Survey Says-- You Want To Know More about Financing a Home

 

The #1 comment I get is -- I just want a simple mortgage !
Mortgages are far from simple mainly due to each mortgage being different because everyone has different circumstances. It is a big loan for a home, and Financial Institutions want to know they will get their money back. They are not interested in owning your home if a default should happen. It is more headaches for them.

1. So What Should You Do If You Want To Buy

Get your financial information in order.
- Make sure you have pay stubs, T4's, Assessment papers from your income tax
- Know what your savings are
- Got RRSP's - you may be able to use them for your down payment
- Know what you owe in credit cards, car payments, personal loans

2. Make an Appointment With a Mortgage Professional

A Mortgage Professional will help you get the needed information on financing a home for your circumstance. They cannot give you accurate advise without the accurate financial information. That is the main reason, they pull a credit score right away. It gives them the information needed on who you owe and how you have managed your credit in the past.

3.Your Credit and The Mortgage Professional Services

A home is a big investment. You will spend at least 15-25 years paying for your home. To predict if you are a good risk the Financial Institutions look at your ability to pay now and in the future, also by looking at your past in relation to your credit score and how you managed past credit.
Most people have had a rocky period when it comes to their past credit, due to unpaid cell phones, divorces, job loss, etc. That is just part of what happens in Life. The Financial Institutions understand that. That is why once you have had a hardship, you are able to build up your credit score once again.
Most clients I ask about their credit score, don't know what it is or how it applies to them. It is a huge mystery to most people. That is why it is so important to work with a mortgage professional, so they can guide you. If you go to a Bank, the conversation is yes or no. The mortgage professional on the other hand will advise you on what to do next. What can you do to get your home? A mortgage professional will let you know. The job of a mortgage professional in simple terms is to find you the best mortgage and to secure financing for your home.

4. What is Involved In Financing

-income -the ability to pay a monthly mortgage
-paperwork from the past 2 years-- Notice of Assessments, T4's, a record of savings or where the down payment will come from, bank statements, letter from your employer, credit report from your mortgage professional
-good credit score

5. Why Does It Say 5 Year Term/ 25 Year Amortization?

Is my mortgage paid off in 5 or 25 years?
A mortgage is usually long term so the correct answer would be 25 years. Because, the mortgage is so long in a time period, you have the ability to break it down into shorter terms to reflect the newer interest rates and the new options that have been put into place. A 5 year term is the most common term in a closed fixed mortgage.

Is That good?
It is nether good or bad. For right now the interest rates are low, when you renew in 5 years from now chances are you will be renewing at a higher interest rate. Although if you have had a mortgage previously and your mortgage is now coming due, you would be getting a lower interest rate then what you had previously. It is all about timing that no one can control.
For options that usually is better for you. We now have more liberal prepayment clauses then we did 5 years ago. It is always a good idea to talk to your mortgage professional about 3-6 months before your mortgage needs to be renewed. They will watch the market for you to time a better deal for renewing.


How Much Does A Mortgage Professional Cost?

The services of a mortgage professional is free. The financial institutions pay the mortgage professional when a mortgage is secured. So unless you have an extreme case, you will not pay for any of these great services. The mortgage professional will disclose to you at the start if they require payment for securing a mortgage for you.

When Buying a Home What Do I Pay For?

-Closing Costs-- lawyers, property transfer tax, home inspections
If needed-- home appraisal, well inspections, septic inspections
For closing cost a budget of 1.5% of the purchase price is usually enough to cover this expense.


Of course, if you should have a specific question please email or call me.

akroemer@mortgagegroup.com
1.250.650.4182

What's New With CHIP?

 

 

What is a CHIP Mortgage? CHIP Home Income Plan?

Through the CHIP Home Income Plan, homeowners 55+ can access up to 50% of the current appraised value of their principal residence. The exact amount available will depend on the age of the homeowner and his or her spouse as well as the location and type of home.

The funds are tax-free and there are no restrictions on how they can be used – with the exception that any outstanding loans secured by the home must be paid off. You might use the money to invest, to renovate your home, or simply to improve your lifestyle.

Homeowners can choose to take a lump sum or to receive payments over time. No regular repayments are required; the loan does not become due until the home is sold or both homeowners move out. Interest is added on to the original amount borrowed. When the amount is repaid, all remaining equity in the home belongs to the homeowners (or their estate).

You continue to own your home. There is no change in title. You also remain responsible for property taxes, home insurance, and all your regular household bills and home maintenance.

What's New With CHIP?

We have reduced our legal, closing & admin costs – to $0 where a client initially chooses a 5 year interest term; and to $795 where a client chooses an initial 3 year interest term.

How Does The CHIP Advances Get Paid Out

Just a reminder that CHIP clients have a number of different options for receiving their CHIP advances:

(1) can take the full amount approved all in one lump sum, or

(2) can take an initial lump sum ($20,000 minimum) and take the rest later (optional). They can take the rest in two ways: (a) in lump sum draws of at least $10,000 each time, and/or (b) as monthly draws of $500 and up (ie. like an income), or

(3) right from the start, they can take their full CHIP in fixed monthly/quarterly draws of at least $1,000

CHIP advances are not regarded as income for income tax purposes. So, they don’t affect any government benefits customers may be receiving.

These options # 2 & 3 might work well for those who are not comfortable with the risk involved in investing money for income; but would like to have extra monthly income. For example, clients who would like to be able to afford some in-home care so they can stay in their homes longer.

Want more information? Call or email
1.250.650.4182
akroemer@mortgagegroup.com

Pennies in 2013?

