Month: June 2021

After months of continuous spiraling prices of the houses and hitting record-low mortgage rates, there are reports that the real estate market may be beginning to overheat. 

For the first time since the global pandemic, Canadian mortgage rates are commencing to inch up, reflecting a surge in long-term bond yields, and home loans still languishing around low levels, it can be perceived that the moderate rise is unlikely to slow the sizzling/hot housing market. 

The news of Pfizer’s (COVID-19 vaccine) more than 90% effectiveness led to the spike in bond yields in Canada and U.S.A. 

Following the news, first time since last June (during pandemic) the 5-year bond yield is now hovering around 0.50%. Since bond yields lead to an increase in fixed mortgage rates, that has caused some observers to suggest mortgage rates could potentially rise more in future. 

As per ratehub.ca, the Canadian five-year fixed-rate mortgage, climbed by 25 basis points last week to 1.64 per cent. It has been the first increase since January 2020. Mortgage rates had been trending lower in Canada since last March to support the economy during the pandemic. The slight move-up in the mortgage rates is a sea change for home buyers. As per the reports “there was a stampede to lock in rates last week and get pre-approvals”. This has encouraged buyers to lock in historically low costs before they rise further. 

With summer season around the corner, lenders across the country are announcing fixed-rate increases of between 0.1 and 0.2 percentage points. 

What would the hike mean? 

As per calculations by RateHub, the rate hike would imply an increase of $32 in your mortgage payment for buying a $500,000 home with a 10-per-cent down payment and a 25-year amortization. 

Though the cost increase is petty but, the borrowers are worried and wish to seal the best deal before the further rise.  

“It is important to mention a mortgage pre-approval at this time can help borrowers hold today’s rates for another 90 to 120 days, irrespective of rate change”. 

Now, what is the reason for the rise? 

What does it really signify? 

The upward trend surely signifies that economic prospects have brightened but simultaneously there is an increase in the concern about inflation. While variable mortgage rates tend to move up or down following movements in the trendsetting policy rate, fixed mortgage rates are usually more impacted by the bond market, which affects lenders’ own borrowing costs. The yield on the five-year Government of Canada bonds, which most heavily influence fixed mortgage rates, can witness a smattering of rate increase. The increase in rates can be seen as a game-changer in future but as of today. Mortgage rates remain very low by any measure and should not affect consumer behavior much. 

Looking for a complete guide and assistance on the mortgage process and rates, contact MMC today, we are here to help you and take the burden on our shoulders! 

If you’re reading this mortgage blog, you’re probably looking to buy a home right away or sometime in the near future. It’s an exhilarating time as you map out your budget, search for apartments in a location of your choice and plan the overall decor of your future home. But the most important thing to keep in mind is the type of loan you’ll avail and the steps prior to it.  

Getting a mortgage can be a bewildering process, especially if you’ve never done it before. To make matters worse, there’s a lot of fallacious and outdated information out there. 

In this blog post, we’ll debunk some of the common myths around mortgage so that you can be well-prepared and keep your eyes on the prize (your ideal home!).  

Owning A Home Seems Challenging & Renting Is Cheaper  

If you can afford to pay your monthly rent, chances are that you’ll be able to afford to make a monthly mortgage payment as well. To find out how much mortgage you can afford, talk to a qualified mortgage lender at your bank. You can even get a pre-qualification just to get a rough idea of how much money you could potentially borrow.  

Seek The Lowest Interest Rate  

Home loan interest rate should not be the only thing to consider when applying for a loan. It’s pertinent to keep other factors and costs in mind, such as LTV (loan-to-value) ratio, processing fee and loan tenure.  

Good Credit Score Equals Guaranteed Mortgage  

Of course, good credit score is a great thing to have when you’re applying for a loan but that’s not the only essential thing to keep in mind. Some of the other factors that play an imperative role in determining your credit profile are your monthly income, age, job stability, existing loans, and location of the apartment. Failure to meet any of these criteria may cause your home loan application to get rejected.  

