Mortgage and Real Estate MarketWatch: June 2017

Friday 30 June 2017

MarketWatch Newsletter July 2017

July 2017

IN THIS ISSUE

Hello and welcome to the July issue of my monthly newsletter!

Thanks again for your continued support and referrals!

WHAT DETERMINES MORTGAGE RATES IN CANADA? Source: www.StevenPorter.ca
A generation ago, it wasn’t uncommon to see mortgage rates top double digits. But for a good portion of the last decade, the rates have remained historically low. While it’s always hard to predict where mortgage rates will go in the future, it is worth looking at their history and an explanation for what influences their fluctuation.
Variable mortgage rates Variable mortgage rates are determined by commercial banks’ prime rates, which are mainly swayed by the Bank of Canada’s key interest rate. That means an increase in the key interest rate almost automatically leads to a similar increase in variable mortgage rates. The Bank of Canada will typically raises its key interest rate in an effort to combat inflation. Fixed Mortgage Rates Fixed rate mortgage loans are primarily influenced by the yield on Canadian government bonds (bond yields) of corresponding maturity. The correlation between the fixed rates and the yield on five-year Canadian government bonds is almost a near match. This is the case because bond rates represent the benchmark for financial institutions’ cost of funds.
Factors Influencing Bond Yields There are a number of factors that influence government bond yields. Since they are guaranteed by the Canadian government, these bonds are generally among the least perilous assets. Since a large amount of bonds are traded daily in the market, the supply and demand game in the bond market determines their price, and therefore their yield.

	GOING AWAY ON VACATION? PROTECT YOUR HOME AND BELONGINGS WITH THESE TIPS Source: www.independenttraveler.com
		Summer is a popular time for people to go away to exotic locales or closer to home at a cottage on the lake. No matter your destination, it is key to do some due diligence and make sure your home is safe and protected while you are away. Here are some tips:

To give the impression you are at home in the evenings - install timers to turn on your interior lights. However, ensure the times work on a varied schedule as opposed to the exact times each day.
Every would-be robber knows the hide-a-spare-key trick so remove your spare key and instead leave it with a trusted friend, family member or neighbour.
Lock up any valuables including jewellery and other items in a fire-safe proof or at a safety deposit box at your bank.
Shhh! Keep mum on your public social media profiles. Don’t advertise to the world of your absence on your open public social media profiles.

MORTGAGE FRAUD: HOW TO PROTECT YOURSELF WHEN PURCHASING OR REFINANCING A HOME Source: www.cmhc-schl.gc.ca
Beware of promises of "easy money" in real estate. Consumers who knowingly misrepresent information when buying or refinancing a home are committing mortgage fraud.
What is Mortgage Fraud? Mortgage fraud occurs when someone deliberately misrepresents information to obtain mortgage financing that would not have been granted if the truth had been known. This can include: Misstating your position or inflating your income or length of service at your job. Stating you are a salaried/full time employee when you are a contract, part time, hourly or commission-based employee or are self-employed. Misrepresenting the amount and/or source of your down payment. Purchasing a rental property and misrepresenting it as owner-occupied. Not disclosing existing mortgage and/or debt obligations. Misrepresenting property details or omitting information in order to inflate the property value. Adding co-borrowers who will not be residing in the home and do not intend to take responsibility for the mortgage. Another common form of fraud is when a con artist convinces someone with good credit to act as a "straw buyer". A straw buyer is someone who agrees to put his or her name on a mortgage application on behalf of another person. In return for their participation, straw buyers may be offered cash or promised high returns when the property is sold. Often, straw buyers are deceived into believing they will not be responsible for the mortgage payments. Consequences of Misrepresentation Borrowers who misrepresent information and straw buyers who allow a property to be purchased in their name are committing mortgage fraud and will be liable for any financial shortfall in the event of default. They may also be held criminally responsible for their misrepresentation.	What Can You Do to Protect Yourself? To protect yourself and your family from becoming victims of, or accomplices to mortgage fraud, be an informed consumer. This means: Never deliberately misrepresent information when applying for a mortgage. Never accept money, guarantee a loan or add your name to a mortgage unless you fully intend to purchase the property. If you allow your personal information to be used for a mortgage, even for a brief period, you could be held responsible for the entire debt even after the property is sold. Always know who you are doing business with. Use licensed or accredited mortgage and real estate professionals. Never sign legal documents without reading them thoroughly and being sure you understand them. If uncertain, obtain a second legal opinion or, if necessary, the services of a translator. Get independent legal advice from your own lawyer / notary. Talk to your lawyer / notary about title insurance and other alternative methods of protection. Your lawyer will advise you if anyone other than the seller has a financial interest in the home or if there are any outstanding liens or tax arrears. Contact the local provincial Land Titles Office to obtain the sales history of any property you are thinking about buying, and consider having it inspected and appraised. An accredited appraiser will provide the property sales and MLS history. If a deposit is required, make sure the funds are payable to and held "in trust" by the vendor's realty company or a lawyer / notary. Be wary of anyone who approaches you with an offer to make "easy money" in real estate. Remember: if a deal sounds too good to be true, it probably is.

