Courtesy of Mortgage Broker News Jan 20th 2014

TD has altered the fine print in its VRM contracts for conventional mortgages – specifically around when a spike in LTV triggers demand for  a lump-sum payment or a new appraisal.

Under the terms of the new clause, if, at any time and for any reason, the loan-to-value on a conventional mortgage exceeds 80 per cent, the bank has the right to direct the borrower to bring it under that 80 per cent threshold or to obtain an appraisal proving the fair market value is indeed higher. The new wording replaces a similar clause that sets that trigger at 75 per cent but limits the scenario to instances where interest rate fluctuations have driven LTV over that 75 per cent mark.

Mulhern believes that new, wider clause speaks to the lender’s concerns about a possible market correction and its power to drive down property values.

“In the new clause, it states that if at any time the principal balance exceeds the max LTV.” he said. “This protects the lender in case of property devaluation. “ 

But does the move from 75 per cent to 80 per cent cancel out any potential negative exposure for the client? Mulhern isn’t so sure.

“Something that is outside the borrower’s control, property values, can cause them to have to come up with a significant amount of money or the mortgage will be called,” he explained.

The amendment took place sometime last year, according to Mulhern, and he was only made aware of it because of an increase in variable rate mortgages he recently arranged through TD.

“Unless I’m reading it incorrectly this type of clause has nothing to do with rate fluctuations and everything to do with loan-to-value,” Mulhern said. “Property value decreases would have a huge impact on all TD variable rate mortgages.”

Questions on your mortgage? Contact the Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca

The clauses are compared side-by-side below.

Old:

New:

Whether it’s your first time or your fifth time, shopping for a mortgage can often be confusing and even frustrating. Besides, who really has the time to research and compare mortgage lenders to ensure the best deal? Then there are all those crazy terms and acronyms — beacon scores, LTVs, IRDs and porting – it can make your head spin!

Isn’t there an easier way?

There is indeed, and that’s where the expert care of a licensed mortgage Broker can be your best option. Mortgage Brokers work for you, so they can offer more options than any one mortgage lender. Plus mortgage lenders — like MCAP, First National, Merix, Canadiana — only work with brokers who have been thoroughly vetted and have a valid broker licence. They not only help find the best deal for you, they stay at your side every step of the way.

There are four main advantages to using a mortgage Broker: choice, advice, service and savings.

Choice: Only mortgage Brokers can provide the wide range of mortgage products from various lenders to meet your specific financial needs.

Advice: Mortgage Brokers offer alternatives in selecting a mortgage product and other financial services that are best suited for your situation.

Service: Mortgage Brokers work with your schedule and are there with you from the first meeting to the final close and a plan after funding to hel you optimize the mortgage market.

Savings: Mortgage Brokers save you money by providing  a better mortgage rate, solution & plan with a lower penalty in the event you need to move or alter your mortgage at a later date!

According to a study* conducted by the Canadian Association of Accredited Mortgage Professionals, home owners who renewed or renegotiated with a mortgage Broker reported an average rate decrease of 1.4% compared with 1.0% among all renewers. These four reasons are also why mortgage lenders mentioned above work solely through a national network of trained professional mortgage Brokers.  Independent mortgage lenders know that a mortgage Broker will help make a home purchase or renewed mortgage a positive experience for everyone. If you’re thinking about buying your first home, looking to renew your current mortgage or are curious if there is a better deal out there for your current mortgage, talk to a licensed mortgage Broker today and find out what they can do for you! *CAAMP January 2011 study – Canadian Mortgage Channel: Industry Perceptions Consumer and Broker

Contact The Angela Calla Mortgage Team to help you with your mortgage 604-802-3983 callateam@dominionlending.ca

1 Home Buyers’ Plan

Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time.

Canada Revenue Agency

www.cra.gc.ca Enter ‘Home Buyers’ Plan’ in the search box.

1.800.959.8287

2  GST Rebate on New Homes

New home buyers can apply for a rebate of the federal portion of the HST (the 5% GST) if the purchase price is $350,000 or less. The rebate is equal to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. At $450,000 and above the rebate is nil.

Canada Revenue Agency

www.cra.gc.ca Enter ‘RC4028’ in the search box.

1.800.959.8287

3 BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program

Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $425,000. There is a proportional exemption for homes priced up to $450,000. At $450,000 and above the rebate is nil. 

