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Mortgage Broker News | 12 Jan 2010, 12:00 AM Agree 0
A Bank of Canada official called talks of a Canadian housing bubble premature in a speech in Edmonton Monday, adding higher interest rates are not the solution to cooling the current surge in housing demand and prices.
  • Lachman Balani | 25 Jan 2010, 04:59 AM Agree 0
    Variable mortgage interest rates are so low that a mortgage payment now puts more towards the principal than the interest, so it is a good time to buy homes. However it is the moral duty of the mortgage agent to ensure the borrower does not take on so much debt that in case the rates go back up, the borrower is unable to make the mortgage payments.Same goes for the real estate agent. The borrower should also do his due diligence and so should the underwriters of the lending institutions.
    Runaway interest rates like in the 80s seem unlikely to come back soon but maybe just maybe the prime rate might go back to the 6% mark as it was in 2008, though the 4-4.5% range of 2004 seems more likely by 2011.
    But... qui sait?
  • erica | 27 Jan 2010, 01:05 PM Agree 0
    sounds like a bunch of bs to me
  • Sergio Bogani | 30 Jan 2010, 04:35 AM Agree 0
    Ever wonder when someone asks if there were signs of this collapse we face now? Did anyone see it coming. DUHHHH! I agree that as Mortgage Agents we have an obligation to ensure our clients take on mortgages they can afford. So do the ratio calculation. If they are buying a new home with 5% down calculate what their ratios would be in 5 years if the rate was at 6.5% (actual normal rate in the early millenium). Ask them what their salary base was for the past 5 years. If they are already at 40% TDS and they expect their salary to increase enough that the TDS in 5 years will be either lower or the same at 6.5% then by all means these clients should get their home. However if they have had steady salary for the past 5 years and their total increase in salary amounts to 3% to 5% total and their TDS with 6.5% in 5 years is at 55% based on those numbers then guess what? Maybe they can't afford that home.
  • Ken Lambert | 31 Jan 2010, 11:02 AM Agree 0
    Good day- Writing from down in New England; been in the US mortgage and real estate biz for quite a while. Here, natinally- prices have dipped 32% since our high in 2006. It is ugly. Forecasters here say it will be another 12 years before we are at our 2006 levels again.
    Naturally, Canada is not the same and the market dynamics are a bit different. As are the mortgage products themselves.
    But, I think your govt. trying to put a lid on further price escalation in the near term is a good call. Increasing the min. down payment would certainly help a bit.
    Here, we've always been "taught" that home prices normally increase about 4%- 5% per year, on average. We went thru a 3 year period where they went up 15% or more per year- and now we are all paying for it.
    I hope you can avoid what has happened here, and also in the UK shortly after us.
    Be well...

    www.homequitybuilder.com
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