Recently some lenders cancelled their 2.99%, 4 and 5 year rate specials. The Chartered Banks were the main players in the rate specials. As a broker, we have access to many lenders and we still have great rates* under 3% for terms of 3 and 4 years and a rate of 3.09% for 5 years. We have noticed the large banks looking for higher rates on their mortgages and loans. Our goal is to get the clients the best rate based on their application. Right now fixed rates are at an all-time low, so home buyers should take advantage and if they are thinking of buying, get a rate guarantee. We can offer a 6-month rate hold at a great rate!

When these low rates eventually disappear is that a bad thing? The answer depends on what is causing our rates to increase. If the increase is because the economy is growing and investors are taking money out of the safe havens like bonds and guaranteed interest rate certificates and investing their money in the stock market or new business start up, that is a good reason for rates to increase. If our rates are increasing in Canada because the monetary markets see us as a credit risk (i.e. Greece), that is trouble. We are fortunate that when rates increases come, they will be for the right reason.

In the meantime, fixed rate rules! A recent survey by one of our lenders tells found that over 95% of clients are opting for fixed rates and we have clients taking the 7 and 10 year terms. We are still offering a great rate on 10 year money at 3.89%. The 5 year rate quoted above is the best available right now.

Invis West Coast Mortgages – Your Mortgage Experts.

Many homebuyers looking at older properties find themselves in a common predicament: they’ve found a property that suits them, but it needs some costly and immediate upgrades.

Many buyers add the costs of those immediate renovations into their mortgage, instead of racking up credit card bills or selling investments to pay for the upgrades. Known as a “purchase plus improvements” mortgage, this type of mortgage covers the sale price of the home, plus any renovations that would increase the value of the property , with as little as 5 per cent down.

If you’re buying a home but want to add a second storey, finish a basement or redo a kitchen, it can make a lot of sense to add those costs to your mortgage. That way you can spread your payments over the life of the mortgage and have a cost-effective way to get your dream home. You can also use your pre-payment privileges to pay the renovation off faster. The process is quite simple:

Obtain cost estimates for the upgrades. Once you have found a home, you need to get detailed written quotes from licensed contractors on the renovations you plan, outlining the scope and all costs.

Get your appraisal. An appraisal with two separate values will sometimes be required: first the value of the property “as is” and the estimated value of the property once the improvements are completed. Discuss this step with your mortgage consultant as it is not always necessary.

Renovation costs are included in your mortgage. Your lender will add the estimated costs of the renovation into your mortgage. For example, with a 5% down payment, your mortgage broker would apply for 95% of the “as improved” market value, which will be higher than the actual purchase price. The committed amount of the mortgage will be advanced to your solicitor, who will be instructed to hold back the renovation funds until the work has been completed and inspected.

Complete your upgrades; funds are released upon completion. Once an inspection from an appraiser confirms all work is complete and a copy of the building permit (if applicable) has been received, the balance of the mortgage funds will be released to you to pay for the renovations. Depending on the lender, you may also be asked to provide copies of receipts and invoices for the work done. There are a few options for carrying your expenditures until the funds can be released. Some major home improvement retailers offer “no payment” options for up to six months.Larger contractors may also be willing to finance the project short-term if they see the documentation for purchase plus improvements financing.

Example:

Purchase price: $400,000

Improvements: $40,000

Total mortgage: $418,000 (95% of $440,000)

$378,000 will be released on closing date. $40,000 will be released upon completion of improvements i.e. improvements are 100% complete and a final inspection has taken place.

Be sure to consult with a mortgage professional to learn about the full range of options available to you when purchasing a fixer upper.

For most homeowners, paying off their mortgage quickly – so that they own their home free and clear – is a top priority. Paying down additional principal during the first years by a variety of means can shorten the mortgage — and dramatically lower the amount of interest you will end up paying over the life of the financing. Here are a few ways to make this happen:

• Consider making lump sum prepayments. Most lenders will allow you to do this on the anniversary date of the mortgage.
• Use your tax refund to make mortgage prepayments. Instead of spending your tax return, invest it in your financial future by putting it toward your mortgage.
• Consider making bi-weekly or weekly mortgage payments. This strategy can add the equivalent of another monthly payment each year, which can add up over the life of the mortgage.
• Round up your payments. Even a few extra dollars each month can amount to significant savings over the long term.
• Increase the amount of your payments when your income rises. The trick here is to keep your lifestyle generally at the same level as before, while concentrating on debt reduction.
• Ensure that your payments are as large as you can afford. Try tracking where your discretionary income goes each month – you may find room to increase your regular mortgage payment, or make a lump sum prepayment.
• For some variable rate mortgages, keep your payments the same size when rates go down. This allows you to put the savings associated with a lower rate towards the goal of principal reduction.

