Archive for the ‘News’ Category
US National Debt Explained
I saw some interesting facts on the US National Debt over the weekend that I thought would be worth sharing. Many people, including the US Government were up in arms a couple of months ago when the S&P announced they were downgrading the US debt rating. After all how could a super power like the United States, long known as the land of opportunity, possibly have a bad credit rating. It is interesting how similar a country and an individual can be when it comes to credit worthiness. As somebody who sees the credit of individuals from janitors to doctors, I have learned that a decent salary and prominent job do not necessarily equate to strong credit. It's not the amount of money you make, it is how you spend it. How Bad is The US National Debt Situation? Let's get back to the US debt for a moment. Below are a few interesting numbers: US Tax Revenue: $2,170,000,000,000 Federal Budget: $3,820,000,000,000 New Debt: $1,650,000,000,000 Current National Debt: $14,271,000,000,000 Recent Budget ...
Beware Sites Advertising “Low Mortgage Rates”
The Internet has given us unlimited access to information. As a small business owner, the Internet has also provided an affordable way to effectively market to millions of people. One of the ways some Mortgage Agents choose to market on the Internet is through lead generation sites. If you have searched for a mortgage rate on-line chances are you have visited one of these sites. They usually offer a choice of rates from several different Lenders/Brokers. This can be great for getting an idea of the best mortgage rates out there, but I caution most people when they are looking at these sites. There is much more to a mortgage than just a low rate. These sites do a good job of presenting several rate options, but they do not let the consumer know the terms and conditions associated with that rate. Mortgage rates have unfortunately turned into a commodity where lower is always perceived as better. Imagine you were shopping for a car and all the info the sites gave you was the price......wouldn't you have ...
Renewal VS Refinance – Know the difference
What is the difference between a renewal and a refinance? A renewal occurs at the end of your mortgage term. Your lender will send you a renewal notice and you will have the option to sign it for a new term.....or if you are smart you will speak with your broker to see if there is a better offer available. Most likely there will be a more attractive offer available and you will "switch" your mortgage to a new lender. A mortgage switch is when you move your mortgage to a new lender with all of the terms intact.....the only thing that changes is the rate. The amortization and mortgage amount remain the same. A switch is free to the client. The new lender covers any legal or appraisal costs that arise. The only possible expense to the client would be the small discharge fee from the current lender....which may also be covered in part or whole by the new lender. When is a mortgage renewal a mortgage refinance? In short if you change any of the ...
So your buying a rental property….
Investing in real estate can be a great choice when you are looking for long term appreciation and cashflow. However, buying a rental property is slightly different than buying your own home. What you need to know when buying your rental property The first thing you need to remember is to stay objective. You are not going to be living in this property so you do not need to "love" it. It is all about the numbers and whether or not it makes sense from an investment point of view. You need to ask yourself "will I make money on this purchase" You also need to be aware of the costs associated with purchasing a building over 4 units. You can expect everything to cost more: CMHC will charge you a per unit application fee, plus a higher premium You will have higher legal fees, plus you will most likely be required to pay for the lender's legal fees as well You will most likely have a lender fee and be expected to pay some of ...
Mortgage Rate and Housing Outlook
I recently had the opportunity to listen to an economist from Genworth Canada speak on his predictions about where mortgage rates and housing starts would be going over the next couple of years Really, there were not many surprises. By this point we all know mortgage rates only have one place to go and that is up. When we will start to see this increase is up for debate, but most "experts" agree it will be before the end of this year. Originally variable rates were predicted to start moving by July, but several bank economists have recently come out saying it will now be early fall. That is great news for those of us with variable rates. So how high will mortgage rates climb? It is hard to see the future without a crystal ball, but Genworth feels by the end of 2012 we will see prime rate around 6% and 5 year fixed rates around 7%. Keep in mind the 5 year fixed is the posted rate and most lenders discount the posted rate by ...
