CategoryMortgage News

Posted January 28, 2017 Consumer Debt

Debt diversification vs Debt consolidation…who wins?

ONLY IN CANADA

Attention: Bankers, close your ears.. we don’t want you to hear this. Credit card balances, lines of credit, car loan, student loan, home reno loan, personal loan.. If you have one or more of these and you own a home, you’re probably losing money by paying a higher interest rate. In many cases, $thousands are lost and overpaid each year. And your Banker is laughing and recording Record profits!!

It’s surprising how many of us have some, or all of these debts… and ALSO a house with lots of equity. Yet, as Canadians, we somehow think it’s better to separate our mortgage from other debts. We somehow think it’s good to pay down our mortgage but then rack up other debts. This attitude has puzzled me for years.

check out this chart for one client.. tell me if this looks familiar: Continue reading “Debt diversification vs Debt consolidation…who wins?”

Posted January 2, 20175 Comments Interest rates

Mortgage rate outlook 2017.. Expect Fixed mortgage rates to go up…Expect Variable rate pricing to drop.

Fixed mortgage rates have increased by about 0.40% in the last 6 weeks. Today’s 5 year fixed rates are at around 2.89% and will could continue to go up in 2017. There are political and fundamental reasons why rates have gone up. (oh, by the way.. it’s not panic time.. who ever said that 5 yr fixed rates were the best product to choose anyways? more on this later.)

FUNDAMENTAL REASONS

Govt of Cda bond yields have gone up around 0.55% since October (fixed rates are priced from govt of Cda bond yields). It’s more expensive for Lenders to fund mortgages due to stricter government regulation and higher Capital holding requirements. These increased costs are being passed down to the consumer.

Okay, this is the “how” the rates are higher.. but what’s prompted these fundamentals? Why are rates higher?

POLITICAL REASONS.. IT’S ALL POLITICS Continue reading “Mortgage rate outlook 2017.. Expect Fixed mortgage rates to go up…Expect Variable rate pricing to drop.”

Posted December 19, 20163 Comments Interest rates

Mortgage Brief.. Mortgages rules explained… and why didn’t the govt consult experts?

They say we don’t read emails or articles anymore.. we just skim through them. But some things can’t be understood with a quick glance. The new mortgage rules will impact EVERYONE!

If you want to understand how they impact you, continue reading… If you don’t care or want to be oblivious, take the blue pill and move on.

I’ve put together a list of the mortgage rules so that you can understand what they mean and how they will impact you. Hey, let’s give The Federal govt some credit… they’ve been transparent about a few things, right?:

They want house prices to drop.
They don’t want anyone to have a mortgage if their home is worth more than $1,000,000.
They don’t want you to ever refinance your mortgage. You should only require a mortgage when you buy a house.
They don’t want you to buy a house and rent it out. You should only buy a rental property if it has 2 or more units.
Mortgages should not be amortized for longer than 25 years.
They want rates to go way up.

Here’s the official update from our Department of Finance.

Here we go.. Forget the data and stats being reported today. Those stats don’t matter! We want to see the stats after March 30th, 2017.

Remember the mortgage rule changes of October 17th? How about the ones on November 30th? Get ready, we won’t see the full effect of these changes until after March 30th 2017.

That’s when the last of the mortgage approvals will have closed, that were done under the old rules. And all the new mortgage closings beyond this date, will have had to been qualified with the new rules. This is when we’ll begin to see the impact of these rules… And we’ll begin to see just how many Canadians will be have been impacted.

If you think I’m wrong, read the rule changes below and tell me what other conclusions you can come up with. Continue reading “Mortgage Brief.. Mortgages rules explained… and why didn’t the govt consult experts?”

Posted November 14, 2016 Interest rates

Unexpected Trump win on Canadian mortgage rates and market.

The surprise Donald Trump US election win has caught many off-guard. The pollsters have been quiet to comment after they all predicted a Clinton win.

Here’s what week 1 looks like, after the Trump win. The first few days saw some chaos in the stock market. Stock market went down and so did Govt of Canada bond yields.

However within a day, the stock market began to rise. The Dow Jones hit all time record highs. The Toronto market was up also, but not as much as the US. The Canadian $ took a bit of a beating. And the Govt of Canada bond yields started to rise. This last one is important to watch.

Fixed mortgage rates are closely tied to govt of Canada bond yields. We’ve now seen Bond yields increase by over 0.35%. that’s a huge increase in such a short period of time. Banks and Mortgage Lenders have begun to increase fixed mortgage rates.

Investors are betting on Trump stimulating the US economy and taking no foreign prisoners. That’s caused some jitters in the markets. I’m watching the markets closely. This could just be a short term reaction. Or, it could be an adjustment to the record low mortgage rates.

MY VIEW… Continue reading “Unexpected Trump win on Canadian mortgage rates and market.”

Posted November 7, 2016 Consumer Debt

Marital splits… woman seem to be at higher risk when it comes to finances.

They say about half of all marriages end up in divorce. In Canada, it’s around 48%. In the U.S., it’s around 53% according to Stats Canada. You’ve probably heard these stats before.

But what happens when a couple splits and all the financial matters were being handled by just one spouse? In most cases (but not all), it’s the woman who is left with no knowledge of money matters. Over the years, I’ve seen hundreds of marital splits and in an overwhelming majority of cases, the woman is left in the dark when it comes to finances (that trend is changing as today’s women are becoming more financially astute.. good for them.. let’s continue that trend).

There is HOPE and HELP. Here are some things you can do to take charge of your finances before or after a marital split: Continue reading “Marital splits… woman seem to be at higher risk when it comes to finances.”