Thursday, December 23, 2010

Merry Christmas!

Just wanted to take a moment to say Merry Christmas and Happy New Year to you all! 2010 has been a very “interesting” year in real estate; filled with many ups and downs. That being said, I really do think the storm is over and calm waters are on the horizon!

I also wanted to take a moment to remind you all of the bank hours over the holidays. If any of you are considering purchasing a home over the holidays please keep in mind that the lenders are closed for two and a half days next week, only leaving 2 and a half days for business. I ask that you please consider these dates when writing your finance condition into your offer to purchase.


Link: interest rates

May Peace be with you all!

Thursday, December 16, 2010

Resale housing activity rose in November.

I haven't been posting much lately as I have been very busy with loads of corprate Christmas events (no complaining here:) but I've just found a good news story and figured it was time to get posting!

Edmonton resale house sales were up 6.9% over October. I certainly agree with these findings as November was a very busy month for me! Hopefully this trend continues and the spring brings a healthy and robust housing market here in Edmonton!

On another note, financial blogger, Frugal Trader, has blogged some pertinent points about purchasing a rental property that he wrote in 2007. While the post is a little old, the information is still very relevant. If you are considering purchasing a revenue property it would be a good idea to go through this list of rules from someone who has been doing this sort of thing for a while, and according to him very successfully.

Here is a breakdown of his rules:
1. The property must have a positive cash flow from the date you purchase it.
2. Purchase a home in a nice neighbourhood, one with typically low vacancy rates.
3. Buy properties that are in good shape and move-in condition.
4. Try to find a deal, a home under market value.

He doesn’t seem to give an opinion on what type of property is best, apartment style condo, duplex, townhouse to detached single family home. With a townhouse or apartment you won’t have to worry about an exterior maintenance which is great but you will have to pay a condo fee so be sure to include that cost when you calculate your monthly cash flow on the property.

Tuesday, December 7, 2010

Bank of Canada remains firm at 1%...

In an announcement earlier today, the Bank of Canada left the key interest rate unchanged citing that the economy still has a lot of recovering to do. This is good news for variable rate and home equity line of credit mortgage holders as their interest rate will not change. The bank also predicted that they may keep the key interest rate low for some time if economic conditions remain the same.
The next interest rate announcement is scheduled for Tuesday, January 18th 2011.

Wednesday, December 1, 2010

December CAAMP Stats

Here is the latest issue of CAAMP Stats, (CAAMP= Canadian Association of Accredited Mortgage Professionals) providing detailed information on all sorts of things like the Bank of Canada interest rate, Bank of Canada prime lending rate, Government of Canada bond rates, new housing starts, and the average MLS house prices. It’s a great quick reference resource!

Monday, November 29, 2010

Give your home a winter tune-up!

Is your home ready for winter? Check this guide from CMHC to find out what you need to do to keep your home running smoothly throughout the winter months...

Thursday, November 18, 2010

The good and the bad...

The bad news is that rates are on the way up. The good news is that one of my favourite lenders Is offering to pay your legal fees if you refinance with them!

Conditions apply, of course, feel free to contact me anytime for the nitty gritty details!

Offer details:
• Limited time offer.
• Insured or insurable deals only.
• Rates are subject to change without notice and this offer may be withdrawn at any time.
*Terms and Conditions:
-Subject to title to the property not requiring change or correction.
-Registration of one mortgage, excluding variable registration costs in Alberta, Newfoundland and Prince Edward Island.
-Legal costs to discharge one existing secured institutional mortgage. Excluding the Lender’s discharge fees or penalties.
-Preparation, review and signing of all necessary documentation with the customer. Signings in Quebec must be conducted at a notary’s office and in BC may be required at a lawyer’s office; signing fee is included.

Wednesday, November 17, 2010

Urgent Rate Change Information

Rates are increasing; I have had several lenders increase rates already. I can still hold a rate of 3.54% (five year term) for 120 days but this could change very quickly. If you are in the market to buy a new home or have been thinking of refinancing please contact me as soon as possible to complete a pre-approval!

Monday, November 15, 2010

Housing for newcomers to Canada

If you are new to Canada and are looking for housing, here is some very valuable information courtesy of CMHC! They have a multitude of information on finding a place to rent or buy. The information is available in many different languages as well.

Renting an apartment

Buying a home

Looking after your home

Tuesday, November 9, 2010

When is the right time to buy? All the time.

Here is some good advice I received from our partners at Axiom...

Here at Axiom, customers are constantly coming up to us and asking our opinion as to when is the right time to buy. In our opinion, if you're buying for the right reasons, it should always be the right time.

Over the last few years, as real estate markets across the country were heating up, Canadians gradually stopped seeing their homes as places to live, and instead viewed them as quick money-making investment vehicles. The thing is, whether you're investing in the stock market or real estate, the short-term approach is never a sure-thing.

The best investment strategies have a long horizon. Whether you're buying a stock in a reputable company like Boeing, or a home in good area, it will always go up in the long run. When you look far off into the future, it doesn't matter what the asking price was - or whether the mortgage you acquired was 0.2% higher than it was if you'd purchased six months earlier - you'll always come out ahead.

-Axiom Mortgage Partners

Monday, November 1, 2010

A new way to bank...

The Royal Bank has unveiled it's new design for its branches. The new look is supposed to feel more like a visit to the Apple store than financial institution. The tellers will be pushed to the back of the branch and new, nifty technology features will be featured out front. This latest move is an attempt to entice new, non-clients, to come in and try RBC.

Thursday, October 28, 2010

Mortgage broker channel to remain strong: Deloitte

According to a report by Deloitte, the mortgage broker channel is to remain strong in Canada. The report states that in 2009, mortgage brokers initiated 38% of the total volume of mortgages in Canada. We are evolving from a "lender of last resort" in years past to a viable option for borrowers with good credit and income that want a competitive interest rate and good service from their mortgage professional.
A few notable trends the Deloitte report predicted:
-Mortgage brokers will evolve from “rate shoppers” to “advisors.”
-Major banks will continue to compete against broker business.
-Superbroker networks will continue to consolidate. In 2005, almost 70 per cent of Canadian mortgage agents were employed by one of five broker houses. Since mid-tier networks have emerged, the figure tops out at 85 per cent.
-Niche lenders with specialized product offering will emerge through the broker channel, increasing options for new immigrants, the self-employed and individuals with credit challenges.

