Top Calgary Mortgage Broker

Completed 2% of all FTHBI mortgages in YYC

Are you looking for a Mortgage Broker who specializes in the FTHBI in Calgary? That would be us!

We have completed 6 of these deals in 2019. There was as total of 260. So that puts us at completing 2.5% of the entire Calgary market for this program. Interesting!

Obviously, we love this program for these 2 reasons:

  1. You save between $100 and $200 per month on the mortgage payments. For sure. From Day 1.
    1. The point of the program is to lower your mortgage payments. When the government puts 5% down for you, it lowers the total balance outstanding and this lowers the payments.
  2. You save about $4000 in the CMHC fees.
    1. You put down 5%, and the government matches 5% on existing homes. That means your CMHC fee is based on 10% down and not 5% down, and you save that from Day 1 as well.

The down side

The down side is this is registered as an interest free loan from the government. You still pay them back 5% of the sale price when you sell. That is 5% of whatever the sale price is so it could be more or less, but it is still 5%.

“The down side is not a big deal!

Guaranteed lower mortgage payments and lower CMHC fee! This is a win!”

Mortgage Mark Herman, Top Calgary Mortgage Broker near me.

FREE RESEARCH Data on the First Time Home Buyer Incentive from Mortgage Mark Herman.

  • Call us for all the data you need on this program.
  • We have it all and can explain it to you -it is a long, boring read.

Here is the link to the full article, pasted below

Four months after its official launh, CMHC’s First-Time Home Buyer Incentive had funded just 4% of its three-year goal, according to new data provided by the agency.

From the time the down payment assistance program launched on Sept. 2 to Dec. 9, CMHC received just 3,252 applications from across Canada, 2,730 of which were approved. That translated into total funding of $51.3 millionwell off pace of the agency’s three-year target of $1.25 billion.

Under the program, the government will provide first-time buyers with an interest-free down payment loan of up to 5% for resale purchases, and 10% if the property is a new build. The CMHC then participates in any rise or fall in value of the home, and the loan must be repaid either when the house is sold or within 25 years.

Interest in the program was highest in Quebec, where 1,300 applications were received. Comparatively, just 436 Ontarians applied, according to statistics that were tabled in Parliament last week.

Here’s a look at the breakdown of applications from some of the major housing markets across Canada:

  • Greater Toronto Area: 148
  • Vancouver: 45
  • Edmonton: 447
  • Calgary: 260
  • Winnipeg: 144
  • Montreal 654
  • Halifax: 64
  • New Brunswick: 60
  • PEI: 12

CMHC head Evan Siddall defended the results via Twitter on Friday:

“In addition to CMHC’s challenges in estimating demand for the FTHBI, uneven lender support is a complicating factor,” he tweeted on Friday. “It may also be evidence that there is less unsatisfied FTHBI demand due to the stress test than people claim. People can always buy less expensive homes.

Why is the FTHBI Unpopular?

Since the initiative was first announced in the Liberals’ spring budget, many in the industry have criticized it for being overly complicated and promising negligible benefits.

One of the biggest restrictions of the program is that it’s currently limited to purchases of up to $565,000. In markets like Toronto and Vancouver, buyers can be hard-pressed to find available properties under that threshold. According to recent data from the Toronto Real Estate Board, the average sale price in December was $837,788.

Many buyers have also expressed unease at the thought of giving up equity in their home, particularly with prices rising rapidly in many markets across the country.

While Prime Minister Justin Trudeau promised tweaks to the FTHBI during last year’s federal election, no additional updates have since been provided. The proposed changes would increase the maximum purchase price eligible under the program to $789,000 for buyers in Toronto, Vancouver and Victoria.

It remains to be seen whether the FTHBI’s slow start is a harbinger of future demand over the coming years, or whether first-time buyers will grow more receptive to sharing a chunk of their home equity with the government.

Calgary top-rated market for overall real estate prospects

­ Calgary top-rated market for overall real estate prospects

This is great news for buyers … you are buying a home and a great investment – not the case for other provinces.

As we have always been saying … Alberta’s in-bound migration and strong job market will support home prices.

Did you know that Alberta is short 25,000 jobs in the oil field right now? That is going to continue for the medium term! – Mark Herman 

Strong economic and employment growth forecast

CALGARY – For the second year in a row, Calgary is the top-rated market in Canada for overall real estate prospects, according to a survey of industry experts.

Calgary kept the top spot with the highest ratings for prospects in three categories – investment, development and homebuilding, said the Emerging Trends in Real Estate report by PwC and the Urban Land Institute.

“The Calgary economy continues to post solid gains, despite the disruption caused by summer flooding,” said the report. “The energy industry, primarily oil, remains strong and will continue to benefit from economic growth around the world.

“Locally, energy and energy service companies have dominated office demand. Economic activity is being supported by growth in both the goods and services sectors. Manufacturing and construction will lead the goods sector, and personal services and transportation and warehousing are the key drivers on the service side.”

The report is based on a survey of over 1,000 industry experts including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.

