CURRENT MORTGAGE RATES
Rates Set to Rise?
All 11 of the major bond dealers in Canada expect the Bank of Canada to raise their rates at the next meeting which is taking place on September 8th. However, there are economists out there which put forth a good argument as to why they do not see rates rising next month. With softer than expected retail numbers coming out from Canada, matched with the devastating news on the US existing home sales drop (27% drop), there is evidence for the Bank of Canada to not have to worry about inflation in the near future and keep their key lending rate at 0.75% (Prime at 2.75%). The Bank of Canada bond yields have been dropping significantly again as there seems to be another push from investors to place their cash into safer investments. The 5 year Bank of Canada bond rate is now hovering close to the 2.0% level which is allowing lenders to offer mortgage rates as low as they currently are. http://www.financialpost.com/news/Bank+Canada+likely+keep+rates+hold+CIBC+chief+economist+says/3413029/story.html
On The Fence Clients
Not all clients are going to show absolute conviction in the real estate market , especially when it comes down to them actually putting an offer on paper. For those of you who have clients currently renting , we suggest you take a different approach towards selling them on renting vs. owning. Often a client will simply look at the difference between paying a lower amount for rent or a higher amount for a mortgage payment. Truth is, when they are making rent payments, the money is considered a sunk cost as they will never see any of their money ever again. With making mortgage payments , the argument can be made to your clients that at least some of their mortgage payment is going towards the principal amount owing on their home which means they are building wealth. This does not even include the potential gains they can make from the housing market increasing in value. If your client put s 5% down ($20k) on a $400K house and the house appreciates 4% in a year which is not unrealistic, the return on their original investment of $20,000.00 would be 80%. There are not too many savings accounts that will yield your clients an 80% return in a year.
Mortgage Term Simplified
The attached link could possibly be the simplest and easiest website for your clients to sift through in order to gain a better knowledge of mortgage terminology. Like any first time homebuyer, the mortgage process can be confusing and even at times overwhelming. Some of the simplest terms mortgage brokers such as ourselves use can be confusing to clients. Providing this attachment to your clients before you refer them to us will make the task of applying for a mortgage a little less daunting to them. In the sales industry the more comfortable we can make the clients feel with their decisions, the more likely it we will be able to retain their business in the future based on the positive experience they had with usoriginally. http://www.mortgage-made-easy.com/site.htm
Taken from Creative Mortgage e-newsletter www.creativemortgage.ca