 

The Government of Canada announced in the Economic Action Plan 2012 that it will remove the penny from Canada's coinage system. The Royal Canadian Mint will no longer dispense pennies beginning February 4, 2013. However, the penny will continue to be used in cash transactions indefinitely for businesses that choose to accept them

Cash transactions where the penny is not available for use should generally be rounded up or down to the nearest five-cent increment in a fair and transparent manner after

the calculation of the HST.

Non-cash payments such as cheques, gift certificates, credit and debit cards will not be subject to rounding.

Credit Reporting Errors Costing Canadians

 

 

Consumers face higher interest rates, credit card denials after mistakes made

 

Have you been turned down for credit cards, loans or mortgages when you know you have a great credit history?  I did once.  Why was I turned down? Because somewhere along the way my birth date was changed at the credit bureau.  It was changed from August 21 to August 7.  Before this I was never denied for credit and the hardest problem is they won't tell you why you are being denied. I understand this concept but it does get harder to fix the problem. 

 I surfed the net trying to find out the most common mistakes- the answer was the birth date. So |I phoned Equifax up and they sent me the information they had on me.  Guess what? My birth date was X'ed out to protect me in case my mail was stolen.  I could not confirm whether my birth date was wrong, they would not tell me any information. So what do you do?  I looked over the information they did have on me that was not X'd out and decided, to go online and buy my credit report. 

That credit report came back with the wrong birth date. The fix was easy mail or fax back the right information , with supporting documents- copy of birth certificate.  After that no more problems for me.

I was lucky, because I had an easy problem to fix. The article below have people that are not so lucky.

A good rule to live by,  if you are preparing to buy a house, have your credit checked first, to make sure your credit report is accurate. Your mortgage professional can check your credit while you are still preparing to buy a home- 6 months before you are ready to search for a home, would be a good time frame.   How frustrating would it be to lose your dream home because of mistakes on your credit report?

By Alex Shprintsen and Annie Burns-Pieper, CBC News

Posted: Nov 19, 2012 5:22 AM ET

Credit rating mistakes are costing unsuspecting consumers thousands of dollars in higher interest rates and preventing some from getting much needed loans, a CBC News investigation has found.

In the past few years, more than 500 complaints have been filed with provincial consumer affairs agencies across Canada about credit reporting agencies, many alleging errors by companies led to their poor credit scores.

 

"I feel like a guy who is made to pay for the sins of something I didn't do," said Mervin Smith. "It's like being wrongfully accused of something."

• Smith is one of many Canadians who told CBC News about how unknown errors on their credit rating reports caused them financial strife. In some cases, even after creditors and collection agencies admitted to a mistake, it took several months to restore a credit rating.

The Brampton, Ont., truck driver, spent months trying to get his credit rating fixed after an error appeared on his credit report.

When applying for a mortgage in late 2011, Smith learned that an unpaid Rogers bill for a “Marvin Smith” had been listed on his report since 2007.

He says his bank granted him the mortgage but denied him an overdraft, a credit card and a line of credit.

Smith sued debt collection agency iQor in small claims court over the name mix-up and won a $3,000 settlement in May of 2012.

 

Despite that, his Equifax credit report still refers to him as "also known as: Marvin Smith."

"I just applied for another card and I got turned down again and I had perfect credit," said Smith.

Many Canadians affected

Dan Barnabic, a Toronto paralegal who has represented clients in credit disputes for the past seven years, said the impact of a false credit score can be devastating.

   "You are what your credit is," said Barnabic. "And when you discover something that actually does not belong to you…, that will actually prevent you from getting credit, it's devastating. It turns into a horrific situation that people lose sleep over."

Few statistics are available about how many Canadians know about mistakes on their credit reports.

Consumer Protection BC, a non-profit that oversees provincial consumer laws, says that in the past three years it has received 341 calls from people complaining about inaccurate information on their credit reports.

But many provincial consumer protection agencies don't track how many complaints about credit ratings are about potential errors.

A national survey by the non-profit Public Interest Advocacy Centre published in 2005 found that 18 per cent of the people surveyed had discovered inaccuracies in their credit report. Ten per cent of those who discovered the issue believed they were denied access to financial services due to the errors.

Barnabic estimates the number could be much higher. The Toronto paralegal says about one-third of his approximately 3,000 clients have found inaccuracies in their credit reports.

"On a weekly, daily basis people would knock on my door and say, 'Dan, I have a problem. I have something on my report that does not belong to me,' " said Barnabic.

Unaware of charges

 Under the credit reporting system, companies — such as phone service providers and banks — provide information about clients and their payment history to Canada's credit bureaus, such as Equifax Canada Inc. and TransUnion Canada.

Companies pay a fee for the bureaus to keep track of clients. In return, the credit bureau provides the companies with access to consumer credit reports, which is based on information gleaned from all its client companies.

When a bank is deciding whether to grant a mortgage, for example, the financial institution can access the individual's credit record via a request to the credit bureau.

Consumers can also request to see their credit rating but few do. A mistake can go unknown for months or even years, potentially leading to extra interest costs or other issues.

Joan Biseau, a hospital technician in Moncton, N.B., believes she is still paying thousands of dollars in extra interest on a vehicle she recently purchased after her credit rating was downgraded due to an error by Rogers Communication.

Biseau was unaware of an outstanding charge on her Rogers account until three years after the fact, when a debt collection agency began calling in February, 2011. Biseau promptly paid the bill when notified.

The telecom company had sent her last bill for about $200 to the wrong address and later admitted to the mistake.

Despite Rogers acknowledging its error, the black mark remained on her credit rating for more than a year.

Biseau says it forced her to get a high-interest loan on the 2007 Chevrolet Cobalt she bought in September of 2011, increasing the cost of her purchase by up to $10,000.

