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Unlocking Your RRSP: The Home Buyers Plan Explained

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Unlocking Your RRSP: The Home Buyer’s Plan Explained In order to purchase or construct a qualified house for yourself or a relative with a handicap, you may make a withdrawal from your Registered Retirement Savings Plan (RRSP) under the house Buyers’ Plan (HBP). Withdrawals from the HBP must be repaid within 15 years. If you are the owner of more than one RRSP, you may make withdrawals from any or all of them. Up to $35,000 ($70,000 for a couple) of your RRSP assets may be withdrawn tax-free to use towards a down payment on a property. You can’t access the money in a locked-in RRSP or a group RRSP, for example. Participation in the HBP is contingent upon meeting the following requirements: You must be a first-time buyer to qualify. A signed contract to purchase or construct a qualified residence for yourself or a family member who is disabled is required. The money you’re withdrawing from your RRSP must have been in the bank for at least 90 days. When you take money out of your RRSPs for the HBP, and until the time you buy or build a qualified house, you must be a Canadian resident. Within a year of purchasing or constructing the qualifying house, you must move in and use it as your primary residence. You must have the intent that the person with a handicap for whom you purchase or construct a qualified house, or whom you assist in purchasing or constructing a qualifying home, will use the home as his or her permanent residence. If your repayable HBP amount is zero on January 1 of the year of the withdrawal, and you fulfil all the other HBP eligibility rules, you may be eligible to enroll in the HBP again. The greatest thing is that if you pay back the money within 15 years, you won’t have to pay taxes on the withdrawal. The First-time Home Buyer Rule If this is your first time buying a property, you are termed a “first-time buyer.” You are not eligible for first-time homebuyer status if you plan to live in a residence that was acquired by your spouse. The 4-year rule If you did not own a property or reside in a home acquired by your spouse for 4 calendar years previous to 2019, you may qualify for the HBP. You may rejoin the HBP four calendar years after relocating to a flat, for instance, if you and your spouse have divorced and you no longer live together. You may become qualified in 2022 if you relocate in 2018. Before you may sign up for the HBP programme again, any outstanding debt must be settled in full. Qualifying for Homebuyers’ Plan after relationship breakdown, withdrawals after 2019 Withdrawals made after March 2019 are subject to the new policy mentioned below. If you and your husband or partner are no longer living together due to marital or relationship problems, you may be eligible to participate in the Homebuyer’s Plan. Your separation period prior to the withdrawal date is at least ninety days. You and your spouse started living apart in the year of the withdrawal, or during the preceding four calendar years. If the Homebuyers Plan participant already owns a home that was their principal residence at the time of the withdrawal but is not the same as the dwelling they intend to purchase with the Homebuyers funds. If the participant sells or terminates their right to the principal residence to their former spouse no later than the end of the second calendar year following the year of the withdrawal, or if the participant remarries before the end of the second calendar year following the year of the withdrawal, then the Homebuyers Plan participant may use it. No sooner than 30 days prior to the withdrawal, and no later than September 30 of the year following the withdrawal, does the Participant acquire the interest or right of the other spouse in the home that was the matrimonial home; and if the Participant has a new spouse at the time of the withdrawal, the new spouse may not own or occupy a dwelling that is the Participant’s primary residenceI How to Withdraw RRSP Funds Under The Home Buyers Plan Fill out form T1036 to make a tax-free withdrawal from the Home Buyers plan. This is a request to withdraw money from a registered retirement savings plan under the Home Buyers’ Plan (HBP). To notify your bank of your desire to withdraw money, please complete this form. Be cautious to follow the correct procedures, since it is impossible to take the funds from your RRSP and then claim they were part of the Home Buyers Plan. Multiple Home Buyers Plan withdrawals are permitted every calendar year, up to a maximum of $35,000. RRSP Home Buyers Plan Repayment Let’s get to the bad news now. The Home Buyers Plan requires you to make annual payments on the full amount of money you withdraw. These payments must begin in the second year after the closing of the Home Buyers Plan withdrawal. The Home Buyers Plan functions similarly to a loan, although interest-free. All money taken out must be paid back within 15 years, at the rate of one-fifteenth each year. Any payments made to settle an outstanding HBP amount will not reduce your contribution limit. Repaying an HBP loan with RRSP contributions is not eligible for the RRSP tax deduction.The amount reported on Schedule 7 as an HBP payback will be subtracted from any RRSP contribution refunds. You should also check that your RRSP contributions are being applied to the HBP loan, not just your RRSP. Many Canadians don’t do this and end up in arrears on their HBP as a consequence. Related posts 18 July 2023 Unlocking Your RRSP: The Home Buyer’s Plan Explained 10 July 2023 How Your Home Warranty Can Help You in an Emergency How Your Home Warranty Can Help You in an Emergency The last thing you want to face

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Reuters survey predicts rising Canadian housing prices due to high demand

