Canadian housing market is strong, brokers’ group says

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Unless you've been living in the woods somewhere in the Northwest Territory, shut off from the outside world, chances are good you've heard it said that Canadian household debt has reached all-time highs. But despite dire warnings about crippling debt levels leading to a nationwide default on home loans, most Canadians say they're actually pretty comfortable with their current mortgages.

A new report titled "Confidence in the Canadian Mortgage Market" from the Canadian Association of Accredited Mortgage Professionals, an industry group representing mortgage brokers and other lenders, indicates the state of the market is strong. A significant majority of Canadians also appear to already be following much of the advice coming from government ministers and other financial regulators regarding the best ways to avert a national housing collapse like the one in the United States.

A number of financial bigwigs have called for certain changes in the rules governing home loans, specifically that minimum down payments should be raised from 5 to 7 percent, maximum amortization periods should be shortened from 30 to 25 years, and potential borrowers should be subjected to more rigorous financial stress testing to ensure they won't default on their loans if mortgage rates should rise in the near future. Continue reading

Report: 5.7 million Canadians now have mortgages, owe $860 million

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The Canadian Association of Accredited Mortgage Professionals recently released data concerning the country’s real estate and homeowners market.

The data revealed that 5.7 million Canadians now possess mortgages, collectively owing roughly $860 billion. During the last year, however, nearly 200,000 people have paid off their home loans.

The study also revealed that the amount of home equity is on the rise. During the last year, 15 percent of Canadians responding to CAAMP’s survey stated that they took out a loan against the value of their home, with the average loan worth $30,000.

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Canada Mortgage Market Still Competitive

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Canada’s Mortgage Brokers maintain Choice and Flexibility

Interesting information comparing mortgage markets abroad with the mortgage market of Canada was presented last week by CAAMP’s international mortgage panel.

According to the Australian mortgage market report, provided by CEO Phil Naylor of the Mortgage and Finance Association of Australia, only three per cent of mortgages attained in Australia are transacted outside of a bank.

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Online Course Aids Canadians in ‘Realizing the Dream of Home Ownership’

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In efforts to increase mortgage knowledge and financial responsibility among Canadians debating or planning toward home ownership, the CAAMP Foundation (the charitable division of CAAMP) and Credit Canada (a charitable, not-for-profit organization providing money management awareness to Canadians) have made available an online course for Canadian consumers.

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New Online Tool for Mortgage Brokers and Prospective Industry Professionals

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The Learning Management System (LMS) is the Canadian Association of Accredited Mortgage Professionals (CAAMP)’s latest initiative in helping to keep busy mortgage professionals up to date and educated on the latest advancements, guidelines, products and regulations in the Canadian mortgage industry.

Logging in will allow Canadian mortgage professionals access to engaging, comprehensive courses from anywhere they wish to access the website from. The LMS is available around the clock. Options from which mortgage professionals, or prospective mortgage professionals, can choose include:

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Filogix Expert, the Canadian Mortgage Broker’s Preferred Program

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Fliogix Expert is the software platform the majority of mortgage brokers in Canada use to send their applications to lenders in Canada for processing. In the last three months, more than 14,000 different mortgage brokers and 77 lenders used Filogix Expert to submit their mortgage applications in Canada.

Though Filogix Expert dominates the mortgage application platform industry, there are two competitors at this company’s heal: MorWeb and Axcess Canada. It is difficult for smaller companies to break into the platform technology industry. Amassing a wider margin of market share among Canadian mortgage brokers involves convincing both lenders and mortgage brokers that their platform is worth the training time, the implementing efforts and the introduction to clientele. Breaking into the mortgage application platform industry involves a large amount of financial and technological resources.

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Canadians Shed Contradictory Opinions in Recent Mortgage Study

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Perhaps influenced by whispers of housing bubbles and rates doomed to rise, fewer Canadians are saying that now is a good time to buy a new home in their community than they did earlier this year, yet numbers are still higher than those attained from surveys conducted by the same institution from 2006 to 2008. Canadians are also saying that, in their opinion, low mortgage rates have accounted for more people buying homes than should have. Yet, when asked their thoughts on their own mortgage, very few said that they regret committing to the mortgage they currently hold.

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Canadians Negotiate Lower Mortgage Rates

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A growing number of Canadians are negotiating lower than advertised rates, according to a survey conducted last month by CAAMP and Maritz. While advertised rates have averaged 5.65 per cent over the past year, Canadians who have opted for a five year, fixed-rate mortgage within that timeframe have managed to secure an average rate of 4.23 per cent, saving 1.42 per cent in interest payments over their term.

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Canada’s Mortgage Broker Count Plateaus

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According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), nearly 20,000 Canadians currently hold mortgage broker and/or mortgage agent licenses in Canada. However, it is assumed that only 12,000 of these are actually operating actively.

While Canada’s mortgage broker count saw numbers increase over the last three years it appears that these numbers have spiked and leveled out over the last year. Reasons being:

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Canadians Increasingly Looking to Hybrid Mortgage Products

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Nearly half of the prospective homebuyers aiming to purchase property over the next two years are intending to do so with a hybrid mortgage, says a recent survey conducted by the Royal Bank of Canada.

These numbers are up eight per cent from those attained in the same survey conducted by RBC last year. Yet, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP), virtually all Canadian homeowners with mortgages currently, or 94 per cent, have either a fixed rate or a variable mortgage. This means that only a potential six per cent of the market has actually committed to a hybrid mortgage.

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