Whether it comes in the form of a tax refund, or a gift from a generous relative, a $1,000 windfall can be very helpful, provided it is used responsibly. This article from Moneysense explores the different ways $1,000 can help improve your financial situation. Paying off high interest debt should be a top priority when obtaining a windfall like this, and can prove even more lucrative than saving or investing. Taking credit card debt, for instance, if only the minimum monthly payment is made, the interest on a credit card with a balance of $1,200 and an interest rate of 19% can end up being almost as much as was originally owed. However, if the $1,000 windfall is applied to this debt, the remainder can easily be paid in a matter of months. Another excellent way to make use of "found" money is to apply it as a lump sum payment to your mortgage. Most lenders will allow additional payments of a certain percentage over and above regular payments without incurring a penalty. Making extra payments is a good way to start towards mortgage freedom. Click here for the full article from Moneysense. May 16, 2013 Click here to watch the full video from CTV Ottawa. Summer is the time when many Canadians will turn their attention to cottages. In this week's Mortgage Minute, we learn that financing a cottage purchase is not so different than that of a residential property. The approval process is the same; the lender will be mainly focused on the borrower's ability to carry the mortgage. It is also a common misconception that mortgage rates on recreational properties are higher. Frank tells viewers that this is not the case. Borrowers should still have access to the same low mortgage rates that would be available for their principal residence. For more information, talk to an Ottawa Mortgage Broker. May 15, 2013 More often than not, Canadian home buyers will wait to hire a real estate lawyer until the transaction is basically complete, but as we learn in this article from the Globe and Mail, it is beneficial to have the advice of a lawyer on-hand throughout the process. A home purchase is a large financial commitment, and the importance of having the assistance of a professional cannot be understated. From reviewing the purchase and sale agreement, to ensuring clients know exactly how much they will pay when it comes to closing costs, a real estate lawyer should be an important part of each home purchase. Shopping around for a lawyer is a good idea as well. Hiring the lawyer with the least expensive fee isn't always necessarily the best choice. Talk to family, friends or your Mortgage Broker for recommendations. Click here for the full article from the Globe and Mail. May 14, 2013 On this week's Real Estate and Mortgage Show, the hot topics are low mortgage rates, rental properties, and penalties major lenders charge to break mortgages. Plus, the guys share their views on why Ottawa is a great place to invest in real estate, and Frank shares highlights from last week's Canadian Mortgage Awards. Follow the link to listen to the full Podcast. May 13, 2013 May 9, 2013 This era of historically low mortgage rates has recently been heralded as the perfect time to purchase a rental property. For many, becoming a landlord could be the perfect way to invest - tenants pay your mortgage and the property appreciates in value. This article from the Globe and Mail (via Canadian Real Estate Wealth Magazine) details the top 10 reasons why becoming a landlord is a lucrative way to invest. Click here for the full article from the Globe and Mail. May 8, 2013 Purchasing a home is the biggest financial commitment most of us will ever make, so it makes sense to want to find the best possible deal. A recent study from the Bank of Canada revealed that staying loyal to a bank won't necessarily accomplish that goal. It is a common misconception that having all your products and services with one bank will motivate them to provide you with a discounted rate when it comes time to apply for a mortgage, or renew an existing one. This Bank of Canada study shows that borrowers who switch lenders are far more likely to negotiate better rates. Not surprisingly, findings also showed that borrowers who consult Mortgage Brokers are far more likely to get the lowest mortgage rates. Mortgage Brokers work with several different lenders and are able to shop around for their clients, typically with no fees. Click here for the full article from the Toronto Star. May 7, 2013 On this week's Real Estate and Mortgage Show, Chris Hoare fills in for Paul and joins Steve and Frank to talk about the spring market, first-time buyers, credit checks, and the importance of obtaining a mortgage pre-approval. The spring market is ramping up in Ottawa, bringing many first-time buyers with it. With more information available online, first-timers seem to come armed with a wealth of knowledge when making their first home purchase. However, it still seems to be a common misconception that shopping different lenders for a mortgage will affect your credit score in a negative way, by having multiple inquiries on your credit report. Frank lets listeners know that this is not the case. Credit reporting firms will have a record of where the inquiry is coming from, and it is understood that when shopping for a mortgage, most borrowers will approach more than one lender to obtain the best rate possible. In addition, when using the services of a Mortgage Broker, your credit score is only pulled once, and the lenders that your Broker approaches will use that single inquiry. However, borrowers should still exercise caution when applying for other credit products. Multiple inquiries for unsecured credit (such as credit cards or lines of credit) can affect your score negatively. Frank also takes some time this week to talk about the importance of a pre-approval. When shopping for a home, it is important to know not only the price range that fits with your budget, but what you will qualify for. Finding that perfect home and then realizing you won't qualify for the mortgage can be extremely disappointing. Obtaining a pre-approval is a fast and easy process - you simply would need to provide proof of income and down-payment. For more information, talk to an Ottawa Mortgage Broker. Click here for the full Podcast. May 6, 2013 Click here to watch the full video from CTV News. On this week's Mortgage Minute, Frank takes some time to discuss a product lenders are starting to promote aggressively - multi-tiered mortgages. This type of mortgage would, in essence, split the mortgage into three parts, a one, a three, and a five year term, each with a different mortgage rate. Borrowers should be aware of these mortgages for a few reasons. Most importantly, if one would want to refinance or change lenders after the one year term is up, it would involve paying hefty penalties for both the three and five year terms. Although the rates for the one year terms on these tiered mortgages is normally attractive, Frank lets viewers know that if they shop around, they are likely to find they are better off locking in for a five or ten year term. For more information, talk to an Ottawa Mortgage Broker. May 1, 2013 A recent poll of almost 3,000 Canadians has revealed that very few home owners think to contact their insurance provider when they plan to make changes that may affect their home insurance policy. Results of the poll showed that only 16% of respondents contacted their insurer to see if the existing policy needed revisions following renovations. Not only can unreported renovations invalidate your policy, certain improvements can actually decrease the cost of your premium, such as updates to electrical fixtures. It is also prudent to consult your insurance professional regarding what your insurance covers during a renovation. If a contractor is hurt on your property, you could be liable for medical bills, loss of wages and other damages. According to Pete Karageorgos of the Insurance Bureau of Canada, changes should be disclosed as soon as possible, and many Canadians aren't fully aware of when they would need to make changes to their policy. "If your home isn't insured to value," Karageorgos says, " ... you may not have enough coverage and you won't be completely protected." Click here for the full article from the Financial Post. May 1, 2013 If you're one of the many Canadians looking to take advantage of the spring real estate market and upsize, downsize or simply relocate, selling your current home is an important task. You will want it to sell quickly, and for a reasonable price. In this article from Moneysense, Gail Vaz-Oxlade examines common mistakes many sellers make when they put their homes on the market, and how to avoid them. The most common mistake sellers will make is overpricing their property. Selling your house is an emotional experience, as years of work has likely gone into making the house a home. It is easy to let emotions take control when determining how much you think your home is worth, but overpricing the property will severely limit buyer interest, and it is usually difficult to bounce back from. It is prudent to consult a real estate agent, examine what comparable properties in the area are selling for, and price your home accordingly. Other common missteps to avoid include limited availability to show the house, not being prepared for showings, and disallowing inspections. There are new homes appearing on the market every day, and you only get one chance to make a first impression with yours. Click here for the full article from Moneysense. April 30, 2013 Spring has arrived, and with it comes the list of spring cleaning duties. Along with the tidying and yard clean-up, there are several things that should be checked around the house to ensure your home is safe and that any possible damage that may have occurred over the winter months isn't exacerbated. The CMHC website has helpful checklists for every season so home owners can keep up to date with what needs to be done to keep their household running efficiently. Click here for your spring home maintenance checklist. April 29, 2013 On this week's edition of the Real Estate and Mortgage Show, Steve, Frank and Paul discuss current real estate and mortgage issues and take listeners' questions. This week, the guys discuss the recent news surrounding CRA clamping down on investors purchasing condominiums with the intention to flip the property. They also talk about the different tax implications when owning a property, and the importance of having it set up properly. Frank also touches on the tiered mortgages many lenders are currently offering which split the mortgage into normally a one, three and five year term, advertising low rates. Frank advises listeners to be aware of these products, as if they wish to negotiate the interest rate at the one year period, they would be obliged to pay the penalties to break both the three and the five year term of the rest of the mortgage. Additionally, as the three mortgages are tied together, only porting one to another lender is not possible. For more information, talk to an Ottawa Mortgage Broker. Click here to listen to the full Podcast. April 29, 2013 A recent report from one of the major Canadian credit reporting firms, Equifax Canada, shows that fewer Canadians are allowing debt repayments to lapse than at the same period one year ago. The study shows that the percentage of non-mortgage debt remaining unpaid for a period longer than 90 days came in at 1.2% in the first quarter of 2013, compared to 1.39% in the first quarter of 2012. Click here for the full article from CBC News. April 26, 2013 April 25, 2013 A recent survey revealed that the average Canadian home buyer expects to spend $300,000 on their first home. Many first-time buyers have an idea in mind of how much they are willing to spend, but many are left wondering how much they should save for a down payment. The Canadian Mortgage and Housing Corporation (CMHC) mandates that Canadian home buyers must have a minimum down payment of 5% of the purchase price. However, anything less than 20% is subject to CMHC mortgage insurance, thus adding to your mortgage. Those with a 20% down payment or more not only avoid paying CMHC insurance fees, but have the option of choosing a longer amortization period for their mortgage. First-time buyers also have the option to take advantage of the Home Buyers Plan, which allows first-timers to withdraw a maximum of $25,000 from an RRSP to be used toward the purchase of a first home. The withdrawal is tax-free, but must be paid back over a period of no more than 15 years. What is your down payment plan? Talk to an Ottawa Mortgage Broker. Click here for the full article from the Montreal Gazette. April 19, 2013 The Bank of Canada released its quartery Monetary Policy Report on Wednesday, with Mark Carney at the helm for the second-last time before he moves on to the Bank of England. The overnight rate was once again kept at a modest 1%, as was widely anticipated. The rate has remained unchanged as of September of 2010. Canada's central bank is maintaining that interest rates will eventually rise, but still stated that the current rate "will likely remain appropriate for a period of time". Click here for the full article from the Financial Post. April 17, 2013 Click here to watch the full video. On this week's Mortgage Minute, Frank Napolitano takes some time to talk about the purchase plus improvements mortgage. The purchase plus improvements program allows a borrower to purchase a property and include the cost of a home improvement that will improve the value of the home. In order to take advantage of purchase plus improvements, the buyer must obtain quotes for the desired improvement and submit them along with the mortgage application. This allows the purchaser to obtain financing for improvements at a lower cost than they may receive later on. For more information on purchase plus improvements, talk to an Ottawa Mortgage Broker. April 17, 2013 Come tax time, a common question among young Canadians is whether or not to file jointly when living with a partner. Filing correctly can not only have tax benefits now, but will save you from a possible audit later. There is often confusion over what exactly constitutes a common-law arrangement. In the eyes of CRA, if a couple has lived together for 12 straight months by December 31st, said couple will need to report their status as common-law when they file by the April 30th deadline. A common misconception, however, is that the couple must file together and on the same return. While this is the case in some U.S. states, it is not applicable in Canada. Canadians are considered individual taxpayers and may file as such regardless of their marital status. There have been cases in which young couples don't wish to report common-law status, as combining incomes would result in both parties losing their quarterly GST rebate. When a couple is considered common-law, the government uses both parties' combined income to see if they qualify as a low income household. (Less than $34,000 net income.) Not reporting common-law status is illegal, and although it may result in the loss of this particular payoff, there are certain credits common-law couples are entitled to, including an extra credit on charitable donations, medical expenses, student credits, and more. Talk to a tax professional for more information. Click here for the full article from Moneysense. April 16, 2013 According to a recently released survey, the average Canadian home buyer is 29, aiming to buy a $300,000 home with a $48,000 down payment. However, depending on the province, the figures are a little different. Here's a look at some of the findings. Prospective borrowers in Atlantic Canada expect to spend the least, at an average of $202,000, Quebec and Ontario came next with $224,000 and $326,000 averages, respectively. Vancouver and Toronto were unsurprisingly the most expensive on average. Buyers in Vancouver expect to spend $443,000, and those in the GTA expect a first home to run about $347,000. 46% of those surveyed will opt for a fixed rate mortgage, while 20% will choose a variable rate. The average home owner plans to have their mortgage paid off in 20 years, but 20% hope to be mortgage-free sooner. Click here for the full article from the Globe and Mail. April 11, 2013 Chris Kushneriuk only appeared in 22 regular season games and 15 postseason contests with the Wheeling Nailers, but his impact was felt in a big way. On the ice, fans in the Ohio Valley will most remember him for his overtime goal in game seven of Wheeling's second round playoff series win against the Greenville Road Warriors. Off the ice, they know a person who put all others before himself, making for a proud citizen.Late in the 2011-12 season, after battling an injury, Chris got the news that no one wants to hear. He was diagnosed with cancer. Although it appeared that the 25-year old had beaten it, the recent news hasn't been as positive, and Chris has found himself in yet another upward battle. However, Kushneriuk remains upbeat that he will come out on top once again. To do so he must now travel to Indianapolis in order to receive treatments that will ultimately save his life. Unfortunately with no insurance in the United States his medical expenses will be extraordinarily large, therefore needing all the financial support he can get. Upon hearing the news, the current Wheeling Nailers players took the immediate initiative to support their former teammate. Chris Barton, Cody Chupp, Paul Crowder, Ben Farrer, Zach Hansen, Patrick Killeen, Denver Manderson, Peter Merth, Christiaan Minella, and Zack Torquato all shared the dressing room with Kushneriuk in the 2011-12 campaign, and got the rest of their active teammates on board. www.chriskushneriuk.org April 10, 2013 It is very common to hear Canadians complain about the monthly fees associated with their bank accounts. Unfortunately, the lack of concern when it comes to taking action about these fees seems to be just as common. For most of us, the financial institution we frequent ends up being the one our parents used, the one that was the closest or the most convenient. At the same time, however, many of us are paying an exorbitant amount each year just to have a bank account. With the availability of online and mobile banking, including the ability to check balances, pay bills and keep up to date, many Canadians are gravitating towards so called "virtual lenders". Quite a few of these lenders offer their clients no-fee accounts. For those who wish to keep their bank accounts at the financial institution they are familiar with, there are still options to cut costs on monthly fees. Have a look at the options your current bank offers on their website. You may be surprised at how much you can save. In addition, the Financial Consumer Agency of Canada offers a bank account selector on their website that can assist you in finding the account that suits your needs best. Click here for the full article from the Globe and Mail. April 10, 2013 On this week's Real Estate and Mortgage Show, Paul Rushforth joins Steve Gregory and Ottawa Mortgage Broker Frank Napolitano for an informative hour talking Ottawa real estate, renovations, first-time buyers and rental properties. With more and more first-time buyers entering the market, Frank touches on a few key points that every first-timer should know. Obtain a pre-approval. Doing this beforehand will make the process of finding a home, and having your mortgage approved, much smoother. Know your budget. There are many costs associated with home ownership that are often forgotten while spending several years renting. Property taxes, maintenance fees and default mortgage insurance are just a few examples of the additional costs of owning a home. Develop a working relationship with your Mortgage Broker, and ask questions. A Mortgage Broker's job is to educate and guide you through the mortgage process. Having good communication is key, as this is who you will likely speak with when it comes time to sell, upgrade or renew. Click here to listen to the full Podcast. April 8, 2013 A recent survey suggests that the average Canadian expects to be paying off their mortgage well into their 50s. For the average home owner, however, this likely isn't the ideal situation. As assisting children with post-secondary education, renovating, or planning for retirement start to be higher on the priority list, those who took steps to pay down their debts aggressively early on will be better prepared for these financial challenges. Luckily, there are several easy ways the average Canadian can reduce their mortgage amount faster, and take those first steps towards financial freedom. Most mortgages allow the borrower to pay a certain amount (normally 10%) of the outstanding mortgage principal outside of their regular mortgage payments per year without penalty. If you have a large tax refund coming your way, why not apply it to your mortgage? Using "found" money to chip away at your principal is just one way to pay it off faster. It has been recently reported that an increasing number of Canadians are accelerating their monthly payments in order to shrink their mortgage sooner. Many lenders will allow increasing payments by a certain percentage, just be aware of possible penalties if you decide to change it again within the same calendar year. Another easy way to achieve this goal is to switch from monthly payments to accelerated weekly or bi-weekly, or maintaining your regular payments when renewing your mortgage at a lower rate. Every small step can add up to a big difference! For more information on how you can pay your mortgage off faster, talk to an Ottawa Mortgage Broker. April 8, 2013 Before starting the process of finding the perfect home, there are steps you can take to ensure you're also getting the perfect mortgage. The first step is to request a copy of your credit report. Lenders are placing more importance on borrower's credit reports, making it even more crucial to ensure you're in good standing before applying for a mortgage. It is recommended to obtain a copy of your personal report six months in advance to allow time to address any possible errors or items that should be cleared. A free copy of your credit report can be requested by contacting one of the major Canadian credit reporting firms; Equifax or Transunion. After ensuring your credit is in good standing, the next step is to contact a professional Mortgage Broker. A Mortgage Broker negotiates on your behalf to obtain not only the best mortgage rate, but the best possible mortgage for your needs. Most potential borrowers will focus on the interest rate, and although it is a very important part of the mortgage, there are many other important factors to consider. Portability, the ability to make extra payments, possible penalties if you break the mortgage early and the length of the term you take are all examples. A Mortgage Broker will find out what your needs are and find the mortgage that is the best fit for you. Click here for the full article from the Financial Post. April 5, 2013 The deadline for Canadians to complete their tax returns is fast approaching, bringing with it the choice between paying a professional or using a program like Netfile to complete the task. According to the Canada Revenue Agency's most recent available statistics, over half of returns filed were performed by a professional. The following are some things to consider if you're planning on having a professional file your return. Before selecting someone to file your taxes, you need to ensure you're comfortable with their level of skill. If you have a small business, a rental property, or other factors that make your return more complicated, you should be sure your chosen professional has the skills necessary to complete your return. If you need advanced tax planning, be aware that not every tax preparer has those skills, so plan accordingly. In addition, find out what your chosen professional charges. Some professionals charge a premium depending on how complicated the return is, and sometimes, paying more can come with additional benefits like additional savings or support if your review is audited by Revenue Canada. Above all, before filing, ensure you are organized and you have all the documents you need. Neglecting to report even a small piece of information can have negative consequences, and the responsibility falls on you, not the professional who filed your return. Click here for the full article from CBC News. April 4, 2013 Click here to watch the full video. For some, the dream of home ownership doesn't include touring properties and scanning MLS. Instead, it's about finding the perfect lot, the right location and building a dream home from the ground up. The building process is vastly different from the process of buying an existing property, and the financing process is different as well. Buyers will typically need more money down and will need to have more on hand to complete the process. To find out more about construction mortgages, talk to an Ottawa Mortgage Broker. April 3, 2013 When it comes to applying for a credit card, the array of options can be intimidating. Many credit cards will come with a cash-back or reward system, available to users simply for spending, but it can be easy to fall into the pattern of impulse spending or overuse, which can lead to credit issues. The appeal of receiving rewards or cash back simply from using a credit card can lead to consumers overusing their cards, thus eliminating the benefit they were hoping for in the first place. It's easy to look at a credit card statement and focus on the points balance, forgetting about the 18-24% interest that is collecting on the outstanding balance. Another factor to keep in mind is the annual fee. Some cards charge a higher annual fee because they come with an array of perks, but the user needs to consider how many of these they will actually use - and how frequently - to determine if the annual fee is worth it. For instance, travel cards often offer hotel and car rental discounts or free travel insurance, but for those who rarely or never travel, a $100 or higher annual fee doesn't make sense to spend. Opt for a cash-back card instead. Regardless of the card you choose, the importance of keeping the balance at a reasonable level and paying at least the minimum payment cannot be overstated. Just one late or missed payment can easily damage your credit score, which can take years to repair. Click here for the full article from CBC News. April 2, 2013 This week, on The Real Estate and Mortgage Show, Chris Hoare visits the studio to sit with Steve Gregory and Frank Napolitano. The guys discuss the spring housing market, first-time buyers, and answer listener's questions. One of this week's callers asked what someone should ask when they are selling their home and looking for a real estate agent. A common mistake several sellers make is to go with the agent that quotes the highest selling price, or the lowest commission. It is a good idea to "audition" more than one agent before deciding. Some questions to keep in mind should include; how the agent is planning to market your home, on what websites will it appear and if they will use a professional photographer. You can also ask the agent to provide a written marketing plan detailing everything they plan to do. Click here to listen to the full Podcast. April 1, 2013 Spring is on its way, when the thoughts of home owners turn to spring cleaning, and making the home more eco-friendly. The following are some quick tips to get the process started. Change out your existing lightbulbs in favour of energy-efficient bulbs. This is a small change that is not only eco-friendly, but will save you money on your hydro bill. To conserve water, install low-flow showerheads, water-displacement devices in your toilet tanks, and try to run dishwashers and washing machines only when they are full. When choosing products for your spring cleaning project, search for one of the many lines of biodegradable products on the market to use. While you're cleaning, it is a good idea to check around doors and windows for possible leaks, and seal them. A simple seal with caulking or weatherstripping can conserve a lot of energy, and potentially save you even more on your monthly bills. Consider registering to receive and pay your bills online. Online billing and banking saves paper, and more and more banks and companies are starting to charge fees for paper billing. Spring cleaning can often include getting rid of things around the house that are no longer needed. Try to reduce the amount of superfluous belongings that are being thrown away by doing a little bit of research. Several things can be donated to local charitable organizations, recycled, or even sold. By just taking a few small steps, you can make your home a more sustainable place to live. March 28, 2013 It's springtime, and we all know what that means. Time to start checking out MLS listings and open houses, auditioning real estate agents and getting pre-approved for a mortgage. It's a fun and exciting process, and the key to getting the most out of it is to plan. Amid warnings in the press about the impending housing bubble, the direction of mortgage rates and house values, it is sometimes difficult to know where to turn. In this article from Moneysense, Gail Vaz-Oxlade advises readers on the importance of making a detailed plan before starting the search for a new home. Factors you will want to take into account: How long are you planning on staying in the home? When you do move, will you be upgrading? If interest rates rise, will your payments still be manageable? Do you foresee any significant changes that may impact your finances, such as a change in employment, starting a family, taking care of a loved one or renovations? Sitting with an Ottawa Mortgage Broker is always a good place to start. They can assist in formulating a detailed budget and negotiate for you to ensure you're receiving the best rate and terms. Click here for the full article from Moneysense. March 27, 2013 Click here to watch the full video. Finance Minister Jim Flaherty has been in the headlines recently, not only for the release of the federal budget, but for reports of his office requesting that a major lender withdraw promotion of their 2.89% mortgage rate. It is believed that his concern is that clients who choose to take a 5 year mortgage at these rates will be unable to keep up with their mortgage payments when they renew in 5 years at a higher rate. This conversation with Frank Napolitano highlights that this is one of many reasons to consult a mortgage professional, who will not only find the best mortgage rate and the best terms to suit their clients, but will go through a financial plan to ensure the mortgage they choose is the best fit. Mortgage rates as low as 2.89% are still available - talk to an Ottawa Mortgage Broker for more details. March 27, 2013 Click here for the full video. The spring market is heating up, and Mortgage Brokers Ottawa has the mobile app to make the process smoother and more informative. Kurt Stoodley of CTV Ottawa checks out the free app in the latest video from his What's App series. Features of the Mortgage Brokers Ottawa mobile app include:   Access to the lowest mortgage rates in real time. Mortgage calculator feature that includes CMHC fees, PST, land transfer tax and closing costs. Allows users to email calculations to themselves for future reference. Contact button to reach a mortgage professional if necessary. Give the app a try! It's a free download, and available on Blackberry, iPhone and Android devices.   March 26, 2013 On this week's episode of the Real Estate and Mortgage Show, Steve and Frank are joined by Chris Hoare of the Paul Rushforth team. The trio discuss selling your home in early spring, mortgage rates and renewals, and the topic on everyone's mind; the federal budget. The announcement of the federal government's budget this week was met with a fair amount of press, coupled with the recent controversy over Finance Minister Jim Flaherty's request for two major lenders to drop their advertised 2.89% and 2.99% mortgage rates, citing them as "too low" for the average Canadian. It has been argued this move was unnecessary, as fixed mortgage rates fluctuate with the bond market, and mortgage rates as low as 2.89% have been available for months. Chris takes some time this week to offer some tips for those who are planning to sell in the near future. He highlights the importance of having not only multiple photos of your property, but also the quality of the photos, especially the first one. When potential home buyers are browsing, a photo that does not showcase the property at its best can turn them off very quickly. Regardless of the fact that we live in an age of smartphones that can take and post photos within a few seconds, Chris recommends hiring a professional that knows how to showcase a home. Click here to listen to the full Podcast. March 25, 2013 The federal government revealed their much anticipated 2013 budget this week, and has announced they are once again restricting the Canada Mortgage and Housing Corporation (CMHC) mortgage insurance sector. For those obtaining a mortgage who have less than a 20% down payment, the purchase of mortgage insurance is mandatory, and most are insured by Canada's largest mortgage insurer, the CMHC. The two other major mortgage insurers, Canada Guaranty and Genworth Financial control the remainder of the mortgage insurance market. These private companies have a 350-billion dollar limit, in comparison to the CMHC at 600-billion. In an article from the Financial Post, we learn, "the new regulations will 'gradually limit' the issuance of low ratio mortgages to only those mortgages that are in the CMHC securitization program. Ottawa will prohibit the use of any taxpayer-backed insured mortgage, both high and low ratio, as collateral in securitization vehicles that are not sponsored by CMHC." For more information on how these changes could affect you, talk to an Ottawa Mortgage Broker. Click here for the full article from the Financial Post. March 22, 2013 In an annual survey from Moneysense magazine, Canada's top cities are ranked. Ottawa came in at number two on this year's list, which takes into account everything from quality of weather and access to hospitals to job availability and housing affordability. Higher scores were given to cities where housing is affordable when compared to local salaries, showing Ottawa remains a great place to get a mortgage. Click here for the full article from Moneysense. March 22, 2013 Google is best known for allowing us to explore the web with ease, and most recently for introducing the Android mobile operating system. But there are products and services that Google provides that we don't hear about every day. For instance, most of us have heard about Google Earth, but did you know that with Google Mars, you can explore the mystery of the red planet? Google Art Project allows users to tour museums and art galleries, and Power Searching with Google gives users a chance to collect expert advice to sharpen their search skills. Google Think helps to inspire, and Schemer helps networks of people plan activities together. Click here to see more! March 21, 2013 On this week's Real Estate and Mortgage Show, the group addresses what seems to be an ongoing debate when it comes to Canadians' finances - good versus bad debt. The federal government's upcoming budget has many wondering if Jim Flaherty will once again move to tighten mortgage regulations, despite the fact that regulations that were set in motion in 2012 have already had a significant impact. The percentage of total Canadian mortgages in arrears continues to sit at an all-time low, which is one sign that Canadians are borrowing for mortgages responsibly and have sufficient income to service these debts. What seems to be the issue for many Canadians is high-interest debt. One example that was talked about this week was a consumer with a good credit score who could potentially obtain several credit cards from different retail stores, all with high limits. These cards tend to come with higher interest rates than a card obtained through a financial institution, and incentive to use the card is high as well. This can lead to a dangerous cycle of "spending to save", and amassing more and more debt. The potential inability to service these high interest debts can also lead to credit issues. Frank reminds listeners that missing just one payment, regardless of the amount, can have a marked impact on your credit score. Some tips to keep in mind to keep a clean credit report: Limit the number of credit cards you obtain, and keep the balances on these cards ideally to less than 50% of the credit limit. Always make payments in full, and on time. Do not estimate what you believe your payment to be. If you have a card you do not use that has an annual fee, consider cancelling the card. If it is a card you rarely or never use, the potential to forget to pay the annual fee rises, which can dent your credit rating. Take advantage of email reminders or automatic payments to ensure all bills are paid in full and on time Don't forget to check your credit report at least once each year for potential errors, and to see where you stand. Click to listen to the full Podcast. March 20, 2013 On Saturday, March 16th, 2013, Scotiabank Place was packed, as excited 67s fans watched their beloved team take on the Mississauga Steelheads. Although the 67s suffered a loss to the Steelheads, there were several winners in the audience. Rudi Rodriguez, Ronald Seddon, Mark Hartigan and Shala Smith were the lucky contestants for this year's Mortgage Brokers Ottawa Shoot Out. Each one of our contestants, along with one lucky audience member, took home an iPad mini, and Shala is now the proud owner of seasons tickets to cheer on the 67s. A big THANK YOU to everyone who came out to join us on Saturday, a great time was had by all. See you next year! March 19, 2013 Click here to watch the full video. One of the top priorities of any Mortgage Broker is educating their clients. With the introduction of a free mobile app, Mortgage Brokers Ottawa has given clients the ability to have a wealth of information available, quite literally, in the palm of their hand. The Mortgage Brokers Ottawa mobile app is available for Blackberry, iPhone and Android devices and is free to download. Something that sets the Mortgage Brokers Ottawa mobile app apart from other mortgage calculator apps is access to live, real mortgage rates, and the capability to compare these rates to those being offered by the major banks. The calculator function includes land transfer tax, lawyer's fees and title insurance - fees that are often overlooked by buyers that are new to the market. Once a particular scenario is calculated, the email function allows the user to email the information, making it easy not only for clients to save and have easy access to information, but for real estate agents to email budgets to clients as well. Follow the links below to download the free app! Blackberry iPhone Android March 19, 2013 A big THANK YOU once again to our clients and supporters in Ottawa who voted us the Consumer Choice winner in the category "Mortgage Companies and Brokers" for the third year in a row! We couldn't have done it without our amazing team of Mortgage Agents, Brokers and admin and support staff, working together to give each one of our clients an experience worthy of this award. Thank You Ottawa! March 18, 2013 Finding the perfect mortgage can be complicated. For many, obtaining the lowest rate is the main focus when they apply. This is the largest debt most people will take on in their lifetime, so there is no question that a low rate is important. However, it is also important to remember that all mortgages are not created equal. Every home owner has a different financial situation, and therefore a different set of needs when it comes to their mortgage. The following includes some factors to take into consideration before making that commitment. In addition to finding a low mortgage rate, you will need to decide between fixed or variable. The biggest difference between the two is the manner in which they are calculated. Fixed rates rely on fluctuations in the bond market. When bond prices rise, fixed rates will follow, but the rate you signed for will remain the same until you renew your mortgage. Variable rates are based on the Bank of Canada's overnight rate, and will rise or fall depending on changes the central bank will choose to make. Your monthly payment will remain the same, the main difference will be the amount of the payment that is applied to the principal. Most who choose a fixed rate do so because of the stability. Something to keep in mind if considering a variable rate is that if the rate rises, the amount of the monthly payment that is applied to the principal is decreased. For most home owners, decreasing the principal is their first priority, which is one reason many are opting for a fixed rate. Another decision that will need to be made is to take an open or closed mortgage. To put it simply, an open mortgage allows the borrower to pay off all or part of the mortgage at any time, but will typically have a higher interest rate. Closed mortgages will likely come with lower rates, but the tradeoff here is that making extra lump sum payments or paying off the mortgage completely will incur a penalty. Those who are considering selling or moving, expecting a windfall that will cover the mortgage, or have an investment property to sell may want to consider an open mortgage. Some other things to take into account when mortgage shopping will be the mortgage term (5 years, 10 years, etc.), pre-payment priveleges and possible penalties. Talk to an Ottawa Mortgage Broker for assistance finding the best mortgage to suit your individual needs. March 15, 2013 A mortgage is the most significant debt most Canadians will take on in their lifetime, so saving money on the interest should be a priority. With the rise in popularity of Mortgage Brokers, it has never been easier to accomplish this goal. With recent reports of historically low mortgage rates circulating, Google reported a 50% increase in users searching the term "mortgage". The ability to find a mortgage professional for assistance is translating into marked savings for the average consumer. The Canadian Association of Accredited Mortgage Professionals (CAAMP) reported that the average customer was saving 1.85 percentage points on a mortgage in 2012, translating into thousands of dollars of interest saved. In the same release, CAAMP reported that 47% of clients who took out a mortgage in 2012 used the services of a Mortgage Broker. However, the same survey showed that when it came to renewing a mortgage, only 27% of home owners opted to use a broker. There seems to be a belief that as a mortgage decreases over time, saving on the interest rate becomes less important, but a lower rate can still save thousands over time. Another factor many don't take into account is the terms and conditions of the mortgage they are signing for. By utilizing the services of a Mortgage Broker, home owners can be sure they are finding not only the best rate, but the mortgage with the right terms to fit their lifestyle. Click here for the full article from the Financial Post. March 13, 2013 This week on the Real Estate and Mortgage Show, Steve, Frank and Paul discuss today's relevant mortgage and real estate issues. Among the topics this week are reports that property values are set to decrease by 20%. Despite the housing market moving back into balanced territory, several economists are still forecasting a housing crash similar to what happened in the U.S. Frank reminds listeners that these reports are largely based on opinion, and statistics that do not necessarily apply to the Canadian market. With spring right around the corner, the Ottawa real estate market is picking up, and Paul takes some time to advise those who are planning on selling to put in that extra effort to make the property look desireable. The spring thaw can tend to have the opposite effect on curb appeal, so sellers have to remember to go that extra mile to bring their property up to show-quality. Other topics this week include mortgage rates, investment properties and finding a good financial planner. Click here to listen to the full Podcast. March 12, 2013 In July of 2012, the federal government implemented new, tougher regulations surrounding mortgages, including shortening the maximum amortization period on insured mortgages from 30 to 25 years, and limiting refinancing to 80% of a home's value, from the previous 85%. The new guidelines were instituted as a measure to cool what was feared to be an overheating housing market. Shorter amortization periods have proven to have a significant impact on first-time home buyers, effectively increasing the monthly payment on a given mortgage. Jim Murphy, the head of the Canadian Association of Accredited Mortgage Professionals (CAAMP) recently made efforts to convince finance department officials that the new regulations were a step too far. His suggestions are to resume insuring mortgages with 30 year amortizations (with the caveat that the borrower must qualify for a 25 year amortization) and to increase the $750 tax credit that first-time buyers receive. Although the finance department has not released a comment at this time, it is the belief that the likelihood of these steps being taken is low. Finance Minister Jim Flaherty has previously stated that he is pleased with the results that tightening the mortgage legislation has produced, and that his concern for inflating house prices remains. Click here for the full article from the Globe and Mail. March 11, 2013 The Bank of Canada has decided once again to keep the overnight rate where it has been for the past two and a half years, at a record low of 1%. Although the move didn't come as a surprise, the language in Wednesday's statement was softer than normal, prompting many to believe Canada's central bank is not as concerned about Canadian debt levels as it has been in the past. In January's statement, Bank of Canada Governor Mark Carney had indicated that "... gradual withdrawal of monetary stimulus ..." would be required in the future. Although the bank has not withdrawn this statement completely, it remains a secondary point at this time. Economic growth is expected to pick up in 2013, and the bank expects household debt to income ratios to continue to stabilize. For more information on how the Bank of Canada's rate decision affects you, talk to an Ottawa Mortgage Broker. Click here for the full article from Canadian Business. March 7, 2013 Click here for the full video. Although the National Capital Region is still blanketed with snow, spring house hunters are already out in full force. The uptick in the real estate market has prompted a move by the big banks to again start offering record low rates. On this week's Mortgage Minute, Mortgage Broker Frank Napolitano reminds viewers that although low mortgage rates are an attractive notion, paying close attention to the terms and conditions of the mortgage is just as important. Talking to a Mortgage Broker gives you the opportunity to shop multiple lenders and find not only the best possible rate, but the best possible mortgage that suits your individual financial needs. Frank also takes some time this week to talk about mortgage renewals. Approximately 80% of Canadians will simply sign and send their mortgage renewal notice back without attempting to negotiate for a better rate. If your mortgage is coming up for renewal in the near future, talk to an Ottawa Mortgage Broker to negotiate your rate. In many cases, you may be able to obtain a lower rate than your lender is offering, potentially saving you thousands of dollars in interest. March 6, 2013 This week, on the Real Estate and Mortgage Show, Erin Peck joins host Steve Gregory and Mortgage Broker Frank Napolitano for an informative hour discussing current real estate and mortgage news. With the spring market already in full swing, a common question is whether a buyer should buy their new property or sell their current one first. Frank and Erin remind listeners that the answer to this question differs in every case, so it is important to consider the issue from all possible angles. If you sell first, you will have the benefit of knowing exactly how much money you have to work with, which will eliminate the risk of falling in love with a property you can't afford. If you find the perfect property, you will have the freedom of making an offer immediately. The downside to selling first is the possibility of having to search for temporary accommodations while house hunting. Those who choose to buy first have to carefully budget to ensure they have the means to carry both properties if the original home takes more time to sell. If you have sufficient equity in the original home to use as a down payment towards the new home, buying first could be a good choice, and for those who are lucky enough to have their original property completely paid off, keeping it as an investment property becomes an option as well. In the end, the choice to sell or buy first will differ on a case-to-case basis. Talk to an Ottawa Mortgage Broker to discuss which is the best path for you. Click here for the full Podcast from 580 CFRA. March 5, 2013 A recently released report stating that the Canada Mortgage and Housing Corporation (CMHC) is not listing properties as foreclosed has sparked a lively debate, with many wondering if more information should be disclosed. In response to the controversy, Mark McInnis, vice president insurance, underwriting, servicing and policy with the CMHC discussed the policy with the Financial Post. It is the belief that when a property is listed as foreclosed, it attracts less than serious offers, and skews the representation of fair market value. In addition, only 0.32% of Canadian mortgages are in arrears, making the decision whether or not to post foreclosures almost irrelevant at this point. According to the CMHC, in only 20% of cases do they become the vendor of a distressed property. In the remaining cases, the homes are sold by the bank. Click here to read the full article from the Financial Post. March 1, 2013 The spring real estate market is soon to be in full swing, bringing a number of new properties up for sale and giving prospective home buyers even more to choose from. An extremely important part of the process of finding a home is to conduct a thorough home inspection. There are many possible defects that can be easily hidden during a visit that may only become visible once the previous owners move out. From checking under carpets and appliances on the counter to testing all windows to ensure they open, there are many simple checks a prospective buyer can perform. In general, sellers are not legally obligated to disclose any defects that are visible to buyers. However, the seller cannot attempt to actively disguise or conceal these defects. These principles make it difficult to make a legal case after the fact, therefore making it all the more important to perform due diligence before making an offer on any property. To find a reputable home inspector, ask for referrals from your real estate agent or Mortgage Broker. Click here for the full article from the Toronto Star. February 26, 2013 Tax season is in full swing, and how to get the most out of the process is top of mind for most Canadians. While the cost of a home is not tax deductible, there are several ways being a home owner can lead to a bigger tax refund. To sell a property for a profit and avoid paying taxes on the capital gains, ensure only one property is designated as a principal residence. First-time buyers can withdraw up to $25,000 from a registered retirement savings plan (RRSP) tax free and repay over 15 years. First-time buyers are eligible for the first-time buyer tax credit, which was introduced in 2009 by the federal government. Certain home expenses such as mortgage interest, property taxes, utilities and maintenance can be claimed if the residence is used for business. A portion of home costs can be claimed if a room or part of the house is rented out, and the home is still considered a principal residence. Moving expenses, the cost of selling a previous residence, mortgage penalties and vehicle fuel and maintenance can be deducted when moving over 40 km to be closer to work or school. Renovation costs to accomodate mobility issues can be deducted as long as the medical expense reimbursements fall within a 12 month period that ends in the current tax year. For more information on utilizing owning a home to maximize a tax refund, contact an Ottawa Mortgage Broker. Click here for the full article and video from Moneysense. February 22, 2013 For first-time home buyers, one of the most difficult tasks can be accumulating the down payment. The federal government instituted the Home Buyers' Plan (HBP) as a program to assist first-timers to accomplish this task a little more smoothly. By using the HBP, first-time buyers can withdraw up to $25,000 from a registered retirement savings plan (RRSP) to purchase a principal residence. The withdrawal is not taxed, but must be paid back to the RRSP within 15 years. A common question among Canadians who choose to utilize this program is how their repayments are distinguished from regular contributions to their RRSP. If, for example, the maximum withdrawal of $25,000 is used, a repayment of $1,667 per calendar year would be required. Therefore, any contributions over and above that amount would be counted as regular contributions. (It should be noted that any missed repayments are included in income for that tax year.) Another little-known fact about the HBP is that the funds do not have to be repaid to the financial institution where the RRSP originated. This gives the client some flexibility when repaying the loan. For more information about the Home Buyers' Plan, contact an Ottawa Mortgage Broker. Click here for the full article from the Globe and Mail. February 21, 2013 According to recently released statistics from the Canadian Real Estate Association (CREA), home sales were up 1.3% in January when compared with December of 2012. Although the figures show a significant decrease from January figures from the previous year, the month over month increase is welcome news among speculation Canada is heading for a housing crash. Since the summer of 2012, when mortgage regulations were tightened and home sales started to drop, economists have debated the possibility of a housing crash versus a soft landing. It is the belief that Canadians are adjusting to the changes; real estate agents and Mortgage Brokers alike are reporting a resurgence of first-time buyers to the market. It is expected that if recent sales activity continues in the pattern that has been established, sales declines will diminish once the spring season takes hold. Click here for the full article from the Financial Post. February 20, 2013 On this week's Real Estate and Mortgage Show, Steve Gregory sits with Frank Napolitano and Paul Rushforth to discuss Ottawa's current mortgage and real estate market. Topics on this week's show include how to pay your mortgage off faster, fixing your credit score, and what upgrades will add value when selling your home. Spring is a busy season for mortgage renewals, and a common question is what happens when a mortgage is up for renewal and the client does not indicate to their lender how they intend to proceed. Normally, most lenders will automatically renew the mortgage for 5 years closed. Frank cautions home owners to be conscious not only of their current mortgage and terms, but their options as well. Auto-renewals don't provide the opportunity to negotiate a better rate, and with mortgage rates still very low, why let someone else decide? Credit ratings and reports are becoming more and more important in the mortgage approval process. The guys take some time this week to talk about keeping credit scores in line. Just one missed payment can have a significant effect, and repairing a damaged credit score takes much longer than damaging it in the first place. One call this week dealt with getting the most return possible from a renovation. It is a common belief among home owners that any repair will increase the value of a home. Paul reminds listeners that there is a difference between upgrades and the expected. Repairing a roof, for example is not going to generate a monetary return, as the buyer will expect a roof that is in good shape when purchasing the home. Examples of tangible upgrades that will add value include; finished basements, upgraded kitchens, granite countertops, hardwood floors and ceramic versus linoleum tiles. Click here to listen to the full Podcast from 580 CFRA. February 19, 2013 Predictions about an impending housing market crash in Canada have been in the news for months, but many believe that the measures used to gauge housing affordability are an inaccurate way to make these claims. This article from the Globe and Mail details a different way to measure housing affordability, rather than a simple price-to-income calculation. The housing affordability index measures at national, provincial and city levels, and takes into account mortgage rates, median income, property taxes and utilities for various house types and market prices. As mortgage rates are one of the key factors used to determine house prices, leaving them out of the calculation is an unrealistic way to measure affordability. A common complaint about the classic calculation method is that it takes into account only a 5% down payment. This may be true of many first-time buyers, but a large portion of the population are relocating, and using existing equity as their down payment. The article also comments on mortgage rates, which are predicted to rise in 2013. A common assumption is that an increase in mortgage rates will impede affordability. This belief fails to take into account the fact that when mortgage rates do eventually rise, it will not be an isolated event. Historically, rates have tended to rise when the economy is cycling up, meaning that income and employment will be rising as well, thus offsetting the increase. To discuss how these factors affect you, contact an Ottawa Mortgage Broker. Click here for the full article from the Globe and Mail. February 14, 2013 Click here for the full video from CTV News. This week, on CTV's Mortgage Minute, Frank and Kurt discuss the difference between a standard and a collateral mortgage. The main factor that sets collateral mortgages apart from standard is that a collateral mortgage can be registered for up to 100-125% (depending on the lender) of your home's value at closing, rather than only taking the amount needed. This allows for easier access to equity at a later date to consolidate debt, renovate, or purchase an investment property without having to consult a lawyer and pay legal fees. The drawback to a collateral mortgage is that it is not transferable to another financial institution at maturity, which takes away bargaining power for a lower rate. Mortgage rates are still at record lows for the time being, but it is difficult to predict where they are headed, so many home owners may want to keep their options open, rather than being locked into one lender for the duration of their mortgage. For more information about collateral mortgages, contact an Ottawa Mortgage Broker. February 13, 2013 On this week's Open House - The Real Estate and Mortgage Show, Frank Napolitano and Paul Rushforth join host Steve Gregory for an information-packed hour discussing all things real estate and mortgage related. A popular topic this week was mortgage renewals. Spring is right around the corner, which tends to be one of the most popular seasons for renewals. Frank advises listeners who have mortgages coming up for renewal to start preparations sooner rather than later. With mortgage rates still at incredible lows, it is beneficial to inquire about obtaining a rate hold. Home owners with mortgages coming up for renewal in as many as 4 months can hold a mortgage rate for that time period to protect against the possibility of climbing interest rates, and ensuring they will still have access to the lowest rate possible. Another advantage of a rate hold is that there is no obligation. If rates happen to decrease over the rate hold period, the client is eligible to take the lower rate. Talk to an Ottawa Mortgage Broker to find out more. Click here for the full Podcast from 580 CFRA. February 11, 2013 To buy first or to sell first? This is the eternal question for home owners who are considering a change. Finding the right option involves careful consideration of current market conditions and individual lifestyle and financial circumstances. Those who sell before buying may need to consider the possibility of renting for a period while finding a new home, especially if their lifestyle requires them to stay within their current neighbourhood. Proximity to work, and school, for those with children, are factors to take into consideration. It is also prudent to research local rental market conditions. Recent mortgage changes have forced many potential buyers to rent, thereby decreasing rental availability in many major cities across Canada. If a new home is purchased before the original property sells, affordability becomes the major concern. If the first property doesn't sell right away, the home owner is responsible for carrying the costs of both properties at once, which is not always a possibility. Bridge financing can be arranged in some cases, if it is simply a matter of closing dates not matching exactly, but this shouldn't be relied upon as the only option. (Bridge financing is only granted to those with a committed buyer.) Contact an Ottawa Mortgage Broker with any questions regarding this process. Click here for the full article from the Financial Post. February 6, 2013 This week, on the Real Estate and Mortgage Show, host Steve Gregory is joined by Frank Napolitano of Mortgage Brokers Ottawa and Paul Rushforth of Paul Rushforth Real Estate to discuss current mortgage and real estate topics, and take calls from listeners. On this week's show, the team discuss refinancing to save money, natural gas versus oil heating, investment properties, and much more. One of the callers on this week's show was curious if choosing natural gas over oil heating would increase the value of a home. A recent study showed that approximately half of all Canadians use natural gas to heat their homes, and it is definitely the more convenient and valuable choice. According to a statistic quoted on this week's show, natural gas furnaces are approximately 98% efficiency, while new oil furnaces are approximately 86%. For those who are interested in a home that happens to be heated with an oil furnace, it is strongly recommended to find out the age of the oil tank and give that information to the home insurer before waiving conditions. Many more questions this week concerned mortgage renewals. With an influx of mortgages approaching renewal, many home owners are looking to take advantage of current low mortgage rates. One caller wondered if a lawyer is required when renewing a mortgage and changing lenders. When a mortgage is up for renewal, whether keeping the original lender or switching to a new one, a lawyer is not required for the transaction. Frank reminds listeners that when looking to renew, the mortgage rates and terms are the most important focus, and should take precedence over lender loyalty. Talk to an Ottawa Mortgage Broker to find the mortgage that fits your life best. Follow the link for the full Podcast from 580 CFRA. February 4, 2013 Before applying for your first mortgage, one of the most important steps you will need to take is to make a detailed budget. While your mortgage payment is an essential factor in that budget, contributions toward savings should be part of it as well. In a recent piece from the Globe and Mail, personal finance columnist Rob Carrick introduces a new way to ensure your mortgage can fit your life, not the other way around. The Total Debt Service + Savings Ratio (TDSS) was introduced as a way to factor in saving by managing it along with more substantial life costs. Carrick created the calculator by adding savings, other debt repayment and non-essentials to the classic Total Debt Service Ratio (TDS) that lenders use to qualify you for a mortgage. The TDS determines if you are able to pay what you're planning on borrowing. By using the TDSS beforehand, you will have a clearer understanding of exactly what your output costs will be each month once you're paying down the mortgage for your dream home. For more information, talk to an Ottawa Mortgage Broker. Click here for the full article from the Globe and Mail. January 31, 2013 Click here for the full video from CTV Ottawa Morning Live. On this week's Mortgage Minute, unsecured debt, mortgage rates and mortgage advice are the main topics. If a home owner is planning to move in the next two years, or has only two years left on their mortgage, they will normally be encouraged to take a two year term when renewing. On this week's show, Frank advises viewers that with mortgage rates at historic lows, it may be more beneficial to take a five year term instead. The majority of mortgages are portable, so those planning to move in the near future can still have the advantage of their current low mortgage rate when they find a new home. For those who have less than five years left to pay their mortgage, it is recommended to calculate the interest savings of taking a five year rate and the possible penalty to pay it off early versus a possibly higher interest rate of a one or two year renewal. For more information, talk to an Ottawa Mortgage Broker. January 30, 2013 On this week's Real Estate and Mortgage Show, Erin Peck (Sales Representative Selling Partner) and Sara Orr (Closing Manager) from the Paul Rushforth team join Steve and Frank for another information-packed hour. January is normally not seen as a particularly busy real estate season, but with mortgage rates still at record lows, many home owners are breaking with convention and placing their homes on the market early. Erin and Sara remind sellers of the extra steps that should be taken when listing a home in the winter - such as ensuring the driveways and walkways are properly shoveled and salted, and re-setting your thermostat so the home is comfortable and warm to prospective buyers. Another hot topic this week is the rise in popularity of purchasing property to invest. With Ottawa's low apartment vacancy rates and higher-level incomes, more and more investors are turning to purchasing rental properties as an alternative to traditional investing. More than one caller on this week's show dealt with mortgage terms. Many home owners who are looking to move in a couple of years, or who have very little time left on their mortgage will tend to take a mortgage term that exactly matches the time they will spend in that particular property. Frank lets listeners know that with mortgage rates sitting as low as they are, it may be a good idea to take at least a 5 year term, regardless how long you may stay in that particular property. The majority of traditional mortgages are portable, and taking the longer term will ensure you have access to today's low mortgage rates for at least 5 more years. If there is very little left to pay on a particular mortgage, it is worthwhile to calculate the interest savings of taking a 5 year rate and the possible penalty to pay it off early, versus the higher interest rate of a 1 or 2 year mortgage. For more information, talk to an Ottawa Mortgage Broker. Click here to listen to the full Podcast from 580 CFRA. January 29, 2013 After abundant research and discussion, the list of possible team names for the recently announced Ottawa CFL team has been narrowed down to five. The search for a moniker that will embody the spirit and history of Ottawa has been a lengthy process, and the finalists are: Nationals Raftsmen RedBlacks Rush Voyageurs The Ontario Sports and Entertainment Group (OSEG) has been on the hunt for something unique and authentic that will hit home with Ottawa fans. In addition, the group would wish the ideal name to either be the same in French and English, or easily translatable. Some have argued that the Raftsmen and Voyageurs tend to hint at Ottawa's past, and the RedBlacks isn't so much a name as it is two colours. The RedBlacks, however, lends itself to endless options when it comes to choosing a team logo, seemingly making it a front-runner. It is also the name that has garnered the most attention, with varied reactions from fans on social media sites. Regardless of the outcome, the process has created a significant amount of buzz about Ottawa's new CFL team, set to take the field in 2014. Click here for the full article from the Ottawa Citizen. January 25, 2013 The results of a recent survey conducted by Equifax Canada, one of the major credit reporting firms, show that in the final quarter of 2012, the percentage of unpaid non-mortgage debt has decreased to 1.19% from the previous quarter's result of 1.22%. Among other factors, the introduction of new mortgage legislation this summer has contributed to an increase of  debt-awareness among Canadians in general. A client's credit history has become more important than ever when applying for a mortgage or personal loan, so many seem to be keeping a closer eye on their debt. The recent study shows that fewer Canadians applied for loans in the fourth quarter of 2013, but instead opted for utilizing the credit they already have access to. Recent reports have shown that the majority of Canadians have cited debt reduction as their main focus for 2013. Nadim Abdo, Equifax's vice-president of consulting solutions says, "People are (being) financially responsible. They have the facilities and they're just using them, versus just going crazy and getting those 25 credit cards like we used to back in the heyday". Click here for the full article from CBC news. January 24, 2013 According to a December survey conducted by Re/Max, the impending lift in Canada's housing market will be fuelled by experienced buyers. Findings also indicated that first-time buyers will make up a third of the market, and one in five will be single. As Gurinder Sandhu, executive vice-president and regional director of Re/Max Ontario-Atlantic Canada stated, "Purchasing patterns have evolved, with a more conservative, fiscally responsible purchaser moving to the forefront". Sandhu also noted that while some buyers are taking the opportunity to downsize, buyers that are planning to move up have accumulated significant equity in their existing homes. The overall impression of the survey is optimistic. "Regardless of income, gender, age, or location, most Canadian residents shared considerable confidence in Canada's housing market," Sandhu said. The survey was conducted in December, with 1,109 respondents. To discuss if now is the right time for you to enter the housing market, talk to an Ottawa Mortgage Broker. Click here for the full article from CTV News. January 23, 2013 Regardless of the cold snap blanketing Ottawa residents, many are already thinking ahead to the spring real estate market. Home owners placing properties on the market early in the year is just one of the many topics covered on this week's Real Estate and Mortgage show. Other topics covered this week include debt consolidation, first time buyers, investment properties, credit scores, and mortgage changes. On this week's show, Dorothy Smith and Kim Powell-Steele join the show, representing Mortgage Centre Ottawa, a division of Mortgage Brokers Ottawa. The duo take some time to talk about the importance of obtaining a pre-approval. Not only does a pre-approval ensure a smoother home buying process, it also gives buyers the benefit of the lowest mortgage rate available. Clients can obtain a rate hold for 3-4 months, and have the peace of mind that if rates do increase in that time period, they will still have access to their low rate. If rates fall however, clients can take advantage of even lower mortgage rates. The team also takes some time this week to talk about purchasing investment properties. Many home owners are using existing equity in their own homes to purchase investment properties. There has been much recent debate if investing in real estate is the better option to save for retirement, as the property value should only increase. Investors looking to purchase an investment property should be aware that mortgage qualifications and mortgage rates for an investment property are different than that of an owner-occupied property. Additionally, all lenders differ slightly on investment properties, so consulting an Ottawa Mortgage Broker is a good idea. Not only do they have a detailed knowledge of what each lender will need, they will walk buyers through the process and assist with any questions they may have. To listen to the full Podcast from 580 CFRA, click here. January 21, 2013 Whether you're saving for retirement, or a down payment on a mortgage, the eternal question seems to be the choice between Registered Retirement Savings Plans (RRSPs) or Tax Free Savings Accounts (TFSAs). The answer to this question is different for everyone, and the best way to get closer to knowing which to choose is by learning more about how each one works. Both RRSPs and TFSAs have contribution limits. The limit for the TFSA was increased in 2013, from $5,000 to $5,500 per calendar year. Any contribution room that is unused is carried forward and does not expire. Limits for the RRSP are significantly higher, over $22,000 in 2012, but vary depending on the investor and their contribution history. The RRSP Home Buyer's Plan is a program instituted by the federal government in 1992. The program allows a first-time home buyer to withdraw up to $25,000 from an RRSP to use towards the purchase of a home. The withdrawal must be repaid over the period of no more than 15 years. Access to funds from a TFSA is slightly easier to gain, and the funds do not have to be re-paid. It should be noted, however, that withdrawals can not be repaid in the same calendar year. These contributions are seen as over-contributions and may be subject to a penalty. To read the full article from the Financial Post, click here. January 18, 2013 Following the holiday season, most sellers will wait until February to put their homes on the market. This year, however, it appears that sellers are opting to get started a month early. The change, likely due to uncertainty surrounding the real estate market, gives prospective buyers an opportunity to find their dream home in a less busy season. This article provides helpful hints for both sellers and buyers looking to get started in the winter months. Winter, with all its snow and overcast days, can prevent a home from looking its best. If you are selling, step back and look at the property with a critical eye, and try to brighten the exterior with simple planters. It is highly recommended to remove Christmas lights and decorations from the house, as they may give prospective buyers the impression that the seller is not keeping up with the care of the property. It is a good idea to have photos available that showcase the property at its best, during summer and autumn, so buyers can see what's in store once the snow melts. If the property has a fireplace, ensure it is in good working order for any showings. The interior temperature should be comfortable and the lighting should be bright enough to compensate for overcast weather. Buyers should be mindful of what they are unable to inspect in the winter - air conditioning systems and swimming pools, for example. Buyers should consider placing a warranty clause in the purchase and sale agreement that gives them until May 1st to inspect and have the seller responsible for any damages. Have a look at the snow around the property and on the roof. Snow that appears to be evaporating faster from the roof than from around the home could be a sign of poor insulation. It is always important to have a thorough inspection done on the property, and an environmental audit may also be a good idea. Ask your real estate agent for the amounts of the latest electric or gas bills to check for energy efficiency. For more helpful hints regarding buying or selling in the winter, contact an Ottawa Mortgage Broker. Click here for the full article from Moneyville. January 17, 2013 Recent reports have shown that fewer Canadians are taking advantage of their RRSPs, leaving the country's unused contribution room at $500 billion. Additionally, a recent survey conducted by one of the major Canadian banks reveals that the majority of Canadians are listing eliminating debt as their priority for 2013. In this piece from CBC news, it is suggested that with today's low rate of return on RRSPs, paying down a mortgage is a more prudent way to invest. Despite talk that mortgage rates are set to rise in 2013, they still remain at a level low enough that gives home owners the opportunity to contribute more towards the principal and less interest with every payment. By utilizing additional methods such as accelerating mortgage payments or making lump sum payments, many Canadians are reducing their mortgages and building equity at a much faster rate. According to a report released in the spring by the Canadian Association of Accredited Mortgage Professionals, 83% of Canadians have at least 25% equity in their home. Try using an online mortgage calculator or contacting an Ottawa Mortgage Broker to find out what small changes can be made to build equity faster. Click here for the full article from CBC News. January 16, 2013 On this week's episode of the Real Estate and Mortgage Show, the guys tackle several issues that are top of mind for Canadians right now. This week's topics include locking in a low mortgage rate, first-time home buyers, investing in mortgages, and putting your home on the market. After recent activity in the bond market, it is anticipated that mortgage rates are set to rise in 2013, making now the time to lock in a low mortgage rate. Whether your mortgage is up for renewal in the next few months or not, it's worth calculating what the possible penalty would be to break the mortgage before maturity. If the penalty is less than the potential savings a lower rate would provide, an early renewal may be beneficial. Talk to an Ottawa Mortgage Broker for more details. Another hot topic on this week's show is investing in mortgages and real estate. It is believed in 2013, these methods of investing may outpace somewhat more traditional investments, as they offer a more attractive rate of return and more predictability for the investor. Click here to listen to the full Podcast from 580 CFRA. January 14, 2013 A new year has arrived, and so has the parade of resolutions many make to outline what they want the next year to look like. Many of the more common resolutions centre around diet or exercise, but a number of Canadians are making financial resolutions as well. From contributing more to a Retirement Savings Plan or a Tax Free Savings Account (TFSA,) to paying off a mortgage faster, most financial resolutions can be met in a similar fashion: baby steps. Not many Canadians have the ability to contribute $5,500 to their TFSA all at once, which is one of the reasons contributions can be spread over the course of the entire year. The same principle can be applied to a mortgage. Recent reports show that the majority of Canadians will be focusing on paying down debt in 2013. In an era of historically low mortgage rates, a larger portion of most home owners' mortgage payments are going towards the principal rather than paying down interest. This gives borrowers an advantage when looking to aggressively reduce their debt. Making small changes, like changing mortgage payments from monthly to bi-weekly, or saving small amounts over the course of the year to apply as a lump sum payment later, can significantly reduce the amount of interest paid over the course of a mortgage. Use an online mortgage calculator or talk to an Ottawa Mortgage Broker to examine different payment options. Click here for the full article from the Globe and Mail. January 11, 2013 Click here for the full video from CTV Ottawa. Ottawa Mortgage Broker Frank Napolitano sits with Kurt Stoodley to talk about the expected path of mortgage rates in 2013, the importance of shopping around for a mortgage rate, and consolidation of high-interest debt. Mortgage rates have stayed at historic lows for most of 2012, but are predicted to rise in 2013. Although the 2.99% rate is not expected to stay available, it is not expected that rates will rise significantly. Frank encourages home owners with mortgages coming up for renewal in the spring to start shopping for a mortgage rate now. A rate hold can be requested for up to 4 months, giving clients the ability to take advantage of mortgage rates at their current lows. Frank also highlights the importance of staying informed about your mortgage, knowing what your rate and terms are and what you can get. A mortgage is the largest debt you will ever carry, so education is key. For additional information or any questions, call an Ottawa Mortgage Broker. January 9, 2013 This week, the Real Estate and Mortgage Show rings in the New Year with a wealth of information. From the importance of a pre-approval and staying informed about your mortgage, to the future of mortgage rates and why you should consult a Mortgage Broker, this week's show is packed with important information. The first step for anyone looking to purchase a home should be not only to obtain a pre-approval, but to understand the difference between what you can afford and what you may qualify for. On this week's show, one of the main focuses is being informed about your mortgage. When making the transition from renting to buying, ensure you take into account not only what the mortgage payment will be, but the additional costs associated with purchasing a home. Maintenance costs, utilities, insurance, lawyer fees and land transfer taxes are commonly overlooked by first time home buyers. The mortgage regulations introduced this past summer have ushered in an age of credit, employment history and income becoming more important factors in applying for a mortgage. These are just a few of the many reasons to consult an Ottawa Mortgage Broker. To hear more, including the expected direction of mortgage rates in 2013, click here for the full Podcast. January 7, 2013 In the wake of widespread concern that Canadian household debt is at an all-time high, a recent report from the Canadian Association of Accredited Mortgage Professionals (CAAMP) paints a slightly different picture. Over the past 20 years, mortgage repayment periods have reduced to two-thirds of the actual contracted period. In addition, Canadians are using a variety of methods to accelerate their mortgage payments and reach mortgage freedom faster. Aggressively chipping away at debt is always a positive thing, however a closer look in some cases shows that these increased mortgage payments are causing other debts to be neglected. Outstanding balances on credit cards, lines of credit and car loans are often seen rising while the mortgage balance is falling. Mortgage freedom is tempting, but when it comes at the expense of paying more interest somewhere else, focusing on the mortgage payments doesn't necessarily make sense. Every individual financial situation is different, and where extra cash is allocated depends on the household. Use extra cash flow to reduce higher-interest debt or talk to an Ottawa Mortgage Broker about refinancing your mortgage to consolidate debt. Click here for the full article from the Globe and Mail. December 27, 2012 Click here for the full video from CTV. The holidays are fast approaching, and in the season of giving to others, many may forget to give back to themselves as well. Taking the time to sit down and review your finances can be an excellent way to give yourself an early Christmas present. Post-holiday bills can be a source of stress, so what better time to review the interest rates you are paying on credit cards and consider opening a lower-interest line of credit? On this week's Mortgage Minute, Frank and Kurt also take the time to talk about the effects of reducing the maximum amortization period from 30 to 25 years on insured mortgages. They also discuss the many benefits that are still available to first time home buyers, such as the $2,000 land transfer tax rebate and the RRSP Home Buyer's Plan. For more information about any of these programs, contact an Ottawa Mortgage Broker. December 19, 2012 According to Bank of Canada Governor Mark Carney, the mortgage regulations implemented earlier this year, combined with a tightening from Canada's central bank have significantly cooled the Canadian housing market. Carney believes the changes are pointing to a more sustainable Canadian housing market in the future, and he isn't the only one. His optimism is shared by Adrienne Warren, Scotiabank's senior economist who stated, "Canada's housing market so far appears to have acheived a soft landing, with cooler but fairly steady sales and pricing through the fall." Another encouraging factor in the housing market debate is the way Canadians have dealt with the repeated warnings that interest rates could rise. This year, the share of fixed rate mortgages has doubled to 90% - evidence that more Canadians are locking into a fixed rate mortgage to take advantage of today's record low mortgage rates. Click here for the full article from the Financial Post. December 18, 2012 A mortgage is the largest financial decision most Canadians will make, and proper planning is key. Many believe that after a history of poor credit, being approved for a mortgage becomes impossible, but this is not the case. It is highly recommended to meet with a professional Mortgage Broker who can assist you in making your dream of home ownership a reality. In the meantime, there are steps you can take to put yourself on the right path. The first step is to know where you stand in regards to your credit report. You can request a free copy of your report (or view it instantly online for a fee) from one of the major Canadian credit facilities; Equifax or TransUnion. Your report contains a history of all your current and past credit products, details regarding the payments you have made, and your personal score. A poor credit score can be anywhere between 300 and 560, while an excellent credit score ranges from 725 to 760 and up. 57% of Canadians are reported as having an excellent credit score. If you have other debts that need to be paid off, you will need to ensure your budget will support these payments along with a mortgage comfortably. Putting yourself in a tight financial position while attempting to repair your credit will do more harm than good in the long run. Use an online mortgage calculator to assess the payments for your desired mortgage amount, and talk to an Ottawa Mortgage Broker to see how those payments will fit into your budget. Click here for the full article from Moneyville. December 13, 2012 This week, the Canada Mortgage and Housing Corporation (CMHC) released their November report for new housing starts in Ottawa. Highlights of the report include: New housing starts in Ottawa were trending at 4,782 units in the month of November, according to the six month moving average. The standalone monthly figure for new housing starts in Ottawa was 3,942 units, up from 3,484 in the month of October. The bulk of the new construction was concentrated in the Kanata area, with a 50% increase in multiple starts compared with the same time the previous year. December 12, 2012 The recent slowdown in the Canadian housing market has sparked recent debate among economists, builders and the Canadian Association of Accredited Mortgage Professionals (CAAMP). Some believe the new mortgage regulations implemented this summer by the federal government are to blame, others believe the market was already slowing by the time the new regulations took effect. Some are calling for a reversal, and although it isn't out of the realm of possibility, Finance Minister Jim Flaherty has indicated he has no intention of reversing the rules anytime soon. "The government in general is walking a tightrope here. On the one hand they are concerned about household debt and all these insured mortgages. But on the other side, housing is an important contributor to the overall economy," stated Jim Murphy, chief executive of CAAMP. For more information on how the new mortgage regulations impact you, talk to an Ottawa Mortgage Broker. Click here for the full article from the Financial Post. December 11, 2012 TD Economics Data Release: The Canadian economy adds a whopping 59K jobs in November The Canadian economy added 59,000 jobs in November, following a lackluster performance in October. The unemployment rate fell to 7.2%, a drop of 0.2 percentage points, to the lowest level seen since June. Most of the gains seen in November were full-time positions (+55,000), as has been the case over the past 6 months. After falling in October, private sector (+48,200) bounced back strongly last month, while public sector and self-employed each added a modest 5,000 jobs. The increases in November were fairly widespread, though the services-producing sector (+65,700) was the bright spot. Accommodation and food services (+28,300) recorded the largest increase, marking only the third month of job creation in the sector this year. The trade sector (+25,300) also recorded outsized gains in November, the fifth increase in 7 months. Professional, scientific and technical services (+22,800) also rose for a fourth consecutive month, making up for some of the losses seen during the first half of the year. Declines in manufacturing (-20,000) and construction (-8,400) led to an overall decline in the goods-producing sector (-6,200). Regionally, employment growth was strongest in central Canada, with Ontario (+32,000) and Quebec (+18,000) posting the largest increases. Alberta (+10,000), and Manitoba (5,500) also increased hiring, while all other provinces saw little change. Hours worked bounced back 0.2% following a decline of 0.3% in October - the trend has been fairly flat over the past 6 months. Key Implications The strong gains in employment seen in November are not likely sustainable given the current sub-par economic growth environment. Last month's tally brings the 6-month moving average to 21,700 jobs - which is on the high side for an economy growing at around 1%. As such, it appears as though productivity will be weak in Q4, extending the downward trend seen over the last two quarters. Looking ahead, the job market will be facing several headwinds. The public sector is dealing with spending constraints which is likely to limit hiring prospects, while the private sector will continue to be faced with a slower growing economy. Add to that that persistent uncertainty surrounding global economic growth and the ability of policymakers in the U.S. to address their fiscal challenges, and businesses will not likely be rushing to ramp up their workforce. Once the external environment does improve - likely by mid-2013 - related sectors such, as manufacturing, will likely respond with increased employment. Overall, we expect employment to be fairly steady next year, increasing by an average of about 15,000 jobs per month, with the unemployment rate holding fairly steady. Dina Ignjatovic, Economist December 10, 2012 On this week's Real Estate and Mortgage Show, Steve Gregory sits with Paul Rushforth, of Paul Rushforth Real Estate and Frank Napolitano of Mortgage Brokers Ottawa to talk about the current real estate and mortgage market, the future of mortgage rates, and to answer questions. The gentlemen open the show by reviewing Ottawa's real estate statistics for the month of November, which point to a balanced market, despite speculation to the contrary. In the month of November, 931 homes were sold in Ottawa. The newly implemented mortgage regulations have cooled the market slightly, as November of the previous year saw 1023 homes sold. However, the figure comes in over the 5 year average of 890. Mortgage rates are still sitting at historic lows, with several lenders still offering 2.99%, and many home owners are making the switch from variable mortgages to take advantage of the low rates. Many believe interest rates could increase as early as 2013, so locking in for 5 years at a fixed rate as low as 2.99% gives peace of mind. Home owners are encouraged to talk to an Ottawa Mortgage Broker to review their options. Click here for the full Podcast from 580 CFRA. December 10, 2012 Mark Carney, the current governor of the Bank of Canada has recently announced he will be stepping down from his position next June, to accept the title of governor of the Bank of England. This announcement has caused speculation regarding the future of interest rates, but it is believed that a new governor will not have an effect on the way the institution conducts itself as a whole. Canada's central bank has a target of 2% for inflation, meaning that interest rates will be raised if that target is exceeded. With recent Canadian economic growth, it is predicted that inflation will rise into 2013, meaning there is a chance interest rates could rise. However, most economists are predicting a very moderate increase, meaning interest rates would still be sitting at historic lows. Louis Gagnon, a finance professor at Queen's University School of Business is careful to point out that any actions taken would be the same whether Carney was the central bank's governor or not. "I think the Bank of Canada as an institution, not only the governor, but the body, is hawkish. I'd be very surprised if they were to select someone who has a different philosophy, because that person would not sit well with that group of people,” Gagnon stated. For more information on how these changes could affect you, talk to an Ottawa Mortgage Broker. Click here for the full article from CBC News. December 7, 2012 Click here for the video from CTV Ottawa Morning Live. On this week's Mortgage Minute, Ottawa Mortgage Broker Frank Napolitano shares statistics from his recent visit to Vancouver for the annual mortgage conference. These statistics are a breath of fresh air, in the wake of a rush of negative headlines surrounding Canadian debt loads. Some of the highlights Frank shares: The total average equity of all the homes in Canada is currently sitting at 70%. In 2011, 25% of all refinancing was done to consolidate higher interest debt. 28% was used towards home renovations to increase property value. 