Canadian Mortgage and Real Estate News

Where housing prices are rising the most

2011-05-12T07:48:00.000-06:00

Where housing prices are rising the most

Government of Canada Takes Action to Strengthen Housing Financing

2010-03-02T08:06:00.000-06:00

Government of Canada Takes Action to Strengthen Housing Financing:

The Honourable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.
'Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals,' said Minister Flaherty. 'However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing.'
The Government will therefore adjust the rules for government-backed insured mortgages as follows:
Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation."

Canada's recession resilience (article below)

2009-04-23T06:49:00.000-06:00

There will be lots of information coming out today. Bank of Canada governor Mark Carney will be explaining (maybe vaguely) the reasons for the BoC rate drop and expectations we should have for the future, quantitative easing (printing money), and how this will all affect the Canadian economy. Here is an article from the Financial Post that expands on this. Keep an eye on this as it will affect bond rates/yields which could affect mortgage rates.

Terence Corcoran: Quantitative schemes at the Bank of Canada
Posted: April 22, 2009, 9:17 PM by Ron Nurwisah
Terence Corcoran, central banks
On Thursday we will learn what the Bank of Canada will do next to stimulate the economy, how it will apply the now famous “quantitative easing” phase of its ongoing effort.The bank is already giving away money, setting an overnight rate of 0.25% — “virtually zero,” as former governor John Crow says in his commentary. At the chartered banks, astute mortgage borrowers can almost lock in less than 2% for the next year, assuming borrowers are willing to take a flyer on current Governor Mark Carney’s statement that it will not be changing rates again for the next year.With mortgages going for next to nothing, you might expect house sales to be climbing. But they are not, at least not yet — an indication that there is more to getting an economy moving than monetary policy and interest-rate manipulation. Nor has there been much to show from the deficit spending extravaganzas announced by Ottawa and the provinces. And so now the Bank of Canada is apparently set to announce the next phase in its attempt to kick start borrowing and lending. The bank has already bought up more than $30-billion in various securities from private institutions over the last six months in an attempt to ease credit pressures in some markets. But it has done so carefully without creating excess monetary stimulus that would risk future inflation. This next phase will be different, “unconventional,” according to a Bank of Canada description.Until now, no Canadian central banker has ever used the words “quantitative easing.” Only in the last few weeks has the Bank of Canada issued quick definitions of the phrase. What is quantitative easing? It’s the bank’s “purchase of financial assets through creation of central bank reserves.” The result is twofold. First, the new reserves are also known as “printing money.” The reserves provide the chartered banks with new ability to increase their lending to business and households. Second, by buying financial securities, the Bank of Canada would be increasing the supply of money to a particular market, thereby driving down the interest rates on those securities. If the bank were to buy 10-year corporate bonds, for example, then 10-year bond rates should decline.So that’s the theory. Quantitative easing is supposed to do two things: increase the money supply via chartered bank expansion of lending and reduce longer-term interest rates in areas of the market the Bank of Canada usually has no influence over. The other technique, called “credit easing,” also involves buying private market securities, but in a way that does not necessarily increase the money supply and the risk of inflation.In its monetary report on Wednesday, the Bank is expected to more precisely identify how, when and even if it will start engaging in the business of buying up financial securities so as to drive down longer-term interest rates and increase the money supply beyond the rates of increase already taking place.The risks in this next phase are numerous. As John Crow reports, eventually the big run up in the Bank’s assets has to stop and the process will have to be reversed. The financial securities will have to be sold back into the market. Running around with mop, pail and squeegee to scoop up the excess monetary stimulus will require a degree of central bank fortitude that does not always come easy. The political pressure on central bankers to become what Mr. Crow calls “team players” in keeping growth up at the risk of higher inflation could weaken their resolve. In an odd note on this subject, the Bank of Canada’s recent Q & A says that “if a profound disagreement were to occur between the Bank and the government, the Minister of Finance could issue a written directive to the Governor ... This would most likely result in the Governor’s resignation.”That’s never happened, adds the bank, perhaps hopefully.Another uncertainty is that the quantitative and credit easings may not work. The credit markets and the economies of the world are stalled due to lack of confidence and a market belief that the investment climate is still too risky. The cause of the risk is not interest rates or lack of ready cash or liquidity. There is no absolute proof of this, but investors are likely holding back due to growing concern over government involvement in the economy, especially from the United States, the most crucial drag on the Canadian economy. The Obama administration is setting itself up as controlling manager and chief lever-puller of the banking and financial system, the auto industry and the energy markets. No amount of quantitative easing or stimulus activity in Canada can overcome that drag.
Canada's recession resilience
The Globe and Mail Report on Business RICHARD BLACKWELL
April 23, 2009
The International Monetary Fund's report yesterday said the world is in the deepest recession in 70 years. That's pretty depressing. Did they have any good news?
The IMF's world economic outlook was a discouraging read, but there was a little positive news about Canada.
For one thing, the report noted that Canada has had just three recessions since 1960, far fewer than most other countries. (New Zealand has had 12, Switzerland and Italy have each had nine.)
The report also said that many countries have been in economic decline for a long time, while ours is relative recent. Ireland's economy has been shrinking for almost two years, for example, and Denmark has been in recession for five quarters. Canada only fell into recession in the last quarter of 2008.
Still, the IMF notes that worldwide recessions prompted by financial crises are more severe and the recovery is slower than other downturns.
We hear a lot about the shift from full-time employment to part-time, but are there other measures of the quality of jobs available?
CIBC World Markets does an interesting analysis of the job market that looks at the "quality" of jobs. When full-time employment shrinks and the number of part-time jobs grows - as it has recently - the quality of the job market decreases. Similarly, when self-employment increases as regular jobs disappear, quality declines.
Still, while both those considerations have contributed to a decline in job quality, there is another factor that has offset the effects, CIBC says. Because so many job cuts have been among low-paying jobs (often held by younger workers), and high-paying positions have been relatively immune, the overall quality of employment has not changed much, the economists say.
That's not much comfort to those who are unemployed, but it is one other way of looking at the job picture in a macro light.
I understand that hourly workers at GM, Chrysler and Ford do not pay directly into their company pension plans. Does this mean they can also contribute to their own RRSPs, and effectively have two pensions?
The hourly auto workers are subject to the same rules as everyone else, which means they have a "pension adjustment" to their RRSP contribution limits, related to the value of the contributions the company makes to their defined-benefit plans.
This means that any worker's annual RRSP contribution room will be reduced considerably, depending on how much the employer puts into the pension. The adjustment depends on the total going into the plan - it doesn't matter who makes contributions.
Many workers with defined-benefit plans have some room for RRSP contributions, but it is often very limited.

CMHC Drops 100% Financing and 40 Year Amortizations- By Oct 15th, 2008

2008-07-23T14:26:00.001-06:00

• 100% financing (5% will now be the minimum down payment on an insured mortgage)
• 40 year amortizations (35 years will be the new maximum on insured mortgages)

The government will also require the following with all new mortgages it insures:
• A new 620 minimum credit score requirement
• New loan documentation standards

The new rules will take effect October 15, 2008. This affects CMHC insured mortgages as well as mortgages insured by Genworth, AIG, etc. Insured mortgages are generally those with less than 20% down.

Certain conventional mortgages are also insured, however, in a statement from the Department of Finance said, "Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.
"These new rules pertain only to new, government-backed insured mortgages. This will not affect existing mortgages."

Canadian housing starts rebound: CMHC

2008-02-18T17:02:00.000-06:00

Housing starts were up for January to a seasonally adjusted annual rate of 222,700 units, compared to 184,700 units in December, according to Canada Mortgage and Housing Corporation figures released Friday.

A seasonally adjusted annual rate measures monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels.
"Historically low mortgage rates, solid employment and income growth as well as a high level of consumer confidence continue to underpin the high level of housing starts," chief economist Bob Dugan said in a news release.

"Housing starts in January returned to a level more consistent with our expectation that housing starts will total 211,700 units in 2008, remaining above the 200,000 mark for the seventh consecutive year." Continue Article

Housing boom roars on

2007-06-20T15:34:00.000-06:00

Housing boom roars on

Mortgage rates going downward

2006-09-07T07:55:00.000-06:00

TORONTO — Most of the country’s big banks are cutting long-term mortgage rates by up to a tenth of a point, thanks to the lower cost of borrowing in the bond market.
Royal Bank of Canada, the biggest bank, announced Tuesday it is reducing the posted rate on three-year to 10-year loans by a tenth of a point. The reductions are effective Wednesday.
The rate on a three-year closed term loan falls to 6.5 per cent, to 6.75 per cent on a five-year loan and to 7.25 per cent on a seven-year loan.
The Bank of Montreal also made changes to its residential mortgage rates, lowering the three-year to 18-year rates a tenth of a point.
Effective Wednesday, the two-year rate falls by a fifth of a point, down to 6.40 per cent.

TD Canada Trust brought its three-year to six-year closed mortgage rates down by a tenth of a point — to 6.55 per cent and 6.85 per cent — while National Bank of Canada reduced its three-year to 10-year rates by 0.10 per cent.

Desjardins Group also reduced its three-year to 10-year rate by a tenth of a point for branches in Quebec and Ontario, bringing its three-year rate to 6.50 per cent, its seven-year rate to 7.25 per cent and the 10-year rate to 7.50 per cent.

The cuts reflect the lower cost of borrowing in the bond market, where banks finance their mortgage loans.

MPs pay mortgages with meal allowances

2006-08-04T07:49:00.000-06:00

The secret board of MPs that manages internal House of Commons affairs is allowing MPs who own a house or condo in Ottawa as their second home to pay down their mortgages with a $75 per diem intended for meals, the Citizen has learned.

The per diem is in addition to a $25 daily accommodation allowance MPs receive year-round if they own a second house or condominium in the capital, and using it to buy a home is allowed despite a rule forbidding mortgage payments from a separate $24,000 expense allowance.

Combined, the per diem and the accommodation allowance could add up to $17,225 a year for house costs and mortgage payments if an MP spends only four days a week in Ottawa while Parliament is sitting.

The $25 daily accommodation allowance is available without receipts throughout the year as long as the MP does not rent out the residence.

The move outraged John Williamson, head of the Canadian Taxpayers Federation, who noted parliamentarians last week defended a $4,000 hike to the general expense allowance for all MPs by saying it was transparent compared to earlier expense payments.

"MPs insist their expenses are completely transparent and now we're discovering a meal per diem can be used to pay off a housing mortgage? This is the height of arrogance, this is beyond the pale," said a clearly upset Mr. Williamson.

A surprised Conservative MP Garth Turner said he was unaware of any option for using per diems to help pay down mortgages and added he lost money on a house he purchased during his first term as an MP from 1988 to 1993.

He argued the per diem and accommodation allowance could help an MP turn a profit by selling a house or condominium in a seller's housing market
.
"I didn't claim a nickel when I owned that house," Mr. Turner said. "If it looks like it subsidizes real estate purchases through a back door, it's wrong. Average Canadians have to pay their mortgages out of their after-tax dollars."

Continued...

Condo living is not for everybody

2006-08-04T07:44:00.000-06:00

MONEY 401 Those who want to be left alone to follow their own desires should look elsewhere,

Condo living requires flexibility, co-operation and compromise... words you don't see often in developers' ads.

It's not the right place for you if you want to be left alone to follow your own desires.

Moving into a condominium development means obeying its rules, even if you disagree with them.

You may have to leave your cat or dog behind.

You may be restricted from putting decorations on your front door.

You may be prohibited from renting out your unit for short periods.

These rules make sense in terms of avoiding conflicts among people trying to live closely and peacefully together.

Short-term rentals, for example, can be disruptive to long-term owners.

'If tenancies of under six months are permissible, you risk buying into a building that is really just a disguised hotel,' says Keith Bricknell, a condo owner in downtown Toronto.

'You will never really get to know or trust your neighbours, because some of them will be changing, as often as daily.

'Unfortunately, that has implications for things like security and the care that residents take in avoiding damage to the common elements.'

This is an extra dimension you rarely hear about when you move into a condo. You learn about it through experience.

You will be governed by a condo corporation, which can pass bylaws of all kinds. It has the power to raise your monthly fees and levy a special assessment for upgrades.

Continued...
Refu"

Good advice before buying summer home

2006-08-04T07:40:00.000-06:00

By Douglas Hunter (Cottage Life Books, $35)

Never having owned a summer home, but having enjoyed many visits to cottages owned by friends and relatives, I didn't realize all the possible pitfalls. This book explains them.

Heavy emphasis is placed on the income tax aspects for both buyers and sellers.

If the book has a flaw, it is that author Douglas Hunter is Canadian and he constantly over-emphasizes the Canadian taxation and ownership laws. However, most of the book applies to buyers and sellers of virtually all vacation cottages.

Approximately half of the book is devoted to locating a suitable area for acquiring a cottage. After the search narrows, Hunter explains details of what to look for because buying such a property is much different than purchasing an urban house or condominium.

Unique methods of financing the purchase of a vacation cottage are explained, but without great detail. Hunter suggests contacting local mortgage lenders. He explains the tax consequences of deducting mortgage interest on a second home.

Unexpected in this book are the very complete discussions of sharing cottage ownership with friends or relatives and possible pitfalls to anticipate and resolve."

Mortgaged Dreams

2006-08-04T07:38:00.000-06:00

Owning your own home is the great Canadian dream, and a wide range of mortgages means almost everyone can choose the debt that suits them best

Attitudes to debt have changed over the generations as real estate prices have skyrocketed in Greater Vancouver and the rest of B.C. While survivors of the Great Depression worked to be mortgage-free, many younger people have been anything but reluctant to borrow money to finance the home they have always dreamed about.

Lindsey McDonald bought her first real estate in Cloverdale two years ago when she was 22. The ambitious student sees her mortgage as an opportunity to build wealth and expects to sign up for more and bigger loans in the years to come.

In contrast, John and Joan Ross bought their first home in 1959 and 'survived and sufficed' to become the mortgage-free owners of a bigger home on Vancouver's west side by the end of the 1970s. As children of the Great Depression, the two seniors have avoided significant debt ever since.

In the middle are baby boomers such as Bill and Marlene McLean who bought their first property in the early '70s, worked like the dickens to pay off the mortgage within eight years, and have repeatedly refinanced their home to renovate or build 40 houses for sale. With retirement on the horizon, most of their contemporaries can only wish they had been so bold.

Attitudes to debt have changed over the generations as real estate prices have skyrocketed. At the same time, mortgages have evolved to do much more than simply sustain the great Canadian dream of home ownership.

Continued...

CMHC mortgage moves may be on shaky ground

2006-08-04T07:36:00.000-06:00

Canada Mortgage and Housing Corp. recently announced moves that critics say will drive many home buyers to the poor house, as it were, and could leave Canadian taxpayers on the hook.

CMHC is offering mortgage insurance for interest-only loans and on amortizations up to 35 years, while also scrapping the typical $165 application fee on high-ratio loan products for people with less than 25-per-cent down payment.

With an interest-only loan, a borrower can pay interest only for the first 10 years, then pay both interest and principal. Payments are initially low, but since the entire loan must still be paid off within the original amortization period, payments balloon as the principal starts being paid down, and again if interest rates rise.
The first issue is whether a government agency like CMHC should be competing with private companies like Genworth Financial in the business of offering mortgage insurance on interest-only loans.

If CMHC has to pay out a rash of defaults, the money will come out of Canadian taxpayers' pockets. The argument has also been made that mortgage insurance protects the money lender, not the homeowner.

A recent report by CIBC World Markets noted that outstanding residential mortgages rose by 10.9 per cent during the year ending this past April, adding that "the current wave of growth in mortgage outstanding is of a higher risk," and that the moves by CMHC imply that "we will see increased default risk in the mortgage market."

The second issue is the wisdom of making mortgages easier to get by Canadians who are already in a massive hole of debt, with a savings rate that has fallen from 16 per cent in 1985 to negative 0.5 per cent in 2005, meaning they are now spending more money than their current disposable income.

Continued...

Condo market bubble?

2006-08-04T07:32:00.000-06:00

A correction in the red-hot Toronto area condominium market 'cannot be far away,' says a leading housing economist.

Buying for investment purposes in the Toronto market has been 'far in excess of market needs' and buyers face 'very high risks,' said economist Will Dunning in his most strongly worded analysis yet of the Toronto market, released yesterday.

Nearly a decade into a robust housing cycle, high-rise sales remain extremely strong, with second quarter sales at an annual rate of 20,800, a record high, said Dunning."

While other housing economists have expressed concern over what they see as a potentially frothy condo market, Dunning, a former Canada Mortgage and Housing Corp. economist, has been among the most conservative.

Price appreciation for condos continues at a good clip — 5.9 per cent year over year — and the average condo rent has increased 2.1 per cent.
But this won't last long, according to the gloomy forecast.

"An onslaught of condo completions is just beginning and I expect that rents will start to fall late in the year with the possibility of price weakness to follow," said Dunning.

Continued...

Title fraud can happen to anyone, cost can be enormous

2006-08-04T07:29:00.000-06:00

(Jul 28, 2006)
It happened to Susan Lawrence. While going through proceedings to sell her home earlier this year, the area woman learned that she had become the victim of fraud, joining a growing number of Canadians who have been victimized by real estate title fraud.