Listing Price VS Home Value
Can the listing price be considered the home's value? The short answer is no! As a Toronto Mortgage Broker I speak with homebuyers daily who voice their frustration with being outbid in multiple offer situations. This can be discouraging and turn what is supposed to be an exciting and happy experience into a stressful one. So what can you do to win your next bidding war? Well, the first thing you need to do is ignore the asking price and focus on the value of the property. This is where using a buyer agent pays off. Your agent can quickly let you know what similar properties in the nighbourhood have sold for recently, giving you an idea of the approximate value of your new home. Many agents will list a property well below value to generate interest and a possible multiple offer situation for their seller client. Again, your buyer agent should be able to tell you if the property ...
Why Are Fixed Mortgage Rates Rising?
Over the past week fixed mortgage rates in Canada have been on the rise. In fact, in most cases, lenders have increased their 5 year fixed rate by up to 35 basis points (.35%). What causes Mortgage Rates to increase? As I have mentioned in previous posts, Canadian mortgage rates use 5 year bond yields as a benchmark. The graph above illustrates bond yields over the last couple of weeks and as you can see, it has been a steady climb. As bond yields increase, Lenders' profits decrease. Most lenders like to keep their margins around 1.25%. In many cases deeply discounted rates were being offered at 3.69%. With a bond yield of close to 2.90% they were far from their desired margins. So where are rates going? It is hard to say. I can see the current upward trend softening and possibly seeing a slight retreat. It is important to remember that even though rates have seen a recent increase, we are still at historically low levels. Be sure to get your Pre-approvals to protect yourself from any further ...
Credit Help – 5 tips for avoiding a credit meltdown
Avoid Bankruptcy and get help with your debt Taking action at the first sign of credit trouble is the key to avoiding a credit meltdown. As a Toronto Mortgage Broker, I spend quite a bit of time helping my clients consolidate and repair their debt. I also work closely with a very reputable Credit Counselling agency who work on the clients' behalf to negotiate with the lenders to reduce their debt owing. 5 Tips For Tackling Credit Problems Act fast! Don't be embarrassed to ask for help. Consider using the equity in your home to consolidate high interest debt and save thousands on interest Speak with a credit professional. They might be able to reduce the amount of outstanding debt Stop getting new credit to shuffle your balances. This is a very slippery slope and just delays the inevitable Pay more than the minimum payments which are really only interest. You will never get rid of your debt by paying the minimum. Also, your
Toronto Mortgage Rate Watch
Toronto Mortgage Rates have been falling over the past week. Why you might ask? As I have mentioned in the past, Canadian fixed mortgage rates are driven by Canadian Government Bond yields which banks use as a benchmark for setting rates.As you can see by the above chart, Canadian Bond Yields have been falling for the past two weeks or so due to unrest in Libya and the Japanese Earthquake and resulting tsunami. The unfortunate events in other parts of the world actually have a positive affect on Toronto's Mortgage Rates.You can also see I have drawn a "Resistance" line across the graph. This level has proven to be a resistance point in the past. I will watch to see if yields creep above this line in the coming weeks as a substantial cross above will be a sure indicator bond yields are on the rise again and Toronto Mortgage Rates could follow. Is your Toronto Mortgage Broker watching rates on your behalf?Thank you for visiting www.YourLowMortgage.ca Related articlesMore Canadian banks cut mortgage rates (nationalpost.com)
Vacation Property Mortgage – What you need to know
If you are like me, you have probably dreamed about one day purchasing a vacation property at your dream holiday destination. For some of you it might be a cottage on the lake at your secret fishing spot and for others it might be a time-share at your favourite Mexican resort. Whatever your dream vacation home looks like, the way in which you pay for it will be very different. Vacation Property Mortgage Options. The main determining factor for if you will be eligible for a mortgage will be the ownership of the property. A cottage or condo type property will fall under the same rules and regulations that most homes fall under. However, a time-share or other fractional ownership type property will probably not be eligible for mortgage financing. Why you might ask? Well, you do not actually own the property. You own the right to use it or possibly even a share of the corporation that owns it, but at the end of the day there bank would be unable to ...
