120 Day Rate Hold Change

My Langley and BC Best mortgage package includes a rate hold certificate program that has  changed effective April 30th. With many client’s having their rate hold certificates expiring on June 8th, to secure the 3.34% rate for the 5 year fixed term before it went up the next day, the new policy will apply going forward.

You can still secure a great rate up to 120 days, however, the Rate Hold certificate is valid for 30 days only, instead of the full 120 days.

Here is how this will work; The Rate Hold must be converted into a Real Deal within 30 days of securing your Rate Hold certificate in order for it to be valid for a full 120 days.

This means that we have up to 30 days to submit an application (with full documentation provided) for a live deal or a pre-approval. This gives us lots of time to discuss your mortgage options and consult on your mortgage plan and strategy. If an application is not submitted, then on the 31st day the certificate will be expired.

As we head into the Fall market, the Bank of Canada might start raising rates (see Benjamin Tal’s latest Economic Buzz), so this easy process is important to keep in mind. It just means picking up the phone (604.882.3643) and letting me know the approximate mortgage amount to secure for your 30 day rate hold certificate. The simple application process, and providing me with your documentation, will allow me to take it from there.

Renewing Your Mortgage? Be A Hero

The TD Canada Trust reports that 2012 is a record year for mortgage renewals. Sadly, the majority of Canadians will just go to their bank and renew their mortgage without doing very much research, or getting help from an independent mortgage adviser. How many of you just sign the renewal form for another five years because it’s familiar, comfortable and easy?

In cases where clients start to ask a couple of questions, a common response is that they would have restart the whole process all over again and be subject to legal, appraisal, and discharge fees. That is usually enough dissuade a good portion of timid inquiries.

Read Rob Carrick’s article below from April 4^th, 2012, Globe and Mail. It offers some interesting facts and a number of issues I regularly cover with my all my clients.

Rob Carrick
From Thursday’s Globe and Mail
Published Wednesday, Apr. 04, 2012 5:21PM EDT

Let’s see whether the many people who bought a house in 2007 show the appropriate killer instinct when renewing their mortgages this year.

Surveys indicate that about one-third of mortgage holders are actively trying to terminate their mortgages early by making extra payments. But we need to do more now, before the economy rallies and rising interest rates start making it more expensive to finance the cost of a home.

This is where the people who bought five years ago come in. Those who opted for a five-year fixed-rate mortgage will have to renew at some point this year, which means they face a choice. They can either let today’s vastly lower mortgage rates reduce their monthly payments, or leave their payments where they are and use the differential to accelerate the pay down.

Long-time mortgage broker Vince Gaetano of MonsterMortgage.ca has been urging his renewal clients to go with the second option. “The story we try to present to the client is: ‘How soon do you not want to have a payment any more?’ ”

To make his case, Mr. Gaetano lined up some facts and figures on the mortgage market for 2007 and now. Five years ago, the global financial crisis had yet to flare up and Canada’s housing market was reporting what were then record sales.

A majority of buyers were going with five-year fixed mortgages, for a couple of reasons. First, discounted variable-rate mortgages were going for close to the same rate as a discounted five-year mortgage with a fixed rate. Second, it was widely thought that interest rates were headed higher.

As a result, Mr. Gaetano said, about 70 per cent of buyers were going with five-year fixed rate mortgages.

He recalls that, in June of 2007, a well-discounted five-year mortgage went for 5.79 per cent. Today, the very best rate for a five-year mortgage is 3.29 per cent.

Let’s say you started with a $300,000 mortgage in 2007. Mr. Gaetano said that if you chose a 30-year amortization, your monthly payments would have been $1,745 and your balance on renewal would be $278,184. If you moved into a new five-year fixed rate mortgage at 3.29 per cent, your monthly payments would be $1,358, which would save you a very significant $387 a month.

Mr. Gaetano’s numbers show that if you pocketed that money and went with lower payments, your mortgage balance on renewal five years from now would be $239,087. If you kept your payments level, thereby paying down an extra $387 a month against your principal, the balance on renewal would be $213,914. The lower your mortgage amount on renewal, the quicker the loan will be paid off and the less interest you’ll pay.

