Mortgage Concierge - Guelph Real Estate Mortgages

THE TRUTH IS banks don’t work in your best interest!

admin — Fri, 04 May 2012 14:45:12 +0000

The truth is mortgage brokers don’t like banks. Sure we have bank accounts and car loans like most Canadians but we don’t like how they treat mortgage customers. The banks aren’t going to work in your best interest.

This week I had a client call me who had a mortgage at a major bank and he is selling and buying and moving up in price. He wants to take his mortgage with him and increase the loan amount.

His bank is notorious for staggering the renewal dates of the terms to make it more difficult for a client to switch to another lender…

The bank will keep his current mortgage in its original 5 year term which has 3.5 years left before renewal and then they are trying to talk him into a new 5 year term so the renewal dates won’t match. The problem with that are often times the banks aren’t competitive with the rest of the mortgage market on renewal date. Or let’s say the bank provides lousy service and you want to switch your mortgage.

With this bank it is way too costly to leave as there will always be 1 portion of the mortgage in a term that doesn’t match up with the other term renewal date. So the only way to leave is to incur legal fees and pre-payment penalties to pay off the mortgage.

The truth is banks don’t work in your best interest, but mortgage brokers do!

If you know someone who is considering a mortgage at their bank then suggest they speak to an mortgage broker before they go ahead.

The Party Is Almost Over!

admin — Fri, 20 Apr 2012 13:50:50 +0000

The Bank of Canada left their overnight rate the same on Tuesday but they are signaling increases to begin July or October of this year and their inflation projections have improved.

That means bond yields will rise pushing the price of mortgage rates higher. Combine that with government guidelines that banks will be required to follow and we will see a cooling of the housing market.

For first time buyers, affordability may become out of reach but if you own a home now and have a mortgage that may not mean much to you. However, more and more people are increasing their debt through credit cards or through home equity lines of credit. It seems we enjoy going out for dinner “on the house”.

As the prime rate rises it will push the minimum payments required each month up and put pressure on cash flow which could become an issue for some of our clients.

It seems that people think these low rates will last a long time and the warning of higher rates can be ignored. Don’t forget what got us here. Although it seems a long time ago, it was 2008 when the credit crisis hit. Lucky for many Canadians we enjoyed the benefits of a stable financial system. It seems to me that we’ve expected this to be the norm.

But the party is almost over! It’s not going to last! Soon interest rates will normalize and inflation will return! While that is a good thing for the Canadian economy, it can turn it to hurt many!

Rates Have Settled!

admin — Thu, 05 Apr 2012 19:16:09 +0000

Pretty much all of the banks and mortgage companies have adjusted their mortgage rates. With the announcement of the provincial and federal budgets last week, markets have settled a bit and the bond market has increased slightly

Today a 5 year fixed mortgage is around 3.39% – 3.49% and the 5 yr bond yield is at 1.61% giving lenders a healthy spread of 1.78%. That should keep things in check for now.

But as the economy slowly improves (and it will) bond yields will creep up as investors move back to the stock market and mortgage rates will gently follow.

Rates Are Going Up!

admin — Thu, 29 Mar 2012 14:13:02 +0000

Today’s the day that all the lenders were to raise their mortgage rates. They’ve gone up in large part because the cost of the money for the lenders has gone up significantly over the past 2 weeks. Frankly, these quick closing specials at 2.99% were break even at best, and money losers for some lenders, all with the aim of grabbing market share.

The good news is that some lenders still have their rates available in the low 3% range. They’ll likely be at 3.50% by next week. If you have any customers, friends or family who recently let you know that they are thinking of buying or refinancing today would be a great day to call us and get an application in.

Written By:
Chris Bisson

Beware of Low Interest Rates!

admin — Mon, 12 Mar 2012 17:31:16 +0000

Here they come again: A low 2.99% 5-year fixed rate with fewer bells and whistles. It’s the equivalent to getting a Chevette when a Cadillac is more appropriate. Lets look at this a little more closely:

The BMO offer at 2.99% for a 5-year fixed rate mortgage is only available until March 28. The rate hold period is 90 days. This means you need to close and get the money by 90 days from the date of application. This is particularly problematic for home buyers as the average time it takes to shop for a home and get the keys is 110 days. It is even worse in the Guelph area where we are suffering from a lack of inventory, making it harder for people to find a home and get moved in within that small window.

Paying the mortgage out early requires the borrower to pay a penalty based on the standard restrictions, except, you have to sell your home to a non-related person if you want to leave BMO. This means you can’t refinance and move the mortgage elsewhere in the future. Essentially, they’re saying that you are stuck with BMo for 5 years, whether they have the best deal in the future or not. Imagine you refinance in 38 months (the average for a first time buyer) and you find out that they won’t give you their best deal in the future and you’re stuck with that?

Your ability to prepay is cut back to 10/10: 10% lump sum once per year and, 10% increase your payment per year. Many lenders are offering a 20/20 prepayment privilege, and more importantly, they allow you to pay extra on any regular payment date, as opposed to once per year.

The 10 year offer by BMO isn’t industry leading, especially with its restrictions. There are lenders offering 10 year fixed rate mortgages at 3.89% with all the bells and whistles.

One thing that is certain for me is that banks are great at making money. If people think that they’d offer something 0.20% below the market rates for free they had better give themselves a wake-up call. The larger penalties associated with breaking these mortgages early (which the average borrower does) more than eats up the savings of the lower rate. Couple that with restrictive pre-payment features and you can see that their offer is sub-par.

Dealing with a broker who pays attention to the fine-print, not just the rate, saves you money over the long-term. Call us if you would like more information on our services and mortgage options tailored to suit you!

