Say Bye-Bye to 40 Year Mortgage Guarantees
There has been significant press around the Federal Minister of Finance’s decision to no longer provide government guarantees to 40 year mortgages. In addition, the guarantee is not available for 100% financing of a home. The buyer will be required to provide a minimum of 5%. This could be borrowed, but it will not become part of the government guarantee. These changes will become effective October 15, 2008.
What is Mortgage Insurance? A government guarantee is actually government backed mortgage insurance. Mortgage insurance (which is sometimes called mortgage default insurance) is a credit risk management tool that protects mortgage lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender will submit a claim to the mortgage insurer to recover its losses. (from the Department of Finance website)
What is the Impact of a 35 versus 40 year amortization period on a $200,000 Mortgage? If you cannot get a 40 year mortgage, then 35 year amortization periods continue to be available. The example Finance uses is: Reducing amortization from 40 years to 35 years on a mortgage loan of $200,000 with a 6 per cent interest rate results in a $41 increase in a borrower’s monthly payment, but the borrower will save $49,000 in interest payments.
Are there other changes? Four other changes will be taking place.
1. Credit Scores: “Canadian lenders have not originated many government-backed mortgages for borrowers with low credit scores. To ensure this practice continues, the new framework will establish a credit score floor of 620. There will also be a limited “basket” to provide for exceptions to this rule, recognizing that there are some borrowers with credit scores below 620 that otherwise represent low credit risks.”
2. Loan Documentation: The guarantee will now require a minimum loan documentation “standards to ensure that there is evidence of reasonableness of property value and of the borrower’s sources and level of income.”
3. Interest Only Mortgages will not be covered.
4. The total debt service ratio (portion of gross income that is spent on debt service and housing-related fixed or essential payments) will be set at a maximum of 45%.
I have included this information to give you a briefing on upcoming changes. If you need additional information, it is available on the Government of Canada Department of Finance site, with mortgage brokers, and at your financial institutions.
Before shopping for a new home, shop for your financing. Know what is available to you.
Photo credit: 3D Realty Handshake @ http://www.flickr.com/photos/lumaxart/2136953043/
Valerie Zinger ~ Ottawa, Canada ~ Ph. 613-723-5300 ~ Email vzinger@royallepage.ca
New Identification Requirements for Home Buyers and Sellers in Canada
On June 23, 2008, new federal money laundering and anti-terrorits financing regulations came into effect. These require real estate agents and brokers (amongst others) to collect and keep personal identification from buyers and sellers.
Realtors have been required to report any suspicious or large cash financial transactions of $10,000 or greater since 
2001. This year the regulations, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, have been changed to increase the reporting. Real estate agents and brokers are now required to document personal information and proof of identity of their clients in each and every transaction. This includes corporations and purchasers in another city, province or country. If the buyer or seller is not represented by a realtor, the agent for the buyer or seller is required to obtain the personal information and identification of the other party.
What will the real estate agent need for information? Using a government issued document, such as passport, drivers license or residency card, the agent will record date of birth and occupation. The law requires the agent to keep the information for a period of five years.
There is a lot of paperwork involved in buying and selling a home. The forms needed for this information will be part of the package you complete.
For additional information on these and other requirements, please go to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) or call 1-866-346-8722.
Phot credit: Dreaming of Diamonds @ http://www.flickr.com/photos/swamibu/1182138940/
Happy Canada Day - July 1, 2008
It is a blessing to live in this wonderful country. I am a proud Canadian. There is so much to love from sea to sea to sea. Just once in everyone’s lifetime, it would be wonderful to come to Ottawa and enjoy the day long celebrations. It makes you shiver to be in the crowd, enjoy the entertainment, see our glamourous Governor General and hear the speeches. The fireworks are awesome. It is Canada’s 141st birthday. This is Canada. We stand on guard for thee.
HAPPY BIRTHDAY, CANADA!
Ottawa House Hunting On Sunday
Sunday is Open House Day in Ottawa.
