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Canadian interest rates (which impact mortgage rates) have been declining for 35 years. While mortgage rates are at record lows, home buyers and those thinking of refinancing still want the best rates with the most flexible terms possible.

Changing Mortgage Rules

It used to be a lot easier to get a mortgage and buy a home in Canada or even refinance. For example, 10 years ago, Canadians could get a mortgage with a 40-year amortization period. They could also purchase a home with zero down. All that changed when the U.S. housing market collapsed in 2008.

To avoid the same fate and to protect the Canadian housing market and the real estate investments of Canadians, former minister of finance Jim Flaherty introduced a number of tighter lending rules.

For example, in 2008, the government reduced the maximum amortization period for government-insured mortgages to 35 years. The minimum down-payment for new government-backed mortgages increased to five percent and potential homeowners needed to have a minimum credit score of 620.

In 2011, as the U.S. housing market continued to suffer and the Canadian housing market picked up steam, the government tightened lending rules further. The amortization period was reduced again from 35 years to 30 years. At the same time, the maximum amount Canadians could borrow when refinancing their mortgages was lowered from 90% of the home’s value to 85%.

In 2012, further steps were taken to slow down Canada’s red-hot housing market. The amortization period was cut again, from 30 years to 25 years. The maximum amount Canadians could borrow when refinancing their mortgages was cut from 85% of their home’s value to 80%.

In 2014, the Canadian Mortgage and Housing Corporation (CMHC) discontinued mortgage products for second homes and those who are self-employed without third-party validation.

3 Hurdles Candalend.com Can Help You Clear

While all of these changes were meant to prevent Canada’s housing market from collapsing, as well as prevent Canadians from taking on too much debt, they also made it much more difficult for home buyers to actually purchase a property or refinance their properties.

Listed are three common obstacles home buyers can face when looking for a mortgage or home owners can face looking to refinance.

Low Credit Score

In Canada, the minimum credit score you need to get the best rates is 680. You also need a two-year track record of managing your debt without any serious delinquencies. A low credit score or history of missing bills is a red flag for Canada’s big banks.

There are a large number of lenders out there willing to work with those with bad credit or that have declared bankruptcy. Best of all, because the licensed agents at Canadalend.com are independent, they have access to hundreds of different lenders.

Low Income or Self-Employed

If you’re self-employed or can’t provide proof of one to two years’ worth of stable income, it could cost you. When it comes to Canada’s big banks and income, more is more.

Canada’s major lenders want to know that less than 40%–44% of your provable income goes towards debt. That can be a tall order for many Canadians, especially when you consider the average Canadian makes $49,000 annually and the average price of a home in Canada is $448,862.1

Canadalend.com has access to hundreds of different lenders—private lenders that provide mortgages to those who are self-employed, don’t have a long enough record of employment, or don’t have a big enough salary.

Flexibility

Everyone wants the best rates with the most flexible terms. Unfortunately, getting both isn’t that simple. As a result, home buyers need to consider several factors when considering a low-rate mortgage and choose the option that’s best-suited to their individual circumstances. For example, you may need flexibility, so the lowest rates may not be available to you. If you need the lowest rate, that mortgage may come with some terms you’ll need to consider. The independent agents at Canadalend.com can help you find the best mortgage with the kind of flexible rates that fit both your financial and lifestyle needs.

Canadalend.com: Helping You Get the Best Rates and Terms

Tighter lending rules have certainly made it more difficult to obtain a mortgage or refinance through Canada’s big banks. Fortunately, the lending environment in Canada has changed over the last number of years.

For starters, the experts at Canadalend.com can help you find out how well qualified you are as a borrower. Because of their expertise, they can also help you find ways to clear hurdles like having a low credit score, an uneven employment record, and the need for flexibility.

To find out what kind of mortgage you qualify for, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

Source: 
“Average house price in Canada up 9.5% to $448,862,” CBC News web site, May 15, 2015; www.cbc.ca/news/business/average-house-price-in-canada-up-9-5-to-448-862-1.3075567.

Canadian debt levels are at record highs and more and more households are finding it difficult to repay their various debts. Debt consolidation is a great way to repay all your debts at a lower interest rate. Even if you have bad credit, debt consolidation loans are one of the easiest ways to reduce your debt and repair your credit.

Canadian Debt Levels Rise

According to the most recent data, more and more Canadians are getting into debt. Statistics Canada reports that between 1999 and 2012, the median debt held by indebted Canadian families increased by $23,000 to $60,100.

The number of Canadian households with debt (mortgages, car loans, lines of credit, personal loans, and student debt) also increased during the same timeframe from 67% in 1999 to 71%. The “median” is the middle figure that separates the top half of families with the most debt from the lower half.

