26 Aug

How Long Does a Consumer Proposal Stay on Your Credit Report in Canada?

Posted by: Michael Greene

A consumer proposal credit report shows a note in the legal/public records section indicating the proceeding type and dates. It won’t haunt your credit forever—but it can feel that way if old notes linger on your file. If you’ve completed your proposal and are ready for a mortgage renewal or new credit, you deserve a clean slate. Let’s break down how long it should stay, what should be removed, and what to do if outdated remarks are still holding you back.

How Long Does a Consumer Proposal Stay on Record?

Most consumer proposals last five years, usually with fixed monthly payments. After completion, the credit bureaus apply different rules:

Equifax: Removed 3 years after completion or 6 years from filing—whichever comes first.
TransUnion: Removed 3 years after completion or 6 years from the date of default—whichever comes first.

👉 Example: If you finished your proposal in early 2022, it should be purged from your report by early 2025, even if you filed it only months before paying it off.

Note: Rules may vary by province. Always confirm directly with Equifax and TransUnion.

What Should Disappear vs. What Should Stay

When a consumer proposal is cleared, it should be removed from:

The public records section of your credit file
Each individual account included in the proposal

If you’re still seeing notes like “Account closed, included in proposal” or “Written off as part of a proposal”, those are outdated and shouldn’t remain once the proposal is gone.

Why Leftover Notes Still Hurt You

Even closed accounts with $0 balances can drag you down if they still carry negative remarks. Lenders—especially mortgage lenders using Equifax—may treat you as if you’re still in recovery, even though you’ve moved on.

Worse, an unnecessary credit denial based on stale notes can further damage your profile, making it harder to qualify for the rates and terms you deserve.

What to Do if Your Credit Report Hasn’t Caught Up

Order your full reports from both Equifax and TransUnion—not just summaries.
Highlight outdated remarks tied to your proposal. Screenshots help.
Hold off on new applications until corrections are made—rejections only make things worse.
File disputes yourself, or work with a professional who knows the system.

Tip: Credit file experts like Richard Moxley (a CMT contributor) specialize in getting Equifax and TransUnion to correct errors effectively.

The Bottom Line

Once your consumer proposal is behind you, your credit report should reflect it. If it doesn’t, that’s not your fault—but it is your responsibility to fix it.

Clean up your report before applying for a mortgage or new credit. A few lingering notes can cost you thousands in higher interest or even lead to declines. Take control now, and you’ll be in a much stronger position to move forward with confidence.

👉 Get a your free credit report here.

Ready to move forward with confidence? Get your credit report cleaned up before applying for a mortgage or new loan. Reach out today and leave your contact information or schedule a 30-minute strategy call and let’s make sure nothing holds you back.

21 Aug

Mortgage Industry Supports Habitat for Humanity: Tackling Housing Affordability

Affordable Housing

Posted by: Michael Greene

The mortgage industry supports Habitat for Humanity in a powerful new partnership aimed at tackling Canada’s housing affordability crisis. Mortgage Professionals Canada (MPC) has pledged $100,000 and volunteer support to help build 10 homes across the country.

This collaboration unites two organizations committed to improving access to affordable housing. It also gives mortgage brokers a meaningful way to raise their profile while making a real difference in Canadian communities.

Why the Mortgage Industry Supports Habitat for Humanity

According to Maxime Stencer, incoming MPC board chair, the partnership is about more than housing—it’s about community.

“Habitat exemplifies people coming together from all walks of life to help their community,” Stencer explains. “For brokers, it’s not just about giving money—it’s about picking up hammers and saws so the community can see mortgage professionals giving back.”

The search for a partner began during MPC’s restructuring last year. Habitat for Humanity stood out because it operates nationwide, aligns with MPC’s mission, and shares a strong focus on affordable homeownership.

Two Organizations, One Mission

Pedro Barata, President and CEO of Habitat for Humanity Canada, emphasizes that Habitat focuses on homeownership opportunities for Canadians facing significant barriers, especially families who struggle to save for a down payment.

“Habitat Canada is about giving families a chance to build equity, stability, and a brighter future,” Barata says. Unlike many public housing efforts that focus on rentals, Habitat’s approach closes the gap by making ownership possible.

Through volunteer support, donated land, and reduced development costs, Habitat helps families move from renting to owning. This effort doesn’t just create homes—it creates stability for generations.

