Latest News Archives - Page 47 of 50 - Bruce Coleman, Senior Vancouver Mortgage Broker Archive - – Bruce Coleman, Senior Vancouver Mortgage Broker

09 Jul

2013

Alycia

What You Need to Know About Stricter Debt Ratio Standards

One of the key factors used to determine whether you will be approved for a home mortgage in Vancouver is your debt ratio.

Last year, the Feds have imposed a stricter debt ratio calculation and it is appearing that by the end of this year, these debt ratio calculations may become even more conservative.

Back in the latter part of June of this year, the Canada Mortgage and Housing Corporation has also issued new guidelines for how debt ratios are to be calculated and how income documentation is to be confirmed.

The new guidelines issued by CMHC will clarify how each input for debt ratio calculations will be treated and will become effective for all CMHC mortgages as of December 31, 2013. In reality however, the majority of lenders are already applying these new guidelines.

The guideline standards will be applicable to all 1-4 unit residential mortgages and despite the loan-to-value ratio.

A conventional or uninsured mortgage will have different policies but it is expected that the majority of lenders will apply these same guidelines to their approval process.

Some of the guidelines have been clarified for insured mortgages as follows:

Variable Income

Variable income means income which includes investment income, bonuses, tips, and seasonal income. Lenders are now required that they must use an amount which does not exceed the average income of the “past two years.”

Rental Income

The P.I.T.H. (Principal, Interest, Property Taxes and Heat) must be either deducted from the gross rent income or included as other debt obligations when calculating the TDS (Total Debt Service).

Guarantor Income

A guarantor (one who will make the full mortgage payment if a borrower defaults) will not be allowed to have their income used in a GDS (Gross Debt Service) ratio or TDS (Total Debt Service) ratio unless they are residing in the home as either the spouse or common law partner of the borrower.

Credit Lines and Credit Cards

For both of these debts, no less than 3% of the outstanding balance will have to be included in the debts payments that are made monthly. Payments which are considered as “interest only” will not be considered for lines of credit. A borrower’s credit history must be assessed by a lender when considering the amount of “revolving credit” that can be considered in a debt ratio.

Heating Costs

A lender must now use the actual heating cost record of a property or a reasonable estimate if one is not available. Some lenders now use a formula such as:
square footage x $0.75 / 12 months to calculate as estimated heating cost.

Many of these guidelines are already being used by most lenders, but some exceptions exist for borrowers who have a much tighter debt ratio, and these guidelines are being as a means to restrict some of these loopholes.

08 Jul

2013

Alycia

Stricter Debt Ratio Standards on the Way – Ask Bruce Coleman about Great Rates

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Stricter Debt Ratio Standards on the Way

If you’re a typical borrower, yourdebt ratios will largely determine if you’re approved for a mortgage.

For applicants who push the limits of qualification, those approvals have been tougher to come by. That’s a direct result of last year’s mortgage rule tightening, which imposed stricter debt ratio calculations (among other things).

And by year-end, those calculations will get even more conservative.

On June 27, CMHC issued new guidelines for calculating debt ratios and confirming income documents.

“Under current practice, CMHC stipulates standard formulas for calculation of debt service ratios but has not been specific as to how each key input is to be treated,” says CMHC spokesman Charles Sauriol.

These new guidelines will clarify that, and they become effective on CMHC-insured mortgages on December 31, 2013. (In practice, many lenders already apply them.)

These standards will apply to all insured 1-4 unit residential mortgages, regardless of the loan-to-valueratio. Uninsured (conventional) mortgages are allowed different policies, but most lenders will use the same rules for all their approvals.

