Connect with us

Anglais

What you probably don’t know about renewing your mortgage – National

Published

on

[ad_1]

Around half of Canada’s mortgages are up for renewal this year. If yours is one of them, you’d be justified for feeling blue.

As of Jan. 1, everyone getting or refinancing a mortgage has to undergo a federal mortgage stress test. That, generally, means they have to qualify for a loan with an interest rate that is higher than the rate the bank is willing to give them. If you’re renewing your existing mortgage, you can avoid the stress test — but only if you stick with your current lender, which denies the possibility to shop around for a better rate.

READ MORE: New mortgage rules 2018: A practical guide

On top of that, interest rates continue to climb, which moves the stress-test threshold higher and higher.

But things aren’t as bleak as they may look, mortgage professionals say.

WATCH: Is rent-to-own the solution if you can’t get a mortgage?






You might actually be able to renew at a lower rate

If you have a five-year fixed rate mortgage, as the vast majority of Canadian homeowners do, renewing now doesn’t mean having to switch to a higher mortgage rate. In fact, you might even be able to get a lower rate, according to financial products comparisons site Ratehub.ca.

SIGN UP FOR ERICA ALINI’S MONEY123 NEWSLETTER

The best five-year fixed rate in September of 2013 was 3.29 per cent. Today, you might be able to get a five-year fixed for as low as 3.14 per cent, according to Ratehub data.

A borrower who started out in 2013 with a $400,000 amortized over 25 years would see her monthly mortgage payments drop from $1,953 over the last 5 years to $1,759, a decrease of $194.

READ MORE: Could you pass the mortgage stress test? Here’s how to find out

That’s why you should give yourself plenty of time to shop around for the best rate, according to James Laird, co-founder of Ratehub Inc. and president of CanWise Financial mortgage brokerage.

“Giving yourself a head start on comparing rates also gives you time to consider switching providers,” he said in a statement.

WATCH: Weighing the costs and benefits of reverse mortgages






You will probably pass the stress test

Changing lenders to get a lower rate isn’t in the cards for borrowers who don’t pass the stress test. But Laird said the majority of mortgage-renewal applicants won’t have to worry about that.

“At renewal a borrowers mortgage balance is lower, and it’s likely that the borrowers household income has increased as well. The majority of consumers can expect to pass the stress test at renewal,” Laird told Global News via email.

READ MORE: 3 tips that could save you thousands on your mortgage, as interest rates rise

And even for those who don’t pass the stress test, there may be at least one workaround.

“If you don’t pass the stress test simply because you have a lot of higher-interest non-mortgage debt … and you have sufficient equity in your home, refinancing may be your best play,’ said Rob McLister, founder of rate-comparisons site RateSpy.com and mortgage planner at intelliMortgage.com.

That’s because consolidating your debts into a lower-interest loan might help you “come in under the mortgage industry’s maximum debt-ratio limits,” McLister said.

An application to refinance a mortgage is also subject to the stress test, but some borrowers might be in a better position to pass the test if they refinance than if they simply renew their mortgage, according to McLister.

READ MORE: The deal hunter’s guide to getting the lowest mortgage rate

Refinancing can significantly lower your so-called total debt service ratio (TDS), which measures how much of your income goes toward covering all your monthly debt payments. For example, if you have significant credit card debt at 20 per cent interest and are able to fold that debt into your mortgage at a much lower rate, your monthly payments will shrink significantly, bring down your TDS.

Lenders also look at something called gross debt-service ratio (GDS), the percentage of your pre-tax income needed to pay your housing costs. In addition to the stress-tested (i.e. higher) monthly mortgage payment, your bank will look at the monthly cost of your property taxes or half of your condo fees and your heating costs.

READ MORE: Here’s the income you need to pass the mortgage stress test across Canada

Refinancing your mortgage will increase your mortgage payments, which will push up your GDS. But your GDS will go up much less than your TDS came down, which will likely allow you to pass the stress-test bar, McLister said.

Still, “any spare cash this creates should ideally be applied to your debt principal so you can dig out of your debt hole quicker,” he added.

WATCH: Should you save for retirement or pay down your mortgage as fast as you can?






Variable rates are looking good

Variable rates are also looking better these days than they did in 2013. The average well-qualified borrower can count on variable rates around 2.68 per cent today, compared to 2.75 per cent in September of 2018, according to data from RateSpy.

READ MORE: Here goes another interest rate hike. Time to consider variable-rate mortgages

Also, the spread between fixed and variable rates has been widening, making a floating rate a more attractive option.

“Consumers should consider a variable rate mortgage even in a rising rate environment,” Laird said. “This is particularly true for [those] who have a smaller mortgage balance and/or … who plan on paying down their mortgage rapidly.”

WATCH: How an interest rate hike affects your mortgage






You can lock in a fixed rate four months in advance

If you want to renew with a fixed rate, the bad news is that rates are likely headed nowhere but up.