BC Ministry of Small Business and Revenue www.sbr.gov. bc.ca/business/Property_Taxes/ Property_Transfer_Tax/ptt.htm

250.387.0604

4 First-Time Home Buyers’ Tax Credit (HBTC)

This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year (15% in 2011) x $5,000. For the 2012 tax year, the maximum credit is $750.

Canada Revenue Agency

www.cra-arc.gc.ca/tx/ndvdls/ tpcs/ncm-tx/rtrn/cmpltng/ddctns/ lns360-390/369/menu-eng.html

1.800.959.8281

5 BC Home Owner Grant

Reduces property taxes for home owners with an assessed value of up to $1,295,000. The basic grant gives home owners:

BC Ministry of Small Business and Revenue www.rev.gov.bc.ca/ hog or contact your municipal tax

• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver and Fraser Valley regional districts;

• An additional grant of $200 to rural homeowners elsewhere in the province; and

• An additional grant of $275 to Seniors aged 65+, those who are permanently disabled and war veterans of certain wars.

6  – Property Tax Deferment Program for Seniors.

BC Property Tax Deferment Programs: Qualifying home owners aged 55+ may be eligible to defer property taxes.

– Financial Hardship Property Tax Deferment Program.

Qualifying low-income home owners may be eligible to defer property taxes.

– Property Tax Deferment Program for Families with Children.

Qualifying low-income home owners who financially

BC Ministry of Small Business and Revenue

www.sbr.gov.bc.ca/ individuals/Property_Taxes/ Property_Tax_Deferment/ptd.htm

Support children under age 18 may be eligible to defer property taxes.

7 Canada Mortgage and Housing (CMHC) Residential Rehabilitation Assistance Program (RRAP) Grants

www.cmhc-schl.gc.ca/en/co/

Canada Mortgage and Housing (CMHC) Residential Rehabilitation Assistance Program (RRAP) Grants. This federal program provides financial aid to qualifying low-income home owners to repair substandard housing. Eligible repairs include heating, structural, electrical, plumbing and fire safety. Grants are available for seniors, persons with disabilities, owners of rental properties and owners creating secondary and garden suites. prfinas/prfinas_001.cfm

1.800.668.2642 | 604.873.7408

8 Home Adaptations for Independence (HAFI)

A program jointly sponsored by the provincial and federal governments provides up to $20,000 to help eligible low-income seniors and disabled home owners and landlords to finance modifications to their homes to make them accessible and safer.

BC Housing

 www.bchousing.org/ Options/Home_Renovations

604.646.7055 or toll-free 1.800.407.7757 extension 7055

9  CMHC Mortgage Loan Insurance Premium Refund

Provides home buyers with CMHC mortgage insurance, a 10% premium refund and possible extended amortization without surcharge when buyers purchase An energy efficient home or make energy saving renovations.

www.cmhc.ca/en/co/moloin/ moloin_008.cfm

604.731.5733

10  Energy Saving Mortgages

Financial institutions offer a range of mortgages to home buyers and owners who make their homes more energy efficient. Contact your mortgage provider for details.

11. BC Hydro Appliance Rebates

Mail-in rebates for purchasers of ENERGY STAR clothes washers, refrigerators or freezers.

www.bchydro.com/powersmart/ residential/rebates_savings/ appliance_rebates.html

1.800.224.9376

12. BC Hydro Fridge Buy-Back Program

This ongoing program rebates BC Hydro customers $30 to turn in spare fridges in working condition.

www.bchydro.com/powersmart/ residential/rebates_savings/fridge_ buy_back.html

604.881.4357

13 FortisBC Rebate Program

A range of rebates for home owners include a $75 rebate for upgrading to an ENERGY STAR clothes washer, $300 rebate on an Ener-Choice fireplace and a $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating system.

www.fortisbc.com/NaturalGas/ Homes/Offers/Pages/default.aspx

1.888.224.2710

14 FortisBC Rebate Program for Businesses

For commercial buildings, provides a rebate of up to $60,000 for the purchase of an energy efficient boiler, up to $15,000 for the purchase of a high-efficiency water heater and receive funding towards a new construction energy study

www.fortisbc.com/NaturalGas/ Business/Offers/Pages/default. aspx

1.866.884.8833

.

