[Source - CEP News]
Ottawa - Canadians are increasingly opting for variable rate mortgages when it comes time to buy or refinance a home, according to survey results released by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
The market share of variable and adjustable rate mortgages has almost doubled, to 40% this fall from 21% of those who negotiated their mortgages a year or more ago, CAAMP reports. The association says the switch likely indicates that consumers believe interest rates are more likely to fall than to rise.
There was evidence of a declining mortgage rate trend beginning on Wednesday afternoon as at least two major Canadian financial institutions announced rate reductions.
The lower rates are welcome news, said CAAMP CEO Jim Murphy, although he said the cost of borrowing is only one of three key factors affecting the housing market. Affordability and job security are equally important, he said. "You can't pay a mortgage if you don't have a job.
"Variable rate mortgages are more popular among middle aged and older buyers than among Canadians aged 18-34, the CAAMP study showed. Only 19% of buyers 34 and under opted for variable rate loans compared with 30% of buyers aged 35-54 and 27% of those aged 55 and older.
Read Full Article Here: http://www.economicnews.ca/cepnews/wire/article/single/173905/
Thursday, November 27, 2008
Lower Mortgage Rates
As expected other banks have now lowered their rates, those lowering rates included Royal Bank of Canada, Bank of Montreal, Desjardins Group, Bank of Nova Scotia, Toronto-Dominion Bank and Laurentian Bank of Canada. Others are sure to follow.
These moves should help restore some consumer confidence.
This latest rate reduction is a reaction to the drop in borrowing costs in the bond market.
These moves should help restore some consumer confidence.
This latest rate reduction is a reaction to the drop in borrowing costs in the bond market.
Wednesday, November 26, 2008
Is there any way to make the mortgage debt on a home more tax-efficient?
I recently sat down with Troy Matty of Absolute Financial Group to discuss investments, life insurance and mortgage debt. Troy is a financial expert and has a wealth of information on many investment strategies.
Highlights from the interview:
OMI: Is there any way to make the mortgage debt on a home more tax-efficient?
TM: That is a great question because the total accumulated interest charges on a mortgage debt, on average, is roughly equal to the original starting balance of a mortgage! This is a large sum of money we’re talking about! The answer is yes, you can make a mortgage debt more tax-efficient, but it is strongly recommended you work with an advisor who understands this type of strategy, and also an accountant that does as well. This strategy was specifically designed to make a mortgage debt more tax-efficient, pay off the mortgage debt sooner, and also create an additional pension along the way.
OMI: With the markets in turmoil, and investment portfolios decreasing, what advice can you offer investors?
TM: When it comes to investments, the biggest considerations are the risk tolerance and objectives of the individual, as well as the time horizon that they have. Although one person may see the markets as catastrophic, another may see them as an opportunity. Because investments are sold in units, in a “bull” market the purchasing power of your dollar is minimized, whereas in a “bear” market, your dollar can go a much longer way... and that’s exactly where we are today. It is strongly recommended before you purchase any investments, that they are in line with your risk tolerance and also your investment objectives. Conversely, it is equally recommended that before you sell any of your investments, you are aware of the possible repercussions of doing so. If time is on your side and you don’t need to draw off any of your investments, surrendering them or cashing out may be the worst thing you could do. Consult with an advisor and/or get a second opinion, always!
For expert financial advice please contact Troy Matty, he can be reached at:
Troy Matty
Absolute Financial Group
416.717.5629
tmatty@absolutefinancial.ca
For expert mortgage advice please contact Greg Barrow:
416.807.7123
gbarrow@dominionlending.ca
Highlights from the interview:
OMI: Is there any way to make the mortgage debt on a home more tax-efficient?
TM: That is a great question because the total accumulated interest charges on a mortgage debt, on average, is roughly equal to the original starting balance of a mortgage! This is a large sum of money we’re talking about! The answer is yes, you can make a mortgage debt more tax-efficient, but it is strongly recommended you work with an advisor who understands this type of strategy, and also an accountant that does as well. This strategy was specifically designed to make a mortgage debt more tax-efficient, pay off the mortgage debt sooner, and also create an additional pension along the way.
