Christine Buemann Mortgage Broker

Canadians keep taking on more debt even as they get poorer, a new Statistics Canada report shows Average household debt in Canada hit a new record high of almost 153 per cent to disposable income in the third quarter, a sizable jump from 150.7 per cent the previous quarter, the agency reported Tuesday. As well, household net worth declined by 2.1 per cent to $180,100 from $184,700, the sharpest drop in almost three years as the value of pensions and stock investments declined. The report came a day after Bank of Canada governor Mark Carney again warned about the dangers of household debt poses to the economy going forward. Canadians are more indebted now than the Americans and British, Carney noted, saying that they need to move to bring debt accumulation in line with income growth, which is modest. Debt rose at about twice the pace of income during the quarter. For the rest of the story… Industry News - Canadian households still taking on more debt: StatsCan - Article

John Greenwood Dec 8, 2011 – 12:01 PM ET The Bank of Canada is warning that conditions in the global financial system have “deteriorated significantly” since the summer because of the worsening European debt crisis and weaker world-wide economic outlook. Despite the relative health of the domestic banking system, the rise in negative pressures worldwide will likely have a “considerable impact” in this country, the central bank said in the latest edition of its biannual Financial System Review. In its starkest warning since the beginning of the turmoil, it said stability of the Canadian banking system faces a “very high risk” from the turmoil in Europe, which it deems by far the most serious threat. The comments come the same day as leaders of European countries are set to gather to hammer out a deal on revisions to the eurozone treaty aimed at avoiding a potential collapse of the currency region. According to the Bank of Canada, the risks have “increased markedly” since June.

The Bank of Canada met yesterday and decided to maintain its target for the overnight rate at 1% as anticipated. In turn, prime rate will remain at 3.00% http://www.bankofcanada.ca/monetary-policy-introduction/key-interest-rate/ www.christinebuemann.com

OTTAWA — Canadians are taking on less mortgage debt, slowing a trend that had top government officials worried about the state of consumers' household finances. The Canadian Mortgage and Housing Corp. said Tuesday in its third-quarter report that the growth of mortgage loans has slowed down to an average of just under $160,000. That reflects tougher lending rules imposed by Ottawa and a slowing economy, which has put downward pressure on house prices. The agency also noted that mortgage insurance bought by homeowners facing high-ratio debts fell by about 10 per cent, "The level of household debt remains a concern but there are encouraging signals," CMHC said. A weaker economy has made consumers more cautious and less likely to take on higher personal loans, lines of credit, car loans and credit card debt. A slowdown in mortgage debt also suggests Canadians are putting more money down on a house and avoiding high-risk mortgages. CMHC noted that there was a drastic s

ANNOUNCING - STILL AVAILABLE… A NEW LIMITED TIME RESIDENTIAL 5 YEAR FIXED RATE MORTGAGE SPECIAL!! *2.99% for PURCHASES & REFINANCES In order to qualify the deal must be: · CMHC insured and fully qualifying (full documents) · Owner Occupied · The deal must close by December 12, 2011 If you can get 2.99% on your $200,000 mortgage* instead of the average of 3.69%, you would be saving approximately $75 a month ! If you or anyone you know have a deal that would fit this criteria and would like to take advantage of this ultra low rate – contact me today! Addition Information: This mortgage rate is with a very reputable lender. The pre-payment priviledges are 20%/20% and it is assumable and portable (upon qualification). *5 year term over 30 year amortization *OAC

This technique is simple. If you are young, with good credit, making a good income but haven’t had enough time to save up your down payment, and you still want your mortgage right away; this is for you. Under the Home Buyer’s Plan (HBP), the Canadian government allows first time home buyers to withdraw funds from their RRSP up to 25K per person in order to purchase their first property. You have 15 years (plus 2 years of grace period without payments) to put your RRSP money back. If you want to take advantage of this program, but you do not have enough in your RRSPs, I have a solution for you. Most financial institutions are offering RRSP loans, some even with deferred payments. Because of the tax benefits of your new RRSP contribution, you should be receiving a higher tax return. In order for this technique to work to your full advantage, it is strongly suggested that you use the additional funds from your tax return to pay down your new loan. Here is a great tool that will show you

