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29 January 2010

Dave's Email: 01/29/2010

Sorry, it has been a long time since my last email, but I felt it was necessary to get some information out before the end of this month.

We have seen a very stagnant interest rate market over the last couple of months. As predicted by the Bank of Canada, the Bank Rate remains unchanged at .25%. They would like to increase it….. but the over all condition of our economy is so delicate at the moment they have no intensions of rocking the boat.

With that being said my best 5 year fixed is currently 3.79% *

Best Variable is Prime – 0.25% or effective rate of 2.00%

Lowest credit line is Prime +.60%

*Please be aware that some of these rates are limited to closing dates in the next 30 days, high credit rating expectations, and verifiable levels of income.

If you happen to be deficient, in any of these items we still have lenders willing to lend but the rates may be a little higher.

So if you happen to be behind on income taxes or property taxes, or you are just having a tough time making ends meet….. I can help. I have lenders that can solve most credit challenges.

There was talk of doom and gloom, of the possibility of the bursting of the housing bubble, but some how, the housing market is still moving forward. And in most markets they are actually increasing.

Our largest market, being Toronto is still showing signs of increases…

Will this continue…? Who is to say…? And for how much longer….?

Some were saying the bottom was going to drop out last September, and here we are almost 5 months later, and the sky has not fallen.

But one has to question if housing prices can continue to move in this direction.

Bottom line is that if you are in need of a consolidation, thinking about upsizing or downsizing or renovating, your house is either at or is soon approaching its maximum borrowing power. This means getting the benefit of today’s values will maximize your options.

I am adding a new section to my emails called Mortgage Tidbits. In this section I will focus on some policy or procedure that is “EXCLUSIVE” to one specific lender that may benefit some of my clients.


“Contributory Income”: Is when I can use the income of an outside individual, who is not on title or will not be actually signing the new mortgage….. to help qualify. Examples of this would be, a roommate, a common-law spouse or if there is a husband or wife who’s credit rating is compromised, or maybe their current family situation is not completed, like a divorce or separation. We can introduce the amount of their actual income to help qualify for the new mortgage. The lender will want proof of the contributory income, letters and current paystubs, or tax returns, but that is it.

This lender will accept lower credit ratings, and even some small arrears, I recently completed a transaction where the client had $8000 in property tax arrears.

Now keep in mind that CMHC and Genworth do not accept contributory income, which means the 90 – 95% loan to value deals do not apply. But there is the possibility of getting up to 85% loan to value under this program.

The rate I managed to get this client last week was at 4.25%, 3 year fixed rate, not a bad rate when you consider she would not qualify on her income alone.

19 January 2010

Bank of Canada Keeps Rates the Same...Again.

Once again, the Bank of Canada announced it would keep the key interest rate at a record-low 0.25 per cent to achieve its inflation target of two per cent.

While the Bank said economic growth in Canada resumed in the third quarter of 2009 and there has been a slightly higher than expected rate of inflation in recent months, it reiterated that the economy is still lagging, particularly due to factors like a strong Canadian dollar and low levels of U.S. demand.

Repeating many of the same projections as its October monetary policy report, the Bank predicted the economy to return to full capacity and reach a two per cent inflation rate in the third quarter of 2011. It forecast the economy to grow by 2.9 per cent in 2010 and 3.5 per cent in 2011.

The next Monetary Policy Report will be released Friday and the next rate announcement will be made March 2.

- Canada Mortgage Broker News

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