Mihir's Market Matters Report - October 2013

October 2013 Welcome to the October issue of Mihir's Market Matters Report. I hope everyone had a Happy Thanksgiving and are enjoying the last gasp of unusually high temperatures for the Fall season.  Variable Rate Update With recent speculation that the BoC may not raise Prime until 2016, Variable rate mortgages are the best option available. VRMs have traditionally outperformed Fixed rate mortgages over the past 25 years (see chart above, source: Bank of Canada).   Of course, VRMs are not for every client as some want the security of a Fixed Rate. I can help there too. Call me today to discuss all the options. Market Watch 5 year Bond Yield: 1.94% (as of 10/16/13) Prime Rate: 3.00% Qualifying Rate: 5.34%  Bond yields seem to have flattened out after the roller-coaster of the last few weeks. The US government shut down - and it's potential restart - will have an effect on bond yields, so stay tuned to see how this all works out.  Fixed rates are still very good and clients shouldn't be expecting dramatic changes in the short term. BEST RATES AS OF 17th OCTOBER 2013 Variable Rate: 5 years @ Prime - 0.55 or 2.45% 3 years Fixed @ 3.09% QUICK CLOSE SPECIAL - 3.34% FIXED FOR 5 YEARS Regular Rate: 3.49% FIXED FOR 5 YEARS Pre-Approvals: 3.69% FIXED FOR 5 YEARS Thanks Mihir Oza 647-710-7374 Mortgage Agent (License # M11000672) The Mortgage Practice My Motto: Right Advice. First Time, Every Time. Bank of Canada Interest Rate July 17, 2013 1.00 % September 4, 2013 1.00 % October 23, 2013 Next meeting date Source: Bank of Canada Bank Prime Lending Rate July 18, 2013 3.00 % September 5, 2013 3.00 % October 24, 2013 Next meeting date Source: Bank of Canada Conventional Mortgage - 5 Year Rate* August 14, 2013 5.14 % August 28, 2013 5.34 % September 25, 2013 5.34 % Source: Bank of Canada *Determinant for high ratio mortgage variable qualifying rate US Federal Reserve Board Discount Rate* July 31, 2013 0.00 % - 0.25 % September 18, 2013 0.00 % - 0.25 % October 30, 2013 Next meeting date Source: US Federal Reserve *US Federal Reserve has indicated it will now keep this rate until unemployment reaches 6.5% Exchange Rate $CDN($US) August 28, 2013 0.9537 September 11, 2013 0.9695 September 25, 2013 0.9696 Source: Bank of Canada Government of Canada Bonds Bond Type August 28, 2013 September 11, 2013 September 25, 2013 1 year Treasury Bill 1.11% 1.11% 1.07% 3 year Benchmark Bond Yield 1.32% 1.55% 1.42% 5 year Benchmark Bond Yield 1.90% 2.13% 1.89% 10 year Benchmark Bond Yield 2.63% 2.78% 2.57% Source: Bank of Canada Total New Housing Starts (Seasonally adjusted and annualized)  Source: CMHC Housing Now - September 2012 and September 2013. This seasonally adjusted data goes through stages of revision at different times of the year. Average MLS® Resale Price for Local Markets  Source: Canadian Real Estate Association  Canadian Housing Affordability Index Canadian Household Survey The measures are based on a 25% down payment, a 25-year mortgage loan at a five-year fixed rate, andare estimated on a quarterly basis Source TD Economics September 2013

Home Care During Fall and Winter

Fall is in full swing and #Halloween and #Diwali is around the corner. I sure you are feeling that in the air around. For homeowners, it's also about the responsibilities that come with your home - preparing it for the changing seasons and maximizing energy efficiency.

Here's a simple checklist to make sure you're fall-ready:

 Make sure you turn off the back yard and garage water tap

Go to basement and find the water valves for backyard and garage, now is the time to turn them off. Once you turn them off, make sure you open the valve from outside so the water remained in the valve drains out. This will prevent the pipe bursting during the cold winter season.

 Make sure your home is sufficiently insulated
Check your basements, attics and walls to ensure that your home is still properly insulated. Check windows for cracks or opportunities to re-caulk. Just remember, a well insulated home is an energy efficient home - and heating and cooling costs add up quickly!

 Review your heater systems
Proper maintenance of your heater and boiler systems will result in energy savings. Make sure they're clean and operating as they should be. If there are any glitches, repair immediately - this is crucial to energy efficiency in a home during the winter.

 Fall cleaning: your ventilation system
For health and energy reasons, a thorough cleaning of your vents is necessary. Check for obstruction in them - make sure they're clear and clean them. Remember: heat rises. This means in the winter you should have main-leveled vents opened completely to maximize the heat in your home.

 Replace your air filters
Avoid HVAC (heating, ventilation and air-conditioning) system failure by getting new filters. Don't let dirt collected on your old filters slow down - or worse - burn out the motor. Allow clean air to flow throughout your home without any restrictions. Clean air makes your family happy.

CMHC for Home Buyers in Canada!

The housing market in GTA has started moving to become a buyer friendly one. There are so many buyers waiting for this opportunity. I know still the prices are not that affordable and difficult to come up with 20 % down payment to avoid CMHC insurance premium.
Oh...Let me explain you what does it mean by CMHC and how is it helpful to a home buyer.
CMHC stands for? Canadian Mortgage and Housing Corporation.

You might have heard that, you can buy your own dream home with 5 % downpayment and most importantly you are still eligible for banks preferred mortgage rate. Isn't it amazing ? Yes it is amazing our home land Canada always there for its people.

Yes, it is possible through the CMHC insurance. If you don't have 20 % down payment to buy your dream home in Canada, you can purchase insurance from CMHC and then bank lands you money and you can be in your dream home. 
How does it work ?....CMHC takes the buyer under it's huge insurance umbrella, that way CMHC assures the financial institute (bank). And because of that, if due to unavoidable reasons, buyer defaults, financial institute(Bank) is not at risk of loosing money. So the bank can easily land money to those buyers at LOW rate.

Please note that if you have 20% or more toward down payment, you don't need to buy CMHC insurance.

Refer table below for rates you need to pay.

Loan-to-Value	Premium on Total Loan		Premium on Increase to Loan Amount for Portability and Refinance
	Standard Premium	Self-Employed without 3rd Party Income Validation	Standard Premium	Self-Employed without 3rd Party Income Validation**
Up to and including 65%	0.50%	0.80%	0.50%	1.50%
Up to and including 75%	0.65%	1.00%	2.25%	2.60%
Up to and including 80%	1.00%	1.64%	2.75%	3.85%
Up to and including 85%	1.75%	2.90%	3.50%	5.50%
Up to and including 90%	2.00%	4.75%	4.25%*	7.00%*
Up to and including 95%	2.75%	N/A	4.25%*	*
90.01% to 95% — Non-Traditional Down Payment***	2.90%	N/A	*	N/A
Extended Amortization Surcharges Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period.†

Hope this article would have answered all the questions you had about CMHC Insurance.

Rate has been given in above table. If you have any questions regarding don't hesitate to call me or email me.