One of the best risk-adjusted investments you can make requires no commissions, no buying and selling and no management fees. According to a new study from the Certified General Accountants Association of Canada (CGAAC), the boring old mortgage prepayment performs better than most common retirement savings vehicles, including RRSPs. “…Single individuals and couples with no dependents may be better off accelerating their mortgage payments than contributing to a retirement account,” finds the study. “This is the case for all income levels and savings rates, but particularly for lower-income individuals.” “Those earning $30,000 annually and saving 2% of their earnings will get a nearly twice higher return by accelerating their mortgage payments compared with saving through a RRSP.” Once the mortgage is paid off, it’s assumed that one then takes the money formerly allocated to mortgage payments and starts investing it. There is an exception to the above findings, however, and it appli

http://www.investmentexecutive.com/-/bank-of-canada-keeps-key-rate-at-1-?redirect=http%3A%2F%2Fwww.investmentexecutive.com%2Fhome%3Bjsessionid%3DEC0DD1CBBDFC22512199638DC597D160%3Fp_p_id%3D101_INSTANCE_C6TPn3dGCfKv%26p_p_lifecycle%3D0%26p_p_state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3Dcolumn-1%26p_p_col_count%3D2    www.christinebuemann.com

Consumers hate mortgage prepayment penalties, largely because they don’t understand them. Now, there is about to be a high-profile challenge of how mortgage penalties are calculated. CIBC Mortgages Inc., a subsidiary of CIBC bank, has just been named the subject of a pending class action lawsuit. The intended suit claims that CIBC improperly calculated penalties for customers who broke their mortgages from 2005 to date. The claim alleges that: “CIBC applied terms and conditions to certain mortgage contracts to allow it unfettered discretion for calculation of mortgage prepayment penalties.” “…the quantification of prepayment penalties applied by CIBC are in breach of the mortgage contracts.” To read more follow this link http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/10/class-action-lawsuit-filed-against-cibc-mortgages-on-prepayment-penalties.html   http://www.christinebuemann.com/  

The Bank of Canada Qualifying Rate has increased to 5.29%, effective today http://www.christinebuemann.com/

Just weeks ago you could find variable-rate mortgages at prime – 0.80% (P-.80%) or better. Consumers thought they were here to stay, but the tables turned…fast. Economic troubles and lender profit motives have shrunken variable discounts beyond expectations. Banks are now commonly quoting prime rate (currently 3%), for example, with little discounting. Once the last few holdout lenders with P-.50% disappear, discounted variables could move towards P-.25%…or worse. Some lenders even suggest that prime or prime plus could be the new normal. Meanwhile, some brokers still have access to five-year fixed rates at 3.49% or less. That’s an unusually low 50 basis point premium to a variable. A spread that tight doesn’t come around often, and it makes you rethink all of the research suggesting variables are the way to go. http://www.christinebuemann.com/

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/10/rates-a-changin.html    www.christinebuemann.com

http://www.youtube.com/watch?v=rQ5sabRwguc   http://www.christinebuemann.com/

Getting pre-approved is a very important, FIRST step in the home buying process. Regardless of whether you are experienced with the process or a first time buyer it is very important to know exactly where you stand financially before considering a new purchase. Mortgage lending guidelines are constantly changing, and due to the economic instability over the last few years, mortgage lending has changed drastically. There are also issues that may arise on your credit of which you are unaware. Most errors can be rectified easily, but it will take time for the reporting to be updated. It is best to deal with any errors prior to having committed to a specific timeline. Although pre-approvals are extremely important, they should not be relied on 100% at the purchase time. It is important to have a full approval of both the applicant and the property before considering the financing to be secure. Once you are pre-approved it is important to be aware of the different factors that may change

How Low Can Yields Go? The 5-year government yield is doing the limbo, and the bar keeps being lowered. It closed Friday at 1.35%. How low it goes depends on how bad things get economically—and how bad investors think things will get. It’s interesting to contrast Canada to other countries because our yields are still notably higher than many. That’s despite a relatively stable fiscal and economic outlook. Here’s a sampling of 5-year yields from around the globe, including each country’s debt-to-GDP and unemployment rates (UR): Canada: 1.35% (Debt/GDP: 36%; UR: 7.3%) U.K.: 1.32% (Debt/GDP: 86%; UR: 7.8%) Germany: 0.91% (Debt/GDP: 44%; UR: 6.1%) U.S.: 0.87% (Debt/GDP: 61%; UR: 9.1%) Switzerland: 0.38% (Debt/GDP: 20%; UR: 3.9%) Japan: 0.35% (Debt/GDP: 183%; UR: 4.7%) Economically, these other countries don’t compare cleanly to Canada, but they do have a few things in common: Each is being impacted by the same worldwide trends (including a global slowdown and flight-to-saf

