Finance Minister Jim Flaherty says he stands ready to intervene in the housing market again, just as a mortgage price war breaks out among Canada’s major banks.

Flaherty said Tuesday that he’s watching the market closely, although he has no plans to tighten the market again at this point.

His comments came on the same day that the Bank of Canada projected that the debt burden on households will continue to rise – a troubling sign that means stretched consumers are vulnerable to shocks in this climate of heightened economic uncertainty.

Flaherty said he’s in close contact with the big banks, most of whom are now offering 2.99% fixed-rate mortgages – the lowest ever.

Click here for the full Globe and Mail mortgage rate article.

Bank of Montreal made headlines with the 2.99% five-year fixed-rate mortgage it unveiled last week.

Most of the other big banks have followed suit, but before signing on the dotted line you should read the fine print. These mortgages have restrictions that you won’t find on other products.

“It’s the lowest rate available but I would only recommend it to people who are very sure of their circumstances for the next five years,” said Kerri-Lynn McAllister of RateHub.ca, a website that compares mortgage rates. “You may want to look at a slightly higher rate that offers all the flexibility of a standard mortgage.”

BMO says this mortgage offers Canadians a way to be mortgage-free faster because it offers a great rate and a shorter amortization. But it differs from a typical mortgage in several ways.

Click here for the full article in The Star.

Canada’s key interest rate will begin 2012 exactly where it’s been since September 2010 – unchanged at 1.00%.

This is the longest stretch on record (16 months) without a Bank of Canada rate change.

Economists didn’t expect the BOC to move rates at this meeting. Instead, they were looking for any change of language in the Bank’s official statement. As usual, there were a handful of conspicuous statements in that release.

Click here for BOC highlights from CanadianMortgageTrends.com.

Lawyers spearheading twin class-action suits against CIBC over “vague prepayment terms” have fielded interest from hundreds of the bank’s mortgage clients – that as a case management judge in BC gets assigned to the legal action.
“There have been hundreds of inquiries about these cases to our office and that of our co-counsel in Ontario,” Kieran Bridge, a Vancouver lawyer with the Construction Law Group, told MortgageBrokerNews.ca, pointing to borrowers who paid out CIBC mortgages from April 2005 onward.

FirstLine clients are among those concerned that they may have been adversely affected by the lender’s prepayment policy.

A Case Management Judge has also been assigned, what Bridge calls a key, mandatory step in moving class actions forward in British Columbia. “We applied in November for a judge to be appointed, in order to move the case ahead, and are pleased this has happened,” he said.

The twin lawsuits were filed in BC and Ontario last October, alleging some CIBC mortgage borrowers have been unfairly penalized by unclear prepayment terms giving rise to two substantive complaints.

Click here to read more from MortgageBrokerNews.ca.

We had a recession back in 2008-09, but you might not have known it by the way people kept spending and borrowing.

Now, the economy is growing modestly, and yet a recent national poll has suggested that 70% of Canadians believe the country is in recession.

This is progress. You’re much more likely to have your financial priorities straight if you’re worried right now about the future.

Click here for 10 money rules to prepare you for any tough times ahead from the Globe and Mail.

Canadians rank relatively low on The Economist magazine’s Misery Index released this week, which is a good thing.

Canada stands at number 70, out of 92 countries measured on a combination of unemployment and inflation.

The jobless rate in Canada is now at 7.5%, high but nowhere near as high as other countries, while inflation is running at 2.9%.

Macedonia, whose unemployment rate tops 30%, and Venezuela, where inflation is rampant, top the list.

Click here to read more from the Globe and Mail.

Association News

Good news, brokers: You remain a primary referral partner for real estate agents even as the number of home sales slows across key Canadian markets. Bad news, brokers: More and more, the banks are determined to change that.

“I’m seeing lots more mailers and literature coming into the office from banks, offering incentives, points and Air Miles,” Mark Savel, a sales representative with Re/Max Realtron Realty in Toronto, told MortgageBrokerNews.ca. “I see agents who get swayed by those incentives, but in nine out of 10 cases, it’s still a mortgage broker who I’m referring a client to, and that’s because of the relationship that extends past closing and for the whole term of that mortgage.”