High personal debt loads in Canada have caused concern at the Bank of Canada, the Department of Finance and, outside the country, the International Monetary Fund and the Organization for Economic Co-operation and Development. It would be a clear sign that Canadians are getting the message on debt if they used all available opportunities to pay their mortgages down quicker.

The actual experience in this area is encouraging. The 2012 RBC Home Ownership Poll indicates that 14 per cent of Canadians made double-up mortgage payments (your regular payment plus an additional amount equalling as much as one extra payment), 13 per cent made one-time lump-sum payments and 7 per cent applied a bonus, gift or inheritance against their mortgage balance. A mortgage market survey released by the Canadian Association of Accredited Mortgage Professionals last November suggested that 36 per cent of mortgage holders are making voluntary additional payments.

“You are seeing a significant minority who value [mortgage prepayment] features and are taking advantage of it,” said Jim Murphy, CAAMP president.

The CAAMP survey also found that in cases where people were renewing their mortgages at a lower rate, 24 per cent voluntarily increased their payments. We could do better than that, especially among the people renewing mortgages they arranged in 2007.

These people presumably have seen their pay rise somewhat, and they’ve learned how to juggle the cost of running a house along with other expenses. Most importantly, they’re fortunate to have got into the market before the price runups of the past few years.

No one’s in a better position to show the killer instinct about mortgages than the class of 2005. Don’t let us down at mortgage renewal time, guys.

________

How often do mortgage holders make extra payments so their mortgages will be paid off ahead of schedule? Here are some answers from a survey done for the Canadian Association of Accredited Mortgage Professionals. The stats suggest more people in recent years have been trying to pay off their mortgages early.

Time period	Increased payment	Made lump-sum payment	Increased payment frequency	One or more additional efforts
2000-05	13%	15%	3%	31%
2006-11	16%	19%	6%	37%

Source: CAAMP Annual State of the Residential Mortgage Market survey, November, 2011

Property Buyers and Owners – Know Your Grants and Rebate Benefits!

One thing is constant – change! For property buyers and owners you cannot count on knowing everything based on purchases you made a few years ago. The government, lenders, and other resources such as utility companies, are always coming up with something new.

Here is a fabulous breakdown of current grants and rebates to make sure you are taking every advantage of possible money-saving opportunity.

top-28-grants-and-rebates-for-property-buyers-and-owners

What To Do With Market Commentary

For those of you following the financial and economic market reports to find ways of protecting you and your family, there can be a confusing mess of contradictions. Consumers trying to decide what action to take regarding their mortgage financing have a lot of polar opinions to sift through meant to sway you one way or the other. They leave you with more questions than answers. Is it time to refinance early to take advantage of the low rate environment? Should you convert your variable term into a fixed rate option? Should you take the shorter fixed term at below 3%, or should you rush to the safety of the historic low rate offered on a ten year fixed term instead?

Almost daily I receive housing reports, market commentary, interest rate predictions, reports on how global markets will change the Canadian economy, or any number of expert opinions or factual evidence to sway consumers to a particular action. Below I’ve attached a Market Commentary.  After reading it, go listen to tonight’s 6:00 news report covering the Canadian market. (that often raises even more questions).

There is one thing that I am certain of for every one of my clients. In this market where I can set you up with a three-year fixed mortgage term at 2.99%, a ten-year fixed term at 3.89%, or any one of over 323 different mortgage packages, there is no single answer (or single lender) that fits everyone. Bankers spend a lot of advertising dollars to convince us that they are comfortable, easy, even that you are the master over your mortgage, but read the fine print first!

In my professional practice, after carefully analyzing my client’s situation, solutions for the best mortgage are often with a lender clients have never used before, or are completely different from what they initially thought they wanted. The most important step for every mortgage consumer, even before discussing interest rates, is to do a full consultation with an independent mortgage expert. While interest rates are very important, it should not be the only measure you use to decide the term or mortgage product you sign up for. Nor should you base your decision solely on the marketing hype, advertising, or self-interest groups. Be sure your financial research does not cause you to make costly mistakes!

