Mortgage and Financing

Changes in mortgage financing coming soon!

2010-04-07T22:51:00Z

April 19th 2010 marks a new start to mortgage financing rules, home buyers looking to purchase a new home will be facing tougher qualification standards:

The changes will be limiting home buyers from getting 95% LTV (5% DownPayment) to 90%LTV (10% DownPayment)
All Buyers will face the same qualifications as a 5 Year Fixed Mortgage, regardless if they choose a lower or looser term

The Market is very strong at the moment and these new rules are to prevet any sort of housing bubble or economy downturn.

Please call us to get your pre-approval before the deadline.

CMHC Self-Emplyed

2010-02-19T22:37:00Z

Providing traditional forms of documentation to substantiate income can be difficult for many self-employed and commissionbased borrowers. To streamline the home financing process for self-employed borrowers with or without traditional third party validation of income, CMHC offers two mortgage loan insurance options.

Features

Available for purchase and refinance
Self-employed borrowers with documentation to support their income have access to all existing 1 – 4 unit CMHC Mortgage Loan Insurance products subject to the same product criteria and insurance premiums as salaried borrowers

Borrowers without traditional forms of income validation can access CMHC insured financing for purchase of up to 95% loan-to-value ratio (90% for refinance) for a 1 – 2 unit owner-occupied property

Borrower’s income tax payment status: lender simply has to ask borrower if their income taxes are current, no documentation is required for borrowers who have difficulty providing traditional third party income validation

Flexible financing options - single advance, progress advances and extended amortization periods are available

CMHC Newcomer Program

2010-02-19T22:34:00Z

Newcomers to Canada play an increasing role in Canada’s future population growth, creating new market opportunities. CMHC insured financing is available to borrowers with permanent and non-permanent residence status, helping newcomers to realize their dream of homeownership in Canada.

Features

Newcomers with permanent resident status have access to all CMHC Mortgage Loan Insurance products (subject to product specific eligibility requirements).

For permanent residents, where there is limited Canadian credit history and where foreign credit bureaus are not available, CMHC continues to consider alternative sources of payment history for Loan-to-Value ratios between 80.01% and 95%

Newcomers with non-permanent resident status have access to CMHC insured financing of up to 90% loan-to-value ratio for the purchase of a 1 unit owner-occupied residential property

No additional fees or premiums as a result of residency status - standard product specific premiums apply
No minimum period of residency required

Get Your Mortgage Pre-Approved

2010-02-19T22:30:00Z

search for your home easier and less time-consuming.

To get your mortgage pre-approved, you will need:

your personal information, including identification such as your driver’s license;
details on your job and proof of your salary;
information about your bank accounts, financial assets, current loans and other debts;
how much your down payment will be and where the money is coming from; and
Proof that you have enough money to cover the costs of closing the sale - usually between 1.5 - 4 per cent of the cost of the house.

Trouble Qualifying for a Mortgage?

Sometimes, after everything has been taken into account, you may find that you can’t afford the house you want. If that happens, you may want to:

Pay off some loans first.
Save up a larger down payment.
Revise your target house price.

The Importance of Your Credit Rating

Your credit history gives mortgage providers information on your financial past and how well you have paid your debts and bills.

If you have no credit history, it is important to start building one. This can be done, for example, by applying for a credit card.

If you have a bad credit history, you can still qualify for a mortgage as long as you have a guarantor – a person who meets the bank’s or credit union’s requirements, has a good credit history, and can guarantee your loan.

Income, Home Price and Down Payment

The table below gives you an idea of how much money you might be able to spend on a house, depending on your income and expenses.

New Mortgage Rules

2010-02-19T22:27:00Z

Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010:

1.    All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;

2.    The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home;

3.    Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.
If you are planning to purchase a house in next couple of months, please contact us for a pre-approval.

We will continue to keep you informed of any new developments.

Banks to increase their rates sooner than later

2009-10-08T23:26:00Z

Some bankers told me that the Canadian Banks will increase their posted rates by 100 basis points in or around Oct 16, 2009.

And on the same subject the FEDs, may increase the overnight rates little by little starting new year. Australia's incerase is a sign for other countries to do the same.