He’s not alone, with other high-performing Realtors sticking to the same strategy in the face of increasingly aggressive targeting by the country’s Big Six as the number of new home purchases slows.

As MortgageBrokerNews.ca reported last month, National Bank’s CEO Louis Vachon told analysts that the financial institution is actively looking to grow the number of referrals coming directly from real estate agents, some representatives dangling cash finder’s fees of as much as 50 basis points.

Click here to read more from MortgageBrokerNews.ca.

It would take a strong rebound in bond yields to derail further reductions in fixed mortgage rates… and that’s exactly what has happened this week – between Monday and today.

The five-year government yield has catapulted 30 basis points from Monday’s psychological 2% level. On a closing basis, that’s the largest two-day advance since October 2009.

At the moment, we’re six basis points above the five-year yield on June 3rd. That’s the day when banks last cut advertised fixed rates. If yields continue much higher, current bargain basement five-year fixed rates (like 3.59%) could disappear posthaste.

Click here for the full article from CanadianMortgageTrends.com.

Are the banks doing an incredible job of retaining customers or are Canadians just too lazy to shop around when renewing their mortgages?

One finding of a survey by CMHC was that 89% of consumers renewing their mortgage stay with the same financial institution. And 68% stay when refinancing.

“They stay with the lender because of rate and they leave the lender because of service,” says Pierre Serré, VP, insurance product and business development, with CMHC.

Consumers are more aggressive shoppers when they are seeking a mortgage to buy their first home than they are upon renewal. Only 57% of first-time buyers took out their mortgage with their existing financial institution.

Click here for the full article in the Financial Post.

TransUnion has finally made its push onto the Filogix Expert platform alongside rival Equifax, although brokers won’t be able to shoot off its credit reports to lenders until early next month.

“It’s activated now for the brokers to pull a credit report, but they won’t yet have the ability to send it to a lender via Expert until early July and after testing to ensure that lenders will be able to receive the reports,” Steve Malone, VP of Broker Services for Davis + Henderson, told MortgageBrokerNews.ca.

With the release of D+H Expert 2.12 on April 30th, brokers were for the first time given the choice to set up TransUnion accounts in Expert, effectively allowing them to pull credit bureau reports not only from Equifax, but also TransUnion. That, of course, is after first winning client approval.

For TransUnion, there’s also the challenge of winning both broker and lender buy-in for services offered at a lower price point and mirroring those of Equifax, now the industry’s standard bearer.

Click here to read more from MortgageBrokerNews.ca.

Scotiabank today released the results of a recent poll looking at consumer debt levels and practices, and how Canadians are feeling about their debt.

The study was conducted by Harris/Decima and assessed the borrowing habits of Canadians. More than half of Canadians (56%) feel their level of debt is manageable and an additional 27%. A smaller number of Canadians (17%) reported feeling overwhelmed by their debt, and many of these people carry a credit card or line of credit balance.

“We know that a majority of Canadians are interested in having a plan that looks at their overall financial health and helps them make the most of their money,” said Mike Henry, Senior Vice President of Retail Payments, Deposits and Lending at Scotiabank. “Whether it’s renovating their home, funding a child’s education or planning for retirement, having a financial plan with a manageable borrowing strategy will help Canadians plan for and manage the role that debt plays in reaching their life and financial goals.”

Many Canadians do not currently have an outstanding balance on their credit card or on their line of credit (56% and 40% respectively). In fact, four-in-ten (41%) respondents never carry a balance on their credit card and one-third (31%) never carry a balance on their line of credit. An additional one-in-five only use their credit card or line of credit (18% and 22% respectively) in the case of an emergency.

Click here for the Scotiabank news release.

If you’ve been considering buying a house but you’re still unsure, consider some of the personal and economic conditions that favour home purchases.

If you find that a number of these signs ring true for you, it may be time to contact a mortgage/real estate agent and start shopping.

Click here for the six signs it’s time to buy a house from the Globe and Mail.

Canadians are flocking to California, where the high loonie can yield big returns in the low real estate market. Click here to watch the CBC video.

Home equity lines of credit represent 22% of all Canadian mortgages, or a whopping $215 billion, according to a new CAAMP report – the first to track that segment of the market largely closed to brokers.

