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Posts tagged ‘mortgage’

Free Real Estate Seminar In Sooke: Buying Your First Home

Log Cabin In Sooke

Is 2016 The Year?

Learn all about mortgages, real estate, and how to buy your first home


Coming up Wednesday, January 27, 2016, you can spend a couple of hours with three of Sooke’s real estate and mortgage professionals learning about strategies you can use to get into your first home in 2016. The seminar is free, but you must pre-register, as there’s limited space.  Read more

82% of Sooke Home Sales Unaffected By Federal Mortgage Insurance Rule Changes

6201 Hensbro Place, East Sooke.

Starting February 15, you’ll need a $37,500 down payment to buy this home, instead of $31,250. http://TimAyres.ca/167

This morning, federal finance minister Bill Morneau announced changes that his Liberal government is making to CMHC-backed mortgages in this country. The changes were hinted at by well known Canadian Mortgage Trends blogger Robert McLister back on December 1st. The actual changes aren’t quite what he had predicted, but are pretty close. Read more

Bank Of Canada Raises Interest Rate to 0.5% At June 2010 Meeting

Only one direction to go!

This morning at its June 1, 2010 meeting, the Bank of Canada raised its key overnight lending rate (the rate at which it lends funds to chartered banks) one-quarter per cent (25 basis points) to 0.5%, its first rate hike in almost three years.

What can we expect? Banks will be increasing their prime lending rates. This is the rate upon which variable-rate mortgages are based, as well as other borrowing products such as personal loans, and some credit cards. The quarter-per cent hike translates into about $12 more per $100,000 of borrowed funds.

One thing to consider if you’re going to be renewing your mortgage or taking out a new mortgage when you buy, is that the lender discount from prime rate has been increasing (best I’ve heard is prime -0.6% lately), which may help make up for this first rate hike. Talk to an experienced mortgage broker and see what your options are.

The Bank of Canada’s move to increase rates comes amid a shaky worldwide recovery and only time will tell if more rate hikes will be necessary.

Bottom line: don’t panic. Rates are still historically low and will likely remain so for the foreseeable future. Mortgage rates have been on a generally downward trend for about 30 years.

The full Bank of Canada news release can be found here.

Tim Ayres – Sooke Real Estate Professional

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Upcoming Free Victoria BC Real Estate Seminar: Buying A Home

House for Sale in Sooke

Ah… springtime… when a young person’s thoughts turn to… buying a home, of course! The spring market is here, and many first-time buyers are taking advantage of record low interest rates and making the jump into their own homes.

How much do you need and how can you save for a down payment? What’s the best type of mortgage for you? What homes are available and what sorts of programs are out there to help a first-time buyer?

How will the upcoming mortgage rule changes affect my affordability? Will the HST spoil my dream of home ownership?

All these questions and more will be answered at a fun, free, interactive seminar I’m putting on next month with two other professionals.

A Certified Financial Planner will talk about how to save for that ever-important down payment, and government programs to assist home buyers. Find out the details of how to borrow from your RRSP tax-free to help you buy a house, and other tricks of the trade.

Robert Boyd, Mortgage Expert with Dominion Lending will present on the various types of mortgages that are available, how to apply, and how to get the best rate possible to save you money. Learn about mortgages and rates, amortization and prepayment and take the mystery out of mortgages

Tim Ayres (that’s me!), REALTOR® with Royal LePage Coast Capital Realty will walk you through the home-buying process – how we search for a home together, showings, offers, negotiation and finally, getting the keys to your new home. Find out what to look for, how to ensure you get what you need, and how having an experienced REALTOR® on your side can help.

When: Tuesday, March 30th, 2010, 7PM.

Where: Investors Group Westshore office, 201 – 630 Goldstream [map] – [street view]

The seminar is free, but we have limited space, so please phone me at 250-885-0512, fill in the form below or visit TimAyres.ca/seminars for more information.

Tim Ayres – Sooke Real Estate Professional

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Your Home Is Not An ATM!

Something’s been bugging me for a while now, and I’ve been meaning to write about it. You know the commercials on the radio and TV. I probably hear them half a dozen times a day, more if I’m listening to a Canucks broadcast.

