How Canadians Budgeting For Higher Mortgages? Don’t Know or Care?

I haven’t been blogging much, nearly everything I do is on Twitter now. It’s pretty amazing how writing in 140 character intervals forces you to the core of your argument. Nevertheless I occasionally want to have a long rant so here we are.

How are Canadians budgeting these days? Like many countries there is a huge culture of home ownership in Canada. It makes for a great new facebook pic that unofficially says you’ve ‘made-it’.

There are two issues that are very concerning for home buyers. First off, you have what I’m very confident is a real estate bubble in Canada. This has been discussed on this site since it was started and more recently in the media. That being said, the media focuses mainly on the condo bubble. Indeed I agree that condos are the most overvalued but much like the real estate bubble in the US which started with ‘just sub-prime borrowers’ a large correction in real estate prices will effect the entire sector.

We’ve all heard this argument a million times and I’m not going to bring it any further today. Its my opinion, I’ve presented my facts and if you disagree with my conclusion that’s cool.

But back to the story, maybe you don’t care about what your house is worth in 2, 10 or 20 years, you are just buying it for pride of ownership. Again, that’s cool, not my cup of tea when it comes to your biggest investment, but my question is; how are people budgeting this?

There is a huge difference between the US and Canada in terms of mortgages. In the US, the standard government backed mortgage is a 30 year fixed. You can perfectly budget your mortgage expense over 3 decades. I won’t even mention other benefits such as writing off part of the payments. In Canada, our government backed mortgage is traditionally a 25 year mortgage, fixed for 5 years.

So Canadians really have no clue what their mortgage payment will be in 5 years. With record low interest rates, it’s not hard to imagine them reverting to a more normalized level. What happens if your mortgage payment doubles? (or worse), let alone if we have a recession and a big jump in unemployment. This is the problem with the ‘no bubble crowd’ which cite the current relatively low debt service ratios as evidence of appropriate real estate prices. Yes, service ratios are good now, with today’s economy and low interest rates. The problem is a mortgage lasts for 25 years and credit conditions shouldn’t be judged on today’s economic variables remaining constant for decades to come.

So How Are Canadians Budgeting For Higher Mortgage Costs? Well I did some boots on the ground research. I’m 28 and more and more of my friends are making the big switch from renting to buying. I’ve asked them about this and I get very similar responses on Canadian real estate.
Real estate will always go up (recency bias).

Renting is wasting your money (they need to factor in potential capital losses and hidden costs of home ownership).

The bank approved me for this mortgage, therefore I can afford it (don’t let the bank’s poor decision making determine your own).

And in terms of what happens when they have to renew their mortgage in 5 years? Well I usually get a blank look and then something like “I never really thought about that”.

So there is your answer, Canadians don’t know and and don’t really care about future mortgage payments and housing prices. They are budgeting based on today’s current rates and happy to have their own place.  They are busy with work and the every day problems that come with life. They are not economists and don’t spend their day thinking about income ratios and where interest rates will be in 5 years. I understand this way of thinking, but given the magnitude of the financial commitment, I’m nervous for them.

End of story, Canadians are extremely exposed to higher interest rates and its low on their list of worries.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Debt Consolidation In Your Strategies? Turn To The Following Tips

Have you been strong in a great deal of debts? Are you feeling hidden by it? Debt consolidation loans is just one option for you.Read on to understand what you should understand about debt consolidation loans will help you.

