How to Purchase A Pre-Sale Condo

Pre-sale condo are brought to the market by a developer before the units are completely built. Buyers can choose to put money down on presales and own the rights to a future home. Buyers still pay the full price, but until the property is complete, the buyer won’t need to take out a mortgage.

The most frequently asked questions about pre-sale condos surround the topic of deposits. When purchasing a pre-sale condo, the first step is to make your deposit on the property. Typically, there is a small initial deposit due at the time of offer, followed by a 5% to 10% deposit on the agreed purchase price. From here, pre-sale condo deposits are scheduled to be made over a specified period, with more large payments being due between your first payment and the date of completion.

Let’s look at a hypothetical deposit schedule for presale condos. Every Pre-Sale Condo contract is different, so this is just an example of a deposit schedule.

-June 1, 2021: You find the perfect pre-sale condo and put down $10,000 upon writing your offer.

-June 8, 2021: After a 7-day rescission period, the remaining 10% of the purchase price is due.

-June 1, 2022: An additional 5% of the purchase price is due.

-December 1, 2022: An additional 5% of the purchase price is due.

At this point, you’ll have a 20% down payment made on the purchase price of your pre-sale condo, which is relatively common in today’s market. Once the building is complete, you’ll be ready to secure a mortgage and move into your new home. Deposits are held in a trust account, and developers won’t gain access to the funds until construction is complete.

While you’ll need pre-approval if you’re buying a pre-sale condo, you won’t need to secure or start paying a mortgage until your property is fully built, with your mortgage loan payments beginning upon final closing. This is when the building is officially registered with your city and when you get the title to your condo.

When it comes to interest rates, you can likely lock in a rate if you’re purchasing a pre-sale condo that will be completed in less than two years. Speak to your bank or mortgage broker and request a commitment letter to lock in rates if you’re trying to secure a mortgage at today’s rates.

Interest in presale properties is high in many major Canadian cities. Many homeowners are interested in selling in a few years but are interested in investing in a property today. Prebuilds also offer the opportunity for new homebuyers to leverage their initial deposit, which has proven to be highly profitable for many investors in the past. These investment opportunities, mixed with the ease of living that comes from moving into a brand-new condo and extended warranty insurance, make presale condos a desirable option for many homebuyers.

The most considerable risk of buying a pre-sale condo is simple: you don’t know what the market is going to look like when your condo is completed. Of course, not knowing what the market is going to do is a risk associated with any investment. If you’re financially prepared for worst-case scenarios and do your research on the area, market, and developer you’re working with, there’s a good chance that the potential benefits of purchasing a prebuild condo outweigh the potential pitfalls.

It is VERY important to have a clear understanding of the implications that may happen if you decide to Purchase a Pre-Sale Condo, and how it can affect you. It makes all the difference in future planning and can impact you in very significant ways.  If you would like to learn more about Pre-Sale Condos and more popular topics, please visit our website or reach out.

At GLM Mortgage Group, we know what questions to ask. We have relationships with the lenders that you know about and the lenders you don’t. We would be pleased to educate you on the financial options available to you. We want you to make the best decision possible on the mortgage that you are committing to. Call us anytime for a FREE consultation on the mortgage products available to you.

Source: https://www.rew.ca/news/how-to-buy-a-presale-condo-mortgages-deposits-and-developers-explained

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Rent to Own Mortgage

A Rent to Own contract could be the answer for someone who is renting but is also having a hard time getting their down payment together. Rent to Own contracts usually are between 1 and 5 years long and can give the client the time they need to implement strategies on increasing their down payment or even improving their credit.  As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with understanding Rent to Own Mortgages.

In the Lower Mainland, Rent to Own is becoming more popular as housing prices are increasing, and renting seems inevitable. In fact, there are properties that are being built with Rent to Own financing in mind.

