Mortgages in Canada

Professional Designations - meaningless letters?

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Sat, 21 Nov 2009 13:09:34 -0800

I've recently been looking for feedback from other Mortgage Professionals in Canada in my group on Linked In. There is quite a debate as to whether or not professional designations such as the AMP (accredited mortgage professional) designation is all it's cracked up to be. Personally, I feel it doesn't change the core of a person's commitment to ethical behavior and high standards. Regardless of any designation and continuing education requirement, anyone that would want to consider themselves a "professional" would do this by default.

There's Advocis in the financial planning world, AMP and others in the Mortgage worls (at least in Canada). I'm interested in the answer to this question - US or Canadian based - doesn't matter.

Are people hiding under a designation? A sheep in wolf's clothing will eventually become unveiled.

Merix Financial Lowers Variable Rate to Prime - .25!

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Tue, 17 Nov 2009 06:08:50 -0800

Variable rates have slowly been lowering and today Merix Financial (only available through Brokers) has the lowest variable rate currently at prime minus .25% = 2.00%. Since CMHC has forecasted rates to stay steady into mid 2010 and a moderate increase for the rest of that year, I say go variable and hold it for a while. A 3 year is a good option since on renewal rates for variable may be down to prime-.50 or better. Maybe even back to the old prime-.80 before the credit crunch. So, don't lock in at prime for 5 years right now, too much yet to happen and 3 years really isn't that long!

Divorce, Separation, and Mortgages

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Sun, 25 Jan 2009 11:01:01 -0800

Unfortunately the day may come that you find yourself going through a separation or divorce. Of course this can be a scary and unknown time for you as your financial situation will change. One of the largest financial obligations to consider for people going through this period is their mortgage and home. It's important that before you start negotiating with your former spouse that you know what you qualify for. If you are wanting to stay in the matrimonial home, you need to know how much equity is owing to your spouse. Normally you would subtract what's owing on the home from the current value (proof of which can be obtained through a real estate appraiser and/or a letter of opinion from a Realtor) and divide it by 2. Of course there are times that one of you may have more or less than the other if there's debt outside the mortgage that one of you will be taking responsibility for. Or there may be other reasons that one of you may receive more equity than the other. However, in the majority of cases you will split the equity in half. If you aren't staying in the home, is your spouse buying you out or are you just going to sell the home and split the proceeds? Then of course you need to know what you qualify for on your own income. If you are receiving or paying support it will affect the amount you qualify for. In all cases, you need to know where you stand before you list the home, offer to buy out your spouse, or even start looking at new home. It's a tough time, but knowing what you qualify can make is a little easier on you.

Canadian Mortgage Market

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Tue, 07 Oct 2008 09:32:41 -0700

Canadian Mortgage Market

In recent weeks, a great deal of attention has been given to the health of the Canadian mortgage market in relation to events south of the border. The recent action by Congress in Washington has heightened scrutiny on the Canadian mortgage and real estate markets.

Numerous studies have been released regarding Canada's economic situation and there is no doubt that both the real estate and mortgage markets are slowing in Canada.

CAAMP's chief economist Will Dunning has prepared a report that provides a timely review of the market and key indicators that separate Canada from the U.S.

To download a copy of the report - click here

Special Rate For Large Mortgages

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Sat, 30 Aug 2008 07:44:54 -0700

For those looking to purchase a home or re-finance their current mortgage in Canada and will have a balance of over $500,000, you will qualify for a special 5 year fixed rate of 5.04% (full 20/20 pre-payment privileges allowed) - but only until Nov. 30th. For anyone looking for a mortgage that's less than $500,000 and wants a fixed rate, you might want to consider the "No Frills" mortgage. The lender can afford to give the better rate as it somewhat limits the pre-payment penalties (no lump sums allowed, only 10% increase to payment each year). Most people do have god intentions to pre-pay their mortgage, however life of course gets in the way and their plans to pay down the mortgage never come to fruition. Great fixed rates for sure even though I'd still recommend the variable!I can do mortgages all through Ontario and can refer to a consultant in another province if necessary. (rates subject to change at anytime without notice). Have a great Labour Day long weekend! Whoo hooo - Kids are back to school Tuesday!!!

When was the last time your bank gave away your mortgage payment?

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Fri, 29 Aug 2008 06:00:35 -0700

Well it's the last day of the month and time to draw another lucky winner in the KROCK 105.7 and Mortgage Intelligence win your mortgage payment contest. We've given away a mortgage payment a month this year and will continue to do so until the end of the year. Last month brought over 8000 entries! People are excited - people that know me stop and say - "hey make sure I win huh!" Anyway, the contest has been great and I can't say enough about the folks at KROCK here in Kingston. So if you live in the Kingston Ontario area and want a chance to win your mortgage payment, you need to be a KROCK Rewards Listener - find out more info here...

http://www.m2omedia.com/cikr/nonmembers/register/

You can't win if you don't play...

