CategoryMortgage News

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.”

Posted November 2, 2016 Mortgage News

Mortgage brief.. CMHC ‘red warning’.. what’s it mean?

Much has been made about CMHC’s Economists ‘Red Warning’ that was put out for the 4th quarter of 2016. Let’s take a look at what the report actually says.

CMHC’s economists have 3 categories of measurement that are of concern. Overheating, Price acceleration and Overvaluation.

VANCOUVER AND TORONTO

The Vancouver market had already been identified by CMHC as having moderate Overheating and Price Acceleration and Strong Overvaluation. Toronto now has the same issues with the same Overall Assessment of Strong evidence of problematic conditions.

Put another way, CMHC believes the Toronto and Vancouver housing markets are vulnerable. While this is cause for concern, there was also some other info in the report that we should be probably not overlook… Continue reading “Mortgage brief.. CMHC ‘red warning’.. what’s it mean?”

Posted November 1, 2016 Mortgage News

Mortgage Brief…TD raises it Bank Prime… going rogue .. for now!

In what I’d call, a Halloween Hangover move, TD announced they will be raising their Bank Prime Mortgage rate to 2.85% from 2.70%. In a circular I received today from TD, they threw us yet another surprise, in a month full of surprises.

What’s interesting is that on Oct 19, the Bank of Canada Governor, Stephen Poloz, was quoted saying he was considering lowering the rate.

Variable Rate mortgages are priced from the Bank Prime rate. TD is adding a 0.15% premium to all Variable rate mortgage clients.

We should be watching for the other BIG SIX BANKS to follow. If they don’t in the next week, the perhaps TD will pull back. TD seems to be telling us it’s due to market conditions (whatever that means). Personally, I think it’s just greed. There’s not real reason to raise the rates….

Stay tuned… this story hasn’t fully played out yet.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted October 19, 2016 Case study

Mortgage brief…Is it worth changing your mortgage today?

Mortgage rates have never been lower. Should you break your current mortgage to take advantage of the lower rates? The answer is ‘yes’ and ‘no’.

YES….if the penalty to break your mortgage is less than the potential savings. We are seeing many opportunities today where it PAYS to break your mortgage and get into today’s lower rates.

EXAMPLE for one client.. Existing mortgage is $275,000. The existing rate is 2.99% with 3 years to go. The penalty to exit is $3500. The current 3 year rate is 2.24%. Gross savings is $5602. Net savings is $2102.

NO… if the penalty to break your mortgage is less than the potential savings. EXAMPLE.. Penalty is $6500 and Gross savings is $5602. Net loss is $898.

YES… if you think interest rates are going to be much higher in the next few years, you may still want to bite the bullet, pay the penalty and lock into a longer term fixed rate mortgage. Everyone is different and has different needs, risk tolerances, plans. This is a personal choice.

I’ve seen examples of both situations. You could save money by breaking your mortgage. The best advice is to speak with an experienced Mortgage Broker. Get an UNBIASED opinion.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted October 4, 20162 Comments Bank News

Mortgage brief… New Liberal govt mortgage rule changes..and what it means.

Yesterday, Federal Minister of Finance, Bill Morneau, announced tighter lending rules. The big focus is on the new ‘stress test’. To sum it up, here’s what’s gonna happen and how it will affect you.

First, let me say this.. IT’S NOT THAT BAD… It will affect those with tighter budgets, but not the vast majority of buyers.

NEW RULE:

-As of October 17, everyone must qualify using the Bank posted 5 year fixed rate. Today, that’s 4.64% (well over the discounted 5 yr, which is averaging around 2.59%..lower with most Brokers).

-borrowing less than 80% of the value of your home allows you to extend your amortization to 30 years…. but not any longer..it now be capped at 25 years.

There were some other changes, but these are the ones that will affect us most. So here’s some other facts the media may not be telling you:

-You remember I said it wasn’t that bad? It’s true. Over 90% of my clients are qualifying already, using the Bank 5 yr posted fixed rates. I suspect that most homebuyers can qualify just as well on October 17, as they can today.

-I’ll repeat…Most homebuyers can qualify easily with a 25 year amortization, but choose to extend that to a 30 year amortization as a fail safe or preventative measure, just in case their incomes are affected in the future … job loss, family illness, child school fees, other financial crisis.

-The govt wants to stop house prices from rising in Toronto, Vancouver and other major urban hotspots. But if you are an investor, earning good income, or have a good down payment, this won’t affect you. Yes, some homebuyers will no longer qualify under traditional lending policies….

-But watch out for the secondary lenders. Secondary lenders AREN’T offering loan shark rates, contrary to what the media might have you believe. They will gain market share as traditional lenders can’t help these borrowers. I’m talking about financial institutions that specialize in that gray market where borrowers don’t quite qualify but can still afford it. They will pay 4% or 5% on their mortgage. (wasn’t that long ago that 4% was a fully discounted AAA rate).