15 Jan

Canada Greener Homes Loan

General

Posted by: Kim Seifert

Canada Greener Homes Loan

What is the Canada Greener Homes Loan? It is a Major home retrofit program through grants and interest-free loans that make your home more energy-efficient.
The Canada Greener Homes Loan helps Canadians make their homes more energy efficient and comfortable. The loan is offered in conjunction with the Greener Home Grant under this Initiative to help Canadian homeowners across the county. They are working with their partners at Natural Resources Canada to deliver this initiative to provide $4.4 billion in interest-free loans, of up to $40,000 per household, helping up to 175,000 homeowners complete extensive home retrofits on their principal residence.

To apply for the Canada Greener Homes Loan:

You need to apply first and be approved for the Grant. If you have already completed your grant process through this Initiative, visit their portal to start your loan process. More Information

Let’s Talk Mortgages… Contact

15 Jan

Consolidate Debt Into a Mortgage

Mortgage Tips

Posted by: Kim Seifert

Is It a Good Idea to Consolidate Debt Into a Mortgage?

With Blue Monday (January 16, 2023) tomorrow we need to address if it is a Good Idea to Consolidate Debt Into a Mortgage. Building up a case to refinance your mortgage for debt consolidation purposes can depend on a number of key factors. The amount of equity you’ve got in your home can dictate the total amount of debt you’ll be able to pay off.
Blue Monday is the name given to a day in January, typically the third Monday of the month as it is the most depressing day of the year. It is also around the time people start receiving the Christmas Credit Card Bills, returning to their regular work schedule.

Here are a Few Reasons to Consider Refinancing:

  1. HELOC/ Unsecured Lines of Credit interest rates have increased significantly (variable-rate)
  2. Having trouble making the minimum Credit Card Payments, Personal Loans or paying your Vehicle Loan?
  3. Need to Free up funds to purchase life necessities like food, utilities, schooling, etc. (Monthly Budget)
  4. Currently in a variable-rate mortgage, want to stabilize your payments
  5. Lower Interest Rates then on LOC’s (average 7.5%-9%) and Credit Cards (average 17%-21%)
  6. Ease Money Stress on Close Relationships. Money issues often are one of the top disputes in a household. Especially, if one person is a spender.
  7. Considering missing mortgage payments or defaulting on your mortgage.

Below are Good Guidelines to Follow:

When it comes to your home expenses and overall monthly budget, the goal is the costs to maintain your home do not exceed 35% of your total monthly income.
Monthly Budget: To help you keep track of your finances, consider breaking up your monthly budget into the following categories.
  1. Housing – 35% of your monthly income
  2. Transit – 15% of your monthly income
  3. Debt – 15% of your monthly income
  4. Savings – 10% of your monthly income
  5. Life – 25% of your monthly income

Because everyone’s debt is a little different, you’ll need to put together an accurate monthly budget to know how much cash is coming in and going out.
CMHC Debt Service Calculator — Compare your monthly debt payments and housing expenses to your gross household income. Here 

Your Next Steps for Debt Consolidation: It’s key to remember that even though your consumer debt may feel overwhelming, there are options available to help reduce that monthly burden.

Consolidate Debt Into a Mortgage – Other Steps You Should Consider:

  1. Research all your financial options thoroughly before taking any action
  2. Review your monthly cash flow and trim away any unnecessary spending first
  3. Talk to a Mortgage Broker about current refinancing rates, product options, potential early payout penalties, etc.
  4. Build a realistic plan that gets you out of debt in the least expensive way