Explore your Options with Invis Online Calculators

I would be happy to discuss your individual mortgage strategy. As a supplement to my consultation with you, there are also a range of helpful calculators on the Invis website which allow homebuyers and homeowners to explore different mortgage scenarios. In particular, the Mortgage Payoff, Bi-Weekly Payment, Mortgage Analyzer and Debt Payment Accelerator calculators can help you understand the financial benefits of paying down your mortgage as quickly as possible. In addition, the home budget calculator can help you to track your spending patterns in order to increase your mortgage payments.

Increasingly, Canadians are turning to mortgage brokers for their first and next mortgage, taking advantage of the value and convenience of their services. A 2011 study conducted by CMHC (Canada Mortgage & Housing Corp) found that 48 per cent of first-time buyers completed their transaction with a mortgage broker, up from 45 per cent in 2009 and 35 per cent in 2007.

One of their most compelling reasons to work with a mortgage broker is that they have access to a wide range of lending sources, making it significantly easier to match borrowers with the mortgage product that best suits them. When you’re dealing directly with one financial institution, you just don’t know if you’re getting the best deal because they’ve only got their own menu of products to offer you.

If you are dealing with one of the largest mortgage brokers in the country, you’ll also enjoy considerable bargaining power. A large brokerage has clout with lenders to negotiate volume discounts that lead to lower rates and greater product choice than other companies. And, brokers are generally paid by the lender rather than the borrower, making it a logical choice to always consult with a mortgage broker. They’re shopping the market for the best rates, doing all the work, and there’s no cost to you.

But a mortgage broker’s role extends beyond securing financing – to arranging the home appraisal and lawyer or notary, reviewing the purchase contract and statement of adjustments, securing mortgage life insurance, and keeping tabs on the entire closing process. And that’s just during the mortgage transaction. The broker then stays in touch, keeping clients apprised of new mortgage offers and rate fluctuations, and advising when to lock in a variable-rate mortgage.

Ultimately, the role of your mortgage broker is that of a trusted advisor and it’s a relationship that can last a lifetime. Many mortgage brokerage clients have been referred by word of mouth, and many are even second- and third generation client families.

Whether you’re taking on your first mortgage or a long-time homeowner looking to refinance, consolidate debt or leverage your equity to acquire a new property, a mortgage broker is a wealth of information. They can advise about down payment requirements, mitigating credit history issues, mortgage payment and prepayment options, interest-saving strategies, purchasing vacation, investment and commercial properties, qualifying with supplemental rental income, and mortgage options for new immigrants.

When you get a mortgage, likely the biggest financial commitment you’ll make in a lifetime, it’s critical that the person you’re dealing with is knowledgeable, able to answer your questions, and has access to a full range of lenders so you get the best mortgage for your needs.

We are here to help! Call Invis West Coast Mortgages today for a free no obligation consultation at 604.483.1718

Canada’s housing market is not a bubble, it’s a balloon. And unlike the catastrophic decline the U.S. housing market experienced in 2008, the market in Canada will deflate slowly rather than pop, according to a report by BMO Capital Markets.

The sole possible exception is Vancouver, where the number of unoccupied condominiums is high due to building the Olympic Village, economists Sherry Cooper and Sal Guatieri wrote in “Will Canada’s Housing Boom Forge On, Fizzle Out, or Flame Out?”

But generally, the report says that despite rising household debt, low interest rates and rising home prices, it is unlikely that a sudden correction will take place.

“The main take-away is that the national housing market appears some-what pricey, but is far removed from bubble territory,” the report stated.

It compares average resale prices with median family incomes and finds the ratio is 4.9 nationally, compared to 3.2 a decade ago.

In Vancouver, though, where house prices have gone up 159 per cent in the last 10 years - compared to 104 per cent nationally - the ratio of price to income is 10, nearly double what it was a decade ago, the report said. Victoria is also high, at 5.7, but not as high as Toronto, which has a price to income ratio of 6.7.

Montreal has also seen prices rise dramatically - by 153 per cent - and its price-to-income ratio double, but that ratio remains low at 4.5.

Despite rising home prices in most of Canada’s major cities, the growth doesn’t seem to be excessive, the report said. But elevated valuations could lead to trouble in the event of a shock.

