The Bank of Canada is expected by many economists to raise short-term interest rates in June or July, prompting many homebuyers and mortgage holders to ask whether a variable-rate mortgage or a fixed-rate mortgage is best for them.
How, exactly, are mortgage rates offered by lenders determined? Many Canadian mortgage holders are surprised to learn that the pricing for variable-rate and fixed-rate mortgages are determined by two different means.
First, let’s look at the pricing of variable-rate or “floating rate” mortgages. The rate for these mortgages is tied directly to the Prime rate, which is set by the Bank of Canada, usually through regularly scheduled announcements. A competitive variable rate mortgage is now commonly available at Prime (now at 2.25%*) minus 0.40%*, or even lower in some cases. “Those with variable rate mortgages need to keep an eye on the Prime rate,” asserts Justin Christie, mortgage broker with Mortgage Intelligence.
Pricing for fixed rate mortgages follows a separate dynamic, and is a bit more complex. Fixed-rate mortgages are priced in relation to the bond markets, as bonds are the main competing investment to mortgages for investors. Mortgages are priced higher than bonds, usually between about 1.20% and 1.90%, to account for higher risk of default and administration costs incurred by investors who hold mortgages as opposed to relatively hassle-free bonds.
The most popular type of mortgage in Canada is currently the five year fixed-rate mortgage. Discounted rates for this type of mortgage (available through a mortgage broker) have been trending upwards in recent weeks and currently stand at about 4.64%* or even lower in some cases.
“With rates for both variable and fixed mortgages relatively low, consumers must decide based on their own preferences and unique circumstances,” says Christie, “A mortgage broker can help consumers evaluate their mortgage options and make an optimal choice.”
Justin Christie, AMP
FSCO Agent Lic. M08001295
Mortgage Intelligence
FSCO Lic. 10428
The SunCoast Team
Voice: 866-544-4001
Fax: 866-869-1365
Web: www.suncoast.ca
HO:5770 Hurontario Street, Suite 600
Mississauga, ON, L5R 3G5
*Rates/product subject to purchaser/property qualification and change without notice. E&OE. OAC.
Friday, April 23, 2010
Thursday, April 1, 2010
Mortgage Market Changes
Effective in April – make sure you’re in the know
Home buyers and real estate investors need to keep up with some upcoming changes to mortgage rules that could affect their purchase, if they are applying for a mortgage with a down payment of less than 20% of the value of the property.
Qualifying for a Mortgage
Borrowers applying for a variable-rate mortgage or a fixed-rate mortgage with a term of less than 5 years must qualify based on the Bank of Canada’s five-year fixed posted mortgage rate.
Rental Properties
A minimum down payment of 20% will be needed for government-backed mortgage insurance on non-owner-occupied properties such as rental properties. There are also changes in how much of rental income can be used when qualifying for financing.
Self Employed?
Make sure you contact us about how to show proof of income to lenders, and access mortgage products tailored for your needs.
Call Us
for the Information You Need to Know
For full details on the changes, and personalized advice on the mortgage that fits your needs, contact us for a free, no-obligation consultation.
Effective in April – make sure you’re in the know
Home buyers and real estate investors need to keep up with some upcoming changes to mortgage rules that could affect their purchase, if they are applying for a mortgage with a down payment of less than 20% of the value of the property.
Qualifying for a Mortgage
Borrowers applying for a variable-rate mortgage or a fixed-rate mortgage with a term of less than 5 years must qualify based on the Bank of Canada’s five-year fixed posted mortgage rate.
Rental Properties
A minimum down payment of 20% will be needed for government-backed mortgage insurance on non-owner-occupied properties such as rental properties. There are also changes in how much of rental income can be used when qualifying for financing.
Self Employed?
Make sure you contact us about how to show proof of income to lenders, and access mortgage products tailored for your needs.
Call Us
for the Information You Need to Know
For full details on the changes, and personalized advice on the mortgage that fits your needs, contact us for a free, no-obligation consultation.
