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You have been laid off. How can your mortgage lender help?

You have been laid off. How can your mortgage lender help?

You have paid your mortgage without a late payment or missed payment since you moved into your home. Suddenly you are out of work. What can you do?

There are a variety of options available:

  • You can sell the house and avoid foreclosure
  • You can contact your mortgage lender and discuss the options below
  • You can stop making payments. Not recommended as it will destroy your credit and your ability to buy another home for many years to come.

Lets discuss contacting your lender as this is the least painful option. You can reach out to talk to your lender and see if they have a program that will allow you to miss a payment or two. The lender simply tacks these payments on to the end of the mortgage and extends your term.

Unfortunately most lenders don’t have this option available. It never hurts to ask. There is another option that the lenders will advise you of. If the mortgage was originally insured through CMHC or Genworth Financial both of them have programs available to help.

The programs can change from time to time so it is best to go to their websites and investigate the programs offered. At the time of this post the following links were working. If they are not now, simply go to the main website and search the programs out.

CMHC: contact Yazmine Boswell Default Manager 1-416-218-3384

Genworth Financial: 1-800-511-8888

This is a difficult time in a families life but you do have the ability to get help. The most important point is to contact your mortgage lender and talk about your options. They should point you in the same direction as this post.

Is Calgary the next property hot spot for foreign buyers?

Is Calgary the next   property hot spot for foreign buyers?

From afar, Alberta real estate might soon look like a good buy Photo by: CANADIAN PRESS

A few years ago, a real estate developer tapped Buss Marketing in Calgary to drum up interest in a high-rise building in that city, especially from foreign investors. The real estate marketing and sales company courted brokers from Toronto and Vancouver that maintained connections to overseas buyers, and even hired an Asian real estate agent with a strong offshore network and sent him to Hong Kong for four months to prospect for buyers. “All these efforts were to no avail,” recalls company president Calvin Buss. The answer from foreign investors was uniformly the same: Calgary’s great, but we’ll stick to Vancouver and Toronto.

Alberta’s fortunes, and Calgary’s in particular, could soon change. Or at least that’s what the real estate industry is hoping, now that non-residents who buy homes in Vancouver and Toronto face a 15 per cent tax. “I do think that foreign investors who want to invest in Canada will shift to Calgary, lured by the most attractive returns in the country,” Buss says. Alberta is still crawling its way back to economic health after a steep downturn, and as a result, property prices are cheap compared to other regions. And unlike in Toronto and Vancouver, where foreign investment is viewed by some as a malevolent force driving up home prices, the market in the province is still shaky and a few more offshore buyers could be beneficial. “They’d actually be welcomed here in Alberta,” says Todd Hirsch, chief economist at ATB Financial.

An oil price crash and an unemployment rate that spiked to nine per cent last year did not cause the residential real estate market to crater, as some feared. Sales in Calgary and Edmonton dropped, and prices are generally soft. Year-over-year, the Teranet-National Bank House Price Index shows Calgary is up one per cent, while Edmonton has fallen 2.8 per cent. The market has been held aloft in part by hefty severance packages granted to laid off oilsands workers, allowing them to keep paying their mortgages.

Still, the market isn’t entirely in the clear: severance packages run out, and oil and gas firms are not expected to hire in waves any time soon. “A lot of those displaced oil workers, especially the professionals that were working in the shiny Calgary office towers—those jobs are not coming back,” Hirsch says. “Those professionals may find opportunities in other sectors. They just won’t be paid as much.”

In this context, foreign investment could help shore up the real estate sector. “Our market needs support from foreign money,” says Hong Wang, a real estate agent in Calgary. There are a few reason why it could happen. Vancouver’s offshore buyer tax, implemented last summer, shows how fluid foreign investment can be. Toronto’s housing market shot into the stratosphere over the ensuing months, prompting the Ontario government to put in place a nearly identical measure (city council in Victoria, concerned about an affordability crisis, debated but ultimately rejected a foreign buyer tax recently).

Perhaps the most appealing aspect of the province is that prices are cheap compared to Toronto and Vancouver. According to one study, $300,000 will buy you 926 square feet in Calgary and 1,176 square feet of property in Edmonton—but only 520 and 339 square-feet in Toronto and Vancouver, respectively. Foreign investors tend to deal in U.S. currency, and the low Canadian dollar makes that cash stretch even further. “For the investors who don’t have as much money, they’ll probably come and look at Calgary as an alternative,” says local real estate agent Kirby Cox. Commercial real estate in particular represents a bargain, he contends. “If you can buy a building that was 25 per cent more expensive three years ago and the dollar is also down, that’s a windfall situation if you’re willing to hold on to it.”