"It's terrible. I'm not a millionaire. And I need my car for work," says Biseau. "So I had to buy it … for $7,000. At the end of it, I’m going to be paying $17,000 for my car because of the high interest rates.”

The information about the owed debt was removed from the TransUnion and Equifax credit reports after CBC contacted Rogers and Equifax.

Calls for federal oversight

   In a written statement, Rogers said that its policy is to investigate immediately when a customer contacts them. "If there is a mistake, we have the issue corrected with the collection agency and the credit bureau or bureaus and get confirmation from the collection agency that the correction has been made," the written statement said.

Paul Le Fevre, Equifax Canada's director of operations, says the agency depends on correct information from its member companies. Mistakes are rare, he said, but when they do happen, the company needs the creditors who supplied the information to sign off on it.

"What we rely on our members to do, though, is to remove that information or amend that information accordingly within the electronic media that they send to us," said Le Fevre.

TransUnion also responded in a written statement, stating that it aims to "maintain accurate information on every consumers' TransUnion credit report."

Consumers can report items believed to be inaccurate by phone or email and the company will investigate it, the statement said.

 

Under current provincial consumer protection legislation, companies can face fines, but Barnabic says the fines are rarely, if ever, used.

 

The Toronto paralegal says the federal government should oversee the credit rating industry rather than leaving regulation in the provinces’ domain.

 

"Our elected government so far has showed very little interest in improving the system and actually getting the consumer on equal footing with the financial sector," said Barnabic.

 

He suggests modeling it on the U.S. system, where credit bureaus must by law investigate consumer complaints about disputed information on their credit rating report within 30 days.

Barnabic says credit bureaus should be forced to either delete errors immediately or face a hefty fine.

 

For your personal credit Analysis call or email

 

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

Fax: 1.888.679.0192

akroemer@mortgagegroup.com

www.KROEMERmortgages.com

Refinance Your Home For A Vacation Home In Spain

Spain Rolls Out The Red Carpet to Foreign Home Buyers-- Is this the time to buy a second home especially in Spain?




Protestors take part in a demonstration against the public payment of banks' debts in Madrid, October 13, 2012. The placard reads "Real Economy".

Photograph by: Juan Medina, Reuters

Beleaguered economy prompts country to offer a little bit more than a welcome basket of baked goods if you decide to move there

Spain — Looking for a new place to call home? Spain is hoping to give you a little bit more than a welcome basket of baked goods if you decide to move there. In an attempt to reduce the country’s bloated stock of unsold homes, the government is set to offer permanent residency to any foreigner provided they buy a house or apartment worth more than C160,000 ($200,000).
The plan, unveiled by Trade Ministry secretary Jaime Garcia-Legaz Monday and expected to be approved in the coming weeks, would be aimed principally at Chinese and Russian buyers. Spain has more than 700,000 unsold houses following the collapse of its real estate market in 2008 and demand from the recession-hit domestic market is stagnant.
Prime Minister Mariano Rajoy stressed Monday that the plan has not yet been finalized, but added that Spain “needs to sell these homes” and that getting them off the market could help revive the nation’s devastated construction industry.
The plan to unload the unsold homes comes as thousands of houses have been repossessed by banks and their owners evicted because they cannot pay their mortgages. The government last week approved a decree under which evictions would be suspended for two years in specific cases of extreme need.
The country’s residency offer would beat others in bailed-out countries such as Ireland and Portugal, where residency papers are offered to foreigners buying houses worth more than the C400,000 and C500,000, respectively. However, Latvia on the Baltic coast offers a cheaper deal, with property buyers eligible to receive residency permits if they purchase real estate in capital Riga worth C140,000 or C70,000 in the countryside.
Spain is in the midst of a double-dip recession with 25 per cent unemployment, though Rajoy said he believes Spain has managed to avoid a financial implosion and will start growing again in late 2013 and in 2014.
“I’m convinced that the worst is over,” Rajoy told reporters after meeting with Brazilian President Dilma Rousseff.
The stricken state of the country’s real estate market was highlighted Monday by figures from the Bank of Spain which showed that the level of bad debt in the country’s banks had risen to a record 10.7 per cent of their loan total in September.
The bank said the amount totaled C182 billion, up from C179 billion in August — the 15th monthly increase in a row.
The 16 other countries that use the Euro have agreed to lend Spain up to C100 billion to help support the country’s banks weighed down by these bad loans and investments. On top of the bank loan, Spain has been under pressure to apply for more outside financial aid to help it manage its debt and deficit. The European Central Bank has insisted on the move before it will make good on its pledge to buy the bonds of certain troubled countries to help lower their borrowing costs.
Spain says it is waiting to know all the conditions that might come attached to the rescue package before making a decision.

© Copyright (c) The Vancouver Sun

Footnote To This Story:
Many countries need help from foreigners to buy their houses. Want to buy a summer home in Spain or anywhere else? It can be as simple as refinancing your home in Canada to get the cash to buy a second home. For more information on refinancing your home call or email me.
akroemer@mortgagegroup.com
1.250.650.4182

Imagine leaving your home in Canada for your vacation home in Spain. Rent out the home while it is not used by you or a family member. Great mortgage helper.

CMHC Housing Forecast Weaker

 

CMHC Housing Forecast Weaker than Originally Thought


We all know there’s a softening going on right now in most Canadian housing markets. Homebuyers know it, home sellers know it, and now, CMHC knows it, too. While the Crown corporation has undoubtedly seen the softening going on for several months, now they’ve come out with a new forecast for the remainder of this year. And it’s not as optimistic as their last forecast was.

 

 

As you can see from the chart above, the numbers in most housing categories have gone down, albeit very slightly, from the previous forecast. Given the fact that most of these categories have to do with prices, it may or may not spell good news for the housing market, depending on your outlook.