• Take a look at your credit score.You should know what acquired you within this place to start with. It will help you stay away from the very poor economic course once more once your budget after getting them in order.
• You may spend less on interest expenses using this method. When you have performed a balance move, you ought to work to pay it off before your introductory rate of interest runs out.
• Consider personal bankruptcy if debt consolidation doesn’t work for personal bankruptcy.Nevertheless, should your financial debt gets to be so huge that you just could not handle it, your credit may possibly already be bad. Declaring bankruptcy will allow you to commence cutting your debt and economically recuperate.
• Locate a quality client counseling firm with your local area. These offices will help you coordinate your debt and mix your balances in a single settlement. Employing a customer consumer credit counseling firms won’t hurt your credit scores like experiencing other experts who supply debt consolidation loans services.
• Christmas bridge loan, christmas loans in an hour, christmas payday loan? Don’t take a bank loan from an not known entity. Financial loan sharks know you are aware that you’re inside a awful situation. If you are seeking dollars to borrow to be able to reimburse the money you owe, deal with somebody who has a solid reputation, in addition to getting a good interest.
• For those who have a 401-K, you might like to see about credit money from the 401k you might have. This gives you borrow from yourself rather than a banking companies. Ensure you may have every piece of information into position, and know that it could be risky because it may possibly diminish your pension resources.
• Complete the papers you obtain from personal debt consolidators properly. You should be having to pay more close focus on detail. Faults can result in the method being delayed, so comprehensive the forms effectively and acquire techniques to any questions you have.
• If you combine outstanding debts, discover which outstanding debts should be included and which outstanding debts ought to be maintained different. In case you have personal debt on a cost cards that doesn’t fee interest, you don’t wish to consolidate them. Go over each personal loan individually and inquire the lender to generate a wise decision.
• Be sure to clarify the particular regards to pay back whilst keeping your assure. You may not want to stay away from harming a relationship with a person near to.
• Spend some time to study various companies.
• If you’re really battling with debt, you really should see about credit funds against the 401k you may have. This lets you acquire out of your very own funds rather than a lender. Be certain you’re conscious of the details just before credit something, and realize that is dangerous since that is certainly your pension you’re consuming from.
• Bad credit personal loan not Christmas loan, the loan center Christmas loans? Usually do not be enticed by any loans from businesses that would seem amazing.

The aim of debt consolidation is to only have a single affordable payment you can pay for.A good 5 12 months repayment plan is something to capture for, but other conditions can be considered, also. This will help you to possess a objective you can work towards.

A consolidating debts consultant will allow you to combine your numerous loan companies. In the event the firm only provides you with only a bank loan, this business is probably not genuine. You want a firm that focuses on consuming your one payment per month management along with the payouts to each of your person lenders.

It’s very easy to get off your financial budget by only seeing men and women you understand. Enable your buddies know you are within a strict budget and advise economical choices to going out jointly.

Use this sort of cards only on getting things that can be a requirement.

• Firms with low marks and many problems should avoid.
• Consider your current fiscal goals before looking for a debt consolidation plan. If you are searching to eliminate a few of your financial situation to get funded for the big project, consolidation can make perception.
• Discover consolidating debts business that gives cost-free consultation services. You must speak with her or him about your budget appear like at present and offer some good info about the financial debt you’re working with. Meet up with with over a single specialist well before selecting one particular.
• There are several unscrupulous creditors who happen to be enjoy bank loan sharks. Find on the web reviews and analyze specifics of issues from consumers who definitely have seasoned difficulties with the services they obtained. Steer clear of any company which have lots of issues.
• Take advantage of the BBB to discover respected debt consolidation companies.You might also decrease a cell phone monthly bill if you try your greatest never to use so many minutes on a monthly basis.
• You want to do your research to find out all you can about debt consolidation prior to choosing to signal the dotted range. You must make sure that includes a very good history of helping people with economic difficulties. Consult with the BBB to discover on Better business bureau.org.
• You should do your homework to find out anything you can about debt consolidation solutions. You have got to find a debt consolidation company that anywhere you happen to be supplying dollars to is reputable and may do just what it affirms. Have a look over a offered firm.
• Be aware of personal debt consolidator which make guarantees that sound unrealistic. Your debt required time for you to build, nor can it automatically disappear. Brands like these kinds of promises are ripoffs. These firms might also explain to you to pay for them beforehand.
• A lot of people is likely to make poor decisions whenever they enter into personal debt. You can easily prevent awful fiscal options by studying your alternative ideas and taking into consideration the long-term. After looking at this short article, you should have a well round concept of what debt consolidation consists of.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Consumer Mortgage Tips Canada! How to Pay Your Mortgage Off Faster?

10 Tips for Paying Off Your Home Mortgage Faster

For most the Canadian homeowners, paying off their mortgage as early as possible has a top priority. Paying down extra principal in the early years of your mortgage loan by whatever means possible can reduce the life of your mortgage, and dramatically lower the interest you’ll pay throughout your mortgage loan life.

Any additional payment you make on your mortgage (also known as a pre-payment) will save you a lot of money in interest. The interest portion of your payment is determined by the outstanding balance of your mortgage (principal and interest). As the outstanding balance diminishes, less of your payment goes towards interest and more comes off the balance. Here are a few home mortgage tips and ways on how to pay off sooner while minimize your mortgage costs:

1.Increasing the amount of your payments annually to the maximum you can afford
The upside is that most lenders will allow you to reduce it again to the previous level if it turns out to be too great a burden or your circumstances change.

