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101 Series: Reasons to Buy Title Insurance for Your Vancouver Home

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Reasons to Buy Title Insurance for Your Vancouver Home

There are a lot of little details that you have to take into account when buying a home or condominium in the bustling metropolis of Vancouver.

One of these oft overlooked details is known as “Title Insurance.”

So, what is title insurance and why do you need it?

Title Insurance Explained

Title insurance protects you from encountering and being encumbered by a number of legal issues that can easily complicate your life and cause you to end up in a costly litigation situation.

Although you would like to believe that everything is being handled by professionals on your behalf, you shouldn’t have to concern yourself with any worry about what happens behind the scenes.

Although most home or condo purchases go through without a hitch, sadly to say this is not always the case. So, what kind of potential legal issues could you encounter if you don’t have title insurance to give you that extra protection?

Some of the potential issues you could encounter when you are buying a Vancouver property could include the following:

• Issues involving property taxes which are still outstanding
• Zoning issues
• Mistakes made by the property surveyor which is challenged by a bordering neighbour or business owner
• Other financial liens which might be attached against the property such as by a collection agency or other forms of judgements
• A fraudulent title
• Encroachment issues

So, as you can see from the above list which is not all inclusive, there are a variety of legal issues which can throw a wrench into buying your dream home.

Simply put, title insurance can provide you with a valuable form of insurance protection which can help you if you get caught in one of these types of legal entanglements.

Is Title Insurance Expensive?  

That’s the beauty of title insurance. It is not all that expensive and it covers you for as long as you own your home. I suggest you do some comparison shopping as generally speaking the prices for the insurance range anywhere from around $150.00 to $350.00, but it really is well worth your while to have it.

You should also know that many lenders will require you have this insurance coverage before you can get approved on your mortgage anyway. Even if they don’t require that have you coverage, if have taken the time to purchase the insurance it will help smooth your way through the application and approval process

You can get title insurance directly through your lender as many of them offer a policy for their clients. Your other option is to get it either directly from your insurance company or through your insurance broker. Some policies are sold as a separate rider which you can buy along with your homeowner’s insurance policy.

However you buy it, I highly recommend you consider buying title insurance for that extra piece of mind and to protect yourself from a potentially costly legal lawsuit.

Trade and Investment to Support Canada’s Economy In 2013: RBC Economics

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Real GDP to increase to 1.9 per cent in 2013

TORONTO, June 19, 2013 — Canada’s economy started 2013 growing at a solid clip, as energy production continued to recover and the U.S. economy proved to be more resilient to a recession than was feared, according to the latestEconomic and Financial Market Outlook issued today by RBC Economics. Following an increase in Canadian GDP output of 1.7 per cent in 2012, RBC raised its real GDP growth forecast to 1.9 per cent through 2013 and expects a firmer 2.9 per cent rise in 2014.

The first quarter of 2013 saw a marked turnaround in the domestic economy, with Canada realizing a solid 2.5 per cent annualized gain, supported by a sharp turnaround in net trade which added 1.4 percentage points to the quarterly growth rate – the largest contribution since mid-2011.

“The improving trade balance underpins our forecast for Canada’s economy to grow at rates which should help propel the economy to full capacity in early 2015,” said Craig Wright, senior vice-president and chief economist, RBC. “Stronger demand for autos, houses and industrial machinery from the U.S. will help sustain the lift in export growth that Canada experienced so far this year for the remainder of 2013.”

Businesses reduced the pace of investment in structures and capital goods in recent quarters, likely a reflection of the uncertainties surrounding the effect of U.S. government’s fiscal restraint on U.S. demand for Canadian goods. Easy financial conditions in Canada coupled with indications that the U.S. will clear the fiscal cuts in good stead will support a rebound in business spending in the quarters ahead, RBC says.

“Company balance sheets are healthy – business financing made headway in early 2013 and will continue to provide Canadian firms with the capacity to invest at an accelerating rate in 2014,” said Wright. “After rising an expected 3.7 per cent this year, business spending will strengthen to 7.3 per cent in 2014.”

RBC says export recovery and business investment are necessary to keep the economy on track and to offset a softer housing market. Residential investment is forecast to decline 2.4 per cent this year and 0.7 per cent in 2014. This slowing partially reflects overstated strength in 2012 when residential investment jumped 6.1 per cent as home sales increased – likely to avoid a tightening in mortgage lending and fear of mortgage rate increases.

Cooling activity in the housing market led to a reduction in the pace of mortgage debt growth to the slowest level since 2001 in April, easing concerns that the economy is vulnerable to a significant shock. In fact, RBC indicates that debt service costs remain historically low and one-third of households continue to be debt free.

“The firm labour market is another factor mitigating the risk that a debt-associated downturn is brewing,” noted Wright. “With employment at an all-time high and household income and savings on the rise, we expect household debt to remain in check, which should limit the weakness in the housing market and support consumer spending.”

