Some lenders have started to offer variable rates as low as prime less .7% however, this mortgage does not allow any prepayment, confirming that low rates are not always the best plan of action.

While the first half of the Dow Jones Industrial Average’s 998.5-point intraday plunge probably reflected normal trading, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in an interview on Bloomberg Television.

“If you look at the charts you can see fairly clearly where the trades came in,” he said from New York. “It’s that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split-instant because there really was no liquidity in electronic markets.”

The selloff briefly erased more than $1 trillion in market value as the Dow average tumbled 9.2 percent, its biggest intraday percentage loss since 1987, before paring the drop. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission are reviewing “unusual trading” that contributed to the plunge.

Investors looking to purchase a rental property will now have to put 20% down - however the unannounced aspect of this policy change is that CMHC is moving to a new policy that states any applicant with an investment property or basements suite will only be allowed to use 50% of the rental income and have that income added to their employment income for qualification. The problem this poses is twofold:

Many existing borrowers have been qualified using a rental offset; i,e.: using 50-80% direct deduction of the rental income from the mortgage payment.

What happens when these mortgages come due? Can the borrower still qualify for the mortgage loans that they have in place??

What happens to the lending community? Many discount lenders are required to obtain ! CMHC insurance on all of their mortgages, even if the loan is less than! 80%. (The lender pays for the insurance premium behind the scenes.) If  the borrower no longer qualifies for the mortgage, can these lenders offer a renewal agreement? These lenders might also be put of business, leaving only the major banks and credit unions. 20 years ago, befo! re these lenders came into the picture every borrower paid the rate offered by their  bank, and that rate was price fixed by the banks. The end result of this CMHC policy could really change the landscape to our lending community and competition in the lending market.

The broker community is working with CMHC to lessen these proposed changes so that home ownership remains affordable for Canadians, but like most decisions that CMHC makes, it may be too late.

If you are concerned about these changes please contact your local MLA and make your voice be heard.

• Any borrower arranging a mortgage less than 5 years in term or a variable rate mortgage must be qualified as if they are taking a 5-year term. It is not yet clear whether there will be a huge impact, as variable rate mortgages and terms of 3 years or less are already qualified on the 3-year posted rate. The 3-year posted rate is often higher than the discounted 5-year rate. If the guideline turns out to be "qualification must happen based on the 5-year posted rate" it will have an impact on qualifications, otherwise it should have a minimal impact on the market.
  
• For investment properties, the new requirement will be a 20% down payment on all insured mortgages. Currently we have lenders going up to 80% on rentals without insurance. If lenders keep their polices as is then there will be some impact to the market; however, most people buying an investment property either put 20% down to avoid the high insurance premiums charged by CMHC, or the take equity out of another real estate holding to effectively put 20% down on the purchase property.
• Refinances can only be approved up to 90% LTV vs. 95% LTV. Once again I do not think this will impact the majority of consumers.

For further information you may read the full article at:

http://www.theglobeandmail.com/report-on-business/economy/jim-flaherty-tightens-mortgage-rules/article1469432/

Enjoy your day!

The mortgage rates did rise last week after a massive sell off in the bond market, as the bond market was expecting the Bank of Canada to increase its overnight rate early after the employment figures came out much stronger than expected. We will be watching the bond market to see how it reacts to this news.

We hope that this downward trend in the variable rate market will continue into spring 2010. Variable rate mortgages are a great option for those borrowers who can stay variable. If you are not likely to remain floating you may be a better candidate for a fixed mortgage.

We do not feel that the Bank of Canada will have a steep increase in the prime rate. They will be closely monitoring the Canadian dollar before making any decisions to increase the prime rate. If the Canadian dollar hits par as it is forecasted to do this could slow down the economy and therefore the bank of Canada will take increases slowly.

Our best quick close 5 yr today is 3.69% which is not bad either considering the best 5 yr fixed rate a year ago was 5.39%.

The renovations must occur between January 27^th 2009 and February 1^st 2010. The HRTC can be claimed for renovations and lasting alterations to a dwelling, or the land on which it sits. You must have proper receipts to benefit from this program the Government does not want to encourage the underground market of using cash to pay for the work and have no taxes paid by the renovator.

There is a time line on this program so now is the time to move forward with your renovations and get up to $1350 back from the Government.

 The Bank of Canada has held rates as is and will continue to do so for another year most likely. Anyone in "old" variable rate mortgages will have a significant discount below prime and should likely stay floating. I would recommend however, that if you are not already on an accelerated payment plan where the payment you are making is the equivalent of making a mortgage pament @ 5% you should make this change.

