10 Feb

What Else Did the Finance Department Change on October 17th?


Posted by: Bonnie Barker

As the dust is settling on the major changes to the mortgage qualifying rate and it is back to work as usual, some Canadians are starting to realize that there were some other significant changes that affect us all.

Starting this year you must now declare which property is your principal residence. There will be a form with your tax return that you must fill out. The purpose of this of course to make sure that the house flippers of the world pay their fair share of income tax on monies earned by buying and selling homes. This will also affect foreign owners, when they sell property in Canada, even though a family member may have lived in it they will now pay capital gains. They are closing some rather large loopholes in the system where many people have taken unfair advantage.

Another point that was probably missed by most is that if you have a home with a legal suite, when you sell the home you will have to pay capital gains on the portion that is rental. Many of these suites collect rent that is never reported to CRA and people avoid taxes by just pocketing the money. For many years now if you collected rent but didn’t report it on your taxes then you were not allowed to use it as income to apply for a mortgage.

This may also open up another legal/accounting question for parents that co-sign on their children’s mortgages. In Alberta at least when you co-sign you are usually on the mortgage and on title. Will it mean that when that home is sold will there be legal and tax ramifications when the home is sold.

Lots of unanswered questions on that subject that you will need to consult your accountant and your Dominion Lending Centres mortgage professional about before proceeding.

10 Feb

So, What Is An Unregulated Mortgage?


Posted by: Bonnie Barker

Lately in the news we have seen several articles on major mortgage fraud happening in different parts of the country. Many of these cases involved unregulated mortgages and they are the source of most of the complaints to the governing bodies in each province. Consumer education on the different types of mortgage lenders is very hard to find as is who you should complain to about a possible fraudulent situation.

First off, the only unregulated lending of money for mortgages is when a private individual lends their own money for the purpose of funding a mortgage on a property. There is no governing body on this transaction other than common law and the individual is at risk on both sides and should have at the very least have independent legal advice (ILA). If the borrower defaults – the lender forecloses. If there are other disputes between them, then it becomes a civil matter.

Mortgage Investment Corporations (MIC) are pools of money that are governed by securities commissions in most provinces and are under stringent guidelines when it comes to where and whose money they can lend and how much of an individual’s money can be lent. Rules of disclosure and accountability are monitored by the regulator or securities commission and of course by the investors whom they report to on a yearly basis.

Syndicated mortgages is a situation where two or more investor pool their money to invest in one property. Syndicated mortgages are registered on title with all of the investors named on them, unlike a MIC which would just be the MIC on title. These are heavily monitored and regulated by the securities commission as you need a securities license to deal in syndicated mortgages as an investment tool. This also falls under the guidelines that you must be a sophisticated investor to lend your money in this fashion.

Monoline lenders are lenders who deal just in mortgages, they source their business through the mortgage broker industry and buy and sell their mortgages to the banks. Although heavily regulated by the Office of the Superintendent of Financial Institutions (OSFI), they are sometimes considered “shadow banking” even though they fall under the same guidelines as the banks.

Mortgage Brokers act in many different ways to help facilitate mortgages. First and foremost they act in three ways.

  • One they can act as an intermediary meaning they take your information and find a lender that meets your needs in this case it is up to you to decide if that mortgage is best for you.
  • Secondly they can act as your representative and then they must act in your best interest and find you the best deal for your situation.
  • Third if they are dealing with private individuals to lend their money they then have to disclose that they are representing that lender and you as a consumer need to seek outside advice. This is all governed by the real estate act in each province and either the securities commission or the real estate councils.

Banks of course are governed by the bank act and OSFI and their books are audited on a regular basis to ensure they have enough money to lend from taking in your monthly deposits and savings.

So I’m not sure who is unregulated because as far as I can see mortgages are regulated up the wazoo and the only unregulated scenario is when the lender is a private individual lending their own money to an individual. So when all is said and done, if you need more advice on mortgages, contact the mortgage professionals at Dominion Lending Centres.

10 Feb

New Mortgage Rules and Their Impact

Latest News

Posted by: Bonnie Barker

A short time ago Canada Mortgage and Housing Corporation (CMHC) changed the rules on how much down payment buyers have to have in place to buy a home worth more than $500,000. The new rules stated that you have to have 5% on the first $500,000 and 10% on the remaining balance up to $999,999. After that point they require 20% but that’s another article altogether.