Following Vancouver’s tax,, an online platform for international property buyers in China, published a blog post stumping for Calgary. Juwai claimed a new direct flight offered by Hainan Airlines between the city and Beijing will bring “an influx of Chinese visitors in the future” and that many could “purchase a home there should they fall in love with Calgary.” The company’s search data, however, show interest in Calgary has been flat, while the number of inquiries for Edmonton is up 50 per cent in the first quarter compared to the year before.

Online searches don’t always translate into sales, of course, and some in the real estate are skeptical foreign buyers will turn up in a big way. Brad Henderson, CEO of Sotheby’s International Realty Canada, says foreign buyers who are purely financially motivated are likely to consider Alberta—but that’s a small portion of an already small portion of demand, by his estimation. “Some of them are investing to get their money outside of conflict areas, and some of them may in fact want to immigrate here,” he says.

“Education” is the most commonly cited reason by prospective Chinese property buyers who are considering purchasing in Toronto, Vancouver and Montreal, according to a March study put out by Sotheby’s and Juwai. But only 8.8 per cent of prospective homebuyers pointed to education as a factor when considering Calgary, compared to 20.6 per cent who cited investment.

Condo developers aren’t overly optimistic about a flood of offshore money, either. “Most [purchasers] are returning to Vancouver as the market is hot even with the foreign buyer tax,” according to Parham Mahboubi, vice-president of planning and marketing at Qualex-Landmark, a real estate development group in Vancouver. Qualex-Landmark is currently developing Park Point, a luxury condo building in Calgary scheduled for completion next year. The website for Park Point features a Chinese-language option, though the company says it’s not actively targeting foreign Chinese buyers. Instead, the site is for the local Chinese community in Calgary “who share much of the same meticulous real estate investment savvy as their overseas counterparts.”

Even if prices are cheap, neither Calgary nor Edmonton is as well-known internationally as Vancouver and Toronto. “We’re leagues behind,” Hirsch says. And that means Alberta could remain overshadowed by those cities, despite the foreign buyer tax. That’s a dispiriting thought for those in the industry locally—not to mention buyers in Toronto and Vancouver who feel they’ve been priced out by the international moneyed elite. Wang, for one, wants to see the municipal government do more to raise Calgary’s profile with foreign investors. “There is a discussion about whether or not Calgary should apply to host another Winter Olympics. Why is this even a question?” she says. “Anything that can put us on the map is great.”

Mortgage Rule Change

The government of Canada has implemented more rule changes to mess with the already slow mortgage and real estate market. Below are the highlights of the changes.

  1. On Oct 17,2016 all insured mortgages must now qualify based on the Bank of Canada benchmark rate (currently 4.64%). The old rule allowed for qualifying at the contract rate on a 5 year fixed term.
  2. Portfolio (‘bulk’) insurance must now meet the same criteria as those that are high ratio insured. This change is scheduled to come into effect on November 30. This means that amortizations greater than 25 years, rental and investment properties and homes with values greater than $1M can no longer be portfolio-insured.
  3. Capital gains exemptions on principal residences will apply only to residents of Canada.
  4. In addition, there is further discussion about ‘sharing in risk’ that is currently borne in large part by the three mortgage insurers. While high ratio customers and portfolio insurance funders pay for this risk, there is discussion about sharing in the cost of losses beyond just the mortgage insurers. This in and of itself could have significant implications. We will continue to monitor any discussion around this as well.



New down payment rules take effect February 15 2016


The Minister of Finance will implement the new down payment rules on February 15, 2016. They will affect anyone buying a home over $500,000.

If you buy a new home over $500,000 you will be required to put down 10% on purchase value over the $500,000 price point.

For example:

If you buy a home $499,999 or less you are still allowed to put down 5% or $24,999.95 to use this $499,999.00 purchase price example.

If you bought a home for say $600,000 you would have to pay 5% on the first $500,000 or $25,000 and then 10% on the remaining $100,000 or $10,000 which would bring you to the total price of $600,000. This means your total down payment on a $600,000 home would be $35,000 instead of the normal 5% which would have been $30,000. It seems a little complicated but really its not too hard to calculate.