Variable rate mortgages can save you a lot of interest, but they have a greater impact when you also increase your payments instead of taking the lower "float down" payment. Currently old contracts allow the borrower to pay a negligible amount of interest as many of these contracts are priced at 1.3-1.45%. This means that you are paying roughly $120 in interest per month per $100,000 of a mortgage. Imagine if you increased your payments from your current payment to one equivalent to paying 5%. You would shave off almost 9 years from your mortgage pay off date.

Please take a moment to review with us where we can improve your mortgage strategy. You may contact us @ 604-351-7438 I am at local 4, Shannon is at local 5 and David is at local 6.

The fixed mortgage rates are rising again due to the bond yields rising. I am not sure if this is a blip or not, perhaps things will stabilize and the rates may fall some time in the future. We will not see the 3.69% level anymore though.

The variables are still amazing rates but you will see the fixed rates as high as 4.49% now. CMHC indicated that they feel the fixed rates will continue to rise over the next 3 yrs to perhaps as much as 8% ( posted rates - less 1.5% likely discount), other economists feel the increase would be closer to 6%.

If you are really concerned you can lock in OR hang tight on variable even if the prime went up by 2-3% your rate would be very good.

Springtime is all about new beginnings, and sprucing up your living space can be just thing to shake off winter.  For many Canadians, new incentives recently announced in the federal budget will make a home renovation project more attractive. 

The federal budget announced in January includes a home renovation tax credit of 15 per cent of the cost of your project, up to $1,350.  To qualify, your project has to be more than $1,000 and the credit tops out at a $10,000 ceiling.  This is a non-refundable credit, which means it will reduce your taxes owing, but you don’t receive cash if you have a positive balance.  Also, the materials and labour for the project need to be purchased before February 1, 2010.   

If you go green with your renos, you can “double dip” – the renovation credit can be claimed on projects that also qualify for up to $5,000 with the federal ecoEnergy Retrofit Program.

Note that these proposed tax credits will not come into effect until the federal budget receives royal assent, expected later this spring.

If your spring renovation plans involve larger projects, it can pay to refinance your mortgage, which allows you to get the very best borrowing rates by using the equity in your home.  A mortgage refinance will allow you to spread your payments over a longer period of time than with a line of credit.  You may also be able to consolidate a range of higher interest borrowings (credit cards and car payments, for example) at the time of your mortgage refinancing.  An Invis mortgage professional will look carefully at your financing needs and advise on the approach that suits your needs.   

About Invis

The Bank of Canada announced that their overnight rate is being reduced by .50bps to 1.50%. If the major financial institutions follow this move prime will be 3%. There is some suggestion that we will not see immediate changes by the lenders due to their cost of funds through deposits and the price they are getting when they go to sell the mortgages that they are committing to. Some suggest that the banks may match this reduction but increase their pricing on variable rate mortgages to in effect, offset this reduction for new borrowers. Some have also suggested that secured lines of credit could be “repriced” mid contract, as these are revolving lines and have clauses within the mortgage document that allows the lender to revisit the arrangement. We certainly do not anticipate that any of these mortgages would be “called” unless the borrowers do not make payments, however, we should be aware that the rates are not set in stone. Once again, this could happen I am not suggesting that this is an a foregone event or that anything is imminent.

The Bank of Canada cited their reason for this further reduction is the deteriorating global economy, and the erosion of household confidence. In order for the global economy to recover the Bank of Canada feels that the global financial system needs to stabilize. They see Canada ’s GDP dropping to 1.2% in 2009, and they anticipate the GDP to improve in 2010 to 3.89%. However, they do admit that we will not be seeing any real inflation in 2009 and that in fact we will see inflation drop below 0 for 2 quarters in 2009 caused by the drop in energy prices, and we will not inflation grow until 2011, which they anticipate to be 2%. What this tells us is that we have further reductions in the overnight rate coming and at the very least we will not see the Bank of Canada increase rates until 2011. This will create some very good opportunities for First Time Home buyers to get historically low rates for their mortgages and this will create an opportunity for borrowers to refinance their current debt at a low rate

We do have a few rate specials for larger mortgage amounts $500,000 + @ 5.19% for a 5 yr term.

Enjoy your day!

Government of Canada Moves to Protect, Strengthen Canadian Housing Market 

Related document: 

• Backgrounder 

The Government of Canada today announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian housing market. The new measures include:

• Fixing the maximum amortization period for new government-backed mortgages to 35 years;
• Requiring a minimum down payment of five per cent for new government-backed mortgages;
• Establishing a consistent minimum credit score requirement; and 
• Introducing new loan documentation standards.

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. 

The new limits are planned to take effect October 15, 2008. This would allow existing mortgage pre-approvals with the common 90-day duration to be used or expire. Certain exceptions would also be permitted after October 15. The Government will work closely with all stakeholders to ensure timely and effective implementation of these measures. 