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Reuters survey predicts rising Canadian housing prices due to high demand According to a Reuters survey of real estate experts, Canadian house prices are expected to decline by approximately 9 percent this year before rising again in 2024 and beyond as purchasers wager interest rates have already peaked and demand for housing remains high. After skyrocketing by over 50% from the onset of the COVID epidemic in early 2020, Canadian house prices have declined by roughly 15% since March due to the Bank of Canada’s quick rate hike from near-zero early last year to 4.25% in January. Home prices in Canada have been on the increase again this year, increasing by 17% according to one metric, since the Canadian central bank decided for a conditional freeze on rate hikes in January. In a survey conducted between May 15 and June 5 by Reuters, 11 industry experts anticipated that house values would drop by around 9% in 2023, which is less severe than the 12% drop predicted in a poll conducted three months ago and the 12% loss in April from a year earlier reported by the Canadian Real Estate Association. The median forecast from the most recent survey predicted that property prices will grow by 2% in 2024 and by 4% in 2025. After a year-long recession, Canada’s housing market is on the upswing in the spring of 2023. As RBC’s associate chief economist Robert Hogue said, “Demand-supply conditions suddenly appear tight.” “Sellers are once again in control in most major markets as rising demand and falling supply have driven prices up and supply down. Now that the Bank of Canada has halted its aggressive rate raise campaign, buyers’ confidence is fast returning to both markets. Despite widespread predictions that the Bank of Canada would leave rates unchanged all year, another Reuters poll found that if economic growth remains robust and inflation remains high, the BoC may be forced to raise rates again. There may be no relief for rising costs if immigration rates continue to rise with demand. Experts who were asked a follow-up question predicted a small increase in delinquency rates among highly indebted families in 2018. Despite efforts, “Canada’s housing affordability problem is not easing,” said Douglas Porter, chief economist at BMO Capital Markets. While many may advocate for a supply-side solution, we’ve always held that it’s naive to imagine that a sector operating at full capacity can suddenly quadruple production, resulting in a glut of new units that drives down prices and rents. Related posts 27 June 2023 Reuters survey predicts rising Canadian housing prices due to high demand 21 June 2023 Canadian Real Estate Correction Continues, Sales Rise Temporarily: Oxford Econ. Recent Immigrants Cannot Support High Home Prices in Canada After a temporary lull, the real estate market… 24 May 2023 Recent Immigrants Cannot Support High Home Prices in Canada Recent Immigrants Cannot Support High Home Prices in Canada Canada’s population growth is contributing… 16 May 2023 Toronto’s Best Investment Areas for Families Toronto’s Best Investment Areas for Families Don’t be fooled by The Six’s huge towers, high-rises,… 11 May 2023 Sales and prices in Toronto’s real estate market are soaring Sales and prices in Toronto’s real estate market are soaring After last year’s record meltdown,… 11 May 2023 Rise in Toronto’s Home Building Costs Rise in Toronoto’s Home Building Price Even if inflation in Canada has slowed, the price of constructing… 05 May 2023 Toronto and Vancouver Home Prices Rise Like Mortgage Credit Toronto and Vancouver Home Prices Rise Like Mortgage Credit Home prices increased dramatically last month…

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Toronto and Vancouver Home Prices Rise Like Mortgage Credit

