Canada could be facing a mortgage nightmare in the next few years with an estimated 30,000 subprime loans - now dubbed "orphan loans" - coming up for renewal in the next few years, according to a report in the Financial Post.
So concerned about the situation at hand, the industry recently approached the federal government with a request for a bailout - specifically to participate in a $1-billion fund to help finance the coming flood of orphan mortgages. Several alternative mortgage lenders began lobbying the government in the spring 2009 on the same issue but still have not gotten a response.
"This thing is a wave and it's just starting," Eric Putnam, formerly with a subprime lender, now managing director of Debt Coach Canada, told the Post. "Investors are no longer willing to continue on and these mortgages were not insured by the CMHC so the borrowers are not going to be able to move to another lender in today's environment."
Subprime loans have dried up in the wake of the financial crisis. There were at least a dozen sub prime lenders here in Canada and was forecast as the fastest growing sector of the entire mortgage market, Benjamin Tal, senior economist at CIBC World Markets, told the Post - who pegged it at being about five per cent of the total market.
The general term subprime refers to high interest loans made to people who are unable to get a better deal at any one of the big banks.
Mary Wozny
Wednesday, April 14, 2010
Saturday, April 10, 2010
New BFS Mortgage Insurance Rules in Effect
The new CMHC rules for self-employed borrowers took effect Friday and pose new challenges for this category of client.
First off, self-employed borrowers with more than three years in the same business who apply for a mortgage using stated income, as well as commissioned-income borrowers, are now required to provide to provide traditional proof of income (or "third party validation") through documents like financial statements, contracts and T4s.
Those who have recently become self-employed and don't have third-party validation can still apply for a mortgage, but have to come up with a 10 per cent down payment instead of five per cent. Refinancing will also be cut to 85 per cent loan to value instead of the previous 90 per cent.
Brokers have been giving the rule changes mixed reviews with some sayings the latest move was "off the wall" and hopes that if enough people talk about their displeasure with the changes, the CMHC might alter its decision.
"I don't think this was a good decision - it doesn't make sense now," one broker said, adding it also makes writing off income for tax purposes more difficult for BFS clients.
Some brokers on the other hand, agrees with CMHC's decision.
"The more people who default on loans, the worse the market becomes," they state, noting they felt a lot of self-employed people have qualified for mortgages when they shouldn't have. "This provision for self-employed is going to put the right people in the right structure of home."
First off, self-employed borrowers with more than three years in the same business who apply for a mortgage using stated income, as well as commissioned-income borrowers, are now required to provide to provide traditional proof of income (or "third party validation") through documents like financial statements, contracts and T4s.
Those who have recently become self-employed and don't have third-party validation can still apply for a mortgage, but have to come up with a 10 per cent down payment instead of five per cent. Refinancing will also be cut to 85 per cent loan to value instead of the previous 90 per cent.
Brokers have been giving the rule changes mixed reviews with some sayings the latest move was "off the wall" and hopes that if enough people talk about their displeasure with the changes, the CMHC might alter its decision.
"I don't think this was a good decision - it doesn't make sense now," one broker said, adding it also makes writing off income for tax purposes more difficult for BFS clients.
Some brokers on the other hand, agrees with CMHC's decision.
"The more people who default on loans, the worse the market becomes," they state, noting they felt a lot of self-employed people have qualified for mortgages when they shouldn't have. "This provision for self-employed is going to put the right people in the right structure of home."
Monday, April 5, 2010
Report Says 1 in 4 Canadians House Poor....
One in four Canadians rely on subsidies or spend over 30 per cent of their pre-tax income on housing costs, including mortgages and rent, according to a report by the Conference Board of Canada.
According to the report, a household is unaffordable if more than 30 per cent of its pre-tax income is spent on household costs - a situation that more than three million Canadians find themselves in. The typical household spends 50 per cent more on shelter than on food and over five times more on shelter than on clothing.
"The quality and cost of housing are major factors in the health of Canadians," said Diana Mackay, conference board director of education and health. "However, about one-fifth of Canadian households do not have the resources to afford both good-quality homes and other health-enhancing expenditures, such as nutritious food or access to recreational activities."
The report warned that the high number of Canadians stretched too thin negatively affects their health, productivity, and national competitiveness, and increases the cost of health-care and welfare.
Warmly,
Mary Wozny
According to the report, a household is unaffordable if more than 30 per cent of its pre-tax income is spent on household costs - a situation that more than three million Canadians find themselves in. The typical household spends 50 per cent more on shelter than on food and over five times more on shelter than on clothing.
"The quality and cost of housing are major factors in the health of Canadians," said Diana Mackay, conference board director of education and health. "However, about one-fifth of Canadian households do not have the resources to afford both good-quality homes and other health-enhancing expenditures, such as nutritious food or access to recreational activities."
The report warned that the high number of Canadians stretched too thin negatively affects their health, productivity, and national competitiveness, and increases the cost of health-care and welfare.
