Commercial and Residential Mortgages

Bank of Canada Raises Rates

2010-06-01T12:01:00.000-07:00

The Bank of Canada raised the prime rate by .25% today. But it's not certain if this trend will continue, due to economic uncertainty in Europe.

The variable rate is still the best way to go, in my opinion.

Housing Still Going Strong

2010-05-26T07:02:00.000-07:00

Ontario's hot housing market is showing few signs of letting up, causing housing affordability measures and property values to reach record highs in many parts of the province during the first quarter of 2010, according to the latest housing report released today by RBC Economics Research.

"Despite an increased supply of homes on the market, prices continue to rise which has undermined affordability," said Robert Hogue, senior economist, RBC. "While still well below peak levels, most of the housing affordability measures now stand above their long-term average, suggesting that more and more buyers are being priced out of the Ontario market."

Some feel that the implementation of the HST on July 1 is causing the frenzy. The HST will add to the cost of buying & selling homes.

Interest Rates to Rise June 1?

2010-05-25T13:28:00.001-07:00

Will the Bank of Canada raise the prime rate on June 1? A month or so ago it seemed almost certain they would. But with economic challenges around the world not getting any better, no one can say for sure what will happen June 1. Personally I feel that we are in such a strange time, economically speaking, that nothing is certain anymore. However, I do feel that long term, interest rates won't rise to high levels. With the Baby Boomers starting to retire, this will bring along its own set of economic challenges that have yet to be seen!

How to Save Thousands & Thousands of Dollars on Interest Payable

2010-05-12T13:16:00.000-07:00

My team is happy to announce a way for homeowners to pay off ALL their debt, including their mortgage in record time. This exciting program will show you how to turn interest payments that you're legally obligated to pay your bank, into principal payments instead.

You do not require any extra cash in the bank or any kind of credit line in order to utilize this program. As a matter of fact, our goal is to help you get rid of that credit line, and all the rest of it, way sooner than you had ever thought possible.
This copyrighted program has literally helped thousands upon thousands of homeowners achieve financial freedom for over 20 years now.

For more information or to see if you qualify, please contact us.

Bank of Canada Resetting it's Qualifying Rate for 5 Year Fixed Mortgages

2010-03-31T11:39:00.000-07:00

Hi everyone,

The Bank of Canada 5 year posted has not moved yet but is expected to be reset at 5.85% soon. This will be the qualifying rate for high ratio mortgages with less than 5 year terms or with variable rates after April 19.

On another note, I’m proud to say that once again MI and Invis have been ranked first overall in production volume in the Canadian mortgage brokerage industry by Filogix.

Our brokers stand out among their industry peers – our average volume per broker is at it’s highest level ever. This, I believe, confirms our status as the preferred brokerages for Canada’s most professional, dedicated mortgage brokers.

All the best,

Fixed Interest Rates on the Rise!

2010-03-29T07:24:00.000-07:00

Good Morning.

The Royal Bank just has increased rates on 3, 4 & 5 year fixed mortgage rates by 20, 40 and 60 basis points respectively. Since all mortgage lenders base spreads on the same bond market it is likely other lenders will follow shortly.

If you are considering a purchase, renewal or refinance, there is still time to beat this rate increase. Call us to get a free, no obligation quote.

Have a great week everyone.

The New Mortgage Rules

2010-03-26T07:27:00.000-07:00

Hello everyone,

We have been tracking the recent mortgage rule changes announced by the Finance Ministry, as well as the new underwriting guidelines being put into practice by CMHC and Genworth (and anticipated to be the case with AIG). We are watching closely to see the final outcome of these new practices.

While these changes will serve to uphold the overall integrity of our financial system in Canada, we are concerned that they could be intrusive and unnecessarily impact on certain mortgage transactions.

Here is a brief rundown of the changes:

What’s changed in terms of qualifying for a mortgage?

As of April 19, borrowers applying for a variable-rate mortgage or a fixed-rate mortgage with a term of less than 5 years must qualify based on the Bank of Canada’s five-year fixed posted mortgage rate. Note that 5 year terms can be qualified at the contract rate.

What do rental property owners need to know about the recent changes?

A minimum down payment of 20 per cent will be needed for government-backed mortgage insurance on non-owner-occupied properties such as rental properties.
There are also changes in how much of rental income can be used when qualifying for financing – CMHC and Genworth have indicated that now 50 per cent of the rental income will be added to the borrower’s income, down from 80 per cent rental offset from the payment that will be used when calculating the borrower’s TDS.

What about the self-employed?

CMHC has stated that as of April 9, self-employed individuals who are applying for a stated-income mortgage will now have to put down at least 10 per cent, up from 5 per cent today (those self-employed with verifiable income can still do 10 per cent down payment).
CMHC has also tightened some of the rules around who can qualify for their stated income self employed product. Borrowers that have been self employed for more than 3 years will now have to qualify based on income declared to CRA and will have to provide adequate income confirmation. The same applies for those earning income through commissions. CMHC’s stated income self employed product is now aimed more at those who have recently become self employed and have difficulty providing documentation.

If you have questions about any of what was discussed, please feel free to contact me for any clarifications, free of charge.

Stay tuned for some exciting spring promotions we are doing. Have a great weekend!

Donna

New Mortgage Rules to be Implemented April 19, 2010

2010-02-17T07:50:00.000-08:00

Hello everyone.

Jim Flaherty has, amid rabid speculations, just yesterday unveiled his plans to implent new rules on mortgage financing. They are the following:

1. Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.

2. Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.

3. Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

These new rules come into effect onApril 19, 2010. So, basically, if someone is interested in a variable rate mortgage, they will have to qualify for a 5 year fixed rate with that Lender in order to obtain the variable rate. Economists say that this will not hinder families from purchasing a home, it just means that their household income may have to earn 5-8,000 more to qualify in some instances. Statistics have shown that those in a variable rate mortgage tend to save money in the long run, without locking in, due to the lower rate. Still, these should give the consumer added confidence when applying for a variable rate mortgage.

This brings me to my next topic: The future of interest rates. There’s been a whole lot of speculation in the media as far as what interest rates will do in the coming months. Some have suggested that come June, 2010, prime will rise, and rise sharply. However, Mark Carney has said, through his advisor, that it would be reactionary to raise rates any time soon, and even hinted that the answer may be to keep them low even beyond summer 2010.

David Rosenberg, chief strategist for Gluskin Sheff, wrote, in his Jan. 27 article in Report On Business, “For the Bank of Canada to raise rates before the middle part of 2011 would be totally inconsistent with its current forecast.” Regarding the predictions for a “blowout” reading on 4th quarter GDP, he says, “…for anyone who thinks a big number is likely to help lock in a rate hike this summer, I would suggest that is not going to happen. In fact, my view is that the Bank of Canada will not be raising rates until mid-2011 - at the earliest….Until then, homeowners opting for variable rate mortgage financing will likely not have to face the interest rate music.”

I tend to side with Mr. Rosenberg, and I think that what the Finance Minister has done is prevent families from overextending themselves in some circumstances. This may prompt Canadian families to act, with added assurance, when it is in their best interests, when considering a purchase or refinance.

Although many Lenders already practice the rules that are going to be implemented, I believe the market is driven largely by comsumer confidence, fuelled by the media. Having said that, what can positively effect consumer confidence will inevitably have a positive, trickle down effect on the stability of the housing and mortgage market.

Donna on the Airwaves!

2009-11-23T05:59:00.000-08:00

In case you missed it, I was on the Drew Marshall show on Joy 1250 on this past Saturday afternoon. Drew talked to me about the mortgage industry and, specifically, about mortgage brokering and my services. In case you did miss it, I'll be getting an audio clip to put on my website.

I also wanted to mention, another incentive to purchasing as a first time home buyer is the government's land transfer tax rebate for first time home buyers. The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. Hope this helps.

Have a great week!

