July 26, 2008
The real estate market in Western Canada is expected to face some major challenges. Large inventory build-up of resale and new homes and unusual contraction in sales over the past few weeks are causing concerns as how Canada’s housing market will hold up.The drop in housing demand was reported in The National Post “West leads drop as Canadian housing slumps“. The July sales housing sales slump in BC will likely make worst headline early next month.
The economic news are gloomy and Canadian consumers and home owners will need to deal with the new reality of slower growth, higher unemployment, declining home prices, higher interest rates, tighter credit and lower immigration to the major city centers.
“Lost amid concern over United States government agencies moving in to support mortgage lenders Freddie Mac and Fannie Mae plus IndyMac Bankcorp, was a warning that Canada could soon face its own mortgage crisis.”
The National Post reported “Mortgage crisis may be looming for Canada“The tighter under-writing, termination of the 40 years amortization and 0$ down payment financing by CMHC, uncertainty in the stock markets around the world are making Canadian consumers less confident. An earlier news report was saying Canada might in fact be in a recession. If Canada’s economy follows the US, UK, Spain, Australia and now New Zealand, we may not be far from facing a similar fate with our housing and financial market.
Moving forward, the state of Canada’s economy and the challenges faced by consumers were summed up by National Post Columnist, Diane Francis’s ” Debt meltdown summer notes“
July 18, 2008
Second mortgages and hard money financing are a short-term loans that help to solve urgent financial problems faced by home owners. A borrower’s home is used as a collateral to secure the second mortgage or hard money required by the borrower.
Hard money financing is dealing with short-term“bridge financing”. It is a “distress” loan that helps to tie over an urgent need to resolve a financial problem. The loan amount required as a second mortgage is normally between $30,000 to $150,000. But, in the case of a 1st mortgage financing, the loan amount could be sizable and in excess of $150,000. This type of financing provides 1st mortgage loan to pay off the original mortgage lender who is demanding immediate loan repayment or foreclosure proceedings have already been initiated by the mortgage lender.
Losing a home through foreclosure is financially costly, emotionally stressful and may have a long term effect on a home owner’s credit standing and hamper a borrower future credit application. Hard money financing may provide the solution to re-organize your debts and help to stop the foreclosure proceeding against you.
If you are faced with financial difficulties in making your mortgage payment on time, you need to consult your bank, a mortgage loan officer or a lawyer as how best you can solve your problem. Once your delinquency stretches over 120 days, your bank will demand for repayment of the loan owing, or foreclose your home to recover the loan.
Click on this link on “saving your house from foreclosure”.
If you like to find out more information on getting a 2nd mortgage or hard money financing, kindly contact James Wong at 604-721-4817 for a discussion.
Related Articles & Links
July 18, 2008
Effective October 15, 2008 CMHC 40 years mortgage will not be available to home buyers in Canada. CMHC and Genworth Financial will continue to offer their 35 years mortgage.
In addition, home buyers are required have 5% down payment for CMHC financing. The requirement for 5% down payment could make it harder for first-time buyers to qualify for government-insured mortgages.
Requiring buyers to put down 5 per cent of the purchase price in cash will have a bigger impact than the vanishing 40-year mortgage, says Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals.
Borrowers will also need a minimum credit score of 620 to qualify for a government-insured mortgage. The minimum credit score used for government-insured mortgages can be less than than 620 presently if a borrower’s employment history, income, co-signer or other factors make sense.
The elimination of the 40 years mortgage means an extra $50 to $60 monthly payment for a 35 years plan. This is not expected to deter a home buyer from buying a home.If you like to speak to have more information on getting a 40 years mortgage, you can contact James Wong at The Mortgage Group.
July 18, 2008
The role of a Mortgage Broker or Advisor
A Mortgage Advisor provides a valuable and convenient service to home owners. Many home owners use the services of mortgage brokers for the following reasons:
1). A mortgage broker will save you time. There are many different types of products which may be intimidating for new borrowers. Furthermore, most people do not know what kind of questions to ask when negotiating mortgage terms.2). Get the best mortgage rate - Mortgage brokers can arrange the most competitive mortgage rates and mortgage plan must suitable for their clients. Your local mortgage broker represents you, the borrower and not the bank.
3). Get the best products. Mortgage brokers have access to different mortgage lenders and their products. Depending on your situation, a Mortgage broker’s job is to help you get financing tailored to your requirements.
4). Avoid costly mistakes - Selecting the wrong mortgage can end up costing you thousands of dollars. You broker has to stay competitive and offer you the best deal, or he or she is not getting your business.
5). Personalized service - Home financing is a highly competitive business, and most mortgage brokers offer personalized, professional and timely service to their clients. Find a mortgage broker who can help you manage your mortgage more efficiently. It is a BIG DEAL showing you how to pay off your 30 years mortgage in just over 11 years at the same monthly mortgage payment.
As a mortgage professional, I have the knowledge and experience to help you get the home financing you needed. Here are a few simple tips that can save you tens of thousands of dollars in mortgage interest payment.
Call now at 604-721-4817 for a free consultation. Or, Email Me Now.
July 18, 2008
You work with the best and most knowledgeable Realtor to help you buy your home… you should do the same when dealing with your mortgage.
We offer a comprehensive service and help you find the mortgage that best suits your financial needs. As your local BC mortgage broker, I have experience and knowledge to arrange the mortgage that is right for you.
With 19 years experience in the real estate and mortgage business, you can be assured of my unbiased opinion and dedication to help you with your real estate needs.
You can contact me at 604-721-4817, or send me an email.
July 16, 2008
Financial Post Published: Thursday, July 10, 2008.
TORONTO — The federal government has cracked down on the mortgage industry with new rules that will make it more difficult for consumers to borrow. But many market observers think it is too little too late.
One of the key measures is a requirement that all mortgages have at least a 5% down payment. Competition in the mortgage industry has allowed consumers to put zero money down on a home and still get a competitive rate.
The government’s other key measure is to introduce a stipulation that insured mortgage products have an amortization period of no longer than 35 years. In the past two years, the amortization period has stretched from 25 years to as much as 40, with some people suggesting a 50-year amortization was next. Read more
July 7, 2008
Below is an articles posted by John W. Schoen, Senior Producer MSNBC on July 07, 2008:
Rising food and gas prices, falling home values and more job losses are making readers pretty gloomy. So just how bad is the current economic slump compared to other downturns?
There have been five official recessions in past 35 years. The most recent ones were fairly mild. So if you were born after 1965, you haven’t been through a nasty recession as an adult. Yet.