22% was used to purchase an investment property, or help pay a child's tuition. 18% was used to purchase investments. December 6, 2012 A lucky hand in a game of poker benefitted The Ottawa Hospital Cancer Centre recently. When he won a 51-inch plasma television, Frank Napolitano wasn’t quite sure what to do with it, until he attended a President’s Dinner and learned that the CyberKnife radiation therapy bunker could use a television to distract patients receiving treatments. The TV, which would be installed on the ceiling directly above the patient, would allow the patient to watch TV while lying on their backs for treatment. It would replace the mural that is currently on the ceiling. “I thought it was a great idea,” said Napolitano, who had been a supporter of The Ottawa Hospital Foundation for over a year. A managing partner at Mortgage Brokers Ottawa, Napolitano had many reasons to be attracted to The Ottawa Hospital cause – he and his mother were both treated for illnesses there, and all three of his children were born at the Civic Campus. In addition, one of the company mandates at Mortgage Brokers Ottawa is to give back to the community. Often, anxiety and stress surrounds radiation treatment, said Dr. Jason Pantarotto, an oncologist at The Ottawa Hospital. “Sometimes treatments go beyond two hours, so we try to make the patients as comfortable as possible,” he said. “Distractions make the time go by faster, so something like this can go a long way.” December 3, 2012 This week on the Real Estate and Mortgage Show, several topics are up for discussion, including the future of mortgage rates, if it is in your best interest to break your mortgage in favour of a lower rate, and why it is important to consult a professional. Whether applying for a mortgage on your very first home, or renewing your mortgage for another term, many will consult the advice of friends and family, or simply take the same action they did 5 or 10 years ago. On this week's show, Frank and Chris illustrate the benefits of seeking the advice of a professional Real Estate Agent and Mortgage Broker. When purchasing a home, a Real Estate Agent will be an extremely useful guide, with knowledge on not only the properties you are viewing, but the various neighbourhoods as well. In the same way, a Mortgage Broker is a useful ally to have by your side in the mortgage application and approval process. With a wealth of knowledge on various products and services available to you, a professional Mortgage Broker will be able to find the mortgage that best suits your individual financial situation. For the full Podcast from 580 CFRA, click here. December 3, 2012 Click here for the full video from CTV Ottawa Morning Live. On this week's Mortgage Minute, Ottawa Mortgage Broker Frank Napolitano sits with Kurt Stoodley to talk about current mortgage rates. Rates are still sitting at all-time lows, and it is the belief of most economists that they will stay flat in the coming months. Many lenders are still offering mortgage rates as low as 2.99%, so now is a good time to lock in a fixed rate for 5 or 10 years. Frank also takes some time this week to talk about Mortgage Brokers Ottawa's involvement with the local community. Once again this year, we are participating in the Ottawa Food Drive. There are drop off boxes set up at each of our locations across the city accepting donations now. November 21, 2012 According to a recently released report from the Canadian Association of Accredited Mortgage Professionals (CAAMP,) 79% of all new mortgages taken out this year have been fixed-rate. A mere 10% were variable, and 11% are a blend of the two. With today's mortgage rates hovering around the 3% mark, it makes sense for Canadians to lock in a mortgage rate for 5 or 10 years rather than taking a fluctuating variable rate. Variable mortgage rates are connected to the lender's prime rate, which for the most part are near the 3% mark. According to the report, the average mortgage rate now sits at 3.55%, a significant decrease from last year, when it was 3.94%. The report, based on an online survey, also found that 87% of Canadians have at least 25% equity in their homes, and many Canadians are increasing mortgage payments or making lump sum contributions to decrease their mortgages faster. For more information about choosing between a fixed or variable rate mortgage, talk to an Ottawa Mortgage Broker. Click here for the full article from the Globe and Mail. November 20, 2012 This week on the Real Estate and Mortgage Show, Steve Gregory is joined by Chris Hoare, Sales Representative Selling Partner for the Paul Rushforth team and Lisa Theriault, Ottawa Mortgage Broker and Regional Partner from Mortgage Brokers Ottawa. Topics covered this week include investment properties, taking advantage of low mortgage rates, refinancing, and the holiday real estate market. Today's low mortgage rates combined with lowered apartment vacancy rates in Ottawa are making now the perfect time to purchase an investment property. The rate of return on investing is unpredictable, while a property is an investment you can live in that consistently builds value. A listener called this week to inquire about taking advantage of current mortgage rates, even though his mortgage is not maturing for another two years. For those in this situation, it is recommended to compare the possible penalty for breaking your mortgage early with the amount of interest you would save over the remaining term. Penalties can be added to the mortgage when refinancing, and if you are able to keep your payments the same with a lower interest rate, you will become mortgage-free even faster. Click here for the full Podcast from 580 CFRA. November 19, 2012 In recent months, headlines have been peppered with concerns about Canadian debt loads. The focus seems to be primarily on mortgage debt, as a mortgage is typically the largest debt most Canadians will take on. But what about credit card debt, with interest rates hovering around 19%? By only paying the minimum monthly payment, it can take years to pay off a credit card fully, and the average Canadian owes a balance on more than one card. This article from Moneyville shows easy ways for anyone to keep their high-interest debt under control. First, examine your spending. Making a detailed budget of what you spend each month is an easy way to see what can be cut out. Small changes can add up to big savings over the long term. Contacting your credit card company is also worth looking into. Some companies will negotiate lower interest rates or more convenient repayment schedules for loyal clients. Always remember the impact that credit cards have on your individual credit rating. Credit ratings are becoming even more important when applying for larger credit, such as a mortgage, so it is vitally important to keep your credit report clean. If you are unable to pay the full balance on your credit card, ensure you are at least paying the minimum payment, and making the payment by the due date. Late and missed payments have a negative impact on your credit rating. Last, but not least, if you have a card with no outstanding balance that you do not intend to use, contact the card company and close it. An active card with no balance still has an impact on your credit report. For more helpful information on keeping your credit rating under control, talk to an Ottawa Mortgage Broker. Click here for the full article from Moneyville. November 16, 2012 Deciding what to do with "found" money is never easy. This Moneysense article from Gail Vaz-Oxlade provides options to consider when trying to decide what to do with a lump sum: pay down your mortgage or invest? Mortgage rates are still at an all-time low, so if you have the opportunity to reduce the amount of your principal, why not do it now? If mortgage rates do increase in the coming years, the total interest you will end up paying on your mortgage will be reduced, along with the principal. Although the rate of return on investments is unpredictable, Vaz-Oxlade does suggest diversifying. If it is possible to put some money towards your mortgage and still have some left over to invest, you may want to consider doing so. However, peace of mind is important as well. The parting advice from Vaz-Oxlade? Do what is right for you. Click here for the full article from Moneysense. November 15, 2012 Last week, the Canada Mortgage and Housing Corporation (CMHC) held a housing outlook conference in Ottawa to discuss market trends, consumer preferences and forecasts for the upcoming year. At last week's conference, one of the most popular topics centered around first-time home buyers and the effects of the recently implemented mortgage regulations. It is believed that Canadian home buyers are becoming accustomed to the new regulations, and first-time buyers will not be pushed out of the market. Abdul Kargbo, a market analyst for the CMHC, stated that in the upcoming years, first-time buyers will most likely turn to townhouses or lower priced condominiums for affordibility. Kargbo believes that young urban professionals (25-34 with an average household income of $79,900) will lead the home-buying trend, and that in the coming years, Ottawa's housing market will continue to be "relatively stable." Click here for the full article from the Ottawa Citizen. November 14, 2012 On this week's episode of the Real Estate and Mortgage Show, topics include mortgage rates and how to obtain a rate hold, home staging, investment properties and credit scores. Many home owners don't know that they may be able to hold a great interest rate for up to four months before they actually have to renew. On this week's show, Frank reveals it is actually a very simple, no obligation process. Providing a basic application will allow your Mortgage Broker to hold the rate for up to 120 days, saving you from the possibility of rising rates. One of this week's callers was concerned with how a less-than-perfect credit rating would affect renewing his mortgage. Although having a good, clean credit report is becoming more and more important when qualifying or refinancing, it should not come into play if simply renewing a mortgage. A lender cannot refuse to renew your mortgage unless payments were missed. For more information, contact your Ottawa Mortgage Broker. Click here for the full Podcast from 580 CFRA. November 13, 2012 Your mortgage is likely the largest debt you will ever take on, and reducing the amount of time it takes to pay it off, as well as the total interest, is an attractive notion. This article from Robb Engen shows three simple ways anyone can do just that. Most mortgage agreements allow the home owner to pay 10-25% of the outstanding principal per year without a penalty. Engen suggests using "found money," such as a tax refund, to reduce the total amount of your principal. In turn, this will cut down on the total amount of interest you will pay over the long term. Another easy way to shrink your mortgage faster is to increase the amount you pay each month. There are two ways to achieve this goal. Increasing your payments by a certain percentage is something most lenders allow, however be aware of fees if you decide to change it again in the same calendar year. Another way to increase your monthly payment is to switch your regular payments to an accelerated weekly or bi-weekly payment. It is a good idea to consult a mortgage calculator before making these changes to ensure they fit your budget. For more tips on becoming mortgage-free faster, talk to an Ottawa Mortgage Broker. Click here for the full article from Moneyville. November 9, 2012 Click here for the full video from CTV Ottawa. On this week’s Mortgage Minute, we learn how to take advantage of today’s historically low mortgage rates to reduce the amount of interest paid over the life of the mortgage, and become mortgage-free even faster. Home owners who have mortgages approaching the renewal stage have the benefit of renewing during a period of low interest rates. In this video, Frank details a scenario in which a client renews at a lower interest rate, but maintains the amount they pay toward their mortgage regularly. This, coupled with making accelerated bi-weekly payments has not only saved the client thousands of dollars in interest, but has reduced their total amortization period by ten years. This is just one example of how making small changes can have a significant impact. By using an online mortgage calculator, it is easy to see how increasing your payments, or simply maintaining the payments with a lower rate can help you save. For one-on-one advice, contact an Ottawa Mortgage Broker. November 7, 2012 The Canada Mortgage and Housing Corporation (CMHC) has released it's quarterly report with market predictions for Ontario in 2013, including forecasted housing starts, resale activity and prices. Highlights of the report include: Softer pricing combined with an improving job market will lend itself to higher housing demand. Less sales of higher priced properties and a more balanced housing market will put less upward pressure on pricing. Mortgage rates are expected to stay low by historical standards. November 5, 2012 This week's episode of the Real Estate and Mortgage Show is full of helpful tips for buyers and sellers alike. From current mortgage rates to selling your home in the winter, this week's show is packed with information. With so many homes on the market, buyers are becoming more savvy in the search for their dream home. One of the topics this week is the importance of cultivating a relationship with a professional real estate agent who will learn your needs and find the properties that will fit best. They should also be on the lookout for red flags that buyers may often miss. One of this week's callers was interested in a rate hold on an investment property. Frank reminds potential investors to be aware that when purchasing an investment property, lending qualifications are different than for an owner-occupied property. Mortgage rates are traditionally slightly higher, and all lenders will require a minimum of 20% as a down payment. For more information, contact an Ottawa Mortgage Broker. Click here to listen to this week's full Podcast. November 5, 2012 Whether you're applying for a mortgage, or any other type of loan, a lender will need access to your credit file. Your credit file is essentially a report that shows how well you handle credit. It contains a listing of everything you owe, including credit cards that have no outstanding balance. It also shows a lender if you consistently pay your bills on time, or if you have any outstanding collections or bankruptcies. In this article from Moneysense, Gail Vaz-Oxlade cautions that although there are companies that will offer to fix your credit for free, it is often just as simple to fix it yourself. It is recommended to check your personal credit file every six months to ensure the information is correct and up to date. Acquiring a copy of your credit file is as easy as going online to one of the major Canadian credit bureaus: Equifax Canada Inc. or TransUnion of Canada Inc. Both companies will mail you a copy of your report to review at no charge. If there is any incorrect information, correcting the file is as simple as providing the company with proof. In the case that a credit file is less than perfect because of outstanding collections, late payments or bankruptcy, the only thing that will fix your file is time. For more tips on controlling your credit rating, talk to an Ottawa Mortgage Broker. Click here for the full article from Moneysense. November 2, 2012 Canadians who use natural gas to heat their homes are likely to continue to experience lower prices for this winter, according to industry statistics. The price to heat a home with natural gas has declined in each of the past 5 years, totalling a 32% drop in total. Approximately half of all Canadian home owners use natural gas, rather than oil or electricity, to heat their homes. According to this article from Moneyville, users of natural gas can expect to continue to reap the benefits. Although natural gas is the more economical choice, there are ways to cut your natural gas bill even more. Simple fixes like sealing cracks where heat could escape, opening drapes to heat with natural light during the day, ensuring furnace filters are clean and lowering your thermostat when you are away from home are all ways to lower your gas bill even more. Click here for the full article from Moneyville. November 1, 2012 Annual property tax assessments have been arriving in home owner's mailboxes in the recent weeks, and a common reaction has been shock. The assessed value of many properties has risen, however, this does not necessarily mean the property taxes will follow. In this article from the Financial Post, we learn how many home owners may be able to keep property tax costs low. It is important to remember that an increase of a certain amount in the value of your property does not automatically equate to the same percentage increase in property tax. The increases are determined from the average increase for the city. For example, if the value of your property increased by 10%, but the average increase in your city was higher, your taxes will not go up. Only those who see an increase in value higher than that of the average will see higher taxes. In essence, if you are facing an assessment that will bump up property taxes, you must prove your home is not worth as much as the assessment states to avoid a tax hike. Appealing an assessment is a common practice, and can cost between $30 - $1,000, depending on your province of residence. Before considering an appeal, ensure you are doing adequate research regarding the market values in your area. For more information, talk to an Ottawa Mortgage Broker. Click here for the full article from the Financial Post. November 1, 2012 Click here for the full video from CTV Ottawa Morning Live. In the recent months, there have been many changes and new guidelines put into effect in the mortgage market. The most recent, aimed at taming Home Equity Lines of Credit, has limited the maximum loan to value to 65%. (The former maximum was 80%.) Since the impending change was announced, several lenders have implemented it early, but the regulation is now in effect for all lenders. Frank also takes some time to talk about mortgages for the self-employed. Although the process to qualify for a mortgage in this case is slightly more complicated, Frank reminds applicants that it is still possible. Talk to an Ottawa Mortgage Broker who can navigate the process, handle the negotiations with the lender, and find the best rate with the terms that work for you. October 31, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve Gregory, Frank Napolitano and Paul Rushforth tackle many of the issues that are currently top of mind for Canadian home buyers, and home owners alike. For individuals with a home on the market, November is the time to get serious on price and staging. Curb appeal, staging and knowing the market value are more important than ever. As Paul suggests, sometimes very small changes can make a big impact. A fresh coat of neutral paint, updating light fixtures and even renting furniture are easy fixes that can make your home show better. It is also extremely important to know what your home is actually worth, and what other homes in the neighborhood are selling for. Pricing your home too high and making small price adjustments over time will only extend the period your home will stay on the market. Following an announcement from the Bank of Canada that the benchmark rate will once again be held steady at 1%, Frank discusses mortgage rates, and the importance of negotiation. Whether applying for a new mortgage or renewing, a slightly lower rate can make the difference of thousands of dollars over the long term. Frank suggests even clients that plan to renew with their preferred lender should shop their mortgage to an Ottawa Mortgage Broker first, which may allow them a chance to negotiate a better rate with that lender. Click here to listen to the full Podcast. October 29, 2012 In an interview with CBC Radio, Finance Minister Jim Flaherty indicated he has no plans to take further measures to cool the housing market. The latest changes, which included lowering the maximum amortization period for high-ratio mortgages and decreasing the amount Canadians can borrow to refinance their homes, were implemented in July and have shown that they are having the desired effect. Flaherty has shown satisfaction with the outcome of implementing these changes, most notably the slowdown in the condo markets of Vancouver and Toronto. Click here for the full story from Reuters Canada. October 26, 2012 There has been much recent speculation surrounding the direction of Canada's housing market. Warnings that Canada is heading for a market crash, and that Canadians are too indebted pepper the headlines. In this Financial Post piece, Benjamin Tal, deputy chief economist at CIBC shares his market insights. Tal acknowledges the likelihood of falling house prices, but predicts the decline will be much more moderate than what the U.S. experienced. "Panic is the worst thing that could happen because when that mentality sets in and people become irrational, it's hard to forecast how low prices will go," Tal states. His concern is that Canadians are 'talking themselves into a housing crash' by interpreting every statistic negatively and making constant comparisons to the U.S. This article also addresses the popular topic of debt. While the average debt to income ratio is now being measured at 163.4%, Tal points out that many of the individuals taking on debt are more equipped to service it. In addition, a recent study revealed that the net worth of the average Canadian is $363,519, and $269,024 (over 70%) of that average lies in real estate equity. For more information, talk to an Ottawa Mortgage Broker. Click here for the full article from the Financial Post. October 24, 2012 In a recent speech, Bank of Canada Governor Mark Carney promised transparency regarding the bank's decisions going forward. The Bank of Canada has announced they are yet again leaving their interest rate at 1%, but are hoping to address the uncertainty Canadians are feeling. The bank has left it's benchmark rate at 1% for 2 years now, but talk has hovered around raising rates since April of 2012, in the hopes of taming what was feared to be an emerging housing bubble. New mortgage regulations, implemented in July, are believed to have achieved this effect. Carney stated that raising interest rates was a "hypothetical question," but a solution that is not yet being ruled out by the bank. "The bank provides as much certainty as it can in the conduct of monetary policy," stated Carney. "While we obviously cannot determine events over which we have no control, we can be transparent about what we expect and how we would react to different scenarios." Carney also spoke about the effects of the global economy crisis on Canada, stating that the financial system in Canada is "among the most resilient in the world through crisis." Click here for the full article from CBC News. October 23, 2012 On this week's episode of the Real Estate and Mortgage Show, Ottawa Mortgage Broker Frank Napolitano sits with Steve Gregory and Erin Peck to discuss current hot topics in the real estate and mortgage market. This week we learn more about the purchase plus improvements program, household debt, capital gains and that Canadians have more equity in their homes than we thought. One listener's question dealt with avoiding paying captial gains when selling an income property. Although paying the capital gains themselves is unavoidable, there are many expenses that can be claimed during tax season. Expenses such as utilities, property taxes, condo fees, insurance and advertising all apply. Be sure to consult a tax professional with any questions regarding what can and cannot be claimed. To listen to the full Podcast from 580 CFRA, click here. October 22, 2012 Click here to watch the full video from CTV Ottawa Morning Live. If you're one of the many Canadians applying for a mortgage who is self-employed, part-time, seasonal or works a different number of hours each week, it may be challenging to produce the proof of income that a lender will want to see. Most lenders require two years history of income, and for those with an irregular income source, proving that can be difficult. In this week's Mortgage Minute, Frank talks about the different documentation you will need to provide depending on your income situation, and lets applicants know the process doesn't need to be a complicated one. A Mortgage Broker can not only let you know which documents are required depending on your income, but explain the reason why the lender needs it. October 17, 2012 This week's Open House - The Real Estate and Mortgage Show is full of terrific information for first-time home buyers. From choosing an agent to making an offer, many of the most frequently asked questions from first-timers are addressed this week. Before starting the search for your dream home, it is strongly recommended to get a mortgage pre-approval. Taking the time to consult an Ottawa Mortgage Broker will give you a budget to work with. There is nothing more disappointing than finding a home you love that is out of your price range. There are many factors when it comes to qualifying for a mortgage. The minimum down payment is 5% of the home's purchase price, but saving more if possible is always better. Minimum salary is more difficult to pinpoint, as it depends on the price of the home, your credit score, your other debts and how secure your employment is. A helpful recommendation is to budget based on your net income. This will give you a realistic picture of what you can actually afford. Click here for the full Podcast from 580 CFRA. October 15, 2012 Owning a rental property can be a terrific way to invest, but finding the right tenant isn't always easy. For those who end up with a problem tenant, there is assistance available. This recent article from Canadian Real Estate Wealth details the important steps to take if you find yourself in this situation. The first and possibly most important step is to be prepared. Evicting a tenant can be a lengthy and complicated process. It helps to be familiar with what is coming up, or consult someone who can assist. Contacting your local Landlord Tenant Board is normally the best course of action, as you will be in touch with qualified professionals who are knowledgeable about the process. Finally, don't hesitate to attempt to correct problem behaviour. Addressing your concerns promptly is important - waiting or ignoring the behaviour will only make it worse. Click here for the full article from Canadian Real Estate Wealth. October 15, 2012 According to recent statistics from the Canadian Real Estate Association (CREA,) Ottawa experienced a decrease in resale housing in the month of September. In September of 2012, 993 homes were sold through the Multiple Listing Service (MLS) compared to 1,201 in September of 2011. However, comparing the first 9 months of the year, 2012 comes out ahead with a 0.7% increase in sales. The slight decline is said to be influenced by a combination of newly introduced mortgage legislation and government job cuts, according to the Ottawa Real Estate Board. Despite the slowdown and rising prices, real estate officials remain optimistic. Ansel Clarke, president of the Ottawa board, released a recent statement stating the city historically seems to avoid large real estate swings. "The Ottawa market can be characterized as stable and steady, although there are pockets of our market area where we see larger increases in price," Clarke said. Click here to read the full article from the Ottawa Citizen. October 12, 2012 When buying a home, searching for the right one can be a long process. An open house tour is a great way to find multiple homes in your desired neighbourhood and price range. As we learn in this article from the Financial Post, if you know what to look for, an open house is a good way to determine how popular the property is, and if it's worth seeing again privately. For first-time buyers especially, open house tours are a good way to get started in the real estate market. There is no cost to tour houses, and it gives you a good idea of what's available and affordable before you apply for a mortgage. Aside from examining the property itself, it is recommended to keep an eye on the other shoppers. By paying attention to their behaviour, you will get a sense of how much interest there is in the property. Finally, it is important to come equipped with a list of questions you'd like to ask about the property, including how long the home has been on the market and why the seller is moving. To learn more, read the full article here. October 11, 2012 The Roof – Now is the best time to inspect the roof for missing or worn shingles to prevent roof leaks. If it is not possible to safely check the roof yourself, consult a professional to have a look. While you have the ladder out, have a look at the gutters. Scoop out any debris, clean the drains and downspouts. You may also want to consider installing gutter extensions to direct water away from the house. The Attic – Checking to make sure your attic is properly insulated will go a long way to keep the home warm in the winter months. Adding extra insulation may be required – a professional can be consulted to ensure your attic is up to code. Heat and Furnace Inspection – If you have a chimney, it is important to check for creosote and have the chimney swept, if necessary. Consider capping the top to keep any small animals out. Check around the home for any spots that would allow cold air entry and seal them off to cut down on heating costs. Call a professional to inspect the furnace, clean the ducts, and replace furnace filters. It is recommended the filters are changed every 4 to 6 weeks. If you don’t already have one, consider installing a programmable thermostat – another inexpensive and easy way to cut down on home heating costs. Plumbing – Preventing plumbing freezes is another important step in the winterizing process. Insulate any exposed plumbing pipes, drain garden hoses and locate your water main shut off in case of an emergency. Air conditioner pipes should be drained and the water valve shut off. Safety – Check all smoke and carbon monoxide detectors to make sure they are in good working order, and have extra batteries on hand. In case of emergency, ensure your fire extinguisher is in good working order and less than 10 years old. October 10, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve, Frank and Paul are joined by David Chilton, author of The Wealthy Barber and the newly released The Wealthy Barber Returns. The team talk about issues that are recently top of mind for many Canadians, and take questions from listeners. One of the hot topics on this week's show was Canadian debt levels. David weighed in on this topic, stating that although he believes debt is a concern, he also agrees that there are different types of debt. High interest credit card debt is a concern, especially for students who are just starting to build a credit rating and may not necessarily have the financial knowledge to manage their debt. David also points out that there are many Canadians who are able to service their debts, but have borrowed so much they are unable to contribute to their retirement funds or emergency savings. He stresses the importance of borrowing only what is needed, and borrowing for the right reasons. Click here for the full Podcast from 580 CFRA. October 9, 2012 One of the steps in applying for a mortgage is proving income to your lender. In the case of salaried workers, providing a recent T4 slip is often enough. But what about those who are self-employed, or rely on gratuity as part of their salary? This income contributes to their ability to afford a mortgage, yet doesn't appear on government forms. This article from the Globe and Mail shows that although the application process may be slightly different for the self-employed, it doesn't have to be stressful. When a lender is approached by a self-employed individual and cannot rely on what is referred to as verified income, they instead must work with stated income, which can be proven with tax returns, notices of assessment, contracts from the business or financial statements. The strength of the business must be assessed by the lender, as the business is what will supply the applicant's income in the future. This will determine the applicant's ability to afford the mortgage in the upcoming years. Some other examples of information that may be required: proof that GST or HST payments are up to date, business contracts to show expected revenue, personal and business credit scores, and proof of assets owned by the business. An easy way to make the application process smoother is to consult an Ottawa Mortgage Broker, who will get to know the client, their business and find out exactly which documents are needed to proceed. They will handle negotiations with the lender and find not only the best rate, but the most favourable terms. Click here for the full article from the Globe and Mail. October 5, 2012 In recent months, Canadians have been bombarded with warnings that they are too indebted, with debt-to-income ratios sitting at an average of 152%. Government officials are quick to blame mortgage debt, as a mortgage is likely the largest debt most Canadians will carry, yet it is also the only debt that gains value as it is paid down. Non-mortgage debt, like credit cards and car loans not only carry a higher rate of interest, but the goods purchased depreciate in value as soon as the owner takes posession. This recent article from the Financial Post shows that on average, the amount that impulse spending is costing Canadians each year is $3,720, building high-interest debt, and preventing many from accumulating emergency savings, or paying off other debts. A recent survey suggests that over the last 10 years, Canadians are spending more than they are saving, with 60% of respondents stating they will shop to eliminate a bad mood. On average, $310 per month is believed to be going towards impulse spending, and the majority of those surveyed said they would be likely to save a larger amount if they truly made an effort to limit their impulse purchases. Experts suggest using several available online tools to make a detailed budget, in the hopes of curbing the impulse spending habit. Click here to read more from the Financial Post. October 4, 2012 Click here for the full video from CTV Ottawa Morning Live. On this episode of the Mortgage Minute, Frank Napolitano talks about negotiating with your lender to get a better mortgage rate. Some Canadians are likely to disregard a savings of one tenth of a percentage point, which Frank believes is a mistake. The larger the mortgage, the more that one tenth of a percentage point will add up in interest costs over the mortgage term. This brings to light the importance of negotiating for the best rate possible. Many lenders will not offer their lowest rate up front, making negotiating a must to save what can add up to thousands of dollars in the years to come. For those who are less comfortable with the negotiation process, let a professional Ottawa Mortgage Broker do it for you! October 3, 2012 On this week's episode of the Real Estate and Mortgage Show, Steve Gregory and Frank Napolitano sit with Erin Peck and Sara Orr from the Paul Rushforth team to discuss mortgages and real estate. Topics this week include mortgages for the self-employed, mortgage rates and hiring the right real estate agent. In the Ottawa area, there is still a wide selection of homes for sale. This combined with low mortgage rates is creating a great environment for those who are looking into the mortgage application process. On this week's show, we learn about the different challenges self-employed individuals face when applying for a mortgage, and how a Mortgage Broker can help. Frank also takes some time to talk about mortgage rates, their anticipated direction, and variable versus fixed rates. This week, Erin Peck and Sara Orr from the Paul Rushforth team talk about the importance of hiring the right real estate agent, whether purchasing or selling your home. Hiring a team rather than an independent agent can have several advantages to the client. These advantages can include; a professional staging team, an increase in marketing for your property (if selling,) and an increased likelihood of reaching someone if the agent is occupied with another client. Click here to listen to the full Podcast from 580 CFRA. October 1, 2012 The Financial Consumer Agency of Canada (FCAC,) in partnership with the Investor Education Fund and l'Autorite des marches financiers, has released an online "Financial Toolkit" to assist Canadians with various questions regarding everyday financial situations. By accessing the FCAC website, participants can access the interactive toolkit, or view and print forms that can be used to manage finances. The toolkit includes helpful information regarding income, savings, debt management, mortgages, income taxes and much more. The site is part of the government's plan to promote financial literacy and assist Canadians in acquiring necessary life skills. To read the full article from the Financial Post, click here. September 27, 2012 Recently released data from Statistics Canada shows that a larger percentage of Canadians are choosing to purchase a home independently. According to the figures, 27.6% of Canadian households are singly occupied. Changing lifestyles, combined with low mortgage rates, are believed to be influencing the increase. This article from the Globe and Mail details the additional due diligence for those planning on applying for a mortgage on their own. Budgeting for the unforeseen is one of the most important factors in home ownership. Home maintenance, repairs and emergencies are costly and can add up. Not having the support of a second income makes having emergency savings even more important. Purchasing a home also brings a significant lifestyle change. A larger percentage of income will likely be allocated to mortgage payments, making it the number one priority. Some individuals will forgo larger expenses like travelling or owning a vehicle, or make small changes like cutting down on evenings out. Building a down payment is another hurdle for first time buyers. A larger down payment means less interest over the term of the mortgage, so experts suggest saving as much as possible. In addition to the down payment, closing costs, legal fees and other miscellaneous expenses must be accounted for. To find out more about the process of purchasing a home, contact an Ottawa Mortgage Broker. Click here for the full article from the Globe and Mail. September 26, 2012 This week on the Real Estate and Mortgage Show, Steve Gregory, Frank Napolitano and Paul Rushforth tackle many issues relevant to the current real estate and mortgage market. One of the main topics this week is investing in real estate. From using your RRSPs to fund a private second mortgage, to purchasing an investment property with the equity you have built in your home, we learn there are several options that can give a higher return on investment than RRSPs or mutual funds. For those looking to apply for a mortgage, a good credit score is becoming more and more crucial. On this week's show, Frank stresses the importance of paying close attention to your credit. Skipping credit card payments, loading cards to the maximum and having high balances on multiple cards are all practices that will damage your credit score. Click here to listen to the full Podcast from 580 CFRA. September 25, 2012 After the Canadian Real Estate Association (CREA) released statistics for the month of August showing a significant slowdown in home sales, many are believing the Canadian housing market is beginning to cool. The report, released last week, shows that home sales had fallen by 5.8% from July to August 2012. It is the hope that the decrease in sales activity will have a positive effect on the Canadian economy and banking system, according to a representative from Fitch Ratings. The slowdown seems to be driven in large part by new mortgage legislation that came into effect in July, boosting applicants in the time between the announcement and implementation of the rules. The changes, including lowering the maximum amortization period and increasing debt service ratios, are making it more important for mortgage applicants to pay close attention to their credit ratings, and perhaps strive for a larger down payment. However, home ownership is still within reach for first time buyers. Contact an Ottawa Mortgage Broker for more information. Click here to read the full article from the Financial Post. September 24, 2012 The Canadian Real Estate Association (CREA) recently released their resale housing statistics report, showing a decline of 5.8% in August, compared to the previous month. Although the decline is steeper than previous months, CREA's economists show optimism for a nationally balanced market. The latest round of mortgage regulation changes, implemented in early July, are believed to have fueled a surge of buyers hoping to apply before the rules took effect. This increase in demand in the early summer months inevitably led to what seems like a steep decline in August, according to CREA's Chief Economist, Gregory Klump. Click here to read the full report from CREA. September 21, 2012 When applying for a mortgage, the first feature that normally comes to mind is the mortgage rate. Although a low rate is important, there are many other factors to consider that can offer flexibility and help you pay your mortgage off faster. A variable rate mortgage can potentially save thousands of dollars of interest over the long term. A variable rate is set with the prime rate of the mortgage lender, and fluctuates according to market conditions. Many will choose a fixed rate for the comfort of knowing their monthly payments will always be the same, but it is possible to make fixed payments on a variable rate mortgage. If the interest rate increases, a larger portion of the monthly payment goes towards interest and vice versa. Using the fixed payment option gives the peace of mind of steady payments and the benefit of the lowest possible interest rate. An increasing number of homeowners are making extra payments to their mortgages to reduce their debt faster. Each mortgage will come with different repayment terms, and many lenders limit extra payments to 20% of the balance each year. Paying more than the maximum can come with a penalty, so it is important to note the specific terms before signing on the dotted line. The best way to ensure you are receiving the lowest rate possible with the most favourable terms is to consult a professional. An Ottawa Mortgage Broker will negotiate with lenders on your behalf to find not only the lowest mortgage rate possible, but the terms that best suit your financial situation. Click here to read the full article from Moneysense. September 20, 2012 As lending regulations become tighter, many potential home buyers find themselves in the position of being able to afford a mortgage, but may not qualify for one. A damaged credit report or insufficient employment history can affect an applicant's ability to obtain traditional mortgage financing, and renting to own can start to look like an attractive option. However, as we learn in this Moneyville article, a rent-to-own scenario benefits the homeowner rather than the renter. In a rent-to-own deal, the renter pays an inflated rate for rent, a percentage of which goes toward a down payment on the home. Ideally, at the end of the lease, the renter will be capable of qualifying for a traditional mortgage. It should be noted that depending on how the contract is drawn, a tenant can lose a large percentage of what they have invested if they decide to terminate the agreement, or make a late payment. Before considering renting to own, talk to an Ottawa Mortgage Broker to find out about alternative lending solutions. In some cases, it may be more suitable for a potential home buyer to wait the year or two it may take to save the extra money needed for a down payment, or repair damaged credit. Click here to read the full article from Moneyville. September 18, 2012 On this week's episode of The Real Estate and Mortgage Show, Steve, Frank and Paul talk about the transition into the fall real estate market, Home Equity Lines of Credit, refinancing after a separation, mortgage rates, and much more. One of the topics generating discussion this week was zero down or "cash back" mortgages. For many buyers, saving for a down payment is one of the most difficult steps in the home buying process. The option put forth by some lenders to obtain a mortgage without a down payment may seem like an attractive option to those who may have trouble saving. However, these mortgages come with a much higher interest rate, making saving for another year or two a viable alternative. As each individual household has a different financial situation, this illustrates the importance of seeking the individualized advice of a professional Mortgage Broker. Click here for the full Podcast from 580 CFRA. September 17, 2012 For many Canadians, fall means back to school, translating into empty rooms for parents of the post-secondary crowd. In this article from the Globe and Mail, Tim Cestnick talks about the benefits of renting out that available space, and what it means when tax time arrives. The most obvious benefit to renting a part of your property is the extra income, which can be used to accelerate your mortgage payments, save for retirement or use towards a child's education. In addition, when it comes time to prepare your income taxes, you will be eligible to deduct some costs that would be in your regular budget. These can include a percentage of the interest on your mortgage, property taxes, insurance, home repairs, utilities and much more. There are several regulations to be aware of as well, including the percentage of property being rented, structural changes, and reporting of income. It is recommended to consult a tax professional before commiting to renting out rooms. Click here for the full article from the Globe and Mail. September 14, 2012 On average, homeowners spend close to $2,500 per year on electricity, water and gas, costs that are likely to rise in the coming years. In this article from Moneysense, we learn about several easy and effective cost cutting solutions that everyone can put to work in the home. Installing a programmable thermostat is possibly one of the easiest ways to save. Installation is simple, the device itself is not expensive, and lowering your thermostat by only one degree can save 5% on your heating bill. Another surprising figure is the amount of heating and air conditioning is lost with small leaks in the home - approximately 30-40%. Simply sealing leaks with caulking or weatherstripping is a cost-effective fix that can save money over the long-term. Upgrading insulation in older homes can make a big difference as well, but with any larger home improvement project, it is a good idea to ask an expert before proceeding. If you are planning to do the work yourself, Natural Resources Canada offers a free online book: Keeping the Heat In. Slightly more expensive investments such as new windows, air conditioners, furnaces and energy efficient appliances will save energy costs as well, but it may take longer to recoup the benefits. For the full article from Moneysense, click here. September 13, 2012 Click here for the full video from CTV Ottawa Morning Live. This week, Frank Napolitano joins Kurt Stoodley of CTV News to talk about mortgage rates, first-time buyers and a brand new program that assists couples going through a separation. Among the mortgage regulations that came into effect July 9th was decreasing the maxmum loan to value when refinancing from 85% to 80%. However, couples who are separating will benefit from a new program that allows a refinance to a maximum of 95% loan to value, if one party wishes to continue living in the home. Couples wishing to take advantage of the new program should note that a legal separation must be in place, and can contact an Ottawa Mortgage Broker for more information. September 12, 2012 In an era of historically low mortgage rates, now may seem like the perfect time to purchase an investment property. Purchasing a fixer-upper for a low price and building equity as you renovate to re-sell at a profit is a great idea, but it isn't for everyone. This article from the Financial Post lists some points to keep in mind before taking the plunge. First and foremost, ensure the home undergoes an inspection. You need to have a clear understanding of exactly how much work has to go into the property before purchasing it, so you know how much money, labour and time you will need to invest. In addition to a detailed budget, you will need to know how many years you plan to commit to the property. If you don't see yourself staying for an extended period of time, it may not be for you. Once your plan is in place, buying a fixer-upper can benefit you greatly. Upgrades to popular selling features like the kitchen and bathroom can be easy ways to add value to the home. In addition, you have the freedom to personalize the property however you wish. The possibilities are endless. To find out if an investment property is right for you, contact an Ottawa Mortgage Broker. Click here to read the full article from the Financial Post. September 10, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve Gregory sits with Paul Rushforth and Frank Napolitano to talk about first-time homebuyers, the future of mortgage rates, educating students on money management, and much more. For many students in their first year of college or university, this month will mark their first time away from home for an extended period. Many lenders are known for setting up on campus and offering student credit cards, prompting a discussion about ensuring students are well informed in the matter of money management. The average student will emerge from their tenure at a post-secondary institution with a debt of approximately $27,000. Applying for a mortgage may seem far off for a student just starting out, but credit mistakes can take years to correct. It is important for students to learn budgeting basics, and be accountable for their credit. Click here to listen to the full Podcast from 580 CFRA. September 10, 2012 According to a recent survey, the majority of Canadians who currently have a mortgage expect to have it paid completely by age 55. Mortgage freedom is a desirable option, and with mortgage rates at an all-time low, now may be the optimum time to achieve this goal. Canadians are taking advantage of several different repayment options to pay their mortgages off faster. These include accelerating payments to weekly or bi-weekly rather than monthly or making lump-sum payments. Many are doing both. However, putting all excess funds towards one asset may not be the best option for everyone. This article from Moneyville shows the benefit of putting some money aside to invest for the possibility of earning a higher rate of interest. Each financial situation is different, so to find a repayment plan that works for you, talk to an Ottawa Mortgage Broker. Click here to read the full article from Moneyville. September 6, 2012 Mark Carney, governor of the Bank of Canada announced Wednesday that the central bank will again leave the benchmark rate at 1%. The rate has remained unchanged since September of 2010, making this the longest period rates have remained unchanged since the 1950s. Taking into account the current state of the global economy, this decision does not come as a surprise to economists, saying the Bank of Canada had little choice but to leave the rate unchanged. The central bank first hinted at the possibility of raising rates in April, in hopes of taming what was believed to be a housing bubble. The belief is that continued warnings of rising rates, combined with recently implemented mortgage regulations will accomplish the goal without boosting the overnight rate. Click here for the full article from the Globe and Mail. September 5, 2012 Among the topics discussed on this week's episode of Open House - The Real Estate and Mortgage Show are mortgage rates, rural properties, and what steps to take to make sure your home sells now. With back to school top of mind for many Canadian families, many are wondering if now is the best time to put their house on the market. On this week's show, listeners learn that although we are trending towards a buyers market, it can still be a good time to list your home. The most important thing to remember is that with multiple homes on the market, the standout homes are the ones that will sell first. Thoroughly research homes for sale in your area and how they are priced, and hire a real estate agent with a detailed marketing plan. Another important issue discussed this week is the importance of your credit score when applying for a mortgage. Ottawa Mortgage Broker Frank Napolitano stresses that one shouldn't wait until their credit is bad to fix it. As lending regulations tighten, a good credit score becomes even more important. Click here to listen to the full Podcast from 580 CFRA. September 4, 2012 Recently released reports have shown that Canadian home prices are still climbing, up 0.7% in July from the month before. The Teranet-National Bank Composite Price Index measures changes in price for single-family resale homes. The same report states that home prices have risen 4.8% from July 2011. Despite these reports, the trend of rising home prices is not expected to continue, taking into account tighter mortgage regulations which were intended to cool the housing market. In Wednesday's report, Teranet stated that a further decline in prices is expected in the coming months. It is believed that the hot Toronto market is helping to fuel the climbing average, and excluding the metropolis would show a more even national price average. The monthly price gain in Toronto was 1.6%, while Ottawa/Gatineau came in at 0.4%. Click here for the full article from the Financial Post. August 31, 2012 A recently released survey shows that only 47% of those polled have a Tax Free Savings Account (TFSA.) Out of that 47%, only half stated they have made a contribution to the account this year. Evidence from other surveys conducted over the past few years suggests that the reason for the low level of participation stems from a lack of understanding regarding how the accounts actually work. TFSAs were introduced in 2009, and allow savings contributions up to $5,000 per calendar year. The interest accumulated on the savings is tax-free and any unused contribution room can be carried forward to the next year. Interest rates on TFSAs tend to be slightly higher than those of traditional savings accounts, making them the perfect vehicle to save for retirement, or for the down payment on a mortgage. As with any savings plan, having a clear goal in mind will produce the best results. For more information about TFSAs and how they work, visit The Government of Canada's website. Click here for the full article from the Globe and Mail. August 30, 2012 Click here for the full video from CTV Ottawa Morning Live. As of October 31st of this year, new lending regulations will limit the amount for Home Equity Lines of Credit (HELOCs) from 80% to 65% of the home's equity. Although two months remain until the deadline to put the regulation into effect, we learn that two major lenders have implemented it already. It is believed other lenders will soon follow suit. In this video, Ottawa Mortgage Broker Frank Napolitano sits with Kurt Stoodley to discuss the new regulation, and the effects on Canadians who have built equity in their home with the intention to use it to fund investment properties. In light of recent reports regarding Canadian household debt levels reaching a new high, the pair also discuss what is fuelling the increase in non-mortgage debt. August 29, 2012 On this week's episode of Open House - The Real Estate and Mortgage Show, Steve Gregory and Frank Napolitano are joined by Erin Peck (Sales Representative Selling Partner) and Sara Orr (Closing Manager) from the Paul Rushforth Team. As of October 31st, lenders will be placing a new restriction on lines of credit. The new regulation will limit borrowing for lines of credit to a maximum of 65% of the home's equity. In this week's Podcast, we learn that one major lender has already implemented the rule, and other lenders are likely to follow suit. Another lending guideline that is set to be implemented by the end of October deals with mortgage penalties, and making the process of calculation more clear. Once this takes effect, the lenders must disclose the procedure by which the penalty is calculated, a clear description of the factors used in the calculation and an easy formula that allows the mortgage consumer to calculate it themselves. For more information on the new processes, contact an Ottawa Mortgage Broker. Click here for the full Podcast from 580 CFRA. August 27, 2012 Closing day is the final step in the exciting process of purchasing a home. With so many factors involved, there is the possibility for problems to occur. In this article from Moneyville, Mark Weisleder, a Toronto real estate lawyer, shows readers the measures that can be taken to ensure a smooth closing day. From the sellers forgetting to leave keys to open certain doors, to a dirty house or missing fixtures, we learn that there are processes to prevent undesireable happenings on closing day. Bills for emergency locksmiths or cleaning services can be sent to the seller, in some situations, and clauses can be included in the purchase contract that stipulate the condition the home is to be left in. Any changes made to the contract that will affect financing should be brought to the lawyer's attention immediately. This prevents any surprises on closing day, including closing dates not matching up. To avoid this stress, it may also be a good idea to talk to your Ottawa Mortgage Broker about bridge financing, a loan to cover closing costs that is paid off within a matter of days. Click here for the full article from Moneyville. August 24, 2012 The results of a July survey show that 53% of Canadians are planning to continue working after retirement, for various reasons. 29% were unsure and 14% stated they would definitely cease working. 37% of respondents who will continue to work say they plan to do so part-time. The face of retirement is changing, and an increasing number of Canadians are reaching retirement and finding they do not have access to the funds they thought they would. This, combined with rising home prices and the possibility of entering retirement with a mortgage is causing those approaching retirement age to explore their options. The survey showed that residents of Manitoba and Saskatchewan are the most likely to work post-retirement, at 59%, and residents of Quebec are the least likely, at 47%. Residents of Ontario were close to the national average, with 55% of respondents claiming they will work after retirement. Click here for the full article from CBC News. August 22, 2012 Before settling on a home, and finalizing mortgage funding, a home inspection is an absolute necessity. One of the most important issues explored in a home inspection is potential water damage. A thorough home inspection can save time, and costly repairs in the future. This article from the Toronto Star's Moneyville gives a list of items home inspectors and potential owners alike should be aware of to prevent water damage. Ensuring the roof is in good shape is of extreme importance in a home inspection. Necessary roof repairs can go unnoticed, and will tend to be expensive to fix, so ensure the home inspector looks at the roof. Asking the approximate age of the roof can be helpful as well, as most roofs are not meant to last more than 15 years. Water in the basement is another potential issue no home owner wants to encounter. Check for cracks in the foundation, the slope of the ground around the house, rust stains, mould and water marks. Recent basement renovations are also something to keep an eye on. Some sellers may be trying to inexpensively cover damage. Finally, a detailed inspection of the plumbing is a must, including checking for sewer backups. In this article, we learn that clients can have a video made of their sewer system to check for future issues. It is important to remember that not every home inspector will have the same checklist, so buyers are encouraged to do their own research, and ask for referrals from Mortgage Brokers, Real Estate Agents or Lawyers. Click here for the full article from Moneyville. August 21, 2012 On this week's episode of Open House, Steve and Paul are joined by Ottawa Mortgage Broker Mike Hapke. The group discuss mortgage rates, refinancing, and investing in real estate. With interest rates still at all-time lows, purchasing a property to rent is still a smart way to invest. However, this week, we learn about alternative options to investing for those who may not wish to be a landlord. Investing in mortgages is an investment strategy that can be utilized in multiple fashions. One way for investors to build wealth is to use existing RRSPs to invest in second mortgages. As the interest rates charged on second mortgages tend to be higher than traditional mortgage rates, the investor stands to gain substantially more than they would otherwise. For more information, visit the website for Advanced Private Lending. To listen to this week's Podcast, click here. August 20, 2012 The decision to purchase a home takes careful consideration and a fair amount of research. However, despite the knowledge that a mortgage is the largest debt for most people, there are several who find they did not research it as thoroughly as they should have. The Financial Post reports that 60% of those polled in a recent survey stated their two main financial regrets were not saving a large enough down payment and not sufficiently researching the costs of home ownership. While the majority of first-time buyers are familiar with home prices, the additional costs are surprising to many. In the same survey, 29% of respondents didn't budget for ongoing costs such as home maintenance fees.1 in 8 admitted to neglecting to budget for some of the one-time costs that go hand-in-hand with a home purchase, including legal fees, land transfer tax, title insurance or the cost of a home inspection. While low mortgage rates are making home ownership more affordable, prospective buyers still need to be prepared for the responsibility that comes along with it. First-time buyers, and seasoned buyers alike, have access to a wealth of information and advice from Mortgage Brokers, Real Estate Agents, and even friends or family who have gone through the process. Click here for the full article from the Financial Post. August 17, 2012 Click here to watch the full video from CTV Ottawa Morning Live. For those who are self-employed, obtaining a mortgage is a slightly different process. In an era of changing mortgage regulations, and many lenders tightening their lending criteria, some self-employed individuals are finding it difficult to obtain financing. In this week's Mortgage Minute, Frank Napolitano sits with Lianne Laing to talk about mortgages for the self-employed. For those who are in business for themselves, proving income to a lender becomes slightly more complicated. Even though the net income may be more than enough to qualify, a standard tax return will not always show it. Therefore, other factors become more important. For instance, a lender may ask for financial information from the business, to ensure income is stable. Applicants need to be mindful that a good credit score and larger down-payment will also be helpful. For qualified advice, contact an Ottawa Mortgage Broker. August 15, 2012 On this week's episode of Open House - The Real Estate and Mortgage Show, Steve Gregory sits with Paul Rushforth and Frank Napolitano to discuss the evolving real estate and mortgage market. The first option most buyers will choose when obtaining a mortgage is their bank. But what happens when the bank is unable or unwilling to provide financing? Ottawa Mortgage Broker Frank Napolitano reminds listeners that seeking the advice of a Mortgage Broker is a viable option, regardless of your financial situation. Mortgage Brokers have access not only to major lenders, but to alternative and sometimes private lenders, availing multiple options for every borrower. The busy spring real estate market has stretched well into the summer, and buyers have access to seeminly endless options. This makes it more important than ever for sellers to pay close attention to pricing and condition of their homes. This week, a caller inquired about air conditioning as an upgrade to add value to a home. While air conditioning is a good upgrade, a seller should not expect it to add any value, as it is something potential buyers will now expect. Tangible upgrades include kitchen and bathroom renovations, pot-lights and crown mouldings. Click here to listen to the full Podcast from 580 CFRA. August 13, 2012 Recently released statistics from the Ottawa Real Estate Board show that despite the changes to mortgage regulations, the Ottawa market remains stable. This article from the Ottawa Citizen shares the highlights of the report. In July, 1,366 homes were sold through the Multiple Listings Service, an increase of 3.4% over July of last year. The average home price has declined to $337,518, while April's average was $364,077. It is suggested that the rapid sale of lower priced properties, combined with higher priced properties staying on the market longer, is contributing to this decline. This article also shares statistics from Vancouver and Toronto Real Estate Boards. Vancouver's sales have fallen 11.2% from June's results, but home prices are not showing a significant decline. Toronto sales fell 1.5% in July, a decline that is believed to be connected with the slowing demand for condominiums. Click here for the full article from the Ottawa Citizen. August 9, 2012 In a recent announcement, Finance Minister Jim Flaherty stated that the recent changes to the mortgage lending process have had the desired effect, and that further measures in the near future should not be necessary. Canada's housing market and steadily rising home prices have been a concern for the government, sparking a series of tightening regulations, the most recent of which include decreasing the maximum amortization for high-ratio mortgages and lowering the amount Canadians can borrow to refinance their homes. After the regulations took effect July 9th, Flaherty has shown satisfaction with the changes, and is now expected to focus on economic stimulus and balancing Canada's budget. Click here for the full article from Canadian Real Estate Wealth. August 8, 2012 On this week's episode of The Real Estate and Mortgage Show, Steve Gregory, Paul Rushforth and Frank Napolitano discuss mortgage rates, recreational and income properties, transferring mortgages, and much more. Mortgage rates are still sitting at historic lows, and Ottawa Mortgage Brokers have access to lenders with a 5 year 2.99% option. Taking advantage of these low rates is beneficial, especially with a 25 year amortization period that will allow a larger percentage of the mortgage payments to go towards the principal. Frank does advise clients taking advantage of these rates that after the 5 year term, mortgage rates will likely be higher, and there will be a difference in the monthly payments. For the full Podcast from 580 CFRA, click here. August 7, 2012 We are very pleased to announce the official launch of the Mortgage Brokers Ottawa App for Blackberry! Key features of the app include: Mortgage payment calculation for all payment types (including bi-weekly accelerated and bi-weekly regular payments) Calculation of Land Transfer Tax and Default Insurance (ie CMHC) to assist our clients in more detailed budget planning. Live Rates – Clients can log in and access our best current mortgage rates. And much more! The app is a free download from Blackberry App World. Click here for the free download. iPhone and Android users, keep an eye out, the app will be available for these devices soon! August 7, 2012 With the newly implemented mortgage regulations now in effect for almost a month, real estate and mortgage professionals have an optimistic view of the outcome. In this article from Ifpress, Ron Abraham, president of the Ontario Real Estate Association, and Bob Jablonski, president of the Calgary Real Estate Association, share their market predictions. While the move to reduce the maximum amortization period on insured mortgages from 30 to 25 years may make it difficult for many first-time buyers, it is speculated that the effects will be positive in the long-term. "Homebuyers may need to reduce their expectations, Jablonski said. "Sellers need to be realistic in their asking price. Every buyer I've ever known wants to get it for less." Prospective home buyers should consult a qualified Mortgage Broker for mortgage advice. Recently released statistics from the Canadian Real Estate Association (CREA) point towards a balanced housing market. Listings in the Toronto area have increased, which is believed to lead to more balanced conditions, while low sales in the Vancouver area have caused the Real Estate Board of Greater Vancouver to announce a "buyer's market." To read the full article from Ifpress, click here. August 2, 2012 Click here for the full video from CTV Ottawa Morning Live. After much speculation surrounding the effects of the new mortgage regulations, we learn that the outcome is not necessarily all negative. The busy season for the mortgage market remains busy with purchases, renewals and refinances. Ottawa Mortgage Broker Frank Napolitano is optimistic, stating that mortgage rates are remaining at all time lows, and hinting that further decreases may be on the horizon. Frank reminds clients that a mortgage is your single largest debt, so why not take advantage of the opportunity for the lowest possible rate? It is a common misconception that holding a mortgage at a certain financial institution requires you to bank there as well, and this is not the case. For more information, contact an Ottawa Mortgage Broker. July 31, 2012 In Wednesday's press conference following the Bank of Canada's announcement, Governor Mark Carney expanded on points from Tuesday's statement that the main interest rate would remain at 1%. In this article from the Ottawa Citizen, we learn that the central bank's view of the Canadian economy remains optimistic, and that the European debt crisis is expected to remain contained. Although other central banks are lowering rates, the Bank of Canada is standing firm at 1%, stating that this rate is already "very low." Carney dismissed views that not lowering rates will isolate Canada from other major economies, stating, "We make policy for conditions in Canada ... Global monetary policy is not a cut and paste." Carney also commented on household debt, specifically mortgages. The recent low interest rates were meant to fuel economic recovery following the 2008/09 recession. While this goal was achieved, it also lent itself to unsustainable household debt in some cases. The importance of responsible borrowing and lending was stressed, and Carney went on to say that the newly implemented mortgage regulations were intended to help consumers, and narrow the gap between income and spending. For the full article from the Ottawa Citizen, click here. July 19, 2012 Yesterday's announcement from the Bank of Canada left several investors wondering why Governor Mark Carney is still hinting at increasing interest rates, the Financial Post reports. Amid reports that the central banks for the U.S., Europe and China are all easing monetary policy, many were surprised to see Canada move in the opposite direction. Today's monetary policy report is expected to elaborate on many issues discussed in yesterday's announcement, including the Bank of Canada's forecasts for the Canadian economy. Yesterday, we learned that the projections for 2012 and 2013 dropped from 2.4% to 2.1% and 2.3%, respectively. Despite hints toward rising rates, economists and investors alike are skeptical about any action being taken this year. It is believed, however, that a rate reduction is unlikely. For more information on how this affects you, contact an Ottawa Mortgage Broker. For the full article from the Financial Post, click here. July 18, 2012 The Bank of Canada made the decision to leave its main interest rate unchanged for the 15th consecutive meeting. This decision was anticipated by many financial analysts, amid discussions surrounding whether or not the Bank of Canada would rescind its hints that a rate hike "may become appropriate." This article from the Globe and Mail shares the highlights of Tuesday's report. Bank of Canada Governor Mark Carney repeated his statement from the previous rate announcement: that rate hikes "may become appropriate" depending on "domestic and global economic developments." He also lowered his forecast for the Canadian economy, expecting it to be back at full capacity in the latter half of 2013 rather than the early months. The Canadian economy's forecast for growth is now predicted to be 2.1% this year and 2.3% in 2013, a slight departure from the 2.4% prediction from April's report. The report did mention a slowdown in the housing market, although the new mortgage regulations were not mentioned. Carney did state however, that low borrowing costs will help consumption and drive growth. For more information, contact an Ottawa Mortgage Broker. Click here for the full article from the Globe and Mail. July 17, 2012 On this week's episode of The Real Estate and Mortgage Show, Steve, Frank and Paul discuss several issues related to the real estate and mortgage market. One of the topics discussed this week is assessing the value of your home with an appraisal. Bank ordered appraisals will use recently sold comparable properties to assess the value of a home. It is very important to note that comparable properties should be sold within 90 days of the appraisal to be considered relevant. A home sold outside of the 90 day time period should not be considered as a comparable property as the real estate market changes so constantly. Another important factor to consider is that an appraiser will only assess the value of the home itself. Pools, outbuildings and extra acreage are not considered as part of the appraisal. It is important for the lender to receive an accurate assessment of the real value of a home; if a borrower defaults and the bank has to sell the home to recover the value, it is vital that the appraiser has valued it correctly. For more information, contact an Ottawa Mortgage Broker. Follow the link for the full Podcast from 580 CFRA. July 16, 2012 One of the most important parts of putting your home on the market is making it appealing to the widest possible range of potential buyers. Neutralizing your home has proven to be the most effective way to do this, spurring the ever-growing business of home staging. As a result of record-low mortgage rates and changing lending guidelines, there are more and more listings on the market, making the competition much greater. This article from the Ottawa Citizen gives some helpful hints to effectively stage your home to sell. Packing away and storing superfluous personal items should be the first step for any seller. Potential buyers will want to imagine themselves living in your home, so it should be not only neutral, but also have space for them to grow. Cleaning closets, cupboards and drawers is also important. Interested buyers will look in closets and under sinks. Family photos and personal art should also be removed. Professional home stagers will say that these items have the potential to distract buyers into thinking about the people living in the home, rather than the home itself. In this article, we also learn what neutral paint colours are the best to use, whether or not to paint the ceilings, and what exactly to do with the front entrance. For the full article from the Ottawa Citizen, click here. July 13, 2012 Analysts have discussed a decline in home prices of 10-15% being possible, but as Canada's unemployment rate falls, a housing crash is unlikely. This article from the Globe and Mail gives five examples of why a slight decrease in home prices can be a good thing. The introduction of a maximum 25 year amortization for high-ratio mortgages has made many first-time buyers think twice about home ownership. Reducing the amortization period will increase mortgage payments and make it more difficult for first-timers, a demographic that makes up for a large percentage of the housing market, to qualify for a mortgage. If home prices do decrease, the dream of home ownership becomes more reachable for some. Other reasons falling home prices aren't necessarily bad news include a possible decrease in competition for housing, from both foreign investors and those who are entering the housing market simply because of low mortgage rates. Lower home prices are also good news for those looking to purchase an income or investment property, giving a possibility to buy at a low price and sell when prices increase. For more information, contact an Ottawa Mortgage Broker. To read the full article from the Globe and Mail, click here. July 12, 2012 Click here for the full video from CTV Ottawa Morning Live. On Monday, July 9th, the four new lending guidelines announced by Jim Flaherty were implemented. Possibly the most discussed change is the reduction of the maximum amortization period on an insured mortgage to 25 years. What this means to the average home buyer is that a 20% down payment must be made in order to avoid default insurance fees and to obtain a 30 year amortization. Going forward, any homes that are purchased with less than 20% down will automatically be amortized over a maximum of 25 years. Although this change is forecasted to significantly impact the housing market, there are still options available for all buyers. For more information, contact an Ottawa Mortgage Broker. July 11, 2012 Four major changes to the lending process were announced June 21st by Finance Minister Jim Flaherty, yet a recent survey reveals that approximately 49% of Canadians still aren't familiar with them. This article from the Globe and Mail shares the statistics. The changes include: reducing the maximum amortization period on an insured mortgage from 30 to 25 years, capping refinancing to 80% of a home's value, fixing the gross and total debt service ratios and disallowing homes over $1 million to be eligible for default insurance. The changes take effect today, July 9th, and among those surveyed, 26% still think the maximum amortization period is 30 years or longer. One thousand people took part in this survey, conducted in late June and early July. 66% of respondents believe themselves to be up to date on the changes. For more information on the new lending guidelines, talk to an Ottawa Mortgage Broker. For the full article from the Globe and Mail, click here. July 9, 2012 This week on The Real Estate and Mortgage Show, Steve Gregory and Frank Napolitano are joined by Erin Peck and Sara Orr, two members of the Paul Rushforth Team. They discuss the after-effects of the last week before the new mortgage regulations came into place. Other topics on the table this week include appraisals, home staging and the importance of consulting professionals when applying for your first mortgage. From Real Estate Agents and Home Stagers to Mortgage Brokers, there are several professionals available to assist you in making a home purchase. Whether it's your first or your third, buying a home isn't a simple process, and certainly not one the average Canadian is familiar with. One of the major topics discussed on this week's show is the many ways professionals can assist. The services of Real Estate Agents and Mortgage Brokers are free for home buyers in most situations, and gives clients the benefit of years of experience. From assisting you to align your budget correctly to supplying you with a variety of mortgage rates and terms, having a team work with you is a great way to ensure you are in the best financial situation you can be. For more information, contact an Ottawa Mortgage Broker. To listen to the full Podcast from 580 CFRA, click here. July 9, 2012 New lending regulations are expected to have a significant impact on housing demand over the next two years. As the Calgary Herald reports, a recent report from TD forecasts a 10-15% decline in the Canadian average home price over this period. The Toronto and Vancouver markets, seen as the most overvalued, are forecasted to see the sharpest adjustments. Changes to the mortgage lending process in the previous years have shown marked impact in housing, most significantly in the six months immediately following implementation. The home price decline is expected to have a ripple-effect on consumer spending, causing a decrease in sales of renovation supplies, furniture and other equipment. TD states that consumer purchases of the aforementioned goods account for just under 10% of personal consumption expenditure, and that the Canadian economy is transitioning into a period of softer economic growth. For more information about the new regulations, talk to an Ottawa Mortgage Broker. To read the full article from the Calgary Herald, click here. July 5, 2012 For a first-time home buyer, one of the most difficult things about entering the market is obtaining a down payment. With Canadian home prices averaging over $375,000, a down payment of $75,000 or more would be required to avoid paying for mortgage default insurance and/or to obtain the now rare 30 year amortization period. One option made available to Canadians is the Home Buyers' Plan. This is a federally instituted government program that allows a first-time buyer (or a buyer who has not owned a home for four years) to withdraw up to $25,000 from their RRSPs to use towards a home purchase. This article from Moneyville details the pros and cons of the Home Buyers' Plan. A program perk for applicants purchasing a home jointly is the ability for both parties to withdraw up to the maximum $25,000 amount, enabling the couple to maximize their down payment. Those looking into using the Home Buyers' Plan should be aware that there is a time limit to repay the borrowed funds. Buyers have up to 15 years to repay the full amount, and the minimum yearly payment is one fifteenth of the value. To learn more about the Home Buyers' Plan, contact an Ottawa Mortgage Broker. To read the full article from Moneyville, click here. July 4, 2012 Summer tends to be the real estate and mortgage market's busiest season. This combined with new mortgage regulations coming into effect next week has made for an even busier one. On this week's episode of Open House - The Real Estate and Mortgage Show, we hear many helpful hints for buyers who are taking posession of their new homes in these busy summer months. Traditionally, June 30th is said to be the most popular closing date of the year. For this reason, it is recommended to choose a mid-month closing date. For those currently renting, this will give ample time to do any cleaning and/or painting they wish before settling in. Additionally, a mid-month closing can save money, as moving trucks can charge premiums during busy periods. Mortgage rates and negotiation was a topic of much discussion on this week's show as well. When shopping for a rate, many will approach their bank. This doesn't always guarantee that the client will get the best rate, without negotiating. Ottawa Mortgage Broker Frank Napolitano reminds listeners that a Mortgage Broker negotiates on behalf of their clients, finding the best mortgage rate with the best terms for their financial situation. To listen to the full podcast from 580 CFRA, click here. July 3, 2012 Purchasing a home has often been thought of as a way to invest intelligently. After all, homes appreciate in value over time as mortgages get paid down. Not only that, but a home is an investment you live in. This article from the Ottawa Citizen is a commentary about how new regulations may make it more difficult for new investors to enter the market. The demographic most likely to be affected by the tighter regulations is believed to be young first-time buyers. The new fixed percentages for gross and total debt service ratios, coupled with home prices will require higher incomes to afford a home, a challenge for a 30 year old establishing their career. Choosing how much to spend on a home is a personal choice influenced by personal needs and estimated future earnings, but new lending regulations seem to force many to continue to rent. If you're a first-time buyer wondering how new lending regulations will affect your ability to enter the market, feel free to contact an Ottawa Mortgage Broker. For the full article from the Ottawa Citizen, click here. June 29, 2012 As a result of an ever-changing economy and tighter mortgage regulations, several Canadians are finding themselves with fewer financing options. Mortgage Brokers City (Ottawa) is pleased to announce the launch of Advanced Private Lending, a sister company that specializes in assisting clients with mortgage solutions to suit every need. Mortgage Brokers City (Ottawa) funds approximately one billion dollars in mortgage volume annually, and private lending has emerged as a significant need. From debt consolidation and investing to bankruptcy and low credit scores, having access to a network of private lenders allows Advanced Private Lending to provide a variety of solutions for any financial situation. Advanced Private Lending deals with investors, borrowers, and assists other Mortgage Brokers and Agents across Canada to fund their own deals. To learn more about the services that Advanced Private Lending provides, click here to visit the website. Click here for the full press release from PR Web. June 27, 2012 Click here for the full video from CTV Ottawa Morning Live. On this week's Mortgage Minute, Frank Napolitano of Mortgage Brokers Ottawa joins CTV Ottawa Morning live to discuss the effects the new mortgage regulations will have on the average Canadian. The regulation that is gaining the majority of attention is the decision to decrease the maximum amortization period from 30 to 25 years. The majority of homebuyers affected by this change are expected to be young first-time buyers. With a 30 year amortization, homeowners were able to build wealth with their mortgage, as low mortgage rates allowed 30-40% of the mortgage payment to go towards the principal. This decreases the number of homeowners paying close to interest-only payments and builds equity faster. Without the option of a 30 year amortization on a high-ratio mortgage, this possibility seems out of reach for quite a few young Canadians. First-time buyers and veterans alike are urged to contact an Ottawa Mortgage Broker with any questions regarding any of the new regulations. June 27, 2012 It is believed that the four new mortgage regulations announced last week will have an impact on home prices, most notably in inflated markets such as Vancouver and Toronto. However, the severity of the measures put into place is currently a subject of much debate among financial analysts and the public alike. Reducing the maximum amortization period for high-ratio mortgages from 30 to 25 years, decreasing the maximum amount a borrower can use to refinance their home from 85% to 80%, disallowing defualt mortgage insurance on homes priced above $1 million and fixing total and gross debt service ratios at 44% and 39% respectively, are said to be a move by Flaherty to slow consumer borrowing without increasing historically low mortgage rates. That said, there are many who believe the changes will have a negative impact on the housing market, which is already showing signs of slowing. In this article from the Globe and Mail, we learn that the national average home price fell by 0.3% in the month of May. Flaherty believes these changes will impact less than 5% of new potential buyers, yet there are many who disagree. The Canadian Association of Mortgage Professionals (CAAMP) estimates that 40% of new home buyers chose amortization periods longer than 25 years. Many first-time buyers will have to postpone their dreams of home ownership, as the higher payments a 25 year amortization period won't necessarily fit the budget. For the full article from the Globe and Mail, click here. June 25, 2012 On this week's episode of Open House - The Real Estate and Mortgage Show, Steve Gregory, Paul Rushforth and Frank Napolitano address the series of upcoming changes to the mortgage lending process. Last week, Jim Flaherty announced four major regulation changes to the mortgage market that will take effect July 9th, including changes to the maximum amortization period, refinancing and others. Steve, Paul and Frank discuss the effects these changes will have on the average Canadian. For those looking to obtain investment properties, these regulations could be a welcome change; as potential buyers who may not be approved under the new regulations may become good quality prospective renters. For more information about these changes, contact a qualified Mortgage Broker. Click here for the full podcast from 580 CFRA. June 25, 2012 After the Canadian government's decision to tighten lending guidelines, many young Canadians are left wondering about their chances of entering the mortgage market. In this article from the Ottawa Citizen, Mortgage Broker Frank Napolitano, Managing Partner at Mortgage Brokers Ottawa, shares his concerns about how these new lending regulations will affect prospective home buyers. According to a recent report from the Canadian Association of Accredited Mortgage Professionals, 47% of all home purchases made between January of 2011 and May of 2012 were from first-time buyers. First timers are a driving force in the current mortgage market, and it is believed these new regulations (most specifically, lowering the maximum amortization period for high ratio mortgages from 30 to 25 years) will make many think twice. The changes put forth are the government's aim to lower consumer debt without raising mortgage rates, but Napolitano believes they are focusing on the wrong area. Mortgages are a form of debt, but unlike credit card or car debt, a mortgage builds equity and the value of the property can increase over time. For more information on how these changes will affect you, feel free to contact a qualified Ottawa Mortgage Broker. For the full article from the Ottawa Citizen, click here. June 22, 2012 Click here for the full video from Mortgage Brokers Ottawa. Jim Flaherty's recent announcement regarding lending regulations has created a significant amount of media scrutiny, and is causing many Canadian borrowers to wonder how they will be affected. In this video, Ottawa Mortgage Broker Frank Napolitano addresses the four changes, which include: Reducing the maximum amortization period on mortgages with default insurance from 30 years to 25. Lowering the maximum amount Canadians can borrow when refinancing from 85% to 80% of the value of the home. Fix the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%. Limit the availability of government-backed insured mortgages to homes with purchase prices under $1 million In addition, Frank discusses the changes brought forward by The Office of the Superintendent of Financial Institutions (OSFI) regarding Home Equity Lines of Credit, which were announced later in the day on June 21st. If you have any questions about the information discussed in this video, feel free to contact a qualified Mortgage Broker. June 22, 2012 For anxious first-time homebuyers, saving 20% of their home's purchase price may seem like a long process. However, in an era of uncertainty surrounding mortgage rates, waiting a little longer to enter the housing market could benefit buyers' budgets in the years to come. This article from the Globe and Mail details prospective savings plans that can work for any budget. The priority of any savings plan is the ability to work comfortably within a budget, but savers should be conscious that some lifestyle changes may have to occur to meet a savings goal faster. Some sacrifices over the short-term can have long-term savings benefits. Experts are advising those saving for a down payment to avoid riskier investments like the stock market. Short term GICs, Tax Free Savings Accounts and RRSPs are alternatives to explore. Interest gains tend to be lower than those obtained from stocks, but the risk level is much lower as well. Investing in an RRSP allows first time buyers to take advantage of the RRSP Home Buyer's Plan and withdraw up to $25,000 from an RRSP to finance a first home purchase. For more information, contact an Ottawa Mortgage Broker. To read the full article from the Globe and Mail, click here. June 20, 2012 One of the main factors lenders will review when reviewing a mortgage application is the applicant's credit score, so setting the expectation for responsible borrowing is essential. It is easy, especially for those just starting out, to fall into the cycle of borrowing beyond their means. This article from the Globe and Mail explores how borrowing responsibly can become an important asset later in life. One example of building a credit rating responsibly is to obtain a credit card, use it for day-to-day purchases, but ensure the balance is paid in full every month. This allows the borrower to build a solid credit rating and never have to pay interest. Achieving this goal requires a great deal of self-discipline, but will be of significant benefit when applying for a mortgage. Other smart ways to build credit include cellular phone contracts, student loans or student lines of credit. Keeping a watchful eye on your personal credit score is also important, and easy to do with the assistance of Equifax or TransUnion Canada. Both companies offer the option to have your personal credit file mailed to you for free, enabling you to review and explore where there could be room for improvement. For more information, feel free to contact an Ottawa Mortgage Broker. To read the full article from the Globe and Mail, click here. June 18, 2012 This week on Open House - The Real Estate and Mortgage Show, a variety of topics are discussed. Cash back mortgages, proposed regulation tightening and mortgage rates are all on the table this week. The cash back mortgage was introduced as a solution for those who do not have the ability to save the minimum down payment required to enter the mortgage market. On this week's show, we learn that this may not be the best product for those planning to move in the near future, as the "cash back" portion of the mortgage fronted by the lender must be paid back. This coupled with any penalty resulting from breaking the mortgage can produce extra unexpected debt. Frank Napolitano suggests that those who decide to obtain a cash back mortgage should be prepared to stay in their home for at least five years to avoid this issue. For more information on any of the subjects discussed in this week's Podcast, feel free to contact a qualified Mortgage Broker. Click here for the full Podcast from 580 CFRA. June 18, 2012 In the wake of recently tightening regulations and increased supervision from the Office of the Superintendent of Financial Institutions (OSFI,) alternative lenders such as Mortgage Brokers are filling the void. In this article, we learn that larger lenders have held back lending to self-employed borrowers or outsourcing to their own broker channels. As a result, these clients are seeking alternative means to finance their home purchases. Canadian's current debt-to-income ratios, coupled with the feared impact of the eurozone debt crisis, is causing regulators to increase scrutiny surrounding mortgage lending. After OSFI was set to directly supervise the Canada Mortgage and Housing Corporation in April, the organization set forward several proposed regulatory changes. Some of these, including lowering the maximum loan-to-value ratio of Home Equity Lines of Credit, have been pulled back after consultation with industry professionals. With access to multiple lenders and the best mortgage rates, Mortgage Brokers are an option more and more Canadians are taking advantage of. To read the full article from the Financial Post, click here. June 15, 2012 Click here to watch the full video from CTV Ottawa Morning Live. This week, Ottawa Mortgage Broker Frank Napolitano joins Lianne Laing to discuss the ever-evolving mortgage market. One of the most positive recent developments from the proposed mortgage regulation changes has been the decision to scrap the requirement to re-qualify when renewing a mortgage. The Office of the Superintendent of Financial Institutions has made the decision that the mortgage renewal process will remain the same, which should put many homeowners at ease come renewal time. Another change being discussed is the possibility of reducing the maximum loan-to-value ratio of Home Equity Lines of Credit from 80% to 65%. Regulators believe the interest-only payments on this product make them riskier than traditional mortgages. This change is still in the discussion phase and has not yet been implemented. June 13, 2012 Each year, the Canada Mortgage and Housing Corporation (CMHC) releases a spring report detailing Canada's rental market. This report includes statistics from every Canadian province regarding apartment vacancy rates and average rental costs. In this report, we learn that the rental vacancy rate showed a slight decrease in 2012, coming in at 2.3% compared to 2.5% the previous year. An influx of new migrants, coupled with an improving job market has contributed to Canada's current rental demand. Vacancy rates for rental units have decreased in 22 of 35 major urban centres. 