Prime Rate Remains

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.

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What is compounding interest?

Compounding interest is when interest is charged on top of itself . For example, most mortgages are compounded semi-annually. That means that every 6 months, interest is calculated at the current balance AND accrued interest to that point. Interest only mortgages are typically compounded monthly however some lenders have started compounding their standard (often variable rate) mortgages this way as well. The more frequently interest is compounded, the more interest you will pay in the long run. It is important to know the fine details of your mortgage so be sure to consult a Mortgage Broker for impartial advice! www.christinebuemann.ca

Who is Computershare and why are they registered on title?

If you are using a non-bank lender for your mortgage, you may notice that your mortgage has been registered in the name of “Computershare Trust Company of Canada”. This registration does not affect the terms and conditions of your mortgage in any way. Computershare holds no beneficial interest or rights to the mortgage loan. This is merely a third party, custodial arrangement which means that your lender has used Computershare to review the mortgage and provide custodial certification to Canada Mortgage and Housing Corp (CMHC) for their government securities program. Computershare is the largest provider globally of many of the services they offer and the largest corporate trust service provider in Canada. They have successfully provided this custodial service to many Canadian bank and non-bank lenders for many years and they play a very important role in the Government of Canada’s NHA Mortgage-Backed Securities Program. Computershare has served as the exclusive Central Payor and Tr...

When is an appraisal required?

In mortgage financing, appraisals are required to confirm the value as well as the condition of a property. Here are the most common scenarios where they could be required: Private sales Unique properties (log homes, mobile homes ext) Non-arms length transactions (ex between family members) Acreages and/or rural properties (or properties with large outbuildings or animals) Properties where there could be structural issues (ex MLS listings referring to "handyman special" ext") Refinances or renewals Conventional mortgages (or for those putting 20% or more down) Rental properties New construction Some lenders will rebate the cost however you should budget to have the funds available. Most banks who "cover" the cost, simply charge it back to you at closing. As the mortgage lending landscape tightens, we have been seeing more requirements for appraisals so it is best to be prepared in case one is required. www.christinebuemann.ca

Christine Buemann Mortgage Broker

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