CMHC - How much needed for Down Payments when Buying a Home or Investment in Canada?

Buying a Home using CMHC? What is that and what are requirements?

What is CMHC Mortgage Loan Insurance?

Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment.

To obtain mortgage loan insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.

Important Note: Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.

What are the General Requirements to Qualify for Homeowner Mortgage Loan Insurance?

• The home is located in Canada.
• For CMHC-insured mortgage loans, the maximum purchase price or as-improved property value must be below $1,000,000, when the loan-to-value ratio is greater than 80%.
• You will typically have a down payment of at least 5% of the purchase price of the dwelling, depending on the dwelling type.
  • Single-family and two-unit dwellings (5% minimum down payment)
  • Three- or four-unit dwellings (10% minimum down payment)
• Normally, the minimum down payment comes from your own resources. However, a gift of a down payment from an immediate relative is acceptable for dwellings of 1 to 4 units. For eligible borrowers, additional sources of down payment, such as lender incentives and borrowed funds, are also permitted. Check with your lender for qualifying criteria and availability.
• Your total monthly housing costs, including Principal, Interest, property Taxes, Heating (P.I.T.H.), the annual site lease in the case of leasehold tenure and 50% of applicable condominium fees, shouldn’t represent more than 32% of your gross household income (Gross Debt Service (GDS) ratio). Use the GDS form to calculate how much you can afford in housing costs to be eligible.
• Your total debt load shouldn’t be more than 40% of your gross household income. The Total Debt Service (TDS) ratio is your P.I.T.H. + the annual site lease in the case of leasehold tenure and 50% of condominium fees (if applicable) + payments on all other debt / gross annual household income. Add up your costs and determine your Total Debt Service ratio using the TDS form.
• You also need to think about closing costs (for example, legal and land transfer fees) equivalent to 1.5% to 4% of the purchase price. Many first-time buyers are surprised by these costs. That is why, when qualifying for CMHC’s Mortgage Loan Insurance, our Home Purchase Cost Estimate worksheet form will help you calculate your total homebuying costs.
  
  Closing costs include but are not limited to one-time items such as lawyer fees, GST and PST as applicable, land transfer tax if applicable, adjustments, etc., to allow you to complete the house purchase.
• Other requirements may apply and are subject to change. For details, contact your Bank/Mortgage lender or mortgage broker.

About CMHC

Canada Mortgage and Housing Corporation (CMHC) is Canada’s national housing agency. Established as a government-owned corporation in 1946 to address Canada’s post-war housing shortage, the agency has grown into a major national institution. CMHC is Canada’s premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research.

The Vacation Home Makes a Comeback - RIS MEDIA ARTICLE

Honoured to have been asked to share my "expertise" and quoted in this article for RIS MEDIA - A US leader in Real Estate Information available in print and online:

As the market continues to shift, one industry trend seems to be making continuous waves: vacation homes.
With low prices and mortgage rates still available in most parts of the country, affluent buyers—or those who have always dreamed of a cabin on a lake—are making their move and purchasing second homes in exotic locations to be used as vacation getaways.
According to the National Association of REALTORS® (NAR), sales of investment and vacation homes jumped in 2011, with the combined marketshare rising to the highest level since 2005.
NAR’s 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, showed vacation-home sales rose 7 percent to 502,000.
It’s easy to understand why the vacation home market would be on the rebound; not only is the overall real estate atmosphere brightening, but U.S. travel expenditures are picking up, too. In 2011, we saw an 8.8 percent rise in travel expenditures, and according to the October 2012 Traveler Sentiment Index™, traveler sentiment neared pre-recession levels, within 0.7 points of the October 2007 pre-recession high of 91.1.
People are getting away again, and as the economy stabilizes, many are looking for a standing vacation spot. But what does this rebounding market look like, and what does it mean for you as a real estate professional? Let’s take a look at the numbers, according to the 2012 NAR survey:

• • In 2011, 42 percent of vacation-home buyers paid in cash, and 39 percent purchased distressed properties.

• • Vacation-home sales accounted for 11 percent of all transactions in 2011, up from 10 percent in 2010.

• • The typical vacation-home buyer was 50 years old, with a median household income of $88,600.

• • Purchased vacation homes were located a median of 305 miles from the buyer’s primary residence. Thirty-five percent of vacation homes were within 100 miles, and 37 percent were more than 500 miles.

• • Typical buyers plan to own their recreational property for a median of 10 years.