OMI: With the markets in turmoil, and investment portfolios decreasing, what advice can you offer investors?
TM: When it comes to investments, the biggest considerations are the risk tolerance and objectives of the individual, as well as the time horizon that they have. Although one person may see the markets as catastrophic, another may see them as an opportunity. Because investments are sold in units, in a “bull” market the purchasing power of your dollar is minimized, whereas in a “bear” market, your dollar can go a much longer way... and that’s exactly where we are today. It is strongly recommended before you purchase any investments, that they are in line with your risk tolerance and also your investment objectives. Conversely, it is equally recommended that before you sell any of your investments, you are aware of the possible repercussions of doing so. If time is on your side and you don’t need to draw off any of your investments, surrendering them or cashing out may be the worst thing you could do. Consult with an advisor and/or get a second opinion, always!
For expert financial advice please contact Troy Matty, he can be reached at:
Troy Matty
Absolute Financial Group
416.717.5629
tmatty@absolutefinancial.ca
For expert mortgage advice please contact Greg Barrow:
416.807.7123
gbarrow@dominionlending.ca
Take an interest in bonds to understand mortgage rates
[Source - Fred Langan, Financial Post]
Mortgages are the biggest loan in just about everyone's life. And they can be the hardest to understand.
Why do mortgage rates move the way they do? Why don't the rates march in lock step with other interest rates?
When the Bank of Canada lowers interest rates the big banks usually play chicken for several hours waiting to see who will drop rates first. At the last cut, the TD Bank was the first to lower prime. The others followed within the hour.
If you had a variable rate mortgage tied to prime, then your mortgage rate moved lower. But all other mortgage rates stayed put.
Why? One pat answer is mortgage rates don't move with prime because mortgages are financed in the bond market.
Not true. Interest rates in the bond market influence mortgage rates, but that isn't where the money for mortgages comes from.
Banks get their mortgage money the same way they get other money: they take in deposits from bank accounts, GICs, etc., and then loan out the money at a higher rate. The difference, or the spread, is how commercial banks make most of their money.
Read Full Article Here: http://www.financialpost.com/money/story.html?id=983179
Mortgages are the biggest loan in just about everyone's life. And they can be the hardest to understand.
Why do mortgage rates move the way they do? Why don't the rates march in lock step with other interest rates?
When the Bank of Canada lowers interest rates the big banks usually play chicken for several hours waiting to see who will drop rates first. At the last cut, the TD Bank was the first to lower prime. The others followed within the hour.
If you had a variable rate mortgage tied to prime, then your mortgage rate moved lower. But all other mortgage rates stayed put.
Why? One pat answer is mortgage rates don't move with prime because mortgages are financed in the bond market.
Not true. Interest rates in the bond market influence mortgage rates, but that isn't where the money for mortgages comes from.
Banks get their mortgage money the same way they get other money: they take in deposits from bank accounts, GICs, etc., and then loan out the money at a higher rate. The difference, or the spread, is how commercial banks make most of their money.
Read Full Article Here: http://www.financialpost.com/money/story.html?id=983179
RBC lowers mortgage rates
RBC Royal Bank today announced that it is decreasing its residential mortgage rates effective November 26, 2008 and is introducing three new mortgage rate offers.
The rate has decreased a 1/4 point from 7.20% to 6.95%. It is expected the other major banks will also lower there rates. This is great news for people shopping for new homes.
[http://www.newswire.ca/en/releases/archive/November2008/26/c4332.html]
The rate has decreased a 1/4 point from 7.20% to 6.95%. It is expected the other major banks will also lower there rates. This is great news for people shopping for new homes.
[http://www.newswire.ca/en/releases/archive/November2008/26/c4332.html]
Wednesday, November 19, 2008
Realtor.ca
How many times have you visited http://www.mls.ca/?
When was the last time you visited?
It is now www.realtor.ca and after its initial relaunch a few weeks ago they have received over 16,000 emails from unhappy house hunters trying to figure out the new system.
