Blog

 

Fall is viewed by many as the real start of the year as children are back to school, summer holidays are over for many, cooler weather arrives and we begin to focus again on our daily routine.


It’s also typically a great time to start looking for a new home since more listings come onto the market which is perfect for buyers looking for a first home, forever home or an investment property.


The Canadian Real Estate Association (CREA) reported that the number of homes sold has declined over the last 4 months even though homes listed for sale have increased. The attempts by our federal government to “soften” the housing market by making it more difficult for buyers to qualify for financing appear to be working.


Robert Hogue, senior economist at RBC, stated “housing developments are consistent with our view that Canada’s housing market is in the process of moderating to a more sustainable level of activity”.


While interest rates have gone up slightly, affordability is still not a concern for many people. TransUnion (credit agency) recently stated that while mortgage debt has increased over the last several years, there are less Canadians with concerns about handling their mortgage payments and overall debt.


This could be the perfect time for you to make a move. Find out the options that are available to you and how much you can qualify for in today’s market. Together we can find the right mortgage that helps you achieve your goals. Call or email me today. 


 

Regards,

 

 

 

Tony Marchigiano 

 

Mortgage Broker

 

 

 

310-328 West Hastings Street
Vancouver, BC


Read Full Story

Apartment and townhome activity is outpacing the detached home market across Metro Vancouver*. This activity helped push total residential sales above the historical average in September.

 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 2,821 in September 2017, a 25.2 per cent increase from the 2,253 sales recorded in September 2016, and a 7.3 per cent decrease compared to August 2017 when 3,043 homes sold.

 

Last month’s sales were 13.1 per cent above the 10-year September sales average.

 

“Our detached homes market is balanced today, while apartment and townhome sales remain in sellers' market territory,” Jill Oudil, REBGV president said. “If you’re looking to enter the market, as either a buyer or seller, it’s important to understand these trends and use this information to set realistic expectations.”

 

There were 5,375 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in September 2017. This represents a 12 per cent increase compared to the 4,799 homes listed in September 2016 and a 26.6 per cent increase compared to August 2017 when 4,245 homes were listed.

 

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,466, a 1.2 per cent increase compared to September 2016 (9,354) and a 7.5 per cent increase compared to August 2017 (8,807).

 

“Detached homes made up 30 per cent of all sales in September and represented 62 per cent of all the homes listed for sale on the MLS®,” said Oudil. “This dynamic has slowed the pace of upward pressure that we’ve seen on detached home prices in our market over the last few years.”

 

For all property types, the sales-to-active listings ratio for September 2017 is 29.8 per cent. By property type, the ratio is 14.6 per cent for detached homes, 42.3 per cent for townhomes, and 60.4 per cent for apartments.

 

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,037,300. This represents a 10.9 per cent increase over September 2016 and a 0.7 per cent increase compared to August 2017.

 

Sales of detached properties in September 2017 reached 852, a 27.9 per cent increase from the sales recorded in September 2016 (666), a decrease of 33 per cent from September 2015 (1,272), and a decrease of 32.9 per cent from September 2014 (1,270). The benchmark price for detached properties is $1,617,300. This represents a 2.9 per cent increase from September 2016 and a 0.1 per cent increase compared to August 2017.

 

Sales of apartment properties reached 1,451 in September 2017, a 19.1 per cent increase compared from the sales recorded in September 2016 (1,218), a 5.1 per cent decrease from September 2015 (1,529), and a 22.1 per cent increase from September 2014 (1,188). The benchmark price of an apartment property is $635,800. This represents a 21.7 per cent increase from September 2016 and a 1.4 per cent increase compared to August 2017.

 

Attached property sales in September 2017 totalled 518, a 40.4 per cent increase compared to the sales recorded in September 2016 (369), a 4.8 per cent decrease from September 2015 (544), and an 11.6 per cent increase from September 2014 (464). The benchmark price of an attached home is $786,600. This represents a 14.5 per cent increase from September 2016 and a 1.1 per cent increase compared to August 2017.

 

Full Stats Package >

Read Full Story

The Bank of Canada finally increased its bench mark rate to 0.75 percent (up 0.25 %) after seven years of leaving the key interest steady and even reducing it a couple of times. Typically, any increase or decrease in the Bank of Canada rate has a direct impact on the banks’ prime rates which they use to set interest rates for variable-rate mortgages and other loans. All five major Canadian banks did increase their prime lending rates by the same 25 basis points (0.25%). While this doesn’t sound like great news, the fact is that the Canadian economy is doing better than expected in 2017, employment is strong, mortgage defaults are at record lows and interest rates, both variable and fixed, are still close to historical lows.

 

What this means for you.


If you currently have a variable rate mortgage, home equity line of credit, or a combination of both, you will see an increase in the interest you pay and depending on the type of variable rate mortgage you may also see an increase in your payment. If you have a fixed rate mortgage you won’t see any change for the remainder of your term but you might face higher interest rates at the time of renewal.


Interest rates are just one component of your mortgage. Other factors such as amortization (number of years to pay off your mortgage), payment frequency, and prepayment options all have a significant impact on the amount of interest you actually pay.


Homeownership is an important long-term decision that can greatly enhance your overall financial well-being and having access to the right mortgage solution is just as important. With current speculation that the Bank of Canada might increase the benchmark rate one more time this year and with even more mortgage rule changes, it makes sense to get a pre-approved mortgage in hand before shopping for your first or next home.


I’m here to answer all your mortgage questions, call or email me today.


Regards,

 

Tony Marchigiano 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC


Read Full Story

The foreign buyers' tax, introduced by the previous Liberal government, has done little to improve affordability a year after it was introduced, say observers of Metro Vancouver's real estate  market.

 

Analysts say home prices have continued to escalate, sales are on pace with pre-tax expectations and houses are largely still out of reach for most residents.

 

"Maybe it's changed the composition of sales a bit, some fewer luxury sales ... but as far as shaping the overall Vancouver market, it really hasn't done that much," said Brendon Ogmundson, an economist with the B.C. Real Estate Association.

 

Last summer, then-premier Christy Clark introduced a 15-per-cent-tax on foreign home buyers in Metro Vancouver in response to the region's skyrocketing housing prices.

 

Many critics suggested that foreign capital was one reason real estate had become increasingly unaffordable, with locals unable to compete with foreign investors.

 

It worked! Or did it?


A month after the tax came into effect, Clark pointed to the dramatic impact the tax had on the market.

 

The number of transactions involving foreign buyers plunged, from 2,034 deals in the seven-week period before the tax, to 60 in the four weeks after.

 

The number of sales recorded by the Real Estate Board of Greater Vancouver that August fell sharply by 19 per cent.

 

While the effect of the tax was more immediate and dramatic than Ogmundson had anticipated, he said home sales had already been declining in the four months prior. 

 

The association had projected an 8 per cent drop in sales even before buyers were "spooked" by the introduction of the tax, he said.

 

But by the beginning of 2017, Ogmundson said the market stabilized. In July, sales were 0.7 per cent above the 10-year July sales average.

 

The Multiple Listing Service Home Price Index composite benchmark price for all residential properties in Metro Vancouver is $1,019,400 — an 8.7 per cent increase compared to July 2016 and a 2.1 per cent increase from June 2017.

