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Posted 14 Comments on Introducing the new TD mortgage…hand-cuffs included Mortgage News

Introducing the new TD mortgage…hand-cuffs included

The rumors are true…TD Canada Trust will begin registering all mortgages as collateral charges after October 18.    (No official release from TD yet but a source inside TD has confirmed this to us).

What does this mean for the consumer?  Well, there is some good but mainly it’s bad..…

  • a collateral mortgage is normally registered for floating or revolving debt such as a secured line of credit.  It allows for the balance to float up or down.
  • TD will register a collateral charge for 125% of the loan amount… this will allow the client to come back at a later date and apply to increase their mortgage if needed….
  • in theory, it sounds great…no legal fees required in the future if you need to refinance… and easy approval…

BUT HOLD ON…

  • a COLLATERAL MORTGAGE is NOT really portable…meaning you cannot transfer to another institution…that’s because no other Bank or Lender is accepting collateral mortgages for transfer… including TD…you will lose some leverage to negotiate the rate when your mortgage matures…
  • and if you wanted to increase your mortgage in the future, you would need to reapply for approval…let’s suppose you don’t qualify in the future..not because your situation changed but because the Bank’s lending policy changes…this happens regularly….you would now have to seek out an entirely  new 1st mortgage as no other lender would register a 2nd mortgage in behind a collateral first mortgage (at least none that I am aware of)…  that could mean penalties, definitely legal fees and other costs….
  • It’s obvious that a big reason TD would be doing this is to improve mortgage retention.. this makes it less appealing to leave TD because of the costs….
  • BOTTOM LINE…this type of mortgage limits your options..it doesn’t expand them.. you MAY save on legal fees..but that’s not a big enough reason to go with this product..

My advise to anyone looking at a TD mortgage is to be careful…make sure you understand all the terms, conditions, the differences and the limitations…you be the judge… is this a good thing for the client or is it a good thing for the Bank??  Will other Banks follow?  Some might say this is like putting handcuffs on the client… I tend to agree…

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 Mortgage News

Govt pondering tightening mortgage rules further?

The Federal Minister of Finance, Jim Flaherty, made some comments about possible mortgage tightening policies…. see both Winnipeg Free Press, Reuters, and the Financiap Post.  The govt is concerned about a possible ‘overheating’ of the housing market.

The honorable Minister just needs to wait for September’s figures to put that concern to rest.   The numbers aren’t out yet, but early indications show that the housing market has definitely slowed down.  Prices are flat and in some cases, have decreased.

Further tightening of Canada’s mortgage policies are not necessary in my opinion… but this does bring up an interesting situation for anyone that is refinancing their mortgage or looking to buy a house…

My advice…get your mortgage preapproved immediately….no need to chance any possible rule change….

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…