At the same time, the value of assets held by Canadian families grew at an even greater rate: 80%, or $179,800, to $405,200. The value of assets encompasses financial assets like investments (stocks and bonds), pensions, and non-financial assets like real estate.

Unfortunately, the increase in property value doesn’t really benefit many Canadians, nor does it offset their personal debt. That’s because the increase in the value of real estate is only tangible if you sell your property.

Consolidating Debt

What this most recent data shows is that the majority of Canadians run into money problems at some point. The biggest challenge is knowing how to deal with out-of-control debt. One of the best ways to get a handle on debt is to consolidate it into one convenient payment. That’s because different forms of debt often come with different interest penalties.

For example, a major credit card might have a monthly interest fee as high as 19%. Charges for specialty store credit cards can be as high as 29%. A student loan, on the other hand, will have a much lower interest rate. And in today’s low interest rate environment, fixed mortgages can be found for 2.75%.

Ultimately, by consolidating your debt, you increase your leverage by lowering your interest rate, allowing you to pay off your debt more quickly. Those thinking of consolidating their debt can use assets like their home to secure a lower interest rate. Choosing to consolidate your debt as opposed to declaring bankruptcy will protect your credit rating. Not only that, banks will see you as being a less risky investment.

What If You Have Bad Credit?

Unfortunately, it is more difficult to get a consolidation loan if you have bad credit—but it isn’t impossible. Lenders want to know how risky it is to lend you money. To determine this, they look at your credit scores and bill payment history. A low credit score or history of skipping bills is a red flag for lenders.

Fortunately, the lending landscape has improved over the last number of years. Those with bad credit looking to consolidate their debt are no longer stuck using Canada’s big banks or financial institutions. Today, there are many different lenders willing to work with and finance those with bad credit.

There are a number of steps you can take to consolidate your debts and get your credit back on track. Remember, your credit history does not stay the same. It changes in step with your financial situation.

Canadalend.com, the Leaders in Debt Consolidation

When it comes to having bad credit and consolidating debt, it’s known to get complex. That’s why it’s important to be fully aware of all the different options. It’s also why you need to talk to an independent, licensed agent at Canadalend.com . They can show you how to rebuild your credit and help you find the best consolidation loans.

Where Canada’s big banks only promote their own financial products, Canadalend.com agents are independent and have your best interests in mind. We have access to hundreds of lenders, many of which provide loans to those who have bad credit or have filed for bankruptcy.

To find out how you can rebuild your credit score and consolidate your debt, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

Source: 
“Study: Changes in debt and assets of Canadian families, 1999 to 2012,” Statistics Canada web site, April 29, 2015; www.statcan.gc.ca/daily-quotidien/150429/dq150429b-eng.htm.

Most of us live in homes that are a work in progress with a mile-long list of remodelling projects. Unfortunately, the money isn’t always there when you need it most. With Canadian housing prices on the rise and mortgage rates at historic lows, now is the perfect time for homeowners to take out either a home equity line of credit (HELOC) or a home equity loan.

Using a HELOC to Unlock Equity in Your Home

If you’ve lived in your home for any period of time, you have built up equity. By refinancing with a HELOC or home equity loan , you can access up to 80% of your home’s value (less the mortgage). Many homeowners access that home equity to free up cash for everything from home renovations to vacations to their children’s tuition fees.

While both HELOCs and home equity loans sound similar and use your property as collateral, they operate on entirely different premises. A home equity loan provides you with a fixed amount of money, payable over a fixed period of time, usually with a fixed interest rate. Once you receive the money, you cannot get more from the loan. Essentially, a home equity loan operates like your primary mortgage does. With a HELOC, you can borrow funds up to the credit limit during a specific timeframe, called the draw period. You withdraw money as needed and only pay interest on the amount you use. On top of that, the money is available for use.

For the most part, the interest charged on a HELOC is calculated at a variable rate plus prime. The variable rate can vary drastically depending on which lending institution you use; some also offer a fixed-rate option.

Refinance and Remodel with a HELOC

While many people remodel their homes to meet the growing needs of the whole family, others like to do so simply to increase the value of their property. Your home may be sorely outdated, but if you don’t have an emergency fund, the lime green bathroom tiles and matching sink will just have to wait.

Or maybe they don’t. A HELOC or home equity loan could be the answer if you want to make home improvements to your property in Toronto but can’t accommodate the upfront costs. And it’s a great way to tap into your home’s equity.

Tackle Home Remodelling Projects

The most expensive room in the house to remodel is the kitchen; it’s also a home’s top selling feature. With a HELOC, you don’t need to hold off remodelling your outdated kitchen or bathroom, as it gives you the freedom to make needed renovations when you want.

