We hope this finds you enjoying the beautiful weather we have been having for the past week! Let's hope it continues for the remainder of the summer and well into the fall - we all deserve it!
Here is a look at the changes to the mortgage lending rules as of July 09, 2012:
Reduced maximum amortization of a residential mortgage under CMHC program from 30 to 25 years - that can be equivilant to almost 1% rate hike on payments.
Refinances reduced from 85% of the homes value to 80%.
Elimination of mortgage insurance for homes valued over 1 million (therefore need min 20% down).
Debt servicing ratios set at 39% GDS (gross debt servicing) and 44% TDS (total debt servicing).
There has been a lot of talk on how these mortgage changes are going to affect the market. Probably the biggest change will be the reduced amortization time which will mean that purchasers will not be able to buy at as a high price as they previously could have with the amortization spread over a longer period. The other issue is the GDS ratio being reduced will also affect the amount that a purchaser is able to afford. Last but not least will be the reduction to 80% loan to value for anyone wanting to refinance and access current equity in their home. This will limiit availability to use your houses equity at todays low interest rates to pay down credit.
That being said prices held strong in June, with increases for detached (3.3%) and condo (0.3%) sectors of the market and a decrease of 0.1% in attached properties. The MLSLink Housing Price Index (HPI) composite benchmark for all residential properties in Greater Vancouver over the last 12 months has increased 1.7%.
Sales-to-Active listings ratio sits at 13%. This is the lower end of a balanced market. The ratio has been declining in our market since March when it was 19%. If this dips lower we could start to see more of a buyers market. This will continue the trend of less competition for buyers and more selection to choose from compared to earlier this year.
We hope you enjoy this months article on "Boosting Your Home's Curb Appeal!" Even if you don't plan to sell your home anytime soon, keeping its exterior & landscaping in top shape may boost its value and keep major repairs at bay.
Oh and by the way....if you know of someone who would appreciate the level of service we provide, please give us a call with their name and number. We will be happy to follow up and take great care of them. Don't forget our appreciation of $500.00 for each successful referral.