More Canadians are Turning to Mortgage Brokers

When it comes to mortgage financing, more and more Canadians are choosing to work with a professional mortgage broker. According to a recent study by the Canada Mortgage and Housing Corporation (CMHC), 23 per cent of mortgages written were arranged through a broker.



Canadians are just catching up with their American neighbors, who are far less likely to simply walk into their home bank for a mortgage. In 2000, almost 70 per cent of all U.S. mortgages were arranged through mortgage brokers.

If we follow the U.S. model – and it seems that we are — then we’re in for a sea of change in the way Canadians manage their most significant personal asset. It makes sense. After all, investment returns aren’t as lucrative as they were five years ago, and investors are seeking out ways to make financial gains through avenues they may have overlooked.


There are some significant benefits to working with an independent mortgage broker. Firstly, let’s compare mortgage expertise: Most banks have one or more representatives who are specifically assigned to assist with mortgages. Their role is to develop mortgage business for the banks. A ontario mortgage broker, on the other hand, is a trained mortgage professional who has met standards for education. The comprehensive training of an independent mortgage broker may exceed the training of their counterparts at the bank. More importantly, the mortgage broker is independent. He or she is not an employee of a lending institution, but has access to rate and option information for a full spectrum of chartered banks and other lending institutions. Their role is to find the best possible mortgage rates and options for you.


Let’s also look at choice: A mortgage broker offers you access to many competitive lenders, each with a range of mortgage options. It would take weeks of research, telephoning and personal visits to recreate the range of features and options that a mortgage broker has at his or her fingertips. Rate information, mortgage options and payment schedules are up-to-the-moment, so you and your broker can make valid comparisons of the options available. The result of all this choice is a mortgage which is customized to meet your needs and to save you money.


Also consider accessibility. Your mortgage broker will be available to you before and after your mortgage closes, which will be good news for those who have spent long hours on hold or in a telephone voice answering loop.


Above all, clients have turned to mortgage brokers for better rates. Access to a broad range of lending institutions is a critical advantage for mortgage shoppers. A quarter-point difference on your mortgage rate can add up to thousands of dollars over the life of your mortgage. Many mortgage brokers work inside a brokerage organization with sufficient mortgage volumes that they can negotiate the best possible rates for your situation. Canadian homeowners who have experienced the benefits of a mortgage broker are unlikely to ever return to a world in which they simply accept the best posted rate at their local bank.

We are commited to providing quality information to help people make informed decisions about their mortgage financing needs.

See the latest Ontario Mortgage Rates.

[Source - Dominion Lending Centres] 

Bank of Canada maintains overnight rate target at 1 per cent

FOR IMMEDIATE RELEASE 18 January 2011

CONTACT: Jeremy Harrison 613 782-8782

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Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA –The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding at a somewhat faster pace than the Bank had anticipated, although risks remain elevated. Private domestic demand in the United States has picked up and will be reinforced by recently announced monetary and fiscal stimulus. European growth has also been slightly stronger than anticipated. Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. In response to overheating, some emerging markets have begun to implement more restrictive policy measures. Their effectiveness will influence the path of commodity prices, which have increased significantly since the October Monetary Policy Report (MPR), largely reflecting stronger global growth.

The recovery in Canada is proceeding broadly as anticipated, with a period of more modest growth and the beginning of the expected rebalancing of demand. The contribution of government spending is expected to wind down this year, consistent with announced fiscal plans. Stretched household balance sheets are expected to restrain the pace of consumption growth and residential investment. In contrast, business investment will likely continue to rebound strongly, owing to stimulative financial conditions and competitive imperatives. Net exports are projected to contribute more to growth going forward, supported by stronger U.S. activity and global demand for commodities. However, the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance are restraining this recovery in net exports and contributing to a widening of Canada’s current account deficit to a 20-year high.

Overall, the Bank projects the economy will expand by 2.4 per cent in 2011 and 2.8 per cent in 2012 – a slightly firmer profile than had been anticipated in the October MPR. With a little more excess supply in the near term, the Bank continues to expect that the economy will return to full capacity by the end of 2012.
Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the Canadian economy. Core inflation is projected to edge gradually up to 2 per cent by the end of 2012, as excess supply in the economy is slowly absorbed. Inflation expectations remain well-anchored.  Total CPI inflation is being boosted temporarily by the effects of provincial indirect taxes, but is expected to converge to the 2 per cent target by the end of 2012.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered. 


