Month: July 2017

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26 Jul

Chinese buyers increasingly attracted to Montreal real estate

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Posted by: Frederic Pichette

17 Jul

Housing prices continue to rise in Montreal: Royal LePage

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Posted by: Frederic Pichette

13 Jul

Five big banks raise prime lending rates following rate hike from Bank of Canada

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Posted by: Frederic Pichette

The Canadian Press
Published Wednesday, July 12, 2017 1:04PM EDT
Last Updated Wednesday, July 12, 2017 3:12PM EDT

TORONTO — Canada’s five biggest banks are boosting their prime lending rates by 25 basis points, following an interest rate hike from the central bank.

Royal Bank of Canada (TSX:RY), the Bank of Montreal (TSX:BMO), TD Bank (TSX:TD), Scotiabank (TSX:BNS) and CIBC (TSX:CM) all announced Wednesday they are increasing their prime rates to 2.95 per cent from 2.7 per cent, effective Thursday.

The prime lending rate is the rate that banks use to set interest rates for variable-rate mortgages and other loans.

The moves comes after the Bank of Canada raised its key interest rate for the first time in seven years on Wednesday to 0.75 per cent from 0.5 per cent.

12 Jul

What does the loom of rising interest rates mean for the mortgage market?

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Posted by: Frederic Pichette

The Canadian dollar fell in early trading Tuesday on the eve of what’s expected to be the Bank of Canada’s first rate increase since September 2010. BMO Global Asset’s Paul Taylor joins BNN with his take.

After seven years, the Bank of Canada is likely raising interest rates on Wednesday. Pat Foran explains.

Vancity’s Ryan McKinley says those who have a line of credit would be affected by an interest rate hike by the Bank of Canada.
Ian Bickis, The Canadian Press
Published Monday, July 10, 2017 6:30AM EDT

CALGARY — Canadians are starting to take note that the key number determining how much they pay for a mortgage is very likely going to soon go up.

“My email is exploding right now,” says Ryan McKinley, senior mortgage development manager at Vancity Credit Union.

McKinley and other mortgage specialists are increasingly hearing from people in the property market now that the Bank of Canada has strongly hinted it could hike the key interest rate as early as July 12, which would be the first increase in nearly seven years.

For those looking to buy in the near-term, McKinley says now is the time to lock in a mortgage rate, which financial institutions generally do for between 90 and 120 days.

But for homeowners with a variable rate mortgage, the question is whether to jump into a fixed rate to protect against rate hikes, or continue to ride out the risk and currently lower rates that variable brings.

“It’s up to everyone’s risk tolerance,” says McKinley. “What I always tell people is if you are concerned, if you’re going to stay up at night, worried about your variable rate mortgage, then it’s not worth taking it.”

Online mortgage sites list the lowest five-year variable rates at around 1.7 per cent, or about 2.3 per cent for a five-year fixed. However, many mortgage providers are already raising rates, says Dan Eisner of True North Mortgage.

Eisner says five-year bond yields, which determine five-year mortgage rates, have jumped 0.4 per cent in the last few days to a level not seen since late 2014, before the oil price crash forced the Bank of Canada to drop rates in 2015 to 0.5 per cent.

“This will affect clients who have a variable rate, and they could see their interest rate half a point higher by the end of the year,” he says. That means some variable rate homeowners trying to lock into a cheaper rate right now may already be out of luck.

While those with a fixed mortgage won’t be immediately affected by rising interest rates, McKinley says those who don’t have much time left on a five-year term may want to look into locking in another five years. That may incur penalties, but might still make more sense after doing some number-crunching with your financial institution.

Because the central bank is only expected to raise the interest rate 25 basis points this round, Frances Hinojosa of Tribe Financial says now is not the time for homeowners to panic. Instead, they should focus on paying down their debt with whatever additional payments they can afford in order to reduce the effects of rising rates.

“Any time’s a good time to pay down your mortgage — and even little bits,” said Hinojosa.

“It’s the little grains of sand that you put toward the mighty mountain that’s going to make the difference at the end of the day.”

9 Jul

7 first-time homebuyer mistakes to avoid

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Posted by: Frederic Pichette

It’s tough being a first-time buyer in today’s housing market.

Home prices are hitting record highs in many parts of the country, often selling for more than the asking price, and going from list to contract in a record 37 days, according to Redfin.

“We’ve never seen a faster or more competitive market,” says Redfin spokeswoman Rachel Musiker. “Basically this market isn’t for the faint of heart.”

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Don’t make it even harder (or more expensive) for yourself by making these common mistakes:

1. Assuming you won’t get approved for a mortgage

Ideally, you’d like to have as little debt as possible, an impeccable credit score, and a 20% down payment before borrowing money for a home. However, even borrowers with less can get loans in today’s market, thanks to options like Federal Housing Authority loans, which are meant to help out low-income and first-time buyers.

2. Interviewing only one lender

The fees and rates offered by lenders may vary substantially, and they all offer different service levels and different loan products. Be sure to at least chat with a big bank, a regional bank or credit union, and an online lender.

3. Not getting pre-approved early on

Getting pre-approved for a mortgage serves two important purposes: First, it gives you a realistic understanding of how much you can spend on the house. Second, it shows sellers that you’re serious and gives you slightly more standing if you’re competing for homes with all-cash buyers.

Make it less stressful by gathering up relevant financial documents like bank statements, tax returns, and pay stubs, and by checking your credit report for errors in advance. “Given the competitive interest rate environment and the competitive housing market, it’s a good idea to be prepared and organized before you start the process,” says Keith Gumbinger, vice president of

4. Maxing out your mortgage limit

Just because a lender says that you can borrow a certain amount, doesn’t mean you should borrow that much. Staying below that limit will give you more financial flexibility to cover the added expenses that come with purchasing a home, as well as long-term changes to your income.

Create a budget that includes how much money you can spend on housing costs each month, and then use those numbers to figure out what your “real” limit should be.

5. Letting your emotions control your decisions

Buying a home can be a long and frustrating process. These days, starter homes go quickly, and it’s common for first-time buyers to experience rejection on the first offers they make. In that kind of environment, it’s easy to fall in love with a house that’s out of your budget, or get caught up in the heat of a bidding war and end up paying more than you expected.

“It’s OK to get excited when you think you’ve found your house, but you don’t want to put yourself in a bad spot,” says David Tina, President of the Greater Las Vegas Association of Realtors.

6. Waiving contingencies without understanding the risks

In highly competitive markets, it’s becoming increasingly common for buyers to make offers that aren’t contingent on financing or inspection. While waiving contingencies can make your bid more desirable to a seller, it can make the transaction much more risky for you. Have a conversation with your realtor and a lawyer before opting out of contingencies in your contract. In a worst-case scenario, you may end up losing your deposit.

7. Allowing your credit score to change before the close

A pre-approval letter is not a guarantee of funding, and if your credit score or income levels change drastically between the pre-approval and the closing of the loan, lenders may change their terms or rescind the offer entirely. While you’re home shopping, be sure to pay all your bills on time and steer clear of new credit accounts, even if that means you have to wait to pick out your furniture. If possible, try not to switch jobs until after you close, particularly if you’re moving into a new industry.

An earlier version of this story said homes go from list to closing in 37 days, according to Redfin. In fact, they go from list to contract.

6 Jul

Four-phase condo development comes to Valois Village

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Posted by: Frederic Pichette