months. The central bank’s recent change of heart has many believing we will only see one more hike in the near future and likely not until the spring. As a mortgage broker in Cambridge for almost 30 years now I am never quick to jump on one band wagon or another. There are just too many variables to consider and many times what is said in press releases vs what actually occurs are two very different things. The price and distribution of Canadian Oil, for example, wasn’t expected to be this much of a concern to the Canadian Economy as it has turned out

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7 steps to get the best mortgage renewal
With 47 per cent of homeowners scheduled to renew their mortgages this year, 2018 is a year of change for lots of Canadians. Here are the top 8 things you can do to get the best renewal:

1. Pull out your mortgage renewal now, and start early. When you are proactive instead of reactive you can see if there is anything on your credit score or lifestyle that we can modify to ensure you are positioned for the best renewal. You are only in a position to do this when you start early- in the last year of your mortgage you will have the most amount of options available. For example, there can be an inaccuracy in your credit report or you may be considering an income/job change that would impact your options. We can look at timing accordingly for you. 2. Most people think the best rate is the best renewal – WRONG. The terms are

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