# Pinsky Mortgages > Getting You The Best Mortgage With The Least Amount Of Stress, Period. - Pinsky Mortgages ### How HELOC Loans Can Transform Your Finances: Case Studies from Vancouver Homeowners In today's economic climate, Vancouver homeowners are increasingly turning to Home Equity Line of Credit (HELOC) loans to manage finances creatively. But how exactly can a HELOC change your financial landscape? This post dives into real-world applications, drawing from our experiences at Pinsky Mortgages to show how this tool empowers clients like you. Understanding HELOC in the Context of Vancouver's Market Vancouver's real estate market is dynamic, with property values influenced by factors like urban development and economic policies. A HELOC taps into this equity, providing a safety net or growth opportunity. Unlike fixed loans, its revolving nature suits the city's fast-paced lifestyle. At Pinsky Mortgages, we've seen HELOCs used innovatively since our founding in 2013. Our unbiased approach ensures clients get the best from multiple lenders. Case Study 1: Debt Consolidation for a Self-Employed Professional Meet a hypothetical self-employed Vancouverite (based on aggregated client stories) struggling with high-interest credit card debt from business expenses. By securing a HELOC, they consolidated debts at a lower rate, reducing monthly payments by 30%. Key steps we facilitated: Assessed equity via appraisal. Compared lender offers for prime +0.5% rates. Created a Mortgage Strategy Guide with aggressive payoff plans. This aligns with our non-traditional lending expertise: Non-Traditional Lending. Result: Freed-up cash flow for business growth, with the client noting, "Pinsky Mortgages made the process stress-free and saved us significantly." Case Study 2: Funding Home Renovations for Family Expansion Another common scenario: A family needing to renovate for a growing household. Using a HELOC for purchase plus renovations, they accessed funds incrementally, paying interest only on drawn amounts. Benefits included: Avoiding full refinance fees. Leveraging Vancouver's GST relief on renos. Protecting against rate hikes with our conservative strategies. We link this to our specialized service: Purchase Plus Renovations. The outcome? A value-boosted home, with the client praising our "personalized service and great rates." Case Study 3: Investment Opportunities for Savvy Investors Investors use HELOCs to fund down payments on rental properties, capitalizing on BC's rental market. One client drew on their primary home's equity to buy an investment property, generating passive income. Our role: Ensured compliance with investment mortgage rules. Provided annual reviews to adjust strategies. Explore more on our investment properties page: Investment Properties. Comparing HELOC to Alternatives in BC ScenarioHELOC AdvantageAlternativeWhy HELOC WinsDebt ConsolidationLower rates, flexible drawPersonal LoanSecured, cheaperRenovationsPay as you goCash-Out RefinanceNo full resetInvestmentsReusable lineHE LoanRevolving access For broader services, visit Our Services. Navigating HELOC Challenges in Current Economy With Bank of Canada rates fluctuating, as detailed in their recent reports (Bank of Canada), variable HELOC rates require planning. We counter this with education and tools like our calculators: Mortgage Calculator. External insights from Forbes on home equity trends (Forbes HELOC Guide) align with our advice. Tips for Successful HELOC Management Budget draws carefully. Monitor equity with annual appraisals. Use for appreciating assets. Our team, highlighted on Our Team, offers ongoing support. Conclusion These case studies illustrate HELOC's transformative power when guided by experts. With 500+ five-star reviews, Pinsky Mortgages is committed to your success. Contact us for a free consultation: Book Now. Join the conversation on X @PinskyMortgages. ### Ultimate Guide to HELOC Loans in Vancouver: Unlock Your Home's Potential Are you a Vancouver homeowner looking to tap into your property's equity without selling or refinancing your entire mortgage? A Home Equity Line of Credit (HELOC) might be the perfect solution. In this comprehensive guide, we'll explore everything you need to know about HELOC loans in British Columbia, from how they work to their benefits and potential pitfalls. As your expert team at Pinsky Mortgages, we're here to provide unbiased advice to help you make informed decisions. What is a HELOC and How Does It Work? A HELOC is a revolving line of credit secured by the equity in your home. Unlike a traditional loan where you receive a lump sum, a HELOC allows you to borrow funds as needed up to an approved limit, typically 65-80% of your home's value minus your outstanding mortgage balance. Here's how it typically unfolds: Application and Approval: You apply through a lender, providing details on your income, credit, and property value. At Pinsky Mortgages, we shop around for at least three competitive bids to ensure you get the best rates. Draw Period: Once approved, you can draw funds during this phase (usually 5-10 years), paying interest only on what you use. Repayment Period: After the draw period, you enter repayment (10-20 years), where you pay both principal and interest. In Vancouver's hot market, where average home prices hover around $1.2 million according to recent data from the Real Estate Board of Greater Vancouver, many homeowners have substantial equity to leverage. Benefits of HELOC Loans for Vancouver Homeowners HELOCs offer flexibility that's hard to beat, especially in a city like Vancouver with high living costs and renovation demands. Flexible Access to Funds: Borrow what you need, when you need it – ideal for ongoing projects like home improvements or education expenses. Lower Interest Rates: Typically lower than credit cards or personal loans, as they're secured by your home. Current prime rates from the Bank of Canada influence HELOC rates, often starting at prime plus 0.5%. Interest-Only Payments Initially: During the draw period, minimize monthly outflows. Tax Deductibility Potential: If used for home improvements, interest may be deductible – consult a tax advisor. Our clients often use HELOCs for purchase plus renovations, which we specialize in at Pinsky Mortgages. Learn more about this service on our dedicated page: Purchase Plus Renovations. Who Should Consider a HELOC? HELOCs aren't for everyone, but they're particularly useful for: Homeowners with Strong Equity: If you've owned your Vancouver property for years, rising values mean more borrowing power. Those Needing Flexible Financing: Self-employed individuals or investors who face irregular income can benefit from on-demand access. Refinancers Seeking Alternatives: Instead of a full refinance, a HELOC can consolidate high-interest debt. Explore our refinancing options here: Refinancing & Debt Consolidation. Seniors might compare HELOCs to reverse mortgages via CHIP, another area of our expertise: Reverse Mortgages. Potential Drawbacks and Risks While powerful, HELOCs come with risks: Variable Rates: Tied to prime, payments can rise with interest rate hikes, as seen in recent Bank of Canada adjustments. Temptation to Overspend: Easy access might lead to unnecessary debt. Home as Collateral: Defaulting could risk foreclosure. At Pinsky Mortgages, we mitigate these with personalized Mortgage Strategy Guides, including conservative and aggressive plans to pay off faster and hedge against rates. Step-by-Step Process to Get a HELOC with Pinsky Mortgages Ready to apply? Our stress-free, 8-workflow/40-step process ensures nothing falls through. Initial Consultation: Book a free session to discuss your goals: Contact Us. Pre-Approval Check: We review your finances for viability, similar to our mortgage pre-approval service: Mortgage Pre-Approval. Lender Comparison: Unbiased bids from multiple sources. Strategy Development: Custom guide tailored to you. Closing and Ongoing Support: Annual reviews included. HELOC vs. Other Financing Options OptionProsConsBest ForHELOCFlexible, low rates, interest on used amountVariable rates, home riskOngoing needsHome Equity LoanFixed rates, lump sumHigher initial paymentsOne-time expensesRefinanceLower overall rates possibleClosing costsFull mortgage resetPersonal LoanUnsecured, quickHigher ratesSmall amounts For more comparisons, check our resources: Resources. Economic Insights for BC Homeowners With immigration boosting Vancouver's population and GST relief on new builds, equity is growing. However, per CMHC reports, careful borrowing is key in uncertain times. External resources like the Bank of Canada's rate tracker (Bank of Canada Rates) and CMHC's equity guidelines (CMHC) provide valuable context. One client testimonial: "Pinsky Mortgages secured a HELOC that funded our dream renovation. Their team was responsive and got us a great rate." Tips for Maximizing Your HELOC Monitor rates regularly. Use for value-adding investments, like energy-efficient upgrades. Pair with our calculators: Mortgage Calculator and Affordability Calculator. Conclusion A HELOC can unlock financial freedom, but expert guidance is crucial. As Vancouver's top-rated broker with over 500 five-star reviews, Pinsky Mortgages is your partner for unbiased, personalized solutions. Ready to explore? Book your free consultation today at https://pinskymortgages.ca/contact/. Follow us on LinkedIn for more tips: Pinsky Mortgages on LinkedIn. ### Mortgage Broker in Vancouver, BC: How the June 2025 GST Relief Affects You Considering buying a newly built home or condo in Vancouver? There's exciting news that can directly impact your affordability. As your trusted mortgage broker in Vancouver, BC, Pinsky Mortgages is here to explain how the recent GST relief measure could significantly benefit you. GST Relief for First-Time Home Buyers – June 2025 Update On June 5, 2025, the Canadian federal government announced the elimination of the 5% GST on new-home purchases up to $1 million for first-time buyers, phasing out gradually up to $1.5 million. According to recent reports, this could save homebuyers up to $50,000 in upfront costs. Key Benefits of GST Relief: Potential savings of $50,000 on homes priced at $1 million. Lower monthly mortgage payments, possibly reducing monthly costs by around $240. Enhanced affordability in Vancouver’s expensive housing market. Why Choose a Mortgage Broker in Vancouver? Leveraging a mortgage broker in Vancouver provides distinct advantages, especially when navigating new government incentives: Broader Lending Options: Unlike single mortgage lenders, brokers like Pinsky Mortgages offer a range of lending products tailored to your specific needs. Expert Guidance: Our team understands the complexities of Vancouver’s housing market, ensuring you leverage all available savings opportunities. Local Insight: Deep knowledge of Vancouver’s neighborhoods and housing trends allows us to provide strategic advice tailored precisely to local conditions. Current Trends in Vancouver’s Real Estate Market Vancouver’s real estate market remains one of the most expensive and dynamic in Canada: Consistently High Prices: Median home prices regularly surpass $1 million. Rise in New Developments: The recent surge in newly completed housing projects provides a variety of purchasing options. Awareness of Condo Risks: Vancouver is known for historical issues such as the "leaky condo crisis". Our mortgage broker team can help you navigate inspections, contingencies, and insurance considerations effectively. Commonly Asked Questions Am I Eligible as a First-Time Buyer? If you haven't owned a home in the past four years in any province, you qualify as a first-time buyer. Does GST Relief Apply to Condos? Yes. Newly built or substantially renovated condos and townhomes priced below $1 million qualify for this relief. How Does a Mortgage Broker Differ from a Mortgage Lender? A mortgage broker offers access to numerous lenders and products, giving you more flexibility and better chances of securing the best rates and terms. Why Choose Pinsky Mortgages – Your Expert Team? Pinsky Mortgages is committed to helping you benefit from the GST relief and secure your dream home: Personalized Approach: Tailored advice and personalized support throughout your mortgage journey. Local Expertise: Deep knowledge of the Vancouver real estate market ensures strategic guidance. Trusted Network: Access to reliable mortgage lenders committed to competitive rates and flexible terms. Ready to Start Saving? Act now to maximize the new GST relief on your first home purchase. Schedule your free consultation today and discover how much you can save. 👉 Schedule Your Consultation via Our Google Business Profile Pinsky Mortgages – Your Expert Team is ready to make your Vancouver home-buying journey seamless and financially beneficial. Let’s get you started today! ### American Treasury Yields - The Great Rollover American Treasury Yields - The Great Rollover: What It Means for Bond Yields and Mortgage Rates Written on May 9th, 2025Not enough people are talking about this... The Massive Debt Rollover The American bond market will be tested this year, with $9.2 trillion in US treasuries - about one-third of all marketable federal debt and nearly 30% of US GDP - coming due in 2025. When adding the projected $1.9 trillion American federal deficit, the gross required rollover (sale) of American debt is over $11 trillion. This massive rollover (resale of debt) stems from the government's pandemic-era reliance on short-term treasury bills (bonds), and will continue for the next 2 years. As an aside, the Treasury sells its bonds at "fair market value," meaning that the more supply of bonds, the lower the price of those bonds. And, the lower the price, in order to get the same return, provides for higher yields or interest rates. Debt and Rising Costs The US government will continue to have budget deficits for the foreseeable future and it's expected that the debt-to-GDP ratio will be above post World War II records. And, servicing this debt is getting pricier with interest costs almost a billion dollars per year (meaning more debt having to be sold to finance the deficits). OK, So What Does This Mean?! If so much debt is being turned over and needing to be resold on the market, the price for this debt is expected to have negative pressures (decrease). And, when bond prices decrease, their yield, or interest rate, increases. So we're going to have American bonds increase rates, and typically Canadian bonds follow American bonds. Canadian bond yields will have upward pressure for years to come. Most strategists see an increase in average bond yields well above the 2010 norms, but they expect it to be manageable. However, with so much debt rolling over every year and the pressures they exert on bond yields, any stumble in demand, or policy shock could push borrowing costs up very quickly. In short, this bond maturity wall is less of a crisis than a permanent upward tilt to US interest rates. Break It Down Simply, Please Since our economy and financial markets are so intertwined with the US, we are also going to have permanent upward pressure on bond yields. I'm sad to say this but I'm expecting the average interest rate for Canadian mortgages to hover in the low fours for the next two to three years. I do not, unless there's a huge external shock, expect rates to decrease far below 4%. Lastly, remember, the 2010s and 2020-2022 had some of the lowest rates on record. We were coming out of the 2008 Financial Crisis in the 2010s with a decade of growth Parti-forward interest rates, and then Covid hit, allowing rates to rock bottom. But, the era of 3% rates is over. I think 4%+ is the new normal and buyers who are on the sidelines because they expect rates to decrease further may be up for a rude awakening. Advice for Homebuyers At this time, I'm advising people to choose the 5 year fixed over the 2 or 3 year fixed because I suspect rates could be higher in 2-3 years from where they are now. ### Navigating the Spring Housing Market: Tips for First-Time Homebuyers As spring blossoms in Vancouver, BC, so does the housing market. With more listings, increased competition, and fluctuating interest rates, first-time homebuyers need the right guidance to make confident, informed decisions. That’s where working with an experienced mortgage broker in Vancouver, BC makes all the difference. Why Spring is a Hot Season for Homebuyers Spring typically brings a surge in property listings, but it also ramps up buyer activity. That means more choices—but also more competition. Preparation is key to standing out in this fast-moving market. Tip #1: Get Pre-Approved Before You Start Shopping One of the best ways to get ahead of the crowd is to secure a mortgage pre-approval. This shows sellers you’re serious and financially ready. A mortgage broker like Pinsky Mortgages – Your Expert Team can guide you through the pre-approval process quickly and efficiently. Benefits of Pre-Approval: Know your budget range Lock in an interest rate for up to 120 days Gain leverage in competitive offer situations Tip #2: Understand Your Mortgage Options As a first-time buyer, it's easy to feel overwhelmed by terms like fixed-rate, variable-rate, or insured mortgages. A trusted mortgage lender partner can explain your options and help you choose what fits your financial goals. Common Mortgage Types in Vancouver: Fixed-Rate Mortgages – Stable payments, ideal for budgeting Variable-Rate Mortgages – Potential for lower rates, but more risk High-Ratio Mortgages – For buyers with less than 20% down payment Tip #3: Be Aware of Vancouver-Specific Costs Buying in Vancouver, BC means understanding local regulations and added costs such as: Property Transfer Tax First-Time Home Buyers’ Program eligibility Strata fees for condos Working with a local mortgage broker in Vancouver ensures you’re not caught off guard. Tip #4: Work With a Mortgage Broker Who Knows Vancouver Unlike banks that only offer their own products, mortgage brokers shop the market for you—comparing offers from multiple mortgage lenders to find the best deal. At Pinsky Mortgages – Your Expert Team, we specialize in: First-time homebuyer programs Self-employed mortgages Investment property financing We know the Vancouver market and offer tailored solutions to meet your needs. Ready to Take the First Step? Don’t navigate the spring housing rush alone. Schedule a free consultation with Pinsky Mortgages and let our expert team help you find the perfect mortgage solution.   Pinsky Mortgages Your Expert Team in Vancouver, BC – Helping First-Time Buyers Move Forward With Confidence. ### Why Working with a Mortgage Broker in Vancouver is a Smart Choice Vancouver’s real estate market is among Canada’s most competitive, making it vital to secure the best mortgage. A mortgage broker like Pinsky Mortgages saves time, money, and stress for first-time buyers, refinancers, and investors. What is a Mortgage Broker and How Can They Help? A mortgage broker connects borrowers with lenders, comparing rates and products for the best financing. Benefits include: Access to multiple lenders for diverse options. Better rates through negotiation. Customized solutions for unique needs. Expert guidance from pre-approval to closing. Why Choose a Local Mortgage Broker in Vancouver? 1. Local Market Knowledge We understand Vancouver’s neighborhoods like Kitsilano and Yaletown, tailoring financing strategies to local trends. Visit our Google Business Profile for more details. 2. Personalized Service Tailored to You We provide one-on-one consultations to fit your lifestyle and budget, unlike big banks. 3. Faster Pre-Approvals & Quick Closings In Vancouver’s fast-paced market, we offer quick pre-approvals and streamlined refinancing for an edge. 4. Assistance for First-Time Homebuyers We guide first-time buyers through incentives, down payments, and terms for affordability. Explore first-time buyer options. 5. Refinancing and Mortgage Renewal Solutions We help lower payments, consolidate debt, or access equity through refinancing. Mortgage Solutions We Offer First-Time Homebuyer Mortgages – Pre-approval and financing guidance. Mortgage Refinancing – Better rates, terms, and equity access. Self-Employed Mortgages – Solutions for non-traditional income. Investment Property Mortgages – Financing for rentals and investments. Bad Credit Mortgages – Flexible options for credit challenges. Get Started with Vancouver’s Trusted Mortgage Broker For expert advice and competitive rates, Pinsky Mortgages ensures a stress-free experience. Visit Us: 2608 Granville St #550, Vancouver, BC Call Us: 778-990-8950 Email: eitan@pinskymortgages.ca Find Us on Google Schedule a free consultation today! ### Navigating the Impact of US Tariffs on Canada We are all concerned and confused. I mean, what the heck is going on? There's an uncertainty index that tracks uncertainty in the market. We're actually higher now in uncertainty than we were during Covid and the financial crisis. OK, I just wanted to show you that.  Big Picture Analogy I have kids in daycare and they are always getting sick... there are rolling colds that go through our house and we're always looking for the good drugs for my wife and me and kids Tylenol for our children. So the analogy with the tariffs is that we can think about it like a parent would with our family's immune systems as the economy and the tariffs as an illness, and drugs as economic cures/interventions. Some people have stronger immune systems and some people have weaker immune systems. Some people take drugs to mask their illnesses and some do not. And, sometimes the drugs work and sometimes they don't. Same thing with the economy... Unfortunately, Canada went into 2025 with a very weak immune system (in contrast with the United States economy). Think of the United States immune system like Arnold Schwartzenager pumping iron and drinking a green juice, whereas Canada can be Michael Cera in "This is The End;" not the epitome of health/wealth.  Canada doesn't have a lot of diversity of economic activity or investment and a lot of Canadians are already feeling like the economy is a little slow. Cyclically, we just dealt with very high interest rates, and productivity per person just isn't there. So, our starting place is a place of weakness, or a weak immune system, particularly in comparison to the US. And now we add a tariff shock. It's like catching a virus out of nowhere.  So how bad is the economy going to get? Even the economists have trouble putting a number on it.  But, The Damage Has Been Done! Just the threat of a tariff on Canadian goods or the Canadian economy already creates an impact. First, it's just sheer uncertainty. If people don't know if they are going to lose their jobs, and if businesses don't know if they are going to contract or grow, people/businesses just freeze. Spending goes down, investment doesn't happen, new employees don't get hired, and everything stagnates. It's not just Canadian companies that are not investing. American and global companies now look at Canada as an uncertain place to do business because goods that are manufactured here may, in the future, be tariffed/taxed and it would be just smarter to build a factory or invest in the US than in Canada. This all happens before the virus even comes, before the tariffs are even enacted. The Solution/Cure. Drug makers to combat the virus are the Bank of Canada and the federal government and the drugs include but are not limited to policies, spending/handouts, and interest rates.  Recently the Bank of Canada cut its prime rate from 3.0% to 2.75%. This "drug" is supposed to spur investment and economic growth. Going forward, economists expect more cuts coming, specifically because the economy is slow and slowing (even before the tariff threat). Most economists expect another two rate cuts by this summer, and potentially more if the tariffs hurt us further. With government policies (another drug), on the other hand, some people think the government should step in and provide covid-like spending/stimulation. This will likely be challenging to do because the tariff shock is not like a covid shock at all; covid was a pause in the market with a future unpausing, while the tariffs are a "transition" to our economy. And, if we just hand out checks to everyone, we risk greater inflation which would create further problems. So, the government will likely have to do targeted support to specific industries/sectors hurt most by the tariffs. Alberta, Ontario and Quebec seem to be the provinces with sectors who have the most to lose with tariffs. Additionally, we have our own interprovincial barriers to trade, which the IMF has likened to a 21% tariff. Imagine that - we already tariff our own goods from province to province; luckily there's now going to be some movement on this (hopefully). What's Happening with the Canadian Dollar? Lastly, one question that many people have is: what is the Canadian dollar going to do? So far, we've had weakness in the Canadian dollar and the question is whether we'll see more weakness ahead.  As an aside, a weak Canadian dollar would make our goods more palatable and less expensive to American buyers, outweighing some of the demand-side tariff harm. Now, if the Bank of Canada is cutting so much, shouldn't that weaken the Canadian dollar even further? Well, what's interesting with the currency market is that it already deals with market expectations on where interest rates are going to go over the next 2-3 years, and the currency market has already incorporated a lot of Canadian weakness and the trade war into its level. The good news is that we're not really expecting a decrease in the Canadian dollar, but we're not expecting the Canadian dollar to strengthen either. So, if the Canadian dollar doesn't decrease much further, there may be a lot of pain coming for American purchasers of Canadian goods. Further down the line, fewer goods will be purchased from Canada. Long story short, if our currency weakens with the tariffs, the less of an effect the tariffs will have on our economy.  What's Driving these Tariffs? It must be fentanyl, right?! Economists have identified Trump's tariffs as coming straight out of Mercantilism. Mercantilism: Mercantilism is a nationalist economic policy that is designed to maximize the exports and minimize the imports of an economy. In other words, Mercantilism seeks to maximize the accumulation of resources within the country and use those resources for one-sided trade; trade deficits are bad, imports are bad, and exports are good. Trump: "We're subsidizing Mexico and we're subsidizing Canada and we're subsidizing many countries all over the world." The problem is that this isn't how trade has worked. We've had very integrated supply chains... It will cost the United States billions of dollars to set up their own manufacturing plants, aluminum smelters, and other capital intensive projects that they want to move from Canada to the US.  Mercantilism was last relevant in the 1800s... The issue with Mercantilism is that it's got a zero-sum mentality: there's a finite amount of goods that each country can make and trading does not provide for higher output. The problem is that we know, for the last 200+ years, that trade does in fact improve overall output. So, does Mr. Trump really want all of these tariffs or is he getting at something else?! Does he even know what he's getting at?!  Thanks for reading!Warm regards,Eitan Need help preparing for rate changes? Contact us today! ### How Tariffs Could Impact Canadians The U.S. may impose tariffs on Canadian goods starting March 4, including a 10% tariff on oil and 25% on other imports, with additional tariffs on aluminum and steel starting March 12. If this happens, consequently, Canada plans retaliatory tariffs on $155 billion worth of U.S. products. Tariffs are taxes on imported goods. If the U.S. imposes tariffs, companies may pass on higher costs to consumers. This could increase prices for products like beef and vehicles. Tariffs could furthermore disrupt supply chains, especially in industries reliant on cross-border parts, such as automotive manufacturing. Economic Ripple Effects Economically, tariffs could weaken the Canadian dollar, hurt export-driven industries, and lead to layoffs or closures. A 25% tariff on steel and aluminum could shrink Canada’s GDP by 3.4-4.2%. Wow, pushing the country into a recession. Inflation may rise, and as a result, the Bank of Canada might lower interest rates to mitigate growth slowdowns. Canadian investors should prepare for uncertainty. Tariffs could hurt sectors like manufacturing, petroleum, and aerospace. Discretionary sectors like travel and retail could also suffer if consumers cut back spending due to higher prices. A Visual Explanation I found the following graphic really interesting in explaining how tariffs work their way through the economy. What This Means for You and Me So, what does this mean for you or me? The variable rate may decrease due to the Bank of Canada wanting to spur on the economy. Additionally, the government may introduce quantitative easing. This would lower the fixed rates further. Indeed, we’re in uncharted (I mean, Trump..) territory here. Your guess is as good as mine as to what will happen over the next few weeks/months. BUT, I’ll hazard a guess. We’ll have a decrease in the variable rate on March 12. Big Banks’ Predictions Below is what the big 6 banks are now assuming the BoC prime rate to be over the next two years. Need help preparing for rate changes? Contact us today! ### UBC Skytrain extension officially a top priority for the Province Big news coming out of the BC government: the UBC SkyTrain extension is officially one of the top priorities. This project, which will extend the Millennium Line from Arbutus to UBC, has major implications for real estate, our quality of life, and the overall BC economy.    The SkyTrain extension is part of a larger push to encourage high-density, transit-oriented development around future stations. This includes the massive Jericho Lands project in West Point Grey (remember that segment from last fall's newsletter??), which is set to bring 13,000 homes and 750,000 sq ft of commercial space. With the SkyTrain in place, this development will help address Vancouver's housing shortage, while offering easier access to amenities and jobs. But here's a new twist: without the SkyTrain, this large-scale development might not happen as planned, and Vancouver could miss out on an opportunity to increase housing supply and alleviate traffic congestion. The provincial government is working on creating an affordable and efficient public transit system across BC, focusing on SkyTrain, RapidBus, and rail services. However, Eby's mandate letters to his cabinet ministers do not address TransLink’s budget shortfall, which could lead to service cuts by 2026—a concern for both transit users and local businesses. The provincial governments response: the mandate letters are "high-level" and don't contain all the Province's upcoming projects… Considering specific projects are named in the mandate letters, the omission of TransLink's budget shortfall seems a little odd.  What you do YOU think?? On the flip side, the government’s focus on improving road infrastructure, like the widening of Highway 1, is aimed at reducing traffic. While this is great for drivers, it might raise concerns about long-term carbon emissions and whether these road projects are balanced with sustainable public transit improvements. Curious about where your hard-earned taxpayer dollars are going??  Here is a summary of the price-tags for some of the infrastructural projects under consideration:  Massey Tunnel - $4.15 billion (per 2020/2021 costing - expect a budget increase)Highway 1 expansion from Langley to Chilliwack - $5 billionSkyTrain Millennium Line’s Surrey-Langley extension - $6 billion (up 50% from the previously budgeted $4 billion) Business Case Study for SkyTrain Millenium Line Extension from Arbutus to UBC: $40 million Fun fact: We have a new Ministry of Infrastructure, which is focused on finding ways to cut costs and speed up the approval and construction of key public projects, like schools and hospitals. They're looking at ways to reduce cost inflation due to labor shortages and high demand for contractors. A big priority for the Ministry is also pushing the federal government for a fair share of funding for important infrastructure projects. Overall, while these projects could greatly enhance BC’s economy by improving transportation and creating jobs, there are some uncertainties. The SkyTrain extension could lead to a boom in real estate values (as if we really need that right now), particularly near those new stations, but it’s still a few years off. There’s also the question of whether the BC government can balance these ambitious projects with rising costs, budget constraints and economic uncertainty in the wake of the US's new proposed 25% tariff on Canadian goods being imported in the United States. As always, stay tuned for more updates, and feel free to reach out if you have any questions on how this might all impact you! ### Population Control Let's talk a bit about the immigration announcements that the Government of Canada has proposed. If in fact they are realized, they would have a profound effect on the economy, because new Canadian residents do spend money, and even if it takes a while for new Canadians to get a job, they do add to supply and add to demand. Canada used to target 500,000 new immigrants every year, and that was supposed to continue for the next three years. However, 2025 planned permanent immigration is down to 395,000 and 2026 and 2027 are 380,000 and 360,000 respectively. However, these numbers are dwarfed by the foreign students and temporary foreign workers that come to Canada (800,000 students and temporary compared to 500,000 permanent). Basically, we were letting in 1.3M new people per year, which is just huge, for a population of 40,000,000. *It's important to note that only 58,000 temporary Canadians will be turned into permanent residents. New: The Government wants to cut the number of temporary residents (foreign students, temporary workers, and asylum claimants).  Right now, temporary workers make up 7.2% of Canada's population. The government wants to lower that number to 5.0% by 2026. This means that 2,400,000 non permanent residents will have to leave Canada in the next two years if they aren't granted permanent residency; of which, we already know only 58,000 will be granted permanent residency per year. In addition, Ottawa has already capped student permits in 2025 to 364,000, down from 1,000,000 the year before.So do we really believe that 2,400,000 temporary foreign residents will leave in the next two years? It seems that this may be highly unlikely. And, how is it all going to add up? At the end of 2025, there will be 1,260,000 people who will have expired temporary residency permits. Are they all going to leave on their own? Will we have mass deportations in Canada? How would we track all of these people down? In 2024, there were only 3,650 removal orders given in all of Canada - there's just no bandwidth to police this type of policy. But even if a part, or most do leave, what will the unintended consequences be?  Well, first off, all of those "universities" that depend on foreign students are going to be in real trouble. And what about the labour shortages? Particularly in the trades and in healthcare? What about seasonal workers? Most of these will be temporary workers, hoping to become citizens. This is a major uncertainty for the Canadian economy, and was stated as the number one issue by Tiff Macklem, facing Canada today. I don't have any answers here... nobody knows how this will shake out. For sure, though, the Bank of Canada will continue to assess how this deflationary policy will affect Canada and when and by how much to cut rates further. ### Here's Why the Canadian Dollar Sucks So Much! The Canadian Dollar is now at its lowest point in a while and analysts predict it could fall below 70 cents US in the coming months. I just went to Portland with a few buddies for a boys weekend out (yes, it was great) and boy did it hurt our wallets. A $8 beer in the US cost us over $11 CDN and a brunch with the boys was a small fortune. However, even if you never leave Canada, the exchange rate is going to affect us. How is Canada's Dollar Valued?! At its core, the value of the Canadian dollar is based on supply and demand. If people or businesses around the world want to purchase Canadian stocks, products, or real estate, it increases demand for the currency and it increases its value. The exchange rate is the price of one currency against the price of another. So, if we Canadians need American currency (which we do), it drives up the price of the US dollar and concurrently, it weakens the Canadian dollar vis-a-vis the USD. Generally, there are two big selling features that make investors want to put their money in one country or another.  First, if the economy or perception of an economy is doing well, money flows into that economy and the value of their currency increases. And right now, the US economy is doing much better than the Canadian economy. The Canadian economy is moving in the other direction. Just as an example on how our economies are differing: Unemployment Rate: US 4.1%  |  CAD 6.5% Q3 GDP Growth: US 2.8%  |  CAD 1% Debt-to-Income: US 100%  |  CAD 180% Secondly, people, businesses and even countries will want to invest and park their money in countries with higher interest rates... While Canada has lower rates already with them having a downward future trajectory, the US has largely evaded cutting as much as we have and their cutting outlook is smaller than ours. So far, Canada cut 1.25% off our prime rate, while the US has only cut 0.75%. Donald Trump He has a very different economic plan than the current administration. He's promised to slash taxes, deregulate, spend more in some cases, and all of this is expected to boost growth. The market reacted positively to Trump's win (stocks increased) and the loonie fell against the dollar as soon as he was elected.  The head of the US Federal Reserve then signalled that the US may not need to lower their Prime rate, which would increase the gap between the US and Canada even more and the Canadian dollar slid again. *There are many who expect Donald Trump's policies to bring back inflation. Growth can lead to inflation so it may not all be rosy based on these policies. How Does This Affect Canadians? Obviously snowbirds and visitors to the US will be affected with decreased purchasing power.  But, imports also affect us in Canada. This is hundreds of billions of dollars each year.  But it's the impact on businesses that may affect us the most where a weaker Canadian dollar means that we'll import more inflation. Inflation? Didn't we just get rid of inflation?  So if our dollar decreases, we would increase the income and growth for some industries such as our oil and gas industry, auto parts, lumber, the movie industry, and our exports. With a low Canadian dollar, more people look towards Canada now for their goods and services. However, Trump's tariffs, if they become a reality, will completely negate any positive impact our lower dollar has on our exports... this is a real wild card. Long story short, our dollar is much lower than the USD because of how well the United States is doing vis-a-vis Canada, and because there is just a lack of confidence in our economy. Further, our interest rates, which are lower than the US's, and are expected to continue to decrease lower, are affecting inflows and outflows (outflows mostly for Canada and inflows to the US) of money across the border. I hope you learned something :) I know I did while researching this piece - mostly from this CBC video. And now for a little picture!! Little Liora just loves looking up to (literally and figuratively) her big sister Miri. Yeah, cuteness galore :) ### Pent Up Demand It's really important to note that Canada's population grew by 3.3%. This is much stronger than every other OECD country. The surge in population growth is primarily from new permanent residents, temporary foreign workers and students. However, the government also wants 400,000 new permanent residents every year for the next 3 years. This increase in highly qualified, skilled, and employed permanent residents will surely have an impact on demand going forward, not to mention all of the buyers waiting on the sidelines for rates to come down. And, couple this with the new insured mortgage rule changes, affordability will increase for even more people. I just love this graph below... It's going to continue this way. Vancouver just has too much demand for our supply, and this will continue for the foreseeable (years and years) future. Long story short, I believe that we’re going to have a hot spring but not too hot... prices are still unaffordable for many buyers and who wants to pay $1M for a 2-bedroom condo anyways?! Notwithstanding, with all these new Canadians, and Canadians who have good, high paying jobs, properties are continuing to be purchased and demand continues to be high. ### BIG Insured Mortgage Rule Changes Canada just came out with three new insurance rule changes. These rule changes all help buyers with affordability (higher purchase prices). All of these changes are in play as of December 15th. Mortgage application submissions for any new insurance rules must occur on or after December 15th. 1. Increase $1,000,000 Insured Price Cap to $1,500,000 First, the government has increased the maximum insured purchase price from $1,000,000 to $1,500,000 with less than 20% down. The down payment must be 5% on the first $500,000 and 10% from $501,000 to $1,500,000. This can be for second homes and primary residences. This is a very welcome change because it’s very rare for a “livable” property with 3-bedrooms to be under $1M anymore (in Vancouver anyways). This puts a lot more people in play for properties up to $1,500,000, who may not have 20% down. 2. Expand 30 Year Amortization to Insured Mortgages Second, we’re now able to go up to 30 years amortization for insured first time home buyers (FTHB) and for all buyers of new construction (purchases from a developer). There is a .20% premium on insurance costs to change an insured mortgage from 25 years amortization to 30 years amortization. FTHB means that in the last 4 years, someone has not occupied a home as a principal residence that either they or their current spouse/common law partner has owned. Or, the borrower has recently experienced a breakdown in marriage or common-law partnership, or someone with a qualifying disability. This new rule will provide for an increase of approximately 7% purchase power. 3. Insured Refinances Up To $2,000,000 to Add 1-3 Additional Rental Units This is a really interesting one… the insurers are allowing borrowers to refinance (usually not allowed for insured mortgages) their home in an insured mortgage in order to construct at least one additional rental unit in their home or on their property (coach house). To qualify: Borrowers must already own their property. The borrower or close relative must occupy the current unit. Additional units built must be for long-term rental (no AirBNB). Future rental income can be used to support building the rental suite!! The “as complete” value of the property must be $2,000,000 or less. This new insured construction or renovation loan is also interesting because many lenders have a cap on how much they will lend for renovations. It’ll be interesting to see which lenders take up this program in earnest. ### Analysis and Economic Update The Bank of Canada (BoC) decreased their prime lending rate 0.50% at the end of October from 4.25% to 3.75%. This jumbo rate cut was expected and we have now seen 4 consecutive rate cuts since June, although October’s was the largest. Inflation The inflation outlook declined significantly from 2.7% in June to 1.6% in September. October’s inflation report will be released on November 19th. Inflation in shelter costs (mortgage interest and rent) remains elevated but has begun to ease. Please note that shelter costs are directly related to the BoC's interest rate because the higher the rate, the higher mortgage interest costs). Excess supply in the economy has reduced inflation in the price of many goods and services. The drop in global oil prices has led to lower gas prices at the pump. All of these factors have combined to bring inflation down. In last month’s announcement, the Bank said that with inflation now back around it’s 2% target, it decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of it’s 1% to 3% target range. It went on to note that “if the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further.” However, it also cautioned that the timing and pace of further reductions will be guided by incoming information and the implications of that information for the inflation outlook. Ultimately, the Bank said it will take decisions “one meeting at a time.” And added that it is committed to maintaining price stability for Canadians by keeping inflation close to its 2% target. However, it's important to note that the overnight rate is still 145 bps above the current core CPI inflation. The average for the past 30 years is just 60 basis points...  What this means is that we expect the overnight rate, if core inflation stays at 1.6% (which it's currently dropping), to be at around 2.2%. This means we have an additional 1.25%+ to go in the overnight rate. Long story short, we expect to see the BoC overnight rate at 2.5% by next spring. Next Up: The Bank is scheduled to make one more rate decision in 2024 on December 11th. ### Current Interest Rates & Economic Update Summary: Fixed interest rates have been decreasing steadily over the past two months. At the same time, the variable rates have decreased with the prime rate decreasing but the “discounts” off of the prime rate have decreased. At this time, depending on someone’s risk tolerance and ability to afford a variable rate, about half our clients are taking variable rates and half are taking fixed rates. The changes in rates above in (mostly) green show the difference from 2 weeks ago. It’s important to note that these rates are not final - we can get better rates in many circumstances. The rate offered is subject to: your lender, date of closing of your mortgage, as well as mortgage size. The sooner the mortgage closes from the rate request, the better the rate, and the higher the mortgage size, the better the rate. Many clients are taking 5, 4 and 3 year fixed rates at the moment, with some of the smarter ones taking the variable rate. I personally think that taking the variable rate at this time makes sense for two reasons: first, I think that clients will be better off over the long term with a variable rate, especially if we're expecting an additional 1.25% cut by spring of 2025. And second, the variable rate allows one to lock in to a fixed rate at any time. So, if fixed rates go below 4%, it would make sense to lock in your variable rate for peace-of-mind, among other things. ### Vancouver Housing Demand Set to Rise Amid Population Growth Pent Up Demand It's really important to note that Canada's population grew by 3.3%. This is much stronger than every other OECD country. The surge in population growth is primarily from new permanent residents, temporary foreign workers and students. However, the government also wants 500,000 new permanent residents every year for the next 3 years. This increase in highly qualified, skilled, and employed permanent residents will surely have an impact on demand going forward, not to mention all of the buyers waiting on the sidelines for rates to come down. I just love this graph below... Share it with your clients because it's going to continue this way. Vancouver just has too much demand for our supply, and this will continue for the foreseeable (years and years) future. Lastly, we're going to have a busy February-July... Check out the chart below. It looks at the share of Canadian home sales for each month of the year. You can see that the winter months are the weakest and they start to improve into February, peaking in May and remaining strong in July/July. The BoC even said in their monetary policy report today that they expect home sales and home prices to rise as we move through Q1 and Q2 of next year.  Thank you for reading this far. And, always remember to get off your computer/TV/phone every so often; it turns you into a zombie. Just look at what 30 seconds does to my two girls... I had to take the ipad away because they were just gluuuued to it. *and no, I don't let me 1 year old watch screens - she crawled all the way from the other room and stood herself up to watch. ### Prime Rate Cut Boosts Vancouver Home Affordability What This Means For Affordability If someone wanted to get a variable interest rate mortgage, they would have to qualify at their contract rate plus 2.0% (this is called the "stress test"). Let's take a variable mortgage rate of Prime - .55%. Before today, the prime rate was 6.45%, which would equate to a mortgage rate of 5.95%. However, since we have to qualify at a rate of 2% higher, the qualification rate would be 7.95%. After today, that qualification rate is now 7.45%. Let's assume that a couple has a combined income of $150,000. With 20% down, this couple could qualify for a mortgage of approximately $686,000 yesterday. Today, this same income qualifies for a mortgage of approximately $720,000. This is a 5% increase in affordability. Not huge, but at least it's something :) Notwithstanding the above, if a client can get a fixed rate right now of 4.5%, their stress test qualification rate would be 6.5%, which provides for a mortgage of approximately $790,000. So today, someone who opts for a fixed rate would have 9% higher affordability than someone who goes with a variable rate. ### Canada’s Prime Rate Cut to 3.75% – Economic Update Economic Update The Bank of Canada (BoC) decreased their prime lender rate 0.50% today from 4.25% to 3.75%. This jumbo rate cut was expected and we have now seen 4 consecutive rate cuts since June, although today's was the largest. Inflation The inflation outlook declined significantly from 2.7% in June to 1.6% in September.  Inflation in shelter costs (mortgage interest and rent) remains elevated but has begun to ease. Please note that shelter costs are directly related to the BoC's interest rate. Excess supply in the economy has reduced inflation in the price of many goods and services. The drop in global oil prices has led to lower gas prices at the pump. All of these factors have combined to bring inflation down.In today’s announcement, the Bank said that with inflation now back around its 2% target, it decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of its 1% to 3% target range. It went on to note that “if the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further.” However, it also cautioned that the timing and pace of further reductions will be guided by incoming information and the implications of that information for the inflation outlook. Ultimately, the Bank said it will take decisions “one meeting at a time.” And added that it is committed to maintaining price stability for Canadians by keeping inflation close to its 2% target. It's important to note that the overnight rate is still 145 bps above the current core CPI inflation. The average for the past 30 years is just 60 basis points...  What this means is that we expect the overnight rate, if core inflation stays at 1.6% (which it's currently dropping), to be at around 2.2%. This means we have an additional 1.25%+ to go in the overnight rate. Long story short, we expect to see the BoC overnight rate at 2.5% by next spring. Next Up: The Bank is scheduled to make one more rate decision in 2024 on December 11th.  ### Current Fixed VS. Variable Analysis Let's assume a $500,000 mortgage with a rate of 4.79% 3-year fixed versus a rate of 5.65% 5-year variable. Right off the bat, since we're assuming a 0.5% decrease in October and a .25% decrease in December, we can decrease our rate by 0.5%. We're decreasing our variable by 0.5% because my calculator goes in 6-month increments. We are going to further assume that the end bank of Canada rate will be 2.75% (down from 4.25% today) by midpoint next year. As an aside, some people think the BoC rate would be even lower but let's just use this assumption for a more conservative approach. At the outset, a borrower would pay $124 more per month with the variable, but that quickly decreases to paying $170 less per month. All in all, with an adjustable rate mortgage (a mortgage whose payment changes when the interest rates change), one would be $5,002 better off if they took a variable now versus the fixed rate. This consists of $3,500 in less payments and $1,502 in more paid to principal. OK, but what about a variable rate mortgage? What we looked at was an adjustable rate mortgage. There's a difference... true variable rate mortgages have static payments, or are fixed-payment variable rates. What this means is that as the rate changes, the payment on the mortgage stays the same. What does change is the proportion paid to interest and principal; this directly affects the amortization rate. As rates decrease with variable rate mortgages, a larger proportion of the payment goes to principal, and a lower portion goes to interest; arbitrarily decreasing the amortization.  So now let's look at the same scenario but with an insured rate of 4.19% for the 5-year fixed, vs a variable rate of 5.40%. Remember, since we're going to assume that the BoC rate decreases by 1.5% over the next year, with the next 0.5% happening imminently, the end rate will be 3.9%. OK, so in this scenario, since the payment stays high, we have a $16,173 lower mortgage balance at the end of the 5 year term, but we have also paid an additional $12,722 to principal... we're actually only $3,450 better off. Now, is $3,450 that much better over 5 years to have to contend with the variable rate and have to contend with always thinking about your mortgage every time there's a rate announcement? Maybe. I think yes. However, it's important to note that the variable rate allows "Convertibility." A variable rate conversion to a fixed rate may be the best option in both the adjustable rate scenario and the variable rate scenario. Instead of locking in at 4.79% or 4.19% now, one could lock in (convert) their variable rate mortgage to a fixed rate at any time... And, since we're expecting rates to go down further, the variable mortgage would be a "placeholder" for future fixed rates. All in all, there's two reasons to go variable, with the first being: it's most likely the best fit over the course of 3 and 5 years, and the second being that one can convert to a lower fixed rate within a few months to take advantage of the decreasing rates. I'm happy to chat about this with anyone! I personally have two variable rate mortgages and am either waiting for fixed rate decreases (we'll see what we can get) and/or stay with the variable and ride the wave down :) ### Mortgage Insurance Rule Change Details There are two new rule changes: Expanding the eligibility for 30 year amortizations for first time home buyers Increasing the $1M insured cap to $1.5M First off, neither of these are in effect yet. The mortgage insurance application must be submitted on or after December 15, 2024. This means that in order to qualify for 30 years amortization or purchase up to $1.5M on insured mortgages, the application (mortgage application) can't start before December 15th. This means that your clients can't really purchase for these before then as well.  To be considered a first time home buyer, a borrower must meet one of the following conditions: Borrower has never purchased a home before In the last 4 years, the borrower has not occupied a home they own (or their spouse owns) as a principal residence.  The borrower recently experienced a breakdown of a marriage or common-law partnership. To be able to purchase up to $1.5M for insured mortgages: There must be less than 20% down payment. The property must be valued at less than $1.5M (up to $1,499,999). The down payment must be at least 5% on the first $500,000 and 10% thereafter, up to $1.499,999.Technically, a $1,499,999 purchase would have a minimum down payment of $125,000 ($25K for the first $500,000 and $100,000 from $500,000 to $1,500,000). I think this is very welcome, especially in expensive areas such as the lower mainland.As an aside, In order to qualify for a $1,499,999 property with the minimum down payment, a family would have to have a combined income of approximately $295,000. ###  Economic Update So there's really good news on the inflation front... The Consumer price index only rose 2% year over year in August, the slowest pace since February 2021, down from 2.5% in July 2024. Excluding mortgage interest, inflation was a mere 1.2%, well below the bank's target rate of 2%. Did you see that? Inflation, if you exclude mortgage interest costs, is 1.2%... This is too low, and below the 2%-3% target of the Bank of Canada (BoC). This definitely opens the door to a possible 0.50% rate cut on October 23rd. Want to know what's also interesting? As the interest rates decrease, so does mortgage interest costs. Basically, when the BoC decreases interest rates, they will also be decreasing mortgage interest costs, which will further decrease the inflation numbers... Recent indicators suggest the economy is weakening. We've had higher unemployment and some moderate growth but most of the growth that we did have was due to government spending and aircraft purchases. With low inflation and a weakening economy, the BoC knows it'll have to do something to stem the tide of a hard landing (recession). Remember back in July 2022 when inflation was taking off? You know what the BoC did? They increased the overnight rate by a full 100 bps in one sitting! It was meant to shock the market and signal that the economy needed to slow down. It was meant to stop consumer/business spending! Did it? Yes, but it took a while. Turn the page to now: prices declined in five of eight economic subsectors month over month, which could trigger worries about deflation among central bank officials if it becomes a trend. The BoC governor, Tiff Macklem has recently said the bank cares as much about undershooting the 2% inflation target as it does overshooting it. The issue now is that people are not spending and the economy is softening. I've personally had several of my past clients reach out to me to tell me they have lost their jobs too! So what to do? Recently, the US Federal Reserve decreased their overnight rate by a "shocking" 50 bps. It is this American "shock" plus the current economic data that will force the BoC to cut again on October 23rd and December 11th. It's widely expected that both dates will have cuts, but the September inflation numbers coming out on October 15th will solidify whether or not October 23rd will be an outsized 0.50% cut or a .25% cut. The Stock Market It's interesting to note that during the rate hikes of 2022 and 2023, it was expected that the stock market and the economy would go down. This was not the case. After July's 100 basis point increase in 2022, the TSX rose but an additional 28%!! And, American stocks rose by 62.4% since their 2022 lows. Currently American stocks are 35% higher than pre-hike levels. So, long story short, stocks really haven't followed interest rate changes in the same way that the "economy" (inflation, wages, employment, etc.;) has.  My two cents :) ### Rate Cut & Economic Analysis  The Bank of Canada (BoC) cut its key interest rate today by 0.25% to 4.25%. This is the third of potentially five cuts this year. The Bank's decision reflects two main developments: Inflation continues to ease as expected. As inflation decreases, the BoC wants to see economic growth pick up to absorb the slack in the economy. I.E., growth is lower than it could be. Overall, the economy's weakness continues to pull inflation down.Tiff Macklem (the BoC governor) said today, "If inflation continues to ease broadly in line with the central bank's July forecast, it is reasonable to expect further cuts in the policy rate. We will continue to assess the opposing forces on inflation and take our monetary policy decisions one at a time." This Friday's Labour Force Survey data for August is very important; we expect economic activity to slow from the 2.1% growth in Q2, which was slightly above expectations. However, the incredible growth in Canada's population has done little for our competitiveness and GDP per capita. Canada currently has the lowest GDP per capita in all of the G7 nations. The concern here is that the Canadian population grew by 3.2% but the economy only grew by 2.1% last quarter, and 1.8% in Q1. This means that more people are adding less, per capita, to the economy... Additionally, the unemployment rate had risen over the past year to 6.4%, with the rise being concentrated in youth and newcomers to Canada, who find it more challenging to get a job. Business layoffs are moderate but hiring has been weak... The Bottom Line Monetary policy remains restrictive. While the target overnight rate is now 4.25%, core inflation is only roughly 2.4%. Real interest rates remain too high for the economy to reach its potential growth pace of about 2.5%. Weaker growth implies a continued rise in unemployment and excess supply in other sectors.In separate news, the US released data showing that US job openings fell to their lowest level since January 2021, consistent with other signs of slowing demand for workers. US job growth has been slowing, unemployment is rising, and job seekers are having greater difficulty finding work, fueling fears about a potential recession. Federal Reserve policymakers have made it clear they don’t want to see further cooling in the labour market and are widely expected to start lowering interest rates at their next meeting in two weeks. In other news, consistent with a global economic slowdown, oil prices have plunged to new 2024 lows. Weak oil prices are a harbinger of lower inflation, growth and mortgage rates. Bonds rallied (increased in price due to higher demand; remember, as bond prices increase, bond yields - rates - decrease) in the wake of the disappointing US data, taking the 5-year government of Canada bond yield down to a mere 2.89%, well below the 3.4% level posted when the Bank of Canada began cutting interest rates in June. This decline in market-driven interest rates reduces fixed-rate mortgage yields/rates. Moreover, today's cut in the overnight rate will be followed soon by a 25 basis point reduction in the prime rate to 6.45%, reducing floating rate mortgage yields as well. The Bank of Canada has two more decision dates this year: October 23 and December 11. At those meetings, the Bank is widely expected to continue its quarter-point rate cuts, taking the overnight rate down to 3.75% at year-end and 2.75% next year. ### Dos and Don'ts of Mortgage Pre-approvals Dos and Don'ts of Mortgage Pre-approvals Being a homeowner comes with many additional responsibilities, some that begin well before placing an offer on the home. We want to make sure that you are prepared for qualifying by providing you with some helpful Mortgage Do's and Don'ts.  Following these guidelines will ensure that you are able to qualify for your mortgage at pre-approval time and, most importantly, still qualify when it's time to take possession of your new home. Many people don't realize that the Lender will revisit the borrower's credit bureau status and previously provided, or newly requested, documentation prior to closing to confirm that the client is still below their lending ratio maximum. No one wants to see their dream for their new home collapse right before closing because of some mismanagement of finances and/or credit.  Follow these Mortgage Do’s and Don'ts to obtain financing pre-approvals, and take possession of your property with confidence: Dos Do work with a reputable real estate agent. For a list of trusted Realtors, please ask us. Do make a list of the top five things you enjoy about your current living conditions and five things you dislike. Do look into insurance. Mortgage life and disability insurance, also known as creditor insurance, insures your mortgage and mortgage payments should something tragic happen to you. We can offer you creditor insurance to cover your new mortgage. Speaking with an insurance professional is highly encouraged. Do ask to review your credit report and check for any discrepancies.  You may be surprised to find odd charges on your credit report or old debts.  By clearing them up now, you’ll save time processing your loan. Do increase your buying power and be in a stronger negotiating position by getting pre-approved. Do call your mortgage experts at Pinsky Mortgages at 778-990-8950 with any questions you have! Don’ts After your pre-approval, don't make any changes to your employment without first checking with us. Changes to your income can dramatically impact your ability to qualify for a home. After your pre-approval, don't buy anything that will create debt such as cars, furniture, electronics, computers, vacations, jewelry, appliances, etc. Don't modify your debts such as getting new loans without first consulting us to see how it will affect your approval. Even small transfers or consolidations can have an impact on your credit scores. Don't always focus on rate. It's easy to get caught up in the idea that comparing mortgage rates will guarantee you get the best bang for your mortgage buck. While this may be true for particular situations, there are many scenarios where this strategy is not effective. Don't panic! The process of buying a home does not have to be painful or frustrating. We are here to help! ### All About Reverse Mortgages A reverse mortgage is a mortgage loan that allows seniors (55+ years old) to refinance or purchase a home. Three of the main benefits of a reverse mortgages are: 1. No income requirement -  2. No credit requirement -  3. No payment requirement -  What?! You don't need to have an income or any credit, and you don't need to pay for your mortgage?? Correct. The Common Myths of Reverse Mortgages 1. The Bank Owns My Home: The homeowner owns their home. There is no change in ownership and never will be.  2. The Bank Can Force The Homeowner to Sell or Foreclose: As long as there is a homeowner who lives in the property, the bank will never foreclose or force a sale.  3. Upon the eventual sale of the home, I or my beneficiaries will owe more than the house is worth: This is not the case. The reverse mortgage lender will only get the value of the property and will not go after more homeowner assets, even if the home is “underwater” on the mortgage. Reverse Mortgage Use Cases Pay off debts and/or relieve financial pressures. This is often the most cited reason to get a reverse mortgage. Preserve investments and maintain financial independence.  This is a big one! A reverse mortgage can increase someone’s net wealth when combined with financial planning. Arrange for in-home care or renovate to improve home’s mobility Give loved ones an early inheritance Help your children or even grandchildren buy their first home Pay for unexpected expenses Buy a vacation property Improve tax-free cash flow Main Reverse Mortgage Downside OK, so reverse mortgages have gotten a lot of flack... First, in the US, reverse mortgages are not well regulated and there have been instances where seniors have been kicked out of their own homes. This is not the case in Canada: reverse mortgages are well regulated and these issues don't come up! The one real downside of reverse mortgages is that they have higher rates than normal bank mortgages. Almost all other reverse mortgage disadvantages stem from this higher rate. A conventional mortgage may have a rate of 5%, whereas a reverse mortgage would have a rate of 6.5%. The reason why the reverse mortgage has a higher rate is due to the fact that these mortgages are inherently more risky to the lender. Depending on how long the homeowner lives, it’s possible that that homeowner will owe more than the equity available, and since the reverse mortgage lender will never go after any additional assets, the lender may lose money on the mortgage. So why the heck would anyone want a reverse mortgage? Well, for starters, seniors who have no credit, or do not have enough income to satisfy a specific amount, would require a reverse mortgage over a traditional mortgage. Secondly, a reverse mortgage, no matter how much money is outstanding, and no matter what happens in the market, the mortgage will never be called (requested to be repaid). Remember, this is a no payment mortgage, allowing seniors to stay in their home for as long as they live without worrying about mortgage payments or renewals, etc. Furthermore, if we compare home equity lines of credit (HELOC) vs reverse mortgages, after a while and once the limit of the HELOC is reached, the borrower would have to start paying monthly payments... With a reverse mortgage, there's no limit and monthly payments are never required to be paid. Additionally, even if the home's value decreases drastically, and decreases to a point where the mortgage is a higher value than the property, the lender eats the loss; and there's no requirement to pay any other money (apart from the proceeds of the sale) from the client's estate. OK, lastly, with any conventional mortgage or HELOC, if there are two borrowers at the outset of the mortgage/HELOC, and one passes away, this technically opens up the mortgage/HELOC to be called as the terms of the mortgage (IE, two borrowers) has changed. The mortgage/HELOC can be called at this time, forcing repayment or sale. With reverse mortgages, a death of one of the borrowers may be expected and no change occurs. I hope I was able to provide you with a few benefits of why some borrowers go with reverse mortgages. Yes, their interest rates are higher, but there are many benefits and for the right borrower, it's a fantastic solution. ### Japan’s Yen and Market Volatility I was reading quite a few pieces on the beginning of August’s market volatility but one in particular, from my investment advisor, caught my eye. It seems like the decline in stocks from over the first week of August have been eliminated, which is great news. A key driver of the market turbulence was the unwinding of the Japanese yen carry trade. I find this incredibly interesting… Imagine the global financial market as a giant game of Jenga. The yen carry trade has been one of the bottom pieces, quietly supporting many investment strategies. Here's how it operates: Investors borrow money in Japanese yen at very low rates (Japan has had incredibly low rates for quite a while)., They then invest that money in higher-yielding assets around the world, often in US stocks and bonds. It's essentially like taking out a low-rate loan to invest in a higher rate asset. Investors are trying to make arbitrage here. Recently, the Japanese yen has strengthened by 14% in just one month. This rapid appreciation is primarily due to the Bank of Japan finally announcing interest rate increases after years of low rates. This sudden increase in the yen required investors to rush to sell their assets so they can pay back the low-interest rate loans in a much more expensive currency... As they sold assets, primarily in the US stock market, it's as if someone suddenly yanked out that Jenga piece, and the whole tower started to wobble. Japan's stock market (the Nikkei) plummeted 13%, marking the single largest one-day drop since the Black Monday crash of 1987. The unwinding of stocks (sale of stocks), combined with some concerning economic indicators created a perfect storm for market anxiety.  The carry-trade is what caused the market volatility at the beginning of August. Interesting? I think so :) PS - the Bank of Japan mostly reversed its decision to increase rates and the market normalized pretty quickly. ### Current Interest Rates Fixed interest rates have been decreasing steadily over the past four months. At the same time, the variable rates have decreased due to the prime rate decreasing. At this time, half of our clients are going with a variable rate and the rest (on average) are going with the 5-year fixed rate for insured mortgages the 3-year fixed rate for uninsured mortgages. The changes in rates above in (mostly) green show the difference from 1 month ago. It’s important to note that these rates are not final - we can get better rates in many circumstances. The rate offered is subject to: your lender, date of closing of your mortgage, as well as mortgage size. The sooner the mortgage closes from the rate request, the better the rate, and the higher the mortgage size, the better the rate.  Rate Analysis:  The Bank of Canada (BoC) decreased the overnight rate by 0.25% to 4.50% on July 24th. This has decreased bank prime rates to 6.70%. It is widely expected that more rate cuts will be on the horizon. At this time, the market has priced in three more rate cuts in 2024. The next Bank of Canada meetings are on September 4th, October 23rd, and December 11th. Fixed mortgage rates are still crawling downward, with the largest decreases coming in at the 5-year fixed rate option. The yield curve is still inverted for fixed rates which means that the longer the term, the lower the rate. Historically, the shorter the term, the lower the rate. So what should people do…? Should they go fixed? Variable? What about going with the 5 year versus the 3 year fixed rate? With interest rates coming down, one would think that going with a shorter term is the best bet (so that the borrower can renew at lower rates sooner). However, the variable rate gives us quite a bit of flexibility with it comes to rates.  First, I think that, in many cases, homeowners who pick the variable rate will be better off over 3 to 5 years. However, the key here with the variable rate is that this product allows a homeowner to convert and “lock-in” their variable rate into a fixed rate. And, since we’re expecting fixed rates to decrease over the short term, getting a variable rate for 3-6 months and then converting to a fixed rate may be the right choice. I personally just renewed one of my mortgages into a variable rate, with the expectation that we will be converting this rate to a lower fixed rate within a few short months. ### BC's Tenancy Notice Rule Changes Effective July 18, 2024, British Columbia will increase the notice period (2 months moving to 4 months) required to be given to a tenant to vacate a property when a buyer intends to occupy it. Beyond affecting landlord-tenant relationships and importantly for mortgage brokers, this extended notice period has unintended negative consequences for buyers who intend to occupy the property and finance their purchase. Conditions for Ending a Tenancy The Residential Tenancy Act allows a seller to end a tenancy of a rental unit if the following conditions are met: The seller enters into an agreement in good faith to sell the rental unit. All sale conditions have been satisfied. The purchaser asks the landlord, in writing, to give notice to end the tenancy on one of the following grounds:The purchaser, or a close family member, intends in good faith to occupy the rental unit. The purchaser is a family corporation, and a person owning voting shares in the corporation, or a close family member, intends in good faith to occupy the rental unit.  Notice Period Extension Starting July 18, the notice period required to be provided to the tenant will increase from two to four months, with the notice beginning on the date of the next rental period. For example, if notice is given on July 22 for a month-to-month tenancy that starts on the 1st of each month, the tenant is not required to vacate the property until November 30. Compensation to Tenants If the stated purpose for ending the tenancy (that is, the occupancy) is not fulfilled within a reasonable time after the effective date of the notice and the property is not used for that purpose for twelve months, the landlord (or the buyer who caused the notice to be given) owes the tenant an amount equal to twelve months' rent. Implications for Mortgage Approvals The four-month notice period means that often more than 120 days will be required for the seller to provide vacant possession to the buyer. This has significant implications for mortgage approvals:  Interest Rate Holds: Typically, interest rate holds are for 90-120 days. If that period expires, the rate hold expires. At the time the offer is entered into, buyers will not know the ultimate rate or payment they will be charged. Accordingly, they will not know if they can afford the new rate or payment. Approval Based on Current Rates: Buyers’ mortgage approvals will be based on the rate at the time of their mortgage application, which could change if interest rates fluctuate. An interest rate and approval cannot be "guaranteed" beyond 120 days, meaning a buyer who qualified for a mortgage initially may not qualify 120 days later. The buyer may be left unable to obtain the mortgage funds needed to complete the purchase. Owner-Occupied Purchase: A buyer approved by a lender for an owner-occupied purchase is not approved, except if an exception is made, to take possession of the property with a tenant in place. A tenant being present can prevent the lender from making the loan the buyer needs to complete the purchase. Insured Mortgages: For insured mortgages (putting less than 20% down), the presence of a tenant reclassifies the property as a rental from the lender's perspective. Insurers do not allow rental properties, leading to financing declines. This disproportionately impacts first-time buyers, who may find themselves unable to secure financing. Investor Impact: Investors experiencing cash flow issues due to rising rates will face additional challenges selling tenanted properties. Difficulty in accessing properties and the extended notice period reduce the appeal to potential buyers, exacerbating the housing supply shortage. Unintended Consequences Left unchanged, the unintended consequences could include fewer sellers renting out parts or all of their properties, fewer buyers being willing to purchase a property where a tenant has to be vacated, fewer offers being accepted if longer closing periods are required, more transactions collapsing at the last minute, lenders charging higher mortgage rates to cover increased risks, fewer transactions being financed, and ultimately less housing being constructed or available.  This is all counter to the goal of increasing housing...  ### Pinsky Mortgages - In The News I'm Eitan Pinsky, owner of Pinsky Mortgages in beautiful Vancouver, BC. I’m excited to share that I've been featured in several major news outlets, including BNN Bloomberg, Global News, and The Globe and Mail. It's truly an honor to be recognized for the work my team and I are passionate about—helping people navigate the mortgage process with confidence and ease. As a dedicated mortgage broker, my goal has always been to provide personalized, professional mortgage solutions tailored to each client's unique needs. Whether you're a first-time homebuyer or looking to refinance, Pinsky Mortgages is here to guide you every step of the way. Thank you for your continued support, and I look forward to helping more of you achieve your homeownership dreams.-Eitan "What Mortgage Brokers Are Seeing With Renewals Amid Rate Hikes" - Nov 2, 2022 Click to read full article -------------------------------------------------------------------------------------------------------------------- "Variable Rate Mortgage Benefits Downsides" - March 13, 2024 Click to read full article -------------------------------------------------------------------------------------------------------------------- "Could 10-year mortgage terms help ease ‘payment shock’ for Canadians? What to know" - May 14, 2024 Click to read full article -------------------------------------------------------------------------------------------------------------------- "A busy January has Vancouver realtors bullish on the market" - Feb 16, 2024 Click to read full article -------------------------------------------------------------------------------------------------------------------- "B.C. builders take small comfort from interest rate downturn" - June 14, 2024 Click to read full article -------------------------------------------------------------------------------------------------------------------- "The best mortgage strategies for a rising interest rate environment" - June 14, 2024 Click to read full article ### Why New Condos May Be a Bad Investment Our housing market has been strong and home values have significantly increased over the past several years due to:-Too little construction of new housing, and-Underinvestment in single family housing-A decade of historic low interest rates-Speculation in housing for house flipping,-More investors (mom and pop) as well.-Private/alternative credit/mortgages is helping.