Tackle Holiday Debt

General Mitchell Goode 15 Dec

Having to spend the holidays in debt can be emotionally trying. But with help from Mortgage Man, it doesn’t have to be. Did you know you can combine all of your high-interest debt – including debt from credit cards, auto loans and personal lines of credit – into one low-rate mortgage loan? By consolidating debt in a secured loan, backed by the equity in your property, you can access interest rates lower than even a personal line of credit would allow. You can lower your monthly payments, lower your interest rate, improve your credit score, and combine multiple payments into one.

Mitchell Goode

Let’s Get House Hunting

General Mitchell Goode 30 Nov

Let’s Get House Hunting.

Have you ever checked out an open house in the neighborhood, which you had no intention of buying? Or checking out listings online for your dream home? Of course you have! We’ve all looked at houses for fun, even just to examine the possibilities! In reality though, it can actually be quite stressful when you start legitimately house hunting for a place for yourself.

To help minimize the stress, it is important to get past the excitement and narrow down what it is you really need in a home. One way to do this is to consider the long-term; what will you need in a house five or ten years down the road?

Some things to consider when you’re finally ready to pursue a new home, should include:

What type of home you are looking for (single-family dwelling, condo, townhouse). This can be determined by your budget, as well as your needs.
The size of property. Be honest about how much maintenance you’re willing to do.
The location and neighbourhood. Is your commute reasonable? Is the neighbourhood safe? Is it the right level of bustling or peaceful that you’re looking for?
Any special features you might need, such as accessibility upgrades.

Another point of consideration if you are looking for a condo or apartment, is the view. It is important to remember that it is not protected; there is nothing to stop another building from going up and obstructing this. It is not a bad idea to ask your realtor if they know about any current or future developments in the area, or even check out future plans at your local city hall. You’ll also want to make sure you examine all the financial and technical minutes for the condominium corporation to avoid and issues or special assessments in the future.

In a hot housing market, there is a temptation to act quickly and make an offer after one visit. But if you can, take a second look a few days later before making any offer. You would be surprised how much detail you miss in the first showing! You may be living in this home for decades, so an extra 30 minutes to take a second look won’t hurt.

If you do find a home that you really love, we have put together a house hunting checklist to help you evaluate the home! This list includes a few of the major items that you should consider when looking for your dream home and is designed to help you determine what areas may require attention, and whether or not it really fits your needs! Want another copy? Ask your Dominion Lending Centres Mortgage Professional to send you a print ready version for your next showing or open house!

Article From:https://dominionlending.ca/real-estate/lets-get-house-hunting

Budgeting for the Holidays

General Mitchell Goode 29 Nov

Budgeting for the Holidays.

Be mindful with money this season! Along with holiday joy come holiday bills, to avoid a sleigh-size tab, plan ahead to save money and maximize the payoff.

ORDER ONLINE Avoid getting stuck in the hustle and bustle of holiday shoppers by ordering gifts online from your laptop or phone. The time you save can be put towards spending more time with friends and family.

BE THRIFTY Start early and keep an eye out for special sales. Many retailers have Black Friday and Cyber Monday deals to help you get a jumpstart on holiday shopping. Get inspired with coupons and get into the routine of flipping through flyers delivered to your home and online

TRUST YOUR BUDGET It keeps you on track during the rest of the year, so why not lean on it now? Starting the season with a plan and a maximum spending limit will help alleviate stress while shopping. There are plenty of free budget-tracking apps that connect right to your bank accounts and can be pulled out of your pocket for reference at any time – especially when you’re feeling overwhelmed at the mall.

GET CRAFTY Everyone appreciates the handmade touch in a gift, and DIY-ing this holiday can help you save money. There are wonderful options that can be found online, even for beginners. Examples include homemade wreaths, body scrubs, and fun photo scrapbooks that can be done alone or in a group, and you’ll end up with a gift that money can’t buy. If you’re not sure where to find these clever and cost-effective ideas, Pinterest is a great place to start.

GIVE THE GIFT OF TIME Instead of buying gifts, spend quality time with your friends and family while you give back to others. Sharing the experience and splitting the cost of hosting a dinner for a family in need will offset the cost of spending money on each person and double the amount of joy spread during the holidays. It feels good to pay in kind.

