Canadian Mortgages, Insurance, Investment, Tax Planning

CRA Media Room

Revenu Québec - Tax News

XE Forex News

Canadian Mortgage Broker news

Monday, November 29, 2010

CIBC Economic's "The Week Ahead"

The American economic Thanksgiving table isn’t yet graced with a horn of plenty. But the bounty that is there seems enough to dispel any real worries about double-dip recessions. US Q3 growth was revised up to 2.5%, and several indicators hint that the fourth quarter won’t be any worse than that.



Key Numbers to watch this week:



Canada – Real GDP - Q3 (Tues – 8:30AM) – Canada is set to post its second quarterly deceleration in growth since the recovery. We expect Q3's GDP had a modest ascent of 1.6%. September’s muted performance means a modest handoff to Q4, and with the external picture remaining soft, another quarter of sub-2% growth is in the cards.

US – Non-Farm Payrolls - November - (Fri - 8:30AM) – With census-related layoffs in the rear-view mirror, US payroll gains are now back in triple-digit territory. After the prior month’s consensus-topping 150K net job additions, we’re anticipating a repeat performance in November, as suggested by the apparent downward trend in the weekly initial jobless claims.



Equity Insights:



Driven entirely by gains on the domestic side, US corporate profits rose by 2.8% in sequential terms or by some 28% from year-earlier levels to set a new record in Q3.

While capital spending is likely to slow from the torrid pace seen earlier in the year, a glance at another useful indicator suggests a collapse is unlikely. Much of the equipment used in America’s factories these days is made abroad and capital goods imports have continued to rise strongly in recent months.

Recent gains in Canadian earnings have been driven by the non-financial sector, the opposite of the pattern seen stateside. On a seasonally adjusted basis, non-financial earnings were up by 0.8% from the preceding quarter in Q3, vs. a 3.7% decline for financial entities.



Currency Currents:



In line with an appreciating Canadian dollar, Canada's net inbound travel showed a rare improvement in Q3, coinciding with the loonie's first losing quarter in over a year.

Many have taken the rise in Spanish yields and CDS rates following the Irish debacle to be an indication of “contagion” in European financial markets. However, the run-up in Spanish borrowing costs is not a sign that Spain has “caught” Ireland’s bug, but that it is nursing its own illness.

With infl ation trending above target for the second straight month, the Banco Central do Brazil is under pressure to raise rates. But the central bank has been holding off, expecting earlier tightening and moderated global activity to eventually weigh on growth.

Saturday, November 20, 2010

Housing Predictions For Next Year Are Varied, According to Experts

Housing Predictions For Next Year Are Varied, According to Experts

Economists were polishing their crystal balls this week and trying to peer into the future to see what next year’s real estate market will be like, with predictions varying widely.
Most market observers are still talking about a recent report in one influential international publication that suggested Canada’s residential real estate market is overvalued by almost 24 per cent and should be watched very cautiously in the coming year.

The Economist magazine recently released its annual report on global housing prices, comparing twenty countries selected from around the world. Canada had one of the highest appreciation rates, but still seemed modest compared with Australia at 63.2 per cent and Spain at 47.6 per cent.


But one of the big five major Canadian banks almost immediately fired back a response to The Economist article this week, disputing the methodology and suggesting the number closer to 11 per cent. Predictions from other economists have also been appearing faster than Christmas decorations going up in stores the day after Halloween.

“All things considered, the Canadian housing market does not appear to be in a bubble, and is unlikely to suffer a U.S.-style collapse,” BMO economists Earl Sweet and Sal Guatieri said in a report.
“The media and some analysts remain glued to the idea that the Canadian housing market is a bubble ready to implode a la the U.S., Ireland, Britain and Spain, where prices have dropped 22 per cent on average,” the economists explained. “A comparison of the ratio of prices to incomes with the long-term trend suggests Canadian house prices were overvalued by as much as 18 per cent in late 2009. However, a 3 per cent decline in seasonally-adjusted prices so far this year, coupled with continued moderate income growth, has reduced overvaluation to a less worrisome 11 per cent in the third quarter of 2010.”

Martin Nel, BMO Bank of Montreal’s vice president of lending and deposit products, pointed to mortgage rates currently at “record lows”, making Canadian housing still affordable for the average consumer.
“Even with the notable rise in house prices during the past few years, the costs to service an average priced home, including principle and interest, are running close to long-term norms.”
Nel added that with this in mind, Canadians still need to do their homework before making any big decisions.

“Regardless of the market conditions, we advise prospective home buyers to stress test their financial budget using a mortgage payment based on a higher interest rate than what is currently available,” said Nel.

The report does take note of regional differences, with B.C.’s housing market shown to be more overvalued than Ontario’s or Alberta’s. “Unlike these two other provinces, B.C. house prices have continued to trend higher in 2010, reaching new peaks in September,” the report said. “Consequently, it likely faces a greater downside risk than other provinces. Valuations in Alberta and Ontario are closer to the current national estimate.”

The Economist also used price to rent rations to calculate their numbers, compared with the price to net income formula used by most economists in North America.
In Toronto earlier this week, at least some real estate analysts and economists were still scratching their heads at the magazine article’s findings.
“I’m still not sure why they would look at price to rent. It’s not an accurate way of doing this,” Jason Mercer, senior market analyst with the Toronto Real Estate Board, told PropertyWire.ca.
“There is no common industry method of calculating projections and what the market will do at any given time. That’s been quite evident over the past few months with people changing their opinions,” he said.
“For example, one of the things I look at is price compared with the broad affordability index. What are housing costs as a percentage of income?”

Mercer said in calculating housing costs, all the different expenses need to be added together, like mortgage principal, interest, property taxes and utilities. Every household is different on what percentage of their income is dedicated to housing, he explained, but most lenders try to look for no higher than one third, or 33 per cent.

Canada’s largest real estate board reported 3,076 properties were sold through its multiple listing service during the first two weeks of this month. That represents a 16 per cent decrease over the 3,666 units sold during the same time period last year.
So far this year, 78,526 properties have been sold in the Greater Toronto Area, up slightly from the same time period last year.
So what will the market be like in the coming year?

“There hasn’t been a lot of upward movement in terms of borrowing costs so I’m predicting you will see a moderate price increase in the Toronto market of about three per cent. Housing prices still remain affordable and borrowing costs are stable so everything should be somewhat balanced,” Mercer said.

Meanwhile, officials at the Canadian Real Estate Association changed their annual forecast for the coming year, announcing record low interest rates have combined with low inventory to spark increasing demand for Canadian real estate.
CREA said this week that despite prices being flat in October and sales were down more than 20 per cent compared with a year earlier, the market posted its third straight month of increased sales.

They reported October sales were halfway between the lows of December, 2008, and the record high of December, 2009, which could be interpreted as a sign the market is stabilizing.
“It seems to me the Canadian housing market has been either feast or famine,” said BMO Nesbitt Burns economist Douglas Porter told the Globe and Mail. “But now buyers are facing low rates on one hand, and daily volleys about how bad the market is on the other. That should keep things from getting overly hot, and gives me reason to believe we could have a balanced market in the year ahead.”

After slowing in the recession of 2008, sales activity reached a fevered peak in December, 2009, as buyers rushed back into the market.
Average resale prices were at an all-time high $346,881 last May, causing concern that cheap money was driving prices to unsustainable levels. The average resale price in October was $337,842.
But the market came to an abrupt halt last July, with major regions such as Vancouver and Calgary posting sales drops of nearly 45 per cent and prices pulling back from May’s high. Several factors were cited for the decline: The federal government introduced rules that made it more difficult to qualify for a mortgage, and Ontario and Quebec introduced harmonized sales taxes that made the services associated with buying a home more expensive.

Would-be buyers also faced a barrage of warnings from organizations such as the Bank of Canada, the OECD and International Monetary Fund, all of which have cautioned that as interest rates rise, many Canadians might not be able to make their mortgage payments.
One of the first economists to predict the U.S. mortgage crisis also warned this week that Canada’s housing sector could be headed for a sharp correction, CBC News reports.

Dean Baker of the Washington-based Centre for Economic and Policy Research said he sees no reason why average home prices in Canada should be about 50 per cent higher than in the U.S.
Baker said if interest rates rise by two per cent, Canadians could see house prices collapse by 25 to 30 per cent.

