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How Your Home Warranty Can Help You in an Emergency

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How Your Home Warranty Can Help You in an Emergency The last thing you want to face when moving into a new home or condominium is an emergency, such as a total loss of heat or an extensive plumbing leak. After all, everything in the house is spanking new, including the principal systems and materials, and the house was examined at various phases of construction. Even yet, situations do occur from time to time. Fortunately, your Tarion-managed new home warranty covers situations that can be traced directly to your builder’s labor and supplies. What is an emergency? According to Ontario’s new home warranty, an emergency happens within the warranty term and includes a guaranteed fault that, if not addressed quickly, will cause significant damage to your house, condominium unit, or standard condominium features. An emergency might also endangers your health and safety or renders your house uninhabitable. Examples of typical emergencies that may be covered under warranty include: complete loss of heat between September 15 and May 15 complete loss of electricity a gas leak complete loss of water complete stoppage of sewage disposal; a plumbing leak that necessitates shutting off the entire water supply a major collapse of any part of the home’s exterior or interior structure water penetration through the interior walls or ceiling a pool of standing water inside the home and/or the presence of unacceptable levels of hazardous substances. It should be noted that an emergency scenario over which the builder has no control, such as municipal or utility service breakdowns, is not covered by the builder’s guarantee. What should you do in an emergency? In the event of an emergency, you should contact your builder as soon as possible since you are responsible for handling the warranty procedure for your property. Afterward, your builder has up to 24 hours to handle the emergency problem by making your house safe and avoiding future damage. What if you can’t contact your builder or if they don’t handle the situation within 24 hours? That’s when you may contact Tarion for advice on handling the emergency scenario. Tarion has a dual function in this circumstance. First, they ensure homeowners get the warranty coverage to which they are entitled. Second, when builders fail to satisfy their duties, we hold them responsible. If you are unable to contact your builder or Tarion, you or a contractor you hire may do the required repairs to handle the immediate issue and then file a claim to be compensated for the expenditures. You must preserve records of the emergency and repair work done, save all receipts and take photos before and after the repairs. After dealing with the immediate emergency, your builder has 30 days to thoroughly remedy the fault. If they don’t, you may contact Tarion to address the issue. Nobody wants or anticipates an emergency to ruin their first house-buying experience. But, if they do occur, you can be certain that steps are in place to guarantee that you can quickly return to fully enjoying your new home. Related posts 10 July 2023 How Your Home Warranty Can Help You in an Emergency 02 July 2023 Four 2023 new home buyer facts that may surprise you Four 2023 new house buyer facts that may surprise you Tarion revealed the findings of its initial poll… 02 July 2023 3 “warranty exceptions” for warm weather 3 “warranty exceptions” for warm weather Your routines as a new homeowner will likely shift when the… 27 June 2023 Reuters survey predicts rising Canadian housing prices due to high demand Reuters survey predicts rising Canadian housing prices due to high demand According to a Reuters survey… 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,…

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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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Sales and prices in Toronto’s real estate market are soaring

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Sales and prices in Toronto’s real estate market are soaring After last year’s record meltdown, Toronto’s housing market came roaring back to life last month as the annual spring selling season produced a jump in both sales and home prices. According to data released Wednesday by the Toronto Regional Real Estate Board, on a seasonally adjusted basis, the number of house sales in Canada’s most populous city increased by 27% in April compared to March. Outside of the recovery from the Covid lockdowns in 2020, it is the largest monthly gain in the previous two decades. In April, the average price of a property in Toronto, which is C$1.11 million ($815,000), was up 2.4% from the previous month. This increase completely reversed prior drops in pricing for the year, with prices being 0.5% higher overall. According to Toronto real estate agent Tom Storey, “this is seasonal activity in the way things typically happen, but the difference this time is that inventory is not just low but extremely low.” There was a lack of listings because “sellers didn’t want to put their property on the market in a market they were told wasn’t very good.” After a historic drop in prices in 2017 due to the Bank of Canada‘s aggressive rate rises, prices have already begun to rise again. With the central bank on hold, buyers have returned, refocusing attention on the severe lack of inventory that made Canada’s real estate market so competitive in 2017. “As demand for ownership housing has picked up relative to supply, we are seeing renewed upward pressure on home prices,” said Jason Mercer, the real estate board’s senior market analyst, in a news statement accompanying the study. He claimed the “persistent lack of listings” is making it harder for people to purchase homes. National Bank of Canada said in a research note on Wednesday that the amount of new listings entering the Toronto market lags considerably behind the growth in sales, at only 2.8%. That resulted in a 12.3% decrease in the inventory of homes for sale, which had been building up over the previous year, and left the city’s active listings to sales ratio, a metric of buyer competition, tighter than the historical norm, as noted. Supply shortages and price increases aren’t exclusive to Toronto’s real estate market. Vancouver, historically one of the most expensive markets in the nation, also witnessed a 2.4% increase in its benchmark price last month. According to Vancouver Real Estate Board Director of Economics and Analytics Andrew Lis, “the issue remains a matter of far too little resale supply available relative to the pool of active buyers in our market,” as stated in a press statement on Tuesday. After a difficult year, “home buyers are returning with confidence as evidenced by rising prices and a rebound in sales this spring” Related posts 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… 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…