15 LiveSmartBC Small Business Program

Business Energy Advisors (BEAs) delivers free energy assessments. Help business owners tap into available product incentives and cash rebates for lighting, hot water, heating and ventilation improvements. Help business owners coordinate product installation. NOTE: this program expires March 31, 2014.

www.livesmartbc.ca/incentives/ small-business/index.html

1-866-430-8765

16 City of Vancouver Rain Barrel Subsidy Program

The City of Vancouver provides a subsidy of 50% of the cost of a rain barrel for Vancouver residents. With the subsidy, the rain barrel costs $75. Buy your rain barrel at the Transfer Station at 377 W. North Kent Ave., Vancouver, BC. Limit of two per resident. Bring proof of residency. There is a also a limited time offer for short rain barrels for small yards. Cost $50. Other municipalities have similar offers.

http://vancouver.ca/engsvcs/ watersewers/water/conservation/ programs/rainbarrel.htm

604.736.2250

17 Local Government Water Conservation Incentives

Your municipality may provide grants and incentives to residents to help save water. For example, the City of Coquitlam offers residents a $100 rebate and the City of North Vancouver, District of North Vancouver, and District of West Vancouver offer a $50 rebate when residents install a low-flush toilet. Visit your municipality’s website and enter ‘toilet rebate’ to see if there is a program.

18 Local Government Water Meter Programs

Your municipality may provide a program for voluntary water metering, so that you pay only for the amount of water that you use. Delta, Richmond and Surrey have programs and other municipalities may soon follow. Visit your municipality’s website and enter ‘water meter’ to find out if there is a program.

Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca contact us today to help you with your mortgage.

Its important to review you mortgage and outside debts to see if there is better structure that can have you saving money monthly to become debt free while planning for retirement.

http://m.theglobeandmail.com/globe-investor/personal-finance/paying-down-debt-remains-top-financial-priority-of-canadians-poll/article16183098/?service=mobile

To see if we can help you find the money in your mortgage contact The Angela Calla Mortgage Team at 604-802-3983 or callateam@dominionlending.ca

High-income earners may be better off holding fixed income outside their tax-sheltered accounts, for now.

http://www.moneysense.ca/invest/asset-location-do-low-interest-rates-change-the-rules

Looking for options for a downpayment and want to review the best mortgaeg structure for your income tax bracket? Contact the Angela Calla Mortgage Team at 604-802-3983 or callateam@dominionlending,ca

Woman are a powerhouse, according to the new stat’s from CMHC (as if we needed confirmation 🙂 Amoung people whom live alone, 65% of them are single woman!

To see the full story and recent stat’s click here :http://business.financialpost.com/2013/12/18/canada-condo-market/

To review your options to purchase and get the lowest cost of homeownership contact The Angela Calla Mortgage Team 604-802-3983 or callateam@dominionlending.ca

 Starting in 2010, lenders had to ensure that borrowers getting variable or 1- to 4-year fixed mortgages could afford payments at the 5-year posted rate. That rule applied to mortgages with less than 20% equity.

In 2012, OSFI asked federally regulated lenders to apply the same rule to all variable and 1- to 4-year fixed mortgages, regardless of equity. But some lenders, which are provincially regulated, were not bound by this guideline.

As a result, some lenders today let conventional borrowers (20 % down payment or higher) qualify for variable-rate mortgages using significantly lower rates. That makes it easier to get approved when your debt ratio is above average.

How much easier?

Consider a qualified borrower making $70,000 a year. As of today, that person can get a variable-rate mortgage as high as $483,000 at some lenders. With an insured mortgage, he or she would be capped out at roughly $413,000.

Questions on the best mortgage? Contact the Angela Calla Mortgage Team 604-802-3983 or callateam@dominionlending.ca

The Bank of Canada should keep its key interest rate on hold until economic data persuades it otherwise, Central Bank Chief Stephen Poloz said on Tuesday, adding that he was not worried about calls from some international players to tighten policy.

 His comments follow controversial remarks by Canada’s finance minister on Sunday suggesting there would be pressure to raise interest rates in 2014.

“For us, minimizing the risks of making a big mistake here is what we’re trying to do, and that tells us that we should be holding rates where they are until the data flow changes our mind,” Poloz said in an interview with CBC television.

Asked about the potential for higher rates in 2014, Finance Minister Jim Flaherty told CTV television on Sunday there would be some pressure to tighten because of the US Federal Reserve scaling back its bond-purchasing program.

Click here to read more from the Financial Post.

Questions on your Mortgage? Contact the Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca