How to Calculate a Home Buying Budget

When house–hunting, some factors, like the features of the home, can be adjusted once you've made your purchase, while other factors, like the location, cannot be. Finding the right home is about getting the right balance and at a price you can afford. Advice on how to calculate a home buying budget.

-          Learn about your options - When house–hunting, you look for places that suit your needs and lifestyle. Do the same when deciding on your mortgage. Know the differences between fixed and variable interest rate mortgages and decide what amortization period best suits your situation. Payment flexibility is also important when deciding on a mortgage, to know what you can prepay, as well as options to pay less at a later date if something unexpected comes up.

-          Calculate your mortgage numbers - Run the numbers and settle on a price range you can afford using a convenient online mortgage calculator, which factors in your income and the size of your down payment and compares different mortgage options and payment plans. Understanding what you can afford lets you narrow your search and shop with confidence, knowing that the houses you view fit within your budget.

-          Get pre-approved - The home–buying process can happen very quickly, so be prepared when you find a home you want. Getting pre–approved for a mortgage puts you in a good position to make an offer when you find the right home. There's usually no cost or obligation, and it's a good opportunity to come in and talk to a mortgage expert to clarify any questions.  Please call us at (250) 862-1806 begin_of_the_skype_highlighting            (250) 862-1806      end_of_the_skype_highlighting to set up an appointment or visit our website to contact us http://www.okanaganmortgages.com/contactus.php

How to Calculate a Home Buying Budget

Help Your Friends

The Bank of Canada recently released a paper on the "Competition in the Canadian Mortgage Market", which presented some very interesting findings.

• On average, higher income households pay a higher rate on their mortgage than lower income families.
• Banks with large branch networks charge higher rates on their mortgages.
• Borrowers who put less down on their mortgage pay a rate premium over those who put more down.
• Banks offer larger discounts to new clients than existing clients.

This report also found that just over 30% of people who applied for a mortgage did so through a mortgage broker.  There are a lot of people out there who didn't benefit from the services that I provide my clients.
As a mortgage broker, I make sure that you are receiving the lowest possible rate on your mortgage!  Even if you feel more comfortable going to one of the larger banks, I can get you a discounted rate that they won't offer you as a client of that bank.
Tell your friends about the benefits of using a mortgage broker!  They may be one of the people that haven't received the best rate available to them.  Wouldn't you want to help your friends thousands of dollars on their mortgage?

http://www.okanaganmortgages.com/

Help Your Friends

Demand for luxury homes intensifies amid rising Canadian and global wealth

">

KELOWNA, BC, May 18 /CNW/ - Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to a report released today by RE/MAX.

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010. Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent). Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end. Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.

"The strength of the upper-end segment continues to defy expectations," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage. Western Canada, in particular, will continue to see the upside benefit of investment from abroad.

UPPER END RESIDENTIAL SALES - January 1 to April 30

                                                 Market Price Point Sales   '10 Sales             '11           % +/-

Greater Vancouver                     $2 million                            343                    747          118
Victoria                                      $1 million                              91                      78          -14
Edmonton                                  $750,000                              87                      70          -20
Calgary                                      $1 million                              96                    145            51
Regina                                       $500,000                              42                      40            -5
Winnipeg                                   $500,000                              75                      93            24
London-St. Thomas                  $500,000                             118                    107            -9
Kitchener-Waterloo                   $500,000                            133                    122            -8
Hamilton-Burlington                   $750,000                              69                      78            13
Greater Toronto                        $1.5 million                          399                    435              9
- Mississauga                            $1.5 million                            42                      17           -60
- Oakville                                  $1.5 million                            23                      37            61
- Richmond Hill/Thornhill           $1.5 million                            25                      32            28
Ottawa                                     $750,000                               63                    100            59
Halifax-Dartmouth                    $500,000                               60                      76            27

Source: RE/MAX, Local Real Estate Boards

While foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in Greater Vancouver. The vast majority of regions reported that locals were the primary drivers of demand for luxury product. A number of factors position Canada as an attractive option, foremost that its real estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws. To those from abroad, it's the perfect mix.

"Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country," says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. "The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally. The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines."

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few. While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward. Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels. Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets. This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011.

As Canada's millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada's gateway centres. Infill, renovation and new construction are helping to some extent—while driving up prices in tandem. The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.

Limited inventory levels in Canada's largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

To view the complete RE/MAX Upper-End Market Trends Report 2011, click here: http://files.newswire.ca/577/REMAXUpperRpt2011.pdf

http://www.okanaganmortgages.com/

Demand for luxury homes intensifies amid rising Canadian and global wealth

Divorce and Your Home

There are many questions you might be asking at this time, particularly surrounding your home. We are here to help. Let's break down some the the basics.

Q "I think I want to stay in my home...what do I need to keep in mind?"

First, take into consideration the size of the home, utilities, payments, family needs. Does staying in the home truly make sense? You will likely now be entirely responsible for the house payment, taxes, insurance, upkeep, maintenance and other related bills. Your household income may be decreasing, and your overall expenses may be increasing if you are subject to a court order for support, so it is important that you are aware and thorough in determining what your actual expenses will be in keeping and maintaining the home on your own.

Q " My spouse is entitled to share in the equity we have in our home...how is this handled?"

The division of family assets including the equity in your home, is a complicated matter that should be discussed with your lawyer. However, the equity in your home needs to be determined by an appraiser- call us if you need a recommendation and referral. The appraised value less the eventual costs of selling (commissions and seller closing costs) equals the equity to be split between the parties.

You are often able to come to an agreement with the assistance of your legal advisor as to the amount of equity to be paid to your spouse or there may be a court ordered mandate for distribution of the equity, possibly including interest on that amount. This means that you will likely have a specified amount of time to obtain the funds needed to give the ex-spouse their portion of the equity. . This can be done by cashing out the equity in the home with a new mortgage, selling the home or by using other assets you have to "buy out" their stake in the home.

If you choose to stay in the home, you have two financing options to pay your ex-spouse. You can either refinance your home to get cash out, or you can obtain a new second mortgage or home equity loan. This is where you will want the advice of a trusted mortgage professional.

Even though you may now be qualifying for the loan without a spouse's income - with your own good credit and income, you can usually quality on your own. Often, child support and alimony is viewed as stable income, it it has been received for three months and is likely to continue for at least three years.

Q "What if I am the one leaving the home?"

It is important to know that even though you may have agreed to leave the home or the divorce order awarded the home to your spouse, you are still obligated for the mortgage debt in the eyes of the mortgage company.

Q " I think I want to stay in my home...what do I need to keep in mind?"

Unfortunately for many, divorce is a time of great financial hardship and credit challenges. Because you are obligated on the mortgage until it is paid in full or refinanced, it is imperative that the person responsible for the payment remains current. One possibility you have to remove your name from obligation is to contact the company which currently holds your mortgage, and ask to do a "Qualifying Assumption". This process will leave the existing loan in place, but would relieve the non-occupying spouse from their obligation on the loan. Another option ideally is for the spouse remaining in the home to qualify for a new mortgage and release you from the existing obligation. Give us a call, and we can explain more about this process, or help you determine if a refinance may make more sense instead.


Q If I want to go buy another home - am I going to be out of luck while I am still listed on the old mortgage?

A although it is difficult and not usually advised to purchase another home until your divorce is final,we are happy to look over how you expect the financial situation to be finalized, and help you get ideas as to what you will qualify for. Remember that in most situations, child support and alimony must have been received for three months, and be likely to continue for at least three years in order to use this income for qualifying. even if you are still listed as a co-borrower on the mortgage for the prior home, if the separation agreement sates that you are not obligated for the mortgage, many mortgage programs will allow you to be qualified without this obligation. However, any late payment issues on the mortgage held by your ex-spouse will impact your credit scores, as the mortgage is still a joint liability in the eyes of the credit bureaus until you are removed via a refinance, sale or other method as described above.

Q What is I do want to purchase another home before the divorce is final?

A This may be possible, but be aware that your spouse may have a marital interest in your new property, and it will need to be handled by your attorney. You will also have to qualify with the full debt from the current home, because there would not yet be a final separation agreement assigning ownership. Be very careful with this situation, especially as the financial situation you expect...may not be the final result, once the divorce is finalized.

Taking the time to talk with us during this process and before you decide to start looking at a new home can help eliminate many of the concerns or questions that ofter surface in these situations. We understand this may be a very difficult time, and you have many decisions to make. We can provide you with a free financial consultation, credit check, an mortgage strategy review - so that you have the answers and information you need to make good decisions.


We will help you sort out the options and strategies you have at hand, and help you at this time...and down the road. We understand that it's not just a house - it's your home.

www.okanaganmortgages.com

Divorce and Your Home

Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA –The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

As anticipated in the January Monetary Policy Report (MPR), the global economic recovery is becoming more firmly entrenched and is expected to continue at a steady pace. In the United States, growth is solidifying, although consolidation of household and ultimately government balance sheets will limit the pace of the expansion. European growth has strengthened, despite ongoing sovereign debt and banking challenges in the periphery. The disasters that struck Japan in March will severely affect its economic activity in the first half of this year and create short-term disruptions to supply chains in advanced economies. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which is being further reinforced by supply shocks arising from recent geopolitical events. These price increases, combined with persistent excess demand conditions in major emerging-market economies, are contributing to the emergence of broader global inflationary pressures. Despite the significant challenges that weigh on the global outlook, global financial conditions remain very stimulative and investors have become noticeably less risk averse.

Although recent economic activity in Canada has been stronger than the Bank had anticipated, the profile is largely consistent with the underlying dynamics outlined in the January MPR. Aggregate demand is rebalancing toward business investment and net exports, and away from government and household expenditures. As in January, the Bank expects business investment to continue to rise rapidly and the growth of consumer spending to evolve broadly in line with that of personal disposable income, although higher terms of trade and wealth are likely to support a slightly stronger profile for household expenditures than previously projected. In contrast, the improvement in net exports is expected to be further restrained by ongoing competitiveness challenges, which have been reinforced by the recent strength of the Canadian dollar.

Overall, the Bank projects that the economy will expand by 2.9 per cent in 2011 and 2.6 per cent in 2012. Growth in 2013 is expected to equal that of potential output, at 2.1 per cent. The Bank expects that the economy will return to capacity in the middle of 2012, two quarters earlier than had been projected in the January MPR.

While underlying inflation is subdued, a number of temporary factors will boost total CPI inflation to around 3 per cent in the second quarter of 2011 before total CPI inflation converges to the 2 per cent target by the middle of 2012. This short-term volatility reflects the impact of recent sharp increases in energy prices and the ongoing boost from changes in provincial indirect taxes. Core inflation has fallen further in recent months, in part due to temporary factors. It is expected to rise gradually to 2 per cent by the middle of 2012 as excess supply in the economy is slowly absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored.

The persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of material excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information note:

A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2011. The next scheduled date for announcing the overnight rate target is 31 May 2011.

Bank of Canada maintains overnight rate target at 1 per cent

Should You Use a Mortgage Broker?

What you need to consider when choosing between a mortgage broker and going straight to a financial institution.

Patricia Lovett-Reid



Be it suburban split level, swank downtown condo or rural country manor, when it's the right fit, you know it. But having the keys in hand to the place that best suits you will take plenty of research and leg work — and will likely occupy your dreams at night. And it should. Buying a home is one of the biggest investments you'll make. Just as you wouldn't make a commitment of that size without asking the right questions and sneaking a peek under the rug, it's important to put equal effort into finding the right mortgage.

Generally, there are two ways to obtain mortgage financing in Canada — either indirectly through a mortgage broker, or directly through a financial institution or mortgage lender. The mortgage market is a highly competitive market and the players are standing in line to win your business.

* For more info on buying a house, check out our Home Buyer's Guide

So who are the players?

