So back to that penalty issue… have you wondered how some lenders charge such a high penalty when the mortgage term is almost over? This is an obvious retention tool the banks leverage to keep you on their books!

 One of the many considerations we have when finding you the best mortgage is how they calculate penalties, as the market and your needs can easily shift throughout the term of your mortgage.

 Do they charge a reinvestment fee as well? Do they have hidden clauses about firm sales? Do they charge a premium on top of the interest rate differential (IRD)?  

 Below are two examples of how lenders are calculating penalties. Which one would save you the most amount of money not only when you first get a mortgage, but also if you need to make a change? This is one of the many advantages of having our team help you without bias to understand the different available options and the terms lenders use to make more money from borrowers. We help you keep your hard-earned money in your pocket.

 At the Angela Calla Mortgage Team, we first look to place your mortgage with a lender that does not use posted rates!

 Angela Calla, AMP

Dominion Lending Centres-Angela Calla Mortgage Team

Host of The Mortgage Show Saturdays at 7pm on CKNW AM980

Phone: 604-802-3983 Fax: 604-939-8795

“An introduction to someone you care about is a big responsibility…it’s also the biggest compliment a client can give us & it’s not taken lightly. We pledge to treat everyone that is referred to us with the utmost respect & professionalism”.

www.angelacalla.ca

Reach my Team Chris Adkins & Denzil Anderson at 604-939-8777 & callateam2@dominionlending.ca

In a recent Bank of Montreal survey, a First-Time Homebuyer is 29 years old and has saved a $48,000 down payment for a $300,000 home purchase.

Who fits this profile?

If you fit this average, it will take an annual household income grossing $40,000 per year (earning approximately $20 dollars full time and past your probationary period). If you are self-employed, this $40,000 income would have to be your net income based on at least two years of tax returns.

What if you don’t fit the average?

Lots of young Canadians find it next to impossible to save $48,000 for a down payment. Instead, they may be able to scrape together a 5% down payment ($15,000 using the $300,000 purchase price example) with a combination of savings, RRSPs and a gift.

You still have options – Your gross annual income needs to be: $50,000 – Your monthly mortgage payment with today’s average rates will work out to: $1,370

What can you buy?

Here are examples of over 800 homes within 45 minutes of Vancouver that are all 2 bedroom, 2 bathrooms with insuite laundry: http://rboies.mlslink.mlxchange.com/?r=903314772&id=363434333136.312

Home ownership comes with other expenses as well, including maintenance fees (condos/townhomes) and taxes which range from property to property. When you look at the fundamentals apparent in your personal scenario, home ownership may be easier than you think!

Angela Calla, AMP Dominion Lending Centres-Angela Calla Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980 Phone : 604-802-3983 Fax: 604-939-8795 Email: acalla@dominionlending.ca www.angelacalla.ca

On this edition of The Mortgage Show with Angela Calla Rob Boies of Royal Lepage joined us to discuss the flags not to be ignored  

To reach Rob Boies directly call 604-341-3009 or robboies@royallepage.ca

Clich here to listen now! Rob_Boies_Interview_-_April_11th_.mp3

The average Canadian homeowner doesn’t think they’ll be mortgage-free until they’re 57 – two years longer than what they expected last year, a survey by CIBC suggests.

 The survey also found that half of those surveyed said other debt, from credit cards to lines of credit, have increased and impeded their ability to pay off their mortgage more quickly.

“Our view would be that Canadians are taking a look at their broader finances and are working to pay down other debts first to reduce their interest costs,” said Colette Delaney, EVP of mortgage, lending, insurance and deposit products at CIBC.

“Those with a growing amount of non-mortgage debt are less likely to be taking extra steps to pay down their mortgage, and this can lead to a longer payback period.”

Click here for the full Global News article.

Click here to read the CIBC press release.

To make sure you can be Mortgage Free as soon as possible contact The Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca  we can restructure your mortgage to include the outside debts to improve your cashflow and reduce your interest costs.

We are happy to inform you there is a mortgage product avaliable to help you

There is an option where you can now qualify to take their ex-spouse off the title/mortgage of the house and re mortgage up to 95% value of the home instead of 80%. 

It’s always unfortunate when things don’t work out the way you want them too but at least this may help some people keep their homes. 

During the separation of assets, it can be unfamiliar territory where you can lose a lot of money.  It is good to know someone that can help look at ways to save you as much money as possible.

Contact us for handling these private and delicate family matters.

