Are there pitfalls to the “early mortgage renewal”?

General Angela Calla 15 Jul

Are there pitfalls to the “early mortgage renewal”?

The Globe & Mail highlights six excellent points to consider.

  1. Consider ALL switching costs and savings
  2. Consider the risk of rising rates
  3. Don’t overestimate the risk of rising rates
  4. Factor in the hassle element
  5. Shop around (or use a mortgage broker!)
  6. Don’t succumb to pressure tactics

Lots of great information in this article so be sure to check it out.

 

The best mortgage plan is one that is developed by assessing your goals and life stage. The Angela Calla Mortgage Team will help you personally call us at 604-802-3983 or email callateam@dominionlending.ca

More than half of first-time home buyers are using mortgage brokers to get financing

General Angela Calla 15 Jul

A Canada Mortgage and Housing Corporation (CMHC) survey suggests more than half of first-time home buyers are using mortgage brokers to get financing. Read the full article from CBC news HERE

Questions on determining the best mortgage for you and your future? The Angela Calla Mortgage Team is here to help call us at 604-802-3983 or callateam@dominionlending.ca We look forward to helping you.

 

 

 

 

Young first-time buyers flooding the housing market

General Angela Calla 15 Jul

According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), first-time home buyers are the MAIN drivers behind housing markets across Canada! LOTS of great stats in this Calgary Sun piece.

Read the Full article HERE

The Angela Calla Mortgage Team is here to help you personally with your mortgage related questions contact us directly at 604-802-3983 or callateam@dominionlending.ca


5 things to know about July 2015 rate cut from the BOC

General Angela Calla 15 Jul

1.  This is now the lowest prime rate we have seen since 2009.   There have

been 2 prime rate reductions already this year.

2. The banks don’t always respond and reduce their Bank Prime Rate.  They pocket the difference as a profit when they are borrowing money, so it’s common after a rate reduction for them to respond slower and in the most recent reduction they did not match the rate decrease in full.

3. While rates have been at a historic low (or close to it) for the past several years, this does not generally impact your ability to qualify for a

higher loan amount.   So far, there has been no change to the qualifying

rate required to get a variable rate mortgage, which is more than double that of the rate you will actually receive. Variable rate qualification is based on a rate of 4.64%.  In terms of a payment reduction for existing mortgages, only expect an approx $4.00 per 100K. This provides an opportunity to optimize your mortgage by keeping your payment the same or increasing it.

4. Fixed Rates are primarily based on the bond market and Variable Rates are tied to prime rate- whom you select as your mortgage consultant for life must have a plan for watching these indicators, while also putting together a long term mortgage strategy for you.

5. If you have a VRM or LOC, you don’t have to do anything to receive the rate reduction- the lenders will do it for you automatically once they have decided how they will choose to follow the BOC’s announcement.

Want to ensure you have the best mortgage? The Angela Calla Mortgage Team can help you directly at 604-802-3983 or callateam@dominionlending.ca. Contact us today!

Bank Of Canada Reduces Overnight Rate

General Angela Calla 15 Jul

 

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Good Morning,

Prime was reduced this morning from the current .75% to .5%. Bank Prime is different than The Bank of Canada Prime Rate. Here is the press release from this morning. http://www.bankofcanada.ca/2015/07/fad-press-release-2015-07-15/

Like earlier this year the Banks will not likely follow this adjustment in its entirety. One large bank has decided to only reduce there prime to 2.75 (10 basis points ) on Thursday. More details here: http://www.cbc.ca/news/business/bank-of-canada-cuts-benchmark-interest-rate-to-0-5-1.3152673 

The other lenders will announce later and usually all end up reducing their prime accordingly. For a variable rate mortgage holder this could mean up to a reduction in the payment due approx $4.00 per $100,000.00 carried in mortgage on average monthly. This is an oppertunity to pre pay your mortgage by keepng the payments the same or increasing your payments, so keep an eye out for your next statement or preview your mortgage online.

Should you have any questions about your mortgage, require a rate hold for you or someone you care about, or would like to ensure you have the mortgage to result in the most savings, email us today at acalla@dominionlending.ca or call 604-802-3983 for us to help personally.

Have a good week.