-The magnitude of the population boom!!! This is the biggest story in Canada.The increases could all be in the rear view mirror though… especially for presale condos. The next few paragraphs will outline why presales in general may have issues.Immigration in CanadaOK, so in Canada, by and large, we have citizens, permanent residents (one step removed from citizenship), and temporary residents (work permits or study permits).Before 2019, there were about 200,000 temporary residents coming to Canada per year, along with approximately 500,000 permanent residents.However, over the past three years, we’ve seen the numbers grow for temporary residents from 200,000 to a whopping 800,000 people per year. So in 2022 and 2023, we had nearly 1.3M new people coming to Canada to study, work and eventually get their citizenship.1,300,000 new residents per year is a mind boggling number. This is 3.25% of our population every year!And, once someone is in Canada, it’s very easy to get a permanent residency because if someone has studied in Canada and if they are already here, they get more points towards being able to apply for their permanent residency.This is why the rents have increased… The country has been bursting at the seams. This is one of the reasons why rents and housing have increased so much.I’m pro immigration but it has to make sense with our capacity as a country to absorb all of the new people. It seems like jobs are one thing but housing is another.Light at the end of the tunnel? The Government is now decreasing these temporary residents who are allowed to come in. The number of total study permits given out is going to be cut by 35%; however, in BC, due to proportionality of how many study permits we have issued, our study permits will be cut in half.Additionally, Canada’s immigration minister Marc Miller said that we’re going to target temporary foreign workers and decrease their share of the population from 6.2% to 5% over the next three years.This is actually a crazy number to think about… How can we decrease Canada’s share of temporary residents? We have to kick some out…We’re going to see a reduction of roughly 200,000 temporary residents per year. So we had a growth of 800K in temporary residents per year for three years and now we’re going to be minus 200,000. This is a full 1M person swing in people.I feel like the country and the economy are sleeping on this.As a complete aside, if you’re an investor… how do you mitigate your portfolio against this type of change in Canada’s demographics? Or, how do you take advantage of it?But here’s the issue though. If we have less immigration, we’re going to have less growth in the economy.. fewer people spending money, and fewer people needing to find housing. And, where do students and temporary workers find housing? In condos and specifically, smaller rental condos.This is one aspect of what’s happening in Canada right now.Mortgage PressuresWe have another problem: a sizeable portion of mortgage that are with a fixed-payment variable rate mortgage, and also fixed-rate borrowers who are renewing their mortgage in the next ~2 years.About 1/3 of the mortgage market is variable and about 80% of these variable rate mortgages have fixed payments. With these mortgages, as interest rates go up, less and less principal is being repaid. This is the part of the mortgage market that’s the most at risk.When these fixed-payment variable rate mortgages renew, they will reset to the higher rate, and reset to the original amortization schedule. This is a double whammy of payment shock (payment shock is when there’s a shock in a mortgage payment due to increases in interest). So if we roll this forward, for this cohort, the median increase in payments will be about 60%.Example: A borrower gets a $500,000 mortgage with a shiny 1.10% variable rate in 2021. The payment on this mortgage, at 30 years amortization was $1,631, of which, at the outset, $458 was interest and $1,173 was principal.Over the past few years, interest rates have skyrocketed 4.75%, and the borrower’s current monthly payment did not even cover the interest of $2,437 per month. The difference in total payment ($1,631) and interest ($2,437) provided for a potential capitalization (adding to) the mortgage, or an increased payment ($806) by the borrower to cover the interest.Notwithstanding, let’s assume that the borrower paid little to no mortgage off over the course of 5 years and it’s now 2026 and time to renew…If we were to renew at a rate of 4.5%, and now at an amortization of 25 years, the new payment would be $2,767, or approximately 70% higher than the original payment. This is a huge blow to someone’s budget and potential spending lifestyle choices.OK, so let’s go back to the renewals again. Because most mortgages are on 5 year terms, and since we had a huge boom in origination (new mortgages) in 2020, 2021 and the first half of 2022, we’re going to have a huge renewal cycle in 2024-2027. These mortgages, which includes fixed rate mortgages as well as the fixed-payment variable rate mortgages, are the problematic ones…We have a fairly light renewal year in 2024 (2019 was a slow real estate year and only 15% of mortgages are renewing), 25% of all mortgage renewing in 2025 and then it’s almost 35% in 2026. This is two years of fairly high renewals in 2025 and 2026, which coincides with the 5 year gap when rates were ultra low.So far, Canadians have managed to deal with the floating payments (Scotiabank and National Bank). However, we have no idea how much weaker this segment of the variable rate mortgage population is in consumer spending; something that’s problematic for the economy.There’s a softening in consumer spending and softening in business investment. It’s probably not reflected in economic data… save for delinquencies (non-payment of credit) are on the rise.The economy likely won’t be able to handle so many borrowers who have “payment shock” (CBC’s Renewal Cliff Video) and the bank of Canada may be forced to decrease the rates faster and further than expected. Maybe by end of summer or early fall, it’s going to be more clear that things are going to start breaking in Canada.So I think we’re going to start seeing more rate cuts and potentially even 0.5% rate cuts as opposed to 0.25% at a time. This might not happen in July or September, but I think it’s a distinct possibility for 2025.Something else to think about… we include mortgage interest costs in our inflation numbers. If we keep mortgage rates high and more people renew at higher rates, inflation will continue on the upswing. It makes no sense because we’re chasing our own tail. If we back out mortgage interest costs, we’re already at lower inflation numbers and we should be on the 2% target for inflation.Advanced: but some people say: “well, what about the US? We can’t raise our rates that much higher than the USA or that will decrease our dollar.”To that, I would say that yes, it’s definitely possible our dollar will get hurt because the US and Canada have vastly different economies at this time. Additionally, mortgages, due to the nature of 15-30 year terms in the US, do not impact American CPI/Inflation the same way it does in Canada. The increase in rates in the US has not affected every day consumers as much as it has in Canada. So yes, we’ll diverge, and we’ll likely have a decrease in the Canadian dollar vis-a-vis the US.Again, as an investor, how do you take advantage of the potential that the Canadian dollar will decrease against the greenback? I’ve heard a few opinions on this and so far, I’m not taking any action.Condo SpeculationThere are risks in the presale and pre-construction market.For years, developers have priced preconstruction (developments that have not started construction but are being presold) at a premium. Buyers were willing to pay more (per square foot) for the ability to complete a purchase of a home in the future.By and large, many (it’s said more than 80% in Toronto - I don’t know the Vancouver number) of the people who purchased these properties were investors and speculators and they either:1. never intended on living in the property and intended the property to be a rental,or2. never intended on completing the purchase, intending on selling the property prior to completion to take advantage of appreciation.But what happens in the future where we roll forward, and we have to close? If the property did not appreciate enough, a buyer could be underwater on the purchase price and the value at completion. This means that the buyer would have to either sell at a loss (speculators) or put in a whole lot more down payment so they can close/purchase the property. Additionally, even if there was *value* to the condo currently, the rental income doesn’t cover the mortgage payments, let alone the condo fees and property taxes.There have been a lot of fire sales (quick sales at discounted prices) and the condo market in Toronto is at a standstill and prices are decreasing. We haven’t seen fire sales yet in Vancouver but a running joke right now is:Q: What’s the difference between a common cold and a downtown condo?A: You can get rid of the cold but you can’t get rid of the condo!OK Eitan, Get to the PointI feel like new construction condos could be a bad investment, not just because there are inherent risks with developers and completion dates, but because:1. There are going to be fewer buyers and renters due to immigration policy changes2. Mortgage payments will continue to increase for many borrowers, providing for a possibility of homes flooding the market, increasing inventory and decreasing value3. Mortgage payment increases will have severely negative impacts on the economy4. New condos are priced at a premium over something that can be purchased right away.Long story short, the biggest reason I think new condo may not be a good idea is due to the decrease to the demand for purchasing and renting condos due to new immigration policies, as well as the increase in payments to the rollover of mortgages maturing over the next 2 years. These two items together are going to be a potent force (one on the demand side - less immigration, and one on the supply side - higher rates forcing sales) to keep some condo prices low.One last thing to think about: new condos are shoeboxes. Many are built specifically for speculators and investors, without the end user (someone who lives in the condo unit) in mind. I personally think these no-closet, sub-600 sq. ft. condos (and that’s even large for some buildings) have been overbuilt and over-appreciated…  Anecdotally, it has been temporary workers and students who have rented and/or purchased these small units. I mean, it’s hard to raise a family in a 1 bedroom and you certainly can’t in a bachelor pad. If you want to invest in a condo, homes that are even 10+ years old are much bigger and more livable; and don’t come with a premium.*The above article is not investment advice.**A new condo or presale *can* be a good idea if it’s the right property. Every development and every situation is unique - my sentiments are a generalization; I don’t want to get in trouble with all of my Realtor partners . ### Current Interest Rates Summary: Fixed interest rates have been decreasing steadily over the past two months. At the same time, the variable rates have increased (the discounts off of the prime rate have decreased). At this time, the vast majority of clients are going with the 3-year fixed rate.The changes in rates above in (mostly) green show the difference from 1 month ago.It’s important to note that these rates are not final - we can get better rates in many circumstances. The rate offered is subject to: your lender, date of closing of your mortgage, as well as mortgage size. The sooner the mortgage closes from the rate request, the better the rate, and the higher the mortgage size, the better the rate.Quick Economic Analysis:On June 5th, the Bank of Canada (BoC) decreased the overnight rate by 0.25% to 4.75%. This has decreased bank prime rates to 6.95%.It is widely expected that another rates cut may be on the horizon but inflation unexpectedly rose in May, disappointing the BoC as it deliberates the possibility of another rate cut next month.The Consumer Price Index (CPI) rose 2.9% in May from a year ago, up from a 2.7% reading in April. This increase primarily reflects higher prices for services and, to a lesser extent, food. According to a Bloomberg survey, economists had expected 2.6% inflation last month.However, the June inflation data will be released on July 16 (before the July 24 BoC meeting). Barring a significant drop in June inflation, the next interest rate cut will likely be at the September meeting. That's not good for the housing market, which has slowed to a crawl in recent months across Canada as a whole. Vancouver is still humming along but anecdotally, many buyers are still waiting on the sidelines.Interest rate cuts will be more gradual because rapid population growth has boosted economic activity (more on that reversal below), forestalling a recession and adding to inflationary pressure. Dominion Lending Centre’s Chief Economist, Dr. Sherry Cooper, expects the central bank's overnight policy rate, now at 4.75%, to gradually move to 3.0% by the end of next year. ### 30-Year Insured Mortgages 30-Year Insured Mortgages The government just released guidelines for 30-year insured amortizations. These extended repayment periods are earmarked for first-time purchasers of newly-built residences and kick off this August. To get a 30-year insured amortization: 1. At least one of the borrowers on the application must be a first-time homebuyer, meaning they meet one of the following criteria: A) The borrower has never purchased a home before; B) In the last 4 years, the borrower has not had a principal residence that either they or their current spouse or common-law partner owned; or, C) The borrower recently experienced the breakdown of a marriage or common-law partnership. 2. The new home must not have been previously occupied for residential purposes.  3. The mortgage must be high-ratio insured (less than 20% down) 4. This measure applies only to mortgage insurance applications that lenders submit to mortgage insurers “on or after August 1, 2024.” *IE, funding must be well after August 1, because time needs to be taken to underwrite the file.  So… how much will this insured policy truly incentivize new construction, given the typical 20%+ deposit requirements of builders? I suspect not so much.  ### May Jobs Report / Probable July Rate Cut May Jobs Report / Probable July Rate Cut In the first major data release since the Bank of Canada cut interest rates last Wednesday, Statistics Canada Labour Force Survey for May showed a marked slowdown from the April surge. Employment was little changed and the employment rate fell 0.1 percentage points to 61.3%, the seventh decrease in the past eight months. Employment gains were reported in only three provinces in May, led by Ontario, Manitoba and Saskatchewan. Population growth isn’t likely to slow near-term, which means that anything short of about a 45k employment gain will push the jobless rate higher. The jobless rate rose to 6.2%, 1.4 percentage points above the July 2022 cycle low, and the highest level since 2017 (excluding the pandemic). TL/DRThis report did not contain anything that would stop another rate cut at the next meeting, with the possible exception of the rebound in wage inflation. Obviously June data might reverse this trend. CPI (inflation) will be the key data release in the coming weeks--reported for May on June 25 and June on July 16.  ### Interest Rates - June 11th 1. Interest Rates *Interest rates as of June 11th, 2024. Rates subject to change (I have to write that ) Variable v.s. Fixed Right now, we're seeing quite a few people pick the variable rate over the 3-year fixed... I don't blame them. Let's take a look at the numbers. The graph above shows rates decreasing by 0.75% from month 6-12 (technically, rates would decrease before that) and an additional 1.5% over the next two years. This is in line with what CMHC is predicting. CMHC is predicting an additional 50% decrease in rates in 2024, and 1% decrease in 2025 and an additional 1% decrease in 2026. The graph above shows that a borrower would be $5,700 better off (interest-wise) over the course of 3 years if they choose to take a variable. However, since the payments are higher to begin with ($320), they also pay almost $11,500 more in principal payments, providing for a $17,200 difference in final mortgage balance. What's important to note is that while I suspect/expect the variable rate to be the best bet, borrowers are also able to lock in their variable rate into a fixed rate at any time. This feature is called converatibility. So, for those who are squeamish on holding the variable rate, it's my opinion that getting a variable rate now, while rates are still high, would be prudent because when rates decrease over the next 4-12 months, locking in at a lower rate is an option. So, a client may start with a rate of 6.15% and have it go down to 5.4%, but then be able to lock into a fixed rate at 4.5%... Food for thought. It's more important than ever to have a mortgage broker explain the ins and outs of what's possible with mortgages and build a strategy that fits each client. We're here to help!! ### Stats from CMHC's Consumer Survey Good Afternoon Amazing Partners, In today's post 1. Interest Rates 2. CMHC's Consumer Survey *Please call us! 778-990-8950 We're willing to help even if the borrower is not our client. We're in this for your success! Interest Rates**Rates as at May 14, 2024. Subject to change without notice. 5 Yr Fixed (insured)4.74%-3 Yr Fixed (insured)4.99%-5 Yr Fixed4.74%-3 Yr Fixed 5.14%↓ 0.10%5 Yr Variable (insured)6.15%-2 Yr Fixed (insured)5.64%↓ 0.05%5 Yr Variable6.20%-2 Yr Fixed 5.99%-4 Yr Fixed (insured)4.99%↓ 0.10%1 Yr Fixed (insured)6.54%-4 Yr Fixed5.04%-1 Yr Fixed 6.59%- Interesting Stats from the CMHC Consumer Survey You can find the entire report here. 15% of Canadians have undergone a mortgage transaction in the last 18 months.This is anyone who renewed, refinanced, or purchased a new property. Of these,  -18% were home buyers,  -19% refinances, and -63% renewal/transfers. And, of the mortgage transactions, 23% of them were for rental properties. For those purchasing, the top reasons for buying were: 32% - Needed a larger home (upsize) 34% - Change in living situation 34% - Had accumulated enough down payment or were financially ready 36% - Thought that a home is a safe and secure investment 34% - Had greater stability in living situation. Of First Time Home Buyers: 71% were renting before buying their first home 29% were living with family Co-living is becoming more popular: 22% of people share a home with an adult without collecting rent 15% of people share a home with an adult and collects rent from that adult 59% do not share a home with an adult outside of their family Of all purchases, 12% were purchased with an adult family member (read parents buying with children). *At first glance I would have thought this would be higher but it makes sense based on our own numbers with 1/10 people having parents cosign. The vast majority of the time, parents give large down payments over cosigning... So far, in 2024, 38% of homebuyers were involved in bidding wars. It was 41% and 44% in 2023 and 2022 respectively. IE, bidding wars are going down. Realtors are considered the most valued person in the home buying process. In 2024, the proportion of homebuyers who paid the maximum price they could afford was 46% (same as 2023). In Canada, 32% of buyers required mortgage loan insurance. However, this is much more muted in BC and Ontario. I would say it's closer to 15% or less in Vancouver. Roughtly 30% of home buyers received a partial or full gift for down payment. Interestingly, almost double those that used the FHSA used RRSP. There's not enough people using the FHSA... Of the gifted money, the average gift was $77,487 Going on with the FHSA, the awareness of the FHSA is 71% amongst first time home buyers, but only 33% of these buyers actually participated in it. *I think it's early still. The FHSA has basically only been out for about a year... Now this is interesting... 36% of home buyers incurred unexpected expenses during the home buying process... **Repairs are the largest expense... Surprising to me that lawyer fees are a large portion here.  Of those who had expenses, the vast majority used savings to pay for the expenses, but some (39%) used credit of some sort... Of those who got a mortgage, 48% used a mortgage broker. But it's been pretty even throughout the years... If someone was to switch from one lender to another, the major reason was (41%) better interest rates. 79% of mortgage consumers believe that homeownership is a good long-term financial investment 64% of consumers said that they didn't change their timeline to purchasing due to the interest rates. -22% said they purchased sooner due to current interest rates -13% said they postponed their purchase due to current rates. 42% of mortgage consumers are experiencing difficulties in maintaining payment of debt... -24% say credit card debt is difficult to pay -14% say mortgage payments are difficult... -9% and 9% say cell phones and utility bills are hard to pay. -54% of mortgage consumers have no difficulty maintaining their debts... 69% of mortgage consumers chose a fixed rate over a variable rate. - 23% picked variable - 5% picked a combination and 3% don't know... seriously? How can you not know..? 45% of mortgage consumers renovated their home in the past 3 years and 69% plan on doing so in the next 5 years. - Average budget in the past 3 years has been over $22K - Expected renovation budget in the next 5 years will be $21,400. Thanks for reading!!! ### Mortgage Changes Over the Past Year All the Positive Mortgage Changes Over the Past Year 30 years amortization for First Time Home Buyers This is limited to First Time Home Buyers, and only on new construction.  There's a possibility that this will be expanded to resale as well. CMHC and the government are looking into this. The timeline for this is August 1st. I called in to CMHC and August 1st is when we can start to submit applications. So, if something closes just after August first and the application was done beforehand, it won't work. Eitan's Take: This measure only affects a small subset of the market. In general, though, it stokes excess demand and ultimately does little to improve affordability once prices adjust. Also, limits on the size of insured mortgages mitigate its impact in our most expensive cities. Pre-construction sales usually require a 20% downpayment, which limits the use of insured mortgages, which account for only 15% of mortgage originations (IE, only 15% of mortgages are insured, and only a very small subset of that are for new construction).  This is a nothing-burger. Home Buyers' Plan (HBP) limit is now $60,000 (up from $35,000) Contributions are tax-deductible Withdrawals are non-taxable The Home Buyers' Plan limit has increased from $35K to $60K. Buyers who withdraw funds between Jan 1, 2022 and Dec 31, 2025 will have 5 years (before 2) before they must start repaying their RRSP. Apparently this is supposed to be in effect already; however, nowhere online (or at the banks) is there anywhere that says it's possible to withdraw $60K. The official HBP website still shows $35K. Eitan's Take: This is a great option for people who have high incomes and want to decrease their current taxable earnings and reinvest in their RRSPs over the next 17-20 years. However, only a small portion of the population ever even comes close to $35,000 so getting up to $60K only really helps a small minority. Notwithstanding... This is NOT a nothing-burger.  First Home Savings Account Contributions are tax-deductible Withdrawals are non-taxable. $40,000 - Total lifetime contribution allowed $8,000 - Total yearly contribution allowed 0% tax on the growth (tax free growth) Carry-forward contributions for 1 year allowed - (eg. $5K year 1, and $11K year 2) Eitan's Take: What a cool program. This is just like the Home Buyers Plan but a buyer does not need to pay back the funds. If you use this, in conjunction with the HBP, without taking into account interest/growth, a buyer has $100,000 of available tax-deductible funds to put into a down payment. If it was two people, $200,000. This is NOT a nothing-burger. This is a burger with all of the fixins! Property Transfer Tax Exemption Changes PTT is 1% on the first $200,000 and 2% thereafter up to $2M (higher PTT over $2M). Prior to the change, PTT exemption for first time home buyers up to $500,000, and a sliding scale from $500,000 to $525,000. New rules: There is the PTT exemption up to $500,000, However, any purchase from $500,000 to $835,000, we ignore the first $500,000 of purchase price. So it is the normal PTT minus $8,000. For example, a first time home buyer purchases a property for $800,000. Normal PTT would have been $14,000 (1% on the first $200,000 and 2% thereafter). However, new rules would allow for a reduction in the PTT of $8,000, making total PTT equal to $6,000. PTT Change on Newly Built Units from $750,000 to $1,100,000. This is for all owner occupied buyers, even if they are not first time home buyers. Eitan's Take: it's about time they changed the PTT numbers. I remember when I got into residential mortgages in 2011 and the exemption was for $425,000. It went up to $450,000 in 2012 and then went to $500,000 soon after. However, it stayed put this whole time, while shoebox condos were selling for more than $500,000.  This is NOT a nothing-burger. This is an ice cream burger with Nutella! Using rental history to build credit The government has stated that they are going to find a way to track rental payments to increase someone's credit score in order for them to qualify for a mortgage. At this time, rental payments do not increase credit. Eitan's Take: OK, not too shabby. This is great for people to improve their credit but banks already take into account positive rental payments as a form of credit; this program would just be more formal. Long story short, lenders already do this... This is a half nothing-burger. Now, here's some negative changes that came from the budget...  There's too much darned spending. We're going to be paying for this for the rest of our lives :( Flipping tax on residential real estate Increased capital gains tax Here's an excerpt from Dr. Sherry Cooper's Analysis: Currently, 50% of capital gains profits are taxed, compared to 100% of a person’s employment income. That will remain the case for the first $250,000 of capital gains income, but it will rise to 66.6% on income above that level. So, the proposal is to reduce the tax-exempt amount to one-third for capital gains exceeding $250,000. Oh, and there's now no $250,000 limit for corporations at all. It's 66.6% right away. Higher taxes in the capital gains will reduce investment in residential real estate, technology, plant & equipment and other productivity-enhancing measures. It reduces risk tolerance (potential profit) at a time when we already have a productivity deficit relative to other industrialized economies. The lower exemption would also apply to businesses for all capital gains, not just those over $250,000. The additional capital gains taxes are expected to rake $19.4 billion into the government’s coffers over the next five years, which is no small measure. This will reduce business capital spending, already at rock-bottom lows, rendering the Canadian productivity problem even more egregious. Higher capital gains taxes also disincentivize investment in residential rental real estate. There's a $40 billion deficit in 2023-2024. Any path to a balanced budget continues to be absent. Eitan's Take: Oy... too much spending and an increase on capital gains is going to hurt investment. I'm not a fan. ### Depreciation Reports Are Now Required I just learned that yesterday the BC Government has ordered that all stratas with 5 or more units must obtain a depreciation report on a five-year cycle. The order can be found here and here. Effective July 1, 2024, stratas may no longer hold an annual 3/4 vote to defer getting a depreciation report. Strata corporations without any deprecation reports, or depreciation reports completed prior to December 31, 2020 must have a new report by July 1, 2026 if in the lower mainland and Victoria, and July 1, 2027 in all other areas of BC. New strata corporations established on or after July 1, 2024 but before July 1, 2027 must get a depreciation report within 2 years of the strata's 1st annual general meeting, and every 5 years after that. As of July 1, 2027, developers will provide funding towards the first depreciation report for new strata corporations with 5 or more units. Funding is a minimum of $5,000 plus $200/strata unit, to a max of $30,000. ### Interest Rates & Neutral Rates 5 Yr Fixed (insured)4.84%↑ 0.10%3 Yr Fixed (insured)4.99%-5 Yr Fixed5.09%-3 Yr Fixed 5.09%↓ 0.05%5 Yr Variable (insured)6.20%↑ 0.10%2 Yr Fixed (insured)5.69%-5 Yr Variable6.30%↑ 0.10%2 Yr Fixed 5.99%-4 Yr Fixed (insured)5.09%-1 Yr Fixed (insured)6.54%-4 Yr Fixed5.09%-1 Yr Fixed 6.59%↓ 0.10% *As at April 4, 2024 **Please note that these rates are for 25 year amortization. For many of the terms, add 0.10% for 30 years amortization. Neutral Rates Historically, the spread between the Bank of Canada (BoC) rate (currently at 5%) and 5 year fixed rates is (on average) 2.35%: if the Bank of Canada rate is 3%, the 5-year fixed rate would be 5.35%.  However, inflation, quantitative easing/tightening, and the current market cycle is making it such that our 5-year fixed rates are already around 5%, or lower than historic spreads. What this means is that once we decrease the BoC rate back down to the 2-3% band (to cover inflation), our interest rate would be 4.35% to 5.35%. Check out the graphs below. One is for a 30 year time horizon of rates and one is the last 10 years. Notice that we've had ultra low rates vs historic rates, which all started with the economic meltdown of 2008. So what are we saying here..? We're saying that the average 5 year fixed rate, based on historic norms, will be in the mid to high 4% range when this is all said and done. We're currently not that far off from this mark already! MORAL OF THE STORY: Yes, I think variable rates are going to come down 2-3% over the course of the next couple years. But, the fixed rates are almost already where they will end up; maybe another .5%-1.0% decrease... Notwithstanding, we also have an inverted yield curve, where the 1 year is higher than the 5 year rate; this is not the norm. In the future, 1-4 year rates will be lower than the 5 year, and it may continue to make sense to stick with lower-term mortgages like we are now. Economic News At this time, mortgage arrears (people late on their mortgage payments) are ticking up, but we're still at historic lows. People are just not allowing their mortgages to get into trouble. The labour market is still strong, with wage growth steady above inflation. However, overall the economy in terms of GDP growth is pretty weak, and this scares many economists. Households are continuing to experience pains from the increase in interest rates, which affect mortgages, and from rental costs increasing. Consumer spending is on the decline, but savings rates have increased.  What's interesting to note is that rate hikes generally have their largest impact, as a general rule of thumb, 6-8 quarters (1.5-2 years) later. We raised rates by 4% in 2022 so it seems like we're just about to feel the brunt of this most recent monetary policy (rate hikes).  What's also interesting to note is that shelter costs (mortgages and rent) make up 30% of inflation. Once the government decreases rates, shelter costs will decrease, prompting the inflation rate to decrease still. It seems like we're almost at the beginning of the downward cycle. I'm all game for that!! ### New Stress Test - Yes and No... This is a YES because BANKS now have a new stress test for their portfolio. The new stress test is about loan-to-income (LTI) and that each bank will be assessed at how much their book of business (number of mortgages) have an LTI above 4.5 times. Basically, if borrowers have an income of $100,000, the mortgage must be $450,000 or lower.  However, this doesn't mean all mortgages must abide by this new LTI stress test. It just means that the banks will on notice that they are only allowed a certain percentage of their mortgages to be above this stress test.  The regulator said that this test is intended "to prevent the buildup of highly leveraged loans during low interest rate periods." This is a YES and NO because it's generally not for individual borrowers. This test is not for individual borrowers and individual files should be OK with LTI above 4.5. However, it's very possible that lenders pick and choose who they allow to have a mortgage higher than their LTI allowed ratio. i.e. each lender is going to have a certain number of mortgages they are allowed to put into a "non-conforming" bucket, and if that bucket is full, and even if a borrower's file works and is under the 44% TDS ratio, the lender could decline it. Right now, a $100,000 income can get a mortgage $465,000 or 4.65 times income, which is above the LTI allowed threshold. It's not too high above it, but it would go into that "non-conforming" bucket. Now, this is based on a stress test of 7.49%. If the rates go down, and the stress test becomes 5.5%, the mortgage would shoot up to $570,000, or 5.7 times income, which would be way over the allowed ratio. So, less of an issue currently, but may become more problematic later. Long story short, this new stress test will make it so that some lenders who have been constantly *abusing* the ratios allowed (approving files that are way above debt to income limits), will now have to cut back on their approvals. There's no word yet on which banks will be affected most and/or if these "buckets" will be filled at all. It's possible that this is a "nothing-burger" because the share of files above the standard LTI is quite small to begin with. If you have more questions, please let me know. Here to help :) ### Variable: Lock in? And if Yes, When? The variable rate does seem like it's a good option now... especially since the discount off prime is now so great. However, the variable rate is still higher than the fixed rate... so when do we lock in to a fixed rate, and does it even make sense to lock in? First off, there are two potential options for people who take a variable rate and who want lower rates in the future… The first option is to wait for the variable rate to decrease and benefit from that decrease, while keeping your mortgage a variable rate. The second option is to wait until the fixed rates decrease, and then lock your variable rate into a fixed rate. In option 2, we could take a variable rate today at 6.3%, say, insead of a fixed rate of 5.09%. If in 4-5 months the fixed rates have decreased, the variable rate could then be locked in and converted to a fixed rate. This "conversion" comes with no penalty.  So what do we do? Stay variable or lock in? I think it all depends on each borrowers' personal preferences. The reason I say this is because A) we don't know the future and what rates will do, and B) we have to ask each person's risk tolerance, and if they are OK with the variable for the long haul, and C) payment that comes with the variable will be "invariably" (ha, see what I did there?) higher. This means that someone who is on the variable may want to switch to a fixed sooner rather than later to take advantage of lower payments. Long story short, the variable is a good option for those who think rates will decrease in the future; specifically, it is good for people who think either the variable rate will decrease OR the fixed rate will decrease. Again, the only issue now is that the variable rate is currently higher than the fixed rates, and make it less appetizing than a lower-payment, fixed-rate mortgage. Well, that's not the only issue: the fact that rates can stay high for longer is another issue altogether... And no, my crystal ball left me when I got married. Here to help with any questions :) ### Advanced Strategies: Cash Damming - Here's What It Is Why is money called dough?! It's 'cause we all "knead it." Cash Damming Cash damming is a strategy to convert non-tax-deductible personal debt, to tax-deductible investment debt. Basically, it's a way to convert your personal mortgage, that is not tax deductible, into tax deductible debt.I personally use this strategy on three of my rental properties and my own personal home. Please don't hesitate to ask me how I do it if you're interested.  *obviously check with a tax professional before you do this. I know I did... The most simple form of cash damming is from personally owned rental properties and is called Rental Cash Damming: the revenue (rent) from the rental property is used to pay down your personal mortgage, and the expenses for the property are paid for by your HELOC. What Are The Benefits of Cash Damming Reduced primary residential mortgage by rapidly paying down the outstanding balance through the revenue of your rental property, At the same time as the above, convert the non-deductible mortgage into tax-deductible debt. Lower personal taxes by applying the tax-deductible interest charges against income. Re-invest tax savings into additional wealth or just have tax savings! I think the most important aspect of rental cash damming is the fact that you're paying down your personal mortgage much faster while (and) each subsequent mortgage payment is going to pay down more of the principal of your mortgage. Who Can Take Advantage of Rental Cash Damming First, you need to have an owner occupied property that has a readvanceable mortgage. A readvanceable mortgage is one that, as you pay down your principal, line of credit room is released, so you can "reborrow," or readvance, that money back out.For example: let's say you purchase a property with a $400,000 readvanceable mortgage. At the outset, your mortgage is $400,000 with a Home Equity Line of Credit (HELOC) with a $0 balance. Now let's say that your normal mortgage payment is $4,000, but half of that goes to pay down your principal. That means you've now paid off your mortgage by $2,000. With a readvanceable mortgage, you now have access to that $2,000 using your HELOC below. Now, just because your HELOC has $2,000 available does not mean that A) you're charged on that $2,000, and B, you've used it. It's available to you to do whatever you want. First point five: You need to have a readvanceable mortgage that allows you to do more than one Lump Sum (prepayment). RBC, HSBC, and National Bank only allowed ONE lump sum per year. This is not sufficient. TD, Scotia, CIBC, and BMO are good contenders here. Second, you need to have a rental property that is in your name. This only works if the property is in your name because if it was in a corporation and you were to funnel the revenue from the property to yourself, you would have to claim this revenue as income. As an aside, the rental property that you have, the rental income and expenses, are treated as a "silo" or independently on your taxes. Regardless of what you do with your rental income/revenue, it still counts as revenue on your "statement of real estate and rental activities" on your T1. Third, you must have separate bank accounts for your rental property and for the revenue that's coming in to pay off your personal mortgage. My advice is to create a specific account for the expenses of your rental property and a specific account for any revenue. How Does It Work? OK so there are a few steps involved and it does take about 10 minutes every month for you to do it. But, I personally pay down my non-tax-deductible mortgage by $8,400 and add $8,900 of tax-deductible HELOC every month. *My cashflow expenses are higher than my income so I actually add more HELOC than I pay down my mortgage by. Step 1: Revenue from my rental properties hit my "revenue" bank account.  Step 2: Pay a "lump sum" prepayment to my personal mortgage from my Revenue account. Step 3: Transfer money from my HELOC into each of my 3 rental property accounts to pay upcoming expenses (mortgage, strata, etc.). That's it :) At the end of the day, I've been able to reallocate non-tax deductible debt into tax-deductible debt while allowing me to pay off my mortgage much faster with each subsequent mortgage payment, and reduce my overall taxes. Love this stuff - here to help if you have any questions. ### Looking at the Variable Again I always find looking at the numbers interesting. If you have anybody who is thinking about the variable, remember, it's more flexible than the fixed rate because you can lock in your variable into a fixed rate at any time, and it has lower penalties. But, just because it's flexible with the option to lock in to lower rates in the future isn't the only reason why some people should choose a variable rate right now... Let's look at the numbers. Let's say we have two mortgages: 3-year fixed at 5.59% and a 5-year variable at 6.55%. In the example below, I've calculated the rates decreasing by 0.5% in 6, 12 and 18 months respectively, and then again by 0.25% in 24 months and 30 months. This is a total decrease of 2% Please remember that 2022 saw a 4% increase in rates and my calculation only shows a 2% decrease over 3 years. The chart above shows that the fixed rate would provide for $2,242 more in interest over the course of 3 years. However, on the downside on the variable, there's almost $400 more in monthly payments per year, or a total of $16,500 less in total outstanding principal after 3 years. Note: these numbers show that the variable is better than the fixed rate over the course of 3 years should the client be able to withstand higher payment. However, it's not the full story... we're not taking into account the fact that the client can decrease their payment by locking in to a lower rate. The next graph shows what would happen if the client was able to lock a new rate at 4% in one year. The payment would go from $3,812 to $2,884, much lower than the 5.59% 3-year fixed-rate payment. The graph above shows that a client would be $11,752 better off should they have taken the variable and switched to a fixed rate in 1 year. Happy to go over any numbers with you.  Just remember, not every solution works for every person. There are pluses and minuses for each option and we want to make sure a solution is tailored properly for a persons unique situation.  ### Buying and Selling - How Dates Can Line Up Buying and Selling - How Dates Can Line UpIt can be fairly complex when you want to buy a new property and you need the equity in a property you want to sell. IE, how can you buy and sell at the same time? How do the dates work?!When you purchase and sell, you can either get a new mortgage and pay out your existing mortgage, or, you can port your current mortgage to your new property. If you’re upsizing and are in need of more money, check out our “porting” article below, which discusses all about how increases to your mortgage can be done.Before we go any further, I want to identify specific dates that are important, and then chart them for various scenarios.-Purchase Accepted Offer (PAO): Your offer to purchase is accepted.-Purchase Subject Removal (PSR): The deposit is due and you have removed subjects and gone “firm” on a property. Once you remove your subjects or conditions to your offer, you are legally required to purchase the property.-Purchase Close (PC): This is the date at which you now own the new property.-Sale Accepted Offer (SAO): This is the date at which you’ve accepted an offer to purchase your own property; you are under contract to sell your property.-Sale Subject Removal (SSR): This is when the purchaser of your property is now firm or legally required to purchase your property.-Sale Close (SC): This is the date at which you have sold your old property and you no longer own it.Possible Scenarios from easy to complicated:A) Sell your property fully and then purchase.In this scenario, you sell your property with subjects removed and then close. Then purchase, remove subjects on the purchase, pay your deposit, then close on the purchase. Easy peazy because we’ve received the proceeds (sale price minus mortgage (if applicable)) from our sale of our property.B) Sell your property with subjects removed and then purchase a new property.B1 The closing date of the sale is before the purchase.ORB2 The closing date of the purchase is before the sale.In the scenario above, you sell your property with subjects removed and then purchase.If the sale of your property (SC) happens before the purchase of your new property (PC), then we’re in easy peazy territory; no extra financing is required.However, if the purchase (PC) happens before the sale (SC) of your property, then you wouldn’t have received the proceeds from your sale yet. This means that bridge financing is required.Bridge Financing: This is when we have had the subjects removed on the sale of our property (SSR) and have purchased another property (PC), but have not yet sold a property. As long as the subjects on the sale (SSR) have been removed, lenders are willing to “bridge” you the money from when you purchase to when you sell. Basically, the lender is willing to give you a mortgage for what you would need after the sale is all said and done, and also lend you more money, the bridge financing, in order to complete the sale. The bridge financing is paid back to the lender as soon as your sale closes (SC).C) Sell and purchase, or purchase and sell and remove subjects on the purchase just after removing subjects on the sale.In the scenario you only committed to the purchase once you’ve made sure the sale (SSR) of your property is firm and binding. In this way, lenders will give you a mortgage assuming that the property that you’re selling is already sold. In other words, as well as the buyer of a property you’re selling as removed subjects, from a lender’s point of view, you no longer own that property and the debt associated with the property is negated.Again, like in B) above, as long as the subjects have been removed on the sale of your property, you can get Bridge Financing.D) Purchase and sell, or sell and purchase and remove subjects on the purchase before the subjects have been removed on your sale of your own property.In the scenario above where you’ve committed to purchase a new property (PSR) and you have not yet sold your current property (SSR), the time in between, the red arrow and red line, identifies uncertainty for you.The key question here is: can you purchase and close this new property (PC) if you are not sure that you can sell and close your current owned property (SSR and SC).If you do decide to go firm on the purchase of a property (PSR), you must have a backup plan. The backup plan cannot be wishful thinking in terms of: “I hope that someone buys my property…”The backup plan must be:1. You can get approved for a new mortgage even if you have not sold your current property, and/or,2. You have “interim financing” available for you.Interim Financing: This financing is like bridge financing but much more expensive. It assumes that both properties are still owned. There are usually fees involved, with much higher interest rates; bridge financing can cost anywhere from $5,000-25,000. Interim financing is a last resort…Interim financing could be considered in the following scenario:You have found your dream house!! You would do anything to purchase this next property and paying a fee and higher mortgage interest costs is OK for you. In this case, if you do find your dream house and must go “firm” on the purchase of your property, interim financing would help you know that you can actually purchase this property (PC) and hold both your current property and this new dream house at the same time. The interim financing would be paid back/off once your property sells (SC).Now, prior to actually closing the purchase (PC), if you do indeed find a buyer who removes subjects on your sale (SSR), you would now be able to get bridge financing. Phew.…So remember, if you’re purchasing a property and removing subjects (PSR), make sure the subjects have been removed  on the sale of your property (SSR), or have a backup plan.Each situation is unique so please don’t hesitate to contact me if you have any questions! :) ### First-Time Home Buyers’ Tax Credit (HBTC) First-Time Home Buyers’ Tax Credit (HBTC)First-Time Home Buyers’ Tax CreditThe government allows first time homeowners to save $1,500 on their taxes by claiming $10,000 on Line 31270 on their 2023 tax returns.In order to save $1,500, the following criteria must be met:Homeowner (or spouse/common-law) purchased a property in 2023Homeowner did not live in another home inside or outside of Canada that was owned (by homeowner or spouse/common-law) in the year of purchase or in any of the four preceding years.Basically, if you haven’t lived in a home that you or your spouse owned, you can claim this tax savings. All you have to do is enter $10,000 on line 31270.Some additional notes:-The HBTC can be split between purchasers.-Persons with disabilities can apply more than once.-You can claim for years past if you haven’t claimed before (by adjusting your previous tax returns - can be done through My Account on CRA online). The claim amount was $5,000 for 2021 and years prior to that.Canada.ca’s website explaining “Line 31270” can be found here. ### Current Interest Rates & Analysis - Jan 8, 2024 Current Interest Rates & Analysis - Jan 8, 2024Summary: Fixed interest rates have been decreasing steadily over the past two months. At the same time, the variable rates have increased (the discounts off of the prime rate have decreased). At this time, the vast majority of clients are going with the 3-year fixed rate.The changes in rates above in (mostly) green show the difference from two weeks ago.It’s important to note that these rates are not final - we can get better rates in many circumstances. The rate offered is subject to: your lender, date of closing of your mortgage, as well as mortgage size. The sooner the mortgage closes from the rate request, the better the rate, and the higher the mortgage size, the better the rate.Fixed rates have come down, specifically due to expectations of the variable rate decreasing in the future. Fixed rates are “leading,” whereas variable rates are lagging.Remember in 2022 when the fixed rates started increasing quickly in March till May but the variable rate really only increased heavily in July? The bond market (fixed rates) expected rates to increase so they increased their rates beforehand. The same thing is happening now, where rates have decreased over the past two months by over 1% for most terms. It’s a sign of the variable coming down in the future.AnalysisA few months ago I predicted rates have stopped climbing. It seems like rates have stopped climbing. However, in 2022, I, along with every other pundit out there, thought that inflation was “transitory” and that we would not have an increase in interest rates in the way that we did… Long story short, even the government told us that rates would not increase. They were wrong and we were caught unaware.Now, rates are on the way down. We’re consistently seeing this with our fixed rates (leaders) and we’re being told by economists that the Bank of Canada will be decreasing their rates, starting this year.I don’t want to be caught unaware again. However, even if rates DO decrease, the prevailing term and option that we are recommending (at this time) is the 3-year fixed.I wanted to share the highlights of what Benjamin Tal (Chief economist of CIBC - highly respected) and the Financial Post’s Ted Rechtshaffen expect.Key Highlights:The Bank of Canada's overnight rate in 2023 started at 4.25%, ending the year at 5%, a rise of 0.75% after a 4% increase in 2022.Predicting a 2% rate decline by the end of 2024, back to a 3% overnight rate.Detailed predictions for 2024 rate changes:-No change on January 24 and March 6-A 25-basis-point drop on April 10-A 50 bps drops on June 5 and July 24-A 25 bps drops on September 4, October 23, and December 11Predictions are based on negative Canadian economic trends, interdependency with other central banks, and historical Bank of Canada rate moves.Eitan’s Predictions: The prediction of 2% decrease to rates in 2024 above are slightly more than I would expectI expect rates to decrease by about 1% this year.It’s speculative (everything is speculative) to think that we will not just have inflation coming back down, but that the economic data will fall precipitously as well (requiring massive rate decreases). There’s a good case for rate cuts but the economic data is generally pretty good - there was a 5.8% year over year wage increase in December and this growth isn’t showing any signs of weakening.We also have massive immigration, spurring economic growth, although job gains aren’t as high as we would like. It seems to me that a gradual decrease in rates is what the Bank of Canada is going to do, as opposed to cutting too much too quickly.Further, the Bank of Canada wants, at all costs, to eliminate any possibility of having to hike rates again. A quick decrease in rates, creating a frenzy of economic growth and FOMO in the housing market has a good chance of increasing inflation again… mitigating against this is one of the Bank of Canada’s key goals. ### All About Mortgage Porting Porting a mortgage means bringing the mortgage from one property to another.This is usually done to keep a specific mortgage interest rate when the current rates are higher. Porting can only be done when a sale and a purchase (or a purchase and a sale) are completed within 30-120 days of each other (depending on lender). Why would you want to port a mortgage?-If you have a penalty to leave your current mortgage.-If your current rate is better than the prevailing rates at the time of the port and you want to keep your current rate. What if more money is needed?There are three (1, 2, 3) options, depending on the policies of your lender. 1. Increase the current mortgage Your mortgage increases in value and we “blend” your current rate with the new rate available. There are two ways this can be done: A) Blend to Term: If you started with a 5 year mortgage, and you have 3 years left, you will port over your 3 years left mortgage and increase the mortgage. Your rate will be a blend / weighted average of your current rate and the new rates. This is the most prevalent type of mortgage blend. The blending of a rate works like this:Let’s say you have a $500,000 mortgage and you need $800,000. The increase you need is $300,000. To put this in fractions of the total, you have 5/8th and 3/8th. Now, your $500,000 was a 5 year term but you have 3 years left. The rate you currently have is 3.14%. However, the new 3 year rates are 5.59%. In order to get your new rate, you would have to do a weighted average of both rates: 3.14% x (5/8) + 5.59% x (3/8) = 4.06% In this scenario, you would have a new $800,000 mortgage at a rate of 4.06% for 3 more years. B) Blend and Extend: Some lenders allow (and some lenders require) you to blend your 3 years left mortgage with a new 5 year term. In some cases, and depending on where rates are, this could be advantageous or it could be detrimental. Your new rate here is harder to calculate because some lenders add in mortgage penalties to blend their rates. Generally, the calculation would be similar to the blend to term above, but if the rates are higher than your older rates there will be a gross up on the 3.14% (the lender would tell us what this is at the time) and it would be blended to the new 5 year fixed rate. In this scenario, you would have a new $800,000 mortgage at an unknown rate (somewhere in between your current rate and the new 5-year rates) for 5 years. 2. Get a new mortgage segment In this case, you will move over your current mortgage as is, and get a new mortgage “segment” under a new collateral mortgage. A collateral mortgage can be looked as an “umbrella” for mortgage segments. Your current mortgage would transfer to the new property as is, and a new mortgage “segment” would be added at the new rates. Your new mortgage segment can be whatever you like it to be: a new variable rate, a fixed rate and at any term. In this scenario, you have a new $800,000 collateral mortgage with two segments comprised of one $500,000 mortgage with 3 years left at 3.14%, and another segment at $300,000, which you chose to have as a 5-year variable at 6.7% or a 3 year fixed at 5.59% (or anything else). In this scenario, you would have two payments: one for the old mortgage and one for the new mortgage, but both adding up to $800,000. 3. Get a new Home Equity Line of Credit (HELOC) This strategy is similar to getting a new mortgage segment, but it allows you instead to get a HELOC under a collateral mortgage. Instead of having a new mortgage segment, you would fund your extra $300,000 using an increased ($800,000) collateral mortgage with $500,000 ported over as is, and with a $300,000 home equity line of credit. This strategy can be used in conjunction with strategy 2: you can have 2 or 3 mortgage segments as well as HELOC segments. Why would someone want a HELOC?HELOC’s allow you to reborrow from your home as you pay down your mortgage. They are called Re-advanceable mortgages and they allow for some advanced mortgage strategies that can increase overall net wealth. Please check out my readvanceable mortgage page here. What if less money is needed?If you have to port your mortgage and you need less money, then the key here would be to see if you have any prepayment privileges and use those prior to, or in conjunction, with paying off a portion of your mortgage. If you had a $500,000 mortgage and you only needed $400,000, and your prepayment privileges are 15% ($75,000) per year, this means that once you port, you’ll have $25K of mortgage that will be subject to mortgage penalties. The penalties could be low (1%) or high (5%). If they are very high, you may want to wait until the next year to pay off the additional $25,000, and keep a new $400,000 mortgage. As always, porting can be complex and require proper planning. Please don’t hesitate to contact us if you need more information or would like to discuss a specific case. ### Rates Held! No rate increase Dec. 6 Good Morning Amazing Partners, Great news! No rate increase.  Although, this was suspected and expected. Bottom line: Overall inflationary risks have continued to recede in Canada after dominating the economic landscape for the past two years, and the risks are gradually becoming more equally weighted with downside growth risks (we're expecting the economy to shrink). Currently softer trends in consumer spending and labour market data are still consistent with a “mild” economic downturn, and are expected to be extended into early 2024 alongside more easing in inflation pressures. Still, the BoC will be cautioning against rate cuts too quickly. Most economists think that rates will hold until the 2nd half of next year. However, the "market" is assuming rate cuts in the FIRST HALF of next year, making our bond market and fixed rates to decrease. This has inflationary pressure (lower rates) so the "market" may cause a longer term higher-than-expected variable rate. DLC's Chief Economist, Dr. Sherry Cooper, will be presenting on the rate (non)change today at 11:30AM. You can watch it live here or click the image below. ### Has Zoning Been Eliminated? Article Summary: The BC Government is going it alone and has introduced legislation to force municipalities to allow for higher density.The cost of housing isn’t *strictly* a supply and demand issue but it is heavily heavily negatively impacted by the number of units available for sale/rent (IE, yes, supply is the number one major factor in the rising cost of real estate).“Anyone looking for a place to live in a community they love knows how hard it is – and outdated zoning rules are making that even harder,”..said Premier David Eby.He goes on to say:“Constructing mostly high-rise condo towers or single-family homes means B.C. isn’t building enough small-scale multi-unit homes that fit into existing neighbourhoods and give people more housing options that are within reach. That’s why we’re taking action to fix zoning problems and deliver more homes for people, faster.”Mr. Eby is mandating that all municipalities with 5,000 people or more must allow:-3-4 dwelling units on single family lots, and-Up to 6 dwelling units on larger single family lotsThe new rules require local governments to update zoning bylaws to permit this change. This is a welcome change when many NIMBYers (Not In My Back Yard) stifle any potential change a city or potential mayoral party wants to enact. Basically, the BC government is telling municipalities that they don’t have to worry about zoning and have to “police” what can and cannot be built with regards to small scale multi-unit housing.The full news brief can be found here. ### A 5-Year Fixed May Be a Bad Idea! A 5-Year Fixed May Be a Bad Idea!Summary: Long-term mortgages have higher penalties than shorter term mortgages or variable mortgages, and these penalties would outweigh any benefit of refinancing to a lower rate in the future.The term you choose right now will affect much more than your interest rate. A specific mortgage term, most importantly, will affect your prepayment penalty should you plan on refinancing when rates decrease. And yes, we all believe rates will decrease (and I’m hoping sooner rather than later).Ok, so let’s do a simple break down on variable and fixed rates:Variable RatesYou Get: Lowest Prepayment penalty (3-months interest).Variable RatesYou Give Up: Rate certainty: interest rates can fluctuate and payments *may* fluctuate (some variable-rate payments are fixed, albeit with trigger rates possibility)Fixed RatesYou Get: Rate certainty: interest and payment certainty.Fixed RatesYou Give Up: Prepayment penalty certainty - Interest Rate Differential (IRD) may exceed 3-month interest.So to summarize the above, if you pick rate certainty, you’re stuck with the possibility of a very large penalty if you break/prepay your mortgage entirely. On the flipside, if you choose variability in your mortgage, you will have a low penalty.On fixed rates, The IRD, prepayment penalty, is charged to compensate a lender when they are required to re-lend mortgage funds that have been paid out prior to a term ending. I.e., if you prepay your entire mortgage, there’s a penalty. Yup, we all know that. But, there’s a little bit of a method to the madness.Now, when paying out a mortgage, if the lowest penalty you can get is a 3-month interest penalty, when would the IRD penalty be large/punitive? The quickest, most accurate answer to this is that the further you are from the renewal date, the larger your penalty! In other words, if you break your 5-year mortgage in the first couple of years, you could have a really high penalty.That’s not the full story, however. The second part of the story is that if you pay off your mortgage, and your rate is low compared with current rates, the lender will be happy because they can then turn around and re-lend your prepaid mortgage money at a higher rate. In this circumstance, the prepayment penalty would be low, or as high as a 3-month interest penalty.However, if you pay off your mortgage when your rate is high, and rates have decreased, the lender "*would* have gotten more interest from you than from re-lending that money when rates are lower, and the prepayment penalty would reflect that fact. Basically, you could be penalized heavily in prepayment penalties due to paying off your mortgage early. The prepayment calculation here is called the Interest Rate Differential or IRD.So, IRD penalties can be extremely high when:1. You have a long time left on your mortgage, and2. Rates have decreased from when you got your mortgage.Below is a screenshot of one of the major bank’s IRD penalty calculations.To explain the above, A, D, and E are easy. The problem comes with B/C… Banks provide a “discount” off their base rates to give you your rate. If rates are high, and you get a “deal,” your discount would be higher and your potential penalty in the above would be higher too.Based on the above example, the penalty would be 9%! of a borrower’s mortgage. Holy heck!! A 3-month interest penalty would have been 2.25% of the mortgage.I want to be frank here… I know how high IRD penalties can be. I personally paid an IRD penalty in 2020 when rates decreased due to Covid. I had a 3.74% rate and refinanced, after 1 year, into a 2.89% rate. My penalty, on appx. $900,000 was $27,000. A penalty of over 3% of your mortgage almost outweighs any benefit of refinancing. In my case, that ~1% change saved me $36,000 over 4 years so it made sense.. barely. I refinanced again later.Potential Real World ExampleLet’s say we get a 5-year fixed rate mortgage today at a major bank, and then we want to pay out the mortgage in 1 year due to rate decreases. *I can see this situation happening all too easily.Potential Mortgage DetailsA) Our current rate today: 5.74% (this provides for a discount of 1.35% as current posted rates are 7.09%)B) Current rate less discount = 3.84% (5.19% - 1.35%)(in 1 year, I’ve assumed the posted rate for a 4 year will be 5.19%)C) Penalty Rate: 1.90% (5.74% - 3.84%)D) Paying out $400,000E) 48 months leftF) Penalty = (C x D x E) / 12 = $30,400 (1.9% x $400,000 x 48) / 12The penalty here is 7.6% of the entire mortgage! A three month interest penalty  would have been 1.44% of the mortgage.There moral of the story here is that borrowers should be very aware of the risks of choosing a long-term mortgage if they think that rates are going to come down and they want to benefit from switching to lower rates.Fixed-rate mortgages are stacked against borrowers in this specific situation but are somewhat better with monoline lenders. Lenders like First National do not take into account a “posted rate” and “discount” and their penalty would have been $8,800 or 2.2% of the mortgage.I personally believe that rates are going to come down. It behooves us to not just think about what the breakeven rate we would need to get if we were to choose a 3-year or a 5-year, or even a 2-year mortgage, we need to think about the possibility of breaking mortgages for better rates within the term… not to mention the need to sell a property; life happens!Large penalties just suck, and lower term mortgages (2 and 3 years) and variable rate mortgages can bypass them. Again, this is especially the case while we’re at the above average rates we’re still seeing at this time. ### The First Home Savings Account (FHSA) The FHSA is an excellent opportunity for first time home buyers to save for a home, decrease income taxes, and save on investment growth too!When saving for a home, consider the FHSA before contributing to a TFSA or RRSP.Key Points-Must be 18 years of age and be a resident of Canada to contribute-$8,000 total yearly contribution $40,000 total lifetime contribution-Contributions are tax deducted in that year-Growth on contributions is tax free-Carry-forward contributions are allowed for 1 year (eg. $2K year 1, $14K year 2)*Carry-forward only works if you open an FHSA account. I.e., if you open an account and put in $0 in 2023, you can put in $16,000 in 2024.**You can open an FHSA account at any financial institutionWithdrawals-No tax on withdrawals if the withdrawal is for a first time home buyer’s purchase.*A first time home buyer is someone who has not lived in a home that was personally owned for the preceding 4 years. IE, this program can be used more than once.-Must withdraw in the year of the purchase, and up to 30 days after possession.-The FHSA ($40K) can be used in conjunction with the RRSP Home Buyers Plan ($35K); up to $75K + growth in the FHSA could be available to a new home buyer.Additional Points-Can transfer money to and from RRSP into/from FHSA*This is great if you don’t use your FHSA - transfer to your RRSP tax free-Can delay claiming the FHSA tax refund.*This is great for tax planning for lower/higher tax bracket years.-Any investment that qualifies for a TFSA or RRSP is also FHSA approved-No spousal contributions and contributing as an American would cause issues.To sum up, if you’re a first time home buyer, the FHSA is just like a TFSA but better!Please email me if you would like a recommendationto a financial planner to help you set up an FHSA today. ### 3-Year Fixed vs. 5-Year Fixed vs. 5-Year Variable Article Summary: I would advise going with a 3-year fixed rate over the 5-year rate. I would also heavily explore the variable again while rates are as high as they are.This is going to be really cool - I love graph and charts and tables. I’m looking forward to nerding out with you :)3-Year Fixed vs. 5-Year FixedThe first analysis we’re going to do is the 3-Year Fixed vs. 5 Year Fixed.Rates as of now are (uninsured at 25 year amortization):5-Year Fixed: 6.09%  |  3-Year Fixed: 6.39%On the face of it, the better rate is the 5-year fixed. You get a better rate (lower payments) and surety for 5 years. But, let’s do some simple math first, and then some more complex math later.A 3-year rate would have 2 years left to compare against the 5-year rate.Simple math:-The 5 year is 0.30% better than the 3-years.-There are 3 years of the 0.30% difference, meaning total variance is 0.90%.-Two years at 0.90% yields 0.45%.Therefore: the 2 year rate, or renewal rate after 3 years must be 0.45% better than the 5 year, or 5.64%.Let’s do the math with a $500,000 mortgage and straight line interest.So if we renew a 3-year rate into a 2-year+ mortgage at 5.64%, after a total of 5 years, we’ll be left with the same interest paid.The key here is… do we think that rates will be lower 5.64% in 3 years?My opinion is that we’ll end up at a more manageable rate level, far below 5.64%…As an aside, I personally don’t think we’re going to get to sub-3% rates, I do think the new equilibrium is going to be in the high 3%s or low 4%s (read 1-3 years). I believe this because it is more inline with the average of the past 25 years.So, go for a 5-year here? Naw - stick with the 3 year and renew when rates are lower.Ok, let’s nerd out a bit and use amortization schedules…The chart above states that the 3 year and 2 year combination would pay $1,490 more in total payments over the course of 5 years (0.77% variance in total payments), with $173 less in interest (0.34% variance).Long story short, our simple math worked - cool story!I actually smiled a lot when doing this example :)And yes, the same math works for the 2-year Fixed vs 5-Year Fixed.3-Year Fixed AND 5-Year Fixed Vs. 5-Year VariableThis example is slightly (wayyyy) harder to do because it requires us to guess what interest rates are going to be, and how they change, over the next 3 and 5 years.Rates as of now are (uninsured at 25 year amortization):Fixed: 5-Year 6.09%, 3-Year 6.39%  |  5-Year Variable 6.30%I propose to look at this in two ways: the 1st Scenario being a quick uptick in the variable rate so that our mortgage actually starts off at 6.55% (assuming 0.25% increase on October 25, 2023), and then a slow and gradual decrease of rates over the course of 3 and 5 years.*Please note, my calculator assumes changes in interest rate every 6 months. The Bank of Canada has rate announcements 8 times per year (at non-conforming intervals); it is extremely difficult to build a calculator based on this timeline so my 6-month changes are approximations... heck, we’re (making educated) guessing here anyways, right?For the 2nd Scenario, I’m going to assume no increase in rates and a decrease in rates by the 12 month mark, with a gradual decrease of rates after that.Scenario 1A: 5-Year Fixed vs 5-Year VariableWith the above numbers, we’re expecting rates to increase right away (as per what we stated above) but then decrease after 12 months, 18 month, 24 months, and 30 months by 0.25%, 0.a25%, 0.5% and 0.5% respectively.In this example, we come out ahead by paying $8,902 less in interest and $6,054 less in total payments.Scenario 1B: 3-Year Fixed vs 5-Year VariableWith the above numbers, it’s surprising, we’re still ahead even though there has been less time with lower rates. The reason for this is the higher 3-year fixed vs the 5-year.A start of 6.55% with a slow decrease of 1.5% over a 3 year timeframe provides for lower overall interest costs over 3 years.Scenario 2A: 5-Year Fixed vs 5-Year VariableThis assumes starting point of 6.30% and a decrease after 1 year, with a gradual decrease of rates to 4%.A decrease of rates from 6.30% today to 4.05% in 4 years would provide for a $23K savings over a 5 year fixed rate.I find the above example to be more in line with my expectations. Or, if someone wanted to, they could go 50/50 with Scenario 2 and Scenario 1 for caution’s sake… Still ahead with the variable in both cases.When the BoC increased their prime lending rate from 0.25% to 5%, the increase was 2000% in the span of less than a year and a half. These increases were and are emergency measures to combat inflation. Inflation is decreasing and rates will be cut; it’s a matter of when and not if (I believe)*I think it’s important to note that anything can happen. Rates can continue to stay high and the economy *could* weather higher rates for much longer. Anything is possible. No one expected covid, the Ukraine War or what’s currently happening in the Middle East. You can and should still stay fixed if surety is what you need.Anecdotally, the majority of our clients are still taking fixed rates! Each person’s situation is unique and the advice on whether to take a certain fixed term or even a variable would be unique to that person. Please do not take the above generalized advice as a catch all. Thank you :)Scenario 2B: 3-Year Fixed vs 5-Year Variable*Payments are so similar due to compounding. Variable rates generally compound monthly vs semi-annually.The above table shows that even though we have less time, we’re still saving about $8,000 in interest. For this reason, I would pick the variable rate over the 3-year fixed.Fixed Vs Variable ConclusionWhen rates are as high as they are, it makes sense to look at the variable. The numbers work.The problem I see is that we (many of my clients and I personally) got burned with the variable. The variable was SO attractive at rates hovering just above 1% and then bang… inflation and we’re now at stupid high rates when we could have locked in to a rate under 3%. It stung and it stings… I feel a lot of your pain if you chose the variable rate in 2021 and 2022.But, for those of you who are choosing between the fixed and variable now, I personally would choose the variable rate again.IF you believe that rates will decrease, the variable doesn’t just have better financials, it also has a few tricks up it’s sleeve.Variable Mortgages Have BenefitsYou can lock a variable in to a fixed rate at any time without a penalty.Variable rates have 3-month interest penalties, which can be 1/4 or less that of a fixed rate penalty.Some variable mortgages have static payments which allow faster payoffs and decreased amortizations when rates decrease.Some variable mortgages have variable payments which will allow for payment relief when rates decrease - this is a big one. Some variable rates are open after 3 years (no penalty)And more…Long story short - and this WAS a long story, I think it’s time to look at the variable again. I know I would…Thank you for reading! If you enjoyed it or took something from it, please don’t hesitate to drop me a line below.Email EitanCopyright (C) 2023 Pinsky Mortgages. All rights reserved. ### Economic Update - October 25th, 2023 Economic Update - No Rate Change ExpectedSummary: Interest rates are expected to stay the same next week as inflation dipped more than expected.On October 25, 2023, the Bank of Canada (BoC) is *expected* to keep interest rates the same.I don’t usually like to predict what’s going to happen but not only did headline inflation fall, but so did some of the core inflation measures on a year to year basis. Furthermore, the weak Business Outlook Survey completed by the BoC suggests our high rates are having an effect on business’s hiring and buying expectations, which is exactly what the BoC wants to see.The survey was interesting… the perception of inflation remains above actual inflation. What this means is that people think that things are costing more than they actually do. This is good because it may make businesses and consumers less likely to purchase, allowing our economy to slow gradually.OK so some musings from the help of Ben Tal, CIBC’s chief economist:The government is trying to force us into a recession!They want people to lose their jobs but they can’t really say this… The BoC states that “we need to stop inflation and we’re aiming for a soft landing”: but what that really means is that we need people to start spending less money. The way that the economy as a whole starts to spend less money is by earning less. In many cases, a decrease in job vacancies would provide for less money in the economy as a whole due to fewer job openings and higher likelihood of a depression in wages.Many people (media and economists alike) stated that we should have already been in a recession. But what’s a recession? Two consecutive quarters of negative GDP… But is that really something that matters to the every day Canadian?A real recession is where there’s blood in the labour market - where there are job losses. This really hasn’t happened yet, and wages are still growing.So why haven’t we experience a recession yet? Mostly because of the consumer! The average consumer was flush with money. In Canada, there was $160B of excess savings due to Covid; we just didn’t spend money, not to mention the billions provided in relief for Canadians and Canadian business.However, recently Ben Tal is saying that we’ve been utilizing our savings to an extent where our savings have dwindled and people have reintroduced their credit cards. There is even an uptick in consumer delinquencies, such as car loans and credit cards.Interesting…It’s important to note that inflation is a lagging indicator. What this means is that the inflation numbers that come out from previous data and current data, or what’s happening on the ground, is generally different from the reality on the gound. So, with inflation coming down, and decreasing 3 out of the last 4 months, it should be safe to assume that no rate hike is imminent.We’d like think that the BoC is a rational player, but we’re all human and so are the decision makers on rate changes… The BoC has stated, time and time again, that their aim is to decrease inflation down to the 2% mark. If the BoC had to choose between a recession or inflation, they will take a recession every. single. day. It is easier and within their power to correct a recession than bring down inflation.All of this is to say that Canada is one “good news” moment away from another rate hike. It’s possible that wages and the economy pick up next month and December 6th rate announcement could be an increase. Additionally, Canada must look to their neighbour in the south and unfortunately follow their rate hikes so that our dollar does decrease vis-a-vis the American dollar (if our rates are much lower than rates in the States, the money will move out of Canada and decrease the value of Canadian currency - and we don’t want that).Notwithstanding, according to Bloomberg News calculations, "A three-month moving average of underlying price pressures that Governor Tiff Macklem has flagged as key to policymakers' thinking fell to an annualized pace of 3.67%, from 4.29% a month earlier."  Dr. Sherry Cooper, DLC Chief Economist, stated that “while this is still well above the Bank's 2% target, the global economy is slowing, the Canadian and US economies are slowing, and with any luck at all, the Bank of Canada might see inflation move to within its target range next year. However, the central bank will be cautious, refraining from rate cuts until the middle of next year. The full impact of rate hikes has yet to be felt. The next move by the Bank of Canada could be a rate cut, but not until next year.”To reiterate, at this time, all fingers are pointing to no rate change on October 25th.I’m on board with that..!Email EitanCopyright (C) 2023 Pinsky Mortgages. All rights reserved. ### Home Buyers Plan and Tax Free Savings Account oday I'd like to go over smart ways to save for your down payment using the RRSP Home Buyers Plan (HBP) and the new Tax Free First Home Savings Account (FHSA). The HBP and the FHSA were created to help first time home buyers save for their down payment. These are both excellent programs and by using them you could divert (save) thousands in taxes towards your down payment. Tax-Free First Home Savings Account The Tax-Free FHSA works in a similar way to the HBP (below). It's new for 2023! I think that it's better than the HBP because you don't need to pay it back.  Like an RRSP, the contributions are tax-deductible. And, like a TFSA, the money grows tax free and withdrawals are not taxable. Here are some key points: You must be considered a first time home buyer, $40,000 - lifetime contributions allowance, $8,000 - yearly contribution allowance, Can transfer money to and from RRSP 1 year carry forward allowed (only if an FHSA is open)   - Meaning: if you are unable to contribute one year, you may contribute $16,000 the next year. In my personal opinion, the FHSA is one of the best new accounts around. For buying a home, it's the best strategy one can use!! RRSP Home Buyers' Plan The HBP (video here or above) allows you to withdraw up to $35,000 from your RRSP, and use this money to buy or build a home (or to help a related person with a disability). Below are some points to consider: You must be considered a first time home buyer,   - This means you cannot have lived in a home you/your spouse owned for the past 4 years. You must be a resident of Canada from the time you withdraw your money up until the home has been bought, You must intend to live in the home for at least 1 year after buying/building.  Repayment: The HBP must start to be repaid beginning the second year after the withdrawal is complete, and the funds must be repaid over 15 years, at a minimum of 1/15 of the loan per year. HBP money that is not repaid is added to personal income and gets taxed. Tax Savings: The reason why the HBP is smart for saving for your down payment is because investing in your RRSP gives you a tax benefit (refund) after you file your taxes, and the HBP allows you to use the invested RRSP money, as well as the tax refund, for your down payment. The Refund works like this: Income in Canada is taxed on a percentage basis, and the more you make, the higher the percentage of tax you pay (this is called a graduated tax system using tax brackets).   So, a $100,000 income might get taxed around $25,000 (25%), with take home pay at around $75,000. However, if you invested $10,000 into your RRSP, that $10,000 is taken off of your income for tax purposes, and you're now only taxed 25% of $90,000, or $22,500. In this example, you will receive a $2,500 tax refund at the end of the year. The $2,500 refund, and the $10,000 you invested, can now both be used for a down payment on a home, providing you with more down payment, faster. Please don't hesitate to ask us if you have more questions on the above. We're here for you! Warmest Regards,  Eitan Pinsky ### Mortgage Insurance and Interest Rate Tiers Did you know that there are three tiers for interest rates in Canada? Even more surprising, the best interest rates are saved for people who have insured mortgages, with less than 20% down. With government guarantees and little risk of losing money, lenders can offer mortgages at rock bottom rates.  3 Tiers: Insured, Insurable, & Uninsurable  From our Home Buyers' Mortgage Guide on Page 8, the Canadian mortgage industry used to be simpler with more uniform rates. However, since 2016, the government created rules and regulations for government guarantees for mortgages that are not insured, but are insure-able. An insured mortgage is where the borrower pays for mortgage insurance. Insurable mortgages are when a mortgage “can” be insured but the lenders pay the insurance instead of the client. Uninsurable mortgages cannot have any insurance.  The chart below outlines the three interest rate tiers.  When you do end up getting your own mortgage, we'll be providing you a choice for best rates and best mortgage terms from one or more of the three tiers above. Here to help with any questions - please don't hesitate to call or email :) Warmest Regards,  Eitan Pinsky ### Follow The Money - Who gets which transaction? We get asked quite a bit about deposits and about the "money timeline." In other words... our borrowers are interested in knowing when deposit moneys needs to change hands, who receives the deposit, and how it works in the grand scheme of the mortgage process. *Please remember that your deposit and down payment must be trackable for up to 90 days (30 days for a few cases) through bank statements. Any moneys deposited into your account must have explanations. Please ask Parmdeep Minhas if you have any questions here.  There are really two dates that are important when it comes to money! Date 1: Your Subject Removal  (or offer date if your offer is subject free) This is when your deposit must be furnished to your Realtor. This is Point (1) below. The deposit is usually 5% of the purchase price and this amount goes directly to your Realtor's firm's trust account. This money is generally provided to your Realtor in a bank draft format and your Realtor will tell you the exact wording that needs to show up on this bank draft. The Deposit is used to secure your purchase. Date 2: Your Completion Date This is the date that you begin to own your property. This is when all of the money required to purchase your home will be accounted for by your lawyer or notary (solicitor).  On this date, three things happen with regards to your money: Your Realtor's firm send your solicitor the deposit funds. Point (2) You have to bring the remaining down payment to your solicitor (if applicable - happens a day or two prior to your completion date). Point (3) Your lender will provide your solicitor with the mortgage funds. Point (4) The solicitor will put the money into one big pot Point (5) and pay all costs associates with your file (remember, your Realtor's commission comes out of there seller's side).  The breakdown of all of the money is provided to you in something called a Statement of Adjustments. We will go over a sample statement of adjustments with you at your signing meeting with us. Mortgages can seem daunting. Please don't ever hesitate to contact me if you have any questions.  Warmest Regards,Eitan ### Bridge Financing vs Interim Financing: Explained We get asked by Realtors and clients quite a bit about bridge financing. However, in most cases, what we're being asked for is "interim" financing, and not bridge financing. Bridge Financing When a buyer has a property that has sold, and has a new purchase with completion date prior to the completion of the sale of their current owned property, they may get bridge financing. Bridge financing helps "bridge" a buyer's equity from one home to another when the purchase happens before a sale.Example: Barry the HomeBuyer has a $500,000 property (it's a large closet) that he just sold. It is closing on August 1st. There is currently a mortgage on this property of $300,000; Barry has $200,000 in equity in his home and $50,000 in cash. On June 1st, Barry purchased and removed subjects on a new $800,000 closet (this closet comes with its own bicycle parking); there's a $50,000 deposit required. The completion date is July 1st for this new purchase. Barry was approved for a mortgage of $550,000. Barry put $50,000 of his own cash as a deposit, and the bank will provide a mortgage of $550,000 and a bridge loan for the $200,000 he has in equity on his property on July 1st. On August 1st, when he completes on the sale of his home, the solicitor will forward the bank the $200,000 from his sale to pay off the bridge loan. Easy Peasy! Example Dates:June 1 - Subjects removed: Barry provides $50,000 in cash as a deposit.July 1 - Purchase: Bank provides Barry with: a) $550,000 mortgage and b) $200,000 in bridge loan. Solicitor has now $750,000 in money from the bank, and $50,000 from Realtor's trust account. Barry is now the owner of the property.August 1 - Sale: Barry sells his property. Solicitor pays off current $300,000 mortgage, and pays the bridge loan bank $200,000 to pay off the bridge loan. Notes:*Bridge financing cannot be used for deposits*Must have subjects removed on the sale of the current owned property in order to qualify for a Bridge Loan.*Bridge Loans are generally available for up to 90 days.*Bridge Loans are generally 8%-9% interest, but there should be no additional fees.Example: 8% interest: on $200,000 x 8% / 12 months = $1,333. It would cost Barry $1,333 in bridge interest per month. Interim Financing Interim financing can be anything that helps purchase a new property using another property... The problem here is that the term "bridge financing" makes sense for interim financing because we're bridging one thing with another. Intuitively it makes sense... but, it is not correct industry verbiage.*I've found recently that miscommunication in mortgages can lead to submission errors and application errors (from observation outside of my team... obviously... ; we're super clear with our clients and make sure they understand us and we understand them :)Examples of Interim Financing: Using an established HELOC from a property that will be sold later. 2. Putting on a new HELOC or new mortgage on a current property, that will be sold later.*Putting on a new HELOC/mortgage cannot be done with a property currently listed for sale. If a client can't qualify using income, getting a reverse mortgage (for those who qualify) or a private mortgage to secure the new purchase until the current property is sold.*This is quite popular recently with retirees that are downsizing from a $3M+ property to a $2M property but want to spend months doing so and don't have $2M to invest. They purchase a new property, move over the course of a year, and then sell their old one. ### How to Increase Happiness From Upworthy, but I really liked it :) Shawn Achor studied happiness at Harvard. When he tells people this, they say: "Shawn, why do you waste your time studying happiness at Harvard? Seriously, what does a Harvard student possibly have to be unhappy about?" But the crazy truth is, Harvard kids are as unhappy as anyone else. What's going on in your life — from health, to money, to relationships, to prestige — predicts only about 10% of your happiness. So ... if I had a million dollars ... I wouldn't be any happier? Shawn's work flips our understanding of happiness inside out. You don't get happy by achieving success. You achieve success by getting happy. Dopamine, which your brain makes when you're happy, has one important side effect: It makes you smarter. A positive brain is 31% more productive (I would love to know where they got this fact). It's better at sales, faster and more accurate at diagnosing problems. So how can you up your dopamine? Take two minutes every day and do one of these things: Write down three new things that you're grateful for. Journal about one positive experience you've had in the last 24 hours. Try meditation, to teach your brain to focus. Use the first email you write every day to praise or thank someone you know. Spread the happy. And it wouldn't hurt to disrupt the endless barrage of bad news by sharing this with your friends, right? Everyone needs a little more happiness. The TED Talk is pretty funny :) I've seen it a few times...    ### American Rate Changes Impact Canada **I wrote this part before the SVB bank (plus others) collapse of from March 9-10. I'm not sure how this situation will play out yet. It's entirely possible that we're looking at no rate hikes in the States. All that being said, the information below is still relevant, but we may not see any rate hikes in the near term in the States if negative financial contagion creeps in. There has been quite a bit of commentary in Canada about the labour market (tight = wage growth = inflation) and on the CPI price appreciation (household goods costing more = inflation), and what Canada can do fiscally and monetarily to curb this inflation. But, there hasn't been too much chatter about what is happening below the border... until now! It's extremely important to talk about the States and the Federal Reserve (The US Bank of Canada equivalent), specifically due to how their rates affect ours, and why. As an aside, American interest rate changes do not have the same impact on the US economy as changes in Canadian rates to the Canadian economy. You may not know this but American mortgages have equal term and amortization lengths. If you get a 25 year mortgage in the States, you don't have to renew (ever) because your rate is locked for 25 years! You can expect to have the same payment through the entire amortization of your mortgage (unless you get a whole new mortgage). In Canada, on the other hand, mortgage terms are, on average, 5 years long. So, in comparing American to Canadian mortgages, approximately 20% of Canadian mortgages renew each year, whereas in the States, borrowers don't *have* to change their mortgage unless they buy a new home or refinance. If 20% of Canadian mortgages renew each year, 20% of Canadian mortgage holders have seen their payments go up by up to two times or more! No wonder changes in the Canadian overnight rate is more effective than changes in the American overnight rate...    Last week, the United States' Jerome Power, the Federal Reserve Chairman, stated that America is looking to increase the pace and size of interest rate hikes to combat inflation. Recent data was "stronger than expected." At this time, the market (traders) is pricing in another 1% increase in the US Prime rate by July. Wow and oh no... Because of the potential for rate increases, the US dollar increased more than 1% against other currencies.  Why is this an issue? OK, so Canada... Canada and the US have different inflationary pressures and yes, what happens in the US does trickle down to what happens in Canada. However, sometimes things happen directly, and sometimes the pressures from the States happen less directly. In the case of interest rate hikes by the US, it's a direct effect. Here's what will happen: 1. The US increases rates much higher than the Canadian central bank rates. 2. There will be an outflow of money from Canada to the US (Investors will seek higher returns and higher rates = higher returns) 3. Demand for the Canadian dollar will decrease. 4. The Canadian dollar will decrease in value. 5. Our imports from the States will be more expensive. And we import a LOT.  This will cause further inflation on consumer goods. 6. Our exports to the States will be cheaper for Americans.  Our exports are large ticket items from large corporations (see crude oil and cars). This will cause inflation on corporate profits and wages. *In 2020, Canada exported $270B to the US and the US exported $255B to Canada. Long story short, Canada may be forced to increase the overnight rate in lockstep with the United States due to how a disparity in rates can affect the currency markets. We are not isolated from the US and even if our fundamentals show that an increase in rates is not required, the fact that the US continues to increase rates might require Canada to follow suit. Food for thought... I'll have some ice cream... maybe it'll make me feel better about potential rate increases. ### No Rate change & Eitan's Economic Summary No Rate Changes: The Bank of Canada kept their overnight (Bank of Canada Prime) rate at 4.5%. This means that the Bank Prime rate is 6.70%. *For some TD Bank variable rate mortgage holders, the TD Mortgage Prime is 6.85%. On January 25th, the Bank of Canada (BoC) said they would hold rates steady and have a pause in any rate increase. They kept their word! Notwithstanding, the BoC maintains that they will raise rates again if needed. Good news: Inflation numbers came out on February and we saw a decrease from 6.3% inflation (December) to 5.9% (January). This represented 8 straight months of inflation growth decreases. February numbers are not out yet. However, Canada and the United States still have very high employment (labour shortages) which causes increases to wages, leading to spending, leading to price appreciation (more inflation). The problem I'm seeing is that there are far too many competing forces vying to influence the BoC's rate decisions. Legend: ↓ = reduce inflation   |   ↑ = elevate inflation ↑ Baby Boomers, a huge and productive cohort of North America's working population, are retiring faster than expected. Many chose to retire during covid, rather than isolate/stay at home. This causes more labour shortages. ↑ Labour markets are extremely tight; employer competition for skilled employees causes wage growth. ↑ Ukraine War: Supply chains are impacted leading to price appreciation. ↑ Demand for services remains high. ↑ China and Europe are growing again, partly due to Russian energy issues not having as much of an effect on Europe, and China's covid reopening. ↓ Higher interest rates affect investment; lower investment in inventories and machinery. ↓ Higher interest rates affect housing demand, creates uncertainty, and decreases values and transactions.  as an aside, Real Estate is one of the largest contributors to economic growth. There have been layoffs in this sector and I believe we haven't seen the full impacts of these layoffs yet (lenders are letting underwriters go and self-employed individuals are said to be leaving the industry). ↓ Food prices and shelter costs (rent/mortgage) remain high, hopefully causing decreases in retail and discretionary spending. ↑ The US Federal Reserve (more below) Surprisingly, due to our interest rates, Canada's growth rate was actually 0% in Q4 of 2022. Unfortunately though, zero growth does not equate to lower inflation... We can easily have increases in the price of food and goods, even if fewer are sold. There is a tug-of-war here between price appreciation (due to wage growth) and decreases in demand (due to price appreciation). This is called a circular reference in excel... I think. Nerdy? Guilty as charged. Overall, the BoC statements suggest that the economy is moving as forecasted, bringing the inflation rate down to the 3% mark in the middle this year. Most economists believe that the BoC will hold the rate steady, until there is a cut in rates in the first quarter 2024. There are a small few who think rates may be cut in late 2023. Economic Policy Tools Although the BoC is holding their rate unchanged at this time, there are three other economic policies Canada can use to reduce demand and curtail inflation: decrease government spending, increase tax rates (fiscal policy), and decrease the money supply through quantitive tightening (monetary policy).      There was some fiscal policy to get us out of the covid blues, but the majority was monetary. Huge sums of money were given out (CERB, CEBA, other covid handouts - no judgements here folks, just facts) and there were some tax breaks such as business-use-of-home coming from the fiscal/government side. However, more monetary moves such as increasing the money supply through quantitative easing, or the purchasing of bonds by the BoC, happened on a massive scale, causing our fixed rates to plummet. If you locked in a sub-2% fixed rate, you got this rate due to quantitative easing. At this time, the government isn't going to stop spending and they are not raising our taxes; we're left with monetary policy to get us out of this mess. And, since interest rates are not moving at this time, the government will continue with decreasing the money supply through quantitative tightening. Quantitative tightening is a major reason why we've had such large increases in the fixed interest rates over the past year.   **************     **************************     **************************     ************** Bonds and Quantitative Tightening Quantitative tightening is a monetary policy used to contract, or reduce, the balance sheet (assets) that the Bank holds. The BoC can buy mortgage bonds from bond issuers (usually government organization likes CMHC), which increases the price of those bonds through supply and demand. In the case of quantitive tightening, the Bank sells its mortgage bonds and since there are more bonds on the market for others to buy, the value of these bonds decrease (supply and demand). As an aside, when the government sells bonds, they are asking for their money back (decrease money in the market) in return for offloading bonds on to the market. I created the graph below to show how supply and demand works and because I love economics. The graph below is a basic supply and demand graph from 1st year economics (the only 1st year university class I got an A in) and it shows how an increase in the supply of something will decrease the price.      A bond has a coupon (return), an interest rate, and a value. What's interesting about bonds is that the coupon, or return, stays the same. The interest rate and the value of the bond is what changes. Coupon/Return = Rate/Yield x Price/Value **Technically, the coupon/return, rate/yield, and price/value are all set out when a bond is created. However, bonds are purchased and sold afterwards, and what changes is the sale price. If the sale price changes and the coupon/return stays the same, then the rate/yield must also change. So let's take a $100 bond with a rate of 10%. The coupon here would be $10. $10 = 10% x $100 Now, if the price of that bond decrease, to, let's say $80, we would have to find R. $10 = R% x $80 In this case, we divide $10 by $80, and we get 12.5% $10 / $90 = R% = $12.5% This is different from conventional thinking that values stay the same and as interest rates changes the return changes. From our example above, and bringing it back into practice, the value of bonds has decreased, and since bonds are the foundation of our mortgage market, the interest rates we pay on fixed-rate mortgages has increased.   **************     **************************     **************************     ************** Going back to the overnight rate by the BoC, the graph below is interesting... At this time, inflation (red) is still way above the BoC overnight rate (blue).        The BoC has already stated that they believe that inflation will go down to 3% by July 2023. And, since most economists assume no changes to the overnight rate (BoC Prime) in 2023, this means that our overnight rate will be quite a bit above the inflation rate for a while. The BoC put the brakes on the economy starting in March of 2022, but inflation only started to decrease in July. There's a few month lag in action and reaction. I believe that once the overnight rate gets higher than the inflation rate, it will stay this way for a few months, or even half a year before the bank starts rate cuts. In the 80s, during some of the worst periods of inflation, the BoC decreased rates too quickly, causing inflation to spike back up. where the BoC had to increase rates again a couple of time to stave off more inflation. I think the BoC will err on the side of caution and not decrease rates right away, even if there might be a good reason to do so (lower inflation). ### Fear of Missing Out (FOMO) In the Housing Market Home prices in Vancouver have increased for the 6th month in a row.Wait, what?! Prices are increasing again? Even as rates are increasing?In 2021 we had some of the biggest increases to house prices, culminating with a high in Q1 2022. But, rates started to increase and there was a ... pause(?) ... a panic(?) ... a tempering of the housing market when rates started to increase and then increase dramatically. Remember, rates increased faster than at any other time in Canadian history. This created something called "anchoring affect" with many purchasers.The anchoring effect is a cognitive bias where an individual's decisions are influenced by a particular reference point or 'anchor'. Since everyone was used to low rates of 2021 and the first bit of 2022, the second half of 2022 and beginning of 2023 provided for lower-than-expected demand. Yes, there was lower inventory (fewer houses on the market) than normal, but we were seeing a balanced market (not a sellers market where prices can increase, or a buyers market where prices may decrease) for a timeNot anymore... Prices are up. Demand is up. Multiple offers are back. Where Are All the Listings? Andrew Lis, The Real Estate Board of Greater Vancouver's Director of Economics and Data Analytics (phew, mouthful), has a great theory on why homeowners are not listing their properties. Specifically, it has to do with who, in Canada, has mortgages, what demographic tends to move, and that it's all correlated to interest rates. https://www.youtube.com/embed/AKnEMCDlYRI A very interesting 6 min video! OK, back to our FOMO.Queue in the March 8, 2023 Bank of Canada announcement that they are going to pause increasing interest rates. Moreover, fixed rates actually started to come down a bit in March of 2023. This gave home buyers some breathing room.I think anchoring again came into affect here. I think most people see higher rates as being the new normal, and when we were looking at rates of 5.49%, and they came down to 4.59%, it seemed to many that it was a good time to buy.As an aside, rates have increased quite a bit over the past month, and we're back up to low 5s.Ever since the end of March, the market has been moving faster and faster.From our discussions with our clients, the main sentiment we get is that there's a need to get a toehold in the Canadian Real Estate market. If not now, then when, if ever?!Gone are the conversations that interest rates are too high to purchase. High interest rate are expected and are not impeding those who choose to purchase a property right now.Renters Take NoteNow, I'm not a 100% believer that everyone needs to purchase. Some people do and some people don't.If you're renting, and your rent is below market, you might want to hold on and keep saving. And, what if you're in purpose built rental housing, where the landlord is a company and not an individual? It would be very difficult for the landlord to kick you out for "family reasons." There are just too many laws prohibiting evicting tenants.Notwithstanding, we've had more than a few people who have had to move out and purchased this year because they themselves have been kicked out of their homes by landlords who claim owners use of property.So, why purchase if your rent is low?! I'm not sure you should... Happy to discuss :)But, if you have to move, or you're currently living at market rent (what everyone else is paying), purchasing still makes sense, even with higher interest rates.We have 4 step tools to show how, even at current rates, purchasing now would provide for a better 5-year net investment than renting. Let me know if this interests you.And, if you, like me, also think property prices are going to continue to increase, you may also want to purchase. EXTRA - What Makes a Good Life?Lessons from the Longest Study on Happiness :) I just love this TED Talk. Robert Waldinger, the 4th director of Harvard's Study of Adult Development, shares timeless lessons in happiness. https://www.youtube.com/embed/8KkKuTCFvzI Image above takes you to Youtube. This link takes you to TED Talks (better transcript) The study found three important lessons: Good relationships keep us happier and healthier. Period! The quality of your close relationships matter. Good relationships protect our bodies and our brains. Mr. Waldinger's last minute of the speech is here: "So this message, that good, close relationships are good for our health and well-being, this is wisdom that's as old as the hills. Why is this so hard to get and so easy to ignore? Well, we're human. What we'd really like is a quick fix, something we can get that'll make our lives good and keep them that way. Relationships are messy and they're complicated and the hard work of tending to family and friends, it's not sexy or glamorous. It's also lifelong. It never ends. The people in our 75-year study who were the happiest in retirement were the people who had actively worked to replace workmates with new playmates. Just like the millennials in that recent survey, many of our men when they were starting out as young adults really believed that fame and wealth and high achievement were what they needed to go after to have a good life. But over and over, over these 75 years, our study has shown that the people who fared the best were the people who leaned in to relationships, with family, with friends, with community. So what about you? Let's say you're 25, or you're 40, or you're 60. What might leaning in to relationships even look like? Well, the possibilities are practically endless. It might be something as simple as replacing screen time with people time or livening up a stale relationship by doing something new together, long walks or date nights, or reaching out to that family member who you haven't spoken to in years, because those all-too-common family feud stake a terrible toll on the people who hold the grudges. I'd like to close with a quote from Mark Twain. More than a century ago, he was looking back on his life, and he wrote this: "There isn't time, so brief is life, for bickerings, apologies, heartburnings, callings to account. There is only time for loving, and but an instant, so to speak, for that." The good life is built with good relationships. Thank you." ### Eitan's Coffee: Not Too Hot... Not Too Cold... Eitan's Coffee: Not Too Hot... Not Too Cold...They say that the optimal temperature for brewing coffee is 92°C. And, 60°C is the optimal temperature for consuming coffee (according to me). I made this image using ChatGPT's Dall-E - AI Image generator - cool!! I like to consume my (60°C) coffee over a long period of time; I don't drink it right away. So, how do I keep it warm? Well, making sure the heat/fire is just right.Let's assume that the economy is a big pot of coffee...A stable economy, if equating it to a large pot of (mmm-mmm good) coffee, would have a warm and consistent temperature. Perfect for sipping :) Or on the economy side, a stable and predictive outlook.If the coffee gets too cold, we could put a few logs on the fire to increase the heat. If the fire gets too hot and the coffee is in danger of burning, we could spread the logs out and let the fire die down a bit (gosh, I love making fires when camping). There is a sort of equilibrium here with just logs. But then BANG, Covid happened.  ❄️❄️ A deep freeze swept over the fire and coffee pot. Our coffee was going to get too cold to drink... Do you remember the first few days of Covid when ... we were all at home? The economy was in shambles! There was panic and massive uncertainty. So, what did the government do...?🪵 The government added fuel to the fire 🔥 to increase the heat.⛽️ They added gas! ☄️ They added a fireball! 🧨 They even threw in some dynamite.(I looked for more emojis but this is all I could find) Everything the government did was to increase the heat to keep coffee at 60°C.Economically, governments slashed interest rates, introduced quantitative easing, gave out free money to Canadians (CERB) and Canadian companies (CEWS), introduced freezes on all sorts of payments, and so much more. Canada's financial response can be found here. Did governments go overboard with their response to Covid? I'm not one to make that call.However, the issue is that we have not had a global pandemic since 1918 (Spanish Flu) and most importantly, never in a globalized world. Whether I agree or disagree with policies, I don't blame governments for their response! We have no idea what would have happened if other solutions were enacted. Notwithstanding, the general consensus, in hindsight, is that interest rates were left too low for too long.OK, so back to coffee and the economy... We now have more wood🪵🪵, gas⛽️, a fireball☄️, dynamite🧨, and a few lightning bolts ⚡️ (the war in Ukraine and China/West's decoupling) and our fire is hot 🔥! Our coffee might start to burn.  Inflation speeds up!💧 In comes some water to tame the fire... The government starts to increase interest rates slightly.😎 All the while it's getting warmer outside. The fire doesn't have to work as hard to keep the coffee warm. Economically, we're at full employment and demand for labour (specifically high-paying jobs) is skyrocketing.💦 In comes more water on the fire to put parts of it out. The government introduces the fastest increase in interest rates in history!😎 It's not enough... It's still warm outside and wages are increasing. Inflation is peaking.The problem is that our fire was created with wood, gas, fireballs, lightning, and some dynamite.  And the weather is now hot and fanning the flames.So the government introduces more rate hikes ☃️ (variable rate increases) and quantitative tightening 🌊 (fixed rate increases) to try and force a too-strong economy to settle down.🥶 The worry is that the government will go too far to squelch the fire and freeze our coffee while doing so. Economically, we're scared of a hard landing and a potential recession.  So, what's the point Eitan?We now have an economy that has been attacked, viciously attacked, by so many competing forces. It started with Covid and governments' responses, and continues with: deglobalization, China's seeming ambition to upend the US, the West's response to China, the war in Ukraine, Trumps America First policy (Biden has continued), and ... more! Seemingly small circumstances or incidents around the world are now having overweighted impacts on our economy. Think about this for a moment... a medium(ish) bank in the US, Silicon Valley Bank (SVB), went under due to a run on its deposits because of a (true) rumour that they were over leveraged. It happened within a week! SVB bank's value ~$15B, compared to RBC ~$125B, BMO ~$115B, and Canadian Western Bank ~$25BAnd, the SVB bank collapse had huge implications for the debt markets.  Canadian mortgage rates plunged for a month because of the collapse.The point here is that we no longer have an economy built on fire created by logs. The equilibrium we talked about earlier is extremely hard to meet. A small bit of new wood for the fire could interact with the gas, or be doused by water... it's impossible to tell.There's a whole lot more affecting us, and seemingly small economic issues half a world away, can affect us quite greatly. Uncertainty is here to stay for a while. Anyone who thinks they know what is going to happen., or has answers, would be right or wrong, depending on unforeseen circumstances. I.E., they have no idea...  🙄 SO HERE'S THE POINT... with most things financial at this time, I would choose to go with certainty. For many,  it means going with a fixed rate as opposed to a variable rate. For all of us, it means trying to minimize "what could go wrong," and focus on what we have control over. I hope you enjoyed my analogy :) MONEY WORRIES - What Many Are Thinking About If you're worried about your finances, you are not alone. We are in very strange and uncertain economic times, and for those who have to renew their mortgages this year at double or triple their current rate, or for people who have variable rate mortgages, finances are on your mind! And yes, inflation has affected almost all of our bills. You don't need to have mortgage worries to worry about your finances.  Worrying doesn't usually result in a solution. Actions and planning does. If you're feeling worried or uncomfortable about your finances, I could suggest to start with identifying the reason why you're worried. Is your income insufficient to pay for your lifestyle?  Do you think you have an impending layoff? Are your debts piling up and you have a lot of bills to pay? Do you feel like you're not saving enough for retirement? And so many more... Once you've identified your worry reason(s), you can start to consider solutions. If it's budgeting you're looking for, we've created a fantastic budgeting tool for anyone who wants it. Ask us for it here. If you're feeling overwhelmed, outline a few small steps to take. When considering a budget, my advice would be to download the last 3 months of your credit card and bank statements, add up all of your expenses in categories, and then divide each one by three to get a good average. If you see yourself spending too much on "Eating out" for instance, you might be able to know where to cut. If you feel like you need professional assistance to help you cope, or you know someone else who might need it, don't wait and don't let them wait. Reach out to family doctors, the emergency health centre, a licensed therapist, or a trusted friend. There's no shame in asking for help if you feel so overwhelmed that your mental health is suffering. Talking to a friend could make all of the difference in the world! With warmest regards, Eitan ### 0.25% Increase & Eitan's Economic Summary Today, the BoC increased rates +0.25% due to (1) higher-than-expected growth in Canada's economy, and (2) to monetary policy that is not yet restrictive enough to bring inflation down.(Rates have increased to where we were in 2007). Here are some highlights from today's announcement: - Inflation ticked up in April (May not out yet) and there are concerns inflation could get stuck above 2% (means higher rates for a while). - Canada's economy was stronger than expected (GDP up 3.1%) ... As an aside, soft landing?! We're full steam ahead... - Consumption growth is strong and broad. People are still buying goods. Services demand is also strong.I've personally asked many people if they have changed their spending habits. The majority of responses are: "not really," and "no." More spending means a strong economy. - Spending on "interest-sensitive goods" (housing, debt) increased This point goes against what was expected due to higher rates. See below for FOMO in the housing market...  - Labour market is tight: higher immigration and participation rates (people in the workforce) are expanding the workforce. But many are quickly hired and there's still strong demand for labour. - Globally, consumer price inflation is coming down due to energy prices but underlying inflation is still high. - Many major central banks are signaling interest rates may have to rise further to restore price stability. - Financial conditions have tightened back to those seen before the bank failures (March 2023) in the US and Switzerland. Key Takeaway:The BoC said that based on the "accumulation of evidence," it decided to increase its policy rate, "reflecting our view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target."  Basically, if inflation doesn't decrease, and our demand continues to be strong, expect more rate increases this year. The BoC is ONLY focused on inflation. They will do whatever they can, no matter the consequences, to reduce inflation to the 2% target rate. ### How Does Real Estate Conveyance Work? 9 Questions Answered https://www.youtube.com/watch?v=wrHOTnGvh5I What is real estate conveyance? How does the process work? Buying real estate is an involved process and it’s important to ensure that all steps are completed correctly. Obtaining the services of a real estate lawyer is a good idea, so that’s what we did! Khushhal Bains of Bell Alliance provides clarity by answering nine questions about the real estate conveyance process.  What does a real estate conveyancer do?  During conveyance, a real estate lawyer does three things:  ·      Put the client or buyer on the title of a property, making them the owner.  ·      Put the mortgage on the title.  ·      Handle the money involved with the transaction.  A meeting between buyer and conveyancer is held a couple days before the closing date in order to facilitate these tasks.  What should I do before contacting a conveyancer?  “I think the key thing is to have a really good team put together,” says Bains.  This will include a realtor who drafts the purchase and sales agreement, including all clauses. A good mortgage broker will also be needed to put together the mortgage. The conveyance lawyer takes it from there.  “Our job as lawyers is to make sure that whatever you agreed to is what actually happens,” Bains explains.  What should I do to prepare for the conveyance meeting?  Bains asks buyers to complete an online form in advance of their meeting.  They’re also required to bring a void cheque, which will allow mortgage payments to be paid automatically.  Two pieces of ID must be presented at the meeting, with at least one being a picture ID.  Because of foreign national rules, SIN verification is also necessary. Bains recommends bringing a T4 slip, an NOA, a SIN card, or SIN letter.  It’s also important to ensure that insurance is in order ahead of time. “I always remind people that insurance should be in place for the completion date, not the possession date,” says Bains.  What is a statement of adjustments? How much money should I bring to the meeting?  A statement of adjustments is a balance sheet that defines the financial details and obligations of the arrangement. Bains sometimes completes this document for clients, but advises those who want more advanced notice to enlist the help of their mortgage broker, like Pinsky Mortgages.  The buyer’s financial obligation cannot be ascertained by simply looking at the selling price. If the selling party has made advanced payments on condo fees or property taxes, adjustments will be required accordingly. A properly prepared statement of adjustments will include all relevant details.  “From the client’s perspective, the statement of adjustments sets out how much money they’ll need to bring into our office,” says Bains. “We get the money from the bank, we get the money from you, and we deal with the money you’ve given your realtor. We’re effectively going to the store and buying your new home.”  Do I need to bring just one bank draft?  No.  “People often worry that they have to collect all the money and put it together in one big bank draft,” says Bains. “It’s not required. You can give us four or five bank drafts.”  Remember: Make sure your money is liquid! It’s best to prepare for your meeting ahead of time, which means ensuring there are no holds on your money.  “We always remind clients to ensure their money is liquid,” says Bains, who notes that banks will often hold draft funds for several business days. “Don’t move your money around right before the completion date,” he advises. What happens at the meeting with the conveyancer?  At the meeting, the lawyer will collect the buyer’s ID and explain all the documents.  “We spend a fair bit of time on the statement adjustments,” says Bains. “It’s a lot of money, so it’s important that you understand exactly why you’re paying the money that you’re paying.”  In order to facilitate any late adjustments, the meeting does not occur until about two days before closing. According to Bains it usually takes about 45 minutes.  What happens after the meeting?  Documents are sent to both the bank and the buyer. Bains explains that the post-meeting work is completed behind the scenes and advises the client to simply wait for possession date.  “I will arrange to switch ownership from the seller to you,” he says. “On the day of your completion, typically around four or five o’clock, we’ll let you know that you’re officially the owner. Your realtor is the one that helps you with the keys.”  A few months after possession the homeowner will receive a state of title certificate, with their names on title.  Who does the conveyancer work for, me or the bank?  Both. While this may sound like a conflict, Bains downplays such concerns.  “It’s a fairly straightforward transaction,” he says. “The bank wants to lend the money and you want to use the money. There’s no big conflict here.”  For some commercial purchases, separate lawyers may be required, which, of course, comes with additional costs. How do I know which conveyance lawyer to use?  Obviously competence and experience are essential when it comes to such an important function. Bains believes that customer service is another important factor.  “If you’re nervous, you’ll want to deal with a lawyer or notary that’s willing to hold your hand through the process,” says Bains, who acknowledges that closing on a home can be scary.  “If you email, we respond,” he says. “I always try to respond to everyone on the same day.”  Cited Sources Personal communication with Khushhal Baines ### Read This Blog Before Buying a Condo in Downtown Vancouver https://www.youtube.com/watch?v=HtmPk4ovzsU Downtown Vancouver is a very desirable place to live and invest, particularly for those looking to buy a condo. Before making a purchase there are many things to consider. Eitan Pinsky recently sat down with Ben Kay of Macdonald Realty, who offered plenty of wisdom on neighbourhood selection, condo maintenance, layouts, parking, windups, and more. If you’re considering the purchase of a condo in Downtown Vancouver, don’t miss out on this valuable advice.  What’s So  Great About Downtown Vancouver?  “When you’re alone and life is making you lonely you can always go downtown,” sang Petula Clark in her smash hit ‘Downtown.’ Kay has a similarly favourable view of the city centre.  “Our downtown is incredible and we forget that until we leave sometimes,” says the realtor. “It’s a stunning, beautiful setting with office and residential spaces, as well as parks.”  Those who live in Downtown Vancouver are less dependent upon cars and transit and enjoy access to a surprising amount of nature. Kay cites Nightingale and Maxine’s among his favourite downtown restaurants, but those who move to the area will surely develop their own lists.  Which Downtown Vancouver Neighbourhood Should I Live in?  Which of Vancouver’s downtown neighbourhoods does Kay recommend to his clients? He answers this question with a question of his own.  “I always ask my clients what they enjoy,” he says.  It often comes down to lifestyle and priorities. “Families usually want something with more access to parks, maybe something a little quieter,” he explains.  For parks, Kay recommends the West End. The downtown core may be more suited to those who enjoy immediate access to an active scene with amenities.  “If you really enjoy restaurants and access to transit, Yaletown is a great spot,” Kay advises.   How Can I Ensure My Condo Maintains Value? The condition of the building will be a big factor in the future value of a condominium.  “You’re buying into a building,” Kay notes. “You don’t just own the condo, but the common assets as well.”  Many condo buildings in Downtown Vancouver are between 20 and 30 years old, which is typically when maintenance schedules become more aggressive. Horror stories circulate regarding strata assessments and massive expenses for condo owners, making caution key.  “I’m making sure my clients are completely and fully informed,” says Kay. Upkeep expenses are inevitable, but what Kay looks for are buildings that are performing in a comparable range with others of the same age.  “Buyers should expect maintenance on their property, just like when you own a detached home,” says Kay. “It’s just that in a condo, it’s not just your decision.”  Of course there are deals to be had for those willing to purchase condos that have deferred maintenance. The important thing is to make an educated decision. The ability to work from home is a must-have for many people these days, but condos don’t always offer extra rooms that can be converted into offices. Instead look for flexible layouts that allow you to fit in a working space, then tuck it away on evenings and weekends.  Should I Buy a Parking Space for My Downtown Condo?  Downtown residents are less reliant on vehicles than other Vancouverites, but many still own vehicles. According to Kay, a parking space can add $50-60K to the price of a Downtown Vancouver condo. Calculations are required to determine whether or not it makes financial sense to invest in one.  “If you’re only going to be living there for 3-4 years and you’re able to rent a parking space for $150/month, the math doesn’t exceed the value of the stall,” says Kay. “In most buildings you can find someone who will lease out their unused parking stall.” Is There Potential to Profit from Strata Windups?  There’s not a lot of available land in Downtown Vancouver, so developers will sometimes buy older buildings in order to repurpose them. These ‘windups’ are more prominent in the West End since the city passed a plan allowing for higher density in the area several years back.  While the potential to profit from such an arrangement does exist, Kay doesn’t recommend counting your chickens before they hatch.  “It’s not something you can count on,” he says. “I wouldn’t suggest any of my clients buy something in hopes of getting a windfall from a developer.”  What is the Future of Downtown Vancouver?  With the aforementioned combination of scenery, residential, and commercial spaces, Kay expects Downtown Vancouver to continue to thrive.  “Even though it looks fully built out, I think it’s still a baby compared to what it’s going to be,” he says. “There’s a lot of development happening, and I think you’re going to see a big transformation in older properties.”  If this is the case, those who purchase condos in the area will not only enjoy a high quality of life, but will be making a strong investment.  Cited Sources Personal Communications with Ben Kay ### 5 Things You Need to Know About General Contractors https://www.youtube.com/watch?v=gh73ibTWow4 A general contractor can renovate your home, increasing its value while also making it a better place to live. But what is a general contractor exactly? How do they operate? We answer five common questions in order to ensure that your home improvements go smoothly.  What is a General Contractor?  What’s the difference between a general contractor and a tradesperson or sub-trade? In a word, scope. A general contractor oversees your project from beginning to end, handling responsibility, overseeing design, procuring materials, taking on liability, and dividing up the work. Sub-trades, on the other hand, are brought in to perform a specific task such as electrical work or floor installation. A general contractor will often utilize various sub-trades throughout the project.  “The general contractor is your greatest advocate in your renovation,” explains general contractor Cam Holden of Construct by Nuthatch. “They’re in charge of both their own employees and the sub-trades so they play the biggest part in bringing your vision to light.”  Do I Need a General Contractor?  Some jobs are best left to a general contractor while others can be tackled by a sub-trade, or even done by the homeowner themselves. The size and scope of the project will be a major factor in this decision.  Some general contractors are happy to do smaller projects in the $5-10K range, while others work exclusively on larger projects. The best way to find out if a general contractor believes they’re a fit for your project is to ask!  What Renovation Projects are Most Popular?  Kitchen and bathroom renovations are most popular, but bedroom improvements are very common as well. As more people work remotely, home offices are growing in popularity, with basements or even closets being converted to work areas. Decks and other outdoor projects can also increase curb appeal and, thus, the value of a home.  In addition to being a general contractor, Holden is also a real estate agent, providing him a unique perspective.  According to Holden, the two groups who most frequently undertake renovations are those who are preparing to sell homes and those who have just bought.  “Typically, when someone’s about to list, they’ll want to do the low hanging fruit projects such as painting, upgrading fixtures, changing out doors, and repainting cabinets,” he says. “These are easy projects that can increase value and help you sell your home.”  Those who are moving in are more apt to tackle big projects such as room remodels, extensions, and layout redesigns.  Those planning to sell will often get good ROI for the smaller cosmetic touch ups. Larger renovations will increase the value of the home, but not always by enough to cover the entire investment. Those who plan on staying in their homes for a lengthy period will get to enjoy living in their improved homes, and recoup much, if not all of their investment when they do eventually sell.  How Can I Help My Contractor?  From a contractor’s perspective, not all clients are created equally. According to Holden it comes down to communication, planning, and trust.  “We really like it when clients communicate with us,” he says. “Having an open conversation throughout the project leads to a better result.”  Before a general contractor can fulfill a client’s vision, they must first understand it. Articulate conversations can be valuable, but a picture is worth a thousand words.  “Pictures, drawings, even doodles and sketches on a napkin or piece of paper can help,” says Holden. “We really like it when clients give us their full dedication to the plan.”  Sometimes, of course, clients will improvise throughout the course of the project when inspiration strikes. According to Holden this is not unexpected. “Changing your mind is fine,” he explains, “but it might push the job timing out  a little bit and incur a few extra costs.”  Are Home Renovation Grants Available?  Does all of this sound expensive? The good news is that certain home renovations are subsidized by government organizations. “There’s tons of grants that BC Hydro, FortisBC, and CleanBC are giving to homeowners when they do renovations,” reports Holden.  $50 per opening is available to homeowners replacing windows and doors. Fortis also gives money to those upgrading their insulation.  Holden cites a project he’s currently involved in where a heat pump system is being installed on a home in North Vancouver. The federal government is contributing $5K to the project, while the municipality offers an $8K rebate, for a total of $13K in deductions on a $15K project.  “It almost pays for itself,” he says.  Pinsky Mortgages believes that educated decisions are good decisions. Since no two homebuyers are the same, we offer free consultations that allow us to understand your unique situation. Contact Pinsky Mortgages today and help us help you get the mortgage that best suits your needs.  Cited Sources Personal Communications with Cam Holden ### What is a Monoline Lender? Five Questions Answered Monoline lenders are a great option for mortgage-seeking Canadians, but they’re often misunderstood or overlooked entirely. The truth is that they add competition to the landscape by providing borrowers with a unique financing alternative, often with better rates and terms than those offered by traditional lenders. Let’s clear up the confusion by addressing five questions that consumers typically have about monoline lenders.  What is a Monoline Lender?  Monoline lenders, also known as non-bank lenders, deal exclusively in mortgages. That means no savings accounts, credit cards, investment services, or any of the other services offered by mainstream financial institutions. By staying clear of these areas they’re able to achieve singular focus.  Monoline lenders are not public facing, but can be accessed exclusively through mortgage brokers. Because of this arrangement, they are often less invested in advertising and public relations, so you may be less familiar with their brands.  A Different Model Monoline lenders don’t have the brick and mortar locations or extensive salaried staffs that banks are famous for but, instead, focus on flexible policies, solid relationships with mortgage brokers, and maintaining good online customer service.  Are Monoline Lenders Safe?  In a word, yes, borrowing from a monoline lender is as safe as dealing with a bank. Because of their relatively low public profile, some people look at monoline lenders with suspicion. In fact, it’s only their delivery model that is unique, the fundamentals of their lending are not that different from banks and other lending institutions. Monolines are heavily regulated by the government and follow the same rules as the banks do. In fact, they’re often financed by banks! They are required to hold licenses from Canada’s regulatory bodies and their loans are secured through insurance and massive holdings. Even though they’re not household names, these lenders do major business and represent a significant portion of the Canadian lending market.  In the rare event that they go bankrupt or are acquired by another institution, your loan is simply transferred to another company, with the terms remaining intact.  Monoline lenders are not to be confused with private lenders who are much less regulated. By doing business with a trusted mortgage broker, borrowers can remain confident that they’ll be steered free of danger.  What are the Advantages of Monoline Lenders? Monoline lenders will often offer lower rates than other lending institutions, particularly for fixed rate mortgages. This is made possible, in part, by their lower level of overhead.  Their terms are often more flexible as well. Pre-payment options are generally more accommodating, and penalties for those who break their mortgages are more forgiving.  Getting approved for a loan consists of many factors but, compared to the banks, monoline lenders are known to be more open to those who are self-employed, as well as to those who have inconsistent incomes or weaker credit scores.  Another result of their streamlined activities is that turnaround times are generally shorter with monoline lenders. These quick approvals, when combined with their good customer service, make them an attractive option for both borrowers and brokers.  Mortgage holders should not be put off by the lack of a physical location to visit, but should instead consider the combination of mortgage broker and monoline lender to be a customer service dream team that they can have total confidence in.  Who are Canada’s Monoline Lenders?  While you might not see their names on billboards or hockey telecasts, Canada’s monoline lenders are numerous, sizeable, and stable. New entrants or acquisitions will periodically alter the landscape, but there is never a lack of options.   First National, MCAP, RMG Mortgages, Street Capital, CMLS, Merix, and RFA are among the non-bank lenders currently servicing the Canadian marketplace. If you have questions about a particular lender, Pinsky Mortgages is happy to offer our perspective.  Is a Monoline Mortgage Right for Me?  This is not a question that can be definitively answered in a blog post. Monoline lenders do provide a choice and it’s often the best one available. However, making a good determination about what’s best for you boils down to the rates and terms being offered at a particular time, as well your unique situation.  While Pinsky Mortgages works closely with a number of lenders, we ultimately work for you, our client. That’s why we offer free consultations where we take the opportunity to learn about you, your goals, and your financial picture. It’s also why we place an emphasis on education, ensuring that everybody makes informed decisions that work for their benefit. We’re happy to answer all of your mortgage questions! If you’re looking to gain perspective on which borrowing alternative is best suited to you, book your free consultation with Pinsky Mortgages today!  ### How Much Mortgage Can I Afford? Calculate Your Budget You’re interested in buying a house and you find yourself asking yourself the obvious question: What is my budget? Whether you’re buying your first home, upgrading, or downsizing, there are lots of considerations. How much mortgage do I take on? How much mortgage should you get? How do mortgage calculators work and what do all of these terms mean? Let’s break it down.  Mortgage Variables and Factors Mortgage calculators can help you determine what mortgage is right for you, but they require inputs. The nature of your mortgage commitment will depend upon numerous factors, so it’s worthwhile to overview a few of the pertinent variables. Purchase price: Obviously the more expensive your home is, the greater your financial commitment.  Down payment: A down payment is the amount of money you put towards your property up front, from your own resources. A larger down payment will naturally reduce the amount of your mortgage while also potentially qualifying you for better interest rates and exempting you from mortgage insurance.  Interest rates: Dictate the cost of borrowing and payment amount for your mortgage. Rates regularly fluctuate with the market but how the fluctuations impact your mortgage depends on the interest type (see below) you select.  Interest type: You can choose to apply for either a variable or fixed interest rate. Fixed interest rates will remain constant throughout your term, providing payment certainty throughout the duration of your term. Variable rates will rise and fall according to prime rates. The latter approach has historically resulted in lower rates, but they place the borrower at the mercy of fluctuating interest rates.  Interest term: This refers to the period of time that you lock in your chosen interest rate and type. Most common is a five-year term. After this period expires you’ll be free to negotiate with a lender of your choice before entering another term. You’ll do this throughout the duration of your mortgage amortization period.  Amortization period: This is the lifespan of your mortgage. Most common is a 25 year period and this is the maximum term allowable for someone whose down payment is less than 20% of the total purchase price. 30 years is the maximum allowable amortization period for any mortgage. Some buyers choose periods of less than 25 years - which results in higher regular payments - but this strategy would allow you to be free of your mortgage more quickly, with a lower overall amount of interest paid.  Payment frequency: monthly mortgage payments are most common, although other options are available, including accelerated payment options that reduce your amortization period ahead of schedule.  How Do Mortgage Calculators Work?  A mortgage calculator uses the above information to provide you with an overview of your financial obligations under a host of different circumstances. Houses are listed by total purchase price, but mortgage calculators tell us about the nature of our monthly commitments, which is often more relatable and relevant information.   Pinsky Mortgages offers two free mortgage calculators for your use. The Mortgage Calculator BC allows you to view information depending upon the aforementioned variables, with a particular emphasis on the effects of additional prepayments on the overall scope of your mortgage.  The mortgage affordability calculator allows you to reverse engineer mortgage information according to one of three variables: annual income, purchase price, or total monthly payment amount. For example, if you input your annual income, the calculator will suggest a suitable purchase price and give you a picture of your monthly commitment. If you input a purchase price or total monthly payment amount, the calculator will give you information on the other two variables.  How Much Mortgage Do I Qualify For?  Each lender has their own criteria for loan qualification, but they all revolve around similar factors. A higher salary, a larger down payment, and less existing debt will all work in your favour. Good credit history will help you qualify for more favourable terms.  There are some general rules of thumb that financial advisors adhere to. It’s often recommended that your total mortgage not exceed 2.5 times your gross annual income. Your front end ratio, or mortgage, property tax, heating and any condo fees (if applicable) to income ratio, refers to the percentage of your gross income that goes toward paying your mortgage. 39% is the ceiling for this number for most, but we can go as high as 44%. Your back end ratio, or total debt to income ratio, includes credit card debt, auto, and student loans and other forms of payment obligations. 44% is the base number here. The amount a lender is willing to approve you for may be lower or higher than the number you calculate based on these ratios. A mortgage broker, like one from Pinsky Mortgages, would be able to help you with your qualification and affordability ratios. How Much Mortgage Should I Take On?  While the previous calculations are mathematical in nature, this question involves some soul searching. Some people are comfortable dedicating a large portion of their income to their mortgage, while others want to ensure that they have ample budget left over for travel, entertainment, and other elements of life.  It’s also important to remember that home ownership has other costs not directly associated with the mortgage. Even in cases where property taxes and insurance are built into the mortgage there are bills to pay. Renovations and maintenance are both factors. Furnaces die. Condo fees may be an obligation. In the end it’s all about your lifestyle and personal goals. Just because you are offered a certain amount of money doesn’t necessarily mean you should take it all.  Pinsky Mortgages believes in crafting individual solutions that are best suited for each of our clients. We value education and personal service and we work for the borrower (not the lender). Our services are free to you, which makes it an obvious choice to work with a mortgage broker such as Pinsky. Book your free consultation today and let us help you make an informed decision that will fit your unique situation.  ### Six Good Reasons to Use a Mortgage Broker When Buying a Home https://www.youtube.com/watch?v=zwt-q9OSFjs Utilizing a mortgage broker is a popular choice for those looking to buy a home or renew a mortgage, but you may find yourself asking ‘why?’. After all, wouldn’t it be more efficient to skip the middleman and go straight to the lender? Not at all. By choosing not to use a mortgage broker you’ll be wasting an opportunity to receive valuable advice, potentially resulting in a poor mortgage choice that doesn’t work with your lifestyle or financial situation. Here are six good reasons to use a mortgage broker.  A Mortgage Broker Can Cut Through the Confusion Are you overwhelmed when you consider the various types of mortgages available to you? You’re not alone. Knowledge is important and a good mortgage broker will prioritize your education and alleviate your stress. Different mortgages come with different interest rates, options, and degrees of flexibility.  There are also considerations related to: ·      home insurance ·      home ownership structure ·      credit scores ·      the Home Buyers’ Plan An experienced mortgage broker will be able to provide you with information, education, and perspective. They’ll be able to break down complex subjects into easily understood information. Failing to take advantage of this resource is a mistake.  You’ll Save Time and Energy Are you busy? Most of us are. Researching and applying to a host of lenders is tedious work when undertaken by the would-be homebuyer. Leave this legwork to a mortgage broker who knows how to zero in on your best options and streamline the process.  Homebuying is exciting, but the paperwork is probably not the part that fires you up. Spend your time looking at homes and planning your décor instead. Money doesn’t grow on trees and neither does time, so experience the benefits of one-stop shopping that a mortgage broker can provide.  Did you know?   Applying for too many mortgages can hurt your credit. Each application may result in a credit check, potentially impacting your credit score. Streamline the process with a mortgage broker and avoid this risk.  You’ll Be Able to Choose the Mortgage that’s Right for YOU It’s not always the case that one mortgage option is necessarily better than the other, but it might be better for you. Making the best decision means considering budget, long and short term goals, and attitudes toward debt and risk.  Are you best suited for a fixed or variable rate mortgage? Are accelerated mortgage repayment plans right for you?  A mortgage broker understands that everybody is different. There are literally hundreds of offerings out there from a wide range of lending institutions. Those who rely upon an experienced mortgage broker will benefit from their familiarity with these options.  Mortgage Brokers Work for You, Not the Lender A mortgage broker’s job is to consider the best interests of you, the borrower, not the lender. Brokers work with many different lenders and scour rates, flexibility, options, and fine print in order to get the best deal for you. Brokers negotiate on your behalf and aim to find you a deal that you might not have found yourself. Only then will they have earned your business.  Word Gets Around!   Positive word of mouth is a big part of a broker’s business model. They earn referrals by pleasing the client, not the lender.  You Don’t Know What You Don’t Know Most homebuyers know to be on the lookout for a good interest rate, but this is only the tip of the iceberg. Do you know what a home inspection is supposed to include? What happens when an oil tank is buried in your yard? Mortgage brokers have seen a thing or two and can be a valuable source of wisdom for many aspects of the homebuying process.  Mortgage Brokers are Free to You You read that right, mortgage broker services are free for the borrower. They’re paid instead by the lending institution that ultimately writes the mortgage. The borrower, therefore, has much to gain and nothing to lose by using a broker.  Let Pinsky Mortgages Work for You Pinsky Mortgages has the experience necessary to guide you through the mortgage process and save you money. Our commitment to educating our clients is evident in our extensive blog, which serves as a resource for those looking to gain a more complete understanding of the home buying and mortgage process.  Our friendly staff are just as informative and helpful in real life, and would love to learn more about you and your goals, so book your free consultation today.  ### Tenants in Common vs. Joint Tenancy: What's Right for You https://www.youtube.com/watch?v=wK5xvx8D6mU Buying a home with one or more other people requires you to make an important decision: do you register your home as a joint tenancy or as tenants in common? Your choice will affect your equity, your future taxes, and your ability to make decisions regarding the home. What’s the difference and which option is better for you? Let’s find out.  What’s the Difference Between Joint Tenancy and Tenants in Common?  When two or more people buy a home under a joint tenancy situation then each of the homeowners are considered to be co-owners of the entire property.  Under a tenants in common arrangement, each person agrees upon an individual equity share, similar to the way that shareholders hold stakes in a company. One owner, for example, may own a 75% stake in the home, while the other would take an ownership stake of 25%. Equity of Ownership Implications If the home is being bought primarily for investment purposes, it may be better to register as tenants in common. This is the easiest way to ensure that each homeowner gets the proper amount of equity that they’re entitled to if the home is sold.  Tax Benefits of Joint Tenancy and Tenants in Common The taxation situation will be quite different under a joint tenancy situation than it will be under tenants in common. This involves the right of survivorship, capital gains, and property transfer tax, each of which warrant their own explanation.  Right of Survivorship In joint tenancy, when one owner passes away the remaining owner(s) automatically absorb that person’s share. In cases where there are more than two owners, this continues with the subsequent passing of each owner.  In a tenants in common arrangement, the home equity of a deceased owner becomes part of their estate, similar to any other possession. This makes it easier for them to bequeath their portion of the home equity to a specific beneficiary, but, on the downside, it makes that equity taxable. Joint tenancy bypasses these taxes, but makes it more difficult to pass your equity along to a beneficiary of your choice.  Capital Gains In Canada a principal residence is not subject to capital gains taxes. If you buy a principal residence for the purposes of living in it and later sell it at an increased value, your gains are not subject to capital gains taxes.  Alternately, capital gains made as a result of an investment property are taxable. If a group of investors sell an investment property at a profit, then each investor would pay capital gains on their proportionate share. However, consider the example of a home bought jointly by parents and a child for the child to live in. If the home is purchased as tenants in common the child could claim a 99% equity, with the parents claiming the remaining 1%. If the home is later sold at an increased value, the capital gains tax will only apply to the parents’ 1% of the equity because the remaining 99% falls under the primary residence exemption.  Property Transfer Tax A similar rule applies to property transfer taxes. If one party is exempt from PTTs and the other is not, the tax will only be applied to the portion of the equity owned by the non-exempt party, provided that a tenants in common registration is in place.  Asset Control Another important consideration when weighing joint tenancy against tenants in common is asset control. Under joint tenancy each tenant owns 100% of the property, meaning that all parties would have to sign off on any changes in ownership.  As we discussed earlier, a tenants in common situation is more like company ownership: each party is free to sell their share of the home without receiving permission from the other owners.  A  Word on Mortgages Lenders don’t care if you register as a tenant in common or a joint tenant, but it’s almost impossible to mortgage just one person’s share of tenants in common without taking into account everybody else’s.  Should You Register as Joint Tenancy or Tenants in Common? With so many variables, there’s no one answer to this question. Instead, it’s a matter of deciding what’s right for you. What are your plans for the house? What are your long term goals? Making the correct decision requires big picture thinking.  At Pinsky Mortgages we not only help our clients get mortgages, but we aim to ensure that they get the right mortgage for their particular situation. This means demystifying the mortgage process, and gaining an understanding of mortgage insurance, the home buyers’ plan, and much more. There’s a lot to consider, which is why we offer free consultations geared to help us understand you and your plans. Once we’ve done this, we can confidently provide you with the advice best suited to you.  Book your free consultation! ### What is Mortgage Insurance? 7 Common Questions Answered https://www.youtube.com/watch?v=EDS_0bjO4lY You’re looking to purchase a home and you’ve heard that you’ll need mortgage insurance. While Canadians often pay for this service, many don’t understand what it is. We’ll bring you up to speed by answering seven common questions about mortgage insurance.  Do I Need Mortgage Insurance? If you’re a Canadian utilizing a mortgage to buy a home and you’re unable (or unwilling) to make a 20% down payment, then yes, you need mortgage insurance.  Why Do I Need Mortgage Insurance? Mortgage insurance is put in place to protect the lender against the possibility of you defaulting on your mortgage.  Simply put, if a homebuyer defaults on their mortgage, lenders look to recoup their money by selling the home. On homes where the mortgage total is significantly less than the total purchase price, lenders find themselves in a safe position. In cases where the mortgage total is nearly as great as the purchase price, lenders run the risk of being unable to recoup their funding. For this reason, mortgage insurance is mandatory on all purchases where the down payment is less than 20%.  Of note: the minimum down payment on home purchases in Canada is 5% on homes under $500K. Homes purchased for more than $500K will require down payments equal to 5% of the first $500K, and 10% of the remainder. Homes over $1M require 20% of the entire purchase price.  How Does Mortgage Insurance Help Me? Mortgage insurance makes it possible for you to buy a home. Most of us are not walking around with 20% of the value of a home in our jeans pockets. In a world without mortgage insurance, lenders may be simply unwilling to deal with the average hopeful homebuyer. Which Mortgage Insurance Companies Operate in Canada? There are three mortgage insurance companies serving the Canadian market. They are CMHC (Canadian Mortgage Housing Corporation), Sagen (formerly known as Genworth), and Canada Guaranty.  Is Mortgage Insurance the Same as Home Insurance? Mortgage Creditor Insurance? No, these are three different things. As discussed, mortgage insurance protects the lender from the possibility of the home buyer defaulting. Home insurance protects the homeowner against such things as fires, flood, and theft. Mortgage creditor insurance is personal life and disability insurance connected with your mortgage. Pinsky Mortgages is happy to provide you with additional information on the various types of insurances related to mortgages and homes.  How Much Does Mortgage Insurance Cost? While rates can vary, it’s typical that mortgage insurance will cost approximately 4% of the amount of your mortgage. This cost will be added up front and folded into the amount of your mortgage.  Let’s consider the following example:  You purchase a home for $500K, and make a down payment of 5% ($25K). The amount owing in this case is $475K.   4% of that amount is $23,750, which is added to your mortgage, bringing the total to $498,750.  If you quickly choose to resell your home and do so for the same $500K price you paid for it, you’ll be left with a mere $1250. This amount will not even suffice to cover your closing costs. Your down payment has essentially vanished.  How Does Mortgage Insurance Protect the Value of Canadian Homes Some home buyers see mortgage insurance as a penalty they incur for failing to make a 20% down payment. While it does indeed protect the lender, it also protects Canadian homeowners collectively.  Canada’s mortgage insurance system reduces the likelihood that the Canadian housing market will crash in a manner similar to that experienced in the United States in 2008.  In that instance, lenders found themselves in a situation where defaults were piling up and mortgage insurers were unable to protect them. As a result, lenders were forced to sell a high number of homes in a short timeframe, causing home values to plummet. This was bad news not only for lenders and those unable to make their mortgage payments, but for all homeowners who found their investments devalued.  Unlike US mortgage insurance providers, Canadian companies are paid their full premiums upfront, and they are also better funded. This protects the Canadian marketplace from a sudden crash.  Pinsky Mortgages Can Help If you find yourself with additional questions pertaining to mortgage insurance or any other aspect of the home purchasing process, Pinsky Mortgages is here to help. Our team values education and believes that decisions of this magnitude should be well-informed. Ask us a question today, or set up your free mortgage consultation.  ### Understanding the Homebuyers' Plan: 10 Questions Answered https://www.youtube.com/watch?v=jsNxwNvV97o Canada’s Home Buyers’ Plan is a financial tool designed to make first-time home ownership more accessible. The program is of interest to those who look to benefit from tax deductions as they save for their first home, as well as those who wish to leverage current RRSP savings to buy or build one. There are limits, however, to who qualifies and the amount they qualify for. In some cases, those who qualify to participate may not even benefit from doing so. Let’s address ten common questions about the Home Buyers’ Plan.  How Does the Home Buyer’s Plan Work?  The HBP allows you to make a tax-free withdrawal from your registered retirement savings plan (RRSP) to buy or build a qualifying home. With housing prices being what they are, it’s a great way to cover your down payment.  What are the Financial Benefits of the HBP Program?  Contributing to your RRSP savings enables you to take advantage of a tax benefit while you’re saving for your home. This will allow you to grow your savings more quickly. Then, when it’s time to deduct the money in order to make a down payment on your home, you’ll be able to do so tax-free.  What’s the Catch?  You have to pay your RRSP account back for the amount you withdrew. After a two year grace period you’ll be obligated to repay 1/15th of the total amount annually, ensuring that it’s been completely repaid within 15 years. If, for example, you withdrew $30,000, you’ll have to make minimum annual contributions of $2,000 to your RRSP account. You may choose to think of this as a 15 year loan to yourself that you are able to repay interest-free.  Does the Home Buyers’ Plan Have a Limit?  There is a $35,000 limit to the amount an individual is able to deduct tax-free from their RRSP account when purchasing a qualifying home. A spouse, however, can also deduct $35,000 from their own RRSP account, allowing couples to access a total of $70,000. Do You Have to be a First-Time Home Buyer to Participate in the HBP? What does that Mean?  The program is only available to first time home buyers. To qualify, you may not have lived in a home that you owned for the past four years (dating back to Jan 1 of the fourth year prior to the year you buy your new home). You may also not have lived in a home owned by your spouse during that time period. There is an exception, however, allowing homeowners to participate when purchasing a home for a relative with a disability.  What About Spousal Breakups? Several years ago a provision was added which allows a person to qualify when their marriage or common law relationship has dissolved. In such cases a person will qualify, even if they had previously owned a home, provided that they have lived apart from their spouse or common law partner for at least 90 days as a result of a breakdown in their marriage or common law partnership.  Can the HBP Program be Used to Purchase a Rental Property?  No. The purchaser of the house must intend to occupy the home as their principal place of residence within one year after buying or building it. In cases where the home is being purchased for a relative with a disability, that person must make it their principal residence.  Are There Any Other Limitations?  The money must have been in the RRSP account for a minimum of 90 days before it can be accessed through the program. (Don’t try to put it in there on Monday and yank it on Friday). The program participant must also be a resident of Canada at the time of withdrawal and up to the time when the home is bought or built.  Finally, the house must be bought or built by Oct 1 of the year after the withdrawal.  Is the Home Buyers’ Program a Good Idea for Everyone?  While the program is helpful to many, it may not be for everyone. In just one example, the HBP can be great to decrease taxable income in the year one invests in RRSPs, but it may also decrease how much is available for a down payment should there be enough in a client's RRSPs already. Don't worry, at Pinsky Mortgages, we can help you determine the best course of action and if the HBP is for you. Can Somebody Participate in the Program Multiple Times?  If a person who previously participated in the HBP finds that they once again meet the qualifying criteria, they may participate again. In order to do so, the amount they owe their RRSP account for the repayment of their previous withdrawal must be zero.  Participating in the program is a bit of a process, but it’s worthwhile in many cases. If you have any questions, or simply seek guidance in navigating the program, please book a free consultation with Pinsky Mortgages. Our goal is to ensure that our clients make informed decisions with respect to obtaining mortgages and financing their homes. We look forward to hearing from you today! Book your free consultation. ### Personalized Mortgage Strategies “Getting a low rate mortgage is only the first step… the advice that comes with the low rate is far more valuable!” Every one of our clients receive a personalized, in-depth Mortgage Strategy Guide. Your personalized strategy guide is created with your personal situation in mind and is also based on your ability to pay down your mortgage. By following your guide, you can reduce your overall mortgage costs and mitigate against rising mortgage interest rates! Below is an example of our Mortgage Strategy Guide’s first component: what happens after the term is complete and mortgage rates increase by 1%, 2% and 3% respectively. Getting Rid of "Payment Shock" As you can see from the above, increases in interest rates can cause large increases to your monthly mortgage payment. This unexpected increase is called payment shock. Implementing your mortgage strategies will drastically reduce or negate potential increases in payments due to future increased rates. We Have Two Personalized Strategies Based on our meeting and your ability to pay down your mortgage, we will create two payment strategies for you using pre-payment options specific to your mortgage. Our first strategy is the most conservative extra payment you can manage (above). The second strategy combines with the first and adds a lump sum payment. Extra payments go directly to pay down your principal mortgage balance. Each Situation is Unique The biggest challenge you may have is getting proper advice based on you unique situation. Our Mortgage Strategy Guide is prescriptive for all clients but it may not be the best route, depending on your future housing goals. Please don’t hesitate to contact us for any questions relating to your housing goals. ### How to Get Approved for a Mortgage: Demystifying the Process https://www.youtube.com/watch?v=0a1kg5ZvXM0&t=3s You’re looking to get approved for a mortgage, but it seems like a daunting process: there’s paperwork to be collected and submissions to be made, not to mention the sense of vulnerability that comes along with disclosing your financial situation. Understanding the mortgage approvals process can help put your mind at ease. What do lenders look for? How do pre-approvals work? Let’s break it down and get you one step closer to your move-in date.   Four Things Lenders Look For  Before granting you a loan, lenders will want information on four general aspects of your situation.  Income and Employment: Lenders are required to verify that you will have the capability to repay your mortgage. Examining your income and employment situation helps them to determine the amount of loan you can be reasonably expected to handle. To demonstrate this, you’ll need proof of employment in the form of a letter of employment or pay stub.  For those who are self-employed or who receive portions of their income in variable structures (such as bonuses or commission), T4 slips for the previous two years may be required.  Debt and Credit: Now is the time to thank yourself for being a responsible manager of debt, or to start making up for past mistakes. As we noted in a recent article, your credit score is an important, but manageable, piece of your financial picture. The extent to which you currently carry debt through credit cards, lines of credit, or other financial obligations will affect your ability to qualify for loans, as will your past financial behaviour.  Down Payment: If you’ve saved a sizable amount of money for your down payment, this will certainly be looked at favourably. It’s important to note that you may be required to demonstrate where this money came from. If large sums of money have recently been moved around, the process may become cumbersome, but those with a good explanation (i.e. not money laundering) will ultimately be successful.  The Property You Plan to Purchase: Before financing your purchase, lenders will look to ensure that your investment is a good one. In British Columbia, property documentation will be necessary, including Strata Form B for condo purchases.  An independent appraiser may be necessary in some situations, while in others an internal valuation completed by the lender may suffice.  Three Advantages of Pre-Approvals A pre-approval is a promise from a lender to give you a certain amount of money. While anyone is free to shop for homes, those who have been granted pre-approval enjoy three advantages.  Confidence: Why waste your time shopping for homes you don’t qualify to purchase? By getting pre-approved, you can explore your options with confidence.  Negotiating Leverage: Being pre-approved makes you a stronger candidate than another potential buyer who has not yet taken that step. This may provide you with a certain amount of negotiating leverage in some situations.  Budgeting Ability: Your pre-approval will include a 120 day interest rate hold. If rates shoot up during that period, you can continue to shop and budget with the knowledge that your rate will not exceed the agreed upon ceiling.  Three Kinds of Pre-Approvals All pre-approvals are not created equally. In fact, some are not pre-approvals at all. Let’s grade the various types of ‘pre-approvals’ you may be offered.  OK: In some cases you’ll have a conversation with a lender who will ask you some questions, punch some digits into their handy dandy calculator, and spit a number back at you. If that seems a bit too good to be true, it is, because nothing binding has occurred. The term pre-approval is a misnomer here, because all you’ve actually been given a pre-qualification.  Better: You’ve given a mortgage professional information about your income and debts, and they’ve also pulled your credit reports. This allows them to lock in your mortgage rate for 120 days, but since no documentation has changed hands, nothing is for certain.  Best: At Pinsky Mortgages we prefer to help you get your ducks in a row right from the start. This means gathering the appropriate documentation in order to obtain a clear picture and avoid future surprises.  Some mortgage professionals choose to kick this can down the line. After all, it’s a bit more work for them and for you. Unfortunately, this lack of up-front diligence leaves you vulnerable to future headaches and disappointments. Besides, you’re going to have to take this step eventually.  Our job is to present you to lenders in the best possible light, while providing you with quality and attentive guidance throughout the process.  Buying a home is an incredible journey. By helping our clients understand and complete the steps involved, the Pinsky team continues to earn our reputation for customer service.  I want quality, professional guidance that can help me get approved for a mortgage!  Book a free consultation with Pinsky Mortgages today. ### Four Pro Tips for Building Better Credit Maintaining a high credit score is essential for those who don’t want to be denied credit or forced to pay a higher interest rate. Despite this, many Canadians don’t know what their credit score is, or even which factors are involved.  Your “credit bureau” is a report that details your credit cards, credit lines, loans, bill payments, and other aspects of your financial situation and history. In order to ensure you have a strong credit score, follow these four credit boosting tips. 1.Follow the 2/2/2 Rule It’s difficult to demonstrate your ability to handle credit if you don’t acquire credit to manage. As such, your credit score will increase as more credit becomes available to you.  The 2/2/2 rule means that lenders will want to see that you have at least two credit items, for at least the past two years, with a limit of at least two thousand dollars each. Your credit items will include two credit cards, or a credit card and a line of credit.  When your bank or financial institution offers you an increase to your available limit that you don’t need, it may seem  responsible to decline, but by doing so you’d actually be rejecting the opportunity to build credit. It may seem counterintuitive, but assuming credit capacity and managing it responsibly is a better way to build your credit score.  2.Track and Pay Your Bills on Time A slightly more obvious staple of credit building is to avoid staining your record with unpaid bills. This includes obvious things such as maintaining payments on your credit cards and lines of credit, but also more obscure items like  staying up to date with car payments, cell phone bills, and even parking tickets. Failing to do so can have a significant negative impact on your credit score.  While those who are unable or unwilling to pay their bills will likely not be surprised that their credit scores have suffered, others may be  unaware that they have neglected financial responsibilities. Miniscule credit card balances on forgotten accounts can do real damage. Unpaid accounts, with bills sent to previous billing addresses, could be negatively impacting your credit score as we speak. For this reason, it’s wise to keep tabs on your credit score and address any issues as soon as possible.  3.Start Thinking About Your Credit Now. If you haven’t yet started building credit, there’s no time like the present. Think of “credit holder” as a job, the longer you’ve been at it, the more credibility you’ll have. If nothing else, remember this handy rhyme: “The longer you’ve had credit for, the better off your credit score.”  Bonus Tip: If you share a credit card with a parent or spouse, it’s possible that it’s not contributing to building your credit. If you’re a so-signer, as opposed to a co-applicant, you may not be reaping the rewards of your responsible behaviour. The fastest ways to determine if your credit card is recording on your own bureau is to either check your mobile banking app, or request a free yearly credit report from one of Canada’s two credit bureaus, Transunion or Equifax.  4.Keep Low Balances While it’s great to have credit availability, it’s not helpful to use it all. On credit cards or lines of credit, which are also known as “revolving credit items”, you’ll get the best results if you limit your use to around 40% of available credit at any given time.  Consider the following example: if you have $5,000 credit, but find yourself frequently utilizing $4,000 before paying off your balance, you’re utilizing 80%. That’s double the ideal.  There are two paths to rectifying this situation.  The first involves more frequent payments. Instead of accumulating $4,000 in debt before making payments, try paying it down in $2,000 installments.  The second path is through increasing your credit ceiling. If your financial institution is willing to increase your credit to $10,000, then your $4,000 balance will be in line with the 40% rule of thumb.  Understanding your credit score is the first step in ensuring that it stays high (or improves). During your initial mortgage consultation, one of our Pinsky Mortgage professionals will go over your credit score with you, helping you interpret and improve it. It’s part of our commitment to helping you obtain the mortgage that is right for you.  Book a free consultation today.  ### Buried Oil Tanks Turn Dream Homes into Nightmares Buyer Beware:  If you’re considering buying a home in Vancouver (or anywhere else) without ensuring that there are no underground storage tank buried on the property, please reconsider! Other people have purchased properties without doing their due diligence, only to find themselves in nightmare scenarios, with expensive tank removal and soil remediation fees leading to legal challenges as murky and toxic as the soil itself.  https://www.youtube.com/watch?v=xquMaYx-X7s Buried Oil Tanks Common in the 1960s and Prior Before natural gas became commonplace in Vancouver in the late 1960s, underground storage tanks (USTs) were the norm. With an absence of regulation in place, many of these oil tanks were simply left underground, often leading to rust and oil seepage. Nowadays many homeowners are becoming aware of these tanks, often following several generations of previous owners who were completely oblivious to the troubling situation lying right beneath their feet. City of Vancouver’s Oil Tank Removal Policy The City of Vancouver currently mandates that “all heating oil storage tanks that haven’t been used for two years must be removed or safely abandoned (in order to) manage flammable and combustible contents (and) to minimize subsurface contamination risks”.1 The obligations are outlined on the City’s website, as are steps toward removing or abandoning tanks. Liabilities of Homeowners with Buried Oil Tanks The cost of oil tank removal isn’t cheap, but worse yet are the expenses facing homeowners with contaminated soil. It’s estimated that approximately one in five buried oil tanks have seepage issues2, which requires an extensive decontamination process that replaces old soil with new. If the damage extends to neighbouring yards, the situation becomes still more financially burdensome. Several publicized cases illustrate this point. In 2012 a homeowner decided to sell the North Vancouver home she’d owned for 20 years, only to discover that an oil tank was buried beneath her property.2 The removal and decontamination process cost her $85,000.  