"I went to the bank to discuss my mortgage because of the pending sale," says Lawrence, who has lived in her home for almost 30 years. "I found out my mortgage had been discharged and a new fraudulent mortgage assigned to my house at another bank without my knowledge. I couldn't believe it. I had heard of mortgage and real estate fraud, but never thought it could happen to me."

The scam occurred as follows: someone unknown to her forged her signature, discharged her existing mortgage, took out a new mortgage for almost $300,000, pocketed the money, then defaulted on the mortgage and disappeared.

Ms. Lawrence believes her nightmare started when a For Sale sign went up on her front lawn, giving fraudsters an opportunity to consult the MLS listing for the property and gather information they needed. Then they simply posed as her to fraudulently sell her house, discharge her small mortgage and take out a new one.

After several sleepless nights and endless hours spent with her lawyer, her bank finally withdrew a possession lawsuit, which meant she did not have to move out of her home. Good news under normal circumstances, except that now she is faced with having to restore her title, even though the new mortgage on her home was obtained fraudulently by a third party.

Susan Leslie, vice president of claims and underwriting at First Canadian Title, estimates the average case of real estate fraud to be $300,000, compared to estimates of $1,200 by the RCMP for cases involving credit card fraud. Meanwhile, industry insiders estimate that real estate fraud costs Canadians between $300 million and $1.5 billion a year.

"The onus is on homeowners to prove the crime and it can be very costly - financially and emotionally - to clear your name," said Leslie. "Unlike traditional forms of insurance, for a one-time premium, title insurance is an effective and inexpensive way to ensure title to your property is protected. Title insurance covers legal expenses related to restoring title and is available to existing home owners even if they have owned their property a long time."

Ms. Lawrence's troubles are the latest in a string of real estate title fraud cases across Canada. The Law Society of British Columbia, after four years of investigations, recently approved $32.5 million in payments to cover a multi-million-dollar real estate fraud case involving Vancouver lawyer Martin Wirick. The high-profile case involved transactions between 1998 and 2002 and affected hundreds of victims in the scheme. Other cases across the province include:
* A Mississauga man tried to sell his parent's home last year and discovered that someone had fraudulently sold the home for $400,000. The case was resolved after $11,000 in legal fees, but the fraudster is still at large.

* A Brantford woman received a call from a mortgage collector saying she was three months behind on her mortgage payments for a home she didn't know she owned. Later that night she also discovered that two other properties had been mortgaged in her name, leaving her on the hook for more than $400,000.

Visit www.ProtectYourTitle.com to learn how to protect yourself.

2006-06-21T15:09:00.000-06:00

Home inspectors save future headaches

2006-06-15T13:36:00.000-06:00

It looks like your dream house on the outside, but a few weeks after you move in, you discover mice, electrical problems or asbestos.

Like a scene out of the 1986 comedy, The Money Pit, the beautiful house you were excited to move has now become a financial burden.

This is the case for some new home buyers who don't cover all their bases by doing research before moving into a new home.

Hiring a home inspector is a part of the home buying process that is optional, but may save numerous headaches down the road.

Continued...

30 per cent of Canadian renters plan to purchase a home within three years,

2006-06-15T13:30:00.000-06:00

Canadians continue to favour home ownership over renting despite rising home prices and modestly higher interest rates, according to the results of a study released today by Scotiabank, which indicates that 30 per cent of Canadian renters plan to purchase a home within three years.

"Steady job and wage gains continue to support Canadians who want to make the move from renting to owning," said Adrienne Warren, Senior Economist, Scotia Economics. "Many potential new homeowners, however, will look to less expensive housing options such as townhomes and condominiums due to some erosion in overall affordability."

Despite the optimistic view of homeownership, current renters who are not planning to buy, outlined a number of deterrents to purchasing a home. The study found the most commonly cited reasons include: commitment of ownership (37%), high cost of real estate (17%), living paycheque to paycheque (12%), poor credit (7%), and student loans (5%).

Continued...

Mortgage rate peak near

2006-06-15T13:28:00.000-06:00

Mortgage rate peak near economists: 'The end's not far away'

The short-term outlook for inflation and interest rates in Canada is a whole lot less clear since Friday's jobs report that signalled the economy is hotter than expected, but the long view is that borrowing costs and the pace of price increases are approaching their apex.

After Friday's report that Canada created almost 100,000 jobs last month, the Canadian dollar has shot up almost US2 cents to US91 cents in the past two trading days on bets the Bank of Canada is not done raising interest rates to corral inflation, and probably has one more quarter-percentage-point increase to go. That's a change from earlier last week, when the expectation was that the central bank's trend-setting target for overnight interest rates wasn't going any higher than the 4.25% it is now.
"If we are not done watching the Bank of Canada raise interest rates, we're 25 basis points from it, so the end's not far away," said Craig Wright, chief economist at Royal Bank of Canada.

The report that changed the view, and that has people calling mortgage brokers again on concern they should lock in before rates rise further, showed the economy created almost four times as many jobs as economists had expected. The unemployment rate dropped to 6.1%, the lowest since 1974.

Continued...

Ontarians Eager to Buy Homes but Lack Understanding of Legal Risks

2006-06-15T13:19:00.000-06:00

Only 10% Understand Real Estate Lawyer's Role

Many Ontarians have jumped into the busy real estate market without fully appreciating the legal dimensions of home buying.

Homebuyers put a great deal of time and energy into finding their dream home. Real estate lawyers put the same careful attention into investigating the legal issues related to the property and closing the sale," says Kathleen Waters, an experienced real estate lawyer and Vice President, TitlePLUS. "That's where your real estate lawyer becomes an invaluable resource: he or she navigates you through the major legal implications of home purchase, and can help prevent a dream home from turning into a nightmare."

Continued...

Homeowners can expect more interest rate hikes

2006-06-15T13:15:00.000-06:00

Homeowners can expect to another half percentage point interest rate hike over the next year, says the chief economist with the Canadian Institute of Mortgage Brokers and Lenders.

Will Dunning said that increase might take a little of the heat out of the real estate market, but he doubts it would be enough to cause prices to fall.

New home sales are strong, prices are continuing to rise and the new housing starts are either growing slightly or remain flat in most parts of the country, he said.

Speaking at a mortgage symposium in Halifax Monday, Mr. Dunning said fixed rates remain the most popular mortgage choice for homeowners, but the heavily promoted combination fixed rate/variable rate mortgages are gaining in acceptance as people looking at the uncertainty in the marketplace see them as a way of managing the risk.

Drawing on the results of a survey he carried out in March, he said most people renewing their mortgages are happy with their situation, generally because their payments on a five-year mortgage are less today than they were when they last renewed. People who took out a one-year mortgage might not be as happy as their payments are likely going up.

The survey also found that 66 per cent of people believe mortgage rates will continue to climb, but only 25 per cent believe the increases will negatively impact their standard of living.

With increasing rates, Mr. Dunning said mortgage holders will likely shop around more, a practice he encourages.

"Negotiate, negotiate, negotiate. The gap between the posted rates and the discount rates is as large as I’ve ever seen."

The posted rate at many major banks is around 6.75 per cent, while the discount rate is as low as 5.3 per cent, he said.

At least part of the reason for the gap is the tremendous growth in the number of companies getting into the mortgage business over the past few years and with an increasing number of players comes heightened competition.

Navigating the mortgage maze

2006-06-13T17:37:00.000-06:00

Going crossed-eyed over the myriad mortgage options these days? Don't despair, says a local real estate expert and author.

With the right knowledge, research and professional team backing you up, there are some great deals to be had, says Douglas Gray, president of National Real Estate Institute Inc, and author of Mortgages Made Easy: The All-Canadian Guide to Home Financing.

And it all starts with proper preparation, including doing an online credit check to make sure your financial affairs are as they should be, and knowing how much a lender will potentially grant you, Gray says.

His No. 1 piece of mortgage advice: Don't deal directly with lenders, but work with a mortgage broker who can seek out the best deals from up to 100 different lenders.

'They know all the big players, and who's hungry - and you don't pay a penny to the mortgage broker,' says Gray, who also advises homebuyers to do a little comparison-shopping, and talk with at least three different brokers.

But with affordability rates in Vancouver at an all-time low, sometimes the best deal is still out of financial reach - and that's where parents come in.

More and more often, 'parents are giving their children a leg up, maybe because they've got a lot of equity in their own homes,' says Gray.

But don't expect them to hand over a down payment or co-sign a mortgage at the snap of your fingers - if you want your parents' help, impress them with your research and 'plant the seed' early, he says.

KNOW YOUR OPTIONS

When it comes to mortgages, getting the best deal almost always comes down to preparation and research. Here are 10 key questions to ask yourself before you sign on the dotted line:

1. Is your income secure? Will it increase or decrease in the future?

2. Are you planning on increasing the size of your family, and therefore your living expenses?

3. Can you afford to put aside a financial buffer for unexpected expenses or emergencies?

4. Are you planning to purchase the property with someone else?

5. If so, can you depend on their financial contribution?

6. Have you determined the amount of mortgage you'll be eligible for?

7. Have you determined all the expenses you will incur relating to the purchase transaction?

8. If you're relying on income from renting out part or all of your newly acquired property, do you know the city and strata bylaws?

9. Have you researched mortgage brokers and companies on the Internet?

10. Have you run a credit check on yourself to see what lenders will see?

Source: Mortgages Made Easy: The All-Canadian Guide to Home Financing, Douglas Gray (John Wiley & Sons Canada, Ltd, 2006).

Bankruptcies keep falling

2006-06-13T17:31:00.000-06:00

Personal bankruptcies have fallen to the lowest level in seven years, cushioned by a strong labour market, Canadian Imperial Bank of Commerce said Monday.

Bankruptcies, on average over the past three months, fell 7.6 per cent from last year but – like most economic reports of late – the headline number masked regional discrepancies. In Alberta, they tumbled 17.5 per cent, while bankruptcies in Quebec and Atlantic Canada rose 3.6 per cent and 1.8 per cent, respectively, CIBC said in its bankruptcy report.

At the same time, Ontario bankruptcies are falling as strength in Ottawa, Toronto and Kitchener offsets higher rates in Sudbury and Windsor, cities more vulnerable to the strong Canadian dollar.

“Looking at development in the pipelines, it appears that there is little risk of any significant deterioration in the bankruptcy situation in the near future,” CIBC economist Benjamin Tal said in the report.

In one barometer that shows fewer people are likely going belly up, the delinquency rate in credit cards has stabilized at about 4.6 per cent — lower than its long-term average. Mortgage arrears, meantime, remain well below their long-term average and are “unlikely to rise strongly in the near future,” the report said.

CIBC forecasts little change in the number of bankruptcies this year and a 3 per cent-5 per cent increase next year as economic activity weakens.

Business bankruptcies, meantime, have fallen more than 18 per cent, on average over the past three months, from last year — a rate not seen since late 2002.

The largest decline in business bankruptcies was in Alberta where the number of bankruptcy filings plunged by almost 40 per cent during the year ending April.

Ontario was the only province that saw an increase in the number of business bankruptcies in the period, weighed down by difficulties in the manufacturing sector.

The number of business bankruptcies is expected to fall by 7 or 8 per cent this year be little changed in 2007, CIBC said.
“At the same time, we expect the regional divergence to widen with bankruptcies in the manufacturing sector in Ontario and Quebec continuing to rise, reflecting the impact of a strong dollar and some softening in demand from south of the border.”

Lower-income housing units get leg up

2006-06-08T07:00:00.000-06:00

A recent forgivable loan from the Canadian Mortgage and Housing Corporation (CMHC) will ensure that residents of the Homewood Mansions near Carlton and Jarvis streets can continue to live in safe buildings.

The CMHC has passed down $762,000 in funding for the 67-unit rental apartment at 1 Homewood Ave. and $528,000 for a 44-unit rooming house at 7 and 9 Homewood Ave. The money is part of an initiative to help ensure that Toronto maintains a certain number of affordable housing units.

"Part of the review we do before giving out funding is to determine if, in fact, the tenants are lower-income earners and if, in fact, the rents are kept below a certain level," said CMHC spokesperson Mark Salerno. "We want to ensure that the buildings remain safe to live in and that we retain an affordable housing stock in the city."

While the funding comes in the form of a loan, Salerno said that the CMHC will forgive the loan provided certain conditions are met. First, the money must be used for repairs and maintenance to keep the building safe. Second, the landlord must keep rents at an affordable level.

"The system is predicated on the landlord agreeing to place a ceiling on the rent after the repairs," he said. "It's deemed fully forgivable over a period, so they have to earn that forgiveness. Over that given period, if the landlord decides to put the rent up above the agreed level, they have to pay back a prorated amount of the loan."
The money for the Homewood Mansions has been used to redo plumbing and electrical infrastructure in the buildings, as well as some more visible renovations.

"(Tenants) have new kitchens, new bathrooms, everything's new," said Homewood Mansions co-owner Mary Campisi. "With things like the plumbing and electrical, it was important to get everything up to safety code, and before it wasn't. It's an ongoing thing where we want to keep these buildings safe for our tenants."

The funding dollars are especially welcome since, with landlords of lower-income housing developments taking in less in terms of rent dollars, repair and maintenance costs often must come out of the developers' pockets. In other cases, landlords will raise rent to cover the cost of such work.

"It's important because we can make sure everything is up to par without having to take money from tenants in our building," Campisi said. "Some of them would have a hard time making ends meet if we raised the rent."

In addition to the Homewood Mansions, the CMHC also gave forgivable loans to rental apartments in North York and Bloor West Village. The Homewood Mansions were by far the largest of the buildings and received the bulk of the $1.6 million in total funding doled out by the CMHC at the end of May.

"Our main concern is when some buildings are in a poor state of repair or when there are (safety) code deficiencies," Salerno said. "It's an issue of life safety and a way to help both the landlords and the tenants."

CIBC lowers mortgage costs

2006-05-28T07:08:00.000-06:00

Two days after the Bank of Canada raised short-term interest costs, the Canadian Imperial Bank of Commerce (TSX: CM) said Friday it is trimming its posted mortgage rates.
Among the changes, CIBC's one-year closed rate slips to 6.25 per cent from 6.30 per cent, while the three-, five- and 10-year rates each decline by one-fifth of a percentage point, to 6.45 per cent, 6.75 per cent and 7.55 per cent.
The bank's move followed Wednesday's quarter-point increase in the prime lending rate to six per cent at all the major commercial banks, after the Bank of Canada raised its overnight rate to 4.25 per cent from four per cent.
While it increased the cost of short-term money for the seventh time since last autumn, the central bank also signalled that its series of hikes is likely over.
On bond markets, where banks fund their mortgage obligations, the Canadian yield curve flattened this week, as would be expected after the central bank's increase at the short end.
'Interestingly, though, the flattening came through entirely in the long end, where yields declined four basis points,' a commentary from the Bank of Nova Scotia (TSX: BNS) observed.
'For both the Canadian and U.S. curves, yields between the target policy rate all the way to the long end are now nearly flat.'"

A real pain in the gas

2006-05-22T08:34:00.000-06:00

"Unlike the United States, motor fuel prices are a sleeper issue here in Canada. At least politicians, at both the federal and provincial levels, are sleepwalking through it.

Stateside, it's one of the three key issues gripping the U.S. mid-term elections (illegal immigrants and Iraq being the others) and threatening to oust the Republicans from the House and Senate, ruining George W. Bush's final two years in office.

It may be resting peacefully in the minds of the politicians here, but Canadians are wide awake on how they are getting hosed at the pumps.

Serious discontent

According to a damning - if you are an oil company or elected official - Ipsos-Reid poll released yesterday, there's a serious mood of discontent out there. That's even true in Alberta, where high energy prices bring mega-millions into the provincial treasury and have touched off the largest energy boom in the province's history.

Albertans seriously resent the high cost of gas and diesel. So much so that only 40% of Albertans polled in late April and early May feel that gas prices are set 'fairly.'

In Ontario the number who feel that gouging is going on rises to 70%. In Quebec the distrust level hits 82%.

Poll respondents also have an inkling where the extra cash is going. Overall, 71% feel that energy company prices are excessive and the feds should bring in a 'special tax on windfall profits' that are made from gas.

Maritimers were the real cost-control hawks at 79%. In Alberta, only 37% "disagreed" with going after the pump pirates. Not an overwhelming endorsement of the leaderless Alberta Tories, especially considering oilsands outfits are getting their bitumen virtually royalty-free until payout in these times of record world oil prices.

Prime Minister Stephen Harper's bold plan to roll back the hated GST by 1% apparently didn't impress Canadian gasoline consumers either.

Asked if the 1% token gesture was an "appropriate" response, seven in 10 Canadians gave Stevo the thumbs-down.
But the most distressing response to the poll - if you're a politician - was what Canadians answered when asked if the government should step in and regulate gasoline prices.

Across the country, 72% back the government getting involved in setting gasoline prices. In Atlantic Canada the support was greatest at 87%. That makes sense because some provinces already regulate pump prices, and the Nova Scotia election is being fought over throwing a noose around gas companies.

But the most telling number comes from free-enterprising, redneck Alberta, where only 39% said no to government intervention at the pump.

The inflationary effect of high gasoline prices may be about to have repercussions in other parts of the economy. It's the old ripple effect.

