Mortgage Blog - Mortgage News
Financial Fitness of Canadians
July 28, 2010 by Dania Spillett
Genworth Financial Canada released a survey last week that suggests Canadian homeowners are in better financial shape compared to non-homeowners. Intuitively this makes sense since you really do need to have a decent grasp on your finances in order to purchase a home, or even just to get pre-approved.
The findings demonstrated that 65% of homeowners pay of their credit card balances in full each month compared to only 38% of non-homeowners. However, only 25% of homeowners actually took advantage of pre-payment privileges and made a lump sum payment or accelerated their mortgage payments in the last year. By using ...
Read more »Update on New Mortgage Rules - Dispelling Myths
July 21, 2010 by Gordon McCallum
I’ve noticed that there seems to be some confusion in the marketplace about some of the new mortgage rules
The good news is that these rules have not impacted the broadest section of the market as much as some had anticipated. As a quick summary, I’ve listed the major changes below – along with a counterpoint which allows you to still qualify in most cases:
1. Home buyers need to qualify at the Bank of Canada Qualifying Rate instead of the contract rate on mortgage terms less than 5 years or on variables.
Suggestion: get a five year fixed ...
Read more »New Mortgage Rules Start Today
April 19, 2010 by Gordon McCallum
Just a reminder that the new Canadian Mortgage Rules go into effect today. As a quick summary, there are three main changes that you’ll need to remember:
1. Home buyers need to pass a new qualification test: can you afford this home at the 5-year fixed rate? If you take a term shorter than five years you’re going to have to qualify at the new Bank of Canada “qualification rate”.
2. Maximum refinancing to 90% of the value – down from 95%. If you need to refinance, you’ll only be able to access 90% of the value of ...
Read more »New CMHC Rules for Stated Income Self Employed Borrowers
April 9, 2010 by Gordon McCallum
CMHC‘s new rules for “stated income” self-employed borrowers go into effect today. As a reminder, here are the new rules:
Please Note – these new rules only apply if you can’t prove your income using the traditional methods
Maximum Loan-To-Value (LTV):
- Purchase Transactions 90% (down from 95% LTV)
- Refinance Transactions 85% (down from 90% LTV)
Essentially this means that, in order to qualify under the CMHC “Business for Self” program you’ll need to put a minimum of 10% down if you’re buying a home, and if you’re refinancing you’ll only be able to access up ...
Read more »Global Regulation Threatens Canadian Mortgage Market
April 9, 2010 by Gordon McCallum
Most of you have heard the expression, “One bad apple ruins the whole bunch.” No doubt this is true. The same can’t be said, unfortunately if you’re the only good apple in the bunch.
I’ve often said that Canada has taken a bit too much credit for being clairvoyant and avoiding the subprime mess that the States got into, because the truth is that we were saved by time. The US was the canary in our mine. We ran out of race track before we got too heavily invested in subprime mortgages, but believe me – it was ...
Read more »First Foundation Newsletter - March 2010
March 25, 2010 by Gordon McCallum
In this issue:
- New Canadian Mortgage Rules – what they are, and how they’ll affect you.
* Rate Update
* Rates: When are they going up, and what should I do about it?
* Canadian Mortgage Awards – we need your vote!
New Canadian Mortgage Rules – In Effect April 19th, 2010
1. All high-ratio insured mortgages in Canada that have a variable rate or a fixed rate for a term shorter than five years will need to qualify borrowers based on the higher of the “contract rate” or the 5-year “qualifying rate” set by the Government of Canada, which incidentally, is the same as ...
Read more »New for 2009 Tax Year: Home Buyer's Tax Credit
January 7, 2010 by Shayla Damery
It’s almost tax season again, and you know how I can tell? I received my tax package in the mail yesterday. Being the numbers nerd that I am (I get excited about doing my taxes), I had to open it up and flip through the tax guide to get an idea of what kinds of credits, etc. that I would qualify for in the 2009 tax year. Something that was highlighted in the package is a new program for 2009 and subsequent tax years that I wasn’t aware of: the Home Buyer’s Tax Credit.