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Toronto and Vancouver Home Prices Rise Like Mortgage Credit Home prices increased dramatically last month in Canada’s two most populous real estate regions. In April, home values in both Toronto and Vancouver increased. There has been a gain in sales and a decrease in inventory in both markets, but this probably hasn’t led to the same level of expansion in both locations. More likely to blame are falling mortgage rates, which introduced leverage proportional to the price rises The Value of a Toronto Home Increased by 2.4% in the Past Month Although they are still down from a year ago, Greater Toronto real estate prices increased last month. In April, the median price of a home, or the composite benchmark, increased by 2.4%, or $27,200, to $1,145,700. This is the third consecutive monthly increase, and it follows a gain of 2.5% the month before. Even though home prices are still down dramatically from last year, they are recovering quickly.  It’s a huge increase, and once you consider Canada’s other major and expensive market, the word “unusual” takes on further significance. The Value of a Home in Vancouver Increased by 2.4% Previous Month After hitting rock bottom in January, property prices in the Greater Vancouver are also rising rapidly. The index rose for the third month in April, increasing by 2.4% ($27,400) to $1,170,700. While prices are still lower than this time last year, at the current rate the difference will be made up in less than three months. Today’s experts from both locations didn’t waste any time blaming a lack of stock for the problem. Similar price increases indicate that supply shortages were a factor in both cities. Lower mortgage rates have provided a similarly powerful source of leverage Probably more The easing of credit standards in Canada may be to blame. Borrowers have moved toward fixed rate mortgages as the Bank of Canada (BoC) has kept rates steady. The average fixed mortgage rate dropped by 0.3 percentage points from March to April, increasing the borrower’s leverage by about 2.6% assuming the borrower maintains the same income. It’s also important to remember that the monthly installments won’t change. The standard property purchased in March using a conventional mortgage is essentially the same in April, despite a significant rise. Home prices ate up any “savings” from the reduced interest rate. Both Toronto and Vancouver saw similar results. Price increases in response to rising demand are capped by what can be afforded in terms of servicing existing debt. When the cap is on, squeezing a tube of toothpaste doesn’t accomplish much. It can spread out and take up more space after the top is removed. For the same reason, despite Canada’s record population growth, home prices have fallen due to a lack of mortgage credit. It wasn’t until mortgage rates started going down that prices started going up in tandem with the economy’s growth. Isn’t that shocking? It shouldn’t be, according to Bank of Canada (BoC) studies. Lower interest rates, according to the former Deputy Governor, did not increase affordability because housing values simply adjusted to absorb the decrease. Either that, or your local think tank is correct, and buyers evaluated economic trends, immigrant patterns, and liquidity before concluding that prices should absorb the payment discount from lower rates. Related posts 05 May 2023 Toronto and Vancouver Home Prices Rise Like Mortgage Credit 29 April 2023 To Avoid Defaults, Canadian Banks Extend Amortisations 35 Years To Avoid Defaults, Canadian Banks Extend Amortisations 35 Years What is Canada’s secret for having… 24 April 2023 Canada’s Cheap Mortgage Credit Drives Real Estate Prices… Again Canada’s Cheap Mortgage Credit Drives Real Estate Prices… Again Everyone in Canada is trying to determine… 14 April 2023 Canada maintains 4.5% interest rate, What’s next Canada maintains 4.5% interest rate, What’s next? The Bank of Canada will reveal its decision on… 11 April 2023 TRREB: GTA Competition increases due to tight market conditions  TRREB: GTA Competition increases due to tight market conditions In March 2023, the Greater Toronto Area… 08 April 2023 Why Canadian Homeowners Aren’t Selling Why Canadian Homeowners Aren’t Selling There hasn’t been the usual rush of vendors at Canada’s… 08 April 2023 Toronto Real Estate Correction Pauses, Prices Upto $27k Toronto Real Estate Correction Pauses, Prices Upto $27k Is the Greater Toronto real estate market overpriced?…

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To Avoid Defaults, Canadian Banks Extend Amortisations 35 Years

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To Avoid Defaults, Canadian Banks Extend Amortisations 35 Years What is Canada’s secret for having such low delinquencies despite its high-interest rates? Evidently, they never paid off those enormous mortgages. A significant portion of mortgages had remaining amortizations of 30 years or more in Q1 2023, according to reports from Canada’s Big Six banks. Most of the Big Six reported that at least 30 years of payments would still be made on at least 25 percent of their portfolio. The share was almost nonexistent only a year ago Suddenly, the Big Six Banks of Canada have a large number of mortgages with lengthy remaining terms The majority of mortgages with 30 or more years left to pay off are held by more than half of the Big Six banks. With over a third (32.4%) of its portfolio still in existence as of Q1 2023, BMO topped the list. RBC (27%), TD (29.3%), and CIBC (30.0% of its portfolio) were close behind. It’s important to emphasise that these aren’t 30-year mortgages. They are mortgages with a minimum remaining repayment term of 30 years. Before we go, it’s crucial to understand that not all banks are experiencing this issue. The market shares at National Bank (1%) and Scotiabank (1%) are unchanged from year to year. This indicates that the problem is isolated to those particular institutions and is, at the very least, not a general banking issue. For Canadians, even interest-only mortgages could have been too much How in the world can you ever qualify for a mortgage that long? To receive a loan that long, a specialist product is often needed. The explanation is negative amortisation, which is what lenders are attempting to prevent with borrowers who purchased an excessive amount of real estate. The majority of variable-rate mortgages in Canada have a set monthly payment. Therefore, although the amount applied to the principal varies, borrowers still receive the predictability from month to month. If interest rates drop, more money is put towards the principal of the mortgage and less towards interest. It is a pleasant surprise and generally what occurred over the 30 years before 2021. Renewal borrowers often discover they paid back more than they anticipated. It’s also true that higher rates have a negative impact on principal and a positive one on interest. A sudden rate increase may indicate that the borrower isn’t making enough payments to cover interest. This is negative amortisation, in which the payback period is lengthened. On a long enough time horizon, anyone can afford anything, but it comes at a high interest cost. Some people are prepared to make that compromise in order to manage their payback plan. Canadian Homebuyers Want Lower Payments and Longer Terms Usually, the maximum amortisation is 35 years, but it seems that banks do not believe that is sufficient. The portfolios of the aforementioned institutions still have at least 35 years remaining in them. In the first quarter, there are still at least 35 years of amortisation on almost a quarter (27.4%) of TD’s Canadian residential portfolio. RBC (26%), and CIBC (27%), are not far behind. For almost 30 years, BMO did not break out amortisations. Long Mortgage Terms Almost Didn’t Exist To see how rare this circumstance is, one merely has to compare it to the same time period the previous year. In the first quarter of 2022, just three banks—Scotiabank (1.4%), National Bank (1.3%), and TD (0.3%)—had amortisations greater than 30 years. Seeing two points would have been concerning, but more than one-fourth of mortgages at certain institutions hardly draw attention. Although delinquency rates may continue to be low, this does not guarantee that the nation is safe. A significant portion of wealth has already been diverted from the “productive” economy by the housing sector. If the debt is prolonged for repayment, an economic slowdown caused by more debt would only worsen. 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The Bank of Canada will reveal its decision on… 11 April 2023 TRREB: GTA Competition increases due to tight market conditions  TRREB: GTA Competition increases due to tight market conditions In March 2023, the Greater Toronto Area… 08 April 2023 Why Canadian Homeowners Aren’t Selling Why Canadian Homeowners Aren’t Selling There hasn’t been the usual rush of vendors at Canada’s… 08 April 2023 Toronto Real Estate Correction Pauses, Prices Upto $27k Toronto Real Estate Correction Pauses, Prices Upto $27k Is the Greater Toronto real estate market overpriced?… 05 April 2023 Canadian real estate prices will “rip” higher: SCOTIABANK Canadian real estate prices will “rip” higher: SCOTIABANK Canadian real estate may be sluggish…