The C.D. Howe Institute circled the wagons this week and asked a panel of economic experts what Bank of Canada governor Dave Dodge should do on May 24 when he sets Canada's trendsetting interest rate again. It was a six-to-five split decision. But the slim majority recommended Dodge nudge up the rate by another 25 basis points to 4.25%.
Some even said the country's top money man must continue jacking up rates "significantly above the current level" to keep inflation at 2%.

Higher mortgage rates

If this translates into higher mortgage rates - which it inevitably will - then it could put even more pressure on Alberta consumers.

Yesterday, the Royal Bank of Canada revealed that we face the second-worst affordability in the country when it comes to buying a house.

"The good times for the Alberta economy have come at a cost to homeowners," the RBC Financial Group gloomed. House prices may be up 25% over a year ago, and income and employment growth may be the envy of the country.

"However the price of appreciation and higher mortgage rates outpaced this growth."

Remember what happened the last time Canadians were seriously stung with high gasoline prices and a roaring Alberta economy? Pierre Trudeau was able to muster enough political clout to bring in the national energy program to skim excessive windfall profits.

Stephen Harper is no Trudeau. But the Ipsos- Reid poll shows there's serious hurt across Canada - and right here in Oilberta - over gasoline prices.

Klein and Harper have been warned.

Home buyers look south of the line

2006-05-22T08:28:00.000-06:00

The strong dollar has Canadians snapping up properties in Point Roberts.
Out of all my buyers this month, 50 per cent were Canadian, says Paul Rush of the Points National Real Estate, via telephone.

Ive had an increase in Canadian buyers in the last two to three months, prior to that it was mostly US buyers. Canadians are strictly going by the exchange rate and they know (Point Roberts) is close.

Waterfront properties, after all, may seem more affordable in the U.S. as the going price is about $10,000 per foot (measured along the shore). Small beach-front properties are selling for US $550,000 to $600,000 although at least one luxurious home is selling for US $1.6 million.

In Tsawwassen, however, RE/MAX manager Bob Cooke could find only two listings for waterfront homes and the cheapest was $1.7 million for 3,500 square feet and a 35-foot shoreline frontage, looking west.

Views are anywhere from $1 million to $2 million, Cooke says. Waterfront starts at about $1.8 million. I think theres a shortage of waterfront properties and prices are only going to rise.

But before you sell your home or drain that bank account to join the migration, Canadian buyers need to know a few things about purchasing American land.

First off, a Canadian without a Green Card may only reside across the border for 182 days per year and must have a home in Canada. The purchase must be for recreational use or pleasure.

Rush notes there’s no guarantee you’ll be able to access your property when you want to, either.

“It’s really up to US Immigration whether they let you in at all. It’s very strict; you need a permanent residence in Canada, not just an address, and you may have to show your mortgage payments or utilities as proof. It’s a delicate thing – I’ve known them to not let people in.”

As a result, Rush has found that most of the Canadians appearing at his office have dual citizenship, like him.
“They’re taking advantage of the high prices of Canadian real estate, selling out and moving here.”

Point Roberts realtor Jim Julius says most of his Canadian buyers are grandparents who are shopping for recreational property for their grandchildren.

“What we have now is a baby boomer demand for properties. They’re looking for places for their grandchildren so their children’s children have a chance to get out of the city—that’s a big deal.”

Home-buying intentions up slightly, report says

2006-05-22T08:23:00.000-06:00

Renovation market also staying strong
May 20, 2006. 01:00 AM

More than 380,000 households in major Canadian cities indicated they were ready to buy a home this year, according to a survey released this week by the Canada Mortgage and Housing Corp.

The results of the CMHC's Consumer Intentions to Buy or Renovate a Home survey represents an average of 8 per cent of households in Halifax, Montreal, Toronto, Calgary, and Vancouver.

While 8 per cent declared that they have a high chance of buying a home and could be considered as 'ready to buy' within the next 12 months, 5 per cent indicated that they have a 50-50 chance of buying. The survey is conducted using a sample of about 4,000 households in each centre surveyed.
'Intentions to buy are up from 2005 when 5 per cent of households were ready to buy a home. This year, strong intentions to buy are consistent with continued high levels of housing starts and sales of existing homes.

Favourable economic conditions, such as low mortgage rates and a healthy labour market are contributing factors to home-buying intentions,' said Bob Dugan, chief economist at the CMHC.

'Home-buying intentions are strongest in Calgary and Halifax, where 10 per cent of households reported that they are ready to buy a home. Purchase intentions are also strong in Vancouver and Toronto where 8 per cent of households are ready to buy, while the share is slightly lower in Montreal (7 per cent).

"Home renovations will remain strong this year, with 13 per cent of surveyed homeowners reporting they were ready to undertake renovations this year, costing $1,000 or more," said Dugan.
"The share of serious renovators is down compared to 2005 when 17 per cent of homeowners were ready to renovate. While the share of homeowners who intend to renovate decreased in 2006, the total dollar amount that will be spent on renovations is expected to increase."

Meanwhile, increases in Canadian house prices over the past five years — dramatic in Alberta and British Columbia and strong in the rest of the country — are the result of a robust economy that also provided a dramatic rise in key economic indicators and popular lifestyle and consumer items, according to a report released this week by Century 21 Canada.
Price increases over five years for typical homes across the country in a selection of markets surveyed by Century 21 range from as high as 129 per cent in Vernon, B.C. to as low as 12 per cent in Thunder Bay.

In Vernon, a 1,200-square-foot bungalow with three bedrooms and two bathrooms on a 55-foot by 100-foot lot increased in value to $355,000 this year (2006) from $155,000 in 2001.

The hottest housing markets in Ontario include Peterborough and Kitchener-Waterloo, Century 21 reported.

In Peterbourgh, the price of a typical home — 1,050-square-foot bungalow with three bedrooms and 1 1/2 baths — increased to $202,000 in 2006 from $131,000 in 2001, an increase of 54 per cent.

In Kitchener-Waterloo, a typical home — 1,200 square foot two-storey home with three bedrooms and two bathrooms — rose to $245,500 in 2006 from $163,000 in 2001, an increase of 51 per cent.

Hot housing market expected to cool

2006-05-15T10:48:00.000-06:00

Boosted by Alberta�s red-hot housing market, national home sale prices jumped by the highest amount in more than 16 years in March, Statistics Canada said this week.
Eye-popping increases of 29.6 per cent in Calgary and 14.3 per cent in Edmonton helped to increase the national average rise in houses prices to an annualized 7.6 per cent in March � an increase not seen since at least January 1990.

More moderate price increases were seen in Vancouver, with a 6.9 per cent rise, while Quebec saw a 6.6 per cent increase.
The average price for a residential property in the Halifax area was $279,748, a 4.8 per cent increase last year. Toronto reported a 4.3 per cent annualized increase while in Montreal, home prices rose by 3.3 per cent.

The only monthly drop was in St. John�s, Nfld., where prices slipped 0.1 per cent from February. But if you haven�t bought your home yet, don�t panic � the federal housing agency says the market should begin to soften in 2006.

Rising mortgage prices and market saturation will begin to cool demand, at least a bit this year, says Canada Mortgage and Housing Corp.
Home construction starts will slip to 222,200 units this year, down from the 225,481 units that were built last year, the Ottawa-based agency said. 'Higher mortgage carrying costs and rising house prices will temper housing demand this year,' Bob Dugan, CMHC�s chief economist, said in a statement.
But that still represents a higher rate this year than previously forecast by CMHC.

Booming demand in Alberta and British Columbia led the agency to increase its outlook for this year’s construction to 208,700. Still, a gradual cool is coming, says CMHC.
"Over the medium term, housing starts will continue to slow gradually, reaching 184,400 units by 2010," Dugan said.
The resilient housing market is one more factor that will likely convince the Bank of Canada to raise short-term interest rates in late May, said Marc Levesque, chief fixed income strategist with TD Securities.

"This is just one more tick mark in the tightening column," for the central bank, which has already boosted its key interest rate on six consecutive opportunities to four per cent. "This is one sector of the economy that is being supported pretty well by low interest rates."

Record low unemployment and a flourishing resource sector all threaten to push up inflation, something the central bank desperately aims to avoid. Its next chance to raise rates comes on May 24 and many analysts have forecast another quarter-point rate hike as the central bank aims to hold the consumer price index to about two per cent.

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2006-05-08T15:25:00.000-06:00

Housing market continues

2006-05-01T05:48:00.000-06:00

Eric Beauchesne, CanWest News Service
Published: Saturday, April 29, 2006
OTTAWA - Home sales and prices hit all-time highs in the first quarter of this year, according to a report Friday which will add to puzzlement, and possibly more inflation worries, at the Bank of Canada.
There were 125,142 existing homes sold from January through March, up 2.4 per cent from the fourth quarter of last year, and 0.2 per cent above the previous record high set in the third quarter of last year, the Canadian Real Estate Association said.
Earlier in the week, Bank of Canada governor David Dodge said ``we're a little bit surprised'' at the strength of the housing market considering the steady climb in interest rates and prices since last summer.
And real estate association chief economist Gregory Klump agreed it was a surprise that sales hit new record highs.
``Rising household incomes and upbeat consumer confidence are keeping resale housing activity on a tear, even with rising home prices and interest rates,'' Klump said.
The industry association reported sales reached their highest level of any quarter on record for both the number of units sold and the total dollar volume. The value of sales reached $33.4 billion, a 5.8 per cent increase from the final quarter of 2005, and the highest level ever, with records set in most provinces.
New quarterly sales records were set in Alberta, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
The quarterly surge in sales was despite a decline in March, when sales slipped 1.4 per cent from February, which was the second highest month of sales on record. British Columbia, Alberta and Ontario led the decline in sales, while sales rose in Quebec, New Brunswick, and in Nova Scotia where sales hit a record for the month of March.
While sales slipped in March, the average home price continued to rise to reach a record $274,163, up 12.4 per cent from a year earlier. The average price in the quarter was up 12.1 per cent from the same quarter in 2005, which was the steepest increase since the 1980s housing boom, which eventually went bust.
In March, the average price of a home was at an all-time high in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Prince Edward Island. And during the quarter, the average price was at an all-time high in every province except Quebec.
The average price of a home sold in March was highest in British Columbia at $383,712, up nearly 20 per cent from a year earlier. The steepest increase in the average price was in Alberta at 24.7 per cent to $267,641.
While most analysts continue to predict housing sales should eventually slow this year and price increases moderate, they say that unlike during the 1980s, there is no housing bubble to burst.
``Interest rates are widely expected to be near their peak,'' Klump noted. ``The continued ability to negotiate rates is also helping to keep sales activity high by keeping monthly payments down and affordability reasonable.''
The posted five-year closed mortgage rate is now 6.6 per cent, which is up less than a full percentage point from a low of 5.7 per cent last July, before the Bank of Canada resumed raising rates.
``It's not a substantial increase,'' Klump said, noting a recent survey by mortgage brokers found even with the higher rates, families are finding their housing payments manageable.

Stock markets up on earnings; Canadian dollar at 14 1/2-year high

2006-04-27T07:21:00.000-06:00

14:42:51 EDT Apr 26, 2006
MALCOLM MORRISON

TORONTO (CP) - Base and precious metals stock helped lift the Toronto stock market slightly higher Wednesday afternoon as investors took in another slew of positive earnings reports.
The Canadian dollar was up 0.29 of a cent at a 14 1/2-year high of 88.65 cents US, a day after the Bank of Canada raised interest rates and said another hike is likely.
'There is certainly not a lot of inducement to buy (stocks) right now,' said Julie Brough, assistant vice-president at Morgan, Meighen and Associates. 'It does look a little bit tired and the valuations, in my mind, are not anything to get excited about.'
U.S. indexes were higher on some better-than-expected corporate earnings reports, a broker upgrade for General Motors Corp. (NYSE:GM) and positive economic data.
Toronto's S&P/TSX composite index was 21.67 points higher at 12,351.46, held back by declines in tech stocks and energy stocks as oil continued to move away from last week's record highs.
The TSX Venture Exchange moved down 3.38 points to 3,091.61.
Wall Street's Dow Jones industrial average gained 62.44 points to 11,345.69, with GM jumping $1.31 to $22.72 US after Merrill Lynch upgraded the automaker one notch to 'neutral' from 'sell,' citing beliefs that its restructuring plan is moving in the right direction.
The Nasdaq rose 3.15 points to 2,333.45 while the S&P 500 was up 4.44 points at 1,306.18.
In economic news, the U.S. Commerce Department said orders of durable goods jumped 6.1 per cent in March, more than triple the 1.8 per cent economists predicted. The department also said new home sales climbed 14 per cent to 1.21 million for the month, handily beating estimates for 1.1 million despite the rebound in mortgage rates.
The base-metals sector climbed one per cent, with AUR Resources Inc. (TSX:AUR) ahead 55 cents at $16.55.
Ivanhoe Mines Ltd. (TSX:IVN) has agreed to exchange its Mongolian coal interests to Asia Gold Corp. (TSXV:ASG) for a majority stake in the junior miner. Ivanhoe shares advanced 19 cents to $10.97 while Asia Gold shares surged 29 per cent to $2.70.
The June contract for bullion on the Nymex was up $7.80 to $642 US an ounce, taking the TSX gold sector ahead 0.95 per cent. Kinross Gold Corp. (TSX:K) added 14 cents to $13.62.
Elsewhere in the materials sector, Alcan Inc. (TSX:AL) moved up $1.39 to $59.75 and Gerdau Ameristeel (TSX:GNA) rose 35 cents to $12.35.
The TSX energy sector fell 0.3 per cent as the June contract for light sweet crude on the New York Mercantile Exchange was down 63 cents at $72.25 US a barrel.
Prices headed lower as the U.S. Energy Department said gasoline inventories fell 1.9 million barrels last week while crude stocks fell 200,000 barrels.
Shares in EnCana Corp. (TSX:ECA) were 63 cents higher to $58.23 after the company said it is boosting its quarterly dividend as first-quarter profit jumped to $1.47 billion US on a huge accounting gain, while operating profit rose 14 per cent to $694 million US.
After its first reporting period as an income trust, Precision Drilling Trust (TSX:PD.UN) said its first-quarter profit rose to $224.2 million, from a year-earlier $138.5 million, and it will boost its distributions to unitholders by 15 per cent to 31 cents a unit. The company's units were up 50 cents to $41.60.
Information technology stocks losing ground included Nortel Networks Corp., (TSX:NT), down four cents to $2.97.
Potash Corp. of Saskatchewan Inc. (TSX:POT) shares fell 79 cents to $103.89 after the company reported a net profit of $125.5 million US, down from $131.3 million US for the same period last year as a pricing dispute cut fertilizer shipments to China.
Newsprint giant Abitibi-Consolidated Inc. (TSX:A) is cutting jobs and has narrowed its first-quarter loss to $33 million from $51 million a year ago as rising prices and tighter inventories helped the company improve its finances. Its shares fell 16 cents to $4.87.
Nova Chemicals shares (TSX:NCX) declined 19 cents to $34.03 as the firm swung to a first-quarter loss of $5 million US from a year-earlier profit of $94 million US.
Maple Leaf Foods Inc. (TSX:MFI) earned a $17.3-million profit in the first quarter of 2006, compared with $12.7 million in the year-ago period. Its shares edged seven cents higher to $12.90.
Fuel cell maker Ballard Power Systems (TSX:BLD) has cut its first-quarter loss to $17.2 million US from a year-earlier $32.4 million and revenues rose 14 per cent to $12.5 million US. Its shares gained 52 cents to $11.68 Cdn.
In the U.S., Boeing Co. (NYSE:BA) shares added 32 cents to $85.43 US as the company reported a better-than-expected 29 per cent jump in first-quarter profits.
Shares in PepsiCo Inc. (NYSE:PEP), the world's No. 2 soft-drink maker and owner of snacks maker Frito-Lay, were up 35 cents to $57.85 US after it said first-quarter profit jumped almost 12 per cent to $1.02 billion US.
Amazon.com (Nasdaq:AMZN) reported earnings dropped 35 per cent after a hefty gain boosted last year's profit. The online retailer's results still met Wall Street targets and its shares gained 26 cents to $35.81.

Variable mortgage rates on the rise

2006-04-27T07:15:00.000-06:00

Fiona Anderson, Vancouver Sun
Published: Wednesday, April 26, 2006
Homeowners with variable mortgages will see their interest rates increase in response to a boost in the Bank of Canada's trendsetting overnight rate on Tuesday.
BMO Bank of Montreal and Scotiabank both announced rate increases of 0.25 percentage points, raising their three-year open rate to 5.75 per cent after the Bank of Canada said it was increasing its overnight rate by 25 basis points. All major banks also increased their prime lending rates to 5.75 per cent.
But fixed mortgage rates have remained unchanged, at least for now.
Rob Hafer, regional sales manager for Invis on Vancouver Island, said variable rates are attached to prime rates, so anyone with a variable mortgage will see rates rise. But even though fixed rate mortgages depend on a number of factors other than the prime rate, those rates have also been going up recently.
'So the costs of borrowing for all consumers is going up unless you are already locked into a [mortgage] term,' Hafer said.
And while rates go up, consumers should shop around to make sure they are getting the best deal, he said. Over the last few years, the number of lenders have steadily increased, making the market more competitive. As posted rates go up, lenders are getting more aggressive with the discounts they will offer from those posted rates, he said."

Continued...