Nationalized Banks Are Better Suited for Home Loans  

It’s true that nationalized banks may have more capital, which means a greater capacity to offer loans, but private banks tailor-make their loans according to the needs of the customer. Moreover, private banks may offer better customer service.  

Paying Off Your Mortgage Quickly Is the Ideal Choice  

We understand that you want to pay off your mortgage quickly, but that may not be the wisest financial decision for you. Instead of setting aside a big chunk of your income to pay as a mortgage each month, we suggest you invest that extra money for long-term returns. Also, by opting for a long-term home loan tenure, you will ensure that you never default on 

EMIs during financial emergencies (albeit reducing your chances to get loans in the future). 

If you’re preparing to buy a home, it’s important to educate yourself to avoid feeling browbeaten throughout the process. You can get in touch with us for better understanding and to separate mortgage facts from fiction. 

While you anticipate your mortgage as a 30-year adherence, it is quite equitable to set it and forget it. To check that you’re paying your mortgage swiftly as well as economically within the reach, it is very crucial to evaluate your mortgage regularly.

Our Mortgage Specialist shares some of the interesting facts about your mortgages every year. The facts have been discussed as follows:->

1. Anticipate Your Mortgage In Connection With Your Aspiration: Take time to concentrate with respect where one sees themselves two or three years down the line.

2. Scrutinize The Period Of Fixed Rate Accordingly: The right time to evaluate your loans is around the end of the fixed-rate period. Just keep in mind the end date of your fixed debt rate so that you can have enough time to investigate the finest course of action to structure your loan.

3. Investigate Your Repayments: Observe whether you can manage to raise your loan repayments, also acknowledge that on several occasions early repayment fees may apply.

4. Allow Your Loan Formation An Analysis: Evaluate if your loan structure is still functioning effectively or not. You can set up a slab on the floating rate so that you can make more annuity clearance. It is also suggested by the best loan advisors that one should break down their debt repayments with different fixed rates and should pay interest rates accordingly.

5. Book In For A Fiscal Robustness Study: Financial health research is a prominent chance to consult an expert and evaluate whether you are stuck in the same situation or it has improved now. My Mortgage Consultant provides everyone with a free financial health checkup. For more details, you can contact the Mortgage advisor at My Mortgage Consultant. 

Choosing to rent or buy a home on mortgage is a major decision that affects lifestyle and financial health. 

Most of us can’t wait to get on the property ladder – right? 

But to buy(mortgage) or Rent, that is the question. 

Buying a home is indeed an enormous investment for most people. So, it is important not to rush into a hasty decision but make a well thought out and planned decision. 

However, it is believed that in the long run, buying your own space usually offers better value than renting as owning brings emotional connection and a sense of stability that renting won’t bring.  

Buying versus renting a home is a very individual decision but, 

If you are on the fence and can’t decide, read on to get an insight on how Mortgage or owning is anytime better than renting. 

Mortgage vs Renting 

Let’s be honest, buying a home, or an office is no petty expense. Owning comes with a lot of responsibilities – large upfront costs, paying a deposit, legal and mortgage set up fees, recurring property taxes and insurance payments along with the cost of maintenance and upkeep. 

Whereas Renting is known as Dead Money as despite paying the rent every month, it doesn’t give you anything back. However, it is flexible and requires fewer responsibilities. 

Keeping those costs aside, mortgage repayments are generally similar in rent but have humongous benefits beginning with gaining equity, thereby diminishing monthly outgoings each month. Let’s dive in for more benefits and comparison; 

