29 Jan

Overspend at Christmas? Have you approached the due dates on your credit card bills?

General

Posted by: Anne Martin

Did you overspend at Christmas?  Having trouble paying off the credit card bills for your purchases? 

Trying to have a fun filled holiday season can be difficult for many of us.  We want to have a good time, and purchase the gifts that our loved ones ask for but we often get caught up in the season and don’t realize how much we are actually spending until the money spent.  I often put these purchases on my credit card and have a heart attack when I get the bill in January.

Of course these “impulse purchases” get added to whatever is already on my account and before I know it, I’m in debt for way more than I want (or should) be. 

Here are some easy solutions to help reduce your monthly payments.

  • Transfer unpaid amounts from high interest rate credit cards to cards with lower interest rates
  • Give up the rewards cards if you cannot pay it off every month or only use these cards when you know you will be able to pay it off

–        These cards have higher the interest rates and causing you to pay more towards interest and less towards the principal, it will take much longer to pay off initial debt

–        You end up paying much more for each purchase than the actual purchase price

–        Check your statement to see if it says how long it would take you to pay off the current bill by only paying the minimum balance – could be many, many years!

  • Start planning for next year.  Give yourself a budget and start saving a small amount every month.  Don’t over that amount next year.
  • If those debts are mounting and have added up to the thousands, you might want to speak with a mortgage professional about consolidating your debts by refinancing your home.

For example:  you owe $150,000 in your current mortgage and your house is worth $250,000.

You may be able to refinance up to 80% of the value of your home, therefore….

$250,000 x 80% = $200,000

You already owe $150,000, so $200,000 – $150,000 = $50,000

So you can add up to $50,000 to your mortgage which you can use to pay off your debts at the current mortgage interest rates (currently around 3 – 3.5%) for a five year term.  When amortized over 25 years, the cost of that $50,000 is approx. $249 per month at 3.5% as opposed to approx. $800 per months for $50,000 at 20% (a common credit card interest rate) A difference of $551 per month. On approved credit, penalties may apply. 

Of course, you would need to owe a substantial sum to make a refinance of your mortgage a viable option.  Your mortgage consultant will recommend the best option for you.  Give me a call.  Consultations are always FREE and in most cases there is no charge to arrange your mortgage.          

26 Jan

Does Breaking your Mortgage Make Sense? January 2013 newsletter.

General

Posted by: Anne Martin

 

 
 
Consumers Home Digest Header
Anne Martin, AMP
Anne Martin AMP,
Mortgage Agent

FSCO  M10002257

Neighbourhood Dominion Lending Centres
FSCO Lic. 11764

39 Collier Street
Ste. 300

Barrie ON  L4M 1G5

Direct: 705.791.6683
P: 705.720.1001 or 1.888.500.184 

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Health1
Find out how a simple “mortgage check-up” can help you. A single call may be all the care you need.

It’s important to protect yourself against market conditions. But how do you know you have the right mortgage if you haven’t seen what’s possible?

Health2Simply call us today for a “mortgage check-up” and you’ll be better prepared.

705.720.1001 or 1.888.500.1841

 
 

DID YOU KNOW…

Dominion Lending Centres has launched a new Visa Card Program! You can now conveniently apply for a Dominion Lending Centres Visa directly through us. There are six different cards available, including: 1) Student; 2) Classic; 3) No-Fee Gold; 4) Low-Rate Gold; 5) Travel Gold; and 6) Platinum. Each Visa card includes a minimum three-day complimentary insurance coverage (even on no-fee cards), low regular rates ranging from 9.9-19.9%, the chance for applicants to win 500 BONUSDOLLARS (1 BONUSDOLLAR = $1 Canadian) over the next three months (several draws in each of January, February & March), and the travel program is a great option thanks to no 14-day advance booking notice or blackout periods. For details or to apply today, give us a call or send us an email. 

 
Join Our Mailing List
January 2013 
Hi Everyone, welcome to our January Newsletter …

This month’s edition examines whether breaking your mortgage makes good financial sense, as well as introduces some helpful new homebuyer tools.  