Warmly,
Mary Wozny
Tuesday, March 30, 2010
Banks Start Interest Rate Shake Up.....
Four big banks have increased their posted rates on fixed mortgages, signaling the start of an upward move on record-low interest rates.
Royal Bank, TD Canada Trust and Laurentian all moved their posted rates on five-year fixed mortgages by 0.6 per cent yesterday, a move followed by CIBC today. Many non-banks have already followed, prompting a surge in requests from variable-rate clients to lock into fixed rates.
The interest rate increase will also mean higher qualifying criteria for new clients, who must meet the five-year posted fixed rate when the new mortgage insurance rules kick in on April 19.
CIBC economist Benjamin Tal told the Globe and Mail the rise in rates along with other factors means the booming housing market will slow down significantly after spring.
"Given where interest rates are now, I still think you'll see an extremely strong spring.
However, after that I think the housing market will stagnate," Mr. Tal said. "We are in the ninth inning of this booming house market. We are not expecting a crash, but we will stagnate."
Royal Bank, TD Canada Trust and Laurentian all moved their posted rates on five-year fixed mortgages by 0.6 per cent yesterday, a move followed by CIBC today. Many non-banks have already followed, prompting a surge in requests from variable-rate clients to lock into fixed rates.
The interest rate increase will also mean higher qualifying criteria for new clients, who must meet the five-year posted fixed rate when the new mortgage insurance rules kick in on April 19.
CIBC economist Benjamin Tal told the Globe and Mail the rise in rates along with other factors means the booming housing market will slow down significantly after spring.
"Given where interest rates are now, I still think you'll see an extremely strong spring.
However, after that I think the housing market will stagnate," Mr. Tal said. "We are in the ninth inning of this booming house market. We are not expecting a crash, but we will stagnate."
Saturday, March 27, 2010
Vacancies Rising in B.C. but Sales Pick Up in Apartments
Rising vacancy rates have been good news to renters in the British Columbia apartment market as new supply has come online.
But as prices adjust, sales activity in apartments has also begun to pick up, according to a report this week by Avison Young.
While vacancy rates are climbing, up as high as 8 per cent in Chilliwack, Avison Young says prices have stabilized and sellers have adjusted their expectations.
"As a result of the lower prices in certain submarkets, the bid-ask gap will likely continue to narrow, leading to more sales as effects of the global financial meltdown and U.S. credit crisis soften," says the Avison Young Multifamily Investment Report on BC.
Despite the BC-wide vacancy increases, Victoria's vacancy remains below 1.5 per cent, and Vancouver just above 2 per cent, according to the Canada Mortage and Housing Corp.
According to Businessweek Magazine, Vancouver faces $700 million in financing for the luxury condos used by Olympic athletes in February, and the city needs to sell 474 units for as much as $10 million each to recoup its lending. These condos overlooking False Creek could otherwise prove damaging to Vancouver's credit rating.
Similarly, Montreal's 1976 Olympics left Quebec with $1.5 billion of debt that took three decades to repay, says the magazine.
Warmly,
MaryWozny
But as prices adjust, sales activity in apartments has also begun to pick up, according to a report this week by Avison Young.
While vacancy rates are climbing, up as high as 8 per cent in Chilliwack, Avison Young says prices have stabilized and sellers have adjusted their expectations.
"As a result of the lower prices in certain submarkets, the bid-ask gap will likely continue to narrow, leading to more sales as effects of the global financial meltdown and U.S. credit crisis soften," says the Avison Young Multifamily Investment Report on BC.
Despite the BC-wide vacancy increases, Victoria's vacancy remains below 1.5 per cent, and Vancouver just above 2 per cent, according to the Canada Mortage and Housing Corp.
According to Businessweek Magazine, Vancouver faces $700 million in financing for the luxury condos used by Olympic athletes in February, and the city needs to sell 474 units for as much as $10 million each to recoup its lending. These condos overlooking False Creek could otherwise prove damaging to Vancouver's credit rating.
Similarly, Montreal's 1976 Olympics left Quebec with $1.5 billion of debt that took three decades to repay, says the magazine.
Warmly,
MaryWozny
Tuesday, October 6, 2009
Ottawa Area Realtors Scramble for Listings
According to an article in todays Ottawa Citizen, homeowners in Ottawa are staying put, leaving real estate agents scrambling to find listings and creating one of the strongest seller's markets the nation's capital has seen in years.
According to the president of the Ottawa Real Estate Board, realtors in Ottawa have fewer than 3,800 resale homes available to sell. Although listings traditionally drop in the fall, realtors had more than 4,700 listings at this time a year ago.
Yet even with the limited supply, the board reported its best-ever September with 1,220 sales, topping the 1,208 sales of September 2008. That pushed the average resale price to $304,789, a 5.7-per-cent increase from a year earlier.
