Canadian homeowners refinancing mortgages on the increase

We read this article yesterday on MSN Finance (written by Brenda Bouw, author of Home Girl: The Single Woman’s Guide to Buying Real Estate in Canada ) and found it interesting (and not exactly shocking) to learn that an increasing number of Canadians are refinancing their home.  In a recent survey by the Canadian Association of Accredited Mortgage Professionals, 56 percent of respondents who took out larger mortgages said they used the money for debt consolidation and repayment while 30 percent went towards home repair and renovations.

For some Canadians this makes a lot of sense and we like how this article points out the cautions for those considering this option.  If you find it challenging to keep your high(er) interest rate credit sources (credit cards, Best Buy or Sears cards…) in check, freeing up home equity to pay these down, only to find yourself undisciplined in racking them back up – has its consequences.  In the end a homeowner will themselves in a more challenging position as all household expenditures rise.  Use home equity wisely and you may find a lot more breathing room in your family budget at the end of each month.

AltaPacific Mortgages is interested in helping Canadians make the right choices.  If you’re an investor we’d like to share with you our vision in helping Canadians with first and second mortgages.  If you’re a homeowner we want to discuss with you the best choices for you.  To give you an example of our vision, we ask ourselves several questions while performing due diligence on a mortgage request.  Does the mortgagor really need these funds?  Does this mortgage truly help this person or family?  Are we putting them in a better financial position today, and in the future?  AltaPacific Mortgages is not simply placing funds in the deals that are the most attractive “on paper” …  they have to be equally as socially responsible to the mortgagor.

We’d be happy to discuss the topics of investing in Canadian real estate (or maybe better stated as investing in Canadian mortgages) or any topic relating to home ownership and home equity.  Our investors enjoy healthy returns by pooling their private placement investments, or RSP investments, into AltaPacific’s special shares.  Feel free to contact us if you’re interested in a chat, or learning more.

Federal budget includes several incentives for current Canadian home owners and those desiring to purchase a new home

As Canadians we will begin to wrap our minds around the Canadian federal budget announced today and as we do we will see a couple of things that jump out from the stand point of real estate.  Of course at AltaPacific MIC we like all things pertaining to real estate!

Are you a Canadian that is interested in renovating or improving your existing home?  The budget’s most notable measure from a personal finance perspective is the temporary new Home Renovation Tax Credit, which would be available to people who spend money on goods or work on their home before Feb. 1, 2010. The nuts and bolts of this tax credit: you would claim a 15-per-cent credit against spending of more than $1,000 and capped at $10,000, with a maximum credit of $1,350.

Are you a Canadian first time home buyer?  As well, first-time buyers will be able to make greater use of the federal Home Buyers’ Plan, which allows tax-free withdrawals from registered retirement savings plans for the purpose of buying a first home. The new withdrawal limit would be $25,000, up from $20,000.

Read the full article here

Summary of the budget is here

The full budget page is here

From our perspective at AltaPacific MIC, it is encouraging to see the Federal Government considering home ownership as an important part of Canadian livelihood.  Owning, maintaining and improving a home is important to Canadians and now there are incentives for all three.  Starting with a tax credit that gives an incentive to those considering a fix up or renovation between now and February 1, 2010; and carrying on to incentives that help Canadians free up a larger portion of RSP savings for first time home ownership.

Like investing in Canadian real estate or investing in Canadian mortgages, first time home ownership is a vital step for Canadians.  Allowing RSP investors to increase their withdrawal limit from $20,000 to $25,000 feels like a logical and important forward step as housing prices have increased steadily over recent years.  I’m sure we all remember our first home purchase and the excitement that came with it; so getting more Canadians into homes is exciting for all of us.

Perhaps you are already a home owner and feeling comfortable with your savings and investments, but looking for a better choice for more healthy returns.  You may want to consider investing in Canadian mortgages through a company like Alta Pacific Mortgages.  Diversify your portfolio of investments and include in it a “mortgage pool” with other investors who believe in investing in Canadian real estate.  Contact us if you’re like to learn more.

American mortgage and housing industry video

While we usually focus on the latest news, trends and stats from the Canadian mortgage industry – and real estate in Canada – this video from CNBC.com provides some interesting insight from some institutional investors who are looking to take advantage of depressed housing prices and the rebound that could follow south of the border.