The Bank of Canada Qualifying Rate has decreased to 5.19%, effective Monday Sept. 26, 2011 http://www.christinebuemann.com/

http://www.mortgagebrokernews.ca/news/breaking-news/broker-lands-tv-reality-show/107086   http://www.christinebuemann.com/

Fixed rate mortgages closing the gap on variable rate, says BMOEconomics While historic trends favour variable, the current interestrate environment makes it a much closer call than ever By IE Staff With interest rates hovering near record lows, many Canadian home buyers are grappling with the age-old question of whether to choose a fixed or variable rate mortgage. “With short-term rates now likely to stay at very low levels, and long-term rates testing record lows, whether to lock into a longer-term fixed mortgage rate or choose a variable rate continues to be a hot-button issue among home buyers,” says Benjamin Reitzes, senior economist, BMO Economics. Historically, research shows that there is little debate as to which has been the better option for homebuyers. Typically, borrowers save money by staying in variable products, and riding the rollercoaster of fluctuating rates. In fact, since 1975 the cost-effective route for borrowers was to stay variable 83% of

A common misconception about variable rates is the process of “locking your rate in”. A more accurate description would be to “convert it to a fixed rate mortgage”. Although every lender has different policies surrounding their variable rate products, most will allow you to “lock in your rate”. This generally means that you can convert it to a fixed rate mortgage that is equal to or longer than the amount of time that you have remaining on your current term. Here are a few facts on the Major 6 Banks in Canada and how they decide what discount to give you off of the posted rate (ex. 5 year posted rate today is 5.39%): TD Canada Trust: Discretion is decided by loan officer based on how strong they feel your relationship is with the bank. 1% off posted is guaranteed in year one. CIBC: The discount originally offered on your variable rate mortgage (VRM) is what will be applied to their fixed posted rates. Scotia Bank: Discretion is decided by loan officer based on how strong they f

Jeremy Torobin OTTAWA— Globe and Mail Update Sep 7, 2011 - 8:19:36 AM Bank of Canada Governor Mark Carney held his benchmark interest rate at 1 per cent Wednesday and suggested his year-long pause will last much longer as a bleaker outlook for the global economy quashes any urgency to make it harder to borrow and spend. In explaining the decision to leave borrowing costs alone for an eighth meeting, as expected, the central bank said it believes Canada’se economy is growing again after stalling in the second quarter, but painted a troubling picture for the United States and Europe, and said exports will be a “major source of weakness.” “In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished,” the central bank said. “The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary pol

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What’s Behind Banks’ Variable Rate Changes Why did RBC and TD cut their variable rate discounts and spark an industry trend? Here’s the reason straight from the source (Dave McKay, Group Head, RBC Canadian Banking): “A combination of factors in the price increase on Wednesday; one, there was a dislocation between the price of the fixed rate book versus the variable rate book which was encouraging, I guess, consumers to really move into a much, much lower variable rate book, which had very, very thin margins. At the same time, we're seeing a slight volatility in funding costs in the swap market. So, given the dislocation between fixed and variable the very, very thin margins, we felt we needed to move prices up in our variable rate book. …I think the fixed rate business is well priced and earning a fair return. I think there was an anomaly with the intense competition in the variable rate mortgage business, consumer preference being, I think, artificially driven there because o

“National sales activity is forecast to reach 450,800 units in 2011, up less than one per cent from levels in 2010,” reads the CREA report, released this week. “We had previously forecast a decline of about one per cent for activity in 2011. National sales activity in 2012 is forecast to ease seven tenths of a percentage point to 447,700 units, which is roughly on par with its 10-year average.” The new projections come on the heels of last week’s tumult on world stock markets and a pledge by the U.S. Federal Reserve to hold its rates at historically low levels for at least another two years. The decision has likely scuttled Bank of Canada plans to raise its own rates this year, something poised to increase home sales, if only marginally, according to CREA. www.christinebuemann.com “While there had been some talk of potential interest rate increases, that hasn't happened,” said CREA President Gary Morse. “In fact, rates have actually come down, and are now expected to remain l

