Mortgages For Buying Homes

In today's marketplace we are seeing more people buying homes without having the mortgage in place. This really dangerous for clients. Once clients have bought a home and made the deal firm, they are under legal obligation to purchase that home. Clients need to make sure that they can fiance two homes before they go out buying another home. We need to help clients arrange mortgages for both purchase. we are finding in today's marketplace homes can take longer then 90 days to sell, so even with a long completion date, your home needs to be listed with a professional realtor that can advise you on the right price to move your home.

Buying Rental Properties

There is now the availability to purchase rental properties with only 5% down payment. That means on $200,000 purchase price, clients only need $10,000 as a down payment. Mortgage insurer with use 80% of the rental income for qualifying. There is also the potential to go with a 40 year amortization as well. Based on the above example mortgage payments would be $1089 per month. This a great product for investors to start accumulation an investment portfolio.

Mortgage Fixed Rates Lower?

Right now we are seeing the fixed rates being artificially higher for consumers. Fixed mortgage rates are determined by the bond market. Today, the 5 year bond rate is 3.89% and the best discounted mortgage rate is 5.89%. This means there is a 2.00% override for the banks. Normally the spread is about 1.40% above the lowest bond rate. So in theory the 5 year fixed rate should be 5.29%. Watch for lower fixed rates in the future or higher bank profits.

Bank of Canada To Lower Rates?

The tide is changing direction's as we speak. In June we thought the Prime rate set by the Bank of Canada was going to keep increasing and cause a lot of pain for consumers, Now with the Cdn dollar rising 25% this year against the US dollar, the calls are now coming for the Prime rate to be lowered. Today we had several economists from the major banks and financial securities calling for rate cuts. We also heard from the deputy governor of the bank of Canada saying the rising dollar is curbing inflation. Look for Prime rate to be lowered from .50-1.00% in the next six months. Now more then ever consumers need the help of independent accredited mortgage professionals to help make the best mortgage decision for them.

Sub prime Mortgages In Canada

We saw today the banks in Canada announcing there loses due to the crises in the US. Good news is that the Canadian banks had income from the upcoming VISA ipo to offset against the losses. This is good news for the Canadian mortgage market and consumers. We do not wish any major losses for the banks as this could make them lees likely to continue offering great mortgage products at still historic low level interest rates. The flip side is our US counterparts are still going through the crises and all signs point to getting worse before better. Watch for more news in the upcoming months regarding losses in sub prime mortgages.

Tax Deductable Mortgages

There is a lot of talk about making your principal home mortgage tax deductible. This can be a good tax advantage for the right people. In essence you need to re borrow against the equity in your home, and then take that money, reinvest in with a financial planner. You would then be able to deduct the interest from the mortgage on your personal taxes. In theory this can be great if you can tolerate the risk and you have the right financial planner that is not going to lose your principal. I would make sure before doing anything to contact a CA and make sure to have the right structure set up for CRA. Then you will need to find the right financial planner, to invest your money with. You want to do all your homework before you go leaping into this type of a product.

Variable Rate Mortgages

There is a lot more variable rate mortgages available in today's landscape. Every lender offers some form of the mortgage and usually 2-5 different versions. This can make the task of choosing the right one for you very difficult. There are standard prime-? for the entire term or deep discount for a short period of time. There are also various mortgage penalties, if you wish to pay out earlier then the committed mortgage term. As we always recommend, you should look at your own risk tolerance when taking a variable rate mortgage first. After that you will need to review all the major details with your accredited mortgage professional. Together you can work through the highlights and terms of the mortgage that meet with your personal needs. Once the mortgage is chosen you should keep in touch with your mortgage professional to make sure when or if the time is right to convert the mortgage to a fixed term.