Mortgage stress test rules

[Cecil Terwilliger]

Originally Posted by Calgary14

If the amount has to be paid back when the house is sold what happens if there's negative equity on the sale, would CMHC then take a loss and write off the loan?

There would likely be a minimum repayment regardless of the value of the home.

[troutman]

Originally Posted by Calgary14

If the amount has to be paid back when the house is sold what happens if there's negative equity on the sale, would CMHC then take a loss and write off the loan?

I think they would still hold the borrowers personally liable for the deficit, and try to collect.

[Hockey Fan #751]

Originally Posted by troutman

Buying a home? CMHC could soon kick in 10% of the cost — for a price

https://www.cbc.ca/news/business/bud...yers-1.5063204

I feel like this is just going to raise housing prices and cancel itself out in terms of benefits to the home buyer.

[Fire]

Originally Posted by Hockey Fan #751

I feel like this is just going to raise housing prices and cancel itself out in terms of benefits to the home buyer.

Yup, the government really should leave the house market alone and let it correct. Prices were dropping which of course would help new home buyers.

[bluejays]

Originally Posted by Fire

Yup, the government really should leave the house market alone and let it correct. Prices were dropping which of course would help new home buyers.

I think it's more than just that. Homes by default are for living. Because they've done so well as investments over the past 20 years, the living aspect has fallen to greed taking over. So with high prices, rents have increased and so affordable housing has gone out the window. Then land transfer taxes are high, so supply has been restrained where if you want to sell your house, you want to recoup those fees as part of the appreciation, so sellers have held on until it appreciates enough, along with a healthy profit for ones self. Getting back to basics though, housing should be used as a dwelling, more than an investment. We've gotten away from that. In Canada culturally home ownership is what we strive for and though prices have increased so much because of investing, there is still a push for owning at any cost. That I don't think most people would argue, has created a bubble. People like myself still want in, not for investment purposes necessarily, but because we need a dwelling. Personally I don't care if it stagnates once I get in, but it's better to own than rent. I still strongly believe foreign investors, whatever percentage of them make up the market, should be taxed much higher for ownership as they're not using it for a dwelling.

[troutman]

Land transfer fees are not high in Alberta, compared to BC.

[puckedoff]

Safe to say now is a good time to buy a $440K house and list it at $480K once the new rules kick in? In theory, it is the same pool of buyers both times.

[Weitz]

Originally Posted by puckedoff

Safe to say now is a good time to buy a $440K house and list it at $480K once the new rules kick in? In theory, it is the same pool of buyers both times.

The return (if any) there is tiny for the amount of work though.

[GullFoss]

Not sure a lot of people would take government up on the offer of taking equity in their homes. All it does is serve to increase the max price of home they can buy...at a cost.

If government kicks in 10% of new build cost and you make $80k per year, it takes your max home price from ~$400k to ~$440k. Is that meaningful? To take advantage:

1) you have to be interested in a new build

2) you still end up having to pay maintenance fees and property taxes on $440k of home even though you only own $400k of house

3) if you do a renovation project before you sell, you end up subsidizing the government

What's the difference between a $400k and $440k home? For a new condo in Calgary, the difference is 650 sqft vs 710 sqft, which feels meaningless. Or it's the cost of a few upgrades. Can't see a huge take up - and even if there is:

1) it won't impact housing prices

2) it won't impact affordability. You'd save $100-$200 on a mortgage payment each month

It's just a solution for which there is no problem

[_Q_]

I want to see the government grow some balls and just do something drastic. Make it straight up illegal to own a home if you're not a Canadian citizen or permanent resident. Any current property that's owned by a foreigner has a one year grace period, then tax it at 25% of the property value per year.

Canadian homes should be for Canadians.

[troutman]

Originally Posted by _Q_

Canadian homes should be for Canadians.

How many Canadians have homes in Phoenix?

[_Q_]

Originally Posted by troutman

How many Canadians have homes in Phoenix?

Probably a few... But most don't. Why does that matter?

[Bonded]

Originally Posted by _Q_

I want to see the government grow some balls and just do something drastic. Make it straight up illegal to own a home if you're not a Canadian citizen or permanent resident. Any current property that's owned by a foreigner has a one year grace period, then tax it at 25% of the property value per year.

Canadian homes should be for Canadians.

That would be suicide for any government to do that so they won't. It is why the Liberals are looking for a way to stop house prices sliding now. I think whatever government is in power for a housing market tank will be shown the door. Also, are we going to stop all inflows of foreign investment capital?

[puckedoff]

If we banned foreign purchases of our real estate we would quickly find out just how ####ty our real economy is.

[81MC]

I think it’s bull#### that part of our federal contributions are going to support new home purchases. Why the #### is the government giving money to help people buy new homes they can’t afford? Jesus Christ what a ridiculous idea.

[Cecil Terwilliger]

Originally Posted by _Q_

Probably a few... But most don't. Why does that matter?

Because if we do it to Americans, they’ll do it to us and anyone who owns a house in the US will be screwed. That kind of tax would devastate many Canadian seniors.

[Weitz]

Originally Posted by 81MC

I think it’s bull#### that part of our federal contributions are going to support new home purchases. Why the #### is the government giving money to help people buy new homes they can’t afford? Jesus Christ what a ridiculous idea.

Is CHMC fully funded by the feds? I don't know its inner workings.

[Cecil Terwilliger]

Originally Posted by 81MC

I think it’s bull#### that part of our federal contributions are going to support new home purchases. Why the #### is the government giving money to help people buy new homes they can’t afford? Jesus Christ what a ridiculous idea.

How about the government helping people with children they can’t afford?

[OMG!WTF!]

Originally Posted by Weitz

Is CHMC fully funded by the feds? I don't know its inner workings.

I think CMHC is funded by the premiums it collects.

[TheIronMaiden]

Originally Posted by GullFoss

Not sure a lot of people would take government up on the offer of taking equity in their homes. All it does is serve to increase the max price of home they can buy...at a cost.

If government kicks in 10% of new build cost and you make $80k per year, it takes your max home price from ~$400k to ~$440k. Is that meaningful? To take advantage:

1) you have to be interested in a new build

2) you still end up having to pay maintenance fees and property taxes on $440k of home even though you only own $400k of house

3) if you do a renovation project before you sell, you end up subsidizing the government

What's the difference between a $400k and $440k home? For a new condo in Calgary, the difference is 650 sqft vs 710 sqft, which feels meaningless. Or it's the cost of a few upgrades. Can't see a huge take up - and even if there is:

1) it won't impact housing prices

2) it won't impact affordability. You'd save $100-$200 on a mortgage payment each month

It's just a solution for which there is no problem

I think that you raise some very well reasoned points. But saving $100-$200 on a mortgage payment each month can mean the difference between affordability and non affordability for a lot of people.