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Higher Interest Rates

Will an interest rate hike put a freeze on Toronto housing prices?

April 11, 2017 7:32 pm Published by

Two top economists recently came to the same conclusion about what it would take to cool off Toronto’s blazing housing market. It wasn’t imposing a foreign-buyer tax, as some observers have called for. Nor was it a Vancouver-style vacant-home tax, the likes of which Toronto Mayor John Tory is reportedly mulling, or increasing supply. No, both National Bank Chief Economist Stefane Marion and BMO Senior Economist Robert Kavcic suggest higher interest rates can take the steam out of Toronto home prices, which have rapidly appreciated to the point where a detached home in the city cost $1,561,780 on average in March, according to the Toronto Real Estate Board (TREB). “It was [Bank of Canada] rates hikes that ultimately broke the late-80s run, and (fully understanding rate hikes are not local) a 4% 5-year fixed rate would quickly do to Toronto... View Article

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Who’s eating you out of house and home?

March 23, 2017 3:24 pm Published by

Termites are not the type of guest you want in your home. Termites are extremely destructive little guys and they always travel with about a million of their relatives. These ferocious eaters cover all of Toronto except for a few areas. These insect aliens are looking for a meal to bring back to their colony, that’s right, they take a few bites out of a wood joist or wood stud and they travel back to their colony far underground. There they distribute your yummy house to their friends and family. One colony of termites can take on 3 or 4 houses at a time. If your neighbour is treating their property for termites, you should also. If you don’t currently have termites it won’t take long before you do. There are termite companies that use an environmentally friendly treatment and... View Article

For Rent

What are the benefits of working with a realtor to find a rental? 

March 10, 2017 5:52 pm Published by

Navigating the rental market can be a daunting task. The Canadian Mortgage and Housing Corp. recently reported a 3.4-per-cent vacancy rate for rental properties across the country. Meanwhile, in Toronto, prices increased 11.7 per cent in 2016, according to data collected by Urbanation. Clearly, rental properties are in high demand. And rentals are now receiving multiple offers, often going to the tenant who bids highest and for above the asking price. So there can be advantages to using a real-estate professional to find a rental. But not all brokers and salespeople handle rentals. As well, the representative would typically show you rentals that are listed on Realtor.ca; landlords are less likely to pay a commission if your agent approaches them through a listing on Kijiji or Craigslist — so you need to discuss and decide on how the real-estate rep... View Article

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The Bank of Mom and Dad: The ways Toronto parents help their kids buy homes.

February 28, 2017 9:11 am Published by

A Toronto-based mortgage agent has seen more parents taking equity out of their own homes lately to help their children achieve their otherwise elusive dreams of homeownership. “I think it’s increasing because, frankly, the price of real estate is just becoming virtually impossible for first-time buyers to tap into the market,” says Elan Weintraub, a director and mortgage agent with the brokerage Mortgage Outlet. Last month, detached homes in the Greater Toronto Area sold for an average of $1,068,670 and condos went for $442,598, according to the Toronto Real Estate Board. Those are year-over-year increases of 26.3 per cent and 14.5 per cent, respectively. Weintraub gives a hypothetical example that illustrates the way he’s seen some parents give their kids a leg up in an exhorbitantly expensive market. He describes a 50-year-old with $100,000 left to pay off towards their mortgage... View Article

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Stay Grounded! Know What You Can Afford

February 14, 2017 11:24 am Published by

When you are involved in buying a property and there are multiple offers, it’s best to keep your feet planted on the ground because the bank may say “no deal”! This does happen, especially now in the US, where banks were badly burned in the bubble of 2006–2007. Back in those crazy days, wildly inflated home appraisal values were routinely submitted to the banks, so that virtually any breathing applicant would qualify for a mortgage. The consequences were disastrous. But even in normal, stable markets like Canada’s, a large asking-selling discrepancy could spell trouble for the purchaser. Since institutional lenders (banks) lend a percentage of the appraised value of the home, a low appraisal can make it hard or impossible for the purchaser to put together the financing. Assume you buy a home for $400,000 and put 20 per cent ($80,000) down. You need... View Article

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CMHC Mortgage Loan Insurance

January 30, 2017 9:11 am Published by

 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 starting at 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. Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees... View Article

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Expecting to buy or sell a home in Toronto in 2017? Here’s what to expect.

January 5, 2017 9:19 pm Published by

Is 2017 the year that the sizzle starts to sputter on the Toronto region’s overheated real estate market? That’s possible, says John Pasalis, of data-digging brokerage Realosophy near Queen and Leslie Sts. “As the craziness continues, I suspect that might trigger some bigger changes,” he said in reference to government measures already implemented this year such as more rigorous stress testing of lending qualifications.”I suspect that Ottawa or the province are only going to be fine with 30 per cent year-over-year appreciation (in housing prices) for so long before they do something else that’s drastic,” he said. Here’s what other industry experts are predicting: Interest rates The inching up of interest rates and more stringent mortgage rules are among the factors that could play a role in tempering sales in the hot Toronto region market, says Jason Mercer, director of... View Article