Quarterly Housing and Mortgage Market Update from Mortgage First

Harsh winter conditions created a very modest rebound in the spring and summer, but the Canadian economy overall is in a very slow moving mode, creating a significant misbalance in earnings that public makes and real estate price growth. Overall, the last 10 years have shown significant growth in real estate in Major Canadian markets and in Ontario, fueling the mortgage industry and banks balance sheets, and ultimately keeping mortgage rates low.
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Low Down Payment and Zero Down Payment Commercial Mortgages Pros and Cons

This article is a continuation of the series of articles about commercial mortgage offerings on the market in Ontario, and how our company can help our clients secure the most reasonable and efficient commercial mortgage solutions available.
As previously discussed, a general rule of thumb is 35% down for commercial mortgages in liquid areas in Ontario and up to 50% down for rural and less liquid areas in Ontario. We mentioned that there are certain products and circumstances where such requirement could be much smaller than 35% down in liquid areas.

In this article we will discuss several possibilities where down payment requirement is much less than 35% down, and in some cases could be as little as zero down.
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Mortgages for the self-employed

In today’s real estate market, it is not a secret that with the passing of B-20, in 2012, self-employed mortgages became very difficult or next to impossible. The major reason behind this, is that self-employed individuals are fully in charge of their own financing’s, and most people write off their own expenses prior to paying taxes on the net income derived by their accountants. This creates a very grey area of finance for self-employed people, and since a very small percentage of these individuals report significant income, government of Canada decided to award this segment of business with tough rules when it comes to qualifying for a mortgage. The reasoning behind such a rule was – “to avoid speculation and overheating of Canadian real estate market.” As we can see, the market is still very speculative and continues to overheat, but people owing their own business now almost always, in many cases have no chances of qualifying for a mortgage at conventional bank.

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Commercial Mortgages and Minimum Down Payment Requirements for Different Assets and Usage

 

We continue this series of articles in regard to commercial and non-orthodox lending options that our firm offers to our commercial clients, in an effort to further educate our customers. Many potential clients who come to us for commercial and private mortgage solutions are often confused in regards to what the minimum down payment requirement is from institutional and private lenders. Commercial properties are completely different from residential ones, and are therefore financed differently as well.  In order to clarify and simplify many of the questions our clients have, we will go over several major methods of thinking that banks and private lenders employ when ever a file is analyzed and underwritten.
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A Look at Our Current Economy and Its Impact on the Mortgage Market

In the past two quarters of 2014, the US economy has drastically outperformed what many major analysts believed it would. However, the first quarter of the year still delivered some rather unimpressive statistics in the US. Some experts believe that the slow down during the quarter was related to the infamously harsh winter the US experienced. Severe winter weather such as this has been known to cool down the American consumer. This, paired with the end of unemployment benefits in the US and some federal tax credits caused issues with the US economy, came together to have a negative impact on the economy. The inventory build up in the retail sector of the US over the last two quarters of 2013 also impacted the issue. Paired with slow liquidation of inventory, new purchase lending was slowed down tremendously.

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Canadian Mortgage Rate Forecast and Analysis, based on Latest CMHC Outlook.

Based on recent report of CMHC – Canadian Mortgage and Housing Corporation – it is expected that fixed rates will be increased in 2014, while variable rates are expected to be at par for the duration of the year. Overall CMHC noted that rates still should be at the historically lowest levels, therefore allowing us the brokers and also our clients and investor community to have at least a bit of relief in 2014.

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Housing Market Analysis in January, and Interest Rate Analysis

January brought 60,850 new housing starts in comparison with 61,071 starts in December, according to Canada Mortgage and Housing Corporation (CMHC). This is mostly related to the weather and seasonal fluctuations, although the fact that difference between December and January is so small knowing how harsh some of the Ontario regions were hit with snow and ice, should support the upwards trend in the starts, and during the latest CMHC report crown corporation supports this logics. Overall this winter is considered by many as one of the harshest winters Ontario saw over last 10 years, the temperatures plummeted to -10, reaching as low as -30 with wind-chill, the amount of snow is mind blowing as roads in Toronto as covered with up to 2 meters banks of snow. Nevertheless the market is moving and showing signs of strengthening.
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Why Use A Mortgage Broker?

Buying her first house and getting her first mortgage was an overwhelming experience for Roslyn Judd.

She had signed a deal to buy a new house, she had put down her deposit, and she was pre-approved for a mortgage. Now she had to sign a final deal with her bank to lend her hundreds of thousands of dollars.

“I had never applied for a mortgage before and I found that [to be]the most intimidating part of the home-buying process, so I was procrastinating,” she says. “I think it was the enormity of the money that you are asking somebody to lend you.

Rona Birenbaum, a certified financial planner  in Toronto, recommends all her clients seek the help of a mortgage broker when it comes time to buy a house, or refinance or renew a mortgage.
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Securing A Mortgage: Tips For The Self-Employed

Like over 20% of Canadians, Sara is self-employed. She works as a graphic designer in a busy city in Ontario. Although she has been in business for nearly two years and she is making more money than she’s ever made before, her bank won’t give her a mortgage. And she’s not alone. When Sara asked her friends and family, they agreed that a mortgage while self employed could be extremely difficult task. Even though they have excellent credit scores and money in the bank, it would seem that many of the major financial institutions shy away from lending to self-employed individuals. Provided she meets the criteria, it is possible for Sara to get a mortgage. Here’s how:
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Will The Housing Boom Go Bust?

There are two sides to every story; the one about Canada’s housing bubble is no different.

According to Arizona-based accountant Ben Jones, Canadians should be worried about the housing market going bust. This isn’t the first time he’s made a prediction that others scoffed at. The first time was in December 2004, when he raised concerns about the vulnerability of the US housing market. If they were laughing then, they certainly aren’t now.

At that time, Jones continued to post reports about plummeting home prices from around the world – in China, Australia, the US, Canada, Japan and Europe – even though no one really believed his cries. Jones is still “uncovering signs that the real-estate mania is far from over,” says the Globe and Mail, but the focus seems to have shifted on to Canada.
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