17 Oct

Legalized Marijuana and the Canadian Housing Market

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Posted by: Jordan Thomson

October 17th will be an important day in Canada’s social history. It’s the day when we are going to have legalized marijuana across the country. We will be the second major country in the world to do this. How does this affect mortgage brokers like myself? When someone comes to me to obtain financing for a home purchase and the sellers have disclosed that they smoked pot in the house or grew a few plants, how will this affect their home purchase?

A few years ago, someone disclosed that their home had been a grow-op six years previously and their home insurance company cancelled their policy citing safety issues. I could see this happening with both lenders and mortgage default insurers like CMHC, Genworth and Canada Guaranty. A recent article by a member of the Canadian Real Estate Association suggested that both lenders and insurers might ask for a complete home inspection. It was suggested that sellers who have grown a few plants might want to get in front of this potential problem and have an inspection before they list the property. If there are any issues of mold or electrical systems that are not up to code, they can remedy this and have a quick sale.

I contacted both CMHC and Genworth Canada to find out if any policy changes are in the works. CMHC told me that there’s nothing planned beyond what is already on the books. If there’s been a grow operation it needs to be inspected and remediation done before they will insure. Genworth says that nothing has been announced as of yet. Any changes will result in an official announcement to all mortgage brokers.

If you are thinking about smoking pot in your home or want to grow a few plants, contact me as your Dominion Lending Centres mortgage professional first to find out if this could affect your house value or sale in the future.

Thank you to DLC’s David Cooke for the info.

12 Oct

Cash Back and Decorating Allowances on New Build or Pre-Sale Purchases

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Posted by: Jordan Thomson

As the market shifts, developers will increase their incentives to buyers with cash back and decorating allowances on new build or pre-sale purchases. It is very important to review those options with your real estate agent representative and vital to consult with your Dominion Lending Centres mortgage broker. Although these offers may seem attractive, they can impact your financing and could cost you thousands of dollars.

Before you write a contract on a new build or pre-sale, ensure you have set up your team including a real estate agent and mortgage broker. Always consult with them to ensure you have sound advice. Do not rely solely on the developer’s sales representative.

What happens when you sign a contract on a pre-sale?

When you visit the sales centre for the pre-sale and decide to write a contract you have a rescission period where you can back out of the purchase. The contract you sign is drafted by the sales centre and once you remove any conditions, you are locked into the purchase. Therefore it is essential you have your real estate agent with you at the time of signing or at a minimum, they review the contract. It is in your best interest you fully understand the terms, the disclosure statement, what you are buying, schedule to build, GST, deposit schedule and any incentives.

Once you remove any conditions, the deposit is paid to the developer and a schedule set for all other deposits till the building is complete. Those total deposits are typically 20% of the purchase price. That is money you will not receive back if for any reason you are unable to proceed with the purchase. Some contracts allow assignment to another buyer, but those must be approved by the developer and may come with restrictions. Your realtor can guide you on these matters.

How Will Cash Back or Decorating Allowances Impact Your Purchase?

When the market slows, developers will use incentives such as cash back and decorating allowances on new build or pre-sale purchases as a strategy to increase sales. Regardless if this is a cash back or a rebate for decorating, it will have an impact on the purchase price for the lender on the financing. This is a common misconception among buyers and even realtors who do not understand the process from a financing perspective.

For example: A purchase price plus GST is $800,000. The developer is offering a $20,000 decorating allowance. The lender will automatically deduct the $20,000 from the purchase price. Your new purchase price will be $780,000 for financing purposes. This does not change the actual purchase price. You still have to pay the developer $800,000 for the home. The lender will lend on the $780,000 only. Therefore you must pay in cash at the time of funding the $20,000 difference.

The developer has sold you the idea you are receiving decorating upgrades of $20,000. You are receiving the value of that allowance BUT make no mistake you are paying for it.

If the incentive is a cash back amount in the above example, you will receive the cash back from the developer at the time of completion. However, the lender will still only offer financing on the lower value minus the cash back amount.

Thanks to DLC’s Pauline Tonkin for this info.

