Your Edmonton Mortgage Blog

Unhappiness & the Fear of Not Fitting In

2012-02-23T14:33:00.002-07:00

In light of Mark Carney’s latest warning about the high levels of consumer debt I offer you a sobering article from Gail Vaz-Oxlade about what we really need in life and why we buy so much stuff...

Unhappiness & the Fear of Not Fitting In

by Gail Vaz-Oxlade

Social pressure to conform isn't in your imagination. It’s real.

If it’s such common sense to only spend what you can afford, why do so many people spend money they don’t have – use credit, in other words – to buy things they want?

Think about it for a minute? Why did you whip out your credit card and pay for that meal in a restaurant, pair of new shoes, or groceries? Why did you buy that big screen TV on a buy-now-pay-later program? Why did you use your line of credit to pay off your credit card? Be honest. Why?

People want to maintain lifestyles they can’t afford. Whether it is the social pressure to conform, our own sense of entitlement, or a disregard for the potential risk we place ourselves in when we use credit to buy STUFF, we’re delusional.

There are actually people out there who believe that using credit is “normal”, that it’s what they should be doing. After all, their parents did it, their brother’s doing it, so is their best friend. In fact, most of the people they know are doing it.

It’s as if people are afraid to just be. They have to drive the right car, go on an annual cruise, have new leather furniture, watch a high-definition, big-screen television, eat out three or four times a week, drink the best Scotch, or consume store-bought coffee every day. And they’re willing to exchange hours, days, months, years of peace of mind for the momentary high that comes with the new acquisition. Whazzup with that?

Social pressure to conform isn't in your imagination. It’s real. But if you submit, if you’re willing to live a life of smoke and mirrors, if you want it ALL right NOW, then you need to accept that you’re creating a miserable life for yourself. It’s only a matter of time before the piper comes a’knocking.

One way to gain some perspective is to ask yourself (and your partner) what it is you really want in life. If you only had six months left on this sweet earth, what would you want to be doing? Would you be shopping for new furniture? Would the kind of car you drive really make a difference? How about the handbag you’re carrying?

I often talk to my daughter, Alex, about how important it is to live a worthwhile life: A life that brings challenge and love, that allows you to share, to laugh, and to be happy.

So, what are the things that make your life worthwhile? And what are you doing to put more of the things that make you happy into your life?

Want a great book to read on happiness. Read The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom by Jonathan Haidt, Associate Professor of Psychology University of Virginia. Terrific book. Lots of great ideas on what makes us happy and what you can do to be happier.

If you love your life (as opposed to your stuff), relish the time you spend working, look forward to seeing the people you share your space with, and feel as if you’re making a difference, I don’t think the kind of car you drive, whether you have a big-screen TV, or how often you eat in a fancy restaurant will mean much. If you can focus on creating the life you want, taking small steps to achieve your goals and finding a way to laugh while you’re doing it, I’m willing to bet you won’t even miss your credit cards.

As Jonathan Haidt’s website (www.happinesshypothesis.com) says, "Happiness is not the shallow state of feeling pleased and chipper all the time. Happiness is the state of a human being that has achieved cross-level coherence within herself, and between herself and the people, challenges, and institutions around her. Happiness comes from between."

Mortgage rates still lower-than-ever!

2012-02-10T11:36:00.004-07:00

The big banks may have cancelled their 4 year rate promo at 2.99% early but the lenders I work with haven’t!!! If you want great rates and professional service deal with a reputable Mortgage Broker!

Article: Big Banks cancel rate promotions early

Last Updated: Feb 10, 2012

1 YR FIXED TERM 2.75 %
2 YR FIXED TERM 3.25 %
3 YR FIXED TERM 2.89 %
4 YR FIXED TERM 2.99 %
5 YR FIXED- Standard 3.29 %
5 YR FIXED- Value Mortgage 3.19 %
5 YR FIXED- 5% Cash Back 5.29 %
VARIABLE- 5 Year Term 2.90 %
7 YR FIXED TERM 3.99 %
10 YR FIXED TERM 3.99 %

Mortgage Success broker rates represent the typical discounted rate available to borrowers with strong credit, qualifying income and assets, on conventional real property that meets lending value requirements. This data is for information purposes only and should not be relied upon without verification by contacting your Mortgage Associate or the indicated financial institution. Rates are subject to change without notice, are compounded semi-annually and not in advance. In unusual circumstances lender or broker fees may apply.

HBP vs TFSA to buy your first Home

2012-01-30T12:40:00.002-07:00

When it comes to scrounging up a down payment for a first home, many homebuyers take money where they can find it. If they've been socking away money in their RRSP for the last few years - and reaping the rewards of tax savings on the money - chances are there isn't a lot of money saved in other places. It seems logical, then, to take advantage of the government's Home Buyers' Plan and dip into those retirement savings, use them as a down payment, and repay the money over the next 15 years. After all, retirement is still most likely quite a ways away, right?

This article in the Financial Post questions whether it's really wise to sacrifice the growth of your retirement savings in favour of buying a home today.

It gives the example of a 30-year-old individual with RRSPs valued at $30,000, earning 8% per annum on average. If there were no HBP withdrawal, the RRSP would grow to $139,829 by age 50 and $301,880 by age 60. But take $20,000 out and repay it over 15 years and the RRSP would be worth $92,215 at age 50 and $199,805 at 60.
Instead, the article suggests taking advantage of a TFSA and drawing a down payment out of this newer investment vehicle. While there are definite pros to using a TFSA, in most cases the government's Home Buyers Plan is just the more logical option. Here's why:

1) Tax savings when you need them.
Let's face it - most people purchase their first home relatively early in their working life. When you're not earning a lot, you're not saving a lot either. Socking money away in an RRSP is great primarily because of the tax return you receive every spring - money you can either put back into your RRSP, or spend elsewhere. Either way, it's a great incentive - and great motivation to choose the RRSP over the TFSA.

2) You can only save so much.
To go with the above point, early in your career, there's only so much money to go around - and you can only save so much. While the article suggests using $20,000 from a TFSA and combining it with $25,000 in the HBP to put towards a new home, realistically most people just don't have this type of cash.

3) Retirement is still a ways off.
While you will lose some of the advantages of compound interest by dipping into your retirement savings, there is nothing stopping you from increasing your RRSP contributions down the road to make up for the loss. You also aren't obligated to take the full 15 years to pay back the funds you borrowed under the HBP. The quicker you pay it back, the quicker you can start saving again.

4) A home is an investment, too.
Yes, dipping into your RRSP to purchase a home will cost you in accumulated growth. But by using that money to purchase a home, you're essentially diversifying your retirement nest egg. If your home is a good investment - that will either increase in value or, at the very least, keep its value over time - you're in a good place. Come retirement, you'll likely be mortgage free with a nice piece of equity on your hands.

Pulling your down payment from an RRSP versus a TFSA also has a lot to do with your personal financial situation. In many cases, a TFSA makes more sense. To find out what's right for you, give us a call and we'll be happy to help.

A glimpse into the future: The 2012 Realtors Housing Forecast Seminar

2012-01-12T16:22:00.018-07:00

Yesterday I had the pleasure of attending the annual conference at the Northlands Expo Centre. I love attending this annual event because it gives me a quick overview of what’s been happening in the real estate market in the last year and also gives me some educated opinions on what to expect in the coming years.
Here’s are some highlights from the forecast:

Speaker 1: Edmonton’s Strength, Peter Howard, President and CEO of the Canadian Energy Research Institute

-nothing really new here. Alberta has oil. This translates to jobs and money. Lots of both!
-Peter explained some of the projects currently in the works as well as projects slated for future development. The amount of money and the size of these projects is staggering.
- Here’s an excerpt from one of the presentation slides: If further development of the oil sands continues, the economic impacts of the existing and currently under construction projects would continue into the future
• Generating $4.7 trillion of GDP Growth
• Direct employment would grow from 132,000 to 533,000 jobs by 2035
• Royalties to the Alberta Government would grow from $3.5 billion to $60 billion per year by 2020. This is based on the assumption that crude oil prices will continue to rise

Speaker 2: Edmonton’s Economic Outlook in the Alberta Context, John Rose, Chief Economist, City of Edmonton

-Canadian domestic conditions remain good, Alberta continues to outperform the national average
-Slower US expansion will slow growth, particularly in Eastern Canada
-2011 has been a solid year for GDP growth & outstanding employment growth in Edmonton
-Alberta’s labour market is beginning to tighten. Unemployment rates that go significantly below 5% will trigger wage increases and higher inflation. Most of the jobs lost in 2008 & 2009 have now been recovered

Speaker 3: Gary Klassen, General Manager of Sustainable Development, City of Edmonton

This was one of my favourite presentations as I really love to learn about the new and exciting projects the City has on its radar. Listening to this presentation made me realize how lucky we are to live in a place with such prosperity and development. John spoke about a few cities in the United States which have decreasing populations and the problems that come with it.
We are experiencing the complete opposite in Edmonton, and we have money to spend on a variety of exciting projects such as:

1. City Centre Redevelopment: there is a 15 month master plan process currently underway to revitalize Edmonton’s downtown. There is a lot of money and time being spent on a variety of projects in our downtown core. These include:

a. the LRT expansion which is currently underway which includes a 30 year plan to extend the LRT in six different directions within the city. The new look and feel of the expansions will be more European in style and feel which will include LRT tracks that weave through communities using low-floor technology instead of the old style where the tracks cut communities in half

b. Proposed Sports & Entertainment District: new arena project: this project has been hotly debated in the last few years but now has the go-ahead

c. The Quarter’s downtown: I actually heard this new project being discussed on CBC radio this morning. It is a city initiative to revitalize the area east of Jasper Avenue & 97th street. Apparently when the Hudson’s Bay Company moved out of this area in the early 1900’s the neighbourhood became rundown and has been so ever since. The City has spent a lot of money purchasing the land in this area and are upgrading the service lines within the area to get it ready for the future. The plan for this area includes a community housing around 20,000 people in a mixed use area including mostly pedestrian streets and mixed use homes including artist live-work spaces. I am really excited about this project! It’s about time something promising happened to this prime land in the heart of our city

d. West Rossdale: the former power plant (and historic building) will be transformed into a “diverse, sustainable neighbourhood with a broad range of commercial, retail, public parks and other amenities”

e. Other notable projects include: the new, soon-to-be-built, museum downtown and the re-development of the old city airport to a new sustainable neighbourhood

On a side note, I also heard on the radio this morning that the developers that built the Icon Towers on 104th Street have just purchased a surface parking lot on 104th street and 102nd avenue to build another high-rise mixed-use building. 104 Street is one of my favourite places to be on a Saturday morning in the summer...looking forward to seeing this new project break ground. It’s already a great street, sounds like it’s going to be even better!

I am so excited about all of these amazing projects! It’s exciting to live in a place that is growing and improving!

Speaker 4: Economic and Financial Trends, Mike Drotar, VP Treasury, Servus Credit Union

Mike’s main points regarding Canada’s economy were:

-economic growth forecast 2012 +2.3%, 2013 +3.0%
-Inflation at manageable levels 2.1%, midpoint of target range 2012/2013
-Bank of Canada held steady on rates since September 2010. Next move likely in 2012/2013.
-Household debt levels closely monitored and many are at risk in a rising rate environment
His thoughts on the global economy?
-USA faces considerable challenges to regain its influence
-American banking system is stabilizing, a requirement for full recovery
-European banks under tremendous stress, painful austerity measures necessary
-Oil prices expected to remain elevated, average in the triple digits

Speaker 5: Edmonton Housing Analysis, Richard Goatcher, Senior Market Analyst, Canada Mortgage and Housing Corporation

• Full time employment grew rapidly in 2011- expect the housing market to follow in 24-48 months. The average weekly earnings remain on an upward trend, Alberta’s net migration was up in 2011 (still below peak levels).

• Edmonton’s Resale Home Market: ownership costs remain below the peak levels seen in 2007 & 2008 (this makes sense as prices and interest rates are lower than during 07 & 08). The current market still favours the buyer meaning price gains will remain modest in the short term.
• Edmonton’s New Home Market: prices to edge upward in 2012 but to remain below peak levels

• Edmonton’s New Home Market (Multi-Family): 2012 to remain close to 2012 levels, units under construction up 12% yr/yr in November, complete and unabsorbed unts edging downward in 2011 Q4

• Edmonton’s Rental Market: activity levels of rental housing starts have rebounded in 2011 and are higher than in 2007. Improved demand for rental properties have helped vacancy rates come down, as vacancies decrease rents will move upward.

Speaker 6: MLS® System Market Forecast, Doug Singleton President, Realtors ® Association of Edmonton

Forecast (Commercial):
• Industrial and commercial development plus refurbished properties create churn
• Increasing population creates more “Mom & Pop” business start-ups and warehouse condos
• Realtors® continue to serve investors, entrepreneurs

Forecast (Residential Sales, Single Family Dwellings):
• New home construction continues to provide opportunities at the outer edges of the community
• Strong demand for home renovation materials
• Strng preference for a “home of their own” with increased privacy, independence and the “joys” of home ownership
• Labour shortage in Alberta will create in-migration and maintain the demand for home sales

Forecast (Residential Sales, Condos):
• Condo purchase – a lifestyle decision
• Singles, young couples, empty nesters, first time buyers
• Families prefer their own yard and independence

Presentation Summary:
• Housing market- stable with normal patterns (seasonal)
• Prices- fluctuate in narrow range but trending up
• Sales- steady in harmony with seasonal trends
• Average days on market may drop t0 45 days if inventory drops

My two cents: as you can tell from the above, this was a very positive forecast for 2012. All signs indicate that Alberta is a great place to live and work. Interest rates remain at low levels, the real estate market is healthy, and the economy is robust. The future of this city looks bright!

Interest Rates down again!

2012-01-05T11:11:00.002-07:00

Hope you’ve all had a great Christmas and are having a very Happy New Year so far! Wanted to let you all know that the five year interest rate has come down yet again, we are now sitting at 3.29% for a five year, fixed, closed rate!!! I have NEVER seen five year rates this low- if you are considering buying or refinancing now might be the best time to do it!

Link: interest rates

Merry Christmas and Happy New Year!

2011-12-22T14:01:00.005-07:00

It’s hard to believe another year is quickly drawing to a close! The holiday season is a great time to stop, take a little break and realize how thankful you are for everything in your life.

So, I’d like to take this opportunity to thank you very much for your patronage and to wish you a very Merry Christmas and a Happy New Year! I really enjoy getting to know each and every one of you and count the opportunity to meet and connect with so many great people the greatest perk of my job!

I’d also like to thank you for all of your referrals during the past year. It is wonderful to know that you value my service enough to recommend me to your closest friends and family. As always, I promise to treat any of your referrals with the utmost care, consideration and respect. Thank you again!

2011 has been an interesting and busy year in the mortgage business, especially because of the rock bottom interest rates we’ve enjoyed throughout the year. If the experts are correct, we’ll continue to enjoy low rates for much of 2012 and beyond, at least until the rest of the world can get their economies in order. Alberta continues to be a leader in Canada and the rest of the world as far as economic stability is concerned so we should all take a moment to be thankful that we enjoy the amazing opportunities that come with living in Alberta.

Wishing you and your loved ones much health and happiness in 2012.

Cheers and all the best!

Housing market remains "resilient"

2011-12-15T14:55:00.002-07:00

The Canadian Real Estate Association has released its latest numbers, showing that existing home sales rose in November. The association cites low mortgage rates as the major factor in the increase in sales.

It’s certainly true, five year mortgage rates are the lowest I’ve seen (and I’ve been brokering nearly five years). When I started five years ago, the five year fixed rate was approximately 6%. Let’s compare the difference five years can make!

$250,000 mortgage over a 30 year amortization @ 6.00% = $1,487.06/month
$250,000 mortgage over a 30 year amortization @ 3.39% = $1,104.04/month

That’s a whopping $383.02/month in savings! Not only have house prices come down substantially from 2006-2007 so have rates creating what may turn out to be the perfect time to purchase your first home!

If you’d like to play around and calculate some mortgage payments yourself, please go to my calculator: http://www.youredmontonmortgage.com/index.php/mortgage_calculators

Thinking about getting into the housing market and not sure how to start? Click here to apply now, I’ll give you information on how much you qualify for and how to improve your credit situation (should it need improving). Of course, if you’re simply in the information gathering stage please feel free togive me a call or send me an email. I’d be happy to answer your questions!

Article: Househunting.ca “Existing home sales rise in November”

Preparing for larger mortgage and debt payments

2011-12-02T09:34:00.004-07:00

Mortgage interest rates have been at historical lows for quite some time, as we all know, this can only last so long. At some point interest rates will rise and many Canadians will be faced with higher mortgage and debt payments. Watch the video below from GlobeInvestor explaining what you can do to prepare for higher payments in the future.

Watch the video here!

How to choose a Real Estate Agent

2011-11-28T11:56:00.002-07:00

Finding the right real estate agent to list a home can be a lot like finding a life partner - pick the right one and the experience can be positive. Choose the wrong agent and the experience can lead to months of frustration and an unsold house.

Ted Baker recently sold his mother's house and shares the trials and tribulations from his experience. Tony Joe, a real estate agent with Re/Max Camosun Oak Bay, was the listing agent and shares his insight on today's changing market.

For some people it's not difficult to choose a real estate agent - they pick one based on personal recommendation from friends and family. According to a report by the National Association of Realtors, more than half of home buyers found their agent this way.

"People typically go with people they know," says Joe, who has been selling for 20 years. "For the consumer's standpoint its all about networking. Unlike other areas of sales, real estate agents have access to the same inventory pool. What sets them apart is their level of experience, professionalism, knowledge and . marketing or negotiation style."

He says that more than 90 per cent of his business is from referrals, compared with the industry average of 50 per cent.

"Personality has a lot to do with it," says Baker, who used to do renovation work on homes. "One needs to be able to rely on the capability of the agent to get the job done."

To help you select an agent with the right skills, testimonials, experience, competence and reliability, here are a few pointers.

BE PREPARED

Information is power. Baker suggest people get an independent appraisal - which costs about $125 - to get an independent third-party evaluation of the property.

A pre-sale home inspection is also useful to identify and correct potential problems in a house. A buyer will likely uncover the same issue when they get the house inspected as a condition of the sale.

BEWARE OF AN AGENT TRYING TO BUY A LISTING

In order to secure a listing, some agents will purposely overvalue a home. They tell potential clients they can get more for a house than other agents.

Because the inflated house is more expensive than comparable homes, it will linger on the market until the price is lowered.

"Ask the real estate agent to justify the price," says Baker. "Ask to see listings of homes for sale in the last three to four months for comparison."

INTERVIEW PROSPECTIVE REALTORS

Increasingly people interview a number of agents to determine if the "chemistry" works.

"Ask about productivity," says Joe. "Real estate is a complicated process. Find out about the agent's knowledge and experience."

ASK ABOUT EXPECTATIONS

"When I interviewed different agents, I asked them 'What are you going to do for me?' " says Baker. Some agents have a detailed written plan about how they will advertise and market a property.

ASK FOR RECOMMENDATIONS

Any agent who has been selling for a while should have a list of happy customers. Many people would trust a recommendation by a friend or family member. As a last resort, a person can review a real estate agent's qualifications by viewing their website.

ASK ABOUT COMMISSIONS

Real estate agents can be flexible as to the commission structure. Most charge six or seven per cent on the first $100,000 and three per cent on the balance. Some have a flat percentage of the total price. On a $500,000 house, with the above 7/3 calculation, a seller would pay the agent $19,000. Finding an agent who will sell for less will obviously affect the bottom line.

"The only question I regretted not asking was if the agent would reduce his commission if the house sold within 30 days," says Baker. "Because there would be less work involved - fewer open houses, fewer showings - shouldn't the cost of selling also go down?"

Also, when an offer is tendered and the parties are slightly apart, it is appropriate to ask if the agent is willing to forgo a portion of their commission in order to secure the sale.

FIND OUT IF THE AGENT IS GENEROUS TO OTHER AGENTS

One of the reasons a person lists a home with a real estate agent and the professional listing service is because he wants other real estate agents showing the home to their clients.

A listing agent who is generous in sharing the potential commission with others typically gets more house viewings.

"Not all agents work well with others," says Joe.

FIND OUT HOW MANY OTHER LISTINGS AN AGENT HAS

"An agent with 50 listings is spread out too thin," says Baker. "There's no way an agent with that many listings can put time into a sale."

He is more comfortable listing with an agent who has, at most, 10 listings to service.

FIND THE MARKET THE AGENT IS TARGETING

It is important that the agent chosen has experience both in the property type and price range. If he primarily sells luxury houses, he is not likely going to have many buyers looking for an entry-level condominium, for example.

FIND AN AGENT WHO KNOWS THE REGIONAL MARKET

Baker says he recommends finding an agent who works within 15 kilometres of the listed home. "He will know the area and he will know the market better."

TYPICAL FAQS

Here are a number of interview questions that people have posed to Tony Joe in his career:

General

How long have you been selling real estate full time?

How many transactions have you been involved with in your entire career?

How many transactions did you handle in the last calendar year?

How many transactions have you handled year-to-date?

Have you ever been subject of a disciplinary action?

Are you a listing agent or a buyer's agent?

If both, what is your percentage of listing sales to buyer sales?

Do you have a list of references to call and a list of testimonials? Can you have another professional real estate agent vouch for your business practices and integrity?

What price range do you generally work in?

Do you dual represent or "double end"?

Do you have a network of other productive agents from other firms which you work with?

Do you attend training and technical update seminars above and beyond the local minimum standards?

What would you say are your strongest attributes as an agent?

For people looking to buy a home

Are you experienced in multiple offer scenarios?

Do you have contacts in the mortgage business?

Is your negotiation style collaborative or confrontational?

Can you recommend building inspectors who will be critical and prepared to fail a house on inspection?

What is your after-sale support program?

For people looking to sell

What is your success rate (listings taken to sold)?

What is your list price to sell price ratio?

What is your average days on market?

What is your advertising strategy? Do you have a marketing plan?

Do you provide feedback from agents?

Tell me about a recent complicated transaction for which you found the solution.

parrais@timescolonist.com

© Copyright (c) The Victoria Times Colonist

http://www.househunting.ca/edmonton/Buying-Homes/choose+real+estate+agent/5299431/story.html

Minimalist living

2011-11-21T12:08:00.002-07:00

If you've ever pined for more closet space - or a bigger garage - check out these homes. You'll feel better for it!

http://blog.buzzbuzzhome.com/2011/04/coolest-tiny-houses-in-world.html

We should be more like Edmonton

2011-11-14T11:14:00.002-07:00

Toronto wishing it was more like Edmonton? Yes, folks...that’s right! Read on to see how the River City rivals other large Canadian cities in regards to its eco-friendliness.

We should be more like Edmonton

National Post • Nov. 12, 2011 Last Updated: Nov. 12, 2011 4:11 AM ET

Toronto doesn't wear its green badge on its sleeve - we leave that to Vancouver - but there's a lot to be proud of when it comes to our environmental initiatives.

There aren't many other Canadian cities, for instance, that have a functioning Green Bin program, let alone one that returns the finished compost back to residents free of charge at regularly scheduled Environment Days. And what other city boasts the ability to air-condition almost all of its downtown core during the summer, skyscrapers included, with borrowed lake water?

When compared to, say, Calgary - which just learned how to recycle two years ago - Toronto looks pretty good. Yes, it's transitioned from a transit-loving mayor to a carloving, gravy-hating mayor, meaning a lot of city-run green initiatives are on the chopping block, but as long as the Toronto Environment Office continues to exist, tangible progress should be made.

Having said this, another Canadian city is quietly outshining Toronto when it comes to truly innovative environmental practices. It's a city that, ironically, is neighbours with oh-hey-we-just-started-this recycling-thing Calgary. It's also considered the corporate base for those working in Alberta's tar sands and, earlier this year, it was named the homicide capital of Canada. Yes, we're talking about Edmonton.

It gets a bad reputation, if it gets any at all, but the city has a unique political advantage when it comes to the environment: It forms a left-leaning, NDP-voting pocket in an otherwise Conservative-voting province, and when it receives money from the Alberta government, which is wealthy enough to give at least some cash to its urban centres, Edmonton's council often allocates these funds to green initiatives.

One of these is the revitalization of the North Saskatchewan River Valley, which runs through the middle of Edmonton and - at 48 kilometres, with 22 parks along its route - represents the largest expanse of urban parkland in North America. In fact, there's a staff of eight urban park rangers enlisted to protect it. Like most rangers, their job is to protect people from nature, and nature from people (although this team must contend with more drunken inline skaters than lost hikers).

What's noteworthy, however, is that Edmonton actually puts aside money to ensure full-time supervision of its parks system, unlike Toronto, which has numerous volunteer associations dedicated to preserving the Don Valley river and ravines but limited resources devoted to monitoring any of it. Part of the reason may be that while Toronto tends to view its waterways as just one of its many natural features, Edmonton considers its so-called "Green Ribbon" to be part of its soul.

"We're constantly telling people, 'This is the jewel of our city,' " says Greg Komarniski, leader of the urban park ranger program in Edmonton. "We're immensely proud of it. The health of the river valley is not only important, it's very emblematic of who we are, what we're all about."
The city isn't just giving money to its physical green space. Much of Edmonton's financial support is reserved for less glamorous initiatives, usually involving garbage, and this is where it seriously goes over the top: Consider the Waste Management Centre of Excellence - an entire organization devoted to nothing but the pursuit of excellence within the field of trash.

It really is quite something to behold - and it should be noted that absolutely anyone can behold it, for free, usually with a guided tour thrown in and sometimes even a complimentary shuttle bus from downtown, because there's a policy around full transparency.

Within a single compound, there exists: A solid waste sorting facility, research and development labs (right now, they're looking into composting drywall), recycling plants for both household waste and construction/demolition waste, the largest co-composting facility in North America, an e-waste recycling factory, an Eco Station for drop-offs of hazardous waste and bulky items, a landfill with a built-in gas recovery system to capture and convert methane into electricity, a leachate treatment plant, a biosolids storage lagoon system and an education centre.

That's not all. Under construction is a waste-to-biofuels facility, the only one of its kind in the world, which will bump up Edmonton's diversion rate to more than 90% - as in, 90% of its garbage not going to landfill. When operating, it will convert 100,000 tonnes each year of non-recyclable and non-compostable waste into 36 million litres of ethanol, reducing Alberta's CO 2 output by reducing Alberta's CO 2 output by more than six million tonnes over the next 25 years and creating 180 green jobs.

Oh, and that remaining 10% comes from the leftover char at the biofuels facility, which could be used to pave local roads, meaning it's possible the city will hit a 100% waste diversion rate.

This project is being funded by the City of Edmonton, the Government of Alberta and Enerkem Alberta Biofuels, making it the latest in a string of successful public-private partnerships at the WMC. This type of arrangement - to which Torontonians often put up a fair amount of resistance, at least until there's a three month-long garbage strike in the middle of a hot summer - is precisely what Edmonton relies upon to remain competitive, innovative and profitable in the green sector.

"I definitely wouldn't say that we're innovative because we have more funds than other cities," says Connie Boyce, a representative for Edmonton's waste management services. "We're just as stretched for dollars as any other city. The reason we're innovative and have achieved what we have is due to private investment."

But it's also about perspective: Instead of looking at trash as something useless, the people of Edmonton began realizing a while ago that it can be something profitable - there's value, after all, in those empty glass bottles, broken computers and even an unfinished doughnut. Furthermore, a lot of money is saved when there are fewer trucks having to collect and transport waste to a landfill.

"We have strong leadership here and a general willingness to be progressive and green," Boyce says, "but public engagement has been an integral part of our system from the beginning."
Here in Toronto, there is plenty of demand for progressive environmental initiatives and even greater demand for the kind that might save us money, whether it applies to our waste (does anyone know where it goes these days?) or the Don River and surrounding parks system. The environment may not be a priority on Rob Ford's agenda, but co-operation between city council, the private sector and the general public - with transparency as the name of the game - could lead to huge steps forward.

Why it isn't a good idea to keep all your eggs in one basket!

2011-11-09T15:46:00.002-07:00

Here’s a very interesting article written by a very knowledgeable mortgage broker in Ontario regarding why it’s often not a good choice to hold all of your bank accounts, mortgages, credit cards and loans with one institution...

The Americanization of Canadian Credit

by Dave Larock

I suppose it was inevitable that some of the more aggressive U.S. lending practices would make their way north of the border after our Big Five banks started buying up regional U.S. banks.
It’s probably just too tempting when two-thirds of Canadian mortgage borrowers still walk into their local branch and sign the mortgage contract put in front of them with few questions asked about the fine-print terms and conditions. That kind of blind loyalty has been very profitable for the Big Five over the years.
So why are Canadians always surprised when they learn later that the terms and conditions in their unread Big Five mortgage contracts are so heavily tilted in the bank’s favour?
I’ve provided many examples of what to watch for in previous posts (the whole Borrower Beware section of my blog is devoted to this subject), and today’s post will serve as my latest instalment. I’ll quote two new sections that were recently added to a Big Five lender’s standard charge terms, and then comment on each. (As an added bonus, I’ll also use a legible-sized font that can be read without a magnifying glass.)
Addition # 1: Bank May Appropriate Payments to Any Debt
It is hereby agreed that the bank shall have the right at any time to appropriate any payment made as a temporary or permanent reduction of any portion of the Indebtedness whether the same be represented by open account, overdraft or by any bills, notes or other instruments and whether then due or to become due and may from time to time revoke or alter such appropriation and appropriate such payment as a temporary or permanent reduction of any other portion of the Indebtedness as in its sole and uncontrolled discretion it may see fit.
Translation: This new clause allows the bank to take any payment you make on any one of your accounts and apply it to any of the other accounts you hold with them instead.
Implications: Let’s assume that the euro zone crisis blows up the global economic recovery and you lose your job. Without enough money to pay all of your bills, you decide to let an unsecured line-of-credit lapse while continuing to make regular payments on your mortgage. If both of these products are sourced from this bank, they can now take the payment you made on your mortgage and use it to pay your unsecured line of credit instead. This transfers the shortfall to your mortgage account, which has your house secured against it as collateral.
Now this Big Five lender can decide which of your accounts won’t get paid if you fall behind. If push comes to shove, they can basically force your mortgage into default and sell your house because you didn’t have enough money to pay your unsecured line-of-credit.
How many borrowers were aware that they were pledging their house as collateral against every credit product they have with this bank? And if this new clause means that your unsecured products (credit cards, lines-of-credit) are effectively being secured by your family home, why are you still being charged much higher interest rates for these products? Isn’t this a clear case of “Heads I win, tails you lose”?
Addition # 2: Charge Continuing Security
It is hereby agreed that this Charge may secure a current or running account and shall stand as a continuing security to the Bank for the payment of the Indebtedness and all interest, damages and Costs which may become due or payable to the Bank notwithstanding any fluctuation or change in the amount, nature or form of the Indebtedness or in the bills, notes or other obligations now or hereafter representing the same or any portion thereof or in the names of the parties to the said bills, notes or obligations of any of them.
Translation: When a lender gives you a mortgage, they register a first charge on your property’s title to ensure that if you ever sell your property, your real estate lawyer can’t cut you a cheque until their mortgage had been paid in full. Fair enough. But this new clause means that this Big Five bank can now insist that all of its accounts be paid in full before any sale proceeds are subsequently paid to you – even unsecured accounts that you never thought would be tied to your house.
Implications: Let’s assume that you are going through a divorce and your spouse racks up huge credit card bills during the separation period. When you sell the matrimonial home this bank can now legally insist that the money from that sale be used to pay off all of each borrower’s accounts, including your spouse’s supposedly unsecured credit card balance, without any additional authorization or consent by you. All for one and one for all!
The defence against both new clauses is the same. Don’t get your mortgage where you borrow for any other purpose if your real estate lawyer identifies these clauses, and confirms their implications, in your standard charge terms.
It’s clear that all of the talk about slowing growth and rising recession risks has some of the Big Five battening down the hatches by very quietly altering their mortgage terms and conditions. While each change may seem to affect only a small subset of borrowers, why take the chance that you might be one them when you can find better (or at least the same) rates at other lenders who don’t stack the deck against you?
Borrower beware, indeed.

Bank of Canada holds steady

2011-10-25T15:18:00.000-06:00

As predicted, in an announcement earlier today the Bank of Canada has left its key interest rate unchanged at 1%. This is good news for variable rate mortgage holders, and the even better news is that the bank hinted strongly that the rock-bottom low rates might be here for a while. The reason? A worsening global economy. Until the rest of the world starts to come out of this mess the Canadians will be enjoying very low prime lending rates.
This latest interest rate announcement is the 10th consecutive time the Bank of Canada has held steady on the benchmark lending rate.
The next scheduled interest rate announcement by the Bank of Canada is set for Tuesday, December 6th 2011.

Edmonton is more than a mall

2011-10-12T16:09:00.000-06:00

What’s the first thing that comes to mind when you mention Edmonton to someone elsewhere? The mall. Yes, we are so much more than that! A great, smaller city with a lot of options for having a great time that don’t include shopping at West Edmonton Mall.
If you’re contemplating moving to this great city, read on for some unique things to do in the river city...

Edmonton is more than a mall

Globe and Mail Update
Published Tuesday, Oct. 11, 2011 4:41PM EDT

For most visitors, Edmonton is defined by the string of Stanley Cup victories that took place in the 1980s and the West Edmonton Mall. But there's another side to the city that you probably don't know about, and it's worth investigating if you're in town on business. There might not be a sign on the highway into town proudly heralding the accomplishments of Edmonton's cultural communities, but the city is quickly earning a reputation for its work in that area. You can start exploring that reputation by heading downtown to Churchill Square, which is located on the corner of 102 Avenue and 100 Street.

If you don’t know how to find that corner, take heart, because you’re not alone. For some reason, the earliest Edmontonians decided that the city ought to be operated using a grid system, even though the streets don’t always co-operate by running in straight or even parallel lines. If you get confused, try to remember that the city’s streets run north-to-south, and its avenues east-to-west. And if you’re really confused, ask somebody – crime statistics notwithstanding, Edmonton is actually a very friendly city.

From there, you can head off in a number of directions. One block to the northeast you’ll find the Art Gallery of Alberta, one of the most beautiful buildings in the city and one that has installations and programs inside it to match. One block directly east sits the Winspear Centre, a concert hall that’s renowned both for its beauty and its acoustics. And kitty-corner from the southeast part of the square is the Citadel Theatre, the home of some of Edmonton’s best local productions as well as an indoor jungle that’s particularly popular when it’s -40 outside.

Two blocks south of that you can find the Fairmont Hotel Macdonald, which may well be Edmonton’s best-kept secret. Its Confederation Lounge is the premier room in the city, with a good menu, an excellent bar selection and a stunning 9-by-18 foot Frederick Challener reproduction of the Fathers of Confederation portrait that gives the room a timeless feel that you can’t find anywhere else in the city – or, for that matter, the province. Better yet, its patio offers the best view in the city of Edmonton’s gorgeous river valley.

If you’re looking for a bite to eat, you’re in the right neck of the woods. You can’t go wrong with either the hotel’s own Harvest Room, the Ruth’s Chris location just across the street, Madison’s Grill at the Union Bank Inn or the Hardware Grill, both which are located two blocks west and east respectively of the Hotel Macdonald on Jasper Avenue. But if you’re looking for something a bit more adventurous you ought to make your way over to Rice Howard Way. The quasi-pedestrian walkway houses Edmonton’s hottest new restaurant, Tres Carnales. This is how you do authentic Mexican food on the go. And if you head a bit farther west, you’ll happen upon Edmonton’s hippest neighbourhood, the 104 Street area. It features a number of high-end coffee shops, an out-of-your-mind good bakery called The Queen of Tarts and two new restaurants – Corso 32 and MRKT – that rival anything you’d find in Toronto or Vancouver.

If you need to walk off some calories you can visit the legislature grounds, which are located on the corner of 109 Street and 97 Avenue. In the summer the wading pools and carefully tended flowers might make you feel like you’re in one of Paris’s public parks, but in the fall the legislature grounds are quintessentially Edmonton, from the gorgeous colour palette in the changing leaves in the trees to the unobstructed view of the river valley in seasonal transition. The free guided tours of the legislature building itself, meanwhile, are a treat for political buffs and architecture geeks alike. And if you’re not unduly afraid of heights, the nearby High Level Bridge offers the best view of the river valley that bisects the city.

