I just read this article at:
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/01/top-10-effects-of-the-new-mortgage-rules.html
Very interesting predictions, indeed. The most interesting, and likely, in my opinion are these two:
1) A small portion of home buyers will sprint to buy homes with a 35-year amortization before March 18, followed by downward pressure on home prices after March 18 as the amortization reduction removes market liquidity
2) If amortization restrictions accelerate falling home prices, we’ll see somewhat greater default risk and more negative equity situations among low-equity homeowners
The bottom line for most people deciding whether or not now is the right time to buy or sell is their life situation. People with job transfers, experiencing divorce, with a growing family, or who are empty-nesters, will buy and/or sell without worrying about what the market is doing, assuming that they have the ability to do so. The mortgage qualifying changes may reduce the ability of a portion of the population to buy, which could have a negative effect on prices.
If you need help in analyzing current market trends, in order to help you with your decision to buy or sell, please give me a call. I'd be happy to help!
Tuesday, January 25, 2011
Wednesday, January 19, 2011
What's Affecting Your Credit Score?
I just read this article at:
http://www.financialpost.com/personal-finance/What+affecting+your+credit+score/4126038/story.html
It isn't something that most people think about very often, but it becomes very important when you are applying for a mortgage on a house. There are a number of factors that affect your credit score, not just whether or not you generally pay your bills in full and on time.
I am not a financial advisor, and it could be misinformation, but I actually also heard recently that even if you pay your bills on the due date, your credit score wouldn't be as good as it would be if you paid it as soon as you receive it.
As the article explains, having too many credit cards can be a bad thing, but having too few can also be bad:
"Your utilization of credit is also a major factor — that’s your balance divided by available credit. It’s not based on whether you have a balance at the end of the month but it’s the balance outstanding at a given moment divided by your available credit.
“If that number exceeds 40%, that is typically a warning sign,” says Mr. Reid, noting a higher credit limit will keep that percentage down.
The last factors are longer term credit history and the breadth of your credit, somebody who has just one credit card doesn’t look as strong as someone who also has a line of credit and say a mortgage." click the link to see the whole article by Garry Marr, Financial Post · Tuesday, Jan. 18, 2011. (Read more: http://www.financialpost.com/personal-finance/What+affecting+your+credit+score/4126038/story.html#ixzz1C642R7KB.)
http://www.financialpost.com/personal-finance/What+affecting+your+credit+score/4126038/story.html
It isn't something that most people think about very often, but it becomes very important when you are applying for a mortgage on a house. There are a number of factors that affect your credit score, not just whether or not you generally pay your bills in full and on time.
I am not a financial advisor, and it could be misinformation, but I actually also heard recently that even if you pay your bills on the due date, your credit score wouldn't be as good as it would be if you paid it as soon as you receive it.
As the article explains, having too many credit cards can be a bad thing, but having too few can also be bad:
"Your utilization of credit is also a major factor — that’s your balance divided by available credit. It’s not based on whether you have a balance at the end of the month but it’s the balance outstanding at a given moment divided by your available credit.
“If that number exceeds 40%, that is typically a warning sign,” says Mr. Reid, noting a higher credit limit will keep that percentage down.
The last factors are longer term credit history and the breadth of your credit, somebody who has just one credit card doesn’t look as strong as someone who also has a line of credit and say a mortgage." click the link to see the whole article by Garry Marr, Financial Post · Tuesday, Jan. 18, 2011. (Read more: http://www.financialpost.com/personal-finance/What+affecting+your+credit+score/4126038/story.html#ixzz1C642R7KB.)
Tuesday, January 18, 2011
Changes Made To Ensure Long-Term Stability of Canada’s Housing Market
On January 17, 2011, the Honourable Jim Flaherty, Minister of Finance, and the Honourable Christian Paradis, Minister of Natural Resources, announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada’s housing market.
“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” said Minister Flaherty. “The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”
“The economy continues to be our Government’s top priority,” continued Minister Paradis. “Our Government will continue to take the necessary actions to ensure stability and economic certainty in Canada’s housing market.”
