Christine Buemann Mortgage Broker

Comparing New Amortization & Down Payment Rules Source: www.canadianmortgagetrends.com Government mortgage restrictions instituted from 2008-2011 have not achieved their goal, suggests Desjardins’ Senior Economist Benoit Durocher. He wrote this on Thursday: “…The third series of [government mortgage rules] was announced nearly a year ago now, and we must conclude that the tightening introduced to date has not slowed the market enough. Under these conditions, it is likely, and perhaps even desirable, that the federal government will shortly announce a fourth series of measures to further limit mortgage credit.” It almost sounds like Durocher has some inside info. He adds: “Among other things, the government could be tempted to once again raise the minimum down payment on new loans (it went from 0% to 5% in October 2008).” Many believe a down payment increase would have a more chilling effect on home prices than the other option being talked about: a reducti...

Why Refinance? Here is a case scenario… Let’s say you have a balance of $200,000 on your mortgage with 2 years left in your 5 year term. If your current rate is 5.99% (which was common 3 years ago) and you want to refinance into a new 2 year mortgage at 2.89% which is today’s rate, you would save over $12,000 in 2 years. If you continued to make your payments at the 5.99% rate (with all of the additional funds going directly onto the principle of your mortgage), not only would you save more in interest, but at the end of the 2 year term, you would have shortened your remaining amortization period from 20 years to just over 13 years. Even if you have to pay a penalty to get out of your current mortgage, it may be worth the savings in the long run. Regardless, it is well worth your time to explore all of your options. Contact me for a free mortgage evaluation today. http://www.christinebuemann.com/

As expected, the Bank of Canada has decided to maintain its target for the overnight rate at 1%. In turn, prime rate will remain at 3%

As you may have heard, the Bank of Montreal set records and caught media attention when they dropped their 5 year fixed rate to 2.99% for a 2 week promotion. Although this is encouraging news for the potential mortgage client, it is necessary to proceed with caution. There are several other lenders who had this rate several month’s ago, but BMO is the first major bank to drop it so low and promote it very publicly. Although this mortgage could potentially be the perfect fit; as a consumer, it’s worth examining all possible alternatives, if only because the Low-Rate mortgage has strings attached. For example, you cannot*: • Repay the mortgage in full before maturity unless the property is sold to an unrelated purchaser at fair market value (fees will still apply) • Refinance with, or switch your mortgage to, another lender before maturity      o Although, you can renew early, refinance to another BMO mortgage, or transfer your mortgage to a new property. • Get an...

It was just another set of numbers but the housing industry says the latest figures from the Canadian Real Estate Association are further proof the sector does not need any more regulation. The federal government has already cracked down on mortgage requirements on several occasions during this housing boom, including measures to force down payments, shrink amortizations lengths and reduce refinancing limits for existing homeowners. But speculation continues to grow Ottawa will be back at it again with Toronto-Dominion Bank chief executive Ed Clark suggesting this week that amortization lengths should be lowered to 25 years. Consumers were allowed to amortize mortgages over 40 years back in 2008 but the federal government has whittled that down to 30 years. “Letting the market sort things out itself is the preferable option because it is so difficult to tweak one element of public policy,” said Phil Soper, chief executive of Royal LePage Real Estate Services, adding CREA’s statisti...