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mortgage stress
New Mortgage OSFI Stress Test

Last month the Office of the Superintendent of Financial Institutions (OSFI) announced a new nation-wide stress test for uninsured mortgages with deposits of 20 percent or more. Applicants will have to qualify for a minimum rate equal or greater than the five-year benchmark rate published by the Bank of Canada or their contractual mortgage rate PLUS two percentage points.

According to OSFI, this is intended to to reduce the risks associated with high household debt across the country because of “frothy housing markets” in Vancouver and Toronto.

For an average household making $150,000/year this could mean a drop in mortgage limit from $850,000 to $650,000 based on new guidelines (with 20% deposit and a new qualifying mortgage rate of 4.89 per cent).

Obviously, the government is using it as another measure to slow down the Toronto and Vancouver housing markets. The result is yet to be seen, but this new policy will definitely have a direct impact on the Toronto market.

Unfortunately, our “zero percent vacancy” rental market will be affected negatively, because new investors will have a harder time qualifying for a loan. And of course the homes over $1 million to $2 million range can expect a much softer market next spring.

Market 2017
Toronto Real Estate Market Update – Summer 2017

The Toronto real estate market is always a popular topic of conversations. But recent developments have more people asking what direction the market is headed. Unfortunately the media has been adding fuel to the fire with headlines such as: “Toronto sales tank…” (The Toronto Star) and “Toronto home prices plunge as buyers retreat…” (The Globe and Mail). It’s clear no one can predict the future, so in the absence of a crystal ball it’s best to rely on statistics, industry forecasts and common sense.

Although the Toronto real estate market is experiencing somewhat of a stagnant summer, in my opinion it will bounce back to a “sellers market” at the beginning of next year. For buyers out there, now is definitely the best time to take advantage of the “buyers market” when you still can negotiate better price and terms.

“Summer market statistics are often not the best indicators of housing market conditions. We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home. As we move through the fall, we should start to get a better sense of the impacts of the Fair Housing Plan and higher borrowing costs,” said TREB CEO John DiMichele.

The MLS® Home Price Index (HPI) Composite Benchmark price was up by 18 per cent on a year-over-year basis. However, the Composite Benchmark was down by 4.6 per cent relative to June. Monthly MLS® HPI declines were driven more so by single-family home types. The average selling price for all home types combined was up by five per cent year-over-year to $746,218.

Guide to Buying a Cottage

Everyone loves a cottage getaway during the summer months in Canada. But before heading out with your chequebook to scoop up a country dream home, you should keep in mind that recreational properties have specific features and unique characteristics. Here’s a short list of things to keep in mind when considering a cottage purchase:

1. Zoning: check with the municipality to make sure thre are no surprises regarding your property; for instance is your access road a municipal road that is ploughed in the winter?

2. Survey: it’s good to get it from the sellers, but if it’s not available, you might want to look into having one done. This can prevent potential headaches with neighbours in the future if you plan to build.

3. Access and easements: check if there are any agreements to access your property through the neighbour’s lot and vice versa. These agreements need to extend to the new owner. Also, beach or water access rights should be well defined, including residential community beaches.

4. Sanitation: hire a specialized inspector to examine the septic system. Also, ask the sellers for their service records.

5. Water: Never access someone’s well! To avoid contamination, a water quality test should be ordered and performed by a qualified water inspector.

6. Plumbing, heating, cooling and electrical systems: always hire a home inspector specializing in recreational properties; they are best qualified to check on the functionality and compliance of these systems.

7. Carrying costs: It’s a good idea to factor in property taxes, insurance, utilities, winter maintenance and repairs for the months when you are not using the cottage in the winter.

Finally, it’s alway best to hire a real estate professional who specializes in the area and who can guide you through the unique features of your cottage.

Sold Sign Steeles
Spring market 2017 update

Spring is the most active time in real estate markets. This spring Toronto and GTA markets experienced an unexpected increase in listings. In April listings were up 33% compared to last year according to Toronto Real Estate Board statistics. Buyers started looking at more choices, hence it was taking longer for homes to sell. This May sales were down 20.3% compared to May 2016. Sales of detached homes were down 26.3%, meanwhile sales of condos were down only 6.4% year over year. Active listings were up 49.9% in May compared to last year.

Last month the introduction of new listings outpaced sales, and market conditions became more favourable for buyers. “However, even with the robust increase in active listings, inventory levels remain low. At the end of May, we had less than two months of inventory. This is why we continued to see very strong annual rates of price growth,” commented Toronto Real Estate Board President Larry Cerqua. Selling prices continued to grow and the average selling price for all homes combined for the TREB Market was up by 14.9% compared to same time last year.

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Selling Your Home to Avoid Power of Sale

When homeowners are unable to make their mortgage payments, the most common solution for mortgage lenders in Ontario is to use the power of sale process to sell the property. Power of sale is a legal remedy that allows the lender to sell the mortgaged property and recoup their investment. When a property is sold under power of sale, the first to be paid are the real estate agents, lawyers, and other people who helped to process the sale. Secondly, all registered mortgages are to be paid off in the order in which they were placed on the property. Finally, any remaining money that remains after paying off debts and fees must go to the former owner of the property.

Unfortunately, the fees incurred in the power of sale process can be very high, and in many cases, there is no money left for the homeowner. A far better solution is for the homeowner to take action immediately upon receiving the initial set of power of sale documents. Ron Alphonso is an Ontario mortgage broker, who specialises in stopping power of sale situations. Ron lets his clients know if they can refinance their mortgage, or if selling is the best option. If selling is the best option, Ron connects the homeowner with a specialised power of sale real estate agent. If you need help with a power of sale, you can contact Ron at ron@mortgagebrokerstore.com or via phone at 416-499-2122.

This article was provided by http://mortgagebrokerstore.com/
and http://powerofsalesontario.ca/

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HomeLife/Realty One Ltd.
Real Estate Brokerage*

501 Parliament St. Toronto, ON M4X 1P3

Mobile: 647.225.2426
Business: 416.922.5533
Fax: 416.922.5808
E-mail: kat@katanderson.ca

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DISCLAIMER: Not intended to solicit currently listed properties or buyers under contract.