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Dear ,
What
a month of June it has been! We have been busier than bees making honey,
that is for sure! By the end of July, we'll have eclipsed last year's
total mortgage volume. That's an incredible increase in our business. We
don't really know what is in store for August and beyond. Needless to say, we are living in
some very interesting times.
Many of you are taking advantage of your
rate-holds of 3.69%. Rates are hovering above 4% now. For example, 4.15%
to 4.25% are the best 5 year fixed rates on the market today. These are
still
some of the lowest rates in history. If you are considering
refinancing, it
is still a great time to lock in. Values are as high as they've ever been on a
comparison approach to property appraising -- which is the method used to
evaluate
how much your house or condo is worth. [Check today's rates]
Savvy consumers know that you
don't
take out a variable rate mortgage when the rates are on the way back up. Typically you take a
variable
at the peak and ride it back down. That's always the advice we've
given and it's worked well. Now many of you are locking in and
essentially
capturing your savings at a guaranteed rate of 3.69% or somewhere in
that
ballpark. And why not? You've paid an average rate of about 4% while
riding variable from the peak. Some argue it could be a slow ride back
to the
top due to the turmoil in the European markets and the slow US recovery.
We
still think that the Bank of Canada will increase the overnight rate
once again
by a quarter percent on July 20th.
As always, if you have ANY questions about getting a mortgage, renewing or refinancing, we are here to assist you.
Sincerely,
Mike Averbach and Justin Blacklock
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Here comes the HST
In spite of all the protests and petitions against the HST, it is about to become a reality in a couple of days.
Whether you were one of the many people signing the HST petition, or not ... the HST goes into effect on July 1st.  |
The new combined tax (GST + PST) will be applied to virtually everything and will dramatically impact home owners, home buyers and sellers.
The HST is a combination of the PST which is currently 7% and the GST which is 5%. The combined tax is a whopping 12% which will be added to goods and services that were previously exempt from the PST. This includes restaurants, personal and business services and real estate purchases.
Here is a summary of who will be affected and how.
HOME OWNERS
The HST will increase the cost of virtually everything, from services such as phone and cable, Internet and heating, to electricity and gas.
Repairs, whether you are doing it yourself or hiring a plumber will cost more, as will renovation costs. When you are planning a renovation you must add in the extra cost to service providers.
HOME BUYERS
NEW Home Purchases
Vancouver homes are currently paying 5% GST for new homes. First time home buyers and investors are eligible for GST rebates. The 5% GST will now be replaced with the higher 12% HST, a 7% difference in taxes on the total purchase price of a new home.
The HST program will give partial rebates for new BC homes priced up to $525,000. The government will give a partial rebate on the tax which "theoretically" makes any new B.C. home or Vancouver property $525,000 or less no more expensive than it is today.
The reason I said "theoretically" is because the HST will be applied to any costs and fees associated with your home purchase. This includes legal/notary fees, real estate sales commissions, home inspections, insurance and other closing costs.
IF you purchase a new Vancouver property over $400,000 you will get a maximum BC HST rebate of $20,000. Anything over $400,000 will be taxed.
More information on how the Tax Rebate will be applied.
RESALE Home Purchases
Resale properties will not be directly impacted by the HST. However, since the HST will apply to services such as home inspections, legal fees etc ... expect to pay more for any home purchase.
Investors
Real Estate investment just got harder.
Landlords will face increased costs under the HST, In spite of increased costs due to the HST, landlords will not be able to claim input tax credits for HST paid and cannot collect HST from tenants. Expenses including maintenance costs, repairs, electricity and other services required by landlords will be taxed.
HOME SELLERS
Real Estate sales commissions as well as legal fees will be taxed.
For a comprehensive list of how the HST will affect the Real Estate market visit the BC Real Estate Association Website.
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Averbach Mortgages
604-736-1855
We save you time. We save you money. We get you the you the best mortgage terms at the best interest rates possible.
If you are:
- purchasing your first home
- refinancing
- renewing an existing mortgage
- investing in real estate
- consolidating your debts
- experiencing current or past credit issues
We have the solutions that work for you.
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Mike Averbach
Averbach Mortgages |
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