Okanagan Mortgage Team

2011-06-22T15:59:00.000-07:00

How to Calculate a Home Buying Budget

2011-06-02T11:00:00.000-07:00

When house–hunting, some factors, like the features of the home, can be adjusted once you've made your purchase, while other factors, like the location, cannot be. Finding the right home is about getting the right balance and at a price you can afford. Advice on how to calculate a home buying budget.

- Learn about your options - When house–hunting, you look for places that suit your needs and lifestyle. Do the same when deciding on your mortgage. Know the differences between fixed and variable interest rate mortgages and decide what amortization period best suits your situation. Payment flexibility is also important when deciding on a mortgage, to know what you can prepay, as well as options to pay less at a later date if something unexpected comes up.

- Calculate your mortgage numbers - Run the numbers and settle on a price range you can afford using a convenient online mortgage calculator, which factors in your income and the size of your down payment and compares different mortgage options and payment plans. Understanding what you can afford lets you narrow your search and shop with confidence, knowing that the houses you view fit within your budget.

- Get pre-approved - The home–buying process can happen very quickly, so be prepared when you find a home you want. Getting pre–approved for a mortgage puts you in a good position to make an offer when you find the right home. There's usually no cost or obligation, and it's a good opportunity to come in and talk to a mortgage expert to clarify any questions. Please call us at (250) 862-1806 begin_of_the_skype_highlighting (250) 862-1806 end_of_the_skype_highlighting to set up an appointment or visit our website to contact us http://www.okanaganmortgages.com/contactus.php

Help Your Friends

2011-05-31T14:28:00.000-07:00

The Bank of Canada recently released a paper on the "Competition in the Canadian Mortgage Market", which presented some very interesting findings.

On average, higher income households pay a higher rate on their mortgage than lower income families.
Banks with large branch networks charge higher rates on their mortgages.
Borrowers who put less down on their mortgage pay a rate premium over those who put more down.
Banks offer larger discounts to new clients than existing clients.

This report also found that just over 30% of people who applied for a mortgage did so through a mortgage broker. There are a lot of people out there who didn't benefit from the services that I provide my clients.
As a mortgage broker, I make sure that you are receiving the lowest possible rate on your mortgage! Even if you feel more comfortable going to one of the larger banks, I can get you a discounted rate that they won't offer you as a client of that bank.
Tell your friends about the benefits of using a mortgage broker! They may be one of the people that haven't received the best rate available to them. Wouldn't you want to help your friends thousands of dollars on their mortgage?

http://www.okanaganmortgages.com/

Demand for luxury homes intensifies amid rising Canadian and global wealth

2011-05-20T13:20:00.000-07:00

KELOWNA, BC, May 18 /CNW/ - Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to a report released today by RE/MAX.

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010. Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent). Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end. Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.

"The strength of the upper-end segment continues to defy expectations," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage. Western Canada, in particular, will continue to see the upside benefit of investment from abroad.

UPPER END RESIDENTIAL SALES - January 1 to April 30

                                                 Market Price Point Sales '10 Sales '11 % +/-

Greater Vancouver $2 million    343    747    118
Victoria    $1 million                              91    78    -14
Edmonton    $750,000    87    70    -20
Calgary    $1 million                            96    145    51
Regina       $500,000    42    40    -5
Winnipeg $500,000    75    93        24
London-St. Thomas    $500,000 118                    107        -9
Kitchener-Waterloo $500,000    133    122    -8
Hamilton-Burlington               $750,000        69        78    13
Greater Toronto    $1.5 million                          399    435    9
- Mississauga    $1.5 million        42        17 -60
- Oakville    $1.5 million    23    37    61
- Richmond Hill/Thornhill $1.5 million                            25                      32            28
Ottawa $750,000     63        100    59
Halifax-Dartmouth    $500,000 60        76    27

Source: RE/MAX, Local Real Estate Boards

While foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in Greater Vancouver. The vast majority of regions reported that locals were the primary drivers of demand for luxury product. A number of factors position Canada as an attractive option, foremost that its real estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws. To those from abroad, it's the perfect mix.

"Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country," says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. "The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally. The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines."

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few. While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward. Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels. Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets. This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011.

As Canada's millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada's gateway centres. Infill, renovation and new construction are helping to some extent—while driving up prices in tandem. The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.

Limited inventory levels in Canada's largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

To view the complete RE/MAX Upper-End Market Trends Report 2011, click here: http://files.newswire.ca/577/REMAXUpperRpt2011.pdf

http://www.okanaganmortgages.com/

Divorce and Your Home

2011-04-27T13:27:00.000-07:00

There are many questions you might be asking at this time, particularly surrounding your home. We are here to help. Let's break down some the the basics.

Q "I think I want to stay in my home...what do I need to keep in mind?"

First, take into consideration the size of the home, utilities, payments, family needs. Does staying in the home truly make sense? You will likely now be entirely responsible for the house payment, taxes, insurance, upkeep, maintenance and other related bills. Your household income may be decreasing, and your overall expenses may be increasing if you are subject to a court order for support, so it is important that you are aware and thorough in determining what your actual expenses will be in keeping and maintaining the home on your own.

Q " My spouse is entitled to share in the equity we have in our home...how is this handled?"

The division of family assets including the equity in your home, is a complicated matter that should be discussed with your lawyer. However, the equity in your home needs to be determined by an appraiser- call us if you need a recommendation and referral. The appraised value less the eventual costs of selling (commissions and seller closing costs) equals the equity to be split between the parties.

You are often able to come to an agreement with the assistance of your legal advisor as to the amount of equity to be paid to your spouse or there may be a court ordered mandate for distribution of the equity, possibly including interest on that amount. This means that you will likely have a specified amount of time to obtain the funds needed to give the ex-spouse their portion of the equity. . This can be done by cashing out the equity in the home with a new mortgage, selling the home or by using other assets you have to "buy out" their stake in the home.

If you choose to stay in the home, you have two financing options to pay your ex-spouse. You can either refinance your home to get cash out, or you can obtain a new second mortgage or home equity loan. This is where you will want the advice of a trusted mortgage professional.

Even though you may now be qualifying for the loan without a spouse's income - with your own good credit and income, you can usually quality on your own. Often, child support and alimony is viewed as stable income, it it has been received for three months and is likely to continue for at least three years.

Q "What if I am the one leaving the home?"

It is important to know that even though you may have agreed to leave the home or the divorce order awarded the home to your spouse, you are still obligated for the mortgage debt in the eyes of the mortgage company.

Q " I think I want to stay in my home...what do I need to keep in mind?"

Unfortunately for many, divorce is a time of great financial hardship and credit challenges. Because you are obligated on the mortgage until it is paid in full or refinanced, it is imperative that the person responsible for the payment remains current. One possibility you have to remove your name from obligation is to contact the company which currently holds your mortgage, and ask to do a "Qualifying Assumption". This process will leave the existing loan in place, but would relieve the non-occupying spouse from their obligation on the loan. Another option ideally is for the spouse remaining in the home to qualify for a new mortgage and release you from the existing obligation. Give us a call, and we can explain more about this process, or help you determine if a refinance may make more sense instead.

Q If I want to go buy another home - am I going to be out of luck while I am still listed on the old mortgage?

A although it is difficult and not usually advised to purchase another home until your divorce is final,we are happy to look over how you expect the financial situation to be finalized, and help you get ideas as to what you will qualify for. Remember that in most situations, child support and alimony must have been received for three months, and be likely to continue for at least three years in order to use this income for qualifying. even if you are still listed as a co-borrower on the mortgage for the prior home, if the separation agreement sates that you are not obligated for the mortgage, many mortgage programs will allow you to be qualified without this obligation. However, any late payment issues on the mortgage held by your ex-spouse will impact your credit scores, as the mortgage is still a joint liability in the eyes of the credit bureaus until you are removed via a refinance, sale or other method as described above.

Q What is I do want to purchase another home before the divorce is final?

A This may be possible, but be aware that your spouse may have a marital interest in your new property, and it will need to be handled by your attorney. You will also have to qualify with the full debt from the current home, because there would not yet be a final separation agreement assigning ownership. Be very careful with this situation, especially as the financial situation you expect...may not be the final result, once the divorce is finalized.