 

Please let me know if you have any questions or feedback regarding anything outlined below.  Thanks again for your continued support and referrals! Happy New Year!

….Anne Martin 

   

 

Fire Prevention Planning

With mortgage rates still hovering at historic lows, chances are you’ve considered breaking your current mortgage and renewing now before rates begin to rise.

Perhaps you want to free up cash for such things as renovations, travel or putting towards your children’s education? Or maybe you want to pay down debt or pay your mortgage off faster?

In some cases, the penalty can be quite substantial if you aren’t very far into your mortgage term. But breaking your mortgage early can still be beneficial in the long run if you are thinking about taking advantage of todays’ historically low rates.


Many people often assume the penalty for breaking a mortgage will only cost three months’ interest payments so, when they crunch the numbers, it doesn’t seem so bad. In most cases, however, the penalty is the greater of three months’ interest or the interest rate differential (IRD).

The IRD is the difference between the interest rate on your mortgage contract and today’s rate, which is the rate at which the lender can lend the money to someone else today. And with rates so low these days, the IRD tends to be greater than three months’ interest. Because this is a way for banks to recuperate any losses, for some people, breaking and renegotiating at a lower rate without careful planning can mean they come out no further ahead.

Keep in mind, however, that penalties vary from lender to lender and there are different penalties for different types of mortgages. In addition, the size of your down payment and whether you opted for a “cash back” mortgage can influence penalties.

While breaking a mortgage and paying penalties based on the IRD may result in a break-even proposition in the short term, if you look at the big picture, you’ll see that the true savings are long term because it is expected that rates will be higher in the years to come. Your current goal is to secure a long-term rate commitment before it’s too late, and here lies the significant future savings.

If you’ve thought about breaking your mortgage now and taking advantage of the current historically low rates, feel free to give me a call or send me an email to discuss your options.

As always, consultations about breaking your mortgage to secure a lower rate, or general mortgage questions, are always free, I am here to help!

 

Fire Prevention Planning

Canada Mortgage and Housing Corporation (CMHC) recently introduced two new tools to help Canadian homebuyers make informed and responsible home-buying decisions – including a calculator and mobile app.

CMHC’s new Debt Service Calculator allows homebuyers to evaluate their financial situation and understand how much they can comfortably afford to spend on a mortgage. The easy-to-use calculator allows users to quickly estimate their gross debt-service ratio (GDS) and total debt-service ratio (TDS) – both important measures in assessing their financial readiness for homeownership. The Debt Service Calculator can be accessed by visiting: www.cmhc-schl.gc.ca/en/co/buho/buho_005.cfm.

CMHC’s new ‘Ready, Set, Home’ mobile app provides consumers, particularly first-time homebuyers, with comprehensive CMHC information and tools at your fingertips. The app helps homebuyers keep track of the details throughout the home-buying process and provides access to a variety of helpful calculators, articles and other resources.

Recognizing the increasingly fast-paced, electronic and mobile environment, the new ‘Ready, Set, Home’ mobile app is a free application that offers quick and convenient access to CMHC’s extensive housing information. The app can be downloaded to your Blackberry, Android or iPhone device at: www.cmhc.ca/mobile.

These new tools are the latest additions to CMHC’s comprehensive suite of free resources available to support Canadian homebuyers.

 

Backup Power for Your Home

You rely on many appliances and systems in your home for your health, comfort and security. Most depend completely on utility-supplied electricity. It makes sense to have a backup system that will keep your family comfortable and your home safe in a power failure.

 

This fact sheet has 10 tips about backup power systems. Following the tips, six basic types of backup systems are described in Table 1.

 

1 – Plan

Careful preparation is essential to select, buy and install a backup system. Don’t leave it to the last minute – your household should have time to learn how to use the system in advance. And during a power failure, you may not be able to find suitable, reasonably priced equipment, fuel, and/or installation help. Keep the system simple, so you and your family can operate and maintain it. Your emergency system must work reliably when needed.

 

2 – Depending on the Season, Keep the Heat In (or Out)

During winter months, the main purpose of a backup system is to keep the house warm (and sometimes to keep the basement dry). You have to be able to keep the heat in, prevent unnecessary air infiltration and prevent pipes from freezing. The starting point is proper insulation and air sealing, before you consider your backup power needs.

