For decades, most home mortgage loans made in Canada were made by the big banks and other “A” lenders and guaranteed through mortgage default insurance backed by the government’s housing agency, CMHC. In late 2016, government regulators tightened the requirements for borrowers qualifying for that insurance, resulting in more people doing without it.
Approximately three-quarters of the mortgages made by federally regulated banks last year didn’t have government backed mortgage default Insurance. Nearly half the nation’s $1.5 trillion CDN home loans are now uninsured against default according to Bloomberg News. For lenders, consumers’ growing demand for loans with no government backed insurance creates a problem .... mortgage funding.
“The market has to come up with a solution. Otherwise there will be no financing available for mortgages.” says Moti Jungreis, head of global markets at Toronto-Dominion Bank’s TD Securities
Under the new Canadian mortgage rules, it could make sense for more lenders to package uninsured mortgages into bonds, which over time could become a cheaper and more reliable form of funding while giving a boost to the Mortgage bond market.
Without that backing, banks and other lenders will have to rely on deposits, asset-backed commercial paper, and other forms of funding that can be more expensive and less accessible, particularly for smaller, non-bank lenders. That’s why it could make more sense for lenders to package uninsured mortgages into bonds, which over time could become a cheaper and more reliable form of funding.
Is this an immediate Fix? “NO”. This solution will take time for both lenders and investors to learn and adapt. But there is a light at the end of the tunnel.
Adapted by Steven Porter, Mortgage Agent with Mortgage Architects.
Steven can be reached through his website at www.1800Mortgages.ca
Showing posts with label #MortgageArchitects. Show all posts
Showing posts with label #MortgageArchitects. Show all posts
Friday, 5 January 2018
Tuesday, 8 August 2017
MarketWatch Newsletter - August 2017
August 2017
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Hello and welcome to the August issue of my monthly newsletter!
Thanks again for your continued support and referrals!
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Source:
www.mortgagearchitects.ca
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Dust off the picnic table and fire up the grill! But before you arrange a backyard party for your friends and family, check out these tips below to help set the stage for your best backyard bash yet.
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1. Put It On Cruise Control
By setting up a well-stocked buffet table and drink station, the party will essentially run itself. Everyone can serve themselves and you’ll also create a spot for them to mingle.
2. Keep Everyone Comfortable
A good way to keep guests outside comfortably throughout the day and into the night is to provide ample supply of things like water, sunscreen, and bug spray. As night approaches, a few light blankets will help keep the chill away.
3. Bring the Inside Out
If you really want to be ‘entertaining’ you should consider bringing your sturdy, indoor utensils and dishes outside for the party instead of using disposable ones.
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4. Get the Yard in Order
Whether you’re having a few close friends or the entire neighbourhood over, tidy up the yard and patio area so everything looks neat.
5. Consider the Food Ahead of Time
A buffet is great for keeping the flow of the party moving, but it’s also wise to think of the menu and how to prep it in time. You’ll need to know about food allergies. You may want to prepare foods ahead of time, and you might even want to make the sides a potluck to ease your workload.
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Source:
www.mortgagearchitects.ca
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Are you contemplating hardwood floors, a new kitchen or energy efficient solutions for your
existing or new home? Are you wondering how to pay for this renovation project? Take a look at these affordable financing solutions to renovate the home of your dreams!
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Mortgage Refinancing
Despite a few increases of late, you can still take advantage of record low interest rates and spread your renovation financing repayment over a long period of time by refinancing your mortgage.
Benefits:
Financing improvements upon-purchase
Finance your renovation project at the time of a new purchase by adding the estimated costs to your mortgage with CMHC Mortgage Loan Insurance. You can obtain financing with only 5% down payment for both the purchase of your home and the renovations for up to 95% of the value after renovations!
Benefits:
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Secured Line of Credit & Home Equity Loans
Use a secured line of credit or home equity loan to pay for your renovation. Securing your renovation loan against the equity in your home can typically be up to 80% of the property value; accessible at any time.
Benefits:
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Talk to me today to review your renovation financing options!
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Source:
www.mortgagearchitects.ca
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Summer can bring humidity and high temperatures. Remember to keep it cool to ensure a happy and healthy summer. Here are some tips to cool off this summer
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Close your blinds
Utilizing curtains can save you up to 7 percent on your bills and lower indoor temperatures. This is especially effective for south- and west-facing windows.
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Use a fan instead of turning on the AC
Fill a mixing bowl with ice and position it in front of a large fan. The air whips off the ice at an extra-chilled, temperature.
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Start grilling
Your stove and oven bring excess heat into your home. A summer time BBQ is the perfect way to gather with friends and keep the heat outside of your home.
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Brokerage #12728
14 Martin Street, Milton, ON, L9T 2P9 |
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Tuesday, 1 August 2017
Mortgage Fraud - How to protect yourself
MORTGAGE FRAUD:
HOW TO PROTECT
YOURSELF WHEN PURCHASING OR REFINANCING A HOME
Source:
www.cmhc-schl.gc.ca
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Beware of promises of "easy money" in real estate. Consumers who knowingly misrepresent information when buying or refinancing a home are committing mortgage fraud.
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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:
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.
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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:
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Here’s a quick and easy way to guard title to your property and avoid hefty legal fees.
When you buy a home, what you're buying is the title to the property, which means you own the property. It's important to know that the title is valid so you'll be able to sell your home in the future or take out a mortgage on it.
Traditionally, homebuyers have relied on lawyers for the legal work involved in a purchase transaction, including registering you as the owner in the land registry system. Over the past decade, a new alternative has become available called title insurance.
Title insurance protects you against any losses that result from undetected or unknown title defects for as long as you own your home.
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Tuesday, 25 July 2017
Going On Vacation?
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GOING AWAY
ON VACATION?
PROTECT YOUR HOME AND BELONGINGS
WITH THESE TIPS
Source:
www.independenttraveler.com
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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:
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Tuesday, 18 July 2017
What Determines Mortgage Rates in Canada?
Source:
www.StevenPorter.ca
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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.
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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.
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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.
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Friday, 30 June 2017
MarketWatch Newsletter July 2017
July 2017
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Hello and welcome to the July issue of my monthly newsletter!
Thanks again for your continued support and referrals!
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WHAT DETERMINES MORTGAGE RATES IN CANADA?
Source:
www.StevenPorter.ca
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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.
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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.
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GOING AWAY
ON VACATION?
PROTECT YOUR HOME AND BELONGINGS
WITH THESE TIPS
Source:
www.independenttraveler.com
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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:
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MORTGAGE FRAUD:
HOW TO PROTECT
YOURSELF WHEN PURCHASING OR REFINANCING A HOME
Source:
www.cmhc-schl.gc.ca
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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:
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:
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Brokerage #12728
14 Martin Street, Milton, ON, L9T 2P9 |
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