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What is your Best Rate?
Recently I had some good friends of mine ask what the going interest rates are and more importantly what is the best rate could I get them. Obviously not an uncommon question in my line of work but this is no longer a quick and easy question. Last year if I wanted to be a little cheeky (depending on who was asking) Id respond with a question of my own, like whats your credit score? 9 times out of 10 there would be an awkward pause and blank stare followed by a does it matter? Yes, yes it does. Once we got through that portion of the conversation Id then begin talking about the rates. But that was 2016, and now that it is 2017 the rate game has become a little like the did you see what Trump just tweeted conversation that is making people yearn for the days of old. Last October Finance Minister Bill Morneau announced significant changes* to our industry which included new securitization rules and qualification requirements. These changes forced lenders to adjust their pricing models to account for the increased costs of doing business and those costs have been handed down to you the borrower. Prior to that announcement I had a nice simple rate sheet that told me what every lender was offering. Now my rate sheet could easily be 5 pages long and it would still be incomplete. Credit scores were once the driving factor in your interest rate, now Mortgage Brokers should be asking you a laundry list of questions to determine what mortgage is best suited for you long before they tell you the best rates. Here are some questions you need to be prepared to answer before you can start asking about the interest rate. Is this a purchase or refinance? What is the loan to value percentage? What term and amortization would you like? What type of property are you wanting to mortgage? Can you prove your income? Can you stomach the idea of a very large penalty if you need to break the term? These are just a few of the questions your Mortgage Broker needs to ask when you to properly evaluate what the best rate for you is. Do you want to know where you fit into the new world of mortgage rates? Please give me a call or send me an email and I would be happy to help. *Industry Changes: Department of Finance and Article from the Globe and Mail Mortgage Tip: Do you know what is on your credit report? Check your report for free.
Toronto index stopped trending down in January
In January the TeranetNational Bank National Composite House Price IndexTM rose 0.3% from the previous month, a tic higher than the historical average for January and a second consecutive monthly increase. However, only four of the 11 metropolitan markets surveyed showed gains the first time since January 2016 that a rise in the Composite Index has had so little breadth. It was due mainly to a second straight monthly jump of the index for the important Vancouver market (1.2% in January on the heels of 1.3% in December). The Toronto index rose 0.2%, the Victoria index 1.0% and the Montreal index edged up 0.1%. All the other component indexes were down on the month: Hamilton (0.2%), Ottawa-Gatineau ( 0.2%), Edmonton (0.3%), Calgary (0.3%), Halifax (-1.0%), Winnipeg (1.1%) and Quebec City (2.0%). For Montreal, it was a 13th monthly increase, and for Hamilton it was a fifth decrease in a row. The rise of the Toronto index was the first in six months. The raw (unsmoothed) Toronto index  on which it is based was up for a third consecutive month. The firming of the smoothed index is due entirely to condo dwellings. The smoothed index for non-condo units fell in January for a sixth straight month, bringing its cumulative decline to 9.6%. Click here for full release. https://housepriceindex.ca/2018/02/toronto-index-stopped-trending-down-in-january/
2018 CMHC Prospective Home Buyers Survey
In October 2017, CMHC surveyed 2,507 prospective home buyers on-line. Respondents were all prime household decision-makers who intend to purchase a new home within the next two years, including approximately 1,500 First-Time Buyers, 500 current owners, and 500 previous owners. The survey results highlight that: First-Time Buyers and Previous Owners share the same top motivator to purchase a home: they want to stop renting. Improved accessibility (physical obstacles and barriers) and investment opportunity were also noted as top motivators across all groups. Changes to mortgage regulations and concerns about possible future interest rate increases were not among the top motivators. Over four-in-ten First-Time Buyers and Previous Owners say they would delay their home purchase if they were not able to find their ideal home, with a fairly similar proportion saying they would be willing to compromise on the size of the home and location. The majority of future home buyers intend to obtain a mortgage to finance their home purchase, with First-Time Buyers showing higher incidence compared to Previous Owners and Current Owners. Across all future home buyers groups, more than six-in-ten say they are likely to have a financial buffer in case their expenses change in the future. Furthermore, the majority of future home buyers, especially Current Owners, agree that they feel confident they have the necessary tools and information to manage their mortgage and debt load. Among all groups, the two most common actions completed one to two years prior to the purchase of a home were saving for a down payment and determining what type of home to buy. On the other hand, in the last three months before purchasing, about two-in ten of prospective buyers pre-qualify for a mortgage. About one-in-four prospective home buyers stated that they would be very likely to consider delaying their purchase in the event of an increase in interest rates.