Underwriting delays are widespread!

 

 

 

 

 

 

 

 

With so many people rushing to lock in fixed rates, many lenders are seeing record volumes.  As a result, underwriting delays are widespread.  

In many cases, application turnaround times are five or more business days.  Reports of certain low-rate lenders with two week backlogs in their queues. Also with many Realtors in Alberta insisting that their buyers are Pre-Approved it is creating a log jam for lenders. If you have all of the required documentation it is much easier for the lender to issue a quick pre-quilification certificate.

 

Remember that all high ratio deals are subject to CMHC and Genworth approval regardless of your pre-approval. It is important to note that CMHC and Genworth do not do Pre-Approvals and only work on live files.  

Normal approval times vary, but have traditionally been 1-2 days, sometimes even same-day. 

Application Tips:

• If you are purchasing a property and need to lift conditions quickly, make sure to keep the above in mind. Service levels are high so plan ahead 
• If you want a highly competitive rate, ask the property vendor for five days minimum to arrange financing.  (Consulting a mortgage planner beforehand will help you gauge the required approval time.) Often you will be able to submit a rate hold for 120 days without an application
• If you need a pre-approval, be prepared to wait 5+ business days in many cases.
• Have your documentation (job letter, pay stubs, etc.) on hand to minimize approval time.
• If you are just looking for a rate hold, often a name and number can secure your rate for up to 120 days 

On the plus side, once your application is submitted to a lender, that lender will guarantee you get that day’s rate if you are approved.  This generally applies regardless of how long it takes for the lender to issue an approval.

www.canadianmortgagetrends.com

TD Canada Trust Raises Fixed Rates!

With the leap in bond yields yesterday, a bunch of lenders are once again raising fixed mortgage rates.

TD was the first of the Big 5 today to announce a rate increase.  Canada’s second largest bank is hiking rates as follows:

• 5-year posted fixed rate:  5.85%, up 0.40%
• 4-year posted fixed rate:  5.14%, up 0.30%
• 3-year posted fixed rate:  4.65%, up 0.50%

That 5-year move is the biggest increase in almost a year.

TD also announced it is lowering its 1-year rate by 0.15%.

If history is a guide, the other large banks will likely announce their own increases in the next 24 hours.

Assuming the banks all move their 5-year posted rates to 5.85%, that will amount to a 0.60% increase in the last nine days.  On a $200,000 5-year mortgage with 25-year amortization, that equates to over $5,700 more interest over five years.

If there’s one bright side, it’s that IRD penalties will potentially fall for certain people who are breaking their fixed-rate mortgages early.

If  you still have not saved your rates contact me TODAY for a 120 day rate hold, offer ends june 10th at 11:00pm eastern time

Bond Rates Rise! Fixed Rates to Jump

Bond Yields Jump Again The 5-year government bond rocketed to 2.71% today. Various lenders have already issued fresh new fixed rate increases. More may follow tomorrow if yields don’t retrace.

Two-year bond yields also broke to the upside. That may lead to upcoming rate increases on shorter-term mortgages, which have been insulated from rate hikes for several months.

 

If you’re shopping for a fixed mortgage, be safe and get your application in soon.

TD Canada Trust Increases 5,6,7 and 10 year rates

Just announced!!

TD Canada Trust is increasing the 5,6,7 and 10 year Fixed mortgage rates and has also changed the rate for the 10 year special offer to 5.45%, these rates are effective midnight June 3rd, 2009 EST

This may be the time to lock in, what is your current rate?

Vancouver for under $1,000 per month!!

THOMASINA BARNES

From Friday’s Globe and Mail

March 13, 2009 at 11:09 AM EDT

• 8988 HUDSON ST., UNIT 306
• ASKING PRICE: $239,900
• SELLING PRICE: $234,000
• PREVIOUS SELLING PRICE: $158,900 (2004)
• TAXES: $958 (2008)
• DAYS ON MARKET: five
• LISTING AGENT: Keith Roy, Macdonald Realty

Low interest rates mean low mortgage payments, a combination that is bringing buyers back to the market, agent Keith Roy says.

