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Archive for February, 2014

CMHC Raising rates.

Friday, February 28th, 2014

Effective May 1 2014 CMHC will be raising the premium rates for mortgage insurance.

Mortgage insurance is mandatory for any mortgage in Canada where a buyer does not have a downpayment of 20% or more.

Taken from the CMHC website.

Increase in CMHC Mortgage Loan

Insurance Premiums — Key Facts

Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.

Effective May 1, 2014, CMHC is increasing its homeowner mortgage loan insurance premiums to reflect its increased capital targets. 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.

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 the housing market.

Effective May 1st, 2014, CMHC Purchase (owner-occupied 1 – 4 unit properties) mortgage insurance premiums will be:

Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective May 1st, 2014)
Up to and including 65% 0.50% 0.60%
Up to and including 75% 0.65% 0.75%
Up to and including 80% 1.00% 1.25%
Up to and including 85% 1.75% 1.80%
Up to and including 90% 2.00% 2.40%
Up to and including 95% 2.75% 3.15%
90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%

*CMHC mortgage loan insurance premium is calculated as a percentage of the loan based on the loan-to-value ratio. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and amortized over the life of the mortgage as part of regular mortgage payments.

**For loans with a loan-to-value ratio of 80% or less, the premium surcharge for every five years beyond the 25 year standard amortization period will increase from 0.20% to 0.25%.

CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after May 1, 2014. In order to be eligible for the current mortgage loan insurance premiums, lenders must submit a request for mortgage loan insurance to CMHC prior to May 1, 2014, regardless of the closing date of the home purchase. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.

Examples:

In 2013, the average CMHC insured loan at 95% loan-to-value was $248,000.

95% Loan-to-Value
Loan Amount $150,000 $250,000 $350,000 $450,000
Current Premium $4,125 $6,875 $9,625 $12,375
New Premium $4,725 $7,875 $11,025 $14,175
Additional Premium $600 $1,000 $1,400 $1,800
Increase to Monthly Mortgage Payment $3.00 $4.98 $6.99 $8.98

Based on a 5 year term @ 3.49% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

85% Loan-to-Value
Loan Amount $150,000 $250,000 $350,000 $450,000
Current Premium $2,625 $4,375 $6,125 $7,875
New Premium $2,700 $4,500 $6,300 $8,100
Additional Premium $75 $125 $175 $225
Increase to Monthly Mortgage Payment $0.37 $0.62 $0.87 $1.12

Based on a 5 year term @ 3.49% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

Frequently Asked Questions:

I recently signed a purchase and sale agreement on a home, the closing date is before May 1, 2014, and my mortgage will be CMHC-insured. Will the increase in premiums and surcharges affect me?

CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted to CMHC on or after May 1, 2014, regardless of the closing date of the home purchase.

In order to be eligible for the current (lower) mortgage loan insurance premiums and surcharges, your lender will need to submit a request for mortgage loan insurance to CMHC prior to May 1, 2014. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.

I am planning to buy a home in the coming months and will require a CMHC-insured mortgage. Will the increase in mortgage loan insurance premiums and surcharges affect me?

If the request for mortgage loan insurance is submitted to CMHC on or after May 1, 2014, the new (higher) mortgage loan insurance premiums and surcharges will apply.

In order to be eligible for the current (lower) mortgage loan insurance premiums and surcharges, your lender will need to submit a complete request for mortgage loan insurance to CMHC prior to May 1, 2014. In addition to the application identifying you as the borrower, the application must also include the address of the property you will be purchasing.

I am planning to buy a home in the coming months and will require a CMHC-insured mortgage. If I do not know which property I will be purchasing before May 1, 2014, am I eligible for the current (lower) mortgage loan insurance premiums and surcharges?

Your lender will need to submit a complete mortgage loan insurance application to CMHC prior to May 1, 2014. Once your lender has obtained the necessary borrower and property information from you, they will be able to proceed with a CMHC mortgage loan insurance request.

If the request for mortgage loan insurance is submitted to CMHC on or after May 1, 2014, the new (higher) mortgage loan insurance premiums and surcharges will apply.

I am purchasing a home that is being built and will require a CMHC-insured mortgage. I will require progress advance draws which will occur on or after May 1, 2014. Will the increase in premiums and surcharges affect me?

As long as the complete request for mortgage loan insurance is received by CMHC prior to May 1, 2014, the application will be subject to the current (lower) mortgage loan insurance premiums even if progress draws are requested on or after May 1, 2014.

Refinance Loans

I am planning to refinance my home on or after May 1, 2014. Will the increase in premiums and surcharges affect me?

In order to be eligible for the current (lower) mortgage loan insurance premiums and surcharges, your lender will need to submit a request for mortgage loan insurance to CMHC prior to May 1, 2014. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.