Given the potential damage, Baker said the federal government should consider regulations to further tighten mortgage lending and the Bank of Canada should consider raising rates.
Ottawa moved last February to tighten lending requirements and late last month, the Bank of Canada left its key interest rate unchanged at one per cent after three consecutive quarter-percentage-point increases, saying that the Canadian outlook had changed and that it expected full recovery to take a year longer than it had earlier predicted.

Baker was recently given the Revere Award along with two others for being the first to sound the alarm on the U.S. housing bubble five years before it burst.
But domestic mortgage rates have actually dropped in the past three months and now sit at all-time lows. A recent survey done by the Canadian Association of Mortgage Professionals released showed that Canadians are confident they could shoulder higher mortgage payments without too much difficulty, with 84 per cent saying a $300 monthly increase was no problem.

And that still didn’t stop two major banks – TD Canada Trust and Royal Bank of Canada, from announcing this week that they were increasing some of their fixed term mortgage rates by as much as one quarter of a percentage point.
Popular five year mortgages rose by 0.25 of a percentage point to 5.44 per cent. Rates on three and four year mortgages also increased by a quarter of a percentage point and one and two year rates went up by 0.15 of a point.
Rates for mortgages that have six, seven and ten year terms were unchanged.

Five year mortgage rates in particular are closely tied to yields, or rates of return in the bond market, which have recently rebounded following three straight months of declines. That means Canadian banks were paying a higher borrowing rate in the bond market in order to lend to prospective homeowners.

CREA now predicts national sales activity is expected to reach 442,200 units by the end of this year, representing an annual decline of 4.9 per cent. While monthly levels for sales activity are stabilizing, year-over-year comparisons are likely to remain stretched well into 2011 due to the record-level activity reported in late 2009 and early 2010.

Lackluster economic and job growth, muted consumer confidence, all predicted by CREA officials during 2011, means national home sales activity is forecast to decline by nine per cent to 402,500 units in the coming year.
"Interest rates are expected to resume their return to more normal levels next year, but will still be at levels that are friendly to the housing market," said CREA president Georges Pahud. "For the tenth year in a row, more than 400,000 homes are expected to change hands over the MLS systems of Canadian real estate boards and associations next year."

Levels for sales activity and new listings have swung widely across the country until recent months, according to a CREA press release. It added despite their volatility, movements in sales activity and new listings have remained in synch and have kept the resale housing market balanced since early 2010. The overall supply of homes for sale has also been trending lower in recent months. The resale housing market has remained balanced on a national basis and in most provinces, resulting in stable average price trends.

CREA officials predict the national average home price is forecast to rise 3.1 per cent in 2010 to $330,200, with increases in all provinces. The small revision to CREA's average price forecast reflects changes to the forecast for provincial sales activity and corresponding provincial contributions to the national average price calculation. The balance between supply and demand is forecast to remain stable, resulting in stable price trends.

Modest average price gains are also forecast in 2011 in all provinces except British Columbia, Alberta, and Ontario. Lower sales activity in British Columbia and Ontario are expected to result in a 1.3 per cent decline in the national average price to $326,000.
"Housing demand and supply is stabilizing," said Gregory Klump, CREA's chief economist. "That's good news for home buyers, who will feel less hurried to make an offer than they did when transitory factors ignited housing demand in early 2010. It's also good news for home sellers, who will feel more confident about price stability now that the housing market has become balanced."

"Interest rates are widely expected to remain low for some time due to recent downward revisions by the Bank of Canada to its outlooks for economic growth and inflation. Consumer sentiment will likely remain under pressure until economic prospects improve meaningfully," said Klump.

"In the meantime, many households will be focused on paying down their debts before the Bank of Canada resumes hiking interest rates next year," Klump added. "Economic uncertainty is likely to keep potential homebuyers in a cautious mood, so the continuation of low and stable interest rates is unlikely to cause housing demand or prices to swell."

Back in Toronto, economists were still looking trying to look at the numbers and predict what next year will be like. With the number of houses listed for sale sharply lower than in July, prices are expected to stay firm as buyers compete the few homes available. The months of inventory – the amount of time it would take to sell everything that is for sale, at the current rate of sales – sat at 6.2 months in October, down a full month compared with the July figure.

That doesn’t mean prices are likely to catch fire again in the spring, when activity traditionally accelerates, but it should help keep prices from dropping as buyers and sellers hit the market in what should be equal numbers.
“All the talk of a U.S. style housing bubble is completely unrealistic,” Ted Tsiakopoulos, Ontario regional economist for the Canada Mortgage and Housing Corporation, said in an interview.

“Next year you should have continued strong mortgage rates and other factors, but you will still see a slight decrease. We’re predicting that will be almost half a point in the Toronto market, or .4 per cent,” he said.
In Ottawa, CMHC released their annual fourth quarter housing market outlook that showed housing starts should “stabilize at levels consistent with demographic fundamentals in 2011”.

The federal agency predicted housing starts would be in the range of 176,700 to 194,700 units in 2010, with a point forecast of 186,200 units. In 2011, housing starts will be in the range of 148,000 to 202,300 units, with a point forecast of 174,800 units.

“High employment levels and low mortgage rates will continue to support demand for new homes in 2011. Nevertheless, housing starts will decrease to levels which are more in-line with long term demographic fundamentals next year,” said Bob Dugan, chief economist for CMHC.
Dugan also noted in a press release that the existing home market conditions will remain balanced over the next two years as MLS sales ease and inventory levels remain elevated. Existing home sales will be in the range of 423,800 to 455,900 units in 2010, with a point forecast of 440,300 units. In 2011, MLS sales will move lower and are expected to be in the range of 390,600 to 483,700 units, with a point forecast of 438,400 units.

With an improved balance between demand and supply, the average MLS price across Canada is expected to edge only modestly higher in 2011, according to CMHC.

Friday, November 19, 2010

Maximize your 2010 US federal refund

The holiday season is nearly here, which means it's year-end tax planning time. You only have until the end of December to act on certain money-saving credits and deductions. Read on for tips on how to maximize your 2010 federal refund by doing a little year-end planning now!

TaxACT 2010 Preview Version—available now—will cover these and all the other new tax law changes, so you won't have to keep track of them on your own.


Winterize Your Home Now to Save Energy & Money on Your 2010 Taxes
According to the Internal Revenue Service, homeowners making energy-saving improvements this fall can cut their winter heating bills and lower their 2010 tax bill as well. Read More...

IRS Explains 2011 Changes to Flexible Spending
The IRS issued guidance reflecting changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements (FSAs), to pay for over-the-counter medicines & drugs. Read More...

Tips for Taxpayers Making Charitable Donations
Are the holidays putting you in a giving spirit? If so, you may be able to take a deduction for it on your 2010 tax return. Here are the top 10 things the IRS wants you to know before deducting charitable donations. Read More...

Your Guide to Tax Law Changes
TaxACT will guide you step-by-step through all the tax law changes for 2010 to help minimize your tax liability. Preview editions of TaxACT 2010 are available now so you can import data from last year's return and start your 2010 tax planning immediately. Read More...

Your friend, , wants you to try TaxACT

The following message was referred to you by , who thought you might be interested in TaxACT.

This is a one-time referral; you will not be added to any lists at TaxACT.

*** Tax news you can use – November 2010 Edition. ***
View this email: on a mobile device | in web browser.
To ensure receipt of your TaxACT emails, please add reply@e.taxact.com to your address book.

TaxACT

Order  |   My account & downloads  |   Guarantees  |   Tips  |   Contact us  |   Send to a friend

Donation Box TaxNews You Can Use. November 2010.

Important Dates:

Oct 2010 – TaxACT Preview Version released.

Dec 31, 2010 - Free phone support offer expires.

Jan 2011 – TaxACT Final Version released.

Apr 18,  2011 – Deadline to file 2010 income tax return or extension (due to federal holiday on April 15, 2011)

 

The holiday season is nearly here, which means it's year-end tax planning time. You only have until the end of December to act on certain money-saving credits and deductions. Read on for tips on how to maximize your 2010 federal refund by doing a little year-end planning now!

