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This yesterday from our friends at OneStreet Mortgage.

"Effective October 17, 2016, all insured homebuyers must qualify for mortgage insurance at an interest rate the greater of their contract mortgage rate or the Bank of Canada’s conventional five-year fixed posted rate. This requirement is already in place for high-ratio insured mortgages with variable interest rates or fixed interest rates with terms less than five years. What does this mean for the average household?"

More on the OneStreet Mortage blog, here.

I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

Knowing what’s inside your credit report is more than just a good idea, it’s an essential part of any prudent financial plan. Saskatchewan law provides consumers with the opportunity to see their personal credit reports for free.

Understanding what's in your credit report and how it can affect you when applying for a mortgage is a must. Making these inquiries in advance can help you get through the home buying process smoothly and without surprises that could derail your move. However, there are other good reasons why we should all be familiar with the information that credit bureaus collect and store on our credit history.

Identify theft continues to be a problem across the country. Thieves are racking up massive debts, using the good names and credit of their victims and leaving behind a financial mess that’s difficult to clean up.Keeping on top of your credit report will help you find out if someone is using your credit, hopefully before the creditors come knocking on your door, attempting to collect the debts that have accumulated in your name.

There may be another good reason to be mindful of your credit report. It seems that a number of employers in the U.S. are beginning to request credit reports from prospective employees. I’m not completely sure why they feel this is justified. I suspect that they would argue that a person’s credit worthiness speaks to that individual’s sense of responsibility, and perhaps their character. After all, the granting of credit is always based on the promise to repay. I don’t know if we’ll ever see this practice used here, but I see nothing in the Saskatchewan Human Rights Code that would prevent it.

Our province has a Credit Reporting Act which governs the types of information that credit reporting agencies can keep on you, and how long it can be kept for. The federal Personal Information Protection and Electronic Documents Act states that you have a right to know what information credit reporting agencies have about you in their files.

There are two major credit reporting agencies which operate in Canada. They are Equifax and Trans Union. Both of them will have information in their files concerning your credit history. If you need to have the report today, both services offer an over the web credit report for a fee. They also offer a free credit report which is sent to you in the mail. It is your right to obtain a free copy of your credit report each year but you must request that it be sent to you. The links below will take you right to the page of each agencies website where you can download the forms that you'll use to make that request. Why not get started on this today?

Equifax credit report

Trans Union credit report

Publication titled, “Understanding Your Credit Report and Credit Score” published by the Financial Consumer Agency of Canada.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email. Norm Fisher Royal LePage Saskatoon Real Estate This post was originally published November 26, 2006 and has been updated to include current links.

I’ve just read “Assessing Vulnerabilities in the Canadian Housing Market,” a five-page report written by CIBC economist Benjamin Tal and released on May 25. If you’re looking for some reassurances that the bottom isn’t about to fall out of the Canadian housing market, you may appreciate Tal’s assessment.

Mr. Tal clearly feels that Canadian housing is overvalued but he doesn’t think there is an unmanageable affordability problem in Canada.

First, Tal believes that “at least 1.5 million houses in Canada are overvalued” and his research indicates that prices on those properties are inflated by as much as 14%. Provincially, British Columbia is the worst with an over valuation of 20.7% and Alberta is the least inflated at 8.6%. Saskatchewan fits neatly between the two at 13.2%, just below the national average.

Tal goes on to say that the market is showing clear signs of cooling and that price growth has “rapidly decelerated” over the past few months. He goes on to suggest that absent a “trigger” to a violent correction, prices will not necessarily crash. According to Tal, rising rates will not be the trigger some believe it to be. He speculates that rates will climb slowly and that most Canadians will be able to manage the costs associated with those changes.

According to Tal and CIBC’s affordability index, which is based on actual transactions as opposed to “synthetic mortgage” assumptions, we can afford it. On average, Canadians are using just 15.6% of their income to make mortgage payments. “Manitoba and Saskatchewan still enjoy the best home ownership affordability in the nation” with just less than 12% of income being used on to service mortgage debt.

The report concludes by saying, “While higher interest rates will clearly erode affordability, our detailed look at the distribution of mortgage payments as a share of income does not reveal major pockets of vulnerability. Accordingly, the most likely scenario is that higher interest rates will lead to a modest decline in prices (probably in the magnitude of 5%-10%) in the coming year or two. But given relatively modest rate hikes and the current balanced affordability position, the more significant adjustment will be in housing market fundamentals that are likely to catch up with prices in the coming years—paving the way for a healthier housing market by mid decade.”

What do you think? Read to full report here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher

Royal LePage Vidorra

The City of Cleveland is suing 21 mortgage lenders for damages that they claim to have incurred as a result of the U.S. sub-prime mortgage fallout. Cleveland Mayor Frank Jackson compares the resulting chaos to “organized crime activity on neighborhoods, cities and individual lives, sucking equity out” and says that city has been devastated by the negligence of lenders who signed off on deals they know they shouldn’t have made.

Cleveland, one of America’s poorest urban areas has seen over 7,000 foreclosures through both 2006 and 2007. In some areas of the city entire blocks of houses are abandoned, boarded up, and stripped of anything valuable. Most often, they ultimately meet a wrecking ball at the tax payer’s expense.

The City is claiming hundreds of millions in damages which result from lost tax revenue, the cost of demolished abandoned homes and the added cost of policing neighbourhoods which have become dangerous due to high rates of abandonment.

Mayor Jackson says, “We have to hold accountable those who are responsible.”

CNN report here.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher Royal LePage Vidorra

There has been a fair bit of talk and speculation about how the U.S. “credit crunch” may impact Canadians and our real estate markets.

