Budgets, Taxes and Falling Rates
An increase in closing costs:
With the Alberta provincial budget announced, there are some major changes to land titles registration fees. In short, the fees associated with buying and selling real estate in the province is about to see a major increase. Closing costs are still relatively inexpensive compared to other provinces with transfer taxes, but the changes are a big jump and come into effect July 1st, 2015. The increase is somewhere between 4-6 times current levels depending on price point and mortgage amount. For example, a 500,000 dollar purchase with 400,000 dollar mortgage will see registration fees move from 290 dollars, to 1230 dollars.
These increases will be avoided by closing a mortgage or purchase prior to July 1st. However, the deadline may create registration backlog, so if you can close earlier than the end of June, that may be a capital idea.
CMHC and others increase as well:
Fee increases are not just for provincial budgets though, as the default mortgage insurers are once again raising the premium for buyers with less than 10% down. Currently the fee at CMHC, Genworth and Canada Guaranty is 3.15% for 5-9.99% down. Effective June 1st, the premium will be increased to 3.60%. The increase is only for this segment and although not a huge dollar increase from a payment standpoint-percentage wise it is a big jump, especially considering the premiums already experienced a hefty increase a year ago.
CMHC Premium increase: news release click here
First Time buyer? The window you have been hoping for:
A downward Alberta and Canadian economy is not all bad news and we are seeing an opportunity and frankly a perfect storm for the first time buyer.With rates at new record lows (5 year fixed money is well on its way to 2.50%), a cooling housing market-with fewer transactions and increased inventory means a potential buyer is able to shop and negotiate. There is an opportunity to get into home ownership at an overall cost that is less than a year ago.So, if you or someone you know, is looking to get in the market, be prepared and connect with Mortgage Connection to be pre-approved prior to your search.The right home, needs the right mortgage for it to be a smart choice.Also, if youwere a first time buyer in 2014, do not forget about your tax credit-see more here: first time homebuyer
What about me?:
Low rates are not just for buyers. There is a real opportunity to look to refinance into record-low priced mortgages. However, dropping rates can mean increased payout penalties on your existing mortgage. So, before you jump the gun at a new low rate, let us crunch some numbers to show your TRUE potential savings. The banks and lenders are in the game to make as much interest off you as possible, Mortgage Connection wants to ensure they make as little as possible off of you!
As always, we are happy to review your plans and needs and look forward to you checking in with us for a mortgage check-up.