Resources

You could call it “Battling Bubbles”.   Two recently released reports painted vastly different pictures of the Toronto real estate market. Keep in mind that they were looking at two different scenes.
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The Government of Canada made some changes to High Ratio mortgage financing rules yesterday.  It is the fourth change since 2008.  The changes take effect July 9^th.
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Dream of Becoming DEBT FREE?
Let the Equity in your home work for you.
Are you paying high interest rates on visa cards, lines of credit and car loans?
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Financing on commercial mortgages is very different to financing on residential mortgages.  The process can take anywhere from 1 month up wards.    Along with an appraisal a  phase 1 environment inspection can be required depending on building type.  Always give yourself more time and do not rush the financing clause as it is there to protect the borrower.  With residential financing a 5 day financing clause is the norm.  With commercial financing 30 days or more is the norm depending on building type and processes involved.

Canadians appear to be getting their household debt in order. And that’s showing up on the bottom line at the big banks. After some 15 years of fuelling bank profits, consumer loans are on the decline. Q2 earnings reports from Canada’s major banks start today (Wednesday). While the slow return to growth in the U.S. and the debt turmoil in Europe are grabbing the headlines, Canadian household debt remains the biggest domestic concern. The cautioning and cajoling by the finance minister and the governor of the Bank of Canada have been couched in fears of a housing bubble. But more than one bank analyst says, simply the level of debt-to-income leaves some households vulnerable to shocks like job loss or interest rate hikes.
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When your mortgage is up for renewal you do have options.  Believe it or not nearly 70% of Canadians sign their mortgage renewal letter without actually considering other options for a better rate or product.  When you receive a renewal letter from your lender, the lender (mainly banks) will not offer you the best discount rate.   They are hoping (and in most cases are correct) that you will just sign the renewal letter and send it back to the lender.  The lenders save allot of money by taken this approach.
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I was recently approached by a borrower who wanted to make an offer on a one million dollar home.  I asked him if he was mortgage pre approved.  He said no but felt he could handle the payments.  After a brief conversation I calculated he would need 3 times his currently salary to be approved to purchase the property.  The client was still hesitate at the thought of getting pre approved.  He believed to have his credit bureau checked would damage his credit.   Let us think about that one.  You need to have a credit check to be approved for any type of loan so how will this damage your credit.  (Random shopping for different types of credit will single red flags with Equifax and will impact your credit score but not for just one type of loan over a specific period).
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The main objective of any mortgage borrower is to pay down there mortgage as soon as possible.  Naturally coming up with the money to do this is not that easy.  Two ways to chip away at your mortgage is to take an accelerated payment frequency and take advantage of the automatic payment increase allowed on your mortgage by your mortgage lender.  Here is an example.
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CMHC announced that it will pull back on its growth of insured mortgage funding over the next 5 years.  With total mortgages insured by CMHC close to 557 billion by the end of the year the government has put pressure on CMHC to start to slow down on amount of mortgages they insure.
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At mortgage renewal time your mortgage is completely OPEN.  This means the contract with your current mortgage lender is over.  You do have the option to either stay with your existing lender or move too another lender for better terms and conditions.  Moving to a new lender will require you to re-qualify, however if the terms and conditions are much better then what the existing lender is offering, it makes sense.
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