2 major centres showed no change, and 11 showed increases. Click here to read the full report from the CMHC. June 12, 2012 Home renovations are a sure sign Summer is in full swing. Low mortgage rates and an abundance of For Sale signs on manicured lawns are sure-fire ways to get homeowners thinking about the value of their property and how to increase it. This article from the Globe and Mail gives tips for any homeowner looking to spruce up and add value, including an online tool that offers an estimated return on investment. Opinions on what the value of home renovations are often differ, leaving many homeowners to wonder what the best upgrades would be. Two of the most popular selling features for a home include the bathroom and kitchen, making these the most popular renovations for those looking to sell. Among the least likely to increase value are swimming pools, interlocking brick walkways and fencing. Click here for the full article from the Globe and Mail. June 11, 2012 On this week's episode of Open House - The Real Estate and Mortgage Show, we join Steve Gregory, Frank Napolitano and Paul Rushforth at Romantic Fireplaces with Mike Pilon. Topics this week include home renovations, appraisals and variable versus fixed rates. A recent survey from the Canada Mortgage and Housing Corporation revealed that Canadians spent over 20 billion dollars on renovations in 2011. This shows that homeowners still have equity in their homes and are investing to increase value. Of the homeowners surveyed, 38% stated they planned to spend at least $1,000 by the end of 2012. After the Bank of Canada's decision to leave their rate unchanged last week, mortgage rates remain top of mind for financial analysts and homeowners alike. Rates are now expected to stay the same or even decrease in 2012. For those who are unsure, Ottawa Mortgage Broker Frank Napolitano recommends keeping a close eye on mortgage rates and media coverage. For the full podcast from 580 CFRA, click here. June 11, 2012 In a report sponsored by the Canadian Association of Mortgage Professionals (CAAMP) we learn that from 2011 to April of 2012, 22% of those who renewed or refinanced a mortgage chose to do so with the assistance of a Mortgage Broker. This shows an increase over 19% during the same period in the previous year. This article from Canadian Real Estate Wealth shares the highlights of the recently released report. For those seeking new mortgages, 31% were obtained through mortgage brokers, compared with 27% from the year before. In a time of growing uncertainty surrounding lending regulations and mortgage rates, the necessity for qualified mortgage advice is even more apparent. Ottawa Mortgage Brokers have access to alternative lending sources and mortgage solutions for each unique financial situation. To read the full article from Canadian Real Estate Wealth, click here. June 8, 2012 For those keeping a watchful eye on the Canadian economy, Tuesday's news from the Bank of Canada has been eagerly awaited. Bank of Canada Governor Mark Carney announced the overnight rate will again be held at 1%. This article from the Financial Post gives the key points from Tuesday's announcement. It is speculated that the next shift in interest rates will be up, not down, further strengthening the suggestion to take advantage of mortgage rates while they are at all-time lows. The European crisis is one of the many factors causing the Bank of Canada to stay in a holding pattern for now. It is reported that household debt remains a concern for the Bank of Canada. This despite recent statistics indicating not only a significant slowdown in debt accumulation, but a large percentage of Canadians taking extra steps to decrease existing debt. Derek Holt, an economist with Scotia Capital states this news "should be encouraging to the BoC assuming the policy goal here isn’t total flatness in household lending". Click here for the full article from the Financial Post. June 6, 2012 On this week's Real Estate and Mortgage Show, Steve Gregory, Paul Rushforth and Frank Napolitano discuss the steps Canadians are taking to reduce their debt, investment properties and the current Ottawa real estate market. A recent report released by the Canadian Association of Mortgage Professionals (CAAMP) stated a large number of Canadians are utilizing pre-payment priveleges to pay down their mortgage debt more swiftly. Ottawa Mortgage Broker Frank Napolitano shares that 23% have increased the amount of their regular payments, 19% made lump sum payments and 10% did both. In addition, 50% of borrowers pay at least $100 more than required on their monthly payments, an encouraging statistic amid the speculation that Canadians are too indebted. Another topic of much discussion this week is the Ottawa real estate market. More listings are appearing all the time, and sellers are again encouraged to do their research and stage and price homes properly. To listen to the full Podcast from 580 CFRA, click here. June 4, 2012 A recent survey, published in this article from the Financial Post, shows that over half of Canadians do not believe personal debt should be used to build wealth, although 76% of those polled believe there is such a thing as "good debt." 38% are reported as having no debt, and this includes a mortgage. It is believed that those with an aversion to debt simply aren't ready for it, which is not necessarily a bad thing. The important point to keep in mind is knowing when responsible borrowing will improve a financial situation. For instance, borrowing for education can open doors for higher paying employment, applying for a credit card can help build credit history, and obtaining a mortgage is an investment for the future. This article also explores the strategy of leveraged investing, a practice employed by 61% of Canadians with an annual income of $100,000. Those who support borrowing to invest are careful to caution that this option is not for everyone, but can be effective when used properly. For more information on borrowing options that can have financial benefits, such as a Tax Deductible Mortgage, contact one of many qualified Ottawa Mortgage Brokers. To read the full article from the Financial Post, click here. June 1, 2012 Mortgage Brokers City is pleased to announce its recent expansion and ability to provide mortgage solutions and advice in Canada's Western provinces and New Brunswick. For many years, the Ottawa-based brokerage firm has endeavored to embark upon a cross-Canada expansion, and now has the licensing and infrastructure in place to effectively handle the increase in volume. With a team of 80 qualified mortgage professionals and access to multiple lenders, Mortgage Brokers City is proud to offer not only competitive mortgage rates, but relevant advice suited to each client. Lending rules and rates are constantly changing, and the need for qualified mortgage advice has never been more crucial. Click here for the full press release on PRWeb. May 30, 2012 Click here to watch the full video from CTV Ottawa Morning Live. One of the latest propositions brought forward to tighten lending regulations is making re-qualification a necessary step when renewing a mortgage. On this week's Mortgage Minute, Frank Napolitano and Kurt Stoodley discuss what this change would mean for Canadians at the stage of mortgage renewal. In the wake of conversations surrounding lending rules, this is one more reason locking in a low mortgage rate at a ten year term. For more information, contact a qualified Ottawa Mortgage Broker. May 30, 2012 On the 250th episode of Open House - the Real Estate and Mortgage Show, Steve Gregory, along with Chris Hoare and Ottawa Mortgage Broker Frank Napolitano discuss recent mortgage and real estate news. In the wake of speculation that interest rates should increase in the fall, Frank stresses the importance of taking advantage of today's historically low mortgage rates. We also learn that taking a fixed rate mortgage over variable rate is becoming one of the best options, especially for first time buyers. If the prime rate increases as it is believed to, those with a fixed mortgage rate will not be saddled with the concern that their mortgage payment will increase as well. The gentlemen also discuss tightening lending regulations; more specifically, the possibility of the Office of the Superintendent of Financial Institutions (OFSI) implementing the necessity to re-qualify when renewing a mortgage. Currently, it is believed this idea is only in the conception stage, however, it brings to the forefront the importance of keeping credit spending responsible and under control. Remember to contact a qualified Mortgage Broker with any questions. Click here for the full podcast from 580 CFRA. May 28, 2012 A report released on Tuesday from the Organization for Economic Cooperation and Development (OECD) states that Canadians should expect a policy rate increase in autumn of 2012. This article from the Ottawa Citizen explores how this will affect mortgage rates. Although this is earlier than expected, the increases are forecasted to be gradual, and monetary policy is not expected to tighten until the first quarter of 2013. The OECD warns that in some markets, home prices have become overvalued, and a gradual increase in rates and slight changes to lending regulations are believed to correct this trend. The OECD also released their forecast for economic growth of 2.2% in 2012 and 2.6% in 2013, stating the Canadian economy appears to be recovering after a slow period. To learn more about how these changes affect you, talk to an Ottawa Mortgage Broker. To read the full article from the Ottawa Citizen, click here. May 24, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve, Frank and Paul discuss the popular topic of the CMHC and the effects on the Canadian economy. The Canada Mortgage and Housing Corporation (CMHC) is Canada's national housing agency. One of the major benefits the CMHC offers Canadians is the ability to enter the housing market with as little as 5% down. It has been reported that as the CMHC reaches its 600 billion dollar limit on insurable mortgages, the government is looking to turn supervision over to the Office of the Superintendent of Financial Institutions. On this week's podcast, Ottawa Mortgage Broker Frank Napolitano sheds some light on the benefits the CMHC has brought to the economy. In 2011 alone, the CMHC brought 1.53 billion dollars of net income to the Canadian government, and 16 billion in the last 10 years. Frank also discusses cash back mortgages, which allow mortgage seekers to enter the housing market without a down payment. Those looking to obtain a cash back mortgage should be aware that CMHC fees must still be paid, and interest rates are slightly higher. For more information, contact any of our qualified Ottawa Mortgage Brokers. To listen to the full podcast from 580 CFRA, click here. May 22, 2012 With mortgage rates at all time lows, more Canadians are leaving behind rental properties and applying for their first mortgage. This is one of many reasons condominiums are becoming more and more popular. This article is a comprehensive guide for anyone looking to choose condominium ownership. An important factor to take into account when searching for a condominium is the difference between a regular and a freehold unit. With a freehold unit, you own the unit as well as the land, meaning you are responsible for maintenance and repairs to these areas. Owning a regular unit means you own the unit only, and the land is considered a common element. Taking ownership of a regular condominium unit means you also own a percentage of some of the communal areas in the building, such as lobbies, elevators or recreational facilities. In most cases, each resident pays into condominium fees that ultimately go towards the operation and upkeep of these common areas. This applies to both regular and freehold condominiums. To read the full article from the Ottawa Sun, click here. May 18, 2012 Home prices have been the subject of much debate in recent news, and evidence of prices falling is apparent. This article from Canadian Business gives reasons why homeowners should not see these events as a threat. Those who are predicting a housing crash tend to cite similar events in the United States as proof of what is to come. This article reports that historically, such a dramatic change is rare and recent events are not necessarily an indication of what is to come. Another recently popular topic is mortgage debt, which financial journalists tend to portray as a negative. It often seems that low mortgage rates and rising family incomes are being overlooked. It is also important to remember the investment owning a home becomes. "Owning a home is an inflation hedge, and unlike precious metals, the owners get to live in their hedge." - Larry MacDonald For the full article from Canadian Business, click here. May 17, 2012 A recent study from the Lawyers' Professional Indemnity Company revealed that 56% of Canadians do not possess a will. However, rising home values seem to be prompting homeowners to seek making out this important document. In this Financial Post article, we learn that 13% of Canadians got their first will after purchasing their first home. Canadians between the ages of 27 and 34 cite the belief that they do not have any wealth as the reason for not having a will. Another popular reason is the idea that wills are too expensive. Taking into account the fees associated with obtaining a mortgage, writing a will is a small fee that can make a big difference in peace of mind. A standard will is normally within the range of $500. Natrally, the more complex the document is, the higher the price. Writing a will without a lawyer is also an option, there are easily accessible self-help programs available online. To learn more about protecting your most important investment, click here for the full article. May 15, 2012 On this week's episode of The Real Estate and Mortgage Show, Lisa Theriault joins Steve Gregory and Paul Rushforth to talk mortgages and real estate. This week's topics responsibly building your credit score, the rise in popularity of assumable mortgages, and the family plan mortgage. The Family Plan Program gives individuals the opportunity to purchase a home for a family member with only a 5% down payment, providing the family member lives in said property. This is an attractive option for family members who have good credit but lack the income to purchase a home individually.  A good example would be a parent purchasing a property for a child attending college or university. Rather than spending a large sum on residence fees, the parent is investing in a property. This benefits the child as well, helping to build credit in a responsible way. Those looking into the Family Plan Program should note that the occupant cannot be charged rent. If the purchaser is looking to gain some rental income from the property, they can choose to rent out another area of the home. For more information on the Family Plan Program, contact any of our qualified Ottawa Mortgage Brokers. Listen to the full Podcast for Open House - The Real Estate and Mortgage Show. May 14, 2012 With summer just around the corner, vacation plans begin to formulate. For many, this includes an extended stay at the family cottage. This article from the Financial Post gives a good background of information for those looking to purchase a vacation property. Possibly the most important factor to take into account when looking to purchase a cottage is the mortgage. Lending terms and interest rates for "recreational properties" are different than those of a principal residence. It is always a good idea to consult a qualified Mortgage Broker to advise you on the different options available. This article also explores the possibility of renting your cottage out while you're at home, giving your vacation spot the potential to be an investment property, and providing some tax benefits. Of course, it is essential to factor in maintenance and repair costs. To read the full article from the Financial Post, click here. May 11, 2012 A report released on Wednesday by CIBC states that the total amount of outstanding debt carried by Canadians decreased in March. In this article from CBC news, we learn that Canadian household debt is growing at a slower pace than the United States, a trend that hasn't been seen since 2002. Lines of credit are showing a slight increase, believed to be the result of consumers transferring higher interest balances on credit cards to lines of credit. Mortgage debt is showing signs of slowing as well. It is reported that the annual increase of mortgage debt as of March of 2012 is at 6.3 per cent, a figure below the averages of the last 10 years. The report also states that these figures are causing a predicted softening in home prices, which should occur gradually in the near future, calming fears about a housing bubble. To read the full article from CBC news, click here. May 10, 2012   Click here to watch the full video from CTV Ottawa Morning Live. The possibility of rising interest rates seems to be top of mind for most homeowners, making choosing the right mortgage rates and terms more important than ever. In this Mortgage Minute from CTV Ottawa Morning Live, Frank Napolitano and Kurt Stoodley discuss the benefits of having the option to transfer a mortgage to another property. Many who are renewing their mortgage with plans to sell in two or three years may choose to only renew for the number of years they plan to stay in their current home. However, as we learn in this video, choosing a ten year fixed rate mortgage may be more beneficial in this situation. Having a portable or transferable mortgage allows a homeowner to keep that low mortgage rate, even when changing properties. To find out more, contact your qualified Mortgage Broker. May 9, 2012 With the possibility of rising interest rates on the horizon, many homeowners are taking advantage of today's low mortgage rates and locking in at ten year terms. This article from Moneyville explores the many reasons choosing a longer term is beneficial. The most prominent reason most choose a ten year term is the peace of mind it offers. The security of knowing your payments will stay the same for the next ten years is extremely important, and makes the household budget much easier to maintain. Choosing the amortization period is just as important. A shorter amortization means paying less interest in the long run, but a longer amortization may give your monthly budget some necessary breathing room. Another benefit of a ten year mortgage is the ability to increase the amount or frequency of your mortgage payments, or make lump sum payments. This ability allows you to pay your mortgage off faster, and shorter term mortgages don't always offer these options. For more information about the many options available to you, speak to a qualified Mortgage Broker. To read the full article from Moneyville, click here. May 8, 2012 In this week's Podcast, Steve Gregory and Frank Napolitano are joined by two members of the Paul Rushforth team; Erin Peck (Sales Representative Selling Partner and Sara Orr (Closing Manager). This week we learn about shopping around for a mortgage rate, the importance of knowing the contents of your credit report and much more. It is very common for homeowners to renew their mortgage without taking the time to research other options. Frank reminds listeners that calling a Mortgage Broker doesn't cost anything, and has the potential to save you thousands of dollars in interest over the long term. Convenience is only one benefit to enlisting the assistance of a Mortgage Broker. Having access to multiple lenders allows a mortgage professional to research several different rates and terms for you, while only pulling your credit file once. Choosing to approach several different banks yourself will cause each individual institution to access your credit file, which has the potential to negatively impact your rating in the future. It is recommended to review your own credit file once per year to ensure it is up to date and accurate. Those with bad credit or a bankruptcy should avoid credit checks for 2-3 years and ensure to stay well below the limit on credit products (25% or less.) To listen to the full Podcast from CFRA, click here. May 7, 2012 A mortgage is the largest investment most Canadians will ever make, and protecting that investment is crucial. For a first time buyer, the decision between mortgage or life insurance can seem like a daunting task. This Moneyville article illustrates the benefits of fitting mortgage insurance into your budget. Purchasing mortgage insurance ensures that your mortgage will be paid in the event of your death. In this article, we learn the many differences between acquiring mortgage insurance versus life insurance. The costs, coverage, and terms differ from one product to the other. Of course, every household has different needs, and having access to varied options can make the process easier. It is always beneficial to consult your Mortgage Broker for further information on the mortgage insurance options available to you. To read the full article from Moneyville, click here. May 4, 2012 The process of purchasing a first home involves a lot of budgeting, and it is easy to forget to factor in maintenance costs. The estimated annual cost of maintenance on a property can be between one and three per cent of the property value, making it a significant factor when budgeting. Many first time buyers may believe they will be able to perform any required repairs independently. However, depending on skill level, a professional may be required, especially for repairs that involve plumbing or electricity. Creating an emergency fund to cushion the impact of these expenses is something every homeowner should consider, however it is also suggested that extra cash flow can be better used to put towards the mortgage. This article suggests that regular maintenance should be manageable when budgeted into everyday expenses, of course every financial situation and home are different. To read the full article from the Ottawa Citizen, click here. May 3, 2012 After much recent speculation about the possibility of increasing mortgage rates, many Canadians are turning to the security of a fixed mortgage. Mortgage rates are still at historic lows, and it is difficult to predict how long this trend will last. Recent headlines have suggested a rate increase could come about as soon as the end of the year, making the option to hold a steady rate for ten years even more attractive. This Moneyville article examines the many benefits of choosing a fixed rate mortgage. Even homeowners who are planning on selling in a few years may want to consider going fixed. Choosing a mortgage that is portable to another property gives the ability to take advantage of the current low rates while still having the freedom to upsize, downsize or simply relocate. Many of the longer term mortgages are assumable as well, which could prove to be a selling feature in a few years if rates have increased. Another benefit of a longer term is flexibile payment options. For those looking to pay off their mortgage faster, it is important to have the ability to make lump sum payments or increase regular payment frequency. For more information, speak to a qualified Mortgage Broker. To read the full article from Moneyville, click here. May 2, 2012 A report released on Wednesday from economists Derek Holt and Dov Zigler states that a rate hike is unecessary, as Canadian household debt is already decreasing. In this article from the Ottawa Citizen, we learn that Canadian mortgage debt growth is at a moderate pace, and should allay fears that it is out of control to the point of requiring further monitoring. It is believed that calculating debt levels factoring in mortgage debt is not realistic, as a mortgage is financed over a large portion of a lifetime and should not be compared to one year of post-tax income. This article also points out that Canadians are managing their debt much more responsibly; using mortgages and Home Equity Lines of Credit rather than higher interest products and accumulating more debt. Read the full article from the Ottawa Citizen here. May 1, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve Gregory is joined by two members of the Paul Rushforth team. Erin Peck: Sales Representative Selling Partner and Sara Orr: Closing Manager, discuss home staging, curb appeal and the constant importance of pricing your home to sell. Frank Napolitano joins the program by phone to take questions, discuss interest rates and the possible effects of the recent decision to monitor the Canada Mortgage and Housing Corporation (CMHC) more closely. Despite the recent cooler temperatures, it is important not to ignore the impact curb appeal has on potential buyers. Even if it isn't possible to do a lot of work on your gardens, taking the time to simply tidy excess leaves and weeds makes a big difference. Home staging has been a topic of much discussion recently, and it is as crucial to pay attention to staging the outside of your home as it is to stage the inside. Showing at the correct price should also never be understated. Many will wish to list a home at a price that is more emotional than indicative of the realistic value. Pricing your home too high may shut out some buyers, and even decreasing the price later may not win them back. In regards to current mortgage rates, it is still widely believed that any changes will not be sudden or drastic. However, Frank stresses the importance of being prepared for any tightening of guidelines. Good credit and sound employment history are a must when applying or refinancing. Frank advises that Mortgage Brokers Ottawa is still offering a ten year fixed rate of 3.89%. Clients are encouraged to take advantage of these packages while they are still available. For more details, talk to a professional Mortgage Broker. To listen to the full Podcast from CFRA, click here. April 30, 2012 According to a 2009 report from Royal Lepage, the majority of single people making their first home purchase were women between the ages of 25 and 30. The new show Buy Herself, from HGTV shows that this trend is only increasing. According to the host, Sandra Rinomato, women are gravitating towards investing in real estate because of the financial security it offers. The Ottawa Citizen also spoke with Mortgage Broker Leo Maiorino, who has seen a significant difference in this demographic over his 27 years in the field. He points out that the down payment requirement has shifted significantly over the years, making it easy for single women or men to get into the mortgage market. After renting for a long period of time, it becomes apparent that a monthly mortgage payment may not differ vastly from monthly rent. This coupled with the advantage of investing in something permanent makes buying a smart investment. To read the full article from the Ottawa Citizen, click here. April 27, 2012 In March, the federal budget began to focus on supervision of the Canadian Mortgage and Housing Corporation (CMHC), which controls approximately 75% of the default mortgage insurance market. The International Monetary Fund released a statement in 2011 that indicated the need to assess strengthening the CMHC's risk management. Today, it has been reported that the Office of the Superintendent of Financial Institutions (OSFI) may be entrusted with this supervision. In addition, there are discussions regarding dividing the insurance responsibilities of the CMHC from their other mandates, which is believed to have the potential to achieve better governance. The federal government has maintained the CMHC's 600 billion dollar limit, which was increased three years ago. This will allow other insurers to pick up any slack. Genworth Financial, for example, has indicated they have the capacity to do so. To learn more, read the full article from the Financial Post here. April 26, 2012 Click here to watch the full video from CTV Ottawa Morning Live. Many home buyers will disregard a home they truly love if there is one aspect that truly needs improvement. However, with the Purchase Plus Improvements program, this doesn't necessarily have to be the case. In this video from CTV Ottawa Morning Live, Frank Napolitano sits with Kurt Stoodley to discuss the different aspects of this program and the benefits to a home buyer. The Purchase Plus Improvements Program allows a home buyer to add a home improvement to their mortgage up front. This home improvement must be something that will add value to the home, such as roofing, new windows, bathroom or kitchen upgrades or finishing a basement. Additions such as pools or hot tubs are not included. It is necessary to obtain a quote for the work to be done, as the lender will approve the mortgage amount based on that value. The maximum amount, depending on the default insurer of the mortgage is 10-20% of the home's value. To learn more about the Purchase Plus Improvements Program, feel free to contact a qualified Mortgage Broker. April 25, 2012 After last week's decision from the Bank of Canada, news of the possibility of rising interest rates has been steadily increasing. This article from the Globe and Mail advises Canadians on the importance of paying debts down before this change comes about. Mortgage rates are still sitting at historic lows and are not expected to increase overnight. However, an eventual increase is inevitable, and preparing for this outcome is necessary. Canadians looking to renew or apply for a new mortgage are encouraged to take advantage of the current low rates available at a ten year term. It is also important to know the prepayment privileges associated with any mortgage. Those looking to pay off their debts faster can look into lump sum payments or increasing the frequency of regular payments. Cutting down on debt has many other benefits, aside from saving on interest. The ability to save money for children's education, retirement or emergencies are just a few. Try using an online mortgage calculator to calculate your possible savings. To read the full article from the Globe and Mail, click here. April 24, 2012 This week on The Real Estate and Mortgage Show, Steve Gregory, Frank Napolitano and Paul Rushforth discuss the spring market, pre-approvals and the effects of the Bank of Canada's decision on interest rates. With the spring real estate market in full swing, there are more listings than ever to compete with. On this week's show, Paul informs prospective home sellers on the importance of making your home modern, neutral and appealing to the largest number of possible buyers. With more competition, it becomes even more important to price your home strategically, based on features and square footage. It is also important not to underestimate the impact of curb appeal. Spending a little time sprucing up your lot can pay off in the long run. After this week's rate decision from the Bank of Canada, there has been a lot of talk about rising mortgage rates. Frank gives those looking for a new mortgage or to renew a sense of security. Any increases to interest rates are widely expected to be very gradual, and today's fixed rates are still at competitive lows. Homeowners with variable rate mortgages coming up for renewal are strongly encouraged to take advantage of today's ten year fixed rates. Those who are unsure about which route to take should never hesitate to call a qualified Mortgage Broker, who can recommend the best course of action for your specific financial situation. To listen to the full podcast from CFRA, click here. April 23, 2012 A report released by the credit agency Equifax shows that Canadian credit card debt has fallen, while line of credit debt has risen, and has been steadily rising for 4 years. It is suggested that Canadians are using lines of credit to pay off higher interest credit card debt. This article from the Financial Post explores using a secured or unsecured line of credit to your benefit. There are several ways to use a line of credit to your benefit. One example is the Smith Manouevre. The Smith Manouevre is an investment strategy developed by Fraser Smith which allows the holder of a home equity line of credit to improve their investment portfolio and make their mortgage tax deductible. For every 100 dollars of principal that is paid back to the mortgage, 100 dollars worth of equity will become available to the client on the line of credit. Assuming the client uses the line of credit funds to invest, the interest on the line of credit becomes tax deductible. This article explores other methods of using your line of credit to invest and produce tax benefits, making it an asset rather than a liability. Before applying any of these strategies for yourself, it is recommended to consult a qualified Mortgage Broker. To read the full article from the Financial Post, click here. April 19, 2012 Homeowners looking to renew their mortgages are faced with a number of choices. Fixed or variable rate? Five or ten year term? Will your current property still be your primary residence in five years? If not, is your mortgage portable or assumable? When making these important choices it is important to consult a Professional Mortgage Broker to assist you in keeping informed of all of the terms of your mortgage. Currently, mortgage rates are historically low, and talk of rising rates is prominent. Locking your mortgage in today for ten years at a fixed rate could be an incredible asset if rates are higher when you're looking to sell and still have a few years left in the term. Another option to look into is the portability of your mortgage. If you are in the same aforementioned scenario and wish to keep that mortgage rate, it is essential to ensure your mortgage is portable to another property. There are normally fees associated with transferring your mortgage to a new home, however these are nominal when compared with the thousands in interest you stand to save. To learn more about turning your mortgage into an asset, it is recommended to enlist the assistance of a Mortgage Broker. To read the full article from the Financial Post, click here. April 18, 2012 The Bank of Canada has not given a firm timeline for a possible rate increase, but Governor Mark Carney seems to be preparing Canadians for this possible outcome. The decision to raise interest rates will ultimately depend on economic improvements, about which Mr. Carney seems confident, raising his growth forecast for 2012 to 2.4%. With a new projected timeline for economic improvement and Mr. Carney's new growth forecasts, it seems possible that interest rates may see an increase before the end of 2012. That said, it is also believed that any restrictions regarding household debt will be gradual. The Bank of Canada will release a full statement on Wednesday, April 18th and Mark Carney will join Senior Deputy Governor Tiff Macklem at a press conference to discuss these issues further. Read the full article from The Globe and Mail here. April 17, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve Gregory, Frank Napolitano and Paul Rushforth are joined by special guest Mike Pilon of Romantic Fireplaces & B.B.Qs. From the amateur weekend B.B.Q. novice to the seasoned professional, Mike shares professional tips for everyone to get the most out of B.B.Q. season. With summer fast approaching, many homeowners are starting home renovations and landscaping to spruce up their properties for sale. April is the time more and more listings will appear on the market, and Paul stresses the importance of making your home stand out. The right homes at the right prices are the listings that will sell first. Steve, Frank and Paul explore several other issues this week, from deciding between fixed and variable rate mortgages, to exploring a mortgage with bad credit or a past bankruptcy. A mortgage is a significant financial decision, and it is always important to consult a professional Mortgage Broker for any questions you may have. Listen to the full podcast from 580 CFRA here. April 16, 2012 In the wake of the wave of historically low mortgage rates, many Canadians are eager to put their homes on the market. For home sellers, getting the best price for their home is a must, and home staging has become an incredibly popular way to do so. This article from The Globe and Mail illustrates the benefits of investing in home staging. Home staging can be a terrific way to make a lived-in home look new again, attract a fresh crop of potential buyers, and command a higher asking price. Sellers can hire a home staging professional for costs ranging from 250 to 5,000 dollars. This may seem costly, but factoring in the potential increase on the asking price of your home, it could be a lucritive investment. This article also provides helpful tips for those looking to apply the practises of a home stager independently. These can be as simple as a fresh coat of paint, removal of unecessary clutter and furniture and making the space as neutral as possible. Whichever method you choose, staging your home could be a cost-effective way to get your desired asking price, or even more! Read the full article from The Globe and Mail here. April 13, 2012 Recent statistics released from the Canada Mortgage and Housing Corp. (CMHC) reveal that housing starts in March were higher than expected, bringing the seasonally adjusted rate up approximately 5% over February. The warm start to spring and continuing trend of low mortgage rates seem to be fuelling these results. Multiple unit properties account for a large part of the increase, most significantly in Ontario and the Prairies. Although single detatched starts have decreased somewhat compared to February, both multiple and single units have shown a significant year over year increase. Read the full article from CBC News here. April 12, 2012 It is a common dream for Canadians to be mortgage free. This combined with the many other financial priorities in life makes budgeting a necessity. In this piece from Moneyville, Robb Engen gives his own personal budget as an example. Knowing when you wish to be mortgage free is a priority when making this type of plan. Then, calculate how much you have left over after the bills are paid and you have contributed to your Retirement Savings Plan or Tax Free Savings Account. Keep in mind that every mortgage comes with a different set of terms, and consider consulting a professional Mortgage Broker to discuss your payment options. Canadians are paying off their mortgages faster using several different methods. Increasing monthly payments, switching from monthly to bi-weekly payments and taking advantage of the prepayment privelege with their mortgage are just a few. Online mortgage calculators are another helpful tool to show you how quickly you can be mortgage free. Read the full Moneyville article here. April 12, 2012 In this week's Open House - Real Estate and Mortgage Show, Steve Gregory, Frank Napolitano and Paul Rushforth tackle the recent changes to the federal budget and the effects on the current real estate and mortgage market. The recent negative predictions regarding the current Canadian mortgage market are being quickly quieted. Lenders are continuing to keep lending responsible and under control, and homebuyers are borrowing within their means. March figures are showing the start to a very positive spring, with 1,396 homes sold compared to 1,240 in March of 2011. The average home price has shown an increase of 2.1%. This combined with the increase in sales shows that many Canadians are still in a stable financial position and able to comfortably afford home ownership. The real estate forecast for April continues to look positive. An increased number of listings will move us towards a buyers' market. Those looking to sell a home should be aware of the impact of their location and price, as the standout homes will be the first to sell. Finally, Steve, Frank and Paul discuss the fixed versus variable rate choice that faces not only first time buyers, but those looking to renew their mortgages. With rates as low as they currently are, does it make more sense to lock in your mortgage at an attractive rate or stay with the variable? Mortgage rates are predicted to see a slight increase in the upcoming years, so many are taking advantage of low rates while they are available. However, every mortgage situation is unique and it is recommended to speak to a professional Mortgage Broker before making this important choice. Listen to the full podcast from 580 CFRA here. April 10, 2012 On this week’s mortgage minute, Frank Napolitano and Kurt Stoodley discuss the impact of the federal budget on the mortgage market. Typically, changes to the mortgage market are unlikely to be made during a federal budget. However, Mortgage Brokers are staying informed of possible changes in the future, such as shortening amortization periods, raising minimum down payment requirements or requiring clients to qualify for posted mortgage rates, rather than the rate they will receive. Despite the concern some seem to have, the Canadian mortgage market has stayed resilient. Mortgage Brokers Ottawa is still offering fantastic packages and rates, including a ten year mortgage at 3.89%, which many major lenders are not currently offering. This mortgage is portable and assumable, and allows the client prepayment privileges. The flexibility of this plan allows first time buyers to take advantage while rates are low, and keep their options open. Watch the full video from CTV Morning Live here. April 5, 2012 Despite the reason a homeowner is taking out a second mortgage, lenders will often regard this as a solution to excessive debt. However, the borrower's reason for exploring this option could be as simple as an unforseen financial circumstance. This article from the Ottawa Citizen touches on the key points of the option of a second mortgage. In some cases, the decision to obtain a second mortgage are as simple as home renovations, purchasing a summer home or a property for a son or daughter. Regardless of the situation, it is advisable to speak to a qualified mortgage professional before applying for a second mortgage. Mortgage Agents have access to mortgage solutions that your bank may not. It is their priority to find the most suitable solution for each individual circumstance. Therefore, if a second mortgage is not the most effective option for your financial situation, a qualified mortgage professional will have the ability to advise you otherwise. Read the full article from the Ottawa Citizen here. April 4, 2012 When the topic of the current debt situation in Canada is being discussed, it is important to have perspective. Comparing today's statistics to those from three years ago or more will give unbalanced results. This article from the Financial Post shows why Canadians' debt-to-income ratio is not as severe a concern as originally believed, and gives realistic examples of emerging trends. Accumulating debt is reliant on many factors for a family. Canadians now have a longer life expectancy, are starting families later and retiring later in life. All of these factors contribute to the decision to first obtain a mortgage, and second, how much that mortgage will be. It is believed that a higher debt-to-income ratio is not a threat to the financial system. Recent findings reveal that the spike in home prices has begun to normalize. This combined with current mortgage rates should curb excessive household debt. Another recent survey shows that a large percentage of Canadians have indicated they are financially prepared for an increase to interest rates. Taking into account a forecasted stronger economy and Canadians' capacity to borrow within their means, household debt is expected to remain manageable. Read the full article from the Financial Post here. April 3, 2012 Acquiring a rental property is a great investment that has the potential to benefit you for years to come. It is important to remember when you own such a property, the process of filing income tax becomes very different. This article from the Globe and Mail answers some common questions regarding income taxes for investment properties. Even if you use your current residence as an office to manage the finances for your rental property, the interest gained on the mortgage used to finance your residence is not deductible. The important thing to remember is that when Revenue Canada reviews your profile, they focus on the direct purpose of any borrowed funds. In most cases, when funds are borrowed for an income-producing purpose, the interest is deductible. There are several other miscellanious expenses that can be deducted regarding a rental property. These include heating and electrical costs, property taxes, any condo fees, insurance and advertising costs. If your mortgage is for the rental property, the interest in this case is deductible. If your rental property was previously your residence, the "change in use" tax rule will apply to you. Basically, this means that the day you converted your property from a residence to an income property, you sold it at market value and re-purchased it at the same value. Therefore, if the property's value increased since the original purchase date, the difference may be viewed as capital gain. Be sure to consult a tax professional regarding the possibility of sheltering this gain. Read the full article from the Globe and Mail here. April 3, 2012 This week on Open House - The Real Estate and Mortgage Show, Steve Gregory, Frank Napolitano and Paul Rushforth discuss the current mortgage and real estate market. The biggest news this week has been the Federal and Provincial budget. In this week's Podcast, Steve, Frank and Paul discuss the way the changes to our budget are going to affect the mortgage market. The biggest potential changes being discussed are lowering the minimum amortization period from 30 to 25 years and increasing the minimum down payment amount from 5 per cent to 7 or as much as 10%. These changes are not believed to be in the pipeline in the near future, as Canadian debt is not "out of control" as it was originally perceived to be. Mortgage - seekers should make it a priority to pay off any high interest debt, such as credit cards with high interest rates, before applying for a mortgage. For those with secured lines of credit making interest only payments, it is recommended to convert this line of credit back into a mortgage while interest rates are still low. Converting your payments back to principal plus interest is a terrific way to pay down your debt faster. This week, the gentlemen also discuss the possibility of purchasing an investment property, and the importance of knowing the difference between a commercial and residential mortgage. For those looking to sell a property, you will learn about what small improvements may add value to your home. To listen to the full Podcast from 580 CFRA, click here. April 2, 2012 There are several different approaches you can use to pay your mortgage off faster than expected. A recent report from the Canadian Association of Accredited Mortgage Professionals (CAAMP) states that approximately 36 percent of Canadians increased payments to their mortgage in the previous year. They achieved this by increasing monthly payments, switching to a bi-weekly accelerated payment plan or making lump sum payments to the mortgage. Some mortgage holders surveyed indicated they combined more than one of these practices to bring them closer to being mortgage-free. It is important to note the terms of your mortgage before adopting one of these procedures. Every mortgage has a set amount (15 to 20 percent in most cases) that can be payed down without incurring a penalty. It is a good idea to consult your Mortgage Agent if you have questions about the specific terms of your mortgage. This information is welcome news for those concerned about potentially rising mortgage rates. Another recent survey indicates that close to 60 percent of Ontario residents polled can comfortably afford a 2 percent mortgage rate increase. Read the full article from the Ottawa Citizen here. March 30, 2012 Whether you're looking to refinance your mortgage for a lower interest rate, to consolidate debt, to renovate your home or to switch from a variable to fixed rate, the process is very similar to applying for a first mortgage. This article from the Financial Post, featuring Frank Napolitano, is an informative look at what you will need if you are looking to make changes to your existing mortgage. First and foremost, a good credit history is a must. Your mortgage payments should always be made in full and on time, as well as payments to any other credit products in your name. You should be able to produce documentation that shows your income can support payments to all of your debts. If you are extending the amount or amortization of your mortgage, it is important to have equity in your home. If you are looking to consolidate your debt, pay your mortgage faster or shorten the amortization period, you will need to show you have access to the funds that will enable you to do this. For more information, read the full article from the Financial Post here. March 29, 2012 Homeownership remains a common goal among the majority of the population. Aside from the knowledge that your monthly mortgage payment is going towards property you will eventually own, there are numerous benefits to owning a home. For first time buyers especially, beginning the process can be overwhelming. Finding Your Comfort Zone from the Globe and Mail gives a summary of important mortgage terms to familiarize yourself with before setting out to apply for your first mortgage. In An Investment of a Lifetime, the Globe and Mail details the personal and tax benefits one can reap from investing in real estate. With tax season in full swing, many will be pleased to know any gains obtained from selling their principal residence are tax free. For those looking to invest, it is nice to know there is still an option that lends more security and less uncertainty. For more information on how homeownership can benefit you, read the full articles by accessing the links below. Finding Your Comfort Zone An Investment of a Lifetime March 28, 2012 It is always important to maintain a credit history, regardless of marital status. Life events can bring unforseen circumstances, such as applying for a mortgage without your spouse. It is essential to remain prepared, especially when it comes to finances. This article from Robb Engen illustrates how simple it is to keep a credit history active, even as a stay-at-home spouse. Many banks offer low or no fee credit cards, so it may be wise to acquire one in your name only. Limit the use of the card as necessary for you, and make the regular payments to keep a positive credit history for yourself. Always remember that keeping an existing credit product is often easier than applying for one after years of not having a steady income. Keep some bills in your own name, and ensure they are paid promptly and regularly. It only takes one missed payment to affect your credit score. Finally, if it works for you, keep a bank account in your name only. Merging your assets doesn't have to mean relinquishing financial independence. Read the full article from Toronto Star's Moneyville here. March 27, 2012 Each Saturday, Steve Gregory, Frank Napolitano and Paul Rushforth bring you relevant discussions pertaining to today's real estate and mortgage market. This week, they are joined by Jean Ravenda, the President of Club Piscine, who answers listeners questions about pools and hot tubs. As spring draws nearer, many are looking to renovations to add value to the home. It is important to note, however, that not all improvements actually add value. This podcast contains information regarding the pros and cons of installing a pool or hot tub to boost resale value, and what to look for as a conscientious buyer. Spring renovations aren't the only issue on buyers' minds. Low mortgage rates are extremely prevalent in the news recently, raising several questions from homebuyers. The gentlemen discuss responsible lending and the important role of a Mortgage Agent in advising first time buyers appropriately. Listen to the full podcast from 580 CFRA here. March 26, 2012  Current Mortgage Issues What Recent Data Illustrates -Recent Statistics Canada data shows Canadians are listening to the message of Minister Flaherty and Bank of Canada Governor Mark Carney: Overall household income to debt levels declined in the most recent quarter. Canadians are acting responsibly; -The Canadian Real Estate Association in its most recent report highlights a balanced market overall for listings and sales; -CAAMP's February 2012 report entitled "Employment Impacts of Housing and Mortgage Activity" shows that between 2006 and 2011, 18% of all job creation occurred as a result of the housing and mortgage sector. At a time of concern over employment levels, we must not adversely affect this economic engine. What Other Data Illustrates -The rate of mortgage credit growth is slowing; -CAAMP research shows the vast majority of Canadian mortgage holders can accomodate rate increases (84% can handle a $200/month increase); -36% of Canadian mortgage borrowers are increasing their payments, making lump sum payments or increasing the frequency of their mortgage payments. What We Must Be Mindful Of -Instituting mortgage insurance rule changes that may precipitate a housing downturn the federal government wants to avoid; -Even some advocating changes to mortgage insurance rules state "We need to be careful that changes in regulation don't trigger the unwind we fear ... " CAAMP could not agree more, we must be mindful of unintended consequences; -Maintaining choice for Canadian borrowers so that we do not end up in a situation where the number of lenders is reduced; -Basing mortgage / housing policy on one local market that adversely affects the country. What We Should Do -Continue to monitor the housing market and take action when data requires it; -Maintain current system which is working. Previous changes to mortgage insurance rules are having an impact. Refinancing is down 40%; -Make sure any changes are balanced and targeted to those segments of the market where there may be concern, based on data; -Responsible borrowing is only effective with responsible lending. The most recent data shows Canadians are acting responsibly, so should lenders.   For more information, visit the website for the Canadian Association of Accredited Mortgage Professionals. March 23, 2012 After a mild winter and an early start to spring, Canadians are looking forward to a busy real estate market in the coming months. CBC news reports that in January and February, approximately 80 percent of Canadian markets showed an increase in sales figures from the same time last year. The combination of low mortgage rates and buyer confidence seem to be fueling this early start to the spring rush. Most major Canadian markets are seeing an increase in performance in the double digits, including Halifax, Saskatoon, Regina, Edmonton and the Greater Toronto Area. The only markets seeing a slow down in sales results are Vancouver, Kitchener-Waterloo and Winnepeg. Elton Ash, the Regional Vice-President of Re/Max in Western Canada, is confident that home price gains will continue to be "much more moderate than in years past," according to this article. Statistics will inevitably vary from market to market, although on the whole, it is believed the spring market will be well balanced. For more information, read the full article from CBC news here. March 23, 2012 With spring and summer rapidly approaching, spring cleaning and making your home eco friendly start to be top of mind. Whether you're thinking of renovating your home, or simply starting some spring cleaning, the Ottawa Home and Garden Show website gives several tips to start the process. If you're renovating your kitchen, there are many products on the market to help you do so while staying eco friendly. From cork or concrete flooring options to wheatboard or bamboo cabinets, just a few simple changes can make a significant difference. There are even paint products on the market with low or no volatile organic compounds that will reduce toxins in the air when you're planning a fresh coat of paint. If your spring schedule doesn't include renovation plans, there are still simple changes you can make around the house to reduce your carbon footprint. -Changing to energy saving lightbulbs isn't only eco friendly, it will save you a significant amount on your electricity bill. -If your dishwasher has an energy saving option, try to use it whenever possible. -Try filtering your tap water instead of buying bottled water to cut down on container waste. -Try one of the many lines of biodegradable cleaning products on the market to complete your spring cleaning to do list. The Ottawa Home and Garden show runs from March 22nd to 25th at the CE Centre. You can find a wealth of information as well as the complete article here. March 22, 2012 THANK YOU to the people of Ottawa who have once again voted us the Consumer Choice winner in the category of "Mortgage Companies and Brokers"! We are very proud of our team of Mortgage Agents and Brokers and all the excellent support staff who work together for our clients! March 21, 2012 After a slow December and January, home sales showed significant improvement in the month of February, according to the latest reports from the Canadian Real Estate Association (CREA). These statistics should calm worries about an imbalanced housing market, and encourage those thinking about applying for their first mortgage. Both home sales and newly listed homes increased from January to February, and sales activity compared with the same month in 2011 has risen 8.6%. Gary Morse, the President of CREA is confident that this sales activity will have a positive effect on both the Canadian economy and job market, creating over 159,000 jobs in 2012. The average home price has seen an increase as well, approximately 2% above the same month in 2011. This is driven by the preference toward detatched single family homes, traditionally priced higher than the remainder of the market. These prices are not expected to have the same dramatic increase as this time last year, which was punctuated by a flurry of home sales in one of Vancouver's most expensive neighborhoods. Read the full article from the CREA website here. March 20, 2012 Whether you're in the market for a resale or a brand new home there are desireable factors in each situation. In this Moneyville article, Robb Engen draws on his personal experience to illustrate the pros of buying a newly constructed home. Having the ability to customize your new home is a plus for many homebuyers. Multiple factors, from the flooring to the kitchen cupboards, are within your control. Making upgrades is significantly easier when a home is being constructed than after moving in. Customizing a resale home to your needs can be a long and expensive process. With new building code standards and advancements in materials used, new homes tend to be more energy efficent than many resales. This, coupled with new appliances can save you money in the long run on your utility bills, leaving you extra money if you'd like to pay your mortgage off faster. March 19, 2012 When examining your financial situation or applying for a new mortgage, knowing your debt-to-income ratio is a good indicator of where you stand compared to the majority of the Canadian population. Statistics Canada publishes a report citing the Canadian average of debt-to-income ratios, and it is simple to calculate your own. The Globe and Mail reports that while there are several online calculators you can use to find out where you stand, there is actually also a very simple formula. Simply add up your total debt and determine what percentage that is of your annual income after taxes. Statistics Canada's last published report of Canadian's debt-to-income ratios showed the average to be 153%. It is important to remember, however that if your ratio is higher than the average, you are not necessarily in financial trouble. Keep in mind you are measuring your entire debt load to only one year of income, and it is impossible for the average Canadian to pay off an entire mortgage in one year.   March 16, 2012 Headlines about Canadians having an abundance of debt have saturated the news lately. However, what these articles usually fail to comment on is the difference between "good" and "bad" debts. The real estate market is currently driving our economy, and purchasing a home is an investment that builds value over time. In this podcast, Mortgage Agent Frank Napolitano and Real Estate Agent Paul Rushforth discuss these and many other issues pertinent to today's mortgage market. Another recent trend getting a lot of media attention is all-time low mortgage rates. Canadians purchasing their first home or looking to simply renew their mortgage are eager to take advantage of these offers, and that's where Mortgage Agents come in. An agent's priority is education, which goes hand in hand with negotiating on your behalf. It is worth a call to a professional Mortgage Agent to truly take advantage of everything the market has to offer. March 15, 2012 Maximizing their income tax refund is something most Canadians seem to be thinking about this spring. Combining tax time with the expense and stress of moving brings up a whole new set of questions, and it is common not to realize the potential of your refund simply by not being informed. There are constantly changes being made regarding eligible deductions, and being educated is necessary for such an important task. This article from Moneyville contains several examples of possible deductions you may not have considered. If you are moving to reduce your commute to work by more than 40 km, the fees you incur by breaking the mortgage on your current home can be used as a tax deduction. Revenue Canada will also allow you to deduct moving costs, if you are moving to pursue full-time college or university studies. Costs associated with selling your property when you make this move may also be deductible. Commission fees and legal fees are two examples of this. As always, it is recommended to speak to your tax professional before claiming a deduction you are unsure of. March 14, 2012 For many, being in debt is an uncomfortable situation. However, it is important to be able to separate so-called "good" and "bad debts." This excerpt from How to Speak Money, by Ali Velshi and Christine Romans, lays the foundation for those looking into borrowing money, especially those who are new to the process. There are some situations in which borrowing money is essential. A new home, for example is something most people don't have the means to pay for all at once. Mortgages make the transition from renting to owning possible. And with today's low mortgage rates, what often seems to be a dream for many is swiftly becoming a reality. So what should you ask yourself before applying for that new mortgage? First and foremost, it is vital to know your budget. Sometimes, what you can afford and what is reasonable are two different things. It is also important to think about how this will affect you, your family and your financial future. For many, purchasing a new home becomes a lucrative investment over the years. Knowing where you stand financially now and where you plan to be in the future is necessary before diving into a mortgage, especially for first time buyers. March 13, 2012 Finding your credit rating is a necessary step for those looking to purchase a home.  Your credit rating has a huge effect on the process, from the type of mortgage you will qualify for, to the interest rate you will be offered.  So how can you find your credit rating, and how do you evaluate it? CBC news answers these and several other questions about making sense of your credit report. There are two major credit companies in Canada that offer you access to your credit report-TransUnion of Canada and Equifax Canada Inc.  These companies can give you a detailed breakdown of your credit situation; however, don't assume that each report will be identical.  It may be in your best interest to get both to be sure that you are getting the complete picture.  Both companies allow you to view your credit report instantly online for a small fee. If you can wait, you can also request a free copy of your report by mail. This will require you to send photocopies of two forms of identification. There are further details on this process online. When looking over the documents, the first thing to be sure of is that your personal information is accurate.  There may be minor spelling mistakes in your name or address, for example, or information about previous mortgages from old addresses.  Overall the information should be accurate, and contain no information which does not pertain to you, or looks as if it might be fraudulent. The second section of the report is the most important.  It contains data on all loans you have taken out in the last six years. It also includes the amount you still owe on these loans, what the credit limit is and if you steadily make your payments in full and on time. Each loan is further classified to distinguish between revolving loans or installments, and noted with a number from 0 to 9. The lower the number is the better, as 9 shows that the debt was sent to a collection agency or is classified as “bad debt.” March 12, 2012 As the April 30th deadline for income tax filing draws closer, Canadians are eager to find a way to get the most out of the process. Whether using a software program, filing online or paying to have it done for you, it's not always easy to know what you are entitled to. This article from Moneyville is a comprehensive guide to get you started on the path to the best refund available to you. First, ensure you are familiar with the list of changes that have been made for 2012. From benefits for students, employees and families with children to medical expense claims and changes to the Canada Pension Plan, it is worth your time to find out if any of these almost 60 changes applies to you. You will also learn of the most common mistakes made when filing income taxes and how to avoid them. Most of these include overlooking items that could be filed, such as charity donations and child care expenses. However, it is important to ensure you have adequate documentation before claiming these. Lastly, you will find several tips on how to maximize your 2012 tax refund. Becoming a homeowner, families filing together, filing every year and saving money in a Tax Free Savings Account are just a few ways you can make the somewhat daunting task of filing income taxes work for you. March 8, 2012 In a piece for the Toronto Star's Moneyville, Gordon Pape discusses the challenge Canadians face when it comes to investing their hard-earned money. There are several options available, such as GICs, stocks, bonds and real estate. It is increasingly common for those looking to invest to obtain a mortgage on a primary residence or an investment property. That coupled with the recent trend of low interest rates makes this a smart investment, as long as it is done properly. In this article, Pape discusses some things to keep in mind if you are considering investing in property. First of all, be sure you can afford it. Interest rates do fluctuate, so it is important to know you will still be able to make your monthly mortgage payments if interest rates go up. Next, are you purchasing a property to resell for profit? If so, you must be sure you will be able to complete any necessary renovations and be ready to put the house back on the market while it's still hot. Finally, ensure you factor in any extra costs. Take into account insurance rates, condo fees, heat, hydro and any unforseen expenses that come with home ownership. March 7, 2012 Searching for a new home is a long process. There are a lot of decisions that need to be made, from the neighborhood to the size of mortgage you can afford. For many, finding that perfect home may seem like the end of this process. However, before finalizing what may very well be the largest investment you will ever make, it is important to be sure this is the right home for you. This article from the Toronto Star gives several examples of things you should do before deciding on a certain property. From simple things like talking to residents in the same neighborhood to finding a real estate agent that specializes in your desired area, you can find out pertinent information that can save you time and regret later on. Concurrently, the importance of having a thorough home inspection and researching the history of the property should not be underestimated. Overall, the search for a new home should be a fun process, but setting your emotions aside and buying smart can ensure you truly end up in your dream home. March 2, 2012 For those starting the mortgage application process, home price statistics released earlier this week will be welcome news. In this report from the Ottawa Citizen, we find December's home prices fell by 0.2 percent compared with the previous month. This decline is followed by a flat October and November. These statistics are based on analyses of 11 Canadian real estate markets, including Ottawa, Montreal, Toronto and Vancouver. Though year over year statistics have shown slight increases, it is believed the Canadian housing market conditions are balancing, calming fears of an impending housing crash. March 1, 2012 Making the decision to purchase your first home is an exciting time. It should be noted, however that this is the first of a series of important decisions you will have to make. This article from the Toronto Star is a helpful guide to assist you in navigating through one of the most important investments in your life. Before starting the search for your dream home, it is important to ensure your finances are in order. You should calculate your net worth (assets minus liabilities) and assess the amount you are able to use for a down payment. Talking to a professional mortgage broker is also key. This will give you an idea of the price range you should be shopping within as well as possible interest rates. Once the process has begun, keep in mind that you will need to hire a real estate lawyer. Ask your mortgage broker for any that he or she may recommend, and don't be afraid to compare rates. When you begin your search for the home of your dreams, remember to be realistic. Having a wish list is fine, but sometimes it is necessary to compromise. February 29, 2012 It is the belief of some that the Canadian housing market is headed for a crash. This article from the Ottawa Citizen shows that this concern is based primarily on perception, and two recent market analyses prove that this negativity can easily be dismissed. In a conversation with Matthieu Arsenau, a representative from the National Bank, it is illustrated that analyzing the market by measuring the amount of a current mortgage payment against mortgage payments of the past shows that the rise in the expense is not excessive. It is also proven that although the percentage of Canadians able to afford a new home is continuing to rise and interest rates are staying moderate, there is still unused borrowing room. The majority is staying well informed regarding the housing market and being cautious regarding borrowing. February 28, 2012 Planning ahead is essential in the home buying process, especially when it comes to budgeting. Here, the Toronto Star helps to make the closing process and its associated costs a little clearer. One of most substantial portions of the closing costs will be the legal fees. It is always helpful to contact more than one law firm for a quote or asking your mortgage broker which law firm they recommend. Some law firms specialize in mortgages and will offer a discounted rate as a result. Other costs to keep in mind are the property tax adjustment and the interest adjustment. If you are purchasing an existing property, you are required to reimburse the previous owners for the property taxes they have prepaid for that year. The interest adjustment is an interest only payment calculated from the closing date until the interest adjustment date. February 27, 2012 Though spring seems to be just around the corner, the effects of winter weather on the home is still a concern for mortgage owners. Rising temperatures and melting ice and snow for many means putting the heavy coats and boots in storage and planning outdoor activities. But what does this weather change mean for the home? This article is a helpful overview of what homeowners should keep in mind when the snow starts to melt. One of the most important things to be aware of outside the home is the roof. A heavy layer of snow on the roof combined with the rising temperatures during the day can cause "ice damming," a process that causes excess water to collect on the roof and force itself under the shingles, which eventually can penetrate the roof. This can be easily prevented by ensuring that any roof vents are clear of excess snow. While visually inspecting the roof, it is worthwhile to check a few other areas of the home. The basement windows, for example, should be visible and not covered with snow. If the latter is the case, quickly melting snow or freezing rain can expose these windows to an extreme they were not designed to take on, causing a possible leak. It is certainly beneficial to keep these few simple measures in mind to prevent possibly costly repairs in the future. February 24, 2012 Seeing a light at the end of the tunnel when it comes to your mortgage payments is a terrific feeling. However, discharging early, though satisfying, isn't without penalties. This article from the Toronto Star illustrates various situations in which a prepayment penalty can occur, and how to avoid paying more than necessary. This is of particular importance to those with a variable rate mortgage, which has a fluctuating rate based on prime. In this case, when the prime rate is lower, more of the payment will go towards the principal than the interest. If you choose to pay off this mortgage early, the bank will lose out on interest payments and you can incur a penalty. There are also options to avoid penalties when renewing for only a short term. These include: - Renewing for a short term at a variable rate but keeping payments the same and paying what is left over at the end - Taking out a short term fixed rate mortgage and increasing monthly payments -Increasing only your mortgage term and decreasing your payments. This is a good option for those who don't have as much financial freedom.   February 23, 2012 A recent survey shows that 65% of Canadians do not compare between lenders when their mortgage comes up for renewal. It may be the easiest route to simply renew with your original lender. However, renewing at a lower rate can mean the difference of thousands of dollars in interest. This article illustrates that there are several reasons to do some comparitive shopping before renewing your mortgage. Your mortgage needs are likely different now than they were when you originally purchased your home, or even the last time you renewed. Renewing at a lower interest rate can lower your monthly payments, giving you more financial freedom. You may even be able to use the equity you have built towards home repairs, renovations or even debt consolidation. If it's time to renew your mortgage, consider your options. Enlisting the services of a professional mortgage broker can be of substantial benefit to you. February 22, 2012 Canada's current house market is thriving thanks to the recent decrease in mortgage rates. This interview with George Athanassakos, a professor of finance at the Richard Ivey School of Business shows housing investment as a percentage of the gross domestic product (GDP). Historically, when this ratio reaches the 7% mark, the price of the average home tends to decrease. Based on figures from Statistics Canada, the ratio of Canada's housing investment to GDP is currently close to reaching 7%, meaning we should see a correction in home prices in the coming months. February 21, 2012 Three major factors to keep in mind when applying for a first mortgage are credit, employment and a down payment. For many new graduates, these factors may seem intimidating. Many believe that student debt and a new career can negatively impact the chances of getting approved, but the Globe and Mail reports that this is not always the case. The first priority is to formulate a realistic budget. Once you start house hunting, it is easy to get caught up in that ideal "dream home". However, this can easily lead to over spending. It is important to know what you can realistically afford. Once you have a budget in mind, speak to a professional mortgage broker. This will give you viable information regarding what lenders are looking for when you apply. For instance, student debt is often viewed as a negative when, in reality, if you are making your payments in full and on time, this has a positive impact on your credit rating. Employment is also important. It is recommended to be able to show at least a year of steady employment in your new career to prove stability. Purchasing your first home is an exciting endeavor. This article is an excellent summary of very important points to get you started. February 17, 2012 When To Consider Raising Your Home Buying Budget Setting a budget for your home purchase is an important decision.  You need to know how much you can afford each month and translate that into the amount you can afford to take out on your new mortgage.  When you start house hunting with that budget in mind, you may find that you are not seeing many homes in the price range you have set that match your needs. There are three choices you have in this situation.  The first is to wait it out, keep looking, and hope the house you want comes up on the market in your price range.  The second is to compromise and buy a house that is affordable but not really what you want.  The final choice is to look at raising your home buying budget. How Much Will It Really Cost? The first thing to consider when you are looking at raising your maximum purchase prices is what difference it will make in your actual monthly payment.  In many cases, the difference may not be as difficult to handle as you might think.  Pull out that mortgage calculator and figure out what it would cost you per month to go $25,000 over budget, $50,000 over budget, or even $100,000 over budget.  Sometimes even a small raise in your maximum price can put you into a whole new class of available homes. Do You Have A House In Mind? So you drove past a house for sale the other day and fell in love, but it's out of your price range.  Take that number home and punch it into your mortgage calculator.  Can you afford that house, even if it might be a stretch?  Are you willing to consider making other budget cutbacks, such as on entertainment, to have the home of your dreams?  Prioritize your expenses and be realistic about your needs versus your wants. If having the right house is important enough, and the increased price is not going to strain your finances too much, you can consider going for it.  Remember that you can always offer less than asking price, and hope to get that dream home for a price closer to the original budget. A little flexibility is always a good idea when you start searching for the right house.  Remember that a new home is an investment and sometimes spending a little more will reward you later in terms of property value.  It can also save you from having to move again when you decide the compromise to save money was not worth it. February 16, 2012 Before diving into a new mortgage for a rental property, there are several things to consider. Purchasing an investment property while you rent is a terrific way to get started in the mortgage market, however, one needs to be well informed of the differences between purchasing one's own home and a property that is being rented. This article gives a summary of important points to keep in mind when making this decision. The first thing to consider is to establish contact with Revenue Canada regarding any taxes you would be liable for. They can also inform you of which expenses can be offset against the rental income. It is also important to know that while some lenders will advance 80% to purchase an investment property, it is often less expensive to put 20% down. Finally, keep in mind who will be inhabiting this residence. It is recommended to view renting a property as a business transaction. However, it may be difficult for some to detatch emotionally when a large portion of their savings is involved. February 15, 2012 With two weeks left to make RRSP contributions, many Canadians are grappling with the tough decision of where to invest their contributions. Many take the traditional route and invest in GICs, stocks or bonds. However, the Financial Post shows that the funds from your RRSPs can be invested in your mortgage. It is important when considering an investment of this nature to know that it comes with a set of strict regulations. One should also bear in mind the costs involved, such as mortgage administration fees and insurance premiums. Investment options aren't always easy to choose, however, this article gives relevant information on an option that could prove to be a lucrative one. February 14, 2012 The Canadian Mortgage and Housing Corporation, the crown corporation that insures Canadian mortgages, seems optimistic about the housing market in the next two years. Recently, there have been steadily rising concerns of what record low mortgage rates will do to the housing market. However, in this article we learn the CMHC is predicting the market will stay at a steady pace into 2013. This coupled with the expanding Canadian economy is expected to keep the market on an even keel. We also learn the average home price will slightly increase in 2012 and into 2013. These increases are moderate and shown to be consistent with the market conditions of 2011. February 13, 2012 While some may seem like they have it all figured out, many Canadians are struggling with the choice between the largest financial priorities in their lives. With a mortgage, a growing family and retirement in the future, where should the bulk of your income be spent? Building equity in your home, contributing to an RRSP or saving for your children's education? Of course, these choices will not be the same for everyone. Depending on interest rates, some are able to pay their mortgage off faster which will allow for a little more financial freedom in their retirement. Ultimately, this decision boils down to the individual and their personal goals. This article gives a little more insight into a decision with many factors. February 10, 2012 Before diving into a new home purchase, a thorough home inspection is a must. Although finding a trustworthy home inspector may not be a challenge, it is difficult, especially for first time homebuyers to put all of their trust in one person. This article gives a detailed list of areas to check that you or your home inspector may not think of. From inspecting and possibly running appliances to very simple things like moving items on counters to look for defects, this list is a comprehensive summary of important details to keep in mind when inspecting your dream home. A new mortgage is an incredibly important decision, and the home inspection is one of the most important steps included in the process. Taking some extra time and effort when inspecting your home can save you ample time and maintenance later on. February 9, 2012 The Globe and Mail reports a January decline in housing starts compared to December. The January rate of annualized housing starts was 197,900 units compared to December's rate of 199,900. Despite this decrease, the statistic is still above the expected rate of 194,000. It has been suggested by the Bank of Canada that some markets have become overvalued, and building permits in December reached a 4 1/2 year high. However, regulators are closely monitoring the situation. Although there is some concern on behalf of lenders that mortgage seekers are spending more than they earn, it is expected that the housing market will stabilize. February 8, 2012 The MLS Home Price Index shows an increase of 0.27 percent over last month and a 5.2 percent increase over last year. The Home Price Index monitors home prices in five major urban markets but does not provide any actual prices. In this article, we learn that although home prices are up from last year, month to month growth appears to be steadying and is expected to stabilize in the coming months. The good news for mortgage seekers is that townhouse and apartment prices are showing signs of slowing. Canada's policy makers should be pleased with this development, as these market trends should decrease the fears of a housing bubble. February 7, 2012 As we draw nearer to tax time, Canadians will receive a high frequency of reminders to make their RRSP contributions. This is believed to be good advice for most. However there are cases where putting your savings into an RRSP isn't always the best idea. As a first time home buyer, clients have the opportunity to withdraw funds from their RRSP to apply to their first purchase. RRSP contributions are ultimately a tax deferral or sheltering tool. This article illustrates the situations in which making an RRSP contribution will not necessarily give these benefits. Will your salary be increasing in the upcoming years? Are you met with a high volume of expenses alongside your mortgage? Do you have a pension plan at work? If you fall into one of these categories, you will also be given other options to consider that may benefit you more, such as contributing to a Tax Free Savings Account (TFSA) or making the contribution to your RRSP and simply not claiming it in this year's tax return. February 6, 2012 On Tuesday, documents released by Bloomberg showed signs that the Office of the Superintendent of Financial Institutions is concerned about the effect that loosening mortgage standards will have on the Canadian economy. In this Globe and Mail article, it is reported that lenders are tending to hand out loans without sufficient income requirements. Banks are under scrutiny as reports reveal that loans are being administered with the mere promise of repayment. Finance Minister Jim Flaherty shares this concern, but assures the public that these issues are being corrected. February 3, 2012 Renovating your kitchen is a great way to add value to your home and simplify your day to day routine. This article provides the top ten tips for a smooth kitchen renovation. From what materials will be the best for you to what important decisions to make before you start, these tips should prove extremely helpful when planning your kitchen renovation. You'll also learn what common pitfalls to avoid, like choosing a stain for your cabinets that isn't cohesive with the rest of your colour schemes. It is suggested you select surfaces that are easy to maintain and clean. In addition, keep it simple. Don't go overboard with decorative details or over the top appliances with all the bells and whistles. It is sometimes unecessary and may not always give you the best bang for your buck. For many people who have the goal of a dream kitchen, there are several refinancing options available. Make your dream a reality! Refinance or take out a Home Equity Line of Credit. This can be an excellent way to achieve your renovating dreams. February 2, 2012 Retiring with a mortgage doesn't have to be a nightmare. After retirement, continuing mortgage payments isn't always ideal. However, having a plan can provide options. This article outlines how mortgage payment options can assist you with your transition into retirement. February 1, 2012 As the Crown corporation draws closer to the 600 billion dollar cap imposed by the Federal government, the Canada Mortgage and Housing Corp. is starting to cut back on the amount of mortgages it will insure. Recently the CMHC has been met with an unexpected volume of requests for portfolio insurance. Click here to find out more ... January 31, 2012 Despite warnings about Canada's overstretched housing market, this article indicates we are not in the midst of an economic meltdown.  