“As far as we know, this is the first time anyone has tracked that end of the mortgage market,” CAAMP Chief Economist Will Dunning told MortgageBrokerNews.ca. “This is the first snapshot we have of the HELOC proportion of the industry, so we’re uncertain how quickly it may grow, although I think it will.”

For this year’s annual spring survey report on the residential mortgage market, CAAMP asked Canadians to specify how they financed their homes and withdrew equity. Of an approximate 9.45 million homeowners in Canada, an estimated 1.87 million hold both a mortgage and a HELOC. About 770,000 have a HELOC, but no mortgage, with the majority of Canadians holding just the mortgage itself. Approximately 3 million lucky Canadians have no debt at all on their homes.

While brokers continue to attract as much as 30% of the first mortgage business and 20% of renewals, refinances and transfers, their participation in HELOCs is relatively marginal. That has to change, said one Alberta mortgage professional, his brokerage one of the few actively courting that business.

Click here to read more from MortageBrokersNews.ca.

First-time homebuyers have accounted for about one in every two homes sold in Canada in the past two years – with more than a quarter of a million sales per year across the country – says a new report.

A housing report by the Altus Group, an economic consulting firm, says the majority of first-time buyers are in the under 35 age group, with the 25-34 segment alone accounting for six out of every 10 first-time buyers.

Many first-time buyers are more ‘mature’ with about one in four aged 35-49 years old.

The report says more than one-fifth of first-time buyers purchased a newly-built home. Of these, about one in three opted for a condominium unit.

Click here for the full Calgary Herald article.

A variety of factors can keep you from qualifying for a mortgage.

The big ones include a low credit score, insufficient income for the size of the loan you want, insufficient down payment and excessive debt. All of these factors are within your control, however.

Click here to read the Globe and Mail’s five steps to scoring a mortgage.

Spring is upon us and the housing market is set to enter its busiest time of the year.

With winter a mere memory and lots of sunshine on the way, many potential homebuyers will be out and about looking for the perfect home to suit their needs and budget. If you’re preparing to put your home on the market this spring, there are a number of things you can do to erase signs of winter wear and improve your home’s appeal.

“Whether you’re in a buyer’s market or seller’s market, simple, cost-effective improvements like applying a fresh coat of paint to your home’s interior or exterior can transform your home and help attract greater interest from potential buyers,” said, Dianne Usher, Vice President and Division Manager, Royal LePage Real Estate Services, Johnston & Daniel Division. “Larger-scale improvements like renovations can also enhance a home’s appeal while some houses might require repairs after a long and harsh Canadian winter.”

To make sure your home is not only sale-ready but fetches the highest possible price, click here to view a list Royal LePage compiled of the top 10 tips for selling your home this spring.

For any questions please contact mortgage broker Shannon Maybin for any mortgage needs you may have

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

Canadians appear to have gotten the message Mark Carney was sending when the Bank of Canada Governor went public last year with his concerns about rising levels of household debt.

In the months since his remarks – which were augmented by changes to lending rules by Ottawa – growth in consumer borrowing has noticeably slowed, according to Royal Bank of Canada and credit-counselling agencies. A clearer picture will be available when the banks report their second-quarter earnings next month.

Meanwhile, it appears that tapped-out consumers are preparing for inevitable higher interest rates, and tighter lending rules have deterred some would-be borrowers from taking on more than they can afford. Also, the central bank’s latest forecast indicates policymakers see growth in household spending evolving more in line with growth in incomes.

Carney ratcheted up his warnings last year, arguing too many indebted Canadians would be in big trouble if they were to lose their jobs or suddenly incur a large, unexpected expense. At the time, the average household debt level including mortgages had reached a record 146% of personal disposable income. Initial signs of a pullback are being attributed to two factors: consumers scaling back their appetite for debt, particularly now as rising energy costs cut into their budgets; and changes the federal government made to longer-term mortgages and secured lines of credit.

Click here for more details from the Globe and Mail.

You walk into the open house, take one look and say to yourself: This is it. It’s the house I have to live in. Where do I pay? A bidding war? I’m in.

