Just months ago, the prospect of an additional Bank of Canada rate hike by the end of 2020 was very much on the table. In recent weeks, however, whispers that the next rate move may in fact be down have been growing louder. In December, Capital Economics said they expected a rate cut before the end of 2019—a call that turned some heads. But now, heavyweights like JPMorgan Chase & Co. and CIBC are adding their voices to those forecasting an impending rate cut rather than a rate hike. JPMorgan Chase has reduced its Canadian growth forecast to 1.5% from 2.25% and expects the BoC to deliver a 25-bps cut at its October rate meeting. Economists at CIBC also expect

❯ Read Post

The dreaded “stress test”…. Is it the stress test that is preventing people from buying homes in Canada? Certainly, it has a big impact on affordability but I would argue that the seemingly uncontrollable rising  house prices and/or current level of home prices have much more to do with getting into a new home than does the stress test. The stress test should be modified to take into consideration the current leveling of interest rates; the fact that incomes rise within the 5-year term of a mortgage; and that principal is being paid down prior to the maturity of any mortgage term.  Perhaps these points should lead to a stress test that inputs a rate of 1% over contract vs.

❯ Read Post

The time leading up to the closing day on your new home purchase can be very stressful and there are a number of things that must come together before you are handed the keys to your new home. One of these requirements involves your down payment and the verification of the source of your down payment. This is to ensure that borrowed money is not being used for the down payment. This information is required by your lender, as well as, in some cases, insurance providers such as the Canada Housing and Mortgage Corporation (CMHC). Down payment sources fall into one of the following three categories: Down Payment from the Sale of Your Current Home When selling your current home

❯ Read Post

Finally, some relief in the mortgage world. While the winds of change aren’t as forgiving as we would have hoped, they are at least moving in the right direction. The centerpiece of budget is a plan to boost home ownership and help ease the difficulty of obtaining a new mortgage. The new First-Time Home Buyer Incentive, for those with an annual income of $120,000 or less, would provide an interest free loan of up to 5% of the value of an existing property or 10% of a new construction home. The government says the $1.25 billion in financing will help 100,000 Canadians over three years. Another $100 million in financing will be administerd by third party groups, including non-government organizations.

❯ Read Post

I Read a great post by Elan Weintraub the other day and had to share his thoughts as it mirrors our opinion. Should pre-approvals be made illegal?  These Cambridge Mortgage Brokers agree with Elan Weintraub. He says that there’s no weight behind actual pre-approvals, and that they only serve to confuse consumers and we agree. “The word ‘pre-approval,’ as anyone who has experience in the mortgage industry knows, has no weight behind it, and it creates misinformation for buyers and for realtors,” he told Mortgage Broker News.  “That misinformation can have dire consequences. There are some lenders who advertise prequalification in 30 seconds, but that cements in buyers’ minds that they could buy a house for, say, $800,000 and then

❯ Read Post

Many industry and economic insiders were pointing to 3-4 more rate hikes in the next 18 months. The central bank’s recent change of heart has many believing we will only see one more hike in the near future and likely not until the spring. As a mortgage broker in Cambridge for almost 30 years now I am never quick to jump on one band wagon or another. There are just too many variables to consider and many times what is said in press releases vs what actually occurs are two very different things. The price and distribution of Canadian Oil, for example, wasn’t expected to be this much of a concern to the Canadian Economy as it has turned out

❯ Read Post

All of us here at the BiggerPiggyBank Team wanted to thank you to all those that supported our fund raising event. As mortgage brokers here in Cambridge, it does our hearts good to see bicycles go to deserving families in our community at Christmas. The success was overwhelming and made it possible to surpass last year’s total. Merry Christmas!

❯ Read Post

1. Pull out your mortgage renewal now, and start early. When you are proactive instead of reactive you can see if there is anything on your credit score or lifestyle that we can modify to ensure you are positioned for the best renewal. You are only in a position to do this when you start early- in the last year of your mortgage you will have the most amount of options available. For example, there can be an inaccuracy in your credit report or you may be considering an income/job change that would impact your options. We can look at timing accordingly for you. 2. Most people think the best rate is the best renewal – WRONG. The terms are

❯ Read Post

This week, OSFI (Office of the Superintendent of Financial Institutions….the rule makers ) announced that effective January 1, 2018 the new Residential Mortgage Underwriting Practices and Procedures (Guidelines Bill B-20) will be applied to all Federally Regulated Lenders. Changes to the guidelines are focused on • the minimum qualifying rate for uninsured mortgages • expectations around loan-to-value (LTV) frameworks and limits • restrictions to transactions designed to work around those LTV limits. What the above means in layman’s terms is the following: OSFI STRESS TESTING WILL APPLY TO ALL CONVENTIONAL MORTGAGES (those with a down payment higher than 20%) The new guidelines will require that all conventional mortgages will have to undergo stress testing. Stress testing means that the borrower

❯ Read Post