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Just as an insurance broker finds you the best deals on insurance, a mortgage broker finds you the best deals on a mortgage. Rather than working for one financial institution, mortgage brokers are independent and deal with numerous banks, credit unions, and direct mortgage lenders. This allows us to offer you more product choices and more competitive rates. It also means our advice is impartial and based on whatever is in your best interest. And, while you may not enjoy negotiating with financial institutions, that’s our specialty. We can shop dozens of lenders in the time it takes you to book an appointment at your bank, and even though a mortgage broker works for you, we get paid by the financial institution. That means that our services are offered to you with NO FEES. Because mortgage brokers don’t work for any of the lenders, we won’t try to lead you in a certain direction. After making sure we understand your needs, we’ll discuss some options and together we’ll decide which mor

MORTGAGE RATES AFTER USA DOWNGRADE On Friday, the previously unthinkable happened: The United States lost its AAA S&P debt rating for the first time in history. This cut, while somewhat debatable, will likely panic some investors and some anticipate that it will spark knee-jerk selling of stocks and longer-term U.S. bonds today. Here is what it could mean for Canadians …. Thumb-nail analysis: Once everything shakes out, analysts suggest that this U.S. rating cut will have more of a downside influence on Canadian interest rates than upside influence. Here are a few short term potential benefits: Short Term Effects: US Bond prices will go down, Canadian fixed mortgage rates will go down. Diminished Reserve Currency Status: Foreign governments will be less likely to hold U.S. dollars in reserve if America’s creditworthiness is in question. Barclays says this could boost U.S. interest rates by another 25 bps. Meanwhile, Canadian bonds (and the Loonie) could benefit long-term

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TORONTO (Reuters) - The Canadian dollar looks set to extend a rally that's taken it to 3-1/2 year highs against the U.S. dollar this week, as more hawkish Bank of Canada comments lifted the currency and global investors pushed into the safety of Canadian assets. Given the central bank's clear signal it would likely resume interest rate hikes later this year, analysts said the currency might even revisit its modern-day high. It reached C$0.9059 to the U.S. dollar, or US$1.1039, in November 2007, according to Thomson Reuters dealing data. "Yes, Canada could hit post-Civil War highs once again," said Michael Woolfolk, a senior currency strategist at BNY Mellon in New York. "(Hitting the high) would not be altogether unwarranted if Canada begins raising interest rates again. It's certainly not in our forecasts, but it's a nontrivial possibility of hitting C$0.90 within the next 12 months." Based on available data, the Canadian dollar was at an al

The Bank of Canada Qualifying Rate has decreased to 5.39% effective today

http://www.youtube.com/watch?v=AlDbxfrpOQk

The Bank of Canada announced today that it is maintaining its target for the overnight rate at 1%. In turn, prime rate will remain at 3.00%

CanadianMortgageTrends.com Despite robust headline inflation and growing employment, the market expects no rate change when the Bank of Canada meets tomorrow. A drab North American economy, strong loonie, and European debt concerns will keep rate hikes at bay, according to all 37 economists polled by Reuters. Not one of them expects a rate change until later this year or early 2012. The overnight rate has now stood at 1.00% for nine months. Here are some soundbytes about Tuesday’s rate announcement: “The arguments are there for the Bank of Canada to start hiking rates next week, but we increasingly think that this fall might even be too early given the problems we are seeing in the global economy.” — Jimmie Jean, Desjardins Capital Markets. (Source: CBC News) “While (the recent) pace of economic growth will be sufficient to get the economy back to full potential by mid-2012, we highly doubt this news will push the Bank of Canada off the sidelines at next week’s fixed rate a

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Benjamin Tal - Deputy Chief Economist, CIBC World Markets So is it a bubble? Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable. Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details—and there the picture is still not pretty, but much less alarming. For the full article, please click on the link below http://research.cibcwm.com/economic_public/download/feature2.pdf

The Bank of Canada Qualifying Rate has increased to 5.54% effective today.