Federal Budget - Advantages to Purchasing or Refinancing

2009-11-04T11:19:00.000-08:00

Home, Sweet Home

The federal budget offers several measures of interest to people who plan to renovate or buy a home. Here's how they could theoretically work in unison for a first-time buyer or those considering a refinance:

Step 1: Claim the First-Time Home Buyers' Tax CreditDetails: Offers tax relief of up to $750 to first-time buyers to help defray closing costs on their purchase.

Step 2: Take advantage of changes to the federal Home Buyers' ProgramDetails: You can take up to $25,000 out of your RRSP to buy a first home and pay no taxes, up from $20,000

Step 3: Renovate your new home with help from the temporary new Home Renovation Tax CreditDetails: Claim up to $1,350 in tax relief for upgrades to your home done before Feb. 1, 2010; available to everyone, not just first-time buyers; applies to renos costing $1000 to $10,000

Step 4: Get energy efficient using the ecoEnergy Retrofit program, which was expanded in the budgetDetails: Get a grant of up to $5,000 for changes to your home that add to energy efficiency: you can also claim the home reno tax credit for these upgrades

Have a great week, everyone!

Lower Rates and More Flexible Lending!

2009-08-27T23:25:00.000-07:00

Hello everyone. As summer time winds down I hope everyone had a chance to kick back and enjoy some much-deserved holidays with family and friends amongst all the hustle and bustle that we tend create for ourselves throughout the year.

Some exciting news: variable premiums have dropped. You can now get (oac) a variable rate mortgage for 2.4%, ranging from a 33, 36, or 48 month term. This is becoming VERY popular, as you can take advantage of already low interest rates, you are not locked in for 5 years so that you can renew for an even better variable (if variable is the way you wish to go) or you can lock into a fixed term once they start to rise. They have recently fallen, by the way, and there are GREAT mortgages for 3 and 4 year terms 3.39% and 3.85% respectively (fantastic value!).

Below is a recent article from the Financial Post about the housing market which, by all accounts, is recovering steadily, with growth in almost all areas of the country. One point which diverges from several other sources, however, is the last comment about BOC keeping interest rates down - most of what I've read has stated that prime likely won't rise even beyond BOC's promised date of mid 2010 - but who knows for sure. Have a great weekend everyone!

John Morrissy, Financial Post Published: Wednesday, August 26, 2009

OTTAWA -- The worst is over for North America's beleaguered housing markets, with a steady stream of data out of Canada and the U.S. indicating the recovery is at hand, economists say.

"A similar pattern in both countries is unmistakenly suggesting we've not only bottomed in housing, but we're on the way back up," said TD Bank chief economist Don Drummond.

Canada's already brightening picture was helped along Wednesday by a report showing housing prices in major markets across the country jumped 1.5% in June, building on May's 2% advance.

The rebound in prices was evident even in most of Canada's hardest hit urban markets, like Toronto and Vancouver, the Teranet-National Bank report showed.

For National Bank senior economist Marc Pinsonneault, that means "the worst of home-price deflation in Canada is behind us," he said Wednesday.

"The improvement is consistent with the huge improvement in market conditions in most of the major cities in Canada," which show sales resales rising sharply - up 18% in July alone - and listings on the decline, Mr. Pinsonneault said.

The numbers out of the U.S. are also good, at least relative to bone-jarring declines that marked the subprime meltdown and drove housing prices 31% below their peak in 2006, Drummond said.

On Tuesday, the S&P/Case-Shiller composite index showed home prices in the U.S. also bouncing higher, for the second straight month.

And on Wednesday, the U.S. Commerce Department announced new-homes sales surpassed expectations by increasing 9.6% to 433,000 units in July, the biggest increase in more than four years and the highest level of activity in 10 months.

"The housing market has clearly turned the corner," BMO Capital Markets economist Jennifer Lee said in an interview.

"The items supporting a housing recovery have been working in tandem over the past while, and they are still going strong, like the Energizer bunny."

Renewed strength in the Canadian market was evident in four of six major markets tracked by the Teranet-National Bank survey. Vancouver posted its first price gain after 11 months of declines, up 1.6%; Montreal posted its fourth straight monthly increase, up 1.2%; Ottawa gained 2.1%; and Toronto recorded its second straight month of gains, up 2.3%.

Halifax and Calgary were the only laggards, each slipping 0.2%. For Calgary, it was the 12th consecutive losing month.

Economists were quick to point out that while the trend has shifted, markets on both sides of the border are way off previous peaks. In the U.S., for instance, about 600,000 new homes are being built annually, compared with the 2.3 million homes at the peak of the cycle.

Current conditions in Canada have created a seller's market, said Pinsonneault, although he expects greater balance to return as higher prices draw more properties onto the market.

Mortgage rates, meanwhile, won't rise over the next 12 month by more than 50 to 75 basis points from today's 5.85% posted rate on fixed five-year mortgages, he said.

One uncertainty is whether the Bank of Canada can hold lending rates steady, as promised, until the middle of next year, economists say.

Great New Resource For First Time Home Buyers

2009-08-06T05:27:00.000-07:00

Hello Everyone,

Canada's most up-to-date website for first-time homebuyers is now up and running at yourfirsthomecanada.com -- this is a great resource.

First-time buyers can get the latest in property news, free downloads and expert advice with the click of a button. Current feature articles include how to tell if you're ready to purchase, how to begin searching for your dream home, the advantages of home inspections and a primer on mortgages. Also look for an exclusive Q&A from David Chilton, author of The Wealthy Barber, who discusses how buying your first home is crucial in attaining long-term financial freedom.

Yourfirsthomecanada.com also includes a comments section and a soon-to-launch forum for prospective homebuyers. The site is powered by The First-Time Homebuyers Guide, a sister publication of CMP magazine and Canadian Real Estate magazine, which brings property investors in-depth market information.

Hope this helps and hope everyone has a great week!

The Canadian Housing Market - Fact and Fiction

2009-07-03T13:55:00.000-07:00

Happy Canada Day, everyone! There has been a lot of debate in the last few months about the state of our economy and how closely our economy follows our neighbours to the south. Of late, more and more people are realizing how different the conditions are in these 2 countries.

Present conditions and forecasts (the realistic ones) are not similar. This article attributes a lot of the confusion to "lazy journalism". I couldn't agree more. This article was recently published in the National Post:

Posted: June 29, 2009, 1:00 PM by NP Editor

"Here is what is hopefully one of the last of a once-robust breed - The Apocalyptic Canadian Housing Market Story:

Judging by the latest real estate data, the Canadian housing market could scarcely be better. Average home prices are up more than 16 per cent this year, and in May they hit an all-time monthly high, according to the Canadian Real Estate Association. By those numbers, Canada didn’t just sidestep the housing market crash that continues to plague the United States, it sailed right through it virtually unscathed. And yet, there are plenty of signs that the Canadian housing market is still sitting on some very shaky ground—and even the potential that Canada’s big housing crash is yet to come.

Yadda yadda yadda.

We all know that the proximate cause of the U.S. recession was the bursting of its housing market bubble: it blew up banks, laid waste to personal balance sheets, and left millions of people stuck in homes whose mortgages were more than their market value.
And then Canada went into recession. Unfortunately, this set up the following error of logic that was repeated in all-too-many Canadian newsrooms:

The U.S. is in recession because its housing market blew up.

Canada is in recession.

Therefore, Canada's housing market must be blowing up as well.

And so it was the fate of any number of hapless Canadian journalists to be given assignments to bash out pieces that fit this narrative. But these exercises were all doomed to failure. The decline in house prices in Canada is a symptom of the recession, not its cause.

