The Importance of Education & Training for Brokers

Why is ongoing education and training so important for Canadian mortgage brokers in today’s market place? Check out the attached article by Greg Martel, featured in this month’s CMP Magazine!

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Benjamin Tal’s Winter Economic Buzz

CIBC’s Senior Economist, Benjamin Tal gives you his insight in his winter Economic Buzz. Please click the below document to enlarge.

Benjamin Tal’s Summer Economic Buzz

The summer edition from Benjamin Tal; CIBC’s Senior Economist is out! In this issue Benjamin talks about the rate forecast and his thoughts on locking in versus staying in a float rate.

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How the Home Price Forecasts Changed

STEVE LADURANTAYE — Real Estate Reporter Globe and Mail Blog
The Canadian Real Estate Association has been adjusting its forecast for 2011 as economic circumstances warrant, and on Monday took another crack at the numbers.
Its first prediction was made in February, 2010, when it said prices would fall 1.5 per cent as sales fell 7.1 per cent.
Monday’s numbers were rosier, as stronger than expected sales across the country and high prices in B.C. caused the trade association to amend its outlook to a 1.3 per cent decline in sales and a 4 per cent gain in prices.
Here’s how it got there:
Initial forecast for 2011, February 2010
Sales: -7.1 per cent
Prices: -1.5 per cent
“Interest rate increases will contribute to weaker national sales activity in 2011.”
June, 2010 forecast for 2011
Sales: -8.5 per cent
Prices: -2.2 per cent
“While sales activity is unfolding as expected in Ontario, the decline in affordability in British Columbia impacted sales in the province during the first quarter. Additionally, changes to mortgage regulations announced in February are expected to marginally impact activity.”
July 2010 forecast for 2011
Sales: -7.3 per cent
Prices: 0.9 per cent
“Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.”
November, 2010
Sales: -9 per cent
Prices: -0.8 per cent
“Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA’s annual forecast.”
February, 2011 forecast for 2011
Sales: -1.6 per cent
Prices: 1.3 per cent “The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence.” May 9 forecast for 2011 Sales: -1.3 per cent Prices: 4 per cent
“Although sales activity in the first quarter of 2011 came in largely as expected, multimillion dollar property sales in Greater Vancouver have surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher.

Mortgage Term Review

Why is the “Term” Important?

As the saying goes, “The lowest rate will save you hundreds, but the wrong term can cost you thousands.”

Put another way, your mortgage term can have a far greater impact on interest cost than the up-front interest rate. That’s because your term determines the length of time you’re locked into a rate. That, in turn, affects how long you’ll overpay or underpay, relative to the other available options.

The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early. It therefore pays to make the right choice from the get-go.

Almost anyone can find a low rate by browsing the Internet. Picking the right term isn’t so easy. Take some time, get good advice, and nail the right term the first time. Below you’ll find bite-sized term reviews to give you a running start.

Popular Fixed Terms…

Here’s a breakdown of the most common mortgage terms:

1-year Fixed: If rates rise as economists expect (see: mortgage rate forecast), then a deeply discounted 1-year fixed is mathematically a good alternative to a variable. At the end of the term, you can move into another 1-year or consider a variable rate—possibly at a better discount than today.
2-year Fixed: Rates on two-year terms are now low enough to make them slightly more attractive than variable and 1-year fixed rates. That’s assuming prime rate increases 1.75% in the next two years. If your rate expectations are lower than that, then a 1-year fixed performs better “on paper.”
3-year Fixed: This is unquestionably the sweet spot thanks to 3-year rates under 3%. The three-year beats all other terms in our internal rate simulations. If we were forced to pick one strategy for the next five years, a three-year fixed followed by two one-year terms would be it. As always, the trade-off with a 3-year term is more risk in years 4 and 5.
4-year Fixed: At today’s rates, 4-year mortgages are still a waste of time unless you plan to break your mortgage in four years. (Remember, however, that people do refinance every 3.5 years on average.)
5-year Fixed: This is the most popular term in Canada, and government restrictions on variable-rate qualification have made it more so. Fortunately, 5-year fixed rates have never been lower—literally. At under 3.50%, the conservative 5-year term has become attractive even to long-time variable-rate devotees.