Basically, you’re ...
Read more »Orphaned Borrowers - And Why First Foundation Doesn't Do Subprime Mortgages
December 9, 2009 by Gordon McCallum
We’ve often been asked over the years why we don’t offer borrowers with beat up credit, unverifiable income, loads of debt, or other financial difficulties a mortgage.
After all, mortgage brokers can make a lot of money charging high fees and/or earning big commissions on sub-prime mortgages, because they’re usually offering them to people who are desperate. Justifying their actions is easy, because the broker is really that person’s only hope.
We don’t do it. We never have. We can’t justify it. Taking advantage of people who need help is never justified and ...
Read more »Mortgage Market Weekly Summary - October 2 2009
October 1, 2009 by Gordon McCallum
It’s been another wild and woolly week in mortgage land. It’s actually been quite encouraging to see applications on the way up to end September / start October and really, with interest rates as low as they are and relatively nice weather, why wouldn’t they be?
I’ve got a few bits of news and analysis for you this week from other sources around the web, consolidated here at good ol’ firstfoundation.ca for your reading pleasure:
- Want a mortgage crystal ball? Watch the bond yields – especially the 5-year. One of our lenders tells us that they’re ...
Read more »Mortgage Blog - Weekly Roundup
September 10, 2009 by Gordon McCallum
Wow! It’s been a busy week in mortgage land. Nice to see things aren’t slowing down too much for the fall period.
I think we’re probably going to see a burst of activity now that the news is out there of an economic rebound in Canada. There are better job numbers, better housing numbers, and better economic numbers all around. Interest rates are nice and low still but are expected to pop up a bit early to mid next year, so the fourth quarter of 2009 might be the perfect opportunity for bargain hunters to buy a ...
Read more »First Time Buyers Benefit
January 28, 2009 by Gordon McCallum
I did a little more digging this morning on the details of the federal budget which was announced yesterday…and I found some more good news for those thinking about buying their first home. Here are the details:
- First time home buyers will qualify for a 15% tax credit, up to $750 worth of savings, on closing costs of up to $5,000. I would assume that legal fees and moving costs are the primary areas where people will save.
* First time buyers will also see the “Home Buyer’s Plan” limit go from $20,000 to $25,000. The ...
Government Guaranteed Mortgages and the New Rules
July 31, 2008 by Shayla Damery
As many of you have probably heard by now, the Finance Minister has made some changes to government guaranteed mortgages. But what a lot of Canadians may not know is exactly what changes were made, and why.
What is the government guarantee?
Most people know that mortgage insurance is the premium you must pay if you have a high-ratio (less than 20% down payment) mortgage, so that lenders are able to pay their investors in the event you default. But what happens if a large amount of mortgage borrowers can't make their payments, and they all default? The mortgage ...
Read more »MCAP Introduces New Product FlexStar
October 25, 2007 by Shayla Damery
On October 1, 2007, MCAP introduced a new mortgage product called FlexStar. FlexStar is a re-advanceable mortgage whose rate is variable and floats according to the prime lending rate. With FlexStar, you can make minimum payments of interest-only for 10 or 25 years, and you can repay up to 50% of the principal amount in the first five years. After five years, the FlexStar product is completely open (meaning that you can pay off as much as you want, when you want).
FlexStar allows you to re-draw funds from your mortgage that you have already paid off, up to the ...
Read more »The American Sub-prime Mortgage Market...and Canada
September 20, 2007 by Shayla Damery
Sub-prime mortgages are mortgages for those people who don't normally qualify for the lowest interest rates or the best mortgage products based on their tarnished or poor credit histories. They can, however, still qualify for a mortgage, but will end up paying higher interest rates and/or fees.
Recently, there has been a bit of a meltdown in the United States in the sub-prime mortgage market (or the alternative mortgage market, as we know it in Canada). Sub-prime borrowers have started defaulting on their mortgages en masse in recent months due to rising interest rates, extensive use of adjustable ...
Read more »
Follow Us!