• The number of existing homes to be sold this year, according to CMHC, will be about 465,600 – a drop of about 20,000 units from the organization’s forecast this past summer. While home sales being down doesn’t typically spell good news, this will bring demand down, which will also have an affect on prices (which is great!)
• Resale prices will drop by about $3,000 when sales for pre-existing homes fall to an average of $365,100.
• Average mortgages on new homes will also fall to about $370,500, about $6,800 lower than what was estimated. This could be very good news, as prices are simply too high right now and keeping too many out of the market.
• In 2013, CMHC predicts that up to 489,700 units will be sold; that’s up by about 2,100 from their earlier forecast.
• Housing starts for this year will be somewhere in the range of 210,800 to 216,600. That’s slightly higher than the previously forecasted range of 196,800 to 217,000. Next year that range is going to drop from 2012′s number though, as it’s expected to be only 177,300 to 209,900 starts.

Think this bodes bad news? It really all depends on your perspective. If you saw our housing market this past year as being a healthy one, yes, the results are probably a bit disappointing. But truthfully, the drop in numbers is going to help us all. As prices go down, more options are opened up and more people can get back out on the market (such as all those that have been patiently waiting for prices to drop.) It also means that there will be more competition on the market, but this time it could be among sellers trying to get buyers to their properties – which is great for anyone looking to buy!

And there’s also the fact that the housing market isn’t the be-all-end-all of Canada’s economy. Yes it does make up a large portion of it, but we do have other supporting factors we can rely on. Mathieu Laberge, deputy chief economist at CMHC, says, “A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year.

He also says, “Nevertheless, employment growth and net migration will help support housing starts activity going forward.”


Kate10 November, 2012, 4:00 pm

Get a Mortgage in British Columbia to Buy US Property

Angela Kroemer – The Mortgage Group

Your British Columbia US Property Financing Expert

TMG The Mortgage Group
Vancouver Island, British Columbia
Cell: (250) 650-4182
Toll Free: 1-888-679-0190
Toll Free Fax: 1-888-679-0192

British Columbia Mortgage Financing

---

Angela Kroemer
TMG – The Mortgage Group

British Columbia US Real Estate Financing Expert

Angela Kroemer is a BC Mortgage Professional with TMG The Mortgage Group Canada Inc., serving clients from Victoria to Port Hardy on Vancouver Island and in all areas on the mainland such as Vancouver, Surrey and Kamloops.

Background in Business Administration to Find You a Great Mortgage

Angela received her Business Administration , majoring in Accounting in Ottawa and moved to The Comox Valley, British Columbia (BC) where she worked with smaller companies. Angela enjoyed working with these companies as she worked side by side with the business owners, creating not only business relationships, but also lasting friendships.

Your British Columbia Mortgage Group Specialist

Now working with TMG, The Mortgage Group Canada Inc in British Columbia, Angela has access to products and rates of over 50 BC mortgage lenders, can work with you to develop a plan, specifically suited to you and your situation. Whether you are purchasing a new home in the US or Canada, refinancing a mortgage, or extracting equity for an investment such as real estate in the United States. Angela can help you find your perfect mortgage by providing you with unbiased advice. Your bank or credit union has one set of mortgage products and mortgage rates to offer, giving you only one choice.

British Columbia Mortgage Brokers Gaining Popularity!

We’re growing – In Canada, approximately 1 in 4 mortgage borrowers are using a mortgage broker, and almost 1 in 3 in British Columbia (BC). Angela’s clients include average families, professionals, first time buyers, self employed workers, vacation home buyers, rental home buyers, and clients from all backgrounds.

Member of the Canadian Association for Accredited Mortgage Professionals (CAAMP)

As a member of the Canadian Association for Accredited Mortgage Professionals (CAAMP), Angela has met academic requirements for licensing, and is governed by strict professional rules of conduct designed to ensure that the advice given is impartial and meets the needs of all her clients. As well as a member of CAAMP, Angela has received the Accredited Mortgage Professional (AMP) designation. AMP Mortgage Brokers are well trained, well informed and committed to providing you with the advice and choices that fit your situation. AMPs are required to complete ongoing education which ensures they are up to date on all aspects of their profession. Licensing is not required of most mortgage representatives in Banking Financial Institutions and thus you are not receiving the same expertise as you would with a British Columbia licensed mortgage professional like myself.

Becoming a British Columbia Mortgage Professional is one of the best decisions Angela has made. It is a remarkable field, getting people into their dream homes, saving clients thousands of dollars from lower interest rates or better options such as better prepayment options, so they can be mortgage free years faster. Mortgage rules are always changing and as a BC Mortgage Professional you must adapt to those changes. It is like a puzzle that you must fit all the pieces together to get the best mortgage options and rates. I enjoy the challenge as well as meeting people from all over British Columbia.

Whether you live in Victoria, Vancouver, Comox Valley, Kamloops, Surrey, or Kelowna, Angela Kroemer and The Mortgage Group can guide you to a plan that works for your US real estate property purchase anywhere in the United States.

Contact Your British Columbia Mortgage Specialist To Discuss Your Options

Contact Your British Columbia US Real Estate Financing Expert to discuss your options to finance a property in the United States. If you are considering a second home or investment property in the United States, you probably have a significant amount of equity in your Manitoba home which could be used to make a low cash offer in the US city of your choice!

 

 

 

http://canadabuysouth.ca/mortgages-to-finance-us-property/british-columbia/?goback=%2Egde_3095873_member_184537221

 

 

 

Benefits of Caffeine

Caffeine Increases Ability To Recognize Positive Words

As any coffee drinker will tell you, the day immediately begins to feel better after taking that first earthy, faintly bitter sip o’ joe from the edge of a steaming cup.

