Monday, August 17, 2009

Are Homes the Cause of Some Bankruptcies?

According to an article in the Toronto Star, homes are becoming more of a problem for consumers with escalalting debt.

In the past it was unusual for the family home or real estate to be the cause of bankruptcy in the last 10 to 15 years. It actually was a solution for many people. However, with the drop in the value of homes, their equity has disappeared and they come up with a deficit that the bank still wants repaid.

A bankruptcy trustee with Deloitte & Touche attributes the recent spike in consumer insolvencies to a seven-year high unemployment rate and people relying too much on credit as an income supplement. People worried about losing their job should be cutting expenses and aggressivley repaying debt. Always sound financial advice!

Warmly,
Mary Wozny

Friday, August 14, 2009

U. S. Mortgage Default Rates

It's interesting to note that the default rate for U. S. mortgages that have been modified to prevent house foreclosures may actually end up at 75% according to Fitch Ratings, because of "shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves".

Since the U. S. government announced assistance programs to help struggling homeowners and lower the rate of foreclosures, lenders have been trying to modify mortgage terms for borrowers to give them a better chance to get back on track. They reported that aproximately seven per cent of U. S. home loans packaged into securities without government support have been modified to date.

In a statement to Bloomberg, a Fitch representative stated that loan modifications hold clear value for many homeowners proved the modified payments are sustainable. Unfortunately, more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextened on other credit and expenses.

How will all this shake out? We'll have to watch and wait, only time will tell.

Warmly,
Mary Wozny

Wednesday, August 12, 2009

Household Debt Burdening Canadians?

Canadians are carrying a larger household debt load than ever before, a total of $1.3 trillion in 2008 according to a survey by the CGA Association of Canada.

The study showed outstanding mortgages took up $900 billion worth of the debt load total, but the more concerning number to the association was the $400 billion in consumer debt carried by Canadians. Anothe red flag was that 49 per cent of families with one or more children under age 18 reported their debt had increased in recent years.

In the boom years, the housing market helped Canadians to maintain a slightly improving balance between mortgage debt and residential assets but it didn't offset the run up in consumer debt which was not well supported with accumulation of consumer durables or financial assets.
Canadians have to the more aware of and accountable for their spending habits, most particularly the use of credit cards and lines of credit and have to maintain their financial responsibility to maintain a healthy economic environment.

With mortgage rates at record low levels and assuming some equity in your home, now is an ideal time to refinance high cost credit card debt and bring your financial home to order.

Contact Mary Wozny at www.MaryWozny.com today.

Tuesday, August 11, 2009

First Time Homebuyers in the Market

According to a report published by Royal LePage Real Estate Services, low interest rates and house prices are the driving forces for potential first-time homebuyers across Canada.

Although first-time homebuyers appreciate government incentives such as tax credits, it is the markedly improved affordability that is proving to be the powerful drawing card bringing them to the market and encouraging them to purchase. The survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.

When asked what the top incentive to purchase was for them, 86 per cent cited low interest rates followed by 81 per cent who said lower housing prices were the top motivating factor. Job security and a stable economy were the next ranked incentives.

Interesting to note - the survey also revealed regional differences when it came to the importance of certain incentives. Job security was more important in Western Canada compared to Atlantic Canada, which has seen a relatively resilient local economy. Ontario and Quebec buyers rated the recently implemented Home Renovation Tax Credit as having a bigger impact on their buying decision compared to the Canadian average.

Contact Mary Wozny today, www.MaryWozny.com, for your mortgage financing and make your dream of home ownership come true!

Monday, August 10, 2009

CMHC Says Mortgage Rates to Remain Stable

CMHC in their second quarter Housing Market Outlook says that Mortgage Rates are expected to remain with 25 to 75 basis points of their current level for the remainder of 2009, keeping them very low in a historical context.

Movements in mortgage rates are difficult to predict due to volatile economic conditions however rates are expected to remain steady this year and edge higher in 2010.

Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebouding to 150,300 in 2010.

2009's decline in housing starts can be attributed to several factors, including the current economic climate, increased competition from the existing home market and the impact of strong house price growth between 2002 and 2007, states their chief economist.

Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.

Warmly,

Sunday, August 9, 2009

Growing Numbers Boost B.C. Real Estate Market

British Columbia saw its first year-over-year increase in residential sales in May 2009, with the B.C. MLS reporting a three per cent rise compared to May 2008.

The chief economist at the British Columbia Real Estate Association states that homes sales have bounced back from the extraorinarily low levels recorded during the winter months. Improved affordability and less uncertainty about the future are the main factors driving home sales higher.

Stronger consumer demand combined with fewer home listings is stabilizing prices in the province. MLS predicts residential prices in B. C. to decline eight per cent in 2009 to $420,600.

The majority of the decline in home prices has already occurred and balanced markets are emerging in Victoria, Vancouver and the Fraser Valley. There's now little downward pressure on home prices in these particular areas.