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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. Related posts 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?… 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… 05 April 2023 After just 86 days, Canada quietly reversed sections of its foreign buyer ban After just 86 days, Canada quietly reversed sections of its foreign buyer ban After hours of enforcement,…

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Toronto Real Estate Correction Pauses, Prices Upto $27k

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Toronto Real Estate Correction Pauses, Prices Upto $27k Is the Greater Toronto real estate market overpriced? The composite benchmark, or average house, had a price increase in March, according to statistics from the Toronto Regional Real Estate Board (TRREB). Despite the uptick, home sales have been dismal, and that isn’t expected to change anytime soon, according to industry analysts. For a second consecutive month, though, purchasers drove prices significantly higher. Home values in the Greater Toronto Area increased by $27,000 in only one month A year after interest rate rises, property prices in the Greater Toronto Area have surged. In March, the TRREB standard surged 2.5% (+$27,200) to $1,118,500. Toronto’s benchmark also increased, reaching $1.101 million (a gain of 2.2%, or +$24,100) from the previous month. The BoC’s annual inflation objective is 2%, therefore, this month’s rise was higher than that. Real estate prices in the Greater Toronto Area may have reached bottom Real estate prices in the Greater Toronto Area are still falling, but they may be bottoming out. Prices in TRREB have decreased by 16.2% (-$216,200) and in the City of Toronto by 13.1% (-$167,500) during the last year. But, the worst of the last year’s decline is over, and prices have risen by around 1 point relative to each benchmark. There is no sign of a rebound in the Greater Toronto Area’s housing market There was no increase in house sales to blame for the price increase. March existing home sales in the Greater Toronto Area dropped 36.5% to 6,896 units. That’s down considerably from the previous year and the lowest level seen in at least the past five years. There won’t be a dramatic shift in sales, according to industry experts. According to National Bank of Canada analyst Daren King, “despite these early indications of stabilization, sales remain significantly below their historical norm, having plummeted by 49.8 percent from their previous high in February 2022.” (NBF). Nevertheless, “…the possibility of a rebound in the housing market remains modest since we estimate the Bank of Canada to hold its policy rate at the present restrictive level for most of 2023,” they write. So, in the future months, sales should continue to be below their long-term average. The Supply of Preexisting Properties Declines Reduced stock levels may be attributed to retailers responding to improved credit availability. According to King, March’s drop in new listings followed a 24% drop in February. As a result, the number of active listings (as opposed to the total number of listings) has dropped by 21%. According to King, “as a consequence, market conditions in Toronto are somewhat tighter than the historical norm,” as measured by the active-listings-to-sales ratio.The Canadian real estate market, which is driven by moral hazard, has come to believe that a poor economy is beneficial to property values. Although King may be correct that sales will be flat for most of the year, investors are looking forward to lenient loan terms as a result of the worldwide financial crisis. The current narrative is that the state’s attempts to foster low-cost development will lead to a spike in property prices. Whether or whether they are incorrect is unclear at this time. Related posts 08 April 2023 Toronto Real Estate Correction Pauses, Prices Upto $27k 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… 05 April 2023 After just 86 days, Canada quietly reversed sections of its foreign buyer ban After just 86 days, Canada quietly reversed sections of its foreign buyer ban After hours of enforcement,… 31 March 2023 Non-Canadians can buy property more easily Non-Canadians can buy property more easily Certain limitations on foreigners buying residential property… 21 March 2023 What You Should Know About the Toronto Vacant Home Tax What You Should Know About the Toronto Vacant Home Tax The Toronto Housing Affordability Task Force has… 18 March 2023 Canadian real estate prices rise for the first time in almost a year The fundamentals of the underutilised housing tax The real estate market in Canada has been experiencing… 18 March 2023 The fundamentals of the underutilised housing tax The fundamentals of the underutilised housing tax There has been some confusion over who will be required…

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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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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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Lower Bond Yields Mean Lower Fixed Mortgage Rates