2.Prepayments provide you great return over your investmentIf you pay an average 6.5% mortgage interest rate towards your mortgage payment, for each $1,000 reduction of your mortgage principal results in $65 savings after tax cash annually.

3.Utilize your RRSP driven tax rebate as a mortgage prepayment methodEven if you can only prepay annually, make sure tax refunds are set aside for paying down your mortgage. Many Canadians borrow (at prime) to buy an RRSP to ensure the maximum rebate. When applied to the mortgage principal, this refund is a “gift that keeps on giving”. Combining the refund with the tax-free interest earned on the RRSP over the subsequent years will quickly outpace the short-term interest costs of the RRSP loan.

4.Accelerated bi-weekly payment optionIncrease the frequency of your mortgage payments; make accelerated bi-weekly payments to get a free principal reduction equivalent to one full mortgage payment every year.

5.Make use of double-up privileges wherever possibleTell yourself that you will “skip-a-payment” whenever necessary.. then skip only when you absolutely must.

6.Round your mortgage payments upBy adding even a nominal amount of dollar value, say $10 per payment, the amount of interest you are saving will be unbelievable, and the extra money is relatively painless to part with.

7.Making lump-sum payments whenever possibleBy decreasing the principal of the mortgage, your payments will not be allocated as much to interest, thereby accelerating the end of your mortgage.

8.Keeping the same payments when mortgage rates have fallen downIf the payment amount has not been a problem so far, then keep it the same, thereby paying down the principal faster.

9.Raise the mortgage payments in line with increased income on an after-tax basisIf your income increases, don’t keep your mortgage payments the same. Although the disposable income may be fun to spend on unnecessary luxuries in the short-term, the long-term benefits of being mortgage free faster a far outweighs the short-term sacrifice.

10.Paying extra on your payment datesMost lenders will allow you to make additional payments on your mortgage, sometimes referred to as “double-up” payments. These extra amounts are applied to the principal only and reduce your mortgage balance, which helps you pay your mortgage off faster.

The faster you reduce the outstanding balance on your mortgage, the more you will save in interest charges. Since pre-payment policies vary between institutions to institutions and types of mortgages, you should consult your mortgage agreement for complete knowledge about the availability of the pre-payment options for you. These are some of the consumer mortgage tips specifically written for theCanadian home mortgage market but could be equally workable for any other country in general as well.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Watch Your Wallet With These Personal Finance Tips

Does facing your personal finances leave you a bit bewildered? There are others out there that feel the same way you do. A lot of people find finances to be overwhelming since they were never shown how to manage them. The piece that follows offers some tremendously useful advice on the subject of personal finance.

Steer clear of products or schemes that promise you overnight success. Many people have fallen into the get rich quick schemes located on the Internet. You should certainly learn; however, carefully watch how much time and energy you put into learning. You do not want to spend so much time learning that you are unable to work and earn a living.

Develop a better plan for the future by keeping a journal of all of your expenditures. However, if you put this into a notebook that you can just shut and put away until you deal with it later, you may find it just gets ignored. Try to put up a whiteboard in the office or bedroom that you can list your expenses on. By doing this, you’ll probably see the board much more often, which will ensure it remains on your mind all day.

It may be helpful to keep a small envelope in your purse or bag whenever you go shopping. This way, you have a place to store all receipts that you receive. Keep this information available as a record that you might need at a later date. It will be good to have them on hand, so that you can verify all the charges on your credit card statement and contest any that are incorrect.

Don’t fall for the scam that an organization can guarantee you a clean credit report. A lot of companies out there make vague statements about how they will repair your credit history. But what worked for someone else may have no bearing on your credit issues. There is no way to guarantee success in credit repair and if anyone says otherwise, they are being dishonest.

If you bought a defective item, chances are you will notice it within a few weeks only. Businesses make a lot of money off of extended warranties but they are not always useful for the end user.

Avoid large fees when investing. Most brokers have hefty fees for the services that they render. These fees can really take a chunk out of the money you make. Do not use brokers who take big commissions, and stay away from funds with high management costs.

Purchase your lean meats and other protein sources in bulk. This will provide you with both a cost and time savings. If you use everything you purchase, buying in bulk can be much cheaper. If you cook meals for the rest of the week, it can save you a lot of time.

Your car and house are very likely going to be your biggest expenses. Paying the interest on these things often eats up a lot of money each month. Try to pay them off quickly by making extra payments or applying your tax refund toward the principal.

