HSBC Closes Doors to Mortgage Brokers

HSBC mortgage products were often attributed lengthy turnaround times, and only put forward occasional rate promotions.

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After a move to deal only with its top 100 brokers was initiated last year, HSBC Canada has decided to end even those arrangements and handle mortgages solely online or over the phone directly through their own employees. The bank will, however, honour all agreements with mortgage brokers currently in existence.

“We plan to concentrate on growing our business through our network of over 140 bank branches,” HSBC Bank Canada spokeswoman Sharon Wilks said.

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Canadians Increasingly Looking to Hybrid Mortgage Products

Hybrid mortgages grant homeowners the best of both mortgage rate worlds and manage risk.

Hybrid Mortgage
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Nearly half of the prospective homebuyers aiming to purchase property over the next two years are intending to do so with a hybrid mortgage, says a recent survey conducted by the Royal Bank of Canada.

These numbers are up eight per cent from those attained in the same survey conducted by RBC last year. Yet, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP), virtually all Canadian homeowners with mortgages currently, or 94 per cent, have either a fixed rate or a variable mortgage. This means that only a potential six per cent of the market has actually committed to a hybrid mortgage.

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Mortgage Insurance is Not Just for High Ratio Loans

Mortgage insurance protects the lender in the event the mortgagor defaults on their mortgage payments.

High Ratio Loans
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Though mortgage default insurance is required in Canada on loans where 80 per cent or greater of the property’s value is financed though a lender, that is not the only case when it is beneficial to obtain insurance.

According to the Canada Mortgage and Housing Corporation (CMHC), as of December 31, 2009, 71 per cent of their $472-billion in outstanding mortgage insurance was for mortgages with a loan-to-value (LTV) ratio of 80 per cent or less. Fewer than five per cent of insured mortgages were for loans with an LTV over 95 per cent, and almost 90 per cent of insured mortgagors had already amassed at least 10 per cent in equity in their home.

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