News, Views and Trends!
What is your credit score?
A credit score is an important part of your financial picture. Credit scores can range from 300 to 900 and are used by lenders to determine what kind of a risk you are likely to be as a borrower. Your score is based on several attributes. Continue reading “The making of a credit score and why it matters.”
Canada Mortgage and Housing Corporation released The State of Homebuying in Canada report on November 15, 2019, with a few key findings, including this headline.
The annual State of Homebuying in Canada report noted that 56% of all purchasers were first time buyers in 2018. This dropped to 47% in 2019.
The tightening of mortgage rules which has been taking place over the last 4 years is certainly having an effect. The never ending rule changes were intended to slow home sales and prices. But like most government interventions, its had the opposite effect.
Continue reading “Significant decrease in first time home buyers in 2019”
I’d like to think the Total Net Worth Program reintroduced by a lender recently is an indication of what’s to come!
I’m excited about this program. It allows borrowers with good net worth to gain access to money. This is old-school lending – nothing new – but it’s a comeback worth celebrating!
Contrary to media reports about our ‘record personal debt levels’, it’s extremely prudent to ensure you have access to emergency money.
The line of credit popularity that took place in the ’90s wasn’t a bad thing. It allowed us to borrow at low rates to invest or spend as needed. Many successful investors have been doing this for decades. Borrowing to invest makes smart financial success. Don’t let anyone tell you differently.
We’re seeing more reasons for Canadians to get a secured line of credit now: Age; Income; and Qualification.
Continue reading “My advice is simple: Over 50? Get a secured line of credit while you can qualify.”
Is choosing a mortgage as easy as booking a trip or trading a stock? Let’s find out!
Sure, you can book a flight online or buy a stock through the web. But, can you really choose the right mortgage product on your own? Can you really find the absolutely lowest cost mortgage financing option? I’ll bet some consumers can. I’ll also bet the vast majority cannot. There’s a steady stream of horror stories, on this news site and others, that show just how costly and financially dangerous it is to be in the wrong mortgage product, with the wrong lender.
I’ve shared dozens of those experiences on this site. Consumers who were directed into the wrong mortgage by their Banker or by some web site claiming to offer ‘the lowest rate’. I empathize with these consumers as I believe they were just trying to save some money but instead ended up paying far more than they had to. Continue reading “Online shopping …. Stocks, Vacations and Mortgages. What’s the difference?”
Mortgage rates fell by about 1% since January of this year. That rate drop has created a surge in real estate sales across Canada, with September and October seeing a greater than average number of real estate transactions. We also saw consumers taking advantage of these low rates by refinancing their mortgages early.
The Five-Year Government of Canada bond yields have been going up and down like a yo-yo over the last three months, with a low point being 1.13% and a high of 1.58% just this past week. This uncertainty/volatility forced financial institutions to raise their interest rate by about .2% to .3%. Having said that, interest rates are still very low. In my discussions with the major lenders, they are all telling me that it’s busier than usual for home purchases and refinance purposes. Continue reading “Important week for mortgage rates could cost or save you thousands.”
I saw this article from earlier this year about Good debt and Bad debt. Canadian Personal debt levels have now surpassed $2.21 trillion. That’s a big number, should we be concerned? I started to wonder how much of this is Bad debt? Let’s take a closer look at these stats. Continue reading “Good debt and Bad debt…. do we Canadians recognize the difference?”
The internet is great for researching information, ratings and even advice. With so much available data, it’s hard to decide which is accurate, reliable or even truthful.
Take this site for example. If this is your first visit then you may not be aware of all my credentials nor how accurate my information or recommendations are.
You’re probably making a decision right now. That’s how fast we decide today. I’ve either got your attention or I don’t. Hello to those that continue, or farewell and thanks for stopping by to those that are leaving. (By the way, stick around, you may find this useful). Continue reading “Information vs advice. Why is it free?”
Part 2 of 2…. In Part 1, we examined rental properties and how they can be a great way to reduce your taxes, build net worth and create an income stream. Part 2 looks at Interest payments. Interest payments are a big part of our personal expenses. Here are a few suggestions on how to reduce your interest costs.
Continue reading “Death, taxes and interest payments. Part 2 of 2.”
Death and taxes, the only two things that are certain in life. You’ve heard this one before. I think there is a third thing that can be just as stressful, ‘interest payments’ (before this article becomes too depressing, I’m going to share some things that will help to reduce our interest costs and minimize our taxes). Continue reading “Death, taxes and interest payments! Part 1 of 2.”
I wrote that back in 2006. Since then we have seen some provincial governments step in with laws to help protect unsuspecting homeowners. You can also purchase Title insurance or an alternative method of protection.
