CMHC Premium Refunds for Energy Efficient Homes: Eco Program

 

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CMHC Eco Program

 

CMHC has introduced their Eco Program: providing premium refunds for energy efficient homes are for clients who are buying a home deemed “energy efficient”.  Clients could be eligible for a 25% refund of their CMHC Insurance Premium!  For some perspective; on a purchase price of $850,000 with minimum down payment of $60,000 the CMHC insurance premium is $31,600. Clients who buy a qualifying property, are eligible for a refund of up to $7900.  For homeowners who are doing renovations that increase energy efficiency, there are also refunds available.

CMHC recently introduced new eligibility criteria for this program, including an updated and expanded list of energy efficiency certifications, and energy efficiency targets based not only on total Energy consumption but also Greenhouse Gas Emissions.  Building codes are progressing toward net-zero ready standards, eligibility criteria continues to be adjusted.

New Construction

To be deemed an energy efficient new build, properties must have been awarded an eligible certificate–there are multiple eligible certifications including BC Energy Step Code, Built Green Canada, Canadian Home Builders Association to name a few.  However, if a new-build doesn’t come with the certification, clients can get their home assessed by a Natural Resources Canada (NRCan) qualified energy advisor.

How does someone apply?

After closing your mortgage, eligible borrowers have up to 2 years to submit the refund request, directly to CMHC through their Eco Program with supporting documentation.  The homeowner applies through CMHC’s website, uploading their supporting documentation. Once approved, CMHC mails a cheque directly to the client. The funds can be used for any purpose, they do not have to be applied to the mortgage.

Required documents will include:

Final Energy Efficient Certificate from the list of  Eligible Third-Party Certifications and/or

Energuide label for Energuide renovation upgrade report for existing homes

These supporting documents are ‘good’ for up to 5 years. Meaning, if the house sells within 5 years, the new buyer can also apply for the CMHC refund.  Even if it was already applied for by the previous owner.  Yes it’s double dipping that is allowed and encouraged by CMHC for this program.

Renovate for Energy Efficiency

If you have an insured mortgage with CMHC, and you’re spending at least $20,000 in energy efficient renovations, the program is available for you.  This applies to both single family dwellings and condos.  Buyers can use the Purchase Plus Improvements Program through CMHC, to get the money needed for the updates. See the following link: https://www.32degreesbuilding.com.au/how-to-make-your-home-energy-efficient/

Energy Costs are getting higher and the cheapest energy is the energy you don’t use.

Paul Pettipas – Nova Scotia Home Builders Association

To be Eligible:

  • Be a homeowner with CMHC Insured financing
  • Allocate a minimum $20,000 for energy-efficient improvements that fall within any of these 3 categories
  1. Building Envelope (insulation, windows, doors, roof, attic, air tightness & foundation).
  2. Mechanical systems (HVAC- Heating, Ventilation and Air Conditioning, heat pump systems).
  3. Renewable energy systems (solar, wind, geothermal).

CMHC has made the program user friendly and beneficial for the homeowner, putting money back in their pocket is always a positive.

 

If you would like more information or have questions, please ask! Call us at 250-753-2242 or apply here: Online Application

https://www.cmhc-schl.gc.ca/en/professionals/project-funding-and-mortgage-financing/funding-programs/all-funding-programs/canada-greener-homes
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Locally owned and operated since 1985.

“The name friends recommend”
Mid Island Mortgage & Savings Ltd, #12 – 327 Prideaux Street, Nanaimo, BC V9V 1C8, Canada, 250 753 2242

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CEBA Loan Forgiveness: Deadline Approaching

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CEBA Loan Forgiveness Deadline Approaching

For eligible CEBA loan holders in good standing, repaying the balance of the loan on or before January 18, 2024 will result in loan forgiveness of up to 33 % (up to $20,000).