The Canadian Real Estate Association (CREA) has published a brochure titled; “A Credit Crunch Primer” which explains in fairly simple terms what sub-prime lending is and how the practices associated with it have impacted the American lending industry and real estate markets across the country.

The brochure also touches on some of the reasons why CREA believes that Canadians are far less exposed to major fallout.

“Unlike the U.S., the Canadian housing market has not been artificially driven by bad lending practices. Our long-term fundamentals are solid. Canada has a growing population. Our energy and commodities are in high demand, and job creation is strong. Consumer confidence remains high. However, there may be an impact on the overall Canadian economy, which may affect the Canadian housing market. For example, the drop in housing starts in the U.S. will mean lower demand for Canadian softwood lumber products.”

I’ve posted a copy of the brochure here.

A tip of the hat goes to Bill Madder, Executive Vice President of the Association of Saskatchewan REALTORS® who sent me a copy of the brochure. Thanks Bill.

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher Royal LePage Vidorra

Doug Elliot, publisher of the Sask Trends Monitor newsletter is warning that consumer spending has “gone into some kind of bubble that’s going to burst.” In a Star Phoenix story titled, “Sask. Consumer spending expected to peak soon” Elliot warns that the big spending spree has to end sometime. He sees that “sometime” looming, perhaps as soon as early 2008.

Elliot notes that massive spending in Saskatchewan is based partly on economic reality to the extent that employment and incomes in the province have increased, but he adds that a variety of psychological factors that are hard to quantify have been encouraging people to spend more money, raising concerns that the level of consumer debt is increasing while savings are decreasing.

One of those factors is related to increasing property values which tend to “make homeowners feel richer and thus more inclined to spend,” says Elliot.

Read also: Your Saskatoon home is not your second income

I’m always happy to answer your Saskatoon real estate questions. 

All of my contact info is here. Please feel free to call or email.

Norm Fisher Royal LePage Vidorra

“While the Bank of Canada elected to leave its key lending rate unchanged at 4.25%, it will likely be the last time the central bank does so for a little while. In acknowledging that both economic growth and inflation has exceeded its expectations, the Bank explicitly stated that “some increase in the target for the overnight rate may be required in the near term to bring inflation back to target.” This statement blows open the door to what we believe will be the first of two 25 basis point increases in the overnight rate starting at the Bank’s next Fixed Announcement Date (FAD) on July 10th.”

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

CNN runs a program on Saturday afternoons called Open House, which touches on topical issues surrounding homeownership. This week’s program carried the title, Open House: Mortgage Meltdown and focused on skyrocketing foreclosure rates across the United States.CNN reported that 1 in 1,000 American homes face foreclosure. Some markets report much higher numbers, like Denver, where 1 in 365 homes face foreclosure actions.

Of course, after several years of aggressive price increases in many U.S. cities, the housing market south of our border took a turn for the worst. The second and third quarters of 2006 were particularly tough and many people saw substantial amounts of their home equity washed away. Some will tell you that the worst is over and year-end numbers seem to indicate that things are turning around but even if it is over, a significant amount of damage remains.I’m hearing stories every day about people who are buried in their homes with a much higher level of mortgage debt than they can realistically sell their homes for. The foreclosure numbers speak for themselves.

In my opinion, one of the biggest contributors to financial hardship is our willingness to continuously borrow against the equity which we’ve built in our homes. The problem is particularly bad in the U.S. where lenders are constantly beating the drum to “cash out your equity,” or “consolidate your debt.”People have financed their homes to the absolute max and in some cases, beyond the property’s resale value. When interest rates creep up as they have in the U.S. it suddenly gets very difficult to manage that debt.

Yesterday, a story published in the Star Phoenix with the headline, Mortgage market robust going into 2007 spoke of all the new mortgage options available in Canada which will “stimulate buying activity in the new year. ”40-year mortgages! Interest-only mortgages! 100% loan to value mortgages! Yay! Most of these wonderful opportunities come with the ultimate risk of living in the poor house. We shouldn’t be looking for ways to slow our opportunity to build equity.

In recent years, Saskatoon has experienced higher than normal appreciation in housing prices. All indicators suggest that this trend will continue for some time. However, we are wise to remember that price increases above the norm don’t often continue forever. At some point, it stops, and often prices will decline after long periods of growth. We would be wise to make every effort to retain as much of our home equity as possible, avoid “cashing out” and other “attractive” financing opportunities that allow us to treat our homes as a source of income, or discourage us from the opportunity to be free of debt.

I'm always happy to answer your real estate questions.

Norm Fisher

Royal LePage Vidorra

The Canadian government has tabled legislation which, if approved, would allow consumers to purchase homes with a minimum down payment of just 20% without any requirements to purchase mortgage insurance. Currently, anyone who purchases a residence with a down payment lower than 20% is required to insure the mortgage against default with the Canadian Mortgage and Housing Corporation (CMHC) or another insurer. An unidentified federal official couldn’t estimate when the change might take effect as the bill must be passed by both the Parliament and the Senate before it becomes law.

For home buyers purchasing a $200,000 home with 20% down this proposed change would net them a savings of approximately $1,600.00, enough to cover the legal costs of the transaction in most cases.

Alan Silverstein, a Toronto-based real estate lawyer and author of several mortgage-related books said, “For people with 20% to put down this is a Godsend. You’ll save a chunk of money.” However, Silverstein went on to warn that it’s possible the cost associated with the savings could be passed on to those who have less money to put down through higher insurance premiums.

John Williamson, federal director of the Canadian Taxpayers Federation says homeowners deserve a break on insurance fees. The CMHC made over a billion dollars last year. It’s time to return some of that money to homeowners.” He said lowering down payment requirements makes more sense than “gimmicks” like 40 year amortizations and zero down mortgages with hefty fees attached.

Norm Fisher

Royal LePage Vidorra