Written By:

Chris Bisson

Guelph Values Still Growing!

admin — Wed, 08 Feb 2012 15:16:35 +0000

The Canadian Real Estate Association has a new method to test the housing sector’s performance, and the first set of results show that real estate prices are up 5.2% in January versus January 2011, and up 0.27% month-over-month. Currently the new method is incorporating information from 5 markets across Canada, so the numbers can be a little misleading, even though they represent about half of all the real estate activity in the country.

Real Estate prices and sales are largely based upon regional factors. The key drivers tend to be Demographic and Financial in nature. One key driver of the real estate cycle is net migration: the more people moving into an area the stronger prices will be. So whether the average prices are up across Canada or not is irrelevant to you in your home market. Focus on the key drivers in your area to get a sense for where prices are headed.

Guelph will see about a 1% increase in its population this year. While that may not seem like a lot, when you compound that over 5 years you will see the city grow by about 5%. That’s significant and a good sign for our area’s real estate sector. Over the past 5 years Guelph has continued to see price increases. Next week we will touch on vacancy rates as a sign for where prices are headed.

Written By:
Chris Bisson

What are you Looking for in a Realtor?

admin — Thu, 03 Nov 2011 13:57:08 +0000

A recent NAR in the U.S. (National Association of Realtors) survey listed the 4 most important things consumers look for in their real estate agent. In no particular order, here are the 4 most important factors that consumers use when deciding on who to use to help them find a home or sell a home:

• A Brand Name they can trust ~ gone are the days that anyone can start up a small real estate office. Consumers want a company that has brand presence through its size, time in business and reputation;
• They want the Area Expert ~ Consumers want someone who focuses on one part of the market, and who dominates it;
• They want the agent to be On-Line Savvy ~ Over 80% of home buyers start their search on-line and the next big market of buyers are people who don’t know what it is like to live life without a computer. Agents must know how to use the internet and social media to market to buyers;
• Someone who can demonstrate the Ability to Negotiate ~ The best way to do this is by obtaining 3rd party testimonials on-line.

While the above results are based on findings from a U.S. survey, I think that the information is valid for Canadians who are thinking of buying or selling. In fact, they are a good measure for anyone who is looking into buying or selling anything.

Lending Rate Unchanged

admin — Wed, 26 Oct 2011 18:15:22 +0000

The Bank of Canada has left its overnight lending rate unchanged, which means the Prime Rate will remain the same and Variable Rate mortgage holders will continue to enjoy their current (low) mortgage rate.

The global economy is not expanding very quickly, and with it inflation is generally subdued. Bond yields and fixed mortgage rates will remain low for the next 6-12 months as a result. One of the main reasons is that businesses are taking on less risk, and consumers are saving more of their pay cheques and reducing debt. Not to mention the U.S. still hasn’t made much of a dent in their unemployment rate.

Canada, however is well positioned. We have oil, and other natural resources, and the ability to move them to markets like China that have high demand. We will benefit further from the low rates and a stable employment rate. Now is one of the best times in the last decade for young Canadians to be buying a home.

Call us if you’d like more economic information to support the idea that now is a good time to be buying, or for any mortgage related information. We’re happy to help!

Written By:
Chris Bisson

Bond Yields Are On The Rise

admin — Fri, 14 Oct 2011 15:01:42 +0000

The bond yields are up a bit this week, which some people think might push fixed rates up a bit. While a rising bond yield does normally put pressure on the fixed rates to go up we also need to remember what happened with mortgage rates while the bond yields were going down. Most recently, as bond yields were dropping the similar term mortgage rates didn’t move down with them in lock-step. This makes it possible for the lenders to leave fixed mortgage rates alone for now.

Most variable rate mortgages are now being had at Prime less 0.25%. This is a big difference from just 8 weeks ago when you could get one at Prime – 0.8%. Since this translates into 2.75% for variable and the fixed is hovering around 3.4% more and more people are choosing to go with a fixed rate mortgage.

August new home prices edged up a little month over month in Canada, and are more than 2% higher than this time last year. The regional story paints a different picture, with some markets down 4% and others up 1 or 2 per cent. Toronto and the Kitchener-Waterloo areas are holding their own, up slightly month over month.

Written By
Chris Bisson

Zero Down Mortgages Still an Option

admin — Wed, 05 Oct 2011 19:28:46 +0000

With the sweeping mortgage reforms that have taken place in the past 2 years most people think that they need to have at least 10% of their purchase price saved up for the down payment. Although the actual rule is that buyers need at least 5% for the down payment, it is a little known fact that they don’t need to have saved that money.

Yes, you read that right. You don’t have to have the 5% saved up. Here are a couple of options for people who don’t have the 5% saved:

• Gifted Down Payment: There’s nothing better than free money, so if your parents or your kids want to give you a gift for part or all of your 5% down payment take it if it won’t change your relationship with them;
• Cash Back Mortgage: Some lenders offer the 5% in the form of Cash Back on closing. During your 5 year fixed rate term mortgage you will have a higher rate than the best on the market, but you get the 5% down so you can buy;
• Personal Loan: You can borrow your down payment from a bank, trust company, credit union, or any other party that is arm’s length. That means you can borrow the down payment from a private person too, as long as they aren’t related to you. All we need to do is take the payment from the loan into account when figuring out your affordability ratios to qualify for the mortgage.

Here are a few types of people who might be having a hard time saving their down payment that would really like to own a home: A single mom or dad, a recently married couple who have some of their down payment saved but not all of it, or someone who has recently graduated from post-secondary school and has just obtained a good job with a good company (maybe a year on the job).

If you know anyone who laments that they’d like to buy a home but they think they can’t because they don’t have their down payment saved please tell them to call us. They might just be in their new house by Christmas!