Mortgage Bytes

  • Where are mortgage rates going?  CIBC’s noted economist Benjamin Tal says, “from a planning perspective, look for stable to somewhat lower rates in the coming six months.”
  • Mortgage-Debt Vancouver’s average home price may hit $900,000 next year.  That’s a $5,284 per month mortgage payment (if you can afford 10% down)!  But fear not, you’ll only need to make a few hundred grand a year to qualify for it.
  • See how much income you need to qualify. Link
  • Considering a 40-year amortization?  If you are, real estate blog Move Smartly suggests to, “increase your mortgage payments as your salary increases.”  In addition, if you’re buying for the short term (say 5 years), be warned that long-amortizations make you more vulnerable to short-term dips in real estate prices.  With a 40-year amortization, you’ll pay less of your principal over five years than with a 25-year Am.  If the market goes down you’ll have a greater risk of owing more than your house is worth.
  • InterBay is offering up to a $1500 rebate on commercial appraisals at closing.
  • Despite a challenging subprime market, Xceed is still advertising 100% financing for borrowers with credit as low as 480 (OAC).
  1. Xceed again looks like a great buy opportunity for investors. If only I had more cash sitting around I would probably be moving on it. When this whole mess blows over and they reinstate their dividend think of the 8-9% yield.
    I doubt that the average home price in Vancouver will hit 900K. At some point the salaries of the people there will catch up to the financing and it will either slow the value increases to a crawl or everything will implode. It’s only a matter of time, too bad you can never know when it will happen.
    I don’t have quite the following that Mr. Tal has, but I don’t think we will see too many rate cuts here in the next while. Inflation was something like 2.5% for September if I’m remembering correctly. If that keeps climbing because of the booming resources then rates will be forced to go up eventually. Things are so close it’s near impossible to call though. Even the Dec 4th rate announcement can’t be called, let alone out 6 months.

  2. With oil and metals near record highs, inflation in the wings, and a booming housing market there’s little chance rates are going down in 6 months. -DB

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