Category Archives: News

Variable rate mortgage rates hovering on historic low

With the Royal Bank of Canada’s implementation of the latest round of mortgage rate increases last week, banks and other major lenders have begun lowering the discounts for floating rate mortgages.
 
Even with the new 2.6 per cent rate average on variable-rate products, however, this is still considered by industry observers to be among its historically lowest levels. To compare, fixed-rate mortgages with five-year terms currently enjoy a rate of 3.04 per cent.
 
Experts noted that such stretches of low rates allow variable-rate buyers to save more, although the option essentially removes the safety blanket of a stable rate throughout the term. The RBC raise gave incentive to some banks to get in lockstep, though.
 
“The spreads were narrowing and that causes us to raise rates,” Bank of Nova Scotia’s real estate lending head David Stafford told the Financial Post, elaborating on the bank’s move to implement a similar average on variable-rate products.
 
Industry players said that these numbers are the reason why lenders continue to offer cut-off primes of 50 basis points for variable rate mortgages, as banks profit less from floating rates than from borrowers locking in their loans.
 
“We kind of chuckled when they raised rates because we have some lenders dropping rates. The big banks are trying to move people out of the variable (and get them to lock in),” MonsterMortgage.ca owner and broker Vince Gaetano told the Financial Post.
 
Source: Mortgage Brokernews

6 Ways a mortgage is like a relationship

Many years ago, every date had a chapter one. Today, though a chapter one is no longer required, some of us still like to have input from friends and family as to how suitable a potential partner is for us. The same goes when getting a mortgage. Friends and family are your relationship experts while Mortgage Professionals are your mortgage experts. Below are some helpful tips for keeping your relationship with your mortgage going smoothly.

Communication is key

It’s never a bad idea to discuss a problem with your partner; you should feel as though you can share your stress with them so you don’t have to deal with it alone. The same goes with your mortgage lender if you’re experiencing any financial difficulties and you can’t make a payment, or you need additional funds to consolidate debts. Talking with your lender is in the best interest of both parties involved. This is especially true if you anticipate a problem, as making sure everyone is aware of the situation makes a solution more likely than if you go into the silent treatment mode.

Don’t let your past poison your present

If you’ve had some credit hiccups in the past, don’t let it stop you from moving on and establishing new positive credit habits. We are all allowed to make bad decisions as long as we learn from them, it’s important to take action and establish good credit as soon as possible to offset the bruised repayment habits. In order to qualify for the lowest rates and most favorable terms, you need to show a potential lender that you’re a good catch. You can do this by moving past the bad and changing your ways, or pay higher rates and a potentially larger downpayment.

Are you really ready to commit?

It can be tough if you get into a relationship and realize a ways into it that you weren’t ready to commit, the same goes for a mortgage. Entering into a commitment that is un-affordable or not sustainable can spell trouble for both partners. A borrower who can’t pay their mortgage is stressed out; a mortgage lender who isn’t receiving payments is calling you non-stop acting like a clingy ex. It’s important to thoroughly analyze whether you’re ready for the commitment you’re about to make.
 
The good thing is there isn’t as much variety among mortgage options as there is with potential life partners. You can read more online about a mortgage than you can about the person you are thinking of dating, though wouldn’t it be nice if potential partners came with reviews? Is that an app yet?

Revisit the questions you asked in the beginning

Don’t let comfort stop you from meeting any goals you have set for yourself before you enter into a relationship as it’s never too late to keep trying and the same goes for your financing targets. Make sure you’re scheduling regular mortgage check-ups to ensure the terms still align with your lifestyle. The mortgage you had at 25 may not be ideal at age 40, so don’t be afraid to challenge old ideas and explore new options. You may want to consider a more mature home equity line of credit, rather than the trusty default 5-year fixed term. Get into the habit of asking yourself ‘what are you hoping to accomplish in the next year, 5 years, or 10 years, and make sure your financing fits those objectives. 

The first option isn’t always the best choice

Dating a few different people before you decide on the best choice is normal practice; the same should apply to shopping for a mortgage. Exploring the products available while you assess the pros and cons is in your best interest as it ensures you’re getting a solution best suited to your present and future needs. Don’t be afraid to ask questions to gain a thorough understanding of what you’re getting into and feel confident you’re making an educated decision before you enter into any agreement.

