CMHC Backing Fewer Loans

Canada Mortgage and Housing Corp. is cutting back on mortgages it insures as the Crown corporation edges closer to a $600-billion cap imposed on it by the federal government. A CMHC spokesman confirmed that it had approached a number of lenders at the end of 2011 about reducing its "bulk or portfolio insurance" after third-quarter results showed the agency had committed to back $541-billion in mortgages. CMHC, which guarantees mortgages held by financial institutions, is ultimately backed by the federal government and needs approval to go over the $600-billion limit — something that would create greater risk for taxpayers should the housing market collapse. "CMHC has recently received an unexpected level of requests for large amounts of CMHC portfolio insurance." said Charles Sauriol, a spokesman for the Crown corporation, in an email. "To ensure equitable access to portfolio insurance within CMHC's annual limits, an allocation process is being established which has caused some delays. Portfolio insurance provides lenders with the ability to purchase insurance on pools of previously uninsured low ratio mortgages and does not impact CMHC's transactional business." Financial institutions are required to have mortgage-default insurance when a consumer has less than 20% equity. However, the banks have been seeking insurance on loans with even high downpayments — something not required by law — so they can securitize those bulk lending loans, thereby getting them off their balance sheets and reducing their capital requirements. In those cases in which the loans to value is less than 80%, the bank pays the insurance charge instead of the consumer.

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Canadian home prices slide...

Canadian house prices dropped in November for the first time in nearly a year, according to the monthly Teranet-National Bank house price index released Wednesday. The 0.2% drop followed two months of flat prices, and was the first decline in the index since a "brief correction during the three months ending November 2010," said National Bank senior economist Marc Pinsonneault. The national composite index, which tracks registered prices of homes sold at least twice, shows prices fell in eight of the 11 metropolitan markets tracked — one more than in October. November housing prices (% change m/m ~ % change y/y): Calgary: -1.6  ~ 0.5 Edmonton: 0.1 ~ 1.0 Halifax: 0.5 ~ 2.8 Hamilton: -0.3 ~ 4.4 Montreal: 0.4 ~ 7.2 Ottawa: -0.2 ~ 4.2 Quebec: -0.2 ~ 6.0 Toronto: -0.2 10.8 Vancouver: -0.2 9.1 Victoria: -0.9 -0.3 Winnipeg: -0.1 7.5 National Composite: -0.2 7.1

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Mortgages: A Head Scratcher For Consumers

"We, the consumer, read about these mortgage issues in the media and try to understand but the complexity of these issues leave us somewhat baffled." The Bank of Canada decided to leave the overnight lending rate at 1%, and we're all but assured that rates will mill remain at current levels for the remainder of 2012.  Sure, things could change but for rates to trend upwards would mean that the BOC is no longer concerned about our fragile economy.  There was also good news – the Minister of Finance said there would be no changes to the  "mortgage rules" at this time.  With the caveat that Finance is prepared to intervene if necessary. What would make it necessary for the Fed's to intervene? Where's the line in the sand?  That's what I find intriguing about about the "consumer debt" debate.   Many have stated there should be real concern over the consumer debt levels but no one has stated that if we reach a point where the debt exceeds "X' percent we will have passed the point of no return.  Talking about these issues in an abstract or theoretical context may be interesting, and illuminating, but for it to have real impact – a change in borrowing habits – clearly defined parameters are required. Open dialogue is healthy and all stakeholders should be a part of the discussion.  I find it curious that the one stakeholder who we haven't heard much from as it relates to the "consumer debt" debate is, well, the consumer.  The text being allocated to this issue is courtesy of the politicians, bankers and those suppliers who benefit economically from increased borrowing.  I'm not sure what the collective voice of the consumer would be regarding this issue but if I was to venture a guess I would think it might sound something like this… "Firstly, we the consumers would like to thank the bankers, economist and politicians for giving us an opportunity to have our voices heard.  We consumers aren't as smart you folks are when comes to credit.   You're the experts and you do this everyday.  We read about these  issues and  try to understand but the complexity of these issues leave us somewhat baffled.  We hear from you really smart folks that our homes are overvalued by 10% to 15%.  Some of you  are also concerned about how much money we're borrowing.  Yet you same smart folks just started an interest rate war.   This is where it gets really complicated for us.  You say homes are overvalued yet you lower your  interest rates so you can compete for over valued properties to mortgage?   You say you're concerned about our debt levels yet you lower rates so we can take on even more debt?  These issues are way above our heads so we the consumers are going to focus on something which is much easier to understand,  like how to split an atom". Until next time, Cheers. Article written by Boris Bozic on the 24 Jan 2012: Article