Seek and ye shall find. There are several sources for you to find out where Open Houses will occur. The Ottawa Real Estate Board site provides a list of all scheduled open houses for homes listed through MLS. This table can be sorted by each category so that you can narrow your Sunday Shopping by price, location, street, etc. Other sources include the Saturday edition of the Ottawa Citizen and listings in the Real Estate Guide, a free publication available in many real estate offices and 700 locations around the city. While most Open Houses are held on Sunday from 2:00 - 4:00 PM, there are a few held on Saturdays and some that are held at other times on Sunday. Look for the listing and for the signs in your shopping area.
Knock and the door shall be opened. This is your opportunity to view an number of homes in a two hour period by yourself or with me, your realtor. Most often, clients will view homes on their own and return for a more thorough look with their realtor. It is amazing how many homes you can see in 2 hours. If you are going for the first impression, the real “Can I live here?” inspection comes later. Make notes on those places you want to see again.
Ask and it shall be given. The hosting realtor most often represents the seller. He or she is there to help answer your questions about the house, the local market and community. You can buy directly from this realtor, if you do not have your own. If you do not have a realtor (which should be me, now that you have seen my website and know a bit about me), going to Open Houses provides you with an opportunity to meet a number of people and decide who you would like to represent you in buying a house, selling your current home or both. Ask me for my business card and we can set up an appointment.
I encourage you to view Open Houses.
Photo credit: Woman door knocker on wood door at http://flickr.com/photos/monceau/270320617/
Valerie Zinger ~ Ph. 613-723-5300 ~ vzinger@royallepage.ca
Ottawa Melt Down as Market Heats Up
We are getting record breaking snowfalls that may lead to some flooding This is happening just as the Ottawa housing market is heating up. You will want to ensure that you are protecting your housing investment.
To reduce the likelihood of flood damage in your home the Public Safety Agency of Canada recommends that you:
- Put weather protection sealant around basement windows and the base of ground-level doors.
- Install the drainage for downspouts a sufficient distance from your home to ensure that water moves away from the building.
- Consider installing a sump pump and zero reverse flow valves in basement floor drains.
Based upon my personal experience, a sump pump seems to click on and off at peculiar times. It is not right during the thaw or during the rain storm. The pump kicks in when the water has infiltrated far enough into the ground to get near the sump pump / basement drainage hole. Sometimes that takes days. Now, after you are accustomed to hearing the pump go on and off at all hours, you will have to remember - it is not the sound of the pump but the absence of sound that indicates that you might be having a problem. Check out your pump from time to time to ensure that it has not failed. When living in Winnipeg, we found water around the edge of the basement in the lowest corner - where the floor and the walls met - because the sump pump had failed. Lesson learned. Right after that we had 2 pumps (an heir and a spare) and started listening for the absence of sound.
Protect your investment. Go to the Public Safety website and find out what more you can do. Your house will be easier to sell if it is dry and there is evidence that you are taking care of it.
Photo credit: PA030014 on Flickr http://flickr.com/photos/mtneer_man/751152855/
Valerie Zinger ~ Ph. 613-723-5300 ~ Email: vzinger@royallepage.ca
The $100 House Tip for March 5, 2008, in Ottawa Canada
This bouquet is for Gus.
I just wrote a cheque for $99.75 to Gus-N-Air Systems Ltd. for a home visit. This morning the furnace stopped and it was not until the house got to 18 degrees that I realized that there was no forced warm air coming through the vents. I called Gus at 613-823-0523. Despite the snow storm and the terrible road conditions, Gus and his wife were here within 2 hours. After looking at the furnace, he said that everything was fine BUT no fresh air was coming into the furnace to allow for combustion. What??? So we trooped out of the house and yes, the three black plastic pipes were covered in snow.
Pipe 1 - Hot water tank exhaust pipe was visible but getting close to being covered. Pipe2 - Gas Furnance exhaust pipe was like the hot water tank pipe BUT Pipe 3 - the fresh air intake for the gas furnace under 12 inches of snow with a plug of ice at the mouth of the pipe. I got out the shovels and, with Gus’s help, we dug down to remove the snow. It was literally that deep. When the snow was removed, the furnace finally was getting air and everything is back on track.