Old Strathcona, the neighbourhood that’s on the south side of the High Level Bridge, doesn’t have quite the same diversity of culinary options as downtown but it more than makes up for that with its eclectic charm. The area revolves around the activity on Whyte Avenue – 82{+ }Avenue, if we’re to stick to the grid system – and it offers a wide variety of bars, pubs, clothing stores and restaurants. Perhaps the most famous is Gravity Pope, a high-end shoe store that is Edmonton’s answer to John Fluevog. If you’re still looking to fulfill your cultural quotient you can grab a show at the Catalyst Theatre, a local success story that has produced a number of nationally-toured performances including Nevermore, the story of Edgar Allen Poe’s life, and the more recent Hunchback.

Farther west, just shy of the University of Alberta campus, you’ll find Garneau, the neighbourhood that was immortalized in local author Todd Babiak’s book The Garneau Block. It’s anchored by the Garneau Theatre, a beautiful old building that sits near the corner of 87 Avenue and 109 Street. It’s a great place to take in a film, and there are plenty of coffee houses and bars nearby, such as Transcend and the Sugarbowl, where you can round off your evening with a freshly ground decaf cappuccino.

And if you’re up for a late-night adventure to round off your Edmonton experience, trade in the business casual for something more inconspicuous and head over to Blues on Whyte. Forget the décor, which might make you think you’ve time-travelled back to 1977 – it’s the music that matters here, and it’s some of the best in Canada. If you’re lucky, you might even see Holger Petersen, the host of CBC Radio One’s Saturday Night Blues and one of the country’s biggest blues hounds, sitting at the bar. Buy him a drink and ask for a story – you’ll be sure to get your money’s worth, and a real Edmonton experience worth bragging about.

Special to The Globe and Mail

****

An Evening in the City of Champions

5 p.m. Go Shopping on Whyte Avenue

If you’re looking to get some serious shopping done, forget the malls. Instead, head to the stretch of Whyte Avenue between 102 Street and 109 Street, where you can find everything from vintage clothes and second-hand books to $400 shoes.

5:45 p.m. Grab an Espresso at Transcend

There are coffee nerds, and then there are the people who work at Transcend. Its staff features the top two baristas in the entire country, Josh Hockin and Ben Put, who took first and second place in the 2011 Canadian Barista Championship. The Garneau location, meanwhile, is nearly as impressive, as the beautifully renovated space offers the best vantage point onto the city’s most interesting corner.

6:30 p.m. Walk the High Level Bridge

Chances are you’ve spent most of your time in Edmonton rotating between the seated and horizontal position. It might be time to get some exercise, and there are few better ways to do that than by walking across the High Level Bridge. It’s Edmonton’s most famous landmark, and it offers the most stunning view of the river valley in the entire city.

7 p.m. Have dinner at Corso 32

Edmonton’s culinary scene has long been dominated by the upscale casual model pioneered and perfected by Earls, the ubiquitous chain that has locations across western Canada. But Daniel Costa, the co-owner and head chef of Corso 32, stands well apart from that tradition. The food is honest, the service is professional and the ambience is unparalleled.

8:30 p.m.. Get a drink at the Hotel Macdonald’s Confederation Lounge

There’s no better place to enjoy a nice single-malt scotch – or, for that matter, a pint of Big Rock beer – than the Confederation Lounge. It doesn’t matter whether you’re discussing a big business deal or just talking amongst friends, because the room lends an air of importance to even the most trivial conversations. The mixed nuts aren’t bad, either.

Do we need even MORE changes to mortgage qualification rules? The IMF thinks so!

2011-10-06T14:46:00.003-06:00

I heard something a little alarming on the radio this morning; the International Monetary Fund has released a warning that Canadian’s may be taking on too much debt. They warn that “a combination of households strapped by debt and falling home prices have the potential to damage the domestic Canadian economy by curtailing spending”. The IMF then further suggests that Jim Flaherty, the federal Minister of Finance, should look at further tightening the mortgage eligibility rules on CMHC insured mortgages. Woah. What??? Tightening the rules further? We’ve already had three changes to mortgage rules in the last couple of years thank you very much! I don’t think we need any more.

Now, before you really start to freak out about this, the article goes on to state that after the report’s release Jim Flaherty stopped to talk to reporters and stated that “it would take ‘clear evidence of a bubble’ in Canada’s housing- which he said outside of Vancouver’s hot market, doesn’t exist- for him to tighten rules further”.

CIBC’s Benjamin Tal also echoed Jim Flaherty’s statement and “called the IMF recommendation premature at best and at worst potentially damaging to an already fragile economy”.
Thank goodness the powers-at-be seem to be reacting sensibly to the IMF’s recommendations! If I get wind that there are any upcoming changes to mortgage qualifications I will let you all know!

Have a very Happy Thanksgiving everyone! I hope you have time this weekend so spend some quality time with your loved ones and to reflect on how truly blessed we are to live in such a great part of the world.

The Sky Isn't Falling

2011-09-26T11:38:00.001-06:00

As Canadian consumer debt levels creep higher and higher, many articles have been written about how a U.S.-style recession is destined to hit Canada. That's why it's refreshing to come across the odd article that opposes this Chicken Little-type view - like this one in the Montreal Gazette .

The article brings up a number of good points as to why Canada isn't like its American counterpart. Among the highlights:

- While Canadians' debt-to-income ratio is now equal to that of Americans' when things went south back in 2008, this ratio isn't an accurate tool to predict a Canadian recession. After all, when looking at income, Canadians don't have the burden of healthcare costs to pay for. With the average American spending approximately 19% of their take-home pay on their health, their income is actually much less than ours - and their debt-to-income ratio, therefore, much higher.

- You shouldn't just look at debt and income when measuring the debt burden - you have to look at assets too. When you incorporate this into the equation, you'll find that Canadians are typically much better off than Americans. Here, debt amounts to just 24% of a household's average net worth, compared to 29% in the U.S.

- Canadians are still more conservative when it comes to mortgage borrowing - and while some of us are using our homes like credit cards, most of us aren't. In fact, an average of 63% of a household's home value is equity in Canada, compared to 39% in the States. Forty percent of Canadians also don't have any mortgage debt, compared to 31% in the U.S.

Bank of Canada maintains overnight rate target at 1 per cent

2011-09-07T09:40:00.000-06:00

Ottawa, Ontario - 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 outlook has deteriorated in recent weeks as several downside risks to the projection in the Bankâ€™s July Monetary Policy Report (MPR) have been realized. The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported. In combination with recent economic data, this implies that U.S. growth will be weaker than previously anticipated. The Bank expects that American household spending will be even more subdued in the face of high personal debt burdens, large declines in wealth and tough labour market conditions. Fiscal stimulus in the United States will also soon turn into material fiscal drag. Acute fiscal and financial strains in Europe have triggered a generalized retrenchment from risk-taking and could prompt more severe dislocations in global financial markets. Resolution of these strains will require additional significant initiatives by European authorities. Growth in emerging-market economies has been robust, although its rate and composition will be affected by weakness in major advanced economies. While commodity prices have declined owing to diminished global growth prospects, they remain relatively high.

Largely due to temporary factors, Canadian economic growth stalled in the second quarter. The Bank continues to expect that growth will resume in the second half of this year, led by business investment and household expenditures, although lower wealth and incomes will likely moderate the pace of investment and consumption growth. The supply and price of credit to businesses and households remain very stimulative. However, financial conditions in Canada have tightened somewhat and could tighten further in the event that global financial conditions continue to deteriorate. Net exports are now expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar.

Slower global economic momentum will dampen domestic resource utilization and inflationary pressures. The Bank expects total CPI inflation to continue to moderate as temporary factors, such as significantly higher food and energy prices, unwind. Core inflation is expected to remain well-contained as labour compensation growth stays modest, productivity recovers, 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. In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished. The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2 per cent inflation target over the medium term.

Canada's Smallest House is on the market

2011-08-31T15:25:00.003-06:00

A Realtor friend of mine, Jeanine Boutet, posted this on her page the other day and I fell in love with this little house! It was built in 1912, is 350 square feet and totally adorable! This little gem can be yours for a mere $179,900 (which seems like a steal for Toronto)!

There's even a website dedicated to this little house...

Your Home Purchase: Part 4

2011-08-29T14:15:00.001-06:00

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 4: The Home Search

Now that you’ve been preapproved for a mortgage and know your housing price range, it’s time to start looking!
While a Realtor can definitely help you find that ideal home (at no cost to you, since the seller pays their commission), it’s wise to have a sense of what you’re looking for before heading in.

If you’re worried about the direction of the real estate market in your area, your best bet is to find a home that will suit your needs for the next five years or more, if you can afford it. Sit down and think about what your short-term and long-term priorities are, how many bedrooms you’ll need to grow into, what your ideal area looks like, and whether your lifestyle is best suited to a condo or house. You might also want to take into consideration such things as commute times and proximity to sports teams and other community activities.

If your price point doesn’t allow you to purchase a home that you can grow into, try to find one that will give you the most bang for your buck and the biggest return on your investment. This can mean purchasing in an up-and-coming area, or buying close to soon-to-be-built infrastructure improvements like public transit lines. The old real estate adage, location, location, location, still rings true, so if you can buy the worst house on a nice street it is likely worth the investment. In the same sense, you may want to buy a home that’s a little more expensive but well-located, so that you can rent out the basement for some extra income.

Again, a Realtor is probably the best person to discuss your strategies with. They’ll be able to highlight areas that make sense for you, your budget and your current lifestyle.

Your Home Purchase: Part 3

2011-08-22T13:22:00.001-06:00

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 3: The Budget
So now that you have a preapproval, and you’ve been taking strides to trim down your household spending over the last few months, it’s time to come up with a real budget that will determine the type of house you can afford.
This is usually a number that is significantly lower than the maximum made available to you by your lender (mainly because your lender only takes certain expenses into account, such as heating costs and outstanding debts, when determining this magic number. Others, like food, are completely left out of the equation).
The best way to come up with a realistic price tag is to look at where your money is currently going and work backwards from there to see what’s left over for mortgage costs and household expenses. At this point, it’s important to be realistic. You’ve already determined what extravagances you can do without â€“ and which ones you definitely must hang onto. If you’re a couple that enjoys going out for dinner more than once a week, embrace this fact. There’s absolutely no use in saying that your weekend dine-outs will end once you sign that mortgage. In fact, chances are you’ll continue to dine out â€“ and the additional cost will leave a growing balance on your credit cards.
It’s also important to keep in mind that ownership carries more costs than renting. Be sure to factor in condo fees, property taxes and unforeseen maintenance costs into your monthly housing budget. You may also want to factor in non-housing related costs for example, if you’re moving from the city to the suburbs, you’ll likely have to pay for the additional costs of a car. If your new home is taking you further away from work, your gas bill will likely increase as well.
Once you know how much money you can devote to housing on a monthly basis, put those mortgage calculators back to good use and figure out how much of a total price tag you can afford. Once you have that maximum number, try not to look at homes that fall outside of it. It’s easiest just to avoid the temptation all together.

The Top ten things that DON’T make me a 'good' mortgage broker

2011-08-19T11:18:00.007-06:00

This is an article written by a mortgage broker in Kelowna that I greatly respect and admire! She's one of the keys to my success in this business; I greatly respect her vision for this industry and her unwavering values (and I agree and follow them as well). She tells it like it is around here, even when it isn't popular or part of the status quo!

If you're thinking of purchasing or refinancing a home in BC, call Julia. She'll tell it like it is...

The Top ten things that DON’T make me a 'good' mortgage broker
by J. Krause Mortgage Services on Thursday, 18 August 2011 at 18:45.

As a mortgage broker, it seems like I'm constantly bombarded these days with ‘propaganda’ about the ‘top brokers’ in Canada; the ones who do the most business and make the most money. Quantity has become more important than quality. But silly me, I still believe it’s all about the client, and getting the client the best possible mortgage option for their individual needs. It’s not about me and how much ‘volume’ I do. Because of this, the industry probably wouldn’t consider me a very ‘good’ mortgage broker… so I’ve come up with the top ten things about me that DON’T make me a 'good' mortgage broker:

1) I get to know my clients; I don’t just move ‘em in and move ‘em out. I want to get to know them, and I want them to know me. Time consuming? Yes… but that’s how I roll.

2) I’ve been around a while and I actually know what I’m doing. I learned the business by working as an assistant for a few years before I became a broker. Now I have years of experience. And I also know the rules. If a client wants me to bend or break one of those rules, sorry, but I won’t risk my license and my reputation just to make a few bucks.

3) I’m a big ‘explainer’. I explain EVERYTHING about the mortgage process, but not all at once. One step at a time so the client doesn’t get a case of ‘information overload’. Time consuming? Yes… but that’s how I roll.

4) I’m there for my clients after-the-fact. They can call me with any questions any time, and I will never just say “Call your lender”. I always have time to chat with my clients and help them out with any concerns or questions.

5) I stay up to date on what’s happening with interest rates and the economy so my clients don’t have to. I would never expect them to… that’s my job. And I create my own newsletter four times per year - no corporate-looking junk mail for me. Time consuming? Yes… but that’s how I roll.

6) I’m too honest. If a client is getting into something beyond their means, I tell them so. If they go to another mortgage broker to get it done, so be it. At least I didn’t put them in a risky situation.

7) I don’t mind if my close friends DON’T come to me for a mortgage. I understand that for some people, their financial situation is PRIVATE, and maybe they aren’t comfortable spilling all the details to me (but I still give them tips & advice…)

8) I get excited for my clients when they find a place they want to buy, but then I feel the same disappointment if, for whatever reason, they don’t qualify a mortgage.

9) I’m incapable of pressuring my clients to do something or make a decision. I want my clients to feel comfortable and confident about their decision.

10) I don’t believe in ‘sales tactics’. I give my clients choices; I don’t just give them one option and say ‘take it or leave it’. I explain the differences in each option so they can make an informed choice of their own. Time consuming? Yes… but… well, you know.

.

Edmonton is getting a spanky new museum, which one will you choose?

2011-08-19T10:57:00.006-06:00

The Province has released four new designs for the soon-to-be-built Royal Alberta Museum in the downtown core. They are asking the public to voice their opinions on the designs to help the government in choosing a winning concept.

This is a building that will shape our downtown!
Please take a few moments to view the submission and offer your feedback:

http://www.infrastructure.alberta.ca/3688.htm

Your Home Purchase: Part 2

2011-08-15T11:57:00.001-06:00

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 2: The Pre-Approval

There is no better tool to help you obtain a true picture of your housing budget than a mortgage preapproval. Unfortunately, less first-time buyers are taking the time to get one.
According to TD Canada Trust’s First Time Homebuyers report, 91% of first-time buyers were pre-approved for a mortgage before house shopping in 2010, and that number fell to 76% in 2011.

There’s no real reason why less homebuyers should be taking advantage of the opportunity to get preapproved for a mortgage especially if you’re dealing with a mortgage broker. With one glance into your credit score, we can use the information to see which lenders are willing to approve you for a mortgage, at what rate and for how much.

While this approval isn’t etched in stone the lender will still want to see proof of income and other personal details upon approval, and if you’re putting less than 20% down, your mortgage insurer (i.e. CMHC or Genworth) will also have a final say it nevertheless gives you a good picture of what type of funds are available to you, and at what rate.

Not only does this help you put a more accurate budget together and ensure your house hunting endeavours fall within your allotted price range but, in many cases, it also allows you to secure the best available rate. Most lenders will hold their best rate for you for 90 days (and sometimes 120 days) upon preapproval. If you don’t find a home within that time (or if you just haven’t had a chance to start looking) you can obtain another preapproval hassle-free.

For the amount of effort it takes to call up your mortgage broker and obtain a preapproval, it’s definitely worth the added convenience. In many cases, we can do the legwork online, and have it turned around within a business day or less.

Your Home Purchase: Part 1

2011-08-08T14:06:00.000-06:00

The average Canadian homebuyer takes 11 months to plan their purchase, according to CMHC. If you’re thinking about buying in the next year, our four-part series will explain how you should be dividing your time.

Part 1: Getting your ducks lined up
While you don’t necessarily need a year to plan your home purchase, a little preparation never hurt anyone â€“ in fact, it’s been known to save people money. Below are a few things you can do right out of the gate that can save you hassles (and plenty of headaches) in 11 months time:

a) Become one with your credit score
There’s nothing worse than finding your dream home and realizing, upon talking to the bank, that you don’t have good enough credit to obtain a mortgage. That’s why the more in tune you are with your credit score and the earlier you’re in tune with it the better.

Both of Canada’s two major credit bureaus Equifax and TransUnion offer one free credit report per year. Take advantage of this offering to make sure you don’t have any outstanding bills you didn’t know about, or incorrect charges on your report. If you do, a year is usually enough time to clear up any minor blemishes so that your score is in tip-top shape when it comes time for that pre-approval. Remember â€“ the better your score, the better your rate (and the more money you’ll save in the long run).

b) Establish your household budget
If you don’t already have one, now is the time to sit down and draft an accurate household budget. This means going through your expenses, tracking your spending and figuring out which luxuries you can’t live without and which ones you might be able to trim.

This will likely be a work in progress, and something you’ll revise over the coming months as you (and, potentially, your partner) receive raises, change jobs or simply learn to reign in your spending. Once you get into the habit of it, you’ll be able to determine how much you can really afford to spend on housing every month, which will come in handy later on.

c) Estimate your potential mortgage payment.
While you don’t have to know the details quite yet, it pays to know roughly how much your ideal home is going for price-wise, where interest rates are sitting, and how much you’re aiming to have for a down payment.

Once you have these numbers in mind, you’ll be able to plug them into an online calculator and figure out how much a monthly mortgage payment is likely to cost. Once you know this magic number, determine the difference between that and the current rent you’re paying and sock it away. Not only will this help you get used to the added costs of a mortgage payment, but it will also help you establish a bit of a savings fund either to strengthen your down payment or use as an emergency fund for the day something inevitably needs repair in your new home.

-Courtesy of Axiom Mortgage Partners

Turning your principal residence into a rental

2011-08-02T10:09:00.001-06:00

So, you're ready to move out of your starter home and into a larger residence. The thing is, your first home is so well-located that you'd love to hold onto it for a little longer - and maybe use it as a tool to launch you into the rental market. Before you make the commitment, however, here are a few things to consider:

1. Will you need to refinance?

Chances are, in the time you've owned your primary residence, you've had an opportunity to build up equity. The question is, will you need some of this equity to use towards a down payment on a second home - or do you have a separate down payment fund saved up?

