September 21, 2017

Yes, You Can Still Purchase A New Home!

Signpost with the words Help, Support, Advice, Guidance and Assistance on the direction arrows, against a bright blue cloudy sky.

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

A Potential Snag With Title Insurance

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Due to this recent case, it would be wise to check your Title Insurance Policy.

What is the description of Title Insurance?  “Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership.”  For a one­time fee, called a premium, a title insurance policy may provide protection from such losses as:

  • Unknown title defects (title issues that prevent you from having clear ownership of the property)
  • Existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property)
  • Encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property)
  • Title fraud
  • Errors in surveys and public records

When Paul and Stefanie MacDonald bought their Toronto home back in 2006, they arranged a title insurance with Chicago Title.  Seven years later, they discovered that a load-bearing wall had been removed during renovations by a previous owner.  Without the wall, the second floor of the structure was unsafe to use.

The City of Toronto issued an order to remedy an unsafe building under the Building Code Act.  The MacDonalds made a claim under their title insurance policy for the cost of installing a temporary support for the second floor and permanent repairs to make the home structurally sound.   The MacDonalds’ title insurance policy provides coverage for a list of itemized risks if they affect title on or after the policy date, including expenses to repair the house because of any outstanding notice of violation.  The policy also covers the owners if title is unmarketable, allowing another person to refuse to perform a purchase agreement.

Chicago Title refused to pay the claim on the basis that there was no coverage for the loss under the terms of the policy.   Last year, the MacDonalds applied to Superior Court for a declaration that the policy covered them and that the insurer was obligated to compensate them.

The motion judge dismissed the MacDonald’s motion and granted summary judgment against them, dismissing their action.  On appeal, the Ontario Court of Appeal held unanimously that the motion judge’s interpretation of clause 11 of the insurance policy was overly restrictive and violated the principle that coverage provisions must be construed broadly. The Court of Appeal also held that Chicago Title’s denial of claim was wrong and, in noting the mismatch between homeowner and large insurance company, further ordered costs of $18,000 for the appeal and $32,800 without further submissions for the original motion.

“The court has come out in favour of a broad and consumer-friendly interpretation of title insurance,” he said. “More importantly, title insurance now covers city work orders to remedy an unsafe building.

“This is an enormous victory for consumers, as coverage for these orders has been routinely rejected by some title insurance companies in the past.”

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

https://www.thestar.com/life/homes/2015/12/18/appeal-court-rules-title-insurance-must-cover-missing-wall-bob-aaron.html

Ontario Helping First-Time Homebuyers

tobuyornottobuycroppedThe Ontario Ministry of Finance will help more people purchase their first home through a proposal to double the maximum Land Transfer Tax refund for eligible first-time homebuyers to $4,000, which is being doubled from $2,000.  The increase would be effective January 1, 2017 and mean that eligible homebuyers in Ontario would pay no Land Transfer Tax on the first $368,000 of the cost of their first home.

The treasurer said the measure — funded by hiking rates on houses selling for more than $2 million — will have more impact outside the Greater Toronto Area’s overheated housing market.  “It’s not going to change their capacity to pay; it’s not going to change their ability to afford the home; it is going to provide an added boost,” he told reporters.

It means first-time buyers who are permanent Ontario residents, will not pay land transfer tax on the first $368,000 of the cost of their homes. Given lower prices in much of the province, Sousa said “for many this will mean no land transfer tax on the purchase for their first home.”

Tenants are also getting a benefit, as the government freezes the property tax on apartment buildings — which are taxed at more than double the rate of other residential properties and condos, while it reviews how the “high property tax burden” impacts the affordability of rentals.

To fund the breaks, the government will increase land transfer rates on houses that cost more than $2 million. For every dollar over and above that, the rate will rise from 2 per cent to 2.5 per cent.  But the tax on the portion of the purchase price between $400,000 and $2 million will remain at 2 per cent.

The rate between $250,000 and $400,000 stay at 1.5 per cent, and between $55,000 and $250,000 at 1 per cent.  And the rate for the first $55,000 of a purchase price will remain at 0.5 per cent.

For other types of properties, such as apartment buildings, the only increase will be on the portion over and above $400,000, which will jump from 1.5 per cent to 2 per cent.

The Ontario Real Estate Association’s incoming CEO, Tim Hudak, praised the change, saying “every break is going to help out that young family” and urging Toronto to follow suit.

