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CMHC CUTTING BACK ON INSURED MORTGAGES

(From the Financial Post) Canada Mortgage and Housing Corp. is cutting back on mortgages it insures as the Crown corporation edges closer to a $600-billion cap imposed on it by the federal government, the Financial Post has learned. A CMHC spokesman confirmed that it had approached a number of lenders at the end of 2011 about reducing its “bulk or portfolio insurance” after third-quarter results showed the agency had committed to back $541-billion in mortgages. CMHC, which guarantees mortgages held by financial institutions, is ultimately backed by the federal government and needs approval to go over the $600-billion limit — something that would create greater risk for taxpayers should the housing market collapse. “CMHC has recently received an unexpected level of requests for large amounts of CMHC portfolio insurance.” said Charles Sauriol, a spokesman for the Crown corporation, in an email. “To ensure equitable access to portfolio insurance within CMHC’s annual limits, an allocation

MORTGAGES FOR NEW IMMIGRANTS

A Home of Their Own – New Immigrants Face Hurdles New Canadians are making their numbers felt in the housing market, as they get settled and make the transition from renter to owner, purchasing their first homes in this country. Over 280,000 new immigrants arrived in Canada in 2010, the highest amount in 50 years according to the Department of Citizenship and Immigration. Immigrants are expected to play a large role in the housing market in the coming decades. Between now and 2031, the foreign-born population of Canada could increase approximately four times faster than the rest of the population. For these new Canadians, first-time home ownership may prove harder than anticipated, as they face some unforeseen obstacles, but there are definite opportunities. Lack of Credit History The biggest challenge for new immigrants is establishing credit because they do not have a financial history in Canada. Without a credit history, it can be a struggle to get mortgage financing. It is importan

LOOKING BEHIND THE 5 YEAR RATE SPECIAL

A peek behind deeply discounted 5-year rates. A major bank has offered a record low 5 year interest rate. However it is a 2 week special only. Is it as good as it appears to be on first glance. Let’s look a little deeper. When considering a deeply discounted 5-year rate, keep in mind that cheapest isn’t always best. Strangely, we know that’s true when we’re shopping for anything else - but we still tend to believe that lowest rate is the one and only factor in choosing a mortgage. But, that low-rate mortgage could actually cost you more in the long run. An amazing cut-rate mortgage could have you locked in to a very rigid contract filled with financial “trip lines” that could work against you down the road. That’s why it’s important to check the fine print. For instance, is the mortgage fully closed? That means you’re not leaving the lender unless you sell your house, so your options are limited and you have no negotiating power if your needs change in the next 5 years. Low or no prepa

BANK of CANADA RAISES INTEREST RATE

The Bank of Canada did as expected yesterday and announced it is increasing the target for the overnight rate by 0.25% to 0.75%. There was some debate earlier in the month whether the central bank would actually continue increasing interest rates, but after the strong job report that was released mid-month announcing that a record number of jobs were created in June, it became apparent that Bank Governor Mark Carney, now had strong justification to increase rates again. Some key items in the release included: Globally Global economic recovery is proceeding but is not yet self-sustaining Greater emphasis on balance sheet repair by households, banks, and governments around the world is expected to reduce global growth then the Bank originally believed back in April The response to the European debt crisis, or Greece’s debt crisis, has reduced the risk of it blowing out of proportion, but it will slow down global growth US consumer demand is increasing but is still not driving growth In C

CANADA'S ECONOMY OUTPACING THE US

IMF says Canada will likely outperform this year, sees slower growth in 2011 Thu Jul 8, 9:57 AM Joe Mcdonald, The Associated Press Email StoryIM StoryPrintable View.By Joe Mcdonald, The Associated Press BEIJING, China - Canada's economy is on track to grow more quickly this year than previously expected, putting it ahead of the United States and most other advanced economies, according to new estimates from International Monetary Fund. The IMF said Thursday it's raising the 2010 growth forecast for Canada to 3.6 per cent from its previous estimate of 3.1 per cent, issued in April. The IMF's July report also raised its U.S. growth estimate to 3.3 per cent, up from 3.1 per cent and its world estimate to 4.6 per cent from 4.2 per cent. Asian countries with rapidly maturing economies will grow more quickly than the United States, Japan and European countries that have historically been more advanced. China's growth for this year, for instance, is now projected at 10.5 per c

The Case For A Variable Rate When Rates Are Rising

It’s been a great ride! Canadian homeowners have been benefiting from ultra-low interest rates over the last two years. Unfortunately the time has come: the rate climate is starting to heat up. As the Prime lending rate starts to gradually increase toward more normal lending rates of 5% to 6%, do variable-rate mortgages still make sense? Of course the answer depends on your own personal situation, but there are definite compelling reasons to choose variable. Fixed-rate mortgages play a significant role with many Canadian homeowners, particularly those who may lose sleep wondering what will happen next with rates. Fixed mortgages are also ideal for those on a very tight budget; a fixed rate gives you the security of knowing exactly how much your mortgage will be so you can plan accordingly. Many first-time homebuyers choose a fixed-rate mortgage for this reason For those who are not on a tight budget, a variable-rate mortgage can be a wise financial move, even in a rising rate environme

BANK of CANADA RAISES INTEREST RATE

Bank of Canada raises interest rate | Tuesday, 1 June 2010 After more than a year at a record low level, Bank of Canada Governor Mark Carney raised the benchmark interest rate for the first time since 2007 by one-quarter percentage point to 0.5 per cent. This is the first time since 2007 that that rate has increased and the Bank of Canada is the first in the Group of Seven to do so since the financial crisis and recession began in 2008. In a statement Carney emphasized that the increase should not be interpreted as just the first of more to come. "This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending and the uneven global recovery,'' the central bank said. ``Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and g