As of December 4, 2020 the maximum CEBA loan amount was increased to $60,000. CEBA loan holders who had received the $40,000 CEBA loan, were able to apply for the CEBA expansion, which offered eligible businesses an additional $20,000 of financing.

All Application Outcomes: Are Now Final

 

As of September 14, 2023 the repayment deadline for eligible CEBA loan holders to qualify for partial loan forgiveness was extended to January 18, 2024. Additionally, CEBA loan holders that submit a refinancing loan application by January 18, 2024 but require a grace period in order to finalize the payout of their CEBA loan can still qualify for partial forgiveness if the outstanding principal of their CEBA loan, other than the amount of potential debt forgiveness, plus any applicable interest is repaid by March 28, 2024.  Accessing the equity in your home is a great way to support your business and ensure you keep as much money as possible in your pocket. The government loans served a purpose that assisted business owners when they needed it most-utilize those monies as best you can.

Additional Information

If businesses repay the loans by January 18, 2024, they can receive loan forgiveness on up to a third of the amount they borrowed, but if they don’t they must repay the full amount and will face 5% interest on their remaining balance. There could be mortgage options available to help you pay the balance and be excused from full repayment.

 

“There is near panic on the part of close to half of Canada’s small businesses about the looming deadline that is approaching for CEBA loans”

Dan Kelly, President and CEO of the Canadian Federation of Independent Business

Locally owned and operated since 1985.

“The name friends recommend”
Mid Island Mortgage & Savings Ltd, #12 – 327 Prideaux Street, Nanaimo, BC V9V 1C8, Canada, 250 753 2242

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Mortgage Renewal and Educating Yourself

We believe Informed Consumers Make Better decisions

 

Educate Yourself

 

Mortgage renewal and educating yourself, there are so many questions. There is information overload and it can be daunting. Where is the economy at and where is it going? We don’t have a crystal ball, but here are some tips if you have a mortgage renewal coming up.

 

Why education matters; we believe that informed consumers make better decisions.

  • Do I have to requalify?
  • Variable rate or fixed rate?
  • What term should I take?
  • How much are my payments going to increase?

Five things to consider when renewing your mortgage:

What the economists are saying:

 

Benjamin Tal, CIBC Economist:

“Things are moving in the right direction, but not good enough – therefore, we keep the option to raise again open”, “They’re not going to commit to not raising interest rates anymore. [That’s] no big surprise – they don’t want to be seen as relaxed about inflation.” “The short answer is, we don’t know. It’s really 50/50.”

Stephen Brown, Capital Economics:

“The Bank of Canada accompanied its decision to leave interest rates unchanged with a pledge to hike again if needed, but we doubt it will need to follow through. With recession risks rising and labour market conditions loosening, we continue to think that the bank’s next move will be a rate cut, in early 2024”

Earl Davis, head of fixed income and money markets at BMO Global Asset Management:

“We didn’t anticipate a hike today [Sept 6th] there’s two more meetings before the end of the year, we anticipate they’re going to hike it once minimum.”

Changes to Consider

Lender

Switch/Transfer your mortgage to a new lender (at their cost).  Most lenders will help pay the costs associated with moving your mortgage at renewal. To be eligible for a transfer program, you cannot increase your mortgage amount at this time. Everything is the same except the lender.

Refinance your mortgage

Now is the time to consider any of those upcoming changes that may require money in the coming years. Does it make sense to take equity out of your home?

Extend you amortization

Increasing your amortization period helps provide payment relief by spreading payments out over a longer timeframe.

Type of mortgage

Should you consider a fixed or variable mortgage? Would you want to look at removing co-signers who may not be needed any longer?

Look at the big picture

What is coming up in the next five years?

  • downsizing
  • expanding your family
  • moving closer to family
  • major renovation
  • kids education
  • help adult kids with housing
  • buy rental property/vacation property
  • dream vacation

Avoid Payment Shock

Get an idea of what your payments will be at renewal. You could start practicing making higher payments now, to relieve some pain at renewal!  Why not get the budget book out.  If you have the funds to make a lump sum payment, this will help reduce interest paid, and monthly payments. You could also consider paying off some debt to free up monthly cashflow. Whatever you do don’t take on any new payments.

