You know why you want to become a homeowner, let me show you how.
BLOG / NEWS Updates
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.
Construction intentions for multi-family dwellings in Montréal continue to climb
In October, the value of permits for both single-family and multi-family dwellings increased in the CMAs of Montral and Toronto. However, in the Vancouver CMA, both residential components fell, offsetting the gains in September. Municipalities in the CMA of Montral issued $538.1 million in permits for multi-family dwellings in October, higher than in Toronto ($409.2 million) and Vancouver ($330.6 million). In regards to single-family homes, Toronto registered $451.3 million in permits, followed by Vancouver ($148.1 million) and Montral ($122.4 million). The Montral CMA issued permits approving the construction of 2,956 new units, stemming mainly from multi-family dwellings (2,720). October marked the fifth consecutive month where the number of units approved for multi-family dwellings exceeded 2,000. Vancouver approved the construction of 1,860 new units for multi-family homes, while Toronto (1,691) approved fewer despite having a higher value for the component.
Housing Market Digest by Will Dunning, Economist for Mortgage Professionals Canada
The Office of the Superintendent of Financial Institutions (OSFI) now requires that all residential mortgages by federally-regulated lenders must be stress-tested, at two percentage points above the contract interest rate (or the 5- year posted rate, if that is higher). In combination with the requirements for mortgage insurance, about 90% of all new mortgages will be tested. This can be expected to reduce housing activity by 10-15%. It is on top of the impact from recent rises for mortgage interest rates (another 5-10% drop in activity). The combined 15-25% drop in housing activity will affect the broader economy. In two years, employment could be 150,000-250,000 lower than it would otherwise be. There is a risk that house prices will fall. In a modern economy, a sustained drop in house prices is one of the most dangerous things that can happen: as happened in the US a decade ago, falling house prices can turn into widespread economic decline. Resale activity recovered a bit more in September, to 492,900, due to partial rebounds in BC and Ontario. Activity is flat in most other areas. CREAs House Price Index was flat in September. The year-over-year change is now 10.7% (down from the peak of 19.7% that was seen in April). The sales-to-new-listings ratio (SNLR) was 55.7% in September, slightly above the balanced market threshold of 51%. This indicator points to an outlook for stable prices (at worst). But, as noted, OSFIs stress test policy creates a risk of falling prices. We should, in general, expect that resale activity will trend upwards over time, because the population is growing and the housing inventory is expanding. Therefore, it is useful to look at sales on a per capita basis. Recent activity is below the long-term average.