With weaker outlooks for Europe and the U.S., the Bank of Canada announced earlier today that it is keeping its key policy rate steady, exactly where it's been since September 2010, which makes this the longest recorded rate pause.
In its statement the Bank noted that "the recession in Europe is now expected to be deeper and longer than the Bank had anticipated", and that the "U.S. recovery will proceed at a more modest pace going forward." The Bank noted that while the Canadian economy "had more momentum than anticipated in the second half of 2011, the pace of growth going forward is expected to be more modest than previously envisaged, largely due to the external environment."
The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will not see their payments change and will continue to enjoy historically low rates. New variable rate mortgages are available to qualified borrowers at Prime minus 0.10%.
The Bank's next rate decision is scheduled for March 8.
And while not related to the prime rate, it is worth noting that fixed mortgage rates are near all-time lows, with 4 and 5 year mortgages available at rates that are close to variable-rate pricing.
If you would like to review your options, please let me know.
Rick Moran, AMP #M08001997
Showing posts with label rick moran. Show all posts
Showing posts with label rick moran. Show all posts
Wednesday, January 18, 2012
Tuesday, January 10, 2012
Understanding your credit report and credit score – Part 1
What many prospective borrowers don't realize is that the pricing of mortgages and other loans is based in part on their credit-worthiness. Consumers need to be aware of how their credit is evaluated by lenders, and how they can work to avoid so-called "bruised credit" – people with a lower credit score can find themselves paying a higher interest rate, or even denied access to certain types of loans.
A credit report is a detailed history of how consistently you meet your financial obligations, and provides a picture of your financial health based on your past behaviour. A credit score is a three-digit number, usually between 300 and 900, representing your overall credit-worthiness, based on personal information from your credit report and other sources.
Both your credit report and score are important. When deciding whether or not to grant a mortgage loan, lenders refer to an applicant's credit report and score, along with a range of other factors such as income, employment history, and size of down payment.
The higher your score the more likely you are to be approved for a mortgage and receive favourable rates because the lender considers you to be a better credit risk. Several factors are used by the two main credit agencies in Canada (Equifax Canada and TransUnion Canada) to calculate credit scores:
Debt payment history.
Amounts owed compared to your current credit limits with lenders.
How often you seek new credit.
Length of time you have had credit accounts.
Type of credit, such as car loans, lines of credit, credit cards.
Rick Moran, AMP #M08001997
A credit report is a detailed history of how consistently you meet your financial obligations, and provides a picture of your financial health based on your past behaviour. A credit score is a three-digit number, usually between 300 and 900, representing your overall credit-worthiness, based on personal information from your credit report and other sources.
Both your credit report and score are important. When deciding whether or not to grant a mortgage loan, lenders refer to an applicant's credit report and score, along with a range of other factors such as income, employment history, and size of down payment.
The higher your score the more likely you are to be approved for a mortgage and receive favourable rates because the lender considers you to be a better credit risk. Several factors are used by the two main credit agencies in Canada (Equifax Canada and TransUnion Canada) to calculate credit scores:
Debt payment history.
Amounts owed compared to your current credit limits with lenders.
How often you seek new credit.
Length of time you have had credit accounts.
Type of credit, such as car loans, lines of credit, credit cards.
Rick Moran, AMP #M08001997
MORTGAGE PLANNING 2012
Consider a mortgage check up in the new year
As we begin 2012, consider getting a mortgage check up in the new year to make sure you have the best mortgage strategy for meeting your financial goals.
A personalized mortgage check up from an Invis mortgage professional is a simple way to ensure:
that your repayment approach suits you, for example with payments structured to maximize mortgage principal reduction,
any consumer debt you may have (such as credit card balances) is transferred to a lower interest rate,
you have access to the lowest-cost funds for renovations, education or other major expenditures.
Contact us to learn more about your current mortgage options and how to make your home equity work for you.
Rick Moran, AMP #M08001997
As we begin 2012, consider getting a mortgage check up in the new year to make sure you have the best mortgage strategy for meeting your financial goals.
A personalized mortgage check up from an Invis mortgage professional is a simple way to ensure:
that your repayment approach suits you, for example with payments structured to maximize mortgage principal reduction,
any consumer debt you may have (such as credit card balances) is transferred to a lower interest rate,
you have access to the lowest-cost funds for renovations, education or other major expenditures.
Contact us to learn more about your current mortgage options and how to make your home equity work for you.
Rick Moran, AMP #M08001997
Tuesday, December 20, 2011
Experts are calling for a bit of a mixed bag in Canadian real estate for 2012
Housing market prognosticators say next year will be marked by bursts of growth in certain hot regional markets throughout the country combined with a cooling trend in other areas, namely that of robust markets such as Toronto.
Look for mixed market signals in Canadian real estate as a market theme in 2012 as cities like Halifax and Edmonton and Calgary will begin to feel a marked increase in demand for real estate purchases, with average price increases beginning late in the year, according to says Vancouver real estate consultant Don Campbell. Toronto’s hot market will start to ease off next year, although its condo real estate market will remain stable.
“Sophisticated homeowners and investors will have to dig a little deeper, especially in 2012 and 2013, to find out how their region is performing because Canada is really going to be a tale of regions over the next few years,” says Campbell, a real estate investor and author. “Where one region is booming, the next may be underperforming.”
Expect price moderation in Toronto in the neighbourhood of five to 10 per cent, says Todd Hirsch, a senior economist with ATB Financial in Calgary. “There could be a little more worry of a small bubble (bursting) in Toronto,” says Hirsch, “because the Ontario economy in 2012 will likely cool off a bit, not tremendously, though. You won’t see a recession.”If you’re thinking the same for Vancouver, think again, advises Hirsch. Given that Vancouver is the destination of choice for Asian investors, prices there will remain far higher than what they are in Calgary and Toronto. This will likely continue into 2012, predicts Hirsch, who expects the Chinese economy will moderate next year although not enough to prevent its citizens from wanting to invest in Canada’s west coast real estate market.
But the markets in Toronto and especially Vancouver, which comprise approximately 40 per cent of Canadian real estate, should be eyed carefully by home buyers or investors. According to Campbell, time lines should run short at 12 to 18 months or long at five years or more as statistics show signs of market turmoil in the medium term (19 months to four years) as interest rates begin to edge up, inventory outstrips population demand. That’s when speculators will try to dump properties and market confidence will be lower. In Calgary and Edmonton expect stable prices, says Hirsch.
Saskatchewan is where you’ll find the best real estate deals in the country with the average house price in Saskatoon running at $320,000. That province also has the lowest unemployment figures in Canada with unemployment pegged at three per cent in Regina.
Halifax and St. John’s are stand alone in Atlantic Canada as those two cities experience an unrivalled economic boom right now. House prices in those cities could actually gain a little in 2012.
As for the rest of Atlantic Canada, notes Hirsch, much of it is a depressed economy in which its rural areas are being hollowed out as residents leave the countryside for jobs in urban areas. Quebec City’s economy is faring not too badly these days as its house prices are undervalued at about one third below the national average.
Still, growth in Quebec will be a bit sluggish in 2012 with no real strong real estate gains. While its economy will be sluggish, keep in mind the province’s housing prices are not as overvalued as in Toronto so you won’t see as much deflationary pressure as in Toronto. While the province is not looking at a recession in 2012, the year will be economically softer.
Strong real estate markets will be in Canadian regions where job growth continues, low unemployment rates continue to drop and where there’s a migration of people with jobs (as opposed to retirees), says Campbell, who cites Halifax, Kitchener/Waterloo/Cambridge, Hamilton, Saskatoon, Edmonton, Calgary, St. John, Dawson Creek and Surrey as having the most stable markets.“Many Canadians will be fooled into thinking that their home value is either increasing or decreasing because of reports that are released discussing the ‘Average Price in Canada,’ “ he says, “producing either a false sense of confidence or a false sense of doom, depending on the report of the month.”
According to CREA, the national housing market is edging closer to being a seller’s market.“The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,” said Gary Morse, CREA’s president. “That said, some housing markets are picking up, while others are holding steady or consolidating.”
A quarterly economic forecast by TD Economics economist Francis Fong indicates that the low interest rate environment coupled with slowing jobs and income growth, especially in the first six months of 2012, will hold back resurgence in housing activity. Expect a slight pullback in homes sales and prices to the tune of one to two per cent. “Looking ahead, 2012 will likely be a much more subdued year for the housing market,” wrote Fong in her report released this week.
What are your predictions for 2012? Do you think your market will stay the course, grow or drop off? What sense are you getting from clients? Tell us what you’re thinking.
Rick Moran, AMP, OMB # M08001997
Look for mixed market signals in Canadian real estate as a market theme in 2012 as cities like Halifax and Edmonton and Calgary will begin to feel a marked increase in demand for real estate purchases, with average price increases beginning late in the year, according to says Vancouver real estate consultant Don Campbell. Toronto’s hot market will start to ease off next year, although its condo real estate market will remain stable.
“Sophisticated homeowners and investors will have to dig a little deeper, especially in 2012 and 2013, to find out how their region is performing because Canada is really going to be a tale of regions over the next few years,” says Campbell, a real estate investor and author. “Where one region is booming, the next may be underperforming.”
Expect price moderation in Toronto in the neighbourhood of five to 10 per cent, says Todd Hirsch, a senior economist with ATB Financial in Calgary. “There could be a little more worry of a small bubble (bursting) in Toronto,” says Hirsch, “because the Ontario economy in 2012 will likely cool off a bit, not tremendously, though. You won’t see a recession.”If you’re thinking the same for Vancouver, think again, advises Hirsch. Given that Vancouver is the destination of choice for Asian investors, prices there will remain far higher than what they are in Calgary and Toronto. This will likely continue into 2012, predicts Hirsch, who expects the Chinese economy will moderate next year although not enough to prevent its citizens from wanting to invest in Canada’s west coast real estate market.
But the markets in Toronto and especially Vancouver, which comprise approximately 40 per cent of Canadian real estate, should be eyed carefully by home buyers or investors. According to Campbell, time lines should run short at 12 to 18 months or long at five years or more as statistics show signs of market turmoil in the medium term (19 months to four years) as interest rates begin to edge up, inventory outstrips population demand. That’s when speculators will try to dump properties and market confidence will be lower. In Calgary and Edmonton expect stable prices, says Hirsch.
Saskatchewan is where you’ll find the best real estate deals in the country with the average house price in Saskatoon running at $320,000. That province also has the lowest unemployment figures in Canada with unemployment pegged at three per cent in Regina.
Halifax and St. John’s are stand alone in Atlantic Canada as those two cities experience an unrivalled economic boom right now. House prices in those cities could actually gain a little in 2012.
As for the rest of Atlantic Canada, notes Hirsch, much of it is a depressed economy in which its rural areas are being hollowed out as residents leave the countryside for jobs in urban areas. Quebec City’s economy is faring not too badly these days as its house prices are undervalued at about one third below the national average.
Still, growth in Quebec will be a bit sluggish in 2012 with no real strong real estate gains. While its economy will be sluggish, keep in mind the province’s housing prices are not as overvalued as in Toronto so you won’t see as much deflationary pressure as in Toronto. While the province is not looking at a recession in 2012, the year will be economically softer.
Strong real estate markets will be in Canadian regions where job growth continues, low unemployment rates continue to drop and where there’s a migration of people with jobs (as opposed to retirees), says Campbell, who cites Halifax, Kitchener/Waterloo/Cambridge, Hamilton, Saskatoon, Edmonton, Calgary, St. John, Dawson Creek and Surrey as having the most stable markets.“Many Canadians will be fooled into thinking that their home value is either increasing or decreasing because of reports that are released discussing the ‘Average Price in Canada,’ “ he says, “producing either a false sense of confidence or a false sense of doom, depending on the report of the month.”
According to CREA, the national housing market is edging closer to being a seller’s market.“The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,” said Gary Morse, CREA’s president. “That said, some housing markets are picking up, while others are holding steady or consolidating.”
A quarterly economic forecast by TD Economics economist Francis Fong indicates that the low interest rate environment coupled with slowing jobs and income growth, especially in the first six months of 2012, will hold back resurgence in housing activity. Expect a slight pullback in homes sales and prices to the tune of one to two per cent. “Looking ahead, 2012 will likely be a much more subdued year for the housing market,” wrote Fong in her report released this week.
What are your predictions for 2012? Do you think your market will stay the course, grow or drop off? What sense are you getting from clients? Tell us what you’re thinking.
Rick Moran, AMP, OMB # M08001997
Wednesday, December 7, 2011
Best Interest Rates in the Market
New Interest Rates have been arranged with a new Lender that will only deal with selected Brokers.
5 year fixed rate @ 3.14% with a 45 day rate hold or, Variable Rate Mortgages at Prime less .30% (2.70%)
December 6, 2011
Rick Moran, AMP, OMB # M08001997
5 year fixed rate @ 3.14% with a 45 day rate hold or, Variable Rate Mortgages at Prime less .30% (2.70%)
December 6, 2011
Rick Moran, AMP, OMB # M08001997
Monday, November 28, 2011
First time buyers: Make the most of the Home Buyers Plan
If you're a first time homebuyer, you can use the federal Home Buyers Plan (HBP) to take out funds from your registered retirement savings plan (RRSP) to use towards the purchase of a qualifying home.
The Plan allows first time buyers to withdraw up to $25,000 from their RRSP (or, up to a maximum of $50,000 per couple) tax free, and have 15 years over which to pay the funds back into their RRSP.
While 44 percent of first-time homebuyers are using the HBP to make a down payment, 46 percent of recent first-time buyers have no RRSP savings to use toward a down payment, according to mortgage insurer Genworth Financial Canada. If you do not have RRSPs, we can show you how to establish an RRSP with borrowed funds, and use the resulting tax refund for a down payment or a lump-sum mortgage payment.
If you or someone you know would like to learn more about the HBP or about saving for a down payment, talk to us. Also, www.Moneytools.ca from the Financial Consumer Agency of Canada has useful information on making a budget and sticking to it.
The Plan allows first time buyers to withdraw up to $25,000 from their RRSP (or, up to a maximum of $50,000 per couple) tax free, and have 15 years over which to pay the funds back into their RRSP.
While 44 percent of first-time homebuyers are using the HBP to make a down payment, 46 percent of recent first-time buyers have no RRSP savings to use toward a down payment, according to mortgage insurer Genworth Financial Canada. If you do not have RRSPs, we can show you how to establish an RRSP with borrowed funds, and use the resulting tax refund for a down payment or a lump-sum mortgage payment.
If you or someone you know would like to learn more about the HBP or about saving for a down payment, talk to us. Also, www.Moneytools.ca from the Financial Consumer Agency of Canada has useful information on making a budget and sticking to it.
Rick Moran, AMP, OMB # M08001997
Tuesday, November 22, 2011
Five Reasons to Always Say Thank You
Never, ever, underestimate the value of saying thank- you. By the same token, don’t underestimate the potentially negative influences of keeping appreciation to yourself- especially in business.
Clients always have a choice. While your best bet to keeping clients happy and rewarding them for having chosen you is by delivering top-notch service and exceeding their expectations, acknowledging the fact that they chose you- and that you appreciate it is not only polite, it is crucial to generating business in the future.
It’s Not Just Business, it’s Personal
In the relationship-based business, there are a lot of cross-over elements from personal relationships; nuance and emotional connection are either the adhesive that binds a relationship together over the long term, or can be the source of cracks to threaten the foundation.
While your relationship is rooted in business, the emotional content resides in a very different place. It is that connection that resonates with clients; it is from this connection that trust grows, and context is given to those important intangibles like integrity and accountability that people need to move forward in client centric business.
Simply, if you don’t thank clients, you run the risk of hurting their feelings, or having them feel unappreciated. Clients who don’t feel appreciated are much less likely to refer friends or family, or to return to do repeat business- especially if they feel that their business would be more appreciated by someone else.
It Really is the Thought that Counts
Saying thank- you to a client doesn’t have to be a grand gesture.
If you are considering showing your appreciation with a gift, even something small, if presented with genuine appreciation goes a long way.
Often all that is needed is a small token, a coffee card, a book or something similar. Or, to really emphasize the relationship aspect of your business, get the client a gift card for their favourite store, or for one of their favourite activities, to show that you’ve been listening.
