As of April 19, 2010 certain mortgage products are required to qualify at the Bank of Canada’s Qualifying Rate. This video explains how the Qualifying Rate works and what mortgage products are affected by it.

Are you preparing to purchase a home?  Many people make 3 common mistakes right before applying for a mortgage.  In this video, we define these mistakes and give you tips on how to avoid them.  By avoiding these mistakes, you will make your home buying process smoother and your mortgage application stronger!

Don’t have cash for a down payment?  Don’t worry…if you have RRSP’s and you are wanting to purchase your first home…the Canadian Government has a program designed especially for you!  Watch the video below to learn how to use your RRSP’s to help purchase your first home.

This episode of the Mortgage Minute begins to decode the language used when applying for your mortgage.  Knowing “mortgage” language gives you a leg up when trying to understand your mortgage and how to personalize your mortgage to your situation.  This video explains the difference between amortization and term as it applies to your mortgage!

The largest recovery was experienced by White Rock/South Surrey (6.5% increase in sales over May of 2009); however, this segment also experienced the smallest decline (5.2%) over the previous year.  The only two market segments that are still experiencing sale declines are Surrey (-0.3% from May 2009 to June 2009) and Mission (-2.6% from May 2009 to June 2009).

This increase in sales is a promising light at the end of a year long downward tunnel that Real Estate Sales have experienced in Greater Vancouver and the Fraser Valley.  Much of the increase in sales can be attributed to low interest rates, a slight rebound in the stock market, and a lack of product on the market.

Activity in the month of June marked the fifth consecutive month of rising sales and the highest level of activity since January 2008, on a seasonally adjusted basis.

“Housing markets around BC continued to post higher sales in June, fuelled by attractive mortgage rates and lower prices,” said Bryan Yu, BCREA Economist.

“The larger urban regions of Greater Vancouver and Victoria exhibited balanced market conditions in June, while others have recorded improved market stability. Stronger demand and a decline in home listings are stabilizing home prices in many BC markets.”

Year-to-date, MLS® residential sales dollar volume was down 20 per cent to $16.3 billion over the same period last year. A total of 36,329 units were sold in the first six months of 2009, down 15 per cent from 2008, while the average MLS® price declined 5 per cent to $448,381.

• Renovate if…you love the neighborhood, your house can be renovated to meet your needs, you can’t afford to buy the house you want or need,
• Move if… the neighborhood no longer satisfies your needs, your home cannot be renovated to suit your needs, you are not willing to live through a renovation or you do not have access to people who can renovate it

Most decisions in life have in some form or another financial ties.  In this situation the question becomes, how do I finance my decision?  If you choose to renovate, there are many home construction and renovation loans that are available to help you do this.  Another option is a home line of credit that affords you the flexibility of a line of credit that can be paid off very quickly or in an extended length of time.

If you choose to buy, you would most likely be needing a new mortgage for your new home, if you cannot port your existing mortgage to your new home.  In this instance you will be presented with many options that may suit your needs ranging from fixed rate products to variable rate products with a range of terms and amortization periods.

The bottom line is: look at your finances to see what you can afford, perhaps consult your mortgage advisor to help you figure out what your options look like on paper.  The next step, depending on your financial situation, is to evaluate your answers to the questions above to determine whether you would like to renovate or move.  Once you have completed these two steps, you are on your way to upgrading your home, either by renovating or moving!

Applying for a mortgage is the easy part: filling out paperwork, gathering financial documents, and signing mortgage commitments; however in these three easy steps, many people make mistakes.  Most of these mistakes are easily avoidable with some preparation and informed advice.  Below are the Top 5 Mortgage Mistakes people make when trying to secure financing for their home.

1. Failing to choose the correct loan product for their situation
2. Automatically renewing their current mortgage with existing lender
3. Signing documents without reading them
4. Taking it to the limit – running up credit
5. Not planning for your mortgage application

Failing to Choose the Best Loan Product for Your Situation

There are many different types of loans out there.  There are fixed-rate products, variable (ARM) rate products, line of credit products, 15 Year term, 35 Year terms, and more.  However, for every person looking for a mortgage, each has their own unique situation.  While one person would benefit from a variable rate product, their neighbor may be better suited to a fixed-rate product.  The moral of the story is to explain your current situation and future goals in detail to your mortgage advisor and ensure that he/she selects a product that best meets those needs.

Automatically Using Your Existing Lender, Without Consulting other Lenders

Although you may feel an allegiance with your current lender (financial institution which holds your loan, not your mortgage advisor), they may not be able to offer you the best products.  When refinancing or renewing, you must consult other institutions to make sure that what you are being offered is in fact the best rates and terms available.  Many times your bank will offer you posted rates in hopes of you signing the commitment without shopping around.  Make sure you do your due diligence when refinancing and renewing.  This is your home, your mortgage, and your money!

Signing Documents without Reading Them

Never sign documents without reading them.  If you are unsure about your understanding, ask for clarification from someone you trust, your mortgage advisor, lawyer, friends, family members.  Remember that you are the one entering into the agreement, you need to understand and agree with what you are committing to.

Taking your Credit to the Limit

Make sure that your credit balances are in your favor when in comes to your mortgage application.  Lenders are looking for an appropriate debt-to-income ratio.  In short: you need to have more income than you have debt.  Avoid running up a balance on your credit cards, pay-down existing debts as much as possible.

Not Planning for your Mortgage Application

If you know that you will be needing a mortgage, or refinancing your current mortgage you need to make sure you plan for it.  Make sure your credit is in order, if its not, start preparing it.  Do not make any purchases on your credit cards that you cannot pay off, if you carry a balance on your credit cards, start paying them down.  Refrain from making any large purchases before securing your mortgage.  If you are planning on buying a car, wait until after you have secured financing, as your debt-to-income ratio will rise and you don’t want this while trying to secure a mortgage.

Understanding how the mortgage process works and how lenders qualify your loan will help you avoid the above mistakes.  If at all possible, avoid all 5 of these mistakes, it will make your mortgage application process much less stressful.  Remember that the best way to be a successful homeowner is to learn how to manage your mortgage by making informed, responsible decisions!

BC Real Estate Association chief economist, Cameron Muir says, “The imbalance between supply and demand was putting significant downward pressure on home prices, on the demand side, we’ve now seen three consecutive months (seasonally adjusted) of double-digit increases in home sales. And on the supply side, the number of homes for sale in Vancouver has declined for six consecutive months.”

The forecasted decrease in pricing is also being revisited.  Originally BCREA forecasted a 13% decline in housing prices; they have now revised this number to between 5% and 8%, depending on the location.

This stabilization in pricing is beneficial for both buyers and sellers.  Buyers are still able to purchase houses and fairer values than they were even  2 years ago; while sellers are able to sell their home more quickly.