Lying can lead to a break-up

Mortgage fraud has been in the headlines more than a few times lately. With that in mind, falsifying information in a new relationship can lead to negative discoveries and a corresponding break-up if it’s a big secret. The same goes with mortgage lenders, if they find out they were lied to, they’re not happy. It’s extra bad because they’ve been burned before and now protect themselves with a clause in their contract stating they can pull back any financing offers immediately if deception is discovered. Don’t take any chances, be honest and upfront and avoid a potentially nasty split.
 
There’s no magic formula for forging the perfect relationship, the same can be said for finding a mortgage. There are a few key ingredients that go into making it work, like a steady income, good credit and a healthy downpayment or equity position. With all of the little extras that make or break the success of the relationship between a borrower and lender, it comes down to the desire to make it work through persistence, education, and patience.
 
Do you need a mortgage? Contact Jackie at 780.433.8412 or info@mortgagegirl.ca. Stay in the loop by following on Twitter @mortgagegirlca.

 

Source:  Jackie Woodward Mortgage Broker

Winnipeg Realtor Real Estate News — Winnipeg Real Estate Market December 2015 Sales Up 4%

2015 SALES SOLID WITH PRICES HOLDING FIRM
–           –           –
December Sales Up 4%

WINNIPEG –   2015 finished on a strong note.  Following on the heels of a record sales month for November, December sales of 642 were up 4% from last December. They are the third highest for this month, and are only behind the best sales years ever by a very modest amount.
 
“It is really quite remarkable how close our year-end sales have been in the last few years including our highest sales year in 2007,” said WinnipegREALTORS® outgoing president David MacKenzie. “They all tend to hover just above or close to the 13,000 level and in percentage terms we are only talking a little over 1% when we compare the 12,927 sales recorded this year to the 13,079 in 2007.”
 
While sales and even prices have shown consistent and similar results, listings have not chartered the same path. The number of listings entered on the MLS® were 24,603 in 2015, up 7% over 2014, and 41% over the 10-year average of 17,433. With an increase in listings but sales remaining consistent, the market’s inventory has also been rising month to month. This is borne out in having over 5 months of inventory available going into 2016.
 
“Buyers are in a great position to take advantage of a current market which is providing a large number and array of properties for sale and ones which remain some of the most affordably-priced in the country,” said Mackenzie. “Sellers need to take heart knowing WinnipegREALTORS® is still enjoying one of the best sales years it has ever had. They need to be aware however that more competition for those sales creates more downward pressure on prices since supply is outstripping demand.”
 
An indicator of stiffer competition for selling your home is evident when you see the number of single family home sales selling below list price.  Properties below list accounted for  65% in 2014 but now represent 75% of the market in 2015. In December alone 87% of all single family home sales sold below list price. Of the single family or residential-detached listings which sold in 2015, on average they achieved 98% of the total list price.
 
When 2015 was all said and done a new MLS® dollar volume record was established at $3.5 billion. This resulted in a 2% increase over 2014. Despite sales being higher this December from December 2014, dollar volume actually fell 2.89% when compared to December 2014.
 
It was a tale of different stories when it came to the two primary MLS® property types. Residential-detached performed exceedingly well with sales and dollar volume up 3 and 5% respectively in comparison to 2014. On the other hand, condominiums never recovered from an unexpectedly poor first quarter where sales were off by 20%. By year end this deficit was cut in half but nonetheless represented a 10% decrease compared to 2014.
 
The average sales price for residential-detached was $293, 992, a 2% increase over 2014. The average condominium sales price showed a 1% decrease from $239,171 in 2014 to $236,204 this year.
 
Residential-detached represented nearly 3 out of every 4 properties which sold on MLS® in 2015. Condominium market share was 12.5%. 25% of residential-detached sales in 2015 happened outside Winnipeg in the capital region. The southwest quadrant of Winnipeg was second with 19% of total sales.
 
The most active price range for residential-detached sales in 2015 was $250,000-$299,999 (22% of total sales), followed by the $200,000-$249,999 (17%) and the $300,000-$349,999 (14%).  Average days on the market for residential-detached sales was 33 days, 3 days slower than 2014. The highest-priced residential-detached sale was $2.7 million. The least expensive sale was $8,000.
 
The most active price range for condominiums in 2015 was $150,000-$199,999 (30% of total sales), followed by the $200,000-$249,999 (20%) and the $250,000-$299,999 (18%). Average days on market for condominium sales was 49 days, 9 days off the pace set in 2014. The highest-priced condominium sale was $950,000. The least expensive sale was $57,000.
 
Looking ahead to 2016, Manitoba’s GDP is expected to increase to 2.3% which is an improvement over the expected increase of 2.0% in 2015. In keeping with one of the country’s best GDP’s, Manitoba’s employment is forecast to grow by 1.6% in 2015 and 1% in 2016. This will keep its unemployment rate below 6%. Manitoba had Canada’s second highest population increase of 1% in 2015.
 
