August 2018 - Latest Update

Mortgage Lending Solutions

Getting access to cheap money in our current lending environment is not easy and lenders today often look for reasons not to do a deal.  This can be very frustrating and can often lead to lengthy delays and expenses.  With interest rates on the rise, it becomes even more important to consider your options. Below is a quick review of the many ways to borrow the funds you need and save money and time.

Prime rate mortgages:  Banks, Credit Unions and Monolines dominate this category.  All of these lenders can offer different rates at different times and it can often mean a difference of up to 70 basis points in the rate.  This can make a huge difference in the cost of interest.  Many of these lenders sell the benefits of their products, but at the end of the day, it money in your pocket that matters.  Banks will never tell you about another lender’s rates; unless it’s worse than theirs, but mortgage brokers will do so.  Prime rate mortgage have also become more complicated with the new lending rules.  An insured mortgage, high ratio mortgage and conventional mortgages are all offered at different rates.  It’s hard to believe, but someone buying a home with 10% down payment can secure a better rate than someone putting 35% down.   

Line of credit mortgages:  Currently the prime lending rate charged by most lenders is 3.70%.  Your mortgage line of credit rate is set based on the prime rate and many clients are being charged as high at 4.70% (Prime plus 1%).  Lines of credits can offer lots of great benefits, but when you compare this to a variable rate which is being offered as low as 2.70% and the rate savings is very obvious.  

Alternative mortgages:  These mortgages normally fall into two categories of Subprime and Private financing. 

• Subprime mortgages are offered by lenders other than the banks and credit unions.  They usually require significant paperwork; have a rate much higher than prime lenders and fees are normally applied. They can be slow and tedious to complete. They are usually a good solution for borrowers with tainted credit history or business for self-clients requiring flexible income verification.    
• Private financing can be done with minimal questions and paperwork. You can obtain a commitment within 24 hours and are quick to complete.  Rates are higher than the subprime deals, but not much greater.  In some cases you can access up to 95% of the properties equity. 

Rate update:  The Bank of Canada will announce rates again on Sept 5th and they are expected to increase rates.  Customers should now consider locking into a fixed rate.  

• Variable rate (uninsured): 3.20%
• Variable rate (insured): 2.70%
• 5 year fixed rate (uninsured): 3.64%
•  5 year fixed rate (insured): 3.34%

July 2018 - Real Estate Update

Is It Time For Caution?

On Wednesday the Bank of Canada raised its overnight rate by .25% and the banks have followed by increasing the prime lending rate to 3.70%. It now takes nearly 90% of pretax income to own a home in Greater Vancouver and the mortgage rate increases will only make it worse. 

Lending remains very constrained and if your taxable income is less than $100k per annum, you will find it very difficult to purchase any type of property in Greater Vancouver with a prime rate mortgage. Higher interest rates, Increasing taxes and the high cost of property does not bode well for the real estate market.  June sales decreased almost 38% over the same period last year.  Buyers now have more choice with a 40% increase in the amount of properties listed for sale compared to same period last year.  I believe it is time to be cautious with spending and refrain from listing your home for sale unless you need to sell it. 

Although the prime lending rate has increased to 3.70%, mortgage rates are still attractive.   Some lenders are offering Variable rates as low as 2.70% and a 5 year fixed at 3.34%.  Did you know that you now can get a variable rate mortgage with an option of ‘interest only’ monthly payments?  

May 2018 - Real Estate Update

Mortgage rules take a bite. 

It appears the new mortgage rules introduced at the beginning of the year is having the intended impact on housing.  Last month home sales have declined by over twenty seven percent and listings have increased by near the same amount from same month last year.  CMHC also says the annual pace of housing starts in April was lower compared to the previous month.  “The seasonally adjusted annual rate of new home construction, which is seen as a measure of the health of the housing market, fell to 214,379 units in April compared with 225,459 in March.” 

Home prices have been resilient and prices continue to be higher over the same period last year, even more so for condos and townhomes which has been the darling of our market.  Unfortunately prices often lag and we could see softening very soon. On top of this, mortgage interest rates have also increased making it yet again more difficult for buyers and borrowers.  I think it is safe to say that market conditions are changing and homeowners need to be ready to adjust their selling strategies if they are planning to sell anytime soon. 

The good news in all of this is that buyers will have more opportunities to find the right home.  And although mortgage lending is currently very constrained, there are still great deals to be had.  Variable rate mortgages are being offered as low as Prime minus 1% and a five year fixed rate can be offered as low as 3.34%.  For the past few years many borrowers were not given the choice and had to settle for a 5 year fixed rate.  Now if borrowers qualify for a 5 year fixed, they qualify for the other product choices such as 2 or 3 year terms and variable rate mortgages.  

A huge bulk of mortgages across the province and country will be coming up for renewal this year.  Borrowers often make choices based on fear and I caution you not to be fooled into accepting a high fixed term rate.  Talk to an experienced mortgage broker.  We can help guide you to the right solution. Click here to contact us.

March 2018 - Real Estate Update

Spring Is Here!

