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WHY CHOOSE A MORTGAGE BROKER?

WHY CHOOSE A MORTGAGE BROKER?

It’s almost instinctual to think of your bank when buying a home or making changes to your mortgage. Ask yourself this, would you go to one dealership to buy a car or would you shop around for the best price? A mortgage broker does exactly that, we take your information and shop all the banks/lenders on your behalf. This not only saves you time and stress, but it also prevents you from having several credit reports pulled, in return protecting your score. Today you have the convenience and the opportunity to work with a mortgage broker who is solely working on your behalf, accessing and locking in the lowest rate available to you.

Why is a Mortgage Broker the right choice for you?

  • One-Stop-Shop
  • Using a mortgage broker is FREE in almost all cases
  • Clients fill out one application and don’t have to seek out multiple lenders’ quotes
  • Brokers have access to multiple lenders with better rates, including:
    • Major Banks
    • Credit Unions
    • Niche Lenders
    • Insurance and Trust Companies
    • Private Funds
  • Mortgage brokers are true specialists and are knowledgeable about what different bank/lenders have to offer.
  • May be able to arrange a mortgage for those having trouble getting approved by banks, such as:
    • Self-employed individuals.
    • Those with poor credit history

Chilliwack Mortgage Broker

With a Mortgage Broker

You will have an individual hands-on experience, a person who unbiasedly works on your behalf while walking you through all the steps involved.

A Broker does more than just find you the best mortgage, they discuss your personal financials and lifestyle situation, whether you plan to stay in your house for a long period of time or use it as an investment tool. We also provide you with details on various banks/lenders, discussing the pros & cons of fixed vs variable rates as well as any cancellation or prepayment policies. We break your mortgage contract down in simple form so every aspect is understood by the mortgagor.

Getting a mortgage is an enormous step for anyone, don’t do it alone, contact our team at Browne Mortgages + More to invest in arguably the biggest decision of your life!

 

Mortgage Payments Suspended in Italy due to Coronavirus (COVID-19)

Mortgage Payments Suspended In Italy Due To Coronavirus (COVID-19)

In a surprising twist today Italy mortgage payments where suspended for the foreseeable future due to the Coronavirus outbreak.  This was done to help the public as Italy has instated a “lockdown” where the public is only allowed to travel to and from work and for emergencies.

This is obviously going to affect employment throughout the nation as places of employment such as movie theaters, Museums and sporting events.  All people will be without pay from various other industries where gatherings happen such as restaurants.

Who will this affect?

Homeowners – Obviously this will help support those who own homes as they currently are talking of suspending mortgage payments for up to 3 months.   There is still an additional cost to running a home such as insurance, taxes, and utilities.  While it will be a relief there will still be expenses

 

Renters – At the time of this writing there was no talk about suspending rents.  I would be shocked if the government only gave a reprieve to homeowners while renters still had to pay.

 

Investors – If the government does suspend rental payments people that own multiple rentals or rental buildings will be hit.   While yes they will not have to pay the mortgage payments on the property (if they have one) but they will still have to pay all the cost associated with carrying that rental while having no income coming in.

 

We like to think that this is a problem halfway around the world but considering just two weeks ago (Feb 25th) Italy only had 280 cases and now close to 10,000 just shows how quickly things can change.

Strata Fee Increase & Lowering Your Payments

Chilliwack Mortgage Broker Strata Fees

 

Strata Fee Increase & Lowering Your Payments

We’ve recently been informed by strata insurance companies in our local area, that people who are currently in stratas could be looking at a 30% – 100% Increase in the strata insurance. This will cause an increase in your strata fees.

If you are in a strata & are looking to consolidate or lower your mortgage payments to cover this, please give us a call!

 

 

Opportunity Arises to go from Renter to Homeowner – Chilliwack BC

renter to homeowner - Chilliwack Mortgage Broker

 

As a Chilliwack mortgage broker, we tend to experience similar seasonal changes as our local real estate partners do, with some exceptions. Purchase season will often slow down around Christmas, picking back up in February and continue snowballing until it reaches it’s peak in the early summer weeks; however, this year appears to be drastically different than previous years. Rather than slowing down in mid July – mid August (often prime vacation time), the pace of home buying/selling doesn’t seem to be slowing down anytime soon. Therefore, us being Chilliwack mortgage brokers, we took it upon ourselves to do a little digging and come up with some sort of conclusion as to why this may be.

 

3     things became clear to us:

1)      Home values have decreased as much as 10% since 2018 and as of recent, this decrease in home value has reached as much as 19.49%.

2)      Interest rates have significantly dropped compared to last year as much as 0.90%

3)      The Bank of Canada recently lowered its stress test rate from 5.34% – 5.19%

To some, the change in Chilliwack’s real estate might not seem to be hugely different, to others this change can take someone from a full-time renter to a first-time homeowner.