An easing in household credit growth coupled with a low level of inflation set the stage for accommodative monetary policy in early 2013. RBC says that new Bank of Canada Governor, Stephen Poloz, will likely maintain interest rates at the current level for the remainder of 2013, and expects the Bank will start to reduce the amount of stimulus in the second half of 2014.

Globally, RBC expects the world’s economy to continue growing at a modest pace in the first half of 2013 as a result of Europe’s ongoing struggle to get out of recession and the U.S. economy absorbing government austerity measures. Growth is likely to accelerate later this year, however, as the benefits from structural changes combined with very supportive interest rates boost global economic momentum.

After a generally disappointing finish to 2012, the economic performance across the majority of Canada’s provincial economies improved in early 2013. RBC forecasts that natural resource-intensive provinces will remain at the top-end of the growth rankings in 2013 and that stronger exports will be the mainstay for many of Canada’s provinces.

Newfoundland and Labrador will outpace all other provinces by a long shot to stand atop the 2013 provincial growth rankings. The Prairies – Alberta, Saskatchewan and Manitoba – will continue to grow at the top-end. The remaining provinces are expected to stand slightly below the national average for growth.

A complete copy of the RBC Economic and Financial Market Outlook is available as of 8 a.m. ET. A separate publication,RBC Economics Provincial Outlook, assesses the provinces according to economic growth, employment growth, unemployment rates, retail sales, housing starts and consumer price indices.

– 30 –

For more information, please contact:

Craig Wright, RBC Economics Research, 416 974-7457
Paul Ferley, RBC Economics Research, 416 974-7231
Elyse Lalonde, RBC Corporate Communications, 416 842-5635

101 Series: Why You Should Use a Vancouver Mortgage Broker

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Why You Should Use a Vancouver Mortgage Broker

It’s a simple fact that over 50% of Canadians use their own bank to obtain their first mortgage.

It’s a common practice adopted by many first time mortgage borrowers because it’s a convenient place to apply since they know you.

But, did you also know that if you use your bank and you accept the rate they offer, it could end up costing your thousands of out of pocket dollars because you did?

Many Canadians are under the impression that it’s better to use their bank because you are under the impression you will have to pay a commission to a mortgage broker such as myself.

Vancouver Mortgage Brokers Don’t Charge You a Fee

That’ right! You don’t pay us to do this work for you because we earn our commission directly from the lender. The commission we receive has nothing to do with any costs that are reflected on your mortgage. They pay us this commission because we brought the business to them.

The commission we make is specifically based on the size of the mortgage and has nothing to do with interest rates. Mortgage brokers have to go through a stringent process to get a license, so you know that you can expect a high degree of competent professionalism when you use our services.

Bottom line – you pay nothing to use our services!

A Vancouver Mortgage Broker Offers Greater Convenience

Let’s say you did go through your bank. You went through all the ropes and put your paperwork together. You may have met with them several times to clarify aspects of your application or to sign some papers. You have to take time off from work to meet with them during business hours.

You go through all this and what might happen? They turn down your application. So, what happens next? You have to go through all this rigmarole to do it all again with no guarantee.

By using the services of a Vancouver mortgage broker, you only have to complete all the paperwork once. Then we take over and do all the rest for you. We have access to numerous lenders and can save you a lot of legwork because we can repeat the process without having to inconvenience you with a bunch of stressful appointments.

Many people who apply for mortgages also happen to be either single or self-employed. Other applicants have less than stellar credit history. These and other issues can present new hurdles which you might not be prepared to address.

As the banks are more stringent when it comes to people in this boat, I can advise you on how to manage these hurdles with a lot less hassle.

A Vancouver Mortgage Broker Can Find You Cheaper Mortgage Rates

We not only have access to many different types of lenders, we are also apprised by our lenders about any changes in interest rates on a daily basis. We have hands-on information on the most updated mortgage rates from all our available lenders.

We can find you rates which are cheaper than traditional lenders such as banks. This means we can save you money by seeking out and finding you the best rates.

Why Should You Use a Mortgage Broker?

It boils down to 3 basic reasons. We don’t charge you anything. We offer greater convenience to ease you through the mortgage process. We can find you better rates and have access to multiple lenders.

Need a Vancouver mortgage?  Give me call and let us help!

Q2 2013 Bank Earnings – Mortgage Morsels

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Q2 2013 Bank Earnings – Mortgage Morsels

By Steve Huebl & Rob McLister, Editor,

CanadianMortgageTrends.com

If there’s one recurring mortgage theme from the Big 6 banks’ recent earnings announcements, it is “stress testing.” That’s where a bank simulates extremely adverse economic scenarios in a statistical model and then watches how its mortgages perform.

Stress testing has been a buzzword of late. Banks have been talking up their stress tests to show investors that things will remain under control if the floor drops out in the housing market.