HOSTING A PARTY?

Think ahead: Start thinking about your ingredients early and keep an eye out for sales on nonperishable goods. By beating the holiday rush, you can afford more goodies for less.

BE RESOURCEFUL Hosting a large gathering? Ask each of your guests to bring a dish. This costeffective tip will act as conversation starter too.

EARN REWARDS A number of retailers offer cards where you can earn points toward future purchases, including entertainment.

CHOOSE WISELY Your time matters, so spend more of it with your guests and less of it in the kitchen. Pick a short and easy recipe that won’t cost a lot to make. Prepare as much as you can the morning or day before for a smoother hosting experience.

Article From: https://dominionlending.ca/life-style/budgeting-for-the-holidays

Canadian Home Sales Surge In October

General Mitchell Goode 15 Nov

Home Sales Surge in October

Today the Canadian Real Estate Association (CREA) released statistics showing national existing-home sales rose a whopping 8.6% in October, its most robust month-over-month pace since July 2020, when the first lockdown eased briefly. This was on the heels of a modest uptick in September–the first gain since March of this year.Sales were up month-over-month in about three-quarters of all local markets and in all major cities.

The actual (not seasonally adjusted) number of transactions in October 2021 was down 11.5% on a year-over-year basis from the record for that month set last year. That said, it was still the second-highest ever October sales figure by a sizeable margin.

On a year-to-date basis, some 581,275 residential properties traded hands via Canadian MLS® Systems from January to October 2021, surpassing the annual record of 552,423 sales for all of 2020.

“2021 continues to surprise. Sales beat last year’s annual record by about Thanksgiving weekend, so that was always a lock, but I don’t think too many observers would have guessed the monthly trend would be moving up again heading into 2022,” said Shaun Cathcart, CREA’s Senior Economist. “A month with more new listings is what allows for more sales because those listings are mostly all still getting gobbled up; however, with demand that strong, the supply of homes for sale at any given point in time continues to shrink. It is at its lowest point on record right now, which is why it’s not surprising prices are also re-accelerating. We need to build more housing.”

The basic story hasn’t changed, even with the rise in fixed mortgage rates: Housing demand remains well more than supply. Inventories of unsold properties are at historic lows. While the Trudeau government promised to address the massive supply shortage, in reality, housing construction is under the auspices of provincial and local government planning and zoning bodies. Moreover, the resurgence of immigration will widen the excess demand gap for homes to buy or rent.

New Listings

The number of newly listed homes rose by 3.2% in October compared to September, driven by gains in about 70% of local markets. With so many markets starved for supply, it’s not surprising to see sales go up when new listings rise.

As of October, about two-thirds of local markets were seller’s markets based on the sales-to-new listings ratio is more than one standard deviation above its long-term mean. The sales-to-new listings ratio tightened again last month to 79.5% compared to 75.5% in September and 73.5% in August. The long-term average for the national sales-to-new listings ratio is 54.8% (see chart below).

There were just 1.9 months of inventory on a national basis at the end of October 2021, down almost half a month from three months earlier and back in line with the all-time lows recorded in February and March of this year. The long-term average for this measure is more than five months.

Home Prices

In line with some of the tightest market conditions ever recorded, the Aggregate Composite MLS® Home Price Index (MLS® HPI) accelerated to 2.7% on a month-over-month basis in October 2021.

The non-seasonally adjusted Aggregate Composite MLS® HPI was up 23.4% on a year-over-year basis in October, a more significant gain than in the three previous months.

Year-over-year price growth in B.C. has crept back above 20%, though it is lower in Vancouver, on par with the 20% provincial gain in Victoria, and higher in other parts of the province.

Year-over-year price gains are in the mid-to-high single digits in Alberta and Saskatchewan, while they are currently at about 10% in Manitoba.

Ontario saw year-over-year price growth closing in on 30% in October, with GTA surging forward. Greater Montreal’s year-over-year price growth remains at a little over 20%, while Quebec City is now at 13%.

Price growth is running a little above 30% in New Brunswick (a little higher in Greater Moncton, a little lower in Fredericton and Saint John), while Newfoundland and Labrador is now at 10% year-over-year (a bit lower in St. John’s).