Even worse was the ordeal endured by a North Shore homeowner in 2008.3 This person discovered an oil tank in her yard, leading her to hire a contractor to remove it. Costs began to spiral as a result of what the contractor described as a ‘nightmare job’ that ‘destroyed’ the property. A lien was placed upon the home, leading to a court settlement that ultimately saw the two parties agree to a lower bill.  At this point the homeowner successfully sued the previous homeowners. Regardless, the oil tank woes caused the sale of the home to fall through.  Detecting the Presence of Underground Storage Tanks USTs are generally found in homes built before 1970, often, but not always, in the backyard. The City of Vancouver offers a database which has records of many UST removals, abandonments, and installations. The same website also details steps for removing or properly abandoning a tank. If the database nets no results, contractors can be hired to confirm the presence or absence of an oil tank in your yard using ground penetrating radar. The completion of the scan will result in certification, providing peace of mind to those with no tanks on site. Although these inspections can cost upwards of $400, it’s money well spent if it helps potential buyers avoid the costly alternative.  The owner of one oil tank removal service says that an inspection of the property can provide an idea of whether or not there’s a tank present.  "There's a few clues that you could look for,” he says. “There's a filler cap in the yard, or a vent pipe up the side of the house, or near the furnace, you have copper feed lines that come through.”2 It's very important to note that many properties on Vancouver Island do indeed still have USTs. If you are buying on the Island, or in an area with less-than-sound record keeping, getting an oil tank scan is paramount! Notwithstanding, the City of Victoria pays for oil tank scans, leading to the cost to be around $20. Underground Storage Tank Assessments Provide Peace of Mind The above are just two examples of homeowners who have been burnt by the discovery of underground storage tanks. Details of these types of stories will differ, but the expenses are seldom low and the court battles are often contentious.  My advice to homebuyers is not to settle for anything less than certified confirmation of no oil tank. If the oil tank scan is conclusive that no tank is present, you’ll be able to proceed without worry. If the scanner is unable to scan the entire property and make a definitive declaration, you’re better off erring on the side of caution.  In fact, a thorough inspection is recommended for all aspects of the home you’re considering purchasing. Without this type of confirmation, a dream home can quickly become a financial, environmental, and legal nightmare that will leave you wishing you’d never stepped foot on the property.  Cited Sources 1 Vancouver, City of. “Underground Storage Tank Removal or Abandonment Permit.” City of Vancouver. Accessed May 17, 2022. https://vancouver.ca/home-property-development/underground-storage-tank-removal-and-abandonment-permits.aspx.  2 “Buried Oil Tank Costs North Vancouver Homeowner $85,000 | CBC News.” CBCnews. CBC/Radio Canada, June 29, 2012. https://www.cbc.ca/news/canada/british-columbia/buried-oil-tank-costs-north-vancouver-homeowner-85-000-1.1210613.  3 Person, and Ctvbc.ca. “Removal of Backyard Oil Tank Costs Woman Small Fortune.” British Columbia. CTV News, March 22, 2011. https://bc.ctvnews.ca/removal-of-backyard-oil-tank-costs-woman-small-fortune-1.621511.  ### Are Accelerated Mortgages Worth it? It Depends. https://www.youtube.com/watch?v=AS0Tc28fkHs Are accelerated mortgages worth it? Do they result in less interest paid over the life of my mortgage? Is it the right option for me? Just what IS an accelerated mortgage? These are all questions we’ve heard before, so let’s get to the bottom of this mortgage payment option.  What is an Accelerated Mortgage?  An accelerated mortgage is a means of paying off your mortgage a bit faster by adding a small amount to your weekly or biweekly payments. The amount added is such that you make the equivalent of one extra monthly payment per year.  Many Canadians choose to make monthly mortgage payments, although they also have the option of paying semimonthly, biweekly, or weekly. Those who elect the weekly or biweekly options may opt to use the accelerated payment model. This approach ultimately shortens the mortgage’s lifespan, making you debt-free faster.  Example of Accelerated Mortgage Math Let’s take a look at a quick example of how accelerated mortgages work.  Suppose Emma is on a monthly mortgage schedule, paying $1000 per month for a total of $12,000 in payments per year. She considers switching to a biweekly schedule. This would require her to make 26 payments per year, so in order to maintain her current rate of progress, she’d make each payment in the amount of $462, which is$12,000 divided by 26.  Eager to make faster progress, Emma then investigates an accelerated biweekly payment schedule. Under this arrangement she would make the equivalent of one extra monthly payment per year, for a total of $13,000 annually. This total, when divided by 26, amounts to biweekly payments of $500, a $38 increase over her non-accelerated biweekly total. Over the course of a five year term Emma will hasten her schedule by five months.  Is an Accelerated Mortgage Schedule Right for Me? That’s tough to say, we don’t even know you (although, a free consultation could change that in a hurry!). It’s true that an accelerated mortgage plan will shorten the lifespan of your mortgage, which in turn will result in you paying less total interest. We find, however, that people tend to overestimate the amount of interest that will be saved.   Ask yourself: can your monthly budget absorb the higher hit? If the answer is yes, perhaps an accelerated mortgage is the right option for you. If not, it may be more prudent to stick to a more traditional payment schedule.  Don’t forget: opting for a biweekly payment schedule (accelerated or not) means that twice a year you’ll be dealing with the dreaded ‘three-payment month’.  What are the Opportunity Costs of Accelerated Mortgages? If you have the capacity to tackle an accelerated mortgage schedule you will kill your mortgage quicker, which sounds like a great idea. On the other hand, it’s important to consider what else you might have done with that money. It could have been invested in RSPs, which decreases your taxable income. This could help you save for another purchase, such as an investment property, which could be a better use of money. Are Accelerated Mortgages Worth It?  There is no definitive answer to this question, as it’s a decision that must be made on a case by case basis. Your income, your financial stability, and your short and long-term financial goals must all be considered. Some people like to get a leg up by paying their mortgage down more quickly. Others would prefer to put the extra money towards investments, home renovations, or even a bucket list trip. It’s your money!  At Pinsky Mortgages we want to help you understand the options available to you and the implications of each potential choice. We offer free consultations, where we’ll help you decide what’s the best option for you, taking into account your financial goals, economic situation, and attitude toward debt.  Request a free consultation and begin planning your financial future today.  ### Home Inspections: Don't Bet the House https://www.youtube.com/watch?v=QAPwCRwEXpM Is it always necessary for home buyers to get a home inspection? What about condo buyers? Let’s take a look at the reasons for getting an inspection and consider what they’re likely to uncover, as well as what they won’t.  Reasons to Get a Home Inspection Buying a home is a major decision that involves both finances and emotions. It’s easy to fall in love with a home, prompting many home shoppers to want to throw caution to the wind and charge full steam ahead with the purchase. In a seller’s market things can unfold quickly and making an offer that does not include a home inspection can give would-be buyers a leg up. It’s important not to succumb to this temptation. The love you feel for your new home could dissipate quickly if major problems are uncovered.  For obvious reasons, sellers may not be motivated to disclose all of the faults that are hidden in their home. In some cases they may be genuinely unaware. Entering into such a massive financial agreement without completing your due diligence is akin to taking your life savings to the casino. Don’t do it!  What are Home Inspectors Looking For?  The number of problems that a good home inspector may uncover is extensive, and the review involves a home’s exterior, interior, and the components within. They’ll look at the foundation and basement, checking for leakage. They’ll inspect fuse boxes and electrical outlets. They’ll ensure that the plumbing is in good order, as well as HVAC systems. Floors, walls, ceilings, windows, attics, crawl spaces, roofs, eavestroughs, property grading, and appliances will be inspected as well. Not only will your home inspector seek to protect you from financial damage, but from life-safety hazards as well, potentially uncovering mold or faulty wiring that could cause a house fire. Are Inspections Necessary for Condo Purchases? Many people consider inspections less critical for condominiums, but they’re still not a bad idea. Oftentimes condo inspections will only pertain to the unit itself; appliances, walls, water damage, plumbing, and the like. Other condo inspections will be more extensive and will examine common areas and elements of the condo building, such as elevators, parking spaces, common areas, and the building’s exterior and outdoor property.  Unlike detached homeowners, condo buyers will be able to share the misery of future large scale structural issues with the other tenants. Elevator or roofing problems, for example, will often fall under the domain of the condo board. This doesn’t mean they won’t be expensive! An inspection will help you identify likely future problems and anticipate potential assessment fees or condo fee hikes.  What Will Home Inspections Find? Home inspections won’t find everything, but they’ll always find something. Some inspections are more thorough than others, but few inspectors will have the ability to see inside walls, pipes, sewer lines or chimneys, or behind electrical panels.  It’s also important to note that no one person is an expert on every aspect of a home. If a home inspector does flag a major problem, they’re likely to refer you to a specialist for further assessment.  It’s also worth mentioning that most assessments will find something amiss with the home. Homes, like people, all have slight imperfections, so don’t be deterred when your home inspection report lists a few flaws. Your home inspector should be able to help you put these flagged items into context; are they inconveniences to overcome, or absolute deal-breakers?  What Happens if the Home Inspection Reveals a Major Flaw? Many potential buyers will include a home inspection contingency in their offer, giving them a certain period of time (often 7 days) to walk away penalty free if the inspection reveals a substantial issue. In a sellers’ market, some sellers will not agree to such a clause. Prudent buyers will consider this a red flag. In some cases lenders will require a home inspection as a condition of providing financing.  In most cases the home inspection simply serves as a launching point for a negotiation. The selling party may agree to fix the problem or to provide a discount from the agreed upon price. Minor problems are often simply considered the price of doing business. Like any negotiation, it really all boils down to which party is more desperate to seal the deal.  With so much on the line, it’s important to err on the side of caution. You’ll want to select a home inspector with a good reputation. Do your own homework as opposed to simply trusting the suggestion of the seller or real estate agent.  Home inspections typically take between 1 and 3 hours. Ultimately, the home inspector will provide you with a detailed report, but that doesn’t mean it’s a bad idea to be present during the inspection. Seeing the process with your own eyes and asking questions will give you a more thorough understanding of the home you’re about to purchase. The peace of mind that comes from a home inspection will ensure that your first night in your new home will be one you spend sleeping soundly.  ### Interview with Renowned Economist Sherry Cooper https://www.youtube.com/watch?v=Qz9ne6eRH3o “This is a seller’s market and has been for a very long time,” says Sherry Cooper of Canada’s housing market, “and the biggest problem is insufficient supply.” In a recent interview session presented by Pinsky Mortgages, the sought after speaker, who serves as Chief Economist of Dominion Lending Centres, shared her knowledge and perspective on everything from inflation and interest rates to world events and the housing market. Her rare combination of experience, insight, and charisma were apparent throughout the presentation, as well as the Q&A that followed.  Housing Supply Insufficient “The supply of homes, be they for rent or for sale, are totally inadequate to meet the population growth we’ve already had since 2016, let alone what’s coming in the next few years,” says Cooper, noting expected increases in immigration levels.   The former Chief Economist of BMO Financial Group expects the housing crunch to continue unless action is taken at a local level.  “The Federal Government has proposed all sorts of initiatives, but the Federal Government doesn’t really control home construction,” says Cooper. “We need to see incentives to speed up the approval processes, as well as rethinking zoning regulations,” she continues. “Allowing medium density development in low density areas is the only way to improve the supply of housing, particularly more affordable housing, but let’s face it, the likelihood of that happening when there are municipal elections coming everywhere is hard to imagine.”  Factors Contributing to Inflation “I do believe that much of the inflation that we’re seeing is the direct result of shutting down the global economy, and then having to reopen it, which caused enormous dislocations,” explains Cooper. While supply chain disruptions, commodity price booms, and the Ukraine war all contribute to rising prices, wages struggle to keep pace.  “Wages (have) increased by 3.1%, and clearly more wage inflation is likely to come,” says Cooper. “It is still well below the actual CPI inflation rate, so families in Canada are experiencing a reduction in their purchasing power.” A Return to the 70s and 80s?  While Cooper doesn’t expect a return to the double-digit inflation experienced in the late 1970s, she notes that the current situation is conducive to significant upward pressure. She lists many factors that contributed to relatively low inflation during the last several decades, including decreasing union power, reducing manufacturing costs as a result of globalization, technology, and the internet removing middlemen from many transactions.  “Remember that all businesses worked on a just-in-time inventory basis,” says Cooper, “now they’re getting to see what the downside of that is.” Seeing the current supply chain difficulties as a wake-up call, Cooper believes that globalization has “peaked.”  “Globalization was great when everything was running smoothly,” says the economist. “Now there’s been a major paradigm shift. If anything, we’re going to start to see the businesses bring a lot more production back home to avoid these supply bottleneck problems. Every country in the world, their deficits have exploded, because they were working to cushion the blow of the negative impacts on people’s jobs and income during Covid. So fiscal policy is no longer tight. The only thing left, really, that will be disinflationary will be technology.” Bifurcated Labour Market  “It is very much a bifurcated labour market, and those who could work from home are typically the ones who have actually benefited over the course of the last two years,” says Cooper. As the economist explains, those who work from home are more likely to have benefitted from rising real estate and stock market values, further increasing their net worth.  Income inequality has led to much discussion over the social safety net and guaranteed income, something that Cooper believes is closer to reality in Europe and Canada than in the U.S.  “It’s public policy and whether or not people are willing to stomach it,” she says. “I can’t see it in the US any time soon. Canada’s top marginal tax rate is 54%; in the United States it’s 39%. We have a much more progressive tax system.”  Markets Can be Wrong Cooper’s understanding of finance is clearly razor sharp, but she’s careful to point out that she possesses no crystal ball. Although she expects interest rates to elevate and remain above recent levels for some time, she knows that nothing is for certain.  “There’s nothing like a recession to get interest rates back down fast,” she says. “I don’t think a recession is imminent, but who knows?”  Cited Sources Personal contact with Sherry Cooper ### 4 Common Mortgage Questions, 4 Good Answers We love answering mortgage related questions! In fact, it’s a big reason we get out of bed in the morning. We’ve heard all sorts of questions over the years, but we thought we’d pick a few common ones people are asking right now and address them here today. If you have a question we didn’t include, please don’t hesitate to contact us!  What is Mortgage Underwriting?  A mortgage underwriter is someone in a lending institution assessing the risk of lending money to a particular individual or group. In the case of mortgage underwriting, an underwriter would consider the borrower’s ability to repay the loan based on income, credit history, down payment, the property being purchased or mortgaged, and more. The underwriter has final say on whether a file is approved or passed on (declined). When a Mortgage Broker uses the term “underwriting,” we mean that we are setting up a file to be submitted to a lender for approval. Brokers tend to hire “underwriters” on their team who can process mortgage applications but are not real underwriters of a lending institution. These processors do a good job of preparing applications for underwriting and the term “preparing the application” can also be thought of as “underwriting” an application.  So while Brokers use the term underwriting as a catch-all for application processing and application decision-making, the actual term is only for decision making. What is a Mortgage Stress Test? Why Will My Results Change?  https://youtu.be/TrfPjHvkY3c A mortgage stress test is a formula used to determine how much money can be lent to a particular borrower with minimal risk of default. In Canada all those who are applying for mortgages to purchase or refinance homes are subject to this test. Those looking to switch to a new lender are also required to take the test.  The stress test factors in such things as your annual income and monthly expenses, but also considers interest rates. The goal is to determine that an increase in interest rates is unlikely to render you unable to meet your monthly payments.  Potential borrowers are stress tested using the greater of the following two numbers:  ·      5.25%, which is the Bank of Canada’s mortgage qualifying rate (MQR) ·      Your contract rate + 2% This means that if you are able to secure a loan at a rate below 3.25%, you will use a rate of 5.25% when taking the test. If the rate of your loan climbs above 3.25%, then adding 2% will put you above 5.25%, ultimately reducing the size of loan you will be able to qualify for. While the stress test does lead to disappointment when people fail to qualify for the mortgage needed to purchase a desired home, it does provide a good safeguard, preventing people from overextending themselves. What’s the Difference Between Variable, Floating, and Adjustable Interest Rates?  https://youtu.be/SN9ii7MI-6M First things first: a floating interest rate is an adjustable interest rate, they’re simply two names for the same thing. A variable interest rate is something else. Let’s explain. A variable interest rate means that your monthly interest payment will change with the market rate. However your overall monthly payment will remain the same for the length of the term. When interest rates increase, you’ll simply be applying a smaller amount of your monthly payment to principal; this means you’ll be paying off your mortgage more slowly. Of course the opposite holds true when interest rates decrease, allowing you to chip away at your principal more quickly. The benefit of the variable interest rate is in its predictability; you won’t have to guess what you’ll owe each month. What isn’t predictable with a variable rate is your amortization schedule. You may add years to the life of your mortgage.  An adjustable (or floating) rate means that an interest rate change will result in a fluctuation to your monthly payment. On the plus side, you know exactly how much principal you’ll pay off each month, allowing you to determine your ‘mortgage-free date’ with certainty. On the downside, a sudden rate-hike announcement by the Bank of Canada can leave you with less disposable income and have you scrambling to adjust your monthly budget accordingly.  If I had to choose, I would almost certainly choose a variable rate over an adjustable rate every time. The main downside of the variable rate is that a borrower may pay their mortgage off more slowly if rates increase. However, all mortgages allow borrowers to increase their payments so that their mortgage can act as an adjustable rate mortgage, providing for keeping amortization the same, or pay off the mortgage even faster.  Are Mortgage Loans Tax Deductible in Canada?  https://youtu.be/Rqr5Zz_O58I Yes, but only if the loan is used for investment purposes. Interest paid on a mortgage for your primary residence is not tax deductible in most cases, but there is a strategy that can have a similar effect.  The Smith Manoeuvre In one instance, a borrower may make mortgage payments, and the amount of the principal paid can be immediately re-borrowed and used on an income producing investment. Under this arrangement, the total amount of the mortgage owed doesn’t change, but the portion attributed to the home decreases, as the amount owing to the investment increases. Because investment loans qualify for a certain amount of tax benefit on interest paid, the interest is tax deductible. Of course this plan carries with it the inherent risk that the investment may decrease in value, but it has helped many Canadians increase their net worth.  Taking out a Home Equity Line of Credit or Additional Mortgage  The proceeds of money mortgaged from a home that is then used for a non-registered investment is tax deductible. If you refinance your home and increase the mortgage (or add a HELOC) and then invest that money, the interest on the increase is now tax deductible against your investment income and/or employment income, depending on the situation. Helping people understand, evaluate, and secure mortgages is what we do. For most people, a home is someone’s largest investment, so it’s only natural to seek information when making mortgage decisions. No question is too big or too small, so contact Pinsky Mortgages today.   ### Who's Got Your Back? Insurance Advice with Brent from ZLC Financial Eitan sits down with Brent Davis from ZLC Financial to answer common questions about life, disability and critical illness insurance. Watch the video below ⬇️ https://www.youtube.com/watch?v=1UwEk8DdV5M&t=27s ### Special Feature with DLC Economist Dr. Sherry Cooper A rare opportunity from Chief Economist Dr. Sherry Cooper of Dominion Lending Centres, sharing her outlook on inflation, interest rates, world events, and the housing market. Watch the full video 👇 https://www.youtube.com/watch?v=Qz9ne6eRH3o ### What to Include in a Home Emergency Kit Canadians are regularly reminded that we are fortunate to live in a country of relative stability. Despite this, it’s important for homeowners to prepare for the worst by compiling a home emergency kit that can be utilized if necessary. The potential for extreme weather events, fire, or social unrest to upend business as usual cannot be discounted. For those of us on the West Coast, earthquakes are an additional threat. While your home may be the most expensive purchase you’ve ever made, it doesn’t compare to the value of your safety and wellbeing, so think ahead and ensure that you’ve collected the following crucial items.  The Kit Itself First things first, you’ll want a backpack or other bag that is easy to grab. Some emergencies remove us from our homes, while others confine us to them, so ensure that every member of your household knows where the kit is. Some households prepare kits for each individual, while others prefer one for everybody.  Food and Water Non perishable food such as canned food, dried food, or energy bars will be great in an emergency. To access your canned goods you’ll need a can opener. Utensils and plates will also be valuable. Remember to replace your stored foods on an annual basis.  The Government of Canada recommends storing 2 liters of water per person per day, so it’s best to have enough supply to last for a few days.  Medication and Special Needs Items In an emergency you may not have the time or ability to replace medications, particularly ones requiring prescriptions. Ensure that these are stored with your emergency preparedness kit and are easily accessible. Baby needs and an extra pair of glasses are other examples of items you’ll sorely miss if they’re not included in your kit. Don’t forget about your pets either! Their food and medication should be in good supply and ready to go.  Personal Hygiene Products Everyday items may be difficult to access during a period of chaos, so ensure that hand sanitizer, toilet paper, and other toiletries are prepared. Keep in mind that earthquakes or other natural disasters may leave you without running water.  Important Documents In a grab and go scenario, you won’t want to leave behind your important documents. These could include your birth or marriage certificate, passport, driver’s license, land deed, will, or insurance documents.  Flashlight and Radio In the absence of electricity, hand-crank or battery operated devices are optimal. Such items are not often considered in our high-tech world, but become instantly necessary during extreme circumstances.  First Aid Kit A well-stocked first aid kit should be a household staple. Include sterile gauze pads, adhesive tape, bandages, scissors, tweezers, pins, ice packs, gloves, antiseptic, and other items. These can be assembled yourself or conveniently purchased as a whole. Be sure to restock any items as used to keep the kit full at all times. Seasonal Clothes and Footwear A change of clothes or footwear may provide comfort in an emergency situation. Canadians live in a seasonal climate and temperatures can be prone to substantial swings within short periods of time, so layers are recommended.  A Cell Phone with an Extra Charger or Battery Pack We often take communications for granted, but in an emergency we’ll want to contact loved ones and, without planning ahead, may find ourselves unable to.  Tools and Other Items Everyday items like scissors, pocket knives, or duct tape may prove valuable in an emergency. A whistle may help attract attention. A multipurpose tool or wrench will be important if it becomes necessary to turn off water or gas. If you live in a multi-family building, familiarize yourself with the unit and/or building  shut-off locations. Candles, lighters, and matches should be stored in a waterproof bag. A sleeping bag or pillow could be important for obvious reasons. In a disaster, a household will often want to display a sign in the window that alternately reads ‘help’ or ‘OK’. A pen and pad can suddenly become a valuable means of communication.  A Vehicle Emergency Kit It’s best to be prepared while in your vehicle as well. Jumper cables and a spare tire are must-have items, as are food and water. If you break down near the highway you’ll want to have some bright orange cones to create some space. Sand or kitty litter can also come in handy if you’re stuck on ice and need to gain traction.  Emergency Plan While the aforementioned items are critical to your emergency response, so too is a solid plan. Members of the household should know the whereabouts of the emergency preparedness kit, as well as their individual roles in case of emergency. Establish both emergency exits and meeting places both near the home and outside of your immediate neighborhood. An emergency contact list will also prove valuable.  Being prepared for an emergency will not only provide practical advantages during a time of crisis, but will also help members of the household stay calm. Children in particular will benefit from having a strong, composed adult to rely upon during an emergency. While we all hope to avoid such situations, we will thank ourselves for being prepared should they arise.  The following sites offer considerable information about what to do in case a calamitous event ever occasions the need for your emergency kit: https://www2.gov.bc.ca/gov/content/safety/emergency-management/preparedbc/make-your-plan https://www.getprepared.gc.ca/cnt/rsrcs/pblctns/yprprdnssgd/index-en.aspx#s3  ### Doing things differently: How does a luxury LIVE auction work? Is it a good idea to sell (or buy) a home through an auction? What is a buyer ‘cooling off period’? Eitan and Theo Birkner of Harcourts Real Estate have the scoop on this and more. Watch the full video below 👇 https://www.youtube.com/watch?v=R_dJ8Ez0NeY ### 6 Things Every Millennial Home Buyer Should Know The process of securing a mortgage and buying a house is a potentially intimidating one. Those entering the housing market for the first time, including many Millennials, can become overwhelmed if they don’t receive solid advice. Heed the following six tips and enter the housing market with confidence.  Credit Matters No surprise, lenders will be more willing to extend you credit if you have a good credit history, coupled with strong earnings. Lenders differ in how they calculate their formulas, but generally speaking large debt loads are not looked upon with favour, particularly if they include lingering credit card debt. Working to get your plastic in order will pay off.  Student debt is often tougher to eliminate, but your payments should at least be kept current.  A consistent, high salary is ideal, but those in the gig economy can use income statements and tax returns to demonstrate stability, particularly if they have a significant long-term client.  Nobody’s perfect, of course, but having a decent credit score is a strong start.  A Minimum Down Payment is Required, but Bigger is Better The more money you put down on your new home, the less risk is perceived by lenders. In Canada it’s mandatory to put down a minimum of 5% on homes under $500K. That rate goes up for more expensive homes or for people with lower credit ratings.  Those who are unable to put down 20% (which includes most of us) will be required to purchase loan insurance.  Current homeowners may be able to finance their down payment by selling their current home, but this obviously doesn’t work for first-time home buyers.  Some are fortunate enough to have RSPs or other forms of savings accumulated or a parent or other family member that is willing to step in and help. If not, second jobs or lifestyle changes are not uncommon for those hoping to become homeowners. Browsing homes online while you save will help keep you motivated. There Will Be Legwork Nothing worth doing is completely easy, right? Of course there will be applications to fill out, financial documents to dig up, and conversations to be had. It’s all very doable, so long as proper time and attention are allotted. Plan accordingly. It’s Important to Set Your Budget Carefully If you have good credit and a sizable down payment, you may get approved for a large loan. That doesn’t mean you have to take it all.  If you fully extend yourself to buy the most house possible, you’ll be able to invite all of your family and friends over and show it off! After the tour you can serve them Kraft Dinner, because that’s all you may be able to afford.  It’s important to consider your monthly income and expenses and determine how much of a mortgage payment you can stomach. Don’t forget that there are expenses inherent in home ownership that don’t necessarily apply to renters, such as property tax, insurance, and that phone call you’ll have to make after the furnace craps out. Be wise, consider your personal priorities, and set a price point that works for you.  Research the Market and Predicted Interest Rate Trajectories Nobody can tell you with absolute authority which direction the housing market will head in the near or long-term future, nor can they forecast with certainty potential upcoming interest rate adjustments. That doesn't mean they won't try! Housing has been red hot in Canada and most analysts expect interest rates to tick upwards soon. Educate yourself and consider the implications. Would a fixed or variable rate be better for you?  Help is Important and Available  There are processes to initiate, jargon to decipher, and market forces to assess. Mortgages come with various interest rates, fee structures, and penalty clauses. Even veteran home buyers should not go into this alone.  A good mortgage broker will work for you, helping you make solid decisions and acquire the mortgage that works best for your unique situation. It’s important to note that the broker does not work on behalf of the lender, but on behalf of the homebuyer. Pinsky Mortgages offers free consultations. Contact us today and start your journey towards homeownership with professional help on your side! ### Reverse Mortgage Primer: Life Begins at 55 https://www.youtube.com/watch?v=Vez3Yt187ek Watch the video or read the article below ⬇️ For many hard working Canadians over the age of 55, their home represents their largest financial asset. Despite this well earned equity, it’s not uncommon to find people who are unable to live the life they truly want to live, or even struggling to make ends meet. How can they begin to unlock this value after retirement? Or perhaps during a period of inspiration or need? Unfortunately, the home equity of many Canadians will not be realized until after their funerals. Why struggle through retirement only to find your estate awash in cash after you’ve passed away? This is where the reverse mortgage comes in. Reverse mortgages allow people to continue owning and living in their homes, while benefiting from their value. They’re not for everyone, but reverse mortgages have certainly helped many people enjoy peace of mind, while unlocking their potential to follow their dreams. You’ve worked hard for your home, perhaps it’s time to let your home work for you.  Why Choose a Reverse Mortgage Over a Regular Mortgage?  There are many good reasons to choose a reverse mortgage.   No payments, ever: Your ‘lifetime loan’ will not be due until you sell your home or move. Until then, you may make interest payments if you wish, but you’re under no obligation to make payments of any kind at any time. No income required: Regular mortgages are fine for those with regular incomes, but reverse mortgages are available to anyone with sufficient equity in their home, regardless of current earnings.  No credit required: Access to traditional credit is difficult to attain for older Canadians, but this is not so for reverse mortgages. In the case of a reverse mortgage, your home equity IS your credit.  The mortgage will not be called in the event of one spouse’s passing: Provided that the remaining spouse’s name is on the home title, the mortgage will not come due in the event of their spouse’s passing.  They’re safe and trustworthy: Canada has comprehensive regulations surrounding reverse mortgages, ensuring that the process is legitimate and reliable.  You’ll never owe more than the value of your home: In fact, appreciating home values will often offset the accumulation of interest owed.  You’ll continue to own your home: your name remains on the title and you’ll never be asked to leave.  They’re tax free: the money you receive will be tax free and will have no implication upon government benefits.  Why Get a Mortgage at All?  Money, obviously! The reasons that people choose a reverse mortgage are as unique and varied as the people themselves. Some use the money to take care of debt, improve cash flow, and eliminate stress. Reverse mortgages allow people to live on their own terms, indulge hobbies, travel, and maintain their social lives. People often use the money to improve their home, buy a vacation property, or pay off their existing mortgage. Many need the money for an emergency, or simply want to provide their families with early inheritances while they’re still around to watch them benefit. You can use your money to buy an insane stereo, build a fancy treehouse, or eat artisan ice cream on a daily basis, it’s really not for us to say.  Reverse Mortgages Do NOT Require You to Leave Your Home Of course one could always sell their home in order to raise capital, but who wants to do that? Most Canadians would prefer to spend their retirements in their own homes. Our homes, yards, neighbours, and communities are huge factors in our quality of life.  Provided that you maintain your home and stay current with property tax, your mortgage will not come due until you sell your home or move. You will NOT be asked to leave your home for any other reason.  Learning More About Reverse Mortgages In Canada reverse mortgages are available to all homeowners 55 and older whose homes are valued at $150,000 or higher.  The market offers customized solutions, allowing for lump sum payments or monthly payments, with varying interest rates and penalty structures.  When making a major decision, such as applying for a reverse mortgage, it’s best to do so with full awareness and understanding of the details. A conversation with your lawyer is a must, and a family discussion is often advisable as well.  Pinsky offers stress free guidance to those considering mortgages, both reverse and traditional. Contact us for a free consultation and we’ll be glad to discuss pros, cons, features, and next steps.  Pinsky works hard to ensure that our clients make informed decisions that align with their goals and values.  Contact us for a free consultation today!  ### How To Buy A Home In Vancouver's Low Inventory Market When it comes to the current Vancouver housing market, there's a lot to talk about. Eitan and Cheryl from Cheryl Davie Real Estate discuss the housing inventory shortage, writing "subject-free" offers and supply and demand issues. To learn more, watch the video below. https://www.youtube.com/watch?v=cBLkeYxxaWc ### 2022 Interest Rates Update Eitan sits down with Cheryl from Cheryl Davie Real Estate to discuss where interest rates have been, where they’re going, and what you need to know. In particular, Eitan answers if the anticipated increase in interest rates will change activity in the market and the importance of offer price compared to interest rates. Pressed for time? Skip ahead: 00:00-01:02- Introduction01:03-02:25- Stress Tests02:26- 03:50- Will increased rates change activity in the market?03:51- 05:32- What is the importance of interest rates vs. offer price on home05:33-06:51- Importance of mortgage terms06:52-10:55- Where are interest rates going and where have they been historically? https://www.youtube.com/watch?v=maJ7EkEFRH0 ### Parental Assistance: Helping Your Child Buy a Home While home ownership remains a goal for many young Canadians, achieving it is no walk in the park. Soaring real estate prices have rendered it less a rite of passage and more a mountain to scale for many Millennials and Gen Zs. As a result, parents are stepping in to lend a helping hand with increased frequency. According to a recent report by CIBC Capital Markets, “over the first nine months of 2021, first-time homebuyers in Vancouver received an average of $180,000. This figure increases even more for parents supporting their children buying larger homes, with the average for move-uppers at $340,000.”1 If you’re able to help your child purchase a home, you’ll be giving them a real leg up but, before rushing in, it’s best to consider the financial and emotional implications of various arrangements. Only then will you be in a position to maximize the chances of a positive outcome for both you and your child.  Loaning Your Child Money for a Down Payment (or the Whole Cost) A loan from parent to child covering the amount of the down payment, or even the whole cost of the home, is a common arrangement. As a lender you’ll face less of an impact on your own finances than you would under a gifting scenario. You may choose to charge your child a lower interest fee than a lending institution would, meaning they benefit as well.  Be aware that there are consequences for those who are forced to repay their down payment. If Canada Mortgage and Housing Corporation insurance is required, your child’s financial obligation to you will be noted and will result in a surcharge.  Note, too, that you’ll be required to report any income earned in the form of interest when filing your tax return.  Gifting Your Child Money for a Down Payment or Home Those in a financial position to do so may opt to simply gift their children the money for a down payment or full purchase.  Many first-time homebuyers are used to paying rent, so a monthly mortgage payment will not seem such a foreign concept. Coming up with a down payment may present a larger challenge.  If you’re already planning to leave your children money in your will, doing it now will save them money on probate fees, while allowing you to experience the joy of helping out. In order to help your child avoid the aforementioned penalty associated with borrowing their down payment, you may be required to sign a declaration verifying that it’s truly a gift, as opposed to a ‘secret loan’.  Another consideration, if you buy a house and later gift it to your child, the government will equate the situation to a fair market sale. If the value of the home appreciated during your possession, you’ll be taxed for capital gains.  Co-signing Your Child’s Mortgage Some parents opt to co-sign their child’s mortgage but, again, there are factors to consider. If you currently have a mortgage on your own home, your child will not qualify for a high ratio mortgage; as a result, a larger down payment will be required.  With your name on the mortgage, you will not only risk damaged credit if payments are missed but will also be liable if something goes wrong at the house.  The Importance of a Good Conversation Helping your child buy a home can obviously be a rewarding experience, but it’s important to assess potential pitfalls and plan accordingly. You may feel a sense of ownership of the house, which can lead to a power struggle if your child makes decisions you don’t agree with. Other children could resent the assistance you’ve provided. In the event of your child going through a divorce, equity will need to be negotiated with their ex-spouse. These are emotional situations.  Since it’s a family affair, there may be a tendency to gloss over the details of the financial arrangement. This is a mistake. In cases of loans, what are the exact terms? How involved do you expect to be in decisions regarding the house? What will be the consequences of missed payments? Arrangements between people and financial institutions will, of course, always be defined down to the smallest detail. The difference is that financial institutions didn’t give birth to and raise their customers. While financial agreements between family members are inevitably more personal, that doesn’t mean that they should be entered into haphazardly.  Home ownership is a wonderful milestone. By discussing your financial arrangement openly and in detail, you’ll set yourself, and your child, up for long-term success.  Cited Sources 1Chan, Kenneth. “Urbanized.” Parents gifting Vancouver homebuyers $340,000 on average for down payment. Daily Hive, October 25, 2021. https://dailyhive.com/vancouver/vancouver-homebuyer-down-payments-parents-gifting.  ### 5 Things to Look For in a Mortgage Broker in 2022 In case you hadn’t heard, the Canadian real estate market has, in recent years, been hotter than a man with his shoes on fire. As the price tags have increased, so, too, have the number of people involved in the business, including mortgage brokers. A home is the biggest investment most people will ever make, so securing a competitive mortgage rate, and understanding the details, is of the utmost importance. Here are five ways to separate pretenders from contenders when it comes to mortgage brokers.  A Good Mortgage Broker Will Educate, Empower, and Relax You Buying a home is one of life’s highlights, but few people can sign up for decades of payments without getting a little sweaty under their shirt. Fortunately, knowledge is power and a good broker knows what they’re talking about (this goes back to the experience piece). There are many components to mortgages, and if the topic makes you feel overwhelmed, you’re not alone. Not only will your preferred broker comprehend what’s going on, they’ll know how to help you understand as well. The trick is to present the information to you in a way that is easy to digest, but without skipping over important details. As Albert Einstein supposedly said, “If you can’t explain it simply, you don’t understand it well enough.”  If your broker leaves you feeling relaxed and confident, then you’ve chosen well!  They’ll Give You Options While individual lenders offer just a few options, the market as a whole provides many. A good broker will work to understand your situation, and provide you with several suitable alternatives. They’ll go over the features with you and explain the advantages each provides.  Your ideal broker is the one that will go to bat for you, tracking down the best rates and greatest flexibility the market has to offer, to your long term benefit.  How Many Market Changes Has Your Mortgage Broker Been Through? Watch an NHL hockey game. How many of the players are lacing up their skates after they get home from their other job? None. New mortgage broker licenses are up in Canada, giving you more choice than ever before.  Such an important process requires the guidance of dedicated professionals who are well versed in terms and conditions, the law, and your ever-changing local market. A top mortgage brokerage will be able to provide credentials, as well as references from both clients and vendors. They should have a wide range of experiences and offer a full slate of services.  In the real estate market, the clock is ticking, so it’s important to ensure that your chosen brokerage can provide you with everything you need in a timely, efficient manner.  Seek a Trustworthy and Straightforward Mortgage Broker If something seems too good to be true, it probably is. Your mortgage broker is supposed to be working for you, guiding you through one of the most important decisions of your life. Hard sells or used-car-salesperson vibes are red flags.  A good broker is an open book who is upfront with you about your qualifications and always eager to answer your questions. Furthermore, they won’t try to push you out of your financial comfort zone or gloss over details simply because it suits their interest.  Simply put, your mortgage broker should feel like a teammate. A free, honest, low-pressure consultation is a great place to start.  Mortgage Brokers Should be Communicative and Responsive A mortgage requires some personalized attention; after all, you’re buying a home, not a hot dog. Communications are the name of the game and a good broker understands this. Phone calls and emails should be replied to in a reasonable time frame and meetings should begin punctually.  In order to earn your business a broker should be willing to meet in person, on the phone, or via video chat. Time is of the essence; the last thing you want (or need!) is a broker that leaves you hanging.  Pinsky Mortgages understands the complex, personal nature of the home buying process. That’s why we offer free consultation and fast, personal service. (We really don’t want to see somebody else move into your dream house!)  We provide our clients with choices based upon rates, options, and flexibility, while working to demystify the process from initial consultation to move-in day. Do you want a mortgage broker that works for you? Request a Free Consultation ### 10 Ways to Winterize Your Home and Protect Your Investment Your home is your castle, and should be treated as such! For most of us, it’s the largest investment we’ll ever make and, in Canada, winterizing it is part of the drill. Follow these ten steps to protect your nest, save money, live comfortably, and sleep peaceably.  Disconnect and Drain Hoses In order to prevent the possibility of water damage, hoses should be disconnected and drained for the winter. Water expands when it freezes, which can lead to busted hoses or spigots. If possible, pipes leading to outdoor faucets should themselves be drained as well. In extreme situations frozen water can lead to bursting pipes, causing extensive water damage.  Winterize Windows and Doors Ensure that cold winter air stays outside where it belongs. Closely inspect window and door frames for drafty gaps which can freeze your holiday relaxation and overheat your new year’s budget. Insulation foam or weather stripping will suffice for small openings, while caulking may be needed to seal wider spaces.  …And Replace Aging or Insufficient Windows In some cases, plugging the gaps may not suffice. If your window is drafty beyond repair, consider a replacement. It won’t be cheap, but long-term energy savings will  help. As a bonus, such upgrades will add to the value of your home.  Inspect Your Roof for Leaks and Loose Shingles You’ve worked hard to put a roof over your head, let’s make sure it stands the test of time. Periodic roof re-dos are inevitable, but in the meantime it pays to perform regular inspections, applying roof glue to any loose shingles. By doing this, you’ll prevent water from leaking into your home, which can potentially freeze, causing painful damage to various nooks and crannies.  Unless your name is Saint Nick, it should go without saying that you’ll want to perform your rooftop visits before Old Man Winter comes around. If heading skyward isn’t your idea of a good time, call a professional.  Get Your Mind Into the Gutter (and Downspout) Water and ice are bad and should be kept away from your home sweet home. Gutters and downspouts ensure this, but only when kept in working order. Armed with a solid set of gloves (and perhaps a spatula) ensure that autumn’s debris is not blocking your gutter. It’s a messy job but somebody’s gotta do it. Installing a gutter guard can be helpful!  Branches that overhang your roof’s edge should be trimmed back, as snow can cause them to break and crash down upon your gutter.  Finally, ensure that your downspout points away from the foundation of your home. Pooling water can seep into your home’s foundation and freeze, causing long-term damage that will surely be noted by the home inspector should you try and sell your investment. In the shorter term, icy walkways could put you (or grandma) on your butt, with both pride and tailbone the worse for wear.  Replace Your Furnace Filters  Furnaces work hard during the Canadian winter, and dirty filters don’t help. Replacing filters regularly will save energy, improve air quality, and minimize the amount of dust accumulating around your house.  And Possibly Your Furnace The furnace itself should be inspected periodically to ensure that it’s in good working order. A new furnace is a considerable expense, but is bound to be more energy efficient than your older model, which helps take the sting out of the price tag. What’s more, your new furnace will reduce the chance of an unexpected shutdown, which, according to Murphy’s Law, will occur in the middle of a cold snap. It should also go without saying that a carbon monoxide detector on every floor is modest, and potentially life-saving, investment.  Winterize Your AC Unit Air conditioners, like sandals, swimsuits, and pitching wedges, are must have items that serve almost no purpose during half of the Canadian year. If your AC is accidentally activated during low temps it could cause damage to the compressor. Some units also have heaters to keep oil warm, a waste during a season of non-use. To avoid this, rotate the disconnect block to the off position. Alternately, if your unit has a dedicated breaker, simply flip it off. When reconnecting the power source in the spring, give the oil a day to heat up before use.  And Your BBQ Some Canadians are fierce, grilling during wind, rain, sleet, and snow. Others hang up the tongs when winter comes around. If you fall into the latter category, coat your burners and other metal parts with cooking oil. This will help to prevent rust during inactivity. Spiders and insects may be tempted to spend the winter months within your burner unit. Close off this vacation spot by wrapping it in a plastic bag.  Insulate Your Attic Don’t let heat escape through your attic! Not only does it waste energy, but can cause a melt and refreeze cycle on your roof, contributing to ice buildup. If your attic insulation level is less than four inches, rent an insulation blowing machine and top up!  Check your vents while you’re up there. If they’re clogged, give them a blast of compressed air. A  home is an investment which should be protected, and a living space which should be optimized for comfort. By fortifying your space, you’ll reduce the ill effects of Canada’s infamous cold months. You’ll be thanking yourself all winter long.  ### Cryptocurrencies, Blockchain and Canadian Mortgages In the summer of 2021, Spain passed a bill that allows borrowers to pay their mortgages using digital assets (ie. cryptocurrencies). The proposed legislation, aimed at deepening the acceptance, use, and regulation of digital currencies, would also allow the real estate industry to invest in mortgage pools using crypto and encourage banks to use blockchain technology to keep track of mortgages and insurance. Wow - that was a mouthful... So where is Canada with regards to Crypto and Blockchain? In this article, we will explore a few haphazard topics in a fun way... What is the Blockchain Blockchain is a new type of secure database system that maintains and records data in a way that allows multiple stakeholders to confidently and securely share access to the same data and information.  Transactions, or data, are stored in a “ledger” (registry, record, or log) that is distributed among interested parties that are participating within an established network of computers. A record of consensus is provided, using a cryptographic (secure communication) trail, which is maintained and validated by several individual users, called nodes, that independently check the data blocks.  Only stakeholders that need to see the data will have access. And if anyone tries to tamper with, duplicate, or alter any part of the record, all stakeholders will know. Decentralized Finance (DeFi) Decentralized finance, or DeFi, is a system by which financial products become available on a public decentralized blockchain network. That makes them open to anyone to use, rather than going through middlemen like banks or brokerages.  DeFi refers to a system by which software written on blockchains makes it possible for buyers, sellers, lenders, and borrowers to interact together or with a strictly software-based middleman rather than a company or institution facilitating a transaction. Woah, ANOTHER mouthful! Basically, DeFi allows for two or more parties to proceed through a transaction without needing someone to police the transaction to make sure everyone abides by their responsibilities.  Multiple technologies and protocols are used to achieve the goal of decentralization.  For example, a decentralized system can consist of a mix of open-source technologies, blockchain, and proprietary software. Smart contracts that automate agreement terms between buyers and sellers or lenders and borrowers make these financial products possible. Regardless of the technology or platform used, DeFi systems are designed to remove intermediaries between transacting parties. What is a Cryptocurrency? A cryptocurrency is a digital (virtual) currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology (do you like how I'm wrapping everything together?). A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. It's believed that cryptocurrencies, blockchain, and related technology will disrupt almost all industries, most notably finance and law. As an aside: Cryptocurrencies face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them. However, they also have been praised for their portability, divisibility, inflation resistance, and transparency. Bitcoin was created in 2009 and is the earliest cryptocurrency to meet widespread popularity and success. It is, by far, the largest cryptocurrency by way of market capitalization (total value). “The Bitcoin system is a collection of computers (also referred to as "nodes" or "miners") that all run Bitcoin's code and store its blockchain. Figuratively speaking, a blockchain can be thought of as a collection of blocks. In each block is a collection of transactions. Because all of the computers running the blockchain have the same list of blocks and transactions and can transparently see these new blocks as they're filled with new Bitcoin transactions, no one can cheat the system.“Anyone—whether they run a Bitcoin "node" or not—can see these transactions occurring in real time. To achieve a nefarious act, a bad actor would need to operate 51% of the computing power that makes up Bitcoin. Bitcoin has around 13,768 full nodes, as of mid-November 2021, and this number is growing, making such an attack quite unlikely.”1Investopedia Canada, Blockchain, and Mortgages Interestingly, Canada Mortgage and Housing Corporation (CMHC) has created a Blockchain Whitepaper (in-depth report or informational document).  CMHC sees three avenues for blockchain in mortgages:  1. Origination (the act of getting a single mortgage) 2. Securitization (funding big blocks of mortgages, or mortgage backed securities) 3. Servicing (dealing with borrowers and their mortgage payments). CMHC thinks that the best way to use blockchain is through mortgage backed securities (MBS). The reasoning for this is: a) CMHC is the owner of the national housing association (NHA) mortgage backed security (MBS) program, which will allow them to impose specific methods and rules.   Basically, CMHC can just *tell* everyone that *this is how we're doing it now*. b) The Blockchain will allow CMHC and investors to bypass intermediaries, making it cheaper for CMHC and the investor. This is exactly what the blockchain was created for..: fewer hands in each transaction. c) the Blockchain will allow for much more efficient processes and transfers of information from CMHC to lenders and to investors. d) all information will be immediately reconcilable, validated and there will be an audit trail, tracked by multiple parties.  There is a proof of concept developed to prove the value of the blockchain for mortgage securitization. So far, 2 financial institutions have helped CMHC in their research. CMHC's goal is to get 8-12 banks on board to create a "beta" or test environment.  There is no word on blockchain being used down the line for borrowers… i.e., everything that CMHC intends to do is way above our pay grades and it will not affect the everyday broker, banker, or borrower. The Current Lay of the Land Cryptocurrencies and Down Payment We cannot currently use any crypto account for a down payment. This is not allowed as all down payment must be in a Canadian institution and, so far, no Canadian institution has cryptocurrency accounts. Quick Down Payment Info: Lenders typically want to see a 90 day transaction history of your down payment. This is not a bank rule, but a government of Canada Anti-money laundering regulatory rule. OK, so what about moving money from your crypto account (also called Wallet) to your Canadian account in order to use those funds for your down payment? Well, most lenders will gloss over and say: “NEXT.” Lenders are just not set up to accept cryptocurrencies … rather, they don’t even want to see online statements from crypto accounts; there’s just no training at the lender side for this type of asset. In some cases, the lender *may* accept the history of your crypto money by way of account transaction statements. The transaction statements are a historic proof of where money has been to satisfy your down payment requirements, but it’s an “exception” from the lender to do this.  Generally, we have gotten exceptions from a few lenders if the transaction statements show a borrower's name, account number, amount of bitcoin or crypto currency, and dated transactions (dates are mandatory). The lender would then want to see this money deposited into a Canadian bank account, and that money to be in your account for at least 30 days prior to purchase of your property.  The problem here is that we (and I mean most Canadians) don't know what a normal account statement looks like when it comes to cryptocurrencies. I've personally seen a few; some look like normal bank statements and some look like excel files. Suffice it to say, the crypto statements that look like a normal bank statement will have a better chance of getting "approved" by a lender than something that looks very different. Again, there's just no training at the banks when it comes to cryptocurrencies. Paying your mortgage off with Crypto Currencies This is not going to happen for a while… a long long while. The reason why it won't happen is because banks and other institutions lend to borrowers in Canadian dollars because the money they have on hand is in… Canadian dollars. They don't want to be paid back in a cryptocurrency because they would then have to transfer the crypto back to Canadian dollars in order to give to investors. Think of it like you trying to pay your Canadian mortgage in Turkish Lira... ya, not gonna happen. Further, exchanging crypto for dollars in order to make a mortgage payment provides at least three problems:  1. Crypto is a volatile asset; the bitcoin someone exchanged for $1,000 CAD may only be worth $900 tomorrow (or $1,100). This means that planning for payments is out the window because each $1,000 may be a different amount of bitcoin on a daily basis. 2. Crypto currencies have high transaction fees. Fees to transfer bitcoin from one person to another can be costly and it would not make sense to cash out crypto on monthly transactions. 3. TAXES: yup, cryptocurrencies are considered a real asset, meaning that if they increase in value and you sell, you have to pay capital gains.  Further, there are just not enough people who have cryptocurrencies for it to become a mainstay in the banking industry. There’s very little demand to use cryptocurrencies as a mode of payment at the moment; the majority of people who hold crypto are holding for the long term and for the asset’s appreciation, rather than as a day-to-day transaction vehicle. For Bitcoin mortgage payments to become mainstream, lenders would have to set up the appropriate technology to easily receive crypto payments from consumers. As an aside, the more-innovative United States hasn’t even accepted crypto as payments. United Wholesale Mortgage, the US’ 2nd largest mortgage lender, announced and then quickly shut down accepting crypto payments in August. We’re just not there yet… Cryptocurrency as a form of Security A crypto-backed loan is a type of loan that allows you to access the value of the cryptocurrency without having to sell it. Traditional secured loans backed by collateral, also known as mortgages when it comes to housing, require borrowers to provide an asset of value (a house) to back up a loan in order to obtain funds. With a crypto-backed loan, you don’t have to sell your cryptocurrency to get the money you need. And, rather than using your home or business as collateral, you can collateralize your crypto assets instead. Benefits of a Crypto-Backed Loan The biggest advantage of a crypto-backed loan is that there is no need to sell your cryptocurrency to receive funds. Rather than using your home, car, or business assets, you would collateralize your crypto assets instead. This is important because you won’t lose out should your crypto assets increase in value over time. Rather than cashing them out, you can still hang on to them and benefit from their appreciation over time.  Negatives of Crypto-Backed Loans Paying for things - including mortgages - with cryptocurrency is a bad idea full of unnecessary risks. For starters, the price you pay for something today may not be the price you pay for it in the future. If you have a 5% interest bitcoin loan when bitcoin is at $1,000 per coin, and bitcoin increases in value by 20% to $1,200, is your 5% on the original $1,000, or is it on $1,200? Are you paying interest of $50, or are you paying interest of $60? The only way this *might* work that I see, for now, is that everything would have to be pegged at the dollar. So, if you have a bitcoin loan for $1,000, it would be $1,000 of dollars, and not $1,000 worth of bitcoin. Basically, every transaction would have to be boiled down to its root fiat (government issued) currency. That said, it is possible to have a cryptocurrency-backed loan. Ledn is a new Canadian lender that will use crypto as security. So, you can see that there are a lot of irons in the fire when it comes to blockchain and crypto currency. Canadian banks are simply not prepared to handle the hot potatoes just yet. Cited Sources Frankenfield, Jake, “Bitcoin Definition.” Investopedia, November 30, 2021.  Accessed December 19, 2021.  https://www.investopedia.com/terms/b/bitcoin.asp. ### Eitan Answers: Interest Rate Changes, and What Exactly Is Inflation? Eitan Pinsky and Adam Clarke talk about what to expect from Canadian interest rates and mortgage rates resulting from that. PLUS, get a primer on what exactly it means that inflation is rising. To hear his advice, watch the video below. https://www.youtube.com/watch?v=AIcnXX3lNIA&t=9s ### Important Tips For Debt-Free Holiday You don't have to go into debt during the holidays! With a little bit of pre-planning and determination, you can enjoy your holidays and stay out of debt. Here are some tips and tricks for staying out of debt when planning for the holidays and some tips for cleaning up your credit before you go back to school. Every little step helps!  How To Avoid Debt On Holidays Ah, the holidays are upon us and it's so tempting to run right out and buy everyone gifts! Hold on a minute, you don't have that kind of money! Let's slow down for a few minutes and figure out our best options.  Manage Expectations It's important to manage your expectations about your upcoming trip. Everyone loves presents and spending of course, but you don't have to buy expensive gifts to show you care.  You need to be realistic about how much a trip will cost vs how much income and savings you have coming in. Going into debt is never a good option, and while an expensive dream trip is always desirable, it’s important that you manage your expectations about what you can afford to do.   Determine Goals What are your goals this holiday season? Setting goals helps to manage your budget. Make a list of everything you hope to accomplish and achieve before your trip, during your trip, and after your trip. Figure out how much it will cost. This will better help you plan for the future and save the money you need.  Create Budget Set a budget for your holiday and stick to it. Don't go overboard. How much money do you have leftover after your living essentials? Keep to your budget and after the holidays you'll love yourself even more for sticking with it. When everyone else is scrambling to meet their credit card bills, you'll be the one smiling.  Accept Help Consider going in with other friends or family on a larger gift. Everyone will save money because you've just divided the price of a gift by however many friends or family members are in on the gift. It's a great way to save money and still give a great gift. If you’re able to get financial help from friends or family to fund an upcoming trip, talk to them about pitching in. Every bit helps.   Give A “Priceless” Gift If you’re on a budget, consider a DIY gift this season or for special occasions. You don’t have to be a professional to make a great homemade gift to keep down expenses.  The internet is FULL of amazing, budget-friendly gift ideas. Try some cooking or baking. Or make a photo collage. Get a picture framed. It doesn’t matter as long as it’s from the heart. They’ll love it, and so will your wallet.   Find The Right Price For Your Holiday Before pulling the trigger on the first and shiniest trip package you see, do a bit of workshopping around.  You’ll be amazed at the deals you can find if you do a little digging. Call up various travel agents and see who can get you the best price.  If you can book your trip in the off-season, you’ll save a boatload of money and have just as much fun. Find A Better Interest Rate For Your Home Mortgage  Saving on everyday spending items is a great way to avoid holiday debt, it’s not the only way to save money. If you own a home, shop around for lower interest rates and see if you can pay off your mortgage faster.  Even marginally lower rates can save thousands of dollars throughout your loan.  Before you switch, however, make sure you’re aware of any exit fees for switching and how it compares to what you’re saving.  If you need advice, a professional mortgage broker can let you know if switching makes sense for you.   These are just some of the many ways you can save money for your holiday. You can holiday debt-free, so try some of these tips and have fun without the burden of debt. ### Do Credit Inquiries Affect Your Credit Score? https://www.youtube.com/watch?v=E4KIpsGmC4Q You probably know roughly what a credit score is, and that a higher number means good credit and a lower number means bad credit. You probably also know that having a bad credit score can negatively affect your ability to secure a loan.   Many people, however, do not actually know their credit score number. Partly, this is because of a common belief that checking your credit score lowers it. Whether you have good credit and don’t want to tarnish it with a credit check or have bad credit and don’t want it to lower anymore, many people never check their credit score.  But is it true that checking your credit score lowers it? The answer is yes and no. There are various ways to check your credit score, some of which do affect your score and some which do not.  In this article, we’ll delve a bit deeper into credit scores and credit checks to demystify the process.  What Is A Credit Score? Let’s touch on the basics first. Your credit score is a 3 digit number that lets potential lenders determine the risk of lending money that may not payed back.   Your credit score is created by Canada’s two national credit bureaus, Equifax & TransUnion. They determine your score based on the info they receive from lenders. Without a credit score number, it’s very difficult to secure a loan in Canada.   What Is A Credit Report The credit report is a more detailed breakdown and review of your financial history compared to the credit score which is just a simple number.  Inside the credit report are things such as your contact details, payment history with creditors, a list of any bankruptcies, or other factors that may affect the credit score.  Canadians are entitled to one free credit report per year, which is also called a consumer disclosure. You can request these reports from TransUnion or Equifax online or via mail.  What Influences Your Credit Score? Many factors go into determining your credit score. Here’s a brief overview of the primary considerations.  Payment history - 35% - Shows all debts aside from mortgages.Credit utilization - 30% -  the amount of credit you’ve used vs the amount you have available. Length of credit history - 15% - How long you’ve had a credit history and how consistently you’ve used credit.Diversity of credit - 10% - how many different types of credit you have. The more the better.Credit checks - 10% - how often you check your hard and soft credit scores Impacts Of Credit Checks On Your Credit Score Ok, so from the credit influences shown above, credit checks DO play a part in determining your credit score. But, what the heck is hard and soft credit scores? Do they both affect your score? What’s the difference?   Soft Credit Check A soft credit check occurs when you or anyone looking at lending you money checks your credit history. Contrary to popular belief, this does not affect your credit score. Some examples of soft credit inquiries include: Background check from an employerApplying for insuranceGetting pre-qualified for a credit cardChecking your credit score online When you download or receive your annual credit report, this is considered a soft inquiry and does not affect your credit score.  Hard Credit Check A hard credit check occurs whenever you apply for a new loan or credit card. This type of check, however, can affect your credit score. Lenders like to see how financially responsible you are, and too many of these inquiries in a short amount of time can indicate financial difficulties. That’s why it’s a good idea to apply for credit sparingly and apply with institutions that are likely to approve you.  Some common examples of hard credit inquiries include: Credit  cardsMortgage applicationsPersonal loansStudent loansCar loans One thing to note. Applying for multiple types of certain loans such as car loans, will not affect your score. This is considered “bunching” and multiple applications will only count as one. So go ahead and shop around the best dealership rates without fear.   But, if you check your credit at many different TYPES of places in a short timeframe, this will affect your credit quite a bit. If you have questions relating to credit scores or need advice on any aspect of your mortgage, contact the experts at Pinsky Mortgages. We’ll help you figure out what lenders are looking for, and give you practical advice on improving your credit scores.Pinsky Mortgages in Vancouver, BC is a full-service mortgage broker and brokerage, specializing in getting you the best rate and most suitable financing for your needs while making sure you understand the process as well as your actual mortgage. ### 10 Tips For Paying Off Your Mortgage Faster Your mortgage is likely the largest loan you’ll ever take out. No matter how long you take to pay it off, it’s a large monthly expense with a lot of money paid in interest. Even with today’s lower interest rates, the extra money you pay over a 20 or 30-year loan is substantial.   How good would it be to pay this loan off more quickly and pay thousands of dollars less in interest? This may sound like a difficult thing to do, but rest assured, there are some easy ways you can pay off your debt faster, saving more money for the things that make you happy.   10 Ways To Pay Off Your Mortgage More Quickly  Make Extra Mortgage Payments Making more frequents payments will help pay your debt off sooner, that’s mortgage basics 101. But the ways to do this and the impacts it has on the overall interest paid may not be as obvious. One of the best strategies is to switch from monthly repayments to fortnightly repayments.  Think about it this way. There are only 12 months in a year, but 26 fortnights.  More payments mean paying your mortgage off faster and paying less interest.   Seemingly small differences in payment amounts and frequencies often won’t make a difference in your daily life, but can significantly impact the amount of interest you pay throughout your term. Pay Your Mortgage Off Faster The bulk of the mortgage money you pay comes in the form of interest accrued over the term of your loan. The difference between paying your mortgage over 30 years vs 20 years vs 10 years can differ by hundreds of thousands of dollars. While you need to consult a mortgage specialist and closely assess your financial situation, if you can afford to pay it off earlier, you’ll save a ton of money.  As an example: A $500,000 loan at 3% interest paid over 30 years will have a monthly cost of $2,118 and a total cost of $762,487. A $500,000 loan at 3% interest paid over 20 years will have a monthly cost of $2,783 and a total cost of $667,917 What’s the total cost difference over the mortgage life? $94,570! By opting for a 20-year loan instead of a 30-year loan, you’ve saved nearly 100k over 10 years. That’s quite a lot of money, isn’t it?! You can check for yourself how different term lengths affect monthly and total repayments with a handy mortgage calculator.  Make Higher Repayments Another strategy is to make regular mortgage repayments as if you had a higher interest rate than you do. If you switch to a lower interest rate, keep your repayment amounts the same if you’re able to. You’ll pay off your loan quicker and save a lot on interest.  Find A Lower Interest Rate  A mortgage is a very easy thing to just set and forget. Many people have their re-payments set automatically and keep them out of mind. But taking a bit of time to shop around for lower rates, even marginally lower rates, can save you thousands of dollars throughout your loan.   Before you switch, it’s important to check if there are exit fees for switching lenders, what those are, and how it compares to the projected savings you’ll see from making the switch.  In this case, a little of your time now can save you big in the long run.  Consolidate Your Debt If you have multiple debts from car loans, credit card debt, school debt, many banks will let you consolidate your debt and refinance it into your home loan. Consolidating means you can reduce your higher interest rate loans by putting them under the umbrella of your home mortgage, and the much lower mortgage interest rate.   Save On The Small Things It can sometimes be hard to appreciate or understand just how much money we spend on things we buy regularly.  Most people are surprised to hear that their $5 daily coffees alone can cost over $1300 for the year.   After you get your mortgage, every dollar counts. And any money you can save by cutting out some of the more frivolous and luxury items can go towards paying off our mortgage faster. Often substantial money can be saved without giving up much convenience. Getting yourself a coffee machine and making one to go every day before work? Not that hard. Preparing meals in advance on the weekend so you don’t need to buy a $10-$15 lunch every day? Not that hard. All of these things together can add up to big bucks.   You should also speak to your lender about the financial package deals they have available. Often you can receive free consultations, fee-free transaction accounts, and credit cards, and discounted insurances.  Every bit counts, and it’s worth asking for anything that might help save a few dollars.   Get An Off-Set Account An offset account is an account linked to your mortgage whereby any money in that account offsets the money you owe. It’s a great way to offset the interest you pay on your loan. For example - If you have a $600,000 loan and $50,000 in your offset account, you’ll only be paying interest on $550,000 instead of the full $600,000.  This gives you the flexibility to have some money and savings available to you while bringing down the amount of your loan that’s generating interest. Get A Portable Loan You’re more likely than not to move before fully paying off your first mortgage. So if there is any chance that you’ll move during your loan, you’ll want to ensure that your mortgage options allow you to port your loan to a new property or that there aren’t extraordinarily high fees for doing so.  It’s best to ask a lot of questions as porting your mortgage can result in thousands of dollars in fees with discharging your old mortgage and establishing your new mortgage. Shop Around & Look At The Smaller Lenders These days, great mortgage rates and terms aren’t only found at the big banks. Mortgage brokers have enabled smaller lenders to pop up and force down the interest rates previously offered by only a few select banks.   RELATED - What Is A Mortgage Broker & Why Do You Need One? Don’t worry too much if some lenders you come across aren’t household names. If they get into financial trouble, just remember, you have their money, not the other way around. These lenders (and your mortgage) are protected against bankruptcies and other business failings, so if they can offer you a better rate or better terms, it’s a good idea to hear them out.   A smaller lender will often give you much better customer service and a better overall mortgage experience. They can often provide offers that the big banks won’t, such as longer terms, 100% offset, needing less of a deposit, and lower ongoing fees.  This isn’t always the case, but there are more options out there than ever before and it’s worth your time to shop around for the best option for you.   Final Thoughts There you have it. 10 tips for saving more money by paying your mortgage loan off faster.   Do you need help navigating the world of home mortgages? Have more questions that weren’t answered in the article? Contact the mortgage experts at Pinsky Mortgage. A good mortgage broker will save you time and money, helping you find the best mortgage product that will fit your unique needs and preferences. ### Debt Culture: Canada’s Growing Debt & Credit Problem Canada's growing debt problem is at an all time high. The net debt of the federal and all of the provincial governments combined is forecasted to be $2.0 trillion in the fiscal year 2020/21, nearly doubled from a little more than a decade ago.  But what does high national debt mean for the average household?   How Does The National Debt Affect You? Consider this: The national debt affects businesses and citizens at multiple levels. More debt means more payment in interest for the money borrowed. When the government borrows money, they have to pay interest on their loan, just like how you pay interest on the money you borrow like the mortgage on your home, your car loan, or when you use your credit card.  Therefore, when the government has to pay more money on their loan interest, that means they have less money to spend on programs for taxpayers like tax cuts, healthcare programs, social services and education.  This can have profound effects on you as a Canadian citizen because that can mean taking more money from your pockets to pay for the services you need. How else does this affect the Canadian taxpayer? When the government debt increases, long-term interest rates for the country can go up for everyone. That means it costs you more when you borrow money.  If you are planning to buy a home, the rise in interest rates can greatly affect how much you are going to pay in your mortgage payment. What Can You Do To Reduce Your Cost There is not much you can do about the national debt, but there is something you can do to reduce its impact on you.  If you plan to buy a house, you should look for a home loan that gives you the best loan terms in respect to interest rates and points. There are a couple of ways to do this.  You can call different banks and financial institutions and ask for information on the loan packages they have. However, researching for those institutions and contacting them individually takes a lot of your time - time that you probably don’t have.  The other solution and smarter approach, is to contact a reputable mortgage broker to help you find the best mortgage rates. What A Mortgage Broker Can Do For You The mortgage broker basically does all of the research for you. They have an extensive network of lenders whom they can contact to find out which one has loan terms that fit your needs the best.  All you have to do is to fill out one application with the broker and provide basic information and documentation. When your application is complete, they turn to their network of lending institutions, determines which lender offers the best terms, and submits your application on your behalf for loan approval.  The broker keeps track of the loan process. You just have to wait.  Not only does this approach save you time, but you can potentially get a loan with terms that you would not even know existed if you were to do the research yourself. A local mortgage broker has information on many lenders that you might not know about. So, even though you can’t solve Canada's growing debt problem, you can reduce its impact on you by working with an experienced mortgage broker. ### The Brexit Effect on Canadian Mortgage Rates Brexit and Canadian mortgages – what’s the link, you may ask? How could events on one side of the Atlantic Ocean affect the other?  It turns out that the making or breaking of financial treaties and global trade agreements can have a direct effect on the individual, regardless of location. Back in 2016, when a majority in the UK voted to leave the European Union, financial experts in Canada predicted that the move would affect the local property market (including mortgages).  Here are some of the ways in which this impact could be experienced by Canadians seeking to buy a house. Anticipated Brexit Impact on Canadian Mortgage Rates British nationals are suddenly finding themselves facing the consequences of exiting the EU. There is some expectation for property taxes to go up in the EU when it comes to British owners. Travel hindrances could also result from the dissolution of treaties and agreements. What do these things have to do with Canadian mortgage rates? The answer is “very little” in the short term. The Brexit happened officially on February 1, 2020. There was a transition period until the end of the year but nothing much changed over the course of the 11 months.  