“Making your home equity work for you…..”

“If you own your home,” say the commercials, “we’ll lend you money.”

Sounds great, right? Free money! Against the value of my home! More and more, Canadians’ chief source of wealth these days is the equity built up in their home. Equity is the difference between the market value of the home and the outstanding balance on the mortgage on the property.

Homeowners should approach equity take-outs with extreme caution, because managed improperly, they can cost dearly. Many financial advisers will tell you it makes good financial sense to refinance high-interest debt such as personal loans, lines of credit, and credit card debt with low-interest mortgage money. While this is true, one needs to first examine how the indebtedness happened. If you’ve got $30,000 of student loans at a high interest rate, it makes good financial sense to pay them out with lower interest money. However, if you’ve racked up $30,000 of credit card debt at really high interest rates by consistently spending more than what you make, what is stopping you from doing it again once you’ve paid it out?

The point is: spend within your means. Irresponsible credit use is one of the biggest financial problems in this country, if not the world.

Some people have the mistaken assumption (and perhaps some members of my profession are partially responsible) that real estate prices only go up. We don’t have to look far back in history to bust this myth. If you had purchased a home in Victoria in the spring of 2008, with a 5% down payment, there is a very good chance you owed more on it than it was worth by February or March of 2009. Real estate prices fluctuate, and the worst situation you can be in is to owe more than you could get for your home if you had to sell it.

Treating your home like an ATM is a great way to end up in that situation.

Tim Ayres – Sooke Real Estate Professional

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New Canadian Mortgage Qualification Rules Announced Today

Flaherty Puts The Squeeze On Mortgages

Following a couple months of speculation, Finance Minister Jim Flaherty brought in some new regulations designed to tighten up lending practices and cool off the housing market in Canada. The government didn’t go so far as to reduce maximum amortization from 35 to 30 years, or increase minimum down payment requirements higher than 5%, but did take the following three actions:

  • Borrowers must now qualify for a five-year fixed rate, even if they are applying for a variable rate mortgage. Variable rate mortgages are based on the prime rate, which is at a rock-bottom 2.25% currently, and is expected to rise over the next 12-18 months. By qualifying buyers at the higher 5-year fixed rate, it is hoped that a cushion will be created such that borrowers can still afford the payments when the prime rate increases, as it will inevitably do.
  • Home owners who want to take out some equity from their homes when they refinance their mortgage will no longer be able to take out up to 95% of the lending value of their homes, only up to 90%. This is designed to prevent home owners from using their homes as an ATM and getting in over their heads if their property value declines. Probably not a bad idea, but it will prevent some home owners from paying off high-interest debt with low-interest mortgage funds. Overall, I’m happy about this one.
  • Purchasers of non-owner-occupied real estate, ie, investment properties, will now need 20% down instead of 5%. The government says this is to prevent speculation by investors. I’m of two minds on this move. It will certainly put a squeeze on buyers of investment properties, which may in turn lead to fewer rental properties available and hence a corresponding rise in rents.

The reader needs to bear in mind that the above rules are for CMHC-insured mortgages only. Private insurers like Genworth and AIG Guaranty may be more flexible. Mortgage insurance is mandated on all mortgage loans in excess of 80% loan to value ratio, which offers the lender protection should the borrower default. This way, lenders are able to offer borrowers lower rates because they do not have to compensate for the additional risk of a high-ratio mortgage.

Also, most lenders qualify a buyer on a 3- or 4-year fixed rate already when applying for a variable rate mortgage, so this won’t be a huge change for most institutions.

The new rules are set to come into force April 19th. I would expect a surge in activities in the market as buyers and investors try to get in under the deadline, even though most residential, owner-occupier borrowers won’t be too affected by the changes. All they will hear is “harder to get a mortgage” and they’ll rush out to get pre-qualified and then go shopping.

Tim Ayres – Sooke Real Estate Professional

Your comments are welcomed and encouraged!
Just use the form or link below this post.

You can bookmark this post using the button below,
or subscribe to this blog for free updates using the big buttons on the sidebar!