“There are lots of investors buying rental properties and second homes right now,” says Goran Forss, a broker in Temecula, Calif., whose company has had a consistently strong base of investors over the past several years—approximately one-third of all buyers—and has copious amounts of vacation rentals. In Forss’ market, a myriad of investors keeps the inventory scant.
Aside from a location that will allow them to enjoy their new home to the fullest, Forss notes that buyers are interested in maximizing their return on investment.
NAR’s survey showed that 91 percent of vacation-home buyers planned to rent their new home out within the next 12 months for at least part of the season.
Of this 91 percent, 40 percent plan to rent the home between one and eight weeks of the year, possibly to make a little extra money during the time they won’t be using the property. Thirty-two percent plan to rent their properties between nine and 26 weeks per year, and 27 percent plan to rent their homes between 27 and 52 weeks per year.
“Those (vacation properties) have become more and more popular for the savvy investor and stay booked year round due to our moderate temperature and abundance of sunny days,” explains Forss.
U.S. vacation home seekers aren’t solely staying within the country, either. The trend seems to be percolating worldwide. Shannon P. Murree, a real estate professional in Barrie, Canada, says she has seen an increase in U.S buyers looking for additional properties in her market as confidence in the economy grows.
“People are looking at (vacation homes) for their own use, and renting them out weekly during the times they won’t be using them, as well,” says Murree, who notes that she has seen an increase in this trend as of late.
When working with buyers looking for a vacation home, it’s important to understand that lending is different for non-primary properties. Get to know this financial arena so that you can help your clients as efficiently as possible. Lenders are stricter with vacation home mortgages than those for traditional homes, so your buyers must have immaculate credit—often 720 or greater—and be up-to-date with their primary mortgage.
Additionally, many lenders have been giving out “jumbo” mortgages for vacation and investment properties. Unfortunately, new mortgage guidelines put out by the Consumer Financial Protection Bureau will go into effect in 2014 and may put an end to these popular loans.
If you’re interested in working with vacation buyers, you should start by getting to know the niche market. According to Forss, the best way to do this could be to consider investing yourself. “The most successful agents working with investors are investors themselves,” says Forss, who owns nine rentals along with his wife and business partner, Lisa. “It’s very easy then to connect with the investors, as we know all the insights and best practices of handling investment properties.”

#Barrie Bounday Delays

Barrie ward changes sent to committee

Don't get too excited about having new ward boundaries for next year's Barrie election.

This matter was sent to the city's finance and corporate services committee Monday, when councillors decided simply putting off the changes until after the 2014 vote wouldn't do.

"I'm not in favour of kicking things to the next people (council)," said Coun. Arif Khan. "I think we have a responsibility to work on this."

"There are wide discrepancies in the (ward) populations and it will be more by 2018," said Coun. Barry Ward. "We owe it to the citizens of Barrie to take another look."

The new ward boundaries are to better reflect Barrie's growing population, where it is and how it's represented on council.

But Coun. Peter Silveira's motion to delay boundary changes lost 6-5, with Mayor Jeff Lehman casting the deciding vote.

"The issue is the timing," said Lehman about changing boundaries. "There is no question we are out of balance today. It is quite severe.

"We do owe it to our residents to work on this a little."

Dr. Robert Williams of Waterloo University has done a dozen ward boundary reviews for municipalities, and produced a report on Barrie's boundaries with Watson and Associates Economists.

He said there's no doubt population inequities exit.

“It's unbalanced now and it is not going to fix itself in the short term,” Williams said. “You don't want to change boundaries every time, every election. .

“But it's not an exact science. It's fixing some problems and minimizing the problems that may arise from that.”

But other than sending the matter to committee, there was little agreement among councillors Monday.

Coun. Bonnie Ainsworth said the report fails her constituents because Ward 1 will continue to have thousands more residents than some other city wards, but just one councillor.

“I work full-time (as a Barrie councillor),” she said. “The next one might not be able to do that.

“I think we can dig deeper and get some more information and actually justify moving the lines (boundaries).”

Coun. Lynn Strachan also said there is work to do.

“People aren't overly concerned about what number their ward is, but when they call someone (their councillor responds),” she said. “We started this process two years ago. This is the time to send it to committee and work out the minor adjustments.”

But Coun. Doug Shipley said new ward boundaries are premature until plans are in place for the former Innisfil land.

"Why rush something through?" he asked. "(For the 2018 election) the secondary plans will be done by then."

Coun. John Brassard said ward boundary changes should be delayed for another reason.

"I don't think the growth is going to happen as quickly as we think it's going to happen," he said.

Coun. Michael Prowse said the new boundaries would not solve a fundamental difficulty - that two-thirds of Barrie's population could one day live in the south end, the other third in the north.

"None of the solutions solve the inequity," he said. "I'm just not seeing the benefit (of the changes). It's so premature."

Coun. Brian Jackson said the city has to start somewhere, however.

"There is no solution to ward boundaries," he said. "You cannot make it happen. If you get it to 5% or 10%, you are doing very well."

"We have to look at what this issue is doing to the population and what effect it will have on councillors," said Coun. Alex Nuttall. "If it's not exactly right, let's make changes."

