News, Views and Trends!
Rate forecasting isn’t rocket science – it’s more common sense than you think! But, it requires a clear mind to make sense of all the rubbish that’s being published these days.
I’ve been forecasting for a while now that interest rates would start to come back down this year. Currently, interest rates are down by around 0.4% and will come down further.
WHY ARE RATES FALLING? Continue reading “Mortgage Rates have Dropped and Will Fall Further”
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?”
Could 2018 be the year where the pessimists finally get their way? I hate to admit it, but this could be the year where buying a home may not be a good idea.
OK, just kidding!!!
But after years of seeing countless articles and posts about rising interest rates, housing affordability issues, mortgage stress tests disqualifying some people from being able to buy, higher personal debt levels, NAFTA economic fears and Donald Trump (ok, Trump has nothing to do with this, but you can’t write an article these days without blaming him, right?!), does it still make sense to buy a home?
Yes! There is positive news. You can still buy a home. And you can still qualify for a mortgage.
Continue reading “Buying a home is cheaper than renting. Don’t be intimidated!”
Ever since the US 2008 sub-prime mortgage crisis, we’ve seen a never-ending string of change. Mortgage lending rules have become tougher and tighter. Underwriting is stricter and more thorough. (As usual, the government has not missed an opportunity to stick their nose into your business by making lenders ask for more income documentation.)
The rule of change is that it takes around six months for consumers to adjust.
Continue reading “Six Months was What it Took to Absorb Latest Mortgage Changes!”
Mortgage stress test is the buzz phrase in mortgage lending for 2018. Every borrower, regardless of how much down payment you’re making, must pass a stress test to qualify for a mortgage. The math is simple, yet intimidating. Lenders must now use your mortgage contract rate PLUS 2.00% to qualify you.
Yes, that’s correct. You need to qualify at a rate that’s 2.00% higher than your actual rate. And it doesn’t matter if you have 35%, 40%, 50%, 60% or even 70% down payment. That will not have any impact on your approval. It’s all about how much income you can prove you earn and the strength of your credit worthiness.
For many, this new rule will prevent them from qualifying for a mortgage. And for seniors or people approaching retirement who still require a small mortgage to get through the next 10 or 20 years, these new mortgage rules are a killer. The stress test is surely causing stress among many Canadians!
I’M RETIRING AND WANT TO STAY IN MY HOME…
A reverse mortgage is a terrific option for homeowners who are at least 55 years old. It empowers them to be able to stay in their home and access tax-free equity without having to make regular payments.
Continue reading “Reverse Mortgages growing in popularity… Product of the year 2018?”
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