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For most Canadians, your home is your most important investment. But owning a home also comes with a great deal of responsibility. When unforeseen circumstances impact your ability to meet your mortgage payments, it’s important to take quick action and contact your lender. With early intervention, your lender can help you fund a solution to your financial difficulties.

For mortgages insured by the Canadian Mortgage and Housing Corporation (CMHC), CMHC provides lenders with the tools and the flexibility they need to achieve a solution to your unique financial situation. Depending on your circumstances, this might include:

• Converting variable rates into fixed to avoid sudden rate increases
• Temporary short-term payment deferral.
• Extending your repayment period to lower your monthly payments
• Adding any missed payments to your outstanding balance
• Arranging special payments unique to your particular financial situation

CMHC is also willing to consider other alternatives proposed by the mortgage professional to resolve or avoid mortgage payment default. In every case, the options available will depend upon your individual financial circumstances.
CMHC is Canada’s national housing agency. For over 60 years CMHC has shared a wealth of knowledge and housing expertise to help create an informed and reassured homeownership experience for Canadians.
For more information visit: CMHC or call Charmaine at Verico Designer Mortgages Inc. 905.336.5997.
Source: Canada Mortgage and Housing Company

It means that you can get a 5 year fixed rate Mortgage for as little as 3.69% Quick Close Special (the lowest in Canadian history) and a variable rate at 2.85% (Prime plus 0.60).

Another important point, never before made, is that the Bank of Canada is going to hold the overnight lending rate steady until June 2010.  

So if you currently have a variable rate, now is not the time to lock in if the Bank holds true to its promise.

Many people who are in fixed rates are looking at refinancing their mortgages into lower rates.  The penalty to break an existing mortgage is the greater of three months interest or what is called the interest rate differential. The interest rate differential is the lost interest between your current rate and market rates.  Whether this is worth your while can only be decided on a case-by-case basis.

I listened to Benjamin Tal, chief economist of CIBC and his comments regarding the variable rate mortgages where as follows:

“You might do better the first two years [of a five-year mortgage] but not the remaining three. I’m convinced long-term interest rates will rise. I can see [long-term] rising 200 basis points. These are emergency rates and at some point this emergency will end,” says the economist.

The banks and the mortgage insurers are becoming more stringent on their lending criteria; minimum credit score requirements have increased, if you are self-employed they are wanting more documentation and appraisals are getting harder too – they look at the appraised value as opposed to the purchase price.  If your credit is less than perfect, this can also be challenging, that is why we are finding more and more people seeking out the expertise of an accredited mortgage professional.

Written by:  Charmaine Idzerda, (AMP) Mortgage Broker   FSCO# M080000747
Verico Designer Mortgages Inc.  www.DesignerMortgages.ca    FSCO# 10194
Tel: 905.336.5997, Tollfree 1.866.824. 8057

 

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