Sometimes your score will actually drop for no good reason. This can happen without any errors on your part. If you keep up on your credit report your score will go up!

Credit Card

Use compact florescent bulbs in place of incandescent bulbs where you can. Your new CFL bulbs will significantly reduce both your carbon footprint and your energy bill. As an added bonus, your CFL bulbs will last longer than the average incandescent bulb. Buying bulbs less frequently can help you save money.

Stop buying things with your credit card if you cannot pay it off. Go over your expenses and eliminate things that are not vital to your survival. Try to find another form of payment for the things that you really cannot live without. Finish paying off your balance before using the card again, and then try to pay your credit card balance in full every month to avoid future troubles.

Make a few extra bucks by having a garage sale and clear out some space at the same time. Let all of the neighbors know about the upcoming garage sale – one might even offer to sell items for them in exchange for a small commission. Garage sales offer a lot of latitude when it comes to making money.

Do not take out more student loans than you need this will cause a huge problem down the line. Private schools can be very costly to pay off.

Student loan debt has fewer consumer protections than other kinds of debt, so make absolutely sure that you can repay any student loan debt you accrue. Getting into that private school and being unsure of your future will more than likely put you into debt for a very long time, so be very careful about this.

Flexible spending accounts can be used for a variety of expenses. Flexible spending accounts can help reduce your medical or childcare expenses. These accounts let you set aside a specific amount of pretax dollars for these expenses. There are conditions involved though, so speak to a tax professional.

Your FICO score is effected largely by credit cards. When you maintain a large balance from month to month, your score will be lower than it should. Fortunately, you can start increasing your score rapidly by paying off your cards. Always try your best to keep your balance below 20% of the credit card’s maximum credit limit.

Personal Finances

Don’t waste money on lottery tickets. Put the money in your savings account instead. This is a better option because it will grow over time versus being wasted on a gamble.

As you know, many people are insecure with their personal finances, leading to eventual money problems. Reading this article should have shown you ways to prevent this from happening to you. Utilize the tips above to better your personal finances.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

5 Tips For Borrowers To Secure The Best Mortgage

After riding a swift updraft earlier this year, mortgage rates have steadied at around 4.5 percent for a 30-year fixed loan.

But there’s a good chance they’ll resume their upward path. That’s one of a number of things borrowers need to know now to get the best loan.

"For planning purposes, if I were thinking of getting into the market next spring, I’d be working with numbers in the 5 percent range," said Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based publisher of mortgage information. That would be up from around 3.5 percent earlier this year.

The market got some rate relief recently, when the Federal Reserve decided to continue its policy of buying bonds to keep mortgage rates low, in an effort to stimulate the housing market and the economy.

But the Fed has also made it clear that it will taper off such buying at some point, as the economy improves.

So does that mean buyers should speed up their timetables and jump into the market before rates start to rise again?

Not necessarily. For one thing, analysts aren’t predicting a huge increase.

And the mortgage rate is “only one part of the (home-buying) transaction,” Gumbinger said.

For most people, the decision to buy or sell is less influenced by the financial markets, and much more influenced by what’s happening in their lives: a new job, marriage, divorce, or the birth — or departure — of children, said Greg McBride, an analyst with Bankrate.com.

And even if rates start to rise, they are likely to remain affordable, by historic standards.

"Mortgage rates are not, and won’t be for some time, an impediment to well-qualified borrowers," McBride said.

"If the difference between a 4.5 percent and 5 percent rate on your mortgage is the difference between being able to afford a home or not, you’re stretching yourself too far."

Given the changing mortgage landscape, here are five things borrowers can do to get the best deal:

1. Do your homework
The first step is to check your credit report with the three credit reporting agencies.

You can do it for free at AnnualCreditReport.com. If there are any errors, correct them. Then do what you can to improve your credit rating by paying down your debt.

Avoid borrowing to buy a car or other big-ticket item in the months before you apply for a mortgage — and, for that matter, up to the date you finally close on your new home.

You can check your credit score at MyFico.com for $19.95. Anyone with scores below 620 will find it very difficult to qualify for a mortgage; borrowers with scores over 740 qualify for the best rates. It’s a good idea to try to improve your score in the months before you apply for a mortgage, because even a 20-point improvement can make a difference in the rate you can get, according to David Stein, chief operating officer of Residential Home Funding in Parsippany, N.J.

2. Get preapproved
Even before you start looking for a house, you should get preapproved for a mortgage. This will make you a stronger buyer, because sellers will know you have the financing in place to move forward.