“Fixed rates move with government bond yields. Right now, those yields are near a seven-year high. There’s a very good chance yields, and hence five-year fixed rates, could break out to the upside,” McLister said.

The good news, though, is that borrowers who need a mortgage within 120 days can lock in a guaranteed rate, he added.

If you’re mortgage is up in the next four months, you should lock-in “tout suite,” according to McLister.

If you’re worried about rising rates, another option is to renew your mortgage before the end of your term.

That, though, comes with a penalty, Laird noted. If you’re considering renewing early, make sure to weigh the trade off between paying those added costs and your expected savings from being able to clinch a lower rate — and note that those calculations will be based on your forecast of how much higher rates will go at your renewal rate.

SIGN UP FOR ERICA ALINI’S MONEY123 NEWSLETTER

© 2018 Global News, a division of Corus Entertainment Inc.

[ad_2]

Source link

قالب وردپرس

Anglais

‘Business as usual’ for Dorel Industries after terminating go-private deal

Published

on

By

MONTREAL — Dorel Industries Inc. says it will continue to pursue its business strategy going forward after terminating an agreement to go private after discussions with shareholders.

« Moving ahead. Business as usual, » a spokesman for the company said in an email on Monday.

A group led by Cerberus Capital Management had previously agreed to buy outstanding shares of Dorel for $16 apiece, except for shares owned by the family that controls the company’s multiple-voting shares.

But Dorel chief executive Martin Schwartz said the Montreal-based maker of car seats, strollers, bicycles and home furniture pulled the plug on a deal on the eve of Tuesday’s special meeting after reviewing votes from shareholders.

“Independent shareholders have clearly expressed their confidence in Dorel’s future and the greater potential for Dorel as a public entity, » he said in a news release.

Dorel’s board of directors, with Martin Schwartz, Alan Schwartz, Jeffrey Schwartz and Jeff Segel recused, unanimously approved the deal’s termination upon the recommendation of a special committee.

The transaction required approval by two-thirds of the votes cast, and more than 50 per cent of the votes cast by non-family shareholders.

Schwartz said enhancing shareholder value remains a top priority while it stays focused on growing its brands, which include Schwinn and Mongoose bikes, Safety 1st-brand car seats and DHP Furniture.

Dorel said the move to end the go-private deal was mutual, despite the funds’ increased purchase price offer earlier this year.

It said there is no break fee applicable in this case.

Montreal-based investment firm Letko, Brosseau & Associates Inc. and San Diego’s Brandes Investment Partners LP, which together control more than 19 per cent of Dorel’s outstanding class B subordinate shares voiced their opposition to the amended offer, which was increased from the initial Nov. 2 offer of $14.50 per share.

« We believe that several minority shareholders shared our opinion, » said Letko vice-president Stephane Lebrun, during a phone interview.

« We are confident of the long-term potential of the company and we have confidence in the managers in place.”

Continue Reading

Anglais

Pandemic funds helping Montreal businesses build for a better tomorrow

Published

on

By

Many entrepreneurs have had to tap into government loans during the pandemic, at first just to survive, but now some are using the money to better prepare their businesses for the post-COVID future.

One of those businesses is Del Friscos, a popular family restaurant in Dollard-des-Ormeaux that, like many Montreal-area restaurants, has had to adapt from a sit-down establishment to one that takes orders online for takeout or delivery.

“It was hard going from totally in-house seating,” said Del Friscos co-owner Terry Konstas. “We didn’t have an in-house delivery system, which we quickly added. There were so many of our employees that were laid off that wanted to work so we adapted to a delivery system and added platforms like Uber and DoorDash.”

Helping them through the transition were emergency grants and low-interest loans from the federal and provincial governments, some of which are directly administered by PME MTL, a non-profit business-development organization established to assist the island’s small and medium-sized businesses.

Konstas said he had never even heard of PME MTL until a customer told him about them and when he got in touch, he discovered there were many government programs available to help his business get through the downturn and build for the future. “They’ve been very helpful right from day one,” said Konstas.

“We used some of the funds to catch up on our suppliers and our rents, the part that wasn’t covered from the federal side, and we used some of it for our new virtual concepts,” he said, referring to a virtual kitchen model which the restaurant has since adopted.

The virtual kitchen lets them create completely different menu items from the casual American Italian dishes that Del Friscos is known for and market them under different restaurant brand names. Under the Prasinó Soup & Salad banner, they sell healthy Greek options and their Stallone’s Sub Shop brand offers hearty sandwiches, yet the food from both is created in the same Del Friscos kitchen.

Continue Reading

Anglais

Downtown Montreal office, retail vacancies continue to rise

Published

on

By

Some of downtown Montreal’s key economic indicators are heading in the wrong direction.

Office and retail vacancies in the city’s central core continued to climb in the fourth quarter of 2020, according to a quarterly report released Thursday by the Urban Development Institute of Quebec and the Montréal Centre-Ville merchants association. The report, whose first edition was published in October, aims to paint a socio-economic picture of the downtown area.