OTTAWA — The TD Bank says Canadians can expect borrowing costs to remain near record lows for the rest of the year. That’s because the pace of the economic recovery is expected to slow sharply in Canada, the United States and much of the world. As such, the Bank of Canada will likely refrain from raising its key interest rates until 2012, TD says. The central bank has had its policy rate set at one per cent since September. The rate was set at all-time low of 0.25 per cent through much of the recession, to stimulate borrowing and spending, until a series of rate hikes began last summer. The still-low rates have been a double-edged sword for Canadians who are already piling up debt at record levels, according to the Certified General Accountants Association of Canada. The association says Canadian household debt has reached a record $1.5 trillion, and calculates that more than half of indebted Canadians are borrowing just to afford day-to-day living expenses such as food, housing and tr

Over the past few months, major economists have back peddled on their rate hike predictions. Not long ago, the consensus of economists was projecting a July 19 increase. Now, those same analysts aren't looking for a rate bump until this fall...or later. A slew of factors justify a deferral of rate increases, including: • A parade of weak economic data from the U.S.—our key trading partner • Core inflation that remains manageable • Global economic risks • Debt-laden consumers that are only cautiously spending • A U.S. housing market that's double-dipping • U.S. unemployment that may be structurally and permanently elevated • A Canadian dollar that is still acting as a brake on our economy. For reasons like these, TD Bank became the first major bank last week to predict the Bank of Canada would stand pat on rates through 2011. Depending on how the next rounds of economic data look, other banks may follow suit. Then again, the rate picture can and does change. BMO says: "...i

Bank of Canada Governor Mark Carney sounded more alarm bells last week. It was a warning about the perfect storm of rapidly rising home prices and the future vulnerabilities of homeowners when interest rates start rising. Fittingly, Carney was speaking in Vancouver, where home prices are up a whopping 25.7% year-over-year—if you include the sales of high-end homes. Carney noted that the average house price nationally is at four-and-a-half times the average household disposable income. This compares to an average ratio of three-and-a-half times during the past quarter century, he said. Here's a Chart. (Mortgage affordability, however, is still just slightly above normal, based on long-term averages, but that is based on current interest rates.) While he didn’t come out and call Canada’s housing market a “bubble,” he certainly warned about the current level of “financial vulnerabilities.” “...the ratio between the all-in monthly costs of owning a home and renting a home, as measured

CANADA’S JOBLESS RATE FALLS TO LOWEST LEVEL IN TWO YEARS By Julian Beltrame, The Canadian Press OTTAWA - Canada's unemployment rate fell to its lowest in more than two years as a combination of more self-employed workers and fewer job seekers in May pushed the key economic marker down to 7.4 per cent. Statistics Canada said 22,300 new jobs were created last month, slightly above consensus estimates following April's strong 58,000 jobs gain. The last time Canada's unemployment rate was as low as 7.4 per cent was in January 2009, a few months after the economy had plunged into recession. The finer details of the May report were less impressive, however. "Small business is of vital importance to the Canadian economy, but job creation within this category in a soft spot for the economy (and) is always a knock against the quality of the headline gain," Derek Holt, vice-president of economics for Scotiabank, said in a note to clients. The number of employees in Canada a

The Bank of Canada lowered their Qualifying Rate by another .10% to 5.49%, effective today. The qualifying rate is generally used by lenders on most high ratio* deals to qualify: • A mortgage with any term length of under 5 years • Variable rate mortgages • Home Equity Lines of Credit • 50/50 mortgages The reason why the Qualifying Rate was implemented is because interest rates have been hovering around at a historic low. Using the increased rate ensures that purchasers have room within their monthly budget to withstand an increase in mortgage payments. Essentially, the Bank of Canada wants Canadians to only be entering into mortgages that are sustainable over the long run for their income. Every lender has their own set of guidelines for conventional deals (more than 20% down payment). *a high ratio deal is one that has less than 20% for down payment

http://www.youtube.com/watch?v=YbCOUw4_50Q

The Bank of Canada announced today that it is maintaining its target for the overnight rate at 1%. In turn, prime rate will remain at 3.00%

Canada Mortgage and House Corporation released its housing Market Outlook for the second quarter in 2011. Here are a few highlights. • Housing starts: Housing starts are moving back in line with demographic fundamentals, after peaking in the second quarter of 2010. Since then, they have progressively moderated, including in the first quarter of 2011. Housing starts are forecast to be 179,500 units for 2011 and 185,300 units for 2012. • Resales: Sales of existing homes through the Multiple Listing Service® (MLS®) have made further gains in the first quarter of 2011. MLS® sales are expected to increase modestly both in 2011 and in 2012. Overall, 452,100 sales are expected in 2011, followed by 461,300 in 2012. • Resale prices: The increase in the average MLS® price in the first quarter of 2011 was stronger than expected, but the average MLS® price is expected to moderate throughout the remainder of the year. For 2011, the average MLS® price is forecast to be $361,100 while 2012 will see a