Scott Minerd, of Guggenheim Partners; Len Blum, of Westwood Capital; and CNBC’s Diana Olick discuss in the following video on CNBC.

Investing in Canadian mortgages through AltaPacific Mortgage Investment Co. is worth considering for your RSP or private placement funds.  We’d like to chat with you in regards to your goals and how we can help you achieve them.  Here in Canada – most notably Western Canada – we are seeing some very attractive mortgage opportunities.  If you’re interesting in learning how you can participate in the upside of investing in Canadian real estate and investing in Canadian mortgages, give us a call or send us a message.  Our contact information is here.

Many misconceptions of second mortgages

Perhaps you’re like many Canadians who misunderstand the second – or third – mortgage market.  Maybe you yourself have never had a second mortgage and therefore think borrowers who use them must be on the path to insolvency; and that they’re taking the final steps before going upside down. The truth is that there are numerous scenarios where quality borrowers are in need of short term money while their financial health is very good.

We will try and share a few of the stories of deals we have been a part of here at AltaPacific Mortgages through our Canadian mortgage blog.  We hope that our investors – and potential investors – will better understand how investing with AltaPacific MIC is a great way to diversify their portfolio of RSP investments or private placement funds.

A deal recently executed by AltaPacific was actually on a first mortgage (we’ll talk about some second mortgage examples in a future post).  It’s like a second mortgage in nature though as it is short term at attractive rates. The property is a multi unit complex with clear title (meaning 100% paid for – no current mortgage on the property).  The owner is a developer/contractor and is performing renovation updates to the property (some units completed and sale ready; others under renovation) and plans to sell the units in the highly desirable resort community (in Western Canada).  An independent appraisal in September 2008 appraised the property “as is” for approximately $8 million dollars.  The “if completed as described” appraised value is approximately $11 million dollars.  The owner needed short term money to pay some immediate bills outstanding and his full first mortgage is not scheduled to be closed until the end of January 2009.  He needed money within days.  AltaPacific discoverd the opportunity through our network of mortgage originators and reached out to help him, the contractor/owner/developer.  We structured a deal in a very short amount of time and he received approximately $250,000; allowing him to satisfy his short term needs.  The deal was done with low-teen interest rates and a fair upfront fee over a 6 month term.  The borrower’s credit, past experience, credibility and ability to pay back the loan all fell within the guidelines of AltaPacific MIC’s

Details described on AltaPacific’s Canadian mortgage blog are not fully disclosed in order to keep actual parties and details anonymous.  Please feel free to contact us if you’d like to learn more about AltaPacific mortgage guidelines or actual mortgage details of deals we’re involved with.  Our mortgage originators are some of the highest volume mortgage brokers in Canada – we think you’ll be very impressed with our access to high quality mortgage opportunities.

Canadian Homebuilders claim “Canada is totally different from that of the U.S.”

The following news was published yesterday (January 5, 2009) in many sources across Canada.  This Financial Post article speaks directly to the Canadian housing market and housing starts.

While some media sources try and compare the Canadian housing market to that of the United States; where a housing meltdown (in some regionalized markets) is occuring, Canadian homebuilders continue to feel comfortable with Canada’s housing market.  “The housing situation in Canada is totally different from that of the U.S.,” it said. “There will be some price moderation in some markets, but there is nothing to suggest that housing markets in Canada are vulnerable to the oversupplies and plunging prices that characterize many markets in the U.S. We did not experience the same housing boom conditions that occurred in the U.S., and there is no reason to expect that we are in for the serious pain they are currently suffering,”

With this being said, we at AltaPacific Mortgage Investment Co. remain diligent in funding deals that are both attractive and safe for our investment portfolio.  We are extremely aware of markets where volatility may be higher than in others (i.e. Vancouver’s downtown condo market versus a primary resident in Edmonton, Alberta versus a clear title development in need of short term financing).  Recent deals we’ve funded are looked at very closely and we feel very confident in this year’s returns for our investors.

In these somewhat uncertain times, opportunities abound.  Additional diligence is required but the funding opportunities are plentiful and we remain confident in our ability to return healthy rates of returns to our investors.

Please don’t hesitate to contact us if you’re interested in learning more about investing in AltaPacific Mortagage Investment Co. (AltaPacific MIC).  Visit AltaPacific’s website for more details and keep an eye on this Canadian mortgage blog for regular updates on investing in Western Canadian mortgages.