“If the city matched this provincial reduction, you’re looking at over $8,000 in tax relief,” said Hudak.

“New home buyers are struggling to get into the market, even outside Toronto. We’re seeing that struggle in places like the Waterloo region and in places like Niagara,” said Vaccaro.

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

Full Article:  https://www.thestar.com/news/queenspark/2016/11/14/first-time-home-buyers-to-get-4000-land-transfer-rebate.html

Scrutiny Coming In Bidding Wars

bribesWe have all heard of or known someone involved in the bidding wars in Toronto’s real estate market.  Apparently there are agents who have been involved in rigging the outcomes of these competitions.

The Real Estate Council of Ontario (RECO) is exhorting brokers to clamp down on unethical practices in light of a hidden camera investigation by CBC’s Marketplace.  RECO is responsible for regulating real estate agents in Ontario on behalf of the Ministry of Government and Consumer Services.  They also have a mission to protect the public interest and enhance consumer confidence in the real estate profession.

 So RECO higher-ups were clearly rattled after Marketplace presented videos of agents at open houses issuing such assurances as “I will block other offers” and “I’ll make sure you get the house.”

During the CBC investigation, the Marketplace reporter and a colleague posed as a couple who were not represented by an agent.  The video shows violations of rules contained in the Real Estate and Business Brokers Act and its Code of Ethics.  “In every video that I saw the registrant was promising to do something that would be a clear breach of the act and code. The worst one featured a registrant who unabashedly said ‘I control the offer process.  I’m in charge.  I will block all other offers to make sure you get the property no matter what prices are being tendered.’”

“To whatever degree this is actually happening, it needs to stop now.  These sorts of practices completely undermine consumer protection, consumer confidence and put the reputation of the real estate profession as a whole very much at risk.”

Even before they sign an agreement to represent a client, agents have to inform potential buyers and sellers that multiple representation could arise.  When the thorny situation does arise, they have to make it clear to clients what impact that will have on their services and how information related to a transaction will be shared.  The client must be told what will be disclosed to the other party and what they can expect to be told in return and all of these details must be explained before an offer is in the works.

While the agents in the undercover videos did not appear to be involved in a specific trade, RECO says, making such comments while trying to solicit business is unethical all on its own.

OREA represents real estate agents from 40 boards in the province.  Those who operate within the rules fear their reputations will be tarnished by those who act unethically, he says.

“It’s also ripping off the people making the biggest investment of their lives,” he says of the home buyers who are treated unfairly.  Buyer beware!

http://www.theglobeandmail.com/real-estate/toronto/rigged-housing-deals-about-to-receive-a-whole-lot-of-scrutiny/article32645521/

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

Where Are House Prices Heading?

falling-prices1With the changes to qualifying for mortgages to cool the housing market, is the fantasy of endlessly rising house prices over?  If the housing market doesn’t respond to measures announced by the federal government, then expect more action ahead.  Argue all you like about how economic and real estate fundamentals affect prices.  In the end, it’s government action that will bring housing to heel.

We need controls for all the people who are basing the biggest financial move of their lives on the idea that houses always go up in price.  Ideally, government intervention prevents a painful correction ahead.

A lot of people are torqued about the influence of foreign buyers on our hottest housing markets, and the feds did target this group.  The government is closing loopholes that foreign buyers use to avoid paying capital gains tax on homes in this country.  Canadians do not have to pay tax on the gains if they sell their principal residence for more than they pay.

With the mortgage stress test, the idea is to see if you can handle interest rates at levels that are much higher than they are today.  A lot of housing bulls have based their argument on a view that interest rates are low and not about to rise in a serious, sustained way because the economy’s too weak to stand it.

If all of these measures combined don’t contain the housing market, there’s always what the government calls “lender risk-sharing.”  If an insured mortgage defaults, lenders are 100 per cent covered.  Ottawa wants to consult on the idea of lenders bearing at least some of the risk of a default, a change that would probably result in lenders being less aggressive with mortgage rate discounts.

Just as important as these measures themselves is the message they send to those who believe what’s happening in our housing market today is normal or healthy.  Ottawa’s worried and it’s taking action.  Prices will not rise endlessly – base your financial decisions accordingly.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/house-prices-will-not-rise-forever-base-your-financial-decisions-accordingly/article32219135/

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