Thursday, March 31, 2011

Experts best at brokering mortgage

Denise Deveau, Postmedia News · Mar. 30, 2011 |

Cheryl Hutton and Aaron Coates always thought getting a mortgage would be a challenge. But within 18 days of visiting a mortgage broker, they were able to close a deal on a new townhouse in Calgary without a hitch.

Now in their early thirties, both have careers in the theatre, something Ms. Hutton says has been a bit of a sticking point with banks. "In our industry we never fit the paperwork guidelines 'for the banks.' For some reason, people don't think we pay our bills."

Although it was their first home purchase, Ms. Hutton says it was surprising how easy the whole process was once they had someone who could walk them through it. "He sat us down, told us what our options were, showed us that it was possible and explained all the steps we needed to take. If it wasn't for him, we may not have made the leap."

Sorting through a mortgage process and negotiating rates can be overwhelming for first-time and seasoned home buyers alike. That's why people such as Ms. Hutton and Mr. Coates turn to brokers to do the legwork for them.

Yet mortgage brokers will tell you that a good portion of home buyers out there don't really understand what they do. "Part of the challenge we have in our world is that people aren't really sure what a mortgage broker is," says Gary Siegle, regional manager for Invis Inc., a mortgage brokerage firm in Calgary.

Brokers should not be confused with "rovers," mortgage specialists attached to a specific financial institution who visit customers outside of banking hours, Mr. Siegle explains.

"They only deal with that bank's product. A broker, however, is an intermediary whose job is to make a match between a lender and a borrower. We represent the individual, not the bank."

About 30% of mortgages in Canada are done through a broker, according to Perry Quinton, vice-president, marketing, for Investor Education Fund, a Toronto-based non-profit financial information service.

"The reason more people don't know about them is because the banks are so visible. It's easy to gravitate to them when you have your savings accounts, credit cards and investments there already," Ms. Quinton says.

Going for the comfort factor could cost you however, she adds. "A broker has access to different lenders including banks, and can shop rates and features. A half per-cent may not sound like much but that could make a difference of about $20,000 for a $250,000 mortgage amortized over 25 years. Any little bit helps."

Mr. Siegle confirms that shopping around can deliver significant savings.

"Let's take today's average posted rate of 5.44%, and you get a point off that at your bank. So you think you just got a really great deal. But the vast majority of rates we deal with as brokers would be another 30 basis points lower -around 4.14%. And if you look at preferred deals that don't offer features such as prepayment privileges, it can get as low as 3.89%. That's another 25 basis points below what's generally available."

The reason for that is simple, he says. "We offer wholesale rates, banks offer retail."

For anyone considering a broker, Ms. Quinton advises people to do a bit of groundwork first if they have the time.

"It helps to educate yourself about options and what you can afford. Look at all your living expenses, including student loans and credit card debt. Chances are you are understating those."

Another thing to look into is the different types of available mortgages and features, including interest rates, payment frequency, amortization, cash-back programs and the ability to make lump sum payments.

"Knowing these things before you go in can save you a lot of money," she adds.

Any mortgage broker you choose should always meet the right licensing and education requirements, so be sure to check their registration.

If you're not completely prepared, however, that shouldn't be a concern when working with a good mortgage broker, Mr. Siegle says.

"After all, mortgages are pretty much all we do. So even if you come in cold, good brokers will walk you through the process and ask all sorts of questions," Mr. Siegle notes.

"You just need to be prepared to answer them openly and honestly so they can get you the best deal possible."

Wednesday, March 30, 2011

Buyer Beware! Warns Canadian Association of Movers

Wednesday, 30 March 2011 11:03

Nowhere is there is a stronger case for “Buyer Beware” than in the moving industry.

In a statement released today, the Canadian Association of Movers cautioned consumers against “"rogue" movers” and offers tips on “moving to protect them from over-charging, broken promises and unfair practices.”

In anticipation of the onset of the busy season in moving and in Real Estate, the Canadian Association of Movers is doing a bit of a pre-emptive strike of sorts, bringing to consumers’ attention the existence of unethical moving companies, and are giving consumers tools they need to arm themselves.

According to the Canadian Association of Movers, 60% of all moves take place between June and September, and as such, many of the “better” companies are starting to fill up.

Knowing this, apparently some of the companies- who do not have as solid reputations, take advantage of consumers who may be either desperate, ill-informed or both.

In fact, as the Association warns, there are companies who prey upon the unsuspecting as part of their business strategy, and urges consumers invest time doing due diligence to determine exactly who they are dealing with before they invest their money.

“Unfortunately, some less reputable companies take advantage of consumers by offering cut-rate prices, making unrealistic promises, inflating the price on moving day and holding the household possessions for ransom. There are also individuals who set themselves up as move brokers for the busy season and trawl for customers online or through other forms of advertising. They have no trucks, manpower, offices, warehouses or insurance coverage. Instead, they simply find customers, and then broker the business out to anyone who is willing to accept the order. They take no responsibility for the level of service delivered. If you are shopping online, you could be dealing with a broker in The Netherlands, “the Association said.

Also, they urge consumers to go through their own checklist, to make sure that prospective moving companies do in fact have the resources- and remind them of the fact that they are entrusting their most valuable possessions to their chosen moving company.

They list the following as red flags: movers with a cell phone number only and no physical address, movers who only accept cash or don't pay tax, or movers who refuse to do a visual survey.

The Association urges for common sense to prevail for consumers as well. It is time to advise your buyer clients that chances are, if it looks too good to be true, it probably is.

Tuesday, March 29, 2011

Post-crisis, bank risk on rise again

I've said it before so I''ll say it again-- Get your finanial house in order before it is too late and bank's stop lending.