First National Financial Market Commentary May 15, 2012

Canada Mortgage and Housing Corporation’s latest numbers for home starts have pumped a lot more air into talk of a bubble in the country’s housing sector. Starts made a surprising 14% jump in April driven by a 27.4% leap in multiple-unit construction – read condos – in Montreal, Vancouver and, especially, Toronto.

CMHC argues overheated local markets do not a, national bubble, make. The agency points out, most of April’s 158.5k multi-unit starts, the second highest monthly reading on record, were the result of pre-sales. Says CMHC, “We are monitoring it but we don’t see any problem at the moment.

Of course, the builders will tell you there’s no problem either. The Builders’ Association of Toronto backs up CMHC saying, the spike in starts represents construction on sales that were made in 2010 and 2011. Besides, the builders point to demographics saying there are plenty of empty-nesters, immigrants and young singles/couples to soak up the vacancies.

10 Year Mortgage Rates – Record Low! 3.89% Best Rate!

Best 10-YEAR Mortgage Rates are here now! You may have listened to CBC Money Matters with Peter Mansbridge on May 1, 2012 about the incredible low 10 year mortgage rates at 3.99%.  VERICO ZANDERS & Associates Mortgage Brokers is able to offer a fantastic 10 year mortgage at a historic low rate at 3.89%. It is one of the best 10-year mortgages on the market.

This is incredibly low! Consider the fact that just 2 years ago the 5-year mortgage rates were in the range of 5%, and that the Bank of Canada reports that the nominal rate for 5 year fixed term is approximately 5.5 to 6%.  That makes this current 10-year mortgage term a very appealing option for those people with mortgage terms expiring anywhere in the next 1 to 6 months, for those refinancing early to secure this superior long-rate, or for those needing a mortgage for a new home purchase.

Get the peace of mind and security of knowing what your payments and rate will be for the next 10 years. Just think how you could plan for a whole decade instead of just 5 years or less!

However, don’t be fooled into thinking that locking in for 10 years is just too restrictive. Should you decide to sell during your 10-year term, you can just port the remaining outstanding principle, at the 3.89% interest rate to another qualifying property, anywhere in Canada!

If you don’t need a mortgage after you sell your home, then you have can offer buyers the option to assume your remaining mortgage. Just think about the sales advantage that would be! If the buyers need more money they can simply blend the outstanding balance at 3.89% with the new money they need at the current rate. This is a great selling feature, especially as interest rates begin to rise later this year or in 2013, as the Bank of Canada announced on April 17th!

So keep it or leave it for the new owners, either way it’s a win-win for you!

This mortgage has great prepayment privileges as well. So when you have that lump sum of money, you can put up to 25% of the original principal amount down on the mortgage. Maybe you only want to put on $100 at a time, or maybe apply your tax refund cheque to the mortgage principle. That is ok too.  Just make a payment on any payment date with the easy on-line access. It couldn’t be easier to pay your mortgage off sooner and save thousands of dollars in interest. You can even increase your regular monthly mortgage payments by up to 25% as well! Do one, or both, whenever you want.

The after-service with this mortgage is top-notch too! You can phone in and actually speak to a real person! If you prefer to do some changes in the middle of the night, the customer service access line is available 24/7. You can access your mortgage anytime online. It has the most features of any mortgage we know that you can change or view online!

Need a personalized payment plan to pay your mortgage off earlier? That service is available free to all my clients, and includes mortgage planning and mortgage management services. I’ll even send you an alert to remind you to increase your payments, or structure a schedule plan to fit your budget and financial goals!

Should you decide that you would like to break the mortgage, the penalty is no greater than on a 5-year mortgage. This mortgage has one of the lowest penalties for breaking it early, with nothing hidden and no surprise administration fees! This will save you a lot of money if you need to break the term. Your mortgage document is written in plain English, with everything you need to know in readable print.