5 Year Bond Yields...still good.

Canadian 5 yr bond yields markets to 1.408.  The spread (based on the 5 yr published rate of 3.39%) is still within the comfort zone at 1.982  http://www.tmxmoney.com/HttpController?GetPage=BondsAndRates&Language=en. The rate of return on your bond, can be read through a yield curve. If the increase in bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise. The comfort zone is between 1.85 and 2.10 Mark Kupina | Kupina Mortgage | 1.888.955.9011

Ferreira Home Inspections

Buying a home is a big decision. Knowing you are purchasing your home for the right value includes safety and good home maintenance. A thorough home inspection will help you get to know the property inside and out. For a personal and complete home inspection, we recommend Ferreira Home Inspections. Their home evaluation will help you in making an informed buying decision and includes an information information package. You are invited to follow along and are encouraged to ask questions throughout the inspection. Their quality service will provide you with the peace of mind in your homebuying decision. To book an appointment and for further information contact Ferreira Home Inspections. Joe Ferreira - Owner - (416) 460-1681 Email: ferreira_homeinspections@hotmail.com  

Making Your Mortgage Interest Tax Deductible

For US homeowners, mortgage interest is automatically tax deductible. But for Canadians, the write-off is not so straightforward. In order to make your mortgage interest tax deductible, homeowners must be able to prove that the money is being reinvested and is not being used for personal expenses. A properly structured mortgage-centric tax strategy has several key elements – the most important of which is a multi-component, re-advanceable mortgage or line of credit. It's best to have a single collateral charge with at least two components – usually a fixed-term mortgage and an open line of credit – that can track and report interest independently. This is absolutely essential under Canada Revenue Agency (CRA) rules and guidelines. Second, the strategy must employ conservative leverage-investment techniques – which is why a financial advisor must be involved in order to comply with federal regulations. The financial advisor should be a Certified Financial Planner (CFP) who is experienced in leveraged investing, and able to actively monitor a homeowner's portfolio on an ongoing basis. Homeowners who opt for a tax-deductible mortgage interest plan make their monthly or bimonthly mortgage payments the same way they would when making any type of mortgage payment. The payments go towards reducing the principal amount of the mortgage and are then moved over to the line of credit as the mortgage is paid down. But in order to be tax-deductible, the funds must then be transferred to an investment bank account, which can be done automatically by your CFP. Once the money is in an investment bank account, it can be reinvested and the money becomes tax deductible. Essentially, the homeowner is borrowing from the paid portion of the mortgage for reinvestment purposes. If you have a rental property, you can also use this tax-reduction strategy even further. When you receive your rent, you can then use the funds to help pay down your personal mortgage. Once paid, the rental funds move to the line of credit and are then transferred to the investment bank account. They are then used to pay down the mortgage on the rental property. Using this method, it is possible to have your mortgage interest become fully tax deductible in only 3.5 years. The ideal client Ideal borrowers for an advanced mortgage and tax strategy are typically professionals or other high-income earners who have a conventional mortgage (have at least 20% of the cost of the home to put towards a down payment) and have built up substantial equity. As high-income earners, their total debt-servicing ratio will be quite low and they will have excellent credit (700+ Beacon scores). These borrowers are financially sophisticated homeowners that are keenly interested in establishing a secure financial future and comfortable retirement. They also have good investment knowledge. The risks The financial benefits of tax-deductible mortgage interest are indisputable and justify the risks to the right borrower. That said, a problem can arise if a homeowner spends the funds as opposed to reinvesting them. As well, any tax refunds have to flow through the investment cycle in order to realize the benefits of paying down the mortgage as quickly as possible – and making as much of the interest payment as possible tax deductible. Short-term financial risk is liquidity risk (sometimes referred to as cash flow risk). Cash flow risk addresses the possibility that interest rates will sharply drive up the cost of borrowing at the same time as markets falter, resulting in a negative client monthly cash flow for a brief period of time. This short-term risk is typically only prevalent in the first two to four years because, after this period of time, the homeowner has stockpiled enough equity through annual tax refunds that other liquidity options exist and the risk is fully mitigated. Liquidity risk varies widely based on the balance sheet strength of the homeowner. Highly qualified homeowners are easy to manage as these borrowers have no difficulty meeting the short-term cash flow demand should the need arise. Take a look at the following website:  http://www.smithman.net/  I highly recommend Fraser Smith 's book and strategy, The Smith Manoeuvre. For more information on this strategy and discuss further, do not hesitate to contact us.

