vancouver-home-mortgage.com

Obtaining a mortgage deal in Canada is no cakewalk

vancouver-mortgage — Tue, 13 Mar 2012 05:16:18 +0000

Canada, the city of gardens, is not only known for its maple syrup, the Canadian goose, or the beaver but also for a number of people, who are literally struggling to borrow mortgage loans. If you planning to borrow a mortgage loan or planning for a mortgage refinance in Canada make sure you are aware of the mortgage lending criteria well. Read on to know the basic preparations which will help you meet the criteria set by the mortgage lenders in Canada.View homes for sale in Greater Vancouver.

First and foremost, save an adequate amount of money for a down payment. If you are looking for a traditional mortgage, you need to arrange for a down payment of 20 percent of the mortgage value. Whereas if you have already secured the loan amount with a mortgage loan insurance, you can qualify for a mortgage with a down payment of 5 percent. However, in order to qualify for 5% down payment mortgage, you have to be a permanent resident. In case you have a temporary residence, you have to pay at least 10 % of the total mortgage. These mortgages, which carry a down payment of below 20 percent, are known as high-ratio mortgage. This is because here the loan value covers at least 80 percent of the lending value of your house. You need loan insurance to cover especially these high-ratio mortgages. However, it can certainly augment the carrying cost of the mortgage considerably.

In order to qualify for a mortgage in Canada, you need to have a steady income flow, which will help you take care of the regular interest payments. Therefore, make sure your check whether you can afford to make the mortgage payments or not before finalizing the deal. As per the Canada Mortgage and Housing Corporation, Canada’s national housing agency, ideally, one should keep the housing costs including monthly mortgage principal and interest payments, taxes and heating expenses less than 32 percent of his gross household monthly income in order to qualify for a mortgage loan.

If you are already struggling with other financial obligations, you might have some trouble meeting the mortgage lender’s criteria in Canada. Ideally, as per the Canada Mortgage and Housing Corporation, your monthly payment loads like car loans or credit card payments must not exceed 40 percent of your gross household monthly income.

Last but not the least, unless and until, you build strong payment history and a good credit score, you wont qualify for a mortgage loan in Canada. However, in few cases you can qualify for a mortgage even with a bad credit, provided you have a cosigner to support your loan proposal. In case you default on your payment, your cosigner will remain responsible to pay back the loan amount. Before meeting your mortgage lender make sure you have keep the required documents ready. You must carry your driver’s license, employee details, salary proofs, bank account particulars, testimonies for financial assets; and down payment verified details.

Keep the aforementioned points in mind and ensure the mortgage loan in Canada quite easily.

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CANADIAN MORTGAGE INSURANCE RULE CHANGES

vancouver-mortgage — Thu, 04 Mar 2010 22:03:42 +0000

Further to the recent insurance guideline announcement, mortgage lending rules are tightened effective April 19, 2010.

Key interest to Canadian mortgage lenders is the “definition of the five-year standard rate used for mortgage qualifying”. The government is currently working on that definition, once those details are confirmed, it will be posted here on this blog.

The changes being implemented are prudent and will ensure long term stability in the real estate market. The changes are:

All borrowers must meet the standard for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;

(more…)

Tougher mortgage rules to cut down default risks

vancouver-mortgage — Thu, 18 Feb 2010 01:27:32 +0000

Below is a CTV News report, dated February 16, 2010.

Ottawa has tightened the rules for obtaining a government-backed mortgage, as it casts an eye towards expected future interest rate increases and the risks those pose for Canadian homeowners.

Finance Minister Jim Flaherty announced Tuesday morning that prospective homeowners will soon have to meet the requirements for a five-year, fixed rate mortgage — as opposed to the three-year standard in place right now. The rule will apply even if they choose a mortgage with a lower interest rate and shorter term.

View the video and read the article here.

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Fixed rate or variable rate mortgage?

vancouver-mortgage — Sat, 06 Feb 2010 23:44:22 +0000

TORONTO, Feb. 1 /CNW/ - With interest rates at a record low, a growing number of people are looking to purchase a home. Every homebuyer faces the age-old question of whether to choose a fixed or variable rate mortgage.