Among other trends this quarter:

• Homeowners are increasingly renewing into fixed rate mortgages, which are more profitable for the banks
• Most banks are posting decreases in their insured mortgage portfolios (not surprising given last year’s insured mortgage rule tightening)

These and other observations can be found in the compilation that follows. It’s the fruit of pouring through quarterly earnings reports, presentations and conference calls. If you’re time-pressed, some of the focal points are highlighted, with our comments in italics. 

*********

 

Bank of Montreal
Q2 net income: $975 million (-5.3% Y/Y)
Earnings per share: $1.42

• BMO’s total Canadian residential mortgage portfolio stood at $81B. (Source)
• BMO said mortgage balances are up 13.7% Y/Y, with balances up 1.9% Q/Q, “reflecting (a) softer market.” (Source)
• 62% of the bank’s residential mortgage portfolio is insured, down from 70% in Q2’12. (Source)
• Average loan-to-value (LTV) on the uninsured portfolio is 59%. (Source)
• 64% of BMO’s portfolio has an effective remaining amortization of 25 years or less. (Source)
• Loss Rates for the trailing 4 quarter period were less than 1 basis point. (Source)
• 90-day delinquency rates have improved, dropping quarter-over-quarter and year-over-year. (Source)
• BMO’s condo mortgage portfolio is $11B with 56% insured. (Source)
• “…we’ve gained share in mortgages by bringing in new customers and encouraging them to borrow smartly with shorter amortization periods, and we’ve executed on cross-sell,” said William Downe, President and CEO. (Source)
• BMO said, “Tighter mortgage rules have restrained activity in the housing market, while weak global demand is holding back exports.” It added that “Strength in business loan growth should partly offset a slowing in consumer loans and residential mortgages.” (Source)
• BMO on regulatory changes: “In 2012 new residential real estate lending rules were introduced for federally regulated lenders in Canada including restrictions on loan-to-value (LTV) for revolving HELOCs, waiver of confirmation of income, debt service ratio maximums, as well as maximum amortization of 25 years and maximum home value of $1 million for high ratio insured mortgages (LTV greater than 80%). The regulatory changes resulted in some adjustments to loan underwriting practices including reducing the maximum LTV on revolving HELOCs to 65% from 80% previously.” (Source)
• BMO on stress testing:  “Residential mortgage and home equity line of credit (HELOC) exposures are areas of interest in the current environment. BMO regularly performs stress testing on its mortgage and HELOC portfolios to evaluate the potential impact of tail events. These stress tests incorporate moderate to severe adverse scenarios. The resulting credit losses vary depending on the severity of the scenario and are considered to be manageable.” (Source)
• “With respect to stress testing our portfolios, in a scenario that could be adverse, when we say that we are able to manage, it’s a combination of things. Firstly, I think even if our losses from that particular segment were to go up – and I’m not talking about the Consumer segment in total, because strangely but logically the losses really do not come out of the residential mortgages or from the HELOCs; they actually are felt more acutely in the Personal lines of credit as well as in credit cards,” Surjit Rajpal, EVP and Chief Risk Officer. (Source)
• Asked about BMO’s systemic problems in the U.S. with product origination, and issues surrounding incompetence around documentation, and whether BMO sees any systemic issues in Canada, Rajpal said: “Not that I can see, but if it was proven that systematically valuations were being done erroneously by somebody, then it could become an issue, but I don’t think that’s the case here; and so, it’s hard to see.” (Source)

CIBC
Q2 net income: $876 million (+8% Y/Y)
Earnings per share: $2.12 a share

• Residential mortgages were down $1.3 billion to $143.7 billion, “primarily due to attrition in our FirstLine mortgage business, partially offset by new mortgage originations through CIBC channels.” This follows a $1.1 billion decline in Q1. (Source)
  (We’ll evaluate CIBC’s mortgage market share losses in an upcoming story.)
• FirstLine mortgages stood at $37.1 billion, down from $48.2 billion a year ago. (Source)
• “Our exit from the FirstLine mortgage broker business continued to progress well, with both conversion volumes and spreads well exceeding our stated targets. The CIBC brand mortgage portfolio grew 12% year-over-year, which represented the 14th consecutive quarter of outperformance versus the industry,” said Kevin A. Glass, Chief Financial Officer and Senior Executive Vice President. (Source)
• 74% of CIBC’s Canadian residential mortgage portfolio is insured, with over 90% of this insurance being provided by CMHC. (Source)
• The average loan to value of its uninsured mortgage portfolio, based on March house price estimates, is 54%. (Source)
• Of CIBC’s $143-billion residential mortgage portfolio, approximately 46% is originated in Ontario, followed by B.C. at 20% and Alberta at 16%. (Source)
• “The credit quality of this portfolio continues to be high, with a net credit loss rate of approximately 1 basis point per annum,” said Thomas D. Woods, Chief Risk Officer and Senior Executive Vice President. (Source)
• Condos account for approximately 12% of the bank’s total mortgage portfolio, with about 72% of those in Ontario and B.C. (Source)
• 75% of the condo sub-portfolio is insured, and the uninsured portfolio has an average loan to value of 54%. (Source)
• David Williamson, Senior Executive Vice President and Group Head of Retail & Business Banking: “…With the runoff of the FirstLine book and a move to our branded products, happening in mortgages…the mix is moving more to profitable areas. And that’s where we get this kind of tailwind we’ve got, which is the impact of moving out of FirstLine and having a desire to get 25% of that into the higher-margin branded products. As I mentioned, we’re running quite a bit higher retention than the 25% and that’s having quite a positive impact. That’s one of the things that’s helping our NIMs, and frankly, offsetting the headwind, which everyone has, which is a slow interest rate environment.” (Source)