Warmly,
Mary Wozny

Saturday, August 8, 2009

Ottawa Housing Market Hot!

Ottawa saw its best May on record for housing sales, with the capital city’s Real Estate Board reporting a 19 per cent increase in sales from the previous month and a 5.3 per cent increase in house prices over May 2008.

Homes in every price range are sell well, right from starter homes to luxury properties, according to the president of the Ottawa Real Estate Board. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market.

They reported that 1,969 residential properties were sold in May at an average price of $312,045, a slight rise in mortgage financing has been noted for the same time period. Ottawa hasn’t seen as much of a slowdown as the rest of the country because it is more isolated than the rest of the country and there is more guaranteed income due to the large number of government jobs the capital city has to offer.

Warmly,
Mary Wozny

Friday, August 7, 2009

Have Housing Starts in Canada Hit Bottom?

Canada Mortgage and Housing Corporation (CMHC) reported recently that national housing starts increased by 9.2% in May compared to April. This leads some economists to think that a bottom might be forming in the country's homebuilding activity.

March saw a jump in overall nationals housing starts, that jump was largely due to condo development in Ontario, the Prairies, the Atlantic provinces and Quebec. The only region to see a decrease was B. C. where the market is still moderating. It is believed that housing starts will bottom out slightly below 120,000 before stabilizing throughout next year.

This is a good indication that homebuilding activity will cease being a drag on economic growth and employment heading into next year, however this being the case, housing starts are not expected to head back to previous levels of 150,000 before 2011.

Warmly,
Mary Wozny

Thursday, August 6, 2009

Funding for Commercial Mortgages In Canada

The commercial mortgage market has been on a roller coaster ride the past two years with loans based on retail space drying up. The A lenders have increased the credit quality scale and many borrowers are faced with high fees resulting from having to place their mortgages with private lenders in an effort to stop foreclosure.

A lot of the changes to the commercial mortgage arena results from the collapse of the Commercial Mortgage Backed Securities (CMBS). The collapse of the CMBS had large institutional lenders like insurance companies and pension funds leave the market completely.
Lenders are paying stricter attention to the quality of the property, looking at whether the operator is a good one, what the neighborhood is like, and are insisting on appraisals. All this means the lenders aren’t loaning as much LTV and the vendor has to put in his own funds for the balance. Lenders won’t go over 65% LTV with some not going above 50% LTV.

Retail properties are some of the worst hit for financing with fears that if the conglomerates were to shut down some of their big box stores, there would be far too much vacant space available and makes the risk factor much higher for the lender.

An easier option for financing right now is CMHC approved rental apartments in large urban areas. Not only are they the safest, from a lender’s point of view, but with rates the way they are (around four per cent on five-year deals), never has there been a better time to look at insured loans.

Other niches, such as seniors’ care facilitations, rentals, medical buildings and local strip malls with decent tenants (i.e.: not the giant big box stores), are also areas still performing, even if there is limited money to loan on them.

There is sentiment in the marketplace that things are looking better already and investors belive that the market may have finally bottomed out and are deciding to get back into the market.

The market is picking up, interest is good, liquidity is getting better and confidence is coming back.There will be fewer buyers/investors for major commercial deals but those who get the financing will benefit from the historically low interest rates we currently have.

Warmly,

Mary Wozny

Wednesday, August 5, 2009

Is The Housing Sector in Recovery Mode?

Pent-up demand for residential housing has bolstered sales in Canada's major markets-a sign that the housing sector has shifted into recovery mode, according to a recent report by Re/Max.

Canada's largest markets, Toronto and Vancouver, led the way, with June sales among the highest in history for both local real estate boards. Close to 11,000 properties changed hands in Toronto, up 27 per cent over one year ago, setting a new record for sales in the month of June. Residential sales in Greater Vancouver increased 75.6 per cent over one year ago, to 4,259 units, just short of the record-breaking 4,333 sales in June 2005.

"The strength of the market, amid the most significant global recession in recent history once again underscores its relevance to the nation's economic engine," says Michael Polzler, executive vice-president, Re/Max Ontario-Atlantic Canada. "Those who chose to sit it out on the sidelines are now facing a market in transition, characterized by the threat of rising interest rates, low inventory levels, and upward pressure on housing values."

The recent surge in resale activity can be attributed to three key factors-pent-up demand, low interest rates, and greater affordability. The combination-in conjunction with declining inventory levels-has created heated market conditions in certain neighbourhoods, prompting a resurgence of multiple offers in June. Average prices are holding steady or climbing, days on market are down, and inventory levels continue to tighten, especially at entry-level price points.

Warmly,
Mary Wozny

Monday, August 3, 2009

Funding for Commercial Mortgages in Canada

The commercial mortgage market has been on a roller coaster ride the past two years with loans based on retail space drying up. The A lenders have increased the credit quality scale and many borrowers are faced with high fees resulting from having to place their mortgages with private lenders in an effort to stop foreclosure.