 

'Politics over public policy'


Andrey Pavlov, a professor of real estate finance at Simon Fraser University, said that while the markets appeared to only cool temporarily from the tax, there is still likely a long-term impact.

 

"I realize that prices have come back to previous highs, but in all likelihood they would have been even higher without the tax," Pavlov said.

 

Both analysts agreed the tax has had little impact on affordability.

 

Pavlov said the dearth of housing in Vancouver is a much bigger factor that "hasn't been addressed at all."

 

What's needed, Pavlov said, are higher density allowances in order to create more housing, and greater freedom to build on undeveloped land such as the agricultural land reserve.

 

He also noted the growing gap between Vancouver-area incomes — which are lower than in many major North American cities — and housing costs.

 

Andy Yan, director of SFU's City Program, said fixing Vancouver's housing affordability problem requires all three levels of government to work together.

 

Yan noted that the foreign buyers tax was introduced last August, roughly six weeks after the B.C. government began collecting data on foreign buyers. That short span, Yan said, is proof the tax represented "politics over public policy."

 

Meanwhile, the president of the region's real estate board, Jill Oudil, said a tax on foreign buyers did not address one of the chief causes she believes is responsible for high housing costs — the low supply.

 

"It most certainly hasn't changed supply which has been our driving force in our market right now," said Oudil.

 

Demand for condos and townhouses

 

The most significant shift since the foreign buyers' tax was implemented is that demand for condominiums and townhouses has outstripped free-standing homes.

 

Ogmundson attributed this change to the need for more affordable housing.

 

In June, Oudil said the number of condominium listings was near an all-time low.

 

"Detached home listings have increased every month this year, while the number of condominiums for sale has decreased each month since February," she said.

 

The MLS Home Price Index benchmark price of apartments has grown to $616,000, an 18.5 per cent increase compared to July 2016.

 

The benchmark price for townhouses is $763,700, representing an 11.9 per cent growth also over last year.

All of it is evidence to Yan, that more work needs to be done.

 

"The expectation that this was about a single event, that it was about just foreign buyers by themselves creating unaffordability in the region, I think really fails to recognize the issue of a failing housing system."

 

Full Articler>

Read Full Story

Royal LePage is out with its latest House Price Survey and Forecast, and it says Greater Vancouver continues to be a sellers’ market, led by significant demand for condominiums.

 

It says compared to a year ago, the aggregate price of a home in Greater Vancouver in the second quarter rose 2.6 per cent to $1.1-million.

 

That is a marked slowdown from the double-digit growth in 2016.

 

When broken down by housing type, the median price for a bungalow was up 5.3 per cent to $1.3-million, for a two-storey house it fell 0.5 per cent to $1.4-million, and for a condo the median price rose 12.4 per cent to $578,000.

 

“The Greater Vancouver real estate market defies all odds and expectations in 2017,” Randy Ryalls, general manager of Royal LePage Sterling Realty, said in a statement.

 

“Overall, it’s tough for first-time buyers to enter the real estate market and a lot of prospective purchasers are being priced out of the market through highly competitive, multiple-offer scenarios, particularly within the well-priced condominium segment that first-time homeowners typically favour.”

 

As for the rest of the year, Ryalls said, “We anticipate that Greater Vancouver will see home prices continue to increase for the remainder of the year as more buyers re-enter the market, with inventory shortages continuing to put upward pressure on prices.”


Full Article >

Read Full Story
In the lead up to The Bank of Canada raising it's key interest rate on Wednesday, I read article after article of negative, and some even doomsday, reports about the negative affect of this.  Finally good old CBC put out one yesterday that was actually based on facts and commentary from the Bank of Canada Governor, Stephen Poloz. 

The Bank of Canada wants us to know it's a good news story, not a bad one.

The economy is doing better! This means more jobs, more buying power and the rate?  Well, it only went up by .25% making the Prime Lending Rate for mortgage providers still lower than 3%.

And the forecast is for any further rate increases to be slow and steady and to keep a measured approach while considering everything about the Canadian economy.

See the full article by Don Pittis of the CBC below.

Fear of rising rates may have obscured the Bank of Canada's good news story: Don Pittis


Canada's central bankers Carolyn Wilkins and Stephen Poloz may have looked dour on their way to yesterday's news conference, but they painted a happy face on the Canadian economy once they arrived. (Chris Wattie/Reuters)
 

Canada's gloomy old central bank governor Stephen Poloz has put on a happy face.

 

Much of the commentary both before and after yesterday's quarter-point rate hike — the first by the Bank of Canada in seven years — has been downbeat. 

 

Perhaps influenced by the many who benefit from low rates and the high levels of borrowing it encouraged, much of the media emphasis has been on the damage a rate hike would cause.

 

According to that outlook, that huge load of debt, the albatross hanging around the necks of over-borrowed Canadians, was only going to get heavier.

 

But that was not the message from Poloz and his deputy Carolyn Wilkins at yesterday's policy-focused news conference.

 

Good news for Canada


Even the gloomiest questions couldn't bring Poloz and Wilkins down.

 

"The most important thing here is that this is good news for Canada," Poloz told reporters in an uncharacteristic flight of good cheer. "The accumulation of evidence and the growth in our confidence that the economy is on a solid trajectory should be good news for everyone."

 

That includes people with mortgages.

 

While he and Wilkins were careful to hedge their bets with the warning that perfect predictions of the economic future are always uncertain, the tone was almost bubbly.

 

The adverse impact of rising interest rates on Canadian borrowers has been the headline of many stories. But the Bank of Canada says a growing economy means people will be able to afford rate increases. (David J. Phillip/Associated Press)

 

There is no question consumer interest rates are going up. Within an hour of the Bank of Canada news conference, Royal Bank of Canada had hiked its prime rate by a quarter of a percentage point, automatically pushing up the monthly costs of credit lines and variable-rate mortgages. Other banks quickly followed.

 

Asked about the impact of rising rates on mortgage holders, Wilkins insisted Canadians must see any increase in the context of an "economy where employment is continuing to rise and salaries continue to rise." 

 

Yes, borrowing costs are on the way up, but it is in the context of an expanding economy, she said.

 

Despite their enthusiasm, the normally dour central bankers insisted they had not let a little good news go to their heads.

 

"We're not just forecasters. We're policy-makers. So, for us, it's not just a question of getting the forecast right," said Poloz. "For us to be more cautious than your average forecaster, I think that makes sense." 

 

'Very, very prudent'


Wilkins called the bank's forecasts "very, very prudent."

 

"We've tried to take account of the uncertainty that's out there," she said. That uncertainty includes trade negotiations with the United States and how that country's own interest policy may unfold.

 

Our central bankers so far are not predicting a wild boom. But all the talk of headwinds we usually hear from the Bank of Canada was missing this time.

 

The worst they had to offer were lingering problems in the energy sector, where employment income would take a long time to recover after industry cost-cutting. But that cost-cutting meant the oil and gas business is now able to cope with oil prices in the $40 to $60 US range that the bank foresees.