If the request for mortgage loan insurance is submitted to CMHC on or after May 1, 2014, the new (higher) mortgage loan insurance premiums and surcharges will apply.

Residential Rental Loans

I am purchasing a residential rental property (1 – 4 units). Are premiums increasing for rental properties too?

CMHC is increasing mortgage loan insurance premiums and surcharges on all 1 – 4 unit (transactionally) insured loans. The revised (higher) mortgage loan insurance premium schedule takes effect May 1, 2014. In order to be eligible for the current (lower) mortgage loan insurance premiums and surcharges, your lender will need to submit a complete request for mortgage loan insurance to CMHC prior to May 1, 2014.

If the request for mortgage loan insurance is submitted to CMHC on or after May 1, 2014, the new (higher) mortgage loan insurance premiums and surcharges will apply.

CMHC Self-Employed

Effective May 1st, 2014, CMHC Self-Employed mortgage insurance premiums will be:

Self-Employed Borrowers without Third Party Validation of Income
Loan-to-Value Ratio Total Loan Amount Increase to Loan Amount
Up to and including 65% 0.90% 1.75%
Up to and including 75% 1.15% 3.00%
Up to and including 80% 1.90% 4.45%
Up to and including 85% 3.35%* 6.35% *
Up to and including 90% 5.45%* 8.05% *

Note: Premiums shown with “*” do not apply for Refinance transactions.

Existing premiums will remain in effect until May 1st, 2014. See here for existing premiums.

CMHC Income Property

Effective May 1stCMHC Income Property mortgage insurance premiums will be:

Rental Loans (1 – 4 Units)
Loan-to-Value Ratio Total Loan Amount Increase to Loan Amount
Up to and including 65% 1.45% 3.15%
Up to and including 75% 2.00% 3.45%
Up to and including 80% 2.90% 4.30%

Note: Premiums shown with “*” do not apply for Refinance transactions.

Existing premiums will remain in effect until May 1st, 2014. See here for existing premiums.

Revised Premium Surcharges

Extended Amortization Surcharge
For loans with a loan-to-value ratio of 80% or less, a 0.25% surcharge applies for every five years beyond the 25 year standard amortization period.

Blended Amortization Surcharge
For refinance loans and portability, a 0.60% surcharge applies where the amortization period of a CMHC-insured loan is blended, using a weighted average, with the amortization period of the Increase to Loan Amount. The blended amortization surcharge is applied to the Increase to Loan Amount.

Conversion surcharge for self-employed borrowers without traditional documentation to support income verification
For conversion from Self-Employed with traditional 3rd party income validation to Self Employed without traditional 3rd party income validation, the premium is the lesser of: a) the Premium on Total Loan Amount or; b) the outstanding balance multiplied by a 1.75% premium plus the Premium on Increase to Loan Amount.

 

Making your Real Estate needs my Priority

Dave Dry
Realtor, Century 21 Vantage Realty Ltd
Website: www.davedry.com
Blog: blog.davedry.com
Office: 780 483 2122
Direct: 780 446 3727
Fax 1 866 217 4642

What $500K buys across Canada

Tuesday, February 18th, 2014

Taken from the National postFebruary 17.

In late December, the Canadian Real Estate Association predicted that the national average price for a home will be $391,000 in 2014. But it’s hard to compare how far your buck will go in Canadian cities using that figure, since the average prices are so very different: $785,574 in Vancouver and $320,693 in Montreal, for instance. So we took a round figure in the middle and surveyed what approximately $500,000 could have bought homebuyers in various markets across the country in January.

 

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SASKATOON
The place  Two-storey, four bedrooms, four bathrooms
List price  $504,900
Square footage  3,975
Where  Premium Stonebridge location in the south end of the city. New development full of young families, close to shopping, parks and leisure facilities. Quick access to freeway means downtown is only a short drive away.
Top features  Former show home with hardwood floors, kitchen island and walk-in pantry, central air, central vac, four bathrooms, main-floor laundry and a fully finished basement. Open concept.
Taxes  $3,975
Monthly Fees  N/A
Contact  Listed by Manning Luo, Re/Max Saskatoon

Toronto

TORONTO
The place  A two-bedroom, two-storey loft townhouse with one bathroom and one parking space
List price  $489,900
Square footage  806
Where  Excellent downtown-west location in the trendy Niagara neighbourhood, with transit, cafés and restaurants nearby. Walking distance to the 37-acre, uber-popular family- and pet-friendly Trinity Bellwoods Park.
Top features  Exposed concrete feature walls, floor-to-ceiling windows, custom kitchen, gas hookup for barbecue on its garden patio.
Taxes  $2,802.21 in 2013
Monthly fee $503
Contact Brad Lamb, Brad J. Lamb Realty Inc.