The key here is not to fuss over what to get; it is all about delivery and sincerity of the message.
The Writing is on the Wall
In this electronic age, we favour speed, access and immediacy when communicating.
When saying thank -you to a client, consider using the time-honoured, often –overlooked handwritten note on crisp, nice stationary or a card.
Sitting down and putting pen to paper accomplishes a number of things: It personalizes the message. It sets up a direct sense of contact between the sender and recipient. It also supports the sincerity of the appreciation, because it suggests that you took extra time and preparation to deliver this message.
A Gesture in Moment; an Eye to the Future
There are logical connectors, and there are emotional connectors. Logical connectors will entice clients in the moment; emotional connectors are what help a client make a decision to stay with you over the long term. It’s all about feeding those connectors.
Saying thank- you not only supports the relationship in the moment, it gives base and reason for referrals in the future.
Creating an atmosphere of good will through gratitude facilitates the ask for referrals as well. It almost seems a logical next step, when you’ve got them feeling all warm and fuzzy.
Timing is Everything
We’ve established that the how is important when delivering a thank you- but as important is the when.
You have a brief window in which to extend a thank-you. If you miss the opportunity, the impact of the message and of the sincerity of the gratitude diminishes.
Make sure you send your gift or note immediately following a transaction or other event. This keeps feelings of gratitude fresh in everyone’s mind.
No matter how you say thank-you, make sure it is out loud, and make sure it is often. As Gladys Stern said, “Silent gratitude isn't much use to anyone.”
Rick Moran, AMP, OMB # M08001997
There is no Place like a Second Home for Investors
As wealthy foreign buyers snap up more and more luxury homes in Canada, high-net-worth Canadians are similarly showing strong interest in purchasing multimillion-dollar residences abroad. But while their sights were once set on a French château, perhaps, or a Tuscan villa, the trend now is towards buying in the United States.
“We've really seen a fall-off in buying in Europe because of all the confusion over the past 12 months or so,” says Don Campbell, president of Abbotsford, B.C.-based Cutting Edge Research Inc. and the author of five best-selling books on real estate investing.
With so much volatility in Europe, especially in Spain, Portugal and Italy, “people don't know in which direction the market is heading, or the direction of the potential tax implications,” he says. France has just added a new tax on foreign property owners, and the market in Dubai “is getting hammered,” he explains.
Currency fluctuations can cause real estate values to plummet in real terms, while economic woes often leave European governments with little choice but to raise taxes on properties belonging to the super rich.
As a result, says Mr. Campbell, there's a lot of confusion about where high-net-worth individuals should buy that second property. Hence the popularity of buying in the U.S., where as Mr. Campbell says “you know what you're getting”.
Other destinations of choice right now are stable tropical nations, such as Costa Rica and Panama. But, he says, “No.1 is the U.S. There's no question about that.”
The financial incentives for buying luxury residences south of the border are obvious. “They're at a historic low in terms of pricing,” said Chris Potter, a partner in the Toronto PricewaterhouseCoopers real estate practice.
Lawyer David Altro, author of Owning U.S. Property: The Canadian Way, also finds high-net-worth Canadians are increasingly attracted to real estate prospects south of the border. He says his clients in the eastern part of the country tend to buy in south Florida, while those in the West are eyeing properties in exclusive California cities such as Palm Springs, Desert Palms and Rancho Mirage, or in Hawaii.
The main reasoning behind such preferences is ease of access. Direct and relatively short flights mean less stress and hassle in travelling back and forth between Canadian and U.S. homes.
“They are also liking those areas because they have health care there, too,” he says. “But the bottom line is, we like to go south in the winter to get out of the Canadian weather and play golf and go to the beach. So no matter what the U.S. real estate market is like, it's always going to be busy.”
Mr. Altro says many boomers and high-net-worth Canadians are taking up permanent residence in the U.S. With a much lighter tax regime “on a regular annual income basis,” he points out, “we have a steady stream of high-net-worth Canadians who are moving to the States. I have a client in Vancouver, worth about $50-million, and all that invested money in Canada is being taxed at such a high rate. Move to the U.S. and it's like they have a new annual revenue.”
Hunter Milborne, a partner at Sotheby's International Real Estate, explains why buying a property needs to be planned correctly. If a Canadian owns a property personally, “they have a fairly onerous estate tax [on inheritances], whereas if you own something corporately or through a trust, then that's not the case.”
For Mr. Campbell, another issue implicit in owning foreign property is having sound insurance advice. “Being such a litigious country, you better have an incredibly good insurance agent for liability, fire and all the things you need to protect yourself for down there,” he says.
“If you're buying into a gated community or a high-end condo, check to make sure how many of those properties are actually in use, as opposed to being in arrears, foreclosure or owned by a bank,” he says.
“Because the community still needs money to run ... a lot of people who buy into those semi-deserted gated communities because it's relatively inexpensive, find that their fees and operating costs can start to really go through the roof.”
There are, however, many Canadian multimillionaires opting to simply stay put, keeping the Canadian market in luxury real estate buoyant.
“The real favourite right now is keeping money in your hands and in your own country,” says Mr. Campbell, “especially with the global confusion that's going on, and economic and political confusion in the U.S.”
Rick Moran, AMP, OMB # M08001997
“We've really seen a fall-off in buying in Europe because of all the confusion over the past 12 months or so,” says Don Campbell, president of Abbotsford, B.C.-based Cutting Edge Research Inc. and the author of five best-selling books on real estate investing.
With so much volatility in Europe, especially in Spain, Portugal and Italy, “people don't know in which direction the market is heading, or the direction of the potential tax implications,” he says. France has just added a new tax on foreign property owners, and the market in Dubai “is getting hammered,” he explains.
Currency fluctuations can cause real estate values to plummet in real terms, while economic woes often leave European governments with little choice but to raise taxes on properties belonging to the super rich.
As a result, says Mr. Campbell, there's a lot of confusion about where high-net-worth individuals should buy that second property. Hence the popularity of buying in the U.S., where as Mr. Campbell says “you know what you're getting”.
Other destinations of choice right now are stable tropical nations, such as Costa Rica and Panama. But, he says, “No.1 is the U.S. There's no question about that.”
The financial incentives for buying luxury residences south of the border are obvious. “They're at a historic low in terms of pricing,” said Chris Potter, a partner in the Toronto PricewaterhouseCoopers real estate practice.
Lawyer David Altro, author of Owning U.S. Property: The Canadian Way, also finds high-net-worth Canadians are increasingly attracted to real estate prospects south of the border. He says his clients in the eastern part of the country tend to buy in south Florida, while those in the West are eyeing properties in exclusive California cities such as Palm Springs, Desert Palms and Rancho Mirage, or in Hawaii.
The main reasoning behind such preferences is ease of access. Direct and relatively short flights mean less stress and hassle in travelling back and forth between Canadian and U.S. homes.
“They are also liking those areas because they have health care there, too,” he says. “But the bottom line is, we like to go south in the winter to get out of the Canadian weather and play golf and go to the beach. So no matter what the U.S. real estate market is like, it's always going to be busy.”
Mr. Altro says many boomers and high-net-worth Canadians are taking up permanent residence in the U.S. With a much lighter tax regime “on a regular annual income basis,” he points out, “we have a steady stream of high-net-worth Canadians who are moving to the States. I have a client in Vancouver, worth about $50-million, and all that invested money in Canada is being taxed at such a high rate. Move to the U.S. and it's like they have a new annual revenue.”
Hunter Milborne, a partner at Sotheby's International Real Estate, explains why buying a property needs to be planned correctly. If a Canadian owns a property personally, “they have a fairly onerous estate tax [on inheritances], whereas if you own something corporately or through a trust, then that's not the case.”
For Mr. Campbell, another issue implicit in owning foreign property is having sound insurance advice. “Being such a litigious country, you better have an incredibly good insurance agent for liability, fire and all the things you need to protect yourself for down there,” he says.
“If you're buying into a gated community or a high-end condo, check to make sure how many of those properties are actually in use, as opposed to being in arrears, foreclosure or owned by a bank,” he says.