Here are some of CMHC’s newly mintedinsured mortgage “clarifications”:

For variable income: Lenders must use “an amount not exceeding the average income of the past two years.” Variable refers to things like bonuses, tips, seasonal employment and investment income.
For rental income: If a borrower owns other non-owner occupied rental properties, the principal, interest, property taxes and heat (P.I.T.H.) on those properties must either be:
- deducted from gross rent revenue to establish net rental income; or
- included in ‘other debt obligations’ when the Total Debt Service (TDS) ratio is being calculated.
For guarantor income: A guarantor’s income must not be used in GDS/TDS ratios “unless the guarantor…occupies the home and is the spouse or common-law partner of the borrower.”
Unsecured credit lines & credit cards: For these debts, “No less than 3% of the outstanding balance” must be included in monthly debt payments. Interest-only payments are no longer considered on credit lines. Furthermore, lenders must assess the borrower’s credit history and borrowing behaviour when determining the amount of revolving credit that should be accounted for in debt ratios.
Secured lines of credit: Lenders must factor in “the equivalent” of a payment that’s based on “the outstanding balance amortized over 25 years.” That payment must use the contract rate (of the LOC) or the 5-year Benchmark rate(V121764) published by Bank of Canada (if the contract rate is unknown). Again, interest-only payments are no longer allowed for debt ratio calculation purposes.
Heating costs: Lenders must now obtain the “actual heating cost records” of a property. When no such history is available, the heat expense used in debt ratio calculations “must be a reasonable estimate taking into consideration factors such as property size, location and/or type of heating system.” That’s why some lenders have now moved to a set heating cost formula, like:

(square footage x $0.75) / 12 months

Compared to past methods (which entailed flat heating costs, like $100/month), the new guidelines can double or triple the heating cost that must be factored into debt ratios on larger properties, and reduce it on smaller ones.

It’s important to repeat that most of these policies are already being followed by most lenders. But there are exceptions.

Those exception-case lenders are commonly viewed as go-to sources when borrowers have tight debt ratios. These new guidelines are designed to minimize those “loopholes.”

All of this has come about, in part, because of Ottawa’s rule changes last July. At that time, the government fixed the maximum Gross Debt Service and Total Debt Service ratios for insured mortgages at 39% and 44% respectively.

Sauriol says that change “reinforces the importance for CMHC to ensure that debt service ratios provide the same measure of a specific borrower’s ability to service the mortgage debt, regardless of the lender submitting the application to CMHC for insurance.”

Rob McLister, CMT

06 Jul

2013

Alycia

A New Bank With a New Model — Canadian First – Consult with a Vancouver Mortgage Broker

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A New Bank With a New Model — Canadian First

By Rob McLister, Editor, CanadianMortgageTrends.com

Being a Canadian bank puts you in exclusive company. There are5,991 commercial banks in the U.S., but just 25schedule I banks in Canada.

That number will soon become 26 because Canadian First Financial Holdings Limited has just received OSFI approval to incorporate as a bank. (The bank’s name will be announced later.)

Canadian First’s business model is to build a full-service institution and make quality financial advice accessible to “all Canadians.” It will do that by originating mortgages through brokers, who will then be able to directly sell retail banking products to customers. They’ll also be able to refer clients to Canadian First advisors. Those specialists will assist clients with selecting investing and insurance products that match the individual’s personalized financial plan.

Canadian First’s bank, which is expected to launch later this year, will be unique in various ways:

Stacked Management: The company boasts some top gun talent with three Canadian Association of Accredited Mortgage Professionals (CAAMP) Hall of Famers on board: Co-founder Karl Straky, CEO Peter Vukanovich (formerly Genworth Canada’s CEO) and Rob Leeming (founder of SIT, one of the largest bank IT companies in Canada). Add to that the likes of David Kassie (Chairman of Canaccord Financial and former Vice Chair of CIBC), Nick Mancini (former CEO of Assante and an EVP at Canada Trust), Bernard Roy (who launched Canadian Tire’s retail bank and its “One and Only” account), Peter Wallace (who built Midland Walwyn before it was sold to Merrill Lynch) and Paul Leonard (former CFO at Ally Bank/ResMor Trust and ING Direct).
Mortgage Products: While most of its products will be the “standard fare” initially, the company does plan to offer a few “niche” mortgages right out of the gate. We’ll hear more on those in the next 90 days Straky says. It also plans a readvanceable mortgage within 12 months of launch. That product will support multiple mortgage components and lines of credit. It’ll also link to people’s deposit accounts so their dormant cash offsets their mortgage interest, à la Manulife’s “One” and National Bank’s “All-in-One.” (A readvanceable product isn’t surprising given that Leeming built the technology behind Manulife One. If priced properly, it could be a huge seller with brokers who route most such business into National Bank’s All-in-One.)
Cross-Sale: Canadian First is the only lender that allows brokers to generate revenue by referring a wide array of non-mortgage products. Those products will include high-yield savings accounts, RRSP loans, credit cards, GICs and credit lines. “We plan to launch banking product bundles to go with the mortgages they sell,” notes Straky. (Product referrals require a broker to own a retail location.)
Funding: Unlike most lenders who solely distribute through brokers, Canadian First will fund some of its mortgages with its own balance sheet (i.e., through deposits – as opposed to selling them off to investors). That’s expected to give it more flexibility in terms of mortgage features.
Financially Aligned Brokers: The bank will be a private company with most of its individual investors being from the mortgage broker community. Canadian First will leverage its broker partners to execute “a rapid expansion in the first 12 months,” says Straky. It’ll do that by letting established brokers apply for a retail location and become shareholders. (It already has 11 retail locations and another 12 “referring partner groups.”) While there are no hard and fast rules, an “established” broker is essentially a mortgage professional with a built-out infrastructure, a retail location and a few thousand clients, Straky says. “We have brokers in the network doing $40 million and $400 million (in annual volume).” The company will also deal with smaller brokers, but those brokers won’t get access to deposits, wealth management and insurance products.

In terms of mortgage pricing, Straky says the company will be “very price competitive.”

“If you’re out of the market by 5-10 basis points, that makes a significant difference to consumers.” But “our key differentiator isn’t on pricing, it’s on value,” he states. “We believe in offering a full suite of products.”

All in all, Canadian First sounds like a promising entrant to the broker market. From a mortgage standpoint, a few things remain to be seen, including its:

Product breadth: The world doesn’t need more vanilla insured mortgage products. Will Canadian First offer customers mortgage features that they can’t get elsewhere?
Capital Base: Having a big balance sheet, which is the company’s goal, lets a lender offer specialized products (e.g., readvanceable mortgages, RRSP loans, equity financing, etc.). But it’s not enough to have lots of deposits to fund such products. You also need lots of capital. In Canadian First’s case, it’ll need to post roughly 10% capital for every mortgage it funds through deposits. To truly scale its business, it’ll need hundreds of millions of dollars in capital and that might take years to amass if it does so solely from retained earnings. That said, it could accelerate the whole process by raising cash via private placement or via the public equity market.
Rates: It’s getting harder to sell an averagerate. And a lot of brokers and lenders who talk about selling “value,” don’t have great rates. If Canadian First’s rates aren’t better than average, that could slow its uptake for two reasons: (1) discount brokers and mortgage reps at major banks have become ferociously competitive; and (2) rate comparison sites will dramatically exacerbate consumers’ rate sensitivity. That said, Straky notes, “If all you have is to reduce your business to price, you will get beaten. Consumers want higher level advice. Rate aside, why do they pick a mortgage professional in the first place?”
Liquidity Event: Our sense is that the company wants to go public eventually. That will appeal to brokers wanting to buy-in while it’s still private. Then again, there’s a list of other broker-owned entities that haven’t panned out as expected. MortgageBrokers.com rings a bell, not that it’s an apples to apples comparison (since it wasn’t a bank).

Sidebar: As Canadian First announces its products and lending policies, we’ll report back with all the details.

