Category Archives: Residential Mortgages

Mortgage Rates Stay Low – But For How Long?

 

Bank of Canada Governor, Mark Carney, confirmed on Wednesday that he has no immediate intentions to raise mortgage rates; however, Carney did confirm that “some” of the stimulus currently bolstering the system would be “eventually withdrawn.”

 Carney made these statements following the release of fresh data from the Canadian Real Estate Association stating that some of Canada’s urban housing markets are grossly overvalued. Even though the pace of Canadian home sales is currently in line with the 10 year-average, prices are continuing to escalate, rising a staggering 8.6% nationally during the month of May. Home prices are surging in cities like Vancouver, Toronto, and Montreal, which has Carney worried about unfounded excess.

 Factors Affecting the Surge

While Carney has been careful to avoid referring to the current housing market as a bubble, the signs all point to impending problems. Elevated levels of ‘multiples’ inventories, increased development, and heavy investor demand are three of the factors currently driving housing and condo prices through the roof. Unfortunately, information from Statistics Canada doesn’t support the current spike in demand. Recent stats show that the average Canadian families’ income (including earnings, investments, and private pensions) fell 3.2% in 2009, making it the first significant drop in market income since the early 1990’s. So who exactly is driving the demand for investment properties? Realtors point to an influx of foreign investment interest, specifically from Asian nations.

 Finding the Silver Lining

While many potential home buyers see the rise in home prices as an impediment to homeownership, it isn’t all bad news. Even though home prices are skyrocketing, mortgage rates have remained at historic lows… for now, at least. These lows can’t last forever, and if Carney’s comments are any indication of future increases, home buyers can expect hikes to come fast and furious once they hit. As long as mortgage rates stay low, Carney warns that Canadian financial authorities will remain vigilant and ready to move at the first sign of any imbalance.

 How to Take Advantage of Low Mortgage Rates

Borrowers with strong credit and stable jobs are in a prime position to save big by refinancing their mortgage in order to take advantage of record lows. While the low rates have sparked a surge in refinancing activity, many homeowners are oblivious to the fact that they could be saving more money on their mortgage. Homeowners throughout the country can begin their journey to lower mortgage payments online by answering a quick and easy mortgage pre-approval questionnaire. If you’re a first-time home buyer looking to purchase your first piece of real estate, don’t wait to secure your mortgage rate. The rate you see tomorrow could be three times higher than the current offer.

 As with any market, it pays to act fast. Now’s the time to review the up-to-date rates and refinance your mortgage.

 Chantielle Kennedy writer for FamilyLending.ca

Makes Cents to Me!

 

Today I wanted to talk to you about “odds”.  Not the opposite to “even”, but what are the odds of an event happening.  It amazes me the amount of people who always seem to be in front of me at the variety store either checking their lottery numbers or dropping $50 bucks to get the numbers for the next draw.  Just imagine.  Yes, just imagine that the odds of hitting it big with the lottery are about 13 million to one.  Did you know that you have a better chance of being struck by lightning or to do the math you would have to be struck by lighting 22 times to equal the odds of winning big in the lottery.  I find it intriguing that most people still spend billions of dollars each year for the chance to hit the “big one” but don’t spend their money to protect themselves and their families with events that can happen much more often.  Did you know the chances of getting cancer today are about 3 to 1?  That means that out of every 3 people you know, one of you will be diagnosed with cancer in your lifetime.  Yet, how many of us have purchased critical illness insurance?  Sure you won’t get millions from your insurance company but $50000-$100000 or more would certainly help their family in this time of need. Did you know that a 20 year old will have a 3 in 10 chance to de disabled for 90 days or greater in their lifetime?  Do you have coverage’s in place that will take care of your family if you can’t work? 

Did you know that 1 in 3 of us will die from heart disease?  What steps have you taken to ensure that your family will be taken care of in your absence?

 I know that you’ll lose the anticipation and excitement of the chances you will actually win the lottery and the dreams of how you’ll spend this “win fall”, but you can surely find some peace and solace in knowing that in the event of an unforeseen illness or injury that, financially, things will still be okay.

 I like most people play the odds every day.  Do I get a higher deductible on my car insurance to lower my premiums taking a chance I won’t get in too many accidents?  It’s a choice we all have to make day in and day out but please take my advice and put your money where it will help you and your family the most. 

Use the odds in your favour, start today and plan for a long and healthy tomorrow. It makes cents to me.

Will Carey from Family Lending Financial