As these measures relate only to new, government-backed insured mortgages, Canadians who already hold mortgages will not be affected by this announcement. 

The measures announced today will build on the strength of Canada's housing market. According to the International Monetary Fund, the increase in house prices in Canada is based on sound economic factors such as low interest rates, rising incomes and a growing population. A recent Statistics Canada report concluded that home ownership is at record levels, with over two-thirds of Canadians owning their own home. 

Mortgage arrears-overdue mortgage payments-have also remained low. In recent years, the percentage of mortgages in arrears for three months or more continues to be at low levels not seen since 1990.

A backgrounder on today's measures is attached.

An Appraisal

An appraisal allows the lending institution to determine if the land and building in question are suitable as security for a mortgage.  For conventional mortgages, a lender will in most cases require that a professional third party appraise the property to ascertain its current market value.  In the case of a "high-ratio" mortgage (with a down payment of less than 20 per cent), the mortgage insurer will go through its own internal appraisal process.  In particular, lenders are concerned that the property (in terms of its age, condition, and remaining economic life) constitutes a good match with the borrower and their ability to repay the mortgage.  An appraisal does not usually include a detailed property inspection.

A Home Inspection

A home inspection is not used to determine property value, but will provide an assessment of the physical condition of a property.  A well-trained home inspector will perform a comprehensive visual inspection to determine the condition of the building and all of its major systems (for example the roof, structural, heating, plumbing and electrical systems).  While an appraisal is intended to provide the lender with sufficient information to decide on mortgage financing, a home inspection will hopefully reveal to a potential homebuyer that the building and its systems are in sound working order.  If there are outstanding issues, a good inspector will provide the potential purchaser with a schedule outlining the estimated cost of repairs and when they will need to be done.  

Your Invis Mortgage Consultant and your local realtor can provide further advice about how home inspections and appraisals can help you make a wise purchase. 

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Counsel you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com

902-777 West Broadway Ave., Vancouver, BC V5Z 4J7

First impressions count 

Make sure that the front yard and front porch / entranceway is clean and free of any messy looking items such as recycle boxes. 

Clean, clean, clean

Consider hiring a professional cleaning service to make sure that everything in your home from floor to ceiling has been meticulously cleaned and/or dusted.  Power-washing the exterior is also a good idea.  A clean home shows buyers you have cared for the property. 

Get it fixed

Make sure that bathroom tiles are not cracked, or the kitchen faucet doesn't drip, to give two obvious examples.  Don't rely on the homebuyer to do these things after the sale. 

Spruce things up in the kitchen

If your kitchen is in need of a remodelling, you can update the space quickly and inexpensively with new curtains, new cabinet knobs, and a fresh coat of neutral paint. 

See the light

Brighten up your home - very clean windows and higher wattage bulbs do wonders for making a space seem airier and bigger.   

Clutter is the enemy

Don't get too personal

Anything directly connected to you should be stashed from sight, such as toiletries in the bathroom or framed family photos, so that potential buyers can easily imagine themselves living in the home.  However, make sure that you strategically place flowers in a few rooms to "warm up" the look of your home. 

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Guide you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com

902-777 West Broadway Ave., Vancouver, BC V5Z 4J7

With the Home Buyers Plan (HBP), first time homebuyers in Canada can take out funds from their registered retirement savings plans (RRSPs) to buy or build a qualifying home that will be their principal residence. 

The Plan allows first time buyers to withdraw up to $20,000 from their RRSP (or, up to a maximum of $40,000 per couple) tax free, and have 15 years over which to reimburse their RRSP.  Money withdrawn can be all or part of the down payment. 

Who can participate in the HBP?

If you and your partner are residents of Canada, have not owned a principal residence at any time within the past five years, you may be eligible to participate.   

You may take part in the HBP more than once, so long as you have paid back your previous withdrawal in full, and within the prescribed time period.

No RRSPs?  Here's how you can make the most of the HBP.

The HBP permits an individual to establish an RRSP with borrowed funds, and then use the resulting tax refund for a down payment.  In this scenario, the individual borrows funds that are contributed to an RRSP.  After a 90 day period, the RRSP is collapsed to repay the loan.  He or she receives a tax refund that can be applied to the purchase of a home.  Note that borrowing funds for an RRSP will impact your "total debt servicing ratio," and possibly your eligibility for a mortgage.

There are a few details to keep in mind. 

The purchased home must be owner-occupied, and the RRSP must be repaid with minimum annual payments of 1/15th of the withdrawn amount.  If you do not repay the amount due for a year, it will be included in your taxable income for that year.   

Also, you must have a written agreement to buy or build the qualifying home, not just a mortgage pre-approval. 

You cannot own the qualifying home more than 30 days before the withdrawal, and you must buy or build the home before October 1 of the year after the year of withdrawal.