“The question of whether to lock in to a longer-term fixed mortgage rate or stay in a variable rate has become an increasingly complex and important debate,” said

Doug Porter, Deputy Chief Economist, BMO Capital Markets. “Short-term rates are at historic lows and pressure is likely to build for higher rates in the year ahead.”

Research shows that over the past 30 years it has been more cost-effective for borrowers to have a variable rate mortgage 82 per cent of the time. (more…)

Deciding on a mortgage

vancouver-mortgage — Wed, 03 Feb 2010 19:33:54 +0000

It is generally less expensive to continually roll over a short-term mortgage than to commit to a long-term one

By Eric Tyson and Tony Martin, published on Tuesday, Feb. 02, 2010.
This is the sixth in a series of 10 excerpts from Investing for Canadians for Dummies.

Whether to go for a short- or long-term mortgage is an important decision in the real estate buying process. You need to weigh the pros and cons of each and decide what’s best for your situation before you go out to purchase real estate or refinance. (more…)

Mortgage brokers handling growing number of deals

vancouver-mortgage — Thu, 21 Jan 2010 22:20:10 +0000

By James Pasternak, Financial Post - January 21, 2010.

When Hamilton, Ont., residents and partners Kathy Funke and Dan Perryman wanted to purchase an investment residential property in 2000, they did what most Canadians do when it’s time to borrow. They headed to the bank branches in their area.

They shopped around a bit, made lots of phone calls, compared mortgage conditions and rates and then signed.

“That was our first experience. We didn’t really know where to start. And I didn’t know anything about mortgage brokers at that time. (more…)

Re: Strata Property Act Amendments - Rentals

vancouver-mortgage — Mon, 11 Jan 2010 17:52:26 +0000

January 11, 2010

There has been a shortage of rental units for years in British Columbia. In order to address this, the Provincial Government recently passed legislation dealing with the rental provisions of the Strata Property Act (”SPA”).

Under the old section 143 of the SPA, a rental restriction bylaw passed by a Strata Corporation did not apply to that strata lot until the strata lot was conveyed by the first owner after the developer or until the date that the rental period disclosed in the RDS expired, whichever was earlier. Essentially the first owner was always able to rent out the strata unit until the expiration of the rental period disclosed in the RDS, but not subsequent owners. (more…)

Mortgage Rate Forecast

vancouver-mortgage — Tue, 22 Dec 2009 20:22:32 +0000

A release by BCREA for December, 2009:

Home buyers will benefit from a low mortgage rate environment through much of 2010. The BC Real Estate Association forecasts borrowing costs to rise more quickly during the tail-end of 2010 and through 2011.

“Mortgage rates will inevitably rise from current levels. Today’s low interest rates are the product of a global coordinated effort to mitigate the worldwide economic downturn through fiscal and monetary stimulus”.

Read the full report >

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Bank of Canada expected to hike interest rates in mid-2010

vancouver-mortgage — Wed, 09 Dec 2009 18:36:09 +0000

December 08, 2009

TORONTO — The Bank of Canada repeated its pledge Tuesday to keep interests rates at historic lows until the middle of next year to stimulate growth and a sense of stability in the midst of a slow economic recovery.

But, economists are calling for rate hikes as much as a full percentage point or more later next year, and say the bank’s commitment to keep its key rates at 0.25 per cent creates a false sense of security in borrowers who have taken on debts larger than they could normally afford.

The C.D. Howe Institute’s 12-member monetary policy council’s median target for the overnight rate was for one per cent in the second half of 2010. (more…)

Strong demand carries into late fall

vancouver-mortgage — Sun, 06 Dec 2009 01:22:40 +0000

Wednesday, December 2, 2009

VANCOUVER - Home values continued to edge upward in November as demand in the Greater Vancouver housing market remains well above seasonal norms.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 12.4 per cent to $557,384 from $495,704 in November 2008. This price, however, remains down 1.9 per cent from the most recent high point in the market in May 2008 when the residential benchmark price sat at $568,411. (more…)