CMHC made an announcement today that they are raising their insurance premiums.

If I was CMHC would I have increased the premiums??

That would not be my master plan that is for sure.   Yes, this could this open the door for the other two private companies can keep their rates the same and increase their market share. However we both know they will more than likely follow suit and raise their premiums as well.  

They stated they are trying to reach their capital targets, which strengthens the financial system.  What I think they might really be doing is still trying to cool off the housing market.
They made over a billion in the first 9 months of 2013, so I am sure that this might not the whole story. 

Last night I was speculating what other announcement would be made, and I thought about privatization, about them making the max loan to value 90% instead of 95%, about the inherent risk if defaults increase faster than the premiums.   For some reason the higher premiums I had doubts as too if this was what they were really going to do.

What is changing?  May 1st, the insurance premiums rate for a new home purchase by 15%.

Here is a chart, but for the 5% down client you are talking about a rate increase of 2.75% to 3.15%





What does that mean for a home worth 750,000 with 5% down?
Well the mortgage would be $712,500 plus the premium of $19,593.75

The new premium would now be $22,443.75

You are still paying interest on that over the 25 years which does work out to $1,323.75 and a monthly increase to your payment of $13.92

What are you paying on the total premium?   $109.59 a month and $10,429.40 in interest over 25 years.

Making the total cost to you: $32,873.15   

I used a low rate of 3.29 as well, so if interest goes back up over the next 25 year you would be paying more!

Call an Alberta Mortgage Broker to get your deal done before May 1st, to save you a little bit extra! 403-807-8779

I was naked, but she was drunk every night!

Being a mortgage broker in Calgary I have three goals.  

1. Making you comfortable with the mortgage process, while making that information relate-able.
2. Saving you the most amount of money possible.
3. Making you fall in love with how I do things so you will share and tell others.

My challenge?  If the goal of a blog is to entertain, gather followers, educate, tell a good story while keeping it real, then where is the line between fun and education. Where do I throw in the awesome that makes you want to share? 

My life is an open book.  Get to know me.  However, you have to keep in mind that if all I do it entertain you with my life's worthy tidbits, you might not learn anything extraordinary or even bother to share.  You would be just sitting back laughing out loud while you should be working, sleeping, or doing something on your priority list.   I hope this will fill the void for both your entrainment needs and your inherent desire to better yourself. After all its easier to like, share, comment on after you have smiled.   

Why do I love helping first time home buyers as a Calgary Mortgage Broker?   Much of it was due to where I lived in the past, as I have seen my fair share of strange from being a renter.

It all began with my first roommate, hours after I moved in, he strutted by me looking in the mirror in the living room and with a straight face asked me if he looked fat.  It did not help that he was in his tightie-whities.  Staff accommodations at the Banff Springs were like that. Needless to say, it was a college dorm, with you having no control over your roommates.   I had a string of people in for a couple of weeks then they were gone from my life.  I had the let's fight on the phone in the middle of the night with my ex, let's bring home girls and have a party at 3:30am, the I don't speak English so I won't talk to you, rather I will just read my book to name a few.

There are so many long stories to tell, and many are not proper for this blog. One of the more interesting roommates was from when I had just moved to Calgary.  I lived in Marda Loop with two girls.  One was a sweetheart who went on to be a realtor....the other?  Where do I begin?

Well, the other loved her red wine so it was a standard event for her to pass out in front of the TV with an empty bottle or two and the red-stained teeth were common.   My bedtime was around 3am back then due to a bad online gaming habit, so often I would get a big glass of homo milk and see her passed out on the couch.   I would drink my milk, rinse my glass, and change the channel to Treehouse. By the 25th time, she was threatening me with bodily harm as it also seemed to be getting just a little bit louder each time.    

OK OK!  I know you are thinking there is no way you were a perfect angel, quit being so judgmental! My confessions?  I would lock myself in my room for the weekend to watch Stargate, or play games with my cousins to the wee hours and geek out.   How I miss the LAN parties of the boys coming over and playing some games.  My current roommate does not let me have those anymore, and she even joined the Facebook group wives against World of Warcraft.  

There is also the morning ritual of shaving my head.  Nobody really likes those tiny little hairs that fell out of my razor when they landed around the sink, on the floor, around the garbage.     

Ohh, and I would occasionally sleep "activity". I say activity because I was never one to just sleep talk or sleepwalk, I took it to the next level.  I would sleep marathon!   Once in a dream, I was the closest to the finish line, and the prize was one million dollars.   I was living paycheque to paycheque so that was a dream come true.  I jumped up, ran to my window, popped out the screen which then fell 15 feet to the ground.  I crawled through the window and went across the tiny window ledge dangling and somehow jumped over to the balcony.  Lifting myself up and started running to the finish line.  Midway across the balcony, I was woken by the realization that in a marathon I should be wearing spandex which kept my private parts from moving to rambunctiously this way and that.    It was dark thankfully, and my arms were bleeding from the ledges of the window that had cut me as I crawled out.  It would have been a much harder time figuring out a way back in the house in the middle of the day with no clothes on.  I tried the back door, and it was locked, and I did not want to try that window again and make my arms worse.  I crept to the front of the house and tried the front door.   It was open.  Now to just sneak back to my room.  I crept up the stairs and I heard it!  Treehouse was still on, and it was loud enough to drown out the snores and my creeping feet on my way back to my little room.

Did you get the moral of the story?  No, it’s not don't sleep naked if you sleep activity.  Its: why rent when you can own!!!??  If you can afford to rent, chances are you can afford a mortgage to buy a home.  Save 5% down, and purchase your own home.  Of course, there are some other costs you should consider, which we can review when we put together your plan.  You can even go in with a buddy if you are feeling a little nervous of the payments.  Or rent out a room or two after and keep it in just your name, just put some good window locks on my room if you are going to rent a room to the likes of me.  

Dependably yours, 

By Michael Richmond

PS:  If you currently rent, ask me about my mortgage management course.   It has a couple good sections of ways to save for your down payment.  We should put a plan together to ensure your dreams of homeownership happen