Over my years of buying houses, I never bought one that did not have that frisson moment, that thrill of finding a place so suited to my wants. Indeed, I have in the past decided that I wanted to buy a house in what seems, in retrospect, to be nanoseconds. (By contrast, I’ve taken weeks to decide on the right pair of shoes.)

It’s no way to make an “investment,” to be sure. But, as I’ve previously discussed in this space, buying a house is perhaps the most uninvestment-like of investments. Just about anyone who’s purchased a property or thought about purchasing knows that it is much about gut-feel, in which the senses can conspire to trump sense.

Now, as the major real estate selling season gets under way, along comes a survey commissioned by BMO Bank of Montreal to give statistical weight to the notion that intuition carries a particularly heavy weight in the house-buying process.

Click here to read more in the Financial Post.

Buying a house is a big learning experience for most of us, since we do it infrequently. Buying a condo presents even more challenges.

I always advise people to do lots of research, talk to neighbours and check the minutes of the condo board meetings. Don’t make an impulse purchase, as Jody White described doing in a MoneySense article, “Went for a coffee, came home with a condo.”

I recently talked to Peter C, a reader who bought a condo in downtown Toronto before it was built. This was a first home purchase for the school teacher in his late 40s, who hoped to pay off his mortgage quickly and retire early. So, how is he doing? What has he learned since moving into his unit two-and-a-half years ago?

“The condo was a great decision,” he says. “I’m on an ambitious plan to pay off my mortgage in five years. Then it will truly be Freedom 55 for me.”

But if he had to do it over again, Peter would have checked out the ratio of renters to owners in his building on Carlton St near Yonge St – an area popular with college and university students.

Click here for the full article from The Star.

Canadian household debt loads hit record territory this year, surpassing even levels south of the border. A new Statistics Canada paper out last Thursday sheds some light on just who’s most indebted and why.

First, the aggregate numbers: household debt for Canadians more than doubled between 1984 and 2009 – from $46,000 to $110,000, largely due to mortgage debt. Growth has accelerated even faster since 2002 (it’s continued to climb this year, though economists expect the rate of accumulation will slow as borrowing costs rise).

The paper, by senior analyst Matt Hurst, lists several reasons for the surge. Some are familiar – low interest rates and a cultural shift to consumerism. Others include increased demand in the housing market from the boomers, heightened competition and deregulation in the banking sector, new financial products, more relaxed credit constraints and more women in the workforce.

More than three quarters, or 76%, of Canadians carried debt in 2009 and, among those who did, the average load was $119,000.

Click here to read more in the Globe and Mail.

Whether it’s a duplex, a cottage or a Florida getaway, a second property can be a rewarding investment over time. But if you’re not careful, it can prove taxing as well. A little planning goes a long way.

The following are some common mistakes financial planners see in their practice, as well as some tips for minimizing the tax hit.

If you borrow money to buy or repair a rental property, make sure you arrange things so that the interest on the loan is tax deductible. That means keeping mortgages and lines of credit for the rental property completely separate from loans taken out to buy or improve your principal residence, which are not tax deductible.

“You can’t unmix money,” says Warren Baldwin, Regional Vice President of financial planning firm TE Wealth in Toronto.

Click here for the full Globe and Mail article.

For assistance with getting mortgage financing you can’t go wrong with female mortgage broker Shannon Maybin.  Don’t hesitate to contact her at 604-897-2212.

According to a survey by RBC, 55% of younger Canadians, aged 18 to 34, are more likely to turn to real estate websites when buying a property.

That’s a big difference from the older generation, with 71% of those aged 45 and older saying they would turn to a real estate agent, rising to 74% for buyers over 55, the survey found.

Although the increased use of the Internet in the real estate market doesn’t spell the end of the current system through which 90% of Canada’s homes are bought and sold, it does provide a window of opportunity for those able to capitalize on the growing use of new tools to gain market share.

Click here to read more from Money.canoe.ca.

The choice of whether to buy a new home or condo, or a resale depends on individual preferences and priorities.

While new homes offer a number of advantages over previously owned residences, there are plenty of upsides to purchasing an older home, too.

Click here to read more from The Star, which consulted builders and realtors to get their thoughts on the pros and cons of buying new versus used.

Any questions please contact Shannon Maybin for any mortgage needs you may have.