Wednesday, October 20, 2010

Say it like it is!

Here’s a very cool video from a BC broker. He is so right! I couldn’t say it better myself!

The rate game

I’ve said it before and I’ll say it again. Rate isn’t everything!
I’d like to take a moment to discuss BMO’s “rate special”. It’s a five year fixed mortgage at 3.49%. The rate sounds great, right? Almost unbelievable! My friends, there are a few catches to this one according to Canadian Mortgage Trends. I’ll discuss them below.
1. You are not able to break this mortgage to move to a new lending institution. This is HUGE! If you are not free to break this mortgage and move on to someone else in 2, 3 4 years (or whenever you just plain feel like it) where does that leave you? Do you think you’ll have any negotiating power? I think not.
2. Pre-payments are limited to 10%. Folks, this is the lowest in the industry. I don’t think I have a single lender that has pre-payment privileges that are this bad. Most lending institutions have pre-payment privileges of 15%-25%.
3. Your amortization is capped at 25 years. While this is fine and dandy for some, it’s not for everyone. A lot of first time buyers want a 35 year amortization to keep their payments low for the first few years. The nice thing about a 35 year amortization is that you can pay extra every month (with your lender’s nifty pre-payment options) and can actually make your mortgage payment as if you had a 25 year amortization. The best part? If you have a rough couple months (job loss, have a baby etc) you can always revert back to the 35 year payment. Options are nice to have!
4. 3.49% is not really that great! Let’s compare a mortgage of $200,000 using BMO’s rate of 3.49% and my lender’s five year normal, great rate (no silly pre-payment caps, amortization caps or choiceless contracts) at 3.59%. With BMO your payment would be $997.49, with my lender $1,008.06. That’s a whopping difference of $10.57 a month! Granted, over 5 years that’s $634.20 but you have options, choice and an overall better mortgage in my humble opinion.
What annoys me the most is that the Bank of Montreal just doesn’t provide any of the nitty gritty details on their website!
I am constantly dealing with individuals that only shop by rate. This is a perfect example of why that is a bad idea and why there are several other factors to consider!

Tuesday, October 19, 2010

No news is good news...

In an announcement earlier today, the Bank of Canada left their overnight target rate unchanged. What does this mean? The prime lending rate will stay as is, at 3.00%. For anyone with a variable rate mortgage this is welcome news as the last three rate announcements have all included rate increases. If you were to take out a variable rate mortgage today on a five year term you'd receive a discount of .70% off the prime rate. This works out to a rate of 2.30%. Not too shabby if you ask me!
If you have any questions about variable rate mortgage options please don't hesitate to contact me!

For more information on today's rate announcement, please visit the Bank of Canada's website.

Monday, October 18, 2010

TD's Collateral Charge

Here is an article I received this morning from Axiom Mortgage Partners regarding a change TD has recently made to the way they register mortgages. This article discusses the pros and cons of the new registration policy:

This week TD is changing the way they register their mortgage charge. As of October 18, 2010 mortgages will now be registered as a collateral charge. TD believes that this will be a positive change for their consumers. I am not certain that I agree. Lets take a quick look at the facts and the pros and cons.

Mortgage will be registered as a collateral charge.
Mortgage can be registered in an amount equal to 125% of the value of the property.
According to TD's information releases:
The flexibility to register the collateral charge for a higher amount than the current loan agreement so that if a customer wants to increase their mortgage in the future they can reuse the existing collateral charge and not incur any new registration fees
The flexibility to switch to another lending product by using the existing collateral charge without incurring registration fees.

Well, come maturity a borrower will no longer have the option to "switch" their mortgage to another lender. The charge will have to be discharged in full and a new mortgage placed. This means it makes it much more difficult and costly to move a mortgage at renewal.
Depending on the wording of the collateral agreement, all of a customer's credit facilities at TD may be covered by the charge. This could mean that if a borrower wanted to discharge the mortgage they may also have to pay out other TD credit items such as Visas etc.
Talk to your TD rep to get their take on what this means to you and your clients.
-Axiom Mortgage Partners

Wednesday, October 13, 2010

MCAP re-launches it's Home Account!

A couple years ago MCAP pulled the plug on its popular line of credit mortgage during the global financial crisis. I think it’s a positive sign of the times that they have re-launched this product and I’m sure it will be a product very popular with mortgage brokers.
Here are some of the details:
-The rate on this mortgage will be prime +1.00%
-The product will be fully open
-5, 10 or 25 year interest only periods available
-Minimum beacon score 650
If you have been considering tapping into some of the equity in your home please contact me and I’ll give you an overview of the refinance options available today!

Tuesday, October 12, 2010

Changes to TD Mortgages on October 18th

The Globe and Mail has published an article regarding some changes TD has made to new mortgages registered after October 18th 2010. I received a bulletin last week about the change TD Bank is making to the way they register a mortgage on the title to a property. Mortgages will now be registered as a collateral charge on title. The benefit to the consumer is that TD can now register a charge up to 125% of the home’s current value. This doesn’t mean you can access the 125%, it means that if property values go up and you want to get a line of credit or increased mortgage on your home it’s basically ready to go! The bank will do a few checks and balances before they approve it but the real savings for the consumer will be that they will not have to see a lawyer or re-apply for an increased mortgage.
The downside? This makes it much harder for you to switch banks when your term is up. Having less choice isn’t good for anyone! The article states, “unlike traditional mortgages, the collateral mortgages are difficult to transfer from one lender to another, because they must be paid in full to be cancelled. That means if someone wants to change lenders, they need to renegotiate from scratch”.
This recent move by TD has angered mortgage brokers across Canada according to the Globe and Mail article.