Let's look at how house prices have behaved since 2003:

U.S. house prices have fallen almost 40% (all changes are expressed in per cent log terms: 100 times the difference in the logs), while Canadian house prices are still within 10% of their peak. There are any number of lazy analysts who have swallowed the faulty syllogism enumerated above and have concluded that 'Canada is following the U.S. with a lag'. This only makes sense if you think that Canadian house prices rose for the same reasons that US prices rose, and that they have fallen for the same reasons that U.S. prices have fallen. This is not the case. As has been documented at great length here and elsewhere, the Canadian economy has avoided the worst of the bubble and its consequences for the following reasons (among others):

1. We never had restrictions on interstate banking, so Canadian banks spread their assets and liabilities across Canada. (So it doesn’t matter if a local housing market goes bust).

2. We don’t have Glass-Steagal. The investment banks joined the retail banks some years ago.
We don’t have mortgage interest deductibility from taxes. So paying down your mortgage is a tax-free investment. So most people want to pay down their mortgages.

3. (Except in Alberta), mortgages are fully recourse. You can’t just walk away from a negative equity home and hand the keys to the bank; the bank will come after you for the difference.

4. Yes, house prices have fallen. But the linkages that make the US story so compelling don't exist here. We don't have banks that are blowing up. We don't have massive waves of foreclosures (even the Globe and Mail has given up on its series of articles that culminated in this silliness). Nor do we have much in the way of evidence that lower house prices are causing undue inconvenience to Canadians: when Maclean's decided to jump on the OMGWTFBBQ housing market bandwagon, the best it could could come up with in the way of a victim was some flipper of 7-figure Vancouver condos who got caught mid-flip. Boo-hoo-freaking-hoo.

5. Moreover, it's becoming pretty clear that the decline in house prices is not so much a national story as it is one of falling house prices in Vancouver, Calgary and Toronto:

Vancouver is and always will be a special case whenever we talk about housing prices in Canada: its geography makes it extremely difficult for developers to respond to increases in demand. This is the sort of environment in which bubbles flourish so I'm not going to pretend that I can predict movements in Vancouver house prices. In Calgary, the incipient recovery in the oil sector will no doubt establish a floor on housing prices there fairly soon. And there's even not-entirely-bad news out of Toronto these days. So I don't see just how the national index is supposed to fall by another 30% or so.

It's worth following the housing market numbers. But they are going to be at best a coincident indicator in this cycle."

Thankfully, we are hearing more and more of these type of stories in our media. The doom and gloom reports just don't jive with the facts and figures we have and what we're observing as we climb out of this recession. Have a great weekend, everyone!

Variable Rates and Refinances Today

2009-06-12T14:29:00.000-07:00

Hello Everyone,

As prime stays low at 2.25% and doesn't appear to be going anywhere in the near future and fixed rates begin to rise, we see lenders dropping their variable rate products. What this means is that refinancing may make more sense than ever: The penalty to break an existing mortgage lowers as fixed rates rise, and you can take advantage of the even lower rates of present day variable rate products for greater savings. If this is something you've been considering, let us see if the numbers work for you. First you need to get an accurate cost of breaking your mortgage from your mortage holder. Then we can run some amortization scenarios and see if there are any substantial savings for what would be the remainder of the term. It's worth checking every now and then.

Below is an article written by our company's National Communications Manager, Steven Moyes, about Mortgage Intelligence in the media and the media's (not surprising) reliance on Mortgage Intelligence as a preferred source of mortgage expertise. Have a great weekend!

"More Than 100 Media Placements
for MI This Year

Hi everyone,

As of this week, Mortgage Intelligence has been mentioned more than 100 times so far this year in the Canadian news media.

We have secured placements in over 70 different outlets including national newspapers such as the Globe & Mail and the National Post, as well as major regional publications including the Toronto Star, the Calgary Herald, and the Chronicle Herald in Halifax. MI spokespeople have also appeared on the National, CBC Newsworld and BNN Business News Network.

MI is now increasingly sought after by the news media as a source of commentary on mortgage issues affecting Canadians. These interviews help raise the profile of MI and its brokers, and brand us as a preferred source of mortgage expertise.

Best Regards,

Steve

Steven J. Moyes
National Communications Manager
Mortgage Intelligence"

Canada's Recession - Deep But Short

2009-05-26T07:19:00.000-07:00

OTTAWA -- Canada's recession, likely its deepest since the Great Depression, may also be its shortest.

Bloomberg News Published: Wednesday, May 20, 2009

Rising home and car sales, unexpected gains in building permits and employment, easing credit conditions and higher commodity prices signal Canada's slump may be nearing an end. Eight of 11 economists surveyed by Bloomberg this month predict the economy will return to growth next quarter.

"It doesn't feel quite like it's over yet, but people are breathing a little bit better," said Russ Girling, president of pipelines at TransCanada Corp., the country's biggest pipeline company, which recorded a 12% rise in revenue in the first quarter.

All but one of the country's five post-Second World War major recessions have lasted at least one year, with the shortest in 1957 at nine months, according to Philip Cross, who tracks the country's business cycles for Statistics Canada.

Canada's economy contracted at a 3.4% pace in the last quarter of 2008 and growth in the first quarter may shrink at a 7.3% rate, the Bank of Canada estimates.

The U.S. recession started in December 2007, according to the National Bureau of Economic Research, the arbiter of U.S. business cycles. Statistics Canada, which defines a major recession as a slump in which both employment and output post annual declines, has yet to date the start of Canada's recession, Cross said. The Bank of Canada has said the country entered into a recession in the fourth quarter of last year.

No Bailouts

While Canada has suffered from falling U.S. demand for exports, the country's banks have largely avoided credit losses. No government money has been given to any of Canada's 21 banks since global credit seized up in August 2007. The U.S. government oversees about US$200-billion in investments in banks through the taxpayer-funded Troubled Asset Relief Program.

Canada's housing market has also held up better than in the U.S., where prices declined 18.6% in February from a year earlier, according to the S&P/Case-Shiller index of 20 major cities. Average resale home prices in Canada dropped at less than half that pace during the same period, according to the Canadian Real Estate Association.

"We may not be in a recovery, but I think we might be in a position where it's not getting worse, where it's truly plateauing," Prime Minister Stephen Harper said in a May 8 interview, adding he'd like another "month or two" of data before coming to that conclusion.

Canada's benchmark Standard & Poor's/TSX Composite Index has posted a 50% gain in U.S. dollars since its low on March 9, compared with the 34% gain for the Standard & Poor's 500 Index over the same period.

Recession

Economists surveyed by Bloomberg this month said they expect Canadian growth to rebound at an annual pace of 0.5% in the third quarter and by 2% in the fourth quarter.

"In February, the rapid decline in demand had come to an end and by April, the rapid declines in employment had come to an end," Cross said. "Was that a temporary end or not? We don't know."

While Canada's jobless rate is at a seven-year high of 8%, the economy in April created new jobs for the first time in six months and sales of existing homes rose the most in more than five years. Credit markets are also improving. The Bank of Canada's composite index of financial market conditions is at its strongest since September.

Improved credit markets have allowed companies such as Enbridge Inc., the biggest transporter of oil to the U.S. from Canada's oil sands, to move ahead with the new debt sales to finance operations. Enbridge sold $400-million of bonds last week.

'Cross Our Fingers'

"Our approach is to watch for windows when we think there are opportunities to raise capital funds," said Richard Bird, Enbridge's chief financial officer. "This is a window and let's cross our fingers and hope that it's a trend."

A quick end to the recession would raise pressure on the Bank of Canada, led by Governor Mark Carney, to say it no longer plans to keep its benchmark lending rate near zero through June 2010. The country's central bank projected last month the economy will contract four consecutive quarters, bringing it closer to the average length of the last five major recessions.

"The Bank of Canada will have to revisit their own view of what they will do with interest rates," said Paul-Andre Pinsonnault, an economist at National Bank Financial. "GDP will be stronger than what they are looking for."

A quick end to the recession doesn't guarantee a strong rebound. DBRS Ltd., a rating company, predicts an L-shaped recovery for Canada, which it defines as "a prolonged period of flat or slowly improving performance."