If you need to tap into your home's equity, you're going to have to refinance - and you can only do so up to 85% of the value of your home. You'll also have to consider that, with a refinance, you'll likely have to take on a new mortgage term, rate and amortization - and, depending on the details of your mortgage, this may come with some hefty fees. It should also be noted that keeping that 35-year amortization with less than 20% equity can prove difficult since it's been phased out under new government rules.

2. Ensuring positive cash flow.

If you have to pull out some equity in your home for a second down payment, your mortgage payments are going to increase on your primary residence. For a rental property to make sense, you're going to have to make sure that you have positive cash flow - which means the going rental rate can cover your mortgage payments, property taxes and maintenance costs. Check out similar rental properties in your area either through viewit.ca, craigslist.com or kijiji.ca.

To keep your costs as low as possible, it's best to go with the longest amortization you can get your hands on - and the lowest mortgage rate.

3. Tax implications.

If you end up using the money from your refinanced first property as a down payment for your second, you're going to find it difficult to legally take advantage of the tax deductibility of your new rental property. This is because borrowed funds are only tax deductible if they're used to fund a rental property - and you'll be using them to fund a new primary residence. This article at Million Dollar Journey does a great job of explaining the issue, and ways to get around it:

http://www.milliondollarjourney.com/converting-a-principal-residence-into-a-rental-property.htm

4. Are you really ready to be a landlord?

Becoming a landlord brings on its own new set of responsibilities - and potential late-night emergencies. Before you pull the trigger, really think about if you're ready to take care of the maintenance needs of two residences - and if you're prepared to carry the costs of two residences if you can't rent your first one out for a month or two.

For further reflection, consider reading these articles about nightmare tenants:

13 outrageous tenant excuses

http://realestate.msn.com/13-outrageous-tenant-excuses?page=2

Tenants from hell

http://www.property118.com/index.php/tenants-from-hell-part2/

Buy a house, keep a little money in your jeans

2011-07-22T13:27:00.002-06:00

This week I am going to highlight a great product I can offer! One of the lenders I work very closely with offers a fantastic designer mortgage product which allows you to choose various cash back options on your mortgage. The promotion allows qualifying home buyers to purchase a home, choose their own interest rate (currently ranging between 4.19% and 3.74% on a five year closed term) and choose their cash back amount.

We all know that it costs money to move house, most people end up buying some new furniture or completing small renovations such as installing new lighting in their new home. For a lot of first time buyers, these extra purchases are made with a credit card, often with very high interest rates. The cash back program I am offering will give you a little cash to make these purchases and renovations without having to use additional credit sources. The slightly higher mortgage rate (up to 4.19%) is certainly better than the 18+% charged by your credit card companies!

Here’s an example of how this program works.

Mortgage information: $250,000 over 30 years

Choices: borrowers can pick an interest rate ranging between 4.19%* and 3.74%*

Interest Rate Cash Back amount Monthly mortgage payment

4.19%* $4,500 $1,215.82
3.99%* $2,500 $1,187.38
3.79%* $500 $1,159.27
3.74%* $0 $1,152.29

So, as you can see with the examples above, the difference between a mortgage at 4.19% and a mortgage at 3.74% is $63.53/month, when you calculate this over the five year term ($63.53 x 60) it works out to a difference of $3,811.90. You have received $4,500 in cash back and will pay a total of $3,811.90 back over their five year term. I’d call this a win-win solution!

This mortgage truly is a “designer” mortgage, allowing you clients to choose the right mortgage for your needs!

Please contact me for more information!

*Rates subject to change at any time. Calculations are based on a $250,000 mortgage, 30 year amortization and a five year closed interest rate. The cash back amount will increase/decrease depending on the total mortgage amount. Interest rates are subject to purchaser & property qualification and can change without notice. Borrowers may have to qualify and pay a higher rate. Subject to approved credit and income verification. O.A.C. The cash back may be reduced and the interest rate increased if the mortgage does not close within 30 days of submission to the lender.

Prime stays the same...

2011-07-19T13:45:00.001-06:00

In an announcement earlier today, the Bank of Canada left their key interest rate unchanged. The central bank cited several reasons for its decision including a slowly-recovering export market due to weak U.S. economic growth and the high value of the Canadian dollar.
Despite the above factors, according to an article from CBC, many experts are still predicting an interest rate hike towards the end of 2011.
The next scheduled interest rate announcement is scheduled for September 7th 2011.

The good times are almost here

2011-07-13T10:08:00.002-06:00

As I lay in bed this morning willing my eyes to open I was half listening to CBC radio’s morning show. They were interviewing a woman working in HR at Ledcor. They are on a hiring spree, trying to hire 9,000 new employees this year. My eyes opened wider...9,000 people? In one year? Folks, this is yet another sign that the good times are back in Alberta! The HR representative stated that Ledcor is aiming to hire employees from within Alberta but is also trying to recruit internationally. This latest news should bring great things for the housing industry in Edmonton; more people working, more people moving here from other places = housing demand.
If you are someone that is sitting on the fence wondering if now is a good time to buy I would say it may be time to hop off that fence, find yourself a good Realtor and start looking at houses. Interest rates are very low and there is a lot of inventory to choose from. This may not be the case for long.
If you would like a referral to a good Realtor, I know several that are trustworthy, kind and patient. Just drop me a line and I will put you in touch with someone.

The Bestest of Edmonton

2011-07-07T13:53:00.003-06:00

Moving to Edmonton and wondering what's great about this place? Maybe you've lived here for a long time but haven't discovered everything e-town has to offer...

Click here for Vue Magazine’s the Bestest of Edmonton! A solid list of great things about the river city.

Don't accept the first price upon renewal

2011-07-04T13:15:00.002-06:00

Remember all the work and research that went into finding the best rate for your first mortgage? Whether you spent months making sure your credit was as good as can be, or spent hours on the Internet searching for the best rate, it seems silly to waste that effort by blindly renewing with your existing lender when your first term is up.

The truth is, the best lender is only as good as the term that you sign with them. When it comes time to renew, many offer their clients an inflated rate hoping that you'll be complacent enough to simply sign it back. Other clients particularly the new ones, or those that take the time to negotiate receive the lender preferred rate, which can sometimes be as much as half a percentage point lower.

While that may not seem like much now, it adds up over the life of the mortgage and almost certainly overrides any savings you experienced in that first term. For example, if you had a 25-year, $200,000 mortgage at the posted rate of 4.08% you would be paying approximately $1057 per month, compared to approximately $1,018 per month at the discounted rate of 3.72%. While this isn't a lot if you look at it from a monthly perspective, if you look at the long-term, you're paying $118,220 in interest on the higher rate mortgage, compared to $106,572 on the lower rate mortgage. That's a difference of $11,672.

Obviously you're likely not going to keep the entire rate for the life of a mortgage, but if the interest costs could be even greater if you merely renew at the going rate, term after term. That's why it's important to employ the services of a mortgage broker throughout your entire mortgage lifespan. Not only will this ensure you're getting the best possible rate available, but it will also give you the opportunity to see if there are other mortgage products in the market that are better suited to your changing needs.

-Axiom Mortgage Solutions

Job seekers heading back to Alberta

2011-06-24T14:56:00.002-06:00

According to this Globe and Mail article, Statscan reported that after a two year lull Alberta now registers as the province with the fastest first quarter job growth in Canada.
The majority of migrants are coming from Atlantic Canada and other prairies provinces.
The recent information release by Stastcan furthers the speculation that Alberta may soon see another boom. If we are seeing an increase in migration, it only makes sense that the individuals moving here will increase the demand for housing. With current interest rates so low and the potential for rising house prices and higher interest rates as the economy picks up steam, maybe NOW is a good time to get into your first home!
If you are a first time buyer thinking about taking the property plunge, now might be a good time to do so.
Please contact me should you require mortgage information or a pre-approval.

Flaherty: No more changes to mortgages

2011-06-22T15:08:00.000-06:00

Jim Flaherty, Canada’s Finance Minister, announced that he does not have plans to tighten mortgage rules any further. Flaherty stated that the country’s housing market remains healthy following the implementation of tightened mortgage rules last March.

The statement comes about following new numbers released by the Bank of Canada on Monday showing that Canadian debt levels have reached record levels during the first quarter of 2011. According to Mark Carney, governor of the Bank of Canada, Canadians have leveraged themselves so much our debt levels are now in line with the United States and England. His concern? When interest rates inevitably rise, a large number of Canadians will be vulnerable to an economic shock.

Weird and wonderful facts about Edmonton!

2011-06-13T15:35:00.004-06:00

I was browsing around the internet, trying to find the latest statistics on the population of the Capital City; I came across the Wikipedia page dedicated to all things e-town and I learned some surprising new things about the city:

-Edmonton has the highest per capita area of parkland in any Canadian City! The river valley is 22 times larger than New York’s Central Park.

-The Edmonton Composting facility is the largest of its type in the world! I’m embarrassed to say this, but I didn’t even realize Edmonton composted at all! My bad.

-Westmount mall was the first mall in Canada. So, that explains why Edmontonian’s love to shop!

-The first inhabitants settled in the area that is now Edmonton around 3,000 BC and perhaps as early as 12,000 BC, when an ice-free corridor opened up as the last ice age ended and timber, water, and wildlife became available in the region.

- Being stuck on the Anthony Henday on plenty of occasions has given me time to wonder "who was Anthony Henday" and "why have we named this parking lot after him"? Now I know! In 1754, Anthony Henday, an explorer working for the Hudson's Bay Company (HBC), may have been the first European to enter the Edmonton area.

-Edmonton has wacky weather. It is definitely a place of extremes. The highest temperature recorded within the City of Edmonton was 38.3 °C (100.9 °F), on August 5, 1998. The coldest temperature ever recorded at city centre was −40.6 °C (−41.1 °F) on January 26, 1972, this was the only time since recordings began in 1953 that city centre has recorded a temperature below −40 °C (−40 °F). The coldest overall temperature recorded in Edmonton was −49.4 °C (−56.9 °F), on January 19 and 21, 1886.

If, you are considered a move to Alberta’s Capital City, or are looking to learn some new things about Edmonton, the Wiki page is a great resource!

The perks of using a real estate agent

2011-06-13T10:36:00.000-06:00

With the Competition Bureau pushing for a more publicly-accessible Multiple Listings Service (MLS), and for-sale-by-owners sites, such as Property Guys, picking up steam, you may be tempted to forgo the services of a real estate agent and tackle your home sale yourself.
Before you invest the inevitable time and money to this endeavour, however, you may want to reconsider the pros of using a real estate agent.
If you’re a seller...
- With an estimated 85% of homebuyers opting for the services of a real estate agent, a selling agent (and his/her fellow colleagues) have more access to potential buyers. This means more Open House traffic, more ad visibility, and more of your ideal buyers coming through your door.
- While your home may look perfect to you, it may not meet the style and trend preferences of today’s buyer. Because real estate agents are in tune with the latest must haves, and deal with modern buyers on a day-to-day basis, they can offer the fresh set of eyes your home needs. This translates into simple but successful self-staging ideas that have the potential to move your home much quicker.
- Listing at the right price is crucial if you want to sell your home as quickly as possible. Because real estate agents have access to past sales and comparables, they can help you find that magic number that will get the right people through the door.
If you’re a buyer...
- Purchasing a new home can be daunting (and a lot of hard work) if you’re not quite sure what you’re looking for. A real estate agent who specializes in your ideal area is up-to-date on the homes for sale in your market. As a result, they can save you a lot of legwork and show you homes that fall in line with what you’re looking for.
- Because they know the ins and outs of specific areas (and surrounding areas), they may be able to help you find your dream home in an unexpected place.
- Real estate agents negotiate for a living and yours will negotiate hard in your favour. Depending on the circumstance, they may also add in certain clauses that will make the sale as beneficial to you as possible -- such as closing timelines and other conditions.

-Axiom Mortgage Partners

Best place to raise a family in Canada? St. Albert!

2011-06-09T11:25:00.004-06:00

Today’s Parent magazine has voted St. Albert as the best place to raise a family in Canada in their most recent issue.

As a long time resident of the community, I agree that it is a great place to call home! I can attest that the small city is very well maintained, with loads of beautiful trails and parks (including a newly renovated outdoor water park and skateboard park) as well as great community events such as the amazing farmer’s market and International Children's Festival in the summer. St. Albert also has fantastic winter activities including an abundance of outdoor skating rinks in a variety of neighbourhoods as well as a great cross country ski trail in the Riverlot 56 Natural Area (also a favourite summer walking route of mine).

The recently built Servus Place is a great community fixture where residents can exercise, swim or participate in a variety of team sports including hockey or indoor soccer. Last weekend I had the pleasure of visiting the nearly complete Enjoy Centre, a beautifully designed space that will house a variety of businesses including the Prairie Bistro, a spa, yoga studio, organic bakery, a kitchen store and Hole's famous greenhouse. It truly is an amazing place and a great asset to the community of St. Albert.

I have always felt very safe in St. Albert and while I don’t have children of my own, I think it would be a great place to raise a family!

Read the Today’s Parent article here.

Bank of Canada holds steady

2011-05-31T11:51:00.001-06:00

As expected, the Bank of Canada left it’s key interest rte unchanged stating that they will likely not increase rates until the economy has recovered. Many are not predicting an increase to the prime lending rate until September.

This latest announcement by the Bank of Canada is welcome news to mortgage holders with variable rate or home equity line of credit mortgages.

Canadians love their U.S. properties

2011-05-30T11:20:00.002-06:00

For the fourth consecutive year, Canadians led the pack of foreign buyers sweeping up properties in the U.S. Twenty-three percent of foreign buyers were Canadian, with the next-highest group coming from China (9%).

It's easy to understand why Canadians are deciding now is the time to purchase properties south of the border. More than 45% of those properties purchased by all foreign buyers in 2010 had price tags under $200,000. For a vacation property, that's not a price to sneeze at!

If you're thinking about becoming a U.S. property owner, here are a few things to consider:

1. Cash is King.

Very few, if any, U.S. lenders are offering mortgages to foreign buyers right now, so if you're thinking about buying a property, you're best to buy with cash. If you don't have $200,000 in cash on hand, many buyers are opting to take out a line of credit on their Canadian property and using the money to buy a U.S. home flat out.

2. What are others saying?

If you can, talk to as many people you know who have recently purchased a U.S. property. Find out where they purchased the property, what their experience was like, and what tips they have to offer.

3. Avoid buying in a ghost town.

While a super-low price tag may be tempting, make sure it's not the only factor guiding your property-buying decision. Where you buy is equally as important and a ghost town or ghost building, ridden with foreclosures, is likely not where you want to be. Aside from further reducing property values, foreclosed homes are not contributing to local maintenance (or HOA) fees, which means the amenities and maintenance services your building is supposed to offer may not be kept up to snuff.

4. Buy with the long term in mind.

Nobody knows when the bottom of the U.S. housing bust will occur or how long it will last. So it's best to purchase U.S. properties with the long term in mind, rather than the mindset of turning a quick profit.

-courtesy of Axiom Mortgage Partners

Condo documents: Why they are important to review in detail

2011-05-18T10:18:00.005-06:00

A REALTOR® friend of mine, John Carle with REMAX just posted this great article on his blog regarding purchasing a condo and the importance of reviewing your condo documentation thoroughly....

"If you have purchased a condominium then you will have looked over the documents that describe the unit, building, condo corporation etc…

As a REALTOR®, I have had many clients purchase apartment and townhouse condos in many varied complexes. Usually, one of my many jobs when my clients are looking at the condo is to help them to understand the documents.

Now sometimes they may decide to take the documents to a lawyer for review, or to a company that specializes in condo document review. Any way you choose, it’s yours to decide. The ultimate decision on whether to buy it or not, is yours as the purchaser. You must be satisfied that it is a good place to buy.

The document package should contain a variety of different documents and be as up-to-date as possible. This is very important because, for example:

- it can show you how well the building is managed

- how much is in the Reserve Fund (for maintenance and repairs)

- how much the monthly condo (strata) fees are

- the meeting minutes for the Board of Directors

- the Annual General meeting minutes

- the projected budget for the year

- any anticipated levies or special assessments

- the projected maintenance costs for the next 1 – 5 years (depending on when the Reserve Fund Study was done)

- and many more items.

I will help you to make sure you get all the info you need to make a sound decision on the purchase of an apartment or townhouse condo. Please contact me if you have any questions or if you are interested in the purchase or sale of a condominium or a single-family home."

Home Alone house up for sale

2011-05-16T13:49:00.002-06:00

The movie that made Macaulay Culkin famous also made a certain home in Winnetka, Illinois famous as well.
The "Home Alone mansion" - or the home Macaulay Culkin's character, Kevin, had to defend in the 1990 holiday classic - is now up for sale. The price tag is a mere $2.4 million. To check out the inside, and hear some behind-the-scenes tales from its owners, check out this video!

Alberta joins BC in regulating home inspectors

2011-05-16T13:33:00.002-06:00

As of September 1, Alberta will become the second province to ensure all home inspectors are licensed and all homeowners who use them are protected. Home inspectors will be required to successfully complete a provincially-approved training program, as well as pass a test inspection.
If you’ve ever watched the show Holmes on Homes, a home renovation show where the majority of troubled homeowners run into problems due to the oversight of a less-than-stellar home inspector it’s a wonder that Alberta is only the second province to enforce these measures. The majority of provinces have associations that offer their own certification and education, but participation is completely voluntary.
B.C. became the first province to licence home inspectors back in 2009. At that time, the government set out to better serve homeowners by assessing the qualifications of, and requiring mandatory licences for, home inspectors; receiving and responding to complaints; and monitoring compliance through inspections and enforcement, with penalties of up to $5,000.
Alberta will take its enforcement a step further by investigating all complaints, and fining businesses in violation of the new rules by as much as $100,000 and/or two years in jail.
There have been rumours that Quebec may be the next province to regulate home inspectors, but no word yet on when that will happen or when other provinces might follow suit.

-Axiom Mortgage Partners

Buying a piece of the American Dream

2011-05-12T10:31:00.000-06:00

We’ve all heard the stories from friends, co-workers and neighbours: they went to the U.S. and purchased an amazing vacation/retirement property at an unbelievable price. Perhaps you’ve been thinking about doing the same for some time. It sounds like a great idea, but, how do you get started?