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OTTAWA
The place  Two-storey single-family home with four bedrooms and four bathrooms
List price  $499,900
Square footage  3,200
Where  In the east-end suburb of Orleans, separated by a 20- to 25-minute highway drive from downtown. This home is a short walk to shopping, cafés, parks, schools and public transit.
Top features  Classic crown moulding and hardwood floors run throughout the main level of this Naismith model by Minto. Open-concept kitchen/family room, curved hardwood staircase, two ensuite bathrooms and three walk-in closets. The backyard is fully fenced with no rear neighbours.
Taxes  $4,879
Monthly Fees  N/A
Contact  Jason Pilon, Keller Williams Ottawa Realty

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REGINA
The place  Two-storey, three bedrooms and three bathrooms
List price  $519,900
Square footage  2,090
Where  Situated in a well-established, well-treed neighbourhood in southeast Regina, close to schools, parks and shopping. Only a few minutes drive from downtown. Backing on to green space.
Top features  Many updates and upgrades, including a modern, eat-in kitchen with granite countertops, and heated slate flooring through the kitchen, dining area and hallway. A garden door leads to the deck overlooking the landscaped yard with patio, pond and flower beds.
Taxes  $3,263
Monthly Fees  N/A
Contact  Leanne Tourney, Re/Max Joyce Tourney Realty

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EDMONTON
The place  Two-and-a-half storey, three-bedroom show home, with double detached garage and 2.5 baths
List price  $499,900
Square footage  1,901
Where  Late stage of an established development in city’s southeast, south of the ring road. Forty minutes to downtown, 10 minutes to the airport, and five minutes to a residents-only recreational lake.
Top features  Loft-den, bonus room with Juliet balcony, hardwood, gas fireplace, all appliances, deck and landscaping. As a bonus, all the furnishings are included. HOA fee includes access to a 32-acre freshwater lake with sandy beach, dock, tennis courts and all-season clubhouse.
Taxes  $3,400
Monthly fees  $300
Contact  Madeline Sarafinchin, Jayman Realty

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MONTREAL
The place  Four-bedroom bungalow with two baths
List price  $492,500
Square footage  1,442
Where  The Beaurepaire area of Beaconsfield, a western suburb of Montreal. Not far from Lac St. Louis and a commuter train station.
Top features  Bright living room with wood fireplace, opening to dining area. Fully renovated three years ago, with spacious and modern kitchen with granite countertops. Unique south-facing den adjacent to master bedroom. Fenced yard with new salt-water pool. Extra-large basement family room with fourth bedroom, laundry room and workshop.
Taxes  $4,746
Monthly Fees  N/A
Contact  G. Shepherd Abbey, Abbey & Olivier Real Estate Agency

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WINDSOR
The place  Executive two-storey, four bedrooms, 2.5-car garage.
List price  $499,900
Square footage  3,300
Taxes  $5,200
Where  Situated in a two-year-old subdivision, 20 minutes from downtown Windsor in the suburb of Lakeshore. Just minutes away from four golf courses and Lake St. Clair.
Top features  A games room and office above garage, hardwood floors throughout, maple staircase and designer granite kitchen, large fenced yard, covered porch and fenced, in-ground pool.
Contact  Larry Pickle, Re/Max Preferred

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VANCOUVER
The place  A one-bedroom,  one-bathroom condo in The Grafton
List price  $483,000
Square footage  850
Where  Situated in a prime Yaletown neighbourhood in the heart of downtown, with trendy eateries, entertainment, sports venues and shopping on the doorstep, as well as the seawall and myriad transportation options.
Top features  A New York-style home that merges original heritage features — exposed
brickwork and wood beams — with a modern open-concept interior. Hardwood floors, expansive windows, a gas fireplace, a custom kitchen, a storage locker and a parking stall.
Taxes  $2,000
Monthly fees  $431
Contact  Faith Wilson at Faith Wilson Group

Making your Real Estate needs my Priority

Dave Dry
Realtor, Century 21 Vantage Realty Ltd
Website: www.davedry.com
Blog: blog.davedry.com
Office: 780 483 2122
Direct: 780 446 3727
Fax 1 866 217 4642

February Real Estate newsletter

Saturday, February 8th, 2014

02 Feb jpeg

 

Making your Real Estate needs my Priority

Dave Dry
Realtor, Century 21 Vantage Realty Ltd
Website: www.davedry.com
Blog: blog.davedry.com
Office: 780 483 2122
Direct: 780 446 3727
Fax 1 866 217 4642

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. Trademarks used under license from CREA.
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