Read the full Globe and Mail article here:
TD overhauls mortgage program as housing market slows

Friday, October 8, 2010

Brokers and Bankers

Well, it’s Friday before the Thanksgiving weekend and what better time to have a little rant! I just came across this article which covers a topic that is near and dear to my heart: Bankers calling themselves Mortgage Brokers. To be fair, Bankers aren’t the only ones to blame. I’ve heard many Realtors and consumers talk about their “broker” when in fact they are speaking about a bank employee. Some bank employees specialize in mortgages only and work from home and on the road. Just because they don’t work in a bank branch doesn’t make them a mortgage broker! They are simply road reps for the bank.
I think it is very important to label things correctly. Mortgage Brokers and Bankers are two very different things. Bankers are employees of the institution they work for. They can only sell mortgage products from their particular institution and they are not licensed by a regulating body. Mortgage Brokers and Associates, on the other hand, actually act as a broker in a transaction. They work with more than one institution and are able to set up mortgages at a variety of institutions. Mortgage Brokers and Associates are regulated by provincial licensing bodies and the only individuals that are allowed to “broker” a mortgage are individuals that are licensed! In Alberta, the licensing body that regulates Realtors, Mortgage Brokers and Associates as well as property Appraisers is RECA.
Please read the article below for more information! (This article is written with a BC perspective but a lot of the information pertains to Alberta as well).

Wednesday, September 29, 2010

A great reminder to all of us that what matters most in life is the people in it, not the “stuff” we accumulate over the years. This article may make you pause and think about all the “stuff” you work so hard to attain. Can you take it with you? Does it really contribute to your happiness as much as you think it does? Houses (and all the stuff in it), cars, clothes etc are nice but what will you be thinking of on your death bed? Probably not stuff!

People, not possessions, matter most
Saturday, Sep 04, 2010 06:00 am Dee-Ann Schwanke
St. Albert Gazette
It’s called “oniomania” and it’s a disorder that afflicts far more people than you might imagine. No it doesn’t refer to fanatics of Onoway, but rather the craving to acquire possessions. Together with the unhealthy habit of hoarding, these two disorders torment people into believing that they need stuff — lots of it.
My father-in-law was well known for repairing almost anything — telephones, radios, plumbing, hairdryers, vacuum cleaners, you name it. In fact he refused to throw something away if there was even the remote possibility of fixing it or finding a useful part from it in the future. His basement and garage became overrun with items needing repair and junk that just accumulated over the years. For decades, his wife and children pleaded with him to go through it, but to no avail. He held on to it until his death. His children cleaned out most of his stuff with the bulk of it ending up in the dump. Now, two years later, they still have a storage unit full of items. They know some of it would be of value to just the right person but everyone feels guilty because no one has the time needed to go through it all and find a home for each item.
Our culture is addicted to possessions. Thrift stores and dumps are overflowing. Traffic on sites like Craigslist and Kijiji helps move items from one household to another. We work hard to collect stuff and we use it to help define our self-worth. But using possessions to measure our worth is like performing heart surgery on the image we see in the mirror. It’s not real. Nonetheless, every day people make up new excuses to keep items they no longer use or buy things they don’t need.
Our addiction to possessions seems to stem from a search for happiness, but ironically every item we own begins to own us, sucking the joy out of our lives as we have to maintain it or keep moving it around. Then when we are utterly spent by it, we leave it behind to our children who must then fight over who owns it or who will dispose of it.
My parents nabbed my upright grand piano from a local church for $100 when I was nine. I’ve played it for thousands of hours. Although that piece of furniture has enormous value to me, my children will not see it the same way. They are less enamoured of the object and more with the person it represents and the memories of me playing it. If I were to leave it behind for them, they would inherit the burden of deciding what to do with it and the natural concern that disposal would be disrespectful to me. Why would I want to give them that as a parting gift?
People mistakenly assume their children will warmly welcome items of sentiment. There are items we keep because they remind us of those we love. But in many cases we hang on to things because we feel guilty about getting rid of them. Or we think that cleaning out our keepsakes somehow disconnects us from our past. People, not things, are what matter.
Studies indicate that once individuals acquire the basic necessities of life, their accumulation of wealth and property brings little satisfaction and minimal joy. In fact, excessive wealth is a Petri dish for entitlement. And much to the dismay of rich people, entitlement is not a value. It is a disease.
Even if the one who dies with the most toys wins, he’s still dead and as we can all remember from kindergarten, it’s never fun cleaning up someone else’s toys.
Dee-Ann Schwanke and her husband think taking junk to the dump is a fun date.

Tuesday, September 28, 2010

No downpayment? Here are 4 ways around it!

So, you have a great earn decent`re pretty stable...and, you want to quit paying rent and buy a place of your own. Between the car payment, rent and those nasty student loan payments you just can`t seem to scrape together the minimum 5% down payment. Don’t despair! Here are a few different options available to individuals that do not have a down payment.

1. Borrow your down payment. If you have room in your ratios (income vs. debts) you may be able to just borrow your downpayment from a credit card or a personal line of credit. One thing to keep in mind with this option is that along with your new mortgage payment you`ll also have another added monthly payment to pay off that loan.

2. 5% Cash Back mortgage. In this option, the bank will give you the 5% down payment. Great, right? The catch is that you`ll pay a significantly higher interest rate which means your monthly mortgage payment will be higher than if you had provided your own down payment. You`ll also have to qualify for your mortgage at the higher rate. If your ratios are tight you may not qualify. One more thing to keep in mind, your mortgage may also be subject to additional payout penalties should you pay the mortgage out before its expiry date.

3. RRSP Home Buyers Program. If you have an RRSP (some people even have employer contributed RRSP`s) you can use them for a downpayment! You must be considered a first time buyer and your RRSP`s must have been in an account for over 90 days. If you meet the requirements for the program, you`re able to withdraw up to $25,000 tax free! This is a fantastic program for first time buyers. Another great strategy is to take out an RRSP loan to purchase a set amount of RRSP`s. It will force you to save as you make your loan payment every month. Not only will you get a nice tax refund (which you can plunk down on your RRSP loan) but you`ll end up with a nice chunk of RRSP`s which you can withdraw to buy a place of your own. For more information on the program, please go to:

4. Ask for a gift! Do you have any parents or immediate family members that want to help you out with your down payment? Perhaps you are uncomfortable about bringing this up with your parents or grandparents. Money can be a tricky subject in families but you know, it never hurts to ask. Maybe you assumed your parents or grandparents weren`t willing to help. Whether they are or aren`t this might be a good opportunity to open up some dialogue on the subject.

