Calvin & Barbara Carr

According to a BMO survey more than half of Canadians would consider a shorter term for their mortgages in order to save on interest costs in the long run. Those aged 35 to 44 were the most open to shorter amortizations, with 77% saying it was something they would consider. The survey also found 70% of families with children would consider shorter amortizations, compared with 48% of those without children.

To curb excessive borrowing, effective March 18th 2011 the government is cutting the maximum length of time a mortgage can be taken out with government insurance from 35 years to 30 years. Longer time spans means initial mortgage payments are lower, but the homeowner ends up paying much more over the life of the loan.

“For example, on a $250,000 mortgage at 6% interest rate, moving from a 30 year to a 25 year amortization period can save upwards of $55,000 in interest, which can be put directly towards your retirement,” said Katie Archdekin, head of mortgage products with BMO Bank of Montreal. "But your payment would change from $1,487.06 a month to $1,599.52... Or for only a $100 a month more, you can save THOUSANDS over the life of your mortgage."

The BMO poll also found 62% of men were more likely to consider shorter amortizations, compared with 50% of women. BMO Economics expects the Bank of Canada to begin raising its interest rates in summer, moving from 1% to 2% by year-end.

Both TD Canada Trust and CIBC introduced quarter-point hikes to their benchmark five-year closed mortgage rates last week. The going fixed rate is now 5.44%, though both banks are offering lower promotional rates. (Gord's best rates show 3.79%)

Contributed by:
Gord Shepherd
Mortgage Broker
Invis, Okanagan Valley, BC
Website: http://okapprovedmortgages.com Office: 250-717-6838
Opinions are those of the author and may not reflect those of Invis.

Mid February already and Valentines buying is in full force! Even our almost 3 year old granddaughter blurted out last night that she wants a Valentines cake??? The power of advertising!

So how do we make sense of “advertising” surrounding the housing market? Is it time to list? Time to start looking to buy? The question many of our buyers ask us at this time of year is - will the homes coming onto the market in the Spring be listed on average at lower or higher pricing than the current inventory? Should they wait to see what new homes will come on as there will be more choice; or if newly listed homes come on to the market at a higher price is it better for them to purchase now before prices go up?

Looking at the actively listed homes for 1st of February versus 1st of January, we find that average pricing is almost across the board down in the different sub-areas around town. Not by much, but it is a downward trend rather than an upward one. This may be due to the fact that some homes being listing now were previously listed at a higher price but did not sell, so are coming back on market at reduced rates to attract  buyers to purchase.

It also can be a reflection that the Sellers who list now before the grass is green and the flowers are blooming, are perhaps the more serious sellers who do want quick sales activity on their homes.

Either way, we do know that adjusting the mortgage amortization periods to 30 years from 35, plus the announcement that most banks have increased their 5 year rates this week, is certainly prompting buyers to lock in their mortgage rates now. Therefore sellers who are currently on the market are starting to see offers happening.

Please feel welcome to call us at 250-503-3461, toll free 1-888-225-2277 and book a time to chat about where your home would fit in current market pricing and give you instant access to new listings and price changes of homes on the market.

We hope you find the MLS® real estate statistics we've provided below useful. We have compiled many more detailed reports for the Vernon, BC area and we'd be happy to send you a copy. There is no cost or obligation for this valuable information, just e-mail us your request or call us at the numbers above.

The first report shows Vernon and area Single Family Homes actively listed for sale on the MLS® as at February 1, 2011 grouped by sub-area.

Below is a comparison of MLS® properties sold in the last 6 months vs those sold during the same period a year ago.

When purchasing a home in British Columbia some people may not be aware that there is a Property Transfer Tax or “Land Registration Tax” when an application is made to register changes to a certificate of Title. This is based on fair market value which is the price that would be paid by a willing purchaser to a willing seller in the open market on the date of registration.

This can have many implications – for example in the case of a divorce where one partner transfers the title of the house into the other partners name or, Purchasers of Pre-sale new housing units such as condo/ townhome developments that pre-purchase at an initial price but the actual purchase price will differ when they add extras for finishing.

Certain Transactions are taxable. Most commonly they apply when you purchase a home in BC and register it in your name but other transactions may also apply.

These can include:

• buying a home and registering it in your name
• a right to purchase such as an agreement for sale
• a foreclosure
• and others

Currently the tax rate is 1% on the first $200,000 of the fair market value of the property, plus 2% on the fair market value over $200,000.

For example, if the fair market value of the property is $150,000 the tax is 1% of $150,000 or $1,500 payable tax.

If the property's fair market value is $450,000 the tax is 1% of $200,000 (equaling $2,000) plus 2% of the remaining $250,000 (equaling $5,000) for a total tax of $7,000.

Some Transactions may be exempt:

• such as the transfer of property between spouses in the breakdown of a marriage,
• first time Home Buyers,
• Leases and options to lease of less than 30 years
• Transfers of reserve or surrendered land, or to the Nisga'a Nation
• & transfers to registered charities.

For full details on the BC Property Transfer Tax and its possible implications on your property purchase in British Columbia you can visit the BC Government website at:

http://www.sbr.gov.bc.ca/individuals/Property_Taxes/Property_Transfer_Tax/ptt.htm

or follow the link at VernonHomesForSale.net for these and more frequently asked questions about Real Estate Home Buying and Home Selling in the Vernon – Okanagan areas of BC

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Calvin & Barbara Carr Real Estate Team

www.barbaracarr.ca

When is the Time to Buy?

We have been bombarded by media with all sorts of conflicting statistics on what has been happening to the housing market. We ask the question, "When is the time to buy?"

Here are some statistics for how much of an impact home sales contribute to the economy...

BC recorded 102,892 MLS residential sales for 2007 contributing:

• $4.3 billion to economic output
• $2 billion to Provincial gross domestic product
• 28,800 full time equivalent jobs were needed to service these sales
• $1.3 billion in BC household income
• $300 million in federal taxes
• $680 million in provincial taxes
• $33 million in municipal taxes

Wow! Let's look at some other statistics for the North Okanagan comparing the first 10 months of 2007 to the first 10 months of 2008.

Residential sales 2007 2008

No. of Sales 2023 1241 61% of sales

Average Price $355,519.53 $379,799.40 up 6.8% in average sale price

How about a smaller section and comparing relatively same homes (very few new housing stats) in the sub area of East Hill in Vernon

Residential sales 2007 2008

No. of Sales 181 126 67% of sales

Average Price $355,455.80 $395,833.33 up 11% in average sale price

Now we know that many factors contribute to statistical data but this may offset some of the negative media coverage. We are seeing a number of homes come off the market as we enter the winter season so the balance of sellers to buyers may start to tip back closer to what we have seen in the market for the past few years. It still is a great time for buyers with inventory available and for sellers who are seriously looking to sell.

Barbara Carr