Dominion Lending Centres is excited to announce the appointment of industry veteran Gord Dahlen as Executive Vice President.

“We’re extremely pleased to announce that Gord Dahlen will be joining our senior management team as Executive Vice President, effective immediately,” says Dominion Lending Centres President Gary Mauris.

The addition of Dahlen – who most recently served as President and CEO of Invis and Mortgage Intelligence – to the Dominion Lending Centres senior management team will add tremendous value, knowledge and experience to Canada’s largest and most successful mortgage company, Mauris says.

“Gord Dahlen is a pioneer in our industry. He’s a passionate leader who has demonstrated exceptional values and integrity, and is a selfless ambassador to the Canadian Mortgage Brokering Industry. On behalf of Dominion Lending Centres, it’s our sincere privilege to have Gord Dahlen join our team,” Mauris adds.

“This is a great industry and I was fortunate to have some real choices regarding my next move. My decision to join forces with Dominion Lending Centres was a natural selection given that it’s clearly the leader in this industry,” says Dahlen.

“Dominion Lending Centres is, without a doubt, the most prolific company. I’m so looking forward to working with Gary and his team, our owners, and all of our great agents and brokers as we continue to ride this tremendous wave of success. I’m rejuvenated and as pumped as I’ve ever been about my future in this incredible industry with a forward-thinking company,” Dahlen adds.

For more information, please contact:

Gord Dahlen

Executive Vice President

Dominion Lending Centres

Cell: 604-219-1994

E-mail: gorddahlen@shaw.ca

Help DLC CMP awards finalists with your popular votes by Friday! CMP is giving readers the opportunity to have their votes counted towards choosing the winners at the 2011 Canadian Mortgage Awards.

This year’s popular vote campaign will apply to nine categories:

• Best Internet Presence (Dominion Lending Centres)
• Best Advertising (Dominion Lending Centres)
• Best Branding (Dominion Lending Centres)
• Best Lender BDM
• Best Newcomer Lender BDM
• Best Lender Underwriter
• Best Newcomer Lender Underwriter
• Best Industry Service Provider
• Best Community Service (Deb White, DLC White House Mortgages, Vernon, BC & Peter & Debra House, DLC Alliance, Belleville, ON)

Click here to link through to the reader poll, which will ask you to pick who you think best deserves to win each category. When the voting closes this Friday, April 15th, the judges will be given the results and your votes will count as 20% of the final decision.

The Bank of Canada boosted its growth forecast Tuesday but threw a curve ball at Bay Street expectations for a July interest-rate hike by warning the “persistent strength” in the loonie could cause even greater headwinds for the economy.

While some analysts still expect the central bank to start raising rates in July after leaving them unchanged on Tuesday at 1%, others said the statement indicated the bank is in no hurry and could wait until the fall at the earliest.

“It will be difficult to pin down when the next hike will be when you have a central bank that takes the currency into account when making its policy decision,” said Avery Shenfeld, Chief Economist at CIBC World Markets. “And we have a currency that’s volatile right now.”

Shenfeld said the central bank would prefer a “softer currency” before it opts to raise rates again. He added that could unfold in July if commodity prices take a breather.

Click here for the full Financial Post article.

Canadians younger than 35 are most intent on buying a home over the next two years, according to a survey released Thursday.

But most of those in this age group, which included people 18 to 34, indicated in the Royal Bank of Canada’s annual home-ownership survey that it would be better to wait until next year to make a purchase.

Fifty-five per cent of respondents in this age category said it makes sense to wait until next year before buying a home, compared to 45% of overall respondents who felt this way.

“In a more balanced housing market, it makes sense that younger and first-time homebuyers are waiting to assess all of their options and do their research before buying a home,” said Bernice Dunsby, RBC’s director of home equity. “It’s also important to get expert advice on what you can afford and leave yourself with a little extra wiggle room in your budget so you don’t become house poor, as home maintenance and lifestyle costs can add up.”

Click here to read more from the Vancouver Sun.

Click here to read more about the RBC poll results.

One year after most banks started using posted rates to qualify conventional mortgages, we’re starting to see some loosening of those policies.

Three weeks ago, Scotiabank lowered its conventional qualifying interest rates, and last week FirstLine did the same.

