Canadian and US mortgage rates can be influenced by monthly changes and the longer-term trend changes of economic indicators. There are many variables that can influence the rates on long-term debt instruments, but an understanding of key economic indicators can provide clues to the future direction of interest rates.
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a fixed market basket of consumer goods and services. The CPI is considered the most important measure of inflation. The CPI for All Items less Food and Energy (also sometimes referred to as the "core" or "underlying" CPI) excludes volatile food and energy prices. Analysts focus on the "core" CPI, which is considered a more accurate measure of the underlying rate of inflation.
The Producer Price Index (PPI) is a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services. PPI’s measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser’s perspective. The PPI can be volatile. It is best to use the six-month to one-year moving average. A lower-than-expected unemployment rate or declining trend is considered inflationary, and can cause bond prices to fall and yields and interest rates to rise.
The three main U.S. credit bureaus–Equifax, Experian and TransUnion–maintain your credit history. Using that history, plus its own proprietary equation, the Fair Isaac Corp. calculates your FICO credit score somewhere between 850 and 300 points. Anything above 700 points is good to excellent, with 720 or above earning you lower interest rates. Below 620 points is considered poor.
Want to strengthen your bargaining position? Get prequalified. Want your offer to stand out in a case of multiple offers for the same house? Get prequalified. Look at it from the seller’s perspective. If you had 2 offers on the table for your house, one from a fully prequalified buyer and the other from an "I’ll get around to that soon" buyer–to which offer would you devote the most attention? Even if the prequalified buyer’s offer was $1000 less, would you take the chance on the buyer that perhaps may not be qualified? When it comes to a seller evaluating offers, "a bird in the hand…" definitely applies.
The amount you can spend on a house depends on your income, the amount of cash you can allocate to the transaction, and the mortgage terms available in the market at the time you are shopping. These include interest rates, points, term, down payment requirements, and the maximum allowable ratio of housing expense to income. In addition, affordability may be affected by your existing indebtedness if this is higher than the indebtedness that lenders are willing to accept, and by closing costs which vary from one part of the country to another.
When looking to purchase a home in the Orillia real estate market remember that one of the most important conditions is that your property be inspected by a Home Inspector. There are many Home Inspectors available, but if you want a Home Inspector who has years of experience, over 4,000 inspections and is a Certified Building Code Official as designated by the Ontario Building Officials Association the call the Orillia Home Inspector, or visit his site at www.orilliahomeinspector.com to view his qualifications and “Fair Pricing Policy”. Call Roger at 705-795-8255 or Toll Free at 888-818-8608. Information and advice is always FREE. Roger is also WETT Certified for homes that have fireplaces or other wood burning appliances.