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With housing prices running away and rule changes that make it harder to qualify for a mortgage, the mortgage industry had been lobbying for months now to introduce some changes to help millennials and first-time buyers. On March 19, the budget announced two changes:

1. CMHC First Time Buyer Incentive

2. Home Buyer Plan (HBP) limit increase

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Key Questions for a mortgagor: I got my mortgage before these changes were announced. What happens to me at maturity? Will the bank renew me? Can they decline me? Will I have to sell my house if I don’t qualify? Ahhh!!!

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Stats Canada released the Retail Trade numbers and the CPI (inflation) last week. The retail sales figures showed higher purchases than was generally expected. Retail sales increased to $50 billion in November. The data was viewed as mildly favourable for the economy, so government bond yields edge up slightly.

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On October 25th the Bank of Canada gave its scheduled rate announcement and Monetary Policy Report Update. In this report, the Bank said, “While less monetary policy stimulus will likely be required over time, Governing Council will be cautious in making future adjustments to the policy rate”. The simple translation to this is that Bank of Canada is not in any hurry to increase rates again because there are some legitimate concerns and worries present right now.

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By now you’ve probably heard on the news that there is another round of mortgage rule changes. These rules will be effective officially on January 1st 2018. Once banks and lenders have had a chance to digest the changes, they’ll roll out what it means in terms of timing. For example, if you purchase a house on November 10th and it doesn’t close until January 15th then which rules apply?

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The Bank of Canada Qualifying Rate was introduced originally to protect variable rate mortgage holders against rate shock. It provided a buffer against an inability to meet their payment if rates rose quickly. The Department of Finance is concerned about large loan losses on the books of our big banks and bank stability.

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This is a big week for the mortgage industry. First, OSFI (the Federal bank regulator) has released its draft version of its revisions to the B-20 guidelines for mortgage underwriting. Rule changes will be coming again that are tightening in nature. Second, the Bank of Canada is probably going to increase its overnight rates on Wednesday by 0.25%. It’s unknown if the lenders will increase their prime rates by the same amount or by a lessor amount as they did with the last two changes in 2015.

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The change in housing prices aren’t supposed to move nearly as wildly as they have been over the last few years. After all, we have been in low inflation economic model since the early nineties. However, that being said, we are in a period of very low interest rates and the prices have been swinging around considerably. This makes the task and importance of a house appraiser for mortgage financing even more important to the buyer.

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Did you know that about 30% of people get their mortgage from a mortgage brokerage? I like to think of the remaining 70% as those who are yet unaware of the benefits of a mortgage broker. It’s only natural that if you walk into a bank branch they will try to persuade you to use them for your next mortgage.

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Purchasing a home in a rapidly rising housing market can be difficult. Buyers have to think about offering the right price; while having an offer proceed as clean as possible. Often times, the buyers are waiving their condition of financing. For some, this may be less of a concern because they’ve been pre-approved allowing flexibility on their down payment. However, for those buyers who are limited to a more restrictive budget this can be a problem as appraisals can come in too low.

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