Initially, the contract is signed just between the renter (the buyer) and the Landlord (the seller) that states an agreed price, length of time of Rent to Own, and market rent (typical rent of a similar property) with the excess going toward down payment (usually $200 – $400/month). The lender is not involved yet.

For example, market rent for your property goes for around $1000.00. You agree to pay the Landlord $1400.00/month. The extra $400/month goes into an account that the Landlord has in place for you for the down payment. This is a great example of  a Rent to Own situation.

Regardless of the lender, the Landlord must keep pristine records of the extra money coming in and can show the history of any excess deposit. When the Rent to Own is registered on title, there will be a clear indication as to how much of the monthly payments are directed toward the deposit.

The client will want to work with a team of property purchase professionals that will strategize Action Steps to make a seamless Rent to Own experience. The client`s team would be:

1. MORTGAGE PROFESSIONAL

• Get pre-approved! In the pre-approval process, the Mortgage Professional will be able to advise on improving credit or the need to increase employment income if need be.
• As well, the Mortgage Professional understands lender policies and guidelines for Rent to Own contracts and will be able to advise on how to properly set up the Rent to Own.

2. SOLICITOR/LAWYER

• Make sure that your lawyer is familiar with Rent to Own contracts and that they work closely with the Mortgage Professional who knows what the lender is going to expect. This relationship is very important and one that should not be overlooked.

The down payment continues to grow over the life of the Rent to Own contract. At any time, you can add lump payments to the down payment, simply by giving the Landlord a bigger rent check. Keep in mind, the Rent to Own contract could stipulate that the down payment is non-refundable. Make sure you read the fine print and work closely with your mortgage professional and lawyer so that you clearly understand the terms of your Rent to Own contract.

The bank does not get involved until the time the renter (the buyer) makes an offer to purchase to the Landlord (the seller). The person paying for the rent to own does not have to qualify for a mortgage at this point because the Landlord continues to carry the mortgage on the property.

Rent to Own Properties can also be facilitated through a company such as a condominium developer. For example, the developer could offer a Rent to Own contract when entering a rental lease with an owner-occupied property that the client wants to rent.

The client may be charged a contract fee upfront (for example $10,000) to enter the Rent to Own contract. At times all or a portion of this contract fee can be used toward the down payment pending on what has been negotiated within the Rent to Own contract.

Over the course of the Rent to Own some of the obstacles to financing you will consider are:

• How to improve your credit rating
• Consider applying for an RRSP loan to further establish credit and take advantage of tax benefits
• Consider refinancing any outstanding credit
• Consider job changes to increase employment income
• Consider other sources to increase down payment

Rent To Own contracts are more than just paying rent to the Landlord and applying the rent toward the purchase of the property. There are details that you need to know when entering into a Rent To Own Contract. If you need help setting up a Rent to Own contract or for more information regarding this topic please reach out.

GLM Mortgage | Dominion Lending Centres is here to walk your mortgage planning path with you. Give us a call at 604-259-1486 and find out what your mortgage options are!

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Mortgaging a Property via Assignment

Mortgaging a property via assignment is a contract provision included in some real estate transactions that allow the buyer to resell or transfer a property to another buyer before the deal’s closing date. As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with understanding Mortgaging a Property Via Assignment.

This product was originally intended to give buyers a legal way of backing out of a purchase if for some reason their circumstances changed after they had put an offer on a property, instead of having to surrender their deposit. The clause was also meant to protect sellers, ensuring a sale would still go forward if another buyer could be found.

To qualify for a product like an Assigned Mortgage, there are some things you will want to first consider:

• Not all lenders offer to finance for Assignment Purchases
• Assignment Purchase products will contain the same features and conditions that you would expect of a traditional standard mortgage qualification
  • This means income and credit score requirements remain the same
• There will likely be additional documentation that will be required
  • Pertaining to the Purchase Contract and Contract of Assignment
• Some lenders will only finance on the original purchase price

The assignment clause allows real estate agents to sell a contract for a single property multiple times at increasingly higher prices as they make a commission on each transfer. Buyers in the middle also benefit by pocketing the difference between what they paid and the resale value. They also don’t pay any land-transfer taxes because the entire transaction happens before the deal officially closes, so the property is never technically in their possession.

