Ontario Mortgage Loan Blog

Financial Literacy Training

admin — Tue, 22 Jun 2010 21:00:50 +0000

The CAAMP Foundation and Canada Credit are joining forces to help increase financial literacy for Canadian home buyers. By providing more resources Canadians will be empowered to make more informed decisions and better financial choices.

CAAMP (Canadian Association of Accredited Mortgage Professionals) is a leader the field of mortgage education in Canada, the CAAMP Foundation is the charitable arm of CAAMP . Canada Credit is a non profit organization dedicated to providing money management and credit counseling to Canadians.

“Our members firmly believe that financial literacy underpins a healthy economy, and certainly a stable mortgage market. We are pleased that our knowledge and expertise in mortgage finance can be utilized in this initiative,”

Paul Grewal, AMP, CAAMP Foundation Chair

“Financial literacy is key to personal financial success. We are pleased to be partnering with CAAMP on this initiative and appreciate their dedication to healthy money management and fiscal responsibility. There is no doubt that having the foundation of financial literacy will result in more successful homeownership.”

Laurie Campbell, Executive Director, Credit Canada.

Housing Starts Fall in May

admin — Tue, 08 Jun 2010 23:20:31 +0000

According to the Canada Mortgage and Housing Corporation housing starts fell in May to 189,100 units down from 201,800 units in April. The biggest decreases were seen in the prairie regions where urban starts decreased 21.8%, conversely starts increased 23.3% in Atlantic Canada.

The first half of the year saw builders and buyers trying to beat the July HST deadline in Ontario and British Columbia. As buyers who perhaps would have purchased later in 2010 were motivated to move a few months earlier. An increase in real estate listings has also taken some steam out of housing starts, giving buyers more options. The CMHC still forecasts that overall housing starts will still be up 30% in 2010 over last year.

Toronto and still remains relatively stable as starts were up .9%, mainly fueled by condo and high rise activities. Many analyst expect that the rise in listings and housing starts for the year will play a part in keeping prices more stable for the year.

Home Adaptations For Seniors

admin — Thu, 03 Jun 2010 15:50:54 +0000

With an aging population one of the most difficult challenges we face in the future will be caring for seniors. Many seniors live longer and happier lives when they are able to stay in their own homes. Community Care Access Centres can help provide the in home care that may be required in many situations. For seniors on a low income who have difficulty and need minor changes the CMHC-Home Adaptations for Seniors Independence program may help.

Home Adaptations For Seniors Independence (HASI)

The Canada Mortgage and Housing Corporation program provides financial assistance in the form of a forgivable loan up to $3,500. The loan does not have to be repaid provided the recipient continues to live in the house for at least a 6 month period. To be eligible the improvements must be permanent and improve daily access and safety of the resident. Portable items such as household appliances are not covered.

Who is eligible for HASI?

*Seniors over 65 who are experiencing difficulty with daily activities, brought on by aging (landlords may also qualify).
* Income must be at or below set levels for the geographic area.
* The home must be a permanent residence.

To find out if you may be eligible for this CMHC program or what other renovation programs may be able to help you visit their Pre-Application Page.

Bank of Canada Raises Rates

admin — Tue, 01 Jun 2010 17:46:18 +0000

As expected the Bank of Canada raised its key lending rate by 1/4 of a percent today. The move represents the first increase since July of 2007, since than rates have been steadily falling. Earlier in the year the Bank of Canada had indicated that the era of record low Canadian interest rates was over and that Canadians should prepare for higher interest rates in the future.

Canada’s economy has continued to outperform the United States, and the Bank of Canada has become concerned about inflation. Most analyst see this as the first of many interest rate increases by the bank of Canada. It is expected that banks and lenders will soon follow by increasing their rates. A 1/4 point rise in interest rates will increase monthly mortgage payments for those with variable mortgages. A $200,000 mortgage would increase by approximately $25 a month.

The Bank of Canada also noted that though the economy was recovering the outlook remains uncertain, and events in Europe and globally could derail recovery.

Canada’s Economy Continues To Grow

admin — Mon, 31 May 2010 16:47:15 +0000

The Canadian economy grew 6.1% in the first quarter of 2010, compared to 4.9% in the fourth quarter of 2009 according to Statistics Canada. The increase will no doubt put more pressure on the Bank of Canada to raise rates when they meet tomorrow. Most analyst are expecting a 25 basis point hike and a series of small hikes that would see Canadian interest rates rise about 2% by the end of 2011.

Mortgage growth also surged approximately 28% to 76.4 billion annualized up from 59.8 billion in the last quarter of 2009. The figure may reflect increasing home prices and the fact that more Canadians may be taking advantage of the current low interest environment and utilizing equity in their homes. Mortgage activity was also helped by the fact that many Canadians rushed to make moves prior to the April 19, 2010 mortgage rule changes.

The Canadian dollar was up on the news in light trading as the markets in the U.S are closed for the holiday long weekend.

