Mortgage Update | Calgary Mortgage and Housing

Approved Mortgage application form with a calculator and penAugust 27, 2013

Surprise! Mortgage rates have increased once again. With the bond market showing strength, a 5-year rate is now in the range of 3.60%. And judging by the looks and rumours, rates are going to continue to increase. With this in mind, PRE-APPROVALS are important to obtain before starting your home search. They are of no obligation to follow through with your lender, and the rate is held for 120 days — it’s like making a reservation at a restaurant.

There has been other changes this past week that took effect immediately.

The Self Employed Program:  The biggest change is the elimination of borrowers who have more than one rental. Three properties in total, max – rental, secondary vacation and primary residence. Additionally, all married applicants require the spouse as co-borrower, and the  spouse must meet minimum credit requirements. Finally, there has also been some changes to the net worth requirements.

Net worth Lending:  The primary change is how they are determining net worth. Liquid asset requirements have been eliminated and replaced with minimum net worth of $ 250,000.  Please note this MUST be proven at the time of the application; however, it should be noted that RSP’s can now be included. This is a nice change because it is more about net worth, not liquid savings.

NewComers:  Gifts are no longer permitted for permanent conventional (Loan to value > 80%)  mortgages.  There also has been some changes to net worth requirements.

There are only a couple of lenders that have started to make these changes; therefore, it is beneficial for clients to use a mortgage broker, as we still have several options available for these clients.

Lindsay Labrecque, BA, AMP

Senior Mortgage Broker

GOLD REIN Member

Dominion Lending Centres Mortgage Excellence

Mobile: 403.703.3019
Fax: 1.866.651.9084
www.LindsayLab.ca

 

Calgary Residential Real Estate Continues to Soar

Calgary Residential Real Estate Continues to Soar It appears that Calgary’s devastating flood has not been detrimental to Calgary’s real estate market. Reports from the Teranet-National Bank House Price Index, as well as the Calgary Real Estate Board (CREB) show strong year to date sales in the residential marketplace.

Based on a collection of data from public land registries, the Index reports that Calgary’s repeat home sales have climbed 5.9% since July 2012, placing it second in Canada, just behind Hamilton, Ontario.

Additionally, according to MLS sales, Calgary’s residential real estate market is on tempo to reach one of its highest yearly sales ever.

Todd Hirsch, chief economist with ATB Financial, says, “As one of the fastest growing urban areas in North America, Calgary also has one of the hottest real estate markets … Prices for both new and existing homes are on the rise again.”

While the current real estate market is considered a seller’s market, it appears that it continues to shift even further toward sellers, as the current ratio of homes being sold to homes being listed is near par.

CREB reports that as of August 13th, Calgary’s market surpassed 2012’s YTD transactions by $800 million, reaching $6.8 billion. CREB emphasized this growth by highlighting the following MLS statistics:

- 2007 – 26,709 transactions, with a median price of $423,145

- 2012 – 21,326 transactions, with a median price of $427,912

- YTD 2013 – 15,001 transactions, with a median price of $457,499

Low vacancy and interest rates, people relocating to Calgary, as well as increased price and limited availability of rental spaces are contributing to making Calgary’s real estate market soar.

CREB’s president, Becky Walters, attributes the housing demand to the influx of people moving to Calgary. “This past year we saw 30 some thousand net migration to the city,” she said. “We’ve got fabulous job availability here.”

Due to the high grade of individual income, Calgary is considered one of the most affordable places to live.

Indeed, it’s a great time to be a home seller in Calgary!

For more information about Teranet-National Bank House Price Index, click here.

For more information about CREB’s report, click here.

Buying a House: What's the Difference Between a Deposit and a Down Payment?

Deposit Vs DownpaymentDeposit vs Down Payment

When buying a house, what’s the difference between a deposit and a down payment?

The mortgage down payment

The down payment is the full amount you’re putting down on your mortgage, which could be anywhere from 5% to 50% of the total cost of the house.

Is there an ideal amount for the down payment?

Anytime you are able to put 20% down on your home purchase, you bypass Canada Mortgage and Housing Council (CMHC) fees, which could save you a lot of money. If you are included in the large number of people that are unable to put a full 20% down on their mortgage, it’s important to note that the monthly payment costs are negligible when putting 5% or 10% down.

The house deposit

Making up a portion of the mortgage down payment, the home deposit is a smaller amount — usually between $5,000 and $10,000 — that is paid at the time of purchase, or when conditions on the home have been removed.

Is there an ideal amount for the deposit?

The short answer is no; however, if you want your offer to be taken more seriously by a seller, we suggest providing a larger deposit. To learn why, visit our recent post about deposits.

Have a question? Contact The Chamberlain Group by emailing sales@tcgroup.ca, or phoning 403-366-3130, we would be thrilled to answer it!

When Buying a House, How Much Do I Need for a Deposit?

House and CoinsWhen buying a house in Calgary, the deposit is taken out of the initial down payment for a home. Initial house deposits are usually around the $5,000 mark; however, when purchasing a larger home – anything over $500,000 – deposits usually increase to $10,000.

Why choose to increase the deposit amount?

In a competitive real estate market like Calgary’s, the home deposit often dictates who wins in a multi-offer situation. The higher the deposit, the more serious the offer is taken.

Why are larger deposits taken more seriously?

During the “conditionally sold” period, one of the biggest reasons deals do not go through is related to not receiving mortgage financing approval. When a buyer offers the seller a larger deposit, it communicates to the seller that the buyer is in a secure position financially. So, if the seller knows that you, the buyer, is financially secure, they know that you will have no problems getting mortgage financing. If you have approval, financing conditions will be removed, ensuring the seal of the deal.

