Author Archives: familylending

Home Prices Rise for Second Consecutive Month: Teranet

 

According to the latest numbers the correction of housing prices late in 2010 seems to have been a short-lived phenomenon, as for the second consecutive month prices increased overall in four of six Canadian metropolitan markets. 

Canadian home prices in January were up 0.4 per cent from the previous month, according to the Teranet–National Bank National Composite House Price Index. It was the second consecutive monthly rise, following on three consecutive monthly declines. January prices were up from the previous month in four of the six metropolitan markets surveyed: 0.9 per cent in Vancouver, 0.5 per cent in Toronto, 0.4 per cent in Halifax and 0.3 per cent in Montreal. Prices were down 0.6 per cent in Ottawa, a fifth straight monthly decline, and one per cent in Calgary, a fifth decline in six months.

 

“January’s price increase confirms that the correction experienced towards the end of 2010 was short-lived,” said Marc Pinsonneault, senior economist with National Bank Financial Group. “In fact, market correction is now a local phenomenon (Ottawa and Calgary). At the national level, January’s prices were still one per cent below those in August 2010, but they were 5.5 per cent above their pre-recession peak.”

 

The 12-month gain in the composite index slowed to 3.9 per cent in January, the seventh consecutive month of deceleration. The largest 12-month rise was 8.2 per cent in Halifax. The 12-month increase was 6.4 per cent in Montreal, 5.3 per cent in Ottawa, 5.1 per cent in Vancouver and 3.9 per cent in Toronto. Only in Calgary were prices down from a year earlier, by 3.4 per cent.

 

Data for February from the Canadian Real Estate Association show generally balanced conditions in major urban markets. Relative to the average, conditions in Calgary were better for buyers and conditions in Vancouver better for sellers, a finding consistent with the movement of the Teranet–National Bank indices for these markets. The Toronto market is no longer tightening. Between January 17, when the federal minister of finance announced that the maximum amortization period for an insured mortgage would be reduced to 30 years from 35 years, and March 18, the announced effective date, the resale market may have been influenced by the prospect of this change.

 

According to Pinsonneault, market conditions are currently balanced in Canada. However the situation differs among regions. Conditions look somewhat tight in Vancouver and Toronto, while they are still favourable to buyers in Calgary. While house prices are high relative to income and rents, and a reduction in the maximum amortization period for insured mortgages from 35 to 30 years took effect recently, “there is no perspective of a sudden and severe price correction in Canada, given the fact that employment is well into expansion territory,” said Pinsonneault.

Source MortgageBrokerNews.ca   
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Canadians Save by Renewing, Renegotiating Mortgages With Brokers

 

The Mortgage Broker channel in Canada is highly competitive. Research shows that consumers recently renewing their mortgages with Mortgage Brokers came out way ahead of those renewing with other channels.Maritz Research Canada recently conducted a study of 2,000 Canadians. The study focused on Canadians’ opinions of the mortgage industry and specific feedback on their mortgages and experiences with mortgage professionals.Those who renewed or renegotiated recently with a Mortgage Broker reported an average rate decrease of 1.4 per cent from posted rates, compared with 1.0 per cent among all renewers. It is easy to understand why Broker market share is 27% on early term renegotiation and has potential to grow much higher.

Just one-third of Canadians say they have a good or full understanding of the services provided by Mortgage Brokers. The importance of awareness is clear: Broker market share is roughly twice as high among those who have a good or full understanding of Broker services when compared with those who have a lesser understanding.

The findings demonstrate that Mortgage Brokers could benefit from better explaining their services to home buyers in their local communities. Satisfied clients can also help their friends and families to save on mortgage renewals and renegotiation’s, by passing on their knowledge to alleviate any uncertainty about the Broker process.
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Original Article from REICO

Here Is A Method That Is Helping Home Owners Save Thousands On Their Mortgage

There is an age old debate that exists in the mortgage industry.  This debate is centered on what entity is the best mortgage provider.  Some argue that it is the major banks that are the best option, while others are convinced that the mortgage broker industry is the best bet.

 

The reality is that the average person has limited to no knowledge of the mortgage industry. As a result of this, they may believe that there are no differences between banks and mortgage brokers and the mortgage products that they offer.

 

In fact, it is no secret that sometimes the mortgage broker industry is looked upon as a sub par option when compared to major banks.  Unfortunately, the general public has a misconception that mortgage brokers are not looking out for the best interest of their customers.   This friends, could not be further from the truth.

 

I can tell you from my first hand experience that obtaining a mortgage through a mortgage broker, in most cases is the best option versus obtaining a mortgage through a chartered bank.  Here is the reason why:

 

Mortgage Brokers Work With Multiple Lenders

 

Mortgage Brokers like FamilyLending.ca have established relationships with multiple mortgage lenders.  It is not uncommon for a mortgage broker to know and work with 40 or more different lenders.  These lenders can be major banks, medium sized mortgage companies, or new, up and coming private mortgage lenders.  Because the mortgage broker, in this case FamilyLending.ca, has multiple relationships with a variety of lenders, they also have the ability to pick and chose mortgage interest rates and mortgage terms for their customers.

 

Mortgage Interest Rates Offered By Banks

 

If a customer obtains a mortgage from a bank, the bank is going to offer this customer their available rates on their mortgage products.  If the customer is not happy with the rate offered, and they are proactive enough to make a request for a reduced rate, chances are they may obtain a slight discount on the interest rate.  Please note though that just because the customer asks for the discount here does not necessarily mean that they will obtain it. 

