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Saving for a Down Payment

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Mortgage Down Payment

Today’s mortgage market allows potential homeowners to purchase their dream property in Canada with as little as five per cent down.

Any down payment that totals less than 20 per cent of the property value will require mortgage default insurance, and is considered to be a high ratio loan.

A conventional mortgage is defined as a mortgage loan where 80 per cent or less of the property value is financed through a lender. The percentage of your home value that is financed, or not paid for by the down payment, is defined in a Loan to Value ratio (LTV) (loan amount divided by property value). The LTV has a large influence on the mortgage product you will be eligible to qualify for on the purchase of your new property.

The greater the down payment you can accumulate, the greater the contribution you are making toward the principal value of your home, and thus the less of the mortgage loan amount you will be paying interest on over time.
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Don’t be Afraid to Talk to a Mortgage Broker

Find super low rates

Halloween aside, this October has plenty of reasons to get you spooked, what with a recession, a long and tiring election campaign, and recent world events. Plenty of reasons, but your mortgage need not be one of them.

We’re here to help in this frightful time, no matter if you’re buying a home, renewing your mortgage, or looking to refinance.

Mortgage brokers have access to a wide range of lenders and products, and we can find a mortgage that’s right for you. After all everyone’s mortgage needs are different. You may require the certainty that your mortgage payment will stay the same from the first day of your term to your last. You may want flexibility, to be able to pull equity out of your home to finance a renovation or a new car. Regardless, you should be able to do so with the lowest mortgage rate available in Canada.

Mortgage rates are incredibly low right now, but you likely wouldn’t know it if you looked at your local bank’s rates. Go with your bank’s mortgage rates, you’ll probably end up paying a ghastly premium.

Refinance and Consolidate Your Mortgage

Refinance / Consolidate
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The Dirty “R” Word

If the word “Recession” fills you with unease, you’re not alone. The word doesn’t sit well with many people. Unless you are in the rare circumstance of having just come into a gratuitous fortune, or you are employed in a sector of the economy that has somehow been unaffected by it, a recession will to affect you. Even then, depending on the severity of the recession, unaffected sectors can be effected by proxy.

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How the recent rate cuts may impact mortgage regulations

With the latest Bank of Canada (BoC) rate cut to 0.50% comes a reminder that many would like us to believe our housing market is tenuous. Once again there is a lot of discussion about just how overheated our market is and the dire circumstances many current home buyers are likely to find themselves at renewal time.

First, let’s think about why the Bank of Canada decided to cut interest rates once again last week. In January the BoC surprised many of us and cut the overnight rate in response to a rapid decline in oil prices. This time around it did so because the Canadian economy has not rebounded the way the Bank had hoped.

In an effort to stimulate spending, the Bank used one of its levers to lower the cost of borrowing. In doing so the value of the loonie further decreased thereby making imports more expensive and exports cheaper. The hope is that foreigners will both invest in and buy Canadian goods. The caveat to that appears to be Canadian real estate where many economists and policy makers would prefer that no additional investment takes place. The problem is, it’s hard to have it both ways. Continue reading

Minimize the costs of bidding wars

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Most Canadians know it's a better idea to stick to their budgets than get sucked into a bidding war, according to data from the Bank of Montreal.

Figures from the BMO Home Buying Report, which polled 2,000 adult Canadians, show that only 28 percent of homebuyers are willing to fight over a property. This number was higher for first-time homebuyers, with 39 percent saying they'd be willing to enter a bidding war over a home.

Data also shows that bidding wars were more likely to occur in Toronto, Vancouver and Calgary. In fact, a quarter of home sellers in Calgary said they purposefully under-priced their properties in an attempt to spur competition among homebuyers. Continue reading

Mortgage calculators can help homeowners pay off mortgages before the average age

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A poll found that the average age a Canadian person will be before paying off their full mortgage is 57, according to St. Lawrence EMC. This is up a few years compared to age 55 a similar poll conducted in 2012 found. Canadians are making positive changes to speed up mortgage payments, but it may actually be their non-mortgage debt that determines how quickly they can become mortgage free.

St. Lawrence EMC said that the poll found that residents in British Columbia had the longest repayment expectation at 59 years, and 50 percent of Canadians that own homes said since they first took out their mortgage, their non-mortgage debt has increased. Canadian homeowners also said that lack of funds keeps them from making lump sum payments. Continue reading

The ins and outs of mortgage rates

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It seems like not a week goes by that a major news story doesn't rock the Canadian real estate market regarding mortgage rates. While it's true that mortgage rates are an important factor when it comes to homebuying, it's even more essential for Canadians to understand exactly how mortgage rates work, and how they can affect home loans.

What are mortgage rates?
A mortgage rate is a term used to describe the interest on a home loan. For most individuals, obtaining a mortgage is a necessary part of buying a home. Mortgage rates are figured on the principal balance of a home loan, meaning how much money is still owed before the loan has been fully repaid. Since a higher balance means more interest, mortgage rates are typically more expensive at the beginning of a loan. As the balance is paid off, less interest is able to build up. This is also why homebuyers spend so much time searching for low rates, as lower interest means less money owed. Continue reading

Refinancing is good for more than just mortgage rates

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Ultra-low mortgage rates aren't just benefiting homebuyers. Current homeowners looking to save money on their monthly mortgage payments are taking advantage of low interest rates by refinancing. However, saving on mortgage rates isn't the only reason to consider refinancing. The act of refinancing provides mortgage holders with a number of options, and it's a good idea for all homeowners to explore these. Even if taking out a brand new mortgage to replace a current one doesn't make sense based on interest rates alone, the other opportunities refinancing provides should not be ignored. Continue reading

Mortgage brokers offer different options than banks

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When considering financing options for home buying, borrowers have two options: a bank or a mortgage broker.

According to the Eastern Morning Herald, Canadians are looking for the best possible mortgage rates. The statistics show that as Canada's housing market continues to recover from the global recession in 2008, mortgage brokers are favored for helping people with financing needs for their homes.

In one year, the National Bank Composite House Price Index was up 2 percent in April 2013. That's the smallest increase in 15 years. With the slow growth, tighter requirements and low interest rates, the mortgage market in Canada is becoming competitive. Continue reading

Ways to invest in real estate

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While investing is often associated with stocks and bonds, the Canadian real estate market provides potential investors with plenty of lucrative opportunities. When mortgage rates are low and properties are available, savvy buyers can make a tidy profit in the housing market. However, before an individual decides to invest, they must understand the different ways to invest in real estate, as well as the advantages and disadvantages of each.

Buying, selling and renting
Buying real estate directly is the most common way to invest. Buyers typically purchase a residential property at a low price, renovate it or wait until the market improves, and sell the property at a profit. Buying homes also presents Canadians with the chance to become landlords. Purchasing a property and renting it out to tenants can be a great way to bring in extra income on a steady basis. Continue reading