It is believed a true meltdown would only be precipitated if we see a sudden spike in mortgage rates. January 31, 2012 See how weighing the options of using your RRSP's vs using your TFSA can help first time homebuyers. January 30, 2012  Steve Maxwell :  SPECIAL TO THE STAR A good house in good repair. This is my idea of home improvement success, and if it’s also yours, then I want to explain something that rarely gets talked about. Whether or not you’re seriously into doing renovations and maintenance yourself, or you hire a professional to do everything right up to replacing the light bulbs, the key to a good house isn’t fundamentally about hands-on skills. Sure, the ability to work with tools is important (either your ability or that of the pros you hire), but skills are not enough. I’ve seen more than a few skilled people spend a lot of money renovating homes badly. I’ve also seen naturally klutzy people transform ugly, rundown places into beautiful houses in great condition. So what’s the difference? The make or break issue boils down to the way you handle inevitable, unforeseen problems as they emerge, especially in relation to time. Every human endeavour spawns problems and unpleasant surprises. Roadblocks are inevitable, but they’re especially common whenever home improvements are involved. And the older your house, the wilder and more interconnected your roadblocks are likely to be. Take a typical flooring replacement job in an older home as an example. You’ve got it in your mind to install that laminate flooring that’s been piled in your living room for a week, and you’ve taken four days off from work to get the job done. You spend the morning tearing up the old carpet, and discover why the floor has always been so squeaky. The original subfloor is made with pine boards alone, not capped with plywood as you expected. These boards are secured with nails that have worked loose over the years. You could screw the boards down, except that the screws you have kicking around in the basement are only long enough to penetrate ½ inch into the underlying joists, instead of a more reliable 1 inch. The boards are also uneven here and there, and you seem to remember something about laminate flooring needing a nice flat surface underneath to support it. With the carpet gone, you also notice drafts coming up from the basement through cracks between boards. It’s decisions you make at stages like these that determines whether you’ll have a good house or a bad one. The thing about home improvement disasters is that they rarely look like disasters in their embryonic state. What appears to be a little surprise about the subfloor in your living room actually holds the seeds of three different reasons your new floor could end up being a total mess. The loose, uneven and gapped subfloor boards are unforeseeable roadblocks, and the difference between success and failure depends entirely on resisting the common and powerful emotion of impatience. Before you started your flooring job, you had your heart set on walking on a new floor before going back to work. That’s a good goal, but the fact that it was based on incomplete information doesn’t naturally eliminate the urge to plow ahead and “get things done” even though circumstances are different than you initially believed. So do you use those screws that are not quite long enough, or get in the car and buy the right ones? Do you go online and find out how flat a subfloor really needs to be to properly support your particular brand of laminate flooring, or do you go ahead and lay the floor as things are, hoping for the best? And when you go online and find out that the 1/8-inch ridges in the subfloor are too tall, do you track down a power planer and hog them off after setting all the old nail heads below the surface of the wood? The route to home success in any venture is rarely a straight line. It almost always involves backing and forthing as new information comes in and new realizations appear. Home improvement success is often based on your ability to say no to the timeline of your initial game plan in favour of doing things optimally. Notice I didn’t say “perfectly.” There is no such thing as absolute perfection in this world, and trying to achieve it will drive you and any hired trades people crazy. That said, things can be functionally perfect, and this is worth shooting for. You or your pros need to understand the need to bend and flex in the pursuit of functional perfection. This often comes down to nothing more than the ability to endure short-term disappointment (no new floor before your next shift at work), in favour of better long-term results. Show me a person’s home and you’ve shown me how they deal with roadblocks throughout their entire life. The ability to flex and optimize with wisdom and patience as reality intrudes on our plan is where quality really comes from. January 27, 2012 Ryan Remiorz THE CANADIAN PRESS OTTAWA—A new analysis of household finances shows Canadians least able to afford it — boomers nearing retirement and those already in hock — are the ones piling up the most debt. The CIBC says its analysis suggests Canada may have a bigger household debt problem that the raw numbers suggest. The raw numbers are bad enough. The ratio of household debt to disposable annual income has reached 153 per cent. That’s a record high for Canada and approaches the 160 per cent level that preceded the housing collapse in the United States four years ago. But a closer look at who holds the debt shows those already above the 160 per cent line — about one-third — hold three-quarters of all the household debt. As well, a rising share of the highly indebted are 45 years and older, a time when the opposite would be expected. CIBC chief economist Avery Shenfeld says the micro analysis of debt does not point to a crash, but suggests that household spending will need to slow and will dampen economic activity going forward. January 26, 2012 Jonathan Chevreau  Jan 25, 2012 – 7:59 AM ET It was front-page news recently when BMO’s 5-year mortgage rates dipped below 3% for the first time in its 190-year history. Other banks followed with similarly sweet deals: RBC offered a four-year special 2.99% fixed-rate mortgage and a 3.99% rate on a seven-year term. When a week later the Bank of Canada held the line on interest rates, it should have been clear these historically good times for indebted homeowners may continue for some time. But is it an equally auspicious time to borrow to maximize retirement savings plans? RRSP “top-up loans” are available for up to $22,000 to maximize this year’s contribution, for those who lack the cash.  The idea is to repay a big chunk of it with the resulting tax refund come April, then pay off the rest over the next six months, in time to start the cycle again a year from now. But there’s a bigger opportunity if you’re among the many Canadians with tens of thousands of dollars in unused RRSP contribution room built up over previous years. Consider “catching up” with RRSP catch-up loans. Most banks will happily lend good customers $50,000 or even $100,000 for the noble purpose of padding retirement accounts — especially if you choose their investment products. Total accumulated RRSP room is shown on your last notice of assessment or you can check “My Account” on the Canada Revenue Agency’s web site. Even if you contribute the whole amount you don’t have to deduct it all this year: you may want to deduct some of the contribution in future years if you’re in a higher tax bracket. Unlike borrowing for non-registered (taxable) portfolios, interest on RRSP loans is not tax deductible. But if you believe the combination of reasonable stock valuations and low interest rates is compelling, it’s worth considering. Apart from the large tax refund RRSP catch-up loans may generate, there is potential for this investment to grow over time. Uncertainty in financial markets has kept a lid on stock prices. Financial educator Talbot Stevens says data since 1956 shows that when the Canadian market is down at least 10% one year, as in 2011, it often rises more than that the next. Borrowing to invest is safer when markets are down. But if you borrow for your RRSP, avoid the temptation to spend the refund: pay off the loan and/or reinvest the refund into the following year’s RRSP contribution. Under certain circumstances, RRSP borrowers can get rates almost as low as their mortgaged counterparts. John Turner, national director of specialized lending for BMO Financial Group, says customers can get RRSP loans with rates as low as its prime rate of 3% if they invest in BMO products. If investing in non-BMO products, it’s prime plus half a per cent, or a total 3.5%. Note that these are variable-rate loans so it’s not quite analogous to the 5-year fixed rates of 2.99% homeowners are enjoying. “Given this rate and refund environment, most customers are opting for the variable rate,” Turner says. It’s not a requirement but most pay off their RRSP loans right away, he adds. These loans are fully open, with no restriction on repayments: payments can be bumped up or lump sums can be applied to pay down some or all outstanding balances at any time. But what if you choose a larger catch-up loan that requires several years to repay? It would be nice to pay only 3% on a variable-rate loan but what if you believe rates will start rising in two or three years?  Can you lock in an RRSP loan at a low rate that can be repaid over five years, just like homeowners ? Yes, but at BMO the rate is quite a bit higher if it’s an unsecured loan: a whopping 9% unless the loan is backed by real estate or non-registered investments. In that case, investors could get the same 2.99% fixed-rate over five years as homeowners. The problem with straight mortgages is they have less flexibility if reborrowing. An alternative is BMO’s HELOC (Home Equity Line of Credit), which it calls Homeowner ReadiLine. This lets you borrow both variable and fixed in a single instrument, which Turner likens to “dollar cost averaging for mortgages.” For small loans of $10,000 or $15,000 to be repaid in two years, Turner says it makes sense to go with variable at prime or prime plus a half. For such a short term, the security of opting for a fixed rate isn’t worth it. Rates are a bargain currently and the market somewhat depressed so “it would be a great time to get in but you need to sit down with an advisor and make sure the investment meets with your risk profile.” Scotiabank’s catch-up loan lets you repay over 15 years and lets you defer three monthly payments. CIBC’s RRSP Maximizer Loan lets you borrow over terms of one to five years. At TD Canada Trust, RRSP loans start at prime plus 1% to prime plus 1.5%, says associate vice-president personal lending Shahz Beig. The On the Spot RRSP Loan lets you borrow up to $22,000, with a one-year term. Customers can defer payment the first 120 days so they can receive a tax refund and pay off much of the outstanding balance. There are no penalties for paying it off early. TD calls its fixed-rate catch-up loans “carry forward” loans, which can be amortized up to ten years. If you want a 5-year term, you could get a fixed rate of 5.5% or gamble on variable at 4.5%. Beig says it may not make sense for those close to retirement to take out a long-term RRSP loan. It will be harder to repay once retired and RRSP loans count as outstanding credit and may impact applications for other credit needs. At the Royal Bank, vice-president personal lending Richard Goyder recommends paying off RRSP loans within a year since rates may rise by 2013 or 2014. Until then, low rates mean manageable debt servicing costs and an opportunity to pay down principal. He doesn’t recommend lines of credit be used for RRSPs because of their revolving nature. “An RRSP loan has a special purpose and should be paid down over a set term.” Typically, that term is the one year of a top-up loan. Catchup installment (or term) loans up to $100,000 may be available with longer amortizations. Depending on the term and credit rating, the rate will be no more than prime plus two or three points. Not everyone is keen on RRSP loans. Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc., thinks Canadians are too responsive to marketing pitches based on ultra-low interest rates. He sees no problem with smaller RRSP top-up loans if they’re paid back within 90 days but says people with debt problems are often in lower tax brackets and can’t count on the refund paying off 46% of the loan, as is the case with higher-bracket folk. Schwartz is skeptical about larger RRSP catch-up loans if they entail taking on debt over multiple years. In this time of low interest rates and stock volatility, he’s not convinced the financial returns on such loans will cover their carrying cost. It’s worth noting you may be able to catch up on your RRSP without borrowing, if you also have a non-registered portfolio. You can “transfer-in-kind” securities to an RRSP (or a TFSA), but may have to pay capital gains tax if you have a profit on what the taxman views as a “deemed disposition.” Ideally, you find securities roughly the same value as when acquired. January 25, 2012 Garry Marr Financial Post A new round of mortgage rules from Ottawa could include tough new measures for calculating how the self-employed qualify for loans and tighten regulations for condominium buyers, according to two separate sources. Ottawa remains concerned about the possibility of an inflated housing market and wants to crack down on the practice where consumers self-disclose what they make when applying for a loan. In the case of the condominium buyer, the government continues to consider a proposal that would have 100% of condo fees count when assessing how much debt a consumer could afford. “None of this is happening just yet. The housing market has slowed down and the government wants to see what will happen next,” said one source. “If the spring market picks up, then we will see more changes to the rules.” Bank of Canada Governor Mark Carney said Sunday that some parts of the Canadian real estate market are “probably overvalued” and policymakers are monitoring to see if further steps are needed to cool it. “We see that in a number of real estate markets in Canada, valuations are at a minimum, firm; in others, they’re probably overvalued. So there are risks there. We’re watching it closely. We’re working with our partners, the federal government, the superintendent of financial institutions,” he said in an interview broadcast on Sunday on CTV. ” Measures have been taken. They’ve been effective. We’ll keep up that vigilance. If more needs to be done, I’m sure the appropriate authorities will take those measures.” Stated-income products have become very popular during this housing boom, allowing more banks to get involved in loaning to the selfemployed. “These are individuals that are self-employed, have great credit and won’t be able to validate their ability to pay if they are not showing their income on their notice of assessment,” said one source. He says those people with stated income could have to make an even higher down payment than the normal 20% that exempts consumers from buying expensive mortgage default insurance. The source said some self-employed are qualifying for loans based on the assumption they have a lot of write offs, like car payments and housing costs associated with home office costs. “They get to include that based on the assumption that self-employed people have an advantage from a tax perspective,” said the source. “The government is trying to figure how they would present this.” A source with one of the banks said the government is trying “zoom in” on marginal borrowers so it doesn’t get into a U.S. type of situation where they were not verifying income. “What banks are doing usually when it comes with self-employment is not dealing with declared income because nobody believes it. What they do is look at their behaviour and put more weight on it,” said the source, referring to how those consumers handle their debt. “With an employer, you can call and verify their income.” The labour market is roughly about 13% self-employed so new rules could have a major impact but the source indicated it does not mean those people would be shut out of the loan market. “It will be just more difficult for them. You are going to have to prove income in a more precise way,” he said. The suggestion the government might crack down on condo buyers is not new, having been scrapped last year in favour of tougher new rules on amortization lengths and refinancings. Most people in the real estate sector now believe amortizations will be reduced to 25 years after having been as long as 40 just three years ago. Brad Lamb, a Toronto real estate broker and condo developer, has heard the government is again considering including 100% of condo fees in calculating debt levels but doesn’t think it will happen. “The 25 year amortization is a no brainer, they should do it,” said Mr. Lamb. “It’s not smart to have loose lending rules. But the condo market is hot because of investors not speculators. These investors are coming [from around the globe]. This silly [condo fee] change will do nothing. These people are buying with cash.” January 24, 2012 By Paula McCooey, The Ottawa Citizen   If you have a queasy stomach, you may want to take a Gravol because the Ottawa real estate market may be in for a bit of a bumpy ride over the next few years. That's the prediction of two economists speaking at the Greater Ottawa Home Builders' Association economic forecast seminar this week. RBC economist Paul Ferley and TD economist Sonya Gulati say Ottawa and the rest of the country are not protected from the world's economic woes. "The Ontario housing market outlook is not immune to global financial market pressures," says Ferley. "The development in Greece and Italy may seem like someone else's concerns, but they do present a threat to the local economy." And with more than half of Ontario's economy relying on exports to the U.S., the province is "very much dependent on U.S. growth," he says. They both forecast the economic recovery across the country will be moderate and urge the province and individuals to practise fiscal restraint, particularly given that Canadian households are holding record debt levels, which will pose a massive problem when interest rates finally climb. Given the U.S. Treasury Board is expected to maintain lower rates until 2013, Canada is likely to follow suit. But once lending rates do rise, which will happen - as soon as next year, they say - that will pose an issue for families struggling to make ends meet. "We have to watch debt," says Gulati. "If there's a 1.5-percentage point increase in rates, that translates into $250 extra for the average household. That is significant for people on a tight budget." She estimates Canadian homes are overvalued by 10 per cent, so we should expect a price correction of around the same amount. She says home affordability will remain low and gradually deteriorate due to impending higher interest rates. "You can expect a gradual unwinding of home prices and sales activity," she says. January 23, 2012 It is truly astounding how many people lack the appropriate amount of insurance.  Continue reading to learn some interesting facts about disibility insurance. Click here to read about the mortgage insurance that is available for your new Mortgage Brokers City Inc. mortgage. January 20, 2012 Are more sellers taking the advice of their real estate agents and jumping into the market early this year?? This article shows early indications that they are heeding the advice of their agents.  These decisions are based on several factors including the recent reduction in mortgage rates. Click here to find out more about our best mortgage rates. January 19, 2012 Even though the most recent stats indicate a mild softening of the market, this article implies that Jim Flaherty is not going to be quick to intervene. Though mortgage rates are still quite low Flaherty cautions consumers not to make too many assumptions about how long the rates will remain low.  January 18, 2012 Click here to read the full article. January 17, 2012 "Buyer Beware"...  Though some lenders have dropped their 5 yr mortgage rates lower than ever before, be sure to read the fine print.  This announcement does not come without restrictions.  Explore all your options  first, to see what type of mortgage is best suited to you. To find out more about what rates are available to you, please contact us today.     January 16, 2012 Read on to see how having a low credit score can cost you real dollars and cents.  In this excellent article, the costs to client equated to more than $200 per month.  To check your own credit score, go to the Equifax website and order yours today. Click here to explore what factors influence your credit score. January 12, 2012 Thursday, Jan. 05, 2012 4:09PM EST Canada’s housing boom is among the most long-lived in the Western world at 13 years, but the next few years could chip away at the gains that have seen the average house increase in value by 85 per cent since 1998. In a report released Tuesday that said the Canadian housing market was the strongest in the developed world in the third quarter, Bank of Nova Scotia economists said “the slow pace of the global economic recovery, intensifying sovereign debt concerns, weak consumer confidence and high unemployment all continue to weigh on residential property markets” in 10 countries it tracks. The malaise has already set in – of the 10 countries studied in the third quarter, average inflation-adjusted home prices were below year-ago levels in seven of them, and above in three (including Canada, where prices are 4.8 per cent higher). The other countries to post gains were France at 4.4 per cent and Switzerland at 3.3 per cent. The sharpest declines, meanwhile, were seen in Ireland were prices were down 14.7 per cent. “Canada remained a notable outperformer, though activity here too shows some signs of cooling. Weak market conditions will likely persist well into 2012,” economist Adrienne Warren wrote. “While the combination of low borrowing costs and lower home prices have bolstered housing affordability, there is insufficient domestic momentum in the majority of advanced nations to support a significant revival in demand. An oversupply of housing and a more cautious lending environment also will hold back the recovery.” Merrill Lynch warned Monday that prices could correct by as much as 10 per cent in the next two years in Canada because of weakness in the economy, expressing particular concern about Toronto’s condo market. The Bank of Canada also warned the Toronto market looks overbuilt and could see prices drop. “The cycle of rising real home prices is long, lasting on average 12 years,” Ms. Warren wrote. “Italy’s boom was the shortest at 8 years, while Ireland and Sweden count 15 years. Canada’s ongoing housing boom is in its 13th year... Canada’s residential real estate boom started several years later than many of its counterparts, with the economy still feeling the effects of the deep recession of the early 1990s and weak labour markets through mid-decade.” From the report: "The Canadian housing market remains an outperformer among advanced nations, with real home prices up 4.8 per cent y/y in Q3. While the sector’s continued buoyancy is impressive, monthly data through November suggest prices have leveled off since the spring, with conditions in the majority of local markets in ‘balanced’ territory. Ultra-low interest rates are still attracting buyers, but increased economic uncertainty combined with some recent slowing in the pace of hiring could dampen demand in the new year. In the United States, average inflation-adjusted home prices fell 7.5 per cent y/y in Q3, bringing the cumulative decline since the 2005 peak to over 30 per cent. Despite near-record affordability, persistently high unemployment, tight credit conditions and a lingering oversupply of unsold and foreclosed properties suggest a sustainable recovery could still be several years away. The French housing market remains the most resilient in Europe. Average inflation-adjusted home prices were up 4.4 per cent y/y in Q3, and are nearing pre-crisis record highs after a brief downturn in 2008-2009. Tight housing supply is underpinning prices, but these continuing gains appear unsustainable in an environment of high unemployment, government restraint and slowing regional exports. Switzerland’s housing market also remains relatively buoyant, with average prices up 3.3 per cent y/y in Q3. Ireland still holds title to the weakest residential market in our sample, with average inflation-adjusted home prices down 14.7 per cent y/y in Q3 and by a cumulative 44 per cent from their early 2007 highs. The steep and continuous price declines of the past four years have essentially wiped out a decade of price appreciation. U.K. house prices are declining again after a brief recovery in 2010. Real home prices have contracted on a year-over-year basis for the past three quarters, falling 6.7 per cent y/y in Q3. Spain’s deep housing slump continues, with average prices down 8.9 per cent y/y in Q3 and almost 25 per cent from their early 2007 peak. Prices have also recently dipped into negative year-over-year territory in Sweden, consistently one of the region’s better performing housing markets. In Australia, average inflation-adjusted home prices fell 5.7 per cent y/y in Q3. Even so, the slowdown follows strong gains in 2010, leaving prices near record levels. While domestic economic conditions remain relatively solid, some potential buyers have been sidelined by deteriorating housing affordability and a more uncertain global outlook. There is still no end in sight to Japan’s two-decade long property slump, with residential land prices down 3.3 per cent y/y in Q3." January 9, 2012 By Vito Pilieci, The Ottawa Citizen January 6, 2012 Ottawa’s unemployment rate held steady in December, ending three months of increases, according to Statistics Canada. The national statistics watchdog said the creation of 5,400 new jobs in the region helped to keep the unemployment rate at 6.3 per cent during the month. More than 697,800 Ottawa residents were employed during the month, up from 692,400 in November. According to Statistics Canada, 71.6 per cent of 745,000 eligible workers are actively seeking jobs. In November, 71.1 per cent of eligible workers were employed or seeking employment. The jobless rate bottomed out at 5.2 per cent in August. These numbers are adjusted for seasonal influences. Despite the federal government’s austerity plans, public administration added almost 6,000 jobs in December, growing to 116,000 from 110,900 in November. Nationally, the Canadian economy added fewer jobs than expected in December but still managed to bounce back from declines in the previous two months. Statistics Canada said Friday that 17,500 jobs were created last month, even as the unemployment rate edged up to 7.5 per cent from 7.4 per cent in November as more people entered the labour market in search of work, the agency said. The gains follow 54,000 job losses in October and another 18,600 in November. Economists had expected 20,000 jobs to be added in December. “Taking the string of the last few months together, Canada’s job market still looks soft, and a rising unemployment rate has been in contrast with the drop seen stateside, said Avery Shenfeld, chief economist at CIBC World Markets. “We may have less reason to feel smug about Canadian outperformance, at least in terms of the near-term growth trend.” December saw an increase of 43,000 in part-time work, while full-time employment declined by 26,000 positions. Most of those job gains, 3,800, were in the private sector, while public-sector employment fell by 17,300. “Over the past 12 months, employment growth totalled 1.2 per cent (199,000), with nearly all of the gains in the first half of the year,” Statistics Canada said. Ontario gained 15,700 jobs in December, reducing its unemployment rate by 0.2 percentage points to 7.7 per cent. Douglas Porter, deputy chief economist at BMO Capital Markets, said “while far from stellar, the modest job gain is a mild relief after two months of declines.” “The good news was that manufacturing was up 30,000, as the sector had shed almost 80,000 jobs in the prior three months alone. On the weak side, construction and finance and real estate posted double-digit drops,” he said. On Thursday, a survey by the Economic Club of Canada and Pollara Strategic Insights showed 70 per cent of Canadians believe this country is already in another recession, albeit a mild one Michael Marzolini, chairman of Pollara, said the survey unveiled “the most pessimistic findings we’ve had in 16 years.” “Canadians are more self-centred. They believe themselves under siege,” he said in releasing the poll results. Francis Fong, at TD Economics, said Canada’s unemployment rate is expected “to continue treading higher, likely to about 7.7 per cent, while job gains will average a paltry 10,000 per month, more heavily weighted to the second half of the year.” “Government hiring is likely to remain under pressure in the coming months and private sector hiring will likely be tested by further deterioration in Europe’s debt crisis.” January 6, 2012 January 5, 2012  03/01/2012 4:00:00 PM Mortgage Brokers News Housing prices will continue to rise in the short term even as Canada’s resale housing market tightened slightly in November, as sales rose in more than 50 per cent of markets while the number of listings declined, according to the Conference Board of Canada. Sales rose in 16 of the 28 markets the board tracks for its metro resale index, with seven of those markets posing a gain of more than five per cent over October’s number. Year-over-year sales rose in 15 areas, down from October, when 20 of the urban areas posted sales growth over 2010. “The supply of new listings fell in 23 of 28 markets in November, but still exceeded year-earlier levels in 20 jurisdictions,” the board said. “An easing in supply of listings, combined with slightly weaker sales gains, lifted the sales-to-listings ratio in November in 23 markets. This left four areas as ‘sellers’ markets, while 21 remain ‘balanced’.” The drop in listings resulted in higher prices in 17 areas month-over-month, while the year-over-year price was higher in 19 — with 16 markets recording growth of four per cent or more. The Conference Board predicts all but three of the 28 markets it tracks for the index will see some increase in housing prices in the short term — the Ontario cities of Oshawa, London and Windsor being the exceptions. Saskatoon and several Quebec markets — Gatineau, Montreal, Quebec, Sherbrooke, Trois-Rivieres and Saguenay — are expected to see the biggest increases in housing prices in the near term, the board said, predicting a seven per cent year-over-year gain. A five per cent gain appears to be in the cards for Victoria, Vancouver, B.C.’s Fraser Valley, Calgary, Edmonton, Regina, Winnipeg, Halifax and Newfoundland, the board said. It expects housing prices to rise three per cent in Saint John, as well as the Ontario centres of Thunder Bay, Sudbury, Toronto, Hamilton, St. Catharines, Kitchener, Kingston and Ottawa. January 4, 2012 Katherine Scarrow Globe and Mail Update Posted on Friday, December 30, 2011 6:19AM EST As global housing markets coughed and sputtered in 2011, Canada's barrelled ahead, even turning a few nervous heads along the way. In fact, recently the Economist branded Canada one of the nine countries where “home prices are overvalued by about 25 per cent or more,” and among the four where prices are in line with those in the United States "at the peak of its bubble." Is there really a cause for alarm? Are we doomed to ride this white-knuckled rollercoaster in 2012? Probably not, according to Benjamin Tal, deputy chief economist of CIBC. "The housing market of tomorrow will not be as exciting as the housing market of yesterday,” he said in an interview. While the current real estate market is overshooting, with home prices far higher than than they should be, we shouldn't expect a crash either, he explains. As long as interest rates remain relatively low and subprime mortgages kept at bay, the most likely scenario is that the market will plateau. “Prices are already softening, housing starts aren’t in the sky, MLS [multiple listing service] activity is starting to soften, so it suggests the market is already starting to level off, and that’s what we need,” he said. How will a more relaxed real estate market affect new homebuyers, investors and renovators in 2012? Here are Mr. Tal's predictions: 1. First-time home buyers Affordability and interest rates will be the major concerns in 2012. Prices will continue to be expensive, especially in urban centres like Vancouver and Toronto, since interest rates are likely to remain low for the time being. But rates won't stay low forever, which is why you should estimate mortgage payments based on interest rates that are 2 or 3 percentage points higher than current interesst rates, and if you cannot afford that, get a smaller mortgage and buy a less expensive house. Expect an end to bidding wars, or at least a temporary ceasefire. New home buyers will have the luxury of time in terms of looking at properties without being rushed into decisions. That’s the positive. The negative is that prices continue to be drastically higher than they were five or 10 years ago. 2. Investors and flippers If you’re in it to flip it – meaning you buy a home hoping the price will rise by just doing minimal changes – those days are over. In some pockets of the country, you may even see prices go down. 3. Renovators The cost of renovations will not increase significantly so long as interest rates remain at their current level, so it’s a good idea to take advantage of this time to finance these projects. For those looking to take on a second mortgage, remember to make sure you’re equipped to finance them if interest rates creep up. Variable-rate mortgages are still a good option for those who are able to withstand fluctuations in the market and "ride the ups and downs without getting a stomach ache."   January 3, 2012 Time Cestnick From Thursday's Globe and Mail Last updated Wednesday, Dec. 28, 2011 8:27PM EST Once again it’s time for my annual New Year’s resolution. That’s right, a single resolution. This year, I’m getting into shape again. I’m going to start by eating slowly in 2012. It’s not about slowing my metabolism. It’s about my kids. They eat so much that if I slow down my pace of eating, there won’t be anything left by the time I’ve finished my salad. That’ll do it. What about you? If you’re still thinking about your New Year’s resolutions, consider adding tax savings to the list. If you make just one change to your affairs annually to save tax, you’ll do yourself a world of good in a short time. Consider one of these ideas: 1. Create self-employment earnings. Self-employment is still one of the greatest tax shelters available. Why? Deductions. Operating a part-time business from home is all you need to do. This can open the door to deducting a portion of those things you’re paying for anyway, such as mortgage interest, rent, property taxes, home insurance, home repairs, utilities, vehicle repairs, gas, auto insurance, interest on a car loan or lease payments, computer costs and more. 2. Pay family members a salary. If you have self-employment earnings you can move income into the hands of a family member who is in a lower tax bracket by paying wages or a salary for work performed. If you’re an employee, speak to your employer about requiring you to hire your own assistant for your work. Our tax law will allow an employee to deduct salary or wages paid to an assistant provided your employer required you to pay for one. Hiring your spouse or a child who is in a lower tax bracket will keep the money in the family and will save tax dollars. 3. Make your interest deductible. If you’re paying interest costs that are not deductible, and have some cash or investments on hand, consider doing a “debt swap” to create a deduction for your interest. You can do this by taking some of your cash, or selling some investments to create the cash, and using the cash to fully or partially pay down your non-deductible debt. You can then re-borrow to replace those investments or that cash. As long as the new debt is used for an income-producing purpose you should be entitled to deduct your interest costs. 4. Extract cash from your company tax-free. If you own a corporation, consider paying yourself capital dividends, repaying shareholder loans owing to you, and returning “paid up capital” to yourself to access the cash in your company tax-effectively. Also, consider claiming a refund of “refundable dividend tax on hand” (RDTOH) by paying yourself taxable dividends. All of this may sound like a foreign language, but a visit to a tax pro, perhaps your friendly chartered accountant, will help. 5. Consider a leave of absence or sabbatical. You can defer tax by setting aside some money in a deferred salary leave plan (DSLP). You can then take a leave of absence or sabbatical in a later year and collect your deferred salary at that time. Speak to your employer about setting up a DSLP. A DSLP must be in writing and meet certain criteria, such as: No more than one-third of your salary can be set aside for the leave, your leave must be at least six consecutive months, the leave must begin no later than six years after the salary deferral begins, and following the leave you must return to work for a period at least as long as the leave. There are other details that must be looked after as well, so your employer will need to seek advice on this. 6. Create pension income for the credit. If you have eligible pension income you’ll be entitled to claim the pension tax credit. If you and your spouse each claim the credit, this could fully or partially shelter the tax on $4,000 ($2,000 each) of pension income. It’s not going to make you wealthy, but it’s all part of building up tax savings year after year. You can create eligible pension income by, for example, converting part of your registered retirement savings plan to a registered retirement income fund to create $2,000 of RRIF income annually. You can also provide your spouse with eligible pension income by reporting up to half of certain pension income in his or her hands. December 29, 2011 Jeremy Torobin  OTTAWA— From Monday's Globe and Mail Last updated Monday, Dec. 26, 2011 6:48PM EST For debt-addled Canadians across the country, 2012 will be a crucial test of whether they can rein in their borrowing in another year of super-low interest rates. After Boxing Week caps off a holiday spending spree that by many measures outstripped the previous year’s, households will be back to the unpleasant reality of an uncertain economic climate, stagnant wages and the risk that global threats like the European crisis cause job losses at home. But experts say spending money helps people calm their nerves, even when they’re nervous about their financial burdens, so there’s no guarantee Canadians will hunker down, other than those who have literally exhausted their capacity to borrow. That’s why Bank of Canada Governor Mark Carney, who is expected to keep his main interest rate at 1 per cent for at least another year after 15 months at that level, spent this December much as he did in 2009 and 2010: flagging the dangers of taking on debt that will be less manageable when rates rise, and urging households to start living within their means. While he is mainly concerned about the most vulnerable 10 per cent of households, and says debt is not yet a “clear and present danger” to the economy, he still considers it the No. 1 domestic risk. And no wonder: The debt-to-income ratio rose to a record 153 per cent in the third quarter, according to Statistics Canada. That compares with 146 per cent in 2010 and exceeds the level in the U.S. and the U.K., where families are working to rebuild wealth lost to housing crashes. Canada is inching closer to the 160-plus threshold that got the U.S. and the U.K. into so much trouble four years ago. A sudden negative event such as a surge in unemployment, a drop in house prices – which many analysts say are roughly 10 per cent higher than they should be – or rising interest rates could land up to two million Canadian households in trouble. And, regardless, the more people spend on interest payments, the less they have to spend on everything else, crimping the consumer spending that accounts for most of the economy at a time when prospects for exports over the next year or two are shaky. Still, economists point to an encouraging sign: Though debt loads grew in 2011, they did so at the slowest pace in almost a decade. Mortgage debt, the vast majority of all consumer credit, rose at about a 7-per-cent annual pace, down from 12 per cent two years ago, and credit-card debt growth, aside from the usual holiday-shopping season spike, has also moderated. The debt-to-income ratio has risen largely because incomes are gaining at a slower pace than debt loads are. Jeffrey Schwartz, executive director of Consolidated Credit Counselling Services of Canada Inc., said that in the past year, more of the most vulnerable Canadians – people devoting at least 40 per cent of their incomes to debt-servicing costs – have started to regain control by coming to groups such as his for help. The question is whether this vigilance can be sustained, with some economists predicting no change in interest rates until late 2013. “The test will be the next 12 to 24 months, how we behave in the low interest-rate environment and whether we are able to resist the temptation,” said Benjamin Tal, deputy chief economist at CIBC World Markets. “If next year house prices are up 12 per cent, and mortgage activity and credit is up 15 per cent, I will be very concerned. Interest rates will eventually rise, and we would be in a much more vulnerable position than we are now.” Analysts speculate that at some point this year, Finance Minister Jim Flaherty may step into the mortgage market to tighten eligibility requirements for the fourth time in three years. Most, however, see this as unlikely until the European debt crisis stabilizes. Craig Alexander, chief economist at Toronto-Dominion Bank, said that without the mortgage measures already taken, the debt-to-income ratio would have soared past 160 per cent. The latest crack was last winter, when Mr. Flaherty announced that Ottawa would no longer insure mortgages with 35-year amortizations, essentially reducing the limit on insured mortgages to 30 years, and cut the maximum amount Canadians can borrow when refinancing their mortgages to 85 per cent of the value of their homes from 90 per cent. Ottawa also pulled government guarantees on lines of credit secured by homes. Many economists – and Ed Clark, TD’s chief executive officer – say further cutting the maximum length on federally insured mortgages to 25 years would be prudent, and that such a move wouldn’t necessarily hurt the economy or the housing market. For now, though, even as Mr. Carney and Mr. Flaherty emphasize they are closely watching debt growth, they continue to rely on moral suasion to cajole consumers, and banks, into showing restraint. In a Dec. 12 speech, Mr. Carney argued Canada has a limited window to cut its reliance on unsustainable, “debt-fuelled” consumer spending. As investors around the world pour capital into Canada, he warned, too much is being used to fund household borrowing instead of building the economy’s productive capacity, and he urged businesses to boost investment to fill the “noticeable gap” in the economy as households cut back. That sort of long-term thinking is music to the ears of economists like Mr. Alexander, who argue Canadians must do more to shift their behaviour while they still can. While most of the attention has been focused on lower-income households, however, Mr. Alexander noted that Canadians near retirement have also piled up debt. “Whenever interest rates rise, it will be a shock to a lot of people, and I think it’s going to be a national shock, because they’ve been low for so long,” he said. “But that might be a 2013 story or, more important, a 2014 story.” December 28, 2011 Jonathan Chevreau Dec 24, 2011 It’s been a crazy year in the markets, with government profligacy at the fore from the world’s largest economy (the U.S.) to the fragile group of nations embracing the euro. It may seem daunting for average Canadians to cope with but the new year offers a chance to wipe the slate clean and return to financial sanity — at least at the individual level. We have concentrated on wills, insurance, debt, savings and investing. Get your act together on these five fronts and 2012 could turn out to be a positive year, however insane things get politically and economically. Wills A good place to start is your will. Without one, the province decides who gets everything you own, says Toronto-based estate lawyer Barry Fish, co-author of Where There’s An Inheritance. Without a will, there will be no executor who can act immediately upon your death, no guardian for minor children and your kids will take their full inheritance at the age of majority. Cutting costs with a “will kit” can be penny wise but pound foolish. After you die, you won’t be around to explain what you meant. “We review many home made wills that are missing important clauses, are not signed or witnessed properly, and often use imprecise language that can lead to a family war,” Fish says. For example, one do-it-yourselfer’s will said “ I leave all my antiques to my sister and everything else I own is to be equally divided between my brother and my sister.” This language is more ambiguous than it may appear. “A court might have to interpret the validity of your brother’s argument that your expensive lamps from the 1950s are not  really antiques,” Fish points out. Bottom-line is wills are not one-size-fits-all documents. They must be tailored to your own life situation. The needs of single people are markedly different from married couples with children. Insurance Like wills, life insurance is one of those must-haves if you’re married with children, or even just contemplating starting a family. For young people just starting out, basic 10-year term insurance will do the job, says financial planner and chartered life underwriter Paul Philip. “It’s very cheap initially but the downside is it gets very expensive later.” Most policies are guaranteed renewable and convertible so if you’re happy with the price on, say, a $1 million policy, the insurer can’t deny coverage later. You have the right to convert to permanent insurance later in the event your health changes and you become otherwise uninsurable. Permanent insurance provides both an investment and an insurance component and ultimately may provide useful tax and estate planning advantages. Philip, of Toronto-based Financial Wealth Builders Inc., doesn’t focus on property and casualty insurance but suggests homeowners use the same insurance provider for both their car and home insurance. He suggests considering raising deductibles on both policies and using the premiums saved to bump liability insurance from $1-million to $2-million. The additional liability coverage can be set up as an “umbrella” and floats between your home and car, providing you dual duty. “My thing is to get more than one turn from a dollar if it can be done.”  If you’re paying for full replacement of goods on your home policy, you need to document your possessions. An easy way to do it is to shoot a 5-minute walkthrough of your home with the video function of a smartphone or cellphone. Debt  If there’s one thing the experts agree on in this post financial crisis world, it’s the problem of debt, both of individuals and of governments. In Financial Recovery in a Fragile World, tax guru Evelyn Jacks and her co-authors devote the first 25% of the book to detailing how the sovereign debt crisis in Europe, Japan and even the United States is unlikely to leave Canadians unscathed. We may not be able to control macroeconomic risks like inflation, interest rates or stock volatility but we can take steps to get our personal financial house in order. The best defence is to get liquid and eliminate as much debt as possible. In his just-published Crushing Debt, chartered accountant David Trahair lays out the reasons why Canadians should “drop everything and pay off debt.” I couldn’t agree more and believe we shouldn’t even think about retiring while still encumbered by consumer or even mortgage debt. Trahair devotes a chapter to how Canadians can extricate themselves, whether slightly extended on credit cards or so hopelessly mired in debt that insolvency is on the horizon. Simplest is to stop spending and pay off existing debt, renegotating with your creditors and/or consolidating all debts with lower-interest debt like a line of credit. The second way is to pay off at least outstanding principal with the help of a Debt Management Program offered by credit counsellors. Third is a consumer proposal, where you pay off only a portion of principal owing to creditors and the most extreme is outright bankruptcy, a last resort that nevertheless won’t help wipe out your mortgage or car loan. Savings  Once debt is eliminated, the next two steps are saving and investing. Investing is the glamour topic that gets all the media attention but without saving, there can be no investing. Saving is simply a matter of spending less than you earn and directing the surplus into a savings account that removes the temptation to spend it. David Chilton dedicated the entire first half of The Wealthy Barber Returns to raising awareness of the poor savings levels of Canadians and how they must improve. Almost his very first words there are “you’ll have to learn to spend less than you make.” And the magic words that will help you pull that off? “I can’t afford it.” Chilton has always espoused the notion of “Pay Yourself First,” which means setting up a pre-authorized chequing arrangement so that 10% or more of your paycheque automatically is siphoned off into savings (and ultimately investments) before you’re tempted to spend it. This automatic savings approach is also the heart of a series of books by U.S. author David Bach: The Automatic Millionaire. Investing Finally, we come to investing, which we’ve deliberately placed last to emphasize the importance of the other four seemingly more mundane measures. Normally, your first savings will be in interest-bearing vehicles like GICs or savings bonds. With interest rates still near 50-year lows, it’s hard to build wealth for the faraway future this way. By all means, establish an emergency cushion of savings in “safe” liquid vehicles like GICs or money market funds, enough to carry you through six months in the event of job loss. The best place to shelter such a fund is the new Tax Free Savings Accounts or TFSAs, launched by Ottawa in 2009. But don’t be fooled by the “S” in TFSA. Like the RRSP, the TFSA is an excellent place to start investing for the long term by including slightly riskier securities like dividend-paying stocks or investment funds that will ultimately give you more growth and protection against future inflation. As of January 2012, you can contribute another $5,000 to a TFSA (and your spouse can too), bringing the total to $20,000 per person, or $40,000 for a couple. BMO Retirement Institute head Tina Di Vito says if you can’t come up with a lump-sum to invest today, consider making monthly contributions. “You’ll be surprised how quickly and painlessly you can accumulate a substantial amount of money. You’ll also benefit from dollar cost averaging by buying into the market during both the ups and downs rather than trying to time the market.” TFSAs are ideal for young people in low tax brackets and also for low-income seniors who don’t want to see their GIS benefits clawed back. The vast majority between these extremes will want to invest in both TFSAs and RRSPs, particularly RRSPs if they’re in the top tax brackets. That’s because RRSPs cut your taxable income and should create a tax refund come April. TFSAs don’t but one day in the far future when you’re retired, you’ll love the tax-free income TFSAs will generate. So next time a friend asks about your finances, you can reply “We’re not out of the woods yet, but we’re well on our way.” December 24, 2011 Julian Beltrame The Canadian Press   OTTAWA—Canada’s annual inflation rate remained relatively strong at 2.9 per cent last month as Canadians continued to pay considerably more for food and gasoline than they had 12 months earlier. Statistics Canada said food rose sharply by 4.8 per cent in November from last year, as consumers saw double-digit increases for such basics as fresh vegetables and bread, while meat rose a healthy 6.2 per cent. The monthly overall gain in food was the highest recorded since July 2009, the agency said. Meanwhile, gasoline also continued to be a key driver of annual inflation, rising 13.5 per cent in November from 12 months earlier. Gasoline price inflation is on a downward track after peaking in May at close to 30 per cent. On a month-to-month basis, Canadians actually paid 2.3 per cent less for gas in last month than they did in October. The continuing high cost of gasoline helped push the transportation component up 5.7 per cent, although that was less than the 6.7 per cent gain recorded in October. Overall, Statistics Canada said that prices rose in all eight major components it tracks and in every province in Canada, with the highest rate — 4.1 per cent — recorded in Newfoundland and Labrador. Still, the Bank of Canada has repeatedly stressed that it is not worried about inflation even though it has remained above the bank’s two per cent target for more than a year. The bank’s core inflation index, which tracks underlying price pressures by excluding volatile items such as energy and some foods, was also north of target at 2.1 per cent in November. But in its most recent report on the state of the economy, the central bank said it expects overall inflation to decline to one per cent by mid-2012 as gas continues to decline. There’s little in November’s report that will likely to detract from that sentiment. Aside from food and energy, most price increases in November were tame. Shelter costs rose 1.5 per cent, although fuel oil, which is related to the energy component, was still 24.4 per cent higher than 12 months ago. Consumers also paid 4.4 per cent more for car insurance. However, home mortgage and interest costs fell 1.1 per cent, natural gas declined 2.7 per cent, video equipment dropped 12.4 per cent, women’s clothing slimmed by 2.1 per cent and furniture cost 2.1 per cent less. On a month-to-month basis, inflation was a tepid 0.1 per cent in November from October, the agency said. December 20, 2011 Preet Banergee  Last updated Tuesday, Dec. 20, 2011 9:39AM EST   We often hear about the income gap. But what about the debt gap? Some people have no debt and some people have debt up to their eyeballs. It has nothing to do with numeracy (how good one is with numbers). After preparing many financial plans, I can tell you that this phenomenon cuts across net worth. It doesn't matter much if someone earns $40,000 or $400,000, some people have a tendency to use too much credit. Stephan Meier and Charles Sprenger's study, Present-Biased Preferences and Credit Card Borrowing, finds that people who are present-biased (desire immediate consumption) have significantly higher amounts of credit-card debt. The study controls for income and other social factors, not to mention the well-documented evidence that people tend to under-report their total debt levels. Their research cited an average of $3,027 in non-mortgage debt a person, but when you look only at people who carry balances on their credit cards this number almost doubles to $5,799. Someone who wants the latest iPhone the day it’s released is obviously more likely to borrow money to finance the purchase. And they may not place an equal importance on future ramifications. With the holidays stepping into high gear, many people break their spending rules with the simple justification, “It's Christmas!” or whatever holiday they celebrate. This is a similar line of thinking as “You only live once!” Those four words are usually uttered moments before doing something you know is stupid. Suspending the requirement to balance your cheque book occurs for other occasions as well. A promotion at work, a new job, getting married. The list is endless, with some offences clearly worse than others. But the point is that these once-in-a-while splurges are justified with emotions, not math. This is exactly the present bias described in the study. If you happen to be one of those people who lives and spends in the moment, you have to learn how to handle your bias. Think back over the course of the year and figure out how much “extra” money you spent on indulgent expenses. Add it up and divide by 12. This is your new monthly savings amount. Set it up with your bank to withdraw it automatically every month. This new (somewhat draconian) plan will mean that for the next year not only will you have a cash-flow drain from the automatic savings, you will still have to pay off the debts from last year (and who knows how many previous years carried forward). But welcome to the real world where past choices catch up with you. You can choose to fix it now, and that might mean delayed gratification for a year or two, or you can roll the dice and see what happens when interest rates start to rise. Earning interest is better than being charged interest, and in the long run it means you can actually buy more. Because it's true. You only live once. So don't screw it up. Some things to consider: Canadian debt levels have swollen faster than our waistlines will over the holidays. Come January, consider building a debt plan to go with your new workout routine. Number of credit cards in circulation in 1977: 8.2 million Number of credit cards in circulation in 2010: 70.3 million Total sales and cash advances on credit cards in 1977: $4.04-billion Total sales and cash advances on credit cards in 2010: $308.98-billion Source: Canadian Bankers Association From a survey of 1,000 Canadian homeowners with household income over $50,000: 56% do not, or do not intend to, have a debt-repayment plan with an ultimate pay-off date 65% did not shop for better interest rates on their mortgage through different providers 55% do not plan to work with an adviser to get advice on debt management 43% do not plan to consolidate credit into a single low-interest rate December 20, 2011 By Michael Oliveira, The Canadian Press TORONTO - Most Canadians still aren't pulling out their phones to check their bank account balances and pay bills but experts and users alike expect a whole lot more will be doing so in 2012. "We definitely see there's been humongous growth on the banking front on the phone platform," says Bryan Segal, vice-president of the digital measurement firm comScore. Canadians are among the world's leaders when it comes to embracing online and mobile banking, according to comScore. Last year, Canada ranked as the top country for online banking usage, with almost 65 per cent of our Internet users going on the web each month to check their accounts. More recently, comScore estimated there were about 13.3 million Canadians regularly doing online banking, compared to 63.6 million in the U.S. On a per capita basis, our online banking customer base is about twice as large as south of the border. Now that online banking has become familiar and comfortable for plugged-in Canadians, mobile is expected to grow. Segal says about 13 per cent of Canada's mobile users now access their banking on their phone on a monthly basis, which is roughly on par with the U.S. market and ahead of the European Union. Given that comScore recently pegged the Canadian mobile market at 20.1 million customers strong, that suggests we're nearing three million Canadians using mobile banking. "About 22 per cent of those people actually access their bank accounts on a daily basis," Segal adds, "for 36 per cent it's at least once a week, and for 41 per cent it's once to three times throughout the month." In March, 77.5 per cent of Canadian mobile banking users were on a smartphone, with most using an iPhone. TD Bank (TSX:TD.TO - News) and RBC (TSX:RY.TO - News) had the biggest chunk of the market, with 26.7 per cent and 25.7 per cent of mobile banking users, followed by CIBC (TSX:CM.TO - News) with 17 per cent, Scotiabank (TSX:BNS.TO - News) with 13.2 per cent and ING Direct with 9.8 per cent. ING conducted a survey in October to gauge interest in mobile banking and found about half of Canada's smartphone users expect to use their phone to check their account in the next year or two. Of those in the 18 to 34 age bracket, 64 per cent saw themselves using mobile banking. ING said it handled over 200,000 fund transfers and one million balance inquiries on its mobile platform in the previous 18 months. According to a survey by the Canadian Wireless Telecommunications Association, the biggest reason users are avoiding mobile banking is security. About 52 per cent said they had security-related concerns, while 24 per cent said they simply found online banking easier than mobile banking. December 16, 2011 Helen Morris, Nest Egg As temperatures head down to their seasonal norm, we’re turning up the heat at home. That means higher bills, but having an energy-efficient home can keep heating costs under control. EnerQuality designs and operates five “green” building standards for the construction industry in Ontario. “These focus on the design and construction of the home,” says EnerQuality president Corey McBurney. “[We are concerned with] building a better home that requires less energy to perform and performs better. In practice, Energy Star for New Homes, which concerns itself exclusively with energy consumption, is by far the most popular [green home category]. We label over one in five new homes a year in Ontario and of those, 95% are Energy Star.”  Mortgage insurers Genworth and the Canada Mortgage and Housing Corporation (CMHC) offer incentives to borrowers who buy energy-efficient homes but who have less than a 25% down payment. “A client that purchases a new-construction home that is EnerGuide rated 80 or above or an Energy Star home in Ontario, may receive a rebate of 10% of the [mortgage insurance] premium excluding taxes,” says Jason Neziol, vice-president of regional sales in Ontario for Genworth Financial Canada. “If they decide to take a 30-year amortization instead of a 25-year, the client would typically pay 20 extra basis points,” Mr. Neziol says. “We will rebate that full amount to the [qualified] client when the house closes. If a client takes a $300,000 mortgage at 5% down and a 30-year amortization … they would receive $1,425 back.” The benefits are also available to high-ratio borrowers who improve the energy efficiency of an existing home. “The client can purchase a home and do renovations to increase its energy efficiency,” Mr. Neziol says. “They have to move the EnerGuide rating five points to a minimum of 40.” With just 20% of new homes in Ontario attracting a green rating, energy-efficiency credentials are not, evidently, at the top of all buyers’ lists. “A lot of people look at what they can do that won’t cost a lot of money and afford a quick pay-back,’” says Gary Siegle, regional manager of Invis, Alberta South and Saskatchewan. “The green mortgage rebate is a sweetener to get you there, but it is not a quick payback” on the full cost of the renovations. Beginning Jan. 1, Ontario will have one of the most rigorous building codes in North America: “With Energy Star, we are taking an already fairly high baseline and making it that much more efficient,” Mr. McBurney says. “Usually about 25% more efficient.” Green-certified buildings that meet a higher standard and provide longer-term savings attract consumers, Mr. McBurney says, but acknowledges that North American’s relatively low energy costs make it less of a priority for some. “The reality is I pay more to operate my BlackBerry on a monthly basis than I do to heat my home in the middle of winter,” he says. “As long as energy prices in Canada remain as low as they are, people are likely to continue on with their busy lives rather than  make energy efficiency in their homes a priority.” December 15, 2011 The credit burden of Canadian consumers is climbing as they take on more debt amid stagnating incomes. The ratio of debt to personal disposable income, the key measure of where a consumer stands, hit 152.98 per cent in the third quarter from 150.57 per cent in the prior quarter, Statistics Canada said Tuesday. It’s the third quarter in a row that debt has increased. The report comes a day after Bank of Canada Governor Mark Carney reiterated that household debt is the No. 1 domestic risk in the country, as debt burdens have surpassed levels of both the United States and the United Kingdom. “Credit growth continues to outpace the growth of disposable income, while the continued financial market turmoil has weighed on the asset side of the balance sheet,” noted David Onyett-Jeffries, economist at Royal Bank of Canada. About 10 per cent of Canadian households are vulnerable to an adverse economic shock according to central bank estimates, meaning they could face trouble once interest rates start to rise. Mortgage credit rose to $1-trillion in the quarter and other consumer debt to $448-billion, the statistics agency said. Household net worth in the quarter fell by 2.1 per cent, marking the second straight decline, as stock values more than offset the gains in house prices. Per capita household net worth tumbled to $180,100 in the quarter from $184,700 in the second quarter, the agency said. “This marked the sharpest quarterly reduction in stock prices and per capita household net worth since the fourth quarter of 2008.” December 13, 2011 Christine Dobby, Financial Post · Dec. 8, 2011 With the eurozone on the precipice of collapse, the United States grappling with its own debt issues and even China slowing down, what does 2012 hold for the global and Canadian economies?  CIBC World Markets Inc. released a handful of economic forecasts Thursday. Here are five key developments to look for in the year to come:  A hurdle for Canada’s unstoppable real estate market?  Benjamin Tal, CIBC’s deputy chief economist, said data on household debt and the health of the residential real estate market suggests a levelling off in prices in the next year or two with a more dramatic drop down the road.  “Further out, the most likely scenario is that the eventual increase in interest rates will lead to a modest decline in prices, probably in the magnitude of 10% to 15%,” he said.  But Mr. Tal said absent a trigger like the sub-prime mortgage crisis that triggered the recent U.S. housing market meltdown, a violent market correction is likely not in the cards for Canada.  Sluggish global growth in 2012 and not much to look forward to  “Excepting Europe, we’re not destined for recession, but global growth will barely top 3% next year, and 2013 won’t be a whole lot better, well below the bounteous 5% pre-recession pace,” said Avery Shenfeld, chief economist at CIBC.  The United States could defer its first round of budget tightening by extending tax measures for another year, he said, noting that if it does, “it will be feeling an even tougher fiscal squeeze in 2013.”  Meanwhile, Europe may have clawed its way back up somewhat by 2013 but growth there is still likely to be “lacklustre,” Mr. Shenfeld said.  The dark side of austerity measures  Apart from the pain felt by pension-holders, taxpayers and other stakeholders, harsh austerity measures being implemented across Europe may not be a silver bullet for return to growth.  “The myth that shrinking government brings an automatic offsetting boost to private sector spending is simply that — a myth,” Mr. Shenfeld said.  “The countries in Europe that have been first to tackle budget deficits through tax hikes or spending cuts have paid the price in growth.”  2011 GDP growth in countries that have tightened their belts already, including the United Kingdom, Spain, Greece, Ireland and Portugal, hovers at around 0.7% while other European Union nations had GDP growth closer to 2%.  “What helped Canada survive fiscal tightening in the 1990s — an ultra-cheap currency, strong growth outside our borders and falling bond yields — isn’t on the menu for Europe or the U.S. in 2012,” Mr. Shenfeld said.  Canadian growth stuck at 2%  Mr. Shenfeld predicted a pace of growth of about 2% over the next two years for Canada, which, as an open economy, can’t avoid the effects of a global economy on pause.  “Domestic fundamentals should guard against recession risks, but we will need a big lift from interest-sensitive domestic spending to keep the economy growing at even a 2% pace through 2013,” he said.  Although home building in Canada survived the recession, business construction and equipment spending will be in the spotlight over the next several years, Mr. Shenfeld said.  “Spending in energy, aluminum smelting, shipbuilding facilities and other private sector megaprojects will provide at least some antidote to the retreat underway in public sector capital spending as the recession’s stimulus is wound down,” he said.  He predicted exports would suffer, feeling the pinch from global economic slowing, but oil patch prices should hold up enough to facilitate ongoing capital spending in that sector.  The loonie takes a dive?  With weak global growth expected to continue to drive sentiment Mr. Shenfeld predicted the resource-linked Canadian dollar “has room to slide further in the coming months, until the crisis fires in Europe are quenched.”  He forecast the loonie dipping to US$0.92 before the currency regains support on diminishing fears of global crisis.  At noon on Thursday the Canadian dollar stood at US$0.9813. December 9, 2011 OTTAWA — Housing starts in the capital plunged in November as builders scaled back from the frenzied pace they had set over the past two years, according to Canada Mortgage and Housing Corp. The housing market watcher said the number of homes started in Ottawa in November fell to 553, a 40.4-per-cent drop from the 928 starts recorded in November 2010. CMHC had been warning that builders would begin scaling back in late 2011 as consumer confidence slumps and demand for new homes begins to taper. Despite the drop in overall home starts, single family homes remained in demand. “Builders have responded to the recent surge in demand at sales offices by breaking ground on 289 new single-detached homes. This way singles posted the best month in two years and surpassed all other dwellings combined,” said Sandra Pérez Torres, senior market analyst at CMHC. However, the pace of construction for high-density multiple dwelling units, including condominiums, dropped off in November. High-density units have been responsible for much of the growth in Ottawa’s housing sector in 2011 because they are particularly attractive to first-time buyers and baby boomers. Construction on multiple family dwelling units dropped to 264 units, a 60-per-cent decline compared to the 660 started during the same month last year. Overall the pace of construction in Ottawa in 2011 is lagging about 11.4 per cent behind 2010, according to CMHC. Builders have started construction on 5,231 homes during the first 11 months of 2011. During the same time frame in 2010, builders began construction on 5,904 homes. Nationally, the trend was similar. Canadian housing starts fell in November as construction of multiple-unit buildings declined. The seasonally adjusted annual rate of starts was 181,100 units last month, down from 208,800 units in October. Economists had expected activity to ease to 200,000 unit in November. “Housing starts declined in November, reaching a level which is more consistent with the rate of household formation,” said Mathieu Laberge, CMHC’s deputy chief economist. “The decrease in housing starts was due to a moderation in the multiples segment.” The seasonally adjusted annual rate of urban construction fell 14.4 per cent to 158,900 units in November, CMHC said. Single-unit activity rose 3.5 per cent to 63,600 units, while multiple-unit starts dropped 23.3 per cent to 95,300 units. Urban housing starts were down 30.6 per cent in Ontario, 13.4 per cent in the Prairies and 3.6 per cent in British Columbia, the federal housing agency said. However, urban starts were up 8.3 per cent in Atlantic Canada and 3.2 per cent in Quebec. Rural starts, on a seasonally adjusted annual basis, totalled 22,200 units in November, down from 23,100 units the previous month. In a separate report Thursday, Statistics Canada said new home prices rose 0.2 per cent in October, following a similar increase the previous month. The major contributors to the October increase were the metropolitan regions of Toronto and Oshawa, and Edmonton, while the biggest declines were in Victoria and Saskatoon. December 8, 2011 Christine Dobby  Nov 30, 2011 – 7:06 PM ET The Canadian economy was not as bad as first feared in the third quarter. In fact, it was much better than almost anyone had hoped. Fuelled by record monthly output from the oil-and-gas and mining sectors and overall export strength as temporary headwinds drifted away, third-quarter economic growth shot past expectations. Statistics Canada said Wednesday that gross domestic product for the period rose by an annualized 3.5%, beating economists’ more moderate average prediction of 3.0% growth and the Bank of Canada’s forecast of 2.0%. In September alone, the economy grew 0.2% from August, falling just short of a 0.3% increase economists predicted.   The growth during the quarter comes as a welcome change after a revised 0.5% contraction in the second quarter. Net exports staged a decided recovery as external pressures like the fallout from the Japanese natural disasters in March were no longer a factor. But the devil is in the details as flagging domestic demand and weak business investment lurked beneath the report’s strong headline growth. A close look at the data has economists forecasting only modest growth — in the range of about 2% — in the coming quarters and predicting the Bank of Canada will remain on hold with interest rate hikes. Here’s what stood out from Wednesday’s report: EXPORTS The driving force behind the uptick in GDP for the quarter, exports grew at an annualized rate of 14.4%, up from a pullback of 6.4% in the previous quarter. Paul Ferley, assistant chief economist at Royal Bank of Canada, said that factors that weighed on Canadian exports in the second quarter — including the Japanese supply-chain disruptions as well as wildfires in Northern Alberta that led to shutdowns of oil sand production facilities — were resolved in Q3 and contributed to the increase. But, he cautioned, “The boost to third-quarter growth provided by the reversal of these factors is not expected to continue to the same extent into the fourth quarter.” As the global economy stalls and prospects for a quick turnaround look increasingly grim, economists predict it will could spoil the Canadian export party. HOUSING Canada’s unstoppable real estate market was another bright spot during the quarter. Residential construction shot up 10.9% annualized, following on comparatively modest increases of 1.6% in Q2 and 6.7% in Q1. “After quarters of booming housing starts data, the residential construction bonanza finally translated into the GDP numbers,” said Emanuella Enenajor, economist at CIBC Economics. The expansion in this sector came from all three major components including fees and transfer costs related to resale transactions, new housing construction and renovation activity. “Continued strength in new-home sales has elicited more and more new housing construction, particularly in the high-rise condo market,” said David Madani, Canada economist for Capital Economics. He noted that a reported increase in housing starts bodes well for further strong growth in this category next quarter. CONSUMER SPENDING Canadians slowed their spending on goods and services during the quarter, raising red flags for economists concerned about sluggish domestic demand. Personal expenditures grew at an annualized rate of 1.2%, down from an expansion of 2.1% in the previous quarter. “A slowing pace of income growth owing to tepid hiring and weaker wage dynamics will likely continue to put downward pressure on consumption activity,” Ms. Enenajor said. BUSINESS INVESTMENT Business investment actually contracted during the quarter with a decrease of 3.6% annualized, down from last quarter’s 14.6% increase. “Weak business investment is a worry, as it has been an important source of growth since early 2010 and replaced personal spending as the main source of domestic growth,” said Charles St. Arnaud, an analyst with Nomura Global Economics. He noted that this, coupled with the fact that personal spending is likely to remain weak, “Could mean that domestic demand stays weak over the next few quarters, as global uncertainty remains high.” FINAL DOMESTIC DEMAND The combined slowdown in consumer spending and business investment was a drag on final domestic demand, which rose only 0.9% in the third quarter, down from a 3.1% gain in Q2. The other component, government expenditures, was flat in the quarter as government stimulus spending continues to slow to a trickle. “Note that the pace of final domestic demand has been consistently slowing since 2010, weakening from around 6% to its current sub-1% pace,” Ms. Enenajor said. December 8, 2011 Published on December 6, 2011 Canada's robust housing market is expected to continue into 2012 despite economic concerns from outside its borders, according to a new report from the Re/Max real-estate sales organization. The real estate organization said in its housing outlook Tuesday that the market A "defied logic" and outperformed expectations in 2011. "The trend is expected to carry forward into 2012 as Canadians continue to demonstrate their faith in homeownership, despite concerns over the European debt crisis and its impact on the global economy," the firm added. Home prices are expected to have risen in 23 of the 26 local markets that it tracks with about 460,000 homes expected to change hands this year. That's up three per cent from the 447,010 units reported in 2010. "Instead of responding to economic concerns both here and abroad with a retreat in sales and prices, residential real estate markets actually experienced an upswing in the volatile third and final quarters," said Michael Polzler, executive vice president, Re/Max Ontario-Atlantic Canada. "While clearly not impervious to the impact, Canadian consumers are intent on making their moves now, in advance of higher housing values and rising interest rates down the road." The forecast comes at a time when central banks in Canada and the United States are keeping their key lending rates low to counter the economic drag caused by the European debt crisis. The assurance of relatively low borrowing costs has probably given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike, although they have also been monitoring the darkening economic clouds. Re/Max expects that sales and prices will continue to grow next year, but at a more moderate pace, with sales rising about one per cent over this year to 464,500 units in 2012. It expects Calgary, Saskatoon and Halifax-Dartmouth will likely lead the country in unit sales in 2011, with the volume increasing by five per cent. The Greater Toronto Area, St. John's, N.L., Saint John, N.B., Moncton and Regina are expected also see more sales next year, about three per cent above 2011. Consistent with other data, Re/Max said the Canadian housing market picked up steam as the year went on _ helped by low interest rates and rising prices. Many economists had expected the Bank of Canada would begin raising its key interest rate by the middle of 2011 but that didn't happen. The central bank has kept interest rates low to stimulate the economy by making it less costly for businesses and consumers to borrow for their purchases. That has also kept buyers competing for homes, sending the average home price up seven per cent this year to $363,000 this year, according to Re/Max's predictions. By year-end 2012, it expects the average price in Canada will increase another two per cent to $371,000. "The economic underpinnings support ongoing demand, particularly as job creation efforts continue and unemployment rates edge down further," says Elton Ash, regional executive vice president, for Re/Max in Western Canada. "Nationally, we remain on an upward track, and the confidence consumers have demonstrated in housing over the past decade will prove well founded once again next year," he said. "Overall, we're seeing an extension of the homeownership cycle, and it's great news for housing." The Canadian Real Estate Association upwardly revised its housing forecast for 2011 and 2012 in November. The industry association is now projecting sales this year will be up 1.4 per cent from 2010, half a percentage point better than the previous forecast. CREA expects there will be slightly fewer units sold next year than in 2011, but the 0.5 per cent decline is an upward revision. The association is now forecasting 453,300 home sales countrywide this year, up from 446,915 in 2010. The forecast for 2012 is 451,200 homes sold. December 6, 2011 The Bank of Canada kept its overnight interest rate at 1% on Tuesday, predicting that Europe’s recession would be “more pronounced” than previously thought but giving no suggestion of an impending rate cut. “Conditions in global financial markets have deteriorated as the sovereign debt crisis in Europe has deepened,” the central bank said in announcing it was keeping its key interest rate on hold for the “medium term.” “Additional measures will be required to contain the European crisis. The recession in Europe in now expected to be more pronounced than the bank anticipated in October.” Last month, Bank of Canada governor Carney told a Montreal business audience that the central bank sets monetary policy “in the real world, where shocks are a fact of life.” Those shocks have continued as European leaders struggle to tame the region’s debt crisis, which began in smaller economies – such as Greece, Spain and Ireland – and now threatens to spread to stalwarts Germany and France, unthinkable only a few months ago. On Monday, the leaders of Germany and France agreed to a plan to tighten fiscal policy among the 17 nations that share the euro currency. Those proposals will be presented to the European Union at a summit Friday in Brussels. On the same day, however, rating agency Standard & Poor’s threatened to downgrade domestic ratings across most of the eurozone. That was met with a blunt response from German Economy Minister Philipp Roesler, who said his country “will not be influenced by . . . the short-lived verdict of one rating agency.” Meanwhile in Canada, gross domestic product grew by 0.9% between July and September, or 3.5% on annualize rate. The third-quarter jump followed a 0.5% contraction in the second quarter. The central bank says growth in the second half of 2011 “is slightly stronger than the bank projected in October.” “Household expenditures have more momentum than had been expected and business investment remains solid.” While third-quarter GDP was better than expected, Canada’s employment picture remains cloudy. The country lost 18,600 jobs in November and the unemployment rate edged up to 7.4% from 7.3%. The Bank of Canada’s key interest rate has been at 1% since September 2010, with policy-makers attempting to avoid another recession by encouraging spending by businesses and consumers. “With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary stimulus in Canada,” the bank said in its Tuesday statement. Canada’s annual rate of inflation eased to 2.9% in October from 3.2% the previous month. Still, that marked the 11th straight month that the overall consumer price index was above 2%, the Bank of Canada’s target within a range of one to 3%. The core inflation rate, which factors out volatile items including some food and energy products, now stands at 2.1%, down from 2.2% in September. “Although total CPI inflation has been slightly higher than projected, the bank continues to expect the inflation rate to decline as a result of reduced pressures from food and energy prices and ongoing excess supply in the economy,” the Bank of Canada said Tuesday. However, the bank said it would “continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2% inflation target over the medium term.” The Bank of Canada’s next interest rate decision will be announced Jan. 17, followed the next day by an updated outlook for the economy and inflation. December 6, 2011 Patience is a virtue – one that benefits your personal finances, researchers have found. A new study shows impatient people have lower credit scores. Economists, working at the U.S. Federal Reserve’s Center for Behavioral Economics and Decisionmaking at the time of the research, recruited 437 low-to-moderate income participants to examine the psychological factors that explain why people default on their mortgages. The participants were asked to fill out a questionnaire, in which they were required to make choices between smaller immediate rewards or bigger rewards later. They also gave researchers access to their credit scores. Impatient participants, those who chose the immediate rewards, had poorer credit scores. “Conceptually, it does make sense that how people discount the future, i.e. how impatient they are, affects their decision to default on their loans,” researcher Stephan Meier, who is now at Columbia University, said in a press release. “Individuals accumulate debt and then have to decide whether to repay the money or use the money for something else?” He noted that while people don’t always default on a loan deliberately, some may resort to “strategic defaulting,” making decisions based on having more money now and face the consequences later. Patience is a quality embraced by some of the world’s most financially savvy. December 5, 2011 After years of whipping out their credit cards and tapping into lines of credit, there is further evidence that Canadians are thinking twice before taking on more consumer debt. A quarterly analysis from credit bureau TransUnion showed that the average Canadian’s non-mortgage debt was $25,594 in the third quarter of 2011. That is down $9 from $25,603 in the previous quarter but $431 higher than $25,163 a year ago. While the quarterly drop might not sound impressive, it marks the third-consecutive quarter that debt loads have either declined or remained about the same following 26-straight quarterly increases. TransUnion’s report pointed to a deceleration in total debt increases, which basically means Canadians are taking on more debt at a slower pace. Thomas Higgins, TransUnion’s vice-president of analytics and decision services, said the latest data suggests “Canadian debt loads are stabilizing.” He attributed the slowdown to global economic uncertainty. “In the third quarter alone, Canadian consumers witnessed major stock market declines, the European debt crisis and continued high unemployment,” Mr. Higgins said. The latest TransUnion report comes on the heels of new analysis from Canada Mortgage and Housing Corp. that shows the rate at which Canadians are racking up new mortgage debt has also slowed. Policy makers like Bank of Canada Governor Mark Carney have been warning Canadians about excessive debt loads and their ability to repay the money they owe once interest rates rise from their current lows. The average Canadian household has debt that is 150 per cent of income, and mortgage debt accounts for the largest chunk of credit that Canadian consumers hold. Outside of mortgages, Canadian household debt levels have surged as consumers rely more on their credit cards and lines of credit. Lines of credit, which have lower rates than credit cards, now account for more than 40 per cent of all Canadian non-mortgage debt, TransUnion said. TransUnion's data showed that average Canadian credit card debt fell 2.65 per cent from a year ago but rose 0.59 per cent on a quarterly basis as the holiday season approaches. But Canadian lines of credit debt rose 4.5 per cent from a year ago and 0.79 per cent on a quarterly basis. While debt delinquencies have remained relatively stable, both increased unemployment rates and the upcoming holiday shopping season may weigh in over the upcoming months, TransUnion noted. December 2, 2011 For an explanation, Canadians can look to the European sovereign-debt crisis, according to the latest Housing Trends and Affordability report by RBC Economics.   The report found the average housing cost of a standard two-storey home was 48.8% of the median pre-tax income, down 0.6% from the previous quarter. “It appears that developments related to the (debt) crisis likely provided some benefits in the form of lower interest rates,” said the report, authored by chief economist Craig Wright and senior economist Robert Hogue.   The authors noted fixed mortgage rates on a five-year, posted basis eased 5.3% in the third quarter from an average of 5.6% in the second quarter.   “This ran counter to expectations of generally rising interest rates just prior to this summer’s latest bout of global anxiety,” said Wright and Hogue. Vancouver, which has the worst affordability of any Canadian city, saw the cost of owning a two-storey home drop to 94.4% in the third quarter, down 0.8% from the previous quarter.   The most affordable option in a major city nationally was a condo in Edmonton, with the ownership cost at 20.9% of median income in the city, and down 0.3% in affordability. Only one city remained more affordable than the average since the index began measuring the Canadian market in 1985 – Calgary.   Detached bungalows in Calgary were at 37.6% of income this past quarter, compared to the city’s average of 40.2; standard two-storey homes were at 38.2% compared to the average of 40.8%; and standard condominiums were at 38.2% last quarter compared to a 40.8% average for the city.   The RBC report noted a 3.7% increase in jobs in Calgary this year was creating momentum in the market, and may eventually decrease some of the affordability. The most affordable region remained Atlantic Canada.   “Faithful to its reputation, Atlantic Canada’s housing market continues to show everything in moderation,” said Hogue. “When considering the prospects of owning a home, households in the region continued to face some of the lowest homeownership costs in Canada. In short, housing on the east coast is affordable.” December 2, 2011 OTTAWA — Canadian homeowners are doing a good job of paying off their mortgages early, according to the Canada Mortgage and Housing Corp., which released its third-quarter results Tuesday. While mortgage repayments can be spread out over 30 years, the CMHC reports that the average amortization period for mortgages insured by the national housing agency is under 25 years, and the loan-to-value ratio of those homes was 80% or less. As of Sept. 30, the outstanding loan amount per household for all homeowner loans was $159,740, slightly above the figure for the previous year. “CMHC analysis shows that a substantial percentage of CMHC-insured high ratio borrowers are ahead of their scheduled amortization,” the agency said in its report. “Accelerated payments shorten the overall amortization period, reduce interest costs, increase equity in the home at a faster rate and lower risk over time.”  The agency says its mortgage arrears rate is 0.42%, in line with industry trends. Rules brought in by the federal government in March, in response to historic levels of household debt, which reduced amortization periods on certain mortgages, and limited the amount that can be borrowed when a house is refinanced, cut refinancing activity by 31% from last year, the CMHC said. The agency’s homeowner purchase mortgage insurance showed a year-over-year decrease of 12%. “The level of household debt remains a concern but there are encouraging signals,” it says. “There has been a significant deceleration in the growth of mortgage credit since March, particularly in recent months, impacting the growth rate of total household credit. Growth in personal loans, lines of credit and credit cards has levelled off in recent months.” The agency notes general economic conditions have been favourable in 2011, with stable mortgage rates, a healthy housing market and a declining unemployment rate. “Overall arrears levels and arrears rates have been improving and (mortgage insurance) claims volumes have been lower than expected,” it said. “Given current economic forecasts, it is expected that trends will improve moderately going forward, although both downside and upside risks remain.” While housing sales have slowed since January, the CMHC expects sales for the year to fall within a range of 423,600 to 470,100 units, and next year’s sales to be somewhere between 406,100 and 509,000 units. Prices should “modestly grow as market conditions are expected to remain in the balanced market range,” it said. The agency notes it keeps an eye out for bubbles, but so far it sees “little evidence of over-valuation” in the Canadian housing market. November 29, 2011 Tara Perkins Globe and Mail Update Last updated Tuesday, Nov. 29, 2011 12:15PM EST The rate at which Canadians have been racking up new mortgage debt has slowed in recent months, lending credence to the theory that the country’s housing market will hold up, Canada Mortgage and Housing Corp. suggests. The crown corporation released its third-quarter financial results Tuesday, offering a new glimpse into the country’s mortgage market. “The level of household debt remains a concern but there are encouraging signals,” it said. The growth of mortgage debt has significantly decelerated since March, particularly in recent months, it said. The growth of personal loans, lines of credit and credit cards has also levelled off recently. But the largest debts that Canadians hold are their mortgages, and so the trend in that area is helping to reduce the growth rate of total household credit. At the same time, CMHC says is analysis suggests house prices are in line with demographic changes and economic growth. “CMHC, in consultation with the Bank of Canada and the Department of Finance, is continuing to refine models and techniques used to help identify risks of house price bubbles,” it stated. “At the moment, there is little evidence of a significant over-valuation in the Canadian housing market overall, although some centres warrant close monitoring.” CMHC expects housing markets to stabilize next year, and house prices to grow modestly going forward. Finance Minister Jim Flaherty took action earlier this year to reduce the growth of mortgage debt, including tightening up the rules surrounding mortgage refinancing, and decreasing the maximum length of insured mortgages from 35 years to 30. (Canadian mortgages must be insured if borrowers have a downpayment of less than 20 per cent). CMHC says that the refinance activity it’s seeing, which initially fell by nearly 40 per cent, is still down 25 per cent compared to the level it was at before the new rules came into effect. The overall level of mortgage insurance that’s being sought from the crown corporation dipped by about 10 per cent initially, but has since recovered. November 29, 2011 Home prices frothy: EconomistA new study of global housing markets by The Economist warns that markets in Canada and some other countries still appear "uncomfortably overvalued." Indeed, the magazine calls it downright frothy in its latest update of house prices indicators. Overall, the report shows prices falling in eight of 16 countries studied in terms of a price-to-income ratio, which measures affordability, and a price-to-rent ratio. By averaging the two readings, The Economist warns that prices are overvalued by 25 per cent or more in Canada, Australia, Belgium, France, New Zealand, Britain, the Netherlands, Sweden and the ever-unfortunate Spain. Here's a really troubling bit: For Canada, Australia, Belgium and France, housing "looks more overvalued than it was in America at the peak of its bubble." The magazine notes that some economists dismiss its measures, citing the fact that lower interest rates - Canada is such an example - can justify fatter prices because they allow heftier mortgages. The magazine responds to that just as Bank of Canada Governor Mark Carney and others have: It will not always be thus, and rates will inevitably rise. Here's another warning, also along the lines of what we've been told for months now: "Australia, Britain, Canada, the Netherlands, New Zealand, Spain and Sweden all have even higher household-debt burdens in relation to income than America did at the peak of its bubble." Canadian housing markets have been cooling down, and many forecasters project a continued softening, though not a crash. November 24, 2011 He gave no indication, however, whether his next move might be to actually reduce the trendsetting overnight rate from the current one per cent, as at least two major economists have urged. In a speech to a business audience in Montreal, the central banker made clear that he sees recent indicators that the Canadian economy rebounded strongly in the third quarter, and continued to perform well in October, as a temporary respite from the approaching storm. Carney, who was pessimistic about the second half of this year when he delivered his monetary policy report in October, conceded that the tail end of 2011 will be better than he thought. In last month's outlook, he had predicted Canadian growth would be a tepid two per cent in the third quarter, and a miserable 0.8 per cent in the fourth. Economists now expect the third quarter, which ended in September, to come in at three per cent or even higher, while early indications are that the fourth will also be stronger than thought. "Preliminary evidence suggests that economic growth in the second half of the year will be slightly stronger than the bank had projected," Carney said in notes of the speech released in Ottawa prior to the start of his address. "However, as outlined in the October report, a weaker external outlook is expected to dampen growth in Canada through financial, confidence and trade channels... These shocks from abroad imply more subdued growth in household expenditures and less vigorous growth in business investment." Carney is taking a cautious view of efforts in Europe to deal with the continent's sovereign debt and banking crisis, calling the situation a "crisis ... barely contained." He acknowledged that as recently as July markets were expecting him to start raising the bank's trendsetting policy rate, which has been at one per cent since September 2011, given that the outlook appeared to be brightening and inflation was at or above the bank's comfort zone of between one and three per cent. Canada has since been hit by a blast of headwinds from abroad, he said, and the future doesn't look nearly as bright. The forecast now is for Canada's economy to muddle along with excess capacity well into 2013. He did not change his projection that the economy will grow by a modest 1.9 per cent next year, although he highlighted that risks remain high. "In this environment, the bank judges it appropriate to maintain the considerable monetary stimulus in place," he said. As for inflation, Carney said he expects that rather than staying at the top of the bank's target range – it is currently at 2.9 per cent – consumer price escalation will slow to about one per cent by mid-next year as oil and food prices moderate. Analysts with Merrill Lynch and Capital Economics recently suggested the economy will slow so sharply next year that Carney will need to reduce the policy rate to half a per cent or even as low as 0.25 per cent, where it was during the recent recession. On his future intentions, Carney was noncommittal, merely repeating his mantra that the bank is monitoring economic and financial conditions, as well as risks, and will set the policy marker consistent with achieving two per cent inflation over the medium term. The theme of the governor's address to the Montreal Board of Trade centred on the bank's just concluded agreement with the federal government to continue targeting inflation at two per cent, within a control range of one-to-three. As the bank explained at the time, Carney still has flexibility to tackle financial instability and imbalances – such as a housing bubble – but only in extraordinary cases when they threaten the economy and inflation in the country as a whole. Generally, he said, monetary policy's "bluntness" makes it an inappropriate tool to deal with difficulties in an isolated sector. "The paramount goal of monetary policy in Canada has been, and remains, price stability," he stressed. November 23, 2011 Gillian Livingston Globe and Mail Update People who fail to pay off their mortgages by the time they hit their golden years are risking their dream of having a secure and fulfilling retirement, says Patricia Lovett-Reid, a senior vice-president at TD Waterhouse. “If we spend a third of our life in retirement you don’t want to be setting aside a portion of your income to satisfy the debt that should have been retired itself when you were working,” she says. “My greatest fear is that many Canadians may wake up and find that they’re living a quality of life that isn’t as fulfilling because they compromised tomorrow for a better today.” And with interest rates so low right now, it has encouraged too many people to borrow more than they can afford and live far beyond their means as they focus on their wants and not just their needs. “There will be a day of reckoning,” she says, especially when rates begin to rise and that debt burden becomes too heavy for some to manage. Earlier this week, Royal Bank of Canada’s latest housing study found that 57 per cent of Canadians surveyed expected they’d still be paying off their mortgage debt after they turned 55, and nearly one-third said they’ll still be carrying that debt past the age of 65. Elisseos Iriotakis, a partner at Safebridge Financial Group, says the root of the problem is that more people are living in more expensive cities – with higher house prices and living costs – and what used to take 25 years to pay off is now taking much longer. “A dollar can only get stretched so far,” he says. And today, people’s finances are being pulled in so many directions: paying for the cost of living, repaying debt, building up RESPs for their kids, RRSPs for their retirement and TFSAs for their emergency funds. Here are some of their tips to help people get rid of their mortgage debt before they’re eligible for seniors discounts. Put your mortgage first “You have to prioritize,” says Mr. Iriotakis, and realize that paying down your debts, including your mortgage, gives you a guaranteed return – something you won’t get from the volatile stock market. So paying yourself by paying down your mortgage is a “guaranteed” return, he says. “It’s better than a GIC, so by knocking down your mortgage you’re guaranteed that 3 to 4 per cent.” And paying off your mortgage debt faster will save you thousands of dollars in interest payments, he adds. Ms. Lovett-Reid says if you don’t take your hefty mortgage seriously, you won’t pay it off. And while paying off your mortgage may not be “exciting,” it will bolster your personal balance sheet. Give your mortgage payment a raise Mr. Iriotakis suggests home owners increase their mortgage payments each year by the rate of inflation, at a minimum, and if you get a raise, increase your payments by the same percentage. And if you have a variable-rate mortgage, “keep your payments at a five-year [fixed] rate or greater ... so that helps you to reduce your principal a lot quicker.” Choose your mortgage carefully If you have some expenses coming up, Mr. Iriotakis suggests to his clients to keep with a 25-year amortization with their mortgage even if they can afford larger monthly payments. That way they won’t have to borrow at higher rates to cover those other expenses and can make lump-sum payments on their mortgage when they have extra cash. But this only works if you have the discipline to save the money and make the extra payments, he notes. Mr. Iriotakis also suggests people don’t blindly take on a five-year mortgage because that’s what their bank says. On average, most mortgages are about 3.5 years long – which means many people locked into five-year mortgages are breaking them – and paying substantial fees – before they come due. About 70 per cent of consumers break their mortgage before its term is up, he says, some due to divorce, refinancing or to get a better interest rate. If you are not disciplined with your cash, then pay as much each month as you can afford towards your mortgage and choose accelerated bi-weekly payments, since that’s basically a forced savings plan, he says. Be disciplined The best way to avoid having too much mortgage debt is not to get it in the first place, says Ms. Lovett-Reid. Don’t get lured into buying the biggest house possible. Choose one you can afford, she says. Put debt reduction targets and deadlines in place. And have the courage to stick to them. Focus on paying off your debts and living below your means so that you don’t find yourself saddled with a huge debt from your mortgage and line of credit when it comes time to retire. She says people have to ask themselves: “Is my lifestyle sustainable in retirement?” Because by the time people hit retirement “they want to be channelling any excess cash that they may have – not to mortgage payment, not to a debt – but to a life and an experience instead.” Any windfall cash should be put towards your mortgage, says Mr. Iriotakis. It’s always nice if a rich uncle gives you a pile of cash, he jokes. But if you get a tax refund, put it towards your mortgage, and make sure you’re maximizing all your tax benefits to get the biggest refund you can. A way out if you’re buried in mortgage debt If you are heading towards retirement and still have a significant amount of mortgage debt, you have a few choices to make, says Mr. Iriotakis. You can bite the bullet and downsize by moving to a smaller house or condo, or moving to a cheaper location. “That’s a quick way of getting rid of the mortgage,” he says. Or, you can refinance your home and take a longer amortization so your monthly payments are less and will be affordable for you on a lower income. Ms. Lovett-Reid says while retiring with debt isn’t ideal, it can be managed. You can delay your retirement for a few years, or look for a part-time job to have while you’re retired. Retirees can also look at the possibility of a reverse mortgage, or boosting their exposure to equity with the hope that their savings will generate more income over the long term. November 22, 2011 Jesse Kline, National Post · Nov. 21, 2011 | Last Updated: Nov. 21, 2011 2:08 AM ET Even as the clouds were gathering over the American economy, most people refused to believe the storm was coming. The few economists who were warning of the economy's impending downfall were cast aside and laughed at. No one wanted to believe that the real estate market was a house built of cards. We can dig up more gold and build more cars, but God is never going to create more land, or so the theory went. When the market finally exploded in glorious fashion, the bubble that had been building since the mid-'90s was revealed to all. And yet, just because we know the bubble existed, does not mean that everyone fully understands it. Bubbles form when outside forces prevent a market from operating in a normal fashion. Prices stabilize at the point where the supply of a given product is equal to the demand for that product. In the case of the U.S. housing market, two outside forces were causing it to expand at an unnatural rate: Artificially low interest rates and a policy of increasing home ownership by securitizing and insuring mortgages through Fannie Mae and Freddie Mac - the two government sponsored enterprises (GSEs). Central banks, including the Federal Reserve, have for years been using interest rates to control behaviour and thus affect the economy - in this case, by (successfully) encouraging borrowing and spending. At the same time, the GSEs were mandated by Congress to increase the rate of homeownership. They did so by purchasing increasingly risky mortgages from the banks, a policy that removed the risk from financial institutions and caused banks to issue progressively riskier loans. The combination proved deadly. Of course, conventional wisdom has it that Canada's banking system is far more stable and regulation has led to more stringent lending practices, which allowed this country to escape the collapse of the housing market. Perhaps. But we must consider whether, like the Americans before us, we're having a hard time seeing a bubble we're already in. Much like in the United States, the Bank of Canada has kept interest rates artificially low. The rate now stands at a mere 1% and many economists believe it will be lowered to its recessionary level of 0.25%. The low rate has caused consumer borrowing to increase sharply. In fact, the level of debt, relative to income, has grown much more sharply in Canada than it has in the States, and Canadians now have higher household debt levels. And although Canada does not have GSEs, we do have the Canada Mortgage and Housing Corporation (CMHC), a Crown corporation that has a monopoly position in the mortgage insurance and securitization markets. The CMHC controls roughly 70% of the mortgage insurance market. Since the government guarantees 100% of the principal and interest on CMHC-insured mortgages, banks don't have to worry about risk. The government will take care of it. Of course, there are many differences between the two countries, including stricter regulations on what type of loans qualify for mortgage insurance, which prevented the formation of a large sub-prime market. But the rapid increases in housing prices in Canada is remarkably similar to the American experience before the housing collapse. And contrary to conventional wisdom, houses aren't always a good investment. According to the well-respected Case-Shiller Real Housing Price Index, U.S. house prices rose a mere 3.5% in inflationadjusted dollars between 1946 and 1995. It then rose by 70% between 1999 and 2006, and has since been plummeting toward its pre-bubble trend-line. In Canada, according to the Teranet-National Bank House Price Index, six major markets (national figures are not available) show a consistent pattern: In each case, prices stay steady, or rise only modestly, until the late-1990s, at which point house prices skyrocket. A report conducted by RE/MAX and released at the beginning of the month found that the average price of a Canadian home doubled in the first decade of the new millennium. So is our housing market in the midst of a bubble? "It seems reasonable to view housing as bubbly - well beyond effervescent," wrote Finn Poschmann, vice-president of research at the C.D. Howe Institute in an email to the National Post. "Bracing for a winter of discontent would be wise." If the Canadian housing market were to collapse, Canadian taxpayers would be hit hard. The federal government is fully liable for any losses incurred by the CMHC, which currently backs somewhere in the order of $600-billion worth of mortgages. It has been bailed-out by the government twice in the past. The government needs to act quickly to remove the factors that are causing the market to expand so rapidly, as well as to disperse the risk across the financial system. The CMHC should be privatized, much like the Australians successfully did in 1997. Banks and insurance companies should be allowed to do what they do best - assess risk, without standards being forced upon them by government bureaucrats. Doing so would not only spread the risk throughout the financial system and protect taxpayers, it would also reduce the likelihood of Canada experiencing a U.S.-style housing crisis. November 21, 2011 Garry Marr, Financial Post,Nov. 16, 2011 8:37 AM ET The Canadian housing market continues to defy those who have long predicted its collapse. If anything, the market seemed to pick up steam in October as sales across the country ended up the best they have been since January. Sales of existing homes rose 1.2% in October from the previous month, building on September's 2.5% gain, the Canadian Real Estate Association (CREA) said. The upward push caused CREA to revise its sales predictions slightly for 2011. It now says sales will rise 1.4% from a year ago, instead of 0.9%. "The continuing strength of home sales activity in the face of ongoing financial volatility speaks volumes about the con-fidence of Canadians in our housing market," said Gary Morse, president of CREA. Even going into 2012, CREA doesn't see much change in the market since interest rates are near record lows. CREA calls for a relatively minor 0.5% reduction in sales in 2012. The industry has seen annual sales holding steady at about 450,000 for each of the past three years. Prices have also shown a steady upward trajectory and are now forecast to attain an average of $362,700 in 2011, which would be a 7% increase from the year before. Next year, prices are expected to remain flat - something most people in the real estate industry see as an accomplishment under the present economic environment. "Home sales actvity over the past couple of months suggests buyers are confident that the Canadian economy will remain relatively unscathed by global economic risks, since every home purchase is a homebuyer's vote of confi-dence in the future," Gregory Klump, CREA's chief economist, said Tuesday. He said there is a strong feeling fiscal policy will be coordinated to give housing any support it should need in the event of an economic pullback. So far, the industry seems to be getting the support it needs from low interest rates, which have kept buyers in the market. Variable rate mortgages tied to prime are still available as low as 2.7%, while a fiveyear fixed-rate closed mortgage is now being discounted to 3.19%. CREA said a total of 397,561 homes have traded hands this year, a 1.8% rise from the first 10 months of 2010, but in line with the 10-year average. Toronto continued to carry the national market in October: Sales were up 14.3% from a year ago. The actvity in Canada's largest city helped boost overall sales activity, which rose 8.5% from a year earlier. Prices across Canada continued to moderate. The 5.5% year-over-year increase was the smallest since January and the average price of a home sold in October was $362,899. The consensus among economists is that the housing industry may not have much more to give in price or sales increases but nor is it set for a massive decline. "The fact that prices are overvalued today does not necessarily mean they will crash tomorrow," said Benjamin Tal, deputy economist with CIBC World Markets. He said a "violent market meltdown" would need a catalyst, such as the subprime crisis, or a sharp increase in interest rates, such as those of 1991. "We do believe the housing market in Canada will stagnate in the coming year or two," said Mr. Tal. A report from TD Economics indicates housing is a key component of the Canadian economy. It noted the construction industry accounts for 10% of gross domestic product. November 17, 2011 Rob Gerlsbeck Globe and Mail Update Last updated Monday, Nov. 14, 2011 10:19AM EST I recently decided to get serious about putting away money for my retirement and my kids’ education. I know what you’re thinking. Smart idea. But you’ll be less impressed once I tell you my age: I just turned 41. Forty-one! I can just picture financial planners out there shaking their heads. Don’t I know that starting to get serious about personal finance at 41 is like picking up the violin as a teenager and thinking I’ve got a shot at playing with the New York Philharmonic? What have I been doing? Just imagine how fat my RRSP portfolio would be if I had spent the last 10 years maxing out my account. Just imagine the cash savings I could have amassed if I had diligently banked a tenth of my income each and every year. I look at things a bit differently. At 41, I think I’m doing just fine. I’ve got a house, a wife and three kids. We get by on one middle-class income –comfortably. A big reason is that throughout most of my 30s I eschewed the financial advice that is so often given to people my age. I’m no financial wizard, mind you. But I’ve learned from experience that your 30s are not the decade to worry about getting rich or saving for retirement. There are more important priorities. If you take care of them, you’ll enter your 40s in remarkably good shape. But first things first. If you have yet to hit your 30th birthday, I can assure you that, financially speaking, you are about to experience one tough decade. In your 20s, your biggest dilemma was deciding between buying beer or textbooks. In your 30s the choices get frighteningly real. Shortly after our first son was born, I made several bleary-eyed trips to the drugstore in which I paid for diapers and baby formula with a credit card because I wasn’t sure we had enough money in our bank account to cover both those necessities and the mortgage payment that was coming out the next morning. Kids, of course, are one big reason people struggle at this age. The average Canadian couple is around 30 when they start a family. It costs them over $60,000 to raise a child to the age of five. Even if one parent stays home to save on daycare costs, your finances take a hit because you have to get by on one income rather than two. Right around the time most of us are changing our first diapers, we’re also buying our first house. Mortgage payments, property taxes, home maintenance and other home-ownership costs swallow 48 per cent of a typical family’s pretax annual income. The double-whammy of children and life as a homeowner are overwhelming for thirtysomethings, says Debbie Gillis, a credit counselling co-ordinator with K3C/Kingston Counselling in Kingston, Ont. “Suddenly you feel like an adult, and it’s a big slap in the face.” I can relate to Gillis’s assessment. My wife and I were 29 when our first child was born and we bought a house. We thought we were in good shape. We had no student or credit card debt and our car was paid for. But we were surprised how quickly our financial position began to unravel, especially after we decided that my wife would stay home rather than go back to work. Our income was chopped in half, and that was a shock. Owning a home turned out to be an even bigger shock. It wasn’t the mortgage payments, which were about equal to what we had been paying in rent. It was the maintenance costs. Our house was close to 90 years old and our big green monster of a furnace soon conked out. A new one set us back $4,000. Then our roof leaked and we had to hire a contractor to reshingle. That set us back another $5,000. We put most of these repairs on our credit card and home equity line of credit. As our bank account dwindled, we tried to make every penny count. We clipped coupons and cranked down the heat on winter nights. We didn’t go out to a restaurant or the movies for three years, and while other young parents took their toddlers to Disney World, we spent three days camping in a provincial park at a cost of $30 a night. Here’s the insanity, though. We were far from broke. Both of us were still putting up to $3,000 a year into RRSPs. We had started buying mutual funds in our 20s and we were afraid to stop. We were bombarded with advice warning us that by not saving enough now, we risked spending our old age in the poorhouse. Trouble was, it felt like we were already in the poorhouse. A lot of people get stuck in the same trap, says Gillis. “I’ve seen people who put money aside for retirement and then they miss a mortgage payment.” As silly as that sounds, you can understand why people try to do everything at once. Not only are thirtysomethings expected to buy a house and raise a family, but most self-help books and personal finance articles preach a lengthy checklist of other must-dos: build your career, save for retirement, put away cash for the kids’ education, pay down your student debt, escape credit card debt. Oh, yeah, and load up on life insurance, too. Fact is, even a couple earning an above-average income can’t accomplish all these goals simultaneously. So how do you survive your 30s? It took some trial and error but my wife and I eventually found that following three rules makes a huge difference in our financial lives: You can’t do everything, so don’t try Raising kids and building a career are stressful enough. My advice? Concentrate on those two priorities in your 30s and pass on some of the other stuff. That’s not to say you should spend wildly or ignore your finances. But rather than take a scattershot approach to money, focus on one goal at a time. For most of us, the first and most important goal consists of simply getting out of debt – student debt, credit card debt, car loans and mortgages. Gillis points out that some of her clients make the mistake of trying to save money for their kids’ education while still paying off their old student debts. That makes no sense at all. Better to tackle your own debt first, then worry about helping your kids out. Or consider the situation my wife and I found ourselves in. While we were shoving money into our RRSPs we were also going into debt to do home repairs. What were we thinking? We were paying 6 per cent interest on our line of credit and 18 per cent on our credit cards. Meanwhile, the annual return from our RRSPs was hovering at 2 per cent to 3 per cent, and because we weren’t earning a large income, the tax breaks were small. It took us a couple of years to realize what we were doing, but we came to our senses at last and stopped contributing to our RRSPs until we had paid off our debts. Finally, we could breathe. Take small steps. Then repeat After we got rid of our debts, we decided to make our mortgage the next priority. Whenever we had extra cash, we paid down a part of our principal. A couple of thousand dollars a year has added up and we expect to have our entire mortgage paid off in 14 years rather than 20. That should save us thousands of dollars in interest. Our next goal: saving for retirement and our kids’ education. No matter what your priorities are, don’t feel guilty about accomplishing them slowly. “To some degree your 30s are a time of debt accumulation rather than asset accumulation, and as long as it’s good debt – like a house or a reasonable car loan – that’s okay,” says Scott Ellison, a certified financial planner in Halifax. Relax. It does get better Ellison, who is 39 with three kids, says that while our 30s might be the most stressful period of our lives, there is light at the end of the tunnel. By the time most people reach 45 they’re in much better shape financially. Your salary is higher, your kids no longer need expensive day care, your mortgage is dwindling. “In your 30s your long-term financial goal should be to end up with no debts and no mortgage by the time you retire, and for a lot of people time really does take care of that,” he says. I know what he means. At 41, I’m still a long way from watching my kids move out of the house. Even though my son will be turning 13 this year, we added to our family three years ago with twin girls. And we bought a bigger house, too. But by doing one thing at a time, my wife and I are in a position to comfortably handle all of our financial responsibilities – and even contribute to our RRSPs as well. I enjoyed my 30s and I’m looking forward to enjoying my 40s even more. Excerpted with permission. Retire Wealthy: A Financial Plan for Canadians of All Ages ($19.95), edited by Duncan Hood, Dan Bortolotti and David Aston, is published by MoneySense and is available at Chapters, Shoppers Drug Mart, Loblaws, London Drugs, Walmart Canada and other retailers across the country. November 16, 2011 November 15, 2011 Leslie Penney Propertywire Canada Late last week there was a class action lawsuit filed in B.C. and Ontario against CIBC Mortgages Inc., claiming that mortgage borrowers were treated unfairly when they broke their mortgage before maturity.   Basically, in the suit, the lawyers are claiming that:- ‘CIBC applied terms and conditions to certain mortgage contracts to allow it unfettered discretion for calculation of mortgage payment privileges.’- ‘The quantification of prepayment penalties applied by CIBC are in breach of the mortgage contracts.’Essentially, back in 2005 they used language in their contracts concerning their penalties was quite vague and hardly enforceable.  These terms were used in contracts at the CIBC branches, PC Financial locations, as well as through brokers via FirstLine Mortgages.  According to the lawyers involved, they estimate that the value of the case is in the tens of millions of dollars – that’s quite a large sum of money. However, they have also said that these cases get settled out of court quite often, remaining low profile. Out of all this, the big question that comes to mind is how are the banks getting away with it and what can be done about it. Well, first of all, the big banks and Government are so close that you can’t fit a pin between them. Secondly, the only way to curb this would be to use standardized calculations. As of right now, on a fixed mortgage a client is charged a penalty based on an interest rate differential penalty (IRD), which pretty much varies from lender to lender. On a variable it’s usually a penalty of three months interest.  In the case of fixed rate products, there should be a standardized calculation used by all lenders and easily calculated by mortgage holders so they can determine what their penalty would be. Just last week I had a client that was doing a refinance and with their payout statement from their lender the IRD calculation was there. I calculated it and was out by only a few dollars, which was due in the discrepancy in the bond yield between when they done it and I done it. They should all be that easy. As mentioned in my article a few weeks back, regulators are keeping a closer eye on banks’ practices and are fielding a large number of complaints, many specific to prepayment penalties when breaking mortgages. Banks are in the business to make money and they have the power to do so. However, regulators also need to be aware of what banks are charging in penalties and unwarranted fees. If you look closely at most contracts with banks, they have wording that allows them to change fees or change additional fees without notice. Hardly fair to the consumer. What are your thoughts on prepayment penalties and calculations used by banks and other mortgage lenders? November 15, 2011 OTTAWA— The Canadian Press Published Tuesday, Nov. 15, 2011 9:56AM EST The Canadian Real Estate Association says home sales in Ontario were stronger than anticipated during the third quarter — resulting in a slightly brighter outlook for CREA's 2011 and 2012 national forecasts. The industry association is now projecting sales this year will be up 1.4 per cent from 2010, half a percentage point better than the previous forecast. CREA expects there will be slightly fewer units sold next year than in 2011, but the 0.5 per cent decline is an upward revision. October's sales activity through CREA members was the highest since January and the national average price was up 5.5 per cent from October 2010. November 15, 2011 JOHN HEINZEL From Friday's Globe and Mail Last updated Friday, Oct. 28, 2011 6:39AM EDT The Home Buyers Plan is a great tool for first-time home buyers. It allows you to withdraw up to $25,000 tax-free from your RRSP to buy or build a qualifying home, and to repay the money to your RRSP over a period of up to 15 years. However, your predicament underscores why it’s important to read the fine print before you make any important financial decision. The Canada Revenue Agency is very clear on the rules. “Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year,” the CRA’s website says. For example, if you made your RRSP contribution on Sept. 1, you would have to wait until Nov. 29 to withdraw the money, or you would not qualify for an RRSP deduction for the funds. (This is assuming you did not have any other money in the RRSP before you made the $25,000 contribution.) There may be ways around the problem, however, says Camillo Lento, a chartered accountant and lecturer in accounting at Lakehead University. For example, you could try to delay your closing date and withdrawal until after the 90-day period has passed. The CRA would then allow you to deduct the $25,000 from your income, potentially creating a tax refund. You need to be aware of another rule, however. Before applying to withdraw funds under the HBP you must have a written agreement to buy or build a home, with the condition that your final withdrawal under the HBP can be no later than 30 days after the closing date. Any withdrawals after the 30-day period would be included in your income and subject to tax. Keeping these rules in mind, Mr. Lento suggests another option: You could plan to close your home purchase, say, 62 days after you made the RRSP contribution, using a line of credit to make the down payment. You could then withdraw the $25,000 under the HBP 29 or 30 days later and pay off the line of credit. That way, you would meet both the 90-day and 30-day conditions and qualify for a refund. “If he hasn’t purchased the house yet, he can probably make it work,” Mr. Lento says. If you’ve already bought the house and it’s not an option to delay the closing, you can still access the $25,000 for your down payment by bypassing the HBP and just making a regular withdrawal from your RRSP, he says. In that case, you would be subject to withholding tax on the funds, but you would qualify for a deduction and tax refund. Ultimately, it would be a wash, because the $25,000 RRSP contribution and $25,000 withdrawal would cancel each other out. Before you make a decision, I recommend you consult the CRA or a tax professional. November 15, 2011   Canadians heed debt warnings and exhibit confidence in their ability to manage their mortgage: CAAMP Canadian Association of Accredited Mortgage Professionals releases Annual State of the Residential Mortgage Market in Canada report Toronto, ON (November 9, 2011) – Canadians have heard the many cautions about carrying too much debt and are taking action to insulate themselves from future economic downturns, according to the seventh Annual State of the Residential Mortgage Market report by the Canadian Association of Accredited Mortgage Professionals (CAAMP), released today. Highlights: About one-third (32 per cent) of homeowners with mortgages had some mortgage activity in 2011, with 23 per cent renewing or refinancing their mortgage Fixed rate mortgages remain most popular (at 60 per cent), while 31 per cent have variable rate mortgages  Among those who renewed their mortgage in the past 12 months, 78 percent saw a reduction in their rate Among those who renewed or refinanced their mortgages in the last year, 21 per cent changed lenders Levels of equity takeout have dropped in 2011 - only 10 per cent of mortgage holders took out equity in the last year, a 40 per cent drop from 2010 "Overall, our survey paints a picture of Canadians generally and homeowners in particular as very focused on their finances. They are planning ahead, aggressively paying down their mortgage in advance of any further economic jolt,"" said Jim Murphy, AMP, President and CEO of CAAMP. "Prudent is the word that best sums up how Canadians are feeling at this time." Canadians secure in their own positions; skeptical about others The 2011 survey found an interesting contrast between individuals’ own debt levels and their feelings towards other Canadians’ financial positions. Forty-six per cent of respondents agreed that "as a whole, Canadians have too much debt" and many believe that "low interest rates have meant that a lot of Canadians, who probably should not have, became homeowners over the past few years." However, among those with a mortgage, most disagree with the statement "I regret taking on the size of mortgage I did" and a substantial number agree that mortgage debt is "good debt." Canadians also agree overall that "real estate in Canada is a good long-term investment." And, despite being concerned about overall debt levels of Canadians, they believe that they personally have acted responsibly. Canadians could weather a potential storm Canadians have insulated themselves by shopping for the best interest rates with the help of a mortgage broker whose market share has increased. Among those who renewed a mortgage in the past year, the number who switched lenders was up to 21 per cent in 2011. At the same time, three quarters of Canadians who renewed or refinanced their mortgage this year saw a decrease in their mortgage rates. For a five year fixed rate mortgage, the average discount has been 1.46 per cent during the past year. And fewer Canadians have taken out equity, down to 10 per cent in 2011. By comparing rates with different mortgage lenders, aggressively paying down their mortgages, and decreasing the amount of equity they take out of their mortgages, most Canadians appear to be in a comfortable position to weather the economic challenges ahead. In fact, eighty-four per cent of mortgage holders said they can handle an increase of $200 per month in their mortgage payments, and 78 per cent have at least 25 per cent equity in their homes. "Despite less than positive feelings towards the economy, or maybe because of that, Canadians are showing a level of prudence in their decisions that is inspiring," said Murphy. "That suggests to us that there is no need for policy makers to introduce new measures that would reduce housing activity." The report is authored by CAAMP Chief Economist Will Dunning and based on information gathered by Maritz Research Canada in a survey of Canadian consumers conducted in October 2011. The CAAMP survey report contains a wealth of industry information, including consumer choices and borrowing behavior, opinions on current "hot topics" related to housing and mortgages, regional breakdowns of responses, and an outlook on residential mortgage lending. For a copy of the report, please visit www.caamp.org. November 9, 2011 November 8, 2011 Since 2000, the value of a Canadian home has doubled, rising from $163,951 to $339,030 in 2010, says a Canadian real estate organization. According to a report released by Re/Max, billions spent in new construction, renovation, and infill over the past decade have contributed to a serious upswing in the calibre of Canada’s housing stock, propping up residential average price in the country’s major centres. Nowhere has the upswing been better captured than in both the value of residential building permits issued nationally between 2000 and 2010—at $340 billion—and the estimated $450 billion spent in renovation. The impact of these two forces alone has fuelled the Canadian residential real estate market—as well as the construction industry—for more than 10 years. As a result, investment in Canada’s housing stock is at an all-time high in the 16 Canadian residential real estate markets examined in the Re/Max Housing Evolution Report. Higher quality housing translated into extraordinary price appreciation across the country - with 62 per cent (10 markets) experiencing increases in excess of 100 per cent since 2000. “While a number of external variables were also behind the exceptional gains, revitalization—amid an aging housing stock—and newer construction are largely underestimated factors supporting Canadian housing values,” said Michael Polzler, Executive Vice President, Re/Max Ontario-Atlantic Canada. “The trend is expected to continue for years to come as investment in residential real estate through renovation, infill, and redevelopment ramps up across the country. City planners, builders, developers, and homeowners have only just begun.” The report found that the unprecedented sum funneled into housing has effectively changed the landscape of Canada’s major centres. New home construction has advanced suburban sprawl, giving rise to new sought-after pockets in virtually every centre across the board. “Renovation has also had a tremendous impact on housing throughout the decade, so much so that it’s emerged as, arguably, Canada’s next national past time,” said Polzler. “Residential renovation spending has been gaining momentum year-over-year since the early part of the decade and now exceeds $60 billion annually.” November 8, 2011 The housing market may be a boring place for the next year, according to CMHC, as the number of starts remains near current levels and resale prices hold steady. In its fourth quarter market update, Canada Mortgage and Housing Corp. said mortgage rates would likely remain at historically low levels at least until the last half of 2012. The housing market’s fate is largely tied to rates, the agency said. Economists and market watchers have predicted a variety of scenarios for house prices in the next year, with some suggesting prices could drop as much as 10 per cent by the end of 2012. Capital Economics goes a step further, having predicted a drop of 25 per cent in the next several years as demand weakens amid higher mortgage rates. “Should rates move lower than projected, housing starts and MLS sales could be higher than expected and house prices could grow at a faster pace than forecast,” the report stated. “Alternatively, should financial market expectations improve and interest rates move higher than projected, housing starts and MLS sales could be lower than expected and house prices could grow at a slower pace than forecast.” CMHC said there could be as many as 470,100 resales in Canada this year, and expects that number to rise to 485,500 in 2012. “We expect balanced market conditions to prevail and the average MLS price to remain fairly flat to the end of 2012,” the report stated. CMHC said 186,750 new homes would be built in 2012, compared to 191,000 for 2011. Analysts generally agree that at least 175,000 new homes are needed each year to meet demand from new families and immigration. “Ontario, Saskatchewan and Nova Scotia’s growth will be the strongest, while Prince Edward Island and British Columbia are forecast to see modest growth,” CMHC said. “The other provinces, on the other hand, are expected to see decreases. In 2012, housing starts are forecast to increase in British Columbia, Alberta and Manitoba.” Other highlights from the report: · Posted mortgage rates will remain relatively flat until late 2012. For 2012, the one-year posted mortgage rate is expected to be in the 3.4 to 3.8 per cent range, while the five-year posted mortgage rate is forecast to be within 5.2 to 5.7 per cent. · Single starts have rebounded coming out of the recession. After an increase in the third quarter of this year, they are expected to moderate before rising later in 2012. · Since the beginning of 2011, new listings steadily outpaced existing home sales. As a consequence, the resale market has moved from sellers’ to balanced market conditions. The agency said the economic outlook for the country was uncertain, making it difficult to forecast growth in the housing market. “Sustained financial market uncertainty has heightened risks but, there are both upside and downside risks to the outlook,” the agency stated. The positive: “Some upsides include the potential that the U.S. could recover stronger than is forecast, thus increasing U.S. employment and economic growth. This could, in turn, boost employment growth in Canada and lead to stronger than anticipated housing demand.” The negative: “Some downsides include a slower than expected recovery for the U.S., reduced economic growth in emerging economies and a downturn in parts of Europe. Such events could result in slower employment growth in Canada, which could lead to lower demand for housing.” November 8, 2011 Financial Post · Nov. 4, 2011 OTTAWA — The outlook for construction activity in Canada weakened in September, as the value of building permits declined for the third straight month. Statistics Canada said Friday that permit values fell 4.9% to $5.6 billion during the month. Economists had expected an increase of as much as 2.8%. The federal agency also revised its estimate for August, lowering the decline that month to 10.1% from 10.4%. “The decline nationally was mainly attributable to lower construction intentions for both the residential and non-residential sectors in British Columbia, and the non-residential sector in Alberta,” the agency said. The value of permits increased, meanwhile, in Ontario, Manitoba, Saskatchewan and Nova Scotia. The non-residential sector recorded a drop of 11% to $2 billion in September, the third consecutive monthly decline, with Alberta, B.C. and Ontario accounting for much of the weakness. Non-residential permits rose, however, in five provinces, led by Saskatchewan and Quebec. Residential permit values slipped by 1% to $3.6 billion. That followed a 6% drop in August. Six provinces posted declines in September, led by British Columbia. In a separate report Friday, Canada Mortgage and Housing Corp. said housing starts would total 191,000 units this year and 186,750 units in 2012. CMHC also said existing home sales will total 450,100 units in 2011 and 458,500 units next year. The average home price will be $363,900 this year and $368,200 in 2012, it said. “Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration. These factors will continue to support Canada’s housing sector in 2012,” said CMHC deputy chief economist Mathieu Laberge. November 4, 2011 The house is nearly perfect: decent condition, nice neighbourhood and while it's priced at the higher end of their budget, the young couple feels they can shoulder the cost. The only thing standing between them and the purchase of their first home is the dreaded circa 1960s bathroom. With its cracked ceramic tile, leaky taps and old bathtub, it’s in dire need of an overhaul - an expensive deal-breaker that wasn't accounted for in the homebuyers’ original budget. So, what are their options? The first, of course, is to walk away until they find something they can afford. A complete bathroom renovation can cost upwards of $15,000 and if the couple doesn’t feel comfortable tacking on the additional debt, they need to think twice. Another option is to obtain a line of credit. They’re an easy way to access low interest short-term cash quickly but they’re not necessarily the smartest way to go, at least not according to David Chilton, the Wealthy Barber himself. “People cannot resist lines of credit,” he said in a speech at a conference of the Canadian Pension & Benefits Institute in May. “And the worst combination in the country is a line of credit and a home renovation – once they renovate one room, the other rooms pale by comparison, so they go on to the next room and it’s a never-ending cycle of renovation as they get deeper and deeper and deeper in debt.” A third, less common route the couple could take is to apply to the purchase plus improvements program (PPIP). Also known as the improvement, renovation or high-ratio mortgage, this option covers the sale price of the home, as well as any renovations that would increase the value of the property. The program allows homebuyers to take advantage of the historically low interest rates associated with a mortgage and pay one lump sum monthly payment. But the PPIP involves a few steps, the first being to make the purchase offer conditional on getting approval for the renovation mortgage program. The next step is to get quotes from a contractor to determine the cost of the renovations, says Daniel Natereno, a mortgage broker. The Canadian Mortgage and Housing Corporation (CMHC) will approve a loan of up to 95 per cent of the ‘as improved’ value of the home, provided the money you’re putting into the home does, in fact, improve the value. Renovations cannot be strictly cosmetic in nature, warns Mr. Natereno, but must rather be part of a broader project like changing a bathroom, kitchen or flooring. The bank will send an inspector to confirm that, based on the list of improvements that are requested, they’ve been done sufficiently. Then the inspector will send the report back to the bank indicating that everything’s complete and they’ll release the funds to the client. Quotes are often required in order for the lender to release funds, though some lenders will make exceptions for small improvements. Inspection reports can cost betweens $100 to $200, says Mr. Natereno. Depending on the homebuyers’ current situation, the PPIP can offer more benefits than a traditional line of credit. “Most banks will give you a line of credit of up to 80 per cent of the market value of the property, whereas the PPP/CMHC-insured mortgage can go up to 95 per cent of the improved value of the property, so it provides a way for homeowners who've only got 5 per cent of the down payment to be able to buy the home they want and improve it as well,” says Tina Tehranchian CFP financial advisor. But there are certain disadvantages to these high-ratio mortgages, and they’re certainly not right for everyone, explains Ms. Tehranchian. Those looking to obtain up to 65 per cent of the purchase price plus improvement value must pay a 0.50-per-cent premium, whereas those wanting more than 90 per cent must pay a 2.75-per-cent premium on the total loan amount. It may not make sense for someone looking for a loan on the lower end of the scale to pay this premium, since most financial institutions offer lines of credit of up to 75 per cent of the value of the home. “As long as that’s the maximum that they need, that would be a better option because there’s no CMHC premium,” says Ms. Tehranchian. The PPIP also doesn’t necessarily make sense for people whose cash flow fluctuates, such as some business owners. To these borrowers, the line of credit option lets them pay down the loan more quickly than they could on a mortgage, so long as the they’re disciplined. Lines of credit are also good in the bad times, explains Ms. Tehranchian, since you can just revert to paying the minimum when things slow down. The other caveat with the PPIP is that while they make it easier for borrowers to qualify and force them to be more disciplined with the one monthly payment, they can tempt homebuyers to bite off more than they can chew. “Homebuyers should do their homework and make sure they’re going to be able to afford those loans, even if they went up 3 per cent from their current levels. The last thing you want to do is have a very low down payment (5 or 10 per cent) and then have the property market drop. You’ll see your down payment wiped out and you’re stuck with a mortgage that costs you way more than you expected,” says Ms. Tehranchian. November 1, 2011 Helen Morris, National Post It is always satisfying to get yourself a really low mortgage rate, knowing even a 0.5 percentage point reduction in your rate can mean substantial savings in interest payments over the lifetime of any deal. However, advisors urge clients to carefully examine the offer as some terms and conditions could, in the long term, prove to be more costly than a higher rate with flexible terms. "Some lenders advertise a really good rate but you're not allowed any pre-payments during the term," says John Filice, a mortgage broker in Toronto. The rate is suitable for a first-time buyer with a limited cash flow, he says, but not for someone who can make extra payments. For clients who have the ability to make extra payments, Mr. Filice says it may make more sense to pay a slighter higher rate and increase the frequency of payments, rather than take longer to pay off a lower-rate mortgage with no pre-payment facility. " You want to make sure that the mortgage is portable to another house," says Mike Missere, a mortgage broker in Thunder Bay. He says taking one of today's low-rate deals with you when you move could save early repayment penalties for your existing mortgage, as well as higher interest costs on a future new deal, but cautions that you check how the early repayment penalty is calculated. "There's two formulas, either three months' interest or the interest rate differential," Mr. Missere says. "Depending on your interest rate and how much time you have to maturity, those interest rate differentials can be substantial." Mr. Filice says borrowers need to check what documentation a lender requires and when this material needs to be submitted. He says customers should check how long it will take to actually get the money from the lender. "Some banks will need 30 days once a file is complete to fund a deal, whereas some lenders can do it in five days," Mr. Filice says. "If you're refinancing, or you need funds for a certain timeframe, that does affect it." Mr. Filice says some lowrate offers can be short-lived. "Some lenders will have a quick-close special and if it doesn't fund within 30 days, the rate will jump," he says. "Either have a backup plan or be sure you can meet [documentation and closing] requirements." Again, for refinancing Mr. Filice says check conditions carefully. "If you're doing a refinance to pay off some debts, do the lenders want you to pay off those debts up front?" Mr. Filice says. "Or will they just allow you to pay out the debts on your own?" "A lot of people spend more time looking for a fridge or a stove than they do for the right mortgage," Mr. Missere says. "The right mortgage makes more sense. It's the largest expense they're going to have. They want something that can be managed properly to reduce costs over time. Interest rate is important, but so are all the features." October 31, 2011 Financial Post · Oct. 26, 2011 | Last Updated: Oct. 26, 2011 1:07 PM ET OTTAWA — Housing prices rose in August for the ninth month in a row, according to the Teranet-National Bank national composite house price index, released Wednesday. The 0.9% gain in August —the fifth time in those nine months that the increase was 0.9% or above — took the index to a new high of 149.46 (the baseline being 100 in June of 2005). Toronto, where home prices rose 1.6%, led the gains in the index, which would have risen by just 0.6% if Canada’s biggest city was excluded. It was one of four metropolitan areas monitored in the index where housing price increases in August exceeded the national average; the others were Winnipeg (1.3%), Hamilton (1%) and Ottawa-Gatineau (0.9%). Calgary saw a 0.7% gain month-over-month, while Vancouver and Edmonton both posted a 0.6% increase and Montreal prices rose 0.3%. Prices were flat in Victoria and Quebec and down 0.2% in Halifax. “Vancouver’s August increase extended its string of consecutive gains to 11, currently the longest run of monthly rises among the markets covered,” said Marc Pinsonneault, senior economist with National Bank. “The Halifax decline was the second in a row.” Year-over-year, the national increase was 5.4% in August, a level exceeded by five of the index’s 11 metropolitan areas — Vancouver (9.9%), Winnipeg (7.6), Quebec (6.7), Toronto (5.6%). Prices increased over the previous year’s levels by 3.9% in Ottawa-Gatineau, 2.9% in Halifax, 2.4% in Hamilton and 0.8% in Calgary. “The Calgary appreciation broke a nine-month run of 12-month deflation,” Pinsonneault said. “Prices remained down from a year earlier for a 10th consecutive month in Edmonton (-2.1%) and for a ninth consecutive month in Victoria (-1.2%). October 27, 2011 The Toronto stock market was lower Tuesday with investors cautious amid weak earnings reports and a warning from the Bank of Canada of slowing economic conditions as it kept its key interest rate unchanged at one per cent. There was also heightened uncertainty over what sort of plan will be unveiled Wednesday by eurozone leaders to deal with the region’s debt crisis. The S&P/TSX composite index closed down 52.54 points to 12,109.75 as a big jump in bullion and gold stocks limited losses while the TSX Venture Exchange was up 5.12 points at 1,565.45. The Bank of Canada said Tuesday the global economy is slowing and Europe may actually fall back into a brief recession. It added that Canada’s economy will have a tougher time getting back to full speed. It estimated Canada’s economy will likely grow a modest 2.1 per cent this year — most of it in the first quarter — and will fare even worse at 1.9 per cent next year. Both numbers were 0.7 percentage points less than the bank had projected in July. “It sends a signal that you aren’t getting a rate hike any time soon,” said Gareth Watson, vice-president investment management and research, Richardson GMP Ltd. “Supposedly we’re doing better than everyone else, which maybe as a snapshot in time is true, but over the long-run (the economy) is going to follow the path of the big leaders.” The Canadian dollar plunged following the bleak economic assessment by the central bank after earlier moving past parity with the U.S. dollar for the first time in five weeks. The loonie was down 1.29 cents to 98.4 (U.S.) after rising as high as 100.11 (U.S.). New York markets tumbled as the Dow Jones industrial index fell 207 points to 11,706.62, the Nasdaq composite index dropped 61.02 points to 2,638.42 and the S&P 500 index declined 25.14 points to 1,229.05. Uncertainty over the European debt crisis grew after officials decided that key parts of a package meant to deal comprehensively with the eurozone’s government debt crisis will not be ready in time for a leaders’ summit on Wednesday. A meeting of European Union finance ministers, which was to be held just before the summit, was called off. A summit of EU and eurozone leaders planned for Wednesday evening will still be held, but its conclusions on the grand plan may remain vague without the technical work concluded. It has been expected that among the measures, the 17-country eurozone was set to boost the powers of its bailout fund. German lawmakers said the fund’s lending capacity could reach more than 1 trillion euros. The plan is also expected to lighten Greece’s debt load by having the country’s private bondholders agree to sharper losses. Meanwhile, ailing European banks will be asked to raise fresh capital to protect them against such losses. “What the market has been absolutely dying for is details,” Watson said. “They want specifics, they want numbers. They want to know if you’re a Greek bondholder what is the haircut you’re finally going to take so we can get Greece off the map and stop talking about them.” Earnings misses included Canadian Pacific Railway Ltd., which said its net earnings were $186.8 million or $1.10 per share, missing analyst estimates by a penny as higher fuel prices and operating expenses offset stronger revenues. The railway’s revenue came in at $1.34 billion (U.S.), which met expectations. Its shares lost 31 cents to $59.52. Shares in U.S. manufacturing conglomerate 3M fell 6.24 per cent to $77.05 (U.S.) as it lowered its earnings expectations for the year as slowing growth overseas continues to impact its business. Buyers were also discouraged by data showing that consumer confidence in the U.S. economy fell in October to its lowest level since 2009 when the U.S. was in the middle of a deep recession. The Conference Board says that its Consumer Confidence Index dropped more than six points to 39.8, down from a revised 46.4 in September. The TSX found support from the gold sector as bullion prices advanced with the December gold contract up $48.10 to $1,700.40 (U.S.) an ounce. The group gained about 3.5 per cent as Barrick Gold Corp. climbed $1.60 to $48.05 (U.S.) while Goldcorp Inc. improved by $1.90 to $48.34. Oil prices charged ahead for a third day as markets grow more optimistic that European leaders are set to deliver a comprehensive plan to deal with the region’s debt crisis on Wednesday. The December crude contract on the New York Mercantile Exchange was ahead $1.90 at US$93.17 a barrel. But the energy sector stepped back 1.64 per cent as Suncor Energy declined 44 cents to $31.14 (Canadian) while Talisman Energy was down 35 cents at $13.79. The base metals sector moved back 2.6 per cent as copper prices stepped back, down three cents to $3.42 (U.S.) a pound. Chinese manufacturing data helped send the metal 23 cents higher on Monday. China is the world’s biggest consumer of the metal. Teck Resources lost 98 cents to $35.82 and First Quantum Minerals fell 60 cents to $17.23. The financial sector declined 1.07 per cent with Scotiabank down 81 cents to $51.43. Online investment broker TD Ameritrade says its fiscal fourth-quarter profit shot up 44 per cent to $163.7 million (U.S.) or 29 cents a share, missing estimates by two cents. Revenue came in at $703.5 million, which missed estimates of $713.6 million. TD Bank, which owns a minority stake of the U.S. online broker, said it expects TD Ameritrade’s fourth-quarter earnings to translate into a contribution of $54 million (Canadian) to the Canadian bank’s fiscal fourth-quarter net profits. TD shares fell $1.28 to $73.68. October 26, 2011 25 October 2011 Contact: Jeremy Harrison Ottawa - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economy has slowed markedly as several downside risks to the projection outlined in the Bank’s July Monetary Policy Report (MPR) have been realized. Financial market volatility has increased and there has been a generalized retrenchment from risk-taking across global markets. The combination of ongoing deleveraging by banks and households, increased fiscal austerity and declining business and consumer confidence is expected to restrain growth across the advanced economies.  The Bank now expects that the euro area—where these dynamics are most acute—will experience a brief recession. The Bank’s base-case scenario assumes that the euro-area crisis will be contained, although this assumption is clearly subject to downside risks. In the United States, diminished household confidence, tighter financial conditions and increased fiscal drag are expected to result in weak real GDP growth through the first half of 2012, before growth strengthens gradually thereafter. In Japan, reconstruction activity is projected to boost growth over 2012-13, although Japan’s economy will be constrained by reduced global activity and the sharp appreciation of the yen.  Growth in China and other emerging-market economies is projected to moderate to a more sustainable pace in response to weaker external demand and the lagged effects of past policy tightening. These developments, combined with recent declines in commodity prices, are expected to dampen global inflationary pressures. The outlook for the Canadian economy has weakened since July, with the significantly less favourable external environment affecting Canada through financial, confidence and trade channels.  Although Canadian growth rebounded in the third quarter with the unwinding of temporary factors, underlying economic momentum has slowed and is expected to remain modest through the middle of next year.  Domestic demand is expected to remain the principal driver of growth over the projection horizon, though at a more subdued pace than previously anticipated.  Household expenditures are now projected to grow relatively modestly as lower commodity prices and heightened volatility in financial markets weigh on the incomes, wealth and confidence of Canadian households. Business fixed investment is still expected to grow solidly in response to very stimulative financial conditions and heightened competitive pressures, although it will be dampened by the weaker and more uncertain global economic environment.  Net exports are expected to remain a source of weakness, owing to sluggish foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar. Overall, the Bank expects that growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases.  The Bank projects that the economy will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013. The weaker economic outlook implies greater and more persistent economic slack than previously anticipated, with the Canadian economy now expected to return to full capacity by the end of 2013.  As a result, core inflation is expected to be slightly softer than previously expected, declining through 2012 before returning to 2 percent by the end of 2013. The projection for total CPI inflation has also been revised down, reflecting the recent reversal of earlier sharp increases in world energy prices as well as modestly weaker core inflation.  Total CPI inflation is expected to trough around 1 per cent by the middle of 2012 before rising with core inflation to the two per cent target by the end of 2013, as excess supply in the economy is slowly absorbed. Several significant upside and downside risks are present in the inflation outlook for Canada. Overall, the Bank judges that these risks are roughly balanced over the projection horizon. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada. The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2 per cent inflation target over the medium term. October 25, 2011 By Marnie Bennett, Ottawa Citizen For most prospective buyers, those first few steps into a circa 1970s or 1980s finished basement can be a shocking and scary experience. For most, it's difficult to see past the passé decor of orange shag carpet, wood panelling and dated fireplace; all very typical to the era of these rec rooms. Those of us who belong to a certain generation, however, can remember when these retro spaces were a big stepup. Finished basements were a relatively new concept. Until the late '50s, basements were typically concrete bunkers that housed mom's laundry and dad's workbench. Throw in a dartboard and - presto - there was your recreation. It's hardly surprising that the first family on the block to get wall-to-wall carpeting and a Formica bar was the envy of the neighbourhood. Oh, how tastes have changed. It's a good lesson to keep in mind when finishing your own basement. As with all design projects, there are two basic approaches: One is to do things the way you really want them, throwing any resale considerations to the wind; the other is to temper your choices to better stand the test of time. There is merit in both, but it's crucial to understand which path you're going down and to recognize that there is a chance you may not entirely recoup your investment. Don't stress. It's safe to assume that finishing a space will bump up your property value. In terms of what you can expect back with a basement renovation, the Appraisal Institute of Canada quotes a range of 50 to 75 per cent. In addition to the increase in property value, finishing a basement can drastically expand your livable space. Take a bungalow for example; it will actually double in size with a finished basement. If your living quarters are feeling a little cramped, it may be worth some serious consideration. Conventional uses of a finished basement include family rooms, entertaining spaces, children's playrooms and exercise areas. Some families may require a fourth bedroom or guest room, which can be a great use of space. A gifted interior designer can help you combine several functions with a natural flow and direct your lighting choices (so important) with a trained eye. Even when the budget is tight, consider springing for a two-hour consultation: An investment this sizable should really have some professional input. One trend making huge strides now is the home theatre, complete with projection television, an elaborate sound system and tiered cinema-style seating. Now this is a great example of a renovation choice that should be made for the joy it will bring today, as opposed to the money it will bring in later. While it can be costly to install, it will ultimately appeal to a more narrow audience - no pun intended. (The Appraisal Institute estimates investment recovery for a home theatre between 25 and 50 per cent). Buyers of pre-construction homes face the same issue but ask themselves a very different question: Should they finish the basement right away or delay? There are decided benefits to having your builder take charge. It's more convenient, it's covered by warranty and the cost can be included in your mortgage. On the other hand, your mortgage may simply not stretch that far. Some buyers choose a middle road, paying the builder to insulate and drywall the exterior walls, with roughed-in electrical and plumbing. This certainly reduces the hassle come renovation time. Owners of older homes often have to contend with issues of moisture, which may require dampproofing, lot regrading and/or addressing drainage issues; the last thing you want is water damage on your beautiful new drywall or flooring. Where older, shallow basements used to be non-contenders for finishing, it's recently become more common to "dig down" in order to provide comfortable head clearance. This can yield incredible results - but the process is most definitely messy and pricey and not for the faint of heart. It's not the kind of project to engage in if you're planning on moving in a few years; rather, it's a commitment to make when you've found your "forever house." For some families, this extra space means the difference between reluctantly leaving the home of their dreams and putting down roots for years to come. October 24, 2011 Garry Marr Financial Post Oct. 22, 2011 Holy crap! That was the reaction from my then-10 year old when I showed him the electricity bill once. We all have a disconnect sometimes from spending to bill paying - my wife still leaves her bedside light on all day and I tend to forget about the plugged-in laptop - but children seem to have no concept of what anything costs. If your children are clueless about your household finances, it's your fault. That's what makes a survey from the Canadian Institute of Chartered Accountants (CICA) so significant. The group, which represents about 78,000 CAs across the country, found 78% of Canadians 16 to 22 years old are familiar with their parents' financial situation. The same survey found 83% believe the knowledge they had of the household finances helped them with their budgeting. It makes sense children mimic their parents. You can find study after study showing the children of smokers are more likely to smoke. Why wouldn't the children of spenders be more likely to spend? "The parents who are the most successful at teaching financial management are those who talk to their teenagers about how they manage the family money," says Nicholas Cheung, director of member services with the CICA. But where do you draw the line? Do you pull out your pay stub and let the kid see how much you make after taxes and deductions? "What is important is to familiarize young people with the family's situation. It opens the doors of conversation and produces a higher level of trust," Mr. Cheung says. You don't have to tell them how much is outstanding on the mortgage but a conversation about having a mortgage and saving to pay off the debt on your house is probably worth having. "The key is to be honest," says Mr. Cheung. "You have to tell them this house is not free." The consequences of not having the conversation can be dire. The same study found 54% of the 1,209 of those surveyed between July 20 and Aug. 2 own a credit card. Incredibly, 22% of those 16 to 22 year olds are carrying a balance this young in life. The accountants believe financial skills need to be taught at a younger age and noted their survey found youth aged 16 to 18 are significantly less likely than those aged 19-22 to have discussed issues like credit card use. "One of the most common mistakes parents are making is delaying talking about specific money skills until children are in their late teens," says Mr. Cheung, who thinks children can learn about finances as soon they start putting money in their piggy banks. Edmonton certified financial planner Al Nagy tells clients there are two kinds of financials lessons - hard money skills and soft money skills. Hard money deals with budgeting and planning while soft money involves things like goals and dreams. "I tell people share the ideas as soon as they are able to grasp the stuff. Money is something to be enjoyed but you have to be responsible with it," says Mr. Nagy, who thinks there are three phases for lessons. He thinks around ages six to 10 you can open a bank for your child, teach them about budgeting from 10 to 16 and after that you can get even more serious issues, even discussing income taxes. But it's also your own actions that will have a major impact on how your children behave financially, Laurie Campbell, executive director of Credit Canada, says. "If you're dressing your kids in OshKosh when they are babies, don't expect them to not have major expectations when they are older," says Ms. Campbell. "If your credit card pops out whenever you see something you want, that's what they see as normal." Ms. Campbell, who deals with some of the worst financial basket cases, says children get a pretty good sense of what is going on in the household and can feel the tension when things are not going well. "I think talk about it no matter what.," she says. "Take them to the grocery store and talk about the cost of food. Kids just think you make money and that's it. Parents have sheltered their children about finances for far too long." October 22, 2011   [OTTAWA – Oct. 19, 2011] – Most Canadians appear satisfied with the way the national economy is performing, and specific personal financial concerns have subsided over the course of the past year, a new Angus Reid Public Opinion poll has found. Personal Financial Concerns   In the online survey of a representative national sample of 1,003 Canadian adults, 63 per cent of respondents say the national economy is in good or very good shape, while 33 per cent say it is in poor or very poor shape. Across the country, the highest level of economic confidence is in Alberta (76%) and the lowest in Atlantic Canada (56%). Since a similar survey conducted in October 2010, the proportion of Canadians who feel the national economy is in good or very good shape has increased by 15 points. More than half of Canadians (53%) rate their own personal financial situation as good or very good, while 45 per cent deem it bad or very bad. Also, while most Canadians (60%) expect the national economy to remain the same over the next six months, 22 per cent of respondents foresee a decline, and 12 per cent expect an improvement.   Personal Financial Concerns The biggest financial issue for Canadians right now is the value of their investments, with 36 per cent of respondents saying they have worried occasionally or frequently about it over the past couple of months. One third of Canadians (32% have worried about the safety or their savings, and three-in-ten (29%) have worried about unemployment affecting the household, while only one-in-five have been concerned about being able to pay the mortgage or rent (20%, down 11 points since October 2010) or their employer running into serious financial trouble (19%). Inflation and Debt Despite the confidence expressed in the domestic economy, Canadians are still expecting to pay higher prices over the next six months, particularly for groceries (81%) and gasoline (80%). Two-in-five (40%) also think real estate will be more expensive, while one third (34%) expect to pay more for a new car, and one-in-five (20%) believe a new television to be more expensive. If Canadians had an extra $1,000 they could use for anything, they would allocate the largest proportion ($360) to paying down debt. The rest of the money would be allocated to savings ($167), covering day-to-day expenses ($160), a holiday ($82), a big purchase such as a car or a home renovation ($81), buying personal gifts or treats ($78), investing in mutual funds ($37), and investing in individual stocks ($35). Analysis Confidence in the Canadian economy has definitely improved over the past two years, when respondents were evenly divided in their assessment. Now, those who think the economy is doing well outnumber the ones who think it is doing badly practically by a 2-to-1 margin. Albertans remain particularly buoyant, but no region is providing a negative assessment of the country’s current economic standing. There is also a slight uptick in the proportion of respondents who feel their personal financial situation is good. The other aspect that shows a shift since October 2010 is the way Canadians feel about specific financial concerns. The proportion of respondents who have worried occasionally or frequently about most of the five issues tested has fallen over the past 12 months, with a double-digit drop on the number of Canadians who are concerned about being able to pay their mortgage or rent. However, while most Canadians expect the economy to remain the same, about one-in-five believe that it will decline—a proportion that is highest in Quebec (27%) and lowest in Alberta (13%). The biggest financial issue for Canadians right now is the value of their investments, with 36 per cent of respondents saying they have worried occasionally or frequently about it over the past couple of months. October 20, 2011 Financial Post · Oct. 19, 2011 | Last Updated: Oct. 19, 2011 10:04 AM ET OTTAWA — A wide gauge of Canada’s economic performance declined in September, after months of relatively flat readings, reflecting weaker performances by the manufacturing sector and the stock market. Statistics Canada said Wednesday its index of leading indicators slipped 0.1% last month during the month, compared to analysts’ expectations for a 0.1% increase. Six of the 10 components of the index managed gains in September, the same amount as August, the federal agency said. “The weakness in the index was concentrated in the stock market and the manufacturing sector, largely offsetting the rebound in the housing sector,”it said in Wednesday’s report. Scotia Capital economists Derek Holt and Karen Cordes Woods said the index “registered a zero print in June well before gloomy talk accelerated, a paltry gain of 0.1 in July, and then another flat print in August.” “Readings like that suggest a sudden sharp loss of forward momentum into Q3-Q4,”they said. Statistics Canada said all three manufacturing components fell in September. New orders were down 0.7%, after 3.4% increases in the previous two months, while shipments of finished goods declined 0.025% and the average hourly workweek fell 0.5%. “While sales rebounded after two straight declines, the ratio of shipments to inventories continued to fall, reflecting rising stocks of finished goods,” it said. The stock index fell 3.5% amid market turmoil caused by global economic uncertainty. Meanwhile, the housing component of the index rose 1.2% in September, the biggest gain since the spring. That helped lift furniture and appliance sales by 0.4%, the agency said. October 19, 2011 By Peggy Mackenzie A recent Direct Energy  survey found that  56 per cent of Ontario homeowners are concerned or angry about their upcoming winter bills. Count me among this group. My Enbridge gas heating bill rose from $1,600 a few years ago to a projected $2,100 for the 2011/2012 heating season, despite the fact that my gas boiler furnace never gets turned on before mid-October and is off by the end of April and we keep the thermostat at 17C.How cold does it have to get before you turn the heat on in your home?Every year, my husband and I see who cries “uncle” first before we bleed the radiators and turn on the furnace. We try to make it to November like my Montreal friend Deborah, but we always fall short. The closest we came was Oct. 24th in our first year as homeowners but that was due more to ignorance than fortitude since we didn’t know how to turn on the furnace. When temperatures plummeted to 5C at the beginning of October, our kids threatened legal action if the heat wasn’t turned on , luckily Thanksgiving rewarded us with balmy temperatures.I stumbled across this blog at the Times Union, which proves that many of us delay putting the heat on in the fall.  