New mortgage rules could affect what you qualify for by 20 points: OneStreet Mortgage

This yesterday from our friends at OneStreet Mortgage.

“Effective October 17, 2016, all insured homebuyers must qualify for mortgage insurance at an interest rate the greater of their contract mortgage rate or the Bank of Canada’s conventional five-year fixed posted rate. This requirement is already in place for high-ratio insured mortgages with variable interest rates or fixed interest rates with terms less than five years. What does this mean for the average household?”

More on the OneStreet Mortage blog, here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Vidorra

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Home ownership gets slightly more expensive May 1, 2014 (for some)


riel_200As you may have already heard, home buyers without a 20% down payment, will soon be paying more to buy a house. As of May 1st, 2014 the standard CMHC mortgage insurance premiums will be increased by an average of 15%. This is the first rate hike to premiums since 1998.

With an average home price hovering around $300,000 in SK, the current insurance premium with 5% down is 2.75% or $7,837.50. Once the changes take effect this will become 3.15% or $8,977.50. A difference of $1140, or roughly $5 per month on a standard 25 year mortgage payment.

The two other private insurers (Genworth and Canada Guaranty) have also followed suit and will be charging the same premiums as of May 1st. A full list of all changes can be found here: http://www.cmhc.ca/en/hoficlincl/moloin/moloin_013.cfm

So what can we as home buyers do to combat this fee? I have two tips to help you ease the pain of these recent changes:

Make sure your financing has been submitted for approval prior to May 1st. As long as you make an offer and your bank/lender submits the file prior to May 1st, you can move in months later and the new premiums will not apply. I know this is a little unrealistic being that we are only days away from these recent changes but it is the most immediate solution.

Offset the expense with a better mortgage rate (you knew this was coming). Again, based on $300,000, a .10% difference in your mortgage rate, you will save roughly $1400 over the course of a standard 5 year term.

All in all, if you qualify to buy a home today, the changes should not impact your ability to purchase the same home after May 1st. Debt ratios will remain almost identical with the $5 per month increase to a mortgage payment so although these are higher costs, don’t expect them to change anything in the housing market.

Please free to send me an email, text, or call anytime. I am always happy to help home buyers with any questions they may have, strategize over future plans or save you money on your mortgage!

Riel Syrenne
TMG The Mortgage Group
306-260-9918
riel@mortgagegrp.com

CMHC announces premium increases effective May 1, 2014

CMHC announced changes to the insurance premiums paid by borrowers on high ratio loans and we wanted to share an update to keep you all informed.

Excerpted from the CMHC press release, any emphasis is ours:

CMHC to Increase Mortgage Insurance Premiums

“OTTAWA, February 28, 2014 — Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties effective May 1, 2014.

The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC.”

“For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market.

Effective May 1st, CMHC Purchase (owner occupied 1 – 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.

Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective May 1st, 2014)

  • Up to and including 65% 0.50% 0.60%
  • Up to and including 75% 0.65% 0.75%
  • Up to and including 80% 1.00% 1.25%
  • Up to and including 85% 1.75% 1.80%
  • Up to and including 90% 2.00% 2.40%
  • Up to and including 95% 2.75% 3.15%
  • 90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%

CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year. The homeowner premium increase follows changes CMHC made to its portfolio insurance product earlier this year.”

See the complete new release here.

Please call us today for a complimentary pre-approval including a rate hold at today’s best rates, and a mortgage commitment using CMHC’s current premiums.

Tawny Bley and Tyler Hildebrand
Mortgage Associates
Sky Financial Corporation
306-683-9539

What's happening in today's residential mortgage markets?

Amortizations are falling, rate discounts are increasing and consumers have flocked to fixed rates. Those are a few of the trends found in the Canadian Association for Accredited Mortgage Broker’s (CAAMP)  Annual State of the Residential Mortgage Market report. The following highlights were compiled by Canadian Mortgage Trends. Where do you fit in!