The Proven Impact of Homeownership

The numbers speak for themselves. A 2025 Deloitte Canada study revealed that Habitat homeowners reported:

79% boost in mental health
73% improvement in physical health
44% rise in employment
Better school performance for children
Greater financial security for families

Families who moved into Habitat homes earned 28% more income compared to renting, generating $168 million for Canada’s GDP between 2006 and 2023.

These results highlight why the mortgage industry supports Habitat for Humanity—because affordable homeownership strengthens both families and the economy.

Building Homes, Building Awareness

This partnership doesn’t stop at construction. By collaborating with MPC, Habitat Canada gains more visibility, spreading awareness about its mission nationwide.

“Mortgage professionals understand firsthand the barriers families face,” says Habitat development officer Shahla Habib. “Their support has been incredible, and it’s helping us bring more affordable housing to communities across Canada.”

The mortgage industry’s involvement ensures Canadians see brokers not only as financial experts but also as community builders—literally and figuratively.

Final Thoughts

The mortgage industry supports Habitat for Humanity because the mission is clear: help families achieve affordable homeownership and strengthen Canadian communities.

Together, Mortgage Professionals Canada and Habitat for Humanity are proving that when industries and non-profits unite, the results go far beyond bricks and mortar—they build futures.

I will be volunteering my time to help support the cause in any way that I can. If you would like to volunteer as well reach out to me Mortgage With Mike or 416-820-1891

7 Aug

Greater Toronto Housing Market Heats Up—But Trouble Could Be Brewing Beneath the Surface

Economy

Posted by: Michael Greene

The Greater Toronto housing market roared back to life in July, recording its busiest month in four years. After months of hesitation and economic anxiety, buyers finally jumped back in—but for how long? According to the Toronto Regional Real Estate Board (TRREB), sales jumped 10.9% year-over-year, with 6,100 homes changing hands. It’s a remarkable shift—but experts warn that uncertainty, rising tensions, and dashed expectations could be right around the corner.

Buyers Flood Back—But Not Everyone’s Breathing Easy

Many buyers had spent spring sitting on the sidelines, paralyzed by mixed economic signals and the threat of further financial instability. But come July, that wait-and-see approach flipped—and fast.

“People were holding off,” said Bosley Real Estate broker Davelle Morrison. “But in July, I think people realized this economic limbo might not go away anytime soon. They just had to make their move.”

In other words, many jumped in—not because they were confident, but because they were tired of waiting.

Price Drops Spark Movement—But Relief Could Be Short-Lived

One major driver behind the sales surge? A dip in prices. The average sale price across the Greater Toronto housing market fell 5.5% from last year to $1,051,719, and the benchmark price—a typical home value—also slid 5.4%.

TRREB President Elechia Barry-Sproule called the price adjustment a much-needed break, but she was quick to add: “We still need more relief, especially when it comes to borrowing costs.”

Even with this improvement, the pressure remains high. Affordability is improving slightly, but it’s still tight—and many wonder if this is just a temporary reprieve.

The Spring Slowdown Is Over—But Shadows Linger

Earlier in the year, sales were falling fast:

April: Down 23% year-over-year
May: Down 13%
June: Down 2%

Buyers were spooked by inflation, the uncertain U.S.–Canada trade environment, and rising interest rates. But in July, the floodgates reopened.

“We had clients who paused in March and April, some came back in July, but even now, a lot of people are still uneasy.” said Davelle Morrison, a broker with Bosley Real Estate Ltd.

Inventory Is Rising, But So Are the Stakes

The Greater Toronto housing market also saw a significant increase in inventory:

New listings in July: 17,613 (up 5.7% from July 2024)
Active listings: 30,215 (up 26.2%)

More listings should mean more choice—but with more choice comes more pressure, especially for sellers trying to hit lofty price targets.

TRREB’s Chief Market Analyst, Jason Mercer, noted that while more homes are available, the broader Canadian economy is still treading water. The housing sector may be providing a boost—but it’s not enough to calm the storm just yet.

Bank of Canada Holds Rates, But Anxiety Remains High

The Bank of Canada left its key interest rate untouched at 2.75%—the third pause in a row. While it hinted at future rate cuts, no one’s holding their breath. Inflation is still sticky, and uncertainty around trade and consumer spending looms large.

Governor Tiff Macklem said the economy has shown “some resilience,” but also admitted the fight against inflation is far from over.

The Fall Market Could Be Rocky—Don’t Count on a Repeat

Despite the recent burst of activity, experts say the fall market might struggle to keep the momentum going.

“I’m not expecting fireworks in the fall,” said Morrison. “There are sellers who think they’ll relist and get their spring prices—and I just don’t see that happening.”

