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Stricter Mortgage Rules in January 2018

Home buyers in BC and across Canada should be aware of strict new mortgage qualification rules coming into force in January 2018. 

These new rules will require that all mortgages being taken out by home buyers must pass the same “stress-test” that was implemented this fall for high-ratio or insured mortgages (i.e. mortgages with a downpayment of 20% or less).

This “stress test” means that you will have to income-qualify at the Bank of Canada five-year posted interest rate, (currently 4.89%) which tends to be notably higher than the rate mortgage lenders are currently charging.

The Office of the Superintendent of Financial Institutions (OSFI), the federal agency in charge of maintaining the stability of the Canadian banking system, implemented these new rules to prevent consumers from taking on too much mortgage debt and to also protect them should interest rates go up. What the “stress-test” accomplishes is that it ensures homeowners can afford to pay their mortgage loans even if rates go up.

However, some lenders, such as provincial credit unions including Vancity, Coast Capital and Prospera, do not come under OSFI’s federal jurisdiction and therefore they are not obligated to implement these new mortgage rules.  Credit unions in BC are currently not required to “stress test” their mortgage applicants in the way federally regulated banks are.

How will this impact you if you are buying or selling your home in 2018?

For home buyers, the biggest effect will be on the amount of mortgage loan that the home buyer will be able to qualify for and obtain from their lender.  Mortgage professionals predict that this new policy will reduce Canadians’ home-purchasing power by around 20%, as the higher interest rate will reduce the maximum mortgage that buyers will be able to borrow. If you are selling your home, some analysts are predicting that it may cool housing prices, particularly in expensive housing markets such as Vancouver.

For more information on what this new stress-test will mean for you, take to your mortgage broker or lender.

The following are some articles regarding the new mortgage rules or stress-tests

http://www.rew.ca/news/new-mortgage-stress-test-for-all-will-do-more-harm-than-good-1.23061932

http://www.moneysense.ca/news/what-the-new-mortgage-rules-mean-for-homebuyers-in-2018/

http://www.cbc.ca/news/business/osfi-mortgage-rules-1.4358048

HPI Update for November

Combined with the expertise of your Bigtown REALTOR®, the MLS® Home Price Index (HPI) is a helpful tool to learn what’s happening in home prices to help buyers, sellers and investors make an informed decision. The MLS® HPI takes into consideration what averages and medians do not – items such as lot size, age, and number of rooms. These features become the composite of the ‘typical house’ in a given area. Click on the following links to find out the HPI for detached homes, townhomes and apartments for these, and many more, communities.

Greater Vancouver

Coquitlam

Port Coquitlam

Pitt Meadows

Burnaby North

Burnaby South

Burnaby East

Port Moody

North Vancouver

West Vancouver

All Areas

Home Price Index for October

Combined with the expertise of your Bigtown REALTOR®, the MLS® Home Price Index (HPI) is a helpful tool to learn what’s happening in home prices to help buyers, sellers and investors make an informed decision. The MLS® HPI takes into consideration what averages and medians do not – items such as lot size, age, and number of rooms. These features become the composite of the ‘typical house’ in a given area. Click on the following links to find out the HPI for detached homes, townhomes and apartments for these, and many more, communities.

Greater Vancouver

Coquitlam

Port Coquitlam

Pitt Meadows

Burnaby North

Burnaby South

Burnaby East

Port Moody

North Vancouver

West Vancouver

All Areas

BIGTOWN SUPPORTS THE REALTORS CARE® ANNUAL BLANKET DRIVE – November 14 – 21, 2017

SHARE THE WARMTH!

HELP THE HOMELESS AND POOR

The weather is getting colder and there are more people than ever who are homeless in Metro Vancouver.

You can make a difference.

Gather your donations of blankets, clothing and other warm and wooly items for the 23rd annual REALTORS Care® Blanket Drive – a partnership between the Real Estate Boards of Greater Vancouver, the Fraser Valley and Chilliwack and District and their member REALTORS ® . Since it started 23 years ago, the Blanket Drive has helped more than 300,000 people in our communities.

The Bigtown Real Estate Team is proud to support this year’s REALTORS Care® Blanket Drive.

We’ll gather your donation and make sure it is delivered to local charities, churches and other community organizations.

The following items are needed for all ages and sizes:

  • Gently used or new blankets or sleeping bags
  • Warm clothing, coats
  • Hats, gloves, scarves
  • New socks and underwear
  • Plastic ponchos, bivy sacks

If you have any items you would like to donate, please contact:
Mike Turner at 778-387-1556

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HOME PRICE UPDATE FOR SEPTEMBER

Combined with the expertise of your Bigtown REALTOR®, the MLS® Home Price Index (HPI) is a helpful tool to learn what’s happening in home prices to help buyers, sellers and investors make an informed decision. The MLS® HPI takes into consideration what averages and medians do not – items such as lot size, age, and number of rooms. These features become the composite of the ‘typical house’ in a given area. Click on the following links to find out the HPI for detached homes, townhomes and apartments for these, and many more, communities.