In addition, getting preapproved for a mortgage amount “sets boundaries around what you can afford. Those boundaries dictate what your price range is,” said McBride.

3. Choose between rates
The standard loan offers a fixed interest rate for 30 years. Adjustable-rate mortgages (ARMs) offer a fixed rate for, typically, the first five or seven years; after that, the rates can rise every year. In exchange for accepting the risk that interest rates will rise, borrowers get a lower initial rate on ARMs. According to the Mortgage Bankers Association, ARMs make up about 7 percent of the current market.

But ARMs make sense only for people who know for sure that they’re going to be in the house for a limited time.

"Forget about adjustable rates altogether unless you have sufficient financial stability that you could absorb a higher monthly payment if your timetable doesn’t pan out," McBride said.

4. Decide on the length of the loan
Fifteen-year loans are more popular with refinancing homeowners than they are with first-time home buyers because many buyers can’t afford the higher monthly payments. The reward for those higher payments is that over time, you’ll pay much less in interest by shortening the life of the loan. And 15-year mortgages come with lower rates.

Sammy Thomas, a consultant living in Ridgewood, N.J., wasn’t looking for a 15-year mortgage when he decided to refinance as rates dipped last year. But with rates on 15-year mortgages then hovering around 3 percent, he decided that was the best deal. The shorter loan also meant that he and his wife, Demi, a teacher, could live mortgage-free sooner. That was especially appealing as they plan for their retirement, said Thomas, 58. In fact, they hope to put extra money on the loan each month and have it paid off in 11 or 12 years.

A homeowner with a $300,000 mortgage will pay $1,520 a month on a 30-year, 4.5 percent mortgage. A 15-year mortgage, at 3.75 percent, would run $2,182 a month. But over the life of the loans, the 15-year borrower would pay $92,700 in interest, while the 30-year borrower would pay $247,220 in interest.

Even if you’re not sure you can afford the higher monthly payments that come with a 15-year loan, you can shorten the life of a 30-year loan yourself by paying extra toward the principal each month, Gumbinger said.

5. Lock in your rate
Once you’ve found a good rate, consider locking it in, which you can usually do for no cost, or for a fee that is refunded at closing. It’s not worth betting that rates will fall before you close on the house.

"I rarely tell folks to try to time the bottom of the market," Gumbinger said. "Mortgage rates almost always rise much more quickly than they fall."

"Don’t try to guess the way rates are moving," McBride agreed. "I’m not a fan of people rolling the dice for something as significant as what their mortgage payment is."

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

What is the “Best Mortgage Rate” ?

It’s not synonymous with the “lowest mortgage rate.”

The best mortgage rate corresponds to the mortgage and advice that saves (and in some cases makes) you the most amount of money long-term.

Mortgage professionals routinely advise, “It’s not all about the rate.” To some, that sounds like evil sales-speak meant to boost commissions. The reality is that mortgage flexibility, contract restrictions and advice all have a definitive impact on borrowing costs. And most people don’t discover how much impact until after their mortgage closes.

That said, consumers are obliged to negotiate the very best deal they can. Three years ago, we asked ourselves, what kind of mortgage comparison website would we want if we were shopping for a mortgage ourselves? We thought up RateSpy.com.

RateSpy’s edge is data, lots and lots of rate data — more so than most other Canadian rate comparison sites combined.

Now, why on earth would someone need access to 3,000 mortgage rates and 300+ lenders, you ask? It boils down to probability.

At any given time, different mortgage providers are motivated to offer more heavily discounted rates. They may have:

Surplus liquidity (e.g., a credit union with excess deposits),
A need to replace assets in securitization programs (which is why we see big discounts on mortgages with odd terms, like 3.4 years), or
Internal volume targets that haven’t been met, thus encouraging more competitive pricing.
By definition, the more lenders and brokers one has to compare, the higher the probability of finding a lender motivated to discount below the market.

Of course, once you find a low-rate provider, that doesn’t mean its rate entails the lowest borrowing costs. Asking the right questions is mandatory to ensure the mortgage balances renewal risk with interest savings, and lets you make changes down the road—penalty free. This mortgage rate & features checklist can serve as a guide in that respect.

For these reasons, the interest rate alone can be a misleading number. If your lender or mortgage broker is quoting you a rate 10-15 basis points higher than what you’ve found online, it means nothing until you compare the features, restrictions and speed/quality of service from both providers

Our responsibility
Mortgage shoppers are, and will continue, flocking to rate comparison websites. But the information on these sites is vastly inadequate at the moment. Why, for example, don’t rate comparison sites speak to the penalty facing consumers if they break the mortgage early? Variations in penalty calculations can, and do, cost borrowers thousands more than small rate differences.