The original seller receives less than what the property ends up being worth and the last buyer may be paying an inflated price, with the difference in value going to the real estate agent and the buyers in the middle.

The option of an Assigned Mortgage can be appealing to borrowers for a few different reasons:

1. Depending on how far along the process is, you could possibly be involved in choosing finishes of the property
2. Depending on your local market, you could score a good deal on an assignable property

The risk to individuals and developers, regardless of incorporation or not, is that the CRA is aggressive on assignments and will often investigate GST compliance long after the transaction has occurred. This leaves the taxpayer at high risk with a large tax liability if the sale of an assignment fee was not properly documented for GST purposes. As always, remember to consult a qualified tax professional with regards to your potential exposure and ensure that GST is reported correctly along the sequence of transactions.

Let’s look at this case study on Mortgaging a Property via Assignment together…

A real estate agent’s client reaches a deal to sell a property to an initial buyer for $1 million. The agent then takes that contract and resells it to a second buyer for $1.5 million. The agent in turn goes to a third and final buyer and sells the contract for $1.8 million.

For each transaction, the agent receives a commission. The initial seller receives $1 million minus the agent’s commission. The first buyer who bought the contract for the property for $1 million and sold it for $1.5 million pockets $500,000. The second buyer who bought the contract for $1.5 million and sold it for $1.8 million gets $300,000. The third buyer pays the land-transfer tax on the $1.8 million purchase price.

For any issues with Mortgaging a Property via Assignment please reach out and one of our Senior Broker Partners would be more than happy to assess your unique situation and give you the best advice.

At GLM Mortgage Group, we are with our clients for the entire journey. From the beginning, we can identify client needs, any possible roadblocks, and give a variety of tailored solutions.

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Bridge Financing

Bridge Financing, also commonly referred to as a “Bridge Loan”, is a way to help literally bridge the gap between closing on your current house and your new place. This product allows you to carry the mortgage on two properties for a specified amount of time and for typically a maximum of 90 days. As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with understanding Bridge Financing.

How does Bridge financing work? These short-term loan products use your current home’s equity to cover some of the costs of your new home (for example, could be used for a down payment.) That way, you don’t have to miss out on your dream home while waiting on the cash from the sale of your current house.

What is the cost of Bridge Financing? You will be charged an interest rate on the amount of funds you are borrowing. This will be based on the lender’s prime rate and will vary. You can expect to pay prime plus 2-5%. You can also plan to pay an administrative fee. This will vary pending on the lender and can range from $200-$695.

Similar to most other financial decisions, there will always be advantages and disadvantages for Bridge financing. Here are a few things you should be aware of:

One of the most popular advantages of acquiring Bridge financing is financial flexibility. With this product, you will be able to use the equity you’ve built in your current home to secure the new purchase of your dream home. Since you will be able to access those funds via equity, you won’t have to stress about the sale closing of your current home before you close on your new home.

Although most terms for Bridge financing products are short, the interest rate will be similar to open rate mortgages, which are often higher than the interest rate you may have locked in with your current mortgage. If for some reason your sale agreement falls through on your current house, you may have to make up for the payments until a new sale is finalized.

To qualify for Bridge financing you will need:

• Have a current mortgage in good standing with equity
• A copy of the Sale Agreement for the home you’re selling
• A copy of the Purchase Agreement for the home you’re buying
• Valid pre-approval (with document review) with the lender of your choice

Like your home buying situation, your home financing needs are unique. Bridge financing may be the right solution for you if you would like the following…

• You’ve found your dream property and do not want to wait on submitting your offer
• You can’t afford a down payment without the money from your current home’s equity
• You want time between closing dates

If you’re a homeowner aged 55 and over, rather than taking out a regular Bridge loan, you could take out a CHIP Open Mortgage with HomeEquity Bank. The CHIP Open Mortgage can assist you in purchasing a new home when your existing property has not yet been sold.