The rules governing the new relationship between the EU and the UK became effective on January 1, 2021. Hence, the ripple effect that will potentially impact the rest of the world is yet to take place. In Canada, there hasn’t been a significant change in mortgage rates over the past year. March 2021 marked a slight increase in mortgages, the first one since the start of the Covid-19 pandemic. The overall increase, however, has been fairly small. Some banks even decided to keep mortgage conditions unchanged for their clients. Over the long term, Brexit heightens some global financial risks. There’s a probability of financial and stock market volatility. If this happens, downward pressure would be exerted on bond yields. As a result, mortgage rates could also go down. Don’t forget, however, that the aftermath of Brexit is only one of the factors that could impact international finances. Other developments could negate or enhance the effect of Brexit and all of them should be examined together to paint a comprehensive picture. Brexit and the Homeowner/Property Hunter: Will Something Change Over the course of 2020, a record number of property transactions occurred due to favorable conditions. As the Canadian economy is expected to pick up in 2021, chances are that these conditions will start to change. Brexit will probably have a very minimal effect on the Canadian property market (if any at all). Thus, if you’re considering a property acquisition right now, the time is right to make a move. Market volatility is a normal phenomenon that occurs after every big economic or political transition. Its effect is global, regardless of the fact that some parts of the world are much more impacted than others. There’s one important thing, however, that separates Brexit from other major shakeups. The financial crisis of 2008 occurred suddenly and the world was unprepared. Most of the Brexit details were known in advance. This is why financial experts can make fairly accurate predictions, allowing end buyers to make good and rational decisions. Your upcoming property purchase is probably unthreatened by Brexit right now. Do keep track of Covid-19 developments alongside international financial and political developments. All of these could eventually put some pressure on the market, taking it in a specific direction over the coming months. Getting the right information in this day and age is hard. While articles can provide you with general information and advice, the best person to speak to is your professional mortgage broker. They have the experience and industry knowledge to give you up-to-date information on what’s going on locally and globally and offer sound, practice advice on current and future mortgage issues. ### Everything You Need to Know About Canadian Mortgage Rates in 2021 For the first time in over one year, Canadian mortgage rates are rising. While some home seekers may see the development as bad news, it’s still possible to find good property purchase funding options. A little bit of research and preparedness will go a long way. So, what exactly will the Canadian mortgage rates in 2021 look like? Several determining factors will need to be examined in order to answer that question. Canadian Mortgage Rates in 2021: What’s the Outlook? Over the course of 2020, Canadians enjoyed some of the most affordable mortgage rates in a long time. The Covid-19 pandemic and the measures introduced to curb the spread of the virus had a pronounced impact on the market. As a result of these developments and the relatively affordable home prices, the record-breaking 551,000 residential real estate transactions got to completion over the course of the year. Will the situation remain similar in 2021? As of March 2021, five-year fixed mortgage rates are starting to go up. This is the most affordable mortgage variety and the one that most Canadians would favor for obvious reasons. Recently, the mortgage rate went up 25 basis points to reach a new level of 1.64 percent, Ratehub.ca reported. This is the first mortgage rate increase registered since January 2020. In March of last year, Bank of Canada brought down its benchmark interest rate to the unbelievable 0.25 percent in an attempt to stimulate the local economy. Now, some banks are beginning to increase rates on their products. A few exceptions still exist.  In mid-March, the Royal Bank of Canada announced that it hadn’t gone through recent mortgage rate increases. TD Bank and National Bank of Canada, on the other hand, did increase interest on some of the common and popular types of mortgage products. Some financial experts have commented that the rise is coming a little bit sooner than anticipated. Forecasts suggest that the launch of Covid-19 vaccination campaigns will help the economy recover, at least partially. As a result, the real estate market will probably see some dynamic developments later on in the year. These events will probably impact interest rates further. So, What Do These Numbers Tell You? As of now, several other types of mortgages have seen a change in interest rates apart from the five-year fixed plans. The one-year mortgage has seen an average increase from 1.64 percent in 2020 to 1.84 percent in March 2021. That’s a hike of 0.2 percent on an annual basis. The seven-year interest rate changed from 2.44 to 2.64 percent and the 10-year plan now comes with an interest of 2.95 percent instead of 2.84 percent. Needless to say, major variations exist from one bank to another.  It’s still essential to compare mortgage plans side by side. The increase in interest rates so far in 2021 isn’t a major game-changer. As already mentioned, some banks have decided to keep offering their clients favorable conditions. Depending on your current financial standing and the amount of financing you’re seeking, chances are that you’ll still get to score an affordable loan. We live in dynamic times and it’s not exactly clear how soon Canada’s economy and real estate sector will recover. Hence, conditions right now still favor the buyer and provide access to good financing options. If you are clueless about mortgage comparisons and funding your real estate purchase, do consider the assistance of a professional mortgage broker. This expert’s job is to give you options and pinpoint the products that address your needs in the best possible way.  A little bit of expert guidance can help you save money in the long run, regardless of how the economy moves forward. ### What Is A Mortgage Broker And Why Do You Need One? If you're planning to buy a home in Canada, one of your main concerns is likely what kind of financing you can get this year.  A big factor that affects how much you pay in mortgage payments is the interest rate on the loan. There might be a difference of a fraction of a percent in interest rates among different lenders. However, because you're borrowing a lot of money over a very long period of time, even small differences in interest rates can impact the total amount of interest you pay over the life of your loan.  It pays to shop around and find a lender who will give you the best loan terms and interest rates. It's extremely time-consuming for you if you have to contact each lender yourself. A smarter approach is to let a licensed mortgage broker do the work for you. What Is A Mortgage Broker? A mortgage broker is a licensed individual who acts as a liaison between you and the lender.  The broker works with a wide network of lending institutions and is an expert in all types of mortgage products. They can help you get pre-approved for a mortgage so you'll have better bargaining power when you make an offer on a house.  The broker will evaluate your financial status and determine which type of mortgage product is appropriate for you. They’ll explain the advantages and disadvantages of each type.  The broker will compare terms and determine if your qualifications satisfy the lender's criteria. They will help you complete your loan application and gather from you all of the documentation that needs to be included before he submits your application to the lender for pre-approval.  A mortgage broker also answers any questions you have about the approval process and the terms and conditions of the loan. Once you're pre-approved, you can get a rate hold on the favorable rate for up to four months.  When you actually make a purchase, the broker will be your liaison with the lender as you proceed with a full application for the mortgage, and the lender completes the underwriting process. Why Is It Important To Use A Mortgage Broker Right Now? Mortgage rates have been historically low over the past year. The second half of 2020 brought us five-year fixed mortgages at below 2 percent. Due to the coronavirus pandemic, the Bank of Canada lowered interest rates last year to support economic activity.  Fast forward to 2021, the Canadian economy improved slightly, and rates have crept up about a quarter of a percent. Even with the increase, mortgage rates are still close to historic lows, but low rates will not last forever.  Now that you understand what is a mortgage broker and what he can do for you as a prospective homebuyer, you can get pre-approved for a mortgage and lock in on these favorable rates before you make a purchase.  A good mortgage broker will save you time and money, helping you find the best mortgage product that will fit your unique needs and preferences. ### CHMC Insured & Insurable Mortgage Changes No more rumours… It's official. CMHC is decreasing affordability to first time buyers, anyone who has less than 20% down, and insurable (bulk insurance) mortgages.*please check out my more questions below…**There is no change to down payment rules… If you have clients who are purchasing with less than 20% down and their ratios are tight (or even … just average), this affects them.  This decreases affordability by 10%! Effective July 1, we will have the following changes: Limiting the GDS/TDS ratios to 35/42 from 39/44,Making sure at least 1 borrower has a 680 credit score, andNon-traditional sources of down payment will no longer be treated as equity for insurance purposes. *Either borrowed down is now being banned and/or this will increase insurance costs more for borrowed down clients. Affordability Decreases 10%… Let's take a $500,000 purchase with $50,000 down payment. The mortgage would be $463,950 (after $13,950 in CMHC fees). Right now, we're looking at needing an income of $93,300 to purchase this property at a GDS requirement of 39%. (Property tax at $1,800, condo fees $300, heating at $50.) This income required increases to $103,970 in order to purchase the same property.  So, this is a 10.3% increase in the requirement of income. Alternatively, a $93,300 income would provide for a purchase of $447,000. Or, just 10.6% less. Questions Unanswered: Will Genworth and Canada Guarantee follow suit for insured files?Will CMHC require Genworth and Canada Guarantee to follow suit for insurable files?How long will this be for?What the actual fuck?! ### Inflation & Its Effect on Real Estate Real Estate in an Inflationary Market Inflation means that your dollar can buy less this year than it could last year, i.e. there is more money in circulation in the economy than before; all else being equal, a loaf of bread costs the same one year to another, save for inflationary effects. Tangible assets with a finite supply, such as real estate, gold, and commodities, have all been used to hedge against and profit from inflation. OK, so why does real estate appreciate (increase) with inflation? There are a few reasons: There is a finite amount of real estate. Yes, we can build higher, but land is never increasing. So, when the money supply grows, real estate should appreciate with inflation.A property is an asset and its rent can increase. When there is inflation, money decreases in value and landlords will increase their rents. The increase in rents provide for higher "cap rates" (return on investments) or, most likely, an increase in the value of the real estate. *Even if your property is not a rental, the benefits of rental properties increasing in value will also affect yours and those surrounding them. Fixed mortgage rates… In an inflationary market, the dollar in interest you're being charged is actually worth less this year than it did the last. This can put upward pressure on the value of your home. By far, supply and demand is the most important factor in real estate's values keeping with inflation due to real estate being a finite resource. If supply and demand stays the same, and the money supply increases, the price of goods will increase. Is Inflation Going to Happen? This is a great question (thanks for asking, Eitan). To make things simple, inflation happens when: Wages grow: During economic booms - Demand-side inflationRising input prices: such as oil, timber, etc. - Cost-side inflationCurrency depreciation vs others: rising import costs - Pass-through inflationLow unemployment: Strong economy and wage negotiation - Wage-push inflationRapid expansion of money and credit: Gov't programs - like now - Demand-side inflation Over the past few years, Canada and the USA had pretty stable inflation. Believe it or not, governments want inflation and we've been right on target. You'd assume that since unemployment has been low, we would have large wage push inflation but apparently wage growth did not happen with low unemployment. Now, we have two competing forces. Experts are saying that since we have a rapid expansion of money and credit due to government programs such as the CERB, CEWS, BCAP, CEBA, and more, we should see inflation down the road. The money supply is increasing quite dramatically. However, just because we have stimulus, doesn't mean we're going to have inflation… What's yet to be determined is what will be the long-term impacts of COVID-19 on employment and wages. Should companies be able to reopen and bring back "business as usual" quickly, we will probably see inflation. However, if it takes many more months or even years to get the economy back on track, the monetary stimulus we've been seeing would not have been enough to create inflation, but just a stopgap to prop up and stave off economic collapse. Furthermore, just because the money supply has increased now, doesn't mean we'll see the spending of that money. From the example above with the central bank putting in an additional $10 into the money supply, what would happen if, after a year or two, the government decides to raise taxes in order to recoup some of the money they have put into the economy? It's entirely possible that that $10 given today would be taxed tomorrow. Or, more simply, if the $10 is put into people's savings account instead of being spent? That money would no longer be available in the market and not part of the money supply. More on the "velocity" of money and how it affects inflation here. So, Inflation?! Real Estate?! Even if Canada does not have inflation, we're still down to the supply and demand side issues of Vancouver real estate. There is just far too much demand for the supply in Vancouver. Prices will continue to increase. Period.*There's the obvious factor of COVID-19 negatively impacting the economy and people's ability to purchase in the short term, but based on what I'm seeing, it's not going to decrease values by much. Just a quick fact: Vancouver itself has 115 sq. k.m., whereas Toronto is 630 sq. k.m. Greater Toronto is 7,124 sq. k.m., and Metro Vancouver is 2,700 sq. k.m. (half of which livable and half is mountainous above North Vancouver and Coquitlam)… ### Down Payment Documentation When purchasing a home, Canada's Anti-Money Laundering (AML) policies require us to provide for a(1) 90 day period,(2) where your money came from! The 90-day period is satisfied if you can provide: 3 months of bank/investment account statements, or 90-days of your transaction history. Need help? Let us know and we'll guide you through it. Confirming where your money came from can be easy 😀 or frustrating 😢… Lenders are looking for a clear history of all of the money in your account. Easy: If your down payment has been parked for 90 days in your bank account, and you provide us with your 3 months of account statements, then we’re done. Easy! **please make sure that the account statements have 4 items: name, account number, date, account transactions or balance. Frustrating: If there’s an influx of money into your account, lenders require explanations for all deposits. I.E., there needs to be a clear, trackable history for each dollar deposited. Deposits Into Your Account? Below are deposit examples and the documentation required for each: ____________________________________________________________________ Personal Income from Employment Requirement Items:1: 90-day account history. 2: (Maybe) Pay stubs matching deposits. Information / ExplanationYour employer is usually listed on your account statement. Should the deposits not name your employer, the lender may request for pay stubs to match the pay deposits. ____________________________________________________________________ Gifted Down Payment Requirement Items:1: Confirmation of gift deposited into account. 2: Signed gift letter on the specific lender’s template. *The exact amount gifted and deposited into your bank account must also be noted on the gift letter.**Most lenders want their own gift letter template used. Gift letters may be provided after the pre-approval stage, and once a lender is picked for the mortgage. Information / ExplanationDown payment gifts can only be from parents (and in some cases siblings too). Parental figures are sometimes acceptable but an explanation will need to be provided on the relationship between the giftor and giftee. Friends are not allowed to gift money because lenders assume this gift is “repayable.” Timing of Gift Deposit: Your mother is going to gift you $10K to help you purchase your first home.Question: When does your mother have to deposit the $10K gift?Answer: The gift should be transferred into your account at least 15 business days prior to your home purchase, with the latest being 10 business days prior to funding. Please let us know if your gift is to come from a different country. Overseas money must be in Canada at least 30 days prior to funding.____________________________________________________________________ Transfers Between Two or More Accounts Requirement Items:1: Deposit account history. 2: Withdrawal account history. Information / ExplanationIf money is transferred between two accounts, there must be a confirmation of deposits into one account and withdrawals out of the other. This can double the paperwork involved if dates overlap. Following the Money: Assume you had $50K in Account Z 90 days ago. You transfer that money from Account Z to Account Y exactly 45 days ago.Question: How is the 90-day history confirmed?Answer: We would need to show Account Z from 90 days to 45 days ago, and Account Y from 45 days ago until now. There must be at least one overlapping day where the money transfer shows on both accounts. ____________________________________________________________________ Transfers: Investments to Your Bank Account Requirement Items:1: Deposit account history. 2: Investment account history. 3: (Maybe) Investment account balance. Information / ExplanationThis is the same as transferring between two accounts but many investment accounts make it difficult to obtain their history. Generally, the history can be found through a 90-day “Transaction History” request online. Sometimes the investment’s transaction history only shows money coming in and out of the account. Another screenshot of the current balance may be required to confirm the account amount. ____________________________________________________________________ Government Tax Returns / Programs Requirement Items:1: Deposit account history. 2: (Maybe) NOA showing rebate amount. Information / ExplanationThe government is usually identified on your account statements. For larger deposits such as tax rebates, lenders generally request to match your deposit to your Notice of Assessment (NOA) rebate amount. ____________________________________________________________________ Proceeds from the Sale of a Home Requirement Items:1: deposit account history. 2: Statement of adjustment from a solicitor. Information / ExplanationIf you’ve sold a home and are using the proceeds of the sale as part of your down payment, the statement of adjustments showing the net amount deposited to you will be required. If the sale of your home is happening after the new purchase, bridge financing and other documentation may be required.  ____________________________________________________________________ Borrowed Funds: Lines of Credit, Loans, or Credit Cards Requirement Items:1: Statement confirming funds available. 2: (Maybe) Deposit into a bank account. Information / ExplanationBorrowed funds are allowed but deemed repayable. Depending on the source of funds, the monthly repayment is 3% of the amount to be borrowed or the qualifying rate at 25 years of amortization. *Borrowing for your down payment is under the “flex down payment” program and is only supported by some lenders. We hope this has been an easy-to-understand page on Down Payment Documentation. Visit pinskymortgages.ca to book a consultation. ### Finally: Some GOOD (important) News Good News - LAWYER E-Signings Some lenders are allowing conveyancing through video conferencing or remote signing. Wooo!! Not all lenders allow this yet. So far, it's just (that I know of): Scotia, First National, Home Trust, RBC, RMG, MCAP.TD is a hard no so far… Not all lawyers can do this. Tony Spagnuolo, owner of Spagnuolo and Company, which has 18 offices across the lower mainland, is currently handling the remote singing himself. So far, one of my clients is working with him on this and I'm sure more of his lawyers will be shortly. Process: Clients should print their documents, meet with Tony or one of his lawyers on Zoom, sign in front of the screen, and then return the documents to Tony's office (scan and email, or drop off to their Coquitlam office). I'm sure more lawyers will be implementing this practice going forward. ### COVID-19 & Mortgage Deferrals The Real Cost of Mortgage Deferrals These are unprecedented times and my gut reaction is that it's important to feel financially secure; when your income is suffering, having to make mortgage payments does not help overall anxiety levels. If your finances have been negatively affected by COVID-19, I believe you should defer payments. The below information may help you make a choice. If you're impatient, click here to go down to the GREEN section for "Quick and Messy Calculations." But First,What is a Mortgage Payment Deferral? For much more info, we wrote all about it in a previous post. A mortgage deferral is an arrangement between you and your lender that you will suspend your mortgage payments for an agreed-on, temporary length of time.(Lenders have determined that six months is the agreed upon max length of time.) Once a mortgage deferral ends, your mortgage payments go back to normal. The mortgage deferral is a pause on mortgage payments themselves, not a forgiveness of the overall mortgage obligation, which means that interest will continue to accumulate and be added to your debt. In other words, when you defer your mortgage payment, you are not paying principal (paying down your mortgage balance) nor interest (how much you owe on your mortgage balance). This interest is then added to your mortgage balance. How Do I Defer Payments? All you have to do is contact your lender (call, email, or use their website) and ask for a deferral. I recommend checking your lender's website for specific information to provide, and then contacting them online. Call volumes are rather high right now… on the plus side, there's not a lot of processing involved. I've had a couple of clients say it has been pretty painless. Lender contact Info. If you have any trouble calculating your own cost, please don't hesitate to reach out! Mortgage Deferral Cost - Example / Explanation For example. let's take a mortgage of $500,000Start Date April 1, 2018  |  Original Amortization: 25 years  |  5 Yr Fixed at 2.99% Deferral quick math: Let's defer this mortgage for one month on April 1, 2020. Using a mortgage calculator, before deferring, after 2 years, we will be left with $472,204. An easy way to know how much interest you're charged per month is your rate of 2.99% multiplied by $472,204 divided by 12 (this is a rough calculation and does not include compound interest). This equals $1,176 in interest (actual interest using compounding is $4 different - close enough). OK, so we didn't pay $1,176 in interest… this interest is added to our outstanding mortgage balance. Now, to understand how much this one mortgage payment deferral will cost you, we multiply it by 2.99% to get ($1,176 x .0299) $35.04, or $2.93 per month. This is the monthly interest you're charged on the foregone monthly interest you did not pay. That's not the full story though. Since we're NOT paying that $1,176 in interest, it gets added to our mortgage. So, you're effectively being charged twice… once in the month you should have paid it, then again in the next month where you DO pay it. Therefore, your total interest costs are multiplied by 2.  So, 2 x $2.93/month x 36 months = $211. Therefore, deferring one mortgage payment will cost you $211 over the course of the next 3 years. At the end of your term, your mortgage will be higher by one mortgage payment ($2,363) and the extra interest ($210). So, instead of having $472,204 left, we're left with $429,871 (slightly different due to compounding). Quick & Messy Calculation: Monthly Interest = outstanding balance x interest rate (percentage) ÷ 12 monthsMonthly interest on foregone Monthly Interest = Monthly Interest x interest rate ÷ 12Term Extra Interest = monthly interest on foregone interest x 2 x months remaining. For the example above:Monthly Interest = $472,204 x .0299 ÷ 12 = $1,176Monthly interest on interest = $1,176 x .0299 ÷ 12 = $2.93Term Extra Interest = $2.93 x 2 x 36 = $211 * I completely understand that this is over the TERM and not the whole amortization/life of your mortgage. If it were over the whole life of your mortgage, costs could be 10x higher or more… However, from my experience, borrowers change their mortgage often enough that assuming you will pay the same interest rate, same payment, and same amortization is a moot point. I could do the math for you over the term/life of your mortgage. Or, you can use RBC's handy "skip a payment" calculator, but I don't find this info that useful.  Mortgage Term Comparison Looking again at $500,000, 2.99%, 25 years amortization mortgage. The below is what your normal 5 year term would look like… Term Total Payments:Principal Paid:Interest Paid:Term End Balance: $141,820$72,709$69,111$427,291 And below is what your 5 year term would look like if you deferred 1 month of mortgage payments. Term Total Payments:Principal Paid:Interest Paid:Term End Balance: $139,456 (-$2,364)$71,301 (-$1,408)$68,155 (-$955)$429,871 (2,581) The difference above is $217 (2,364 less payments vs $2,581 more in principal). This is roughly the $211 above. Below a 5 year term if you deferred SIX month of mortgage payments. Term Total Payments:Principal Paid:Interest Paid:Term End Balance: $127,638 (-$14,182)$63,239 (-$8,310)$68,155 (-$5,872)$442,663 (15,372) The difference above is $1,190. IE, at the end of your term, you would have had paid $14,182 less, but be left a $15,372 higher outstanding balance. This amount is close but less than 6 x 211 due to the fact that there are fewer months remaining for the 2nd - 6th months of mortgage payment deferrals. Please let us know how we can help you or someone you care about, or if we can answer any of your questions! More Information I pasted the below from TD's mortgage deferral website. Their info is well laid out. Should I defer my mortgage payments? Individuals considering this option should give it careful thought: think about how it will impact their own situation and recall that the program is designed to alleviate temporary hardship due to the impact of COVID-19. Depending on the current position of your finances, it may be better to continue with your mortgage payments. If you think your unemployment or debt situation could be longer term, you might wish to discuss other options that may be available. What should I consider before deferring my mortgage? In order to determine whether the mortgage deferral program is for right for you, consider the following: Your current spending. Now is a good time to make a distinction between what is discretionary and what isn’t, what you have to pay for and what you can get by without.All of your debts. From your mortgage to your credit card bills, make sure you are prioritizing your debt properly. Cash saved by not paying a mortgage could, for instance, go towards paying down credit cards, even just the minimum.Are other bills being deferred during this period, such as property taxes? You may also be eligible for other COVID-19 government relief programs.Check your cash flow and see what you are expecting to receive in the near future. Our Personal Cash Flow Calculator can help get a better idea of where you spend your money. If you really are in a predicament because of the COVID-19 crisis where the disruption of cash flow is preventing you from making a mortgage payment, a deferral might be your best route. What can I expect at the end of my six-month mortgage deferral term? When things do get “back to normal,” remember that the total amount owing on your mortgage will be higher, due to the interest that has accrued. In that case, you might wonder how you will “catch up.” In the case of TD, your payments will be adjusted automatically at the start of your next term or, if you change anything else before renewal, at that time, to ensure your Vancouver mortgage is paid off at the end of your original amortization period. You can speak with your financial provider to see what other options may be available, including the potential for a lump sum payment or increasing your payments to help you get back on track sooner. We are available now for: Home Purchases & RefinancesAffordability Analysis & Financing QuestionsReadvanceable Mortgages & HELOCsInvestment PropertiesVacation Homes & Second Homes ### MORTGAGES & COVID-19 We're in uncharted waters... I've done my best to include as much information as possible below. (LAST UPDATE April 2) 1. All About Mortgage Payment Deferrals LENDER CONTACT INFORMATIONa) What Does This Mean?b) Will it Hurt my Credit Score? c) Should I Defer Payments?d) How do I Defer Payments?e) Other Ways We Can Help! 2. Purchases, Refinancing, & Transfers a) Are Financial Services Essential Services?b) Can I Meet with My Lawyer/Notary?c) What Does This Mean for Closings? 3. New Government Financial Programs Information on New Federal and Provincial Programs 4. Economic & Financial Side-Effects Provided by DLC's Economist Dr. Sherry Cooper. Please let us know how we can help you or someone you care about, or if we can answer any of your questions! 1. All About Mortgage Payment Deferrals Q: What Does Payment Deferral Mean?A) You don't have to pay your mortgage payment - interest is added to your mortgage. Please note that payment deferrals are on a case-by-case basis and at this time, borrowers are not automatically eligible. Lenders will be working with their clients to cope with the economic fallout of the virus. For Canada's 6 big banks, lenders have stated that they would allow up to 6 months of deferrals of mortgage payments. Other national lenders (First National, RMG, Lendwise, Home Trust etc.) and Credit Unions, are also allowing clients to miss payments or defer payments. There is no set allowance yet. Will it Hurt my Credit Score? There is a CBC article going around about the potential for credit scores being bruised with deferred payments. However, if you get permission to defer payments, there will be no hit to your credit score! Please be sure to pay all mortgage payments going forward unless specifically noted by your lender. Should I Defer Payments?If you need to then yes, you should defer. If not, then try to hold on for a few more weeks/months. Please note: when you defer payments, the lender will take the interest that would have been paid and add it to your monthly mortgage balance. This means that you're going to be paying interest upon compounded interest. In the end, your balance at maturity will be higher, and you will have paid less off of your principal balance. However, this is a small price to pay to feel more financially secure in your home.  How do I Defer Payments?There are 3 ways to defer payments: Call Your LenderMessage/Email Your LenderWalk to a Branch (only for banks/credit union) *Lender Info to the right or below Please remember that payment deferrals are done on a case-by-case basis. Right now, lenders are being inundated with calls and requests for, among other things, payment relief on mortgages. From anecdotal evidence from clients who contact me, there are long (extremely long) wait times when calling their lenders for information. The lenders say “talk to your bank” but my advice is to wait a few days to even a week or more to contact them. This is a fluid situation and more time will allow for better service and new developments to take place. Other Ways Lenders/Brokers Can Help!Unfortunately lenders do not allow brokers to help with payment deferrals. However, depending on your lender and insurer (if applicable) there may be other options available to you, such as: Re-amortization of the loan Capitalization of outstanding interest & costs Restructure mortgage Other special payment arrangements Deferment of Payments Also, if your mortgage is insured, CMHC, Canada Guaranty, and Genworth have assistance programs to help their lenders and you in these times. More Links:CMHC COVID-19 Mortgage Payment DeferralsCanada Guaranty's COVID-19 UpdateGovernment of Canada COVID-19 WebsiteBC Government COVID-19 Website Lender Phone Numbers and COVID-19 Websites Bank of Montreal1-877-895-3278Website Canadiana1-877-315-1633 CIBC1-800-465-2422Website CMLS Financial1-888-995-2657 Dominion Mortgage1-866-928-6810Website Equitable1-866-407-0004Website First National1-888-488-0794Website Home Trust1-855-270-3630Website HSBC1-888-310-4722Website Lendwise1-866-675-7022Website Manulife1-800-268-6195Website MCAP1-866-809-5800Website Merix1-877-637-4911Website Street Capital / RFA1-877-776-6888 Mortgage Numbers Starting with 6 National Bank1-888-835-6281Website Street Capital / RFA1-833-228-5697Mortgage Numbers Starting with 7, 8 or 9  Street Capital / RFA1-866-939-5005 Mortgage Numbers Starting with 4RFA Website RMG1-866-809-5800Website Royal Bank1-800-768-2511Website Scotiabank1-800-472-6842Website Tangerine1-888-826-4374Website TD Bank1-888-720-0075Website 2. Purchases, Refinancing & Transfers If you are currently in the process of purchasing or selling a home, or you are refinancing or transferring a mortgage, I've taken the liberty of gathering information surrounding real estate during this COVID-19 situation. Client Meetings and ConveyancingDue to the focus on self-isolation and preventing further spread of COVID-19, we are holding remote meetings via Google Hangouts, Zoom, and Skype. Also, pure old telephone works as well :). However, lawyers/notaries currently require in-person meetings to sign mortgage paperwork. If you do meet in-person, don’t shake hands, sit as far apart as possible and be sure to wash your hands before and after leaving any unfamiliar environments. Please note: if you have a closing in the next month, contact you lawyer or notary. Make sure that your solicitor can complete your transaction. If your solicitor cannot complete your transaction, I have 5 lawyers/notaries who are willing, efficient, and able to meet. Land Title Office Open - For NowCurrently, there are no plans to close the land title office. This may change, but currently, the land title office may be working with reduced staff and will likely prioritize services required for closings. What Does This Mean for ClosingsIf either the land title office or the banks close, then real estate transactions will not be able to proceed, and you would need to seek extensions wherever possible. The good news is that everyone is in the same situation! The bad news is that there is no "right" in most re-sale agreements to insist on an extension, however, most people are understanding and you will have to rely on their goodness as well as common law principles to extend the transaction. If you get stuck here, first talk to your Realtor and then decide on a route forward. Lawyers may need to get involved. 3. New Government Financing Programs Federal Support | BC Provincial Support March 25, 2020: $2,000 per affected person!! CBC's What You Need To Know. More: In addition to helping homeowners manage their finances through deferred mortgage payments and adjustments, the Canadian Government has also come to the aid of families who may be struggling currently. To help those currently struggling, the following measures are being taken or have already been implemented: Income Tax Payments: The Canada Revenue Agency will allow all taxpayers to defer payments for any income tax amounts that are owing between March 18, 2020 and September 2020 until August 31, 2020. No interest or penalties will accumulate on these amounts during this period. Taxpayers who are required to remit quarterly instalments may benefit from up to 5 months of tax deferral. Income Tax Filing: Income tax return filing has been extended one month from April 30, 2020 until June 1, 2020. If you receive and rely on the GST credit or the Canada Child Benefit, it is still ideal to file sooner to ensure that the entitlements for the 2020-2021 benefit year are not delayed. In addition, the Canada Revenue Agency is adapting their Outreach Program in order to better support individuals during COVID-19. This service allows the CRA to offer assistance to ensure individuals understand their tax obligations and to help them obtain the benefits and credits to which they are entitled. Emergency Funds During COVID-19 including but not limited to: GST Credit: $400 for single adults, $600 for couples Child Tax Benefit Top-Up: An additional $300 per childThe above two may be replaced with the $2,000 per person. 10% wage subsidy for small to medium sized businesses for employees to not lay off employee; $25,000 per employer BC Emergency Benefit of $1,000 for those who lost jobs due to COVID-19 BC Hydro may grant up to $600 to pay hydro ICBC 90 day deferment And much more… Additional Support - Because We care… Employee Assistance Program (EAP): This dedicated program is providing the following: 24/7 confidential access to professional support to help employees manage stress, anxiety, grief, financial concerns, and much more.Employees and managers can connect to get support by phone, video, or chat anytime, anywhere.Vast library of online resources for coping with trauma, building resiliency, self-care, managing change, and more.Manager consultations to support leaders in dealing with sensitive workplace situations. Click here to visit their website and learn more. First Access: This program provides global support for unique needs and for organizations who are not EAP clients. Some of the features they offer are: Counselling and traumatic event support to address unique needs worldwideAllows organizations – even those without a formal EAP in place – to access support services, as needed, to ensure timely and effective issue resolution. Click here to visit their website and learn more. 4. Economic & Financial Side Effects From: Dominion Lending Centres - COVID-19 Update Since being labeled a pandemic per the World Health Organization (W.H.O.), the effects of COVID-19 have begun to ripple through the world’s economy – including Canada – and causing a number of different effects. To help keep you up to date on what is going on financially, we have compiled a list of recent announcements by the Ministry of Finance, the Bank of Canada, and OSFI: Minister Morneau announced a new Business Credit Availability Program, adding $10 billion of additional support financing, through Business Development Bank of Canada and Export Development Canada, to support Canadian Businesses. Click here for more. The Bank of Canada lowered the overnight rate from 125 to 75 bps, to reduce the interest cost burden for businesses and consumers alike. The bank also increased its Government of Canada bond buyback program. Click here for more. OSFI reduced the Domestic Stability Buffer from 2.25% to 1%, thereby freeing up $300 Billion additional lending capacity for Domestic Systemically Important Banks (D-SIBS). Click here for more. In addition, Dominion Lending Centres in-house Chief Economic Advisor, Dr. Sherry Cooper, has been providing in-depth information on this situation as it evolves. You can find her latest articles on the situation below: March 6 – Bank of Canada rate cut and subsequent Canadian mortgage rate dropMarch 9 – Global Markets in Turmoil as Oil Plunges, Propelling Yields to Record LowsMarch 13 – https://dominionlending.ca/news/tour-de-force-boc-cuts-again-osfi-eases-more-coming/ Check out the related CTV Interview here.March 16 – Stock and Bond Yields Plunge after Sunday Fed CutMarch 27 - Bank of Canada Cuts Rates 50 bps to 0.25% THE STRESS TEST In light of this growing situation, OSFI has announced that it is suspending all consultations, including those regarding changes to the proposed B-20 benchmark rate. In addition, the Minister of Finance postponed the announced April 6th qualification change for insured mortgages. In short, until further notice, the Bank of Canada posted a 5-year rate will continue to be used for mortgage qualification. If you are in need of a great Vancouver mortgage broker, click here. ### What's Happening with Interest Rates? Variable rates are falling! - Fixed rates are rising? (read on) What's Happening Now (March 15, 2020) Bottom Line... Eitan's Suggestion: If you're getting a fixed rate of 2.64% or lower, you're doing pretty well vs the variable. Quick Math: The graph below shows a $500,000 mortgage and the difference between a fixed rate of 2.64% versus a variable rate of 2.00%. The variable rate is lower at this time but the rate increases by 0.50% in year 2 and 3 respectively. The math shows that at the end of 5 years, you would be worse off (by $1,018) if you picked variable. Variable Rates Right Now! The Bank Of Canada made an unexpected "emergency" rate cut on Friday. This rate cut moved the Central Bank's prime rate down from 1.25% to 0.75%. This cut followed the previous week's rate cut from 1.75% to 1.25%. It is likely that more rate cuts are in the works. If you have a variable rate mortgage, you will likely see a 1% decrease from two weeks ago. Please see below: How Variable Rates Work. After the new rate cut, variable rates are in the 2.00% to 2.35% range. It's important to note that these current rates may only be temporary. In most cases, I am still advising clients to go fixed! If you DO have a variable rate mortgage, assume that your next payment (if not with TD and RBC's static payment variable rate mortgage) will decrease. Fixed Rates Right Now! Since January and amidst COVID-19's uncertainty, fixed rates steadily decreased. However, since the end of February, and when North America seemed like they were not immune to the virus, we've seen larger decreases in the fixed rate. On March 12 and 13, fixed rates increased quite a bit. Wait, what?! On March 12th, The United States and Canada both announced massive stimulus plans. The stimulus measures, and even a declaration of a national emergency, are meant to counter any market dysfunction in the face of the spreading pandemic. Fixed rates were going down due to the extensive market uncertainty. Basically, the market didn't know how bad things were going to get... But, ever since the stimulus plans and emergency declaration, longer-term bonds have increased. In a nutshell, people thought the sky was falling. Now, we know it's falling but the market thinks they also know how far the sky will fall and when it will stop. How Fixed Rates Work Fixed rates are not as cut and dry as variable rates are (below). They are generally tied to the economy, future economic outlook, and the bond market. As money moves out of more risky investments (read: the stock market & commodities) and into cash, bonds, and gold, bond yields (interest rates) fall. Boiling it all down.., as the economy does well, money moves out of safer assets into higher risk, but higher return investments. When this happens, the bond market becomes less desirable for investors, and the government and institutions have to increase their rates to spur investment in these assets (bonds). The flip side happens when the market is not doing as well... investors flock to safe bonds and the yields come down. This happened twice over the past 6 months. The first time was during the height of the US/China trade war in August and September, and the second is today's coronavirus scare. In both cases, the bond market decreased drastically. But, with the first case, we saw an increase back to more normal rates with a relaxing of trade tensions. How Variable Rates Work Variable rates are directly related to the Bank Of Canada changing their "overnight rate." Canadian banks use this rate as a benchmark for their own "prime rate," and charge borrowers above or below their prime rate. As of a few days ago, the bank Prime rate was 3.45%. And, if you have a rate of Prime - 0.75%, that means your current variable is 2.70%. Since the overnight rate decreased, it's probable the banks will match that decrease and lower their own prime by 0.50%. But, there's precedent for Canadian banks to decrease their prime LESS than the overnight rate. In January 2015, The BoC decreased from 1% to 0.75%, whereas banks decreased from 3% to 2.85%. This happened again in July of that year when the overnight rate decreased another .25% and the banks only decreased their rate by 0.15%. So, it's possible that bank prime rates will only decrease by .30%, rather than a full 0.50%. Please don't hesitate to contact me or Adam to discuss your mortgage or your mortgage needs. Here to help in this strange time. ### Bank of Canada Reduces Rates The Bank of Canada (BoC) reduced the overnight rate by 0.50% on 3rd March 2020. In the grand scheme of things, this is a pretty large reduction. Yesterday      Today      1.75%         1.25% The BoC followed the U.S. with a rate cut to soften the blow of coronavirus. In a written statement about the announcement, the bank said that prior to the outbreak, Canada’s economy had been operating “close to potential with inflation on target.” However, "COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply, and supply chains have been disrupted. This has pulled down commodity prices, and the Canadian dollar has depreciated. Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative. It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity."Based on what I'm reading, the BoC is ready to cut rates further due to Coronavirus. We're also now at all time lows for fixed rates... Please see below. It's a horrible thing that the world is going through... The economy is suffering because of coronavirus. However, the silver lining is that it means money is becoming "cheaper" for borrowers and we're doing our best to help our clients take advantage of these developments. What Does This Mean For YOU? Are You in the Process of Purchasing or Transferring Your Mortgage?Rates are falling and it doesn't seem like there's a bottom yet. We're doing our best to catch up with the rates and give all of our clients new rates as they come down. Have a Mortgage Already? Variable Mortgages: Sit tight - we don't know if the banks will follow suit and decrease their prime rate by 0.50% or by less than that amount.  If you have a variable rate, it may also be a good time to transfer to a fixed rate since the fixed rates are low vis-a-vis the variable rates. Fixed Rates: This may be a good time to transfer your mortgage to a lower rate. Please reach out to us - we would be honoured to see if we can save you money. **Fixed rates are now at record lows and are continuing to plunge...Please check out below on how fixed rates move. ### Soup Sisters & Broth Brothers On Sunday Eitan and Adam volunteered at Soup Sisters. They were supporting Atira Womens' Shelters Vancouver East Side: Sorella House and Aneki. They chopped, cut and grated their way towards the six fantastic soups that were delivered right after the event was over. There is an urgent need for low barrier supportive housing for young women in the Downtown Eastside of Vancouver. Girls and young women who are homeless or in unsafe housing face enormous challenges and risks, including violence/abuse, gender exploitation, substance use practices, racism, poverty, pregnancy, poor physical health and barriers to accessing support and service Soup Sisters is a non-profit charitable social enterprise dedicated to providing comfort to women, children and youth through the making, sharing and donating of soup. Every time a group comes together and makes soup the women and children at the shelter not only become better nourished but also nurtured by members of their own community. This goes a long way in supporting them on so many levels. This very simple gesture of homemade and nourishing soup also carries with it a very strong message of concern that reaches the women and young people directly. Since their launch in Calgary in March 2009, they have delivered over 2 million servings of soup and grown to chapters in 35 cities throughout Canada and into the USA as well. Each month over 10,000 bowls of fresh soup is delivered nationwide.  The events are social evenings with lively conversation, chopping, laughter and warm kitchen camaraderie that culminate in a simple, sit-down supper of soup, salad, bread and wine for all participants.  It was a very rewarding experience for both Eitan and Adam and they would encourage people to get involved! ### 4 Items for a Great Credit Score There is a lot of misinformation floating around about credit reports and credit scores – not only that, a large number of the clients we work with have never even seen their credit report or score before! When our clients meet with us, we will go over the details of credit reports and also their own personal credit report with a fine-tooth comb, making sure they are fully aware of everything affecting their credit score and their credit bureau. Keeping Your Credit Healthy There are a number of ways that you can actively ensure that your credit score is kept high and in the best standings in order for you to get the best mortgage options. Have Credit It’s surprising to think about it, but your credit score goes up the more credit that is available to you. Think twice the next time you say no to an increase in your credit limit - it may just help increase your credit score. It's also important to note that most lenders want to see at least two credit facilities (credit card, line of credit, or loan) of at least $2,000 of limit each. If your credit card limit is $1,000, it may be time to increase your limit. Pay Your Bills Pay your credit cards and other debts on time – this includes bills like your cell phone or even parking tickets. Many clients don’t realize that unpaid tickets can affect your credit score drastically. If a card or phone bill is late, then your score will automatically decrease. However, the longer you are away from a late payment, IE, the late payment happened a few months ago vs a current late payment, the better your credit score becomes. In other words, a late payment affects you more the more recent it has been. Note: credit lates are only recorded as late if they are over 30 days late. So, a few days or a week will not hurt your credit score. Start Now The longer you have a clean record of paying your credit card, loans, or other credit facilities, the better your credit becomes. So, a 40 year old with clean credit will have a much better score than a 25 year old who has only had a few years of credit history... Keep a Low Balance One of the least known ways to hurt your credit is to have high utilization. What this means is that if you use a high proportion of your available credit on a monthly basis, your credit score may decrease.It is best practice to pay off your card every couple of weeks or you can increase your available credit so that you use a third or less of your available credit monthly. Bad Credit? It is not uncommon to forget about, or be late on your payments...Late payments is the key contributor to a low credit score. Don’t panic! There are fixes and we’re here to help. Please don’t hesitate to ask us how we can improve your credit score. We are here to help!! Give us a call and we'd be delighted to go over your credit score and help with solutions to improving it if needed. ### DLC's Legend Award Awarded to Pinsky Mortgages We are extremely honoured and proud to have been awarded the Dominion Lending Centres' Legend Award for 2019. To receive this award, our team has placed in the top 0.4 per cent of DLC's mortgage professionals in Canada. Eitan thanks, and gives a huge shout out to, the Pinsky Mortgages Team, our realtors and partners, and lastly but most important, our amazing clients. We are so lucky to have such wonderful people to work with; we couldn’t think of doing anything else! ### Open Banking for data - and power - back in YOUR hands As the Information Age has advanced, we have come to appreciate the value of our own data, something our parents or grandparents may have taken for granted. The information that institutions like banks have about our income, spending and financial status has been largely proprietary – in other words, there is information about us out there, but it’s owned by the banks (or credit unions or credit card providers, insurers or mortgage companies, etc.). A potential revolution is happening on this front, called Open Banking. When banks, credit unions and other financial institutions own consumers’ information, it reduces competition and innovation and potentially leads to higher costs for financial services.  For example, if a consumer could easily share all the data that has been accumulated about his or her financial status (income, expenditures, assets and so forth), this person could offer it to competing institutions. Each institution would then be able to fight to give the consumer the best offer for items such as bank accounts, mortgages, investments, etc.  This, in a nutshell, is the beauty of Open Banking: Open Banking hands the information back into the control of the consumer. Once the “ownership” of the data is repatriated, consumers can then opt to share their data, via trusted third parties like some exciting, emerging APIs, such as Flinks and it’s coming integration with Velocity (which is what I use) and then allow access to it on an as-needed basis to financial institutions. This would, hopefully, reduce or eliminate the need for the seemingly endless form-filling-out, paystub-piling, T4 and other tax form collecting and assorted pesky and time-consuming paperwork required for borrowers. More than this: The data would allow lenders to gain a much deeper and nuanced look into a potential borrower’s spending habits, for instance, which might not be evident through something as one-dimensional as a credit score. Of course, there’s a trade-off. (Isn’t there always?) Not everyone wants a lender (or anyone else) to get a granular look at where every dollar and cent ends up. (“I see you spend an awful lot of money at Purdy’s Chocolates, Mr. Pinsky.”) But, at its root, Open Banking allows the consumer to make that choice: To share, how much to share, or not to share. The trade-off is that, by sharing, we may open ourselves up to greater competition for our business and, as a result, obtain beneficial borrowing rates and other benefits, such as easily moving money between accounts at different institutions or opening a new bank account. Open Banking may be especially suited for those with limited traditional financial history, because it allows lenders access to more data than what a consumer can prove with what’s currently available. For freelancers or those in the gig economy, Open Banking can provide a fuller context for decision-makers. Canada lags behind most of the Developed World on the issue of Open Banking, probably due to the outsized control the big banks have on policymakers. The European Union, Australia and the United Kingdom have already regulated banks to hand over data to other organizations at the request of the consumer. But Canada’s federal government is playing catch-up now. Earlier this year, the Department of Finance called for individuals and interested parties to submit their views on the subject. As is prudent, the government will likely assess challenges as well as opportunities with Open Banking.  As a report by Deloitte indicates, the advent of Open Banking raises a number of issues, such as how new entrants in this freer market will be governed, how data shared between different organizations and apps will be protected, how privacy will be insured, what recourse will be available for liabilities, and how phishing schemes could be used to perpetrate fraud. On the flip side, the ease of access to the broadest swath of a borrower’s financial data will reduce fraud, according to proponents, by making it more difficult for borrowers to fake or otherwise mislead. Open Banking would allow lenders to make the most informed, well-rounded decisions while reducing employees’ workloads and therefore overhead. This better decision-making should reduce defaults and, in the long run, reduce costs and losses, which could and should be passed on to consumers. This would be especially true as Open Banking increases competition, making even the stodgiest institution streamline its operations and shine up their spiffiest consumer offerings. All in all, it should speed up every aspect of the lending process from the applicant cobbling together the myriad slips of paper and filling out forms to the time it takes the institution to render a decision. Open Banking has the potential to advance financial literacy and consumer education, as well, with financial institutions or advisors being able to see what goes in and out of the bank account and possibly provide far more insight into the financial affairs of the applicant. If the consumer wants to hear it, advisors may be able to demonstrate how conscious decision-making or different spending and saving choices can lead to improved credit scores and other outcomes. Not everyone will want to jump on the Open Banking bandwagon. But that’s the point: The data belongs to the consumer, not the institution, and so the choice of who sees it should be in their hands. Your hands. ### FTHBI - First Time Home Buyer Incentive - Better Than We Thought! The new First-Time Home Buyer Incentive allows first-time homebuyers, who have the minimum down payment, to apply to for a shared equity loan from the government.  The interest free loan is 5% of the value of a resale home, and 5% or 10% for homes purchased straight from developers. *An amount in between 5% and 10% is not allowed. Released today, for Greater Vancouver, Victoria, and Toronto, the maximum purchase price is nearly $800,000, with a maximum mortgage (mortgage plus incentive) amount of $750,000. Further, the maximum mortgage plus incentive can be 5 x income, verses 4 times. Previously, and still for the rest of Canada, the maximum purchase price was just over $500,000 and maximum mortgage of $480,000. For the vast vast majority of Vancouver and Victoria home buyers, this program wasn’t designed for you… However, the change in purchase price and criteria is very welcome. *This change is only if the Liberals get re-elected. I personally welcome this news and move and hope that whoever does get elected would implement this strategy. What's Cool About This Program No qualification criteriaInterest free loanMonthly payments decreaseNo pre-payment penaltyYour mortgage insurance premium is based on the loan-to-value ration of the first mortgages only, decreasing your overall CMHC costs. Very cool! Check out the chart below! As stated above, this program doesn't increase affordability. This is due to the requirement that the mortgage + incentive must be less than 4 x gross income now and 5 x if the Liberals get elected. This means that the real benefit here is to help with monthly payments. Vancouver or Victoria Potential Purchase Example (If the changes mentioned above are implement) What I really like about this program is that even though the incentive is only $35,000, the government looks at both the down pay and incentive amount to calculate the insurance premium. That $35,000 turns into $41,980! Another cool thing is that the extra $195 per month could be used to A) put towards the mortgage for a faster payoff, B) to RRSPs to decrease taxable earnings, C) to RESPs (everyone should invest in RESPs if they have kids), and D) TFSAs. Currently Allowed Purchase (New Home) You can save quite a bit of money per month if you have 10% of the property provided to you, on an interest free basis. This is not a program to scoff at!! Conditions Must be a first-time home buyer as recognized by the CRA’s RSP Home Buyers’ PlanMust qualify for the mortgage and have mortgage insurance (your down payment plus the FTHBI cannot exceed 20% of the value of the property).Total (all applicants) qualifying gross income cannot be over $150,000 for Vancouver, Victoria, and Toronto, and $120,000 for the rest of Canada.Mortgage plus incentive cannot be over 4 times gross income.Repayment of the loan is when the property is sold, or 25 years, whichever comes first. Refinancing of the first mortgage will not trigger a repayment. Or, it can be paid off at any time.When paying off the FTHBI, the repayment is based on the property’s fair market value (sale price) or an independent appraisal. The Downsides The government will participate in any increase of the property’s value. IE, if your loan is 5% at the beginning. You would have to pay 5% of the new sale price. The government will also participate in any decrease in value as well.There is an extra solicitor fee (~$300) for arranging this 2nd mortgage. How To Apply Talk to you favourite Mortgage Broker! We’re here to help.The application is fairly simple:Go to: http://placetocallhome.caFill out the Consent & Privacy form on the website and hand it to your Mortgage Broker. Simple! Pinsky Mortgages Please don't hesitate to give us a call. We're looking forward to providing you with the advice and service all of our clients and referrals have come to expect! ### Mortgage Professionals Now and Where We are Headed The next decade is going to see an evolution in how Canadians obtain mortgages. These shifts will transform the experience for both the mortgage professional and, more importantly, the borrower. I wrote an article about technology in the mortgage industry, explaining how technology will ease the average borrower’s ability to gather required information, submit applications and be more empowered through the entire process – all from the convenience of their own home or mobile device. The next few years will also bring huge shifts for the mortgage professional industry. I predict a decrease in the number of true mortgage professionals who are experts in their sector. The 80/20 rule will become more like a 90/10 rule – 90% of the business will be done by 10% of mortgage professionals.  Here’s where things are now and down below is what I foresee … The State of the Mortgage Industry Now A mortgage borrower can go to three sources to get their mortgage: account managers at banks, mortgage specialists at banks, and Mortgage Brokers. *I am using bank as a catch-all for financial institutions, including credit unions and trust companies**Financial planners are not included because they represent such a small slice of the pie and refer files to mortgage specialists. Account Managers and Employees at the Bank Employees, particularly account managers, are a bank’s frontline team for mortgages. These salaried employees get incentives if they hit sales targets, but they are, by definition, jacks-of-all-trades. They help with a client’s routine banking needs, open investment accounts, provide general advice and also write mortgages. Because mortgages are complex, account managers are encouraged (and often required) to send their mortgage applications to a mortgage specialist. This is good policy, because it is best to have an expert eye review something as significant as an average family’s most significant investment – and the average bank’s bread-and-butter. Also, because there have rightly been at least many (one expert told me there was a total of 168) new rules since the 2008 financial crisis, it has become increasingly difficult to “dabble” in mortgages. Given these developments, a consumer would be wise to trust the most important financial transaction in their life to a professional who has expertise in a single field, rather than a generalist who is doing mortgages off the side of their desk. Mortgage Specialists at the Bank Of course, every bank employs a network of mortgage specialists, with each bank investing varying amounts of resources into training. Still, a mortgage specialist is just that: a bank employee who specializes in mortgages. Most banks’ mortgage specialists are commission-based and can make a good living from their work. But remember: Bank specialists work for the bank – not for you. (They also don’t require a license or any accreditation to write up your mortgage application.) Mortgage Brokers Mortgage Brokers are independent professionals whose unique responsibility is finding the ideal financial solution for each client – not whatever rate or product their bank is pushing on any given day.  Check out my video about how a mortgage broker can help pick the best mortgage, using an example we can all relate to! A Mortgage Broker is a professional who has successfully completed an educational process, passed an exam, and undergone comprehensive assessments, including biannual criminal background checks. Additionally, continuing education is required to ensure that Mortgage Brokers remain informed of the latest developments in this ever-changing industry. Mortgage professionals at the banks, however well-intentioned or however closely they follow the business pages, have no such requirements.  It is commonly said that a Mortgage Broker “shops around” for the best rate. This is partly true, but there’s more. Brokers know the rates and conditions of every lender. What we do with that information is tailor each client’s need with rate and product choices, allowing them, with their Mortgage Broker’s guidance, to make the most informed, appropriate decision for what best suits them as they consider the most important financial decision of their life.  For example, a Mortgage Broker might recommend a more flexible mortgage product with a slightly higher-than-base rate versus a lower-rate with restrictions. This is crucial because, again, everyone’s case is unique. Circumstances change. Relocation is sometimes unavoidable. (Take a look at my comprehensive analysis of mortgage options and restrictions.)  Even better: for most mortgages, a Mortgage Broker’s service is provided at no cost to the borrower! Mortgage Brokers earn their keep from the lender that finances the borrower’s mortgage. So, Where is the Mortgage Industry Headed? In my article technology in the mortgage industry, I note that prospective borrowers still require (and prefer) personalized service. The most important investment in a family’s life deserves hands-on human expertise. Algorithms and web apps don’t cut it. (At least they don’t cut it yet – and, given the technology so far, will not for quite some time.) So, we’re still left with real live people helping a borrower with their mortgage application.  Account Managers and Employees at the Bank Account managers will continue to write mortgage applications because this remains an efficient use of the bank’s resources. The banks have been building increasingly sophisticated mortgage application platforms for their mortgage specialists and account managers to use. These easy-to-use apps are straightforward and allow their employees to quickly and efficiently pull together all of the necessary information to verify credit data, employment, assess risk and review the property, all at the click of a few buttons.  The banks built these systems so that employees with less expertise (and lower salaries) can replicate or reduce the work of more highly trained professional staff. And, since mortgage specialist are largely commission-based, it seems to me that banks will increasingly depend on salaried individuals who read from their computer screen while dealing with mortgage-seekers. Mortgage Specialists at the Bank Bank specialists are still being hired and supported. But there is a great deal of turnover due, in part, to many of the good mortgage specialists abandoning the banks. Part of the reason is that some banks have been quietly but systematically reducing supports for their mortgage specialists. They may be paying specialists less money for the same work or curtailing their scope. A few years ago, RBC mortgage specialists were prevented from helping their existing clients who wanted help with their existing mortgages; only branch account managers could do this work – so these clients had to be referred off. The relationship had to be severed. Additionally, Mortgage Brokers routinely earn three times as much per file than mortgage specialists at a bank, so the best in the field tend to leave the banks to succeed as independent brokers.  (As an aside, the bank does have some positive attractions for employees: bank specialists get benefits, RSP matching, bank branch support and, especially for newer mortgage professionals, the value of brand recognition. And, especially for older professionals that I’ve talked to, a healthy pension! Leave the pension, for those who are on defined benefits (ask me if you’re interested to know what this means) is a non-starter. There is, of course, still currently a place for bank specialists. The best of them can and do give the best service possible to their clients.  My prediction for mortgage specialists: I suspect that the mortgage specialist role will be curtailed until only a few high producers remain. Banks will probably continue to make it easier for mortgage specialists to do their jobs, allowing them to take on more files and the best will grow and the worst will drop off. Mortgage Brokers Don’t misunderstand me! There is a place for technology, obviously, in the process. In fact, Mortgage Brokers, by necessity are entrepreneurial and resourceful and have adapted technologies much faster than the big banks and other financial institutions. Mortgage Brokers have created economies of scale, processing documentation and applications more efficiently than ever. For instance, my team and I have automated the process of 70+ internal steps per client throughout the mortgage process, streamlining everything for ourselves so that our clients can benefit from the most comprehensive and individualized experience we can offer. This involved a lot of time up-front, for sure. But what it means is that our clients receive the service and personalized consideration they want, need and deserve – every. single. time. And they get the best result, tailor-fit to their specific needs, thanks to a dedicated team that combines the advantages of technology with the irreplaceable flexibility of human interaction and understanding.  Eitan's Prediction My prediction for Mortgage Brokers is that there will be a culling of the herd, just like with mortgage specialists. A Mortgage Broker, and any consultant in this day and age, needs to innovate and use the newest technologies to stay relevant in the eyes of borrowers. Not just that, the Brokers themselves need to also know each lender’s products and how to get files approved.  Superb knowledge, a fast and efficient process, AND amazing customer service will become the bare minimum in the future; borrowers will get used to it and require it, and the Mortgage Brokers who “dabble” or aren’t 100% committed to improving their craft will get left in the dust. If you are in the market for a mortgage, make the choice that gives you the most informed choice. Call a Mortgage Broker. We hope you’ll choose Pinsky Mortgages. ### Negative Interest Rates & The Economy I'd like to talk a little bit about interest rates. Did you know that there is a new Danish mortgage that has a negative interest rate? This almost seems like a dream… Why would a bank pay you to borrow money? Article on Denmark's Negative Interest Rates So how can this be true, and why is it the case? Well, let's look at the broad economics and the three players involved. Borrowers, Banks, and Central Banks The first player or entity we should look at is the borrower. A borrower can be everyday people like you and me who want to get a mortgage or loan, or it can also be businesses or corporations that would like to borrow money. As an aside, most debt/loans that are borrowed for business-purposes is to help that business grow, and not to pay back other debt. The borrower goes to the second player, normally a bank or financial institution, for their needs. The bank charges the borrower interest on the loan and facilitates the transaction. When deciding who gets what loan, each bank or financial institution must decide whether the borrower’s request is at an appropriate risk level for them to approve. This is exactly the case where a bank has to make sure that a person can pay back their mortgage based on the income that borrower has. Now, did you know that the banks (catch all here for banks and financial institutions) don't always lend their own money? Banks are able to borrow money from the third player in this hierarchy: their country’s central bank. In Canada, the CB is called the Bank of Canada and in the United States called the Federal Reserve. The banks are able to borrow from their central bank at a lower interest rate than the rate that the bank charges the borrower. The banks earn their “spread” on this money (the difference between how much the CB charges them, and how much they charge their borrowers) so they can earn a profit, but also to pay for their administration costs. Phew - so now we know the three players. But why did the second player, a bank in Denmark, pay borrowers to borrow money…? The answer is simple: the central bank of Denmark, or Nationalbanken, is paying the banks even more money to borrow cash than what the banks are paying their borrowers. The Economy and the Central Bank You’re probably scratching your head as to why this occurs… I mean, why and how would there be negative interest rates? Would it surprise you if I told you that Japan has had interest rates at 0% and negative rates on deposits for some time? When the Japanese banks offer negative rate bank accounts, they are effectively telling consumers: “Do not leave your money here; go out and spend it.” And why is the Japanese bank telling their clients to spend money and not save? It is specifically because the 3rd player in this debt machine, Japan’s central bank (The Bank of Japan) has 0% or negative interest rates. A country’s central bank’s main role is to form and implement monetary policy to influence the country’s money supply (central banks are the issuers of bank notes; the Bank of Canada is in charge of printing our currency and deciding how much currency to print), the overall economy, and by extension, inflation/deflation. And, the economy is what prompts the central bank to increase or decrease their interest rates. A rising or growing economy would prompt the central bank to increase rates and a contracting economy would force the central bank to decrease borrowing rates. Secondly, if the economy is doing well, specifically if the job market is positive (low unemployment) and businesses are investing and growing, that country’s average worker wages will increase. An increase in wages means more buying power, which means more demand for the same goods, leading to higher than expected inflation (many central banks allow for inflation of around 2% per year). As an aside, the opposite of inflation is deflation. Inflation means that the economy is growing too rapidly and in order to stem that tide, the central bank will increase their interest rates, prompting the banks to increase their interest rates, and lastly affecting (most importantly) businesses borrowing for growth. Remember how businesses borrow money to invest and grow? Well, the more expensive money is to borrow for businesses, the less they will borrow and less they will invest, effectively dampening economic growth. On the other side, if the economy isn’t doing very well, the central bank will want to decrease interest rates in order to allow businesses to borrow at lower rates in order to spur investment and company growth. Company growth means more hiring, higher wages, and a better economy.  Yes, there are other factors that affect monetary policy such as currency price fluctuation and how one country’s change in currency value vis-a-vis other countries affects their imports and exports. However, the main culprit for a central bank’s increasing or decreasing of their interest rates is due to the economy and inflation. So, long story short (in one sentence), as the economy grows or is expected to grow, the central bank will increase interest rates to avoid inflation, and if the economy is contracting or is expected to contract, the central bank will decrease rates. Back to Denmark Based on all of the above, Denmark’s central bank isn’t worried about a runaway economy, but they are worried about stagnation and a contracting economy.  Let us know what are your thoughts in the comment section below! ### Technology in Mortgages and Real Estate Technology is a Force! Technology is already playing a huge role in the mortgage industry. In the past, mortgage applications had to be physically taken by hand and faxed in (what’s fax anyways?!)... It may soon by possible, with technology’s help, for borrowers to be able to fill out their own application and send it, along with all supporting documentation, straight to lenders without a mortgage professional’s help – kind of scary Technology in Real Estate and Mortgages On the Realtor side, there is DocuSign, Realtor.ca, Zillow, and a host of other technology driven solutions that help Realtors be more efficient in their business. However, just like in mortgages, it’s coming to a point where buyers and sellers may see value in going to discount brokerages such as Redfin. Let’s first look at the mortgage side. Quicken Loans’ Rocket Mortgage in the States started out as an online-only mortgage application tool. The promise is faster service, with little headache, and everything done “from the comfort of your own home.” In Canada, Scotiabank just rolled out their eHOME Mortgage application. RBC has had a Pre-Qualification Application for a year and TD rolled out their Digital Mortgage Application in early 2019. Our own parent mortgage company, Dominion Lending Centres, brought out their “My Mortgage Toolbox” application for Mortgage Brokers to use, and other Broker houses are fast on the trail. All lenders are trying to capitalize on a Millennial’s and Generation Z’s comfort level with providing their personal information to a computer system. The promise with all of these digital tools is to make a borrower’s mortgage journey easier, and with how technology is progressing, this digital experience is going to keep getting better and better. Unfortunately, as with any process change, problems arise… The first and most glaring issue with the digital mortgage experience is that because mortgages are complex, with timelines to follow and anxiety to manage, borrowers are continually requesting human interaction to answer their questions. Rocket Mortgage’s own website now advertises being able to chat online with a specialist right up front. Secondly, although digital applications promise speed and ease of use, all mortgage files still have to have “eyes” on an application. We’re not there yet (nor will we be for the foreseeable future) where humans do not have to touch mortgage applications for final approval. This human requirement means that a mortgage file must wait in queue to be approved. Lastly, if any file has the slightest hiccough and doesn’t conform to exactly what the computer systems need to see, an expert will have to be called in during the process to troubleshoot. As an aside, the “experts” who look at these files are salaried individuals; more on that later. All-in-all, technology alone is not changing the mortgage market. On the Realtor side, the biggest issue with using Redfin, or relying too much on technology driven companies, is that the Realtors who work there are most likely going to be sub-par... Yeah, I said it… Just like 1% and 2% real estate companies, if someone is working for half the commission, they are, by nature, not going to be as good or competent as someone who prides themselves on working for their due.*Don't get me wrong, there is a time and a place for those 1% and 2% real estate companies (it's obvious due to them being around) but I believe they are not the best choice for the vast majority of clientele. Additionally, I firmly believe that in life, we get what we pay for. The best advisers and salespeople will gravitate to where they are better compensated. Salaried individuals and discount mortgage and real estate professionals will invariably move to become independent if they are any good. If they are just so-so, bad at their jobs, or are just happy to provide the bare minimum in service, they stay and let someone else hunt for business – see the “more sinister” reason for technology and apps below. So How Is Technology Being Used? Interestingly, unlike Rocket Mortgage, many of Canada’s digital mortgage applications have been created to open the door to a conversation with a potential borrower and are not meant to replace the mortgage professionals’ role at this time. For instance, RBC’s Pre-Qualification Application and DLC’s own My Mortgage Toolbox is really just a bait and hook advertisement: if you use the application to find out how much you qualify for, RBC and DLC will have one of their specialists/Brokers message you from within their app or email you and text you if you give them your contact information. In other words, free applications have been created with the goal of converting online leads into clients. On the other hand, Scotiabank’s eHome just put out a killer interest rate deal on the 4-year this week. The catch here is that this rate is only available through Scotia’s eHome application and borrowers will be stuck with salaried individuals again. This is also the case with HSBC’s March – May killer rates specials… Most borrowers will be directed to a centralized processing centre and they receive horrible service. Whenever we are about to lose a client to a much better rate, the client comes back to use saying that there’s either no response or very poor responses from HSBC. However, there’s another, more sinister, reason the banks, mortgage brokerages, and real estate companies are investing in this new technology. If leads are being directed from a parent company directly to mortgage professionals or to Realtors, the parent company now has the upper hand and will take a bigger piece of the pie. They also get to choose who they send their leads (new borrowers) to. In the end, a fixed-cost salaried individual will always be a solution the parent company ends up going to to maximize profits. It’s all about control, and who has what each person needs… For Mortgage Brokers and Realtors out there, be wary of which hand is feeding you! Technology as a Benefit: There are ways that technology is being used for the benefit of borrowers. The first is that in our hyper connected world, a borrower’s credit, income, and down payment can all be verified at the touch of a button. Mortgage Brokers can already pull someone’s credit bureau in seconds, and there are also services to allow us to get 3-months of bank statements for down payment verification with a client’s permission. The last step is to have our systems validate income by way of a national employer registry or by other means. In the States, this is done through their IRS and the credit bureau companies and it will come to Canada in the future. All of this means that a borrower can get firm approvals more efficiently (not having to download bank statements, get employment letters, etc.) and it will allow the professionals more time to provide advice and cater to the client’s needs. The second benefit to borrowers is that the new applications are now able to receive documentation, communicate on application status in real time, and much more, all in one easy-to-use platform. It’s incumbent on the professional to make sure that their technologies and systems are properly integrated to provide a seamless, but better, mortgage experience for their clients. To recap, technology will be playing a larger and larger role in how mortgages are obtained in the years to come, and in order to thrive in the 2020s, Mortgage Brokers and Realtors are going to have to use technology to the best of their abilities. The marriage between human interaction (building rapport) and providing a seamless experience through leveraging technology should dominate our thinking! *Yeah, that last sentence is gonna be trademarked… Please let us know in the comments below if you liked our article! ### Mortgage Broker History and Mortgage Applications A little rant from my side… In the past, we had banks (bank as a catch all for credit unions and trust companies) and Mortgage Brokers. Writing mortgage applications is extremely difficult; there are a lot of moving parts in a mortgage. Because of this, banks employ mortgage specialists whose sole role is to provide mortgage advice. On the other hand, previous to 20 years ago, a Mortgage Broker’s main job was to get financing when a bank declined a borrower’s application. Basically, Mortgage Brokers were a borrower’s last resort: “if you can’t get financing from the bank (RBC, TD, Scotia, etc.), come speak to me.” This is generally why we see older generations having never used mortgage brokers – they didn’t have a need. But, there have been many changes over the decades. In most cases, Mortgage Brokers can provide better interest rates for most mortgage applications. This is specifically due to wholesale lenders. But, when it comes to prime (bank or Monoline Lenders) financing, Mortgage Brokers find they are sometimes at a disadvantage when banks make “exceptions” to regulatory mortgage rules. Mortgage Brokers are sometimes held to a higher standard because all of our files are picked at with a fine-toothed comb. For example: in 2016/7 CIBC, which does not procure mortgages from Mortgage Brokers, underwent a mortgage audit. The regulator found that every single one of the 50 mortgages audited failed their audit… and CIBC hardly even got a slap on the wrist. As an side, remember when banks would provide financing for foreign students with no income? Yeah… that was primarily CIBC! Notwithstanding, Mortgage Brokers (by definition) have access to many different types of lenders and are not beholden to the employer institution. Non-prime lenders can lean more heavily on a specific property and less so on the strict guidelines that the government requires. Long story short, Mortgages Brokers have access to many different lenders, but in come cases, a bank specialist can get something done that a Mortgage Broker cannot do due to the bending mortgage rules. Notwithstanding, in 99% of cases, if all rules are followed (which are being more strictly enforced since 2018), Mortgage Brokers have more access and more complete solutions to bank specialists. ### Your Business By Design FOR MORTGAGE BROKERS & REALTORS Are you counting how many referrals you get from current and past clients?  