These rules were put in place to help maintain a healthy and stable housing market in Canada. In most of Canada a first time home buyer would be buying at less then $500,000 so this will have little effect on First Time Home Buyers. In areas such as Toronto, Vancouver and Calgary the average single detached home is priced over the $500,000 mark, well maybe not Calgary quite yet, but we are close.

These markets will have a few issues with buyers wanting to get a foothold in the real estate market. My best guess is they may start in the condo market and then allow some equity build up and then move to the single detached home. Not such a bad idea for these growing metropolises.

In some case those buyers may visit the bank of Mom and Dad to get a little extra down payment. They may also decide to wait until they have saved the additional down payment.

From a mortgage brokers standpoint, I believe this was a good move. I am not happy with the timing due to all the recent rule changes, but it is prudent. My only hope is that the government will hold off on any further rule changes. Hopefully they can focus on getting some new infrastructure projects up and running putting some folks back to work.

Federal Government Increases down payment rules

Federal government increases minimum down payment for homes over $500,000

Terry Pedwell, The Canadian Press 

Federal government increases minimum down payment for homes over $500,000
Minister of Finance Bill Morneau makes an announcement in foyer of the House of Commons on Parliament Hill in Ottawa on Friday, December 11, 2015. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA – Canadians looking to buy homes valued over $500,000 will soon be required to come up with larger down payments in a move the federal finance minister says is designed to ensure stability in Canada’s biggest real estate markets.

Market watchers and home sellers predict the move — in concert with other regulatory changes — will have little impact on house sales and prices that continue to rise despite a fragile overall economy.

“Rather than a blunt instrument to cool the market, this is a targeted measure designed to deter a very small segment of buyers from stretching into the market with a very low equity position,” said Robert Kavcic, senior economist at BMO Capital Markets.

Under changes announced Friday by Finance Minister Bill Morneau, homebuyers will have to put a 10 per cent down payment on the portion of the price of a home over $500,000.

Anything under $500,000 will still only require a five-per-cent down payment. The changes are to take effect Feb. 15, 2016.

“This will impact one per cent or less of the market,” Morneau told a news conference.

For buyers in Toronto, where the cost of an average home has reached $625,000, the change will mean they’ll have to come up with an extra $12,000 in order to qualify for mortgage insurance through the Canada Mortgage and Housing Corporation.

The new measure is aimed at expensive homes while still encouraging first-time homebuyers to get into the market, said the minister.

“We recognize that, specifically in the Toronto and Vancouver market, we’ve seen house prices that have been elevated,” Morneau said.

“And we want to make sure that we create an environment that protects the people that are buying homes so they have sufficient equity in their home.”

The stiffer down payment requirement is one of three new measures targeting the stability of the housing market.

Financial institutions will face new capital requirements to keep pace with the growing risk of the real estate markets they bankroll.

And Canada Mortgage and Housing Corp. will change the fees it charges issuers of mortgage-backed securities.

While the intent of the government may be to tame Canada’s real estate market, the market itself has been stabilizing over the past few months and is expected to cool in 2016, making Ottawa’s moves redundant, said Gurinder Sandhu, the Ontario-Atlantic Canada vice president of Re/Max Integra.

“We’re seeing the markets kind of take care of that on their own,” he said.

“So, this type of regulation at this point in time wasn’t really required.

Re/Max predicted this week that price increases in the country’s hottest markets will be muted in the year ahead.

Vancouver prices have increased, on average, by around 17 per cent so far in 2015, according to Re/Max, and by roughly 10 per cent in Toronto.

In 2016, the firm projects housing costs could rise in Vancouver by 7 per cent and by 5 per cent in Toronto while the rest of the country sees low single digit increases.

Even in Calgary, where an oil price shock has cost jobs and rocked the economy, home prices have been resilient, said Sandhu.

The Finance Department has tightened mortgage rules on several occasions in recent years — along with requiring stricter enforcement and management of loans — in an effort to weed out marginal buyers and excessive speculation in the housing market.

One of the changes saw the federal government reduce the maximum amortization period for government-insured mortgages to 25 years from 30 years.

But Friday’s move will likely have less of an impact on the market because those previous changes forced a shift by homebuyers toward making larger down payments and taking on more conventional mortgages, said Derek Burleton, deputy chief economist at TD Economics.