Monday, February 1, 2010
Choosing the right home for you - Some important questions to ask
Before you start shopping, know what you’re looking for in
a home. Consider what you want now, and what you might
want in the future.
SIZE REQUIREMENTS: Do you need several bedrooms, more than one bathroom,
or a garage?
SPECIAL FEATURES: Do you want air conditioning, storage or hobby space, a fireplace or a swimming pool? Do you have family members with special needs?
LIFESTYLES AND STAGES: Do you plan to have children? Do you have teenagers who will be moving away soon? Are you close to retirement?
SETTING: Do you want to live in a city, the suburbs or a rural environment?
WORK: Are you willing to take on a long commute every morning?
SCHOOL: Where will your children go to school and how will they get there?
FAMILY AND FRIENDS: How important is it to live close to them?
Wednesday, January 27, 2010
Is a recreation property right for you?
Whether it’s called a cottage, a chalet or a country
house, the lure of a recreation property far from the
hustle of the city, is too much for many of us to resist.
As Baby Boomers get ready to retire, they’re
driving up interest in these properties – especially
with the attractive financing options available for
second homes. If a recreation property is on your
radar, below are some important questions to ask
yourself before you make the leap.
How would a recreation property impact
my lifestyle?
Consider how a recreation property would fit into
the lifestyle you envision for you and your family –
both the benefits and the drawbacks. In addition to
the fun and leisure aspects of a recreation property,
you’ll also need to factor in the time and cost
involved in year-round property upkeep.
Can I afford the purchase price and/or
a mortgage?
You want to ensure you can afford not only the
purchase price or mortgage, but also the ongoing
– and often unexpected – expenses that are an
inevitable part of home ownership. Work with a
mortgage professional to fully assess your recreation
property ownership options. Many mortgage
professionals and lenders offer specialized
services and mortgage products, specifically
for second homes.
How far am I prepared to travel?
Peace and quiet often come with a price: distance.
Be realistic about the time you are willing to commit
to travel – to and from your recreation property.
You may even want to take ‘test drives’ on busy
weekends to determine travel times during peak
season.
Who should I call?
As you would with a primary property, call a
professional real estate agent who knows the
region where you would like to buy and work
with your mortgage professional to secure
financing to determine what you can afford –
before you begin.
For more information contact us at 866-544-4001!
More Canadians purchasing second homes
More Canadians than ever are purchasing second homes.
No longer just for the wealthy, second home ownership has
gone mainstream. For many Canadians, it’s the dream of a
summer cottage, golf retreat or a winter chalet. For others,
career or family demands fuel the desire for a second home:
for business stays or to shelter the university student studying
in a distant community.
When Canada Mortgage and Housing Corporation (CMHC)
introduced a Second Home Program – helping Canadians
borrow up to 95% of the home’s value – the purchase of a
second home is easier than ever. And, the attraction of this
real estate investment is just as compelling with your second
home, as it is with your first. Not only can it be a good financial
investment, but it’s an important emotional investment too.
Below are some questions to keep in mind when you finance
a second home.
Can you afford it? This is the most important question you
have to ask yourself. If you are planning to purchase a
second home, you’ll want the best possible financing for your
new real estate investment. There’s no question that financing
is easier than ever. But a mortgage professional can help you
figure out exactly how much second home you can comfortably
afford. It’s a great time to begin that conversation – and
mortgage interest rates are still at a near all-time historical low.
What are your financing options? The CMHC Second
Home Program has been a big breakthrough for Canadian
second-home buyers. CMHC will insure a property purchased
for a family member attending college or university away
from home. And the program is very popular as a means of
purchasing a vacation property. There are a few provisons
here: either the borrower must occupy the property for at
least some part of the year or a family member must occupy
the property on a rent-free basis. The property must be
winterized and be accessible for year-round occupancy.
And, it must be located in Canada. Be careful with island
properties; they should have year-round bridge or ferry
access. Note, too, the Second Home Program can’t be
used to purchase time-shares or similar rental pools.
What do the mortgages look like? By far, your best bet
is to talk to a mortgage professional with access to a wide
range of lenders. The mortgages for second homes can
vary widely in the rates and requirements.
