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.

What can a CHIP (Canadian Home Income Plan-reverse mortgage) do for You?

CHIP stands for Canadian Home Income Plan. What is the purpose of this plan? This plan is a tool for people 55 years or older to take out equity from their house, without having to sell their home and you get to stay in your home CHIP Eligibility Homeowners 55 and older No medical qualification No income or credit requirements How much can I get? Depending on your age, about 50% of the home's value. Money can be received as a lump sum or over time payments Funds are not taxed as income Interest expense may be used to reduce taxes on investment income Repayment? No repayment is need until the house is sold or both owners move out You have the option to repay the principal and interest in full at any time. Ownership and Title? Owner maintains Title You can move or sell at any time Amount to be repaid is guaranteed not to exceed the fair market value of the home at the time it is sold. Some scenarios in which a CHIP plan may work? -You retire your pension is not as good as you thought it would be, leaving you with very little money to enjoy your retirement. -You retire and still have a small mortgage in which you want the mortgage paid out. Giving you more monthly income -Your spouse passes away cutting your retirement income in half. -Your health needs special attention -you need to hire a nurse for in home care, special equipment -walkers , wheel chairs etc. You can pull money (equity) out of your house to pay a nurse to help you, instead of going into a expensive seniors home. -You and your spouse divorce or separate and you need to payout the spouse for the house -Repair your home with needed updates and retro fits to suit your comfort and safety in your senior years -Cannot qualify for a mortgage because retirement income is too low. - Call me to inquire if a CHIP plan may be useful for you or your senior parents. As you can see there are many reasons why a CHIP is useful. The main purpose of the CHIP plan is to keep you in your home where you want to be. Each person has unique circumstances, Call me to see if a CHIP plan will work for you. 1.250.650.4182One more reason why a CHIP plan may work better for you Seniors' homes are expensive, costing around $3000.00/ month. Many seniors want to stay in their family homes where they are most comfortable. For more information click here Rates Mortgage Tips Resources Credit Blog Categories 365 Things To Do In Campbell River 365 Things To Do In The Comox Valley Comox Valley Tidbits and Other Stuff Mortgage Market Updates and News Real Estate For Sale By Owner Recent Posts What can a CHIP (Canadian Home Income Plan-reverse mortgage) do for You? Comox Valley takes its place in the history book Harvest dinner in Cumberland Sunday Banff Mountain Films return with tale of survival CHARITY YARD HAUNT

Know The Sources of CO in Your Home

Carbon monoxide has taken the lives of entire families, left scores of people with debilitating physical and mental handicaps, and, sent hundreds more to hospital. So why do so few of us have the one inexpensive safety device in our homes that protects us from this deadly gas?

Carbon monoxide safety comes down to awareness and education. First realize the danger is very real. Second, you need to know the potential sources of CO in your home. Many people think they don’t need a carbon monoxide alarm because they have electric baseboard heaters. But they may have a gas water heater or stove, a gas or wood fireplace, or a garage or carport attached to their house. All these are potential sources of CO.

So long as carbon monoxide is vented outside, there is no danger. But if appliances or heating systems are not properly maintained, or chimneys and vents become blocked or cracked, deadly CO can seep back into your home…and you won’t even know it.

And since exposure to CO mimics the flu, many people make the mistake of thinking the symptoms they are experiencing will just “go away” in time. So they stay home from work or school hoping to get better, when exactly the opposite happens.

Installing protection is easy and inexpensive. You can find CSA-approved carbon monoxide alarms in any hardware store that cost on average about two cents a day to operate over their lifespan.
Installing one CO alarm per floor is recommended by the National Fire Protection Association but, at a minimum, install one outside all sleeping areas. Canadians seem to prefer models that feature a continuous digital readout.

A digital readout shows you any level of CO in your home so you can take action before the gas reaches dangerous levels. Look for models where the display is continuous, not models where you need to physically push a button to get a reading. That way you get instant peace of mind every time you glance at the alarm and see its zero reading.

What are some common sources of carbon monoxide in the home or workshop?

Most carbon monoxide produced in homes comes from combustion of fuel for heating and cooking.
 CO may accumulate in the home when a blocked chimney, broken chimney flue, or damaged furnace heat exchanger allows gases to enter the home. It can also enter the home from the garage when an automobile, lawn mower, or other engine is in operation. Backdrafting chimneys and flues (common when ventilation fans are used in tightly sealed homes) may allow combustion gases, including carbon monoxide, to enter the home.
Gas stoves and ranges can produce CO, which can present problems if the appliances are used for prolonged periods or if they are not operated properly. Gas ranges are not intended to be used to heat the home. Some other common sources of carbon monoxide include unvented fuel burning space heaters and indoor use of charcoal for heating or cooking. (Note: charcoal should NEVER be burned indoors.)
Never run a generator in the home.

Posted on September 1, 2012 in Safety Updates

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What's in a Title?

What is a Mortgage Professional?

A mortgage professional is a sub-broker. Since the name sub-broker doesn't sound so great, other names used by a sub-brokers are mortgage professional, consultant, agent, specialist and the list grows. We must pass an education program as well as an exam. We also must be licensed in our province.

We are governed by FICOM The Financial Institutions Commission which is a regulatory agency of the provincial Ministry of Finance.
FICOM is responsible for administering nine statutes that regulate the pension, financial services and real estate sectors in British Columbia. The primary focus of this regulation is to ensure that:

• Institutions and pension plans in these sectors remain solvent;
• Market conduct requirements for these sectors are respected;
• Unsuitable individuals do not participate in financial service markets; and
• Through the Credit Union Deposit Insurance Corporation (CUDIC), insure credit union deposits and non-equity shares.

To keep this explanation simple:  A mortgage broker is the company we work for. A mortgage broker over sees the sub-brokers. A mortgage broker in Canada has an overwhelming amount of paperwork, that is why there is more sub brokers then brokers.

Bank representatives are neither mortgage brokers or sub-brokers. They are trained by their bank that they work for.  They could not broker a mortgage as brokering means more than one.  They only sell what their Bank has. They are not unbiased.

A title can be complex to the public as well to the industry that we belong to.   

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