Don't rush into fixed-rate mortgage, experts suggest as rates rise

2006-04-27T07:08:00.000-06:00

16:41:56 EDT Apr 25, 2006
TARA PERKINS
TORONTO (CP) - Tuesday's rise in variable mortgage rates will have some homeowners looking to lock in their rates, but experts say not to be hasty. It could be just a blip.
The cost of a variable mortgage has risen for the sixth time since the summer, after the Bank of Canada announced Tuesday it is hiking its benchmark interest rates by a quarter-point. About 22 per cent of Canadian mortgages are now variable, moving in step with the bank's prime lending rate, says CIBC World Markets (TSX:CM) senior economist Benjamin Tal.
Andrew Moor, CEO of mortgage brokerage firm Invis, says more customers have been opting for fixed-rate mortgages over the last few months as interest rates have risen.
But, he adds, the carrying costs on a variable mortgage are still less than those on a fixed-rate mortgage.
After Tuesday's rate hikes, a competitive variable mortgage rate will be about 4.85 per cent, up from 3.45 per cent at the beginning of September, according to Invis.
As a result, the payments on a $150,000 mortgage will have risen from about $745 a month to about $860.
A five-year fixed mortgage could be obtained at 4.5 per cent in September. That would cost about $830 a month on a $150,000, 25-year mortgage.
Today the rate is more like 5.25 per cent, costing $894, Invis said.
Within hours of the Bank of Canada's announcement Tuesday, mortgage lenders were already posting new variable mortgage rates that were up by a quarter of a percentage point.
"Every time something happens with the rates, there are people who decide, instead of going variable, to go fixed," said Jim Rawson, a regional sales manager for Invis working in downtown Toronto.
But he said economists don't expect the Bank of Canada to continue its credit-tightening policy for much longer.
"It may be a blip in the market and, therefore, you may not need to worry about going into a fixed term if you're used to playing the variable game," he said.
"There's really no need to panic. For those who are finding that it may be a bit of a pinch, there are things like longer amortizations."
He said stretching mortgage payments over a 30-or 35-year window may be a good temporary solution for young homeowners who need to reduce their monthly payments in the short term but know they can increase them in a few years when their salaries are higher.
"It comes down to your risk tolerance," Rawson said of the final decision on fixed-versus-variable mortgages.
"If you're the type of person who is going to lose sleep worrying about rates ... take a fixed-rate mortgage. It's not worth it if you're going to be worrying about it every day. But there are savings to be had with a variable-rate product."
Moor added that steep competition in the Canadian mortgage market has been good news for consumers.
"The pricing of variable-rate mortgages in Canada is becoming very competitive, and in fact Invis has witnessed mortgage lenders battling for market share by offering variable-rate mortgage rates well below prime - discounts not previously seen in the Canadian market," Moor said.

Bank of Canada raises key interest rate to 4%

2006-04-27T07:01:00.000-06:00

Updated Tue. Apr. 25 2006 11:29 PM ET
CTV.ca News Staff
The Bank of Canada boosted its trend-setting overnight rate by a quarter of a percentage point to four per cent on Tuesday.
The latest hike will impact the prime interest rate charged by commercial banks, affecting variable mortgage rates, as well as the cost of car loans and lines of credit.
This marks the sixth consecutive rate increase by the Bank of Canada since last summer -- when it was 2.5 per cent -- and some are wondering how many more rate hikes could be on the way.
In its statement today, central bankers said 'some modest further increase in the policy interest rate may be required to keep aggregate supply and demand in balance and inflation on target over the medium term.'
The Bank of Canada said the global economy is strong. 'At the same time, global competition and the past appreciation of the Canadian dollar continue to pose challenges for a number of sectors of the economy.'
Meanwhile, the core inflation rate appears to be staying within the central bank's target band of one to three per cent. Data released last week shows core inflation held steady at 1.7 per cent in March.
Canada's annual inflation rate remained unchanged at 2.2 per cent in March as higher gasoline prices were offset by lower prices for computer gear and clothing.
'Against this backdrop, the Bank decided to raise its target for the overnight rate,' said central bankers.
CTV's business editor Linda Sims said this probably means at least one rate hike is likely on the way. However, the rate is still quite low, compared to historic levels.
'We have got good job growth and decent economic growth in this country," Sims told CTV Newsnet.
"It will not put much of a crimp on the economy, including the housing market, going forward."
The next announcement on the overnight rate is scheduled for May 24.
Looking forward, the Bank of Canada predicts the Canadian economy will grow by 3.1 per cent in 2006, 3.0 per cent in 2007, and 2.9 per cent in 2008.

Mortgage fraud growing problem across Canada

2006-04-27T06:51:00.000-06:00

By The Canadian Press
VANCOUVER � Runaway housing prices and a highly competitive mortgage industry are contributing to a growing problem with mortgage fraud across the country, experts say.
But it�s a complex issue and one lenders don�t really want to talk about.
'Mortgage fraud is a problem, and I don�t think anybody can deny it,' said Ken Fraser, executive director of investigations for B.C.�s Financial Institutions Commission, which investigates fraud complaints involving mortgage brokers and real-estate agents.
'A lot of figures have been bandied back and forth over the years about the degree of it, but I don�t think anybody has a figure on it. It is definitely escalating.'
Mortgage fraud is any act that convinces a lender to grant a mortgage that would have been rejected if the truth were known. For instance, providing a letter of employment listing an inflated salary, or a note from a relative confirming a gift toward the down payment on a purchase when the money is really a loan.
This is known as 'shelter fraud.' It happens when borrowers are trying to buy a home for which they don�t qualify.
In a hot real-estate market, these frauds are rarely detected and don�t result in a loss to lenders because the mortgages are repaid.
It�s 'fraud for profit' that is a growing concern for lenders � and in some cases, innocent property owners are the victims.
In these instances, unscrupulous mortgage brokers, bankers, real-estate agents, lawyers or appraisers may use false appraisals to increase the value of a property.
They are able to sell it a few times through fake documents and get a mortgage for a far higher amount than the real value of the property, leaving the ultimate purchaser to pay the bills.
Or false documents or identities may be used to mortgage homes for marijuana grow-ops or crystal meth labs.
Criminals also can use identity theft to pose as the owner of a property at the provincial land-title office. They then are able take out a mortgage on the home or sell it to an innocent purchaser and make off with the proceeds.
Earlier this month, a Surrey, B.C. woman pleaded guilty to mortgage fraud after posing as the owner of a vacant lot and taking out a $170,000 mortgage on the property.
The mortgage was arranged through a mortgage broker but another broker figured out the scam and alerted police.
The fraudster was ordered to repay the Royal Bank for the mortgage as well as $2,500 to cover the costs of the elderly Vancouver woman who owned the land and had to fight to clear her title. Two other suspects are still before the courts.
"The problem with mortgage fraud is you’re dealing with identity theft," said Barry Elliott, Ontario-based creator and coordinator of Phonebusters, a national police-sponsored call centre that tracks fraud.
"You can be victimized with a mortgage on your property and not be aware of it, or have property purchased in your name and not even know about it," he said.

GE Money Targets 10% Share of Canadian High-Risk Mortgages

2006-04-21T08:31:00.000-06:00

April 20 (Bloomberg) -- GE Money, General Electric Co.'s consumer-finance arm, is expanding in Canada in a bid to capture 10 percent of the country's C$10 billion ($8.8 billion) market for high-risk mortgages, said Stephen Motta, chief executive of the Canadian unit.
The finance company plans to sell mortgages through independent brokers across Canada by year-end, and is trying to hit its market share target in three years, he said. GE Money started selling mortgages in Ontario last year, and has since become licensed in Alberta and British Columbia.
``We're on a pretty significant growth trajectory, but growing from zero,'' Motta, 43, said in a telephone interview. ``It is a longer-term vision we have for the Canadian market, rather than bursting on the scene, making some noise, and not being here three years from now.''
GE Money, a unit of the world's No. 2 company by market value, is competing with firms such as Toronto-based Xceed Mortgage Corp. Xceed estimates the so-called ``near prime'' market that GE Money is targeting may grow to about C$60 billion, or 10 percent of Canada's overall mortgage market.
Canada's mortgage business is growing as job and wage increases fuel expansion in the economy, which the Bank of Canada predicts will grow 3.1 percent in 2006, the fastest in six years. New home construction during the first three months of the year was the highest in more than 18 years, according to the Canada Mortgage and Housing Corp.
High-Risk Loans
GE Money and Xceed offer loans at higher interest rates than standard mortgages because their clients are typically self-employed, new to the country or don't have a credit history. GE is focusing on"

FREE Report - Building an Investment Portfolio

2006-04-17T13:42:00.000-06:00

This special report gives you information on different types of investment instruments including stocks, bonds, GIC's, mutual funds and more...

Download your FREE Report here

Building your Investment Portfolio - Your Investor Profile

2006-04-17T07:21:00.000-06:00

Looking to Build your Investment Portfolio?
A portfolio with the right mix of cash, fixed income and equity investments suited for your goals and risk level. Getting the right mix of mutual funds may generate higher potential returns while at the same time effectively manage risk.

Enhanced returns while minimizing risk
Selecting investments that tend to react differently to the economic climate helps to make it more likely that at least a portion of the investments will be performing well at any point in time. The highs and lows of any single investment should be partially offset by the performance of the other investments in the portfolio. Foreign investments will help to reduce risk and increase your potential returns.

Automatic portfolio rebalancing to keep your portfolio on track with your objectives
You get the freedom from monitoring your investments because your Strategic Portfolio will be reviewed on a quarterly basis and automatically rebalanced to your original asset mix.

Getting Started: Determine Your Investor Profile
Most banks will offer an easy-to-follow questionnaire that helps you understand your investment preferences. Based on this information, they will match you with an investment portfolio that is right for you.

Conservative Investor
The Conservative investor is looking for safe financial products. Your risk tolerance level is low, and you are most comfortable investing in products where the interest rate, maturity dates, and payout schedule of interest earnings are predetermined.

Moderate Investor
The Moderate investor is looking for significant investment income and a high level of security. However, you are willing to invest a portion of your funds in classic financial products carrying a certain level of risk.

Audacious Investor
The Audacious investor is ready to tolerate a little more risk to achieve long-term capital growth. While remaining cautious in your strategy, you invest close to half of your portfolio in the stock market.

Ambitious Investor
The Ambitious investor is looking for high-growth potential over the long term. Since you are aiming for a higher return, you accept a higher level of risk for up to two-thirds of your portfolio, which is invested in the stock market.

Dynamic Investor
The Dynamic investor has a high tolerance for risk and is looking for high-growth investments, opting for the potential for capital appreciation in the stock market. Your portfolio is mostly made up of stock securities.

Go to the questionnaire to find out what category you fall under

Woman a victim of mortgage fraud

2006-04-17T06:45:00.000-06:00

House bought from her after signature forgedA serious problem in GTA, says title insurance officialApr. 13, 2006. 11:10 AMHAROLD LEVYSTAFF REPORTEREarlier this year, Susan Lawrence discovered that the 100-year-old Victorian home she had been living in for 30 years had been stolen by identity thieves.The North York widow had been blissfully unaware the thieves had used her forged signature to purchase the house from her and discharge a mortgage she had put on the property.They had then put a new mortgage on the property for almost $300,000, pocketed the money, defaulted on the mortgage, faded out of sight, and left her facing eviction.Lawrence soon learned she had become a victim of mortgage fraud — one of the growing number of people in the Greater Toronto Area who are being victimized by real estate savvy swindlers."I just could not believe it, and anybody I talked to couldn't believe it either," Lawrence said in an interview. "They all asked, `How could anybody sell your house from right under you?'"To make matters worse, Lawrence had contracted to sell the home, which she no longer owned, to a young couple.Lawrence discovered something was wrong when she went to her bank to discuss her mortgage in view of the pending sale and was told the bank could find no record of it."The clerk told me not to worry because it must be a mistake," Lawrence says. "A week later the bank called to say I was a victim of fraud."Susan Leslie, a senior official of First Canadian Title, a title insurance firm, says mortgage fraud has become a serious problem in the Greater Toronto Area and throughout Canada, and that it is on the rise."Quite frankly, these fraudsters are one step ahead of us," Leslie said. "As housing prices rise, this becomes a very lucrative crime."The Law Society of Upper Canada says in a report that mortgage fraud has also proliferated because people can borrow large amounts of money without having to meet anyone in person — and vast amounts of information about properties and homeowners are now available through Ontario's electronic land registry system.The Law Society also noted that increased competition within the mortgage industry leads to pressure to close a deal without taking all of the steps necessary to determine if it's legitimate.Lawrence says that when she got in touch with Toronto lawyer Morris Cooper, she expected to hear that the law would help her out of her predicament because she was the innocent victim of a callous crime.

Continued...

Don't pay more tax than you have to

2006-04-15T06:39:00.000-06:00

Apr. 12, 2006. 06:45 AM
ELLEN ROSEMAN

What do tax tips and spring flowers have in common? They pop up in April.
I've gone through my garden of money-saving tax advice and picked some of the prettiest blooms for your inspection"

Don't pay interest on top of interest.

If you owe money, the government will charge daily compound interest on your debt. This means you pay interest not only on the original amount you owe, but also on the interest that starts adding up.

"If you can't pay the amount that's due, talk to your financial institution about a loan or a line of credit that charges a lesser interest rate than the Canada Revenue Agency," says lawyer Stanley Kershman, author of Put Your Debt on a Diet (Wiley).

Ottawa can also charge you a late-filing penalty — and interest on the penalty. So, you should file your return on time to avoid penalties, even if you can't pay the amount due.

Work out your tax factor.

This is important to know when you're making financial decisions, says Dale Ennis, editor of Canadian Moneysaver magazine.

Let's take Joe, an Ontario taxpayer with $35,596 in employment income. His marginal tax rate — what he pays on the last dollar of income earned — is 31.15 per cent.

If you divide 100 by 100 minus 31.15, you get 1.45. This is Joe's tax factor. It means he must earn about $1.45 in before-tax dollars to have $1 for his personal use.

Joe carries personal debt at 10 per cent interest. Multiply by 1.45 and you find his after-tax interest rate is 14.5 per cent.

Now let's take Sally, an Ontario taxpayer with $71,191 in income. She has a marginal tax rate of 37.16 per cent and her tax factor is 1.59.

Sally has to earn $1.59 in before-tax income to have $1 for her personal use. And a 10 per cent loan actually costs her 15.9 per cent after tax.

Know your break-even formula for investments.

You should try to come out ahead after taxes and inflation when investing your money outside a tax-sheltered retirement account.
Ennis has done some calculations on the break-even rate when inflation is running at a rate of 4 per cent.

Divide 4 by 100 minus your marginal tax rate. This will give you the break-even formula for an interest investment.
Joe has a marginal tax rate of 31.15 per cent. So, he needs to earn 5.81 per cent. to break even on his interest investments.
Sally has a marginal tax rate of 37.16 per cent. Her break-even rate for interest investments is 6.37 per cent.

Dividends are taxed at a lower rate than interest. Joe needs to earn 4.75 per cent to break even on dividends, while Sally's break-even rate for dividends is 5.52 per cent.
Capital gains have the lowest tax rate. Joe needs 4.74 per cent to break even on stocks and equity funds, while the rate Sally needs for capital gains is 5.11 per cent.

Claim tax credits for disabled family members.

Substantial tax credits are available for anyone with a severe or prolonged disability that is expected to last for a continuous period of at least 12 months.
To claim the disability amount, you have to get a medical practitioner to sign form T2201 (the disability tax credit certificate).
The tax credit can be transferred to a family member if the disabled person has no tax to pay.

"This is possibly one of the most lucrative, yet most missed, provisions on the tax return," says author Evelyn Jacks in her self-published book, Essential Tax Facts.
"Note that if a person was diagnosed with cancer in September and the condition of the disease became debilitating by the end of the year, the amount would be claimable for the whole year."

Claim tax credits for post-secondary students.

If you have children going to college or university, you can use any tax credits the children can't use.

Students are allowed to claim their tuition and $400 for each month they're enrolled full-time (or $120 a month for a part-time student).

Any unused credits can be carried forward indefinitely by the student. Or the credits can be transferred to a parent, grandparent, spouse or common-law partner. The maximum tax credit available to transfer is $800.

To claim the fees, you have to get form T2022A (tuition and education amounts certificate).
This tax form is provided by the educational institution, but not necessarily in the mail. You may have to go online, using the student's user name and password, and print out a copy.

Where to invest in real estate now

2006-04-11T17:36:00.000-06:00

"Want to buy a house in Vancouver? Hope you have lots of cash. The average price of a house in Lotus Land hit $490,004 in February. Think about it for a second. That's nearly half a million dollars--and 26.5% higher than a year ago. Put another way, it now takes a household income of $142,000 a year to comfortably purchase a place to live.
Wasn't the real estate market supposed to slow down this year? Apparently not. And it's not just Vancouver that's experiencing double-digit price increases so far this year. Canadian Real Estate Association (CREA) figures show the average home price from February 2005 to February 2006 rose 26% in Calgary and 15.5% in Edmonton, both economic boomtowns of late. But even relatively moribund Toronto saw an increase of nearly 6%, for an average price of almost $354,000. That's a lot of money to put on the line if you're thinking of investing in the real estate market--let alone looking for a place to live.

