Will the minimum downpayment be increased from 5% down to 10% down?

General Trish Pigott 27 May

Rumour has it that the minimum downpayment is going to be increased from 5% down to 10% down.
Our (Dominion Lending Centres) Chief Economist, Dr. Sherry Cooper just spoke on this and a variety of other topics around the current Canadian housing and mortgage markets.  I am going to summarize the highlighted points that I think will be of most interest to you.
 
Minimum downpayment from 5%- 10%
Her thoughts on increasing the downpayment from 5% to 10%  is counterproductive.  This would slow housing even more!  Every part of the Government is doing everything it can to stimulate and encourage spending.  She said “this decision would be the wrong one”.   So we can only hope this does not happen.
This has been suggested for the reason being when a person purchases with the minimum 5% down, immediately an insurance premium is added on top of the mortgage, decreasing the equity available and increasing the loan to value.  Now let’s say we see values dip like most are expecting or projecting… by even the smallest amount – this client is in hot water, when time comes to renew or remortgage, they already owe more than this home is worth.
Housing Values
 
So far the price movements we have seen have been small!  It is mostly in the luxury market where we are seeing the biggest decrease.
 
In April we saw a  57% decline in sales, however we also saw a 55% decline in listings!
We are expecting some downward pressure on pricing in the near future but may not see it until the Fall/Winter of 2020/2021.  We MAY see house prices edge downwards by 5-10%, which again really depends where you are in the Country.
We do believe that there is pent up demand and feel strongly that it will be a busy Spring and Summer.
 
Where interest rates are headed?
 
She believes and we also believe that rates will remain very very low.  She said “I do not see the Bank of Canada raising rates this year or next”.
 
 
Dr. Sherry Cooper is forecasting a U shaped recovery, she is expecting  the 2nd quarter to be slow and it will be 2022 before the economy is back to where we were in 2019/2020.  What do you think?
What do we think?  We think that we have already seen the market take a turn for the best and the busiest over the past 2 weeks!  We are hoping for more of a V shaped recovery where it just shoots back up.

Stressed from debt?

General Trish Pigott 22 May

Are you stressed out from debt?  See below how we saved some clients $1,156.00 a month by refinancing and consolidating their debt

 

Mortgage:                    $425,000.00

Monthly payment:     $1,785.00

New Mortgage Balance:           $500,000.00
Credit Card Debt:       $16,000.00

Monthly payment:     $480.00

New Monthly payment:            $1,959.00
Car Loan:                      $18,000.00

Monthly payment:     $370.00

SAVINGS per month:                  $1,156.00
Line of Credit:             $24,000.00

Monthly payment:     $480.00

This would give you a cushion leaving some cash left over in these unprecedented times
Total Debt:                  $483,000.00
Total Monthly Payments:      $3,115.00 NEW MONTHLY PAYMENT:      $1,959.00
 

Current mortgage terms estimated at 2.99+% with 30 year amortization and minimum monthly credit and loan payments made

 

Current mortgage terms estimated at 2.45% with 30 year amortization OAC

Down-payment Sliding Scale…

General Trish Pigott 14 May

Did you know that most lenders have a “sliding scale” for purchases that are over 1.25 million dollars??

Most of our buyers believe that if you are purchasing over 1 million dollars you need 20% down… Which is true, until you hit the 1.25 million dollar mark.  At that point you will have to put more than 20% down.  The sliding scale differs with each lender, but the majority of them will lend up to 80% of the first 1.25 million and then up to 50-60% of the price above 1.25 million.

For example:  You are purchasing a home for 1.6 million dollars.  The down payment required would be $425,000.

$1,250,000 x 20% down payment = $250,000
$350,000 x 50% down payment = $175,000
Total = $425,000

If you are looking within that price range, contact us!!

A “how to” obtain mortgage financing during COVID

General Trish Pigott 11 May

We have noticed that the market is picking back up and almost as hot as this weather we are having!  With that being said we wanted to provide you with a “how to” and a step by step process to obtain a mortgage approval:

  • First step is to take a Mortgage Application – we can do this over the phone or we have a secure online application 
  • Upon receipt of application, we will contact you “the client” by phone and go over all of the details and your goals
  • Request documentation – Lenders are requiring this upfront before issuing approval or working on your application
  • Documents can be uploaded to our secure client portal or emailed to us directly
  • Files are generally approved by most lenders in 24-72 hours, lender dependent
  • Once Approval is received then we will send the details over to you to review
  • Appraisal will be required in most cases.  If down payment is less than 20% then NO appraisal is needed  (Appraisals are taking place about 2-3 days after they are ordered) 
  • Documents are then drafted and sent over to you to sign electronically.  We will schedule a phone call or Zoom meeting to go over all details of the mortgage with you
  • Once signed documents are received they will be sent back to the lender
  • Update from lender approving and signing off on all conditions
  • We need to know which lawyer or notary  you wish to work with for completion
  • We continue to monitor rates on your behalf to ensure you are obtaining the best rate right up until your mortgages closes
  • We will verify all details with the lawyer/notary prior to your signing appointment with them
  • Your mortgage funds!

We continue to monitor your mortgage for you, if you have any changes… for example:  you want to change the frequency or put a lump sum down, increase the amount you are paying, find out how much you owe – we can do all of this for you!   Each year on your mortgage anniversary we do something called an annual mortgage review where we make sure you still have the best rate out there.  If we think we can save you money, we absolutely will!

 

Contact us at the office to have us fully look after your mortgage and obtain 5 star service!