Upcoming Free Victoria BC Real Estate Seminar: Buying A Home

House for Sale in Sooke

Is 2010 the year you decide to stop paying rent and invest in your future in the form of your very own home? How much do you need and how can you save for a down payment? What’s the best type of mortgage for you? What homes are available and what sorts of programs are out there to help a first-time buyer?

All these questions and more will be answered at a fun, free, interactive seminar I’m putting on next month with two other professionals.

A Certified Financial Planner will talk about how to save for that ever-important down payment, and government programs to assist home buyers. Find out the details of how to borrow from your RRSP tax-free to help you buy a house, and other tricks of the trade.

Robert Boyd, Mortgage Expert with Dominion Lending will present on the various types of mortgages that are available, how to apply, and how to get the best rate possible to save you money. Learn about mortgages and rates, amortization and prepayment and take the mystery out of mortgages

Tim Ayres (that’s me!), REALTOR® with Royal LePage Coast Capital Realty will walk you through the home-buying process – how we search for a home together, showings, offers, negotiation and finally, getting the keys to your new home. Find out what to look for, how to ensure you get what you need, and how having an experienced REALTOR® on your side can help.

When: February 9th, 2010, 7PM.

Where: Investors Group Westshore office, 201 – 630 Goldstream [map] – [street view]

The seminar is free, but we have limited space, so please phone me at 250-885-0512, fill in the form below or visit TimAyres.ca/seminars for more information.

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Tim Ayres – Sooke Real Estate Professional

Your comments are welcomed and encouraged!
Just use the form or link below this post.

You can bookmark this post using the button below,
or subscribe to this blog for free updates using the big buttons on the sidebar!

First Time Buyer Friday #6 – What Does My Money Get Me?

In my continuing series, First-Time-Buyer Fridays, I answer a common question from a first-time buyer. If you have a question to submit, first-time-buyer or experienced investor, put one in the comments below, or fire me an e-mail at Tim@TimAyres.ca.

house-money

Q. I want to spend about $400,000 on my first home – what can I buy for that kind of money?

A. Let’s break this down and see what $400,000 would cost first. To buy a $400,000 home, you’d need 5% down at a minimum, which is $20,000. The remaining $380,000 would need to be mortgaged. If you were to get a 5-year fixed rate at 4%, amortized over 35 years, your monthly payment would be about $1675. A two-income family should be able to afford that payment.

Keep in mind that you should think long-term. While interest rates today are at historic lows, you need to think about what happens in 5 years when it’s time to renew. No one knows where interest rates will be at that point, and you should build in a comfort zone by calculating the payment at a higher rate of interest. At 5%, the same mortgage estimated above would be $1905 – at 6%, $2150, and at 7%, $2401. The risks of this can be offset by choosing a shorter amortization period (25 or 30 years, instead of 35), which would allow you to pay off more of the principal before it’s time to renew, or you could make extra payments where your budget (and mortgage terms) allow.

So, now that we’ve established what $400,000 looks like on a monthly basis, let’s have a look at what that sum would buy you in today’s market.

In the Victoria core area (Victoria, Oak Bay, Saanich, View Royal and Esquimalt) there are 27 single family homes under $400,000 as of writing this post. Most are small, and old, but there are always a few gems in this price range. There are plenty of condos under $400,000 – 384 to be exact. In the higher end of the range, there are brand new suites at The Juliet, The Ovation, The Monaco, and other brand new high end developments in the core. At the lower end of the range, older buildings (which usually mean larger suites) offer stability and peace-of-mind for less than $250,000. There are 45 townhouses in Victoria and vicinity under $400,000 as of writing, with lots of variation in style, age and location.

Moving further out of the Victoria core area, you’ll get more bang for your buck. In Langford and Colwood as of this writing, there are 30 single family houses and 44 townhouses in Langford and Colwood for sale under $400,000 – including brand new homes in the Happy Valley area, and townhouses at the foot of Bear Mountain. $400,000 would get you nearly any condo, with 215 condos under $400,000 in Langford and Colwood to choose from. Only 21 are above $400,000, mostly on Bear Mountain, or in that new development on the waterfront in Colwood at Esquimalt Lagoon.