For example, if interest rates were to spike by about four percentage points, the affordability of homes would quickly drop throughout the country. A severe recession would also affect affordability.

But the chance of either of those events happening is unlikely, the report authors stated. Also, except for a few markets, the national housing boom has already cooled.

And British Columbia is now “the nation’s new weak spot, with prices generally declining,” the report said.

Some of that decline reflects fewer sales of high-end homes.

“[But] some real underlying softness is at play, and will likely continue until valuations improve,” the report stated.

Tsur Somerville, director for the Centre for Urban Economics and Real Estate at the Sauder School of Business at UBC, said BMO’s report is one of many predicting slight drops or slight increases in the housing market rather than a major correction.

“The kinds of things you need to get major corrections, like oversupply or radical change in the financing environment, just aren’t there,” Somerville said.

And just because the overall market will be flat, it doesn’t mean that certain portions of it - such as areas that have had higher run-ups in prices over the past few years - aren’t in for a correction, he said.

Helmut Pastrick, chief economist with Central 1 Credit Union, believes that while there may be a soft landing at some point in the future, it won’t be in 2012.

“The market is holding up generally well and it looks like 2012 is going to be fairly similar to 2011 in terms of overall unit sales,” Pastrick said. “Housing prices will go up by some amount, sales will also increase by a small amount.”

And while the economy isn’t booming, it is growing, interest rates are low and there is job growth, he said.

“So the conditions to me aren’t ripe for a correction.”

Meanwhile, Bloomberg reported that Canada’s banking regulator fears that Canadian lenders are loosening standards on mortgages that are similar to U.S. subprime loans, posing an “emerging risk” to financial institutions.

Banks and other lenders are becoming “increasingly liberal” with mort-gages and home-equity credit lines that don’t require individuals to prove their income, according to documents obtained by Bloomberg under freedom of information law request from the Office of the Superintendent of Financial Institutions.

“Non-income qualified” lending has been added to a list of issues to be considered by OSFI’s “emerging-risk committee,” Bloomberg reported the documents showing.

Pastrick disputes this finding.

“We’re not subprime, not by a long shot,” he said.

Lenders in Canada have “credible lending criteria and standards.” And while lenders will lower rates to grab market share “credit isn’t easy like it was in the U.S.,” he said.

Somerville believes the problem is with home equity lines of credit which have become more popular over the year and don’t always require income verification.

Not only are lines of credit given out without the same level of super-vision or the same standard of care that is applied to mortgages, they are also junior in seniority to mortgages, Somerville said.

Read more: http://www.canada.com/business/Vancouver+condo+market+watch+list+real+estate+balloon+deflates/6073340/story.html#ixzz1l3d5QmCN

The Bank of Montreal poured cold water on the idea Canada’s housing market could be headed for a crash, suggesting that prices are only “moderately high across the country.”

“Expect the housing boom to cool rather than crash,” BMO’s chief economist Sherry Cooper and senior economist Sal Guatieri said in a report published Monday.

“While the housing boom is unlikely to continue unless mortgage rates drop much further, neither is it likely to bust.”

The bank says home values are indeed rising at a faster pace than they used to, but the signs are pointing to a soft landing where prices stabilize — not a hard correction where prices drop quickly by 20 per cent or more.

“In our view, the national housing market is more like a balloon than a bubble,” the bank said. “While bubbles always burst, a balloon often deflates slowly in the absence of a pin.”

But demographic factors, consistently low interest rates, low construction costs and an influx of foreign buyers make it likely that no such pin will materialize for the foreseeable future, the bank said.

Average prices have grown more than twice as fast as family incomes since 2001, but BMO’s report argues there’s no reason to panic yet.

Nationally, home prices are 4.9 times higher than the average household income. A decade ago, that ratio was at 3.2.

Some cities are hotter than others. Vancouver’s ratio currently sits at 10 times higher than average household income, Toronto’s is at 6.7, Montreal’s is at 4.5 while Halifax is at 3.8. Those are all on the high side, but if the market cools, that will allow incomes to catch up and move the price-to-income ratio lower, the bank argues.

The latest data from the Canadian Real Estate Association shows the national average price was $347,801 in December, a 0.9 per cent increase over the previous 12 months. That was the lowest level of growth since October 2010 and well below inflation, a possible sign that the market is already cooling.

The bank does note, however, three risks to the outlook. A sudden hike in interest rates, a widespread Canadian recession, or an economic slowdown in Asia reducing the number of foreign buyers would all take the air out of Canada’s housing market.

“But barring one of these triggers, however, a dramatic correction is unlikely,” the bank said.