Can I leverage my existing equity in my primary home?
This is an option that your mortgage professional can help
you look at. This involves a cash-out refinancing of your existing
primary home mortgage, with a higher borrowed amount.
Instead of waiting and saving years for a second home, you
can access money based on the value of your primary
residence and your present financial profile to help you
finance a second property.
A second mortgage for a second home? Is this the right
option for you? A second mortgage is the most common way
to use your home equity. No need to wait until you’ve saved
a down payment for a second home investment, but you must
have the funds and cash flow to comfortably make both mortgage
payments. Your mortgage professional will work out
the best terms for you.
It’s your second home. This means that it’s primarily for
your own or your family’s use (although you may rent it out
casually and temporarily). If you’re looking to purchase an
investment property, your mortgage professional can help with
that too… but it’s not the same as purchasing a second home.
If there’s a family cottage in your dreams or a student condo
in your plans, this is the time to get serious about a mortgage
plan to make it happen. Speak with me today to check out
your options.
No longer just for the wealthy, second home ownership has
gone mainstream. For many Canadians, it’s the dream of a
summer cottage, golf retreat or a winter chalet. For others,
career or family demands fuel the desire for a second home:
for business stays or to shelter the university student studying
in a distant community.
When Canada Mortgage and Housing Corporation (CMHC)
introduced a Second Home Program – helping Canadians
borrow up to 95% of the home’s value – the purchase of a
second home is easier than ever. And, the attraction of this
real estate investment is just as compelling with your second
home, as it is with your first. Not only can it be a good financial
investment, but it’s an important emotional investment too.
Below are some questions to keep in mind when you finance
a second home.
Can you afford it? This is the most important question you
have to ask yourself. If you are planning to purchase a
second home, you’ll want the best possible financing for your
new real estate investment. There’s no question that financing
is easier than ever. But a mortgage professional can help you
figure out exactly how much second home you can comfortably
afford. It’s a great time to begin that conversation – and
mortgage interest rates are still at a near all-time historical low.
What are your financing options? The CMHC Second
Home Program has been a big breakthrough for Canadian
second-home buyers. CMHC will insure a property purchased
for a family member attending college or university away
from home. And the program is very popular as a means of
purchasing a vacation property. There are a few provisons
here: either the borrower must occupy the property for at
least some part of the year or a family member must occupy
the property on a rent-free basis. The property must be
winterized and be accessible for year-round occupancy.
And, it must be located in Canada. Be careful with island
properties; they should have year-round bridge or ferry
access. Note, too, the Second Home Program can’t be
used to purchase time-shares or similar rental pools.
What do the mortgages look like? By far, your best bet
is to talk to a mortgage professional with access to a wide
range of lenders. The mortgages for second homes can
vary widely in the rates and requirements.
Can I leverage my existing equity in my primary home?
This is an option that your mortgage professional can help
you look at. This involves a cash-out refinancing of your existing
primary home mortgage, with a higher borrowed amount.
Instead of waiting and saving years for a second home, you
can access money based on the value of your primary
residence and your present financial profile to help you
finance a second property.
A second mortgage for a second home? Is this the right
option for you? A second mortgage is the most common way
to use your home equity. No need to wait until you’ve saved
a down payment for a second home investment, but you must
have the funds and cash flow to comfortably make both mortgage
payments. Your mortgage professional will work out
the best terms for you.
It’s your second home. This means that it’s primarily for
your own or your family’s use (although you may rent it out
casually and temporarily). If you’re looking to purchase an
investment property, your mortgage professional can help with
that too… but it’s not the same as purchasing a second home.
If there’s a family cottage in your dreams or a student condo
in your plans, this is the time to get serious about a mortgage
plan to make it happen. Speak with me today to check out
your options.
Moving with Pets
Cat-fits in the car, guinea pigs escaped at the diner, the snake that
was left behind, and the dog that bit the moving man… you could
fill a book with tales of the trials of moving with pets. It doesn’t
have to be that way, if you do some planning and follow good
common sense.
