Monday, March 25, 2013

Jim Flaherty thinks Canadians do not deserve low mortgage rates

low mortgage rates from Calgary mortgage broker
Canadians don't deserve low interest rates
Last week, Jim Flaherty, the finance minister of Canada contacted Manulife Bank and told them off for offering a 5 year fixed rate mortgage at 2.89% instead of their regular 3.09% rate.
 Every spring, all the lenders offer their best rates in the hopes of building market share and getting a bigger piece of the mortgage market. Rates fluctuate over the spring as each lender tries to get more mortgages and then they back off and another lender will jump to the front.
   This has happened every year that I have been a Calgary mortgage broker and I suppose it will in the future. The difference this year is government intervention. Last week was not the first time that Flaherty has interfered in bank operations.
  A couple of weeks ago he told BMO (Bank of Montreal) to cease advertising a 2.99% fixed rate.
People in the finance world are so upset they have started calling the minister, Comrade Flaherty.

   In response to the move towards creeping socialism and planned economies the Canadian finance industry is now offering for a limited time only, an unadvertised special of 2.89% for a 5 year fixed rate mortgage. If you feel that you should be able to decide whether you want to pay 2.89% or 3.09% because you are an adult then let me know. You can apply online at my website or email me from there. .
By the way, if you are in year 3 or 4 of a mortgage at 5% or so, it may be worthwhile to renew your mortgage now even with the penalties. Contact me and we can calculate your savings.
David Cooke is a Calgary mortgage broker with Dominion Lending Centres Westcor . He has been giving financial advice and processing mortgages since 1991. 

Friday, March 22, 2013

Getting a Mortgage Pre-Approval

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Getting a Mortgage Pre-Approval

If you are looking for a new home, be sure you are pre-approved. With a mortgage pre-approval, a licensed mortgage professional can do a more complete verification prior to sending you shopping for a home, and with that done, the dollar figure you are going shopping with is actually what you can spend.
The mortgage professional that you work with to get pre-approved will let you know for certain what you can afford based on lender and insurer criteria, and what your payments on a specific mortgage will be. Dominion Lending Centres mortgage professionals can lock-in an interest rate for you for anywhere from 60 - 120 days while you shop for your perfect home. By locking in an interest rate, you are guaranteed to get a mortgage for at least that rate or better. If interest rates drop, your locked-in rate will drop as well. However, if the interest rates go up, your locked-in interest rate will not, ensuring you get the best rate throughout the mortgage pre-approval process.
In order to get pre-approved for a mortgage, a mortgage professional requires a short list of information that will allow them to determine your buying power. A mortgage professional will explain to you the benefits of shorter or longer mortgage terms, the latest programs available, which mortgage products they believe will most likely meet your needs the best, plus they will review all of the other costs involved with purchasing a home.
Getting pre-approved for a mortgage is something every potential home buyer should do before going shopping for a new home. A pre-approval will give you the confidence of knowing that financing is available, and it can put you in a very positive negotiation position against other home buyers who aren't pre-approved.
David Cooke is a Calgary mortgage broker. For more information contact him via his website here.
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Tuesday, March 19, 2013

Over 2/3's find mortgage shopping stressful - survey

Survey finds obtaining a mortgage is complicated and time consuming


Haggling for a rate and deciding on the right term are among the most stressful parts of getting a mortgage, new ING DIRECT poll reveals
TORONTO, March 12, 2013 /CNW/ - As mortgage season heats up, a new survey commissioned by ING DIRECT finds that a majority of Canadians (67%) who have had or currently have a mortgage feel the process is either complicated (31%), confusing (20%) or hard to figure out (16%). Thirty-eight per cent of current or former mortgage holders say getting a mortgage is time consuming while one in five describe the process as annoying. By comparison, a mere 7% of respondents feel the process is stress-free.
"Whether you're a first-time home buyer or shopping around for a new mortgage, applying for a mortgage doesn't have to be a confusing or complicated experience," said Peter Aceto, president and CEO at ING DIRECT. "Choosing a bank that provides a great rate up front and offers flexible terms means saving both time and money over the long run. We're committed to making the process of getting into your home easier and giving clients the option to pay off their mortgage faster."
The survey revealed that negotiating for a rate (59%), deciding on the right term and payment schedule (55%) and getting customer service help from the lender (35%) are among the most stressful aspects of obtaining a mortgage. Respondents age 18 - 34 indicated haggling for a rate (65%) was among the most stressful part of the process while over half (56%) agreed researching and comparing offers made the process more difficult.
"There's an assumption that getting a mortgage from a branchless bank is more difficult. In fact, our mortgage Clients have a dedicated mortgage specialist to help them along the way," said Nicole Wells, Head of Retail Lending at ING DIRECT. "We always offer our Clients a great rate, and options that provide value and make the process simpler. Better yet, our Clients never have to go to a branch at all - they can apply for a mortgage from the comfort of their own couch."
Additional survey stats:
  • Respondents indicated that simplified language in mortgage contracts (41%) and the ability to obtain a mortgage from the comfort of their homes (16%) would make the process of obtaining a mortgage easier
  • 20% of those age 35-54 feel the ability to obtain a mortgage from home would make the process easier
  • 16% of respondents feel getting a mortgage would be easier if they had access to more education about mortgages
  • Current and former mortgage holders feel lenders (34%), brokers (20%) and family/friends (13%) provided the most help when obtaining a mortgage. If you want to discuss these findings and avoid stress in your life, contact me via my website or by email.
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Thursday, March 14, 2013

Calgry listed as an "out-performer" in Canadian real estate market


Pace predicted to be moderately lower for the rest of Canada


Calgary realtor Kaitlyn Gottlieb of Century 21 Bamber Realty Ltd.

