Tuesday, January 18, 2011

Did Canada Need Mortgage Rule Changes?

The Canadian Mortgage Insurance program will have the following changes.

A reduction to the amortization period of the mortgage from 35 to 30 years. These are for new government backed (or Canadian Insured mortgages only.) when a borrower has less then 20% down payment on their property. At this time, conventional mortgages with down payments of over 20% are not effected. The goal of the government is to reduce the total amount of interest payments Canadians make on their mortgage each month. The hope is to reduce Canadians risk of higher debt exposure, expedite the process of building equity in the home and pay off their mortgage faster.
Another new change is the Canadian Mortgage Insurance program is the maximum about Canadians can borrow with refinancing their mortgage. The new maximum is 85% of the value of the home. In the past, Canadians could borrow up to 90% of the value of their homes when refinancing. The government made this change to promote saving through home ownership and limit the refinancing of debt into mortgages.
Canadian mortgage insurance will also effect home secured lines of credit. Canadians will no longer be able to secure a line of credit on their homes if the loan to value is under 80%. Banks and other lenders at this time will continue to secure lines of credit on homes using their current guidelines.

While Canada Mortgage Insurance has made these changes, many lenders will still allow access to 35-year amortizations as long as the loan to value is over 20%. Rates continue to remain low so there is continued strong demand for purchasing and refinancing.

While refinancing your mortgage will be effected either way, it is not by much. The Canadian Bankers Association released a survey in December 2010 showing Canadians with mortgages which have significant equity in their home, averaging about 50 per cent of the home's value so there is still plenty of room for Canadians to purchase a home, investment properties, recreation properties and refinance with these changes. As well the survey points out that national mortgage-in-arrears numbers remain very low, at less than half of one per cent.

"The real debt load problem is with credit cards and unsecured lines of credit" says Jared Dreyer, President VERICO Dreyer Group Mortgages". "The Canadian government has done nothing to address the lenders rules for consumer qualifications for these products. In my opinion this is the real issue in household debt and it is not being addressed with the lenders at all. We need to provide better education and guidelines on these unsecured products to the consumer. This government by implementing these changes to the Canadian Mortgage Insurance rules has overlooked these issues. Canada does not have the population base to take even more consumers out of the housing market. I hope
that the government does address the unsecured banking practices with as much attention as they have with sound secured mortgage debt".

Average MLS resale price for local markets


November 2009

November 2010




Saint John, NB




































Source: Canadain Real Estate Association

Bank of Canada Interest Rate

October 19, 2010


December 7, 2010


January 18, 2011

Next meeting date

Source: Bank of Canada

Bank Prime Lending Rate

October 20, 2010


December 8, 2010


January 19, 2011

Next meeting date

Source: Bank of Canada

Continued Success in 2011!

Jared Dreyer, AMP
Mortgage Professional
604 649-5991
About Dreyer Group Smiles

Dreyer Group Smiles is a program dedicated to giving to facilities that provide safe and transitional housing to children and youth in the Fraser Valley of British Columbia. By providing funds to these programs, Dreyer Group will make a meaningful difference to kids who otherwise may not have a roof over their heads, or hope for a bright future.  
Dreyer Group hopes to expand this effort through their clients and business partners. In addition, they plan to raise additional funds through annual events and corporate fundraising initiatives. Dreyer Group is working closely with the Salvation Army to allocate these funds to the children and shelters.

About Dreyer Group Mortgages, A Member of the VERICO Brokers Network 

As a senior mortgage consulting team with extensive experience in the financial services industry and thousands of happy clients throughout the Lower Mainland, we understand what it takes to build long-term relationships through service and expertise. As an independent brokerage, we are not restricted to one financial institutions mortgage options. We provide the best range of financing solutions by accessing over 40 lenders and hundreds of products coast-to-coast.

Each VERICO member is an independently owned and operated business.
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The Donald's Sales Tips to Get You Pumped for 2011

Never do things for your customers and prospects in a small way. Make it big or don't do it at all.

Everyone likes to do business with a winner. No matter what stage of your career, you need to think like you've made it.

Be a big thinker. The timid and the small thinkers will talk sports and weather. They will pale in comparison to the bold winners who share compelling stories and ideas.

Be focused. Put everything you’ve got into what you do every day.

Believe in yourself. If you don’t, no one else will.

Be tenacious.

Trust your instincts.

Maintain your momentum and keep everyone moving forward.

See yourself as victorious and leading a winning team.

Be passionate about what you do.

Live on the edge. Do not become complacent.

Leadership is not a group effort. If you’re in charge, then be in charge.

Never give up!

Don't sell. Thrill.

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