“While we do have an abundance of listings to work our way through at the beginning of the year, the good news is Winnipeg’s and Manitoba’s economy is performing relatively well,” said MacKenzie. “A most recent survey by CIBC shows Manitobans are most confident about their state of finances so this is another positive indicator that they will continue to take advantage of an excellent selection of properties for sale at some of the most affordable prices in the country.”
 
Established in 1903, WinnipegREALTORS® is a professional association representing over 1,850 real estate brokers, salespeople, appraisers, and financial members active in the Greater Winnipeg Area real estate market.  Its REALTOR® members adhere to a strict code of ethics and share a state-of-the-art Multiple Listing Service® (MLS®) designed exclusively for REALTORS®. WinnipegREALTORS® serves its members by promoting the benefits of an organized real estate profession.  REALTOR®, MLS® and Multiple Listing Service® are trademarks owned and controlled by The Canadian Real Estate Association and are used under licence.
 

Insuring your mortgage: Analyze the costs, benefits

(NC) When you go to your lender for a mortgage, they may ask whether you want to insure your home loan with an array of optional financial products to make your home ownership more secure. But this comes at a price.

 

These products include mortgage life insurance, mortgage disability insurance and title insurance.

 

Your lender must provide easy-to-understand information about these products; it’s up to you to read it and ask questions to ensure that you understand your options.

 

You do not have to buy any of these three types of insurance to get your mortgage. In fact, financial institutions may not pressure customers to buy life, disability or title insurance in relation to a mortgage.

 

Mortgage disability insurance

 

Why buy this insurance? It provides the certainty of knowing that your mortgage will be paid even if you are incapacitated. The insurer will make the mortgage payments – for a specific period of time – to your lender if you cannot work because of a severe injury or illness.

 

What you need to know: This would be an ongoing cost for the duration of your mortgage. Some insurers only cover specific illnesses or injuries, and they don’t usually cover pre-existing conditions. Before purchasing such insurance, ask your employer whether they offer similar coverage. Compare costs before agreeing to buy.

 

Mortgage life insurance

 

Why buy this insurance? It ensures that, in the event of your death, your mortgage will be paid off so your loved ones do not have to worry.

 

What you need to know: This would be an ongoing cost for the duration of your mortgage. You may already have this coverage through an existing life insurance policy. The benefits of your existing coverage could be used to pay off or pay down the mortgage in the event of your death.

 

Title insurance

 

Why buy this insurance? If you are worried about title fraud—criminals stealing your identity to get a new mortgage on your property, or fraudulently transferring your title to themselves and then selling or mortgaging your home.

 

What you need to know: This insurance consists of a one-time, upfront fee. Lender title insurance protects the lender from losses until the mortgage has been paid; homeowner title insurance protects the homeowner from losses related to title as long as he or she owns the home, even if there is no mortgage.

 

More information is available at itpaystoknow.gc.ca.

 

Source: www.newscanada.com

4 questions to ask before buying a rental property

Owning a rental property can be a profitable investment — but it’s not for everyone. Here are some questions to ask yourself before you take the plunge:
 
By Krystal Yee
 
rental
 
If you’re thinking of purchasing an investment property to rent out to tenants, you will need to do some serious research. There’s much more to being a landlord than putting up an ad on Craigslist — it’s like taking on a second job. You will need to factor in realistic financial projections, and carefully weigh the pros and cons of your decision. Here are a few things to consider before purchasing a rental property.
 
1. Do you have enough saved for the down payment? Under Canada’s new mortgage rules, you must come up with a down payment of at least 20 per cent for a small rental property holding from one to four units. This rule does not apply to borrowers whose principal residence also includes rental units.
 
2. How much income will the property generate? You will need to do some research into the neighbourhood. What does rent typically cost, and what is the vacancy rate in that area? Don’t assume that you will always have a tenant — according to the Canada Mortgage and Housing Corporation (CMHC), the average vacancy rate in Canada’s 35 major centres is 2.5 per cent. To be safe, assume a four or five per cent vacancy rate into your financial projections, and don’t forget to calculate potential costs, such as repairs and maintenance
 
3. Can you be a successful landlord? Being a landlord is a second job. It’s not just about finding a tenant and letting the money come in every month. Not only do you have to be available to field emergency calls and keep up with maintenance such as routine fixes, yard work and even shoveling snow, but if you rent to the wrong tenant, you might have even bigger problems to deal with, such as non-payment of rent. Hiring a property manager can help, but that will greatly reduce your monthly profit from the property — and you never want to be in a negative cash-flow situation.
 