A couple of years ago, Toronto police said a woman used fake ID to get a $300,000 mortgage. The unsuspecting homeowner only discovered a mortgage had been fraudulently registered on their home when they received mortgage documents in the mail.
This is not a new scam. It’s happened many times in the past. Here’s a big one from 2010 that involved $140million and hundreds of people. This one was huge. Most are not this big or elaborate. It’s the smaller ones, like the recent one for $300,000, that are more common place.
HOW IT’S DONE
If I gave the option of choosing between two cell phones, which would you choose? Both phones had similar specs and were identical in almost every way… except PHONE one came in a nicely gift wrapped box with a bow on it. PHONE two came in a brown paper bag but was less expensive and also had slightly better options.
Most of us would choose PHONE two right? Wrong! When it comes to mortgages, most of us are focusing too much on the beautiful gift box and not paying enough attention to the contents. They say around 47% of all mortgages go through a BANK and 39% go through a Mortgage Broker. Broker share is up, but not enough in my opinion.
When it comes to mortgages, historically the BIG SIX BANKS have been charging higher rates than what can be had from MORTGAGE BROKERS. (see Bank of Canada study ‘competition in the Canadian mortgage market). And their inflated prepayment penalty calculations are now infamous (typical BIG SIX BANK penalties are around 4 times higher than other lenders).
Continue reading “Are you looking at the beautiful box or what’s inside?”
WAS THIS A BIG MISTAKE?
Last week, Stephen Poloz, the Bank of Canada Governor, kept the Prime Rate as is during the 6th of their eight scheduled meetings for 2019. The Current Target rate is 1.75%. (Bank Prime rate is derived from this rate. Today’s Bank Prime rate is 3.95%. Over 99% of time, when the Target Rate is cut, the Banks will reduce the Bank Prime Rate by an equal amount).
This was a very calculated decision that has politics written all over it. While the rest of the world banks have been cutting rates to combat a looming recession due to growing global trade wars and slowing global economies, our Government did nothing. Apparently, the Canadian economy is ‘resilient’. The next Bank of Canada meeting is set for October 30, 2019. Oh, and there’s a Federal election on Oct 21, 2019. Yeah, this has politics written all over it.
WHAT YOU SHOULD KNOW ABOUT MORTGAGE RATES TODAY. Continue reading “Why didn’t the Bank of Canada Gov cut rates last week?”
The First-Time Home Buyer Incentive (FTHBI) program is a Shared Equity plan that came into effect Sept 2nd (just before an election, what coincidence). The program was created to stimulate new home construction and to fill a lack of housing supply.
Here are the quick facts about the program and how you can actually qualify. Spoiler alert, this program isn’t for everyone, and actually, it’s going to be more relevant for smaller cities and towns where home prices are below $500k. Still, it’s worth reviewing to see if you do qualify… Continue reading “New First-Time Home Buyer Incentive.. the quick facts.”
While I originally posted this article in September of 2015, I think now is a good time to take another look.
Fixed mortgage rates are at an all-time low. If you have a mortgage that is over 3.09%, then you should consider breaking it, paying the penalty and getting into today’s lower rates.
That’s the short answer… the full answer is a little more complex, but it’s really just simple math. If the savings is greater than the cost to break, then the answer is obvious. You should do it! I’ll give you some real life examples of clients whose savings could be huge $$s today if they paid their mortgage and the penalty and went into a new lower rate mortgage. Check out these success stories…
Continue reading “These 3 clients broke their mortgages, paid a penalty, and still saved between $9,000 and $26,000!”
A couple years ago, the federal government brought in some tighter mortgage qualifying rules. The ‘stress test’ was just one of several changes, but it’s definitely the most well known.
The feds wanted to slow the housing market. They also wanted to ensure that borrowers could afford the much anticipated mortgage rate hikes. Rates have to go up some time, right?! When?!
Continue reading “Mortgage Rates are still trending Lower… Yes, in August!”
I’ve been fielding a lot of calls lately asking about 10-year fixed rates – and with good reason! You can now get a 10-year fixed rate for around 3.04%. That’s almost at an all-time low.
But should you take this offer? NO!
Continue reading “Should You Take a 10-Year Fixed Rate When Rates are Low?”
I’ve never seen more competition with mortgage rates in my 30-year career than I have in the first five months of 2019!
Rates are under 3%!
On May 10th, a new jobs report was released by the federal government showing 106,000 new jobs created in the month of April. This blew away all expectations. And, the reaction was immediate, including higher mortgages being imminent and a bull stock market on the horizon… and yet, this didn’t happen. Continue reading “A Rate War on Canada Day?”