Below is a comparison to show Chilliwacks new interest rates/housing costs, and how these changes have increased purchasing power for many Canadians.

 

August 2018

Mortgage amount = $500,000

Interest rate (5 year fixed) = 3.79%

Amortization = 30 years

Monthly mortgage payment = $2318.53

 

August 2019

Mortgage amount = $450,000

Interest rate (5 year fixed) = 2.89%

Amortization = 30 years

Monthly mortgage payment = $1866.48

 

That is a $452.05 difference in monthly mortgage payments!

 

 

Canadians Reach Highest Debt Service Levels to Date

Chilliwack, BC – Alarming statistics were released stating that Canadians are paying the highest percentage of their income, towards debt. Although the headline may seem alarming our Chilliwack mortgage brokers are advising that it’s in fact not as frightening as it sounds.

Yes, Canadians will have less disposable income left to spend on life outside of servicing their debts. The difference is that a significant amount of that debt payment is going towards principal pay-down rather than interest. In the early 90’s over 95% of debt payments went towards interest, whereas now 50% of our debt payments are going towards interest – that’s a 45% decrease in the percentage of that payment going towards interest while the remaining 50% is going directly towards paying down the principal amount on said debt owed.

The percentage of our income has barely budged for servicing mortgage debt, in fact majority of the increase in debt has been obtained outside of residential mortgages.

When talking to consumers, it appears that the mortgage payment itself isn’t core of financial stress for home–owners. The culprit causing this overwhelming amount of debt really derives from car loans, credit cards and lines of credit.

We think it would be beneficial for the government to consider regulating these industries in the same way they regulate mortgage financing.

For more information check out our Facebook page for a video of our founding partner and licensed mortgage expert, Jordi Browne – as he sheds some light on the topic.

Highest Debt - Chilliwack Mortgage Broker

 

Elections & Changes For Canadian Home Buyers

With elections six months away, Canadian homebuyers are hopeful for a solution to address the housing affordability issue and so are we. It’s undeniable that certain rule changes have made housing unaffordable for several homebuyers across Canada, but these changes not only affect those trying to buy, they also affect Canadians who have been homeowners for several years.

Often referred to as the “stress test”, home buyers and homeowners are required to qualify for a mortgage on the greater of either: 2% above their contracted rate or the posted benchmark rate. This mortgage stress test drastically limits funds available to those trying to buy, refinance, and even renew their homes. It is likely that our government will take action to hopefully make housing affordable again, we just don’t know how beneficial those changes will be to Canadians.

There are rumors of a proposed change that could cost Canadians an extra $40,000 of interest on the average $400,000 – here is our take on it.
Elections in Canada - Chilliwack Mortgage Broker

Government Introduces a Real Blunder of a Program for Home Buyers’

Here are my thoughts regarding the government’s offer of an interest-free loan in exchange for a percentage of ownership in your home.

On January 17, 2017 the BC liberals introduced something similar called the BC Home Partnership Program. The program offered to match home buyers’ down-payment costs with an interest-free loan for the first five years. When NDP took power back in March of 2018, they removed the program stating that,Home Buyers - Chilliwack Mortgage Broker

            “When the program was first introduced, it was anticipated it would provide 42,000 loans over a three-year period, however, as of January 31, 2018, there were fewer than 3,000 loans approved.”

While the program sounded advantageous and enticing, popularity was minimal simply due to an unachievable list of requirements and restrictions. These restrictions filtered several prospective buyers wanting to part-take in the program. In addition, the return was not equivalent when comparing to the hoops Canadian homebuyers needed to jump through. Furthermore, lenders reacted to the program by putting a repayment factor on the interest-free loan that hindered the initial benefit of not having to make payments for the first five years.

Moving forward, I predict that we will have even fewer loans approved as the number of insured mortgages in addition to the CMHC incentive, would be capped using a formula (4X your annual income up to a max of $480,000). In simpler terms, Fraser Valley home buyers making $60,000 a year, would qualify for a $240,000 purchase (that really doesn’t get you a whole lot).

We’re not yet certain as to how this will be implemented, but if there is a repayment factor attached to the loan, it will have very little impact on helping Canadians get into the housing market.

At this point I would not be surprised if there is further action taken by CMHC, allowing for 30-year amortizations for those that have less than 20% down-payment. I personally think this is a terrible idea, sure your monthly payment might be a few dollars less, but it ultimately extends the life of the loan and increases interest over time.

Should they proceed with the extended amortization strategy, I would expect it to take place closer to elections in an attempt to try and leverage themselves.

If the government is concerned about helping Canadians get into the housing market, they should consider lowering the stress test rate.

