"The new Mortgage Down Payment Rules are right around the corner on February 15, 2016. There will be a new tiered approach to down payments on properties between $500,000 and $1,000,000. As of February 15, 2016 your client will be required to have minimum 5% down payment on properties $500,000.00 and under. While those purchasing properties over $500,000.00 will be required to have on hand an additional 10% of the remainder of the purchase price over $500,000.00. Therefore a quick calculation on a $600,000.00 property 5% on first $500,000.00 will require $25,000.00 on the next $100,000.00 they will need 10% or an additional $10,000.00 down. Your client will also be required to evidence and additional 1.5% of the purchase price for closing costs. While we are confident this new rule will not affect many, I assume there will be exceptions to the rule and you should be educated when speaking to our clients who are purchasing over the $500,000.00 thresh hold. Keep in mind we are here to assist you and your client to help you all understand the new down payment rules
We are starting to see some terrific rates being introduced into the market place and we suspect as spring approaches the lenders will be announcing rate sales on their fixed rate products in their bid to gain market share. I received some advises this past week that some of our competitors were advertising some pretty low rates on 1 year fixed mortgages and we investigated and found the rate was only available in Ontario so thanks to our C21 Partner who brought this one to our attention as it gave us an opportunity to investigate and also learn what our competition was offering. One thing we have learned over the years in most cases these short term rates are being offered as lost leaders to drive customers to the phone lines and ultimately into offices where they typically take longer lock in periods such as a five year program as the Government has instituted qualification rules that your client will in fact have to qualify for their mortgage at the Bank of Canada Bench mark rate that being 4.64% today. This rate at this point is much higher than the actual rates being offered on 1 to 4 year terms. This is a terrific reason why you will want to steer your client toward a CENTUM Mortgage Professional who will consult your client and make sure the term matches their ownership goals. "
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