Taking the time to talk with us during this process and before you decide to start looking at a new home can help eliminate many of the concerns or questions that ofter surface in these situations. We understand this may be a very difficult time, and you have many decisions to make. We can provide you with a free financial consultation, credit check, an mortgage strategy review - so that you have the answers and information you need to make good decisions.

We will help you sort out the options and strategies you have at hand, and help you at this time...and down the road. We understand that it's not just a house - it's your home.

www.okanaganmortgages.com

Bank of Canada maintains overnight rate target at 1 per cent

2011-04-12T14:38:00.001-07:00

OTTAWA –The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

As anticipated in the January Monetary Policy Report (MPR), the global economic recovery is becoming more firmly entrenched and is expected to continue at a steady pace. In the United States, growth is solidifying, although consolidation of household and ultimately government balance sheets will limit the pace of the expansion. European growth has strengthened, despite ongoing sovereign debt and banking challenges in the periphery. The disasters that struck Japan in March will severely affect its economic activity in the first half of this year and create short-term disruptions to supply chains in advanced economies. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which is being further reinforced by supply shocks arising from recent geopolitical events. These price increases, combined with persistent excess demand conditions in major emerging-market economies, are contributing to the emergence of broader global inflationary pressures. Despite the significant challenges that weigh on the global outlook, global financial conditions remain very stimulative and investors have become noticeably less risk averse.

Although recent economic activity in Canada has been stronger than the Bank had anticipated, the profile is largely consistent with the underlying dynamics outlined in the January MPR. Aggregate demand is rebalancing toward business investment and net exports, and away from government and household expenditures. As in January, the Bank expects business investment to continue to rise rapidly and the growth of consumer spending to evolve broadly in line with that of personal disposable income, although higher terms of trade and wealth are likely to support a slightly stronger profile for household expenditures than previously projected. In contrast, the improvement in net exports is expected to be further restrained by ongoing competitiveness challenges, which have been reinforced by the recent strength of the Canadian dollar.

Overall, the Bank projects that the economy will expand by 2.9 per cent in 2011 and 2.6 per cent in 2012. Growth in 2013 is expected to equal that of potential output, at 2.1 per cent. The Bank expects that the economy will return to capacity in the middle of 2012, two quarters earlier than had been projected in the January MPR.

While underlying inflation is subdued, a number of temporary factors will boost total CPI inflation to around 3 per cent in the second quarter of 2011 before total CPI inflation converges to the 2 per cent target by the middle of 2012. This short-term volatility reflects the impact of recent sharp increases in energy prices and the ongoing boost from changes in provincial indirect taxes. Core inflation has fallen further in recent months, in part due to temporary factors. It is expected to rise gradually to 2 per cent by the middle of 2012 as excess supply in the economy is slowly absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored.

The persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of material excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information note:

A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2011. The next scheduled date for announcing the overnight rate target is 31 May 2011.

Should You Use a Mortgage Broker?

2011-03-22T12:57:00.000-07:00

What you need to consider when choosing between a mortgage broker and going straight to a financial institution.

Patricia Lovett-Reid

Be it suburban split level, swank downtown condo or rural country manor, when it's the right fit, you know it. But having the keys in hand to the place that best suits you will take plenty of research and leg work — and will likely occupy your dreams at night. And it should. Buying a home is one of the biggest investments you'll make. Just as you wouldn't make a commitment of that size without asking the right questions and sneaking a peek under the rug, it's important to put equal effort into finding the right mortgage.

Generally, there are two ways to obtain mortgage financing in Canada — either indirectly through a mortgage broker, or directly through a financial institution or mortgage lender. The mortgage market is a highly competitive market and the players are standing in line to win your business.

* For more info on buying a house, check out our Home Buyer's Guide

So who are the players?

A mortgage broker does the shopping for you — presenting your information to lenders to find a fit. He or she has access to numerous lenders and can provide you information on various services and loan types, and will shop around for attractive rates and terms for your mortgage. The use of mortgage brokers is very common in the United States and they are growing in popularity in Canada. According to research by the Canadian Association of Accredited Mortgage Professionals (CAAMP), mortgage brokers closed approximately one quarter of all mortgage deals in Canada in 2010.

A mortgage lender in Canada is most likely to be a major bank, trust company, credit union or other finance company. Whether generated by a broker or a bank, chartered banks finance more mortgages than all other lending institutions combined. Most bank advisers or bank mobile specialists strive to provide a holistic solution that is best for you, using their suite of financial products and services. They might, for example, take into consideration all outstanding debt, such as credit cards, loans, or lines of credit as part of an overall solution for your particular needs. They could help improve cash flow and minimize your borrowing costs over the long term. Banks are aware of the highly competitive landscape and offer competitive rates.

So will it be a broker or a bank?

While there are advantages to both, my advice, no matter which route you choose, would be to have the right questions prepared for your mortgage professional. Interest rates are just the beginning. What might the new mortgage rules mean in your situation? Here are some important areas to consider:

Term: Ask your broker or lender to break down the costs of different terms. Do you need a fixed term to better sleep at night, or would a variable term work for you? If you expect to have extra money to pay down your mortgage, perhaps you should consider an open term versus a closed term.

Amortization: Have the bank or broker calculate the difference amortization schedules will make — will you spread the payments out over 25 or 30 years? Or can you do 10?

* For more info on buying a house, check out our Home Buyer's Guide

Prepayment allowance: How much and how often will you be able to pre-pay every year before being charged a penalty?

Frequency of payments: Which payment frequency is most suitable for you — weekly, bi-weekly, rapid bi-weekly? Will the lender allow you to make accelerated payments?

Portability: If you move, can you take your mortgage with you?

Assumability: If you sell, can the buyer, subject to a credit approval, assume your mortgage and rate?

Point of contact: Who can you call if you have a question or a problem? If you use a broker to arrange mortgage financing, will he or she have any involvement once the financing is in place? Are call centres and branches available for inquiries?

The CAAMP survey I mentioned also found mortgage holders reported, on average, that they obtained 1.96 quotes when they signed up for their current mortgages. That indicates that whether indirectly through a broker, or directly through a lender, many Canadians are getting a second opinion when it comes to mortgage financing. The best advice? Do your homework, shop around and be ready to pepper your mortgage professional with questions. Consider your mortgage as carefully as you will the purchase of your dream home.

Http://www.okanaganmortgages.com

`Why`` am I a Mortgage Broker and `Why`Should You Do Business with Me?

2011-03-15T15:02:00.001-07:00

My business coach asked us last week to come up with our “Why”. He gave us a questionnaire to help us and several questions and then concluded with a Skype call.

A large number of people come to meet with me about their mortgage and they are not really sure why they are there or what they should ask. Well let me tell you getting a mortgage is a lot more than finding the best rate. It is important that you find the right broker that will find the right product to suit your needs. For example what if you need or want to pay down additional money on your principal within the first year or during the term? Not all lenders allow or have the same prepayment options. Should you take a variable rate mortgage or fixed? What are the risks? What if you are self employed and have a lot of deductions and so your net income doesn’t look so good? These are just some of the many decisions that I help my clients make every day.

The other day I had the opportunity to assist a client who had a child who was very ill. The family had taken the child for many surgeries and found them selves unable to make their mortgage payment. I was devastated for the family and wanted to do something to take the stress off of them so they could concentrate on their family. I called the lender and had them waive the NSF fee and the late interest and did some investigation and discovered they could capitalize a few payments until they got back on their feet.

This experience helped me to discover my “why”. I want to make a difference in every life I touch whether that means helping you get a mortgage to buy your home or helping you to get the best rate with your existing lender, if that makes the most sense given your circumstances. If I can help you please call me at (250) 469-1611.

http://www.okanaganmortgageteam.com

Inspiring Thought by Colin Dreyer

2011-03-04T12:07:00.000-08:00

Inspiring Thought by Colin Dreyer

Is this really worth reading?
That is a good question……each month when I sit down to write these I ask myself if anyone is reading them and are they getting any value from my comments or observations in life.
The answer is yes…..one, I like writing them as it continues to motivate me and helps me reflect on the positives in life and two, any opportunity to make a positive change in your life or someone else’s is an opportunity you have to take.
So, now you know the theme for this month……take opportunity not only when it is available but when it is not available you need to go out and create it.
Here are a couple of thoughts to keep you motivated and energized…
-       Learn from older people – knowledge is always the key to success and what better way to learn from those that have gone thru the highs and lows of life and are willing to share that information with you to help put your thoughts in context and also to help you eliminate some of the pitfalls that you may be subjected to in your journey.
-       Pursue a mentor – as above we can learn for everyone, regardless of age but sometimes we need someone who can understand our goals and be a constant resource to help us to get where we want to go and keep us on track……so pick a mentor and let them help guide you…..no one said you have to climb every mountain yourself.
-       Do not fear competition – there is always competition, understand it, learn from it but work on your own game….winners are defined by their strengths.
-       Network for value – being seen and knowing as many people as you can is important to personal and business growth but you need to also decide the highest and best use of your time……be strategic, you do not need to be everywhere all the time
-       Listen well – you learn and grow in the quiet moments….by reading and listening not by hearing yourself talk……be in the moment, listen to people, give them your full attention when they are talking……if people believe that you care for them then they will care for you.
Again, simple steps with large results. Stay motivated, stay energized….this is your moment…..enjoy it!
All the very best,
Colin

www.okananganmortgages.com

Create Value in Your Home

2011-03-03T16:47:00.000-08:00

How do I increase the value of my property? That’s the question on
every homeowners mind. There are two key survival strategies. The first is to
think long term, have a plan and stick to it. History shows that this plan of
action can pay off.
The second tactic is to outperform the market. This means ensuring your
property increases in value at a greater rate than those in your surrounding
market. One way to do that is through renovations – but not all projects are
created equal when it comes to generating a return on investment (ROI).
Here are the top four “renos for ROI”:
1. Building an income suite (also knows as a rental suite)
This is by far the most profitable reno a homeowner can undertake.
Income suites typically have a 150% to 250% ROI.
2. Painting
This is an inexpensive way to freshen up a property. Picking neutral tones
and doing a good job are key. This simple reno project gives 100% ROI.
3. Renovating Kitchens and bathrooms
Kitchens should be bright and spacious with a smart layout. Replacing old
appliances with inexpensive and more efficient newer ones also adds a lot
of appeal. Bathrooms are equally important. The more you have, the
better the ROI. This delivers about 75% to 100% ROI.
4. New Flooring
This has a dramatic impact and hard surfaces are the way to go. Laminate
flooring is inexpensive, easy to lay, durable and looks great. With modern
styles and improved design, it has become the flooring of choice for real
estate investors. New flooring can generate an avg. of 70% to 90% ROI.
(Source: HGTV.ca)

http://www.okanaganmortgages.com

The Home Buyers' Tax Credit (HBTC)

2011-03-01T17:02:00.000-08:00

Today's focus is on the Home Buyers' Tax Credit (HBTC).

What is this credit?

The Federal Budget 2009 proposed a tax credit for First Time Home Buyers as an action to provide support for Home Ownership. This proposal was thought to assist first-time home buyers with the costs associated with the purchase of a home (i.e. legal fees, disbursements and land transfer taxes).

For 2009 and subsequent years, the budget proposes to introduce a new non-refundable income tax credit, based on the amount of $5000 for first time home buyers who plan to purchase after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax
relief starting in 2009.

How is the new HBTC calculated?

It is calculated based by multiplying the lower personal income tax rate for the year (15% in 2009) by $5000. So that means, for 2009, the credit will be $750.

Who qualifies for the HBTC?

The individual must meet the below criteria:

# They acquire a qualifying home.
# Neither the individual or spouse/common-law partner has owned and lived in another home in the year of purchase or any of the 4 preceding years.
# A person with a disability or are buying a house for a related person with a disability, you DO NOT have to be a first time home buyer. The home must enable the person with a disability to live in a more accessible dwelling.

Who is considered a person with disability?

An individual who is eligible for the Disability Tax Credit (DTC).

What is a qualifying home?

# The home must be located in Canada.
# This includes existing and new construction. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, apartments in duplexes, triplexes, fourplexes or apartment buildings all qualify.
# A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. (BUT a share that only provides you with a right to tenancy in the housing does NOT qualify).
# You or the related person with a disability must intend to occupy the home as a principal residence no later than ONE year of purchase.

Can my spouse/common-law/friend claim the HBTC?

Either person can claim the credit or you can share it. BUT the total of both claims cannot exceed $750.

If you are purchasing a home with a friend, and you both meet the conditions for the HBTC, either one of you may claim the credit or share it. BUT the total cannot exceed $750.

Does the home have to be registered under the applicable land registration system?

Yes. The home must be registered in accordance with the applicable land registration system.

How do I claim the HBTC?

Beginning with the 2009 personal income tax return, a new line will be incorporated for you to claim the credit.

Do I have to submit any supporting documents with my income tax?

No. But make sure that the information is available just in case CRA requests for it.

Is the HBTC connected to the Home Buyer’s Plan?

No. Some of the conditions for the HBTC and Home Buyer’s Plan are similar but they are not connected. Eligibility for the HBTC will not change if you participate in the Home Buyer’s Plan.

For more information on the First-Time Home Buyers’ Tax Credit, click on Department of Finance’s Budget 2009 (Page 128).

Please refer to Canada Revenue Agency’s website for up-to-date details on the HBTC.

http://www.cra-arc.gc.ca/nwsrm/fctshts/2010/m01/fs100121-eng.html

www.okanaganmortgages.com

Window Closing on Low Rates

2011-02-15T11:14:00.000-08:00

Tim Shufelt, Financial Post · Tuesday, Feb. 8, 2011

For Canadian mortgage borrowers, interest rate hikes could become a grating refrain in the coming months.
Canadian banks are raising the cost of mortgage borrowing in response to rising bond yields and expected monetary tightening, marking the outset of what is expected to be an upward trend.
That's making a strong case for borrowers to lock into fixed rates before it's too late, said Benjamin Tal, deputy chief economist with CIBC World Markets. "The window is closing."
Toronto-Dominion Bank and Canadian Imperial Bank of Commerce both announced Monday hikes to their residential mortgage rates, the first increases since changes to the rules of borrowing were announced by the federal government last month. The other big banks were expected to follow the moves shortly.
Effective Feb. 8, the interest rate on the banks' benchmark five-year closed fixed -rate mortgage will increase 25 basis points to 5.44%.
Toronto mortgage broker Paula Roberts said rising borrowing costs will compel more of her clients to abandon ultra-low variable rates in favour of higher, fixed-rate mortgages.
That can be a tough decision for borrowers to accept higher payments, but not one that should strain a mortgagee's finances, she said.
"If you can't afford [the increase] ... that's a problem," Ms. Roberts said. "That's why the government has changed the rules."
In two stages over the past year, the federal government announced changes to the conditions of mortgage lending -- shortening the maximum amortization from 35 years to 30 years and requiring borrowers to qualify for a fixed-rate plan, even if they are opting for a variable rate.
Many who only qualify under the old rules, however, will try to secure mortgages before the amortization restrictions come into effect next month, Ms. Roberts said.
"There are going to be a lot of people that will enter into their agreements by March 18."
Much of the momentum in the mortgage market can be attributed to a bond selloff and rising yields across the board. That effect is partly a reflection of building global inflationary pressures as well as a world economy that is proving more robust than expected.
"In my opinion, the bond market will not be the place to be over the next six months, and if that's the case, you will see mortgage rates continue to rise," Mr. Tal said.
In addition, anticipation of increases to the Bank of Canada's benchmark lending rates is building, also contributing to rising yields, which puts pressure on fixed-income mortgages.
If there was any lingering doubt that the Bank will soon raise rates, last week's jobs report erased them. The report showed Canada added four times more jobs than expected in January.
"[It] creates a fairly powerful story for the Bank of Canada, which is clearly concerned on the domestic front," said Camilla Sutton, chief currency strategist at Scotia Capital Markets. "I think there's a material change."
So do investors. The probability that the central bank will boost its key policy rate by May, as measured by overnight index swaps, jumped to almost 75% after the jobs data.
The expected timetable could shorten further if the Canadian economy shows more surprises in advance of the Bank of Canada's decision on March 1.
"That's why the next two weeks will be extremely important," Mr. Tal said.
Mitigating the bank's urgency, on the other hand, is the recent strength in the loonie, which itself has a tightening effect, Ms. Sutton said.
"If we continue to see [Canadian dollar] strength, the Bank of Canada might back off the need to tighten."