“Because the community still needs money to run ... a lot of people who buy into those semi-deserted gated communities because it's relatively inexpensive, find that their fees and operating costs can start to really go through the roof.”
There are, however, many Canadian multimillionaires opting to simply stay put, keeping the Canadian market in luxury real estate buoyant.
“The real favourite right now is keeping money in your hands and in your own country,” says Mr. Campbell, “especially with the global confusion that's going on, and economic and political confusion in the U.S.”
Rick Moran, AMP, OMB # M08001997
Smart Home Renovations
Why not do a home renovation project that allows you to live better now and make your home more saleable later? Think cost-effective improvements that enhance curb appeal or boost energy efficiency.
The Appraisal Institute of Canada compared typical costs for renovations versus the impact on a home's selling price to come up with a "payback range" for common projects.
Bathroom reno: 75% to 100%
Kitchen reno: 75% to 100%
Installing a deck: 25% to 75%
Exterior siding: 50% to 75%
Flooring upgrade: 50% to 75%
Basement reno: 50% to 75%
Talk to me today – I can introduce you to your renovation financing options, to get you started on making the most of your home.
Rick Moran, AMP, OMB # M08001997
The Appraisal Institute of Canada compared typical costs for renovations versus the impact on a home's selling price to come up with a "payback range" for common projects.
Bathroom reno: 75% to 100%
Kitchen reno: 75% to 100%
Installing a deck: 25% to 75%
Exterior siding: 50% to 75%
Flooring upgrade: 50% to 75%
Basement reno: 50% to 75%
Talk to me today – I can introduce you to your renovation financing options, to get you started on making the most of your home.
Rick Moran, AMP, OMB # M08001997
Saturday, November 19, 2011
Real Estate Industry Myths Debunked
As human beings, we often form ill-conceived notions about people based on our education, our upbringing, our experience. These notions, many of which on the surface appear to pose little threat, eventually stick to the signposts of our society becoming a sort of common knowledge.
Think about the used-car salesperson. What image did you conjure? Was it favourable? Likely not. The same applies to the real estate profession.
For a multitude of reasons, there are a number of ill-conceived ideas shared by the public about the industry and those in it and that’s what we plan to examine today. “We’re rank slightly below lawyers and slightly above used car salesman,” says Laurin Jeffrey, a sales rep at Century 21 Regal Realty in Toronto. “A lot of people fit us in there.”
The reason, he surmises, has to do with the fact that clients think they are paying Realtor®s too much for the service they provide. There’s a saying in journalism that to get to the bottom of a story, you should follow the money. That saying could well be applied to our first misconception about Realtor®s. It’s the one that prescribes to the notion that real estate agents make a great deal of money doing very little for their clients.
“What they don’t understand is we’re responsible for everything,” Jeffrey points out. “I pay taxes, do my advertising, marketing, printing of business cards and signs, insurance and extra insurance to drive people around. I have no medical benefits. There’s a lot of risk that goes into that.”
In addition, the industry has had a history of “less-than-ethical” characters, says Jeffrey, an image that it is starting to shed thanks to higher fees and tougher professional regulations. “It’s a lot more cutthroat now,” says Jeffrey. “Before the Internet, the only way you could get information on a property was through that slimy guy down the street. They knew that and they had you.”
Steven Fudge laughs at the prospect that people think a career in real estate is easy money. Even in a hot market such as the one he currently works in in Toronto, his clients are typically bidding on six to 12 properties before they can secure one. That’s a lot of showings, home inspections, writing of offers in addition to a lot of heartbreak and disappointment to deal with.
A sales rep for Bosley Real Estate Ltd., Fudge recently received a one-year anniversary gift from clients. When he looked somewhat perplexed by the gift, his clients sweetly reminded him that, yes, it’s been a full 12 months that they’ve been on the hunt for a home.
In addition to the behind-the-scenes amounts of work Realtor®s put in, there is also the little-publicized fact that Realtor®s have to work while everyone else is having fun, says Fudge.
Evenings, weekends and holidays are common as is working until 8 or 9 each evening. Fitting in a 70-hour work week is the norm for Fudge. By the same token, the career makes for great flexibility so Fudge allows time for daily work-outs with a trainer and late lunches with good friends. Still, the immediacy of technology in combination with a hot market means he must fly when called. “Often I have to drop what I’m doing so that by dinnertime, it doesn’t matter if I’m hosting a party, attending a recital...whatever,” says Fudge. “You do not have complete control of your time if you’re committed to being in complete control over your clients. I have missed my own birthday party.”
The perception that Realtor®s don’t have to work hard for their money is what has fuelled the For-Sale-By-Owner industry, but as Mississauga sale rep Marjorie Canales points out, that myth is seeing its own backlash. “That’s why most end up listing with traditional real estate,” says Canales. “They think they will put up a sign and maybe put up a little website for the property and so many things can go wrong. That’s why 90 per cent or more of homes are sold through a Realtor®.”
Another related misconception about real estate is the belief that Realtor®s have oodles of freedom and spare time. “That is actually not the case,” she says. “You get out, what you put in and it’s very unstructured so you have to be disciplined with your time. It’s easy to derail and slack off. I wouldn’t call it easy money at all.”
Furthermore, adds Canales, Realtor®s are one of the few professions that work on contingency and aren’t paid a dime till well after the property sells. “We’re taking a bigger risk from the get-go. Immediately, I have to go into my pocket and pay for marketing and if the house doesn’t sell, I don’t get paid.’
While OREA president Barb Sukkau agrees that the profession is the target of unfair criticism, she feels more can be done to put public thought back on the right track. “We don’t do a good enough job at telling consumers how valuable our service is,” Sukkau says. “There are a lot of misconceptions about Realtor®s and it comes from consumers that don’t appreciate the level of expertise we have and the knowledge we have.”
“People don’t realize we are bound to be ethical honest and we have certain obligations under the act that we have to follow and there are certain repercussions if we don’t.”
In addition, there is the continuing education that agents are required to complete in order to keep their license current.
Real estate associations large and small are embarking on campaigns to help deliver the message to media and consumers about the value services Realtor®s provide, she says, referring to the www.howRealtor®shelp.ca website.
In St. John’s, Bill Dilny often hears rumblings from people who believe that house prices are set by Realtor®s because it’s to their advantage to sell higher-priced homes. While Dilny doesn’t dispute that it is beneficial to some extent, the misconception that agents set prices is laughable. “But you don’t increase the price by 20 per cent because you’ll make more money,” says the Remax agent. “That’s ludicrous. It’s the market that drives prices.”
One fact about Realtor®s that Edmonton Realtor® Craig Pilgrim would like more people to know about is their high level of community mindedness. Despite mythical assertions that the profession embraces greed in its formula for making easy money, the high level of community involvement and payback would suggest there’s something more altruistic at play than simply mercenary means. “It is commonplace for Realtor®s to attend pretty much every social good function and fundraising event and to spend and donate both in terms of money, in kind donations, work and effort,” Pilgrim says. “Realtor®s are really committed to their communities and it does show.”
The Realtor®s’ Community Foundation in Edmonton, of which Pilgrim volunteers his time, is celebrating its 25th anniversary this year. Since its inception, the organization has returned in excess of $3-million to more than 100 Edmonton-based charities.
“The vast majority of Realtor®s just do these things -- they serve on boards and local charities and that’s typical and below the radar and that’s just done,” Pilgrim says. “I think the reason it’s so significant in our industry has to do with the flexibility in our industry. People are drawn to this profession because you’re seeing and touching so many people, their lives, their passions, their personal causes. It’s because of the connectedness of the industry.”
What myths about the profession would you like to shatter? Ever heard a real doozy? Let’s hear it.
Rick Moran, AMP, OMB # M08001997
Think about the used-car salesperson. What image did you conjure? Was it favourable? Likely not. The same applies to the real estate profession.
For a multitude of reasons, there are a number of ill-conceived ideas shared by the public about the industry and those in it and that’s what we plan to examine today. “We’re rank slightly below lawyers and slightly above used car salesman,” says Laurin Jeffrey, a sales rep at Century 21 Regal Realty in Toronto. “A lot of people fit us in there.”