This is only a short overview of the HBP.  More information may be found on the Canada Revenue Agency website at www.cra-arc.gc.ca; use searchword "HBP" to locate the introductory page on this program.   

Your Invis Mortgage Consultant can discuss the details of the Plan, and can advise on how it may form a part of a personalized mortgage strategy that best suits your individual needs. 

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Guide you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com

902-777 West Broadway Ave., Vancouver, BC V5Z 4J7

Major life events such as getting married or additions to the family can have an impact on which mortgage is best for you.  As you move through different life stages it makes sense to revisit your mortgage strategy to ensure you are taking advantage of the many options available.

Getting Started

An exciting time as young people buy their first home and get themselves established financially.  Mortgage strategies include:

§         Focusing on building a good credit history.      

§         Ensuring that you can manage the debt you take on.

§         Beginning to build equity in one's home - bi-weekly or even weekly payments can help boost equity faster.  

§         Making sure that your mortgage options have flexibility as your housing needs evolve. 

Moving Up

These are the years of balancing family and career, and for many, the highest spending years.  Expanding families often mean moving up to a larger home.  Mortgage strategies to consider are:

§         Consolidating high-interest credit card debt with lower-cost mortgage financing. 

§         Getting a line of credit as part of your mortgage to manage larger purchases or renovations. 

Building Equity

At this stage, many move into their highest earning years, and paying down the mortgage is often a priority.  As home equity increases, so do borrowing options.   Mortgage strategies include:

§         Making lump sum payments on your mortgage and raising payments along with increases in income. 

§         Purchasing a vacation property for the family to enjoy. 

§         Increasing the value of your home through renovation projects. 

§         Leveraging the equity in your home for investments, business ventures, or revenue properties. 

Pre-Retirement  

§         Taking equity out of your home for a range of purposes, from helping out children with down payments to travel.

§         At the same time, having a strategy for winding down your debt. 

§         Purchasing revenue property for extra cash flow heading into retirement. 

Whatever your life stage, whatever milestone you've reached, make sure you benefit from expert advice on the best mortgage strategy, every step of the way.

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Counsel you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com

902-777 West Broadway Ave., Vancouver, BC V5Z 4J7

Many homeowners are also motivated to move up because of appreciation in equity in recent years.  Many are selling their existing properties and are benefiting from a hefty down payment for their new home. 

If you're thinking about whether the time is right for a change, moving up begins with a careful understanding of your needs and wants: 

Get an accurate picture of your financial situation.

How much more of a mortgage payment can you really afford?  Factor in other debts and expenses as well as long- and short-term savings goals like postsecondary education expenses for the kids and retirement for you.   

Be realistic...

...about how much you can sell your home for and how much of the proceeds you'll have available for a down payment on your next home.

Know your financing options. 

Many mortgages are portable between properties, and may have a "blend and extend" provision allowing you to keep a favourable rate.  Also, getting pre-approved for a mortgage means you'll know how much house you can afford. 

Be specific about your needs.

If you are expecting to have more kids, be on the lookout for houses with plenty of bedrooms and areas to entertain and raise growing children.  Take play and study spaces into account.

Consider the neighbourhood.

If you have kids, check out the reputation of the schools that your children would be attending.  And finally, factor in the neighbourhood's proximity to work, shopping, restaurants, and other important places you'll be frequenting.

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Counsel you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com

902-777 West Broadway Ave., Vancouver, BC V5Z 4J7

Here is an outline of what the housing market in Canada could look like in the coming years as our population ages. 

►Present to 2011 - Move Up Buyers

During these years a desire for larger homes among married couples drives mobility in the real estate market.  A single detached home is the ideal for many, although housing costs in larger urban areas may prompt some buyers to opt for townhomes or larger condo units.  While mortgage and personal debt is significant, rising incomes among boomers support savings.  Home equity lines of credit remain a common option for homeowners. 

►2011 to 2016 - Empty Nesters

With more and more boomers exiting the labour force, and with family size decreasing as children reach adulthood, downsizing dominates in these years.  Aging but active boomers increasingly seek out housing that is more compact, lower maintenance, and closer to amenities.  High-end condominiums and one storey homes in established neighbourhoods are popular housing options. 

Increasingly, first time buyers from the children of boomers (so-called echo boomers) drive demand in the real estate market as first time buyers. 

►2016 to 2035 - Seniors

While these are approximate sketches of upcoming trends, there is little doubt that demographic shifts in Canada's population will have a significant impact on the decisions of homeowners and real estate investors in the years to come.

¹ Boomers are typically described as those born between 1947 and 1966, now aged 41 to 60. ² Housing Outlook Conference in Toronto, Nov 2006.

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Counsel you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com

902-777 West Broadway Ave., Vancouver, BC V5Z 4J7