Sellers hoping for a bidding war may be disappointed. The market is stabilizing, but not necessarily in a good way.

Where the Sales Happened—and What Types of Homes Moved

The Greater Toronto housing market saw growth across the board in July:

City of Toronto: 2,205 sales (up 11%)
Rest of GTA: 3,895 sales (up 10.9%)
Semi-detached homes: up 25.5%
Detached homes: up 11.3%
Townhouses: up 7.9%
Condos: up 5.8%

Final Thoughts: Is This a Comeback or a Cautionary Tale?

Yes, the Greater Toronto housing market just had its strongest July since 2021. But while the numbers are up, so are the risks. Beneath the surface lies uncertainty, inflation pressure, and cautious consumer sentiment.

Buyers and sellers alike should proceed with care—this market may be warming up, but the temperature can change fast

✅ Ready to Make a Move in the Greater Toronto Housing Market?

Whether you’re buying, selling, or just trying to figure out your next step, now is the time to get expert guidance. The market is shifting—and the right strategy could save you thousands.

📞 Book a free 15-minute consultation
📩 Get custom mortgage advice based on today’s rates
🔍 Explore your buying power before the fall market hits

👉 Click here to get started or call (416-820-1891) — let’s navigate the market together.

18 Jul

Pandemic Purchases Now Underwater for Some Canadian Homeowners

Homeownership

Posted by: Michael Greene

Let’s be candid: If you bought a home during the pandemic rush, especially in one of Canada’s “boomtowns,” you might be feeling the pressure today. A growing number of homeowners are finding themselves in a tough spot — owing more on their mortgage than what their home is currently worth.

What happened?

When COVID-19 hit, a lot changed — including how Canadians viewed their living space. With record-low interest rates, remote work becoming the norm, and a desire for more space, people made big moves. Literally.

From the Greater Toronto Area to suburban pockets in Ontario, B.C., and Alberta, buyers jumped into the market, hoping to lock in a low rate and ride the price wave. And for a while, that worked.

But now that wave has pulled back.

According to the Canada Mortgage and Housing Corporation (CMHC), the pandemic-driven housing boom saw home prices in many regions spike by over 50% between 2020 and early 2022. Now, in 2024–2025, some of those same markets have seen values dip anywhere from 10% to 20% depending on location and property type.

The result?

A growing number of homeowners are “underwater” — meaning their mortgage balance is higher than their home’s current market value. That makes selling difficult and refinancing even tougher.

Recent data from Equifax Canada shows that mortgage delinquencies are starting to rise, particularly among newer homeowners and in provinces that saw the sharpest price increases and subsequent declines.

In some Ontario suburbs, like Durham Region, Barrie, and Niagara, values are down significantly from their peak. And if you put less than 20% down — or took on a variable-rate mortgage — the numbers might not be in your favour right now.

What’s causing this imbalance?

It’s a combination of:

Higher interest rates: The Bank of Canada has pushed its key rate from 0.25% in 2021 to 5% by mid-2025. That’s cooled demand — fast.
Increased inventory: Builders responded to the pandemic demand by ramping up construction. Now some of those homes are sitting on the market longer.
Price correction: After the frenzy of 2021, many markets are simply rebalancing. This isn’t a crash — it’s a recalibration.

What does this mean if you’re looking to sell?

If you’re underwater, selling might not cover your mortgage. That means you’d have to make up the shortfall out-of-pocket — a tough pill to swallow, especially in a time of higher cost of living.

So, should you panic?

No. Let’s keep things in perspective.

While some buyers are underwater on paper, that doesn’t necessarily mean disaster. If you plan to stay in your home and ride this out, time is on your side. Canada’s population is growing (thanks to strong immigration), and long-term housing demand remains solid — especially in cities like Toronto, Ottawa, Calgary, and Halifax.

But if you need to sell or refinance soon, it’s important to get the right advice. There are options — including second mortgages, equity take-outs, or alternative lending strategies — but you need to approach it smartly.

Bottom line?
The pandemic housing frenzy left some scars. But if you’re feeling stuck, don’t stress in silence. Reach out. Let’s talk strategy, not panic. You’ve got options — even if things feel tight right now.

— Mortgage With Mike

16 Jun

Prefab Backyard Homes: Build Smart, Live Better

Prefab

Posted by: Michael Greene

Looking for extra income, space for loved ones, or a creative way to add housing? Prefab backyard homes might be the solution you’ve been waiting for. With faster build times, lower costs, and growing government incentives—this once “alternative” idea is now going mainstream.