Photograph by: Colleen De Neve Colleen De Neve, Calgary Herald

CALGARY — Canada is expected to embark on a gradual, modest, downward housing market adjustment over the next three years with a “measly” two per cent annual price gain over the next decade, says a study released Monday by TD Economics.
But the bank has also listed Calgary as an “out-performer” in Canada for the long-run rate of return on Canadian real estate. Compared with the national picture, Edmonton, Vancouver, Victoria and Toronto were also listed as out-performers for the future.
“With the slowdown in the Canadian housing market well entrenched, many are worried about the future value of their homes. This is not surprising as real estate is the largest financial asset most Canadians have in their possession,” said TD Economics.
“The housing market is prone to cyclical ups and downs and we should embark on a gradual, modest, downward adjustment over the next three years. We project a 3.5 per cent annual rate of return on real estate to prevail beyond 2015 – this is the long-run rate of increase for home prices in Canada. However, this pace will be moderately lower than they have been historically (5.4 per cent).”
Derek Burleton, vice-president and deputy chief economist with TD Economics, said Calgary had a run-up in prices before the recession and then a sharp decline during the recession.
“I guess prices didn’t come back too much but certainly sales fell back and now you’re getting a bit of a cyclical bounce,” he said, adding a long-term forecast takes into account key economic drivers like population growth and the potential of the economy to generate income.
“Based on some of the key drivers of growth, Calgary ranks right up there at the top and that should stand the housing market good stead. At least continue to drive above average price gains over the long run.”
The average MLS sale price in Calgary was $180,420 in 2000. That climbed to a peak of $423,770 in 2007 before dipping to $394,064 in 2009. From then, it has steadily climbed, reaching an all-time record of $428,644 in 2012.
Becky Walters, president of the Calgary Real Estate Board, said the Calgary market is really strong this year due to the in-migration it has been getting over the past 12 months.
“It’s not maybe as strong this year as it was last year but it’s certainly strong,” said Walters. “We’re seeing a nice steady growth. We’re seeing prices starting to come up a little bit not tons.”
For example, according to CREB, year-to-date until March 10, there have been 3,595 MLS sales in the city, up 4.66 per cent from the same period a year ago, and the average sale price has jumped by 9.23 per cent to $451,189.
However, at the national level, TD said a string of lacklustre performances over the next few years will mean that the annual rate of return for real estate in nominal terms will be a “measly” two per cent over the next decade, meaning home price gains should simply match the pace of inflation.
“Our research at REIN Canada is showing that for the coming five years, outperforming markets will be those based not in speculation or foreign investment, they will be those markets supported by underlying economics,” said Don Campbell, senior analyst and founding partner of the Real Estate Investment Network. “The Canadian real estate market is too broad and too diverse to paint with one story or byline and will become an increasingly regional story. Supporting economics such as increasing jobs, increasing population through migration — especially those areas which are attracting a younger, working age cohort — and increasing incomes will play a larger role in market demand and value than it has in the last five years.
“Despite Calgary and Edmonton’s value moves already experienced, they are both rated in the most affordable major centres in the country because average incomes are also higher than in most other regions. This, along with the younger age of in-migrants to these cities from other parts of the country, will be strong and supporting factors for these market for the coming years.”
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said in the Calgary region the average price in 2013 is expected to reach $423,000, up 2.6 per cent from 2012.
“The rate of growth is anticipated to be higher here than in many other areas of the country as the average resale price in Canada is forecast to increase by only one per cent in 2013,” he said. “Supply of homes in Calgary’s resale market has come down from a year earlier while sales have been fairly stable. The resale price in 2014 is forecast to continuing rising in Calgary, averaging $434,000.”

If you want more information on variable vs. fixed rates visit my website or email me. 
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Thursday, March 7, 2013

Tax Breaks for new home buyers

Well, it 's that time of year when we are doing our taxes. As you look for all your receipts and fill out your tax forms here's one tax credit you may qualify for.
 Did you buy a house in 2012? If so you may be eligible for a $750 tax credit. Check the CRA website to see if you qualify.
  Do you live in Calgary, Airdrie or Okotoks? Replacing your present toilet with a water reduction unit could get you up to $150 back from your municipality. This could pay for the toilet and then the water savings would all go directly into your pocket.
   Are you trying to save for a house? You will need a 5% down payment.  Did you know that you could use your RRSP's as part of your down payment.? Here's the strategy. Buy RRSPs and get a tax credit. Hold them for at least 91 days and then you can cash them out to use for the down payment.
  Note that you have to fill out forms at your bank or credit union to show that you will be paying these RRSP's back over the next 15 years to avoid having to pay income tax on the money you receive.
   This strategy can get you into a home now, while interest rates are low and home prices are still reasonable. While you are paying your mortgage down and building equity, you are also going to see your house value go up adding to existing equity.
  "but if I use this strategy I will have a mortgage and a RRSP payment at the same time, I'll be poor"
 No , not necessarily. Your mortgage payment should be pretty low and may be less than you have been paying for rent. As your RRSP only needs to be paid back over 15 years it's managable.
 If you cashed in $15,000 in RRSP's you would pay back $1000 per year or $83. a month. That's pretty manageable , isn't it?  If you need more information, you can visit my website at
There's plenty of information and informative videos. Feel free to contact me for more information as well.