403-681-4376
8AM - 5PM Mon - Fri
103E – 1144 29th Ave NE
Mark Herman – Calgary Mortgage Broker

Housing crash is not likely to happen in Canada.

November 30, 2010 Canadian mortgage, real estate

Ben is one of the best economists around and is usually correct….

Benjamin Tal, senior economist for CIBC World Markets told delegates at the Canadian Association of Accredited Mortgage Professionals (CAAMP) conference in Montreal that the U.S. housing collapse is unlikely to rebound soon, and that it will take until 2017 for house prices to rise to the point where the average person in the U.S. is able to get out of negative equity. He said what is leading the U.S. economy right now is “a renaissance of the U.S. manufacturing sector” something being driving by emerging markets. He said Canadian companies can take advantage of this as suppliers to U.S. firms. His advice to brokers when discussing the economy was “You can’t just discuss the Bank of Canada, You need to discuss the U.S., China and emerging economies.” Commenting on the global economy, Tal declared “the Chinese consumer will be the most important force in the global economy for the next 10 years.” He said this is good for North America, as the Chinese are “starting to demand quality” and would buy more goods. Tal said this recovery timeframe is critical as America’s housing market is what is driving its economy, and so this will impact other economies, as well as interest rates for mortgage holders. Tal said he was “almost positive the [U.S. Federal Reserve] will not change rates until mid 2012” and that the Bank of Canada would not “take chances” and raise rates significantly above the U.S. While “the next few quarters are safe” from Bank of Canada rate hikes, Tal said Canadian consumers are “exhausted” due, in part, to a 146% debt-to-income ratio, and as a result, it won’t take many rate hikes in future to slow the economy. Tal also indicated a housing crash wasn’t in the cards. For that to happen you need two things, higher interest rates and poor quality mortgages, both of which are absent in Canada. “The trend of the vulnerable sector is declining as a share of the mortgage market,” he said.

However, Tal said that if rates rise, mortgage defaults will actually drop. He explained that is because rising rates imply rising employment, which influences defaults more than anything. Read More

Canadian Prime staying at 3% – maybe for half a year

October 19, 2010 Canadian mortgage, economy, real estate

Comment – this article exactly summarizes our thoughts for how things will play out:

Prime will stay at 3% for 6 months, mortgage rates will stay low as long as the stock market bounces all over the place and now is a great time to take advantage of the situation by redoing our mortgage or buying.

Bank of Canada holds key rate at 1%

OTTAWA — Interest rate hikes are on hold until at least the spring and maybe as long as late 2011, analysts say, as the Bank of Canada decided Tuesday to keep its policy rate unchanged amid weaker-than-anticipated growth, especially in the United States. Read More

TD mortgages get harder to get out of

October 13, 2010 Canadian mortgage

Comment:

TD mortgages just became less appetizing as they are now very difficult to get out of. We do not use them much and now even less.

TD bank overhauls mortgage program

| Wednesday, 13 October 2010 TD bank is redesigning its mortgage program to make it easier for homeowners to tap into their equity and harder for them to switch to another lender when their mortgage renewal comes up. The main difference of the overhaul is a switch to collateral-charge mortgages, which are similar to lines of credit. The bank is encouraging employees to approve customers at 125 per cent of a home’s actual value with certain conditions, so the homeowner can easily borrow more money if the property value increases. Unlike traditional mortgages, collateral mortgages are difficult to transfer from one lender to another because they must be paid in full to be cancelled.