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Bank regulator proposes higher mortgage stress test level

                           Canada's top banking regulator is raising the mortgage stress test level to 5.25 per cent or two percentage points above the market rate, whichever is higher. (Ron Antonelli/Bloomberg) Canada's top banking regulator is proposing to raise the...

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HOMEOWNERS CAN CLAIM A 10.5% TAX CREDIT ON UP TO $20,000.  until December 31st, 2022!

 Under the new Saskatchewan Home Renovation Tax Credit, homeowners will be able to claim a 10.5% tax credit on up to $20,000 of eligible home renovation expenses. Saskatchewan homeowners taking full advantage of the program will be able to claim a maximum non-refundable tax credit of $2,100.

Qualifying:

  • Must be incurred during the eligible period and supported by receipts which clearly
    identify:
  • The vendor/contractor
  • The date of which the goods/services were purchased and/or provided
  • A description of the work performed and the address where the work was performed.
  • The amount paid.
  • Expenditures do not qualify if the goods or services are provided by a person with whom
    the taxpayer is not dealing at arm’s length (i.e. a close relative) unless that person is
    registered to collect G ST/PST.

Eligible goods or services can be claimed for the tax credit during the period in which the costs were incurred.

  • For example, costs incurred with having a roof shingled in 2021 must be claimed on the taxpayer’s 2021 tax return and can’t be resubmitted again for the 2022 tax year.
  • The total amount of eligible expenses being claimed each year under the Saskatchewan Home Renovation Tax Credit must be between $1,000 and the annual limit.
  • Only renovations undertaken to a homeowner’s primary residence will be eligible for the Saskatchewan Home Renovation Tax Credit.
  • Either spouse in a married or common-law couple, residing at the same address may claim the credit; or they may divide eligible home renovation expenses between themselves in claiming the tax credit, up to the maximum total annual amount per residence.
  • Eligible expenditures for condominiums and co-operative housing corporations include the individual’s share of the cost of renovating common areas, in addition to costs to renovate the unit.

 

Discover How Your Home Can Help You Live a Better Retirement

 

Saving enough for your retirement in Canada can be a challenge. As the average life expectancy continues to rise, retirement savings are being stretched further over many more years.

Today, many Canadians just like you, are looking for ways to supplement their income as they enjoy their golden years. All too often, retirees are not fully aware of all their financial options and consider downsizing their home and leaving the community that they love in order to make ends meet.

Fortunately, there is a way you can acquire the money you need without having to move or sell your home. I’d like to introduce you to the CHIP Reverse Mortgage. A CHIP Reverse Mortgage allows you to access up to 55% of the equity in your home as tax-free money. Not only are you are able to retain ownership, but there are no monthly payments for as long as you live in the home.

 

So whether you’re looking to alleviate debt, increase your monthly cash flow, help out family members, or even take that dream vacation – a CHIP Reverse Mortgage can be the option you’ve been looking for.

 

If you would like to learn more about how a CHIP Reverse Mortgage can benefit you, please contact us and we will  be happy to answer any questions you may have and provide you with more information so you can make the right choice.

Pay out Penalties Explained

Wanting to know more about how pay out penalties are calculated? Check out the video below!

This is a very good explanation and can really bring to light higher point payout penalties with the 6 major banks vs. the lower payout penalties with the many lenders available in the broker channel.

CMHC Tightens its Mortgage Rules, Impacting First-time Buyers

Breaking News: Effective July 1st the mortgage rules are changing again and this time it’s big time! Regarding CMHC insured mortgages (mortgages with a down payment less than 20 percent). They’re lowering the allowed debt ratios & increasing the required credit scores. Other changes to be announced.
Bottom line is if you have been thinking of buying a home and are close to the max debt ratios or may have a lower credit score you should act now and act fast.

Contact us today for more information, or click “home” and start an online application by clicking “secure your best rate”

 

 Update

  • CMHC’s new debt-ratio policy will cut homebuyers’ purchase power by up to 11%. For example, someone earning $60,000 with no other debt and 5% down could afford approximately 10.9% less home under CMHC’s new rules. That’s like jacking up the minimum stress test rate from 4.94% (where it lies today) to 6.30%!
  • In a report tonight by RBC Capital Markets, Genworth and Canada Guaranty reportedly indicated that the choice to adopt any/all of CMHC’s changes is theirs. CMHC’s policies were not an industry-wide mandate by the Department of Finance.
  • Insured borrowers currently account for roughly 20% of new mortgages. A top insurer executive once told us that credit score, loan-to-value and geography all predict defaults on these loans better than debt ratios.
  • 20% of down payment funds from first-time buyers came from borrowed sources, according to a Mortgage Professionals Canada survey in February. Yet, only 2% of down payments for CMHC-insured borrowers with loan-to-values above 90% were from “non-traditional sources” like unsecured credit and loans.
  • CMHC’s rule-tightening could cost it 20% of its business, say analysts. It could eventually lose its decades-long status as market share leader in the Canadian default insurance market.
  • Liquidity is key if home values dive. Yet, CMHC’s decision today may shift more of its business outside of big urban areas and into less urban and less liquid real estate markets. That’s because borrowers in Greater Toronto and Vancouver generally have higher debt ratios⁠— and borrowers with higher debt ratios and less than 20% down payments would choose Canada Guaranty or Genworth by default, since they’re the only games left in town. 

What Will This Do to the Housing Market?

Sixty-one percent of first-time buyers buy with less than 20% down (i.e., get an insured mortgage), according to data from Will Dunning and Mortgage Professionals Canada.

How they’re affected and the fallout from CMHC’s move depends on whether:

  1. Private insurers impose the same rules
    • This would limit all options for borrowers who don’t have 20%+ for a down payment and don’t qualify with CMHC
  2. Big 6 banks, which dominate prime-mortgage lending in Canada, eventually harmonize their low-ratio mortgage guidelines with these new insured mortgage guidelines from CMHC
    • If so, the change could have a broader impact on borrowers
  3. CMHC will impose its changes on all insured mortgages that are securitized (i.e., sold to investors). CMHC runs Canada’s mortgage securitization business, with direction from the Department of Finance.

Info via: ratespy.com

CMHC Federal Program

For everyone who is interest in the new loan that CMHC is offering for your down payment, this is a news release that gives details and is scheduled to come into effect September 1st 2019. Please contact us if you have any questions or concerns!

Buying Your First Home?

Our team will help you find the best rate, walk you through the steps of signing your first mortgage and answer any questions you may have. 

Brokerage Number: 315794

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