We’re all relieved for a little rain and some cooler weather. Hopefully this proves most helpful with the wildfires.
environment Canada warns us to expect smoky mornings.
The municipality’s website about Fort Mcmurray wildfires!
Becoming a homebuyer and applying for a mortgage can seem overwhelming, especially if it’s your first time. With the help of an expert and dedicated mortgage specialists, it can be easy. They’ll meet with you any time to guide you through the process and help you find the best mortgage for your specific needs.
To help you feel more confident and prepared for becoming a first-time homeowner, we’ve put together a list of eight of the most common pitfalls, which a mortgage specialists can help you avoid.
A credit rating is a record of your credit history and current financial situation, which typically translates into a credit rating score. Lenders can use your credit rating to verify your repayment history. A good credit rating can improve your ability to get loans and mortgages. If your credit rating needs improvement to help you qualify for a mortgage, you can improve your credit rating by always making at least the minimum payments on your credit cards, loans or utility bills on time. Checking your history is easy! Simply ask for a copy of your credit rating at either Equifax or TransUnion
You may be under, or over-estimating how much you can afford to pay for your home.
You can use an online mortgage calculator to quickly figure out monthly payments for different mortgage amounts and rates. You may find out you can comfortably afford more than you originally thought.
For a more personal touch, contact a mortgage specialist. They can quickly help you determine how much you can afford and answer any questions you might have.
Knowing the amount you will be approved for gives you the confidence to begin looking at homes within your price range. We Realtors will be better equipped to assist you because we’ll be shopping in your price range. You can easily make an offer to purchase as soon as you find the right home.
Dreaming of owning your own home and not sure if you qualify for a mortgage? Even if your credit history is less than perfect, we can help you find a solution. Not knowing all the down payment choices You’ll be glad to know that there are different options available depending on how much of a down payment you can afford:
Low down payment mortgages require mortgage default insurance. The premium can either be paid up front or added to the amount you borrow.
Under the federal government’s Home Buyer’s Plan, first-time homebuyers are eligible to use up to $25,000 in RRSP savings per person ($40,000 for couples) for a down payment on a home. The withdrawal is not taxable as long as you repay it within a 15-year period. To qualify, the RRSP funds you plan to use must have been in your RRSP for at least 90 days.
All too often, first-time homebuyers give more thought to interest rates than the mortgage solution itself. While rates are a valid consideration, the different types of mortgages, their payment structures, terms and flexibility will have a much greater bearing on the overall cost of homeownership.
Fixed rate mortgage
Fixed rate mortgages offer the security of locking in your interest rate for the term of your mortgage, and your payment amount stays the same, providing ease of budgeting. The main advantage is that the interest rate stays the same during the term of the mortgage and that you know exactly how much of your payment is applied to principal and interest.
Variable rate mortgage
With a variable rate mortgage, your payments remain the same, regardless of fluctuating interest rates. When rates go down, more of your payment goes to pay the principal and less to interest, enabling you to pay off your mortgage sooner. When rates go up, the reverse happens: less of your payment goes toward the principal and more to interest, extending the amortization period. Many experts believe variable rate mortgages offer the greatest potential for long-term savings on interest costs.
Combined fixed and variable rate mortgage
You can enjoy the advantages of both variable and fixed rates by diversifying your mortgage. That means the variable portion allows you to take advantage of potential long-term savings, while the fixed rate portion protects you if rates rise. Your mortgage specialist can help you decide which mortgage solution works for you, based not only on your budget but also on your future plans.
Customize your amortization period depending on how much you can afford. Paying off your mortgage sooner saves you interest costs, while a longer amortization period (up to 35 years) reduces your regular payment amount and gives you more room to manage your cash flow. Because extended amortization means increased interest costs and paying down a mortgage more slowly, this option isn’t for everyone. A 25-year amortization period should be the starting point for your consideration as stretching the amortization to 35 years can increase your total interest costs by 50% over the life of the mortgage. If you decide a longer amortization is appropriate, consider a strategy to reduce amortization over the life of the mortgage. Money-saving options, such as doubling a payment, accelerated payment, anniversary lump-sum payment and/or annual increase(s) in payment amount, can get you back on track to a 25-year—or even shorter—amortization period. Regardless of the mortgage option you choose, buying and owning a home is likely to be one of the biggest financial investments of your life.
