15 Apr

Dominion Lending Centres Chief Economist Dr. Sherry Cooper Cautiously Optimistic After B of C Rate Policy Announcement

General

Posted by: Rita Wagner

April 15th 2015

Vancouver, BC – Following today’s Bank of Canada’s announcement that it will hold overnight rates steady at 0.75%, Dominion Lending Centres’ Chief Economist, Dr. Sherry Cooper, says the outlook is unclear for the Canadian economy and the prospects for a potential rebound in the second half of 2015 are still uncertain.

The Canadian economy has experienced a substantial slowdown in recent months due to drops in the price of oil, and Dr. Cooper expects that any changes to the nation’s economic performance will likely be a result of an improvement in non-energy sectors emanating from the weakness in the Canadian dollar.

“While March employment in Canada improved substantially, business investment remains disappointing,” added Dr. Cooper. “The Bank of Canada has suggested that we will see a transition towards positive growth in exports and capital spending by non-energy producers—both boosted by the depreciating Canadian dollar, but in the near-term, incoming data will likely confirm continued weakness in the manufacturing sector, particularly in autos, and only modest growth in retail sales.”

Dr. Cooper reiterated her confidence in the Bank of Canada’s monetary policy strategy for 2015, despite the current weakened status of the Canadian economy: “I am cautiously optimistic that the Bank has got it right, but I continue to believe that the risks are on the downside for the economy and inflation.  My forecast for Canadian growth this year is 1.5 percent–below the Bank’s 1.9 percent forecast. Much hinges on the U.S. economy.”

6 Apr

Moving House Means Moving Mortgage

General

Posted by: Rita Wagner

Do you have a mortgage on your existing home and you’re thinking of moving? There are some things you first need to consider..

The importance of accurate and detailed answers around questions of the portability of your existing mortgage is vital prior to taking the first step to listing your property in order to move to a new one. All too often a cursory phone call is made directly to the lender to inquire ‘is our mortgage portable’ and often the answer to that question is delivered in a simple ‘yes’. However there is more to this answer, and a detailed conversation with your Dominion Lending Centres Mortgage Broker is vital.

Although nearly all mortgages are portable, the key point often missing from the one word answer is that a borrower MUST re-qualify for that mortgage. It is treated like a brand new mortgage application and underwritten according to current lending guidelines. Guidelines which may have changed significantly since the original mortgage was approved.

A renewal is a simple process with limited paperwork required while porting a mortgage to a new property is essentially starting from square one. This said a conversation with your Dominion Lending Centres Mortgage Broker at renewal time is also prudent.

There are also variations around lender process which require greater clarity, few lenders will allow the porting of a variable rate discount, yet the prepayment penalty itself can still be recovered up to 12 months later in some instances. The key is that a mortgage of equal size or greater and an equal (net) rate or higher is registered. Should a mortgage of a lower size be taken then the penalty is pro-rated. There are many ways to avoid a penalty with the right assistance navigating policies.

Again this is where your Dominion Lending Centres Mortgage Broker can play an important role. Clarifying the widely varying polices around penalty recovery.

Thinking of selling your home? Your first call should be to your Dominion Lending Centres Mortgage Broker to confirm portability policies and potential strategies to minimize risk.