Firstly, remember that your pet is also a member of the family,
and deserves some consideration in the moving plans. Your pet
will also be leaving familiar surroundings and you’ll have some
trouble helping your pet understand what’s happening and why.
Your goal will be to get your pet out of your present home and
into your new home as securely and smoothly as possible. Think
about your pet’s temperament and special needs and put together
a plan to help your pet make the transition.
1. Plan for your pet’s trip to the new home. Most pets will
make the move in a car with the rest of the family. In the event
that you’re traveling by air, you’ll need to make arrangements
for your pet several weeks in advance. If necessary, get your
pet used to a carrier.
2. Make a moving day plan for your pet. Ideally, on moving
day your pet should stay elsewhere, preferably in a familiar place:
a favourite kennel service or at a kind friend or relative’s home.
With all the comings and goings at your house – strange people
and vehicles and constantly open doors – there are just too many
chances for your pet to have a meltdown or meet with an accident.
Stressed pets and movers don’t mix well. If your pet must be in the
house, find an empty room with the least commotion and put your
pet there. Put a sign on the door to clearly indicate that the room is
not to be entered. Ensure that your pet has comfortable surroundings,
enough fresh water and some familiar toys.
3. Try to keep a calm environment. Your pet will be picking
up on the family’s signals in the weeks before and after the move.
If you’re experiencing stress, your pet will be tuning into the
change. No matter how crazy life gets, try to maintain – as
closely as possible – your pet’s feeding, watering, play, and exercise
routines. Keep their familiar foods, toys, and bedding accessible.
After all, there is upheaval enough in their surroundings now!
4. Think about your pet’s own personality. Cats are far more
territorial than dogs. Cats need to feel that they are in control of a
changing environment, whereas dogs are far more attached to
their owner than they are to the actual house. So make sure your
cat always has a nook or cranny or box to hide in or under at –
both ends of the move.
5. Make sure your pet is wearing identification. Also, take a
picture of your pet and jot down a written description. Pets can be
unpredictable when their home life is upset. There is a higher risk
of your pet escaping in the weeks before and after the move.
6. Prepare your pet for travel. When travelling by car with
your pet, remember to restrict its food intake several hours ahead
of the trip and during the trip too. Animals should be in a carrier
unless you are absolutely sure that they will not get under a brake
pedal or cause a dangerous commotion. Most cats will sleep
away their long trip. Your dog will be much happier if it has been
well exercised before the trip. Use a tranquilizer for your pet as a
very last resort and then only with your veter inarian’s instructions.
7. Pack a travel kit for your pet. Be sure that the food is easy to
digest and use water from your regular home supply; changing diet
or water sources are common causes of diarrhea and vomiting
from upset stomachs. If in doubt, check with your veterinarian for
food recommendations. Don’t forget extra food for your arrival
(can opener too!), medications and vet records, familiar toys, new
identification tags, and something with a reassuring scent.
was left behind, and the dog that bit the moving man… you could
fill a book with tales of the trials of moving with pets. It doesn’t
have to be that way, if you do some planning and follow good
common sense.
Firstly, remember that your pet is also a member of the family,
and deserves some consideration in the moving plans. Your pet
will also be leaving familiar surroundings and you’ll have some
trouble helping your pet understand what’s happening and why.
Your goal will be to get your pet out of your present home and
into your new home as securely and smoothly as possible. Think
about your pet’s temperament and special needs and put together
a plan to help your pet make the transition.
1. Plan for your pet’s trip to the new home. Most pets will
make the move in a car with the rest of the family. In the event
that you’re traveling by air, you’ll need to make arrangements
for your pet several weeks in advance. If necessary, get your
pet used to a carrier.
2. Make a moving day plan for your pet. Ideally, on moving
day your pet should stay elsewhere, preferably in a familiar place:
a favourite kennel service or at a kind friend or relative’s home.
With all the comings and goings at your house – strange people
and vehicles and constantly open doors – there are just too many
chances for your pet to have a meltdown or meet with an accident.
