Ottawa’s latest round of mortgage policies could have quite the impact on current homeowners, especially those shouldering a large amount of debt. If you have a mortgage and are planning to refinance or renew in the coming months, you could be in for a bumpy ride. The two factors that will most impact your experience? Whether or not you plan to change your mortgage and your mortgage qualifications. Continue reading
Tag Archives: Real Estate
Buyers Showing Caution, Bank Keeps Rates Low
The Bank of Canada held its ground today, leaving the overnight lending rate unchanged at 1 percent. While the move was expected (the rate has been locked at this near-historic rate since September of 2010), the tone of the announcement was far less confident than previous press conferences.
The Bank’s release explained how a global economic slowdown is impacting Canada’s growth potential. While domestic factors remain strong, the Bank has trimmed back its outlook, suggeting that the economy will grow “at a pace roughly in line with its production potential in the near term.” Consumption and business investment are expected to be the main source of growth. However, the effect of lower commodity prices on Canadian incomes, combined with increasing household-debt, could cause some serious setbacks. Continue reading
What’s the Deal With One Man Bidding Wars?
Bidding wars are a common side effect of hot real estate markets. Whether you’re bidding against one or five buyers, the situation is always tense. It’s often an all or nothing offer – go big or go home. When multiple offers are on the table, the only strategy is to aim high, which is great for sellers. So great, in fact, that some sellers are trying to profit off of “fake” bidding war situations.
A Toronto realtor is calling for tougher bidding war rules after her client was duped into paying $90,000 over asking for a midtown home. The couple believed that they were in competition with three other bidders for the property, when in all actuality they were the only interested party. Continue reading
Can the Canadian Housing Market Fix Itself?
The Canada Mortgage and Housing Corporation released its second quarter housing market outlook today, stating that housing starts will likely moderate by the end of the year. While the market has remained hot through the first half of 2012, the Housing Corp. believes that both new and existing home market activity will eventually slow and even out.
Housing starts are expected in the range of 182,300 to 220,600 units this year, which is up from the roughly 164,000 to 212,700 forecasted back in 2012. The CMHC’s deputy chief economist, Mathieu Laberge, attributes this unexpected growth to condo construction, noting that the numbers varied significantly from month to month. Continue reading
Mortgage Rule Changes Not So Severe
The first round of changes to Canada’s mortgage rules were more bark than bite, according to a letter sent to the nation’s banks on Wednesday from the Office of the Superintendent of Financial Institutions. Earlier this year, mortgage experts speculated that new mortgage rules could have a dampening effect on hot real estate markets, as more and more mortgage applications would inevitably be rejected.
Draft guidelines released in March suggested that the OSFI would eliminate 100% financing using a 5 percent cashback mortgage as well as enforce stiffer regulations concerning loan-to-value ration calculations and stated income mortgages. The document also inferred that borrowers would be required to re-qualify each time their mortgage came up for renewal.
However, Wednesday’s announcement tells an entirely different story.