*subject to change without notice. OAC.

For more information, please contact me!

Wednesday, September 22, 2010

Living on the edge...

Many Canadians are living on the verge of economic disaster. The recent global economic slowdown coupled with an era of credit abundance and a general lack of credit education has created an overwhelming financial situation for some Canadians.
This was a story I heard the other morning in CBC's radio show The Current. It is an eye opening glimpse into the financial lives of some ordinary Canadians.
To listen to the episode please click on the link below:

Monday, September 13, 2010

A great home reno resource

There are a lot of things about home renovations that can be intimidating such as finding a reputable contractor, setting a realistic budget, even just finding a physical example of the idea that's that are in your head. can help with at least a few of those things. The Canadian, Rogers-owned site is designed for homeowners and contractors alike, to help them find information and resources for their next home project.

In addition to a useful blog, the site also has a vast array of helpful articles and "how-to" videos as well as a "tips from the pros" section, an inspiration section and an opportunity to share your renovation photos.

It's worth a look!

-article courtesay of Axiom Mortgage Partners

How TIME's have changed...

Here is a link to an interesting article showing two very different TIME magazine covers in regards to the US housing market.

Wednesday, September 8, 2010

They've done it again!

They've done it again! The Bank of Canada announced yet another rate hike earlier this morning, raising their key lending rate to 1.00%. Most experts agree that this will likely be the last rate hike for some time as the economy is not yet running at full steam. This latest change to the key lending rate will affect borrowers holding variable rate mortgages as well as home equity lines of credit.
To read CBC's article on the rate increase click HERE.

Wednesday, September 1, 2010

Third Quarter 2010 CMHC Housing Market Outlook

CMHC has released its Housing Outlook for the thrid quarter of 2010.
The report includes a national outlook as well as individual provincial reports. They have also provided information on the market trends as well as a special renovation report.
To read the report, please click here

Monday, August 30, 2010

Wondering where to start your reno?

If you're looking to increase the value of your home through a renovation project, it can often be overwhelming finding a place to start.

Since very few homeowners have unlimited funds to play with, it's important to start with the projects will give you the most bang for your buck. Below are the top three areas you should focus on, according to the Appraisal Institute of Canada:

1. Painting and interior decor
Most prospective buyers can't help but fall in love with a well-staged home. Investing the time to add a coat of paint to the walls and either buy or rent some fashionable furniture will go a long way in getting a 'sold' sign on your front yard.

2. A chef's kitchen
While a kitchen renovation can often be the most pricey, you're virtually guaranteed a return on your investment. New buyers love new appliances, fancy countertops and plenty of storage space.

3. A bathroom fit for a king
They don't call it the 'throne room' for nothin'. A bright, clean bathroom with nice fixtures and tiling will make prospective buyers feel at home.

*reprinted courtesy of Axiom Mortgage Partners

Tuesday, August 24, 2010

When to walk away...

Did you know that acting as a straw buyer in a mortgage transaction is illegal? ‘Straw buyers’ who allow their name and credit rating to be used to obtain mortgage financing for a profit can be fined or even jailed for their actions.

Definition of straw buyer

According to the attached article in the Calgary Sun, this situation has been common in the last few years due to the recent economic boom. Individuals that act as a ‘straw buyer’ in a mortgage transaction are legally responsible for the mortgage they have obtained.
The Calgary Real Estate Board offers the following tips to help protect yourself from mortgage fraud:

-Employ a licensed mortgage broker registered under the Real Estate Act of Alberta. Visit to ensure the person you are working with has a license in good standing.

-Before you make an offer on a property, have your realtor provide you with the property history. Check how many times the property has been sold, the price ranges and the comparable properties for sale in the area. Does the history seem logical to you?

-Get a market analysis on the property, provided by your realtor. If you are concerned about the value you can include, as part of your offer, a condition to have the property appraised by a designated or accredited member of the Appraisal Institute of Canada.

-Ask for a copy of the land title search (this will show the registered owner of the property as well as any mortgages registered on the title).

-Make sure your deposit is being held in a trust account.

-This is my own tip, and one that I happen to think is the most important: Trust your gut! If you have a bad feeling about the transaction that you just can’t shake, trust yourself! If something seems too good to be true, it likely is. There are plenty of other properties out there...don’t be scared to move on.

Tuesday, August 17, 2010

Banks announce rate decrease...

The major banks have all announced cuts to their fixed interest rates! I am still waiting for some of my lending institutions to send out updated rate sheets. Watch for new, discounted rates in the next couple of days...

Monday, August 9, 2010

The fixed/variable rate rages on...

A recent article in the Financial Post has stirred up the fixed vs. variable rate once again – hinting that the variable rate's reign may soon be coming to an end.

Thursday, August 5, 2010

Rates are wayyyy down...

I just received notice that the five year fixed rate is down significantly! You can now get a five year, fixed mortgage for 3.99%. This is incredible; we are close to historical lows. This might just be the perfect time to purchase or refinance!

Prime 2.75 %
Open Variable Rate Mortgage 3.55 %
Home Equity Line of Credit 3.75 %
6 Month Fixed 4.45 %
1 Year Fixed 2.54 %
2 Year Fixed 2.54 %
3 Year Fixed 3.54 %
4 Year Fixed 3.89 %
5 Year Fixed 3.99 %
5 Year Fixed No Frills Mortgag 3.89 %
5 Year Fixed-1.4% cash back 4.59 %
5 Year Variable Rate 2.15 %
5 Year Fixed - 5% cash back 5.69 %

* Note: OAC. Rates are subject to change without notice. Please contact us for more information.

