Are you thinking of buying rental real estate?

Some changes surrounding mortgaging property are coming April 19, 2010.
Usually when someone is looking to purchase another piece of real estate, be it a rental, investment, or recreational property, lenders will have different requirements than if your buying your principal residence.
Currently, some buyers would qualify for a 5% down payment on a rental property purchase that would have to be insured by CMHC. The government is mandating a change upwards on that down payment will have to be 20% effective April 19th.
Also rules around re-financing your property will come into effect on the same date. Instead of being able to borrow up to 95% of your equity, that will be bumped down to 90%.
Although these changes are good and designed to assist Canadians to be able to manage their debt load when interest rates go up, it may be an excellent time to really get busy if you're thinking of " buying some more Kelowna real estate!
Talk to you soon...
Paige

A change for variable rates for Kelownareal estate?

My last blog dealt with Finance Minister Jim Flaherty speculating what the federal government might do if real estate prices rise too high and too quickly. This week Mark Carney, the governor of the Bank of Canada, is trying to avoid raising bank rates before his U.S. counterpart for fear of further appreciation in the Canadian dollar. For those of us who have variable rate mortgages on our real estate now might be the time to start watching what's going on with interest rates. We all know that we can expect interest rates to rise from their historically low points... the trick is to know exactly when!
A variable rate mortgage or a floating rate mortgage is a loan where the interest rate varies to reflect the base rate of the central bank. The lender must hedge against potential interest rate changes; the borrower benefits if the interest rate falls and loses out if interest rates rise.
Many people, not only in Kelowna, but across the country have benefited for years by having a variable rate and some have opted for the more traditional closed mortgages.
I have a variable rate mortgage and will be watching to see when I think the best time to "lock in" will be. I'll keep you posted. Here's a link to my web page with the full article from the Financial Post on Friday Jan 8, 2010, called " The End of Free Money?"
Talk to you soon...
Paige