Why you should get a rate hold now.

Very pleased to be a guest blogger for Jeff Campbell’s Real Estate Team and also pleased to work with one of the best realtors in Calgary. There are about 5,000 realtors in town and about 500 make their full-time living at it; Jeff’s team are some of the better ones for sure. The big advantages of using a top mortgage broker are listed near the end of this entry but reasons to use us should be pretty obvious by the time we get that far. Good brokers earn our salt because we watch the markets, the lenders, the rules, and the mortgage rates all day for a living. Or the good ones do anyway.

So … What is going on with these super low mortgage rates?

Right now interest rates are at their 111-year lows at about 3.4% for a 5-year fixed, closed, mortgage. The banks consider anything under 4.0% to be free money. Consider the banks have to borrow the funds, include the cost to administer the funds and also make a profit. At 4% there is not much room left for profits – they say.

Now consider the recent US debt ceiling issue (they have not really done anything about facing their debt problems yet) and pile the EU issues on top with the PiiGS – Portugal, Italy, Ireland, Greece and Spain – and the stock market freaked out and did a general sell-off. That is the 49-word summary of the world economy right now.

When the sell-off happened, all those (literally) trillions of dollars have to go somewhere and they go into American Treasury Bonds – the standard for where banks put their short term cash. Those bonds then pay almost no “incentive” or interest to the buyers as banks really have no choice and are going to buy the treasury bonds anyway. This means the interest the bonds now have to pay to get banks to buy them is way less – around 0.25%. The circle is complete when the banks that fund your mortgage borrow money from a bond (the Canadian Mortgage Bond, or CMB) that charges them almost no interest – they then pay the bond almost no interest, and in turn, charge you less to you too. That is how rates are now below the theoretical minimum of “the 4% barrier” and down to these never-seen-before, short term, 3.4% rates.

If you did not follow that paragraph above don’t worry about the background data. Just remember this; as soon as there is even a sniff of economic recovery, as in, the EU or the USA gets it’s mess sorted out, money will rocket back into the stock market and then these treasury bonds (and the CMB) will have to pay more interest to get banks to buy them. That interest cost then gets passed along back to you, the mortgage consumer, and rates go back to above that 4% hurdle. (The long term, 20-year, average for the 5 year fixed mortgage is about 6.5%.)

The news is that the stock market rally might be here very soon because we watch the stock markets very closely too. Then rates go up, everyone gets more confident, people start buying things that they were putting off – like homes, prices start to go up, people from all over Canada move back to Alberta – the CBC National on Nov. 15th just had a 25 minute focus on Alberta and Saskatchewan jobs and worker shortages – and the cycle accelerates with rates and prices increasing.   More on my blog here: http://wp.me/pVaY9-5W     How to take advantage of this now click here

These are exciting times,

Mark Herman, AMP, B. Comm., CAM, MBA-Finance

1 of the Top-10 brokers of 1,700 at Mortgage Alliance

Direct: 403-681-4376

Accredited Mortgage Professional | Mortgage Alliance - Mortgages are Marvelous

Toll Free Secure E-Fax: 1-866-823-1279

Mortgages are Marvelous

Toll Free Secure E-Fax: 1-866-823-1279

Come out to one of our Great Pumpkin Give-A-Way’s and pick the perfect pumpkin for your family!

Come and pick your pumpkin up at one of the following locations
Saturday Oct 22 @ 10am at  CO-OP Creekside Shopping Centre
Sunday Oct 23 @ 10am at Sobeys Country Hills Town Centre

Be sure to sign up for our Monthly E-mail Newsletter, pick up a box of Smarties and get a few of our famous shopping bags!

Hope to see you there!

WinSport Canada is planning a huge retail/commercial development at Canada Olympic Park that would include a grocery store, retail stores, restaurants and two hotels, the Herald has learned.

The proposed development, subject to city approval, would be about 400,000 square feet. Retail stores would be geared to promoting healthy, active lifestyles and the hotels would accommodate 300 rooms – one family-based and a larger one with a spa and conference centre.

The proposal is currently before the City of Calgary. It includes the sale of about 22 hectares of land to a developer. The proposal is geared to complement current use at Canada Olympic Park, raise capital for the facility and create an ongoing cash flow. Dan O’Neill, president and chief executive of WinSport, said “we’re on a very clear mission to become unique to the world.” “We want to have a national sports institute here,” he said. “And that includes a high school. We want to be able to service all the winter sports. to read more by  the Calgary Hearld Click here

We specialize in Calgary Real Estate. If you have any questions about the Calgary real estate market, Calgary homes for sale, or would like a free market evaluation of your home. Call the Jeff Campbell Team now 403-816-4449 or visit www.JeffCampbellTeam.com your Calgary Real Estate experts!

Resale activity in Calgary’s housing market is expected to pick up this year while average MLS sale prices increase slightly as well, says Canada Mortgage and Housing Corp. in a report released Thursday.

“We are anticipating a number of positive factors to benefit the housing market in 2011,” said Richard Cho, senior market analyst for Calgary for the CMHC. “Increased activity in the energy sector will support employment across a number of industries. We expect to see more full-time jobs being created and higher levels of net migration in Calgary. As such, this will support demand for home ownership as well as for rental accommodations.   To read full article from the Calgary Herald click here

We specialize in Calgary Real Estate. If you have any questions about the Calgary real estate market, Calgary homes for sale, or would like a free market evaluation of your home. Call the Jeff Campbell Team now 403-816-4449 or visit www.JeffCampbellTeam.com your Calgary Real Estate experts!