No wonder people are talking about another housing bubble in the making. Prices continue to soar. Interest rates are on the rise. Vacancy rates are comparatively higher, making renting an attractive option once again. But let's get one thing clear: there isn't a housing bubble."

Story Continued...

CHIP Reverse Mortgage for Seniors

2006-04-10T19:23:00.000-06:00

Created from a senior’s perspective, a CHIP Reverse Mortgage is a unique home equity borrowing opportunity for homeowners in Canada who are age 62 and older.
Senior homeowners can access up to $500,000 tax-free with no payments required on the loan until the home is sold or owners move out.

The amount available to the homeowners is based on the appraised value of the home, the age and gender of the homeowners, marital status, property type, and location. CHIP Reverse Mortgages are available in most areas across Canada, on most types of homes. Leaseholds, co-ops, manufactured homes and large rural acreages are not eligible.

The proceeds from the reverse mortgage are received as a cash lump sum. Homeowners are initially approved for a maximum sum, but may choose to receive a lesser amount initially and then request subsequent advances on the remaining available proceeds.

As part of a well-balanced financial plan, a CHIP Reverse Mortgage can add new flexibility to a senior’s finances and is an effective way to:

Create new and tax-efficient sources of income;
Preserve existing investments for continued growth and income generation opportunities;
Reduce personal income tax; Provide cash resources to fund a large project, purchase a vacation property, fund medical home care, start a new business or hobby, make cash gifts to children and grandchildren, and more.

Unique Protections and GuaranteesAlone among home equity borrowing options, the CHIP Reverse Mortgage offers these unique protections and guarantees:
No repayment is required while the homeowners continue living in the home.
The homeowners have complete freedom to sell or move at any time.
Homeowners will never be asked to move or sell to repay the loan.

As with other mortgages, up-to-date payment of property taxes, fire insurance, condominium/ maintenance fees, and maintenance of the property is required.

The loan amount to be repaid is guaranteed not to exceed the fair market value of the home at the time it is sold, protecting the balance of the senior’s estate.

Tax-savings OpportunitiesA CHIP Reverse Mortgage may also assist seniors in their tax-savings strategies. Proceeds from the reverse mortgage are received tax-free and are not added to taxable income. When the proceeds are used to purchase new investments, the interest expense of the loan may be used to offset tax on the new investment income and reduce the overall tax payable.

Terms of RepaymentBecause no payments are required on the reverse mortgage while the homeowners are living in their home, interest is added to the outstanding balance and is compounded semi-annually. The full amount only becomes due upon the death of the last surviving spouse, when the home is sold, or when the last surviving spouse moves out. The homeowner may leave the home for up to 12 months before the loan in considered payable, accommodating situations where a senior requires institutionalized medical/nursing home care for a short term.

All or a portion of the accrued interest may be paid once every calendar year, which can reduce the accumulation of interest on the outstanding balance and help preserve greater equity in the home.

The reverse mortgage may be repaid in full at any time. If payment is made within 36 months of the advance of funds, a pre-payment amount will apply. An interest rate differential payment may also be required. This will be waived if the reverse mortgage is repaid as a result of the death of the last surviving spouse or reduced if the reverse mortgage is repaid as a result of the long-term medical care institutionalization of the last surviving spouse.

A serious commitment to seniors.As Canada’s only national provider of reverse mortgages, CHIP’s commitment to seniors is at the core of the way the company does business. At every stage of their relationship with clients, CHIP ascertains that the senior is fully-informed and comfortable with the decision they are making. Seniors are encouraged to involve their family and their personal financial advisor. CHIP also requires the senior to seek an independent legal review of their contract. (CHIP offers a referral to a list of lawyers across Canada who have experience with reverse mortgages.)

If CHIP believes that a reverse mortgage is not in the best interests of a client, or that the senior is being pressured by outside influences, they will discuss that situation frankly and, if necessary, decline to proceed.

The CHIP Reverse Mortgage is available directly from CHIP by calling toll-free 1-800-563-2447 or by visiting the CHIP website. A do-it-yourself estimate is available on the CHIP website. Alternatively, seniors can request a CHIP Reverse Mortgage estimate through most of Canada’s major banks or with the assistance of their personal financial planner.

Understanding Your Credit Report

2006-04-10T12:59:00.000-06:00

If you have been turned down for a loan or for a mortgage loan based on your Credit Report, don't continue to apply elsewhere. You need to know the reasons why and unfortunatley most of the time lenders will not advise you of any errors on your report or how to fix it. Each time you apply for credit, it lowers your beacon score. (Credit Score). Your Beacon Score is a significant factor in calculating your ability to repay, rates and terms for your loan. With a low Beacon Score you should expect to pay higher interest and the lenders may look at is as though you are too much of a risk and will not be able to repay your loan.

The best way to save time is to find out what is stopping you from getting approved and if there are some problems, how to fix them.

You can get your credit report from one of the following two credit bureaus in Canada
Equifax or Tranunion

You can pay for a copy of your credit report and see it immediately at the Equifax web site or you can fill out an application and get a copy mailed to you for FREE.

You can visit Equifax to view your Credit Report online now or
Request a FREE copy of your Equifax Credit Report here

After you have obtained a copy you can refer to the Credit Report Guide, this will explain how to read your Report.

If you have any questions please feel free to contact me and I would be happy to explain it to you.

Rachelle Czartorynskyj
Mortgage and Finance Specialist
1-877-590-1961

Canadian Housing Market - Best first quarter ever

2006-04-09T08:05:00.000-06:00

TORONTO, April 5 /CNW/ - Ten per cent more resale home transactions took
place during the month of March than during the same month a year ago, Toronto
Real Estate Board President John Meehan announced today. The March total of
8,707 sales was the second-highest ever, bringing the total for the first
quarter of 2006 to 19,831 sales, a record first quarter result.

"There is a lot to be positive about in this market," Mr. Meehan said.
"The year has started very strongly and it shows no signs of slowing as the
peak spring market approaches."

According to Jason Mercer, Senior Market Analyst for the Canada Mortgage
and Housing Corporation, strong economic fundamentals are helping to maintain
consumer confidence.

"Consumers remain upbeat about home ownership," he said. "Tight labour
market conditions with low unemployment and rising real wages, along with very
low borrowing costs have kept potential buyers confident in their ability to
purchase and pay for a home."

A number of areas across the city of Toronto showed high March sales
totals in comparison to totals recorded in March 2005:

Condominium sales represented the majority of sales as the Scarborough
Centre / Woburn area saw 57 per cent more overall transactions compared to
last March.

Condominium sales continued to fuel the Downtown / Harbourfront area as
it experienced an overall increase in sales of 34 per cent compared to March
of last year.

Further west, the Junction / High Park area of Toronto experienced
63 per cent more overall transactions compared to the same timeframe a year
ago.

"The housing market is in good shape overall," Mr. Meehan added. "There
are strong fundamentals in place and we are seeing that translate into steady
performances month after month. It is still a great time to be in the market."

Toronto REALTORS are passionate about their work. They adhere to a strict
code of ethics and share a state-of-the-art Multiple Listing Service. Its
22,765 listings resulted in March's 8,707 sales. Serving over 23,000 Members
in the Greater Toronto Area, the Toronto Real Estate Board is Canada's largest
real estate board.

FREE Reports - Mortgage Information, Special Reports

2006-04-09T07:52:00.000-06:00

Please fill out our form and we will send you your choice of FREE mortgage reports and information:

7 Things You Must Know Before Applying for a Mortgage!
Understanding Your Credit Report
Repair & Build Your Credit Fast!
Commercial & Income Properties Information
10 Questions You Must Ask When Applying for a Mortgage!
How To Get The Best Price for your Home!
Credit Card Secrets, that the credit card company doesn't want you to know!
Divorce and Your Home
How To Afford a Mortgage
How To Escape the Debt Rat Race!
Bi-Weekly Payments: Yes or No
10 Biggest Home Buying Blunders!
CMHC - Home Buying - Step By Step

Loan rates manageable, poll shows

2006-04-08T07:11:00.000-06:00

Most Canadians believe their mortgage rates are manageable, despite recent hikes, according to a recent report released by the Canadian Institute for Mortgage Brokers and Lenders.

The information, gathered by Canadian public opinion firm Pollara in a phone survey in February, indicates 42 per cent of Canadian residential mortgage holders polled have not seen their overall standard of living significantly affected by recent mortgage rate increases.

'As the spring home buying season begins, interest rates remain at a historic low and mortgage holders continue to be satisfied with their rates,' said Ron Swift, president of the mortgage brokers institute.

'Our latest survey reveals that Canadians find their current mortgage rates manageable, despite increases over the past eight months. In addition, although mortgage holders anticipate further rises, the study suggests that a majority will be able to tolerate an increase of up to 1 per cent. That's great news for the marketplace.'

Mortgages now held by Canadians have an average interest rate of 4.9 per cent. Sixty-six per cent of consumers said they expect rate increases in the near future.

In anticipation of a rise in interest rates, consumers are more likely to renew their mortgages early to lock in to current rates.
The survey firm contacted 1,015 residential mortgage holders in Canada. The sampling is considered accurate within 3.1 percentage points, 19 times out of 20.

For a copy of the survey, visit http://www.cimbl.ca. "

Home Equity Loans

2006-04-05T09:44:00.000-06:00

Equity is the difference between your home's value and the balance on your mortgage loan. If your home is worth $100,000 and you owe $75,000 on the mortgage, then you have $25,000 of equity in your home.

Borrowing against this equity is currently a very popular method of getting a big chunk of credit, primarily because of low interest rates. Add to that the fact that the interest on most home equity loans is tax deductible and they become an appealing option if you need to make a major purchase.

Home equity loans are typically used for consolidating consumer debt or covering a large expense such as a big wedding, college tuition, or home renovations.

However, because your home is collateral for the loan, you should be very careful about using home equity loans. The problem is that if you default on the loan, the bank will foreclose on your home.

Types of Home Equity Loans
There are two types of home equity loans. A traditional home equity loan is also called a second mortgage and is when a bank lends you a lump sum of money that must then be paid back over time. With this type of home equity loan, interest begins building as soon as the bank issues you the money.

A newer type is a home equity line of credit, where a bank gives you a checkbook or credit card to make purchases, which then accrue against your home's equity. With this type of home equity loan, interest does not begin building until you actually make a purchase.

There are also several ways to repay a home equity loan. The most common option is to make regular payments toward both the interest and the principal.

However, some loans also give you the option of only paying the interest at the beginning of the loan and gradually paying more of the loan and gradually paying more of the principal. Finally, you may have the choice to pay both principal and interest, but to make extra payments in order to pay off the principal sooner. You should check with your lender about this, as some loans have penalties for paying ahead."

Reverse mortgage can pump up your retirement pay

2006-04-05T09:40:00.000-06:00

"QUESTION: My husband and I are retired with a total annual income of $40,000. We owe $145,000 on our home, which is worth $475,000. We don't have any extra to play with. We would like to know whether you would advise us to consider a reverse mortgage.

ANSWER: A reverse mortgage could pay off your existing mortgage and eliminate the monthly mortgage payments you are currently paying. This could free up some income for you to play with each month.

Here's essentially how it would work. A reverse mortgage would pay off your existing mortgage balance of $145,000. Then, rather than having to make monthly interest and principal payments, the interest charged on the loan would simply add to the balance of the loan.

Let's assume your home will appreciate by 4 percent in the coming years, and the reverse mortgage interest rate averages 6 percent. Ten years from now, your home is worth $703,000 and the balance on the reverse mortgage is $260,000. In 20 years, your home is worth $1,040,000 and the loan balance is $465,000.

When you move from the home, sell the home or pass away, the loan becomes due, and any equity in the home goes to you or your heirs. In the event the mortgage balance is greater than the value of the home, you can walk away from the loan without paying a dime.

In addition to using a reverse mortgage to pay off your existing mortgage, you could also pull out extra cash, secure a line of credit or receive monthly income. Obviously, the more money you pull out, the less equity you'll have in your home.

Unlike a traditional mortgage, the startup costs are high, so you wouldn't want to use a reverse mortgage if you plan to move soon.

A reverse mortgage can be a great option, but for those who want to leave a truckload of money to their kids, paying off a home loan out of retirement income would be a better option."

TheStar.com - Home affordability dropping, RBC finds

2006-03-30T07:17:00.000-06:00

Canadians spent a higher portion of their income on housing in the fourth quarter, as high home prices and utility costs pushed affordability to its worst level in a decade, said a report by the Royal Bank of Canada.

That deterioration is coming at the end of ten years of generally 'excellent' affordability conditions, the report by the bank's economics department noted.

And, while affordability will likely continue to slide in the first half of this year, rising incomes and steady interest rates and house prices should stop the declines in 2007, economists said.

RBC Financial Group's (TSX: RY) latest housing affordability index, measures the proportion of pre-tax household income needed to service the costs of owning a home.

Such surveys are a popular promotional tool for Canada's banks and mutual fund companies. Many use public opinion polls to gauge demand for financial products and services, promote specific brand names and learn more about the public's financial management habits.

All the banks are focused on the housing market since mortgage lending is one of their key sources of profit and the average mortgage borrowed by homebuyers has been growing in recent years as house prices have soared.

Last year ended on a 'mildly sour note' after three quarters of improvement, the bank said, with housing affordability deteriorating across the country.

The worst-hit cities were Vancouver and Calgary, where house prices escalated rapidly as the economies in those energy- and mineral-rich western provinces grew faster than than the Canadian average.

While the markets in British Columbia and Alberta "continue to power forward," Royal Bank expects the pace of demand for new and existing homes in the rest of the country to slow moderately over the next two years because of the decline in affordability.

It will be "a controlled slowdown, with both new supply and demand expected to cool down simultaneously," the report said.
Much of the drop in affordability stems from slower growth in household income, said Derek Holt, the Royal Bank's assistant chief economist.

"This was unable to offset increases in mortgage rates, house prices and utilities costs," he said.
Benjamin Tal, senior economist at CIBC World Markets, expects affordability to get worse before getting better.

"Income growth in Canada is starting to accelerate, wages are rising," Tal said. "But the increase in house prices has been faster. Add to it higher interest rates, and the overall size of mortgages is rising, so affordability is going down."
The impact of rising interest rates has been more pronounced, Tal said, because about 22 per cent of mortgages are now variable-rate — moving with the bank's prime lending rate — rather than being fixed at long-term rates.

"With interest rates rising by maybe another (quarter to half point), we probably will see affordability continue to deteriorate, at least for the next few months," he said.
Beyond that, he expects it to stabilize because interest rates will stop rising, house prices will level off, and Tal predicts that incomes will be stronger than expected.
"So, I think affordability will not be much worse a year from now. It might even be better."

The housing market's soft landing will be supported by growth in home renovation spending, the Royal Bank report said.
Canada's renovation spending has grown by more than 50 per cent since 2000, to over $26 billion in 2005.

"While the recent takeoff in renovation spending is taken by some to be a sign of a bubble, our view is that homes built in the 1980s boom will continue to enter their prime renovation years, such that growth in renovation spending will partly offset weaker new home construction," the report said.
Ontario, in the meantime, is seeing new home construction decline as construction workers flock to Alberta.

Last year, housing starts in Ontario pulled back 7.4 per cent while residential building permits dropped for the first time in a decade.

"Migration and housing starts tend to move closely together in Ontario," Holt said. "Labour-hungry western provinces, most notably Alberta and British Columbia, continue to pull workers from other provinces, putting downward pressure on new home construction in Ontario, which still remains at elevated levels."

Wednesday's report suggests that condominiums were the most affordable Canadian housing type during the fourth quarter, with an index of 25.7 per cent. A standard townhouse is next at 30.1 per cent, followed by a detached bungalow at 37 per cent.

A two-storey home remains the least affordable type with an index reading of 43 per cent.

CNW Group: "42% of Canadian mortgage holders still happy with their rates despite recent increases

2006-03-29T06:34:00.000-06:00

Canadian Institute of Mortgage Brokers and Lenders releases report on
mortgage choices and perceptions in a changing market

TORONTO, March 28 /CNW/ - A majority of Canadians believe their current
mortgage interest rates are manageable, despite recent hikes, according to a
report released today by the Canadian Institute for Mortgage Brokers and
Lenders (CIMBL). The information, gathered by Pollara in a phone survey in
February and analyzed in conjunction with Canadian housing analyst and CIMBL
economist Will Dunning, indicates that 42 per cent of Canadian residential
mortgage holders polled have not seen their overall standard of living
significantly affected by the recent mortgage rate increases.
'As the spring home buying season begins, interest rates remain at a
historic low and mortgage holders continue to be satisfied with their rates,'
said Ron Swift, President of the Canadian Institute for Mortgage Brokers and
Lenders. 'Our latest survey reveals that Canadians find their current mortgage
rates manageable, despite increases over the past eight months. In addition,
although mortgage holders anticipate further rises, the study suggests that a
majority will be able to tolerate an increase of up to 1 percent. That's great
news for the marketplace.'
For the mortgages currently held by Canadians, the average mortgage
interest rate is 4.9 per cent. Consumers are in tune with what the Bank of
Canada and economist are forecasting - 66 per cent of consumers say they
expect mortgage rate increases in the near future.