Lower qualification rates impact debt ratio calculations and make it easier for borrowers to qualify for variable and one- to four-year fixed mortgages.

Click here to read the full article from CanadianMortgageTrends.com.

The latest Royal LePage House Price Survey showed the average price of a home in Canada increased between 3.5 and 4.3% in the first quarter of 2011, compared to the previous year, as markets continued their post-recession recovery.

While the rate of year-over-year price appreciation slowed slightly in the first quarter, home values continued the upward climb, which first began late in the second quarter of 2009.

Low interest rates and a recovering economy continued to fuel activity in Canada’s housing markets over the past year, which has led to country-wide increases in average home prices. In the first quarter of 2011, the national average price of a detached bungalow rose 4.3% year-over-year to $341,355, while standard two-storey homes rose 3.5% to $379,388, and standard condominiums rose 4% to $237,919.

“The rate at which Canadian homes are appreciating may well have peaked for the next year or so,” said Phil Soper, President and Chief Executive of Royal LePage Real Estate Services. “We expect house prices will continue to creep up, but most of the excess demand created by the initial drop in interest rates has been satisfied, and affordability continues to erode slowly, allowing the listings supply to catch up. In most markets, lower single digit percentage increases are more likely for the balance of the year.”

Click here to read more from Royal LePage.

Housing accounts for an immense one-fifth of Canada’s GDP. That makes mortgage debt and housing policy enormously important topics from an economic standpoint.

With the stakes so high, it’s painful to watch critics exhort blanket changes to mortgage rules, based primarily on their opinions in lieu of credible data.

Case in point is this editorial on down payment size. The author, Ted Rechtshaffen, advocates a move to 10% minimum down payments because 5% down payments are riskier. Interestingly, Rechtshaffen sprinkles the word “risk” 10 times throughout his article, without ever attempting to quantify that risk.

His story leads off by proclaiming that CMHC poses a “big risk” to taxpayers. Rechtshaffen asserts, “CMHC would be put in a significantly lower risk position than it is in today (with 10% down payments).”

Click here to see more from CanadianMortgageTrend.com.

Any questions or comments on any of these stories please contact female mortgage broker Shannon Maybin with Dominion Lending Centres

Paul Vieira, Financial Post

Vancouver BC — MortgagesforWomenBC.com Stronger economic growth, propelled by a commodity boom and an improving U.S. job market, will prompt the Bank of Canada to begin rate hikes in July to a 2% level by the end of the year and 3.5% in late 2012, economists at BMO Capital Markets said Wednesday in releasing its updated outlook.

The investment bank’s economics team project first-quarter annualized growth of 4.4%, helping to power the Canadian economy to a 3% advance in 2011 — an improvement from the 2.7% gain BMO Capital Markets had forecast back in January. By year’s end, the country’s unemployment rate should drop to 7.4% from its present 7.8% level.

“The combination of low interests and high commodity prices are fuelling the domestic economy,” said Sal Guatieri, senior economist at BMO Capital Markets.

Consumer spending is expected to ease from 2010 levels, to 3%, but he said exports and a 12.8% surge in non-residential business investment would pick up the slack.

Canada also stands to benefit from an improving U.S. economy, poised to expand 3.2% in 2011, as the job market begins to turn around based on March data, he added. Monthly job gains in the 200,000-plus range could boost confidence among U.S. firms and households, translating into increased spending and investment.

Risks to the outlook include soaring oil prices, which could deliver a “serious blow” to the North American economy; Europe’s sovereign debt woes, with Portugal on the brink of an international bailout and concerns mount over Spain; and any further fallout from Japan’s earthquake and subsequent nuclear crisis.

The Bank of Canada, which issues its next rate decision on April 12, is likely to upgrade its outlook for 2011 based on the data that has emerged, Mr. Guatieri said. In its last outlook tabled in January, the central bank expected 2011 growth of 2.4%, with a first-quarter annualized advance of 2.4% — which is now well below estimates in the 4% and 5% range.

“The economy is growing much faster than the bank expected, implying less inflation-dampening slack,” Guatieri said, adding he expects the Bank of Canada to move up the timetable as to when the output gap — a measure of spare capacity — closes to mid-2012 from the previous call of the end of next year.