Monday, July 26, 2010

A peak into Canada's Housing History

With more than 2/3 of Canadians now owning homes, it's difficult to imagine a time when mortgages were not yet invented - and flush toilets were a luxury. In The Canadian home: from cave to electronic cocoon, Marc Denhez does a great job of recounting mortgage and real estate history in this fair land. Below are a couple tidbits:
-In eleventh century England, you could buy a home in one of two ways. The first - and simplest - was to simply pay cash. If you wanted to finance a home, you could pledge collateral (for example, your sword and horse). The problem was, the pledge was only valid for the lifetime of the borrower. When the borrower died, the collateral would be returned to the individual's heirs and the lender would be left with nothing. Enter the dead pledge which would remain valid after an individual died.
-In the days immediately following WWII, when the government decided to offer subsidized housing through what is now known as the CMHC, only half the homes had flush toilets. When suburban housing communities came into vogue following World War II, the term "street" became passe. The winding, maze-like communities required more descriptive street names - hence the terms "crescent", "circle", "drive", "terrace" and "court" (among others) came into being.

-article provided by Axiom Mortgage Partners

Tuesday, July 20, 2010

No surprise here!

As expected, the Bank of Canada announced a rate hike earlier today by 0.25%. This rate hike was predicted by many industry experts and I don't think anyone is all that surprised.
The next Bank of Canada rate announcement is scheduled for September 8th 2010.
Here is a CBC article on the interest rate announcement:

Friday, July 16, 2010

A Guide for Mortgage Virgins

The Globe and Mail has posted a good short video featuring Douglas Melville, Canada's Ombudsman for Banking Services & Investments. The video describes 5 important points a mortgage virgin should consider before signing on the dotted line!

1. Term of Payments: How long do you want to be in the home and how frequently do you want to make payments? The vast majority of mortgage lenders will allow you to make weekly, bi-weekly or monthly mortgage payments, however, some exceptions apply. Make sure you ask your banker or broker what payments frequencies are available!

2. Type of Rate: Do you want a fixed or floating mortgage? How risk averse are you? Mortgages are not a one-size-fits-all kind of deal. Some borrowers may be very comfortable with having a mortgage payment that fluctuates while others can sleep better at night if they know they have a locked in rate.

3. Privileges & Penalties: Do you plan on making extra payments on your mortgage? Different mortgage lenders have different pre-payment privileges. It's important to know how much you can pre-pay without penalty every year and how the mortgage penalty is calculated should you wish to pay off your mortgage before your term is up.

4. What if you move? It's important to know if your mortgage is portable to a new property or not. Even if you aren't planning to move until your term is up it's important to have the facts. Life has a history of throwing curve balls and you never know what's in store for you down the road.

5. Insurance: you don't have to get life insurance when you get a mortgage. It is a good idea but is, ultimately, optional. You certainly don't have to take the life insurance offered by your lending institution. You are free to shop around to find the best life insurance option for you!

Click HERE to watch the full video!

Thursday, July 15, 2010

Mortgage Tip: Purchase Plus Improvements Mortgage

Did you know that CMHC recently reported that 20% of borrowers take on additional consumer debt after closing on a purchase? Many of these borrowers are using this additional debt to complete home improvements. Instead of purchasing a home and racking up unsecured debt to pay for home improvements, why not include the cost of the home improvements into your mortgage?
I have the ability to set up a purchase plus improvements mortgage. It’s easy to set up and will allow qualified purchasers to finance the costs of immediate renovations or improvements through their mortgage!
In order to utilize this program you must submit written quotes of the work to be completed. Once you take possession of your new home you will usually have 90 days to complete the work. Once the work is complete and you have paid the invoices you can submit the receipts to your lender who will then advise your lawyer to release the funds to you. An inspection may be required by an appraiser to confirm that the improvements have been made.
This program has worked really well for some of my clients. I have had clients that wanted to a finish a basement and used this program to fund their basement renovations, I have also set up purchase plus improvement mortgages for people who needed to install a new furnace, flooring, and kitchens etc!
If you’re thinking of buying a fixer upper, speak to me first!
CMHC's Purchase Plus Improvement Mortgage Guidelines:

Friday, July 9, 2010

Do you know what's on your credit report?

Many people don't and it's a bad time to find out there's something wrong when you're in the middle of an offer on your dream home. You could find out that your score is too low or that there is an inaccuracy on your report that can't be fixed in time for you to buy the property. An inaccuracy on a credit report could take weeks, maybe months to rectify.
I've seen it happen and it just plain sucks.
I often advise my clients to obtain their credit report once a year, just so they know what's on it and can fix any mistakes. Equifax allows you to request a free credit report. You'll need to fill out a form, provide some information and in a week or so you'll receive a report in the mail, free of charge.
Here's the link:
If you're a little impatient and don't want to wait you can pay to request your report online immediately. I’ve always found the free version to be sufficient.
If you do happen to find a mistake on your report, here’s the link with instructions on how to rectify the issue.

Wednesday, June 30, 2010

Professional Spotlight: Jane Hauck, Sun Life Financial

I’ve known Jane for about a year now. She works for Sun Life and provides a wide range of financial products and services including insurance (life, disability, critical illness etc) and investment products. She is very dedicated and knowledgeable and I try to refer my clients her way if they have investment or insurance needs.
With Jane’s permission, I’m reprinting a brochure she’s given me regarding life insurance for your mortgage. In the article she compares regular creditor life insurance (usually offered by your mortgage lender) versus individual, separate life insurance purchased through an institution such as Sun Life. There are some really good points here and valid food-for-thought.
If you have any questions for Jane, please contact her directly. She’d be very happy to answer your questions and complete a free review of your current insurance products!

Insuring your biggest investment- your home
Your home in probably the biggest investment you’ll ever make. When arranging your mortgage, your mortgage company may offer you mortgage insurance. Have you considered the advantages of personal life insurance to cover your mortgage? Consider the differences:
Mortgage Insurance:
-most companies offer decreasing term insurance. Even though the death benefit if decreasing, the cost remains level. The coverage expires without allowing you the opportunity to purchase other insurance or provide you with cash values.
-The proceeds are payable to the mortgage company. In the event of dearth, the mortgage is automatically repaid.
-In most cases, if you take your mortgage to another company, you lose your protection. To obtain mortgage insurance with the new company you must submit new satisfactory evidence of health and are subject to the current rate charged by the new company.
-The face amount can only be the exact amount of your mortgage (no more, no less).
-You may not be able to insure both you and your spouse if the mortgage is registered in only one spouse’s name.
Individual Life Insurance:
-You can choose term coverage and match the term length to your amortization period. A term policy may be converted, regardless of health, until age 65.
-Or you can choose permanent coverage immediately. At some point in the future, the cash value of a permanent policy may be sufficient to pay off the balance of the mortgage.
-You appoint a beneficiary who can use the proceeds in whatever manner he/she wishes (ie. To invest rather than pay off a low interest mortgage.
-Your policy is portable. If you transfer your mortgage to another company, your insurance remains in force. You don’t need to re-apply and prove your insurability. You’re protected from the danger of losing your insurance because of a change in your health.
-You may select an insurance amount sufficient to cover your mortgage and other outstanding debts and term length to match your amortization.
-You can insure both you and your spouse even if the mortgage is registered in one spouse’s name.
©Sun Life Assurance Company of Canada, 2007.

