Monthly Newsletter April 2020

CoryVance • Apr 10, 2020

As I write this month’s newsletter I hope you and your families are healthy and making the best of the current environment. No blog or announcement would be complete without a sincere THANK YOU and appreciation for all health professionals and first responders who are tasked with one of the most important jobs in keeping those around us healthy. I also wanted to thank those who are now considered Essential Service providers for everything they are doing each day to support us. As we have learned things can change quickly and what we once thought was important may have changed as we all focus on our health and families during this time.

I think we can all try to play a part in some small way as we help each other to make it through. Whether it is helping someone that may find it difficult to get out or even making that call to check-in. Small deeds pay massive dividends. On that note I wanted to let you know, as past clients, that if you have any questions on anything finance or mortgage-related to please reach out. I am always happy to provide any education, advice or insight on financial matters.

For the past two weeks, the top question I am getting is Mortgage Payment Deferrals. Judging by the mass outcry of payment deferral requests, approaching 500,000, I will try to cover here in a few key points:

A payment deferral is NOT a waiving of payment or a free gift from your lender.
Payments deferrals should only be requested if you have been impacted or will be impacted by COVID-19.
There will be additional interest costs in deferring your payments (interest on interest). Your mortgage payment WILL increase at some point to pay back these deferred payments. This payment increase will occur at one of three times: 1) The end of the payment deferral period 2) The end of the mortgage maturity or 3) The end of your mortgage amortization. The longer you wait the bigger the increase in your payment and the more the interest this will cost you. However, NONE of this matters if you do not have the income or funds to make your payment so please take advantage of this option before your payment goes past due.
This WILL NOT impact your credit score as long as you contact your lender and have received the approval to defer your payments. DO NOT just stop making payments for 6 months.
Requests to defer payments will vary from lender to lender but remember they may want to know if you have been impacted by COVID-19.
Some lenders have set up online forms to get further info or make the request to defer payments. This will be better than calling your lender directly. Contact me if you want your specific lender’s info.

Once again, every one situation is different so I would encourage you to reach out to discuss your situation and develop a strategy to get through this period and understand the impact of the deferrals on your mortgage payment.

The next top question is to review the Government of Canada announcements and significant resources to help Canadians which now total more than $100 billion dollars.

Click here for the link with further details:
https://www.canada.ca/en/department-finance/economic-response-plan.html
Within this page, you will find details on the Canada Emergency Response Benefit (CERB). This one will be the one that most should focus on especially Self Employed. The start date to apply for this benefit is currently set on April 6 and will be phased. You should apply to access it through your online CRA account. If you do not have this set up please start NOW because it may take 5-10 business to get a code to get access to the online account.

For Businesses – https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html

For Personal – https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html
Click here for a booklet with further information
https://mcusercontent.com/b19f9062afdbcf2178541b5c1/files/54a7b830-762d-4d0f-b8fc-7a0870120491/Covid_Booklet.pdf

As always if you have any questions Mortgage Payment Deferrals, Mortgage Rates or anything mortgage please reach out.

Stay Well,
Cory

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CORY VANCE

403-614-9211

cory@coryvance.ca

What You Need To Know About Online Mortgage Calculators

By Cory Vance • 23 Apr, 2024

You’d think an online calculator is a pretty straightforward device, one that you should be able to place your confidence in, and for the most part, they are. Calculators calculate numbers. The numbers are reliable, but how you interpret those numbers, not so much, especially if the goal is mortgage qualification. If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed. Don’t be fooled. Even though an online mortgage calculator can help you calculate mortgage payments or help you assess how additional payments would impact your amortization, they’ll never be able to give you an exact picture of what you can afford and how a lender will consider your mortgage application. While mortgage calculators are objective, mortgage lending isn’t. It’s 100% subjective. Lenders consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase. Then, they will compare that with whatever internal risk profile they are currently using to assess mortgage lending. Simply put, they don’t just look at the numbers. An online calculator is a great tool to help you run different financial scenarios and help assess your comfort level with different payment schedules and mortgage amounts. However, if you rely on an online calculator for mortgage qualification purposes, you’ll be disappointed. The first step in the mortgage qualification process is a preapproval. A preapproval will examine all the variables on your application, assess your financial situation, and provide you with a framework to buy a property based on your unique circumstance. Securing a preapproval comes at no cost to you and without any obligation to buy. It’ll simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do. Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

Understanding the Recent Housing Affordability Measures in Canada

By Cory Vance • 19 Apr, 2024

In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers. Increased Home Buyer's Plan (HBP) Withdrawal Limit Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market. Extended Repayment Period for HBP Withdrawals In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment. 30-Year Mortgage Amortizations for Newly Built Homes Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively. Changes to the Canadian Mortgage Charter The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship. The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country. As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances. If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.