The new mortgage rules have now been in place for only a few months and it’s already impacted housing across the country.  Canada’s national average home price was down 5 percent and sales volume was down 17 percent in February from a year earlier.  There was also near a 7 percent decline in the amount of transactions between January and February this year.  This is the second month-over-month decline and the lowest reading in nearly five years. 

The number of sales in BC has also plummeted since new federal mortgage rules took effect at the beginning of the year, however; it did not stop prices from rising.  Average prices were up almost 9 percent in February from a year earlier.  Sales of condominiums were impacted far less. The average price of a condo in Greater Vancouver rose over 27 percent from February last year.  It may only be a matter of time before the prices of condos moderates but don’t hold your breath as the average prices rose almost 3 percent from the beginning of the year.

Mortgage Rate Updates

Mortgage rates have remained primarily stable over the past few months and the Bank of Canada meets again to set the rate on April 18th.   I’m predicting the bank will not make any change to the rate.  In fact we may see some downward pressure on mortgage rates.  The uncertainty of trade relations, the impact of the new mortgage rules and the introduction of new housing policies have taken the steam out of rising rates.  That being said, the US Fed raised rates on Wednesday and signals that more hikes are coming this year. 

Qualifying today for a prime rate mortgage from a bank has never been harder but some of our lenders have relaxed lending criteria which can really make a difference in getting that approval.  If your bank said ‘no’, then give me a click: tony@tonyiannetti.ca

It’s of no surprise, but the demand for private money has increased significantly over the past year.  Rates for 2nd mortgages can be as low as 8.45% with only an appraisal being required.  Taking a 2nd mortgage may be the ideal solution to access equity because it will allow you to preserve and keep the existing 1st mortgage in place.   Have a question or need a rate quote: click here: tony@tonyiannetti.ca

Some best rates to mention:

• 5 year fixed – insured: 3.34%
• 5 year variable – insured: 2.50% (Prime - .95%)
• 5 year fixed – conventional: 3.59%
• 5 year variable – conventional: 2.90% (Prime -.55%)

February 2018 - Real Estate Update

It’s all about condos

There’s no lack of news on our local real estate markets and as much as there is some softness in certain market places, it’s the condo market that remains ‘on fire’. Buyers looking to purchase a modest priced condo are challenged with competing in multiple cash offers. This is not new news to any of us living in lower mainland but it’s a trend that seems to defy gravity. 

Some noteworthy stats to mention:

• Downtown condo prices are up 40% since January 2017.
• Port Coquitlam condo prices are up 25% since January 2017
• South Surrey/White Rock detached home prices are DOWN 13% since January 2017
• Cloverdale detached home prices are up 25% since January 2017

The rate environment is changing

Most borrowers are now aware of the changes in the mortgage world. Our government once again introduced new rules designed to make it harder to qualify for bank type mortgages.  On top of this fixed mortgage rates have increased along with a recent increase in the bank rate.  Many clients now require financing solutions outside of a qualified bank mortgage. I have plenty of private lenders looking to lend and help you get the money you need regardless of the reason. 

Best qualified rates:

• 5 year fixed: 3.25%*
• 5 year variable:  2.50%*

Certain conditions apply.

September 2017 - Real Estate Updates

Prepare for more tightening
 

The Government is expecting to once again tighten mortgage lending rules with one of the biggest changes yet.  The Office of the Superintendent of Financial Institutions plans to mandate that banks will have to qualify borrowers using a new stress test.  Borrowers will have to qualify based on a rate two hundred basis points higher than their contracted rate.  A similar change occurred last year but it only applied to ‘insured mortgages’ and it negatively affected millions of people.   On top of this, fixed and variable mortgage rates have increased.   It will likely be very difficult for many borrowers to access prime rates and/or borrow money in the near future.   I cannot stress enough how important it is for customers to review their debt position and act now to refinance or purchase before it’s too late.  Even if you don’t need money, then consider setting up a line of credit for when you do need money. 

Current rates:

-        Best 5 year fixed 3.24% (non-insured)
-        Best 5 year fixed 3.24% (insured)
-        Best Variable rate at 2.60%
-        Best Line of Credit rate at 3.50%       

Need a rate hold of up to 120 days? Click here.

Featured Property

Coquitlam Condo located near Douglas College, skytrain and Coquitlam center.

More Information

Tony's Latest Updates - June 2017

Mortgage rates ease - June 2017

Mortgage rates have moved slightly lower since my last update. Bank of Canada kept their official interest rate on hold at their last meeting on May 24 citing caution about making any changes to the rate. Economic conditions remain stable but there is elevated concerns about the housing markets especially those of Toronto and Vancouver. Any major deterioration in these markets could be a potential drain of the Nation’s economy. 

At the risk of sounding like a broken record; mortgage clients should be cautious when making decisions about rates. Variable rate mortgages remain the most attractive; however an unforeseen increase to interest rates could increase borrowers’ monthly payments significantly. 

