Changing Rates Again

Bond yields increased again yesterday so therefor the fixed mortgage rates on which they are based also increased. If you are putting down less then 20% your 5 year fixed AAA rate is now 3.84% which is up by .05 basis points since last week. However if you are putting down 20% or more your AAA rate is now at least 4.09%.

The prime rate on the other hand is still 2.70%, and most lenders are offering discounts of prime less .90% now where last week they were offering discounts of up to prime less 1.10. So if you have a variable rate or are pre approved on a variable rate take note that the bank of Canada meets next on April 13th to announce the next change to the over night lending rate which will then change the prime rate. The prediction is that it will go up by .50% to 3.20%.

To put it in a little bit of perspective the last time that we had rates in the mid to high 3% range was in November and December of 2018. When the 5 year fixed rate got up to 3.69% for two months before going back down slowly. Then with the onset of the Pandemic in 2020 the 5 year fixed rates bottomed out at 1.79%. However bond yields are up due to inflation levels that we have not seen in 30 years and the instability of the War in Ukraine is not helping calm things down much either.

My role as your advisor is to give you the best advice so you can make a knowledgable decision about what to do about your mortgage. There are pro’s and con’s to all the options, it is best to chose the option that will allow you to comfortably sleep at night. Ask me and I will tell you the facts about the 5 year fixed vs the variable vs the short term 1 year fixed. Ask as many questions as you want as this is an important decision to make.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Hire an expert

Generalist are fine when the problems or issues are minor, but when they are important or vital it is time to consult an expert. I was having issues with my feet this winter and asked my GP about it when I saw her. While the level of care is normally great for minor issues, if you have a specific problem then it’s time to see the expert. A quick visit to a podiatrist quickly fixed my issues.

When people are a jack of all trades they tend to be a master of none. We can’t all be polymaths like Leonardo Da Vinci who excelled in engineering, science, medicine and art. The same also applies to your need to finance your next home or your dream home. There are those who work for the big 5 banks who do mortgages, lines of credit, investments, checking & savings accounts and insurance. While I am quite sure that they are good at a few of those fields they can’t possibly be an expert in all of them.

Your home for most people is your single most important investment over your lifetime. You should not put this in the hands of someone who is only average at doing it. You should be dealing with an expert, someone who specializes in that field.

Today I am thankful for the fact that I sought the advice of an expert, having a busy schedule and having options for challenging files.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

NS budget 2022

Just as a point of reference I am not going to delve into all the items on the 2022 budget here in NS, but only how it effects the real estate market. It doesn’t matter the political strip of the government just the details on how it effects your ability to purchase property here in NS.

The new 2022 budget was announced yesterday and in it includes a revenue generating plan to tax foreign buyers of real estate. By foreign buyers this covers anyone who will not be a resident of Nova Scotia after they purchase the property. It turns out that there are approximately 27,000 non resident property owners here in Nova Scotia. This covers those who have cottages, condo’s or investment properties here but live elsewhere.

The first new tax will increase the deed transfer tax for foreign buyers from 1.5% of the purchase price to 5%. The change is scheduled to take effect April 1st/2022 and will apply if you don’t move here within 6 months of purchasing the property. The second will be an increase in the property tax to $2 per $100 applied to properties of 3 units or less bought by foreign buyers. They expect the changes will result in over 80M of new revenue for the province.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Buckle Up

Buckle up as it may be a bumpy ride. Since Russia decided to invade Ukraine, I am not saying because of it but this did start around the same time, that bond yields have been steadily rising thus the fixed mortgage rates have also been increasing.

In the past month the 5 year discounted fixed rate has increased by 90 basis points from 2.89% to 3.79%. There are many in the mortgage industry who say that they see this increasing further to over 4% and only then possibly settling down. There is also talk of the Bank of Canada increasing the overnight lending rate by 50 basis point on the next meeting on April 13th. Doing so will then increase the prime rate from 2.70% to 3.20%.

While the costs of almost everything has been increasing lately from the homes we buy, the wood we use the construct them and the gas we use to get ourselves around. Just be thankful that we live in a safe and free country. Do your best to help those around you who are in need. So until this all settles down, just buckle up and do your best to get through it.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Changing Rates

The global instability due to the war in Ukraine has finely started to effect mortgage rates. There have been a lot of changes in the past month and they are now starting to hit the financial markets. Bond yields which effect fixed mortgage rates have steadily started to rise since the start of the month and as a result have increased the fixed 5 year mortgage rate by 55 basis points since the 1st of the month. The bank of Canada has also changed prime rate for the 1st time in 2 years this month as well increasing the overnight lending rate by 25 basis points.

So the reason that I am bringing up rates today is that the spring is typically the busiest time of the year to purchase real estate, if you are planning to purchase a home in the near future then I highly suggest that you look at getting pre approved so your rate can be held while you go out and find your dream home or your next home. In case you are wondering we can also hold the spread on the variable rate which currently sits at prime -.90% to prime -1.1% depending on the lender and the down payment percentage.

