First-Time Homebuyer’s Monitor

The housing market may have experienced some ups and downs this year, but the spirits of potential first-time homebuyers across Canada remain strong. In Genworth's recent First Time Homebuyer Monitor, they found that 84 per cent of those surveyed said that owning a home goes beyond its financial value and feel that homeownership pays off in more ways than one.

The study measured both the financial and psychological factors of homeownership – providing the following insights into the link between homeownership and personal fulfillment:

• 84 per cent agree with the statement, ‘Owning a home provides a greater sense of emotional well-being and security’.
• 85 per cent believe that even though homeownership may mean more work and effort, they’d rather own than rent.
• 88 per cent say they would feel more financially secure owning their own home.

The national survey of 2,521 Canadians was conducted between April 24 and May 4. Access Genworth Financial Canada First-Time Homebuyer’s Monitor for full details.

Ontario Mortgage Rates

This edition of Weekly Rate Minder has the latest, best rates for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the mortgage that suits your needs. Best of all - our service is "free".* It's the selected lender that pays us and YOU get the best rate. *(O.A.C., E.&O.E.)

• Explore Mortgage Scenarios with Helpful Calculators on gregbarrow.ca

Terms Posted Rates Our Rates 6 Months 4.60% 3.95% 1 YEAR 3.75% 2.65% 2 YEARS 4.05% 2.90% 3 YEARS 4.65% 3.39% 4 YEARS 5.14% 3.85% 5 YEARS 5.85% 4.09% 7 YEARS 6.80% 5.35% 10 YEARS 6.90% 5.25% Rates are subject to change without notice. *OAC E&OE Prime Rate is 2.25%.

3 year Variable rate mortgages from as low as Prime + .15% Rates are subject to change without notice. Fixed mortgage rates shown in table above and quoted variable mortgage rates are available nationally to qualified individuals. Some conditions may apply. Lower rates may be available in certain regions, or to those with higher credit scores or higher net worth – check with your Dominion Lending Centres Mortgage Expert for full details. *O.A.C., E.& O.E.

Central banks signal low rates here to stay

The low interest rates we have today may be here for longer than was originally expected. The Bank of Canada had said it planned to keep the overnight lending rate at 0.25% into the second quarter of 2009, now the rate may stay as low or very close to this rate into 2011.

This news comes after the world's leading central banking leaders met in Wyoming on the weekend. In a recent article published in the Financial Post, there a some great points on why:

"It seems more likely that there will be no increases in interest rates in any of the major economies over the next 12 to 18 months."

Most leaders around the globe agreed with this but also warned not to leave the rates too low for too long.

Read Full Article Here - Financial Post - August 24, 2009

For anyone who is renewing your mortgage in the next few months and prefers to take variable rate mortgages, you should consider a 3 year term at Prime + 0.15 = 2.4% (today). You may also want to consider a 1 year rate @ 2.65% or a 2 year rate at 2.90%. It is always best to consult with a Mortgage Professional prior to accepting your renewal and always shop around for the best mortgage product.

Understanding Your Credit Report

As credit has become more and more abundant in our society, your credit report, and thus your credit rating, has become more important in your daily life. Your credit rating affects all aspects of your financial activities when it comes to borrowing money. Your credit rating also has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account.

Your credit report itself is simply a listing of all of your mortgage and consumer debt. Here in Canada, the two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. Every time you borrow money, or make a payment on a loan or credit card, the lender then reports the information about the transaction to these two agencies. In addition to credit information, you will also find liens and judgments on your credit report as well as your address and possibly your work history. The accumulation of all of this information is called your credit report.

The information on your credit report varies based on your creditors and what they have reported about you. Potential lenders and others, such as employers, view your credit history as a reflection of your character. Whether we like it or not, our financial habits have a lot to say about the way in which we choose to live our lives.

The credit score, or beacon score, is a number which gives mortgage lenders an idea of your lending risk. Credit scores range from 300 to 900, the higher your credit score the better. The mortgage products and interest rate that you will qualify for are often determined by your credit score.