By Rob McLister, Editor,

CanadianMortgageTrends.com

Tags: Bruce Coleman, Entrepreneurs, self-employed, Vancouver Mortgage Broker

05 Jul

2013

Alycia

Should You Get Your Mortgage From Your Bank? – Consult with a Vancouver Mortage Broker

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Should You Get Your Mortgage From Your Bank? – Consult with a Vancouver Mortgage Broker

Vancouver Mortgage Broker You may or may not know that the mortgage lending practices of banks are regulated by a variety of federal government agencies. This is because most banks have a federal charter so they can operate in other provinces which means they are subject to federal laws and regulations.

Although that might sound comforting, did you know however that this does not apply to the entire bank’s lending practices when it comes to mortgages? There are a variety of mortgage lending practices that they in engage which only require that the bank is self-regulatory. This means that these federal agencies do not regulate all aspects of these lending practices.

Some of the areas where a bank can be self-regulatory can include the manner in which their agents are compensated and in how their own representatives make their recommendations when it comes to the suitability of a mortgage application.

If the mortgage application that you made to a bank doesn’t qualify, you won’t necessarily be automatically declined as some banks will attempt to farm your application to other lenders. The bank employees who perform this task are acting the capacity as a mortgage broker but they may not even necessarily be licensed as a broker.

These bank employees will receive a commission if the application is approved by another lender. The problems is that every other independent mortgage broker is governed by provincial laws when it come mortgage lending practices, but these unlicensed bank employees are exempted from provincial regulations because they are regulated federally.

What does this mean? A mortgage broker that is licensed by the province can be audited and even sanctioned when a complaint is made or a ruling is made in the complainant’s favour.

However, if a complaint is made against the bank for the same reason, there is no federal authority that will perform such an audit or issue a sanction. Why? Because the banks are allowed to handle the complaint procedure internally, and this is why they are self-regulatory.

The federal agency which monitors banks is known as the Office of the Superintendent of Financial Institutions (OFSI). Many people are under the impression that OSFI would act in the same capacity as provincial regulators do when it comes to handling a complaint. However, the OSFI does not perform this monitoring or complaint capacity in the same manner that provincial regulators do for mortgage brokers which have provincial licenses.

The OFSI is mostly concerned in the solvency of the bank but does not concern itself with the mortgage practices of a federally chartered bank.

The other federal agency which does have some ability to protect consumers is known as the Financial Agency of Canada (FCAC). They do address issues such as the cost of credit disclosure and mortgage penalties but they do so only on an overall systemic basis and do not address individual consumer complaints.

The problem is that if your mortgage application is declined by the bank and farmed out to another lender by the bank’s employees, you will not necessarily be treated in the same capacity as would by using an independent mortgage broker. The banks have relationships with these other lenders. Your mortgage application may ultimately be approved but you may not necessarily be getting the best mortgage rate available.

Many banks would contend that their own self regulatory rules are quite stringent, but the whole complaint review process is performed by employees within the bank and not an outside agency.

The point is that although it might be more convenient to use a bank to apply for a mortgage, and you have a complaint about how the mortgage was processed, it will be the bank itself that addresses the complaint.

So, if you want to get the best possible mortgage rates, and are concerned about how a complaint might be handled, then maybe you might to consider that using an independent mortgage broker like myself who might offer you more of an advantage.

03 Jul

2013

Alycia

What Home Buyers Who Are Single Should Know – Ask Bruce Coleman, Vancouver Mortgage Broker

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What Home Buyers Who Are Single Should Know

Vancouver Mortgage Broker Nationally, and this of course includes Vancouver, a recent census survey from Stats Canada revealed that single people now comprise 27.62% of Canadian households. They actually make up a larger group than people who are married or living common law with children.

Single people also want to invest in real estate and want to buy either a home or a condo just like everybody else. Real estate investment is still quite an attractive investment these days interest rates the lowest they’ve been so it’s still a perfect time to buy.

Rent money just ends up in someone else’s pocket and doesn’t earn you a dime. With an investment in real estate, you can build up equity and increase your investment through appreciating property prices. This means you can use your investment as a means to make money which you can build up for your retirement.

The question that a single person might be wondering about is whether they are likely to experience more of a hurdle when it comes to getting approved for a mortgage application.