Let’s break down why prefab homes and secondary suites are on the rise, how much they cost, what funding is available (some up to $90,000!), and how real Canadians are using them to change the game.

Why Prefab Homes Are Booming

Prefab homes (also known as modular or factory-built homes) are built off-site, then delivered and assembled on your property. They’re fast, efficient, and designed to meet the same building codes as traditional houses.

Top benefits:

Faster builds – Often move-in ready in weeks
Lower costs – Fewer surprises and less waste
Eco-friendly – Smaller carbon footprint
Zoning-friendly – Many cities now allow garden or laneway suites
Government support – Big incentives for homeowners

This isn’t just about trends—it’s about real solutions for housing supply, affordability, and family living.

Funding for Prefab Backyard Homes: What’s Available?

Cities across Canada are offering generous incentives for homeowners who add an Additional Residential Unit (ARU) like a prefab suite or laneway home. The goal? Boost affordable rental options and support multi-generational living.

Example: London, Ontario

$45,000 interest-free loan – repayable over 9 years
$45,000 forgivable loan – if rented below market rate for 10 years

That’s up to $90,000 in support for homeowners—no developer status needed.

Other Municipal Incentives

Toronto – Up to $50,000 forgivable loan
St. Catharines – Up to $80,000 in grants
Peel Region – Up to $30,000 forgivable loan
Ottawa – Offers zoning and planning support

Requirements typically include:

Long-term rentals (not Airbnb-style)
Affordable rent based on CMHC guidelines
Local permit and insurance compliance

Real Story: The Bakers’ Backyard Prefab Success

Mark and Sarah Baker built a 750 sq. ft. prefab suite behind their home. They worked with Axe Living, a modular builder in Ontario. The results?

Unit arrived 80% complete
Move-in ready in under 3 weeks
Built for about $300/sq. ft., including taxes and hookups
Cheaper than traditional construction by 25–30%

With municipal funding, their build became even more affordable.

How to Finance a Prefab Backyard Home

You don’t need to refinance your whole mortgage to fund a secondary suite. Here are smart financing options:

HELOC – Flexible, great for homeowners with equity
CMHC Secondary Suite Refinance Program – Borrow up to 90% of your home’s value
Construction loan – Good for larger or staged builds
Second mortgage – Useful if you want to leave your first mortgage intact

Tip: Work with a mortgage advisor who understands ARUs and prefab housing.

Insurance for Prefab Homes: What to Watch Out For

Not all insurers understand modular homes yet. The Bakers had to switch insurers when theirs declined coverage. Their new policy came with a 40% premium increase.

To avoid surprises:

Call your provider early
Ask specifically about prefab and ARU coverage
Confirm both homes are fully insured

What If You Sell Before the Loan Term Ends?

Good news: in cities like London, the forgivable loan may transfer to a new owner—if they continue to rent the unit affordably. If not, a portion of the loan may need to be repaid.

This flexibility makes prefab homes a great investment even if you plan to sell in a few years.

Prefab Homes for Families

Prefab homes aren’t just about income—they’re a lifeline for families.

Help aging parents live independently
Support loved ones with disabilities
Keep adult children nearby without crowding
Stay close, while respecting privacy

Programs like London’s forgivable loan help make this kind of housing truly attainable.

Ready to Explore Prefab Homes?

If you’ve got the space and the vision, now is the time. Between funding options, faster builds, and flexible zoning, prefab homes are finally getting their moment.

Your next step? Let’s talk.

As a mortgage professional, I help homeowners like you finance modular builds, unlock equity, and take advantage of municipal grants. I’ll walk you through it.

📞 Call today or book a free consultation to explore your options.

13 Jun

The Government’s Plan To Use The GST Rebate To Help More People Buy

Pre-Construction

Posted by: Michael Greene

The Canadian government wants to help people buy new homes by giving a GST rebate, which means buyers get some tax money back.

But, there’s a big question: How much will it cost?

The government says $3.9 billion over five years, but another group thinks it’ll be about $2 billion. That’s a big difference!

What Are Canada’s Big Challenges in 2025?

Before we look at homes, let’s see what’s going on in Canada this year:

Trade wars: The U.S. has put new tariffs on Canadian goods, like lumber and aluminum, making it harder for Canadian companies and builders.
Slow population growth: Canada is taking in fewer new people, so fewer new workers and home buyers according to monitory policy report from the Bank of Canada
Rising unemployment: Canada’s job trouble continues as more people are without jobs—around 7% in May, the highest it’s been in nearly 9 years
Interest rates changing: The Bank of Canada is cutting rates to help, but people still owe a lot and get less spending room.