"The earliest I can see an improvement is in October or November," said Jacques Plante, chief financial officer of Hart Stores Inc., a discount retailer. "I can't imagine we'll have anything positive this summer."

New Lower Rates - Lowest Fixed Rates in Decades/Consumer Confidence Climbing

2009-04-27T07:18:00.000-07:00

Hello Everyone,

Last week the banks dropped their rates again to what appears to be an all-time low for fixed rate mortgages. Interesting article from the April edition of Marketing Magazine regarding present consumer confidence in Canada:

Canadian consumer confidence bouncing back: TNS
April 23, 2009 By Kristin Laird

Canadians are feeling feel better about the economic future, with consumer confidence increasing 7% this month, according to the latest results from market research firm TNS.

The firm’s consumer confidence index is up to 90.5 compared to 83.7 in March. Throughout 2007 and into 2008, the confidence index hovered over 100, reaching as high 110.

Numbers are also up in the present situation, expectations, and buy indices—three categories produced each month to show how confidence in the economy is changing.

“Clearly, one snapshot does not a trend make,” said Michael Antecol, vice-president of TNS Canadian Facts and director of the firm’s monthly tracking study. “But these results do suggest that despite the troubling economic news dominating headlines, average Canadians are sensing the end is in sight.”

The present situation index, which captures evaluations of the overall state of the current economic and employment situations, is up just over three points to 75.3. (In late 2007 and into 2008 the present situation index peaked at around 120.)

The expectations index, which measures consumers’ estimation of the economy, household income and employment in the next six months, rose for the fourth consecutive month to 97.4, up 11 points from March.

The TNS buy index, which gauges the degree to which people think the current period is a good time to make major purchases, has increased 9% to 103.9—the highest it’s been since the second quarter of 2005.

“Consumers are saying now is a good time to make that major purchase while at the same time having fairly positive expectations about the future,” said Antecol. “It looks more and more like the ingredients for a consumer-led recovery.”

The TNS Canadian Facts’ Consumer Confidence Index, is based on 1,015 telephone interviews, and has a 3.1% margin of error.

Have a great week!

Is Your House Paid For? See How You Can Potentially Pay Off All Your Debt in One Half to One Third the Time!

2009-04-22T10:37:00.000-07:00

This might seem like a strange question, but as your mortgage lenders for life, we are constantly searching for ways to significantly benefit our clients. Through an innovative financial service, tens of thousands of American and Canadian homeowners are building equity and paying off their mortgage and all their debt in a fraction of the time.
The best part is:

1. You don’t have to refinance your existing mortgage.
2. Your mortgage payment doesn’t change.
3. There is little, if any, change to your monthly household budget.

To find out if you qualify for this revolutionary service, simply give us a call and schedule a time to learn more. After all, what have you got to lose….except your mortgage payment and all your debt!

Also, we can now help your friends who are not homeowners but have other debts to pay off!

Donna Lewczuk
Mortgage Agent, FSCO Lic M08001430
Mortgage Intelligence, FSCO Lic 10428
905.336.3545
donna.Lewczuk@migroup.ca

***Please Don’t Keep Us a Secret! Should you have family, friends or colleagues who may benefit from this or any of our mortgage and financial services, please have them contact us. Be assured that the people you refer to us will be represented professionally and honestly. Thank you for putting your trust in us.

Government Rebates For 1st Time Home Buyers

2009-04-06T07:06:00.000-07:00

These two articles were published Friday April 3, in the National Post and Bloomberg News, respectively.

The first talks about the Canadian economy. It mentions, among other things, incentives for first time home buyers, such as: tax credits for closing costs, an increase in the amount of RRSP withdrawals for downpayments, and rebates on land transfer tax.

The second article highlights some positive signs of late in the U.S. housing and finance economy.

Have a great week!

"A Real Estate Market with Plenty of Reasons to Buy

Helen Morris, National Post, Published: Friday, April 03, 2009

For first-time buyers with secure employment, the housing market may look rather more appealing now than it has in recent years, when they struggled with affordability.

"We know for Toronto, and for Ontario as a whole, there's been a pretty dramatic shift since the fourth quarter of last year, into a buyers' market," says Pascal Gauthier, economist at TD Economics. "Looking ahead to the next, say, 12 to 18 months, it is very difficult to believe that that is going to turn around, just given the economic backdrop."

While a continued buyers' market is good news for them, house hunters shouldn't expect to see a dramatic drop in prices.

"In Toronto, we're not seeing huge price declines," says Laurin Jeffrey, an agent with Century 21 Regal Realty, "but buyers are finding a lot more selection."

While last year, clients would find many properties had been sold before they had a chance to view them, "Now we're going through a list of 50, taking 20 that are good and getting out to see 10 top ones."

Mortgage broker Maria Dominelli advises clients to look very closely at their finances and lifestyle before stepping on to the property ladder.

"The first thing we want to determine is if home ownership is really right for the individual. They've got to look at coming up with the down payment ... [and] maintaining the home. It requires not only money but a commitment in time," says Ms. Dominelli, who works with Invis. "Make sure you do a check on that reality ... so you know the disadvantages and advantages of buying."

Mr. Jeffrey also urges clients to think about potential lifestyle changes that come with home ownership.

"If all of a sudden you're now restricted to a weekend in Montreal and a couple of lattes, when you're used to having dinner out [and vacationing in] Cuba, well, you're not going to be very happy," says Mr. Jeffrey.

If first-time buyers decide they are psychologically ready to take the plunge, there are some new government policies that can help with the finances.

Under the recent federal budget, first-time buyers can qualify for a $750 tax credit to help with closing costs. In addition, they can now withdraw up to $25,000 from their RRSPs under the Home Buyers Plan to help with a down payment, up from the previous $20,000.

First-time buyers in Toronto buying properties of $400,000 or less will receive a maximum rebate of $3,725 on land transfer tax.

Ms. Dominelli says it is always crucial for purchasers to have a back-up financial plan, but especially now in these testing economic times.

"One of the strategies is for people to actually have their mortgages registered for a longer amortization [for lower payments on paper] but to actually make their payments as though they are in a shorter amortization," says Ms. Dominelli. "While you are working, you can afford it. If the sky falls in and you lose your job and need to bide some time, you can ask the lender to change the payments to the lower total again without having to go back and incur legal fees."

Mr. Jeffrey believes in the value of the real estate investment. If your job prospects are good, he says, "Relax, take a breath, be smart. If you don't need that big flat screen TV, don't buy it. But if you need a place to live, prices are down a bit, mortgage rates are stupidly low. It's not a bad time to buy".

"Eased Mortgage Rates Point to Consumer-Driven Rebound

Kathleen M. Howley, Bloomberg News Published: Friday, April 03, 2009

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.""

On-line Application up and Running!

2009-04-01T04:58:00.000-07:00

Hello everyone,

Recently we have had some technical challenges withour on-line application. We are pleased to say that this problem has been corrected and the application is fully functional.

Below is an article taken from the National Post. It talks about the housing market in the U.S. mainly, and shows some signs of hope in terms of a recovery. Though the situation up here is far different, the U.S. market nevertheless affects us as well. Here it is:

"Sales of previously owned U. S. homes rose at their fastest pace in nearly six years in February, data showed yesterday, offering some hope to an economy battling a 15-month recession.

The National Association of Realtors said sales rebounded 5.1% in February to a 4.72 million-unit annual rate, notching their largest gain since July, 2003, but about 45% of these were foreclosure or short-sale transactions.

This was above market expectations for a drop to a 4.45 million-unit pace after January's 4.49 million rate. Compared with the same period last year, February sales were down 4.6%, the NAR said.

U. S. stocks, already rallying after the U. S. government released details of a plan to clean out toxic assets from banks' balance sheets, extended gains on the housing data.