Eased mortgage rates point to consumer-driven rebound

2009-04-07T00:51:00Z

U.S. Federal Reserve Chairman Ben Bernanke is delivering what he promised five months ago, record-low mortgage rates and a refinancing boom that's putting cash in consumers' pockets.

Fixed 30-year mortgage rates fell to a record low for the second consecutive week last week, hitting 4.78%, Freddie Mac said on Thursday in a statement. The rates are the lowest in records dating to 1971, and come after Bernanke told Congress in November that helping the most creditworthy borrowers was essential to reviving the economy.

Mortgage applications in the U.S. rose for the fourth straight week last week as a decline in borrowing costs spurred homeowners to refinance, while purchases of new houses unexpectedly rose in February. The Fed's effort to bring down fixed rates may give consumers as much as US$25-billion, said Mark Zandi, chief economist of Moody's Economy.com.

"It certainly gives further fuel to consumer spending," said Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies in Cambridge, Massachusetts. "It puts more money into circulation."

The extra cash may help boost first-quarter consumer spending by 1% to 1.5%, said Barton Biggs, managing partner at New York-based hedge fund Traxis Partners LLC. Consumer spending accounts for about two-thirds of the U.S. economy.

Creditworthy Borrowers

Bernanke signaled the Fed's effort to bring down fixed mortgage rates in Nov. 18 testimony to the U.S. House of Representatives' Committee on Financial Services.

"It is imperative that all banking organizations and their regulators work together to ensure that the needs of creditworthy borrowers are met," he said.

One week later, the Fed said it would buy up to $500-billion in home-loan securities, causing the biggest one-day drop in mortgage rates in at least seven years, according to Bankrate.com. On March 18, the central bank almost tripled the size of the program to up to $1.25-trillion in purchases during 2009. The intent is to lower rates and make real estate financing easier to get, the Fed said.

The plan to buy mortgage bonds this year is succeeding where US$11.6-trillion of government lending, spending, and guarantees so far have failed.

‘Successful Effort'

"This has been the most successful effort, at least so far in this crisis, to shore up the economy," said Zandi.

Bernanke's mortgage purchase program may help curb a recession that is in its second year and being driven by the highest jobless rate in a quarter century and shrinking household wealth.

"If you throw enough money at one credit market, you will bring down the price," said Gerald O'Driscoll, a senior fellow at the Cato Institute and former vice president of the Dallas Federal Reserve. "They are targeting the mortgage market in an attempt to speed the process of establishing a floor in the price of housing."

Homeowners who refinance with a half-point drop in fixed rates may save $150 a month on a $300,000 mortgage, said Stephen Stanley, chief economist at RBS Securities Inc. in Greenwich, Connecticut, and a former Fed economist.

Home Prices

Cheaper financing may also help spark a turnaround in the housing market. Sales of previously owned homes rose 5.1% to 4.72 million at an annualized pace in February from the prior month as low mortgage rates spurred demand, the National Association of Realtors said. The NAR's affordability index rose to a record in January, helped by lower home values and mortgage rates. The median U.S. home price in February was $165,400, the NAR said in a March 23 report, down 28 percent from its 2006 high.

Bernanke cited lower mortgage rates in testimony in February as evidence that Fed policies were working, noting that rates had fallen "nearly 1 percentage point" since the program was announced.

On April 1, Federal Reserve Bank of Cleveland President Sandra Pianalto said the Fed's program was resulting in "encouraging signs" for the economy. Besides falling rates, "we are also beginning to see a resurgence in refinancing activity in the residential mortgage markets, spurred on by these lower rates," she said.

The bankers' group boosted its forecast for 2009 home-loan originations by US$800-billion to US$2.78-trillion last month as a wave of refinancing and low interest rates spur homeowners to seek out new loans. Refinancing will increase to US$1.96-trillion in 2009 and purchase originations will total US$821-billion, the group said.

The London interbank offered rate, or Libor, for three- month dollar loans dropped to 1.17% on Thursday, down from 1.43% at the start of the year, showing banks have become more willing to lend.

TED Spread

The so-called TED spread, the gap between what banks and the Treasury pay to borrow money for three months, shrank to 96 basis points from 1.35 percentage points on Dec. 31. It touched a yearly low of 91 basis points on Feb. 2. The gauge reached a high of 4.64 percentage points in October, up from 1.35 percentage points on Sept. 12, the last trading day before Lehman Brothers Holdings Inc. filed for bankruptcy.

