My father keeps the news on constantly. It’s like an addiction, and CP24 is his drug of choice. It hurls bad news all day and all night. Not because it’s helpful, or even that interesting – but because it keeps his eyeballs on the screen. My father isn’t alone. CP24 and other 24-hour news sources are tattooed onto screens across the country.
Unfortunately, a lot of that bad news has to do with the housing market. It seems as though there’s a constant parade of “experts” telling you that we’re in a bubble. To sell now and rent until the market corrects itself. To avoid “risk” and go with a fixed rate mortgage.
This last myth in particular has gone viral and needs to be dispelled.
Continue reading “What Nobody Is Telling You About Fixed Rate Mortgages”
Quick, what’s the first thing that comes to mind when you think of “second mortgages”? For some, it could be that shady-looking character in a smoke-filled pool hall… guys with gold chains and a baseball bat nearby. Maybe you’re thinking of someone in financial trouble? Or, perhaps it’s just someone who doesn’t want to pay outrageous costs and penalties to refinance their existing mortgage.
The mere mention of second mortgages conjures up all sorts of images. Most of them, negative. For many, a second mortgage can be a last-resort solution during a financial crisis. For several others, it can be an opportunity to save money. That’s right, to save money.
Sure, second mortgages carry a higher interest rate than first mortgages, but they can also serve a purpose. One of those purposes can be to save you money. Yup, I said it again. There are some new trends emerging with today’s new mortgage products that are forcing consumers to seek other options. Two of these trends are INFLATED PREPAYMENT PENALTIES and NO FRILLS MORTGAGES! Continue reading “When a Second Mortgage makes good financial sense.”
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?”
I reviewed some recent stats that explain how overall mortgage growth has fallen to its lowest level in the past 17 years!
Overall, mortgages outstanding across Canada total more than $1.5 trillion. And, while this total continues to increase year over year, the rate of growth has decreased. We should pay attention to this!
Typically, when we experience lower mortgage growth or no growth at all, house prices will follow suit and come down.
But, why aren’t the banks up in arms over this given that they make huge profits by lending money? (More on this below.)
Continue reading “Mortgage growth has slowed… so why are BANKS winning & CONSUMERS losing?”
There’s nothing surprising about the loosening of mortgage standards to spur growth. In the last real housing bubble of 1990, banks and government brought in stricter lending rules, making it tougher for borrowers to get a mortgage.
Fast forward to the present. We’ve yet to see a housing bubble or market crash, but the government has taken drastic – perhaps even unheard of – precautions to slow the housing market.
In 1990, I was working for the largest trust company in Canada. I can tell you that it has never been harder to qualify for a mortgage than it is today!
Continue reading “Looser Mortgage Standards Hit the UK! Is Canada Next?!”