Christine Buemann Mortgage Broker

Canadians have been taking advantage of record-low interest rates to lock in their mortgages, a new survey suggests. The Canadian Association of Accredited Mortgage Professionals, in its annual spring release, says among the 3.8 million Canadians with a fixed rate mortgage, 14% chose to lock in during the past year. “This data supports comments by lenders that they have high numbers of new borrowers who start with variable rate mortgages but soon opt for the security of fixed rates,” says CAAMP in the report. Overall, 29% of those with mortgages have a variable rate leaving them with exposure to any changes in the Bank of Canada’s lending rate which the prime rate — used in those loans — tends to track. The survey also found Canadians are making significant efforts to reduce their debt with 23% of respondents saying they voluntarily increased their regular payments, 19% making lump sum payments and 10% doing both. For those who increased their regular payments, the average amo...

When the new federal budget came in about a month ago we discussed two things: 1. The first being that the governance of CMHC was being moved from the human resources department to the Office of the Superintendant of Financial Institutions (OSFI). Essentially control of CHMC was being moved so that the financial department could have direct audit and control of its policies and programs. 2. Due to CMHC increasing its portfolio insurance holdings (insuring mortgages for banks at less than 80% loan to value), the media created uninformed and overblown fears about the amount of mortgages insured by CMHC. CMHC is nearing its limit of total amount of mortgages it is permitted to insure, forcing lenders to expand their insurance relationships with Genworth and Canada Guaranty. The speculation was that the government, due to CMHC's low portfolio loan to value would increase its insurance limit. So, the news: It looks like Jim Flaherty is moving quickly to sink his claws into CMHC...

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...

Is it possible to get a mortgage with little to no down payment saved? The simple answer is yes. Here is how it works… There are several lenders who will give you between 1-5.5% of your mortgage amount back at closing to use towards your down payment. The interest rate will get higher with the percentage of cash that is being given back in order for the lender to recover the funds being given to you at closing. If you were to use the maximum cash-back, here is a sample breakdown of what it could look like*: $200,000 purchase price -$ 10,000 minimum 5% down payment +$ 5,605 default insurance premium = $195,605 total mortgage amount The amount of cash back being given is 5.5% of the total mortgage amount and would therefore be $10,758.28. The one thing to take note of when entering into a cash-back mortgage is that if you break the contract term earlier then the time you have committed to, the lender may “claw-back” all or a portion of the cash that was initially give...

The hot topic of last week was of course the Federal budget. Below are some key changes taken from the budget, as well as some great links to some articles that explain the budget in more detail. The budget will: • Gradually raise the age of eligibility for Old Age Security from 65 to 67 beginning in 2023. • Contain no new taxes or tax increases. • Tell consumers to complain directly to food companies about product labeling. • Eliminate the penny. • Eliminate 19,200 government jobs over three years, including 600 senior executives and 7,200 through attrition. • Reform regulation in the resource industry, including amending the Canadian Environmental Protection Act. • Allow Canadians to claim more goods duty-free at the border. The limit after 24 hours goes from $50 to $200. • Cap EI premium rate increases to 5 cents a year until the fund is balanced again. • Cut $2.1 billion from the Department of National Defense over the next three years. • Cut funding to the CBC by 10 pe...

Lately there has been lot of information in the media about mortgage rates along with housing forecasts. Here are a few articles that I have read lately that I found very interesting: Flaherty Tells Banks: Do Your Jobs www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/03/flaherty-tells-banks-do-your-jobs.html RBC hikes 5-year mortgage rates www.cbc.ca/news/business/story/2012/03/26/rbc-mortgage-rate.html End of very cheap mortgages is healthy in overheated market www.montrealgazette.com/business/very+cheap+mortgages+healthy+overheated+market/6352854/story.html#ixzz1qGIfwV6M CMHC’s Reins Get Pulled Back www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/03/cmhcs-reins-get-pulled-back.html If you have any mortgage related questions, please feel free to contact me. I am always happy to help! www.christinebuemann.com

Brokers are guaranteed to bristle at the suggestion, but a top bank economist is among the first to advocate for an increase in the minimum down payment to 7 per cent instead of 5 – an option with significant implications for first-time and cash-back clients. "We need to acknowledge that a significant imbalance has developed and it poses a clear and present danger to Canada's medium-term economic outlook,” Craig Alexander, chief economist with TD Bank, said in a report late last week. “It also suggests that further actions to constrain lending growth may be prudent. "If the overvaluation was fully unwound rapidly, it would be three times the correction in the early 1990s." While other economists have called for further tightening of the country’s mortgage rules, Alexander is among the first to call for an increase in the minimum down payment to 7 per cent from 5 per cent. He has also broached the idea of instituting a minimum interest-rate floor for incom...