We do! Apart from the amazing realtors who support us, the bulk of our introductions are from current and past clients. We also consistently get 5-star reviews from our clients, and we now have over 150 5-star reviews. I’m not writing this to brag (although I do have a slight ego - my friends may tell you that)... I am saying it to convey that I think we’re doing something right. So what does Pinsky Mortgages do right? Well, for starters, we’ve figured out that we’re not special. Pls don’t tell mom... We are very good at what we do, but so are many other mortgage processionals in our industry. And yes, we can get some mortgages approved when others fail, but so can other expert mortgage professionals. The question very early on for us was: if we’re not special, how do we differentiate ourselves from other amazing mortgage professionals? Design Your Business As an aside, the following only applies once you have the basics down. If you can’t write a loan if you’re a mortgage broker, or do a CMA (etc.) if you’re a realtor, you’re missing Step 1. Become an expert in your field before doing anything else..! To me, designing your business is a way of approaching your customer experience to meet the needs of your clients.  Business design is about creating a process that leaves nothing to chance. It means being able to look at all of the angles of the customer experience from your client’s point of view. Now, on any given transaction, you may get lucky. You may hit it out of the park by connecting very well with your client... but, the key to business design is to provide the same amazing service, the same wow factor, every time and to every client! Pinsky Mortgages Designed Customer Experience Our customer experience can be defined as the sum of all the interactions our clients have with our company. It’s not just that we get our mortgages approved and funded, but it’s much more than that. Our customer experience is how we greet people at the door, how we talk on the phone, the fact that we meet our clients in person twice, the way we are initially introduced and even the way we write our emails. Our goal is to cultivate feelings around our service because our customer experience is built to resonate emotionally. Our customer experience is empathetic and rooted in an understanding and identification of our clients’ feelings, thoughts, and attitudes. We are focussed on understanding problems our clients may face and solve them before they are even aware they exist. The next four topics outline the initial stages of our mortgage process to show how it was designed to deliver a “wow” to our clients. Client Introduction and Setting an Appointment Whenever we get an introduction to a new lead, the most important thing we do is follow-up right away.  I can’t stress enough how important speed is when it comes to follow-up. Psychologically, answering the introduction email within 20 minutes means you’re on the ball and ready to take on new clients. If you wait until you “have time” later on in the day, it’s possible you may get off on the wrong foot with your client. Managing expectations is extremely important in everything we do. However, at this stage, there are no expectations to manage - you have not talked to your client and they know very little about you. Set the bar high - answer right away! OK, so now we have the lead and we respond. The response we crafted is always the same and it answers the following question: “who are you and how can I benefit?” Or: “why should I give you my time when there’s so much competition out there?” The initial email also extends our availability. Our initial email looks like this: Good Evening/Morning/Afternoon XXXXXX, BBBBBBB, thank you for introducing me! XXXX, I'm looking forward to providing you with the mortgage advice and service all of my clients and referrals have come to expect. A little about me and my brokerage: We're a full-service mortgage broker, specializing in getting you the best rate and most suitable mortgage for your needs, while making sure you understand the mortgage process as well as your actual mortgage. We do this so you can feel comfortable with your home financing. We also go over how to take advantage of mortgage options for you to pay less interest and become mortgage free sooner. Do you have time for a chat or a meeting this week? I'm generally available with a day or two notice. I work evenings and weekends as well - I know how important that is for people who work 9-5. I'm free ASLDKFJALSKDFJ evening and ALSDJFH evening. Do any of those times work for you? Looking forward to meeting you! Warm Regards, Eitan We get very good responses from this well-crafted email introduction response. Pre-Meeting Email or Call Once the client has responded back, we will either call to schedule a meeting or schedule it over email. If the meeting was fully scheduled by email, we also send our home buyers guide out so that it can answer any pre-meeting questions. If the meeting was scheduled by phone, we follow-up with our home buyers guide. The call and email is meant to manage clients’ expectations. We introduce ourselves and we explain exactly what we’re going to do in the first meeting, how long it’s going to be, what documentation may be needed, and what they will learn.  We tell the client that the meeting will go over 5 things:  What four items are required for a mortgage in Canada,What a pre-approval is (and what it’s not), We’ll do a small application together so that,We can pull credit and teach the client how to read their own credit bureau. Explain affordability and educate the clients on their specific options for qualifying. We explain that at the end of the meeting, the client will know exactly how much they will be approved for and what documentation will be required for the pre-approval or full approval.  Secondly, the initial phone call is to provide love to the person who referred us. Since we have been referred by someone, most likely a current or past client or realtor, we know that we have been trusted to do a good job. We reciprocate the favour by making sure the client knows how awesome it is to have the referrer as a friend, acquaintance, or realtor. If the referrer is a realtor, we explain how good that realtor is and how lucky the client is to be working with them. Yes, we can always find something to say about a realtor that makes the realtor look good (and true). Lucky for us, the vast majority of the realtors who refer us business are top notch! There’s a lot of psychology in place here about providing love for the referrer; please don’t hesitate to ask me specifically about this item. And yes, we have scripted all of this. Meeting our Clients at our Office We try to meet all of our clients at our office.  Before clients arrive, we put some coffee on, boil some water for tea, and make sure that our snack bowl is full. For our snack bowl, we have an assortment of Kind Bars, chips and trail mix.  Giving someone food and/or a beverage serves two important purposes.  First, when you give someone anything, again, psychologically that person now likes you more and feels like they have to reciprocate. We do like to share and it’s human nature! Reciprocation can be a smile or a good feeling and it may mean that you'll build better rapport. Second, we are trying to fight off our clients being “hangry.” When hungry, humans may be less agreeable, less willing to learn, and less able to build rapport. When our blood sugar is managed, our moods change for the better, helping us focus on what’s important.  Now, when the clients come in, we greet them at the door with a smile and a handshake. We always ask if the client wants snacks, coffee or tea, and water. Experience has taught us that most clients will take one of the three (snacks, coffee/tea, or water) but if we ask again in 10 minutes, they do ask for something else. We're generous with our snacks! The moral here is always ask if the client wants something to eat/drink at least twice. Make your clients’ happy through their tummies :) Build Rapport Remember that at this time your client still doesn’t know much about you. They know you answer emails and phones quickly, they know you are professional due to the emails you write and the documentation you’ve provided so far, but they don’t know YOU! Ask some open ended questions. Ask how their trip in to see you was. Ask them if they usually like tea or coffee and if so, what kinds. Ask questions about them! “No one cares about how much you know until they know how much you care!” I know it sounds cliche but our initial consultations, and every interaction after, is about building a friendship.  We have two assumptions when we meet our clients with the first being that they will be our clients and that they will work with us (called an assumed close) and that we will become friends. It’s kind of like dating - put your best foot forward and learn about your client. The best book I can recommend for this is How to Win Friends and Influence People by Dale Carnegie. Conclusion To build a sustainable, scalable business, you need processes and systems in place. What better way to start than to “design” your process with the customer and the customer experience in mind. Every thing we do is with the customer in mind. It's not that we're special, it's that our clients are special, and we're lucky that they are noticing. If you have any questions about our process or about designing your own, please let me know and I’d be very happy to help out. Warmest Regards, Eitan ### Federal Budget - Real Estate POV There are two items specific for first-time home buyers: Increase of Maximum Withdrawal from RRSPCMHC First-Time Homebuyer Incentive Eitan's General Commentary On a whole, I don’t believe there is much in this budget to alleviate the supply issues we’re facing - the housing measures are specifically focused on the demand side, without much encouragement or focus on new or affordable housing.However, the budget does have $10 billion earmarked for 42,500 new purpose-built rental units over the next nine years. This will be through tax breaks to developers for purpose-built housing, and will be for areas with very low vacancy. What I believe is really needed, and what would be a major boost to supply, is to propose tax breaks or reduce some of the regulatory hurdles for homebuilders for market housing. To follow on that, I think Vancouver’s main issues are due to our municipal government, for too many years, being too scared to deal with the NIMBYers (Not In My Back Yard) on densification of prime neighbourhoods, and the provincial and federal government not being able to work with investors or home builders to alleviate the supply issues. Increase of Maximum Withdrawal from RRSP There was a $10,000 increase to the Home Buyers’ Plan (HBP) to a maximum of $35,000, effective immediately. The repayment for the HBP is still 15 years (straight line basis), with a 2-year grace period. Eitan’s Comments This is great - the HBP has not increased in 10 years. I welcome this move... but it’s not going to do much on the purchase affordability side. And, many of our first time home buyers are not using the full $25K from their RSPs...This increased withdrawal limit provides high income earners with a tax break on the additional $10K they would have otherwise NOT put into their RSPs. This does not increase any affordability.  Example: Take someone who has an income of $100,000. If that person had $50,000 in a down payment and put in $25,000 into their RSPs (to be taken out 90 days later), they would save about $8,160 in taxes. Now, if they put an extra $10,000, their savings would increase by $2,820. This is roughly a 28% return on that $10,000 in one year - not too shabby for those with high incomes. CMHC First-Time Homebuyer Incentive $1.25 billion has been earmarked over 3 years to provide 5% of the cost of an existing home (resale) and 10% of the price of a newly built home in a “shared equity CMHC mortgage.” This mortgage would be an interest-free and payment-free loan, however the money would have to be repaid upon sale of the property. This program's details have not been ironed out yet and more information is expected in the fall. Key Criteria: Down payment needs to be at least 5%, but less than 20%. Household income cannot be over $120,000 The mortgaged amount cannot be more than 4 times the buyers’ household income. The maximum purchase price is $500,000. Example: $450,000 purchase with 5% ($22,500) down payment. With this new incentive, a borrower could receive up to $45,000 (for a new home) through CMHC. Instead of taking out a $427,500 mortgage, only $382,500. This would lower the monthly mortgage bill from over $2,170 to less than $1,920. *This may increases affordability by a little over 10% for those who can use this. It is still extremely unclear if this will be the case because we don't know if the government will factor in the CMHC debt in their calculations. I suspect they won't, otherwise, there'll be no reason for this program. Eitan’s Comments: What. The. Heck?  There are wayyy too few details surrounding this. Most notably, it's unclear how homeowners will have to repay this so-called ‘shared mortgage!’ Will CMHC share in any capital gain (or loss), receiving 5% or 10% of the value of the home upon sale? Another question we have is will borrowers have CMHC fees on the total mortgaged amount or just on the mortgage provided by a lender? Also, this could be a "BC Home Partnership" loan all over again, in the sense that it was widely unused. We did only three BC Home Partnership loans in the time it was available. However, I think that once more information is presented in the fall, this could be a very nice addition to rural and smaller city communities. This is not helpful to buyers purchasing properties over $500,000... So what will this do? I think it’ll push properties that are under $500,000 up to that figure because it’ll increase borrowing ability. Thank you for reading! Please feel free to contact us if you have any questions. ### 2019 Finalist: Mortgage Broker of the Year Eitan Pinsky as Mortgage Broker of the Year Finalist I am extremely honoured to have been chosen as a finalist in this year's Canadian Mortgage Awards. A full list of the finalists can be found here. Winners and awards will be revealed at the awards gala on Friday, April 26th at The Liberty Grand Toronto. THANK YOU! I would like to thank, and give a huge shout out to the Pinsky Mortgages Team, our realtors and partners, and lastly, our amazing clients. We are so lucky to have such wonderful people to work with; I couldn't think of doing anything else! ### Co-working Spaces in Vancouver The days where the majority of the self-employed opt for cafes and kitchen tables as their office of choice could soon be behind us. With the rise of the gig economy over the last decade, a whole new industry has emerged to cater to these workers: co-working spaces. The idea behind co-working spaces is simple: members pay a fee (generally on a month-to-month basis) and can come and go to a company’s office spaces as they wish. There are usually a variety of membership options, which can range anywhere from $200 for a basic plan to upwards of $800 for a private office. Co-working spaces offer a number of benefits. For one, they’re a flexible option to commercial leases since they let members rent out only what they need. Co-working spaces are fully equipped—offering practical amenities like Wi-Fi, office supplies, printers and coffee. They also offer invaluable opportunities to connect with like-minded people—not to mention, they’re a good antidote to the loneliness often associated with independent work. Vancouver is no exception to this trend. With soaring lease rates and dwindling office vacancy rates, freelancers and entrepreneurs are increasingly turning to co-working spaces. So too are start-ups and even established companies. As a result of this demand, an array of new spaces have been popping up all across the city. Cool spaces From multinational companies like WeWork to more local independent spaces, here’s a look at some co-working spaces in Vancouver. WeWork WeWork Building  WeWork is the biggest player in the co-working space (it’s valued at $20 billion). The company launched in New York in 2010—but it wasn’t until 2017 that it entered the Vancouver market. It’s expansion since has been remarkable, though. By the end of 2018, there will be 5,315 desks across the city—up from 1,740 at the start of the year. That includes spaces at Three Bentall Centre, Two Bentall Centre, Grant Thornton Place and Main Alley tech campus. There’s also plans to turn the upper levels of the Hudson Bay’s flagship store into a 150,000 square foot office—as well as a just announced location at the Marine Gateway mixed-use complex. Spaces Spaces in Gastown The Amsterdam-based co-working company has another big presence in the city. They first opened at 151 West Hastings Street in Gastown in a 35,000 square foot space. They’re continuing their expansion with a space in the old Tom Lee Music Building on Granville Street and another one in the South Flatz tech building in False Creek Flats. They’ll also occupy about a third of the office floor at Westbank’s new office tower at 400 West Georgia Street—which, at 120,393 square feet, will be the second largest in North America. Other Players In an increasingly crowded market, a number of companies have found that targeting niche communities is the best way to be successful. Werklab in East Vancouver has carved out a reputation for health and wellness with perks like an onsite meditation room, yoga studio and aromatherapy bar. MakerLabs provides members with the tools to make almost anything, including 3D printers. A space called Nestworks is set to open next year to support working parents with an on-site child-care facility. There are also a number of spaces catered specifically to creatives, like the Aviary, L’Atelier and Creative Coworkers. Suite Genius, is also one of the favourite co-working spaces among the younger hipper crowd, with offices both in Mount Pleasant and Kitsilano.  WerkLab Transforming restaurants The popularity of shared spaces has led to another interesting trend: restaurants that turn into co-working spaces. One company has set out to make co-working even more affordable by renting out space in local restaurants during the hours they’re closed. For under $50 a month, FreeSpace members get access to a network of locations—like the Ellis in Kitsilano and Mamie Taylor’s in Chinatown. The spots are open during regular office hours—before dinner service starts. Users can enjoy WiFi along with complimentary coffee and tea. Members currently can’t order from the restaurant’s kitchens—but that’s something they’re aiming to change in the future as they continue to expand. Transforming Restaurants & Cafe A lasting trend? It seems that opinions are split on whether co-working spaces are a lasting trend or fad. With one of the lowest office vacancy rates in North America, it looks like these spaces could be here to stay in Vancouver. In fact, a new CRESA study predicts shared office space could account for as much as 20% of the overall office market in Canada within the next decade. We’ll be watching this trend closely. We hope you enjoy this article! Please feel free to reach out to us if you have any questions! ### The Township of Langley When people think of Langley, country farms, beautiful parklands and sprawling properties usually come to mind. The suburb may even conjure up images of wineries and horses (it is the horse capital of BC, after all). While rural beauty is a big part of its character, Langley also boasts a vibrant urban energy and robust economy. In fact, it’s consistently named one of the best places to work in the province—thanks to its central location, favourable lease rates, and large number of qualified professionals in the area. The last several years have seen a great deal of change in Langley. And it’s poised for an even greater transformation in the coming decades. Langley is one of the most rapidly growing municipalities in BC—with a population that’s expected to double by 2040. As a result, there’s been a huge increase to the number and variety of housing stock. Read on to discover Langley’s unique mix of small-town charm and big city benefits. The City of Langley Often referred to as one, there are actually two Langleys: the City of Langley and Township of Langley. Each one is governed by its own mayor and council. The City encompasses 10 square kilometres and has a population of over 25,000, while the Township covers 308 square kilometres and is home to over 115,000 residents. Boundaries The Township of Langley is located about 45-kilometres east of Vancouver in the Fraser Valley. It borders on Surrey to the west, the Fraser River to the north, Abbotsford to the east, and the U.S. border to the south. Langley Township Boundaries Demographics Population: 117,285 (+12.6% from 2011) 0-14 years: 21,58015-64: 77,14565+: 18,560Total private dwellings: 43,720Land area in square kilometres: 308.03Average age of population: 40.2Average household size: 2.8Average household income: $107,658 Source: 2016 Census Real estate Langley Real Estate Homebuyers priced out of Metro Vancouver have flocked to the Fraser Valley as an affordable housing alternative (it’s population jumped 12% in just five years). The benchmark price for a single-family detached home in the REGBV currently sits at $1,500,100, while the FVREB benchmark price is $976,200. In Langley specifically, the benchmark price of a detached home is $1,008,600, a townhouse is $496,800 and an apartment is $415,500. Described as a ‘community of communities,’ Langley is home to six distinct areas. Aldergrove is a small community that’s mostly comprised of agricultural land—and home to the Greater Vancouver Zoo, Aldergrove Regional Park and Twilight Drive-In. Brookswood is a residential community comprised of mostly single-family homes. In addition to its abundance of parkland and natural spaces, it’s also the location of the George Preston Recreation Centre, BMX bike track, and plenty of shops and eateries. Known as the birthplace of BC, Fort Langley is a National Historic Site that’s popular with tourists, shoppers and diners. Murrayville is known as the traditional civic core and home to the Langley Memorial Hospital, Langley RCMP Main Detachment and Langley Regional Airport. Walnut Grove is a more established and developed residential neighbourhood that’s home to Langley’s largest swimming pool, movie theatres, and shops. Willoughby is modern, fast-growing residential communities—with a mixture of burgeoning new neighbourhoods and undeveloped rural land. Neighbourhoods of Langley While historically mostly a rural community, the influx of residents in the last decade has seen a transformation in the housing stock in Langley. What was once almost entirely single-family housing has evolved to a unique mix—with condos and townhouses constantly springing up. Among the notable new developments is Lily Terrace, which is billed as Fraser Valley’s first luxury condominium development. The development features 24 residential units and prices starting at a whopping $1 million. Alexander Square in Willoughby is a new master-planned community that will add two residential buildings to Willoughby Town Centre. Lily Terrace- New Development Langley  An economic powerhouse From major international corporations to agricultural production, Langley is one of the fastest growing municipalities in the Lower Mainland. Business licenses have steadily climbed over the past decade and today there are some 7,000 businesses operating in the area. For many years now, Langley has been named by BCBusiness as one of the Best Cities for Work. Langley Farm Scenes Some of the biggest industries that operate in Langley include manufacturing, agriculture, construction, retail and wholesale, and transportation. With its diverse locations and landscapes, Langley is also a hotspot for film production. Did you know? 75% of the township is located within the Agricultural Land Reserve. Home to more farms and farmed area than any other area in Metro Vancouver, Langley produces everything from livestock to fruits and vegetables. Things to do South Langley is home to the massive 535-hectare Campbell Valley Park—which offers an extensive network of trails, historic buildings and a popular equestrian centre. And to the North, is the national historic site of Fort Langley—a popular tourist destination along the banks of the Fraser River featuring a variety of museums, stores and more that detail its rich history. There’s also plenty of vineyards scattered between, with a number of companies offering wine tours in the area. Campbell Valley Park Throughout the year, Langley hosts festivals dedicated to everything from cranberries to wine. They include the Fort Langley May Day Fair and Parade, Brigade Days, Fort Langley Food Truck Festival, Fort Langley Cranberry Festival (draws over 50,000 visitors every October) and the Fraser Valley Wine Festival. Education There are 45 schools within Langley’s School District. Langley is also home to two universities, Trinity Western University and Kwantlen Polytechnic University. Getting around Langley boasts a highly strategic location—it’s intersected by four highways and directly linked to the rest of Canada by the Trans-Canada Highway. Four U.S. border crossings are within a 20-minute drive and a small regional airport offers direct flights to Vancouver and Vancouver Island by float plane. Surrey’s city council also recently voted to drop the light rail transit (LRT) project and will replace it with a new SkyTrain line to Surrey. The plan is to extend the track from King George Station to Langley Centre along the Fraser Highway. But the amount of time this will take is so far unclear. We hope you enjoyed reading about Langley! Please reach out to us if you have any questions. ### Reimagining Granville Island Four decades ago, Granville Island was nothing more than a gritty and neglected industrial area. In the 1970s, the federal government invested $20-million to dramatically improve the 38-acre chunk of land—transforming it into a bustling, multi-use public space that’s now home to hundreds of retail shops, artist spaces, a market and more. It’s an extraordinary success story in urban development. And now, it’s once again time to revitalize the island. While much of Vancouver has seen tremendous shifts over the years brought on by population growth, economic changes, immigration and so on, Granville Island has seen very few. Traffic congestion and increased competition from upscale supermarkets and farmers’ markets have put pressure on the island. So has the relocation of its 37-year tenant, Emily Carr University of Art and Design, to a new campus in the False Creek Flats—which freed up the equivalent of a quarter of the island’s available space. The Canadian Mortgage and Housing Corporation (CMHC)—the crown corporation that’s managed the island since 1973—rolled out a plan for the future of Granville Island over the next 25 years. We’ve sifted through the proposal (check out the full version here)—and put together some of the most transformative changes that could be coming. The proposal highlights four strategies for Granville Island’s renaissance. Improve accessExpand the public market and create a market districtEmbrace arts and innovationRestore and sustain the public realm Granville Street Bridge Elevator Getting to Granville Island can be tricky. Since it’s poorly served by transit (just one bus route serves the island), most people drive—which causes a lot of traffic congestion. Right above the Island, however, a city bus passes every two minutes on the Granville Street Bridge. A new elevator has been proposed that would increase the number of visitors to the Island and move away from cars as the primary mode of travel. It would connect a bus stop on the Granville Bridge to the heart of the Island (near the covered parking lots). There are also design concepts for a tower feature that would offer a viewing platform above the bridge. With the elevator, it’s estimated that about 200,000 additional people would be within a 30-minute trip to Granville Island. Next steps include conducting technical engineering and financial studies to assess the viability of the elevator. A bridge across Alder Bay To make it easier for pedestrians and cyclists using the seawall to access Granville Island, a new bridge across Alder Bay has been proposed. The bridge would provide improved access and visibility to the quieter east end of the Island—distributing visitors more broadly. Expand the public market The biggest draw to Granville Island is the Public Market. But research shows that a lot of people think that it lacks high quality foods, doesn’t offer enough local and sustainable products, and has a shortage of public seating. The new plan aims to re-establish the Island into one of North America’s leading food and restaurant destinations. For starters, it would expand the public market floor space by 20%. That could be achieved by adding a second floor, expanding the building into the existing courtyard facing False Creek, and integrating the Revue Stage space into the market. The plan says that expanding the Market will allow for a greater variety of offerings, including more culturally diverse foods, cooking workshops, special events, and night-time activity. Did you know? Granville Island’s mix of artisans, shops and restaurants draw an estimated $10-million visitors a year. Of those visitors, 80% are locals. A market district The plan also aims to create a wider market district that would be linked to the new and enhanced public spaces at the centre of the Island. One example of that is Popina Canteen, a new outdoor restaurant created by four Vancouver chefs. Built in old shipping containers, it begins the transformation of the area around the Public Market into a larger Market District. A leading centre for arts With the relocation of Emily Carr, a new Arts and Innovation Hub would be established in the vacant north building. The Hub will be a new destination on Granville Island with a mix of arts-focused and innovation organizations as well as restaurants and services in a 120,000-square-foot space. So far, there’s been a “call for ideas” among creative professionals on how this building should be used. The opening of the hub is slated for 2021. Meanwhile, Arts Umbrella—a non-profit that provides arts education for children and youth—will be moving into the former Emily Carr University South Building in 2019. When it does, it will offer seven dance studios, five theatre and music studios, eight visual and media arts studios, a 160-seat professional theatre, a publicly accessible exhibition gallery, and new workshop spaces. A central plaza Granville Island could see a new central plaza at the heart of the Island, named “The Chain & Forge” after the Canadian Chain & Forge Factory that operated on this site during its industrial era. Located under the bridge, from July to September the plaza would become a gathering place to enhance social connections through diverse outdoor programming, temporary structures, installations, pop-ups and workshops. Enhancing the waterfront There’s also hopes to enhance the waterfront as a public space by adding floating platforms, creating a Fisherman’s Wharf for fresh and prepared seafood, and a man-made urban beach in Alder Bay. What’s next? The next steps are to find out if the construction projects are structurally and financially possible—so there’s no word yet on if or when they’ll become a reality. But even now, we are seeing changes from the CMHC. For instance, pay parking will be implemented across the entire island as of June 1, 2019. The CMHC believes pay parking is needed to help reduce traffic congestion, as drivers often circle the island looking for a free parking spot. Stay tuned for more! ### Seymour and Deep Cove The North Shore is made up of several different communities. Seymour, with its relaxed vibe, charming shops and restaurants and, of course, endless list of recreational activities, has long appealed to families and outdoorsy types. Residents have access to excellent skiing, hiking, mountain biking, kayaking and paddle boarding all in their backyard. Seymour Views Boundaries The area of Seymour lies east of the City of North Vancouver. It’s defined by Seymour River and its canyon on the west, Deep Cove to the east, Burrard Inlet to the south, and the forests of Seymour Mountain to the north. The community encompasses Riverside, Seymour Heights, Blueridge, McCartney Woods, Windridge, Windsor Park, Northlands, Parkway, Parkgate, Indian River and Roche Point neighbourhoods. Seymour Boundaries Housing Seymour is a highly-residential, low-density neighbourhood. Home ownership in the community is high and average family income in higher than in the District as a whole. As such, it’s mostly comprised of expensive single-family homes—often surrounded by trees, forested parks or located along the waterfront. When it comes to diversity in housing choices, Seymour falls short. The community lacks townhomes, condos and more affordable forms of housing that would meet the needs of those wanting to downsize, the missing middle and young families. One new development is Seymour Village, a master-planned community from Takaya Developments and the Aquilini Group. Designed with contemporary, West Coast inspired architecture, Seymour Village features three and four bedroom townhomes that range in size from 1,851 to 2,043 square feet. Seymour Village – New Development What to do The biggest draw to the community is Mount Seymour, a family-owned local mountain. Mount Seymour offers skiing and snowboarding in the winter months within an 81-hectare controlled recreation area—and 14 hiking trails of varying lengths and difficulty for the rest of the year. With its forests and snowy slopes, Mount Seymour is often used as a filming location, like the Twilight Saga and Stargate SG-1. The area also boasts two major golf courses: Northlands and Seymour Golf and Country Club. Did you know? During the 1930s, people started to build cabins on Mount Seymour—at one point there were about 200 on the mountain! Stays in the cabins would cost 10 cents per person during the week or 25 cents on weekends.  Getting around The North Shore is known as being a major traffic hotspots in Vancouver. Most people rely on their car to get to shops and services, resulting in congestion and delays on roads and bridges that are heavily used—including Dollarton Highway and Mount Seymour Parkway. In January of 2018, a steering committee made up of elected officials and a TransLink representative was formed to lead the Integrated North Shore Transportation Planning Project. It founds that challenges like the lack of affordable housing to support a local workforce, abundance of single-family residential areas, a constrained road network, and capacity limitations imposed by the two bridges create unique transportation impacts for the North Shore. Deep Cove Amazing Views of Deep Cove Located at the foot of Mount Seymour, Deep Cove is a picturesque waterfront community with an irresistible laid-back vibe. Like Seymour, Deep Cove has it all: forests, mountains, the oceans, a beach, hiking, stunning views, and a wide selection of charming shop fronts. Deep Cove’s only downside is its popularity in the summer months—when people from surrounding areas flock to the community. Boundaries Deep Cove is the easternmost neighbourhood in the District of North Vancouver. It’s bounded by the Seymour community to the west, the waters of Burrard Inlet and Indian Arm, and the wilderness forests of the North Shore mountains. Deep Cove Boundaries Real estate Deep Cove was once a popular summer resort location for Vancouver residents in the 1910s. Today, the housing serves as a reminder of this history. Most of the real estate market in Deep Cove is made up of detached houses—usually in the form of older cottages, character homes and quaint bungalows. There are also many contemporary luxury waterfront properties in the area, boasting spectacular views. While the condo and townhouse market is limited, some can be found near the heart of the village. What to do Deep Cove Village Deep Cove has a unique blend of cultural and recreational activities—a theatre, art gallery and cultural centre are located on its main street among the shops, cafes and restaurants. A few favourites among locals and visitors alike are Honey Doughnuts, Café Orso and Arms Reach Bistro. Quarry Rock is one of the city’s most popular hiking trails. The downside is that the area becomes flooded with tourists and visitors the summer months—a problem so acute that new measures were added to restrict the number of people who can hike it at a given time. Park Rangers are also on site all summer, monitoring parking availability and trail access, and tweeting regular status updates. The tranquil waters of the Indian Arm—a 18-kilometre fjord that extends north from Burrard inlet in Vancouver—make Deep Cove a popular place for boating, kayaking, canoeing and scuba diving. Did you know? Deep Cove maintains a no-plastics policy. In May of 2018, it officially said goodbye to plastic straws—becoming the first city community in Metro Vancouver to do so. Getting around Deep Cove, at the farthest eastern end of North Vancouver, is a bit out of the way for getting around. However buses do run regularly in and out of the community, and Highway One is just 10-minutes away. We hope you enjoyed this snapshot of Seymour & Deep Cove! Please reach out to us if you have any questions. ### Revitalizing the False Creek Flats Less than a kilometre from downtown Vancouver, you’ll find a 450-acre tract of land that’s traditionally been known for rail lines, warehouses and industrial operations: the False Creek Flats. The area—which is bounded by Main street to the west, Prior Street to the north, Clark Drive to the east, and Great Northern Way to the south—has been undergoing a huge transformation. A little while back, we wrote a post highlighting some of the major changes underway in the Flats—among them, a new campus for Emily Carr, a future home for St. Paul’s Hospital, and a condo community. There’s been a lot happening since then, so we’ve put together the latest on what’s ahead for the neighbourhood. Businesses Today, the Flats is home to over 600 businesses that employ 8,000 people—ranging from artists and brewers to tech start-ups and car dealers. As several new office buildings are in the works in the Flats, we’ll see many more in the coming years. One of the most anticipated buildings—which opened its doors in the spring—is South Flatz at 565 Great Northern Way. Developed by Low Tide Properties and PCI Developments (and designed by Perkins + Will), it’s a 160,000 square foot, 7-storey spaced aimed at digital media and creative sectors. It was purchased in 2016 for $34.6 million, or $430 per square foot. Tenants include Finning International, Blackbird Interactive Game Studio, Spaces and Samsung. A very cool new restaurant pavilion building (which will be occupied by Nemesis Coffee) is also being developed next to it that takes inspiration from overlapping flower petals. This is the first multi-tenant office building in the area in 18 years. And it’s the first of more than 1.9 million square feet planned to be built in the Flats by this development team alone—that’s the equivalent of almost a tenth of the current space in downtown Vancouver. Other projects include renovating a 164,000 square foot research building at 887 Great Northern Way and constructing a 400,000 office building at 901 Great Northern Way. Another important office building has been proposed for the northeast corner of Terminal Avenue and Station Street—at the existing site of Party Bazaar next to Pacific Central Station. Rize Alliance has submitted a development application to the City to redevelop the site at 1296 Station Street into a 13-storey office, 268,000 square foot space. The building, which features an irregular crystal shape, is expected to be completed mid-2020. Did you know? More than 50 per cent of the Flats land is owned by the City of Vancouver and rail companies. Housing The False Creek Flats has been considered Vancouver’s final development frontier. Which is why a lot of developers feel that the plan fell short when it comes to housing—creating only 1,400 new homes over 30 years. That’s extremely limited, especially as the area has the potential to add some 20,000 new jobs over that same time period. About 20% of that will be secured market rental housing (generally for households between $60-150,000/year). The plan includes provisions to target approximately 20% of new housing growth as non-market housing. The balance will be market condominiums. Hospital False Creek Flats has been named the site of the new St. Paul’s Hospital. The formal rezoning application for the new St. Paul’s Hospital campus in the False Creek Flats has been filed, which provides a more detailed glimpse into what’s expected for the 18.4-acre site. It will include: A new hospital and integrated health care campusCommercial, office, hotel, institutional use providing a variety of health-related support functionsSecured rental residential to meet housing needs of employees, physicians, students and researchersRetail and commercial space“All-suite” hotel to serve health-related visitorsTwo child care facilities The new campus will be built in phases, with the hospital and new street network completed first. It’s expected to be completed by 2024. Transportation With the Millennium Line Broadway extension, the Flats will be home to a future SkyTrain station. It’ll be located at the corner of Thornton Street and Great Northern Way—right next to Emily Carr and PCIs first new building. The next steps are being taken by the City of Vancouver on its long-held proposal to build a new major arterial road through the False Creek Flats from the eastern edge of downtown Vancouver to Clark Drive. A community panel of randomly selected residents and business owners has been created to begin the next phase of public consultation for the project. ### Interest Rates Should Be Decreasing... It’s December 2018 and Interest Rates should be Decreasing.We also address some Stress Test Rumours. Originally written yesterday and sent to our realtor, financial planner, and lawyer partners. Current Interest Rates and Rate Commentary The vast majority of mortgage brokers are advising their clients to take the variable rate. However, at Pinsky Mortgages, we know that every situation is different, so we’re about 50/50 variable vs fixed. In many cases though, the fixed may be a better choice if the rates can be at 3.54% or better (insured and insurable). However, for most uninsurable mortgages (read 30 years amortization, $1M+ homes, or rental properties), the variable is generally the better choice. Interest rates will continue to increase on the variable side by at least 1 increase (0.25%) over the next year. I suspect there will be two increases in 2019. However, these increases are there “so we can lower the rates again.” The Bank of Canada, not so secretly, stated that the increase in rates is just there so they can decrease the rates when needed. It’s very possible that we’ll be heading into a period of economic stagnation or even a recession so the ability to lower rates and promote more borrowing is something that government wants to have in their back pocket. But, the reason why the Bank of Canada wants to continue to increase rates is to weaken inflationary pressures due to the current high economic growth and record low unemployment. Winter and Spring Interest Rates: You may have heard that the bond market rates have decreased significantly over the past month. Please see the graph below: Generally, when government bond rates decrease, mortgage rates follow suit. However, the reason why interest rates have NOT been dropping is because banks/lenders are padding their pockets for a spring market. They are making more on the spreads at this time. This happens every year! So they are making more money now in order to make less in the spring. Lenders fight for market share during the spring market and decrease their rates across the board. If the government bonds stay low, expect to see a decrease in the fixed rates come end of January, mid February. Even without bonds staying so low, a competitive spring market is good for borrowers and their pocket books. This has been the case for as long as I’ve been a mortgage broker. Stress Test Rumours and Speculation Several people called me and asked me if I heard anything about the Stress Test going away. No, there has been no chatter on taking away the Stress Test. The Federal Liberals implemented the stress test and in order for them to take it away, it would be admitting they were wrong; that’s not going to happen. A little background: The Stress Test was thought up when fixed rates were around 2.50%. The stress test would require lenders to qualify their clients at the qualification rate, at the time at 4.64%, or 2% higher than the contract mortgage rate. At that time, without the stress test, an $80,000 a year income could get a home worth $550,000 with 10% down. With the stress test, we’d be looking at a home worth $450,000 with 10% down. This is roughly a 22% decrease in affordability. Now, when rates are at 3.89%, a $80,000/year income can purchase a $395,0000 property with 10% down. This is a 12% decrease in affordability affordability from the original stress test and around 29% decrease from the qualification two years ago. We originally went from a qualification rate of 2.5% to 4.64% to 5.89%, all in the span of two years. The government succeeded in slowing down the growth of mortgage lending in Canada. In its analysis of data from credit agency Equifax, CMHC stated that Q2 2018 had 205,000 new mortgages, which was 11.9% lower than the same quarter last year. *As an side, during the last three years CMHC has also increased their fees for borrowers from 3.15% to 4.0% on 90.01% to 95% financing and 2.40% to 3.10% at 85.01% to 90%. CMHC is not trying to be solvent or healthy, they are just trying to make more money. CMHC adds billions of dollars to the government coffers every year. CMHC is extra tax revenue… they do not need to have such high fees! So what’s coming next? The government does understand that there is a problem here. Although they will not get rid of the stress test, I have heard that possible remedies may be: Decrease the 2% stress test to a lower amount.Allow 30 year amortized mortgages on insured purchases (remember that 12 years ago we were allowed 40 year amortization).There is a small possibility that transfers of mortgages from one institution to another will not require the stress test. This is due to clients being approved for a certain amount a couple years ago and now not being able to requalify for the same amount (due to the stress test). This creates a type of “prison” for the client; they must stick with their lender even if their current lender’s rates are unattractive or arbitrarily higher than the rest. Or, if their current lender does not renew their mortgage, there is sure to be fire-sales or 2nd tier mortgages provided that will be even worse for that family’s finances ### Vancouver's Duplex Rules and a New Mayor In a move to increase Vancouver’s supply of housing, City Council recently approved a new zoning policy that permits duplexes in 99% of single-family neighbourhoods. That adds up to about 67,300 of the 68,000 lots in Vancouver – or, 57% of its land mass. The policy change came after two days of public hearings in September that resulted in a 7-4 vote. (As an aside, as recently as lat week, some on Council want to vote to reconsider this new duplex bylaw) It’s one of the first big initiatives from the City’s Making Room Housing Program. Launched in May 2018, it was created to provide more housing choice within neighbourhoods for families, downsizing seniors, and others seeking housing that sits in the ‘missing middle’ between single-family homes and higher density housing. The new zoning is believed to be a first for Canada. However, in the U.S., both Portland and Minneapolis have also recently taken steps to increase density in single-family neighbourhoods by voting to allow duplexes and triplexes. Here, we’ve broken down what the change means. The current situation In Vancouver, there are a lot of high-density buildings (apartment towers), as well as a large portion of the city that’s zoned for single-family housing. Middle-class families who can’t afford to buy a detached home but need more space than a condo have very limited options. The proposed solution The rezoning aims to fill the gap between the out-of-reach detached houses and condos and townhomes that are often too small by allowing the 67,000+ lots currently zoned for single-family housing to be rebuilt as duplexes. With the old system, single-family zones allowed 3 units on one single-family lot: a house with a secondary suite and a laneway house. Now, it’s legal to build as many as 4 housing units: each duplex can now have its own secondary suite. You still can’t build a duplex with a laneway house, though. Duplexes were already permitted in neighbourhoods like Kitsilano, Strathcona, and Grandview Woodland. The new policy expands them to areas like Dunbar, Kerrisdale, and West Point Grey. The one area that’s excluded is the single-family areas located between West 37th and West 49thAvenues, from Granville to Cypress Streets, as it’s mostly comprised of large, irregular lots with a significant stock of character homes. What is a duplex? It’s a single home that’s been divided in two. Each unit has its own kitchen, bedrooms, bathrooms and separate entrances. They can be placed side by side, or on top of another—depending on the layout. The likely impact Most supporters of the new zoning agree that allowing duplexes will only lead to modest change at best. Since the cost of a duplex in Vancouver still ranges from $1 to $2 million, it won’t do much in terms of affordability. Critics argue it will ruin the character of neighbourhoods, diminish green space, and lead to parking problems. Some also say single-family homes will be targeted by speculators, which could increase home prices. While the impact of the new zoning changes remains to be seen, it’s pretty clear that the new duplex rules are a small step to address a huge housing crisis. You might remember that Vancouver took a similar step in 2009 by allowing laneway units to be built on most single-family lots. Only 3,000 have actually been built since then. The move was one of Mayor Gregor Robertson’s last major decisions before he leaves office. Mayor-elect Kennedy Stewart says the decision to rezone single-family neighbourhoods to allow duplexes should have been left for the next council to decide. But he does believe duplexes bring more affordable options for first-time homebuyers while retaining neighbourhood character—and intends to work with the decision. What else is Stewart proposing beyond duplexes? Take a look at our summary of his plan to address housing affordability below. Vancouver’s new mayor Former NDP MP Kennedy Stewart has been elected mayor of Vancouver—becoming the city’s first Independent mayor in more than 30 years. Like the rest of the candidates, Stewart made housing affordability his primary campaign focus. Specifically, he promised to build 85,000 units of nonprofit, rental and marketing housing over the next 10 years. Here’s a snapshot of what Stewart plans to get started on when he’s sworn in on November 5. More affordable housing 25,000 new affordable rentals, run by non-profits on city-owned land, will be geared toward households earning under $80,000 a year.35,000 new condominiums, coach houses and townhouses for purchase.To protect 6,000 cooperative housing units by renewing city-held leases.More opportunities for homeowners to develop their own properties—including expediting the construction of triplexes and fourplexes on standard lots and removing barriers to converting large homes into multi-family residences.A faster permitting process though increased staff and less red tape. Fighting speculation Triple the empty homes tax—which currently stands at 1% of a property’s assessed value.Protect between one-third to one-half of all new homes from foreign speculation.Bring in tough new conflict of interest rules and a lobbyist registry. Standing up for renters 25,000 new purpose-built rental apartments and laneway homes.Creation of a renters advocate office to make sure tenants are treated fairly and to stop renovictions.To use new rental zoning powers to build secure rental housing developments and renovations. ### Cannabis Legalization and Your Home On Wednesday, October 17, Canada will legalize marijuana—becoming the second country in the world to do so. This has a host of implications for countless industries. For Canadian homeowners, it means they will be able to grow up to 4 plants per residence for personal use. But that could have its pitfalls.  That’s because lenders currently HATE if a property has been used for growth of cannabis. If there is a property that has been a “grow-op” for even ONE plant, it may become blacklisted and the property becomes very difficult to mortgage. Lenders are also required to tell CMHC and the insurance companies. However, with the impending legalization, I think there are going to be some homeowners (and renters) who will take advantage of the legality of growing their own pot. So far, all lenders and insurers have come out to say that they are still against grow-ops and they have not, and are not looking to, change their policies. So, what does this mean? It’s best to not grow any cannabis yet. We’re far too early in the game to know what the effects of future financing will be and I would wait for several months before lenders change their policies.Landlords should be extra vigilant and remind their tenants not to grow cannabis! The law (Bill 30) states that any lease entered into before October 17, 2018 ALREADY prohibits growth of cannabis in a home. If someone enters into a lease AFTER October 17, 2018, the lease has to specifically state that the tenant cannot grow cannabis. Here’s a good rundown from a lawyer I saw online and from LandlordBC. If you have any questions regarding the above article or would like to speak to one of Vancouver’s top mortgage brokers, please don’t hesitate to contact me. ### Insured, Insurable, and Uninsurable Mortgages Mortgage Interest Rate Tiers Since we know that lenders can back-end insure our mortgages (please read our Mortgage Insurance Market and Wholesale Lenders article first), and that this specifically makes these mortgage investments more attractive to investors, what does it mean for borrowers (every day people like you and me)? To recap, any mortgage that is inexpensive for a wholesale lender to get financing for allows the lender to pass on savings to their clients, meaning mortgages that are insured get the best rates! An insured mortgage is where a borrower pays the mortgage default insurance because they have less than 20% down payment and is required on all mortgages where the down payment is less than 20%. But, lenders can also pay for insurance for their client! An “insurable” mortgage is one where the clients puts 20% down (or more), and their mortgage is approved as though a client is paying for insurance, but the actual insurance is paid for by the lender. Rates for insurable mortgages are generally very similar to insured mortgages. An “uninsurable” mortgage is one where mortgage insurance is not available. The graph below outlines what type of mortgages are insured, insurable or uninsurable. Mortgage interest rate tiers for insured, insurable, and uninsurable mortgages. So what does this all mean for you, the borrower? If your mortgage is insurable, you may be able to get the best rates. What is interesting to note is that if you have a mortgage that was previously uninsured, your current lender cannot insure your mortgage but your mortgage may be insurable if you transfer to a new lender – this is where our opportunity lies! As an aside, if your mortgage was previously “insured,” and you paid for mortgage insurance, you will also be offered the best rates upon transfer or renewal. Please call us for your Vancouver mortgage needs. Notwithstanding, we can help anyone with their home financing for a mortgage in the Lower Mainland and all over Canada, for that matter. ### July 10th Interest Rate Commentary July Rate Hike is Likely But Then Pause…? The Bank of Canada will meet on Wednesday (July 11th) to decide on its latest move on interest rates next week and many are expecting an increase from 1.25% to 1.50%. But once July’s hike is done, things become less clear as the economy is showing some mixed signals. *As an aside, this increase will change a lender’s prime rate from 3.45% to 3.7%. This will increase variable rate mortgages and home equity lines of credit by 0.25%. CIBC and TD’s chief economists think that this will be the last rate hike in a while. CIBC: “That will be the last piece of the puzzle for a Bank of Canada rate hike in July, but we’re also of the view that economic growth will moderate enough after Q2 to force another extended pause on rates.”TD: “Given a more cautious outlook and ongoing threat of escalating trade wars, we suspect it will be some time before we see another hike.” Eitan’s Opinion Here are some facts that the Bank of Canada has to contend with: -interest rates has been low for a very long time,-the economy is doing better over and the government has to increase rates to avoid higher inflation, but… -for every dollar Canadians make in income, they owe $1.70 in debt,-every time the BoC raises interest rates, it hurts Canadians,-household debt is quite large due to all the mortgages and home equity lines of credit we’ve been giving out,-real estate is 20% of Canadian GDP,-housing starts are slowing down. Once people stop building as much, the economy will suffer, and-Red Flag – Equifax reported that they expect more delinquencies in the future as rates rise. Based on all of these facts, we do know that the rates are going to increase. However, the government is deathly afraid of increasing the rates too much or too quickly… Also, an increase in the interest rates or a decrease in the demand for housing could send the Canadian economy, whose single largest driver is real estate, into a downward spiral To dig even further, please see the graph below: Mortgage Rates for Bank of Canada Prime Rate We see above that the interest rates from the BoC were around 3.5% from beginning 2000s till 2008. This was during a large real estate boom in the US and Canada. However, quantitative easing (making sure the economy gets back on track) and low rates were implemented after the 2008 meltdown, to stimulate borrowing. What happened was that mortgage amounts kept increasing because a borrower’s income could increasingly qualify for larger mortgages. In 2008, borrowers could qualify at their contract rate of 4.5%, whereas two years ago borrowers qualified at 2.49%. This was about a 25% increase in affordability. Now however, we’re back up to 5.34%. What we’re seeing now is a negative effect of boosting the economy; we’re seeing the consequences of too much borrowing and the potential of higher rates creating mortgage defaults. For all of this, I’m going to call it… I do not see an interest rate rise of more than 1.0% over the next five years. We just won’t be able to absorb this type of increase.  Please don’t hesitate to contact me if you have any questions or comments! ### All About Squamish Squamish has carved out quite a reputation for itself. Over the years, it’s transformed from a logging town, to a pit stop for gas on the way to Whistler, to what is now one of the premiere outdoor destinations in North America. Beautiful Views in Squamish British Columbia A Rich History Squamish was originally inhabited by the Squohomish, a group of Central Coast Salish. The first contact between the Squamish Nation and European explorers was in 1792, when captain Vancouver sailed up the Howe Sound to trade. But it wasn’t until 1888 that the first permanent settlers of European descent came. During those years, a community started to thrive around logging, agriculture and mining. The first school was built in 1893 and the first hotel in 1902. Over the following years, many other settlers relocated to Squamish. By the early 20th century, forestry had surpassed agriculture as the primary economic activity. Squamish was incorporated as a village in 1948 and as a district municipality in 1964. Geographically, however, it remained isolated. That changed dramatically when a railway link to Vancouver was completed in 1956. Two years later, the Sea View (now called Sea to Sky) highway was constructed. In the late 1960s, the growth of the ski resort at Whistler increased the number of people travelling up the highway. Today, Squamish has gained fame as a world-class outdoor adventure hub. Demographics Population (2016): 17,587*Squamish has one of the fastest growing population rates in BC!Average age: 37.4*About 74% of the population is under the age of 40Total occupied private dwellings: 6,490Median household income: $88,366*26% higher than the BC median household income. Activities Squamish calls itself the “outdoor recreation capital of Canada” – and for good reason. Nestled between mountains and the ocean, the city offers a never-ending list of activities – including mountain biking, rock climbing, kite boarding, whitewater rafting, golfing, hiking and snowsports. It truly is BC’s year-round playground. Adding to its appeal, the Sea to Sky gondola opened in 2014. The $22-million facility provides access to backcountry trails and breathtaking vistas. A ten-minute trip takes visitors up a two-kilometer ride to the top of Howe Sound, 886 meters above sea level. Sea to Sky Gondola Squamish Many people usually associate food in Squamish with the fast-food restaurants that dot the highway. But aside from the great outdoors, Squamish also has a flourishing restaurant scene. Over the last few years, a slew of new restaurants have sprung up, like Salted Vine Kitchen & Bar and Sushi Sen. Squamish is also known for its great craft beer scene. FUN FACT: Squamish was named one of NY Times’ 52 Places to Go in 2015! Read more here. Real Estate With pricey Vancouver real estate, Squamish has lured many city dwellers over the years. But, because of all the aforementioned activities and great lifestyle, it’s popularity has caught on. Squamish no longer offers the affordable prices it used to. The January 2018 MLS Home Price Index shows that the average detached house costs $1,003,000, an average townhouse $786,900 and an average apartment costs $490,400. Squamish Real Estate Housing 2018 Schools With a range of schools, Squamish is becoming a great place to raise a family. In the public school system, there are six elementary schools, a middle school and a high school. There are also two private elementary schools and a private high school. Squamish also now boasts two post-secondary schools. Quest University, an independent, not-for-profit university opened in 2007 and Capilano College has a campus in Squamish. Business Squamish has transformed from a small pulp-mill forestry town to a thriving business, recreation and arts community. Employment in Squamish is dominated by construction, retail and hospitality. Outdoor sports also contribute to the economy. Squamish was recently ranked number one by BC Business as the best place to work in BC.  We hope you enjoyed this snapshot of Squamish! Please reach out to us if you have any questions. ### Vancouver’s Empty Storefronts Housing prices have dominated conversations in our city – and rightly so. We have some of the most overpriced real estate in the world, which has caused many people to be pushed out of Vancouver. But it’s not just residents who are struggling with affordability issues: retail owners are too. Stroll around streets like Robson, South Granville and West Fourth and you’ll no doubt see numerous “For lease” signs. A wave of closures Over the last few years, a slew of retail shops around the city have found themselves in troubled waters. Take Main Street, for example. The Foundation, one of the most popular vegetarian restaurants in the city, recently closed after 15 years in business. Why would such a successful eatery go out of business? Skyrocketing rent. When the restaurant opened in 2002 (there were just a handful of other restaurants on the street at the time), rent was $1,500 a month. The Mount Pleasant neighbourhood has dramatically changed since then – and so too have prices. It’s believed the rate for a new lease would have been around $8,000 a month. A nearby boutique, Twigg & Hottie, recently closed after 13 years – which the owner described as a result of homeowners and renters no longer having the disposable incomes they used to. The Foundation- Vancouver’s Best Vegetarian Restaurant Closed Down It’s doors Permanently in 2017 Main Street isn’t alone. On Commercial Drive, the housewares store Wonderbucks closed its doors because its rent was going to double to around $25,000. The owner had been at that location for more than 18 years and had become a staple in the neighbourhood. And over at Cambie Village, the successful Pronto Restaurant announced it was closing because of a “renoviction.” In the West End, Chocolate Mousse, a kitchenware store that’s been in business for over 30 years, announced it’s closing in 2019 because their tax bill nearly doubled to $130,000, which exceeds their rent. That increase is based on the value of the property, which has grown exponentially to $52 million in 2017, from $16 million in 2016. The Cardero Grocery corner store closed a few months ago after more than 75 years as a fixture of the community because a new landlord declined to renew the store’s lease. It is one of two detached homes on a lot that was recently listed for sale for $3.8 million. Cardero Grocery Store on Commercial Drive Vancouver Robson Street, what was once one of the most sought-after locations for retail, has seen many big-name retailers move out – including Chapters, French Connection, Mexx, Starbucks and the Canucks store. Italian Kitchen on Alberni Street had to move locations because its monthly rent of $35,000 was increased to nearly $100,000 (the restaurant was also paying an estimated $150,000 per year in taxes). On nearby Denman Street, numerous retail spaces sit empty – which has led to a 10% vacancy rate on the street, which is substantial when compared to a healthy rate of about 3 to 4%. One of its victims is Dover Arms Pub, which closed down last year after 40 years in business because of spiraling rents. The stories go on. Street level commercial vacancies in downtown Vancouver as of first week of January 2018 (source: Downtown Vancouver BIA) High values fuel gas station closures A number of gas stations have also been shutting down. But for them, it’s to capitalize on the red-hot real estate market. Last year, the Esso at the corner of Burrard and Davie was put up for sale. That might not sound like a big deal – except for the fact that it was the last remaining gas station in the downtown core, which makes Vancouver the first big city in Canada to lack gas stations downtown. Esso on Burrard and Davie Street – Downtown Vancouver No asking price was listed, but it’ll most likely get tens of millions of dollars – like Chevron did with the sale of its West Georgia station for a staggering $72 million. A spokesperson for Chevron said the gas station was one of the highest performing in the whole province of British Columbia – but Vancouver’s sky-high real estate prices enticed them to sell. What’s causing the trend? There are a host of factors. When it comes to the high rate of store vacancies, the two biggest culprits are soaring rents and extraordinarily high taxes. Many independent businesses in Vancouver are on triple-net leases – in which the tenant is responsible not only for paying the landlord the rent, but also maintenance fees and property taxes. And it’s that last one that’s been taking a huge toll on businesses. That’s because BC Assessment assesses property value based on “a property’s highest and best use.” In many cases, that can mean increased residential-use on the same property. With these extreme costs, independent shop owners often can’t afford to properly run their business, like hiring the staff they need or marketing it. And many get to a point where the prices are too high to even think about passing the extra costs on to customers. Often, the only option is to shut down and move on. Other factors that are impacting retail zones are: Changing consumer trends More and more people are turning to online shopping, which has undermined the economic viability of brick-and-mortar shops. Pressure to redevelop land to prioritize residential units. Often, we’re seeing property owners refusing to renew leases because they want to demo instead. Empty homes When so many houses sit empty, there are less customers which means less business for mom-and-pop shops that often count on having a customer base in the immediate area. Affordability High housing prices and living in an expensive city often result in less spending among consumers. Shifting demographics As more people are priced out of neighbourhoods, that changes the retail landscape. A study for the Globe and Mail by BTAworks found that the number of west-side businesses is dropping. In Dunbar, businesses fell by 8% between 2011 and 2016. And retail businesses on West Broadway between Alma and MacDonald Street dropped by 10%. However, when you look east, businesses were increasing by 11% in the heart of Cambie Street and 13% on East Hastings Street. What does it all mean? Vacant storefronts don’t add any value to neighbourhoods. When cherished independent shops close – only to sit empty for months or be replaced by big-name retailers – we ultimately lose the character of a neighbourhood. In other words, we lose the vibrancy that often made it so appealing in the first place. And over time, we’ll begin to lose choice and the ability to shop where we live. Lifelines for retail stores What, then, is there to do about the retail problem in Vancouver? We’ve noticed a few things happening. Some innovative retailers have instead turned to temporary spaces – opening pop-up shops, where they take empty storefronts and transform it into retail stores for anywhere from a few days to several months. Many people have been calling on the government to fix the problem, arguing that businesses need protection to get rents and taxes to more realistic levels. Some options include “split assessments,” which allows unbuilt airspace on top of a retail unit to be assessed at the lower residential tax rate instead of the higher commercial rate, and “three or five-year averaging” that allows tax to be calculated based on the value of the property over a three or five-year period. And others have called for a tax on empty commercial spaces, like the Empty Homes Tax. The tax could be applied for empty storefronts to encourage landlords to lease out their unused space to create more retail supply and reactivate street-level activity. What do you think about today’s retail landscape? ### Pinsky Mortgages Reaches Top 75 in Canada! We are thrilled to have placed 43rd out of Canada’s top 75 mortgage brokers in 2017. This is the second year in a row we ranked in the top 75 brokers across the country and one of the best mortgage brokers in Vancouver BC! We feel very lucky to serve our clients and our realtors partners. A huge THANK YOU to everyone we get to work with! Warmest Regards,The Pinsky Mortgages TeamEitan Pinsky, Paisley Boone, Adam Clarke, and Parmdeep Kaur More on the Award Our annual ranking is based on residential lending in the Canadian Mortgage Professional (CMP) Top 75 Broker List. The CMP Top 75 Broker List recognizes brokers from all over Canada. To qualify for the list, we had to write and initiate all of our own mortgage files. In order to get ranked in the list, we had to work very hard. However, the year was not without its difficulties. There were four changes that specifically affected our business: The new qualifying rate for all insured mortgages – this came into place January 1, 2017.The new qualifying rate for all uninsured mortgages that came into place on January 1, 2018.The increase in home prices that have affected affordability for purchasers.The steady increase in interest rates from the all-time low at the end of 2016. Despite theses challenges, we worked very hard and were successful. Happy 2018!! ### What does a "Rate Hike" actually mean? TD Bank has just increased it’s posted rates and RBC will also on Monday. This increase, from 5.14% to 5.59% at TD, is the “biggest move in years.” The change came because of the bond yields increasing. We do expect every other lender to follow suit. But, actual interest rates have not changed… so what exactly is going on? The banks have specifically increased something called the “posted” rate. A “posted” rate is used for three purposes: Fools clients into thinking rates are higher than they are by being displayed in the “Rates” section of a bank’s website.A ~5% decrease in affordability for many borrowers. The posted rate is the benchmark rate that lenders use for qualifying a mortgage (a bank’s “stress test”). It is used to calculate the bank’s mortgage penalty. First, let’s address the clients who renew their mortgages when the banks send out renewal letters… Did you know that 80% of homeowners renew with their current mortgage lender? Did you also know that the Bank of Canada published a study that says: “lenders have improved their ability to price discriminate… offering discount rates to different sets of consumers, based on their willingness to pay.” Lenders know that at renewal, most clients do not shop around as they did when they obtained their initial mortgage, and are therefore less likely to offer their best rate to current borrowers. So, this higher rate is for people who don’t know better. Please remember that the banks are not there for your client. A recent CBC article shows that the banks are there to make money first and provide advice second. Second, for qualification, the lenders go by their “posted rate” to qualify a mortgage. If a client gets a variable at 3%, the lender is required to qualify them at the higher rate of posted/benchmark and 2% above their contract rate (in this case, 3%). However, with lenders increasing their posted rates, the client will have to be approved at 5.59% instead of 5.14%. This will affect home buyers and decrease affordability by about 5%. Third, banks use the posted rate for their penalty calculations. The higher the posted rate, the higher someone’s potential penalty is when they pay out their mortgage. This increase in the posted rate will increase people’s penalties quite substantially for Bank Interest Rate Differential (IRD) penalties. This is definitely not in the clients’ best interests. A borrower could do much better by going with a variable rate penalty or a monoline IRD penalty. Here is an article we wrote on the 4 penalty types. BONUS: OK, so we now know that the Posted Rates have increased. What we don’t know is why… The first reason for a lender to increase their rates would be when the bond yields increase. We have seen a slight increase but not that much, and definitely not enough to warrant such a high increase in a bank’s posted rate. Generally, when the bond market changes, the discounted rates will change. Discounted rates are the rates that clients actually see when they get their mortgages. One sentiment is that TD and RBC are trying to warn people to lock in now so they can make more money and have greater “spreads” between the bond yields and mortgage rates. If I had a crystal ball, or if I was a portfolio manager, I may have more info for you here… Alas, this is all I can say on this matter. ### Vancouver's West End Vancouver’s West End seems to be getting a lot of praise. The area was recently named the best neighbourhood in the country by the Canadian Institute of Planning’s Great Places in Canada contest. Stanley Park also took the top spot on Trip Advisor’s list of best parks in the entire world, edging out Central Park and Luxembourg Gardens. What makes this neighbourhood so special? It’s at once family-oriented and LGBTQ-friendly, ultra-urban and tree-lined traditional, and a beach town as well as a downtown. The West End boasts some of the city’s liveliest beaches, and is home to Robson Street, Vancouver’s famous shopping area! Here’s a tour of the neighbourhood. The Beautiful British Columbia- West End History The West End was first conceived as the proposed city of New Liverpool. Too remote at that time, the land remained an unrealized real estate dream. Eventually, it was incorporated into the city of Vancouver. The arrival of the railway several years later provided incentive for development and the area around West Georgia Street became Vancouver’s first upscale neighbourhood. The West End’s skyline began to take shape in the 60’s and early 70’s when 220 high-rise apartments were built within a 13-year period. To date, there are 112 blocks in Vancouver’s West End. Fun Fact! Vancouver’s West End is the most densely populated area in Canada. Vancouver Historic West End Housing Boundaries Stanley Park (west) W Georgia Street (north) Burrard Street (east) Pacific Avenue (south)  Vancouver West End Boundaries Demographics Population: 44.543 Average Household Income: $38,581 (lower than the city’s overall average $47,299) Average Household Size: 1.5 Population Density: 4th most densely populated neighbourhood in Vancouver (217 persons per hectare) Language: Lower proportion of residents whose mother tongue is Chinese (5%) compared to city (25%) Population Growth: City of Vancouver V/S The West End The Residents Diversity in the West End extends the borders of the densely populated neighbourhood, The West End is home to a mixed population, old and young, of Canadians, immigrants and international transient residents. Davie Village: predominantly young, trendy, LGBTQ community Denman Street: residence to the older generation and families Bute Street: divided between the quiet residence on the west side and the bustle and noise of Downtown’s business and shopping district on the east Kid Population: Vancouver V/S West End Vancouver Evolution of Population in Vancouver West Side Over Nearly 3 Decades Kids of the West End Population: 1,745 (ages 0-14) Proportion: West End (3.9%) compared to Vancouver (11.8%) Density: 4th highest density of children (8.8 children per hectare) Schools: Lord Roberts Elementary, Lord Roberts Annex, and King George Secondary Historic 1907 Vancouver Public School Building Real Estate Popularity combined with a shortage of new construction means demand usually outweighs supply. A vacancy rate below 1% indicates that households have greater difficulty finding a place to rent on the West End. To Rent:Bachelor Suite/1-Bedroom, $1,200-$2,500+2-Bedroom, $1,700-$3,000+3-Bedroom+, $2,500-$4,000+ To Buy:Bachelor Suite/1-Bedroom, $200,000-$600,000+2-Bedroom, $290,000-$1M+3-Bedroom+, $750,000-$3.5M+ Rising Housing Market in West End Vancouver BONUS – Setting Purchase Expectations There is no end of headlines citing reports by economists, think tanks, etc., quoting statistics galore about what is happening and will happen with Real Estate values. All of the endless speculation does little to quell the fears of first-time homebuyers, or in many cases, current home-owners. It is worth keeping in mind that the best predictor of what will happen tomorrow is often what happened yesterday. Certainly, the Real Estate market movements tend to be far less erratic than the stock market. Although Real Estate transactions are also driven on emotion, the ability for the real estate market to react to short-term emotional swings does not exist in comparison to the stock market. The process of selling a home is tedious, taking days or weeks to get to market from the time a decision is made to sell. The process of selling shares on the stock market takes seconds and thus market sentiment, rumour and whim play a much larger role in valuations. A recent story in the Globe and Mail traces back the story of a local Vancouver buyer currently shopping for a $3M home. There is a valuable lesson in this story. More than once the message conveyed by the subject, Patricia Houlihan, is “buy as soon as you can buy, and buy whatever you can afford to buy.” Sage advice that just about any current homeowner would echo, along with the comment that they wish they had bought sooner. It should be noted that it is her eighth home over a span of decades, not her very first purchase. Although many buyers historically bought one house, maybe moving once, and then stayed put for decades, today’s urban buyers, since the 1990s onward, have often started out with something smaller, older or perhaps even a condo and made the best of it. As Ms. Houlihan points out, for the past few decades the typical homebuyer’s ability to save has not kept pace with property appreciation. Here’s some numbers: 5% down on a $200,000 purchase requires $10,000.00. Even a 1% annual appreciation on the property ($2,000.00) represents an effective 20% gain on the cash invested. Factor in current mortgage reduction (~50% of the monthly payment) and you have another $450.00 per month building in equity. Based on today’s 5 yr fixed rate of ~2.64%, an income of ~$36,000.00 per year qualifies a buyer in the above scenario. It is unlikely this person will be able to save ~$$7,500.00 per year while paying rent as well. A toehold in the market is how many of us began since the 1990s if not the 1980s. It is not about buying your “forever home” the first time around, it is about getting a start. Few who bought in the 80s and 90s expected granite counters and stainless appliances. It was carpet and linoleum, hardwood and tile. The expectations of today’s first-time buyers have shifted and that has played a role in increasing prices as well. The bottom line is that you have to start somewhere, and you have to live somewhere while working towards the dream home. Buying less-than-desirable homes to start with, as Ms. Houlihan did, is work to be sure. That is OK, as few of us will ever save our way to our dream home. But we can work our way there. Lifestyle The West End is home to some of Vancouver’s best cheap and delicious eateries. On Denman and Davie Streets, you’ll find restaurants from all over the world, including a large number of Japanese (be sure to visit “ramen row”), Korean and Mexican restaurants. There’s also plenty of beaches as well as a seawall with unmatched views, making it a great place to spend some time with family and friends. Don’t miss out on the Celebration of Lights competition, an amazing fireworks show that happens over three nights in late July and early August. Plus, there’s also “movies in the park” every Tuesday throughout the summer. ### The Mortgage Insurance Market & Wholesale Lenders The Canadian mortgage market used to be very simple. We had the big banks, credit unions, and trust companies. However, almost 20 years ago, the Canadian government made three major changes to the Canadian mortgage industry. First, the government and CMHC put their weight behind Canadian mortgages by guaranteeing an insurance payout to lenders in the event that a borrower does not pay. Yes, the Canadian taxpayers are on the hook if CMHC goes under. Second, Canada also began to allow lenders to pay for mortgage insurance for their borrowers, even though the insurance was not required. Borrowers would not know that their mortgage is insured, rather the lender would pay for, and insure the mortgage on the “back end” in order to make the mortgage less risky. IE if the borrower did not pay, the insurer would pay the lender (just as they would pay if the borrower had less than 20% down payment and was charged for insurance themselves). And third, Canada allowed its lenders to bundle up their mortgages and sell them to investors. The securitization of mortgages (the process of taking the mortgages and transforming them into a sellable asset) allowed investors to purchase many mortgages at once, knowing there would be a specific return. The return here would be just less than the interest rate on the various mortgages (less because the lender has to make a little bit of money for creating the mortgage bundle or security). Now, mortgage investors are looking at two things: investment return and mortgage risk. The lower the risk of an investment, the lower the return an investor may be willing to see. Because Canadian lenders can insure their mortgages against default (non-payment), investors are very keen on purchasing these mortgages. Thus, investors provide lenders with a lot of inexpensive money to lend out, which in turn, provided for better interest rates for borrowers. As an aside, an example of investors may be one of Canada’s large banks, an American bank, pension funds, and/or other financial institutions. The result was the emergence and major growth of mortgage finance companies, called wholesale lenders or monoline lenders. There are some of the Monoline lenders: CMLS, RMG, MCAP, Street Capital and First National Monoline lenders, encouraged by access to cheap capital, set up efficient mortgage underwriting (approval) operations and were able to provide flexible mortgage products and better-than-the-banks interest rates for their clients. The overwhelming majority of wholesale lender mortgages are back-end insured by the lender, packaged up, and sold to investors. What is interesting here is that wholesale lenders will insure mortgages transferred from one institution to another – something that banks do not do. This allows for better interest rates when renewing with a wholesale lender than if renewing with your current bank lender. ### The 4 Kinds of Mortgage Penalties When you get your mortgage, you are generally locked into a specific interest rate for a specific amount of time. The amount of time that your interest rate is locked in for is called your term. For variable rate mortgages, the term would be the amount of time that your difference from prime is locked in for. Your mortgage will have a breakage penalty for paying it off prior to the completion of your term. There are four kinds of breakage penalties. A Bank IRD Penalty, or Interest Rate Differential penalty, is the most prevalent and quite high. In many cases, your penalty can be 4% or more of the outstanding balance of your mortgage. The lowest penalty is called a three-month interest penalty. This penalty usually comes with variable rate mortgages. If you were to pay off your variable rate mortgage and your normal monthly interest payments were $500, your penalty to break the mortgage would be $1,500. This penalty is generally around 0.7% of your total mortgage balance.The second lowest form of penalty is called a Monoline IRD penalty. This penalty is calculated in a similar way to the bank penalty but is much more favourable. In many cases, the penalty is lower than the variable rate penalty; all penalties are the higher of the three-month interest penalty or the IRD penalty. In this case, the penalty usually ranges from 0.7% of the mortgage balance to 1% of the mortgage balance.The fourth form of penalty is a distinct penalty on restricted mortgage products. Your restricted mortgage product may state a specific percentage penalty to get out of your mortgage. There is no formula here – it’s a straight calculation of 2.75 or 3% of the outstanding balance. When it comes to providing you with advice on your mortgage, your potential mortgage penalties are a big factor in our assessment. Being aware of these differences in mortgage penalty calculations could save you tens of thousands of dollars. We’re here to listen to you and provide the best advice we can based on your unique needs.  