www.okanaganmortgages.com

January 19, 2011 Changes to Mortgage Rules

2011-01-26T16:06:00.000-08:00

Bank of Canada maintains overnight rate target at 1 per cent

2011-01-18T07:12:00.000-08:00

FOR IMMEDIATE RELEASE
18 January 2011

CONTACT: Jeremy Harrison
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Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA –The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The global economic recovery is proceeding at a somewhat faster pace than the Bank had anticipated, although risks remain elevated. Private domestic demand in the United States has picked up and will be reinforced by recently announced monetary and fiscal stimulus. European growth has also been slightly stronger than anticipated. Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. In response to overheating, some emerging markets have begun to implement more restrictive policy measures. Their effectiveness will influence the path of commodity prices, which have increased significantly since the October Monetary Policy Report (MPR), largely reflecting stronger global growth.
The recovery in Canada is proceeding broadly as anticipated, with a period of more modest growth and the beginning of the expected rebalancing of demand. The contribution of government spending is expected to wind down this year, consistent with announced fiscal plans. Stretched household balance sheets are expected to restrain the pace of consumption growth and residential investment. In contrast, business investment will likely continue to rebound strongly, owing to stimulative financial conditions and competitive imperatives. Net exports are projected to contribute more to growth going forward, supported by stronger U.S. activity and global demand for commodities. However, the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance are restraining this recovery in net exports and contributing to a widening of Canada’s current account deficit to a 20-year high.
Overall, the Bank projects the economy will expand by 2.4 per cent in 2011 and 2.8 per cent in 2012 – a slightly firmer profile than had been anticipated in the October MPR. With a little more excess supply in the near term, the Bank continues to expect that the economy will return to full capacity by the end of 2012.
Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the Canadian economy. Core inflation is projected to edge gradually up to 2 per cent by the end of 2012, as excess supply in the economy is slowly absorbed. Inflation expectations remain well-anchored. Total CPI inflation is being boosted temporarily by the effects of provincial indirect taxes, but is expected to converge to the 2 per cent target by the end of 2012.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

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Flaherty Details New Mortgage Rules

2011-01-17T11:17:00.000-08:00

Concern over rising consumer debt levels is prompting Ottawa to make three new changes to Canada's mortgage rules.
Finance Minister Jim Flaherty announced Monday that new federal rules will reduce the maximum amortization period to 30 years from 35 years for government-backed insured mortgages with loan-to-value ratios of more than 80 per cent.
Secondly, Ottawa will lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes.
Thirdly, Ottawa will withdraw government insurance backing on lines of credit secured by homes.
Though longer amortization periods reduce monthly payments, they greatly increase the amount of interest paid over the life of the mortgage and make it harder to build up equity.
The average Canadian resale home sold for $344,551 in December. Assuming a five-year mortgage at 4 per cent interest, and the minimum 5 per cent down payment of $17,227, a 35-year mortgage would have monthly payments of $1,441. Shorten the amortization period to 30 years, and the monthly payment increases to $1,555.
At a news conference in Ottawa, Mr. Flaherty said the measures will encourage Canadians to save more through home ownership. He said they will also reduce the exposure of Canadians to financial risks.
Mr. Flaherty said his concern is not Canada's mortgage default rate - which is less than 1 per cent. Rather his concern is those who are borrowing as much as possible.
"We're seeing people borrow to the max, and borrowing to the max at low interest rates," he said. "Most Canadians are not doing that."
Mr. Flaherty predicted the measures will have "some moderating" impact on the housing market.
He said the changes will not take effect imediately because of a requirement to give the industry 60 days notice before making policy changes of this nature.
He said past experience suggests there is no need to fear a rush on 35-year mortgages before the new rules take effect.
In addition to cutting mortgage terms, Ottawa is taking action to reduce the rapid rise in home equity lines of credit, or HELOCs. The government will do this by clamping down on the insurance that Canada Mortgage and Housing Corp. offers to the lines of credit.
Home-equity lines of credit and loans have surged in Canada, rising at almost twice the pace of mortgages over the past decade to account now for 12 per cent of overall household debt.
The third measure that will reduce how much Canadians can draw on their home equity. Last February the Finance Department announced that it would lower the maximum amount Canadians could withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. It is now reducing that maximum to 85 per cent from 90 per cent.
Observers have been speculating that Finance Minister Jim Flaherty would take steps to tighten mortgage credit in the next federal budget. The timing of the move suggests concerns are growing in government circles about household debt and its impact on the economy.
CIBC chief economist Avery Shenfeld referred to the mortgage changes as part of a larger move by the government to “force Canadians on a debt diet” as household debt levels sit at record levels.
“Policy makers now have that credit buildup in their policy gun sights, and will use higher rates and regulatory changes to bring spending into better line with income, and cool mortgage demand,” Mr. Shenfeld wrote in an economic forecast on Monday.
“Canadians aren't on the verge of a U.S.-style default crisis – not at these interest rates, and not with debt having been granted to stronger hands than was the case before America's crisis, when subprime mortgages and credit cards were given out like candy,” he said.
But maintain this diet of borrowing for five more years and debt obesity would indeed weigh down the household sector's momentum. It's time to start the borrowing diet now, and that means policies aimed at slower debt-financed consumption growth and a cooler housing market.”
Bank of Montreal’s head of Canadian retail banking supported the government’s move, since the bank has been primarily recommending mortgages with a maximum 25-year amortization to build more equity and retire the loan faster, rather than paying more interest.
“The actions announced today by Minister Flaherty are prudent, measured, responsible and timely,” Frank Techar, president of personal and commercial banking at BMO, said in a statement issued by the bank. “For many months, BMO has been encouraging Canadians to lower their total cost of household debt by paying down short-term higher interest debt and considering the benefits of a mortgage with a 25-year maximum amortization to help them save interest costs and pay down their mortgage faster.”
It’s not the first time the Conservative government has tinkered with the mortgage market. In 2008, Mr. Flaherty announced Ottawa would no longer back 40-year amortizations, with a goal of cooling down a hot real estate market and preventing the emergence of a housing bubble in Canada. At that time, the government said it would also back only mortgages where the buyer has put down at least 5 per cent, effectively eliminating zero-down mortgages.
Last February the Finance Department lowered the maximum amount Canadians could withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. Mr. Flaherty also introduced a measure requiring borrowers to qualify for a five-year fixed-rate mortgage, even if they sought a variable mortgage at a lower rate. Until that change, home buyers only had to qualify for the higher of either a three-year fixed-rate or variable-rate mortgage.
The Canadian Association of Mortgage Professionals spoke to the government frequently over the last three months, and was pleased that the changes didn’t include any modification to the minimum down payment required to buy a home. And while president Jim Murphy said that he generally approves of the changes to amortization lengths, he hopes the government shows the same willingness to change if the market cools further.
“We understand why he did what he did,” Mr. Murphy said. “But we hope when the time comes, he’ll revisit that decision. Real estate is very important to the economy, and it’s crucial that we find a balance because you don’t want to overreact to temporary market conditions.”
He said a better choice would have been to keep 35 year amortizations, but force all applicants to qualify with the assumption of a 25 year amortization.
CAAMP, which represents the mortgage brokerage industry, released a study late last year that showed mortgage debt in Canada surpassed $1-trillion for the first time in 2010. About 22 per cent of all new mortgages had amortization rates longer than 25 years, up from 18 per cent the year before.
There was a jump in the number of Canadians using their mortgages to free up cash, with 18 per cent taking out equity as the cited a need for “debt consolidation or repayment.” The average amount borrowed against home equity was $46,000. Given that there are 5.65 million mortgage holders in Canada, CAAMP estimated the borrowing at $41-billion, about the same as last year.
“It is estimated that 30 per cent of the takeout was for debt reconsolidation and repayment,” the report stated. “Therefore, while the amount of outstanding mortgage debt would have increased by this amount, totals for other types of debt would be correspondingly reduced. About $15-billion was taken out for renovations, $6-billion for education and other spending, $7.5-billion for investments and $4-billion for other purposes.”
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Tips to Get Approved for a Mortgage

2010-12-25T19:09:00.000-08:00

If your home ownership fantasies have been rudely awakened by loan officers denying your application, it’s time to take control of your situation and learn what you can do to turn that rejection into an approval.

