The Honorable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.

"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."

The Government will therefore adjust the rules for government-backed insured mortgages as follows:

Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.

Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.

Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.

CANADA'S HOUSING MARKET REMAINS STRONG

Canada's housing market remains healthy and stable. According to the International Monetary Fund, our housing market is fully supported by sound economic factors, such as low interest rates, rising incomes and a growing population. Moreover, mortgage arrears—overdue mortgage payments—have also remained low.

Today's announcement is part of the Government's policy of proactively adjusting to developments in the housing market that could take root and cause instability. These steps are timely, targeted and measured, and will reinforce the importance of Canadians borrowing responsibly and using home ownership as a savings mechanism.

MORTGAGE INSURANCE

Mortgage insurance (which is sometimes called mortgage default insurance) is a credit risk management tool that protects lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender submits a claim to the mortgage insurer to recover its losses.

The law requires federally regulated lenders to obtain mortgage insurance on loans in which the homebuyer has made a down payment of less than 20 per cent of the purchase price (also called high loan-to-value ratio loans). The homebuyer pays the premium for this insurance, which protects the lender if the homebuyer defaults.

The Government ultimately backs most insured mortgages in Canada. It is responsible for the obligations of Canada Mortgage and Housing Corporation (CMHC) as it is an agent Crown corporation. In order for private mortgage insurers to compete with CMHC, the Government backs private mortgage insurers' obligations to lenders, subject to a deductible equal to 10 per cent of the original principal amount of the loan.

In October 2008, the Government adjusted its minimum standards for government-backed, high-ratio mortgages, including:

- Fixing the maximum amortization period for new government-backed mortgages to 35 years.
- Requiring a minimum down payment of five per cent for new government-backed mortgages.
- Establishing a consistent minimum credit score requirement.
- Requiring the lender to make a reasonable effort to verify that the borrower can afford the loan payment.
- Introducing new loan documentation standards to ensure that there is evidence of reasonableness of property value and of the borrower's sources and level of income.

MEASURES ANNOUNCED TODAY

Today, the Government announced three changes to the standards governing government-backed mortgages.

QUALIFYING AT A FIVE-YEAR RATE

Current interest rates are at record low levels, which has improved the affordability of housing for Canadians. It is important that Canadians borrow prudently and are able to manage their debt loads when interest rates rise.

Lender and mortgage insurers look at two key ratios when assessing the ability of a borrower to make payments on a mortgage loan:

Gross Debt Service (GDS) ratio—the ratio of the carrying costs of the home, including the mortgage payment, taxes and heating costs, to the borrower's income.
Total Debt Service (TDS) ratio—the ratio of the carrying costs of the home and all other debt payments to the borrower's total income.

Currently, the interest rate used to determine the mortgage payment for these calculations is either the rate fixed for the term of the mortgage or, in the case of a variable-rate mortgage and mortgages with terms of less than three years, the greater of the contract rate and the prevailing three-year fixed rate.

The adjustments to the mortgage framework will require mortgage insurers to ensure that borrowers qualify for their mortgage amount using the greater of the contract rate or the interest rate for a five-year fixed rate mortgage when calculating the GDS and TDS ratios.
This measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.

LIMIT THE MAXIMUM REFINANCING AMOUNT TO 90 PER CENT OF THE LOAN-TO-VALUE RATIO

Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95 per cent of the value of the property. This type of refinancing lowers the borrower's equity in their home. The adjustments today will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high ratio mortgage loan to 90 per cent of the value of the property, consistent with the principle that home ownership is a tool for savings.

DISCOURAGING SPECULATION BY REQUIRING A MINIMUM DOWN PAYMENT OF 20 PER CENT FOR NON-OWNER-OCCUPIED PROPERTIES

This measure will require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. Currently, borrowers may purchase a residential property with a 5 per cent down payment. Today's change will require a 20 per cent down payment for small (i.e., 1- to 4-unit) non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (e.g., borrowers purchasing a duplex to live in one unit and rent out the other) will still be able to access government-backed mortgage insurance with a 5 per cent down payment.

MOVING TO THE NEW FRAMEWORK

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010. Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010.

For more information on how this may impact your new purchase or refinacing your existing home contact your Ontario Mortgage Team Member today.

Bank of Canada lowers overnight rate target by 1/4 percentage point to 2 1/4 per cent

OTTAWA - The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of a percentage point to 2 1/4 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 2 1/2 per cent.

