Renovation tax credit a hit with consumers

June 29, 2009

OTTAWA–A new poll suggests more than one in three Canadians plan to take advantage of the federal government’s home-renovation tax credit.

More than eight in 10 questioned in the Harris-Decima/Canadian Press survey said they were aware of the program, under which eligible applicants can receive a tax rebate of as much as $1,350 if they invest up to $10,000 in renovations on their home.

“Unlike many new tax policies, which only get noticed by accountants and actuaries, the government of Canada has successfully communicated the introduction of the home-renovation tax credit to Canadians,” said Harris-Decima’s senior vice-president, Jeff Walker.

“This program appears to be helping stimulate the economy as well.” Read more

Pre-Approvals: A Dying Breed?

June 23, 2009

Industry news – below is a blog posted by Canadian Mortgage Trends on June 18, 2009.

Pre-approvals are something many lenders could do without.  The problem (from a lender’s perspective) is that people get pre-approved and then frequently don’t close.

One bank that recently did away with pre-approvals in the broker channel was rumoured to be losing $20 million a year on them.

Pre-approvals are pretty expensive, and the return for lenders is debateable.  In most cases, less than one-third of pre-approvals actually close.  Meanwhile, the lender is tying up human resources to process the applications, as well as capital to hedge the rates (if rates move adversely, the lender is on the hook, so lenders pay to lock-in the interest rates using derivatives). Read more

Don’t handcuff your mortgage

June 16, 2009

Below is a Financial Post article by Garry Marr, published: Friday, June 12, 2009.

Would you like to pay an extra $300 per month on your mortgage? Not likely.

That hasn’t stopped a number of Canadians, with the deal of a lifetime on a variable-rate mortgage, from switching over to a more expensive fixed-rate product and paying the extra freight.

A fear of rising rates is driving the rash decision. But if you’ve finally managed to pin your banker to the ground, why on Earth would you let him off the mat?

More than 28% of Canadians have a variable-rate product tied to prime, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP). If you negotiated a deal before October of last year, chances are you are now borrowing money for as little as 1.35%. That’s based on deals that at one point saw the banks giving 90 basis points off prime. Prime is now 2.25%.

Read the full article here.

New 50/50 mortgage

Merix Financial and TMG have launched a brand new hybrid called the 50/50 “Wise” Mortgage.  It lets borrowers lock in 1/2 of their mortgage at a 5-year fixed rate and 1/2 at a 5-year variable rate.  The effective combined rate is 3.38% as of today.

Hybrid mortgages offer interest rate diversification that may be suitable for some home owners. When it is difficult for a borrower to choose a fixed or variable rate mortgage, choosing a hybrid mortgage may be the answer to some borrowers:

Some experts think hybrids are a great idea.  Dr. Moshe Milevsky, a prominent mortgage researcher, in the past said that “People should strongly consider mortgages that are part fixed and part floating.”

For more info on 50/50 mortgage, follow this link here.

Kindly contact me (Elsie Tse) at 604-716-3369 or Email Me 

Return to Homepage.

The Merix 50/50 “Wise” Mortgage

June 16, 2009

 Vancouver Home Mortgage: the 50/50 mortgage

Hybrid mortgages offer interest rate diversification that may be suitable for some home owners. When it is difficult for a borrower to choose a fixed or variable rate mortgage, choosing a hybrid mortgage may be the answer to some borrowers:

Some experts think hybrids are a great idea.  Dr. Moshe Milevsky, a prominent mortgage researcher, in the past said that “People should strongly consider mortgages that are part fixed and part floating.”

Merix Financial and TMG have launched a brand new hybrid called the 50/50 “Wise” Mortgage.  It lets borrowers lock in 1/2 of their mortgage at a 5-year fixed rate and 1/2 at a 5-year variable rate.  The effective combined rate is 3.38% as of today.

What is a 50/50 mortgage?

·         50% of the mortgage is at current standard 5 year fixed rate pricing (currently 4.44%)

·         50% of the mortgage is at current ARM pricing (currently prime + 0.45%)

·         Effective rate is approximately 3.57% based on current rates!!!! 