A new study from German researchers reinforces the positive aura swirling around the magical brown elixir as they have shown that caffeine can increase a person’s ability and speed in recognizing words with a positive connotation. The study also shows that the stimulant had no effect on recognizing words with negative or neutral connotations, like ‘wall’ or ‘table’.

Previous studies have shown that a normal dose of caffeine boosts performance on straightforward cognitive tasks and behavioral responses. Other studies have shown some memories are enhanced when strong emotions are associated with specific trigger objects, but there has been no clinical link between caffeinated performance and emotional triggers.

To examine this potential link, the researchers recruited 66 people between 19 and 32 years old. Each participant was given either 200 mg of caffeine or a placebo and then seated in front of an LCD monitor where they were presented with uppercase letter strings for 150 microseconds at a time. They were instructed to decide as quickly and accurately as possible if the presented letter string was a German word or not. Participants pressed the left mouse button to signal that it was a word and the right mouse button to signal it was not.

The results showed that those participants who were given the caffeine were able to process the positive words more quickly and accurately. This was likely the result of the well-documented link between caffeine intake and dopaminergic transmission, of the effects of dopamine on the language-dominant regions of the brain.

“Caffeine is a psychoactive substance that in low doses blocks the inhibitory adenosine receptors in the brain, thereby functioning as an adenosine antagonist,” the scientists wrote. “This antagonist behavior leads to an increase in central nervous activity most probably via an increased dopaminergic transmission due to multiple interactions with dopamine receptors in dopamine-rich brain regions”
This latest study, from researchers at Ruhr University, can be filed under pro-caffeine as the legal stimulant seems to constantly be on the receiving end of conflicting clinical studies. Previous research has shown that too much caffeine can lead to sleep problems, high blood pressure, and addiction.

Caffeinated energy drinks have even been implicated in death as the FDA has recently disclosed that it has received reports about five deaths since 2009 may be linked to Monster Energy drinks. This has led to further investigation and calls for scrutiny of the caffeinated beverage industry.

Despite those grim reports, many studies have shown some benefit to moderate caffeine intake. A 2007 study found that coffee drinkers might even reduce their chances of dying from heart disease. Another study found drinking coffee may reduce the risk of developing prostate cancer. In that study of nearly 50,000 men, those who drank coffee the most were found to have a 60 percent lower risk than those who did not.

Source: Brett Smith for redOrbit.com - Your Universe Online

Our Low-Interest Rate Environment

Our low-interest rate environment

Where are interest rates heading and when will they start to move? This has been the hot topic of conversation for the past two years and it looks as if it will continue until rates finally start moving and everyone can exhale and say, "yes, there, we knew it." Or consider this: Can we just accept that low-interest rates are now the norm, since we've been in this environment since 2010, instead of trying to second-guess what the Bank of Canada will do every month? In a recent report by CIBC's Chief Economist, Avery Shenfeld said maybe it is time for a new message. It's easy to forget that the housing market has been a vital component to the success of the Canadian economy during the past decade. In many respects, the industry has helped to stabilize a faltering economy. Consumer spending and confidence remains high - a large of part of that comes from allowing consumers to take advantage of low interest rates and to tap into their equity for either spending or investing purposes. Yes, the government in Canada has had to keep our economy afloat during the recent recession first, by injecting billions of dollars in spending into the economy and second, by instilling a degree of confidence in Canadians and investors by tweaking credit guidelines. However, at the end of the day, it still comes down to actions taken by every day Canadians who put their faith in their ability to repay loans, their ability to manage their household debt, and through consumer spending, that is pulling us through. We are very fortunate to have weathered the recession as well as we have. However many Canadians are still worried. They are worried about rising rates, they are worried about the possibility of decreasing home values, and they are worried about their ability to save for the future. Let's look at recent messages from Bank of Canada's Mark Carney. He delivered the message that consumers will pay more in the future for what they borrow today. The latest economic news is positive for a growing economy going into 2013, which will make it easier for Carney to raise the rates. However, recently Carney backtracked slightly and has hinted that rates are not likely to rise until later in 2013 and/or into 2014. He also said that he sees no "imminent" changes ahead, but that "over time, rates are more likely to go up than not." The latest Housing Market Outlook reports that although slight increases are expected in 2013, rates will remain low by historical standards. Inflation is another reason rates could rise. Canada's inflation rate is sitting at approximately 1.2% - the lowest level in more than two years. If this should start to rise past Carney's 2.5% benchmark then rates could rise. The retail sector is a good indicator about consumer confidence and the state of the economy. New research from Ernst and Young predicts that 2012 holiday retail sales in Canada are expected to increase by 3.5% over last year. It's clear that Canada's economy continues to expand and that we are operating on sound principals. According to Carney, Canada is no longer in the recovery stage but in the expansion phase. That is good news for all economic sectors. Will interest rates go up? They will, but likely not until late 2013 so as not to negate any of the positive effects of a growing and expanding economy.   About The Mortgage Group Canada Inc. TMG Canada is an innovative and progressive mortgage brokerage company. With mortgage professionals serving 9 provinces and 3 territories, TMG is national in its reach helping Canadians navigate their unique mortgage options with over 50 lenders. TMG has a network of more than 800 mortgage brokers and agents and has helped more than 200,000 Canadians arrange their mortgages in the past 20 years.

Canadian $20 Polymer Banknote

Today the Canadian government officially introduced the $20 polymer banknote. Unlike the rollout of the polymer $50s and $100s, the old $20s will not immediately be taken out of circulation. As the new polymer notes start making their way into the bank's branches over the coming weeks, they will be accepting both types of bills.