Information note:
A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 19 January 2011. The next scheduled date for announcing the overnight rate target is 1 March 2011.

Flaherty unveils new rules aimed at curbing soaring household debt

OTTAWA - Finance Minister Jim Flaherty has announced new mortgage regulations aimed at reducing Canadians' soaring household debt.

Flaherty has unveiled three new rules:

1) Mortgage amortization periods will be reduced to 30 years from 35 years.

2) The maximum amount Canadians can borrow to refinance their mortgages will be lowered to 85 per cent from 90 per cent.

3) The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.

The rules are aimed at encouraging responsible lending and borrowing and encouraging people to increase their home equity.

"Our measures will help improve the financial situation of households in Canada," Flaherty said.
"While interest rates are currently low by historical standards, eventually they will rise. Canadians should — and for the most part do — understand this when taking on significant debt such as the purchase of a new home."
The minister said the measures are aimed at protecting "the stability of the economy by ensuring lenders' practices are sustainable." He said that will increase the security and stability of home ownership.

"This will also increase the savings of Canadian families — savings of tens of thousands of dollars over the life of a mortgage, savings that go back in the pockets of hardworking families, where they belong."
The new rules come on the heels of a Bank of Canada announcement that Canadians' domestic debt burdens have hit record levels. The ratio of household debt to disposable income has reached 147 per cent and household debt has reached $1.4 trillion. The International Monetary Fund has called household debt the No. 1 risk to the Canadian economy.

[Source - The Canadian Press]

If you have any questions on how these rules may affect you, please feel free to call or email me.

I think these rules are good and although they may prevent some from buying a home now, they will force these people to save more money to facilitate a purchase in the future which will make them better off in the long run.

What are your thoughts on the new rules?

About Dominion Lending Centres - Richmond Hill Mortgages

• We are Canada’s premier online mortgage company, and one of the fastest growing mortgage brokerages nationwide!
• We have more than 1,700 Mortgage Professionals from more than 250 locations across the country!
• Our Mortgage Professionals are Experts in their field and many are ranked among the best nationally.
• We work for you, not the lenders, so your best interests will always be our number one priority.
• We have more than 100 mortgage programs, making it easy to choose the best fit for your unique situation.
• We close loans in all 10 provinces and 3 territories.
• We can process your mortgage in as few as 7 days.
• We are the preferred mortgage lender for several of Canada’s top companies.

Dominion Lending Centres’ Mortgage Professionals are available anytime, anywhere, evenings and weekends – and we’ll even come to you!

Please contact me if you have any questions!

Have a great day.

Hybrid mortgages – also known as 50/50 mortgage products

Hybrid mortgages – also known as 50/50 mortgage products – include an equal mix of fixed-rate and variable-rate components within your single mortgage. This means you get the best of both worlds – the security of fixed repayments with the flexibility of a variable rate.

Although there was a time in recent years when mortgage experts considered a variable rate mortgage as the obvious choice to save mortgage consumers money over the long term, with fixed rates remaining near historic lows, a 50/50 mortgage may be a great alternative for you.

In essence, since it’s extremely difficult to accurately predict rates over the long term, a 50/50 mortgage offers interest rate diversification, which can help reduce your level of risk.

If you opt for the Dominion Lending Centres 50/50 Balanced Mortgage, half of your mortgage is locked into a five-year fixed rate and half is at a five-year variable rate. You can lock in your variable-rate portion at any time without paying a penalty. As well, each portion of the 50/50 mortgage operates independently – like two separate mortgages – yet the product is registered as only one collateral charge.
 

The 50/50 mortgage product is well-suited to a variety of borrowers, including those who:

• Would normally go fully variable but are afraid prime rate is at its bottom
• Aren’t comfortable being locked into a fully fixed rate
• Can’t decide between a fixed or variable mortgage

Some features of the 50/50 mortgage include:

• 20% annual lump-sum pre-payment privileges
• 20% annual payment increase ability
• Portability (the option to transfer your existing loan amount to a new property without penalty)

As always, if you have questions about the 50/50 mortgage product and whether it’s right for you, or other mortgage-related questions, I’m here to help! Please contact me