A recent article in the Toronto Star explains:
[Source - Murray Whyte Toronto Star]
Messing with our real estate crack
When wildly popular property site MLS.ca was relaunched last month, no one could have anticipated the furious response. Some of the protesters are even looking for a house.
Her name is Briana, and she's an addict, a point she freely admits – promotes, even – online. Her addiction, though, isn't one likely to cause the typical ills associated with junkiedom – the dissolution of relationships, loss of career, or even physical harm (though her mouse-click finger gets a little stiff sometimes).
Online, Briana (her last name is Tomkinson) sporadically maintains a blog called MLS Addict, broadcasting her affliction: a devotion beyond reason to MLS.ca, the web site maintained by the Canadian Real Estate Association which lists properties for sale nationwide (MLS stands for Multiple Listing Service).
According to Comscore, which tracks web traffic, MLS.ca garners 3 million unique hits every month. When the site relaunched last month with a confusing array of new features, the response revealed what Tomkinson always knew: Her kind are legion.
Read Full Article Here: http://www.thestar.com/News/article/537393
When was the last time you visited?
It is now www.realtor.ca and after its initial relaunch a few weeks ago they have received over 16,000 emails from unhappy house hunters trying to figure out the new system.
A recent article in the Toronto Star explains:
[Source - Murray Whyte Toronto Star]
Messing with our real estate crack
When wildly popular property site MLS.ca was relaunched last month, no one could have anticipated the furious response. Some of the protesters are even looking for a house.
Her name is Briana, and she's an addict, a point she freely admits – promotes, even – online. Her addiction, though, isn't one likely to cause the typical ills associated with junkiedom – the dissolution of relationships, loss of career, or even physical harm (though her mouse-click finger gets a little stiff sometimes).
Online, Briana (her last name is Tomkinson) sporadically maintains a blog called MLS Addict, broadcasting her affliction: a devotion beyond reason to MLS.ca, the web site maintained by the Canadian Real Estate Association which lists properties for sale nationwide (MLS stands for Multiple Listing Service).
According to Comscore, which tracks web traffic, MLS.ca garners 3 million unique hits every month. When the site relaunched last month with a confusing array of new features, the response revealed what Tomkinson always knew: Her kind are legion.
Read Full Article Here: http://www.thestar.com/News/article/537393
Think your borrowing costs are cast in stone? Maybe it's time to ask
The following article in yesterdays Globe and Mail is a great article on the recent changes to the Manulife All-in-One product which has most of their clients seeing red. This product which is sold through financial advisers (not available through mortgage brokers) was sold by the financial advisers as a "prime rate" product and that the rate would never change. This selling feature written in the content of product details on the Manulife website has since been removed from the Manulife website.
[Source - ROB CARRICK - globeandmail.com 18/11/08]
When you deal with companies in the financial sector, you run the risk that their pain will turn out to be your pain.
This is what's happened recently to clients of Manulife Financial, Canada's biggest insurance company, and Envision Financial, a large credit union in British Columbia. Affected in various ways by the global financial crisis, both have made changes that resulted in higher borrowing costs for some clients.
In the past few years or so, virtually all financial institutions have bumped up the cost of mortgages and lines of credit. But Manulife and Envision differ in that it's not just new clients who will pay more. Existing clients who may have thought they had a particular arrangement in place are now paying more as well.
Before the financial crisis, you could get away with signing up for a mortgage or line of credit without asking about your lender's ability to change the rules determining your interest rate. Now, it's clear that you have to ask, or risk a surprise increase later on.
Read Full Article Here: http://www.theglobeandmail.com/servlet/story/LAC.20081118.RCARRICK18/TPStory/Business
Similar All-in-One products are offered by mortgage brokers through other lenders. Be sure to speak with a professional mortgage agent and get all the details on these types of products before going into them.
[Source - ROB CARRICK - globeandmail.com 18/11/08]
When you deal with companies in the financial sector, you run the risk that their pain will turn out to be your pain.
This is what's happened recently to clients of Manulife Financial, Canada's biggest insurance company, and Envision Financial, a large credit union in British Columbia. Affected in various ways by the global financial crisis, both have made changes that resulted in higher borrowing costs for some clients.