“Hot markets in Ontario and B.C. are being driven by purchasers with larger down payments, whether it be millennials getting help from their parents, move up buyers, and/or domestic or foreign investors,” said Burleton.

Between 2008 and 2012 insured mortgages accounted for roughly 60 per cent of the increase in new mortgages taken out at chartered banks.

That ratio has been flipped in 2015, with conventional, uninsured mortgages now accounting for 60 per cent, according to TD.

Still, the Bank of Canada has expressed concerns that too many Canadians risk becoming over-extended, especially once interest rates begin to rise.

Soaring housing prices spur Canadians toward pint-sized living

Alternative styles of housing, such as this small house in Victoria, is becoming more popular among Canadians. (THE CANADIAN PRESS)

Ms. Fayle had contracted a respiratory disease and was finding it exhausting to take care of her property, which contained a swimming pool and dozens of towering trees.

“I decided I didn’t really want to spend the last third of my life rotely maintaining a huge house,” Ms. Fayle says.

It takes Ms. Fayle a mere two hours to clean her “narrow home” from top to bottom, freeing her up for other activities such as reading, writing and volunteering.

The desire to save time is one of several factors cited by the growing number of Canadians who are turning to alternative styles of housing, ranging from narrow houses to tiny ones to those sandwiched into laneways between other homes.

Other factors include environmental considerations – smaller homes require less power to heat – and affordability concerns, as home prices in certain Canadian cities continue to soar out of reach for many.

In 2006, when a single-family home for half a million dollars was hard to come by in Victoria, Ms. Fayle snatched up her house for $275,000 – a paltry sum for a 1,000-square-foot space located less than three kilometres from the downtown of one the country’s most desirable cities.

Toronto developer Adam Ochshorn says his company, Curated Properties, has found a niche in building homes for families who have been priced out of the market for detached houses but don’t want to migrate out to the suburbs or live in a glass tower.

“We have people coming in and telling us that they have been looking to buy a home downtown for maybe a year or even two, but they keep losing what they want to buy in a bidding war,” Mr. Ochshorn says.

Curated Properties has several projects in the works that preserve elements of the traditional detached house format – multifloor living with an outdoor terrace – but in unconventional spaces and at a lower price point.

One of them, titled Dovercourt 455, consists of a dozen townhomes perched atop a two-storey office complex, each outfitted with two floors of living space and a rooftop terrace. Another is a conversion of an old yarn factory from the late 1800s that’s situated in a laneway between two rows of houses.

Building homes in laneways can be challenging in many Canadian municipalities, due to various zoning restrictions.

Mr. Ochshorn says Toronto doesn’t allow developers to dig up laneways, which are owned by the city, in order to bring water and sewage pipes to the project.

“The only reason that we were really allowed to develop this project into residential housing is because the property we bought included a house that connected us to the street and gave us a street address,” he said.

That allows the company to dig up the portion that sits on private land in order to connect to the grid.

Experts say some of those restrictive policies are likely to loosen as cities such as Toronto and Vancouver – facing a space and affordability crunch – look at ways of adding more unique types of housing.

“There are so many of these lanes in great neighbourhoods that are being underutilized,” Mr. Ochshorn says.

For some people, such as Connor Ferster, alternative living is less about affordability and more about wanting to live off the grid.

In the winter of 2013 to 2014, Mr. Ferster, a former headhunter, ditched his studio apartment in downtown Calgary for a tepee 45 minutes outside the city. The following summer, with the help of family and friends, he built a 96-square foot home on wheels, which he lives in today.

“I wanted to lead a more meaningful life, which meant being more engaged with the daily goings on,” Mr. Ferster says.

“I need to think about where I’m getting my water from. I get to see the process of composting my own waste and having that go back into the earth.”

Of course, the shift to compact living comes with some challenges.

Ottawa-based architect and tiny-home expert Andy Thomson, who himself is sharing a 500 square-foot space with his wife and their 11-year-old child, says the key to getting by in a constrained space is to have “furniture that’s like a Swiss army knife” – such as shelving units and beds that fold into the walls.

Mr. Ferster, meanwhile, doesn’t have a shower in his home, and visitors have to be comfortable using his composting toilet without any privacy.

“It feels very spacious, though, inside,” he says.