National Bank of Canada
Q2 net income: $434 million (-22% Y/Y)
Earnings per share: $2.49 a share

• Total revenues on personal banking were up $15 million or 2%, mainly due to higher consumer and mortgage loan volumes. (Source)
• Residential mortgages rose 4% Q/Q and 13% Y/Y to $34.8 billion in Q2. (Source)
• The loan-to-value for HELOCs and uninsured mortgages was approximately 59% and 55%, respectively.
• Mortgages in Toronto and Vancouver represented only 11% and 2% of National Bank’s books, respectively. 67.9% of National’s mortgage portfolio is in Quebec. (Source)
• During the six months ended April 30, 2013, the Bank acquired a portfolio of residential mortgage loans with a higher credit risk profile for a total amount of $328 million. (Source) “It’s one of three or four small portfolios that we purchased typically from banks that were exiting the Canadian market,” said William Bonnell – EVP, Risk Management. (Source)
•  The Bank does not have any significant direct position in residential and commercial mortgage-backed securities that are not insured by CMHC. (Source)
• “…the risk of economic slowdown is real and could adversely affect the profitability of the mortgage portfolio. In stress test analyses, the Bank considers a variety of scenarios to measure the impact of adverse market conditions. In such circumstances, our analyses show higher loan losses, which would decrease profitability and reduce the Bank’s regulatory capital ratios. To counteract the negative impact of an economic slowdown, the Bank has acted preventively by defining a contingency plan to guide its response in such an event.” (Source)

Royal Bank of Canada
Q2 net income: $1.94 billion (+26% Y/Y)
Earnings per share: $1.27

• Residential mortgage volume rose to $177 billion in Q2, up 5% Y/Y from $169 billion. Average LTV was unchanged at 47%. (Source)
• 42% of RBC’s residential mortgage portfolio was insured in the quarter, up from 40% in Q1. (Source)
• RBC repeated its wording from previous quarters, saying it has a “well-diversified mortgage portfolio across Canada” and that it continues to conduct “Ongoing stress testing for numerous scenarios including unemployment, interest rates, housing prices.” (Source)
• RBC states it has “Strong underwriting practices with all mortgages originated through our proprietary channels.” (Source)
• “We continue to see stable performance in our retail portfolios with provisions on residential mortgages of 2 basis points and 279 basis points for (credit) cards,” said Morten N. Friis, Chief Risk Officer. (Source)
• Peter Routledge from National Bank Financial asked this question: “Is there any reason to think that there is a systemic issue with appraisals that might rebound on the banks in the form of the CMHC refusing claims…How likely an outcome is that?” 
  
  Gordon M. Nixon – President and CEO, responded:  “…Most of the banks, including ourselves, use the emili appraisals service, which is CMHC’s own appraisal…They would do their own due diligence with emili. So, I don’t think it would be the nature of the appraisal service. I think where operational risk evolves is the representation of the fact. So, if they were to go back to the loan application and find that the facts on income or on rental versus cost, other costs are different than what was presented during the adjudication process, then I think you have technically an opportunity to negate the claim. But I don’t think it’s just on how you use appraisal. It’s really the adjudication process that would create most of the operating risk, which is why our bank, including I’m assuming most others, are very careful about our facts that are being submitted and how we put those applications together.”
  
  Morten N. Friis – Chief Risk Officer, added:  “…In terms of the use of emili…it is one of several tools that we use, depending on the property, we have full appraisal…So emili is a supplemental tool that we use in the appraisal process. To reiterate Dave’s point, the risk around refusal on the insurance all relates to the accuracy of the documentation that we provide. We have ongoing audits and reviews with CMHC and our track record with them is extremely strong. So, the point on the risk put-back (of claims to the bank), first of all, would be completely inconsistent with our historical experience with them, and as Gord was saying,I think it’s an extreme tail risk…They obviously as an insurer have some ability to dispute claims, but I think our track record on accurate documentation is pretty strong.” (Source)