 

Canada's oil and gas sector is contributing less to the economy, but the Bank of Canada says efficiencies mean industry is stabilizing at a lower price level. (Robson Fletcher/CBC)

 

Despite the loss of the Canadian economy's fossil fuel engine — or maybe because of that loss — the bank is seeing plenty of signs that the wider economy is climbing out of its hole.

 

Business investment, imports of machinery and equipment, and exports are all showing signs of life.

 

The bank's latest Business Outlook Survey shows business owners are increasingly optimistic, with sales up and expectations of sales growth even higher. Investment intentions are elevated. Hiring plans are up sharply. And that corresponds with recent employment figures.

 

A question that our central bankers were unable to resolve was why inflation remains so low. Even the bank's brand new measures of core inflation that are supposed to use statistical methods to look past short-term factors don't see inflation coming.

 

Inflation's rebound


Perhaps those core measures need to be further refined, because Poloz and Wilkins are convinced inflation really is about to rebound.

 

The output gap, "the difference between the actual output of the economy and its potential," is going to close around the end of this year, they said, and inflation would hit two per cent next year.

 

But that will only happen if the economy continues to strengthen.

 

Even at current levels, said Poloz and Wilkins, interest rates remain exceedingly low — perhaps low enough to draw consumers into risky borrowing, which, if it were to continue, could create financial vulnerabilities.

 

That means while the main story is economic growth, a small rise in rates will have a dual purpose, gently avoiding a sudden surge in inflation and preventing economic instability.

 

"Today we can say that there is a reasonable expectation that our inflation will be on target within a year," said Poloz. "And given that base, we can also look at financial vulnerabilities and say, yes, it is appropriate today that interest rates rise for both reasons."

 

Full Article >

 

Regards,

 

Tony Marchigiano 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC
 
Read Full Story
Most good/flexible variable rate mortgage will allow one to convert to a fixed term but the conversion rate is for whatever a mortgage lenders best fixed rates are at the time of conversion; and usually for whatever the remaining term is or longer.
 
Fixed rates have already gone up a bit as this usually happens in anticipation of the Bank of Canada raising rates as well as a few other reasons. Economists are predicting a 50 to 60% chance they will increase the Prime lending rate by .25% on July 12th. Some others think they will do it later this year. Any further increases would most likely be done a little at a time as well but no one knows for sure.
 
There's also been many times in the past 7 to 8 years where there's been lots of talk about the end of low rates which did not come true. It may come true this time but, again, no one ever knows for sure. 
 
Many economists say that the government is not interested in raising rates to fast or by too much as too many Canadians have a lot of debt and it would put a lot of people in trouble.
 
The Bank of Canada meets 8 times a year so technically, although it's very unlikely, they could raise the Prime lending rate each time they meet. They would usually only raise is .25% at a time unless the economy and inflation were running very quickly which neither of them are currently. So it would take at least 3 or 4 moves upward in their Prime lending rate before most variable rates would be over what a 5 year fixed rate is currently.
 
Historically people who've taken variable rates and stayed in them have paid less interest over the life of the mortgage. This might not be true moving forward but history does have a way of repeating itself.
 
It's a very personal decision and all has to do with your comfort level as well as your own financial situation.
 
Hope this info helps you make your decision one way or another. As always I'm always here to answer any questions anyone has around this or help in anyway I can.
 

Regards,

 

Tony Marchigiano 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC
 
Read Full Story

The imbalance between supply and demand in the condominium market is creating home buyer competition across Metro Vancouver.*


The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,893 in June 2017, an 11.5 per cent decrease from the 4,400 sales recorded in June 2016, an all-time record, and a decrease of 10.8 per cent compared to May 2017 when 4,364 homes sold.

 

Last month’s sales were 14.5 per cent above the 10-year June sales average.

 

“Two distinct markets have emerged this summer. The detached home market has seen demand lease back to more typical levels while competition for condominiums is creating multiple offer scenarios and putting upward pressure on prices for that property type,” Jill Oudil, REBGV president said.

 

There were 5,721 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2017. This represents a 2.6 per cent decrease compared to the 5,875 homes listed in June 2016 and a 5.3 per cent decrease compared to May 2017 when 6,044 homes were listed.

 

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,515, a nine per cent increase compared to June 2016 (7,812) and a 4.2 per cent increase compared to May 2017 (8,168).

 

“Home buyers have more selection to choose from in the detached market today while condominium listings are near an all-time low on the MLS®,” Oudil said. “Detached home listings have increased every month this year, while the number of condominiums for sale has decreased each month since February.”

 

For all property types, the sales-to-active listings ratio for June 2017 is 45.7 per cent. By property type, the ratio is 24.5 per cent for detached homes, 62 per cent for townhomes, and 93.2 per cent for condominiums.

 

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

 

“Market conditions will vary today depending on area and property type,” Oudil said. “It’s important to work with your local REALTOR® to help you understand the trends that are occurring in your community.”

 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $998,700. This represents a 7.9 per cent increase over June 2016 and a 1.8 per cent increase compared to May 2017.

 

Sales of detached properties in June 2017 reached 1,320, a decrease of 15.5 per cent from the 1,562 detached sales recorded in June 2016. The benchmark price for detached properties is $1,587,900. This represents a 1.4 per cent increase from June 2016 and a 1.1 per cent increase compared to May 2017.

 

Sales of apartment properties reached 1,905 in June 2017, a decrease of 9.6 per cent compared to the 2,108 sales in June 2016. The benchmark price of an apartment property is $600,700. This represents a 17.6 per cent increase from June 2016 and a 2.9 per cent increase compared to May 2017.

 

Attached property sales in June 2017 totalled 668, a decrease of 8.5 per cent compared to the 730 sales in June 2016. The benchmark price of an attached unit is $745,700. This represents a 10.7 per cent increase from June 2016 and a 0.6 per cent increase compared to May 2017.

 

The imbalance between supply and demand in the condominium market is creating home buyer competition across Metro Vancouver.* The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,893 in June 2017, an 11.5 per cent decrease from the 4,400 sales recorded in June 2016, an all-time record, and a decrease of 10.8 per cent compared to May 2017 when 4,364 homes sold.


Last month’s sales were 14.5 per cent above the 10-year June sales average.


“Two distinct markets have emerged this summer. The detached home market has seen demand lease back to more typical levels while competition for condominiums is creating multiple offer scenarios and putting upward pressure on prices for that property type,” Jill Oudil, REBGV president said.


There were 5,721 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2017. This represents a 2.6 per cent decrease compared to the 5,875 homes listed in June 2016 and a 5.3 per cent decrease compared to May 2017 when 6,044 homes were listed.


The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,515, a nine per cent increase compared to June 2016 (7,812) and a 4.2 per cent increase compared to May 2017 (8,168).


“Home buyers have more selection to choose from in the detached market today while condominium listings are near an all-time low on the MLS®,” Oudil said.


“Detached home listings have increased every month this year, while the number of condominiums for sale has decreased each month since February.”


For all property types, the sales-to-active listings ratio for June 2017 is 45.7 per cent.


By property type, the ratio is 24.5 per cent for detached homes, 62 per cent for townhomes, and 93.2 per cent for condominiums.


Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.


“Market conditions will vary today depending on area and property type,” Oudil said. “It’s important to work with your local REALTOR® to help you understand the trends that are occurring in your community.”