Angela Calla Mortgage Team

604-802-3983 callateam@dominionlending.ca

Host of The Mortgage Show Saturdays @ 7pm on CKNW

Finance Minister Jim Flaherty shouldn’t interfere with mortgage pricing set by the country’s lenders, Bank of Nova Scotia Chief Executive Officer Richard Waugh said

Flaherty, who has taken steps to cool the housing market in a bid to avert a crash, raised concerns last month over reduced five-year mortgage rates offered by Bank of Montreal and Manulife Financial Corp. amid record levels of household debt in Canada. Both lenders have since increased rates.

“I understand why the finance minister is concerned about the Canadian economy, but I just philosophically don’t think” government should be setting product pricing, Waugh said yesterday in an interview in Halifax, Nova Scotia, where the bank held its annual shareholders meeting. “Despite the difficulties of central banks to use interest rates, the alternative of trying to manage specific products or prices, to me, is fraught with difficulty.”

Scotiabank hasn’t been approached “that I’m aware of,” by Flaherty over the Toronto-based bank’s mortgage rates, said Waugh, 65. He said Canada will have a “soft landing” in the housing market instead of a full-scale crash.

“Volumes for mortgage brokers and banks will be affected, but I don’t see it as a credit event of any significance,” said Waugh. Kathleen Perchaluk, a spokeswoman for Flaherty, didn’t return e-mails seeking comment.

Canada’s third-largest bank may expand in unsecured lending, such as credit cards, Waugh said. The bank had avoided expansion in that area in the aftermath of the financial crisis, he said.

Unsecured Lending

“The unsecured credit card and personal loan portfolio has behaved better than we thought,” said Waugh, who is also a vice chairman of the Institute of International Finance. “As the world is healing, I think that gives us an opportunity to expand what we call our risk appetite and take more of a prudent risk on our unsecured credit.”

In October, Waugh relinquished his role as president and was succeeded by Brian Porter, paving the way for an eventual transition to the top job. Waugh declined to say when he will retire and wouldn’t say whether he will still be CEO at the bank’s next annual meeting in Kelowna, British Columbia.

Related

“It’s not imminent, but it will happen in a timely manner,” Waugh said. “There’s lots of things I’m planning to do and healthy to do. There will be a time, but I’m not going to disclose that right now.”

Foreign Trade

One of the issues Waugh plans to pursue as CEO and into his retirement is urging Canadian companies to boost trade with emerging-markets countries, the subject of his speech at yesterday’s shareholder meeting. In addition to his own bank, Waugh cited Linamar Corp. and Magna International Inc. as firms that have seized the opportunity.

“There is this sense of, perhaps, growing protectionism,” in countries such as the U.S., Waugh said. “It has to be done right now, because it’s not going to get better. The European and American companies are going to get stronger and boy, when that comes, competition’s really going to be keen.

Bloomberg.com

To review your borrowing options contact The Angela Calla Mortgage Team 604-802-3983 or callateam@dominionlending.ca

DID YOU KNOW…

The Home Buyers’ Plan (HBP) is a program for first-time homebuyers that allows you to withdraw funds from your RRSPs to buy or build a home. You can withdraw up to $25,000 tax-free ($50,000 for a couple). Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You’ll have to repay an amount to your RRSPs each year until your HBP balance is zero. If you don’t repay the amount due for a year, it will have to be included in your income for that year. Click here for more information from Canada Revenue Agency.

Questions for your first home purchase? Contact us today

Angela Calla Mortgage Team

callateam@dominionlending.ca

604-802-3983

 
You may have heard about already low interest rates getting even lower and wonder what to do with this information!

When there is a change in rates of 0.5- 0.8 of a percent it’s worth it for us to work the numbers to see if there is any additonal savings by taking advantage of todays lower fixed rates, and securing that for you for a longer period of time, so if you have an interest rate of 3.5% or higher it justifies a review.

A mortgage should be reviewed quickly each year; we find it easy to remember to review your mortgage when you get your taxes done as you will have your documents handy. This way you ensure even if you did your mortgage only a year ago you can ensure you are always saving the most amount of money and optimizing the current mortgage market.
 

Thanks and have a great day,
Angela Calla, AMP
Dominion Lending Centres-Angela Calla Mortgage Team
Host of The Mortgage Show Saturdays at 7pm on CKNW AM980
Phone: 604-802-3983 Fax: 604-939-8795
“An introduction to someone you care about is a big responsibility.it’s also the biggest compliment a client can give us & it’s not taken lightly. We pledge to treat everyone that is referred to us with the utmost respect & professionalism”.
www.angelacalla.ca <http://www.angelacalla.ca/> 
Reach my Team Chris Adkins & Denzil Anderson at 604-939-8777 & callateam2@dominionlending.ca

Courtesy of the Globe and Mail March 2013

Finance Minister Jim Flaherty has pressed Manulife Bank into reversing a mortgage-rate cut, underscoring the government’s determination to prevent lenders from stoking the housing market at a time of soaring consumer debt.