In summer months, the main purpose of a backup system for Canadians is to keep the house from becoming too warm. People who have difficulties with extreme heat (seniors, asthmatics, and so on) especially need an alternative plan to power their homes. The starting point is proper insulation and shading. External blinds or shutters can help.

 

3 – Change to Energy-Efficient Appliances

Your backup system will do the most good if it is powering efficient appliances. Check if there is an EnerGuide label to determine each appliance’s power consumption, or use an electrician’s ammeter to find out how much power each appliance uses – its current draw in amps. Ammeters can be purchased in a hardware or electrical supply store.

 

The energy requirements of some appliances will surprise you. Replace the inefficient appliances with efficient models. Change to energy-efficient light bulbs like compact fluorescents. When buying new equipment, get the most efficient possible – for example, an Energy Star® qualified refrigerator or a lower-volume, smaller horsepower well pump or sump pump.

 

Make sure your furnace-fan motor is the most efficient available. If you are replacing your heating system, choose a furnace with a variable speed motor and an AFUE (Annual Fuel Utilization Efficiency) rating of 90 or more.

 

Click here to read the full article from CMHC 

 

 
 
 
 
This email was sent to lesley@ndlc.ca by anne@barriemortgagelocators.com |  
Neighbourhood Dominion Lending Centres | FSCO Lic. 11764 | Independently Owned & Operated | 1140 Stellar Drive | Newmarket | Ontario | L3Y 7B7 | Phone: 905.715.7086 | Canada
26 Jan

Bank of Canada Announcement January 23, 2012. No change.

General

Posted by: Anne Martin

 

NDLC Logo with wording
Bank of Canada Announcement
Date: January 23, 2013  
Bank of Canada Announcement

Market Commentcanadian economy

As expected, there was no change in the Bank of Canada press release. Bank prime remains at 3%.  

 

This means no changes in variable rate mortgages or line of credit rates.

 

Fixed rates remain at records lows. We currently have five year money ranging from 2.99% to 3.19%.   

 

Below are the highlights of the Bank of Canada Announcement: 

  • The global economic outlook is slightly weaker than the Bank had projected in its October Monetary Policy Report (MPR) In Canada, the slowdown in the second half of 2012 was more pronounced than the Bank had anticipated, owing to weaker business investment and exports.
  • The Bank expects economic growth to pick up through 2013
  • The Bank expects trend growth in household credit to moderate further, with the debt-to-income ratio stabilizing near current levels.
  • The economy is expected to grow by 2.0 per cent in 2013 and 2.7 per cent in 2014. The Bank now expects the economy to reach full capacity in the second half of 2014, later than anticipated in the October MPR
  • While some modest withdrawal of monetary policy stimulus will likely be required over time, consistent with achieving the 2 per cent inflation target, the more muted inflation outlook and the beginnings of a more constructive evolution of imbalances in the household sector suggest that the timing of any such withdrawal is less imminent than previously anticipated. 

 Click Here to Read the Full Announcement

 

The next Bank of Canada Announcement is scheduled for March 6th, 2013. 

 

Bank prime is 3.0%

P.S. If you have any questions as to what this means to your mortgage, we are always here to help you with unbiased advice. 
 
 
In This Issue
No change in bank rate…
Quick Links
Visit my Website

Anne Martin
Anne Martin
Mortgage Agent
FSCO M10002257

Neighbourhood Dominion Lending Centres
FSCO Lic 11764

39 Collier Street, Suite 300
Barrie ON
L4M 1G5

Cell: 705.791.6683
Office: 705.720.1001 ext.225 or 1.888.500.1851  

Email
Website

 
 
This email was sent to lesley@ndlc.ca by anne@barriemortgagelocators.com |  
Neighbourhood Dominion Lending Centres | FSCO 11764 | Independently owned and operated | 1140 Stellar Drive | Newmarket | Ontario | L3Y 7B7 | Canada
11 Jan

Canadians Can Still Buy a House Without Saving Their Pennies

General

Posted by: Anne Martin

by Robert Mclister  Special to the Globe and Mail

It would seem that regulators want to dissuade Canadians from buying homes with nothing down. Yet despite all of the recent changes, buyers can still get into the real estate market with little cash on hand.