Prowse, chairman of the finance and corporate services committee, said it will be dealt with at its June meeting and could be back to Barrie councillors later next month or in August.

But there is a time line.

City staff have recommended changes to the ward boundaries; they would need to be in place for the 2014 municipal vote – which will elect the next mayor, council members and school board trustees. But they would need approval by year's end.

The new boundaries could be in place for the 2014 and 2018 elections, then reviewed before the 2022 vote.

Changes being recommended by staff would see Wards 1, 2 and 3 remain unchanged in land size; Ward 4 would grow, as would Ward 5, while Ward 6 would shrink significantly. Ward 7 would grow a little, as would Ward 8, while Wards 9 and 10 would become a little smaller.

Barrie's ward boundaries were last reviewed in 2002 and changed for the municipal election the next year.

The Barrie-Innisfil Boundary Adjustment Act, 2009 resulted in the city absorbing portions of Innisfil; this land – and its voters - was added to Wards 7, 8, 9 and 10 for the 2010 municipal election.

The city held public consultation sessions about new ward boundaries in April. Attendance was light and relatively few public comments were submitted.

Silveira said that's one reason any ward boundary changes should be delayed, that there hasn't been adequate public consultation.

But Williams rebuffed that position.

“Public input was sought. If the public chooses not to attend, we have to work with what we got,” he said. “It's not a topic that people get very excited about. It's like a fan club for (baseball) umpires.”

The ward boundary review had six guiding principles – including representation by population, meaning every councillor would represent an equal number of constituents.

The review also took into account population and electoral trends, such as increases and decreases in the population until 2018.

It also looked at arranging ward boundaries by primary and secondary road patterns, railway and public transit access, telephone exchanges and servicing capabilities.

Geographical and topographical features were also considered, as were settlement patterns, traditional neighbourhoods and community groupings – social, historic, economic, religious and political diversities.

Source: The Barrie Examiner

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The rental-housing shortage is now a national disaster. It needs Ottawa’s help

What would a Canadian rental-housing disaster look like?

Would it look like 42 per cent of young adults between 20 and 29 living with their parents, up 10 per cent from the early 1990s?

Would it look like 156,358 people waiting for affordable housing in Ontario? Or Vancouver seniors on $1,200 monthly pensions trying to afford that city’s average one-bedroom rent of $982?

While the effect of home ownership on the economy is watched with X-ray vision, the rental market is pretty much ignored. This despite the fact that a full third of Canadians are renters, many of them students and newcomers whose journey to stability is made difficult by crowded living situations and constant moving.

Those who follow the rental market daily don’t hesitate to call the situation disastrous. Vacancy rates are dismal across the country. Only 10 per cent of the shiny new buildings that have gone up during the past decade’s housing boom were built expressly to house renters. Many older rental buildings have been demolished in favour of condominiums, while those that still stand have often been left to crumble.

Arguing that housing is a human right doesn’t get much traction with the federal government. Neither, it seems, do economic facts, like the usefulness of a mobile labour force not tied down by mortgages and heavy household debt. Also pointless is linking traffic congestion to the inability of workers to find housing they can afford close to their jobs. “The incremental nature of the problem is what stops us from seeing it as a crisis,” says Steve Pomeroy, a senior research fellow at the University of Ottawa Centre on Governance.

Domestic life is largely invisible. I know that families are squished into tiny, cockroach-infested old buildings, but I don’t have to deal with the broken elevators. My friends’ Facebook posts seeking an okay space in an okay neighbourhood for an okay price are sometimes desperate, but they’re my latte-drinking peers, not a vulnerable population suffering through a disaster.

Renters are a big but disparate group: their main commonalities are having a landlord, and not having much political clout. It’s hard to weave their bitsy-piecey stories into a big picture with larger political implications, and harder to see those bits and pieces as a disaster.

That’s not to say nothing is being done at all. In April, Manitoba’s new budget introduced an eight per cent tax credit on construction costs, with a goal of producing 1,000 affordable and social housing units. To qualify, builders must ensure that at least 10 per cent of units in a new development are ‘affordable’ – the Canada Mortgage and Housing Corporation considers this no more than 30 per cent of gross income, and the Manitoba government is setting an upper limit of $748 for a Winnipeg one-bedroom, including utilities.

In 2011, Regina instituted a bold five-year, 100 per cent tax exemption for new rental developments. Since 2007, any builder wanting to demolish rental housing in Toronto must include the same number of rental units in a new project, contributing to a slower rate of rental erosion than in Calgary.

These initiatives are well-meaning and they may have success, but without broad, federal action, they’re merely stop-gaps. This is a country-wide problem that goes back decades: purpose-built rental housing delivers a measly return to investors, and tiny tax breaks don’t shield landlords from ever-shifting rules and laws. This impasse isn’t for lack of ideas, since everyone from builders to academics to actual renters have ideas about tax incentives, the best use of capital cost allowances and inclusionary zoning. There just isn’t any interest at the national level at finding a solution.