Three major interrelated developments are having a profound impact on the Canadian economy. First, the intensification of the global financial crisis has led to severe strains in financial markets. The associated need for the global banking sector to continue to reduce leverage will restrain growth for some time. Second, the global economy appears to be heading into a mild recession, led by a U.S. economy already in recession. Third, there have been sharp declines in many commodity prices. The outlook for growth and inflation in Canada is now more uncertain than usual.

Consistent with the G7 Plan of Action, major economies have announced extraordinary measures to stabilize their financial systems. These initiatives will be pivotal to resuming the flow of credit to support global economic growth. Canada's economy and strong financial system will benefit directly from these actions.

The weaker outlook for global demand will increase the drag on the Canadian economy coming from exports. Lower commodity prices will also dampen the outlook, working through a deterioration in Canada's terms of trade to moderate domestic demand growth. The marked tightening in Canadian credit conditions in recent weeks will restrain business and housing investment. The Bank expects growth to be sluggish through the first quarter of next year, then to pick up over the rest of 2009 and to accelerate to above-potential growth in 2010 supported by improving credit conditions, the lagged effects of monetary policy actions and stronger global growth. The recent sizeable depreciation of the Canadian dollar will also provide an important offset to the effects of weaker global demand and lower commodity prices. Overall, the Bank projects average annual growth in real GDP of 0.6 per cent in both 2008 and 2009, and 3.4 per cent in 2010.

With excess supply projected to build throughout 2009 and lower assumed energy prices, inflationary pressures will ease significantly relative to the projection in the July Monetary Policy Report Update. Core inflation is now projected to remain below 2 per cent until the end of 2010. Total CPI inflation should peak during the third quarter of 2008, fall below 1 per cent in the middle of 2009, and then return to the 2 per cent target by the end of 2010.
In the face of diminished inflationary pressures, the Bank of Canada lowered its policy interest rate by 50 basis points on 8 October, acting in concert with other major central banks. This extraordinary move, combined with today's announcement, brings the cumulative reduction in our target for the overnight rate to 75 basis points since the Bank's last fixed announcement date. These actions provide timely and significant support to the Canadian economy. The cumulative reduction in the Bank's policy rate since last December is now 225 basis points.

In line with the new outlook, some further monetary stimulus will likely be required to achieve the 2 per cent inflation target over the medium term. The evolution of the financial crisis, its impact on the global economy and the timing of the effects of the various extraordinary measures being taken to address it pose significant risks to the projection on both the upside and the downside.
The Bank will publish the details of its new projection for the economy and inflation, including all the key risks to the projection, in the Monetary Policy Report on 23 October 2008.

Information note:
The Bank of Canada's next scheduled date for announcing the overnight rate target is 9 December 2008.

Bank of Canada keeps overnight rate target at 3 per cent

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3 per cent. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 3 1/4 per cent.

Since the April Monetary Policy Report (MPR), economic developments have been broadly in line with expectations. However, the balance of risks to the Bank's April projection for inflation in Canada has shifted slightly to the upside. Although the composition of U.S. growth has not been favourable for demand for Canadian goods and services, overall, global growth has been stronger and commodity prices have been sharply higher than expected. At the same time, many of the downside risks to inflation identified in the April MPR have eased, while the evolution of credit conditions has been in line with expectations. The risk remains that potential growth will be weaker than assumed.

With the decline in first-quarter GDP, the Canadian economy is judged to have moved into excess supply, which is expected to increase this year. Consistent with the April MPR, the Bank continues to project that economic growth will pick up this year and accelerate in 2009, owing in part to a firming of U.S. demand and accommodative monetary policy in Canada.

If current levels of energy prices persist, total CPI inflation will rise above 3 per cent later this year. However, with the Canadian economy operating in excess supply, core inflation is expected to remain below 2 per cent through 2009. Both total and core inflation should converge on 2 per cent in 2010 as the economy returns to balance.

Against this backdrop, the Bank now judges that the current stance of monetary policy is appropriately accommodative to bring aggregate demand and supply into balance and to achieve the 2 per cent inflation target. There continue to be important downside and upside risks to inflation in Canada, which the Bank will monitor closely.

Information note:
The Bank of Canada's next scheduled date for announcing the overnight rate target is 15 July 2008. The Bank will publish an updated projection for the economy and inflation, and its assessment of the risks, in the Monetary Policy Report Update on 17 July 2008.

Bank of Canada lowers overnight rate target by 1/2 percentage point to 3 per cent

OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of a percentage point to 3 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 3 1/4 per cent.