16 Aug

Vancouver Market Real Estate Trends LIVE Video

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Posted by: Jordan Thomson

Market Trends in Vancouver’s Condo Real Estate Market LIVE Video Update:

Inventory is Up and Prices are down so we are seeing a shift into a Buyer’s Market. Is it a good time to buy? Top Realtors are saying yes and here is why!

MortgageMinuteLIVE August 10, 2018

Check out my MortgageMinuteLIVE each week Friday’s at 1pm for mortgage and real estate tips, trends, need to know and more!

If you have any questions you want answered, let me know! I’m always here to help you with purchases, refinances, equity take outs and more. You can reach me at 604.725.1607 or email jordan@citywidemortgage.ca.

Thanks for watching!

3 Aug

CMHC To Help Self-Employed Borrowers Get a Mortgage

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Posted by: Jordan Thomson

Self-employed Canadians are key contributors to strong and vibrant communities and make up about 15% of Canada’s labor force. However, they may have difficulty qualifying for a mortgage as their incomes may vary or be less predictable.

In line with the National Housing Strategy’s mission to address the housing needs of all Canadians, Canada Mortgage and Housing Corporation (CMHC) is making a number of changes aimed at giving lenders more guidance and flexibility to help self-employed borrowers:


For more information, please feel free to reach out. Call me on 604.725.1607 or email jordan@citywidemortgage.ca.


19 Jul

Defiant Airbnb hosts could face strata fines up to $1K per day

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Posted by: Jordan Thomson

The province of BC has amended strata property regulations, effective Nov. 30th.

Currently, in any buildings that have a ban on short-term rentals, the max that they can penalize the owner is $200/week. The new regulations will see this increase to $1,000/day. The government’s hope is that this will be a true deterrent and that rental stock will move from short-term rentals back to long-term rentals. Whether you agree or not, this is important information for any one who own rentals or are contemplating a rental purchase and who plans to have short-term rentals.

Click here for full article

For more information on how I can help you fund your rental purchases and refinances while increasing your cash flow, please reach out at jordan@citywidemortgage.ca or call me on 604.725.1607.

8 Jun

Is Vancouver in a Buyer’s Market June 2018?

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Posted by: Jordan Thomson

You’ve probably seen all the For Sale signs lining the streets and know that real estate is losing it’s sizzle right now. It doesn’t have that frenzy of sales, high prices, multiple offers that has characterized Vancouver’s real estate market since 2015. So, what does this mean?

Given the signs, it looks like we are in a Buyer’s Market! Why and how does this impact you.

Check out my Mortgage Minute Video this Week for the scoop!


Call me anytime if you would like to discuss this or any other mortgage related matters.

12 May

6 Home Closing Costs You Need to Know About

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Posted by: Jordan Thomson

When you purchase a home, it is an exciting and busy time with a lot of things to plan for and take care of.

It is important to plan ahead for the costs that are associated with the close of the purchase of your new home. They include; Legal Fees, Title Insurance, Adjustments, Property Transfer Tax, GST and Fire and Flood Insurance.

I break it down here for you in my Weekly Mortgage Minute for the week of May 7th,2018!


28 Mar

The Most Important Question this Spring

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Posted by: Jordan Thomson

Short Version:

The most important question a home-seller must ask their Broker or their banker this Spring:

‘Do I QUALIFY to port my mortgage?’

You must re-qualify to port your mortgage to a new property, and you must re-qualify under stringent new rules.

How stringent?

Long Version:

Let’s say you have impeccable credit, a $100,000 income, and bought a house with a basement suite last year – you may have a mortgage of ~ $675,000…which you qualified for in 2017.

In 2018, you new maximum mortgage amount is closer to ~$530,000.

And if rates were to move up another 0.50% you’d be capped at ~$490,000.

If rates were to move up a full percentage point ~$455,000

Either way, even with no further upward movement, the family in this example, were they to enter into a binding sale agreement without confirming their qualifications would not be able to re-enter the market at the same price point.

Key Point – Do not ask if your mortgage is ‘portable’ (99% are). Ask if you currently qualify to move your mortgage to a new property. This will require an actual application and full review.

