New mortgage rules to take effect April 19

On February 16, Finance Minister Jim Flaherty announced new mortgage rules intended to help ensure homebuyers can handle their debt load when interest rates rise, as well as to slow down real estate speculation. 

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one.  Our government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," commented Minister Flaherty.

The new rules take effect April 19, 2010.  Here is a quick look at the changes, which apply to government-backed insured mortgages: 

1. Borrowers must now qualify based on a five-year fixed rate even if they choose a mortgage with a lower interest rate and shorter term.  The government’s rationale for this change is that it will help borrowers prepare for higher rates, although it may squeeze the purchasing power of home buyers.  It remains unclear whether borrowers must qualify at the five-year posted rate or the five-year discounted rate. 

2. The maximum amount Canadians can withdraw in refinancing their mortgages will be reduced to 90 per cent of the value of their homes, instead of 95 per cent.  The government’s rationale for this change is that it will help ensure home ownership is a more effective way to save.  The impact of this change is expected to be minimal as relatively few homeowners withdraw equity from their homes to this extent. 

3. A minimum down payment of 20 per cent will be needed for government-backed mortgage insurance on non-owner-occupied properties “purchased for speculation,” which realistically means rental properties.   While this measure is intended to hamper the speculative buying of properties by reducing the leverage of buyers, it will also impact those buying real estate for general investment purposes.

 

Buying a Scarborough Home - Your Home Buying Action Plan

 

An Explanation of the Home Buying Process

I will not take it for granted that you know all the ins and outs of the home buying process. Instead, I'll provide you with a full explanation of what to expect. That's important so you're not faced with any surprises along the way. 

Home Buyer Consultation and Home Buying Action Plan

I believe that it's in your best interests to meet with me prior to looking at homes. I will complete a Home Buyer Consultation with you and together we will prepare your personal Home Buying Action Plan. This initial consultation normally will take one to two hours of your time. 

An Assessment of Your Needs

One of the first questions I'll ask is, "Why are you moving"? I'll ask you about your plans, where you see yourself living and working in one year, five years and farther into the future. I'll also explore any time constraints you might have, such as the the need to relocate for employment, your financial situation and other plans or circumstances that will affect your home buying decisions.

An Action Plan to Find Your Dream Home

I'll help you identify what you want in your new home. A pool? A garage? An extra room? A particular building design? What about the neighbourhood? Proximity to schools or work? We will compare your needs, wants and budget with what is available on the market and then I'll make recommendations that save you time and effort. At the end of our consultation, we will have an Action Plan to Find Your Next Home.

Home Viewings

I'll accompany you as you view houses and help you assess their suitability and price. As an expert on property, I can provide facts on the neighbourhoods, the cost of heating, the condition of the furnace, and so on. In other words, I will work with you to achieve your dream.

Access to MLS Listings of Properties for Sale

The Toronto Multiple Listing Service or MLS is an exclusive service accessible only through a REALTOR and it can be a valuable tool. Through MLS, the details of a wide variety of listed properties are made available. That can save you a tremendous amount of time and effort in your hunt for the right home.

If you want to search real estate listings, please visit my Scarborough and East-end Toronto Real Estate Listings page, to preview properties for sale.

Knowledge of Financing Options

I have extensive knowledge of the financing options available to home buyers and investors and the options for obtaining financing at the most attractive prevailing rates and terms. I work with a number of reputable mortgage providers, and will be pleased to refer you. Even if you have a long relationship with your bank or financial institution, it can be worthwhile to get a "second opinion". You may find that you can save a great deal of money, or just be reassured that your bank is providing the best value and service.

A Skilled Negotiator

REALTORS are experienced in arranging fair deals. I will assist in negotiating an offer, acting as a mediator to head off potential conflicts between you and the seller, and draw up a legally binding agreement.

Honesty and Integrity

Most Ontario real estate professionals  are members of the Ontario Real Estate Association (OREA) and only members of OREA can call themselves REALTORS.

When you work with a REALTOR, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics. That code is very important to you because it assures you will receive the highest level of service, honesty and integrity.

Highest Professional Standards

Before receiving a real estate license, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council Ontario.That is only the beginning: in the first two years of practice, licensees are required to successfully complete three additional courses as part of their articling with an experienced broker. In addition, all licensees must continue to attend courses throughout their careers in order to maintain their licence.

 

Get a Home Buying Action Plan - No Cost, No Obligation

If you are interested in buying a home in Scarborough, or anywhere in the Greater Toronto Area, fill out the form below or call me. I am very happy to answer any questions you might have. I would be pleased to meet with you to prepare your personal Home Buying Action Plan. This is a free service and there is no obligation of any kind.