 

Mortgage Interest Rates Offered By Mortgage Brokers

 

Due to the fact that Mortgage Brokers work with a large network of lenders, this allows them to have more flexibility when picking an interest rate for their customers.  For example, if a customer asks to have the most competitive mortgage interest rate currently available, chances are that the mortgage broker will be able to deliver on this for their customer.  This is simply achieved by the mortgage broker surveying their existing lenders in order to see who has the most competitive interest rate offer.  Once it is determined which lender has the desired interest rate for the customer, the mortgage would be set up through this particular lender.

 

Mortgage Terms Offered By Banks

 

The mortgage terms offered by banks are pretty much set in stone.  This is not necessarily a bad thing.  Banks are very much set on their ways and don’t easily deviate from their business strategies.    However, what this does mean is that there is very little to no flexibility at all when it comes to adjusting the mortgage terms.  Examples of mortgage terms would be things such as the maximum amortization allowed on a mortgage.  Most recently in Canada the maximum amortization length of a mortgage was reduced from 35 years to 30 years on March 18th 2011.  As a result, this means that most, if not all of the major banks in Canada will only be offering a maximum amortization of 30 years.  This is done by the banks in order to keep in line with the rule changes implemented by the Government. 

 

Mortgage Terms Offered By Mortgage Brokers

 

Again, due to the fact that Mortgage Brokers work with many different lenders, this means that they also have many different options in picking the appropriate mortgage terms for their customers.  For example, in using the example above, if a customer requests a mortgage amortization length longer than 30 years, chances are that the Mortgage Broker can deliver on this for their customer.  The Mortgage Broker is not limited to selecting the mortgage products for their customers from traditional lenders such as banks.  Therefore, they may choose to obtain the mortgage for their customer from a lender that offers amortization periods longer than 30 years.  There are still some lenders out there that are offering up to 40-year mortgages, despite the mortgage rule changes that occurred on March 18th 2011.

 

Overall, I am personally a fan of obtaining mortgages through Mortgage Brokers.  The majority of the mortgages that I have obtained have been through mortgage brokers, and I have been very happy with my decision regarding this.  I can confidently say that mortgage brokers have helped to save me thousands of dollars.  Not to mention, their advice has been instrumental in helping me to make thousands as well. 

 

 

 

Best Regards,

 

Neil Uttamsingh

 

Neil Uttamsingh is the President of First Rental Property.  He provides knowledge and confidence to individuals looking to buy their first rental property.  Follow Neil’s blog @ www.firstrentalproperty.com
Contact FamilyLending.ca for more information.

Steps For Home Buyers to Consider …

 

 

Step 1: Get Preapproved!

The first step in the home buying process is to take a moment to get the preapproval from a lender of your choice. This can save you hours of searching for properties that do not suit your budget, or what are even more painful, purchasing a home then discovering you are not eligible for financing.  Getting preapproved provides you with peace of mind, aids in limiting the search criteria and most importantly, gives your lender a fighting advantage by being able to alleviate a merchants worry about funding.  Latter is especially important should a competing deal surface.

Step 2: Seek Out Loan Conditions!

Prices will be flexible. Banks will gladly open their doors to get your business especially if you have a good credit rating and are interested in any other services they provide. 
Released rates would be the best starting point.  It is wise to know what the best rate is and this is completed by obtaining quotes of lenders posted rates from competitive companies. As well, asking if the financial institution covers evaluation charges, buy-out fees, penalties, payment options, portability etc.  can save you a great deal of money over the life of the mortgage.

Step 3: Make Sure You Receive Professional Inspection!

Nobody wants to purchase a home only to come to the realization that there are defects, concealed or not. Be sure to obtain assessments of the places necessary. If you get the results back and there are in fact inadequacies, the purchase cost may be discussed to deal with the crucial maintenance. The agent you’re working with can advise which assessments to consider.

Step 4: Utilize An Expert Broker!

The broker of your choice can help you make a purchase with the smallest number of difficulties. Your broker is able to ensure the cost will be marketplace cost. The lender can offer expert guidance regarding everything from incorporated factors, settlement techniques and so on. All things considered, it is their job to do what you want.

Step 5: Sell 1st Then Buy

In the event pricing will be significant, you should always sell your current house previous to purchasing another.  The best thing about this is it lets you know exactly what cash you’ll have available for your next investment. Getting rid of your home first allows one to put less restriction towards the investment, making the proposal very appealing. Sometimes, additional funds can be required by the home vendor which goes towards removing the property from the listings. An additional benefit will be when you find a property that you really love, chances are others will also find it attractive therefore; one could be put into a position that their proposal may be overlooked, but if you have sold your house already, this is not a problem.

Step 6: Understand Your Purchasing Expenses as a Whole

Know all the costs linked to the purchase. Consider the following fees: lawful charges, exchange taxes, building fees, remodelling and any other housing costs that are applicable. 
Contact FamilyLending.ca for more information.

February 2011 Housing Starts

 

CMHC annouced today:“The seasonally adjusted annual rate of housing starts was 181,900 units in February, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 170,600 units in January 2011.“Housing starts moved higher in February because of increases in Ontario and the Prairies,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “The bulk of this increase was felt in the multiples segment. From last month, multi-family starts were up in Saskatchewan and in Toronto.”The seasonally adjusted annual rate of urban starts increased by 9.4 per cent to 161,000 units in February. Urban multiple starts were up by 14.5 per cent in February to 94,900 units, while single urban starts edged higher by 3.0 per cent to 66,100 units.

February’s seasonally adjusted annual rate of urban starts decreased by 24.7 per cent in Atlantic Canada, by 7.1 per cent in Québec, and by 5.9 per cent in British Columbia. Urban starts increased by 29.3 per cent in Ontario and by 26.1 per cent in the Prairies.

Rural starts were estimated at a seasonally adjusted annual rate of 20,900 units in February.

As Canada’s national housing agency, CMHC draws on 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.”
Contact FamilyLending.ca for more information.