In the past few years or so, virtually all financial institutions have bumped up the cost of mortgages and lines of credit. But Manulife and Envision differ in that it's not just new clients who will pay more. Existing clients who may have thought they had a particular arrangement in place are now paying more as well.
Before the financial crisis, you could get away with signing up for a mortgage or line of credit without asking about your lender's ability to change the rules determining your interest rate. Now, it's clear that you have to ask, or risk a surprise increase later on.
Read Full Article Here: http://www.theglobeandmail.com/servlet/story/LAC.20081118.RCARRICK18/TPStory/Business
Similar All-in-One products are offered by mortgage brokers through other lenders. Be sure to speak with a professional mortgage agent and get all the details on these types of products before going into them.
Canada's mortgage consumers 'remarkably positive'
[Source - Eric Beauchesne, Canwest News Service]
Canadians are still in a mood to mortgage.
Nearly four in 10 still think that now is a good time to buy a house, even though the proportion who expect home prices to fall has soared and the proportion expecting higher housing prices has plunged, according to survey results published yesterday.
"Residential mortgage consumers remain remarkably positive as they weather the financial storm," the Canadian Association of Accredited Mortgage Professionals said in releasing the results of a mid-October survey.
Attitudes toward area conditions have shifted only slightly, with 38 per cent of Canadians believing now is a good time to purchase a house, compared to 32 per cent who believe it is a bad time.
Read Full Article: http://www.househunting.ca/buying-homes/story.html?id=a282684c-a28f-48ec-9a0a-747882181c2c
Canadians are still in a mood to mortgage.
Nearly four in 10 still think that now is a good time to buy a house, even though the proportion who expect home prices to fall has soared and the proportion expecting higher housing prices has plunged, according to survey results published yesterday.
"Residential mortgage consumers remain remarkably positive as they weather the financial storm," the Canadian Association of Accredited Mortgage Professionals said in releasing the results of a mid-October survey.
Attitudes toward area conditions have shifted only slightly, with 38 per cent of Canadians believing now is a good time to purchase a house, compared to 32 per cent who believe it is a bad time.
Read Full Article: http://www.househunting.ca/buying-homes/story.html?id=a282684c-a28f-48ec-9a0a-747882181c2c
Friday, November 7, 2008
Recent Mortgage Industry News
Effective November 6th, 2008 TD Canada Trust will no longer be offering the Open VRM as part of their product line up.
CitiFinancial has halted the origination of new mortgages through Canadian brokers. They have also exited the US mortgage market. Citi was best known among mortgage professionals for their 100% loan-to-value second mortgages. Citi will honour all commitments that close on or before December 3rd. Get your documents in quickly if you have a mortgage pending with them.
AGF Trust will be closing its Montreal office this week to consolidate operations with its Toronto office. AGF says the move is designed to streamline operations. They will also be making changes to their product offering that will restrict lending to select urban locations. AGF Trust is a balance sheet lender (i.e. it funds its mortgages itself versus securitizing them) and is based in Toronto. The company specializes in "near-prime" mortgages.
HSBC is closing its Markham, Ontario mortgage underwriting office effective December 31, 2008 and will be moving all mortgage underwriting operations for Canada to its Burnaby, BC office.
Merix has temporarily suspended their HELOC offering on new deals. Existing commitments will be honored.
[Source - Dominion Lending Centres - Head Office - Bulletin]
CitiFinancial has halted the origination of new mortgages through Canadian brokers. They have also exited the US mortgage market. Citi was best known among mortgage professionals for their 100% loan-to-value second mortgages. Citi will honour all commitments that close on or before December 3rd. Get your documents in quickly if you have a mortgage pending with them.
AGF Trust will be closing its Montreal office this week to consolidate operations with its Toronto office. AGF says the move is designed to streamline operations. They will also be making changes to their product offering that will restrict lending to select urban locations. AGF Trust is a balance sheet lender (i.e. it funds its mortgages itself versus securitizing them) and is based in Toronto. The company specializes in "near-prime" mortgages.
