www.VancouverTDMortgage.com

TORONTO, Oct. 8- TD Canada Trust today announced that it has
lowered its prime lending rate by 25 basis points to 4.50 per cent, effective October 9, 2008.
“Like all financial institutions, we have been watching the key lending rates very closely. Continuing market turmoil has steadily driven up the cost of borrowing for financial institutions.
This makes it challenging to match the Bank of Canada rate cut at this time. We recognize the efforts the Bank of
Canada is making and, despite the fact that our cost of funds remains high, we have decided to reduce our rate by 25 bps. We see this as a balanced move in managing our funds and passing along the intended benefits to our customers,” said Tim Hockey, President and CEO, TD Canada Trust.
“We will continue to carefully watch the effect of central bank actions and key lending rates, as well as the market’s reaction and the competitive landscape, all of which we will take into consideration for future rate setting,” added Hockey. – Kelly Hechler, TD Bank Financial Group

John Hahn
TD Canada Trust
Vancouver Mortgage Manager
www.VancouverTDMortgage.com

Lot of people are waiting to see some significant housing price drop if they are among first time buyers.

It is true that the market is cooling down, however we will not go through the same effects as in USA housing meltdown.

For one reason, our market is still upwards and not going backwards with pricing.

Yes it is slower and there are still so much of supplies out there. However, people are STILL buying, buying with pace that is comfortable to them. Yes, you are right! It is the Buyer’s Market.

For Vancouver, the market has been smoking hot and price hike has been crazy! Guess what, the price trend is still upwards and NO it will not come down anytime soon. One may see 5 % increase in pricing rather than 30% increase over a couple of years. That does not mean the price will be dirt cheap in 2 years. It will still be more expensive than now. You will see more of tough guidelines when you are to get Mortgages. So, should you just indefinitely wait?

Vancouver market is unique, in a sense that we have so much of investment money poured into the market from out of the country resources.

Did they go for 100% mortgages like our neighbour in the US? Not even close!! Most of the foreign investors put their hard working cash when they purchased their investments. So when people say we will follow the trend of US, maybe or maybe not.

Choose your financial strategy wisely!

Look at Warren Buffett for instance. When the market gets crashed- I mean literally crashed – someone is busy taking the greatest chance of all to acquire all money out there waiting to be picked up. When you see the market volume of the stock market past couple of weeks, it has been pumped up like there is no tomorrow. You know what that means. When poor people get panicked and busy selling, someone is busy buying them out. If everyone is in panic, there should be no transaction since no one wants to buy. Isn’t that funny? Market is SO busy now! I do second his way of investing. Following the crowd does not necessarily bring you to the main road when you are lost.

Good luck with you all with your venture.
You go take advantage of the current market situation!

Buy Low and Sell High!

John Hahn
TD Canada Trust
Vancouver Mortgage Manager
www.VancouverTDMortgage.com

The Government of Canada announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian housing market. The new measures include:

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; and
Introducing new loan documentation standards.
The announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.

The new limits are planned to take effect October 15, 2008. This would allow existing mortgage pre-approvals with the common 90-day duration to be used or expire. Certain exceptions would also be permitted after October 15. The Government will work closely with all stakeholders to ensure timely and effective implementation of these measures.

As these measures relate only to new, government-backed insured mortgages, Canadians who already hold mortgages will not be affected by this announcement.

The measures announced will build on the strength of Canada’s housing market. According to the International Monetary Fund, the increase in house prices in Canada is based on sound economic factors such as low interest rates, rising incomes and a growing population. A recent Statistics Canada report concluded that home ownership is at record levels, with over two-thirds of Canadians owning their own home.

Mortgage arrears-overdue mortgage payments-have also remained low. In recent years, the percentage of mortgages in arrears for three months or more continues to be at low levels not seen since 1990.

Tips from VancouverTDMortgage.com
a. Minimum Credit Score – 620
b. Maximum Total Debt service Ratio – 40%
c. Maximum Gross Debt service Ratio – 32%
What does it mean to you? Do you want to better your credit score?
Talk to John Hahn about your current credit score and financial situation to plan out the home buying with pleasant outcome.
www.VancouverTDMortgage.com

Mortgage clients constantly tell me “I need the best mortgage rate. What rate do you offer?”

While the client is always right, and we always provide the best rate and terms, we do convey the need to look at the “extras” when selecting the best mortgage. Extras include:

The Bank of Canada kept the status quo on it’s Prime Rate today.  Prime rate will therefore stay where it is, at 4.75%.

The Bank seemed less concerned about inflation in this statement,saying, “Core inflation has stayed at 1.5 per cent as expected.”  The BoC expects that “total and core inflation will converge on 2 per cent in the second half of 2009.”  Falling commodity prices could help in that respect.

As for our economy, the Bank basically described Canada’s output as “slightly lower than expected,” but not enough so to cut interest rates.

The 5-year bond seemed somewhat unfazed by the BoC’s comments.  It’s still hovering near 3%.  The Canadian dollar, however, sank to it’s lowest level versus the U.S. dollar in over a year, before rebounding strongly.

The BoC’s statement today offered few clues as to when they would alter rates next.  We’ll see what happens between now and the BoC’s next interest rate meeting on October 21.

www.VancouverTDMortgage.com

Desjardins says housing affordability has increased 10% in the last two quarters thanks to falling home prices and mortgage rates.  “Affordability” is the ratio of disposable income to the income needed to qualify for the average Canadian mortgage.  The all-time low in affordability was in 1990.

John Hahn
TD Canada Trust
Vancouver Mortgage Manager
www.VancouverTDMortgage.com

The debate between fixed or variable rates never dies.  Thousands of mortgage planners and lenders counsel their clients on this decision every day.  In doing so, most of them rely on the landmark research of York University’s Dr. Moshe Milevsky.

In 2001, Dr. Milevsky made Canada reassess its fixation on fixed-rate mortgages.  He showed with statistical evidence that variable rate-mortgages saved borrowers money 88.6% of the time.  Since then, Dr. Milevsky’s research has been one of the foundations of Canadian mortgage planning. 

Now, seven years later, Dr. Milevsky has issued a third and much anticipated update to his 2001 study (here is the previous update).  The results were published recently on Advisor.ca, in a story entitled Moving Mortgages.

Among other things, Dr. Milevsky’s newest findings reaffirm his 2001 conclusion that, “over the long run, homeowners really do pay extra for fixed-rate mortgages.”

The following is a list of the other key take-aways from Dr. Milevsky’s latest article:

• Based on data from 1950 to 2007, the average Canadian could expect to save interest 90.1% of the time by choosing a variable-rate mortgage instead of a fixed.  The average savings was $20,630 over 15 years per $100,000 borrowed.  (The assumptions used are described in the story.)
• Despite the above, Dr. Milevsky feels there is no “one-size-fits-all solution” to choosing a fixed or variable rate.  He says it depends mainly one’s risk tolerance.
• The premium of fixed rates over variable rates has declined about 7% in the last seven years
• Predicting long-term interest rates is virtually impossible.  Dr. Milevsky feels that “even Bank of Canada governor Mark Carney is unlikely to possess” this skill.
• Milevsky reminds readers that being able to predict short-term interest rates “does not necessarily generate better odds over time.”
• Here’s a stunner.  Statistically speaking, even people who can accurate predict rate direction one year out cannot beat the performance of variable rates Milevsky says.  He therefore urges homeowners to “avoid the temptation to outguess the Bank of Canada or the billion-dollar bond market.”

John Hahn
TD Canada Trust
Vancouver Mortgage Manager
www.VancouverTDMortgage.com