Interest Rates

Bank of Canada (BOC) sets its policy interest rate (overnight rate) to control inflation. They raised rates 10x since March 2022 (+4.75%) this impacts variable interest rate products. The last meeting on September 6, 2023 the rate was held at 5%. The BOC’s next meeting is October 25, 2023.

Fixed mortgage interest rates are not directly linked to Bank of Canada Rates. The fixed rates follow bond yield. Fixed rates increased roughly 2.25% since March 2022.

 

Requalifying 101

You can refinance up to 80% of the value of your home.

Income qualification – documents and questions will be required (no blood sample required).  Stress Test – you will qualify at 2% above your mortgage interest rate. A Lawyer/Notary could be needed and an appraisal is likely.

Renewing with you lender

  • If you’ve made all your payments on time, your existing lender will generally give you the option to renew your mortgage.
  • Avoid requalifying – if you are not increasing your mortgage amount, amortization, or making a change to who’s on the mortgage.
  • No cost – there shouldn’t be any legal fees, appraisals, or income documents to provide.
  • Can be as easy as signing the dotted line. There is a bit more involved, but the most straight forward option.

Options

Terms – Lenders usually automatically offer a 5 year fixed term. Consider a shorter term or a variable rate.

Early Renewal – Most lenders offer early renewal options – up to six months early

Rate Holds – Inquire with your lender about how long they will honour a rate hold.

We believe that informed consumers make better decisions. To discuss your upcoming renewal,  or any mortgage situation call Kevin, Jason or Blaire today!

 

DollarWise Mortgage Experts Blog Post

 

The Million Dollar Question…

Moneydoesgrowontrees

The bank of Canada has just raised their rate to a 22 year high at 5.0%. This move has us all pondering : What are interest rates going to do?  Whether you’re a Mortgage Broker, a Realtor, a homeowner, a consumer, or an investor – everyone wants to know what interest rates are going to do. This proves to be a challenging question.  Below are some of the latest opinions of reputable economists.

What the economists think

The economists are divided on predictions for not only the next BOC meeting, but also the strategy that will unfold in the coming months.

RBC Economics – Claire Fan:

“We continue to expect the full impact of rate hikes to date to come through gradually, slow spending over the second half of this year and for that to push the central bank back on the sidelines with no additional interest rate hikes this year.” 

Desjardins’ Senior Director of Economics Randall Bartlett:

“Given that the Bank even considered pausing at this month’s meeting, the better-than-expected inflation outcome reinforces our forecast for the overnight rate to be maintained at 5% for the remainder of the year,” he noted.

CIBC Economist Benjamin Tal:

“This is opening the door for another move in September,” Tal said. “Our official call is now that the Bank of Canada is going to move again, unfortunately, in September by 25 basis points, and that maybe will be the end of it.”

“We have to realize that we are already in a process of, in my opinion, overshooting – maybe by design by the Bank of Canada,” he said. “But it also means that if you overshoot, you accelerate the process of cutting.”

“We have to realize that this is an asymmetrical game, namely a situation in which the Bank of Canada is getting mixed signals from the economy,” he explained. “Some signals suggest that the economy is strong, some suggest that the economy is reacting to higher interest rates and slowing down, especially the housing market.”  

So, now what?

While interest rates play a major part in our clients decisions, the basic need of housing is universal and is not going away.  Fixed interest rates may be around 5-6% range, making home ownership more costly than Rent is astronomical and not doing anything to build clients networth.  

At the end of the day, you have to live somewhere! Real Estate is always a good long-term investment.

If you have questions, we are here to help. 250-753-2242

Contact Us

Interested in more?

https://www.mpamag.com/ca/mortgage-industry/market-updates/another-bank-of-canada-rate-hike-likely-in-september-cibcs-tal/452614

Did someone say “Second Home” ?