Further out west to Sooke is where many first-time buyers are choosing to go (here are 10 good reasons to move to Sooke.) The drive to Victoria is a little longer (but it’s nice!) and the town smaller, but that means that you get a lot more for your money. There are 49 houses for sale in Sooke under $400,000, including many brand new beautiful houses in new subdivisions. If you buy in Sooke, there is also the option of buying an older home to renovate to your liking. Older homes will most likely have a larger lot, too. There are not many condos or townhouses in Sooke, but more are being built all the time. Almost all of them are under $400,000, including the brand-new townhouses at The Pointe in Sun River Estates and waterfront condos along Kaltasin Road. As of writing, 29 condos and townhouses in Sooke under $400,000 are for sale.

I have found that first time buyers are often surprised by 1) How much they can afford, and 2) What that money will get them. There’s plenty of product out there, prices are declining, and with the Bank of Canada reporting that interest rates will remain low until at least the second half of 2010, there hasn’t been a better time to buy in a long time – if it’s right for your situation.

It may or may not make sense for you to buy right now. To get a clearer picture, or for more information about any of the homes mentioned in this post, give me a call at 250-885-0512, e-mail me at Tim@TimAyres.ca or fill in my contact form. Connect with me on Twitter at Twitter.com/TimAyres.

Tim Ayres – Sooke Real Estate Professional

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Bank Of Canada Cuts Interest Rate to 0.25% At April 2009 Meeting

Snip!

Snip!

To the surprise of many analysts, this morning at its April 21, 2009 meeting, the Bank of Canada cut its key overnight lending rate (the rate at which it lends funds to chartered banks) another half-percent to 0.25%, continuing the trend of historic low rates in an effort to stimulate the economy. Since December 2007, the Bank has trimmed 4.25% off its overnight lending rate, which has had the effect of lowering mortgage rates (especially variable rate mortgages).

Two of Canada’s chartered banks were quick to match the rate cut, trimming prime to 2.25% – a good sign that credit is available and our banks are ready to lend. This should translate into lower variable-rate mortgage products in the coming weeks. If you’re already on a variable-rate mortgage tied to the prime rate, then you’ll get a letter from your financial institution soon, advising you of the change. If you’re lucky enough to have a prime rate -0.85% mortgage, this means that with bank prime being at 2.25%, you’ll be paying a paltry 1.40% on your variable rate mortgage. That’s almost free.

The Bank predicts that fiscal and financial stimulus measures initiated by governments and central banks worldwide have been slower than expected to take hold, and will be holding the 0.25% rate until the end of the second quarter of 2010, barring unforeseen circumstances. All this means that recovery of our economy is going to take longer, starting late next year, with the economy reaching full capacity in 2011.

The full Bank of Canada news release can be found here.

Tim Ayres – Sooke Real Estate Professional

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First-Time Buyer Fridays! – New Feature on the 642Blog

They're a little crooked, but soundly built!

They're a little crooked, but soundly built!

Welcome to the first edition of First-time Buyer Friday! In this new section of the blog, I’ll chat about a different topic each week that is specifically important to first time buyers in the Victoria and Sooke marketplace. I’ve been working with a lot of first-time buyers lately, so I am getting a lot of questions from my clients which inspired me to start writing about them. Sometimes the post will come in video format, other times written.

Q. What’s the first step in owning my own home?

A. With Victoria and Sooke real estate prices dropping, and interest rates at historic lows, many renters are considering making a move to their own property. Other than surfing around on Realtor.ca, your first step should probably be to meet with a qualified mortgage broker or your bank to determine how much you can afford, and to get pre-approved for a mortgage. This will help you in numerous ways. First, it gives you the confidence that you are financially able to purchase when you find the right home, and will save you valuable time by focusing only on properties you can afford.

Working with a mortgage broker has several advantages. Being independent, they have access to many different lenders, and will work for you to get you the best rate and the mortgage product that best suits your needs. Contrast this to a bank’s mortgage officer, who is usually tied to that bank’s mortgages and has limited flexibility to offer different products.

If you have any questions about mortgages, buying, or anything else real estate related, contact me at 250-885-0512, Twitter.com/TimAyres or Tim@TimAyres.ca. I would be happy to refer you to a mortgage broker to get you started!

Tim Ayres – Sooke Real Estate Professional

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