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Canadian Mortgages and the US Financial Crisis

 

First and foremost, Canada is in a better financial position than the US. Our mortgage lenders did not lend the same kind of mortgage products that are creating many credit issues for the lenders, insurers and citizens in the US today. Our banks thankfully played it safe. They were prudent when approving mortgage products and as a result we have generally remained insulated from most of the issues facing the US.

 

That being said however, we are experiencing a bit of an economic slowdown, but certainly not a financial crisis. We are not at this point in a recession and housing and lending markets while having some adjustments are settling into a more balanced business.

 

Bank of Canada has stated that they will continue to provide liquidity as required in order to support the stability of the Canadian financial system and the functioning of the financial markets.

 

The US Federal Reserve is stepping into the market place to provide stability in the housing market. Recently as many of you heard, they took control of Freddie Mac and Fannie Mae – two of insurance providers in the US. This is a good thing. These two companies hold or guarantee $5.3 trillion dollars worth of mortgages.

 

So what does this mean to Canadians and Canadian mortgages: As the government continues to provide liquidity, they will keep interest rates low to stimulate the markets and keep people spending. They have already taken steps to ensure the safety of our financial system including limiting the access of higher risk mortgage products such as 40-year amortizations and the zero down payment programs.

 

Dreyer Group mortgages is here to assist should you have any further questions about what is happening in the mortgage market and strategies to help you make the most informed decisions. Feel free to call me anytime: Jared Dreyer, Accredited Mortgage Professional, AMP 604 649-5991 or toll free 1-800-687-9020