The U.S. decision to hold short-term interest rates near zero through 2014 – 18 months longer than expected – suggests the Bank of Canada now has little choice but to do the same, giving consumers – and brokers – more time to dally in the current low-rate environment, say analysts.

While the U.S. Federal Reserve is projecting continuing economic growth this year, 2.7 per cent, and next, 3.2 per cent, it remains convinced that the troubled jobs and housing markets will continue to challenge spending by both businesses and consumers.

By projecting a longer horizon for low interest rates, it mean to keep the current level of stimulus in place and — fingers crossed — encouraging spending.

It may or may not work, said economists Wednesday, following the announcement, but either way drag in the U.S. recovery will likely to hamper Canadian growth.

That would encourage the Central Bank to keep its own overnight interest rate near historic lows, according to Canadian analysts, although not likely as long as its American counterpart.

If the Loonie remains strong, the BoC could hold off edging up that rate as late as 2014, CIBC economist Avery Shenfeld told reporters Wednesday. “Those who have borrowed heavily can take some comfort that they’re not going to be beaten up by a sharp rise interest rates anytime soon.”

Still, that extra time with low rates won’t necessarily benefit mortgage professionals grappling to get buyers off the fence and into the market.

“What I’m experiencing – and what I’m hearing from other seasoned brokers in the Vancouver area – is that we keep checking in with preapprovals and we’re having to roll more of them over because despite the low interest rates clients are in no rush to buy,” Morris Briglio, president and senior mortgage consultant with The Mortgage Advantage, tells MortgageBrokerNews.ca.
 

OTTAWA - New home prices rose by a stronger-than-expected 0.3 per cent in November from October but continued to subside in the pricey Vancouver market, according to Statistics Canada data released on Thursday.

Analysts surveyed by Reuters had expected a 0.2 per cent rise. On a yearly basis, prices rose 2.5 per cent, the same rate as in October.

But prices eased in closely watched Vancouver. The coastal city has Canada’s most expensive property market. A surge in prices and sales there that followed the recession had caused concern about a possible bubble.

The latest data showed prices in the city have fallen gently or held steady in the last six months, and are now 0.2 per cent lower than November 2010. From October to November, they were down 0.3 per cent.

Prices in eastern and central Canada were rising, on the other hand. In Toronto and neighboring Oshawa prices rose 1.0 per cent on the month and 6.2 per cent on the year. Prices in the Prairie cities of Winnipeg and Regina were also more than 5 per cent higher on an annual basis.

The latest report comes after data on Tuesday showed Canadian housing starts climbed more than expected in December.

Canada’s housing sector, which did not experience the subprime mortgage boom and bust seen in the United States, played a key role in lifting the economy out of recession as ultra-low interest rates drove sales and prices higher.

But many Canadian policymakers fear the market’s post-recession boom, combined with a long run of low lending rates, could create a fresh asset bubble.

Bank executives told a Toronto conference on Wednesday that the Vancouver and Toronto condo markets were particularly vulnerable.

Read more: http://www.vancouversun.com/business/home+prices+rise+except+Vancouver/5984864/story.html#ixzz1jH0y3QYv

OTTAWA — There was some improvement in Canadians’ “economic mood” in the last few months of the year, after a decline during the mid-part of 2011, a survey released Monday shows.

Nanos Research’s quarterly “economic mood index” had a score of 107.4 for the year’s fourth quarter, up from 105.1 in the third quarter. The latest results followed two straight quarters of decline after being as high at 115.7 at the beginning of last year.

The latest quarter’s improvement was a result of better expectations for the economy going forward. The expectations index rose to 113 from 104.1. The “pocketbook index,” looking at how people’s financial situations had changed over the previous year, fell to 102.8 from 105.9.

The survey found that 18.9 per cent of respondents expected the Canadian economy to improve over the next six months, up from 16 per cent in the previous quarter. On the other hand, 31.3 per cent expected it to get worse, down from 38.9 per cent in the third quarter.

Asked how their personal finances had changed over the previous year, 17.4 per cent said they had improved, down from 21.4 per cent in the third quarter, while 28.2 per cent said things were worse, up from 26.7 per cent previously.

The results were based on a phone survey of 1,201 Canadians who were at least 18 years old. The survey was done between Dec. 15 and Dec. 18. The results are considered representative of the population within 2.8 percentage points, 19 times out of 20.

Postmedia News

Read more: http://www.vancouversun.com/business/Canadian+views+economy+improved+late+2011+Survey/5966387/story.html#ixzz1izb9meg3