4. How will deductions affect your profits? By deducting certain expenses from your income, you can reduce the taxes that you owe. Applicable expenses include mortgage interest, property tax, insurance, property management, maintenance and utility bills. You can also deduct any losses from your rental property. If your expenses exceed your rental income, you can subtract your losses from any other source of income you have coming in.
 
Purchasing a rental property can be a great way to diversify your investment portfolio, but it is a big commitment. Being a landlord is time-consuming, and not for people who are interested in an easy, passive income stream.
 
Want to learn more? Check out the Canada Revenue Agency’s Rental Income Guide, where you can get more information on deductible expenses, and most other issues regarding rental property.
 
Krystal Yee is a marketing professional living in Vancouver. She writes about personal finance at Give Me Back My Five Bucks, and the Toronto Star’s Moneyville.ca.

Source:canadianliving.com
 
Source:

LISA GRYBA INFORMATION

LISA GRYBA MORTGAGE BROKER

Mortgage Rates for Dec 15, 2015 — By Peter Paley

                                             

Peter Paley - Your Home and Mortgage Peter Paley

 

Come visit Realtor Rosalie Drysdale Website each week for my weekly Mortgage Rates.

 
Whether you are looking to purchase, refinance, or renew, we can help you decide whether a fixed or variable-rate mortgage will work best for your situation. Call today!
 
At Invis, we are always aware of the current environment and resulting implications, so at any time we can recommend a mortgage that gives you an edge and meets your current needs and future goals.
 
We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact us for these unpublished rate specials.

Terms

Posted Rates

Our Rates

6 MONTHS

3.14%

3.10%

1 YEAR

2.89%

2.29%

2 YEARS

2.84%

2.24%

3 YEARS

3.39%

2.34%

4 YEARS

3.89%

2.54%

5 YEARS

4.64%

2.74%

7 YEARS

5.30%

3.44%

10 YEARS

6.10%

3.89%

Rates are subject to change without notice. OAC E&OE

Prime Rate

2.70%

5 yr variable

2.30%

Looking at Purchasing that New Home, Needing a Mortgage,

Whatever your need is today – first or next home, renewal, refinance, renovation financing, equity take out, business–for-self mortgage, investing in property or a second/vacation home, contact us for a review of your situation, and the advice you need to achieve your homeownership dreams. After all, the right mortgage can build your wealth and save you thousands of dollars

Every single day we’re making homeowner dreams come true. And we’re here to help you.

Contact Peter Paley at Invis Mortgage

 

Peter Paley Mortgage Associate Send an EmailVisit Website

 

Bank of Canada sees elevated housing-crash risks as debt climbs

The risk of a sharp correction in home prices is “elevated,” Bank of Canada policy makers said Tuesday from Ottawa in their semi-annual Financial System Review, leaving the rating unchanged from the June report. The central bank uses five grades of risk ranging from low to very high, with elevated being in the middle.
 
High debt levels among younger families with fewer assets are increasing the danger of housing imbalances, the report said. The report reiterated Governor Stephen Poloz’s view the risk of a crash is low and should be avoidable short of a severe recession and major job losses.
 
“Housing activity should stabilize in line with economic growth, as the driver of growth in the economy switches from household spending to non-resource exports,” Poloz said in a press release, which will be followed by a press conference at 11:45 a.m.
 
“Certain vulnerabilities are still edging higher, but recent changes by Canadian authorities to the rules for mortgage financing will help to mitigate these risks as we move into 2016,” Poloz said. The rule changes refer to Finance Minister Bill Morneau’s move on Friday to raise mortgage down payment requirements on homes worth between C$500,000 and C$1 million.
 
The central bank removed a previous estimate of 10 percent to 30 percent overvaluation in housing prices.
 
The other elevated risk remains disruptions from a slump in China and other emerging markets. Policy makers also said there is a moderate risk of a jump in the yields demanded by global bond investors.
 
There are signs that Canada’s total household debt burden may also be dangerous. The share of indebted households with obligations exceeding 350 percent of gross income has climbed to 8 percent from 4 percent before the global crisis, the Bank said. Debt at that level raises the risk of a failure to pay the lender back.
 
Apart from risks, the Financial System Review lays out “vulnerabilities” and said there’s a high and rising level of household indebtedness.
 
