It has been a truly amazing week for economic related news in
Canada. We have the head of Bank of Canada heading off to more
challenging pastures of old the world, England. One of his parting
gifts was a hold of the bank rate which means that variable rate loans
will hold tight for the time being and overall mortgage rates remain as
low as ever.
The Bank has indicated that our economic activity
is weak with expansion driven by consumption and business investment.
It seems we, households, continue to increase our debt burden. They are
predicting a return to 2% inflation, their target, over the next 12
months. If that happens then they will start to increase rates, but
there is always the caveat of what might be going on int he rest of the
world and our personal debt levels, now sitting at 163% of disposable
income. When rates do go up I think there will be a lot of people in
trouble. If people can just afford their debts at current rates, tack
on 2% and see how affordable the choices become. I am strongly advising
people to get their debts to manageable levels over the next 5 years on
the assumption that their mortgage rates will be 2% or more higher. If
I am wrong about an increase, then good they are ahead. If I am right
then they may not loose sleep when the day comes to reset their
mortgage. If people do not get debt under control it will affect
spending down the road and could drag out the downturn.
The
tighter mortgage rules and the higher cost of housing in general is
having the expected effect of slowing the markets and the recent reports
indicate a slide in sales and a softening in prices. I like that TREB
blames the mortgage rules, but really if people are not getting big pay
increases and unemployment, while improved, is still quite high in
Ontario, even without the mortgage rules there is going to be a point at
which people have bought what they can afford and can afford to go no
higher. The shift from 416 to 905 is not just about land transfer tax
it is about things like a difference in detached housing prices of
$184,735 and I bet that amount buys more yard and space. I would love
to see comparable figures that included those elements. So for almost
$200K people move a little further out. Surprise? No.
So in
some cases the bidding wars are past. The condo market however seems to
have taken the biggest hit on the resale side with the number of
transactions down by 25.5% with the biggest declines in prices being in
Toronto. Otherwise the overall seems to be fairly stable.
I
think relative stability is probably good for a while then prices can
better match overall economic conditions and maybe the debt burden to
get into the market can be more proportional to what is affordable over
the long term.
The good news is that Stats Can has come out with
some nice news for the holidays with improved job numbers with 59,300
new jobs in November. YEAHHHH!!! Economists varied widely in their
predictions, i.e., there were a lot of bad guesses, but it does help in
the short term. The "BUT" in this one is that there have already been a
lot of announcements of pending layoffs and big wigs are not willing to
call the good news a trend. They are popping the balloon early this
time so we do not get to happy about it. Frankly, whatever happens the
new jobs has bought families time and peace of mind and that has got to
be good for consumer confidence.
Friday, December 7, 2012
Why Use A Mortgage Broker/ Agent?
What is a Canadian Mortgage Broker?
Canadian Mortgage brokers are independent, trained professionals licensed to represent and provide you with the best advice for your mortgage needs.
Mortgage brokers primary expertise is locating funding for mortgage financing. They know where the best rates can be found. What's more, they have the knowledge required to present a proposal for financing to lenders in the best way possible to successfully obtain mortgage financing.
Why deal with a mortgage broker in Toronto?
Mortgage brokers represent you, the customer, not the lender. Because they are not employees of a lending institution, brokers are not limited in the product they can offer you. brokers seek out the best lender package to suit your specific situation, whether it’s with a Chartered Bank, Trust or Insurance Company, or Private Funds.
There is a wide assortment of options and features available to homebuyers today. Shopping around takes a lot of time and effort. The mortgage process within today's very competitive marketplace intimidates many Canadian homebuyers. It pays to work with a mortgage professional who will represent you and ensure the mortgage you get is the one best suited to your needs.
Choosing the wrong mortgage can cost you thousands of extra dollars. Mortgage brokers are trained professionals who can help you save on your mortgage dollar.
Other than rates, why should I use a mortgage broker?
In addition to rates, because mortgage-based financing is the broker's primary business, he or she has developed expertise in what type of mortgage financing each lender prefers to pursue. This kind of knowledge not only results in the most favourable rates for each project, but often whether a project is funded at all.
How do mortgage brokers find the best rates?
Interest rates are a concern to borrowers. Because of their daily contact with lenders, brokers know which project or home attracts a favorable interest rate from one institution, but a higher rate at another. Some institutions, in fact, will only accept mortgage submissions from mortgage brokers.
These rates, and preferences for types of mortgages, can change daily, depending on economic circumstances or based on the size of an institution's portfolio in a particular type of mortgage. Your mortgage broker keeps current and knows which lender to approach first. As a result, mortgage rates obtained by brokers are among the best available at the time of placement.
Why should I go to a Canada mortgage broker first?
A professional presentation to a lender on the first application will get the best response and save you valuable time and money. Secondary applications with previous credit bureau inquiries may be more costly.