Growth in the global economy has weakened, reflecting the effects of a sharp slowdown in the U.S. economy and ongoing dislocations in global financial markets. Growth in the Canadian economy has also moderated as buoyant growth in domestic demand, supported by high employment levels and improved terms of trade, has been substantially offset by the fall in net exports. While both total and core CPI inflation were running at about 1.5 per cent at the end of the first quarter, the underlying trend of inflation is judged to be about 2 per cent, consistent with an economy that was operating just above its production capacity.

The Bank is now projecting a deeper and more protracted slowdown in the U.S. economy. This has direct consequences for the Canadian economic outlook, with declining exports projected to exert a significant drag on growth in 2008. In addition, tightening credit conditions and softening sentiment are expected to moderate business investment and consumer spending. Nevertheless, domestic demand is projected to remain strong, supported by firm commodity prices, high employment levels, and the effect of cumulative easing in monetary policy.

The Bank projects that the Canadian economy will grow by 1.4 per cent this year, 2.4 per cent in 2009, and 3.3 per cent in 2010. Consistent with this growth profile, the economy moves into excess supply in the second quarter of 2008, and spare capacity continues to increase through early next year. However, a gradual recovery in the U.S. economy, a return to more normal credit conditions, and accommodative monetary policy should generate above-potential growth and bring the economy back into balance around mid-2010.

The recent price-level adjustments for automobiles and the effect of past changes in indirect taxes will keep measured inflation below target through 2008. The emergence of excess supply in the economy should keep downward pressure on inflation through 2009. Both core and total inflation are projected to move up to 2 per cent in 2010, as the economy moves back into balance. There are both upside and downside risks to the Bank's new projection for inflation; these risks appear to be balanced.

In line with this outlook, some further monetary stimulus will likely be required to achieve the inflation target over the medium term. Given the cumulative reduction in the target for the overnight rate of 150 basis points since December, the timing of any further monetary stimulus will depend on the evolution of the global economy and domestic demand, and their impact on inflation in Canada.

A full analysis of economic and financial developments, trends, and risks will be set out in the Bank's Monetary Policy Report, to be published on 24 April 2008.

Information note:
The Bank's next scheduled date for announcing the overnight rate target is 10 June 2008.

Canadian Boomer Resilience: 84% Not Scared Off Real Estate Despite U.S. Housing Downturn

21% of Canadian baby boomers plan to make a real estate purchase in the next three years, according to a recent Mortgage Intelligence survey -

Eight out of ten (84%) Canadian baby boomers, aged 41-61, state they are not hesitant to consider a real estate purchase despite U.S. housing market volatility, according to a new online survey by Angus Reid Strategies on behalf of Mortgage Intelligence Inc. In fact, 21% of boomers surveyed anticipate making a real estate purchase in the next three years; 63% are not apprehensive about Canadian real estate, but have no plans to purchase within three years; 6% are not considering a Canadian real estate purchase because of the U.S. housing decline; and 10% do not know how they feel about Canadian real estate.


“Canadian boomers are a savvy bunch, and our survey indicates that despite the turmoil in the U.S., they clearly understand the long-term value of real estate,” said John Schipper, President, Mortgage Intelligence Inc. “With approximately 2 million boomers planning to buy a home within the next three years, this segment will be a major driver of the Canadian real estate market.”


Results from two polls commissioned by Mortgage Intelligence, a leading Canadian mortgage brokerage, shed light on some interesting Canadian baby boomer real estate trends:

24% of younger boomers (between the ages of 41 and 54) are more likely to have plans to purchase real estate in the next three years versus 13% of older boomers (between the ages of 55 and 61). (Angus Reid Strategies).
17% of those interested in purchasing real estate are most interested in investment properties, followed by 15% who want to downsize. (Corporate Research Associates).
More younger boomers are looking for out-of the box solutions for generating additional disposable income, including real estate investments observes Barry LaValley, founder and president of the Retirement Lifestyle Centre and Special Advisor to the Scotiabank Group.“ A sub-element of the investment real estate boom is the ‘tear down’ property market. Boomers are seeking out inexpensive properties that can be dressed up and resold for a profit,” said LaValley.

“Real estate clearly remains an important investment strategy for boomers as they plan for their retirement years,” said Schipper. “Every day, our mortgage consultants work closely with these clients to offer consultative service, knowledgeable advice and flexible mortgage solutions to meet their changing lifestyles.”

About the survey
The first poll was conducted by Angus Reid Strategies on September 25, 2007 among a representative sample of 490 Canadian boomers. The results are based on two-sided tests with significance level 0.05. The second poll was conducted by Corporate Research Associates Inc. in a nationwide study of 1,000 baby boomers across Canada between August 10 to September 4, 2007. An overall sample of 1,000 drawn from the population would expect to provide results accurate to within plus or minus 3.1 percentage points 19 times out of 20.