Neil "Mortgage Man" McJannet

Barbara Shecter, Financial Post ·

A term as emblematic of the heady pre-financial crisis days as “covenant-light” is not something one expects to hear these days from a high-ranking official at Canada’s top financial watchdog.

But that’s exactly the term used on Sunday by Ted Price, assistant superintendent at the Office of the Superintendent of Financial Institutions, to justify a push for more action by regulators even as a recovery appears in flight.

Covenant-light, which refers to lending with few strings attached and therefore more risk, is one that has been mumbled darkly in recent private gatherings of business heavyweights. In these circumstances, executives will acknowledge that less than three years after the worst financial meltdown since the Great Depression, risk has been repriced yet again — and back to the levels before the crisis set in.

In some cases, they say, the strategy is being employed to push off the inevitable — a non-payment of debt — while ensuring that minimum monthly payments continue to trickle in for as long as possible.

Peter Nerby, a senior vice-president at Moody’s who is responsible for the ratings of Canadian financial institutions, said he is worried about the apparent relaxation of loan agreements and the appearance of increased risk-taking at some North American financial institutions.

“It absolutely is making a comeback,” said Mr. Nerby, who is based in New York, adding it is “appropriate” for the regulator to draw attention to such behaviour.

While Mr. Nerby said it would be an “extreme case” where covenants are so light that a default is virtually impossible to be triggered, even anecdotes of such cases are a chilling reminder of an infamous pre-crisis statement by Citigroup chief executive Chuck Prince. In 2007, just before the liquidity dried up and forced markets around the world into turmoil, Mr. Price said his job as head of one of the world’s biggest financial institutions was to continue to dance as long as the music continued to play.

In a speech delivered Sunday at the Latin America Economic Forum in Calgary, OSFI’s Mr. Price likened the phenomenon of increasing competition, diminishing returns and increased risk appetite to a replay of a bad movie. And he urged more regulatory intervention because, he said, the unhappy ending will not miraculously change without some purposeful editing.

The repeating cycle has brought back other pre-crisis instruments such as structured derivatives, this time based on volatile commodities, he said.

“If we want a better outcome, supervisors and business leaders had better do something different this time around,” Mr. Price warned.

He did not restrict his warnings to the behaviour of bankers and their regulatory supervisors. Indeed, his comments extended into the boardrooms of financial institutions.

“Boards need to ensure that effective risk management is truly part of their business culture,” Mr. Price said. “Businesses that take the lead in improving their risk management systems will be better prepared for the next phase in the cycle, when those around them are acting out of fear.”

OSFI officials on Monday declined to elaborate on Mr. Price’s comments.

Banking analysts said it is difficult to envision what specific regulatory interventions could be put in place to control the behaviour Mr. Price highlights.

“As Mr. Price suggests, the vicissitudes of risk appetite are very difficult to contain - being tied, as they are, to human nature,” said Peter Routledge, who tracks Canada’s banks at National Bank Financial. Among the challenges for regulators, he said, will be to pinpoint the primary sources of the increased risk appetite.

“Given the much intensified scrutiny of, and restrictions on, regulated financial institutions, one might be more likely to find excessive risk appetites outside of regulated financial institutions,” Mr. Routledge said. “That is not to say regulators should decrease their scrutiny of the regulated sector, but that they may have to increase their scrutiny of sectors or players not presently under the regulatory umbrella.”

Friday, March 25, 2011

Carpe ver! Seize the spring and clean up your budget!

This an excellent program to do on an annual basis. It will keep you and your affairs in tip top shape - IF YOU do it.

Neil "Mortgage Man" McJannet

10 tips to organize and tidy up your finances
Golden Girl Finance,

Happy spring! The sun is out, the birds are singing, and here in Canada, we probably only have one or two more surprise snowfalls before summer.

This is the time of year when we emerge from our dark rooms, stretching and blinking into the sun. We peel off our woolly layers and start thinking about what bikini we will flaunt this summer (yikes). And then we start going for long walks again and haul out the bicycles. Yes, spring is a time to open the windows, clean out the closets, flip the mattresses and sweep away the cobwebs.

While you are busy freshening up your home and garden, you might want to consider pulling out your wallet, blowing off the dust and giving it a good seasonal purge as well. Your finances are like anything else in life: after a while, you start to forget your good habits, and things tend to get sloppy, neglected and disorganized. So seize the spring, darling. Carpe ver!

Here are ten tips to organize your finances and clean up your budget:

1. Clean out the wallet! Lord knows what is lurking in there. Stuffed full of receipts and bank slips, expired discount cards, phone numbers with no names attached, business cards from your last three jobs. As our feng shui sisters might say, you must make space in the wallet for the money to flow to you.

2. Be an A-Lister. Dedicate space for lists in your BlackBerry or a notepad that you carry at all times. Lists are critical for clearing trivia out of your head and keeping you focused when it's time to spend. Mark down items you need as you think of them; that way, when you get to the grocery or department store, you won't get that overwhelmed, "why am I here?" feeling and end up with a cart full of cocoa puffs and tea lights.

3. Reality check. Fitness memberships are an essential expense to many of us. However, if your gym is $90 a month and you only show up three times a month, that's $30 a visit. Be honest with yourself and your schedule. You might be better off paying as you go, or finding a gym where you can buy 10 sessions at a time.

4. Subscribe to this. What is with that messy stack of unread newspapers and magazines on your coffee table? Don't you have enough to dust? Subscriptions are no bargain if you're not reading the products. Consider weekend-only newspaper delivery and buy magazines at the newsstands when you have time to read them.

5. Stay on season. Now that it's spring, we can look forward to fresh fruit and vegetables from local farmers. Check labels and choose food products from close to home — not only will they be fresher, but they won't be packed with big fuel and shipping costs.

