Know your Options

There has long been the belief that the “bank” was the best place to go when searching out a mortgage. That based on your long term banking relationship they will give you the best mortgage possible. The mortgage broker was the person you saw if you had less than stellar credit and your bank had turned you away.

In actuality it is quite the opposite. Mortgage brokers deal with all clients from the best credit to slightly bruised credit. There are many mortgage rates and products available from an array of lenders, and as you would a medical diagnosis, a second opinion on your mortgage offer is always in your best interest.

Where banks are limited to their own rates and products, Mortgage Brokers provide mortgages from a variety of lenders. This means many options are available, often with access to the same bank you may have visited but with a better rate. The Mortgage Broker works for you not for the lender. With one application and one check on your credit bureau, a broker can shop your mortgage. Working with a Mortgage Broker will help you avoid repeated checks on your credit bureau which could ultimately reduce your credit score. Best of all the services provided to you by a Mortgage Broker are free, with only a very few exceptions.

Situated at 2446 Beacon Ave. in the old “Candy Shop” you will find over 20 years of mortgage and real estate experience. Locally owned and operated, Mortgage Depot has been arranging mortgages for over 19 years. The Sidney Mortgage Depot is a family run office with Arlene Modderman, her daughter Sherri Brown and close friend Krista Lawless. Arlene Modderman is known as the Gulf Island specialist with offices in Victoria, Sidney and Salt Spring Island. Krista Lawless and Sherri Brown operate as the Lawless Brown Mortgage Team with offices in Victoria and Sidney. With various convenient locations and an interactive websites, the Accredited Mortgage Professionals (AMP’s) of Sidney Mortgage Depot are easily accessible.

These ladies believe that excellent customer service and the best mortgage products go hand in hand. They will make the mortgage process as comfortable and stress free as possible and while professionalism and privacy are top priority, it is important to know that they will find the lowest rates and best mortgage product suited for your individual needs.

Your home can be your biggest asset and is deserving of the best attention to make sure you have the most suitable products to maximize your investment.

Krista Lawless

Sherri Brown

www.lawlessbrown.com

November numbers heat up housing bubble talk

Wednesday, 16 December 2009


With the Canadian Real Estate Association's release of November housing numbers Tuesday, talk of a bubble is heating up among economists and industry professionals.

The CREA report said existing homes sales in November increased by a whooping 73 per cent compared to a year ago and prices rose almost 20 per cent.

"We're on the bubble of a bubble," Bank of Montreal economist Doug Porter told The National Post, sharing his worry about a potential surge of home sales before the central bank raises rates and the new harmonized sales tax is introduced in B.C. and Ontario. "We could see a bit of a buying frenzy coming this spring...followed by a "pop" in 2011?"

But despite continued fears that skyrocketing numbers signal the formation of an asset bubble, some insiders said the dramatic rise is due to how low the market was at this time last year. The number of listings also went up by five per cent from October to November, which is expected to help ease price increases.

"The numbers look huge, but you are coming off such a bad year," TD Securities economics strategist Millan Mulraine told The Globe and Mail. "You're seeing big numbers in the recovery, but the pace and momentum has eased. You could definitely say it's not driving as fast as it was a few months ago."

Another argument against a bubble came from Genworth Financial Canada president Peter Vukanovich, who told The National Post that because more consumers have been switching into fixed rate mortgage products, they will be less exposed to expected interest rate hikes.


www.lawlessbrown.com

CMHC’s Role in Canada’s Credit Crisis Recovery

Think back to the fall of 2008 … Banks failing … credit getting tight … the stock market crashing. Most of this was blamed on sub prime mortgages. What would you have thought if your pension manager or RRSP administrator had chosen that moment to invest your money into mortgages? You probably would have tried to have them arrested!

That’s the dilemma that banks and mortgage lenders faced. For the most part, the money that Banks lend as mortgages is raised from investors’ money in RRSP’s, pensions and non-registered investments. ALL those investors were justifiably refusing to put any new money into mortgage investments. No money … no new mortgages. No new mortgages and our housing industry would come to a complete halt … prices would fall and foreclosures would begin to rise.

The solution … the government of Canada expanded the role of CMHC (Canadian Mortgage Housing Corporation) to allow them to insure much larger numbers of mortgages. CMHC insurance protects the lender against a loss in the event the borrower fails to pay. Because CMHC is backed by the government, the lender is sure of recovering all funds. With that in place, investors can now allow their funds to be invested in mortgages safely. For a period of time, lenders were so careful about mortgages, that nearly all new mortgages were insured with CMHC, even mortgages that were for a small percentage of the value of the property. Naturally, this caused sharp increase in the number of mortgages insured.

Recognizing we were entering a recession, CMHC tightened the rules banks must follow for qualification, thus avoiding much of the trouble facing the USA, where loose lending practices were a big factor in triggering the whole mess.

The result? Today we have strong solvent banks, relatively low mortgage delinquency and a housing market that has cooled down without destroying millions of people’s lives and investments. Was it the right thing to do? Compare Canada to the rest of the world and the massive public bailouts that were necessary to save banks. CMHC’s increased role suddenly looks like an awfully good alternative!

Mortgage Depot

lawlessbrown.com