For more information on the 2019 Federal Budget, visit: https://www.theglobeandmail.com/politics/article-federal-budget-2019-highlights-10-things-you-need-to-know/

Do you qualify to buy a home? Give our team to find out 604.615.1315

BC Budget Speculation, Changes for Home Buyers

Home Buyers - Chilliwack Mortgage Broker

The BC budget is set to be released in just a few days and as always, there are speculators weighing in on the changes we’re expected to see and where exactly we expect funds to be allocated. Housing affordability is a topical subject of course, as we’ve seen the rise and fall of transactions over the last few years and the impact these rules and regulations have had on home buyers and even homeowners. These changes may consist of altering home buying programs and mortgage products, along with tax benefits for seniors, pharmacare, and job training. Here is a more detailed look at those predictions:

Longer Mortgage Amortizations: Re-introducing 30-year amortizations for those who have less than a 20% down-payment.

Home Buyers Plan: Increasing the RRSP withdraw from $25,000 to $35,000 for first time home buyers without penalties with the stipulation that all moneys are repaid within 15 years.

Tax Benefits for Seniors: Increasing withdraw flexibility from RRIF’s by raising the age requirement (currently 71 years of age) as Canadians seem to be living and working longer. Consideration to increase the income threshold for GIS has also been mentioned. As it stands, qualification is limited to a max of $18,240

Pharmacare: Potentially lower the cost of prescription drugs.

Job Training: Businesses have claimed to be struggling to find the right fit along with the appropriate skill set to fill job vacancies. This shortage is apparent in the tech area and other industries that require skilled trades. Proposal to expand tax credits that allow tax payers write off a portion of the cost that comes along with training programs and further education.

For more information regarding the speculation of the BC budget: https://globalnews.ca/news/5051109/federal-budget-2019-canada-preview/

The Truth Behind Best Interest Rates

When it comes to getting a mortgage for a home purchase, refinancing to consolidate debt or simply renewing your mortgage, most of us are interested in securing the best interest rate. You’ll often see websites such as rate hub, offer rates that beat just about anything you’ve been quoted by your bank or mortgage broker, but did you know that 4 out of 5 people do not qualify for the rate they saw advertised? That incredibly low interest rate you saw online, will likely come with a detailed list of restrictions.

Here are a few common mortgage scenarios and the percent you can expect to add onto that “best interest rate”.

 

The above figures are estimates and subject to change without notice E&O, O.A.C.

Market Update – Interest Rate Increase Oct. 24, 2018

Market Update Interest Rate 2018 - Chilliwack Mortgage Broker

We’re not sure about everyone else, but does it not feel like sunshine and 30-degree weather was yesterday? Is there anyone else wondering how it’s already mid October!? We are 16 days away from Halloween and Christmas is around the corner. The organized individuals of the world have probably started shopping however, there is something to be said about those who scramble last minute – we’re either mildly insane for doing so OR is there a sense of achievement attached if you manage to pull it off? It’s almost the same level of pride you experience when you successfully carry your groceries from the car to the house in one trip and who doesn’t appreciate a one tripper?

Speaking of scrambling last minute, let’s talk interest rates. While there is no need to panic, in just over a week from now the BoC should be increasing the benchmark rate a quarter percent on October 24th, followed by another potential increase in January 2019. You should speak with a mortgage consultant if you are 3 or more years into your mortgage term, in a variable rate mortgage or have considered refinancing, now would be the time to act.

There is a lot of speculation when it comes to the future of interest rates, some economists are predicting rates to reach as high as 6% by 2020 but it’s near impossible to predict such thing. While this may seem drastic to some (by some we’re referring to the millennial’s of the world who never experienced 13%-20% interest rates in the 80’s) it’s important to remember that the rates we have now are still considered historically low.

We are starting to see the affects of the new B20 mortgage regulations, introduced over the last two years. Together with interest rate increases, the real estate market in Abbotsford, Mission and Chilliwack have slowed down. Reports show a 33.2% decrease from the same month last year in residential unit sales. The average home price in BC is down 1.1% year-over-year, averaging the detached home price at $685,749.

If you’re interested in accessing the equity in your home, you might want to consider doing it sooner than later. Chances of this slow down continuing are relatively high especially with increasing rates in the forecast, it’s likely that these changes will result in further depreciation.

The slow down we’re starting to experience could open a window for interested home buyers but given all the recent regulatory changes it’s more important now than ever to work with a seasoned team of mortgage advisors who are familiar with the new requirements and know how to work around them.

If you have any questions about how the interest rate increase might affect your current mortgage, please feel free to contact our team. We offer complimentary mortgage reviews and will work with you to secure the best mortgage product suited to your financial goals and needs.