Mortgage Architects

Steven Porter
CRMS ABR SRES
Broker Lic. No. M15001919
Mortgage Agent

P 905-878-7213
C 905.875.2582

Brokerage #12728
14 Martin Street, Milton, ON, L9T 2P9

5675 Whittle Road, Mississauga, ON, L4Z 3P8
Privacy Policy

Tuesday 27 June 2017

MAKE YOUR MORTGAGE WORK FOR YOU

Source: www.cmhc-schl.gc.ca

We can offer you several choices to help find you the mortgage that best matches your needs. Here are some of the most common mortgage options:

Interest Rate Type

You will have to choose between “fixed” or “variable”.

A fixed rate will not change for the term of the mortgage. This type carries a slightly higher rate but provides the peace of mind associated with knowing that interest costs will remain the same.

With a variable rate, the interest rate you pay will fluctuate with the rate of the market.

Amortization Period

Amortization refers to the length of time you choose to pay off your mortgage. Usually, the longer the amortization, the smaller the monthly payments.

Payment Schedule

You have the option of repaying your mortgage every month, twice a month, every two weeks or every week. You can also choose to accelerate your payments. This usually means one extra monthly payment per year.

Mortgage Term

The term of a mortgage is the length of time for which options are chosen and agreed upon, such as the interest rate. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.

“Open” or “Closed” Mortgage

An open mortgage allows you to pay off your mortgage in part or in full at any time without any penalties.

Mortgage Brokers have access to multiple lenders, allowing you to get the best options and prices for your mortgage. They work independently, on your behalf, to search out the best lenders who understand and specialize in mortgage financing.

With a Mortgage Broker, you can be confident we won’t leave you alone to find a mortgage that’s right for you. We’re on your side every step of the way.

Steven Porter. Steven is a licensed Mortgage Agent with Mortgage Architects, a Certified Reverse Mortgage Specialist (CRMS); Seniors Real Estate Specialist (SRES) and Accredited Buyer Representative (ABR). He can be reached at 1-905-875-2582; steven.porter@mtgarc.ca or online at 1800Mortgages.ca

Monday 26 June 2017

Home Renovation Financing Options

There are many different reasons to renovate a home: to save energy (and save on utility bills), to make room for a growing family, to improve safety or increase the resale value of your home, or simply to bring a fresh new look to your home. There are also a number of different ways to finance your renovation. Read on to obtain information for a number of financing options, along with practical advice to consider before starting your renovation project.

Before You Begin

Whether you intend to finance your renovation yourself or borrow money, you should talk to a financial advisor and to your lender before you make firm plans. They can help you understand your options, and advise you on how much you can borrow and even pre-approve you for a loan. This information will help you plan realistically.