TaxACT 2010 Preview Version—available now—will cover these and all the other new tax law changes, so you won't have to keep track of them on your own.

Winterize Your Home Now to Save Energy & Money on Your 2010 Taxes

According to the Internal Revenue Service, homeowners making energy-saving improvements this fall can cut their winter heating bills and lower their 2010 tax bill as well.   Read More...

IRS Explains 2011 Changes to Flexible Spending

The IRS issued guidance reflecting changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements (FSAs), to pay for over-the-counter medicines & drugs.  Read More...

Tips for Taxpayers Making Charitable Donations

Are the holidays putting you in a giving spirit? If so, you may be able to take a deduction for it on your 2010 tax return. Here are the top 10 things the IRS wants you to know before deducting charitable donations.  Read More...

Your Guide to Tax Law Changes

TaxACT will guide you step-by-step through all the tax law changes for 2010 to help minimize your tax liability. Preview editions of TaxACT 2010 are available now so you can import data from last year's return and start your 2010 tax planning immediately. Read More...

Order TaxACT 2010 Ultimate Bundle now for just $19.95 and get unlimited phone calls to TaxPayer Support free for the 2010 tax season ($7.95 value). Available for a limited time only, so act now.

 
Get FREE TaxPayer Support when you order TaxACT 2010 Ultimate Bundle
Facebook Twitter TaxACT Blog ShareThis

Order Now   |   TaxACT.com   |   Company   |   Legal   |   Privacy   |   Support

© 2010 2nd Story Software®. All rights reserved.

This e-mail was sent to: dvk.b2b2c.blog123@blogger.com

Free Tax Help, Tax Tips, Tax Calendar, Tax Law Changes, & IRS News : TaxACT Tax Library

Free Tax Help, Tax Tips, Tax Calendar, Tax Law Changes, & IRS News : TaxACT Tax Library

Wednesday, November 17, 2010

Canadian Mortgage Broker News - CMT updates its mortgage term review for November

Canadian Mortgage Broker News - CMT updates its mortgage term review for November
Monday, 15 November 2010

Mortgage term can have a bigger impact on interest cost than the upfront interest rate because the term dictates how long the consumer is locked into that rate.

CanadianMortgageTrends.com updated its Mortgage Term Review for November 2010, and wrote that the term “affects how long you’ll overpay or underpay, relative to the other available options. The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early.”

The site noted the following key developments since its August Mortgage Term Review:
Economic growth concerns have peaked for the year and slightly subsided
The 5-year bond yield, which leads fixed mortgage rates, fell to an 18-month low then strongly rebounded
The prime rate rose 25 basis points to three per cent
Fixed mortgage rates hit another all-time low
The current deep-discount market rates for a five-year fixed range from 3.39 to 3.49 per cent, while the variable rate sits at prime minus 0.75 per cent
Visit CanadianMortgageTrends.com for its complete breakdown of the most common mortgage terms.

Mortgage Term Review - November 2010

Mortgage Term Review - November 2010

Mortgage Term Review - November 2010, by www.canadianmortgagetrends.com
Updated: November 15, 2010

Key developments since the August update:

•Economic growth concerns reached a peak for the year but have since subsided (slightly)
•The 5-year bond yield (which leads fixed mortgage rates) fell to 18-month lows before rebounding strongly
•Prime rate rose 25 basis points to 3.00%
•Fixed mortgage rates hit all-time lows...again
•Current deep-discounted market rates: 5-year fixed: 3.39%-3.49%; Variable: Prime minus 0.75%
Why is the "Term" important?

As the saying goes, "The lowest rate will save you hundreds, but the wrong term can cost you thousands."

Put another way, your mortgage term can have a far greater impact on interest cost than the up-front interest rate. That’s because your term determines the length of time you're locked into a rate. That, in turn, affects how long you'll overpay or underpay, relative to the other available options.

The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early. It therefore pays to make the right choice from the get-go.

Almost anyone can find a low rate by browsing the Internet. Picking the right term isn't so easy. Take some time, get good advice, and nail the right term the first time. Below you'll find bite-sized term reviews to give you a running start.


************

Popular Fixed Terms…

Here's a breakdown of the most common mortgage terms:


•1-year Fixed: If rates rise as economists expect (see: mortgage rate forecast), then a deeply discounted 1-year fixed is mathematically a good alternative to a variable. At the end of the term, you can move into another 1-year or consider a variable rate—possibly at a better discount than today.
•2-year Fixed: Rates on two-year terms are now low enough to make them slightly more attractive than variable and 1-year fixed rates. That's assuming prime rate increases 1.75% in the next two years. If your rate expectations are lower than that, then a 1-year fixed performs better "on paper."
•3-year Fixed: This is unquestionably the sweet spot thanks to 3-year rates under 3%. The three-year beats all other terms in our internal rate simulations. If we were forced to pick one strategy for the next five years, a three-year fixed followed by two one-year terms would be it. As always, the trade-off with a 3-year term is more risk in years 4 and 5.
•4-year Fixed: At today's rates, 4-year mortgages are still a waste of time unless you plan to break your mortgage in four years. (Remember, however, that people do refinance every 3.5 years on average.)
•5-year Fixed: This is the most popular term in Canada, and government restrictions on variable-rate qualification have made it more so. Fortunately, 5-year fixed rates have never been lower—literally. At under 3.50%, the conservative 5-year term has become attractive even to long-time variable-rate devotees.

Longer Fixed Terms…

•7-year Fixed: The spread between 5- and 7-year terms is over 120 basis points, which makes seven year terms mathematically pointless. If you’re that concerned about risk, take a 10-year term for 30 basis points more, and get three more years of rate protection.
•10-year Fixed: The decade mortgage is now available just under 5%. Some consider that a pittance for 10 years of knowing your payments. What’s more, 10-year terms let you out after 5 years without paying a dreaded IRD penalty. History has shown, however, that 9 out of 10 times, 10-year fixed terms cost more than consecutive 5-year fixed terms. For a 10-year to prevail, 5-year fixed rates would have to soar over 3.75 percentage points by the time one's 5-year term matured. Reputable analysts are calling on long-term rates to rise just 2.25 percentage points in the next 60 months.
Variable Terms…

•5-year Closed Variable: Prime – 0.75% has become the standard once again for 5-year variable rates. Most people choosing variables today don't believe prime rate will increase significantly. They tend to feel that history will repeat itself. (That "history" refers to the 77% of the time that variable rates have prevailed over 5-year fixed rates. See: Fixed vs Variable.)

Nonetheless, every major economist expects prime rate to continue climbing next year. If prime rate ascends 150 basis points in the next two years, our amortization simulations give the edge to 5-year fixed rates.

Are variables worth the gamble? Not for our money. 1, 2, 3 and 5-year Fixed rates are just too good to pass up. However, ask this question in two years and our answer could be very different.
•3-year Variable: 3-year terms let you renegotiate sooner—which is good if you might need to break your mortgage in 3 years, or if you think variable discounts will improve in 36 months. In the 3-year market, you can find slightly better variable rates on no-frills mortgages.
•1-year Variable: With 1-year fixed rates below 1-year variable rates, don't bother with 1-year variables.
•5-year Capped Variable: No benefit. Ignore.
•5-year Open Variable: Open mortgages are temporary solutions, and you'll pay a premium for their flexibility. Remember, closed variables are portable, and they only have a 3-month interest penalty. Even if you break a closed variable in 180 days and pay the penalty, it's still cheaper than taking an open...at today's rates anyhow.
Other Terms and Features…

•5-year Cash Back Down Payment: Most people considering these mortgages are pretty desperate to buy, so banks stick them with posted 5-year fixed rates. Here's a novel thought: If you can’t put down 5%, rent and build up a down payment.
•5-year No-Frills: No-frills mortgages will save you 20 basis points, but you'll usually give up standard pre-payment privileges and the ability to switch or refinance elsewhere mid-term. In addition, you'll sometimes:
◦pay "reinvestment" fees if you break early
◦Be without online account access (if that's important to you).
Giving up all this will save you roughly $26 a month on a $250,000 mortgage.
pay higher penalties
•Readvanceables: They remain the “must have” mortgage if you’ve got 20%+ equity. Readvanceables make you liquid, and you can’t put a price on liquidity. Just remember, choosing a readvanceable means you can't switch lenders without paying legal fees. More…
•Open HELOC: HELOCs are priced at least 125 basis points above closed variable mortgages. So don't put money into a HELOC unless you plan to pay it off quickly, need interest-only payments, or want to utilize interest offsetting. If you're planning to borrow a large amount and pay off less than 25% of your mortgage each year, save money and take a readvanceable closed variable or 1-year fixed instead. If you do choose a HELOC, avoid the uncompetitive lenders who are still at prime + 1.00%.
•Hybrids: A hybrid mortgage is part fixed and part variable (and/or part long term and part short term). Hybrids give you rate diversification, which makes some degree of sense since no one knows how high rates will be in five years. It's best to choose hybrids that contain the same terms (e.g. a 5-year variable and a 5-year fixed). If you instead get part short-term and part long-term, the lender may be less motivated to give you a great rate when the short-term portion matures (because the lender knows you're locked in with them on the longer-term portion). If you're considering a hyrbid, also look at a medium term like a 3-year fixed.



