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Pre approvals after Jan 1 2018

As many of you know, stress rules will apply to all purchases including those with 20% down or more effective January 1 2018. Many clients will see an effective drop of 20% in their buying power which translates straight to a reduced purchase price. However, what happens with existing pre approvals?

Here are the rules that apply with a few of my lenders but not all:

Any preapproval committed prior to January 1st 2018 will remain valid for up to 120 days from the date of the original preapproval. Any extensions of an expired preapproval after December 31 2017 must be qualified using the qualifying rate based on the new rules.

Should a preapproval that was committed in 2017 turn into a real deal, the old rules apply even if the closing date of the new purchase is greater than the expiry date of the preapproval, but not greater than 120 days from the date of the commitment for the real deal.

Example; A pre approval committed prior to January 1 expires March 15, 2018. Borrowers purchase a property closing May 1 2018. If the real deal is committed on/before March 15th, we still qualify using the old qualifying rate rule. The rate is no longer protected as the closing is beyond the expiry date of the pre approval, however the old rules still apply for qualification, as long as the deal closes within 120 days.

This is a big opportunity so please contact me asap to get your pre approval in prior to January 1 2018. Any existing pre approvals that I have will be resubmitted next week to take advantage of this.

Article by Bob Alexander

 

What the new mortgage rules mean for homebuyers

Today, the Office of the Superintendent of Financial Institutions (OSFI) introduced new rules on mortgage lending to take effect next year.

OSFI is setting a new minimum qualifying rate, or “stress test,” for uninsured mortgages (mortgage consumers with down payments 20% or greater than their home price).

The rules now require the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada (presently 4.89%) or 200 basis points above the mortgage holder’s contractual mortgage rate. “The main effect will be felt by first-time buyers,” says James Laird, co-founder of Ratehub.ca. “No matter how much money they put down as a down payment, they will have to pass the stress test.” The effect of the changes will be huge, resulting in a 20% decrease in affordability, meaning a first-time homebuyer will be able to buy 20% less house, explains Laird.

MoneySense asked Ratehub.ca to run the numbers on two likely scenarios and find out what it would mean for a family’s bottom line. Here’s what they found:

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Trading Places Between the Inner-City and the Suburbs

Livia McCabe and Brendan Hughes are realtors with Re/Max Real Estate (Central) who’ve helped many people move from outer communities to downtown and vice versa. In their experience, the people moving into the city centre from the outskirts tend to be empty nesters looking to downsize and simplify in their retirement. “With the kids grown up and gone, most of them find their current property too large and in need of a large renovation,” says McCabe. “They would rather sell and find something turnkey that they could enjoy immediately.”

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Varsity Estates/Village/Acres now just “VARSITY”

On January 5, 2016 the Calgary Real Estate Board updated their Calgary MLS community boundaries and names to align with the existing City of Calgary communities.  The changes came about in an effort to increase database integrity and eliminate naming communities that do not formally exist or are not formally recognized by the City. This allowed for both CREB and the City to better share, compare and analyze housing data.  Generally speaking the ‘Estate’ communities have disappeared and are incorporated into the surrounding communities.

As a result Varsity Acres, Varsity Village and Varsity Estates are now known as the single community named Varsity. 

While this might make it easier for data sharing with City, it really skews real estate data. Previous to this change, sales data would have been obtainable by each distinct area of Varsity. Now it is all part of one big ‘Varsity’ area.

Even though the Calgary Real Estate Board lumps all of the sales data into one area, the McCabe Hughes team has the ability to extrapolate the sales data & market information that is most relevant to your specific area within Varsity. Our ability to provide you with the most accurate & relevant data helps determine the true market value and empower you when it comes time to selling your property. Determining the right list price will help sell your property quicker and for more money than you might have thought possible. Ask us for a detailed CMA (Comparative Market Analysis) of your property in your unique part of Varsity.

             

How to Cash in on Your One-Bedroom Condo

Selling any home can be difficult in a buyer’s market, but when you are selling a one-bedroom condo there are even more challenges because there are so many comparable units on the market at the same time — sometimes even in your building.

Livia has been featured in Avenue Magazine’s article on how to help people who are looking to sell a one-bedroom condo in this competitive market:

Realtor Livia McCabe of Re/Max Real Estate (Central) believes the biggest challenge when selling a one-bedroom is always the perceived lack of space. “Take out half the things in your closets and drawers,” she suggests. “If it looks like your stuff doesn’t fit, the buyer will think their stuff won’t fit.” 

Click here to read the full article