So, should you take the plunge? The main problem with being single is that your mortgage payment is your sole responsibility as you can’t access the income of another person.

If you feel you have job security, and plan to be living in the City of Vancouver for the next few years, then it could be advantageous for you to invest in real estate.

It’s important that you plan to live in your newly acquired real estate purchase because asides from the down payment you have tot remember that the closing cost for buying a property can be as a high as 2% of the purchase price which could take some time for you to recoup.

Most experts suggest you should only consider buying a property if you plan to be staying for at least a minimal of 3-5 years.

What Lenders Look for in Single People

Several of the things that lender will be looking when it comes to a single person applying for a mortgage includes:

Employment – A lender will want to know that you have a solid employment history with your current employer, and will look at your employment history going back for the past several years.
Income – You will also have to provide at least 3 years of your past tax records to verify your income as stated on your application. You will be required to provide additional information if you also happen to be self-employed. The lender will perform what a debt-service ratio analysis as most lenders won’t consider you application if more than 32% of your income is used towards the payment of your outstanding debts and costs to pay for a mortgage including property taxes, utilities and insurance.
Debts – A lender will also want to know everything about your current debts, and credit history including outstanding personal loans, conditional contracts and credit cards.
Down Payment – Any down payment which is less than 20% of the purchase price of a real estate property will require that you apply for mortgage insurance through such agencies like the Canada Mortgage and Housing Corporation (CMHC) which is an additional expense that will be added onto your mortgage cost.
Closing Costs – As stated previously, you need as much as an additional 2% in expense to cover closing costs.

If you’re single and ready to take the plunge into real estate investment then you might want to consider using an independent mortgage broker such as myself. I can give you plenty of helpful advice and can also help you find the best possible rates as we have access to numerous mortgage lenders.

Tags: Bruce Coleman, self-employed, Vancouver Mortgage Broker

02 Jul

2013

Alycia

101 Series: What Is a HELOC? Consult with a Vancouver Mortgage Broker

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What Is a HELOC?

Buce Coleman, Vancouver Mortgage Broker A HELOC is an acronym for “Home Equity Line of Credit.” You could say it is a form of a second mortgage, but is different from a second mortgage which is a loan for a specific amount of money.

A HELOC also uses your home’s equity but you use it as a line of credit. It is also different from a second mortgage because you use only the amount of money that you actually require.

A Home Equity Line of Credit is something that can be conveniently used for a variety of purposes such as a home renovation project which could include re-doing your kitchen or bathroom for example. Or, you could also use A HELOC as a means to refinance your home, take care of outstanding debts or pay for your children’s college tuition.

Lending Requirements for a HELOC Approval

The majority of mortgage lenders will not consider a HELOC application unless you have a minimum equity built up in your house equivalent to around 20 % – 25%. The amount you will be able to borrow will also fluctuate from lender to lender and will also depend on the total amount of equity that you have built up.

Approval of your application will also likely be influenced by how well your credit is rated and the amount of your current outstanding debts.

Benefits of a Hone Equity Line of Credit

One of the benefits of using a HELOC is that you are not restricted by its use. A HELOC does not have to be specifically used for home improvements or renovations as you can use it for many other reasons.

Another advantage of a HELOC is that the interest rates tend to be lower than what you would pay for a personal loan and can be significantly lower than what you pay on your credit cards.

Flexibility of a HELOC

A HELOC also gives you a great deal of flexibility. You can take out the money as you need it and only the amount you actually need up to the maximum credit amount for which you were approved on your application. However, if you are taking the money in increments, there may be a time limitation involved.

A HELOC is also flexible when it comes to repaying back the line of credit you borrowed. Most lenders will allow you to make extra payments or pay the entire amount off beforehand without extra penalty, but you should confirm this beforehand as repayment methods vary from lender to lender.

Cautions about Using a HELOC

Although a HELOC has many advantages, you should use it wisely. Some lenders will only require that you pay the amount of interest owed as the minimal payment.

