Friday, April 23, 2010

How are credit ratings calculated?

How are credit ratings calculated?

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Okanagan Mortgage Team: Home Buyer's Tax Credit

Today's focus is on the Home Buyers' Tax Credit (HBTC).

What is this credit?

The Federal Budget 2009 proposed a tax credit for First Time Home Buyers as an action to provide support for Home Ownership. This proposal was thought to assist first-time home buyers with the costs associated with the purchase of a home (i.e. legal fees, disbursements and land transfer taxes).

For 2009 and subsequent years, the budget proposes to introduce a new non-refundable income tax credit, based on the amount of $5000 for first time home buyers who plan to purchase after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax
relief starting in 2009.

How is the new HBTC calculated?

It is calculated based by multiplying the lower personal income tax rate for the year (15% in 2009) by $5000. So that means, for 2009, the credit will be $750.

Who qualifies for the HBTC?

The individual must meet the below criteria:

# They acquire a qualifying home.
# Neither the individual or spouse/common-law partner has owned and lived in another home in the year of purchase or any of the 4 preceding years.
# A person with a disability or are buying a house for a related person with a disability, you DO NOT have to be a first time home buyer. The home must enable the person with a disability to live in a more accessible dwelling.

Who is considered a person with disability?

An individual who is eligible for the Disability Tax Credit (DTC).

What is a qualifying home?

# The home must be located in Canada.
# This includes existing and new construction. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, apartments in duplexes, triplexes, fourplexes or apartment buildings all qualify.
# A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. (BUT a share that only provides you with a right to tenancy in the housing does NOT qualify).
# You or the related person with a disability must intend to occupy the home as a principal residence no later than ONE year of purchase.

Can my spouse/common-law/friend claim the HBTC?

Either person can claim the credit or you can share it. BUT the total of both claims cannot exceed $750.

If you are purchasing a home with a friend, and you both meet the conditions for the HBTC, either one of you may claim the credit or share it. BUT the total cannot exceed $750.

Does the home have to be registered under the applicable land registration system?

Yes. The home must be registered in accordance with the applicable land registration system.

How do I claim the HBTC?

Beginning with the 2009 personal income tax return, a new line will be incorporated for you to claim the credit.

Do I have to submit any supporting documents with my income tax?

No. But make sure that the information is available just in case CRA requests for it.

Is the HBTC connected to the Home Buyer’s Plan?

No. Some of the conditions for the HBTC and Home Buyer’s Plan are similar but they are not connected. Eligibility for the HBTC will not change if you participate in the Home Buyer’s Plan.

For more information on the First-Time Home Buyers’ Tax Credit, click on Department of Finance’s Budget 2009 (Page 128).

Wednesday, April 21, 2010

Canadian Mortgage Broker News - Housing bubbles have lasting effects: study

:Canada did not make the list. I believe that this is because Canada has not and is not going to have a housing bubble. We are afterall, Canadians and we don't do extravagant. We are middle of the road type people.

Canadian Mortgage Broker News - Housing bubbles have lasting effects: study

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Tuesday, April 20, 2010

Bank of Canada holds steady on rate, this time

Inflation is worrying the Bank of Canada. Canada's recovery from the recession is quicker than anticipated when the January report came out. They have now revised projections and see rapid growth in the first half of the year. It now looks like the June 1st will be the first announcement of a rate increase for the bank overnight rate. This rate directly affects variable rate mortgages. Depending on who you listen to, the rate will go up by 1/4 per cent to perhaps as much as 3% over the next 2 years. This will more than double monthly payments for some.

Bank of Canada maintains overnight rate target at 1/4 per cent;
removes conditional commitment

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent.

Global economic growth has been somewhat stronger than projected, with momentum in emerging-market economies increasing noticeably. Exceptional stimulus from monetary and fiscal policies continues to provide important support in many countries. The recovery in the major advanced economies is still expected to be relatively subdued, reflecting ongoing balance sheet adjustments and the gradual withdrawal of fiscal stimulus commencing later this year. Despite recent progress, considerable uncertainty remains about the durability of the global recovery.