• As we know, mortgage encompasses debt and the interest, with each month’s repayment, there is a substantial decrease in the interest. So, monthly repayments get tiny as we head closer to finishing the mortgage repayments, thereby becoming the absolute owner in contrast to renting. You will only be a tenant despite paying the rent for months. 
• So, the funds paid towards repaying the mortgage provider also go back into the home in the form of investment. This means one can potentially make a profit if the property prices rise or use the property as a guarantee to get a loan or use it for future passive income (renting extra space or home), which is not possible in the case of renting as all the rent payments go to the landlord without any long-run benefits. 
• Mortgage payments can fluctuate, i.e., increase or decrease from year to year as the interest rate can change from year-to-year after an initial fixed-rate period. Still, with rent, payments can bounce considerably from one year to the next as the landlord increases the rent by a certain percentage every year. 
• A mortgage has a multitude of tax benefits as it includes interest payments, i.e., the cost of financing. In the early years of a mortgage term, one pays towards reducing the interest due on loan, and then luckily can reduce/cut down the mortgage interest payments to reduce the taxable income. Still, this deduction isn’t an option with rent payments. 
• Mortgages include homeowner’s insurance, whereas renters don’t have insurance, so are not shielded in the event of fire or theft as a landlord’s insurance policy doesn’t cover a tenant’s belongings. 

Now, few more privileges and perks for the owners in contrast to the tenants. 

• Owners will have more rights and can spend money altering fixtures, modifying and thereby improving the home and increasing its value without the landlord’s permission. 
• Soon after paying off the mortgage, one can live in their home for free and set up for a comfortable retirement. That’s not something you’ll ever be able to do as long as you’re renting. 

• Owning a home allows you to build wealth to purchase future homes as their homes gain value, and buying could also increase the net worth in ways renting can’t. 

As we all know, due to the pandemic mortgage rates have fallen to an all-time low. So, it’s worth looking at the average costs and various options to help you own your home or office. We at My Mortgage Consultant in association with Mortgage Alliance can help you decide which option is best for you and make the entire process hassle-free and seamless with our experienced and professional financial experts. 

Having the pride of homeownership indubitably showers the homeowner with a feeling of triumph, stability and security. Owning a home is one of the fundamental pillars of the Canadian dream but a mortgage can feel like a heavy anchor especially for new home buyers.
The global pandemic has dramatically pushed the interest rates to ultra-low. Such record low rates are the driving force behind the upswing of mortgage refinances. With economic uncertainty, refinancing can help give you some breathing room.

Refinancing is beneficial for lowering your monthly mortgage payments and is a great choice if you are “house poor” i.e. When a lot of expenses go into miscellaneous housing costs. Being house poor only multiplies the problem if you are stuck with a mortgage.

However, the concept of refinancing becomes a little bit challenging for homeowners with low or bad credit scores, but that doesn’t mean you will be precluded from refinancing due to an imperfect credit score. Unfortunately, bad credit happens. Especially due to the Covid 19, global pandemic thousands of people became jobless, illness prevailed.

What is Refinancing?

Refinancing your home can be a great way to save thousands of dollars during the entire mortgage term and to lower the interest payments, even with mediocre or below-average credit.
Refinancing basically implies taking out a new loan with different terms to pay off the original mortgage. Though refinancing can be tricky with a blemished credit score.
Refinancing often offers you with one or more benefits, including:
a lower interest rate thereby a lower monthly payment and lots of savings in the long term; a shorter payoff term; offers the opportunity to cash out your equity for other uses.

Thinking of Refinancing but worried about the bad credit?

Don’t Worry, Even if your credit is poor, read on to explore the eight tip that can help you smooth the process

1. Make sure to have all your ducks in a row

It is imperative to have all your ducks in a row before you begin with the process of refinancing as it can be a bit challenging to refinance with bad credit.
Having a bland or lacklustre mortgage application is surely not a good idea so make sure to include all necessary documents like tax documents, income statements and other supporting papers. Having more than the basic supportive information and documents will give you an upper hand and make you a good candidate.

2. Have Realistic Expectations

If your credit is lower than the average, or not that great, have realistic, practical expectations while refinancing your mortgage.
It is important to understand and accept that you will not be offered the lowest rate in the market, we aim to provide you with various options and multiple lenders that best suit your requirement.

3. Have Equity in Your Property

Sometimes refinancing becomes easy if you own more than it’s worth.
Most lenders grant mortgage or loan on the basis of the market value of the property and with the absence of your own investment, the mortgage becomes risky for the lender
Different lenders call for varying amounts of equity-like banks may desire you to have at least 25% of the home’s value invested, while other lenders might require 5% to 10%.