The reason, he surmises, has to do with the fact that clients think they are paying Realtor®s too much for the service they provide. There’s a saying in journalism that to get to the bottom of a story, you should follow the money. That saying could well be applied to our first misconception about Realtor®s. It’s the one that prescribes to the notion that real estate agents make a great deal of money doing very little for their clients.
“What they don’t understand is we’re responsible for everything,” Jeffrey points out. “I pay taxes, do my advertising, marketing, printing of business cards and signs, insurance and extra insurance to drive people around. I have no medical benefits. There’s a lot of risk that goes into that.”
In addition, the industry has had a history of “less-than-ethical” characters, says Jeffrey, an image that it is starting to shed thanks to higher fees and tougher professional regulations. “It’s a lot more cutthroat now,” says Jeffrey. “Before the Internet, the only way you could get information on a property was through that slimy guy down the street. They knew that and they had you.”
Steven Fudge laughs at the prospect that people think a career in real estate is easy money. Even in a hot market such as the one he currently works in in Toronto, his clients are typically bidding on six to 12 properties before they can secure one. That’s a lot of showings, home inspections, writing of offers in addition to a lot of heartbreak and disappointment to deal with.
A sales rep for Bosley Real Estate Ltd., Fudge recently received a one-year anniversary gift from clients. When he looked somewhat perplexed by the gift, his clients sweetly reminded him that, yes, it’s been a full 12 months that they’ve been on the hunt for a home.
In addition to the behind-the-scenes amounts of work Realtor®s put in, there is also the little-publicized fact that Realtor®s have to work while everyone else is having fun, says Fudge.
Evenings, weekends and holidays are common as is working until 8 or 9 each evening. Fitting in a 70-hour work week is the norm for Fudge. By the same token, the career makes for great flexibility so Fudge allows time for daily work-outs with a trainer and late lunches with good friends. Still, the immediacy of technology in combination with a hot market means he must fly when called. “Often I have to drop what I’m doing so that by dinnertime, it doesn’t matter if I’m hosting a party, attending a recital...whatever,” says Fudge. “You do not have complete control of your time if you’re committed to being in complete control over your clients. I have missed my own birthday party.”
The perception that Realtor®s don’t have to work hard for their money is what has fuelled the For-Sale-By-Owner industry, but as Mississauga sale rep Marjorie Canales points out, that myth is seeing its own backlash. “That’s why most end up listing with traditional real estate,” says Canales. “They think they will put up a sign and maybe put up a little website for the property and so many things can go wrong. That’s why 90 per cent or more of homes are sold through a Realtor®.”
Another related misconception about real estate is the belief that Realtor®s have oodles of freedom and spare time. “That is actually not the case,” she says. “You get out, what you put in and it’s very unstructured so you have to be disciplined with your time. It’s easy to derail and slack off. I wouldn’t call it easy money at all.”
Furthermore, adds Canales, Realtor®s are one of the few professions that work on contingency and aren’t paid a dime till well after the property sells. “We’re taking a bigger risk from the get-go. Immediately, I have to go into my pocket and pay for marketing and if the house doesn’t sell, I don’t get paid.’
While OREA president Barb Sukkau agrees that the profession is the target of unfair criticism, she feels more can be done to put public thought back on the right track. “We don’t do a good enough job at telling consumers how valuable our service is,” Sukkau says. “There are a lot of misconceptions about Realtor®s and it comes from consumers that don’t appreciate the level of expertise we have and the knowledge we have.”
“People don’t realize we are bound to be ethical honest and we have certain obligations under the act that we have to follow and there are certain repercussions if we don’t.”
In addition, there is the continuing education that agents are required to complete in order to keep their license current.
Real estate associations large and small are embarking on campaigns to help deliver the message to media and consumers about the value services Realtor®s provide, she says, referring to the www.howRealtor®shelp.ca website.
In St. John’s, Bill Dilny often hears rumblings from people who believe that house prices are set by Realtor®s because it’s to their advantage to sell higher-priced homes. While Dilny doesn’t dispute that it is beneficial to some extent, the misconception that agents set prices is laughable. “But you don’t increase the price by 20 per cent because you’ll make more money,” says the Remax agent. “That’s ludicrous. It’s the market that drives prices.”
One fact about Realtor®s that Edmonton Realtor® Craig Pilgrim would like more people to know about is their high level of community mindedness. Despite mythical assertions that the profession embraces greed in its formula for making easy money, the high level of community involvement and payback would suggest there’s something more altruistic at play than simply mercenary means. “It is commonplace for Realtor®s to attend pretty much every social good function and fundraising event and to spend and donate both in terms of money, in kind donations, work and effort,” Pilgrim says. “Realtor®s are really committed to their communities and it does show.”
The Realtor®s’ Community Foundation in Edmonton, of which Pilgrim volunteers his time, is celebrating its 25th anniversary this year. Since its inception, the organization has returned in excess of $3-million to more than 100 Edmonton-based charities.
“The vast majority of Realtor®s just do these things -- they serve on boards and local charities and that’s typical and below the radar and that’s just done,” Pilgrim says. “I think the reason it’s so significant in our industry has to do with the flexibility in our industry. People are drawn to this profession because you’re seeing and touching so many people, their lives, their passions, their personal causes. It’s because of the connectedness of the industry.”
What myths about the profession would you like to shatter? Ever heard a real doozy? Let’s hear it.
Rick Moran, AMP, OMB # M08001997
Tuesday, November 8, 2011
Get the Most from Your Financing with a Mortgage Check Up
Have you thought about your mortgage lately? Your financial picture can change significantly over time, and having the right mortgage strategy is an important part of making sure your financial needs and goals are met.
A personalized mortgage check up is an easy, no-obligation way to:
• ensure that your repayment approach suits you, for example with payments structured to maximize mortgage principal reduction,
• ensure any consumer debt you may have (such as credit card balances) is transferred to a lower interest rate,
• ensure you have access to the lowest-cost funds for renovations, education or other major expenditures.
Common reasons for a mortgage check up:
• You are planning to have children
• You want to explore your investment options
• You or your spouse have had a change in employment
• You are looking to start or buy a business
• You would like to renovate your home
• You would like the assurance of fixing your mortgage payments
• You are trying hard to manage your payments
• You can't remember the last time you assessed your home financing strategy
It can pay to book an appointment with us to determine if you are getting the most use out of your mortgage features. Call us today.
A personalized mortgage check up is an easy, no-obligation way to:
• ensure that your repayment approach suits you, for example with payments structured to maximize mortgage principal reduction,
• ensure any consumer debt you may have (such as credit card balances) is transferred to a lower interest rate,
• ensure you have access to the lowest-cost funds for renovations, education or other major expenditures.
Common reasons for a mortgage check up:
• You are planning to have children
• You want to explore your investment options
• You or your spouse have had a change in employment
• You are looking to start or buy a business
• You would like to renovate your home
• You would like the assurance of fixing your mortgage payments
• You are trying hard to manage your payments
• You can't remember the last time you assessed your home financing strategy
It can pay to book an appointment with us to determine if you are getting the most use out of your mortgage features. Call us today.
Real Estate Sales Continue to Climb: TREB
The market in Toronto seemingly only knows one direction- up.
According new data released by TREB, sales for October climbed an impressive 17.5%, year-over-year.
“The pace of October resale home transactions remained brisk in the GTA. This bodes well for a strong finish to 2011,” said Toronto Real Estate Board President Richard Silver. “Home buyers who found it difficult to make a deal in the spring and summer due to a shortage of listings have benefitted from increased supply in the fall.”
As Steven Fudge, Sales Representative, Bosley R.E. Ltd told Propertywire.ca, although there are plenty of signs that indicate that 2011 will close out with similar, robust activity, there are elements at play that do pose the possibility of influence: “The general consensus is that the fundamentals for Toronto real estate are sound, but the erratic stock market and headline news of other world economies may be causing a reason for pause. If the market slows before the end of the year, these will be the big factors influencing a decline in sales.”
And it wasn’t just sales activity that continued to climb through October; average prices in this hotbed continue their ascent as well, up 8% year-over-year, resting in at $478,137.