According to one Re/Max agent in Ottawa's west end, he is finding the market so constrained that he has sold off his last remaining houses and now has no listings of his own, indicating that "it's not the first time in his career that he's been 'listless'." "Listing inventory is definitely down. But it's not like they have been expiring, we have sold them all. It's very much a strong market right now."
The economic slowdown has caused many potential sellers to decide simply to ride out the slump. As a result, buyers who hope to tap into low interest rates must scramble for available homes.
Buyers are facing multiple offers on homes and that is influencing the upward prices. Whatever inventory is coming on the board is selling.Agents are also dealing with intense competition from newcomers that help sellers market their home directly to eager buyers.
The supply shortage is pushing builders to step up construction of new homes. The value of building permits in Ottawa jumped 8.1 per cent to $161.8 million in July, the most recent month for which statistics are available. That's up from the $149.6 million worth of building permits sought in June, according to Statistics Canada.
The increase supports a Canada Mortgage and Housing prediction in September that the pace of new home construction in Ottawa will take off in late 2009.
The resale market looked anemic in the first few months of 2009. At the end of March, 2,479 resale homes had been sold in Ottawa, an 8.7-per-cent drop from the first three months of 2008.
But September's record pace builds on a strong July and August for the real estate board.
As of September, condominiums were selling for an average $241,458, and other residential properties for an average $322,960, the board said.
According to the president of the Ottawa Real Estate Board, realtors in Ottawa have fewer than 3,800 resale homes available to sell. Although listings traditionally drop in the fall, realtors had more than 4,700 listings at this time a year ago.
Yet even with the limited supply, the board reported its best-ever September with 1,220 sales, topping the 1,208 sales of September 2008. That pushed the average resale price to $304,789, a 5.7-per-cent increase from a year earlier.
According to one Re/Max agent in Ottawa's west end, he is finding the market so constrained that he has sold off his last remaining houses and now has no listings of his own, indicating that "it's not the first time in his career that he's been 'listless'." "Listing inventory is definitely down. But it's not like they have been expiring, we have sold them all. It's very much a strong market right now."
The economic slowdown has caused many potential sellers to decide simply to ride out the slump. As a result, buyers who hope to tap into low interest rates must scramble for available homes.
Buyers are facing multiple offers on homes and that is influencing the upward prices. Whatever inventory is coming on the board is selling.Agents are also dealing with intense competition from newcomers that help sellers market their home directly to eager buyers.
The supply shortage is pushing builders to step up construction of new homes. The value of building permits in Ottawa jumped 8.1 per cent to $161.8 million in July, the most recent month for which statistics are available. That's up from the $149.6 million worth of building permits sought in June, according to Statistics Canada.
The increase supports a Canada Mortgage and Housing prediction in September that the pace of new home construction in Ottawa will take off in late 2009.
The resale market looked anemic in the first few months of 2009. At the end of March, 2,479 resale homes had been sold in Ottawa, an 8.7-per-cent drop from the first three months of 2008.
But September's record pace builds on a strong July and August for the real estate board.
As of September, condominiums were selling for an average $241,458, and other residential properties for an average $322,960, the board said.
Tuesday, September 22, 2009
Need Money? The Secret About Credit that Will Change Your Life.
I've found a short cut to money that you have to take a look at.In the next two minutes your going to learn something about credit that most folks will never know. It concerns the most profitable loophole in the credit reporting system.
Interested?
If you are, then please read this article written by national business credit expert Thomas Kish.
This short cut to money has changed a lot of peoples lives.
By Thomas Kish, President of CashFlowExperts.Biz ......
Almost everyone knows that a loan or credit card in your personal name gets reported to the credit bureaus. And this activity shows up on your personal credit report. The more you owe on your credit report, the lower your FICO credit score will be. And having bad credit will cost you dearly.
But - pay attention now - there is a way to get loans and credit cards that NEVER show up on your personal credit report.
And here it is...Here's how it works. When you get a business line of credit or business credit card In the name of a business, from my list of approved lenders - it will never appear on your personal credit report.
So you can get large amounts of cash and credit lines from the banks I work with everyday without worrying about hurting your personal credit. You can use this cash for anything you want to, and your assets will remain confidential.And you can start a business on paper for almost nothing. Just pick out a cool name for your new business and submit it on-line. You will have your business papers back in a few days.
Remember, no matter how much cash you take out in the name of your business, your personal credit score never drops.You can get $200,000 to $300,000 in cash and UNSECURED new business lines of credit by simply following my system. An unsecured business line of credit is the easiest short cut to getting money that you will ever find.
An unsecured business line of credit is simply a loan you get in the name of a business without having to give up any collateral.Business lines of credit come in the form of multi-year loans, convenient checks and business credit cards that offer cash advances that can be used anywhere.
The money available from a business line of credit can be accessed as cash wired directly into your account, with check writing privileges or like any other credit card with a interest free grace period.
