Mortgages Canada

Mortgage News

Canadian dollar flat after growth fears reverse rally - Financial Post

The Canadian dollar was flat against the U.S. dollar on Wednesday, as a rally in the overseas session gave way to credit and inflation fears, which saw investors return to the greenback. Domestic bond prices rose as slumping overseas equities markets drove the bid for safe haven government debt. At 7:57 a.m. EST, the Canadian dollar was at $1.0171 to the U.S. dollar, or 98.32 U.S. cents, unchanged from Monday’s close.

Real Estate News

Real Estate In Victoria BC - BC Budget - Real Estate Info

Real Estate in Victoria and British Columbia (BC) in general just got a bit easier to buy. The BC Budget will help first-time home-buyers and current owners. Yesterdays budget will potentially give Victoria Real Estate market a boost and it will improve the affordability and sustainability of homes in Victoria and BC in General. The new measures were introduced in yesterdays provincial budget. The increase in the Property Transfer Tax (PTT) exemption threshold is an important step in the right direction to improve housing affordability. PTT is a big burden for buyers and is a significant cost to the purchase of a home.

The birthplace of Toronto - Real Estate Intelligence

The settlement of modern Toronto began in 1793 when Lieutenant Governor John Graves Simcoe built a garrison on the present site of Fort York. Fearful of war with the United States, Simcoe planned to establish a naval base at Toronto in order to control Lake Ontario. Simcoe also moved the Capital to Toronto from the exposed border town of Niagara. Civilian settlement followed and a community named York began to grow two kilometres east of the fort (York was renamed Toronto in 1834). In 1812, the United States declared war and invaded Canada.

Toronto Real Estate Board reports - Real Estate Intelligence

Resale home transactions in the Greater Toronto Area declined in the first two weeks of February, Toronto Real Estate Board President Maureen O’Neill announced today. The first half of the month yielded 2,775 transactions, down 14 per cent from the 3,240 sales recorded in the same timeframe last year. The moderation in sales was more pronounced within the City of Toronto–down 18 per cent to 1,066 from last February’s 1,308—than in the 905 suburbs, which saw transactions off 11 per cent.

 

Mortgage Prepayment Penalty – How to Avoid Prepayment Penalty.

Prepayment penalty is the money you pay to the lender if you pay off your mortgage earlier or if you decide to refinance.

Prepayment penalties are quite common. The only way to avoid them is to make sure that you dont get one when signing up for a mortgage. Once signed, there is no way back, since it is a legal contract and it cannot be breached.

How Do Prepayment Penalties Look on Paper?

Mortgage prepayment penalties are never stated as is on the contract. This is how they might look:

“may” will not have to pay a penalty

“may” will not be entitled to a refund of part of the finance charge

[credit to mortgage professor]

This is done to confuse borrowers who will take “may” will not – as a no, while in fact in means YES, you will be charged. Word “may” means that there is a possibility. In a mortgage contract may mean yes.

Again, unfortunately this is the tactic employed by most mortgage lenders, in order to confuse borrowers and put prepayment penalties on mortgages. Majority of borrowers will most likely:

— will not pay enough attention

— don’t know any better

— singed too many documents and want to get through as fast as possible(also that element to get to the new property fast, like to a new big toy)

— don’t stick to their guns

— Thought it meant the opposite(confusion with “may“)

Mortgage prepayment penalties can be as high as $9000 for $300.000 mortgage, hitting the bottom line for many borrowers, very hard.

The primary reason for such penalties:

— lenders want you to stick with them

— want to make more money

How to Avoid Prepayment Penalties?

There is only one way. Ask when you sign up for a mortgage. Look for:

“may” will not have to pay a penalty

“may” will not be entitled to a refund of part of the finance charge

If its on the contract means you have one. Make sure to discuss this with the broker/lender and let them know you want it taken off or else.

Good luck.

Mortgage News

Dollar Declines to 2-Week Low Against Euro on Rate Speculation - Bloomberg

The dollar fell to the lowest level in two weeks versus the euro on speculation the Federal Reserve will keep cutting its benchmark interest rate, widening the U.S. yield disadvantage with Europe. The dollar’s decline started after the governor of the Bank of France, Christian Noyer, said there is cause for “optimism” about economic growth in the euro region. Brazil’s real rose to an eight-year high as a boom in exports and the highest inflation-adjusted bond yields in emerging markets lured investors. The pound fell to a one-month low against the euro.

Deeper rate cut forecast as inflation weakens - Financial Post

The chance of a half-percentage point interest rate cut next month has increased, with the majority of the market now expecting a steeper cut following the weakest annual inflation reading since August last year. Inflation fell 0.2% last month, pulling the 12-month rise in consumer prices down to 2.2% from 2.4% in December, Statistics Canada figures showed yesterday. Dawn Desjardins, senior economist at RBC Financial Group said overall inflation fell because of lower car prices and the 1% GST cut on Jan. 1 — estimated to have shaved 0.6% off the pace of inflation.

Bank of Montreal Takes C$325 Million in Writedowns (Update4) - Bloomberg

Bank of Montreal, Canada’s fourth- largest bank, will report writedowns of about C$325 million ($323.9 million) in the first quarter and replace its chief risk officer after combined trading losses and other costs topped C$1 billion over the past year. The costs stem from debt transactions with bond insurer ACA Capital Holdings Inc., as well as trading losses and a writedown on investments in two Canadian asset-backed commercial paper trusts administered by Bank of Montreal, the Toronto-based bank said today in a statement.

Real Estate News

Is the boom winding down? House resales were down 8% from last January - Real Estate Intelligence

Resale home activity caught a case of the winter sniffles in January, a further sign Canada’s mighty residential real estate market is finally in a slowdown. Last month, seasonally adjusted unit sales declined by 0.4 per cent from the month before and 8 per cent from January, 2007, according to data released Friday by the Canadian Real Estate Association (CREA). “With the further dip in January, Canadian home sales are now well below year-ago levels, adding further evidence that the great boom is winding down,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., in a research note.

Using RRSPs for real estate, higher learning - Time Colonist

Saving for education, paying off student loans or buying a home often have higher priorities for younger people than contributing to an RRSP. But the Home Buyers Plan and the Lifelong Learning Plan can provide options for anyone saving for retirement but in need of investing in more immediate priorities — especially with the increasing price of real estate and tuition. The Lifelong Learning Plan allows you to withdraw up to $10,000 in a calendar year from your RRSP to finance training or education. You cannot withdraw more than $20,000 in total. To qualify, three conditions must apply:

Uplifting scents key to a happy home - Canada.com

‘Smell is a potent wizard that transports you across thousands of miles and all the years you have lived.” — Helen Keller Nearly any real estate agent will tell you that one of the surest ways to appeal to a would-be buyer is to have an enticing smell — freshly baked cookies, brewing coffee, simmering soup — wafting through your home when it is being toured. The olfactory system, which senses and processes odours, is one of the oldest parts of the brain. Among our senses, smell alone has a unique relationship with the limbic system, a key emotional centre associated with our moods, behaviour, and long-term memory.

Canadian real estate returns remain strong - CNW

IPD, the world-leader in commercial real estate performance analysis services, today released the 2007 results for the ICREIM / IPD Canadian Annual Property Index. The Index saw a total return for 2007 of 16.1%, down from the 18.4% seen in 2006. However, property still outperformed equities and bonds, which returned 10.5% and 4.7% respectively. Of the major sectors, offices was the top performer with a total return of 18.9% followed by residential at 17.9%. Industrial and retail both lagged behind with respective returns of 14.3% and 13.6%. Residential (rental) was the only sector to see an improvement on 2006 returns.

The Slowing of the US Economy and Canadian Mortgage Rates.

Our big neighbour to the south is having tough economic times, which are predicted to worsen as time goes by. In this article we’ll try to analyze the upcoming US recession, its impact on Canadian Mortgage Rates and what is the best thing to do as a borrower.

Importnant: How to Measure US Slowdown to Your Advantage.

As an informed borrower it is best to base your decisions on best avalaible information. Before we get into mortgage rates, it is very importnant to know how to measure US economy, since it’s going to be a primary factor in your decision making.

Gold is measured by many as the safest investment in the world. Gold has been around for centuries and it’s value always stays current no matter the stocks and economy.

Dollar value is affected by many factors, gold is constant.

Imagine a light poll and a feather. In that case light poll is gold and feather is the dollar. If it rains - light poll will stand there unaffected while our feather will go down to the ground. If the wind blows - the light poll will stand, while the feather will fly to explore the world.

This is the primary feature of gold – no matter the economics it stays constant. It’s value never changes. What changes is the value of dollar. When economists say “gold went up” what they’re really saying is “dollar went down”, because one dollar can buy less gold, since gold value never changes.

So gold is your good friend to measure performance of the no so mighty US dollar and US economy. When the gold price goes up – US dollar and economy goes down. When the gold price goes down – dollar is experiencing growth and economy is getting better.

Right now we’re seeing a constant slow down in the economy.

Graph represents 5 year history of gold prices:

As you can see, in 5 years (2003, invasion of Iraq) gold price went from $350 to $900+, which means that dollar experienced tremendous inflation.

This pattern continues to this day as dollar keeps falling into its lowest.

One thing that banks do in order to substitute for the decline is they cut interest rates. The formula is this. When the value of dollar goes down, central banks make less money, since they’re actually getting less as opposed to what they lended.