The housing market is at the core of the economic, and financial meltdown and stabilizing it is seen as a key ingredient for the recovery from a recession that started in December, 2007.

"Because entry-level buyers are shopping for bargains, distressed sales accounted for 40%-45% of transactions in February," said NAR chief economist Lawrence Yun. "Distressed homes typically are selling for 20% less than the normal market price, and this naturally is drawing down the median price."

Sales were up in all four regions, with the West outperforming. In California, the median listing price rose for the first time in three years.

Government data last week showed a rebound in U. S. housing starts and new building permits in February.

"It suggests that the drop in prices and mortgage rates and an increase in affordability are having an impact in the market," said Alan Gayle, senior investment strategist at Ridgeworth Investments in Richmond, Va. "Stabilization in the housing market is critical for the economy to start, and this is a good report."

There is hope that the government's US$272-billion package to stem the tide of foreclosures, together with aggressive efforts by the U. S. Federal Reserve to keep interest rates down, could lay the foundation for the housing market's recovery.

NAR's Mr. Yun said the government's stimulus package could add a million sales this year, but depressed levels of consumer confidence and rising unemployment could derail this projection. The median national home price declined 15.5% in February from a year ago to US$165,400, the second-biggest decline on record."

Have a great week everyone!

Canadian Banks In The Media

2009-03-17T08:11:00.000-07:00

More and more these days, we are hearing about the strengths of our Canadian Banks, both here at home and in the global marketplace. Below is a recent article from the National Post on this very topic, with comments from President Obama. Have a great week, everyone!

"Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia and Bank of Montreal pushed deeper into the ranks of North America's 10 biggest banks after U.S. counterparts stumbled or disappeared in the past year.

Royal Bank, Canada's biggest bank by assets, is now seventh-largest in North America after tripling assets in the past decade, according to data compiled by Bloomberg from company filings. At the end of 2007, Toronto-based Royal Bank was the sole Canadian firm among the top 10. Toronto-Dominion, Scotiabank and Bank of Montreal rank eighth, ninth and 10th.
Canadian banks have remained profitable, outperforming their peers, because of tighter government restrictions on lending and capital requirements. The country's six biggest lenders reported less than US$20-billion (US$15.7-million) in debt-related writedowns since the credit crisis began in 2007, about 2% of the US$887.1-billion recorded by banks and brokerages worldwide.

"It's a combination of the deleveraging that you're seeing at some of the U.S. banks and, frankly, the relative strength of the Canadian banks," National Bank Financial analyst Robert Sedran said in a March 13 interview. "They've been less disrupted on a relative basis than a lot of their U.S. peers."

While New York-based Citigroup Inc. lost US$17.3-billion in the fourth quarter, San Francisco-based Wells Fargo & Co. had a net loss of US$2.55-billion and Bank of America Corp., the biggest by assets, lost US$1.79-billion, Canada's six largest banks were profitable in the quarter ended Jan. 31, and each beat analyst estimates.

Obama Noticed

Canada's performance has been noticed. U.S. President Barack Obama said in a February interview with Canadian Broadcasting Corp. that Canada has been "a pretty good manager of the financial system and the economy." In October, the World Economic Forum ranked Canada as the soundest financial system.

"The Canadian system is more or less working," Scotiabank Chief executive officer Richard Waugh said in a Feb. 25 interview. "Even during this crisis, we have a lot of good assets on our balance sheet that are earning good, sustainable revenue."

U.S. banks have racked up record losses and received unprecedented financial support from the government in the past year. Shares of Citigroup, once the world's biggest bank by market value, dropped below US$1 in New York Stock Exchange composite trading March 5.
Canadian banks have climbed in rank as U.S. banks collapsed or were bought in the past year. Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection in September and Bear Stearns Cos. agreed to be purchased by JPMorgan Chase & Co. last March. Wachovia Corp., which ranked sixth last year, was acquired by No. 4 Wells Fargo & Co. and Merrill Lynch & Co. was bought by Bank of America Corp., which ranked third at the end of last year.
Assets Triple

A decade ago, Canada's banks failed to make the top 10 list. Royal Bank had the equivalent of US$183.9-billion in assets at the end of 1999, making it the 12th-biggest bank on the continent. Royal's assets more than tripled to US$577.6-billion by the end of January, in part by adding a U.S. franchise based in Raleigh, North Carolina.

Toronto-Dominion has spent more than US$15-billion in the past four years expanding in the U.S., including purchases of Portland, Maine-based TD Banknorth and Cherry Hill, New Jersey-based Commerce Bancorp Inc. The lender's U.S. branches exceed its Canadian network. Scotiabank and Bank of Montreal have expanded from their Canadian base in recent years to increase revenue.

Shares of Canada's banks dropped amid the global financial crisis. The nine-member S&P/TSX Banks Index has dropped 4.2% so far this year, less than the 42% drop among the 24-member KBW Bank Index.

"We've beaten expectations to some degree, but I wouldn't overplay that," Royal Bank CEO Gordon Nixon told reporters in Vancouver on Feb. 26. "The expectation is the Canadian banks will continue to generate profitability throughout this turmoil and I think that's a real positive.""

Prime Has Dropped Again!

2009-03-10T08:54:00.000-07:00

Hello everyone,

This is probably old news for most of you, but the banks have dropped their prime lending rate by a half a percent over the past week! Now, variable rate mortgages are available for as low as 3.25%! And with fixed 5-years as low as 4.19%, what a time to renew or refinance! After crunching the numbers, many clients are finding that even with the penalty of breaking their existing mortgage, they are saving thousands! If you'd like to see what savings might be in store for you, give us a call at 1-877-336-3545 and I'd be glad to run some numbers by you, no obligation!

Here's a recent article on this topic from the National Post:

"Breaking Up With Your Mortgage

Anybody who bought their first house in the 1980s must marvel at mortgage rates today. Or perhaps fume.

Another rate cut this past week from the Bank of Canada led all of the major banks to lower their prime lending rate to a new low of 2.5%.

Consumers who locked into variable-rate mortgages tied to prime before credit markets tanked are getting as much as 90 basis points below prime and borrowing as low as 1.6%. It's the deal of the century.

In October, the banks suddenly changed the rules on borrowing and demanded consumers pay a 100-basis premium over prime if they wanted to go variable. The banks have eased up since and the premium on a variable-rate product is 80 basis points above prime for a 3.3% rate.

It poses an obvious question for anyone who has locked into rates as high as 5.75% on a five-year fixed-rate mortgage: Should they break that mortgage?

"It probably does make sense to break it now," says Vince Gaetano, vice-president of Monster Mortgage.

He gives the example of one client who came into his office this past week with a $205,000 mortgage and a 5.24% interest rate. The customer had 3½ years left on a five-year mortgage. The penalty to break his mortgage is the greater of three months interest or what is called the interest rate differential. The interest rate differential is the lost interest between your current rate and market rates.

In that client's case, his interest rate penalty is calculated based on the current four-year rate at his bank, now 4.14% on a discounted basis. The lost interest to the bank is about $7,800, which is what the customer will have to pay.

It's a big penalty but Mr. Gaetano argues that if that same customer breaks his mortgage and goes with the variable-rate mortgage at 3.3%, the savings would be in the $13,000 to $14,000 range over 3½ years -- more than offsetting the penalty.

There is also a nifty little trick you can pull off if you have a prepayment option on your mortgage. Mr. Gaetano's customer has a 25% prepayment privilege, so he can knock $57,000 off his mortgage and lower his penalty by about $2,800.

"You can access [that 25%] from an unsecured line of credit or some credit cards for a few days and reduce your penalty because the penalty is based on the balance outstanding," says Mr. Gaetano.

While not encouraging people to break their mortgages, the banks are acknowledging that some consumers who locked into higher rates can save money if they refinance at the new lower rates.