The ratings of other Canadian cities in order following Calgary are: Edmonton, Saskatoon, Vancouver, Toronto, Winnipeg, Ottawa, Halifax and Montreal.

The report said economic activity in Calgary is projected to grow at a 3.3 per cent rate in 2013 and a 3.4 per cent rate in 2014. Employment growth is expected to slow but remain good through the end of this year and into 2014, growing at 2.4 per cent and 2.8 per cent, respectively.

Is there ever a bad time to invest in a rental property?

Fabio Campanella, Special to Financial Post  May 22, 2012 – 10:48 AM ET

Record low interest rates coupled with an overly extended bull market for Canadian residential real estate has some investors questioning the validity of investing in a rental property.

Current economic indicators support these fears: mortgage rates scheduled to rise, a global economy not yet out of the recessionary trenches, residential real estate prices in Canada that have clearly outpaced increases in general earnings over the last decade.

This all paints a compelling picture supporting the hesitation some investors have when dealing with rental properties. But is this hesitation legitimate? Is there ever really a good or bad time to get into the real estate rental market? The answer is yes, and also no; it all depends on your current financial situation.

If the Toronto residential market is used as a barometer we can see that residential real estate has treated us quite well over the past 20 years. During the period from 1992 to 2011 the average sale price for a home in Toronto increased from $214,971 to $465,412 according to the Toronto Real Estate Board (TREB).

That’s a 116.50% ROI over 20 years or 3.94% compound annual return, and that’s just the price increase not including any potential rental profits. In fact, over the last 20 years we have only seen four years of negative returns in the Toronto market and they all fell between 1992 to 1996.

Assuming you were to have purchased an average single-family Toronto rental property in 1992, put 25% down, taken a mortgage for the rest, and found a tenant who’s rental payments covered only your property’s basic operating expenses, taxes, maintenance and the interest portion of your mortgage (leaving you to cover the principal portion yourself) you’d have achieved an 11.40% annualized return on investment as at the end of 2011.

Not bad considering that the TSX would have given you 8.69% over the same time period. Using the same assumptions in the previous example on rolling 20-year periods from 1966 to 2011 the average investor would have achieved annualized compound returns of 13.96%.

In fact even if you were to have purchased a property at the bull market peak just before the infamous GTA real estate crash of 1990 you would still have achieved an 8.94% ROI if you held the property with a decent tenant until 2008 even though the value of your investment would have dropped by 25% over the first 4 years.

So what’s the point? Are rental properties a good investment and is this the right or wrong time to make a move? The answer is yes but only if you’re in it for the long-haul and only if your current financial position allows you to do so. Novice investors tend to follow market momentum and stretch themselves thin. They see prices increasing year over year then go out and take massive amounts of leverage to get in on the action “before it’s too late.”

What often happens is they buy more than they can handle, they don’t do proper due diligence on their tenants, and they get caught with a dud investment that they can’t support with their personal cash flow. This frequently leads to panic selling in order to raise funds to pay off large amounts of debt consequently resulting in losses.

Smart investors take their time. They seek out properties in desirable neighbourhoods, scrutinize their tenant’s ability to make rent payments before they take them on, manage the property with a keen eye, but most importantly they do not over-extend their leverage. Smart investors realize that there may be times that tenants can’t make rent or that markets may temporarily turn south.

Even if the original intention for a real estate investment is a short term flip, the smart investor will not purchase a property they aren’t able to hold over a long period of time should price momentum not go their way in the short run.

Direct investment in real estate is not like buying a passive investment such as a mutual fund. It requires a time commitment, experience, and patience but the long-term results can be superb when done properly.

Fabio Campanella CA, CFP, CIM is a partner at Campanella McDonald LLP.

Dont get excited about BMO’s 2.99% mortgage again.

BMO is bringing back the 2.99% mortgage again. Don’t get worked up about it. It is just as super-restricted as it was before, 25 year am max and there is a Due on Sale clause causing a need for a payout – which could be literally thousands in penalties.

This mortgage does not fit for most people.

We can get you a full-featured product for the same rate without the crazy risky down side.

Credit Score Info – this is great data

Below is a good article on credit scores.

Mortgage applications are evaluated on 4 factors. You can think of them as “legs of a chair.” If 1 or 2 legs are shaky it could still stand if the other 2 are strong. Obviously, a 1, 2 or 3 leg chair does not work so well.

The 4 factors are:

  1. Credit report and score – this article is all about this point
  2. Down payment amount and source of funds
  3. Employment history
  4. and Property quality.

There is lots of good info below on #1 and here are the magic percentages that are hard to find:

  • 35% of your score is your debt -to-limit ratio of your existing credit. There are extra points for balances at less than 50% of the max and you slowly lose points as you get up to 75%. Even $1 over limit can cost you 50 points or more.
  • 30% of your score is your repayment history. Ensure you make ALL of your payments on time, even if it is only $10. These are tracked for 7 years so on time payments are super important. Remember to pre-pay if you are going to be away on holiday – this is where most people get caught.
  • Only 10% of your score is based on “credit inquiries.” There is more on that below.
  • The final 25% of your score is based on a few other “things” like:
  1. your credit mix (installment payments like car loans and RRSP loans, and revolving credit like credit cards)
  2. the length of time your that you have had credit – banks like to see 2 years for each to get a good idea of what your long-term behavior is like.
  3. and collections, judgments, other “things”

So … Why is it so important to have a good credit score? 

