Housing Starts Down Again
Housing Starts Down Again
By 250 News
Monday, March 09, 2009 01:32 PM
Prince George, B.C.- Housing starts in the province are showing a decline. The latest information from Canada Mortgage and housing shows a 60% dip in starts in Prince George in February. While the number may seem alarming, the report quickly points out the numbers were not high to begin with. There were just 5 starts in February of last year, compared to 2 last month.
The bigger picture shows the decline so far this year is nearly 73 % as there had been 22 single family homes started in the first two months of 2008, compared to just 6 in January and February of this year.
“February 2008 was an unusually strong month for housing starts, which makes the year over year decline more noticeable” said Richard Sam, Market Analyst with CMHC. “However, low starts data for the first two months of 2009 are an indication that developers are pulling back until some of the supply of new and resale homes on the market are absorbed. In turn, home buyers will benefit from current buyer’s conditions that exist in the resale market. CMHC is forecasting that housing starts will decline by more than one-third in 2009” added Sam.
Provincial home starts declined to 12,300 units, seasonally adjusted at annual rates(SAAR) from 14,100 units in January 2009.
At the national level, housing starts moved lower in February to 134,600 units (SAAR) from 153,500 units (SAAR) in January.
Mortgage Matters: Variable or fixed and why?
Mortgage Matters: Variable or fixed and why?
By Bob Quinlan
Thursday, March 05, 2009 03:56 AM
By Bob Quinlan
As of Tuesday, March 3rd, 2009, the Bank of Canada has once again made a massive reduction to its overnight lending rate (0.5%). Many of the banks/lenders have in turn passed that reduction on by reducing their prime rate by the same amount to 2.50%. The question is more relevant: should I go fixed or variable?
In making your decision, there are a number of things you should consider:
Do you have the mindset to let your rate float with the market?
Are you concerned about the negative possibilities of prime increasing and your mortgage being caught in higher rates before you have the chance to lock in and save?
Before making your decision you should also consider a couple of things:
The main reason you would choose a variable rate is because you will be saving a lot now on a 5-year term while fixed rates are falling and you lock in later at a fixed rate that is lower than today. e.g. prime + .80% = 3.3% vs. 5-year fixed @ 4.29% ($165/month on a balance of $200,000)
Prime rate is not going to skyrocket over night. In fact most predictions are that prime will remain where it is at the highest for the rest of 2009. In the meantime, fixed rates should remain the same at worst or even fall. The economy has to improve for rates to start to rise. In other words, the demand for borrowing has to increase and by that I mean “qualified borrowers”. “Qualified” is defined by the market terms and I discuss that at great length in my previous comments.
Bob Quinlan is a Mortgage Broker with Mortgage Alliance Prince George, you can reach him by email :bob@pgmortgages.ca or by calling the office at 250-564-9161
· Even if borrowing rates were to start to rise, you as a borrower would not be able to avoid the warnings in the news. It’s kind of like when you buy a new vehicle. Once you start driving it on the road you notice all the other vehicles like yours. If you put your house up for sale you suddenly notice all the signs of other homes for sale and the advertising offering the same. When anyone is in a variable rate mortgage they are keenly aware of all the stories in the media not to mention the comments from their friends and colleagues who are interested in the same.
The important decision is to choose a lender that offers you the option to make that decision to lock at no charge and on the same day. Choose a representative who will be able to keep you informed of the current rates and your options. Someone who is available to make it happened without delay. Also, when you are looking at variable rates, take a look at that lenders fixed rates and how they compare to those of the competitors. The main reason you would choose a variable rate is because you are going to lock in somewhere down the road. These low rates are not going to remain over the entire 5-year term of your mortgage. Some lenders may offer attractive variable rate options only to have limited fixed rate choices when you go to lock in.
Also consider the future options such as Portability, Assumability, pre-payment options, etc. Each factor may have a bearing on who you place your mortgage with. Remember the actual description of the mortgage transaction: The borrower is the mortgagor. That means that the borrower provides a mortgage to the lender as security in return for the funds that the mortgagee (lender) offers. This is a mutually beneficial transaction that provides requirements for both parties to live up to.
Most people who are not comfortable with variable rate choices are not familiar with the details. Before choosing, make sure you clearly understand the benefits of either choice. A 30-minute meeting with your representative can easily save you as much as $1,000. Is that worth your time?
Mortgage Matters: Should I wait or should I do it now?
Mortgage Matters: Should I wait or should I do it now?
By Bob Quinlan
Monday, March 02, 2009 03:56 AM
by Bob Quinlan
A lot of people are wondering if they should wait to buy, re-finance, consolidate, etc., or whether they should act now.
One undeniable fact is, property values are falling and will continue to fall for the next while. If you are thinking of buying and you aren’t fussy about the property you are going to purchase then waiting might be a consideration. But then, if you aren’t fussy about the property why are you considering buying anyway? So then, this message is primarily for those who are serious.
The greatest frustration I am hearing from people is due to the change in how the lenders are looking at their applications. I thought I covered this in my last few articles.
The lending guidelines are decidedly different depending on whether we are in an increasing or decreasing market. Since we are in a decreasing market, the lenders are going to not only look at your credit history and your job tenure, they will also be looking hard at your prospects of continued income.
Your ability to keep on making the payments. What happens if your job is terminated, you are laid off or if your hours are simply cut? What if you are self-employed or commission, performance paid? What are the projections for your industry? Do you have any savings to make the payments if the worst happens? Nobody doubts your integrity. At the time of signing the mortgage documents, we all get full points for making a sincere commitment to make all agreed payments. Just like everything else, we make plans and then life happens.
This is why the lenders have to come up with guidelines to protect their investors and shareholders. Remember, when a property goes into foreclosure…everyone loses, not just the borrower.
What I am trying to say is, today we know what the guidelines are. Tomorrow they could change…for everyone. The chances are in this economic climate they will get tougher and it will be more difficult to borrow. So, if you are thinking seriously about buying and you have found a home that you and your family will be very happy in for years to come, what are you waiting for? Make sure you check out your options thoroughly before you decide to walk away. Tomorrow, that opportunity may not be there.
The same principals apply for re-financing to consolidate your debts or even just to better your rate and reduce your payments and interest expense. If your application is dependent on the value of your property or maybe the type of property, that value may be reduced later and you may not qualify. This also could have a double whammy as I have talked to a number of people who have been surprised to find that the interest rates on their unsecured lines of credit have been increased without notice. Check the fine print of your agreement. Your bank may have the option to raise your rate if they think your situation to be a risk. Uncertain times translate into higher rates on unsecured (more risky) loans. Waiting may cost you on both ends.
All this talk about tough times and tightening economies don’t simply mean lower prices due to lower demand. They also mean all businesses have to make sure they make enough profit to stay in business. That means on both ends…revenues and costs. This also pertains to people who make sure they doing the same with their incomes and expenses. Those who do will be able to relatively sail through these times to come. This is a great country we live in but we are not “entitled” to all the luxuries the advertisers tempt us with and the media leads us to believe are ours to take. However, we do have the means to earn them.
The tools are all there for everyone, no matter your situation. I counsel people every day on how to make plans to improve their lives. Those who chose to make a consistent, concerted effort are successful. Those who don’t are the ones we hear whining “poor me”.
Find out what your options are, hang on to what you have. Make the best of your opportunities. Believe me there are many, you just have to look for them.
Bob Quinlan is a Mortgage Broker with Mortgage Alliance Prince George, you can reach him by email :bob@pgmortgages.ca or by calling the office at 250-564-9161