In Canada, the economic recovery is proceeding somewhat more rapidly than the Bank had projected in its January Monetary Policy Report (MPR). The profile for growth is more front-loaded than that presented in the January MPR. The Bank now projects that the economy will grow by 3.7 per cent in 2010 before slowing to 3.1 per cent in 2011 and 1.9 per cent in 2012.

This profile reflects stronger near-term global growth, very strong housing activity in Canada, and the Bank’s assessment that policy stimulus resulted in more expenditures being brought forward in late 2009 and early 2010 than expected. At the same time, the persistent strength of the Canadian dollar, Canada’s poor relative productivity performance, and the low absolute level of U.S. demand will continue to act as significant drags on economic activity in Canada. The Bank expects the economy to return to full capacity in the second quarter of 2011.

The outlook for inflation reflects the combined influences of stronger domestic demand, slowing wage growth, and overall excess supply. Core inflation, which has been somewhat firmer than projected in January, is expected to ease slightly in the second quarter of 2010 as the effect of temporary factors dissipates, and to remain near 2 per cent throughout the rest of the projection period. Total CPI inflation is expected to be slightly higher than 2 per cent over the coming year, before returning to the target in the second half of 2011.

In response to the sharp, synchronous global recession, the Bank lowered its target rate rapidly over the course of 2008 and early 2009 to its lowest possible level. With its conditional commitment introduced in April 2009, the Bank also provided exceptional guidance on the likely path of its target rate. This unconventional policy provided considerable additional stimulus during a period of very weak economic conditions and major downside risks to the global and Canadian economies. With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus. The extent and timing will depend on the outlook for economic activity and inflation, and will be consistent with achieving the 2 per cent inflation target.

In accordance with the removal of the conditional commitment, there will be no additional term Purchase and Resale Agreements issued by the Bank.

Information note:
A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 22 April 2010. The next scheduled date for announcing the overnight rate target is 1 June 2010.

This press release is now available on the Bank of Canada’s website at:

The announcement dates from September 2009 through December 2010 are:

Thursday, 10 September 2009
Tuesday, 20 October 2009
Tuesday, 8 December 2009

Tuesday, 19 January 2010
Tuesday, 2 March 2010
Tuesday, 20 April 2010
Tuesday, 1 June 2010
Tuesday, 20 July 2010
Wednesday, 8 September 2010
Tuesday, 19 October 2010
Tuesday, 7 December 2010

All announcements will continue to be made at 09:00 (ET).

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Monday, April 12, 2010

5 Great Reasons to Pre-qualify for a Mortgage

A mortgage loan pre-qualification is the process of being pre-approved for a home mortgage before you going house-hunting.
Here are 5 good reasons why you should pre-qualify BEFORE you start looking :

1. Getting pre-qualified lets you know what you can afford and how high you can go. You won't waste your time or your realtors looking outside of your price range.

2. You won't go through the disappointment of being rejected on a mortgage application and losing your dream home.

3. If the property you are looking at is hot with multiple offers you can remove the subject to financing clause and make your offer stronger. This also puts you in a stronger bargaining position when it comes to price and possession date.

4. Preapprovals show you are a serious shopper. Your realtor and sellers will take you more seriously . By knowing your financial limitations, your realtor can spend more time finding a suitable home for you rather than wasting time looking for homes you would not qualify for.

5. After you make an offer , you have a lot of other things to do which will keep you busy for a few days. Arranging for a lawyer, a house inspection and finding a moving company.
If you would like to be pre-qualified call me at 403-8361201 or apply online at and click on APPLY NOW

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Wednesday, April 7, 2010

Watch bond market for rate hike clues

Were you surprised by the interest rate hike last week? Read this article for more info on how bond rates affect fixed rate mortgages. The Bank of Canada overnight rate drives the variable rate market but most people think it affects fixed rates as well. Educate yourself with this article

Watch bond market for rate hike clues

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