Ottawa did away with Canada Mortgage and Housing Corp .-insured 100 per cent financing back in 2008. Home buyers with few savings searching for an alternative were left with cash-back down payment mortgages. (That’s where a lender gives you your 5 per cent required down payment, in exchange for a higher rate.) But those didn’t last long because in 2012, regulators barred banks from offering cash back for down payments.

     
Purchasing a home without your own down payment is often risky. One exception is when a borrower is well-qualified (apart from the down payment), has enough potential resources to withstand a loss of income and falling home prices, and is better off owning than renting. But exceptions are just that, and not the rule.

Young people use alternative down payment sources more often than most. Why? The main reason is a lack of savings. At a time when the average national home price has jumped to $356,687, the Canadian Association of Accredited Mortgage Professionals finds that more than one in four renters have less than $5,000 saved for a down payment. Yet, many of these folks are dead set on owning a home, so they end up using one of the down payment methods listed below.

 

Borrowing from other credit sources
When buying a home, you generally need at least 5 per cent of the purchase price as a down payment. Ottawa prohibits you from borrowing that 5 per cent from your mortgage lender if that lender is a bank or federal trust company.

Meanwhile, you’re free to borrow your down payment from a line of credit, personal loan or even a credit card. That’s right, if you’re creditworthy you can throw your down payment on a VISA at 20 per cent interest. Mind you, not all lenders allow this and the ones that do check that you can afford the extra debt payment.

One obvious problem with borrowing your down payment is the higher interest cost. Even if you use a line of credit, the interest rate on your down payment loan can be much higher than a regular mortgage, or have a riskier variable rate.

“Borrowing a down payment from less suitable sources is a potential issue,” acknowledges Gord McCallum, broker and president of First Foundation Inc. “Often times, with new mortgage regulations there can be unintended consequences that are worse than the problem they’re purported to solve, and this may be one of them.”

Getting a cash-back down payment mortgage
In many provinces, lenders that aren’t federally regulated (like credit unions) can still offer cash-back down payment mortgages. The few that actually do will give you 5 per cent cash to use for your down payment. You then need to cough up only your closing costs, which include legal and inspection fees, the land transfer tax and so on.

Not surprisingly, the interest rate on cash-back mortgages is well above a normal mortgage. But when you factor in the “free” cash, the overall borrowing cost isn’t that horrible. The main downside of a cash-back mortgage is that you have little equity cushion if home prices fall and you need to sell. And if you break the mortgage early, your lender can take back much or all of the cash it gave you.

Going forward, the days of cash-back down payment mortgages may be numbered. There is speculation that they’ll be eliminated in 2013–by either mortgage insurers, provincial regulators or both. For now, however, a handful of credit unions still offer them to people with strong credit, with Ontario-based Meridian Credit Union being the biggest such lender.

Vancouver condos

Using a gifted down payment
If you’re a young home buyer with a generous relative, you may be lucky enough to get your down payment as a gift. Most lenders will consider a gifted down payment if the donor is a parent, grandparent or sibling.

Unfortunately, while not an epidemic problem, it’s no secret that a small number of borrowers fraudulently claim their down payments as “gifts,” even though they fully intend to repay the money. That raises the risk level for lenders because the borrower’s debt obligations increase. Of course, both the borrower and giftor must attest in writing to gifted funds being non-repayable, but that is hard to police after closing.

RRSP Home Buyers Plan (HBP)
First-time buyers can borrow up to $25,000 from their RRSP as a down payment. But this is a very different kind of loan, for three reasons:

1. You’re borrowing from your own retirement savings, as opposed to a third party.

2. You don’t have to start repaying the loan until the second year after the year you make your withdrawal.

3. Even though Revenue Canada wants the funds paid back in 15 annual instalments, lenders don’t include those repayments in a borrower’s debt calculations. As a result, some people get approved for a mortgage only to find themselves caught in an annual cash crunch because they didn’t budget for their HBP payment.