Bottom Line

Canada continues to contend with one of the developed world’s most severe housing shortages. As our borders open to a resurgence of immigration, excess demand for housing will mount. The impediments to a rapid rise in housing supply, both for rent and purchase, are primarily in the planning and approvals process at the municipal level. Liberal Party election promises do not address these issues.

Inflation pressures are mounting everywhere. The US just posted a year-over-year inflation rate for October at 6.2%–higher than expected. This Wednesday, Canada’s CPI data will be released. We saw a y/y inflation rate of 4.4% in September. Undoubtedly, the October data will surpass that level. Maybe that is why Tiff Macklem wrote an op-ed in the Financial Times today reiterating that the Bank of Canada is getting closer to raising interest rates as slack in the economy dissipates. This is in line with the hawkish BoC policy statement last month.

“For the policy interest rate, our forward guidance has been clear that we will not raise interest rates until economic slack is absorbed,” Macklem wrote. “We are not there yet, but we are getting closer.”

According to Bloomberg News, Macklem reiterated that the Bank of Canada’s view is still that recent inflationary pressures will ease. Yet, he acknowledged that a high level of uncertainty remains. “Supply disruptions appear to be lasting longer than we thought, and energy price increases are adding to current inflation rates,” he wrote.

“While our analysis continues to indicate that these pressures will ease, we have taken them into account for the dynamics of supply and demand,” Macklem said. “What our resolve does mean is that if we end up being wrong about the persistence of inflationary pressures and how much slack remains in the economy, we will adjust.”

Article From: https://dominionlending.ca/economic-insights/canadian-home-sales-surge-in-october

Renewing Your Mortgage

General Mitchell Goode 9 Nov

Renewing Your Mortgage.

Did you know? Close to 70 percent of mortgages never make it to the end of their term! This means that, for a variety of reasons, homeowners are ending their mortgages early. However, that still leaves a solid 30 percent of home buyers who keep their mortgage until the term is up and it is time to renew!

If you are not planning to move in the near future and are happy with your current mortgage, you are likely one of the 30 percent who will renew once the term ends. So what does this process look like?

When it comes time to renew your mortgage, most lenders will send you a renewal letter when there is around 3 months remaining on your term. While nearly 60 percent of borrowers simply sign and send back their renewal without ever shopping around for a more favourable interest rate, this is actually the best time to check out your options.

Most standard terms are 5-year terms and, with that much time having passed since signing, the market rates could be very different once the term is up! Despite this, lenders tend to provide higher rates on renewals versus new clients as they are hoping that the ease of renewal will prevent you from seeking out new rates. However, shopping around for a better rate is not as difficult as it sounds – especially with the help of a mortgage broker – and it could end up saving you a couple hundred dollars a month (depending on your situation)! Ideally, you should be keeping track of your own mortgage term end date as shopping for a new rate between four and six months before your expiry will ensure you are able to find the most affordable option for you.

After shopping around, you may find that your bank is actually offering a great rate – in which case you can simply submit the renewal! But if you are able to seek out a lower rate, we promise you will thank yourself for putting in the effort to find out! As another point of interest, renewal time is also a great time to make an extra payment on your mortgage, if you are able!

Beyond renewing your mortgage, home owners also have the option to transfer or switch the mortgage. This can be done any time during the term of the mortgage but may have penalties associated with breaking the mortgage before the term is up. Transferring to another lender is generally done to get a better rate, but you will need to go through the entire mortgage process again – including the ‘stress test’ – which makes shopping around at renewal time an even smarter option.

If your mortgage is coming up for renewal and you want to find out what lower rates may await you, contact your local mortgage professional! They can help you find the best option for where you are at in your life now and help you to ensure future financial success.

Article From: https://dominionlending.ca/mortgage-tips/renewing-your-mortgage

What is Title Insurance and Other Questions Answered!

General Mitchell Goode 2 Nov

What is Title Insurance and Other Questions Answered!

Title insurance can easily seem like another unnecessary add-on to the already complicated and costly process of buying a house, but nothing could be further from the truth. It can help speed up the process of closing on your new home, while protecting you and your heirs against a variety of unforeseen and expensive risks. It offers cost-effective, long-term, powerful protection, but there’s a great deal to know about it.