What are your options? Everyone’s financial situation is unique. With that in mind, here are five different options for making your homeownership dreams a reality.

1. Get a Co-signer

If your income isn’t high enough to qualify for the loan you need and if you can find a co-signer with enough disposable income, part of that person’s income can be considered toward your loan amount regardless of whether
the person will actually be living with you or helping you pay the bill. In some cases, a co-signer may also be able to compensate for your less-than-perfect credit. Overall, the co-signer is guaranteeing the lender that your mortgage payments will be paid. If you decide to go this route, just make sure that both of you understand the financial and legal obligations the co-signer takes on when he or she signs the loan documents.

2. Wait

Sometimes conditions in the economy, the housing market or lending business make lenders less generous with loans. If you’re in a climate where everyone is panicking, then it may be best to wait things out. When conditions improve, lenders may become more accommodating. In the meantime, you can work on improving your credit score, reducing your debt and increasing your savings. While you’re waiting, home prices or interest rates could drop. Either of these changes could also improve your mortgage eligibility.

3. Set your Sights on a Less-Expensive Property

If you can’t qualify for the amount of mortgage you want and you aren’t willing to wait, switching to a condo or townhouse instead of a house, accepting fewer bedrooms or bathrooms, or moving to a less attractive or more
distant neighbourhood may give you more options. As a more drastic option, you could even move to a different part of the country where the cost of home ownership is lower. When your financial situation improves down the road you might be able to trade up to the property, neighborhood or city where you hope to end up.

4. Ask the Lender for an Exception

Believe it or not, it is possible to ask the lender to send your file to someone else within the company for a second opinion on a rejected loan application. In asking for an exception, you'll need to have a very good reason, and you'll need to write a carefully worded letter defending your case. Your letter should avoid excuses and sob stories and focus only on the facts. Explain how the incident that is preventing your loan from being approved, such as a charged-off account, was a one-time event that will never occur again. This one-time event should have been caused by a catastrophe such as a large and unexpected medical expense, natural disaster, divorce or death in the family. The blemish on your record will actually need to have been a one-time event, and you'll need to be able to
back your story up with an otherwise flawless credit history.

5. Team Up With Someone Else

Two incomes are better than one, so if you can't qualify on your own, perhaps you have a family member or friend that you trust enough and like enough to make a major purchase with and live with. It won't be enough to just put them on the loan, of course - they'll need to actually help with the mortgage payments to make it work, and chances are they won't want to pay half the mortgage unless they're living in the new home with you.

Conclusion

To go from rejected to pre-approved, it's important to know what lenders are looking for in an applicant. If you've been turned down for a mortgage, make sure to ask your mortgage professional plenty of questions about things
you could do in your specific situation to make yourself a more attractive loan candidate. With time, patience, hard work and a little luck, you should be able to turn the situation around and become a residential property owner.

Bank of Canada maintains overnight rate target at 1 per cent

2010-12-09T13:41:00.000-08:00

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The global economic recovery is proceeding largely as expected, although risks have increased. As anticipated, private domestic demand in the United States is picking up slowly, while growth in emerging-market economies has begun to ease to a more sustainable, but still robust, pace. In Europe, recent data have been consistent with a modest recovery. At the same time, there is an increased risk that sovereign debt concerns in several countries could trigger renewed strains in global financial markets.
The recovery in Canada is proceeding at a moderate pace, although economic activity in the second half of 2010 appears slightly weaker than the Bank projected in its October Monetary Policy Report. In the third quarter, household spending was stronger than the Bank had anticipated and growth in business investment was robust. However, net exports were weaker than projected and continued to exert a significant drag on growth. This underlines a previously-identified risk that a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports.
Inflation dynamics in Canada have been broadly in line with the Bank's expectations and the underlying pressures affecting prices remain largely unchanged.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.
Information note:
The next scheduled date for announcing the overnight rate target is 18 January 2011. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report on 19 January 2011.

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What is the Buyer Protection Plan ?

2010-11-08T16:22:00.000-08:00

The Buyer Protection Plan (BPP) was developed by Calgary Mortgage Trainer, Greg Williamson of 180 Degrees Solutions. Williamson says the Buyer Protection Plan is based on the fact that home buying is a decision based on emotion and the fear of falling prices and rising interest rates cause potential buyers to retreat.

Interest rates are expected to rise over the next 5 years after record lows. The Interest Rate Protection program provides the buyer with protection from payment shock when the mortgage comes due in 5 years. This strategy also saves the buyer thousands of dollars by paying off the principal faster.

The Buyer Protection Plan protects home buyers if the home they buy falls in value after 12 months. This drop in value is measured by comparing the Median MLS Sales Price of similar homes in the same area both on the date the offer is made and then one year later. The Buyer Protection Plan provides up to a 10% price protection to the buyer.

For example suppose a home sold for $500,000 and the seller agrees to put 5% or $25,000 into a trust account to protect the buyer:

-if prices fall 5% or more in 1 year the buyer would get $25,000

-if prices fall but are back up or increase in 1 year the vendor would get the $25,000

-if prices fall 3% in 1 year then the buyer gets (3/5 X 25,000) $15,000 and the vendor gets (2/5 x 25,000) $10,000

Whoever gets the money from the trust account pays an administration fee of $499 plus HST.

The buyer and seller enter into a Buyer Protection Plan agreement which is referred to in the Offer to Purchase and 180 Degrees Solutions looks after the rest:

-setting up the trust account to guarantee the rebate if prices drop

- contacting the BPP approved lawyer to hold the funds for 1 year and issue cheques

- provide copies of the legal agreement

- assisting in the approval of the buyer with the BPP approved lenders and insurers

To offer the Buyer Protection Plan (BPP) to vendors, a real estate agent must apply to a Certified Mortgage Agents for the BPP. There is no cost for realtors for this service and the realtor receives his/her own website. The realtor also receives a web page for each listing as well as marketing material. The marketing material includes videos to present to buyers and sellers as well as promotional ideas for offering the BPP on listings.

Please contact Laurie Baird or Scott Mason at (250) 862 1806, your Certified Buyer Protection Plan Mortgage Brokers. and visit our site at www.buyerprotectionplan.ca/broker/laurie-baird

Okanagan Mortgages

Bank of Canada Maintains Overnight Rate Target at 1 Per Cent.