About Mortgage Intelligence Inc.
Mortgage Intelligence Inc. is among the largest and fastest growing mortgage brokers in Canada, with more than 1,000 independent consultants and associates in offices across Canada. Mortgage Intelligence consultants help clients make better mortgage decisions for their home, revenue or vacation properties, renewals, home renovations, debt consolidation needs, and specialized mortgage requirements. The company had funded volumes in excess of $7.8 billion in fiscal year 2006. For more information, visit: www.OntarioMortgageTeam.com

Bank of Canada keeps target for the overnight rate at 4 1/2 per cent

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 4 1/2 per cent. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 4 3/4 per cent.

Against a backdrop of robust global economic expansion and strong commodity prices, information received since the July Monetary Policy Report Update (MPRU) indicates that the Canadian economy is now operating further above its production potential than had been previously expected. The core rate of inflation, which has been above 2 per cent for the past year, was 2.2 per cent in August. Total consumer price inflation fell temporarily in August to 1.7 per cent, having been above the 2 per cent inflation target since the spring.

Since the July MPRU, the outlook for the U.S. economy has weakened because of greater-than-expected slowing in the housing sector. The Bank has revised down its projection for U.S. growth to 1.9 per cent in 2007 and 2.1 per cent in 2008. U.S. growth is expected to pick up to 3 per cent in 2009.

The Canadian dollar traded in a range of 93 to 95.5 cents U.S. in July and August, but since then it has appreciated sharply to as high as 1.03 dollars U.S. In the Bank's new base-case projection, the Canadian dollar is assumed to average 98 cents, the mid-point of the range since the July MPRU. As well, there has been a tightening of credit conditions stemming from the financial market developments this summer. For Canada, the Bank assumes that the cost of credit for firms and households relative to the overnight rate will be 25 basis points higher over the projection period than it was prior to the summer developments.

Despite these tighter credit conditions, momentum in domestic demand in Canada is expected to remain strong. The combined effect of a weaker U.S. outlook and a higher assumed level of the Canadian dollar implies, however, that net exports will exert a more significant drag on the economy in 2008 and 2009 than previously expected. As a result, the Canadian economy is projected to grow by 2.6 per cent in 2007, 2.3 per cent in 2008, and 2.5 per cent in 2009. This growth profile implies that aggregate supply and demand will move back into balance in early 2009. Both core and total CPI inflation are projected to return to 2 per cent in the second half of 2008.

In line with this projection, the Bank judges, at this time, that the current level of the target for the overnight rate is consistent with achieving the inflation target over the medium term.

There are significant upside and downside risks to the Bank's inflation projection. On the upside, excess demand in the Canadian economy could persist longer than projected. This could come from two sources: higher growth in household spending than projected and lower growth in productivity than assumed. On the downside, if the Canadian dollar exchange rate were to persist above the 98 cent U.S. level assumed over the projection horizon for reasons not associated with stronger-than-projected demand for Canadian products, Canadian output and inflation would be lower. In addition, the effect of the past appreciation of the Canadian dollar on demand and inflation could be stronger than expected and the effect of the weakness in the U.S. housing sector could be greater than anticipated. All factors considered, the Bank judges that the risks to its inflation projection are roughly balanced, with perhaps a slight tilt to the downside.

A full update of the Bank's outlook for growth and inflation will be set out in the Monetary Policy Report, to be published on 18 October 2007.

Information note:
The Bank of Canada's next scheduled date for announcing the overnight rate target is 4 December 2007.

For current market conditions and up to date rate: www.OntarioMortgageTeam.com

Bank of Canada keeps target for the overnight rate at 4 1/2 per cent

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 4 1/2 per cent. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 4 3/4 per cent.

Near-term prospects for economic growth outside North America appear to be slightly stronger than anticipated in the July Monetary Policy Report Update (MPRU), while near-term economic prospects for the United States are weaker than expected. It now seems likely that the adjustment in the U.S. residential housing sector will be more pronounced and protracted, exacerbated by recent developments in financial markets. On balance, this implies weaker demand for Canadian exports than had been expected at the time of the July MPRU.