“When a client is applying for a mortgage, they need to bear in mind that lenders (and in most cases, the insurers as well) put considerable weight on the applicant’s credit score,” explains Leslie Penney, a mortgage professional in St. John’s.

“It’s basically a snapshot of a client’s credit situation at that moment in time, although it also reports on the client’s credit history.” 

Credit scores are determined by using a complex formula and rating scale, says Penney.  Credit rating agencies look at your income, your debt repayment history, your total approved credit limits, your credit usage levels and more and that information is crunched into a scoring system that assigns a number of between 300 and 900. This is known as your FICO score. The higher you are on the scale, the less risky you are to a lender.

For example, says Putnam, a number of 750 to 799 is shared by 27 per cent of the population. Statistics show that only two per cent of the borrowers in this category will default on a loan or go bankrupt in the next two years. So that means that anyone with this score is very likely to get that loan or mortgage they’ve applied for. These scores, which are called beacon scores, may also be used to determine the interest rate you will pay on the loan for which you’re applying.

Credit rating agencies like Equifax Canada and TransUnion Canada are typically used in Canada to determine scores. Remember that your credit report or rating is not the same as your credit score, though they’re closely linked. You can get your report or rating from Equifax or TransUnion for free by going to their websites. Equifax now offers a phone based service for free reports without score at 1-800-465-7166. Your credit score will cost you approximately $23 and it will include your credit rating or report. See the appropriate websites for more information. 

Mortgage and credit experts all recommend getting a sneak peek at your credit rating yearly or every two years. The main reasons for this are to ensure that the information the credit bureau has is accurate and to make sure you’re not the victim of fraud. “Because we love to borrow money, that means almost every adult Canadian has a credit file,” explains Putnam. “More than 21 million of us have credit reports. And most of us have no idea what’s in them. Are there mistakes? Have you been denied credit and don’t know why? Is someone trying to steal your identity? A simple check of your credit report will probably answer all those questions.” 

Factors affecting a credit score are paying your bills on time. This one weighs fairly heavily with some estimates as high as 35 per cent, says Tanner Coles, a mortgage expert at Dominion Lending Centres in Surrey, B.C.   “Most of the public is aware that by failing to make debt payments on time or not at all, that will damage their beacon score,” he says.  “I cannot stress enough how important it is to make your payments on time, even if it is just the monthly minimum.  The credit report will show when you have made late payments and how many times.  This is a large red flag for lenders.  They want to see that you are able to pay your debts.  The riskier it is for the lender, the harder it will be for you to obtain a mortgage.” 

Don’t be afraid to use your credit as lenders want to see a history of repayment, says David Larock, an independent mortgage agent in Toronto. But keep your credit card balance well below your account limit. “Most people don’t realize that spending up to their limit every month will hurt their score, even if they pay in full each month,” Larock says. “There are two ways to address this: spend less or get your limit raised. In fact, raising your limit, if you qualify, is one of the easiest ways to help your credit score.” 

Consumers also need to be wary of heavy-duty credit seeking, says Kristian Harris, a mortgage broker with in Toronto. Harris is adamant that consumers should not apply for every credit card that comes their way as this will bode poorly on your rating.  “Unless you absolutely need it, don’t do it,” he warns. “Typically, the ones that need credit are the ones who use it, and they’re the ones who get in trouble.” 

Most credit holders are unaware that your credit is negatively affected every time a company checks your credit, says Coles.  Your score may decrease by a couple points every time you authorize an inquiry.  “This is a major benefit of using a mortgage broker rather than shopping for a mortgage on your own,” he says. “A mortgage broker is able to pull a credit report once and use this report to find you the best product.  A consumer who approaches five different banks about a mortgage will have five different credit inquiries which will hurt their beacon score.  Sometimes this is difference between being able to get a great discounted rate or not.”

Larock thinks borrowers need to be wary of having too many credit lines. A series of small loans can hurt your score because it looks like your cobbling together any credit you can get your hands on and lenders will worry that you could end up in a position where you have borrowed more than you can pay back.

The best way to avoid this is to consolidate your debt into one large loan, he recommends. Negative credit issues can stay on your record for quite a while, depending on what province you live in and the type of issue reported. Three to six years is the average length of time that negative credit information must stay on your record in most provinces.

If you have poor credit, don’t despair, says Harris. Resolve to improve your rating by paying down balances and paying your bills on time. People with exceptionally poor credit need to re-establish their credit by getting a secured credit card. These cards are similar to gift cards as you pay the credit company upfront and then make purchases on it until the balance depletes.