Often the success of obtaining mortgage approval depends on the way a proposal is presented and to whom it is sent. Your mortgage broker is trained to present your mortgage proposal where and how it will get the most immediate, positive result.
You don't call an insurance company for insurance - you use an insurance broker, because of their expertise, product knowledge and rates. So remember, call your mortgage broker first!
Do Canada mortgage brokers only do residential mortgages?
Brokers can place all types of loans provided they are backed by mortgage collateral. This includes small loans backed by a residential property to million dollar commercial loans backed by commercial property. Mortgage-backed loans in the millions are not uncommon with private pension funds and private lenders.
In addition to handling straight mortgages, mortgage brokers are often called on to assemble financing ( based on mortgage collateral) for businesses. Mortgage brokers excel in this type of financing package because of their expertise in looking at loans from a mortgaging perspective, as well as their knowledge of financial institutions' interests and desires for a particular product at specific times.
How do Canada mortgage brokers get better deals than many banks?
The lenders who work with mortgage brokers include traditional sources, such as chartered banks, trust companies, as well as corporate and private pension funds.
In addition to these sources, brokers often develop professional relationships with private sources of funds, termed private lenders. These lenders can provide many various mortgage products not available at conventional sources. For best results call your Broker first.
Can I still go through my bank with my mortgage broker?
Yes, letting a mortgage broker represent you to your own financial institution can often result in a better mortgage rate than you could get on your own.
Canadian Mortgage brokers are independent, trained professionals licensed to represent and provide you with the best advice for your mortgage needs.
Mortgage brokers primary expertise is locating funding for mortgage financing. They know where the best rates can be found. What's more, they have the knowledge required to present a proposal for financing to lenders in the best way possible to successfully obtain mortgage financing.
Why deal with a mortgage broker in Toronto?
Mortgage brokers represent you, the customer, not the lender. Because they are not employees of a lending institution, brokers are not limited in the product they can offer you. brokers seek out the best lender package to suit your specific situation, whether it’s with a Chartered Bank, Trust or Insurance Company, or Private Funds.
There is a wide assortment of options and features available to homebuyers today. Shopping around takes a lot of time and effort. The mortgage process within today's very competitive marketplace intimidates many Canadian homebuyers. It pays to work with a mortgage professional who will represent you and ensure the mortgage you get is the one best suited to your needs.
Choosing the wrong mortgage can cost you thousands of extra dollars. Mortgage brokers are trained professionals who can help you save on your mortgage dollar.
Other than rates, why should I use a mortgage broker?
In addition to rates, because mortgage-based financing is the broker's primary business, he or she has developed expertise in what type of mortgage financing each lender prefers to pursue. This kind of knowledge not only results in the most favourable rates for each project, but often whether a project is funded at all.
How do mortgage brokers find the best rates?
Interest rates are a concern to borrowers. Because of their daily contact with lenders, brokers know which project or home attracts a favorable interest rate from one institution, but a higher rate at another. Some institutions, in fact, will only accept mortgage submissions from mortgage brokers.
These rates, and preferences for types of mortgages, can change daily, depending on economic circumstances or based on the size of an institution's portfolio in a particular type of mortgage. Your mortgage broker keeps current and knows which lender to approach first. As a result, mortgage rates obtained by brokers are among the best available at the time of placement.
Why should I go to a Canada mortgage broker first?
A professional presentation to a lender on the first application will get the best response and save you valuable time and money. Secondary applications with previous credit bureau inquiries may be more costly.
Often the success of obtaining mortgage approval depends on the way a proposal is presented and to whom it is sent. Your mortgage broker is trained to present your mortgage proposal where and how it will get the most immediate, positive result.
You don't call an insurance company for insurance - you use an insurance broker, because of their expertise, product knowledge and rates. So remember, call your mortgage broker first!
Do Canada mortgage brokers only do residential mortgages?
Brokers can place all types of loans provided they are backed by mortgage collateral. This includes small loans backed by a residential property to million dollar commercial loans backed by commercial property. Mortgage-backed loans in the millions are not uncommon with private pension funds and private lenders.
In addition to handling straight mortgages, mortgage brokers are often called on to assemble financing ( based on mortgage collateral) for businesses. Mortgage brokers excel in this type of financing package because of their expertise in looking at loans from a mortgaging perspective, as well as their knowledge of financial institutions' interests and desires for a particular product at specific times.
How do Canada mortgage brokers get better deals than many banks?
The lenders who work with mortgage brokers include traditional sources, such as chartered banks, trust companies, as well as corporate and private pension funds.
In addition to these sources, brokers often develop professional relationships with private sources of funds, termed private lenders. These lenders can provide many various mortgage products not available at conventional sources. For best results call your Broker first.
Can I still go through my bank with my mortgage broker?
Yes, letting a mortgage broker represent you to your own financial institution can often result in a better mortgage rate than you could get on your own.
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