Mortgage – Bank of Canada Increases Rate

Bank of Canada has raised the key lending overnight rate by 0.25%.  The new rate of 0.75% is still low even though it has gone up by 0.50% in the last two months. Bank of Canada is also forecasting a “more gradual” economic growth in Canada over the next two years. The rate increases helps keep inflation in check.

Increase in mortgage rates usually follow shortly after any decisions by Bank of Canada therefore major Canadian banks will probably announce rate changes shortly.

Read the entire story @:

Bank of Canada – Press Release

Globe and Mail

National Post

The Star

Happy Home Hunting…

BMO Lowers Mortgage Rates

Should there be a negative or positive push on the interest rates with the following two news items?

1. Canadian job market has record growth in June?

2. New home starts have dropped in June?

Well, BMO is lowering rates on some of its mortgage products with 5 year fixed rate dropping from 4.15% to 3.99%. Other banks usually follow suit so more announcements should come shortly.

Read all the details below:

BMO News Release

Globe and Mail: Canada adds 93,000 jobs in June

National Post: Unemployment rate falls to surprise 7.9%

The Star: TSX, loonie rise amid jobs data

Happy Home Hunting…

Mortgage Fraud – Co-sign With Caution

Thinking of helping that person secure a mortgage for a home? Think twice….or thrice…or more.

Becoming a co-signer on a mortgage could be a real headache (read FRAUD) and it could come back to haunt you legally, financially, and mentally.  Your trust (or in some cases…greed) could lead to great damage to your reputation and bank balance.

To illustrate the point, here is an article written in The Star by James Daw:

Daw: Woman stung by mortgage fraud sold her signature

Happy Home Hunting!!!

Bank of Canada Raises Interest Rate

Stimulus ends here…

Bank of Canada leads G7 in hiking the key interest rate…The increase of 25 basis points is the first since July 2007… Banks should follow suit shortly and raise their lending rates…

Canadian economy is booming…housing activity is slower but still very solid…then there is the market uncertainty, specially the Euro zone crisis…

Read the full details at:

National Post

The Globe and Mail

Toronto Star

Happy Home Hunting….

Hybrid or Combination Mortgage Option

There are several types of mortgage options in the market such as fixed, variable, open, close etc.  Many Buyers stick with variable mortgage while the rates are low and then lock in for fixed rates once the rates start moving up.

Combination of variable and fixed mortgage offers the flexibility of enjoying lower rates along with a safety net against rate increases.  This hybrid option continues to be a very popular amongst Buyers.

Read Chaya Cooperberg’s article in The Globe and Mail

Happy Home Hunting…

Vendor Take Back Mortgage

Vendor (seller) Take Back (VTB) is a viable option when financing a property…Many Buyers (or even Sellers) are not aware of this option but many savvy Sellers use it as an attractive marketing tool to sell their property…

VTB is more common in commercial than residential real estate.  In residential market, VTB can certainly help Buyers who have difficulty obtaining a bank mortgage due to credit concerns or rates…

Read Andrew Allentuck’s article on VTB in The National Post

Happy Home Hunting…

Mortgage Corner – Benefits Of Higher Rates

Mortgage rates moving up

Mortgage interest rate moving higher is certainly a worry for the home buyers…higher costs erode affordability which is further compounded by the present uncertainty in the job market…

Not all is grim news though…higher rates can lead to some benefits such as less bidding wars in the housing market and better representation of true market value of a home…

John Heinzl has written a good article focusing on some of the benefits associated with the higher interest rates.  Read the entire article at The Globe and Mail

Happy Home Hunting…