Feature: Stated Income Product I currently have access to a stated income product that is extremely beneficial for clients who do not make as much “on paper”. Most lenders offer Stated Income products, but the difference with this particular lender is that they accept clients who earn a base salary plus commission (or tips) instead of only self-employed clients. It is usually in the client’s best interest to try an “A” lender first, but if you are looking for alternative lending options, it is nice to know that they are available. The interest rates for this particular product are slightly higher due to the higher level of risk the lender is assuming therefore it should be considered a back up option. 5.5% cash-back for down payment Please note that the lender who is currently offering 5.5% cash-back that can be used towards the down payment will only be offering this until June 30th, 2011. After that time, I will still have access to cash-back for down payment products, but only up to

A meagre 1 in 4 borrowers made extra principal payments on their mortgage last year. There are easy ways to make extra payments and erase your mortgage many years quicker. What follows is a basic strategy to shorten your effective amortization dramatically, and barely make a dent in your bank account. The idea isn’t fancy. All you need to do is increase your mortgage payments each year to match the rate of inflation. Over the long-haul, inflation has come in at about 2% on average. Two percent also happens to be a reasonable expectation of annual wage growth—at least according to long-term averages and income growth forecasts. If you’re a typical Canadian family earning $68,860* a year, 2% wage growth suggests you’ll make about $1,377 more next year. So, given this information, let’s consider the median Canadian family with a “typical” mortgage (e.g., a $250,000 loan fixed at 3.99% interest, with a 30-year amortization and $1,187 monthly payments). If a borrower proceeded down this pat

Time is running out to take advantage of the 5.5% cash-back for down payment. Contact me today for details http://www.youtube.com/watch?v=grGobhmlBOA

One common misconception that I hear frequently is that mobile homes are cheaper and easier to purchase. Although they can be, if purchased on their own land, mobiles in parks tend to cost more over the long term than some buyers anticipate. There are several factors that contribute to this: • You generally cannot extend the amortization beyond 25 years (sometimes not past 10 or 15 years depending on the age of the home). This makes monthly payments higher, hence the buyers qualifying maximum mortgage amount will be lowered • Banks will usually charge their “posted rate” as opposed to the discounted rates that you may receive for a small house or duplex • Although you commonly pay less in property taxes for a mobile in a park, you will have to factor in the pad rent that is in addition to the taxes Here is a comparison of $120,000 purchase with 5% down. I have factored in $100 a month for heating as per the industry standard. I have also factored in CMHC fees. Mobile in park (at curren

As the saying goes, "The lowest rate will save you hundreds, but the wrong term can cost you thousands." Put another way, the mortgage term you choose can have a far greater impact on borrowing cost than your up-front interest rate. That’s because your term determines the length of time you're locked into a rate. That, in turn, affects how long you'll overpay or underpay, relative to the other available options. The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early. It therefore pays to make the right choice from the get-go. Almost anyone can find a low rate by doing a little Googling. Picking the right term is not as easy. Take some time, get good advice, and nail the right term the first time. The venerable 5-year fixed still wins popularity contests, especially since high-ratio qualifying rates leave many with no other choice. However if you can afford to take some risk, it will be worth

http://www.youtube.com/watch?v=_VjTG6jumKs

IS THE BEST MORTGAGE RATE IMPORTANT? Mortgage clients constantly tell me "I need the best mortgage rate. What rate do you offer?" While the client is always right, and we always provide the best rate and terms, we do convey the need to look at the "extras" when selecting the best mortgage. Extras include: •Low prepayment penalties •Generous pre-payment privileges •Cash back •Cash back clawbacks •Assume-ability •Portability •Refinance options •Low lender fees (if applicable) •Missed payment flexibility •Payment frequency flexibility •Lock in terms (for variable rate) Clients are attracted by even a 0.1% savings in mortgage rates. But when you do the math, the relative importance of the "extras" become clear. 0.1% savings on the typical 5-year $250,000 mortgage equates to: •A difference in monthly payment of only $14 •A savings of just $346 over five years on your mortgage balance Just one of the extras above could offset this 10 times over.