Be careful with these bills as they have a way of sticking together, and since they are so thin, it is hard to tell.

Will Your Mortgage Retire With You?

 

 

 

This Scotia Bank Poll Found out that 1/3 of Canadians believe they will still have their mortgage once they retire.
That will be a huge portion of their retirement income spent on a mortgage.
Read poll below:

Snapshot: Canadian mindset on mortgages

Some Canadians with mortgages think they might carry them into retirement

TORONTO, Nov. 5, 2012 /CNW/ - According to a recent Scotia bank poll, the role of the Canadian home is key, with the majority of Canadians (77 per cent) indicating their home is an investment rather than an expense. The investment may extend beyond retirement for some; among those mortgage holders not yet retired, one-third (32 per cent) say they will likely still have their mortgage when they retire. That said, Canadians are eager to leave their mortgages behind, with almost three-quarters (72 per cent) of Canadian mortgage holders taking at least one step to becoming mortgage-free faster. When it comes to mortgage-mindset - Canadians are thinking in the right direction:

• Two-thirds (69 per cent) of Canadians report owning a home. For Canadian home owners, 40 per cent are living mortgage-free.
• The majority (81 per cent) of Canadians agree it is important to become mortgage-free as soon as possible.
• The most common step Canadians are taking to pay off their mortgage faster is to increase the frequency of their regular payments (29 per cent).
• One-third of Canadians (34 per cent) say they will be relying on their home equity to support them in retirement.

HOW TO PAY OFF MORTGAGE FASTER

--- The easiest way is to make accelerated biweekly payments-- there is only a few dollars difference but it will make a difference in years.
This Chart shows you how much you can save
Example: monthly vs. accelerated biweeklyJohn is trying to decide between paying his mortgage monthly and paying accelerated biweekly.
Details

• mortgage principal: $150,000
• amortization: 25 years
• interest rate: 5.45% for the entire mortgage amortization period.

Monthly and Accelerated Biweekly Payment Comparison

	Monthly	Accelerated biweekly
Number of payments per year	12	26 (52 weeks a year ÷ 2)
Payment	$911	$456
Total payments per year (principal and interest)	$10,932	$11,856
Principal paid over the amortization period	$150,000	$150,000
Interest paid over the amortization period	$123,368	$102,113
Interest saved	-	$21,255
Number of years to repay the mortgage	25.0	21.3
Years saved	-	3.7

With the accelerated biweekly payments, John will pay off his mortgage 3.7 years faster and save more than $21,000 in interest.

---Make Use of Your Prepayment Options: Monthly and or yearly
Mortgage prepayment options outline the flexibility you have to increase your monthly or lump sum yearly mortgage payments without penalty. The monthly prepayment provision is a percentage increase allowance on your original monthly mortgage payment, while the lump sum provision allows you to put money towards your mortgage principal. According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), 28% of Canadians took advantage of prepayment privileges in 2010.
Many lenders have 15/15 or 20/20 prepayment allowances usually on the original amount of the mortgage and they will accept as little as $100.00 per each prepayment. So you do not have to save a lot to take advantage of the prepayment programs.

----Keep Tabs of Current Interest Rates
Sometimes even with a penalty it makes sense to break your mortgage and go with a lower rate.

By setting some more money aside for extra mortgage payments, it can shave years off of your mortgage, and will let you retire without a mortgage payment, a winning combination.

Time for a mortgage Checkup?
Call me and I will check your mortgage and let you know what you can do to shorten your mortgage thereby saving you money and years off your mortgage.
This is a free service.

 

 

 

 

 

 

 

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

Fax: 1.888.679.0192

akroemer@mortgagegroup.com

www.KROEMERmortgages.com

 

I Remember - Veterans' Week

I Remember - Veterans' Week


http://veterans.gc.ca/eng/remembrance/iremember

10 Easily Avoidable Factors That Devalue A Home

As blogged on freshome.com, Buyers have an upper hand when purchasing a home in a down market with limited inventory. As they survey the market, it's important, as sellers to have the best possible product available. In order do to that, you need to avoid factors that will devalue your home. Many times, it is the buyer's perception that influences whether they walk away or offer a seller less than an asking price. Before you decide to list your home for sale note these ten factors that will devalue your house and make changes as you can.



Buyers have an upper hand when purchasing a home in a down market with limited inventory. As they survey the market, it’s important, as sellers to have the best possible product available. In order do to that, you need to avoid factors that will devalue your home. Many times, it is the buyer’s perception that influences whether they walk away or offer a seller less than an asking price. Before you decide to list your home for sale note these ten factors that will devalue your house and make changes as you can.

1. Lack of Curb Appeal

The first thing any prospective buyer will see as they approach your home is the front of the home. Everyone wants to live in a home that is beautiful on the outside as well as the inside. A poorly kept landscape, whether overgrown, or non-existent will turn a buyer off. They may fear the cost of redoing landscaping, or be overwhelmed at the thought of it. This undoubtedly will affect the perceived value of your home. By planting a few annuals, keeping the grass cut and weeding the flowerbeds regularly you will improve your curb appeal. Front landscaping that is welcoming and has good visual appeal will keep a buyer interested in your home.

2. Exterior of the House

Chipped or faded paint, dirty windows, broken railings or busted sidewalks will all devalue your home. Just as a buyer will notice the front gardens, they will also notice the disrepair of the outside of your home. Buyers may wonder if the exterior is so neglected, what has been neglected on the interior. If selling your home is in your future, invest in a fresh coat of paint, wash the windows, and repair any issues with your walkways. Potential buyers will notice the pride you take in your home and will reflect in their offer price.

