More Canadians Locking in Low-Rate Mortgages, Reducing Debt

Garry Marr  May 30, 2012 – 1:01 PM ET |Last Updated: May 30, 2012 5:57 PM ET

Highlights of CAAMP report:
- 23% of mortgage borrowers voluntarily increased their regular payments
- 19% made lump sum payments
- 10% made both lump sum payments and increased their regular payments
- 50% of borrowers pay at least $100 per month above their required payments
- 74% of borrowers who renewed in the last year saw their rate decrease by an average of one-half percentage point
- 83% of Canadians have at least 25% equity in their home
Canadians have been taking advantage of record-low interest rates to lock in their mortgages, a new survey suggests.
The Canadian Association of Accredited Mortgage Professionals, in its annual spring release, says among the 3.8 million Canadians with a fixed rate mortgage, 14% chose to lock in during the past year.
“This data supports comments by lenders that they have high numbers of new borrowers who start with variable rate mortgages but soon opt for the security of fixed rates,” says CAAMP in the report. Overall, 29% of those with mortgages have a variable rate leaving them with exposure to any changes in the Bank of Canada’s lending rate which the prime rate — used in those loans — tends to track.
The survey also found Canadians are making significant efforts to reduce their debt with 23% of respondents saying they voluntarily increased their regular payments, 19% making lump sum payments and 10% doing both.
For those who increased their regular payments, the average amount of the increase was $400-$450 per month. With about 5.85 million mortgage holders in Canada and roughly 1.35 million increasing their payments, it translates into about $7-billion per year. Lump sum payments averaged $12,500, and with about 1.1 million people making these payments, that equals about $13.75-billion.
“Despite daily warnings in the media about mortgage indebtedness — or maybe because of them — Canadians are making responsible decisions about their mortgages and they’re exhibiting confidence in their own situations,” said Jim Murphy, chief executive of CAAMP. “We should feel encouraged by this behaviour — it means Canadians are well positioned to weather a potential rise in interest rates.”
Overall Canadians have $994-billion in mortgages on their primary residences and $161-billion in controversial home equity lines of credit or HELOCs which allow them access to the equity in their home.
The total equity takeout from residences was $46-billion in the past year with renovations accounting for $17.25-billion of the money used. Another $10-billion was used for investments and $9.25-billion for debt consolidation.
Amortization periods, which have been legally shortened by Ottawa for insured government backed loans, are shortening. Lengths are down 20% but Ottawa legally reduced the length a mortgage could be amortized from 40 to 30 years over the past three years.

Craig Alexander, chief economist with Toronto-Dominion Bank, said the locking of mortgage rates has protected consumers from future rise in rates. “It’s a very positive thing that people are shifting to fixed rate because it provides greater security in protecting from upside risk in interest rates,” he said.
The survey also found despite the fact three of the major banks are either out of or backing out of the mortgage broker channel, it still is an important segment of the market. Brokers account for 26% of the market overall and captured 31% of activity in 2011.
The report is based on information gathered by Maritz Research Canada in a survey of 2,000 Canadian consumers in April and May 2012.
Posted in:Mortgages

http://business.financialpost.com/2012/05/30/canadians-locking-in-low-rate-mortgages-reducing-debt/

Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com
Your Mobile Mortgage Professional in The Comox Valley

TMG- What We Know About You – Mortgage Consumers

The 2012 Mortgage Consumer Survey prepared by Canada Mortgage and Housing Corporation (CMHC) tells those in the mortgage industry a lot about you, the consumer – your buying habits, where you go to look for information, the kind of information you look for, etc.

The online survey was completed over February and March of 2012 by more than 3500 mortgage consumers who had completed a mortgage transaction in the previous 12 months. Here are few highlights of that survey:

Online Activity

• When researching mortgage information, 71% of consumers went online; this is up from 65% in 2011.
• Facebook was the most popular social media network used to gather information, especially among first time home buyers.
• The two most actively searched items were interest rates at 86% and mortgage options at 73%.
• And not surprisingly, 38% of 18 to 24-year-olds used mobile mortgage apps.

Using Professionals

• Consumers are turning more to mortgage professionals to help them with their mortgage decisions.
• Consumers are asking a lot more questions about mortgages – 71% asked about differences between mortgage products; 67% wanted information about mortgage loan insurance; and 67% asked about penalty clauses.
• Consumers like referrals and most referrals come from a family member or a financial planner.

The Mortgage Process

• Before making a decision about a mortgage, consumers spend about five weeks doing research; first time home buyers spend about eight weeks.
• Consumers are now more prepared when meeting with their mortgage professional and come armed with a list of questions and the necessary documentation.
• Eighty per cent of consumers felt confident they made the best decision with their mortgage product.

Mortgage Free

• Thirty-one per cent of mortgage holders made lump-sum payments or increased their regular payments to pay off their mortgage sooner.
• Nearly half of all buyers set their monthly payment higher than the minimum to pay off their mortgage sooner.

