There are a lot of factors that go into buying a home. It is important to understand what happens when an appraisal value comes up short and how it can affect you. Before we dive into what happens when an appraisal value comes up short, let’s discuss what a bank appraisal is. 

When you get a bank appraisal, it is the unbiased estimate of the value of a home that gets conducted by a third party appraiser. Lenders go through the process of getting an appraisal to ensure that they know that the home is worth what you are paying it for. It is important for lenders to do this so that they can make calculated approaches to lending. If the market value is lower than the agreed upon sales price and the buyer defaults on the mortgage, then the lender may have issues selling the property for enough money to recover their investment. If the appraisal does come in low, then lenders will only lend on the appraised value and not the full purchase price. 

An appraisal is not always needed, as it is typically for purchasers that are low ratio that have uninsured mortgages, or in other words, putting 20% or more down payment towards their home purchase. If your down payment exceeds your loan amount, or you are insured by CMHC, then you will likely not need an appraisal.

An appraisal is usually hired by the lender but paid by the buyer, with an approximate value of $350-500.

Overall, a bank appraisal is a critical step for both the home buyer and the home seller. For a buyer, an appraisal is often a requirement to obtain a mortgage. These therefore affect the seller as well, as it determines whether or not the buyer will be able to remove subjects on your home.

Now that we have talked about what a bank appraisal is, let’s discuss what happens if an appraisal comes in low. 

Bank appraisals are not always a smooth process as sometimes the appraiser finds the value of the home is less than what the buyer agreed to pay, based on their market comparisons and assessment of the home and property. In this case the lender may only fund up to the appraisal value and ask the buyer to fund the difference, or in other words increase their down payment. For some buyers this could be a difference of being able to buy the home or not being able to buy the home.

There are a few options you can take if you find the appraisal puts a lower value on your home.

1. Dispute the Appraisal: Your mortgage broker could argue the appraisal and give different comparables or explanations. The appraiser may take in these comments and adjust the numbers.
2. Get a second opinion: You could buy another appraisal and see if they bring in a different opinion to change the value of the home in the eyes of the lender.
3. Come up with the money and fund the difference: Borrow the funds or increase your down payment. 

It is important to note that a low appraisal value is not necessarily going to kill the deal. When looking at an appraisal value that comes up short, it is not always the best idea to ask for a second opinion. Likely the best chance is being able to have a discussion with the appraiser to discuss comparables and other note-worthy items to see if there can be any movement in the final report of the house’s value. 

Overall, it is important to note that an appraisal is a part of the buying process. We want to make sure that you are always equipped to handle every sudden turn that comes in the buying process. Please make sure you work with a GLM Mortgage Broker to get the best results. 

The post What is an Appraisal and What Happens if the Value comes up Low? appeared first on GLM Mortgage Group.

The 2022 Federal Budget is the first budget presented since a federal election took place that saw Justin Trudeau form a minority government in the fall of 2021. Since then, the Liberal government has joined in a sort of coalition with the NDP to keep them in power till 2025 so that work can get done for Canadians during this unprecedented time. 

Throughout the campaign the government also made other promises such as creating a TFSA for first time home buyers, working on creating more inclusive rent to own opportunities to pave the way for renters to become owners, and create a more improved First Time Home Buyer Incentive to give Canadians the option of a deferred mortgage loan. The Liberal government also promised to double the First-Time Home Buyers Tax Credit, reduce monthly mortgage costs and build, preserve, or repair 1.4 million homes in the next four years. These are just some of the promises from the 2021 election campaign that are still being worked on, but since the campaign more promises have been made in the form of the 2022 Budget.

Recently, the federal government released the 2022 budget. Since the budget release, consultations, meetings, and debates have been going on to implement pieces of legislation. In the budget, the importance of affordable housing and accessible housing in Canada was brought up. 

The government agrees that every Canadian has a right to a safe and affordable place to call home. Unfortunately, for Canadians across the country, the dream of homeownership has become unattainable. For this reason, the government announced a historic investment of $14 billion in housing through Budget 2022. The government plans to use this investment to take significant steps to addressing the growing problem of housing affordability.