_____________________________________________________



The Disclaimer: There are a million and one exceptions to everything above and market conditions change almost daily. Therefore, be wise and get a mortgage professional to compare all the options based on current rates and your personal circumstances.

Above all, remember that these opinions are just that. They are not recommendations or advice. Qualifying is always contingent upon approved credit. All information is based on present market conditions, current economist forecasts (we do not predict rates ourselves), and today's rates and expectations—each of which may change drastically without notice. These opinions are intended for mortgages on owner-occupied properties only.

Innovative New Tools Launched In The Real Estate Industry This Week

Innovative New Tools Launched In The Real Estate Industry This Week


Toronto Sales Are Performing As Expected

Doom & Gloom Predictions In The U.S. As Report Compares Property Market Conditions To The Great Depression Era

Residential Property Prices Set To Fall In 2011, According To CREA

Housing Starts Will Return To Stable Ground In 2011, According To Report By CMHC

Survey Reveals Ways In Which UK Property Industry Copes With Real Estate Downturn

Tuesday, November 16, 2010

FN Mortgage rates as of 16/11/2010

FIRST NATIONAL

1 year fixed:   2.65 %
3 years fixed: 3.49 %
5 years fixed: 3.79 %

5 years 5% Cash back fixed: 5.44 %

First National Prime Rate: 3.00 %




Posted by DataTracker Powered by CoolRent

Thursday, November 11, 2010

Canadian Mortgage Broker News - BCREA forecasts moderate rise in home sales

Canadian Mortgage Broker News - BCREA forecasts moderate rise in home sales
Wednesday, 10 November 2010


The British Columbia Real Estate Association (BCREA) released its Fall Housing Forecast 2010, forecasting BC Multiple Listing Service (MLS) residential sales to decline 12 per cent from 85,028 units in 2009 to 74,950 units this year, before increasing six per cent to 79,700 units in 2011.

“Consumers are responding to a double-dip in mortgage interest rates,” said Cameron Muir, BCREA Chief Economist. “While housing demand waned in the province through the spring and summer, the added purchasing power from low borrowing costs combined with gradual improvement in the BC economy has trended home sales higher in recent months.”

“A moderate increase in BC home sales is expected next year coinciding with employment and population growth,” added Muir. “However, the 79,700 unit sales that are forecast for 2011 are well below the ten-year average of 85,500 units.” A record 106,300 MLS residential sales were recorded in 2005.

The average MLS residential price is forecast to climb seven per cent to $498,500 this year and remain relatively unchanged in 2011, albeit declining by one per cent to $495,600.

Canadian Mortgage Broker News - More homeowners opting for long amortization

Canadian Mortgage Broker News - More homeowners opting for long amortization

Wednesday, 10 November 2010
Canadians are taking longer to pay off their mortgages but don’t expect it to affect their retirement plans.

A new study from the Canadian Association of Accredited Mortgage Professionals (CAAMP) showed 42 per cent of new mortgages in the last year went for an amortization period of more than 25 years. Five years ago, you couldn’t even qualify for an insured mortgage backed by the government that was amortized for more than 25 years.

In the same survey, CAAMP found those with extended amortization plan to retire on average at 61.9 years, while those with less than 25 years amortization plan to retire on average at 61.5 years.

“This data on expectations does not prove that actual retirement will be unaffected by recent trends in housing and mortgage markets,” the CAAMP report noted. “But it does suggest that consumers’ evaluations of their life-cycle options have not been materially altered.”

Homeowners opt for longer amortization periods because the monthly payment is lower when spread over 35 years instead of 25.

Wednesday, November 10, 2010

Canada Independent Mortgage Brokers to Remain Strong in 2011 Despite the Decline of U.S. Brokerage Market, says Report

Canada Independent Mortgage Brokers to Remain Strong in 2011 Despite the Decline of U.S. Brokerage Market, says Report