"I think it does make sense as an option for some people trying to lower their rate," says Joan Dal Bianco, vice-president of real estate-secured lending at TD Canada Trust.

She says if you are refinancing your mortgage, you can take the interest rate differential penalty and tack it on to your new mortgage. If you have credit card debt, you can add that on too, and the refinancing makes even more sense.

The office of consumer affairs for the federal government has a great site to help you make the decision: www.ic.gc.ca/eic/site/oca-bc.nsf/ eng/ca01817.html. Moshe Milevsky, a professor at York University's Schulich School of Business, who created the calculator used on the government site, says it ultimately comes down to how much money you will save on your mortgage if you break the contract.

To me, it's pure mathematics. There is nothing speculative or probabilistic about the decision to break a mortgage. It is the classic example of undergraduate finance time-value-of-money calculations. If the homeowner can refinance into a mortgage with an identical term that reduces monthly payments above and beyond any penalty costs, then go for it. Plain and simple," says Mr. Milevsky.

Breaking your mortgage based on a decision to go into a variable-rate mortgage is an entirely different decision.

"This decision shouldn't be confused or muddled with the classic long or short decision, or whether real estate prices or interest rates are headed up or down from here," he says.

So, it comes down to two choices: The first is to break your locked-in mortgage and renew for another fixed term. If it saves you cash, that is a no-brainer.

The second choice is whether to switch products and go with a variable-rate mortgage. Historically, consumers have saved money 88% of the time going variable, according to Mr. Milevsky's own studies.

I'm still in the camp that favours a variable rate.

Dusty Wallet This will not save you any money, but if you are strapped for cash because one of the breadwinners in your home has lost a job, the banks will let you lengthen your amortization period. If you have a 25-year amortization you can lengthen it to 35 years without any service charges -- other than the huge jump in interest charges!"

Have a great week everyone!

ps. don't forget to check out the latest article I've posted, "Worthwhile Canadian Initiatives" on my articles page. VERY interesting reading, originally published in Newsweek Magazine a few weeks ago.

Saving Cash On Borrowed Money and Mortgage Brokers

2009-02-19T12:21:00.001-08:00

Hello everyone and happy belated new year! I hope, despite the present economic conditions, the new year is treating everyone well.

Before I get into my update I'd like to introduce to you the newest member of my team: my husband Daniel. So if you hear a different voice on the phone, no, it's not me with a cold. Daniel will be sharing the responsibilities with me and I am thrilled to be working with him!

There has been a lot of speculation of late regarding the global recession and how this affects us here in Canada. We've been inundated with media reports on economic forecasts, many of which don't apply to our locale, and none of which have been very positive. In this latest post I'd like to copy an article published in the Globe and Mail Feb. 13, 2009. It mentions some present conditions in the Canadian housing market, specifically the GTA, and really is a positive outlook if you are a buyer, or someone looking to renew your mortgage. Read on:

The Globe and Mail
February 13, 2009
By: Terrence Belford

Saving cash on borrowed money.

While condo sales, especially new condo sales, may be flirting with record lows, the same certainly cannot be said of the mortgage market. Indeed, Toronto-area mortgage brokers are busy as beavers, says Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals, their national trade group.

With about 23,000 buyers closing deals they made up to two or three years ago when projects were in the preconstruction stage, and with home owners looking to refinance mortgages to shave dollars off monthly expenses, business is good, he says.
"It has really picked up quite a bit lately," adds Paula Roberts, a broker in the Unionville, Ont., office of Mortgage Intelligence Inc. "With rates down a percentage point or more from this time last year, those who can are looking at ways to save money and refinancing or negotiating better deals."

Rates are indeed down. Forget posted rates from banks, which currently run at about 5.4 per cent. Brokers say lenders are so eager to make loans, they can negotiate rates down to 4.49 per cent or even 4.39 per cent for a five-year mortgage with early repayment options.

Mr. Murphy suggests mortgage rates may drop even further as the year progresses and the Bank of Canada makes more key lending rate cuts to stimulate the economy.

"It is really a great time for borrowers," he says. "The credit crunch may affect corporations but banks see home loans as safe, secure, solid investments. "
Part of the reason lies in the Canadian psyche, he suggests. Unlike our southern neighbours, Canadians are firm believers in building equity in their homes.
"A survey we did earlier this year shows the average Canadian homeowner has 70-per-cent equity in their home," he says. "Compare that with the U.S. where a good many homeowners now have negative equity."

Back to the original point: The boom in mortgage lending.
On the new condo side, most people who bought two or three years ago in anticipation of a move-in date in 2009 got a commitment from a lender, either on-site or later through a mortgage broker at rates that prevailed at the time. But as Ms. Roberts points out, commitments are not closings and buyers have the option of saying no thanks and looking for better deals.

"Right now, we can give a four-month fixed commitment on rates," she says. "And many buyers are coming to us to find a better deal than they agreed to two years ago."

For existing condo owners, refinancing has become a viable option to trim expenses, especially if existing mortgages are nearing the end of their term.
"It all depends on how far you are into the mortgage," Mr. Murphy says. "If it is only a year or so, the penalties you would have to pay to refinance may not make the process worth it. If there is just a year to run, however, chances are you can save money even after paying penalties."

Ms. Roberts says she is seeing clients use low mortgage rates as an opportunity to rid themselves of much higher consumer debt.

"I had one client in here a week or so ago whose car was coming to the end of its lease. She wanted to buy it," Ms. Roberts says. "She would have had to pay at least 7 per cent or more on a standard bank loan. But instead, she could refinance her condo, take out extra money and pay off the car, all at a 4.5-per- cent rate."
Mr. Murphy says he can see such manoeuvres become increasingly popular as people take a sharp pencil to household budgets to reduce living costs as a defence against current economic storms.

Like many industry observers, Mr. Murphy thinks the condo action will shift this year from a preoccupation with new projects to the resale market where average prices are lower and there is a plentiful supply.

A happy combination of low mortgage rates, a plentiful supply of money, the
considerably lower prices resale condos command and a large inventory may be the spark that reignites the housing market in the Greater Toronto Area, Ms. Roberts suggests.

"It is a great time to buy a resale unit," she says. "Prices are down, financing is available at great rates. The only thing holding things back is consumer confidence in their own situation.

"If you are fairly certain you will continue to have a job, then there are great deals out there."

Speculations are that interest rates will drop yet again next month. So, if you are looking to refinance your mortgage, it might be a good time to calculate how much a penalty might cost to break your existing one. These days, the savings are often well out-weighing the cost!

Articles like the one ablove have been cropping up from time to time lately and although the future is never totally certain, I think they really help to clarify the situation where we live. We are still feeling the effects of the global recession, but we are probably in one of the best places in the world to be, while in the midst of it.

Until next time, have a great week!

D.

Current Market and Private Mortgages

2008-10-10T08:45:00.000-07:00

The sub-prime mortgage crisis has affected the United States, Canada, Europe, and the rest of the world to some extent. Because of these far-reaching effects, many lenders have gotten out of the business altogether, or at least severely restricted their criteria for doing business. This has made it challenging for many to find private lenders to fund deals.

At Donna's Mortgages, we've had long-standing working relationships with several private money lenders and continue to do business with them. Because of the established relationship we enjoy with these lenders, we can happily say that it is "business as usual" at Donna's Mortgages, despite the economic downturn.

So, for those who may require the services of a private money lender, this is a facet of our business that continues to grow and be available to our clients.