1.      The maximum number of years the government will back a mortgage was lowered from 35 years to 30 years. The maximum used to be 40 and was lowered to 35 a year ago. Previously the long time standard was 25.      

           o   Change will take effect March 18th.
 
2.      The maximum that Canadians can refinance their home is lowered from 90% to 85%.

          o   Change will take effect March 18th.
 
3.      Government insurance backing on home equity lines of credit, or HELOCs, has been removed. 
           

          o   Change for Heloc’s no longer being insured will take effect April 18th.

The government said exceptions would be allowed after the new measures come into force when needed to satisfy a home purchase or sale and financing agreement struck before the March and April in-force dates.

There was a proposal that would have required 100% of condo fees to be included in GDS & TDS ratio calculations however the current rule remains at 50%.

The 5% down payment still exists as does the 0% down – surprisingly – but for how long?

Detailed Numbers

In regards to rule #1:
.     On a standard $250,000 mortgage, at today’s discounted mortgage broker rates of 3.99% for a 5 year fixed mortgage payments increase from $1100 a month for the 35 year amortization to $1187 a month for the 30 year amortization. An increase of $87 a month or $1,044 a year.
.     An employee on a $50,000 salary (at today’s broker rate of 3.99% for a 5 year fixed mortgage, using $1200 a year property tax and $100 a month for heat) now only qualifies for a maximum mortgage of $238,620 on the 30 year amortization. On the 35 year they used to qualify for $257,451. A reduction of their maximum mortgage qualification of $18,831 or almost 8%.

In regards to rule #2 & #3: We do not recommend customers refinance above 80% anyway because they would have to re-incur the CMHC fees. This change will mainly affect those that were in need of the equity funds – usually to pay down debts or for emergency cash.

Provided by Mark Herman; AMP, B. Comm., CAM, MBA  Accredited Mortgage Professional  One of the Top-10 Brokers at Canada’s Largest Independent Mortgage Brokerage Mortgage Alliance

So it is for single-family home builders in and around Calgary — although spring will likely come late next year, with forecasters predicting the return of the rugged winters of our youth.  Spring is a time of optimism and renewal — at least, so the saying goes.

For single-family home builders in and around Calgary, next spring will be worth the wait, says Richard Cho, senior market analyst for Canada Mortgage and Housing Corp. Detached single-family home construction will increase at a “modest” rate, he says. The delay is because the oversupplied resale housing market is still there — and what’s worse, sales are down.  To read more by Marty Hope with the Calgary Herald click here

We specialize in Calgary Real Estate. If you have any questions about the Calgary real estate market, Calgary homes for sale, or would like a free market evaluation of your home. Call the Jeff Campbell Team now 403-816-4449 or visit www.JeffCampbellTeam.com your Calgary Real Estate experts!

The Canadian housing resale market was almost five per cent more active in October compared to the previous month,  the Canadian Real Estate Association says.

The 4.6 per cent increase in sales on the agency’s Multiple Listing Service follows similar rises in September and August. As a result, activity is 13.3 per cent higher compared to July, the low point for 2010. “National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009, CREA chief economist Gregory Klump said. This suggests that the Canadian housing market may be starting to  normalize.”  to read more by Yahoo Canada click here

We specialize in Calgary Real Estate. If you have any questions about the Calgary real estate market, Calgary homes for sale, or would like a free market evaluation of your home. Call the Jeff Campbell Team now 403-816-4449 or visit www.JeffCampbellTeam.com your Calgary Real Estate experts!

The Jeff Campbell Team held four Annual Great Pumpkin Give-Away this year:

1st Annual Great Pumpkin Give-Away on October 16 at 9:00 a.m. on Coventry Hills School Sports Field on Coventry Hills Way NE.

2nd Annual Great Pumpkin Give-Away on October 23 at 11:00 a.m. on Panamount Blvd NW & Panamount Square NW in the park.

5th Annual Great Pumpkin Give-Away on October 23 at 9:00 a.m. on Evanston View in the park.

3rd Annual Great Pumpkin Give-Away on October 23 at 11:00 a.m. on Kincora Drive in the park.

We also had Smarties as treats for all and our environmental shopping bags to give away; we have now handed out more than 15,000 Jeff Campbell Team environmental shopping bags. We look forward to next year’s event, I hope with more great weather!

According to the Calgary Real Estate Board, year-to-date sales until the end of August were down nearly 10 per cent compared with the same period in 2009. However, the average MLS sales price year-to-date has increased by nearly four per cent to $291,284. MLS condo sales have declined on a monthly basis for the past four months. To read more by Mario Toneguzzi with the Calgary Herald click here.

We specialize in Calgary Real Estate. If you have any questions about the Calgary real estate market, Calgary homes for sale, or would like a free market evaluation of your home. Call the Jeff Campbell Team now 403-816-4449 or visit www.JeffCampbellTeam.com your Calgary Real Estate experts!

The final southwest stretch of the ring road planned to eventually encircle the city will not be approved if government proposals are unacceptable to the community, according to a local MLA. On Saturday, Calgary-Elbow MLA Alison Redfordaddressed a group of about 300 local residents opposed to constructing the stretch of highway. On behalf of the minister of transportation, Redford said: “This is not intended to hurt this community . . . .  to read the full article by Jennifer Gerson with the Calgary Herald click here

We specialize in Calgary Real Estate. If you have any questions about the Calgary real estate market, Calgary homes for sale, or would like a free market evaluation of your home. Call the Jeff Campbell Team now 403-816-4449 or visit www.JeffCampbellTeam.com your Calgary Real Estate experts!