Ariana Leroux Mortgage Blog

Many first time home buyers stay away from buyer’s agents because they think it will cost them money. Well, the opposite is really true; a buyer’s agent will likely save you money. How, you ask? Well, most often the buyer doesn’t pay the agent, and the buyer gets the benefits of an agent’s knowledge, expertise, and negotiating skills. See our post about the benefits of a buyers agent for more info on how they can help. So, how does the buyer’s agent get paid? With the typical sale, a seller pays an agent to list the property for sale. Within the listing contract this listing broker says they will offer a specified percentage of their commission to a buyer’s agent, if there is one. So, the seller is paying a commission to the listing broker, and the listing broker is paying a commission to the buyer’s agent. This is the way most deals work.   Where the buyer needs to be careful is with FSBO’s (For Sale by Owner) and lower commission MLS deals. It’s becoming m...

November Housing Starts down 3.6% from October   Housing starts in Canada were trending at 214,680 units in November, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) 1 of housing starts. The standalone monthly SAAR was 196,125 units in November, down from 203,487 in October. “As expected, housing starts remained below their recent trend and continued to fall for a third straight month. This decrease was mainly attributable to declines in single-detached and multi-unit housing construction in Ontario and British Columbia, resulting in part from a decline in the pace of pre-sales relative to that in late 2010 and early 2011,” said Mathieu Laberge, Deputy Chief Economist at CMHC. “The drop in starts in Atlantic Canada was primarily due to a decrease in multi-unit housing construction in Halifax, following higher than normal activ...

December 04, 2012 The BoC Rate Meeting: Nothing to See Here Today’s Bank of Canada rate announcement was another yawner. No one expected rates to rise. Analysts merely wanted to see if the Bank would drop hints on its future rate-setting plans. It did, but the new clues weren’t much different from its previous guidance. For mortgage watchers, the long and short of it was this: the Bank maintained its rate tightening bias, but short-term mortgage rates (which the BoC controls) are unlikely to jump near-term. The Bank’s outlook can largely be summarized in these snippets from today’s announcement : The global economy remains “vulnerable to major shocks from the U.S. or Europe.” In Canada, “…Underlying (economic) momentum appears slightly softer than previously anticipated…” Our economy has a “small degree of slack” “…The pace of economic growth is expected to pick up through 2013.” "Over time, some modest withdrawal of monetary policy stimulus will lik...

Governor  Mark Carney leaving - what now for Canada? Governor Mark Carney Mark Carney is leaving the helm of the Bank of Canada (BoC) in July of 2013 and heading  to the Bank of England. The governor of the  BoC is widely respected and is considered to  be the one responsible for steering the  Canadian economy through the global  financial crisis. Under Carney's leadership,  Canada has become the envy of other world  powers - banks didn't fail and the economy  has grown. Carney is seen as a strong central banker and  financial regulator and his approach to  monetary policy has triumphed. It started in  March 2008, when he decided to cut the  bank's overnight rate by 50 basis-points,  which was totally opposite to what other  countries were doing. His instincts have  proven to be correct. Then in April, 2009 he introduced a nonstandard monetary tool - the co...

In a slowing market, it is that much more effective. It was a prudent move....  The real estate industry has ramped up its attack on rules making it harder to borrow but its challenges face one big obstacle — mortgage restrictions are working exactly the way the federal government wants them to. In the past week the Canadian Association of Accredited Mortgage Professionals weighed in with complaints that Ottawa’s restrictions were killing consumer confidence and even raised the stakes further by suggesting the entire Canadian economy was at stake. Toronto builders joined the fray, calling out the federal government for rules it maintains have a lot to do with the cooling market in the city that saw sales in October dip 14% below their long-term average. But Finance Minister Jim Flaherty has given no indication he is ready to reverse course on his tightened restrictions. There’s also the argument that it wasn’t the rules that have sabotaged the market, but rather an...