Key Point – The federal government has created a dynamic in which qualifying rates have shifted radically, and more precisely the ground has shifted under tens of thousands of middle class Canadians feet. You have been protected from yourself, and you don’t even know it.

Key Point – Since Jan. 1, 2018, you’re subject to the new stress test. Even though you have impeccable credit, have never missed a payment, and even got a 3% raise last year – too bad.


Don’t list your home for sale without having something in writing from your current lender confirming that you QUALIFY to move your existing mortgage to a new property. If you have any questions, contact your local Dominion Lending Centres mortgage professional.

And if you’ve personally been caught in this ‘portability trap’, by all means make your voice heard. Share your story with me directly and also here; www.tellyourmp.ca

Thanks to DLC’ Mortgage guru Dustan Woodhouse for this info!

24 Mar

EXPERT INSIGHTS March 23, 2018- Jason Ellis looks at rates, inflation, securitization news and more

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Posted by: Jordan Thomson

Expert insights
Jason Ellis, Senior Vice President and Managing Director, Capital Markets

Good Morning.

In the most important news of the week, Tuesday marked the Vernal Equinox, also known as the first day of spring if you live in the northern hemisphere. As the earth continues its lonely journey around the sun and the tilt of our axis brings longer, warmer days, I have one word of advice. Sunscreen. The long term benefits of sunscreen have been proved by scientists. I may be ahead of myself. On a UV Index of 1-10, the most recent observation in Toronto was a 1. In light of this, I’ll offer one other word of advice. Floss. (But trust me on the sunscreen).


It’s been a bit of a topsy-turvy week. 5 year GoC’s started at 1.98% Monday morning and climbed as high as 2.12% by Wednesday afternoon. By the end of day on Thursday, yields had retreated to 2.04% in the aftermath of the Wednesday afternoon Fed meeting. Finally, this morning’s strong inflation data led rates back up to 2.09%.

If you’re a critic, you’d probably point out that I did nothing more than list a bunch rates with little to no context or explanation. You’d be right.


Data released by Statistics Canada this morning showed the annual pace of inflation accelerated to 2.2% compared to 1.7% the previous month. Core inflation excluding volatile elements like gasoline prices climbed to 2.1% compared to 1.9% last month.

As you would imagine, inflation is a central piece of the information that influences the Bank of Canada’s interest rate decisions and, with both readings above the bank’s 2.0% target, another hike could come even sooner than previously expected. Bond yields climbed 4-5 basis points on the news.

After leaving the target overnight rate unchanged at 1.25% back on March 7th, the implied probability of a 25 basis point hike at the April 18th meeting is about 40%. Trade concerns with the US may yet weigh on that decision.

The Fed

Speaking of central banks, the Federal Open Market Committee (aka the Fed or FOMC) met on Wednesday and raised its benchmark target rate by 25 basis points for the sixth time since it began raising rates from near zero levels in December 2015. The increase was widely expected and puts the new benchmark funds range at 1.50%-1.75%. Along with the increase was another upgrade in the Fed’s economic forecast and the suggestion that the future path of rate hikes could accelerate.


MCAP announced its highly anticipated Residential Mortgage Backed Security (“RMBS”) this week. In case you’re unclear on the difference, an RMBS is composed of low ratio (<80% LTV) uninsured mortgages where NHA MBS are made up of Insured mortgages. The $247 million Pass-Through deal features a $233 million AAA tranche supported by 6% credit enhancement through subordinated notes. Indicated spread is in the GoC+100 range which is great value for the investor. The prime collateral (not to be confused with ‘alternative’ or ‘alt-a’ mortgages) was carefully curated, and those willing to do the work to understand the asset, should be well rewarded. While it might seem counterintuitive as a competitor, I’m definitely rooting for MCAP on this one. The development of an RMBS market in Canada would be a good thing. Final thoughts There seems to be an expectation that these innocuous posts end with amusing non-sequitur. To that end, since I rarely have an original thought worth sharing, I will borrow from another source to leave you with the following additional advice which you can consider a bonus after the tips about sunscreen and flossing above. Whenever you get that “glass half empty” feeling…just add vodka and stir.