The 14-day forecast for Toronto shows temperature highs hovering around the 15C mark so to try and hold out as long as possible my family will be following these non-renovation tips gleaned from myself,  Michael Bluejay (Mr. Electricity) and About.com. We'll still use them when we do turn on the heat: Use space heaters: Heating the whole house is more expensive than heating the rooms you're using. Use ceiling fans: Change the direction to blow the air upwards so it bounces hot air off the ceiling and back into the room. Dress in layers: Now is the time to wear that Icelandic sweater your girlfriend knit you in university. Wear wool socks and pad around in slippers. Put on a hat. Unpack the throw blankets: they’re a stylish accessory for couches and provide warmth for couch potatoes. Oven: Keep the oven door open after baking. Electric blankets: Needless to say, flannel is on our beds, but if I see a good sale on electric blankets I’ll be adding them to the arsenal. Close the fireplace damper: Heat escapes through the damper when the fireplace is not in use. Window coverings: Gain passive solar energy and let the sun shine in during the day; close the curtains at night and keep the cold out. October 18, 2011 Garry Marr, Financial Post · Oct. 17, 2011 Prices for existing homes continued to moderate with September year over year gains the smallest they have been since January, according to the Canadian Real Estate Association. Sales continued to rise up 2.7% in September from August but the Ottawa-based group, which represents about 100 boards across the country, left little doubt about the state of the market. "The national housing market tightened in September from the month before, but remains firmly entrenched in balanced territory," the group said in a release. The average price of a home sold across the country in September was $352,581, a 6.5% jump from a year earlier. Sales for the first nine months of the year are now 1.2% ahead of last year's pace boosted by an 11% gain in September from a year earlier. Toronto led a number of other major markets boosting September sales It was the highest level for national sales since the government tightened mortgage rules again earlier this year. “The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy,” said Gary Morse, CREA president. “Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended." CREA said new listings nationally have changed very little over the last two months but that the figure was affected by an averaging out of markets. New listings rose in Toronto, Montreal, Ottawa, Oakville and Vancouver but were offset by fewer new listings in markets like Edmonton and the Fraser Valley. The group says the nationally the sales-to-new listings ratio was 52.8% in September, up from 51.6% in August, and still considered a balanced market. CREA says almost two-thirds of Canadian markets have a sales-to-new listings ratio of 40% to 60% which is considered balanced. The number of months of inventory, which is based on how long it would take to sell current listings based on the current sales pace, was 6.1 months in September. It was 6.2 months in August. Gregory Klump, chief economist for CREA, noted housing has remained stable in face of market volatility which has contributed to Canadian confidence in the economy. “Interest rates are expected to remain low for longer, and evidence suggests that recent changes to mortgage regulations are preventing the kind of excesses they were designed to avert. Both of these developments are good news for the housing market,” said Mr. Klump. October 17, 2011 National Post Oct. 14, 2011 Richmond Hill for countertops. North York for new doors. Across to Mississauga for appliances. Home improvement projects can disrupt your life at the best of times. The last thing you need is to travel across the city and surroundings for the materials you require for your home renovation - never sure if you're getting the best deal because you're too exhausted to drive any further just to compare prices. Yet, that's exactly what home renovators today do: With thousands of small-to medium-sized home improvement suppliers spread across the greater Toronto area, spending days on the road just to find everything you need is simply part of the home renovation process. But wouldn't it be nice if things were different? If all of those suppliers you needed were in a single location? Wouldn't it save you time and money if you had one destination for all of your home improvement needs? Improve - Canada's largest home improvement centre - promises exactly that, for a more convenient and less time-consuming home renovation experience. Scheduled to open in 2013, it will be the first of its kind in the country: a new model for shoppers looking to find the right supplies and services for their next home improvement project. "This property's going to be marketed as a destination point. It will be a huge drawing card," says Larry B. Purchase, chair of the executive council commercial division of the Toronto Real Estate Board. Most Canadians today live in their own home or apartment. They invest in real estate. And part of that investment means renovating and improving their home so that it feels comfortable to them and increases in value for future buyers. Home renovating might as well be considered a Toronto pastime - approximately 2.5 million GTA homeowners are actively renovating at any given time. The Canada Mortgage and Housing Corporation, in 2009, reported close to $8.7-billion spent on home renovations in Toronto alone, with about $25.8-billion spent across the country. Whether they're in a new home or an old one, homeowners will always find something to improve on or personalize - and as they move on to their next new house, they'll do the same there. And with 100,000 to 150,000 new immigrants coming to the GTA annually, there are always new homeowners with new home improvement needs. Improve will help new and existing homeowners alike, but without the hassle they currently encounter. Consider more than 400 shops all under one roof, and all focused on selling top-quality home improvement and construction products at different price points to service different income groups, and with negotiable delivery terms. Think about small-and medium-sized suppliers, all with approximately 500 square feet to showcase their goods and services, in a central Vaughan location that will spread over 310,000 square feet and 21 acres. Improve will give homeowners exactly what they've been looking for - even if they didn't realize that they were looking for it. Competition will be encouraged so that shoppers will be able to compare products and prices to find the best alternative for their home improvement needs. And there will be restaurants and bars where they can sit and consider their options between showroom visits, as well as meeting rooms and conference halls where suppliers can present new technologies and services. Shoppers can benefit from comparing and contrasting and mixing and matching, without having to get into their car to drive from place to place. It's not only efficient and economical, they'll also get better, more personalized service directly from showroom owners and they will be able to discuss the terms of their purchase with professionals who know their business like no one else. All of the goods will be delivered, so there will be no waiting in line or looking through an overstuffed warehouse to find what you need - and you can negotiate the delivery terms that work for you. "There may be a symbiotic relationship that develops between the various vendors," adds land surveyor Sasa Krcmar, executive director of Krcmar Surveyors Ltd. "And I think there will be a lot of good referrals back and forth. So I think it's almost like being in a renaissance of new thought, where a lot of these people can push each other's products in a way that wasn't maybe thought up before." Improve will be designed to make an impression, too, with architecture from Torplan Consultants Inc. and a design from Montreal-based GHA Design Studios; the award-winning retail design firm has credits that include work at the Promenade Mall, Yorkdale Shopping Centre, Fairview Mall and Bayview Village Shopping Centre. A cross between a shopping mall and an upscale design centre - with all of the benefits of a home show but without the prohibitive costs and inconvenient timing - Improve will be a welcome experience for the whole family. There will be playrooms for the children, lounge areas and beautifully decorated halls and bright windows to enhance the shopping experience. "I often think of a place like Copenhagen, or I think of somewhere in Europe . They've done this and they've done it really, really well. And there's already a format there for it," says Lisa Rogers, designer and TV personality. In fact, home improvement centres have thrived in locations through Europe and Asia. Market research shows the same model will flourish in the Toronto market, too. But Toronto's just the start: Improve is expected to attract national attention. Once the Toronto location is built - and the showrooms are up and operating successfully - the ownership team behind Improve plans on taking the model to major cities throughout the country. For now, though, the focus is on the GTA - and the Vaughan location that will be Improve's new home. Close to Highway 407, Highway 7 and Highway 400 - as well as Steeles Avenue and Keele Street - Improve will be conveniently located for shoppers coming from throughout Toronto and the surrounding areas, with plenty of parking available. The extension of the Spadina line will also bring subway access to Vaughan by 2015; when it does, Improve will run a shuttle bus from the Steeles West subway station to conveniently bring shoppers to its doors. It's the perfect location - one that the Improve team spent a year trying to find. "I think there was some great vision on the part of Improve to come to Vaughan," says planner Mark Emery, president of Weston Consulting Group. "Vaughan is almost the centre of construction and construction supply for the GTA." The City of Vaughan, too, is the perfect partner, supporting the Improve vision from the start. "We always welcome innovation and technology, and a better way of doing things, and I believe this project falls within that category," says Gino Rosati, Vaughan's deputy-mayor and regional councillor. Once it is up and running, more than 1,500 people are expected to visit Improve on a daily basis, taking advantage of suppliers in a range of categories, from flooring and roofing to grills and barbecues, and from hot tub and pool supplies to security systems. There won't be any toy stores or clothing outlets, though - everything will be home-related, targeted specifically to home renovators. And for those renovators who hire designers to take on their home improvement challenges - and pay them by the hour - it's a bonus as well. "Not only would it help me but it will save my client money," Ms. Rogers says. "Because at the end of the day, I can go to one place - it's going to cut my time in half." Improve will be efficient, pricesavvy and convenient - it's a model that's proven effective and will continue to do so in the Toronto market. It promises to improve the home renovation process, and to make homeowners' lives easier at the same time. Frankly, what could be better than that? For more information, visit the Improve website at improvecanada. com. October 14, 2011 By Susan Pigg | Wed Oct 12 2011 For baby boomers, home is turning out to be more than just where the heart is. It’s where the kids are — and seem to have no immediate plans to vacate. Some 17 per cent of Canadian baby boomers are delaying plans to downsize because they need the extra space to accommodate adult children, says TD Canada Trust’s 2011 Boomer Buyers Report. That number is closer to 22 per cent in British Columbia where Vancouver’s hot housing market has pushed the price of even tiny condos into the stratosphere and made living at home the only viable option for many young people. Almost 40 per cent of boomers who plan to retire in the next three years still have a mortgage on their home and 35 per cent say their living expenses are so high, they are unlikely to pay it off before they stop working. But nearly one-third of the more than 1,000 boomers who completed the online survey said they do plan to downsize as part of their retirement strategy. While the TD findings hint at a boom of boomer houses to come onto the market over the next few years, financial planners and retirement experts say they are seeing interesting trends to the contrary. “Downsizing can mean different things to different people,” says Peter Drake, vice president of retirement and economic research for Fidelity Investments Canada which does an annual survey. “There was a time when having debt in retirement used to be a big no-no. But baby boomers have always set their own standards and had big aspirations.” Instead of downsizing, many are buying bigger and better houses, or buying up into more expensive condos with all the modern amenities. And don’t assume all those kids are still living at home because they are forced to, Drake notes, adding that many boomers value the importance of higher education for this generation. “Boomers tend to think of consumption in very broad terms,” says Drake, whose own two grown children lived at home off and on while working on doctorate degrees. In fact, Fidelity’s surveys of boomers who’ve already retired found five per cent tend to spend more — not less — once they’ve left work. A growing number are doing consulting or contract work, as much to keep busy as help pay for exotic trips and fancy homes. ScotiaMcLeod financial planner Rod White was astounded when a client built a 4,000 square foot home with a pool two years after he retired. “He said, we’ve very social and I’ve always wanted a house that I can entertain in. Besides, we use the pool for exercise, not just for sitting around having a glass of wine.” October 13, 2011 "We have seen in the past year some softening in the Canadian housing market, in part due to the tightening of the insured mortgage market rules that we did earlier this year … That's an appropriate result from that tightening," Flaherty said during a news conference. "It will take clear evidence of a bubble in the housing market in Canada, which we have not seen."Flaherty made those comments despite Royal LePage’s finding in its quarterly housing survey released on Wednesday that the average detached home price in Vancouver in the third quarter rose 17% on a year-over-year basis to more than $1 million. That’s three times the national average. The soaring prices in Vancouver have largely been influenced by a flood of foreign money being invested into wealthy neighbourhoods like Richmond, Phil Soper, president and CEO of Royal LePage, said.     Asian investors, who are surrounded by some of the most inflated real estate markets in the world – especially in Hong Kong and Australia – typically see Vancouver’s prices as a bargain. Soper said he believes the Vancouver market will likely soften next year because of slowing domestic demand, but the steady flow of foreign money into the city will likely reduce the amount of overall moderation.“Vancouver is being influenced at the margin by foreign investment. I believe that that is a sustainable scenario,” he told CRE Online. Foreign investors tend to purchase homes in Vancouver with cash. That means they are in no way influenced by the Bank of Canada’s interest rate policy. “So that investment will cushion the downside to the Vancouver market because most of those foreign buyers are purchasing with cash,” he said. October 12, 2011 You can’t read a paper these days without crossing paths with dramatic headlines about economic distress, extreme volatility in the equity markets, and a general feeling of financial malaise brewing in various pockets of the globe. Even the most casual observer can string together with some ease, the relationship between cause and effect, poor economic data, consumer confidence, sluggish spending, and sputtering economic growth. Despite a flurry of analyst dartboard predictions with forecasts for growth and retraction, warnings about rising household debt and warnings about housing market collapse, contrasted with continued growth in the housing market, the real question is, what’s the average homeowner to do- especially when it comes to deciding on a fixed rate over a variable rate? Things We Know While interest rate activity is a bit of a dartboard throwing activity these days, there are certain fundamentals at play, suggesting while we can’t tell exactly in what direction rates are going to go- and when, but we may be able to draw some conclusions from the economic context that is currently present- as well as what we know from history. Historically, data typically shows that variable rates are more attractive over the long term.  According to research from the Bank of Montreal, since 1975, the most cost-effective option for borrowers was to stay variable 83 % of the time. Also, we know that, while Canada has many economic foundations firmly in place, there are an abundance of risks present outside our borders, particularly in the case of the growing sovereign debt crisis overseas, and talk of a US recession on the horizon; there are just simply too many factors present to suggest that a rate hike is anywhere on the horizon. In fact, BMO Economic released a report this week stating that rate hikes in Canada are likely off the table now until 2013. Although employment numbers are good in Canada and the housing market is robust, there has been talk of the possible need for further monetary easing in the coming months, depending on how deeply the impact is felt from the economic trouble brewing elsewhere. Again, this does not tell us the when and the how much for interest rates- nor does it suggest the intrinsic strategic value of choosing to roll the dice with a variable rate over locking in with a  fixed rate- but it helps frame the decision. Trish Pigott, Broker/Owner, Primex Mortgages, in Coquitlam, B.C, says one thing to point out to clients, is that they are currently in a unique win/win situation: “At this point in time, you can’t go wrong with what ever your choice is.  Rates are at historical lows on the fixed side and very close to all time lows on the variable.  Choosing between a fixed and variable is a personal choice depending on the comfort level and risk tolerance for each applicant.” Ally and Partner In turbulent times, there is an opportunity for those in client-centric, relationship based business. People who are fundamentally nervous, seek reassurance and guidance from other rooted in training and experience to help guide them towards making decisions that not only are the best suited for them personally- but are best suited for them in the economic climate which provides context for their financial circumstance.  In times of trouble, people not only seek support- they seek professional partnership.  How to best communicate this to clients, and how to advise them in the current climate.  Julia Krause, Kelowna  B.C. Mortgage Broker, suggests that clearly defining your role as a broker, and as an advisor has a lot to do with sharing your knowledge with your clients- and making them active participants in the process. And with an eye to setting the perimeters for the partnership, Krause throws the concept of ‘advice’ out the window. “I don't give advice. I educate. I help my clients to make an informed decision. We determine what is most important to the client, and what option 'feels' right to them, and go from there. I explain exactly how variable rate and fixed rate mortgages work, how 'split term' mortgages work, how the 'prime rate' works, and how I will keep them informed on what's happening with interest rates & the economy (via my regular newsletter) and that they can call me any time, before during, or after, if they have questions.”   Pigott says that the time is now for her clients to take a good look at their financial picture, before they fully decide what makes most sense for them. “(Clients need) to look at their overall finances. If they can afford a payment increase if the variable rate goes up, and it will not make a significant impact on their household budget then they may want to consider a variable rate” “As well, the ideal variable candidate would have more than 20% equity in their home but if their financial situation is strong enough to handle the fluctuations, then ultimately it’s the client’s decision.  I will do my best to provide them with the facts and details surrounding each product which will help them decide the best fit for their lifestyle and budget.  That being said, I may also recommend a client that is on the fence on what to choose, to take the variable rate with a set payment and remind them that they have the ability to lock in at any time without penalty if they begin to feel uncomfortable.”   The House isn’t just a Home   Although a home functions as shelter, it is often one of the largest assets held in a portfolio- and it is the most leveraged asset usually as well.  It also may be worth having your clients think about their total financial holdings- not just their real estate asset part of their portfolio. It is a well known fact, that diversification is one of the best ways of mitigating against risk, and depending on what their other holdings are in their investment portfolios, including their RRSP’s and non-registered assets they may want to include that in their decision making process- and you may want to suggest to them to consult their financial advisors as well. If a client trying to decide between a fixed rate and a variable rate mortgage is highly invested in risky equities, they may want to consider a fixed rate in order to mitigate against a double hit of a falling stock market- coupled with rising interest rates.  Economic data currently suggests that rates will stay low for the time being, but there are no guarantees. It is important to remember, in this instance that owning a home is not just for purposes of shelter- but that it is an investment- and may be part of a larger pool of investments.  As such, it is sometimes wise to use principles of balance within the portfolio, to balance out net worth. As a mortgage broker, you obviously are not going to advise your clients on other investments, but this goes back to partnership. Home ownership, and interest rate strategy can either help or hurt the total investment value- and it is worthwhile to have your client consult other members of their financial team so that they can make the best decision for them, in the current environment.   Know Your Client   What is comes down to, fundamentally- is knowing your client- and matching the right product to the right person. To draw on historical data, and make a case for either or, really only takes into account the financial implications. What is probably more important, and more impacting on a daily basis for the client- is how much they are going to be thinking about their mortgage rate, when they should be thinking about other things. Krause says, “For me personally, I choose variable rate. But there isn’t one better option for every person across the board. The better option depends on the individual client.  This is why mortgage brokers are supposed to get to know their clients and their clients' individual situations, then educate the client on the options, then decide together what the best option is.  If your mortgage broker isn’t doing this, RUN.  Run away.” And as Pigott points out, a mortgage is for the long term. “It’s all about risk tolerance and comfort level.  For a client that is extremely rate conscious and concerned about fluctuating rates, I would say that they should choose the fixed rate.  When you are taking a mortgage, most people know they are going to have that mortgage for a long time, so stressing over the rate morning and night is not worth it.  Take the fixed rate, give yourself peace of mind.  For clients that have that higher tolerance and are willing to flow with the market and able to financially handle increases, then they would be able to comfortably take the variable rate.  “ Krause, on the other hand, says that ‘risk’ is in the eye of the beholder- or the rate holder as the case may be- and that the risk can be mitigated somewhat : ”Where is the ‘risk’ in having a variable rate mortgage? Variable rate mortgages are about paying as little interest as possible and taking advantage of prime while it's at record low levels. There's nothing wrong with that. But again, as a mortgage broker I’m different. I have actual relationships with my clients. I keep them up to date on what’s happening with interest rates. I won’t allow any ‘risk’.” Fundamentally, you need to compare apples to apples. Looking at historical data, and where rates are coming from, and where they are likely headed- touting the financial benefit to a client is irrelevant.  The volatile environment in which we find ourselves currently, underscores the need to connect with clients, foster that relationship for the long term, and understand where they are coming from to steer them in the right direction.   October 12, 2011 Financial Post Oct. 11, 2011 OTTAWA — Home construction rose more than expected in September, led by multiple-units activity, according to Canada Mortgage and Housing Corp. CMHCsaid Tuesday that housing starts totalled a seasonally adjusted 205,900 units during the month, following an upwardly revised 191,900 units in August. “Housing starts picked up in September due to an increase in multiple starts in the Atlantic region, Quebec and in British Columbia,” said Mathieu Laberge, CMHC’s deputy chief economist. “Multiple housing starts are expected to move back towards levels consistent with demographic fundamentals in the near term.” The seasonally adjusted annual rate of urban starts rose 8% to 185,900 units in September. Multiple-unit urban starts jumped 14.2% to 118,000 units, while urban single-unit construction fell 1.5% to 67,900 units. Rural starts edged up to 20,000 units from 19,700 in August. Economists had forecast overall housing starts of about 190,000 in September. “With single starts declining mildly, multiple starts were the main driver for the increase in home building activity, although this category is widely expected to scale down in the months ahead,” said CIBC World Markets economist Emanuella Enenajor. “The data suggest that residential construction could be a plus for GDP in Q3 as home building continues to garner support from a low rate environment, and a robust multiples market.” Economist Robert Kavcic, at BMO Capital Markets, said the housing market “continues to hold up well in Canada, helped by extremely low interest rates and a solid, though cooling, labour market.” October 11, 2011 dawn walton Calgary— Globe and Mail Update Posted on Monday, October 10, 2011 6:49AM EDT Sometime during the fog of an early morning feeding with my newborn, I remember reading an article in a parenting magazine reminding new mothers and fathers to have life insurance. I didn’t want to think about death while I had a new life snuggled on my lap. But moderate panic set in. My self-employed husband had no coverage and while on maternity leave, I was on a significantly diminished salary. If something happened to him, my daughter and I would be (among other things) in serious financial trouble. As any financial adviser – and the insurance industry – will tell you, the magazine was right. “When you have liabilities and you have a family, you want to make sure that you provide them with some protection should something happen to you,” said Wendy Hope, of Canadian Life and Health Insurance Association Inc., which represents the industry. According to a TD Insurance Risky Business Poll last year, 31 per cent of Canadians said they didn’t have life insurance. Of those, 40 per cent said they didn’t think it was necessary, 23 per cent confessed they probably should have coverage and 23 per cent said they didn’t think they could afford it. The survey of 1,500 adults also noted that another third of Canadians worried that they didn’t have adequate protection under their existing insurance policies. The solution seems straightforward enough; get sufficient coverage. But navigating the world of life insurance where dozens of providers are anxious to sell a variety of products – such as permanent versus term life insurance – is not so simple. And trying to find the money, when you are already struggling to pay down debt and save for retirement, is difficult. It’s little wonder that many people don’t bother. Some financial advisers suggest a coverage rule-of-thumb of five to seven times your net income. But the amount of coverage should be based on individual needs that take into account such things as marital status, dependents, employment status and liabilities. This country’s three largest insurers are Great-West Life, Manulife Financial and Sun Life Financial, but there’s a myriad of other providers, and many have online calculators that will tally items including mortgage, income and investments to spit out a total for suggested coverage. But that’s just a start. Life insurance agents and brokers will help calculate coverage and narrow down the coverage options. And just because you finally settle on a policy, it doesn’t mean your work is done. It should be reviewed periodically, especially when a milestone is reached, such has getting married, buying a house or having a baby. The industry association has posted this online helpful step-by-step guide. “Even though you’re paying for a mortgage or you’re paying for your children’s education, you’ve got all these other outstanding liabilities, you would want to think about the fact that you need – if something should happen to you – to cover those liabilities for your family,” Ms. Hope said. The latest statistics show that at the end of 2010, almost 21 million Canadians had some form of life insurance. Among those, 56 per cent had individual insurance while 44 per cent had group insurance, which includes 61 per cent on groups of employees, 7 per cent was on members of unions and associations, and 32 per cent was on insured individuals who had borrowed from credit agencies such as banks and mortgage brokers. October 11, 2011 Rob Carrick From Thursday's Globe and Mail Posted on Wednesday, October 5, 2011 7:10PM EDT Let’s hope the housing market holds up better than the stock market has. If not, we really have problems. Feeling bummed out about how your registered retirement savings plan or investment account is shrinking in value as stocks plunge? Just wait and see what happens if the housing market slumps. Far more than stocks, a rising housing market makes us feel wealthy and sustains the economy. But the reverse is true, too. “If you want to knock consumer confidence out from under people, just let their largest asset decline in value,” said Ben Rabidoux, who has been crunching data on Canada’s housing market on his blog, The Economic Analyst. Consumer spending accounts for about 64 per cent of our economy, which is to say it’s crucial. And, it’s under pressure. The latest quarterly Consumerology report from ad agency Bensimon Byrne says half of Canadians feel worse off about their personal economic situation than they did a year ago, and they expect to feel worse in a year’s time. Overall confidence levels have fallen by levels not seen since the stock market crash of 2008, the survey found. A reversal of fortune in housing would make things worse. While the risk of a real estate slump shouldn’t be exaggerated, it should be recognized – if only to provide perspective that may help people keep a level head. Comments made about Canada’s housing market on Wednesday were typical of the lack of consensus on what’s ahead. The International Monetary Fund expressed concern about the hot housing market’s role in the build-up of consumer debt in Canada, while Finance Minister Jim Flaherty said the market has cooled somewhat and shows no clear signs of a bubble in prices. While reporting average year-over-year price gains of between 5.7 and 7.8 per cent in the third quarter, realtor Royal LePage said the housing market in some parts of the country is softening and a broader slowdown is expected in the months ahead. And, last week, Bank of Montreal issued a forecast for a “soft landing” in which sales and prices remain steady. BMO summed up housing market supply and demand as follows: Low mortgage rates, relatively low unemployment and strong immigration versus high prices, elevated household debt and slowing employment. Why worry about the possibility that the negatives in the housing market get the upper hand? For answers, let’s consider the wealth effect of a strong housing market. Mr. Rabidoux, an instructor at Georgian College in Owen Sound, Ont., quotes an academic paper that found every $1 rise in the price of a house has an economic impact equivalent to 6 cents’ worth of increased consumer spending. “People go out and buy stuff they wouldn’t otherwise buy if they didn’t feel so wealthy and confident,” he said. “People also feel richer, so they don’t feel the need to immediately save.” Owning a house has been getting progressively more expensive over the years. So how is it that rising house prices feed higher consumer spending? We can thank lines of credit for that, Mr. Rabidoux said. His data indicate that LOC balances increased 95-fold since 1985 while incomes and economic output have tripled. Some of the money has gone into investments, he said. “But there’s no doubt that a good chunk of it has gone to support consumption to finance second cars, vacations or whatever.” In a perverse sort of way, a drop in housing prices might actually be good for the country. Without the housing wealth effect, people might cut back on spending. This in turn would leave more money available for debt reduction and increased saving. This is what’s happening in the United States right now and it’s seen almost as a detox process after years of consumer excess. But the healing process for household balance sheets has been a major drag on growth. Earlier this week, U.S. Federal Reserve chief Ben Bernanke described the economy as “close to faltering,” which is about as bleak as a central banker is likely to get in public statements. Mr. Rabidoux thinks it would be a good thing over the long term if the housing wealth effect lessened and Canadians both saved more and spent less. “But my perspective is that you can’t have that shift without exerting some level of pain in the economy.” Put your own financial security and that of your family ahead of what’s good for the economy. Cut spending and save more as required. If there’s anything left over, do your patriotic duty and buy something.   October 6, 2011   Roma Luciw Globe and Mail Update Published Tuesday, Oct. 04, 2011 8:55AM EDT Last updated Tuesday, Oct. 04, 2011 9:27AM EDT Catherine and her husbandtapped into their first home equity line of credit 15 years ago, when they needed $30,000 to buy a car. The rate on the line of credit was attractive and, having been mortgage-free for a decade, the Thornhill couple figured it would be a quick and easy way to get cash. A few years later, they needed another car, so their bank happily raised the amount to $70,000. Then Catherine unexpectedly lost her job. Fifteen years later, she is working again but earning substantially less. And that line of credit is hovering at just below the max. “We try to put $1,000 in there a month and then we end up taking it right back out,” says the 54-year-old mother of two, who asked to remain anonymous. “The money is just too accessible.” Catherine, who has resigned herself to working past 65, would like to boost their line of credit by another $40,000, use that to pay for the new kitchen she so badly wants and then repackage all of their debt into a mortgage, which they would eliminate through structured monthly payments. Although it might sound excessive, her story is hardly unique. Lured by rock-bottom interest rates, Canadians are taking on record debt. A recent Statistics Canada report showed that household debt rose to a new high in the second quarter of 2011, surpassing levels seen in the United States. And with interest rates set to remain low for the foreseeable future, policy makers are concerned that instead of paying down some of that debt, people will be tempted to borrow even more. According to credit bureau TransUnion, the average Canadian has racked up more than $25,000 in consumer debt, including credit cards, lines of credit, student debt and car loans but excluding mortgages. The bulk of that is made up by lines of credit, which have lower variable rates. (Read their report here.) Chartered accountant and financial author David Trahair, whose new book on debt will hit the shelves next month, says home equity lines of credit are a dangerous trap. Using their house as security, people take out a line of credit, and use it to pay off their credit card debt, instantly reducing the interest rate on the payments to between 3 and 4 per cent from the typical rate of 15 to 20 per cent. “The problem is it takes your eye off … the overall level of the principal of the debt,” Mr. Trahair says. “It convinces people to spend more and more, they don’t change their habits. ... They end up with more combined debt than a person who does not even have a home equity line of credit.” He believes Canadians should ask themselves these six questions before they take on more debt: 1. How much debt do you have? Most people never bother listing the balance on each type of debt, but this is a vital step. You need to know what shape you are in before taking on another dime. 2. Will you be debt-free at retirement? You must aim to retire totally debt-free. That means no consumer debt and no mortgage on your home (if you can afford a home). Here’s how to find out if you’re on track: Take your total family debt today and divide by the number of years to retirement. Say it’s $250,000 and you want to retire in 10 years. That’s $25,000 in principal you’ll have to repay each year. Compare that to your family income. 3. What is the ratio of debt to your family income? The average Canadian household has a debt-to-personal disposable income ratio of 151 per cent. To find your ratio, take your total family debt and divide by your family’s annual after-tax income. If your ratio is below the average you are in a much better position to consider increasing your debt. 4. What type of debt is it? If most of the debt is consumer debt, including credit card balances and lines of credit used to buy consumer goods, 151 per cent would be dangerous. If the debt is just a mortgage to buy the home you live in, you'd probably be in good financial shape. If your debt is mostly consumer debt, that should be a warning to reduce it. 5. What interest rate will you pay? One attribute of bad debt is that it has a higher interest rate than good debt. Credit card debt is especially bad since the interest rate on the revolving balance is often 10 to 20 per cent – or higher. Obviously if you are going to add debt it makes sense to ensure the interest rate is as low as you can get. 6. Will a fixed-rate mortgage protect me? Many Canadians have mortgages and lines of credit at a variable interest rate tied to the prime rate, which is currently 3 per cent. If/when interest rates rise from the almost historical lows of today, the resulting increased monthly payment amounts may be too much for many to handle. Interestingly, credit card debt interest rates are not affected by changes in the prime rate – they charge 20 per cent no matter what. October 4, 2011 Rob McLister, editor of Canadian Mortgage Trends One could wax on about how grim the United States (US) economy is, but Mark Carney put it succinctly: “The (U.S.) housing market remains a mess, the consumer is weak, and government actions can be expected to reduce growth…The U.S. economy is close to stall speed…” That sort of thing puts Canada in a quandary. When the American economy is in the toilet, the Canadian economy is usually on the rim, ready to fall in. The American Federal Reserve (Fed) itself admits that the U.S. is facing "significant downside risks” and 3 out of 4 Canadian exports go to the States. The mortgage-relevance here pertains to how America’s woes affect Canadian interest rates. To answer that, let’s first have a look at the historical policy rate differences between the two countries. Since 2000, when the Bank of Canada (BoC) adopted fixed announcement dates, Canada’s key lending rate has never exceeded 225 basis points above the Fed funds target rate. At the moment, no reputable economist foresees that level being eclipsed anytime soon. The reason: If the BoC got too aggressive it would drive up the loonie and punish economic growth. On the other hand, Carney was clear last Tuesday that, “We do not outsource our monetary policy to the U.S. Federal Reserve.” That means the BoC will raise or cut Canadian rates depending on domestic inflation prospects, not what’s happening south of the border. So where do rates go from here? At this point, the Fed seems almost impotent in its ability to spur the U.S. economy. Its latest adrenaline shot (a $400 billion bond swap) is likely too small and too drawn out to ignite a recovery. U.S. fiscal restructuring and global economic events (including the Eurozone debacle) will ultimately determine the fate of mortgage rates. Just for argument sake though, suppose the Fed maintains the status quo on rates until third quarter 2013 (as it forecast). In that case, Canada will be hard pressed to raise rates extensively. For what it’s worth, here’s what the crystal ball gazers (major economists) are forecasting now: 2012 will see 75 bps of hikes (as per the Big 6 banks’ current published forecasts) The next rate increase will occur in Q3 2012 (according to the latest Reuters dealer poll) 2013 will see rates rise an additional 75 bps (based on the limited number of economic forecasts stretching out that far) Do not bet the barn that these forecasts won’t change. In fact, don’t even bet the rooster wind vane that sits on top of the barn. That said, if economists are remotely accurate this time, the above forecasts represent 150 bps of tightening in the next two years. This implies a 4.50% prime rate by year-end 2013. (The 10-year average of prime is 4.27%.) Based on the above hypothetical and a properly qualified borrower, the mortgage value zone remains in the 3- and 4-year market. Both of these terms are still available at 2.99% or less and they've performed quite well in a variety of our rate simulations. Conversely, if you’re a little more bearish on the economy and want to speculate on fewer rate hikes through 2013, today’s 2-year fixed at 2.49% is tough to beat. Even a surprise BoC rate cut (which OIS traders predict in defiance of economists) leaves the 2-year in okay standing. A prime - 0.45% variable may have the edge if rates drop, but the 2-year fixed guards against inflation risk and rate hike potential in 2013. Moreover, you can potentially early renew your 2-year fixed (or lock in a fixed or variable rate elsewhere) up to six money prior to maturity.  October 3, 2011 John Greenwood, Financial Post · Sept. 27, 2011  Canada's financial regulator is hiking its scrutiny of residential mortgages held by banks, a tacit acknowledgement of the heightened dangers around surging consumer debt. The Office of the Superintendent of Financial Institutions is "stepping in to increase the monitoring" of home loans and lines of credit secured by real estate, said the head of the organization. While recent moves by the federal government to tighten the rules around home loans have helped reduce the growth of mortgage lending, Julie Dickson told reporters in Toronto Monday that the issue remains a significant concern. The comments come a week after the ratings agency Moody's Investors Service Inc. warned in a report that record household loans pose a threat to the Canadian banking system. Indeed it was only the latest in a series of admonitions delivered by observers, including Mark Carney, governor of the Bank of Canada, and Jim Flaherty, the Minister of Finance, going back as far as 2006 when then Bank of Canada governor David Dodge tore a strip of the Canada Mortgage and Housing Corp. for bringing in what he felt were excessively loose mortgage lending rules. Ms. Dickson said she is delivering an "early warning" to the banks about problems that could emerge down the road, and that she is working on the issue in parallel with Messrs. Carney and Flaherty. The Canadian banks have enjoyed surging profits since the financial crisis, partly on the back of their consumer lending operations, which have enjoyed consistent revenue growth largely because of the ongoing low-interest rate environment. The biggest single asset on bank balance sheets are their residential mortgages, about half of which are insured by the Canada Mortgage and Housing Corp. However the worry is that the other half is not protected and in the event to a serious housing market correction, lenders could wind up with losses. Banks "need to keep an eye on" their uninsured mortgages, Ms. Dickson said. In a speech to business leaders the same day, Ms. Dickson said the Financial Stability Board, an international body created by the G20 to promote financial stability, is also looking at mortgage lending in con-nection with an effort to develop principles for safe mortgage lending. A central concern for regulators in both the United States and Canada is that the low-interest-rate environment "has likely increased the incentive for consumers ... to borrow," Ms. Dickson said. "Banks also have an incentive to lend." In the face of intense competition for business, banks are increasingly looking for ways to get an edge over their peers and that could lead to reduced lending standards, she warned. Ms. Dickson advised lenders to "guard against loosening historical underwriting standards" by, for instance, waiving due diligence requirements or lowering the amount of collateral required for loans. Regarding OSFI's participation in the international effort to beef up financial regulations, she said there will likely be a decision to publish a list of so-called too-bigto-fail banks later this year, but that no Canadian banks are likely to make the cut. Currently there are 28 institutions being considered "but the list is not static," she said. Under proposals put forward by the Basel committee on banking supervision, banks identified as being systemically important would be required to hold more capital than their peers, but that plan is attracting fierce opposition from the financial industry where players worry that the move would leave them less competitive. September 28, 2011 Michael Babad Globe and Mail Update Last updated Tuesday, Sep. 27, 2011 10:22AM EDT How housing market faresCanada's resale housing market is slowing, but still outperforming markets in much of the developed world, Bank of Nova Scotia says. Indeed, senior economist Adrienne Warren said in a new report today, Canada, France and Switzerland stood alone among nine markets measured in recording annual price gains, based on second-quarter data. “In the majority of the major markets we track in North America , Europe and Australasia, inflation-adjusted home prices declined on a year-over-year basis in the second quarter of 2011,” Ms. Warren said.“While Canada’s hot housing market also has begun to cool, it remains a notable outperformer.” Scotiabank expects housing demand around around the world to remain "moribund" until the recovery picks up. And, while Canada's real estate market is notable for its "resilience and longevity," a stalled jobs market could still keep some buyers out of the market. "On balance, we anticipate a modest slowdown in the volume of sales transactions heading into year-end, alongside relatively flat prices," Ms. Warren said. Canadian house prices, on average and adjusted for inflation, climbed 5 per cent in the second quarter, according to Scotiabank. That compares to 5 per cent in France and 4 per cent in Switzerland. Prices fell 6 per cent in the United States, 6 per cent in Britain, 10 per cent in Spain, 14 per cent in Ireland, 1 per cent in Sweden, and 6 per cent in Australia. September 27, 2011 Outdoor maintenance took a backseat to summer pleasure at my house. But with fall officially here,  it’s time to clean up my act and the exterior of the house before winter sets in. According to the Canada Mortgage and Housing Corporation (CMHC), fall can be the most gruelling season for your home, and I would add, the owners. Thousands of dollars in repairs can be saved with preventative maintenance, and also energy costs. Here’s my family's maintenance checklist.  Click here to read CMHC’s seasonal checklist. Install storm windows: My 80-year-old dining room storm windows need to keep the weather outside for at least another five years before they’re replaced by patio doors. This weekend they’ll be treated to a light sanding followed by painting. Remove window screens: Over the next few weeks, we’ll be leaning our screens against a tree, spraying them with the garden hose, and then leaving them in the sun to dry. We hoist them into the attic and cover lightly with a used bed sheet to keep dust and heavy objects away. Eavestroughs and downspouts: Make sure leaves and debris are removed from the eavestroughs. We’ve had a sapling grow in our gutters and then experienced the resulting leak in the basement. We’ve learned our lesson and have them cleaned professionally in the fall and the spring including the downspout. As Leslie Anderson of The Gutter Shop, previously told the Toronto Star, "There's no point in cleaning the eaves if your downspout is blocked.” Empty the rain barrel: When the City of Toronto started  disconnecting downspouts from sewers, many homeowners placed a rain barrel at the end of the downspout. Before the first frost comes, drain the water or else the ice may crack the barrel. Weatherstripping: Ensure all windows, doors and skylights shut tightly, including the door between your house and garage; repair or replace weatherstripping, as needed. Covers: Use vinyl covers over the air conditioner, the barbecue, and any outdoor furniture you can’t store inside a garage or shed. Do not store a gas or propane barbecue indoors. Our 8-year-old gas barbecue is used all winter long and the tight cover keeps it well protected even in storms. Drain and store outdoor hoses: Close the valve to the outdoor hose connection and drain the faucet unless you want the water to freeze, crack the water pipe and burst inside your basement. Heating systems: Make sure your gas, oil, or other non-electric heating system, is serviced by a qualified company (every two years for a gas furnace and every year for an oil furnace or in accordance with the manufacturer’s instructions). Radiators and Boilers: Bleed air from the hot water radiators, and turn the gas furnace pilot light on. Chimney or combustion vent: Check for nests or other obstructions before turning on your heating system. We have this checked the same time our gutters are cleaned. If you have a furnace, check and clean or replace filters on a monthly basis during the heating season. Baseboards: Gently vacuum in and around hot water baseboard and electric baseboard heaters to remove dust. Remove the grilles on forced-air heating systems and vacuum inside the ducts. Ensure airflow dampers are open. September 23, 2011 Here's a look at  five trends on the horizon that will affect you in the next year from mortgage rates to food prices.Gas prices to drop   The good news for beleaguered drivers – you’re likely to get a break on prices this fall, according to a gasoline industry analyst. Jason Toews, co-founder of Gasbuddy.com (and its sister site torontogasprices.com), says prices in the Greater Toronto Area have already dropped 9 cents a litre in the last two weeks, and are likely to slide even further over the next two to three months. “It’s mostly supply and demand. In Canada, we tend to drive less in fall and winter because it’s colder,” said Toews, who added that’s not the only reason he expects gas to fall to as low as $1.05 per litre by year’s end. The average price of regular unleaded gasoline in the Greater Toronto Area right now is $1.225 per litre, down from $1.31 per litre two weeks ago. “It’s actually cheaper for them to refine gasoline in the winter than during summer, because the additives they need to put in for winter time are cheaper,” said Toews. He estimates the cheaper production costs alone slash roughly two cents per litre off the pump price. Mortgage rates may rise Variable mortgage rates are already starting to creep up, and fixed rates could soon follow if Wednesday’s higher-than-expected inflation numbers turn out not to be a fluke, says mortgage expert Robert McLister. Canada’s inflation rate hit 3.1 per cent in August, driven by rising food and energy prices, Statistics Canada revealed Wednesday. Even the so-called core inflation rate — which excludes food and energy — hit 1.9 per cent. “Keep your eye on inflation. If the core rate goes above 2 per cent for a couple months in a row, then we’ll start to hear (Bank of Canada governor) Mark Carney talk about cooling things down,” said McLister. Raising interest rates is a tool used by central bankers to slow down an economy, the thinking being that if borrowing becomes more expensive, less money is being spent, resulting in less economic activity. Already, said McLister, the spread between fixed rates and variable rates has dropped to less than one per cent, as banks eliminate much of the discounting they give on variable rates. Home prices to stabalise Housing prices in the Greater Toronto Area won’t be skyrocketing as much over the next few months as they did over the last year or so, says an analyst with the Toronto Real Estate Board. That’s because more houses are being put on the market, according to Jason Mercer. “With the prices having risen the way they did, more people are going to start listing because they think they can take advantage of the prices they’ll get,” said Mercer. If enough people list, that can drive prices down. “There’s no question that it’s been a seller’s market recently, but as more inventory comes onto the market, things will start to become more balanced,” Mercer said. Still, Mercer isn’t expecting prices to be slashed – he just doesn’t think they’re going to rise as quickly. “I still think there’s enough support for some price increases, but it’s not going to be what it has been,” Mercer said. The average price of a home in the Greater Toronto Area was $451,000 in August, up 10 per cent from the same time last year. Food price increases to moderate While food prices rose by four per cent in August (compared to the same period last year), that trend is unlikely to continue, says BMO senior economist Sal Guatieri. That’s because a slumping North American and European economy means lower demand for the commodities — such as wheat, corn and rice — which had been driving food inflation, Guatieri explained. “We see food prices leveling off this year, and perhaps by late next year, even falling,” said Guatieri of BMO’s forecasts. Jobless rate to remain high If you’re among the 7.3 per cent of Canadians out of work, don’t expect things to get much better this fall, cautioned BMO’s Sal Guatieri. “We expect the economy to grow a bit in the second half of the year after shrinking a bit in the second quarter, but it’s not really going to be enough to move the jobless rate,” said Guatieri.  September 22, 2011 Julian Beltrame Ottawa— The Canadian Press Published Wednesday, Sep. 21, 2011 7:07AM EDT Last updated Wednesday, Sep. 21, 2011 10:33AM EDT Inflation in Canada rose above the Bank of Canada's comfort level last month as higher prices for gasoline and food pushed the rate up four notches to 3.1 per cent, Statistics Canada reported Wednesday. The surprisingly strong gain in the cost of consumer goods reverses a recent trend towards more moderate inflation, which had seen the rate fall from 3.7 during May to 2.7 in July. On a month-to-month basis, prices rose 0.3 per cent from July to August. Core or underlying inflation, which excludes volatile items such as energy and some foods, also saw a sizable increase to 1.9 from 1.6 per cent, pushing close to the central bank's two-per-cent target. In a speech Tuesday, Bank of Canada governor Mark Carney said he was not concerned about inflation and would not raise interest rates to deal with the issue. The bank's mandate is to keep consumer prices within a range of one and three per cent, and as close to two as possible. With the global economy entering what the International Monetary Fund called a “new dangerous phase,” most analysts agree that inflation will moderate as demand diminishes. But at the moment Canada is getting the worst of both scenarios, stubbornly high inflation and a slowing economy. Gasoline and food, two items that constitute significant portions of household spending, continue to be big drivers of annual inflation. Gasoline was 22.8 per cent more expensive last month than in August 2010, food cost 4.4 per cent more, and food bought at grocery stores was five per cent higher. “Excluding food and energy, the consumer price index increased 1.5 per cent in August after advancing 1.2 per cent the previous month,” Statistics Canada noted. Passenger vehicles, electricity, homeowners' house and mortgage insurance, telephone service and jewelry also contributed to the increase in annual inflation from July, the agency added. Not all consumer goods and services are rising, however. Mortgage interest costs declined 1.7 per cent, video equipment was down 13.9 per cent, prescribed medicines slipped 3.9 per cent, natural gas one per cent, and digital computing equipment and devices fell 10.4 per cent. Still, prices rose in all eight major components tracked by Statistics Canada, and increased at a faster pace than the previous month in five of those components. Prices also increased at a faster pace for eight of the 10 provinces, with New Brunswick continuing to experience the highest inflation in the country at 4.1 per cent. September 21, 2011 Roma Luciw Globe and Mail Blog Posted on Monday, September 19, 2011 6:40PM EDT A report that showed Canadian household debt levels have topped U.S. ones should be taken with a grain of salt, according to one economist. In a note released Monday, National Bank of Canada’s Matthieu Arseneau says the Canadian government’s indicator on household debt “does not lend itself well to such an international comparison owing to the considerable differences between the social safety nets of the two countries.” At first glance, personal disposable income levels appear much lower in Canada than in the United States. Mr. Arseneau attributes that to higher tax levels in Canada that are used, in part, to fund our national health care system. Americans, meanwhile, must allocate nearly 20 per cent of their personal disposable income to paying for health care, he says. “If we adjust for this factor, the debt ratio of U.S. households exceeds that of their Canadian counterparts by 12 per cent.” A report released last week showed that Canadian household debt rose to a record high in the second quarter, surpassing levels seen in the United States since the start of the year. Statistics Canada said last Tuesday that the ratio of household credit-market debt – which includes mortgages, consumer credit and loans – to personal disposable income climbed to 149 per cent from 147 per cent in the first quarter. That’s the highest level since Statscan started gathering figures in this category in 1990. The government agency attributed the growing debt to higher mortgages and increased consumer credit borrowing. With interest rates slated to remain at low levels for the foreseeable future, Canadians are taking on both mortgages and consumer loans. Policy makers have expressed concerns about high household debt levels and warned against what could happen if rates were to rise. In his note, Mr. Arseneau also noted that the Statscan ratio represents only one facet of the financial health of households. “If we consider the ratio of debt to net worth, which is still markedly higher in the United States, we understand why household deleveraging is ongoing south of the border whereas nothing of the sort is happening in Canada,” he said. Mr. Arseneau concluded his note by warning of the need to be vigilant, because excessive household debt levels “could represent a risk factor for Canada’s economic stability down the road.” September 20, 2011 OTTAWA — Canada’s wholesale sector bounced back in July after a flat performance the previous month, Statistics Canada said Tuesday. Wholesale sales rose 0.8% during the month to $48.2-billion. That follows an unchanged reading in June, which the federal agency revised from a 0.2% gain. “Although five of the seven sub-sectors, representing more than 85% of total sales, reported increases, most of the growth was concentrated in the machinery, equipment and supplies, the personal and household goods, and the motor vehicle and parts subsector,”the agency said. The July wholesale figure was in line with economists’ forecasts. Emanuella Enenajor, an economist at CIBC World Market, said the wholesale report points “to a positive contribution to the month’s GDP — along with an early bounce back in manufacturing activity.” Meanwhile, another Statistics Canada report on Tuesday showed a major barometer of the country’s economic health —the index of leading indicators — was little changed in August. Economists had expected an increase on about 0.2% for the month. “The weakness in the index was concentrated in the housing index and the stock market, both of which fell more than the month before,”the agency said. The agency also revised its July index reading to a 0.1% gain, from a previous estimate of a 0.2% increase. The Canadian economy contracted 0.4% in the second quarter of this year, with much of that decline attributed to supply chain disruptions due mainly to the earthquake and tsunami in Japan. Still, the Bank of Canada said in its most recent monetary policy statement that “growth will resume in the second half of this year.” The central bank has also forecast economic growth in Canada of 2.9% in 2011 and 2.6% in 2012. September 20, 2011 CMHC said the average MLS price will plateau through 2011 to an average of $367,500, and then rise 1.3% to reach $372,400 in 2012.“Despite recent financial uncertainty, factors such as employment, immigration and mortgage rates remain supportive of the Canadian housing sector,” said Mathieu Laberge, deputy chief economist for CMHC.The CMHC report is the latest to predict moderate gains in the market through 2012, but other analysts such as Capital Economics have said Canada’s housing prices will collapse by as much as 25% over the next three years. CMHC’s outlook assumes that mortgage rates will remain relatively flat through 2011 and will start moderately increasing in 2012.Sales of existing homes peaked in the first quarter of 2011 and moderated in the second quarter, said CMHC, remaining close to where they were a year earlier. CMHC revised its national outlook for 2011 housing starts up from 179,500 units to 183,200 in its second quarter report. It forecasts the number will climb in 2012 to 183,900 units. In 2010, there were 189,930 starts.Overall housing starts will be down by the end of this year, according to the report, but the exceptions will be Ontario and Saskatchewan, which will both experience moderate growth. In 2012, Alberta, British Columbia and Manitoba are slated for the most growth in housing starts.Aside from mortgage rates, migration will also be a major factor in the housing market, said the report. Due to an improving economy and better employment opportunities, net migration is forecast to increase to 245,900 in 2011 from 244,644 in 2010, then increase again to 263,350 in 2012.Employment will improve 1.7% nationally in 2011 and 2012, said the CMHC citing Statistics Canada figures. The greatest gains will be in Newfoundland, up 4% in 2011 and 1.5% in 2012, and in Alberta, up 2.8% in 2011 and 2.4% in 2012. The only province to see a decrease in employment in 2011 is New Brunswick, down 1.6% after also decreasing 0.9% in 2010. September 19, 2011 By Sue Pigg | Thu Sep 15 2011 Toronto home sales were up 2 per cent in August over July, outpacing the rest of the country where sales declined 0.5 per cent, according to figures from the Canadian Real Estate Association. Average house prices were down slightly across the GTA in August, to $451,663 from July’s average of $459,122. However, average prices recorded in August were up 10 per cent year-over-year. An easing of demand for high-end homes in both Toronto and Vancouver, which had been putting upward pressure on average prices right across the country, saw average Canadian prices decline to $349,916 in August from $361,181 in July. The average price of a house or condo in Canada was up 7.7 per cent in August from a year ago, said Gregory Klump, CREA’s chief economist. The price of a detached house in Toronto hit a record $648,491 in August — compared to $531,458 in the 905 regions — largely because of a shortage of listings. But prices are expected to ease somewhat as more houses come on the market over the next few weeks. There were a record number of balanced markets across Canada in August, which included the GTA, said Klump. That means there was, for the most part, a healthy ratio of homes for sale to people looking to buy. While Toronto’s spring market was unusually hot, fuelling bidding wars and double-digit price increases, those are expected to ease back into the low- or mid-single digit range going into 2012, said Jason Mercer, the Toronto Real Estate Board’s senior manager of market analysis. “Looking ahead, less favourable economic fundamentals and heightened financial uncertainty are likely to take more wind out of the market’s sails,” said TD Economics housing analyst Francis Fong. He expects the market to continue to “oscillate alongside the rest of the economy” until the end of 2012, and predicts house prices could drop about 10 per cent from current levels when interest rates eventually start to rise, likely in early 2013, said Fong. Some 324,030 homes have changed hands in Canada so far this year via MLS, according to CREA. “This bumpy ride that the global economy and financial markets are on is good for the continuation of low interest rates and low interest rates are good for the housing market,” said Klump. September 16, 2011 Terry Campbell Financial Post Sept. 15, 2011 With the increased global economic uncertainty, stockmarket volatility resulting from sovereign-debt risks, notably in Europe, and headlines here at home about the housing market, Canadians are once again looking closely at the soundness of the country's financial system. For the fourth year in a row, Canada's banks have been ranked the soundest in the world by the World Economic Forum, but can that position of strength be maintained as banks face numerous international regulatory challenges and additional economic uncertainty? These are questions that bank executives and bank regulators ask themselves every day. Let's remind ourselves of a few key facts that are just as important today as they were in the dark days of the global financial crisis three years ago. Our banks are well-positioned to deal with emerging challenges because of the structure of our banking system and because banks in Canada are well-managed, well-capitalized and well-regulated. The national structure of our banking system, with the largest banks operating in all provinces and territories across the country, makes them less susceptible to local economic fluctuations. For example, loans in one economic sector that is doing well offset loans to another sector that may be struggling. This system greatly contributes to our banks' ability to weather economic downturns in different sectors and regions of the country. Many of our banks are also highly diversified organizations that combine retail, commercial and investment banks in one financial group, allowing them to offset weaker growth from one area of the bank with stronger growth from another. Canada's financial system has also benefited from a streamlined regulatory system. Unlike some other countries with a wide array of different regulators, banks in Canada have two primary regulators: the Office of the Superintendent of Financial Institutions (OSFI) for prudential regulation and the Financial Consumer Agency of Canada (FCAC) for consumer matters. The efficiency of this system means banks and regulators are in constant communication, which helps ensure our financial system is prepared for any challenges that may arise. The true strength of the country's financial system, however, lies in the sound management of our banks. Mortgages represent a significant portion of bank loans and banks in Canada have always been prudent mortgage lenders. This is one of the main reasons they avoided the financial difficulties that banks in the United States experienced over the past three years. In contrast to the United States, the Canadian banking model is one in which mortgages are originated to stay on the bank balance sheet, which is an incentive to lend prudently. The effectiveness of this approach is evident when looking at mortgage-inarrears statistics in Canada - for the country's largest banks, less than half of 1% of all mortgage-holders have gone more than three months without making a payment. This number has remained well below levels in the United States and the U.K. and has been stable for more than two decades, in times of high and low unemployment, high and low interest rates and a strong or weak Canadian dollar. Our banks lend carefully and their customers make payments regularly. The banks' prudent management is also evident when looking at their capital levels; the amount of money they maintain on hand to cushion against potential financial shocks. Before the global financial crisis, during the crisis and still today, banks in Canada are some of the best-capitalized banks in the world. Among Canada's largest six banks, levels of the most secure capital, known as Tier 1 capital, stand at more than three times what is required by current global standards and close to double the standard set by OSFI. There were lessons for everyone in the last global financial crisis and there is a widespread recognition that reforms to the world's financial system are needed. Here at home, banks have worked closely with the federal government to develop new rules around mortgage lending to ensure that the market remains strong and that Canadians continue to take on affordable mortgages. On the global stage, Canadian banks, along with the Bank of Canada, OSFI and Finance Minister Jim Flaherty, have been actively involved in addressing the fallout from the financial crisis, including working to influence the form of the new capital and liquidity standards collectively known as Basel III. While Canada's economy continues to recover, we can't forget that Canada's banks are well-managed, well-capitalized institutions and are operating within a well-regulated and secure financial system. Banks are also closely monitoring economic and financial conditions at home and abroad and taking steps to ensure that they can absorb the next challenges and possible shocks that come their way. It is the prudent thing to do. September 15, 2011 Jonathan Chevreau Financial Post Sept. 14, 2011 10:17 AM ET Canadians still don't seem to be getting the message about carrying excessive household debt. On Tuesday, Statistics Canada reported the ratio of household credit-market debt to personal disposable income inched up from 147% in the first quarter to 149% in the second. Household credit-market debt includes consumer credit, mortgages, loan debts of households, non-profit institutions serving households and unincorporated businesses. The higher ratio indicates debt levels are growing faster than the growth in personal disposable income. Despite warnings by policymakers about taking on too much debt, households continue to take advantage of historically low interest rates to take on more mortgages and consumer loans. Until this summer, the general feeling was interest rates were near to bottoming, prompting warnings that interest rates could only rise. But the troubles in Europe and the United States, coupled with a scary stock-market correction in August, have pushed back the expected inflection point when rates would bottom. When the U.S. Federal Reserve announced it would keep rates low for at least two more years, that quashed expectations the Bank of Canada would soon boost rates. The latter warned earlier this year that the number of Canadians vulnerable to an adverse economic shock had risen to its highest level in nine years. Statscan said per capita household net worth fell for the first time in a year to $184,300 from $185,500 in the first quarter. This 0.3% drop occurred in spite of rising home prices and was caused by a drop in stock prices and equity mutual funds, whether held in pension plans or individual retirement accounts. (The S&P/TSX composite index fell 5.9% in the quarter). At the Toronto edition of the MoneyShow last week, TD deputy chief economist Derek Burleton warned we are in a "balance-sheet recession that will take years to shake off." As a result, Burleton said, interest rates will stay "very low for a long time." At the same show, Danielle Park, of Barrie, Ont.-based Venable Park Investment Counsel Inc., told attendees to "keep your powder dry, pay off debt and use these record low interest rates to get debt free and downsize real estate sooner than later, where necessary: Canada has gone on longer than it ought to have in this cycle." In his new book, The Wealthy Barber Returns, David Chilton warns against both the dangers of saving too little and taking on too much debt. Chilton sees it as just a matter of time before interest rates start rising. "We're not going to be living in an easy-credit environment forever," he writes, "At 3%, all this borrowing is manageable. At 7%, it's tough. At 11%, buy some canned goods and head for the basement - we're in big trouble." Of course, the rates-risingsoon scenario assumes some element of economic recovery. But it's by no means certain that developed economies like North America won't succumb instead to the kind of deflation Japan has suffered from for two long decades. That's the gist of recently published books like Gary Shilling's The Age of Deleveraging or John Mauldin's Endgame. Inflation helps debtors, whether governments or individuals, but deflation makes it that much tougher to get out of the hole. Worse, in a deflationary environment, there's a bigger possibility of job loss, which makes debt servicing that much more problematic. As the old joke runs, it's a recession when your neighbour loses his job. It's a depression when YOU lose your job. I agree with Park and Chilton. Make hay while the sun shines: the time to cut debt is while you're still working and interest rates are low. It's easier to reduce mortgage principal when rates are low and more of your payments are going to principal, rather than interest. If you're considering buying a home, don't view low rates as an opportunity to get "more" house. View it as a chance to get a modest home you can own free and clear as soon as possible. If and when interest rates do rise, you want to be on the receiving end of payments (as a bond holder), not on the dishing-it out end. September 14, 2011 September 13, 2011 By Krystal Yee Life insurance isn’t something that most 20-somethings spend time thinking about as they enter the work force, buy first homes and start to settle down into a routine. In fact, most 20-somethings probably think they are invincible – and that's a huge reason to think about buying life insurance. Nobody wants to think about their own mortality, especially while young and healthy. But the best way to ensure that you can get the right kind of coverage when you need it, is to buy it when you don’t. The earlier in life you buy your life insurance, the cheaper it will be. Here are four reasons why you would want life insurance in your 20’s: 1. You have debt. If you get into an accident tomorrow ad are seriously injured, who will pay your mortgage if you can't work? What about the $30,000 in student loans, or your credit card debt? Your parents or someone in your family will be left to take care of those expenses. Life insurance protects you from becoming a financial burden. 2. You have children. If you are a single parent, or if you have a loved one who is dependent on your income, taking out a life insurance policy will cover the future expense of your children’s college education. 3. You have dependents. A dependent could be a family member, a partner, or anyone who is dependent on your income – or who will be dependent on your income in the future. If your income vanishes, will your dependents be able to save and retire on their own? 4. Life insurance is cheaper when you’re younger. You can’t beat the life insurance rates you can get when you’re in your 20’s.  And if you wait until you actually need life insurance? Well, that’s the worst time to buy.  Buying early in life, when you are still healthy, will allow you to lock into affordable premiums for decades. When you have decided to purchase life insurance, the next step is to determine how much coverage you’ll need. Take into consideration expenses such as a funeral, end-of-life medical expenses, living expenses and future education costs for your dependents, as well as any debt you might carry – such as mortgage, vehicle, student loans, credit cards, etc. In a past Moneyville article, Paul Russell, a writer with a background as a pensions lawyer, says that a good rule of thumb to determine how much coverage to purchase is: your family debt + $20,000 for funeral and taxes + $60,000 per child for education + 20 times the annual income you want to replace. Make sure to check out Moneyville’s life insurance calculator as well. If you are covered by life insurance through your extended health package at work, take the time to check and see how much your employer’s insurance provides, and calculate whether that amount is sufficient enough to cover your debts and support your family after you are gone. We spend money each year insuring our homes, our cars, and our possessions – it only makes sense we take the time and effort to insure our lives as well. Do you own a life insurance policy? September 13, 2011 Published on September 12, 2011 The Canadian Press The bank reduced its forecast for the Canadian economy after a "mild contraction" in the second quarter and softer growth in the U.S. and eurozone economies. Chief economist Craig Wright said financial market volatility took a toll on business and consumer confidence this summer. However, he expects the global economy will avert another downturn despite the slide of late in the equity markets and in commodity prices. RBC Economics has cut its U.S. growth projection by one percentage point to 1.7 per cent for 2011. Wright said that RBC is "cautiously optimistic" that Canada's economy will grow by 2.5 per cent next year, matching the bank's forecast for the United States. Saskatchewan is expected to lead the way in terms of economic growth this year, with Alberta and Newfoundland and Labrador following closely behind. Manitoba is projected to improve in 2011, while Ontario, British Columbia and Prince Edward Island will dip slightly below the national average, RBC added. Quebec, along with New Brunswick and Nova Scotia, will trail, RBC predicts. The Bank of Canada is expected to follow the U.S. Federal Reserve's lead and keep interest rates low. The key lending rate is expected to remain at one per cent until mid-2012, the report said, adding that lower commodity prices should help reduce Canada's inflation rate to within the central bank's target range of two per cent. Meanwhile, the bank says Canada has recovered the jobs lost during the recession. As of August, 164,000 more people were employed, with the gain concentrated in full-time jobs. The business investment cycle is also on the upswing in Canada, growing at double digit rates throughout 2010 and the first half of this year, RBC said. Businesses have cash available due to improved profits and better access to financing. And the strong Canadian dollar has also provided support for increased investment. September 12, 2011 Financial Post · Sept. 9, 2011 | Last Updated: Sept. 9, 2011 12:05 PM ET OTTAWA — Canadian housing starts declined more than expected last month, Canada Mortgage and Housing Corp. said Friday. There was an annual rate of 184,700 homes for which work began on in August, the federal housing agency said. That was down 9.7% from 204,500 in July, which was revised down slightly from the previously reported 205,100. Economists polled by Bloomberg expected a housing-start rate of 200,000 last month. “Housing starts in August were in line with current demographic fundamentals and are consistent with CMHC’s recent housing market outlook,” Mathieu Laberge, deputy chief economist at CMHC’s market analysis centre, said in a statement. In urban areas, housing starts were down 10.2% to 165,800. That included a 15.5% decline in multiple-housing starts and 0.3% decline in singles. Rural starts were down 5% to 18,900 in August. September 12, 2011 However, a much larger decline in the labour force meant the unemployment rate fell to 5.2 per cent, down from 5.5 per cent the month before. Jobs are measured on a three-month moving average basis. The participation rate in the local labour force also slid to 71 per cent from 71.3 per cent in July. Ottawa lost around 1,600 jobs in July after adding around 2,600 jobs in June. However, Statistics Canada notes it only considers a local job loss or gain of 3,700 jobs to be significant. The last that happened was in September 2010, when the region lost 4,000 jobs. Nationally, Canada lost jobs for the first time in nearly half a year as unemployment increased to 7.3 per cent in August, up 0.1 percentage points. The country shed 5,500 positions. Economy consensus pegged a job gain of 25,000 in the education sector as students returned to school, but the largest increases came in health and social assistance. Full-time employment across the country increased by 25,700 and part-time work declined by 31,200. – With files from The Canadian Press September 9, 2011 Mortgage Brokers Ottawa is pleased to sponsor The Bear's latest promotion, "Locked and Loaded".  We were happy to host the Bear on location at our Island Park office today as part of the contest. To learn more about how you can win visit www.thebear.fm   September 7, 2011 OTTAWA — The Bank of Canada on Wednesday kept its key lending rate on hold but warned the slowing global economy and growing financial uncertainty means monetary stimulus will need to continue for the time being.  The central bank said the European debt crisis "has intensified" and financial market volatility "has increased sharply" amid slower global economic growth.  "Reflecting all these factors, the bank has decided to maintain the target for the overnight rate at one per cent," it said in a statement.  Many economists have now ruled out a move on rates until the second quarter of 2012 or even later.  "In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished. The bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risk, and set monetary policy consistent with achieving the (bank's) two per cent inflation target over the medium term."  The Canadian economy contracted by 0.4 per cent in the second quarter of this year, which the Bank of Canada said was "largely due to temporary factors."  During an appearance last month before the House of Commons finance committee, Bank of Canada head Mark Carney acknowledged the economy was slowing but said he did not expect that to lead to a recession.  He also said it was unlikely that Europe and the United States would see a major economic downturn.  The bank had earlier projected growth of 2.9 per cent in 2011 and 2.6 per cent in 2012.  On Wednesday, the central bank said that although the Canadian economy stalled in the second quarter, it still expects "growth will resume in the second half of this year."  That growth will be led by business investment and household spending, "although lower wealth and incomes will likely moderate the pace of investment and consumption growth," the bank said.  It said financial conditions in Canada have "tightened somewhat and could tighten further" if global financial conditions "continue to deteriorate."  Also, the bank said Canadian exports are "expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar." September 7, 2011 Ottawa, Ontario - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economic outlook has deteriorated in recent weeks as several downside risks to the projection in the Bank’s July Monetary Policy Report (MPR) have been realized. The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported. In combination with recent economic data, this implies that U.S. growth will be weaker than previously anticipated. The Bank expects that American household spending will be even more subdued in the face of high personal debt burdens, large declines in wealth and tough labour market conditions. Fiscal stimulus in the United States will also soon turn into material fiscal drag. Acute fiscal and financial strains in Europe have triggered a generalized retrenchment from risk-taking and could prompt more severe dislocations in global financial markets. Resolution of these strains will require additional significant initiatives by European authorities. Growth in emerging-market economies has been robust, although its rate and composition will be affected by weakness in major advanced economies. While commodity prices have declined owing to diminished global growth prospects, they remain relatively high. Largely due to temporary factors, Canadian economic growth stalled in the second quarter. The Bank continues to expect that growth will resume in the second half of this year, led by business investment and household expenditures, although lower wealth and incomes will likely moderate the pace of investment and consumption growth. The supply and price of credit to businesses and households remain very stimulative. However, financial conditions in Canada have tightened somewhat and could tighten further in the event that global financial conditions continue to deteriorate. Net exports are now expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar. Slower global economic momentum will dampen domestic resource utilization and inflationary pressures. The Bank expects total CPI inflation to continue to moderate as temporary factors, such as significantly higher food and energy prices, unwind. Core inflation is expected to remain well-contained as labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished. The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2 per cent inflation target over the medium term. September 7, 2011  By Sheryl Smolkin A friend of mine recently told me about a break- in at her home. The front door was smashed off the frame and all her jewellery was stolen. The loss of heirloom pieces that had belonged to her mother was devastating.As a result, she installed an expensive burglar alarm system including cameras at both the front and the back of the house.While Statistics Canada reports that alarm systems and motion detectors have led to a steady reduction in home break-ins in recent years, they may not deter a determined thief. They should be combined with other measures that help keep burglars from finding your home an attractive target.Here are some things you can do at little or no cost:1.    Take your name off your mailbox: This will prevent thieves from calling 411 to get your phone number. Many thieves will call a house they are planning to rob first to see if you are home.2.    Never leave a note on the door: If you are going out and expect a delivery, resist the temptation to leave a note on the door asking the post office to leave the package with your neighbour.3.    Stop mail or newspapers: Before you go on vacation, stop mail and newspapers. Even if you leave town for a weekend, have a neighbour pick up these items plus unsolicited fliers.4.    Get a yappy dog: Dogs are not free, but if you have one that barks when people come to the door, pay attention. He may know something you do not. Even the most affectionate puppy like mine can scare away bad guys.5.    Prune trees or shrubs: If you have verdant greenery close to the house, tame it regularly so burglars do not have a place to hide.6.    Hide you spare key carefully: A key left under the door mat, on the ledge over the door or under a flower pot is an “open door” invitation to a dishonest person. Be more creative, or leave it with a neighbour.7.    Doors and windows: Always lock doors and windows and change the locks if you move into a new home or lose the key. Combination locks are becoming more popular because it is easier to change the code than replacing the whole lock. Put security bars on basement windows and secure sliding doors with a stick or a metal bar.8.    Don’t leave valuables in the open: If a thief can see valuables like art, electronics, jewellery or silver through a door or window, you could become a target. Consider a bolted down, fireproof safe.9.    Make the house look lived in: Have the grass cut and the driveway shovelled when you are away. Keep a car in the driveway. Use timers on lights, radios and TVs. Don’t put a message on your voice mail announcing your absence.10.    Put neighbours on alert: Let your neighbours know how long you will be away and if someone is coming to feed the cat. Make sure they have a way to contact you in case they see something strange happening around your home.11.    Don’t widely advertise your plans: Never mention you are going to be away to strangers or tweet your plans to all of your 10,000 followers.12.     Hire a house-sitter: Getting a friend to house-sit while you are away is a great way to keep your house safe from burglars. And if you have pets that need care, in-house care for them could be an added bonus.Desperate, dishonest people are hard to deter. But they may also take the path of least resistance. With a little preparation, you may be able to prevent that path from leading to your front door. September 6, 2011 Nancy Woods Globe and Mail Update Published Thursday, Sep. 01, 2011 1:43PM EDT Dear Nancy, I’m wondering what your view is right now on new mortgages - whether fixed or variable is the way to go. Studies I have read suggest variable has historically been the better deal long term. But with fixed mortgage rates so low right now, isn’t it better to lock it in for five or more years? Thanks, David   Dear David, It is true that variable-rate mortgages can have lower overall interest costs in the long run than fixed-term mortgages. What you need to assess is how are you able to financially cope if your mortgage payment increases substantially? I would have you plan with the assumption of having a fixed-rate mortgage and see if it is financially manageable. If so, then get the variable mortgage and make the fixed rate payments. Don’t just budget with the current rates of your mortgage payment. If you are worried about interest rates rising drastically, and you are looking for piece of mind, then the fixed rate may be the way to go. I would like to point out that the variable-rate mortgages are based on the bank rate, which reflects short-term interest rates. Fixed mortgages are based on longer-term bond rates. If you are contemplating a five-year fixed rate mortgage, be aware of the trends of the bond yields and interest rate curve rather than focusing on the bank rate. Many people confuse the two. There are a number of financial institutions that will let you choose a combination of fixed and variable portions of your mortgage. With that, you could have a portion of your mortgage with a variable rate, and another portion that is fixed. You'd have the flexibility to pay down whichever portion at any particular time carries the higher interest rates, should you want to pay off your mortgage faster. September 2, 2011 John Greenwood, Financial Post · Sept. 1, 2011 | Last Updated: Sept. 1, 2011 10:02 AM ET Despite repeated warnings that that they are borrowing too much money, Canadian consumers continue to rack up debt at a quick clip.   That’s one of the main conclusions to be drawn from the most recent results from the domestic banks. Despite headwinds in capital markets and other areas, the big banks all benefitted from higher consumer loan volumes, especially in residential real estate.   Colleen Johnston, chief financial officer of Toronto-Dominion Bank, said she’s confident that TD won’t get caught out in the event of a rise in interest rates because even though TD has one of the biggest consumer loan portfolios, its customers are prudent borrowers.   “We are comfortable with the lending we are doing,” Ms. Johnston said in an interview. While interest rates will likely rise in the next couple of years resulting in “some stress” among households in this country, she said TD’s customers are better prepared than the average consumer.   The comments come as Canada’s second biggest bank posted a 23% jump in third quarter profit on the back of higher loan volumes including an 8% increase in domestic residential mortgages.   Back in the spring, Jim Flaherty, the federal finance minister, tightened up mortgage lending rules as a way to slow the level of mortgage borrowing by Canadians. Recent evidence suggests the changes are having some effect on certain parts of the mortgage market but as a whole it continues to grow.   