U.S. home prices fell 6.3% in January from a year ago, the smallest decline in five months, according to the Federal Housing Finance Agency in Washington.

"We have seen evidence that home sales are bottoming," said Jim O'Sullivan, senior economist with UBS Securities LLC, in Stamford, Connecticut. "This should be positive."

Providing flexible mortgages on “A”, insured business with competitive rates

Future Financial Inc. merged with MorCan Financial Inc

2009-03-07T00:36:00Z

Finally it happened. The company that I work with as a mortgage specialist merged with a larger company. Yeh, I like it, as this will provide better support and network to me and better services to my clients.

check their web site out: www.morcanfinancial.ca

Have any questions? specially regarding financing for commercial or construction deals, equity lending or loan for business, contact me.

Financing got cheaper and easier!

2009-02-04T18:32:00Z

Hi,

These couple of days I feel like the financial companies are going back on track and finally trying to do business as usual.

Of course there are some changes, as the new market specifications require them to have a good appraisal, and check the Buyer's credential more carefully, but eventually, they are giving out money again.

I hust got emails from private lemneders and B and C lenders that they started to reduce their APR's and LTVs as well.

Anyways, money market is openning up, the rates are so cheap and seller's are willing to negotiate, all these together, makes it a perfect situation for upgarding Buyers.

Good luck Buyers, and good hunting.

Be Mortgage Free in Less-than Half the Time

2009-01-08T20:23:00Z

Through an innovative program called the Money Merge Account system, homeowners across the nation are paying off their mortgages in as little as 1/2 to 1/3 the time. Become one of the thousands of United First Financial clients paying off a home mortgage quickly without increasing monthly mortgage payments, and with little to no lifestyle changes. Request a free Money Merge Account Analysis Report from me today.

Check it out here!

Making Extra payments

2009-01-08T20:13:00Z

Paying extra amounts on your mortgage can make a big interest saving over time. When we select a mortgage company, privilege payments options are something that we look for.

A 20% privilege payment will allow you to pay off up to $20,000 per year on a $100 000 mortgage. It is important that the privilege payment also be flexible to allow you to pay smaller payments on the mortgage and as often as you wish. An extra $1000 periodically paid on a mortgage can help you become mortgage free faster.

Bi-weekly and weekly payments

2009-01-08T20:11:00Z

Most mortgages have the option to allow payments to be made on a weekly or bi-weekly basis.

This option may be desirable for two reasons. The first is it can save you money as you can expect to pay off your mortgage about 4 years sooner. This can save you dramatically over the life of your mortgage. The other reason why these options are so popular is that if your employer pays you on a weekly or bi-weekly basis, you can simplify your budgeting by making the payment line up with the way you paid.

Advantages of Bigger Down Payments

2009-01-08T20:10:00Z

As mentioned before, when you put a 25% down payment on your purchase you can avoid the CMHC premium.

More importantly the larger the down payment, the lower the amount of interest you will pay over the life of your mortgage.

It is important to note that it may not be wise to stretch yourself to increase your down payment and end up borrowing on credit cards or a line of credit at a higher rate.

Reducing the CMHC fees on your purchase

2009-01-08T20:08:00Z

When you require a mortgage for more than 80% of the purchase price of a property, that mortgage must be insured by Canada Mortgage and Housing (CMHC) or GE Mortgage insurance.

The premium charged by these company`s decreases as the down payment increases. When you finance your property at 95%, a premium of 3.75% is added to the mortgage. By increasing the down payment to 10% of the purchase price the premium can be reduced to 2.5%. If you can put down 20%, you can avoid any additional insurance fee.

Depending on your situation there are ways that you can structure this financing to avoid the CMHC or GE insurance premium.

For more information please contact your Mortgage Broker.

Short Term Rates vs. Long Term Rates

2009-01-08T20:07:00Z

The options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6-month terms to 10 year terms.

Taking a variable or floating rate mortgage can have savings. Typically the shorter the term or guarantee of the rate, the lower the rate will be. This does not always happen, depending on the market place and the economy, but history has shown that short-term rates tend to be lower than long-term rates. The up side of variable rate is the strong potential for interest rate savings.

The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision. Make sure you talk to an expert when you are making this decision.