We have a responsibility to help consumers find the best overall deal, not just the best rate. The best deal factors in things like term selection, penalty cost, refinance restrictions, porting flexibility, advice on properly structuring an application, advice on building equity and so on.

Every Canadian rate comparison site I’ve seen underperforms in these areas. Even ours…for now. Our mission is to address these information deficiencies so consumers can identify the right combination of rate savings, flexibility and advice in an objective forum with no sales pressure.

Thereafter, we have to make it easier for folks to find competent mortgage professionals for a second opinion. Think about it. If you don’t have a trusted referral, where do you look to find a great broker or banker? How do you know the person you’re calling has the tenure, experience, qualifications and competitiveness to serve you best? Most existing advisor directories help you screen by little more than company, province or city.

Expect mortgage comparison sites to significantly evolve along these lines in 2014.

Sidebar: Rate comparison sites, in their present form, cater only to AAA fully-qualifying clients. Subprime,business-for-self and investor clients are a whole different conversation. There is currently no good mortgage comparison site for these customers, making knowledgeable mortgage advisors even more essential.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

3 Ways To Use A Mortgage Calculator

1. Planning to pay off your mortgage early.

By the time a 30-year fixed-rate mortgage is paid off, the typical mortgage holder will have made total interest payments significantly larger than the original principal on the loan.

Use the “Extra payments” functionality of Bankrate’s mortgage calculator to find out how you can shorten your term and net big savings by paying extra money toward your loan’s principal each month, every year or even just one time.

To calculate the savings, enter a hypothetical amount into one of the payment categories (monthly, yearly or one-time) and then click “Show/Recalculate Amortization Table” to see how much interest you’ll end up paying and your new payoff date.

2. Decide if an ARM is worth the risk.

The lower initial interest rate of an adjustable-rate mortgage, or ARM, can be tempting. But while an ARM may be appropriate for some borrowers, others may find that the lower initial interest rate won’t cut their monthly payments as much as they think.

To get an idea of how much you’ll really save initially, try entering the ARM interest rate into the mortgage calculator, leaving the term as 30 years. Then, compare those payments to the payments you get when you enter the rate for a conventional 30-year fixed mortgage. Doing so may confirm your initial hopes about the benefits of an ARM — or give you a reality check about whether the potential plusses of an ARM really outweigh the risks.

3. Find out when to get rid of private mortgage insurance.

You can use the mortgage calculator to determine when you’ll have 20 percent equity in your home. This percentage is the magic number for requesting that a lender wave private mortgage insurance requirement.

Simply enter in the original amount of your mortgage and the date you closed, and click “Show/Recalculate Amortization Table.” Then, multiply your original mortgage amount by 0.8 and match the result to the closest number on the far-right column of the amortization table to find out when you’ll reach 20 percent equity.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Alternative Mortgage Lenders Get Boost From Canada’s Resilient Housing Market

Shares in three of Canada’s biggest alternative mortgage lenders look set to rise over the next year due to the ongoing resiliency of the country’s housing market.

“Alt-A lenders should continue to see enviable growth,” said Shubha Khan, an analyst at National Bank Financial. “We believe that near-term housing market risks have moderated, particularly in view of more dovish comments on interest rate policy from the Bank of Canada.”

Mr. Khan said credit quality also remains sound with mortgage delinquency rates near historical lows. He increased his price targets on Equitable Trust Inc., MCAN Mortgage Corp. and Home Capital Group Inc. and reaffirmed his outperform rating on all three names.

Equitable Trust can be expected to rise 30% over the next 12 months to $64, while MCAN will jump 22% to $16 over the same period, he said.

Home Capital Group, meanwhile, is set to climb as high as $95 – a 17% gain – after reporting solid third-quarter earnings on Wednesday after market close.

The company, down about 2% in trading on Thursday — the same day Finance Minister Jim Flaherty reinterated that rates will eventually rise — reported earnings per share of $1.90 on net income of $66.4 million compared to EPS of $1.65 on net income of $57.3-million a year ago.

“Home continues to post record earnings, with no signs of house price weakness evident in its results,” Michael Goldberg, a Desjardins Securities analyst, said in a note to clients. “We project continued earnings and dividend growth, now augmented by securitization gains.”