In Canada, total and core CPI inflation in July, at 2.2 per cent and 2.3 per cent respectively, continued to be above the inflation target but generally in line with the Bank's expectations. The Canadian dollar has also largely traded in the range assumed in the July MPRU. At the same time, the pace of economic growth in the first half of this year was above the Bank's expectations. It now appears that the Canadian economy is operating further above its production potential than was estimated in July. Domestic demand remains robust, buoyed by a continuing strong labour market and higher-than-expected increases in home sales and prices. However, recent developments in financial markets have led to some tightening of credit conditions for Canadian borrowers, which should temper growth in domestic demand.
Against this background, the Bank judges that the current level of the target for the overnight rate is appropriate. However, there are significant upside and downside risks to the outlook for inflation. On the upside, there is a possibility that household demand in Canada could be stronger than anticipated, while on the downside the ongoing adjustment in the U.S. housing sector could be more severe and spill over to the U.S. economy more broadly. In addition, there is uncertainty about the extent and duration of the tightening of credit conditions in Canada and, hence, about the tempering effect this will have on growth in domestic demand.

The Bank will continue to closely monitor evolving economic and financial developments. A full update of the Bank's outlook for growth and inflation, including risks to the projection, will be set out in the Monetary Policy Report, to be published on 18 October 2007.

Information note:
The Bank of Canada's next scheduled date for announcing the overnight rate target is 16 October 2007.

A Gentleman offers you $11,000 for your medium double double

Just imagine - as you're going through your favourite coffee drive-thru this week - that a well-dressed gentleman stops and offers you $11,000 for your medium double double. Who would hesitate? We'd take the cash. It's not so far-fetched. In fact, if you take that coffee budget and apply it to your monthly mortgage payment - a mere $30 extra per month -you could save yourself about $11,000 over the life of your mortgage.

Most of us can accept the idea that we must borrow money to purchase a home. We look for the best mortgage, and then just keep doling out the money for as long as it takes to pay it off. Most Canadians choose to amortize their mortgage over 25 years. That's a long financial commitment, and it could more than double the cost of your home. But with good planning - and a few smart tactics - you should be able to enjoy your mortgage-burning party much earlier.

Here are a few strategies for fast-tracking your mortgage:

1. Increase your monthly payments. Rather than choosing your amortization period first, ask yourself how much you can afford each month. For example, you may feel that you can afford $1,000 per month. You're delighted when your $125,000 mortgage only demands an $800/month payment (at a 6% interest). But make a monthly payment of $1,000 instead, and you'll shave 8.75 years and almost $46,000 off your total interest cost.

2. Take advantage of lower rates. In addition to reducing the overall interest component of your mortgage, you can take the opportunity to pay down more principal faster - simply by maintaining your original payment. You should even increase your payment if you can, to reap the benefits of the cheapest mortgage money in memory. Again, you could take years - and thousands of dollars -- off your mortgage.

3. Tie mortgage payments to your pay schedule. Many Canadians are paid on a bi-weekly schedule. If you accelerate your payments to bi-weekly instead of monthly, you could improve your own cash flow and fit in an extra payment each year. That means that you're paying off principal faster - leaving you with less interest to pay overall. It doesn't seem like much but - like putting your coffee budget to work - the bi-weekly strategy can have you mortgage free four years sooner, with almost $22,000 in savings.

4. Use any bonuses, tax refunds or "found money" to pay down principal. This is especially valuable in the early years of your mortgage. If you receive an annual bonus or other lump-sum compensation, see if you can put it against the principal. An extra $1,000 per year is a great way to fast-track to mortgage-free!

5. Consolidate your loans into a new mortgage and use the savings to boost your payments. If you're a homeowner with some equity, you can use your mortgage to consolidate your other loans: student loans, car loans, etc. Add the money you've been spending on loan payments to your mortgage payments, and you could see big savings in overall interest.

With mortgage rates at historic lows, you should take the opportunity to get an expert mortgage analysis from an independent mortgage broker with access to mortgages from a wide spectrum of lenders. You've got a great opportunity to put some fast-track tactics in place. You'll remember what a good decision you made at your mortgage-burning party.

For more information on this and other money saving strategies contact:

Ontario Mortgage Team
Mortgage Intelligence Inc.
Leading the way to a better mortgage.

Purchase * Refinance * Renewal * Investment
FREE Mortgage Information and Apply On-Line at:
www.OntarioMortgageTeam.com/

“Subject to sale” clause requires a reality check

It’s been a ball, hasn’t it? The real estate market has been so hot for so long, we can hardly believe what houses are selling for these days. Everyone’s got a story about a friend or neighbour who got some fantastic price for a home. However there are some down sides to an up market. Among other things, buyers and sellers with stars in their eyes don’t always act rationally. We all want to believe that we can strike a big win in a hot real estate market. And sometimes we do.

But when we pin those hopes to a ‘subject to sale” clause in an Offer to Purchase, those hopes need to be accompanied by a solid reality check.