3. Outdated Kitchens

Kitchens can make or break how buyers will perceive your home. They want to walk in and fall in love with your kitchen. Moms want to be able to envision making cookies with their kids or perhaps hosting dinner parties. That vision will not work for them if the kitchen is dark, dingy, or outdated. There are two ways to update a kitchen. A full-blown renovation will update the space to a buyers liking, but at a substantial cost. The good news is you will reap close to a 90% return on investment. A fresh coat of paint on the cabinets, new door pulls and fresh laminate on the counter tops are all options for a small budget.

4. Outdated Baths

Outdated bathrooms are certain to affect the sale of a house. Buyers want updated baths just as they want updated kitchens. If you are able to renovate the bathroom from top to bottom, you should recognize an 80% return. If not, make small changes to update it. Add new the fixtures, new lighting and if your budget allows, tile the floor. No matter how you update the space, a buyer should walk in to a bathroom that is clean, fresh smelling and decorated nicely. These simple changes will do a lot for the buyer’s perception of the space.

5. Taste Specific Decorating

Taste is subjective when it comes to decorating a home. What you may love, a buyer may hate. Buyers want to see themselves in the space, and if they walk in to a home with, red walls, shag carpeting and wood paneling, they will have a hard time envisioning themselves living there. Instead, they will see the cost of replacing carpeting, and tearing down the paneling. All of these factors could cause a buyer to offer less than the asking price. Before you sell, paint your home a more neutral color that has a broad appeal.

6. Design Specific Renovations

Have you ever wandered into an open house and wondered what the owners were thinking as you faced an ultra-modern kitchen or a futuristic fireplace. These design choices will be difficult to sell to the average buyer with a more mainstream style and most buyers will be thinking about ripping out a kitchen and redoing it to their liking. It will take someone with a similar aesthetic to be interested in a home with such design specific features. Keep that in mind when you contemplate any renovations.

7. DIY Projects Gone Awry

DIY projects can be fun to do, but if you riddle your home with projects that are half-done or poorly done, buyers will cringe at the thought of redoing projects or hiring someone to complete them. Buyers who see dollar signs will either walk away or deduct from their bid. A general rule of thumb is to hire someone for a project if you lack the confidence it will look professional.

8. Pets

Pets are wonderful additions to a home, but bring unwanted issues when trying to sell. Damage to walls, carpeting or woodwork needs repair before you list the house. A good carpet cleaning will lessen the smell of pet odors too. Buyers would rather not move into a home that has lingering evidence of pets, especially if they have allergies. So, farm Fido out while the home is on the market to ensure the best offer you can get.

9. Wasted Square Footage

We like our home to work with our lifestyle and to accommodate specific interests or needs we may turn a bedroom into a closet, or a garage into a gym. While these highly personalized spaces work for a homeowner, the perceived wasted space is a turn off for most buyers. Ultimately, the missing square footage detracts from the value of your home. Changing the space back to its intended use is a huge endeavor; buyers may focus on cost of such a project.

10. Water Features

You may love your pool, covet your hot tub or adore that waterfall, but for a buyer water features are another expense that will be incurred to maintain the home. Over time, in-ground pools will need to be resurfaced and resealed at an additional cost to the buyer. Families with small children will see the pool as a potential danger as well. A buyer may love everything about your home, except the pool and request it removed or filled in before closing on the sale.
From kitchen renovations to wasted space it’s the simple things that devalue your home, with a little forethought and practicality you will reap the most value from the sale of your home. How would you avoid these factors that devalue a home?

B-20 Mortgage Brokers will get Friendly With Their Credit Unions

B-20 Mortgage Brokers will get Friendly With Their Credit Unions

B-20 formally came into full-effect this week, but  mortgage brokers  have learned to live with the stricter underwriting guidelines from OSFI months ago and have even put a positive spin on it.

_{The guidelines cover banks that are federally regulated but we have access to many more lenders that are not under OSFI.}

 

_{Earlier this year, OSFI said it would compel federally regulated lenders to implement a series of lending changes by their fiscal year end (October 31 for most banks). Among those changes were: reduction of HELOC loan-to-value from 80 per cent to 65 per cent; the elimination of 100 per cent financing, aka 5-per-cent cash-back mortgages; and the requirement that variable rate mortgages and mortgages with fewer than 5 years, must now be qualified using the mortgage qualifying rate or contract rate.}

 

_{A few weeks from now, when more borrowers get turned down by the banks, brokers will probably see more business.}

 

_{Many federally regulated banks and some monolines began implementing the changes well before the October 31 deadline, other lenders like ING Direct have until the end of 2012 given fiscal years that end December 31.}

 

_{It’s getting harder for some borrowers to get a loan. The new rules affect maybe 10 % of clients looking for a mortgage, but Brokers can still get the loans from other lenders.}

_{The situation has led many brokers to take some of their deals to credit unions, which traditionally haven’t traditionally been a mortgage professionals first stop.}

 

 _{Previously credit unions were not very popular among many brokers because clients preferred to borrow from the better-known banks. Credit unions also typically require borrowers to appear personally at the lender’s office and become a member of the credit union before getting a loan.}

 

_{Credit unions are now ideal for borrowers seeking an 80 per cent LTV on a HELOC, require a 5-per-cent cash-back mortgage or need to qualify for a one- to four-year term mortgage at the posted rate.}

 

 

_{For more information on the new rules or to qualify for a mortgage , give me a call.}

 

 

 

 

Look Who's Talking .....And Borrowing

Canadian goverment debt has risen much faster than household debt since 2008

John Shmuel | Nov 1, 2012 10:44 AM ET | Last Updated: Nov 1, 2012 11:36 AM ET

Chastising Canadian households for their high levels of debt is a favoured past time of economists and policymakers in this country. But a new report from BMO Capital Markets argues that more of the chastising should be focused at government debt.