HSBC is closing its Markham, Ontario mortgage underwriting office effective December 31, 2008 and will be moving all mortgage underwriting operations for Canada to its Burnaby, BC office.
Merix has temporarily suspended their HELOC offering on new deals. Existing commitments will be honored.
[Source - Dominion Lending Centres - Head Office - Bulletin]
Thursday, November 6, 2008
Pre-approvals should always come in writing
An article in today's Metro paper explains why having a pre-approval in writing is very important prior to submitting an offer. I believe the first step anyone should take when considering a home purchase, whether you are a first time home buyer or not is to get a pre-approval. If you are in that process now and would like to discuss your options, please feel free to give a call or send me an email.
A pre-approval should also come in writing. It should be a commitment from a lender who is offering you a product at a set rate for a specific period of time. For example you may be pre-approved for $375,000 at a fixed rate of 5.34% for a 3 year term and this rate will be held for 120 days while you look for a home. You can then let your realtor know how much you have been pre-approved for and you can start your search knowing what price range you can shop for.
I also advise that you include the financing clause in your offer even with your pre-approval because many things can change in 120 days and it is better to be safe than sorry.
To read the article from the Metro - click here.
Call me today to get your pre-approval!
A pre-approval should also come in writing. It should be a commitment from a lender who is offering you a product at a set rate for a specific period of time. For example you may be pre-approved for $375,000 at a fixed rate of 5.34% for a 3 year term and this rate will be held for 120 days while you look for a home. You can then let your realtor know how much you have been pre-approved for and you can start your search knowing what price range you can shop for.
I also advise that you include the financing clause in your offer even with your pre-approval because many things can change in 120 days and it is better to be safe than sorry.
To read the article from the Metro - click here.
Call me today to get your pre-approval!
Wednesday, November 5, 2008
GTA Resale Housing Market Continues to Reflect Economic Times
The Greater Toronto Area resale housing market reported 5,155 sales in October, Toronto Real Estate Board President Maureen O’Neill announced today.
This represents a 35 per cent decline from the 7,915 sales reported in October 2007 and a 25 per cent decrease from the 6,876 transactions that took place during the same period two years ago.
In the City of Toronto, there were 2,136 sales, with sales activity down 38 per cent from the 3,455 transactions recorded last October.
In the 905 Region 3,019 sales were recorded, with sales activity down 32 per cent from a year ago when 4,460 homes changed hands.
With 68,570 transactions to date this year, sales are within 16 per cent of the 81,563 transactions noted a year ago. The 2007 market referred to was a record breaking year with each month breaking records for the entire year. Putting into perspective 2008 figures are indicative of a return to a more balanced market.
Read Full Article Here
[Source - www.TorontoRealEstateBoard.com]
This represents a 35 per cent decline from the 7,915 sales reported in October 2007 and a 25 per cent decrease from the 6,876 transactions that took place during the same period two years ago.
In the City of Toronto, there were 2,136 sales, with sales activity down 38 per cent from the 3,455 transactions recorded last October.
In the 905 Region 3,019 sales were recorded, with sales activity down 32 per cent from a year ago when 4,460 homes changed hands.
With 68,570 transactions to date this year, sales are within 16 per cent of the 81,563 transactions noted a year ago. The 2007 market referred to was a record breaking year with each month breaking records for the entire year. Putting into perspective 2008 figures are indicative of a return to a more balanced market.
Read Full Article Here
[Source - www.TorontoRealEstateBoard.com]
Yes They Did
Wow! What an historical night, they actually did it.
Congratulations to President Obama and the United States of America.
I hope this means a sooner than expected turnaround for their economy, which of course will certainly benefit our economy here in Ontario. I believe this is an exciting time and the USA will be able to repair its image around the globe which in turn will hopefully lead to more peaceful times ahead.
Congratulations to President Obama and the United States of America.
I hope this means a sooner than expected turnaround for their economy, which of course will certainly benefit our economy here in Ontario. I believe this is an exciting time and the USA will be able to repair its image around the globe which in turn will hopefully lead to more peaceful times ahead.