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Lower Bond Yields Mean Lower Fixed Mortgage Rates Mortgage debtors may finally see some relief after months of steadily increasing rates. Five-year fixed mortgage rates have declined modestly over the past week in response to falling bond yields. Moreover, economic indicators suggest we may have already seen our last price peak. Bond yields on Canada’s five-year government issue have dropped below 3% again, to 2.8% as of January 18th. That’s a drop of 61 basis points from the last day of December, and a change of 22 basis points in just one week. The best mortgage rate in Canada has dropped to 4.39% from 4.54% last week. This has happened as a result of this trend among several financial institutions to reduce their fixed five-year rates. Of course, a difference of only 15 points may not seem like much. However, in the current high interest rate climate, it’s encouraging to see any glimmer of respite. In addition, if the economy continues on its current path, fixed-rate borrowers may see further rate stabilisation. The Canadian mortgage rate should be at or near its high right now, according to BMO Senior Economist Robert Kavcic’s research paper. The Bank of Canada is widely anticipated to increase rates by another 25 basis points next week. This may halt the ongoing rise in variable mortgage rates. Canadian five-year bond rates have fallen below the lows reached in December. This is due to the recent recovery in the U.S. Treasuries and Government of Canada bonds. The current interest rates are far higher than the 1.5–2% range that was accessible a year ago. He further says that the “pause in upward momentum should help at the margin, and offer some comfort that the worst of the rate shock is behind us.” A drop in bond yields Bond yields are currently falling due to optimistic inflation data due out this week. Moreover, due to the rising views that the Bank of Canada is finishing its rate hike cycle. Reason being, changes in the economy are immediately reflected in the yields. Demand for government bonds tends to rise when economic conditions are favourable. Thus, driving up bond prices and reducing bond rates. Let’s examine the bond market in more detail to help you understand it. What is a bond? Bonds are a sort of investment whereby the investor receives a return (sometimes called a yield) in exchange for investing funds for a specified period of time (the most popular are two-, five-, and 10-year terms). When a bond matures at the end of its term, the investor gets their initial investment back plus any interest accrued. Bonds compete with one another based on the amount of interest income they provide. Any bonds issued following the interest rate increase will be worth more than the existing bonds. That’s because current bonds lose value whenever the Bank of Canada raises interest rates, forcing sellers to cut prices. Bond yields need to rise as bond prices fall so that they can continue to attract buyers. They have risen by approximately 350 basis points from their lows due to the Bank of Canada’s decision to raise its benchmark interest rate by 4% between March 2022 and December 2022. Thus, bringing its Overnight Lending Rate to 4.25% today. The effects of inflation on bond prices Bond yields are lowered by inflation because of the erosion of purchasing power caused by rising consumer prices. The persistently high rate of inflation, which reached a 40-year high of 8.1% this June, has contributed to a rise in bond yields for the year 2022. But the most recent CPI in December indicated inflation rise had slowed to 6.3%. Further suggesting that the Bank of Canada would pause its rising cycle or delay any rate movement in its upcoming January 25th statement.  This has lifted bond demand (and hence lowered yields). To give you an idea of how inflation affects bond yields, consider that in September 1981, when Canada’s CPI was a stunning 12.47%. Moreover, the country’s highest ever five-year yield was 18.78%. In contrast, the lowest yield ever recorded was in March of 2020, when it hit a record low of 0.276 percent due to tepid price increases (0.9 percent). This was due to widespread panic over a potential pandemic. Why do yields have such an impact on fixed mortgage rates? Bonds issued by the Canadian government are widely regarded as a safe and lucrative investment option. This is due to their high liquidity and low risk profile. As such, consumer lenders use them to establish the benchmark cost for fixed-rate borrowing products. Typically a spread of 100 to 200 basis points above the five-year yield (the best five-year rate as of today is 4.39 percent, 159 basis points above the yield). If yields continue to decline, borrowers can anticipate even more substantial reductions in their fixed mortgage rates from their financial institutions. Conclusion Today’s fixed mortgage rates are still higher than they were a year ago. However, there is growing hope that inflation’s slowdown will help them stabilize or slightly decrease in the near future. This is wonderful news for anyone in the market for a mortgage. Borrowers should do their due diligence in the coming months. This is to ensure they are receiving the best rates possible. It is because rate conditions can change rapidly in response to shifting economic conditions. Free of charge, you can stay abreast of market shifts by establishing contact with a mortgage broker. Related posts 23 January 2023 Lower Bond Yields Mean Lower Fixed Mortgage Rates Canada’s Bank Regulator Wants Tighter Real Estate Risk Rules Mortgage debtors may finally see some… 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

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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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Reasons a robust labour market could affect your mortgage interest rate

