Are you looking to get into the market? Are you a first time buyer with less than 10% down?
If so then you need to be aware of recent changes to the mortgage insurance premiums that are offered through CMHC (Canadian Mortgage and Housing Corporation)
It was announced a few days ago that Canada’s federal housing agency is raising mortgage insurance premiums as part of a plan to boost its capital reserves.
Canada Mortgage and Housing Corp. said it is raising premiums on the highest-risk mortgages – borrowers who have down payments of less than 10 per cent – by 15 per cent starting June 1.
What does this mean for buyers?
The increases only apply to new mortgages for borrowers with small down payments. Those who put down more than 10 per cent of the purchase price aren’t affected. Premiums will also remain unchanged on CMHC’s portfolio insurance, which lenders take out on bundles of uninsured mortgages so they can securitized them, as well as the agency’s insurance for apartment buildings.
The effects will be modest for affected borrowers. An average Canadian borrower who can afford to pay the only the minimum 5-per-cent down payment typically takes out a mortgage of $252,000, CMHC said. Premiums for those borrowers would rise $5 a month, or about $1,500 more over the course of a 25-year mortgage.
CMHC predicted the changes would “not have a material impact on housing markets,” suggesting the agency isn’t looking to cool the housing market. Senior vice-president Steven Mennill stressed in a call with reporters that the changes were a “business decision” related to higher capital requirements and “not in any way related to a change in policy or approach.”
One thing is clear: By limiting increases only to borrowers with less than 10-per-cent down payments, the federal corporation is concerned that it was underpricing the risk on the most indebted borrowers.
Mortgages with lower levels of equity are typically more vulnerable to a housing shock and require higher levels of capital reserves to account for potential losses, which means higher premiums for riskier borrowers.
My advice would be is if you are thinking of buying a home this spring and have less than a 10% down payment that you take advantage of the lower premiums offered before June 1st.
For more details or questions please email myself at email@example.com or give us a call at 519-579-4110
Enjoy your week!
April 8, 2015 | Categories: Buyers, Local Kitchener Waterloo, Uncategorized | Tags: Bank of Canada, canadian mortgage housing corporation, cmhc, condo, condo buying, first time home buyer, full time realtor, home buying, home value, kevin baker, Kitchener waterloo, lofts in kitchener, market update, Mortgage News, Mortgage Rates, real estate, real estate investing, Remax, sales rep, waterloo ontario | Leave a comment
It was another solid month of home sales in March here in Waterloo Region. Residential property sales through the MLS system continued to climb month over month with 619 properties sold. This represents a 15.1 percent increase compared to the March of 2014 which was the second lowest March on record since 2006.
During the first quarter of 2015, there were a total of 1,343 home sales, 3.6 percent above last year’s total for the same period and 8.4 percent below the 5 year quarterly average, which is again great news and shows continued strength of our local housing market.
Sales activity in the $300,000 – $349,999 increased significantly in the month of March with 151 homes sold in that range, a 49.5% increase from the same time last year. Pushing the average sales price up for the month were increased sales in the $500,000 – $749,999 range which posted a 61.5% increase equating to 63 sales compared to 39 in March 2014.
March’s sales included 436 single detached homes (up 25.3 %), 95 condominium units (down 2.1 %), 41 semi-detached (down 8.9) and 41 freehold townhouses (down 6.8%).The average sale price of all residential sales increased 7.4 percent to $347,722 compared with March 2014. Single detached homes sold for an average price of $384,635 an increase of 4.0 percent compared to last year. In the condominium market prices were up 12.1%, with the average condo unit selling for $238,846.
Overall the market is still moving forward and prices remain stable. We are expecting another busy spring market which seems to be well underway at this point.
If you have any questions about the local market or would like more information on home prices for your neighborhood, please feel free to give me a call or email direct at firstname.lastname@example.org
Thanks and have a great week!
April 7, 2015 | Categories: Buyers, Local Kitchener Waterloo, Sellers, Uncategorized | Tags: Bank of Canada, condo, condo buying, condos in kitchener, eastbridge, first time home buyer, full time realtor, home buying, home value, inventory levels, kevin baker, Kitchener waterloo, kwhometeam, loft, lofts in kitchener, march update, market update, Mortgage News, real estate investing, real estate update, realtor, Remax, sales rep, selling your home, waterloo ontario | Leave a comment
After a busier than normal December, home sale in the Kitchener Waterloo region have cooled off slightly. Sales were down in January compared to January of 2014, with 290 residential properties being sold last month. A 9.9 percent decrease compared to the same month last year. This isn’t unexpected as the winter months are typically not as active leading up to the busy spring market.
January’s residential sales included 188 detached homes (down 9.6 percent compared to January 2014) 57 condos (down 24 percent), 18 semis (up 5.9 percent), and 25 freehold townhouses (up 31.6 percent).
The average sale price of all homes sold in January was $318,075, a decrease of 1.6 percent compared to the same time last year. Single detached homes sold for an average price of $357,018, a decrease of 4.6 percent compared to January 2014.
In the condominium market the average sale price in January was $230,216, a 6.6 percent increase compared to the same month a year ago.
With the recent interest rate cuts and the positive economic predictions for the region by a number of outside sources, this should continue to draw people looking to live and invest in Waterloo Region. The general consensus is that the spring market will again be a very active one.
If you have any questions or are thinking of buying or selling this spring please give me a call and we can discuss how to get started.
Have a great family day weekend everyone!
February 9, 2015 | Categories: Buyers, Local Kitchener Waterloo, Sellers | Tags: condo buying, condo in kitchener, condos in kitchener, first time home buyer, home buying, home staging, home value, interest rate, january, kitchener, market update, real estate, realty, Remax, selling your home, spring market, twin city, waterloo | Leave a comment
The major Canadian banks announced today that they will be lowering the prime lending rate by .15 basis points to 2.85%.
This move is the follow up to the Bank of Canada lowering the prime rate by .25 basis points last week. It is usual normal practice for the big banks to follow suit to the BOC but this rate change widens the spread or gap. It is an interesting move by the banks and I wonder if this is good for us as consumers or good for them?
Here is the link to the full article for more info.
I do believe the the Canadian housing market will show continued growth over the next year and this rate cut will further help to stimulate that growth.
If you have any questions at all please don’t hesitate to contact me at email@example.com
January 28, 2015 | Categories: Uncategorized | Tags: appraisal, assessment, Bank of Canada, banking practices, cibc, cibd, condo, condo buying, condo documents, condo in kitchener, condos in kitchener, home buying, market value, Prime rate, rbc, real estate, Remax, selling your home, tdcanadatrust | Leave a comment