Let’s have a look at this case study together…

• Meet the Ellis family, a couple in their early 70s who live in the Greater Vancouver Area in a home worth $1.3 million. Looking to downsize, they’re keeping an eagle eye on available properties on Vancouver Island, and finally find their dream home at a price tag of $550,000. Afraid to lose it, they act quickly to purchase the new place before selling their existing home — but don’t qualify for a large enough traditional loan, putting the dream they have for their future in jeopardy.
• This product is a CHIP Open Mortgage (A Reverse Mortgage with no pre-payment penalties) The couple was able to access $600,000, allowing them to purchase their new place outright and cover the costs of their move. With no repayments, the couple were able to properly prepare their home for sale and repaid the CHIP Open in full once the house sold.

Please reach out and one of our Senior Broker Partners would be more than happy to assess your unique situation and give you the best advice. At GLM Mortgage Group, we are with our clients for the entire journey. From the beginning, we can identify client needs, any possible roadblocks, and give a variety of tailored solutions.

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How Mortgage Rates Work

The topic of how Mortgage Rates work is a long, complicated series of moving puzzle pieces that work together perfectly. Today we are going to break it down as best we can. During the process of taking out your first mortgage, you will learn that the interest rate is the “payable fee” your lender has calculated for you in exchange for borrowing their money.

As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with understanding How Mortgage Rates Work.

When applying for a mortgage, the lender you decide to choose may offer various interest rate options. Mortgage rates are constantly changing due to the Canadian economy (Fixed rates) and Global economy (Variable rates). Each time you renew your mortgage term, you re-negotiate your mortgage interest rate… Simply, this means at the time of term renewal, your new mortgage interest rate may cause your monthly payments to increase or decrease.

The lender of your choice will set the interest rate for your mortgage.

Here are a few of the factors that they use to help determine your cost:

• The length of your mortgage term (higher length in the term usually have higher rates)
• Their current Prime and Posted Interest Rate
• If you qualify for a discounted rate
• Type of interest you choose (fixed, variable, or combination)
• Your credit history
• If you’re Self Employed/ Employee

For example, with credit, lenders will assess your bureau report to decide if they will lend you money. They will also use this document to determine how much interest they will charge on the money you will agree to borrow. The better your credit is, the easier it will be for you to get a mortgage. Even if you have poor or little to no credit history, there will always be options like B lenders and private lenders depending on your specific file details.

On the topic of Mortgage Rates, you will very commonly hear three words: Prime, Posted, and Discounted Rates. These are all different. To put it simply, a Prime Rate is the rate the lenders use to determine their posted interest rate. A Posted Rate is the interest rate that the lenders advertise for their products (these can change regularly).

A Discounted Rate is lower than the lender’s Posted Rates. Along with those keywords, there are two more words you will need to know about. These important terms are called Fixed and Variable Interest Rates. A Fixed interest rate will stay the same for the length of your term.

Fixed Mortgage Rates will work the best for you if you need the following:

• Your payments stay the same over the term of your mortgage
• You want to know in advance how much principal you’ll pay by the end of the term
• Keep your interest rate the same because you think market interest rates will go up

A Variable Mortgage Rate can increase and decrease during the length of your term. This means that when you choose a Variable Rate Mortgage, your interest rate may be lower than if you selected a Fixed rate.

This type of Mortgage Rates may be best for you if you can accommodate the following:

• Your interest rate changing
• Your monthly mortgage payments potentially increasing or decreasing

In a Variable Rate Mortgage (commonly referred to as AVRM) the interest rate can go up, meaning more of your monthly payment goes towards the interest and less to the principal. If rates go down, more of your payment goes to the principal, which means you can pay the mortgage off faster.