Tuesday, 09 November 2010 21:21 Written by David Hatton, Editorial Team

Mortgage brokers were popping Champagne corks this week after news was released Monday that the residential market inched past the $1 trillion dollar mark in late August.
Canadians had $1,008,000,000,000 in mortgages outstanding at the end of August, a gain of 7.6 per cent in one year, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP). Over the past 15 years, the volume of outstanding mortgages has increased a even more whopping 194 per cent.
As the residential housing market emerged from the recession earlier this year, consumers rushed into buying properties before the market recovered, raising average prices to an all-time high of $346,881 in May. The market has since recovered slightly with prices around $331,000.
Canadians also borrowed heavily against their home equity during the economic crisis. The CAAMP report noted about 18 per cent of consumers took equity out of their homes – an average of $46,000 – with half stating it was for “debt consolidation or repayment”. Based on an estimated 5.65 million mortgage holders in Canada, that represents about $41-billion in borrowing.
“It is estimated that 30 per cent of the takeout was for debt reconsolidation and repayment,” the report stated. “Therefore, while the amount of outstanding mortgage debt would have increased by this amount, totals for other types of debt would be correspondingly reduced. About $15-billion was taken out for renovations, $6-billion for education and other spending, $7.5-billion for investments and $4-billion for other purposes.”
But the report also noted a larger proportion of mortgage holders increased their payments in the past year. CAAMP reported about thirty-five per cent of consumers surveyed paid more than they had to, with another 12 per cent making lump sum payments, 16 per cent increasing their monthly payments and another 7 per cent doing both.
That announcement came hot on the heels of a Deloitte Consulting report that the Canadian private mortgage broker channel will remain “strong, stable and established” as it continues to fight with the big six banks across the country for market share in the years ahead.The report, titled “Winning Strategies in the Brokered Mortgage Marketplace”, suggested mortgages issued by non-bank providers will likely provide for one-third of all mortgages in Canada for the foreseeable future.
"The Canadian mortgage industry is undergoing another significant paradigm shift," says Todd Roberts, consulting partner and leader of Deloitte’s Corporate Strategy Practice. "In the face of significant industry developments such as the recent credit crisis, industry consolidation and price competition, many banks and non-bank lenders are starting to seriously evaluate the economics involved in pursuing the mortgage brokerage channel. As more and more of these lenders enter this business, Canadian mortgage consumers will ultimately benefit in the form of increased choice of products, value-added advice, and more convenient services."
Independent mortgage brokers represent 38% of total mortgage originations in 2009, up from 26% in 2003, according to Canada Mortgage and Housing Corp (CMHC) data. And roughly the other half of their 2009 mortgage volume was from three of the big six banks – Scotiabank, FirstLine (CIBC) and TD - active n the mortgage broker channel.
The industry website www.canadianmortgagetrends.com noted that CAAMP said brokers had 25% of 2009 total market share, according to their calculations. That could be due to two things: banks putting more reps on the street and banks realizing that low rates and market share are correlated.
It added the 2800 bank mobile mortgage reps will increase, putting more pressure on brokers. Brokers represent objectivity and choice, however, because brokers typically know and sell multiple lenders’ products. Hopefully lenders do not get carried away with “preferred broker” lists and destroy this edge, however.
“Lenders who use top 100 lists and the like are so excited by the “efficiencies” they create that they’re completely blinded to the effects these policies could have on the industry long term,” the website noted, adding unless things change, “volume pooling and submission desks could become essential for brokers who want to compete with bank reps for larger clients”.
That becomes a sharp contrast when compared with their U.S. counterparts, who have seen their share of mortgage broker collapses, the Deloitte report noted. Major banks such as JP Morgan Chase & Co. and Bank of America Corp, no longer sell mortgages through independent mortgage brokers after the subprime market imploded due to mortgages with unrealistic rate increases, inaccurate readings from credit rating agencies and lack of proper regulation.
In the U.S., the number of mortgage brokerage firms has contracted to 20,000 in 2010 from 54,000 in 2007, the report said. According to the U.S.-based National Association of Mortgage Brokers (NAMB), in 2006, mortgage brokers originated 65% of U.S. mortgages. They now originate a "previously inconceivable" 15%, the report says.
In Canada, however, the broker model has evolved from "a fragmented lender of last resort" to a legitimate option, the report says.
The Canadian lender distribution model in particular has undergone several changes over the last two decades, and while the landscape of lenders continues to shift, the mortgage broker channel remains a viable alternative to the major banks' branch and mobile mortgage sales forces (MMSF). According to the report, while mortgage market share trends for bank branches have steadily decreased (trends which are expected to continue), by contrast, they have modestly increased for mortgage brokers (they are expected to be flat into the future), and steadily increased for bank mobile sales forces (they are expected to continue).
“Canada could not be more different,” says Rob Galaski, Toronto-based senior manager of Deloitte’s corporate strategy practice. “In Canada, most of our lenders, particularly the major banks, have exhibited considerable restraint during the credit crisis and were much more conservative.”
“Over the last decade, there’s been a lot of speculation as to whether the brokerage channel is here to stay,” he says. “We’re finding that the broker channel in Canada is extremely stable and definitely a viable channel for all types of lenders, including the major banks. And, that’s a large contrast to what you find in the United States.”
Canada was largely shielded from the global credit crisis because of stricter mortgage lending rules and more conservative underwriting standards, according to the report. Meanwhile, the big six banks and monoline lenders like Home Capital Group Inc. continue to tap the mortgage broker channel to expand their business.
The future for the mortgage broker in Canada "remains positive" although the scenario anticipated five years ago that brokers will represent the majority of origination volume is “unlikely”, the report says. "The channel will continue to stabilize, settling at approximately one-third of mortgage origination dollar volume," it says.
"Over the last decade, an increasing number of viable options for borrowers have surfaced," Deloitte’s Galaski explained. "In addition to the traditional options available at bank branches, Canadians seeking a mortgage can now consult the banks' mobile mortgage specialists, independent mortgage brokers, and online sources. In this changing and more customer-friendly environment, the mortgage broker channel has emerged as a legitimate competitor that is helping provide greater choice and convenience to Canadians."
"There are many groups of Canadians who are benefitting from access to the specialized lending services that mortgage brokers can provide. In particular, individuals who would have previously been faced with very few options due to their financial circumstances—such as new immigrants, the self-employed, and individuals with credit challenges—now have options that were not previously available to them even a few years ago," says Galaski.
Mortgage brokers are "so important because they are the primary access point for people who have credit challenges," says Galaski. "The major banks have strong programs now for new Canadians, for example, but the mortgage-broker channel provides for people with credit challenges, people with a short credit history, and people with income challenges access to lenders who exist outside the mainstream."
"Having a strong and established broker channel is an excellent thing because it facilitates consumer choice," he says.
The Deloitte report added imminent changes in legislation may remove penalties and barriers for switching lenders.
In response to consumer group concerns that mortgage prepayment penalties are complicated and lack disclosure, the federal government has stated its intention to standardize their calculation and disclosure. The typical repayment penalty is either three months' interest or the difference between the existing rate and the rate the lender could charge in the current environment — known as the interest rate differential (IRD). In a rapidly falling rate environment, the IRD method provides the lender with greater compensation for the foregone interest revenue—but it is typically more expensive for borrowers who plan to discharge their mortgages.
"If new government regulations remove the IRD penalty as a barrier to switching, more consumers will likely switch mortgages in periods of declining interest rates," explains Roberts. "In the absence of stiff payment penalties, lenders will therefore seek to minimize lost customers by building strong relationships through active cross-selling and retention strategies for at-risk groups."
According to Deloitte, emerging trends that are expected to shape the Canadian mortgage industry and ultimately impact Canadian mortgage holders include:1. The balance of power will shift from financial institutions to mortgage-seeking Canadians: As the mortgage lending landscape continues to shift, Canadians will have access to a wider range of options when selecting a mortgage. This has increased competition among lenders (bank branches, mobile mortgage specialists, independent mortgage brokers, and online sources) which in turn will result in more customer-friendly service, increased product offerings and convenience for Canadians seeking a mortgage.
2. Online and telephone banking will continue emerging as viable channels: Remote self-service options such as online and telephone banking are emerging as popular alternative channels for obtaining mortgages. Given the new level of sophistication telephone banking has recently achieved, Canadians no longer need to leave home to obtain a mortgage as some lenders are allowing borrowers to complete their mortgage applications using a voice signature. In addition, online features such as calculators, planning tools, and live chat options with lenders are giving Canadians access to more information than ever. Although these channels are not new, they are in the early stages of adoption and signify an important trend for Canadians interested in the self-service option.
3. Mortgage brokers will evolve from "rate shoppers"' to "advisors" in order to survive: Given Canadians now have increased access to mortgage rate information, mortgage brokers as "rate shoppers" are quickly becoming irrelevant. As such, the "mortgage broker as advisor" value proposition will be the most successful approach for this channel. To succeed in today's hypercompetitive marketplace, mortgage brokers will start to offer value-added advice to Canadian mortgage holders similar to the way investment brokers have evolved from transactional to advice-based roles.
4. Major banks will continue to compete for broker business: Major banks will continue to invest heavily in proprietary distribution to compete directly with the mortgage broker channel, and to a growing extent, each other. In particular, the emergence of bank mobile mortgage sales forces (MMSF) is challenging the perception of brokers as the low-rate/better customer service alternative (particularly among non-branch/ monoline lenders). As a result, bank MMSF are making major inroads due to convenience and customer service. Armed with differentiated products, more than 2,800 mobile mortgage sales agents are operating in Canada today. The evolution of MMSF and the role major banks choose to play in the broker channel will have significant implications for the future of broker originated lending in Canada. If banks choose to stay in the broker channel, Canadians will have more choice and competitive pricing. Brokers will also need to raise their game and increase their level of client service sophistication. However, if banks withdraw from the channel, it will dramatically restrict the supply of mortgages in the broker channel.
5. Investments in technology will benefit consumers in terms of speed and convenience in obtaining a mortgage: As more lenders make technological advances, quick turnaround and visibility on deal status will improve, ultimately benefiting consumers. Improvements to workflow management tools streamline back-office operations, facilitate accurate and timely front-end communication with consumers, and allow lenders to proactively handle exceptions and reduce turnaround times. For example, if a borrower wants to know whether they can increase their mortgage to win a bidding war, the lender can now evaluate the risk and provide them with an answer within four to six hours―compared to the several days it used to take using a manual process.
6. The super-broker networks will continue to consolidate: In recent years, increased competition, heightened compliance requirements and rising technology costs have pushed the broker market to consolidate, with smaller shops merging into super-broker networks. In 2005, almost 70 per cent of Canadian brokers were employed by one of five broker houses. Today, this figure tops 85 per cent as new mid-tier networks have emerged. As a result, the quality of the remaining firms is much higher (for example, more consistent training for brokers, better technological enablement, greater negotiating power with large lenders on behalf of consumers for better products and rates).
7. Niche lenders with specialized product offerings will emerge via the broker channel: As the participation of new lending institutions in the mortgage broker channel continues to evolve, niche lenders with specialized products will emerge via the broker channel. In doing so, they will provide new options to groups of Canadians who previously had few mortgage options available to them due to their financial circumstances (for example, new immigrants, the self-employed, and individuals with credit challenges).