Mr. Flaherty instructed one of his officials to call Manulife on Monday night and indicate displeasure at its move to lower the rate on a five-year fixed mortgage to 2.89 per cent from 3.09 per cent, saying its new promotion was “unacceptable,” according to his spokesperson.

Unlike two weeks ago, when the Finance Minister personally scolded Bank of Montreal for cutting its rate to 2.99 per cent, his warning was heeded.

The unprecedented intervention reflects deep concern about residential real-estate prices and debt. The number of home sales has dropped markedly since Mr. Flaherty changed the rules last summer to make it more difficult to obtain mortgages, but house prices have not come down significantly in most areas of the country and debt-to-income levels continue to hit new highs.

A mortgage-rate war as the spring selling season begins could undo his steps to cool the market.

But the Finance Minister’s decision to intervene personally with rate-setting decisions is raising questions about the degree to which he should attempt to influence prices in the private sector. And it angered some bankers who suggested that Ottawa is not treating all financial institutions equally, while interfering with market forces.

For instance, a top executive at one of the big banks noted that tighter mortgage underwriting guidelines imposed by the federal banking regulator last year did not apply to provincially regulated credit unions, giving the latter an advantage. If the real goal of policy makers is to raise rates, then the Bank of Canada should raise interest rates, he said.

“Don’t sit there and tell the banks not to compete and not to be aggressive,” said the executive, who did not want to be named. “You can’t control it by telling a few banks and insurance companies what to do.”

Consumers are generally able to negotiate with banks to obtain mortgage rates below the advertised price, and many lenders are offering rates as low as the one promoted Monday by Manulife Bank, which is a fairly small player in the market.

The Finance Minister told reporters Tuesday that he was pleased by Manulife’s response. “I had one of my staff call and indicate my displeasure, which is the same thing I did with Bank of Montreal except [in that instance] I called myself,” he said. The concern is that by promoting ultra-low rates, lenders could spur a rebound in the housing market.

However, Mr. Flaherty and many economists believe that the current slowdown is healthy and will prevent a more serious market correction down the road.

Chartered banks had $865-billion in outstanding mortgages as of December, according to the Bank of Canada. And the government also has a keen interest in the country’s mortgage market because it backstops mortgage insurance, leaving taxpayers exposed to any serious upheaval, said National Bank Financial analyst Peter Routledge. In that sense, Mr. Flaherty is wisely using moral suasion to minimize potential future losses to government coffers, he said.

“I can’t think of another situation I’ve seen where government has intervened like this and caused a reversal in a pricing decision,” Mr. Routledge added. He said that Mr. Flaherty is now using this tactic because he’s already tightened mortgage insurance rules four times since 2008, and the central bank is maintaining low interest rates.

“Can you imagine a Conservative government trying to put a price control on the market?” Mr. Routledge said. “It underlines the seriousness of the problem of household debt.”

Glen Hodgson, vice-president and chief economist of the Conference Board of Canada, said Mr. Flaherty’s intentions are good, but his actions carry risk.

“He should be very careful about singling an individual bank out repeatedly. I mean, it’s legitimate for banks to want to win market share and clearly they think they can make money,” said Mr. Hodgson, who has worked at the federal finance department and Export Development Canada. “If ministers want to influence the course of markets in Canada, they can either use soft power or hard power, and this is him using the bully pulpit of the finance minister, to try and influence behaviour. I mean he can use much sharper tools if he wants. I wouldn’t encourage him to do that.”

NDP Leader Thomas Mulcair said Mr. Flaherty’s interventions are inappropriate.

“It’s banana-republic behaviour,” Mr. Mulcair said. “We live in a society based on the rule of law. Parliament enacts laws, the administration can have regulations, you can have orders in council, but since when do you use political weight to push back on financial institutions responding to a market parameter that’s totally legal?”

Liberal MP Ralph Goodale, who was federal finance minister from December 2003 to February 2006, said Mr. Flaherty’s “dubious” actions raise a lot of serious policy questions.

Mr. Goodale said in his experience, interactions with banks were largely handled by the department’s deputy minister or other public servants, not the minister or political staff. He said Mr. Flaherty should meet with all the heads of banks as a group if he’s concerned about mortgage rates, rather than dealing with banks one at a time.

“Are we now into a situation where the minister is regulating retail rates?” he asked. “Well, that’s a pretty fundamental change in the way our financial institutions have operated.”

Bankers were extremely reluctant to speak on the record Tuesday for fear of further public rebukes. “No one’s going to risk having a comment on this issue for fear of irrational actions from Ottawa,” one banker said.

Contact the Angela Calla Mortgage Team to review your mortgage options today 604-802-3983 or callateam@dominionlending.ca