The new measures:
Reduce the maximum amortization period to 30 years from 35 years for new government- backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.
Our Government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.
The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.
In order for a person to be able to obtain a 35-year amortization, they would have had to have been prequalified with a lender prior to the announcement and they will have to have a firm (non-subject) offer in place on a home, with a lending comittment in hand by March 17th, 2011.
“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” said Minister Flaherty. “The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”
“The economy continues to be our Government’s top priority,” continued Minister Paradis. “Our Government will continue to take the necessary actions to ensure stability and economic certainty in Canada’s housing market.”
The new measures:
Reduce the maximum amortization period to 30 years from 35 years for new government- backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.
Our Government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.
The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.
In order for a person to be able to obtain a 35-year amortization, they would have had to have been prequalified with a lender prior to the announcement and they will have to have a firm (non-subject) offer in place on a home, with a lending comittment in hand by March 17th, 2011.
Friday, December 31, 2010
Top Ten Home Staging Ideas
For many homeowners, the concept of professional home staging is shedding new light on how to promote a home in their real estate marketplace. If you’re thinking of selling your home, deciding on the best ways to organize your property before the “For Sale” sign is erected can help sell your home. Following are some tips that may help you sell your home faster and at a higher price.
1. Make a great first impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. Declutter. A common phrase used to describe the importance of decluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eavestroughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
It used to be a good idea to stage a home. It set your home apart from the majority of other homes on the market which were not staged. Nowadays, with all the magazines and television programs aimed at this industry, it is almost a necessity.
I would be happy to help walk through your Mission or Abbotsford home to give you specific hints to prepare for helping you get it sold for the most money in the shortest time!
1. Make a great first impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. Declutter. A common phrase used to describe the importance of decluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eavestroughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
It used to be a good idea to stage a home. It set your home apart from the majority of other homes on the market which were not staged. Nowadays, with all the magazines and television programs aimed at this industry, it is almost a necessity.
I would be happy to help walk through your Mission or Abbotsford home to give you specific hints to prepare for helping you get it sold for the most money in the shortest time!
Thursday, December 30, 2010
BCREA Mortgage Rate Forecast
The unexpected rise in yields prompted a fairly dramatic re-pricing of mortgages in November. After falling to an all-time low of 5.19%, the 5-year mortgage rate has leapt 25bps to 5.44% while the 1-year rate increased from 3.20% to 3.35%.
Heightened volatility in bond markets could mean a re-testing of mortgage rates lows, particularly if a deepening Euro-crisis prompts a flight to safety in US and Canadian treasuries.
A more likely outcome is that mortgage rates will stay flat for the next quarter as investors re-evaluate growth and inflation expectations in the context of a QE2 world. Our expectation for 2011 is that rates will begin a slow march upwards, hovering slightly higher than current levels for the first half of 2011. Rates will then be prompted higher by expectations of renewed, but cautious, rate tightening by the Bank of Canada in the second half of next year.
The BCREA forecast for the 1-year mortgage rate to average 3.3% in 4th quarter of 2010 and to reach 4.4% by the end of 2011. The 5-year fixed mortgage rate will average 5.30% for the 4th quarter of 2010 before increasing to 5.90% in 2011.
For the full report, go to: http://www.bcrea.bc.ca/economics/forecasts/MortgageRateForecast.pdf
Heightened volatility in bond markets could mean a re-testing of mortgage rates lows, particularly if a deepening Euro-crisis prompts a flight to safety in US and Canadian treasuries.
A more likely outcome is that mortgage rates will stay flat for the next quarter as investors re-evaluate growth and inflation expectations in the context of a QE2 world. Our expectation for 2011 is that rates will begin a slow march upwards, hovering slightly higher than current levels for the first half of 2011. Rates will then be prompted higher by expectations of renewed, but cautious, rate tightening by the Bank of Canada in the second half of next year.