6. Be a contrarian. On the other hand, when it comes to big-ticket items, it helps to be delightfully off-season. The end of February is the time to nab a Prada ski jacket in the clearance sales, saving you money to buy Swarovski Christmas tree ornaments in July and Pottery Barn patio furniture in September.

7. Friend and follow. Before you shop, check the website of your favourite store or mall for online-only specials and coupons. Sign up for the Facebook or Twitter accounts of your favourite retailers, restaurants or hotels, which often use their online profiles for giveaways, contests and special deals to their friends and followers.

8. Spring THAW. Remember that trip to Costco where you got 40 chicken breasts for four dollars? Take an inventory of your deep freeze and start planning meals around what you already have on hand. Or throw a dinner party and use up everything you bought more than three months ago. Buying on sale is a waste if you end up throwing out freezer-burnt food.

9. Get your Groupon. Clipping coupons gets stylish with deal-of-the-day sites such as Groupon. The site offers limited-time discounts on everything from $25 off at The Gap (NYSE:GPS) to half price scuba diving lessons. Going on vacation? Check the site for deals at your destination. When you're going out a lot, who wouldn't want to score a free plate of appetizers or two-for-one tickets to a show?

10. Cheap and cheerful. Fun doesn't need to cost nearly as much as you think. A morning with the whole family at the playground is just as rewarding as a day at a theme park and much cheaper than driving, parking and paying for family passes. A night in with the girls and a bottle of wine is every bit as fun and boisterous as going out to the newest hotspot. Bonus: by making it OK to have fun on the down-low, everyone feels better about hosting or getting together more often.

Of course, along with the flowers come the inevitable showers. You know what they say about rainy days, don't you? By cleaning up your financial bad habits and getting in shape for spring, you might actually be able to save a little something…maybe enough to buy yourself one of these must-have items for spring:

Friday, March 18, 2011

Japanese disaster won't plunge global economy back into recession: economists

My financial planner said the same thing - out of most disasters comes progress. That is the same in our day to day lives. Don't give up the ship - regroup and get back on track. If you need help by re-organizing your debts give me a call.

Neil"Mortgage Man" McJannet

By Sunny Freeman

TORONTO - Recent tragic events in Japan follow a string of global catastrophes that could slow economic recovery in the short term, but should not push either the Canadian or global economies back into recession, according to some of Canada's top economists.

"Obviously horrible things have happened (in Japan) that will take some of the growth out of the economy for the next two quarters," said Glen Hodgson, chief economist at the Conference Board of Canada.

"Then people need to rebuild infrastructure, rail and housing and that will actually improve growth in the next four to six quarters."

Hodgson joined two major banks Thursday in projecting that the crisis at Japan's Fukushima Dai-ichi nuclear plant and last week's earthquake and tsunami will conspire with a number of other global events — including uprisings in the Middle East and Europe's sovereign debt crisis — to decelerate the global economic recovery.

"They will have a negative impact ... (but) we're certainly not returning to recession in any place," Hodgson said.

G7 countries, including Canada were set to meet in a teleconference Thursday night to discuss the economic impact of the disasters in Japan.

Bank of Montreal (TSX:BMO) economists said in a report that they had trimmed their forecast for global growth by a quarter point to 3.75 per cent as a result of recent events.

"Prior to Japan’s earthquake, we had been calling for global GDP growth this year of four per cent," they wrote.

"Until we see how the (Japanese) nuclear crisis plays out, it’s next to impossible to properly assess the full economic impact, but a rough guess would be that events in Japan could cut this year’s GDP growth by nearly a percentage point."

As a result, the bank doesn't expect an increase in the Bank of Canada's key overnight lending rate until at least this summer.

However, the effect on the Canadian economy will be minimal and short-lived as Canada stands to benefit from higher oil prices and Japan's rebuilding process, Paul Taylor, chief investment officer at BMO Harris Private Banking, said during a conference call Thursday.

There will be a short-term impact on the financial sector— where Canadian insurer Manulife (TSX:MFC) has taken a beating due to its exposure in Japan — as well as uranium producers, as governments around the world begins to rethink the use of nuclear energy.

However, many Canadian businesses, including lumber producers and engineering and construction firms, will see an increase in business during the rebuilding phase, he added.

"The Canadian economic impact, we expect to be quite limited," he said, adding that trade between Canada and Japan doesn't compare with Canada-U.S. trade.

"For us, it's only the secondary impact of Japan's effect on U.S. economic activity that were focused on," he said.

Meanwhile, his colleague, Jack Ablin, chief investment officer at U.S.-based subsidiary Harris Private Bank, said he was knocking down his U.S. growth forecast by a percentage point because of the crisis in Japan.

Japan's earthquake and nuclear disasters will likely reduce manufacturing output for several months, potentially creating shortages that could disrupt North American producers, such as automakers, that rely on Japan for parts.

General Motors said Thursday that it was suspending production at its Shreveport assembly plant in Louisiana next week due to a parts shortage resulting from the crisis in Japan, but so far its Canadian plants are operating normally, a spokesman said.

CIBC also cut its growth forecast for the U.S. growth by a tenth of a point, to 2.7 per cent, mostly due to the negative impact of oil price hikes and government spending cutbacks.

Among other things, CIBC senior economist Peter Buchanan noted in a report that surging gasoline prices raise questions about whether U.S. consumer spending can continue its increasingly healthy pace.

However, Buchanan believes that oil would have to reach US$160 a barrel to derail the economic recovery, a scenario he does not see playing out. After plunging in recent days, crude jumped $3.44 to settle at US$101.42 a barrel Thursday on the New York Mercantile Exchange.