The Bank of Canada surprised few yesterday by keeping its key lending rate at 1.00% for the fifth consecutive meeting. In turn, prime rate will remain at 3.00%. Financial markets and major economists are largely forecasting 2011's first rate hike to fall on July 19. The next BoC rate meeting is on May 31.

Here are a few simple ways to literally cut years off of your mortgage. The first and most obvious one is to choose a smaller amortization period. Taking a $100,000 mortgage at 5% from a 25 year amortization period to a 15 year amortization period will save you $32,619.21 in interest cost over the life of the mortgage. You may also consider increasing your monthly payments. Every little bit helps. On a $100,000 mortgage with an interest rate of 5%, increasing your monthly mortgage payment by just $50.00 per month will pay that mortgage off in just over 21 years as opposed to 25 years. Another idea is to make lump sum payments. On a $100,000 mortgage at 5% interest, making one extra payment of $500 a year will reduce your amortization to 22 years from 25 years. The most common change is to the frequency of your payments to bi-weekly instead of monthly. On a $100,000 mortgage at 5% interest you will cut back your amortization to 21.5 years instead of 25.

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The 5-year government yield (which leads 5-year fixed mortgage rates) pierced 2.80% on Friday. It’s risen almost .35% in two weeks. That’s squeezed gross lender margins on deeply-discounted five-year rates to near 1.00% (1.20% can be considered “normal”). As a result, ultra-low fixed rates are in danger of rising .10% or more higher, especially if this yield trend continues. The 5-year rates are still at all time lows, but they may not last if this trend continues. Keep in mind; this perspective refers to fixed rates in the short term. Although rates continue to trend upward, they can drop down unexpectedly due to unforeseen circumstances as we saw recently. Should interest rates continue to rise as predicted; now is an optimal time to get a pre-approval done and secure a low rate for the next 120 days.

Speculation is that the Bank of Canada is planning at least two rate hikes this year of .25% each. Here's an example that shows approximately how much monthly payments would increase on a typical variable rate mortgage with a .50 % point rate hike. It's based on the current average variable rate of 2.3%, amortized over 30 years. On a $100,000 mortgage, payment will increase approx $26 On a $200,000 mortgage, payment will increase approx $52 On a $300,000 mortgage, payment will increase approx $77 On a $400,000 mortgage, payment will increase approx $103 Some lenders offer a "hold your payment" feature to keep your variable rate mortgage payment from increasing if rates rise. However, the portion of your payments going to interest will increase, therefore decreasing the amount you pay towards principle.

http://www.youtube.com/watch?v=dxSYyEcjEc0

IFRS. You’ll hear more about this acronym as time goes on. It stands for International Financial Reporting Standards and it’s basically a newly-adopted set of accounting rules. The relevance here is how IFRS will impact Canadian mortgage rates. Under IFRS, mortgages that are securitized must be reflected on a lender’s balance sheet. Prior to January 1, 2011 that was not the case. (IFRS securitization guidelines don’t take effect on the big banks until November 1 of this year.) Once mortgages come on the balance sheet, a lender (if federally regulated) must allocate capital to those mortgages to meet the regulatory asset-to-capital multiple. For giant banks, with gobs of surplus capital, this isn’t as big an issue. For smaller lenders, it’s a serious matter because it raises capital costs notably. Home Trust, for example, has had to allocate capital where the return is greatest. In Home’s case, that means it’s now focusing on non-prime mortgages. In turn, Home had to raise pricing on it

Can't seem to find that "dream home" in today's market? Why not take advantage of the Purchase plus Improvements program? You can include your renovations in your mortgage and tailor your purchase to custom fit your needs! http://www.youtube.com/watch?v=3bgmiZD1EWk

http://www.youtube.com/watch?v=ittXBkW41FE Property Transfer Tax http://www.sbr.gov.bc.ca/business/property_taxes/property_transfer_tax/first_Time_home_buyer.htm Tax Credit http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/369/menu-eng.html

It is vital that you determine how much can afford before you start looking for a house. If you begin by looking at houses outside of your price range, your home may appear disappointing by comparison. You also want to be confident that your monthly payments are sustainable and realistic for your budget. Here are a few tools to help you carefully consider the size of mortgage that is most suitable for you: Household Budget Calculator http://www.cmhc.ca/sharing/en/householdbudget.html Mortgage Affordability Calculator http://www.cmhc.ca/sharing/en/affordability.html Mortgage Payment Calculator http://www.cmhc.ca/sharing/en/mortgage-payment-calculator.html