Stressed pets and movers don’t mix well. If your pet must be in the
house, find an empty room with the least commotion and put your
pet there. Put a sign on the door to clearly indicate that the room is
not to be entered. Ensure that your pet has comfortable surroundings,
enough fresh water and some familiar toys.
3. Try to keep a calm environment. Your pet will be picking
up on the family’s signals in the weeks before and after the move.
If you’re experiencing stress, your pet will be tuning into the
change. No matter how crazy life gets, try to maintain – as
closely as possible – your pet’s feeding, watering, play, and exercise
routines. Keep their familiar foods, toys, and bedding accessible.
After all, there is upheaval enough in their surroundings now!
4. Think about your pet’s own personality. Cats are far more
territorial than dogs. Cats need to feel that they are in control of a
changing environment, whereas dogs are far more attached to
their owner than they are to the actual house. So make sure your
cat always has a nook or cranny or box to hide in or under at –
both ends of the move.
5. Make sure your pet is wearing identification. Also, take a
picture of your pet and jot down a written description. Pets can be
unpredictable when their home life is upset. There is a higher risk
of your pet escaping in the weeks before and after the move.
6. Prepare your pet for travel. When travelling by car with
your pet, remember to restrict its food intake several hours ahead
of the trip and during the trip too. Animals should be in a carrier
unless you are absolutely sure that they will not get under a brake
pedal or cause a dangerous commotion. Most cats will sleep
away their long trip. Your dog will be much happier if it has been
well exercised before the trip. Use a tranquilizer for your pet as a
very last resort and then only with your veter inarian’s instructions.
7. Pack a travel kit for your pet. Be sure that the food is easy to
digest and use water from your regular home supply; changing diet
or water sources are common causes of diarrhea and vomiting
from upset stomachs. If in doubt, check with your veterinarian for
food recommendations. Don’t forget extra food for your arrival
(can opener too!), medications and vet records, familiar toys, new
identification tags, and something with a reassuring scent.
Stay organized with a moving checklist!
The key to a smooth move is to stay organized. While you can
still find a pen and clipboard, get started on a moving checklist
of necessary tasks.
TWO MONTHS BEFORE YOU MOVE
- Book a mover. You’ll need to decide if you want to pack
and/or unpack yourself. If you do choose to do the packing,
ask about insurance on any breakage. In general, the
movers will only insure what they have packed.
ONE MONTH BEFORE YOU MOVE
- Get rid of it. Resolve not to move anything you don’t want
in your new home. To find a good home for old belongings
– quickly and as close as your front step – go to www.freecycle.org.
- Start a file for keeping receipts of any moving expenses. You can deduct these at tax time.
- Visit your local post office and fill out a Canada Post
change of address form.
- Notify Canada Revenue Agency of your address change
via their web site, at www.cra-arc.gc.ca. Also notify your
provincial health plan.
- Think about your medical services. Notify doctor dentist,
and your optometrist of your move. If necessary, get
copies of your records.
- If you are moving out of province, find out about driver’s license,
auto licensing and insurance.
- Contact your children’s schools and have their records
transferred to their new schools.
- Make any special arrangements for moving your pets.
TWO WEEKS BEFORE YOU MOVE
- Notify existing gas, electric, phone, internet and other utility
companies to make necessary arrangements. Make
plans to get these services set up at your new location.
- Gather up all your bills; they’ll contain valuable information
like account numbers and customer service phone
numbers. Keep these in a safe and accessible place.
ONE WEEK BEFORE YOU MOVE
- Get rid of flammables; drain fuel from the lawnmower and
other machinery.
- Pack your valuables. This includes valuable papers – like
passports, insurance papers, property deeds, automobile
ownership, etc. as well as cash and jewellery. Plan to keep
these valuables with you.
- What’s not at home? Remember to pick up any loaned
belongings, as well as anything in storage or at the dry
cleaners.
- Clear out the fridge; use up any perishable foods and limit
any repurchases.