A mortgage broker does the shopping for you — presenting your information to lenders to find a fit. He or she has access to numerous lenders and can provide you information on various services and loan types, and will shop around for attractive rates and terms for your mortgage. The use of mortgage brokers is very common in the United States and they are growing in popularity in Canada. According to research by the Canadian Association of Accredited Mortgage Professionals (CAAMP), mortgage brokers closed approximately one quarter of all mortgage deals in Canada in 2010.

A mortgage lender in Canada is most likely to be a major bank, trust company, credit union or other finance company. Whether generated by a broker or a bank, chartered banks finance more mortgages than all other lending institutions combined. Most bank advisers or bank mobile specialists strive to provide a holistic solution that is best for you, using their suite of financial products and services. They might, for example, take into consideration all outstanding debt, such as credit cards, loans, or lines of credit as part of an overall solution for your particular needs. They could help improve cash flow and minimize your borrowing costs over the long term. Banks are aware of the highly competitive landscape and offer competitive rates.

So will it be a broker or a bank?

While there are advantages to both, my advice, no matter which route you choose, would be to have the right questions prepared for your mortgage professional. Interest rates are just the beginning. What might the new mortgage rules mean in your situation? Here are some important areas to consider:

Term: Ask your broker or lender to break down the costs of different terms. Do you need a fixed term to better sleep at night, or would a variable term work for you? If you expect to have extra money to pay down your mortgage, perhaps you should consider an open term versus a closed term.

Amortization: Have the bank or broker calculate the difference amortization schedules will make — will you spread the payments out over 25 or 30 years? Or can you do 10?

* For more info on buying a house, check out our Home Buyer's Guide

Prepayment allowance: How much and how often will you be able to pre-pay every year before being charged a penalty?

Frequency of payments: Which payment frequency is most suitable for you — weekly, bi-weekly, rapid bi-weekly? Will the lender allow you to make accelerated payments?

Portability: If you move, can you take your mortgage with you?

Assumability: If you sell, can the buyer, subject to a credit approval, assume your mortgage and rate?

Point of contact: Who can you call if you have a question or a problem? If you use a broker to arrange mortgage financing, will he or she have any involvement once the financing is in place? Are call centres and branches available for inquiries?

The CAAMP survey I mentioned also found mortgage holders reported, on average, that they obtained 1.96 quotes when they signed up for their current mortgages. That indicates that whether indirectly through a broker, or directly through a lender, many Canadians are getting a second opinion when it comes to mortgage financing. The best advice? Do your homework, shop around and be ready to pepper your mortgage professional with questions. Consider your mortgage as carefully as you will the purchase of your dream home.

Http://www.okanaganmortgages.com

Should You Use a Mortgage Broker?

`Why`` am I a Mortgage Broker and `Why`Should You Do Business with Me?

My business coach asked us last week to come up with our “Why”.  He gave us a questionnaire to help us and several questions and then concluded with a Skype call.

A large number of people come to meet with me about their mortgage and they are not really sure why they are there or what they should ask.  Well let me tell you getting a mortgage is a lot more than finding the best rate.  It is important that you find the right broker that will find the right product to suit your needs.  For example what if you need or want to pay down additional money on your principal within the first year or during the term?  Not all lenders allow or have the same prepayment options.   Should you take a variable rate mortgage or fixed?  What are the risks?  What if you are self employed and have a lot of deductions and so your net income doesn’t look so good?  These are just some of the many decisions that I help my clients make every day.

The other day I had the opportunity to assist a client who had a child who was very ill.  The family had taken the child for many surgeries and found them selves unable to make their mortgage payment.  I was devastated for the family and wanted to do something to take the stress off of them so they could concentrate on their family.  I called the lender and had them waive the NSF fee and the late interest and did some investigation and discovered they could capitalize a few payments until they got back on their feet. 

This experience helped me to discover my “why”.  I want to make a difference in every life I touch whether that means helping you get a mortgage to buy your home or helping you to get the best rate with your existing lender, if that makes the most sense given your circumstances.  If I can help you please call me at (250) 469-1611.

http://www.okanaganmortgageteam.com

`Why`` am I a Mortgage Broker and `Why`Should You Do Business with Me?