And as Fudge points out, these intense conditions, while support consistent upward trends, begin to take their toll on consumers after awhile. “In the City of Toronto, sales of freehold properties will remain strong for the balance of the year, as demand continues to outstrip supply, though purchasers are displaying signs of fatigue and are weary of the bidding wars. Many are refusing to go head to head in competition, which is causing some homes to stay on the market longer than expected “
“Sellers’ market conditions remain in place in many parts of the GTA. The result has been above-average annual rates of price growth for most home types,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Thanks to low interest rates, strong price growth has not substantially changed the positive affordability picture in the City of Toronto and surrounding regions.”
Fudge sees the condo market as a possible driver towards balanced territory in Toronto: “The City of Toronto, which has a significantly larger supply of condominiums for sale, is not as robust as the freehold market segment. Unless aggressively priced, condominiums will be for sale longer before trading, which signals a more balanced market. Hopefully this indicates a soft landing, rather than a crash.”
According new data released by TREB, sales for October climbed an impressive 17.5%, year-over-year.
“The pace of October resale home transactions remained brisk in the GTA. This bodes well for a strong finish to 2011,” said Toronto Real Estate Board President Richard Silver. “Home buyers who found it difficult to make a deal in the spring and summer due to a shortage of listings have benefitted from increased supply in the fall.”
As Steven Fudge, Sales Representative, Bosley R.E. Ltd told Propertywire.ca, although there are plenty of signs that indicate that 2011 will close out with similar, robust activity, there are elements at play that do pose the possibility of influence: “The general consensus is that the fundamentals for Toronto real estate are sound, but the erratic stock market and headline news of other world economies may be causing a reason for pause. If the market slows before the end of the year, these will be the big factors influencing a decline in sales.”
And it wasn’t just sales activity that continued to climb through October; average prices in this hotbed continue their ascent as well, up 8% year-over-year, resting in at $478,137.
And as Fudge points out, these intense conditions, while support consistent upward trends, begin to take their toll on consumers after awhile. “In the City of Toronto, sales of freehold properties will remain strong for the balance of the year, as demand continues to outstrip supply, though purchasers are displaying signs of fatigue and are weary of the bidding wars. Many are refusing to go head to head in competition, which is causing some homes to stay on the market longer than expected “
“Sellers’ market conditions remain in place in many parts of the GTA. The result has been above-average annual rates of price growth for most home types,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Thanks to low interest rates, strong price growth has not substantially changed the positive affordability picture in the City of Toronto and surrounding regions.”
Fudge sees the condo market as a possible driver towards balanced territory in Toronto: “The City of Toronto, which has a significantly larger supply of condominiums for sale, is not as robust as the freehold market segment. Unless aggressively priced, condominiums will be for sale longer before trading, which signals a more balanced market. Hopefully this indicates a soft landing, rather than a crash.”
House prices and sales will remain stable through 2012, according to the latest forecast by the Canada Mortgage and Housing Corporation (CMHC)
In its fourth quarter outlook, CMHC predicts the average price will increase 1.2% from $363,900 in 2011 to $368,200 in 2012. Sales will rise from 450,100 units in 2011 to 458,500 in 2012, up 1.9%. Housing starts, however, will drop 2.2% from 191,000 in 2011 to 186,750 in 2012, according to the CMHC outlook.
Global economic concerns have resulted in growing fears about how that might impact Canada’s market, but CMHC Deputy Chief Economist Mathieu Laberge said the country’s real estate market will remain strong.
“Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration,” said Laberge. “These factors will continue to support Canada’s housing sector in 2012.”
In Vancouver and Abbotsford, where average-price growth has topped any other Canadian city, the average will gain 3.2% in 2012, on top of 5.3% gains forecasted for this year.
Unemployment there will drop from 7.9% to 7.5%, said the CMHC report. Sales activity, however, will start to tail off from the 7.3% growth in 2011 to 3.3% growth in 2012.
The market will likely continue to attract builders, with housing starts expected to rise 9.4% in 2012 and building on 5.1% gains in 2011 over 2010.
In the Greater Toronto Area, apartment starts are expected to be 37.5% higher in 2011 over 2010, totalling 18,200 stats in 2011. Those numbers won’t slow in 2012, as apartment units will gain another 1.6% to reach 18,500 in 2012.
Overall housing starts will drop 2.3% in Toronto, CMHC predicts, largely based on a 14.1% drop in single-detached starts, from 8,500 in 2011 to 7,300 in 2012.
Toronto price gains will also slow, from 4.3% gains in 2011 to 1.4% gains in 2012 to an average of $457,500.
Global economic concerns have resulted in growing fears about how that might impact Canada’s market, but CMHC Deputy Chief Economist Mathieu Laberge said the country’s real estate market will remain strong.
“Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration,” said Laberge. “These factors will continue to support Canada’s housing sector in 2012.”
In Vancouver and Abbotsford, where average-price growth has topped any other Canadian city, the average will gain 3.2% in 2012, on top of 5.3% gains forecasted for this year.
Unemployment there will drop from 7.9% to 7.5%, said the CMHC report. Sales activity, however, will start to tail off from the 7.3% growth in 2011 to 3.3% growth in 2012.
The market will likely continue to attract builders, with housing starts expected to rise 9.4% in 2012 and building on 5.1% gains in 2011 over 2010.
In the Greater Toronto Area, apartment starts are expected to be 37.5% higher in 2011 over 2010, totalling 18,200 stats in 2011. Those numbers won’t slow in 2012, as apartment units will gain another 1.6% to reach 18,500 in 2012.
Overall housing starts will drop 2.3% in Toronto, CMHC predicts, largely based on a 14.1% drop in single-detached starts, from 8,500 in 2011 to 7,300 in 2012.
Toronto price gains will also slow, from 4.3% gains in 2011 to 1.4% gains in 2012 to an average of $457,500.
Thursday, June 23, 2011
Fast-tracking your mortgage
When it comes to putting your mortgage on the fast track, a little can go a long way. Here are some strategies for saving on interest costs and shaving years off your mortgage.
Increase your payment frequency. Opt for biweekly accelerated payments – take your current monthly payment and divide it in two, then set those payments for every two weeks. You'll make 26 payments a year instead of 24, and pay off your mortgage significantly faster than you would if you were making monthly payments.
Amortize frugally. While 35-year amortization periods are fairly common, don't assume that's the best option for your situation. If you can afford the higher payments, opting for a shorter amortization period will not only get you debt-free sooner, but save you thousands of dollars in the long run.
Make lump sum payments. The portion of your monthly blended mortgage payment allocated toward interest is significantly higher in the infancy of your mortgage, and decreases gradually as you pay down the principal. This means that the sooner in the life of your mortgage you make a lump sum payment – whether it's your annual bonus, your income tax refund or just savings you've socked away throughout the year – the more dramatic its long-term effect will be.
Adjust your payments. If your term is coming up for renewal, you may be able to secure a lower monthly payment by taking advantage of current interest rates, which are still relatively low. But if you can still afford the payments you're making now, keep them the same amount – you'll be paying down more towards the principal without affecting your current cash flow. Likewise, if you get a raise, consider allocating a portion of your pay raise toward increasing your monthly payment – your monthly budget will never know the difference.
Please contact us with any queries that you might have,
Rick Moran, AMP, OMB # M08001997
Increase your payment frequency. Opt for biweekly accelerated payments – take your current monthly payment and divide it in two, then set those payments for every two weeks. You'll make 26 payments a year instead of 24, and pay off your mortgage significantly faster than you would if you were making monthly payments.
Amortize frugally. While 35-year amortization periods are fairly common, don't assume that's the best option for your situation. If you can afford the higher payments, opting for a shorter amortization period will not only get you debt-free sooner, but save you thousands of dollars in the long run.
Make lump sum payments. The portion of your monthly blended mortgage payment allocated toward interest is significantly higher in the infancy of your mortgage, and decreases gradually as you pay down the principal. This means that the sooner in the life of your mortgage you make a lump sum payment – whether it's your annual bonus, your income tax refund or just savings you've socked away throughout the year – the more dramatic its long-term effect will be.
Adjust your payments. If your term is coming up for renewal, you may be able to secure a lower monthly payment by taking advantage of current interest rates, which are still relatively low. But if you can still afford the payments you're making now, keep them the same amount – you'll be paying down more towards the principal without affecting your current cash flow. Likewise, if you get a raise, consider allocating a portion of your pay raise toward increasing your monthly payment – your monthly budget will never know the difference.