My $100 hint for today is to check that snow is not covering your furnance and hot water exhaust and intake pipes. These used to be on the roof of houses. Newer houses have the pipes on the exterior side of the house near ground level and closest to the side of the house where the furnace is located. Remove the snow around your pipes and your gas meter.
Bless Gus. Thank you.
Valerie Zinger~Ph. 613-723-5300 ~ Email: vzinger@royallepage.ca
Enjoy Ottawa - Winterlude
Strap on your skates. Ottawa is in the middle of Winterlude - February 1 - 17,2008. Now is the time to skate along the Rideau Canal Skateway. Thousands of people get out during the week and weekends to skate along the canal, stopping from time to time to sip hot drinks and maybe, if you are lucky, top up your calorie count with a Beaver Tail. This deep fried dough delicacy is part of being on the Canal. Skate a bit, eat a bit. For those who don’t skate, a walk along the edge of the Skateway is a refreshing alternative and puts you right in the middle of the action.
More than being on the Canal. There are events, snow kingdoms for the children and ice sculptures to see. The full schedule for Winterlude is available on the National Capital Commission site.
Make it your neighbourhood. When you are out celebrating winter, take a look at the neighbourhoods that surround the Winterlude sites - Dows Lake, Old Ottawa South, the Glebe and the Golden Triangle just to name a few.
Imagine not having to drive to the Canal to start your skate!
Valerie Zinger ~ 613-723-5300 ~ vzinger@royallepage.ca
Outing Ottawa Grow-Ops
A really good thing is happening in Ottawa. We finally have a police registry for grow-up locations. You want to be happy with your new home and be a savvy buyer. The following article is not to scare you but to caution you so that you can “smoke out” grow-op homes and use that information in your decision-making process.
50 A Year. There are marijuana grow operations and clandestine crystal meth labs being run in Ottawa homes. Each year, the Ottawa Police Service uncovers approximately 50 of these operations. Later these homes are sold, sometimes without the purchaser knowing the house’s history.
The Registry. On February 1, 2008, the Ottawa Police Department began publishing a registry of addresses of former grow-ops and labs. Three locations were cited on its first day. Two of these locations were linked to Google maps so that the reader more accurately could determine the locations.
The Damage. As a buyer, you need to be apprehensive about the former use of a house or condo as a grow-op or crystal meth lab. Concerns fall into two categories - air quality and structural integrity. For example, while the house is being used for the hydroponic growth of plants, the possibility of mould increases substantially. Off-gas from a crytal meth lab may have long term implications for air quality as the chemicals saturate the building. To access electricity illegally and extensively, the operator may have drilled through the foundation to access hydro and may also have rewired the house. One assumes, of course, that that rewiring occurred without permits.
See for yourself. If you are interested in seeing what kind of damage can occur, Mike Holmes did an episode called Gone to Pot. The photos from the house in question are available on Mike’s site.
Assess the damage. Damages can be repaired. What you, the buyer will want to know is the extent of the damage and the cost to remedy the situation. If you continue to want to buy, your offer should reflect what you, your real estate sale professional and your contractor have determined as risks and costs.
Where to see the list. The Ottawa Police Service have a website with the registry and additional information and photos of grow-ups and crystal meth labs.
Valerie Zinger
Ottawa Real Estate Today
Phone: 613-723-5300
Email: vzinger@royallepage.ca
Working to Meet Your Needs
This site will be under development as I design it to meet your needs.
Look for changes in the next few weeks. I look forward to offering you ideas, perspectives, information, and news you can use to help you navigate through the process of buying or selling your home in Ottawa.
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Welcome
My name is Valerie Zinger. I am a Realtor in Ottawa. I look forward to listing your property or helping you find your home.
Phone: 613-723-5300 Click here to contact Valerie by Email at:
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