How to apply for a deposit loan: Ontario

Applying for a deposit loan in Ontario can be very simple! Tembo Financial is able to give you the funds you need for a deposit on a new purchase while your home is on the market or already sold. 

Applying for a deposit loan requires few documents, making the transaction quick and easy, enabling you to secure your new purchase. 

Tembo Financial can help those who have listed their homes, and those who have sold already. When applying for this type of loan, there are rarely credit checks or appraisals done to the home. 

Tembo Financial also offers options in which the sellers do not have to make any monthly payments and only repay the loan upon the closing date of the sold property! 

If you are planning to sell your home this summer or know anyone that is, reach out to Tembo Financial to see how you can qualify for a quick and easy deposit loan! 

How to Stop Power of Sale: Ontario

If you are currently in a situation in which your mortgage lender is putting you through power of sale, read this blog to see the easy steps to take to stop your power of sale and sell on your own terms. 

At Tembo Financial we are able to buy out the mortgage that is putting you through power of sale. Once we do this, we allow the home owner to put the home up for sale on their own terms, so that they can get the most out of their property. 

Stopping power of sale and selling on your own can help you increase the amount you will be able to take away from the sale, and take away the stigma attached to selling under the terms of power of sale. 

By taking the mortgage from Tembo Financial, we do not require any monthly payments (subject to approval) which will help give you the time and recourses you need to sell your home on your own terms! 

Take away the stress of a lender putting you through power of sale and speak to Tembo Financial to see if this option suits your needs! 

 

How COVID-19 is beginning to change home buying and reno. trends

FOX Business U.S.A. recently released an interesting article discussing some of the latest COVID-19 inspired housing purchasing and renovation trends in the U.S. Tembo safely assumes that underlying consumption shifts in Canada will mirror those of our closely tied southern neighbours.

The big uptick has been the growing interest in new construction homes, which were up 73% from 2019 levels. There was also a 35% increase in new home designs and a desire for new floor plans in homes compared to 2019 levels. The article showed that people are turning to new construction designs and overhauls of floor plans to avoid combined spaces. The verdict appears to show that combined kitchens, living rooms, and dining rooms especially are far too ‘noisy’ to do work in. There is a growing demand for more rooms and a greater degree of enclosed space. 

The new premium is on quiet, enclosed spaces allowing for greater privacy. People appear to have had enough of working from homes with huge spaces completely visible to their colleagues and coworkers. A quiet, enclosed room is also increasingly being seen as important to house a gym at home, or to simply escape the noise of spouses or kids going at it on Zoom.  Renovators are also reporting that people are increasingly touching base to remodel open concept areas. The open concept was popular for many years as a way of increasing flow, conserving space, and increasing the amount of natural light going into a space. It appears this trend is beginning to die out. This trend, if it pans out and transfers to the GTA, would likely increase the demand for more affordable homes with more space in the suburbs and small towns. People are also likely to turn to their basements for remodelling, putting up walls, and providing for extra space that’s cool and quiet.

Another big trend outlined in the article is that COVID-19 did nothing to hamper overall home improvement, remodelling, and renovation activity. In fact, the statistics show that visits to Home Depot and Lowe’s locations went up by 6.4 and 11.2%. Purchases for home improvement and renovation items rose by 71% on sites like Amazon and on Walmarts online platforms according to market data. People invest and take care of their homes, even in the midst of a historic economic shutdown and pandemic. The trend of renovating and increasing demand for enclosed spaces does not bode well for condos. While demand for them will remain healthy due to their general affordability, young professionals will now have a very powerful incentive to work from home in houses well away from downtown cores. Cheap, detached homes in the exurbs and suburbs are likely to become hot commodities. 

Mortgage rates are so, so, so low

Tembo has never seen the big banks offer mortgage rates this low. Ever.

Well before the COVID-19 crisis, mortgage debt was at absolute rock bottom historic lows, now we are seeing those rates dip even further down. A quick glance at ratehub.ca
Ratehub.ca: Compare Mortgages and Personal Finance Products
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ratehub.ca
is telling:

Provider 5-YR Variable 10-YR Fixed
TD Bank 2.05% Prime – 0.40 3.25%
Scotiabank 2.05% Prime – 0.40 3.39%
Bank of Montreal 2.25% Prime – 0.20 4.09%
RBC Royal Bank 2.40% Prime – 0.05 5.95%

A five year fixed rate mortgage from TD at 2.37% is an extremely good deal, and would weather a buyer from half a decade of uncertainty – whether good or bad. In some ways, the COVID-19 has brought with it a few positives in that the further lowered rates now translate to lower monthly payments for people. If prices hold steady or rise modestly, this will be a net positive. If they decline modestly over the next two years, we will see homeownership switch over to more fiscally prudent buyers, or increase slightly overall.