In order to recover they would logically rise interest rates, however rising the rates would be even harder for the economy. In turn, central banks are forced to experience losses and actually cut the rates, in order to stimulate economy and encourage more credit. Credit is a closed loop. In order to pay off existing credit, more credit must be borrowed. If this is descouraged by economic harship, banks are forced to cut rates and experience losses.

This is what we saw with recent interest cuts from the Federal Reserve(US central bank) and Bank of Canada.

They lowered interest rates, while Federal Reserve cut the rates to record in 20 years. What this means to you – US economy is having deep trouble and central banks are forced to cut rates, in order to stimulate more borrowing. This is a temporary patch however. Cutting the rates helped dollar for about a month, as it continues the downward slope even further.

“If we made the wrong diagnosis, we should change the treatment…” – Ron Paul

In order to really stimulate US economy, it must cut spending, as Iraq and other wars are costing US unrepayable debt. The interest rate cuts will not help in the long run, but they’re a must, since banks must encourage credit borrowing.

What Does US Decline Mean to You as a Borrower?

This where you can gain. As the US slumps into ressesion, Canada will be the first one to feel it. Whether you like it or not, Canada is completely dependant on US, both economically and strategically. As the saying goes:

“When US sneezes – everyone gets a cold.”

As the US goes down even further, Canada will be affected as well. What this means is that banks will be cutting interest rates. There will be no other choice but to follow that pattern. credit business is a closed loop – new credit must be constantly created at bigger proportions, otherwise the economy slumps.

For you as a borrower this is a great chance of getting an adjustable rate mortgage.

Do not say: “I know the deal” – I don’t like it.

Look at the outlook from bigger perspective. As the US economy enters into recession, Canada will inevitably feel the impact. In order to prevent it at home or at least slow it down, banks will be forced to cut rates, cut rates and cut some more.

This where adjustable mortgage will play a good deal for you. The rates go down - you pay less.

So getting an adjustable(variable) rate mortgage will save you on payments. But don’t just get a variable rate mortgage, get a variable that can be switched to fixed rate later on.

Number of lenders offer this mortgage. It stays adjustable for a period of time then switches to a fixed rate. As a borrower, you benefit from a nice price break on interest rates cuts as the economy slump. When it hits rock bottom before going up – you lock in to the lowest rates with a fixed rate mortgage.

You win both ways.

Again, getting an ARM is somewhat considered risky, however looking at current markets this is the smartest thing to do. Get Adjustable with an option to switch into fixed rate. Price may be bit more expensive or you might pay royalty for the priviledge - it will pay off in the long run.

Where To Follow US Economy

You can follow US economy by simply looking at gold prices. If the price is going up – economy is going down and vice versa.

Here is a great site that is updated hourly(price per ounce):

Gold Price

Also follow the news closely. A disclaimer can be said however, it is to not wise to base decisions on one newspaper, as most mainstream publications like Toronto Star, The Sun and others, are quite bias and are very censored in terms what writeters can say. Also, channels like City-TV, CBC and others are also very restricted.

The best bet is to follow smaller publications. Google offers a news aggregator service called Google News.

It gathers news from big as well as smaller publications, more analytical in terms of their reporting.

Google News

We wish you luck.

If you need any assistance, give us a ring. We’ll be happy to help you with any questions you might have.

514 – 397 – 68 32

Mortgage News

Loonie falls by nearly one cent after Fed cuts interest rate to 4.25 per cent - AOL Canada

OTTAWA - The Canadian dollar fell by nearly a cent Tuesday afternoon on news the U.S. Federal Reserve cut its key interest rate for the third time in as many months as the central bank tried to stave off a recession. The loonie fell 0.83 a cent to close at 98.58 cents US after the Fed trimmed its rate by a quarter-point to 4.25 per cent. The U.S. central bank’s officials signalled more cuts are possible if a severe downturn in housing and a crisis in mortgage lending worsen. Some analysts had called for a larger cut than Tuesday’s quarter point reduction, somewhere in the neighbourhood of a half point. The Dow Jones industrial average, which had been up about 40 points in afternoon trading, plunged by nearly 300 points as investors deciphered the Fed’s comments.

Mortgage Scam In Our Own Backyard - Local news

As the real estate market slumps and homeowners are searching for funds to refinance, swindlers are trying to cash in. Complaints are already trickling into the Better Business Bureau about a company that supposedly offers loans for mortgages. I spoke with Mr. John Goodman who claims his business Aloe Mortgage Financial Company has an office right here in Idaho Falls. So, I “mapquested” it and set out to find his exact location. All across the world, are people who fall victim to scams and Eastern Idaho is no exception.

“Stats show that Idaho is one of the hardest hit states for scams. I think it’s just because we’re really trusting individuals here,” said Vickey Verrill, the Director of Operations at Idaho Falls’ Better Business Bureau.

Real Estate News

Housing starts reach second-highest level in nearly two decades in 2007 - AOL Canada

OTTAWA - Canada Mortgage and Housing Corp. says housing starts reached their second-highest level in nearly two decades last year, estimated at 229,600. This despite a drop in the seasonally adjusted annual rate of housing starts in December to 187,500 units from November’s 233,300 units. CMHC’s chief economist, Bob Dugan, says the 2007 growth in housing starts was driven by low mortgage rates, solid employment, income growth and a high level of consumer confidence. The volatile multiples segment and single-detached starts fell in December, mainly due to harsh winter weather after two strong months in October and November.

Also, the seasonally adjusted annual rate of urban starts decreased 23.2 per cent to 151,600 units in December, compared to November.

Opposition to new real estate rules and fees grows - Financial Post

It seems that every day, another group voices concern over the proposed new real estate insurance fees and real estate regulations. The Coalition for Consumer Choice on Legal and Insurance Services in Real Estate Transactions is gravely concerned about the impacts the proposed Bill 152 regulations regarding transfers of title, and the related proposals by the Law Society of Upper Canada requiring two lawyers and two firms on a transfer of title, will have on the real estate market and consumers in Ontario.

Residential listings surge to new record - Calgary Herald

CALGARY - New MLS residential listings in Canada’s major markets, including Calgary, surged to a new record in January, according to statistics released today by the Canadian Real Estate Association. The association said this made the MLS resale housing market more balanced that month than at any other point in the past seven years.

In Calgary, new listings in January hit 5,424, a whopping 35.3 per cent hike compared with January 2007. Nationally, new listings in January were 51,146, an increase of 7.2 per cent from a year ago.

 

 

Choosing a Mortgage – What not to Choose in a Mortgage

This article will not teach you how to choose a mortgage, but what not choose in a mortgage loan.

Many borrowers base their mortgage decisions and property purchases based on the amount they will be paying per month. That is the number one thing you must avoid. Never base your final decision on the monthly payment offered to you. I am not talking about your monthly budget, but the monthly payment offered by lenders.

Suppose a broker is offering you this wonderful mortgage for the big house of yours for $1460 while another broker is giving you $2840! What in the hell is wrong here? Same house right? And that is the bait that borrowers go for, keeping their head deep down in sand.

The one thing that broker with $1460 isn’t telling you is that his mortgage is a 5/1 Adjustable negative amortization mortgage. After 5 years of minimum payments you will owe $30.000 more on the principal, and interest will flip to the new high. Mortgage will go into amortization mode, meaning you will start paying principal + interest + the extra interest and junk fees.

Imagine you’re buying a car. You come to a dealership and a fair mechanic offers you a brand new beemer(BMW) at $800 per month. Sounds pretty fair? But wait. You go to the guy next door and he’s got the same car for $375 per month.

What will be your reaction? Something fishy right? You wouldn’t’t buy into it.

That’s right. That $375 per month are only interest payments, not including principal(actual money borrowed).

But lets pretend you’re happy as hell that you can get a car for $375 a month. You sign up for it.

What the second shop didn’t tell you is that instead of 3 years as with $800 you now have it for 10 years, and since you’re so happy you got it twice cheap, they put in a bunch of junk fees. With a regular purchase you will look a the fees carefully, ask what are they are and what for. That’s not the case this time. Since it’s so cheap you feel its justified, but what is happening in reality is they’re simply making some extra($1000 – $3000) dough for themselves.

So should you buy into that $1460 per month or $2840 at 7% interest fixed for ten years?

Lets have a look at it.

With $2840 at 7% you’re paying off monthly interest + principal, meaning that the amount you owe actually goes down. If the rates go up in the next couple of years, you’ll still be locked in into nice 7%. The mortgage is being paid off, you owe less, you’re happy(and your loved ones).

What’ going on with $1460? The interest is quite nice, 5.85%, lower than our previous example. Well lets have a look. It’s an adjustable 5 year ARM, negative amortization loan.

What? Lets explain.

For five years you will be paying a minimum payment of $1460 at 5.85%, introductory rate. And what happens when you pay minimum on you credit card? It grows. So in five years you will actually owe more, $20.000 – $50.000 more.

Since it’s an adjustable rate mortgage, its gonna adjust in five years and guess what? The rates will jump up. So instead of 5.85% you will start paying about +0.5% every month. It will grow at 0.5%+ every month until hitting the ceiling. After all, that fixed 7% doesn’t look that bad.

Since it’s a negative amortization loan, you don’t pay for the principal first 5 yeas. But guess what? You have to.

