Calgary Real Estate

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Blogging has not been my strength and so this is officially a work in progress.  I have some big plans for the blogging page in the foreseeable future so I ask for your patience as I venture into this side.

Market Updates

CREB Quarterly Stats - Q3 2023
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CREB Quarterly Stats - Q3 2023

CREB® unveils Q3 housing market report with special 2024 forecast preview City of Calgary, Nov. 17, 2023 — The Calgary Real Estate ...

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OCTOBER 2023 HOUSING MARKET UPDATE
Market Knowledge

OCTOBER 2023 HOUSING MARKET UPDATE

November 1, 2023 Price gains continue in Calgary's real estate market as inventory remains low October sales activity slowed over the ...

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SEPTEMBER 2023 HOUSING MARKET UPDATE
Market Knowledge

SEPTEMBER 2023 HOUSING MARKET UPDATE

Calgary home sales at record highs in September, yet supply remains a challenge Sales reached another record high in September with ...

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AUGUST 2023 | August Housing Market Update
Market Knowledge

AUGUST 2023 | August Housing Market Update

August sees record-high sales amidst historic low inventory, pushing prices higher City of Calgary | September 1, 2023 Thanks to a ...

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Style & Design

10 Halloween Safety Tips For Your Home

Posted by Steven Hill on Oct 03, 2023

Home safety for trick or treaters As a responsible homeowner, making your property safe for young trick-or-treaters ...

Six Fall Tips To Prep Your Garden For Spring

Posted by Steven Hill on Oct 01, 2023

Pruning for winter without cutting corners As the shorter days signal the coming of winter, there is ...

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The Alberta Real Estate Association (AREA) released this update to its licensed Realtor body yesterday, informing us of the forthcoming regulations to be implemented on October 17th. It offers some important insight as to the changes ahead.

This is their entire message:

AREA remains in contact with REALTORS®, mortgage professionals, lenders and insurers for information that continues to become available as the real estate and mortgage industries continue to prepare for changes to the mortgage insurance rules effective October 17, 2016.

In speaking with lenders, it is our understanding that lenders and insurers are establishing their policies with a limited amount of contact from the federal government other than the government's backgrounder on the announcement, which states:

The announced measure will apply to new mortgage insurance applications received on October 17, 2016 or later. This measure will not apply to mortgage loans where, before October 3, 2016: a mortgage insurance application was received; the lender made a legally binding commitment to make the loan; or the borrower entered into a legally binding agreement of purchase and sale for the property against which the loan is secured. Mortgage loans for which mortgage insurance applications are received after October 2, 2016 and before October 17, 2016 are also not affected by the rule change, provided that the mortgage is funded by March 1, 2017. Homeowners with an existing insured mortgage or those renewing existing insured mortgages are not affected by this measure.

Based on the information AREA received, the AREA Advisory to members stated that 'Accepted Offers to Purchase signed before October 17, 2016 will qualify under the current rules provided that the mortgage is funded by March 1, 2017'. Discussions with lenders and the government backgrounder indicate that having a legally binding purchase contract prior to October 17, 2016 may not be enough - the mortgage insurance application may also have to occur prior to October 17 for the current rules to remain in effect.

What does this mean?

  • Have your client contact their lender to learn more about their policies on the application of the new mortgage insurance rules.
  • In many cases, we understand lenders will require the mortgage insurance application to occur prior to October 17, 2016 to fall under the current rules.
  • Where the application does not occur until on or after October 17, 2016, the new 'stress test' would apply, requiring the buyer to qualify for a mortgage at the Bank of Canada posted rate, currently 4.64%, even though they would still receive the contract rate.

The example in the October 7 Advisory illustrating the effect of the new rules continues to apply. Family A is qualifying for a mortgage using the following information:

Current Annual Family Income

$87,000

Household Debt Payments

$700 per month

Property Tax Payments

$3,000 per year

Down Payment

5%

Mortgage Rate

2.49%

Result:

  • Qualifying for a mortgage and applying for mortgage insurance under current rules, Family A qualifies for a purchase price of $450,000.
  • Qualifying for a mortgage and applying for mortgage insurance after October 17, 2016, given the need to qualify at the Bank of Canada rate of 4.64%, Family A qualifies for a purchase price of $360,000.

Questions

Have your client speak to their lender and their mortgage professional about their circumstances. Depending on where they are at in their search or the purchase process, the changes may affect their buying power and adjustments may need to be made to their search criteria.

 - As always, it is important to have all the facts and the best representation possible from your licensed real estate professional and your lender. If you have any questions, please feel free to contact me anytime.

Steven

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Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.