Explore Your Options

Your own resources: For smaller renovation projects, you may consider self-funding material costs, especially if you plan to do the work yourself.
Credit card: Likewise, you can use your credit card to pay for materials for smaller renovations. But be careful not to carry the balance for too long; credit card interest rates can exceed 18%.
Personal loan: With a personal loan, you pay regular payments of principal and interest for a set period, typically one to five years. You also have the option of a fixed or variable interest rate for the term of the loan. The interest rate on a personal loan is typically less than that of a credit card. Unlike a line of credit, once you pay off your loan you will have to reapply to borrow any new funds needed.
Personal line of credit: This is another popular choice for financing renovations. It is ideal for ongoing or long-term renovations since it lets you access your funds at any time and provides a monthly statement to help track expenses. A line of credit offers lower interest rates than credit cards, and charges interest only on funds used each month. And, as you pay off your balance, you can access remaining funds, up to the line of credit’s limit, without reapplying.
Secured lines of credit and home equity loans: These options offer all the advantages of regular lines of credit or loans, but are secured by your home’s equity. They can be very economical, since they offer preferred interest rates, however initial set-up costs including legal and appraisal fees usually apply. Lines of credit and home equity loans are usually limited to 80% of your home’s value.
Mortgage refinancing: When funding major renovations, refinancing your mortgage lets you spread repayment over a long period at mortgage interest rates, which are usually much lower than credit card or personal loan rates. This type of financing can allow you to borrow up to 80% of your home’s appraised value (less any outstanding mortgage balance). Initial set-up costs including legal and appraisal fees may apply.
Financing improvements upon-purchase: If you’re planning major improvements for a home you’re about to purchase, it may be advantageous to finance the renovations at the time of purchase by adding their estimated costs to your mortgage. CMHC Mortgage Loan Insurance can help you obtain financing for both the purchase of your home and the renovations — up to 95% of the value after renovations — with a minimum down payment starting at 5%.

Other Considerations and Options

Planning for the Unforeseen

It’s a good idea to set aside a percentage of your renovation funds to cover items not included in your renovation contract, for things you discover you’d like to add once work is under way, like extra or upgraded features, furniture, appliances and window coverings or for contingency. A separate fund lets you make decisions easily, without having to renegotiate your financial arrangements or reapply for new funds.

Grants and Rebates for Energy-Saving Renovations

Across Canada, renovation grants and rebates are available from the federal and provincial governments and local utilities, especially for energy-saving renovations. If you qualify, they may help pay for some of your project’s costs.

CMHC Mortgage Loan Insurance for Energy-Efficient Homes: CMHC Green Home offers a premium refund of up to 25% to borrowers who either buy, build or renovate for energy efficiency using CMHC-insured financing.
Provincial and Municipal Entities Offering Grants and Incentives
Rebates and Incentives for Selected ENERGY STAR® Qualified Products in Canada

This content is provided for informative purposes only. It does not constitute or substitute financial or other advice. CMHC assumes no liability in connection with the information provided.

Tuesday 20 June 2017

SHOULD YOU LOVE IT OR LIST IT?

SHOULD YOU LOVE IT OR LIST IT? Source: www.mortgagearchitects.ca
The results from a recent survey shows renovation spending reached close to $70 billion – an especially impressive figure as it is $20 billion more than Canadians spent on new homes in the same year.
If you are considering doing some sizable renos to your home (not talking about replacing your door knobs) to appeal to buyers, it may be tempting to do it yourself, however it is best to hire a reputable professional. A job not done correctly can cost you more in the long run. In addition, large-scale home renovations (additions, full-kitchen renos, etc.) do require significant capital. A great option is to use your existing home equity to invest in renovations. Talk to me regarding your financing options. Home Renos That Give You The Most Return On Your Investment Bathroom & kitchen renovations 75%-100% Exterior & interior painting 50%-100% Basement renovations 50%-75% Window/door replacement 50%-75% Flooring upgrades 50%-75%

Tuesday 13 June 2017

HOW TO DEAL WITH MORTGAGE PAYMENT DIFFICULTIES

HOW TO DEAL
WITH MORTGAGE PAYMENT DIFFICULTIES

Source: www.cmhc-schl.gc.ca

When unforeseen financial circumstances impact your ability to make regular mortgage payments, it’s important for you to take quick action. With early intervention, cooperation, and a well executed plan, you can work together with
your mortgage professional to find a solution to your financial difficulties.

What Can I Do to Help?

If you find yourself facing financial difficulties, as a result of job loss, family income reduction, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.

Talk to your mortgage professional

To increase the chance of successfully managing your financial situation through early intervention, call your mortgage professional at the first sign of financial difficulty;
Ask the mortgage professional about information on the options available for managing your financial situation; and
Keep the mortgage professional informed as circumstances evolve

Clarify the financial picture

In order to help your mortgage professional fully understand your financial situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.

Stay informed

The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions.

Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counseling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca (Industry Canada) and search for “Take Charge of Your Debts”.