2010-10-19T12:41:00.000-07:00

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The global economic recovery is entering a new phase. In advanced economies, temporary factors supporting growth in 2010 - such as the inventory cycle and pent-up demand - have largely run their course and fiscal stimulus will shift to fiscal consolidation over the projection horizon. While the Bank expects that private demand in advanced economies will become sufficiently entrenched to sustain the recovery, the combination of difficult labour market dynamics and ongoing deleveraging in many advanced economies is expected to moderate the pace of growth relative to prior expectations. These factors will contribute to a weaker-than-projected recovery in the United States in particular. Growth in emerging-market economies is expected to ease to a more sustainable pace as fiscal and monetary policies are tightened. Heightened tensions in currency markets and related risks associated with global imbalances could result in a more protracted and difficult global recovery.
The economic outlook for Canada has changed. The Bank expects the economic recovery to be more gradual than it had projected in its July Monetary Policy Report, with growth of 3.0 per cent in 2010, 2.3 per cent in 2011, and 2.6 per cent in 2012. This more modest growth profile reflects a more gradual global recovery and a more subdued profile for household spending. With housing activity declining markedly as anticipated and household debt considerations becoming more important, the Bank expects household expenditures to decelerate to a pace closer to the rate of income growth over the projection horizon. Overall, the composition of demand in Canada is expected to shift away from government and household expenditures towards business investment and net exports. The strength of net exports will be sensitive to currency movements, the expected recovery in productivity growth, and the prospects for external demand.
Inflation in Canada has been slightly below the Bank’s July projection. The recent moderation in core inflation is consistent with the persistence of significant excess supply and a deceleration in the growth of unit labour costs. The Bank judges that the output gap is slightly larger and that the economy will return to full capacity by the end of 2012 rather than the beginning of that year, as had been anticipated in July. The inflation outlook has been revised down and both total CPI and core inflation are now expected to converge to 2 per cent by the end of 2012, as excess supply in the economy is gradually absorbed and inflation expectations remain well-anchored.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.
At this time of transition in the global recovery, with a weaker U.S. outlook, constraints beginning to moderate growth in emerging-market economies, and domestic considerations that are expected to slow consumption and housing activity in Canada, any further reduction in monetary policy stimulus would need to be carefully considered.
Information note:
A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 October 2010. The next scheduled date for announcing the overnight rate target is 7 December 2010.

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Consumers on the long end of the borrowing spectrum appear to be getting a better deal with the five-year term fixed-rate mortgage reaching an all-time low over the past month.

2010-10-18T10:10:00.000-07:00

By Garry Marr, Financial Post October 17, 2010

Rock-bottom long-term mortgage rates appear to have handed the housing sector the lifeline it desperately needs, helping to push up sales for a second consecutive month and keep prices from falling.
The Canadian Real Estate Association said Friday sales last month rose 3% from August on a seasonally adjusted annualized basis — highest since May 2010 — and the second straight month sales rose.
Meanwhile, prices have also begun to stabilize as fears of a dramatic meltdown appear to be abating. The average price of a home sold in Canada last month was $331,089, down slightly from the $331,683 average a year ago. But prices were up from a month earlier, when the average was $324,928.
“Supply and demand are rebalancing and that’s keeping prices steady in many markets,” said Georges Pahud, president of CREA.

The other factor keeping the market afloat are interest rates.
The Bank of Canada has signalled it will take a pause on raising its key lending rate which should keep the prime rate at most banks at 3%, affecting any variable rate borrowers.
But it’s consumers on the long end of the borrowing spectrum who appear to be getting a better deal with the five-year term fixed-rate mortgage reaching an all-time low over the past month.
Gary Siegle, the Calgary-based regional manager for mortgage broker Invis Inc., said the standard rate for locking in for five years is now 3.69% but adds some lenders have dropped to as low as 3.39%.
“I’ve been working for 38 years and I don’t recall rates this low ever in my career,” said Mr. Siegle, adding the discount on variable-rate mortgages has dropped to the point that consumers can float with a rate as low as 2.35%.
“The question I wonder about is at these rates is why are people not all over the real estate market?”
CREA said two-thirds of local markets last month posted sales increases with Winnipeg, Calgary and Montreal standing out. However, compared with last year, sales still lag across the country, down 19.8% in September from a year ago.
“Record level sales activity late last year and earlier this year is expected to further stretch year-over-year comparisons in the months ahead,” the group warned.
TD Bank Financial Group economist Shahrzad Mobasher Fard expects falling mortgage rates to be a significant boost for the market for the near future. “They are a factor that cannot be dismissed,” said Ms. Mobasher Fard. “[Current rates] won’t lead to an overheating but it will support further growth in home sales and prices. The last two months of data indicate there has been a bottoming out of home-selling activity and prices.”
Demand is still tepid but there has been a slowdown in new listings, which are 15% off the peak reached in April. The number of months of inventory, which represents the number of months it would take to sell inventories at the current rate of sales activity, was down to 6.6 months in September.
It was the second straight month inventory levels dropped, having stood at 6.9 months in August and 7.2 months in July.
“Mortgage lending rates eased in the third quarter, which helped support sales activity over the past couple of months,” said Gregory Klump, chief economist with CREA.
“Interest rates are going nowhere fast, so home ownership will remain within reach for many home buyers.”
The chief executive for Royal LePage Real Estate Services Ltd. said he was almost a bit relieved to see the latest figures.
“I was pleasantly surprised to see the year-over-year average price flat given the strength of last year’s September results,” said Phil Soper. “I expected a small decline in average price. It has been driven almost entirely by the low cost of money.”
Financial Post
gmarr@nationalpost.com

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Home Buyer Protection Plan

2010-10-09T08:39:00.000-07:00

Are you a buyer thinking about purchasing a property but worried because the media keeps reporting prices are going to drop further? Do you know someone who is trying to sell their home but no one is looking at it? Are you a Realtor frustrated because you have a large inventory of listings? Then you NEED to hear about the Buyer Protection Plan.

The Buyer Protection Plan (BPP) is an innovative plan for buyers of real estate. If the real estate market drops the following year after you have purchased, the buyer will be compensated for this decrease. This innovative strategy was developed by 180 Degrees Solutions Inc. of Calgary. Buyers are the first to retreat whenever there is a rumor of price drops. Through this pioneering approach, the buyer’s equity in the new purchase is protected for the first twelve months.

What if the seller was able to provide protection to the buyer through their Realtor? What if the seller could say at this time next year he was willing to offer the purchaser of his house some insurance in the event real estate prices went down? With mortgage rates at an all time low, why wouldn’t you jump into the market if you found the ideal home in the neighborhood you love, knowing that if you buy today and the market falls you will get a refund 12 months from now from the seller.

Fear of rates increasing in 5 years, could also cause some buyers to hesitate. We also have a plan to assist buyers with this dilemma - The Inflationary Hedge Mortgage Strategy. The IHS helps buyers eliminate any potential payment shock at maturity.

So if you are a buyer, what is keeping you from buying your dream home today? If you are a Realtor, you need to Contact Laurie Baird and Scott Mason today at (250)862-1806, Certified Agents for the Home Buyer Protection Plan.

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RBC Report Says Bank of Canada Likely to hold Rates Until March 2011

2010-10-06T12:05:00.000-07:00

RBC report says BoC likely to hold rates until March 2011

This month's RBC Financial Markets Monthly publication reports that the Bank of Canada is likely to hold rates until March 2010.
Report Excerpts:
Canada takes a breather after sprinting out of recession
With real GDP standing a hair’s breadth away from its pre-recession peak and final domestic demand already treading into new territory, reports of more moderate activity in July did not prove too surprising. The sharp recovery in the housing market started to stall in mid-2010 because pent-up demand generated during the recession was satiated and buying—ahead of the mild tightening in mortgage rules and the implementation or increase in the HST in three provinces—was exhausted. The robust sales pace left a high level of household debt in its wake resulting in the debt-to-income ratio rising to an all-time high in the first quarter.
Recent growth has not been strong enough to exert significant downward pressure on the unemployment rate and inflation pressures have been moderate with the core rate at 1.6%. The headline inflation rate was 1.7% in August, thereby holding below the Bank’s 2% target, even after the harmonization of provincial and federal sales taxes in Ontario and BC were incorporated into the price measure. Unlike in the US, where we expect that core inflation will remain very low, we forecast Canada’s core rate to hold just below the 2% target during the forecast horizon and gravitate above 2% in mid-2012.
Rate increases likely to resume in early 2011
Our overall assessment of the Canadian outlook has changed little in the past month, so we are maintaining our call that the Bank will gradually raise the overnight rate to 2.25% in the second half of 2011. This gradual reduction in policy accommodation will keep a lid on the degree that term interest rates will rise especially against a backdrop of very low U.S. rates. We trimmed our 2011 forecast for yields looking for the two-year rate to end 2011 at 2.85% and the 10-year bond yield at 3.75%.