Your notary or lawyer is a fantastic resource to learn about this vital protection for you as a homeowner—we’ve compiled some of the most frequently asked questions they receive:

what is title insurance?

Title insurance is insurance that protects against losses from defects in your title—the legal ownership of your property. These defects can include issues with the property survey, the registration of your land title and problems you didn’t know you inherited from a previous owner, like back taxes or improper renovations. Title defects are unpredictable and expensive, but title insurance lets homeowners protect themselves.

Did you know: title insurance is also important in condos?

are title insurance and home insurance the same thing?

It’s common to confuse home insurance with title insurance, or to assume because you have home insurance, you’re fully protected. But they cover completely separate risks, and even their premiums work differently.

Home insurance deals with your home’s physical structure, and the items inside it. Title insurance deals with your legal ownership of the property, even if it’s an empty lot. Home insurance covers potential future physical damage to the home, or losses to replace stolen insured items. Title insurance covers (apart from future fraud) losses from issues that already existed, but that you didn’t know about.

Here’s a classic example of the difference:

Are you out money because your shed flooded or got broken into? You may be covered by home insurance.
Are you out money because the shed turned out to be on your neighbour’s land (a mistake by the surveyor) and you had to move it? That may be a title insurance claim.

Get a full breakdown of home insurance vs title insurance here.

what does title insurance cover?

Most title insurance policies covers losses from problems that already exist but that you don’t know about.

If the survey for your property wasn’t done correctly, you won’t know until you’re forced to move the shed you unwittingly built on your neighbour’s land.
If the previous owner of your home did renovations without a permit, you won’t know until the city forces you to bring your home up to code.
If the previous owner left taxes on the property unpaid, or there were taxes that weren’t addressed or correctly levied on the property when the deal closed, you won’t know until the government comes looking for those back taxes.

Title insurance may cover your losses in each of these scenarios, and many more. Another notable point of coverage is title fraud—a thief using your identity to borrow money against your home, or even sell it out from under you.

See the damage title fraud can do, and how to protect against it

what doesn’t title insurance cover?

It’s important to remember title insurance coverage often depends on whether or not an issue was known about when you bought the policy. While you can always get owner’s title insurance at any time, it’s best to get your policy as you’re buying the house. That way, any issues you learn about afterward can fall under its umbrella—coverage almost never applies to title defects you knew about before getting the policy. There are some instances where title insurance can still protect you from a known title defect, but it’s important to ask your lawyer or notary.

Title insurance covers the legal existence of your property, not the property itself. The losses it covers will often originate from something physical—moving a shed, bringing your home up to code—but the coverage comes from the title defect that led you to be responsible for the cost, not the issue that incurred the cost.

Here’s a quick example: A couple finds a leak in their roof and has to pay to have it repaired, as well as fixing the water damage the leak caused before it was discovered. Does title insurance apply?

It can, if the previous owner had done work involving that roof without a permit. The covered risk is from the previous owner’s lack of a permit, not the possibility the roof might leak.
If the previous work had a permit, or if the old owner never did work on the roof, title insurance unfortunately can’t cover the losses from repairing it.

The most common coverage confusion we see comes from this perceived grey area between home and title insurance. Just because the builder or previous owner did a shoddy job doesn’t always mean title insurance can cover the losses. When the government makes you bring a previous owner’s build up to code, always verify if the work was properly permitted—if it wasn’t, your next call should be to your title insurer to make a claim.

If your neighbor makes a claim against you, for instance alleging your new garage extension encroaches on their property, the issue title insurance checks for is the property survey, not the garage itself.

See more examples of confusion over coverage here.

is title insurance part of western protocol?

Western Conveyancing Protocol (also called WCP or the Protocol) is a system the law societies in the Western provinces created to help close real estate deals faster. A Protocol closing lets the deal “close” on the closing date, even though the land title registration hasn’t happened yet. The seller can get their money and the buyer can move in without waiting weeks for the title registry.