These steps include:

• Putting Canada on the path to double our housing construction over the next decade
• Helping Canadians buy their first home
• Protecting renters and buyers
• Curbing unfair practices that drive up the price of housing
• Continuing to fight homelessness and support housing affordability, particularly for the most vulnerable
• Addressing the housing needs of Indigenous peoples.

In only a few decades the housing crisis has become extreme. The dream of buying a nice house is no longer as attainable as it used to be. For these reasons, budgets like this are welcomed with open arms, but unfortunately the housing crisis is not going to be short term, and we anticipate problems for years to come.

On the bright side, budgets like this show that it is within the government’s best interest to help Canadians afford proper housing. We are also very excited about a potential Home Buyers’ Bill of Rights that the government is working on that would accomplish the following:

• Ban blind bidding
• Establish a legal right to a home inspection
• Ensure total price transparency on the history of recent house sale prices
• Require real estate agents to disclose to all participants in a transaction when they are involved in both sides of a potential sale
• Move forward with a publicly accessible beneficial ownership registry
• Ensure banks and lenders offer mortgage deferrals for up to 6 months in the event of job loss or other major life event
• Require mortgage lenders to fully inform buyers of the full range of financing choices and programs available. 

We will continue to monitor the changes and adaptations that take place within the next few years of the Liberal governments mandate. We are cautiously optimistic that many of these benefits will take shape and make a difference within the Canadian housing economy that will create positive changes for Canadians. 

Mortgage Brokers with GLM Mortgage Group | Dominion Lending Centres stay current on industry news that will impact Canadians in obtaining seamless financing. If you have any questions, contact us and we’ll be happy to assist. 

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On April 13th, the Bank of Canada increased its target for the overnight rate to 1%, with the Bank Rate at 1.25% and the deposit rate at 1%. The Bank is also ending reinvestment and will begin quantitative tightening (QT), effective April 25th. Maturing Government of Canada bonds on the Bank’s balance sheet will no longer be replaced and, as a result, the size of the balance sheet will decline over time. 

The factors behind this increase are due to a variety of reasons. Although the recovery from the COVID-19 pandemic has been strong in some regions, there are other regions where it has not been strong. The US economy is growing at an exponential rate, but China’s economy is struggling due to weakness in its property sector. Globally, we also see a supply chain issue that has hindered production and is pushing up inflation to levels unseen since the financial crisis in 2008. Importantly, global tensions are also primary drivers of a substantial upward revision to the Bank’s outlook for inflation in Canada, specifically the Ukraine-Russian tension, are causing some uneasiness in the stock and crypto markets. 

Alongside the high inflation, housing prices are currently very high, and the elevated housing market activity puts upward pressure on house prices. This will make it even more challenging for first-time homebuyers to enter the market. Buyers are facing high pressure, with multiple offers on property being the normal occurrence, some offers far above asking price and/or without subjects in place. As mortgage brokers, we are seeing the challenges our clients are facing when participating in this market. As the home prices rise due to this behaviour, it makes purchasing (especially for first time buyers) more and more unattainable.

Although the COVID-19 recovery is far from over, and tensions worldwide are likely to remain for the foreseeable future, life is starting to stabilize, and with that, the stock market, inflation rises, and housing prices could see a flattening out in the months and years to come. Inflation is likely to decline reasonably to 3% by the end of this year and ease back towards the target over the projection period. In the United States, domestic demand remains very strong and the US Federal Reserve has clearly indicated its resolve to use its monetary policy tools to control inflation. As policy stimulus is withdrawn, US growth is expected to moderate to a pace more in line with potential growth. Global financial conditions have tighten and volatility has increased. The Bank now forecasts global growth of about 3.5% this year, 2.5% next year, and 3.25% in 2024.

We want to reiterate that high inflation will not simply disappear due to one budget or one policy change. If we are focused on inflation it is going to take a collection of events nationally and worldwide over the next few years that will see a steady more flat line of growth in future years.

