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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Dissecting the one-year mortgage

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Many Canadian homebuyers know of long-term mortgage offerings, but not many know that they can take advantage of a one-year mortgage.

In a recent piece for Canadian Mortgage Trends, editor Rob McLister highlighted the benefits associated with a one-year mortgage and shed light on to why it is being overlooked in today's Canadian housing market.

McLister credits the emergence in popularity for 5- and 10-year home loan terms to the extremely attractive rates that are currently being offered for them. However, a one-year fixed mortgage lets the borrower renew into a 4-year fixed any term.

"The challenge with most 1-year terms, compared to variable rates, is that you usually have to wait until three to six months before maturity to secure (hold) your renewal rate," McLister writes. "By contrast, most variable-rate mortgages let you lock in at any time. That makes them preferable to 1-years in certain situations." Continue reading

CMHC changes homebuilding forecast

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Canada Mortgage and Housing Corporation has changed its forecast for homebuilding for 2013.

Citing slower economic growth and job gains, the CMHC has said demand for new homes will decline, leading to less homebuilding.

"CMHC expects housing construction activity will trend lower in the first half of 2013, before gaining more momentum by the end of the year as economic and employment growth remain supportive of the Canadian housing market," CMHC Deputy Chief Economist Mathieu Laberge said. "In 2014, improving economic conditions may be partially offset by a slight moderation in the number of first-time home buyers, and potential small and steady increases in mortgage interest rates."

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Mortgage opportunities in a low rate market

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Although recent data outlining Canada’s economic growth has been less than favorable, an article from Canadian Mortgage Trends makes the case that this offers a silver lining for mortgage borrowers.

For the last few months, the trend in long-term rates has been modestly up,” writes Rob McLister for the news site. “There is, however, little chance of a meaningful jump in fixed mortgage rates until 5-year yields push above 1.55-1.60 percent – and stay there awhile. And even if yields do break above that level, few expect enough inflation risk to justify a substantial upward follow-through – at least not in the next quarter or two.”

Essentially, McLister is making the case that limited economic growth means a continuation of low mortgage rates. Recent data has caused many Canadian economists to push back their forecasts for interest rate increases to 2014. Continue reading

Understanding title insurance

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Between dealing with mortgage rates and home loans, it’s easy for other parts of the home buying process to fall through the cracks. After all, who has time to worry about things like title insurance when you’re trying to find the best deal on a home purchase? However, with more lenders now requiring title insurance as part of a mortgage loan, it’s vital that potential home buyers fully understand what title insurance is, how it can protect them and ways to save money in the process.

What is title insurance?
Title insurance is a form of coverage that protects against losses arising from ownership in a property. When you purchase a home, chances are that it’s gone through a number of changes in ownership. This also includes the land the home itself sits on. Since human error or unforeseen problems regarding the transfer of ownership may lead to legal troubles regarding a home’s title, this insurance means that public records have been thoroughly searchedto ensure a property’s title is in order. It also means that if any problems do arise, the owner or lender will be covered. Continue reading

Saving time and money on landscaping

When you’re filling out a mortgage application, you’re usually thinking of the house you want to buy – the walls, windows, doors and roof. However, purchasing a property means becoming the owner of more than just a house. Your front and back yards are a part of the bargain, and they can add their own unique challenges to the home owning process. Enjoying a beautiful lawn or garden shouldn’t mean spending excess time and money, and by using some smart strategies, it doesn’t have to.

Low maintenance lawns
Properly taking care of a lawn means mowing, watering, edging, fertilizing and treating for pests on a regular basis. If you’re not doing it yourself, chances are you’re paying someone else to do it. Either way, it’s possible to cut down on the time and energy it takes to have a beautiful lawn.

While the type of turf used for traditional lawns may make for a more uniform appearance, low-maintenance lawns more than make up for it by cutting down on labor-intensive work and costs. By using special turfgrasses, fescues and broadleaf species, you can make your lawn hardier, healthier and slower growing without constant upkeep. Continue reading

Understanding interest-only loans

With mortgage rates still hovering near historic lows, many prospective homebuyers will be looking to take advantage of the current market and save money on their home loans. While there are plenty of opportunities to make buying a home more affordable, it’s important to understand the pros and cons of all your options.

One alternative that buyers may be unfamiliar with are interest-only loans. These types of mortgages are very rare in Canada, but it is possible for prospective homeowners to use them.

What is an interest-only loan?
Interest-only mortgage loans require buyers to only pay off the interest that builds from the principal amount they borrow. Since borrowers are only paying off the interest on their loan, payments tend to be consistently low throughout the process.

Interest-only loans appeal to first-time homebuyers and other borrowers looking to defer large mortgage payments until they have more income. However, it’s important to remember that the entire mortgage will need to be paid off eventually. Making interest-only payments is a temporary arrangement, and at the end of the mortgage term, borrowers will have to decide how to pay off the remainder of their loan. Continue reading

Buying a vacation home

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With mortgage rates near historic lows and home prices becoming more affordable, now might be the perfect time to consider purchasing a vacation home. A vacation home not only offers comfort and convenience, it also acts as a financial investment for homeowners.

Of course, it’s important to plan out your decision before scooping up a second property. By taking the most important aspects into account, you can ensure that your vacation home will offer fun and security for you and your family for years to come.

When it comes to vacation homes, location is one of the most important features to decide on. How close do you want the vacation home to your primary residence? Should it be in a more urban or rural locale? What areas do you visit most often? Continue reading

Deciding on a home

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It’s no secret that Canada’s housing industry has become a buyer’s market. Prices are declining, homes are becoming more affordable and excess inventory has made it easier than ever for prospective homeowners to weigh their options when selecting a home. On top of all that, mortgage rates remain near historic lows, allowing buyers to finance their properties with very attractive interest rates.

In fact, according to Scotiabank, Canada’s current housing climate has created the perfect storm for prospective buyers. Lax home sales are making properties more affordable, but the industry has entered a soft landing, as opposed to a crash that would make buying a home a poor investment.

In a report from Scotiabank, economist Adrienne Warren predicts that while the market will remain soft in the short-term, prices will not be plunging to a dangerous degree. Continue reading

When to refinance

While Canada’s housing market remains in the spotlight, most of the speculation revolves around home buyers. Newspaper articles and blog posts cover every angle of the industry, discussing sales numbers, home prices and how they affect prospective buyers. However, one segment of the population is being overlooked when it comes to the opportunities the current market offers: homeowners.

Despite tighter mortgage restrictions leading to a cool down in buying and selling, government regulations have done nothing to raise the ultra-low mortgage rates Canada is currently experiencing. While the fluctuations in the market make it that much harder for prospective buyers to decide on a plan of action, the window of opportunity for current homeowners has remained open wide with no immediate signs of closing. Continue reading