COST OF FINANCING A HOME THROUGH CMHC TO INCREASE MAY 1ST, 2014

Latest news regarding CMHC Premium changes:



February 28, 2014 11:00 ET

CMHC to Increase Mortgage Insurance Premiums

OTTAWA, ONTARIO--(Marketwired - Feb. 28, 2014) - Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1-4 unit rental properties effective May 1, 2014.

The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC.

CMHC's capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Increased capital targets are consistent with Canadian and international industry trends and makes the financial system more stable and resilient.

"The higher premiums reflect CMHC's higher capital targets" said Steven Mennill, CMHC's Vice-President, Insurance Operations. "CMHC's capital holdings reduce Canadian taxpayers' exposure to the housing market and contribute to the long term stability of the financial system."

For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market.

Effective May 1^st, CMHC Purchase (owner occupied 1-4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.

For more info:

http://www.cmhc.ca/en/hoficlincl/moloin/moloin_013.cfm

Should you give your child or grandchild help to buy their first home?

Many young people struggle to purchase their first home and often parents and grandparents are very sympathetic. They’ve enjoyed the financial benefits of long-term home ownership themselves, and see how hard it is today to make that important first step into the real estate market. So should you give them a boost?
First, consider your own financial situation. Your first responsibility is to your own financial security, so you need to consider what kind of help you can afford.
Take some time to think about family dynamics. Are there siblings or other family members to consider? Will there be an issue of fairness that you need to manage?
Home ownership is a big financial responsibility. Consider whether they’re ready for this responsibility. Sometimes the best advice is to keep renting.
If your child is married or living with a partner, consider property law. Experts advise parents to structure a loan instead of gifting money. If there is a break up, the loan would be subtracted from the family property before being divided.
Always put it in writing. If it’s a loan, have a written record of your shared expectations. If it’s a gift, you must put it in writing for the lender that the child is not required to pay the money back.

SELLING REAL ESTATE PRIVATELY Part 1

You are thinking that the amount of money that can be saved by selling privately is substantial and that surely you can save yourself the cost by selling privately.   The truth is that just like anything done by a true professional...we realtor's can make our job appear to be quite simple.... Just place a sign on the lawn and an advertisement in a newspaper and/or on the Internet and voila the buyer will appear and you will sell your home.  In fact it takes skill and knowledge of the real estate market to price, advertise and promote a property correctly.  Handling buyer's objections and skillfully helping them overcome their fears and assisting them with their financing concerns are just part of the equation.  What happens when the buyer does a building inspection and finds mold in the attic?  How about vermiculite insulation, or aluminium wiring?  Whatever issue arises and they usually do find something.....the buyer's believe that the cost of repairs is usually double the actual cost simply based on fear and ignorance.   Realtor's deal with these kind of problems all the time and stick handle the situation so that both the buyer and the seller come to a satisfactory agreement.

HOW TO INTERPRET REAL ESTATE NEWS ARTICLES

We see the big headlines that say that the market is saturated, that we are in a bubble, that the market is set to decline in bold type but make sure you read the fine print not just the headline!  When you dig down into the article, you find out that the author is speaking of the real estate markets in Vancouver, Toronto...but not Otttawa.  Ottawa's market is strong and stable and supported by the fact that we have one of the highest per capita income levels and the lowest average price of houses for a major city in Canada!

CMHC ANNOUNCES TODAY THAT CANADA`S HOUSING MARKET TO REMAIN STABLE IN 2012 AND 2013!

Although prices are not predicted to increase significantly, volume of sales will remain strong and with the predicted low interest rates throughout 2012...the buyer`s will want to take advantage. 

Based on my two decades of sales experience, I anticipate that there will be the usual flurry of activity in late spring that may drive the prices up slightly at that time.  If you have plans to purchase, now is a good time and if you are planning to sell... late March, or early.April and May will likely be your best times.