Carol Palfrey Associate Broker " The Eastside is my Neighbourhood "

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Cell:1 (604) 818-7422
Office :1 (604) 263-1911
Mailing Address:
4387 Main Street
Vancouver, BC
V5V 3R1 Canada

ARE YOU PLANNING TO BUY A HOUSE OVER $500K?

 

If so, you need to be aware that the down payment rules are changing as of February 15th, 2016. The most recent change to the mortgage rules requires people to put a larger down payment on property priced between $500,000 and $999,999.  Purchases over $1M require at least 20% down with most lenders requiring even larger down payments for purchase prices over $1.25M.

 

In Canada, all loans with less than 20% down payment require mortgage Insurance. By changing the guidelines for insured mortgages, the effect encompasses all lenders.

For purchases of $500,000 or below, a 5% down payment is still possible.  For purchases over $500,000, the down payment requirement gradually increases as 10% is required for the portion over $500,000.  For example, a $550,000 purchase will require $25,000 for the first $500,000 and $5,000 for the remaining $50,000. This is $5,000 more than previously required.

 

The old policies will remain in effect for files approved prior to February.. As most lenders hold rates for between 90 and 120 days, the actual completion date can extend to June.    

 

In our opinion, the silver lining here is that the government appears to feel they are not in a position to increase rates enough to slow down the market. For existing and new borrowers, this hints to continued low interest rates.

 

Here are a few examples of the new down payment requirements:

 

$500,000 ............ $25,000 ............... 5.00%

$550,000 ............ $30,000 ............... 5.45%

$600,000 ............ $35,000 ............... 5.83%

$650,000 ............ $40,000 ............... 6.15%

$700,000 ............ $45,000 ............... 6.43%

$750,000 ............ $50,000 ............... 6.67%

$800,000 ............ $55,000 ............... 6.88%

$850,000 ............ $60,000 ............... 7.06%

$900,000 ............ $65,000 ............... 7.23%

$950,000 ............ $70,000 ............... 7.37%

$999,999 ............ $74,999 ............... 7.50%

 

 

 
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Last February I listed 1871 Stainsbury in the Works building. This is in the Victoria area of East Vancouver  and close to Trout Lake. This was a lovely townhouse 2 bedroom 1 bath. This sold in 4 days for $424,000.

 

This February 1839 Stainsbury was listed and sold in 4 days. A larger townhouse at 764 sq ft 2 bedroom 2 bath. The list price was $449,000 and it sold for $460,000. 

 

The market has been competitive so far this year and I don't see there being any less competition.

 

I am asked by buyers all the time how to win out in competing offers, well there is no way of telling what other bidders will bid, so you need to make your offer as attractive as possible.  

 

Some ways to be a step ahead in making an offer on a condo or townhouse:

 

Consider reading all the minutes before submitting your offer, if you can, do not put this subject in your offer. 

 

Have your financing approved before you submit your offer. Financing is the weakest subject you can have in your offer. To be competitive have your financing approved so you dont have to have this subject. 

 

Is it possible to do an inspection before you submit your offer? I would only recommend this if you plan to submit a subject free offer. To spend the $500 dollars and not be the successful offer is frustrating and expensive. 

 

What dates do the sellers want? By accommodating the sellers your offer will be more attractive. 

 

Karley Rice of Macdonald Realty  has just listed a Townhouse for sale at the Works. 133 1863 Stainsbury. 1238 sq ft. 3 bedroom 2 bathroom asking $675,000. There is an open house on Sunday March 8th 2-4 pm. I expect this one to sell very quickly. 

 

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