Exciting news for prospective homebuyers!

The Canada Mortgage and Housing Corporation (CMHC) has introduced new rules that can make homeownership more accessible, especially for first-time buyers. These changes offer more flexibility and options when it comes to purchasing a home.

Key Changes in the New CMHC Rules:

1. Lower Down Payment Requirements: You can now put down less than 20% on properties valued up to $1.5 million. This is a game-changer for those looking to purchase a home in higher-value markets without needing a large down payment.
2. Down Payment Example: For example, if you’re purchasing a property valued at $1.5 million, the minimum down payment required would be $125,000 (5% on the first $500k and 10% on the remaining up to $1,500,000).
3. Extended Amortization Period: The new rules also allow for an amortization period of up to 30 years, which can help lower monthly payments and make it easier for first-time homebuyers to manage their mortgage.

These changes aim to make homeownership more attainable, giving you more financial flexibility and a wider range of options.

How a Licensed Mortgage Broker Can Help You

Navigating these new rules can be overwhelming, but as a licensed mortgage broker, I can assist you in exploring all available options. I’ll help you understand how these new rules apply to your unique situation and find the best mortgage solution to suit your needs.

Feel free to contact me if you would like more information or to discuss how these changes can benefit you in your homebuying journey.

Today marks an important victory for Mortgage Professionals of Canada and the housing market. We are excited to share that the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, announced significant changes to mortgage rules—many of which reflect MPC’s persistent advocacy on behalf of our industry and all Canadian homebuyers.

Among the new measures are several key initiatives that we have long advocated for:

An Increase to the Insured Mortgage Price Cap: The government will raise the price cap from $1 million to $1.5 million, reflecting the realities of today’s housing market. This change, effective December 15, 2024, will help more Canadians qualify for insured mortgages and make homeownership more attainable, especially for younger Canadians.

Expanded Eligibility for 30-Year Amortizations: First-time homebuyers and all buyers of new builds will now be eligible for 30-year insured mortgage amortizations. This is a crucial step in reducing monthly mortgage payments and helping more Canadians, particularly Millennials and Gen Z, achieve the dream of owning a home.

Increased Mortgage Competition: The strengthened Canadian Mortgage Charter now enables insured mortgage holders to switch lenders at renewal without being subject to another stress test. This will foster greater competition and ensure Canadians have access to the best mortgage deals.

These policy changes are a direct result of MPC’s tireless advocacy and the collective efforts of our members. We’ve worked hard to make sure the federal government understands the challenges Canadians face in buying a home. Today’s measures prove that our advocacy has been heard, and more importantly, respected. This is a major win not just for first-time buyers, but for the entire housing sector.

But we’re not stopping here. MPC will continue to push for policies that make homeownership more accessible and sustainable for all Canadians. We’ll keep pushing for the extension of 30-year amortizations to all homes, not just new builds, and for the implementation of an income verification tool to fight mortgage fraud during our upcoming advocacy on Parliament Hill on September 24.

Our mission remains clear: to advocate for a fair, transparent, and affordable housing market that works for everyone.

Thank you to all our members for your ongoing support. Let’s take a moment to celebrate this achievement—and get ready for the next steps in our advocacy journey.

“The federal government’s decision to raise the insured mortgage cap from $1 million to $1.5 million is a huge win for Canadians. We’re also happy to see the expansion of 30-year amortizations to all first-time homebuyers and to all buyers of new builds, as well as the exemption of the stress test when switching lenders at renewal. This milestone, achieved through our persistent advocacy, shows that housing is now truly a top priority for the government and represents a significant win for first-time buyers and the housing market as a whole. Our mission remains steadfast: to advocate for fair, transparent, and affordable housing market for everyone.”

– Lauren van den Berg, President and CEO of Mortgage Professionals of Canada

Closing Costs – The Real Numbers You Need to Budget For.

Buying a home is one of the most exciting ventures in life! To ensure it goes smoothly, you need to have a proper budget in place to protect your financial security and help you make the best decision for your future location. However, the cost of the home is not the only cost that you need to budget for! The temptation will always be to start looking at the very top of your budget but fees, such as mandatory closing costs, can easily put you over the top. Knowing the real numbers will make it that much easier to stay within your budget and maintain your financial comfort.

Closing costs are a one-time fee associated with the sale of a home and are separate from the mortgage insurance and down payment. Typically, these costs range from 1.5-4% of the purchase price, depending on your location. This means, for an $800,000 home, you would be looking to budget around $22,000 on average.

Here are a few closing costs to keep an eye out for:

• Land Transfer Tax: This is calculated as a percentage of the purchase price of your home, with the amount varying in each province. Some cities, such as Toronto, also have a municipal LTT.
• Legal Fees and Disbursements: You can expect to incur a minimum of $500 (plus GST/HST) on legal fees for the preparation and recording of official documents around your purchase.
• Title Insurance: Most lenders require title insurance to protect against losses in the event of a property ownership dispute. This is purchased through your lawyer/notary and is typically $300 or more.
• PST on CMHC Insurance: Though CMHC insurance itself is financed through the mortgage, PST on the insurance is typically paid at the lawyers and sometimes deducted from your advance.
• Home Inspection Fee: A home inspection is highly recommended as a condition of your Offer to Purchase to prevent any future surprises. This can cost around $500.
• Appraisal Fee: An appraisal is performed to certify the lender of the resale value of the home in the case you default on the mortgage. The cost is usually $400 – $600 but is typically covered by the lender.
• Property Insurance: Property insurance covers the cost of replacing your home and its contents, and must be in place on closing day. This is paid in monthly or annual premiums.
• Prepaid Utility Bills: You may need to reimburse the previous owner of your property for prepaid costs such as property taxes, utilities, and so forth.
• Property Taxes: Property taxes are due on an annual basis and are calculated as a percentage of the home value and vary by municipality. You also may need to reimburse the previous property owner if he/she has already paid property taxes for the full year.