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Canada’s Cheap Mortgage Credit Drives Real Estate Prices… Again

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Canada’s Cheap Mortgage Credit Drives Real Estate Prices… Again Everyone in Canada is trying to determine why real estate prices have suddenly increased. However, the data from the Bank of Canada (BoC) points to a more direct explanation: witchcraft. In reality, it’s the return of easy access to debt and the resulting increase in leverage. The decrease in new mortgage interest rates in February provided leverage comparable to that seen in March’s increase in home prices. Interest rates for Canadian mortgage borrowers are dropping Lenders in Canada are benefiting from a flood of new home loans with reduced interest rates. In February, rates on new loans were 5.53%, down from 5.63 in January. The current rate is 3.14 percentage points more than it was this time last year, and it is higher than January. That’s more than in the previous month but less than in the same period last year. This is a crucial reminder as we continue to analyze the data. There Is Minimal Effect At This Point On Canada’s Mortgage Stress Test At present levels of mortgage debt in Canada, changes in interest rates are felt quite keenly. Canadian banking watchdog  OSFI has a stress test for mortgages called Guideline B-20. Borrowers will be able to pay either 5.25% interest (the maximum allowed by the Guideline) or the contract rate plus 2 percentage points. It performs an excellent job of limiting credit up to the 5.25% line, but thereafter leverage starts swinging wildly. The amount people are able to borrow responds extremely instantly to changes in the interest rate. It’s important to note that not all mortgage lenders are subject to the stress test Non-stress-tested lenders have their own methods of reducing exposure to risk. If the interest rate is over a certain threshold, then the quoted rate is used for the computation. This morning, I opened my go-to mortgage app to find that helpful hint waiting for me. There’s no harm in reminding folks that they have more leverage than they realize, right? So, are you any closer to understanding the stress test now? Imagine you were able to negotiate a 6.00% interest rate on your mortgage (by the way, your mortgage broker is lousy) and an 8.00% stress test rate. Now let’s say your pal decides to borrow a month from now and locks in a mortgage rate of 5.75 percent. They’ve also gotten an additional 0.25 percentage points off their stress test rate.  It didn’t matter much when mortgage points were 2 and the minimal stress test rate was 4.75%. The floor was put in place, reducing the impact on everyone other than those with big pockets. The Effects of Interest Rates and Borrowing in Canada You need to know that leverage is related to housing prices in order to appreciate the significance of this. This is common knowledge, as evidenced by a recent explanation from a former BoC Deputy Governor on how low interest rates encouraged borrowers to spend more money on the same home. Interest savings due to lowering rates were formerly widely accepted. Over the past 30 years, historically, low-interest rates have not benefited purchasers, but given sellers more bargaining power. For thirty years, prices rose to compensate for the shortfall, until someone eventually did the math. To borrow money, or use leverage, is to squander the fruits of your future effort right now. A certain way to drive up housing costs is to provide incentives for individuals to buy what they need and then allow them to borrow more and more of their future earnings to pay for it. This is Canada’s housing catastrophe, and it was made this way on purpose. Recent Home Price Growth in Canada Is Reflected in Falling Mortgage Rates Take another look at the uninsured mortgage rate. Although a 0.12-point decline in February may not seem like much, it would increase a buyer’s purchasing power by about 1.2%. That’s an additional $11,500 in debt for a couple making $200,000 annually. It’s extremely close to the $12,300 gain that the median house saw in March. It is quite likely that the whole growth was due to the use of leverage. For the return of low-cost leverage, the Bank of Canada should just ease off on quantitative tightening. Government bond liquidity has not been tightened, thus falling fixed mortgage rates continue to stimulate demand. 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Canada maintains 4.5% interest rate, What’s next

