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Should I wait or buy now
Should I buy now or wait a yearas prices are dropping, but interest rates are rising? I hearthis question daily, and my usual answer drones on about interest rate projections,supply and demand of homes blah blah!! So I thought I wouldrun the numbers and see what makes the most sense based on the numbers, not my opinion! Option 1 - If you bought a home for$100,000 and put 5% downand had aninterest rate of 3.59% on a 5 year term amortized over 25 years you would have monthly payments of $498.46and at the end of the first year you would owe $96,397. That is a decrease in your mortgage of 2.53% over the first year. Option 2 - Lets assume the housing market dropped by 3% over the next yearand interest rates went up by1/2% (most economists are predicting a 3/4% increase in that period). So instead of a $100,000 purchaseyou only have to pay$97,000 and put 5% down, but the rate would be4.09% with monthly payments of $509.29. Now lets look into the future and see which option has the lowest mortgage 5years from the start of Option 1. Option 1 -mortgage balance is $85,467 Option 2 - mortgage balance is $86,300 Plus under Option 2 you would have paid $480more in monthly mortgage paymentsover the last 4 years than you would with Option 1 for a total savings of $1,313 per $100,000 in purchase price if you buy now instead of waiting a year. If interest rates do go up as projected by 3/4% over the next year, we are looking at savings that would offset a drop of closer to5% in values. If you want to discuss your personal situation and have me run yournumbers, please let me know as knowledge is power, and having the info will helpyou sleep better?
Building permits up in Western Canada, down east of Manitoba
Four provinces reported increases in March, led by British Columbia with an increase of 12.8% (+$180 million). Meanwhile, all provinces east of Manitoba reported declines. The largest decrease was in Ontario, down 1.4% (-$43 million) due to lower construction intentions in the residential sector. Quebec drives movement in non-residential permits. The national value of permits for non-residential buildings rose 7.9% in March, due to higher construction intentions for both institutional (+$175 million) and commercial (+$166 million) buildings. Gains in both of these components stemmed from Quebec. A high value permit for an addition to the Centre hospitalier de lUniversit de Montral drove the increase in the institutional component. In the industrial component, the value of permits declined 15.6% in March (-$102 million). The decrease was largely the result of lower construction intentions in Quebec, where multiple high-value permits were issued in February.
Canadian home sales edge higher in March 2019
Home sales via Canadian MLS Systems edged up 0.9% in March 2019 following a sharp drop in February, leaving activity near some of the lowest levels recorded in the last six years. There was an even split between the number of markets where sales rose from the previous month and those where they waned. Among Canadas larger cities, activity improved in Victoria, the Greater Toronto Area (GTA), Oakville-Milton and Ottawa, whereas it declined in Greater Vancouver, Edmonton, Regina, Saskatoon, London and St. Thomas, Sudbury and Quebec City. Actual (not seasonally adjusted) sales activity fell 4.6% y-o-y to the weakest level for the month since 2013. It was also almost 12% below the 10-year average for March. That said, in British Columbia, Alberta and Saskatchewan, sales were more than 20% below their 10-year average for the month. By contrast, activity is running well above-average in Quebec and New Brunswick. It will be some time before policy measures announced in the recent Federal Budget designed to help first-time homebuyers take effect, said Jason Stephen, CREAs President. In the meantime, many prospective homebuyers remain sidelined by the mortgage stress-test to varying degrees depending on where they are looking to buy. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to in the future, added Stephen.