Angela Calla, AMP

DLC-Angela Calla

604-802-3983

Buying a foreclosure

General Angela Calla 8 Jul

 

In Canada we have an extremely low foreclosure rate compared with other parts of the world. By most estimates we currently hover at around 0.30%. The US is closer to 1.2%, and Greece is hitting as high as 33%.

Credit our tightly regulated lending environment for that rate not rising past 0.40%, even during the 2009 economic crisis. At our loosest, Canada was still much tighter than most other nations.

Also Canadians do not easily give up on their homes.

This said, if shopping for a new home or an investment property, there are usually one or two foreclosure properties worth considering in your target market. It is true that foreclosures often sell at a discount from current market value, but typically not that significant of a discount.

Things to consider: Writing the initial offer you can insert ‘subjects’ such as appraisal, inspection, and financing and have a comfortable length of time to prepare a budget based on detailed quotes for any work that needs to be done to restore the property.

The offer will be written to the lender, not the original homeowner who is now just the occupant.

The former homeowner/current occupant may be able to occupy the property right up until the day you take possession. There is no guarantee that they will not take the appliances, furnace, lighting fixtures, or anything not nailed down when they leave. There is essentially a (perhaps bitter) third party occupying the home that you are buying in as-is condition. Not ‘as-is’ when viewed, as is standard in a transaction, but ‘as-is’ the day you are handed the keys. For this reason a vacant property is often preferable, as there is reduced risk of further damage to the property.

The alternative is preparing your financing in advance of writing an offer and showing up on the assigned day in court and making a competing sealed bid.

 

The judge will determine if the property is selling close enough to fair market value, which it must, and the homeowner has an opportunity to dispute any ‘lowball’ offers as being unreasonable. In Canada a lender cannot sell the property simply for what is owed. It is all about fair market value.

A lender has also likely been without payments for anywhere from 12 – 24 months, as the system is heavily biased towards Canadians not losing their homes. This means the property may have been occupied by somebody at no cost to them for nearly two full years. Count on very little maintenance or upkeep having been done during that time.

An excellent plan is to knock on doors and ask neighbours questions about the property and its history . Was it a rental property with a string of bad tenants? Were there illegal activities on site? All good things to know.

Determine the maximum purchase price in advance. Factor in the appraisal, the inspection, and the budget for repairs. And in the calm of your own office or home, well in advance of entering the heated atmosphere of the courtroom, settle on that maximum figure. Then stick to your maximum bid as planned.

The foreclosure process is a segment of law that truly allows socialist roots to shine through. It is based on giving every opportunity to homeowners to not only recover their property, but also to see it sell for a reasonable price.

It is not quite as lucrative an arena for investors as it is in the USA, but opportunities do exist. Be sure to enlist the services of your Mortgage Broker to assist you through the process. Having experienced professionals in your corner is vital in such transactions.

Rate hikes: not if, but when… (but also if)

General Angela Calla 8 Jul

One headline suggests interest rates are bound to rise soon, the next suggests they may drop to new lows, and a third suggests no changes anytime soon. This has been the case since rates dropped to 50-year record lows in 2009.

Many were adamant that rates could go no lower at that point, and yet they have, with a few short-lived blips upward, in defiance of all who are calling for a return to normal… whatever normal is now.

Keep in mind that a key driver of interest rates is the economy in general. What drives interest rates down? Economic bad news. What will drive rates up? Economic good news.

Economic good news seems in short supply since 2008.

Interest rates are a very large economic lever, far too large to be used simply to cool the arguably overheated real estate markets of two particular cities (Vancouver and Toronto). Cooling of real estate is addressed not through interest rate hikes, but through policy changes. Most commentators forget that only a few short years ago there existed a 40-year amortization, 100% financing not just for owner-occupied but for investment properties, and variable-rate mortgage qualification based on the three-year fixed discounted rate.

All of those things are gone or changed radically, and reality is that borrowers in 2008 – at nearly double the current interest rates – qualified for larger, and arguably riskier, mortgages than borrowers do today.

 

Interest rates will not be adjusted based on the detached home frenzy of Toronto and Vancouver. Lending guidelines have already been adjusted accordingly.

Nor is it valid to argue that rates have been so low for so long. How long they remain low is a function of inflationary and deflationary forces in the general economy.