In short, Canadians are feeling worried about spending money. Jobs and housing prices haven’t been great lately .

How the GST Rebate Might Help

By giving money back to new home buyers, the government hopes:

More people will buy newly-built homes.
Builders will start more houses and condos—especially in cities like Toronto where condo sales are slow.
This could create jobs for builders and more homes for families.

But Let’s Talk About the Problems

Building things isn’t easy right now. Here’s why:

High costs: It costs a lot to borrow money and buy materials.
Fewer skilled workers: Many experienced builders are retiring.
Paperwork delays: Building permits take a long time.
Trade issues: The tariffs make things more expensive

Plus, if people think they’ll get a rebate, builders might raise their prices for materials and labour. That means houses might not get cheaper—just cost more. That could make it harder for everyone.

When Would the Rebate Start?

If the parliament agrees, here’s the idea:

Applies to new homes bought from May 27, 2025, to 2031.
Construction has to start by 2031 and finish by 2036.
It’s packaged with a tax cut that starts July 1, 2025.

✅ Why It Matters

Right now, Canada’s economy is having a tough time—with trade tensions, fewer jobs, and slow population growth. The GST rebate might help by encouraging more homebuilding and giving buyers a break.

🗣️ What Is Being Said

The government believes the GST rebate can help people afford homes and restart construction. But experts warn that unless more houses are built fast, costs won’t come down. We might even see prices go up if builders just raise their prices.

💭 My Opinion

I think the rebate could be a smart start to help Canadians buy homes in 2025—but only if it’s matched with bigger efforts to simplify building permits, train workers, and reduce trade costs. Without that support, it could end up just making houses more expensive—and that’s the last thing people need.

12 May

Ontario’s Housing Legislation: Faster Builds, Fewer Delays

Housing

Posted by: Michael Greene

Big changes are coming to the housing market by way of the Ontario’s Housing Legislation. On Monday, the province is introducing sweeping new legislation aimed at fast-tracking construction and tackling the housing crisis head-on. Whether you’re a buyer, builder, or investor, this move is worth watching.

The headline? Ontario’s Housing Legislation—officially called the Protect Ontario by Building Faster and Smarter Act—is giving the province more control over how, where, and how fast housing gets built.

What’s Changing Under Ontario’s Housing Legislation?

Expanded Minister’s Zoning Orders (MZOs): The province is doubling down on its use of MZOs, which allow them to override municipal planning processes and fast-track developments. That means less waiting, more building.
Standardized Development Charges: Development fees (used by cities to fund sewers, roads, and other services) will be standardized and paid at the end of construction, not upfront. This move aims to ease cash flow for builders—but could strain municipal budgets in the short term.
No Extra Studies or Local Rules: Municipalities will no longer be able to require additional studies or construction requirements that go beyond Ontario’s provincial building code. It’s one set of rules across the board.
School Boards Get More Power: School boards can now bypass some municipal approvals to add portables or new school buildings more quickly—great news for growing communities.
“Buy Canadian” Focus: The bill encourages the use of Canadian-made building materials to support local industry and stabilize supply chains.

Why Ontario’s Housing Legislation Matters

For homebuyer, this legislation could accelerate the pace of new housing, especially in high-demand areas. More housing options usually help cool prices and increase inventory—though there are still a lot of moving parts.

For builder or investor, these changes reduce financial pressure up front and potentially make projects more feasible. Less red tape means faster timelines—but you’ll need to keep up with new provincial regulations.

For municipal leader, this is where it gets tricky. Cities rely heavily on development fees to fund local infrastructure. Delaying that revenue could impact roads, water systems, and other vital services unless the province steps in to help.

What the Province Is Saying

Rob Flack, Ontario’s Minister of Municipal Affairs and Housing, called it a bold step to tackle economic uncertainty and accelerate home construction. “We are pulling out all the stops,” he said, noting that the plan responds to feedback from municipal leaders who are also looking for faster housing solutions.

Vaughan’s mayor called the legislation “bold and creative,” while Mississauga’s mayor welcomed it as “much needed support” to cut red tape.

My Take as a Mortgage Agent:

Ontario’s Housing Legislation sends a clear message: the province is willing to take the wheel to hit its housing targets. For buyers, it may mean more supply and slightly more breathing room in the long term. For developers, it’s a boost in momentum. For cities—well, the transition could be rocky, but the goal is clear: build more, faster.