Scotiabank
Q2 net income: $1.6 billion (+9.6% Y/Y)
Earnings per share: $1.23

• The bank’s residential mortgage portfolio totalled $188 billion in Q2, a 27% increase year-over year (or 7% increase excluding ING). Of this total, $169 billion is related to freehold properties and $19 billion is related to condominiums. (Source)
• Of Scotia’s residential mortgage portfolio, 58% is insured, unchanged from Q1. (Source)
• The uninsured portion has an average loan-to-value ratio of approximately 55%. (Source)
• “The credit risk in the Canadian residential mortgage portfolio remains benign and delinquencies are continuing to decline,” said Robert H. Pitfield, Group Head and CRO. (Source)
• Pitfield added: “The Canadian Housing market generally remains balanced between supply and demand. Reasonable economic performance has allowed consumers to manage debt levels well. However, we do expect some softness in the Canadian Housing market in the short-term.” (Source)
• “Credit quality and performance of the residential portfolio remains strong, a disciplined and consistent underwriting standards have resulted in extremely low loan losses and again have been stressed under a series of severe tests which confirm the appropriateness of our risk appetite,” Pitfield continued. (Source)
• Sean McGuckin, EVP and CFO, said, “In the last nine months on the mortgage portfolio you’ve seen that the customers who are renewing their mortgages or came in on a variable basis are now taking fixed term mortgages, which are giving also additional better margins.” (Source)

TD Bank
Q2 net income: $1.72 billion (+1.8% Y/Y)
Earnings per share: $1.78

• TD’s residential mortgage portfolio was up slightly to $156 billion in Q2, up from $155 billion in the previous quarter and $145 billion in Q2 2012. (Source)
• TD says its real estate secured lending (RESL) volume increased 4% Y/Y (Source)
• The bank’s 3% Y/Y growth in personal lending reflects “a slowing housing market and continued consumer deleveraging.” (Source)
• TD adds its RESL portfolio, including securitized mortgages, benefits from the fact that 68% of the portfolio is government insured, and 73% of HELOCs are in first lien position (down from 75% in Q1) and a further 23% are in second to a TD first (up from 20%). (Source)
• When asked about the substantial decrease in TD’s insured portfolio and increase in its uninsured portfolio, Tim Hockey, Group Head, Canadian Banking, Auto Finance, and Credit Cards, responded: “We’ve been quite concerned about the overall growth rate of real estate secured lending for the last number of years. And so the regulatory changes that have actually been taking place over a number of years, quite prudently implemented over a long period of time, are actually having almost precisely the effect that we would have expected, which is a slow landing.” (Source)
• He added: “…Because of the changes around the high ratio mortgage versus conventional, all the mortgage originations are down year-over-year, but conventional are down less. So in other words, what you would ascribe to be first-time home buyers have actually had more of an impact, which you could say is probably bang-on what the regulatory changes would have expected.” (Source)
• “We’re clearly seeing that even notwithstanding a low interest rate environment, and obviously there’s been lots of conversation about that rate, that consumers are not backing up the truck and actually creating a frothy housing market as low interest rates are usually incenting them to do.”
• “In terms of channel originations, all channels are down year-over-year. In our particular case, our broker channel is down less, but that I would ascribe much more to service improvements and changes we’ve made in our own channels as opposed to an industry phenomenon,” Hockey continued. (Source)
  (TD’s broker channel has seemed to get more competitive this year.)
• “I would say pricing is aggressive, but not unduly so for a spring market. And clearly it was a cold spring, so that does have an effect on the activity… There’s some speculation [on], is there going to be a resurgence? But if you talk to Craig Alexander at TD Economics, he would say our expectation is still for having a fairly tepid spring mortgage market.” (Source)
• “Every time we do [stress tests], and we’ve become quite expert at doing stress tests, it continues to show that in Canada, given the nature of this business, given the government guarantees and the insurance portfolio, that we continue to make money in Canadian banking overall – we don’t go into the negative.”
• “…Three or four years into the (mortgage rule) changes, [the market is] moderating exactly as expected. But if we’re wrong, at whatever percentage of likelihood that is, then we still feel good about the stress test(s).” (Source)
• “On the stress tests, it’s really not the mortgage portfolio that you’re worried about…If you paint that type of scenario where you have such a reduction in house prices across the country, it’s really your other credit portfolios that would be more of a concern – the unsecured credit portfolios, then your commercial portfolio. So we stress that as well, and really to the deepest scenario that we can paint, the Canadian operations remain profitable. It’s not a good picture but it’s a profitable picture,” said Mark Chauvin, Group Head & Chief Risk Officer. (Source)

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Note: Transcripts are provided by third parties like Morningstar. Their accuracy cannot be 100% assured.

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By Steve Huebl & Rob McLister, Editor,

CanadianMortgageTrends.com

 

 

Reasons to Avoid FSBO (For Sale by Owner) – Consult with a Vancouver Mortgage Broker

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Reasons to Avoid FSBO (For Sale by Owner)

For Sale by Owner or FSBO might sound like a good idea on paper but it could it end up costing you big time.

One of the major appeals of FSBO is that people believe it will make them more money because you don’t have to pay a commission to a realtor. Sounds like a great idea, because how hard can it be?

