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17 March 2014

Analyzing BMO’s Go-Fixed Advice

Bmo is suggesting to NOT go variable and that fixed rates are the better bet.  Canadian Mortgage Trends analyzed  this statement.  Click on the link below

Analyzing BMS's Go-Fixed Advice

11 March 2014

When bad things happen to good people

How to escape the debt rat race.

Many Canadians find themselves bogged down with a bad credit rating for the wrong reason - illness, losing a job, or simply not understanding consumer credit. Sometimes bad financial situations happen to good people and bankruptcy is the only way out. But it's not all doom and gloom - there are a number of strategies for putting one's credit back on track and getting approved for a mortgage, even after bankruptcy.

Going from one financial institution to the next, only to be declined again and again can be very frustrating - which is where an experienced mortgage consultant on your side can make all the difference.

Here are some points to consider:

  • 1. Locating the right lender: Some lenders will not approve a mortgage if a bankruptcy shows up on a credit report, however so-called non-conforming lenders may consider doing so, provided the borrower can demonstrate that he or she has the income to support the payments and is now a good credit risk.

  • 2. Length of time since bankruptcy discharge: Different lenders have different criteria regarding the length of time since a bankruptcy after which they will grant a mortgage - typically two years along with proof of re-established credit. Some lenders may consider applicants with a more recent bankruptcy - a mortgage consultant can advise on the regulations of various lenders.

  • 3. Reasons for bankruptcy: If a bankruptcy was due to factors beyond your control, this is more acceptable to the lender than if the bankruptcy was the result of poor money management and excessive debt, which can affect the terms of an applicant's mortgage approval.

  • 4. Size of down payment: With a past bankruptcy, most lenders will consider a minimum 10% down payment consisting of one's own funds, not borrowed or from a gift. On a case by case basis, a down payment of 5% or less may be permitted.

  • 5. The type of property: Some lenders will only lend on houses or row townhouses. Very few will consider apartments or stacked townhouses, which may involve stringent criteria to qualify.

  • 6. Credit report: A detailed history of how consistently one's financial obligations are met, a credit report provides a picture of financial health based on past behaviour. You can obtain a copy of your credit report free from Equifax (1-800-465-7166) and Trans Union (1-800-663-9980).

  • 7. Credit score: A credit score is an objective summary that translates personal information from a credit report and other sources into a three-digit number representing overall credit-worthiness. A borrower's credit score may determine the rate of the mortgage -- the higher one's credit score, the better the rate which can be negotiated. Some lenders have minimum credit score requirements for those with a bankruptcy.

  • 8. Rate considerations: Most lenders charge a higher interest rate and even some extra fees to those with a bankruptcy. A lender may grant a better rate if certain lending criteria have been met, such as: two years since bankruptcy discharge, good re-established credit, minimum beacon scores, saved down payment, good debt servicing ratios, and a long term history of job stability.

  • 9. Re-established credit: Re-established credit shows the lender that a prospective borrower has new credit and has managed it well since bankruptcy. Typically, re-established credit should involve a recent record of on-time payments on major bank or credit cards. Those re-building their credit need to be aware that a missed payment at this stage could be mentioned on one's credit report for the next six years, and could be grounds for some lenders to decline a mortgage application.

  • 10. Don't do it alone - explore the benefits offered by mortgage brokers: For those with bad credit and/or bankruptcy, a mortgage consultant can coach you on how to improve your credit score over time. While you work on bettering your score, a mortgage consultant can advise on how to get a mortgage despite bruised credit. Mortgage consultants, like those at Mortgage Alliance Oac Mortgages work with prospective homeowners across Canada to provide valuable advice before and during the home buying process.

Your trusted mortgage advisor,

Lisette Amalfi, AMP
Mortgage Broker/Owner



10 March 2014

Mcap's Mortgage And Real Estate News

Three of Canada’s major real estate boards reported February resale results last week. Vancouver saw a 41% increase in resale volumes from a year ago and a rise in the MLS Home Price Index of more than 3%. Calgary continues to be a very tight market with town homes and condominiums leading the way in sales growth. In Toronto, the condominium sector also performed well in February with listings for detached homes continuing to be scarce. Average prices in Toronto were up more than 8% from February, 2013.

Bank of Montreal published its latest Home Buying Report last week. More than a third of Canadian home buyers say that they are willing to engage in a bidding competition with other buyers. In Vancouver and Toronto, the percentage climbs to more than 40%. The average Canadian homeowner reported looking at more than 9 properties before buying.

The Bank of Canada left its overnight rate at 1% once again last week but in its commentary, higher than expected inflation data and a strong fourth quarter for the Canadian economy seems to have removed the possibility of a rate cut. The Bank reports that recent data supports its expectation of a soft landing for the housing market.

Employment figures for February were released by Statistics Canada on Friday and they were disappointing. The Canadian economy shed 7,000 jobs for the month while economists had forecast a gain of about 15,000. The unemployment rate remains at 7%. In the US, the news was much better as 175,000 jobs were added against expectations for a gain of 135,000.  

The benchmark government of Canada five year bond yield ended the week at 1.72%, up from 1.63% the week before.


Mortgage Alliance Oac Mortgages

As a registered franchise of the Mortgage Alliance Network, we have a number of mortgage professionals who can bring you the choice, convenience, and counsel you need to get the RightMortgage®. Working with over 40 lenders (some offered exclusively through brokers) we'll provide unbiased guidance in your mortgage decision.

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