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It's April -- baseball has started, the Maple Leafs are golfing, and (traditionally) "for sale" signs should be sprouting. In an article in yesterday's Globe Real Estate section , available at http://preview.tinyurl.com/4xs76j, there were some interesting points made.
A CIBC World Markets economist said that for the first time in 7 or 8 years, it looks like it will be a balanced market between buyers and sellers. He anticipates a market where buyers will be able to take their time, have a house inspection done, and be able to avoid bidding wars. His prediction is that prices will rise, but at the general inflation rate of about 2 per cent.
Since I'm not planning on selling my house this year, I think this is good news for the home market. We've aways seen articles about more than a dozen competing offers on the "must-have" house in the hot neighbourhood. (There was a good example in last month's Toronto Life.) Being able to sit down ahead of time and figure out what you can afford, and then know that the list price for the house is not likely to be the starting point.
So, is this the time to buy? If you were considering a purchase, I see no reason to change your mind. And if you've been considering the possibility, why not check the open houses that will be coming soon to a subdivision near you.
And keep an eye on new listings in the areas you are considering. In the Globe article, an agent said that the problem is "there's not much inventory, but what there is, is selling."
And if you are interested in checking out the market, but aren't sure what kind of mortgage you'd qualify for (or, indeed, would be best for you) get in touch with me.
Happy home hunting
Saturday, April 12, 2008
Thursday, April 10, 2008
U.S. mortgage brokers fight back against proposals (National Post, 10 Apr 2008, Page P14)
I saw this article in today's National Post (it's probably in other papers as well, but that's the paper I have electronic access to). While I agree that there were cases of people getting the wrong mortgages, there is no indication in the article that there is a reason for the increased "yield-spread premiums."
People with 'bruised' credit are harder to place, and the lenders offer a higher finder's fee to the broker for placing these clients. An unintended consequence of such a change, I would think, is that it would be harder to get credit for these people. Shouldn't we be encouraging people to build home equity and re-establish their credit. (In Canada, anyway, people in this predicament would be required to put some of their own money down.)
U.S. mortgage brokers fight back against proposals
BY RUTH MANTELL Dow Jones
National Post
10 Apr 2008
NEW YORK • Plenty of parties share blame for the housing crisis, but one of the most maligned groups has been mortgage brokers, who critics claim pushed thousands of homeowners into expensive mortgages they should have never been given. New rules from...read more...
People with 'bruised' credit are harder to place, and the lenders offer a higher finder's fee to the broker for placing these clients. An unintended consequence of such a change, I would think, is that it would be harder to get credit for these people. Shouldn't we be encouraging people to build home equity and re-establish their credit. (In Canada, anyway, people in this predicament would be required to put some of their own money down.)
U.S. mortgage brokers fight back against proposalsBY RUTH MANTELL Dow Jones
National Post
10 Apr 2008
NEW YORK • Plenty of parties share blame for the housing crisis, but one of the most maligned groups has been mortgage brokers, who critics claim pushed thousands of homeowners into expensive mortgages they should have never been given. New rules from...read more...
Related:
Washington shares blame for Bear Stearns collapse
Washington shares blame for Bear Stearns collapse
U.S. OVERHAUL COULD TAKE YEARS Overhaul would give U.S. Fed more power
Washington shares blame for Bear Stearns collapse
Washington shares blame for Bear Stearns collapse
U.S. OVERHAUL COULD TAKE YEARS Overhaul would give U.S. Fed more power
Monday, April 7, 2008
What some people will say!
I was doing a cursory glance through my email on my Treo this morning to see if there was anything urgent to attend to, when I was surprised by a comment that "everyone is saying that real estate is about to take a major plunge downwards." (Of course, a few paragraphs earlier the writer had started a thought by saying "Don't you just wonder sometimes where people get their ideas?" Don't you just love irony?!?)
I sent a reply pointing out that, actually, not everyone is saying that, and linked to a CMHC publication last month that the Canadian market is moving to a balanced market from a sellers' market. (Not ideal for buyers, but better.) But the bigger point is that it is dangerous to listen to "everyone thinks" or "didn't you know..." type thinking. There is an article on this point in the April issue of my newsletter. If you would like a copy, let me know (no charge, no obligation; available in hard or soft copy).
I sent a reply pointing out that, actually, not everyone is saying that, and linked to a CMHC publication last month that the Canadian market is moving to a balanced market from a sellers' market. (Not ideal for buyers, but better.) But the bigger point is that it is dangerous to listen to "everyone thinks" or "didn't you know..." type thinking. There is an article on this point in the April issue of my newsletter. If you would like a copy, let me know (no charge, no obligation; available in hard or soft copy).
Friday, April 4, 2008
All in the family
While I am collecting some information for a new posting on the variable mortgage outlook here in the GTA, I came across a posting on Slate that called out to be linked to. If you've wondered how companies were trying to dig themselves out from under in the U.S. mortgage crisis, take a look at http://www.slate.com/id/2188248/
It's a wonder they aren't the real estate agent as well.
It's a wonder they aren't the real estate agent as well.