With the recent changes, they also allowed for the use of 100% offset should the home have a legal suite. This was great news for some parts of the country as housing costs increased over the million dollars in prices in Vancouver and Toronto. Does it have much effect on other parts of the country?

Recent numbers would say no. With housing prices in the west decreasing just about everywhere else but Vancouver, the average Canadian first time buyer will not likely apply for a mortgage that is in this price range. The idea of wanting the big home as the first home is something that first time buyers will not be doing. Even in the Vancouver markets, the buyer for the million plus property is most likely a move up buyer.

I look at my own nephews and nieces and they have bought closer to their lifestyles. My niece in Vancouver, who is a single young professional, chose more the loft style home and while living in 400 sq ft. is foreign to most of us, it is a choice she had to make to be in downtown Vancouver and able to walk to work.

Probably where we have seen the biggest impact of these new rules is in Ft McMurray, AB. While prices are down  in Ft McMurray, there are still a lot of homes that are in the $850,000 to $900,000 range – most built during the boom times with full legal suites.

I recently had a file that was in the $900,000 price range with a full legal suite. While the clients had the required down payment of 5% and 10% on the balance of the mortgage, the lender decided they wanted 20% down on the property even though CMHC had said yes to the mortgage. I’m sure this is happening in more than one location across Canada especially in areas where the prices have been fluctuating up and down over the last few years.

With ever changing markets and regulations, be sure to get advice from your Dominion Lending Centres mortgage professional before you buy your dream home.

10 Feb

3 Steps to Keep Your Credit In Check


Posted by: Bonnie Barker

If you have have overextended yourself with credit card debt, or have consolidated all of your consumer debt into your mortgage, or are at the point where you just want to cancel your credit cards, we have the 3 steps for you to follow to get your credit back in check.


It may seem tempting, but money lenders want to see that you can handle your credit responsibly. Instead keep your 2 oldest credit cards (trade lines). The longer you have had your trade line, the better it is for your credit.

  1. FOLLOW THE 2/2/2 RULE

The 2/2/2 rule means that money lenders what to see 2 trade lines, for 2 years with a minimum of a $2,000 limit. These cards need to be paid on time each month, and they also need to stay within that $2,000 limit!


The 2 trade lines you keep need to be actively in use. If you are concerned about consumer debt, then have a monthly bill such as your cell phone, cable, or even Netflix charge billed to your credit card. Then have that credit card paid automatically each month from your bank account.

Follow these steps to keep your credit in check and growing.  When it is time to renew or revamp your mortgage, or purchase a new home, your credit won’t hold you back—And you can bet Dominion Lending Centres is here to help you get the sharpest rate and the best product.

10 Feb

RRSP’s For Your Down Payment??

Mortgage Tips

Posted by: Bonnie Barker

Are you a first time home buyer and looking to use your RRSP’s as a down payment? Here’s a few things you need to know:

1. To use this program you must have not owned a home in the last 4 years but did you know that if your spouse owned a home previously and you didn’t live in the house then you may still qualify.

2. RRSP contributions need to be in the RRSP account for at least 90 days before they can be used. If you are a monthly contributor to the account then only the amounts there for more than 90 days can be used for down payment.

3. You can borrow money to put into an RRSP and have it be there 90 days to use for down payment. Using this method of acquiring the RRSP means that you must be sure of two things, one being that the lender is ok with you taking it out in 90 days. Secondly that it isn’t put into an account that will not have fees to take the money out, money market funds or simple 90 day term certificates shouldn’t cost you any penalty.

4. You can withdraw up to 25000 dollars from your RRSP to put down on a home. Locked in LIRA’s are not eligible for this program so make sure before you start down this path that you know what type of account you have your money located in at the bank.

5. You have to pay the amount you borrowed back to the RRSP account over the next 15 years. If you took 15000 dollars out you would need to repay $1,000 a year to the account. Failing to pay this money back may result in CRA taxing it as income.

6. You can contribute to your 2016 RRSP up until March 1st and receive a tax deduction for the contribution, this also applies if you borrowed the money to contribute. Theoretically you can also take the tax refund and apply it back to the loan or use it for your new home.

Contact your local Dominion Lending Centres mortgage professional so we help you take advantage of this opportunity to enter the home owners market…We’ve got a mortgage for that!