This morning, Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules intended to ensure the stability of Canada’s housing market.

These measures include:

• Amortization period capped at 30 years
• Reduction of government backing for home equity lines of credit
• Maximum refinancing reduced to 85% from 90% LTV

If you have any questions about these new changes, please contact me for further details.

In this particular case, $410 was freed up in monthly cash flow and the refinanced mortgage interest rate was lower. In many situations, however, consolidating debt into a mortgage comes at a cost: You must break your current mortgage and the high-interest debt then gets amortized into the new mortgage balance at a lower interest rate. Your overall debt goes up by a few thousand dollars (the cost to break the term and perhaps paying a CMHC premium on the increased balance on the mortgage), the rate of interest you pay overall goes down, but those high-interest debts are now being paid off over much longer periods of time.

So what’s better? Paying high interest for a few years or paying lower interest for a few decades? Well, you have to do the math, and then you have to figure out if you are just giving yourself more rope with which to hang yourself. Request an appointment today at Moncton Mortgage and we will do the calculation for you at NO charge!!

MatMortgage.ca Radio Ad

Sixty-five percent of homeowners pay off their credit card balances each month (versus 48% of non-homeowners). Furthermore, a quarter of those homeowners with mortgages have managed to make a lump-sum payment or accelerate their mortgage payments in the past year.

Nearly half (44%) of homeowners were able to pay all of their bills and save some money in the past year, suggesting a strong correlation between homeownership and financial fitness.

The Financial Fitness survey was conducted in conjunction with the Canadian Association of Credit Counselling Services. Compared to the same survey undertaken in 2007 when the economy was booming, Canadians are even more likely now to say their financial fitness is good (55% versus 50%).

Other key survey findings show:

• Mortgage holders more likely to have accelerated or made a lump-sum payment include those with incomes $75-$99k (32%) or $100k+ (30%), and women more than men (26% versus 21%).
• 49% of homeowners made down payments of 20% or more on their purchase
• 13% of homeowners say they are in great financial shape
• 12% of homeowners say they have requested a credit report within the past 12 months
• 59% of Canadians say they pay their credit cards in full each month
• 39% of Canadians say that in the past year they were able to pay their bills and save some money. A further 41% were able to pay their bills but not save
• First-time buyers/those who intend to buy a home as well as those requiring mortgage insurance are more likely to have spoken to a financial planner/coach in the past 12 months

Click here for complete survey findings.

Selecting the mortgage term that is right for you can be a challenging proposition for even the savviest of homebuyers, as terms typically range from six months up to 10 years.

By understanding mortgage terms and what they mean in dollars and sense, you can save the most money and choose the term that is best suited to your specific needs.

The first consideration when comparing various mortgage terms is to understand that a longer term generally means a higher corresponding interest rate. And, a shorter term generally means a lower corresponding interest rate. While this generalization may lead you to believe that a shorter term is always the preferred option, this is not always the case. Sometimes there are other factors – either in the financial markets or in your own life – that you will also have to take into consideration when selecting the length of your mortgage term.

If paying your mortgage each month places you close to the financial edge of your comfort zone, you may want to opt for a longer mortgage term, such as five or 10 years, so that you can ensure that you will be able to afford your mortgage payments should interest rates increase.

By the end of a five- or 10-year mortgage term, most buyers are in a better financial situation, have a lower outstanding principal balance and, should interest rates have risen throughout the course of their term, will be able to afford higher mortgage payments.

If you are shopping for a mortgage for an investment property, you will likely want to consider choosing a longer mortgage term – depending, of course, on your overall plan. This will allow you to know that the mortgage payments on the property will be steady for a long time and enable you to more accurately project your future income from the property.

As well, if you know you will not be staying in the same home for the next five or 10 years, opting for a shorter term can save you significant fees when it comes to early payout penalties.

Choosing the right mortgage term is a unique decision for each individual. By understanding your personal financial situation and your tolerance for risk, I can assist you in choosing the mortgage term that will work best for your situation.

As always, if you have any questions about mortgage terms or your mortgage in general, I’m here to help!

Today started our marketing campaign in Moncton and Dieppe, You will be able to see our billboards in a few areas around town.
Here it is

Matmortgage.ca Billboard

A slowing US economy; uncertainty regarding Europe; a slowing Chinese economy and a rapidly cooling real estate market here at home, all will work to limit rate increases this year…

from CIBC World Markets’article

The foremost and biggest difference is that the Mortgage Broker works for YOU and the Bank Mortgage Specialist well you guessed it, works for the bank.

The Broker will make sure you get what is best for you and help you save as much as he can save you, his counter part will make sure the banks makes the most as it can in the deal.

The Broker can offer you products from many banks, credit unions and lenders. He hunts down the current best offers to be able to pass them on to you. If he doesn’t, he won’t survive, since he only get paid once the deal has been made.

If you would like to get a more information or apply, visit this page for Moncton Mortgage Broker