The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $998,700. This represents a 7.9 per cent increase over June 2016 and a 1.8 per cent increase compared to May 2017.


Sales of detached properties in June 2017 reached 1,320, a decrease of 15.5 per cent from the 1,562 detached sales recorded in June 2016.


The benchmark price for detached properties is $1,587,900. This represents a 1.4 per cent increase from June 2016 and a 1.1 per cent increase compared to May 2017.


Sales of apartment properties reached 1,905 in June 2017, a decrease of 9.6 per cent compared to the 2,108 sales in June 2016.


The benchmark price of an apartment property is $600,700. This represents a 17.6 per cent increase from June 2016 and a 2.9 per cent increase compared to May 2017.


Attached property sales in June 2017 totalled 668, a decrease of 8.5 per cent compared to the 730 sales in June 2016.


The benchmark price of an attached unit is $745,700. This represents a 10.7 per cent increase from June 2016 and a 0.6 per cent increase compared to May 2017.


Full Stats Package>

Read Full Story
A recent article by Canadian Mortgage Trends, The Case for Home Ownership, does not debate affordability and what government should do about it. What it does do is discuss all the economic and social benefits home ownership can provide. You may be surprised by the lengthly list; I know I was. In conclusion "society benefits when families have access to affordable, responsible home ownership and thus government policy should continue to support it."
 
See the full article below for the interesting details:
 

"Housing affordability questions have placed homeownership and public policy near the top of the national agenda, as mortgage brokers know. Most of the commentary has been focused on the extent to which government policy, particularly with regards to supply, is contributing to the affordability challenges. This debate is ongoing and will not be resolved here.

 

But there is less basic commentary about why we should care about homeownership. Why should government policy support homeownership? Simply put: it remains a powerful conveyor belt to the middle class.

 

Homeownership is associated with a raft of economic and social benefits including better educational and health outcomes, stronger families, safer communities, higher levels of civic participation and greater wealth accumulation. A few policy areas are more likely to generate upward mobility and economic opportunity than housing and homeownership.

 

Here are some highlights from a considerable body of research:

 

Kulkarni and Malmendier (2015) analyze the link between homeownership and upward mobility, and find a strong positive relationship for the children of homeowners that the two economists attribute to the stability and social capital that is associated with owning one’s home.

 

- A post-recession update to past research on the broad economic and social benefits of homeownership by Rohe and Lindblad (2013) concludes that “there is considerable evidence that positive homeownership experiences result in greater participation in social and political activities, improved psychological health, positive assessments of neighborhood, and high school and post-secondary school completion.”


- Ni and Decker (2009) study the relationship between homeownership and crime and find not only that “homeownership itself has a strong and statistically significant negative effect on both violent and property crime rates,” but that increases in homeownership rates reduce criminal activity over time.


- Haurin et al. (2002) study the link between homeownership and educational performance for children and find that it leads to a 13 percent to 23 percent improvement in a higher-quality home environment, greater cognitive ability and fewer child behaviour problems relative to renting.


- Harkness and Newman (2003) examine whether children from lower-income and higher-income families benefit equally from homeownership and find that for children growing up in families with incomes less than 150 percent of the federal poverty line, homeownership raises educational attainment, earnings and welfare independence in young adulthood.

 

These studies show the direct and spillover benefits that can come from a pro-homeownership society. Limited research has tested these findings in the Canadian context. Yet the work that has been done finds similar experiences and results.

 

2013 CMHC survey of nearly 1000 Canadians who purchased a home through Habitat for Humanity casts light on the significant benefits that come with homeownership. Respondents showed positive results across a range of economic and social indicators, including labour force attachment, the educational performance and behaviour of their children, improved personal finances, better health, and general happiness. Most respondents identified that these benefits derived “from the security, stability and sense of control that comes with homeownership” (2).

 

2012 study commissioned by Habitat for Humanity Toronto found similar results in its assessment of the “social impact” of homeownership. The findings are powerful: 95 percent of respondents said that their families were stronger, 81 percent reported an improvement in their child’s social life, 76 percent reported improvement in their children’s grades, 72 percent reported strong community and neighbourhood ties, and 50 percent reported that they felt safer.

 

As for wealth accumulation, housing has been a major driver of overall household net worth in Canada. A 2015 report by TD Economics finds that it represents about one-third of the roughly $6.6-trillion increase since 1990. The importance of housing wealth has even increased as an overall share of household net worth and accounted for 40 percent of the total increase in net worth since 2001 (TD Economics 2015).

 

While a number of factors contribute to upward mobility and middle-class opportunity including education, family and culture, homeownership plays a strong role in Canada and elsewhere. This is a critical point: the evidence shows that the benefits are not just limited to homeowners. Society benefits when families have access to affordable, responsible homeownership and thus government policy should continue to support it."

 

Regards,

 

Tony Marchigiano 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC
 
Read Full Story

Puzzling out how to keep your house as cool as possible during these hot summer months? Trying to remember the conventional wisdom but not quite sure how it goes? Those window fans, for example, should they be placed to draw air in or out? Upwind or downwind of the dwelling? And what about windows, shades, and awnings? Are windows on the North side of the house better left closed or open during the day? Are awnings better than shades?

 

Find out the answers to these questions and more, right here:

 

The recent heat spell on the East Coast dredged these questions up for me, and I am sure these questions are seasonal for many of us. Efficient cooling saves money, energy, and the quality of our lives.

 

Turning to Consumer Guide to Home Energy Savings by Alex Wilson, Jennifer Thorne, and John Morrill of the American Council for an Energy-Efficient Economy has provided a wealth of answers to just these questions and more. I’ve compiled 23 tricks about how to keep a house cool to reduce the need for air conditioning from this book, as well as a few from The Real Goods Solar Living Sourcebook. These tips are really useful.

 

1. Reduce the cooling load by employing cost-effective conservation measures. Provide effective shade for east and west windows. When possible, delay heat-generating activities such as dishwashing until evening on hot days.

 

2. Over most of the cooling season, keep the house closed tight during the day. Don’t let in unwanted heat and humidity. Ventilate at night either naturally or with fans.

 

3. You can help get rid of unwanted heat through ventilation if the temperature of the incoming air is 77 F or lower. (This strategy works most effectively at night and on cooler days.) Window fans for ventilation are a good option if used properly. They should be located on the downwind side of the house facing out. A window should be open in each room. Interior doors must remain open to allow air flow.

 

4. Use ceiling fans to increase comfort levels at higher thermostat settings. The standard human comfort range for light clothing in the summer is between 72 F and 78 F. To extend the comfort range to 82 F, you need a breeze of about 2.5 ft/sec or 1.7 mph. A sow-turning ceiling-mounted paddle fan can easily provide this air flow.

 

5. In hot climates, plant shade trees around the house. Don’t plant trees on the South if you want to benefit from passive solar heating in the winter.

 

6. If you have an older central air conditioner, consider replacing the outdoor compressor with a modern, high-efficiency unit. Make sure that it is properly matched to the indoor unit.

 

7. If buying a new air conditioner, be sure that it is properly sized. Get assistance from an energy auditor or air conditioning contractor.