So protect yourself against any further rate increased by locking in your rate now. Just reach out and I can help you do it.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Qualifying rate change

As some of you may know that we have a mortgage stress test or qualifying rate of 5.25%. This is to help insure that when you are qualifying for a mortgage you will still be able to make the payments if and or when the rate changed to 5.25%. What many of you may not have heard is that this qualifying rate or stress test rate has now increased.

Actually it has not changed but it has increased so let me explain. The way the stress test works is that it is based on the contract rate ( your mortgage rate) plus 2% or 5.25% which ever is greater. The stress test rate of 5.25% has not changed but the mortgage rates have thus moving the qualifying rate now above 5.25%.

Rates have been increasing as bond yields have changed as they have over the past several months. Yesterday they increased again. Notification received last night that 5 year fixed rates were changing to between 3.54 to 3.84% depending on loan to value ( percentage of down payment compared to the value of the property) and the type of program. So based on these things it would change your qualifying rate to 5.54 to 5.84% thus further reducing your buying power and affordability.

One option would be to go with a variable rate as that still uses the 5.25% qualifying rate until those rates change or select a 1 or 2 year term instead. If you are in the market to purchase a home this year, then please reach out to me so we can lock in your rate now before the next rate increase.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Overheated

In the past few days there have been several articles all taking about the potential upcoming downfall to the Canadian real estate market. If this is true should you be worried.

Let’s examine a few things first, the pandemic changed a lot of things about our lives and with it came the ability to work remotely and yet still be productive. As a result there have been plenty of people leaving the major centre’s and moving to the suburbs and also to other provinces to get that better quality of life and the slower pace.

The interprovincial migration coupled with the recent higher level of International migration has led to record levels of demand for housing. When you put the migration in with lower multi unit and single family housing starts this creates higher demand for the units currently available on the market. Now this year it has heated up even further with a sharp drop in the available listings on the market. So what does hit the market tends to sell for well over the listing price.

Now we circle back to the original point, should you be worried that you just paid 150K over asking to secure your home? I don’t think so and this is why, if you plan to stay in your new home for at least 10 years then any market correction combined with the paying down of your mortgage will balance out in the end. However if you are speculating and hoping to flip it for a quick profit, that may be easier said than done as homes that require a lot of work are still selling for top dollar.

Here are the stats that one of my local realtors just posted. Prior to the pandemic HRM was averaging around 3000 active listings so that means that buyers had lots of choice and homes tending to sell within 60 days which was always the normal rule of thumb. Today we have just over 200, and they are only staying on the market for up to 17 days or long enough to have the financing secured. These homes are also selling for 110% of the listing price on average. All this helps create the 15-20% gains in value that we have seen in the past two years.

When listings and or available units ( multi residential) start to increase to catch up with demand then we will start to see the market to calm down and actually get back to normal. The recent increase in mortgage rates has had no effect on cooling the market. People still need a place to live and until there are enough of them out there this will continue at least for the short term.

“A housing bubble is a run up in housing prices filed by demand, speculation and exuberance” Investopedia

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

KYC

In the financial services industry which I work as a mortgage broker, it is expected that we all practice KYC also known as know your client. Without doing so how can I possibly recommend a mortgage product for their current needed or requirement. When I started doing this 20 years ago there was always a lot of face to face time. The initial meeting to find out their requirements, follow up to gather documents and finely another meeting to sign everything. So there was lots of face to face time.

Now most of my meetings are conducted over Zoho meeting ( virtual meeting software), with follow ups on the phone, text or email. My role as I see it as their mortgage consultant is to present the best possible options and then help my clients decide. There are no cookie cutter solutions in this industry, one size defiantly does not fit all when it comes to your financing. So without getting to know you and your unique situation it is very difficult to find a solution that is ideal. I am only a phone call away if you ever have any questions.

Today I am thankful for the snow flurries during my morning run, a great book about a visionary and getting to know lots of great people.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Tell your story

Not every mortgage application is the same, and thankfully no two lenders are the same either. This is why it is vitally important to tell a very compelling story with every mortgage request submission. You see this is because lender’s policy’s often are not black and white and clients don’t always fit in the same box.

In our notes with every mortgage request I tell a story around the 5 C’s of credit ( Character, Credit, Capacity, Collateral and Capital). Doing this will allow me to address any weaknesses of the client, why it happened and why it won’t happen again and build on the strengths to show why this mortgage request should be approved.

Due to the fact that some clients background in the 5 C’s is not ideally suited with the major A lender, that is why it is great to deal with a broker who has much more options. When all fails with A lenders we have alternative and then private sources. While nobody has the perfect past, as long as clients are open and honest about what happened then things can be dealt with so options can be found.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Prime Rate Change

Yesterday at 11am Atlantic Standard Time, the Bank of Canada increased it’s overnight interest rate from .25bps to .50bp. Thus all the banks followed by increasing their prime rate from 2.45% to 2.70%. Except for one key lender who was at 2.60% and has now increased to 2.85%.

As a quick comparison for those who are on variable rates and are thinking of switching to a fixed, the 5 year fixed rate is now between 3.04 -3.24 depending the lender. However remember that your discount to the prime rate will not change over the length of your term. So the people who took a variable at Prime -1% are still sitting quite pretty. Make sure that you do the math before you make any harsh decisions.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here