Non-traditional Financing and the Value of a Commercial Mortgage Broker

2008-06-04T12:38:00.000-07:00

Private hard money lenders are in the business of providing loans and loan services to people who require hard money loans (loans collateralized by real estate.) Private hard money lenders may be direct hard money lenders or brokers of hard money loans. Most private hard money lenders are, in actuality, brokers. Some private hard money lenders are both brokers and direct lenders. In these cases, the private hard money lender generally funds one or up to a few small loans per year and serves in the broker capacity to clients for the loans they help to originate. Deciding on whether to work with a hard money broker or a private hard money lender is similar to deciding on whether to purchase real estate with the assistance of a broker/agent or whether to make an offer direct to the seller on your own.
The advantages of working directly with a true private hard money lender are immediately evident: You may sometimes save money by going direct. Brokers are paid for their services via a percentage of the points you pay on a hard money loan. Therefore, the more brokers involved in a deal, the more you are likely to pay in both points and percentage to accommodate that cost. If you have selected a direct hard money lender who is a good match for your project, you will be able to speak directly with the decision makers, avoiding the ‘run around’ that so many hard money borrowers fall prey to. You are told that your loan is going through, only to hear the next day that the lender has elected not to take on your hard money loan and now your loan is on another desk in yet another direct lender’s office – or worse, on the desk of another broker who may know a broker who knows a lender who may want to fund your loan. Sometimes, the choice of direct lender is based more on the commission the broker will get than on your best interests. By working with a direct hard money lender, you can avoid the ‘run-around’ and may be able to close more rapidly. After all, no one knows your situation like you do, no one can explain any extenuating circumstances better than you can, and no one is as committed to your business and your hard money loan as you are. The advantage of working with a commercial mortgage broker is also clear: a seasoned, well-informed, honest commercial mortgage broker will have the knowledge of and access to the direct hard money lenders in Ontario, Canada, and the United States. A commercial mortgage broker will know where your loan has the best fit. A good commercial mortgage broker will help you ‘package’ your loan to your best advantage, helping you determine how much to expect based on the equity in your property, type of property you are collateralizing, how soon you need to close the deal, and more. A good commercial mortgage broker will be able to assist you through the lengthy application process and submit your loan request to the best direct lenders for your situation. More often than not, working with a commercial mortgage broker will save time. By representing you and presenting your loan request to the best direct lenders, it often makes the transaction run more smoothly and take less time than if you were to take on this task yourself. This often saves you time and trouble in the long run and be well worth the cost of using a mortgage broker.

Visit http://www.donnasmortgages.com

Advantages of a Commercial Second Mortgage

2008-06-04T12:36:00.000-07:00

A commercial second mortgage is an important commercial real estate tool.Commercial second mortgages are often used in conjunction with a new first commercial mortgage loan. Typically, the commercial second mortgage will have a term of one to five years with interest only payments. While commercial second mortgages can be critical in some financing scenarios, consideration must be given as to whether or not you have the ability to service both loans.There are some clear advantages to this type of creative financing. The most frequent use is that a commercial second mortgage reduces the LTV (loan to value) of the first mortgage in order to allow you to more easily qualify for the first mortgage. An example would be where the primary lender (first mortgage holder) will only lend 70% LTV and you only have a 20% (or less) down payment. A commercial second mortgage can be used to make up the difference.Other uses for a commercial second mortgage are to finance business expansion and construction, working capital, to consolidate debts, pay tax arrears (lets face it, this does happen), or for renovations.There are a variety of options available to you such as: interest only payments, annual payments, exit fees, etc. that will help keep your immediate payments down and defer the costs of the commercial second mortgage. The idea is to give the property time to appreciate and thereby allow you to refinance and consolidate both the first and second mortgages at a later date at a then lower LTV.

Visit http://donnasmortgages.com

Residential Second Mortgages and Home Equity Loans

2008-06-04T12:34:00.000-07:00

A second mortgage is a registered lien on your property. This lien is in second place, behind the first mortgage. Because second mortgages are riskier, the interest rates are usually a minimum of 10-12%. A new second mortgage can be used to purchase a home or to refinance an existing home. If refinancing, the new second mortgage can be used for a variety of things:

§ Home renovations
§ Children’s education
§ Pay off existing debt
§ Emergency expenses
§ Business expenses in challenging times
§ Investments
Home equity is the difference between the current appraised value of your home and the amount you have paid on the first mortgage. For example, if you have paid $85,000 on a mortgage of $300,000, you can borrow against the $85,000 already paid. Home equity loans are either second mortgages or refinanced first mortgages with taking cash out. Again, this cash out can be used for a variety of reasons, from consolidating outstanding debt to renovating your home to paying for your children’s education.
Depending on your particular financial situation, you may be able to lower monthly payments on your outstanding debts. Instead of paying high interest rates on a personal loan or credit card, you can get a home equity loan at low mortgage rates and pay off these debts for less.
Depending on your unique loan scenario, we may be able to offer the following terms for your second mortgage:

- Insured Second mortgage up to 95%
- High-ratio first mortgages up to 100%
- Equity-based first and second mortgages up to 100%

Through our vast network of lenders, we can increase the probability of approval of your home equity loan/second mortgage.Call us today to see how a home equity loan/second mortgage can work for you.

Visit http://www.donnasmortgages.com

Bad Credit Commercial Loans and Mortgages

2008-06-04T12:32:00.000-07:00

While credit profile is an important consideration in the lending decision it is not the only one. A bad credit commercial mortgage or loan is available to individuals and businesses with less than perfect, or poor credit rating. These are also called “sub-prime” loans.

Bad credit commercial loans and mortgages are available for any sort of commercial purpose. Bad credit commercial loans can be used to remodel a manufacturing plant to make it run more swiftly, for example. Bad credit commercial mortgages can also be used to restructure or expand the existing business. Also, much like bad credit home loans, bad credit commercial loans can be used to actually pay off debt and improve your credit.

Bad credit may not stand in the way of obtaining your loan or mortgage request, only a clear detailed plan of your commercial purpose for the loan is needed, as well as a plan for repayment. With bad credit commercial loans and mortgages, bad credit may not hurt anymore, but rather it gets improved. And then, with timely payments, you can eventually improve your credit score and overall credit report even further.

Not all commercial property owners and prospective commercial property owners are alike and thus we treat each loan request as a unique scenario and try to maximize our clients’ opportunities to get the commercial property loan that meets their objectives, even if their credit history is less than perfect. New and creative financing techniques are available to make our services more effective and responsive to borrower's needs. Rates can vary quite dramatically across products, so it is important that we understand your situation as thoroughly as possible so we can secure the best product for you.
Securing the right bad credit commercial mortgage or loan is a very important decision. Equally as important is speaking with the right people. If this is an area you wish to explore, contact us today.

Visit http://www.donnasmortgages.com

Why A Commercial Equity Loan?

2008-06-04T12:29:00.000-07:00

One main reason for getting a commercial equity mortgage loan is to obtain a line of credit. A line of credit is an amount of money made available for you to borrow from whenever you wish.
When you get a line of credit with a commercial equity mortgage loan, what you're actually doing is getting a new 'mortgage-loan' on your commercial real estate for a particular amount. For example, instead of taking that amount, say $500,000 out of your commercial real estate in cash, you leave that cash in, but make it available as a line of credit.
Of course, this line of credit is accessible whenever you need it, paying interest only on the amount you use, and only when you are using the line of credit. If you took the $500,000 out in cash, you would have to pay interest on that full $500,000 until you completely paid it back.
So a line of credit is a money-saving option as opposed to getting full 'cash out' with a commercial equity mortgage loan, especially if you don't need to use the entire amount of equity in your commercial real estate all at once. If you get a line of credit by getting a commercial equity loan, it can act as a safety blanket for you in case of financial emergencies. Also, you can get a line of credit with a commercial equity loan far cheaper than you can get a regular line of credit from a bank.

Visit http://www.donnasmortgages.com

Bad Credit Residential Mortgage

2008-06-04T12:27:00.000-07:00

At Donna’s Mortgages, we have a track record for helping our customers manage their financial affairs responsibly, and assisting them in re-establishing their credit and stability.

