Bank of Canada Update – January 17, 2018

General Trish Pigott 18 Jan

The Bank of Canada has gone ahead and announced that they are increasing their prime rate another 1/4 percent, this is particularly important for variable rate mortgage holders.

If you have any questions or concerns around this increase, please contact us at the office 604.552.6190.

Spousal Buyout (divorce or separation)

General Trish Pigott 12 Jan

If you or maybe someone you know happen to be going through, or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property in order to buyout your ex-spouse.

We highly recommend reading this article about spousal buyouts.  The article may answer some of your questions!

If you have any other questions or are considering a spousal buyout, please do not hesitate to contact us at the office.  We would love to walk you through the proper steps. 604.552.6190.

Down payments & how much should you be putting down?

General Trish Pigott 4 Jan

When it comes to buying a home, there are many things to consider, many things that will affect your monthly payment or maybe whether or not you will be paying an insurance premium.

Dominion Lending Centres put out a great article that touches on different down payment amounts – This article is a must read.

Enjoy!

New Year, New You!

General Trish Pigott 21 Dec

The time to make some new year resolutions is quickly approaching.  You’ve got your typical weight loss, quit smoking resolutions… why not set a resolution to save more money, or pay down your mortgage faster!  Click here to read how we can help you with your new years resolution.

 

 

Bank of Canada Announcement

General Trish Pigott 6 Dec

HEADS UP all you variable rate mortgage holders: The Bank of Canada made no changes to the interest rate today. However it gave cautious warnings to us Canadians that increases are likely coming…

To read more on this announcement CLICK HERE.

IMPORTANT MESSAGE FOR HOME OWNERS AND POTENTIAL BUYERS

General Trish Pigott 5 Oct

Jeremy Rudin, Superintendent of Financial Institutions (OSFI), which is the organization that governs our federal banks and policy, announced that they will finalize the new mortgage criteria later this month.  Despite the amount of criticism they have received from their industry consultation with major banks and economists, they have no intention of backing off the new proposed rule changes.

The new rule changes will be similar to what they enforced 1 year ago to new home buyers being forced to go through a qualification “stress test” by being approved for a mortgage at a much higher rate than what they are actually paying.  At this point, it only affects home buyers with less than 20% down payment.

The new proposed rule will now apply to all mortgage applicants, whether purchasing a home with 20% down or more or existing home owners trying to refinance or use equity from their home for other purposes.  These applicants will now be forced to qualify at the actual interest rate PLUS 2%.  Today’s average 5 year fixed rate is at 3.39% and now the amount you qualify for will be based on a rate of 5.39% yet only have to make payments based on the actual rates.

This is important information for anyone considering taking equity out of their home or wanting to secure a line of credit for future use. 

On a few examples done in our office this week to see what the proposed effects will be, it’s reducing one families mortgage options by $100,000.  They can refinance today under the existing rules and take $100,000 equity out for renovations and investments however if the new rules are passed, they will no longer be able to access that equity unless they sell their home.

IF YOU ARE CONSIDERING ACCESSING YOUR EQUITY, ACT NOW SO WE CAN GET YOUR APPLICATION IN AND HAVE AN APPROVAL HELD FOR YOU FOR THE NEXT 120 DAYS. 

When we saw the last set of rule changes be implemented, the banks became extremely backlogged with turn around times causing many people to miss the opportunity.

Bank of Canada Update – July 12 2017

General Trish Pigott 12 Jul

For the first time in seven years, the Bank of Canada announced today that it was increasing its key overnight rate by a quarter percentage point (25 basis points) bringing it to 0.75 percent as the economy has staged a broadly based economic expansion this year. In a break from tradition, the Bank has taken this action even though inflation remains well below its target rate of 2 percent. Indeed, inflation has hit its lowest level since 1999. Both Governor Poloz and Senior Deputy Governor Wilkins have emphasized that the Bank must begin to hike rates pre-emptively due to the lagged effect of monetary tightening.

This increase will have an effect on Variable Rate Mortgage holders and anyone with a loan or line of credit that is tied to the Prime Rate.  We’ll see announcements from lenders come out later today and this week as they all adjust their Prime rates.  Currently Prime is at 2.70% and we will see that most likely rise to 2.95% by the end of the week.  Fixed rates started to rise last week as the bonds increased with the speculation of today’s announcement.

If you are concerned with your current Variable Rate Mortgage and would like to explore options with locking in or refinancing at a fixed rate,  CLICK HERE to contact us to start the process. 

Other possible changes may be on there way as well.  This time OSFI–the regulator of financial institutions–is proposing that banks stress test non-insured borrowers at two percentage points above the contract rate. This despite the fact that non-insured borrowers are putting at least 20 percent down on their home purchase. A small BoC rate hike would reinforce the multi-faceted steps to calm the broader housing market.

In a nutshell, the government is doing all it can to tighten mortgage lending rules and if you think you will be needing a mortgage anytime soon, get the process started now as it may not be as easy when any new changes are in effect.


CLICK HERE TO READ A FULL REPORT FROM DLC’S ECONOMIST DR. SHERRY COOPER

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