 

8. Buy a high-efficiency air conditioner: for room air conditioners, the energy efficiency ratio (EER) rating should be above 10; for central air conditioners, look for a seasonal energy efficiency ratio (SEER) rating above 12.

 

9. In hot, humid climates, make sure that the air conditioner you buy will adequately get rid of high humidity. Models with variable or multi-speed blowers are generally best. Try to keep moisture sources out of the house.

 

10. Try not to use a dehumidifier at the same time your air conditioner is operating. The dehumidifier will increase the cooling load and force the air conditioner to work harder.

 

11. Seal all air conditioner ducts, and insulate ducts that run through unheated basements, crawl spaces, and attics.

 

12. Keep the thermostat set at 78 degrees F or higher if using ceiling fans. Don’t air-condition unused rooms.

 

13. Maintain your air conditioners properly to maximize efficiency.

 

Additional tips from the Real Goods Solar Living Sourcebook, edited by Doug Pratt and the Real Goods staff.

 

Warm Weather Window Solutions


14. Install white window shades or mini-blinds. Mini-blinds can reduce solar heat gain by 40-50 percent.

 

15. Close south and west-facing curtains during the day for any window that gets direct sunlight. Keep these windows closed, too.

 

16. Install awnings on south-facing windows, where there’s insufficient roof overhang to provide shade.

 

17. Hang tightly woven screens or bamboo shades outside the window during the summer to stop 60 to 80 percent of the sun’s heat from getting to the windows.

 

18. Apply low-e films.

 

19. Consider exotic infills in your windows, a new technology that fills the space between panes with krypton or argon, gasses that have lower conductivity than air, and which boost R-values.

 

Tips for your A/C


19. Provide shade for your room A/C, or the outside half of your central A/C if at all possible. This will increase the unit’s efficiency by 5 percent to 10 percent.

 

20. Clean your A/C’s air filter every month during cooling season. Normal dust build-up can reduce air flow by 1 percent per week.

 

22. Turn off your A/C when you leave for more than an hour.

 

23. Several studies have found that most central air conditioning systems are oversized by 50 percent or more.

 

Adapted from Consumer Guide to Home Energy Savings, by by Alex Wilson, Jennifer Thorne, and John Morrill. Copyright (c) 2000 by the American Council for an Energy-Efficient Economy . Reprinted by permission of Chelsea Green Publishing Company.


Adapted from Consumer Guide to Home Energy Savings, by Alex Wilson, Jennifer Thorne, and John Morrill.

 

Full Article>

Read Full Story

 

According to a recent statement from the Bank of Canada the next interest rate decision could be an increase. Their next meeting is July 12th. Economists were forecasting them to start raising rates early 2018 but are now thinking it may be sometime in the latter part of this year.
 
The Fed's in the U.S. raised their prime lending rate this week as well.
 
See the full article below from MortgageBrokerNews.ca for the details on why the Bank of Canada is thinking of raising rates:
 
"The next policy move from the Bank of Canada could be a rise in interest rates.

Senior deputy governor Carolyn Wilkins spoke at the Asper School of Business yesterday and said that there are some good signs in the economy, including adapting to lower oil prices, growth in a range of industries, and growth in the labour market.

“What’s encouraging is that this growth is not being driven by just a few key industries,” Senior Deputy Governor Wilkins said. The data show that more than 70 per cent of industries have been expanding and the labour market continues to improve.

However, inflation is below the bank’s target and Ms. Wilkins said to meet its objectives, the bank will need to assess current economic conditions and how they will evolve. 

She added that monetary policy must “anticipate the road ahead” noting that rather than having to “slam on the brakes” things need to be done slowly.

The comments are a hint that interest rates could be on the way sooner than the mid-2018 expectation of analysts, to allow for smaller, gradual increases."


Regards,

 

 

Tony Marchigiano

 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC
 
Read Full Story

Home buyer activity returned to near record levels across the Metro Vancouver* housing market in May.


Residential property sales in the region totalled 4,364 in May 2017, a decrease of 8.5 per cent from the 4,769 sales in May 2016, an all-time record, and an increase of 22.8 per cent compared to April 2017 when 3,553 homes sold.

 

Last month’s sales were 23.7 per cent above the 10-year May sales average and is the thirdhighest selling May on record.

 

"Demand for condominiums and townhomes is driving today’s activity," Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “First-time buyers and people looking to downsize from their single-family homes are both competing for these two types of housing.”

 

New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,044 in May 2017. This represents a 3.9 per cent decrease compared to the 6,289 units listed in May 2016 and a 23.2 per cent increase compared to April 2017 when 4,907 homes were listed.

 

The month-over-month increase in new listings was led by detached homes at 27.1 per cent, followed by apartments at 22.7 per cent and townhomes at 14.1 per cent.

 

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,168, a 5.7 per cent increase compared to May 2016 (7,726) and a 4.5 per cent increase compared to April 2017 (7,813).

 

"Home buyers are beginning to have more selection to choose from in the detached market, but the number of condominiums for sale continues to decline," Oudil said.

 

The sales-to-active listings ratio across all residential categories is 53.4 per cent. By property type, the ratio is 31 per cent for detached homes, 76.1 per cent for townhomes, and 94.6 per cent for condominiums.

 

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

 

“While sales are inching closer to the record-breaking pace of 2016, the market itself looks different. Sales last year were driven by demand for single-family homes. This year, it's clear that townhomes and condominiums are leading the way,” said Oudil. “It’s important to work with your local REALTOR® to understand the different factors affecting the market today.”

 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $967,500. This represents an 8.8 per cent increase over May 2016 and a 2.8 per cent increase compared to April 2017.

 

Sales of detached properties in May 2017 reached 1,548, a decrease of 17 per cent from the 1,865 detached sales recorded in May 2016. The benchmark price for a detached property is $1,561,000. This represents a 3.1 per cent increase over May 2016 and a 2.9 per cent increase compared to April 2017.

 

Sales of apartment properties reached 2,025 in May 2017, a decrease of 5.8 per cent compared to the 2,150 sales in May 2016.The benchmark price for an apartment property is $571,300. This represents a 17.8 per cent increase over May 2016 and a 3.1 per cent increase compared to April 2017.

 

Attached property sales in May 2017 totalled 791, an increase of 4.9 per cent compared to the 754 sales in May 2016. The benchmark price for an attached property is $715,400. This represents a 13.1 per cent increase over May 2016 and a 1.9 per cent increase compared to April 2017.

 

*Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.

 

Full Stats Package >

Read Full Story

 

When purchasing a property one must have the down payment to do so but you'll also need money for closing costs. A good estimation for closing costs is 1.5 to 2.5% of the purchase price. Most mortgage lenders will also require a borrower to prove they have at least 1.5% (in addition to their down payment) in order to get the required mortgage financing. But what are closing costs?
 
Mortgage lender, Home Trust, did a recent blog on these costs which gives a very detailed look at all possible closing costs to consider. 
 
Here's the full article below:
 

"When you purchase a new home, there are many additional costs beyond the purchase price for which you will be responsible before you are handed the keys. In this Home Trust Mortgages Blog article, we will look at some of these additional expenses and provide a rough idea of the cost you can expect for each item.

 

While total closing costs will vary by region, you can expect them to equal somewhere between 2 – 4% of the purchase price. In fact, most lenders will require proof that you have sufficient resources beyond your down payment in order to manage these expenses.