Below is an extremely informative excerpt from a new book; Buying Real Estate in the US: The Concise Guide for Canadians. If you are toying around with the idea of purchasing property south of the border my suggestion would be that you really do your research before making an offer on a property. This book would be a great place to start!

A Rare Opportunity: Purchasing property in the United States

How much house can you REALLY afford?

2011-05-09T11:51:00.001-06:00

Acquiring a mortgage - and acquiring a mortgage you can afford - are two separate things. Often, banks or lenders will approve you for much more than fits comfortably into your lifestyle. That's because they rely on two calculations - Gross Debt Service Ratio (GDS) and Total Debt Service Ratio (TDS) to come up with that magic number.

The problem with those calculations is that, while they take into consideration some household expenses to determine how much mortgage you can afford, they don't take into consideration all of them.

Such expenses as mobile phone bills, cable, entertainment, and groceries, for example, aren't factored into the equation - instead, they focus on the bare necessities such as heat, loan payments and credit card minimum payments. They also base the calculations on your gross household income - not your net (or after-tax) income, which can be a little misleading as well.

So how can you determine how much house you can really afford? Well, there seems to be a few differing "rules of thumb" out there:

1. The price tag of the home shouldn't be more than two to three times your gross household income.
So, if your household is making $100,000 per year, your home's price tag should fall between $200,000 to $300,000. Given today's real estate prices, many believe this adage is outdated.

2. The total mortgage amount shouldn?t be above four and a half or five times your gross family income.
So for the same $100,000 couple, that would take you to a $450,000 or $500,000 mortgage loan. Whatever down payment you've mustered to save will increase the home's price tag accordingly. While the previous example seemed a little low, many believe this number is a little high, and could cause homeowners to over-extend themselves.

3. Find your own magic number.
Depending on your lifestyle and where you choose to spend your money, your idea of home affordability will vary from someone who has completely different spending habits. That's why it's important to find out what number works for you.

Start by tracking your spending - most people underestimate exactly where their money is going. Next, figure out what extras you can do without - and which ones you absolutely can't. If you love dining out, for example, it's better to come to terms with this fact and buy more house than convince yourself that once you own a home you'll eat in every night.

With interest rates continuing to sit at record lows, it might also serve you to see what you can afford at a higher interest rate - say 6%. This can help you ensure that you'll be in a comfortable place both today and when it comes time to renew.

-Axiom Mortgage Partners

You can't afford a mortgage when...

2011-05-05T16:04:00.002-06:00

While plenty of individuals live from paycheque to paycheque, most consumers know they should be saving money and reducing debt. The recession has drummed that concept into everyone's head as people have watched their neighbours and friends lose jobs and sometimes their home.

Many people say that money worries keep them awake at night, but that doesn't necessarily translate to imminent bankruptcy. How do you know when you are truly teetering on the edge of a financial disaster versus simply needing to do a little belt-tightening?

Here are nine signs that indicate you are heading for trouble and may be unable to pay your mortgage in upcoming months:

1. Late Fees

If you missed a payment or let your bill go past due because you didn't have the money to pay your mortgage or another bill on time, you need to reevaluate your budget. Not only does this indicate an imbalance between your income and expenditures, but it will also ruin your credit score, potentially causing your creditors to increase your interest rate.

2. You Can't Pay All of Your Bills

Every month, you are forced to decide which bills to pay and which bills to ignore. A lot of people opt to pay their credit card bill to stop harassment from the credit card company and to make sure they have available credit. But it is far more important to pay the bills that protect your home first. Always pay your mortgage first so that you will have a place to live. Next, pay for your car so that you can get to work and keep your job.

3. Making Minimum Payments on Credit Cards

In your mind, paying the minimum due on each bill may mean you are keeping up with your financial commitments, but financial experts know that minimum-only payments are a key indicator of financial distress. While this may mean that you carry too much debt, this also means that all your income is barely covering your spending. Take a careful look at your mortgage payment, other debts and your income to get back on track. Paying only the minimum on credit cards will extend your debt for years and amass expensive interest payments.

4. No Emergency Savings

While amassing six to 12 months of funds to cover you expenses, as many financial planners now recommend, may be a monumental task, every homeowner should have at least one month's worth of expenses in the bank. At the very least, you need to have enough money in a savings account or a money market fund to pay your mortgage for one month if your income drops or disappears. If you cannot save that much money you need to seriously evaluate your overall household budget.

5. You Can't Afford Maintenance

Your home needs to be painted and your dishwasher broke two months ago. If you are ignoring basic maintenance because you cannot afford to buy paint or call a repairman, this is a significant indication that you are in financial trouble. Not only does this show that you don't have any emergency savings or a home maintenance budget, but this will also reduce the value of your home.

6. Reduced Income

Money is already tight and now your work hours have been reduced or you have been laid off. If meeting your monthly budget depends on every dime you earn, then even a small reduction in income can be a disaster. Search for a new job or a second job and, at the same time, start slashing your budget as much as you can.

7. Using Credit or Cash Advances to Pay Bills

You are using your credit cards or, even worse, cash advances on credit cards to pay other bills such as a utility bill or to buy groceries or just to have cash in your pocket. This is a strong indication that your spending is outpacing your income and it is extremely expensive. You need to put yourself on a debt management program or perhaps meet with a credit counselor to straighten out your finances.

8. Using Your Retirement Fund

You have borrowed money from your retirement account for your mortgage payment or other debt. This could seriously jeopardize your future financial security.

9. You're Maxed Out

One or more of your credit card balances has reached or, worse, gone over the limit. If you are transferring your balances to new accounts in order to avoid paying the debt, this is a sign of a financial imbalance. If you are applying for new credit cards because your other cards have reached their limit, you are in serious danger of a financial meltdown. While you may be making your mortgage payments just fine, if you cannot control your use of credit cards it can be an indication that housing payments are too high.

While these financial woes can mean that you cannot afford your home, they may also be a sign that your spending is out of control. For most people, the mortgage payment is the largest monthly bill, so they often assume that the size of their mortgage is the problem. If your housing payment fits into that budget but you are having difficulty making your payment, then the issue may be that you have taken on too much other debt. Whether the problem is your mortgage or your other debt, you need to find a way to reduce your spending and/or boost your income before the situation gets worse.

The Bottom Line

Handling financial problems is never easy, but the first step is always to know what you owe. Solutions can only become clear once you have every bill written down with the amount owed, the monthly payment and the interest rate you are being charged. Pencil and paper work just fine, or you can create a spreadsheet or invest in some personal finance software. The important thing is to know where you stand so you can create a plan that will get your money under control.

Nine signs you can't afford a mortgage
Michele Lerner
Investopedia.com
Published Monday, May. 02, 2011 6:56AM EDTLast updated Monday, May. 02, 2011 10:11AM EDTcomments

Insiders tips on purchasing real estate

2011-05-03T12:50:00.001-06:00

Luke Quach, from REMAX explains why working with your Realtor’s approved mortgage broker is beneficial for you! Please note that while the majority of points made in this article are very realistic and true, some of the nitty gritty details are written with an American perspective and do not apply to Canadian real estate transactions (mainly the last point about line item loan fees).

Thanks Luke for posting such a great article!

Stage Two: Getting Pre-Approved.
Insider Secret: Working with a mortgage broker referred by your real estate broker or agent may save you money.
Why: Bolstered by the real-life stories of a couple of bad apples, TV pundits and some consumer advocates have spun the tale of a real estate industry cartel, whereby sinister agents hook unsuspecting buyers up with shady mortgage brokers, who place them in crappy loans and kick back some bucks to the agent. I’m here to tell you, in my experience, the opposite is true the vast majority of the time.
When you work with a mortgage broker who has a strong track record of helping your real estate agent’s clients out, you end up in a best of all worlds situation, nine times out of ten. First off, your agent will take you much more seriously once a mortgage broker they know and trust has run your credit, checked your income and approved you for a loan, as well as communicated with your real estate pro about your qualifications and what you can afford. Secondly, your agent can help you communicate with your mortgage broker, sometimes helping get past appraisal glitches or facilitating other workarounds, as they come up. Third, you get the assurance of working with a mortgage pro who has been vetted and vouched for by someone you not only trust, but someone who can verify that the mortgage broker has the ability to get transactions closed in the timely manner required of today’s real estate sales contract. Otherwise, you may end up working with a competent mortgage broker who has a great track record when it comes to refinancing, but can’t keep up with the pace and common obstacles to getting a home financed in the context of a sale.
On top of that, sometimes the relationship can help you negotiate out of a couple of line item loan fees (if your particular mortgage rep has the power to get them down at all), if push comes to shove and cash is tight to close the deal. Assuming you are working with a real estate pro you really trust, working with a mortgage broker they trust can save you, rather than cost you, money.

Get talking about your finances

2011-05-02T13:23:00.003-06:00

While chatter about mortgages, debt, savings and retirement planning isn't likely to put one in a romantic mood, it's an important aspect of any marriage or co-habitational relationship.

Unfortunately, talking about money is typically the last thing anyone wants to do during their personal time. When you don't have enough of it - or when the debt is quickly piling up - it's much less enjoyable. But with financial matters being one of the top cited reasons for divorce, it should be an important aspect of every relationship. Below are a few strategies to take the fear out of your finances:

1. Know where you stand.
Dealing with your own finances is quite different than dealing with a couple's. Make sure you're both aware of your entire financial picture - money coming in, money going out, and all outstanding debts. You'd be surprised at how financial awareness - and a strategy to tackle any worries you may have - can quickly erode any fear you have about financial matters.

2. Get both members involved.
While one person may be more financially savvy than the other, it's important that both members of a couple are involved in the financial decisions. So when it comes time to renew that mortgage, for example, both members should meet with your mortgage broker and understand the pros and cons of the different products before selecting. In the same sense, you should periodically go through your expenses together and brainstorm ways to slash costs, and revisit your investment portfolio.

3. Arrange a financial "date night".
Even if you're not afraid to talk about money, it can be difficult to find the time to do so. For this reason, consider arranging a monthly financial date night. Open a bottle of wine, order some take-out, and take an hour or two to look at your monthly expenditures, the debt you've tackled and any other financial-related topics you've been thinking about.

-article courtesy of Axiom Mortgage Partners

Buying a “fixer-upper” but don’t have enough cash to do the fixing?

2011-04-29T15:09:00.001-06:00

Have you searched high and low for the perfect home but can’t find one with all the upgrades you want? Maybe you’ve just saved enough for your down payment but don’t have the extra cash to change the furnace, replace the flooring, windows or whatever...let me help!
CMHC offers a Purchase-Plus Improvements mortgage that works wonderfully for individuals in this situation. The program allows you to purchase a home and add the cost of upgrades into the mortgage! This allows you to do the work now and improve the value of your home instead of adding the renovation costs to your credit card (with very high interest rates) or having to wait to save up the cash.
How does it work?
When you find a house that you want to buy, make a conditional offer (subject to financing). During your financing period, you’ll need to send me written quotes for the work to be completed. I’ll have them submitted to CMHC who will underwrite your file, and approve the quotes (OAC). Once you’ve taken possession you’ll have 12 months to complete the approved upgrades. Once you’ve finished them, just give me a call! I’ll let you know what documentation will be required as proof the upgrades have been completed. Once satisfied, your lawyer will be advised to cut you a cheque for the renovation totals. Easy as that!
If you would like more information on the Purchase-Plus Improvements Program, please contact me today!

Three charged in mortgage fraud case...

2011-04-12T13:31:00.002-06:00

Three people have been charged in a massive mortgage fraud case in Alberta. Two men from Alberta, and one from B.C. are being charged with a variety of offenses in connection to fraudulent mortgage dealings. The case was investigated over a six year period and involves 97 properties and 15 mortgage lenders.
How did these alleged fraudsters do it? They approached other individuals to get a mortgage for them.
I think this case brings up a good opportunity to discuss this sort of thing. If you are ever approached to do something like this, don’t! It might sound like a good idea, perhaps maybe even too good to be true. Heed your Mother’s advice, “if it’s too good to be true, it probably is”. Mom always knows best!
This sort of thing is no joke and these schemes create very significant losses for the mortgage lenders and other victims involved.

Boring is good...

2011-04-12T13:14:00.001-06:00

I’m going to keep this one short and sweet as I don’t really have much to report! The Bank of Canada, as predicted, left its key interest rate unchanged. What does this mean to you? The prime rate has stayed the same. If you have a Home Equity Line of Credit or a Variable Rate mortgage your payment’s going to stay the same. In this case, no news is good news!
The Bank of Canada’s next scheduled interest rate announcement is Thursday, May 31st 2011.

A moment in praise of Edmonton...

2011-04-08T10:04:00.005-06:00

With today’s announcement of a brand new Royal Alberta Museum to be built downtown I must say that Edmonton really has it going on right now! This latest announcement is on the heels of news that the downtown arena also has the green light (almost...now we just need to get Steady Eddy to cough up some coin).

We already have a beautiful city hall; a gorgeous new art gallery and now look forward to a new central museum and a state-of-the-art arena. The Anthony Henday is soon to be completed; Edmonton will enjoy a ring road to take us here and there in record time.

While every city has its pros and cons I truly believe that great things are on the horizon for this city. Experts are predicting an impending boom to start in the next 12-18 months; we have great jobs with lots of opportunity for those that want it, affordable housing, a great arts and culture scene, fantastic summer festivals and now a soon-to-be amazing downtown core with a new arts and entertainment district. I’m really proud of city council for having the vision to invigorate this city with new amenities and cultural institutions.

Get ready for the another one!

2011-04-05T16:14:00.009-06:00

In a recent article in the Edmonton Journal, real estate guru, Don Campbell predicts that Edmonton is on the verge of another real estate boom.
Campbell, who is president of the Real Estate Investment Network, states that “Alberta is uniquely positioned in the world to be a stable, consistent and growing source of the four things that the world is going to need over the next decade- food, fuel, fertilizer and forestry.”
Campbell has over 19 years experience in studying the real estate market and has projected that the perfect storm is brewing in Alberta. His advice? Don’t wait until the market is in a frenzy until you buy. If you do, you’ll likely pay a higher price for the home and have to compete with other offers. His suggestion? Buy now but try to stick to areas close to the core of the city or areas to be serviced by the Anthony Henday expansion such as Castle Downs, St. Albert and northeast Edmonton.

Is a HELOC right for you?

2011-04-04T13:48:00.004-06:00

Home Equity Lines of Credit (or HELOCs) have become a popular way to borrow money at a lower cost than a credit card or line of credit. Because you're essentially borrowing from the equity you've built up in your home, you can do so at a much lower interest rate - with a lot more flexibility.
This has enticed many homeowners across the country to take advantage of this mortgage product - volume-wise, HELOCs have grown by 170% in the last 10 years, according to the Bank of Canada.
What many homeowners tend to lose sight of is that this product is still a form of credit - and still has the potential to turn into burdensome debt.
Because they don't require any principle payments, and you have the option of making interest-only payments, it's easily-accessible cash that requires little discipline.
So if you've been thinking of getting a HELOC, what precautions can you take to avoid falling down a slippery, debt-laden slope?
Here are a few tips:
1. Go in with a plan. Establish ahead of time what you will use your HELOC for and what you won't. Some uses, such as consolidating higher interest debts, are maybe more worthy of tapping into your home's equity. A vacation is something that should probably be saved up for.
2. Don't pull down too much. Deciding on a "magic number" amount is important as well. Start with the end in mind, and only pull down an amount that you can realistically pay off in two to five years.
3.Borrow from your home to improve your home. Your home is likely one of your biggest investments, so it's important to strategically decide how much of that hard-earned equity you want to sacrifice. Typically, using equity to improve the value of your home is always a good move - especially if you decide to sell it soon afterward, and can use the increased selling price to pay off your loan.
-Courtesy of Axiom Mortgage Partners

Why use a mortgage Broker? Integrity, industry knowledge and service.

2011-04-01T16:08:00.009-06:00

I was just browsing through First National’s website and found a great little information piece about mortgage brokers. I've been supporting First National since I began mortgage brokering. They are one of my favourite lenders because they have great turnaround times, solid mortgage rates, great broker service and fantastic underwriters. In their broker piece, they list some questions you should ask your mortgage broker before proceeding with them! If they can’t answer these questions to your satisfaction, move on! There are lots of great mortgage brokers out there!

Here are my answers to the questions posted on First National’s website:

1. How long have you been a mortgage broker? 4 years, full time. This is not a part time occupation; it’s my bread and butter!

2. How long has your company been in business? Mortgage Success has been around since the fall of 2008. My broker, Roberta Hardern, was previously a partner at River City Financial Services. She has a long background in mortgage brokering (10+ years) and oversees the day-to-day operation of Mortgage Success.

3. Can I get references from your clients? Yes! Please visit the testimonial section of my website. If you would like further in-depth testimonials please ask me and I would be happy to put you in touch with some of my past clients.

4. How do mortgage brokers make money? We’re paid by the lender that funds your mortgage.

5. What is your experience with this type of transaction? I have lots of experience arranging residential mortgages for first time buyers, self employed individuals, revenue property purchases etc.

6. What is the process for closing my mortgage? This is a long winded one, likely better explained when tailored to your individual situation.

7. How quickly can it be done? It all depends, see above!

8. Which lenders do you work with and why? I work with a variety of lending institutions. I do try to stick mostly with the larger players in the market and ones with solid reputations in the industry. I want you to be happy with your mortgage once you have closed your transaction so I always keep the lender’s reputation and client service history in mind.

Working with a Mortgage Broker (from First National's website)

Today, about 30% of Canadian homeowners arrange their mortgages through mortgage brokers – independent specialists with extensive knowledge of mortgage lenders’ product offerings, their features and benefits, and contacts throughout the lender community to ensure competitive rates.

What can a Mortgage Broker do for you?

Mortgage Brokers are experts dedicated to finding the right mortgage solution and simplifying the mortgage financing process. The Broker will take the time to understand your individual situation and tailor the best solution from among the hundreds of products available to today’s homebuyers. Brokers complete all the paperwork and keep up-to-date on industry issues and changes that could affect the decision you make about which mortgage solution is right for you. A Mortgage Broker will save you time. Comparison shopping involves going from lender to lender repeating your story, asking the same questions and analyzing the answers. That’s time most people don’t have.