You probably think all you have to do it advertise the home on some website, put a “For Sale” sign on the yard, or an ad in the local paper. Prospects drop by and someone falls in love with your house and you sell it. It sound simple but here a few hard facts you should consider before you attempt to do so.

You Will Not Get a Good Real Estate Listing

Realtors have one significant advantage over you and that’s because only a licensed real estate broker can access the Multiple Listing Service which is also known as the MLS for short.

You can’t! And, that is a big disadvantage because this is actually what most serious homebuyers use when they are looking to buy a home. Also, if you think you’re going to be avoiding out of pocket expenses then think again. Listing you home on any other website or in the papers is going to cost you money.

FSBO’s Aren’t Very Reputable

Credibility is a very big concern when you are investing $500,000 in buying a new home. The Vancouver real estate market is hot which means home prices are high. Buying a home is the biggest single investment that most people make in their lifetime.

Let’s face it – is a new buyer really going to believe you when it comes to making a full disclosure about any issues they should know about when they are buying a house from a complete stranger? Although I have no doubt that most people are relatively honest, it’s just bad business if you don’t disclose everything that’s negative about your home.

You could end with more costly litigation issues because you could end up being sued, and it might not even have been your fault. The issue or problem might only have appeared after you sold the house and you had no legitimate knowledge about it. You might escape having to pay a judgement, but there’s still no avoiding the costly legal fees involved.

 Do You Have the Time It Takes to Sell a Home?

Real estate agents work wacky hours. They work when their clients need them and not the other way around. From evenings and weekends, when a client wants to see a house, it’s their job to do their best to accommodate that client.

And, if you and your partner are working, will you be able to take the time from work to show someone your home? Are you prepared to give up your evenings and weekends to accommodate a prospective buyer?

Are you really going to be getting quality viewers or just a bunch of time-wasting curious tire kickers who have nothing else to do? A real estate agent gets a feel about their clients and in most instances their clients are serious about buying, looking at and possibly putting in a bid on your home.

Another question you might want to ask yourself is whether you really know what it takes to prep a home for sale? If you don’t know what you’re doing and what it takes to sell a home, then you could end up wasting a lot of your valuable time and getting nowhere in the end.

Real estate agents are trained at their job and know what they’re doing so save yourself a bunch of headaches and hire a professional to the job for you.

101 Series – How to Buy a Vancouver Home with a Poor Credit Score – Bruce Coleman Vancouver Mortgage Broker

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How to Buy a Vancouver Home with a Poor Credit Score

Spending beyond your means is common today. Sometimes you get financially jammed up and get behind on those blasted credit cards and other bills.

This scenario can negatively affect your mortgage application. If you’re still struggling to make ends meet then buying a home should maybe be put on hold.

But, if you’re back on track and caught up on your debts then maybe you might be ready to tackle a new home. Your credit score is a reflection of how well you can manage the responsibility of taking on a mortgage.

There are two strategies that you can adopt to improve your chance of getting approved by lenders as the new B20 regulations (Underwriting Guidelines for Residential Mortgages) introduced by the Feds have made getting approved even more of a challenge.

Worst Case Scenario – Recent Bankruptcy

If you’ve recently declared bankruptcy or have made a credit proposal, then your best strategy to use in not only getting approved but qualifying for a decent rate is to hold off and wait it out for awhile.

Your only option at best in these circumstances when it comes to applying for Vancouver home mortgages is to hope that you get approved for a subprime rate. These were somewhat easier to get before the new regulations.

Right now however, it’s a tough sell as many lenders have tightened their belts and are performing a more rigorous due diligence when it comes to applications.

The majority of conventional lenders won’t even give you the time of day until you’ve managed to get 2 years beyond your bankruptcy discharge or credit proposal. You will also need to have qualified for at least 2 sources of credit that have at least a $1000 or $2000 limit with a 2 year track history of paying your debt on time.

If this fits your situation then you might be concerned how you are even going to get approved for any credit card. Well, you can as there are credit cards which you can apply for and these are called “secured credit cards.”

These “secured” credit cards require a security deposit before you are approved but they can help reinstate your credit rating and get you back in financial shape again. You also want to make certain that you choose a lender which will guarantee they will refund your security deposit after a certain period of time.

To rebuild the confidence in lenders you need to make sure that all your bills are paid on time including your household bills so you can rebuild your credit score again. You have to make a plan and stick to that plan and above all else you must be patient.

The More Expensive Approach

Even though you have declared bankruptcy or going through the process of a credit proposal it could be that your financial situation has improved so dramatically you believe you can swing a mortgage. You want a home now, but is it possible even with your circumstances?

It’s by no means impossible but you better be prepared to pay the price. Your best bet will be with a subprime mortgage and that’s going to mean higher interest rates. You will also have to be prepared to put down a fairly substantial down payment of at least 25% if not even more before a lender will give your application any credence.

You may also have fork out between 1 – 2%, and maybe even more for a broker or lender’s fee.