 

To help you understand not only the costs you will incur during the purchase process, but also when you are required to pay, we’ve broken this discussion into the following phases:

 

- Costs when making the offer

- Costs prior to closing

- Costs due at closing

 

Costs When Making the Offer


The main cost you face when presenting your offer is the deposit. The purpose of the deposit is to demonstrate the sincerity of your offer and to show that you have the means to purchase the property.

 

The rules regarding deposits vary by jurisdiction; in Ontario, for instance, you can include your deposit with the offer or within 24 hours after your offer is accepted by the seller. Also, there are no specific rules as to how much is required for a deposit but for in-demand markets where sellers typically receive multiple offers, a higher deposit may help swing the deal in your favour.

 

For this reason, it is not uncommon to see deposits of up to 5% of the selling price in these markets. In less active markets, smaller deposits are more common.

 

Keep in mind that the deposit is considered part of your down payment so providing a higher deposit does not mean you are paying more for the house. However, be very clear on the rules around deposits. If your offer is accepted but the deal then falls apart later, depending on the cause for the collapse, you could be forced to forfeit your deposit.

 

Costs Prior to Closing


In some situations, in order to secure a mortgage your lender will require you to arrange for an appraisal of the property as well as a home inspection. An appraisal provides a third-party, expert assessment of the true market value of the property you are considering and this will likely cost between $300 and $500.

 

A home inspection, even if not required by your lender, is still something to consider to provide peace of mind that the property has no major issues waiting to surface after you take possession. If possible, consider making your offer conditional to a satisfactory inspection result. However, be aware that if a competing offer is presented at the same time as yours that does not include this condition, the seller may exclude your offer to go with one that does not contain additional conditions.

 

The Canadian Association of Home & Property Inspectors website estimates the price of an inspection for a typical single family home to be around $500.

 

Costs Due at Closing


Land Transfer Tax

 

Land transfer taxes vary by location but all Canadian provinces have some form of tax that must be paid by the buyer to transfer the property’s title. Some municipalities including the City of Toronto impose an additional land transfer tax on all property transactions and these taxes are due on closing.

 

Adjustments

 

In some cases, utility bills, taxes, or other expenses associated with the home may have been prepaid by the previous owner. In this situation, you will be required to reimburse the seller for any portion that may extend into the time when you officially take possession of the home. These expenses will be listed in the Statement of Adjustments.

 

Property Insurance and Title Insurance

 

Your lender will insist that you have sufficient property insurance to cover the cost of replacing your home in the event of a fire or other incident. The cost for property insurance varies by location and property value.

 

In addition, many lenders now also require you to have title insurance. As noted on the Financial Services Commission of Ontario (FSCO) website, title insurance protects you from potential problems that could prevent you from having clear ownership of the property including the existence of previous liens against the property as well as the possibility of land survey or public record errors.

 

Title insurance typically costs the average homeowner between $200 – $300.

 

Legal Fees

 

New home buyers are advised to hire a lawyer that specializes in real estate to ensure that all official documents are completed and filed as required. Budget at least $500 for even the most straight-forward of transactions.

Provincial Sales Tax on Mortgage Insurance.

 

If you have less than 20% of the selling price available as a down payment, your lender will require you to obtain mortgage default insurance through an agency such as the Canada Mortgage and Housing Corporation (CMHC). Your lender will include the cost of this insurance in your mortgage, but at the time of closing, you will be required to pay any provincial sales tax owing on the purchase of the insurance.

 

While we can’t anticipate every extra cost you could possibly face in the purchase of your new home, this discussion should give you a good idea of the most common expenses. Ultimately, what you need to take away from this is that there are many additional expenses beyond just the purchase price which you will face when buying a new property.

 

Pino Decina

EVP Residential Mortgage Lending
Home Trust Company

 

 

Regards,

 

 

Tony Marchigiano

 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC
 
Read Full Story

Condominiums and townhomes in high demand across Metro Vancouver 

 

Demand for condominiums and townhomes continues to drive the Metro Vancouver* housing market.

 

Residential property sales in the region totalled 3,553 in April 2017, a 25.7 per cent decline compared to April 2016 when 4,781 homes sold and a 0.7 per cent decrease from the 3,579 sales recorded in March 2017.

 

April sales were 4.8 per cent above the 10-year average for the month.

 

For the first four months of the year, condominium and townhome sales have comprised a larger percentage of all residential sales on the Multiple Listing Service® (MLS®) in Metro Vancouver. Over this time, they’ve accounted for 68.5 per cent, on average, of all residential sales. This is up 10 per cent from the 58.2 per cent average over the same period last year.

 

“Our overall market is operating below the record-setting pace from a year ago and is in line with historical spring levels. It’s a different story in our condominium and townhome markets," Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “Demand has been increasing for months and supply is not keeping pace.

 

This dynamic is causing prices to increase and making multiple offer scenarios the norm.”

 

New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,907 in April 2017. This represents a decrease of 19.9 per cent compared to the 6,127 units listed in April 2016 and a three per cent increase compared to March 2017 when 4,762 properties were listed.

 

The total number of residential properties currently listed for sale on the MLS® system in Metro Vancouver is 7,813, a 3.5 per cent increase compared to April 2016 (7,550) and a three per cent increase compared to March 2017 (7,586).

 

The sales-to-active listings ratio for April 2017 is 45.5 per cent for all property types. This is two per cent below March 2017 and is indicative of a sellers’ market. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

 

By property type, the sales-to-active listings ratio is 26 per cent for detached homes, 58.2 per cent for townhomes, and 82.2 per cent for condominiums.

 

“Until more entry level, or ‘missing middle’, homes are available for sale in our market, we’ll likely continue to see prices increase,” Oudil said. “There’s been record building this past year, but much of that inventory isn’t ready to hit the market.”

 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $941,100. This represents a five per cent increase over the past three months and an 11.4 per cent increase compared to April 2016.

 

Over the last three months, the benchmark price of condominiums has seen the largest increase in the region at 8.2 per cent, followed by townhomes at 5.3 per cent, and detached homes at 2.8 per cent.

 

“Home buyers are looking to get into the market and they’re facing fierce competition,” Oudil said. “It’s important to work with your local Realtor to help you navigate today’s marketplace.”

 

Sales of detached properties in April 2017 reached 1,211, a decrease of 38.8 per cent from the 1,979 detached sales recorded in April 2016. The benchmark price for detached properties is $1,516,500. This represents an 8.1 per cent increase over the last 12 months and a 1.8 per cent increase compared to March 2017.

 

Sales of apartment, or condominium, properties reached 1,722 in April 2017, a decrease of 18.3 per cent compared to the 2,107 sales in April 2016.The benchmark price of an apartment property is $554,100. This represents a 16.6 per cent increase over the past 12 months and a 3.1 per cent increase compared to March 2017.

 

Attached, or townhome, property sales in April 2017 totalled 620, a decrease of 10.8 per cent compared to the 695 sales in April 2016. The benchmark price of an attached unit is $701,800. This represents a 15.3 per cent increase over the past 12 months and a 2.4 per cent increase compared to March 2017.

 

*Editor's Note

 

Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.