Let’s Talk Mortgages… Refinance Calculators

15 Jan

2023 Tax Information Guide

Latest News

Posted by: Kim Seifert

2023 Tax Information Guide:

2023 Tax Information Guide — Handy list of tax numbers as a quick reference.

2023 Tax Information Guide for Working clients

  • Maximum RRSP contribution: The maximum contribution for 2023 is $30,780; for 2022, it’s $29,210. The 2024 limit is $31,560.
  • TFSA limit: In 2023, the annual limit is $6,500, for a total of $88,000 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009. The annual limit for 2022 is $6,000, for a total of $81,500 in room available in 2022 for someone who has been eligible since 2009.
  • Maximum pensionable earnings: For 2023, the maximum pensionable earnings amount is $66,600 (up from $64,900 in 2022), and the basic exemption amount remains $3,500 for 2022 and 2023.
  • Maximum EI insurable earnings: The maximum annual insurable earnings (federal) for 2023 is $61,500, up from $60,300 in 2022.
  • Lifetime capital gains exemption: The lifetime capital gains exemption is $971,190 in 2023, up from $913,630 in 2022.
  • Low-interest loans: The family loan rate until Dec. 31 is 3%.
  • Home buyers’ amount: Did your client buy a home? They may be able to claim up to $5,000 of the purchase cost, and get a non-refundable tax credit of up to $750. (Legislation is pending that would double the amount to $10,000 for a non-refundable tax credit of up to $1,500.)
  • Medical expenses threshold: For the 2023 tax year, the maximum is 3% of net income or $2,635, whichever is less. For 2022, the max is 3% or $2,479.
  • Basic personal amount: The basic personal amount for 2023 is $15,000 for taxpayers with net income of $165,430 or less. At income levels above $165,430, the basic personal amount is gradually clawed back until it reaches $13,521 for net income of $235,675. The basic personal amount for 2022 ranges from $12,719 to $14,398.

2023 Tax Information Guide for Older clients

  • Age amount: Clients can claim this amount if they were aged 65 or older on Dec. 31 of the taxation year. The maximum amount they can claim in 2023 is $8,396, up from $7,898 in 2022.
  • OAS recovery threshold: If your client’s net world income exceeds $86,912 in 2023 or $81,761 in 2022, they may have to repay part of or the entire OAS pension.
  • Lifetime ALDA dollar limit: The limit is $160,000 for both 2023 and 2022.

2023 Tax Information Guide for Clients with children, dependents

  • Canada caregiver credit: If you have a dependent under the age of 18 who’s physically or mentally impaired, you may be able to claim up to an additional $2,499 in 2023 and $2,350 in 2022 in calculating certain non-refundable tax credits. For infirm dependents 18 or older, the amount for 2023 is $7,999 and the 2022 amount is $7,525.
  • Disability amount: This non-refundable credit is $9,428 in 2023 ($8,870 in 2022), with a supplement up to $5,500 for those under 18 ($5,174 in 2022) that is reduced if child care expenses are claimed.
  • Child disability benefit: The child disability benefit is a tax-free benefit of up to $3,173 in 2023 ($2,985 in 2022) for families who care for a child under 18 with a severe and prolonged impairment in physical or mental functions.
  • Canada child benefit: In 2023, the maximum CCB benefit is $7,437 per child under six and up to $6,275 per child aged six through 17. In 2022, those amounts are $6,997 per child under six and up to $5,903 per child aged six through 17.

Federal tax brackets

Federal bracket thresholds will be adjusted higher in 2023 by 6.3%.

  • The 33.0% tax rate begins at taxable income of over $235,675, up from $221,708 in 2022.
  • The 29.0% tax rate begins at taxable income of over $165,430, up from $155,625 in 2022.
  • The 26.0% tax rate begins at taxable income of over $106,717 up from $100,392 in 2022.
  • The 20.5% tax rate begins at taxable income of over $53,359, up from $50,197 in 2022.
  • Income up to $53,359 is taxed at 15.0%.

Let’s Talk Mortgages… Here

15 Jan

80-year Amortization at CIBC

Latest News

Posted by: Kim Seifert

80-year Amortization at CIBC?

80-year Amortization at CIBC were caused by CIBC not increasing monthly mortgage payments on their Variable-rate products despite hitting the trigger point. Their actual amortization period has even hit 80 years for some clients. CIBC customers are still paying the same amount which isn’t even covering their interest anymore.
If this is you… contact CIBC or me and discuss what you can do to change this. Knowing your lender is as important as the rate you received!

Things you could do:

  1. Increase your payments accordingly
  2. Lump-sum payment
  3. Convert your variable-rate mortgage into a fixed rate mortgage (penalty free)
  4. Break your current variable-rate mortgage and shop for a better rate and product that suits your monthly budget (3-month interest penalty)
All ways to off-set your 80-year Amortization at CIBC.

