February 25, 2018

New Possibility: Empty Home Tax

Interesting developments are happening in the Vancouver market.  Toronto seems to be mirroring our western neighbour on foreign buyers tax, so it makes you wonder if the same penalties will be coming our way.  One report states that there are 99,236 properties in Toronto that are not regularly occupied.

Another report, states there are 15-28,000 Toronto homes that are sitting empty. They arrived at this figure based on addresses where electricity and water hadn’t been used in a year.  We have a huge rental shortage here, as does Vancouver.

Vancouver has  a rental vacancy rate hovering at zero and Vancouver renters are in crisis.  That’s a lot of rental housing that could be made available, so owners of residential properties in Vancouver will now have to complete an empty home tax declaration by February 2, 2018.

Penalties for non-filing include an assumption that their property is vacant which means a tax of 1% of its 2017 assessed taxable value; plus a $250 fine for non-declaration.

The tax does not apply to principal residences, properties rented for at least 6 months of the year in periods of 30 or more consecutive days or the following exemptions:  occupancy for full-time work (min. 180 days in the year); estate of deceased; transfer of property; undergoing redevelopment or major renovations; strata rental restriction; court order.

“Housing is for homes first, and as business and investments second – we need a tax on empty homes to encourage the best use of all our housing, and help boost our rental supply for locals,” added Vancouver Mayor Robertson.

I know a client here in Oakville that has 5 unoccupied homes in close proximity to her home and it is very unsettling for many reasons.  Personally, I hope we do institute this new tax as there are just too many reasons why a house should not sit empty and you have to wonder how people can get insurance for fire and theft on their homes when there is no one living there?  Very curious!!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

http://www.mortgagebrokernews.ca/market-update/empty-home-tax-info-mailed-to-vancouver-homeowners-233964.aspx
http://www.metronews.ca/news/toronto/2017/06/12/in-housing-crunch-15000-to-28000-toronto-are-empty.html

Did You Know …​​

Did you know that when a borrower tells a lender they are prepaying the full or partial amount owing on a mortgage, the lender must in writing provide the applicable prepayment charge along with a description of how the lender calculated the charge.  This includes the amount owing on the mortgage, the annual interest rate, the comparison rate used for the calculation and the remaining term on the mortgage that was used for the calculation.

Over the past number of years, I have written numerous blogs about the exorbitant costs of mortgage penalties, which can reach in the tens of thousands of dollars.  Doing your homework and being informed is a consumer’s greatest defence against future mortgage penalties.

No one knows for sure what the future may hold but if there is a chance you may wish to move, downsize, sell your home and travel?  If that is the case, do not take a long term mortgage.  These are the discussions you need to have with your mortgage agent.

Take this case of an Edmonton couple that was initially quoted $17,000 to break their five-year fixed mortgage early.

Many mortgage shoppers tend to put greater emphasis on finding the lowest rate, which may save more money up front but can potentially cost more over the long run.  This is where a broker is very valuable, particularly for unexperienced buyers, as they can help find a suitable mortgage product that balances a competitive rate with the features and flexibility that are right for the buyer.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Window Of Opportunity

Dear friends, I am writing to give you a heads up of the impact of changes coming to the mortgage industry.  Are you considering refinancing your mortgage?  Come January 1, 2018, that window of opportunity will be closed!!  Let me explain the impact this will have on you, your family and friends.

The most impactful change is to the refinance market.  Let’s say you want to consolidate your mortgage and other debts into 1 mortgage, take equity out of your home for investment, home renovations or purchase another property.  Currently, you would qualify on the rate you receive but with the new legislation, you will have to qualify on the benchmark rate, which is currently 4.89% or 2% above the interest rate you receive, whichever is higher.  (For example, if your 5 year rate is 3.09% + 2% = 5.09%).  What does this mean?  It means this will greatly reduce how much equity you can take out of your home.

Right now, if you were to purchase a home with a minimum of 20% down payment, your debt servicing would be calculated on the 5 year interest rate you receive.  Come January 1, 2018, you will have to qualify in the same manner as above.  This means that the family’s purchasing power will decrease substantially.  Just to give you an idea, a purchase price of around $720,000 would be reduced to around $570,000 which is approximately $150,000 reduced buying power (these numbers are not exact due to variations in property taxes, condo fees, other debts, etc.)

If you think you may need to take equity out of your home for whatever purpose, do it now before the January 1st deadline.  Please call me if I can be of any assistance to you, your family or friends!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Mortgages Are Incredibly Personal!

Mortgages are incredibly personal and it is important to do your research and know what suits your income level and your lifestyle.  You need to know your pre-payment options with the goal to be able to exercise these options to reduce your mortgage.

Within the mortgage industry, there are 2 groups of people that determine what interest term they will select.  Group 1 takes a keen interest in following what is happening in the industry, the economy, the bond market, the world market and it’s impact on our economy.  The second group selects what they think is the right term but have other priorities in life and deal with i.e. the rate renewal on an as needed basis.

I have clients that only take variable rate mortgages but make their payments based on 5 year interest rates and are able to pay a substantial amount off the principal, hence they are always ahead of the game and rates don’t become the most important factor.

I also have clients that feel the most important aspect is to know exactly what they will be paying for the next 5-10 years so they can effectively plan and budget.  You need to know your capability to be able to make the payments.  There is no point in making higher payments or pre-payments on your mortgage if you have to incur outside debts to pay down your mortgage.

Whatever your needs or motivation, obtain all the pertinent information to help you decide which mortgage term is right for you and your family.  Obtain all the options from someone you trust and respect so you can make an informed decision.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

Owning A Home Is Still An Option!

As a Independent Mortgage Agent, I have had the pleasure of working with young couples to arrange the mortgage financing on their home purchases.  With all the negative information and the ridiculous home prices today, it makes you wonder will the Gen X and the Millennials ever be able to purchase a home?  Are we moving into a generation of raising our families from rental premises?  I don’t think so, I think there are still options and we just need to explore them together.

I can help you with your mortgage and remove all the wonder, worry, concern and stress and give you the direction you need to move forward.  How much can you afford?  What about the down payment, how much do you need and how will you save the money?

With over 20 years experience as a Independent Mortgage Agent coupled with my previous banking experience, I can offer you a ton of experience and expertise in this difficult housing market.   The added bonus, because I am totally independent, I have access to many financial institutions and there is no cost for my service as the lender pays me a referral fee for placing the business with them.  I can help you with anything financial.  We can discuss budgeting, how to save for your down payment, RRSP’s and the benefits, how much income you need to qualify and what purchase price should be that doesn’t put you into the ‘house rich but cash poor category’.

My gift to you is helping you understand the options available and to help you attain them!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406