Ozzie Jurock shines a light on the ways to take advantage of Government tax rules in increasing your total profits in the real estate arena. Also 2 Hot Properties

….also Michael & Featured Guest Lance Roberts: Trump Market Rally Blasts Higher…. Again

Final wave of mortgage rules arrives… where does it leave us?

Finally, after a flurry of changes on Nov 30, mortgage brokers can hopefully get back to normal after nearly every lender made, in some cases, major changes to lending policy.

In a period of 2 days, we had:

–        A major bank let go nearly all of their staff for their broker channel underwriting office in a shift to move to a 3^rd party underwriting company (much like TD did a year ago, but with WAY less finesse)

–        Nearly every major bank announces a cap of 5 properties owned maximum by a client seeking residential financing

–        Nearly all banks now charge a premium for rental properties of .25%

–        About half the banks now charge a premium for amortizations that exceed 25 years of around .1%

–        A total of 25 lenders changed their policy in some way Nov 29 or 30. Minor policy changes include:

1. No more refinances for certain smaller non-bank lenders
2. No more amortizations over 25 years
3. Rate surcharges for loans over $1mil, or simply not doing them

So, where do all the changes leave us? Here are some interesting tidbits.

–        Children putting less than 20% down after being on the job for 2 years will probably get a better mortgage than their parents with over 20% equity, of about .1% – .2%

–        Clients building a real estate portfolio will now likely need to get commercial financing or use a “B” lender to grow past 5 properties in total. There are some exceptions to this, so feel free to contact me to learn more

–        Rates are higher by about .3% due in part to the Trump election which caused an increase in bond yields, which along with policy changes resulted in higher fixed rates

–        Less borrowers will be able to shop their renewal to other banks due to tightening bank and government policy, resulting in a lot of extra, unnecessary interest paid for borrowers

The end result is that it will be more difficult to get mortgage financing in general so make sure to buckle down and expect tighter regulations and policy, less exceptions from the bank and definitely a larger mountain of paperwork, regardless of credit history, income or relationship with the bank.

Just thought I’d warn you.

The chart above shows the “real price” of Vancouver, Toronto & Calgary SFDs when looked at from the point of view of the BoC Canadian Commodity Index (CCI) and Borrowing Costs (retail 5yr Mortgage) which are the main input costs apart from operating expenses and tax.

….go HERE for larger chart and more analysis

….related: Vancouver, Toronto & Calgary SFDs in US Dollars

A recent report from one of Canada’s largest real estate companies says that rental real estate is their top investment as money will continue to flow into multi-family. Also Ozzie gives his reasons why he  likes the US.

…also Michael’s featured guest: Up Down or Sideways?

In 2006, in the middle of one the hottest years on record for Canadian housing, then Bank of Canada Governor David Dodge sent a testy letter to his counterpart at the country’s mortgage insurer warning about lax standards fueling demand for homes. Today, Dodge has new words of caution: worry more about supply.

“It’s not very complicated: there’s a supply curve, there’s a demand curve. If you restrict that supply curve then don’t be surprised by high prices,” said Dodge, who over four decades as a public servant worked at the Canada Mortgage and Housing Corp. and headed both Canada’s finance department and its central bank.

While Finance Minister Bill Morneau’s recent measures to cool Canadian housing markets are only the latest in a decade-long effort to stem demand, beginning with Dodge’s letter, they have also begun to reveal something else: the federal government’s waning ability to solve the problem.

….continue reading HERE

…related:

Real-estate reform: What you need to know about Ottawa’s overhaul