Buying A Home In Canada? Know About Mortgage Stress Test

If you are planning to buy a home in Canada, you are probably taking a mortgage. Before you take the plunge, it is important to be aware of the Mortgage Stress Test, a legal requirement in Canada.

What is a mortgage stress test?

A Canada Mortgage Stress Test 2021 is a way of determining how much you can afford to pay and under what circumstances. You can find an elaborate review here.

Most often, a stress test involves modeling a worst-case scenario before an investment is made. It tests your ability to withstand interest hike rates with a proper financial bandwidth. Implemented by the Canada Mortgage and Housing Corporation (CMHC), the stress test requires you to qualify for a mortgage at a higher interest rate than what you actually pay. Nowadays, the rules for stress tests are stricter than before. Previously, the qualifying interest rate was 4.79%. But as of June 2021, the rate has gone up to 5.25%.

How does a stress test work?

When you apply for a mortgage, your bank will check if you have the financial ability to repay it even if your mortgage rate rises during the mortgage term. During this process, they look at your ability to make payments based on The Bank of Canada qualifying rate. This rate is based on the average of posted five-year fixed rates from Canada’s biggest banks.

What this essentially means is this: You need a high income and an existing low debt to be able to pay your mortgage at a higher rate. To help you understand the stress test, we’ve created an example with hypothetical numbers.

Let’s say you are planning to buy a house that costs $500,000. You can afford a 5% ($25,000) down payment, and you are getting an additional 15% ($75,000) down payment support. This leaves you with a mortgage requirement of $400,000.

As per the current stress test rate, to qualify for a mortgage of this amount, you need to earn an income of roughly $107,000. It is the Canadian government’s way of ensuring you can afford to pay your mortgage even if the rate fluctuates.

Mortgage Stress Test: Important Points To Note

  • The stress test applies to uninsured mortgages where you make a down payment of 20% to avoid CMHC insurance.
  • Insured mortgages with less than 20% down payment are not subjected to stress tests.
  • Credit unions are not required to use the stress test when qualifying loans.
  • The stress test is not applicable for mortgages that are renewed with your existing lender.
  • If you’ve already received approval, the new stress test rules will not affect your mortgage.

The Bottom Line

It is safer to assume that your mortgage rates will increase in the future. Especially if you’ve opted for a Variable Rate Mortgage which is attached to your prime rate. In such cases, even the slightest increase in rate will affect your mortgage payment. You may be safer with a fixed-rate mortgage, but you could face a rate increase when your mortgage comes up for renewal.

Top Tips To Renew Your Mortgage

Have you taken a mortgage? If so, you need to renew it at least once before you pay it off. What is a mortgage renewal? It is the process of renewing the outside balance of your mortgage for another term at a new mortgage rate. If you are lucky, your mortgage lender might renew it for a lesser rate. Click here to find out our rates.

Sometimes, you may not have a maturity date, which is the date your mortgage terms end. In such instances, your lender will send you a renewal slip, reminding you to renew your mortgage. You can find out more about these processes right here.

However, the ideal thing to do when you take a mortgage is to be proactive about these procedures. Here are some proven tips to keep your mortgage renewal up-to-date:

  • Review your mortgage requirements

One of the first things to do before signing your mortgage agreement is to list why you need a mortgage and your financial goals. You may want to consider factors like an inheritance which can affect your prepayment options. You also need to ensure if your lender can provide the mortgage amount you require.

Another important point to consider is your mortgage time. How fast can you renew your mortgage? It is better to opt for short-term plans if there’s a chance to move to a new city. Such factors will simplify your mortgage renewal process when the time comes.

  • Make early renewals

You don’t have to wait until your mortgage maturity date to renew it. You can renew it even if there are 120 days to the maturity date. Of course, your lender will send you a reminder in the last thirty days of your mortgage term. However, if you are financially ready, you can ring in your renewal much earlier.

Early renewal will buy you enough time to look for other providers if you cannot come to a mutual agreement with your current lender. Although you cannot make the switch until the maturity date, it will give you and your provider the time to negotiate and settle with the most amicable terms. You can also get all the paperwork ready to avoid last-minute work and anxiety.

  • Lock in a rate hold

Rather than doing all the work yourself, seek the professional guidance of a mortgage broker. They can analyze your credit card reports and find lenders who align with your requirements. They can also pinpoint your qualifying rate if you choose to switch lenders. However, if you cannot decide, you can ask your mortgage broker for a rate hold. A rate hold will protect you from incurring an interest spike for up to 120 days. It will also help you lock in the rate before your mortgage comes up for renewal.

  • Take time to switch lenders.

If you decide to switch lenders, there’s one thing you should do as early as possible: Start applying for a remortgage. You should provide all the information such as:

  • Proof of house ownership
  • Proof of property insurance
  • Proof of income
  • Copy of your mortgage renewal letter

Your mortgage broker will take time to process your application. So, rather than doing this at the last moment, ensure you have plenty of leeway between the application and your renewal date. You must do this on time if you don’t want to stick with your current lender.

