Kitchener Waterloo Mortgage Source

How Mortgage Brokers are Benefiting Consumers

 Most Canadians still attain their mortgage from their local Bank. Although more individuals are shopping around for better terms and rates, the majority of Canadians do not receive their best possible mortgage. By using the services of a Mortgage Broker, consumers can be confident that their interest, not the Banks, is kept at the forefront, and that they will be provided the best possible rate and terms in the market, because the services of a Mortgage Broker represent all lenders in the mortgage market.

A Canadian Institute of Mortgage Brokers and Lenders (CIMBL) survey quantifies the value that mortgage brokers add with several interesting statistics. 

Some notable points include:

• Mortgage brokers, in part, have assisted Canadians negotiate roughly 1.38% off typical posted bank rates in the last year.
• The number of Canadians using mortgage brokers has jumped 24% since 2005.
• Among those who renewed or refinanced over the past 12 months, 84% remain with the same lender, most likely a mistake given the intense competition out there.
• 88% of Canadians say they are happy with their mortgage terms.   

So even if you are in talks with your Bank about attaining a mortgage, consider comparing the Bank’s service with that of a Broker. Mortgage Brokers focus on only one financial service, Mortgages, and this focus can help save you thousands of dollars over many years and lead to much a faster pay off.

Brent Richardson

State of the Housing Market - October 2008

According to the Canadian Real Estate Association, housing markets have cooled, but have stabilized across the country over the last quarter. Despite a 6.2% quarterly decrease in home prices across Canada, prices are still up on a year over year basis. Moreover, the prices have been hit hardest in major metropolitan areas, especially in Western Canada. General feedback from realtors and mortgage brokers in the Waterloo region report that although housing activity is down slightly, we have not experienced, or are not forecasted to experience a significant housing price decline. Accordingly, Calvin Lindberg, President of The Canadian Real Estate Association states,

 "Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate resale market is stabilizing in many markets."

"There have also been a number of initiatives that will have an impact going forward, including the government’s decision to invest $25 billion in insured mortgage pools, the recent drop in the Bank of Canada rate, and the new rules reducing the maximum amortization to 35 years instead of 40," the CREA President adds. Those new mortgage rules go into effect October 15th. "The third quarter MLS® statistics and these developments are more factors showing the Canadian market is not following U.S. housing trends."

So while we are not currently enjoying the growth of the last few years, there is peace of mind for growth to resume in the mid term. Stay tuned for reporting on the local KW CMHC report of housing trends, which will be released some time in the next few weeks.

Mortgages for the Self Employed

If you are one of the more than 7 million Canadians who are either self employed or are paid on a 100% commission basis, then you may be wondering what mortgage options are available to you. Specifically, you may be wondering what proof of income is required given that the nature of running a business sometimes entails the understatement of your take home pay. Fortunately, there are some great mortgage options available to you that do not require the statement of any type of income. In other words, proof of income is not required for the self employed. Under the programs available, the self employed are still able to enjoy the lowest interest rates on the market, and can apply down payments of as little as 5%. There are a few details and requirements to consider when investigating such a mortgage strategy, however. Here are a few:

-         Must have full Canadian citizenship status.

-         At least two years of self employment proof is required.

-         No income tax arrears.

-         Credit score is a major consideration, especially in relation to the amount of down payment:

o       5-10% Down Payment  - 700 Minimum

o       10-15% Down Payment – 650 Minimum

o       15-25% Down Payment – 620 Minimum

For more details on the types of self employed programs available and how they can apply to you, contact me at your convenience.