On top of that, home financing is highly competitive and each product can be complex, which is why you should have an expert on your side. A Mortgage Broker will also work with you on strategies to manage monthly payments or improve your credit rating.

Questions to ask your mortgage broker: A Mortgage Broker will also work with you on strategies to manage monthly payments or improve your credit rating. As the term "broker" suggests, he or she gets paid a commission when originating or renewing a mortgage, so you don’t pay a thing!

1. How long have you been a mortgage broker? 2. How long has your company been in business? 3. Can I get references from your clients? 4. How do mortgage brokers make money? 5. What is your experience with this type of transaction? 6. What is the process for closing my mortgage? 7. How quickly can it be done? 8. Which lenders do you work with and why? Why use a mortgage Broker? Integrity, industry knowledge and service.

Experts Best at Brokering Mortgage

2011-03-31T14:29:00.005-06:00

Cheryl Hutton and Aaron Coates always thought getting a mortgage would be a challenge. But within 18 days of visiting a mortgage broker, they were able to close a deal on a new townhouse in Calgary without a hitch.

Now in their early thirties, both have careers in the theatre, something Ms. Hutton says has been a bit of a sticking point with banks. "In our industry we never fit the paperwork guidelines 'for the banks.' For some reason, people don't think we pay our bills."

Although it was their first home purchase, Ms. Hutton says it was surprising how easy the whole process was once they had someone who could walk them through it. "He sat us down, told us what our options were, showed us that it was possible and explained all the steps we needed to take. If it wasn't for him, we may not have made the leap."

Sorting through a mortgage process and negotiating rates can be overwhelming for first-time and seasoned home buyers alike. That's why people such as Ms. Hutton and Mr. Coates turn to brokers to do the legwork for them.

Yet mortgage brokers will tell you that a good portion of home buyers out there don't really understand what they do. "Part of the challenge we have in our world is that people aren't really sure what a mortgage broker is," says Gary Siegle, regional manager for Invis Inc., a mortgage brokerage firm in Calgary.

Brokers should not be confused with "rovers," mortgage specialists attached to a specific financial institution who visit customers outside of banking hours, Mr. Siegle explains.

"They only deal with that bank's product. A broker, however, is an intermediary whose job is to make a match between a lender and a borrower. We represent the individual, not the bank."

About 30% of mortgages in Canada are done through a broker, according to Perry Quinton, vicepresident, marketing, for Investor Education Fund, a Toronto-based non-profit financial information service.

"The reason more people don't know about them is because the banks are so visible. It's easy to gravitate to them when you have your savings accounts, credit cards and investments there already," Ms. Quinton says.

Going for the comfort factor could cost you however, she adds. "A broker has access to different lenders including banks, and can shop rates and features. A half per-cent may not sound like much but that could make a difference of about $20,000 for a $250,000 mortgage amortized over 25 years. Any little bit helps."

Mr. Siegle confirms that shopping around can deliver significant savings. "Let's take today's average posted rate of 5.44%, and you get a point off that at your bank. So you think you just got a really great deal. But the vast majority of rates we deal with as brokers would be another 30 basis points lower - around 4.14%. And if you look at preferred deals that don't offer features such as prepayment privileges, it can get as low as 3.89%. That's another 25 basis points below what's generally available."

The reason for that is simple, he says. "We offer wholesale rates, banks offer retail."

For anyone considering a broker, Ms. Quinton advises people to do a bit of groundwork first if they have the time. "It helps to educate yourself about options and what you can afford. Look at all your living expenses, including student loans and credit card debt. Chances are you are understating those."

Another thing to look into is the different types of available mortgages and features, including interest rates, payment frequency, amortization, cash-back programs and the ability to make lump sum payments.

"Knowing these things before you go in can save you a lot of money," she adds.

Any mortgage broker you choose should always meet the right licensing and education requirements, so be sure to check their registration.

If you're not completely prepared, however, that shouldn't be a concern when working with a good mortgage broker, Mr. Siegle says. "After all, mortgages are pretty much all we do. So even if you come in cold, good brokers will walk you through the process and ask all sorts of questions," Mr. Siegle notes.

"You just need to be prepared to answer them openly and honestly so they can get you the best deal possible."

Denise Deveau, Postmedia News National Post - March 30, 2011

Three ways to free up monthly cash flow

2011-03-28T10:13:00.005-06:00

Let's face it - we can all use a little extra money in our pockets. While getting a raise or finding a higher-paying job may be in the cards for some of us, for the rest it's not as easy. That's why it's important to review your existing expenses every once in a while to uncover new ways to 'trim the fat'. Below are three areas you might want to target first: 1. Car Insurance. As is the case with mortgages, when it comes to renew their auto insurance policy, most car owners opt to blindly renew with their existing insurance provider, rather than shopping around. If your policy is up for renewal in the coming months, you may want to do a bit of shopping yourself, or ask your insurance broker to do the legwork for you. Some policies differ by as much as $600/year or more - and if you switch your home insurance to a packaged policy, the savings can be even greater. 2. Communications Services. Most households spend the bulk of their discretionary income on communications - such as phone, cable, Internet and cell phones. If your communications bill has ballooned to a larger number than you'd like to see, it might be time to give your communications provider a call. It seems every week they're offering a different promotion that could end up saving you significant cash. Just call their customer service line and, if you have more than one service with them, ask if they can walk you through each one to make sure you're getting the best possible deal. Another option is to re-evaluate your services. If you haven't watched the movie channel in months, or could realistically get away with just using your cell phone instead of both a land line and a cell phone, trim away! 3. Bank charges. If you're the type of person who gravitates towards the nearest ATM - regardless of whether it's your home bank's or not - you may want to spend a bit of time tallying up your bank fees. If you're racking up ATM fee or overdraft charges, it may be time to re-evaluate the type of account you're using. For an additional monthly fee, many banks will increase the amount of times you can use Interac or external bank machines. Depending on how much you're currently spending in bank fees, the higher package may be worth the extra cost. -Axiom Mortgage Partners

35 year amortizations are gone- but not entirely

2011-03-22T15:25:00.001-06:00

While Canada's tighter mortgage rules - which took effect on March 18 - saw the maximum amortization drop from 35 years to 30, that rule actually only applies to insured mortgages.

Any mortgage has to be insured if it makes up more than 80% of the value of the home. So if you have a 20% down payment or above - or if you have more than 20% equity in your home upon renewal - you don't require the help of CMHC or its counterpart, Genworth Financial. Technically, that also mean you should be able to get your hands on a 35-year amortization.

The thing is, as we've seen with the tightening of previous mortgage rules, lenders seem to abide by the government's new guidelines whether they are offering insured mortgages or not. This time around, however, certain lenders are going out on a limb and continuing to offer 35-year amortizations for "conventional" (or uninsured) mortgages. One lender that comes to mind is ING Direct.

Many lenders, however, are still opting to eliminate the 35-year amortization all together. If you're up for renewal, or in the market for a new mortgage, and would like to obtain a 35-year amortization, drop me a line and I'll be sure to tell you what your options are.

-Axiom Mortgage Partners

Keep more coins on your piggy bank with the HBTC!

2011-03-15T12:35:00.022-06:00

What is the HBTC?

Since it’s tax season I figured it’s a good time to remind all of you about the HBTC. The HBTC applies to individual’s that have purchased a property after January 27th 2009. If this applies to you, you may be eligible for the First-Time Home Buyers' Tax Credit offered by the federal government.

Click here to get the nitty-gritty on the program!

Don't treat your mortgage like rent!

2011-03-14T10:13:00.006-06:00

For many first-time buyers it is easy to get into a new home and a mortgage and continue to treat the same way you did when you were renting. You can make a significant impact on how quickly you payoff your mortgage by just paying a little attention to it.

While renting you get into the habit of paying your regular monthly rent bill month in and month out. With your mortgage it is important to remember that you have the opportunity to pay extra whenever you can. Yes, I know paying extra never sounds like a great idea. Trust me, in the instance it is a fantastic idea!

By making additional regular payments you can significantly shorten the time it takes to pay off your mortgage and therefore save yourself thousands of dollars. Lets consider a real life example of a first-time buyer with an aggressive mortgage paydown strategy. Lets call them Jane and Joe. Jane and Joe realized that their mortgage was potentially going to be the biggest purchase they ever made (Yes, more expensive than their house if they took a full 35 years to pay it off). They asked their mortgage broker about some strategies to reduce their mortgage faster.

Their mortgage broker recomended bi-weekly accelerated payments to start, that is they took the regular monthly payment (amortized over 25 years) divided that by two and made that payment every two weeks. As any of you who get paid every two weeks knows, that means that there are two months out of the year where they were making 3 payments. The net effect of this was to reduce their amortization to about 21 and a half years.

Joe really liked the idea of getting rid of their mortgage faster and once he got into the house and established their budget he started looking for other ways to accelerate the mortgage paydown. The couple had a water cooler that they had brought from their apartment that cost them $26/month, they also had those 'free' (for the first 3 months) movie channels that actually cost them almost $40/mo. Joe quickly removed both of these expenses and called his bank to increase his bi-weekly payment by $50 (now they were down to about 18.x years).

The couple took their tax refunds over the next 3 years and applied them to the mortgage each year (down to under 14 years now). They had originally taken a 3 year term at 7.15% in 2000 and when it came up for renewal they were fortunate enough to obtain an interest rate of 4.49% for a new five year term. They kept their payments the same as the previous term so now they were paying off a substantial portion of principal each month. This combined with the application of more tax refunds left them in a spot where today (2011) they are now mortgage free!

Now you may not want to be quite as aggressive as Joe and Jane, but the point is that with a little bit of effort and focus you can make a substantial impact on the amount of interest you pay over the life of the mortgage without significantly affecting your lifestyle.

-Axiom Mortgage Partners

Talking about mortgage penalties...

2011-03-12T11:12:00.011-07:00

Peter Taylor, with ReMax in Edmonton interviewed me last Friday for his video blog. The topic? Mortgage payout penalties.
What's the deal with payout penalties? If you sign a closed mortgage and end up paying your mortgage out early, you'll incur a payout penalty. Generally speaking, most institutions charge a 3 month interest penalty or an interest rate differential, charging you whichever number comes out the highest. The difficult part to figure out, in regards to payout penalties, is how to actually calculate yours. This is simply because different mortgage lenders calculate the penalty in a variety of ways. It can get very complicated and confusing. Thankfully, in the March 2010 federal budget, the Finance Minister Jim Flaherty, promised to work on standardizing the mortgage payout penalties charged by lending institutions. This would be a welcome move, appreciated by mortgage consumers and independent mortgage brokers across the country!
Should you have a question regarding a mortgage penalty, please contact me anytime!

Thank you Peter for taking the time to interview and promote me!

Here's a clip of my interview with Peter. Wow! I didn't realize how much I talked with my hands (try your best to ignore my flailing limbs which seem to almost take Peter out a few times)! :)

A shout out to my fellow industry members, this is basic stuff!

2011-03-09T10:32:00.003-07:00

Last week I received a call from someone that was selling their house and was already working with a mortgage broker but wanted a second opinion.
You see, she had listed her house for sale, via a real estate agent and was pre-approved by a mortgage broker.
She was planning on paying out her mortgage and getting a new mortgage on the new house for credit reasons.
The reason that she phoned me was that her mortgage broker originally told her that her payout penalty with one of the big banks would be $2,000, thus leaving her enough money, after all was said and done, for a down payment on her new house.
The problem was, when this woman phoned her bank directly, she was told that her payout penalty was significantly higher than $2,000.
Let me point out that I would NEVER calculate a mortgage penalty for someone...simply because this is what can happen. Banks calculate penalties in different ways so it’s important to obtain a penalty quote directly from the bank itself.
I asked this lady if her Realtor or Mortgage Broker had taken a few minutes to calculate what her net proceeds would be after she sold her house. No one had! I was absolutely shocked. Now, I don’t like to slag my industry members but this really isn’t acceptable. I got out my form and went through the calculations with her, coming to the conclusion that if she sold her house she actually wouldn’t end up with enough money to purchase a new home. How disappointing for her, and the whole thing could have been avoided had her Realtor and Mortgage Broker done some very basic calculations.
For anyone out there that has a house for sale and needs to know how to figure out their net proceeds, you can use the form below. Please note that these calculations are approximations but should give you a general idea of how much you will net after all is said and done.

Net Proceeds from Sale:

Use this form to figure out approximately how much money you will receive after all of your selling costs have been paid out. This is a great form to use to estimate the amount of funds you will have leftover for the down payment on your next home!

Name:_________________________________________________________ Date:__________________________
Address:________________________________________________________
Projected Sale Price:______________________

Annual Property Taxes:_______________________
Mortgage Balance:______________________________________________

Interest Rate:_____________
Approximate Gross Equity:____________________

Projected Close Date:_____________________

ESTIMATE OF CLOSING COSTS:
 Real Estate Commissions (please ask your agent for %) $______________
 GST on Real Estate Commissions $______________
 Legal Fees $______________
 Property Tax Balance Owing $______________
 Discharge Penalty on Mortgage $______________
 Repairs etc. $______________
 Other $______________

ESTIMATED CLOSING COSTS: $______________
Projected Sale Price: $______________
ESTIMATE OF NET EQUITY: $______________

Calculating your debt service ratio

2011-03-07T10:41:00.003-07:00

With all the talk about debt thats been in the news lately, you may be tempted to see where you stand financially, especially with the looming threat of increasing interest rates.

An easy way to do this is by calculating your debt-service ratio, the same calculation that banks use to determine whether you're a prime candidate for a mortgage. Simply calculate all your monthly debt payments, including your mortgage, minimum credit card payments, car loans, student loans, leases and any other form of loan. Next, calculate your gross monthly household income. Divide your debts by your income, multiply by 100 and that's your debt service ratio. To be in a healthy range, that number should be under 40 or, better yet, 35.

Some people find it more accurate to use their net income, rather than their gross income, for their personal debt service ratio calculation. Since you don't really have access to their full gross income, net income is a little more helpful in determining what percentage of your take-home income you're actually spending.

With interest rates expected to go up, you may want to fiddle around with the numbers, particularly higher mortgage payments. If you're set on sticking with a variable rate mortgage, experiment with different interest rates to see how high they can climb before you start to feel uncomfortable. While you're at it, see what your financial state would be if you locked in to a fixed rate today.

If you're already on the high end of the debt service ratio, you may want to consider trimming down your other debts, or uncovering ways to bring in extra income, to prepare for the upcoming increases.

-Axiom Mortgage Partners

A sigh of relief for variable rate mortgage holders...

2011-03-02T10:31:00.001-07:00

Bank of Canada maintains overnight rate target at 1 per cent

The Bank of Canada announced that it is maintaining its target for the overnight rate at 1 per cent.

In its decision, the Bank showed caution in the face of an improving Canadian economy.

“The recovery in Canada is proceeding slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand,” stated the Bank. “While consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes”

Bank of Canada Governor Mark Carney indicated that while there is evidence of a recovery in net exports, “supported by stronger U.S. activity and global demand for commodities” the global economic recovery still poses risks, such as the upheaval in Middle East oil-producing countries.
“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. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which could be further reinforced temporarily by supply shocks arising from recent geopolitical events,” said the Bank.

TD senior economist Pascal Gauthier said in a statement that he thinks July 19 is the likeliest date for a raise in the BoC policy rate. "Those looking for a change to a more hawkish tone, particularly in the forward-looking guidance part of the statement were disappointed."

RBC said today's announcment indicates that the Bank needs to be convinced that the stronger momentum will continue. "Our forecast is that the economy will record another solid gain in the first quarter of 2011 of 3.7 per cent and that the economy will grow by 3.2 per cent this year, which is well above the Bank's current 2.4 per cent estimate. The balance of risks to the Bank's current outlook is clearly skewed to the upside, and we maintain our call for 100 basis points of rate increase in 2011 with the first hike coming in May 2011," said Dawn Desjardins, assistant chief economist, RBC Economics.

The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

-Mortgagebrokernews.ca

Mortgage Advice for Couples Planning a Divorce

2011-03-01T10:19:00.006-07:00

Maybe it’s something in the air, or maybe the exceptionally long, cold winter is taking its toll on Canadian marriages. I am coming across an awful lot of articles and blog entries on divorce and real estate. Here is a blog post from another Toronto based mortgage planner explaining the nitty gritty of divorce and property ownership.

Purchasing property when you're going through a divorce...

2011-02-23T14:11:00.008-07:00

I came across a great article written by a fellow Axiom Member, Marcy Berg. Marcy owns Mortgages4Women operating out of Ontario. During my last 4 years as a mortgage broker, I’ve come across many clients who are in the process of getting a divorce and are alarmed when I explain that they will need a separation agreement in order to purchase new property. Please read on for more information on purchasing property if you are currently going through a divorce.
Going through a divorce can be a very scary and emotional time for a lot of people. The best thing you can do is to keep up with all of your payments (don’t assume your soon-to-be-ex is paying your credit card or vehicle loan for you). I have seen a lot of good credit ratings get pummelled because of assumptions such as these. Keep your paperwork organized and stay positive!
Last week I had a conversation with Gail Walker, a Divorce Consultant with Moving Forward Consulting. I refer clients to her if they need assistance with their divorce and don’t know where to start. She is in the business of listening to your story and directing you towards services that can help. Feel free to contact her if you just don’t know how to get started!
If you require more detailed information on your specific situation, please email or phone me anytime!

Thursday, February 3, 2011
The Business of Divorce
The first firm and legal binding contract most of us will ever sign is the day we get married. Thank goodness for all the happiness that comes with a marriage or most of us would never consider it. Oh wait - we don't. Who amongst us buys an hour of a lawyer's time to review the ins and outs of family law? The second biggest firm and legal binding contract most of us will ever sign is when we buy a home.

January is the time when I see a lot of people who made it through the holidays and now want out of the marriage. The assets will be split and they want to buy a home of their own. But wait - there's the business of Divorce that needs attention.

If you were legally married you are married until the court recognizes otherwise. To undo a legal contract you need another legal contract that recognizes your intent. Without this separation agreement or divorce you are married. If you are married and you buy a home you need your spouses permission. As Draconian as that sounds it's the law. Don't believe me? Check the deed of your home. You will see on the front page you made a declaration that you are or are not a spouse. If you are a spouse your spouse also needs to sign the deed acknowledging you own property.