CIMBL's research shows that current mortgage holders have a surprisingly
high tolerance for potential interest rate increases. The study suggests thatif rates remain at current levels, 62 per cent of Canadians would faceincreased interest rates at their next renewal. Yet, only 21 per cent ofmortgage holders would see a significant impact on their standard of livingfor a monthly mortgage rate increase of $100; 53 per cent would see an impactwith an increase of $200. Sequentially, a further increase of one-half of a percent wouldnegatively impact 20 per cent of Canadian mortgage holder's overall standardof living. An increase of one-half of a percent from current rates wouldresult in an average monthly increase of $50 in interest ($72 up from $22).Total interest costs for Canadian mortgage holders would jump by more than$2.7 billion ($3.9 billion up from $1.2 billion). An increase of one percentage point from current rates would negativelyimpact the overall standard of living of 29 per cent of mortgage holderspolled. Such an increase in rates would cause an average monthly interestpayment increase of $123, bringing the total interest costs for Canadianmortgage holders to $6.7 billion, up $5.5 billion from current costs. In anticipation of a rise in interest rates, consumers are more likely torenew their mortgages early to lock into current rates. For the 15 per cent ofconsumers scheduled to renew their mortgages in the next twelve months,relatively small increases are expected - an average of $6 per month. Forthose renewing during the next one to six years, average costs will rise andpeak in about four years. "As always, there is uncertainty about future changes in interest rates,"Swift added. "CIMBL's report demonstrates that although mortgage rates are onthe rise, Canadians continue to borrow - whether they are taking out a newmortgage, renewing or refinancing an existing one. There is still a strongreal estate demand in Canada." The survey, "Consumer Mortgage Choices in a Changing Market", contains awealth of additional industry data including the age distribution of mortgageholders in Canada, popularity and rates of different mortgage types andmortgage terms, and the amount of remaining principal on existing mortgages.For a full copy of the survey, please visit: www.cimbl.ca."

Mortgage Broker vs. Mortgage Banker

2006-03-28T08:28:00.000-06:00

Many consumers assume that “mortgage companies” are banks that lend their own money. In fact, a company that you deal with may be either a mortgage banker or a mortgage broker.

A mortgage banker is a direct lender; it lends you its own money, although it often sells the loan to the secondary market. Mortgage bankers (also known as “direct lenders”) sometimes retain servicing rights as well.

A mortgage broker is a middleman; he does the loan shopping and analysis for the borrower and puts the lender and borrower together. Many of the lenders through which the broker finds loans do not deal directly with the public (hence the expression, “wholesale lender”).

Using a mortgage banker can save the fees of a middleman and can make the loan process easier. A mortgage banker can give you direct loan approval, whereas a broker gives you information second-hand. However, many mortgage banks are limited in what they can offer, which is essentially their own product. In addition, if you present your loan application in a poor light, you’ve already made a bad impression. I am not suggesting you lie or mislead a lender, but understand that presenting a loan to a lender is like presenting your taxes to the IRS; there are many ways to do it, all of which are valid and legal. Using a mortgage broker allows you to present a loan application to a different lender in a different light (and you are a “fresh” face).

A mortgage broker charges a fee for his service, but has access to a wide variety of loan programs. He also may have knowledge of how to present your loan application to different lenders for approval. Some mortgage bankers also broker loans. As an investor it is wise to have both a mortgage broker and a mortgage banker on your team.

Controlling debt...

2006-03-27T07:19:00.000-06:00

Controlling debt...: "Mar 24, 2006

Mike Lacey - More from this author

Managing personal finances is among the biggest challenges facing Canadian households. Personal debt continues to climb as people seem either unable, or unwilling, to effectively manage their money.

This time of year is when the giving of the Christmas season comes home to roost, says Steve Wesley, manager of the credit counselling program at the Community Counselling and Resource Centre.

He explains many of those unable to meet the credit card bills that pile up after the holiday season are facing collection agencies. Many people don't know where to turn as they're swallowed up by debt.

Mr. Wesley and others with his organization provide free credit counselling services to those in need, helping to set up personal budgets and provide tips on ways to get rid of debt.

He says there are some simple, common sense steps people can make to ensure they don't end up in financial trouble.

'The first thing anyone should do is sit down and draw up a monthly expense sheet,' he says.

'This is a snapshot of where the money is going.'

That way, a person can see if more money is coming in than is going out. If it is the reverse, the next step is to look at what expenses can be trimmed back or taken out of the equation all together.

'What are the necessities of life? Rent, mortgage, food, clothing, things you have to have to survive,' he says.

Items not necessary can be put aside, at least until the finances are in better shape.

'It's 99 per cent common sense but, for some reason, a lot of people will shy away from sitting down at the kitchen table [and putting together a budget],' he says.

That's a good plan for those who are not burdened by too much debt. But those facing an avalanche of bills can turn to Mr. Wesley and his staff. To book a free and confidential appointment with one of the organization's counsellors, call 742-1351 between 9 a.m. and 4:30 p.m. Monday to Friday.

Meanwhile, Credit Counselling Canada also provides the following tips on getting debt under control:
·Sell unsecured assets. Have a garage sale, sell used clothes or get rid a second vehicle if it's owned outright.

·Consolidate your debts. A consolidation loan can bring all of your debts into one payment with lower interest.

·Refinance over a longer period of time. Extend the length of time you have to pay on a personal loan, a car loan, a lease or a mortgage. This may reduce the monthly payment required.

·Borrow from friends or relatives.·Attempt to make a lump sum payment. If you're expecting a large sum of money, such as a tax refund or from selling an asset, talk to your creditor about them accepting a lump sum.

·Set up a repayment program with creditors if possible.

'The real threat is global imbalance'

2006-03-27T07:15:00.000-06:00

The Rediff Interview/David Wyss, chief economist, S&P

'The real threat is global imbalance'Sunil Jain March 24, 2006

Standard & Poor's Chief Economist David Wyss predicts that 2007 will be a reasonably good year as well (4 per cent global growth as compared to 4.5 this year), but sees increasing global imbalances as the problem area.

Excerpts from a conversation with Business Standard:

Despite the risks associated with the twin US deficits, you're projecting pretty robust growth in not just this year, but also in 2007.

We're looking at 4.5 per cent this year and 4 per cent in 2007. The Eurozone is looking better and the good thing about Japan's growth (this is the third year it's over two per cent) is that it is now driven by domestic demand and not exports as in the past. Asia and Latin America continue to do well and account for half the world's growth.

The twin deficit is not just a US problem. France, Germany and the UK have sizeable fiscal deficits as well, roughly the same size in relation to GDP. The US trade deficit has to be seen in the context of a sizeable trade surplus in Japan and Asia.

So the issue is of poor spending in the rest of the world?

It's a real problem. The Eurozone accounted for 15 per cent of the world's GDP in 2004, but just 6 per cent of the world's growth. Japan accounted for 7 per cent of GDP but just 4 per cent of growth -- so, the two areas account for around a fourth of GDP but just a tenth of growth. This is the problem, and since they account for most of US exports, the problem gets heightened.

With poor productivity growth in the EU and Japan (it's around 1 per cent in both areas as compared to 2.5 in the US) and no population growth, few people want to invest here either. So, the overhang keeps getting worse.

People focus on China's mercantilist policy and the currency peg that is clearly artificial and aimed at keeping trade going (I think the remninbi's about 20 per cent out of whack), but Japan's got a larger trade surplus -- I think the yen should be around 95 or so to the dollar, instead of the 116 or so that it is today.

The S&P 500 are also sitting on piles of cash -- the problem is not so much a glut of savings as it is a dearth of investment.

With the dollar getting stronger, the problem's getting worse. So when does the dollar start weakening?

The Fed will probably have two more hikes by May and stop around 5 per cent, while the European Central Bank will move to 3 per cent by the end of June after two more hikes. Only when the Fed stops its tightening, will people wake up to the exchange risk, so the inflows to the US should slow down (this will then increase bond yields) and the dollar will soften. The problem is that while markets usually fix things by currency depreciation/appreciation, I see the Bank of Japan going back to playing an active role instead of letting the market function.

So you're seeing a soft landing? What about the Chinese moving to euros, and what of the property bubble bursting in the US?

I'm seeing a soft landing, yes. I don't see the Chinese moving to the euro in a big enough way since this will hit them a lot more than it will hit the US. The property bubble will burst, but I don't see it bursting in the sense of property prices falling -- I see it bursting as in prices not rising. Of course, there will be pockets where you'll see actual declines.
Few people agree with this scenario. Aren't people taking double mortgages in the US, and so won't consumer spending take a huge fall once interest rates rise and prick the bubble?

Most US mortgage rates are fixed-interest and not floating, so even if rates rise, the immediate pressure will be restricted. The point of being over-leveraged is also over-stated. On an average, the mortgage value to the value of a house is around 45 per cent, which is safe. The US is actually not as high-debt as compared to the EU or Japan.

To what levels do oil prices need to climb to, before we see an impact on global growth?

Well, in real terms, we're seeing the highest oil prices in the past two decades. But the reason why it's not biting so far is that the share of energy in US GDP is around 7 per cent today as compared to 14 per cent in 1980 -- so we're a lot less energy-intensive. Plus there's more head room due to the enormous deflation brought about because of China and India in areas such as textiles (costs have gone down 4-5 per cent per annum here), and food's been pretty flat as well.

I don't think there's this cliff for prices to breach, but I think it could even go to $100 before we see a real problem. But the real issue here is how things unfold. If oil prices continue to rise due to demand, that's self-correcting since if prices start hitting demand, they'll self-correct.

A supply-side shock, however, is a different matter altogether. Over the next three to five years, however, there's a lot more capacity coming up (Canadian tarsand, coal liquefaction and Qatar's even putting up a plant to convert natural gas to diesel) and so prices should come down.

Can both India and China sustain their growth?

I think the weakness of the banking system in China can be tackled by recapitalisation, but the economy's now becoming too big to be led by exports and investment levels are already up to around 50 per cent.

India's growth is lead by tech and that can't go on because there's just so many engineers and software people you can produce -- don't forget, it takes 22 years to turn out a college graduate! India will keep to a 7-8 per cent growth and China will slow a bit, though it will still be more than 9 per cent.

TheStar.com - Man finds house was secretly sold

2006-03-24T08:15:00.000-06:00

TheStar.com - Man finds house was secretly sold: "Man finds house was secretly sold
Owner discovers new family living in house
Police say estranged wife made own deal
Mar. 22, 2006. 10:15 AM
STAN JOSEY
STAFF REPORTER

A Toronto man got a shock when he tried to return his children to his estranged wife at their matrimonial home in Ajax after a weekend visit and found another family living there, police say.
Durham Region police allege that the man's wife sold the home on Delaney Dr. without his knowledge and bought a larger home in Ajax with the $200,000 proceeds from the sale � a situation known as title fraud.
'I've never heard of a case quite like it,' said Det. Jack Haze.
Since their separation, the man usually returned the children to his wife at a specified location.
However, on one day in January 2005, the man missed the appointment with his wife and decided to take the children back to what he thought was their home in Ajax.
'He got the shock of his life when another woman answered the door and said it was her house,' Haze said in an interview.
The Toronto man contacted police, who found that the home had been sold in the spring of 2004 without his permission.
Police allege his estranged wife forged her husband's name on an agreement of purchase and sale, and then had her brother-in-law impersonate her husband at the lawyer's office.
False Canadian citizenship papers, which are 'a dime a dozen' on the street, Haze said, were used as identification for the transaction.
There has recently been a great deal of publicity about title fraud, which involves stealing a person's identity and then selling their home out from under them. In some c"

Retirement income for many based on homes

2006-03-24T08:12:00.000-06:00

TORONTO — About 17 per cent of Canadian homeowners say their homes will be their primary source of retirement income, according to a survey released Wednesday.

The survey, by RBC Royal Bank, also found that 32 per cent of respondents 55 and over hold a mortgage, and suggested that Canadians are increasingly comfortable with housing debt following the rise in house prices over the last few years.

‘‘There’s definitely a trend among aging baby boomers that they are very comfortable in holding debt later in their lives, and so I think that a reverse-mortgage, or at least leveraging the equity in their homes, is something they’re comfortable with,’’ Catherine Adams, RBC’s vice president of home equity financing, said in an interview.

Another recent study by the bank found that 48 per cent of Canadians do not believe it’s necessary to retire debt free.

Wednesday’s 13th annual Homeownership Survey also found that 60 per cent of Canadian homeowners currently hold a mortgage, up from 56 per cent in 2005 and from 50 per cent in 2000.

The average amount owing is $95,840.And nearly 40 per cent of mortgage holders have borrowed against the equity in their homes.

By: Tara Perkins

Preparing your home for sale...

2006-03-20T12:22:00.000-06:00

Preparing your home for sale...

TheStar.com - Lenders eye off-prime market

2006-03-20T12:17:00.000-06:00

TheStar.com - Lenders eye off-prime market

Canadian Non-Conforming Mortgages

2006-02-21T08:52:00.000-06:00

Years ago you had to go to the bank on the corner to apply for your mortgage. Basically beg the banker for a house. If you didn't fit the bank's criteria you didn't get approved. Sorry about your luck. NO! And there really wasn't anywhere else to go. Until now...
These days there are more lenders, more banks and more mortgage options.
One product we specialize in is the Non-Conforming Mortgage Loan. Specifically those mortgages for clients that have past credit issues (including bankruptcy) or are buying a unique property that doesn't fit into portfolio of the major banks or CMHC.

Our Non Conforming Mortgage Loan program helps people who...
Need a sub prime mortgage
Have less than perfect or bad credit
Have no established credit
Have tarnished credit
Have a previous bankruptcy
Are in consumer proposal
Are in credit counselling
Are recent landed or non-landed immigrants to Canada
Are recently self employed and can't verify their income
Are foreigners investing in Canadian real estate
Need an alternative mortgage lender

For these clients we have 2 options available (or more) and we can be very creative:
1 - First Mortgage
85-95% first mortgage with a mortgage bank or finance company
These programs are for clients that can verify consistent employment and income as well some slow but not really bad credit.
2 - First and Second Mortgage
65-75% first mortgage with a bank or trust company
10-25% second mortgage with a finance company or private investor

This program is for exceptionally tarnished credit, previous bankruptcies, unverifiable income, self employed for less than 3 years, recent immigrants to Canada and that sort of thing. In most cases mortgage financing up to 85% of the home's value can be arranged if the house is in a populated area of 25,000 or more. 80% in most other areas.
For your options fill out our quick online form or call 1-877-590-1961.
Apply for your mortgage online now or download the application and fax it to 1-888-332-9329.

Non-Conforming Mortgages are qualified based on the following:
Minimum Down Payment/Equity Needed
In a tough credit situation, the down payment is everything. If the mortgage loan goes in to collection, the down payment/equity provides a cushion for the lenders while they go through the legal proceeding to gain the right to reposes the home. Therefore, the lenders will look for a minimum of 15% of the value of the home in down payment/equity. (e.g. $200,000 X 15% = $ 30,000). Occasionally, exceptions are made whereby 10% down payment will be sufficient. That will depend on how the other aspects of the applicant's qualifications stack up such as income and the extent of the damage to the credit.

Income Requirements
The income requirements must be reasonable to service the loan. Reasonable in that the applicant must be working or self-employed and have income coming in. The income requirements tend to be flexible as the down payment/equity increases. The income requirements do not have to fit into the typical GDS/TDS ratio calculations. Self - employed clients quite often have to acquire their financing under this program as many do not show enough taxable income to qualify under mainstream guidelines. Obviously the longer a client can prove consistent income the better.

Property Requirements
The property is the most important component of a tough credit mortgage loan. In essence, the lenders are lending on the value of the home and as such will be insistent that the property is a good and marketable piece of real estate. This is their security that their investment is protected in case of default. The lender must be extremely comfortable that they can recoup their investment. Their comfort comes from evaluating an appraisal of the property that must be done by an accredited appraiser. If the property does not meet with their approval, a loan will not be offered. A property in a major urban center is easier to finance versus a farm in rural Canada. There simply are more buyers for urban properties and the chance of liquidating a reposed home is invariably easier. Properties on municipal water and sewer are easier to approve than those on well and septic.

Credit Requirements
The minimum requirement is that you have a credit rating. Different lenders have different lending thresholds. Some will insist that any outstanding bad debts be paid off before they will lend the money. Others will not care as long as the down payment/equity is increased to 20% instead of the usual 15%. Most lenders look at an absolute minimum beacon or credit score of around 480 to 500. More information on credit is available here.

Previously Bankrupt
If you have declared bankruptcy, you may still qualify for mortgaging. Your available down payment determines what and how much you will be approved for. CMHC requires that a previously bankrupt client be discharged a minimum of two years before an insured mortgage is offered with 5 or 10% down payment. Additionally, CMHC requires that you have re-established credit after the bankruptcy. This is not as difficult a process as it may seem. There are several lenders who will offer a secured credit card to previously bankrupt clients. Information on a secured credit card and application can be found here.

If your two year, post-bankruptcy waiting period is not yet past, you will be required to have a minimum of 15% of the purchase price, or you will be unable to get mortgage financing. The structure of the financing will be in the form of a first and second mortgage to 85% of the value of the home.

Lender/Broker Fees
Most times, for good credit clients, the bank pays a small commission to the mortgage broker. However, in bad credit situations, the compensation for the broker for the work done in securing financing, must be paid by the client. This fee is typically paid on closing and is a percentage of the financing arranged.
Almost always, there will be fees charged by a second mortgage lender. The fee amounts are determined by the lender based on their risk evaluation. A lender may consider reducing their fee if you agree to take a higher rate, in effect, amortizing the fee over the life of the mortgage term.
Our typical brokerage fee is 1-3% of the total financing amount.