The RRSP HBP comes with other perils. By draining your retirement savings, you risk losing years of tax-deferred investment gains. That’s a decision that some will later regret.

Moreover, any instalments that aren’t paid back on time are taxed as income in that year. And as many as one-quarter of HBP participants have missed or underpaid their instalments in the past.

Special lender and government programs
Various provinces and municipalities provide down payment assistance grants. These programs are typically for people with low or moderate income. Despite these borrowers being higher risk, in some cases, they’re permitted to buy a home with nothing down.

There are also specialized programs at individual lenders. For example, Canada’s biggest credit union, Vancity, currently finances an affordable condo project in Vancouver whereby it lends 90 per cent of the purchase price while the developer provides a 10 per cent second mortgage with no interest and no payments.

All of these down payment alternatives have one thing in common. They all come with some degree of added risk. It’s curious how Ottawa encourages people to have their own skin in the game, yet sanctions various substitutes to the traditional 5 per cent down payment.

If you do use one of these down payment alternatives, remember these two things: Buying a home without your own cash is not a decision to take lightly. And qualifying for a mortgage doesn’t mean can successfully carry one.

Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at VERICO intelliMortgage. You can also follow him on twitter at @CdnMortgageNews

11 Jan

Soft landing expected for Canadian Housing Market. Mortgage Market Update January 10, 2013

General

Posted by: Anne Martin

 

Neighbourhood Dominion Lending Centres
FSCO 11764 | Independently Owned & Operated
Mortgage Market Update
Date: January 10th, 2013  
Keeping you updated on Mortgage Matters

Market Update

Bond rates inched up the past week, resulting in a few lender’s raising their fixed rates by 5 basis points. We have 5 year terms available in the 2.98% range and 10 year terms from 3.79%. Variable rates are as low as 2.65%. 

If you have a variable rate of any more than prime +.75 or a fixed rate of 3.75% or more, we should explore the merits of refinancing to a lower rate.  It may result in savings of thousands of dollars and a longer term at today’s record low rates.  

  

Contact us for a free, no obligation review. Spending a few minutes could save you thousands of dollars. 

  

Bank prime is 3.00%


The next meeting of the Bank of Canada is on January 23rd, 2013.

  

P.S. If you, your family, or co-workers require guidance on current market trends, please call us, we are always available to help.  

….Anne

 

House_for_sale Bankers expect soft landing for Canadian housing market despite slowdown
 

The Canadian Press
Published Tuesday, Jan. 8, 2013 10:15AM EST
Last Updated Tuesday, Jan. 8, 2013 5:54PM EST

 

Canada’s real estate market remains “relatively solid” and should experience a “soft landing” despite the current slowdown and fears of overbuilding in the condominium segment, the country’s leading bankers said Tuesday.

 

Speaking to a RBC banking conference in Toronto, the country’s top bankers said they don’t expect a dramatic downturn like the one in the United States about five years ago.

 

The bursting of the U.S. housing bubble is considered a major cause of the credit crunch that swept Wall Street and then the global economy in the fall of 2008, after interest rates on sub-prime mortgages rose and defaults soared.

By contrast, sub-prime mortgages have been less common in Canada and real estate prices have trended upward for the most part — except for a few months during the 2008-9 recession and in some economically disadvantaged areas.

 

“Our expectation is that the overall real estate market in Canada is still relatively solid,” Royal Bank (TSX:RY) CEO Gord Nixon said Tuesday.

 

Despite reports that suggest Canadian housing is in crisis, he said the pullback is limited to a couple of markets, notably Vancouver.

 

“We have seen a slowdown in sales and we’ve certainly seen a slowdown in mortgage demand but price levels are relatively stable,” he said, adding that other than debt to disposable income, most indicators are in line with historic standards.

 

Historical Interest Rate Graphs 

 
Below you will find a feature which will give you current interest rate trends.interest rate graph It can also be accessed on our web site. I hope you and your clients find it useful..