We understand that, although many clients are capable and willing to take on the responsibility of a new residential mortgage, the criteria used by most, if not all, financial lending institutions prevent them from obtaining their loan request, due to past bad credit. Over the past few years, it has become increasingly easier to obtain loans for clients with bad or less than perfect credit, via tried and trusted private lending companies. These are also called sub-prime mortgages and loans. These companies can often finance sub-prime or bad credit mortgages which conventional institutions cannot. The main thing these private lending companies wish to see is equity in the property, in a marketable location.What's really important is that we are able, in almost all cases, to place financing regardless of your past credit history. We are also able to assist consumers with good credit to obtain the most competitive mortgage rates and terms, and offer a wide range of mortgage products to meet a variety of needs. Whether you have a history of bad or less than perfect credit, you have filed for bankruptcy, consumer proposal, credit counselling, you are self-employed or without verifiable income, or you’ve accumulated an unmanageable amount of debt, we can almost always place your loan request for financing.
Because sub-prime mortgage loans can often be a complicated process, it’s important you speak with the right people. The idea is to improve your credit score and get you back on track with manageable debt and payment schedules. Even if your initial goal is to consolidate debts, do home renovations, taking a much-needed holiday, or anything else, a sub-prime bad credit mortgage can actually help improve your credit score. Combined with timely payments, a sub-prime mortgage can put you in the right direction towards financial freedom. Call us today.

Visit http://www.donnasmortgages.com

Business and Construction Loans

2008-06-04T12:04:00.000-07:00

Capital is the foundation of every business. The business owner needs to have enough funds to run his business smoothly. And, as we know, business does not always mean earning profits - you may have losses as well. In a not always predictable market, doing business necessitates the requirement of immediate cash. Commercial secured business loans have been designed to help you out in these circumstances.
Commercial secured business loans are tailored specifically for entrepreneurs who require funds for starting/acquiring a business or expanding an existing one. The amount drawn from commercial secured business loans can be used for a variety of purposes, such as purchasing machinery, renovating buildings and offices, purchasing commercial buildings and much more.
One important feature of secured commercial business loans is that these business loans can be collateralized by commercial property, equipment, accounts receivables, purchase orders, contracts, company shares, other unrelated properties, etc.
Commercial real estate lenders wish to see a business plan which shows a strong source of repayment for the loan. The lender wants to make sure that his business loan is going to get repaid.
There are a number of questions that the lender will have in order to see if you qualify for a business/construction loan or financing:

- Will the finished project be worth more than it costs to construct/finance?
- After the project is finished, will the loan to value be, for example, 75% or less?
- How much will the borrower be willing to invest in the construction/business loan?
- How does the borrower’s net worth compare to the size of the construction/business loan?
- Will the lender be able to get out of the deal at some point by the borrower qualifying for a new loan to pay out his construction/business loan (takeout loan)?

As far as business start up loans, lenders are concerned with such things as: the borrower’s experience in the line of business (increases the borrower’s chances of success), the amount the borrower is willing to invest himself (how much the borrower will have at stake in the deal), collateral sufficient for the loan portion of the deal. Business start up loans can be used for: construction financing, renovations to existing premises, machinery and equipment, marketing, and working capital, or acquisition of a business.Call us today to find out how we can put a solution together for your specific needs. Visit http://www.donnasmortgages.com/

Alternatives to Traditional Banks as Sources for Commercial Loans

2008-06-04T12:02:00.000-07:00

Commercial mortgages are available through banks, commercial mortgage companies and private lenders. Commercial mortgage rates vary as widely as residential mortgage rates. Traditional banks offer some very low rates. However, due to their restrictive lending criteria, they are prevented from making commercial mortgages for many kinds of commercial properties. Gas stations, with or without convenience stores, for example, can be difficult to obtain commercial mortgages for. Commercial mortgages can also be difficult to obtain from traditional banks if you don’t have excellent personal and business credit scores. Hard money commercial mortgages are also available through private lenders. Unlike traditional banks, private lenders have more flexible lending criteria. Also known as hard money lenders, private commercial mortgage companies focus more on the current value of a commercial property than on your personal financial package. Private lenders are often able to fund a commercial mortgage if there is a clear picture of how the loan will be paid back. When determining whether to fund a commercial mortgage, private lenders will often look at the ratio of income to operating expenses. Unless a borrower has repeated defaults and bankruptcies, private lenders are not as concerned if the borrower has less than perfect credit.
When applying for a commercial mortgage, be prepared to provide your commercial mortgage company, be it a bank or a hard money private commercial mortgage lender, with the following:

• A completed standard commercial mortgage loan application, which includes a personal and business balance sheet
• A description of the use of proceeds of the commercial mortgage you are seeking
• A description of the property
• The current value/purchase price of the property
• The cost of improvements you will make to the property
• An estimate of the property’s value after improvements
• A repayment plan for the commercial mortgage/hard money loan
• For a hard money loan, provide an exit strategy for the commercial mortgage – will you refinance this commercial mortgage with a traditional bank after making improvements or alterations to the existing property or some other scenario?

Owners considering a commercial mortgage refinance will find many unique loan programs. As specialists of commercial mortgage refinancing we offer some of the best loan options available, most of which your local bank simply does not have. Refinancing your commercial mortgage is not an act exclusively reserved for the time your commercial mortgage matures. There are some great reasons for refinancing your commercial mortgage prior to this (see the article “Why a Commercial Equity Loan”). Now, given the current the state of the capital markets its more important than ever to work with seasoned professionals. Lender guidelines and underwriting parameters are changing rapidly as banks try to protect themselves. Options for commercial mortgage refinances, though still broad, are getting harder to determine and close. Just as important it is key to know not only which lenders are offering the lowest rate and fees but which are still actively funding loans. We know who these lenders are. Call now to discuss your loan scenario.

Visit http://www.donnasmortgages.com

2006-03-09T19:05:00.000-08:00

If you've ever thought about purchasing raw land to build commercial property on but got scared away by the thought of financing it, fear no more. I can help you finance your project with minimal hassle. You don't have to worry if your credit's impaired, you can't verify your income or your net worth is low. Contact me today for more details. www.donnasmortgages.com.

2006-02-10T18:25:00.000-08:00

If you're a business owner and are struggling with debt, I may have a solution to help you save a significant amount of money. If your debt is unsecured and you are at least 90 days in arrears, I may be able to help you eliminate a good portion of that debt. And that's eliminate as in not having to pay it back. It's not a consumer proposal, bankruptcy or credit counselling. As a matter of fact this will improve your credit score almost right away. This will work for collection items, judgements, garnishments, student loans, credit cards, lines of credit, etc. This will not work for any money owing to Rev Can, such as personal or sales taxes. This plan will also work for personal debt. If you'd like to find out more info on how this can work for you or someone you know, call me today at 1-877-336-3545. There's no obligation.

Private Financing

2006-02-09T15:21:00.000-08:00

A great way to come up with extra funds for your down payment is through private financing. If you own your home, or other properties, they can be used as security. This may even allow you to borrow 100% of the purchase price! I have access to a number of private lenders who are more than willing to look at creative financing scenarios. If you would like to get more information do not hesitate to contact me. lewczuk.d@mortgageintelligence.ca or 1-877-336-3545.

2006-02-07T10:24:00.000-08:00

I've been arranging mortgage financing for years now, primarily residential. Lately I've decided to focus more on the small commercial segment, specifically those borrowers who've been turned down by their lending institution. My website will be changing in the next few weeks to reflect the switch. I'm excited about what this means for my clients. I can access loan to value ratios as high as 80%, depending upon the property type. This is huge! Equally as good there's not a lot of documentation required. It's based on stated income and assests. Quick closings are often do-able, in as little as 6-8 weeks. Rates are competitive.

My goal for this blog is for it to be a forum where business owners can share what's working for them, challenges they've had, how they've overcome them, etc.

2006-02-07T10:11:00.000-08:00

Donna Lewczuk, Mortgage Specialist