This might sound tempting but you could end up paying a lot more than you expected and end up paying more interest than the principal amount of the loan.

Make sure you can afford to re-pay as much as possible and are in a financially viable position so that you pay the principal down.

You should also not be tempted use a HELOC frivolously as once your application is approved than you will not be able to use the equity you have built up until your HELOC has been repaid.

If you need more information about using a HELOC than you can always give us a call as we would be happy to help you out.

Tags: Bruce Coleman, self-employed, Vancouver Mortgage Broker

28 Jun

2013

Alycia

101 Series- 4 Strategies to Deal with today’s Uncertain Housing Market – Ask a Vancouver Mortgage Broker

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4 Strategies to Deal with today’s Uncertain Housing Market

Vancouver Mortgage Broker If you are a bit worried or concerned how to deal with today’s volatile housing market, here are 4 strategies you can use to help you feel more confident and feel more at ease.

1. Live in your home for at least 10 years.

Housing forecasters are predicting everything from a softening in the housing market to a sharp decrease in home prices. There are also those who believe that housing prices will just keep rising well into the foreseeable future. Most of these predicators center around what is being forecasted for the both the near term and the medium term.

So, this means that if you are planning to stay in your home for the next 10 years or more than you will have a better chance of seeing the current volatile economic market make a recovery from any declines and you begin to see an improvement which will also have a positive boost of house prices rising once again when things improve.

It might take a bit longer in larger markets like the Vancouver or Toronto housing market, but if you look at the last major recession of the late 1980’s when the housing market did pick up, it took off like the proverbial rocket.

From a market perspective, even if prices do fluctuate and home price increases don’t occur as dramatically as they recently have been doing so, you will still be able to build equity in your house simply by paying down your mortgage over that 10 year time frame

2. Prepay your Mortgage in Lump Sum Payments

Any money which you pay towards your mortgage payment which is above and beyond your regular mortgage payment is immediately applied to paying down your outstanding principal. Over time this will also raise the equity you have in your home and reduce the amount of overall interest you will pay for the remaining portion of the life of the mortgage.

It doesn’t matter if you can’t make a big prepayment as the majority of lenders will allow you to “double-up” your payments. This means that you can add an extra payment in any month that it is financially convenient for you to do so.

There are some lenders who will even allow an extra payment as small as a $100. And, what about your tax refund? If you’re not too sure what to do with it then consider using it as an additional prepayment towards you mortgage.

3. Save for a 20 % Down Payment.

There is no question that this is a tough task for anyone to do. The average Vancouver detached home was valued at $1.116 million dollars in April of this year. This means that a mere 5% down payment would cost you $55,800 dollars while a 20 percent down payment would run you at a whopping $223,200 dollars.

If you did have the ability to save up the 20% down payment then it would be to your advantage because you would automatically have a significant amount of equity built into your home. On the other hand, if you can only manage a 5% down payment, and if prices to drop you could end up owing more than the actual market price of your home.

Additionally, if you can manage to save the 20 percent down payment then you have the added advantage of not having pay for mortgage insurance which is generally added on top of what you have to borrow if your down payment is less than 20%. This would save you additional money on the interest you borrow.

4. Get a 10-year Mortgage.

Although a 10 year mortgage costs more than a 5 year mortgage, the advantage of getting a longer mortgage will give you added long term protection as the international economy continues to crawl out from it current global economic mess. You also won’t have to worry about re-qualifying if lenders become increasingly nervous later on. You’ll be covered for the entire decade which should be adequate enough time for the world economy to stabilize and begin a period of prosperity.

Tags: Bruce Coleman, Entrepreneurs, self-employed, Vancouver Mortgage Broker

27 Jun

2013

Alycia

How to Prepare Your Home for Viewing – Consult with Bruce Coleman

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How to Prepare Your Home for Viewing

Vancouver Mortgage Broker Planning to sell your Vancouver home?

If you answered yes then these tips should help sell your home more quickly.