With rates so low, the only way to make housing genuinely more affordable is to massively increase supply – but as we’ve pointed out many times, there are a huge bevy of factors which prevent this. Consider that compared to the United States, mortgage rates in Canada are still significantly higher. A fixed rate, 30 year mortgage with Wells Fargo can be had at a mortgage interest of 3%. In America, 15, 20, and 30 year stretched out fix rate mortgages are the norm. Rates are almost always lower in the U.S., and qualification is easier than in Canada. Housing prices in the U.S. are also markedly lower – a sidenote, but interesting comparison of debt affordability.

Considering a small, starter purchase in a small town well outside of Toronto at $500K, with a 20% down payment ($100K), a 5 year fixed rate mortgage at 2.37% would cost the homebuyer(s) just over $2K a month, not including any insurance, or property taxes. The best rate for a mortgage Tembo could find on ratehub was a 5 year fixed mortgage with CanWise Financial at 1.99%. A 5 year variable mortgage comes in at 1.75% at CanWise, less than inflation. Consider that if the Bank of Canada lowers rates further, we could see even more affordable mortgage costs.

The CMHC makes a tough prediction

The federal housing agency released a special edition Housing Market Outlook report on Jun 23rd. The
report is real, honest, and raw, it ignores the stability we still see in the market and makes a tough but not at all improbable series of assessments for the next two years of Canadian real estate.
At heart, the report suggests that declines in prices are on their way, and should kick in later in 2020. This is in line with the September to October difficulties for the market many realtors are predicting (the period where mortgage deferrals will end, and people will have to service their mortgage debt again). The report believes 2021 will be a hard year for real estate across the country, and predicts that we will only see a full return to normal in 2022. 
On a positive note, the report believes that house prices in Toronto, Montreal, and Ottawa have stronger underlying fundamentals and will recover faster than other major urban areas in the country. Toronto with its strong economy and immigration hub, Montreal with its affordability, and Ottawa with the stability of plentiful public sector employment all serving as pillars of strength and potential resilience. The report is bearish, however, on Edmonton and Calgary. The pain Alberta is going through right now is deep, real, and pervasive. Oil prices are not high enough, product can’t get to market, Fort McMurray remains hard hit by fires, and commercial vacancy rates were already sky high before the onslaught of COVID-19 made everything far worse. Vancouver had the highest real estate prices in the country, so it’s fall has been more severe. British Columbia’s largest city will be at the mercy of international capital flows and the policies of its provincial government, and commodity prices. The city’s economy is dependent on trade, travel, and exchanges of ideas and people, and all of this activity has been cut off due to the disease.
The big question remains how quickly jobs and cash flow can return to the economy by the fall. No one can predict this. The CMHC is predicting, however, that the average home price in Toronto could decline to $825K in the Fall, falling to a further range of $739-840K by Fall of 2021. The agency believes that this dip will upsurge again to $880K two years from now, in the Fall of 2022. As of now, as we’ve reported, people keep buying, prices are holding firm, and activity in Toronto and especially Durham Region are reasonably healthy. 

How to Apply For a Deposit Loan: Ontario

Applying for a deposit loan in Ontario can be very simple! Tembo Financial is able to give you the funds you need for a deposit on a new purchase while your home is on the market or already sold.

Applying for a deposit loan requires few documents, making the transaction quick and easy, enabling you to secure your new purchase.

Tembo Financial can help those who have listed their homes, and those who have sold already. When applying for this type of loan, there are rarely credit checks or appraisals done to the home.

Tembo Financial also offers options in which the sellers do not have to make any monthly payments and only repay the loan upon the closing date of the sold property!

If you are planning to sell your home this summer or know anyone that is, reach out to Tembo Financial to see how you can qualify for a quick and easy deposit loan!

Tough as Nails

A story in the Toronto Sun caught Tembo’s eye. The topic? The resilience of Toronto real estate against historically unprecedented odds.
Brynn Lackie, a Toronto Sun reporter, titled their piece in a June 14th op-ed: “Pandemic puts strength of T.O. real estate market on display.” One of the paragraphs was telling: 
 
“Even with less than half of the inventory, the average sale price for the GTA has risen 3% from the same month last year. That means that even with a global pandemic, turmoil in the economy, record unemployment, and an industry shutdown to contend with, the Toronto real-estate market has held. Some analysts suggest that this is further proof of its seemingly eternal strength and resiliency.” 
Another article from Move Smartly, a real estate site, was titled “How is Toronto Real Estate Hot With Unemployment at 14%?” The article shows a powerful graph that outlines the fact that sales are rising every day, and that they will reach levels which would leave them even in June 2019 terms (i.e. no change).  In late May CTV (one of many such reports) outlined that despite all of the COVID-19 related challenges, prices in the GTA continued to increase. The article cited stats on Toronto and GTA condo prices rising above inflation. The same article showed that while sales were falling, demand for existing stock was high.
As of now there are effectively no restrictions on any type of construction related economic activity. Realtors can continue plying their trade but should be following guidelines that the province worked out with the industry and health associations. The media Tembo has analyzed and the data we’ve crunched points to sales having falling but now being in the process of recovery. Demand for housing is strong and the stock of available houses is low, so despite all of the difficulties unleashed by the pandemic, fundamentals are strong.
With more reopening on the way, and interest rates to remain extremely low for years to come, we predict continued strength in housing. People should be confident and optimistic. 

