A Mortgage Broker in Canada is a professional educated and trained to represent you, the borrower in obtaining financing from a variety of lending sources. In most Provinces, Mortgage Brokers are required to be licensed – which involves a strict process and educational requirements.
Kelowna, BC -- (SBWIRE) -- 01/29/2014 -- By accessing numerous source lenders including Chartered Bank, Trust Companies, Credit Unions and private lenders, Mortgage Brokers in Canada are able to find the best rates on mortgage products available. Mortgage Brokers deal with the bank at what could be considered the wholesale level, versus a branch of a bank at a retail level. This means Mortgage Brokers can access interest rates at well below the posted (or retail) rates.
What’s more, they have the knowledge required to present an application for financing to a lender in the best way possible to successfully obtain the mortgage. They also have access to many different products that will ensure the financing is customized to meet the needs.
Canadian mortgage holders have told the Canadian Association of Accredited Mortgage Professionals (CAAMP) in its fall 2013 survey that they are comfortable with their mortgage debt levels and consider mortgages to be a form of "good debt." The Annual State of the Residential Mortgage Market in Canada report, released today, was authored by CAAMP Chief Economist Will Dunning.
This level of comfort may be due to the fact that Canadians believe they are in control of their mortgages: taking aggressive actions to pay them down, leveraging their equity to consolidate debt or make new investments, taking advantage of low interest rates and increasingly turning to mortgage brokers rather than major banks for their mortgage needs.
"Consumer confidence in the mortgage market remains high, especially among people who have owned homes for a longer period. Consumers are paying off their mortgages faster, selecting five-year fixed term rates and agreeing that real estate is a good long-term investment," said Jim Murphy, AMP, President and CEO of CAAMP.
The report also covers the role housing has played in Canada's recovery from the 2008/2009 recession, and while it paints a generally healthy picture of the mortgage market, Dunning believes that the current sluggish economy is related to what he sees as a weakening housing market, brought on, at least in part, by the tightening of mortgage insurance rules in summer 2012: "The economic impacts have not been fully felt," said Dunning. "Resale market activity has been reduced but the adjustment to housing starts has barely begun." He projects that by 2014 we could see a 12 to 17 per cent reduction in starts compared to 2010 to 2012.
Broker share in the market
Canadians turned to mortgage brokers when shopping for a mortgage in increasing numbers. The broker share of the business is up from 25 to 28 per cent since last year. Among all new mortgages obtained this year, 40 per cent were through a mortgage broker and 42 per cent from a bank. In dollars, this represents about $55 billion for the mortgage broker channel.
The survey indicates that recent purchasers (those who purchased a home as recently as the 1990s) are more likely to take steps to shorten amortization periods than those who purchased a home earlier. In the past year, 38 per cent of Canadians took actions to help accelerate their repayments, including making lump sum payments, increasing the frequency of repayment or increasing the amount of each payment.
Among mortgages that have been repaid over the past two decades, actual repayment periods were 30 per cent shorter than original contracted periods.
Canadians continue to buy homes, view mortgages as "good debt"
Canadians have continued to demonstrate confidence in the Canadian housing market, with 57 per cent of home purchases in 2013 coming from first time buyers. This is in line with the overall feeling among 68 per cent of Canadians that mortgages are a form of "good debt."
In fact, this "good debt" is helping Canadians with other forms of debt. Currently, more than 80 per cent of Canadian homeowners have equity ratios of 25 per cent or higher. In the past year, 11 per cent of homeowners have taken out equity, which they are using to consolidate other debts (28 per cent) and make other investments (26 per cent).
The report, Annual State of the Residential Mortgage Market in Canada, is a semi-annual review of the Canadian mortgage market authored by Dunning. The report is based on information gathered by Maritz Research Canada in a survey of more than 2,000 Canadian consumers in October 2013.
About Kelowna Mortgage Broker
Origination is a Kelowna Mortgage Broker serving customers all across Calgary Canada
Mortgage Brokers represent you, the Borrower and not the lender.
In some cases, a borrower may not qualify for a traditional mortgage due to high debt, questionable credit, or other concerns conveyed by the lending institutions.
In these cases, Mortgage Brokers have access to alternative sources of funds, but there may be a fee which must be paid by the borrower, however these fees are completely disclosed by the Broker before you decide to complete the financing.
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