Types of Mortgage Loans, which one is best for you

2006-02-05T14:31:00.000-06:00

The following describes mortgage options that may be available to you, individually or in combination.

Low Interest Rate Mortgage

Generally the best way to find the lowest rate is to shop around. But every time you go to a bank they pull your credit bureau and applying too many times can lower your beacon score. Going to a mortgage broker is the best way to find your best rate and terms. They pull your credit bureau once and will shop a wide variety of banks for you, determining the best rate and terms. A broker may also know of smaller lending institutions which offer much more competitive rates than a large bank or finance company.

Adjustable Rate Mortgage

With an adjustable rate mortgage (sometimes called ARM) your payments will change over time to reflect any current interest rate fluctuations. The interest’s rates are adjusted semi-annually or on an annual basis. If the rate goes down your mortgage payments will go down and if the rate goes up so do your payments. The initial adjustable rate is usually low as an incentive, but you take the risk of having the rate go up or down depending on the current rates at the time of adjustment. An adjustable rate mortgage can look fairly attractive with low rates in the beginning but can cost you more in the long run so consider it carefully.

An adjustable rate mortgage are generally suited for people with a little more risk tolerance who would be able to make a higher payment amount if the interest rate went up. Some Adjustable rate mortgages include the option to lock in the rate if the rates go up, be sure to ask.

Fixed Rate Mortgages

With a fixed rate mortgage your monthly payments will be the same over the term of the mortgage. Your payment amount will not change. Generally the interest rate is a little higher for fixed rate. Fixed rates work best when interest rates are staying fairly stable. If the interest rates drop you can not take advantage of the benefits as you can with the adjustable rate.

Fixed rate mortgages are generally suitable for people with less risk tolerance that have a set income and don’t expect it to change over time.

Interest Only Mortgage

An interest only mortgage is like a line of credit. You only pay the interest on the mortgage. You have more flexibility in the payment amount, but the debt will never be paid off. You can structure this so you only pay the interest in the first 5, 10 or 15 years, this will reduce your mortgage payment amount significantly. At the end of the term you you have the option to pay interest and principal at an accelerated rate or you can choose a Balloon Mortgage (Mortgage loan principal becomes due at the end of your term).

Interest only loans come with many different options such as a fixed interest rate for the entire term or and adjustable rate which carry a fixed rate for a certain number of years and then adjust every 6 months to a year.

Interest only mortgage loans are generally ideal for people whose income is sporadic, either because they are on commission or they are seasonal or self - employed. In some cases they have the option to make payments 6 months only out of the year at a higher re payment on the principal amount.

Balloon Mortgage

With a Balloon Mortgage you will pay regular payments until the end of the term and at that time the full amount becomes due (called the Balloon payment), you are likely looking at a term of 3 or 5 years. A balloon mortgage will only be subject to interest rate adjustment once after the initial rate is set. The initial interest rates are lower.

Typically Balloon Mortgages are ideal for people who want to take advantage of lower interest rates and that are going to be in their home for a defined period of time. However there are disadvantages. If the interest rates go up refinancing may become more difficult and costly at the end of the term and you may have to re-qualify and have the home appraised again. It may end up that the appraised value is less than expected. So find out what your refinance options are.

Assumable Mortgage

An assumable mortgage is one that can be passed on from one owner to another. This can be an advantage if the current mortgage has a good rate compared to getting a brand new mortgage. You can only assume a mortgage if you have a down payment large enough to cover the difference between the value of the house and the amount of the mortgage.
If you don’t then you may have to look into a 2nd mortgage to cover the difference. Generally 2nd mortgages are at a higher interest rate.

Generally this mortgage type is a little riskier because you are assuming “as is”. You may not have all the options you would have with a brand new mortgage such as, prepayment privileges and payment frequency options.

If you are thinking of or already have claimed Bankruptcy these are the things you need to know...

2006-01-29T11:13:00.000-06:00

The Bankruptcy Nightmare and How to Re-establish your Credit

The Bankruptcy Nightmare
Maybe you lost your job due to downsizing, or a maybe you’ve gone through a recent divorce or split that made it impossible to pay back the debt you owe? Someone in your family might have got ill and you didn’t have insurance to cover the lost income. Even if you have lost a loved one and didn’t adequately plan for it, what ever your circumstance may be this can be the beginning of a long tiresome journey and will require some hard work to recover on your part.

Creditors on Your Back
There are many situations in which we find ourselves falling behind on our payments, not being able to even pay the minimum payment amount each month. We get so far behind that there is no way to catch up. It’s not a good feeling. Then the creditors start calling demanding their money when you just don’t have it, especially when they don’t seem to care or don’t even try to understand your situation, they just want their money and will use all kinds of scare tactics to get it back regardless of what your going through. Dont worry your not alone. There are many good people just like you that find themselves in these situations where there is just no other alternative but to claim bankruptcy.

Bankruptcy is not fun and it will affect all aspects of your life. Some people find themselves in the most difficult financial situations and have taken every course of action available to avoid bankruptcy, but end up having to. Others have the most minute problems and claim bankruptcy to solve their financial problems short term. Claiming bankruptcy is not a long term solution, it is a last resort or alternative if you have exhausted all other options.

Remember bankruptcy should be the last resort only when you have exhausted all other options! Not just for a small amount such as $10,000
There are consumer proposal programs available for small amounts.

However since life is not a bowl of cheerios many people find themselves in situations where there is just no other choice but to claim bankruptcy.

What to expect when Claiming Bankruptcy
Going through bankruptcy is tough, first you seek out a bankruptcy trustee, and then he gathers your information. He calls your creditors and lets them know you are claiming bankruptcy. Most times this doesn’t stop the creditors from calling they still want their money. Then depending on your trustee you will have to go to counseling meetings, these will be about how to manage your money and follow a budget so this won’t happen again. You are obligated to do attend these meetings and it is a requirement before you are discharged. The bankruptcy trustee will take your income tax return as part of payment. So you will get $0 of it. A discharge will be granted after the 9 months and the easiest part is over. Some creditors don’t stop calling you even if you have claimed bankruptcy. Even after you have been discharged some creditors still try to recover their money and may send it to a third party for collections. So there are a lot of problems associated with claiming bankruptcy. Most times you can’t keep your leased car through a bankruptcy even if you show the ability to keep up the payments, the car dealership will demand the car be brought back and yes they could even repossess it. So bankruptcy is not just your average nightmare and not easy to go through, so think about bankruptcy as your absolute last resort.

So it happened, how do fix it and make sure it doesn’t happen again?
Re-establishing credit after is a little trickier. It’s also embarrassing. Whenever you go to apply for any kind of credit or even to apply for a rental apartment they will see that you have claimed bankruptcy. So expect to be turned down wherever you go.

Steps Required in Re-establishing Credit

Apply for a secured visa, the day of your discharge!

You can apply for a Home Trust Secured Visa ($2000 minimum) online or you can fax the application. If both you and your spouse have claimed bankruptcy you both need to re establish credit. (Remember this is a stepping stone to help you re-establish your credit)

Keep all credit in good standing

Remember any bad credit, collections or judgments after bankruptcy will reflect extremely poorly on your credit rating and you will find yourself in a worse predicament than before because every creditor will be hesitant to extend you credit ever again. That means no missed payments, no slow payments and no going over your credit limit!!! *Very important to keep in mind.

Dont go applying everywhere for credit

All lenders can see where and how many places you have applied for credit from your credit bureau and decline you based on just that. Applying for credit too many times also brings your credit rating down. This means you have less of a chance getting approved and you will pay higher interest rates. So do some research first and see what each particular lender bases their lending criteria on and make sure it matches your situation.

Dont over extend yourself

Know your financial limitations and stick to a budget. Most financial lending institutions are happy to extend you credit regardless of what your circumstances may be in the future or if it would suit your long term objectives.

So be aware of what you are getting yourself into.
Ask yourself these questions:

Will I be able to afford this if…

There was a lost income in the household

Someone becomes ill and cannot work

The rent, hydro, gas prices go up

Unexpected household repairs or the appliances need replacing

Unexpected car repair expense

There are many more questions that will be unique to your specific situation. You should make a list and see if you can answer the questions truthfully. If you can’t then you should think about a lower loan amount to make sure you can afford it.

Talk to a credit counselor. If you are not sure of something speak with your local credit counselor, most of them will give free advice, most of them are non-profit organizations.
Plan; make a budget to make sure it doesn’t happen again. Maybe that means taking out some illness or disability insurance, but its well worth it in the end. Planning ahead makes things a lot easier and you have more control over your finances when you put a budget in place. Adequate planning may prevent a bad situation from turning even worse...
Keeping your credit in good standing for at least 6 -12 months after discharge will show that you are doing everything to ensure that it doesn’t happen again. The lenders may still charge you more in interest fees but this is your best chance of starting over.

Qualifying for a Mortgage after Bankruptcy

If you plan to apply for a mortgage 6-12 months after your discharge you must have 25% down and some reestablished credit.
To qualify for a CMHC insured mortgage without as much as 25% down you have to wait 2 years after discharge and you must have reestablished credit with no bad credit after discharge. If you and your spouse have claimed bankruptcy together both of you will need to have re established credit.

Some quick tips and advice:
Keep your credit cards under 75% of the limit. Keep a balance of at least 25% at all times. Make your regular minimum monthly payments + some on time, every time. There are not excuses for being late anymore. Sign up for online access through your bank and add the lenders to your payees list. Payment can be made with just a click. You can always get direct withdrawal to make things even easier, but make sure you write down on your calendar the date the payment will come out and make sure the funds are there. If you have insufficient funds you will get a bank charge form $35 to $50 depending on the branch and this will count as a late payment.

Good Luck and remember it takes a little work to recover after a bankruptcy so don’t expect it to be easy but if you follow the plan you can again be a respected by the lenders.

Author:
Rachelle Czartorynskyj Mortgage Professional

Mortgage Source Canada - Canada's online leading mortgage source for excellent rates and a wide variety of mortgage products. We specialize in home mortgages, refinances, debt consolidation and bad credit mortgages.

Mortgage Pre Approval Questionnaire

2006-01-23T08:13:00.000-06:00

We will help you

Consolidate debts & lower your payments
Buy a new home, a second home or a vacation home
Achieve your financial goals so you can retire early
Take control of your largest asset. Your home!

We have a wide variety of mortgages from over 50 of Canada’s top lenders.
Banks, trust companies, private lenders and more.

Your mortgage approval is just a phone call away! 1-877-590-1961

Even if you have been turned down by the bank before do not hesitate to call. We are experts at creative finance!

Our non-conforming mortgage program can help if you have bad credit, a prior bankruptcy or other difficult situation.

Fill out our short questionnaire to see if you qualify for a mortgage today.

Refinancing your mortgage

2006-01-22T09:14:00.000-06:00

Refinancing your mortgage

Dispelling the top 7 mortgage myths

2006-01-22T09:12:00.000-06:00

Dispelling the top 7 mortgage myths

The top 9 questions to ask when applying for a mortgage

2006-01-22T09:11:00.001-06:00

The top 9 questions to ask when applying for a mortgage

Should you use a mortgage broker?

2006-01-22T09:11:00.000-06:00

Should you use a mortgage broker?

Today's News from MSNBC - MSNBC.com

2006-01-22T09:07:00.000-06:00

Today's News from MSNBC - MSNBC.com: " Video: They're watching while you Google"

Mortgage for Self-Employed, Business for Self or Commissioned?

2005-12-29T09:57:00.000-06:00

Mortgages are tough to qualify for when you are self-employed or commissioned. Even with a good credit history, getting a mortgage from a major bank is sometimes frustrating.
Over 20% of Canadian income earners are self employed, business for self or are 100% commissioned. With this large of a segment of the population working for themselves you would think the mortgage banks in Canada would be a little more accommodating.

Well they have! Finally.

Most people in business write off expenses before declaring their income. That's the advantage of being in business for yourself. You pay income tax on a lesser amount but when you need to prove income for a mortgage approval, your tax returns make it look like your income is low and you can't afford the mortgage you deserve.
Qualifying for a Low Documentation Mortgage is easier than you think. You can purchase a new property or re-finance your existing home up to 90% of its appraised value. The lender bases their mortgage approval on your good credit history instead of your net income.
Requirements for a low document mortgage:
A clean credit history with no slow payments, collections, judgments or bankruptcies
Proof of self employed status for the last 2 to 3 years through Incorporation papers, GST returns or business registration papers
Property must be located near a major urban centre
The last 3 years Notice of Assessment (NOA) from Canada Revenue Agency to prove no tax owing
If your credit score is low you may be required to provide the last 12 months of bank statements to show regular deposits to prove your 'stated income'
We regularly deal with equity mortgage lenders and sub-prime mortgage lenders. We work with unique situations everyday, give us a call first!

Contact us today about a Low Doc or No Income Mortgage!

Advantages of dealing with a Mortgage Broker

2005-12-29T09:37:00.000-06:00

What is a Mortgage Broker?
A mortgage broker is an independent professional who works as the liaison between the borrower and the lender to negotiate mortgage loans. We are mortgage loan specialists. Whether you are purchasing a new home, switching your mortgage, or refinancing you existing mortgage, many factors must be considered. Its our job to analyze specific needs and find the best mortgage product that satisfies your budget and goals.

Why use a Mortgage Broker?
We have access to numerous lending institutions and investors. We will make sure to get the best loan possible: the best interest rate, conditions, and prepayment privileges. You won't have to deal with any financial institution yourself. We deal with the same lenders you're used to dealing with. Including the 'Big Banks' and Trust Companies. We deal in great volume of mortgages and pass on the savings to you. We also deal with some innovative broker-only lenders who can offer even more attractive rates and features.

I've Been Turned Down by the Bank. Can You Help?
Maybe. Don't get discouraged if you are turned away by a bank - you might still be able to obtain a mortgage. Your bank has a certain set of criteria that you don't meet but other lenders, including some large institutions, may still take you as a client. We can advise you on how to fix your current situation so that you may qualify for a mortgage in the near future. We also have access to private lenders ranging from individual investors to mortgage investment corporations that use a different set of criteria to make mortgage decisions.

How Fast Can a Mortgage Broker Work?
We strive to provide you the fastest and most reliable service possible. Operating with the up to date software and technology, we can offer a quick turn around time on applications. We will explain your terms and conditions including the interest rate, prepayment privileges and clarify all of your questions. We build our reputation on timely service, reliability, creative thinking and a conscientious attitude towards your needs. At the very least we'll treat you like a human being, and not a number!

How to Build or re-build your Credit...

2005-12-18T10:20:00.000-06:00

Build or re-build your credit in Canada, even if you've had credit difficulties in the past, or have never had a credit card before! An excellent opportunity to establish your credit rating.

Virtually all Canadians are approved. Find out more here...

What can you expect to pay for your Mortgage?

2005-12-18T09:52:00.000-06:00

Our Mortgage Payment Calculator will show you how different rates and payment frequencies can affect your mortgage.

How much can you afford? What payments can you expect to be making on your mortgage? Simply fill in the form and click the "Compute Payment & Balance Summary" Button.

Horoscope - MSNBC.com

2005-11-19T17:18:00.000-06:00

Horoscope - MSNBC.com

MSNBC - Harry Potter

2005-11-19T17:08:00.000-06:00

For the Harry Potter Fans MSNBC - Harry Potter

Adjustable Rate vs. Variable Rate Mortgage - What is best for you?

2005-11-17T21:52:00.000-06:00

The Adjustable Rate Mortgage is quickly becoming one of the most popular options for consumers. There is a tremendous spread between the prime interest rate and a fixed long term mortgage. This spread can be as much as 3% and with the average mortgage in Canada approaching $130,000, this difference in interest rates can be tremendous.

How does an adjustable rate mortgage work? The adjustable rate mortgage is quite different than traditional mortgages in that long-term mortgages are priced according to Bond market, while the adjustable rate mortgage is priced in accordance with the prime interest rate.
The longer the term, the higher the interest rate. This is not always true but generally speaking it does hold true. By selecting a longer term mortgage you are agreeing to pay a higher interest rate for the term. It is similar to paying an insurance premium to guarantee the interest rate but the insurance premium is the higher rate.
An adjustable rate mortgage gives you total control. Your mortgage would renew every 3 months at a fixed interest rate. If you change your mind and decide to convert to a longer term, you would be guaranteed a minimum discount off the banks posted rates.
The variable rate mortgage allows you to have the best of both worlds. Short term pricing with the ability to lock in your rates at any time.
There are over 70 variable rate or adjustable rate mortgage products in the Canadian market right now. Let us explain your best mortgage options.

Below is just one of the options available:
Prime less .80% for the mortgage term
Maximum 95% Loan To Value
Semi-annual compounding
Five year term delivered in automatically renewed three months fixed rates periods
Prior to conversion open for repayment on payment of three months interest.
Monthly, weekly, or bi-weekly payments available
15% and 15% prepayment/payment increase
Ability to convert to a 3, 4, or 5 year term at any time at a guaranteed discount
The discount off Royal Bank Prime is guaranteed for the renewal periods
Guaranteed 1% discount off banks posted 3, 4, or 5 year rate a time of lock in

Rachelle Czartorynskyj www.mortgagesourcecanada.com

Your Credit Score - What you should know

2005-11-16T09:14:00.000-06:00

Your credit score is an important indicator of your creditworthiness.
The higher your score the better chance you have at getting credit extended you. While many lenders use bureau scores to help them make lending decisions, they also take other aspects into consideration.