Poloz last week outlined rules that could allow him offer more stimulus if the economy faces another shock, saying he doesn’t expect to need them. Those tools include the ability to take his policy interest rate to negative 0.5 percent, major asset purchases known as quantitative easing, or so-called forward guidance on future interest rates. Poloz said his main aim in making that announcement was to update policies that were first laid out during the global financial crisis and never used.
 
Such changes in the bond market since the global financial crisis add one other vulnerability for Canada the bank said today: the risk of a freezing up of fixed-income markets with more debt being perceived as harder to trade.
 
The risks in housing and the global economy underscore the tension behind Governor Stephen Poloz’s two interest-rate cuts to 0.5 percent this year, aimed at reviving the world’s 11th largest economy from a drop in oil prices.
 
Most of the housing-market risk appears to be concentrated in Toronto and Vancouver, where single-family detached dwelling prices have surged beyond C$1 million. Home prices have fallen this year in the Alberta cities of Calgary and Edmonton being hit by the drop in crude oil prices, and gains have been more modest in most other parts of Canada.
 
Canadian household debt ascended to another record in the third quarter, underscoring why policy makers are stepping up efforts to limit the risks of a collapse in the nation’s real estate market. Credit-market debt including mortgages was 163.7 percent of after-tax income, up by 1 percentage point from the second quarter, Statistics Canada said Monday in Ottawa.
 
The divide between a hot housing market and weakness elsewhere may continue, with crude oil falling to $35 a barrel this week and Canada’s last trade deficit of C$2.76 billion in October wider than any economist had forecast. Encana Corp. on Monday cut its dividend by 79 percent and reduced spending and production plans for 2016.
 
Bloomberg News
Greg Quinn
 
Source:  MortgageBrokerNews.ca

Finance minister announces down payment rule changes

by Justin da Rosa 11 Dec 2015
 

 

New down payment rules will go into effective February 15, 2016.

 
“The Government’s role in housing is to set and maintain a framework that is equitable, stable and sustainable. The actions taken today prudently address emerging vulnerabilities in certain housing markets, while not overburdening other regions,” Finance Minister Bill Morneau said in a release. “They also rebalance government support for the housing sector to promote long-term stability and balanced economic growth.”
 
The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000, the finance ministry wrote.
 
Minimum down payment for properties up to $500,000 will remain at 5%.
 
The changes are meant to reduce taxpayer exposure while supporting long-term stability of the housing market, according to the ministry.
 
“This measure will increase homeowner equity, which plays a key role in maintaining a stable and secure housing market and economy over the long term,” Morneau said. “It also protects all homeowners, including many middle class Canadians whose greatest investment is in their homes.”
 
Source: RepMag.ca

Breaking a mortgage can cost more than you expect

(NC) Thinking of breaking your current mortgage before the end of its term to take advantage of lower interest rates elsewhere?

Many Canadians believe their current lender can only charge three months’ interest—usually just a few thousand dollars—to break an existing mortgage.

 

That’s not necessarily the case, and far too many homeowners who have broken their mortgage contracts have been shocked by penalties amounting to tens of thousands of dollars.

 

“All homeowners want the best mortgage interest rate available, so switching lenders to improve your rate can be very attractive,” says Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada. “But proceed with caution before you switch lenders.”

 

“It’s important to recognize that a mortgage is a binding contract. If you want out of one mortgage to switch to another, the penalties and fees for doing so could drastically reduce (in some instances) the financial benefit of the new rate. You can avoid nasty surprises by reading your mortgage contract and talking to your current mortgage lender before deciding to switch.”

 

Mortgage penalties

 

Your contract may provide for a prepayment penalty of just three months’ interest or it may specify a very different calculation. Many mortgage contracts give the lender the option of charging you an amount very close to what you would have paid in total interest if you had kept your mortgage to the end of the term. This amount can potentially be significantly greater than three months’ interest.

Remember, there may also be other costs associated with switching a mortgage, such as legal, appraisal, administrative and other fees.

 

Understand your mortgage

 

Every mortgage contract contains different terms and conditions. Federally regulated financial institutions are required to provide key information in a box at the beginning of your mortgage agreement, including information about prepayment privileges and charges.

 

Banks must also include in mortgage documents a toll-free number you can call to speak to a knowledgeable person for detailed information on prepayment penalties.

 

As a consumer, you have the responsibility to read your mortgage agreement. If you want to switch to another lender and you do not understand the cost of paying off your mortgage early, visit your banker, ask questions, get answers and make an informed decision.

 

More information is available at itpaystoknow.gc.ca.

 

Source: newscanada.com