You can use business lines of credit for so many things -
1. Real Estate investing
2. Stock market investing
3. Starting a new business
4. Growing an existing business
5. Advertising
6. Creating an internet business
7. Writing a book or a screen play
8. Ebay business opportunities
9. Investing in livestock or race horses
10. Or any other business activity you can dream of!
This is the best way most people have ever seen to get cash to buy real estate or start a business.
Because, in effect, the money is invisible. It does not show up on your personal credit report while you are using it.
Some people may think this is to good to be true. But savvy businesses have known about business lines of credit for the last 50 years.Isn't it time you learn about this EASY money source too.
Go to: https://m353.infusionsoft.com/go/sms-launch/mary
About Thomas Kish.
Thomas Kish is an author, speaker, business consultant and an active real estate investor.He is a national expert in the area of business credit and has shared the stage with best selling authors Robert Allen, Mark Victor Hansen, and Robert Kiyosaki . Tom has bought and sold 8 million dollars worth of real estate using business lines of credit instead of using his own money.And he has helped thousands of people change their lives with business lines of credit.
If you need money for your business check this out now!https://m353.infusionsoft.com/go/sms-launch/mary
Interested?
If you are, then please read this article written by national business credit expert Thomas Kish.
This short cut to money has changed a lot of peoples lives.
By Thomas Kish, President of CashFlowExperts.Biz ......
Almost everyone knows that a loan or credit card in your personal name gets reported to the credit bureaus. And this activity shows up on your personal credit report. The more you owe on your credit report, the lower your FICO credit score will be. And having bad credit will cost you dearly.
But - pay attention now - there is a way to get loans and credit cards that NEVER show up on your personal credit report.
And here it is...Here's how it works. When you get a business line of credit or business credit card In the name of a business, from my list of approved lenders - it will never appear on your personal credit report.
So you can get large amounts of cash and credit lines from the banks I work with everyday without worrying about hurting your personal credit. You can use this cash for anything you want to, and your assets will remain confidential.And you can start a business on paper for almost nothing. Just pick out a cool name for your new business and submit it on-line. You will have your business papers back in a few days.
Remember, no matter how much cash you take out in the name of your business, your personal credit score never drops.You can get $200,000 to $300,000 in cash and UNSECURED new business lines of credit by simply following my system. An unsecured business line of credit is the easiest short cut to getting money that you will ever find.
An unsecured business line of credit is simply a loan you get in the name of a business without having to give up any collateral.Business lines of credit come in the form of multi-year loans, convenient checks and business credit cards that offer cash advances that can be used anywhere.
The money available from a business line of credit can be accessed as cash wired directly into your account, with check writing privileges or like any other credit card with a interest free grace period.
You can use business lines of credit for so many things -
1. Real Estate investing
2. Stock market investing
3. Starting a new business
4. Growing an existing business
5. Advertising
6. Creating an internet business
7. Writing a book or a screen play
8. Ebay business opportunities
9. Investing in livestock or race horses
10. Or any other business activity you can dream of!
This is the best way most people have ever seen to get cash to buy real estate or start a business.
Because, in effect, the money is invisible. It does not show up on your personal credit report while you are using it.
Some people may think this is to good to be true. But savvy businesses have known about business lines of credit for the last 50 years.Isn't it time you learn about this EASY money source too.
Go to: https://m353.infusionsoft.com/go/sms-launch/mary
About Thomas Kish.
Thomas Kish is an author, speaker, business consultant and an active real estate investor.He is a national expert in the area of business credit and has shared the stage with best selling authors Robert Allen, Mark Victor Hansen, and Robert Kiyosaki . Tom has bought and sold 8 million dollars worth of real estate using business lines of credit instead of using his own money.And he has helped thousands of people change their lives with business lines of credit.
If you need money for your business check this out now!https://m353.infusionsoft.com/go/sms-launch/mary
Tuesday, September 15, 2009
Mortgage Debt Elimination Program
Announcing a New 90 Days to Mortgage Freedom Program!
Do you want to pay off your mortgage in as little as 3 to 6 months?
Learn about the little known Private Banking strategy to settle or cancel your mortgage to ZERO balance.
Get your FREE detailed ebook and video NOW by clicking this link:
http://tinyurl.com/q55son
By turning yourself into a public 'creditor' and truly understanding the mortgage origination process, you may be able to free yourself from mortgage debt forever. Sounds unbelievable until you know the FACTS.
Go here to find out how http://tinyurl.com/q55son
Do you want to pay off your mortgage in as little as 3 to 6 months?
Learn about the little known Private Banking strategy to settle or cancel your mortgage to ZERO balance.
Get your FREE detailed ebook and video NOW by clicking this link:
http://tinyurl.com/q55son
By turning yourself into a public 'creditor' and truly understanding the mortgage origination process, you may be able to free yourself from mortgage debt forever. Sounds unbelievable until you know the FACTS.
Go here to find out how http://tinyurl.com/q55son
New Canadians Drive Canada's Housing Demand
As a result of stronger labour markets and mortgage product innovation, the homeownership rate rose for all immigrant groups regardless of how long they had resided in Canada.