First, you want to get a pad and pen and start a checklist of what needs to be done beforehand. Break your home into areas and rooms. Put yourself in the shoes of the buyer and ask yourself what your first impression would be if you were touring your house for the first time.

Selling a home quickly is all in the details.

Fix the Exterior and Put out the Welcome Mat

The first thing anyone is going to see when they step out of the car to view your home is the front yard. Curb appeal creates a first impression and puts the buyer in a mindset even before they step inside your home.

You want to make sure the grass is mowed and raked, and the flower and shrub beds are weeded. Sweep or use the hose on the both the driveway and walkway. Trim away all the dead foliage and add a little colour with some flowers to give the place a more homey appeal.

Get the details right and get the buyer thinking that the people who own this house care about their home’s maintenance.

What Are They Going to Smell and See?

Ask yourself what scent are they going to take in with the first breath when a prospective buyer steps inside. You want clean and not musty or cooking odours. Before you have your first buyer inside, you want to clean so that the house is spic and span clean. You want your home to smell fresh.

If your walls are showing a bit of wear and tear, then think about doing some prep work and a paint job. It might be well worth your while to replace a few faucets if they’re showing their age.

Focus especially on the washrooms and the kitchen as they are 2 key areas that a prospective homebuyer looks at when they’re viewing a home.

Get Rid of the Clutter

A cluttered home looks cramped and detracts from a room’s perspective of having space. Pack up your bric-a-brac and memorabilia and pack them away. You want to think “show home.” Have a professional shampoo the rug or do it yourself if you’re on a budget.

Tidy up those closets. If they look too cramped them maybe pack away some of your winter and fall clothes.

And, don’t forget to tidy up the garage, basement, and laundry room as well. Make every room look neat and organized.

If you’re not going to be around when the home is being shown then you should also give thought to putting your valuables in a safe location and not accessible to viewers.

When you leave, make sure the place is well aired and put out fresh line, clean dish towels and bath towels.

Get the details just right because they make all the difference in how quick or how slowly you the home will sell. Your realtor will also have a lot of great advice about prepping your home so take note because if you want to sell quickly, it’s always the little things that stand out.

Tags: Bruce Coleman, Entrepreneurs, self-employed, Vancouver Mortgage Broker

26 Jun

2013

Alycia

Toronto real estate: Cottage country sales rebound from wet spring

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2013 heralded as turnaround point for market that’s been flat since 200

By: Susan Pigg Business Reporter

The impact of a soggy spring continues to be felt across Ontario cottage country, where sales — and prices — in many regions are down slightly from last year.

Yet 2013 is being heralded as a possible turnaround year for the recreational market, which has remained essentially flat since 2007, according to a new report by ReMax.

The rebounding real estate market south of the border, and the arrival — finally — of summer, have led to a surge in both Canadian and international buyers looking for sun or ski properties, says the report released Tuesday.

“The U.S. was on sale for a long, long time, but now that house prices have picked up dramatically over the last six or eight months, and the dollar has softened somewhat, Canadian recreational properties are looking more attractive,” says Gurinder Sandu, executive vice president and regional director of ReMax Ontario–Atlantic Canada

Realtors have reported an uptick in the purchases of cottages, second homes and ski-resort properties by both international buyers and out-of-province buyers in Bracebridge/Gravenhurst (mainly Europeans and Asians), Whistler (buyers from Hong Kong and Singapore) and Nova Scotia’s south shore (buyers from the U.K.), notes the report.

Recent blips in the stock markets and concerns that interest rates are starting to creep up are expected to have just a short-term impact on the recreational property market, said Sandu. In fact, because prices are down or unchanged in 77 per cent of the markets examined in the report, and the for-sale inventory is higher than usual, buyers seem to be biting again, he noted.

Recreational sales remain on a par or ahead of last year in 70 per cent of the markets studied, and Ontario realtors say the arrival of summer seems to be making up for some of the time lost to cold weather and flooding in the spring.