Jane Hauck, Advisor, Sun Life Canada
Phone: 780-443-1919
Fax: 780-481—0356
Cell: 780-991-4954

Tuesday, June 29, 2010

You can now find me on facebook!

Natalie Wellings, Mortgage Associate | Promote your Page too

The Benefits of Portability

Many mortgage holders forego certain mortgage features in favour of a lower interest rate. If this is your strategy, and if you’re planning on moving before your mortgage term is up, you may want to make sure portability isn’t one of the features you’re giving up.

A portable mortgage is one that allows you to transfer your existing mortgage with all its terms and conditions to a new property. So if interest rates are going up, you can keep your existing rate on your new home. If the new property costs more than the first, the extra value would be mortgaged at the current rate. Instead of paying two mortgages at two different rates, the lender would likely just blend, or average, the two rates.

Without mortgage portability, you would have to pay a fee to get out of your current mortgage and then sign a new one at the current (and likely higher) rate. So, while a lower rate may be appealing right now, it may be worth it to pay a few tenths of a percentage more for the added flexibility associated with portability.

-courtesy of Axiom Mortgage Partners

Wednesday, June 23, 2010

Think your place is too small?

Are you considering a move because you feel that you have outgrown your space?
Check out this video! You'll be absolutely amazed at one man's incredible ability to make the best use of a small space. I've never seen anything like it! It really does make me realize how much space Canadians have and that our idea of a home being “too small” really is just a matter of perspective.


Monday, June 21, 2010

If Canada's five chartered banks were the only institutions allowed to lend money in the form of mortgages in this country, rates would be sky-high, and the selection of mortgage products would be rather slim. Thankfully, we have non-bank lenders to keep the Big Banks on their toes.

While these lenders may not invest the same number of dollars in fancy advertising campaigns, they're nevertheless an excellent option for savvy consumers who are looking for a good mortgage deal.

Because non-bank lenders don't have to support the overhead costs of brick-and-mortar branches, and instead opt to go through the mortgage broker channel, they're able to offer better rates. In addition, because they're seeking to steal market share from the dominating big banks, they're much more likely to offer unique mortgage features - such as better prepayment options, flexible payment frequencies, and unique products such as cash-back mortgages - while at the same time offering a little more flexibility when it comes to clients with lower credit scores, or those that are self-employed or commission-based.

While non-bank lenders aren't considered "banks" in the traditional sense, they're still required to follow all the same regulations and underwriting guidelines as their bank counterparts. They also have access to the same default insurance options as the big banks - whether that's through CMHC, Genworth, or United Guaranty.

Not all non-bank lenders are "sub-prime" (in fact, there are very few of these lenders left in Canada), and while it's true that many of them are foreign-owned, there are many homegrown institutions here as well. Their models have seen success across the globe, and continue to thrive here in Canada.

If you're in the market for a new mortgage or a renewal, I invite you to head into your local bank branch to see what type of deal it can offer you. Then pop by my office and I'll scour the rest of the country's lenders - and likely save you a few percentage points off your mortgage.

Tuesday, June 1, 2010

Bank of Canada rate increase

The Bank of Canada increased its prime lending rate earlier today. This is the first time they have done so in over 2 years. The bank’s Governor, Mark Carney, announced earlier today that the prime lending rate would be increased by 0.25%. This announcement marks the first interest rate increase by any of the G8 countries. The prime lending rate affects those with variable rate mortgages and lines of credit.
The bank's next interest rate announcement is expected on July 20 where many experts predict a further rate increase of 0.25%. However, the Bank of Canada announced that this may not be the case. Much of the decision to raise interest rates is based on the health of the domestic economy as well as global factors such as the financial crisis in Europe.
Please feel free to contact me should you have any questions, concerns or require a pre-approval or mortgage assistance!

Please click HERE to read CBC's story on the interest rate hike.

Wednesday, May 26, 2010

Another one bites the dust...

HSBC has just pulled out of the broker channel, meaning they will no longer allow mortgage brokers to place mortgages with them.

Banks are out to create the most profitable relationship possible with their customers, period. Their best client is the one who walks into their branch and accepts the interest rate as offered. The bank will then try to further increase profits by cross selling other products and services.

If a bank deals with mortgage brokers they know that they will have to provide stellar interest rates and compete with the other lending institutions. It’s pretty simple, if their rates are not good, us broker just won’t send them any business. This means lower profits for the banks as they can’t sell you the higher rate they’d like to!

I hear it all the time from my customers...their banks have offered them a rate much higher than what I can offer.

To me, this latest move by HSBC makes’s all about profit. This has nothing to do with what's best for the consumer. Surprised anyone?

Read the Globe and Mail article HERE.
Read an interesting blog from on the same topic HERE.

Friday, April 30, 2010

Change; it's inevitable...

It is true. The only constant is change! The mortgage world has endured a slew of government imposed changes in the last little while. Here is a brief update of the recent changes in the mortgage world:

1. RATE INCREASES ON FIXED RATE MORTGAGES: we’ve received three significant increases over the last month, increasing the five year fixed rate by almost 1%. This is an additional squeeze on the pocketbook for anyone wishing to enter the housing market. It’s really important to get a pre-approval completed if you are in the market for a home or a new mortgage as most lenders will lock in a rate for 120 days. You’ll be protected from any further rate increases within that time period. Of course, if the rates go down you’ll get the lower rate as well. A pre-approval only takes about 10 minutes to complete so it’s definitely worth your time to get one done. Please feel free to phone or email me to get started on your pre-approval!