Now after five years you have to pay: higher principal (because balance grew), higher interest rates(changing every month) and actual amount borrowed. So now your payments will be double and half of that $1460, hitting $3000+.

While a nice fixed $2840 at 7% is paying off slowly.

But i cant afford more then $1460! That’s the point. If you cant afford real payments, you shouldn’t buy it in the first place. That nice low $1460 seems quite tempting, + you get that big dream home of yours. Down the road though It’s gonna hit you hard, because payment offered is not real.

So no matter what the broker tells, no matter the stories about his kids(whatever that sales book taught him, to appear as human) use your head. Ask if its negative amortization mortgage. If it is – say thanks for the story and go shop again. It aint worth it.

You can also look for a house that a bit cheaper. Don’t bite off too much, cause it’ll bite you back down the road.

Mortgage News

Desjardins Group Lowers Interest Rates - Canada Mortgages

    <<

    -----------------------------------------

       Terms                  Rates

    -----

    -----------------------------------------

    6 months open        8,90 %   unchanged

    -----------------------------------------

    6 months closed      7,05 %   unchanged

    -----------------------------------------

    1 year open          9,40 %   - 0,10 %

    -----------------------------------------

    1 year closed        7,10 %   - 0,05 %

    -----------------------------------------

    2 years              7,30 %   - 0,10 %

    -----------------------------------------

    3 years              7,30 %   - 0,10 %

    -----------------------------------------

    4 years              7,20 %   - 0,15 %

    -----------------------------------------

    5 years              7,25 %   - 0,15 %

    -----------------------------------------

    7 years              7,65 %   - 0,05 %

    -----------------------------------------

    10 years             8,00 %   - 0,05 %

    -----------------------------------------

Laurentian Bank lowers its mortgage rates - Canada Mortgages

    <<

    TERM                     RATE    VARIATION

6 month open:        8.90% to 8.90%  0.00%

    6 month close:       7.05% to 7.05%  0.00%

    6 month convertible: 7.10% to 7.10%  0.00%

    1 year open:         9.50% to 9.40% -0.10%

    1 year close:        7.25% to 7.10% -0.15%

    18 month close:      7.35% to 7.25% -0.10%

    2 year:              7.40% to 7.30% -0.10%

    3 year:              7.40% to 7.30% -0.10%

    4 year:              7.35% to 7.20% -0.15%

    5 year:              7.40% to 7.25% -0.15%

    6 year:              7.60% to 7.55% -0.05%

    7 year:              7.70% to 7.65% -0.05%

    8 year:              8.00% to 7.95% -0.05%

    9 year:              8.00% to 7.95% -0.05%

    10 year:             8.05% to 8.00% -0.05%

    >>

National Bank (TSX:NA) has adjusted its rates for residential mortgages -
Canada Mortgages

TERM                   CURRENT NEW  CHANGE
                        (%)    (%)
——————————————-
——————————————-
FIXED-RATE OPEN TERM
6 months open          8.900  8,900  0.000
1 year open            9.500  9,500  0.000

FIXED-RATE CLOSED
TERM
3 months closed        7.100  7.100  0.000
6 months closed        7.100  7.100  0.000
1 year closed          7.250  7.100 -0.150
2 years closed         7.400  7.300 -0.100
3 years closed         7.400  7.300  0.100
4 years closed         7.350  7.200 -0.150
5 years closed         7.400  7.250 -0.150
7 years closed         7.700  7.650  0.050
10 years closed        8.050  8.000 -0.050
VARIABLE-RATE CLOSED
TERM
5 years Variable rate
(discount included)    5.500  5.500  0.000
5 years Saver          6.750  6.750  0.000
5 years Capped rate    5.750  5.750  0.000

Scotiabank changes mortgage rates - CNW Group

<<

-one-year open      9.35 per cent

(decreases by 0.10 per cent)

-one-year closed    7.20 per cent

(decreases by 0.10 per cent)

-two-year closed    7.30 per cent  

(decreases by 0.10 per cent)

-three-year closed  7.30 per cent     

(decreases by 0.10 per cent)

-four-year closed   7.20 per cent  

(decreases by 0.15 per cent)

-five-year closed   7.29 per cent   

(decreases by 0.10 per cent)

-seven-year closed  7.65 per cent   

(decreases by 0.05 per cent)

>>

Commercial mortgages may be TD’s weak spot - Financial Post

Executives at Toronto-Dominion Bank have accepted deserved plaudits for avoiding the sort of subprime-related writedowns that have beset rival banks. But if pride comes before a fall, TD’s senior management will likely be growing more wary about the bank’s exposure to other areas of the faltering U.S. economy, and in particular the deteriorating commercial real-estate sector. Defaults on residential mortgages have rightly grabbed most of the negative headlines out of the U.S. financial sector, but higher defaults on commercial real-estate loans look more likely too.

Stocks lower as Fed chief Bernanke says conditions worsening - Canada East Online

TORONTO - Stock markets closed lower Thursday with investors opting to take profits after U.S. Federal Reserve Board chairman Ben Bernanke delivered a discouraging litany of what’s wrong with the American economy. In fact, he told the Senate banking committee that business prospects have worsened and predicted the economy will grow at a “sluggish” pace before recovering later in the year and that banks’ mortgage investments could lose more value. That took some of the shine from big stock-market advances Wednesday which had followed a better-than-expected reading on U.S. retail sales and New York’s Dow Jones industrials gave back almost all of Wednesday’s 179-point runup, losing 175.26 points to 12,376.98.

Real Estate News

Buying a Home - The Vancouver Sun

Buying a home is one of the biggest decisions you’ll ever make. So when it comes time to signing on the dotted line, make sure you don’t make that decision alone.

To help you put together the right team of professionals, Canada Mortgage and Housing Corporation (CMHC) offers the following whose-who list of experts and what they should bring to the table: Real estate agent. Among other services, your real estate agent will help you find a home, write an Offer of Purchase, negotiate a purchase on your behalf and save you a considerable amount of time, trouble and headaches. When choosing the agent you want to work with, don’t be afraid to ask questions or call your local real estate association for advice.

Condos are a viable option - The Daily Press

Home ownership is a Canadian dream for many people. For those with limited funds, or for empty-nesters wanting to downsize, buying a condominium is often a good option.

Condos are hot lately. Some cities in Canada are going through a major condo boom with lineups when new units are released. Building of new condos is one-third of all new home construction, up from one-fifth a decade ago. When you buy a condo, you are personally buying your unit. That unit could be an apartment-type building, townhouse, semi or even a detached home.

Is Your Agent a Double Agent? - Real Estate Intelligence

Let’s say you walk into an open house and you’re approached by the friendly real estate agent sitting at the dining room table. You’re very interested in the house and she says that she can represent you in its purchase. If you agree, you could be giving up your right to an advocate who solely represents your interests by signing up with a dual agent — multiple representation in real estate parlance.

Calgary real estate market healthy despite U.S. turmoil - Calgary Herald

CALGARY - Canada’s real estate market remains healthy despite the current credit situation that is reverberating out of the United States and the Calgary market continues to be an attractive one for potential investors, says a global report released today.mDTZ Barnicke’s “Global Views 2008″ real estate report said 2007 was another strong year for investment activity as “investors, both foreign and domestic, continued to view Canada in a positive light.

Attention News/Business/Financial Editors:

Desjardins Group Announces Changes in Residential Mortgage Rates

LEVIS, QC, Feb. 14 /CNW Telbec/ - Desjardins Group announces the
following changes in mortgage rates for caisses in Québec and Ontario(*),
effective on February 15, 2008.

    <<

    -----------------------------------------

       Terms                  Rates

    -----

    -----------------------------------------

    6 months open        8,90 %   unchanged

    -----------------------------------------

    6 months closed      7,05 %   unchanged

    -----------------------------------------

    1 year open          9,40 %   - 0,10 %

    -----------------------------------------

    1 year closed        7,10 %   - 0,05 %

    -----------------------------------------

    2 years              7,30 %   - 0,10 %

    -----------------------------------------

    3 years              7,30 %   - 0,10 %

    -----------------------------------------

    4 years              7,20 %   - 0,15 %

    -----------------------------------------

    5 years              7,25 %   - 0,15 %

    -----------------------------------------

    7 years              7,65 %   - 0,05 %

    -----------------------------------------

    10 years             8,00 %   - 0,05 %

    -----------------------------------------

Desjardins Credit Union branches in Ontario may apply different
rates.

Reported by Canada Wire

---

>>>

Desjardins Group among other Canadian Banks and Private Mortgage Lenders is offered with Canada Mortgages. Here is a list of Banks, excluding private lenders, avaliable with Canada Mortgages:

- CIBC

- TD

- HSBC

- ING

- Scotia Bank

- RBC

- Laurentian Bank

- President’s Choice Financial

- Bridgewater Bank

- AMEX

- BCP

- BNP

- CTC

- Desjardins Group

To Apply With Canada Mortgages click here.

Please explore our main site as well.