It’s too early to say how everything will unfold, but one thing’s certain—if you’re thinking about buying, building, or investing in Ontario real estate, staying informed will be your biggest asset.

Have questions about how this might impact your mortgage strategy, construction financing, or investment property planning? Reach out—let’s talk about how to stay ahead in a fast-changing market.

30 Jan

Variable Rate Mortgage Holders Celebrate With Rate Announcement

Prime Rate Drop: What Homeowners and Buyers Need to Know

On Wednesday, Canada’s six major banks announced a quarter-percentage-point reduction in their prime rates, dropping from 5.45% to 5.2%. This follows the Bank of Canada’s decision to lower its key interest rate for the sixth time since June, bringing it down to 3%. The central bank stated that inflation is hovering near its 2% target as the economy gains momentum.

This change will likely result in lower variable mortgage rates across Canadian lenders. My calculations show that for a homebuyer who made a 10% down payment on an average Canadian home, priced at $700,0000 as of December 2024, the reduction would translate to roughly $83 less in monthly payments on a five-year variable mortgage.

While fixed mortgage rates are expected to decrease slightly, driven by bond yields dropping to around 2.8% following the central bank’s announcement, investors are concerned that inflation may limit any significant drops in fixed rates.

Homeowners with variable-rate mortgages are likely to feel the impact immediately. Those with adjustable-rate mortgages will see their monthly payments decrease, while those with a fixed payment schedule will have more of their payment applied to the principal rather than interest.

For example, I estimate that a homeowner with a variable mortgage rate of 4.45% over 25 years, currently paying $3,458 per month, would see their rate drop to 4.2%, lowering their payments to $3,371—a savings of $1,044 per year.

Homeowners with a variable-rate mortgage can expect to save around $16 per month for every $100,000 of mortgage debt with each quarter-percentage-point decrease. He also noted that this rate cut arrives at a time of economic uncertainty, though there’s potential for growth in home sales.

“These successive rate cuts are good news for homeowners and those renewing their mortgages,” Tran said. “While the housing market is showing signs of life, it’s not the frenzy some anticipated. Buyers are in a strong position to take their time finding the right property and making conditional offers on financing and inspections.”

Since the peak of borrowing costs in August 2023, homeowners who put a 10% down payment on an average-priced home with a five-year variable mortgage have seen their payments drop by $680, according to research. At the height of rates, a 5.95% variable mortgage on a $660,000 home would have resulted in monthly payments of $3,850. With current rates at 3.95%, that figure has dropped to $3,155.

Phil Soper, president and CEO of Royal LePage, said the Bank of Canada’s latest rate cut could boost borrowing power for homebuyers. “This decrease comes right before the spring housing market, a time when demand typically increases. We should expect an uptick in buying and selling activity in the coming weeks,” Soper noted.

However, be cautioned by the potential U.S. tariffs expected to transpire on February 1st, 2025. A remain concern for both the central bank and consumers, adding an element of uncertainty to the housing market.

In conclusion:

With the latest rate cuts from the Bank of Canada and the major banks following suit, homeowners and buyers are seeing tangible relief in their mortgage payments. While variable-rate mortgage holders stand to benefit the most, even fixed-rate borrowers could see slight reductions. As the spring housing market approaches, this rate drop may help boost real estate activity, giving buyers more flexibility and negotiating power. However, lingering economic uncertainties, such as potential U.S. tariffs, remain in the background, reminding consumers to stay cautious as they navigate the evolving market.

Whether you’re considering refinancing, renewing, or entering the housing market, connect with a Mortgage With Mike today to explore how these changes can benefit you.

4 Nov

Condo in Crisis: What to Do if Your New Purchase Faces Receivership

Pre-Construction

Posted by: Michael Greene

Is Your Condo Project Facing Receivership?

Picture this: You’ve been excitedly waiting for your new condominium to be completed in just a few months. All day, you’ve been imagining how you’ll decorate it, learning about local shops, and planning your housewarming party. Then, suddenly, the builder stops sending updates. You turn on the news and discover that your condo project has gone into receivership.

This exact situation happened to one of my clients, someone I had been working with on other pre-construction purchases. Unfortunately, it’s becoming an all-too-common story as real estate receiverships increase across Canada.

But before you panic, let’s break down what this means for you.

Understanding Receivership: What It Means for Your New Condo

Receivership occurs when a secured creditor appoints a receiver to take control of a property, typically to sell it and recover the funds owed by the developer. A receiver is usually a property expert who steps in to manage the project’s finances and steer it back on track.