For this reason a lender requires a copy of your separation agreement before they can lend you money for a mortgage. It's for no other reason than family and property law. I can't tell you how many times I see people in my office shocked to find this out. Yes there are options but after you've said or heard "Honey I'm leaving" it's not a great time for a collaborative conversation.

If you're thinking that your marriage is coming to an end please do your homework. Working with a Divorce Financial Analyst is one way to plan ahead. I have seen very good results with this service. If having a home of your own is part of your plan make sure you consider the following:
1. Value of your home - this asset will most likely be split with your spouse but the formula for the division of assets is clearly set out by the courts.
2. Penalties - call your lender and see what the penalty is to get out of your mortgage. If your taking a spouse off title you will need to redo your contract with your lender and you will need to qualify.
3. Real Estate Fees - what will it cost you to sell the house? Don't forget to add the cost of the lawyer.
4. Pre-Qualify - what will you be able to afford on a new mortgage? What income are you planning to use to qualify for the mortgage? (If using alimony or child support most lenders would like to see a minimum three to six months of payments deposited to your bank account before they will consider them).

-Marcy Berg

Sneaky debt collectors

2011-02-22T10:37:00.000-07:00

This article in Thicken My Wallet does a great job of highlighting some sneaky tactics used by debt collectors. Worth a read!

The Rolls-Royce of financial calculators

2011-02-16T15:01:00.006-07:00

I just happened to come across an amazing website dedicated to all sorts of financial calculators.

Curious about how much home equity you should end up with after a certain time period? Thinking about renting out your basement? Considering purchasing an investment property? Want to compare a few different mortgage options? Trying to figure out if you should purchase RSP’s? Wondering how much income tax you’ll have to pay?

Ultimate calculators is for you! Ultimate Calculators is a collection of free financial calculators designed for home owners, investors, tax payers, students, professors, professionals and small business owners.

Steps to Financial Fitness

2011-02-14T12:10:00.002-07:00

In the 2009 Federal Budget the government assigned a Task Force on Financial Literacy to come up with an action plan to increase financial literacy levels in Canada. Last week, the much-awaited report was released. You can read it here: http://www.financialliteracyincanada.com/eng/about-the-task-force/mandate.php

If you're looking to improve your own personal financial literacy level, below are a few tips to get you started:

1. Establish your goals.
When it comes to financial literacy, where do you want to improve? Do you want to start investing? Saving? Learning more about certain financial topics that currently intimidate you?
2. Immerse yourself in the online community.
There are a plethora of blogs and Twitter accounts out there designed to offer tips and tricks for individuals who are looking to improve their financial literacy. Canadian Capitalist, Million Dollar Journey and Thicken My Wallet are three good places to start.
3. Start reading the business section.
And more specifically stories that relate to personal finance. Many newspaper articles and columns will address complicated financial topics in a simplified manner. They'll also talk about new government programs and rebates as they arise.
4. Talk to people.
If you have a friend who is an investing wiz, talk to him or her! They'll probably be able to point you in the direction of interesting books, trusted professionals or other resources that can help you along your journey.
-Article courtesy of Axiom Mortgage Partners

A few words of advice from my good friend, Julia

2011-02-10T13:01:00.001-07:00

Julia Krause is a very reputable mortgage broker based out of Kelowna, BC. She taught a fantastic mortgage course that I attended during my first year mortgage brokering. She has a vast knowledge of the mortgage business along with many words of wisdom and I trust her opinions.
That being said, here is a great article she wrote regarding the current interest rate climate:

As they say in the UK...
by J. Krause Mortgage Services on Thursday, 10 February 2011 at 12:49

Interest rates, interest rates, interest rates!! OK, here's how it works:

If you're in a variable rate mortgage, changes in prime are what affect you. Prime changes based on the economy in general. Things like unemployment figures, inflation, the dollar, exports, stuff like that. Prime only changes on specific, pre-scheduled dates. It doesn't change unexpectedly. When it does change, it changes by a quarter or maybe a half of a percent at a time.

Longer-term mortgage rates (5 year, 7 year, 10 year) are affected by the bond market. The bond market is where money for these longer-term mortgages comes from. And the bond market is affected by the stock market. When the stock market is doing well, investors leave the safety and modest returns earned in the bond market and try their luck in the stock market. Less money in the bond market means interest rates on longer-term mortgages go UP. When the stock market is not doing well, investors go back to the security of the bond market. More money in the bond market available for mortgages means interest rates on longer term mortgage go DOWN. Basically, this is supply & demand. When lenders have to pay more for this money, they raise the rate they charge you for it. That's what happened yesterday. Longer term rates went up a little. It's normal. And they can just as easily go down again.

Mortgage rates have been low for a very long time now. Actually, they have been at historical lows. To ask an economist or a bank CEO or even the Finance Minister, 'where are interest rates headed?' of course the answer is 'up'. They can't go any lower! The question is WHEN. And there's no way to know when. It all depends on the things mentioned above... the economy in general, and the bond market. In the meantime, I'm going to enjoy paying the least amount of interest possible on my mortgage. And you should, too.

As they say in the UK...

My nifty new site!

2011-02-10T10:21:00.005-07:00

New Website! I've recently launched a new, fresher version of my website! Please take a moment to browse it's contents for up-to-date mortgage information.

A voice of reason...

2011-02-08T16:55:00.003-07:00

Finally, someone with a bit of perspective! No, the sky isn't falling...it's just real estate. Things go up and down. It's called life.
Please watch this video featuring the Realtor Association’s former President, Larry Westergard. He has some great points to make about the local real estate market in Edmonton and offers his perspective on today’s rate increase.
I am honestly not sure why the media is making such a big deal about today’s increase. A .20% increase in interest rates is normal! Rates fluctuate up and down. This is nothing new!

Click here view this video!

Confused about the new mortgage changes? Join AMBA for their webinar: Understanding the Changes to Mortgage Lending Rules!

2011-01-31T16:08:00.008-07:00

On February 9, 2011, at 7 p.m. AMBA will host a webinar to address concerns and bring clarity regarding the new mortgage rules which will be in place March 18th 2011.

Your credit score: Decoded

2011-01-31T11:20:00.004-07:00

While credit scores seem to be arbitrary, they're actually determined according to a rigid mathematical formula. Every debt, credit card and late payment is weighed differently -- and these weights differ between TransUnion and Equifax. In general, Equifax Canada weighs its components something like this:

Payment History -- 35%
This typically involves recent payments that are more than 30 days late, as well as any collections, judgements or bankruptcies

Outstanding Debt -- 35%
This includes the number of creditors owed, credit card balances and allocated limits. A maxed out credit card will have a deeper impact on your credit score than a card with a $200 balance

Credit Account History -- 15%
This refers to the length of time your accounts have been open. If you've been using a credit card for ten years and have been paying it off on a regular basis, this actually has a positive effect on your overall credit rating

Recent Inquiries -- 10%
Every time you apply for a loan or credit card, lenders have to access your credit report to see your score and assess your credit worthiness. Too many of these in a 12 month period -- say, if you were shopping around for a mortgage -- can reduce your rating.

Types of Credit -- 10%
If you have a mix of different types of credit -- including revolving credit, such as credit cards and lines of credit, and installment loans that you pay monthly, such as student loans -- the better your credit picture will be.

Curious about your credit score? Order a copy HERE!

-courtesy of Axiom Mortgage Partners

Are U.S. brokers giving Canadian brokers a bad name?

2011-01-28T14:18:00.000-07:00

Canada’s mortgage brokers are voicing concerns that negative press in the United States is hurting their business, and their reputations.

The findings are a result of a survey of over 500 Canadian mortgage brokers conducted by the Real Estate and Mortgage Institute of Canada (REMIC), which found that 72 per cent feel that they are being inaccurately tarnished by their American counterparts. Broken down by province the numbers varied however, with 80 per cent in Ontario, 78 per cent in BC and 56 per cent in Alberta agreeing with the statement.

“Canadians have been inundated with stories of how mortgage brokers in the United States, due to questionable business practices, contributed to the American mortgage meltdown,” said REMIC President Joseph White. ”Canadian mortgage brokers typically employ sound business practices, are highly regulated and ongoing surveys show that their customers exhibit high levels of customer satisfaction, a far different experience than what has been reported in the United States.

“The survey further indicates that Canadian brokers want to see a more accurate reflection in Canadian media of the uniquely Canadian experience, a reflection that has been overshadowed by the negative reports about their American counterparts.”

Dave Larock a mortgage planner with TMG The Mortgage Group said that while he personally hasn’t encountered this reaction, he knows it’s unfair for Canadian brokers to be tarred with the same brush as U.S. brokers. “It`s every Canadian broker`s job to ensure that customers understand that just because we share the same job description it doesn`t mean that we have anything more in common with U.S. brokers.”

For Vince Gaetano, vice president and principal broker at MonsterMortgage.ca, the issue is ensuring clients are informed. “The two styles of business are completely different. As an industry participant, every mortgage agent in Canada needs to be able to explain the differences to any client that has a concern about the negative press south of the border and I don’t think there are many clients that have this negative impression.”

He also thinks some in the industry are using the bad press as an excuse. “I believe that the majority of our industry [doesn’t educate the customer] and as a result, they simply blame the negative press from the US for our shrinking market share.”

Martin Marshall, the chair of IMBA’s communication committee, doesn’t believe brokers have anything to worry about. “While IMBA is somewhat concerned that the negative press that U.S. Mortgage Brokers are continuing to receive may have a negative effect on our members’ businesses in the short term, we are confident that Canadians will continue to use the services of licensed mortgage professionals, who follow a strict code of conduct.”

-Mortgagebrokernews.ca

TD's new flexible payment features

2011-01-26T11:51:00.000-07:00

Today TD Canada Trust is introducing additional flexible payment features that will give customers more choice and control over their lives when they really need it.

■Pay down your mortgage ahead of schedule and you may have the ability to reduce your payments later for up to 4 months

New and renewing customers who pay down their mortgage ahead of schedule may qualify to later take advantage of a temporary reduction in their regular mortgage payment amount, an option that may be helpful in the event of short-term income reduction
■Pay down your mortgage ahead of schedule and you may have the ability to take a break later for up to 4 months

By paying ahead, not only do you get the benefit of paying off your mortgage faster, you also have more flexibility and control and may qualify to take a temporary break later when you really need it. This added flexibility can make things easier in many situations such as a maternity leave, caring for a loved one or temporary job loss.
■Pay down your mortgage on schedule and you may have the ability to defer or reduce a payment later

A major event can throw anyone off track. If youâ€™ve been paying your mortgage on schedule and are unexpectedly facing a major expense or an unanticipated reduction of income, at TD Canada Trust you may be able to defer or reduce one monthly mortgage payment a year up to four times during the life of their mortgage.

Interest continues to accrue during each of these events and is added to the outstanding balance at the time of each regular payment date.

If you are interesting in obtaining a TD mortgage, please contact me!

And the winner is...

2011-01-25T12:30:00.002-07:00

Genworth has announced the winner in their 4th annual “Meaning of Home” national writing contest.
The winning entry was selected from 2,400 submissions with the prize being a $60,000 donation to help build a Habitat for Humanity home in the region of the winners’ choice.
Congratulations to Karson Simpson, a grade 6 student in Guelph, Ontario, on her winning entry!

White hot housing...

2011-01-25T12:10:00.008-07:00

I saw this news story on Friday night and was absolutely shocked! I completely forgot to blog it. One thing is for sure, I’ll never complain again about the house prices in Edmonton!!!

White Hot Housing Market: A record is set after a dilapidated Vancouver home sells for over $1-million, the CBC’s Chris Brown reports

I was chatting with Lisa Brown, a REALTOR® with RE/MAX Real Estate, about this story and she looked up the 10 most most expensive properties in Edmonton. Check them out here!

Forgetful me...

2011-01-19T13:25:00.000-07:00

The Bank of Canada made a scheduled rate announcement yesterday and announced- nothing! No changes to the key interest rate for now. Guess I forgot to blog about as nothing changed!
For all the borrowers out there on variable rate, open or HELOC mortgages you can breathe a sigh of relief!
The next scheduled interest rate announcement is set for March 1.

What do the CMHC changes really mean to you?

2011-01-18T13:27:00.000-07:00

So, by now you’ve all heard that CMHC has changed things up a bit, mainly by removing 35 year amortizations. But what do the recent changes actually mean to you?

Using a purchase price of $350,000 let’s compare the monthly mortgage payment on 30 versus 35 year amortizations using today’s five year rate of 3.89% and assuming a minimum 5% down payment.

Purchase price: $350,000
Less 5% down payment: -$17,500
Amount ot be mortgaged: $332,500

Scenario 1: 35 year amortization
CMHC premium: $10,473.75
Total mortgage: $342,973.75
Monthly mortgage payment: $1,489.70

Scenario 2: 30 year amortization
CMHC premium: $9,808.75
Total mortgage: $342,308.75
Monthly Mortgage payment: $1,606.50

That works out to an extra $116.50 a month. Keep in mind, you will be saving significant interest costs over the life of your mortgage by choosing a shorter amortization.

If you have any questions regarding the recent changes to CMHC insured mortgages feel free to drop me a line anytime!

What are you thinking Mr. Flaherty?

2011-01-17T12:37:00.001-07:00

I just received this from my friends over at Axiom and wanted to share it with all of my followers:

Todays announced changes to the rules governing mortgage lending are just another indication of how out of touch our politicians are with reality. While I applaud any effort to create economic stability, it should be well thought out and actually have a positive impact.
Todays announcements include:
Reducing maximum amortization to 30 years
Reducing LTV of refinances from 90% to 85%
Removing the ability to insure high ratio HELOCS

The most significant of which is reducing the available amortization period. The 35 year (and even 40 year) amortization is not the cause of household financial woes in Canada. Reducing the amortization does little to nothing to reduce Canadian debt loads. The impact of reducing the amortization period will be to simply reduce the amount of mortgage a home-owner or prospective home-owner can qualify for. This means a trickle down which will take some first time buyers out of the market and put additional downward pressure on house prices. This measure effectively penalizes those who purchased with a 35 or 40 year amortization in previous years, and therefore were willing to pay a higher amount for a home because of the reduced carrying cost of an extended amortization.
If a household is prepared to spend $1000/month on housing then that number is not going to change because of a reduced amortization. It simply means they can buy less house leaving a smaller market for those trying to sell their home, who perhaps purchased with a higher amortization. The only real impact this change has is to increase the likelihood that those that purchased at the peak with minimal equity will end up with negative equity. This does not alleviate problems but in fact causes more problems. People are more likely to ‘walk away' from an asset with negative equity in tough times rather than fight through to protect an asset with real or perceived long term value. Mr. Flaherty you are effectively jeopardizing the equity that you purport to be protecting.

-Courtesy of Axiom Mortgage Partners

They're at it again!

2011-01-17T11:24:00.005-07:00

Jim Flaherty, the Federal Finance Minister, cited several changes to CMHC insured mortgages in an announcement earlier today.

The changes are:
-the maximum amortization on CMHC insured mortgages will be 30 years, as opposed to 35 year amortizations
- the maximum loan-to-value on CMHC insured refinance transactions will be reduced to 85% from 90%
- CMHC will no longer insure home equity line of credit’s (HELOC’s)
Flaherty cited several reasons for imposing the new changes:
-the maximum allowable amortization was changed to significantly reduce the interest costs to homeowners (we all know that your interest costs are lowered significantly when you choose a shorter amortization)
-the refinance rules were changed to prevent homeowners from refinancing their homes irresponsibly and to promote savings through home ownership
-CMHC has pulled away from insuring HELOC’s as they found that some financial institutions were allowing borrowers to roll too many consumer purchases into CMHC insured mortgages.
Flaherty stated that the purpose of CMHC is not to finance consumer purchases. This new rules does NOT mean that an individual can no longer obtain a HELOC, it just means that they cannot get CMHC insurance on that loan. HELOC’s are currently available at 80% loan to values on purchases and refinances.

My two cents:
Hindsight is 20/20 and the government is clearly trying to make up for irresponsible decisions on their part during the boom between 2005-2007. I have to argue that 0% down, 40 year mortgages should NEVER have been available and that these irresponsible lending policies on behalf of CMHC contributed to the mess we are now in (record levels of consumer debt). I also have to wonder if the government is making the same mistake it did during the boom, not having the foresight to see where these new lending policies will take us.
Flaherty has called these new changes “moderate” and I tend to agree. However, combined with the other moderate changes in the last few years, I think they all add up to be major changes to the mortgage/real estate industry.

CMHC changes in the last 3 years:
-removal of 0% down mortgages, reduced to 95% loan to value mortgages
-removal of 40 year amortizations, reduced to 35 years
-revenue property loan to values reduced to 80% from the previous 95%
-Minimum beacon score requirements of 600 imposed
-HELOC mortgage loan-to-values decreased from 95% to 80%
-Refinance loan-to-values reduced from 95% to 90%

Yes, I do agree that there is irresponsible lending and borrowing going on but I have to argue that the behaviour would not have been possible had CMHC not had the lending policies that allowed this behaviour to happen in the first place! The government is trying to put a break on this and reverse the problem but I think they are going a little too far in the other direction!

In my opinion, the government shouldn’t have been so liberal during the boom, and shouldn’t backtrack by being overly restrictive now. How can an economy get it’s mojo back with so many restrictions?

It will certainly be interesting to see where these latest changes take us. The Bank of Canada has a scheduled interest rate announcement tomorrow so stay tuned!

2011 Housing Forecast Seminar

2011-01-12T15:39:00.003-07:00

This morning I had the pleasure of attending the 2011 Housing Forecast Seminar at the Shaw Conference centre. I always look forward to this annual event as it helps to give me some sort of idea as to how the year ahead will unfold. Here is the Coles’ Notes overview of this morning’s presentation:

The Economy, Rates and Housing: In 20 Minutes or Less
Presented by: Ian Glassford, CFO of Servus Credit Union

The Global Economy- will show a continued recovery in 2011 and a weak recovery for developed economies. This sector is volatile but overall positive. There is some concern about dependence on a few economies including China, India and Germany.

The Canadian Economy- the economy can perform better than forecasted if commodities hold on, rates stay low and the dollar doesn’t get too strong. However, the economy can only go so far until the US rebounds.

Interest rates in the short term (next year or so)- will show modest upward pressure. Expecting modest interest rate hikes to start late spring/early summer. In Ian’s opinion, rates that are too low for too long create irresponsible behaviour from borrowers. If the rates increase too much, this could stall the economy so the Government of Canada has to find a healthy balance.