Attention Business/Financial Editors:

Laurentian Bank changes its mortgage rates

MONTREAL, Feb. 14 /CNW Telbec/ - Laurentian Bank has changed its mortgage rates. The changes are as follows:

    <<

    TERM                     RATE    VARIATION

6 month open:        8.90% to 8.90%  0.00%

    6 month close:       7.05% to 7.05%  0.00%

    6 month convertible: 7.10% to 7.10%  0.00%

    1 year open:         9.50% to 9.40% -0.10%

    1 year close:        7.25% to 7.10% -0.15%

    18 month close:      7.35% to 7.25% -0.10%

    2 year:              7.40% to 7.30% -0.10%

    3 year:              7.40% to 7.30% -0.10%

    4 year:              7.35% to 7.20% -0.15%

    5 year:              7.40% to 7.25% -0.15%

    6 year:              7.60% to 7.55% -0.05%

    7 year:              7.70% to 7.65% -0.05%

    8 year:              8.00% to 7.95% -0.05%

    9 year:              8.00% to 7.95% -0.05%

    10 year:             8.05% to 8.00% -0.05%

    >>

These new mortgage rates will be effective as of: February 15, 2008

Reported by Canada Wire

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Laurentian Bank among other Canadian Banks and Private Mortgage Lenders is offered with Canada Mortgages. Here is a list of Banks, excluding private lenders, avaliable with Canada Mortgages:

- CIBC

- TD

- HSBC

- ING

- Scotia Bank

- RBC

- Laurentian Bank

- President’s Choice Financial

- Bridgewater Bank

- AMEX

- BCP

- BNP

- CTC

- Desjardins Group

To Apply With Canada Mortgages click here.

Please explore our main site as well.

MONTREAL, QUEBEC–(Marketwire - Feb. 14, 2008) - National Bank (TSX:NA) has adjusted its rates for residential mortgages. The new rates are effective as of February 15, 2008.

TERM                   CURRENT NEW  CHANGE
                        (%)    (%)
——————————————-
——————————————-
FIXED-RATE OPEN TERM
6 months open          8.900  8,900  0.000
1 year open            9.500  9,500  0.000

FIXED-RATE CLOSED
TERM
3 months closed        7.100  7.100  0.000
6 months closed        7.100  7.100  0.000
1 year closed          7.250  7.100 -0.150
2 years closed         7.400  7.300 -0.100
3 years closed         7.400  7.300  0.100
4 years closed         7.350  7.200 -0.150
5 years closed         7.400  7.250 -0.150
7 years closed         7.700  7.650  0.050
10 years closed        8.050  8.000 -0.050
VARIABLE-RATE CLOSED
TERM
5 years Variable rate
(discount included)    5.500  5.500  0.000
5 years Saver          6.750  6.750  0.000
5 years Capped rate    5.750  5.750  0.000

>>>

About National Bank of Canada

National Bank of Canada is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has more than $113 billion in assets and, together with its subsidiaries, employs 16,863 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank’s website at www.nbc.ca.

Reported by Market Wire

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National Bank among other Canadian Banks and Private Mortgage Lenders is offered with Canada Mortgages. Here is a list of Banks, excluding private lenders, avaliable with Canada Mortgages:

- CIBC

- TD

- HSBC

- ING

- Scotia Bank

- RBC

- Laurentian Bank

- President’s Choice Financial

- Bridgewater Bank

- AMEX

- BCP

- BNP

- CTC

- Desjardins Group

To Apply With Canada Mortgages click here.

Please explore our main site as well.

Mortgage News

Despite predicted Prairie decline, Cochrane housing starts still smoking - Canoe

Total housing starts across the Prairie provinces will decline in 2008 and 2009, with Alberta seeing the biggest drop, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Prairies Highlights report released last week. After a 29-year high of more the 60,000 units in 2007, housing starts across the prairies are expected to drop 15 per cent this year and a further four per cent in 2009. However, Jackie Stone, administrative assistant of planning and engineering at the Town of Cochrane, said that the apparent trend may not be as prevalent in Cochrane.

Ivison: Harper keeping Dion out of the money - National Post

One of the reasons Stéphane Dion is so gung-ho about bringing down the government over the budget is said to be that he wants to get his hands on the $10-billion the government has allocated for debt repayment this year. With the federal coffers running dry, Liberals say they need that money if they are going to be able to fund expensive social programs such a national daycare initiative, climate change measures and the Kelowna Accord on aboriginal development. John McCallum, the Liberal finance critic, grumpily affirmed that his party would not pay down the full $10-billion in debt if was in power, preferring to restrict repayment to $3-billion. “But we’re not the government,” he said.

Web gives banks new competition - The Star

There’s a new breed of “loan arrangers” promising fast cash to the bad credit crowd. Person-to-person online lending is enjoying surging popularity at a time when the subprime mortgage crisis is prompting Americans to seek out so-called alternative loans. Also known as peer-to-peer lending or social lending, the websites allow users to bypass banks to access personal loans from other individuals that range between $1,000 and $25,000. Proponents say the loans are legally binding contracts with “competitive” interest rates. Rates vary widely and can be affected by your credit rating.The websites essentially function like online marketplaces. A borrower posts a loan request outlining the sum being sought, credit score data and the maximum interest rate he or she is willing to pay.

Real Estate News

Calgary has lowest downtown office vacancy in Canada - Calgary Harald

CALGARY - Calgary leads the country with the lowest downtown office vacancy rate at 3.2 per cent despite a steady climb in that number over the past year. A downtown office report by Barclay Street Real Estate Ltd., says the vacancy rate is expected to moderately rise in 2008 to the 4.5 per cent to 4.8 per cent level as sublease space continues to rise. The report by the company’s research analyst Michelle Pink says at the end of the fourth quarter of 2007 there was just over one million square feet of space available of which 353,314 or 33 per cent was being marketed as sublease space. The downtown office vacancy rate has increased throughout the year, said Tanya Colasurdo, associate broker and principal with Barclay Street. The record low of 0.4 per cent was registered about a year and a half ago.

Bought at the Peak of the Market? Simple Tips to Protect Your Investment - Edmonton Real Estate Blog

“I am sure that I am not the only one out there, who bought my house at the May 2007 ‘peak’. I am not a property investor, just a home owner. I am familiar with what house prices have done since then, but the question I really have is this: What does it mean to me? I am a working professional, and I can predict that sometime in the next 3-8 years I may be required to move with my job. What should my home ownership strategy be for the short/long term? What sorts of concerns should I have about my investment? Could you please point me in the right direction?”

What if you could choose your own interest rates?

What if you could lend money to thousands of people just like you, find out their personal stories and earn a nice return?

This is the new phenomenon of the online revolution. Straight from FaceBook and Myspace comes the new way to borrow and lend money – social lending.

The concept is straight forward. A number of companies(below) act as a middleman, giving you a platform to borrow and lend to individuals, bypassing big banks.

Everything is done online and interest rates are set by people, not banks. It is completely human driven concept and it is picking up pace every month.

If You Want to Borrow

Lets take Prosper for example – US social lending network.

If you need some cash for whatever reason, you can create an account as a borrower. Prosper will need to get your credit report and gather some data about you. This may include income, status, assets, etc – regular lending drill.

Once Data is there you can post a request. Specify the amount you want to borrow and interest rates you want to pay. For example:

I need $3000 and I am willing to pay 6% interest rate.

You then tell your little story, such as who you are and why you need the money.

Once all posted, lenders come in and bid on your loan. Kind of like eBay. Suppose lender likes the interest rate you offered, okay with your story and credit rating. He can bid $100 on you, specifying the interest rate he wants to receive. Another lender can come in and bid a $100 as well, specifying the interest rates that he wants.

The interest rate that matches your request closely is the one to win. As enough lenders bid(bids can be as little as $50), you get your loan.

Interest vary with the minimum of about 6%.

To minimize risks, you get funded by a numerous lenders.

If You Want to Lend

If you want to become a lender and make some profits, social lending is a way to go. To secure lenders, social networks allow you to spread the investments to numerous borrowers. So if you have $4000 to lend, you can sponsor 40 people, $100 each, or 80 people at $50 each. The interest rates will vary, since people have their own criteria, but returns will definitely be there, as the minimum is usually 6-9%

With Prosper(social lending company) you must find borrowers yourself, while Zopa(UK) does it all automatically. All you need is post desired interest rate bracket and the amount you’re willing to lend.

What is the Job of Social Lending Sites?

The job of social lending sites is to provide the actual platform for lending. They are the middle man that care of:

- Collections

- Transactions

- Paperwork

- Credit rating assessment

- Credit reporting, in case borrower does not pay.

As you have guessed, they charge commissions for such services. It differs, but the average is 0.5 – 2% of the total loan amount for both borrowers and lenders.

Current borrowing limit is $20.000 - $25.000.

What About Fraud?

That is the first question that comes to mind for most people. The risk of fraud is there, but it is not as scary as some make it appear.

First of all, everything is done anonymously. No one ever knows who you are except the social lending company. It keeps all the info about you and does not share it with anyone.

On the surface, all we see is:

Jerryxxx2000 borrowed total $4500 from 25 lenders(nicknames of those lenders).

As a lender you do not lend to one individual, but to many, spreading finances evenly. In case someone doesn’t pay, you don’t lose big.

The danger is in identify theft. Number of spammers hackers have developed sophisticated networks to fish for unwary internet users and get their personal information, including social security, address, full name, secret questions, etc.

It is possible that scammers would borrow money without paying back under someone else’s name. The risks are for lenders, while borrowers are safe.

Other then fake ID, social lending sites seem quite safe. Scammers are quite ingenious so it is possible they may come up with something else, specifically for social lending, but for now it seems pretty quiet.

