Fixed rates going up!
Surrey, BC - June 2, 2009 - The Banks are moving to a higher discounted 5 year fixed rate as of tomorrow, moving their rates from the 3.75% range to 4.00-4.09% as we expected. They are using the recent increases in Bond yields to justify the move. The Bank of Canada meets next on Thursday, June 4th, when they are expected to leave Prime alone.
This bump was expected, and will stay in place for a few weeks until the US gets another bout of bad news and the stock markets drops again...then the money flows out of the stock market and into bonds, which drops their yields and then fixed mortgage rates. We expect to see this patern occur over & over during the next year or so. The US is still heading in a downward spiral and has not hit bottom as of yet despite the Obama government trying to paint a positive spin onto it. With GM in bankruptcy and more jobs likely lost, they are not out of the woods by a long shot, and that means overall low rates until they are...probably still 18 months away.
Variable rate mortgage products continue to make the most sense in this environment, and we are seeing some more competion amongst lenders, with most at Prime + .60% (2.85%) now, and one at Prime + .40% (2.65%). If you are in a variable currently, stay in it! If you are in a fixed, please touch base with us and have a review of whether it makes sense to move to a variable at this time as part of your mortgage strategy.
As always, having a Mortgage Strategy in place is always the best plan!
Call us for a no obligation review at anytime.
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Lending market update
With the change in credit markets we have seen a number of drastic changes over the last 6 months or so. This can have a dramatic impact on your clients, with changes to the major mortgage insurers having the greatest impact, such as Genworth & CMHC. Many of their programs are either gone or changed completely. What they will allow for debt service ratios, income verification, self employment verification and down payments are all being scrutinized more than ever.
Lenders themselves are all adjusting their rules as well, so it sometimes seems the changes to their policies are daily as to what is allowed and what is not.
If your client has been told by their Bank that they are "preapproved" it may not mean much more than the Bank would like to work with them, but will check everything later. We review our preapprovals on a per deal basis, and on those that are on the edge or in a gray area, we submit everything ahead of time to ensure you don't get suprised come subject removal time.
Knowing this side of the market is a key aspect of why dealing with us increases your chances of having your deal go through.
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Useful website for Your clients
Apart from our own website www.lloydonline.com (which is currently being reno'd, watch for changes soon!) here are some helpful links to provide to your clients who are looking for more information on mortgages.
If you need more specific information, please let us know! |
