Mortgage and Real Estate MarketWatch: 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.