It PAYS to shop around.
Many Canadian homeowners pay too much for their homes because they are not getting the best mortgage financing available in the market.
The mortgage process can be intimidating for homeowners, and some financial institutions don't make the process any easier.
But I’m here to help!
I’m a VERICO Mortgage Advisor and I’m an independent, unbiased, expert, here to help you move into a home you love.
I have access to mortgage products from over forty lenders at my fingertips and I work with you to determine the best product that will fit your immediate financial needs and future goals.
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Home Owner Dreams Dead.... or not?
Are you thinking about purchasing a home this year or know someone else that might be? One of the top banks is advocating to increase the minimum down payment from 5% to 7% and decreasing the amortization from 30 years to 25. So what does that mean for you? Some people might not qualify under the new rules if they are implemented. If you are looking at purchasing a place at $200,000.00 under the current rules, you would need $10,000 as a minimum down payment (or 5% of $200,000). At 7% you would have to come up with an additional $4,000.00 for a total of $14,000.00 as your down payment. As well, by reducing your amortization your monthly payments would increase as well. You would be looking at an additional $104.00 per month which for some could make a significant difference for their budget. Below is an article by Vernon Clement Jones that explains the changes they are considering. If you are sitting on the fence about whether to get into the housing marketing or thinking of refinancing, you may want to take that leap sooner than later and take advantage of our super low rate specials that won’t last long. Give us a call at VERICO ZANDERS Associates Mortgage Brokers Inc. to discuss strategies to ensure your dream of homeownership can become a reality. We can get the BEST mortgage for you! TD economist to Govt: Raise minimum down payment By Vernon Clement Jones | 18/03/2012 5:00:00 PM |15 comments Brokers are guaranteed to bristle at the suggestion, but a top bank economist is among the first to advocate for an increase in the minimum down payment to 7 per cent instead of 5 – an option with significant implications for first-time and cash-back clients. We need to acknowledge that a significant imbalance has developed and it poses a clear and present danger to Canada's medium-term economic outlook,” Craig Alexander, chief economist with TD Bank, said in a report late last week. “It also suggests that further actions to constrain lending growth may be prudent. If the overvaluation was fully unwound rapidly, it would be three times the correction in the early 1990s. While other economists have called for further tightening of the country’s mortgage rules, Alexander is among the first to call for an increase in the minimum down payment to 7 per cent from 5 per cent. He has also broached the idea of instituting a minimum interest-rate floor for income tests, focused on ensuring borrowers can handle a higher rate environment. Another, more commonly debated option, is shortening the maximum amortization to 25 years from 30. Brokers, and their associations, have roundly rejected the need for more stringent mortgage rules, despite near-record high levels of household debt relative to income. That situation became even less sustainable after the Central Bank decided to hold its overnight rate steady last month, further raising concerns that consumers would move to raise their debt levels instead of cutting them. Alexander is now pegging the overvaluation of Canadian home prices at between 10 and 15 per cent. He argues that the real culprit in spiking debt levels has been growing home purchases in the current low interest-rate environment. The outlook is for mild employment and income growth in the coming year, implying that households will gradually become more lever-aged over time, he said.
Minister Morneau announces new benchmark rate for qualifying insured mortgages
For many Canadians, their home is the most important investment they will make in their lifetime. That is why the Government of Canada has introduced measures to help more Canadians achieve their housing needs while also taking measured actions to contain risks in the housing market. A stable and healthy housing market is part of a strong economy, which is vital to building and supporting a strong middle class.
Today, Minister of Finance, Bill Morneau, announced changes to the benchmark rate used to determine the minimum qualifying rate for insured mortgages, also known as the stress test. These changes will come into effect on April 6, 2020. The new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%.
This follows a recent review by federal financial agencies which concluded that the minimum qualifying rate should be more dynamic to better reflect the evolution of market conditions. Overall, the review concluded that mortgage standards are working to ensure that home buyers are able to afford their homes even if interest rates rise, incomes change, or families are faced with unforeseen expenses. This adjustment to the stress test will allow it to be more representative of the mortgage rates offered by lenders and more responsive to market conditions.
The Office of the Superintendent of Financial Institutions (OSFI) also announced today that it is considering the same new benchmark rate to determine the minimum qualifying rate for uninsured mortgages. OSFI is seeking input from interested stakeholders on this proposal before March 17, 2020.
The Contagion of Fear
Fears of a possible coronavirus pandemic are sweeping the world. Markets are jittery with little hard data to go on.
With the first case now reported in Canada, many are recalling the 2003 SARS where Canada was one of the epicenters. Arguably the biggest (economic) lesson from that experience is that fear is the biggest risk to the outlook.
The impact of the SARS pandemic on the Canadian economy is difficult to estimate, confounded as it was by the slowing US economy, the invasion of Iraq and other events, but the Bank of Canada estimated -0.6ppt hit to annualized growth in Q2-2003, or just over 0.1% on the level of GDP.
While it is premature to predict the path of todays coronavirus outbreak, we estimate that a SARS-equivalent pandemic today could have a similar impact on the Canadian economy with an estimated hit of just over 0.1% on the level of GDP by mid-2020, at which point a pandemic should be contained. This estimate is subject to a significant degree of uncertainty with risks skewed to a potentially larger impact.
The effect should not be significant enough to trigger a broader economic malaise, but could this finally push Governor Poloz over the line to proactively stimulate the economy in his next rate call?