Interest rates in the medium term (1 to 2 years out)- the rates are likely moving up. The Bank of Canada sees “considerable monetary stimulus in place” meaning they have their foot on the gas and are warning that eventually they must put the brakes on.

Housing- the year will likely be very “ho-hum”. I personally think this is great news as the last 5 years have been extremely volatile and that is not good for the housing market in the long term.

Edmonton Economics & Housing Market Outlook
Presented by Richard Goatcher, Senior Market Analyst, CMHC Edmonton

Richard gave an overview of the overall economy as well as the Edmonton housing market. He concluded that the job losses experienced during the recession have reversed in recent months, full-time job gains are slowly returning and that we will really see this significantly in 2012, he also stated that employment growth will return in 2011.

Richard’s graph on interest rates showed annual average interest rates slightly lower in 2011 than they were in 2009 & 2010. Still significantly less than they were during the boom years.

Edmonton residential MLS sales have cooled since the beginning of 2010 (no surprise here) and that many experts believe we’ll have an opposite kind of year with modest sales to start and stronger sales as the year progresses (I tend to agree with Richard on this). Richard also added that we are currently in a buyers market with only 1 in 5 listings sell in a given month.

MLS System Market Forecast
Presented by Chris Mooney, REALTORS® Association of Edmonton

Rural Recreational Forecast- lots of choice with long days on market. Gasoline prices will have an influence on the value of rural properties.
Forecast: slow & no change.

Commercial Forecast- the 2010 sales were up and could be up even higher if all REALTOR® sales were reported. Commercial clients generally seem optimistic. Forecast: trend upwards with values over $300 million.

Multi-Family Forecast- the condo conversion trend is over (yay for that!), most multi-family sales will remain as rentals (I kind of disagree with this as lots of singles and child-free couples still choose condos), rents should creep upwards with little incentives for renters.
Forecast: low volume but steady

Residential Single Family Dwelling Forecast- the market will remain stable as long as external forces don’t intrude, steady as we go! Prices should rise 3% overall with seasonal fluctuations. Inventory up to 7,000 units in the spring and then normal thereafter.

Residential Condo Forecast- condo purchase are a lifestyle decision for singles (especially women), young couples and empty nesters. Most condos do not appeal to families. Newly completed condos will create pressure on re-sales.
Forecast: sales and prices to remain static

My two cents:

Overall this was a great forecast and there was a definite improvement in the attendee sentiment when compared with the forecast last January. This time last year I observed a lot of worried faces in the crowd and presenters that were trying their best to put a positive spin on a very uncertain market. This year was marked with a very calm, steady-as-she-goes energy. I don’t think anyone in the industry expects a repeat of the boom-times of 2007 and nor do we want it. I think we all realize that a balanced, healthy market is best for everyone.
A home is where you hang your hat and at some point you must make the choice between renting and buying. At the end of the day, you need a roof over your head. You can spend a great deal of time fretting over the “investment” and whether prices are going up, down, sideways or you can get on with your life in your new place.

Given this, I have to wonder what any first time buyer is waiting for! The interest rates are still at historical lows (and we aren’t sure how long this will be the case), there is lots of inventory to choose from and prices are down. If you’re a first time buyer there really isn’t much to dislike about the current market situation!

What's your home worth? It depends who you're asking!

2011-01-06T11:42:00.003-07:00

Here's a new story that was on Global last night about the current market value of real estate in Edmonton. The story features a Realtor I work with often, Lisa Brown of ReMax Real Estate!

Some money saving reading...

2011-01-04T10:00:00.000-07:00

Well, it's a new year - which translates into a new opportunity to analyze your finances and seek out some savvy cost-cutting measures. Here are a few interesting articles that will help you cut costs across your household budget:

Reduce your bills
This article in the Globe addresses five simple ways to reduce your household bills - from insurance to mortgage interest. While some of the suggestions are pretty straight forward, it reminds us that one of the best ways to save money is to avoid complacency - shop around for better mortgage, insurance and cell phone deals rather than simply automatically renewing with your existing provider.

Get a deal on your next car
This Yahoo! article discusses the best time of year to buy a car. While it argues that you can get the best deals if you go vehicle shopping on New Year's Eve, hitting the dealerships at the end of the month, or before next year's models are released, will also win you some good bargains.

Collect what's coming to you
This article by REIN is less about saving money and more about collecting the rent that's owed to you. If you're new to the role of landlord, it's worth a read as it offers some tips to ensure your tenants pay up every time.

-Article provided courtesy of Axiom Mortgage Partners

Merry Christmas!

2010-12-23T12:22:00.002-07:00

Just wanted to take a moment to say Merry Christmas and Happy New Year to you all! 2010 has been a very “interesting” year in real estate; filled with many ups and downs. That being said, I really do think the storm is over and calm waters are on the horizon!

I also wanted to take a moment to remind you all of the bank hours over the holidays. If any of you are considering purchasing a home over the holidays please keep in mind that the lenders are closed for two and a half days next week, only leaving 2 and a half days for business. I ask that you please consider these dates when writing your finance condition into your offer to purchase.

FRIDAY, DECEMBER 24TH – CLOSED AT 1 PM Mountain Time
MONDAY, DECEMBER 27TH – CLOSED
TUESDAY, DECEMBER 28TH – CLOSED
FRIDAY, DECEMBER 31ST – CLOSED AT 1 PM Mountain Time
MONDAY JANUARY 3RD - CLOSED

Link: interest rates

May Peace be with you all!

Resale housing activity rose in November.

2010-12-16T15:24:00.002-07:00

I haven't been posting much lately as I have been very busy with loads of corprate Christmas events (no complaining here:) but I've just found a good news story and figured it was time to get posting!

Edmonton resale house sales were up 6.9% over October. I certainly agree with these findings as November was a very busy month for me! Hopefully this trend continues and the spring brings a healthy and robust housing market here in Edmonton!

On another note, financial blogger, Frugal Trader, has blogged some pertinent points about purchasing a rental property that he wrote in 2007. While the post is a little old, the information is still very relevant. If you are considering purchasing a revenue property it would be a good idea to go through this list of rules from someone who has been doing this sort of thing for a while, and according to him very successfully.

Here is a breakdown of his rules:
1. The property must have a positive cash flow from the date you purchase it.
2. Purchase a home in a nice neighbourhood, one with typically low vacancy rates.
3. Buy properties that are in good shape and move-in condition.
4. Try to find a deal, a home under market value.

He doesn’t seem to give an opinion on what type of property is best, apartment style condo, duplex, townhouse to detached single family home. With a townhouse or apartment you won’t have to worry about an exterior maintenance which is great but you will have to pay a condo fee so be sure to include that cost when you calculate your monthly cash flow on the property.

Bank of Canada remains firm at 1%...

2010-12-07T12:09:00.003-07:00

In an announcement earlier today, the Bank of Canada left the key interest rate unchanged citing that the economy still has a lot of recovering to do. This is good news for variable rate and home equity line of credit mortgage holders as their interest rate will not change. The bank also predicted that they may keep the key interest rate low for some time if economic conditions remain the same.
The next interest rate announcement is scheduled for Tuesday, January 18th 2011.

December CAAMP Stats

2010-12-01T14:02:00.004-07:00

Here is the latest issue of CAAMP Stats, (CAAMP= Canadian Association of Accredited Mortgage Professionals) providing detailed information on all sorts of things like the Bank of Canada interest rate, Bank of Canada prime lending rate, Government of Canada bond rates, new housing starts, and the average MLS house prices. It’s a great quick reference resource!

Give your home a winter tune-up!

2010-11-29T12:26:00.002-07:00

Is your home ready for winter? Check this guide from CMHC to find out what you need to do to keep your home running smoothly throughout the winter months...

The good and the bad...

2010-11-18T11:28:00.001-07:00

The bad news is that rates are on the way up. The good news is that one of my favourite lenders Is offering to pay your legal fees if you refinance with them!

Conditions apply, of course, feel free to contact me anytime for the nitty gritty details!

Offer details:
• Limited time offer.
• Insured or insurable deals only.
• Rates are subject to change without notice and this offer may be withdrawn at any time.
*Terms and Conditions:
-Subject to title to the property not requiring change or correction.
-Registration of one mortgage, excluding variable registration costs in Alberta, Newfoundland and Prince Edward Island.
-Legal costs to discharge one existing secured institutional mortgage. Excluding the Lender’s discharge fees or penalties.
-Preparation, review and signing of all necessary documentation with the customer. Signings in Quebec must be conducted at a notary’s office and in BC may be required at a lawyer’s office; signing fee is included.

Urgent Rate Change Information

2010-11-17T11:56:00.000-07:00

Rates are increasing; I have had several lenders increase rates already. I can still hold a rate of 3.54% (five year term) for 120 days but this could change very quickly. If you are in the market to buy a new home or have been thinking of refinancing please contact me as soon as possible to complete a pre-approval!

Housing for newcomers to Canada

2010-11-15T13:15:00.002-07:00

If you are new to Canada and are looking for housing, here is some very valuable information courtesy of CMHC! They have a multitude of information on finding a place to rent or buy. The information is available in many different languages as well.

Renting an apartment

Buying a home

Looking after your home

When is the right time to buy? All the time.

2010-11-09T15:11:00.001-07:00

Here is some good advice I received from our partners at Axiom...

Here at Axiom, customers are constantly coming up to us and asking our opinion as to when is the right time to buy. In our opinion, if you're buying for the right reasons, it should always be the right time.

Over the last few years, as real estate markets across the country were heating up, Canadians gradually stopped seeing their homes as places to live, and instead viewed them as quick money-making investment vehicles. The thing is, whether you're investing in the stock market or real estate, the short-term approach is never a sure-thing.

The best investment strategies have a long horizon. Whether you're buying a stock in a reputable company like Boeing, or a home in good area, it will always go up in the long run. When you look far off into the future, it doesn't matter what the asking price was - or whether the mortgage you acquired was 0.2% higher than it was if you'd purchased six months earlier - you'll always come out ahead.

-Axiom Mortgage Partners

A new way to bank...

2010-11-01T12:42:00.003-06:00

The Royal Bank has unveiled it's new design for its branches. The new look is supposed to feel more like a visit to the Apple store than financial institution. The tellers will be pushed to the back of the branch and new, nifty technology features will be featured out front. This latest move is an attempt to entice new, non-clients, to come in and try RBC.

Mortgage broker channel to remain strong: Deloitte

2010-10-28T13:37:00.004-06:00

According to a report by Deloitte, the mortgage broker channel is to remain strong in Canada. The report states that in 2009, mortgage brokers initiated 38% of the total volume of mortgages in Canada. We are evolving from a "lender of last resort" in years past to a viable option for borrowers with good credit and income that want a competitive interest rate and good service from their mortgage professional.
A few notable trends the Deloitte report predicted:
-Mortgage brokers will evolve from “rate shoppers” to “advisors.”
-Major banks will continue to compete against broker business.
-Superbroker networks will continue to consolidate. In 2005, almost 70 per cent of Canadian mortgage agents were employed by one of five broker houses. Since mid-tier networks have emerged, the figure tops out at 85 per cent.
-Niche lenders with specialized product offering will emerge through the broker channel, increasing options for new immigrants, the self-employed and individuals with credit challenges.

Say it like it is!

2010-10-20T12:32:00.001-06:00

Here’s a very cool video from a BC broker. He is so right! I couldn’t say it better myself!

The rate game

2010-10-20T12:03:00.003-06:00

I’ve said it before and I’ll say it again. Rate isn’t everything!
I’d like to take a moment to discuss BMO’s “rate special”. It’s a five year fixed mortgage at 3.49%. The rate sounds great, right? Almost unbelievable! My friends, there are a few catches to this one according to Canadian Mortgage Trends. I’ll discuss them below.
1. You are not able to break this mortgage to move to a new lending institution. This is HUGE! If you are not free to break this mortgage and move on to someone else in 2, 3 4 years (or whenever you just plain feel like it) where does that leave you? Do you think you’ll have any negotiating power? I think not.
2. Pre-payments are limited to 10%. Folks, this is the lowest in the industry. I don’t think I have a single lender that has pre-payment privileges that are this bad. Most lending institutions have pre-payment privileges of 15%-25%.
3. Your amortization is capped at 25 years. While this is fine and dandy for some, it’s not for everyone. A lot of first time buyers want a 35 year amortization to keep their payments low for the first few years. The nice thing about a 35 year amortization is that you can pay extra every month (with your lender’s nifty pre-payment options) and can actually make your mortgage payment as if you had a 25 year amortization. The best part? If you have a rough couple months (job loss, have a baby etc) you can always revert back to the 35 year payment. Options are nice to have!
4. 3.49% is not really that great! Let’s compare a mortgage of $200,000 using BMO’s rate of 3.49% and my lender’s five year normal, great rate (no silly pre-payment caps, amortization caps or choiceless contracts) at 3.59%. With BMO your payment would be $997.49, with my lender $1,008.06. That’s a whopping difference of $10.57 a month! Granted, over 5 years that’s $634.20 but you have options, choice and an overall better mortgage in my humble opinion.
What annoys me the most is that the Bank of Montreal just doesn’t provide any of the nitty gritty details on their website!
I am constantly dealing with individuals that only shop by rate. This is a perfect example of why that is a bad idea and why there are several other factors to consider!

No news is good news...

2010-10-19T15:56:00.003-06:00

In an announcement earlier today, the Bank of Canada left their overnight target rate unchanged. What does this mean? The prime lending rate will stay as is, at 3.00%. For anyone with a variable rate mortgage this is welcome news as the last three rate announcements have all included rate increases. If you were to take out a variable rate mortgage today on a five year term you'd receive a discount of .70% off the prime rate. This works out to a rate of 2.30%. Not too shabby if you ask me!
If you have any questions about variable rate mortgage options please don't hesitate to contact me!

For more information on today's rate announcement, please visit the Bank of Canada's website.

TD's Collateral Charge

2010-10-18T12:33:00.003-06:00

Here is an article I received this morning from Axiom Mortgage Partners regarding a change TD has recently made to the way they register mortgages. This article discusses the pros and cons of the new registration policy:

This week TD is changing the way they register their mortgage charge. As of October 18, 2010 mortgages will now be registered as a collateral charge. TD believes that this will be a positive change for their consumers. I am not certain that I agree. Lets take a quick look at the facts and the pros and cons.

Facts:
Mortgage will be registered as a collateral charge.
Mortgage can be registered in an amount equal to 125% of the value of the property.
Pros
According to TD's information releases:
The flexibility to register the collateral charge for a higher amount than the current loan agreement so that if a customer wants to increase their mortgage in the future they can reuse the existing collateral charge and not incur any new registration fees
The flexibility to switch to another lending product by using the existing collateral charge without incurring registration fees.

Cons:
Well, come maturity a borrower will no longer have the option to "switch" their mortgage to another lender. The charge will have to be discharged in full and a new mortgage placed. This means it makes it much more difficult and costly to move a mortgage at renewal.
Depending on the wording of the collateral agreement, all of a customer's credit facilities at TD may be covered by the charge. This could mean that if a borrower wanted to discharge the mortgage they may also have to pay out other TD credit items such as Visas etc.
Talk to your TD rep to get their take on what this means to you and your clients.
-Axiom Mortgage Partners

MCAP re-launches it's Home Account!

2010-10-13T14:27:00.003-06:00

A couple years ago MCAP pulled the plug on its popular line of credit mortgage during the global financial crisis. I think it’s a positive sign of the times that they have re-launched this product and I’m sure it will be a product very popular with mortgage brokers.
Here are some of the details:
-The rate on this mortgage will be prime +1.00%
-The product will be fully open
-5, 10 or 25 year interest only periods available
-Minimum beacon score 650
If you have been considering tapping into some of the equity in your home please contact me and I’ll give you an overview of the refinance options available today!

Changes to TD Mortgages on October 18th

2010-10-12T12:09:00.001-06:00

The Globe and Mail has published an article regarding some changes TD has made to new mortgages registered after October 18th 2010. I received a bulletin last week about the change TD Bank is making to the way they register a mortgage on the title to a property. Mortgages will now be registered as a collateral charge on title. The benefit to the consumer is that TD can now register a charge up to 125% of the home’s current value. This doesn’t mean you can access the 125%, it means that if property values go up and you want to get a line of credit or increased mortgage on your home it’s basically ready to go! The bank will do a few checks and balances before they approve it but the real savings for the consumer will be that they will not have to see a lawyer or re-apply for an increased mortgage.
The downside? This makes it much harder for you to switch banks when your term is up. Having less choice isn’t good for anyone! The article states, “unlike traditional mortgages, the collateral mortgages are difficult to transfer from one lender to another, because they must be paid in full to be cancelled. That means if someone wants to change lenders, they need to renegotiate from scratch”.
This recent move by TD has angered mortgage brokers across Canada according to the Globe and Mail article.

Read the full Globe and Mail article here:
TD overhauls mortgage program as housing market slows

Brokers and Bankers

2010-10-08T14:34:00.001-06:00

Well, it’s Friday before the Thanksgiving weekend and what better time to have a little rant! I just came across this article which covers a topic that is near and dear to my heart: Bankers calling themselves Mortgage Brokers. To be fair, Bankers aren’t the only ones to blame. I’ve heard many Realtors and consumers talk about their “broker” when in fact they are speaking about a bank employee. Some bank employees specialize in mortgages only and work from home and on the road. Just because they don’t work in a bank branch doesn’t make them a mortgage broker! They are simply road reps for the bank.
I think it is very important to label things correctly. Mortgage Brokers and Bankers are two very different things. Bankers are employees of the institution they work for. They can only sell mortgage products from their particular institution and they are not licensed by a regulating body. Mortgage Brokers and Associates, on the other hand, actually act as a broker in a transaction. They work with more than one institution and are able to set up mortgages at a variety of institutions. Mortgage Brokers and Associates are regulated by provincial licensing bodies and the only individuals that are allowed to “broker” a mortgage are individuals that are licensed! In Alberta, the licensing body that regulates Realtors, Mortgage Brokers and Associates as well as property Appraisers is RECA.
Please read the article below for more information! (This article is written with a BC perspective but a lot of the information pertains to Alberta as well).

http://www.straight.com/article-351517/vancouver/whats-difference-between-mortgage-broker-and-road-rep