CMHC Makes Dividend Payments to Government: What are They and Who do They Help? + MORE Apr 5th

Obtaining a mortgage or secured line of credit in Canada at the best rates is often a daunting task. We can help! Read the articles below for more info.
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How to Use a Mortgage Calculator + MORE Apr 18th

  Looking at mortgage rates for a new house? Need a mortgage calculator? Canada residents know it’s easy to fall in love with your dream home. But, it helps to factor in the mortgage loan amount and interest rate beforehand. You want to determine how much house you can afford  -  p.... More »
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Should You Apply For a Loan or Line of Credit? Apr 8th

Banks offer a variety of products to give you access to cash. But is every borrowing option the same? If you’re weighing the alternatives, you may struggle with the choice between a loan and line of credit. Only you can decide what’s best for you, but there are some factors to consider..... More »
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Construction Mortgages: What They Are and How to Get One + MORE Apr 24th

Needless to say, building your dream home involves a lot more work as opposed to buying a ready-build – it’s more than just drawing floor plans and picking out counter finishes. Buying a piece of land and constructing your own home from scratch also requires you to get a different type of mortg.... More »

The Latest in Mortgage News: Time to Rethink the Stress Test Apr 21st

The stress test is back in the crosshairs of industry analysts. Earlier this week, CIBC World Markets Deputy Economist Benjamin Tal released a report that attributed an 8% drop in mortgage originations from 2017 to 2018 directly to the federal government’s stress test rules (B-20), which took .... More »
CMHC Makes Dividend Payments to Government: What are They and Who do They Help?
 
Starting in 2017, the Canada Mortgage and Housing Corporation (CMHC) has been making both special and regular dividend payments to its shareholder, the Government of Canada. The largest sum was for $4-billion in June 2017, which was spread over two years. At that time they announced the implementation of a dividend framework, and have been making regular payments.
The framework, they say will ensure that CMHC effectively ‘manages its capital in relation to risk and pays dividends to the government when capital is in excess of levels required to deliver its objectives.’
This does not impact the government deficit as CMHC’s earnings are already consolidated into the government’s accounts.
For their part, CMHC says it continues to hold capital in line with its risk profile and in accordance with OSFI’s regulatory capital requirements.
CMHC is the main insurer of high ratio mortgages in Canada. If you put less than 20 percent down to buy a home, banks want a guarantee that they will still get their money if you were unable to make the payments…

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How to Check Your Credit Score in Canada
 
Your Canadian credit score can make a big impact on your life, whether it’s to get a phone, apartment rental, or mortgage. The best way to get a sense of your credit situation is to get your credit score and credit report, which will give you a window into your full credit history and how it’s affecting you.
Check out our guide below to understand the mechanics of credit scores and reports, and how to make the right choice when buying one for yourself.
What’s the difference between my credit score and a credit report?
A credit report outlines every loan a person has taken out in the last six years. This includes information such as if bills are paid on time, how much is owed, and how close a person is to their credit limit. On a person’s report, R represents revolving debt, and it is rated from 0 (unknown) to nine (bad debt). An R1 rating means a person pays bills within 30 days, or as agreed. All of this credit info remains on a person’s file for at least six years…

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Beware of Mortgage Insurance Double Charges!
We’ve all heard the saying ‘necessary evil’ – something that we need or must have but don’t necessary like. It’s kind of like taking cough syrup that doesn’t taste so good but you know you need it to feel better.
Default mortgage insurance is a necessary evil. Without it, we wouldn’t be able to buy a home with less than a 20% down payment with low interest rates.
But what if you bought a house, paid the CMHC, Genworth or Canada Guaranty insurance… and a few years later you bought a bigger home or refinanced your mortgage for some home renos or debt consolidation?
Do you have to pay mortgage insurance again? If so, how much will this cost?

Financial Planner story gives new meaning to ‘necessary evil’
One of my readers, a Financial Planner, shared an experience with me. (And, I must admit, this isn’t the first time I’ve heard about this happening.) His client had a CMHC-insured mortgage and then later wanted to refinance the mortgage for some home renos… It appears his client was charged FULL CMHC insurance premiums on the entire mortgage, AGAIN!! This just isn’t right! We call this DOUBLE CHARGING!
Lender or Banker ERROR!
An insured mortgage can be refinanced with REDUCED insurance premiums charged ONLY on the NEW funds…

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The Best City for Single Tenants? CMHC Report Reveals Almost Half of Montreal Renters Live Alone
According to a recent study from the Canada Mortgage and Housing Corporation (CMHC), the city of saints and festivals is also the city of renters.
CMHC’s latest Housing Market Insight report found almost half (45 percent) of households in the Greater Montreal area are occupied by tenants, not owners. And, interestingly enough, many of these renters (48 percent) live alone.
The report speaks volumes to the level of affordability in the Quebec census metropolitan area (CMA). Compared to other Canadian city centres, the cost of living in Montreal is relatively low, and about one-third of the renters in Montreal reportedly had incomes below $30,000, before taxes. A late-2018 CMHC rental market report found the average rental price for a one-bedroom apartment was $720, making housing costs fairly affordable for single tenants and those with lower incomes.
The report also revealed that lower-income households moved less often than other households. And when these lower-income households did move, they tended to stay within the area where they already lived…

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Details have been few and far between on the government’s new First-Time Home Buyers Incentive (FTHBI) since it was announced in last month’s budget. But CMHC has finally provided a little more clarification. In a statement released on its website, the Canada Mortgage and Housing Corporation (CHMC), which will administer the FTHBI, acknowledged that, “we […]

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