Title insurance is separate from WCP. It offers all of the same benefits—fast closing, registration gap coverage—with much more protection for the buyer. More notaries and lawyers are relying on title insurance to cover the gaps in WCP coverage and make sure you’re properly protected, especially in hotter markets like Vancouver or Calgary.

Learn more about how title insurance is helping buyers in the new Calgary market.

what is duty to defend?

In title insurance, duty to defend is the requirement that the insurer cover not just their insured’s losses, but any legal fees associated with the case. In Canada, the standard is that duty to defend applies if there is a possibility of a claim succeeding.

This clause shows up in all FCT title insurance policies and means the policy also covers legal fees involved in defending your title. There is no dollar limit to this coverage, and it does not reduce the insurance coverage going forward.

B.C.’s duty to defend standards are notably higher than Ontario’s, allowing outside evidence to play a part in determining whether the duty applies. In Alberta, a blanket duty to defend applies until the cause of an incident—and through that, the type of coverage invoked—is determined.

Title fraud is a great example of where the duty to defend clause shines in protecting policy holders. Beyond the damage to your credit score and ability to leverage equity in your home, title fraud is notoriously expensive to resolve legally. It’s not uncommon for legal fees in the tens of thousands to restore ownership of a title—sometimes more, in cases where the victim’s home has been sold and the (innocent) buyer is intent on protecting their purchase.

Duty to defend kicks in when you incur legal fees as part of resolving an issue where the risk is covered under the policy. In short: if the policy covers you in a particular situation, it also covers the legal fees involved with resolving it.

Learn more about the duty to defend included in every FCT title insurance policy here.

is title insurance mandatory?

Yes and no. There are two types of title insurance policies: one that protects the lender and one that protects the property owner—you. The law doesn’t make either mandatory, but most lenders will require you to buy the lender policy as part of securing your mortgage from them. The owner policy is optional, so it’s important to make sure your notary or lawyer includes an owner’s policy as well when you close on your home.

One more huge point in favour of an owner policy is that it lasts as long as your title does. If you refinance your mortgage with a different lender, they’ll get you to buy a new lender policy, but you’ll never need to buy a new owner policy on the same property—you’re still covered. Always make sure when you’re discussing with your notary or lawyer that you’re talking about an owner’s title insurance policy, and never be afraid to ask questions about it coverage.

Here’s how to check if you have a homeowner title insurance policy.

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

Article From:https://dominionlending.ca/sponsored/what-is-title-insurance-and-other-questions-answered

Hawkish Bank of Canada Decision

General Mitchell Goode 27 Oct

Bank of Canada Responds To Mounting Inflation: Ends QE and Hastens Timing of Rate Hike

The Bank of Canada surprised markets today with a more hawkish stance on inflation and the economy. The Bank released its widely anticipated October Monetary Policy Report (MPR) in which its key messages were:

The Canadian economy has accelerated robustly in the second half.
Labour markets have improved, especially in the hard-to-distance sectors. Despite continuing slack, many businesses can’t find appropriate workers quickly enough to meet demand.
Disruptions to global supply chains have worsened, limiting production and leading to both higher costs and higher prices.
The output gap is narrower than projected in July. The Bank now expects slack to be absorbed in Q2 or Q3 of next year, one quarter sooner than earlier projected.
Given persistent supply constraints and the increase in energy prices, the Bank expects inflation to stay above the control range for longer than previously anticipated before easing back to close to the 2 percent target by late 2022.
The Bank views the risks around this inflation outlook as roughly balanced.

In response to the Bank’s revised view, it announced that it is ending quantitative easing, shifting to the reinvestment phase, during which it will purchase Government of Canada bonds solely to replace maturing bonds. The Bank now owns about 45% of all outstanding GoC bonds.

The Bank today held its target for the overnight rate at the effective lower bound of 1/4 percent. While this was widely expected, the Bank adjusted its forward guidance. It moved up its guidance for the first hike in the overnight rate target by three months, from the second half of 2022 to the middle quarters–sometime between April and September.

Canadian bond traders had already bet a rate hike would occur in Q1 or Q2. Nevertheless, bond yields spiked at 10 AM today when the Bank released its policy decision (see chart below).

