Monday, July 23, 2012
Additional mortgage changes
Still more new mortgage rules
The government has announced that as of July 9, 2012, new rules will apply to government-backs insured mortgages where the borrower has less than a 20% downpayment.
The government will:
• reduce the maximun amortization (pay back) period on a mortgage to 25 years from 30 years;
• lower the maximun amount borrowers can refinance to 80% loan-to-value (LTV) for 85%;
• limit the Gross Debt Service (GDS) ratio to a maximum of 39% or income. The GDS ratio represents the amount of household income spent on the mortgage, property taxes and heating;
• limit the Total Debt Service (TDS) ratio to a maximum of 44% of income. The TDS ratios represents the amount of household income spent on all debts including the mortgage; and
• limit government-insured mortgages to homes prices at less that $1 million. Buyers of homes prices at $1 million or more must have mumimum 20% downpayment.
The new rules apply to mortgages on residential property with four units or less. They DO NOT apply to:
Federal Finance Minister Flaherty explained that the reasons for the changes are to "keep the housing market strong, and help ensure households do not become overextended."
What will the new rules cost buyers refinancing a home values at $625,000?
• When refinancing at 85%, the home owner can access up to $531,250.
• When refinacing at 80%, the home owner can access up to $500,000.
What about the new rule limiting mortgage insurance on homes prices a $1 million or more?
Four years of tightening borrowing rules
This is the fourth time in four years that the government has tightened borrowing rules.
• In 2008, the government reduced the maximum amortization period to 35 years from 40, required home buyers to have a minimum downpayment of 5% (compate to the previous 0% down), and introduced new loan documentation standards.
• In 2010, the government required all borrowers to meet standards for a five-year fixed-rate mortgage, reduced the maximum amount borrowers could refinance to 90% from 95%, and for non-owner-occupied investment properties, requred a minimum 20% down payment.
• In January 2011, the government reduced the maximum amortization period for government-backed insured mortgages to 30 years from 35 years and reduced the amount borrowers could refinance to 85% from 90%.
What will the new rules cost home buyers?
Note: calculations assume a 10% downpayment. $625,100 is the benchmark price of a home in the REBGV area as of June 1, 2011.
Article from RealtorLink, July 13, 2012, Volume 13, Number 14
Friday, July 20, 2012
Why use a Realtor®?
The REALTOR® Commitment
For more information about the REALTOR® commitment, plus buying or selling your home, including step-by-step guides, checklists, expectations and questions for your REALTOR® and information about REALTORS®' extensive training and Code of Ethics, visit www.howrealtorshelp.ca.
The following information is taken from the Working With a REALTOR® brochure, a standard tool used by all REALTORS® in BC that explains agency relationships and describes which personal information is collected, as well as how it's used and distributed. Click here for a PDF version.
View article online at http://www.bcrea.bc.ca/working-with-a-realtor-/why-use-a-realtor
Tuesday, July 3, 2012
Property Taxes Special Edition
It's Property Tax Time
By now home owners and businesses through out the province have received their annal property tax notices in the mail. Property taxes are due July 3, 2012.
Property owners who haven't received a tax notice, should contact their municipal finance department and arrange for a duplicate notice. Property owners are responsible for ensuring that the local government and BC Assessment have your correct mailing address. Property owners must pay property taxes whether or not they receive a notice.
What taxes do property owners pay?
For questions about taxes levies by other taxing authorities, contact:
Avoid late payment penalties
The upside of property taxes
Artice from The Open House, Volume 7, Number 7, June 29, 2012
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