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Canada maintains 4.5% interest rate, What’s next? The Bank of Canada will reveal its decision on the benchmark interest rate it will use going forward. Even if the economy performs better than projected, most economists believe the central bank will maintain its key interest rate at 4.5 percent. The economy started the year strong, even with interest rates at a record high, and unemployment around record lows. The Bank of Canada has stated that it would like to see an additional economic slowing in order to return annual inflation to its objective of 2%. For the second month in a row, February’s inflation rate of 5.2% was lower than expected. Today’s monetary policy report will also include the Fed’s most recent growth and inflation forecasts. The prime interest rate has increased dramatically during the past year, from near zero to its highest level since 2007. The Bank of Canada issued its eighth straight rate increase in January and said that it plans to keep its key interest rate unchanged if economic growth continues in line with its projections. Most economists believe the Bank of Canada will keep its benchmark interest rate unchanged on Wednesday, arguing that further rate hikes would come too soon. The central bank’s goal of dampening economic activity has been aided by the general trend of the economy. “There really were no significant surprises here,” said Douglas Porter, chief economist at BMO. The Federal Reserve in the United States has recently indicated that it intends to continue raising interest rates. Still, the Bank of Canada’s policy is beginning to diverge from that of the Fed. Stephen Gordon, an economics professor at Laval University, argued that the United States’ monetary policy does have consequences in Canada. The Canadian dollar may weaken and import costs may rise if investors decide to move their money to the United States in response to higher interest rates there. “It’s not an automatic thing of,” Gordon said, “the (Bank of Canada) has to follow the Fed.” The Canadian economy stalled in the fourth quarter, and inflation dropped to 5.9% in January, according to recent figures. Although “the labor market remains very tight,” the central bank stated conditions should improve and wage growth should slow. Suppose the 150,000 jobs added in January were a one-time occurrence or a sign of underlying strength in the labor market. In that case, we should learn more from the February labor force survey, which will be released on Friday, according to Porter. The Bank of Canada maintains its forecast that annual inflation in Canada will decline to around 3% by the middle of the year. There will need to be a “surprise” for the Bank of Canada to act again in the form of an interest rate hike, according to Gordon. Inflation in Canada is predicted to remain low this year due to base year effects, barring any unforeseen developments. The influence of price changes from the previous year on the determination of the annual inflation rate is referred to as the base-year effect. Price increases accelerated in the first half of 2022 as fears of a Russian invasion of Ukraine materialized, but analysts anticipate that the annual inflation rate will continue to decline in the coming months. The rate of inflation is currently declining, as Gordon has stated. Further time is required for the economy to react to past interest rate hikes, which can take as long as two years. The Bank of Canada reports that international economic growth is trending roughly as predicted. However, it noted that “upside risks” that could increase inflation include the robustness of China’s economic recovery and the impact of Russia’s war in Ukraine. In the future, Porter predicts that the Bank of Canada will have “limits” in its ability to diverge from the Federal Reserve. Because of their interconnected economies and shared stresses, he continued, both countries would benefit from higher interest rates. “If the U.S. economy is really showing more underlying strength and greater inflation pressures, those will probably get reflected eventually in Canada as well,” he added. The Bank of Canada is scheduled to release its next interest rate decision and quarterly monetary policy report on April 12. 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Despite the slowdown, Canadian mortgage debt continues to rise