 

University will start in the Fall. For some of our kids that means seeking accommodation options.  Perhaps your looking to buy a second home to reside in for commuting purposes, or want to buy a vacation property to enjoy.  Others might want to purchase a property to move a family member closer.  Canadians are allowed to purchase a second home with minimum down payment as long as the use of the home meets certain requirements.   

 

The kids may have graduated high school, but that doesn’t always mean providing for them is done.  High rent amounts and cost of living make it challenging for young adults to get ahead.  Even with full time jobs.  Challenging stressful times await these young adults, going to school, having limited time to work to pay bills, living on their own for the first time and studying to achieve their education goals to secure their future employment. Having housing in place is a monumental difference maker and a stress relief, allowing them to concentrate on schooling.  The second home program can help.

 

The caveat to this program is that the home must be occupied by an immediate family member. Buying property for a child in University is a great example. Helping a child with housing in that way not only gives them shelter, but provides them the life lesson of homeownership.  They will learn how real estate can produce wealth, and how getting your money to work for you can be a life changer. Help your kids save on rent, while you invest in Real Estate and their future.   University is a massive expense–maybe the real estate you purchase increases in value while they are in school, offsetting the cost of their education.  The return will be worth it! 

 

The fast ferry is making its maiden voyage in Nanaimo.  With Vancouverites being able to commute to Nanaimo with a short sail across the ocean, housing in Nanaimo will be that much more desirable. More people who already commute that “hour plus” drive in Vancouver to their job can look at purchasing a property in Nanaimo. They could buy a home in Nanaimo as a second property.  Mortgages are possible!

 

Summer weather comes with heat, and the desire to be by the water. While travelling around during the summer months you might find that special spot you and the family fall in love with. You can look at purchasing a property in that area, creating family memories for generations. That summer cabin can be bought with minimum down, and you can start making your own family memories this year.  

Do you have that family member living far away who has a desire to live closer to you? Help them relocate by purchasing a property with the minimum downpayment: get the family together again. 

With as little as 5% down on the first $500,000 and 10% on the balance, a mortgage for a second home can be achieved.  Applicants are required to qualify for the mortgage without rental income on the new property.  The property has to be for your own, or a close family member’s, use.  This is not the program for a rental purchase.  

 

For clients in any of these categories, Kevin, Jason and Blaire would be happy to explore options.  Call 250-753-2242 or apply now or email: 

 

info@midislandmortgage.com

kevin@midislandmortgage.com

jason@midislandmortgage.com

blaire@midislandmortgage.com 

“The wise young man or wage earner of today invests his money in real estate.” -Andrew Carnegie

Mortgage Options for Self Employed

Self Employed : Mortgages

Woman working hard at her business

Business Owner? There are options for mortgage financing.

Being self employed has many advantages, like setting your own schedule and being your own boss.  You also have the advantage to write off items to decrease your taxable income.  This is great when it comes time to pay the Government, but can create challenges when you are planning on borrowing.  There is a major advantage to working with a broker who is well versed in Business for Self (BFS) programs available.

The Gold Standard for Self Employed

The most universal method to calculating self employed individuals income is by taking a 2 year average.  To achieve ideal interest rates, a 2-year average of your NET income is used.  That means your gross income is not the amount being used to calculate your capacity for a mortgage.  All write-offs and deductions are used to calculate your Net Income.  If your Net income has been declining, the lower amount is used for qualification purposes.  In an ideal world, real estate transactions would be planned a few years in advance–allowing for pre-planning with your accountant.

Traditional Lending – New to BFS

There are programs available through traditional lenders for clients who have less than 2 years self employed.  The requirements include having to have worked in the same industry as before they became self employed.  The client needs to be able to show that they have a history in the industry to qualify for this program.