One thing that many people do not know is that you have the legal right to obtain a copy of your credit report. A mortgage professional can help you obtain a copy of this report and go through it with you to verify that all of the information is true and correct. This can be important for first time home buyers who need to prepare for their first purchase, and may need to do some work to get their credit score a little higher in order to qualify for certain mortgage products.

The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score.

In order to obtain a copy of your credit bureau with the credit score you can order it online at http://www.equifax.ca/

Mortgage Life Insurance Explained

Mortgage professionals can protect their clients’ families and their homes through a mortgage life insurance policy.

Mortgage life insurance is simply a life insurance policy on the homeowner which will allow their family or dependents to pay off the mortgage on their home should something tragic happen to them. This is not to be confused with mortgage default insurance, which lenders require to cover their own assets if you have less than 20% equity in your home. Mortgage life insurance is meant to protect the family of a homeowner and not the mortgage lender itself.

While it is nice to think that if you were to pass away your mortgage would be paid off, is it really necessary for you to pay for this service? If you already have an adequate amount of life insurance then the answer might be no.

If you are the primary breadwinner in your home and your death would leave your family without the means to pay for the mortgage, then mortgage life insurance might be a good option.

When looking at mortgage life insurance policies, it’s important to know if the policy that you choose is portable, and if it’s backed by a large organization. A mortgage professional will take you through the ins-and-outs of mortgage life insurance. By evaluating what you really need, and the differences in coverage and costs, you can make the best decisions for you and your loved ones.

[Dominion Lending Centres]

What Type of Home Should I Buy

There is an endless supply of different types of homes available for purchase – ranging from condos to townhouses to fully-detached homes. The key is to decide what you can afford and which amenities you prefer before heading out shopping for a new home.

Your best first step is to seek the advice of a Dominion Lending Centres Mortgage Professional and get pre-approved on a mortgage. That way, you already know what your price range is – and, therefore, which type of home you’re in the market for – before you begin shopping.

Budgeting is also an important part of preparing yourself for the purchase of a home. If you save for a down payment and up-front costs, such as closing costs and emergency reserves, much sooner, you’ll be sure to save enough to cover the many expenses facing a new homeowner, including moving, utility hook-ups, tools, maintenance supplies, window coverings, etcetera.

Once you have the money available to make your home purchase a reality, you should weigh the following options to help decide what type of home is right for you:

Condo
A condo makes a great first home because it typically costs less than a townhouse or a detached home, which translates into a smaller down payment. But there are, however, monthly maintenance fees you must take into consideration when budgeting for a condo.

Condos are also ideal for those who do not want to maintain a lawn or worry about clearing snow away from walkways and driveways.

Townhouse
If the condo life is not your forte and you’re not looking for a big yard to maintain, a townhouse may be your best home purchase option.

A townhouse costs less than a fully-detached home and results in cheaper property taxes as well.

Many townhouses also come with monthly maintenance fees unless they are freehold townhouses. In situations where you pay a monthly fee, however, you won’t have to worry about outdoor maintenance or snow removal.

Detached Home

If it’s privacy you’re seeking as well as a larger yard, a detached home is your ideal choice. Still, prices can vary drastically based on such variables as whether you’re seeking a spot in the city, a place in the suburbs or a more rural location.

Other Considerations
The size of the home and property (if you decide not to opt for a condo) are also important things to consider before you head out shopping. While everyone has their dream home in mind, this is not always a practical purchase choice, especially if this is your first home purchase.

When it comes to location, think about in which area or neighbourhood you’d like to make your purchase, and which home features are absolutely essential – including what you can live without and what aspects are entirely out of the question.

Take a look at real estate ads for the area(s) you’re interested in to see what’s on the market and the price ranges. Also drive around a few neighbourhoods and see what’s for sale or visit Open Houses. This can help crystallize what you want or don’t want in a home.

By making your first purchase a modest and affordable ‘starter’ home, you will be putting money towards a mortgage that will build equity in that home. And once you’ve paid down a significant portion of that first home’s mortgage, you will then have more money to put towards an upgrade into your dream home.

If you have any questions, or would like to take the first step by obtaining a pre-approval, please contact me: gbarrow@dominionlending.ca

Thanks.