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Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession, Canadians still have a serious addiction to mortgage debt. According to Stat Can, the sum of outstanding mortgage loans reached a new high in December of 2022. Even while the rate of increase in mortgage credit has fallen to its lowest point in years, it is still significantly higher than it was before 2020. With a GDP as large as Canada’s and expanding at a much quicker rate, it continues to be a cause for concern. Total Canadian mortgage debt exceeds $2 trillion The mortgage debt in Canada continued to grow by billions towards the end of last year. In December, the total amount due reached $2.08 trillion, an increase of 0.1%, or $3.0 billion. Compared to last year, this is a $137.8 billion (7.1%) rise. The fact that one-third of a very small population is responsible for so much debt is cause for alarm in and of itself. But the rate of expansion is slowing down. When interest rates rise, mortgage borrowing in Canada slows dramatically Mortgage credit is being slowed by slowing real estate sales and rising rates. In February of 2022, a month before the initial increase to the overnight rate, annual growth peaked. Every month since then has seen slowing, culminating in December’s reported rate of 7.1%. Since October of 2020, it has been declining at an ever-faster clip. Mortgage Debt Continues to Outpace Productivity Despite Slower Growth Please keep in mind that slowing down is not the same thing as being slow. The amount of mortgage credit that is currently outstanding continues to grow at an abnormally rapid clip. The rate in December was still 1.4 percentage points above the average for the five years preceding to 2020. Even though its size is comparable to GDP, its growth rate is substantially higher. Increase in Mortgage Debt in Canada Slowly but surely, rising interest rates are putting an end to Canada’s mortgage binge. But if mortgage lending expands faster than GDP, consumer spending would inevitably fall. In a nutshell, the unproductive financial economy is stifling the productive economy, which is terrible for long-term expansion Related posts 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise. 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a… 30 January 2023 How can homeowners safeguard against title fraud? How can homeowners safeguard against title fraud? There are new reports of title fraud every week, and… 30 January 2023 Bank of Canada will increase rates, and leave room for more: BMO Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t… 28 January 2023 How To File A Warranty Claim And What You Can Anticipate How To File A Warranty Claim And What You Can Anticipate There has been a recent surge in the population… 28 January 2023 Three Improved Ways to Understand Your Warranty Three Improved Ways to Understand Your Warranty Purchasing a home in the pre-construction phase can be… 28 January 2023 Can I Have A New Home Warranty Even If It’s Not New? Can I Have A New Home Warranty Even If It’s Not New? Did you buy a previously owned house recently?…

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Bank of Canada will increase rates, and leave room for more: BMO

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Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t see a rate cut this year is that Canadian markets have already started talking about them. Over the weekend, BMO Capital Markets sent a letter to investors stating their anticipation of a rate increase this week. Currently, they predict a pause in rate hikes by the Bank of Canada (BoC) following the upcoming one, but they caution that this may not be the BoC’s limit. Hikes in the future could be fueled by bullish fundamentals, inflationary concerns, and market anticipation. The Bank of Canada Is Likely To Raise Interest Rates Next Week It is widely anticipated that the Bank of Canada will increase its overnight rate this week, marking its entry into the supposedly restrictive terrain it has previously addressed. According to BMO, the overnight rate will increase by 25 basis points (bps), making it equal to its 20-year high. There is anticipation that this will be the highest point for the year, but they caution that further increases cannot be ruled out. The BMO rate and macro strategist Benjamin Reitzes argues that with inflation still far above target, we predict that Governor Macklem and the Governing Council will keep the door open to further increases just in case the data forces their hand. He said the BoC may surprise the market by cutting rates before the fall, when cuts are widely expected. There’s reason to think there might be even more hikes down the road Canada’s Base Is Solid, and It May Not Need To Ease There is much speculation of a recession, yet there are few indicators of a downturn in Canada’s fundamentals. The preferred gauge of inflation used by the BoC, core CPI, is still above 5% and much above the 2% target rate. December’s employment report showed another near record growth, indicating that the economy is still humming along strongly. The Bank of Canada’s Business Outlook Survey from last week was a major shortcoming. Its data demonstrated a decline in morale, although companies maintained an optimistic outlook. Despite the slowdown, Reitzes argues that it is intentional on the part of the BoC. They’re attempting to reduce inflation by cooling the economy. More dangerous than credit shortages is the possibility of an inflationary spiral. Moreover, BMO suggests the BoC may raise rates for risk management reasons. They would rather keep inflation under control than have it spin out of control if they are overly permissive. The latter is a more serious issue that requires a more dramatic cooling event to mitigate. In this situation, it’s preferable to err on the side of caution than carelessness. While there has been some good inflation news as of late, that doesn’t mean the trend will continue. Upside inflation risks still exist, but they have diminished since he made those comments a few months ago. Due to market anticipation of a reduction, the BoC may be compelled to raise rates Since the market is already factoring in planned layoffs by this fall, it’s time to start a fresh funding round, right? For precisely this reason, the BoC may be unable to decrease interest rates. A resurgence in economic activity may be possible before it completely dies down if expectations shift in a lenient direction. According to Reitzes, this could lead to even higher inflation before the desired effect is seen. “While the BoC isn’t excessively busy with the market, improved financial conditions go counter to the purpose of lowering inflation pressure, and cannot be a positive development,” he argues. BMO believes that a 25 bps raise is warranted on the basis of fundamentals, risk management, and market conditions. Although, as Reitzes points out, the BoC often attempts to surprise. This keeps a central bank relevant by discouraging individuals from taking actions that run counter to its current objective. That’s why, he advises, we shouldn’t rule out pausing the meeting this week. They still want to go on future excursions, despite this setback. In particular if core inflation proves to be more persistent than expected. Related posts 30 January 2023 Bank of Canada will increase rates, and leave room for more: BMO Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t… 28 January 2023 How To File A Warranty Claim And What You Can Anticipate How To File A Warranty Claim And What You Can Anticipate There has been a recent surge in the population… 28 January 2023 Three Improved Ways to Understand Your Warranty Three Improved Ways to Understand Your Warranty Purchasing a home in the pre-construction phase can be… 28 January 2023 Can I Have A New Home Warranty Even If It’s Not New? Can I Have A New Home Warranty Even If It’s Not New? Did you buy a previously owned house recently?… 26 January 2023 Process of warranty claim and what to expect? Process of warranty claim and what to expect? Everything about your new house would be wonderful if you… 25 January 2023 Home Snow Removal? Remember These Spots Home Snow Removal? Remember These Spots One constant of an Ontario winter is snow. Sometimes quite a… 23 January 2023 Lower Bond Yields Mean Lower Fixed Mortgage Rates Lower Bond Yields Mean Lower Fixed Mortgage Rates Mortgage debtors may finally see some relief after…