Please contact us with any queries that you might have,
Rick Moran, AMP, OMB # M08001997
Tuesday, June 7, 2011
Turn to an Independent Mortgage Professional for Maximum Choice
For Canadians looking for a mortgage, rates continue to be low by historical standards. To get a competitive rate and the financing features that fit their needs, consumers need access to a range of mortgage options.
Canadians wanting to get a new mortgage or renew / re-finance an existing mortgage can approach:
• a financial institution and select from their particular menu of mortgage options and rates
• a mortgage representative who must sell a specific line of mortgage products
-or-
• an independent mortgage broker, who can offer a full range of mortgage types and interest rate options, and who works only on his or her client's behalf.
By approaching one or two financial institutions and choosing from their in-house mortgage products, many consumers miss out on an array of mortgage choices that could suit their needs better and save them a lot of money over the long term. Comparing different mortgage types and interest rates on your own is a time consuming and rather intimidating task. And if you deal with a financial institution directly and your application is declined, you must start over from scratch with another institution.
An Invis independent mortgage professional has access to a wide range of mortgage lenders and can guide you to a mortgage that suits your individual needs, at a very competitive rate. They can work with lenders including chartered banks, credit unions, and trust companies, as well as other sources of funds such as life insurance companies and pension funds. Best of all, this objective expertise is available to you for free in most cases, because the selected lending institution pays Invis to source the mortgage business. Please feel free to contact me with any question that you may have.
Rick Moran, AMP, OMB # M08001997
Canadians wanting to get a new mortgage or renew / re-finance an existing mortgage can approach:
• a financial institution and select from their particular menu of mortgage options and rates
• a mortgage representative who must sell a specific line of mortgage products
-or-
• an independent mortgage broker, who can offer a full range of mortgage types and interest rate options, and who works only on his or her client's behalf.
By approaching one or two financial institutions and choosing from their in-house mortgage products, many consumers miss out on an array of mortgage choices that could suit their needs better and save them a lot of money over the long term. Comparing different mortgage types and interest rates on your own is a time consuming and rather intimidating task. And if you deal with a financial institution directly and your application is declined, you must start over from scratch with another institution.
An Invis independent mortgage professional has access to a wide range of mortgage lenders and can guide you to a mortgage that suits your individual needs, at a very competitive rate. They can work with lenders including chartered banks, credit unions, and trust companies, as well as other sources of funds such as life insurance companies and pension funds. Best of all, this objective expertise is available to you for free in most cases, because the selected lending institution pays Invis to source the mortgage business. Please feel free to contact me with any question that you may have.
Rick Moran, AMP, OMB # M08001997
Tuesday, May 31, 2011
Buying a home? Here are some things you need to know (Part 2)
The spring house hunt is here in markets across Canada. For those navigating the home purchase process, this week we look at additional home buying tips:
6. Borrow up to $25,000 for your down payment from your RRSP – tax-free! If you are a first-time buyer, the Homebuyers Plan (HBP) allows you to withdraw up to $25,000 from your registered retirement savings plans (RRSPs) to buy or build your home. An Invis mortgage professional can tell you more about this program.
7. Understand closing costs. When buying a home, it pays to be informed about closing costs, which can represent up to three per cent of the purchase price, including: land transfer tax, lawyer's fees, appraisal fees, title insurance and home inspection fees.
8. Know your financing options. Many lenders offer mortgages which feature a 5% down payment, or in some cases 100% financing. If you borrow more than 80 per cent of the purchase price, your mortgage must be insured, typically by the Canadian Mortgage and Housing Corporation (CMHC), Genworth Financial or Canada Guaranty.
9. Don't do it alone – explore the benefits offered by mortgage brokers. Mortgage brokers act as a one-stop shop for planning advice and the best rates. Invis mortgage professionals work with prospective homeowners across Canada to provide valuable advice before and during the home buying process.
Rick Moran, AMP, OMB # M08001997
6. Borrow up to $25,000 for your down payment from your RRSP – tax-free! If you are a first-time buyer, the Homebuyers Plan (HBP) allows you to withdraw up to $25,000 from your registered retirement savings plans (RRSPs) to buy or build your home. An Invis mortgage professional can tell you more about this program.
7. Understand closing costs. When buying a home, it pays to be informed about closing costs, which can represent up to three per cent of the purchase price, including: land transfer tax, lawyer's fees, appraisal fees, title insurance and home inspection fees.
8. Know your financing options. Many lenders offer mortgages which feature a 5% down payment, or in some cases 100% financing. If you borrow more than 80 per cent of the purchase price, your mortgage must be insured, typically by the Canadian Mortgage and Housing Corporation (CMHC), Genworth Financial or Canada Guaranty.
9. Don't do it alone – explore the benefits offered by mortgage brokers. Mortgage brokers act as a one-stop shop for planning advice and the best rates. Invis mortgage professionals work with prospective homeowners across Canada to provide valuable advice before and during the home buying process.
Rick Moran, AMP, OMB # M08001997
Thursday, May 26, 2011
Buying a home? Here are some things you need to know (Part I)
For most Canadians, buying a home is the single largest financial transaction they will ever encounter and it's critical that prospective homebuyers prepare themselves before they start their search.
This week we look at the some tips for those navigating the home buying process:
1. Know what you can afford. A mortgage pre-approval offers peace of mind by helping you determine the price range of homes you can shop for and the maximum mortgage you can afford. Remember that final mortgage approval is also based on your information and the property that is to be mortgaged.
2. Lock-in a mortgage rate before you begin shopping for a home. Many financial institutions will lock-in a rate for up to 120 days when pre-approving potential borrowers for a mortgage. Remember to renew the 120-day period if mortgage rates fall during this time, or better yet let an Invis mortgage professional do this for you.
3. Be specific about your lifestyle needs. Remember to consider not just the home itself but the property as a whole, including the neighbourhood and its proximity to work, shopping, restaurants, and other important places you'll be spending your time at.
4. Don't confuse an appraisal with a home inspection – you need both! An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building and all major systems.
5. Place conditions on your offer. Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the home. Even with pre-approval, homebuyers who make an offer without conditions do so at their own risk.
Part 2 coming next week.
Rick Moran, AMP, OMB # M08001997
This week we look at the some tips for those navigating the home buying process:
1. Know what you can afford. A mortgage pre-approval offers peace of mind by helping you determine the price range of homes you can shop for and the maximum mortgage you can afford. Remember that final mortgage approval is also based on your information and the property that is to be mortgaged.
2. Lock-in a mortgage rate before you begin shopping for a home. Many financial institutions will lock-in a rate for up to 120 days when pre-approving potential borrowers for a mortgage. Remember to renew the 120-day period if mortgage rates fall during this time, or better yet let an Invis mortgage professional do this for you.
3. Be specific about your lifestyle needs. Remember to consider not just the home itself but the property as a whole, including the neighbourhood and its proximity to work, shopping, restaurants, and other important places you'll be spending your time at.
4. Don't confuse an appraisal with a home inspection – you need both! An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building and all major systems.
5. Place conditions on your offer. Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the home. Even with pre-approval, homebuyers who make an offer without conditions do so at their own risk.
Part 2 coming next week.
Rick Moran, AMP, OMB # M08001997
Tuesday, May 17, 2011
Canadian Mortgage Borrowers Exhibit Confidence
Many Canadians are aggressively reducing their mortgages by making lump sum payments, increasing monthly payments and reducing amortization periods, revealing confidence and financial flexibility in a stable mortgage environment, according to a recent survey by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
Survey Highlights
· 22 per cent of mortgage borrowers increased their payments during the past year; 18 per cent made a lump sum payment; 9 per cent did both and 27 per cent who renewed increased their payments;
· For mortgages repaid in the last 20 years, one third were paid off early;
· Home Equity Lines of Credit (HELOC) represent 22 per cent of all mortgages, making these lines of credit a $215 billion industry;
· On average, Canadian homeowners have $222,000 in home equity, equal to 66 per cent of the value of their homes;
· During the past year, homeowners borrowed $26 billion in additional equity from their homes. 15 per cent of homeowners withdrew equity, averaging $30,000;
· Investments (28 per cent) replaced debt consolidation (19 per cent) as the number two use of home equity takeout. Home renovations remain number one (36 per cent).