"Oil has risen dramatically before, only to crash back to earth, and there are still good reasons why history may repeat itself," Buchanan said.

Inventories in industrial countries were adequate when the Middle Eastern political pot began bubbling and OPEC, while it likes firm prices, has no interest in recession-inducing ones that crush demand.

Since Canada is one of the world's top dozen net exporters of oil and oil products, higher crude prices are a modest plus for the economy in the near term.

But beyond four to five quarters, the drag on the economies of its major trading partners means the bad more than cancels the good, and the level of GDP is actually lower than it would otherwise have been.

While Canada is not immune to issues facing the global economy, the report forecasts real GDP growth of four per cent for the country in the first quarter of 2011 and Buchanan expects the Bank of Canada to hike its trend-setting overnight rate as early as May.

Thursday, March 17, 2011

Brokers differ on whether to advise fixed or variable rates for clients

I tend to agree that there is no real wrong way to go -- peace of mind people can get an excelent 5 year rate today. Those that like floating will liekly- on average- end up no worse then the locked in ones and may be ahead on paydown due to their lower rates.
It is a nice climate now for mortgage holderes.

Neil "Mortgage Man" McJannet

By Vernon Clement Jones

Brokers looking for definitive advice on steering clients toward fixed, variable or combination mortgages are out of luck, with industry opinion divided ahead of expected rate hikes.

“If you want to follow sheep into a fixed-rate product, you’re going to get slaughtered,” Vince Gaetano, vice president and principal broker for, told “The gap today between variable and fixed rates is too significant. Variable is where we should be directing clients.”

As Canadians brace for a possible hike in the Central Bank’s key interest rate, mortgage industry opinion is splintering on how quickly Governor Mark Carney will move to close that gap. A recent RBC report suggests the bank’s overnight rate may rise 2.5 percentage points by the close of 2012.

Gaetano and others bullish on ARMS argue new and renewing borrowers will have time to make significant dents in their principals before the prime rate claws its way back from historic lows.
Other industry veterans take a different view, although acknowledge continuing popularity of the adjustable rate.

“If you look at the current rates on fixed rate mortgages,” said Boris Bozic, president and CEO of mortgage lender Merix Financial, “you really can’t go wrong in opting for fixed – any rate under four per cent is free money. There is a value to peace of mind.”

Most economists are predicting the Central Bank will nudge rates higher this year as both Canada and the U.S. rack up modest employment gains and rising fuel prices stir inflation fears.
Uncertainty about the timing of that friendly nudge – or whether it will be more of a shove – means brokers should continue to represent fixed rate mortgages as a hedge against future volatility, said Bozic. He’s also impressed by the growing number of hybrid products, splitting a mortgage between fixed and variable rates.

Gaetano is more critical of combination mortgages, now being floated by some of the big banks: “I’m not a fan of them because the probability of a client locking in the variable portion at some future date means that renewal dates for each half of the mortgage will never match up.”

Gaetano also sees fixed mortgages as suited to B clients skirting acceptable debt-service ratios and with minimum down payment or equity. Here at least, almost all mortgage professionals agree: Brokers should steer that type of client toward a long-term fixed product to remove the risk of a punishing rate adjustment.

“In my opinion it’s the only responsible thing for a broker to do,” said David Larock, president of Integrated Mortgage Planners. “Otherwise the client would be in danger of losing their home.” His advice to other originators comes as the Canadian Real Estate Association reports an uptick in housing activity ahead of federal rule changes meant to rein in on household borrowing.
Starting March 18, Ottawa will, among other key changes, withdraw government backing for 35-year mortgages, lowering the cap to 30.

The plan has rattled many real estate agents, concerned the move will push some first-time buyers out and lower Canadian home prices by as much as 10 percent.

Those ifs and buts may make it tougher to guide clients through an already-confusing spring buying season and into a variable, fixed or 50-50 mortgage. But ultimately, Larock told, the client’s risk aversion should dictate that decision – not the broker’s.

“Not even the smartest among us knows for sure where rates are going,” he said. “The question brokers need to ask their clients is ‘Are you more likely to lose sleep at night worrying that you’re paying too much interest or lose sleep worrying that rates will go up?

More banks lower mortgage rates

By | 17/03/2011 1:00:00 PM More of Canada’s big banks say they will lower some of their fixed rate mortgages as nervous investors move to bonds, causing a drop in long-term interest rates.

As of Thursday, TD Bank, National Bank, Royal Bank of Canada, Bank of Montreal, CIBC, Scotiabank, Desjardins Group and Laurentian Bank had all made mortgage rate change announcements.

TD Bank, CIBC, Laurentian, Desjardins and National Bank say their fixed five-year closed rates will drop to 5.34 per cent, effective Thursday, while Scotiabank’s will be 5.29 per cent.

The move follows similar announcements from Royal Bank of Canada and Bank of Montreal Tuesday.

Four-year rates will fall 0.15 percentage points to 4.99 per cent at all eight.

Fixed mortgage rates, which are closely tied to bond markets, tend to fall when traders shift investment activity from riskier equity assets toward bonds, which are considered safer.
Investors have been jittery over fears that a potential nuclear disaster in Japan could severely derail the global economic recovery.

In February, many of Canada’s big banks moved to raise their fixed mortgage rates as investors grew more confident about investing in equity markets and the global economy appeared stronger

Wednesday, March 16, 2011

Canadian Governments Cautioned To "Rein In Spending" Or Risk Financial Ruin:

CFIB .Wednesday, 16 March 2011 08:08

A report released today by the Canadian Federation of Independent Business (CFIB) warns Canadian governments that continuing their current spending habits is risking following in the footsteps of countries like Greece & Ireland that have found themselves in dire financial circumstances in the last 12 months.