2. GOVERNMENT CHANGES TO THE QUALIFYING RATE: What does this mean? If you are taking out a mortgage and are choosing a term of less than five years or a variable rate you’ll now have to qualify for the mortgage using the Bank of Canada benchmark rate (currently 6.10%). If you choose a five year, fixed term you’ll only have to qualify at the contract rate (the rate you are actually paying). This means the vast majority of people will likely choose a 5 year fixed ratemortgage. To be honest, I don’t really think this is much of a concern as most borrowers choose a five year term anyway. However, if you have your heart set on a variable rate it’s definitely tougher to qualify.

3. REFINANCING YOUR HOME: If you’d like to access some of the equity you’ve built up in your home for some other purpose (buying RRSP’s, purchasing a vacation property, consolidating debt etc) you’ll now be restricted to 90% of your home’s equity. The previous rules allowed you to refinance up to 95% of the value of your home. Again, I personally don’t think this is a big deal. It’s actually a good change and will force borrowers to be a bit more conservative with their borrowing.

4. INCREASED DOWN PAYMENTS FOR RENTAL PROPERTY: If you purchase, port or refinance a rental property you’ll now need at least 20% equity in the property compared to the previous underwriting guideline of 5%. I think this move will hopefully prevent unsophisticated borrowers from entering the revenue property market. Owning a revenue property is a big step and I’m sure borrowers will take it more seriously when they have to put at least 20% into the property.

Please feel free to contact me should you have any questions, concerns or require a pre-approval or mortgage assistance!

Tuesday, April 6, 2010

"Rising Interest Rates - Have we missed the boat?"

AMBA is hosting a FREE interactive WEBINAR to help consumers find answers to their questions.
Hear directly from industry experts
Live Q & A period

Date: Tuesday April 13th
Time: 7:00 pm - 7:45 pm
Location: From the comfort of your own home!
Variable vs Fixed Rate Mortgages - What do I need to know to make the right decision?
Rising Interest Rates - Does this squeeze me out of the market?
Recent changes to mortgage qualifying - How does this affect me?

Please click to REGISTER

What to do about the rise in rates

There's been a lot written in the media lately about upcoming hikes in fixed rates. While it's true many of the big banks have increased their posted fixed rates, if a new mortgage is on your horizon, there's no need to panic.

As of right now, there are still many lenders who are offering rates near historic lows. If you're thinking about buying or renewing in the near future, your best bet is to take advantage of a 120 day rate hold. This feature, offered by many different lenders, allows you to get prequalified at today's low interest rate. If rates go up, you're guaranteed today's rate. If they go down, you get the lower rate.

When it comes to locking in your variable rate mortgage, that question is a little trickier to answer. Many experts believe the Bank of Canada will start increasing its Prime rate in the near future by approximately 25 basis points. If you're in a financial situation where an increase in monthly payments is going to be tough for you to handle, it's probably wise to lock in now. When you lock in, it's important to remember that you're locking into the current fixed rates.

If you can withstand small increases in your mortgage rate, you might want to stand pat with your variable rate mortgage for now. Increases don't come out of the blue since they're tied to the Bank of Canada's prescheduled announcements so it's best to tackle as much principle as possible while you can afford it.

Whatever you choose to do, take note that lenders are particularly swamped right now as homeowners try to acquire a rate lock - or a mortgage before rates really start to increase. If you're buying a home, make sure you give yourself at least seven days to acquire financing.

If you would like advice on the options that make the most sense for your particular situation, please feel free to give me a call.

Tuesday, February 16, 2010

New lending guidelines: CMHC

Jim Flaherty, Canada’s Minister of Finance announced new lending guidelines for CMHC backed mortgage loans in an announcement earlier today.

The new rules are as follows:
1. All borrowers must qualify for a mortgage using the five year fixed rate regardless of the term chosen. As an example, if you wish to take out a 1 year mortgage at 2.65% you will still need to qualify at the 5 year closed rate of 3.89%.
2. When refinancing a home, Canadians will only be able to refinance up to 90% of the value instead of the previous 95%.
3. If you want to purchase a revenue property, CMHC will no longer insure you. You’ll need to put 20% down and take out a conventional mortgage.

These changes come into effect April 19th 2010.

Thursday, February 11, 2010

Ottawa Advised to tighten mortgage rules - Business - Ottawa advised to tighten mortgage rules

By Julian Beltrame

OTTAWA — The federal government should avoid major surgery and make only minor adjustments to deal with fears of overheating in Canada’s housing market, a number of leading economists said Wednesday.

Federal Finance Minister Jim Flaherty and the Bank of Canada have expressed concern that Canadians may be assuming too much debt in home purchases, debt that could rebound on them when interest rates rise.

But some solutions being floated in advance of Flaherty’s March 4 budget — doubling the minimum down payment to 10 per cent, or reducing the maximum amortization period from 35 to 30 years — could do more harm than good, the economists said.

“We want some sort of micro-surgery, not (taking) a pickaxe to the problem,” said Avery Shenfeld, chief economist with CIBC World Markets.

Bank of Nova Scotia economist Derek Holt said such radical surgery could cause home prices to crash and shake confidence in the consumer sector, a key driver of the fragile economic recovery.

Interviews with economists at four of Canada’s big banks showed some disparity of views as to the size of the problem, but general agreement that there is good reason for concern.

Most see home prices in Canada as being 10 to 15 per cent too high, largely because construction of new homes ground to a halt during the recession, decreasing available supply, and because of record-low interest rates, which are luring many new entrants into the market.

The Canadian Real Estate Association said this week it expects home prices to gain another five per cent to a record average of $337,500 this year. Sales will also hit record levels this year before tailing off next year, the association said.

It is unclear whether Flaherty is contemplating measures to cool prices and activity. Last weekend, the minister told reporters he was closely watching prices, but did not believe Canada had a housing bubble as yet.

But if one were to develop it could have wider repercussions on the economic recovery, as occurred in the United States, the economists said.

The best approach now is to take baby steps that would help moderate prices and activity and create a so-called soft landing.

