Qualifying Rates
I have received many inquiries regarding the new High Ratio qualifying rate and new rental income requirements. To clarify the changes, I have outlined our new policies below:
Qualifying Rates:
- The 5 year Bank of Canada benchmark rate (currently 6.10%) is ONLY being used to qualify HIGH RATIO - 1, 3 & 5 year ARM and 1-4 year Fixed rate deals.
- HIGH RATIO - 5 year fixed rates are qualified on the contract rate (5 year fixed regular rate)
*Bank of Canada benchmark rate is valid from Monday - Sunday per week. If the benchmark rate is altered in the middle of the week, this new rate will not come into effect until the following Monday*
- Conventional qualification has NOT changed. Clients are still able to qualify conventionally using our 3 YEAR REGULAR rate currently at 3.85%.
Rental Income / Add backs:
- Purchase or Refinance of subject property - CMHC 50% add to income calculation can be used, based off lease agreement.
- Portfolio Rental income - CMHC calculation for Net Rental income / loss added to gross. Net rental income can be generated from T1Generals if properties have been held for over 2 years OR from lease agreements for rental properties owned for less than 2 years (calculation outlined below).
- Signed Leases LESS (Principal & Interest) LESS (Property Taxes) LESS (5% Maintenance) LESS (5% Vacancy) LESS (5% Management fees) LESS (5% Insurance) = NET RENTAL INCOME
Q and A
THE QUESTION: "What can be done if someone wants to buy a second home and not put 25% down?"
The answer is... "Qualified home buyers can purchase a second residence for as little as 5% down. This option applies whether it's a much needed vacation home, or property used for their children or elderly parents where no rental income is generated."
Have a great weekend and call me to discuss anything that might be on your mind!
Steven Faux, 1-866-993-8787
Housing Activity to Stabilize in 2010 and 2011
OTTAWA, May 19, 2010 - Housing starts rebounded in the second half of 2009 and early 2010 and will stabilize over the next two years, according to Canada Mortgage and Housing Corporation's (CMHC) second quarter Housing Market Outlook, Canada Edition.*
Following a total of 149,081 units in 2009, housing starts are expected to be in the range of 166,900 to 199,600 units in 2010, with a point forecast of 182,000 units. In 2011, housing starts will be in the range of 148,600 to 208,800 units, with a point forecast of 179,600 units.
"Canadian housing markets have recovered from the low levels posted in early 2009," said Bob Dugan, Chief Economist for CMHC. "Moving forward, housing starts will moderate as activity becomes more in-line with long term demographic fundamentals. New measures for government-backed mortgage insurance introduced by the Government of Canada that took effect on April 19, 2010 will continue to support the long-term stability of Canada's housing market."
Mr. Dugan also noted that the existing home market will move toward balanced conditions over the next two years as MLS sales ease and inventory levels increase. In late 2009 and early 2010, sales activity included some pent-up demand from early 2009. Once this demand is exhausted, and as mortgage rates gradually rise, the pace of activity in the resale market will ease. As a result, existing home sales will be in the range of 484,000 to 513,300 units in 2010, with a point forecast of 497,300 units, and then move slightly lower in 2011 to be in the range of 443,500 to 504,900 units, with a point forecast of 473,500 units.
With an improved balance between demand and supply, the average MLS price is expected to stabilize through the end of 2010 and then rise modestly in 2011.
As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions.
* The forecasts included in the Housing Market Outlook are based on information available as of April 23, 2010. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.
Information on this release:Charles Sauriol
CMHC
Media Relations
Steve's Rates
| Mortgage Term | Our Rates | Standard Rates |
|---|---|---|
| Variable Rate | 1.90% | 2.50% |
| 6 Month Closed | 4.60% | 6.65% |
| 1 Year Closed | 2.65% | 4.05% |
| 2 Year Closed | 3.30% | 4.35% |
| 3 Year Closed | 3.85% | 4.90% |
| 4 Year Closed | 4.29% | 5.73% |
| 5 Year Closed | 4.30% | 6.25% |
| 7 Year Closed | 4.95% | 7.00% |
| 10 Year Closed | 5.30% | 7.35% |
| 15 Year Closed | 8.99% | 0.00% |
| 18 Year Closed | 8.99% | 0.00% |
| 25 Year Closed | 9.05% | 0.00% |
Rates are subject to change with very little notice and certain conditions may apply to individual mortgage applications, QAC, E&OE
For the best rates call 1-866-993-8787.
Resources
Where Can You Find Me Now
I have been selected and recommended to the following Profesional Links: www.advisorslounge.ca, www.homesandlandbc.com, www.okanagannrg.ca.
Business Supporting Business — Thank You:
Investments
www.thenewwestside.ca
Insurance
Canyon Insurance covers all your needs, ask for Harry Mason
hmason@canyoninsurance.ca
FCm Travel Solutions
wes.flanagan@fcmtravel.ca
Private Home Sellers
www.privatehomesellers.ca
David Beeson
Realtor for the Kelowna Area
Royal Lepage Phone:1-800-747-6954
Email: davidbeeson@royallepage.com
Spring Creek CONSTRUCTION & MILLWORK
Established 2007 by Owner/Operator Florian Hoppen with 25 years in the woodworking industry.
Spring Creek offers quality custom craftsmanship and superior service on:
- Woodwork & Millwork
- Cabinetry Building & Installation
- Woodcraft Doors
- Renovations
- New Building Construction
References for Projects and Workmanship upon Request
Contact: Florian Hoppen
Ph: 403-931-2247 Cell: 403-510-8925
Email: springcreek@platinum.ca
Friends Supporting Friends — Thank You:
Krystal Beisick
www.krystalbeisick.com
For Investments check out — www.renascencedevelopments.com
Ask for Lisa Thomas lisa@renascencedevelopments.com
A Quote to Note:
"He didn't tell me how to live; he lived, and let me watch him do it."
- Clarence Budington Kelland
Also a member of the Okanagan Mortgage Lenders Association
Contact
At Prolink Mortgage Inc., I have over 30 lending financial mortgage institutions in Canada with Steve Faux sourcing the best rates and the best products to suit your needs!
Direct Line — 1.866.993.8787
Email — steve@yourmortgages.ca
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