Subprime Lenders

Subprime lenders offer solutions to a variety of self employed individuals.  Clients could be new to their industry, or well established but their past years net income isn’t an accurate reflection of current income.  Regardless, there are Subprime lenders who might be able to help.  Subprime lenders will complete a review of your business bank statements for the past 6-12 months. Lenders review deposits and deduct expenses to arrive at an income amount that will be used for qualification.  Having flexibility in income qualification does come with additional costs.  Interest rates are generally 1-2% higher than a traditional lender, plus there is a lender fee.

Why use a Mortgage Broker

Mortgage Brokers have access to a variety of programs and options for self-employed individuals.  If you’re working with clients who are BFS it’s important they know what’s available.  Brokers have access to multiple programs and lenders, and can ensure that client’s buying power is at it’s full potential.  This gives the client an advantage; providing them with multiple possible solutions.

For more information please call Kevin, Jason or Blaire today 250-753-2242

Fill out our Online Mortgage Application

Reverse Mortgages: Debunked

 

Reverse mortgages have had a bit of a bad rap.  Here’s some of the stigmas they hold, and why they have their place as a financial tool, especially in today’s market!

 

Interest rates are up and cost of living is high.  Everyone is working their budget–trying to pay for life, whatever that looks like for them..  While we are all feeling the pinch of the purse strings, seniors with limited income are even more at risk of falling behind.  

 

Myths of the reverse mortgage:

  1. The interest rates are too high.  

 

Historically this may have held more weight, but now reverse mortgage interest rates are lower than a Home Equity Line of Credit.

 

  1. You can’t buy a house with a reverse mortgage.

You can!  If the age requirements of the borrower are met and the home you are buying has the equity (ie. you are putting down at least 45% of the purchase price) a reverse mortgage could be an option.

 

  1. A Reverse mortgage is a bad financial decision.

 

Yes, you are utilizing the equity in your home therefore you won’t have as much money when you sell.  The interest on the mortgage will accumulate, and is payable if/when you sell your home. For people who would otherwise have to sell their home, it makes sense to remain in your home instead of losing it altogether. Especially if you were going to be renting once you sold. 

 

  1. Reverse mortgages are too expensive.  

 

The set up costs are comparable to a regular mortgage, around $1000-$2000. There is no monthly payment obligation. This frees up what could be a large portion of monthly income. The borrower’s can enjoy a better quality of life, with less financial stress, which is well deserved especially later in life.

 

  1. You can’t make any lump sum payments.

 

There are reverse mortgage products that allow you to make lump sum payments against the principal.

 

If you or someone you know has questions about reverse mortgages, Kevin, Jason and Blaire are ready to help call the office now 250-753-2242.

Purchase Plus Improvements

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Mid-Island Mortgage & Savings Ltd. & the Christmas Angels…

Mid-Island Mortgage & Savings Ltd. & the Christmas Angels…

Every year our team at Mid-Island Mortgage & Savings Ltd. Nanaimo work with Volunteer Nanaimo and their Christmas Angels program to sponsor a family in need within the local community. Here are some photos from this year’s gift haul for the amazing family…

If you would like to sponsor a family next year through the Christmas Angels you can contact Rita at the Volunteer Nanaimo offices by email at vnanaimo@gmail.com. 

Have mortgage questions or concerns? Call our office today at 250 753 2242 and we can help with all of your mortgage questions!

 

“LIKE” our Facebook page or “SHARE” this post to be entered into our quarterly draw for a $150.00 gift card!!!

 

Facebook: www.facebook.com/midislandmortgagenanaimo

We thrive off of your continued support and client referrals. Let us reward you for helping us get our name out into the community! Please mention who referred you or how you heard from us, when filling out your mortgage application. The name you give us will also be entered into the same draw for coming in to see us!

 

We are open Monday to Friday from 9 am to 5 pm. Kevin Decker can also be reached after hours at 250 619 2262 and Jason Barudin can be reached at 250 668 2203.

 

-Thank you Essential Service Workers!-