Hello 2007 Goodbye 2006

This year is almost over and the last few months have been very busy. The mortgage market in Halifax ended 2006 on a high note. Our office expanded to just under 20 brokers in order to keep up with demand. It seem that more and more Nova Scotian's are discovering how by working with a mortgage broker they can save thousands of dollars and have more choice in how their money is used.

Over the last year we have seen many changes in the Canadian Mortgage Industry. Longer amortizations, higher lending ratios, true 100% mortgages, just to name a few. What will 2007 bring? We will likely see lower interest rates, new insurers will be entering the market and with them mortgages will be even easier to get. All in all the choice that will be available to Canadians will continue to grow.

Have a great New Years, I think that 2007 will be fantastic!

The Economy Is On The Up Swing

The Stats Can numbers that were released on Monday are showing that the composite leading index rose 0.5% in November, that is nearly double its gain in October. This is a strong sign the the economy is back on track. I can tell you that the number of client applying for mortgages in October and December has increased as well. I have been so busy with new inquiries that I haven's event had time to up date this blog.

Longer Amortizations

It was not that long ago that the maximum amortization for a residential mortgage was caped at 25 years. Today we have 30, 35 and 40 year amortizations and this is a good thing. While we all want to pay off our mortgage as soon as possible there are times when the best solution is to lower your monthly payments and that is just what a longer amortization does. You should keep in mind that you can pay off a 40 year mortgage in 25 years simply by making the payments as if it were a 25 year mortgage.

Fixed vs Variable Mortgage

This is the second most often ask question in the mortgage industry (the first is what is the best rate) and there is no simple answer. Today a fixed 5 year mortgage and a variable 5 year mortgage can be had for exactly the same rate. Right now I am advising my client to give the variable option strong consideration because all indications are that we will see the prime rate drop in 2007 and therefore we will see some significant savings in interest payments. Unfortunately no one has a crystal ball and we cannot predict the future with 100% certainty. So if you are one of those people who cannot sleep at night without knowing what your mortgage rate will be then do not even consider a variable rate mortgage.

Bank of Canada Rate Remains Unchanged

"OTTAWA—The Bank of Canada today announced that it is maintaining its target for the overnight rate at 4 1/4 per cent. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 4 1/2 per cent."

"The Bank's outlook for Canadian economic growth and inflation in 2007-2008 is essentially unchanged from that set out in the October Monetary Policy Report (MPR). Global growth has been strong, commodity prices have remained high, and employment growth in Canada and the United States has been sustained. Some recent indicators suggest that output growth in Canada and the United States in the fourth quarter of 2006 may be a little weaker than previously expected. Inflation in Canada has evolved broadly in line with the Bank's expectations. "

Renewing Your Mortgage

When it is time to renew your mortgage over 85% of all Canadians simply sign the renewal form that they receive form their lender and they end up paying more for their mortgage than they have to.

It is time to change this statistic by simply contacting me a couple of months before your renewal I can compare what your current lender is offering and 9 times out of 10 get you a better rate. This one call alone could save you thousands!