“Most people don’t care about the price of the home as much as they care about the monthly payment for owning the home,” he says.

“With interest rates at historic lows and prices down year over year, first-time buyers and renters are returning to the market.”

Enlarge Image

The suite sold to a first-time buyer after the first open house.

While the unit is small, the new owners were “attracted by the modern design and steel construction” of the five-year-old building, Mr. Roy says.

The bachelor suite also has reclaimed fir floors, a gas fireplace and stainless steel appliances. “Even though it is only 470 square feet, this unit is well laid out and has a separate area for the bed, a walk-in closet and large soaking tub,” he says.

The loft-style apartment also has 10-foot ceilings, granite countertops and a balcony for barbecues.

Other amenities include ensuite laundry, an underground parking stall, a three- by six-foot storage locker and communal bike room.

A $136 monthly maintenance fee covers garbage pickup, gardening, hot water and the maintenance and use of an in-house fitness centre.

“You should not be fooled by size,” Mr. Roy says. “The new owners of this suite found true value and will pay less than $1,000 a month to own this home.”

TD Canada Trust Lowers Mortgage Rates

Changes in Residential mortgage rates!

SUMMARY

Effective April 22, 2009, our Mortgage rates have changed as indicated below.

Term	Rate		Change
6-month convertible	4.90		N/A
1-year open	7.15		N/A
1-year closed	4.20		N/A
2-year closed	4.70		N/A
3-year closed	4.90		N/A
4-year closed	5.14		N/A
5-year closed	5.45		N/A
6-year closed	6.30		N/A
7-year closed	6.70		N/A
10-year closed	6.70		N/A
1-year closed Special	3.20		N/A
4-year closed Special	4.09		N/A
5-year closed Special	4.15		N/A
10-year closed Special (*2)	5.25		N/A
Variable Interest Rate Mortgages	TD Mortgage Prime	Variance	Rate
Closed VIRM: Rate is TD Mortgage Prime + 0.80%	2.50	+0.80	3.30
Open VIRM: Rate is TD Mortgage Prime + 1.00%	2.50	+1.00	3.50
Home Equity Line of Credit	TD Prime	Variance	Rate
Float: Spring Money-Out Limited Time Offer: Rate is TD Prime + 1.00%(*1)	2.25	+1.00	3.25

Notes:

• (*1) TD Prime + 1.00% is a “Spring Money-Out” Limited Time Special, which is valid on fundings through June 30, 2009
• (*2) Special is valid on new mortgage applications received by May 31, 2009 and mortgage must be advanced by July 31, 2009. Offer may be changed, extended or withdrawn at any time without notice. Mortgage renewals must be signed and submitted to TD Canada Trust by May 31, 2009.

 

Announced today – TD Canada Trust pricing structure on the 4-5 year fixed term products.

Effective April 7, 2009, our Mortgage rates have changed as indicated below.

Term	Rate	Change
6-month convertible	4.90	-0.30
1-year open	7.15	-0.30
1-year closed	4.20	-0.30
2-year closed	4.70	-0.30
3-year closed	4.90	-0.30
4-year closed	5.14	-0.30
5-year closed	5.45	-0.10
6-year closed	6.30	-0.10
7-year closed	6.70	-0.10
10-year closed	6.70	-0.10
1-year closed Special	3.20	-0.30
4-year closed Special	4.09	-0.30
5-year closed Special	4.15	-0.10
10-year closed Special (*2)	5.25	N/A
Variable Interest Rate Mortgages	TD Mortgage Prime		Variance	Rate
Closed VIRM: Rate is TD Mortgage Prime + 0.80%	2.50		+0.80	3.30
Open VIRM: Rate is TD Mortgage Prime + 1.00%	2.50		+1.00	3.50
Home Equity Line of Credit	TD Prime		Variance	Rate
Float: Spring Money-Out Limited Time Offer: Rate is TD Prime + 1.00%(*1)	2.50		+1.00	3.50

Notes:

• (*1) TD Prime + 1.00% is a “Spring Money-Out” Limited Time Special, which is valid on funding through June 30, 2009
• (*2) Special is valid on new mortgage applications received by May 31, 2009 and mortgage must be advanced by July 31, 2009. Offer may be changed, extended or withdrawn at any time without notice. Mortgage renewals must be signed and submitted to TD Canada Trust by May 31, 2009.