Bottom LineSince the Bank last met in early September, the Government of Canada five-year bond yield has spiked from .80% by a whopping 60 basis points to a 1.40%. That is an incredible 75% rise. A year ago, the five-year bond yield was only .37%.

The Bank believes the surge in inflation is transitory, but that does not mean it will be brief. CPI inflation was 4.4% y/y in September and is expected to rise and average around 4.75% over the remainder of this year. Macklem now believes inflation will remain above the Bank’s 1%-to-3% target band until late next year.

There is also a good deal of uncertainty about the size of the slack in the economy. This is always hard to measure, especially now when unemployment remains elevated at 6.9%, while sectors such as restaurants and retail are fraught with labour shortages. Structural changes in the labour force are afoot. Many former restaurant employees have moved on or are reluctant to return to jobs where virus contagion risks and poor working conditions. There was also a surge in early retirements during the pandemic and a dearth of new immigrants.

Concerning housing, the MPR says the following: “Housing market activity is anticipated to remain elevated over 2022 and 2023 after having moderated from recent record-high levels. Increased immigration, solid income levels and favourable financing conditions will support ongoing strength. New construction will add to the supply of houses and should help soften house price growth”.

Article From: https://dominionlending.ca/economic-insights/hawkish-bank-of-canada-decision

Bank of Canada Preview: Rate Hike Expectations Growing

General Mitchell Goode 27 Oct

With inflation well above the Bank of Canada’s target level and ongoing supply chain issues, expectations of earlier-than-expected interest rate hikes in 2022 are growing.

For much of the past year, the Bank of Canada had assured markets that interest rate hikes were off the table for at least the next year or longer. In January, the BoC had said, “We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved…In the Bank’s January projection, this does not happen until into 2023.”

Fast-forward to today, and rate hike expectations are growing by the week, with some seeing the first rate increases by mid-2022.

Scotiabank made headlines last week with its aggressive forecast for four quarter-point rate hikes in 2022, followed by four quarter-point hikes in 2023. That would mean a Bank of Canada target rate of 2.25% by the end of 2023—well above its current level of 0.25%, and higher than any other bank forecast.

No rate hikes are expected when the Bank meets this Wednesday, but all eyes will be on its statement and accompanying Monetary Policy Report for clues of a shifting outlook given the inflation and supply issues mentioned above.

Here’s a look at what some economists expect from the BoC at its Wednesday meeting:

On further winding down of Quantitative Easing (QE):

TD: “This winding down of emergency stimulus isn’t a shock for Canadians. The Bank of Canada has been leading the pack, cutting its government bond purchases over the last year and completely ending programs that were no longer needed (mortgage bond purchases, for example). We expect the Bank to make another reduction in its bond purchases in October and cease all net-new purchases at the beginning of 2022.” (Source)

On rate hike expectations:

BMO: “The interest rate landscape is shifting rapidly amid the sustained strength in a wide variety of inflation measures. Short-term bond yields have bolted higher as inflation has surged to the fastest pace in decades in many economies. Markets are now pricing in almost four rate hikes by the Bank of Canada by the end of 2022, compared with almost nothing just two short months ago.” (Source)
Desjardins: “Without the BoC even blinking, the 5‑year yield, one of the most influential rates in Canada’s financial ecosystem, is up nearly 47 basis points since early September. We expect it to rise by about 30 more basis points by the time the BoC finally hikes rates, meaning tightening is already underway. Which begs the question of why many appear to feel that the BoC should be in a rush.” (Source)

On inflation:

BMO: “Canadian inflation has broadened out from an initial rebound in beaten-down prices (gasoline) and reopening pressures (airfares, hotels), to supply-constrained items (autos, appliances), to homes, and now to food. We now expect headline inflation to average 3.3% both this year and next—in perspective, inflation has not averaged 3% for a single year since 1991, let alone two years in a row.” (Source)
RBC: “Central banks are acknowledging inflation will be more persistent than previously expected, but there’s little they can do to resolve supply chain bottlenecks and rising energy prices. Most continue to focus on supporting a complete economic recovery.” (Source)
NBC: While other central banks (most notably, the BOE) have begun sounding the alarm on inflation, [Bank of Canada Governor] Tiff Macklem appears committed to the Bank’s transitory inflation narrative, reiterating this view in recent weeks. As such, we’re not looking for a significant change in tone, though we will likely get an acknowledgement of stronger-than-expected price hikes to date and potential upside risks ahead.” (Source)
Desjardins: “…our estimates show that the annual inflation rate reached a cyclical peak in September and could start to decline slowly in the coming months. Despite this encouraging prognosis, the risks of inflation continuing to rise in the coming months or remaining at its peak for longer are quite high.” (Source)