Social Lending Sites

Unfortunately social lending is not available in Canada yet, but here is a list of other countries.

UK

Zopa - Zopa is the first social lending site in the world, originated in UK. It has been long copied, but credit goes to Zopa.

Virgin Money - UK

US

Virgin Money - US

Zopa - US

Prosper - US

Lending Club - US

Globe Funder - US

Loanio - US(under development)

India

Globe Funder - India

Australia

Virgin Money - Australia

South Africa

Virgin Money - South Africa

Italy

Zopa - Italy

Germany

Smava - Germany

New Zealand

Booper - New Zealand

—-

Kiva - Third World

Kiva is a one of kind, no profit lending site that gives you a chance of sponsoring businesses in the third world. The concept is absolutely the same and you do get returns.

Mortgage News

Canada’s Dollar Rises as Stock Gains Boost Currency’s Outlook - Bloomberg

Canada’s dollar gained as rising stock prices encouraged traders to buy higher-returning assets. The Canadian dollar also rose against Japanese yen, by 0.7 percent, and the Swiss franc. Stocks advanced worldwide as Warren Buffett offered to take on liabilities of some bond insurers and investors speculated a plan to help U.S. homeowners with mortgages will shore up the economy. Canada ships about 80 percent of its exports to the U.S. “Investors are coming back to riskier positions,” said Sophia Hardy, a currency strategist at UBS AG in Stamford, Connecticut. “In that scenario, high-yielding and pro-growth currencies will usually outperform.” Canada’s currency, known as the loonie after the image of the bird on its one-dollar coin, gained 0.3 percent to 99.87 Canadian cents per U.S. dollar at 1:32 p.m. in Toronto. It was C$1.0016 yesterday. One Canadian dollar buys $1.0013.

China, Biggest US Investor - Herald Tribune

It is now mostly made up of European countries, whose multinational corporations have been taking stakes in U.S. companies for decades. But Asian and Middle Eastern nations — riding high on state-run funds flush with oil dollars and trade surpluses — are rising through the ranks. The only barrier they face is political backlash in Washington, where scrutiny is mounting from lawmakers about the potential security risks posed by foreign investments coming from state-owned companies and so-called sovereign wealth funds, particularly China’s.

 

Real Estate News

New home price growth cools in Calgary - Calgary Herald

The rate of price growth for new homes in the Calgary area continues to slow down from the lofty peak it hit in 2006, according to Statistics Canada’s New Housing Price Index released Monday. In 2006, the rate of new home price growth in the Calgary region peaked with a stunning 60.6 per cent year-over-year hike in August. During the new home construction peak, the industry was selling beyond its capacity to build and the industry’s costs also skyrocketed, said Deep Shergill, president of the Canadian Home Builders’ Association for the Calgary region.

Real estate affordability to improve - Real Estate Intelligence

Housing affordability is likely to improve this year as house-price growth eases and falling interest rates make mortgages cheaper, economists say. Michael Gregory, senior economist at BMO Capital Markets, said housing affordability was becoming an increasingly important issue in some Canadian cities, with house prices jumping at “unsustainable” levels amid a surge in population-driven demand, a strong jobs market and relatively low mortgage costs. In Saskatoon, the cost of a new house skyrocketed an amazing 45.1% in 2007, while prices were up 25.9% in Regina and 21.5% in Edmonton, Statistics Canada figures showed yesterday.

Council considers condo fee - The StarPhoenix

City council’s wrestling match with condominium conversions continues as administrators propose a plan they say could help keep a supply of rental units available in the city.

According to a proposal that went before city council’s executive committee Monday, administrators suggest the city refuse to approve applications to convert apartments to condominiums when Saskatoon’s rental vacancy rate dips below 1.5 per cent. When the vacancy rate hovers between 1.5 and three per cent, investors should pay a fee — $10,000 per unit was suggested — to put in a city fund for affordable housing, they say.

How Does a Home Equity Loan Work

What’s a home equity, how does home equity loan work? What are the prons and cons? What is HELOC and should you consider home equity loan? This article will explain what it is and how does a home equity loan work.

Home Equity Loan(or home equity mortgage) is debt against the equity of your home.

What is Home Equity?

Home equity is the value or the portion of the property that you own. Let me give you an example.

You want to buy a house for $200.000 and have $30.000 down payment. You arranged with your bank for a $170.000 mortgage with $30.000 to buy it. In that case:

House Value: $200.000
Banks Equity: $170.000
Your Home Equity: $30.000

Home equity is the amount that you own in your house.

Let’s say after 10 years of living in that house you paid out $90.000 on the mortgage. Not only you paid out $80.000, the house value has gone up by $50.000! Instead of $200.000 your house now costs $250.000. In that case the calculations are:

House Value: $250.000
Your Home Equity: $30.000(down payment) + $80.000(paid over 10 years) = $110.000

But since the value of your house has gone up by $50.000, you can add that $50.000 on top!

So the new calculation is.

House Value: $250.000
Bank Equity: $90.000(since you pay mortgage over time, bank equity goes down)
Your Home Equity: $110.000 + $50.000 = $160.000

Home equity is the amount you own in your house. Your home equity may go up if the price of your house goes up.

How Does a Home Equity Loan Work?

Let’s take previous example again. The price of your home went up by $50.000 in 10 years, meaning that your home equity grew by $50.000 in 10 years(the total amount you own).

Suppose you want some cash all of a sudden. Your kids go to college, you feel like doing renovation, medical bills mount up or you simply feel like taking a hot vacation or driving a sexy car.

You can take a home equity loan, against the equity in your house. As we know, your house value has gone up by $50.000, so you can go to the bank and say:

I want $50.000 grand right now. My house value has gone up by $50.000, and I own more than that in my house, can you give me some cash?

The bank says yes, and gives you $50.000 cash. In exchange you sign papers, guaranteeing to pay off that $50.000 over… lets say 10 years. If you fail to pay it out, bank comes in, sells your home and gets back the $50.000 it lended.

Home equity loan is a second mortgage against your property. Your guarantee to pay it out and collateral is your equity that you own in your house.

The two Types of Home Equity Loans and Interest Rates on Home Equity Mortgages

There are two types of home equity loans.

Home Equity Loan

It is like a regular mortgage. You borrow a big sum of money agaist the equity in your home(like we discussed above) and pay it back over time.

The interest rates are fixed. So if you borrowed at 6%, it will stay at 6% until you pay it out.

Home equity mortgage is good for people who need money for one big occasion, like a wedding, education, renovation etc.

Home Equity Line of Credit or HELOC.

Another type of Home Equity Loan is called home equity line of credit or HELOC for short.

It works just like a credit line. Imagine a line of credit, lets say for $60.000. You have it and can take as much money as you want, up to $60.000, at any time. You want a $100 for a good dinner? Go ahead and take it from the credit line. Need $20.000 for a new car? Go ahead and borrow it. There is no limit(up to $60.000) and you can pay it back any time, partially or in full.

The home equity line of credit is absolutely the same, the difference being is that you borrow against the equity in your home. So suppose your equity is $100.000, you can get a HELOC for $100.000. and spend as much as you want, up to a $100.000.

When you get home equity line of credit, lenders give you a special type of card that you can use. Kind of like a credit card.

HELOC allows you to borrow as much as you need when you need it. There is a set date by which you should pay out whatever the balance you owe. If you fail, lender will take your property away.

Interest rates are variable(adjustable), meaning that you pay different rates every time market conditions change. The rates may go up and down, regardless – you always pay the market price.

Pros and Cons Of Home Equity Mortgages

Pros

- You deduct taxes for home equity loans of up to $100.000
- Can be used for variety of purposes: buying new items, medical bills, education, renovation, debt consolidation, emergencies, vacations
- Lower interest rates than credit cards and car loans

Cons

- Can be risky for people who love to spend too much
- If you don’t pay you lose your house
- If the home market value goes down you end up owing more than the value of your home
- Home equity lines has variable rates, meaning that monthly payments go up and down

 

Mortgage News

Don’t forget your RRSP - Leader Post

An RRSP is a personal savings plan that allows you to save for the future on a tax-sheltered basis and provide you with income upon your retirement. A self-directed RRSP can contain a variety of investments, including saving deposits, treasury bills, guaranteed investment certificates (GICs), Canada Savings Bonds, other government or corporate bonds or coupons, mutual funds or individual equities, even your personal mortgage.

Time to fine-tune mortgage, Variable Rate Mortgages - Business

MANY homeowners still remember the early 1980s when mortgage rates were in the 20 per cent range and people were actually locking in, fearing they were about to go even higher. That partially explains why 72 per cent of homeowners have a fixed-rate mortgage, rather than variable. Variable-rate mortgages have been around for more than a decade, but have only started catching on in the past five years, says Gary Siegle, a mortgage broker with Invis.”Variable-rate mortgages typically become popular when the view is that rates are going to drop because people then take immediate advantage of a decrease in rates.”

Real Estate News

Real estate affordability to improve, experts say - Financial Post

Housing affordability is likely to improve this year as house price growth eases and falling interest rates make mortgages cheaper, economists say. Michael Gregory, senior economist at BMO Capital Markets said housing affordability was becoming an increasingly important issue in some Canadian cities, with house prices jumping at “unsustainable” levels amid a surge in population-driven demand, a strong jobs market and relatively low mortgage costs.