We expect the Bank of Canada to increase the rates again by some point this year. We want to assure you to not stress over the potential Bank of Canada overnight lending rate. If you have a variable mortgage you are paying significantly lower rates then fixed rates.

We are expecting at least one more 0.25% increase over the course of this year. If you are wondering how it will effect you, let’s break it down:

If your balance is say $400,000 with a 30 year amortization, then for every $100,000 owing, your monthly payment will increase by about $13 – translating to roughly a $52 increase per month. 

If you are not feeling great about these increases then did you know that there are variable rate products on the market that allow the payment to remain consistent while enjoying the benefits of the variable rate gamble? If you have been considering making the switch to fixed, have you considered how early payout penalty structures might impact you? 

These are big questions and if you have any questions at all, please reach out to us, and we will do our best to answer them in a timely matter. 

Uncertainty can be stressful and at GLM Mortgage Group, we are always available to answer questions and update our clients regarding their mortgage, current rates and market conditions in order to make educated and informed decisions about their financial livelihood. 

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Home Price Declines Are Likely

The past two years have been very unpredictable as the COVID-19 pandemic has ravaged the globe. The pandemic has brought many differences with the economy in Canada, and one of them is the hot housing market that started in early 2020 and has not let up.

With the housing market, many families have struggled to buy homes because the competition has been very fierce, with some homes going over 30-40% of the asking price.

According to an article by Canadian Mortgage Trends, New Forecasts Suggest Home Prices Declines Are Likely. A growing number of economic forecasts see Canadian housing prices falling in the near term, with some suggesting declines of around 25% or more. Meanwhile, the latest forecast from Oxford Economic has home prices falling 24% by mid-2024.

A big reason for this breaking point is due to the above borrowing capacity of median-income households. In late 2021, prices were 19% above the borrowing capacity of median-income households, and by the middle of this year it could be as high as 38%. Due to the weight of the housing market’s own success, it is likely the housing market will reach a breaking point and crash. Another reason for the potential of a housing market crash is higher borrowing rates, with the Bank of Canada’s policy rate expected to reach at least 2% by 2024. Oxford also expects average 5-year fixed rates will reach 4.25% by the end of this year and 5% towards the end of the decade.

We understand that this news comes with very mixed emotions. For some, a lowering in housing prices allows for a sigh of relief knowing that you may be able to comfortably enter the housing market in the near future. For others, you may be worried that the property you recently purchased in the last few years will start to depreciate and you will lose money on your investment. It is important to understand that these are just forecasts, and although we do anticipate a drop in the near future, the exact amount of the drop is unknown. It is unlikely that the drop will be any more severe than what Oxford is expecting and even if it does it is all relative. If your housing prices drop 12%, you must understand that other housing prices in your area are also likely to drop, making the purchase of your next property still within your purchasing power. 

Oxford notes that even if the anticipated 24% drop was to occur, the real estate market would still be 15% higher than pre-pandemic levels. That is exciting news because it is always great to see growth in the market, and to see growth maintain even after the housing market cools off should be positive news for real estate investors. 

In the meantime, the BC government recently introduced legislation that will allow for a cooling off period following the purchase of a home. The government announced this in an effort to protect buyers in the province’s red-hot real estate market. The legislative announcements, when passed, will give people buying a home more time to consider their offers, ensure financing and obtain a home inspection. This is very exciting news because it decreases the risks that were associated with a lot of these quick turnaround housing sales that left people unprepared and potentially buying a home that had more issues than originally expected. 

We will continue to update you when this piece of legislation gets passed.

We understand that the housing market is scary and we understand that anxiety can be increased with the present incline and the future decline of the market. We are always here to answer any questions you may have at any point. 

The post Home Price Declines Are Likely appeared first on GLM Mortgage Group.

The Stress Test

You have likely heard the words “mortgage stress test” before when starting your real estate journey. In this blog we want to familiarize you with what a mortgage stress test is, how it works, what the current stress test rate is, and some other information about a stress test. 