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Process of warranty claim and what to expect?

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Process of warranty claim and what to expect? Everything about your new house would be wonderful if you could just move in. It’s possible that you’ll discover anything that needs fixing, finishing, or installing after your builder has left. However it is important to ensure that builders meet minimal customer service requirements when addressing warranty repairs or issues with newly constructed homes. Submission of a Warranty Claim Submitting a warranty form initiates the warranty claim procedure. To ensure timely processing of your warranty claim, please submit all required paperwork after closing on your new home. When you file a warranty claim, Tarion and the builder are made aware of your concerns, and Tarion can step in to mediate any disputes about the guarantee, if necessary. Be as detailed as possible when describing the type and location of the issue on the warranty form. Photos, movies, and other visual evidence might be helpful as well. How and when to fill out a warranty form? If you have a warranty claim, please fill out one of these forms and submit it to Tarion: 30-Day Form: A 30-Day Form must be submitted within the first 30 days of ownership. Fill out this form to inform your builder of any issues that have emerged since you took possession of your house that were not addressed during your pre-delivery inspection. If you want to report multiple issues under warranty, please submit separate 30-Day Forms for each. Year-End Form: A Year-End Form must be submitted during the final 30 days of the first year of ownership. Please use this form to document any current warranty issues. Remember that the one-year guarantee is the most thorough, and that this is your last chance to notify Tarion of problems with things that fall under that warranty. You may lose warranty coverage for some purchases if you miss the deadline for submitting your Year-End Form. There is only one Year-End Form that will be approved. Second-Year Form: Anytime during the second year of ownership is acceptable to file a Second-Year Form. This form should be used to document any defects that fall under the two-year guarantee. In this window, you may submit as many Second-Year Forms as you feel is necessary. Major Structural Defect Form: Anytime after the second year of possession and before the seventh year from the date of possession is acceptable for filing a Major Structural Defect Form. Please fill out this form to report any severe structural defects that fall under the seven-year warranty. It is acceptable to submit several Major Structural Defect Reports. Once a warranty form is submitted, what happens? If you submit your warranty form within the allotted time frame, your builder has 120 days to address any covered issues. You have 30 days from the conclusion of the original repair period to contact Tarion and request a conciliation if your builder hasn’t repaired or otherwise resolved warranted items. This is true regardless of which warranty form you’ve filled out and submitted (30-day, Year-End, 2-year, or Major Structural Defect). After receiving your warranty form, Tarion will evaluate any disputed or missing items and let you know if they are covered or not through the conciliation procedure. Conciliation usually entails an unbiased representative from Tarion coming to your home to conduct an inspection. When a conciliation is requested, the builder is given an additional 30 days to address the issues listed on the warranty form. Your builder will need access to your home during the designated repair periods, during which you are responsible for granting them access to make any repairs and working with them to resolve any issues that may arise. There is a deadline for requesting a conciliation, after which the elements on your form will be removed and Tarion will no longer be able to help you. The Mediation Process for Warranty Claims Tarion will conduct the conciliation to determine if the items on your form are covered by the warranty. This happens if the builder does not settle them within 30 days of your conciliation request. The Tarion inspector will also review the paperwork you and the builder submit after the home inspection. Following the conciliation, Tarion will provide you and your builder with a written report detailing their findings. If Tarion determines a problem exists with a warranted item, the builder has 30 days to address the issue. Related posts 26 January 2023 Process of warranty claim and what to expect? 25 January 2023 Home Snow Removal? Remember These Spots Home Snow Removal? Remember These Spots One constant of an Ontario winter is snow. Sometimes quite a… 23 January 2023 Lower Bond Yields Mean Lower Fixed Mortgage Rates Lower Bond Yields Mean Lower Fixed Mortgage Rates Mortgage debtors may finally see some relief after… 21 January 2023 Denied mortgage renewal: What happens next? Denied Mortgage Renewal:What happens next? If you want to keep paying down your mortgage after the current… 19 January 2023 Canada’s Bank Regulator Wants Tighter Real Estate Risk Rules Canada’s Bank Regulator Wants Tighter Real Estate Risk Rules More stringent rules on mortgage borrowing… 16 January 2023 Reasons a robust labour market could affect your mortgage interest rate Reasons a robust labour market could affect your mortgage interest rate Over the past year, Canada’s… 13 January 2023 Is it necessary to pay Toronto’s new vacant home tax? Is it necessary to pay Toronto’s new vacant home tax? The new Vacant Home Tax in the City of Toronto…

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Denied mortgage renewal: What happens next?