 

The real estate industry is a key economic driver in British Columbia. In 2016, 39,943 homes changed ownership in the Board’s area, generating $2.5 billion in economic spin-off activity and an estimated 17,600 jobs. The total dollar value of residential sales transacted through the MLS® system in Greater Vancouver totalled $40 billion in 2016.

 

Full Stats Package >

 

Read Full Story

Affordability in Vancouver has improved slightly following the implementation of the foreign-buyer tax in August, but it remains a “major vulnerability” in the city, according to an RBC report released April 24.


This doesn’t mean a crash is likely, however, because the city’s employment situation is solid, according to the report.


The jobless rate in the city has fallen to 4.7% – the lowest it has been since 2008, and this trend is expected to

continue, providing “substantial support” to the housing market, according to RBC.

 

One factor that could lead to vulnerabilities in the medium term is a declining adult population growth rate. Between March 2016 and March 2017, the growth rate was 1.4%; this is down from 1.9% over the previous year. According to RBC, this means the growth rate has dipped below a 1.5% threshold that signals the existence of elevated housing risks.


The market’s demand-supply balance has eased over the past year, moving away from a strong seller’s market. This happened quickly, with policy changes over the past several months lowering price expectations between September 2016 and January of this year, particularly for single-detached homes. Prices increased slightly in February and March, however, which RBC said is due to many foreign buyers returning to the market after initially stepping aside after the 15% tax was implemented.


Full Article>

Read Full Story

All levels of government are concerned with the overall health and affordability of the Canadian housing market. The first order of business is to gather input from various industry participants to determine the impact the recent mortgage rule changes have had on the ability of first time homebuyers to purchase their first home.

 

Recently the House of Commons, through its Standing Committee on Finance, released a report on Canada’s housing market(s). Members of Parliament from all political parties have heard and understood the concerns of the mortgage industry. The recommendations are as follows.

 

1) The Government of Canada will work with its provincial counterparts to ensure that – when needed - they implement responsible measures that will result in stable, affordable regional housing markets.‚Äč

 

2) The Government of Canada will examine increased support for first-time homebuyers.

 

3) The Government of Canada will use Statistics Canada to address the gaps in housing-related data by creating a nationwide database.  The database could provide data on such items as home purchase and sales, non-primary mortgage lending, foreign ownership, real estate investors etc.

 

4) The Government will ensure that further changes to Canada’s mortgage regulations do not occur until sufficient time has passed to assess the effects of the October 2016 changes.

 

5)  The Government endeavor to ensure that mortgage regulations treat all mortgage lenders fairly.

 

The last two points are of particular interest to anyone who believes that as mortgage consumers we should have all the choices available in the mortgage marketplace and that fair competition from all mortgage providers benefits those looking to secure the best possible rates and terms. 

 

Mortgage Professionals Canada is a national association that has worked at the political level to ensure fair competition and regulations that benefit all mortgage consumers.

 

If you or anyone you know would like to know more about the recent announcements and how they impact us all, please simply email or call me.

 

Regards,

 

 

Tony Marchigiano

 

Mortgage Broker

 

310-328 West Hastings Street
Vancouver, BC
 


Read Full Story

A recent article featured in the Globe and Mail discussed the importance of having a “stellar” credit rating when wanting approval for mortgage financing.

 
While your credit history is very important in the approval process it’s not everything and there are definitely lenders with specific mortgage programs to help people who might not have “stellar” credit ratings.
 
Here’s the link to the article below which details, among other things, the breakdown of the importance of such things as making payments on time and balances owing on existing credit.
 

The following article is from Canadian Real Estate Wealth Magazine.

 

When you begin shopping around for a mortgage the importance of your credit history and score becomes evident.

 

Your credit score is an important item that will determine what interest your mortgage agent will be able to offer you. It should be a priority because it can save you thousands of dollars. If you take care of your credit, your credit will take care of you! Whether you have had credit for a long time or are completely new and just beginning, the reality is that you will have to at some time or another prove that you are a low enough risk for lenders to lend to.

 

If you are just beginning to build credit a good way is by using a credit card.

 

What is a credit report?


A credit report is a quick look into your credit history. If you have taken a loan or used a credit card you will have a credit history. Financial institutions, trust companies, credit companies and grantors that give you credit may send information about whether or not you make your payments on time to a credit-reporting agency/bureau.

 

Credit bureaus collect information about you and how long it takes you to pay back money you have borrowed. This is is called your credit history.

 

Credit lenders rely on a credit bureau to analyze an applicant’s current and past credit history in order to determine the likelihood of future repayment. This provides a fairly accurate indication of future repayment trends.

 

The two most popular credit bureau agencies operating in Canada are Equifax and Transunion. You can request your credit report by mail for free but your score is not included. If you request your credit report online a fee is charged and your credit score is included.

 

You are the only person who can see your credit report. No one else can access the information in your report unless you allow it. Generally you would allow credit checks to organizations you are applying to for credit. Usually you sign documentation allowing them to do so.

 

What’s in your credit report?


Personal information such as:
- your name
- current and previous addresses
- S.I.N., phone number
- date of birth
- previous employer/s

 

Financial information such as:
- credit cards
- lines of credit
- loans and mortgages
- bankruptcies, court judgements and backed secured loans which are considered public records and debt that was referred to a collection agency for payment.

 

A list of credit report inquiries: You, your lender, or any other authorized agent is also included which is usually used to determine if you are a credit seeker: someone who applies for a lot of credit.


How are you rated?


The credit agency describes your credit history by rating it. A scale of 1 to 9 is used with 1 meaning that you pay your bills within 30 days and 9 meaning you have bad debt, never pay your bills, have been placed for collection or claimed bankruptcy.

 

In front of the number there is a letter. The letter stands for the type of credit you are using. R means you have revolving credit such as a credit card, O means you have open credit such as a line of credit and I means you credit has been given on an instalment basis.

 

Your credit score is a numerical representation of the your current and past credit. It can range between 300 representing the lowest and 900 representing the best rating.

 

The breakdown that is used to determine your credit score is the following:

35 per cent – Payment history
30 per cent – Amounts owed
15 per cent – Length of credit history
10 per cent – New credit
10 per cent – Types of credit

 

If you contact Equifax or Transunion and find that the information on your credit report is incorrect, you may request that a correction be made. You will have to contact the institution that reported the activity and submit documentation proving financial resolution has been made to the credit bureau and they will remove it. Good luck! Equifax Canada Credit Bureau, Tel: 1-800-465-7166, Fax: 514-355-8502. TransUnion Canada Credit Bureau, Tel: 1-866-525-0262 (except in Quebec), Tel: 1-877-713-3393 (Quebec residents)

 

TOP TIPS ON KEEPING A GOOD CREDIT SCORE


1.) Make your payments in the correct amount on or before the due date! This will have a positive effect on your credit score. Missing or late payments and judgements, bankruptcies, collections or other public records will have an unfavourable impact on a credit score.

 

2.) Keep your balance considerably lower than the available credit limit provided. If you have several accounts with high balances relative to your available credit, this may indicate that you are relying greatly on credit to meet your daily needs.

 

3.) Multiple credit inquiries can lower your credit score, so reduce the number of credit applications you make.

