Specializing in Real Estate on Vancouver Island, BC, Canada

AUGUST 2012

NewsletterHolmes Realty

Holmes Realty Ltd.2481 Beacon Avenue

Sidney, BCV8L 1X9

250 656-0911www.holmesrealty.com

New Canada Mortgage & Housing (CMHC) regulations are now in effect, and they have the potential to affect your home purchase. The key changes are:

• Themaximumamortizationperiodhasbeenreducedfrom30 years to 25 years.

• ThemaximumamountthatCanadianscanwithdrawinrefinancingtheirmortgageswaslowered from 85% to 80%.

• ThemaximumGSD(grossdebtserviceratio)wasfixed at 39%,andthemaximumtotalDSR(debtserviceratio)wasset at 44%.

• Government-backedinsuredmortgagesarelimitedtohomeswithapurchasepriceoflessthan$1million.

How Will This Affect Home Buyers?A family with $65,000 annual income and no debt,

requiring a CMHC insured mortgage at a 3.09% interest rate, WOULD QUALIFY FOR:

BEFORE JULY 9th, 2012 AFTER JULY 9th, 2012

$525,000 $410,000These new rules will NOT affect homebuyers with 20% or more down payment for their home purchase.

THE NEWMORTGAGEREGULATIONSWill they affect your next home purchase?

225 Menzies St.Victoria

BUY ONEGET ONE FREE!

expiresSeptember30,2012

ValidonlyatVictorialocation.Notvalidwithanyotherofferordiscount.Oneofferpercustomer.

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Compliments of Steven Klipper

Compliments of Steven Klipper

The“HolmesRealtyHotRods”whoopeditupandhadablastwhilepedallingaroundSidneyontheHeart&StrokeFoundation’sBIGBIKEbackonJune25th.Ourteamwasthetopfund-raiserinSidneywithatotalof$5,411indonations!Wewouldliketothankallourfriends,familyandclientswhosupportedusinthisgreatcause.

BIG HEARTS + BIG BIKE

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Waste WaterThere has been a lot in the news lately about how sewage is handled in the Capital Regional District. You may have noticed that Saanich Peninsula communities aren’t mentioned. That’s because we already have such a facility that serves North Saanich, Central Saanich and Sidney as well as the airport, the Institute of Ocean Sciences and the Tseycum and Pauquachin First Nations communities. It is a secondary level waste-water treatment plant that has been in

operation since 2000, and discharges into Bazan Bay.

CLEAN WATER BEGINSAT HOMEWhatever the water that goes down our drains is carrying with it ends up in the ocean too. That means fats, oils and grease, detergents, chemicals, medications and food waste all end up in the marine environment, where they have the potential to cause environmental damage. The CRD’s website (www.crd.bc.ca) has information and videos about how to properly dispose of these items, as part of its “Source Control” program for both businesses and residents. Look under the Waste Water Management section of the website.

The New Mortgage RegulationsThe new mortgage regulations have the same effect on home buyers as an interest rate hike (when a CMHC-insured mortgage is necessary), basically reducing your buying power. Almost a quarter of home buyers in the Victoria area are first-time buyers and buyers without a 20% down payment. If these buyers no longer qualify for mortgages, it will drive down house prices: fewer buyers, lower prices!If you’re a first-time homebuyer

who has been waiting a long time for house prices to come down, this is a good thing—IF you have been saving and have the 20% down. If not, qualifying for a mortgage will be more difficult and your payments will be higher. However, equity in your home will increase more quickly.Why were these changes made

to the mortgage regulations? Mortgage insurance is a credit risk

management tool that protects lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender submits a claim to the mortgage insurer to recover its losses. The law requires federally regulated lenders to obtain mortgage insurance on loans in which the homebuyer has made a down payment of less than 20 per cent of the purchase price. The homebuyer pays the premiums for this insurance, which protects the lender if the homebuyer defaults.The Government of Canada is

concerned about the debt load carried by individual Canadians and wants to avoid the housing collapse that devastated the economy in the U.S. Essentially, the government wants to ensure that if you cannot afford a home, then you shouldn’t buy one.

Anyone can be the victim of a scam. Here are two common scams to watch out for.

Email request to verify banking information. Your bank will never send you an email to verify your account number or personal information. These email schemes are common and can look quite convincing. However, if you receive an email asking you for this information, don’t respond to it. Instead, report it to your bank immediately.

Prize Pitch Scams. The classic prize pitch scam involves victims receiving notification by post, phone, or e-mail indicating they have won a prize (monetary or other valued item). However, in order to collect the prize the victim is required to pay various fees or taxes in advance. Victims either never hear from the organization again or receive further requests for money. However, the truth is that if you have won a prize in Canada, there are no fees or taxes to be paid. To avoid being caught in this scam, keep track of contests, draws and lotteries that you enter. Challenge a caller who says that you’ve won a prize to tell you where and when you entered.

The RCMP have a great website regarding fraud and scams, and a visit there will arm you with tons of information about how to avoid being taken in.

www.rcmp-grc.gc.ca/scams-fraudes

REAL ESTATE MARKET WATCH

Absorption Rate is a measure of how many months of inventory is available in our market based on average monthly

sales volume and the current number of active listings.

Greater than 6 Months = Buyers Market5 to 6 Months = Balanced Market

Less than 5 Months = Sellers Market

ThisnewsletterisnotintendedtosolicitbusinessfromindividualsworkingwithRealtors.

Steven Klipper

HOLMES REALTY2481 Beacon AvenueSidney, BC V8L 1X9

If you know someone who would appreciate the level of service I can provide, please call me with their name and number and I’ll take great care of them. I am totally committed to providing my clients with unsurpassed service. A referral is sending someone you care about to someone you trust.

Steven Klipper Are you interested in our Real Estate market? Every month, we release a complimentary e-mail report with some excellent information that will allow you to keep an eye on the market.

CALL OR E-MAIL TODAYfor more information about our

MONTHLY MARKET E-MAIL UPDATE1-877-656-0911

steven.klipper@holmesrealty.com