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Denied Mortgage Renewal:What happens next? If you want to keep paying down your mortgage after the current term ends, you’ll need to renew it. You will have to repeat this procedure several times before your mortgage is paid off. Lenders typically issue renewal offers a few months before a term ends. A new mortgage rate and a slip to sign and return will be included in the offer. The new rate and term length will match your present mortgage. This may be more convenient, but it doesn’t guarantee acceptance. The long-term costs can add up, so it’s best to look into other options when it’s time to renew your service. So, what happens if your application to renew your mortgage is denied? Don’t freak out right away; there are things you can do. If you have been denied a mortgage renewal, please follow these steps. The Reasons Your Mortgage Renewal Was Denied First, depending on who you’re dealing with, there are two potential reasons your mortgage renewal application could be rejected. Lender refuses to renew the loan The fact that your present lender doesn’t have to re-qualify you is a positive factor in remaining with them (for example, determine your debt service ratios and require you to pass the mortgage stress test). If you have been making your mortgage payments on time and haven’t missed any throughout your current term, your lender shouldn’t have any reason to refuse your renewal application. However, your lender will still look at your present financial circumstances to see if you have accumulated more debt than it thinks you can afford to repay, if your credit score has taken a hit, or if your work situation has changed for the worse. Your present lender has the right to not renew you if it has any worries about your financial situation. Using our mortgage payment calculator is a great idea before your renewal date rolls around. Your mortgage renewal could be denied if you have a hard time seeing how you’ll be able to keep up with payments given the present interest rates. The new lender will not approve the renewal. You can try to renew your mortgage with a different lender if your present lender refuses to do so, or if you just wish to compare rates (you can contact a mortgage broker or mortgage agent to help you find a new lender). To make matters worse, switching lenders actually increases your likelihood of getting rejected for financing. This is because renewing your mortgage requires a fresh application. After reviewing the renewal slip provided by your current lender, the new lender will learn nothing about your financial status other than the outstanding balance of your mortgage. Therefore, it is necessary that you pass a mortgage stress test in addition to having your income and credit verified before it can approve your application. If you’ve been late on mortgage payments or otherwise ruined your credit, you may have a hard time getting approved by a new lender. In that situation, you may choose to stick with your present lender as it doesn’t have to re-qualify you. If you’re in the market for a new mortgage and have some time until your current one expires, check out our mortgage affordability calculator to get a sense of how much you might be able to borrow. Keep in mind that the best fixed and variable rates on the market today are both higher than 5.25%, so you should run that scenario when determining what you would be able to pay as a new applicant in order to pass the mortgage stress test. You can expect this information to be used by a potential new lender in making a decision about whether or not to extend you credit. Steps to Take If Your Renewal of Your Mortgage Is Refused If your application to renew your mortgage was rejected, what should you do now? Let’s imagine you tried to find a better deal by approaching a new lender, but were turned down. If you want to keep paying your mortgage, the first step is to talk to your lender about renewing your loan. For those who have been turned down by their present lender: In the event that your existing lender refuses to renew your mortgage, or if a new lender declines to do so, you will need to find another lender or pursue alternative options. If your mortgage renewal was declined by your existing lender, you have several choices, listed from best to worst. Locate a class B lender. Talk to B lenders about your position if your first mortgage was with an A lender like a bank or credit union. Institutional lenders with a B rating are often trust businesses or those who specialise in lending to those with poor credit. People with poorer credit scores and/or higher debt loads are more likely to receive a loan from them than they would be from a lender with a grade of A. Make contact with a private lender. Your chances of getting approved by any lender are slim if your credit score is below 620. A private lender is an option if this situation arises. This is not an ideal situation because private lenders typically offer the highest mortgage interest rates available. Put your house up for sale. You might have to sell your home if you can’t acquire a mortgage that works for your budget. Since you’ll have to sell your home and relocate quickly, this is the worst conceivable scenario. You might not have enough time to consummate the sale and renew your mortgage before the term ends. To get by, you may need to get a short-term or open mortgage, whether from a B lender or a private lender. Related posts 21 January 2023 Denied mortgage renewal: What happens next? Denied Mortgage Renewal:What happens next? If you want to keep paying down your mortgage after the current… 19 January 2023 Canada’s Bank Regulator Wants Tighter Real

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