As more immigrants transition from renting to owning, they will continue to drive housing demand, most notably in the condo market. Research has shown that immigrant homeowners are more than twice as likely to live in a condominium than their Canadian counterparts. The report also indicated that 69 per cent of immigrants who came to Canada between 2001 and 2006 settled in Toronto, Montreal and Vancouver.
As more immigrants transition from renting to owning, they will continue to drive housing demand, most notably in the condo market. Research has shown that immigrant homeowners are more than twice as likely to live in a condominium than their Canadian counterparts. The report also indicated that 69 per cent of immigrants who came to Canada between 2001 and 2006 settled in Toronto, Montreal and Vancouver.
Sunday, September 13, 2009
Is Canada's Commercial Real Estate Market Set for a Comeback?
As reported in Mortgage Brokers News and following dismal reports of Canada's commercial real estate market seeing a 50 per cent decline in transactions in the first half of 2009, there are signs that it may be coming back to life.
According to commercial mortgage specialists, this is a good time for purchasers with strong backing. They are seeing an increase in volume year over year. Lenders are still being "very cautious and conservative", with many of them going below appraised values for commercial buildings, the situation has improved from earlier this year. For buyers in strong positions, there are deals on industrial buildings and it appears that there is a "cautious" market coming back for hotels and plazas.
A recent story in Dow Jones also pointed to Canada's commercial market recovering. Pierre Boiron, a real estate agent, developer and co-author of "Commercial Real Estate Investing in Canada" told the news service that slowing demand, inventory peaks and price declines are pointing to the bottom of an "adjustment phase" in the commercial market that will lead into an acquisition phase. "It means that the mess is being cleaned up," Boiron told Dow Jones, also noting that the turnaround will be gradual and dependent on employment numbers.
Warmly,
Mary Wozny
According to commercial mortgage specialists, this is a good time for purchasers with strong backing. They are seeing an increase in volume year over year. Lenders are still being "very cautious and conservative", with many of them going below appraised values for commercial buildings, the situation has improved from earlier this year. For buyers in strong positions, there are deals on industrial buildings and it appears that there is a "cautious" market coming back for hotels and plazas.
A recent story in Dow Jones also pointed to Canada's commercial market recovering. Pierre Boiron, a real estate agent, developer and co-author of "Commercial Real Estate Investing in Canada" told the news service that slowing demand, inventory peaks and price declines are pointing to the bottom of an "adjustment phase" in the commercial market that will lead into an acquisition phase. "It means that the mess is being cleaned up," Boiron told Dow Jones, also noting that the turnaround will be gradual and dependent on employment numbers.
Warmly,
Mary Wozny
Saturday, September 12, 2009
How Does Divorce Impact Your Credit?
I want to visit a topic that I'm frequently questioned on by clients. With the record high divorce rates in Canada and the United States, one should ask themselves how will a divorce impact my credit report?
A divorce decree alone will have no impact on jointly held accounts that are a part of your credit report. For joint accounts, including credit cards, car loans, home mortgages and lines of credit, you and your ex-spouse continue to have joint liability. You are both responsible, and if one of you defaults, creditors will seek payment from the other.
Just because your divorce may be finalized and you think that "finally it's all over!" the reality is that if you were a co-signer on anything with your previous spouse then you are still liable for these debts. Failure on the part of either party to make payments on time and/or pay off these debts will result in your own personal credit being potentially ruined! Often this happens and you are not even aware of it!
In going through the divorce process, ensure that any joint liabilities are reconciled and resolved, that debts have been satisfied and you have been completely removed from any further potential liability and costs from your former spouse. Think very carefully about old credit cards that may have been put in both parties names many years ago and forgotten about that could crawl out of the woodwork at some future point and harm your credit.
Check your own personal credit and FICO/Beacon Score to avoid these surprises before it's too late. It's up to you to take responsibility and proactive action to protect your personal credit. You are the only one who can.
Warmly,
Mary Wozny
A divorce decree alone will have no impact on jointly held accounts that are a part of your credit report. For joint accounts, including credit cards, car loans, home mortgages and lines of credit, you and your ex-spouse continue to have joint liability. You are both responsible, and if one of you defaults, creditors will seek payment from the other.
Just because your divorce may be finalized and you think that "finally it's all over!" the reality is that if you were a co-signer on anything with your previous spouse then you are still liable for these debts. Failure on the part of either party to make payments on time and/or pay off these debts will result in your own personal credit being potentially ruined! Often this happens and you are not even aware of it!
In going through the divorce process, ensure that any joint liabilities are reconciled and resolved, that debts have been satisfied and you have been completely removed from any further potential liability and costs from your former spouse. Think very carefully about old credit cards that may have been put in both parties names many years ago and forgotten about that could crawl out of the woodwork at some future point and harm your credit.
Check your own personal credit and FICO/Beacon Score to avoid these surprises before it's too late. It's up to you to take responsibility and proactive action to protect your personal credit. You are the only one who can.