                                          Heads Up, In Regards to OSFIs B20 CHANGES While most of us already have felt the immediate changes of the 30 year amortization to 25 year, and the Home Equity Line of Credit change from 80% Loan to Value to 65% Loan to Value, some of you may not know some of the other changes as well for Underwriting Guidelines and there fore your immediate mortgage approval.  For Example financial institutions will be raising the Qualifying Rate on Variable, 1, 2, 3, and 4 year fixed terms to the Bank of Canada's current Benchmark rate (Currently at 5.24%). This comes into to play regardless of Loan to Value. Where as in the past with 3 years or under we could use the 3 year Qualifying Rate or sometimes best rate. Also the heat component of the ...

Smart Cookies Six questions to ask before you buy a home Angela Self The Globe and Mail Published Thursday, Oct. 14 2010, 5:00 AM EDT Last updated Thursday, Sep. 06 2012, 3:58 PM EDT Wondering if you should continue renting or take the plunge into home ownership? To help you clarify this debate, we've compiled a list of questions from various professionals associated with a real estate transaction. Answering the right questions about the early stages of the home ownership process will likely help you sit confidently with your decision to stay put, or leap with eyes wide open into the market. Why do you want to buy a house? This is an important question for first-time buyers, according to Sarah Wilson, a Calgary-based Certified Financial Planner and consultant with T.E. Wealth . First-time buyers have to ask themselves if they want a home because their friends are buying and they think it's the next step or because it actuall...

ROB CARRICK The Globe and Mail Published Sunday, Oct. 24 2010, 7:11 PM EDT Last updated Thursday, Sep. 06 2012, 3:58 PM EDT The debt threat facing this country begins at home. Mortgages are by far the biggest component of a national debt load that has recently prompted warnings from the Governor of the Bank of Canada and one of the country's largest banks. Their concerns raise questions about the way in which financial institutions ensure people can afford the mortgages they need to buy a home. Raising a family and maintaining a home require finesse and constant financial manoeuvring. And yet, the housing affordability measures used by bankers are strikingly simplistic. In essence, they provide a snapshot of a home buyer's ability to meet his or her basic housing costs and other debts based on gross monthly income. Bankers say these calculations serve them well, but others question how effectively they size up someone's ability to carry the c...

Great Article from National Post...  Garry Marr Monday, Nov. 19, 2012 The Canadian Association of Accredited Mortgage Professionals says since new rules went into effect in July, 2012, resale housing activity is 8% lower between August and October than a year earlier. Reuters New borrowing rules have hit homeowners so hard that it could undermine any economic recovery in Canada, says a new study from the country’s mortgage brokers. The Canadian Association of Accredited Mortgage Professionals says since new rules went into effect in July, 2012, resale housing activity is 8% lower between August and October than a year earlier. Among the changes instituted by the government was a lowering of allowable amortization from 30 years to 25 years for consumers borrowing with mortgage default insurance which is backed by the federal government. A longer amortization allows consumers to lower their monthly payment and qualify for a larger loan at the expense of pa...

From October 23, 2012, The Bank left its policy rate unchanged, which means that prime rate should exit 2012 at the same level it’s been for 25 months, 3.00%. Carney & co. said that, “Over time, some modest withdrawal of monetary policy stimulus will likely be required.” That’s vaguer than prior projections but still a signal that the next rate move should be up. Here’s more from the Bank’s statement from Oct 23, 2012: “Core inflation has been lower than expected in recent months…” “Total CPI inflation has fallen noticeably below the 2 per cent target…and is projected to return to target by the end of 2013, somewhat later than previously anticipated.” “Housing activity is expected to decline from historically high levels, while the household debt burden is expected to rise further before stabilizing by the end of the projection horizon.” “The timing and degree of any such withdrawal (in rate stimulus) will be weighed carefully against global and domestic de...

I got this from Canadian Mortgage Trends.com - Rob McLister ... it is a great article! In regards to payments etc, and I do like the thought, of since mortgage rates are low, why not make your payments like it is a normal rate, you will make life mortgage free quicker :) Just some food for thought.   I am kinda giggling as well, since BMO were the ones to really get this 2.99% rate going, the potential long term results are what really is being surveyed. ... read below and enjoy for Monday Morning!   October 28, 2012 The “Significance” of Rising Payments BMO published a survey last Tuesday that got a ton of media play. It stated that 72% of households: “ would feel a significant strain if they were to experience a modest increase in monthly mortgage payments... ” Yet, despite the fact that Canadians are highly leveraged, this finding seemed suspicious. So, we investigated. It turns out that mortgage payment sensitivity is not as dire as last week’s headline...