The BCREA forecast for the 1-year mortgage rate to average 3.3% in 4th quarter of 2010 and to reach 4.4% by the end of 2011. The 5-year fixed mortgage rate will average 5.30% for the 4th quarter of 2010 before increasing to 5.90% in 2011.
For the full report, go to: http://www.bcrea.bc.ca/economics/forecasts/MortgageRateForecast.pdf
Sunday, August 15, 2010
10 Worst First-time Homebuyer Mistakes
According to a recent story in the Globe and Mail, (the full article can be viewed at:
http://www.theglobeandmail.com/globe-investor/personal-finance/10-worst-first-time-homebuyer-mistakes/article1647390/), there are 10 things a first-time buyer should avoid to maximize their success:
10) Not thinking about the future
9) Not choosing to hire a REALTOR®
8) Neglecting to inspect
7) Compromising on the important things
6) Being swept away
5) Lacking vision
4) Being too picky
3) Failing to consider additional expenses
2) Skipping mortgage qualification
and #1 - Not knowing what you can Afford
While it's good to familiarize yourself with Real estate procedures and tips, working with a professional Realtor® can help you to maximize your chances of success on your purchase. I can guide you through the process to make sure no important steps or information are missed. My specialty is helping buyers and sellers in Mission and Abbotsford save money and make educated decisions based on their wants and needs, combined with the current state of the local market.
Just as doctors know medicine, accountants know taxes, and mechanics know engines, REALTORS® know real estate. Your purchase or sale of homes and property is most likely to be successful with professional help.
http://www.theglobeandmail.com/globe-investor/personal-finance/10-worst-first-time-homebuyer-mistakes/article1647390/), there are 10 things a first-time buyer should avoid to maximize their success:
10) Not thinking about the future
9) Not choosing to hire a REALTOR®
8) Neglecting to inspect
7) Compromising on the important things
6) Being swept away
5) Lacking vision
4) Being too picky
3) Failing to consider additional expenses
2) Skipping mortgage qualification
and #1 - Not knowing what you can Afford
While it's good to familiarize yourself with Real estate procedures and tips, working with a professional Realtor® can help you to maximize your chances of success on your purchase. I can guide you through the process to make sure no important steps or information are missed. My specialty is helping buyers and sellers in Mission and Abbotsford save money and make educated decisions based on their wants and needs, combined with the current state of the local market.
Just as doctors know medicine, accountants know taxes, and mechanics know engines, REALTORS® know real estate. Your purchase or sale of homes and property is most likely to be successful with professional help.
Saturday, August 7, 2010
Buyers on the Beach?
We have had a beautiful summer so far. Based on market data, it seems that many people are getting out and enjoying it, rather than looking at MLS listings and going to view homes with their REALTORS®.
July 2010 sales in the Fraser Valley Real Estate Board (FVREB) area were the lowest July sales recorded in the past decade. Besides the weather enticing buyers away, the slow July in real estate sales is probably also due to a combination of other factors. Misunderstanding and fears about the newly adopted HST, combined with recent interest rate hikes, as well as tightening in April of mortgage lending requirements are my main suspects for the activity slow-down.
Thankfully, for those of us living in Mission, our beautiful District did not fair as badly as some other areas in the FVREB. Year-over-year, Mission's sales of residential detached (RED) homes were only down 33.3% compared to -47.3% in the FVREB. Comparing sales of RED homes in June 2010 vs. July 2010, the FVREB showed -39.3% compared to Mission's -27.6%.
Mission homeowners will be happiest with the benchmark pricing stats. The housing price index of a benchmark RED home in the FVREB declined 1.5%, while in Mission we actually registered a month-over month gain of 1.8%.
Large differences in sales trends often occur in the various areas of the FVREB. It is therefore very important to enlist the help of a local REALTOR®, who understands the area's current market trends, when you are considering the sale or purchase of a home. It is with the help and expertise of a Mission area real estate expert, like myself, that you will ensure a successful real estate transaction on the purchase or sale of a Mission property.
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