By this time, you’ve selected a house, picked your mortgage options and are getting ready to finalize everything and make an offer. This means getting down to certain details and their associated costs. It helps to know what these are up front so you can minimize any last minute complications. When calculating closing costs, it’s fairly safe to assume you’ll need an additional 1.5% of the purchase price to cover such things
as:
Owning your own home is a milestone as well as an exciting experience! How often do you get to live in and enjoy your investments? We, your Realtors are always, and your mortgage specialist as well, are available to guide you through the process.
It’s important that you know as much as you can about the mortgage and real estate markets so that you can make acquiring a mortgage an effortless process.
The Canada Mortgage and Housing Corporation (CMHC) has recently announced some changes that will be made to The CMHCinsured mortgages. Effective April 19, 2010:
All borrowers must qualify for the five-year fixed benchmark rate regardless of term. The five-year benchmark rate is published by the Bank of Canada and can be found on their website. This will ensure that the borrower will still be able to afford to pay their mortgage should interest rates rise.
Any investment properties that aren’t owner occupied will require a 20% down payment of the homes purchase price. Therefore investment properties will no longer be insured by the CMHC and the borrower will need to acquire a conventional mortgage.
When refinancing borrowers are now able to qualify for just 90% of the homes appraised value in effort to help protect the equity that the borrower has established.
This is an attempt to protect borrowers from accumulating more debt than they can handle while also forcing the housing market to cool off after record-low interest rate.
TD is the first big bank out of the gate.
It raised its prime lending rate by 1/4 point to 2.75% on July 21st. That’s another 1/4 point increase from their June 2nd increase.
Homeowners who break a closed mortgage before maturity will often make a pre-payment before the mortgage is discharged. The idea is to reduce the mortgage balance and thereby pay less of a pre-payment penalty.It’s a great idea if you have the funds to do it. Remember, however, that lenders have different policies on how close to the payout date you can make a pre-payment.
Some lenders, for example, won’t allow pre-payments to be made within 30 days of the date of discharge (the date you pay off your mortgage in full).
Therefore, if you plan to pre-pay a portion of your mortgage to reduce your penalty, remember to do two things:
1. Ask your lender how close to your payout date you can make a pre-payment and still have that payment count towards reducing your penalty. (Allow several days regardless. You don’t want to cut it too close.)
2. Make the pre-payment and then confirm that your lender has applied it to your account before your lawyer requests the payout statement. Otherwise, your pre-payment might not reduce your balance for the purposes of penalty calculation.
Alberta’s economy is expected to improve in 2010 followed by more growth in 2011. Higher oil prices will see new projects starting. The natural gas industry will soften the expansion as a result of low natural gas prices. Overall, investment intentions in Alberta are projected to be higher by three per cent in 2010.
Labour market conditions are expected to improve this year as the economy gains traction.
The net losses from inter-provincial migration and non-permanent residents experienced in the latter part of 2009 are expected to moderate in 2010. International migration is expected to remain robust this year and next year. Net migration is expected to contribute to population growth in 2010 and 2011 which will support housing demand.
Single Starts: Single-detached starts bottomed in 2009 and are expected to rise in both 2010 and 2011. In 2010, starts will rebound, as builders respond to rising demand and lower inventories. Relatively low mortgage rates in 2010 and move-up buying will also help construction activity. Starts will move higher in 2011 with the expanding economy.
Multiple Starts: Multi-family starts will continue to be held back by a muted level of high rise apartment condominium construction. The number of complete and unoccupied multi-family units remains elevated but a peak should soon arrive with inventory levels expected to gradually decline over the forecast period. After a sharp reduction in multifamily starts last year, activity will increase in 2010 but remain modest. The recovery of multi-family starts will continue in 2011 supported by declining inventory levels.
Resales: Homebuyers responded to low mortgage rates and an improved economic outlook by rapidly increasing resale volumes in early 2010. Some demand has been brought forward by those consumers wanting to take advantage of current market conditions. By year-end, resale volumes in 2010 will be similar to the annual volumes in 2009, with single digit growth in 2011.
Prices: Growth in average existing home prices will moderate slightly in the third and fourth quarters of 2010 refl ecting more balanced market conditions due to modest sales and a rising supply of homes listed for sale. Average prices will grow by 3.3 per cent in 2011.
View the entire CMHC report here.
Since early 2009, the nationwide unemployment level drops below 8%. The private sector is accredited for the surge in jobs. Here’s The Globe and Mail article in full.
Another unfortunate tragedy! Here’s theFort McMurray Today report.
Personally speaking, I usually drive 10-15 km/h faster than the speed limit, and still I’m passed as if I am in park. Fort McMurray is a high-pace town and unfortunately this leads to tragic results.