Are You Part of The 5 Year Funnel?

admin — Thu, 27 May 2010 20:18:29 +0000

Last week Garry Marr, of the Financial Post wrote one of the more interesting articles on what effect there might be on those who have been funneled into a 5 year fixed rate mortgage due to the changes that came into effect on April 19, 2010. I can’t help but think this might end badly as it seems when ever people are herded into a particular term or product the clients end up being the losers. More troubling is the fact that most research indicates that shorter and more flexible terms are often better for the client. Below is a link to the Financial Post article which is a must read for anyone considering a 5 year fixed term.

Finacial Post Article

RBC Drops 5 Year Fixed Rate

admin — Thu, 20 May 2010 20:17:36 +0000

After hitting 6.25% the 5 year fixed rate has been easing and effective Friday May 21’st, the RBC will lower its posted 5 year fixed rate to 5.99%. Expect other banks and lenders to follow with a rate drop. Canadian bonds and equities have both been falling as the economic outlook has become a little more cloudy both globally and domestically.

Ontario Mortgage Rates

3yr Variable 5yr Fixed

CENTUM Primo**	3.75	4.34
Concentra	3.95	4.59
First National	3.99	4.59

rates subject to change and restrictions

CMHC Expects Housing to Stabilize in 2010 and 2011

admin — Wed, 19 May 2010 18:26:52 +0000

After a recent TD report expecting Canadian real estate to cool in 2010-2011, the CMHC has issued a press release and its forecast for the housing market in 2010 and 2011 is very similar to the TD’s outlook. With housing starts expected to be up over the next two years and the changes to rules for government backed mortgage insurance that took effect on April 19, 2010, the CMHC forecast that growth in real estate should be more stable and inline with the historic long term growth rates after the market had strong gains in 2009, rebounding the lows early in the year.

“Canadian housing markets have recovered from the low levels posted in early 2009,” said Bob Dugan, Chief Economist for CMHC. “Moving forward, housing starts will moderate as activity becomes more in-line with long term demographic fundamentals. New measures for government-backed mortgage insurance introduced by the Government of Canada that took effect on April 19, 2010 will continue to support the long-term stability of Canada’s housing market.”

Canadian Housing Starts Forecast

(2009 149,081 units)

2010 166,900 to 199,600 units

2011 148,600 to 208,800 units

The CMHC also projects that an increase in real estate listing will help balance the supply demand equation, after being driven by pent up demand caused by the debt crisis and early 2009 lows.

Merix Financial-Business For Self Simplified

admin — Tue, 18 May 2010 18:50:30 +0000

Often getting a mortgage can be a challenge for any self employed individual, especially for those who are newly self employed. Merix Financial, Business for Self Simplified is designed to help those who have been self employed 3 years or less and show little income. To qualify the applicant must have at least 2 years previous experience in the same industry; for example someone owning a restaurant 2 years may have previously worked 5 years managing a restaurant before deciding to open their own.

A beacon score of 600+ is required with no previous bankruptcies. Merix offers a wide variety of products and terms to chose from including their 50/50 combination mortgage, a premium of +2o basis points is added to the rates.

Merix Business For Self Simplified Highlights

Must be able to show prior experience in the industry with credit report or T4, there may be a gap between previous experience and self employment.

Minimum square footage House>800 square feet, Condo>500 square feet.

Homes ineligible include: time shares, log homes, floating homes and heritage homes.

Business license or GST license required to prove self employment.

Proof that there are no income tax or GST arrears

Must have a Canadian Credit History

Credit Requirements

Up to 75% for 600+

75.01%-85% for 620+

85.01%-90% for 650+

More Canadians are Interested in Combination Mortgages

admin — Mon, 17 May 2010 18:48:06 +0000

With interest rates rising and the high margin between fixed and variable rate mortgages in Canada, it seems that more Canadians are interested in hybrid or combination mortgages. According to RBC’s 17th Annual Homeowners Survey 40% of Canadians who are likely to buy a home within the next 2 years plan on taking out a combination mortgage. Only 32% of those surveyed in 2009 planned on taking a combination mortgage.

Banks have been quick to capitalize on the demand for combination mortgages as the product has become more widely available and actively promoted. Many clients enjoy the diversification that hybrid mortgages give them, having 50% of their mortgage fixed and 50% variable allows some exposure to lower variable rates while giving them added security that fixed rates offer.

RBC’s 17th Annual Homeowners Survey Highlights

44% of Canadians looking to purchase want a fixed rate mortgage. (Down from 47% in 2009.)

16% of Canadians are likely to go with a a variable rate mortgage. (Down form 20% in 2009.)

Terms Most Likely to Be Chosen

Five-year term: 43 per cent

More than five-year term: 29 per cent

Three-year term: eight per cent

The average amount outstanding on Canadian mortgages was $124,131 compared to $109,504 in 2005.

Ontario Mortgage Rates

CENTUM Primo

3.75

4.34

First National

3.99

4.59

3yr Fixed

5yr Fixed

*rates subject to change