Ontario Mortgage Rates

This edition of Weekly Rate Minder has the latest, best rates for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the mortgage that suits your needs. Best of all - our service is "free".* It's the selected lender that pays us and YOU get the best rate. *(O.A.C., E.&O.E.)

• Explore Mortgage Scenarios with Helpful Calculators on gregbarrow.ca

Terms Posted Rates Our Rates 6 Months 4.60% 3.95% 1 YEAR 3.75% 2.70% 2 YEARS 4.05% 2.99% 3 YEARS 4.65% 3.39% 4 YEARS 5.14% 3.85% 5 YEARS 5.85% 4.09% 7 YEARS 6.80% 5.35% 10 YEARS 6.90% 5.25% Rates are subject to change without notice. *OAC E&OE Prime Rate is 2.25%.

Variable rate mortgages from as low as Prime + .3o% Rates are subject to change without notice. Fixed mortgage rates shown in table above and quoted variable mortgage rates are available nationally to qualified individuals. Some conditions may apply. Lower rates may be available in certain regions, or to those with higher credit scores or higher net worth – check with your Dominion Lending Centres Mortgage Expert for full details. *O.A.C., E.& O.E.

Top 5 Mortgage Mistakes

Obtaining financing on a new or existing home can be a stress-free, straight-forward process if you’re prepared. But if you’re not prepared, there are many common mistakes you can make. Most of these mistakes are easily avoidable with some preparation and informed advice – feel free to call me with any questions/concerns.

Below are the Top 5 Mortgage Mistakes people make when trying to secure financing for their home:

1) Failing to choose the best product for your situation
There are many different types of loans out there. There are fixed- and variable-rate products, hybrid and no-frills mortgages, lines of credit, 1-10-year terms, up to 35-year amortizations, and more. And although choice is great, it can be quite overwhelming without expert advice. While one person would benefit from a variable-rate product, their neighbour may be better suited to a fixed-rate product. The key is to always explain your current situation and future goals in detail to me so I can select a product that best meets those needs.

2) Automatically renewing with your existing lender
Although you may feel an allegiance with the current financial institution that holds your loan, they may not be able to offer you the best products. When refinancing or renewing, I will always shop the market for your best available option, much like I do when securing your first mortgage. This ensures you end up with the best mortgage rate and terms customized to your unique situation. In many cases your bank will offer you the posted rate in hopes of you signing the commitment without shopping around. Make sure you do your due diligence when refinancing and renewing. After all, this is your home, your mortgage and your money!

3) Signing documents without reading them
Never sign documents without reading them. If you are unsure about your understanding, always ask me for clarification. Remember that you are the one entering into the agreement, so you need to understand and agree with what you are committing to.

4) Taking your credit to the limit
Make sure that your credit balances are in your favour when it comes to your mortgage application. Lenders are looking for an appropriate debt-to-income ratio. In other words, you need to have more income than you have debt. Avoid running up a balance on your credit cards and pay down existing debts as much as possible.

5) Failing to plan ahead
If you know that you will need to obtain, renew or refinance a mortgage, it’s essential to plan for it by ensuring your credit is in order. If it’s not, start preparing. Do not make any purchases on your credit cards that you cannot pay off and if you carry a balance on your credit cards, start paying them down. Refrain from making any large purchases before securing your mortgage. If you’re planning to buy a car, wait until after you have secured financing, as your debt-to-income ratio will rise and you don’t want this while trying to secure a mortgage.

Understanding how the mortgage process works and how lenders qualify your loan will help you avoid the above mistakes. As always, if you have any questions or concerns, I’m here to help!

[Source - Dominion Lending Centres]

Harmonized Sales Tax Impact on Condo Owners

There are many reason why people are upset about the new harmonized sales tax that will be coming into effect in 2010. While there are pro's and con's to the tax, another con to HST was discussed in a recent article that appeared in the Toronto Sun.

Condo owners will be facing a hike in their condo fee's and it is twofold. Currently the condo fee is subject to GST only on certain services and when HST comes in there will be an additional 7% added to those services which will drive up the condo fee's.

In addition, condo boards will also have to increase the reserve fund and that will also mean increasing monthly condo fee's and will affect newer condo owners even more as they are building the reserve fund to begin with.

