Bank of Canada key interest rate unchanged

The Bank of Canada left its key interest rate unchanged at one per cent Tuesday and warned of a slowing economy, knocking the Canadian dollar and stock markets lower.

The central bank said it now expects the economy to take a year longer to return to full capacity than it had earlier predicted.

The decision to hold the overnight rate steady followed three consecutive quarter-percentage-point increases in the key rate, which influences the commercial banks' prime lending rate and other short-term interest rates. Observers said it appears the bank may now stand pat for some time.

Read more: Link

Low mortgage rates: Time to refinance?

With the interest rates we've been experiencing for the past year or so, it may seem like there is no end in sight to historically low rates. Refinancing can be a great way to save money. It can also be a great way to get yourself into financial trouble.

Your breakeven period is one of the most important considerations in a refinance. To determine your breakeven period, you need to look at the monthly savings you'll create by refinancing and the total cost to refinance your loan. Let's say that by refinancing, you'll save $200 a month, and that the cost to refinance is $4,800. To determine your breakeven period, divide your refinance cost by your monthly savings. In this example, the breakeven period would be 24 months, or two years.

Read more: Link 

Should you be your own mortgage lender?

Wouldn't you like to take your monthly mortgage payment and give it to yourself instead of the bank? Sounds too good to be true? It depends...

Instead of paying principal and interest to a bank, you could pay that principal and interest to your RRSP. In effect, your RRSP becomes “the bank.” That means there must be enough money already in your RRSP that can be lent to you in the form of a mortgage (secured by your house), and you would have to make the repayments to your RRSP over time.

The interest rate you charge yourself must be in line with prevailing market rates. Striving for the highest interest rate possible to generate a better return for your RRSP means you are paying a high rate of interest on your mortgage. Does that make sense?

Figuring out your rate of return on this strategy is not so simple as assuming it is the rate of interest you decide to charge yourself. We've all seen the calculators that show us how, over the life of a mortgage, we can end up shelling out almost as much interest as the original principal, if not more in some cases.

Holding your mortgage inside your RRSP is not for everyone. Being your own bank sounds appealing, but don't forget to perform a bank-like application on yourself - not everyone could be their own best client. Make sure to talk to a qualified adviser about all the advantages and disadvantages.

Read more: Link

www.albertamortgagepros.ca

Mortgage Brokers in Alberta

A mortgage broker is someone who acts as an intermediary and negotiates mortgage loans on behalf of home buyers and businesses seeking to build or purchase commercial real estate. In developed real estate markets like Canada’s, a large percentage of mortgage products are sold by mortgage brokers.

The scope of a mortgage broker’s activity depends on the jurisdiction in which it does business. In Canada, mortgage brokers are regulated under provincial law, but throughout Canada, high ratio loans are insured by Canada Mortgage and Housing Corporation, Genworth Financial or AIG United Guaranty.

One reason lenders work with mortgage brokers is to increase the number of loans they sell. Banks and other institutions increase sales volume by contracting out part of their business to brokers.

Read more: Link

www.albertamortgagepros.ca

The Competition Bureau and Realtors reach a deal that could mean more options and lower costs

In a development that could drastically change the way Canadians buy and sell their homes, the real estate industry has reached a landmark agreement with federal competition authorities.

The legally binding deal will allow for home sellers to pay for only those services they want from their real estate agents. Previously, under the rules established by the Canadian Real Estate Association (CREA), consumers had to opt for an entire slate of services, a practice the Competition Bureau deemed anticompetitive.

Read more: Link 

www.albertamortgagepros.ca