Warmly,
Mary Wozny
Friday, September 11, 2009
Guard Your Personal Credit Bureau Like Gold!
I'm appalled! I'm so perturbed by something that I just saw that I have to write about it and warn and caution you all about this.
Your credit score is a critical piece to any financing that you are attempting to get, mortgage or otherwise. Do NOT let everyone you speak with when looking for financing pull your credit. I'll say it once again..... do NOT let multiple people pull your credit bureau!
I have someone who came to me today .... 13 months ago their credit scores were 737 and 638 and today they are 619 and 560 respectively due to sheer ignorance. Pure and simple ignornance and lack of knowledge about the repercussions of having so many people pulling their credit. They literally shot themselves in the proverbial foot and destroyed their credit at the same time.
Amazingly enough the client doesn't even recognize many of the people who have pulled their credit bureaus. I was told, "well, my husband was online looking at cars on all these sites and just entered his Social Insurance Number"....... never realizing that by doing so he was allowing them to pull his credit while he was online shopping for cars and getting prices.
And don't get me started on the 'rate shoppers' affect of going to 10 different mortgage brokers to find mortgage financing and each one pulling their credit and effectively lowering their credit scores each and every time!!! Consumers need to be educated on how this will lower their credit scores thereby lowering their ability to get the most advantageous and cost effective mortgage financing in the market. Sometimes even making it impossible to get any kind of financing or refinancing when they need it. I won't even go into the morality and ethics of going to 10 different brokers and wasting the brokers time, efforts, and money on that particular game. And yes, it actually costs a broker money to pull those credit bureaus, a cost ads up pretty quickly.
Guard your personal credit file like gold! The immediate and direct result of too many credit bureaus being pulled is a quick reduction in your credit score which will reflect in higher interest and borrowing costs to you.
And if you are serious about getting a mortgage to buy that dream home or refinancing your existing mortgage and paying off some debt, give me a call or apply online at www.MaryWozny.com!
Warmly,
Mary Wozny
Your credit score is a critical piece to any financing that you are attempting to get, mortgage or otherwise. Do NOT let everyone you speak with when looking for financing pull your credit. I'll say it once again..... do NOT let multiple people pull your credit bureau!
I have someone who came to me today .... 13 months ago their credit scores were 737 and 638 and today they are 619 and 560 respectively due to sheer ignorance. Pure and simple ignornance and lack of knowledge about the repercussions of having so many people pulling their credit. They literally shot themselves in the proverbial foot and destroyed their credit at the same time.
Amazingly enough the client doesn't even recognize many of the people who have pulled their credit bureaus. I was told, "well, my husband was online looking at cars on all these sites and just entered his Social Insurance Number"....... never realizing that by doing so he was allowing them to pull his credit while he was online shopping for cars and getting prices.
And don't get me started on the 'rate shoppers' affect of going to 10 different mortgage brokers to find mortgage financing and each one pulling their credit and effectively lowering their credit scores each and every time!!! Consumers need to be educated on how this will lower their credit scores thereby lowering their ability to get the most advantageous and cost effective mortgage financing in the market. Sometimes even making it impossible to get any kind of financing or refinancing when they need it. I won't even go into the morality and ethics of going to 10 different brokers and wasting the brokers time, efforts, and money on that particular game. And yes, it actually costs a broker money to pull those credit bureaus, a cost ads up pretty quickly.
Guard your personal credit file like gold! The immediate and direct result of too many credit bureaus being pulled is a quick reduction in your credit score which will reflect in higher interest and borrowing costs to you.
And if you are serious about getting a mortgage to buy that dream home or refinancing your existing mortgage and paying off some debt, give me a call or apply online at www.MaryWozny.com!
Warmly,
Mary Wozny
Monday, August 17, 2009
Are Homes the Cause of Some Bankruptcies?
According to an article in the Toronto Star, homes are becoming more of a problem for consumers with escalalting debt.
In the past it was unusual for the family home or real estate to be the cause of bankruptcy in the last 10 to 15 years. It actually was a solution for many people. However, with the drop in the value of homes, their equity has disappeared and they come up with a deficit that the bank still wants repaid.
A bankruptcy trustee with Deloitte & Touche attributes the recent spike in consumer insolvencies to a seven-year high unemployment rate and people relying too much on credit as an income supplement. People worried about losing their job should be cutting expenses and aggressivley repaying debt. Always sound financial advice!
Warmly,
Mary Wozny
In the past it was unusual for the family home or real estate to be the cause of bankruptcy in the last 10 to 15 years. It actually was a solution for many people. However, with the drop in the value of homes, their equity has disappeared and they come up with a deficit that the bank still wants repaid.
A bankruptcy trustee with Deloitte & Touche attributes the recent spike in consumer insolvencies to a seven-year high unemployment rate and people relying too much on credit as an income supplement. People worried about losing their job should be cutting expenses and aggressivley repaying debt. Always sound financial advice!