He said the stock’s rollercoaster performance in 2013 has been largely driven by movements in its short position, but expects that position to decline, driving the price up further. He maintained his top pick rating with a new higher target price of $93.50.

GMP analyst Stephen Boland is not so bullish, however, and left his hold rating and $86.50 price target for Home Capital shares unchanged.

“The stock has performed better than we expected entering the quarter which we believe was an anticipation of the strong results and a general sector rotation into financials,” he said. “That said, we have moved our valuation out a year but are not comfortable upgrading at this time due to the valuation.”

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

10 Tips About Mortgages And Refinancing In 2013

If you’ve been sitting on the sidelines, waiting for the best time to refinance or get a mortgage to buy a home, think of 2013 as your last chance to act.

With good credit, persistence and some shopping skills, you can still snag phenomenal deals this year — even if you are underwater on your loan.

Here are 10 mortgage tips to help you with your mortgage decisions in 2013.

Tip 1: Stop procrastinating and refinance

If you haven’t refinanced recently, you’re probably paying a higher interest rate on your mortgage than you should. Take advantage of today’s record-low mortgage rates while they last. Rates are expected to remain low during the first few months of the year, but they should gradually increase. When they do, many borrowers will regret having missed the opportunity to grab the lowest mortgage rate in history.

Tip 2: Buyers, get moving

With rates near the bottom and home prices on the rise, it’s still a perfect time to buy a house. If you can afford a home and qualify for a mortgage, this may be your last chance to take advantage of the market and own a home for less. To speed up the homebuying process, get a mortgage preapproval before you start shopping.

Tip 3: Compare FHA vs. conventional loans

Many homebuyers opt for a Federal Housing Administration mortgage because it allows them to buy a home with as little as 3.5 percent down. But the already costly FHA fees that are added to your loan will increase again in 2013. As the costs of FHA mortgages rise, some buyers may consider saving a little extra for a conventional loan. Buyers need at least 5 percent down to get a conventional mortgage, depending on their credit. If you can afford the slightly higher down payment, get quotes for FHA and conventional loans, and compare the costs.

Tip 4: Ensure that your credit is golden

Credit standards remain tight. As new mortgage rules are unveiled in 2013, the standards are not expected to loosen. If you plan to get a mortgage anytime soon, you must treat your credit as one of your most valuable assets. Most lenders want to see a spotless credit history of at least a year on your credit report. You’ll need a credit score of at least 720 to get the best rate. Borrowers with a credit score of 680 or more can still get a good deal, but the lower your score, the harder it will be to get approved.

Review your credit report before you apply for a mortgage. Sometimes, paying part of your credit card balances can boost your credit score quickly. Generally, if you are using more than 30 percent of the available credit on your cards, you may be hurting your score. Also, check for credit errors and have them corrected before you apply for a loan.

Tip 5: Want to pay off your mortgage earlier?

If you are one of those homeowners who dream about being mortgage-free, the low-rate environment may be a good opportunity to refinance your 30-year mortgage into a 15- or 20-year loan. But make sure you can really afford the slightly higher payments on the shorter loan and that you have some money saved for emergencies.

Tip 6: Underwater refinancers: Don’t take ‘no’ for an answer

If you owe more than your home is worth and have tried and failed to refinance, why not give it another shot in 2013? The Home Affordable Refinance Program, or HARP 2.0, was revamped to allow homeowners to refinance regardless of how deeply underwater they are.

Even after revisions to the program, many borrowers still found obstacles when refinancing. But the situation is improving. Lenders are much more open to HARP 2.0 refinances these days than they were a few months ago. If one lender says you don’t qualify for a HARP refi, don’t take “no” for an answer, and try to find a lender willing to do it.

Tip 7: Give your lender a chance

If you have trouble paying your mortgage, don’t ignore your mortgage servicer. There are new programs available for borrowers who struggle to keep up with their mortgage payments, including forbearance for those with FHA mortgages. Lenders have been more willing to work out delinquent loans through loan modifications and even short sales for homeowners who can’t afford to stay in their homes. It can be a frustrating process to deal with your lender, but communication is still your best tool.

Tip 8: Shop for a low rate and good service

Even with rates hovering near record lows, you should still shop for the best mortgage deal. Get quotes from at least three lenders and compare not just the interest rate but closing costs and the quality of their service. Favor lenders that have a reputation of closing on time. Start with referrals from friends and relatives when shopping for a lender and read online reviews from other borrowers about the particular lender or mortgage broker you are considering.