With the Bank of Canada maintaining the status quo last week, many are wondering what’s next for mortgage rates. If you put any stock in the Big Six banks’ predictions, here’s the latest commentary from their professional ball gazers… CIBC: “We're sticking with our view that an upgraded economic outlook in April's policy report will pave the way for a rate hike in May, assuming the C$ settles down a bit before then.” BMO: "We judge that the bank is waiting for evidence that U.S. economic performance is strong and steady enough to ensure that Canadian exports will contribute to Canadian economic growth regardless of the level of the loonie. We’ve pencilled in a July resumption of rate hikes.” National Bank: “There is a compelling case to be made for higher interest rates in Canada since excess supply is closing faster than previously anticipated by the Bank…We remain of the opinion that the next rate hike will occur at the May 31 interest-rate setting meeting.” RBC: “The Ba

http://www.youtube.com/watch?v=3REOPzZUaMA

With tax season upon us, anything that can add to a homeowner's bottom line is welcome news. The Vancouver Sun has done some leg work and compiled a list of the best grants and rebates for homeowners and property buyers. Here are my top picks: FIRST-TIME HOME BUYERS' TAX CREDIT (HBTC): This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. For the 2010 tax year, the maximum credit is $750. For more information: www.cra.gc.ca/hbtc BC PROPERTY TAX DEFERMENT PROGRAMS: Property Tax Deferment Program for Seniors. Qualifying home owners aged 55+ may be eligible to defer property taxes. Financial Hardship Property Tax Deferment Program. Qualifying low-income home owners may be eligible to defer property taxes. Property Tax Deferment Program for Families with Children. Qualifying low income home owners who financially support children under age 18 may be eligible

What is the minimum downpayment in Canada? http://www.youtube.com/watch?v=rdHQ0WcrbBE

http://www.youtube.com/watch?v=8_50KRjYkjk

Here is an interesting link for statistics on commodity returns for 2001-2010 http://www.usfunds.com/research/the-periodic-table-of-commodity-returns/?CFID=2082675& CFTOKEN =50310289

The lender incentive “cash-back” mortgages offer more options for clients with little to no down payment. Here’s how it works; at closing the lender will pay the client a certain percentage of the mortgage. For example, on a $250,000 mortgage with 5.5% cash back the client will receive $13,750. They can use this for the 5% down payment ($12,500), moving costs or whatever else they may need extra money for. I must point out that interest rates are slightly higher to compensate for the cash being given back to the clients. Let’s compare options using a $250,000 mortgage over 35 years with a 5 year term. Type Rate Monthly Payment cash-back ~ 5.19% ~ $1283 No cash-back ~ 4.04% ~ $1108

5-year Yields Up Again Canada blew away economists’ job growth estimates on Friday. That’s driven 5-year yields to a new 8-month high. This probably won’t have much impact on variable rates in the short-term, but fixed rates are now under pressure. Gross spreads are down to 100 basis points or less on deeply-discounted 5-year fixed rates (120+ is more “normal”). That means we’ll likely see some or most lenders lift rates this week. If you’re contemplating a fixed rate on a home purchase or refinance, consider securing that rate soon to be safe.

http://www.ted.com/talks/arianna_huffington_how_to_succeed_get_more_sleep.html

http://www.youtube.com/watch?v=khC1ij2gK6o

I have had quite a few questions over the last few weeks regarding shorter amortizations and how they are going to affect Canadians. Whether you are looking to purchase a home or refinancing your current home, shorter amortizations may mean less available credit. If you have an income of $50,000 a year you would qualify for approximately $242,307 over 35 years . If the amortization is reduced to 30 years , they would then only qualify for $ 224,584 . That is a reduction of almost $18,000.* If you were to choose a mortgage of approximately $ 250,000 at 3.99% interest and shorten the amortization it from 35 years to 30 years your monthly payments would increase approximately $87 a month. If you have any questions on the new mortgage rules, please do not hesitate to contact me. *For illustration purposes, I have used average property taxes of $2000 and standard $100 for heating. I have also not factored in any additional debts