Get Your Home Repairs Done Right

It’s very simple: you get what you pay for. Doing a home renovation on your own or hiring the cheapest contractor could end up costing you more in the long run. Refinancing with a HELOC is the best way to ensure your home renovation job is done properly.

Maximize Your Home’s Potential

Your home is a major investment and home improvements can significantly increase its value. In today’s red-hot real estate market, home improvements could help you maximize your investment if you decide to sell.

Renovation Via Canadalend.com

If you’re thinking of doing a home renovation to increase the usability and value of your property,Canadalend.com can help. The independent, licensed refinancing experts at Canadalend.com can help you determine what your best options are. We evaluate your current financial situation and help you find the lender best suited to your financial and lifestyle needs.

For more information on a HELOC or home equity loan, contact Canadalend.com to set up a free consultation, or apply online and one of our private mortgage specialists will assist you in setting up an appointment at your earliest convenience.

A new study shows that the majority of Canadians prefer fixed mortgages. While many first-time home buyers like the idea of fixed monthly mortgage payments, it’s important to remember that there’s more to finding the right mortgage than just the interest rate. And when it comes to getting the best mortgage, it pays to shop around.

More Canadians Choosing Fixed Mortgages

With the spring home-buying season heating up, more would-be property owners are looking to get pre-approved and find their dream homes. But when it comes to signing on the dotted line, most Canadians are choosing to lock in their monthly mortgage payments.

In fact, 57% of Canadians are selecting fixed mortgages , up sharply from 48% in 2014, and just 39% in 2011. By contrast, over the last number of years, a smaller percentage of Canadians would pick a variable-rate mortgage. Just 30% would select a variable-rate mortgage today.

On top of that, 11% of respondents were undecided between a fixed and variable-rate mortgage. That’s down from 19% in 2014 and a whopping 25% in 2011.

Canadians are favouring fixed-rate mortgages because they don’t think interest rates will fall further. Almost half (44%) of Canadians expect mortgage rates to increase next year, down from 47% in 2014 and 61% in 2011.

Still, 42% of Canadians believe interest rates will stay the same in the next 12 months, while nine percent think rates will fall even further. The fact of the matter is that there is a case to be made for even lower rates.

Will Interest Rates Fall Even Further?

The Canadian economy is highly dependent on oil and gas. In fact, crude oil accounts for roughly 14% of Canadian exports. Plunging oil prices, which have dropped from just over $106.00 per barrel last summer to around $47.00 today, are having a detrimental impact on the Canadian economy.

As a result, the Bank of Canada unexpectedly lowered its key lending rate (which affects variable mortgage rates) in January from 1.0% to 0.75%. Thanks to a weak global economy, oil prices are expected to remain lower for the near future.

The Bank of Canada has hinted that it will keep rates near record lows for a considerable period of time—and it has not ruled out further cuts.

Shopping Around for a Mortgage Can Save You Money

Fixed mortgages are an attractive option for those who want to know what their mortgage payments will be for the next five years.

But there is no one-size-fits-all approach to mortgages. The lowest rate does not necessarily mean the best mortgage. It’s important for first-time home buyers, or those thinking of refinancing or renewing their mortgages, to look beyond interest rates.

While rates are important when it comes to deciding whether or not you want to get a fixed or variable-rate mortgage, it’s also important to look at whether or not you can handle other incidentals, such as household expenses and unexpected costs.

There are a lot of factors to consider. And when it comes to finding the right financial product, it’s best to go with the licensed, independent agents at Canadalend.com . Just because some of Canada’s biggest banks are advertising a low rate doesn’t mean it’s the lowest rate on the market. Nor does it mean it comes with the most flexible options.

Many first-time home buyers do not realize they can negotiate when it comes to getting a mortgage. Using a mortgage broker like Canadalend.com is the optimal way to get the best rates and options.

Because the agents at Canadalend.com are independent, we have access to mortgages from hundreds of different lenders. We can also get you pre-approved for a mortgage. Pre-approval lasts for 120 days and is locked in from the day you start the process.

If you’re trying to decide which kind of mortgage is best for you, contact Canadalend.com today to set up a free consultation. Or apply online and one of our private mortgage specialists will help you set up an appointment at your earliest convenience.

Source:

“Canadians increasingly opting for peace of mind when it comes to their mortgage: CIBC,” CNW web site, March 30, 2015; http://www.newswire.ca/en/story/1509695/canadians-increasingly-opting-for-peace-of-mind-when-it-comes-to-their-mortgage-cibc.