4. Explore and Discover the best rate

It seems easy to replace a 4% interest rate with a 3% rate but it is not! There are additional costs and fees associated with the mortgage such as closing costs etc. As a rule of thumb, it is sagacious to refinance only if you are saving at least half a per cent on your current interest rate, although the more the better. So, scout out for the right rate, and make sure to exercise patience in the quest for an appropriate lender and rate that best suits your situation.

5. Contemplate Government Insured Loans

As per the research, government-backed mortgages have become a popular choice as they often require less down equity and minimum requirements, making it easier to refinance with bad credit. Canada Mortgage and Housing Corporation can easily help you to understand your affordability and to determine whether refinancing is the right choice for you or not.
While it can be overwhelming to refinance with blemished credit, it is essential to understand lower interest rates can help you save millions of dollars over the years.

7. Be Cautious

Never opt for refinancing if your home has decreased in value. As the refinanced mortgage will be granted on the current value of the property. Thus, the refinanced loan can be less beneficial or of less value than the original mortgage loan.

8. Improve Credit Score

Bad credit is not everlasting, if you are not in a hurry to refinance consider improving your credit score by following good financial practices like making payments on time, avoid overspending from the credit card; have a stable job and so on. As improving the credit score enhances the chances of getting a good interest rate.

Refinancing your mortgage can alleviate some of the pressure and burden you may feel due to the current or original mortgage. It can lower your interest rate and costs to a certain degree.
If you are certain refinancing is the right and apt choice for you, MMC can help you throughout the process!

After months of continuous spiraling prices of the houses and hitting record-low mortgage rates, there are reports that the real estate market may be beginning to overheat.

For the first time since the global pandemic, Canadian mortgage rates are commencing to inch up, reflecting a surge in long-term bond yields, and home loans still languishing around low levels, it can be perceived that the moderate rise is unlikely to slow the sizzling/hot housing market.

The news of Pfizer’s (COVID-19 vaccine) more than 90% effectiveness led to the spike in bond yields in Canada and U.S.A.

Following the news, for the first time since last June (during pandemic) the 5-year bond yield is now hovering around 0.50%. Since bond yields lead to an increase in fixed mortgage rates, that has caused some observers to suggest mortgage rates could potentially rise more in future.

As per ratehub.ca, the Canadian five-year fixed-rate mortgage, climbed by 25 basis points last week to 1.64 per cent. It has been the first increase since January 2020. Mortgage rates had been trending lower in Canada since last March to support the economy during the pandemic.

The slight move-up in the mortgage rates is a sea change for home buyers. As per the reports “there was a stampede to lock in rates last week and get pre-approvals”. This has encouraged buyers to lock in historically low costs before they rise further.

With the summer season around the corner, lenders across the country are announcing fixed-rate increases of between 0.1 and 0.2 percentage points.

What would the hike mean?

As per calculations by RateHub, the rate hike would imply an increase of $32 in your mortgage payment for buying a $500,000 home with a 10-per-cent down payment and a 25-year amortization.

Though the cost increase is petty, the borrowers are worried and wish to seal the best deal before the further rise. 

“It is important to mention that a mortgage pre-approval at this time can help borrowers hold today’s rates for another 90 to 120 days , irrespective of rate change”.

Now, what is the reason for the rise?

What does it really signify?

The upward trend surely signifies that economic prospects have brightened but simultaneously there is an increase in the concern about inflation.

While variable mortgage rates tend to move up or down following movements in the trendsetting policy rate, fixed mortgage rates are usually more impacted by the bond market, which affects lenders’ own borrowing costs.

The yield on the five-year Government of Canada bonds, which most heavily influence fixed mortgage rates, can witness a smattering of rate increase.

The increase in rates can be seen as a game-changer in future but as of today. Debt rates remain very low by any measure and should not affect consumer behavior much.