·         One collateral charge is registered

·         ARM is convertible at any time during the term of the mortgage to our best fixed rates.  ARM must be locked in to remaining term so both portions mature at the same time

·         Mortgage is portable either into a new 50/50 Balanced Mortgage or the borrower can lock in the ARM portion prior to porting and port the whole mortgage as a blended fixed rate.

The 50/50 Balanced Mortgage Borrowers that choose the 50/50 balanced mortgage will benefit from historically low fixed rates and low ARM rates now and have the opportunity to lock in their ARM rate to a fixed rate at any time during the term of their mortgage.  Your borrowers will be protected by being locked into a low fixed rate now and by having the ability to lock in their ARM portion at our best fixed rates at any point during the term of the mortgage.

The perfect balance

Kindly contact me (Elsie Tse) at 604-716-3369 or Email Me 

Return to Homepage.

50/50 Mortgage

June 16, 2009

What is a 50/50 mortgage?

·         50% of the mortgage is at our current standard 5 year fixed rate pricing (currently 4.44%)

·         50% of the mortgage is at our current ARM pricing (currently prime + 0.45%)

·         Effective rate is approximately 3.57% based on current rates!!!! 

·         One collateral charge is registered

·         ARM is convertible at any time during the term of the mortgage to our best fixed rates.  ARM must be locked in to remaining term so both portions mature at the same time

·         Mortgage is portable either into a new 50/50 Balanced Mortgage or the borrower can lock in the ARM portion prior to porting and port the whole mortgage as a blended fixed rate.

The 50/50 Balanced Mortgage Borrowers that choose the 50/50 balanced mortgage will benefit from historically low fixed rates and low ARM rates now and have the opportunity to lock in their ARM rate to a fixed rate at any time during the term of their mortgage.  Your borrowers will be protected by being locked into a low fixed rate now and by having the ability to lock in their ARM portion at our best fixed rates at any point during the term of the mortgage.   The perfect balance.

The Merix 50/50 “Wise” Mortgage

Merix Hybrid mortgages offer interest rate diversification that may be suitable for some home owners. When it is difficult for a borrower to choose a fixed or variable rate mortgage, choosing a hybrid mortgage may be the answer to some borrowers:

Some experts think hybrids are a great idea.  Dr. Moshe Milevsky, a prominent mortgage researcher, in the past said that “People should strongly consider mortgages that are part fixed and part floating.”Merix Financial has launched a brand new hybrid called the 50/50 “Wise” Mortgage.  It lets borrowers lock in 1/2 of their mortgage at a 5-year fixed rate and 1/2 at a 5-year variable rate.  The effective combined rate is 3.38% as of today.

The product is suited to borrowers who are:

  • afraid to take a variable term mortgage, due to fear of rates going up.
  • those not comfortable to lock into a fixed rate mortgage.
  • un-decide whether to get a fixed or variable mortgage.

Each portion of Merix’s 50/50 mortgage operates independently, like two separate mortgages.  Yet, the product is registered as only one charge.

Merix’s 50/50 mortgage offers:

  • up to 20% lump-sum pre-payment annually
  • 20% increase in monthly payment
  • mortgage portability to another home
  • option to lock in the variable-rate portion at any time
  • a 120-day rate hold on purchases, 60 days on refinances
  • 20 to 35-year amortization

No switches/transfers are permitted (people at other lenders must refinance if they want it) and there are no pre-approvals.

Bank of Canada maintains overnight rate target at 1/4 per cent

June 5, 2009

FOR IMMEDIATE RELEASE: June 4, 2009

Current policy rate may hold until the end of the second quarter of 2010

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent.

Information received since the Bank’s April Monetary Policy Report (MPR) is broadly consistent with the Bank’s medium-term outlook for output and inflation in Canada. The economy is undergoing major restructuring in a number of sectors. The already significant output gap will continue to widen through the third quarter, putting downward pressure on inflation. Read more