Realtors(r) and Mortgage Brokers alike could get burnt this year by our own industry, so BUY now before it’s too late. I was reading this article in the Financial Post yesterday and couldn’t help but think, we’re toast when it comes to buying a home.
You see, just like 15% of Canadians, we are”Self Employed” and these proposed new mortgage rules, held ready for if the market get’s TOO HOT could end up reducing our ability to buy and own a home. Under the new rules banks and other lenders would be forced to look at self-employed individuals NET income as opposed to their “declared” income, otherwise they would need to have MORE than 20% down.
Gone would be the days of your home office and car as a write off, you still may need them to do your business but if you write them off your taxes, you write them out of your income. In the eyes of the lenders under the new rules, you make much less money than you think you make so it’s either time to buy now before the new rules are considered, or you better get saving cause you’ll need a larger nest egg in the future.
The other startling change is the proposal to count 100% of condo fees towards a buyers debt load, don’t get me wrong, it makes complete sense, it’s just that at this point in the game that moves a large segment of the first time home buyers out of the running. Under the current rules they count 50% of the fees, but a $400 condo fee could mean a $50,000 difference in what a buyer could afford between the old rules and new rules.
I could see this a the impetus for a massive cooling of the condo market, think about it, you can either buy a condo $X or a freehold home for $X+$50,000 more, what are you going to consider?
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