Groups oppose new real estate procedures and fees - Financial Post

We have had a few blogs about Law Society of Upper Canada benchers, those elected to oversee the profession, rubber-stamping new real estate procedures and insurance fees for Ontario. I appreciate that benchers want to hurry off to a free lunch with wine, but they were elected, and are being paid a significant stipend, to do more than simply say ‘Yeah’ to every staff proposal put before them.

Saskatoon sees home prices surge 45% over last year - Globe and Mail

A steady housing market in Western Canada – and sizzling price increases in Saskatoon – boosted the cost of new homes last year, with home builders’ selling prices increasing 6.2 per cent between December, 2006 and December, 2007, Statistics Canada reported Monday. “The year-over-year growth rate in new housing prices accelerated for the first time in 16 months in December, mainly the result of strength in the housing market in the Prairie provinces,” according to the Statscan report.

Still, “this is down from the double-digit increases observed over the latter half of 2006 and the early part of 2007,” noted Royal Bank economist Rishi Sondhi in a note to clients.

Mortgage Refinance Tutorial

The tutorial is for those looking to refinance and save money as a result. If you have a mortgage and want to save on monthly paymenta and in the long run, please read the mortgage refinance tutorial.

It is important to note from the start – you will not save any money if you are refinancing at higher interest rate. It is not possible, regardless of what brokers and lenders are telling you. They are either fooling themselves (not likely) or trying to fool you. If the figures offered seem lower than what you’re paying lenders:

- Calculate mortgage with increased term, which does not save you money, since you pay more in the long run. If you do not have many more years, it will extend mortgage life substantially.

- Use Bi-weekly schedule, with which you pay “extra month” per year. You can switch to bi-weekly keeping the same rate and still save in the long run, so increased rates are not necessary.

Beware. If brokers or lenders offer higher refinance rates that of your current rates, they are not telling you the whole story or counting on ignorance.

How do you save money with refinance tutorial.

Saving money with mortgage refinance means that you will save money over the life of a new loan. The factors that need to be considered:

- Closing costs for a new mortgage, including – settlement costs, points(commissions), taxes.

- Monthly payments of both interest and principal.

- Reduced interest rates.

There must be a visible break even point, that is – in how long will the cost of a new mortgage pay off? Just like getting first mortgage, mortgage refinance involves closing costs and other fees that must be paid. The break even point is the point in time when you recover money paid for closing. For example if the new rate is 5%, while the closing costs are $2000 - how long will it take to recover $2000?

The period may be one year or longer. Mortgage refinance is aimed at saving in the long run, while reducing monthly interest payments.

If mortgage does not include refinance costs, lender will lock you into higher interest rates.

In the long term you’re better off paying for closing costs yourself, since you can save more money. If you have cash – do it.

Mortgage News

Levy is now a fact of life - The Globe and Mail

Like many people who were house-hunting as 2008 approached, Sherille Layton and her husband, Edward, wanted to stay ahead of Toronto’s new land-transfer tax. They wound up signing an agreement to buy a North Toronto home, closed the deal, and even moved in — all before Christmas. As an agent with Bosley Real Estate Ltd., Ms. Layton was well aware that had they waited until January to buy the house on Erskine Avenue, and pushed the closing date to Feb. 1 or after, they would have had to pay the new tax on top of a selling price of more than $800,000, and the provincial land transfer tax.

She figures they saved a cool $13,000 thanks to the good timing.

Real Estate News

HOUSING: CHMC predicts starts to fall slightly, average house price to rise 5.2% in 2008 - Alberta Index

(AlbertaIndex, February 7, Thursday) — Housing starts are expected to decline this year after edging up 0.4 percent to 228,343 units in 2007, said Canada Mortgage and Housing Corporation (CHMC). In its first quarter Housing Market Outlook report, CHMC said that residential construction will decline to about 211,700 units in 2008 as a result of higher mortgage carrying costs. Nevertheless, it said Canada’s housing market remains strong and 2008 will mark the seventh consecutive year in which housing starts exceed 200,000 units.

“Despite some global financial instability with regards to the US housing market, Canada continues to experience robust employment levels, ongoing income gains and low mortgage rates,” said Bob Dugan, Chief Economist for CMHC.

Single-family housing starts down, multi-unit way up in Calgary - Calgary Herald

New construction for single-family homes in January plunged by 40 per cent compared with a year ago in the Calgary Census Metropolitan Area but the multi-family market rose by 78.5 per cent, according to data released today by Canada Mortgage and Housing Corporation. The cold weather during the month contributed to the reduction in construction activity for the single-detached market, bringing it to the lowest January monthly level since 1996. Increased competition from resale homes will also have a dampening effect on the demand for new single-detached homes through much of 2008, said the CMHC.

U.S. real estate bust a boom for Canadians - Business Edge

With real estate costs soaring in many parts of Canada, some property buyers are looking south of the border to a market soured by the sub-prime mortgage crisis. If you’re looking for waterfront property in Canada’s retirement mecca of Victoria it’ll cost you. The average price for a single-family home in Victoria was well over half a million dollars in November - with waterfront properties on MLS at least double that. Even a one-bedroom condo with ocean views will fetch more than $400,000 - more than the average price for a single-family home in most other parts of the country. Fancy a second bedroom? You’ll have to come up with more than three-quarters of a million.

While sky-rocketing real estate costs may be pricing properties out of the reach of many potential home buyers, it’s a different story in the U.S.

Monthly mortgage and interest payments are affected by the amount you borrowed. The amount you can borrow and interest rates are affected by a number of factors, one which is mortgage credit score.

Mortgage lenders will need to look at the following:

Credit History Report

- Credit Usage

- Payment History

- Types of credits(cards, car loans, mortgages)

- Number of time applied

- Length of the Overall Credit history.

Late payments are usually the biggest factors that affect the score. Lenders want to see that as a borrower you are able to pay monthly dues on time and in full. If credit history is not in its best condition, making payments on time is the only viable way to fix it.

The type of credit you had has an impact as well. The bigger the credit the better. For example perfect car loan payment history is more weighty than the a $1000 credit card, though both have a huge impact.

In mortgage credit score, having low balances across outstanding debts is beneficial. The lower your balances the better. Credit usage shows your spending habits. If the cards are maxed out, borrower falls into “risky” category.

Credit Score Report

Calculates a number based on credit history report.

Credit score is also known as the FICO score(Fair Isaac Corp). It ranges from 300 to 900. The higher the better, with the minimum mortgage approval score ranging at 600.

How can I improve my mortgage credit score?

It is desired that you have the best possible mortgage credit score before applying for a mortgage, since if lenders decline, it will go on the report as well. One of the best way as mentioned earlier is to pay all the bills on time including: credit cards, phone, internet, rent, mortgage, car, etc.. Of course not everyone is in a position and sometimes circumstances might dictate the rules.

Before applying for a mortgage, let a professional ensure that you have the most up to date mortgage credit score.

More Factors that affect the credit report.

- Bankruptcies

- Postponed Payments

- Recent Credit Inquiries

- Numerous Credit Inquiries

- Lawsuits

- Too Many Accounts

- Short Credit History

- Making Major Purchases While Buying Property

- Taxes

- No Recent Credit Card Usage

Though Credit Score is one of the most important factors is the underwriting(approval) process, it is not the most critical one. Other factors that can overweight mortgage credit score: low debt to income ratio, substantial savings, large down payment

On top of mortgage credit history and score, lenders require additional information such as:

- Assets(car, house, business)

- Current Status(own/rent)

- Past loans

- Income

- Employer, number of years employed

- Type of property you want buy(house, condo, townhouse)

- Martial Status

Once all is at hand, including mortgage credit score, application goes through what is known as the Automated Underwriting System.

It automatically assesses whether the applicant is eligible for a mortgage.

A number of days down the road you get a call from the lender, notifying you of the application process.

Mortgage News

Money $marts: Fed rate cuts: the good, the bad and the ugly - Collier Citizen

The Federal Reserve Bank (the Fed) has again reduced the federal funds interest rate; this time by half a percentage point (50 “basis points”) to 3.00% (125 basis points less than a month ago). Many banks follow the Fed with reductions in base rates (e.g. “prime”) used to price products. Here is some potential fallout from the Fed’s action. The good: some credit card interest rates are linked to the “prime” rate (usually set at the ff rate plus three percentage points). Thus, if you have a credit card with a “prime plus” interest rate, your debt carrying cost goes down. “How much” you may ask? Well 125 basis points are worth $12.50 a year on a $1,000 outstanding balance. Hey, that’s almost two extra six-packs or one beer a month. The higher the carried credit card balance, the more the savings. By the way, fixed rate credit cards are not affected.

How much did Canadian Tire Make? You shop there? - Canadian Press

Retailer Canadian Tire Corp. (TSX:CTC) reported Thursday a 15.5 per cent increase in fourth-quarter to $125.1 million, as total retail sales across its hardware, clothing and petroleum outlets rose 3.1 per cent to $3 billion. On reporting the positive results, the company raised its quarterly dividend for 2008 13.5 per cent to 21 cents per share. Quarterly net earnings per share were $1.53, compared with $108.3 million or $1.32 in the prior-year period, and well above a consensus forecast of $1.35 per share according to analysts polled by Thomson Financial.

