update - beam me up scotty

as the year draws to a close - we have seen the prime rate drop over the past few months as central bankers try to keep the entire financial system of the world -liquid.
We have seen the market slow down and i have seen many people in financial trouble before Christmas - this is very unusual - we dont normally see the 'cracks form until after january or february visa and mastercard bills hit the mail'
it will be a difficult winter - hunker down and stay tuned
until then
Have a Happy New Year and remember the sun will come up tomorrow - no matter what happens...
i am here if you need help or to chat

greygoose out...where are the olives ?

mayhem in october

as we near the end of october - we have seen market panic. Interest rates in Canada for the variable (floating) rates have moved from prime -1% to prime plus 1% and then the bank prime has dropped 3/4 of a percent....but really they have increased by 1.25% thus increasing the bank spreads.
fixed rates have increased by approximately 50 bp....the canadian banking system is in much better shape than many other countries, but we will not escape this mayhem.
the question remains..in the long term will consumer demand drop and cause deflation or will the massive amounts of money from the US treasurey cause inflation....that is the trillion dollar question as there are no more million or billion dollar questions - they are too small.

mortgage mayhem

the US mortgage market has come apart - and congress is now trying to negotiate a 700 billion dollar bailout - this may stabilize the market for a short time but will it work for the long run ?
the entire world will be affected - rates will rise but they cannot skyrocket - or the economies will stall and a major recession will occur.
try to payoff debts - refinance to reduce monthly outlay - will keep in touch
greygoose out.

govt steps in to chage canadian mortgage market

very interesting
the government has changed the lending regulations for insured loans as of October 15th
they are eliminating 100% financing and requiring a minimum 5% downpayment (no clarification yet on whether clients can still borrow the 5%)
reducing the amortization from 40 years to 35 maximum
adjusting the maximum ratio for qualifying to 45% of gross income (still too high in my opinion)
this is all a function of the US spillover - we certainly live in interesting times

greygoose out.....

steady as she goes

interest rates are holding relatively steady - but the major lenders are playing games. they will give you a pre-approval which is generally a higher interest rate than if you were actually purchasing or refinancing.
then they will give you a better rate 30-45 days prior to closing for 'real' transactions.
what is the downside ? - if you are renewing or looking to lock into a fixed rate from a variable or floating rate - you will likely get a higher interest rate than the lenders very best rate because they are keeping their' 'posted discount rates' higher.....instead of 5.15-5.29 you would likely get 5.39-5.49% - oh the games they play to try and take advantage of the consumer....

down down down..but for how long ?

the bank of canada dropped their target rate by .50% this week - but the major chartered banks took approx 8 hours to follow suit. It would appear the major banks are trying to signal to the bank of canada - they do not want to drop rates any further - which tends to go along with my conspiracy theory - which says banks hate lending money below 6%.
the spreads on the bankers acceptance puts the current variable rate mortgages into a negative position - and the lenders are saying they must cut the spreads on the variable product.
they have already dropped from prime less .90 to prime less .60 as an average and it will likely drop further to prime less .25 - 40....which is likely a more reasonable spread. The banks got themselves into this mess by constantly trying to out do each other and increasing the discounts until they werent making any money...at least thats what they say.
now is likely still the time to take a variable product with a front end load over 6-12 months - but keep your eyes on the 5 year mortgage rates - currently around 5.50%..if they start moving up lock in and as they say in the movies.....forget about it......

rates come down - update since March

Well we returned from the Masters - won by Trevor Immelman - as usual it was a great week.
we returned to see that most of the mounds of snow had disappeared - it looks like we will fall approximately 8cm short of the record.
interest rates are still softening on the short end - bank prime is 5.25 and likely to fall another quarter to one half of one percent this week.
the 5 year money is 5,29-5,49
lenders are playing interesting games by giving a bigger discount within the last 30 days - thus mortgage approvals are being switched between lenders 120 -90 - 45 - 30 days prior to closing.
never a dull moment.
it still appears we are heading for a recession - i still think the average consumer has far to much debt and will be forced to consolidate to survive within the next year.
time will tell
greygoose out.