Here’s what can happen if you’re the buyer: You’ve found the home of your dreams, and while they’re asking a pretty penny for the place, you’re not really worried because your current home is also expected to sell very well. After all, the neighbours are still talking about how much the family around the corner got for their place last year! You put in a great offer on the house of your dreams, and use a “subject to sale” clause to give yourself a few months to nab a good price for your own place. Sure, you could have offered the vendor a lower price, but you can’t “go cash”, and you want to offer a price that’s attractive enough to make it worth the vendor’s while to wait for you, while you hope it all works out.

You might both be lucky: the home you’re buying might be worth what you’re offering, and your own home might be worth what you hope. And the banks might agree with your assessment of the value of both. But that’s a lot of “might”s. If you don’t get the price you want for your own home, are you prepared to honour your Offer to Purchase? Or will you need to scramble financially or plead with the vendor to negotiate a lower price? And what if the vendor is similarly counting on the offered price to purchase his or her next home? When your high hopes are disappointed, the result can be a nerve-racking and even ruinous game of financial dominoes that leaves lenders, brokers and several sets of homeowners in a cold sweat.

What if you’re the vendor? A buyer has paid you the compliment of a very attractive offer on your home – “subject to sale” of their own home, of course. Usually, an offer which contains a “subject to sale” clause requires a longer completion date so the buyer has a reasonable amount of time to capture a good price for his own home. The immediate result, then is that your home will be generally considered “off the market” during this period of time, and other buyers
will look elsewhere for a home which is clear of existing offers. Sure, you can entertain other offers, but an existing offer always puts a damper on interest – particularly if the offered price seems a little high.

The result is that your perfect buyer may not even get through your front door. And while it’s flattering to get a great offer on your home, keep in mind that you don’t have the money in your hand yet. A buyer who has unrealistic expectations about what his own house may sell for, could also have offered you an unrealistic price for yours. If he is disappointed on his own sale, you can expect to be disappointed on yours. Your buyer may either be forced to collapse the Offer to Purchase. or come back to negotiate for a lower price – after you’ve spent a few months of missed opportunities with other buyers.

These “subject to sale” clauses don’t need to be an obstacle to a smart and realistic transaction. But in a strong real estate market, optimism sometimes overcomes good sense. Before either offering or accepting a “subject to sale” clause in an Offer to Purchase, do a reality check. An independent mortgage broker can explain the consequences for both buyers and sellers, and help you chart the best course for your own financial situation.

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For more information click here for the Ontario Mortgage Team Professional nearest you:

Ontario Mortgage Team
Mortgage Intelligence Inc.
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Purchase * Refinance * Cottages * Investment
Click here for FREE Information and apply on-line

One in four Canadians aim to buy a recreational property

The un-official start to the cottage season is here, and as Canadians look for ways to make the most of their summer, many are looking to the country's hot recreational property market to maximize their seasonal enjoyment. And, even as prices continue to rise and more people turn to a mortgage provider to realize their vacation property dreams, consumers still want to pay down their mortgage as quickly as possible.

According to a recent poll conducted on behalf of Mortgage Intelligence Inc. and GMAC Residential Funding of Canada Limited:

> One in seven Canadians (14 per cent) currently own a vacation property and one in four (28 per cent) would like to purchase a vacation property in the future.
> Forty-one per cent of vacation property owners are over the age of 55, while 47 per cent of those who wish to purchase are between the ages of 35 and 54.
> Fifty-four per cent of Canadians would like to pay down their vacation property mortgage in 15 years or fewer. This is particularly true of retirement-age Canadians, with 83 per cent of those aged 55- plus preferring to pay down their mortgage within this time frame.
> Significant regional preferences exist for the types of recreational properties people wish to buy:
> Consumers in Quebec prefer to purchase chalets (39 per cent).
> Forty-nine per cent of people in Ontario wish to purchase a waterfront property.
Waterfront properties are also most popular in British Columbia (39 per cent), Manitoba / Saskatchewan (47 per cent) and the Atlantic Provinces (30 per cent).
People in Alberta prefer all-season properties (32 per cent).
> Most people in Alberta (69 per cent), and many in Manitoba/Saskatchewan (40 per cent), Ontario (39 per cent) and Quebec (45 per cent) plan to use 11 to 20 per cent of the purchase price as a down payment for their recreational property, while 47 per per cent of people in British Columbia and 54 per cent of people in the Atlantic Provinces plan to use more than 20 per cent.

