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BC Budget Speculation, Changes for Home Buyers

Chilliwack BC, The BC budget is set to be released in just a few days and as always, there are speculators weighing in on the changes we’re expected to see and where exactly we expect funds to be allocated. Housing affordability is a topical subject of course, as we’ve seen the rise and fall of transactions over the last few years and the impact these rules and regulations have had on home buyers and even home owners. These changes may consist of altering home buying programs and mortgage products, along with tax benefits for seniors, pharmacare and job training. Here is a more detailed look at those predictions:

Longer Mortgage Amortizations: Re-introducing 30-year amortizations for those who have less than a 20% down-payment.

Home Buyers Plan: Increasing the RRSP withdraw from $25,000 to $35,000 for first time home buyers without penalties with the stipulation that all moneys are repaid within 15 years.

Tax Benefits for Seniors: Increasing withdraw flexibility from RRIF’s by raising the age requirement (currently 71 years of age) as Canadians seem to be living and working longer. Consideration to increase the income threshold for GIS has also been mentioned. As it stands, qualification is limited to a max of $18,240

Pharmacare: Potentially lower the cost of prescription drugs.

Job Training: Businesses have claimed to be struggling to find the right fit along with the appropriate skill set to fill job vacancies. This shortage is apparent in the tech area and other industries that require skilled trades. Proposal to expand tax credits that allow tax payers write off a portion of the cost that comes along with training programs and further education.

For more information regarding the speculation of the BC budget: https://globalnews.ca/news/5051109/federal-budget-2019-canada-preview/

The Truth Behind Best Interest Rates

Chilliwack, BC – When it comes to getting a mortgage for a home purchase, refinancing to consolidate debt or simply renewing your mortgage, most of us are interested in securing the best interest rate. You’ll often see websites such as rate hub, offer rates that beat just about anything you’ve been quoted by your bank or mortgage broker, but did you know that 4 out of 5 people do not qualify for the rate they saw advertised? That incredibly low interest rate you saw online, will likely come with a detailed list of restrictions.

Here are a few common mortgage scenarios and the percent you can expect to add onto that “best interest rate”.

 

The above figures are estimates and subject to change without notice E&O, O.A.C.

Refinancing? Don’t miss out

If you’ve considered refinancing your house for a renovation, debt consolidation or any other reason, now might be your last chance to qualify.

Earlier this year the Government of British Columbia implemented a new mortgage rule which required borrowers to qualify at 2% above the contract rate.

Example

Before new mortgage rule – Borrowers could qualify at the given contract rate: 3.59%

After new mortgage rule – Borrowers we’re required to qualify at 2% above the given contract rate: 3.59% + 2% = 5.59%

Almost all lenders followed suit and changed their lending guidelines so that borrowers had to abide by the new rule, known as the “stress test” or “B20”.

Up until this point, there were a very small handful of lenders that did not change their lending guidelines and continued allowing clients to qualify at the contract rate. This small pool of lenders has slowly dwindled down and one by one are now requiring clients to qualify under the new mortgage rule.

It has been brought to our attention the last lender that was not qualifying clients under the new “stress test”, will now be implementing the stress test to all borrowers in the new future.

Please call our team as soon as possible to discuss your options as it is unlikely we will receive any warning prior to the implementation of this rule change.