In a general picture, a mortgage stress test is the qualifying benchmark set by the Canadian government’s Office of the Superintendent of Financial Institutions (OSFI) to reduce risks to the housing market, such as mortgage default risk. The Minister of Finance is responsible for setting mortgage stress test rates for insured mortgages and OSFI sets the mortgage stress test rate for uninsured mortgages.  

The reason that it is a smart idea to get a mortgage test is due to fluctuating interest rates, which is one of the few factors that can affect the cost of buying a house. It is important to understand that a mortgage rate is one of the biggest reasons why the cost of a home may increase, especially if you use a variable-rate mortgage. Variable-rate mortgages are linked to the Bank of Canada rates, which recently rose a few weeks ago. 

How Does It Work?

A mortgage stress test is a high interest rate on a mortgage application that a bank or mortgage broker uses to qualify you. In simple terms, a mortgage stress test is a rate that is raised artificially in order to lessen the amount of mortgage for which you may qualify for. Let’s say you qualified for a $500,000 mortgage with an interest rate of 2.25% for a 5-year period, the maximum mortgage you could qualify for may be lowered to $400,000 if you use the stress test rate of 5.25%. Put simply, your mortgage approval would be reduced by roughly $100,000 if you qualified at 5.25% versus the contract rate of 2.25%

What is the purpose of a Stress Test?

The main reason for a stress test is to prevent potential homebuyers from taking out a mortgage in their name which was too costly for the individual, therefore getting themselves into a potential debt issue. Due to its high regarded nature, the stress test is now mandatory for all potential homeowners.

What is the Current Stress Test Rate?

For the stress test rate, it is either 5.25% or your current interest rate plus 2% – whichever is higher. It is also worth noting that to make sure as a potential homebuyer you can make payments despite possible increases to mortgage costs, the mortgage stress test rate is more than the actual lending rate you might get from the financial institution. 

Can I get a mortgage without a Stress Test?

There is a few ways to avoid the Stress Test, first which involves utilizing a local credit union if the property is within their lending are. As long as there is a 20% down payment, this can be an option and typically comes with a slightly higher rate but will allow you to qualify for more. Secondly, alternate and private lenders will bypass the Stress Test but here, rates will be even higher and there could be potential fees associated with this type of lending.  

How can we help?

Stress tests are an important part of getting a mortgage. It helps to make sure that people are able to afford their purchase so as to not go into debt in the future. Think of it as a safety net that is in your best interest. 

We understand that stress tests can be confusing, and you may wonder why you need one. If you have any questions or would like to start your mortgage journey, feel free to reach out to us anytime. We very much look forward to meeting you and helping get you set up in your new real estate adventure!

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First Time Home Buyer Part

A lot has changed in the past few decades. Those changes have shaped the way people live today and the new traditions that have been created. Unfortunately, one of those new traditions is first-time home buyers needing financial assistance from their parents in order to obtain a home. 

According to the Ontario Real Estate Association, roughly 4 in 10 parents helped their children between the ages of 18 to 30 with buying their first home, apartment, condo, or other property. Of the people getting financial assistance from family, the average amount of money in a financial gift is $71,000, and the average loan that parents provide is upwards of $41,000.

A big reason for the increase in financial aid is because home buyers 20-30 years ago are very much benefitting from the enormously rising home prices and can afford to take some equity out of their home to help out their children. People also truly believe in the value of homeownership. 92% of people believe that they need to do what they can to supply younger generations with the opportunity to own a home. A home provides economic stability and confidence in a person that is very important, and homeowners today want that for their younger generations.

Financial assistance may seem like a big bonus for the younger generations, but it is necessary. Home prices have increased so much that now the average home in Canada is almost eight times the average household income. In 1980, the average home cost was between two to three times the average household income, and that widely shows how much home prices have increased compared to salaries.

On top of this, many first time home buyers are dealing with other issues. The average student debt today is roughly $25,000 for a graduating student. Students are also expected to attend more years of school compared to the past, leaving them less years to work full time before feeling the need to hit the real estate market. Unfortunately, this also affects their career opportunities, as the younger generations are more likely to grab a job for financial stability rather than looking at where their true skill set is, or what their dream career may be. 