XE.com - Currency Market Analysis - Cable Outperforms while Euro Struggles Overnight

Cable Outperforms while Euro Struggles Overnight

The Great British Pound was well supported overnight by more hawkish than expected comments from the Bank of England. BoE Governor Mervyn King surprised markets at his Inflation Report news conference, in which he highlighted the view that while risks exist, the recovery in the United Kingdom is likely to continue; he went on to predict a CPI of 1.6% in two years. He highlighted that for the time being downside risks, which were mostly external, are mostly balanced with the upside possibilities as increases in manufacturing output and the services sector propel the economy. Traders took this to mean that the BoE would not be expanding their asset purchasing program for the time being.

The mostly external downside risk King was alluding to was Europe, and that “Over 60 percent of [England’s] exports go to a part of the world that isn’t exhibiting particularly buoyant growth and clearly has quite significant challenges within the area in terms of sovereign debt problems”. These comments brought the common currency under pressure against the Cable, and helped push the EURGBP under the 50-day moving average at the 0.8600 figure, a level not seen since late September. At the time of writing, the pair has run into congestion in the upper 0.8500 region from the 200-day moving average and a 50% fib retracement of the August-to-October rally. Given the fundamental story in the Euro, more downside risks in this pair exist.




The Euro was also heavy against the Big Dollar overnight, dragged lower by cross-selling against the Cable, a Portuguese bond auction which saw the cost of capital to the embattled nation rise dramatically, and the gap between Irish & German benchmark bonds trading at a lifetime high. The EURUSD has been in a freefall since last week, dropping over 5 big figures from its 9-month high near the 1.4300 level. It seems now that QE2 in the United States has been announced and the uncertainty over, investors have once again turned their heads to Europe. Going forward, the potential for further losses in the Euro is likely to be tempered by the risks associated with an increase in the supply of dollars as a function of QE2 weighting on the Greenback.
Canadian Mortgage Broker News - Canadian homeowners comfortable with mortgage debt: CAAMP http://ping.fm/WoZy1

Canadian Mortgage Broker News - Canadian homeowners comfortable with mortgage debt: CAAMP

Canadian Mortgage Broker News - Canadian homeowners comfortable with mortgage debt: CAAMP


Canadian homeowners comfortable with mortgage debt: CAAMP
Monday, 8 November 2010


Most Canadian homeowners are comfortable with their mortgage debt, according to the sixth annual State of the Residential Mortgage Market report from the Canadian Association of Accredited Mortgage Professionals (CAAMP). They also have significant home equity and can handle an increase in their mortgage interest rate.

“Canadians are being smart and responsible with their mortgages,” said Jim Murphy, CAAMP president and CEO. “They are building equity in their homes and making informed, long-term mortgage decisions. The survey results speak to the strength of our mortgage market, especially when compared to the United States.”

A few highlights from the report:
80 per cent of Canadian homeowners have more than 20 per cent equity in their homes
35 per cent of mortgage holders either increased their monthly payments or made a lump sum payment in the last year
84 per cent of mortgage holders said they could withstand an increase of $300 or more on their monthly payments
Canadian Mortgage Broker News - Mortgage market surpasses $1 trillion http://ping.fm/OgMcb

Canadian Mortgage Broker News - Mortgage market surpasses $1 trillion

Canadian Mortgage Broker News - Mortgage market surpasses $1 trillion


Mortgage market surpasses $1 trillion
Monday, 8 November 2010


The Canadian residential mortgage market has surpassed $1 trillion for the first time this year as higher prices forced many to borrow heavily for new homes, and low interest rates encouraged more refinancing.

At the end of August, there were $1.008 trillion in mortgages outstanding, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP). This marked a 7.6 per cent gain from a year ago, and the volume of outstanding mortgages has increased by 194 per cent over the past 15 years.

Many Canadians have also been using their mortgages to free up extra money. Eighteen per cent of mortgage holders took equity out of their homes, with nearly half citing a need for “debt consolidation or repayment.” The average amount borrowed against home equity was $46,000.

CAAMP estimated total borrowing at $41 billion, about the same as last year. About $15 billion was taken out for renovations, $6 billion for education and other spending, $7.5 billion for investments and $4 billion for other purposes.

Monday, November 8, 2010

"The Week Ahead" - November 8-12th http://ping.fm/eOwlv

"The Week Ahead" - November 8-12th

CIBC Economic's "The Week Ahead".


Key Highlights

In his Washington Post op-ed, Bernanke listed all of the potential benefits of QE with one key exception – its impact on the US dollar exchange rate. In the market’s eye, the more QE, the weaker your currency. However, much of the dollar-selling has been on the misconception that world is going to be flooded with “printed money” which will debase the dollar. We will likely have to push back the timetable for a significant correction in the US dollar’s favour into early 2011, given the tendency to see QE and currency weakness as twins

Key Numbers to watch this week:
Canada – Merchandise Trade Balance – September (Wed, 8:30 AM) – For four straight months, Canada’s merchandise trade balance has been in the red and September’s poor performance will take 2010 Q3 trade to the worst quarterly balance in decades.
US – Goods and Services Trade Balance – September (Wed, 8:30AM) – The US trade balance may have seen some improvement in September as softer oil and as prices that month helped lower America’s energy bill. The combination of lower imports and flattening exports should allow for some improvements.

Equity Insights:
Canadian reporting season appears to be off to an appreciably better-than-average start. Last quarter, 53% of TSX composite members beat the street expectation. This quarter, nearly 70% of the 180 firsts have reported positively.
TSX finally reclaimed all of the ground lost since the financial crisis’ defining moment – Lehman Brother’s 2008 collapse. Market healing has been swifter this time around then after the 2000 crash, but still behind the double dip in the 80’s.
‘Producing more for less’ was corporate America’s motto earlier in the recovery. That’s good new for earnings while it lasts, but not employment.

Currency Currents:
US$ depreciation gained momentum this past week as the Fed announced a slightly larger than expected QE. QE2 won’t put a dent in the unemployment rate, don’t rule out further liquidity injections next year.
CDS spreads for Brazil continued to dip following the national elections, pointing to confidence in the President-elect will control budget spending as promised
The RBS surprise rate hike this week was done preemptively as improved trade and a continuing recovery in emerging markets may stoke economic activity and inflation.


http://research.cibcwm.com/economic_public/download/nov05_10.pdf

Saturday, November 6, 2010

Canadian Mortgage Broker News - An Islamic mortgage, semantics to some http://ping.fm/jKV0V

Canadian Mortgage Broker News - An Islamic mortgage, semantics to some

Canadian Mortgage Broker News - An Islamic mortgage, semantics to some


An Islamic mortgage, semantics to some
Monday, 1 November 2010



An Islamic mortgage may just be about semantics.

Islam religion forbids followers from paying interest in financial matters, which restricts observers of the Muslim rule from taking out a mortgage.

In Manitoba, where an estimated 13,000 Muslims live, the provincial-based Assiniboine Credit Union consulted with Islamic scholars to introduce Canada’s first Islamic mortgage earlier this year. Under this financing, a Muslim home purchaser and the credit union each contribute to buying a house and each has ownership in the property. A contract is drafted where the family buys the credit union’s share over an agreed period of time.

The Muslim family has exclusive rights to live in the home, and during the contract term pays the credit union a “profit.” The amount is comparable to what a credit union member with a standard mortgage would pay in interest for a best rate mortgage.

Though the two sound similar, the difference is important to Islam religious observers.

“The main issue is that trade is permissible in Islam but usury or interest isn’t,” said Omar Kalair, founder of Toronto-based UM Financial, Canada’s premier Islamic financial institution. “So how we structure our mortgage is on a trade concept,” which is what Assiniboine Credit Union has done also.
Canadian Mortgage Broker News - Ontario boomers to downsize homes: TD buyer report http://ping.fm/wVBd8

Canadian Mortgage Broker News - Ontario boomers to downsize homes: TD buyer report

Canadian Mortgage Broker News - Ontario boomers to downsize homes: TD buyer report


Ontario boomers to downsize homes: TD buyer report
Thursday, 28 October 2010



Most Ontario boomers are planning to move to smaller homes, according to the TD Canada Trust Boomer Buyers Report. Eighty-six per cent are looking to downsize. Half said the smaller size will help them save money, while 36 per cent want to enjoy more luxurious features.

