US MBS Selloff – The Canadian Impact + MORE Apr 15th

In 2008, when the housing crisis in the U.S. was threatening to bring down the global economy, one of the moves the U.S. government made to temper the damage was to buy up an unprecedented $1.25-trillion worth of mortgage-backed securities (MBS). The taxpayers footed the bill for the purchase, which helped bail the nation’s banks out of trouble; back then, MBS were mostly owned by banks and financial institutions and in large part were made up of shaky home mortgages that were in arrears.
Without the government stepping in, the banks that held those MBS would have failed and created a chain effect that could have brought down the U.S. banking system.
Related Read: Why Homeowners Should Care About Higher Fees for MBS in Canada>
A Step Toward Recovery
Fast forward eight years and the U.S. economy is on much stronger ground. Home prices have started to climb and many Americans are back at work. The U.S. jobless rate is currently 5 per cent, and the Federal Reserve has scaled back the quantitative easing and monetary policy measures used during crisis recovery…

Are you feeling the pressure from today’s too-hot-to-handle real estate prices? You’re not alone – a recent report from Royal LePage finds prices have steadily risen in nearly every market in Canada. But a silver lining for those worried they’ll be priced out – the Bank of Canada has opted to keep the cost of borrowing, and mortgage rates, low for the time being. Meanwhile, Ontario buyers have extra peace of mind on their home inspections. Read on for the latest.
The Bank of Canada Leaves April Rate Unchanged
The Bank of Canada has left the cost of borrowing unchanged in its April announcement, as low oil prices counter tepid economic improvements. How will this impact the economy – and YOUR mortgage rate? Read on to learn more.
Read Penelope’s Blog | The Bank of Canada Leaves April Rates Unchanged
Canadian Home Prices Rise 7.9%
The latest Royal LePage House Price Survey finds average Canadian home prices are up 7.9%, with Toronto and Vancouver markets leading most of the growth…

It’s rare that I talk about something that isn’t directly related to mortgages, real estate or finances.  Today is one of those days.  I want to share this pretty cool podcast channel I stumbled upon.  Maybe you’ll find it as useful as I did. Cut the Crap. Yup, that’s the name of this podcast channel. […]

Walking into the bank to apply for your first mortgage or consumer loan can be downright unnerving, especially for the borrowing uninitiated. It doesn’t help that financial literacy isn’t a mandatory subject in high schools in Canada – this, coupled with the hoops new borrowers face to qualify, can leave many Canadians feeling they’re unprepared. Making a mistake when borrowing money – especially on what could be the largest financial transaction of your lifetime – could set you back for years.
It’s this knowledge gap that Planning to Borrow: A Practical Guide to Consumer Lending Practices in Canada strives to fill. Author Steve Bang aims to help the average Canadian understand consumer lending practices by providing the unique perspective of a lending officer. Whether you’re a fresh faced student, a mortgage shopper, or even a financial advisor, this is sure to be a valuable resource.
Taking the Everyday Approach
The book follows rookie banker Craig, who works at the fictional “Everyday Bank”…

Q: We are moving and plan on buying before we sell. We know this is risky, but we are pretty confident our current house will sell relatively quickly. Is there a way to buy a home with, say 5% down, and then increase that down payment as soon as our current home sells? We’d like to keep the monthly mortgage payments on our new home as low as possible.
— Confused about transaction timing, Toronto, Ont. 

Answer No. 1 from Monika Furtado, Calgary residential realtor:
There are a number of factors to consider when moving between properties. The first consideration is cost. Can you afford to hold two properties should your current home sit on the market and not sell for a few months? If you can afford this option you are best to move forward with a 20% down payment to avoid unnecessary CMHC fees—fees that would be added to the purchase price of your second home if you put down less than 20%. However, by opting for an open mortgage or a home equity line of credit on the new home you could then put more money against the purchase of that home once your present house sells…