In January of this year, home prices were calculated to have gone up 21% higher compared to just a year earlier, and 46.5% since just two years ago in January of 2020!

It is hard to catch up to those rising house prices that continue to skyrocket upwards. Our younger generations have reason to need financial assistance, and on top of rising home prices and increasing inflation, the generation has been hit with labor shortages during COVID-19 setting them back two years.

Unfortunately for first-time home buyers, the short-term future of the housing market only seems to be pointing in an upward direction. The average minimum down payment is $50,000 across Canada, and on average that takes a person six years to save for a down payment, which is an increase of double since 2000.

Being a first time home buyer has never been harder than it is today.

That being said, there are strategies to help create an easier home buying experience, with or without the help of a parent. In our next blog we will discuss the best steps to take as a first-time home buyer and why we think entering the market is still a very great idea. Although the housing market is very hot right now and can be overwhelming, homes do still provide a lot of financial stability and can be a great long-term investment.

The post First Time Home Buyer Part 1 appeared first on GLM Mortgage Group.

At the end of January, the Bank of Canada held its target for the overnight rate at the effective lower bound of 0.25%, with the bank rate at 0.50% and the deposit rate at 0.25%. This means that the Bank of Canada rate stayed the same, which means variable rates will also remain unchanged for now. I know that many Canadians have been tuning in to the speculations and as Mortgage Brokers, we are receiving many questions about variable rates and how much longer they will remain this low.

Although the recovery from the COVID-19 pandemic has been strong in some regions, there are other regions where it has not been strong. The US economy is growing at an exponential rate, but China’s economy is struggling due to its weakness in its property sector. Globally, we also see a supply chain issue that has hindered production and is pushing up inflation to levels unseen since the financial crisis in 2008. Lastly, global tensions, specifically the Ukraine-Russian tension, are causing some uneasiness in the stock and crypto markets. 

Housing prices are currently very high, and the elevated housing market activity puts upward pressure on house prices. This will make it even more challenging for first-time homebuyers to enter the market. Buyers are facing high pressure, with multiple offers on property being the normal occurrence, some offers far above asking price and/or without subjects in place. As mortgage brokers, we are seeing the challenges our clients are facing when participating in this market. As the home prices rise due to this behavior, it makes purchasing (especially for first time buyers) more and more unattainable. 

Looking at the good news: oil prices have rebounded to well above pre-pandemic levels, and GDP growth in the second half of 2021 now looks to have been even stronger than expected. There has been strong employment growth, a tightened labor market, higher hiring intentions, and wage gains are elevating.

Although the COVID-19 recovery is far from over, there are a lot of positives to look forward to in the coming months. Life is starting to stabilize, and with that, the stock market, inflation rises, and housing prices could see a flattening out in the months to come. Inflation is likely to decline reasonably to 3% by the end of this year and ease back towards the target over the projection period. Expect longer-term inflation to go back to the 2% target. The bank will use its monetary policy tools to ensure that higher near-term inflation expectations do not become embedded in ongoing inflation.

While the pandemic has been very unpredictable from the start, we expect this stabilization to enter a longer-term stage alongside the economy’s growth. We expect the economy’s movement to be less affected by potential new variants in the future, but there is still the possibility that things could shift. 

We expect the Bank of Canada to increase the rates in March during their next scheduling meeting, and we will continue to update you as we hear more. We want to assure you to not stress over the potential Bank of Canada overnight lending rate. If you have a variable mortgage, you are paying significantly lower rates than fixed rates.

We are expecting a series of 0.25% incremental increases over 2022. If you are wondering how, it will affect you, let’s break it down:

If your Mortgage balance is 400,000 with a 30-year amortization, then for every $100,000 owing, your monthly payment will increase by about $13 – translating to roughly a $52 increase per month. 

If you are feeling uneasy about these increases, then did you know that there are variable rate products on the market that allow the payment to remain consistent while enjoying the benefits of the variable rate gamble? You can also lock in your rate and convert it to fixed directly with the lender which is a great option if you see variable rates rising and have reached your threshold.