Cash Back for Down Payment to go the way of the DODO Bird A source at the bank confirms that it is scrapping the offer in light of banking regulator OSFI ’s B-20 Underwriting Guidelines . OSFI has decreed that “Cashback should not be considered part of the down payment.” Most Federally regulated lenders must therefore eliminate these offerings no later than October 31, 2012 . Cashback mortgages - essentially 100% financing - are a niche product that are seldom appropriate for owner-occupied purchases (sometimes they make sense for rentals). There are exceptions, but most of the folks who want them are simply a bit too eager to buy. The Canadian Association of Accredited Mortgage Professionals (CAAMP) supports OSFI ’s call to end cash back products in lieu of 5% down payments. “Borrowers should have ‘skin in the game’,” it says . There aren’t many federally-regulated lenders with 5% cashback down payment mortgages left, Scotiabank stopped there's September 15th, 2...

  The Bank of Canada is leaving its key lending rate unchanged at one per cent.  The announcement came Tuesday morning, in a statement that notes the U.S. economy is expanding at a "gradual pace," indicators point to a "continued contraction" in Europe, and growth has slowed "more than expected" in China and other emerging economies. For Canada, the statement paints a modestly optimistic outlook that singles out the rising price of commodities produced here, including oil, in recent months. The statement notes that exports remain weak, however, and housing activity is expected to pull back from historic highs. While the performance of the global economy has also constrained Canadian economic activity, the Bank nevertheless projects a "moderate expansion." "Following the recent period of below-potential growth, the economy is expected to pick up and return to full capacity by the end of 2013," the BoC said, pointi...

  From TMG, mortgage blog... Thurs Sept 13th, 2012 Is household debt a threat to our economy? Here are the facts: Canadian household debt is indeed equal to 154% of disposable income  The housing market is softening and prices are going down in many areas of the country Canadians will be impacted by higher interest rates Even given these facts; it’s unlikely that Canada will experience a financial crisis. Household debt has been increasing steadily over that past 30 years as interest rates continue to decline but, for the most part, Canadians gear their borrowing to what they can afford.  Jobs are holding steady and business is confident about future prospects. So, lower interest rates mean less money goes to servicing debts. In accumulating debt, Canadians also have a large asset, namely their homes. And although some in the financial community are concerned about the massive debt, Eric Lascelles, chief economist at RBC Global Asset Management...

                                                          SUMMER Rate Update!  Build Rates 5 Year Fixed              3.99% (9 Months)    4.24% (12 Months) 5 Year Variable          Prime  (9 Months)    Prime  (12 Months) Still have the 2.99% 5 year fixed rate (insured). Mortgage must close withing 45 days, not available for pre approvals. 3.19% for 120 day rate hold, 5 year term! 2.49%    1 Year Rate 2.59%    2 Year Rate 2.69%    3  Year Rate 3.09%    4  Year Rate 3.69%    7  Ye...

Taken from the TMG Mortgage BLOG... Friday, August 03, 2012 What can we make of the low interest rate environment we are now seeing? Fixed rates are dropping and one lender has dropped its variable rate. Will more lenders follow suit? When the five-year fixed rate fell to under 3% earlier this year, Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney cautioned consumers and warned lenders to be careful with debt loads. Clearly it didn’t slow the robust housing market – purchases and refinances continued at a pace not seen since 2007. Then Flaherty announced some changes to the mortgage rules to slow down the pace of rising debts. So what happened? We had a couple of weeks of quiet as the summer was also upon us. It appears both lenders and investors are not comfortable with a lull. They have been taking advantage of lower bond yields, which accounts for lowered fixed rates. Even the seven and 10-year rates ar...