It’s a lot tougher to find subprime mortgages but they are out there.

If you got the cash for a down payment and are still determined to buy a home then you most definitely want to use an experience mortgage broker like me to evaluate and assist with your particular circumstances.

Bruce Coleman, Vancouver Mortgage Broker

TD Joins RBC in Raising Fixed Rates – Consult with a Vancouver Mortgage Broker

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TD Joins RBC in Raising Fixed Rates

 By Rob McLister, Editor, CanadianMortgageTrends.com”

Taxpayer-free housing finance change coming to Canada – Bruce Coleman – Vancouver Mortgage Broker

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Finn Poschmann, Special to Financial Post 

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The Bank of Nova Scotia, a few days ago, received permission from the Securities and Exchange Commission to market to U.S. retail investors what are known as covered bonds. In pursuing SEC approval for market access, Scotia was following a trail blazed by the Royal Bank of Canada; market rumour has it that the Bank of Montreal is on the same path.

There is no madness to the approach; there is method. Change is underway in Canada’s housing finance system. More of it will be done without the taxpayer backing, or insurance, that common financing channels currently enjoy, by way of the Canada Mortgage and Housing Corporation. RBC’s covered bonds are backed by uninsured residential mortgages – so too will be Scotia’s, in future, and so will others. Lenders, mostly banks, who have not already developed the financial instruments and skills to diversify their funding sources will do so, because they must. This is all to the good.

Background. CMHC, a Second World War era Crown agency intended to help returning vets find homes to live in, until recently grew in leaps and bounds.

CMHC became a source of systemic risk because its mortgage insurance products, which insulate lenders from loss when the loans they make go bad, for years backstopped easy loans, mortgages with long amortizations, and cheap home equity lines of credit that Canadian consumers took up in droves.

Scotiabank, RBC to lead the way with covered bond issues

As consumer debt rose, and housing investment bubbled, so did Canadian house prices, over the past decade, well outstripping income growth. Low interest rates helped, but so too did easy credit terms – with few incentives, owing to CMHC insurance, for lenders to hold back on extending them.

Shrinking CMHCs oversized role in the mortgage market, and taxpayer exposure, became overdue, and Ottawa has gently reined in CMHC and ease of access to its insurance products. Consumer debt growth has slowed, and housing markets have tapered – to this point, gently so.

Alongside, the covered bond market has become important to housing finance. Covered bonds are prized by some investors, because normally they are backed by highly rated assets – like good quality residential mortgages – as well as the security of the fully bank-backed, bankruptcy-remote special investment vehicle that sponsors create to fund them. Their dual cover enables the bonds to attract high ratings and go to market at low spreads, sometimes as low as 10 to 20 basis points over similar term government bonds, perhaps 50 basis points in the U.S. market today – and that means cheap financing all round.

However, Canadian banks’ bonds have long have been shut out of some markets. Many European institutional investors, for instance, are forbidden from buying covered bonds sponsored by issuers who do not operate within a legislated covered bond framework that specifies creditor priority in the event of a bankruptcy.

Changing the Canadian legislation to accommodate market needs was a minor matter, and the government did so in Finance Minister Jim Flaherty’s 2012 budget. Also helpful was establishing CMHC as a bond registrar.

The changes, however, came with a quid pro quo attached. Canadian covered bond issuers would get the legislative framework they coveted, but under conditions: no insured mortgages, whether insured by CMHC or others, would be allowed into the pool of assets backing the bonds, and no writing of contractual covered bonds outside of the legislated framework.

RBC was primed to take advantage of the new rules – their covered bond pools, unlike those of all other issuers, already contained no insured mortgages. And, owing to the 2012 legislative changes, that allowed them to be quick out of the gate in acquiring SEC registration and, with it, access to U.S. buyers who seek index-eligible bonds, better price transparency and higher disclosure standards. For other issuers, the route has been and will be longer and more complex.

And there will be bumps. Covered bonds are not for all issuers; the regulatory and legal hurdles are big, and profitability in the market depends on scale. Smaller market issuers of commercial paper backed by insured mortgage assets will likewise be pinched by the prohibition on taxpayer-backed mortgages in their securities. That means less access to funding and bigger spreads for them.

And Canadian banks eventually will bump into the regulatory policy cap on covered bonds: they may not exceed 4% of bank assets, and the mortgage market is many times bigger than that. A move to expand the cap will encounter headwinds from the Superintendent of Financial Institutions. And from deposit insurers, who will worry that the bigger the share of assets that are bankruptcy remote – and therefore remote from depositors’ claims on them in a bankruptcy – the more costly will be deposit insurance for everyone else.

There is a broader challenge, too, surrounding another alternative, developing a residential mortgage-backed securities (RMBS) market that operates without CMHC guarantees – there isn’t one in Canada, and it will take time to develop both the product and investors’ comfort with it.

Which means there is work to do, and policy and legislative change to come in due course. But a path to a housing finance market that is less dependent on government backing is surely the right one, and taxpayers should rest easier when we are safely on it.

