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
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
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
A report from PricewaterhouseCoopers spotlights new trends in Canadian views on debt, as well as the impact of mortgage restrictions on the real estate market.
Data from The Tide Turns: Canadians, Debt and Retail Lending study shows that more Canadians are comfortable with the amount of debt they're carrying, and they're also more focused on reducing it. Of 1,228 Canadians surveyed, 57 percent felt their debt level was about right. This marks a decrease from 59 percent during the previous year.
Meanwhile, 66 percent of respondents indicated that they plan on reducing their debt this year. This represents a 3 percent increase from last year.
Additionally, Canadians remain optimistic regarding the economy and their own financial situations. More than half (55 percent) of respondents said they think the nation's economy will remain stable or grow. Nearly half (46 percent) believe their income will rise over the next five years. Continue reading
Affordability is a hot topic in Canada's residential real estate market. While rising home prices mean greater value for homeowners, they can also translate to difficulties for prospective homebuyers. After all, a more expensive home will require more financing, something that can lead to more debt and ultimately foreclosure if a borrower is unable to stay current on their loan.
Data from the Teranet-National Bank's house price index shows that despite a decline in sales, home prices have continued to rise throughout the country. Overall, on a year-over-year basis, home prices increased 2 percent during May. This follows a 2 percent gain during April. Continue reading
Whether you're looking to purchase a property or refinance a current mortgage, there's no shortage of options when it comes to obtaining home loans. While most Canadians may associate taking out a mortgage with a visit to their local financial institution, the rise of computers has made it easier than ever for individuals to obtain financing, oftentimes from the comfort of their homes.
Online lenders are typically broken up into three types. The first type technically isn't a lender, but a website that aggregates products from many different lenders, offering interested parties a chance to browse what's currently on offer, including mortgage rates.
The second type is the online counterpart to a financial institution borrowers can visit in real life. These include websites for banks and credit unions where borrowers can fill out forms and find out their chances of getting approved for a home loan. Continue reading
It seems like not a day can go buy without some industry observer proclaiming that the sky is falling in the Canadian real estate market. However, if data from the Bank of Montreal is to be believed, maybe the end times aren't as certain as some may think.
While it's no secret that the housing market has cooled in recent months, the BMO's Housing Confidence Report shows that nearly half of Canadian homeowners (48 percent) intend to purchase a property within the next five years. This number is relatively unchanged from fall 2012, meaning Canadians still have a high level of confidence in the housing market. Continue reading
Cash back mortgages allow borrowers to receive money back after the closing of a home loan. These types of mortgages are perfect for borrowers who could use extra cash during the mortgage process. Contact Canadian Equity to take advantage of a cash back mortgage.
What is a cash back mortgage?
A cash back mortgage is a type of home loan that gives borrowers money back after the loan has been closed. It is possible to obtain a cash back mortgage on either a purchase loan or a refinance. The money you receive from a cash back loan can be in the form of a lump sum or instalments. There is no rule for what the money must be used for, but many borrowers use cash back mortgages to help pay for any fees that may arise during the home loan process, as well as for the costs of moving into and renovating a new home. Continue reading
It seems that recent good news regarding the Canadian real estate market wasn't an isolated incident, as new data shows home prices are on the rise.
According to the Teranet-National Bank house price index, home prices increased 2 percent overall on a year-over-year basis during May. This comes after a 2 percent gain in home prices during April, creating a pattern of slow but steady growth.
Seven of the 11 cities across the country tracked by the index saw prices moving up above the national average. Quebec City saw a rise of 6.5 percent, while Calgary and Hamilton each saw an increase of 5.8 percent. Winnipeg saw prices rise 4.6 percent, Edmonton experienced an increase of 4 percent and Toronto showed gains of 3.9 percent. Continue reading
When it comes to getting a home mortgage approved, "pre-approval" can be one of the trickiest factors in determining mortgage rates. With the housing market always at least somewhat in flux, many people looking to buy turn to pre-approval as a way to find a preferred rate as they search for a home.
But even for mortgage professionals, the term pre-approval can take on different meanings. And to make things even trickier, it is often conflated with the term "rate hold," which to the average consumer, as well as many lenders, sounds like two different things. However, some mortgage professionals view them as the same. So, how does one make sense of this already complicated process when people inside the industry can't even seem to completely agree? Continue reading