“The central bank will now likely move a little more aggressively on rates than planned.”

While Canada inflation remains muted, with the core rate at 0.9% as of February, Mr. Guatieri said BMO expects price increases to pick up steam in the months ahead. The central bank sets rates to achieve and maintain 2% inflation.

“We are at a low point on inflation,” he said. “The central bank can’t delay rate hikes indefinitely or it might face an inflation problem down the road.”

The European Central Bank is set to raise its benchmark rate on Thursday, even though sovereign debt worries have resurfaced, on inflation concerns. http://www.financialpost.com/news/features/might+rate+hike+sooner+rather+than+later/4568528/story.html

Any questions please contact female mortgage broker located in Surrey BC Shannon Maybin

Denise Deveau, Postmedia News · Mar. 30, 2011 |

Cheryl Hutton and Aaron Coates always thought getting a mortgage would be a challenge. But within 18 days of visiting a mortgage broker, they were able to close a deal on a new townhouse in Calgary without a hitch.

Now in their early thirties, both have careers in the theatre, something Ms. Hutton says has been a bit of a sticking point with banks. “In our industry we never fit the paperwork guidelines ‘for the banks.’ For some reason, people don’t think we pay our bills.”

Although it was their first home purchase, Ms. Hutton says it was surprising how easy the whole process was once they had someone who could walk them through it. “He sat us down, told us what our options were, showed us that it was possible and explained all the steps we needed to take. If it wasn’t for him, we may not have made the leap.”

Sorting through a mortgage process and negotiating rates can be overwhelming for first-time and seasoned home buyers alike. That’s why people such as Ms. Hutton and Mr. Coates turn to brokers to do the legwork for them.

Yet mortgage brokers will tell you that a good portion of home buyers out there don’t really understand what they do. “Part of the challenge we have in our world is that people aren’t really sure what a mortgage broker is,” says Gary Siegle, regional manager for Invis Inc., a mortgage brokerage firm in Calgary.

Brokers should not be confused with “rovers,” mortgage specialists attached to a specific financial institution who visit customers outside of banking hours, Mr. Siegle explains.

“They only deal with that bank’s product. A broker, however, is an intermediary whose job is to make a match between a lender and a borrower. We represent the individual, not the bank.”

About 30% of mortgages in Canada are done through a broker, according to Perry Quinton, vice-president, marketing, for Investor Education Fund, a Toronto-based non-profit financial information service.

“The reason more people don’t know about them is because the banks are so visible. It’s easy to gravitate to them when you have your savings accounts, credit cards and investments there already,” Ms. Quinton says.

Going for the comfort factor could cost you however, she adds. “A broker has access to different lenders including banks, and can shop rates and features. A half per-cent may not sound like much but that could make a difference of about $20,000 for a $250,000 mortgage amortized over 25 years. Any little bit helps.”

Mr. Siegle confirms that shopping around can deliver significant savings.

“Let’s take today’s average posted rate of 5.44%, and you get a point off that at your bank. So you think you just got a really great deal. But the vast majority of rates we deal with as brokers would be another 30 basis points lower -around 4.14%. And if you look at preferred deals that don’t offer features such as prepayment privileges, it can get as low as 3.89%. That’s another 25 basis points below what’s generally available.”

The reason for that is simple, he says. “We offer wholesale rates, banks offer retail.”

For anyone considering a broker, Ms. Quinton advises people to do a bit of groundwork first if they have the time.

“It helps to educate yourself about options and what you can afford. Look at all your living expenses, including student loans and credit card debt. Chances are you are understating those.”

Another thing to look into is the different types of available mortgages and features, including interest rates, payment frequency, amortization, cash-back programs and the ability to make lump sum payments.

“Knowing these things before you go in can save you a lot of money,” she adds.

Any mortgage broker you choose should always meet the right licensing and education requirements, so be sure to check their registration.

If you’re not completely prepared, however, that shouldn’t be a concern when working with a good mortgage broker, Mr. Siegle says.

“After all, mortgages are pretty much all we do. So even if you come in cold, good brokers will walk you through the process and ask all sorts of questions,” Mr. Siegle notes.