Monday, March 10, 2008
The interest rate gap
The day after the bank rate was reset last week, there was a paragraph in the Globe and Mail's story that jumped off the page at me. "For consumers, the most tangible result is fixed-rate mortgages are not dropping as fast as central bank rates. Mortgage broker ... reckons he will be able to find a variable-rate mortgage at about 4.75 per cent compared with a fixed-rate five-year mortgage of about 5.84 per cent. The spread, now almost a full percentage point, used to be only a quarter or a half point." (The original article is at http://www.theglobeandmail.com/servlet/story/LAC.20080305.RATES05/TPStory/?query=bank+rate+AND+mortgage)
Why should you as a home-owner subsidize the losses the banks have taken due to the credit crisis south of the border. The spread, when it was a quarter point probably made a variable rate a better deal for many people; at 1.09 points (using the numbers in the newspaper story; 'your mileage may vary,' since the rate for either a variable or fixed mortgage will depend upon your credit rating, etc.), why would people go for the fixed rate?
Just wondering.
(Oh, and if you have the chance, check out http://www.RussSkinnerFinancing.com
Why should you as a home-owner subsidize the losses the banks have taken due to the credit crisis south of the border. The spread, when it was a quarter point probably made a variable rate a better deal for many people; at 1.09 points (using the numbers in the newspaper story; 'your mileage may vary,' since the rate for either a variable or fixed mortgage will depend upon your credit rating, etc.), why would people go for the fixed rate?
Just wondering.
(Oh, and if you have the chance, check out http://www.RussSkinnerFinancing.com
Strategies if you have a variable rate mortgage
A number of months ago, a friend was undecided as to whether to go fixed or variable on the mortgage on the new house he was buying. Most of the homeowners he knew were advising him to go fixed, so he really paid attention when I suggested that he go variable. (And this was advice friend to friend -- he had already arranged to place his mortgage through his bank, and I was just giving advice, not acting as a mortgage agent here.)
As the rates changed a few times in the intermittent months, he had second thoughts, but did go ahead with the variable rate option. When the bank rate went down half-a-percentage point last week, he said excitedly, "Should I fix my rate now?" I said that the experts were predicting a further decline, of at least 25 basis point (another quarter of a percentage point) decline in the bank rate the next time it is re-set, April 22nd.
What will I suggest to him (and clients) who approach me at that time for advice. First I will point out how much of his principal he has been able to pay by having had a variable rate mortgage up to now. If he wants to convert, I will suggest that he leave the payment where it has been (typically, a variable rate payment is set at the 5-year fixed rate). The reason for this is that if he has been comfortable with that payment, he might as well keep paying the extra every month, without affecting his prepayment privileges.
What is right for you might very well be different. (Switch to commercial mode:) That's why you should consult a mortgage professional to look at your circumstances. (End of commercial mode.)
If you have any questions about this, let me know.
Russ Skinner
http://www.RussSkinnerFinancing.com/
As the rates changed a few times in the intermittent months, he had second thoughts, but did go ahead with the variable rate option. When the bank rate went down half-a-percentage point last week, he said excitedly, "Should I fix my rate now?" I said that the experts were predicting a further decline, of at least 25 basis point (another quarter of a percentage point) decline in the bank rate the next time it is re-set, April 22nd.
What will I suggest to him (and clients) who approach me at that time for advice. First I will point out how much of his principal he has been able to pay by having had a variable rate mortgage up to now. If he wants to convert, I will suggest that he leave the payment where it has been (typically, a variable rate payment is set at the 5-year fixed rate). The reason for this is that if he has been comfortable with that payment, he might as well keep paying the extra every month, without affecting his prepayment privileges.
What is right for you might very well be different. (Switch to commercial mode:) That's why you should consult a mortgage professional to look at your circumstances. (End of commercial mode.)
If you have any questions about this, let me know.
Russ Skinner
http://www.RussSkinnerFinancing.com/
Sunday, November 25, 2007
Welcome
For a number of years, I worked for real estate lawyers, and was frequently appalled at the mis-match between what I knew was available in the mortgage market, and what the consumers were putting up with. When I had a chance, I got to do some creative "leveraging" on behalf of clients, but those opportunities were few and far between.
In conversations with colleagues, we frequently commented on why it was that even people who had been home owners for years seemed to accept whatever the banks offered them.
After a hiatus of a few years, during which I was a pastor and counsellor, I now have the opportunity of helping people with their mortgages. I've seen what 'wrong' mortgages look like, and the consequences this can have on families.
Part of what I think needs to be done is some education -- there are a lot of misconceptions out there. I want this to be a two-way conversation -- rather than just pontificating on what I think is important, I would like to hear what you as the readers are interested in finding out about. (Beyond, "what interest rate can you get me?")
I hope this blog is mutually beneficial.
Russ Skinner
gta_mortgage_centre@rogers.com
In conversations with colleagues, we frequently commented on why it was that even people who had been home owners for years seemed to accept whatever the banks offered them.
After a hiatus of a few years, during which I was a pastor and counsellor, I now have the opportunity of helping people with their mortgages. I've seen what 'wrong' mortgages look like, and the consequences this can have on families.
Part of what I think needs to be done is some education -- there are a lot of misconceptions out there. I want this to be a two-way conversation -- rather than just pontificating on what I think is important, I would like to hear what you as the readers are interested in finding out about. (Beyond, "what interest rate can you get me?")
I hope this blog is mutually beneficial.
Russ Skinner
gta_mortgage_centre@rogers.com
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