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your mid-week mortgage market minute
with Jim Cook, Broker
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in the mortgage marketplace ...
EVERYBODY is talking about inflation this week - and new unemployment numbers - so I think we can skip all of that.  Hey - it's on the way down - expect some really good numbers in the next couple months - so good, in fact, that we may soon see some more fixed mortgage rates declining.  [cue the applause]

Actually, I won't leave this topic just yet.  Some are saying that we should follow a certain European country and exclude shelter costs from inflation - and then everything would be great.  See chart below.  To me, that's a little like saying if we exclude meat from our grocery bills, then they haven't gone up at all (just an analogy).  What that chart does show though is just how much shelter costs are impacting peoples budgets.

Moving On - but not unrelated - we are waiting patiently for the April 16th federal budget.  Why, you ask?  Because sometime before or during, the odds are that there will be an announcement about the return of 30 year amortizations to default-insured mortgages.  While that may not be ideal for long term financial health of folks, it will allow people with smaller down payments to qualify for the larger mortgages needed todays home prices.  If you take an average home price and minimum down payment, moving from 25 to 30 year amortization would require 5% less income - it doesn't sound like much but it does open up a little window.  Housing and affordability are major political issues now as we get closer to a federal election.
rate snapshot ...
I just saw the first crack in rate late today - a whisper/unadvertised special 5 yr for insured purchases at 4.89% and 5.04% for 3 yr insured.  I'm not going to include that in our reference rates below because this lender has unique policies and is well known for selectively undercutting rates and overwhelming their staff to the point that files can take 10-15 business days to be reviewed and underwritten.  But maybe, just maybe, we'll see another lender step up and try and 'buy' some more volume.

If we compare a 5 yr at 4.99 and a 3 yr at 5.14 and assume that rates are 0.75% lower in 3 years, the weighted average is 4.75% over 5 years.  If we only get a 0.5% drop over the next 3 years, that is now 4.85%.  In both cases, we are very close to a 5 yr special currently offered - and if you have the option to renew early on a blend with little more than a phone call, the 5 yr starts to look very attractive!

For properties priced below $1 million, with less than 20% down payment, example rates would be:
  • 1 yr fixed  6.64% or $6.78 per $1k in mortgage
  • 3 yr fixed  5.14% or $5.90 per $1k in mortgage
  • 5 yr fixed  4.99% or $5.81 per $1k in mortgage
For clarity, a $500,000 at 5.09% on a 25 yr amortization would have payments of 500 x 5.87 = $2,935 monthly.

Note also that rates can change daily, certainly differ between lenders and definitely differ based on down payment, mortgage features and hidden costs.
in Jim's practice ...
I'm going to keep this short - the market has risen from it's winter slumber!!

A reminder - the easiest way to refer someone into my office - whether to start the education process, for a second opinion or to aid with a trade-up - is to have them visit chatwithjim.ca and book a phone appointment right into my calendar.

** gmail has a new 'authentication process' and the past two weeks 3M emails were largely ending up in spam folders if your email is hosted within google-verse.  I've changed the email that these appear to be sent from - authenticated that domain - and hopefully resolved the issue. **

We are also working on a new location to archive past and present 3M emails.  Stay-tuned - we should have links/news shortly. 

In future weeks, we are going to start to highlight some of our client processes so you are aware of how things have evolved.

Have a successful week!  
Jim was incredible to work with from start to finish. He was very punctual in replying to all questions throughout our home buying process. His detailed video breakdowns really helped us understand all possible options with respect to mortgage term and the corresponding interest rates. 

(JL, Apr 2024)
chatwithjim.ca

the best place to refer clients to get questions answered quickly!  No Phone Tag.  They book directly into my calendar to schedule a call!
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Jim Cook is a nationally-recognized broker with some quarter billion in mortgages funded. 
www.mymortgageplace.ca          519-832-7882            chatwithjim.ca
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