"The good news is that many governments appear to be putting the brakes on spending growth, but the margin of error is razor thin - any backsliding could push the debt balance in the wrong direction," said CFIB's chief economist, Ted Mallett. "Even tying government spending to the rate of growth in the economy would push today's $1 trillion in government debt to $1.8 trillion in the next 10 years."

To capture the varied picture at provincial level, CFIB has created three categories to group the provincial governments: the 'good', the 'bad', and the 'ugly'.

Saskatchewan and Newfoundland & Labrador, both with balanced budgets and stavle spending-to-GDP ratios, are carrying the distinction of being in a 'good' financial position, whilst BC, Alberta, and Manitoba are all falling into the 'bad' category. All are currently running deficits that may be overcome with the aid of economic growth. For the rest, a huge effort will be required in order to post surpluses by decade's end, without even look at making progress on debt.

Regardless of current status, CFIB recommends that all governments embrace the following principles to demonstrate good "fiscal fitness" in their own backyard:

1. Implement legislation that focuses on controlling expenditures, not just balancing budgets;
2. Be specific enough to ensure the spirit of the legislation is followed without creating loopholes; and
3. Ensure the legislation focus on the long-term sustainability of government finances.

"If we think we're fiscally infallible, we're actually being fiscally delusional. The sooner we act, the sooner we can take the necessary steps to ensure we live within our means and avoid having to make dire choices later," concluded CFIB vice president, Satinder Chera

Tuesday, March 15, 2011

Your mortgage CAN BE tax deductible!

For more information go to and click on Tax deductible mortgages. Then read that page and take the test!

Monday, March 14, 2011

Your mortgage CAN BE tax deductible!

Please take a few minutes and watch the enclosed video to learn how to make your mortgage Tax Deductible.

This video could change your financial situation dramatically.

Thursday, March 10, 2011

Canada new home prices hit record high, pace slows

OTTAWA (Reuters) - Canadian new home prices rose more than expected in January and hit a record high, but the pace of growth was the slowest since March, adding to evidence that the housing sector is starting to cool.

Statistics Canada's new housing price index, released on Wednesday, rose 0.2 percent in January from December. Analysts in a Reuters poll had forecast a 0.1 percent increase, following a 0.1 percent gain in December.

Compared with January 2010, prices were up 1.9 percent, easing from a 2.1 percent year-on-year gain in December. It was the smallest annual rise since March.

After taking a brief hit from the financial crisis, Canada's housing market bounced back strongly in 2009 and helped drive the economy out of recession, fueled by low mortgage rates and relatively healthy banking sector.

But double-digit price gains seen in late 2009 and early 2010 worried policymakers and prompted the Canadian government to tighten mortgage rules. Three interest rate hikes by the Bank of Canada last year also helped cool demand.

Analysts expect more rate increases this year and say the lagging impact of tighter mortgage rules will further drag on the housing sector. Economic recovery in Canada is now expected to be driven less by housing and more by business investment and export growth.

Earlier this week Statscan reported that the overall value of Canadian building permits dropped by 5.1 percent in January from December, mainly due to a fall in applications for permits for condominium buildings.


The January new-home price data showed the biggest increase in Winnipeg, Manitoba, up 0.7 percent, as builders introduced new list prices at the start of the year.

Prices climbed in nine of the 21 cities surveyed, with gains recorded in Toronto and Oshawa, Ontario, as well as in Quebec City and Montreal. Prices were flat in nine cities and edged down in three.

Separately, a poll released by Royal Bank of Canada, the country's largest lender, on Wednesday showed Canadians are assiduously paying down their mortgages and are confident they have the means to weather a drop in house prices.

It showed almost three-quarters of Canadians, or 73 percent, believe that they or their families are well-positioned in the event of a home-price fall.

Tuesday, March 8, 2011

RBC expects BoC to resume rate hikes in May

I tend to agree with this report. "Nothing is forever" and we have had great rates for a very long time - so prepare for rising rates but do not panic and lock in necessarily- Floating rates historically have ben better than fixed and although they may rise the next few years there is no reason to think that history will not repeat itself. Do your research before you make your move.

Neil "Mortgage Man" McJannet

Canada’s economy kicked it up a notch in the final quarter of 2010 with annualized real GDP growth of 3.3% following an upwardly revised 1.8% rise in the third quarter. The main surprise in the fourth quarter report was the strength in consumer spending, which combined with a sharp increase in net exports supported the above-consensus gain. The strong consumer and export demand resulted in a sharp draw down in inventories, which is likely to be followed by higher production in the quarters ahead as stock levels are rebuilt. The improvement in Canadian export growth occurred as the U.S. economy showed signs of renewed vigour. Expectations that U.S. growth will accelerate further in 2011 augur well for Canada's trade sector to make a solid contribution to the expan- sion while the economy transitions from relying heavily on consumer spending to busi- ness investment.
Bank doesn’t bite as economy gears up...

The Bank of Canada left the overnight rate unchanged at 1.00% on March 1, 2011, and even with the stronger than expected fourth-quarter 2010 GDP report in hand, did not indicate that that its 2011 growth forecast is headed higher. Rather, the Bank made lim- ited mention of the fact that the economy proved to be much stronger than it expected in late 2010 by only remarking that the recovery “is proceeding slightly faster than ex- pected.” The bottom line is that the statement was largely a reprisal of the tenets of the Bank’s January forecast thereby reiterating that policymakers are worried that the firm Canadian dollar combined with poor Canadian productivity may limit the gains made in the export sector and in turn the pace of expansion.