“In the past two years—when the hectoring of households began in earnest—public sector debt has risen much more notably than household debt,” said Douglas Porter, deputy chief economist of BMO Capital Markets.

Mr. Porter points out that since 2008, when the financial crisis broke out, government spending has risen much more quickly than household debt. Before that, rising household debt was actually on par to surpass government debt as a percentage of Canada’s gross domestic product. Check out the graph from BMO Capital Markets below:

 

 

To be fair, the blame can’t be placed solely on Ottawa. The Conservative government has reduced its budget deficit and debt-to-GDP at the federal level has stabilized in the last year. Unfortunately, however, provincial governments have not done the same. The chart below from BMO shows how other levels of government in Canada continue to see their debt levels rise:

 

The rise in provincial debt is happening even as provincial budgets are reporting smaller deficits. As Mr. Porter points out, it is not the budgets you need to pay attention to, but rather the bottom line build up of net provincial debt. And hidden in that debt build up are things like capital spending programs, which may not be immediately reflected in annual budgets.

All this is happening while households appear to be finally cutting down on debt.

“On the household side, there are plenty of signs that debt growth was moderating on its own accord, even before Ottawa’s latest tightening of mortgage rules in July,” said Mr. Porter. “Total household credit slowed to a 5.6% year-over-year pace in the third quarter, from 6.3% a year ago.”

And while Canadian debt levels are still unnervingly high — the latest data from Statistics Canada showed household debt-to-income hit a record 163.4% in Q2 — government debt is also uncomfortably high.

“Canada’s hefty current account gap (4.1% of GDP in Q2) warns that the economy is living beyond its means,” said Mr. Porter. “The current account—merchandise trade, services, and investment income—morphed from a steady diet of surpluses from 1999-2008 to a string of deficits of 3% of GDP or more, a level not seen since the early 1990′s.”

Of course, we all remember what happened to Canada in the 1990′s following the massive amount of debt the country built up, leading the Wall Street Journal to call Canada an “honorary member of the third world.”

With that in mind, Mr.Porter says it would be more productive for the debt debate in Canada to include governments as much as households.

“The focus should be less intense on households, and instead directed at the broader public sector,” Mr. Porter said. “After all, when governments point the finger at households, they should recall there are four more pointing back at them.”

 

 

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

Fax: 1.888.679.0192

akroemer@mortgagegroup.com

www.KROEMERmortgages.com

 

 

Are You Prepared For Higher Mortgage Rates?

 

 

Luckily you probably won't have to worry about that until 2013, which is fast approaching.

Have you got a plan ready for action?

The questions you could be asking yourself is:

 

How high can my mortgage payments become before it is a problem ?

How high can interest rates raise before I cannot afford my mortgage?

Should I get a mortgage now and lock in for 5 years before the rates raise?

When I renew my mortgage after the rates have been raised will I be okay with my new mortgage payments?

If housing prices fall and rates raise will I have enough equity in my home to renew with the different scenarios?

 

There are many different ways to plan for this uncertainty, which will create a great outcome.  You can not control the interest rates or the housing market.

But, you can control your personal debt, your personal expenses and to some degree your wage.

Do you need to get those credit cards paid off?

Do you need to stop eating out so often and saving money that way?

Do you need to look for a better paying job?

 

OR

Look into  getting locked in for a low 5 or 10 year term now?

That way you will have at least another 5 years of low mortgage payments that fits with your budget and lifestyle now.

 

Change is coming.

How will you deal with it?

 

Not very many people find household finances a lot of fun.

If you would like to go through the different scenarios, I am here to help and go through those scenarios with you.

You know what you are most comfortable with and I know how to get you those answers.

 

Plan For The Future

With a solid plan put into place now, this will save you lots of stress, time and money in the future.

 

This is a free service, no obligation. 

Call me and lets get the planning done now.

 

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

Fax: 1.888.679.0192

akroemer@mortgagegroup.com

www.KROEMERmortgages.com

 

 

 

 

 

 

 

 

 

 

 

New Rules -- Unregulated Prepaid Credit Card Market

Canadian government moves to regulate prepaid credit cards, ban expiry dates

Ottawa is stepping in with new rules for the largely unregulated prepaid credit card market.

Finance Minister Jim Flaherty is to announce Wednesday that in the future, issuers of prepaid cards will not be able to impose expiry dates and must be up front about hidden fees and conditions.
The move is part of the government's expanding code of conduct measures to govern credit and debit transactions, that had previously not applied to the relatively new prepaid market.
While still a small segment of the market, prepaid plastic has become an option for consumers without conventional credit or debit cards, young adults, and for parents who want to introduce their children to using credit while limiting the risk of theft and over-spending.

But the sector has also faced criticism for exorbitant hidden fees that reduced their face value and fooled customers. These can include monthly or annual fees, maintenance costs, as well as ATM charges.
The most notorious example occurred two years ago when Hollywood celebrity Kim Kardashian backed away from endorsing a prepaid card bearing her name after a public outcry over the card's usage fees, including a close to $60 activation fee.
The card even grabbed the attention of the attorney general of Connecticut.

The new regulations in Canada would require an information box disclosing the fees displayed prominently on the exterior package and other documentation prior to issuance.

A government official said the measures are in response to concerns about some features of prepaid cards issued by large financial institutions, adding that in some products, "terms, conditions, fees and limitations" were not always made clear.
The official said the government wants to make sure consumers know what they are agreeing to before making the purchase.

 The Canadian Press October 23, 2012