Mortgage Industy News May 6 2011

• May 6, 2011

Industry News

The days of extra-plump variable-rate discounts may be numbered.

A handful of lenders began trimming their variable-rate mortgage (VRM) discounts last week. They’ve gone from prime minus 0.75% (the average market rate) to prime minus 0.65%, or even prime minus 0.50% in some cases.

To most, these changes have seemingly sprung out of nowhere. Few expected rising VRM rates before the Bank of Canada resumed tightening. Unfortunately, it’s happening now and it’s beginning to smell of a trend.

As of Friday, four of the top 10 broker lenders had reduced discounts, and others were considering following suit.

Click here to read more from CanadianMortgageTrends.com to take a look at what’s behind the trend.

Canadian households now owe more than our American neighbours, prompting fears this country is poised for an economic meltdown. But is it really that bad? Maybe not.

It was impossible to miss the alarmist squawking when headlines appeared in December decrying that Canadian household debt levels had officially eclipsed that of our neighbours to the south. The tone of the analysis that followed could not have been more grim and the numbers seemed to back it up. Canadian families owed, on average, $112,000, while the total consumer debt level had risen to an unprecedented $1.5 trillion. Perhaps more telling, the debt-to-income ratio, used to determine how stretched an average family’s finances are, rose to almost 150%. In other words, Canadians were spending $1,500 for every $1,000 they brought home after taxes.

Given the United States’ poor economic performance since the slowdown of 2008, a circumstance compounded by access to easy credit that fuelled a real estate bubble, the suggestion Canadians were actually outspending their southern neighbours was met with understandable concern and more than a fair bit of drama.

Click here for the full Financial Post article.

While plenty of individuals live from paycheque to paycheque, most consumers know they should be saving money and reducing debt. The recession has drummed that concept into everyone’s head as people have watched their neighbours and friends lose jobs and sometimes their home.

Many people say that money worries keep them awake at night, but that doesn’t necessarily translate to imminent bankruptcy. How do you know when you are truly teetering on the edge of a financial disaster versus simply needing to do a little belt-tightening?

Click here to read the Globe and Mail’s nine signs you can’t afford a mortgage.

If obtaining a job as a mortgage broker is your goal Here is an interesting new mortgage job employment site: MortgageBrokerEmployer.com

Spring is widely known as the hottest real estate season for both buyers and sellers. It’s a season for frantic races from property to property and quickly calculating your mortgage pre-approval in your head while trying to beat the other potential buyers to the next house.

Home sellers who’ve been renovating properties for months are finally ready to place them on the market – complete with new fences, budding gardens and recently installed hardwood floors, all meant to appeal to buyers’ aesthetic values. (Historical housing price data suggests ongoing increases in housing prices, but these numbers don’t tell the whole truth.)

But spring also uncovers another type of home seller. The type who puts Band-Aids on bullet wounds, and hopes you don’t ask any non-appearance-related questions. And for that reason, spring can be both a blessing and a curse, especially for first-time shoppers.

Click here to read tips for spring home buying from the Globe and Mail.

The number one question you need to ask yourself if you’re selling your home this spring is: How do I net the most money?

It’s not how do I get the most money for my home? It’s how do I keep the most money in my pocket after paying all my expenses, including commissions and fees?

Discounters are popping up everywhere now that they can access the Multiple Listing Service. Then there’s still the full-service broker who promises a better price and ultimately more money in your pocket.

A settlement last year between the Competition Bureau and the Canadian Real Estate Association, which represents about 100 boards across the country and almost 100,000 agents, allows consumers to have “a mere listing” on the MLS. Being on the MLS system is key since about 90% of transactions are handled by organized real estate.

Click here for more from the Financial Post.

Any questions please contact Shannon Maybin at 604-897-2212