Gov. of Canada wil no longer back 0% down or 40 year mortgages!

Here is an article which was posted in the Globe and Mail. As of October 15th 2008 CMHC will no longer offer the 0% down or 40 year amortization programs. This is very unfortunate as both of these programs are very popular, especially among first time buyers. It sounds like CMHC is also going to increase their standards for documentation and credit scores. I will keep you posted as more becomes known about these changes. If you know of anyone that plans on using either of these programs in order to qualify for a mortgage, please pass this message along to them as they will need to buy before the fall in order to utilize these great programs. If you have any questions about these changes, please phone/email me!Globe and Mail Update, Reuters July 9, 2008 at 4:36 PM EDT OTTAWA — The federal government says it will no longer guarantee 40-year mortgages, one of a handful of measures aimed at guarding against a U.S.-style housing bubble.The Finance Department said Wednesday in a news release that the government will guarantee no mortgages with durations longer than 35 years. The government also will demand a minimum down payment equal to 5 per cent of the value of the home."Today's announcement marks a responsible and measured approach by the government to ensure Canada's housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada," the Finance Department said.The government hastened to emphasize that Canada's housing and mortgage markets were performing much better than in the United States.Canadian housing prices are in line with economic factors such as low interest rates, rising incomes and a growing population and the demand for residential housing remains buoyant at more than 200,000 housing starts a year, it said.The percentage of bank mortgages in arrears is also stable at 0.27 per cent, the lowest levels experienced since 1990 and well below the highs of 0.65 per cent in 1992 and 1997. "The historically prudent and cautious approach taken by Canadian financial institutions to mortgage lending, combined with a sound supervisory regime, has allowed Canada to maintain strong and secure housing and mortgage markets," it said.It nonetheless noted "accelerated financial innovation" in the mortgage markets since the fall of 2006, for example, allowing loans up to 100 per cent of the value of the house and increasing amortization periods to 40 years from 25 years.The government will now require a consistent credit score for mortgages it backs, and a minimum level of loan documentation standards to ensure evidence of the reasonableness of property values and the borrowers' income. In addition, government guarantees will not be allowed for high-ratio mortgages where amortization is not required in the first few years – e.g., mortgages that begin with interest-only payments.Finally, it will set a maximum of 45 per cent on a borrower's debt-service ratio – the proportion of gross income that is spent on debt service and housing-related fixed or essential payments.

Grants for Secondary Suites in the City of Edmonton

Secondary Suites
Grants are available, through the City of Edmonton, to homeowners wanting to build secondary suites or upgrade existing suites in their home. Homeowners can apply for a Capital Grant from the City of Edmonton to assist with the development of a secondary suite or to upgrade an already existing suite in their home.
For more information about grants available to homeowners or the criteria to qualify, visit the City of Edmonton’s web site, click on the Secondary Suite link on the left side of the screen to learn more about the program and the grants available.

Buyer‘s Market, Sellers Market, Stabilization How do you make sense of it all? How does one get their home sold for top dollar in any market place?

Traditional approaches would have real estate professional doing a comparative market analysis (CMA) of your home by comparing its features to other similar homes and setting a price that seems comparable. This approach on its own does not usually work (it is only the first step in the equation). The second step would be to pin point the sellers motivation. The third step would be to price the home right in the current economy which has an ever-changing market place. If you are selling your home it is crucial to Price your home according to the number of buyers and sellers entering the market place. The Property Fusion Team looks very carefully at the absorption rate within the market place when working with a seller to market their home.
The use of Absorption Rate Pricing will help get the best possible price for your home in any given market place. Absorption Rate Pricing is simply the mathematical relationship between Supply and Demand.

A normal or balanced market place will exist when the Absorption Rate is at 5-6 months.
A sellers market will exist when the Absorption Rate is between 0-5 Months.
A buyers market will exist when the Absorption Rate is at 7 + Months.

Today’s market place within the Edmonton Region is at an absorption rate of 6.78 months Based on the number of sales in June 2008 and the Current active listings.

In June 2008 the Realtors Association of Edmonton recorded
493 Residential Condo Sales
10 Vacant Lot Sales
1316 Residential Sales (Non Condo)
211 Rural Sales
33 Mobile Sales
For a Grand Total of 2063 Sales (Calgary Recorded 2491 Sales)

As of July 12, 2008 the Realtors Association of Edmonton has 14,307 active listings in all categories*. (*Non Commercial) (Calgary has 14,317).

June 2008 saw 2387 residential properties expire from the Edmonton Market, and Calgary's Market had 2301 residential properties expire.

If you are thinking of selling your home or have suffered an expiry and would like a demonstration on how using Absorption Rate Pricing can get your home SOLD quickly and for top dollar in any market place please contact us at sell@propertyfusion.ca or give us a call at 780-702-9999.

Gov. of Canada wil no longer back 0% down or 40 year mortgages!

Here is an article which was posted in the Globe and Mail yesterday. As of October 15th 2008 CMHC will no longer offer the 0% down or 40 year amortization programs. This is very unfortunate as both of these programs are very popular, especially among first time buyers. It sounds like CMHC is also going to increase their standards for documentation and credit scores. I will keep you posted as more becomes known about these changes. If you know of anyone that plans on using either of these programs in order to qualify for a mortgage, please pass this message along to them as they will need to buy before the fall in order to utilize these great programs. If you have any questions about these changes, please phone/email me!Globe and Mail Update, Reuters July 9, 2008 at 4:36 PM EDT OTTAWA — The federal government says it will no longer guarantee 40-year mortgages, one of a handful of measures aimed at guarding against a U.S.-style housing bubble.The Finance Department said Wednesday in a news release that the government will guarantee no mortgages with durations longer than 35 years. The government also will demand a minimum down payment equal to 5 per cent of the value of the home."Today's announcement marks a responsible and measured approach by the government to ensure Canada's housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada," the Finance Department said.The government hastened to emphasize that Canada's housing and mortgage markets were performing much better than in the United States.Canadian housing prices are in line with economic factors such as low interest rates, rising incomes and a growing population and the demand for residential housing remains buoyant at more than 200,000 housing starts a year, it said.The percentage of bank mortgages in arrears is also stable at 0.27 per cent, the lowest levels experienced since 1990 and well below the highs of 0.65 per cent in 1992 and 1997. "The historically prudent and cautious approach taken by Canadian financial institutions to mortgage lending, combined with a sound supervisory regime, has allowed Canada to maintain strong and secure housing and mortgage markets," it said.It nonetheless noted "accelerated financial innovation" in the mortgage markets since the fall of 2006, for example, allowing loans up to 100 per cent of the value of the house and increasing amortization periods to 40 years from 25 years.The government will now require a consistent credit score for mortgages it backs, and a minimum level of loan documentation standards to ensure evidence of the reasonableness of property values and the borrowers' income. In addition, government guarantees will not be allowed for high-ratio mortgages where amortization is not required in the first few years – e.g., mortgages that begin with interest-only payments.Finally, it will set a maximum of 45 per cent on a borrower's debt-service ratio – the proportion of gross income that is spent on debt service and housing-related fixed or essential payments.

Article Provided by:
Natalie Wellings, Mortgage Associate
River City Financial Services
12650-151 Avenue, Edmonton, AB T5X 0A1
Phone:1-780-722-6287Fax: 1-866-322-0592
Email: natalie@youredmontonmortgage.com
Website: www.youredmontonmortgage.com