Kupina Mortgage | 1.888.955.9011 | info@kupinamortgage.com

5 year 2.95%...take that BMO!

The newest, unthinkable rate is now beatable! If you are looking to purchase or renewing/refinancing your existing mortgage, now would be the time to do it! For those considering the 2-week BMO promotion, be aware of its restrictions. Why deal with us vs. BMO... 1)     Max 25 year amortization vs. 30 years with us 2)     Max 10% Prepayment Privilege Payments vs. 15% and higher with us 3)     Max 10% Increase Payments vs. up to 100% with us 4)     BMO's Flexible Mortgage Features (called Break & Family Care) are not available with this mortgage vs. our lender's Flexible Mortgage Features which are available. 5)     Full repayment before maturity or discharge cannot occur before 5 years unless there is a bona fide sale of the property or if the mortgage is renewed and/or refinanced with BMO. Vs. Repayment with us is allowed with standard prepayment penalties 6)     Our Personal Mortgage Service Hours are the best in the business...24/7! Contact us for more information!!

Kupina Mortgage | info@kupinamortgage.com | 1-888-955-9011

     

1,900 jobs coming to Hamilton Ontario

Five years of work to build turbine towers for $1.5b wind energy project

Hamilton companies have landed the major contracts in a $1.5-billion offshore wind energy project. It's expected the majority of 1,900 jobs to build Windstream Energy's 300-megawatt Wolfe Island Shoals project near Kingston will land in the city as four local firms will fabricate the steel, assemble the components and transport the giant towers across Lake Ontario.

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Buy now to get an unheard-of rate for a 10-year mortgage

There's a brilliant reason to get into our expensive and quite possibly weakening housing market right now. A 10-year mortgage is now available for under 4 per cent. You can thank the banks for this unheard-of rate. In the past week or so, competition between them on mortgage rates has gone nuclear. Read more ... http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/buy-now-to-get-an-unheard-of-rate-for-a-10-year-mortgage/article2304460/

How Financially Fit Are You?

You can find out your Financial Score to help discover how financially fit you are. This Financial Fitness Score is the first of its kind in Canada and is available online at www.financialfitness.ca . The tool helps to determine how well you are at managing your finances and provides useful information and feedback based on your specific fitness level. For more information on how to revamp your credit and finances on a path to homeownership, contact 1.888.955.9011 or info@kupinamortgage.com .

Kupina Mortgage Hits YouTube

We have finally posted an introduction video on youtube.com. We will be periodically posting a video blog on our YouTube channel, so stay tuned. Check it out at the following link: http://youtu.be/8xGuwsQ9wuE

Economists vs. Canadians Attitude on the Current Market

A surprising majority of Canadians – 70% of them – say the country is in the middle of an economic recession, even though economists will tell you Canada hasn’t been in one since 2009, and is nowhere close.

The results, from a new online survey sponsored by the Economic Club of Canada and conducted by Pollara Strategic Insights, highlight a growing disconnect between how financial professionals quantify and measure the health of the economy, and how Canadians feel about their every day prospects.

Michael Marzolini, chairman of Pollara, called the results the most pessimistic in 16 years.

“Canadians are more self-centred. They believe themselves under siege,” he said at a breakfast presentation hosted by the Economic Club in Toronto that included top economists from Canada’s Big Five banks.

Click here for more details from the Financial Post.