“It used to be that January and February were the really busy times, but it’s basically becoming busier over the summer and fall now, and especially the fall the last three or four years,” says realtor Rick LaFerriere, who sells mainly in the Lake Simcoe and Lake Couchiching area north of the GTA.

LaFerriere is seeing a surge in demand from Muskoka cottage owners, and other buyers who’ve grown weary of Highway 400 traffic and are looking for properties closer to Toronto.

“With travel time playing an increasingly important role in the recreational lifestyle, properties in close proximity to the Greater Toronto Area are experiencing a renaissance,” the report says.

Prices are still averaging under $600,000, for the most part. But baby boomers, in particular, have helped push the price of properties on the western shore of Lake Simcoe up to an average $910,000 in the Innisfil area and $680,000 around Oro, it notes.

That’s still about 20 to 25 per cent less than the price of Muskoka real estate, says Sandhu, and means an hour or so less time spent in traffic.

“We’ve seen some interest from international buyers, but baby boomers are still a huge part of the market here,” says LaFerriere.

“Over the last two to three years, we’ve seen a lot of people who are buying the cottage for the family — not so much for themselves, but for their kids and their grandkids.

“They are people who’ve worked hard, maybe too hard, and maybe missed a lot of time with their family and are now bringing them back together. It’s kind of nice to watch.”

Tags: Bruce Coleman, Entrepreneurs, self-employed, Vancouver Mortgage Broker

25 Jun

2013

Alycia

Should you Lock in your Mortgage? – Contact Bruce Coleman

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Should you Lock in your Mortgage?

Vancouver Mortgage Broker Many analysts are of the opinion that it wouldn’t be such a bad idea to lock in your mortgage for the next 5 – 10 years.

However, they also suggest that you shouldn’t overlook a variable rate even with today’s somewhat turbulent interest rates. It might sound somewhat risky to do so as some international markets continue to be unpredictable and volatile.

Whenever one country appears to be approaching a critical level, interest rates tend to be lowered, but the question remains whether this trend can be depended upon to continue.

The banking regulators continue to tinker with the mortgage rules especially when it comes to high-down-payment mortgages.

Most savvy borrowers seem to be of the mindset that the trend will eventually come to an end so the question is how can you keep your mortgage cost low and protect yourself against future rate increases.

One approach that you could take is to lock in your mortgage. If you have a variable mortgage you can change it to a fixed-rate mortgage at no cost to you and go with either a 5 year or ten year fixed mortgage. Some lenders have increased their 5 year fixed mortgages by 0.2 of a percentage point just recently.

The reason is that they were reacting to an increase on the 5 year Government of Canada bonds. Bond yields as you know often impact how mortgage rates perform, but the market is still so competitive that lower rates are still to be found. But, it still might not be a bad idea to lock in your rate.

On the other hand, other analysts say there is no immediate rush to do so because the international economy is still somewhat wobbly and it wouldn’t take too much to cause rates to be lowered further. The main area of concern centers on certain economies in Europe. Both Japan’s economic practices and slower growth in China may also be impacted by the sluggish recovery of the U.S. economy.

Another factor which impacts interest rates is the inflation rate. The inflation rate continues to remain low and that also puts the breaks on potential rate increases. However, there is a possibility that the Bank of Canada may be more interested in seeing that the inflation rate rises instead of the reverse.

If the Bank of Canada does adopt an approach of increasing the rate of inflation, this is another argument that some analysts still think that it might be better to lock in your rate now as opposed to later on.

The prime rate is governed by the Bank of Canada and that rate has remained at 1% since September 2010 and is expected to remain so until the later portion of next year. The prime rate isn’t impacted like bond yields which are affected by large institutional investors and the rise and fall of the stock market which affects bonds.

Many see the 5 year bond yield as moving towards more normal levels but they may continue to increase for about another year or so before doing so.

With such volatility in the air, many experts feel you simply can’t go wrong if your lock in your mortgage for either a 5 or ten year period.

Tags: Bruce Coleman, Entrepreneurs, self-employed, Vancouver Mortgage Broker

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