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Note: if this page does not display correctly, click on First Rate - September 2005 edition(this page is optimized for MS Outlook, Yahoo mail and Hotmail)
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September 2005
Dear <First Name:78>,
As a homeowner (or prospective homeowner), investor or real estate professional, you rely on your mortgage professional to keep you informed about interest rate movements and trends. This newsletter is designed to do just that.
In this issue:
- Market commentary and Interest rate trends
- Umbrella mortgages
- Improving your credit score
- In the news
Please check out my NEW affiliate website: BCHomeBuyer.ca .
Market commentary & Interest rate trends
As expected the Bank of Canada (BOC) moved up the key interest rate. The major banks will be increasing their prime rate to 4.5%. I expect that the fixed rates will also be moving up. As of today, you can still get a 5 year fixed rate at 4.5%.
The gap between the variable rate mortgage and the fixed rate mortgage has narrowed. Variable rates can be obtained at 3.7% (Prime less 0.80%) versus a 5 year rate of 4.5%. A fixed rate mortgage is now a lot more attractive than it was a few days ago.
Rates and Charts
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Prime @ 4.25%
Term
Jul 15
Jul 22
Jul 29
Aug 5
Aug 12
Aug 19
Aug 26
3 year
4.25%
4.25%
4.25%
4.25%
4.25%
4.25%
4.25%
5 year
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
10 year
5.00%
5.05%
5.05%
5.02%
5.10%
5.10%
5.04%
Table shows the discounted residential mortgage rates for 3, 5 and 10 yr closed fixed rate mortgages
For a longer term view, click here to see the 3, 5 & 10 year best residential rate since September 2003 (updated monthly)
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Click to view other relevant graphs
Umbrella Mortgages
Umbrella mortgages allow home owners to access the equity in their home for all borrowing requirements. Lenders that offer this product will generally allow the home owner to borrow up to 75% (sometimes up to 90% with GE Mortgage insurance) of the value of the home. If you have multiple borrowing needs, you'll save money by using an umbrella mortgage.
Say for example, your home is worth $400,000. You also have a mortgage of $100,000, a auto loan for $20,000, personal loan of $30,000 and a boat loan of $40,000. All these loans can be rolled into one umbrella mortgage of $300,000 (75% of $400,000). The benefit is lower interest rates and lower payments. Please call for details.
Improving your credit score
For most lenders, the credit score on your credit bureau is the single most important determinant of your ability to access credit. It can also affect the rate of interest you are charged when you borrow. It is well worth your time to ensure that you maintain a good credit score.
It is easy to check your credit score. There are two major credit bureaus in Canada - Equifax (www.equifax.ca) and Transunion (www.tuc.ca) . In Western Canada, Equifax is the more commonly used one. You should be able to access your credit score online for a small fee.
If your credit is not good and you plan to obtain a mortgage in the next few months, it is very important that you get a copy of your credit bureau. I can coach you on how you can improve your credit score so that you can obtain the best rates possible.
In the News (excerpts from recent press releases)
1) Homeowners capitalize on the wealth as house prices soar (Van Sun, Aug 9, 2005) - As prices of Vancouver real estate continue to rise at dizzying rates, people are capitalizing on their new-found wealth by taking out new mortgages.. Click here to read more.
2) CIBC World Market's Monthly Indicators (CIBC World Markets, Aug 4, 2005) - CIBC's monthly economic newsletter. CIBC has changed its prediction on interest rates. In the past, the bank was predicting the prime rate to stay at 4.25% for the next 2 years. Now, CIBC is saying that the Bank of Canada is committed to increasing rates by 1/2 percent by Dec 2005. Click here to read more.
1980s, according to a Bank of Montreal report released Thursday. Click here to read more.
4) Real estate sales surged in July (Canada.com, Aug 22, 2005) - South Okanagan region showed greatest growth in sales volume. BC's real estate market sizzled through July with sales worth more than $3.29 Billion, more than 38% higher than the same month last year. Click here to read more
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Please consider the information provided in this newsletter as general information. Before you do anything consult a professional.
To unsubscribe, please click reply with the subject "unsubscribe" and you will be removed from this email list.