Knowledge is power and understanding the hidden costs associated with purchasing a home can help you create a realistic budget and ensure you remain within your financial means. Contact a DLC Mortgage Expert if you have any questions about your current purchase process or if you are looking to buy a new home now or in the future!

DLC Marketing Team

Is your mortgage coming up for renewal? Do you know about all the incredible options renewing your mortgage can afford you? If not, I have all the details here on how to make your mortgage renewal work for YOU
MORTGAGE RENEWAL BENEFITS:
Get a Better Rate…
Are you aware that when you receive notice that your mortgage is coming up for renewal, this is the best time to shop around for a more favorable interest rate? At renewal time, it is easy to shop around or switch lenders for a preferable interest rate as it doesn’t break your mortgage. With interest rates expected to come down, taking some time to reach out to me and shopping the market could help save you money (your bank’s 1st offer isn’t always the best offer)!

Consolidate Debt…
Renewal time is also a great time to take a look at your existing debt and determine whether or not you want to consolidate it onto your mortgage. For some, this means consolidating your holiday credit card debt into your mortgage, for others it could be car loans, education, etc. Regardless of the type of debt, consolidating into your mortgage allows for one easy payment instead of juggling multiple loans. Plus, in most cases, the interest rate on your mortgage is less than you would be charged with credit card companies.

Start on that Reno…
Do you have projects around the house you’ve been dying to get started on? Renewal time is a great opportunity for you to look at utilizing some of your home equity to help with home renovations so you can finally have that dream kitchen, updated bathroom, OR you can even utilize it to purchase a vacation property!

Change Your Mortgage Product…
Are you not happy with your existing mortgage product? Perhaps you’re finding that your variable-rate or adjustable-rate mortgages are fluctuating too much and you want to lock in! Alternatively, maybe you want to switch to variable as interest rates start to level out. You can also utilize your renewal time to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

Change Your Lender…
Not happy with your current lender? Perhaps a different bank has a lower rate or a mortgage product with terms that better suit your needs. A mortgage renewal is a great time to switch to a different bank or credit union to ensure that you are getting the value you want out of your mortgage if you are finding that your needs are not currently being met.

Regardless of how you feel about your current mortgage and what changes you may want to make, if your mortgage is coming up for renewal or is ready for renewal, please don’t hesitate to reach out! I’d be happy to discuss your situation and review any changes that would be beneficial for you to reach your goals; from shopping for new rates or utilizing that equity! Plus, I can help you find the best option for where you are at in your life now and help you to ensure future financial success.

When it comes time to Renew Your Mortgage, most Lenders will send you a Renewal Letter when there is around 3mths remaining on your term.

Did you know, nearly 60% of Borrowers(you), simply sign & send it back without ever shopping around for a more favorable interest rate…
This is Actually the Best Time to Check out Your Options, Shop Around & Redo Your Mortgage Without A Penalty
& I can Help!!

Are you Considering a Second Mortgage? Here’s What You Need to Know

One of the biggest benefits to purchasing your own home is the ability to build equity in your property. This equity can come in handy down the line for refinancing, renovations, or taking out additional loans – such as a second mortgage.

What is a second mortgage?

First things first, a second mortgage refers to an additional or secondary loan taken out on a property for which you already have a mortgage. This is not the same as purchasing a second home or property and taking out a separate mortgage for that. A second mortgage is a very different product from a traditional mortgage as you are using your existing home equity to qualify for the loan and put up in case of default. Similar to a traditional mortgage, a second mortgage will also come with its own interest rate, monthly payments, set terms, closing costs and more.

Second mortgages versus refinancing

As both refinancing your existing mortgage and taking out a second mortgage can take advantage of existing home equity, it is a good idea to look at the differences between them. Firstly, a refinance is typically only done when you’re at the end of your current mortgage term so as to avoid any penalties with refinancing the mortgage.

The purpose of refinancing is often to take advantage of a lower interest rate, change your mortgage terms or, in some cases, borrow against your home equity.

When you get a second mortgage, you are able to borrow a lump sum against the equity in your current home and can use that money for whatever purpose you see fit. You can even choose to borrow in installments through a credit line and refinance your second mortgage in the future.

What are the advantages of a second mortgage?

There are several advantages when it comes to taking out a second mortgage, including:

• The ability to access a large loan sum (in some cases, up to 90% of your home equity) which is more than you can typically borrow on other traditional loans.
• Better interest rate than a credit card as they are a ‘secured’ form of debt.
• You can use the money however you see fit without any caveats.

What are the disadvantages of a second mortgage?

As always, when it comes to taking out an additional loan, there are a few things to consider:

• Interest rates tend to be higher on a second mortgage than refinancing your mortgage.
• Additional financial pressure from carrying a second loan and another set of monthly bills.

Before looking into any additional loans, such as a secondary mortgage (or even refinancing), Let’s Chat @ www.RefinedMortgages.com! Regardless of why you are considering a second mortgage, it is a good idea to get a review of your current financial situation and determine if this is the best solution before proceeding.

Published by My DLC Marketing Team

Are you over the age of 55, own your home, and looking for a way to supplement your income?

Have you considered a Reverse Mortgage?

There’s options to take a Lump Sum, Monthly Deposits or When you need some extra money

Here’s some answers to a few questions you may have: