For over a decade I have dedicated my focus on creating exceptional client experiences, building long term relationships, while offering the best mortgage products across Canada. I provide custom tailored financing solutions that suite every situation and need for the best value. My “out of the box” philosophy ensures that every unique situation is met with unparalleled industry expertise and an unwavering commitment to service. Your Mortgage Broker for Stratford, Perth County and Canada-Wide.

Thursday, November 17, 2016

Trump effect blamed as mortgage rates rise and bonds tumble: Don Pittis

Can falling house prices be far behind if mortgages go the same way as bond interest rates?

New Mortgage Rules will affect first-time buyers

OTTAWA – Canada’s first-time home buyers may have to shelve their dream house fantasies due to lending changes announced this week by the federal government, mortgage brokers say.
Ottawa moved this week to tighten mortgage lending rules that will limit the amount many Canadians can borrow to help ensure that when interest rates rise, they’ll still be able to make their payments.
Mortgage broker Frank Napolitano says that means the size of mortgage many buyers will be able to qualify for will be less once the rules take effect on Oct. 17.
“First-time homebuyers will probably have to probably scale down the type of home that they may have planned to buy,” said Napolitano, managing partner at Mortgage Brokers Ottawa.

Under the new rules, a stress test that had only applied to borrowers who opted for variable rate mortgages or fixed rate mortgages with terms less than five years will now be used for all home buyers with less than a 20 per cent down payment.

That means borrowers must be able to qualify for their mortgage using a higher interest rate than they will actually be paying on their mortgage.
The advertised special offer rates for a five-year fixed rate mortgage at Canada’s big banks are around 2.5 per cent. However, the Bank of Canada-posted rate used in the stress test is 4.64 per cent based on the posted rate at the big banks.
“You’re not paying more, but you’re going to be able to buy less house,” Napolitano said.
The idea is that potential home buyers must be able to show that if interest rates were much higher than they are today, they’d still be able to make their mortgage payments and other costs related to home ownership.
Napolitano used an example of a Canadian earning $70,000 a year with enough saved for a five per cent down payment, and carrying $500 a month in non-mortgage monthly debt payments such as a car loan.
Based on a five-year fixed-rate mortgage of 2.44 per cent, he estimated they could qualify for a loan that would allow them to buy a house worth about $370,000 under the old rules.
However, under the new stress test using 4.64 per cent, Napolitano estimated that same home buyer could only afford to buy a home worth about $280,000.
Jason Scott, a broker with the Mortgage Group in Edmonton, says many of his clients would not have qualified for their mortgages under the more stringent rules.
He noted that it isn’t uncommon for nervous lenders to turn down borrowers who just barely qualify or require a co-signer or a larger down payment.

“People who have less than 20 per cent down are going to qualify for a whole lot less money,” Scott said.
Napolitano said for some buyers, the changes may mean that they will have to settle for a less expensive property, save for a larger down payment or wait until they are earning more in the future.
“I think it’s going to take some people out of the market,” he said.
“There’s no question that some young Canadians that had aspired to buy a home, may have been ready to buy the home this year, but now I think they may have to wait.”New Mortgage Rules will affect first-time home buyers

First-time home buyers to get $4,000 land transfer rebate

Finance minister Charles Sousa is giving first-time home buyers a $4,000 land transfer tax rebate. more....

Why Trudeau's Tighter Rules Are Likley Canada's Last

In 2006, in the middle of one the hottest years on record for Canadian housing, then Bank of Canada Governor David Dodge sent a testy letter to his counterpart at the ..

Thursday, October 01, 2015


When the only ring is on your keys: What common-law couples should know before buying a house together

Tuesday, February 25, 2014


The fees associated with purchasing your first home can really add up. To help Canadians with these costs, our conservative government introduced the First-Time Home Buyers Tax Credit. This credit allows Canadians to save up to $750 on qualifying homes purchased after January 27,2009.

Thursday, March 14, 2013

Apply for a no obligation quote today while interest rates remain low


Thinking about purchasing a home? I can walk you through the process step by step, explain all of your options and all of the costs involved in making a home purchase. If you are first time home buyer you should know what you qualify for be...fore you start shopping. And with interest rates so low, I can even lock in your interest rate for 120 days. 2.89% for a 5 year fixed... WOW... what are you waiting for. Apply for a no obligation quote today.

Saturday, March 02, 2013

Win an Apple iPad Mini 16 GB Wi-Fi

$329 VALUE - See product details.

To enter the contest I need you to do three things for me...
1. LIKE my Facebook Page

2. Simply click on my google plus link below and click on "Write a Review" and write a review/testimonial on your experience with me.


3. Click on the link below or Email me at with your name, email phone number confirming you did both steps above so I can enter you into the contest.

http://www.mortgagesourcecanada.com/win-apple-ipad-mini.htm

Wednesday, February 13, 2013

Is a Costco membership worth it?

Is a Costco membership worth it?

Tax-Free Savings Account (TFSA)

Tax-Free Savings Account (TFSA)

The Smith Manoeuvre Debate

About one year back, I did a review of The Smith Manoeuvre (SM) book and noted that the book should have talked about the pitfalls involved with the strategy. Many financial planners have left comments disagreeing with my review (though I reviewed the book, not the strategy) and I challenged one planner to show me how a client implementing the SM will come out ahead in the worst-case scenario (this particular planner uses segregated funds, so he tells me the worst case scenario is 0% returns).

The planner’s client (let’s call him Joe) owns a house appraised at $350K and has a $260K mortgage on it. His monthly mortgage payment is $1,520. To implement the SM, the planner takes out a secured investment loan of $55K and invests the proceeds (less expenses) in segregated funds. To service the investment loan, Joe pays an interest of $275 per month.

To make an apples-to-apples comparison, I am going to assume that Joe can make an extra payment of $275 towards his mortgage principal. If Joe can find an extra $275 savings for the SM, he can find a similar amount for a mortgage pre-payment.

After five years, let’s assume that Joe’s home is still worth $350K (the home’s value doesn’t affect the outcome). If he had opted for an accelerated mortgage pay down, he would have a mortgage balance of $211K and he has a net worth of $139K. If Joe had implemented the SM instead, after five years, he would own the $350K home, an investment portfolio of $99K and a loan of $321K, leaving him with a net worth of $128K.

What about after 10 years? With mortgage pre-payments, Joe’s net worth would be (Home:$350K – Mortgage:$149K) $201K. The SM would leave him with (Home:$350K + Investments: $160K – Loan:$321K) $189K. Even after 15 years, Joe would be better off with a mortgage pre-payment (net worth of $280K) than the SM (net worth of $270K).

Now, surely over 20 years Joe would have come out ahead, right? Not really. With pre-payment Joe now owns his home free and clear. The SM also results in a mortgage-free home, but Joe now has a portfolio of $346K and an investment loan of $321K and a net worth of $375K. But, the key difference is that Joe hasn’t made a mortgage payment for 17 months, which if he had saved would have added an extra $31K to his net worth.

The point of this exercise is not to show that the SM doesn’t work but that it entails taking a small risk, not any risk at all as many planners claim. You should also note that this particular SM example involves a higher leverage and would become risky if a severe real estate downturn should occur. Also, while segregated funds may give you peace of mind, it also comes with a higher price tag. If you are earning 8% in the markets and giving up 3% in expenses, you would probably just break even with the SM. I’ll close with a comment made by David Trahair, author of Smoke and Mirrors, in a recent Toronto Star column: “It’s a high-risk strategy because you’re betting the farm that some investment adviser can do better than you can. You have a guaranteed return from getting rid of the mortgage.”

The Smith Manoeuvre Debate