Vernon BC Real Estate | RE/MAX Realtors | The Open Door Team - Mortgage Tips

Mortgage Update: Summer’s Over - Now For Some Good News

The Open Door Team — Thu, 20 Sep 2012 21:06:29 +0000

Vacations are over, school has started and the next four months should tell us what kind of economic environment we are really dealing with. It’s time to dig in and drive our businesses forward and finish the year strongly. The summer has given us many predictions – some pessimistic and some less so – but, as in sports, enough of the prognostications; let’s get on with the games.

The last full unofficial week of summer, in case you were away or busy with back to school shopping, brought some good economic and housing related news from a few different sources. Not all of the news was entirely good and not all of the good news is directly related to the housing market but for today, we will focus on the positive messages we received. It’s a good way to start the fall business cycle.

Canadian Government Tightens Mortgage Rules

The Open Door Team — Thu, 21 Jun 2012 20:14:02 +0000

The Canadian government has tightened rules for mortgages and household borrowing to make it harder for home buyers and homeowners to take on massive debt, the fourth attempt in four years to cool the hot Canadian housing market. Pointing to "excessive demand" in cities like Toronto, particularly for condos, Finance Minister Jim Flaherty wants tighter mortgage rules to do the work that interest rates cannot, given the inability or unwillingness of policymakers to raise borrowing costs in the face of global economic problems.

"Our government is committed to the long-term stability of the housing market," Flaherty told a news conference in Ottawa. "I have been listening to the market, and quite frankly I don’t like what I hear."

Mortgage Tips: Saving Money On Your Mortgage

The Open Door Team — Thu, 14 Jun 2012 20:25:29 +0000

There are many ways to save money on your mortgage and be mortgage free faster. Today we’ll look at the difference between a regular monthly payment, semi-monthly, or accelerated bi-weekly payments.

If you want to speed things up with your monthly payments, you can choose to either lower the amortization, increase your monthly payment, or apply lump sums periodically. Another way to speed up the process is to change the way you pay to accelerated bi-weekly payments.

Mortgage Tips: The Importance of Affordability in Predicting Home Prices

The Open Door Team — Fri, 25 May 2012 23:10:48 +0000

If you had to earn a living predicting home prices and could use just one indicator to do it, which would you choose? Two top economists were asked that question. Their answer was the same: housing affordability.

“Affordability is a key variable. It gives you a lot of information,” says CIBC deputy chief economist Benjamin Tal. “When affordability is good, demand usually exceeds supply.”

Affordability – a type of debt service ratio – gauges the average percentage of income needed to carry a mortgage. This is closely linked to how much homeowners can borrow.

It’s a rather paradoxical statistic. You would think, for instance, that with home prices doubling in the last 10 years, affordability would be getting worse. Actually, national affordability is almost the same or better than 20 years ago, according to measures by the Bank of Canada and major economists. For that, we can thank both falling interest rates and rising incomes. Discounted mortgage rates, for example, have dropped more than five percentage points in the last 20 years.

CMHC Closing In On Loan Limit. What Does This Mean For Consumers?

The Open Door Team — Fri, 27 Apr 2012 00:11:58 +0000

In a wide-ranging discussion on the housing market, Finance Minister Jim Flaherty recently said he has no plans to increase CMHC’s current $600-billion loan limit, ruled out any possibility of regulating foreign real estate investment and made it clear his focus is on the "governance" of Crown corp. which controls about 75% of the mortgage default insurance business in the country.

The shift comes with CMHC closing in on the $600-billion limit the government has for how much of its portfolio will be backstopped by the taxpayer. Three years ago it was $450-billion. “For a while,” said Mr. Flaherty, about how long the Crown corporation would have to exist under that limit. It was at $541-billion at the end of the third quarter of last year but business has slowed as the agency culled its portfolio business and reduced programs available to consumers, such as self-employed products and refinances.

Mortgage Tips: Mobile Home Financing

The Open Door Team — Thu, 22 Mar 2012 22:12:31 +0000

Many of my clients who are looking at Mobile Home financing (or financing of Modular homes on rental pads etc) have asked me to provide them with a list of items that lenders require in order to consider financing. So here you go....

Some details about financing for Mobile Homes include:

All financing for mobile homes is done through an insurer.
Financing is at posted rates, no discounts are available.
Maximum age of the mobile is 20 years.

Buying a Home and Renovating

The Open Door Team — Thu, 16 Feb 2012 21:58:19 +0000

Having touble finding your "dream home"?

Sometimes you find a home that's almost what you want - but it just needs a few renovations. Perhaps a new roof, furnace or hot water tank, new kitchen cabinets, updated flooring or a garage for your toys.

It is possible to obtain financing for a mortgage on your prinicpal residence or revenue property PLUS home improvements. At the time of application provide your mortgage specialist with quotes for the renovations to be completed on the property. This allows you to budget for the renovations upfront without having to use your credit cards etc to pay for them.

Some Interesting Mortgage And Housing Market Statistics:

The Open Door Team — Thu, 19 Jan 2012 18:46:31 +0000

There are great opportunities arising in the Okanagan as we see foreclosure rates at a high point - about 3.5 times higher than the rest of the province, according to statistics. What this means for home buyers is that prices are low, and with record low mortagage rates too, that is good news for affordability!

Here are some other interesting housing market stats "By The Numbers":

3.92% = Average interest rate on a Canadian mortgage over the past year, down from 4.22 per cent a year earlier.
23% = Estimated portion of mortgage holders who refinanced in the past year; they saw their rates drop by about 1.2 per cent.

How Mortgage Rates Are Set In Canada

The Open Door Team — Tue, 20 Dec 2011 17:50:08 +0000

There is without a doubt a lot of confusion about how the mortgage rates are set in Canada. Every time we hear the announcement that the Canadian prime rate is going up we automatically tend to think that the mortgage rates will go up as well. Well, the reality is that while variable mortgage rates do fluctuate with the prime rate, this is not the case with fixed mortgage rates, at least not significantly.

Let's first take a look at the variable mortgage rates. Most variable rates in Canada are directly tied to the prime rate. You have probably heard of "prime less 0.9%" or "prime minus 0.25%" mortgage rates, and many of us probably have or had some type of a variable mortgage rate. The way these mortgage rates change is very simple. As Bank of Canada increases or decreases the prime rate, variable rates get automatically adjusted accordingly. For example, if the prime is 7% and you have a prime minus 0.5% variable mortgage, your rate would be 6.5%.

Buying A Home Before You've Sold Your Existing Home

The Open Door Team — Fri, 11 Nov 2011 01:07:46 +0000

John and his wife had a house valued at approximately $250,000 listed with a great realtor. They found a house they loved before the existing residence was sold, listed for $350,000. There was a small mortgage on their existing property of $100,000 with a monthly payment of $800.

Solution:

Payout the existing mortgage, and provide John and his wife with 20% of the purchase price for a downpayment ($70,000) on their new home. Refinance at interest only for $170,000 with payments of $530 per month.