 

4.) Always maintain a credit history. You can use a credit card to build a good history.

 

5.) The best mix of credit is a combination of a store credit card and a major credit card such as a VISA or MasterCard. It is important not to have too many credit cards or store cards as that may negatively impact a credit score.

 

Full Article>

 

Tony Marchigiano

Mortgage Broker
310-328 West Hastings Street
Vancouver, BC
 
Read Full Story

TORONTO — Royal LePage says early evidence suggests that the recent correction in Vancouver’s housing market may be short-lived.

 

The realtor released a report Tuesday saying Canada’s two largest real estate markets continued their divergence in the first quarter of the year.

 

The aggregate price of a home in the Greater Toronto Area rose by an “unprecedented” 20 per cent across all housing types to $759,241 in the first three months of 2017.

 

In the Greater Vancouver area, the price of a home rose 12.3 per cent year-over-year to $1,179,482.

 

Royal LePage CEO Phil Soper says the housing correction in Vancouver began seven months ago, around the time that the B.C. government introduced a 15 per cent tax on foreign nationals buying real estate in the city.

 

Sales volumes then plunged and prices slowed their torrid upwards trajectory.

 

But just in the past month, sales in the Vancouver area have leapt forward by close to 50 per cent on a month-over-month basis, says Soper — better than the seasonal average.

 

“An unfortunate side effect of heavy-handed regulatory intervention is that we risk market whiplash,” Soper said in a statement.

 

“In the coming weeks, it is possible that six months of pent-up demand will be unleashed on the market, sending prices sharply upward again; this when the pre-intervention 2016 trend was a natural market slowdown based on eroding affordability.”

 

Across Canada, the aggregate price of a home grew 12.6 per cent year-over-year to $574,575 during the first quarter, Royal LePage said.

 

The price of a two-storey home climbed 13.9 per cent year-over-year to $681,728, while the price of a bungalow rose 10.9 per cent to $490,018. Condo prices increased by 8.9 per cent to $373,768.

 

In Calgary, home prices were up 0.6 per cent to $461,635, while in Edmonton they rose 0.3 per cent to $381,733.

 

Full Story >

Read Full Story

VANCOUVER — Home sales in Metro Vancouver are bouncing back after a dismal February, but the Real Estate Board of Greater Vancouver says transactions are still almost 31 per cent below the March 2016 record.

 

The board says a shortage of property listings and strong demand, especially for condos and townhomes, propelled the market in March.

 

Board president Jill Oudil says sellers still seem reluctant to put their homes on the market, creating stiff competition for homebuyers.

 

The numbers of new listings haven’t been this low since March 2009.

 

Oudil says the competition also means home prices are likely to continue to increase until we see more housing supply coming on the market.

 

The composite benchmark price in March for all residential properties in Metro Vancouver is over $919,000, a 1.4 per cent increase compared with February.

 

Full Article >

Read Full Story
The Bank of Canada met today and made it's announcement regarding the Prime lending rate. As expected they left it unchanged once again and see no changes for the rest of 2017 and possibly into 2018 as well. This despite the numerous positive reports about the economy lately. 
 
Even though there has been some positives come to light there are still headwinds into the next year or two. 
 
See the article from MortgageBrokerNews.ca and the Canadian Press below for all the details:
 
"The Bank of Canada held its trendsetting interest rate unchanged on Wednesday, despite a recent run of stronger-than-expected data, saying it believes the economy has yet to show it can stick to the higher growth trajectory.

In holding the rate at 0.5 per cent, the central bank said it also considered significant uncertainties still weighing on its outlook, including the potentially adverse impacts of the U.S. economic agenda.

Canadian growth exceeded the bank's expectations and it now predicts real gross domestic product will expand at an annual rate of 2.6 per cent in 2017 _ up from its January forecast of 2.1 per cent.

The recent improvement, it said, was largely fuelled by unexpectedly robust residential investment as well as temporary factors such as the resumption of expenditures in the energy sector and the consumer-spending lift from bigger child-benefit cheques.

However, the bank noted export growth was uneven and that there were signs of weakness in areas like business investment and within underlying employment indicators such as hours worked and wages.

``While the recent rebound in GDP is encouraging, it is too early to conclude that the economy is on a sustainable growth path,'' the bank said in a news release that explained its interest rate decision.

TD Bank senior economist Brian DePratto said the bank is attempting to ``throw cold water'' on discussion that the economy has been improving.

``The growth outlook may be sunnier, but it seems to be all about the negatives for Governor Poloz,'' DePratto said in a research note.

``Poloz remains focused on the soft spots in Canadian labour markets and exports, and is not yet ready to declare Canada 'out of the woods' when it comes to unevenness in economic growth.''

Beyond 2017, the bank predicted growth will moderate and become more balanced.

It anticipates greater contributions from exports and business investment. The bank also expects the powerful pace of household spending _ particularly in residential investment _ to eventually slow next year as debt levels and borrowing costs rise.

For this year, however, the bank believes hot housing markets in cities like Toronto will help residential investment deliver a ``significantly higher'' contribution to Canada's growth performance than it had anticipated in January.

The bank also warned that climbing real estate prices in the Toronto area appear to now be driven, in part, by speculation.

Economic growth, it said, is now expected to expand by 1.9 per cent in 2018, down from the bank's January forecast of 2.1 per cent, and to hit 1.8 per cent in 2019.

The future, however, looks murky.

The statement said the bank's governing council was ``mindful of the significant uncertainties'' faced by the Canadian economy.

In its quarterly monetary policy report, which was also released Wednesday, the bank said its outlook once again factored in some of the effects caused by ongoing unknowns around the potential introduction of U.S. changes, especially in relation to trade and fiscal policies.

With the timing of any U.S. policy changes still unclear, the bank said its base-case projection includes only the estimated impact of ``prolonged and elevated trade policy uncertainty'' on trade and investment in Canada and internationally.

Changes under discussion in the U.S. include the renegotiation of the North American Free Trade Agreement, corporate and personal tax cuts, regulatory easing and a potential border tariff.

The bank said Canadian firms ``remain wary'' over potential U.S.-related developments that could increase protectionism and reduce competitiveness in the event of corporate tax reductions and regulatory changes.

Due to an expected additional drag on global investment connected to U.S. trade policy uncertainty, the report included slightly lower projections for export growth in 2017 and 2018 compared to the bank's earlier predictions.

The bank also pointed to the U.S. trade-policy unknowns, and the fact it now expects them to drag on longer than expected, in its decision to revise down its prediction for business investment in 2017.

``A notable increase in global protectionism remains the most-important source of uncertainty facing the Canadian economy,'' the bank said."


The Canadian Press

Regards,

 


Tony

 

Tony Marchigiano

Mortgage Broker
310-328 West Hastings Street
Vancouver, BC
 
Read Full Story

Newsletter

*indicates required fields.
Name:*
Email:*

Meet the team

  • Will Pratt
  • Justin Sabbagh
  • Mike Wilcox

Mortgage Calculator

Purchase Amount:
Down Payment:
Interest Rate:
%
Payment Interval:
Mortgage Term (Years)
Payment:
Total Payments:
Total Amount Paid:
Total Interest Paid:

Neighbourhoods