Credit Scoring Myths

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Tue, 26 Aug 2008 20:51:05 -0700

Credit Scoring in Canada

There’s several myths and misinformation about credit scoring. Here are some facts that may help you to know how your score is calculated. The credit score, also referred to as a “FICO score,” or “Beacon score” is a mathematical formulae created by Fair, Isaac and Company. The credit score is used by most companies to decide if the applicant is a good credit risk or not. Equifax and Trans Union will calculate the numbers from the credit report and generate a number between 300 and 900.

A low score indicates a bad risk. A score of 700 or more puts the applicant in the lenders’ good books.

How scores are calculated:

Factor	Weight	Points
Payment History Bankruptcies, late payments, past due accounts and wage attachments, collections, judgements	35%	315
Amounts Owed Amount owed on accounts, proportion of balance to total credit limit	30%	270
Length of Credit History Time since accounts opened, time since account activity	15%	135
New Credit Number of recent credit inquiries, number of recently opened accounts	10%	90
Types of Credit Number of various types of accounts (credit cards, retail cards, mortgage)	10%	90
Potential totals	100%	900

How You Can Improve Your Credit Score

Order a copy of your credit report, review it carefully and correct any significant errors.
Pay bills on time.
If there is a questionable credit history, you could open a few new accounts and use them responsibly, paying them off on time.
Avoid opening accounts without intention of using them. Having five or six of the same credit card type (e.g., Visa), is not favourable.
Having a credit card or instalment loan can help boost a credit score, as long as the balance is not too high and as long as there are not too many at finance companies.
Keep balances owing low in relation to available credit. If the credit limit is $10,000, keeping the balance below $2,500 (or 25 per cent of the limit) will improve the score. Balances of more than $7,500 (or 75 per cent of the limit) will decrease the score. Going over the limit has an even more negative effect.
Pay off credit card debt instead of moving it around to lower rate cards. Moving balances to other credit cards (i.e., “balance transfer”) and closing an old account can hurt the score.

Knowing your score and how it’s calculated will help you to obtain the financing you need for a car or a home at the best interest rate. To find out more about credit scoring, contact an Independent Mortgage Consultant. This information is provided by Sean Binkley a Mortgage Consultant with Mortgage Intelligence. He can be reached at his office at 613-531-HOME (4663) x22 or on the web at www.applyforamortgage.ca

Zero Down Mortgages Taken Away Without Much Thought!

Sean Binkley (Your Home Team Mortgage & Borrowing Solutions) — Mon, 25 Aug 2008 07:36:56 -0700

When it was announced by the Federal Government that they would be stopping true zero down mortgages http://www.fin.gc.ca/news08/data/08-051_1e.html , I was amazed that the press did not dig a little deeper into the consequences of such a quick and what in my opinion is a not very well thought through decision.

Zero down mortgages are not something new, they've been around in various forms for years. The huge difference with the ones introduced in the last year is that the client is able to get a fully discounted interest rate. SO in other words whether you have zero down or $100k down, you'll get the same rate. Of course, your mortgage will be insured by CMHC or Genworth insurance, but in the long run the cost of insurance vs. have to save $10k - $20k for most peopel is well worth it.

So as of Oct. 13th zero down mortgages are "gone". Well, the other side of the story is that they are not. Unfortunately now though it will cost the Canadian consumer much more of their hard earned money to own a home with zero down (obviously someone in Ottawa missed this point). Let me explain...

1) The Government of Canada wants you to have at least 5% down in order to buy a home now. But, if you don't have it, they are completely OK with you borrowing the 5% down payment. So you now have a mortgage payment plus a loan or line of credit payment for your down payment loan (at a higher rate than your mortgage).

2) If you can't borrow it on a side loan, don't worry there are lenders that will give you a "free down payment" or "cash back mortgage" Guess who wins here? The lenders! They can now charge you over 1.5% more for a cash back or free down than the regular zero downs or if you had 5% down. So the Fed is fine with you paying $300 more per month for housing just so they can't be on the hook for the additional 5% of your mortgage if you go into default!

3) Now instead of leaving your down payment in your RSP's to continue to accrue compound interest, consumers will be back to withdrawing their retirement funds to own a home. Most will try to re-pay it back over 15 years but some will not and just pay CCRA more taxes each year.

4) Or we are back to finance companies such as Wells Fargo which will do a zero down (at a low rate of 9%!) and 40 year amortizations - yikes!

Default rates on mortgages have been at an all-time low. There was no need for the Government to step in to take true zero downs away. What better way to slow down the economy than to slow down new home buyers from entering the market. You still have until mid-October to get a zero down - after that we only have the above options if you don't have the 5%. Conventional Government Wisdom at work! - But that's only my 2 cents!