Wednesday, April 30, 2008

Is a Recreation Property Right For You

Whether it’s called a cottage, a chalet or a
country house, the lure of a recreation property far
from the hustle of the city is too much for many of
us to resist.
As Baby Boomers get ready to retire, they’re
driving up interest in these properties – especially
with the attractive financing options available for
second homes. If a recreation property is on your
radar, here are some important questions to ask
yourself before you make the leap:
How would a recreation property impact
my lifestyle?
Consider how a recreation property would fit into
the lifestyle you envision for you and your family –
both the benefits and the drawbacks. In addition to
the fun and leisure aspects of a recreation property,
you’ll also need to factor in the time and cost
involved in year-round property upkeep.
Can I afford the purchase price and/or
a mortgage?
You want to ensure you can afford not only the
purchase price or mortgage, but also the ongoing
– and often unexpected – expenses that are an
inevitable part of home ownership. Work with a
mortgage broker ( Larry Broadley )to fully assess your recreation
property ownership options. Many brokers and
lenders offer specialized services and mortgage
products specifically for second homes.
How far am I prepared to travel?
Peace and quiet often come with a price: distance.
Be realistic about the time you are willing to commit
to travel to and from your recreation property. You
may even want to take ‘test drives’ on busy weekends
to determine travel times during peak season.
Who should I call?
As you would with a primary property, call a
professional real estate agent ( also Larry Broadley )who knows the
region where you would like to buy, and work
with your mortgage broker to secure financing to
determine what you can afford before you begin.
For more information contact :

Larry Broadley Mortgage Broker Mortgage Intelligence and Real Estate Broker RE/MAX Bluewater Realty

1 877 338 5899

Central Office: 3300 Bloor Street West, Centre Tower, 9th floor, Suite 2900, Toronto, ON M8X 2X3 ® Registered trademark of Mortgage Intelligence Inc. © Copyright 2008, Mortgage Intelligence Inc., all rights reserved.

RE/MAX Each office is independently owned and operated

Monday, April 14, 2008

Relax. Your cottage by the lake
isn’t just a dream

As you breathe in that deep breath of fresh air you know you’ve found that idyllic spot where you’ve always dreamed of spending your golden years. It’s the perfect cedar-shingled cottage right on the lake, where you can relax and enjoy the company of family and friends. Like a growing number of Canadians in their peak income years, a vacation property has always been part of your retirement plan and now that you’ve found it, only one step remains; financing it.
In the past, financing for a recreational property
has been more challenging than for a principal
residence, as traditional lending institutions have
found second homes to be a less than desirable
investment. With today’s booming recreational
property market, however, Canadians longing for a
summer, winter or all-season retreat are finding they
have other options.
A growing number of Canadians are factoring a
vacation property into their retirement planning.
While recreational property mortgages are still
relatively new to the market, they can provide
Canadians with an easy and affordable way to
make that cottage, chalet or retreat a reality.
A recreational property mortgage can help qualified
homebuyers make that beach sunset or ski chalet
possible with as little as 5 per cent down. Whether
a homebuyer is purchasing a waterfront home,
resort-style condominium or timeshare property, this
type of product can provide a mortgage on an
owner-occupied second property located in a known
vacation area. To make qualification even easier,
this product can also function as a blanket mortgage
utilizing a principal residence as additional collateral.
Vacation properties are more than just a financial
investment for most Canadians. They quite often
become the spot where families come together.
By visiting a Mortgage Intelligence agent,
Canadians can get the financing they need to realize
their vacation.
Central Office: 3300 Bloor Street West, Centre Tower, 9th floor, Suite 2900, Toronto, ON M8X 2X3 ® Registered trademark of Mortgage Intelligence Inc. © Copyright 2007, Mortgage Intelligence Inc., all rights reserved.
Larry Broadley
Mortgage Consultant
519 238 5899 of TF 1 877 338 5899

Wednesday, April 2, 2008

Have you heard about 40 year mortgages and their effect on fueling the Housing and Cottage Market? The following article by Ellen Roseman in the April 2nd Toronto Star tells more

There's a revolution going on in Canada's housing market, one that is propping up prices and extending the boom.
More buyers are choosing mortgages with longer payback periods.
By stretching payments over 30 to 40 years (instead of the usual 25), they can enter the market sooner or buy a better property.
Mortgages with longer amortizations have caught on like a house on fire (pardon the pun).
"About 60 per cent of first-time buyers are opting for a 40-year mortgage," says Craig Alexander, deputy chief economist at TD Bank.
His explanation: Houses are now less affordable because prices have grown faster than household incomes.
"Prices have gone up 10 per cent a year between 2002 and 2007, while historically they have gone up only 4 to 5 per cent a year.
"If these longer amortization mortgages hadn't been around, the housing market would have cooled down a lot sooner."
There's a "huge adoption" of 40-year mortgages in Toronto, Calgary and Vancouver, where people stretch for affordability, says Catherine Adams, vice-president of home equity financing at Royal Bank of Canada. "I think it's given the housing market a boost and allowed prices to go up further than they would have otherwise."
The Canadian Association of Accredited Mortgage Professionals did a survey last fall that showed the product's appeal.
Mortgages with longer amortizations grew to 37 per cent of new home loans – and 9 per cent of outstanding mortgages.
"That's phenomenal, considering they have been around for only the last two to three years," says association president Jim Murphy.
Competition in mortgage insurance has accelerated new product development by lenders.
Canada Mortgage and Housing Corp., a federal government agency, used to have the market to itself.
Now it has three private-sector rivals from the United States (Genworth Financial, PMI Group Inc., AIG United Guaranty).
Another big U.S. firm (Mortgage Guaranty Insurance Corp.) has applied for a licence, Murphy says.
Is there too much innovation in lending? And is Canada headed down the same road as the United States?
That's the contention of Garth Turner, a Liberal MP and former business editor, who argues that lenders in Canada are flirting with a market collapse.
In his book, Greater Fool: The Troubled Future of Real Estate (Key Porter, $21.95) and his blog,, he says the net effect of 40-year mortgages is no different from U.S. subprime mortgages.
"Both make buying easier and cheaper. Both lower the bar for loan qualifications. Both augment mortgage debt. Both sustain an overvalued market. Both lead to asset inflation.
"Will they both end badly?"
While 40-year mortgages may have extended Canada's real estate boom, most economists don't foresee an imminent U.S.-style bust.
"There's no evidence that house prices are set to decline in Canada," says Ted Tsiakopoulos, a CMHC market analyst in Toronto.
"Incomes are growing and we feel that's the most important factor that will support price growth."
The forces behind Canada's last housing crash in 1989 – high inflation, high interest rates and speculative buying – don't exist now.
In particular, says Alexander of TD Bank, you don't see house prices decline without significantly higher interest rates.
He predicts Canada's economy will slow until late 2009 and the Bank of Canada will cut rates by 1 to 1.5 percentage points.
"Falling interest rates are not consistent with the housing market running into major problems."
So, prepay your mortgage now if you can. Then, you'll have some equity to fall back on when interest rates go up again in about two years.
Ellen Roseman's column runs Wednesday, Saturday and Sunday in the Toronto Star. You can reach her at by email.
For information on Mortgages and or Buying a property call Larry at 877 338 5899 or by e-mail