Other highlights from this month's Financial Markets Monthly:

U.S. data have been a mixed bag and confirm that the U.S. recovery is continuing, albeit slowly. The risk of deflation, not inflation, appears to be at the top of the mind for policymakers now with the Fed likely to implement another round of quantitative easing to ensure that growth and inflation do not slow further.
The uncertain global outlook is likely to be the dominant factor in the Bank of Canada shifting to the sidelines for the remainder of 2010.
Policymakers in the UK are unlikely to deliver a further easing in policy unless conditions become much worse.
The RBA stayed on the sidelines this month although the statement showed a clear tightening bias which sets up for a hike before year end.
Canada’s economy sputtered in July after very robust domestic demand earlier in the year.
Inflation remains mild with both the headline and core rates below the Bank’s 2% target.
The uncertain global outlook is likely to be the dominant factor in the Bank shifting to the sidelines for the remainder of 2010.

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Eight Ways to Save Money

2010-09-24T14:02:00.000-07:00

Many Canadian families are working hard to save money and reduce debt. By saving modest amounts, however, you can reap big rewards over time. Here are easy ways you can save $100 or more this year.

1. Plug into Bargain Electricity

Are your electricity bills excessive? Maybe you're using too much power at peak hours. For instance, try running your dishwasher at night, rather than during the day. By taking advantage of off-peak rates, most consumers can save about $100 a year. Replace pre-1992 appliances when they break down with the news ones with the Energy Star label.

2. Challenge Your Property Tax

Go to your local assessor's office and find out what property taxes your neighbours are paying. If your house is similar but your taxes are higher, you may want to challenge your bill. Also, read the description of your home. Errors in square footage or the number of bathrooms could mean an overcharge. The assessor's office or local board of tax review can tell you how to file an appeal.

3. Pay Off Your Plastic

If you carry a credit-card balance from month to month, pay it back pronto. A $1000 balance at 18 percent blows nearly $200 a year in interest. If you can't pay it off in full, transfer your debt to a lower-rate card.

4. Say No to Car Extras

Your car dealer may sell you rustproof treatment and fabric protection at $100 a pop, and paint protection for as much as $250. Usually these extras are the dealer's way to squeeze more money out of you.

5. Skip the Service Contract

Extended warranties on electronics are rarely a good deal. Experts say most product breakdowns occur in the first year and are covered by the manufacturer's warranty.

6. Buy in Bulk

Items you may use a lot, such as paper towels and diapers, are often far cheaper when you buy in quantity. For example, new parents buy an average of 2400 disposable diapers in their baby's first year alone. Diapers that cost 20 cents a piece sold at grocery shops might go for 15 cents when bought in bulk at a discount store or warehouse. Just a nickel a diaper could add up to an annual savings of $120.

7. Rethink Your Vacations

The "staycation" (relaxing at home) is becoming a popular way to save a bundle on a vacation. But if you still want to travel, consider using a "homestay" program.

8. Use Online Banking

Online Banking can save you time and money. If you sometimes forget to pay bills, set up automatic payments in order to avoid potential late fees. It also allows you to monitor your cash flow more easily.

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Low Mortgage Rates Boost August Home Sales

2010-09-15T09:45:00.000-07:00

Vancouver, BC – September 14, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 35 per cent to 5,590 units in August compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province increased 7 per cent in August from July 2010. The average MLS®

residential price climbed 4 per cent to $487,804 in August compared to the same month last year.

“August home sales posted the first month-to- month increase since March of this year,” said Cameron Muir, BCREA Chief Economist. “Lower mortgage interest rates and an improving labour market are inducing additional consumer demand.”

“The number of new residential listings in the province has fallen 30 per cent since April,” added Muir. “With fewer new listings, total active listings are now on the decline, signaling that an end to the buyer’s market may be on the horizon.”

Year-to-date, BC residential sales dollar volume increased 8 per cent to $26.9 billion, compared to the same period last year. Residential unit sales rose 2 per cent to 53,717 year-to-date, while the average MLS® residential price climbed 10 per cent to $501,226 over the same period.

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Bank of Canada Increases Overnight Rate Target to 1 Per Cent.

2010-09-08T09:02:00.000-07:00

FOR IMMEDIATE RELEASE
8 September 2010 CONTACT: Jeremy Harrison
613 782-8782
Bank of Canada increases overnight rate target to 1 per cent

OTTAWA –The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding but remains uneven, balancing strong activity in emerging market economies with weak growth in some advanced economies. In the United States, the recovery in private demand is being held back by high unemployment and recent indicators suggest a more muted recovery in the near term.

Economic activity in Canada was slightly softer in the second quarter than the Bank had expected, although consumption and investment have evolved largely as anticipated. Going forward, consumption growth is expected to remain solid and business investment to rise strongly. Both are being supported by accommodative credit conditions, which have eased in recent weeks mainly owing to sharp declines in global bond yields.

The Bank now expects the economic recovery in Canada to be slightly more gradual than it had projected in its July Monetary Policy Report (MPR), largely reflecting a weaker profile for U.S. activity. Inflation in Canada has been broadly in line with the Bank's expectations and its dynamics are essentially unchanged.

Against this backdrop, the Bank decided to increase its target for the overnight rate to 1 per cent. As a result of monetary policy measures taken since April, financial conditions in Canada have tightened modestly but remain exceptionally stimulative. This is consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.

Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.

Information note:
The next scheduled date for announcing the overnight rate target is 19 October 2010. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 October 2010.

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Choosing a Contractor

2010-09-07T05:33:00.000-07:00

Choosing a contractor

Renovating a home requires an endless process of decisions. And the first one-choosing who will do the work-is often the most daunting

By Ruth Myles, Calgary Herald

When undertaking a renovation, ask family, friends, co-workers and neighbours for recommendations. And don’t be afraid to knock on a stranger’s door if you know they've had a new kitchen put in. Most people are only too happy to share their experiences.

When undertaking a renovation, ask family, friends, co-workers and neighbours for recommendations. And don’t be afraid to knock on a stranger’s door if you know they've had a new kitchen put in. Most people are only too happy to share their experiences.
Photograph by: Photos.com, Calgary Herald

The most well-known adage in real estate is "Location, location, location." The second-most famous, which applies to renovation, also features a trio: "If you’re going to have work done, get three estimates." Easier said than done. What exactly should be in those estimates? Is there a fee involved? Should floor plans and finishes be nailed down before approaching these fabled three companies? Often, the sheer scope of what’s involved can overwhelm homeowners interested in a reno, relegating the dream project to the back burner for yet another year. But take a deep breath—even better, take three—and we’ll take that first step together.

Ask family, friends, co-workers and neighbours for recommendations. (Basically, everyone you know.) And don’t be afraid to knock on a stranger’s door if you know that a house down the street had a new kitchen put in. Most people are only too happy to share their experiences. Check out local publications for renovation features and profiles of award-winning companies.

Once you’ve compiled a list of contenders, start calling around. Have footage, features and finances on hand. Many companies employ a multistage approach to estimates. The process starts off with a ballpark figure, then moves into more detailed accounting the further into the process you get. "From ballpark to budget to final, we’re going to be plus or minus 10 per cent. If 10 per cent is going to make or break the project, then we shouldn’t be in the running to begin with," says Steve Perlette, project manager at Litwiller Renovations and Custom Homes. (Hence, the wisdom of budgeting an extra 10 to 15 per cent of the total cost of the renovation. There’s nothing like scrambling to come up with an extra 15K.)

Ultimate Renovations also begins with an educated estimate; then, if both parties agree, they draw up a plan and create a spec document that details anything and everything in the job, from framing to the number of electrical outlets to the kitchen sink and its faucet. "Pay for a proper drawing and then, if you want, go shopping," says Danny Ritchie, president of Ultimate Renovations. "This way, you’re comparing the same apples to the same apples."

His company charges two per cent of the job cost for these plans, but that fee is waived if Ultimate gets the job.

In addition to checking references, Ritchie recommends that potential renovates request a visit to the business’s office, as well as current job sites, to get a real feel for the kind of work they do. "Sure, they may have been in business for 40 years, but under 40 different names." And, as different companies have different levels of spec, it’s important to ask what their level of finish is. "You can do very inexpensive casings, carpet at two bucks a square foot, stuff like that, so there can be a fairly substantial spread in specifications," Perlette adds. Once homeowners have a range of quotes from three companies in hand, Perlette recommends choosing between the ones that are consistent in pricing, throwing out the high and the low. "You’ll usually have two or three that are fairly realistic and have valuable numbers in them."