The best mortgage is always the one with the best mortgage interest rate… The best mortgage combines flexibility, rate, and options for the future. ### Up-and-Coming Marpole Marpole Main street Pinsky Mortgages in Vancouver. Marpole is a neighbourhood located at the southernmost part of Vancouver that’s known for its tight-knit feel and unpretentious vibe. It’s characterized by contrasts – filled with both aging walk-ups and high-rise towers, seniors and students, independents shops and big-box retailers. Its proximity to Vancouver and the airport coupled with more affordable housing prices make Marpole an increasingly popular neighbourhood to live in. Boundaries West 57th Avenue (north)North Arm of Fraser River (south)Ontario Street (east)Angus Drive (west) This map shows the Marpole boundaries in Vancouver BC. Demographics Population: 4,460Hectares: 559Age groups:19 and under: 16.5%20-39: 31.1%40-64: 37.0%65 and over: 15.5%Number of private households: 10,875Average size of household: 2.2Medium household income: $53,782Language: 37.9% of residents’ mother tongue is English. Source: 2016 Census History Marpole has a rich history that stretches back thousands of years. In fact, archaeologists have found evidence that Marpole was inhabited as far back as 3500 B.C, making it one of Vancouver’s oldest neighbourhoods. The Marpole area has been occupied for thousands of years by the Coastal Salish peoples. Evidence of Musqueam settlements can be found in the remains of the Marpole Midden, which extends from 70th Avenue to the Fraser River. Marpole was settled by non-natives in the 1860s and 70s and called “Eburne Station” after Harry Eburne, the area’s first storekeeper and postmaster. At that time, it was a small town separated from the rest of the city by many miles of forest. At the turn of the 20th century, Eburne was thriving with the construction of the Vancouver Lulu Island Railway and the BC Electric interurban train line. Business people quickly took note of the riverfront’s potential and Marpole became a neighbourhood of sawmills and canneries. By 1929, when the community amalgamated with Vancouver, Marpole had become one of the city’s major industrial centres. When the Oak Street Bridge opened in 1957, the historic business district along Hudson and Marine suffered a serious decline as much of the traffic shifted east. In the 1960s, the area south of 70th was rezoned and low-rise walk-ups began to replace the original homes. In 1975, when the Arthur Laing Bridge opened to airport traffic, commercial activity focused once again on Granville Street. Housing Typical homes in Marpole Vancouver. Mortgages sizes on these properties in Vancouver would be quite high. In Marpole, you’ll find a mix of residential housing (including single-family dwellings and low-rise apartments) along with a variety of rental accommodation. About 50% of dwellings are apartments less than five storeys, 20% are single-detached houses, 11% are detached duplexes and 9% are apartments five storeys or more. This diversity in accommodation reveals itself in diversity of neighbours: Marpole attracts students, seniors, newcomers and young families. Over the last few years, there have been many new high-rise developments, like the tower above Safeway at Granville and 70th. W2 At marpole at Granville and 70th. These had many presale mortgages that we were able to do. Since Marpole’s busy thoroughfares make it a high traffic area, it’s less expensive than most other areas of the city. Current Marpole MLS stats indicate an average house price of $1.7 million. The average rent of an apartment in Marpole is $1,113. Marpole has received a lot of attention in the news lately. The City of Vancouver recently unveiled a modular housing development for the homeless in the area. The units will provide accommodation to 78 people who are currently living on the street or in shelters. At 250 sq. ft, they offer a small kitchen and bathroom with a shower stall.  The project has drawn the ire of many local residents, who argue that the homes are being built across the street from two schools. They are slated to open February 2018. Attractions There’s plenty of parks and green space in Marpole. Winona park is the largest in the area and boasts three terraced fields for football, rugby and frisbee, along with a beautiful view of the Fraser River. Located at 59th and Oak Street, the Marpole-Oakridge Community Centre is the city’s oldest community centre (it opened in 1949) and offers childcare facilities as well as amenities like a fitness centre, racquet courses and saunas.  Marpoloe-Oakridge community centre is the city’s old community Centre The Vancouver Parks Boast recently approved a new outdoor pool at the Marpole Community Centre. A plan for a new community centre is currently in the works, too. Marpole is also known for it’s selection of golf courses – minutes away, you’ll find Langara Golf Course, McCleery Golf Course and Point Grey Golf and Country Club. Shops and restaurants Granville Street serves as the main neighbourhood centre for Marpole, and is packed with a variety of coffee shops, restaurants, banks and clothing stores. The street has mostly smaller, independent shops but there are also larger chains, like Safeway. South Granville Street at 65th Did you know? White Spot, Vancouver’s own popular chain of hamburger restaurants, opened its first location in Marpole in 1928. The original building, located on 67th Avenue and Granville Street, closed permanently after a fire in 1988. Schools Marpole is known for its top-ranked schools, including: Sir Wilfrid Laurier ElementaryDavid Lloyd George ElementarySir Winston Churchill Secondary School Getting around Marpole is well-served by major arteries running through the community and public transit, with almost all TransLink buses going to the Lower Mainland’s southern suburbs passing through Marpole. Marpole also boasts several Canada Line SkyTrain stations. While being close to the Oak and Arthur Laing Bridges mean it’s easy to get around, it also means traffic jams are common in the area.  What’s next for Marpole? The City of Vancouver revealed a plan to guide growth and change the neighbourhood over the next 30 years. Here’s what’s in store: 9,500 new jobs478 new childcare spaces10-acre waterfront parkRenewal of four facilities: community centre, library, neighbourhood house and family placeBetter walking and cycling routes We hope you enjoyed this snapshot of Marpole! If you want to know more about their neighbourhood, or any other areas in Vancouver, drop us a line. ### $750 First Time Home Buyers' Tax Credit First-time home buyers of 2018 take note: you are probably eligible for a $750 rebate on your 2018 income taxes! The First-Time Home Buyers’ Tax Credit (HBTC) allows eligible first-time home buyers who purchased a home in 2018 to claim $5,000 on their federal income taxes for the purchase of the home. This works out to be a rebate of $750. Claiming the HBTC is Easy Enter $5,000 on line 369 of your Schedule 1, Federal Tax Return.5 seconds for $750! When more than one person is entitled to the amount (for example, when two people jointly buy a home), the total of all amounts claimed cannot exceed $5,000. In other words, you and your spouse or common-law partner can split it, but the maximum claimed between both returns is still just $5,000 total. You do not need to send any supporting documentation with your tax return, but you do need to keep everything on file in case the CRA requests it at a later date. To be eligible for this rebate: You or your spouse or common-law partner purchased a home in 2018 And, one of the three below: You did not live in another home owned by you or your spouse or common-law partner in 2018 or in any of the four preceding years, orYou are eligible for the disability tax credit; orYou acquired the home for the benefit of a related person who is eligible for the disability tax credit. NOTES:  You, or the related person with a disability, must intend to occupy the home as a principal place of residence no later than one year after it is purchased.The tax credit is available for existing homes and homes under construction.The home must be located in Canada, and must be registered in your and/or your spouse’s or common-law partner’s name.Almost all home types are eligible, with the exception of co-operative housing corporation which only gives purchasers the right to tenant their unit but not have an equity interest in the housing co-operative. If you have any questions about the Home Buyers’ Tax Credit, please don’t hesitate to contact us. We’re available by phone or by email. ### Vancouver rolls out new Airbnb measures In an effort to ease its falling vacancy rates and soaring rental prices, Vancouver became the first city in Canada to crack down on short-term home rentals. Here’s what you need to know about the new regulations.  New short-term rental regulations On November 14, 2017 – following two days of public hearings in October – Vancouver City Council approved new regulations for limiting short-term rentals on Airbnb in a seven to four vote. The new rules, which come into effect on April 1, state that: Short-term rentals of entire apartments or homes are banned if the property is not the owner’s primary residence.Basements apartments and laneway houses that could otherwise be rented out to long-term tenants can’t be listed as short-term rentals.All Vancouver hosts must buy a business license that costs $49 annually, plus spend $54 on a one-time application fee and display their license number in an online listing. If they don’t, they could face a $1,000 dollar fine. What this means is it will soon be legal for the 80% of the owners and renters who currently list their principle residence on Airbnb, while they are on vacation for example. But buying or leasing a property and using it as a Airbnb rental full-time would be illegal. Of the approximately 6,000 short-term rentals listed in Vancouver, the city estimates at least 1,000 non-principle residences could be freed up for long-term rentals. The new regulations have drawn both praise and criticism. Some Airbnb hosts say the rules will deprive them of much-needed income in a very expensive city. According to data provided by Airbnb to the city, the typical host earns $6,500 annually from the site. Some have also questioned whether city staff will have the time to track Airbnb use. Others proponents say the regulations will help with the availability and affordability of long-term rental housing units – especially in a city with a vacancy rate of around 0.8%. Short-term rental listings in Vancouver Other cities in Canada are also trying to limit Airbnb. Toronto is proposing similar rules, restricting short-term rentals to primary residences and introducing a licensing system. The rules will come into effect July 1, 2018. FACT: Average hotel night in Vancouver is $260, while Airbnb is $150. New tax regulations In addition to these measures, new regulations on taxes for Airbnb were announced by the BC government on February 7. The government will be moving toward similar agreements with platforms like VRBO in the near future. Airbnb will be collecting the 8% provincial sales tax (PST) and up to 3% municipal and regional district tax (MRDT).The BC government anticipates that the new tax will generate $16 million for the province (which is earmarked for affordable housing initiatives) and $5 million for municipalities (which will go toward tourism). Details of those projects would be announced in the new budget in late February.To streamline the process of collecting taxes, Airbnb will remit on behalf of its hosts in British Columbia so that no additional administrative burden is placed on them. In terms of housing affordability, it’s unclear whether the tax will make much of an impact. What it will do, however, is ensure a fair tax system and create a more level playing field for Airbnb and hotel operators. Vancouver is joining other major cities in taxing its short-term property renters. Airbnb currently collects a 3.5% tax on lodging on behalf of its hosts in Quebec, and collects taxes in Michigan, Nevada and California, as well as France and India. Airbnb and your mortgage If you’ve ever wondered about how Airbnb impacts your mortgage, here’s what some financial institutions say: At Royal Bank of Canada, clients must inform the bank of the intended use of the property, says spokesperson Jill Anzarut, “and if that use changes, it’s important that they contact us in advance, prior to proceeding with any changes.”National Bank of Canada requires the same notification.At Toronto-Dominion Bank, meanwhile, as long as the correct insurance is in place, occasionally renting a property through a service such as Airbnb would not have an impact on a mortgage holder or applicant, says a spokesman. Even though such an activity could put homeowners in breach of their mortgage policies, it is not always clear what happens if you inform your lender that you are planning on using part, or all, of your home for short-term rentals. And whether anyone actually makes the effort to do so is also in some doubt. What do you think of the new regulations to short-term rentals in Vancouver? Drop me a line to chat! ### The "City" of Lougheed With traditional retail changing and a rising demand for houses, savvy developers have been turning shopping centres – along with their vast parking lots – into mini cities. Here, we take a look at one that’s doing just that: transforming Burnaby’s Lougheed Town Centre mall into The City of Lougheed. Led by Shape Properties, it’s among several mall redevelopments that are currently taking place around Vancouver, with other sites including Oakridge and Brentwood. What makes Lougheed unique is that it is purportedly the largest master planned community in Canada. The project will see 40 acres transformed into The City of Lougheed over the course of 30 years. When finished, it will house some 10,000 residents. At $7-billion, the community will be complete with: 1.4 million square feet of retail23 towers300+ new shops and restaurants5 aces of public parks and green space2 onsite SkyTrain lines Boundaries Cameron Street (north)Lougheed Highway (south)North Road (east)Bartlett Crescent (west) Lougheed development town centre and urban space. Lougheed’s History Up until the 1960s, the land that now makes up Lougheed Town Centre was entirely rural landscape. In 1969, Lougheed Mall opened, offering a wide of selection of stores, such as The Bay, Safeway and Woolco. There was also a three-screen movie theatre. In 1986, the mall was expanded to be twice the size. And in the early 2000s, it was extensively renovated once again. Many customers have turned to online shopping in recent years, which has caused business to slow down at the Lougheed Town Centre. And so, it was time for something entirely new. Lougheed mall expansion in 1985 (City of Burnaby) Living The plan will see the construction of four new apartment towers. The units sizes range from 550 sq. ft. to 1,250 sq. ft. The suites offer some perks: all have outdoor patios, parking, storage, heating and best of all, central air conditioning. The buildings will also be complemented with a library, pool and recreation centre. One bedrooms will start at $329,900; two bedrooms from $463,900; and three bedrooms at $613,900. The first tower at The City of Lougheed, Tower One, have already been put on sale. Towers Two and Three are both condo towers, and began presales in 2017. Tower Four will be a rental apartment tower. The opening certainly attracted a lot of attention among Vancouverites. In fact, over 50 people hoping to snatch up a place camped outside Lougheed Town Centre for four days before the condo sale in 2016! Read more here. Shops The redeveloped shopping centre will be home to over 300 retailers in an open air and galleria format. So far, the City of Lougheed plans to have a Walmart, Hudson’s Bay, London Drugs, Sport Check, H&M and Whole Foods, among many others. Transportation The City of Lougheed sits in the middle of a major transportation hub. The Millennium and Evergreen SkyTrain Lines are directly on site, the mall is served by a bus loop with routes going to the Tri-Cities area, and there’s Lougheed Highway. According to James Chen, the architect behind the project, “people will walk everywhere. When you move to Lougheed, most of the time you won’t have to use your car. Everything is self-sufficient. You go downstairs and walk outside and you have everything.” 30% of The City of Lougheed has been purposefully designed to be shared open spaces enhanced by lush landscaping. This includes the community’s green streets, small and large parks, urban trails, view corridors, landscaped rooftops, water features, and other natural and built features. Timing Master Plan Rezoning: CompleteFood Court Construction: In progressPhase 1 Construction Start: Q1 2018Food Court Delivery: Q2 2018Phase 1 Delivery: Q2 2021 If you would like more information on the City of Lougheed, and/or mortgage information from Vancouver and Burnaby mortgage brokers, please give us a call and we would be very happy to help you with all of your home mortgage and financing needs. ### Should I Lock in My Variable Mortgage? Interest Rates Have Risen… The Bank of Canada Increased Rate by 0.25% Today… The global economy has continued to strengthen, which promoted the Bank of Canada to raise it’s interest rate for the third time since last summer. This immediately affects Variable Rate mortgages. Should I lock in my variable rate mortgage? For me, this is a difficult question to answer. The reason why this is a difficult question to answer is because, just like when purchasing a property, everyone’s own personal situation is unique. There is no one size fits all… So Eitan, should I lock In? Well, there are 3 main considerations:1. Your current variable interest rate,2. Your future goals and housing/mortgage plans, and3. Your potential new fixed rate (this is a big one). 1. Your Current Variable Interest RateIt is true that if you locked in with a fixed rate at sub 3% several months ago you would be very happy. However, had you had a variable at around 2.1% to 2.4% over the past few months, and now you’re at 2.65% (on the high side), you’re still sitting pretty… If your variable rate has increased to 3% and over, you may want to think about locking in. 2. Your Future Goals and Housing/Mortgage PlansThere are two very good reasons why the variable is and has been a great choice… The first is that variable rates are generally lower than fixed rates. Due to interest being front-loaded on a mortgage (you pay the most amount of interest at the beginning of your term), variable rates in an increasing rate environment, even if the increased variable rate becomes higher than the fixed rate, can have a total lower interest cost over a 5-year period. So, if you’re managing your mortgage and using our prepayment strategies, you’ll likely still be ahead, even with further increases in the variable rate. The second reason why variable rates may be preferable over the fixed is that the variable rate has the lowest prepayment penalties. Variable rate prepayment penalties are below 1% of the mortgage, where fixed rates at big banks can be 4%+ of the outstanding mortgage. One important note here is that although we do expect at least 1 more increase in the variable rate this year, interest rate hikes have happened before. In 2010, the Bank of Canada increased rates three times for a total of 0.75%. Rates then stalled for a few years and decreased again by 0.5% in 2015. For clients who locked in… they looked back and were not happy about having done so. 3. Your potential new fixed rate.When it comes to new mortgages, the interest rate you are able to get is predicated on whether you have an insured, insurable or uninsurable mortgage. The article link above basically states that in the past, it was easier to quote a rate. However, new government regulations make it so that there is a fragmentation of interest rates, with different rate tiers for each specific situation. The best rates are for insured mortgages and for a straight transfer from one lender to another. The transfers have to have low loan to values and the mortgages have to be approved as though the mortgage is insured. Slightly higher rates are for “uninsureable” mortgages. An uninsurable mortgage is anything with 30 years amortization, or if the home is over $1M. If your mortgage is insurable, and we can get you a rate of around 3.29% or lower, and your current variable is over 2.90%, you may want have a conversation about locking in to a new fixed rate with us. They key here is whether or not your new fixed rate is less than 0.5% difference in your variable rate. Current insurable fixed rates are around 3.19%. Uninsurable rates are around 3.59%. My Suggestion: Barring any considerations from item 2, I think if you were going to jump any more than 0.5%, it would probably not be in your interest to lock in… BONUS,  Anxiety… If you feel uncomfortable with any increase in your mortgage payment due to increased rates, you’re not alone. Give me a call and we’ll see what we can do. I hope this little write up made sense. Please don’t hesitate to contact me if you have any questions.Eitan – 778-990-8950 BONUS x 2 – Home Equity Lines of Credit (HELOC) – Since HELOCs are also increasing in rate, it also may be prudent to give us a call to see if locking in your HELOC into a variable or fixed rate is right for you… ### Keeping Your Credit Score Healthy If you haven’t seen your credit score, you’re not alone. Many of our clients don’t know about their credit score or even know what it is when we first meet with them. During our initial consultation, we go over your complete credit report with you. As an added bonus, we’ll even teach you how to read it. So, how can you make sure you have a great credit score? Here are a few tips to get you started.  You need to have credit. It may be surprising – but your credit score goes up as more credit is available to you. We recommend at least two facilities: a credit card and a line of credit (or 2 credit cards).You also have to pay your bills when they are due. That goes for your internet, cell phone and even parking tickets.It also helps to start as soon as possible. The longer you have a clean record of paying your credit card, loans or other credit facilities, the better your credit becomes.Finally, make sure to carry a low balance. One of the least known ways to hurt your credit is to have high utilization. We’re written a more in-depth article about your credit score. Please check it out and please don’t ever hesitate to call us about your mortgage related needs when you’re buying a property in Vancouver or anywhere else in Canada. ### The Best Mortgage Options Are From Brokers At Pinsky Mortgages, we have access to, and are experts in, hundreds of different mortgage products. We can guide our clients with the right mix of interest rate, options and mortgage flexibility that suits their needs. We even give our customers the choice between different mortgage products and lenders. Ultimately, it’s about choice and education. Check out this video to discover more about the Pinsky Mortgages difference. The Goods! So, a Mortgage Broker and Car Salesman walk into a bar!… OK, the following isn’t much of a joke but a good anecdote:Imagine that you go to Ford to get a car. You’re in the market for something for your growing family. After about an hour of comparing models, you settle on a ford Explorer. You need more room than the Ford Escape and the explorer seems to do the trick But wait! What about all of the other car makers? Did you know that the Honda CR-V and the Toyota RAV-4 are slightly bigger than the Escape? Did you know that the Rav4 comes in a hybrid model? How about the Subaru Outback? And, what if Subaru is offering a massive cash back on their Outbacks from 2016, a model not dissimilar to their 2017? Wouldn’t it be nice to know this? Wouldn’t it have been nice to compare all car models from all manufacturers instead of from just one manufacturer? When I worked at at a big bank, I had access to around 4 products: fixed, variable, and open mortgages as well as home equity lines of credit. Each product has it’s own options and flexibility and I had to work with what was available to me, even though it may not have been exactly what my client needed. This is what banks do… they give you their mortgage options.. but only their own options – because that’s what they have access to. In comes the mortgage broker! We brokers have access to, and are experts in, hundreds of different mortgage products. What’s amazing is that we can guide our clients with the right mix of interest rate, options and mortgage flexibility that suits their needs. At Pinsky Mortgages, we even give people the choice between different mortgage products and different lenders.Ultimately, we’re all about choice and education. So let’s go back to the car story… Yes, if you purchase that Ford Explorer, you may be happy. It’s possible. But was it the right choice knowing that you could have purchased something very similar, something that would have suited your needs better, and for a lower price? If you had more information and access to all of the other car manufacturers, would you still have chosen it? I suspect not… ### What is a Collateral Mortgage? A collateral mortgage is a way of registering your mortgage on title. This type of registration is sometimes used by banks and credit unions. Monoline lenders, on the other hand, rarely register your mortgage as a collateral charge – which is an all-indebtedness charge that allows you to access the equity in the home over and above your mortgage, up to the total charge registered. What this means is that you may be able to get a home equity line of credit and/or a readvanceable mortgage, or increase your mortgage without having to re-register a mortgage. This is a real benefit to you in some cases because re-registering your mortgage can cost up to a thousand dollars. However, there are some negatives to having a collateral mortgage. First and most glaring – because it is an “all indebtedness” mortgage – it brings into account all other debts held by that lender into an umbrella registered against your home. This means that your credit cards, car loans, or any related debt at your mortgage’s institution can be held against your home, even if you’re up to date with your mortgage payments.Secondly, if you want to switch your mortgage over to a different lender, they may not accept the transfer of your specific collateral mortgage. This means you’ll need to pay additional fees to discharge the mortgage and register a new one.And lastly, collateral mortgages make it more difficult to have flexibility to get a second mortgage, obtain a home equity line of credit from a different institution, or use a different financial instrument on your home. This is because your collateral mortgage is often registered for the whole amount of your property. To recap, collateral mortgages give you the flexibility to combine multiple mortgage products under one umbrella mortgage product while tying you up with that one lender. While this type of mortgage can be a great tool when used correctly, it does have its drawbacks. ### All About Pre-Approvals Are you in the market for a new home? That’s great – but if you’re not already pre-approved from your mortgage broker, be sure to read on. Pre-approvals are very important for two reasons. They give you confidence in knowing that a specific amount of financing is available for you.A pre-approval can put you in a positive negotiating position against other home buyers who aren’t pre-approved. Not all pre-approvals are the same, though. There are essentially three different kinds.  The first occurs when you meet with a mortgage professional and tell them how much you make. They’ll say something along the lines of “Great, you’re pre-approved.” The mortgage professional has only looked at your income. There is no real pre-approval.The second kind is when a mortgage professional asks you how much you make and then pulls your credit bureau. This allows a mortgage professional to lock in your mortgage rate for up to four months. This pre-approval still isn’t a sure thing.The third kind of pre-approval – and the one that we do – is a lot more encompassing. We get all of your papers prepared right off the bat, which allows us to eliminate any unforeseen issues with your approval. Sure, it’s more work up front – but we do this because it’s the right thing to do. If you’d like to get a pre-approval, please let us know and give us a call! We’re here to help. ### What are Accelerated Payments? An accelerated payment is a mortgage payment that is increased slightly so that you can pay off your mortgage faster. There are two common types of accelerated payments: bi-weekly and weekly. Of the two, bi-weekly is the much more common choice because it matches with pay dates more often. An accelerated payment works by increasing your weekly or bi-weekly payment by an amount that would have you pay one full month’s payment extra per year. Accelerated payments are a great way to start paying off your mortgage, but they actually do not have much of an impact on the interest you will pay. Banks and mortgage professionals use this term to make borrowers think they are paying off their mortgage faster, but the amount of interest saved over the course of your term is miniscule. There’s nothing wrong with accelerated payments, but they are only part of the puzzle. Please give us a call to learn more. Illustration:If your payment is $1,000 per month, you pay 12 months per year, which will equal $12,000 of payments that year. Now, if you pay semi-monthly, or every half month, you pay $500 per payment, for a total of $12,000 per year at 24 payments. Bi-weekly payments are 26 payments per year with $461.50 per payment. However, accelerated bi-weekly payments use the semi-monthly payments of $500 26 times. This means that you end up paying $13,000 over the course of the year, or one extra monthly payment. The Bare Bones If all you do is an accelerated payment, your mortgage payoff is stunted compared to what is available. In Vancouver, an indeed in all of BC and Canada, due to the fact that mortgage sizes are now very high, paying off a mortgage should be more of a priority. ### 6 Home Purchase Closing Costs When you purchase your home, there are 6 additional costs to account for.  They include: Home Fire and Flood InsuranceTitle InsuranceLegal FeesAdjustmentsLand Transfer TaxGST  Here’s an overview of what you can expect. Home and Fire Insurance. Mortgage lenders will require a certificate of fire insurance to be in place by the time you take possession of your home. The amount required is generally at least the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size and extras being insured, as well as the insurance company and the municipality. Home insurance can vary anywhere from $400 per year for condos to $2,000 for large homes. Title Insurance. This is a one-time fee of about $150 and it protects you against any issues, defects or fraud on your title. Your lawyer or notary helps you purchase this. Legal Fees. Thirdly, you are required to pay legal fees. Your lawyer or notary will charge you anywhere from $700 to $1,000 to help with your purchase. There are also fees to register your title with the municipalities. All told, you’re looking at around $1,000 to 1,300, after tax. Adjustments. An adjustment is a cost to you to pay the seller back for prepaying any property tax or condo fees on your behalf. Simply put, if you take possession in the middle of a month, the seller has already paid for the whole month and you must pay the seller back for what they’re not using. Land transfer tax. Land transfer tax, or property transfer tax (PTT) as it’s known as in British Columbia, is a fee that is charged to you by the province. First-time home buyers are exempt from this fee if they are purchasing a property under $500,000. All home buyers are exempt if they are purchasing a new property under $750,000. The British Columbia, the PTT is 1% on the first $200,000 of purchase and 2% thereafter. However, if the property being purchased is over $2,000,000, then it is 3% on any value over $2,000,000. GST. GST is only paid on new construction purchases. GST is 5% on the purchase price. However, there is a partial GST rebate on properties under $450,000. Please don’t hesitate to contact us for your home financing and mortgage needs! ### The New Mortgage Stress Test OSFI (the Office of the Superintendent of Financial Institutions), the bank regulator, has finally confirmed last week that all borrowers have to now undergo a “stress test” when it comes to new mortgages. Previously, this stress test was only in place for insured mortgages (borrowers who have less than 20% down) and for clients who wanted a term that was not a 5-year fixed. What all this means is that any borrower who would have been approved with 20% down on their 5-year fixed rate, will now have around a 20% decrease in affordability. Starting January 1, 2018, the new “Stress Test” on low-ratio mortgages will be the GREATER of the Bank of Canada qualifying rate (currently 4.89%) or 2% above a client’s contract rate. Financial Post    |    CBC    |    OSFI Press Releases The Potential Immediate Impacts– As at January 1, 2017, there will be an approximate 20% decrease in affordability for some buyers.– This decrease in affordability may push people to variable rates due to easier qualification (a variable rate of 3% would qualify at 5%, whereas a fixed rate of 3.5% would qualify at 5.5%).– This may pushing mortgage borrowers to non-federally-regulated institutions (credit unions, higher interest rate lenders, etc.).*These rules do not affect credit unions at the moment. What Can You Do?1. Understand how these factors will affect you! Contact any one of us and we would be happy to go over your options. 2. If required, try and purchase a home in 2017, prior to the new rules coming into place. Pre-approvals based on current affordability will not hold past January 1st if you don’t have an accepted offer on a specific property.*If you do find a home before January 1st and we submit our application before January 1st, you will qualify on the old, higher affordability, even if your purchase happens in the new year. 3. Feel comfortable that we have you covered, that we have access to other financial institutions such as credit unions, and you can always contact us, or anyone on our team for quick answers to your questions. Some Frequently Asked Questions What About Provincially Regulated Institutions, such as Credit UnionsCredit Unions are not obliged to follow the new stress test rules. It is possible that no change will occur to affordability for people who borrower from credit unions because as of now, they have not stated whether they will change their policies to be in line with the banks and other federally regulated institutions. Does this Affect Amortization?This new policy from OSFI does NOT have an amortization component. The lender can still set the qualifying amortization to their own specific policy (eg, 25, 30 or 35 years). Do I Still have the Option To Refinance My Home?Yes, homebuyers will still have the ability to refinance up to 80% of the value of their property. You will have to pass the same stress test which is the higher of the Bank of Canada Rate (currently 4.89%) OR the rate from the lender plus 2%. If my contract was written prior to Oct. 17, 2017 or prior to Jan. 1 , 2018, will I qualify using the old or new benchmark rules?This depends on the lender. Some lenders will use current rules up to Jan. 1, 2018. Likely there’ll be a submission deadline around Dec. 28., 2017. DLC will continue to update as more information arises. When the stress test for HIGH RATIO (less than 20%, insured deals) was introduced in 2016, consumers were grandfathered under the old rules (no stress test) if the real estate contact date was written before the start of the stress test rule. What if I don’t qualify at best rate lenders?The qualifying stress test rule will also apply to alternative lenders (also know as B lenders) who are governed by OSFI. Any federally regulated lender will have to adhere to the stress test ruling. To counter this much higher qualifying rate, some alternative lenders will have the discretion to revisit their own income-to- debt-ratio (TDS) calculation policies. For example, presently these alternative lenders have the ability to approve mortgages with a 50% TDS (banks are more like 42% on average). Under the new stress test rules, alternative lenders will most likely have to increase the TDS policy to a higher figure to offset the higher qualifying mortgage payment under the stress test rate calculation. This means that a given income would by approved for a higher mortgage amount, even with the new stress test. ### Finalist - Canadian Mortgage Awards 2017 We are extremely proud, honoured and humbled to have been nominated and then chosen as a finalist in this year’s Canadian Mortgage Awards. The award category is for: Best Newcomer, Mortgage Broker Firm The award page can be found here. We’d like to thank all of our wonderful partners and clients. Thank you! The team at Pinsky Mortgages ### Vancouver (And Coquitlam's) Evergreen Line After several years of work, the much-anticipated Evergreen Line opened in December of last year. With it, B.C. now boasts the longest fully-automated rapid transit line in the world! Advantages of the Evergreen Line Fast, frequent, and convenient transit from Coquitlam to Vancouver via Port Moody and Burnaby Increases transportation choice and reduces auto useReduces travel time to and from work8,000 new jobs created About the Evergreen Line The 11km long SkyTrain rapid transit extends the SkyTrain network from Lougheed Town (Burnaby) Centre to Lafarge Lake-Douglas (Coquitlam). Travels a maximum operating speed of 80km/h15 minute ride from Lougheed Town Centre to CoquitlamFun Fact: At 79.6km, Vancouver’s SkyTrain system will become the longest fully grade-separated metro in Canada, surpassing the Toronto Subway system by several kilometres!The three-zone fare will cost $5.50By 2021, TransLink estimates that 70,000 people will use the Evergreen Line each day Six New Stations Burquitlam Station: east side of Clarke Road near Burquitlam PlazaMoody Centre Station: Port Moody transit exchange siteInlet Centre Station: North of Barnet HighwayCoquitlam Central Station: Coquitlam transit exchange siteLincoln Station: Northeast corner of Coquitlam CentreLafarge Lake-Douglas Station: East side of Pinetree Way Evergreen Route Description Lougheed/Burquitlam: The Evergreen Line will run north from Lougheed Town Centre Station. Burquitlam Station will be on the east side of Clarke Road near Burquitlam Plaza. Leaving Burquitlam Station, the line will cross to the west side of Clarke Road, before entering a tunnel towards Port Moody Port Moody: The Evergreen Line will emerge from the tunnel just east of Barnet Highway. It will travel at ground level along the south side of the CPR tracks to Moody Centre Station. Continuing east, the line will cross the CPR tracks just before Inlet Centre Station, located north of Barnet Highway. Coquitlam: The line will continue along the north side of the CPR tracks towards Coquitlam Central Station. Turning north, the line will run on an elevated guideway along the west side of Pinetree Way to Lincoln Station. It will then cross to the east side near Northern Avenue, before ending at Lafarge Lake-Douglas Station, north of Guildford Way. Funders Total Costs: $1.4 billion Province of British Columbia is contributing $583 millionGovernment of Canada is contributing up to $417 millionTransLink is contributing $400 million Community Growth The City of Coquitlam is emerging as one of Metro Vancouver’s hottest attractions for developers. City officials and developers indicate that when a rapid transit station is built nearby: Condo towers and apartments generally see a 5% increase in priceVacant lots that are zoned see a 25% increase in priceSingle-family detached homes can see values DOUBLE! Do you want to learn more about what’s happening in the real estate world around your neighbourhood? In this article, we talk about Coquitlam, Port Moody and others, but in many other articles, we look at other Vancouver and British Columbia interests. Please don’t hesitate to contact us if you have any questions. ### A Profile of Vibrant Burnaby Heights Burnaby Heights, or “The Heights” as it’s called, is a community in North Burnaby that’s lauded for its charm and accessibility.  The area boasts stunning views, great parks and trails, mom and pop shops, and no shortage of delicious eateries. It’s the kind of place where everyone seems to know each other. The area is located between Boundary Road to the west, Gamma Avenue to the east, Hastings Street to the south and Burrard Inlet to the north. It’s a mere 15-minutes to downtown Vancouver — with fast access to commuter routes via Hastings street and to the North Shore over Second Narrows Bridge. So, how did this bustling neighbourhood get to be what it is today? A Look Back Burnaby Heights came to life after Hastings Street opened in 1901 and the streetcar began operating to North Burnaby in 1908. After that, thousands of immigrants came to BC and merchants soon appeared. The first grocer set up shop in the Heights on Alpha and Hastings, followed by a second one shortly after on Willingdon and Hastings. Before World War I, most of the stores were located near Boundary and Hastings. That included a butcher shop, a hardware shop, and a grocery store with a druggist, bakery and print store. According to the Burnaby Heights’ website, from 1926-1954 “a number of factors helped shape North Burnaby. The Depression years from 1930-1939 lead to many bankruptcies and following that, World War II was a period of sacrifice, and growth did not begin again until the Post-war years. The newcomers to North Burnaby in this era were more varied than in previous times.” This is when the North Burnaby Board of Trade was established and played a big role in the widening of Hastings Street, street lights, garbage disposal, and a number of activities aimed at improving living conditions in the community. Burnaby Heights Today Today, the beauty of the Heights lies in its community feel and diversity. The vibrant commercial district has maintained its street-level shopping, but the number and range of shops have dramatically increased. The Heights has more than 350 shops, services and restaurants. The restaurants in the area serve dishes from around the world,  but if you like Italian, you’re in luck — many Italian restaurants are staples in the area, like Anton’s Pasta Bar and Cioffi’s Meat Market and Deli. While the Heights is a popular place, that can bring challenges. The city’s main commercial streets are also the main commuter streets, which means that thousands of cars pass through every hour. In fact, in one day more than 30,000 vehicles drive through that area, according to a study by Slow Streets. It’s a street with two different functions — for one, it’s a major thoroughfare, but also serves as a walkable shopping street. The opening of the Evergreen SkyTrain line may reduce some of the traffic that uses Hastings Street as an East-West connector. A Community-Oriented Neighbourhood Many Vancouverites are starting to catch on to the appeal of Burnaby Heights.  It’s increasingly being considered a desirable place to live in the Lower Mainland. Census data shows that the population in the area increased 14% from 1986 to 2006. However, the area tends to draw mostly families. It makes sense: several elementary schools and Burnaby North Secondary School are located in the neighbourhood and it’s close to downtown. Home ownership in Burnaby Heights is high, with a split of 65% owners to 35% renters among those living in the area. While the area has a large number of heritage houses, condo developers are continuing to build new developments on popular­ Hastings Street. The neighbourhood hosts a number of popular festivals and events. Burnaby’s biggest parade and street festival is known as “Hats Off Day,” where merchants acknowledge the community and their customers by taking their hats off in gratitude. It’s also where Giro di Burnaby is held, one of the best cycling events in the city. Hats Off Day I hope you enjoyed this tour of the many things to do and see in Burnaby Heights. Please feel free to reach out to me if you want to know more or are in need of a Burnaby mortgage broker. Want to learn more about the Metro Vancouver area? Check out this post. ### What's Your Best Mortgage Rate? “Mr. Mortgage Broker, please give me the best rate!” In the past, it was easy to give our clients the best mortgage rate available. Unfortunately, new government regulations have created a fragmentation of interest rates that make “giving you our best rate,” more complex. I wrote about these new government regulations in my blog: “The Complexification of Mortgage Rates.” Without reading the full article, it’s important to distinguish between what is “insurable” and “uninsurable.” An “insurable” mortgage is approved at 25 years amortization and at a higher rate than what a borrower would actually be paying (called the qualification rate – at time of this article, it is 4.64%). An uninsurable mortgage is any refinance, mortgage on rental properties, mortgages approved at 30 years amortization, and properties worth more than $1 million. Below is an infographic that outlines which scenarios allow you to get the best interest rate available, and what type of lender can provide these rates. Please note: I am assuming average to above average credit in the scenarios below. Best Rates – Monoline Lenders Insured Mortgages On all purchases with less than 20% down payment, insurance is mandatoryOn purchases with 20% down payment or more, insurance may also be obtained The absolute best rates are for mortgages that are insured by one of the three Canadian mortgage insurance companies: CMHC, Genworth or Canada Guarantee. When your mortgage is insured, the insurance company steps in to pay your monthly mortgage payments to the lender if you don’t pay. An insured mortgage is inherently a lower risk for the lender than a mortgage that is not insured. Great to Best Rates – Monoline Lenders Insurable, low loan to value Mortgages You have a large down paymentYour mortgage is for a purchase on a property under $1M in valueYour mortgage is approved at 25 years amortization at 4.64% When your mortgage can be insured, Monoline lenders take it upon themselves to insure your mortgage for you, making the mortgage less risky to them so that they can provide you with the lowest rates. However, insurance costs for lenders increase with mortgage loan to value. This increase in insurance cost is transferred to you, the borrower, providing you with slightly higher interest rates. Good to Great Rates – Banks and Credit Unions Uninsurable Mortgages orInsurable, high loan-to-value Mortgages On refinancesOn mortgages that require 30-years amortizationOn mortgages where properties are over $1M in value For uninsurable mortgages, our normal go-to lenders have higher interest rates because they are forced to insure their mortgages, making them pass the extra costs to you, the borrower. On the other hand, banks and credit unions are not required to insure their mortgages, making them the best fit for higher loan-to-value mortgages. Good Rates – Monoline Lenders, Banks, and Credit Unions Rental properties and Stated Income Rental propertiesStated Income Most lenders will increase your interest rate on rental properties because they see these mortgages as having a higher risk than ones on owner occupied homes. Also, lenders may also increase interest rate for self-employed individuals who need to prove a higher income than what they have stated on their tax returns. Highest Rates – Private Lenders Mortgages that cannot be approved through regular lenders Stated Income B SideEquity Mortgages When a stated income cannot be insured, lenders increase their interest rate to offset the risk of someone who cannot prove their income. An equity mortgage is one where a client has down payment or equity but no income shown. Lenders look at these files as having the highest risk. Pinsky Mortgages is one of the top mortgages brokers in Vancouver & BC. Call us today to see how we can help you get the best interest rate on your mortgage so you can buy your dream home! ### A New Plan for Vancouver's False Creek Flats You might have heard that the industrial area near Vancouver’s core, known as the False Creek Flats, is undergoing a dramatic transformation. Over the last couple of years, the City of Vancouver has been busy with a planning process aimed at unlocking the untapped potential of the area. To do that, it teamed up with Vancouver Economic Commission, as well as more than 3,600 people who weighed in with their input. Last week, a much anticipated draft plan was unveiled at an open house. So, what’s in store?  The plan offers a framework for creating a more productive, sustainable and integrated Flats. That includes plans to increase green jobs, support the presence of rail, celebrate arts and culture, create new public gathering places, and much more. Confused about where The Flats are? The area extends east from Main Street to Clark Drive and south from Prior Street to Great Northern Way. It’s less than a kilometre from downtown Vancouver. The Flats, by the Numbers Comprised of 450+ acresIt’s home to 500 businesses that span a variety of sectors like logistics, arts and culture, food, software and construction, and that employ 8,000 people63% of Flats is zoned industrial26% is zoned for mixed employmentThe median floor space for businesses is 3,000 sq. ft What’s the Plan for the Flats? Today, many people think that the Flats are underused. The plan covers a lot of areas to fix this. 1. Increased land area for jobsThe Flats Plan will increase employment floorspace from 5.4 million sq ft to an estimated 11 million sq ft. through new land use policies. 2. Job growth in new economic sectorsThe Flats Plan will increase jobs from 8,000 to + 30,000 (many will come from the new St. Paul’s hospital and Emily Carr University campus.) 3. A new economic development strategyVancouver Economic Commission is concurrently releasing an Economic Development Strategy to support new and innovative businesses. Let’s take a look… Health Hub The new St Paul’s Hospital and health campus will be housed on the north-west corner of the False Creek Flats. The goal is for the Flats to become a world-class integrated health care, research and teaching hub. Some features of the new hospital include single-patient rooms, highly specialized programs and services, new technologies and state-of-the-art spaces, and integrated care. It will employ more than 2,000 staff, and should open its doors in 2021-2022. The cost for the hospital and health-care facility is estimated at $1.2 billion, and the provincial government has already committed $500 million toward that. Check out this video of the concept. As for the current location of St. Paul’s Hospital, that’s likely to be replaced by high-rise condos. Creative Campus The Emily Carr University of Art + Design is moving from its current digs at Granville Island to Great Northern Way. The new 18-acre campus will accommodate 1,800 students and is expected to be completed this fall. It is being designed to achieve the LEED Gold Certification for sustainable construction. Housing Opportunities As for housing, the focus of the plan is on industrial uses for the Flats, but it does plan to bring an additional 3,000 units for those who work and learn in the flats. Student accommodation at the new Emily Carr University of Art and Design will also be explored. Benefits Local Serving New and improved local roadsNew and improved walking & cycling connectionsWalk the Line pathway and public amenity nodesLocal park renewal and improvementsChildcare facilities to support local job growthGreen infrastructure (rainwater management, renewable energy, etc.), water and sewer renewal and expansion District-Serving Innovation business spaces & programming to support local economyArts Factory renewal and expansionNew housing opportunities, including market and non-market rental to serve key groups such as artists, young workers and students City Serving New East-West arterialCentral Valley Greenway & Adanac connectionsService yard expansions (e.g. Fire facilities, Evans Yard and National Yard)Renewal of animal service facilityMillennium Line Broadway ExtensionDowntown steam system fuel switch plant What’s Next? The area clearly has a lot of untapped potential. Right now, the plan is soliciting feedback from various constituents, with the aim to present it to City Council in the spring. I’d love to hear what you think about this plan. Drop me a line to chat! Or if you’re in need of a top rated Vancouver mortgage broker, get in touch! ### Is the BC HOME Partnership Program Worth It? The short answer is "Yes". The long answer is: YES, the BC HOME Partnership Program (the Program) is worth it in almost all scenarios. This is a long blog; please don’t hesitate to contact us for any technical questions.Refresher: what the program is and how to apply. We will be looking at three scenarios where this interest free mortgage loan helps. Borrowers with less than 5% down payment,Borrowers with more than 5% but less than 10% down payment, andBorrowers with 10%+ down payment. Scenarios 1. and 3. benefit quite a lot through the Program, with the second scenario’s benefit to the client being muted. NOTE: In all of our scenarios, we have assumed that the borrower can qualify for the Program based on their income. Based on the math, almost all borrowers will qualify for the Program unless they have large debts. First, it’s important to note a couple items:1. The loan costs $560 in registering and in paying BC Housing’s legal fees. This amount is tacked on the loan and does not have to be paid up front. 2. CMHC Rate Premium TableBorrowerBC HOMETotal DownCMHC < 5% < 5% < 10% 3.85% < 10% =< 5% < 15% 3.60% => 10% =< 5% => 15%, < 20% 1.80% NOTE: on March 17, 2017, the CMHC rates will change: 3.85% becomes 4.50%, 3.60% becomes 4.00% and 1.80% becomes 2.80%. Now that that’s out of the way, let’s go straight to a few scenarios. Scenario 1: Less than 5% down payment Let’s say we have a purchase price of $400,000 and our borrower only has $10,000 as their down payment. The down payment here is 2.5% and CMHC requires all borrowers to have at least 5% down payment; this is where the Program comes in handy. A client here would now be able to purchase the property with a matching 2.5% from the Program.ValuePercent Purchase Price $400,000 100% Borrower $10,000 2.50% BC HOME $10,000 2.50% Mortgage $380,000 95.00% CMHC Fee $14,630 3.85% 1st Mortgage $394,630 98.66% In Scenario 1, the borrower can purchase a property that they would not normally have been able to purchase. It’s important to note although this borrower has now purchased his or her property, they are now “underwater.” What this means is that all the mortgages are now more than the value of their home. In this case, we are at 101.3% of value. 1st Mortgage $394,630 98.66% 2nd Mortgage $10,560 2.64% Total$405,190101.30% Scenario 2:  5% but less than 10% down payment In this scenario, we’re going to assume 5% down payment from the borrower for the same purchase price. In this case, the borrower would NOT NEED the the Program. We’re going to compare not taking the interest free loan vs. taking it below:No BC HOMEBC HOME Purchase Price $400,000 $400,000 Borrower $20,000 $20,000 BC HOME  $0 $20,000 Mortgage $380,000 $360,000 CMHC Fee $13,680 $12,960 1st Mortgage $393,680 $372,960 2nd Mortgage $0 $20,560 Total$393,680$393,520 The comparison above doesn’t tell the full story… It shows that we’re very close in terms of total mortgage amount, however it doesn’t say how much interest a borrower may pay over the next five years. Remember, the loan is interest free! So let’s make a couple of assumptions: our first mortgages’ payments are based on 25 years amortization and a 2.79% rate.No BC HOMEBC HOMEDifference 1st Mortgage $393,680 $372,960 $20,720 Payment$1,821$1,725$96 The above chart shows that each payment is $96 less if they get the Program’s interest-free loan. In Scenario 2, the borrower saves 5 years of interest on the BC HOME Partnership Program loan. After Year 5No BC HOMEBC HOMEDifference Total Payments $109,254.77 $103,504.52 $5,750 1st Mortgage $335,128 $317,490.00 2nd Mortgage $0 $20,560 Total Mortgage $335,128 $338,050 ($2,922) Financial Benefit$2,828 The chart above is stating that there is a $2,828 benefit to getting the interest-free loan after 5 years than not getting the loan at all. Scenario 3: 10% or more down payment This is where the benefits are a little larger… Let’s say a borrower has 10% down payment and they get another 5% from the Program:No BC HOMEBC HOME Purchase Price $400,000 $400,000 Borrower $40,000 $40,000 BC HOME $0 $20,000 Mortgage $360,000 $340,000 CMHC Fee$8,640$6,120 1st Mortgage $368,640 $346,120 2nd Mortgage $0 $20,560 Total$368,640$366,680 In the scenario above, we actually have a lower overall mortgage amount, even though we’re charged $560 for the legal fees to BC Housing. The reason why there is this difference is because the CMHC fee went from 2.40% to 1.80%. After Year 5 No BC HOME BC HOME Difference Total Payments $102,305.62 $96,055.83 $6,250 1st Mortgage $313,812 $294,641.58 2nd Mortgage $0 $20,560 Total Mortgage $313,812 $315,202 ($1,389) Financial Benefit$4,860 In Scenario 3, we are almost $5,000 better off having successfully applied to the BC HOME Partnership Program. In Scenario 3, the borrower is benefitting from lower CMHC premiums as well as the savings on the interest free loan. Please don’t hesitate to get in touch with us if you would like more information about the BC HOME Partnership Program. We would be happy to help with your mortgage needs. Eitan Pinsky Footnote: I have not assumed any payment strategy on the part of the borrower after 5 years… The ability to pay off the loan after 5 years would be a very important discussion piece I, or any other Pinsky Mortgages team member would have when we discuss whether this Program makes sense for them. ### How to Apply for the BC HOME Partnership Program The new BC HOME Partnership Program (the Program) starts January 16, 2017. Application Link The BC program has the BC Government contributing an amount to first time home buyers who have already saved up for their down payment, matching up to 5% or $37,500 of the purchase price. This is a 25 year loan that is interest AND payment free for the first 5 years. After 5 years, a home buyer would have to repay the loan amortizing over 20 years. For complete rules on your applicable status, check out our Interest Free Loans Explained page. 5 Steps to Your Application 1. Get a Pre-approval from your Mortgage Broker. This pre-approval needs to show that you will have mortgage insurance. 2. Apply to the Program and receive confirmation of eligibility. The BC HOME Partnership application takes about 15 minutes to complete and about 5 business days for confirmation. Supporting Documentation will be: Provide one of: CDN birth certificate or PR Card or Citizenship CardProvide one piece of government-issued photo ID.Provide proof of income by way of Notice of Assessment.Provide pre-approval for high-ratio mortgage. Once your eligibility has been confirmed, please give this document to your mortgage broker. 3. Find your Home – Make an offer “Subject to Financing” With this program, there are no pre-approvals, buyers only receive a confirmation of eligibility. We are told that we will need a minimum of 5 business days for both the lender and BC government to approve the mortgage and home you want to buy. 4. Apply back to the the Program and lender with your accepted offer. You will get your final approval for this insured mortgage from the program, lender and insurer. Remember, expect a 5-day turnaround. Your approval will have conditions attached 5. Upon funding, the lawyer/notary will register the loan as a second mortgage. It’s important to note that the Program legal costs will be paid by the new home buyer. We don’t know what this will be yet but they will be disclosed to the home buyer upon approval. Beneficial for some, not for others This is a great program for some people. So far, for those who can afford it and are taking large loans, this can be a very financially prudent move. Stay tuned for more. ### Sizing Up Vancouver's Wooden Skyscrapers Brock Commons at UBC (credit: Acton Ostry Architects) The high-rises that make up our beautiful skyline are built primarily with steel and concrete. That’s the way it’s been for much of the twentieth century. However, one of our oldest materials has experienced a renaissance in recent years: there’s a growing movement of using timber to build towers. Why Wooden Skyscrapers? They are energy efficient.Faster construction timelines are possible (often half that of a concrete structure). That’s because large wood panels can be prefabricated off-site and quickly assembled and installed on-site.Wood emits less carbon dioxide compared to steel or concrete buildings.It’s lightweight — a wooden building is about a quarter of the weight of an equivalent reinforced concrete structure. It’s also quieter to build with. Clearly, wood offers a number of benefits. So why hasn’t it caught on earlier? Two concerns have dominated the arguments in eschewing wood when building high — 1. Durability and 2. Combustibility. Many have questioned whether wood is appropriate for tall structures. Recent advances in technology have overcome the durability question: The biggest is the development of a highly engineered material called cross-laminated timber (CLT).CLT is a wood panel made from three or more layers of lumber that are stacked at right angles and glued together. The floor slabs are almost as long as a bowling lane and can be as thick as 12 inches.It gives more rigidity and strength to wooden structures. Cross-laminated timber at UBC (credit: Acton Ostry Architects) The second worry is combustibility. Skeptics think that wooden skyscrapers are fire hazards. History is filled with examples of cities ruined by fires, like the ones in London and Chicago in the 1800s that resulted in wood being banned from tall structures. However, technology has changed. Previous fires were started from small pieces of wood. The combination of the composition and the thickness of these slabs prevent fire from spreading by charring when exposed to flame. Vancouver’s Own Wooden Skyscraper Vancouver is paving the way in using wood as a construction material. Led by Acton Ostry Architects, the Brock Commons dormitory at the University of British Columbia is one great example. Once it’s finished this year, it will house more than 400 students. At 18-storeys (174 feet tall), its poised to be one of the tallest contemporary buildings in the world that is made mostly of wood. It likely won’t hold that title for long though, since many more are in the works.It’s a hybrid structure, with a concrete core for sturdiness and drywall for protection against fire.The prefabricated nature of the project results in a quick construction time — a rate of one floor every three days.It’s estimated that Brock Commons saves the environment 2,432 metric tons of CO2, or the equivalent of taking 500 cars off the road for a year. Prior to this, one of the tallest mass-timber buildings in the west was also in B.C., at the University of Northern British Columbia in Prince George. The Wood Innovation and Design Centre is six floors and designed by a major advocate of wood, Michael Green. Wood Innovation and Design Centre (credit: Michael Green Architecture) What’s Next Many other countries have started to push the frontiers of using wood as a construction material. New buildings have started to sprout up in cities such as Norway, Australia and Amsterdam, just to name a few. Vancouver has plans for more, too. Shigeru Ban’s first Canadian project in Coal Harbour has been given the green light. It’s called Terrace House, and its goal is to become one of the tallest timber skyscrapers in the world. One of the reasons why we haven’t seen more interest in wooden skyscrapers is because of regulations. In B.C., for example, the building code allows the construction of wood buildings as high as six storeys. A site-specific regulation has to be established for each tall wood building. More and more architects and engineers will need to persuade building departments to approve high-rises made of timber. The hope is that with the success of wood buildings like the UBC dormitory, people will start to accept that this traditional material is safe, sustainable and economically smart. Terrace House (credit: PortLiving) If you want more information on wooden skyscrapers, please don’t hesitate to get in touch with us! ### Home Price Economics & BC's Interest Free Loans On December 15, 2016, the Government of British Columbia announced the BC Home Owner and Equity PartnershipBC HOME Partnership) to help first time home buyers with their mortgages.   The plan is to provide interest free loans that can be put toward down payments. The Province’s goal is to provide repayable downpayment assistance loans to first time home buyers. This is supposed to increase affordability. In a previous lengthy blog article, I wrote about the program’s finer details. Below is a summary of my main points: The program will have almost no impact on home buyers’ affordability.Home prices will not be pushed up!There was no consultation. Even today, more than two weeks after the announcement, not one lender has verified they will allow this program.In order to increase affordability, the city, and not the provincial or federal governments, needs to increase supply. This can be done with rezoning. I applaud the BC government for trying. However, I think that they misjudged and came up with an inappropriate solution to a very complex program. Demand Side Economics Affordability for first time home buyers (and second time home buyers, for that matter) is a big issue. Affordability can be broken down into two camps: supply and demand. I love economics!! Give me a call if you want a crash course The image to the left shows what happens when there is an increase in demand based on a certain supply – the prices increase. In 2015 and 2016, Vancouver real estate saw record demand and housing speculation ran rampant. The “crazy” demand increased property prices to unprecedented levels.  In response, both provincial and federal governments instituted demand-side regulations to curb property appreciation (some of these measures addressed the belief that offshore buyers played a big role in the burgeoning housing prices). If the demand had actually been curbed, D1 would have returned to D, but that didn’t happen; prices have stayed high.  This happened because demand side changes decrease affordability for most and hurt the average consumer the hardest; in other words, many affluent buyers were/are still able to purchase! In 2016 alone, the demand-side measures have been: Stress Test and Decreased AffordabilityBulk Insurance Changes: Complexification of Mortgage RatesIncreased Property Transfer Tax for ForeignersVancouver Empty Homes TaxCapital Gains Exemption Loophole Closed The demand-side measures above have been successful in decreasing the number of sales but not average prices. Yes, prices have decreased slightly on the very high end ($2+ million) but they have not moved at lower prices. A recent article from the Real Estate Board of Greater Vancouver states that new listings are now inline with the region’s 10-year average. However, in the same article, we have sales-to-active listings at around 26%. “…downward pressure on home prices can occur when the ratio dips below 12% for a sustained period of time, while prices experience upward pressure over 20%.” Supply Side Economics On the supply side, however, we have had some, but very limited success (as compared to size of the problem): Vancouver Laneway Homes: 2,500 have now been approved.Cambie Street Corridor has been rezoned and is being developed.Oakridge Centre (when will this happen?), The River District, and much more… Much more needs to be done in order to increase supply of housing! From what I’ve read, UBC Professors Tom Davidoff and Tsur Somerville have excellent views. Want the best mortgage broker Vancouver has to offer? Get in touch with us today! ### BC Interest-Free Mortgage Loans Explained (Finally) On December 15, 2016, the British Columbia government announced the BC Home Owner and Equity Partnership (BC HOME Partnership) to help 1st time home buyers by providing interest free loans to help with down payments. The Goal (as per the Province) To provide a repayable down payment assistance loans to 1st time home buyers. The Goods Must be a 1st time home buyersHousehold income must be below $150,000Max property purchase price of $750,000Must have under 20% total down payment and high-ratio insuredMax loan of $37,500 or 5% of the purchase priceMust match your own down paymentInterest and payment free for 5 years (interest at market rates thereafter)After 5 years, payments are amortized over 20 yearsQualified at 20 years amortizationRegistered as a second mortgage on titleProgram runs between January 16, 2017 to March 31, 2020.The BC Home Partnership loan is due and payable in full if home is no longer the homeowner’s principal residence in the first 5 years.Homeowner must repay the loan if property transfers ownership (sold). Because the payments are amortized over 20 years, after your initial interest-free and payment-free 5-year period, your payments will be about $60 per $10,000 borrowed. In most cases, the CMHC premium will increase by $250 per $100,000 borrowed. This is due to the 3.60% normal CMHC premium increasing to 3.85% due to non-traditional sources. Example 1 Household income of $90,000 and $15,000 as a down payment.We are using the a high income so income qualification is not a factor. Before the BC HOME Partnership, this household would have been capped at a purchase price of $300,000, or 5% of the purchase price. Their CMHC premium here is $10,260 (3.60% of $285,000). After the BC HOME Partnership, this household can match their $15,000 down payment for a total of $30,000, and purchase a property for around $400,000. The CMHC premium here would be $14,245 (3.85% of $370,000). This program has increased our household’s purchase power by increasing their down payment.*Some lenders already allow buyers to use lines of credit to increase their down payment. What has changed here is that the BC HOME Partnership Program’s borrowed funds are qualified at 20 years amortization at 4.64% and lines of credit are qualified as 3% of the outstanding balance used. The former is about 6 times easier to qualify for than the line of credit. Example 2 Household income of $149,000 and $50,000 down payment.We are using the highest income possible so income qualification is not a factor. Before the BC HOME Partnership, this household could purchase a $750,000 property (CMHC rules of 5% down payment on the first $500,000 and 10% thereafter). The CMHC premium here would be $25,200 (3.6% of $700,000 mortgage). After the BC HOME Partnership, $37,500 can be provided for a total down payment of $87,500. The CMHC premium here would be $23,850 (a $1,350 difference).*Remember, the difference in CMHC premium is over the course of the entire mortgage life. In this case, the program provides for $37,500 in extra cash that is interest free and payment free for 5 years. Without the Program, the household would pay a monthly mortgage payment of around $3,370. With the program and down payment help, our monthly mortgage payment decreases to $3,190. After 5 years, our household who did not use the Program continues to pay $3,370 (provided interest rates stay the same). The household that used the Program will now have slightly higher payments at around $3,395. The benefit to this buyer is a lower monthly payment for their first 5 years and a decrease in total mortgage costs of around $6,250 (comprised of $1,350 in CMHC fees and around $4,900 interest costs). Example 3 Household income of $80,000 with a down payment of $25,000. Before BC HOME Partnership, this household could purchase a $405,000 property with $25,000 down payment. The cap here would be household income as a $380,000 mortgage plus CMHC fees would take up all of the household’s mortgage servicing requirement. After BC HOME Partnership, the household may be able to purchase a $430,000 property with $25,000 down payment and $25,000 from the government. This would only work if lenders do not assume a loan payment on a client’s gross debt service ratio.