The bottom line

Mortgage renewal is not a difficult process. However, just signing the renewal slip and sending it back to your current lender will not give you the best mortgage rate. As you implement these tips, you must also do in-depth research to find the best mortgage broker. And then, you can rest assured to find the best lender and mortgage rates ideal for you.

How To Maintain And Clean Siding?

How Often Should You Clean Your Siding?

Exterior siding is a great option for maintaining the exterior appearance of your house attractive. It offers curb appeal and protects from the elements. Maintaining the exterior siding of your house is a great way to improve the appearance of your home, and it avoids any costly repairs down the line. With a little maintenance, you can extend the lifespan of your siding up to 50 years.Cleaning the exterior siding of your house is recommended at least twice per year. Your siding’s lifespan may be affected by the build-up of dirt, cobwebs, and mildew. A Clean home will protect the sliding and your investment.

How Do You Clean Siding Of All Types?

Although it may seem dangerous to clean your siding, it is necessary only once or twice per year. A thorough cleaning is necessary to remove all siding residue. Here are some tips to help you do it right.

Inspect Siding For Cracks Or Damage:

Before cleaning, take a quick walk around your house to check for cracks or damage like chipped paint, cracked boards, and other flaws. If you have cracks, water may seep into your home. It can cause serious damage and other problems.

Buy A Power Washer

Power washers are essential to reach the highest places of your home, such as the roof, and it forces away dirt and grime. The process is also much quicker than hand washing your siding. It is especially true for exterior siding made of vinyl or wood.

Use Trisodium Phosphate (TSP) To Clean The Siding.

Mix half a cup of tsp with a gallon of water. Apply the solution to a sponge or washcloth. Start by cleaning the hard-to-reach areas where spiders or birds have left their droppings. These are the most difficult things to clean off your siding! To avoid streaks, work your way up to the top and rinse thoroughly.You can find the full list here of the guidelines regarding cleaning the sidings.

Maintenance

Your siding type will determine the type of maintenance you do and how often you need to do it. These are some tips to ensure your siding looks great and provides protection for many years.

Wood Siding:

Cedar siding is a popular choice for exterior siding. It has a natural, beautiful look that many homeowners love. Wood can be damaged by weather, pests, and general wear and tear. Make sure it stays in good condition by checking it every six months and re-treating it every two to 5 years. It would help if you also cleaned it once a month.

Vinyl Siding
This siding is an economical and reliable exterior siding option suitable for rental properties and starter homes. Maintaining the vinyl siding can be done by inspecting it regularly, washing it once per year, cleaning it, and painting it as needed.

Steel Siding:

Steel siding is a popular choice for homeowners due to its durability. Steel siding is versatile and is available in many different textures and colors. Keeping it clean is possible by checking for scratches and washing it once per year. If desired, you can also paint it.

It is possible to save thousands of dollars by maintaining a clean home and performing regular maintenance.

A Complete Guide To HST/GST

A sales tax will be added to the purchase price of a newly constructed or renovated house. The sales tax consists of two parts: a federal and a provincial part. Some provinces keep these portions separate, while others combine them to create the Harmonized Sales Tax. The GST/HST rebates allow you to claim a portion of the federal tax component, also known as the Goods and Services Tax (GST), and in certain provinces, there are also rebate for the provincial tax part. You might want to use a Rebate Calculator to know the exact rebate amount before submitting the application form.

Eligibility For The GST/HST Home Housing Discount Credit

You might be eligible for the federal or provincial rebate, only federal rebate, or only provincial rebate, depending upon your conditions and the province. You may receive a rebate on your new home if you are someone who-

  • Have purchased a newly built or significantly remodelled residential property to be used as housing, and it is located on land you bought or land you will give for lease for more than 20 years.
  • Have bought shares in a cooperative housing unit that you or your partner can use as your primary residence within a new building or one substantially renovated.
  • Have renovated your home heavily. That means that more than 90% of the interior must be removed or replaced.

In addition to the traditional housing types, mobile houses and floating homes are eligible for the rebate. The rebate is not available to corporations and partnerships. You can find out more about the GST/HST related news, which can help you calculate rebates.

How Much GST/HST Rebate Can You Claim?

If all requirements are met, a renovated or newly constructed house which will be used as the primary residence for the person or their family may be eligible to receive a GST/HST rebate. A company or partnership is ineligible for receiving the new housing rate.

How To Apply For The Hst/GST New House Rebate:

You must submit two forms to apply for HST/GST rebate. One that calculates your GST rebate, and the other one is an application form. If you reside in one of these provinces, like Ontario, British Columbia, or Nova Scotia, you must submit an additional form. Note that you need to submit the forms to the listed tax centres on the government’s site.

While you are not required to provide supporting documentation, you might be asked to produce evidence of occupancy or invoices. After submitting your application, you will receive your money in six months. Remember that the deadline to apply is usually two years from the base dates mentioned on the forms.