Understanding Your Credit Report

As credit has become more and more abundant in our society, your credit report, and thus your credit rating, has become more important in your daily life. Your credit rating affects all aspects of your financial activities when it comes to borrowing money. Your credit rating also has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account. Your credit report itself is simply a listing of all of your mortgage and consumer debt. Here in Canada, the two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. Every time you borrow money, or make a payment on a loan or credit card, the lender then reports the information about the transaction to these two agencies. In addition to credit information, you will also find liens and judgments on your credit report as well as your address and possibly your work history. The accumulation of all of this information is called your credit report. The information on your credit report varies based on your creditors and what they have reported about you. Potential lenders and others, such as employers, view your credit history as a reflection of your character. Whether we like it or not, our financial habits have a lot to say about the way in which we choose to live our lives. The credit score, or beacon score, is a number which gives mortgage lenders an idea of your lending risk. Credit scores range from 300 to 900, the higher your credit score the better. The mortgage products and interest rate that you will qualify for are often determined by your credit score. One thing that many people do not know is that you have the legal right to obtain a copy of your credit report. A mortgage professional can help you obtain a copy of this report and go through it with you to verify that all of the information is true and correct. The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score.

Getting a Mortgage Pre-Approval

If you are looking for a new home, be sure you are pre-approved. With a mortgage pre-approval, a licensed mortgage professional can do a more complete verification prior to sending you shopping for a home, and with that done, the dollar figure you are going shopping with is actually what you can spend. The mortgage broker that you work with to get pre-approved will let you know for certain what you can afford based on lender and insurer criteria, and what your payments on a specific mortgage will be. Licensed mortgage professionals can lock-in an interest rate for you for anywhere from 60 – 120 days while you shop for your perfect home. By locking in an interest rate, you are guaranteed to get a mortgage for at least that rate or better. If interest rates drop, your locked-in rate will drop as well. However, if the interest rates go up, your locked-in interest rate will not, ensuring you get the best rate throughout the mortgage pre-approval process. In order to get pre-approved for a mortgage, a mortgage professional requires a short list of information that will allow them to determine your buying power. A mortgage professional will explain to you the benefits of shorter or longer mortgage terms, the latest programs available, which mortgage products they believe will most likely meet your needs the best, plus they will review all of the other costs involved with purchasing a home. Getting pre-approved for a mortgage is something every potential home buyer should do before going shopping for a new home. A pre-approval will give you the confidence of knowing that financing is available, and it can put you in a very positive negotiation position against other home buyers who aren't pre-approved. For a quick and easy pre-approval, contact a Kupina Mortgage agent. Kupina Mortgage | 1.888.955.9011

45 Falcon Road, Stoney Creek

We had the pleasure of visiting this breath taking home in a quiet community off Fifty Road in Stoney Creek (Winona). This home is located in a lakefront community tucked away amist million dollar homes. It is located close to amenities, parks, a marina, Fifty Point Conservation area and easy access to the QEW. This 3200 sq.ft. home includes a stunning kitchen, 4 bedrooms, 4 bathrooms, huge backyard and a lake view. For more information visit: http://comfree.com/291210 To be pre-approved for this home, please contact a Kupina Mortgage Agent Today. Jem's like this do not last!

Asking Price: $839,000

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Mortgage Brokers Offer Choice

The next time you're looking for a mortgage for that new house or you're up for renewal on your existing mortgage, think about using a mortgage broker – their services are free and they offer you an abundance of choices the banks simply can't compete with. Mortgage brokers have access to a vast array of lenders – up to 90+ institutions, including some of the big banks – which enables these professionals to negotiate the best possible mortgage products and rates on your behalf. In comparison, if you approach your bank with a mortgage request, they can only offer you a narrow choice – namely, their own products. Mortgage brokers do their homework on available mortgage products and keep themselves abreast of any new products, or changes to existing products, to ensure they find the best mortgage to fit your specific needs. Unlike the banks, mortgage brokers can also cater to self-employed borrowers as well as those who have suffered credit blemishes due to life experiences such as divorce or illness. Brokers will listen to your story, whereas the banks have a very narrow view of what fits into their financing box – and this is non-negotiable. If you're thinking of buying a home, Dominion Lending Centres mortgage professionals can find the best mortgage rate and term for your unique situation. Top Reasons for Using a Broker:

1. Choice – access to multiple financial institutions
2. Costs – using a broker is free and they can negotiate lower rates for you
3. Knowledge – brokers stay up-to-date on available products and services
4. Flexibility – mortgage products are even available for the self-employed or those who have credit blemishes