Tip 9: Approved for a mortgage? Leave your credit alone

Most lenders order a second credit report for the borrower a few days before closing. Don’t open new accounts or charge up your credit cards at the furniture store while you wait for closing day. New credit lines and maxed-out cards may hurt your score. If you were on the edge when you qualified, your mortgage loan could be rejected at the last minute.

Tip 10: It’s not over until the loan closes

You’ve submitted your mortgage application and locked a rate. The race has just begun. Submit any documents requested by your loan officer or mortgage broker within 24 hours, if possible. Any delays in responding to the lender or in letting the appraiser into your house are wastes of valuable time. Lenders will remain overwhelmed with the large volume of refinance applications at least through the first few months of 2013. It doesn’t take much more than lost paperwork or last-minute requests from your lender to delay your closing. If that happens, you risk losing the locked rate. Follow up with your lender or mortgage broker at least once a week to ensure the process goes smoothly.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

20 Questions To Ask Before You Pick a Home Loan

Home loans can be complicated. But choosing one that meets your needs can be much easier if you gather enough information before you make a decision. Here are 20 questions that might apply to your situation.

Rate, term and payment

The most fundamental questions about any loan concern how long you’ll have to repay the amount you borrowed, how much interest you’ll be charged and whether the interest rate and payments are fixed for the entire term or subject to periodic adjustments as market interest rates fluctuate.

Here are four questions to ask:

1. What is the term of this loan?
2. What is the initial interest rate?
3. Is that rate fixed or adjustable?
4. How much would my initial monthly payments be?

Adjustment periods, caps and negative amortization

If the interest rate on the loan is adjustable, your monthly payment likely will change in the future and could be much higher than your initial payment.

Here are some questions to ask on this topic:

5. When can the interest rate be adjusted?
6. How will the interest rate be calculated?
7. What is the maximum interest rate increase for each adjustment period?
8. What is the maximum interest rate increase over the lifetime of the loan?
9. How much would my payment be today if the interest rate were calculated as it will be at the first adjustment period?
10. How much would my payment be at the maximum interest rate?
11. Could the amount I owe increase over time?

Costs and fees

Along with the interest rate and payment, you’ll want to consider the upfront and ongoing fees and costs you’ll be charged in connection with the loan.

Here are some questions to ask regarding costs and fees:

12. Can I see a Good Faith Estimate (GFE) for this loan?
13. Which of the costs on the GFE might change and by how much?
14. Are there any other costs that aren’t on the GFE?
15. Does this loan have a prepayment penalty?
16. Would this loan require an escrow account for homeowner’s insurance and property taxes?
17. Would I need to pay for mortgage insurance on this loan?

Needs and qualifications

Not all loan products are available to all borrowers, so you’ll want to explore your options before you decide which loan would be right for you.

Here are three questions that may help:

18. What are the qualifications for this loan?
19. Why would you recommend this loan for my needs?
20. Which other loans might also meet my needs?

These 20 questions can help determine if a loan is right for you. Don’t be afraid to ask your lender these and any other questions you may have. The more you know, the better equipped you’ll be to choose your loan.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Committing To A Mortgage With Your Honey? Consider These House Hunting Essentials

House-hunting couples have many important decisions to make together – from deciding on a new-build condo or century-old bungalow to agreeing on the ideal neighborhood and the type of mortgage that will work best for them.

According to research from TD Canada Trust, 73% of Canadians bought or expect to buy their first home with their significant other. Since a home is the biggest purchase most couples will make, Farhaneh Haque, director of mortgage advice at TD Canada Trust, provides her top three tips to ensure couples are on the same page before hitting any open houses.

Air out financial closets – Couples should be open and honest about their current financial situation and financial history. If anything could affect the ability to secure a loan together, afford monthly mortgage payments or interest rate increases, be upfront about it.

Start on the same foot – From a home office to a kitchen made for entertaining, couples should set a budget and discuss the key characteristics they want in a home, and what they are and are not willing to compromise on.

Saying ‘I do’ to a mortgage – Couples need to give as much thought to their mortgage as they do to their dream home. This includes discussing the size of the down payment, amortization period, type of mortgage and payment schedule.

“The last thing couples want is an unwelcome surprise when they’re about to sign on the dotted line,” Haque said. “By speaking with a mortgage specialist well before you’ve entered the pressure-cooker of the house hunt, couples can make informed decisions that can save money and stress in the long run.”