...and is waiting to be convinced

The Bank is unlikely to stay on the sidelines for long if the data continue to show that the economy is maintaining its upward momentum. The economy solidly outperformed the Bank’s forecast in the final quarter of 2010 and December GDP’s 0.5% monthly gain sets the course for another quarterly outperformance relative to the Bank’s 2.5% projection. The strength in the recent data has increased the likelihood that the Bank will upgrade its economic outlook in the April update. Faster growth risks a quicker closure of the output gap than in the Bank’s baseline forecast and core inflation rising to the 2% target ahead of schedule. Having said that, the risks to the world economy from geo-political events and elevated debt levels mean that the Bank is unlikely to make any quick moves that risk destabilizing the economy. The Bank still needs to be convinced that the stronger momentum will continue. Our forecast is that the economy will record another solid gain in the first quarter of 2011 of 3.7% and will grow by 3.2% over the entire year, well above the Bank’s current 2.4% estimate. The risk to the Bank’s current outlook is skewed to the upside, and we maintain our call for the overnight rate to rise by 100 bp in 2011 with the first hike expected in May.

Our outlook for 2011 is little changed although we now expect the Canadian dollar to be slightly firmer over the forecast period, and as indicated, assume a later start date for the Fed’s initial rate increase. Against this backdrop, we trimmed back the amount of tight- ening that we expect from the Bank of Canada in 2012. Our updated forecast is for an overnight rate of 3.0% at year-end 2012, down from 3.5% in our previous forecast.

Need help with a Credit Repair Job?

If you have poor credit this article is a good place to start. If you are not sure why your credit is bad - or just how bad it is I can help. Go to my web-site and fill out an on-line application and in the comment section type "I need help in repairing my credit" - I will call you to discuss and set up a game plan to set you on a solid path for recovery - then the rest is up to you.

Neil "Mortgage Man" McJannet

| Friday, 28 January 2011

Credit is sometimes a mysterious concept to people. A lack of basic financial knowledge, such as why it’s important to pay bills on time, could be the difference between an A mortgage with a great rate and a B mortgage with higher payments. But as a broker, you know placing clients with an alternative lender can be the perfect segue to building up their credit scores. “Brokering today is so much more than finding your client a mortgage,” says Brian Leland, Equitable
Trust’s director of residential mortgage underwriting. “They are taking an approach to keep that client for a lifetime so they’ll try to coach clients to improve their credit over time.”

Identifying why
Before you can advise your clients on a course of action to improve credit, you have to know why they have a less-than-stellar Beacon score. “Improving credit is easy yet difficult,” says Pino Decina, Home Trust’s vice-president of mortgage lending. “The main factor for the broker is to understand the reason behind the credit score. Once that is determined, it’s much easier to assist a client in the graduation process.”

The Beacon score, determined by the Equifax credit bureau, is an at-a-glance indicator lenders use to estimate a client’s probability of successful loan repayment. Beacon scores range from 300 to 900, with 900 as the highest possible score and good credit averaging in the 600s. A person with a Beacon score below 520 will often be turned away from the bank.

The credit score is comprised of the following percentages:
35 for late payments, bankruptcies, collections and judgments,
30 for current debts,
15 for how long accounts have been opened and established,
10 for type of credit, such as credit cards and bank loans, and
10 for applications for new credit card enquiries.
One common example of a homeowner with a poor credit rating is chronic late payments.
“This is an easier situation—a simple consolidation of all balances into one low monthly payment and reminding the client not to max out their credit cards will help them focus on repaying debt,” says Decina.

Maxing out credit cards is a second frequent mistake people make. Mark Fidgett, a Vancouver mortgage broker who owns Verico Not a Penny Down Mortgages, advises that his clients do not exceed 50 per cent of their credit limits. “If you have a $1,000 credit limit and a balance of $950, and you pay your credit card off every month, it still negatively affects your Beacon score,” says Fidgett. “This is because we don’t know what day of the month that particular credit card reports to the bureau. So even if you pay it off every 26th of the month, let’s say TD Visa reports every 15th of the month, your report still says you had a $950 balance on a $1,000 credit card.” Fidgett suggests his clients split spending on a few cards so they’re not overusing their credit.

Fidgett’s most imperative advice is for clients to pull their own credit reports from Equifax at least twice a year. All consumers are responsible for correcting any errors and it takes awhile for amendments to be made. “The credit bureau is not there to help you and they’re hard to get a hold of so individuals have to be really diligent,” says Fidgett.

Fidgett gives a personal example: “My daughter goes to the University of Victoria and I gave her a car to use. She got a parking ticket. I got it in the mail and told her to pay it. She did but she paid it late and it went through to collections for $50, which I saw when I pulled my credit report—because I do every two or three months. I wouldn’t have known it was there if I wasn’t diligent about my personal finances, including my credit.”

Sometimes there can be misleading information on a client’s credit report as well. For example, American Express doesn’t set a credit limit because it’s based on the individual’s ability to pay. So a client may use $5,000 one month and on her report, the AmEx credit limit is set at that amount. The next month, she may spend $8,500, which is acceptable for AmEx, but now her credit score is negatively affected.

Alternative lenders offer some specific products to help repair a bruised credit report.

Products to repair credit
Mortgage payments do not go on credit reports. So even if your client is paying the lender on time, he still needs to increase his credit score. Home Trust offers a one-charge mortgage product where there is a regular fixed payment to own a home and the added feature of an Equityline Visa card. This Visa provides the flexibility of using the equity in a client’s home to secure credit up to $250,000. In the meantime, regular activity on the Visa card and paying bills on time improves the Beacon score.