On GDP forecasts:

RBC: “We expect the central bank will revise its near–term GDP projections lower in October. It was previously looking for 6% growth in 2021, whereas our latest call is 5.1%. Our forecast remains consistent with the bank’s guidance that economic slack will be absorbed in the second half of next year, though there’s some risk that time-frame will be pushed back depending on how much of the recent growth shortfall is seen being made up in 2022.” (Source)
NBC: “With growth stumbling recently, a markdown to the GDP outlook seems all but certain.” (Source)

Big 6 Bank Interest Rate Forecasts

	Target Rate: Year-end ’21	Target Rate: Year-end ’22	Target Rate: Year-end ’23	5-Year BoC Bond Yield: Year-end ’21	5-Year BoC Bond Yield: Year-end ’22
BMO	0.25%	0.50%	NA	1.10%	1.35%
CIBC	0.25%	0.50%	1.25%	NA	NA
NBC	0.25%	1.00%	1.50%	1.30%	1.90%
RBC	0.25%	0.75%	NA	1.10%	1.65%
Scotiabank	0.25%	1.25%	2.25%	1.40%	1.95%
TD Bank	0.25%	0.50%	1.50%	1.15%	1.75%

Article From: https://www.canadianmortgagetrends.com/2021/10/bank-of-canada-preview-rate-hike-expectations-growing/

Parents to the Rescue: Average Size of Gifted Down Payments Rises to $82,000

General Mitchell Goode 27 Oct

As home prices have risen sharply in recent years, so too has the amount of down payment assistance parents are willing to give their kids.

For those parents who choose to assist their adult kids with the purchase of their home, the average amount of that financial gift has risen to $82,000, according to a research note released today by CIBC economist Benjamin Tal.

That amounts to an estimated $10 billion in down payment assistance from parents over the past year, accounting for 10% of total down payments, Tal says.

While the individual gift amount sounds large—particularly to homebuyers who aren’t fortunate to receive down payment help from their family—the amount has risen almost exactly in tandem with home prices over the years.

From 2015 to 2021, the size of the average gifted down payment rose at an annual pace of 9.7% per year (from $52,000), two percentage points faster than home price inflation, Tal noted.

And while the size of down payment gifts for first-time buyers has risen, the share of parents willing or able to offer that assistance hasn’t much changed, with under 30% of first-time buyers saying they received help.

“This is not a new phenomenon,” Tal said, adding the share was closer to 20% in 2015 and has gradually risen since then. “Interestingly, the share of first-time homebuyers receiving help did not rise during the pandemic.”

The assumption may be that only first-time buyers tend to receive down payment gifts from their families, but the reality is that existing homeowners are also receiving help as they move up the property ladder, according to the data. Just under 9% of so-called “mover-uppers” received parental help with their down payment, but the total amount of assistance is substantially higher for them at $128,000 as of September 2021.

Where is the money coming from?

In his report, Tal poses the question that’s on many of our minds: “How do parents come up with this money?”

Many will assume parents are taking the money from their own home equity line of credit (HELOC), which has presumably skyrocketed in value over the last couple of years. But that’s not quite the case, Tal explains.

“Based on Equifax information, we estimate that only 5.5% of gifting parents use debt to finance gifting…Therefore, it seems that a large portion of the gifting comes from parents’ savings, which of course grew notably during the pandemic—allowing for the increases in the size of the average gift,” he wrote. “Given the trend and the size of gifting, it is clear that this phenomenon is becoming an important factor impacting housing demand and therefore home prices in Canada.”

During a speech at Mortgage Professionals Canada’s Virtual Mortgage Symposium earlier this month, Tal said down payment gifts are a “major force” impacting the mortgage industry.