Lower Mainland

Vancouver

Coquitlam

Port Coquitlam

Pitt Meadows

Burnaby North

Burnaby South

Burnaby East

Port Moody

North Vancouver

West Vancouver

All Areas

BANK OF CANADA INCREASES ITS PRIME RATE – WHAT THIS MEANS TO HOME BUYERS, SELLERS AND OWNERS

The Bank of Canada raised its overnight rate to 1.0 percent on Wednesday, September 6, 2017, up 25 basis points from 0.75 percent in mid-July. The overnight rate serves as a benchmark that banks and other financial institutions use to set their own interest rates for products such as consumer loans and mortgages.

While this is still an extremely low rate, this is the third increase that the Bank of Canada has made this year and analysts are forecasting a further increase by the end of the year as Canada’s economy continues to grow more broadly and become self-sustaining. The next scheduled date for the Bank of Canada to announce its overnight rate target is October 25, 2017.

What does this mean for mortgage rates? 

Based on this increase from the Bank of Canada, The BC Real Estate Association (BCREA), upgraded its mortgage rate forecast stating, “…our projected rise in interest rates has occurred and accelerated.”  In its Mortgage Rate Forecast for September 2017, the BCREA forecasts that a 5-year fixed mortgage rate offered by lenders will increase to an average 3.15 percent over the fourth quarter, eventually rising to 3.44 percent by the end of 2018.

The posted 5-year qualifying rate is forecast to reach 5.14 percent by the end of 2018.

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DETACHED HOMES ARE STILL SOUGHT AFTER IN DESIRABLE NEIGHOURHOODS

“Homes that are sharply priced sell faster, and for more money, than do overpriced homes,” said Mike Turner, Senior REALTOR® with The Bigtown Real Estate Team.

This was evident through the recent experience that Bigtown had as the Seller’s Agent for 943 Rochester, a beautifully renovated 4 bedroom, 4 bathroom home, located in Central Coquiltam (bordering the popular Maillardiville neighourhood).

During the first week-end of Open Houses, there were more than 60 groups who came through to see the home which resulted in multiple offers.  The home was sold for its full list price of $1,698,000 in less than one week which tells us that there is still strong demand for single detached homes in desirable neighbourhoods in Metro Vancouver.

Correctly pricing your home for today’s real estate market is a key strategy for success.  The Bigtown Real Estate Team offers our own unique system to determine the right pricing range to sell your home for the highest price based on current market conditions.

For your free home evaluation, click here or contact us at (604) 220.7358.

 

BANK OF CANADA INCREASES ITS PRIME RATE – WHAT THIS MEANS TO HOME BUYERS, SELLERS AND OWNERS

The Bank of Canada raised its overnight rate to 1.0 percent on Wednesday, September 6, 2017, up 25 basis points from 0.75 percent in mid-July. The overnight rate serves as a benchmark that banks and other financial institutions use to set their own interest rates for products such as consumer loans and mortgages.

While this is still an extremely low rate, this is the third increase that the Bank of Canada has made this year and analysts are forecasting a further increase by the end of the year as Canada’s economy continues to grow more broadly and become self-sustaining. The next scheduled date for the Bank of Canada to announce its overnight rate target is October 25, 2017.

Source: BCREA Mortgage Rate Forecast,     Third Quarter Report (September 2017)

What does this mean for mortgage rates? 

Based on this increase from the Bank of Canada, The BC Real Estate Association (BCREA), upgraded its mortgage rate forecast stating, “…our projected rise in interest rates has occurred and accelerated.”  In its Mortgage Rate Forecast for September 2017, the BCREA forecasts that a 5-year fixed mortgage rate offered by lenders will increase to an average 3.15 percent over the fourth quarter, eventually rising to 3.44 percent by the end of 2018.

The posted 5-year qualifying rate is forecast to reach 5.14 percent by the end of 2018.

 

Continue reading

Home Price Update For August

Combined with the expertise of your Bigtown REALTOR®, the MLS® Home Price Index (HPI) is a helpful tool to learn what’s happening in home prices to help buyers, sellers and investors make an informed decision. The MLS® HPI takes into consideration what averages and medians do not – items such as lot size, age, and number of rooms. These features become the composite of the ‘typical house’ in a given area.

Click on the following links to find out the HPI for detached homes, townhomes and apartments for these, and many more, communities. Continue reading