Christine Buemann Mortgage Broker

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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