What is a Third Mortgage?

Much like we defined a second mortgage in a previous blog post , a third mortgage is one that comes after the first and second charge on a home.

Generally, third mortgages are rare, but they are not impossible to get. Tembo Financial provides third mortgages throughout Ontario for clients that are looking for extra money, and are not able to get it with their first and second.

The difficult part of a third mortgage is obtaining insurance on it. Insurance companies have the ability to either deny or allow the third mortgage to be in place.

When should you consider a third mortgage loan?

For some clients, having a first and second mortgage is only enough to cover their costs and needs for a certain amount of time.

Tembo Financial can give you a third mortgage if your LTV (loan to value- explained in a previous blog post found here) is low enough, or if you are planning on selling your home and are in need of money for renovations before listing for sale, or a deposit on a new purchase.

Speak with us at Tembo Financial to find out if a third mortgage is right for you.

How to choose a mortgage lender

A mortgage is a large transaction that and a commitment that you must make. 

It is important to choose a lender that is right for you! 

Here are some tips in choosing the right lender for your lifestyle: 

  1. Choose someone you trust:as we have said, this is a large transaction that you will have for a long time. Choose a lender you are confident in and that has your best interest in mind
  2. Select the right mortgage type: There are plenty mortgage structures available to you. Be sure to choose one that is right for you. 
  3. Do your research! There are tons of options for getting a mortgage. If you are self employed, it will be harder to qualify for a traditional bank loan. Once you have done your research, you will learn that there are private lenders that may help you. The more you understand about your loan the better the decision will be for you! 

Speak to someone at Tembo Financial if you are looking to get a mortgage and need any advice! We are here to help guide you through this transaction and tailor a situation that best fits your needs! 

We are moving to Phase 2!

After many months the Ontario government has finally announced that it is getting people back to work and opening more recreational activities  by moving forward with a regional approach to Stage 2 of reopening the province. 
In close consultation with the Chief Medical Officer of Health and local health officials, the government will ease restrictions in communities where it is safe to do so, based on trends of key public health indicators such as lower rates of transmission, increased capacity in hospitals, and progress made in testing. This will kick in effective Friday, June 12, 2020 at 12:01 a.m., in addition the province will increase the limit on social gatherings from five to 10 people across the province, regardless of whether a region has moved to Stage 2. Additionally, all places of worship in Ontario will also be permitted to open with physical distancing in place and attendance limited to no more than 30 per cent of the building capacity to ensure the safety of worshippers. 
On June 12th, Stage 2 will apply to the following regions:
  • Algoma Public Health
  • Brant County Health Unit
  • Chatham-Kent Public Health
  • Eastern Ontario Health Unit
  • Grey Bruce Health Unit
  • Haliburton, Kawartha, Pine Ridge District Health Unit
  • Hastings Prince Edward Public Health
  • Huron Perth Public Health
  • Kingston, Frontenac and Lennox & Addington Public Health
  • Leeds Grenville & Lanark District Health Unit
  • Middlesex-London Health Unit
  • North Bay Parry Sound District Health Unit
  • Northwestern Health Unit
  • Ottawa Public Health
  • Peterborough Public Health
  • Porcupine Health Unit
  • Public Health Sudbury & Districts
  • Region of Waterloo Public Health and Emergency Services
  • Renfrew County and District Health Unit
  • Simcoe-Muskoka District Health Unit
  • Southwestern Public Health
  • Thunder Bay District Health Unit
  • Timiskaming Health Unit
  • Wellington-Dufferin-Guelph Public Health
The following changes will kick in with the implementation of Stage 2:
  • Outdoor dine-in services at restaurants, bars and other establishments, including patios, curbside, parking lots and adjacent properties;
  • Select personal and personal care services with the proper health and safety measures in place, including tattoo parlours, barber shops, hair salons and beauty salons;
  • Shopping malls under existing restrictions, including food services reopening for take-out and outdoor dining only;
  • Tour and guide services, such as bike and walking, bus and boat tours, as well as tasting and tours for wineries, breweries and distilleries;
  • Water recreational facilities such as outdoor splash pads and wading pools, and all swimming pools;
  • Beach access and additional camping at Ontario Parks;
  • Camping at private campgrounds;
  • Outdoor-only recreational facilities and training for outdoor team sports, with limits to enable physical distancing;
  • Drive-in and drive-through venues for theatres, concerts, animal attractions and cultural appreciation, such as art installations;
  • Film and television production activities, with limits to enable physical distancing; and
  • Weddings and funerals, with limits on social gatherings to 10 people.