Real Estate News

New rules for home inspectors - Straight.com

Until recently, Public Safety Minister and Solicitor General John Les didn’t appear to be a great fan of the idea of regulating home inspectors. When NDP housing critic Diane Thorne noted during question period at the legislative assembly that there are no provincial certification requirements, the B.C. Liberal minister scoffed at the suggestion to regulate the profession. “But even if they were licensed and regulated, there is nothing to indicate that the performance of the industry would thereby improve,” Les said, according to a November 23, 2006, Hansard transcript. “There are many licensed and heavily regulated industries where there are still unfortunate incidents.” Thorne, MLA for Coquitlam-Maillardville, told the Georgia Straight she had raised this issue several times before the legislature and got the same reaction from Les.

Saskatchewan Housing Market to Lead the Nation in 2008 - Canada News Wire

“Fuelled by one of the strongest economies in Canada, Saskatchewan housing markets can look forward to another exceptional performance this year,” said Richard Corriveau, Regional Economist for CMHC. “Resale transactions are expected to set a new record in 2008, while new home starts will be among the highest in 25 years. This rapid pace of activity will continue to exert upward pressure on prices. Price growth in the province’s new and resale markets should lead the nation over the next few years.” Corriveau cautions that “price escalation will take its toll on demand in 2009, leading to a slight decline in starts and sales.”

Alberta, Ontario push building permits to record - The Calgary Herald

Cross-country strength led by substantial additions in Alberta and Ontario pushed the value of Canadian construction projects to another record in 2007 — and the strongest growth since 2002 — but the pace of expansion appears to be slowing. Statistics Canada said Wednesday that a record $74.3 billion of building permits were issued across the country in 2007, an $8 billion, or 12.1 per cent, gain from 2006. About $1.7 billion of the gain came in Alberta, which saw 12.8 per cent growth, while Ontario saw a $3.4-billion increase, a 14.7 per cent gain.

Condo policy in place print this article - Daily Herald

Developers wishing to convert a building into a condominium have a new policy to follow from the city. The new policy was passed by city council on Jan. 28. “It was important that a balance between the interests of existing tenants and the interest of the developers be accomplished,” said Daria McDonald, city planner. A growing number of condo-conversion inquiries submitted to council provided impetus for the policy, said McDonald. “The intention of the policy is to interpret and apply the condominium property act,” said McDonald. When a condo conversion comes before council, the developer must provide tenants with written notice 30 days prior to the meeting.

Existing Ottawa house sales fall 14.4 per cent - Ottawa Citizen

Sales of Ottawa existing housing fell 14.4 per cent in January to 654 units compared to a year ago, the Ottawa Real Estate Board said. The board said it is expecting a slowdown in line with national trends after a strong 2007 but noted sales were slightly ahead of January 2006 sales which started a strong sales year. Sales of bungalows, two-storey houses and condominiums apartments fell 21 per cent, 17 per cent and 16 per cent respectively. Sales of condo townhouses were flat. The average price rose nine per cent to $284,340 led by a 20 per cent rise in condo apartments and a 10 per cent gain for bungalows.\

Tide of homeless cats flooding Victoria - Globe and Mail

Volunteers who rescue abandoned cats say an explosion of homeless felines in 2007 was fed by Victoria’s low vacancy rate and high housing costs. “I’ve never seen it this bad. People just don’t have a lot of options and can’t find a home to live with their pets so, sadly, I think they are just dumped,” said Pamela Saddler, vice-president of the Greater Victoria Animals’ Crusaders. “I get calls all the time from people saying their neighbour has moved and left behind their cats to fend for themselves. Victoria is flooded with cats, and Animals’ Crusaders alone has over 85 cats looking for a forever home.”

Mortgage Underwriting

Mortgage underwriting is the process that determines whether you will get a mortgage. There are many stages of underwriting and many factors that affect it. This article will teach you what lenders look at and some tips that will help you get through mortgage underwriting.

Underwriting Step 1: Information Verification

Due to the number of people making false claims on their applications, most lenders need to verify information you provide. This includes:

• Calling your employer
• Checkingyour current property status
• Analyzing Credit Score

It is in your best interest to include valid information, since false claims may go on the record, making it harder in the long run. If you get declined, shop a couple more lenders, search online.

Underwriting Step 2: Appraisal

Lenders want to know that the property being bought is worth the asking price. Independent appraiser will look at the property, estimate the value and report back to the lender. This is done ensure property is in the condition to be sold at a later date, estimate future pricing and to prevent mortgage fraud. As funny as it sounds, a number of people scammed TD Bank for millions by buying parking spaces, disguised as condos.

Underwriting Step 3: Title Search

Title refers to the ownership. Lenders want to know they’re lending money on a property that does not have any other owners. This includes relatives, spouse, kids etc., as it can cause problems in the future. Image a relative showing up, saying: “I own this place.” Not a good situation, hence lenders back themselves up.

Underwriting Step 4: Flood Certification

What if the lake strikes? An Ocean? Property will be damaged. If your area poses risk of being flooded, lenders will require Flood Insurance.

Underwriting Step 5: Home inspection

In this mortgage underwriting stage independent inspectors look at structural integrity, base, foundation, walls, mechanics, plumbing, electricity. It may be necessary to repair your house to get the mortgage. If lenders find a flaw they are less likely to give you the mortgage. Home inspection is billed to the borrower and is around $300-600

Mortgage Underwriting Tips

To ensure you stand the best chance of getting through mortgage underwriting, try a couple of tips:

• Give lenders complete documentation
• Answer quickly to all the requests
• Check regularly, ask on the status of the underwriting
• State the truth on mortgage application
• Keep all the record of conversations to insure yourself, just in case

Good luck in your mortgage underwriting process.

 

Mortgage News

Is Now a Good Time to Choose a Variable Rate Mortgage? - Move Smartly

With all the news about interest rate cuts recently, many home buyers are wondering if now is the right time to go with a variable rate mortgage. The Globe’s Rob Carrick advises that variable is the way to go right now. There are a couple of reasons why Carrick recommends a variable rate mortgage. Firstly, short term interest rates are expected to drop this year. The economic slowdown in the US has already led to drastic interest rate cuts south of the border, and the Bank of Canada is expected to continue trimming rates this year. This means that variable rate mortgages, which are tied to the Bank of Canada rate, are also expected to drop.

If US recession hits, dollar and Wall St may fare best - Guardian Unlimited

Sticking with equities and buying dollars might be the best way to profit if a U.S. economic recession materialises, as investors may have already discounted the gloomiest scenario for the world’s largest economy. As the chances of a U.S. recession, typically defined as two quarters of economic contraction, increased late last year, investors executed classic investment strategies associated with recession risks — selling stocks and buying government bonds. World stocks, measured by MSCI <.MIWD00000PUS>, are down 15 percent from November’s record highs. the S&P 500 main U.S. stock index <.SPX> shed more than 11 percent from all-time highs while benchmark U.S. yields have hit 4-1/2 year lows.

Affordable housing program helped 27 families - Canoe.ca

On April 29, 2005, the federal and provincial governments signed a new Canada-Ontario Affordable Housing Agreement. Under this plan, the federal, provincial and municipal governments invest millions through the Canada-Ontario Affordable Housing Program (AHP). In total, the program will help 20,000 Ontario households by 2010. AHP has committed more than $28 million to make homeownership affordable for low and moderate-income households. Applicants must be renting, be at least 18 years of age, have a combined household income at or below the maximum eligible income limit of $55,9000 and have access to mortgage financing.

Loonie dives by more than a cent - The Star

The Canadian dollar fell more than a full cent today against a strengthening U.S. currency, amid lower commodity prices and another big drop on the major North American stock markets. The loonie finished the session down 1.38 cents to close at 99.29 cents US. The American dollar also moved up against most major currencies. Oil prices, which had supported the Canadian currency, were down sharply on worries about lower demand in a weaker U.S. economy. On the New York Mercantile Exchange, crude closed at US$88.41 a barrel, down $1.61.

Real Estate News

Real Estate In Victoria BC - Power Smart - Real Estate Info

Now that you have purchased your own Real Estate here in Victoria, there are ways to save money on heating costs and electricity. A program you should be aware of is the Power Smart program.Over the years, Power Smart has become a household name, but many British Columbians don’t know Power Smart’s legacy stretches back almost two decades. In 1989 the province experienced an increase in electricity demand and a limited supply of electricity. This led to the launch of Power Smart, which encompassed several programs across all market sectors. By the mid-1990s the Power Smart brand enjoyed a 95 per cent public awareness level and strong public support.

Mortgage News

Homeowners benefit from mortgage renewal - BC Local News

Is your mortgage coming up for renewal? Don’t be too hasty in just signing the form and sending it back to the lender. More than 70 per cent of mortgage holders do just that. And what is the usual result? A higher rate and a mortgage product that might not be best suited to your needs. Consider renewing/switching your mortgage to another lender who will most often give you a better rate. Most lenders now offer “no cost or low cost switches” and it’s a smart way to reduce your interest costs.
Most people are unaware of the legal effect of switching lenders.