HSBC Offering 5 year Closed at 3.99%

HSBC has through select brokers offered a segment shattering 3.99% on a five year fixed product that has (as expected) a limited time offer. This is quite a drastic rate and most lenders and brokers including INVIS’s own ‘best rate’ site have left this off the charts as it is not offered to every broker. Has anybody been into the branch to get this rate? Last limited time offer that HSBC put on the 5 year term it was not avalible to the branch.

Having clients go outside for your best rates seams like a poor business model to me, I feel very lucky that TD allow us to offer the most competitive rates in the marketplace without all the strings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With current market conditions, I have been seeing a steady flow of clients that have to pay IRD penalties after they locked into rates only a year or so ago… take a VIRM rate; even if it is a closed VIRM you can fix your mortgage at current discounted rates at any time.

Get a Total Cost Analysis of your current mortgage and see if changing refinancing is a smart option send me an email at david.hudson@td.com

Total Cost Analysis

Total Cost Analysis Report *Sample*

TD HELOC Rates Fall – TD Prime at 2.5%

Effective March 4, 2009, TD Prime rate has changed as follows:

Term	Rate		Change
6 month convertible	5.20		N/A
1-year open	7.45		N/A
1-year closed	5.00		N/A
2-year closed	5.75		N/A
3-year closed	5.75		N/A
4-year closed	5.69		N/A
5-year closed	5.79		N/A
6-year closed	6.40		N/A
7-year closed	7.00		N/A
10-year closed	7.35		N/A
1-year closed Special	4.00		N/A
4-year closed Special	4.39		N/A
5- year closed Special	4.49		N/A
Variable Interest Rate Mortgages	TD Mortgage Prime	Variance	Rate
Closed VIRM: Rate is TD Mortgage Prime + 0.80%	3.00	+0.80	3.80
Open VIRM: Rate is TD Mortgage Prime + 1.00%	3.00	+1.00	4.00
Home Equity Line of Credit	TD Prime	Variance	Rate
Float: Rate is TD Prime + 1.50%	2.50	+1.50	4.00

 

THE 2009 BRITISH COLUMBIA BUDGET TD Economics

Interesting TD Economics article by Pascal Gauthier with a focus on British Columbia. Enjoy!

HIGHLIGHTS

• After a small $50 million surplus in fiscal year (FY) 2008-09, planning deficits are estimated at $495 million in FY 2009-10 and $245 million in FY 2010-11
• Return to balanced budget by FY 2011-12, with the help of cost savings worth $1.9 billion over 3 years
• No forecast allowance, but prudent growth forecasts and contingency amounts
• $9 out of every $10 in new spending towards health care
• Few new tax measures, back-end loaded to FY 2011-12
• Capital spending in infrastructure ramped up significantly (+ $14 billion)

British Columbia is feeling the pinch from the severe ongoing global recession, like every other region in the country. Compared to last September’s quarterly fiscal update, downward revisions to growth forecasts by the private sector have translated into a massive revenue shortfall of $6.6 billion over the Province’s 3-year fiscal planning horizon. As a result, for the first time in six years, the province is faced with a deficit. However, the deficits are expected to be modest both in absolute size (cumulating to $740 million over two years) and relative to the size of the economy (at 0.2% of nominal GDP in fiscal year 2009-10). The government has chosen not to include a forecast allowance as in previous years. However, in order to mitigate risks to its projections, it will use economic growth forecasts significantly below the private-sector consensus, and contingency amounts of $250 million to $385 million per year.