Finn Poschmann is vice-president, research, at the C.D. Howe Institute.

Spring puts bounce back in Canadian home prices – Bruce Coleman – Vancouver Mortgage Broker

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TORONTO — Canadian home prices jumped in May from April as a spring rebound in real estate continued in most cities, offsetting a couple of weak markets, the Teranet-National Bank Composite House Price Index showed on Wednesday.

The index, which measures price changes for repeat sales of single-family homes, showed overall prices rose 1.1% in May, the ninth time in 15 years that May prices were up 1.0% or more from April.

The index was up 2.0% from a year earlier, which matched the April rate and marked the smallest 12-month gain since November 2009.

The report suggested Canada’s housing market regained strength in the spring after a long slow winter of decline following the government’s move to tighten mortgage lending rules in July 2012.

Residential real estate activity typically picks up in the spring, and economists have been waiting to see if demand will return after a dramatic slowdown since the middle of 2012.

The report echoed one released on Monday by the Canada Mortgage and Housing Corp that showed housing starts jumped much more than expected in May from April, suggesting residential construction may contribute to Canadian economic growth in the second quarter.

The Teranet data showed prices rose in May from April in nine of the 11 metropolitan markets surveyed, led by a 2.3% gain in Calgary and a 1.9% rise in Edmonton. Prices were up 1.4% in Hamilton, 1.2% in Montreal and Winnipeg, 1.1% in Ottawa, 1.0% in Toronto, 0.8% in Quebec City and 0.7% in Vancouver.

They were flat in Halifax and down 0.8% in Victoria.

Year-on-year prices dropped in two cities — Victoria, where they were down 4.1% from May 2012, and Vancouver, where prices fell 3.2%. British Columbia had the hottest housing market going into the downturn.

Compared with May 2012, prices were 6.5% higher in Quebec City, 5.8% higher in Calgary and Hamilton, 4.6% higher in Winnipeg, 4.0% higher in Edmonton, 3.9% higher in Toronto, 2.3% higher in Halifax, 2.0% higher in Ottawa and 1.9% higher in Montreal.

© Thomson Reuters 2013

101 Series: Tips for the First Time Home Buyer – Ask Bruce Coleman – Vancouver Mortgage Broker

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Buying a home for the very first time can be both very daunting and stressful. The investment and expense can be significant and for many people it is the biggest financial single investment most of you will make in your lifetime.

Careful financial planning and preparation is the best way to make the process a lot more painless and ensure your success in securing a Vancouver home mortgage.

Advantages of Home Ownership

The first advantage of owning a home is that you won’t be flushing all that rent money away. Although housing prices do fluctuate they do not do so anywhere near as drastically as the whacky world of the stock market.

With stock market investments, you can expect the Feds to grab up to half the money you make. With a home purchase however, as you make money through a combination of appreciating house prices and by building equity, the profit you make is all yours to keep.

You can also increase the potential profit on your home by completing some quality home renovations. Some renovations such as updating your kitchen and modernizing your bathrooms actually give you a very decent ROI (Return on your Investment).

Another advantage is that is you can also borrow against the equity that you have built in your home such as through a second mortgage or through a reverse mortgage such as CHIP (Canada Home Income Plan).

The money you borrow can be used in a variety of ways such as paying for your kids’ college tuition or taking that dream trip you always wanted.

The bottom line is that investing in a home is a good investment as it provides you with a number of advantages that wouldn’t be available to your otherwise.

Preparation Tips for a First Time Home Buyer

The most pressing consideration about buying a new home is how comfortable you are in taking on the financial responsibility. You want to feel comfortable having long term employment prospects and whether you would be able to cope if you or your partner lost your job.

You can use a mortgage calculator to help you look at a variety of scenarios. A calculator will give you an idea of the how long a term or amortization you will need as it compares to your down payment. It will also help you with budgeting.

Most creditors look at what is known as your “debts service ratio” which is how much of your income would be used to towards all your household debts such as a mortgage payment, property taxes, utilities and other personal debts. The maximum amount accepted by most lenders comes in around 32%.

Your next big consideration is the amount of your down payment. If you have less than 20% of your available savings to use for a down payment then you will also have to obtain mortgage insurance such as through CMHC (Canada Housing and Mortgage Corporation). This is an additional cost on top of you mortgage payment.

You also have to keep in mind the amount of closing costs involved in going through the mortgage process. Closing costs entail legal fees, appraisals, a home inspector and other costs which can work out to about 1% to as high as 2 1/2 & of the purchase price on your new home.

Ready for Your First Home?

Although you might be tempted to simply go through your bank, this can may not as advantageous as you think. You may not be approved or you may not be getting the best rates. A mortgage broker such as myself has access to dozens of lenders and we can walk you through the process and make it a lot less stressful. We may even find you better mortgage rates which can save you a ton of money over the life of your mortgage.