Warmly,
Mary Wozny
Friday, August 14, 2009
U. S. Mortgage Default Rates
It's interesting to note that the default rate for U. S. mortgages that have been modified to prevent house foreclosures may actually end up at 75% according to Fitch Ratings, because of "shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves".
Since the U. S. government announced assistance programs to help struggling homeowners and lower the rate of foreclosures, lenders have been trying to modify mortgage terms for borrowers to give them a better chance to get back on track. They reported that aproximately seven per cent of U. S. home loans packaged into securities without government support have been modified to date.
In a statement to Bloomberg, a Fitch representative stated that loan modifications hold clear value for many homeowners proved the modified payments are sustainable. Unfortunately, more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextened on other credit and expenses.
How will all this shake out? We'll have to watch and wait, only time will tell.
Warmly,
Mary Wozny
Since the U. S. government announced assistance programs to help struggling homeowners and lower the rate of foreclosures, lenders have been trying to modify mortgage terms for borrowers to give them a better chance to get back on track. They reported that aproximately seven per cent of U. S. home loans packaged into securities without government support have been modified to date.
In a statement to Bloomberg, a Fitch representative stated that loan modifications hold clear value for many homeowners proved the modified payments are sustainable. Unfortunately, more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextened on other credit and expenses.
How will all this shake out? We'll have to watch and wait, only time will tell.
Warmly,
Mary Wozny
Wednesday, August 12, 2009
Household Debt Burdening Canadians
Canadians are carrying a larger household debt load than ever before, a total of $1.3 trillion in 2008 according to a survey by the CGA Association of Canada.
The study showed outstanding mortgages took up $900 billion worth of the debt load total, but the more concerning number to the association was the $400 billion in consumer debt carried by Canadians. Anothe red flag was that 49 per cent of families with one or more children under age 18 reported their debt had increased in recent years.
In the boom years, the housing market helped Canadians to maintain a slightly improving balance between mortgage debt and residential assets but it didn't offset the run up in consumer debt which was not well supported with accumulation of consumer durables or financial assets.
Canadians have to the more aware of and accountable for their spending habits, most particularly the use of credit cards and lines of credit and have to maintain their financial responsibility to maintain a healthy economic environment.
With mortgage rates at record low levels and assuming some equity in your home, now is an ideal time to refinance high cost credit card debt and bring your financial home to order.
Contact Mary Wozny at www.MaryWozny.com today.
The study showed outstanding mortgages took up $900 billion worth of the debt load total, but the more concerning number to the association was the $400 billion in consumer debt carried by Canadians. Anothe red flag was that 49 per cent of families with one or more children under age 18 reported their debt had increased in recent years.
In the boom years, the housing market helped Canadians to maintain a slightly improving balance between mortgage debt and residential assets but it didn't offset the run up in consumer debt which was not well supported with accumulation of consumer durables or financial assets.
Canadians have to the more aware of and accountable for their spending habits, most particularly the use of credit cards and lines of credit and have to maintain their financial responsibility to maintain a healthy economic environment.
With mortgage rates at record low levels and assuming some equity in your home, now is an ideal time to refinance high cost credit card debt and bring your financial home to order.
Contact Mary Wozny at www.MaryWozny.com today.
Tuesday, August 11, 2009
First Time Homebuyers in the Market
According to a report published by Royal LePage Real Estate Services, low interest rates and house prices are the driving forces for potential first-time homebuyers across Canada.
Although first-time homebuyers appreciate government incentives such as tax credits, it is the markedly improved affordability that is proving to be the powerful drawing card bringing them to the market and encouraging them to purchase. The survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.
When asked what the top incentive to purchase was for them, 86 per cent cited low interest rates followed by 81 per cent who said lower housing prices were the top motivating factor. Job security and a stable economy were the next ranked incentives.
Interesting to note - the survey also revealed regional differences when it came to the importance of certain incentives. Job security was more important in Western Canada compared to Atlantic Canada, which has seen a relatively resilient local economy. Ontario and Quebec buyers rated the recently implemented Home Renovation Tax Credit as having a bigger impact on their buying decision compared to the Canadian average.
Contact Mary Wozny today, www.MaryWozny.com, for your mortgage financing and make your dream of home ownership come true!
Although first-time homebuyers appreciate government incentives such as tax credits, it is the markedly improved affordability that is proving to be the powerful drawing card bringing them to the market and encouraging them to purchase. The survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.
When asked what the top incentive to purchase was for them, 86 per cent cited low interest rates followed by 81 per cent who said lower housing prices were the top motivating factor. Job security and a stable economy were the next ranked incentives.
Interesting to note - the survey also revealed regional differences when it came to the importance of certain incentives. Job security was more important in Western Canada compared to Atlantic Canada, which has seen a relatively resilient local economy. Ontario and Quebec buyers rated the recently implemented Home Renovation Tax Credit as having a bigger impact on their buying decision compared to the Canadian average.
