Because the mainstream media can often mislead borrowers with its doom-and-gloom headlines regarding the Canadian housing and mortgage industries, as well as consumer debt, it’s important to get the facts straight from the mortgage brokering industry.

The Canadian Association of Accredited Mortgage Professionals (CAAMP) released a new report in mid-February on employment impacts of housing and related mortgage activity that describes the impact of jobs in Canada related to the housing and mortgage sector.

The Canadian housing economy is safe and stable. At the peak of the US housing boom, approximately 20% to 25% of all US housing sales were for investment purposes. In contrast, CAAMP estimates that only 2% to 3% of Canadian home sales nationally are investment properties. The reason why this is important is that lenders assume borrowers will pay the mortgage on their primary residence ahead of any investment properties.

The latest CAAMP report also shows that home equity is growing rapidly, and Canadian mortgage holders are repaying their mortgages more quickly than is required. This is great news as, not only are Canadians paying less overall interest throughout their courses as mortgage holders, but they’re also becoming mortgage-free faster as a direct result.

The biggest threat to the health of the Canadian housing and mortgage industry is a recession that results in job losses. The best way to

support the housing and mortgage industry, and to sustain its positive impact, is to pursue policies that continue to create jobs.

At the same time, it’s important that qualified buyers have choice when seeking mortgages to finance or refinance their homes. The mortgage brokering industry offers more choice to borrowers than any other channel – including bank branches and bank mobile mortgage specialists – as brokers have access to multiple lenders (banks, credit unions, trust companies, etc) and can truly match each borrower with the ideal mortgage product and rate catered to their unique needs.

Housing sector major economic driver
There’s no doubt that the Canadian housing sector is a significant economic driver for our country. In fact, housing and mortgage activities create significant employment in Canada. They could account for more than 1.35 million direct and indirect jobs (about 8% of total Canadian employment).

The housing and mortgage industry has been particularly important to job creation over the past five years. From 2006 to 2011, it’s estimated that 18% of all job creation occurred as a direct and indirect result of growth in the housing and mortgage sector.

Rising home values lead to greater consumer spending and, therefore, a stronger economy. CAAMP estimates that rising home values from 2006 to 2011 have led to $17 billion in additional economic activity, or about 1.2% of total gross domestic product (GDP) in Canada.

Click here to read the entire CAAMP report.

 From:   Sandi & Heather, AMP Mortgage Specialists

           Dominion Lending Centres West Coast Mortgages

           Phone: 604.805.2080   sandiandheather@dominionlending.ca    http://www.greatratescanada.com/

Regardless of how long you’ve had your mortgage or how large or small the current balance is, there are a variety of ways to make prepayments work for you to pay down your mortgage faster and, therefore, pay less interest throughout the life of your mortgage.

After all, each extra payment amount will reduce your principal balance, which, in turn, reduces the amount of interest you’ll have to pay on your borrowed mortgage amount.

Most lenders allow you to make a lump-sum payment of anywhere between 10% and 25% of the value of your mortgage per year. The lump-sum payment is based on either the original amount you borrowed or the amount currently outstanding. Since mortgages decrease with each payment, it’s best to negotiate a lump-sum payment option based on the original amount you borrow. That way, if you come into an inheritance, a bonus or save some extra money, you can pay down the largest amount possible.

Another factor to consider is when you can make a lump-sum payment. Some mortgages allow prepayments throughout the year, while others permit them only on the anniversary date. Still others allow you to make prepayments on the day you make your regular payment.

If you can’t pay the maximum prepayment amount, it’s still worth your while to at least make some form of extra payments, even if it’s

a few thousand dollars each year. That will still save you thousands of dollars in interest payments throughout the life of your mortgage.

Another prepayment option involves taking advantage of flexible payments. Most lenders allow you to increase your regular payment up to a set maximum, such as 15%, while others allow you to double up your payments.

If, for instance, you have a $1,000 per month mortgage payment and increase it by 15% to $1,150, you could shave off as much as five-and-a-half years on a $200,000 mortgage.

Even rounding up your mortgage payments a few dollars each payment can help make your balance decline sooner. If you round up your mortgage payment from, say, $766 to an even figure such as $800, you can feel confident in knowing that every extra bit goes toward your principal.

You can also pay off your mortgage faster by moving to a different payment schedule. Instead of making monthly payments, make them biweekly or even weekly. Using an accelerated mortgage payment plan – where you make payments every two weeks as opposed to twice a month – you actually make one extra payment each calendar year. By paying more and paying faster, you reduce your principal earlier, which lowers the amount of interest you pay.

If you have questions about paying your mortgage off quicker, or other mortgage-related questions, contact Sandi 604.805.2080!

 From:       Sandi & Heather, AMP Mortgage Specialists

               Dominion Lending Centres West Coast Mortgages

               Phone: 604.805.2080   sandiandheather@dominionlending.ca    http://www.greatratescanada.com/