Home Trust also launched a Credit Assist product in Ontario in October 2010 as a one-year solution where debts are consolidated into one to help consumers repair bruised credit. After one year, clients should be able to renew their mortgage to a prime rate with more favourable terms. Conditions for qualifying include verifiable income, a 44 per cent maximum total debt service ratio and a minimum Beacon score of 520, with lower scores evaluated on a case-by-case basis. Homeowners can borrow up to 85 per cent loan-to-value without requiring default insurance.

At Equitable Trust, though there are no specific products available to assist clients move from a B to A mortgage, the company itself is designed to take on a broad spectrum of borrowers with various credit situations. “There’s obviously no maximum credit score— the higher, the better,” says Leland. “We’ll offer a particular loan-to-value and interest rate to somebody with a high Beacon score and somebody on the other end who is working to improve credit.”

Tips for credit improvement
Just as Decina recommended, the biggest tactic for improving credit scores is consolidating debt. Fidgett often takes out a short-term second mortgage for clients so they can pay off all their debt. “Now their credit report basically gets wiped down to zero so it’s positive,” he says. “We usually allow two to three months for it to go through and report to the bureau a few times. Now the reporting says, ‘This guy is great. He’s got low balances.’ The Beacon score will gradually go back up and it’ll move them back to the A side of an acceptable Beacon score for competitive rates.”

One of two key pitfalls for clients to avoid is over-applying to creditors and lenders. As shown in the earlier breakdown of a credit report, how often you inquire for a new credit card makes up 10 per cent of your Beacon score. “Even if they’re walking through the mall and there’s somebody at a booth giving away a free pen, saying, ‘Just fill out a credit card application,’ people don’t realize that’s authorization for someone to pull their credit report,” says Fidgett.

Or a client may be deciding what kind of credit card to get. They may apply to a number of lenders to find the best deal. They’re approved everywhere but now there were five hits to the credit report. “The best approach is to talk to a mortgage professional, decide which product is best and apply for that one,” says Decina.

The other problem many people walk into is ignoring small payments, but no matter what the balance is, it should always be paid on time. “Even if it’s $30 on your credit line bill or Visa bill, never say, ‘I’ll pay $60 next month,’” advises Decina. “A credit bureau doesn’t take into account that the money owed was very small. It does take into account the payment was missed. That becomes part of the score and is something that cannot be erased.” To avoid the hassle of paying a credit card bill every month, your client can set up automatic payments through the bank.

Fidgett has recorded videos on credit tips and uploaded them to YouTube for clients to access easily. He also has an e-book designed that he sends to clients for free whenever they’re looking for advice on managing and improving credit. He suggests other mortgage brokers do the same. “This is also a great lead generator because when people are surfing the Internet for this advice, they find my videos and can get my e-mail address off the website,” he adds.

Generally, moving a client with bruised credit from a B to A mortgage simply takes time and sound advice. When you inform them of the effects their financial habits have on the whole picture and the easy steps they can perform to do better, a mortgage renewal with a great rate is within reach.

HomEquity tops $1 billion in reverse mortgages in 2010

This is an excellent alternative to selling and moving to a Retirement home. If you know anyone that would like more information on this program feel free to have them call.

Neil"Mortgage Man" McJannet

| Tuesday, 8 March 2011

In announcing its financial results for 2010, HOMEQ Corporation and its wholly owned subsidiary HomEquity Bank revealed that it originated $206 million of reverse mortgages, an increase of 87 per cent over 2009. HomEquity’s mortgage portfolio also grew by 17 per cent to $1 billion.

“We are seeing broad market demand for reverse mortgages as the demographic wave and other macro economic factors affect retirement trends in Canada,” said HOMEQ President and CEO Steven Ranson.

The company said it expects that demand for reverse mortgages will remain firm in 2011 and aims to increase the mortgage portfolio by between 15 and 20 per cent this year.

Reno coach keeps projects in the ballpark

Planning her first major home renovation in the summer of 2009, Tina Davies felt like she was awaiting her first baby: excited, nervous and not sure what to expect.

The project would plunge the Toronto makeup artist’s household into chaos for five months, but once it was done, her family of three would have a new kitchen and bathrooms, updated plumbing and electrical systems and upgrades to the entire interior, from new floors to freshly plastered ceilings.

With $350,000 on the line, however, Ms. Davies wasn’t impressed by the vague quotes and sparse details being offered by the first three contractors she approached, whose contracts were so unprofessional, they looked as though they’d been drawn up “on paper napkins.”

Was this normal? She wasn’t sure. She’d never done this before.

“As a homeowner, you’re just really at the mercy of these contractors and you don’t know their language or what is the proper way to have something done,” Ms. Davies said. “You’re so overwhelmed and confused and you want to make sure you don’t do the wrong thing.”

She figured she needed help from someone knowledgeable and impartial, who understood how the industry worked. Then she heard about reno coaching, a relatively new service where, for $75-$100 an hour, a project manager would come to her house and help her draw up a budget and advise her whether her project was practical and affordable – think Mike Holmes meets Gail Vaz-Oxlade, but with the aim of preventing expensive mistakes.

The reno adviser she hired, Jay Charendoff of House Calls Project Management, “was really good about advising us about what to do before you get into it,” said Ms. Davies, adding that once she found a reputable contractor, he went through the contract line by line and highlighted problem areas.

“It’s just nice to know that there’s somebody on your side,” she said.

Mr. Charendoff, who has a degree in architecture and is a LEED-affiliated professional, launched his business four years ago and is among a handful of professionals offering reno advice in Canada.

It’s a service that is starting to catch on due to a new consumer awareness about the financial risks of renovating, says Carl Mascarenhas, president of eRenovate Inc. With the housing market cooling, he says, it’s no longer a given that property values will rise and homeowners will recoup their costs; they are more cautious now.