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Reasons a robust labour market could affect your mortgage interest rate Over the past year, Canada’s job market has been red hot thanks to the country’s booming economy and the easing of pandemic lockdowns. Statistics Canada’s most recent data confirms this trend. In December, the national employment rate rose by 0.5% from November (representing an increase of 104,000 positions). Thus,+ totaling 3.7% growth over the course of 2022. ( a total of 701,000 new hires). So, the jobless rate fell 0.1% to 5%, surpassing the 4.9% recorded in June and July of last year for the first time ever. This metric reached its highest point since 1976 in May 2020. Thus reflecting how much employment has improved since the earliest days of the pandemic. While it’s great that there are so many job opportunities, rising inflation and interest rates might make life difficult for Canadians. This is especially for people who are already stretching their budgets to the limit. That’s because the Bank of Canada, the country’s central bank, wants to see economic activity cool before it can stop raising interest rates. A hot month for hiring isn’t helping the cause of keeping inflation in check. Economists expect an increase in interest rates Economists are predicting that the Bank of Canada will raise interest rates by 0.25 percentage points on January 25. This is in response to this recent data and last month’s stronger-than-expected inflation report. The Overnight Lending Rate, the benchmark against which other interest rates are measured, would rise to 4.5 percent. If this happened, marking its highest point since July 2007. Desjardins Economics Principal Economist Marc Desormeaux writes in a research note that the December jobs report does “tilt the odds in favour of one final 25 [basis point] rate hike from the Bank of Canada later this month.” Further highlighting the fact that it was the seventh consecutive month in which gains in hourly earnings for permanent employees exceeded 5%. Despite other economic indicators showing signals of slowing growth, the apparent strength in hiring likely means the central bank’s job isn’t done yet, he says. The governor has been stressing the importance of rebalancing the labour market for inflation normalisation in recent months. In a speech given in November, Bank of Canada Governor Tiff Macklem attributed the country’s high inflation rate to the historically low unemployment rate. Desormeaux is alluding to this speech. Macklem said at the time to a crowd at Toronto Metropolitan University. He said that the inability of business owners to find and keep enough workers was a symptom of the general imbalance. This imbalance is between demand and supply that was fueling inflation and hurting all Canadians. Why does Canada’s central bank have to cut inflation rates? Similarly to the labour market, inflation picked up speed when the economy was opened back up. Geopolitical issues, such as the crisis in Ukraine, have put increased pressure on the oil and gas sector. Moreover, snarls in global supply chain operations have contributed to shortages of many of the items Canadians use. As a result, shoppers have felt the pinch at the supermarket and the gas station. However, “shelter prices,” which do include mortgage interest payments, are included in the “basket of goods.” Based on this the CPI is calculated. Mortgage interest rates increased by 14.5% in November. Thus contributing to a 7.2% annual increase in this metric. The 11.4% gain in October was the highest monthly increase since February 1983. As a result of these factors, the Bank of Canada reported inflation of 6.8% in November, which is much higher than the target range of 2%. The Overnight Lending Rate is raised by the central bank if inflation rises over the target level. Variable mortgage rates and other variable-based lending products, such as home equity lines of credit, are directly affected by this. Bank of canada increases the rate A rise in interest rates has the effect of discouraging expenditure by both households and businesses. This in turn reduces overall inflation. Since March of last year, the Bank of Canada has increased its rate seven times, from 0.25% to its current level of 4.25%. It’s the quickest rate of increase recorded since the mid-1990s and the highest level at which this trend-setting rate has been since December 2007. The best five-year variable mortgage rate today is 5.35%, up from a record low of 0.85% in January of last year. The direction of the Bank of Canada’s monetary policy has an indirect effect on fixed mortgage rates. This is because of how the bond market reacts to it. For example, bond yields have been steadily rising throughout 2022. This has pushed the best five-year fixed mortgage rates up into the 4.5% range from the 2.34% range in January. After reaching a 40-year high of 8.1% in June, inflation has dropped thanks to the Bank’s proactive approach to rates. However, the progress has been sluggish. The prospect of a rate cut remains further off as long as economic data keeps surprising to the upside. Conclusion If the Bank of Canada were to raise interest rates by another 0.25 percentage points by the month’s conclusion, the national borrowing rate would reach 4.5 percent. Borrowers should prepare their finances for the highest rates in 16 years. As this will be the most expensive time to borrow since July 2007. Five-year insured variable rates are now at 4%, but should rates rise again. The borrowers may expect to see those rates rise to the 5.6-6.7% area. Connecting with a mortgage broker who can clarify your alternatives and provide individualised guidance is essential. 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 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

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