According to Statistics Canada, the ratio of household debt to income is at the highest level ever. Mr. Flaherty’s action on mortgage rules came after Mark Carney, the governor of the Bank of Canaada, warned that the high level of consumer borrowing had left the broader financial system vulnerable. September 1, 2011 Tavia Grant Globe and Mail Update Published Wednesday, Aug. 31, 2011 8:47AM EDT Last updated Wednesday, Aug. 31, 2011 10:19AM EDT The Canadian economy shrank 0.4 per cent in the second quarter of the year, the first contraction since the recession, as supply disruptions slammed exports. The country’s gross domestic product registered a sharp slowdown in the April to June period after a revised 3.6-per-cent reading in the first quarter of the year, Statistics Canada said Wednesday. The slump reflects a number of temporary factors, as wildfires in northern Alberta and maintenance shutdowns sliced oil productions and Japan’s tsunami caused supply disruptions. Details of the report – which show activity picked up at the end of the quarter – suggest Canada will not fall back into a recession, economists said. “While the headline number is disappointing, the details of the report are more upbeat, and do not signal a recession,” said Diana Petramala, economist at Toronto Dominion Bank. “Look for a better third quarter,” said Jennifer Lee, senior economist at BMO Nesbitt Burns in a note. The report comes after both Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney sought to reassure Canadians earlier this month, saying Canada will likely avert any recession, and that they are prepared to act if they are wrong. At a news conference Wednesday, Mr. Flaherty described the reading as a “pause” and repeated he sees modest growth for the rest of the year. “The Canadian economy is still very fragile,” Mr. Flaherty said in Toronto, although the “fiscal fundamentals in this country are good.” Domestic demand remains strong, with robust business investment and solid consumption, he added. The economy expanded 0.2 per cent in June, which economists took as an encouraging sign that activity picked up in the third quarter. Economists had been expecting a flat reading for the quarter and a 0.1-per-cent increase in June. The second quarter contraction is the first time the economy shrank since the second quarter of 2009. The weak reading suggests the central bank will not raise interest rates at its meeting next week. “BoC rate hikes should be off the table for the foreseeable future,” said Jonathan Basile, director of economics of Credit Suisse. Oil and gas extraction tumbled 3.6 per cent in the quarter due to disruptions of petroleum production. Manufacturing output fell 0.9 per cent as auto and auto parts production was hurt by Japan’s woes. Still, business investment in plant and equipment rose 3.7 per cent in the quarter, a sixth straight quarterly increase. Government spending rose, along with consumer spending. August 31, 2011 By Krystal Yee A home is most likely going to be the most expensive purchase of your life, yet according to a recent 2011 Canadian Mortgage and Housing Corporation survey, only 48 per cent of first-time home buyers choose to use a mortgage broker to help them navigate through the financial aspect of the home buying process. A mortgage broker acts as a liaison between lenders and borrowers in order to provide you (the borrower) with the best available terms and rates. They will do all of the paperwork for you, and will usually work with dozens of lenders in order to secure the financing options for you. When I started the home buying process earlier this year, I knew I was going to use a mortgage broker to help me secure financing on my first home. Here’s why: A mortgage broker saves time and money As a first-time home buyer, the most important advantage of a mortgage broker is their ability to approach and network with various lending institutions to try and secure the best terms and rates for you. Scott Dawson, a mortgage broker for Verico Paragon Pacific Mortgages, suggests that a good broker can also be a consistent person of contact throughout the sometimes confusing home buying process. “If a first-time buyer is going through the process alone, and going from bank to bank looking for the best rates, not only is it wasting their time, but they also won’t get the same level of service as they would by working with just one individual,” he said. Not only is it easier to deal with one person as your point of contact regarding everything related to your financing, but if you are buying your first property, you will likely have a lot of questions to ask. “You will want to find a mortgage broker that is willing to spend the time educating first-time buyers along the way,” Dawson said. “Additionally, brokers work outside of normal banking hours, so it’s convenient for clients to get a hold of us.” The service is free for borrowers Mortgage brokers work for you, and their service is completely free. So instead of charging you a fee, they are paid a commission from the lender once they close a deal. A broker’s commission can vary, depending on the type of mortgage you choose. For example, fixed terms typically pay more commission than variable terms, and brokers that bring in more business to lenders could receive additional bonuses. Your credit rating is protected A mortgage broker will only pull your credit report one time, and use it for all of the lenders. Whereas, if you went shopping for rates yourself, chances are that each lender would pull their own copy of your credit score. This can negatively impact your credit score in a hurry! When choosing a mortgage broker, it is important to work with somebody that you can trust. Don’t be shy asking as many questions as you want, or speaking with several different brokers until you find one that fits your personality. August 30, 2011 Tara Perkins Globe and Mail Update Last updated Monday, Aug. 29, 2011 11:02AM EDT Canada Mortgage and Housing Corp. says that it has seen mortgage refinance activity drop nearly 40 per cent since Ottawa brought in new rules. The crown corporation, which must now issue quarterly financial results as a result of a new law, issued its second-quarter results on Monday and they include insight into how Canada’s housing industry is faring. CMHC said that refinance activity fell by almost 40 per cent and has continued to remain around that level since Finance Minister Jim Flaherty made changes to the mortgage insurance rules earlier this year. One of those rules was to reduce the maximum amount that Canadians can borrow in refinancing their mortgages from 90 per cent to 85 per cent of the value of their homes. That rule kicked in on March 18. Among the other rule changes, Mr. Flaherty cut the maximum term of new mortgages where the home-buyer’s down-payment was less than 20 per cent from 35 years to 30 years. CMHC said Monday that after the rules took effect purchases of CMHC homeowner mortgage insurance initially fell by about 10 per cent, and by the end of June was still about five per cent below the level of sales before the rule changes. But CMHC’s profits still rose by $61-million or 19 per cent, to $383-million, for the three months ended June 30 thanks to earnings from mortgage-backed securities, gains from selling financial instruments, and lower expenses. August 29, 2011 OTTAWA — When Ian and Wendy Jackson moved into an adult-lifestyle bungalow in April they were thinking future tense. Both 62, they are still in good health and working. But they also know that in 10 or 15 years they won’t be as spry. Anything from creaky hips to being dependent on a walker is possible. Staying in their large, single home would have, sooner or later, become impractical. So they moved into Larco Homes’ upscale Solera community near Hunt Club and Albion roads (larcohomes.com), where their bungalow includes design features like an open concept and extra-wide doorways that mean even a wheelchair won’t present a major problem. “We were looking ahead, getting the moving-and-settling-in done now,” says Ian. Adds Wendy, “We didn’t want our children to worry about us. We wanted to be self-sufficient. And we can totally live on this one level. There’s a second bedroom we can use as a den, and the laundry room is on this level.” The Jacksons, who felt a condo or apartment wouldn’t be large enough to accommodate overnight visits from their grandchildren, have decided to be proactive about staying in their own home as they age, a concept known as aging in place or aging at home. It’s an example the rest of us boomers who are still tooling around our two-storey, maintenance-heavy houses would be wise to heed. But there are two main problems: Many boomers are in denial about their greying hair, and home builders for the most part haven’t yet clambered on the aging-in-place bandwagon. “No one wants to think about getting older, about (it) being harder to get around,” says Scott Puddicombe, owner of Puddicombe Access Solutions in Ottawa (puddicombeaccess.ca). He employs principals of universal design, ideas like easy-to-grasp lever handles, walk-in showers with no thresholds, and wheelchair- and walker-friendly entrances to create homes where anyone with a physical limitation can live more easily. Whether we want to think about it or not, the reality is that more of us than ever can look forward to age-related physical hurdles. According to a 2006 study from Statistics Canada, the number of Canadians over age 65 will double by 2036, increasing seniors’ share of the population from 13.2 per cent to 24.5 per cent. The Canadian Association of Gerontology says that the majority of aging Canadians want to stay in their own homes. Programs like Ontario’s Aging at Home Strategy can help by providing financial assistance for community support programs, assistive devices and the like. However, most of our homes are built for young, active families who can readily negotiate stairs, narrow halls and high kitchen cabinets. They are simply not geared to aging in place. Builders have been generally slow to respond to the shifting demographic and its need for universal design. A number of them do build adult-lifestyle bungalows, but those get snapped up quickly and don’t usually offer much more than an open concept and wider passageways. “We have both an opportunity and a responsibility to take (aging in place) into the market as quickly as possible,” says John Kenward, chief operating officer of the Canadian Home Builders’ Association. A 2008 survey for the association found that, nationwide, the majority of builders had included features for clients with disabilities in fewer than six per cent of their projects in the past year. Those project included new homes and renovations. Ottawa-based Phoenix Homes (phoenixhomes.ca) would like to expand its portfolio to include aging in place features, says vice-president of operations Rahul Kochar. But “we haven’t had requests from many people. The top end for us right now would be our adult-lifestyle bungalow.” Tartan Homes president Ian Nicol concurs. “In a perfect world, we’d have two or three models we could easily convert to universal access, but we only get an inquiry every two or three years. It is buyer- and market-driven, but if we’re smart, and I think we are, we’ll get ahead of the curve.” He adds that Tartan (tartanhomes.com) is open to customizing a home to meet special needs, and hopes to have a standard package of universal design upgrades available in the next few months. One problem is that while builders are good at responding to consumer demand, they are also “very conservative,” says Avi Friedman, an architecture professor at McGill University. He designed the Grow Home and Next Home, universal design-based dwellings that have resulted in thousands of homes in Montreal and inspired similar projects throughout North America. “(Developers) will go on selling single-family homes until there is no more demand,” he says. Friedman predicts that within a decade most homes will have to be designed to accommodate an aging population. He says Europe and Asia, where respect for the elderly is ingrained, are far ahead of us. In Japan, for example, the drive to put technology to the aid of older citizens has resulted in innovative housing ideas. They include a bedside device that takes blood pressure and even a blood sample and digitally transmits the results to a nurse who can follow up if necessary. On the other hand, if there’s not much demand, it’s hard to blame builders for not jumping all over aging in place. Eric Cosgrove, a real estate agent and member of the board of directors at The Council on Aging of Ottawa, says he sees builders wanting to contribute to affordable seniors’ housing but hamstrung by the need to make a profit — not always so easy when you’re building affordably — and the tangle of bureaucracy when they apply to the city for project approvals. Richmond-based Courtyard Developments (hydeparkrichmond.com) seems to have found a way around the affordable part by building the not-for-profit Hyde Park, an adult community of bungalows, apartments and retirement suites in Richmond that use a life-lease model. That model is an increasingly popular way of funding the construction of communities for elderly people who have assets but not a lot of income. Basically, residents buy shares in the development, giving them a return on investment, and the developer uses the investment to construct the homes. Depending on the unit, residents may have a choice of buying or just renting. As they age, Hyde Park residents can move from independence in the adult-lifestyle bungalows to the apartments or the comprehensive care available in the retirement residence. There’s also a medical facility planned for the site. “We are constructing a community, not building houses and apartments,” says president Steve Hyde. “Our goal is that people don’t have to move out of the community at all.” However, hold ups in municipal approval — the result of amalgamation and new water regulations — delayed the project for 18 months when it started a decade ago. Intense lobbying of City Hall by two potential residents helped finally move the approval process along. Still, the Hyde Park units don’t come equipped with a lot of universal design features: The bungalows, for example, are basically open concept and wheelchair-accessible. The current site has sold out its bungalows, but Hyde has another, similar project planned for south of Ottawa. It will have upward of 300 bungalows starting around $200,000. Ashlar Homes (ashlarconstruction.ca), a custom and pre-designed green builder working in Merrickville and other communities, includes an “Ease-of-Access” package in its offerings. Targeting the aging-in-place market, the package includes a roll-in shower, grab bars where specified, an easy-access kitchen and other design ideas. Yet, says Ashlar president Stefan Hamed, “I haven’t had any takers yet. People seem more interested in granite countertops.” Longwood Building Corporation (longwoodbuilders.com) has also been targeting the aging market. Like other builders, it’s constructed adult-lifestyle bungalows in a number of Ottawa communities. It’s also building the Montage, a condo near Billings Bridge Plaza. Most of the buyers so far are 50-plus, with one in his 80s, says Longwood sales manager Darice Greene. The condo units feature low-threshold patio doors that swing open rather than sliding for ready wheelchair access. At Greene’s suggestion, the design of the ensuites was changed from a large corner tub and small shower to a four-foot shower with a swing door. The company will also arrange custom kitchen cabinetry with pull-down shelves. One alternative to buying a new home is to build custom. In that case, you can include features like stacked closets that can later be converted to an elevator shaft, an option that custom builders say is growing in popularity. Such features recall Canada Mortgage and Housing Corporation’s (CMHC) FlexHousing, a concept developed in the 1990s. A FlexHouse is one that allows easy conversions — for example, turning one bedroom into two or an attic into a family room — as a family evolves. It also incorporates universal design features like sinks and cook tops that are open underneath to allow wheelchair access. A family could theoretically live in a FlexHouse for decades rather than upsizing and downsizing as needs change. Rather than buying or building new, some are renovating their homes. Lynda and Colin Welch did a bit of both by basically rebuilding their 30-year-old cottage in the Madawaska Valley into a year-round home. Both are still working, but Colin has had a knee replacement and suffers from arthritis. Their home now features a dumb waiter to haul groceries and other heavy objects up to the main level, a raised toilet and grab bars in the bathroom, lever handles on most doors, and pullout kitchen cabinetry for dishes, pots and pans. “It gets harder to do all these things as you get older,” says Lynda. They’ve also installed stairs with a wide tread and low risers that are easy to navigate and they’ve minimized floor coverings to avoid tripping on carpet edges, a common problem as we age and no longer step lively. Totally wheelchair accessible, the Welchs’ home is also energy efficient, an important factor as they shift to the fixed incomes of retirement. “We can also section off parts of the house that we won’t use, so that keeps heating costs down,” says Lynda. They’ve done all this without sacrificing esthetics. Their home is warm and comfortable, with features like a sunroom and a large, sheltered porch for outdoor meals and just relaxing. Ottawa-based HealthCraft Products (healthcraftproducts.com) is helping us age in style. Its Invisia Collection of grab bars and other bathroom accessories is sleek and contemporary. That’s a far cry from the soulless institutional look these items often have, a look that actually discourages people from installing them because they just about shriek, “You’re getting old!” Other aids include interior stair lifts with a chair to transport you from one level to the next. “The number one response when people get them is, ‘I can’t believe how much energy I have,’ ” says Puddicombe. “They say they used to use so much energy just going up and down the stairs.” A system for a straight staircase runs around $3,400, including installation, at Canada Care Medical in Ottawa (canadacaremedical.com). Curved stairs require a custom-built system running $10,000 to $20,000. The stairs usually need to be at least 81 centimetres wide. The company also sells porch lifts. Resembling an open elevator, they’re usually installed at the back of the house and will accommodate a wheelchair or even a scooter. They run $5,000 to $7,000 at Canada Care Medical but do require a concrete pad. Some boomers who are adding secondary suites, also known as granny flats, to their homes for their aging parents are thinking even longer term. Christopher Straka of Vert Design, an Ottawa sustainable design and development firm (vertdesign.ca), mentions an Alta Vista couple that’s adding an accessible suite for the wife’s 90-year-old mother. When the mother passes on, their children may take over the suite or the couple might themselves, turning the main house over to one or more of their children. “They are thinking of design for multiple generations. Doing things like building the suite at grade with wheelchair access, it doesn’t matter if you’re 25 or 55 or 95; it will work.” The City of Ottawa encourages the building of secondary suites by offering a tax incentive. CMHC offers a forgivable loan of up to $24,000 in southern Canada to build a secondary rental unit for a low-income senior or adult with a disability. CMHC also offers a forgivable loan of up to $3,500 to low-income seniors and landlords making other minor adaptations to allow aging in place. From adult-lifestyle bungalows to closets that become elevators to designer grab bars, the components to allow aging in place are out there. So is a rapidly greying cohort of boomers, who traditionally haven’t been shy about making their wants known. The hitch is putting all the pieces together. As the Council on Aging’s Cosgrove notes, “It’s a long-term project to turn the Queen Mary around.” August 26, 2011 OTTAWA — A much anticipated correction in the Canadian housing market is not in the cards, according to a report by the Canada Mortgage and Housing Corp.   In its third-quarter market outlook, the national housing agency forecasts the market will ease slightly but “remain steady”this year and next.   “Housing starts have been strong in the last few months, but are forecast to moderate closer in line with demographic fundamentals,” Mathieu Laberge, deputy chief economist for CMHC, said Wednesday. “Despite recent financial uncertainty, factors such as employment, immigration and mortgage rates remain supportive of the Canadian housing sector.”   In fact, CMHC revised up its outlook for 2011 housing starts to 183,200 units from 179,500 in its second quarter report. It forecasts the number will climb in 2012 to 183,900 units.   In 2010, there were 189,930 housing starts.   CMHC also forecasts existing home sales will total 446,700 units in 2011 — approximately the same level as in 2010, although slightly lower than its second quarter forecast of 452,100. It forecasts sales will rise “modestly” in 2012 to 458,000 units.   The outlook runs contrary to a report in July from TD Economics, which projected that Canada’s housing market was poised to correct over the next two calendar years, with resale activity falling 15.2 per cent and average prices dropping 10.2 per cent.   “A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first-time home buyers are expected to be the chief culprits behind the slowdown,” said the report, prepared by deputy chief economist Derek Burleton and economist Sonya Gulati.   Earlier this summer, BMO Capital Markets warned that the Canadian market could suffer a price setback if there is a rapid rise in interest rates due to higher inflation, an increase in unemployment because of a weak U.S. economy or a slowing in foreign investment.   CMHC, however, projects that despite a slowing in the second half, average resale prices will deliver an overall increase in 2011, and continue to rise, albeit at a more modest pace, in 2012. August 25, 2011 Tara Perkins AND Steve Ladurantaye Last updated Wednesday, Aug. 24, 2011 6:52AM EDT Some Canadian banks are hiking their variable mortgage rates, seeking to pump up its profit margins as it becomes evident that interest rates will remain low for some time to come. Royal Bank of Canada (RY-T50.930.871.74%), the country’s largest bank, kicked off the increases on Tuesday, raising the rates on its five-year variable closed residential mortgages by 0.20 percentage points. As a result, the price of its current special offer rate is now prime minus 0.45 per cent. Bank of Montreal (BMO-T60.220.420.70%) followed suit hours later with a 0.15-percentage-point hike. The prime rate is currently 3 per cent. The profit margins that banks are earning on variable rate mortgages have become extremely thin. That’s becoming more of a problem for lenders because there are already signs that Canadians are piling back into variable-rate, as opposed to fixed-rate, mortgages. The trend is being fuelled by diminishing expectations that the Bank of Canada will raise interest rates significantly in the near future, expectations that fell further after the U.S. central bank recently signalled it intends to keep rates at rock-bottom levels well into 2013. The moves by RBC and BMO signal that they are choosing profits over market share. RBC tends to lead the pack on mortgage-rate changes and some other rivals are likely to follow suit. But some might decide to keep rates low with the hope of luring new customers who may eventually lock in to more profitable fixed-rate mortgages. A spokesperson for RBC said that mortgage rates are tied to the bank’s funding costs, which change from day to day. “Our long-term funding costs have gone up considerably due to global economic concerns, and while we have held off in passing on these rate changes to our clients, it is now necessary for us to increase this mortgage rate,” the spokesperson said. The last time RBC adjusted the variable closed posted rate was in January, when it dropped it from prime minus 0.15 per cent to prime minus 0.20 per cent. That posted rate (as opposed to the special offer rate) is now the same as the prime rate. Prime minus 1 per cent was common prior to the financial crisis, when those rates, which tend to move in step with the central bank’s benchmark rate, were higher. Given that interest rates and prime rates remain depressed, “we’re going to have low mortgage rates, both fixed and variable, for at least another year and a half,” said Jim Murphy, chief executive officer of the Canadian Association of Accredited Mortgage Professionals. Alyssa Richards, CEO of Ratehub.ca, said banks tend to move their variable rates higher as they near the end of their fiscal years to help pad their profits and meet targets. With the fourth quarter under way, she said the timing shouldn’t come as a surprise. “You start to see some tricky stuff going on around this time of year,” she said. “The takeaway for a buyer is that you should probably get a pre-approval if you’re in the market, because they’ll lock you in at a rate for up to 120 days.” Canada’s big banks report their earnings over the course of the next two weeks, and the pressure on their lending margins in Canada is being watched closely by analysts and investors. Tough competition for deposits coupled with low interest rates have compressed the amount that banks earn from their loans. Ratehub.ca tracks mortgage rates, and Ms. Richards has found the number of people searching the site for variable rate mortgages has skyrocketed in the last several months because rates have been so low. And with the stock market diving and the economic outlook deteriorating, people believe rates will stay low for some time yet. “People are looking at what’s happening out there and thinking that it’s so tempting to go variable,” she said. “It’s all about strategy.” RBC, Canada’s biggest mortgage lender, had a Canadian mortgage portfolio of about $157.7-billion at the end of the second quarter, up from $149.4-billion a year earlier. Chartered banks hold more than $548.5-billion worth of residential mortgages in Canada. August 24, 2011 For children, the excitement of moving into a new home is often clouded by uncertainty. Parents can ease the transition — starting at the dinner table. The ritual of sitting down to a family meal can help kids start to feel at home, said Nancy Darling, a psychology professor at Oberlin College in Oberlin, Ohio. She also urges adherence to bedtimes. “When kids feel like everything is changing, they need that stability,” she said. “They need attention and stability.” That may mean anything from choosing familiar paint colours in the new house to letting kids be part of decorating decisions. Barbara Miller, an interior designer in Portland, Ore., who has moved with her children three times, painted their new rooms the same colour as their old ones. “I try to keep things as much the same (as possible) — especially if they’re nervous,” said Miller. Moving can be more disruptive for kids than parents realize, added Doug Tynan, a child psychologist with the Nemours Foundation in Newark, Del. Be prepared to handle tears or unusual behaviour as children adjust to their new setting, he said. “Don’t take it personally if they walk into a wonderful new house and burst into tears,” said Tynan, who estimates it takes five to six weeks for children to adjust to a move. He recommends that parents talk openly with children about the move as soon as they decide it’s going to happen. “The more information the better,” he said. “Be as up front as possible.” When John Seyerle’s fellowship was ending at a hospital in Columbus, Ohio, he and his wife, Maria, told their daughters, Anna, 8, and Sophia, 5, that a move might be in their future. When he took a job in Cincinnati, the couple took the girls house hunting. “We did talk about what their criteria were for a new house,” Maria Seyerle said. “They wanted a swing set and tub with jets.” The girls, who got their swing set shortly after moving into their new home in June, have adjusted well, Maria Seyerle said. “That’s not to say that they don’t have their moments of being sad,” she said. “We’ve made it clear that we have mixed emotions too.” Tynan, Darling and Miller offered these additional tips to help children adjust to a new home: •Introduce children to their new home: If possible, take them to the new house before the move. If they don’t have a chance to see the interior, take photos or show them the online listing. Talk about how the family will use the new spaces. •Let them help arrange their new space: Give kids a floor plan of their new room and let them decide where to place the furniture. •Show them their new school: If the school has a website, spend time online getting to know the building and its teachers. Arrange to visit the school in person as soon as possible. •Pack with care: Pack the kids’ room last so they face as little disruption as possible. Unpack their room first at the new house. •Let them help: Give children a box to pack. Tell them to put their most valuable possessions in it. If possible, let them carry the box with them when travelling to the new house. •Show kids around the new house: When you arrive, take kids on a tour. Point out the location of light switches, bathrooms and other useful details. Make sure children know how to get to their parents’ room during the night. Consider using night lights or placing glow-in-the-dark stickers on light switches to help kids feel more comfortable. •Take them around the neighbourhood: Visit a playground or other attractions they might like. Point out positives, such as proximity to a pool, ball field or ice-cream shop. •Keep children active: Sign them up for sports teams, classes and other extracurricular activities as soon as possible. If the move occurs during the summer, try to register for a camp or class that will include local kids. August 24, 2011 By Mark Weisleder Closing day in a house deal is a milestone for both the seller and the buyer. To make it go smoothly, it is very important that both buyer and the seller are properly prepared. Here’s a checklist if you are selling: 1. Make sure you have given your lawyer a copy of any deed, mortgage, survey and current property tax bills. You should have received these from your lawyer when you bought the house. 2. Do not cancel your household insurance policy until you have heard that the deal has closed. Also, if you are moving out more than 30 days before closing, you need to notify your insurer that the home will be vacant. This way, you will still be covered if anything happens in the home up to the closing date. 3. You will visit your lawyer a few days before closing to sign the papers. Make sure you give one set of keys to give to your lawyer, which will be passed on to buyer’s lawyer at closing. 4. If you are a non-resident of Canada, you must obtain a certificate from Canada Revenue Agency regarding any income tax payable, or else the buyer will be holding back 25 per cent of the sale price until you do get it. Non-resident means you have not lived in Canada at least 183 total days in the past year before the closing day.  This can take up to two months so let your lawyer know right away so that the proper application can be filed. 5. Have all your utility meters read on the day of closing. That way you will only be responsible for your share of utilities. Also notify your cable and telephone provider so that your service can be disconnected. If your house is heated with an oil tank, you need to make arrangements to fill the tank on the closing day. 6. Cancel any pre-authorized or postdated cheques at your bank, to make sure you don’t pay for anything after closing. 7. As you have to be out of the property when it closes, arrange to move out before 5 p.m. Here’s a checklist if you are buying: 1. Schedule your pre-closing visit shortly before closing, so that you can conduct your final inspection to make sure that the home is in the same condition as when you signed the offer. 2. Arrange moving time late in the afternoon, as that is likely when the seller will have moved out. If it is a condominium, and you need use of the elevator, contact the management company well in advance of closing to reserve the elevator. 3. Fire insurance must be arranged for the full replacement cost of the home. If it is a condominium, you need a policy to protect your contents and liability. Do not leave this to the last minute. 4. If you are arranging a mortgage for less than 20 per cent down, the bank will be deducting certain costs, such as mortgage insurance, appraisal fees and HST. Find out early what all these deductions will be, as you will have to come up with any difference needed to close your deal. Make sure you have provided the lender with all required proof of income, or down payment well in advance so that it does not delay the money. 5. Your lawyer will be receiving a statement of adjustments just before closing. This could add to your closing costs if the seller has prepaid some expenses, especially property taxes. Find out exactly what this is as it can add up to 0.5 per cent more to what you may owe. 6. You will need to deliver, at least 2 days before closing, the balance of money needed for your lawyer to close the deal, by certified cheque, money order or bank draft. 7. Let the lawyer know how you will be taking title to the property. If you take as joint tenants and one of you passes away, the other party immediately becomes the owner. If you take as tenants in common, you can transfer your interest to a beneficiary under your will. 8. Tell your lawyer to order title insurance for you. This will protect your property against title defects, survey issues, work orders and frauds while you own the property. 9. Arrange for your cable and telephone providers to install service on the day of closing or immediately after closing. 10. Contact the utility companies, to make sure they read the meters on closing, so that you are only responsible for charges after you move in. Being prepared in advance will ease the stress of closing day and hopefully begin the creation of happy memories for you and your family. August 23, 2011 RBC's quarterly housing trends and affordability index stated home resales fell 4.5 per cent in the first quarter of 2011 and 4.2 per cent in the second, a trend it said was linked to moderate price increases across all housing types. On average, housing costs took up 41.2 per cent of a household income, up 1.3 percentage points. "Although still comparing favourably against other major Canadian cities, affordability  in the Ottawa area is likely pinching local homebuyer demand," RBC stated. "Any further deterioration will put that market at greater risk of slowing further." Across Canada, RBC said home price and small mortgage rates increases decreased affordability in most major markets, but in most cases not in a big way. The exception was Vancouver, where "extremely poor and rapidly eroding affordability ... is somewhat skewing the national picture," RBC stated. On a national average basis, condominiums were up 0.8 percentage points to 29.2 per cent, detached bungalows increased 1.7 per cent to 43.3 per cent, and two-storey homes bumped up 1.2 per cent to 49.3 per cent. RBC also called for delaying any interest rate hikes until at least the middle of next year, given ongoing turmoil in world markets. August 22, 2011 Sonali Verma Globe and Mail Blog Posted on Friday, August 19, 2011 6:20AM EDT Is there anyone else out there who feels ripped off by compact flourescent lamps (CFLs)? You know, the curly, spiral-shaped light bulbs that are 75 per cent more energy-efficient than the traditional incandescent light bulb? They cost a few dollars a pop, compared with several cents for a traditional light bulb, and never seem to come close to lasting the 10,000 hours or so advertised on the box. Although the outlay is small, I will admit to feeling a bit cheated because they promise so much. (They also contain mercury, and the fact that cleaning up a broken bulb or disposing of a burnt-out bulb is a major production does not endear them to me either.) The government, on the other hand, loves them. The average Canadian home has 30 light fixtures that consume close to $200 of electricity every year, according to Natural Resources Canada. "Replacing just five bulbs with Energy Star-qualified CFLs in high-use areas can save up to $30 a year, depending on location and amount of time used. That means you'll pay off the added cost of the bulbs in less than two years, and they last for at least five. Better still, you won't have to change them as often!" the department says on its website. Not all users are as enthusiastic. Consumer Reports found that CFLs last 3,000 hours before wearing out, on average. California utility Pacific Gas and Electricity Corp. recently cut its estimates of average bulb lifetimes, from 9.4 years in 2006 to 6.3 years, amid controversial, taxpayer-subsidized CFL sales. How can you get more out of your swirled light bulbs? Here's what I found: 1.) Don't use them in enclosed light fixtures and recessed lighting, where heat gets trapped around the bulbs. That means they're operating at higher-than-normal temperatures, which makes their lives shorter, according to lighting technology consulting firm Roberts Research and Consulting. If you must place them in enclosed fixtures, aim for low-wattage bulbs in cooler parts of the house. 2.) To get the lifespan advertised on the box, you must leave them switched on for at least for four hours at a time, according to architect and builder Bob Formisano. If they are on for only an hour, you get a 20 per cent to 50 per cent reduction in lamp life, he says, and if the CFL is on for five to 30 minutes at a time, the life is reduced 70 per cent to 85 per cent. "The lifetime quoted on a CFL is just an average, meaning that 50 per cent of the lamps can and do fail before the stated hours and it can still be considered a valid rating," he adds. 3.) Don't use them in fixtures with ceiling fans or in areas where they are vulnerable to vibrations and jolts. According to Popular Mechanics, the life of a lamp installed in the foyer is likely to be shortened every time you slam the front door. Heavy-duty bulbs are apparently available for spaces such as this. 4.) Remember how your mum always told you to switch off the lights if you were leaving a room? Don't switch CFLs on and off too often -- leave the lights on if you're returning within 20 minutes, says Natural Resources Canada. Similarly, go with old-fashioned incandescent bulbs for that light that is activated by a motion sensor on your porch. 5.) They are also sensitive to voltage fluctuations. If you live in an area where power surges are the norm, your bulbs will burn out faster. 6.) If you have the time, tape the receipt for the bulbs to the packaging. If they burn out early, contact the retailer or manufacturer and ask about the return policy. I found my research... illuminating. So, maybe using CFLs in the ceiling-fan fixture in our warm kitchen, located directly beneath the bedroom where our boys are always jumping around, is not such a bright idea. August 19, 2011 By Susan Pigg Financial consultant Jose Jimenez has been on his own gut-wrenching roller coaster ride the last few weeks — and not because of the stock market fluctuations he monitors daily. Jimenez, 35, has been trying to buy his first home. “In a way, I’ve been rooting for the markets to tank a bit and hoping that might encourage other people not to buy right now, but that doesn’t seem to be the case,” says Jimenez, whose wife is expecting their second child. In fact, whipsawing markets, fears of a double-dip recession and global economic uncertainty seem to have made housing look as good as gold. Canadian home sales were up 12.3 per cent last month from July, 2010 and are expected to grow slightly the rest of this year because of low interest rates, the Canadian Real Estate Association said Tuesday. “We anticipate that, going forward, the housing market in Canada is going to be an oasis of stability compared to what is expected to be further volatility in financial markets,” Gregory Klump, CREA’s chief economist, said in a telephone interview. Almost 285,000 housing units have sold across Canada so far this year, just 1.6 per cent below sales for the same period last year, and that’s expected to hit 450,800 by the end of 2011, according to CREA forecasts. That’s despite dire predictions earlier this year from some housing analysts that the real estate bubble is overdue to burst and send Toronto prices toppling by as much as 25 per cent. Jimenez is keenly aware of all those numbers but has a few more pressing ones on his mind: His second child is due in September, his 2-year-old daughter Sadie will start school in a couple of years and Jimenez and his wife, Sydney Richardson, just want a house they can make a home. Richardson is now worried the couple are “doomed” to have to raise their children in their two-bedroom Beach apartment after losing out Monday in a six-person bidding war — their second in just a few weeks — on a renovated three-bedroom Beach semi that was listed for $699,000. The couple offered $703,000, only to be outdone by a so-called “bully bid” — a down-to-the-wire offer almost $100,000 over asking price. Last month they were braced to offer $70,000 over the $550,000 asking price for a Rhyl Ave. house but found themselves up against 13 other potential buyers. The house sold for $120,000 over asking. The couple has talked about putting things on hold until the real estate market calms down, but their biggest fear is that day will never come. While Sonya Gulati, an economist at TD Economics, anticipates sales will be a little more subdued in the fall, she said first-time buyers and immigrants are still being drawn into the market by interest rates that are expected to remain low until 2013. “On the one hand, they are incredibly brave given all the economic uncertainty out there,” says Gulati, “but you need a place to live and a house is a long-term purchase so people seem to think it makes sense despite the market gyrations.” Real estate agent Dave Tsaparis says he’s seeing more and more home buyers, banking on low interest rates, taking on mortgages of $300,000 to $500,000. Veteran Beach real estate agent Dianne Chaput blames lack of supply for many of the bidding wars, but expects that could ease in the fall as more baby boomers look to cash out on their biggest asset at peak market. Domenic Polsoni is so confident real estate is a sure bet, he recently traded in his Milton home, and gave up one car to help finance the move to a more expensive house in the Dufferin St. and Sheppard Ave. area. “People have been saying for years that the real estate bubble is going to burst, but I can’t imagine that will happen. We survived a major hit in 2008, people held their breath and then everything just seemed to march along.” Jimenez fears getting caught up in the current real estate “panic.” “But this is the neighbourhood where we want to raise our kids. Even if we were to take a short-term loss, I wouldn’t be too worried about it in the long run. “I think we’d definitely get the value back from it, not just in the sale price, but in the life we will have had bringing up our family in that neighbourhood.” August 18, 2011 Published on August 17, 2011 The Canadian Press The comments came after the Canadian Real Estate Association revised its 2011 national forecast for home resales, citing stronger than expected sales and higher prices in the second quarter. An earlier CREA forecast that called for a one per cent dip in sales this year from 2011. But the association said Tuesday sales should grow this year – albeit less than one per cent above 2010. CIBC deputy chief economist Benjamin Tal said recent stock market uncertainty due to the European debt crisis and the United States credit downgrade is actually helping boost sales in Canada's real-estate market. Bad economic news abroad tends to keep Canadian interest rates low, he said. Since the European and American debt issues came to a head in recent weeks, economists have been predicting the Bank of Canada will leave its key rate untouched at one per cent until at least next year. That's a change of opinion since last winter, when economists widely expected Canada's central bank would begin hiking its rates sometime in 2011 as the economy strengthened – putting upward pressure on the price of borrowing. With the global economy now looking weaker than expected, and the U.S. Federal Reserve promising last week that it will keep its key short-term rate at an all-time low for another two years, the Bank of Canada is now expected to put off raising its short-term lending rates. "The uncertainty globally is really benefiting mortgage holders because it's really postponing the increase in interest rates in Canada," Tal said, explaining that when the stock market turns volatile, real estate becomes an attractive investment because of its security. "Many people can use this opportunity to look into extremely low mortgage rates, so again the misery of other people elsewhere is helping Canadian home buyers." Sonya Gulati, an economist at TD Economics said the bank is anticipating that sales will be a bit more subdued in the next two months, but buyers, especially first timers and immigrants won't likely be deterred in the longer term as interest rates stay low. "People may be waiting to see whether or not they want to purchase homes, see if things turn for the better. It really has been a roller coaster for the last little while so we anticipate a little bit more subdued activity in August and September," she said. "(The stock market) will be a factor in their decision making process, but at the end of the day one of the key things for people is the interest rate and mortgage rates are still very low and they may actually want to enter the market for that reason despite the uncertainty out there." Meanwhile, CREA's chief economist Gregory Klump said it is too early to judge whether buyers are moving towards or shying away from real estate due to volatile stock markets. But he said historically, real estate does well during times of uncertainty. "During periods of financial market upheaval the Canadian real estate market has remained far more stable," he said, adding that even though some investors put off buying high end homes during the financial crisis of 2008 and 2009, those buyers returned to real estate soon after recovery began. "The last time we had financial market instability, the housing market wasn't immune, but it was certainly less volatile and certainly Canadians recognize that and feel comfortable investing in their home." Overall, CREA said Tuesday that 450,800 housing units are expected to be sold across Canada under its Multiple Listing Service in 2011, and the average selling price will be slightly higher. In May, it had estimated 441,100 units would be sold through the MLS. About 90 per cent of home resales in Canada are listed on MLS. Both Gulati and Tal said they expect the market to cool off in 2012 once interest rates rise again. Gulati said home prices could fall as much as 10 per cent, while Tal said they could fall between five and 10. Gulati described this as a "correction" while Tal said it was an "adjustment," but "nothing to write home about." Meanwhile, the association said it was revising its sales expectations for 2012 downward to 447,000 units, roughly on par with the 10-year average. On a regional basis, British Columbia's 2011 sales forecast has been revised slightly higher as home sales in the province appear to have bottomed out soon than predicted, while stronger than expected activity in Ontario is expected to offset slightly softer than anticipated demand in Quebec, Manitoba and Newfoundland and Labrador. CREA said it now expects the national average home price will rise 7.2 per cent in 2011, to $363,500. The previous estimate in May was $352,500. The upward revision reflects increases in the second quarter in Vancouver and acceleration in other parts of the country, particularly Toronto. Vancouver has experienced a surge in multimillion-dollar home sales this year. CREA said the two markets have a high number of sales and average price, so they play a big part in influencing the national average. Additional new listings should also result in a more balanced resale housing market in most provinces, with the national average price forecast to stabilize in 2012. August 17, 2011 Kim Mackrael Globe and Mail Update Last updated Tuesday, Aug. 16, 2011 11:39AM EDT The Canadian Real Estate Association has revised its forecast for home sales upward for 2011, citing stronger-than-expected sales and prices in the second quarter and good momentum entering the second half of the year. But economists warn Canadians should expect a gradual slowdown in the housing market to begin next year, as sales in Toronto and Vancouver cool and interest rate hikes eventually kick in. The association also revised its estimate for 2012 sales to fall seven tenths of a percentage point to 447,000 housing units. “Less favourable economic fundamentals, combined with new mortgage rules in place, are beginning to clip the wings of the Canadian housing market activity,” TD economist Sonya Gulati wrote in a note. Average home prices are expected to moderate in the second half of the year following an unusually high surge of expensive Vancouver home sales. Sales in July stayed flat in Toronto and fell slightly in Vancouver, according to CREA, and national housing prices were at their lowest level since January 2011 last month, at $361,181. “Going forward, a correction is ripe for these cities in order to bring both markets in line with balanced territory. However, we expect such a retreat in prices and sales to be gradual in nature taking place over several quarters, with the brunt occurring in late 2012 into early 2013,” Ms. Gulati wrote. CREA said Tuesday it expects activity will increase by less than one per cent this year compared with 2010, up slightly from its previous forecast of a one per cent decline in sales. National sales are expected to reach 450,800 homes in 2011, the association said, and average sales prices will be 7.2 per cent higher than the previous year. “While there had been some talk of potential interest rate increases, that hasn’t happened,” Gary Morse, the association’s president, wrote in a statement. “In fact, rates have actually come down, and are now expected to remain low for the remainder of this year and into 2012. It’s a great opportunity to purchase a property with financing at very favourable rates.” August 17, 2011 May Jeong From Monday's Globe and Mail The Canadian Real Estate Association reports monthly housing sales numbers for July on Tuesday, but it’s the national association’s long-term forecast that may provide greater clues into the state of the Canadian housing market. The housing market has been climbing steadily since the end of the recession, with market watchers constantly worried about a crash. CREA has said that sales and prices may ease slightly in the coming year, but past forecasts have maintained that, over all, the market is healthy. While July’s housing numbers are expected to show a minor decline in sales, observers who have seen early reports from regional markets are trying to figure out whether a dip in prices reflects a seasonal weakness or will prove to be a signal the market is cooling. Several factors could see CREA lowering its sales projections for the rest of the year. Fears about the debt crisis in Europe and a possible double-dip recession in the United States could keep Canadians from buying new homes until things settle. That may be what happened in Vancouver and Toronto in July, where sales fell more than 20 per cent compared with June, despite record low interest rates. The association, representing some 100,000 real estate agents across Canada, updates its sales forecast quarterly. The May forecast predicted a decline of 1.3 per cent to 441,100 units in 2011 compared with last year. Despite the pressures, most bank economists expect Canadian house prices to hold steady for the next year, even as sales moderate. “One of the more surprising aspects of the Canadian economy right now is just how well the housing market has been doing,” said Robert Kavcic, economist at BMO Nesbitt Burns Inc. “Interest rates are still extremely low and the job market has held up well in Canada, contributing to the relatively strong housing market.” August 15, 2011 By Tony Wong The upside in a global stock market rout may ironically be a healthier housing market – at least in the short term, say economists. “The housing market has nine lives. Every time interest rates are supposed to go down, something happens and it helps to keep the market going,” said Benjamin Tal, senior economist at CIBC World Markets. Interest rates were supposed to be headed up before the crisis of terrorist attacks in New York on 9/11, and the last crash in 2008. But that didn’t happen. And it looks like rates will be staying down for a while, says Tal. The market is already betting that Bank of Canada Governor Mark Carney’s plans to hike interest rates as soon as September will have to be put off until the end of next year. South of the border, the Federal Reserve said Tuesday that it expects “exceptionally low levels of the federal funds rate at least through mid-2013.” And ironically, while the U.S. has experienced a downgrade in its credit rating from Standard & Poors, investors have continued to pile into the Treasuries market. The U.S. dollar remains the global reserve currency as investors head for shelter as they find few safe haven options out there. The demand for treasuries means that yields have gone even lower. Which means there is downward pressure on longer-term interest rates. Long-fixed term rates are affected by a variety of factors such as competition for funds in financial markets and to prices in the bond market. Short-term rates are more affected by the key overnight central bank rate. “The interest rate environment will continue to be very attractive for homebuyers for both short term and longer term borrowing costs. With the safety of U.S. bonds that’s keeping longer term rates low,” said Scotiabank economist Adrienne Warren. Industry groups are warning, meanwhile, that during an already tough recovery, any sudden move upward in rates could have dire consequences on real estate sales. “The very recent global economic news demonstrates the Bank of Canada needs to consider any future rate hikes with extreme caution, as the recovery may be more fragile than believed,” said Ontario Home Builders’ Association President Bob Finnigan. Some investors may also be looking at real estate assets for a place to park their money because of the volatile stock market, said Tal. Lance Dore, a member of the U.S.-based Royal Institution of Chartered Surveyors, says investment in real estate may be a beneficiary from those looking for safe haven. “The sell-off of stocks is a clear signal that people are not confident in the future and want safety now.  What has also happened in the past declines in the stock market is a flight to quality,” said Dore. “Real estate tends to be the recipient as part of this flight. Real estate values are at all-time lows with returns at all-time highs.  The convergence of excess cash due to stock sell-off and corporations flush with cash for investment will push these excess funds into the inevitable diversification to real estate.” While the future for the stock market looks shaky, the real estate sector is improving due to improving fundamentals based on increasing rents, absorption of distressed supply and increased interest for diversification, said Dore. However, if the stock market continues on a downward path, housing will not escape unscathed. While lower interest rates are a huge mitigating factor, the losses on the market may eventually translate into job losses. For one thing, it takes confidence to plunk down that down payment for a home. It usually means that you’ve got a job, some savings, and hope for the future. But confidence is not in abundance in global stock markets this week as concerns over sovereign debt have panicked investors. Without confidence, the housing market – the biggest ticket item on the consumer checklist will suffer no matter how low rates go, say economists. In the United States, where more than a quarter of borrowers have negative equity – meaning they owe more than their homes are worth – this could mean another setback for the already beleaguered market. In Canada, where markets have been stable, and have been forecast to cool down next year, this could mean that sales and valuations may come down to earth quicker than expected. “Assuming the volatility and uncertainty continues in the markets it will have negative implications for both potential home buyers and for builders,” said Scotiabank economist Warren. “There is still a big difference between Canada and the U.S. But it certainly reinforces our view that growth in Canada and internationally will be on the soft side.” So far, economists have not changed their outlook on the Canadian housing market. Most expect the market to flatline or correct slightly by next year. But that could change if the rout continues. “If this is the precipitation of a larger more protracted slowdown for the economy it will certainly affect housing,” said Peter Norman, chief economist real estate consultancy Altus Group.” If we get into a soft patch with slower employment growth then we will see slower home sales. For investors who are speculating on future events this adds another layer of uncertainty in the market. So this would cause them to sit on the sidelines.” In separate reports on Tuesday, Canadian housing starts surprised by rising unexpectedly in July, climbing to a 15 month high, up 4.3 per cent to 205,100 units according to the Canada Mortgage and Housing Corporation. And U.S. home values actually had the smallest drop in four years in the second quarter according to figures released by Zillow Inc. But this was before the impact of the stock market drop which will affect confidence as consumers suffer from a declining wealth effect. During a recession, the high end of the market, of purely discretionary purchases such as cottages and luxury condos might be the first to feel the impact. But a lack of confidence will affect all sectors of the market. “We continue to hold that new home construction will start to cool in the second half of the year, but this may come more slowly than anticipated as rates remain low for longer,” said Arlene Kish, principal economist for IHS Global Insight. “On the other hand, if the recent slide in financial markets remains persistent, consumers will become less optimistic and will likely stay away from home purchases.” August 12, 2011 Rob Carrick From Thursday's Globe and Mail Last updated Wednesday, Aug. 10, 2011 7:31PM EDT The debt problems in the United States and Europe have taken the pressure off Canadians with mega-mortgages and credit lines that are over the line. Remember how Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty were warning not too long ago that high personal debt levels could become unmanageable when interest rates moved higher? Well, interest rates aren’t going anywhere for now. That’s the view of economists following the worsening of the debt crisis in some European countries and the continuing difficulties the U.S. economy is having. “Rate expectations have taken a big step backwards,” said Doug Porter, deputy chief economist at BMO Nesbitt Burns. Early in 2011, when the economy was humming and inflation was moving higher, Mr. Porter expected the Bank of Canada to raise its trend-setting overnight rate by a full percentage point in total over the year. That forecast was trimmed to an increase of half a percentage point, and then further reduced just recently. “We’re leaning to nothing now,” Mr. Porter said. It’s a sign of how decisively the global economic outlook has changed that economists are even considering the possibility of interest rate cuts. Mr. Porter noted that rates are still close to the depths reached in 2009, but he thinks they could fall a bit if global economic problems reach crisis proportions. Canada’s government debt problem is mild when compared with the likes of the United States and some European countries. The issue here is personal debt, which has hit record levels in relation to income and continues to grow, although at markedly slower levels than a year or two ago. Global economic upsets do nothing to reduce personal debt here in Canada. But they do make it easy to carry that debt. Here’s the thinking on that: With economic growth in the United States stuck at frustratingly weak levels, Canada’s economy is bound to feel the effects. Debt-cutting by Washington and European countries could further choke back growth around the world. The Bank of Canada is also constrained by the fact that cranking up borrowing costs here while rates remain low in the United States would drive our dollar higher. That’s bad for our manufacturing sector because its products become more expensive in foreign markets. All of this means that heavily indebted Canadians get a reprieve from the higher interest rates they’ve been warned about for more than a year. “But you have to be careful what wish for,” Mr. Porter said. “There are real economic consequences to this kind of financial upset. We could end up with much weaker job growth that what would have otherwise been the case.” This is why you should reduce your debts, even while borrowing costs remain at attractively cheap levels. If the economy struggles and your job is affected, it’s not going to matter that you got a great rate on your mega-mortgage. Recent history suggests low rates are hard to resist, however. In the recent recession, Canadians did the opposite of what you’d expect and increased their borrowing. This was particularly noticeable in the housing market, which experienced a short, sharp slump and then soared. Mr. Porter said global economic uncertainty could temporarily affect consumer confidence here in Canada and in turn chill the housing market. “But as the smoke clears in financial markets and we’re left with low borrowing costs, we could get a fairly quick rebound in sales activity.” If you are buying in the next while, the current rate outlook argues in favour of a variable-rate mortgage. On Tuesday, the U.S. Federal Reserve Board said it expects to keep rates near zero for two years at least, which in turn limits the Bank of Canada. Mr. Porter said he expects the central bank to boost rates by just half a point in 2012. Those who prefer the security of a five-year, fixed-rate mortgage will pay as little as 3.6 per cent, which is tremendous by historical standards. Chalk up another benefit to Canadians from global financial upheaval. When the stock markets plunge, money flows into bonds. Bond prices rise, which means bond yields fall. Mortgage rates track bond yields, which means mortgage costs are falling. It’s Canada’s biggest borrowers who are the biggest beneficiaries of what’s happening in financial markets, though. As Mr. Porter put it, “If you have a secure job and lots of debt, things have unfolded well for you.” GLOBAL ECONOMIC WOES AND YOUR DEBTS Troubles in the global economy mean interest rates will stay low for longer. Call it a reprieve for those who need to cut the amount they owe. Here are current interest rates for common borrowing products: Variable-rate mortgages 2.25 per cent (based on a prime rate of 3% minus a three-quarter-point discount) Five-year fixed-rate mortgages 3.6 per cent or so at best; Big Bank posted rates are at 5.39% New home equity lines of credit 3.5 to 4 per cent, depending on how much of a markup over prime you have to pay Car loans 6.8 per cent on average over five years August 11, 2011   Published on August 9, 2011  Krystle Chow Ottawa Business Journal   A total of 385 homes were started last month, down from the 763 units in July 2010, with double-digit declines in both the single-detached and multi-family segments.   "A moderate resale housing market, the effects of tighter mortgage rules and emerging global uncertainties have combined to temper demand for new homes in Ottawa," said CMHC senior market analyst Sandra Perez Torres in a statement.   Apartment construction, which is generally more volatile than that of other housing types, had the most significant year-over-year decrease of 76.4 per cent, with the total number of apartments started slipping to just 70 in July.   The drop - along with a 42.3-per-cent decrease in row housing starts, to 120 units - contributed to an overall 58.1-per-cent decline in the multi-family segment, which recorded a total of 230 starts.   Still, Ms. Perez Torres said the apartment starts decrease "remains in line with underlying demographic fundamentals," and that the figure indicates a still-solid trend.   Single-family starts, meanwhile, fell 27.6 per cent to 155 units, the CMHC report showed.   CMHC noted that almost 30 per cent of total housing construction took place in Ottawa's core in July, driven largely by the 70 apartment units, which represented a single social housing complex project in the downtown area. Despite the activity, the region comprised of the old city of Ottawa, Rockcliffe Park and Vanier had one of the largest percentage declines among the nine surveyed areas, at 60.5 per cent, with starts falling to 111 units.   Gloucester also posted a large 78.9-per-cent decrease, to just 20 units, although CMHC noted the east-end section was the only area to see significant row housing construction growth.   Only Cumberland and Rideau Township saw increases in housing construction in July, and both hikes were relatively small, the report showed. Cumberland had a 12.24-per-cent rise to 55 units, while the Rideau Township saw starts rise to five from two.   On a year-to-date basis, Ottawa starts are down 17.8 per cent, with residential construction activity for most regions trailing behind last year's pace. The sole exception, CMHC noted, is downtown Ottawa, "due to a warm early start of the year."                           August 10, 2011 Published on August 9, 2011 The Canadian Press After a massive selloff on North American markets Monday and more bad news on the global economy, the analysts said Canada won't be immune from a weakening U.S. economy that many predict will slip back into recession. "It's a big factor when the biggest economy in the world and our biggest trading partner potentially goes into a tailspin," said John Stephenson, vice-president of First Asset Funds, a Toronto-based money manager. "The spillover effects are really into overall confidence and that will impact the consumer." Fears of a slumping U.S. economy and a growing debt has battered global confidence in the United States, hammering financial markets and sparking a pessimism not seen since the Wall Street financial crisis three years ago. Canada is stronger economically than the United States – with booming oil and mineral sectors and a solid housing market – but the countries are so interconnected it cannot avoid fallout from a slowdown south of the border. Canadian businesses won't be in much of a mood to hire, while consumers may lack the confidence to spend enough to keep the economy growing, Stephenson said. That could dampen job cretaion and make it difficult to further lower the jobless rate, now at 7.2 per cent. However, on a positive note for consumers, the falling cost of oil – down nearly 20 per cent in recent weeks – will put downward pressure on high gasoline pump prices across Canada. S&P credit rating agency downgraded the U.S. debt from the coveted AAA status for the first time in history late Friday, sending already plummeting markets further into lows not seen since the 2008 credit crisis. The actual impact of the downgrade is minimal – Canada saw its debt downgraded in 1993, and the stock market rallied the following year. But it has had severely negative psychological effects on investors already reeling from the European debt crisis and other U.S. indicators that signal its economy is weakening. "(The downgrade) is the drop that makes things tip over, the bucket is getting full now and there's too much worry out there," said Louis Gagnon a business professor at Queen's University. "The risk of a double dip – a second dip into recessionary territory – is certainly not inconceivable." A TD Economics report said Monday there is now a 1-in-3 chance of a renewed U.S. downturn. Fearful investors are taking money out of the stock market and putting it into perceived safe havens such as gold, which hit a new record high Monday of over US$1,700 an ounce. "What we're seeing now is another one of those episodes of panic, we're seeing risk aversion," Gagnon said. Canadian manufacturers and resource companies – some of the country's biggest employers – will feel the brunt of the slowdown since 80 per cent of Canadian exports head to the U.S. Exports have already been hit by a strong loonie, which is losing steam in the wake of the recent crisis, but still hovers above parity with the greenback. It fell about a cent and a quarter to 100.92 cents US on Monday. The Toronto Stock Exchange fell nearly 500 points Monday, extending a streak of losses that Bank of Montreal economist Robert Kavic said could continue for some time. Wall Street's key Dow Jones industrial average dropped more than 630 points. With the most recent market drops, average investors are losing money each day, affecting consumer confidence and spending. That could deter many from making big purchases like homes and undermine prices in the influential housing market, especially in Vancouver and Toronto. Any deterioration in home prices would further deplete consumers' assets. Consumers should be concerned about reduced investment income from stock losses, especially at a time when Canadians have racked up debt at cheaper borrowing rates, said Stephenson. "The problem is very significant, its not something that people should minimize." Gagnon said many people are growing worried about their retirement savings as the value of large pension funds and their own investments plunge on the stock markets. "I think people have to brace themselves for tougher years ahead and it may very well be that many of us who want to retire will have to retire much later than anticipated because we can't count on the stock market to produce the returns they did in the past." August 10, 2011 Published on August 10, 2011 The Associated Press It's the first time the Fed has pegged its "exceptionally low" rates to a specific date. The Fed had previously said only that it would keep it key rate at record lows for "an extended period." Stocks plunged after the statement was released, but then shot up shortly after. The Dow Jones industrial average sank more than 176 points, then recovered its losses and gained more than 120 points in late-afternoon trading. Fears of another U.S. recession – and worries about how governments will deal with global debt problems – continue to roil financial markets around the world. "Crises of confidence do not have silver bullet solutions," TD Bank senior economist James Marple said in a research note Tuesday. "The Fed's action today is unprecedented and will have a modest positive stimulative impact on near-term economic growth." It "may prove to be more stimulative a little down the road. The market appears to be pricing in a very significant chance of a recession. By removing some uncertainty about future Fed actions, longer-term rates should remain lower for longer." The low rates in the United States will put more pressure on the Bank of Canada to keep borrowing costs on hold north of the border as well. There had been recent speculation that the Canadian central bank would begin raising rates this fall to curb inflationary pressures in the Canadian economy, which has been growing faster than the United States. However, economists say the recent stock market turmoil and the fears of a double-dip recession in the United States has made it likely that rates won't rise in Canada until next spring at the earliest. That's good news for the Canadian housing sector, which has expanded strongly because of low mortgage rates and solid economic growth in recent years. After the Fed move, many investors sought the safety of long-term Treasurys, whose yields fell as low as 2.07 per cent. "There is a definite undertone of significant economic concern from the Federal Reserve," said Greg McBride, an economist with Bankrate.com. University of Oregon economist Timothy Duy called the move "weak medicine." Duy said he wanted to see the Fed commit to buying more Treasury bonds, to try to keep long-term rates down, until the economy improved. The Fed's two-year time frame for any rate increase underscored a stark reality: A sluggish economy and painfully high unemployment have become chronic. The Fed did hold out the promise of further help down the road but did not spell out what else it might do. The central bank's decision was approved on a 7-3 vote with three Fed regional bank presidents who have been worried about inflation objecting. It was the first time since November 1992 that as many as three Fed members have dissented from a policy statement. The Fed used significantly more downbeat language to describe current economic conditions. It said so far this year the economy has grown ``considerably slower'' than the Fed had expected and that consumer spending "has flattened out." It also said that temporary factors, such as high energy prices and the Japan crisis, only accounted for "some of the recent weakness" in economic activity. The more explicit time frame is aimed at calming nervous investors. It offered them a clearer picture of how long they will be able to obtain ultra-cheap credit, and was at least a year longer than many economists had expected. Fed officials met against a backdrop of speculation that they would say or do something new to address a darkening economic picture. The stock market has plunged and government data have signalled a weaker economy in the four weeks since Chairman Ben Bernanke told Congress that the Fed was ready to act if conditions worsened. The economy grew at an annual rate of just 0.8 per cent in the first six months of the year. Consumers have cut spending for the first time in 20 months. Wages are barely rising. Manufacturing is growing only slightly. And service companies are expanding at the slowest pace in 17 months. Employers hired more in July than during the previous two months. But the number of jobs added was far fewer than needed to significantly dent the unemployment rate, now at 9.1 per cent. The rate has exceeded 9 per cent in all but two months since the recession officially ended in June 2009. Fear that another recession is unavoidable, along with worries that Europe may be unable to contain its debt crisis, has rattled stock markets. The Dow Jones industrial average has lost nearly 15 per cent of its value since July 21. On Monday, it fell 634 points _ its worst day since 2008 and sixth-worst drop in history. The tailspin on Wall Street was further fueled by Standard & Poor's decision to downgrade long-term U.S. debt. Bernanke didn't speak publicly after Tuesday's Fed meeting. The chairman this year made a historic change by scheduling news conferences after four of the Fed's eight policy meetings each year, but Tuesday's wasn't one of them. Later this month at the Fed's annual retreat in Jackson Hole, Wyo., Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil. Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices. August 10, 2011 Globe and Mail Update: Last updated Tuesday, Aug. 09, 2011 7:43PM EDT Canadian fixed-term mortgage rates could fall to even more affordable levels after roiling financial markets pushed the yield on five-year government bonds to record lows on Tuesday. As investors fled equities in recent days, money poured into the haven of Canadian government bonds, pushing prices up and yields down sharply. Because banks borrow government bonds to help finance their fixed-rate mortgages, there is a tight link between five-year bond yields and five-year mortgage rates. “We have seen a precipitous drop in five-year bond yields,” said Toronto-Dominion Bank chief economist Craig Alexander, mainly because Canadian bonds look so attractive because of the country’s positive fiscal situation. Since July 21 the yield on those bonds has dropped a remarkable three-quarters of a percentage point, Mr. Alexander said, hitting an all-time low of about 1.5 per cent on Tuesday. Five-year mortgage rates tend to move in lock-step with that yield, but about 1.1 to 1.4 percentage points higher, and with a lag of up to several weeks before major lending institutions react with their changes. “The lag is really about financial institutions assessing whether the movement is going to be sustained,” Mr. Alexander said, noting that the time for them to react varies. In the current volatile market, financial institutions won’t likely move until they see whether bond yields stabilize for a period of time, he said. “There is a distinct possibility of a decline in five-year mortgage rates, but it is not clear [yet] how much of a decline there will be.” He expects to see a drop in mortgage rates, but perhaps not as dramatic as current bond yield numbers would suggest. For home buyers, or those looking to renew their mortgages, the prospect of lower five-year mortgage rates is very positive, said Alyssa Richard, founder of the mortgage-rate tracking website RateHub.ca. Five-year mortgage rates, on average, have been at about 3.5 per cent in recent weeks, she said, but if current bond yields are maintained those rates could drop to below 3 per cent, a level not seen before in Canada. Such a drop would save a home buyer almost $1,200 a year on a $360,000 mortgage amortized over 30 years, Ms. Richard noted. People holding variable-rate mortgages will also likely get a break, she said. Variable rates – which are linked to the Bank of Canada’s prime rate – will rise after the central bank’s next rate increase. But with U.S. Federal Reserve Board Chairman Ben Bernanke having said Tuesday that he will hold U.S. rates steady for two years, and the Canadian economy growing only marginally, Bank of Canada Governor Mark Carney is not expected to hike rates until next year at the earliest. For Canada’s real estate market, which has shown some signs of softening, the prospect of even cheaper mortgages could provide a welcome shot in the arm. “The Canadian real estate market has nine lives,” said Benjamin Tal, deputy chief economist at CIBC World Markets Inc. “Every time it looks like it’s going to slow down, something happens somewhere else in the world and interest rates stay low. The market could have been a lot weaker if not for such things.” Still, low interest rates can also send the wrong signal to some people, said Louis Gagnon, finance professor at Queen’s University in Kingston, Ont. “Many will enter the [real estate] market at prices that are too high, with very little equity, and they will run into trouble later when rates begin to go higher.” August 10, 2011 OTTAWA — New housing construction in Canada rose more than expected last month, according to data released Tuesday. Canada Mortgage and Housing Corp. said the annual rate of housing starts on a seasonally adjusted basis was 205,100 in July, up 4.3 per cent from June. That beat the median forecast of 194,500 provided by economists polled by Bloomberg. June’s numbers were revised down slightly to 196,600 from 197,400. The gains seen in July were driven by the construction of multiple-housing units in all regions except Quebec. Multiple starts in urban areas were up 13 per cent, while there was a 7.8 per cent decline in starting single-homes in cities. Overall, urban starts were up 4.7 per cent to a rate of 185,200. Rural starts were relatively unchanged at 19,900. The rate in new urban housing projects surged by 33 per cent in British Columbia and 36.1 per cent in the Atlantic region. It saw smaller gains of 1.7 per cent in Ontario and 0.3 per cent in the Prairies, and was down 7.8 per cent in Quebec. “Today’s report and the recent resilience of both permits and sales (suggest) housing continues to be one of the economy’s strongest sectors, although sentiment among purchasers obviously remains vulnerable to recent market turmoil,” CIBC World Markets economist Peter Buchanan said in commentary. August 9, 2011 When you apply for a mortgage, you usually just ask about the term, amount, interest rate and monthly payment. Not many people understand the difference between a conventional mortgage and a collateral mortgage. Yet many banks are now asking borrowers to sign collateral mortgages — and it could result in them being tied to this bank, for life. With a normal conventional mortgage you bargain for a set amount, rate and amortization. Say the property is worth $250,000 — you bargain for a $200,000 loan, at 3.5 per cent, a five-year term/25-year amortization, payments of $998.54 per month. A conventional mortgage is registered against the property for $200,000. If all the payments are made on time, the mortgage is renewed on the same terms every five years and no prepayments are made, the balance is zero after 25 years. Should another lender decide to lend you money as a second mortgage, there is nothing stopping them from doing so, subject to their own guidelines. Under normal circumstances the principal balance on a conventional mortgage goes only one way, down. In addition, banks will accept “transfers” of conventional mortgages from other banks, at little or no cost to the consumer. A collateral mortgage has as its primary security a promissory note or loan agreement and as “backup,” a collateral security, being a mortgage against your property. The difference is that, in most cases, the mortgage will be for 125 per cent of the value of the property. In our example, the mortgage registered will be for $312,500. But you will only receive $200,000. The loan agreement will indicate the actual amount of the loan, interest rate and monthly payments. The collateral mortgage may indicate an interest rate of prime plus 5-10 per cent. This will permit you to go back to this same bank and borrow more money from time to time, without having to register new security. The lender will offer you a closing service, to register the mortgage against your property, at fees that will be cheaper than what a lawyer would charge you. Sounds good so far, doesn’t it? However, this collateral loan agreement has different consequences, which are usually not explained to the borrower.  • Most banks will not accept “transfers” of collateral mortgages from other banks, so the consumer is forced to pay discharge fees to get out of one mortgage and additional fees to register a new mortgage if they move to a new lender. Thus the bank is able to tie you to them for all your lending needs indefinitely because it will cost you too much to move.  • Lenders may be able to use the collateral mortgage to offset any other unpaid debts you have. Offset is a right under Canadian law that says a lender may be able to seize equity you have in your home, over and above the mortgage balance, to pay, for example, a credit-card balance, a car loan, or any loan you may have co-signed that is in default with the same lender. In essence any loans you may have with that lender may be secured by the collateral mortgage. Nobody goes into a mortgage thinking about default, but “stuff” happens in people’s lives and 25 years is a long time.  • Let’s say your house value is $200,000. A collateral first mortgage registered on the property is $250,000. The amount owing on the mortgage is $150,000. If you were to need an additional $20,000, but the lender declines to lend it for any reason, then practically speaking you won’t be able to approach any other lender. They will not go behind a $250,000 mortgage. Your only way out would be to pay any prepayment penalty to get out of the first mortgage and pay any additional costs to get a new mortgage.  • Let’s say your mortgage is in good standing but you default under a credit line with the same bank. The bank could in most cases still start default proceedings under your mortgage, meaning you could lose the house.  • Some lenders are offering collateral mortgages in a “negative option billing” manner. Unless you are informed enough to say you want a conventional mortgage, you will be asked to sign documents for a collateral mortgage. One bank is only offering collateral mortgages. I spoke with David O’Gorman, the president and principal mortgage broker with MortgageLand Inc. He tells me it is his duty under the law to ensure the “suitability” of any mortgage he arranges for a consumer. He would be hard pressed to justify the recommendation of this type of collateral first mortgage to any consumer, without disclosing both verbally and in writing the points listed above, and he believes the consumer should have their own lawyer review everything before they sign. Lending money to people without proper explanation of the consequences is wrong. The banking regulators need to look into this practice and stop it. In the meantime, do not sign any mortgage document without discussing it first with your own lawyer. August 8, 2011 Aug 8, 2011 – 7:14 AM ET | Last Updated: Aug 8, 2011 7:15 AM ET By Amanda Cooper LONDON — The gold price was set for its second largest daily gain this year on Monday after the respective pledges by the G7 and the European Central Bank to quell the turbulence in the financial markets did nothing to put investors at ease. In Europe, Spanish and Italian bond yields fell. Traders said the ECB had made good on its promise to solve the eurozone debt crisis by widening its bond-buying programme to include paper from those two nations. Friday’s downgrade to the quality of U.S. sovereign debt by ratings agency Standard & Poor’s was widely anticipated, but its longer-term impact on anything from mortgage rates to the economy is unclear. Investors have bought more gold in the last month than in the prior six months, looking at the increase in open interest on COMEX for speculators and money managers, as well as inflows into exchange-traded products. Spot gold XAU was set for a second consecutive trading rally, up 2.7% from Friday at US$1,706.44 an ounce by 0900 GMT, having hit a record US$1,715.01 earlier and having traded at all-time highs in sterling XAUGBPR and euros XAUEURR. “Everyone was talking about Armageddon at the weekend and this morning, it’s held the rot but doesn’t remove the themes that have been driving the stock markets,” said Saxo Bank senior manager Ole Hansen. “The question right now is if gold will be allowed to move much further. There has been a huge build-up in speculative and long positions across the board over the last couple of weeks, but I suppose that central banks buying more bonds is not helping the overall worry about how the economies are going to do over the months ahead,” he said. According to data from the Commodity Futures Trading Commission, which collects information on holdings of futures and options, and to ETF data collected by Reuters, investors bought over 18 million ounces of gold, or 30% of total identifiable investment demand in 2010, in the last month alone, compared with about 8.4 million in the year to early July. Finance chiefs from the world’s industrial powers pledged on Sunday to take whatever actions were needed to steady financial markets, spooked by the political wrangling in Europe and the United States over slashing their huge budget deficits. FEWER “SAFE” HAVENS? Treasury Secretary Timothy Geithner said U.S. Treasury debt is as safe as it was before the S&P downgrade, urging European leaders to ensure there is an “unequivocal financial backstop” for eurozone governments facing fiscal and debt problems. “The uncertainty in the financial markets is keeping gold prices underpinned. It’s essentially safe-haven buying,” said Ong Yi Ling, investment analyst at Phillip Futures. “One of the events that investors will watch is of course the FOMC meeting that is scheduled Tuesday … investors will scrutinise the statement on the assessment of the economy and outlook for monetary policy.” Investors are watching for any statement on whether the Fed will ease monetary policy further. The prospect of an even longer period of low U.S. interest rates prompted Goldman Sachsto raise its longer-term forecast for the gold price. Goldman said it had lifted its forecasts to US$1,645, US$1,730 and US$1,860 on a three-, six- and 12-month horizon, respectively. Goldman had previously forecast the gold price peaking at US$1,600 an ounce in mid-2012. Meanwhile, gold in euros hit a record 1,195.66 euros an ounce, bringing gains in the last month alone to over 12%, while gold in sterling hit a peak of 1,043.76 pounds, for a gain of 9.3% in the same period. In other precious metals, silver XAG got a lift from the strength in gold as it can sometimes act as a cheaper safe-haven proxy for investor. Spot silver was last up 3.7% on the day at US$39.72 an ounce, while the more industrial platinum group metals reacted to the gloom in the broader commodity markets. Platinum XPT was flat on the day, around US$1,714.00 an ounce, while palladium XPD was down nearly 2% at US$725.50. The palladium price has fallen by more than 14% in the last 6 trading days, since hitting a five-month high. © Thomson Reuters 2011 August 8, 2011 OTTAWA — Canada's pace of employment growth took a step back last month.  There were 7,100 more people working in July, Statistics Canada said Friday, about half of the 15,000 economists were expecting.  The unemployment rate fell to 7.2 per cent in July from 7.4 per cent per cent in June as fewer people sought work.  That followed three-straight months of strong job gains — 28,400 in June, 22,300 in May and 58,300 in April.  In July, there were 94,500 more people working in the private sector, Statistics Canada said, but 71,500 fewer in the public sector. As well, there was a decline of 15,900 individuals who considered themselves self-employed.  Full-time employment was up by 25,500 while part-time workers fell by 18,400.  Douglas Porter, deputy chief economist with BMO Capital Markets, said the jobs data was "not exactly what the doctor ordered, but not bad," noting the gains in full-time and private-sector employment.  He also pointed out that the unemployment rate is the lowest it's been since late 2008, and there was a 1.2 per cent rise in hours worked last month.  "The one downbeat aspect of the release is that average hourly earnings faded further to just a 1.4 per cent (gain) year-over-year . . . falling further below recent headline inflation trends of more than three per cent," Porter added.  CIBC World Markets senior economist Peter Buchanan said the jobs data was "a fairly mixed report overall, with the details somewhat better than the headline."  He noted the rise in "paid employment jobs" overall versus people being in business for themselves, saying the former "tend to be of higher quality."  Employment growth in July was seen in the sectors of construction, transportation and warehousing, as well as retail and wholesale trade. There were fewer positions in health care and social assistance, educational services, business, building and other support services, natural resources and agriculture.  A few economists highlighted the effect that 30,000 fewer education jobs had on the overall numbers, with those reductions likely to be reversed when school's summer break is over.  "Typically, these jobs are recovered in August (or) September, meaning that this represents a one-off factor and, if excluded, employment gains were actually healthy at 37,000," said Dawn Desjardins, assistant chief economist for RBC Economics.  Looking across the provinces, Alberta, and Newfoundland and Labrador, saw job gains of 12,400 and 3,800, respectively, while there were 22,400 fewer workers in Ontario. Other provinces saw little change.   August 5, 2011 OTTAWA, August 4, 2011  Members of the Ottawa Real Estate Board sold 1,326 residential properties in July through the Board’s Multiple Listing Service® system compared with 1,116 in July 2010, an increase of 18.8 per cent. The five-year average for July sales is 1,377.  Of those sales, 307 were in the condominium property class, while 1,019 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties, which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.  “What a difference a year makes. Last summer the real estate market was reeling from the implementation of the HST that saw many buyers and sellers move up their purchases to the winter and early spring. 2011 is a different story, one that looks a lot more like the average year for Ottawa’s resale housing market,” said Board President-Elect Ansel Clarke.  The average sale price of residential properties, including condominiums, sold in July in the Ottawa area was $341,330, an increase of 6.2 per cent over July 2010. The average sale price for a condominium class property was $270,933, an increase of 11.3 per cent over July 2010. The average sale price of a residential class property was $362,539, an increase of 4.8 per cent over July 2010.  The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold. August 4, 2011 One of the sacred cows of American tax breaks that many have blamed at least partially for the U.S. housing collapse is coming under fire in the United States. At a forum last week in Washington, D.C., the real estate industry found itself the target of both the right and the left over mortgage interest deductibility, something Canadians have drooled over for decades because it lowers taxable income substantially. Americans claimed about $500billion in deductions related to mortgage interest last year, resulting in $100-billion in tax breaks. While the United States seems to have solved its immediate debt impasse, those looking for ways to balance the budget continue to eye mortgage interest deductibility as one of the answers. The debate centres around whether Americans have sought bigger homes than they might otherwise have purchased and mortgages that they are reluctant to pay down because of the huge tax break available. "It makes a big difference," says Ted Rechtschaffen, a certified financial planner in Toronto and president of TriDelta Financial. No such interest deduction rules exist in Canada for principal residences despite various lobbying attempts over the years. In 2003, the Ontario Conservatives led by Ernie Eves pledged to make Ontario the first province to allow consumers the tax deduction. But the Liberals won the election and nothing happened. Few people in the Canadian real estate industry were lobbying for it because the housing industry was doing well and, eight years later, it is doing even better. U.S. realtors say if mortgage industry rules were changed at this point, it would destroy any hopes of recovery in the sector. "It is the worst possible time to discuss it because of the fragility of housing," said Lawrence Yun, chief economist and director of research with the National Association of Realtors. He noted editorial writers from the Wall Street Journal and the New York Times have found common ground to attack mortgage interest deductibility as did groups on the far left and far right that were part of the forum organized by the Washington, D.C.