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CategoryReal Estate Trends

Posted Mortgage News

Annual Mortgage borrowing stats are strong

The Canadian Association of Accredited Mortgage Professionals (CAAMP) released it’s Annual State of the Residential Mortgage Market in Canada, today.   The stats show that mortgage defaults are not a concern….and Canadians can absorb up to another $300/mth in higher mortgage costs…and we have 72% equity in our homes… wow, that’s quite impressive….

I’m amazed at how the media is reporting these stats… look at this headline “Canadian Mortgage Debt tops $1-Trillion for first time”. Well, here are the highlights of the report… the numbers look good to me…

• 35% of all mortgage holders have either increased their payments or made a lump sum
payment on their mortgage in the last 12 months
• Vast majority of Canadians have ability to afford higher mortgage payments. 84% said
they could handle monthly increases of $300 or more in their monthly payments
• 90% of Canadian homeowners have at least 10% equity in their homes, 81% have over
20% equity
• 70% of Canadians are satisfied with their mortgage terms
• Despite low Bank of Canada interest rates reflected in low variable rate mortgages, a
majority (66%) of Canadians still have a five year fixed mortgage, 29% have variable
mortgages and 4% a combination
• Overall, 22% of mortgages have an amortization of greater than 25 years compared to
18% last year
• Overall home equity is 72%. For homeowners with mortgages, equity level averages
50%
• Mortgage rates continue to drop. Average mortgage rate is 4.22% versus 4.55% last
year. For those who took out a mortgage in the last year, the average rate was 3.75%,
72% of those renewing saw a decrease in their mortgage rate
• Overall, mortgage brokers account for 25% of all mortgages and for new mortgages in the
past year, this number rises to 40%
• As of August 2010, there was over $1 trillion in outstanding residential mortgage credit in
Canada
• Mortgage arrears rate remains stable at 0.42%, lower than for most of the 1990s

Posted 5 Comments on CREA and Competition Bureau reach agreement on MLS Real Estate Trends

CREA and Competition Bureau reach agreement on MLS

A deal was struck earlier this week that will make it easier for seller’s to list their homes on MLS… The Competition Bureau hopes we will see some changes in real estate commissions….click here for the CBC article.

Currently, a seller pays 5% or 6% to sell their home… and that’s been the standard for many years… But with new technology and the internet, we have seen For Sale By Owner companies popping up everywhere.    These companies have not been able to access MLS without employing a realtor.

We all want to save money and pay less… but there is a saying…’you get what you pay for’..    For some, paying a reduced flat fee, and handling viewings, the negotiations, etc, could be worth savings…. but others may not have the expertise, the knowledge or the time to deal with this….

In the end, I think choice is good.   It remains to be seen how many people will move away from the traditional real estate agent and handle things on their own…   Just beware of something that sounds too good to be true…

 

Posted 8 Comments on Canadians buying Florida property… what to consider Real Estate Trends

Canadians buying Florida property… what to consider

I must admit, the idea of owning a property in Florida sounds kinda nice… and who wouldn’t want to buy real estate at rock bottom prices…?  We did some investigating to see if the opportunities are as good as we hear.

Here’s what we found out based on our inquiries and research:

  • Property values are down between 50% and 70%…wow!
  • But there are some challenges to buying and financing these properties…
  • Most lenders don’t want to entertain offering a mortgage to foreign buyers…
  • There is one Lender that will lend in Florida and a few other States to Canadians… up to 50% of the Purchase price with a minimum mortgage of $200,000CAD.
  • you can also look at taking equity out from your Canadian property or paying cash.
  • There is also a big concern with the Homeowner’s Association and condos..click here for 7 Questions to ask before buying a condo in the U.S.

Bottom line…  house values have dropped significantly…  they could drop even further but there is more potential for an increase vs a decrease over the next 7 years….. add in record low interest rates and a healthy demand for rentals and it’s probably a good time to buy in the Florida and other parts of the U.S.

Keep in mind that any real estate investment should come with a plan to hold for at least 7 years…(click here to read why)

Posted Real Estate Trends

Mls will be more readily available to consumers

On thursday September 30th, the Canadian Real Estate Association (CREA) and Competition Bureau of Canada came to an agreement to allow easier access to their Multiple Listing Service (MLS).  More details from the Globe and Mail.

Earlier this year, the Competition Bureau was making a lot of noise for CREA claiming that the MLS should be more readily available to consumers…  it seems this new compromise will allow a seller the option of choosing services from a licensed realtor.  It’s sounding like we could start to see flat fees being charged by companies to list their home on MLS.

Watch for more ‘For Sale By Owner’ companies (FSBO) to pop up in the coming months…. but also beware of deals that sound too good to be true… One of the concerns raised by CREA is that we could see shoddy service and even fraud.  I guess time will tell….  As always, get recommendations, seek professional advice and opinions…

Posted Mortgage Tips

Sell your home with a below market interest rate

Saw an article this week that talked about low mortgage rates being used an incentive to help sell your home faster.   Most mortgages are assumable, meaning the buyer of your home can take them over upon qualification.

If interest rates increased significantly, then having a 3.69% mortgage could lead some buyers to your home.

Another strategy that is used during a slower housing market is to buy the interest rate down to below market rates… this is something that would need to be negotiated at the time of signing the mortgage but it is offered by a few major lenders…