Economic and Revenue Outlook

The private-sector consensus forecast for real GDP growth calls for no growth (0.0%) in 2009. Akin to the prudent approach taken by the Federal Finance Department, B.C. Finance is playing it safe by using a forecast significantly below the private-sector average. Their assumption is for a contraction of real GDP of 0.9% this year, which is very close to our own call for a contraction of 1.0%. When compared to the Budget 2008 plan, the downward adjustment to revenue projections is broadly based, but most badly hit are own-source revenues in the form of resource royalties, corporate income taxes, and property transfer taxes. Similarly, but with a lesser difference, their real GDP growth forecast of 2.4% for 2010 lies below the private-sector forecast of 2.8%. Our own forecast for next year is more bullish and suggests some upside risk vis-à-vis their projection, with the main difference hinging mostly on the projected direct and indirect boost to growth from hosting the 2010 Winter Olympics.

Spending measures

Savings worth $1.9 billion over the 3-year planning horizon are being targeted, $250 million of which are yet to be identified. Administrative spending will be put under the microscope, while the number of senior executives in government will be slashed by 20% and no additional planned wage increases are being budgeted for upcoming rounds of public sector negotiations. The expected savings are being recycled towards key spending areas, but mostly health care. In fact, $4.8 billion, or 90% of all additional spending, is slated for health care. The remainder of additional spending will go to education, social services, safety, communities, and the environment.

Very much in line with a theme omnipresent in the Federal Budget and very likely to show up in other upcoming provincial Budgets, infrastructure spending is being ramped up significantly – to the tune of $14 billion over 3 years. Of this amount, $10.6 billion is for approved projects within the Province’s capital expenditure plan, while $2 billion is provided on a cost-shared basis with the Federal government, and the remaining $1.4 billion is for local infrastructure in partnership with the Federal and local governments.

Tax measures

The very few new tax measures introduced were understandably back-end loaded to FY 2011-12 and beyond. As announced in November, a 2-year property tax deferment program is being introduced. The B.C. Mining Flow-Through Share (non-refundable) Tax Credit is being extended by one year to the end of 2009. Expiry dates for film tax credits are being eliminated, while the credits themselves will be made available to other Canadian (non-B.C.-based) companies. Furthermore, starting in FY 2011-12,

The industrial property tax credit will increase from 50% to 60%, saving mills, mines, and other industrial employers $11 million per year. This tax relief will be funded from carbon tax revenues (intended to be revenue-neutral).

The Low Income Climate Action Tax Credit will increase by 10%, representing foregone revenue of $15 million per year.

A Northern and Rural homeowner benefit increase of $200/year, also funded by carbon tax revenues.

The farm land school property tax will decrease by 50%.
Bottom line

Faced with such a U-turn in economic fortunes in a short amount of time, the government has elected to modify its balanced budget legislation to allow for a cyclical deficit. Not having done so, and forcing taxes hikes and/or more drastic spending cuts could have meant exacerbating the recession. In the current context, leaning against this recession, along with other governments, and allowing a modest deficit while ramping up capital spending seems appropriate. As a result of these deficits and additional capital spending, the (taxpayer-supported) debt-to-GDP ratio will end up 2 percentage points (from 13.8% in FY 2008-09 to 15.8% in FY 2011-12) higher by the time a balanced budget is within reach. This would still lie below the 16.1% level recorded in FY 2005-06 and leave the province in a healthy fiscal position once the economic recovery has taken hold.

Pascal Gauthier, Economist
416-944-5730

All-in-one Strategy TD HELOC

All-in-one Strategy

all-in-one-strategy This quite a conservative strategy which can dramatically reduce overall interest paid on a mortgage (and reduce amortization).  What is further, this strategy is particularly beneficial if you have other outstanding higher interest debt (then it can actually improve your cashflow on top of that).

all-in-one-strategy $4000 in penalties & will still be far better off in the long run.  As opposed to waiting until his mortgage matured 4 years later.

 

The Smith Maneuver

The best example of how this strategy works can be found on Fraser Smith (the strategies inventor) website.  http://www.smithman.net/home.html.

This is a strategy we covered in our Advanced Financial Planning session.  As you paydown your mortgage you borrow back some of the  principal and place this in an investment.  You then get a tax refund for the investment loan, pay that against your mortgage.  You are essentially converting non tax-deductible bad mortgage debt, into good tax deductible  debt.  & in the long run the can be substantially better off.