  • 16% of homes purchased in 2013 had amortizations over 25 years
  • 8% of respondents believe the housing bubble will burst within the next five years
  • 82% of new mortgages for homes purchased in 2013 were fixed rate mortgages
  • 2% of buyers with less than 20% down chose a variable rate mortgage
  • 40% of new mortgages in 2013 were obtained from a mortgage broker.
  • 70% of households with mortgages have 25% or more equity
  • 57% of 2013 homebuyers were first-time buyers
  • 84% of mortgages on homes purchased in 2013 had an original amortization of 25 years or less
  • 16% of borrowers  increased the amount of their payments in the past year – the average monthly increase was  $400
  • 17% of borrowers  made a lump sum payment – the average amount was $14,000

OTHER HIGHLIGHTS

  • 43% of current mortgage holders  consulted a mortgage broker about getting a new mortgage
  • 68% of respondents agreed their mortgages are “good debt”

INTEREST RATES

  • 3.23% is the average mortgage interest rate for mortgages on homes purchased in 2013
  • 3.20% is the average mortgage interest rate for mortgages renewed in 2013, which averaged 0.82 percentage point lower than prior to their renewal

EQUITY TAKE-OUT

  • 11%  of homeowners took equity out of their home in the past year with $57,000 the average amount
  • $59 billion is the estimated amount of total equity take-out in the past year
    • $16.6 billion was used for debt consolidation and repayment
    • $15.1 billion was used for investments
    • $12.3 billion was used for home renovations

REAL ESTATE/MORTGAGE MARKET

  • 9.52 million: The number of homeowners in Canada
  • 4.28 million: The number of renters in Canada
  • 5.58 million: The number of homeowners with mortgages (who may also have a home equity line of credit (HELOC))
  • 3.94 million: The number of homeowners who are mortgage-free
  • 2.3 million: Number of total homeowners who have HELOCs

MORTGAGING ACTIVITY

  • 450,000 of households bought homes over the past year
  • 400,000 of buyers took on mortgages

MORTGAGE MARKET OUTLOOK

The Canadian Real Estate Association (CREA) has revised its outlook to take into account a more buoyant market than expected. National sales have improved more quickly than anticipated. CREA’s forecast for national sales activity has been rebalanced with a modest upward revision this year to reflect stronger than expected sales for the year-to-date. Sales are forecast to reach 449,900 units in 2013. In 2014, national activity is forecast to reach to 465,600 units, a rebound of 3.5 per cent, and in line with its 10-year-average. The forecast increase reflects a gradual strengthening of sales activity alongside further economic, job, and income growth combined with only slightly higher mortgage interest rates.

I’m always happy to answer your mortgage and finance related questions. Feel free to call me any time at 306-260-9918 or drop me an email at riel@mortgagegrp.com.

Riel Syrenne
The Mortgage Group

You can see your credit report for free, it’s the law in Saskatchewan

Knowing what’s inside your credit report is more than just a good idea, it’s an essential part of any prudent financial plan. Saskatchewan law provides consumers with the opportunity to see their personal credit reports for free.

Understanding what’s in your credit report and how it can affect you when applying for a mortgage is a must. Making these inquiries in advance can help you get through the home buying process smoothly and without surprises that could derail your move. However, there are other good reasons why we should all be familiar with the information that credit bureaus collect and store on our credit history.


Identify theft continues to be a problem across the country. Thieves are racking up massive debts, using the good names and credit of their victims and leaving behind a financial mess that’s difficult to clean up.Keeping on top of your credit report will help you find out if someone is using your credit, hopefully before the creditors come knocking on your door, attempting to collect the debts that have accumulated in your name.


There may be another good reason to be mindful of your credit report. It seems that a number of employers in the U.S. are beginning to request credit reports from prospective employees. I’m not completely sure why they feel this is justified. I suspect that they would argue that a person’s credit worthiness speaks to that individual’s sense of responsibility, and perhaps their character. After all, the granting of credit is always based on the promise to repay. I don’t know if we’ll ever see this practice used here, but I see nothing in the Saskatchewan Human Rights Code that would prevent it.


Our province has a Credit Reporting Act which governs the types of information that credit reporting agencies can keep on you, and how long it can be kept for. The federal Personal Information Protection and Electronic Documents Act states that you have a right to know what information credit reporting agencies have about you in their files.


There are two major credit reporting agencies which operate in Canada. They are Equifax and Trans Union. Both of them will have information in their files concerning your credit history. If you need to have the report today, both services offer an over the web credit report for a fee. They also offer a free credit report which is sent to you in the mail. It is your right to obtain a free copy of your credit report each year but you must request that it be sent to you. The links below will take you right to the page of each agencies website where you can download the forms that you’ll use to make that request. Why not get started on this today?


Equifax credit report

Trans Union credit report


Publication titled, “Understanding Your Credit Report and Credit Score” published by the Financial Consumer Agency of Canada.


I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

This post was originally published November 26, 2006 and has been updated to include current links.