Tag Archives: Mortgage Refinancing

CAAMP Releases Highlights From Fall 2011 Consumer and Industry Surveys

The focus of these surveys was to gather Canadians’ opinions of the mortgage industry. The report includes specific questions on experiences with their mortgage professional as well as information and feedback from industry members.

The survey results were presented by Maritz Research at Mortgage Forum 2011 in Toronto.

Click here to review the entire report.

CAAMP Report Finds Canadian Consumers Believe They Have Too Much Debt

The seventh annual State of the Residential Mortgage Market report, conducted by CAAMP (the Canadian Association of Accredited Mortgage Professionals) has found that consumers are worried about debt. The report, which included survey data from 2,000 Canadians (half of which were homeowners), asked participants to what extent they agree with various statements based on a 10-point scale: a response of 10 indicated complete agreement. The statement, “as a whole, Canadians have too much debt,” received the the highest degree of agreement, scoring an average rating of 7.98 out of 10.

While debt remains a major cause of concern, there is a widespread opinion that Canadian real estate is a good long term investment. Consumers still feel that a mortgage is a “good debt” and very few regret taking on the size of mortgage that they did. However, there is still a very big perception that Canadian homeowners are largely unprepared for the financial obligations of purchasing a home. Continue reading →

Saving Strategies for Canadian Homeowners

Save Smart: How to Manage Money and a Mortgage

According to a recent Canadian Payroll Association survey, nearly 60% of Canadians don’t have enough money in the bank to cover even one month’s worth of necessary expenses. Too many homeowners are living on the edge of financial disaster, spending money that they should be saving. If you’re finding it difficult to save, now’s the perfect time to reassess your financial strategy, curb your spending, and improve your investment portfolio. Keep more of your money with these saving tips from the mortgage brokers at FamilyLending.ca.

Saving Strategies for Canadian Homeowners

Saving is easier than you think. All it takes is a little financial knowledge and foresight.

Saving Tip #1 – Pay Yourself Saving is simple when you don’t have to think about it. The mortgage brokers at FamilyLending.ca recommend setting up a savings or investment plan that automatically transfers money from your paycheque into your savings account. Not sure how much you should be saving? Start with 10% of your gross income. Whatever amount you choose, make sure you don’t spread yourself too thin.
Saving Tip #2 – Get Rid Of Debt Carrying consumer debt can really hurt your ability to improve your savings. Let’s pretend that you’re carrying a credit card charge of $1,000 plus 18% simple annual interest. Every year, you’re paying an additional $180 in interest charges. Pay off that debt and you’ve saved $180. That’s the same as investing $1,000 in something that earns an 18% return after tax. The more debt you carry, the more money you waste paying off high interest charges. Eliminate debt and you’ll automatically save more money.

Save Money on Your Mortgage

Are you paying more than you have to on your mortgage? Refinancing your mortgage could save you thousands of dollars. The mortgage brokers at FamilyLending.ca recommend refinancing your mortgage if:

Your mortgage rate is more than 2% higher than current rates, and you have less than 2 years until maturity. Remember to always check with your mortgage holder to determine if there’s a penalty for getting out of your current arrangement.
You’ve built up enough equity in your home. The more equity you have, the more likely you’ll be able to refinance and tolerate a floating or variable rate mortgage. This type of mortgage is known for offering lower interest rates, but unpredictable monthly payment requirements. Speak with your FamilyLending.ca mortgage broker to determine if this is an option for you.

Expect Ups and Downs When Investing

It’s no secret that too much risk can hurt your investment portfolio’s growth rate, but so can sticking to ultra-safe investments that pay one percent or less. When reassessing your investments, make sure that:

You’re in it for the long haul. Don’t chase every market fad in hopes of making a quick buck. Studies have shown that it’s long-term discipline that provides the highest average returns.
You diversify with a healthy mix of stocks and bonds. A good rule of thumb to stick to: the fixed-income holdings in your portfolio should equal your age. This is because as you get older you’ll want to be more conservative in your approach.
Know when to sell. The financial experts at FamilyLendingFinancial.ca recommend that no holding should make up more than 5-6% of your portfolio.

Need more help making senses of your money? Then contact the mortgage brokers at FamilyLending.ca. Or our financial gurus at Family Lending Financial are here to help you save.

Chantielle Kennedy writer for FamilyLending.ca

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.