“You just need to be prepared to answer them openly and honestly so they can get you the best deal possible.”

http://www.nationalpost.com/news/Experts+best+brokering+mortgage/4525573/story.html

Mortgage literacy crucial for first-time buyers

Vito Cupoli, Postmedia News · Mar. 30, 2011 | Last Updated: Mar. 30, 2011 4:04 AM ET

Two years ago, when Michelle Gompf and Jesse Bagelman started thinking about buying a house, they assumed it would be impossible to qualify for a mortgage because of some heavy debt and Mr. Bagelman’s status as a self-employed stone mason.

Rather than give up, Ms. Gompf -now Gompf Bagelman -launched a campaign. “I made up some little posters with a target date called Operation Jesse & Michelle Buy a House. I put them up where we couldn’t miss them -on our fridge, on the bedroom dresser, our laundry, office. I had them everywhere. I just wanted a house to be top of mind. We’re going to figure it out.”

A friend in real estate suggested she speak with a mortgage broker to see how close she was to qualifying for a first-time mortgage. “The broker really worked his magic, and next thing you know we were approved with a monthly payment that was less than the rent we were paying for our basement apartment,” she says.

She knew very little about the mortgage process initially, which is typical for first-time buyers, says mortgage broker Sandra Grywul.

“For the most part, the first-time homebuyer doesn’t know anything about financing a home,” says Ms. Grywul, owner of Always A Mortgage in Toronto.

“It’s funny, because buyers are thinking so much about what neighbourhood they want to live in, how many bedrooms, bathrooms, square footage. But they’re not thinking about what kind of mortgage they want to enter into.”

And buyers shopping for a mortgage have a lot of choices to sift through. Fixed term or open? Variable or fixed rate? Should they use their RRSPs for a down payment?

But Ms. Grywul says those decisions should be made after the buyers have tackled the most important element, which is to understand how much mortgage they can actually afford.

“The bank will look at your credit report but it won’t know if you like to spend $300 for a haircut or eat in an expensive restaurant each night.

“New homeowners go in, they get the mortgage that the bank says they can qualify for, and after two or three months into the house they’re calling around to see if they can do a consolidation or a refinance.

“The joy of their home has completely dissipated because they didn’t take into account all their monthly expenses when figuring out how much they could afford per month on their mortgage.

“I see this all the time. So as part of getting pre-approved for a mortgage, buyers need to be very honest with themselves about how much money they need to live happily,” Ms. Grywul says.

Toronto real estate agent Cameron Weir of Royal LePage, Johnston and Daniel has worked with a number of first-time home buyers.

He says it’s exciting to watch people go from being renters to owners. He says mortgage pre-approval is vital because it allows the buyer to be nimble in an active market.

“A lot of times today we find that there’s more than one offer in on a property. And if you don’t have everything set with a pre-approval, when your perfect property comes up you can’t close the deal without arranging financing first,” Mr. Weir says.

“While you’re working that out, a competitor who has already done his homework might make a firm offer at the same price and unfortunately you’ll probably lose that property.”

Mr. Weir describes the first-time buyer as “very excited, very nervous, lots of questions. It’s the biggest purchase they’re going to make, after all. But along with that, they’re also pretty cautious.”

Ms. Gompf Bagelman’s fear of high lawyer fees made her cautious. She was also concerned about having a stable and predictable monthly mortgage payment, so she chose a five-year mortgage and a fixed interest rate on the house she and her husband took possession of in February.

“With a variable rate I worried that I don’t have a lot of experience with these interest rates and anything could happen,” Ms. Gompf Bagelman says. “But the five-year term gives me security right now. So I have the current safety net and hope for something better when the five years are up.”

She also wondered if the recent mortgage crisis in the United States would complicate her home financing. And while that financial mess did foster changes in some Canadian mortgage regulations that take effect in April, Ms. Grywul says they don’t have any impact on the first-time buyer.

Instead, they focus on the refinancing business and on those who purchase second homes or investment property.

In considering all the details and requirements of financing a home, Mr. Weir says, “the most important thing is to find the right place, at the right price at the right time.”

http://www.nationalpost.com/news/Mortgage+literacy+crucial+first+time+buyers/4525570/story.html