One measure, according to TD Bank deputy chief economist Craig Alexander, would be to tighten the “income test” banks use to assess whether a prospective homeowner can meet monthly mortgage payments.

Already, banks build in a cushion in handing out floating mortgages by judging credit worthiness based on the borrower’s ability to make payments on the three-year rate, not the variable rate — about a two percentage point difference. Alexander said that could be increased to the still higher five-year posted rate.

A variation would be for banks to judge ability to meet payments not just on the mortgage but on all outstanding debts of a prospective homebuyer.

Yet another idea would be to deny government-backed insurance on mortgages for investment properties, thereby dampening speculation.

Economists believe such measures could help deflate any housing bubble without bursting it.

“It’s not in the interest of either buyers or lenders to have boom-bust cycles,” said the TD’s Alexander.

“That’s the lesson from the U.S. experience. If you have the wrong incentives and you don’t have regulations, you end up in a place you don’t want to be.”

Bank of Montreal economist Douglas Porter said if Ottawa chooses to raise the down payment requirement, it should do so modestly, perhaps to six or seven per cent.

Porter said, however, that he didn’t think reducing the amortization period to 30 years would be dramatic enough to cause a major disruption in the market.

Economists point out that home affordability is expected to tighten this summer even if Flaherty does not change the rules.

The introduction of the harmonized sales tax starting July 1 in Ontario and British Columbia — two of the hottest home markets — is expected to add a couple of thousand dollars to home purchases in those provinces.

And Bank of Canada governor Mark Carney is widely expected to start raising interest rates as early as July.

The Canadian Press

Monday, January 25, 2010

Affordability is a Personal Thing

One of the most difficult things about buying a home - especially a first home - is the temptation to spend more than your income will comfortably allow.

It doesn't help that lenders tend to approve potential buyers on the premise that they don't have any expenses beyond those that revolve around their household - i.e., heating and electricity - and any outstanding debts. It also doesn't help that, the more money you spend, the higher your real estate agent's commission.

As a result, a homeowner's maximum prequalified loan amount tends to be much higher than what they can comfortably afford - and there are often a lot of forces working against them (sales pressure, bidding wars, emotions) encouraging them to spend the extra money.

In a recent episode of HGTV's Property Virgins, this scenario was played out in front of the rolling cameras. The show's host and real estate "guru", Sandra Rinomato, frequently encourages her first time buyers to purchase "as much house as they can afford" - and scoffs at those who cautiously don't want to spend their fully-approved amount.

In this particular episode, a young Toronto couple - both elementary school teachers - were approved for $450,000 with a $20,000 down payment. It's unlikely that either of these teachers were making more than $50,000 a year max, bringing their total income to somewhere around $100,000 before taxes. They were looking at homes between $350,000 and $400,000, but when they found a condo for $440,000, they - meaning the wife - fell in love with it. While the husband wasn't certain it could fit into their finances, a quick bat of his wife's eyelashes convinced him that they could, and they ended up going for it.

I have no idea when this particular episode was filmed (although it seems to be before the minimum down payment was raised to 5%), or what the interest rates were at the time, but even if they landed a mortgage at 4%, their monthly mortgage payment would be around $2,209.28 - plus condo fees ($220), property taxes ($200), and hydro ($100). Factor in an extra parking space ($150), that takes us to $2,879.28 a month - a fair chunk of the couple's after-tax income of approximately $6,029/month - and we haven't even addressed groceries, entertainment, take-out dinners, car payments, car insurance and all the other expenses that accompany living in an expensive city.

To leave yourself some breathing room, make sure you're well aware of your monthly spending habits before heading out to hunt for a home. Once you know where your money goes, work backwards and determine what monthly mortgage amount you can afford - and what that translates into in terms of a house price. Settling for a smaller home may not seem like a sacrifice when you can afford that extra vacation, or renovation, or fine dining experience that your house-poor neighbours can only dream about.

This article is provided courtesy of Axiom Mortgage Partners.

Thursday, January 14, 2010

Edmonton Housing Market Forescast 2010

Hi everyone!

Happy New Year and all that jazz! It’s been a while since my last post so I figured it was about time I posted an article.
Yesterday I attended the 2010 Housing Forecast Seminar along with approximately 1,000 other industry members. It was very informative, and as always, I come back with a lot of helpful information.
Here are some of the highlights!

Hot Design Trends for 2010: presented by Guy St. Germain of the CHBA Edmonton Region
• Going green to save green is still very popular! I’m really glad to hear this as I am a strong believer in looking after our environment. Sustainable wood flooring is still very popular along with Energy Efficient appliances.
• Wide hardwood floorboards are still popular, especially patterned woods like oak and ash.
• Grey is the new neutral! But, not the yucky ‘80’s grey...more spa-like grey’s such as slate and charcoal.
• Wallpaper continues to be popular but there has been a shift away from big, bold patterns to more nature inspired designs that include textured finishes.
• Glass tiles in kitchens and bathrooms are an inexpensive way to add colour. A lot of the glass comes from recycled sources and metallic and glossy finishes are very common.
• High tech kitchens continue to be in demand. There are more built in gadgets such as flat screen TV’s and computers. Stainless steel appliances are now standard so watch for brass and copper finishes on appliances.
• Bathrooms continue to become more spa-like and important to new buyers. Watch for master bathrooms to become even larger and more spa-inspired with a greater emphasis on his and her spaces.
• Dog showers continue to be popular! When they first began to emerge they were seen as a novelty item but may be here to stay since they have become very popular with canine loving home owners.

Market Forecast: presented by Larry Westergard, President (2010) Realtors Association of Edmonton• 2009 was a year of recovery. Prices were at their peak in May of 2007 and declined into 2008.
• The market is starting to rebalance itself and we are a lot better of in Alberta than in other parts of Canada and the United States.
• As of November 2009 Edmonton home prices ranked 5th compared to other Canadian cities.
• The residential sales forecast is that there will be a balanced and active market for single family homes while the market for higher end homes will be softer. The condo market is not expected to increase.
• In summary: buyers will have choice and sales will be steady. Prices will vary seasonally and will trend upwards throughout the year. Interest rates will remain low in the first half of the year.
• If you would like more information on the market, please contact a licensed real estate agent!