Edmonton Home Buyers Rejoice
March 3, 2010
It’s just been reported that “BMO’s Drops The Gauntlet With Their 5-Year Fixed Mortgage” and reduced their 5 year advertised discounted rate to 3.75%.
This is a huge deal in the Mortgage industry, as it’s very rare that a big bank will undercut the other banks so publicly. Most of the other big 5 are advertising 4.09% for a 5 year fixed rate, so you can see that’s 0.34% lower.
Keep in mind that it is pretty easy to find a rate below 3.75% within the broker channel. Most brokers are quoting rates under 3.75% for 90 day closes, and 3.69% for 30 day closes.
I’m keeping my fingers crossed that the news from BMO is an indication of where short term 5 year fixed rates are going.
To take advantage of these record setting rates, Start your Edmonton Home search Today.
Please let me know your thoughts in the comments section below.
My take on CMHC’s MORTGAGE changes
March 1, 2010
Over the last week I’ve received question after question about the effects of the governments new mortgage rules on home buyers. Here is my TAKE on a few of the changes and how they affect first time home buyers.
· Borrowers will have to qualify for the mortgage using the 5 year fixed rate.
This isn’t as bad as it sounds. It will reduce the maximum amount the purchaser can borrow, BUT it also protects the home buyer from over extending themselves. A 2% interset rate MUST go up, and when it does, SO will your payments. Can you afford an extra $500 per month?
· Investors purchasing rental properties will require 20% down.
This is the Big One. It’s my OPINION that CMHC had a lot to do with the over heated market of 2006-2008. When CMHC started allowing Edmonton real estate investors to buy with 5% down, it created massive competition in the Edmonton market. You could now buy a rental property with $15,000 down. I saw numerous investors getting $100,000 lines of credit on their homes and buying 3-4 investment properties. Adding an extra 20% more buyers to any market will cause massive inflation.
In the long run I think this will help first time buyers, who don’t have current equity to help with the down paymentt. It will make it harder for real estate investors to by multiple homes with little down. I believe that real estate investing is a great long term investment stratagy. If you are buying mutiple properties with little down, you are attracting a lot of risk. In the end, HE WHO HAS THE MOST EQUITY WINS!
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I would love to hear what you think. Pease feel free to comment or email me @ mark@talktowalker.com.
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December 17, 2009
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