 Mark Kupina  | 1.88.955.9011

Remaining Financially Proactive

Regardless of your current job security level and your overall financial wellness, taking a proactive approach to your finances by putting mortgage payments aside while you're doing well can help set any homeowner's mind at ease for the future. It's a wise move to set money aside each pay period so you can accumulate six to 12 months' worth of mortgage payments in a short-term GIC as security for a possible job loss. Planning for the future and things such as illness or potential job loss is one of the most important undertakings homeowners can make to ensure you can pay your mortgage in uncertain times. And, best of all, if you remain healthy and your job remains secure, you can take the money out of your GIC and make a prepayment back on your mortgage on your anniversary date (or whenever your prepayment options permit you to do so), which can end up saving you thousands of dollars in interest payments and trim down the amount of time it will take to pay off your mortgage. But if it's not plausible to save money each pay period, refinancing to access the equity you've already built up in your home is another valid option for planning ahead in uncertain times. In addition to freeing up money to store future mortgage payments in a GIC, some of the money can also be used to pay off high-interest debt – such as credit cards – and get your New Year off to a fresh financial start. You will find that taking equity out of your home to pay off high-interest debt can put more money in your bank account each month. And since interest rates are at historic lows, switching to a lower rate may save you a lot of money – possibly thousands of dollars per year. There are often penalties associated with paying your mortgage loan out prior to renewal, but these could be offset by the extra money you save through a refinance. With access to more money, you will be better able to manage your debt. Refinancing your mortgage and taking some existing equity out could also enable you to do some home renovations, take a vacation or even invest in your children's education. Mark | 1.888.955.9011

Have you considered a 50/50 Mortgage

Hybrid mortgages – also known as 50/50 mortgage products – include an equal mix of fixed-rate and variable-rate components within your single mortgage. This means you get the best of both worlds – the security of fixed repayments with the flexibility of a variable rate.

Although there was a time in recent years when mortgage experts considered a variable rate mortgage as the obvious choice to save mortgage consumers money over the long term, with fixed rates remaining near historic lows, a 50/50 mortgage may be a great alternative for you.

In essence, since it's extremely difficult to accurately predict rates over the long term, a 50/50 mortgage offers interest rate diversification, which can help reduce your level of risk.

If you opt for the Dominion Lending Centres 50/50 Balanced Mortgage, half of your mortgage is locked into a five-year fixed rate and half is at a five-year variable rate. You can lock in your variable-rate portion at any time without paying a penalty.

As well, each portion of the 50/50 mortgage operates independently – like two separate mortgages – yet the product is registered as only one collateral charge.

The 50/50 mortgage product is well-suited to a variety of borrowers, including those who:

• * Would normally go fully variable but are afraid prime rate is at its bottom
• * Aren't comfortable being locked into a fully fixed rate
• * Can't decide between a fixed or variable mortgage
• * Savvy first-time homebuyers

Some features of the 50/50 mortgage include:

• * 20% annual lump-sum pre-payment privileges
• * 20% annual payment increase ability
• * Portability (the option to transfer your existing loan amount to a new property without penalty)

As always, if you have questions about the 50/50 mortgage product and whether it's right for you, or other mortgage-related questions, I'm here to help!

Katarina | 1.888.955.9011

$200 Gift | ReferMortgages.com

For any referrals sent to us you will receive a thank-you gift from our mortgage team. Be confident knowing your referral is in the hands of a service second to none.

Opportunities are all around us! Whether it is family, friends, co-workers or neighbors, people are constantly purchasing, moving, upgrading, downsizing, refinancing or investing in real estate. Visit www.ReferMortgages.com to complete our simple referral form. Don't forget to select your preferred thank-you gift from our numerous choices. If you'd like, call or email us with your referral details.

These days, mortgages are a part of everyday life. It is no secret that almost everyone will one day work towards paying off a mortgage. This transaction can be daunting and is often life's largest financial undertaking. For this reason, we ensure clients are well informed and confident that they are receiving the best in mortgage service. Our product is not mortgages but rather customer satisfaction.

Kupina Mortgage has been built on referrals and for this we thank the wonderful clients we have had the opportunity to work with. This referral program has been developed as a way to show gratitude to our clients for sharing their experience with others. With this small token of our appreciation, we give you a guarantee that any referral you send to us will receive the same great service and experience that we offered you. For those that are not clients but are interested in referring friends and family, we offer the same referral rewards to you. 

Feel free to contact us if you have any questions or concerns.

1. First Referral: $50 Gift
2. Second Referral: $100 Gift
3. Third+ Referral: $200 Gift

www.ReferMortgages.com | 1.888.955.9011