Maybe the enduring inaction is because it’s hard to pinpoint exactly when warning signs become an actual crisis – like a blackout in Lower Manhattan from a long-predicted hurricane, or 1,000 workers dead under a building that was noticeably cracked.

It seems that we won’t act on Canada’s rental disaster until it’s really ugly, and in our faces. Thirtysomethings who hate their roommates or seniors eating canned food in basement apartments just don’t make a dramatic enough story.

Guest Blog: Denise Balkissoon is a Toronto writer and co-editor of The Ethnic Aisle, a blog about ethnic and cultural pluralism in the Greater Toronto Area.

More Jobs! Tanger Outlet & RioCan Real Estate Investment Trust - Expansion Of Tanger Outlets Cookstown

Tanger Outlet Centers hosted a ground breaking ceremony at the Cookstown Outlet mall where a 60 million dollar reno-expansion is underway. This expansion of the mall at hwy 400 and & 89 is expected to generate 125 construction jobs, 400 full and part-time retail jobs and an estimated $16 million dollars in annual sales tax for the region.

Official Press Release below:

This upscale outlet centre is located approximately 50 kms north of the Greater Toronto area directly off Highway 400 at Highway 89, the gateway to the highest concentration of vacation homes in Southern Ontario's "cottage country". The region and highway is a well-traveled vacation area year-round where Toronto residents enjoy skiing in the winter in nearby Collingwood and lakeside activities in the summer. A thriving neighbouring community to the city of Toronto , Cookstown shares the economic benefits of being in proximity to Toronto's economic engine generated by its over 7 million residents and its 16 million annual tourists. It is further supported by the affluent cities of Barrie and Newmarket.

Tanger Outlets Cookstown is currently 156,000 square feet. We expect the approximately 152,500 square foot expansion will include over 35 leading brand name and outlet stores including: Calvin Klein , American Eagle Outfitters, Gap Outlet, Banana Republic Factory Store, Nike Factory Store, Tommy Hilfiger , Aeropostale and many more.

The projected total cost of this expansion represents an estimated $60 million dollar investment in Cookstown. The expansion will have a positive economic impact for the area by creating an estimated 125 jobs during construction and approximately 400 full and part-time retail jobs upon completion. Once complete, we expect the expanded centre will create an estimated $16 million dollars in annual sales tax.

"We are very happy to begin construction on the expansion of Tanger Outlets Cookstown and increase the number of brand name and designer outlet stores available to shoppers in the area," said Steven B. Tanger, President and Chief Executive Officer of Tanger Factory Outlet Centers, Inc. "We will continue to focus on making Tanger Outlets Cookstown a destination for stylish savings on merchandise from our shoppers' favorite designer and brand name stores, offering on trend, in-season, value priced merchandise direct from the manufacturer at 30 to 70 percent off retail prices."

"The expansion of Tanger Outlets Cookstown is the next evolution for the property designed to grow this established outlet centre into an even larger shopping destination," said Edward Sonshine, CEO of RioCan. "The development will be an excellent opportunity to deepen our co-ownership portfolio with Tanger Outlet Centers and build upon RioCan's growing enclosed mall and outlet centre portfolio."

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $14.4 billion as of March 31, 2013 . It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 344 retail properties containing more than 84 million square feet, including 50 grocery anchored and new format retail centres containing 13.7 million square feet in the United States through various joint venture arrangements as at March 31, 2013 . RioCan's portfolio also includes 11 properties under development in Canada . For further information, please refer to RioCan's website at www.riocan.com.

About Tanger Factory Outlet Centers, Inc.: Tanger Factory Outlet Centers, Inc. is a publicly-traded REIT headquartered in Greensboro , North Carolina that operates and owns, or has an ownership interest in, a portfolio of 43 upscale outlet shopping centres in 26 states coast to coast and in Canada , totaling approximately 12.9 million square feet leased to over 2,700 stores operated by more than 460 different brand name companies. More than 175 million shoppers visit Tanger Factory Outlet Centers annually. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the company's web site atwww.tangeroutlet.com.

Forward-Looking Information

This News Release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements regarding RioCan's and Tanger's intention to expand Tanger Outlets Cookstown, the cost and size of the project, the impact on the local area in terms of jobs and sales taxes generated, the impact on customers' shopping experience and other statements concerning each company's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements. These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on each company's current estimates and assumptions, which are subject to risks and uncertainties.

Update - what's happening in Barrie, Ontario? Great short video!

All the more reason to live, work, play and INVEST in Barrie!

Included as part of Mayor Jeff Lehman's Business Progress Breakfast , here's a great short video highlighting how much is happening in our city today!

Progress and moving forward!

Investing in Barrie.com - Investing in Barrie is investing in YOU!