eLoan Canada

The Minister of Finance Jim Flaherty, on February 16th, announced new mortgage rules designed to ensure buyers can manage their debt of rising rates of interest, and to slow the speculation in real estate property.

Minister Flaherty commented on the mortgage issue:

“There is no clear evidence of a housing bubble, but we are taking proactive, prudent and cautious steps today to help prevent one. Our government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it.”

The new rules will come into force, on 19 April 2010; here is a brief overview changes apply to the government-backed insured mortgages:

1. Borrowers should now be available at a fixed rate of five years even if they choose a mortgage loan with a lower interest rate and the short term. Rationale for the Government for this change is that it will help borrowers to prepare for a higher rate even if it can tighten home buyers purchasing power.  It remains unclear if borrowers must benefit rate posted five years or reduced the rate of five years.
2. The maximum amount that Canadians can withdraw in their mortgage loans refinancing will be reduced to 90 per cent of the value of their homes instead of 95 per cent. Justification of the Government for this change is that it will help to ensure that accession to the property is a more efficient way to register.  The impact of this change is expected to be minimal as owners relatively little withdraw equity their houses to this extent.
3. A minimum down payment deposit of 20 per cent will be required for Government backed mortgage insurance on properties that are non-owner occupied “purchased for speculation,” which means rental realistic.   While this measure is intended to hinder the speculative purchase of properties by reducing the buyers leverage effect, it will have an impact also on those buying real estate in general investment purposes.

Don’t forget to talk to your mortgage professional for the advice on the mortgage strategy that meets your needs and how these changes might affect you.

Lending rates hit record low when Bank of Canada announced last month, on January 20th that it would cut its key policy rate by half a percentage point. Instant market reaction was detected when BOC chopped its main interest to historical lowest rate ever.

Banking sector depresses Stocks and Loonie down after Bank of Canada cuts interest rate by half a point! The Toronto stock market was down over 100 points in early trading that took composite index tumbled latter at 177.7 points to 8,663.8 while Canadian dollar was down half a cent US after the Bank of Canada cut its key interest rate to one per cent.

On the other hand Canadian senior citizens don’t seem to be happy with the interest cut down because their interest returns on their investment and saving with the bank will affect their already fixed and limited means to squeeze more.

What Does It Affect You As A Debtor On Having Various Forms Of Debt?

• Canadian Consumer Having A Mortgage Loan!

Fixed-rate pricing on downward trend! If your interest rate is fixed, pricing for fixed rate mortgages is higher than it normally would be, as lenders are accounting for higher perceived risk in the financial services industry.  The spread between a five-year Government of Canada Bond (1.58 per cent) and a competitive fixed rate mortgage rate (4.79 per cent) is now 3.21 per cent – which is much higher than what we have seen over the last few years.

Variable mortgages offer savings! If you have a variable rate mortgage, your payment level in most cases will remain the unchanged, but more of your payment will go towards the principal and less to interest. So you will be paying off your home more quickly. Moreover, whether the lower policy rate from the Bank of Canada will translate to lower interest rates for some borrowers remains to be seen, but variable-rate mortgages are still a cheaper option than they were a year ago.

• Canadian Consumer Having A Credit Card!

Credit cards will likely remain where they are, at least for the time being. Given the state of the economy, credit-card companies are concerned about potentially higher delinquency rates. Their write-offs tend to be higher in tough economic times.

• Canadian Consumer Having A Car Loan!

Car industry is going through a hard economic situation globally and so does here in Canada, although sluggish export results low production, high prices and cut jobs but government has taken timely steps to improve its efficiency in a way domestic sales on car prices will stay at moderate level. So, car loans seem to have remained fairly steady.

• Canadian Consumer Having A Lines Of Credit!

Reduction in the prime rate leads to immediate savings for those who have variable rate mortgages, lines of credit and other floating interest rate loans. If your line of credit is tied to the prime rate and you are paying interest only, your payment will decrease. If you have a set payment, more of it will be applied to the principal and less to the interest.

• Is It A Best Time For The Investors!

In trading business, your success depends on your purchase, that’s why big companies have more margins in their sales than the smaller companies because they cant get the benefits associated with the bulk purchases. Anyhow, it’s a best time especially for those who are having a right investment plan or opportunity where they can reinvest their borrowed money on such low interest rate. Although, most of the people will also planning to take advantage of more low interest rate by a half-percentage point which is expected to fall in June 10, 2009. But remember this next interest rate fall is not confirmed because it will only implemented if economy required to keep moving. But if you have a right investment today, tomorrow you may not, so don’t pass it away I guess I can see it being somewhat attractive.

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Discover Personal Loan and Mortgage Products Designed for You

Canada welcomes thousands of new immigrants every year and Government of Canada along with various financial institutions is ready to help you make the change. You are definitely feeling burden and challenging in need to be in control of your money, stay in touch with home, and feel informed and secure. eLoan Canada has gathered some important information here to help make your transition a little easier.

It’s a common myth that if you are not a Canadian citizen or landed immigrant, you do not have right and qualify for a mortgage loan. The good news is that you will find various lenders offer mortgage products specifically tailored to the needs of non-landed immigrants. While most financial institutions traditionally have insisted that new immigrants provide a down payment of at least 20% to 35%, there are now lenders who offer qualifying new immigrants or those who have been transferred to Canada by an employer, mortgages which feature a much lower down payment.

According to Citizenship and Immigration Canada (CIC), The Immigration Loans Program provides refugees and protected persons with loans to cover the costs of medical examinations conducted abroad, transportation to Canada, travel documents, housing rental, telephone service deposits and the purchase of work tools, etc., on an easy to follow credit process, for more information and general enquiry you may call on the phone number: 1 888-242-2100

Moreover, if you are planning to settle in Canada you may consult with the CIC about the credit possibilities that may fit your own situation prior to the arrival and if you are a recent immigrant to Canada, contact loan and mortgage consultant to get advice on how you may qualify for personal loan and mortgage products aimed at new immigrants.

 Borrowing Needs For Various Types of Borrowers

Personal loan have got so many questions that a human mind carry to be asked one after another to satisfy him or herself, before taking the loan and even after too, until it is not fully paid off. This borrower behavior is most likely affected when getting a mortgage because of its size and value that is far bigger than other personal loans because its most probably needed once in a life, that’s why it felt that borrower behavior will reflect from the questions stated bellow are mostly mortgage loan borrower. Anyway, please don’t consider these questions as an ultimate list but it provides as a good beginning.

1. May I obliged with some fluctuation in payments?
2. Do I need the lowest payment possible?
3. Do I want to know it will not change my monthly payment for the whole loan term or mortgage term?
4. Do I want to pay back my mortgage loan as soon as possible?
5. How much I afford to pay as a down payment for the mortgage without disturbing my budget?
6. Am I looking for the payment savings in term of an insurance exemption?
7. Are there any credit issues about which I will need to provide documentation?
8. What will happens if I were jobless, do I have to worry about payment break?

There are plenty of other questions may arise in your mind according to your personal circumstances and situations, these considerations need to be work out with your mortgage consultant and most probably he or she will discuss any other question which might not be in your present question’s list but looking at your curiosity and worries too, an intelligent mortgage consultant will definitely want to offer you expert advice, because your Mortgage consultant has access to an impressive array of mortgage choices.