long time no blog

its been approximately a month since my last blog.
interest rates have continued to soften
currently lenders a giving bigger discounts for quicker closings - which reduces their costs of hedging any positions.
5 year money closing within 45 days - currently 5.39
5 year money closing within 30 days - currently 5.25
5 year money closing within 120 days - currently 5.69-5.74
prime has dropped 1/2 and will likely drop another half - inflation continues to pick up - eventually rates will bounce back - but for now - ride the wave

greygoose out

bed race complete

as this year's 90th President of the Kiwanis club of Ottawa - i was participating in the Bedzz race on the Rideau Canal yesterday - it was a great day with 39 teams pushing modified hospital beds down a 100 metre course on the frozen Rideau Canal. it would appear we raised over 40K for the Kiwanis Club of Ottawa - sponsored youth programs like our Read a thon which in 6 short years has reached 223 schools world wide in 11 countries and over 50,000 children per year.
Interest rates are dropping the cracks are forming in the wall posted by the major lenders - they are now starting to compete for business by dropping their rates - but is it interesting many are refusing to provide the best rates for their pre-approvals, why ?...because there is work involved and many do not become solid transactions - so they are only providing the best rates when people actually have a property to finance...rates are as low now as 5.49% for 5 years...and i still think they will continue down into the spring...
call us if you want to purchase or refinance
greygoose out....613-563-5083

roller coaster ride

isn't it amazing how one headline can change the perception of 'so called' investors
The US data comes out and once again a report outlines 'US heading for a Recession'
the stock market tanks and people panic.....welcome to reality - as Tim McGraw says in his song..i'm already there..take a look around......
the recession is upon us - the markets are slowing - rates will drop - and the world will not come to an end.
For now - take the floating rate
the 5 year dropped today below 5.79 - we actually have a quick close of 5.65%
and 4 year money below 5.50%.....stay the course unless you are nervous....rates will come down some more .....

greygoose out

groundhog day -2008

tomorrow morning it will be groundhog day. the snow keeps coming down and it looks like we will be under a blanket of 30cm by the time its over. But it reminds me of the movie.....
it will be deja vue all over again as yogi berra would say.

interest rates are dropping slightly - the press is becoming slightly less negative - i still believe its time to take a floating interest rate of say prime less 1% for a year and ride the wave until we hit bottom on the 5 year term - which i believe will be below 5.50
time will tell - in the mean time - the best option is refinance the equity in your home and eliminate credit card and other debts - cash is king- but cashflow is checkmate......

greygoose out

spreads increasing

Isnt it interesting - if you read the newspapers - all you see are doom and gloom headlines.
Subprime this, subprime that - writeoffs, job layoffs, slow down - all the words that cause people to 'turtle' - pull in their feet and huddle in their homes...a slow down is coming - it will be self fulfilling.
but as i look at the market an interesting phenomena is unfolding
the 5 year govt bond rate is approx 3.4% and the discounted 5 year mortgage rate is just shy of 6% - this is a spread of 2.6%
this tells me lenders are making huge profits - they say money is hard to get - and they have to pay higher yields to investors - but i dont see it my world - traditionally the spread should be approx 1.6% so i would think 5 year money should in the range of 5%...will lenders drop rates ?
I dont thinks so - they will drop the prime rate (variable or floating rates) and keep the fixed rates high.. then when the floating rates move up - people will panic and jump to the higher fixed rates..i saw this before in the 80's...what goes around comes around...

greygoose out.....

HAPPY NEW YEAR - 2008

2008 - wow how time flies - this June will mark my 30th anniversary in the mortgage market. Times sure have changed - and unfortunately now, the consumer is being told to use mortgage brokers then go back to their institutions for matching - this is frustrating since we do the work and the lender - knows its approved so they match the rate and scoop the file. It would appear that simple common decency is disappearing in our society - certainly a shame.
In any event - rates rose prior to Christmas on the fixed side from 5.79-to as high as 6.14 for 5 year money. Is this to slow the Christmas rush and allow lenders to drop rates back to where they were and look like heroes in the new year ....??? time will tell.
gold is skyrocketing - oil is skyrocketing the US dollar is sinking - nothing lasts forever but dont stand in the way of a runaway train. If you have debt call us to reifnance, lower payments and batten down the hatches - now is the time to plan to reduce your debt levels

greygoose out.........