Bank of Canada Announcement

General Trish Pigott 25 Oct

The Bank of Canada (BoC) announced that they have increased the overnight target rate which in turn affects the Prime Rate.  Currently the Prime rate with almost all banks is 3.70% and that will increase to 3.95%.  This affects Variable Rate Mortgage clients and anyone that has loans or lines of credits attached to the Prime rate.

If you would like some advice and direction on whether a variable rate may be good for you or if you want to chat about your current rate, please contact me directly and I will be happy to review your current situation.

Here are a few reminders for Variable Rate Mortgages and today’s announcement:
  • For every $100,000 in mortgage, your payment will increase approximately $13.00 per month with a .25% increase to the rate
  • With certain lenders you can request to have a fixed payment so that when Prime changes, you will not have a payment adjustment
  • If you are concerned about affording the payment after multiple increases, please contact my office so we can discuss options at 604-552-6190
  • If you are considering locking in, you will be locking into today’s rates with your current lender and your payment will be adjusted based on that new rate
  • You can lock in for a term equal to or greater than the amount of time you have left in your mortgage
  • With most lenders, we can review options directly with your lender on your behalf, some lenders require you to go in to a branch, but if we can help you avoid that, we will
  • You can request a lock in agreement if you are considering locking in and usually have 7-10 days to send back the signed agreement once you decide
  • Ask yourself how comfortable you will be with an increase to your payments over the next 12 months
  • Remember to call or email me directly with questions about your own situation
  • Remember the news and the media are always going to be negative sources.  Friends and family often have good intentions but are usually not aware of your personal finances so their advice may not be in your best interest. 

Call me, I am happy to chat anytime about your mortgage or lock in options!!

What to do if you’ve purchased a new house but your current home has not yet sold…

General Trish Pigott 18 Oct

This blog post is coming from a scenario we actually encountered this week.   We had some stressed clients, who purchased a new property and had no doubt that their current home would sell! The current home still has not yet sold but we were extremely happy to reassure them with a number of solutions for this situation.  A couple solutions brought to the clients attention were:

  • Equity take out on the current property, as bridge financing is not an option without a firm sale
  • Short term second mortgage
  • Add a co-signer to afford both properties

Key points for you to consider if you are put in this situation:

  • Do you qualify to carry two properties and two mortgages?
  • Do you have access to other funds for the down payment such as gifted funds from family or saving?
  • If a refinance is needed on current home, the listing will have to be cancelled as banks will not offer traditional lending rates on homes that are currently listed

As a result, to complete on time I was able to secure financing for them with fully discounted rates, use rental income to qualify, put 50% of the mortgage portion on the new property in a line of credit. That way it is fully open, so when their home sells there will be no penalty to pay down the line portion of the new mortgage.

If you happen to find yourself in this position – please do not hesitate to contact us here at the office and we will help you!

Legalization of Cannabis & Mortgage Lending

General Trish Pigott 11 Oct

**How will the Cannabis Act affect mortgage lending??**

The legalization of Cannabis is set to take place on October 17th. We just received confirmation that CMHC will continue to insure mortgage loans for residential properties where cannabis was previously grown and/or will be legally grown. At this time we only have one lender who is willing to loan on such properties and with that loan comes a 1% premium on the interest rate, as well as, the client must pay the CMHC insurance premium no matter the downpayment amount. Regardless if it is a previous grow-op or a legalized grow-op the main reason lenders don’t lend on such properties is due to the high level of humidity required to grow, creating mold issues. We our in process of contacting each of our lenders on this to see if any new policies will be coming down the pipe with the impeding legalization.

This is a confusing topic, so please do not hesitate to contact us with questions!

Fixed vs. Variable… the age old debate!

General Trish Pigott 4 Oct

**Fixed rates have increased**

Variable rates are more attractive than ever as we are seeing a spread of over 1% between current fixed and variable rates.

Banks are more aggressive than ever with the discount clients are receiving off of prime for variable rates. With a few lenders offering Prime minus 1%. This is a great option for home owners and home buyers. Over the past 5 years we have experienced record low fixed rates which has led a lot of people into that territory but with the variable rate being so attractive again, people will pay far less interest in a variable rate mortgage than they will with a fixed in current market conditions.

If you would like some advice and direction on whether a variable rate may be good for you, please contact me directly and I will be happy to review your current situation.

The next Bank of Canada Rate announcement will take place Wednesday, October 24th!  Stay tuned to see what they decide to do.