As per Statistics Canada – Canadians took on $118 billion in additional mortgage debt in 2020, bringing total debt credit to $1.7 trillion, whereas Non-mortgage debt, on the other hand, declined by $12 billion, or 1.5 per cent.

Looking for a complete guide and assistance on the mortgage process and rates, contact MMC today, we are here to help you and take the burden on our shoulders!

If you’re reading this, you’re probably looking to buy a home right away or sometime in the near future. It’s an exhilarating time as you map out your budget, search for apartments in a location of your choice and plan the overall decor of your future home. But the most important thing to keep in mind is the type of mortgage you’ll avail and the steps prior to it. 

Getting a mortgage can be a bewildering process, especially if you’ve never done it before. To make matters worse, there’s a lot of fallacious and outdated information out there.

In this blog post, we’ll debunk some of the common myths around mortgage so that you can be well-prepared and keep your eyes on the prize (your ideal home!). 

Owning A Home Seems Challenging & Renting Is Cheaper 

If you can afford to pay your monthly rent, chances are that you’ll be able to afford to make a monthly mortgage payment as well. To find out how much mortgage you can afford, talk to a qualified mortgage lender at your bank. You can even get a pre-qualification just to get a rough idea of how much money you could potentially borrow. 

Seek The Lowest Interest Rate 

Home loan interest rate should not be the only thing to consider when applying for a loan. It’s pertinent to keep other factors and costs in mind, such as LTV (loan-to-value) ratio, processing fee and loan tenure. 

Good Credit Score Equals Guaranteed Mortgage 

Of course, good credit score is a great thing to have when you’re applying for a loan but that’s not the only essential thing to keep in mind. Some of the other factors that play an imperative role in determining your credit profile are your monthly income, age, job stability, existing loans, and location of the apartment. Failure to meet any of these criteria may cause your home loan application to get rejected. 

Paying Off Your Mortgage Quickly Is The Ideal Choice 

We understand that you want to pay off your mortgage quickly, but that may not be the wisest financial decision for you. Instead of setting aside a big chunk of your income to pay as a mortgage each month, we suggest you invest that extra money for long-term returns. Also, by opting for a long-term home loan tenure, you will ensure that you never default on

EMIs during financial emergencies (albeit reducing your chances to get loans in the future).

If you’re preparing to buy a home, it’s important to educate yourself to avoid feeling browbeaten throughout the process. You can get in touch with us for better understanding and  to separate mortgage facts from fiction.

It has been a crazy and turbulent year for the mortgage industry, with mortgage rates touching record lows several times. But If you still have been on the fence and haven’t refinance your mortgage or purchased a home, this is the right time to do so.

As for some time the economic outlook has bolstered due to a progressive and good fight against Covid and promising news of a vaccine. This has pushed up expectations for economic growth and inflation and thereby resulted in a spike in five-year mortgage rates.

Though we don’t have a crystal ball of fortune, it can be predicted that mortgage rates will inch more upward in the coming days.

The current upward rate momentum of the five-year Government of Canada (GoC) bond has prompted a hike in five-year fixed rates of mortgage.

As per the analysis by Benjamin Tal, deputy chief economist of CIBC World Markets Inc “the five-year mortgage rate growth should be gradual and slow or else it would jeopardize the Canadian economy’s growth. It could result in the economic turmoil and turbulence that potentially can be recessionary”.

It is clear and evident to all of us when a recession hits, economic activity crumbles, thereby a decline in business profits, a surge in unemployment and sinking or tumbling consumer spending. Government during this time generally lowers its bank rates to allow more people to access credit, thus stimulating spending to give a boost to the economy.

While it is also being said that gradual or progressive/unhurried rising of the fixed rate can be beneficial. The speed at which the rates are soaring is of utmost importance i.e., an increase of 20-30 basis points over time will be a favourable thing as it will tone down the housing market and tame the sizzling red-hot housing market that has been seeing the ascent during a pandemic. So piecemeal rise won’t be a bad thing!

If you are finding yourself in a situation that requires professional mortgage help contact MMC for best-suited options and advice.