(There are two affordability ratios: GDS and TDS. GDS must be 39% of gross income or lower and TDS is at 44%.) If lenders use GDS, then this program would not work to increase a household’s purchasing power and their total purchase price would still be $405,000. Impacts Not very much! Yes, households with low down payments can purchase properties that would have been out of their reach, but these households must have sufficient incomes to take on the added debt. The added affordability here is … almost negligible. But, as seen in example 2, there are some savings going on… However, the 20% decrease in affordability rule changes that the Government of Canada put in place on October 17th far outweigh any benefit of this program. If we are serious about changing affordability, all three levels of government have to help. The federal government instituted affordability changes (mixed opinions and results not in), the provincial government brought in a 15% property transfer tax for foreign buyers and now this new (strange) program, and the city is working on rental housing and some densification. It is my opinion that the municipal government has not done enough to help housing supply. Still In the Dark There are too many unanswered questions. Will all three insurers approve of this program?Which lenders will approve of this program? Currently, almost all lender policies prohibit second mortgages.Will lenders require an assumed payment for brokers to input for GDS? If yes, then any increase to a household’s purchase power will be wiped out.Can the saved down payment for a household be gifted from a family member? As soon as we have more information, we’ll update this page. In the meantime, please don’t hesitate to call us for all of your mortgage needs. We’re available to meet in Vancouver and the lower mainland and available by phone at your convenience. Warmest Regards,Eitan ### Vancouver Laneway Living Laneway homes have been growing in popularity lately. However, many Vancouverites are unfamiliar with the concept. So, what exactly are laneway homes? As the name implies, a laneway home is a smaller, detached home tucked away in the rear of a residential lot — where a garage usually sits. Laneway homes come with a host of benefits, not least of which is their affordable price tag in a city known for its exorbitant prices. They range from $150,000 to $300,000 to build. Laneway homes enable people to live near their jobs, as well as within easy reach of transit. Plus, they are a desirable option for young families or elders who want to live closer to their relatives. A laneway home by Smallworks Laneway Affordability Bump: A laneway home or basement suite can vastly increase a borrower’s affordability. A portion of the rental income can be deducted from the assumed mortgage payments. For instance: A $70,000 salary can purchase a $600,000 with 20% down (or get a mortgage of $480,000). This same $70,000 salary, purchasing a home with a basement suite renting for $1,000, would be able to purchase a $850,000 home with 20% down (or get a mortgage of $680,000). Check out our mortgage affordability and qualifier calculator. A Small House, But Big Trend While the laneway revolution is in full swing in Vancouver, similar houses have actually been around for quite some time. In fact, they date back to more than a century ago when backyard cottages existed in the Strathcona neighbourhood. They have experienced a renaissance in recent years. That’s because in 2009 city leaders officially approved laneway houses in Vancouver with the EcoDensity initiative. Since then, more and more compact dwellings have started to spring up in backyards across several neighbourhoods. In 2010, there were 192 permits issued and in 2011, 229 permits issued. Those numbers jumped to a total of 357 permits in 2014.Since 2015, it’s estimated there have been a whopping 2,000 laneway home applications.You can now build a laneway house on any lot 32 ft. or wider in any RS single-family zone. They can be a maximum of 900 ft2.How To Guide from Vancouver.ca A Peek Inside Credit: Lanefab Design/Build What does a laneway home look like? They have many of the same features as a regular house — just smaller! It’s usually a single-story home, with one or two bedrooms, an open space and full kitchen and bathroom. Many are built to be energy-efficient and make the most of the natural light available. If you want to check out some cool laneway homes, the Vancouver Heritage Foundation (VHF) offers several tours per year. Read more about them here. A Twist on Traditional Laneway Suites With the success of laneway homes, plans have emerged to expand the initiative to mini apartment buildings in the West End. They’re the first of a new kind of infill that planners hope will produce a new stream of homes. The city has already approved the first four buildings with 47 units in total, with many more expected. These mini-apartment buildings range from three and a half to six stories, with sizes that vary from about 350 ft2 for bachelors to 1,000 ft2 for three bedrooms. Laneway housing in Vancouver (credit: Globe and Mail) Community Laneways On the community side, similar facelifts are occurring to the often-overlooked urban alleys. The idea is to enliven alleys in the core of the city, and turn them into vibrant and family-friendly public spaces where people can gather, play and socialize. There are a few in the works in the heart of Vancouver. Each has its own identity and offers a unique experience. The laneway located south of West Hastings street between Granville and Seymour streets was the pilot project. It was led by the Downtown Vancouver Business Improvement Association. The alley, which is already completed, boasts bright tones of pink and yellow. It also features basketball hoops and cool furniture.Another alley is planned for east of Granville Street between Smithe and Robson streets. It will be a festival-type space.There’s also an alley planned for south of Alberni Street between Burrard and Bute streets, which will host independent craft-type kiosks. The reimagined alley on West Hastings street (credit: More Awesome Now) As you can see, laneways across the city are being dramatically transformed, and the trend seems to bring a number of exciting benefits with it. While laneway homes may not be a silver bullet to Vancouver’s housing affordability problem, it’s a smart idea to make the most of these otherwise neglected spaces. We really enjoyed writing this article for you! If you want more information on laneway homes and/or laneway living, please don’t hesitate to get in touch with us. If you’re interested in the best Vancouver mortgage solutions, best rates and best mortgage service for your home financing needs, please give us a call! We’re ready to help! ### "Complexification" of Mortgage Rates This is probably going to be the most interesting mortgage tidbit you’ll read this month! And yes, I did make up a word. Comparing rates is going to get a whole lot harder! We are now going to see at least 3 to 4 different rate classes for mortgages in Canada. PreambleThe Canadian mortgage market used to be very simple. We had the big banks, credit unions, and trust companies. Almost 20 years ago, the Canadian government and CMHC decided to put their weight behind Canadian mortgages by guaranteeing an insurance payout. Yes, the Canadian taxpayers are on the hook if CMHC goes under. In the United States, Fannie Mae and Freddie Mac (the insurance agencies down south) had no such guarantees. Before we go any further, Canadian mortgage regulations were and are much tighter than American mortgage regulations. Canada also allowed lenders to pay for mortgage insurance for their borrowers, even though it may not be required. Borrowers would not know that their mortgage is insured, rather the lender would pay for and insure the mortgage on the “back end” in order to make the mortgage less risky. IE if the borrower does not pay, the insurer would pay the lender (just as they would pay if the borrower had less than 20% down payment and was charged for insurance themslves). Furthermore, Canada allowed its mortgage lenders to securitize their mortgages and sell them to investors. The securitization (the process of taking assets and transforming them into a security) of mortgages allowed investors to purchase pools of mortgages, knowing there would be a guaranteed return. The return here is the interest rate on the various mortgages. Now, mortgage investors are looking at two things: investment return and mortgage risk. The lower the risk of an investment, the lower return an investor is willing to see. Because lenders can insure their mortgages, they were able to sell them to investors at higher prices. Conversely, investors provided lenders with cheaper money to lend out, which in turn, provided for better interest rates for borrowers. What ended up happening was the emergence and major growth of mortgage finance companies (Monoline Lenders). These lenders, encouraged by access to cheap capital, set up efficient mortgage underwriting (approving) operations and were able to provide flexible mortgage products and better-than-the-banks interest rates for their clients. The overwhelming majority of these lenders’ mortgages are insured by the lender, packaged up and sold to investors. PHEW, that was a mouthful! So What’s Changed/Changing? New Mortgage Rules Part 1The government announced new mortgage rules. As of October 17th, 2016, all insured mortgages must pass a stress test. What this means is that people who had under 20% down payment, would have about a 20% decrease in their affordability. Ouch. New Mortgage Rules Part 2Starting November 30th, 2016, all mortgages that are insured (even “back end” insured by lenders), must be approved as though borrowers have less than 20% down payment. Further, the cost for lenders to back end insure their mortgages is going to more than double. OK, seems pretty innocuous right? Wrong – it’s pretty bad actually… What this means is that mortgages that would normally have been safe, conservative investments for lenders, are now much harder to come by. This is due to CMHC not insuring many mortgages that would have normally been insured in the past. Remember, an insured mortgage (even if the borrower does not know it is insured on the back end) is a safer investment, regardless of the loan to value that the lender has. All of this boils down to an increase in interest rates for many transactions! Example: A mortgage loan with 10% down payment, or 90% loan to value of the property, will have an interest rate, of lets say, 2.49%. Now, if we take this same loan and increase the down payment to 20%, you would think that since the lender has a lower loan to value, they would have a lower risk. This conventional wisdom is wrong now because this mortgage may no longer be insured by CMHC. And if the lender does back end insure the mortgage, it costs them more to do so than previously. This cost is being passed on to borrowers. We will now have lower rates for loans where borrowers pay less than 20% down payment because they will be paying the insurance against any mortgage non-payment. Commentary: One could argue that lenders who do not back end insure, namely the big banks, will have an advantage over mortgage finance companies that overwhelmingly back end insure. However, this argument has been proven wrong as RBC already changed their rate tables to include lower rates for mortgages that are insured or insurable (25 years amortization and under) and those that are not. Since the new rules are coming into effect tomorrow, we have already seen announcements coming out from various lenders and we can expect interest rates to look something like the table below:Insured MortgageInsurable MortgageUninsured Mortgage Best Rates Higher Rates Highest Rates Client Pays Insurance (Generally less than 20% down Payment) Lender Pays Insurance (Passes off Higher Costs to Borrower) Cannot Obtain Insurance Rate of X Rate of X + 0.15%* Rate of X + 0.25%* *Best guesses with info available as of November 29. Requirements for Insurance:Uninsured Can be: Mortgages for Purchase Transactions Only Mortgages for Refinances Owner Occupied or Second Homes Only Rental Property Mortgages Purchase of a property whose value is under $1M Amortization over 25 years Maximum Amortization of 25 Years Minimum Credit Score of 600 Based on what I’m seeing, it seems as though there will be at least three different rate classes in Canada going forward, with one lender providing up to five different rate classes… On the Plus Side…? In all honesty, I’m not sure there is a plus side. These measures have decreased affordability and increased interest rates! Furthermore, the measures have created a climate that benefits the big banks because they do not have to back end insure their mortgages. The goals of the government here seems to be to cool the housing market and decrease home debt by attacking mortgage lending. There are arguments that these measures may not work for specific markets but the general consensus is that it will. Mortgage Brokers, Realtors and borrowers will have to tighten their belts in 2017! But, you’re looking to purchase in the future and your market’s homes do in fact decrease in value, you’ll be better for it when you do purchase. What’s Next? Talk to your Mortgage Broker! Preferrably Pinsky Mortgages. Well, you should always talk to a Mortgage Broker… but if you’re confused that the rate you were quoted is higher than expected, it may be because your mortgage falls into a new, higher rate class. Don’t get discouraged, and get the facts! It’s possible to make your mortgage insurable through education and mortgage engineering! Thank you for reading this long but informative letter! Please don’t hesitate to ask me more questions – I’m available for you at your convenience. Eitan Pinsky778-990-8950or Contact Me ### Mortgage Rules Changes - Oct 3 '16 On October 3, 2016, the Federal Government tightened mortgage rules and closed a popular tax evasion loophole. The Financial Post has a great article about the changes (with videos). I’ve summarized the changes below in three categories: 1. Harder to Qualify for a Mortgage2. Capital Gains Exemption Loophole Closed3. Portfolio Insured Lenders Crippled Harder to Qualify for a Mortgage Starting October 17th, 2016, purchasers with less than 20% down payment will need to qualify at the Canadian Benchmark rate of 4.64%. Previously, a variable rate or a term of less than 5 years required this benchmark rate, but now all rates (including 5-year fixed rates) require it. Example: Prior to Oct 17, 2016, a $60,000 salary would allow for a purchase price of $400,000 with 10% down payment. The mortgage here would be $368,640 (inclusive of a $8,640 CMHC fees). After Oct 17, 2016, this same $60,000 salary would allow for a purchase price of $325,000 and a CMHC mortgage of around $291,840. This is about a 20% decrease in affordability! Commentary: The ability for people who have less than 20% to put down is negatively affected and I believe that first time home buyers are affected the most. Due to this new regulation, those affected qualify for purchases of approximately 20% less. *Additional Important Points The new, tighter rules affect new mortgage insurance applications received on October 17 or later.This does not affect prior committed mortgages.Pre-approvals are affected. A pre-approval is approval from a lender and not the insurer. If you have a pre-approval, it’s extremely important to ask your favourite mortgage professional (PinskyMortgages.ca) if you are affected.Applications received on Oct 3rd and before Oct 17 are not affected, provided that the mortgage is funded by March 1, 2017.Homeowners with existing insured mortgages, or those renewing existing insured mortgages are also not affected. Capital Gains Exemption Loophole Closed The government requires property purchasers to be residents in Canada during the time of a purchase in order be exempt from capital gains taxes. Furthermore, families will only be able to designate one property as the family’s principal residence for any given year; sales of principal residences will now be reported on income tax returns. Commentary: This should have been done a long time ago. Portfolio Insured Lenders Crippled Starting Nov 30th, 2016, Monoline lenders who back-end insure their mortgages will be required to have all their mortgages qualify as though borrowers are paying less than 20% down payment. Example: Before Nov 30th, a family with combined income of $100,000 and with $300,000 down payment would be approved at all lenders for a loan of approximately $750,000. After Nov 30th, this same family would be approved at banks and credit unions for $750,000. A lender who bank-end insures their mortgage would only qualify the client for a mortgage of around $540,000. Commentary: This has extremely negative affects… The effects aren’t visible at the surface but if you delve deeper, I believe they become much more sinister. This particularly affects many flexible lenders who, for instance, have much lower payment penalties on mortgages. Now, the playing field for conventional mortgages (more than 20% down) will not be equal when it comes to the banks, credit unions and monoline lenders. This will create less choice for borrowers who have 20% or more. Less choice generally means worse options for consumers. You can bet interest rates and mortgage flexibility will suffer. Summary: So Why Now? So why did the government implement rule that seems to hurt consumers? Why now? I blame house price appreciation, speculation (of all kinds) on the consumer side and the media attention our housing market has received. The government says it is worried about a Canadian housing crisis. Since these new rules make it more difficult for consumers to obtain mortgages, the government is hoping that this “cools” the housing market. Further, the government is unhappy with the levels of debt that Canadians are taking on. The qualification rule is meant to curb some of that. For Vancouver and surrounding areas (and maybe Toronto), this new rule will definitely price-out some buyers, especially those with less than 20% down payment. What I don’t understand is the change to portfolio insured lender mortgages… The only answer I can see is that the government is afraid that even conventional mortgages (mortgages that secure 80% or less of the value of a property) are still a risky asset. If this is the case, why hinder one type of lender and not the others? =======Thank for reading. For more information, or to see how this affect you and your mortgage financing, please contact Eitan Pinsky at eitan@pinskymortgages.ca or at 778-990-8950. ### Companies That Call Vancouver Home "Headquarters Vancouver" IT’S NO SECRET,IT’S PRETTY AWESOME HERE! We all know just how amazing Vancouver is to live in, but did you know that Vancouver is one of the very few cities in the world where people actually live AND work in it’s core? “Vancouver frequently ranks highly as one of the world’s most livable cities, and recently was ranked as the best city to live in North America. Its scenic location near the ocean, tucked up against the North Shore mountains, makes living in Vancouver an ideal base for year-round exploration”… Vancouver clearly has a lot to offer the business world as well – check out all of these world class companies that are based in our very own Vancouver, BC. What attracts Vancouver based companies? Vancouver is consistently rated as one of the most livable cities in the world. Enough Said!!!… The digitization of the workplace, growth of Internet and mobile communications and e-commerce and the increasing ease of starting a tech company due to the abundance of low-cost cloud-based software have prompted many Vancouverites, along with entrepreneurs elsewhere, to start companies. “Why do these disruptors have to be in San Francisco?” says Hootsuite CEO Ryan Holmes. “They can be anywhere.” Elsewhere, a lack of good jobs since the recession is also a factor. The tech industry in B.C., driven by Vancouver’s startups, is generating about 250 new companies each year, and growing at an annual clip of over 6 per cent, according to the Vancouver Economic Commission. Potential risks for starting up in Vancouver But talk to any hot tech entrepreneur in the Lower Mainland and you will hear the same story: While the city is awash in startups, “there is an absolute shortage of experienced and talented senior executive-level people” to steer such firms into giants, says Alex Fernandes, CEO of Avigilon Corp., a high-definition surveillance technology maker. Constraints on growth could compel companies to prematurely sell or move, a chronic situation in Canada. Coaxing top executives to a world-class tech hub in the making is proving to be a challenge – and not just because of Vancouver’s high housing prices. “Our ability to attract those sorts of individuals [to Vancouver] … those are the pinch points right now,” says Bill Tam, president of the B.C. Technology Industry Association (BCTIA). Vancouver’s high-tech hurdle: Attracting top-level talent HOW ABOUT VANCOUVER AS A TECH HUB AS WELL? Not only are there hundreds of companies that call Vancouver home for their head offices, but Vancouver is also among the Tech Hubs of the world! SO THESE COMPANIES THAT YOU KNOW CALL VANCOUVER HOME! LULULEMON Founded in 1998, Lululemon is now practically synonymous with yoga apparel in North America. The company, which designs and sells pricey yoga apparel and accessories, says its ‘vision’ is ‘elevating the world from mediocrity to greatness.’ Surfing and snowboarding enthusiast Chip Wilson founded Lululemon in 1998, shortly after taking his first yoga class in VancouverWent public in 2007Lululemon refers to its store clerks as ‘educators.’ The company says its goal is to train its staff so well they can positively influence their families and communities as well as customers coming into the storesLululemon’s moisture-wicking fabrics have proved so popular with the yoga crowd that now everyone’s getting into the game: Nike, Gap and even Loblaw’s Joe Fresh have developed their own yoga linesLululemon’s corporate manifesto is printed on its bagsThe Lululemon name was chosen in a survey of 100 people TOP 100 BC COMPANIES BY REVENUE: Telus Corporation – $12 Billion in RevenueTeck Resources Ltd. – $8.6 Billion in RevenueJim Pattison Group – $8.4 Billion in RevenueFinning International – $6.9 Billion in RevenueBC Hydro – $5.4 Billion in RevenueICBC – $5.0 Billion in Revenue Check out the full list hereFYI: Teck Resources is Canada’s largest metals and mining company. Formed in an amalgamation of Teck and Cominco in 2001. FYI: Finning International Inc. , headquartered in Vancouver, British Columbia, Canada, is the world’s largest distributor of Caterpillar products and support services. 1-800-GOT-JUNK The company’s business model consists of taking an old activity, junk or trash haulage, and giving it a ‘clean’ image through branding and marketing. According to founder and CEO Brian Scudamore, “It was just a different spin on an industry, which was historically a very fragmented, dirty industry.” The company keeps 61.3% of collected items out of the landfill by recycling and donating! They were featured as Canada’s “most engaged workplace” in 2013 and recognized it in 2012. In 2011, Scudamore was featured on Undercover Boss Canada and staff members won money for charity on the first season of Global Television’s Canada Sings When Brian Scudamore was a kid, he didn’t have bookshelves piled high with stuff or toys scattered around his room—and his 4-year-old daughter sure won’t either. “In our house, we don’t have anything in our home that we don’t either use or love,” Scudamore says. “I don’t like junk.” But when Scudamore is at work, junk is his buzzword. His multimillion-dollar business, 1-800-GOT-JUNK?, collects and hauls unwanted goods to recycling facilities, resale shops like The Salvation Army and to the landfill. Got junk? Scudamore wants it. FUN FACT: Cameron Herold’s book, Double Double was created out of his participation with, and him being instrumental in 1-800-GOT-JUNK’s success. Cameron Herold was Brian Scudamore’s CEO. This book is one of my own personal favourites and speaks to doubling your income/business success. If you want a copy, let me know! HOOTSUITE The world’s most widely used platform for managing social media, available in 16 languages and more than 175 countriesOver 10 million users including more than 800 of the Fortune 1000 companiesPioneered social media management when it launched in 2008Close to 1000 employees, spread out across Vancouver, San Francisco, London, Singapore, São Paulo and othersOver 1800 enterprise customers including PayPal, Oakley, Sony Music Entertainment, Orange, Adidas, L’Oreal, Swarovski, and moreHootsuite closes US$60 million in financing led by a Boston-based asset manager and included participation from existing investors Accel Partners, Insight Venture Partners, and OMERS Ventures, and technology lender, Silicon Valley Bank ARC’TERYX Arc’teryx (stylized ɅRC’TERYX) is an outdoor clothing and sporting goods company founded in North Vancouver, British Columbia, Canada, in 1989. The name and logo of Arc’teryx refer to the Archaeopteryx, the earliest known bird.Arc’teryx’s Tango and Charlie packs, are made in camouflage patterns and constructed to military specification. The US military uses Arc’teryx for their backpacks THERE’S ALMOST TOO MANY TO LIST! A&W CanadaAritziaBlenz CoffeeCactus Club CafePlentyOfFishPurdy’s ChocolatesSony Pictures ImageworksDairyland CanadaDollartree CanadaFundrazrGlacier MediaHSBC Bank of CanadaMacdonald RealtyPixar Canada And many many more… Quick right hook: Do you know anyone who needs mortgage advice in Vancouver or the Lower Mainland? Eitan is available now to put his FREE mortgage expertise to use. Please introduce Eitan and his team. ### A History of Gastown: Then and Now A national historic site, Gastown is a bustling urban centre, full of charm, nightlife, fabulous shopping, and many of the city’s most acclaimed restaurants. History of Gastown Established the same year that Canada became a nation, Gastown is the oldest neighbourhood in downtown Vancouver. Named after “Gassy” Jack Deighton, a Yorkshire seaman who opened the area’s first saloon, Gastown burned to the ground in what is known as the Great Fire. All but two of the town’s 400 buildings were reduced to ashes and smoke. Following the Great Depression, Gastown was a largely forgotten neighbourhood. It became known as Vancouver’s “skid row” in the 1960s, and even after “rehabilitation” in the 1970s, it continued to be a lower-income area well into the 1990s and early 2000s. A “Gassy” Fun Fact! “Gassy” Jack received his name due to his talkative nature and his penchant for storytelling. He DOESN’T get it from that other thing… Woodward’s Building 1903: Built by Charles Woodward, the Woodward pioneered the concept of one-stop shopping.1993: Woodward’s fortune declined as customers gravitated to suburban malls. As a result, Woodward’s went bankrupt and closed its doors.1995: Fama Holdings acquired the building.2001: Province of BC bought the building from Fama for $22 million.2003: City of Vancouver purchased the building from the province for $5 million.Today, the $400 million project includes:536 market housing units125 single non-market housing units operated by Portland Hotel Society75 family non-market housing units operated by Affordable Housing Society130,000 sq. ft. addition to SFU’s downtown campusLocal businesses Gentrification Over the decades, Gastown has evolved from a failed tourist haunt to a vibrant, thriving community. While many are excited about Gaston’s growth, a small but vocal percentage is concerned about the area’s classic gentrification. Displacement of lower-class residents has been replaced with higher-end buildings, higher-priced rentals, trendy restaurants and expensive furniture stores, leaving lower-income residents unable to afford Gastown’s facelift. Boundaries Richards Street (west)Water Street (north)Main Street (east)Cordova Avenue (south) Demographics Population: 79,140Average Household Income: $64,500Average Household Size: 1.3Population Density: 15,174 (per square km)Language: 79% of residents’ mother tongue is English The Residents Gastown’s gentrification has made its neighbourhood one of the most sought-after locations for young urban professionals. Residents: predominantly young, single, or couples without families Age Range: 39% of residents are between the ages of 20-34 Education: 46% of residents have a university degree Children: 7% of the population (compared to 25% for Canada overall) Landmarks Steam-Powered Clock: powered solely by a steam engine (located at Cambie & Water Street)Maple Tree Square: has a statue of “Gassy” Jack Deighton at its centreVictory Square: where a memorial to Vancouverites who lost their lives in WWI Real Estate To Buy: the average condo in Gastown is $578,806Renters: 69% of Gastown’s residents are in rental units (compared to Vancouver’s average of 53% Transportation Cordova and Water Street are major transportation routes for commuters. Traffic volumes can peak as low as 22,000 to as high as 25,000 cars per day. Due to high levels of traffic, residents of Gastown tend to commute through public transportation, foot, or bike. Annual Events Global Relay Gastown Grand Prix: International bicycle raceVancouver International Jazz FestivalMake Music Vancouver: Annual performances in Gastown Looking for a Vancouver mortgage broker who knows this city inside and out? Get in touch with us today. ### Home Improvement Plan ABOUT: Home Improvement Plan Mortgage Get pre-approved for up to $60,000 to customize any home, paid for by your mortgage! Once you’ve found a great property, you may still need to add some updates: the home may need a new roof and you could really want to update that old kitchen. Fixing a roof or updating an older kitchen can cost a considerable amount of money, and often needs to be cash rather than another loan. For Buyers who only had enough for a 5% down payment, or other Buyers who stretched themselves to get above the 20% down payment amount (to avoid mortgage insurance), coming up with the funds to re-do parts of your new home can be tough. Home Improvement Plan Mortgage You can be pre-approved for up to $60,000 to customize, improve, or renovate any home, paid for by your mortgage! The Home Improvement Plan (HIP) Mortgage (also known as a “purchase plus improvements” mortgage) allows you to make your home just right for you, with tailored improvements, renovations or major fixes, immediately after you take possession. The major benefit of this mortgage is that it allows you to take advantage of the historically low mortgage interest rates by combining your initial mortgage amount and your renovations costs all in one mortgage. As an aside, buyers can sometimes be approved for lines of credits to pay for their renovations. A line of credit has two disadvantages. The first disadvantage is that large lines of credits are harder to get approved for and you may be approved for a higher mortgage amount versus a line of credit approval. Secondly, lines of credit, in almost all circumstances, would have a higher interest rate than your mortgage. The HIP Mortgage works as follows: You find a home and get an accepted offer. An approval can either be based on your purchase price “as-is” or you can get an approval on the value of the home plus the renovations costs. The HIP Mortgage requires you to get a quote from a contractor or builder equivalent for the work needed to be done. This quote will allow the lender to see what the new value of your property is. Instead of lending you 80% or 95% of the purchase price, the lender will lend 80% or 95% of the purchase price plus the cost of the renovations or quote. New appliances can be included in this quote.Upon completion of your purchase, the lender provides your lawyer with the mortgage funds minus the costs of your renovations.Immediately after you take possession, your renovations will start.Upon completion of your renovations, the lender will either send a representative to view the renovations are complete, or they may require a paid invoice from your contractor. The lender will then pay you for the renovation costs. Yes, you DO have to pre-pay your renovations costs and get reimbursed afterwards. There are various ways to go about this if you are lacking the current funds… Making an Unmortgageable Home Mortgageable Again The HIP Mortgage can, in some cases, help you purchase a home that a lender may not necessary want to give you a mortgage for. Remember knob and tube wiring? How about asbestos insulation? These days, lenders are very weary of properties that have increased risks. You may be very comfortable living in your asbestos-filled home but lenders find that their ability to sell that home (should they have to foreclose on you) is diminished with increased risks. Many lenders are turning their backs on these kinds of properties. With the HIP Mortgage, a lender will now know that you, as a homeowner, will deal with the risks associated with your property. There is surety that you will fix this problem for yourself. The HIP Mortgage would allow a lender who would not normally lend on a home with knob and tube wiring, or a home that has asbestos in it, to lend on that home, with the caveat that you remove the risk using the HIP Mortgage. It’s a win-win for everyone! If you have any questions about the HIP Mortgage or home financing in generally, please don’t hesitate to contact me. I’m available now for your home financing needs. ### Vancouver's Evergreen Line Why is the Evergreen Line Important? Fast, frequent, and convenient transit from Coquitlam to Vancouver via Port Moody and BurnabyDirect connection, without transfers, to what is currently the Millennium LineIncreases transportation choice and reduces auto useReduces travel time and congestion to and from work70, passengers per day expectancyIncrease density along Evergreen Line The Scope of the Evergreen Line Scheduled to open in the fall of 2016, this 10.9km long SkyTrain rapid transit will extend the SkyTrain network from Lougheed Town (Burnaby) Centre to Lafarge Lake-Douglas (Coquitlam). Travels a maximum operating speed of 80km/h15 minute ride from Lougheed Town Centre to CoquitlamFun Fact: At 79.6km, Vancouver’s SkyTrain system will become the longest fully grade-separated metro in Canada, surpassing the Toronto Subway system by several kilometres! Scheduled (hopefully) to open in spring 2017, this 10.9km long SkyTrain rapid transit will extend the SkyTrain network from Lougheed Town (Burnaby) Centre to Lafarge Lake-Douglas (Coquitlam). Travels a maximum operating speed of 80km/h 15 minute ride from Lougheed Town Centre to Coquitlam Fun Fact: At 79.6km, Vancouver’s SkyTrain system will become the longest in Canada, surpassing the Toronto Subway system by several kilometres!  Toronto’s subway and rail is 76.9KM, Montreal’s Metro is 69.2KM. Six New Stations 1. Burquitlam Station: east side of Clarke Road near Burquitlam Plaza2. Moody Centre Station: Port Moody transit exchange site3. Inlet Centre Station: North of Barnet Highway4. Coquitlam Central Station: Coquitlam transit exchange site5. Lincoln Station: Northeast corner of Coquitlam Centre6. Lafarge Lake-Douglas Station: East side of Pinetree Way Route Description Lougheed/Burquitlam: The Evergreen Line will run north from Lougheed Town Centre Station. Burquitlam Station will be on the east side of Clarke Road near Burquitlam Plaza. Leaving Burquitlam Station, the line will cross to the west side of Clarke Road, before entering a tunnel towards Port Moody Port Moody: The Evergreen Line will emerge from the tunnel just east of Barnet Highway. It will travel at ground level along the south side of the CPR tracks to Moody Centre Station. Continuing east, the line will cross the CPR tracks just before Inlet Centre Station, located north of Barnet Highway. Coquitlam: The line will continue along the north side of the CPR tracks towards Coquitlam Central Station. Turning north, the line will run on an elevated guideway along the west side of Pinetree Way to Lincoln Station. It will then cross to the east side near Northern Avenue, before ending at Lafarge Lake-Douglas Station, north of Guildford Way. Who is Funding the Evergreen Line? Total Costs: $1.4 billionProvince of British Columbia is contributing $583 millionGovernment of Canada is contributing up to $417 millionTransLink is contributing $400 million Community Growth To gage the impact of the Evergreen Line, we can look at the existing rapid transit lines (Millennium Line and the Canada Line), which have shaped development in Metro Vancouver. Specifically, significant future residential and commercial development is expected and major destination shopping centres such as Lougheed Mall and Coquitlam Centre Mall. The Official Community Plans in Both Port Moody and Coquitlam take the Evergreen Line into account and development and infill projects are already occurring close to planned stations. The Port Moody Official Community Plan was adopted in October 2014 and sets out the desired outcomes for each community and neighbourhood in close proximity to the Evergreen Line. These neighbourhoods are: Inlet Centre – This is where Port Moody’s Higher density residential and commercial development is centered to date.Moody Centre Station – From Moody Street to Electronic Avenue – the old heart of Port Moody. The Coquitlam Official Community Plan is a comprehensive plan that was originally adopted in 2001 but has been updated in 2013. Transportation and regional shifts are two of the major focuses of the plan. Coquitlam’s plan goes as far as saying their sustainable transportation goals are centered on the future development of the Evergreen Line stations. ### Vancouver as a Tech Hub Vancouver’s Tech History Vancouver’s economy has transformed dramatically over its short history. The city initially came to be as a thriving coastal town with a wealth of mills, trade, and gold rushes. Today, the city’s economic landscape has flourished from its humble roots to the point that Vancouver has been dubbed “Silicon Valley North”. BC generates 2.3 billion in annual sales, boasts more than 600 digital media companies, and employs over 16,000 people. Tech Timeline 1960-1970 BCIT: Opened its Burnaby campus in 1964. Initial enrolment was 498 students. Since then, BCIT has served over 125,000 alumni.MDA Corporation: A company which specializes in providing innovative electronic solutions emerged as the birth of tech in Vancouver 1980-1990 MPR Teltech: Key contributor to the birth of tech in VancouverExpo 86: Helped transition Vancouver from a sleepy provincial backwater to a burgeoning global city. 1990-2000 Ballard Power Systems: Conducts research and development on fuel cell technology.Electronic Arts: Opened in 1999, its massive 420,000 sq ft campus has been a huge contributor to the Vancouver gaming industry, making Canada the 3rd largest video game producer worldwide. 2000-2010 Flickr: Yahoo acquires Vancouver-based Flickr for $35 million.Centre for Digital Media: The Great Northern Way Campus (jointly owned by UBC, SFU, BCIT and Emily Carr) prioritizes digital education.HootSuite: HootSuite has become one of Canada’s first true web success stories. 2010-2015 Bitcoin: World’s first Bitcoin ATM opens in VancouverFacebook: Opens a 20,000 sq ft office in Coal HarbourTwitter: Announces plans to open ‘Global Centre of Excellence’ in VancouverMicrosoft: Announces opening of $90 million ‘Microsoft Canada Excellence Centre’ for training and development in Vancouver’s newly revamped Pacific Centre.Sony Imageworks: Brand New 75,000 square foot headquarters. Vancouver’s Tech Economy Although technology is now a critical part of Vancouver’s economy, much of BC’s economy is still centered around resources, the service industry, and tourism. With that being said, we currently have more jobs in technology than we have in mining, oil, gas, and forestry combined. Mobile app companies and gaming studies are clustered in Yaletown and Gastown, though Mt Pleasant is emerging as a popular location since Hootsuite relocated to the area in 2013. Below is BC’s tech breakdown: BC’s Tech Economy: totals 7.6% of BC’s economyWireless Technology: 10,000 jobs; 1200 companiesClean Technology: 6,000 jobs; 200 companiesInformation and Communication Technology: 40,000+ jobs; 6000+ companiesLife Sciences: 10,000 jobs; 300 companiesDigital Media: 14,000 jobs; 900 companies Vancouver Vs. North American Cities Silicon Valley and San Francisco still have the majority of tech talent, as most top-tier companies are based there and attract talent from around the worldThe Bay Area has attracted over 350,000 Canadians.Vancouver, along with other Canadian tech hubs, still lags behind US cities in terms of venture capital deals (BC: $477.8M; California: $15,235M). Barriers to Vancouver’s Tech Landscape Vancouver’s steep cost of livingVancouver’s lack of geographic proximity to major marketsLack of capital investmentLarge companies like Facebook and Twitter are taking all of the good talentShortage of computer developers and software engineers in CanadaCanadian university graduates are being recruited to Silicon ValleySalaries for tech workers are about 10-15% lower in Canada than the U.S. The Future As the home to a blossoming startup ecosystem, Vancouver is attracting international attention.In order to seize the opportunity to make our city a 21st century digital leader, Vancouver must develop a strategy that reaches the top of our government and educational system and permeates our communities.Having a digital strategy will become a necessity of every business strategy rather than an optional add-on.More of an emphasis will likely be placed on technology in schools and universities. ### Vancouver's Changing Retail Landscape! There’s no better time to be a shopper in Vancouver than the present! New malls are under construction and old ones are under renovation. Four of Canada’s 20 most productive shopping malls are located in Metro Vancouver, with Pacific Centre and Oakridge Shopping Centre earning 1st and 3rd place respectively on the overall productivity rating. Retailers from around the globe are scheduled to open new stores in the city in the coming months and years.  We’ve compiled a list of some of the most exciting changes to Vancouver’s retail landscape for your reading pleasure. Changes in Our Retail Landscape Park Royal Mall Redevelopment The North Shore mall is in the midst of a $150 million renovation and expansion project that will provide an additional 300,000 sq ft of retail space.Existing tenants like Anthropologie and Zara will soon be joined by Vancouver’s first La Maison Simons.The Quebec-based specialty fashion retailer is scheduled to open a 100,000 sq ft store this year! McArthurGlen Designer Outlet Vancouver Airport By next spring, Vancouver will be the proud owners of its very own 80-unit outlet mall!Conveniently located next to the airport, at the Templeton SkyTrain Station in Richmond, the high-end mall will feature brands such as Prada, Armani, and Burberry.See it being built right now by driving over the Arthur Laing bridge. Oakridge Centre Redevelopment The 1959 mall on Cambie Street is ready for a $1.5 billion expansion, with the first phase to be completed in 2019.Plans involve a total of 1.4 million sq ft of retail space, along with 2.7 million sq ft of residential space in multiple towers up to 44 storeys high.Hudson’s Bay will be joined by two other anchor tenants that have yet to be named.  Nordstrom Mark your calendars! Renovations of downtown’s old Sears store on Granville Street are moving along quickly!Nordstrom, a luxury fashion retailer, is planning to open the doors to its 230,000 sq ft store on September 18, 2015.Retail Insider editor-in-chief Craig Patterson forecasts that the introduction of Nordstrom to Pacific Centre will triple the number of Chinese tourists to Vancouver within five years.  Saks Fifth Avenue Saks, which was purchased by the Hudson’s Bay Co. for $2.9 billion, had originally planned to open its first Vancouver store in late 2014.While Saks owners assure that a Saks Fifth Avenue will be finding a home Vancouver, there is no word yet on location and timeframe.Rumour has it that Metro Vancouver could get a number of Saks Off Fifth discount stores in existing Bay locations. Versace Home Canada’s first Versace Home flagship store is scheduled to open in Vancouver’s historical Gastown area in the fall of 2015.Located at 310 West Cordova Street, the store will occupy about 2,000 sq ft of retail space.It will be the Italian luxury brand’s first location to feature its ENTIRE home collection, from furniture to wallpaper to fixtures. Pacific Centre According to Retail Insider, Pacific Centre leads all Canadian shopping centres with annual sales of $1,498 per sq ft, compared with $1,420 per sq ft for Toronto’s Eaton Centre and $1,395 per sq ft for Oakridge Centre.The new retail outlets which opened this summer are part of a 44,000 sq ft mall expansion.U.K. fashion retailers AllSaints and Ted Baker London head the list of new mall tenants, while others include:Hugo Boss, Kate Spade New York, Pandora, TUMI, B2 and Weekend MaxMara. Rockport, Microsoft, More Hot Leads. Abercrombie & Fitch and The Disney Store will also open stores in the expanded mall later this year. If you are thinking about getting in the retail game and need a great mortgage broker in Vancouver, then give us a shout! ### Vancouver's New Hospital - With Video! A look at the change of location of St. Paul’s Hospital https://www.youtube.com/embed/mfEdwEh0VE8 St. Paul’s By the Numbers St. Paul’s is moving from the 6.5 acres on Burrard to a new 18.5 acre campus east of Science WorldBeds are increasing from 435 to 700New research and teaching programs being instituted due to increased space The Movement of St. Paul’s Hospital On April 13, 2015 the provincial government and Providence Healthcare announced they plan to move St. Paul’s Hospital to the False Creek Flats area for a tidy sum of $1.2 billion. This would close the current historic Burrard Street location, which has been a controversial topic for many Vancouverites. The decision has the government and healthcare provider cancelling the then-current plans of revitalizing the 100+ year-old buildings. The new state-of-the-art hospital campus will utilize the 18.5 acres available at the site for the hospital expansion, a substantial increase from the 6.5 acres at the Burrard Street location. This site was purchased in 2004 by partners in the project, and has been retained with the intention of a hospital upgrade since – at the cost of $800,000 in property taxes annually. Adding to the Services All facilities currently found at the existing St. Paul’s Hospital will be relocated to the new site. This includes the emergency room, surgical services and patient care. There will also be research and teaching programs, community care and outreach programs and now, with the addition of a seniors’ care center, a mental health and addiction program, and a low-risk birthing center. There is space enough to build a unique “campus of care” offering a variety of services on one site, charting a course for the future design of health care delivery. This would increase the bed numbers to 700, up from 435 at the current location – also allowing for a greater increase in private rooms, as hospital-acquired infections are more likely when patients share rooms. Dr. Julio Montaner, the internally renowned director of the BC Centre for Excellence in HIV/AIDS at St. Paul’s, shared that one of the most exciting things about moving the hospital to a substantially larger site is the ability to combine clinicians and researchers to be on the same campus. Currently, St. Paul’s hospital leases over 100,000 square feet in commercial buildings around Vancouver because the current building is too cramped. Money Talks One of the many reasons moving the hospital instead of continuing the plan to upgrade the current location – which would have taken hundreds of millions of dollars for the much-needed seismic upgrades and other improvements – has been the willingness of the philanthropic community. Many have been cited as being more than a little hesitant, or even flat-out saying no, to donating funds to upgrade the size-constrained and dilapidating buildings. Jimmy Pattison, the wealthiest person in Canada and well-known local Vancouverite, has indicated that he would be willing to make significant donations to a new, state-of-the-art hospital, but not to a fixer-upper. Private donations are important, as the St. Paul’s Hospital Foundation must raise at least $125 million of the new billion-dollar-plus project. Preserving a Piece of Our Heritage The historic and nostalgic value of the façade of the current hospital is important to community members, and the current project lead, Neil MacConnell, says it would ideally be preserved. It is likely that the rest of the hospital would be demolished, which has been on the potential chopping block for over 35 years. Timing Is Everything The current downtown and West End communities are quick to point out the lack of emergency services that would be available to the immediate downtown core. This is countered by the Providence Health Care board members who state that this will increase transfer times by no more than 3-5 minutes and are also quick to point out that only 6% of those that use hospitals live within 3 kilometres of medical facilities. They also make an interesting point of transportation times that most Canadians are used to; 30 mins – 3 hours is the average time a Canadian takes to get to a hospital. Property Values Of course the Chinatown, Lower East Side, and Strathcona communities stand not only to gain closer access to the newest medical facilities in Canada, but also will stand to see a marked increase in property values. The new hospital facilities and outreach programs could increase the demand for housing in the area, both from people who work at the hospital during or after construction, and from people who value living close to medical facilities. The extra demand for housing triggered by the new hospital could put upward pressure on rents and property prices in the surrounding areas. These areas may continue to experience the benefit of increased demand well into the future, fundamentally shifting the nature of the local market. Do you know anyone who needs mortgage advice? Eitan is available now to put his FREE expert services to use. Please introduce him at 778-990-8950..Introductions are the backbone of our small business.We thank you in advance for your kind support. Keeping Your Credit Scores Healthy Credit reports and credit scores can be an area of unease for many people – let’s clear that up! We want to help you make sure your credit score is the highest it can be (an important factor when applying for a mortgage). Take a look at our article on how to keep your credit score healthy! One of the services I provide is a detailed analysis on your credit, making sure you are fully aware of everything affecting your credit score. ### Keeping Your Credit Score Healthy Do You Know Your Credit Score? There is a lot of mis-information floating around about credit bureaus, credit reports and credit scores – not only that, but a large amount of the clients I work with have never even seen their credit report or score before! When you meet with me, I will go over the details of credit reports and also your own personal credit report with a fine-tooth comb, making sure you are fully aware of everything affecting your credit score. I’d like to shed a bit of light, as they say, on the importance of your credit score and what does (and does not) affect this ever-changing number. Keeping Your Credit Score Healthy There are a few ways that you can actively ensure that your credit score is kept at a nice high number: Pay your credit cards and other debts on time – this includes bills like your cell phone!Pay your parking tickets on time – many people don’t realize that unpaid tickets will affect your credit score.When meeting with your mortgage broker, go over your credit report line by line (a service I offer to every one of my clients). They will be able to help you catch any unsubstantiated credit checks, fraudulent activity, and any mistakes by your lenders – and have them removed from your report.Have a couple of credit cards or a line of credit on your report…but! Ensure they have reasonable credit limits for each card, and that are not using your limits to their max. *The unofficial rule is only use about 30% of your available credit.Don’t apply for credit too often. My Score Falls Every Time It’s Checked Not necessarily true. You can personally check your credit report as many times as you like, and your score will not change. What DOES affect your score is a lender or creditor looking into your credit report. The more times lenders check (especially in a short period of time), the greater chance your score is going to decrease. Research has shown that people who are actively seeking credit tend to be people who are at a greater risk of possibly not repaying their credit, or seeking credit beyond their repayment capabilities. Lenders who see a lot of credit report checks also view this as a potential risk of fraudulent behaviour, and will move (by not extending credit) to protect themselves against it. Decreasing your credit score also functions as a protective mechanism for YOU if someone is trying to fraudulently use your identity to gain credit (for themselves) on your behalf. The gist here is that you can apply to have your credit checked a few times a year by lenders, and expect to have little to no affect on your score. Buying a Home? Use a Broker! Of course, when you are in the process of applying for a mortgage, some people go to more than one bank; all of which will look into your credit report, all within a short amount of time. One of the great benefits of using a mortgage broker is that your mortgage broker will only check your credit once. One check will negate many lenders checking your bureau because your broker know which lenders will be the best for your personal situation and we can discuss your different mortgage options without needing to have multiple lenders look into your credit! Working With Your Mortgage Broker I work very closely with each and every one of my clients to ensure that they have complete knowledge of what their credit report says, and what their credit score is. Most of the time, I get to tell my clients that they have excellent credit! The few instances where a credit score needs to be increased, I work diligently with you to find all the ways that we can easily increase this score to get you into the home of your choice. This is just one of the ways I strive to make sure you have the best experience when working with Eitan Pinsky Mortgage Expert Team. ### CHIP: Reverse Mortgages So what IS a Reverse Mortgage you ask? A reverse mortgage is a loan which is secured against your home – it allows you access to the equity that you’ve built up in your home. The main reasons to get a reverse mortgage in Canada are: Get approved without ANY CREDITGet approved without ANY INCOMEDo not pay mortgage payments, which are accrued within the mortgageIs a tax fee way to use your home’s equityMaintain ownership of your homeAmount you owe will never exceed the value of your property Canada Home Income Plan (CHIP) Mortgage from HomEquity Bank In Canada, reverse mortgages are provided by HomEquity Bank through a product called the Canada Home Income Plan, or CHIP for short. This product is only available for Canadians 55 years old and older. Reverse Mortgages Have a Bad Rep… These particular loans have had a bad reputation in the past, particularly because of how they were handled in the United States. In Canada, only one company, HomEquity Bank, handles reverse mortgages. HomEquity Bank is federally regulated and they never require extra payment back for their mortgage, even if the mortgage exceeds the value of the home when sold. Home Equity Line of Credit / Mortgage VS CHIP A Home Equity Line of Credit (HELOC) is a mortgage/credit facility that allows homeowners to borrow money from a lender using the equity in their home. The main, very glaring benefit of a HELOC over the CHIP reverse mortgage is that HELOCs have lower interest rates and lower fees. CHIPs higher cost means that the homeowner will have less to leave to their estate at the time of their death. However, there are three very important reasons to get the CHIP mortgage: No qualification criteria for the CHIP mortgage – HELOCs required qualificationNo monthly payment – great for those who do not want to pay monthly costsNo re-qualification: HELOCs would require a client to requalify if a spouse passes away. In this instance, the bank may call the loan, forcing the client to sell and get out of their property. The CHIP mortgage does not have to be repaid until the sale of the home or the surviving partner passes away. It is important to get the correct advice as to whether a reverse mortgage is for you or your loved ones… in everything that we do at Eitan Pinsky Mortgage Expert Team, we strive to protect the client and their interests. There are a lot of choices out there and not every choice is the best in every situation. We are happy to discuss reverse mortgages and how it might fit into your overall financial plan with any new or existing clients –  we would be pleased to go over any questions you have about this type of mortgage product. ### 4 Not To Be Missed VanCity Events There are some interesting & unusual events that are coming to Vancouver this summer… we wanted to round out what we think would be the most fun, have-to-attend events that will be here in Vancouver… Let’s Be Kids Again Slide the City (North Vancouver) – 1000-foot long slip’n’slide! A highly anticipated event…we thought we were going to get to do this in 2014, but they made us wait another year. Don’t wait to get your tickets to what is sure to be the most fun you’ve had since you were 10 years old in your backyard with your mom’s dishsoap! August 22nd. Slide the City Food, Beer & Entertainment Galore Plaza of Nations Night Market – a new venue so you no longer have to head to Richmond to get your night market fix! Starting Saturday, June 20th you can head down to the waterfront area of Yaletown to enjoy a plethora of great eats & drinks that this city has to offer. Saturdays from 5-10PM (all summer). Night Market A Place To Stroll Robson Redux – an easy one to check out (and it’s free!) if you’re downtown strolling about – and it’s all about the pedestrian. The 800 Block of Robson St. gets closed to vehicle traffic all summer, allowing for those on foot to enjoy the beautified space between the Vancouver Art Gallery and the Court House – this year’s design winner is pretty darn quirky! We can’t wait to check this out. July 1st – all summer. Robson St. Stroll Dogs, Dogs Everywhere! Pet-A-Poolza 2015 – another event that isn’t brand new (though again, it’s only in its 2nd year), this summer destination is one of Eitan’s favorites! If you know him at all, you know he’s a HUGE animal fan.  You are guaranteed to see him down at the Running of the bulls (dogs, that is) during this one-day event. This event is also a fundraiser for Just Love Animals Society, so know that you’re doing some good for our furry pals, as well. August 23rd from 11-4PM. Must Love Dogs Do you know anyone who needs mortgage advice? Eitan is available now to put his FREE expert services to use. Please introduce him at 778-990-8950. Check out our post 3 Mortgage Pre-Approval Musts – a great read on how we can help you get into your new home quickly & painlessly! ### Credit Unions - An Alternative Lender The Credit Unions Credit Unions are often overlooked as a choice for your mortgage lender – but there are reasons why considering a Credit Union might be well worth your while. One of the primary attractions for Credit Unions is that they are regulated provincially, so they are not restricted by the Federal regulations that banks and monoline lenders have to adhere to*. *When purchases have down payments of less than 20%, all mortgage loans are required to have mortgage default insurance and therefore are still subject to federal guidelines of CMHC and other insurers. In most cases Credit Unions have the advantage of not being federally regulated which has implemented strict guidelines for loans that includes rules loan documentation, income documentation and tight debt services ratios (how much you can afford). Credit Union Central of Canada logo  …(old-school, isn’t it?) Mind The Gap The gap between federal and provincial rules do allow credit unions to compete on some products the banks are unable to provide. Credit Unions are able to offer competitively low interest rates for files that a bank or monoline lender would not be able to fund. In many cases, these files would go to private lenders whose interest rates are sometimes double those of the credit unions’. An additional benefit of Credit Unions is that they have the ability to share in the dividends with their clients – which can ultimately lower your effective mortgage rate because you are getting cash back. Some of the largest Credit Unions in BC are Vancity, Coast Capital, Westminster Savings and BlueShore Financial. The Drawbacks There are some cons when dealing with a Credit Union…often they don’t offer mortgages outside their lending areas so if you are with a smaller Credit Union you may not be able to port your mortgage (bring your mortgage to a new property) if you decide to move. This is a very important consideration. Life situations do change, and if you have to move before your mortgage term is up, you run the risk of having to pay some hefty penalties. You may also be obligated to open an account at the Credit Union and in some cases maintain a balance where the mortgage amount is withdrawn from, which is a possible deterrent for some people. There are often additional conditions they sometimes require in order to obtain their very best rates. Another Reason to Contact Your Mortgage Broker As always, my advice is to contact your mortgage broker (like me!) – to discuss all mortgage lender choices and find a lender that is the right fit for your personal needs. As a source of experienced and unbiased information about all types of lenders, your broker is the gateway to your perfect home mortgage. ### Monoline Lender Explained Your Choice For Your Mortgage In the current market of hot real estate and historically low interest rates, knowing you have a choice of lender is a valuable piece of knowledge! Most people are aware of what the big banks offer (or seemingly what they offer – make sure you read the fine print!) when they are on the search for a great mortgage – but what about other lender choices? Smaller Lenders, Greater Variety and More Choice Monoline Lenders are national companies that, by definition, only focus on mortgages. Through mortgage brokers, they are quickly becoming mortgage borrowers’ lender of choice. Some of the largest Monoline lenders are: First National, MCAP, RMG Mortgages, Street Capital, and CMLS. Monoline lenders do not have bank branches providing for lower overhead costs over the big banks. Monolines also source their mortgages directly from mortgage brokers, offering you some of the best insight and superior client care. Every monoline lender has its perks and special programs and it is up to your broker to match your needs with the best suited monoline. There are multiple ways you can benefit from one of these many specialized lenders: There are many monoline lenders available to you, allowing for healthy competition in the mortgage market; this means better rates & more products for the consumer.These lenders specialize JUST in mortgages and are able to offer different products than the typical mortgages you might see at the banks.Many monolines offer greater flexibility in prepayment privileges and mortgage options.Also, many of these lenders have a lower prepayment calculation if it becomes necessary for you to get out of your mortgage prior to the end of your term. It should be noted that monoline lenders follow ALL the same rules as Canadian banks and are just as secure. In fact, almost all monoline lenders are backed by the big banks. Superior Client Care Monoline lenders work directly with your Vancouver mortgage broker.  Combined, your broker and your monoline lender is like having your own personal team of mortgage experts & client care assistants, even after your mortgage funds. The best part, you won’t need to deal with a bank client representative that knows a little about your specific mortgage – you can go straight to the person who helped with your home financing and have a wealth of experience and knowledge at your beck & call. As always, working with a mortgage broker will be your greatest asset when choosing the mortgage that is right for you. ### Buying a Home? Your Title Matters... Joint Tenancy vs Tenancy in Common When you register your home, you have an important choice to make! Many people are unaware of the choice, or wonder what the difference is…or if this difference is even important. The type of your title registration is QUITE important – and I’d like to share with you the difference between the 2 forms of title, Joint Tenancy and Tenancy in Common, and a few points you would want to consider when you choose for your property’s title. Joint Tenancy The words Joint Tenancy probably make you think about the people you are living with in your home, but in fact when referring to land title, this is in reference to a type of ownership. In a joint tenancy, each person or co-owner (and there can be more than 2) owns the whole property, or in legal speak, an undivided interest in the whole of the property. As between themselves, joint tenants have separate rights, as against everyone else they are in the position of a single owner. Tenancy in Common If two or more people own a property and register their ownership as Tenancy in Common, the amount that each person owns does not have to be divided equally. Tenants in Common can own different proportions of the property, for example ¼ and ¾. Additionally, a tenant in common can sell or mortgage their portion or share of the as they see fit without consulting the other property owners. Considerations When Choosing Joint Tenancy or Tenancy in Common Upon the Death of an Owner – For Tax Purposes RIGHT OF SURVIVORSHIP – One of the principal features of a joint tenancy is the right of survivorship. Right of survivorship is when the surviving owner(s) automatically absorbs a dying owner’s share of the property. If there are more than two owners, this continues until the last person is the sole owner. Right of survivorship is important because upon death, all of the deceased’s assets become part of that person’s estate and will be subject to probate fees and will be taxable. A joint tenant’s property will bypass probate fees and go straight to the other owner(s). *A noted aspect of right of survivorship is that you cannot leave your interest as an owner in joint tenancy to anyone else in a Will. This does not imply that you cannot dispose of your interest during your lifetime, but if not dealt with while you’re alive, the right of survivorship takes precedence regardless of any wishes you may have added to your Will. On the other hand, if you are registered as a tenant in common and one tenant in common dies, that person’s share of the property becomes a part of the deceased’s estate. It is subject to probate fees and it will be first taxed and then distributed to the beneficiaries of the deceased person’s estate. Property Transfer Tax Exemption Normally, property transfer tax is exempt for first time homebuyers who purchase properties valued under $475,000. In many cases, first time homebuyers need an extra bit of help qualifying for their mortgage and either one or two the parents would guarantee the loan. However, many lenders are now requiring borrowers to have cosigners on the mortgage, rather than guarantors. A cosigner is required to be on title whereas a guarantor is not. The problem this creates is that if a parent already owns their own property, or the parent does not live in the newly acquired property as their primary residence, no property transfer tax exemption will be given. Registering a property as Tenants in Common, with the borrower registered as a 99% owner and parent registered as 1% owner negates this problem. In this case, the borrower would be exempt, but only on their 99% ownership. The cosigner would not be exempt but they would only have to pay 1% of the property transfer tax. Considerations When Choosing Joint Tenancy or Tenancy in Common If you are thinking of holding a property in joint tenancy with an Adult Child for estate planning purposes, you should consult a lawyer. There can be many unintended consequences and pitfalls for such an arrangement. For example: loss of control: you cannot sell or mortgage without the consent of the child.taxes: there may be capitals gains consequences for the parent or the child.property transfer tax: depending on whether the property is a principal residence, you may have to pay property transfer tax.creditors: the property will be at risk to claims by the child’s creditors. When considering tenancy in common, there are other factors to think about: property is not easy to ‘distribute’ when added to a Will or estate. If you have multiple beneficiaries who each want to deal differently with their portion of the property left to them, this could create unintended strife.the property will likely be subject to probate fees.capital gains taxes will likely be applied to each beneficiary’s portion of the profit of the sale if the beneficiaries choose to sell the property. The Final (or not so final) Word… The considerations or pros & cons of which type of property title to choose are important ones for not just the long-term planning of your estate but for current tax planning as well. Please consult a lawyer, accountant or certified financial planner if there are questions that arise when making decisions about your title. These professionals will be able to decipher any nuances or issues involved with specific situations that are not immediately apparent and help you make the most informed decision when it comes to your property title. This article should not be solely relied upon for advice. ### 3 Mortgage Pre-Approval Musts Preparing For Your Pre-approval Owning your own home is one of the best feelings in life. Most people will need a mortgage however, since having enough cash to purchase your home outright is few and far between nowadays. The problem is that, you don’t simply need a mortgage – you need to qualify for one too! While qualifying for a mortgage can seem difficult at first glance, the process can actually be made relatively simple. This is especially so with a mortgage broker who takes the time to educate you on what documents you need for a pre-approval and how much you will eventually be approved for. Before you get started… All About Your Credit Report One of the most important factors to consider when qualifying for your mortgage is your credit rating. The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score. You will want to have your score be as high as possible, so consider the following ways to increase your score in a relatively short amount of time: Look at your credit report In order to know what is affecting your credit report, you first have to look at it. Fortunately, this is not a difficult thing to do. You can check out CBC’s article on How to Check Your Credit Report (http://www.cbc.ca/news/canada/how-to-check-your-credit-report-1.1185975) and from the two Canadian credit reporting agencies: Transunion and Equifax I personally walk my mortgage clients through their credit report, going over each line and explaining any point that you may have a question about. My mortgage clients tend to find this very reassuring – instead of downloading your credit report at home and trying to figure out what it means, we walk through it together step by step. If required, there are always ways to increase your credit report score and I will advise you on the ways to do so. Dispute any incorrect negative information If there is any negative information on your credit report that should not be there (i.e. a collections account for something unrelated to you), you must dispute it directly with the reporting agencies. This isn’t complicated either; they have streamlined this process by allowing you to file disputes online. Your Mortgage Broker should also be able to help you with various aspects of your credit report. I have a direct line with credit reporting agencies and will be able to expedite your dispute should it be required to do so. Get a credit card No matter what type of lender you are dealing with, they are more likely to supply a loan if they see that someone else is willing to lend you money. That is why it is important to have a credit card. If you have had trouble getting a credit card in the past you can always get a secured credit card. This works more like a bank account than a credit card and allows you to build credit. Request increases on all of your credit cards if required Your credit score is positively increased the more lenders are willing to give to you – it only takes a few minutes to ask for a credit increase with your credit card companies…and most of these companies are happy to increase your credit. This does not mean you’re free to rack up those cards! – just remember it is a reflection of how credit-worthy other lending companies deem you. Lower your debt Although it’s important that your credit report reflects that lenders are willing to lend you money, being burdened by too much debt will lower your credit score. This is due to the fact that mortgage lenders want to make sure that you will be able to afford to pay your new bill. If possible, pay off your debts prior to obtaining a pre-approval or to less than half of your pretax monthly income; this shows that you have plenty of extra space to fit a mortgage. The Next Two Steps Your Income Verification A lender will consider how much of your total income you will be spending on housing. This helps lenders decide whether you can comfortably afford the home. Also, lenders generally want to know that you have income stability… We never require our clients to bring in their income verification or documentation at our first meeting. As experienced mortgage brokers, we know that the type of income verification needed to provide will be different for each person. However, the general rule for documentation would be: ~Salaried individuals: One letter of employment and one pay stub ~Hourly earners: most recent two year history of your T4 ~Self-employed individuals: Two years history of your T1 Generals and Notice of Assessments Get a down payment together When thinking about how to qualify for a mortgage, income is king – you need to be able to pay for your home… However, it’s good to know that there is a saving grace in that if you would normally not be able to afford a specific mortgage, a lender is much more likely to say ‘yes’ if you furnish a larger down payment — the more you put down, the better when it comes to mortgages. This is because a down payment both shows a financial commitment and it lowers the amount of the loan corresponding to the value of the property. I had an interesting file once where clients could only prove a specific income… the clients were purchasing a new primary residence and moving from their existing condo. We were able to get approved for a new mortgage by taking equity out of their current condo and putting a larger down payment on their new home. Lowering the percentage of the mortgage vs the value of the home allowed us to get financing to purchase their residence. Get help from a mortgage broker As expert mortgage brokers, it’s our job to get you the best mortgage while making sure you understand the mortgage process as well as your actual mortgage. We educate you on what it takes to get the mortgage and provide you with expert advice, taking advantage of our experience and multitude of lenders and options available to us. ### Greenest Living in Vancouver A Community Unlike Any Other! We all know that the Olympic Village was built for the 2010 Vancouver Olympic Games but did you know that the Village is also one of the greenest communities in the world and is a leader in sustainable development? Almost every development has some sort of green technology – whether it is a green roof, urban agriculture, or a community energy system – aligning with Vancouver’s vision of becoming the greenest city in the world! Speaking of Green Energy, have you ever seen the pipes rising next to the Cambie Street Bridge? Those are part of the Neighbourhood Energy Utility (NEU) which uses waste thermal energy captured from sewage to provide space heating and hot water to new buildings in Southeast False Creek (SEFC). Check it out! The City of Vancouver is aiming to have 16,000 people living in the neighborhood by 2020, and to have about 5,000 residential units! By comparison, the new Oakridge Mall redevelopment will have a total of just over 2,900 units. The Creek Concert Properties is all set to build The Creek on a 6.4 acre property in Southeast False Creek. Their substantial plan includes 5 new residential buildings. The project will include 519,595 sq. ft. of market housing and 104,927 sq. ft. of affordable rental housing. Also included will be a 2.7 acre waterfront park space, greenway/bikeway paths, a children’s play area, a continuation of the seawall and an internal street network. This could be a wonderful addition to the already thriving neighborhood… The Salt Building, which has become the home of Craft Beer Market is a Vancouver landmark from 1930 and now home to 140 different types of beer on tap. That’s over 4 months of trying a new beer every day! And yes, those are giant pigeons… maybe. The Island in the Creek Have you noticed the island jutting out into False Creek from the Athletes’ Village? Well, it wasn’t there ten years ago; it’s man made.To build the island, shoreline, and inlet, City staff used 60,000 cubic metres of rock, cobble, gravel, sand, and boulders from the Olympic Village construction. The ebb and flow of the tide on the rocky shoreline creates a natural home for starfish, crabs, fish, shellfish, and other creatures. Dogs and cyclists are not allowed on the island in order to preserve the natural state. So, tie up your dog, lock up your bike, and explore this amazing piece of landscape engineering! I myself am very much looking forward to seeing how this area progresses – and I am sure I will be working with more than a few clients who will be itching to move into this beautiful dynamic developing part of our city. If you are need of a local Vancouver mortgage broker who knows the city inside and out, get in touch with us today. ### The Bank vs. The Broker The Bank vs. The Broker The broker works for you. The bank doesn’t. This is critical to consider when making the important decision of who to work with in your mortgage approval – and better yet, education – process. The unique value of a professional mortgage broker comes from having someone who works directly for you and has access to dozens (if not more!) of mortgage products. In almost every case, mortgage brokers are not paid by you, but rather by the lender who provides your mortgage. Mortgage Broker Benefits Working with a mortgage broker allows you to examine multiple products for a variety of considerations: most importantly: long term planninginterest ratemortgage optionspayment privilegespayment penaltiesguaranteed interest rate holds for 120 dayslong term savingsand more… Additional Benefits In addition to the benefits listed above there is incredible added value when working with a mortgage broker. You may have greater access to the broker dealing with your file – with no need to keep typical banking hours. You get your own ‘coach and personal cheerleader’ – striving to find the best products for your unique situation. You will have an on-going relationship with a broker that learns about your family’s criteria, needs and future aspirations – allowing for potentially years of personalized service! Unique Services Eitan Can Provide One of the main benefits of using a Mortgage Broker is that they have access to, and knowledge of, the entire mortgage market. A bank can only advise on their one product. They can advise which lenders will consider your case based on your individual circumstances. This is particularly useful for people with poor credit ratings, low down payment, multiple rental properties, and generally complex scenarios. Mortgage brokers have access to lenders who specialize in servicing people who need creative financing advice, and can also leverage relationships with mainstream banks. Notwithstanding, a Mortgage Broker is an individual who only touches mortgages. They are uniquely positioned to provide the best advice to First Time Home Buyers. Mortgage brokers can also access exclusive deals not available on the open market, or negotiate a better interest rate or lower application fees from the lender in some cases. Eitan’s Personal Style I enjoy providing a level of service that goes above beyond and in some ways, mimics what a personal financial planner would do for you. Most importantly, I provide a service that my partners and clients have come to respect and refer out. My systems-based approach ensures you get the best advice and service, from the first meeting, all the way until your mortgage reviews. I always meet my clients face to face to better answer their questions in a non-rushed environmentI am easily available whether you would like to meet in person, on the phone or via emailI provide you with 3 different mortgage bids, each being a different product and generally from different mortgage lendersI am lucky enough to get numerous testimonials that speaks to my service I’m looking forward to helping you with your home financing needs! ### All About Canada's Home Buyers' Plan The Home Buyers’ Plan is the only tax-free way to withdraw from your RRSPs to purchase your home. The Home Buyers’ Plan (HBP) is a program that allows you to withdraw money from your registered retirement savings plan (RRSP) to buy a home. You can withdraw up to $25,000 to pay for your home and couples can withdraw $25,000 each. There is a two-year grace period to pay back your RRSP after which point you must pay back your withdrawal over the course of 15 years. Why is the HBP Important to me? It is extremely important to put money away for your retirement and for investments. RRSPs are some of the most important tools Canadians use to plan for their future. I advise my young friends to start at least one RRSP account as soon as they can! The Home Buyers’ Plan (HBP) is the only way to withdraw from your RRSPs tax free. The HBP allows us to use our investments as a downpayment for our primary (live-in) residence. For young home buyers who have been diligently investing for their future, using their RRSPs may be the only source of income they have to use for their downpayment. Rules and Regulations You must repay any withdrawals to your RRSPs within 15 years. Your first repayment starts the second year following the year you made your withdrawal. In other words, you have a two year grace period before you need to start repaying into your RRSPs. The amount that you have to repay per year will be scheduled ahead of time at 1/15 of the amount you withdrew. Your RRSP money must have remained in your RRSP for at least 90 days before you can use them in your HBP.You may also apply if you intend to buy or build a home for a relative with a disability.Your home that you are purchasing must be a home that you intend to live in,You are considered a first-time home buyer. 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If you disagree with these terms and conditions or any part of these terms and conditions, you must not use this website. This website uses cookies. By using this website and agreeing to these terms and conditions, you consent to our Pinsky Mortgages use of cookies in accordance with the terms of Pinsky Mortgages privacy policy. License to use website Unless otherwise stated, Pinsky Mortgages and/or its licensors own the intellectual property rights in the website and material on the website. Subject to the license below, all these intellectual property rights are reserved. You may view, download for caching purposes only, and print pages or other content from the website for your own personal use, subject to the restrictions set out below and elsewhere in these terms and conditions. You must not: republish material from this website (including republication on another website);sell, rent or sub-license material from the website;show any material from the website in public;reproduce, duplicate, copy or otherwise exploit material on this website for a commercial purpose;edit or otherwise modify any material on the website; orredistribute material from this website except for content specifically and expressly made available for redistribution. Where content is specifically made available for redistribution, it may only be redistributed within your organization. Acceptable use You must not use this website in any way that causes, or may cause, damage to the website or impairment of the availability or accessibility of the website; or in any way which is unlawful, illegal, fraudulent or harmful, or in connection with any unlawful, illegal, fraudulent or harmful purpose or activity. 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If Pinsky Mortgages provides you with a user ID and password to enable you to access restricted areas of this website or other content or services, you must ensure that the user ID and password are kept confidential. Pinsky Mortgages may disable your user ID and password in Pinsky Mortgages sole discretion without notice or explanation. User content In these terms and conditions, “your user content” means material (including without limitation text, images, audio material, video material and audio-visual material) that you submit to this website, for whatever purpose. You grant to Pinsky Mortgages a worldwide, irrevocable, non-exclusive, royalty-free license to use, reproduce, adapt, publish, translate and distribute your user content in any existing or future media. You also grant to Pinsky Mortgages the right to sub-license these rights, and the right to bring an action for infringement of these rights. Your user content must not be illegal or unlawful, must not infringe any third party’s legal rights, and must not be capable of giving rise to legal action whether against you or Pinsky Mortgages or a third party (in each case under any applicable law). You must not submit any user content to the website that is or has ever been the subject of any threatened or actual legal proceedings or other similar complaint. Pinsky Mortgages reserves the right to edit or remove any material submitted to this website, or stored on Pinsky Mortgages servers, or hosted or published upon this website. Notwithstanding Pinsky Mortgages rights under these terms and conditions in relation to user content, Pinsky Mortgages does not undertake to monitor the submission of such content to, or the publication of such content on, this website. No warranties This website is provided “as is” without any representations or warranties, express or implied. Pinsky Mortgages makes no representations or warranties in relation to this website or the information and materials provided on this website. Without prejudice to the generality of the foregoing paragraph, Pinsky Mortgages does not warrant that: this website will be constantly available, or available at all; orthe information on this website is complete, true, accurate or non-misleading. Nothing on this website constitutes, or is meant to constitute, advice of any kind. Limitations of liability Pinsky Mortgages will not be liable to you (whether under the law of contact, the law of torts or otherwise) in relation to the contents of, or use of, or otherwise in connection with, this website: to the extent that the website is provided free-of-charge, for any direct loss;for any indirect, special or consequential loss; or for any business losses, loss of revenue, income, profits or anticipated savings, loss of contracts or business relationships, loss of reputation or goodwill, or loss or corruption of information or data. These limitations of liability apply even if Pinsky Mortgages has been expressly advised of the potential loss. Exceptions Nothing in this website disclaimer will exclude or limit any warranty implied by law that it would be unlawful to exclude or limit; and nothing in this website disclaimer will exclude or limit Pinsky Mortgages liability in respect of any: death or personal injury caused by Pinsky Mortgages negligence; fraud or fraudulent misrepresentation on the part of Pinsky Mortgages; or matter which it would be illegal or unlawful for Pinsky Mortgages to exclude or limit, or to attempt or purport to exclude or limit, its liability. Reasonableness By using this website, you agree that the exclusions and limitations of liability set out in this website disclaimer are reasonable. If you do not think they are reasonable, you must not use this website. Other parties You accept that, as a limited liability entity, Pinsky Mortgages has an interest in limiting the personal liability of its officers and employees. You agree that you will not bring any claim personally against Pinsky Mortgages officers or employees in respect of any losses you suffer in connection with the website. Without prejudice to the foregoing paragraph, you agree that the limitations of warranties and liability set out in this website disclaimer will protect Pinsky Mortgages officers, employees, agents, subsidiaries, successors, assigns and sub-contractors as well as Pinsky Mortgages. Unenforceable provisions If any provision of this website disclaimer is or is found to be, unenforceable under applicable law, that will not affect the enforceability of the other provisions of this website disclaimer. Indemnity You hereby indemnify Pinsky Mortgages and undertake to keep Pinsky Mortgages indemnified against any losses, damages, costs, liabilities and expenses (including without limitation legal expenses and any amounts paid by Pinsky Mortgages to a third party in settlement of a claim or dispute on the advice of Pinsky Mortgages legal advisers) incurred or suffered by Pinsky Mortgages arising out of any breach by you of any provision of these terms and conditions. Breaches of these terms and conditions Without prejudice to Pinsky Mortgage's other rights under these terms and conditions, if you breach these terms and conditions in any way, Pinsky Mortgages may take such action as Pinsky Mortgages deems appropriate to deal with the breach, including suspending your access to the website, prohibiting you from accessing the website, blocking computers using your IP address from accessing the website, contacting your internet service provider to request that they block your access to the website and/or bringing court proceedings against you. Variation Pinsky Mortgages may revise these terms and conditions from time-to-time. Revised terms and conditions will apply to the use of this website from the date of the publication of the revised terms and conditions on this website. Please check this page regularly to ensure you are familiar with the current version. Assignment Pinsky Mortgages may transfer, sub-contract or otherwise deal with Pinsky Mortgages rights and/or obligations under these terms and conditions without notifying you or obtaining your consent. You may not transfer, sub-contract or otherwise deal with your rights and/or obligations under these terms and conditions. Severability If a provision of these terms and conditions is determined by any court or other competent authority to be unlawful and/or unenforceable, the other provisions will continue in effect. If any unlawful and/or unenforceable provision would be lawful or enforceable if part of it were deleted, that part will be deemed to be deleted, and the rest of the provision will continue in effect. Entire agreement These terms and conditions, together constitute the entire agreement between you and Pinsky Mortgages in relation to your use of this website and supersede all previous agreements in respect of your use of this website. Law and jurisdiction These terms and conditions will be governed by and construed in accordance with Canada’s GOVERNING LAW, and any disputes relating to these terms and conditions will be subject to the non-exclusive jurisdiction of the courts of British Columbia Canada. You can contact Pinsky Mortgages by email to eitan@pinskymortgages.ca. ### Privacy It is our policy at Eitan Pinsky Mortgage Expert’s to respect and protect the privacy of users that visit our website and we are committed to providing the highest level of service experience possible. This policy statement is intended to explain what information is collected through our website and how we use or disclose that information. Your Personal Information This website offers you an opportunity to contact Eitan Pinsky Mortgage Experts and you will be asked to provide information including your name, email address and phone number, should you wish to provide it. This information is stored by us, but will not shared, sold or released to any other individual, group or company without your consent. When you have requested specific services through our website, your information will be shared or used by us to correspond or contact you as needed in order to fulfill your request. Non-Personally Identifiable Information Like many other websites, our site automatically gathers general information such as the user’s IP address, the date and the time this site is accessed, the pages visited, and any content downloaded. This non-personally identifiable information is collected specifically for website improvement and system administration purposes only. This site may use cookies for the purpose of remembering your preferences, improving the service you receive and ensuring we can properly link to the information you are requesting. Links to Other Websites Our website may contain links to other sites. Please be aware that these websites are beyond our control and may not be subject to this same privacy policy commitment. Users are advised to familiarize themselves with the privacy policy and terms of use for any website they visit before sharing personal information. Security We place an extremely high value on security. We have architected our systems in terms of hardware and software in order to protect against unauthorized or malicious exposure of users information. While we have made every reasonable effort in this regard, we also recognize that no computer system is completely immune to these types of attacks.We cannot be held liable for any breach of security that is beyond our reasonable control Policy Acceptance Your use of our website signifies your acceptance of this Privacy Policy and your consent to the collection and disclosure of information as outlined above. Any future updates to this policy will be posted here. Please refer back to this document periodically so that you fully aware of any policy changes. Your continued use of our site indicates your acceptance of our posted policy. ### About ### Agents ### Team ### Contact ### Resources ### Getting You The Best Mortgage With The Least Amount Of Stress, Period. ### Advanced? ### Renew / Refinance? ### First-Time Buyer?