"Prudent management of their mortgage debt has paid off for Canadians," said Jim Murphy, AMP, President and CEO of CAAMP. "By taking advantage of low interest rates, we have been paying down our mortgages. As economic confidence returns in Canada, many survey respondents have told us they now feel comfortable using some of that equity to improve their homes and to invest," said Murphy.
Survey Highlights
· 22 per cent of mortgage borrowers increased their payments during the past year; 18 per cent made a lump sum payment; 9 per cent did both and 27 per cent who renewed increased their payments;
· For mortgages repaid in the last 20 years, one third were paid off early;
· Home Equity Lines of Credit (HELOC) represent 22 per cent of all mortgages, making these lines of credit a $215 billion industry;
· On average, Canadian homeowners have $222,000 in home equity, equal to 66 per cent of the value of their homes;
· During the past year, homeowners borrowed $26 billion in additional equity from their homes. 15 per cent of homeowners withdrew equity, averaging $30,000;
· Investments (28 per cent) replaced debt consolidation (19 per cent) as the number two use of home equity takeout. Home renovations remain number one (36 per cent).
"Prudent management of their mortgage debt has paid off for Canadians," said Jim Murphy, AMP, President and CEO of CAAMP. "By taking advantage of low interest rates, we have been paying down our mortgages. As economic confidence returns in Canada, many survey respondents have told us they now feel comfortable using some of that equity to improve their homes and to invest," said Murphy.
Tuesday, April 19, 2011
Controversial document infuriates brokers
Them’s fighting words: A document from an RBC employee outlining the differences between mortgage brokers and specialists is drawing the ire of brokers – charging it mischaracterizes their work, their qualifications and their motives.
“Brokers will farm out your mortgage to a number of companies and then will set you up with a financial institution based on only the lowest rate, no other factors,” reads the undated document -- “Understanding the difference between mortgage specialists and mortgage brokers.” An RBC logo and the name of one of its British Columbia mortgage specialists appear on the flyer.
There’s more.
“When selling your mortgage the broker and the financial institutions reviewing your file may pull numerous credit bureau requests depending on their software capabilities,” continues the document, which aims to provide mortgage specialists with talking points to answer client questions. “Brokers will charge set up fees and have other hidden costs you should be aware of.”
Neither the specialist nor RBC corporate communications in Vancouver returned MortgageBrokerNews.ca calls Friday.
Still, the flyer has now been posted to industry websites across the country, with more than 150 brokers venting their rage and disappointment.
“I think the relationship between mortgage brokers and mortgage specialist is akin to some of the biggest rivalries in sports,” Greg Williamson, founder of 180 Degrees Coaching, told MortgageBrokerNews.ca. “But this is misleading and for those who read it and don’t know our business, it will mislead them.”
The broker was one of the first to post it on his blog website, www.gregwilliamson.ca. One of the document’s most glaring inaccuracies, maintains Williamson, is that suggestion brokers repeatedly run reference checks on clients.
“If a mortgage broker is using Filogix, they’re generally only pulling a credit check once,” he said. His blog has now attracted more than 280 responses, mostly from brokers concerned the RBC flyer will erode consumer confidence in their industry.
Under another section marked “Training and Educational Differences,” the writer extols the financial planning and institutional knowledge of bank mortgage specialists. She then offers a much briefer synopsis of broker qualifications: “Depending on your province, mortgage brokers must be licensed through the Accredited Mortgage Professionals course. Only this course is required, no financial planning included.”
Many brokers are concerned that the document may speak to the bank’s corporate attitudes about the broker channel. It is, in fact, the only one of the Big Five that has never used external brokers.
“There were obviously inaccuracies in the report,” CAAMP President and CEO Jim Murphy told MortgageBrokerNews.ca. “I’m in discussions with senior officials from RBC that they were not aware of it and are looking into it.”
My personal comments are: these RBC Specialists deal with one institution and one set of Mortgage Products. In many cases,
I would challenge them to have 30 years of Industry experience….enough said.
Rick Moran, AMP, OMB # M08001997
“Brokers will farm out your mortgage to a number of companies and then will set you up with a financial institution based on only the lowest rate, no other factors,” reads the undated document -- “Understanding the difference between mortgage specialists and mortgage brokers.” An RBC logo and the name of one of its British Columbia mortgage specialists appear on the flyer.
There’s more.
“When selling your mortgage the broker and the financial institutions reviewing your file may pull numerous credit bureau requests depending on their software capabilities,” continues the document, which aims to provide mortgage specialists with talking points to answer client questions. “Brokers will charge set up fees and have other hidden costs you should be aware of.”
Neither the specialist nor RBC corporate communications in Vancouver returned MortgageBrokerNews.ca calls Friday.
Still, the flyer has now been posted to industry websites across the country, with more than 150 brokers venting their rage and disappointment.
“I think the relationship between mortgage brokers and mortgage specialist is akin to some of the biggest rivalries in sports,” Greg Williamson, founder of 180 Degrees Coaching, told MortgageBrokerNews.ca. “But this is misleading and for those who read it and don’t know our business, it will mislead them.”
The broker was one of the first to post it on his blog website, www.gregwilliamson.ca. One of the document’s most glaring inaccuracies, maintains Williamson, is that suggestion brokers repeatedly run reference checks on clients.
“If a mortgage broker is using Filogix, they’re generally only pulling a credit check once,” he said. His blog has now attracted more than 280 responses, mostly from brokers concerned the RBC flyer will erode consumer confidence in their industry.
Under another section marked “Training and Educational Differences,” the writer extols the financial planning and institutional knowledge of bank mortgage specialists. She then offers a much briefer synopsis of broker qualifications: “Depending on your province, mortgage brokers must be licensed through the Accredited Mortgage Professionals course. Only this course is required, no financial planning included.”
Many brokers are concerned that the document may speak to the bank’s corporate attitudes about the broker channel. It is, in fact, the only one of the Big Five that has never used external brokers.
“There were obviously inaccuracies in the report,” CAAMP President and CEO Jim Murphy told MortgageBrokerNews.ca. “I’m in discussions with senior officials from RBC that they were not aware of it and are looking into it.”
My personal comments are: these RBC Specialists deal with one institution and one set of Mortgage Products. In many cases,
I would challenge them to have 30 years of Industry experience….enough said.
Rick Moran, AMP, OMB # M08001997
Tuesday, April 5, 2011
First-time buyers in major Canadian markets move to get in ahead of higher interest rates, says RE/MAX
MISSISSAUGA, ON, April 5 /CNW/ - Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released today by RE/MAX.
The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), GreaterToronto (five per cent), and Greater Montreal (five per cent).
"Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria" says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. "Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality - not unlike generations before them."
Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.
"With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as first-time buyers enter the market."
Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.
Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country's housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership. In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.
As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so. Unlike in years past—a greater percentage of today's first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings. They're spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them. Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country. While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.
"While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership," says Sylvain Dansereau, Executive Vice President, RE/MAX of Quebec. "Today's entry-level buyers are steadfast in their mindset. They know they have to live somewhere, but they simply don't want to pay someone else's mortgage. Savvy or practical, they remain a driving force. The bottom line is that the demand for entry-level product will remain steady. The role of starter homes in the marketplace is becoming ever more vital."
Rick Moran, AMP, OMB # M08001997
The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), GreaterToronto (five per cent), and Greater Montreal (five per cent).
"Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria" says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. "Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality - not unlike generations before them."
Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.
"With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as first-time buyers enter the market."
Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.
Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country's housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership. In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.
As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so. Unlike in years past—a greater percentage of today's first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings. They're spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them. Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country. While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.
"While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership," says Sylvain Dansereau, Executive Vice President, RE/MAX of Quebec. "Today's entry-level buyers are steadfast in their mindset. They know they have to live somewhere, but they simply don't want to pay someone else's mortgage. Savvy or practical, they remain a driving force. The bottom line is that the demand for entry-level product will remain steady. The role of starter homes in the marketplace is becoming ever more vital."
Rick Moran, AMP, OMB # M08001997
Subscribe to:
Posts (Atom)