Have another question? Contact The Chamberlain Group by emailing sales@tcgroup.ca, or phoning 403-366-3130, and we will be happy to answer it — we might even answer it on this blog post!

Selling Your Home in Calgary for the First Time?

Couple with sold signBuying a home for the first time can be a daunting and intimidating task, which is probably why REALTORS® seem to invest a great deal of time and website space educating the public about what you need to do when purchasing a new place.

But what about first time SELLERS? Selling a home for the first time can also be an intimidating and daunting task, eliciting all sorts of questions.

Should I sell my current property before buying a different one?

What should I do to get my house ready to list?

How much is my house worth?

Should I list my house myself, or use a Real Estate Expert?

Needless to say, we think it’s important to discuss the first time selling process. Here are a few tips from TCG’s Real Estate Experts.

1. Make a plan: Buy or sell first?

The decision to buy first or sell first is a personal one that’s usually circumstantial. Consider the following:

  • Can you afford two mortgages? Not sure? Talk to a mortgage broker or banker.
  • Do you want to move to a specific neighborhood in Calgary?
  • Are you relocating? If so, do you have a specific departure date?

Knowing the answers to these questions will assist you in developing a timeline; a timeline will help you avoid stress. It’s also beneficial to speak with one of TCG’s Real Estate Experts. Why?  Because we know what communities in Calgary have the most listings, the least listings, and where there the highest demand is, assisting you in establishing a realistic timeline.

2. Get your property ready to show.

 Make your home look like a show home by:

  • Thoroughly cleaning it inside and out.
  • De-cluttering. This includes:

– Packing up family photos, stacks of paper, as well as shoes and clothing you’re not currently using.
– Cleaning/reorganizing your closets.

  • Cleaning your yard, front and back. Think of this as “staging” your yard.

3. Show your home at its best.

When showing your home:

  • Open the blinds and leave the lights.
  • Remove all garbage and stinky items.
  • Bake something. Seriously, who doesn’t love the smell of cookies or bread or cake?
  • Make your home readily available for showings, meaning don’t ask buyers to wait 24-48 hours before they can see it.

4. Use The Chamberlain Group to list your property.

Why use The Chamberlain Group to sell your house?

  • A professional stager comes to your home, providing you with a list of suggestions to make your property as desirable as possible.
  • Our unique, digital marketing platform ensures the right buyers see your listing.
  • We utilize video to market your property.
  • We only use professional quality photos, as well as professionally measured floor plans.
  • We are nice people. Really, really nice people.

Do you have any more questions pertaining to the selling of your home? Comment below, or contact us by emailing sales@tcgroup.ca.

Affordability… How does Calgary stack up to Canada

 

 

Here are some numbers of Calgary’s affordability compared to major centres across Canada.

What caught me off guard is the average income in Calgary is about $20,000 more than Vancouver but the cost of living in Vancouver is much higher than the cost of living in Calgary.

Thank you to Red Pin for posting this data.

Red Tape Hindering Suite Housing Deals

Calgary’s gone through its share of growing pains when it comes to affordable housing.

The problem was readily apparent a few years ago, with the arrival of thousands of new Calgarians causing the monthly rate of apartments to soar into the thousand-dollar range for a one-bedroom suite.

Still, as is the case across Canada, new residential developments consisting solely of rental units are few and far between.

News reports last month indicated that despite vacancy rates dropping everywhere in the country, economic conditions are making it more palatable for developers to build condos instead of rental units.

Investors are also more interested in purchasing existing apartment buildings than to put up new ones.

This means one of the few sources of growth will be from the willingness of individual homeowners to develop a secondary suite.

In Calgary, it’s easier said than done. Just take a look at the city’s information brochure on the topic.

Flip to Page 2 to find an unfriendly looking flow-chart that helps determine whether a homeowner can build a suite or not, and what kind of application process to expect.

Sometimes it’s even necessary to appear before city council to request a zoning change to allow for a secondary suite.

The red tape is unreal for the homeowner and for the city.

The process is so arduous, it’s no wonder some have chosen to develop secondary suites illegally or not to develop them at all.

Perhaps Calgary can look for inspiration from Edmonton’s straight-forward secondary suite policy:

• Only for fully detached single-family homes on lots of a certain size.

• Established minimum and maximum suite sizes.

• Requirements for parking.

• Garden and garage suites allowed in certain situations.

No neighbourhood restrictions, no flow charts, no re-zoning, no appearances before city council.

Calgary would benefit from such a simple, uniform policy for secondary suites.

Detractors have always pointed to lower neighbourhood property values as a reason to discourage the development of secondary suites.

That just might have been a side-effect of this city’s parcel-specific policies on the matter, because the Canada Mortgage and Housing Corp. (CMHC) cautions homeowners that adding a secondary suite will likely cause a slight increase in property value.

Safety has also been used by opponents of secondary suites as an argument against their development.

But really, there should be no cause for extra concern.

Provincial fire safety and building codes have covered the construction of secondary suites since 2007.

In fact, Alberta is one of only two provinces to have a fully developed set of such building code requirements. (The other is British Columbia.)

Our rules are so stringent that the CMHC uses them as an example of good practice to be applied countrywide.

Calgary desperately needs a coherent, uniform policy covering the development of basement, garden and garage suites.

Keeping the system we currently have will needlessly curtail the growth of rental housing stock in the city.

It also inadvertently encourages the development and use of illegal suites.

Because these fall outside of the law, there’s a good chance there are compliance issues when it come to safety regulations, too.

With the economy improving day by day, there is a chance Calgary will once again face a crunch for rental housing.

Streamlining the way we handle secondary suites is the best way to make sure there will be enough legal housing to satisfy our needs.

Read more: http://www.calgarysun.com/news/columnists/ricky_leong/2011/01/11/16837621.html