Let’s Talk Mortgages… Contact

15 Jan

Canada Faces Mass Exodus of Small Business Owners

Latest News

Posted by: Kim Seifert

Canada Faces Mass Exodus of Small Business Owners:

75% cite retirement as the reason for leaving their business, while a smaller number plan to leave because of stress, to step back from their responsibilities as an owner, or to move to another business venture. More than three-quarters of small business owners plan to exit their businesses within the next 10 years, according to a new report by the Canadian Federation of Independent Business (CFIB).
The report said more than $2 trillion in business assets could be in play over the next decade as 76% of small business owners intend to exit their business activities.

Challenges caused by the Covid-19 pandemic have affected owners’ exit timelines:

1) Plan to exit their businesses within the next 10 years.
2) More than $2 trillion in business assets could be in play over the next decade.
3) Most common approach is to sell to an unrelated buyer (49%), while 24% will sell to a family member and 23% to their employees.
3) Only one in 10 business owners (9%) have a formal business succession plan.
4) 56% of owners say their business is still making less than normal revenues, 64% still holding pandemic debt, and 77% are still under pandemic stress. Almost four in 10 (39%) business owners have modified their exit date because of the pandemic: about 17% have accelerated their timeline, while 22% have delayed it by at least one year.

Canada Faces Mass Exodus of Small Business Owners — Will Bill C-208 hinder the sale to children?

In 2021, the federal government passed Bill C-208, which allowed business owners selling shares of their business to their child to take advantage of the lifetime capital gains exemption on the proceeds of the sale. Before the change in law, the proceeds of disposition on a sale of a business to a child were taxed as a dividend. 

However, C-208 was a private member’s bill that didn’t have the Liberal government’s endorsement. In the 2022 federal budget, the government said it would look at modifying the rules “to protect the integrity of the tax system while continuing to facilitate genuine intergenerational business transfers.”

In the report, the CFIB called on the government to “honour the spirit” of Bill C-208 in any amendments it proposes. It also said the government should simplify the LCGE and increase the amount to $1.2 million.

Report by the Canadian Federation of Independent Business (CFIB). More Information

Let’s talk Mortgages… Contact Information

15 Jan

Saskatchewan Residential Sales in 2022

Latest News

Posted by: Kim Seifert

Saskatchewan Residential Sales in 2022

Saskatchewan continues to report sales that are stronger than pre-pandemic levels.

Saskatchewan Residential Sales in 2022 continued to report record sales of apartment condominiums but this wasn’t enough to offset declining sales in detached homes, resulting in a 12% decline in residential sales in 2022. “Without question, higher lending rates are contributing to the pullback in sales. We saw the Bank of Canada raise interest rates seven times in 2022.

Regional Highlights: Source — SRA

Sales eased across all regions of the province this year, with declines ranging from 27 per cent in Melfort to two per cent in Swift Current. Despite the pullback in sales relative to 2021, a record year, all regions reported sales that were either consistent with or above long-term trends. All regions across the province also saw a pullback in both new listings and inventory levels. Average annual inventory levels not only declined relative to last year but were well below long-term trends across all regions.

City of Regina 

Easing sales in December contributed to a year-to-date decline of three per cent. The decline in sales was driven by pullbacks in the detached sector, as sales activity improved in every other category. While total residential sales have eased relative to a record 2021, the 3,609 sales reported in 2022 is over 23 per cent higher than long-term trends and well above pre-pandemic activity.

Both new listings and inventory levels experienced a pullback in 2022, with the decline in inventory largely in products priced below $500,000. Shifts in both sales and supply resulted in increasing months of supply when compared to levels experienced early in 2022. While this did take some pressure off prices, especially in Q4 2022, the benchmark price increased by over three per cent on an annual basis.

City of Saskatoon

The City of Saskatoon reported 4,587 sales in 2022, a 15 per cent decline over last year’s record high but over 12 per cent higher than 10-year trends. Supply continues to be a challenge, as new listings have eased significantly and were 14 per cent below long-term averages in 2022. Meanwhile, inventory levels eased even further, resulting in average supply levels 31 per cent below long-term trends.

While a pullback in sales relative to inventory levels in the second half of the year did allow the months of supply to rise, the market remains far tighter than what we would traditionally see in Saskatoon. On an annual basis, benchmark prices rose nearly five per cent over 2021 levels.

Further to Saskatchewan Residential Sales in 2022 —

Homes Listed for 30+ days!

You can typically make the assumption it won’t sell at the asking price. Currently, only 21.9% of properties are selling over asking. Low Volume + What is NOT Selling in the Canadian Market = Pricing.