- Pack a box of “first day essentials” and mark “DO NOT
MOVE”. Include toilet paper, flashlights, basic cleaning
supplies, pet food, handi-wipes, snackable food, etc. so
you can settle in quickly.
- Arrange for removal of "installed items" you are taking
with you, like a TV antenna or shelves.
ONE DAY BEFORE YOU MOVE
- Take down curtains and rods, as well as any other wall fixtures
that are coming with you.
- Empty, defrost and clean your refrigerator. Make sure it
has at least 24 hours to air dry.
- Clean and air your stove.
- Plan a self-contained breakfast “picnic” for moving day to
eat at home or on the road.
- Pack toiletries, medications and other necessities.
- Gather up all house keys for the new owner.
MOVING DAY
- Make yourself available to the moving crew, who may
need to inventory each room. Point out any large, antique
or unusual items.
- Double-check that the moving driver has the correct address
and a working telephone number to reach you.
- Before you leave, do a final walk through of every room.
Check all closets and cabinets. Turn off the lights, and
be sure that windows and doors are locked.
Enjoy your new home!
still find a pen and clipboard, get started on a moving checklist
of necessary tasks.
TWO MONTHS BEFORE YOU MOVE
- Book a mover. You’ll need to decide if you want to pack
and/or unpack yourself. If you do choose to do the packing,
ask about insurance on any breakage. In general, the
movers will only insure what they have packed.
ONE MONTH BEFORE YOU MOVE
- Get rid of it. Resolve not to move anything you don’t want
in your new home. To find a good home for old belongings
– quickly and as close as your front step – go to www.freecycle.org.
- Start a file for keeping receipts of any moving expenses. You can deduct these at tax time.
- Visit your local post office and fill out a Canada Post
change of address form.
- Notify Canada Revenue Agency of your address change
via their web site, at www.cra-arc.gc.ca. Also notify your
provincial health plan.
- Think about your medical services. Notify doctor dentist,
and your optometrist of your move. If necessary, get
copies of your records.
- If you are moving out of province, find out about driver’s license,
auto licensing and insurance.
- Contact your children’s schools and have their records
transferred to their new schools.
- Make any special arrangements for moving your pets.
TWO WEEKS BEFORE YOU MOVE
- Notify existing gas, electric, phone, internet and other utility
companies to make necessary arrangements. Make
plans to get these services set up at your new location.
- Gather up all your bills; they’ll contain valuable information
like account numbers and customer service phone
numbers. Keep these in a safe and accessible place.
ONE WEEK BEFORE YOU MOVE
- Get rid of flammables; drain fuel from the lawnmower and
other machinery.
- Pack your valuables. This includes valuable papers – like
passports, insurance papers, property deeds, automobile
ownership, etc. as well as cash and jewellery. Plan to keep
these valuables with you.
- What’s not at home? Remember to pick up any loaned
belongings, as well as anything in storage or at the dry
cleaners.
- Clear out the fridge; use up any perishable foods and limit
any repurchases.
- Pack a box of “first day essentials” and mark “DO NOT
MOVE”. Include toilet paper, flashlights, basic cleaning
supplies, pet food, handi-wipes, snackable food, etc. so
you can settle in quickly.
- Arrange for removal of "installed items" you are taking
with you, like a TV antenna or shelves.
ONE DAY BEFORE YOU MOVE
- Take down curtains and rods, as well as any other wall fixtures
that are coming with you.
- Empty, defrost and clean your refrigerator. Make sure it
has at least 24 hours to air dry.
- Clean and air your stove.
- Plan a self-contained breakfast “picnic” for moving day to
eat at home or on the road.
- Pack toiletries, medications and other necessities.
- Gather up all house keys for the new owner.
MOVING DAY
- Make yourself available to the moving crew, who may
need to inventory each room. Point out any large, antique
or unusual items.
- Double-check that the moving driver has the correct address
and a working telephone number to reach you.
- Before you leave, do a final walk through of every room.
Check all closets and cabinets. Turn off the lights, and
be sure that windows and doors are locked.
Enjoy your new home!
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