Do not listen to media hype – not all mortgages are created equal. This one really is one of the best mortgages available! We know, because we have access to over 53 lenders with a wide variety of mortgage financing products.

Call today (604-882-3643) or apply online. Don’t wait! We don’t know how long this fabulous 10-year rate will be here! If you need help weighing your options or crunching the numbers, I would be happy to help with that. My goal is to always find the best mortgage products that are right for you – not what is best for your bank! So don’t sit and wonder, let’s run the numbers, so your decision easy and you can start saving money with your new mortgage financial plan.

This mortgage is available throughout BC from Vancouver Island to Golden, including Victoria, Vancouver, Surrey, Langley, Abbotsford, the Lower Mainland, the Fraser Valley, and the BC Interior; all the way to Whitehorse through to Dawson City in the Yukon! Right across Canada, from BC to Newfoundland and Nova Scotia and everywhere in between. If you are relocated anywhere in Canada – you can port this mortgage with you!

Verico Zanders & Associates are BC and Yukon Mortgage Brokers, we’ve been in the business since 1998! OAC, & E&O. Subject to change without any notice!

Residential Market Update

With historic low interest rates being enjoyed by all, the market watches each Bank of Canada announcement for clues to when the inevitable will happen. Rising interest rates are not “if” it will happen, but “when.”

Although some pundits believe that we will still see rates low for another two years or more, some consumers are securing incredible 10-year mortgage rates to hedge against the possible landslide when rising rates hits. Remembering that many people are securing interest rates in the 3 to 4 percent range right now, a renewal to a nominal 5-year rates at approximately 5.5% or more, at the end of your current mortgage term, can make a significant dent in your family budgets This will be especially hard on first time home buyers. Longer term mortgage planning is definitely an important issue to address with your mortgage broker and should part of everyone’s agenda!

The April 17th announcement tolled the bell that increases are definitely on the Bank of Canada’s mind, and they forewarned the possibility of increases this year. With the state of Europe and the USA being part of the equation on what Canada will do next, here is the latest Market Commentary from one of my lenders:

“The Bank of Canada has made it clear it intends to run its own course when it comes to interest rates. Its latest policy announcement all but stated it is looking to start making increases by the end of this year. Interestingly, the national average price for a home slipped a 0.5% even before last week’s policy statement and the decision to stand pat on interest rates.

A number of factors stand between the Central Bank and its willingness to raise rates: weaker than expected job numbers in the U.S., lower than expected inflation in Canada and simmering concerns about Eurozone debt.

Off the radar for the past several weeks, Europe is returning as an ominous blip. People simply aren’t prepared to accept the austerity measures they’re told are necessary. In Spain debt continues to get more expensive. If a Greek-style bailout becomes necessary it would clean-out the E.U.’s rescue fund. In France the anti-austerity Socialist candidate has won the first round in the presidential election. And in the Netherlands the prime minister has resigned over his inability to win support for an austerity budget.”

(this update is provided by First National Financial, one of over 50 lenders we can source for our clients)

I’ll be updating this blog with several other good sources of information regarding rates and the current market conditions. We have several mortgage specials that are available for a limited time. If you have any questions about an upcoming renewal, refinancing or renewing early, or considering a new purchase, be sure to speak to a qualified mortgage broker who can assist you with a long term plan.  All mortgages are not equal and simply renewing for another 5 year term as the majority of bank clients do, might not be in your best interest.

 

First Time Home Buyers Tax Credit & More!

Tax time means reporting every possible tax credit so you can save money!

Direct from Canada Revenue Agency website, here is the ruling regarding Line 369, Home Buyer’s amount:

You can claim an amount of $5,000 for the purchase of a qualifying home made in 2011, if both of the following apply:

• You or your spouse or common-law partner acquired a qualifying home.
• You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).  Watch the video at this site

For more information on Children’s arts tax credit, children’s fitness tax credit, public transit tax credit, pension income splitting and more, see the CRA website.