Do you know the difference between a mortgage broker and a bank specialist? With a number of differences between the two, here is some useful information to help you understand. • A mortgage broker works for you, the client, giving them the ability to offer you mortgage products from a number of financial institutions. Because a bank specialist works for the bank, they can only offer you their institution’s products. • Where a mortgage broker must be licensed and is subject to a strict set of requirements, bank specialists are not licensed and require no formal training. • Mortgage Brokers use their knowledge and experience to negotiate the best possible rate and product for you from a number of lenders. When you see a bank specialist, that mortgage negotiating is typically left up to you. * Note: Mortgage brokers are paid by the lender not the borrower on most high ratio and conventional mortgages. If there is a cost, you will be advised of those costs up front. So, if you ...

The Bank of Canada met yesterday and decided to maintain its target overnight rate at 1%. It turn, bank’s Prime Rate will remain at 3%. Fixed rates also remain low so come in and get your 120 day rate hold today! www.christinebuemann.com

There has been a little confusion about the New Home Buyer's Bonus for First Time Buyers. Please see the link below for the fact sheet from the government on this program. http://www.bcbudget.gov.bc.ca/2012/homebuyers/2012_First_Time_Home_Buyers_Fact_Sheet.pdf    www.christinebuemann.com

As per CHMC’s latest report on rental conditions in Prince George, BC here are the average prices for rentals: 3 Bedroom - $974 2 Bedroom - $709 1 Bedroom - $592 Bachelor - $502 Here is what your approximate mortgage payment could be on the following mortgage amounts: $200,000 - $861 $175,000 - $753 $150,000 - $646 $125,000 - $538 Wouldn’t you rather be paying yourself instead of your landlord? There are numerous options for those who do not have a saved downpayment. It is worth it to come in for a no obligation consultation and see what options are available for you. Source: http://www.cmhc.ca/en/corp/about/cahoob/cahoob_011.cfm   *based on 5 year fixed interest rate of 3.19% over a 30 year amortization http://www.christinebuemann.com/

I have been speaking to real estate professionals across Northern BC and it looks like we have entered our “Spring Market” early this year. Some people may want to get into the market but are wondering; what documents do I need in order to get approved for a mortgage? Further to the mortgage application, here are the basic documents that will be required: • Letter of employment • 2 recent paystubs • If you are part time or receive any overtime, bonuses, or commissions then we will also need your Notice of Assessments for the last 2 years • Proof of downpayment (minimum 5% unless using “cash-back” product) and 1.5% of purchase price for closing costs via one or a combination of the following:    o Investment statement    o 3 month history of bank account    o Gift letter from immediate family member along with proof of the exact       same amount deposited into account Depending on the complexity of the file, th...

Right now is the ideal time for first time buyers to be getting into the market in Prince George. Not only are interest rates at rock bottom, but home prices remain low for the time being. First time buyers have an advantage because they do not have to wait for their current homes to sell or sell them at a price that they find lower than anticipated. There are also a variety of options for those who do not have a down payment. All of that being said; the Canadian economy has not been as resilient as we had hoped against the global economic downturn. The Bank of Canada is once again talking about tightening up mortgage qualification guidelines. Now is the time to take advantage of this opportunity while it is still here. http://www.christinebuemann.com/

As you may have heard, Canada Mortgage & Housing Corp. said it is rationing mortgage insurance for lenders as the country’s housing agency approaches the legal limit of its ability to backstop the loans. “CMHC has recently received an unexpected level of requests for large amounts of CMHC portfolio insurance,” Charles Sauriol, a spokesman for the Ottawa-based agency, said in an e-mailed statement. “To ensure equitable access to portfolio insurance within CMHC’s annual limits, an allocation process is being established which has caused some delays.” The agency said that lenders have increased their demand for insurance of their mortgages amid “liquidity needs” since the 2007 financial crisis. “This does not affect the availability of CMHC’s mortgage loan insurance for qualified home buyers and will not impact the cost of buying a house,” Sauriol said in the statement. Portfolio insurance allows lenders to insure mortgages that aren’t already backstopped by the housing agency....

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...

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 ...