Lenders will use your credit score to determine if you are likely to pay your bills and also help them place you with the appropriate repayment plan. For example if you have claimed bankruptcy in the past they might place you at a significantly higher interest rate.

The following is used to calculate your beacon score:

Payment history- This indicates if you have made your payments on time
Amount owed - Comparison of what you owe to your credit limits with various lenders
Length of time - This indicates how long you have had credit accounts
New Credit - Shows how often you are looking for new credit
Type of credit - Considers the type of loans you have - car loans, lines of credit, credit card balances
I can't stress the importance of keeping your credit clean and checking your report periodically. This could mean the difference of thousands of dollars when you apply for any kind of credit including a mortgage.

Common mistakes that are made:
From my experience I have seen time and time again, where a client has applied for credit through more than a few lending institutions because they keep getting turned down. This is a common mistake, what they don’t know is that this significantly impacts their credit score negatively. When you have too many inquiries you are basically shooting yourself in the foot. You are guaranteeing yourself a higher interest rate and increased cost for lending. The next lender can see that you applied at "so and so's" and they turned you down. The best way to approach this situation is to find out why you where turned down the first time. Finding out can be a little difficult if you don’t know how to go about it. Most of the institutional lenders will be very vague in explaining why you where turned down, they have policies in place to limit the information they can give out to their clients. There is a way around this, check your own credit score through Equifax periodically to make sure everything is up to date and correct.

You can get your credit report from one of the two credit Bureaus in Canada
Equifax
TransUnion

They charge a small fee of $14.50 CDN but well worth it to save you frustration down the road. Make sure that your credit report shows what accounts have been closed, what has been paid out and your report is current. After all these things are taken into consideration when you are applying for credit. If you need help understanding your credit report, believe me it is confusing to most at first, contact your local credit counselor and I am sure they would be happy to walk you through it.

This link might be helpful, it is a non- profit credit counseling service

What can I do to improve my credit score?
Pay all your bills on time. Paying late, or having your account sent to a collection agency has a negative impact on your credit score.
Try to keep your balances under your credit limit. Keeping your account balances below 75% of your available credit may also help your score.
Avoid applying for credit unless you have a genuine need for a new account. Too many inquiries in a short period of time can sometimes be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties, or overextending yourself by taking on more debt than you can actually repay. A flurry of inquiries will prompt most lenders to ask you why. However, most scoring formulas will not penalize you if, for example, you are shopping for the best mortgage rate or the best car loan.
The long and short of it is that if you keep your payments up to date for 6 months - 1 year you have a better chance for getting approved for credit, lower interest rates and all around better deal.

Bankruptcy, collections = bad credit
Having bad credit is not the end of the world
If you happen to have any previous collections or even a past bankruptcy the best way to get back up is to re-establish your credit.

There are a couple of options here Home Trust

Good luck and have a great day,

Rachelle Czartorysnkyj Your Mortgage and Finance Specialist www.MortgageSourceCanada.Com

Renting VS Owning - EXPLORE YOUR OPTIONS

2005-11-15T07:45:00.000-06:00

Many people dont even consider buying a home because they believe they cant afford it. In fact most people continue to rent and pay for someone elses mortgage. Homeownership is more affordable than people think in fact in most situations it is more affordable. Some factors to consider would be that rent increases over time but a fixed term mortgage does not, mortgage payments remain more stable over time.

So lets think about it, by owning instead of renting your wealth will increase as you gain more home equity. It makes more sense to stop renting and start buying. Now dont get me wrong, buying a house is a big committment. The house must be kept in good condition, renovations, repairs and insurance expenses all add up. But if we think of it as an investment into increasing our net worth we see the value of owning over renting. Another reason people are stuck renting is that the banks have turned them down.

How can I qualify for a mortgage when my bank has turned me down?
The answer is very simple, banks are very strict in their underwriting and require you to have A credit in order to qualify for a mortgage. Which means that you have credit that is perfect with no room for mistakes. Is that realistic? So most of the time if your credit is even a little less than perfect you will hear that you cant qualify for a mortgage.

Lets take a look at some alternative options to getting a mortgage...
Mortgage Brokers have the ability to shop the market for you, they submit your application to various institutions instead of just one. This makes the qualifying process faster, easier and you get a better rate. A mortgage professional will look at your application and decide where you would fit best, keeping the rate low while meeting your objectives. Unlike banks your applications dont get turned down automatically because you have had a few late payments. A Broker manually considers your application and places it accordingly. But it doesn't stop there... a broker will always present you with your options and they can go back and try with another lending institution if your application doesn't fit their criteria. There are so many more options when you explore this avenue, most brokers have access to private lenders which makes your options even more diverse.

What about fees? Mortgage Brokers generally dont charge any upfront fees unless your specific situation requires a committment fee.

Why do most people go to there own bank?
Because most people are not aware that there are other options available to them. Getting turned down by a bank is frustrating and time consuming, you would wonder why they didn't go to a Mortgage Broker in the first place. I will let you decide, do the research and make sure you feel confortable with your Mortgage agent after all an agent only gets paid when they have closed the deal for you. The BANK pays them. A bank lender is paid on salary or hourly so you can see how there would be little incentive to go above and beyond if your situation does not qualify for a conventional mortgage.

My recommendation would be to explore your options and do a little research, you will be glad you did. A difference in rate could mean a savings of $5000/year or more. That could mean extra money for redecorating or a even a long deserved vacation...

Rachelle Czartorynskyj www.mortgagesourcecanada.com

Quote of the day!

2005-11-15T07:35:00.000-06:00

"The only person who succeeds is the person who is progressively realizing a worthy ideal. That's the person who says, 'I'm going to become this' - and then begins to work toward that goal."

Home Equity Loan or Home Equity Line of Credit?

2005-11-01T08:24:00.000-06:00

Home equity loans and home equity lines of credit continue to grow in popularity. According to the Consumer Bankers Association, during 2003 combined home equity line and loan portfolios grew 29%, following a torrid 31% growth rate in 2002. With so many people deciding to cash in on their home's equity value, it seems sensible to review the factors that should be weighed in choosing between out a home equity loan (HEL) or a home equity line of credit (HELOC). In this article we outline three principal factors to weigh to make the decision as objective and rational as possible. But first, definitions:

A home equity loan (HEL) is very similar to a regular residential mortgage except that it typically has a shorter term and is in a second (or junior) position behind the first mortgage on the property - if there is a first mortgage. With a HEL, you receive a lump sum of money at closing and agree to repay it according to a fixed amortization schedule (usually 5, 10 or 15 years). Much like a regular mortgage, the typical HEL has a fixed interest rate that is set at closing for the life of the loan.

In contrast, a home equity line of credit (HELOC) in many ways is similar to a credit card. At closing you are assigned a specified credit limit that you can borrow up to - not a check. HELOC funds are borrowed "on demand" and you pay back only what you use plus interest. Depending on how much you use the HELOC, you will have a minimum monthly payment requirement (often "interest only"); beyond the minimum, it is up to you how much to pay and when to pay. One more important difference: the interest rate on a HELOC is adjustable meaning that it can - and almost certainly will - change over time.

So, once you've decided that tapping your home's equity is a smart move, how do you decide which route to go? If you take time to honestly assess your situation using the following three criteria, you will be able to make a sound and reasoned decision.

1. Certainty or Flexibility: Which do you value the most?! For many borrowers, this is the most important factor to consider. Your home is collateral for either type of home equity borrowing and, in a worst case scenario, it could be seized and sold to satisfy an outstanding unpaid loan balance. People do remember the double-digit interest rates of the early 1980's and, for many, the mere prospect of interest costs on a variable-rate home equity line of credit rising rapidly beyond their means is reason enough for them to opt for the certainty of a fixed rate HEL.

>From the borrower's perspective, "certainty" is the main virtue of a fixed-rate home equity loan. You borrow a specific amount of money for a specific period of time at a specific rate of interest. You repay the loan in precise monthly installments for a precise number of months. For many, knowing exactly what their future obligations will be is the only way they can borrow against the equity in their home and still sleep at night.

A home equity line of credit, in contrast, is short on certainty but long on the virtue of flexibility. With a HELOC you borrow funds on an irregular schedule that meets your needs at adjustable interest rates that can change quickly. Loan repayment is also flexible: you typically are required to make only relatively small "interest-only" monthly payments on a HELOC. However, you have flexibility to make any size payment above the interest-only minimum or payoff the loan at your will.

2. Do you need money for a one-time, lump-sum payment or will your cash needs be intermittent over several months or years? Home equity loans are best suited for one-time payment needs (a good example is consolidating debt by paying off several high-rate credit cards at one time). This is because at the time you close on a HEL, you will be provided with a lump-sum check in the amount you've borrowed (less closing costs). While it may be empowering to have that much money handed over to you, be humbled by the fact that you will immediately begin incurring interest costs on the entire balance.

When you close on a HELOC, on the other hand, you will be given a checkbook (or debit card) that you use only as needed. So, for instance, if you're embarking on a multiyear home improvement project for which you'll be writing checks at varying times, a HELOC might be best. Similarly, a credit line is probably best for paying sporadic college expenses. Interest on a HELOC is only charged from the time that your HELOC checks clear the bank and only on amounts actually disbursed…not the value of the entire credit line.

3. Do you possess sufficient financial self-discipline for a HELOC? Financially-disciplined borrowers can have the best of both worlds…almost. By taking out a HELOC but paying it back according to a self-imposed fixed amortization schedule they can enjoy both the flexibility of borrowing cash only as needed and the certainty of a fixed repayment schedule. HELOCs are typically more efficient in terms of lower closing costs and a lower initial interest rate. Also, a HELOC may be somewhat easier for borrowers to qualify for since the low, flexible monthly payments mean debt to income ratios that loan officers look at are more favorable for the borrower.

The one big factor not within the HELOC borrower's control is the interest rate (see #1 above). Interest rates will almost certainly change over the life of a HELOC. This means that a self-imposed "fixed" amortization schedule may need to be periodically refigured. Numerous internet sites provide free, powerful mortgage calculators that can assist you in preparing updated amortization schedules whenever needed. Some lenders are also meeting borrowers' demand for greater certainty by providing HELOC products that can be converted (for a fee) into a fixed rate loan when the borrower elects.

As mentioned earlier, HELOCs are much like credit cards and the similarity extends to spending temptation. If you are a person who has trouble keeping credit card debt under control and you haven't taken steps to change habits, then a HELOC probably isn't a smart choice.

You might be wondering which home equity product most people actually choose. According to the Consumer Bankers Association 2002 Home Equity Study, home equity lines of credit account for 28% of consumer credit accounts followed by personal loans (23%) and regular home equity loans (16%). In terms of dollar value, home equity credit accounts (HELs and HELOCs together) represent a full 75% of consumer credit portfolios with HELOCs having a 45% share of the market and HELs a 30% share. Of course, the popularity of HELOCs may subside if interest rates continue to rise.

Whichever home equity product you decide on be certain to shop for the best deal possible. The market is extremely competitive and there are many non-traditional options, including on-line lenders and credit unions, which should be considered in addition to your local bank.

By Tim Paul

How to Save Money on Your Mortgage

2005-10-31T21:21:00.000-06:00

Obtaining a home loan is arguably the most expensive transaction you’ll experience in your lifetime. Therefore, getting the best home at the greatest value is an endeavor worth pursuing. Whether you’re trying to squeeze in to a higher priced home or just trying to shave a couple bucks off of the closing costs, this article will help you explore your options.
Here’s a list of our top 7 things you can do to cut corners and save money on your mortgage
Shop Rate!
Shop Fees!
ARMs
Balloons
Interest Only
Incentives
PMI
1. Shop Rate!
Sometimes the obvious just needs to be stated out loud: Lenders do not charge the same rate. Some charge more, and some charge less.
Obtain several loan offers for consideration, and compare the rate.
If a lender offers you an unusually low rate, check for fees, points, and additional charges or changes in terms.
Don’t fall into the trap of just going with the largest bank on the block. Do your homework and check your lender’s background and reputation, but open your doors to all the choices that are available to you.
Obtain 3 or 4 loan offers, and check to see how the rates being offered compare to the current interest rates. Our website offers a directory of resources and a ratewatch, and there are many other websites available to you through your favorite search engine that offers similar, free information.
2. Shop Fees!
Lenders charge different types of fees in varying amounts. You may see them stated as “points”, “origination fees” or “costs”. Whatever name is used, they represent the lenders’ profit. Some lenders are willing to earn less, and some lenders’ charge more in fees.
Obtain 3 or 4 loan offers and compare the quoted closing costs.
If you see unusually low interest rates, check to see if there may be unusually high origination fees or points being charged.
If you don’t see any fees or points being charged, then check the rate and terms of the loan to see that it meets with your satisfaction.
Always compare fees and rates in conjunction with one another, and never settle for just one loan quote when shopping for a mortgage. Your home loan is just too important not to do your own homework.
3. ARMS:
An adjustable Rate Mortgage, in the right economical climate, can be an excellent way to lower payments.
With an ARM, the lender agrees to charge you a lower interest rate. This can save you hundreds of dollars off your monthly payment.
Often times an ARM carries a fixed period where the rate cannot change, such as one year for example.
If interest rates stay low, then an ARM can offer you an attractive way to obtain affordable real-estate and save money.
A word of caution: There are many variables to consider with an ARM, and it is important that you understand them before signing on the dotted line. Our website has an excellent article available to you; entitled “Is an ARM Right For you?” should you wish to explore this option in further detail.
4. Balloons:
Another way to lower your monthly house payment is by structuring your loan using a Balloon, or by “floating a balloon”.
The loan is amortized over a given period, say 30 years, but there is a final lump sum due at the end of a fixed period, and this is called the “balloon payment”.
This fixed period is typically between 5 to 10 years.
This type of loan lowers your monthly payment, but be prepared to make new decisions when the fixed period is up, because your loan ends at that point.
Consider floating a balloon with caution, of course. Use this to compare against ARM loan products, to determine which one may be right for you.
5. Interest Only:
With an Interest Only Mortgage, you are only obligated to pay interest.
This first phase of the loan, interest only obligations, is typically 5 to 10 years.
After that, the loan is fully amortized for principal and interest.
So, for a 30 year fixed, that would mean that interest only payments are available the first 10 years, and then principle plus interest payments must be paid for the remaining 20 years.
Typically, this type of loan is very attractive for folks in commission-based employment, or where revenue is cyclical. In other words, you can up your payment to pay off principal, when it’s most convenient for you.
Once again, this is an excellent loan product to lower monthly payments, and it can be compared to ARMS and floating Balloons.
6. Incentives:
Are you in the market for a brand new home? If so, check to see whether or not your builder offers incentives, such as the following.
The builder may pay additional points to help you lower your rate.
The builder may offer cash-back credits.
The builder may offer savings if you go through their own or recommended lender.
Builders are motivated to get their homes sold, so of course they can go build more. This allows you an opportunity to save money either in the purchasing of the home, or the back-end closing costs.
7. Closing Costs:
Take a look at all your closings costs, to see if there are additional savings that can be made:
PMI: Property Mortgage Insurance is typically required when you have less then 20% to put down. However, laws change all the time and homes can rise in value quickly. Check to see whether or not you have the right to have the PMI removed now or down the road.
Discuss all the closing costs. Find out whether some of them may be negotiable.
Review the charges for a variety of other significant closing costs, such as Title Fees, Credit Reports, etc., and compare with your other loan offers.
We’ve enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense.

Author- Tom Levine

Saving Big on Your Mortgage

2005-10-31T21:17:00.000-06:00

Did you know that when you take out a fixed-rate mortgage, you're paying a big "safety premium"? That's because banks usually set their fixed rates at considerably higher levels than their variable rates. They do so to ensure that a fixed-rate mortgage will still be profitable for them if interest rates rise.
If you're a potential homeowner, you should ask yourself if that premium is worth paying. It may protect you if interest rates spike up suddenly. But if they don't, you may end up paying thousands of dollars in extra interest. That's an expensive insurance policy.
Historically, variable-rate mortgages have proven to be cheaper than those with fixed rates over the long term. Even if you feel that interest rates will rise in the near future, you should take a long-term perspective. With a variable rate mortgage, you are usually starting out at a lower rate to begin with, and you wi%ll benefit from any decreases in interest rates that occur in the future.

Quote of the day!

2005-10-28T06:35:00.000-06:00

"If football taught me anything about business, it is that you win the game one play at a time."
Fran TarkentonFootball Player, Businessman and Author

Quote of the day!

2005-10-26T06:44:00.000-06:00

"When we can begin to take our failures seriously, it means we are ceasing to be afraid of them. It is of immense importance to learn to laugh at ourselves."
Katherine Mansfield1888-1923, Author

Quote of the day!

2005-10-25T07:14:00.000-06:00

"The last of the human freedoms: to choose one's attitude in any given set of circumstances, to choose one's own way."
Viktor Frankl1905-1997, Neurologist, Psychiatrist and Author