5 Reasons to Build a Green Commercial Building

Being Earth-accommodating has gotten something other than a prevailing fashion, it’s a genuine development. An ever increasing number of individuals are acknowledging that it is so imperative to be kinder to the planet. This development has even ventured to such an extreme as to incorporate business and places of business. Green development uses present day planner plans just as green and additionally reused materials. Your profit from speculation is just about 10 focuses higher than a standard structure, and who wouldn’t need that? How about we take a gander at a portion of the reasons it’s all set green.

1. Aiding the nearby economy by making occupations. On the off chance that you choose to practice environmental awareness, you positively will not be separated from everyone else. An expanding number of organizations are requesting green structures and that implies there are more designers and development firms prepared to serve. It additionally implies giving individuals incredible positions with a specialized range of abilities – something that in certain zones is deficient with regards to in any case, to be specific those regions that have not yet emerged from the downturn.

2. Better energy proficiency. Your energy proficiency will most likely be improved by pursuing LEED affirmation over what’s found in a more established structure. At the point when you fabricate green, you can utilize better warming and cooling frameworks because of more current models that are significantly more energy proficient (and more savvy) than more established adaptations.

Present day protection and windows can help keep your workers agreeable without the virus air impacting from a forced air system. That keeps air quality better, as well. Studies have shown a huge decrease in hypersensitivities and lost work time in green structures. Other normal assets are moderated better also, similar to water.

3. Not only for new structures all things considered. You should consider remodeling a current structure. At times, a remodel can improve your structure’s work process productivity, as much as 16%. A structure spread out during the 1960s that highlighted wide work areas and space for typewriters no longer works in our PC loaded climate. At the point when you remodel and consolidate cool reused materials, you not just assistance keep things out of the landfill however you additionally give your office a novel look. It’s a lesser costly alternative than building new.

4. Incredible for attracting clients. Practicing environmental awareness can help take your place of business into the 21st century and set aside you cash simultaneously. This is particularly evident on the off chance that you intend to save the structure for some time. You can likewise utilize your redesigning as a publicizing apparatus. Individuals who are keen on aiding the Earth will be interested by your endeavors. Promoting a green structure whether or not it is new development or a rebuild is something positive.

5. Green isn’t only for the structure development. Did you know there are additionally tax reductions for practicing environmental safety? You can get derivations for an assortment of green structure things. Some government motivators are accessible for things like sun powered boards and other energy choices. Since a green structure costs you less to work, you can give your investors a higher profit each quarter, because of improved benefits.

7 Key Factors Which Impact Real Estate Buying

The land, and real estate markets, are, frequently, ever – evolving! In my, more than 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I have encountered, different levels of, both, Buyers, and Sellers, Markets, just as nonpartisan ones! Numerous variables, both, real, and saw ones, impact, purchasing houses, and business properties, at the same time, the best methodology, for each realtor, just as possible purchaser, is to comprehend, and appreciate, as large numbers of these issues, and so forth, which may affect this commercial center! In view of that, this article will endeavor to, momentarily, consider, analyze, audit, and examine, 7 key elements, which may, altogether, influence purchasing propensities, and so forth

1. By and large economy/financial conditions: How well the present, generally, economy, is performing, in both, real terms, just as seen ones, is a huge factor, in the presentation, and movement, of lodging, and so forth! Likewise, what is anticipated, soon, just as how, purchasers, accept, and feel, it will perform, are, frequently, huge impacts.

2. Work/business security: Those, who accept, they have employer stability, are undeniably more, adept, to purchase a house, than, others! At the point when, numerous individuals have this certainty, this regularly, makes more prominent rivalry, for the houses, accessible, available to be purchased, at that point. Since, valuing, frequently, relies upon Supply and Demand, when there are a larger number of dealers than purchasers, it makes a Buyers Market, and when the quantity of likely purchasers, surpasses, houses, available to be purchased, it regularly, prompts a Sellers Market.

3. Mortgage Interest Rate: We are presently, encountering, verifiably, low, contract loan costs. This makes an interpretation of, by and large, to rising home costs, since, when rates are low, expected mortgage holders, are capable, to buy, more costly homes, and pay a reasonable (for them) regularly scheduled installment.

4. Fears: Our feelings of trepidation are regularly, a significant impact, in whether, we are willing, to settle on a huge choice, in a shrewd, well – considered, convenient way. Particularly in a Buyers Market, idealness, is regularly, a deciding variable, in whether one, can buy, a particular house, particularly, when there are numerous, possible contenders!

5. Needs: When one starts his lodging search, he ought to make an individual needs list, separating between, one’s desire – rundown, and genuine necessities, and so on! Contemplations should include: part size; rooms setups and sizes, number of rooms, kitchen highlights, and so on

6. Organic market: Real domain costs, regularly, are to a great extent subordinate upon, the standards, of Supply and Demand. This decides evaluating, accessibility, decisions/choices, and so on

7. Expenses: Often, the cycle, turns into, about the estimating. The absolute expenses, including down – installments, land charges, contract installments, fundamental saves, and related expenses, and so on, are fundamental, critical elements.