“Many boomers find that their needs and priorities have changed since they moved into their current home,” said Farhaneh Haque, regional sales manager for mobile mortgage specialists at TD Canada Trust. “If you find you have more room than you need, consider ‘right-sizing.’”

The report found these other provincial trends:
Sixty per cent of Atlantic Canadian boomers, versus 49 per cent nationally, plan to spend retirement in their current homes. But only 41 per cent of Atlantic homeowners will be retiring mortgage-free. Further, 22 per cent still need to pay off more than half their mortgage.
Alberta boomers are the most likely in the country to have paid off their mortgage in full with six-in-ten being mortgage-free, compared to 44 per cent nationally. Albertans are also the most likely to spend retirement at their vacation home (nine per cent versus five per cent nationally).
Meanwhile 56 per cent of boomers in Manitoba and Saskatchewan, compared to 36 per cent across the country, would consider buying a retirement property in the U.S.
Boomers in British Columbia are the least likely in the country to own a home and be mortgage-free, as nearly one-third of homeowners have more than 60 per cent of their mortgage left to pay off.
Canadian Mortgage Broker News - HST confusion abounds in Ontario http://ping.fm/YC7If

Canadian Mortgage Broker News - HST confusion abounds in Ontario

Canadian Mortgage Broker News - HST confusion abounds in Ontario


HST confusion abounds in Ontario
Thursday, 28 October 2010



It seems that the majority of Ontarians still don’t get it.

According to a recent Ipsos Reid survey, 56 per cent of Ontarians still mistakenly believe that the harmonized sales tax (HST) applies to the full purchase price of an existing home.

In truth, the tax only applies to the transaction fees for existing homes, and applies to the full price for new homes.

Since the average price of a resale home in Ontario is roughly $330,000, the majority of the survey’s respondents thought they would have to pay an additional $40,000 to purchase the home, according to the Ontario Real Estate Association (OREA).

The association says the province’s Realtors are become increasingly concerned that this persistent confusion is in fact dampening the housing market.

"We see it on the front lines every day. Clearly, Ontarians still don't know what the HST covers and what is exempt," OREA President Dorothy Mason said in a news release. "This is not helping the housing market, and it's not helping the Ontario economy. This confusion means that many buyers think the cost of a resale home is tens of thousands of dollars higher than it actually is.

"We're doing our part to inform our clients, but we shouldn't have to do it alone. We're calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion," said Mason.

Ipsos Reid surveyed 830 Ontarians, between October 4th and 11 th, on behalf of OREA. The estimated margin of error is +/-3.8 percentage points, 19 times out of 20.
Canadian Mortgage Broker News - Canadas real estate market outlook for 2011 “decent”: PwC http://ping.fm/JKgPN

Canadian Mortgage Broker News - Canadas real estate market outlook for 2011 “decent”: PwC

Canadian Mortgage Broker News - Canadas real estate market outlook for 2011 “decent”: PwC


Canada's real estate market outlook for 2011 “decent”: PwC
Tuesday, 2 November 2010



2011 promises slowing, steady growth and decent prospects for Canadian real estate investors as long as the U.S. economy does not drag them down, according to the Emerging Trends in Real Estate 2011 report, released by PwC and the Urban Land Institute (ULI). The report reflects interviews with and surveys of more than 875 of the industry's leading real estate experts, including investors, developers, lenders, brokers and consultants in both Canada and the U.S.

According to the report, Canadian property owners and financial institutions cannot help contrasting their reasonably healthy condition with precarious U.S. markets. Canadian fundamentals trend near equilibrium, employment is recovering and banks boast sound balance sheets, putting Canada in a better place and boosting confidence that the local market can escape issues faced in the U.S. However respondents say a weak U.S. dollar and sputtering U.S. economy dampen cross-border commerce, especially hurting Ontario industrial markets, which serve Midwestern U.S. manufacturing centres.

"The big difference for Canada has been the sound condition of its banks," said Chris Potter, leader of the Real Estate Tax practice for PwC Canada. "We have no distressed banks and few distressed owners and sales. Now, rising interest rates coupled with tight bank requirements and broader economic concerns tamper down a recent home buying spurt, particularly in Ontario and B.C., where purchasers stepped up activity before HST went into effect."

While capital returns, investment opportunities will be limited. Institutions dominate the major central city markets, holding on to assets for steady income instead of trading. Emerging Trends respondents exemplify the hold-on mentality: they think it is a good time to buy, but do not want to sell. In this "compressing cap rate" environment, many deal-starved Canadians will be active in the U.S., where they should have greater opportunity to spend and find higher yields.

Canada has one of the world's healthiest capital markets and few borrowers confront refinancing issues. Overall in 2011, Emerging Trends respondents expect a reasonable balance in debt market capital availability and an oversupply of equity capital, the result of non-satiated buyers.

"In Canada, the real estate industry didn't get overleveraged and the markets never suffered any interruption of credit availability," said Holly Allen, leader of the Real Estate Deals practice for PwC Canada. "Canadian banks benefit from a combination of institutional risk aversion and relatively stringent government regulation."
FN Mortgage rates as of 06/11/2010 http://ping.fm/JrrG4

FN Mortgage rates as of 06/11/2010

FIRST NATIONAL

1 year fixed:   2.50 %
3 years fixed: 3.49 %
5 years fixed: 3.59 %

5 years 5% Cash back fixed: 5.29 %

First National Prime Rate: 3.00 %




Posted by DataTracker Powered by CoolRent

Thursday, November 4, 2010

First National - Renewal http://ping.fm/v2SQE

First National - Renewal

First National - Renewal



Should you change your mortgage terms when you renew?
When your mortgage comes up for renewal, you have the flexibility to pay down some or all of your outstanding principal, without penalty, and to select new mortgage terms to meet your current needs.

Here are three typical situations and what you might consider doing under the circumstances.

Situation Consider… Benefit
You received a promotion, and your cash flow has increased.
•Increasing your monthly payment.
•Making a lump-sum principal prepayment to put towards your principal amount.
Both choices will reduce your total interest costs and help you become mortgage-free sooner.

You anticipate a major expense in the near future or are experiencing cash-flow difficulties.
•Increasing your mortgage principal by refinancing your mortgage and using the additional amount to pay off your debts.*
•Decreasing your monthly payment to help increase your cash flow.**
You’ll get an immediate cash infusion to pay other debts or make essential purchases.

You’ll have more monthly cash available for other expenses.

Your financial situation hasn’t changed.
•Renewing your existing mortgage terms.
Your mortgage will continue to meet your needs, just as it has in the past.


* To refinance your mortgage, you will need to requalify based on your current circumstances.
** Refer to your mortgage documents for details.


If your mortgage is coming up for renewal, be sure to contact your mortgage broker. We’ll help you review your options and help you select the mortgage that’s right for you.

First National - Lifestyle

Why it pays to stay in touch with your mortgage broker
When you were researching your options for your current mortgage, you probably spent a fair bit of time speaking with your mortgage broker. You may not realize that your mortgage broker can still be a valuable resource many years from now.


Your broker understands your needs. Whatever situation you might find yourself in as a homeowner, your broker has extensive experience providing with mortgage advice to others in similar scenarios, whether it’s buying, selling, or refinancing.


Your broker understands the market. You can count on an independent view of what’s happening in the markets. Your broker stays on top of the trends in real estate financing and other economic conditions and is aware of new developments and products that could be useful to you.


Your broker is a source of advice and knowledge about refinancing. If you’re thinking of refinancing, your mortgage broker is one of the first people you should speak to. He or she will again review your goals and outline your options, so you can make an informed decision.


Your broker can refer you to good people. Your mortgage broker regularly works with lenders, real estate agents, home inspectors, and lawyers who specialize in real estate. If you ever need a referral – for example, if you are looking for a real estate agent to help you find your next home – your broker can provide you with recommendations.
Welcome to your Fall 2010 issue of "You're Home" http://ping.fm/nEatx

Welcome to your Fall 2010 issue of "You're Home"

Welcome to your Fall 2010 issue of "You're Home," your quarterly newsletter provided by First National Financial LP, your mortgage provider. Read about the pros and cons of selling a home yourself or with an agent, buying a new construction or resale home, reasons to stay in touch with your mortgage broker, and find out what My Mortgage can do for you.