Think of receivership as a financial lifeline for a troubled project. If a developer can’t meet its debt obligations, a court appoints a receiver to take control of the situation. Receivership is serious and not every developer qualifies for it, but when granted, the receiver analyzes the project’s finances to determine whether it’s feasible to complete it. If the costs are too high, drastic measures may follow.

Types of Receivership

There are two types of receivers:

Court-appointed receiver: A court officer who must report to the court throughout the process. The receiver’s fees usually take 25% of the collected funds, plus expenses, paid by the judgment debtor.
Privately-appointed receiver: Appointed by a secured creditor, this type focuses on recovering debts.

One Example:

Last year, the Iconic “The One” skyscraper project at Yonge and Bloor in Toronto entered receivership due to $1.6 billion in unpaid debt. A court-appointed receiver took control after the developers defaulted. Today, construction continues, with an expected completion date in March 2025.

What Happens When Your Condo Goes Into Receivership?

When a condo project enters receivership, the future of pre-sale contracts depends on the receiver’s decision. They can either continue or cancel the project:

Continue: If the receiver chooses to proceed, existing agreements remain in effect.
Cancel: If the project isn’t financially viable, the agreements may be terminated. In this case, buyers might claim their deposits and potentially take legal action, but recovering funds can be difficult given the developer’s insolvency.

A receiver, not the developer, has the authority to sell the project to another builder or take control of the assets. They may also seek Debtor-in-Possession (DIP) financing, allowing the developer to remain in control while restructuring to complete the project.

DIP loans, though regulated and costly, give developers the funds and time to finish a project in receivership. These loans are more likely to be approved for developments in high-demand areas, as stopping construction in such locations reflects poorly on local governments.

Protecting Your Financial Interests

When you enter a new construction property agreement and provide a deposit, programs like Tarion in Ontario offer protection. According to Tarion’s website, protection applies if:

The builder goes bankrupt.
The builder fundamentally breaches the purchase agreement.
You have a statutory right to treat the agreement as terminated.

For freehold homes purchased after January 1, 2018, Tarion covers deposits up to $50,000 or 10% of the purchase price (to a maximum of $100,000 for homes over $600,000). Condo buyers enjoy extra protection under the Condominium Act, which mandates that developers hold deposits in trust.

Developers must also provide a Delayed Occupancy Warranty, ensuring your condo is ready for occupancy by a specified date. If the developer misses this deadline due to construction delays or receivership, they must compensate you. A PDF copy of the warranty can be downloaded here for your reference.

Steps to Take When Your Condominium Goes Into Receivership

If your condo goes into receivership, here are steps to safeguard your investment:

Contact the Receiver
Reach out to the court-appointed receiver to get updates on the project. They can inform you about the next steps.
Review Your Purchase Agreement
Carefully examine your contract for any clauses about delays, receivership, or deposit protection. This helps clarify your rights.
Check for Deposit Protection
Verify whether your deposit is covered by programs like Tarion, and file a claim if necessary.
Consult Your Real Estate Lawyer
A lawyer specializing in real estate or condominium law can guide you through your legal options, including deposit recovery or claims against the developer.
Stay Informed
Keep up with updates from the receiver. They may attempt to sell the project to another builder or secure additional financing to complete it.
Prepare for Delays
Be ready for significant delays or, in the worst case, the cancellation of the project.
Understand the Possible Outcomes
If the project continues, expect delays. If it is canceled, you may be eligible for a refund, though recovery amounts will vary based on the developer’s financial state.
Consider Legal Action for Damages
In rare cases, buyers may pursue additional damages beyond their deposits. However, this depends on the developer’s solvency and the available assets.

To Sum It All Up

Receivership is often a temporary measure, aimed at getting the project back on track. While dealing with a property receivership can be overwhelming, staying informed, seeking legal advice, and understanding your rights can help protect your investment. Whether the project moves forward or gets canceled, having a clear plan will ensure you’re ready for whatever comes next.

If your condo project is in receivership or you have questions about real estate investments, reach out to Mortgage With Mike today. Our team is here to help you through every step of the process, protecting your financial interests. Schedule your free, no-obligation 15-minute consultation now!

3 Nov

Boost Your Income and Property Value with The Secondary Suite Refinance Program

Refinancing

Posted by: Michael Greene

Ontario’s New Secondary Suite Refinance Program is designed to expand the availability of affordable housing by offering financial aid to homeowners interested in adding secondary suites. These suites, commonly referred to as accessory dwelling units (ADUs), can be a great asset to your property, providing extra income while helping address the housing shortage.