The article goes on to point out that in some cases the condo fees will now be more than the mortgage payments.

The provincial government again defends its decision saying the cost will be offset in tax breaks.

Read Full Article Here: Harmonized tax a 'mess' for condos

If you have any comments regarding the harmonized sales tax, let us know.

Choosing the right Realtor

The number one mistake people often make when choosing a real estate agent when selling their home is selecting someone based solely on the fact that they’re a friend or family member who is also a real estate agent. It’s important to let your friend or family member know that you will be interviewing other real estate agents – if for no other reason but to make your friend or family member be on their game to prove they are worthy of selling your home. Remember that this is a business decision, not a personal one.

Following are four keys points to keep in mind when selecting a real estate agent:

1) Interview more than one real estate agent. This is often a big mistake people make. It is valuable to hear a couple different viewpoints on the pricing of your home, the strategy proposed for marketing and the track record of the candidates. Also remember that if you’re going to be working closely together for a few weeks or longer, it’s important that you also like the person you will be dealing with. If they turn you off in the first meeting what do you think it will be like after three weeks of continuous contact and meetings?

2) Write out your questions in advance. Do some research, and remember this is an interview. The Internet is full of informative sites that can be used to gather some questions that you should ask your candidates. It also allows you to reflect on their answers later during the deliberation phase to see who you will choose.

3) Innovative and fresh marketing strategies. Make sure you go with the real estate agent who has a broad, unique and innovative marketing strategy. If the strategy is holding open houses and advertising in the local real estate print media, they’re not offering you anything different than the average agent. Today’s marketing strategy must have a solid Internet and/or social media component as this is the way buyers today are shopping for homes. A staggering 80%+ of buyers today shop online for their real estate. Opt for the agent who comes up with more strategies to get your home in front of as many potential buyers as possible.

4) Price strategy. This is a big one. Make sure you ask lots of questions on how they came up with the proposed price for your home. Try not to get in the way here. Many homeowners have an inflated view of the value of their home and weak real estate agents will just agree with your over-priced value in order to get the listing, and then just beat you down over the coming weeks to get your price where it should have been. It will sell weeks later than it could have if you had priced it right in the first place. If a real estate agent does not respectfully disagree or challenge you on your inflated price, then you need to ask yourself if this is the right professional for you. If you have chosen your candidates wisely, you are dealing with someone who has sold many homes in your area and knows more about the price than you do. Trust the experts.

Resale record in July according to GTA Realtors

[Source - Toronto Real Estate Board]
In July 2009, Greater Toronto REALTORS® reported a record 9,967 sales, up 28 per cent from July 2008. The average price for July transactions was$395,414 – up by six per cent compared to the same month last year.

"Households confident in their positioning within the current economic environment have taken advantage of housing affordability in the GTA," said TREB President Tom Lebour. "The real estate sector has been one of the sectors making a positive contribution to economic growth in the GTA, not to mention Ontario and Canada more broadly."

Year-to-date sales, at 50,632 are down 1.2 per cent compared to the first seven months of 2008. Average price, at $385,808 is down by less than one-half of one per cent.

"The steep drop-off in sales experienced at the beginning of the year has all but dissipated," explained Jason Mercer, TREB's Senior Manager of Market Analysis. "With five months left to go in the year, it is probable that total existing home sales in 2009 will be at or above last year’s level."
Read July Market Watch

Canadian Lenders are good!

Canadian lenders have enough capital to withstand losses without needing to raise more cash, Standard & Poors said.

“Like all banks elsewhere in the world, Canadian financial institutions are likely to experience additional losses as the recession continues,” the New York-based rating company said Thursday in a statement. “On the positive side, stress tests reveal that these banks have sufficient capital to withstand losses in what we believe is the likeliest case.”

Lenders including Royal Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia exceed the minimum capital thresholds that S&P identified as necessary to cover losses, the company said. The tests also included credit unions in British Columbia and Quebec, and HSBC Canada.

“Canadian financial institutions performed better under our stress tests than do those we rate in the US under similar tests,” S&P said. – Financial Post