As with any new industry, Mr. Mascarenhas says it’s buyer beware when hiring a renovation adviser. As demand for the service increases, opportunists will emerge, he says. “There’s still a bit of caution for consumers to really weigh out the role the professional is playing and that they have the right credentials or experience to do so.”

Home renovations are big business in Canada. According to a survey by the Canada Mortgage and Housing Corp., Canadians spent $25.8-billion on home renovations in 2009, with the average project costing about $12,100. Of those 2.1 million households, 35 per cent said they went over budget.

“People don’t really know how much things are going to cost,” Mr. Charendoff says. “People sometimes have a general idea of what they want to do, but in this business, it’s really about the details.”

In addition to budgeting advice, Mr. Charendoff also looks at housing market conditions and gives homeowners straight talk if he thinks they are not making a good investment.

Such was the case for Karen Weinthall, who asked for advice while planning a major kitchen renovation on her 1920s Toronto home. After inspecting the property, Mr. Charendoff told Ms. Weinthall that her house, which was built on top of a steep hill, was slowly sinking into the ground.

He looked at the kitchen and looked at the floor and said you really are not going to be able to do that without a huge structural job. So I moved,” Ms. Weinthall said with a laugh.

“If we had just gone ahead and hired a contractor to do the kitchen, at what point in that proceeding would we have found out what a big problem it was?”

Mr. Charendoff says a reno adviser acts as a middleman between the homeowner and the contractor, whose main objective is sales. “The hat that I wear is really a different hat – it’s what advice and guidance can I offer to this owner that’s going to be a wise financial decision.”

Lisa Rapoport, a partner at Plant Architect Inc. in Toronto, is skeptical of the reno coaching trend and says any good designer or contractor will offer the same advice, and will be able to help clients find savings to match their budgets. “Just providing that kind of middleman service sounds like an extra cost, and I guess if you’re going to pay the extra cost, I’d rather put it into a good contractor,” she said.

Finding a good contractor requires a bit of homework, says Mr. Mascarenhas. He recommends consumers begin by doing some research on the CHMC and Better Business Bureau websites, and read consumer reviews on sites like and

For Ron Singer, hiring a reno adviser was certainly a wise financial decision. In the midst of constructing a $30,000 art studio for his wife, he began to have some doubts about whether the contractor was putting in adequate insulation. The adviser confirmed his doubts, and he was able to have the contractor fix the problem on the spot.

“As far as I’m concerned, hiring someone for a couple of hundred in order to ultimately save down the road in terms of either repairs or things that go wrong, is certainly worth it,” Mr. Singer said. “We now have without a doubt the best constructed, best insulated studio one can have.”

The pre-reno checklist

1. Know the rules. Building codes and local by-laws may limit what and how you renovate. There’s nothing worse than discovering the project you’ve painstakingly planned is not allowed. Talk to your municipal building department and find out about zoning and permits.

2. Know what’s possible. Your home’s heating, plumbing and electrical systems will also affect how you can renovate. For big projects, it’s wise to check with an architect, home inspector or contractor before you begin.

3. Create a budget. Doing a detailed financial analysis of your project in advance of the physical design allows you to evaluate your situation and study a variety of options well before you get to the construction stage. It’s a low-cost exercise that allows you to clarify your needs versus your wants.

4. Do the math. Get quotes from at least two reputable local renovators, architectural firms or material suppliers. Take the most reasonable quote and add 10 to 15 per cent for unexpected costs.

5. Spend wisely. If you need financing, you may be able to renegotiate your mortgage or apply for a personal loan to cover the cost of the reno. You may even be eligible for assistance, as some utilities and governments offer incentive programs for energy-efficiency upgrades.

Sources: Dianne Nice, CMHC, House Calls Project Management

Monday, March 7, 2011

Metro Vancouver to Fuel Growth In B.C. .

Thursday, 03 March 2011

According to a new three-year forecast released by Central 1 Credit Union, things are on their way up in B.C- led primarily by an upstart of activity and higher prices in Metro Vancouver.

Additionally, they predict that the median price in B.C. is set to break a new record this year- $ 402,000.

The forecast states that total home sales will increase to 95,500 units- coming back from a from a 10.5 % decline from 2010.

There will be more growth in coming as well; they forecast an additional 2% in 2012, and a surge of 15% the following year.

Despite all of these promises of upward momentum, there is expectation that the highs seen in the last decade are not likely on the horizon.
“Even after those gains, sales will be below the levels we saw from 2002 to 2007,” said Central 1 economist Bryan Yu. “Low, but rising, interest rates and tighter mortgage insurance rules will restrict sales for the next few years.”

They expect that there will be a rush to market early this year, in advance of the introduction of Jim Flaherty’s mortgage restrictions, which will take effect later this month.

“Metro Vancouver will observe the strongest uptick in early-year activity, given the higher proportion of local buyers and higher prices in those areas,” added Yu.

Talking exclusively to, Jay McInnes, Sales Agent, Macdonald Realty, supports the belief that Metro Vancouver will be a major driver of upwards movement in the Real Estate market, “Yes, I definitely agree that the largest increase will come to the Metro Vancouver area. I believe this because the vast majority of the "big money" coming into B.C from foreign investors and landing immigrants is going directly into the Metro Vancouver core now, as it has been for years.”

“This is emphasised with the high-end investors who will be purchasing high end condominiums throughout specific neighbourhoods of Downtown Vancouver -and also with the high-end investors looking at detached homes, going to the Vancouver West side neighbourhoods looking for the prestige and the top of the line public & private school systems.”
Central 1 expects that there will be continued weakness in Okanagan, the Kootenays and parts of Vancouver Island , due to “weaker demand conditions in 2011 as mortgage rates rise and buyers remain hesitant to make discretionary and luxury purchases.”