Mortgage lending qualifications are currently very challenging but financing alternatives are available:

-        Income reasonability lending: First mortgage as low as 3.69%
-        Stated Income lending:  First mortgages as low as 5.35%.
-        Equity based lending:  Second mortgages as low as 7.95%
-        Construction and commercial financing of up to 75% LTV

 

Best Mortgage Rates:

-        Best 5 year fixed at 2.44%
-        Best Variable rate at 2.05%
-        Best Line of Credit rate at 3.20%

Need a rate hold of up to 120 days,  click here.

Featured property:   

Condo located in the River District Community. Fully renovated two bedroom condo for sale for $558,800.  Hyperlink:  http://tours.bcfloorplans.com/781449

Tony's Latest Updates - March 2017

No major changes to mortgage rates – for now. 

Mortgage rates have not changed much since my last update. The Bank of Canada kept their official interest rate on hold at their last meeting earlier this month but it was the opposite a few weeks ago in the US where the Feds increased rates. Rising inflation announced recently in the UK could set the stage for them to do the same. It’s not predicted, but Canada could potentially follow the same pattern especially if we continue to experience positive growth in jobs, retail sales and GDP.  An increase in mortgage rates would have a significant impact on housing affordability in Canada especially in the Vancouver and Toronto areas.

Mortgage lending qualifications remain very tight and getting access to cheap money continues to get more challenging. Lenders remain concerned with our real estate prices and many bank executives have expressed concern about a possible real estate bubble. Rising Canadian interest rates would intensify their concerns. 

Mortgage clients should be cautious when making decisions about rates and a fixed rate should be on their radar. Lenders have introduced many rate specials since beginning the Spring market especially for insured mortgage:

• 5 year fixed at 2.59%
• 4.5 year variable at 2.05%

Need a rate hold of up to 120 days,  click here.

Real estate sales have become closer to the averages but have begun to accelerate.

The BC Government continues to tweak real estate policies and recently announced positive changes to the foreign buyer’s tax. Ontario is hinting at changing the Capital Gains tax on real estate sales to deter speculators from flipping. Fingers crossed we don’t see any similar changes in BC. Vancouver and Toronto Real estate continues to be a hot topic and all eyes seem to be on the market conditions as we roll into the spring season. Local condo and townhome sales remain very robust and prices are rising fast. Detached homes are less so but prices are stable.  Stay tuned for further updates as we get further into the year. 

I have more new listings being launched soon. The latest:  Click Here to View Listings

Tony's Latest Update February 2017

Mortgage rates have eased  

Mortgage rates have eased slightly since the start of the year.  The Bank of Canada kept rates on hold at their last meeting citing uncertain times and it’s expected they will do the same when they meet again on March 1st.   Many borrowers are unaware that mortgage lending has tightened and it’s more difficult today than ever to access cheap rates, however; great solutions are still available. 

To mention a few:

-        35 year amortizations with fixed rates under 3%
-        Equity based lending with rates under 6%
-        Flexible underwriting for self-employed borrowers with rates under 4%

I continue to recommend variable rate mortgages.  Not only does the variable option offer the lowest rate it also provides great flexibility and now can be offered as low as 2.10%.

 Need a rate hold of up to 120 days, click here.

Condos are hot

Customers looking to purchase a condo in Metro Vancouver are facing challenging times.  Supply remains constrained and many properties that appear to be available are in fact sold or have an accepted offer.  Prices continue to rise and buyers are often facing competing offers with no conditions.  Preparation is the key to be successful.  Ensure your financing, inspection and other requirements are satisfied prior to making an offer.   For more information on how we can help you with your purchase…click here.

BC Home Partnership Program is now up and running.   The program is designed to help First Time home buyers purchase a home for up to $750,000 by providing up to $37,500 in an interest free loan.  For further details on eligibility and processing, click here.

For the latest real estate report, please click here.

Tony's Latest Updates January 17, 2017

Mortgage rates are higher    

Mortgage rates have ended last year a third higher than the start of the year.  But it’s not as bad as it sounds as many fixed term rates remain under 3%.   Tomorrow the Bank of Canada will announce their overnight rate for the first time this year.   Given Canada’s new mortgage rules and our faltering GDP growth I suspect we will not see any changes.  The next time the Bank of Canada announces rates will be on March 1st and at that time the US will have a new Government underway and this may cause our Government to take more action on interest rates.  At the moment I continue to recommend variable rate mortgages.  Not only does a variable offer the lowest rate; as low as 2.20% but it also provides greater flexibility than a 5 year fixed term.   Need a rate hold of up to 120 days,  click here.

Home sales set new trend

The BC Government introduced multiple policies last year to moderate the real estate market and at least for the short term it seems to be working.  The number of residential home sales for December 2016 decreased nearly 40% versus the same period in 2015.  That being said, property owners still experienced a near 20% price growth on average throughout 2016.   

BC Home Partnership Program for down payment loans begins this week.  The program is designed to help First Time home buyers purchase a home for up to $750,000 by providing up to $37,500 in an interest free loan.  For further details on eligibility and processing, click here.   

The new program may be helpful in providing easy money, but it may also push up prices of certain properties; especially modest strata/apartment type homes.  First time home buyers should act sooner than later to make their first purchase.   

For the latest real estate report, please click here.