The survey findings are positive indicators that consumers are increasing their knowledge about financial matters. Four in ten home buyers went online and did a financial self-assessment. And a whopping 80% felt they had a good understanding about how much they could afford and what options were available to them.

Consumers who educate themselves about the financial options available will learn how to make consistent, informed financial decisions and that will help them to achieve their goals. This survey shows that Canadian consumers are on the right track.

The survey also makes clear that mortgage professionals are in a unique position to help educate consumers about their mortgage options and ways to pay off that mortgage sooner.

Thanks to CMHC for conducting the survey and TMG for putting results in a blog.

CMHC
http://blogger.mortgagegroup.com/2012/05/what-we-know-about-you-mortgage.html






Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com
Your Mobile Mortgage Professional in The Comox Valley

Comox BC, Allowing Secondary Suites

http://comox.ca/hall/latest-news/2012-05-18-secondary-suites/secondary-suites

Comox BC, has allowed home owners to put in a secondary suite into their detached single family homes.
What are the benefits of this:
- families that could not afford a mortgage will now have help in paying their mortgage
-seniors who want to stay in their home will have increase income.
-affordable rent for seniors
-affordable rent for small families

The Comox Valley is notorious for low wages. This will help as rents will be more in line with the low wages.

There are rules to follow to make your house into 2 suites, but as long as you follow those rules you will be able to get help in paying your mortgage by having renters in part of your home.

For mortgage options:

1. Purchase Plus Improvements-- you want to buy a home in Comox and you want to build a secondary suite.  This program will allow you to borrow 10% of the purchase price up to a maximum of $40,000.00 to do the additional upgrades to make your home 2 suites.
2. Refinance Plus Improvements- If you have equity in your home but do not have the cash to do the improvements to make your home into 2 suites. You can refinance your home to do the improvements.

Both of these programs offer the same low interest rate as a mortgage. This way you do not have to deal with expensive credit cards or lines of credit.
For more information give me a call or email .
www.KROEMERmortgages.com


Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com
Your Mobile Mortgage Professional in The Comox Valley

Gifts For Mom- Mother's Day- Sunday May 13 2012

While Mom may not be getting a house for Mother's Day, here is an interesting survey on what Canandians do get mom for Mother's day.
Gifts for mom: Are you as generous as the average Canadian?

TORONTO— The Canadian Press

Published Wednesday, May. 09, 2012 6:00AM EDT

Seventy-three per cent of Canadians are getting mom a gift this Mother’s Day, according to BMO’s 2012 Mother’s Day survey. The average amount we’re willing to spend on mom: $84.16.
Men are true momma’s boys, planning to spend $105 on their mothers. Women, on the other hand, are only willing to shell out $62.

The most generous province? Ontario, where the average spent on a gift is $93.61. The Atlantic provinces spend the least, with a budget of $70.41.

Of course, a bigger gift doesn’t mean a bigger heart.
“The difference in spending is more likely a measure of practicality than it is of love,” said Jennifer Weisman, director, BMO Bank of Montreal.

Mother’s Day is bigger than Valentine’s Day and second only to spending leading up to the Christmas holidays. It typically generates the second highest volume of weekend shopping in the year as measured by dollar value.

So what kind of gifts can mom expect this year? Canadians say they plan to:
– Take mom out to a restaurant (28 per cent). If you plan to take her out for a meal, be sure to make a reservation. Mother’s Day is one of the busiest days of the year for dining out. There was a 22 per cent spike in restaurant spending from the same period the previous month last year.
– Bring her flowers (27 per cent). No surprise here. With spring buds blooming across the country, May is the perfect time to show your love and appreciation with flowers. Last year there was a 237 per cent increase in spending on flowers during the Mother’s Day weekend compared with the same period in the previous month.
– Make her a home-cooked meal (18 per cent). Whether it is breakfast in bed or full-on Sunday dinner, it’s all good, as long as mom doesn’t have to make it.
– Give other gifts or cards (3 to 4 per cent). Aesthetic services, candy and chocolate, jewellery, cards and other gift ideas all trailed far behind the top three choices.
– No gift (15 per cent). Respondents didn’t offer reasons for foregoing a gift, but the numbers were surprisingly high. This could be due to the mother being out of town on holidays, or simply that families celebrate their moms every day and don’t make a practice of observing these types of occasions.

The survey was completed from April 23-26, 2012, using Leger Marketing’s online panel, with a sample of 1,500 Canadians. A probability sample of the same size would yield a margin of error of 2.5 per cent 19 times out of 20.
The Canadian Press

Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com -- Check out the special deal on my website.
Your Mobile Mortgage Professional in The Comox Valley now with an Office.

Did the bank decline your mortgage application?

If the bank has declined your mortgage application, please come talk to me. I have a several lenders to choose from and usually I can find a lender to work with almost any situation. My service is mobile , or I can meet with you in my office when it is convenient for you. 1.250.650.4182.

Check out my sweet deal on my website  www.KROEMERmortgages.com

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

Fax: 1.888.679.0192

akroemer@mortgagegroup.com

www.KROEMERmortgages.com

Your Mobile Mortgage Professional in The Comox Valley with an Office TM