Call me while you can.  The 40 year amortization will be eliminated soon.  Even though the Ministry is allowing until October, some of the lender have removed their 40 year amortization already.  Give me a call to get your approval today and get the 40 year amortization-905-978-7283

New products available for purchasing a rental property.  100% financing available.  Please contact me for

details.

905-978-7283  

Canada's prime went down 0.25% last week to 5.75%.  The possiblility of another decrease is possible due to the effects the American market is having in Canada.  

The rates today are as follows:

6 months      6.50%

1 year          5.74%

2 year          5.99%

3 year          5.99%

4 year          5.99%

5 year          5.79%

7 year          6.20%

10 year        6.30%

Many variable rate options including introductory rate of prime less 2.51% 

Take advantage of the low rates and consider transferring from your existing lender.  Its easy and most or all expenses are covered.  

Consider refinancing to do that renovation or consolidate debt----or both

The prime lending rate is down by 0.25%.  It is expected that the fixed rates could come down shortly. Clients currently in variable rate mortgages are in good position.  The high Canadian dollar and the lower bond prices are the major factors in the rate decrease.

See below article by Benjamin Tal (CIBC econominst) regarding the US Sub Prime market

It’s far from over. The news from the US subprime space will get much worse in the coming year, with default rates surging to

unprecedented levels. But what really counts for the market is how much of this bad news is already reflected in current prices. It turns

out that not only did the barrage of negative headlines of recent months raise the level of market immunity to adverse subprime

news, but in fact, even after its recent improvement, the mortgage-backed market is currently pricing in a darker picture than

the one likely to emerge when the smokeclears.
Subprime Defaults—You Ain’t SeenNothing Yet
While the credit squeeze extended well beyond subprime, the reality is that, at its core, this is a subprime crisis. And the news

coming from that space will continue to dominate markets. So let’s see what’s in the pipeline. The process of mortgage rate resets—the catalyst of the subprime meltdown—is far from over. Interest rates on roughly $700 billion worth of mortgages are due to be adjusted upward by the end of 2008. The number of reset  ortgages will reach its peak late this year and will start easing slowly during the course of 2008. More than three-quarters of those mortgages are securitized, and more than 70% of them are subprime (Chart 1).

That picture is well understood. But what matters is not just the direction of the default rate, but its ultimate magnitude. There is

enough information in the pipeline to allow us to form an educated guess regarding the likely trajectory of subprime defaults in the

coming years.
Bad Loans Getting Worse
Since the vast majority of the subprime mortgages taken since 2004 were originated with a teaser rate that is fixed for two years,

the mortgages now being reset and those that will be reset in 2008 are the ones that were originated in 2005 and 2006. And as

illustrated in Chart 2, the quality of those mortgages has deteriorated with every passing vintage year. The risk distribution of

adjustable rate mortgages taken in 2006 (to be reset in 2008) is much less favorable than the 2005 vintage which, in turn, is

worse
than the 2004 vintage.

World Markets – StrategEcon

Containing Contagion

CONTAGION - When an economic crisis in one country's bond or equity markets spreads to other countries which experience the same problems. The term comes from the more general definition of contagion, which is a highly transmittable disease. 

Just how damaging contagion effects will be to credit and equity markets remains to be seen.  Funding billions of dollars in the overnight market may not be the “Greenspan put” that the equity market had hoped for. However it is a strong commitment the central banks are not going to allow accidents in financial engineering threaten the economy. The Bank of Canada was leaning towards another rate hike, but with recent activity it appears this theory will be sidelined over the next few months. Modest US growth and a firm Canadian $ will be seen as sufficient anti-braking inflation forces.

The housing market will continue to suffer in the US and US mortgage arrears will get worse as interest rate resets on adjustable rate mortgages peak later this year. Despite the sufferings of our neighbour’s to the south, Canada’s own housing market has demonstrated extraordinary resilience.  We have seen a slight ease during the first half of 2007 compared to the same time last year, but the decline is only a fraction of the damage suffered in the US. Resale activity remains robust in Canada and home prices in Canada are charging ahead at roughly 10% per year. Building permits suggest starts could be still heading higher if it weren’t for our shortage of construction workers (Western Canada). Canada is nearly at full employment in the construction industry, particularly in Western Canada. 

It is mentioned in the CIBC World Markets report that Canada “remains safely divorced from a US-Style mortgage fiasco that has battered financial institutions.  Subprime default rates in Canada are at less than 3%, 10 points below the US. It is expected this margin will only increase over the coming months. Canada has proven that our lending practices are more conservative than our neighbour’s to the south. Canadians tend to take on more manageable mortgages and we tend to take on fewer questionable borrowers.  Still the sub-prime mortgage market is barely 5% of mortgage originations (2006).

What’s in the Pipeline?

“Market optimism is back. But if it’s based mainly on expectations for a fed rate cut, then the recent stock market recovery is on shaky ground”  The words subprime crisis cab be used to describe recent months and/or  more recently weeks.  Mortgage rate resets were the catalyst of the subprime mortgage meltdown, one that is far from over. Approx $850 billion worth of mortgages are due to be reset during 2007 and 2008. These resets will be peak come November and will start easing into 2008. Year-to-date only one third have been reset. Of these mortgages, 75% are securitized and 80% are subprime.  The bottom line is the subprime mortgage market in the US will continue to make headlines and get worse before it gets better

Are you looking to purchase or know someone who would like to buy?  Don't have a down payment? No problem.....you don't need a down payment.  If you have sufficient savings to cover your closing costs which are approximately 1.50% of the purchase price, and you qualify under normal lending criteria, you can purchase.  You can get the discount rates also.  Give me a call or drop  me an email if you want more information.

bjeysman1@cogeco.ca    905-978-7283 

You can receive a rate guarantee for up to 120 days.  If you are looking to purchase, refinance or renew, you can receive a rate guarantee now and it will protect you from any rate increases during that time.  If the rate goes down, the lender honours the lower rate.  Drop me an email today if you would like to receive a rate guarantee.

Free or no down payment available along withup to 40 year amortizations.  Great variable and fixed rates

Have a great weekend. 

RECOMMENDATION FOR MORTGAGE BROKER - BETH JEYSMAN

At the beginning of July I moved into my new home, which for me was house #5.

I've always arranged my mortgages on my own either through a bank or major mortgage lender.

This time however, I tried the services of Beth Jeysman who has a posting on our bulletin board.

I am totally impressed with the service I was provided by Beth.  I was given the feeling that

I was her only client, she handled ALL negotiations and paperwork, plus I got a mortgage rate

lower than any institution I checked out on my own.  To top it off the bank I ended up with

gave me all kinds of extra perks.  Beth is very easy to talk to and deal with, and always easy

to reach.  I would recommend anybody in the market for a mortgage to give her a call.

Feel free to call me for any further info regarding my dealings with her.

Dave Hamlyn