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

Great insights from Dominion Lending’s economist Dr. Sherry Cooper.  In the article below she speaks to the decision today to leave rates unchanged in the US but could see hikes coming soon with the uncertainty of the Trump administration. 

Click Here to Review Full Article

Everyday we are getting updates with what lenders will participate in the new down payment loan program annoucned on December 15th by the BC Government. 

CMLS Financial has confirmed that they will take part in this program that will allow first time home buyers to take a loan from the BC government to form part of their down payment. 

For futrther details, please contact our office at 604-552-6190 and we can help determine if this is a program you can benefit from.

Everyday we are getting updates with what lenders will participate in the new down payment loan program annoucned on December 15th by the BC Government. 

Street Capital Financial has confirmed that they will take part in this program that will allow first time home buyers to take a loan from the BC government to form part of their down payment. 

For futrther details, please contact our office at 604-552-6190 and we can help determine if this is a program you can benefit from. 

BC Assessed Values are now available online.  Don’t be too surprised when you see a substantial increase over 2015.  For property owners where your value is over $1.2M, unfortunately you no longer qualify for the Home Owners Grant for your 2017 property taxes.  If you would like to see your value before receiving it in the mail, click the link below. 

If you would like to find out how you can access some of that equity, message me directly or contact us at the office.  604-552-6190.

CLICK HERE TO ACCESS YOUR 2017 BC ASSESSMENT

We’re still waiting on details to unfold regarding this new program  and what banks and lenders will support it.  So far we’ve heard from one insurer on how they will handle it.  Here’s what we know so far and I will continue to update my blog with further details. 

• All borrowers must be first time home buyers – never owning a home in the past as a principal residence anywhere
• Borrowers will have to have saved a minimum of 2.5% to go towards the down payment.  This is a matching program to a maximum of $37,500.
• Property must be used as a principal residence for the next 5 years
• No interest or payments will be made for the first 5 years
• Applicants must have been a Canadian resident for the past 5 years
• The loan will be a second mortgage
• Pre-approval must be received prior to applying for this program with the government
• The payments will be added in to the qualifying calculatiions for what you qualify to purchase for (although payments will not start until year 6)
• Applications can be sent to the government as of January 16, 2017
• Maximum purchase price $750,000

There’s many mixed opinions on this program so if you are interested in discussing it further and learning more, please contact us here at the office.  604-552-6190.

To read further information, CLICK HERE. 

If you would like more information on credit and how to ensure you have good credit, click the link below to get a full guide on how your score is derived and how to keep it above the minimum that banks and lenders want to see in order to approve your mortgage or other loans. 

Whats_Your_Score_Credit_Repair.pdf

If you are wondering about how you are affected with the new mortgage rule changes announced in October 2016, click on the link to find out the most recent changes and how much you can afford under the new rules.  If you are still wanting further clarification, call my office at 604-552-6190 and I will be happy to walk you through it. 

Click Here for Rule Changes

With some lenders moving towards collateral charge mortgages, it’s important to understand the differences between a collateral and a standard charge mortgage.

The primary difference is that a collateral charge mortgage registers the mortgage for more money than you require at closing. For instance, up to 125% of the value of the home at closing with some banks or 100% through many credit unions, instead of the amount you need to close your transaction (as is the case with a standard charge mortgage). 

The major downside to a collateral mortgage becomes evident at your mortgage renewal date. For borrowers who want to keep their options open at maturity and have negotiating power with their lender, this isn’t the best product feature because collateral charge mortgages are difficult to transfer from one lender to another. 

In other words, if you want to change lenders in order to seek a better product or rate in the future, you have to start from the beginning and pay new legal fees, which range from $500 to $1,000. With a standard charge mortgage, in most cases, the new lender will cover the charges under a “straight switch” in order to earn your business.

In addition, with a collateral charge, it could be difficult to obtain a second mortgage or a home equity line of credit (HELOC) unless your home significantly appreciates in value.

Lenders offering collateral charge mortgages promote the benefit that it makes it easier and more cost effective to tap into your equity for such things as debt consolidation, renovations or property investment. There’s no need to visit a lawyer and pay legal fees – the money is available as your mortgage is paid down. Yet, if you read the fine print, you may still have to re-qualify at renewal.

A standard charge mortgage gives you the ability to move to another lender at renewal should you want to without incurring legal fees, and many borrowers find it more beneficial to keep their options open. If you need to borrow more with a standard charge mortgage, you have the option of a second mortgage or a HELOC, which also enables you to take money out as your mortgage is paid down.

Navigating through the mortgage process alone can be tricky. Working with a mortgage professional who has access to multiple lenders will help ensure you receive the product and rate catered to your specific needs.