The best advice on Mortgage Rates is the advice that comes from your Mortgage Broker because they can analyze your needs and start underwriting your information. With their expert advice, together you can create a perfectly “tailored-to-you” plan.

If any of the topics mentioned on Mortgage Rates sound like something you may be interested in, please reach out and one of our Senior Broker Partners would be more than happy to assess your unique situation and give you the best advice. At GLM Mortgage Group, we are with our clients for the entire journey. From the beginning, we can identify client needs, any possible roadblocks, and give a variety of tailored solutions.

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Increasing Your Purchase Power

Most individuals that we connect with to discuss a Mortgage Pre-Approval also want to know how we can go about Increasing Your Purchase Power. More often than not, those individuals could afford to make mortgage payments. Usually, they already pay monthly rent in the same amount as a mortgage, or perhaps even more! As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with your Purchasing journey.

Part of our process as Mortgage Brokers at GLM Mortgage Group is to connect with new clients with a Discovery Call, which involves key questions on important factors of a Mortgage Approval. We spend 10 minutes gathering information on income, credit, and down payment and with that, can provide a possible purchase price, and a piece of mind to shop within one’s budget.

Sometimes at the end of the conversation, we find that an individual may not be able to purchase within the price range they had planned to and brings us back to the drawing board to discuss options and a gameplan for the Increasing Your Purchase Power in the future.

Now, the reason that someone may not qualify for a mortgage that they could afford payments on, is due to the Stress Test, which newest rules were released in June 2021 and decreased borrowing power by 25%. To pass the mortgage Stress Test, you need to qualify at the contract mortgage rate plus 2% or the benchmark rate of 5.25%, whichever is higher. The purpose of the Stress Test is to ensure that should interest rates rise – a borrower will still be able to afford their mortgage payment.

This is a tactic by the Bank of Canada to ensure that consumers can withstand rising interest rates, as well as tackle household debt issues in Canada by preventing consumers from getting into further debt – but it greatly affects your purchase power, as you will qualify for less.

There are a few options to consider, that can help Increasing Your Purchase Power, potentially bypass the Stress Test and qualify for the purchase you are hoping to make.

First, down payment – if you have 20% down payment, this can provide various options that will allow you bypass the Stress Test, which will increase purchase power. Local credit unions are provincially regulated and therefore can allow you to bypass the Stress Test, although this comes with a slight rate premium. Secondly, having a 20% down payment can also make Alternative Lending an option – but be sure you understand this, as it may be easier to qualify, but these interest rates will be higher and could cost you more in the long run.

Nonetheless, with a 20% down payment – there are two viable options to Increasing Your Purchase Power in the Pre-Approval stage.

Further advice that we share with new clients, when we find they may not qualify for what they hoped is bringing a Co-signor to the mortgage. This could be a friend or family member that will be on the mortgage with you, and on the title of the property as little as 1%. We would be able to factor their income, assets, and debts into the equation to increase the purchase power. The primary borrower is still responsible for making mortgage payments, but the co-signor is there as a back up, and is required to make payments should the primary borrower default.

Another solution to Increasing Your Purchase Power is to increase the down payment.

This could mean putting your plans to purchase on hold for another 12 months while you continue to save, perhaps withdrawing RRSP or other Investments or even a gift from a family member may be possible. Given the current market conditions, we are seeing family members offer financial aid to their kids and grandkids to make home ownership possible for them.

Lastly, to help with Increasing Your Purchase Power, you can INcrease household income and DEcrease household debt. Although these options have a positive effect on purchase power, it takes time to see these effects take place. Perhaps obtaining a second part time job is possible, to increase income – but keep in mind, lenders will want to see this sustained for 2 years to consider the income. Also, decreasing debt will increase purchase power significantly.