"A growing number of Canadians are factoring a vacation property into their retirement planning and are looking for flexible mortgage solutions that will enable them to buy the property they want and retire with financial peace of mind," says Stan Falkowski, President, Mortgage Intelligence Inc. "These are hard-working Canadians who want to enjoy their retirement without making mortgage payments for years on end."

In the past, financing for a recreational property has been more challenging than for a principal residence, as traditional lending institutions have found second homes to be a less than desirable investment. But as the recreational property market continues to grow across the country, fuelled by affluent Baby Boomers preparing for their retirement years, consumers are finding they have other options that provide the flexibility and payment options that will help them pay down their mortgage faster. With a recreational property mortgage like irelax, consumers can purchase a vacation property with as little as 15 per cent down and take advantage of up to 20 per cent prepayment and up to a 20 per cent increase in payments annually.

"Vacation properties are more than just a financial investment for most Canadians. They quite often become the spot where families come together," adds Falkowski. "While recreational property mortgages are still relatively new to the market, a product like this provides an easy and affordable way to start a whole new string of family traditions."

The poll was conducted by Angus Reid Strategies between May 9 and May 10, 2007 among a representative sample of 1,046 adult Canadians. The results are accurate to within plus or minus three percentage points, 19 times out of 20.

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For more information click here for the Ontario Mortgage Team Professional nearest you:

Ontario Mortgage Team
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Stability in the money market

Here is some historical data on Canadian Prime Rate I thought you'd find interesting.

If the Prime Rate remains the same for the next two weeks, it will have been 6.00% for a full year. The last change was May 17th, 2006.

The Prime Rate has not been that stable (over a 12 month period) for 34 years, not since April 1973.

Other periods of note where the Prime Rate has been stable for periods of up to 11 months.
1983 - 1984 Rate - 11.0%
1989 - 1990 Rate - 13.5%
1996 - 1997 Rate - 4.75%
2004 - 2005 Rate - 4.25%

The record, which is in very little threat of ever being broken, is 4.50% from November 1944 to March 1956. That's 11 year and 5 months following the war.

For more information contact the Ontario Mortgage Team Professional nearest you

Ontario Mortgage Team
Mortgage Intelligence Inc.
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Changes to Federal Legislation affecting High-Ratio Mortgages

Recent federal legislation has increased the maximum loan to value ratio under which conventional lending can be done in Canada without a requirement for mortgage insurance.

An amendment to the Canadian Bank Act came into effect on April 20, 2007, which increases the threshold for mandatory mortgage default insurance on residential real estate secured loans to 80% loan-to-value ratio (LTV) from 75% LTV. Mortgage default insurance in the 75.1% to 80% range is no longer required by Law.

Why is this great news? It makes home ownership more accessible as the purchaser will no longer have to work to build up a 25% down payment in order to save the cost of mortgage insurance premiums. The reduced requirement of 20% will put home ownership within reach for more clients and sooner than before this change.

On a Purchase Price of $250,000 the savings on insurance premium is approx $2,500. a fee that will no longer be added to the mortgage also reducing the interest charges on that same amount over the amortization of the mortgage.

For details on this and other innovative borrowing strategies contact:

Ontario Mortgage Team
Mortgage Intelligence Inc.
Leading the way to a better mortgage

Purchase * Refinance * Renewal * Investment
FREE Mortgage Information and apply on-line at:
www.OntarioMortgageTeam.com/applynow.aspx

In every child's first drawing of a house, what do you see?

A modest home, a front path lined with flowers, smoke coming from the chimney, and yes -- a tree. We all have our favourites - trees to hold a swing, to provide shade, to fill a view, to freshen the air, or just to send our eyes skyward.

Trees are embedded in our human imagination. We'll be coming up to tree-planting season again. Here are just a few reasons why you should consider planting a new tree, or to take really good care of the trees you already enjoy:

• Beauty. "I think that I shall never see a poem as lovely as a tree." Do you remember reading this is high school? Plant a tree for the sheer beauty of it.
• Spirit. Urban planners say that trees bring out the best in people. We know that a tree-lined street is more inspiring and feels more friendly than a bare one. The tree-huggers are on to something.
• Oxygen. The green lungs of our neighbourhood, town, country, continent, hemisphere, and planet -- trees give us the necessary air of life. We need more of them. If you need to remove a dying tree, make a plan to plant one somewhere as a replacement.
• Cleanse. Trees help remove carbon dioxide and other pollutants from our atmosphere. We need trees to do this for us - more now than ever. There is always fresh air in the forest. No coincidence. Thank the trees.
• Cool and shade. Trees can lower the air temperature around your home by many cooling degrees on those hot summer days. Not only do they provide much needed protection for you, your family, and your shade-loving pets, but they also emit cooling moisture into the atmosphere.
• Windbreak. If you plant evergreens on the north side of your home, you can save energy dollars in the cold season. These stately trees provide a lovely backdrop for your summer garden, and when snow-laden in the winter - they look especially grand.
• Prevent soil erosion. The root systems of trees will hold your soil in place - something to think about if you have steeper gradients on your property.
• Natural habitat. Without our trees, where would birds and other creatures hang out? Plant a tree and watch for the arrival of the songbirds.
• Increase property value by up to 10 percent. Yes, that's right. 10 percent. More in some cases, and that adds up to a lot of dollars.
• Privacy. Screen yourself from traffic, unsightly views, and neighbours whose property is too close. Trees will also buffer sound: reducing some of the undesirable traffic, train, and mechanical noises, which surround us.
• Autumn. What would our favourite season be without the glorious display of our deciduous trees? Yes, raking the leaves can be a chore, but it's worth it.
• Go native. If you need to plant or replace a tree - select a native species. You'll find that native trees are: less susceptible to pests and disease, don't need as much water, and are altogether much less demanding than non-native species. Ask a local arborist (your city or town usually employs one) to recommend a tree for your property.
• Natural legacy. Plant trees for your children, your grandchildren, and your great-grandchildren. Celebrate weddings, births, anniversaries and other special occasions with a tree.

Take the time to enjoy pushing your loved ones on a rope swing or just sit in the shade of your tree while you read your children Dr. Seuss' "The Giving Tree".

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Ontario Mortgage Team
Mortgage Intelligence Inc.
Leading the way to a better mortgage

Purchase * Refinance * Renewal * Investment
FREE Mortgage Information and apply on-line at:
www.OntarioMortgageTeam.com/applynow.aspx

Spring-cleaning your debt could save you thousands

Wouldn’t spring-cleaning be so much more gratifying if – somewhere under dusty barbecue parts and outgrown hockey skates – you found an envelope with, say, $5000 in cash? Wouldn’t that make spring-cleaning worthwhile? Of course it would!

Well, you may not uncover a financial windfall when you’re cleaning the garage this spring, but a little time and attention to the task of spring-cleaning your financial house can be very rewarding. This spring, dust away the cobwebs and take a hard look at your debt servicing costs.

Are you continuously carrying a large monthly balance on your credit card? Or are you making regular use of your overdraft protection at the bank? Worst of all, could it be that you’re carrying a balance on a high interest department store card? Take some comfort in knowing that you’re not alone. However, this particular kind of financial clutter – ongoing, unsecured consumer debt – is both confusing and costly. Guess what? It’s time to spring-clean your debt!

Begin by making a quick list of any loans, credit cards or other unsecured debts. In addition, make a note of the interest rates charged on any outstanding balances. Finally, do a quick calculation of what you have paid in debt servicing costs this winter. Has the tax man sent you a bill? Don’t forget to include that debt in your spring-cleaning project.

Next, take a look at the going mortgage rates, and make an appointment with a mortgage professional. By rolling your other debt into a mortgage-either new or existing-you can reduce the number of payments you’re making each month, you can save big on interest charges, and you can improve your cash flow.

How much difference will it really make? Well it can be as good – or better – than finding the $5000 envelope of cash in your garage. Why? As an example, if you have a $160,000 mortgage at 6%, high interest credit cards and other loans of say $33,000; your total monthly payment could be $2,014.

Now if you took that $193,000 and added on an approximate $3,000 penalty to refinance your mortgage, you may be able to potentially roll that $196,000 into a 5.09% mortgage (OAC, rates subject to change) that could reduce your overall monthly payment to $1,150. That’s a monthly savings of $864.

Your monthly payment has been reduced, you’re saving on interest charges, and all of your high interest credit card debts are gone. Imagine if you funneled some of that cash flow back into your mortgage!

If you have equity in your home -- preferably more than 25% equity – you may want to consider taking advantage of attractive mortgage rates and rid yourself of your financial clutter. Regardless of where you are in the life of your mortgage, talk to a mortgage professional who can analyze your situation and outline your spring cleaning options.

So as you polish the windows, shake out the carpets and clear out the garage, don’t forget the most rewarding task of all: spring-cleaning your debt. Your financial house will enjoy the fresh beginning, too!

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Ontario Mortgage Team
Mortgage Intelligence Inc.
Leading the way to a better mortgage.
Purchase * Refinance * Renewal * Investment

FREE Mortgage Information and Apply On-Line at:
www.OntarioMortgageTeam.com/applynow.aspx