Let’s Talk Mortgages… Apply Here

15 Jan

OSFI Leaves Mortgage Stress Test

Latest News

Posted by: Kim Seifert

OSFI leaves mortgage stress test unchanged:

OSFI will launch a full review of B-20 mortgage underwriting standards in January. The Stress Test created an environment of parents/ grandparents to not only helping with down-payments but also co-signing mortgages to meet new Stress Test requirements of 5.25% or Contract Rate + 2%, whichever is higher!
With co-signers and help with a down-payment did OSFI regulations solve what it was intended to do?
OSFI OSFI

OSFI Canada unveiled 3 proposed measures that would further restrict mortgage lending:

Pending the just-launched consultation period, if adopted.

1) Loan-to-income & debt-to-income restrictions.
2) Debt service coverage restrictions.
3) Interest rate affordability stress tests.
“Rising household debt is a significant vulnerability to mortgage lenders.”

Let’s Talk Mortgages… Apply Here

15 Jan

Prohibition on the Purchase of Residential Property by Non-Canadians Act

Latest News

Posted by: Kim Seifert

Prohibition on the Purchase of Residential Property by Non-Canadians Act:

On January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act is in effect for a period of two years.

This means that certain customers are not allowed to buy residential property in Canada, and Brokers should not submit applications for mortgage, Home Equity financing for a purchase.
Let’s Talk Mortgages.

The stated intention of the Act is to make residential homes more affordable for Canadians. To that end, Section 4 of the Act provides that “it is prohibited for a Non-Canadian to purchase, directly, or indirectly, any residential property.”

The Act defines Non-Canadian as:

  1. an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident;
  2. a corporation that is incorporated otherwise than under the laws of Canada or a province;
  3. a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada and that is controlled by a person referred to in paragraph (1) or (2); and
  4. a prescribed person or entity,

The Act defines “residential property” as:

  1. a detached house or similar building, containing not more than three dwelling units;
  2. a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit or other similar premises;
  3. prescribed real property or immovable,

Section 6 of the Act makes it an offence for a Non-Canadian to purchase residential property covered by the Act. It also creates an offence for every individual that counsels, induces, aids or abets a non-Canadian to purchase any residential property covered by the Act knowing that the non-Canadian is prohibited. All such persons are liable on summary conviction to a fine of not more that $10,000.

For More Details: Click Here

Updated March 2023:

Prohibition on the Purchase of Residential Property by Non-Canadians Act Changes:

➡️Work permit holders can buy homes.

➡️Non-Canadians can buy land for residential/mixed-use.

➡️Non-Canadians can buy residential property for development.

➡️Corporation foreign control threshold to 10% from 3%.

Let’s Talk Mortgages… Apply Here

15 Jan

Mortgage Assets

Mortgage Tips

Posted by: Kim Seifert

Why mortgage lenders ask for proof of Mortgage Assets when applying for a mortgage?

Mortgage Assets show your net worth and allows a lenders to get a better picture of how you will make your mortgage payments, down payment and closing costs.

In addition to considering your employment history and income, the lender will also consider whether you have any additional assets that you could convert into cash. That’s because these assets provide you with a potential source of cash flow in case of a job disruption or job loss – could you stay afloat for a few months?

What are considered Mortgage Assets?

  1. Savings/ Chequing Account Balances.
  2. Investments (RRSP, TFSA, Bonds, Mutual Funds, etc.).
  3. Life Insurance (Private & Work).
  4. Pensions.
  5. Vehicles.
  6. Properties Owned.

What Information will you need to provide for Assets?

  1. Investments/ Savings/ RRSP/ TFSA/ Pension/ Life Insurance: Institutions Name, Type of Investment, Approximate Value.
  2. Vehicles: Make/ Model, Year, Approximate Value.

Generally the lenders do not ask for supporting documents on Assets unless they are being used for Down Payment and Closing Costs. Required Supporting Documents:

  1. 90-day bank History showing available funds.
  2. Must show your name, Account Number and Full 90-day History.
  3. Nothing can be edited or Blanked out.
  4. If moving funds from Investments accounts to general accounts you must show a 90-day history for each account following the funds from one account to another.

What are the general requirements to qualify for homeowner mortgage loan insurance?

Find out which requirements you must meet to qualify for CMHC’s Homeowner Mortgage Loan Insurance. Here

Let’s Talk Mortgages… Apply Now