Contact Mary Wozny today, www.MaryWozny.com, for your mortgage financing and make your dream of home ownership come true!
Monday, August 10, 2009
CMHC Says Mortgage Rates to Remain Stable
CMHC in their second quarter Housing Market Outlook says that Mortgage Rates are expected to remain with 25 to 75 basis points of their current level for the remainder of 2009, keeping them very low in a historical context.
Movements in mortgage rates are difficult to predict due to volatile economic conditions however rates are expected to remain steady this year and edge higher in 2010.
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebouding to 150,300 in 2010.
2009's decline in housing starts can be attributed to several factors, including the current economic climate, increased competition from the existing home market and the impact of strong house price growth between 2002 and 2007, states their chief economist.
Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.
Warmly,
Movements in mortgage rates are difficult to predict due to volatile economic conditions however rates are expected to remain steady this year and edge higher in 2010.
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebouding to 150,300 in 2010.
2009's decline in housing starts can be attributed to several factors, including the current economic climate, increased competition from the existing home market and the impact of strong house price growth between 2002 and 2007, states their chief economist.
Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.
Warmly,
Sunday, August 9, 2009
Growing Numbers Boost B. C. Real Estate Market
British Columbia saw its first year-over-year increase in residential sales in May 2009, with the B.C. MLS reporting a three per cent rise compared to May 2008.
The chief economist at the British Columbia Real Estate Association states that homes sales have bounced back from the extraorinarily low levels recorded during the winter months. Improved affordability and less uncertainty about the future are the main factors driving home sales higher.
Stronger consumer demand combined with fewer home listings is stabilizing prices in the province. MLS predicts residential prices in B. C. to decline eight per cent in 2009 to $420,600.
The majority of the decline in home prices has already occurred and balanced markets are emerging in Victoria, Vancouver and the Fraser Valley. There's now little downward pressure on home prices in these particular areas.
Warmly,
Mary Wozny
The chief economist at the British Columbia Real Estate Association states that homes sales have bounced back from the extraorinarily low levels recorded during the winter months. Improved affordability and less uncertainty about the future are the main factors driving home sales higher.
Stronger consumer demand combined with fewer home listings is stabilizing prices in the province. MLS predicts residential prices in B. C. to decline eight per cent in 2009 to $420,600.
The majority of the decline in home prices has already occurred and balanced markets are emerging in Victoria, Vancouver and the Fraser Valley. There's now little downward pressure on home prices in these particular areas.
Warmly,
Mary Wozny
Saturday, August 8, 2009
Ottawa Housing Market Hot!
Ottawa saw its best May on record for housing sales, with the capital city’s Real Estate Board reporting a 19 per cent increase in sales from the previous month and a 5.3 per cent increase in house prices over May 2008.
Homes in every price range are sell well, right from starter homes to luxury properties, according to the president of the Ottawa Real Estate Board. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market.
They reported that 1,969 residential properties were sold in May at an average price of $312,045, a slight rise in mortgage financing has been noted for the same time period. Ottawa hasn’t seen as much of a slowdown as the rest of the country because it is more isolated than the rest of the country and there is more guaranteed income due to the large number of government jobs the capital city has to offer.
Warmly
Mary Wozny
Homes in every price range are sell well, right from starter homes to luxury properties, according to the president of the Ottawa Real Estate Board. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market.
They reported that 1,969 residential properties were sold in May at an average price of $312,045, a slight rise in mortgage financing has been noted for the same time period. Ottawa hasn’t seen as much of a slowdown as the rest of the country because it is more isolated than the rest of the country and there is more guaranteed income due to the large number of government jobs the capital city has to offer.
Warmly
Mary Wozny
Friday, August 7, 2009
Have Housing Starts in Canada Hit Bottom?
Canada Mortgage and Housing Corporation (CMHC) reported recently that national housing starts increased by 9.2% in May compared to April. This leads some economists to think that a bottom might be forming in the country's homebuilding activity.
March saw a jump in overall nationals housing starts, that jump was largely due to condo development in Ontario, the Prairies, the Atlantic provinces and Quebec. The only region to see a decrease was B. C. where the market is still moderating. It is believed that housing starts will bottom out slightly below 120,000 before stabilizing throughout next year.
This is a good indication that homebuilding activity will cease being a drag on economic growth and employment heading into next year, however this being the case, housing starts are not expected to head back to previous levels of 150,000 before 2011.
Warmly,
Mary Wozny
March saw a jump in overall nationals housing starts, that jump was largely due to condo development in Ontario, the Prairies, the Atlantic provinces and Quebec. The only region to see a decrease was B. C. where the market is still moderating. It is believed that housing starts will bottom out slightly below 120,000 before stabilizing throughout next year.
This is a good indication that homebuilding activity will cease being a drag on economic growth and employment heading into next year, however this being the case, housing starts are not expected to head back to previous levels of 150,000 before 2011.
Warmly,
Mary Wozny
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