Tuesday, November 4, 2008
Realtors urge feds to defer home-sale tax
[Source - Dave Cooper, edmontonjournal.com]
Ottawa could help Canadians cut carbon dioxide emissions and stimulate the economy by adopting a tax deferral plan that would allow investors to sell properties without facing an immediate tax hit if they reinvested in real estate, says the Canadian Real Estate Association.
The proposal would defer both the capital gains and capital cost allowance recovery when an investment property is sold and the proceeds are invested in another property within the year. This would stimulate investment and help regenerate aging urban communities, but could cost the federal government about $425 million in immediate tax revenue.
Read Full Article
Ottawa could help Canadians cut carbon dioxide emissions and stimulate the economy by adopting a tax deferral plan that would allow investors to sell properties without facing an immediate tax hit if they reinvested in real estate, says the Canadian Real Estate Association.
The proposal would defer both the capital gains and capital cost allowance recovery when an investment property is sold and the proceeds are invested in another property within the year. This would stimulate investment and help regenerate aging urban communities, but could cost the federal government about $425 million in immediate tax revenue.
Read Full Article
Don't balk, a case can be made for variable-rate mortgages
[Source - ROB CARRICK - globeandmail.com - 4/11/08]
Once the darling of savvy homeowners, the variable-rate mortgage has become a nasty piece of business lately.Rates for these mortgages are vastly more expensive than they used to be, and some lenders are charging a fair bit more than others. It's probably best to avoid variable-rate mortgages altogether for the time being, right?
Not so fast. There's a case to be made for variable-rate mortgages right now, even if homeowners are shunning them.
Before the global financial crisis gummed up bank lending, you could get a variable-rate mortgage at the prime lending rate at major financial institutions minus a discount of up to 0.9 of a point or so. Today, variable-rate mortgages are going for prime plus a full percentage point in many cases.
If you are in the process of purchasing a new home or you mortgage is coming up for a renewal, and you would like to discuss your options, please call or email Greg Barrow at Dominion Lending Centres at 416 807 7123.
Monday, November 3, 2008
Independent Mortgage Brokers Association (IMBA):
The Independent Mortgage Brokers Association of Ontario (IMBA) is an organization of mortgage financing professionals. IMBA exists to advance the mortgage brokerage industry on behalf of its Members through public advocacy; to participate in consultative processes with regulators and other industry participants; and to generally assist its Members with their businesses. Members of the Association are required to meet professional standards as a condition of membership.
IMBA counts approximately 1,600 Members, which represent more than 300 companies throughout Ontario. The Association’s membership is comprised of representatives from various mortgage-related industries, including mortgage brokers and agents, lenders, title insurers, appraisers, lawyers and real estate professionals.
Members are continuously kept informed about the latest industry advancements, products, trends, regulatory matters, and related services. Members receive information either through communication pieces, professional development conferences, seminars, or other events. Consumers can comfortably rely upon IMBA’s Members to provide them with superior levels of knowledge and experience when arranging mortgage financing.
I am a proud member of IMBA.
Visit their website: www.imba.com
Rate Your Mortgage Broker consumer survey
[Source - Canadian Mortgage Professional - October 2008]
In the first annual Canadian Real Estate magazine (CRE) Rate Your Mortgage Broker consumer survey, an astounding 94% of respondents said they'd use a mortgage broker again. Cindy Freiman talks to consumers to unveil the ins and outs of their recent mortgage experiences.
What brokers did well
Of the consumers polled, 38% revealed that they were happy with the overall experience offered by their broker and could not come up with suggestions on how to improve the relationship moving forward.
When it came to product knowledge, an astonishing 90% of consumers said they strongly agreed or agreed that their broker had a strong grasp on the available products to meet their clients' needs.
Brokers also received a favourable grade on product choice, with 73% of respondents saying the broker offered a wide variety of mortgage products from which to choose.
Where specific needs were concerned, 84% of participants felt their broker quickly understood their particular needs.
When asked the ever-popular rate-driven question of whether the broker found them a better-than-expected deal on a mortgage (regardless of whether they took the brokers up on these mortgages), 70% of consumers said they strongly agreed or agreed.
Read Full Article
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