Program Highlights

The Secondary Suite Refinance Program provides several important benefits to qualifying homeowners:

Up to $40,000 in forgivable loans, covering 50% of the costs to build new secondary suites.
Homeowners can now refinance up to 90% of their home’s value, including the potential value of the secondary suite they plan to build. This allows them to borrow a larger sum of money by tapping into the increased value of their property.
The refinanced mortgage can be amortized over a period of up to 30 years, making monthly payments more manageable for homeowners. This longer amortization period spreads the loan out over a longer time, reducing financial strain.
To ensure that homeowners across all regions can take advantage of the new regulations, the government has increased the mortgage insurance limit to $2 million. This applies to those who are refinancing specifically to build a secondary suite, providing flexibility for homeowners in higher-priced housing markets.
Supports the creation of basement apartments, laneway houses, and garden suites.
Encourages affordable rentals by requiring units to be rented below market rates.
Promotes accessible housing by providing support for building suites that cater to seniors and people with disabilities.

Who Can Apply

To be eligible for the Secondary Suite Incentive Program, homeowners must meet the following conditions:

Must be the registered owner and occupy the property as their main residence.
Have a combined annual income of less than $209,420 for all property owners.
The property’s assessed value must be below the homeowner grant threshold (set at $2.15 million in 2024).
Acquire all necessary building permits from local authorities before starting construction.
Rent out the unit at a rate below the market average for a minimum of five years to receive loan forgiveness.

How to Apply

Follow these steps to successfully apply for the Secondary Suite Incentive Program:

Assess Your Property: Evaluate the potential for adding a secondary suite and consult local zoning regulations to ensure compliance.
Secure Funding: Explore financing options to ensure you can cover your portion of the construction costs.
Obtain Permits: Submit the necessary permit applications to your local municipality, ensuring your plans meet all zoning and building code requirements.
Submit Your Application: Complete the program’s application form, providing all required documents, including income proof, property ownership details, and building permits.
Build the Suite: Once your application is approved, begin construction. Ensure all work is inspected and meets required standards.
Rent the Unit: Upon completion, rent the suite at the below-market rate for at least five years to qualify for loan forgiveness.

What is a secondary suite?

A secondary suite is a self-contained living space located within a single-family home or on the same property. It typically includes its own separate entrance, kitchen, bathroom, and living areas, making it independent from the main household. These suites are often referred to as basement apartments, in-law suites, or granny flats.

Secondary suites can be created by converting existing spaces, such as basements, garages, or attics, or by building a new structure like a coach house or laneway home on the property. They provide additional housing units within a residential area and can be rented out to generate extra income or used to accommodate family members, such as elderly parents or adult children.

In many cities, the construction of secondary suites is regulated by local bylaws, which specify requirements such as minimum size, zoning, and safety standards. These units are increasingly popular as a solution to housing shortages and as a way for homeowners to make more efficient use of their properties.

Primary unit and secondary unit examples.

Why Build a Secondary Suite?

There are several benefits to adding a secondary suite to your property:

Extra Income: Generate rental income to help with your mortgage or other expenses.
Boost Property Value: Increase your home’s value by adding a rentable unit.
Contribute to Affordable Housing: Help provide affordable housing options within your community.
Housing Flexibility: Use the unit to accommodate family members, like elderly parents or adult children, while maintaining privacy.

Questions to ask when Considering Building a Rental Suite?

Is there demand for rental housing in your neighborhood?

Have you researched how much it will cost to build your suite?

Have you spoken to your lender about financing options?

Can you afford to build a suite, even if there are delays or additional costs?

Can you meet all zoning requirements?

Can you meet all building code requirements?

Do you want to be a landlord and rent the suite out long-term?

Can you afford the mortgage or loan payments if the suite is not rented for a few months?

Conclusion

The Secondary Suite Incentive Program in Ontario provides a valuable opportunity for homeowners to improve their financial situation while making a positive impact on the community. By understanding the program’s requirements and following the application steps, you can successfully develop a secondary suite that benefits both your family and the wider community.

Thinking of taking on a project like this?

Partnering with a knowledgeable mortgage broker like Mortgage With Mike will empower you to make informed decisions. Your mortgage is a fundamental aspect of your financial future, and it’s essential to ensure it’s built on solid ground.

Get in touch with us today to discover how we can assist you on your journey to homeownership.