These are big questions and if you have any questions at all, please reach out to us, and we will do our best to answer them in a timely matter. 

Uncertainty can be stressful and at GLM Mortgage Group, we are always available to answer questions and update our clients regarding their mortgage, current rates, and market conditions to make educated and informed decisions about their financial livelihood. 

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How to Improve Your Credit Score

Credit is an important aspect of our daily lives. Our credit score and history are an important aspect of a Mortgage Application, and it demonstrates to the lender your financial health and responsibility to repay debts. Typically, lenders will go by the 2-2-2 rule, meaning two tradelines, for two years, with a $2000 limit.

The stronger your credit report is, the easier it will be to get an approval for loans, lines of credit, and lower interest rates when you borrow. 

An important thing to know is your credit score is based on many different factors, and in this blog we want to help you understand what they are and how you can use them to your advantage to have a strong credit profile.

Credit scores are based on these 5 factors:

1. Payment History
2. Credit Usage
3. Age of Credit Accounts
4. Credit Variety
5. New Credit Inquiries

Payment History

When looking at your payment history, it is very important to pay off your debt as soon as possible and avoid late payments at all costs. 

Make sure you create an alert on your calendar or phone so that you know when you need to pay off your credit card and monthly debt payments. You could even set up automatic bill payments from your bank account.

Another option could be to charge all of your monthly bill payments to your credit card, this way you know that all of your payments are paid in one place, and then make a payment on your credit card to clear out this balance.  

Credit Usage

When you look at all your credit cards, they all have a limit that you can go to. When looking at credit utilization, you want to keep it at or below 30% of all your limits combined. 

Let’s say you have 3 credit cards at $3000 each for a total of $9000. 30% of $9000 is $2700. This means that you should try to keep your outstanding balance below $2700. If you go above, then pay your credit off until you are back to that 30% threshold. If you normally go above 30%, but you are always able to pay off your credit card, it may be wise to ask for a limit increase so that you can have a greater credit utilization at 30%.

Age of Credit Accounts

This looks at how long you’ve had your credit accounts. The older your average credit age, the more favorably you appear to lender in terms of managing long standing credit and keeping it in good standing.

Keep your old credit accounts open because it will it help with your credit utilization ratio, but if you close an account with a negative balance, it can negatively affect you for 7-10 years and it can lower your odds of increasing your credit availability in the future. 

Credit Variety

As long as you open them for sufficient reasons, and are able to pay them off in time, having multiple types of credit accounts can be very beneficial. These can range from installment loans, revolving debt, mortgage accounts, and open credit cards. 

Successfully maintaining a diverse mix of types of credit types may positively impact your credit cards. Just be warned, just because having more open can be beneficial, it can also hurt your credit if you do not use your accounts properly and maintain a healthy credit ratio. 

New Credit Inquiries

There are two inquiry types when looking into your credit score; hard and soft inquiries. Soft inquiries could be just checking your credit score with online banking, giving a potential employer a chance to look at it, and credit card companies that check your file to determine if they want to send you preapproved credit offers. These types of inquiries, or soft inquiries, will not affect your credit score.

Hard inquiries on the other hand will affect your credit score. These could include applications for a new credit card, a mortgage, an auto loan, or some other form of new credit. Obviously, these applications are sometimes necessary, and the occasional hard inquiry is ok but having too many in a short period of time can affect your credit score.

Conclusion

Overall, having credit sources can sometimes be overwhelming, and credit scores can be a complicated matter. Credit is an important aspect of a Mortgage Application and following the tips above can help build your score, and overall credit profile so you are able to get the sharpest rates with prime lenders. At GLM Mortgage Group, we have the knowledge and resources to assist with credit and the way it impacts your application – so be sure to reach out with any questions. 

The post How To Improve Your Credit Score appeared first on GLM Mortgage Group.