For every $14,000 of debt that we carry, or $400/month payment, our borrowing power is decreased by $100,000. If you have a significant down payment, it’s always more advantageous for qualifying, to use a portion to pay down debts. It’s important to understand tips like this as they will contribute to Increasing Your Purchase Power.

At GLM Mortgage Group, we are with our clients for the entire journey. From the Discovery Call, we can identify client needs, any possible roadblocks, and a variety of solutions. Our brokers know how to Increasing Your Purchase Power and know how to assess your unique situation, giving the right advice so you can best move forward in your plans to purchase a home.

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That’s stat #1 and #2 for you, but stat #3 is that the condo/apartment benchmark price is at an all-time high sitting at $659,000. This price point is only attainable for people who earn at least $93,527 annually (that puts them in the upper 25% of income earners in the city).

We know those stats can seem daunting—and they are! But we do want to offer some help and solutions for young families looking to get into the market.

1. Take a step outside of the downtown core. Typically, property right in the heart of downtown Vancouver is more expensive due to the location and the continued demand. Stepping out to one of the outlying suburban areas can offer more affordable options and can also lend you with an increased inventory of properties within your price point.
2. Consider finding a Rent to Own Property. A Rent to Own (RTO) property can allow you to rent a property while subsequently saving up for a down payment. To read more about these unique property types, click here.
3. Talk to a mortgage broker. Speaking with a broker and going through a pre-qualification process can help you by allowing you to see the areas in which you will need to improve to help make you more attractive to lenders. This can include things such as:
   1. Increasing your credit score
   2. Decreasing your overall debt or consolidating your current debt.
   3. Looking at increasing your overall income options and the ways in which you can do that.
4. Consider using a co-signor(s) for your mortgage to start with. One solution we have found that works well for certain clients is having a co-signor(s) on the mortgage with a planned exit strategy to remove them once the client’s personal income increases or they are able to qualify for the mortgage on your own (ex. By paying down debts and/or improving their credit score). This solution is situation specific, so speak to your broker for more details.
5. Save, Save, and Save some more. We know this is common sense but speaking with a financial advisor can help show you ways in which you can save and make your money work for you. We can happily recommend a few as can your mortgage broker.

We know that the state of Vancouver (and Fraser Valley) real estate can seem overwhelming and depressing at times. Keep in mind though that not all hope is lost, and you do have options available to you! Remember the “dream” of the white picket fence detached home is not for everyone…now more than ever multi-family properties such as townhouses and condos are offering more and more amenities and beautiful properties for less. The bottom line is considering all your options and work with a dedicated broker who can help you reach your goals—whatever they might be!

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1. A SECOND MORTGAGE IS BASED ON THE EQUITY IN YOUR HOME

The total loan amount that the second mortgage lender will offer you will depend on the equity that has been built up in your home. Second mortgages allow you to access up to 95% of the equity you have in your property. For instance:

• House Value                                                $850,000
• 95% LTV (maximum mortgage amount) $807,500.00
• First Mortgage                                           $550,000.00
• Amount Available Through Second          $257,500.00

2. INTEREST RATES WILL VARY AND BE HIGHER THAN YOUR FIRST MORTGAGE

This is because when a lender agrees to a second mortgage, they are taking a higher risk as he gets second priority in case of default. With that being said, we have options and solutions such as working with private lenders that can help you obtain a reduced rate and the right product for your mortgage situation. Typically, you can expect an interest rate of 6.95%-19.95% with lender and broker fees included.
 

3. YOUR PAYMENT CAN BE AS LOW AS INTEREST ONLY PAYMENTS

One of the advantages of selecting to use a second mortgage is the fact that the payments are attractive. You can pay interest only payments or you can also select to pay the interest plus the principle loan amount. You can work with your mortgage broker to discuss options and what would work best with your situation.
 