“Those parents are encouraging their kids to get into the market and take advantage of this window of opportunity of low interest rates,” he said. “So, there was this sense of urgency to get into the market, and that’s exactly what we have seen over the past year and a half.”

He added that the number of parents co-signing for mortgages has also increased 45% compared to before the pandemic.

Additional findings

The report revealed a number of other noteworthy findings:

Two-thirds: The percentage of first-time buyers who received a gift and said that gift was the primary source of their down payment.
- $104,000: The average size of the gift when it’s the primary source of the down payment for first-time buyers.
- $157,000: The average size of the gift when it’s the primary source of the down payment for “mover-uppers.”
In Toronto:
- First-time buyers received an average of $130,000 from family members as of Q3 2021.
- Mover-uppers received an average gift of nearly $200,000.
In Vancouver:
- First-time buyers received on average gift of $180,000 from parents
- Mover-uppers received an average gift of nearly $340,000
Down payment gifting is most common in Ontario: over 30% of first-time buyers report receiving assistance.
Gifting is least common in Prince Edward Island: under 15% of first-time buyers there received a gift.

Article From: https://www.canadianmortgagetrends.com/2021/10/parents-to-the-rescue-average-size-of-gifted-down-payments-rises-to-82000/

What’s Next for your Home After a Separation?

General Mitchell Goode 27 Oct

What’s Next for your Home After a Separation?

Growing up, most people dream about living a fairytale with a wonderful partner and a life of bliss. Unfortunately, real life is not always a fairytale and not every relationship lasts forever. In fact, latest statistics show that 38 percent of all marriages in Canada end in divorce.

Separating, whether through divorce or ending a common law relationship, is never an easy step. Losing someone close to you (whether for the better or not) is hard – but it doesn’t have to mean losing your home too. Most individuals who are going through a separation feel as though they are forced to sell their home and split the equity depending on your agreement, but there is another way.

spousal buy-outs

Spousal buy-outs are one of the mortgage industries best kept secrets and we want to blow the lid on this great alternative! While not everyone will want to remain in their home, many individuals may opt to remain rooted – especially for those with children who are already enrolled in school and happy in their neighborhood. This is where the Spousal Buy-Out Program comes in.

Backed by all three of Canada’s mortgage insurance providers (Canada Mortgage and Housing Corporation, Sagen™ and Canada Guaranty), this program is designed to allow one party to refinance the shared home up to 95 percent of its appraised value. In order to qualify, both you and your ex-partner must currently be on the deed to the property. As a one-time opportunity, the Spousal Buy-Out Program can also be used to pay off other debts outside the separation agreement, further assisting with the transition.

Now you may be thinking “I wish I could, but I can’t afford it”. Well, don’t sell yourself short just yet! We understand the cost of purchasing a home, whether outright or from your partner, can be high. Fortunately, The Spousal Buy-Out Program was designed to help YOU and mitigates these costs by allowing individuals to bring on a cosigner, such an existing family member or even a new partner, to assist.

If you are separating from your spouse or partner and would really like to hold onto your shared home, there are a few things you will need including:

1. AN APPRAISAL

An appraisal report will likely have been obtained to determine Equalization of Assets. However, in some cases the appraisal may not be acceptable to a lender unless it was originally ordered by a third party. The appraisal must also have been produced within 90 days (less with some lenders) to ensure accuracy. If the original report was previous to 90 days, a new one must be obtained.

2. A SIGNED SEPARATION AGREEMENT

To qualify the lender must be provided a signed copy of the separation agreement. The details of asset allocation must be clearly outlined.

3. AN AGREEMENT OF PURCHASE AND SALE

A standard agreement of sale indicating the new ownership.

4. AN EMPLOYMENT LETTER OR RECENT PAY STUB

This is required so the lender can verify your ability to manage your mortgage payments.

5. DEBT PAYOUT LIST

This is an optional one-time option for paying off additional debts outside of the separation agreement. The proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly noted in the signed separation agreement.

Moving on in life can often be difficult, but this program allows you to maintain some of your routine and security by ensuring you – and your children – can remain in the home you love.

Article From: https://dominionlending.ca/mortgage-tips/whats-next-for-your-home-after-a-separation

« First «…7 8910 11…»Last »