The sign on the streets? Watch for a bunch of our peers spending money like those proverbial sailors on shore leave that we mentioned last month. A brand-new truck in each of your neighbours’ driveways, each unloading brand new 80″ flatscreeen TV’s… that is what will give the economy a strong boost and shift inflationary numbers into the ‘exceeding expectations’ category.

Until that time the steady stream of lackluster economic news is likely to serve mortgage holders well. The big beneficiaries will be those in fixed rates approaching renewal dates over the next 12 – 18 months, and those enjoying the ride in their variable rate mortgages.

Be sure to start the renewal conversation with your Broker six months out from the mortgage renewal date. Your current lender may suggest that rates are about to move and locking into something early is the right move, but always consult with your Mortgage Broker first to determine if the move being suggested is right for the lender, or right for you.

Testimonial from Janet & Mike | Port Coquitlam

General Angela Calla 8 Jul

Angela-

Thank you and your team for ALL your help. Here we are a year in our 1st home, and we are SO grateful our friend Pamela suggested your help. If we had listened to our “bank” we would have been financially doomed and missed out huge- here is how: 1. Houses in our area are now 80,000.00 higher than when we bought a year ago so now, that equity is in our pockets. 2. We have paid down our mortgage substantially, instead of rent. 3. We got pregnant un expectantly and so now we have enough room for our growing family and with the plan you put together for us we can reduce our payments when I am on mat leave and still pay our mortgage off faster! 4. (Yes there is a 4th) I am SO happy that my bank declined us, as if we ended up using them directly there exit fee’s down the road if we needed to modify our mortgage – as life changes as we can see from the above, the costs down the road would have been 3 times the amount. Doing my mortgage through the Angela Calla Mortgage Team, you saved me 20,000.00 down the road when we compare the benefits of the lenders you have access to plus your ongoing management that is free to us and continues to save us money is priceless.

My advice to anyone considering purchasing a home or renewing a mortgage or making a change- The Angela Calla Team has your back in more way than one! It look me so long to write this, a year after their help as I wanted to really express my appreciation not only for ALL your great help during the purchase process, we wanted to include the long term benefits that most people like us who haven’t done this before or getting bombarded by advise from family and friends that are trying to help but confused us it only makes sense to go directly to you! Look what it did for us, and your service is free- a real eye opener for us!

Your clients and fans for life 🙂

Janet and Mike- Port Coquitlam 

Extra payment on your mortgage can mean substantial savings

General Angela Calla 1 Jul

Four in ten homeowners made an extra payment on their mortgage in the past year, Manulife Bank of Canada Debt Survey Shows subtantial savings.

Read the Full article and share HERE

Questions on determining the best mortgage for you and your future? The Angela Calla Mortgage Team is here to help call us at 604-802-3983 or callateam@dominionlending.ca We look forward to helping you.

Angela Calla in The Globe & Mail with Lead Article April 24th 2015

General Angela Calla 15 Jun

Angela Calla was featured on the Globe & Mail article entitled: “Low rates, high flexibility ” issued on April 23rd, 2015

“An impending mortgage renewal is also a good time to explore the range of options offered by various providers, says Angela Calla, a licensed mortgage professional at Dominion Lending Centres, which helps homeowners find the best mortgage offered by Canada’s largest banks, credit unions, trust companies and other financial institutions. She notes that licensed or accredited mortgage professionals are required by law to present the best mortgage options to their clients.

Ms. Calla cautions against making mortgage renewal decisions based solely on interest rates, especially when there’s a possibility that the mortgage will need to be modified partway through the term, due to a host of reasons ranging from a relocation, change in health or income, or a change in the interest rate market.

“Fixed-rate mortgages generally incur the highest penalties for future modifications,” she says. “Now some lenders are changing their terms to include high exit fees on variables.”

Waiting until the last minute – or even past the maturity date – to make a decision about mortgage renewal is not a good idea, she says. Most lenders will automatically put mortgages that have not been renewed into a six-month closed mortgage, “and your payments can suddenly triple,” says Ms. Calla.

“That creates pressure for you to sign something quickly,” she says. “The sooner you start thinking about your mortgage renewal – four months is ample time – and exploring all the options available to you, the better.”

Find the full article HERE

Want to ensure you have the best mortgage? The Angela Calla Mortgage Team can help you directly at 604-802-3983 or callateam@dominionlending.ca. Contact us today!

 

 

 

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