4. THERE ARE ADDITIONAL FEES TO CONSIDER

Since we want to have you understand ALL the fees associated, it is important to know that setting up a second mortgage will require you to pay: *note dollar amounts are approximations

• An appraisal fee to assess the value of your home: $300
• Legal fees to set it up: $2,000
• Lenders & Broker fees: 1-5%

 
Second mortgages are a great option for many and may be a better solution than a refinance or a Home Equity Loan (HELOC). If you are interested in learning more or want to find out if a second mortgage is right for you, talk to your broker. We can guarantee they can guide you the process from start to finish!
 

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Vancouver’s Red Hot Real Estate Market has become a news sensation. It’s in the headlines. It’s on TV. It’s in every other social media post you scroll through in your feed. But the question remains—what is actually happening in the market?

Well, we have broken it down into simple answers so you’ll know what is happening in Vancouver Real Estate. With help from one of the top realtors in BC, Alistair Young of Young Real Estate Group, we have the answers you have been looking for.

1. What is the market doing right now?

According to recent statistics, the market has begun to increase and “heat up” again. This is not uncommon for springtime, as a number of factors contribute to increased sales.
“In the spring we typically begin to see the market’s inventory become more saturated, an increase in buyers and a sense of urgency to buy.” – Alistair

With March came an influx of homes for sale and an increase in demand. This lead to the prices going up – and currently staying up – as inventory is limited.

2. What about government regulations?

As many of you are aware, the government has issued a series of regulations in an effort to cool the market. This included the Foreign Home Buyers Tax, the Stress Testing Measures implemented last fall and the most recent one being the Empty Home tax.

The one that has gotten the most press is the Foreign Home Buyers tax.

In recent months reports indicated that the interest of foreign buyers appears to be levelling off, as they accounted for  little more than three per cent of both the value and number of all transactions, according to the most recent property transfer tax data.

We asked Alistair his opinion on this tax:

“It is still unclear the final effects of the tax and how the recent announcement of the exemption from the tax for those with work permits will continue to impact the market. Time will tell if the tax has served its purpose. But there was a definite decrease in the interest in foreign home buyers.”

This leaves the problem of the amount of empty homes that surrounds the Vancouver area.

Enter the Empty Home Tax. This is a new initiative the government is rolling out over the next several months. This tax applies to homes that are not occupied by a tenant for at least 180 days during the year.  The tax amount is a 1% increase in property taxes, which at first may not seem like much but considering how much taxes went up this past year the 1% increase is substantial. This comes into full effect as of July 1 meaning that all empty properties must be occupied before that date to be exempt.

3. How to afford a house in this crazy market?

This is the question first time home buyers are asking all across Vancouver and the Fraser Valley. The answer is not a simple one, but there are solutions.

The first is to work with a dedicated mortgage broker. They can help you put together a strategy for saving for a down payment, fixing your credit, and offer unique solutions to fit your situation. They also have access to an array of different lenders, allowing them to get you the best rate possible for your unique financial situation. Talking to them early and talking to them often can help tremendously during the process of house hunting.

The second is to consider purchasing a property with a rental unit. The rental market in Vancouver and the surrounding areas has skyrocketed in the past few months, opening the door to a potential opportunity for homeowners. Having a tenant can help ease the burden of a larger mortgage by bringing in additional income.

Finally, working with a realtor you trust can make a difference. Having a realtor who knows the area you want to live in, knows the market, and knows your budget is crucial. They can direct you to the best locations to suit your needs and find you cost-effective solutions to help you get into your dream home.

As Alistair says “For many a home is the biggest purchase they will make in their lifetime—partnering with a realtor who understand that and can help you plan not just for today, but for the future can make all the difference.”

Markets have peaks and valleys. Currently we are in more of a peak stage, but how long will that last? J Continue to stay educated, stay informed and make decisions that will work for your future—not just for the here and now. Build a dedicated team around you to help you through this entire process, and despite the curveballs the market may throw at you, you will be set to succeed.

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