The survey also found office space available for sublet had increased during the fourth quarter, which may foreshadow even more vacancies when leases expire. On the residential front, condo sales fell as new listings soared — a sign that the downtown area may be losing some of its appeal to homeowners.

“It’s impossible not to be preoccupied by the rapid increase in office vacancies,” Jean-Marc Fournier, the former Quebec politician who now heads the UDI, said Thursday in an interview.

Still, with COVID-19 vaccinations set to accelerate in the coming months, “the economic picture is bound to improve,” he said. “People will start returning downtown. It’s much too early to say the office market is going to disappear.”

Public health measures implemented since the start of the pandemic almost a year ago — such as caps on office capacity — have deprived downtown Montreal of more than 500,000 workers and students. A mere 4,163 university and CEGEP students attended in-person classes in the second quarter, the most recent period for which figures are available. Border closures and travel restrictions have also brought tourism to a standstill, hurting hotels and thousands of local businesses.

Seventy per cent of downtown workers carried out their professional activities at home more than three days a week during the fourth quarter, the report said, citing an online survey of 1,000 Montreal-area residents conducted last month.

Continue Reading

Chat

Anglais4 jours ago

‘Business as usual’ for Dorel Industries after terminating go-private deal

Anglais4 jours ago

Pandemic funds helping Montreal businesses build for a better tomorrow

Anglais4 jours ago

Downtown Montreal office, retail vacancies continue to rise

Anglais4 jours ago

Learjet, the private plane synonymous with the jet-set, nears end of runway

Anglais4 jours ago

Brivia Group announces the construction of Phase 2 of LB9 rental condo project

Anglais4 jours ago

With popcorn sales banned, some movie theatre owners say it’s not worth it to reopen

Actualités4 jours ago

À partir de 2025, toutes les voitures de Jaguar seront 100 % électriques

Actualités4 jours ago

Forte augmentation des demandes de remboursement de voyage

Actualités4 jours ago

Le textile reste un fléau pour l’environnement malgré de nombreuses initiatives écologiques

Actualités4 jours ago

L’Agence de mobilité durable et Jalon s’unissent

Actualités4 jours ago

Un village à reconstruire au coeur de Pointe-aux-Trembles

Actualités4 jours ago

Le centre-ville de Montréal continue de se vider

Actualités4 jours ago

Recommandations de la Commission sur les locaux vacants La vitalité du secteur commercial au cœur des priorités de la Ville

Actualités4 jours ago

Un cabinet d’avocats ne peut pas déduire les frais d’un mariage, dit la Cour

Actualités4 jours ago

Financement pour deux entreprises de Dorval et Lachine

Actualités4 jours ago

Les friperies observent une augmentation en popularité

Actualités4 semaines ago

Logo du CF Montréal : quatre experts se prononcent

Actualités4 semaines ago

De nouveaux logements sociaux pour les femmes autochtones à Montréal

Actualités4 semaines ago

Invasion montréalaise !

Actualités4 semaines ago

L’hôtel de ville de Sept-Îles pourrait être détruit

Anglais2 années ago

Body found after downtown Lethbridge apartment building fire, police investigating – Lethbridge

Styles De Vie2 années ago

Salon du chocolat 2018: les 5 temps forts

Anglais2 années ago

This B.C. woman’s recipe is one of the most popular of all time — and the story behind it is bananas

Anglais2 années ago

27 CP Rail cars derail near Lake Louise, Alta.

Anglais2 années ago

Man facing eviction from family home on Toronto Islands gets reprieve — for now

Santé Et Nutrition2 années ago

Gluten-Free Muffins

Santé Et Nutrition2 années ago

We Try Kin Euphorics and How to REALLY Get the Glow | Healthyish

Anglais2 années ago

Ontario’s Tories hope Ryan Gosling video will keep supporters from breaking up with the party

Anglais2 années ago

A photo taken on Toronto’s Corso Italia 49 years ago became a family legend. No one saw it — until now

Anglais2 années ago

Condo developer Thomas Liu — who collected millions but hasn’t built anything — loses court fight with Town of Ajax

Styles De Vie2 années ago

Renaud Capuçon, rédacteur en chef du Figaroscope

Anglais2 années ago

This couple shares a 335-square-foot micro condo on Queen St. — and loves it

Mode2 années ago

Paris : chez Cécile Roederer co-fondatrice de Smallable

Anglais2 années ago

Ontario Tories argue Trudeau’s carbon plan is ‘unconstitutional’

Styles De Vie2 années ago

Ford Ranger Raptor, le pick-up roule des mécaniques

Affaires2 années ago

Le Forex devient de plus en plus accessible aux débutants

Anglais2 années ago

100 years later, Montreal’s Black Watch regiment returns to Wallers, France

Technologie2 années ago

YouTube recommande de la pornographie juvénile, allègue un internaute

Anglais2 années ago

Trudeau government would reject Jason Kenney, taxpayers group in carbon tax court fight

Anglais2 années ago

Province’s push for private funding, additional stops puts Scarborough subway at risk of delays

Trending