 
 

Our Commitment to You 

  • Constant update of Market Conditions
  • Innovative Mortgage Products
  • Value Added Services
  • Unbiased Advice
  • Innovative Mortgage Strategies and NOT just Order Taking
In This Issue
Market Comment
Bankers expect soft landing for Canadian housing market despite slowdown…
Interest Rate Graphs
Quick Links

Anne Martin
 Anne Martin
Mortgage Agent
FSCO Lic. M10002257  
Neighbourhood Dominion
Lending Centres
FSCO Lic. 11764

39 Collier Street,
Suite 300
Barrie, ON  L4M 1G5

P: 705.720.1001 x225 or 1.888.500.1841
Direct: 705-791.6683
Fax: 705.739.1893 or 1.866.739.1893

Email
Visit My Website

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This email was sent to anne@ndlc.ca by anne@barriemortgagelocators.com |  
Head Office; Neighbourhood Dominion Lending Centres | FSCO 11764 | Independently Owned and Operated | 1140 Stellar Drive | Newmarket | Ontario | L3Y 7B7 | Canada
3 Jan

Mortgage Rates still fantastic. Will new mortgage rules create more renters? Mortgage Market Update January 3, 2013

General

Posted by: Anne Martin

 

Neighbourhood Dominion Lending Centres
FSCO 11764 | Independently Owned & Operated
Mortgage Market Update
Date: January 3rd, 2013  
Keeping you updated on Mortgage Matters

Market Update
Happy New Year


There were no changes to rates over the holiday season. 

If you have a variable rate of any more than prime +.75 or a fixed rate of 3.75% or more, we should explore the merits of refinancing to a lower rate.  It may result in savings of thousands of dollars and a longer term at today’s record low rates.  

  

Contact us for a free, no obligation review. Spending a few minutes could save you thousands of dollars. 

  

Bank prime is 3.00%


The next meeting of the Bank of Canada is on January 23rd, 2013.

  

P.S. If you, your family, or co-workers require guidance on current market trends, please call us, we are always available to help.  

….Anne

 

From the Financial Post
Garry Marr
| Dec 21, 2012 3:42 PM ET 

Consumers must be getting tired of hearing the experts cry wolf about rising interest rates and a housing crash.  

 

Rates haven’t moved much if at all for most terms, if anything they’ve fallen and stayed put. Mortgages still hover around 3% for anyone willing to lock in for five years and consumers have been doing that more than ever – some even opting for a 10-year commitment.  

 

As for the crash, is it happening? Sales have dropped sharply in some markets, Vancouver notably. But prices have remained relatively firm with the 25% drop predicted by many still not materializing. But even the real estate industry says price gains will be limited.

 

Not surprisingly, the real estate industry blames the government for the slowdown because of tough new mortgage rules that made it harder to borrow. Meanwhile, Finance Minister Jim Flaherty seemed more than content to create a so-called soft landing for real estate.

 

Will it lead to more people renting? It’s hard to imagine even more households buying as close to 70% of Canadians now own, but that’s what the real estate industry will be up against in 2013.

 

Historical Interest Rate Graphs 

 
Below you will find a feature which will give you current interest rate trends.interest rate graph It can also be accessed on our web site. I hope you and your clients find it useful..

 
 

Our Commitment to You 

  • Constant update of Market Conditions
  • Innovative Mortgage Products
  • Value Added Services
  • Unbiased Advice
  • Innovative Mortgage Strategies and NOT just Order Taking
In This Issue
Market Comment
Consumers must be getting tired of…
Interest Rate Graphs
Quick Links

Anne Martin
 Anne Martin
Mortgage Agent
FSCO Lic. M10002257  
Neighbourhood Dominion
Lending Centres
FSCO Lic. 11764

39 Collier Street,
Suite 300
Barrie, ON  L4M 1G5

P: 705.720.1001 x225 or 1.888.500.1841
Direct: 705-791.6683
Fax: 705.739.1893 or 1.866.739.1893

Email
Visit My Website

Like me on Facebook  
 
This email was sent to anne@ndlc.ca by anne@barriemortgagelocators.com |  
Head Office; Neighbourhood Dominion Lending Centres | FSCO 11764 | Independently Owned and Operated | 1140 Stellar Drive | Newmarket | Ontario | L3Y 7B7 | Canada