To qualify for a CHIP Reverse Mortgage in Canada, the following factors are assessed: age of the homeowners, location of the home, type of home, appraised value of the home, condition of the home and the amount of home equity.  The funds from a CHIP Reverse Mortgage can be used for a variety of reasons – increase monthly cash flow, renovations, debt repayment, travel, or even early inheritance to loved ones. 

In a CHIP Reverse Mortgage, the homeowner is not required to make any monthly payments. However, interest is calculated on the proceeds received. Generally, the interest rates are slightly higher than a traditional mortgage. If no monthly payments are made, the interest accumulates on the loan balance so that the homeowner does not have to pay anything upfront. There are 2 ways that one can receive their funds in a CHIP Reverse Mortgage:  

1. Lump-sum: Receive the full amount directly into a bank account with a single deposit. 
2. Regular Deposits: scheduled deposits into a bank account as either monthly or quarterly payments to create a cash flow

When applying for a CHIP Reverse Mortgage, home equity is calculated by subtracting any outstanding secured debts from the value of the home. To be eligible, the CHIP Reverse Mortgage estimate must be greater than, or equal to any outstanding secured debts. Additionally, the property must be owner occupied at least 6 months of the year, and the appraised value of the home must be a minimum of $200,000. 

A CHIP Reverse Mortgage can be very positive if you need cash to meet your basic living expenses. A CHIP Reverse Mortgage is excellent because it will allow you to continue living in your home as long as you keep up with property taxes, maintenance, and insurance and don’t need to move into a nursing home or assisted living facility for more than a year. CHIP Reverse Mortgages are also not taxable and are just seen as a loan advance, so it does not contribute to your taxable income.

A CHIP Reverse Mortgage also has its cons. There can be slightly high-interest rates and loan fees. A CHIP Reverse Mortgage also means you likely will not be able to pass your home down to your heirs. Other options that you may want to consider are downsizing, selling your house to a family member, or perhaps bringing in a renter for one or more of your bedrooms. 

CHIP Reverse Mortgages can be outstanding for the long term with monthly payments, but if you are looking for a short-term financial fix, a CHIP Reverse Mortgage may not always be the best strategy. If you are interested in learning more about CHIP Reverse Mortgages and if they are suitable for you or someone close to you, please reach out to us, and we will be happy to help!

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We at GLM Mortgage Group | Dominion Lending Centres thought it would be great to outline all of the promises that Justin Trudeau made during his election. Although the Liberal Party won, other policies from other parties may take fruition, as a minority government must make some sacrifices based on their objectives to get enough votes to pass each bill. 

Below are all of the promises that the Liberal Party made during the 2021 election platform towards housing initiatives:

• Introduce First Home Savings Accounts for Canadians under 40 to save up to $40,000 towards their first house; deposits and withdrawals are tax-free

• Give $1 Billion in grants and loans to develop rent-to-own projects

• Add the option of a deferred mortgage loan to the First Time Home Buyer Incentive

• Reduce the price of home insurance by the Canada Mortgage and Housing Corp. by 25 percent; increase the mortgage insurance purchase maximum to $1.25 million and index to inflation

• Double the Home Buyers Tax Credit claim amount to $10,000.

• Spend $2 billion on indigenous housing 

• “Build preserve or repair” 1.4 million homes in four years by putting $4 billion in a Housing Accelerator Fund to support municipalities’ housing efforts; increasing the funding to the National Housing Co-investment fund to $2.7 billion over four years; and introducing a multigenerational Home Renovation tax credit for families adding secondary units for relatives.

• Introduce a Home Buyers’ Bill of Rights that will ban blind bidding, create a legal right to a home inspection and ban new foreign ownership of homes for two years.

• Have landlords report rent received before and after renovations and impose a surtax on “excessive” rent to stop renovations.

• Introduce a national tax of one percent annually on the value of non-resident, non-Canadian owner residential real estate that is vacant or underused

• Create an anti-flipping tax for residential properties sold less than 12 months after purchase

• Reallocate $300 million from the Rental Construction Financing Initiative to help convert excess commercial property to rental housing.

We will continue to update our social media platforms when changes and initiatives are brought in that affect our clients. 

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