Of course, people need to look at more than just dollars and cents when it comes to choosing a renovator. The potential to establish a real connection should be the final deal-maker. (That has certainly proved true for me. Five people have keys to our home and the only one not related by blood is John, our handyman since we bought the house in 2006.) "Pick the people that you like, that you enjoy talking with, that you think you can communicate with because it’s a long process," Perlette says. "It’s very invasive. You have to live with these people for a very long time."

Calgary Herald

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Five Tips For Smart Back to School Shopping

2010-08-24T14:18:00.000-07:00

Start your back-to-school shopping with a game plan. Even if your child’s
teacher hasn’t provided a list of school supplies, you can’t go wrong by
sticking with the basics and taking advantage of back-to-school sales. Here’s
how:

Make a list and get your child involved.

Use the recommended or required supplies from your child’s school or
teacher as a starting point. If you don’t have a list yet, check with parents at
your school who have older kids. They might have good advice about what is
required in your child’s grade. Sit down with your child and go over your list
together. You’ll be teaching your child how to get organized, a skill that
applies to more than shopping.

Separate wants from needs.

Most school supplies don’t go out of style, and your child will happily use the
unsharpened pencils his older sister didn’t use. But as any parent with last
year’s superhero notebook knows, beware the power of trends. Rather than
getting into an argument with your older child about whether a backpack
with headphones is essential because “everybody is getting one,” try setting
a budget for supplies. It will help your child set priorities, learn how to
manage money, and start saving his allowance for the items your budget
won’t allow.

Take inventory.

Sort through last year’s supplies to see what is left over or can be reused.
(Having trouble finding last year’s stuff? Resolve to set up a place to keep
your school supplies together this year.)

Start early and look for bargains throughout the summer.

The best bargains are often available at back-to-school sales. Keeping your
supply list in your car or purse or on your PDA will help you shop for supplies
as you do your other errands.

Buy basics in bulk.

You know you’ll need paper, pencils, glue stick and notebooks. Dollar stores,
warehouse stores and even eBay sources for buying these and other basics
in bulk. You and a group of other parents might be able to negotiate a group
discount from an office supply store.
Then set up a supply shelf or storage container in your home that you can
use all year long. You’ll be able to avoid late-night shopping trips to buy
notebook paper when you run out. And you’ll know where to find unused
notebooks and pencils when it comes time to shop for back-to-school
supplies next year

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"North America's Story is Again Darkening", Says CIBC

2010-08-18T10:11:00.000-07:00

TORONTO, Aug. 18 /CNW/ - Continuing weakness in the U.S. economy may force the Bank of Canada to put interest rate hikes on hold after September, notes a new report from CIBC World Markets Inc.

"North America's story is again darkening," says CIBC's Chief economist in the latest Global Positioning Strategy report. "We were looking for a material second-half slowdown for the U.S. but as it turns out, it's already happened."

Economic growth stateside from April to June is being revised downward, Mr. Shenfeld notes, and key indicators are pointing to growth that will be slower than anticipated by U.S. monetary policy makers.

And still ahead is a "further fiscal belt tightening in 2011 that will have to be softened, and accompanied by quantitative easing, if the U.S. is to stay out of recession in early 2011 and get back to potential growth by the end of that year.

"Forget about any rates hikes from the U.S. Federal Reserve until sometime in 2012 at the earliest."

While Canada is in much better economic shape - it leads the U.S., Eurozone, U.K. and Japan in first-half growth and has a record gap over the U.S. in the share of working age population holding a job - it "cannot move all the way to normalized interest rates while the U.S. Federal Reserve is still on hold," Mr. Shenfeld contends.

For starters, an interest rate differential of 300-400 basis points would take the loonie "substantially stronger" creating additional headwinds for Canadian economic growth, says Mr. Shenfeld.

Furthermore, the "external environment will be one of less-than-normal growth as fiscal tightening bites in Europe and the U.S., and with our own upcoming fiscal tightening also hitting domestic demand, monetary policy might have to be set at stimulative levels to allow the economy to return to potential and remain there. To keep moving at all, you have to step on the gas if your car is trying to roll up a steep incline."

Mr. Shenfeld doubts that the Bank of Canada "has been shocked enough to forestall a rate hike in September" but his forecast that Canadian growth in Q2 and Q3 will fall below the BoC's outlook will likely warrant a rethinking in the October Monetary Policy Report and in the months to follow.

The report also notes that there are limits to how far the Bank of Canada can diverge from the U.S. Federal Reserve without later regretting it. Episodes in recent years in which rate overnight rates were 2 per cent or more above those stateside resulted in sagging or sacrificed growth. These are "lessons learned, we hope," says Mr. Shenfeld.

"Since a hike at every rate setting date through 2011 would take rates substantially higher than 2%, a pause is coming on the road to tightening."

As a result of the dampened external growth outlook, Mr. Shenfeld has trimmed his call for rate hikes. He sees Canadian overnight rates going no higher than 2% next year as the U.S. Federal Reserve stays on hold.

A less hawkish monetary policy combined with a mixed outlook for commodity prices affected by slow global growth will also likely see the Canadian dollar roughly two cents weaker than earlier forecast over the same horizon, adds Mr. Shenfeld.

The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/gps_aug10.pdf

CIBC World Markets Inc. is the corporate and investment banking arm of CIBC. To deliver on our mandate as a premier client-focused and Canadian-based wholesale bank, we provide a wide range of credit, capital markets, investment banking, merchant banking and research products and services to government, institutional, corporate and retail clients in Canada and in key markets around the world.

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Mortgage Payment Difficulties

2010-08-14T09:26:00.000-07:00

When unforeseen financial circumstances impact your ability to make regular
mortgage payments, it's important for you to take quick action. With early
intervention, cooperation, and a well executed plan, you can work together
with your mortgage professional to find a solution to your financial
difficulties.

What Can I Do to Help?

If you find yourself facing financial difficulties, as a result of job
loss, family income reductions, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.

1. Talk to your mortgage professional

To increase the chance of successfully managing your financial situation
through early intervention, call your mortgage professional at the first
sign of financial difficulty ask the mortgage professional about information on the options available for managing your financial situation and keep the mortgage professional informed as circumstances evolve.

2. Clarify the financial picture

To help your mortgage professional fully understand your financial
situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.

3. Stay informed

The more information you have at your disposal on managing your finances,
the easier it will be to make the right decisions. Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counselling, credit repair, etc. Log onto (www.igc.ca) (Industry Canada) and search for "Take Charge of Your Debts".

How Can Mortgage Professionals Help?

Your mortgage professional wants to establish and maintain a positive
relationship with you over long term, and is fully trained and equipped with
the tools to help you deal with the temporary financial setbacks you may be
facing.

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Take Time to Enjoy the Summer

2010-08-04T06:16:00.000-07:00

A Mayonnaise Jar and Two Beers…

When things in your life seem almost too much to handle, when 24 hours in a day are not enough, remember the mayonnaise jar and the 2 beers.

A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was.

The professor then picked up a box of pebbles and poured them into the jar He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full. The students responded with a unanimous 'yes.'

The professor then produced two beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand. The students laughed.

'Now,' said the professor as the laughter subsided, 'I want you to recognize that this jar represents your life. The golf balls are the important things---your family, your children, your health, your friends and your favorite passions---and if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like your job, your house and your car.

The sand is everything else---the small stuff. 'If you put the sand into the jar first,' he continued, 'there is no room for the pebbles or the golf balls. The same goes for life. If you spend all your time and energy on the small stuff you will never have room for the things that are important to you.

'Pay attention to the things that are critical to your happiness. Spend time with your children. Spend time with your parents. Visit with grandparents. Take time to get medical checkups. Take your spouse out to dinner. Play another 18. There will always be time to clean the house and fix the disposal. Take care of the golf balls first---the things that really matter. Set your priorities. The rest is just sand.'