A lot of the changes to the commercial mortgage arena results from the collapse of the Commercial Mortgage Backed Securities (CMBS). The collapse of the CMBS had large institutional lenders like insurance companies and pension funds leave the market completely.
Lenders are paying stricter attention to the quality of the property, looking at whether the operator is a good one, what the neighborhood is like, and are insisting on appraisals. All this means the lenders aren't loaning as much LTV and the vendor has to put in his own funds for the balance. Lenders won't go over 65% LTV with some not going above 50% LTV.

Retail properties are some of the worst hit for financing with fears that if the conglomerates were to shut down some of their big box stores, there would be far too much vacant space available and makes the risk factor much higher for the lender.

An easier option for financing right now is CMHC approved rental apartments in large urban areas. Not only are they the safest, from a lender's point of view, but with rates the way they are (around four per cent on five-year deals), never has there been a better time to look at insured loans.

Other niches, such as seniors' care facilitations, rentals, medical buildings and local strip malls with decent tenants (i.e.: not the giant big box stores), are also areas still performing, even if there is limited money to loan on them.

There is sentiment in the marketplace that things are looking better already and investors belive that the market may have finally bottomed out and are deciding to get back into the market.

The market is picking up, interest is good, liquidity is getting better and confidence is coming back.There will be fewer buyers/investors for major commercial deals but those who get the financing will benefit from the historically low interest rates we currently have.

Warmly,

Mary Wozny

Sunday, August 2, 2009

Buying a Home - Are You Ready Financially?

For most Canadians, purchasing your home is likely the most important investment you will ever make.



How do you know if you are financially ready for the responsibilities that home ownership comes with?



Canada Mortgage and Housing Corporation (CMHC) offers these tips to assess your current financial situation, to calculalte your monthly expenses and to determine how much home and mortgage you can afford.Calculate your net worth - the total of all your assets (include investments, savings, properties, vehicles etc.) minus your liabilities, (mortgages, car loans, personal or student loans, credit cards or other debts).



Your net worth is the difference between your assets and your liabilities and will give you a visual of your current financial situation and an idea of how large a down payment you can afford.



Calculate your current monthly expenses to determine what kind of mortgage payment can comfortably fit into your budget. These include current housing expenses such as rent, utilities, parking and other fees as well as cable/TV/internet, debt payments, insurance, gas and repairs for the cars, clothing, medical and dental costs, child care expenses and groceries.



When you have a clear picture of your financial situation, determine how much you can afford in monthly housing costs. These costs should not exceed 32% of your gross household income. Overall, the total of all your monthly debt load shouldn't be more than 40% of your gross household income.



After determining your financial picture and if you are ready, then contact me http://www.marywozny.com/ for your mortgage financing.For many people, the hardest part of buying a home - especially a first home - is saving enough money for the down payment.



With CMHC mortgage loan insurance, you can purchase a home for as little as 5% down payment on approved credit. With some lenders that 5% can even be a gift from a relative.



To find out more contact me, http://www.marywozny.com/, email mwozny@mortgagealliance.com.



Warmly,

Mary Wozny

Renewing Your Mortgage

I want to explain the reality of mortgage renewals for you and save you thousands of dollars in interest over the course of your mortgage.


A renewal happens when the term of your current mortgage becomes due and your current lender sends you an offer to renew the mortgage with them. This is the standard practice used by banks today.


Often these lenders will issue renewals and quote rates on various types of mortgages, for example 1 year fixed, 3 year fixed and 5 year fixed. Do they give you, their valued customer their best rate when they send you these renewals? NO they don't! The banks hope that the consumer will simply think that they have to sign this renewal and send it back to them.


I urge you all, talk to me first! As a mortgage agent with access to over 30 lenders, I can almost always get you a better rate on your renewal. Allow me to show you if you are getting a good deal or not from your old lender. Normally not! Your bank has only one lender, themselves. As a mortgage agent, I work for you, the client, not the bank. I have almost 30 different lenders to choose from to meet your unique needs.


Contact me when you are renewing or refinancing your mortgage, http://www.marywozny.com/ or email mwozny@mortgagealliance.com.


Warmly,
Mary Wozny

Saturday, August 1, 2009

Wells Fargo Financial Canada Discontinues Residential Real Estate Lending!

Hot off the press! Disturbing news for consumers!

Effective July 30th, 2009, Wells Fargo Financial Corporation Canada will no longer be accepting residential mortgage loan applications through its consumer branch and indirect broker network channels.

Notice was given Thursday and brokers were advised of immediate cancellation of any Mortgage Broker Origination Agreement or other real estate lending agreements they may have had with Wells Fargo Financial Corporation Canada or Wells Fargo Financial Corporation Canada HomePlan Mortgage.

To the extent Wells Fargo Financial Corporation Canada HomePlan Mortgage has issued a valid fully executed mortgage commitment, provided the applicant or applicants fulfill all of the terms and conditions of the mortgage commitment (including any time specified for closing or expiration of the mortgage commitment), we will honour those commitments.

Warmly,
Mary Wozny