Halifax housing starts will be stable: CMHC - Halifax News

Housing starts in Halifax are expected to remain relatively flat in 2008 and 2009, according to a forecast from Canada Mortgage and Housing Corp. CMHC released housing market outlook data yesterday that projects starts for the Halifax census metropolitan area will go from 2,489 in 2007 to 2,500 this year and 2,550 in 2009. MLS sales are forecasted to dip from 6,942 to 6,400 during the same time period, while the average MLS prices are expected to climb from $215,645 to $230,000. Overall, CMHC is predicting housing starts will decline slightly in 2008 for Atlantic Canada. The strongest market for growth this year will be Newfoundland and Labrador.
The price of existing homes continues to close the gap with new home prices, CMHC says, but there is still a good selection of inventory available in the existing market. CMHC is holding its annual housing outlook conference tomorrow in Halifax.

Loonie dives by more than a cent - THE CANADIAN PRESS

The Canadian dollar fell more than a full cent today against a strengthening U.S. currency, amid lower commodity prices and another big drop on the major North American stock markets. The loonie finished the session down 1.38 cents to close at 99.29 cents US. The American dollar also moved up against most major currencies. Oil prices, which had supported the Canadian currency, were down sharply on worries about lower demand in a weaker U.S. economy. On the New York Mercantile Exchange, crude closed at US$88.41 a barrel, down $1.61.

Real Estate News

Multiple Representation Or Dual Agency by another name - Real Estate Intelligence

Whether you are a home buyer or seller, it is important for you to understand the legal nature of the agency relationship you have with your agent. Your agent must act in your best interest while representing you in a real estate transaction. This gets complicated if you find yourself in a “multiple representation” situation. What is dual agency? Basically, it means that a real estate agent is representing both the buyer and seller in a real estate transaction, which is legal in Ontario but … A real estate agent who is working as a dual agent could easily find herself in a conflict of interest by trying to represent the best interests of both parties.

CMHC Housing Market Outlook - Real Estate Intelligence

Housing starts will moderate this year to 209,500 units after reaching 227,395 units in 2006, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook report. Although residential construction will decline, 2007 marked the sixth consecutive year in which housing starts exceed 200,000 units. Starts will ease further to 195,500 units in 2008. “Construction activity will continue to moderate as demand for home ownership moves toward more sustainable levels,” said Bob Dugan, Chief Economist at CMHC. “Most of the pent-up demand that built up during the 1990s has been absorbed, and higher mortgage carrying costs due to continued strong price growth and modest increases in mortgage rates will contribute to the slower pace of new home construction both this year and next.”

Mortgage News

CMHC predicts Manitoba will lead housing growth - Winnipeg Free Press

An influx of newcomers to the province will keep Manitoba’s housing market cooking for the next two years, according to the latest housing market forecast from Canada Mortgage and Housing Corporation. The federal agency predicts Manitoba will be the only province in the country to record a increase in housing starts and sales of existing homes in 2008 and 2009. It forecasts 5,800 new starts for this year - up from 5,738 in 2007 - and 5,900 in 2009. “This (5,900) will represent the highest total for Manitoba’s home builders since 1987,” CMHC regional economist Richard Corriveau said, adding “a strong migratory inflow” will be a major contributing factor to the higher demand for new homes.

Heading higher: real estate prices going up in 2008 - The Star Phoenix

While temperatures remain low across Saskatchewan, one forecast is putting the heat on prospective homebuyers. According to a Canada Mortgage and Housing Corporation (CMHC) report released Monday, the average price of a resale home in the province is set to jump 26 per cent to $220,000 this year and a further eight per cent to $238,000 in 2009. Last year, the average resale price jumped 32 per cent to $174,000 on demand and investment dollars, according to CMHC regional economist Richard Corriveau.

Canada Mortgage and Housing Corporation: Residential Construction Above Average in 2008 and 2009 - Market Wire

Housing starts in British Columbia will be above average, but move lower in 2008 and 2009 as economic and job growth slow, according the latest forecast from the Canada Mortgage and Housing Corporation (CMHC). Although both multiple-family and single-family housing starts will decline in 2008, the overall level of starts will remain above the 10-year average. “Tight labour markets will keep wages and incomes rising, and people moving to the province,” noted Carol Frketich, CMHC’s Regional Economist for British Columbia. “Job gains and the increase in population will fuel demand for both homeownership and rental accommodation.”

Fall in swap rates yet to benefit borrowers - Stuff

Businesses and households aren’t getting the benefit of falling swap rates, which should lead to lower fixed interest lending, say banking experts, analysts and economists. Swap rates the cost to the bank of lending money at a fixed rate continue to fall as central banks in the United States, Britain, Europe and Canada ease monetary policy, resulting in cheaper fixed-rate lending globally.

Real Estate News

Toronto welcomes the world - Real Estate Itelligence

Toronto has become a city built in the image of its own people, fed by the many influences of its ever-changing human fabric, one that is constantly unfolding and alive with potential and energy. Torontonians display a level of openness unlikely in any city, let alone a city of Toronto’s size and magnitude. Toronto is metropolitan, yet it feels as intimate as a village. Its welcoming spirit has attracted millions of people from all corners of the world, making up a deep and culturally rich human mosaic. Toronto doesn’t have a Chinatown, it has three of them. It doesn’t just have a Caribbean festival, it has the largest one outside of the Caribbean. Toronto isn’t just diverse, it’s the most diverse city in the world. Toronto is a culture of cultures, a place of infinite opportunities where everybody is appreciated for how they stand out, not for how they fit in. Torontonians don’t look to settle their differences, they are inspired by them. Torontonians celebrate humanity.

A Guide to Buying Real Estate in Alberta, Part 5: Down Payment - Edmonton Real Estate Blog

Mortgages and down payments in Canada used to be very simple: there were about 6 different mortgages to choose from, and a clear “minimum” when it came to down payments. Today, there are hundreds of mortgages to choose from and a down payment may not even be required. If you put less than 20% down on the purchase of a home, mortgage insurance will be required. The good thing is the mortgage insurance is just tacked on to your mortgage, the bad thing is you might not even notice that it is there! As you learned in Part 4 of this series, any deposit you make on the home you purchase counts towards your down payment.

Mortgage News

Contribute to my RRSP or pay down the mortgage? - Morning Star

Retirement savers who are also mortgage-holding homeowners are frequently torn as to what to do at RRSP contribution time. Should they pay down their mortgage, reducing their interest costs? Or should they put more money in their RRSP, increasing the value of their retirement assets that will enjoy tax-deferred growth? Mortgage paydowns and RRSP contributions are not mutually exclusive when it comes to retirement income planning. Among homeowners who haven’t reached retirement, one in five plan to tap into home equity to supplement their retirement income, according to a November 2007 poll by Investors Group. Selling the current home and moving into a smaller one, using a home-equity line of credit and taking out a reverse mortgage are among the possible strategies.

Carney May Resist Fed-Like Rate Cuts to Curb Canada’s Inflation - Bloomberg

Mark Carney, the former Goldman Sachs Group Inc. investment banker who takes over the Bank of Canada today, may resist matching Fed Chairman Ben S. Bernanke’s rapid interest-rate cuts in a bid to secure his inflation credentials.
Carney, 42, starts with the widest Canada-U.S. rate differential since June 2004 after Bernanke cut borrowing costs by 1.25 percentage points to 3 percent in less than two weeks. Canada lowered its benchmark rate a quarter point Jan. 22 to 4 percent.

UM Financial supports CMHC study on Islamic Mortgages - Exchange Morning Post

The U.S. dollar battled back against the euro and the British pound on Friday, building strength on rising stock markets and a modest expansion in the U.S. manufacturing sector despite poor news on jobs. In afternoon European trading, the 15-nation euro bought US$1.4818, down slightly from US$1.4877 in New York trading late Thursday. The British pound dropped to US$1.9716 from US$1.9900 in New York, while the dollar dipped to purchase 106.24 Japanese yen from 106.43 the night before.

 

Real Estate News

Toronto home buyer tax starts today - Real Estate Intelligence

Buyers in Toronto’s high-priced real estate market will be digging even deeper today as the city’s newest tax goes into effect. “Obviously the day has come. It’s still a back-breaking tax,” said Von Palmer, spokesperson for the Toronto Real Estate Board, which led a bitter fight last year to block the municipal land transfer tax. “We hope it does not affect the market in a negative way.” Sales increased after the tax was approved last October, Palmer said. In the first two weeks of January, Toronto sales were up 21 per cent over the same period in 2007, while in the 905 area – where the tax does not exist – sales were up by only 5 per cent.

Update on the Edmonton Real Estate Market - Edmonton Real Estate Blog

For the past 7 days:
# New listings: 499 (570)
# Sales: 249 (250)
Ratio: 50% (44%)
# Price changes: 231 (285)
# Expired Listings: 414 (115)
# Canceled, withdrawn and terminated listings: 37 (36)
Net loss/gain in listings this week: -201 (169)
Active listings for single family homes: 2592 (2725)
Active listings for condos: 1961 (2010)

How do big banks affect mortgage market?

This Video explains how big financial institutions can affect real estate markets. It will give you a better understanding of the overall mortgage industry and what powers dictate the rules.

Subjects covered:

• Lenders expand minimum requirements, allowing more people to buy homes
• Lenders expand guidelines even more, since previous expansion was successful
• Lenders expand once again
• Last group that was allowed to get mortgages does not perform well
• Lenders tighten minimum requirements.
• When time to refinance comes, people are left with no choices, since the guidelines were cut.
• Lenders tighten the minimum requirements even more
• More people are left with less affordable mortgages