Should you sell your home yourself or use an agent?
Find out what My Mortgage can do for you

Buying a new construction or a resale home: Make the decision that’s right for you

Why it pays to stay in touch with your mortgage broker

Should you change your mortgage terms when you renew?

FAQ
Send us your feedback
Web site
Contact us
Should you sell your home yourself or use an agent?
Have you wondered whether you should sell your home yourself or use a real estate agent? Make an informed decision by considering the pros and cons of
hiring a pro versus going solo.
FN Mortgage rates as of 03/11/2010 http://ping.fm/3Fxf3

Wednesday, November 3, 2010

FN Mortgage rates as of 03/11/2010

FIRST NATIONAL

1 year fixed:   2.50 %
3 years fixed: 3.49 %
5 years fixed: 3.59 %

5 years 5% Cash back fixed: 5.29 %

5 years variable: Prime minus 0.70%
First National Prime Rate: 3.00 %




Posted by DataTracker Powered by CoolRent
Find out the electricity costs for another home http://ping.fm/6pVMK

Find out the electricity costs for another home

NEW! Find out the electricity costs for another home

Are you thinking about renting or buying an apartment, house or cottage? In just a few clicks, you can get an estimate of the home's electricity costs. All you need is the address, including the postal code, of the home you're considering.

Go to your Personal Page and click on Estimate the electricity costs of the home you are considering.

Your Personal Page »
Access code: dvkatev

Need assistance?
1 888 858-7927.
Monday to Friday, 8:00 a.m. to 8:00 p.m.
Saturday and Sunday, 10:00 a.m. to 6:00 p.m.

Canadian Mortgage Broker News - Real estate market steady: Royal LePage

Canadian Mortgage Broker News - Real estate market steady: Royal LePage

Real estate market steady: Royal LePage


Canada’s real estate market is returning to normal with a year-over-year average price increase of less than five per cent, according to a Royal LePage survey released Tuesday October 19.
The survey suggests house price appreciation slowed in the third quarter to a rate historically typical of balanced property markets.
“Most Canadian housing markets cooled in the third quarter,” Phil Soper, president and CEO at Royal LePage Real Estate Services, said in the report. “In fact, the year is unfolding much as we predicted with the unusually active first half of 2010 giving way to slower markets in the later part of the year.”
Soper said the third quarter was slightly stronger than anticipated, helped by the low rates in a competitive mortgage financing market and new demand fuelled by improved affordability in many regions.
“House price growth now sits just below the long-term annual average of approximately five per cent,” added Soper. “But once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track. Canadian homeowners will be pleased.”
St. John’s, Winnipeg, Montreal and Vancouver posted price increases above the national average, with St. John’s rising between 12.3 per cent and 14 per cent depending on housing type, while Winnipeg had increases of between eight and 11.7 per cent year-over-year. Prices in both cities were fuelled by a population influx.
Canadian Mortgage Broker News - BoC, gloomier economic outlook http://ping.fm/BxoEl

Canadian Mortgage Broker News - BoC, gloomier economic outlook

Canadian Mortgage Broker News - BoC, gloomier economic outlook

BoC, gloomier economic outlook


In general, the economic forecast is gloomier than previously predicted. Canada is being pulled down by a U.S. recovery that will be weaker than expected, a global turnaround that is “entering a new phase” fraught with uncertainty, and a retrenchment by Canadian consumers, the central bank said in a statement on the decision.
The expected growth for 2010 has been cut to 3 per cent from 3.5 per cent, while 2011 growth was cut to 2.3 per cent from 2.9 per cent, and 2012 growth raised to 2.6 per cent from 2.2 per cent.
Canadian Mortgage Broker News - Real estate market steady: Royal LePage http://ping.fm/uZ8Fe

Canadian Mortgage Broker News - Real estate market steady: Royal LePage

Canadian Mortgage Broker News - Real estate market steady: Royal LePage

Real estate market steady: Royal LePage


Canada’s real estate market is returning to normal with a year-over-year average price increase of less than five per cent, according to a Royal LePage survey released Tuesday October 19.
The survey suggests house price appreciation slowed in the third quarter to a rate historically typical of balanced property markets.
“Most Canadian housing markets cooled in the third quarter,” Phil Soper, president and CEO at Royal LePage Real Estate Services, said in the report. “In fact, the year is unfolding much as we predicted with the unusually active first half of 2010 giving way to slower markets in the later part of the year.”
Soper said the third quarter was slightly stronger than anticipated, helped by the low rates in a competitive mortgage financing market and new demand fuelled by improved affordability in many regions.
“House price growth now sits just below the long-term annual average of approximately five per cent,” added Soper. “But once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track. Canadian homeowners will be pleased.”
St. John’s, Winnipeg, Montreal and Vancouver posted price increases above the national average, with St. John’s rising between 12.3 per cent and 14 per cent depending on housing type, while Winnipeg had increases of between eight and 11.7 per cent year-over-year. Prices in both cities were fuelled by a population influx.
Canadian Mortgage Broker News - WEB EXCLUSIVE: Is the Canadian consumer overextended with debt? http://ping.fm/yB9yD

Canadian Mortgage Broker News - WEB EXCLUSIVE: Is the Canadian consumer overextended with debt?

Canadian Mortgage Broker News - WEB EXCLUSIVE: Is the Canadian consumer overextended with debt?

Is the Canadian consumer overextended with debt? Who knows? Who should care?
By David Johnston, M.T.I., CFP
Manager,
Residential & Select IPL Mortgage Specialist
The Johnston Mortgage Team, New Brunswick
I grow weary of reading reports and surveys suggesting that consumer debt in Canada is a problem. Is it a problem or not? How do telephone surveys, which seem to occur daily, add to a situation that should be looked at from a numbers perspective?
I went to Statistics Canada's website and couldn’t find any hard numbers to verify the "mythical" average Canadian debt load. Statistics Canada did report in 2008 "the proportions of debtors increases early in the lifecycle but declines steadily later".
Financial Planning 101 teaches us that Canadian households, which are led by individuals 32 years of age or younger had on average a negative net worth. Typically, debts are paid with income, not assets. So it would be good to also learn what the average Canadian has in assets.
I do know that a good estimate of the average equity in Canadian residential properties is about 70 per cent. Yes, that would mean about $2.8 trillion dollars of value with approximately $1.0 trillion dollars in debt as reported in Canadian Mortgage Industry Report Fall 09, commissioned by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
Recently, I read two academic reports on the impact or potential rising rates on the mortgage borrower. With the exception of a small percentage, most borrowers are in fine shape. Employment rates and income are the main factors when forecasting the likelihood of making mortgage payments and meeting debt obligations. Reasonable rate increases overall will not be a problem.
I think there is a lot of misinformation out there from special interest groups who want to curtail reasonable access to credit for consumers. A recent survey by the Royal Bank of Canada urged lenders and government to "do something?
In 2003 the UK the government was dealing with similar "unknowns”. They created a task force to tackle the consumer debt issue and eventually stated there was no generally accepted definition of over-indebtedness and inadequate information on which to base one"
The recent TD bank report states that soon Canadian household indebtedness will be over 150 per cent of personal disposable income (PDI). I find it strange that companies compare debt to disposable income. Assets and liabilities are on a balance sheet for companies. Why not for families?
Personal disposable income (PDI) is money available for debt servicing. I looked at TD's 2009 financial highlights. I am not an accountant; I just wanted to see how a bank compared debt in financial ratios. It looks to me that net income (PDI) was almost $5 billion dollars. The same report showed $255 billion in outstanding loans. Perhaps we need to survey 1000 Canadian consumers to see if we should worry that a bank seems to have borrowings in excess of 150 per cent of its net income? Of course, that’s crazy!
It is always prudent to manage debt responsibly. As a financial planner I counsel clients in that fashion.
Canada has a system that is the envy of the world, well regulated and prudent that helps us manage the down times. Senseless handwringing without full and candid disclosure can’t help anyone. It can frighten some people, which would be fine if we had the facts. Personally I think our current system is as good as possible given what will always be competing interests.