-based Urban Institute. "Mortgage interest deductibility was in place for 100 years," said Mr. Yun, about whether it caused the U.S. housing bubble. "Perhaps it caused some aspects, but not by itself." The U.S. government wasn't thinking of personal mortgages when it first allowed interest expenses to be deducted for businesses and investment. "We could almost call this an accidental tax subsidy," said Eric Toder, institute fellow with the Urban Institute, noting that 100 years ago, few paid taxes and or even had a mortgage. But after the Second World War, the U.S. economy expanded and people began buying houses with debt. By 1986, the U.S. eliminated consumer interest as a deduction but continued to allow deductions on home loans of up to US$1-million and US$100,000 on home equity lines of credit. "Nothing has changed, but it is definitely now on the table as never before," Mr. Toder said. U.S. studies have shown the tax break tends to benefit the wealthy with 65% of people making US$50,000 to US$200,000 claiming the deduction despite being only 31% of the population. The benefit also tends to help more in places with expensive housing, and the conference heard three major markets - the New York/New Jersey area, the San Franciso Bay area and Los Angeles - reap 75% of all interest deduction benefits for the entire United States. Mr. Rechtschaffen says there is little doubt that if the tax break existed in Canada, he would be advising clients to take advantage of it. "Should you pay your mortgage or not? It depends on what your aftertax interest rate is," he said. At 5%, you start paying off your mortgage. Start lowering the effective rate with tax breaks and now who wants to pay off their mortgage? Not that many people, which is what Americans found out. And while mortgage interest deductibility may not have caused the bubble, it sure didn't help. Like most U.S. tax policy, it now seems impossible to unwind. It's no wonder no one in Canada wants to visit the issue. August 4, 2011 Jonathan Chevreau, Financial Post · Aug. 3, 2011 | Last Updated: Aug. 3, 2011 8:06 AM ET The global economy may have temporarily dodged a bullet with the 11th-hour raising of America's US$14.3-trillion debt ceiling, but individuals should draw some salutary lessons for their personal financial health. The Bank of Montreal has issued five tips on how individuals can avoid hitting their own personal debt ceilings. Like Washington, one in three Canadians live beyond their means, with 27% living paycheque to paycheque - a 10% increase over last year. Individual Americans are in just as precarious a spot, with the average household carrying US$75,600 in debt and 44 million relying on food stamps. BMO's first two tips could apply both to the U.S government as well as citizens of eithercountry: don't overspend and curb credit card debt. These are obviously related. Both at government and individual levels, overspending increases debt. It's taken Uncle Sam decades of profligate spending to reach this crisis, but the average citizen can get into credit card trouble far more quickly. Government has two advantages. First, the interest it must pay on government bonds is less than the doubledigit rates consumers are charged on retail credit cards. Second, governments can raise their own credit limits: the United States has done this 69 times since 1962. The current crisis is unusual only because a political impasse prevented the normal rubber-stamping of raising the ceiling. Individuals who hit their credit card limits should take it as a sign their discretionary spending is out of control and start cutting back. Or they can emulate governments by raising revenues. Employees can't do this by increasing taxes, but they can raise revenues by getting a raise, finding a betterpaying job, moonlighting or running a business on the side. The trouble starts if you maintain or increase spending without boosting your income. Too often, indebted consumers do just what Washington has done and ask their financial institution to raise the limit on their credit card. However unwise this is, the request is often granted because that's how the banks make their money. But even if your card issuer does you a favour by refusing to raise your limit, debtors hellbent on their ultimate financial destruction may apply for second and third cards, bypassing the safety mechanism of hitting the limit on the first card. Problems snowball if you pay only the suggested monthly minimum payment. The power of compound interest goes in reverse and you get in over your head - drowning if unexpected job loss curtails your ability to meet even the seemingly low monthly minimums. Another BMO tip is become mortgage-free faster. This tip comes after curbing credit card debt, since mortgage interest is much lower than that charged by most credit cards. Credit card debt is considered bad debt because it involves spending on consumption. Mortgage debt is good debt because it helps you build equity while putting a roof over your head, and is tax-deductible for Americans. You have to live somewhere, but renting means paying off your landlord's mortgage, not building equity in your own home. The problem is mortgages are front-loaded to consist mostly of interest payments in the early years, rather than principal. But that's only if you play it the banks' way and drag out your mortgage over 20 or 30 years. It's analogous to paying only monthly minimums on credit cards. If the mortgage is large and monthly payments small, you'll pay more in interest than the house cost, meaning your effective home price is double or triple the asking price. The best mortgage is no mortgage at all and the way to eliminate one is to have high regular payments that reduce significant amounts of principal from day one. Take advantage of annual prepayment privileges (often 10% or 15% of outstanding principal) and you'll be amazed how fast your personal debt ceiling fades into irrelevancy. Once credit card and mortgage debt are eliminated, along with student loans and car loans, focus on becoming the beneficiary of compound interest instead of its victim. BMO's fourth tip is invest to save, ideally through the new tax-free savings accounts. The last tip applies to individuals or Washington: have a Plan B. Unfortunately, too often the B stands for bankruptcy. This is invariably a disaster for consumers and as the world almost discovered the past week, a disaster for everyone if the government of the world's largest economy goes bankrupt. August 3, 2011 By Rubina Ahmed-Haq  Mon Aug 1 2011 When I started my first permanent job as a journalist in 2004, I made the best financial decision of my life — I invested in two rental properties with my brother. While many of our friends were living in chic condominiums, we were chasing tenants for rent and fixing leaky pipes. We made mistakes that cost us time and money, but years later we're financially ahead. Our first investment was a triplex in east Toronto. We took the lowest available five-year, fixed-rate mortgage. Considering the low interest-rate environment that followed, a variable rate would have saved us more than $20,000. But at the time, we were unwilling to take the risk. With no time or money to renovate, we chose a house that was in move-in condition. It closed at the beginning of the month, giving us enough time to advertise and have renters in place before the first mortgage payment was due. We moved into one unit and rented out the other two. From the beginning we paid rent. After all, we were tenants in our investment. Eighteen months later we took equity out of the investment and bought another property in the same area. We stuck to what we knew and we bought another turnkey triplex. For the first three years we managed both properties, which was a lot of work. From taking calls in the middle of the night when the furnace broke to the death of a tenant, this was real work and we often thought of quitting. We also made a lot of mistakes. In the beginning, we didn't keep a good account of the money we spent on our investment. Also, we missed opportunities to write off expenses; we saw our tenants as friends and were lax in collecting rent. And we often spent weekends removing snow and throwing out garbage that was piling up because we had failed to create a system for general maintenance. And, as bad as it sounds, our biggest mistake was borrowing money to put down a responsible 20 per cent on our first property. At the time, 5 per cent would have been enough, and we could have written off the mortgage interest, saving thousands. After a few years of managing on our own, we sought professional help. We had both moved into our own homes, so we hired a property manager to oversee the six units. His company charges 6 per cent of total rent revenue collected each month. He finds the tenants, does the credit checks and deals with the day-to-day calls. We're not out-of-touch landlords. My brother and I meet once a month to go over our account, do the checks and balances and bring up any concerns. We also have a line of credit against our investment. This is our business line and we pay all the bills from it. The interest on this loan is tax deductible and we pay it down with the money collected from rent. It's also good to have one accountant looking at all the tax claims in your family. It gives them a holistic view of your financial situation and helps identify opportunities to save money. Ours is great. She's not cheap — last year I paid more than $800 in fees — but her advice has saved us thousands over the last few years. When the time came to renew our first mortgage, I quickly learned banks offer better treatment to new customers and we could take advantage of this fact. Mortgages are banks' biggest business, and they're willing to offer huge incentives to make you a client. We moved our business from one major bank to another and collected thousands in cash-back incentives. Both of us are in our 30s and we estimate the properties will be paid off by the time we're in our early 50s. Conservatively our real-estate agent says our houses are worth 45 per cent more than what we paid. We realize we've benefited from the housing price boom, but according to the Toronto Real Estate Board the long-term trends are still good. Even with the threat of a house price correction we're okay. Real-estate investment is not for everyone. If you're a so-called couch-potato investor, don't become a landlord. In the beginning it's a lot of work. But for us it was worth it and I feel good knowing our investments are growing. Life only gets more expensive — I realize now the disposable income I had during my first job was the most I will probably ever have and investing it was the smartest move I made. August 2, 2011 Globe and Mail Update Published Friday, Jul. 29, 2011 12:00AM EDT Last updated Friday, Jul. 29, 2011 6:41AM EDT When it comes to financial planning, it’s fine to hope for the best, as long as you also expect the worst. It would be great to retire at 55 – and apparently it’s easy as pie if you just put money away monthly and get a 10 per cent rate of return. We would love to get those 10-per-cent projections you see quoted in compound growth examples, but the likelihood of attaining those rates of return decade after decade is pretty low. A 5-per-cent projection would be much more prudent. Financial planning expectations can be pretty far removed from reality at times. Some people, for example, will put off getting life insurance or having wills and powers of attorney drawn up because they think they won’t be dying for a long time. By that rationale, you shouldn’t buy life insurance until the day before you die, but how would you know when that’s going to happen? Similarly, some investors give up flexibility in exchange for the highest potential net worth. But what might be the best strategy from a mathematical point of view may not be the best strategy from a financial planner’s point of view. For example, a reader asked me if he should pay down the rest of his mortgage with his RRSP as he is currently unemployed. He assumes the rate of return on his RRSP is going to be very low, whereas he knows his effective rate of return for paying down debt is guaranteed. Since he has little income being reported for the tax year, the taxes owing on an RRSP deregistration will be minimal, he assumes. He may have himself convinced the strategy is best from a numbers perspective, but from a planner’s perspective, it puts him in a very precarious position if everything doesn’t go according to plan. What if he has an emergency and needs access to cash? Deregistering funds from an RRSP account could be easier than trying to get money from the bank if they require a credit assessment update, which includes looking at his employment status. Further, when markets have been choppy or in decline, many people feel less strongly about being invested and are more inclined to sell off their portfolios and deploy the funds elsewhere. Generally speaking, if you can buy when everyone is thinking it’s time to sell because of prolonged malaise in the market, you’ll do pretty well as an investor. You’re supposed to buy low, sell high, after all. I suggested he talk to a financial planner and discuss some of the curveballs that life can throw. He could look at a middle-of-the-road approach. In his case, that might mean paying off only half of his mortgage balance and retaining some of his RRSP assets. Contingency planning is an important part of personal finance. It might not be fun to expect the worst while hoping for the best, but you’ll be less likely to get caught out when life happens. July 29, 2011 OTTAWA— Globe and Mail Update Last updated Thursday, Jul. 28, 2011 11:33AM EDT Moody’s Investors Service Inc. has renewed Canada’s triple-A credit rating, citing the factors that helped the country emerge from the global financial crisis relatively unscathed, such as its ``economic resiliency, very high government financial strength, and a low susceptibility to event risk.’’ Even though governments across the country ran deficits to fight the recession, Ottawa and the provinces are ``on a track of fiscal consolidation,” the agency said in its annual report on Canada, and their debt loads will improve ``over the next few years.” Since the provinces also enjoy high credit ratings, the risk they pose to Ottawa’s books is deemed low even though their debt loads are ``relatively large,” the agency said. The main risks to Canada’s outlook are linked to the housing market and to Quebec’s ongoing sovereignty issues, Moody’s said, adding that the chances of either risk affecting the federal government’s credit rating is low. Given the share of residential mortgages backed by Ottawa through the Canada Mortgage and Housing Corp., a ``major downturn” in home prices could hurt the federal government’s balance sheet, Moody’s noted. Nonetheless, the agency reckons that ``even in an extreme scenario,” any added debt wouldn’t be enough to change its rating for Canada. ``As a large and diversified economy with a stable political system and strong regulatory framework, Canada has a low susceptibility to event risk,” the agency’s report says. ``Natural resource industries, a competitive manufacturing sector, and a well-developed and well-regulated financial market also support the country’s resiliency,” as does Canadians’ high per-capita income, Moody’s said. Moody’s attributes much of Canada’s comparatively strong economic performance since the downturn to the Harper government’s stimulus spending and the fact the Bank of Canada kept interest rates low, which encouraged borrowing and spending and shielded the housing market. Even though Canada is in many ways joined at the hip with the United States – which the agency this month placed under review for a credit downgrade amid the debt-ceiling impasse in Washington – Moody’s noted a number of ``important differences” between the two economies. These include the fact Canada’s economy puts a greater emphasis on trade, the fact Ottawa has more fiscal flexibility thanks to a smaller debt load, and also that the banking system and housing market in Canada are stronger and less vulnerable to shocks. ``Compared to other AAA-rated sovereigns, Canada’s general debt levels are near the median level, but the federal government’s position by itself is relatively strong,” the agency said, noting that total debt of all levels of government in Canada amounts to about 70 per cent of gross domestic product. At the same time, Moody’s noted that Ottawa’s annual budget gap is little more than 2 per cent of GDP after peaking at 3.6 per cent of GDP in fiscal 2009-10, and is forecast to be closed in 2014-15. But Moody’s also flagged what is likely to be a central political issue for years to come in Canada, noting that the government’s budget projections depend on a path for spending restraint that may difficult to achieve as the population ages and health care costs escalate. ``Whether expenditure restraint to this extent is sustainable is a question in the face of rising pressure on government resulting from the aging of the population,” the report says. ``In part, this will be a political question as to how health care costs are managed and shared between the federal government and the provinces.’’ July 28, 2011 By Vernon Clement Jones | 26/07/2011 5:00:00 PM RBC may be priming the pump for an interest rate hike at the Central Bank, its economists arguing prime should soon be pushed up in order to block vulnerable buyers from entering the housing market – that warning coming as banks continue to cut rates in order to win greater mortgage volumes. “There is a popular misconception that the Bank of Canada cannot afford to raise interest rates because this would prove too damaging for mortgage holders,” Eric Lascelles, chief economist for RBC Global Asset Management, says in a report released this week. “The opposite is, in fact, true. The reality is that the Bank of Canada cannot afford to delay raising interest rates, for precisely the same reason. The longer the bank delays, the more marginal borrowers will enter the market and be walloped when rates rise, and the further home prices will go above their equilibrium levels, only to tumble later.” The report was released on the heels of the Bank of Canada’s decision last week to maintain its overnight rate at 1 per cent. It cited global volatility in the U.S. and Europe as reasons for keeping the economic stimulus in place. In so doing, it has prolonged the current lending climate, one marked by tight margins and decreased profitability. Despite that, the banks have moved to undercut already rock-bottom pricing available through the broker channel in order to better compete for a dwindling number of originations. That climate has posed a risk to some of the channel’s smaller lenders, said one national network head.“The rate (hold), no question, is good news in terms of generating business and sustained the broker channel, as it has over the last couple years,” John Bargis of Mortgage Edge told MortgageBrokerNews.ca. “But the longer the rates remain at these levels, which is basically an anomaly, the longer the difficult period for our smaller lenders, now struggling with spreads. Holding the rate puts the squeeze on our mono-lines because they don’t ancillary products and services to sell to the client.” Lascelles is arguing that any further extension of those rates could compromise the country’s economic stability if it encourages unprepared borrowers to enter the housing market just before the inevitable rate increase. Still, the economist concedes that a relatively small portion of Canadians are most vulnerable to the shock of rising rates. That’s despite the high levels of household debt-to-income ratios, currently sitting at147 per cent. July 27, 2011 KATE HAMMER — EDUCATION REPORTER From Wednesday's Globe and Mail Published Tuesday, Jul. 26, 2011 8:34PM EDT Last updated Wednesday, Jul. 27, 2011 8:02AM EDT Lest history repeat itself, Ontario has laid the educational groundwork for a new generation of students who appreciate the perils of interest rates and debt, and know the real cost of borrowing money. The province’s Ministry of Education has released comprehensive teacher guidelines that identify places in the Grade 4 through 12 curriculum where financial literacy can be inserted into classes as varied as mathematics, computer science and native studies. Ontario’s is one of a number of education systems across the globe that, in the wake of the recent financial meltdown, were forced to take a hard look at how debt and personal finances were treated inside the classroom. Many Canadian provinces, including British Columbia, Manitoba and Ontario, have since been looking for ways to inject financial literacy into their curriculums. The question is, will it be enough? Probably not, says Gail Bebee, the author of No Hype: The Straight Goods on Investing Your Money, who also teaches night courses on investment planning for the Toronto District School Board. Ontario’s new guidelines are “just a resource guide, what the teachers can use if they want to … which is all well and good, but what I couldn’t see was a list of the core competencies which the education system is trying to impart on students by the time they graduate,” she said. She pointed to Utah as an example of a better system. Since 2008, high-school students in that state have been required to complete a half-credit course called “general financial literacy” to graduate. In mandating the course, the Beehive State has taken a stronger tack than Canadian provinces, which have generally stuck to sprinkling financial literacy throughout existing courses. Ontario, for example, suggests that in high school, “when studying classical civilizations, students could address aspects of trade, economics and use of money in ancient times,” according to the new teacher guidelines. The idea is that by spreading the financial lessons out, they’ll reach more than just those who are already inclined toward math and business courses. There’s also an advantage to disguising the lesson, said Casey Cosgrove, director of the Canadian Centre for Financial Literacy. “If you don’t call it ‘financial literacy’ it seems to be quite appealing to kids,” he said. “I think Ontario’s taken a huge step in the right direction.” Devan Aris, a 16-year-old Grade 11 student at Thomas A. Blakelock High School in Oakville, Ont., thinks finance is fascinating. He understands mortgages and interest rates and how they contributed to the recent recession, but he says he gained that knowledge through a combination of part-time jobs, his parents and an optional Grade 10 business course. “There’s lots of kids who don’t have jobs and they just use their parents’ money so they don’t get too concerned about how they spend it,” he said. Data support his claim: In a 2008 survey by Credit Canada, only 13 per cent of teens said they knew a lot about managing money, and they ranked taking a class in school as the best way to learn about it. Financial literacy has become such a hot topic in education that the Organisation for Economic Co-operation and Development is investigating the best ways to learn about it. Next year, for the first time, when 15-year-olds across the globe write the OECD’s math, reading and science tests that are used to rank the world’s education systems, some will also be tested on financial literacy. Eighteen countries, including the United States, Australia and New Zealand, have decided to participate, but Canada opted out. In Ontario, Education Minister Leona Dombrowsky said she was confident that the new guidelines would inject more personal finance into the classroom. “There are lots of opportunities that I think that teachers are going to be able to introduce the concept of borrowing money and making payments and how the interest adds to the overall price,” she said. “I think that concept is really important.” July 27, 2011 Team Triumph Mortgage Brokers Ottawa claims the highest number of mortgage professionals on this year’s Top 50 List.  Vernon Clement Jones delves into the reason for that and discovers that there are several Lisa Theriault drives a two-and-a half-ton GMC Yukon.  Actually, given that it’s “fully-wrapped” with black, white and red logos – all sporting the Mortgage Brokers Ottawa brand – it may weigh closer to three. “It’s my daily drive, and I don’t feel at all self-conscious about it, “laughs the broker and regional partner with one of the country’s largest firms.  “In case they miss the badging, my 27-inch chrome rims should help get your attention.  I’m very proud of our brand and am always out there as a representative of the business.” As far as marketing statements go, there may be more subtle ones, but probably few as effective. Theriault brought in $67 million in funded volume last year, earning her 21st spot on CMP’s coveted 2010 Top 50 Brokers list.  She’s not alone.  The 38-year-old was one of an astounding seven mortgage professionals at Mortgage Brokers Ottawa to make the cut. Mortgage Brokers Ottawa President and CEO Mike Hapke came 50th on the list, with managing partner York Polk, making it all the way to 14th, given his own $84 million in funded volume.  That’s only one ahead of another of the firm’s managing partners, Frank Napolitano, who attracted $77 million last year to earn 15th place, while the group’s fourth partner , Jeff Cody, brought in $57M in funded volume, earning him 32nd spot in the national ranking.  Regional Partner Murray Groen, with a funded volume of $60 million came in 29th.  And mortgage agent Darren Keck made the list at 45, with $42 million. The collective performance represents the single-best showing of any brokerage, not only this year, but of any since the inaugural listing in 2008.  While the group accomplishment is a nod to the demographics of the Ottawa market and the widespread acceptance of mortgage brokers as an alternative to the banks, concedes Hapke, it also speaks to the strength of the organization’s individual brokers.  They are, nonetheless, focused on moving forward as a team. “With our model we don’t lose top producers”, a pleased, if not entirely surprised Hapke tells CMP after receiving the standings.  “Our brand is exceptional in our region and with that comes loyalty.  We tend to continue to hold onto brokers after they’ve cut their teeth and come into their own.  When you’re aiming for a billion in sales this year, with only 60 brokers and agents, you tend to attract the crème de la crème.  So, it’s a mix of up-and-comers and established brokers, but the numbers that we have in the Top 50 speak for themselves.” Hapke and Napolitano launched the company in 2005, bringing their combined 40 years-plus of banking experience in tow.  They would later move their Elite Mortgage Team of 20 in 2006, two years later merging with Polk and Cody’s firm.  It’s one Hapke had, in fact, left to start up his own business three years earlier. Together the four successfully led the company to independence in 2010 before agreeing to partner with The Mortgage Centre Canada last fall.  That strategic move has already begun to add heft to the company’s presence in the Ottawa market, says Napolitano, pointing to its exclusive broker channel access in eastern Ontario to President’s Choice and CIBC product lineups.  Those offerings such as a cash-back switch and a one-year construction rate hold have better positioned Mortgage Brokers Ottawa as a direct competitor to the banks. “Being connected into a bank is not a bad thing, yet we have maintained our freedom in terms of offering clients access to all the other lenders we can access,” Napolitano says.  “We make it clear that we built our business based on what’s best for our clients.  Everything else is secondary.” The partners are candid about their tricks of the banking trade they’ve picked up from their years inside those financial institutions.  In fact, all but one of the seven Mortgage Brokers Ottawa brokers to make the Top 50 has an extensive banking background.  We’re trying to do exactly what the banks do in terms of branding, but with a local focus.” says Napolitano, the former TD mortgage specialist, who like most of the executive team drives a “fully wrapped” pickup no more and, certainly, no less promotional than Theriault’s.  “Through our advertising, our jingle and our community involvement we’ve become a recognized brand in Ottawa and that has helped us to compete with the banks.” Increasingly that brand acts as a calling card for Mortgage Brokers Ottawa agents and brokers, says Groen, but ultimately it’s the brokers themselves who are extending the company’s reach in a market where average incomes are some of the highest in Canada, buoyed by federal government jobs and a burgeoning high-tech sector. “If it’s a question of which came first – the brand or the brokers – it is the brokers,” Groen says.  “Because the people behind the brand have made the brand what it is.  Those of us on the list were in the industry before the brand was a brand, but now the brand has value that we have sort of imparted to it, and I’m sure it does help me now with referrals.” A bank-style public relations approach has gone a long way in terms of keeping Mortgage Brokers Ottawa top of mind with existing and potential clients.  Still, brokers in the capital city enjoy a higher market share than much of the rest of the country. “in Ottawa, it’s not predetermined that homebuyers are going to take their business directly to the banks and that they’ll just accept what their banks offer.” says Groen.  “The economy in Ottawa is a lot more stable than a lot of the rest of the country, and they are very well-educated and understand how a broker can help them.  But we don’t have 90 per cent market share yet, so there is an awful lot of room for growth.” Actively seeking new business remains the focus of all the company’s mortgage professionals, says Cody, even as the company’s strong Internet presence increasingly attracts younger clients more inclined to begin their search for a mortgage online. “It’s really still about building personal relationships,” says Cody, who obtained his brokers license more than 30 years ago, after leading a top Invis brokerage with then-partner Polk before teaming up with Hapke and Napolitano. “You can’t just sit on the web and expect business to flow in.” Both individual and company success have come from building a team approach to brokering even as brokers increasingly face competition from within their own ranks. “We grew exponentially very quickly and a large part of that was cementing brand recognition, “Theriault tells CMP.  “But also key was that we support one another.  If something works well, we share it.  Through training and marketing, and regular meetings with the entire company, we keep things in the open.  We like to see each other do well.” Part of that is knowing what individual strengths his brokers bring to the game and supporting them in areas where they need help, says Hapke. Of the 60 agents and brokers, 70 per cent have now agreed to lower commission splits in order to transfer administrative duties like storing documents, preparing closing documents, submitting deals for underwriting and collecting conditions to Hapke’s support team. We see it as having helped to create the kind of sales environment you need to help agents generate business,” says Hapke, who spends most of his time on corporate direction and strategic planning, but still managed to bring in $41 million in funded volume last year, most of it generated from referrals through past clients.  He’s not alone. “All of the Mortgage Brokers Ottawa people on the Top 50 list are veterans of the industry, no question,” he says. “They’re passionate and as driven as they were the first day I met them.  It’s what you need to be.” CMP July 26, 2011 From Tuesday's Globe and Mail Published Monday, Jul. 25, 2011 7:25PM EDT Last updated Tuesday, Jul. 26, 2011 9:20AM EDT As the clock ticks toward next week’s deadline set by the Obama administration for raising the $14.3-trillion (U.S.) debt ceiling, collars are tightening in Washington, capital markets are becoming more volatile, and pundits of all political stripes are ratcheting up the rhetoric. According to some, the financial world as we know it will come crashing down if no debt deal is signed, sealed and delivered by next Tuesday. But others, like U.S. Secretary of State Hillary Clinton, are essentially telling the rest of the world to relax: The politicians will set aside their typical Washington posturing in time to reach a compromise and lift the cap. But if intransigent Democrats and Republicans refuse to budge, the world’s biggest debtor will be sailing into uncharted waters. What happens if the debt ceiling is not raised by the Aug. 2 deadline? Global markets are already battening down the hatches in advance of the potential storm. Margins have been raised slightly on debt-related instruments in the futures market and the price for insuring U.S. debt in the credit default swap market has climbed to the highest level in a year and a half. But apart from a nasty market reaction if the worst comes to pass, there would be little other fallout, at least in the short tern. The government is not going to have to call on the International Monetary Fund for a bailout on Aug. 3, and it will not default on any of its bond obligations. The U.S. Treasury has several money-raising options in times of emergency, and it has undoubtedly examined all of them, despite frequent denials that there is a plan B. After all, the Treasury actually hit the ceiling in mid-May. Existing tax and other revenues are enough to cover more than half the government’s expenses, including its most pressing obligations – interest on the debt, Social Security, Medicare and military expenditures. The Federal Reserve can also dip into its hoard of about $2.6-trillion worth of Treasury bonds and other securities on its balance sheet to absorb whatever extra money the Treasury has to print. And the Treasury itself holds billions worth of mortgage-backed securities, as well as close to $400-billion in gold that it could sell or swap with the Fed. What will the rating agencies do? Any hint that Washington will not be willing or able to meet all of its bond obligations would almost certainly trigger rating cuts. Loss of its sterling Triple-A rating would not, by itself, trigger a widespread selloff of Treasury bonds. But it could add even more billions to the U.S. debt load, as investors demand higher premiums to hold U.S. assets. The higher costs would cascade down to U.S. corporations and even to individual consumers faced with renewing mortgage and other debt. That said, the rating agencies are likely to downgrade the United States at some point anyway, because of its soaring debt and deficits, even if there is no risk of default. What would happen to the economy? The impact could be severe and widespread if Washington delays social spending, halts less-essential services, stops paying military personnel, or postpones deals with outside contractors. Faced with higher borrowing costs and dimmer economic prospects, already-cautious corporations would curtail capital spending plans. Unemployment could worsen and the U.S. could be plunged back into recession. The fragile global economic recovery would not be able to withstand such strong U.S. downdrafts. What political fallout should we expect? Ask most Americans, and they will say the debt ceiling is too high already. And political gridlock has become an accepted way of life in Washington. But once cheques start being delayed for everything from Social Security to government salaries, outside contractor and vital state transfer payments, both political parties will have a lot of explaining to do to aggrieved constituents. The economic decline stemming from a sharp reduction in government social spending, and any cutbacks in public services, will turn into a destroyer of political careers for Democrats and Republicans alike. Why worry so much about borrowing limits? Can’t the Treasury just print its way out of this mess? Always a tempting solution for deadbeat sovereign borrowers; and the devalued U.S. dollar that would result would probably be good for the trade balance. But the country would end up deeply tarnished in the global community. And the resulting surge in inflation would inflict more damage on the U.S. economy than would a temporary cutback in government spending. July 26, 2011 Adrienne Brown SPECIAL TO YOURHOME.CA This summer has been hot, sunny and nothing but ideal for relaxing outdoors. While it’s the people that make the party, not the space, a functional and attractive backyard or balcony never hurt, regardless of the size. “When I look at an outdoor space, I like to think of it as an extension of the house. It’s like any other room,” says Jim Fairweather of Distinctive Spaces. Here’s how to spruce up your small space for summer entertaining: 1. Declutter “People often use their decks and balconies for extra storage,” says Fairweather. If you plan on using the space to entertain, the first thing you’ll need to do is stash those brooms, extra chairs and miscellaneous sports equipment elsewhere. Also think about how you can add extra storage without taking up too much space, such as investing in a deck box that doubles as a bench. “Anything that does double duty is great,” says Fairweather. 2. Define spaces What do you plan on doing in your space? Once you can answer this question, you can plan properly. There’s no sense in cramming a dining table and chairs into a small backyard if you’ll never use it. A small bistro set, two-person swing or even a hammock might be all you need. Fairweather suggests outdoor area rugs as a simple way to set off one area from another — especially if you’re struggling to figure out what direction your space should take. “Find one that inspires you,” he says, “then pull a colour from it to choose linens and cushions.” Keep your barbecue off to one side so you can play with what you have left. 3. Choose your furniture wisely Once you know what you need, you can begin to shop for any new furniture you may want. If you are happy with your key pieces, consider rearranging them to suit your designated zones. “Function will drive what you’re going to put out there,” says Fairweather. He says a glass table is great for a small area because, visually, it doesn’t take up much space. However, he says teak is also great for outdoor furniture because it’s durable and wears well. The same goes for wrought iron and many new wicker and plastic sets. “Always take a camera and tape measure,” says Fairweather. “Everything looks small at the store” when you’re standing under sky-high ceilings and the walls feel miles away, but you don’t want to get an item home to discover it doesn’t fit on your deck. If you expect to have a large crowd on your balcony (since that’s where people tend to congregate at summer get-togethers) you may want to explore folding chairs and bistro sets that can be tucked away when they’re not being used. 4. Add accessories and colour If you’ve picked neutral furniture, it’s easy to add splashes of colour here and there — and then change them when you tire of them. Fairweather suggests adding excitement with fun and funky dishes. Inexpensive acrylic plates are no longer the cheap, ugly dishes they once were — they can actually be quite attractive. Torches, candles and outdoor fireplaces are also easy ways to liven up a space. Of course, always choose fire-focused decor based on your space and what your local bylaws or building regulations allow. Don’t forget about all the accessories you have inside, too. A centrepiece of fresh flowers in one of your regular vases instantly refreshes any table before a dinner party. 5. Make the space your own Fairweather says “you don’t need to go crazy” to personalize your space. Try placing a flowering tree in each corner or add a water feature — you can even get some that hang on a wall, so you don’t have to find extra floor space for it. If space is really tight, opt for hanging baskets, railing planters or small pots that can be moved inside if necessary. Ultimately, though, whether you hang outdoor curtains and deck out your deck or keep things fairly simple with just a hammock and a barbecue, your outdoor space should work for you. July 25, 2011 Jul 21, 2011 – 8:30 AM ET | Last Updated: Jul 21, 2011 8:47 AM ET The Canadian dollar jumped to a new 3-1/2 year high on Thursday, tearing through an April peak, amid expectations for higher interest rates in Canada and burgeoning foreign interest in Canadian assets. The loonie reached US1.06.13¢, surpassing the April peak of US105.98¢ to its highest level since November, 2007 when it was at US105.99¢. It had closed on Wednesday at US1.056¢. The loonie may have also been boosted by an EU summit draft proposals which made reference to extending European Financial Stability Facility loans and allowing the rescue fund to intervene on a precautionary basis. The draft proposal gave the euro a lift against the U.S. dollar and helped send Italian bond yields lower. “Governor Carney has made a slight shift in tone to slightly hawkish tone which is positive for the Canadian dollar because higher interest rates in Canada tend to be positive for currency,” said Camilla Sutton, Chief Currency Strategist, Scotia Capital. “Secondly we have a generally weak U.S. Dollar over the year – and what we have for Canada is a small, open economy which is a good diversification vehicle for those not wanting European or U.S. exposure.” July 21, 2011 A Texas man has claimed ownership of a house recently valued at $300,000 for just $16 by taking advantage of a rare circumstance and law. According to the Houston-based KHOU TV station, Kenneth Robinson moved into a house previously under foreclosure for a year, located on a well-manicured prestigious block in the town of Flower Mound. The former owners were forced to leave after the house went into foreclosure, but then the mortgage company also went out of business.Robinson took advantage of a little known law called adverse possession that allowed him to move in and own exclusive bargaining rights with the previous owner. If he’s able to stay within the property for three years, Robinson will take full ownership by being awarded the title. Adverse possession was created to allow someone to move in and prevent an abandoned home from falling into disrepair. The website http://adversepossession.com promotes the practice, even pointing to the possibility of doing it in Canada.Robinson told the Texas TV station that until he wins the title, he doesn’t expect the mortgage payments to be made by the previous owner, nor does he expect an expensive legal battle with the existing mortgage holder, which would force him out. Until then, he’s been living without electricity or water due to the lack of deed, but the reward after three years seems worth it.“This is not a normal process, but it’s not a process that’s not known,” Robinson told KHOU.Neighbours, however, are not happy, calling Robinson a squatter who should be forced to pay for the house July 21, 2011 The option of rent control and reform of it has been debated across Canada, especially in cities like Winnipeg and Ottawa, where vacancies are low and rents are rising. But Real Estate Investment Network President Don Campbell told CRE Online such rent control regulations have unintended consequences that will hurt investors, developers, the government, and even renters. Politically, controlling the rising cost of rents might look good to voters, but it will be a long-term detriment all around, he said.“Often these bills are passed due to the optics of the bill and often throughout history they are instigated in election years,” he said.Renters who mostly support these controls fail to realize they would drive up rents, he said. There are three reasons this would hurt renters, he said:1.     They severely restrict the ability for anyone to financially build rental-specific properties (apartment buildings), thus driving more renters into the more costly option of condo properties.2.     Rents increases will hurt new renters each time properties change hands. Although rent increases are controlled by government guidelines, investors can raise rents back to market levels as soon as tenants move out. Because of a lack of supply, these increases could be quite high.3.     Landlords would be forced to decrease the amount of money spent on repairs and maintenance, thus lowering the quality of the living space for tenants.The government would also face some problems, said Campbell:1.     They will be pressured to provide incentives (like the 1970s and 1980s) to get rental specific buildings built.2.     As actual rents increase, the government will have to increase funding to affordable housing projects.3.     The disputes between tenants and landlords will increase, occupying government resources.4.     What the government gains in “optics,” they will lose in increased spending in these areas.Investors, often some of the most vocal opponents against rent controls in Canada, will no doubt be affected in a number of ways:1.     In Ontario, limiting rents on post-1991 buildings will lead to a decreased amount of funds available for maintenance. 2.     Many investors will let their buildings deteriorate as capital expenditures spending will decrease.3.     Investment money will be pushed out of the region to less regulated areas of the country.Lastly, Campbell said developers will also be dissuaded from building apartment rental buildings knowing that interest rates and energy prices will increase at a faster rate than rents. “Money will be provided elsewhere where it provides a better yield,” he said. July 21, 2011 ROB CARRICK From Wednesday's Globe and Mail Published Tuesday, Jul. 19, 2011 5:13PM EDT Last updated Tuesday, Jul. 19, 2011 7:01PM EDT The debt problems of the global financial system are your problems. So pay down your credit card, credit line and mortgage. Making your household balance sheet tidier has the fortunate spillover effect of saving our economy. From what? Just look at what’s happening in the United States: The housing market is a disaster, weak consumer spending has crippled the economy, and politicians are grappling with how to fix things through a mix of government spending cuts and tax increases. The Bank of Canada gave you another reason to get your debts in line on Tuesday, when it signalled, in its typically obscure way, that interest rates will rise in the foreseeable future. The bank did this by deleting the world “eventually” from a discussion of rate increases. Rising rates will hit you in two stages. The first is instant – when the central bank raises its overnight rate, the major banks increase their prime lending rates by an identical amount. That, in turn, means higher interest charges for people with variable-rate mortgages, lines of credit and floating rate loans. The second phase is when mortgages and other borrowing products with fixed rates start to rise. If you’re buying a house or renewing a mortgage in the next couple of years, you’re going to pay more than you would now. How much more remains to be seen. You’ve heard this before. For the past 18 months or so, the nagging has been non-stop from Bank of Canada Governor Mark Carney, the federal finance minister and this column, among others, about the need to pay down debt before rates rise. And you’ve listened. CIBC World Markets reported last week that debt levels are rising at their lowest pace since 2002. If you take mortgages out of the calculation and adjust for inflation, Canadian borrowing has slowed to the lowest level since the early 1990s. Should current credit trends persist, we could see non-mortgage borrowing actually decline in the second half of the year. As for mortgage borrowing, that should take care of itself if predictions about a correction in housing prices are right. All in all, we’re doing okay here in Canada. An orderly decline in borrowing is much preferred to what’s happening in the United States. A report in The New York Times on Sunday documented how American consumers have become miserly after years of binging on debt. The decline in spending is so drastic that it’s being blamed for stagnant job growth. Measured in terms of sales per 1,000 people, housing is down 24 per cent since 2007, automobiles are down 26 per cent and washers and dryers are down 26 per cent. The Economist reported recently on how almost one in seven Americans was using food stamps as of April. The U.S. unemployment rate was 9.2 per cent in June, double what it was five years ago, before the global financial crisis began to develop. This is the background that explains the political battle in Washington about whether to increase the ceiling on government debt. The United States can finance its operations and meet its debt obligations to bondholders around the world – it just needs to borrow more money to do it. There has been a lot of worrying lately about Greece and other European countries that are spending more then they’re generating in revenue. Now, it looks like China could be added to the list of countries with debt issues. In a report issued Tuesday, TD Economics said questions are being asked about the quality of the loans issued by Chinese banks in a flurry of lending that was meant to help stimulate the economy following the financial crisis. Reducing your own debts is how we avoid these kinds of problems here in Canada. Each individual with excess debt is a stress on the system. Add enough stress and we get the stories playing out in other countries. There have been a few times in the past couple of years where interest rates seemed poised to rise and then didn’t because of global financial uncertainty. So the Bank of Canada’s time frame for rate increases is still somewhat open-ended. Even when rates do start to rise, it will likely be in small increments of one-quarter of a percentage point. That means you still have time to reduce your debts. Start with your credit cards because they have the highest interest rates, and work down to your loans, credit lines and your mortgage. Every dollar in debt you pay off makes our economy stronger. July 20, 2011 For immediate release 19 July 2011 Contact: Jeremy Harrison 613 782-8782 Ottawa - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economic expansion is proceeding broadly as projected in the Bank’s April Monetary Policy Report (MPR), with modest growth in major advanced economies and robust expansions in emerging economies.  The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment. While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon. The Japanese economy has begun to recover from the disasters that struck in March, although the level of economic activity in that country will remain below previous expectations.  In contrast, growth in emerging-market economies, particularly China, remains very strong. As a consequence, commodity prices are expected to remain at elevated levels, following recent declines. These high prices, combined with persistent excess demand in major emerging-market economies, are contributing to broader global inflationary pressures.  Widespread concerns over sovereign debt have increased risk aversion and volatility in financial markets. In Canada, the economic expansion is proceeding largely as projected, although the expected rotation of demand is somewhat slower than had been anticipated. Household spending remains solid and business investment robust. Net exports remain weak, reflecting modest U.S. demand and ongoing competitiveness challenges, particularly the persistent strength of the Canadian dollar. Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong. Following an anticipated slowdown in growth during the second quarter due to temporary supply chain disruptions and the impact of higher energy prices on consumption, the Bank expects growth in Canada to re-accelerate in the second half of 2011. Over the projection horizon, business investment is expected to remain strong, household spending to grow more in line with disposable income, and net exports to become more supportive of growth. Relative to the April projection, growth in household spending is now projected to be slightly firmer, reflecting higher household income, and net exports to be slightly weaker, reflecting more subdued U.S. activity. Overall, the Bank projects the economy will expand by 2.8 per cent in 2011, 2.6 per cent in 2012, and 2.1 per cent in 2013, returning to capacity in the middle of 2012. Total CPI inflation is expected to remain above 3 per cent in the near term, largely reflecting temporary factors such as significantly higher food and energy prices. Core inflation is slightly firmer than anticipated, owing to temporary factors and to more persistent strength in the prices of some services. Core inflation is now expected to remain around 2 per cent over the projection horizon.  Total CPI inflation is expected to return to the 2 per cent target by the middle of 2012 as temporary factors unwind, excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored. The Bank’s projection assumes that authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered. July 19, 2011 Vito Pilieci, Postmedia News · Jul. 16, 2011 | Last Updated: Jul. 16, 2011 3:04 AM ET The trend toward green living has finally caught the attention of the banking industry. Banks have watched as consumers have made greener choices in everything from washing detergent and light bulbs to high-efficiency furnaces and solar energy panels. With consumers interested in greening their lives, most of Canada's major banks have seen the opportunity to offer "green mortgages," which offer homebuyers a discounted interest rate and other incentives to buy environmentally sensitive houses or perform upgrades aimed at lowering their environmental footprint. "We made the decision [to offer green mortgages] to respond to that market," says Katie Archdekin, head of mortgage products for BMO. "We wanted to encourage customers to make positive change and positive choices for the environment. We've had great response." Consumers, especially first-time buyers, are increasingly looking to green home upgrades to help the environment and lower the carrying costs of owning a new home. According to surveys conducted by Leger Marketing, while Canadians are interested in lessening their impact on the environment, the decision to buy a "green home" is really being driven by saving cash. More than 59% of respondents cite financial savings as the main reason for making ecofriendly upgrades and purchases. The results are not surprising, considering more than 51% of survey respondents say utility costs are the biggest surprise financially when it comes to owning a home. Having new windows, doors and a high-efficiency furnace can go a long way to help make those carrying costs more palatable, according to Leger, which found 92% of Canadian respondents recognize the cost advantages of energy-efficient home upgrades. It also found nearly half of all home buyers plan to make investments in energy-efficient upgrades in the next year, especially with the anticipated extension of the federal government's ecoENERGY Retrofit program (see story at top of page). The program allows Canadians to write off a portion of their green home renovations on their taxes. The green trend isn't just affecting resale homebuyers. According to an EnerQuality Green Building survey released in November 2009, more than 40% of Ontario homebuyers are willing to pay up to $10,000 more for a new green home, or a home that is Energy Star certified. That number is almost double the 22% of homebuyers who were willing to spend that amount of money in 2008. Farhaneh Haque, regional manager of Mobile Mortgage Specialists at TD Canada Trust, says that with the additional money, buyers are willing to spend on green homes and upgrades, many have been inquiring about discounts and incentives from the banks to help them. "Environment has become increasingly popular. "A lot of politicians are talking about it, the general public is talking about it, there are a lot of home renovation projects that you see around or on TV that are talking about it, major suppliers of home appliances are talking about it. It's become very evident in the market," Ms. Haque says. "It just made a lot of sense to have a product that supports our clients' motivations. It encourages clients to seek out home renovations and take part, or participate, in environmental initiatives. It encourages green behaviour." While almost all of Canada's big banks are offering green mortgages, the loans aren't open to just anyone. Buyers must qualify for the green loan by proving the house they are buying meets certain green energy standards, or that they will be completing certain green upgrades to the home shortly after moving in. Incentives offered by the banks vary. Some will provide rebates equal to the cost of a home energy audit, which is around $300, and then a cashback incentive that can be used for green upgrades. Others offer discounts to posted mortgage rates. ECO MORTGAGES With so many different "green" mortgage offerings out there, wading through them can be a daunting task. Below is a list of a few of the more popular options: ? RBC Energy Saver Mortgage Receive a $300 rebate on a home energy audit. Get a five-year, fixed mortgage with an annual interest rate of 4.34%, more than 1% lower than the regular posted five-year rate. TD Canada Trust Green Mortgage Offers customers 1% off the posted interest rate on a five-year, fixed-rate mortgage. Customers also receive a cash rebate of up to 1% of the amount of the mortgage when home buyers make Energy Star-qualified appliance purchases and home upgrades or purchase CSA-approved solar panels. TD will also donate $100 to the TD Friends of the Environment Foundation charity for each Green Mortgage opened. BMO Eco Smart Mortgage Offers buyers of green properties a 3.89% annual interest rate on their mortgage. In order to qualify for the BMO Eco Smart Mortgage, the home must meet certain requirements as confirmed by a third-party appraiser (or energy auditor) arranged by BMO. Canada Mortgage and Housing Corp. (CMHC) incentive If a person uses CMHC insured financing to buy an energy-efficient home or purchases a house and makes energy-saving renovations to make it more energy efficient, a 10% refund on the mortgage loan insurance premium may be available. July 18, 2011 Financial Post · Jul. 15, 2011 | Last Updated: Jul. 15, 2011 10:02 AM ET OTTAWA — Home sales rose by a seasonally adjusted 2.6% in June from the previous month, a sign the housing market is on a “solid footing,” the Canadian Real Estate Association said Friday. Sales activity remained stable in Toronto, with gains recorded in Victoria, Calgary and Montreal, as well as in the Ontario cities of Ottawa, London and Hamilton, CREA said. However, monthly sales declined in Vancouver and the nearby Fraser Valley. “The Canadian housing sector remains on a solid footing,” said CREA chief economist Gregory Klump. “The rise in monthly home sales activity at the end of the second quarter, upbeat business sentiment and hiring intentions, and signs that the Bank of Canada is in no rush to raise interest rates bode well for home sales activity and prices going into the second half of 2011.” On an unadjusted basis, sales were up 10.8% in June from the same month last year. On Wednesday, TD Economics said Canada’s housing market is set to undergo a “modest” correction, with resale activity poised to drop 15.2% and average prices likely to fall 10.2% over the next two calendar years. Still, another report this week showed home construction rose more than expected in June, led by a jump in single-unit activity. Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts was 197,400 units last month, up 1.7% from a revised 194,100 units in May. July 15, 2011 David Pett, Financial Post · Jul. 14, 2011 Last Updated: Jul. 14, 2011 9:40 AM ET Things are definitely looking up for the Canadian economy, but don’t bank on interest rates rising anytime soon.  With Europe’s credit mess spilling over and the faltering U.S. recovery eliciting serious talk about QE3, it’s pretty much unanimous the Bank of Canada will stand pat when setting its policy direction next Tuesday and may not budge until later this year or next year.  “The arguments are there for the Bank of Canada to start hiking rates next week, but we increasingly think that this fall might even be too early given the problems we are seeing in the global economy,” said Jimmie Jean, an economic strategist at Desjardins Capital Markets based in Montreal.  Despite encouraging news over the past week, including solid housing and jobs numbers and improving business sentiment that suggest Canada is bucking the global slowdown, not one of 37 economists and strategists recently surveyed by Reuters expects the Bank of Canada to hike rates July 19.  While some do expect a 25-basis-point increase in September, the median forecast predicts the central bank will leave its key policy rate at 1% until the fourth quarter.  Mr. Jean has pushed his rate-hike expectations out to December. In his mind, as positive as Canadian economic data have been lately, there is no urgency for the Bank of Canada to tighten policy when both Europe and the United States, the world’s two biggest markets, are struggling.  If Europe’s sovereign crisis results in a country defaulting on its debt or escalates in some other manner, it could shock the global financial system by straining funding markets for banks — Canadian ones included — to create another liquidity crunch, he said.  Meanwhile, prospects of the U.S. economy regaining its footing in the second half of the year seem to be diminishing, especially following last week’s dismal jobs report and now U.S. Federal Reserve chairman Ben Bernanke has raised the possibility of another round of quantitative easing.  “That was pretty firmly ruled out just a few weeks ago and now the possibility is being raised,” Mr. Jean said. “There’s no question that if the Fed goes QE3, the Bank of Canada is not going to hike rates.”  Karen Cordes Woods, a financial markets economist at Scotia Capital Markets said the risks of tightening monetary conditions currently outweigh the benefits and she doesn’t think the Bank of Canada will move on rates until the second quarter of 2012.  She said material tightening is being imposed on the economy from fiscal retrenchment and the strength of the Canadian dollar to stricter mortgage lending guidelines and elevated commodity prices that continue to crowd real wage growth despite the improvements in the labour market.  Although there is recent evidence of inflation creeping into the economy, it’s not nearly enough to justify a rate hike and Ms. Cordes Woods believes a move to tighten by the Bank of Canada would only put more upward pressure on the dollar and represent an unwanted headwind for the economy.  “The Bank of Canada still has time to stay on the sidelines,” she said. “They will do what they see fit given the conditions.” July 14, 2011 Shelley White Globe and Mail Update Posted on Monday, July 11, 2011 6:39PM EDT I recently wrote about my kitchen renovation for Home Cents, detailing how I managed to keep my budget under $25,000 while still ending up with a functional and beautiful room. There were a lot of comments (thanks for those, by the way) - some people thought I’d paid too much, some thought I’d paid too little. But there did seem to be a consensus that the post demanded some photographic evidence. So, due to popular demand, here are the before and after photos of my kitchen renovation. And please note: I took them myself, so excuse my not-quite-awesome camera skills. Although I’m enormously pleased with how the renovation turned out, I certainly wouldn’t say the project was free of mistakes. In fact, there are some small things I might do differently if I had to do it all again (you may spot a couple of those in the photos, in fact). So how can you avoid renovation missteps before they happen? HGTV has put together a useful collection of the 25 Biggest Renovating Mistakes. It’s quite a comprehensive list, but here’s a sampling of some of the factors I could relate to: Gutting Everything It can be tempting to want to just tear everything out - including the walls - and start from scratch. But that is where the additional costs can come creeping in. My contractor wisely elected to take a look inside the wall we were going to take down before totally ripping it out. Once we found out that tearing the wall would add challenges and money to the job, we changed the plan and kept the wall. “I see this time and time again where people just start, and they think they’re going to pull a piece of wallpaper off, and by the time the process is over, they’ve completely gotten themselves into a deep, dark hole that’s very difficult to get out of,” says Mr. Eric Stromer, host of home reno show Over Your Head. Inaccurate Measurements I measured once, twice, three times and then again before ordering cabinets. My contractor was also meticulous with his measurements, but I could see how things could go quickly off the rails is someone was sloppy or rushed. When dealing with countertops, always choose a company that will come and do the measuring for you, preferably using a cardboard template. That way, the onus is on them to ensure it fits correctly. That also allows you can take a look at the template and make sure you’re getting the shape you want. When you’re talking about a slab of stone worth thousands of dollars, you don’t want to take any chances. Going Too Trendy “People often make the mistake of wanting to be too hip and trendy in their new home by picking the latest, hottest, coolest things,” says Ms. Carmen De La Paz of HGTV show Hammer Heads. “What they don’t take into consideration is that trendy means that it’s short term.” Five years ago I had my heart set on aqua-coloured glass tile for my kitchen backsplash. Sure, it would have looked good for a couple of years, but take it from someone who really loved her royal blue and bright yellow kitchen when she painted it 11 years ago – your taste will change. Unless you’ve got the extra cash to redo your kitchen, the best thing to do is keep it classic and simple. I think our choices will stand the test of time, but you can be the judge of that. Ignoring Lighting Hammer Heads carpenter Ms. De La Paz put it this way: “Another mistake that homeowners will often make is not taking into consideration the lighting in their home. The lighting in your home can completely change the colors, the feeling, the ambiance.” In other words, ignore lighting at your peril. When I first planned our new kitchen, I completely forgot about lighting. Our old kitchen had one overhead lamp that cast a lot of shadows. Thanks to our contractor’s suggestions, we’ve got a number of pot lights on a dimmer plus under-cabinet lighting, and the difference is vast. Failure to Anticipate Chaos Now that it’s over, I can look back on our renovation experience and think, “It was a piece of cake.” But around week three, our kitchen was an utter mess. For readers that wondered why my family and I spent $2,200 to rent a condo instead of sticking it out at home – that place was a dust pit. Moving out was essential for our sanity and our health - drywall dust is not good for anyone. Your reno might go smooth as molasses, but just in case, it’s a good idea to assume it will be dustier, messier and more annoyingly inconvenient than you ever could have imagined. July 13, 2011 TORONTO, July 12, 2011 /CNW/ - Boomers started 2011 with good intentions to put more away for retirement. However as the warm weather signals the mid-point of the year, many don't feel they are delivering on their 2011 goals when it comes to building their savings. In a recent CIBC poll conducted by Harris-Decima, almost one-third (30 per cent) of respondents aged 45-64 felt they were doing a poor job of building their savings so far in 2011, including 17 per cent who rate their progress as "very poor". Overall, less than half of boomers surveyed (42 per cent) believe they are making good progress in building their savings so far in 2011. These results suggest boomers are not placing enough emphasis on an area they cited as their primary focus at the start of the year. In a survey of Canadians' top financial priorities for 2011 released by CIBC in January, boomers were the most likely to say that planning for their retirement was their top financial priority. Yet, the most recent CIBC/Harris Decima poll shows that just over half of boomers are proactive when it comes to building their savings: Only 53 per cent have a regular savings plan in place where they automatically put money away each month 58 per cent have a budget in place for themselves that they track each month 61 per cent have met with an advisor in the last 12 months "While boomers have taken the important first step of identifying retirement as their top financial priority, some don't feel confident about the progress they have made when it comes to building their savings so far in 2011," commented Christina Kramer, Executive Vice-President, Retail Distribution and Channel Strategy, CIBC.  "Savings is clearly a priority for Canadians who are approaching retirement, and seeing only half of Canada's largest demographic with a regular savings plan in place suggests a significant opportunity for more boomers to start saving on a regular basis." The good news is there is still time to get back on track before the end of the year.  Survey results indicated that simple steps can lead to feeling better about your progress in building your savings: Putting money away as part of a regular savings plan makes a significant difference in building savings over the long term. Among boomers who feel they have made good progress in building their savings so far in 2011, 70 per cent have a regular savings plan in place.  Among those who feel they have done a poor job of building their savings in 2011, only 32 per cent have a regular savings plan. Meeting with an advisor who can guide your savings efforts and help you structure your finances was also identified as important in the survey. Boomers who were positive about their savings progress were likely to have met with an advisor, with 72 per cent saying they had met with an advisor in the last 12 months.  Among those who feel they have done a poor job of building their savings in 2011, only 48 per cent had met with an advisor. "There's a clear link between feeling positive about your savings progress so far this year and certain key activities like having a regular savings plan in place, or meeting with an advisor to discuss your overall financial picture," added Ms. Kramer. "Meeting with an advisor can help to ensure your savings are on track to meet your income targets in retirement." Ms. Kramer also believes there is an opportunity for those already saving regularly to ensure they review their plans on an ongoing basis. "Even among boomers who have a regular savings plan in place, the financial strategy they created a number of years ago may need to be updated, including the amount they are putting away each month as they near retirement," she says. Ms. Kramer adds that once boomers have established a regular savings plan with their advisor, they can begin to look at the broader investment options that may be right for them to optimize retirement income, such as deciding how to utilize TFSAs versus RRSPs and other options. Data Highlights: Boomers' evaluation of their progress towards their savings goals thus far in 2011: Very Good - 14%Good - 28%Fair - 26%Poor - 13%Very Poor - 17% Percentage of boomers who have consulted with a Financial Advisor in the last 12 months, regionally: Atl. - 53%Que. - 59%Ont. - 63%Man./Sask.- 69%Alb. - 64%B.C. - 59% Percentage of boomers who have a regular savings plan in place where they automatically put money away each month, regionally: Atl. - 49%Que. - 51%Ont. - 57%Man./Sask.- 56%Alb. - 51%B.C. - 52% Regional perspective of boomers who have a monthly budget in place that they track each month: Atl. - 72%Que. - 60%Ont. - 62%Man./Sask.- 63%Alb. - 46%B.C. - 45% Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 854 Canadians aged 45-64 between May 26 and June 5, 2011. A sample of this size has a margin of error of +/- 3.4% 19 times out of 20. July 13, 2011 Eric Lam, Financial Post · Jul. 12, 2011 Home builders swung into action this spring, with June capping the best three-month showing since last fall, figures showed on Monday. While Canada's strong June housing starts data caught many by surprise, it was the even-stronger revisions to prior April and May figures that surprised economists. The data suggest the rough patch the Canadian economy ran into in the second quarter may not be as bad as initially thought, and the results also bode well for second-half growth. "The whole package of the three months combined was quite a bit higher than expected," Robert Kavcic, economist with BMO Capital Markets, said Monday. "The month-over-month increase in June wasn't much higher than expectations but the fact that we got those big revisions put Q2 a lot higher than we were expecting," Mr. Kavcic said. Data from government housing agency Canada Mortgage and Housing Corp. (CMHC) showed 197,400 seasonally adjusted annualized housing starts in June, up 1.7% from May and well ahead of consensus forecasts of 185,000. Housing starts for both May and April, however, were revised to 194,100 from 183,600 and 178,700, respectively. This represents a 5.7% revision for May and an 8.6% change for April. Overall, housing starts gained 6.7% quarter over quarter, the first gain in three quarters. "This is a good sign for the economy," Mr. Kavcic said. "Obviously, construction will be a good contributor of growth in the second quarter. It's a little bit fast, maybe a little bit of overbuilding, but that's not a concern yet. We're still well below starts levels seen before the recession, nowhere near what it was like between 2003 and 2008 when we were regularly hitting 200,000-plus." The CMHC attributed the strong showing in June to an 11.1% surge of single-family urban starts in May. Urban multi-unit construction, which includes condomin-iums, apartments and duplexes, contracted 3.1% while rural starts declined 2.1%. Ontario markets gained the most, up 24.1% in June. British Columbia, home to the most overheated market in Canada in Vancouver, actually had starts contract by 27.6%. This could be residual effects of the multi-unit housing boom in the run-up to the 2010 Vancouver Winter Olympics. Some locals have considered the many multi-storey athletes' residences built for the Games to be overpriced, leaving many finished but empty suites in the city and putting a damper on new starts, Mr. Kavcic said. Even so, the overall starts trend has been stable in British Columbia so unless the decline continues, June may be a blip as home prices, particularly at the very high end, remain far out of whack with the rest of Canada. David Onyett-Jeffries, an economist with RBC Economics Research, said the updated figures show the gap between construction permits and construction starts in recent months is narrower than previously thought. "Eventually that gap was going to close. At least now we see there was an underlying strength, and what the revisions did was show that that gap was smaller," he said. "In terms of what drove this, we've had better-than-expected employment gains and interest rates have remained low, so both have been positive for housing demand." erlam@nationalpost.com July 13, 2011 Roma Luciw Globe and Mail Blog Posted on Friday, July 8, 2011 5:27PM EDT My husband and I are blessed in many ways. We have our health, wonderful children, fulfilling jobs and a beautiful home. We have something else that many people would kill for: a contractor in the family. Over the years we have renovated a vast majority of our aging Toronto home. Not because we are flush with cash, but because we needed to accommodate our growing family. With every renovation, my brother has turned out to be worth his weight in gold. On the heels of a housing boom, Canadians are renovating in record numbers, pouring thousands of dollars into upgraded kitchens, bathrooms, basements and decks. Not everyone has the luxury of having a renovator they trust at their fingertips. And given that my facebook account is packed with people looking for good contractors, it made me wonder where other people find theirs. Natalie Scollard-Wear and her husband are in the process of renovating the kitchen of their forty-year-old Calgary townhouse. They hired a contractor to put in 320 square feet of new floor, new baseboards, a new tile backsplash, a new countertop, a new kitchen sink and faucet. They also asked him to improve their space by moving the kitchen island. Ms. Scollard-Wear says she found her contractor by chance. “First I saw a truck driving by with the name of the company. Then I saw a news article in the Calgary newspaper about a good deed, where this contractor was building a home for a less fortunate family.” Ms. Scollard-Wear, who works for the Real Estate Council of Alberta, checked the contractor's rating on the Better Business Bureau before having him come out to give her an estimate. She spent hours combing through the BBB website, a process she described as “frustrating,” and got quotes from two other contractors. She did not go with the cheapest contractor, but rather the one who felt most trustworthy and allowed them the most flexibility. Part of the challenge in finding someone, she said, was that she and her husband budgeted about $15,000 for their project, which many contractors dismissed as too small a job. According to a survey by Canada Mortgage and Housing Corp., Canadians spent $25.8-billion on home renovations in 2009, with the average project costing about $12,100. The CMHC has an excellent website with tips for how to find and choose a contractor, what questions to ask them during an interview, how to get written estimates and a sample contract. So how do people who are not related to a contractor find one? Here are few ideas: 1) Word of mouth Ask your friends, family and neighbours. Referrals are a great way to find someone. If a person you know and trust is happy with their work, chances are you will be too. 2) Signs in your neighbourhood This is another good way to find contractors who work in your area. When walking, biking or driving in your neighbourhood, keep an eye peeled for renovators’ signs on front lawns. 3) Through your real estate agent or architect Sometimes people in the real estate business will be able to recommend someone you can get in touch with about home renovations. Similarly, if you used an architect to design your new space they might be able to suggest renovators for you to interview. 4) The Internet There are a number of websites people looking to renovate can check out. They include HomeStars.com, casaGURU.com and uknowa.com, among others. 5) Better Business Bureau Check with the BBB to see how the contractors in your area stack up. This is a great place to find out whether customers have had problems with them, as well as whether they are accredited and insured. July 12, 2011 Friday July 8, 2011, 11:15 am EDT Warren Buffett acknowledges that this morning's June jobs report is disappointing, but he's sticking with the economic optimism we heard in yesterday's CNBC live interview.   While some are saying the economy may be heading back to a recession,Buffett tells Bloomberg this morning, "I would bet very heavily against that. How fast the recovery will come, I don't know. I see nothing that indicates any kind of a double dip."       HOW BUFFETT WOULD FIX THE DEFICIT         Even so, he says President Obama can't be happy with this morning's report from the Labor Department that payrolls increased by just 18,000 in June as the unemployment rate increased to 9.2 percent.   "It means that we're still a ways off from getting to where we should be. We're seeing growth around the world, but it's not mushrooming."   Buffett repeated his belief that once the residential construction rebounds, "We will come back big time on employment."   He's predicting a decline to an unemployment rate of 6 percent "within a few years."                 July 11, 2011 CBC.ca Friday July 8, 2011, 11:48 am EDT The U.S. added 18,000 jobs in June, far fewer than the 120,000 that many economists had been hoping for, the U.S. Bureau of Labour Statistics reported Friday. "The June jobs report was a shocker," said Nigel Gault, chief U.S. economist for IHS Global Insight. "It was far worse than expected, and weak on all key dimensions — job creation, unemployment, the length of the work week, and hourly earnings." The unemployment rate edged up by one-tenth of a percentage point from May, to 9.2 per cent. The rate is up by 0.4 of a percentage point since March. Employment in the private sector rose by 57,000, the weakest month since May 2010, while government employment fell 39,000. Economists had initially been expecting to see 90,000 jobs added in June, according to a survey by FactSet. But after the release of strong economic data earlier this week, many economists raised their estimates to 120,000 jobs, and some jumped to 200,000. The June numbers are especially disappointing because a big jump would have suggested the 54,000 jobs added in May was a temporary setback. But with the June increase so low, the economic recovery is still moving very slowly. The revision of the increase in May job numbers, cut by more than half to 25,000 from 54,000, was another discouraging sign. "The recent pattern of jobs suggests that the economy hit a brick wall in May," Gault said. Stock markets dropped with the report, indicating the concern with the progress of the recovery. There are now 14.6 million people officially unemployed in the U.S, and since March, the number has risen by 545,000, the department said. There were another 8.6 million people working part time because their hours had been cut back or because they were unable to find a full-time job. And 2.7 million people were not in the labour force, but wanted employment, were available for work, and had looked for a job in the prior year. But they were not counted as unemployed because they had not searched for work in the four weeks before the survey. July 11, 2011 Detailed analysis shows a highly segmented market that will see prices drop over time, but preconditions for a market crash don't exist TORONTO, July 7, 2011 /CNW/ - The Canadian housing market is becoming highly segmented and multi-dimensional which is making traditional measures, like average prices, increasingly irrelevant in gauging the health and state of the sector, finds a new report from CIBC World Markets Inc. "Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable," writes Benjamin Tal, Deputy Chief Economist at CIBC, in his latest Consumer Watch Canada report. "Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details—and there the picture is still not pretty, but much less alarming." He notes that while the average house price in Canada rose 8.6 per cent on a year-over-year basis in May, that number slows to 5.6 per cent if you take Vancouver out of the picture. Remove Vancouver and Toronto and the average price increase drops to 3.7 per cent. By digging into the details on the high profile Vancouver market he found that the gap between average and median prices is reaching an all-time high. While the average house price climbed 25.7 per cent on a year-over-year basis to more than $800,000 in May, he found that by removing properties that sold for more than a $1 million there was a much more moderate price appreciation in the market. It also reduced the average sale price by $220,000 to just over $590,000. "What makes Vancouver abnormal is the high end of its property market," says Mr. Tal. "And in this context many, including Bank of Canada Governor Mark Carney, point the finger at foreign—mainly Asian wealth—as the main driver here." Data on the extent of the role that Asian investors have played in Vancouver housing prices is quite limited. Mr. Tal's analysis of data obtained from Landcor Data Corporation suggests that only 10 per cent of the nearly 4,500 transactions involving foreign money over the past five years were above the $1 million mark, with an average purchasing price of just under $600,000. According to the information provided by Landcor, foreign money accounted for only 2.6 per cent of all sales during the same period. However, Mr. Tal believes that could be a serious underestimate, as it is based on where property tax assessments are mailed, and would exclude offshore buying on behalf of children or other local proxies. "There are many reasons to believe that a significant portion of what is perceived to be buying by offshore investors is, in fact, driven by Chinese immigrants that are integrated into the community but still maintain strong links to mainland China, with many residing and working in China while their family establishes roots in B.C." "Looking beyond the average price numbers reveals a highly segmented and multi-dimensional market that is probably influenced by different forces," says Mr. Tal. "But even a multi-dimensional market can overshoot—and the likelihood is that prices in the Canadian market and its sub-segments are higher than what can be explained by factors such as income growth, rent and household formation. Given that, the housing market will eventually correct. The only question is what will be the mechanism of that correction." Mr. Tal feels the price correction in Canada will be gradual as the two key triggers for a price crash - a significant and quick increase in interest rates and/or a high-risk mortgage market that is very sensitive to changes in economic factors - are not at play in Canada. "In Canada, a sharp and brisk tightening cycle is unlikely. The market expects a gradual increase in short-term rates in the coming years. The rising number of mortgage holders that carry a variable rate mortgage will be the first to feel the pain. But if history is any guide, they will return quickly to the comfort of a five-year fixed rate the minute the Bank of Canada starts hiking." He also believes that the country is in relatively good shape when assessing the two sub-segments of the mortgage market that traditionally account for most defaults: mortgage holders that carry a debt-service ratio of more than 40 per cent and those with less than 20 per cent equity in their house. Just over six per cent of households have a debt service ratio of more than 40 per cent—a number that has risen by a full percentage point since 2008. "However, this ratio is still well below the ratio seen in 2003, when the effective interest rate on debt was more than a full percentage point higher, and no correction in house prices ensued," adds Mr. Tal. "All other things being equal, even a 300-basis-points rate hike by the Bank of Canada would take this ratio to only just over eight per cent. Not surprisingly, Vancouver has the highest ratio of households with high debt-service ratio, followed by Toronto." A little more than 17 per cent of the Canadian residential real estate pool is in properties with less than a 20 per cent equity position, a number that has been rising over the past few years. More than 80 per cent of households with less than a 20 per cent equity position are first time buyers. "Digging deeper and looking at the households with both low equity positions and high debt-service ratios, we found that this fragile segment of the market accounts for only 4.6 per cent of total mortgages—a number that has been on an upward trend over the past few years," says Mr. Tal. "Shock the system with a 300-basis-points rate hike and that number would rise to a still-tempered 6.5 per cent. Historically, even in that group, the default rate has been well below one per cent. Thus, short of a huge macro shock, there does not appear to be the risk of large scale forced selling that would typically be the trigger for a precipitous plunge in the national average house price. "As a result, while house prices are likely to adjust as interest rates eventually climb, the national pace of any correction is likely to be gradual. That could still entail a period in which housing underperforms other assets as an investment class, until rising incomes and a tame price trajectory bring the market back to equilibrium." July 8, 2011 GRANT ROBERTSON — BANKING REPORTER From Tuesday's Globe and Mail Canada’s banks are locked in a war of attrition this summer, grinding down mortgage rates and competing more fiercely for personal loans in an effort to steal customers from each other. Stuck in a market where the Canadian consumer is already highly leveraged and more concerned with paying down existing debt, the market for new loans is drying up. As a result, the banks have decided to fight each other on lending rates, hoping it will spur demand. Looking to bulk up their loan books, many banks are now sacrificing margin to maintain or increase their loan volumes. In a telltale sign, four major banks trimmed mortgage rates recently, just days after announcing disappointing second-quarter earnings that showed shrinking margins across most of the industry. Though several banks raised mortgage rates on Monday, giving their margins some breathing room, it is the latest example of the kind of tug-of-war over rates that is expected to play out in the months ahead. But this race to the bottom can’t last, predicts one bank CEO. Réjean Robitaille, chief executive officer of Laurentian Bank of Canada, figures the sector could be headed for a breaking point. “The market can be undisciplined for a while, but not for a long period of time,” Mr. Robitaille said in an interview. “There is pressure, lots of competition right now. But when you look at history, usually the market is a bit more disciplined.” The first signs of what Mr. Robitaille is talking about have already started to emerge. On Monday Royal Bank of Canada, Toronto-Dominion Bank and Laurentian moved first to raise rates on residential mortgages, including five-year fixed-rate mortgages. Other banks will likely follow in lock-step. However, while fixed-rate mortgage rates usually fluctuate depending on the cost of borrowing in the bond market, spreads on deposits and other lending continue to be under pressure. Montreal-based Laurentian, Canada’s seventh-largest bank with $24-billion in assets, dug in its heels this spring and tried to keep margins from eroding by refusing to drop rates lower than what it thought was prudent. The plan worked to some degree, since margins didn’t collapse as much as they could have. But that came at a cost: Laurentian watched as some mortgage customers jumped to other banks. “On the personal loan side we did quite well. On the mortgage side though, because of the price war in Ontario and other provinces in the country, we decided on purpose not to join the rest of the group … so in that area, we did less volume,” Mr. Robitaille said. These are the tough choices banks are facing right now as they search for a way to boost loan volumes without cutting profit margins. It’s a balancing act, since banks make the bulk of their money by taking in deposits at a low interest rate, then lending out that money at a higher interest rate. “What’s happening is no one’s borrowing any more, because everyone’s loaded up with debt,” said Peter Routledge, an analyst with National Bank Financial. “So the banks are competing more – not only for deposits, but also loans.” The narrowing spread between interest paid out on deposits and interest collected on loans leaves the banks searching for other ways to shore up revenue. Analysts expect cost-cutting will be one approach the banks may favour. Another small measure could be raising fees on consumer products, such as chequing and savings accounts. “[When] you get the margin pressure we saw, that would probably be a reason to start thinking about it,” Mr. Routledge said of potential fee increases to ease the burden of eroding margins. “[Banks] can get some of it back by raising prices on the cost of the services.” Toronto-Dominion Bank recently announced monthly fee increases on some of its accounts, boosting, for example, the cost of its mid-level personal accounts by a few dollars, and its premium account by $5. In some cases, TD was bringing its monthly fees in line with rivals such as RBC, which increased rates last summer. But in other cases, such as its mid-range Infinity account, TD raised fees $1 or $2 above the competition, which analysts believe could set a bar for the other banks to come up to in search of more revenue. Or they could try to undercut those fees if they believe it will attract customers. However, Mr. Routledge notes many consumers are reluctant to subject themselves to the hassle of changing banks over a few dollars. The banks tend to avoid sticking their necks out too far when it comes to hiking fees. A TD spokeswoman said some of the bank’s accounts hadn’t seen increases in several years. And when Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal increased some of their account fees over the past year, they did it within months of each other. Such caution is warranted. Canaccord Genuity analyst Mario Mendonca doesn’t think the banks have much room to move on fees if they want to drum up revenue, since the deposit market is just as competitive as the loan market these days. “They are all dropping rates on mortgages and paying more for deposits,” Mr. Mendonca said. “[It] doesn’t seem to me that the banks are in a position to charge more for anything as the struggle for market share intensifies.” July 5, 2011 Carmi Levy, On, Yahoo Finance   It's either the best of times to buy a house, or the worst of times. A conflicting sea of economic factors doesn't help matters as on-the-fence Canadians try to decide whether to take the plunge into home ownership. With prices rising, it may seem like an easy choice to lock in now. But with continued economic uncertainty due to the stagnating American recovery and its effect here, some Canadians are feeling skittish. Is it time to panic or is time currently on Canadians' side? "Some Canadian cities are experiencing price increases that seem out of step with consumer affordability," says Gregory Smith, a partner in Novantas. "But I think it's inaccurate to say the whole country is experiencing a housing bubble." On the plus side, interest rates remain at historic lows. Reduced unemployment — the national rate was down to 7.4 per cent in May — may encourage more Canadians into the market. And when they start looking, they'll find that prices in most regions still haven't recovered to their pre-recession highs. Rising prices, though, are being driven by an influx of money, some of it from foreigners seeking relatively affordable real estate investments abroad. That means the clock is ticking before the window of opportunity closes; a situation that only fuels speculation and fears about waiting too long to buy. But there's a dark side that's giving many Canadians pause before they pick up the phone and call a realtor. Those low-as-can-be interest rates have nowhere to go but up, and despite continued debate over precisely when they'll begin their one-way trip in that direction, no one disagrees it's only a matter of time. Bank of Canada Governor Mark Carney says rising rates coupled with record-high levels of household debt and recent moves by the federal government to tighten eligibility for mortgages will all dampen demand for real estate. "There will be a large section of soon-to-be homeowners who will no longer qualify at higher borrowing costs," says Smith. "That has a knock-on effect through the rest of the housing market and soon thereafter house prices flatten or decline. I believe that rather than a bubble bursting, we'll experience a bubble stabilizing or deflating to a more reasonable, natural buoyancy." Jobs are another sobering factor. Slowly sinking unemployment rates in most regions of the country mask a more troubling reality: That many Canadians have simply given up looking for work. Even for those who have jobs, employment uncertainty breeds fear that may keep many out of the market. "The fundamentals of the economy are driven by GDP growth, population growth and employment," says Addy Saeed, a sales representative with Re/max Active Realty Inc. Brokerage in Toronto. "Canadians are unemployed at a higher rate, which is troubling. But GDP and population growth has been steady, which is bringing new money into the country." That new money comes with a cost to Canadians, says Aaron Best, a realtor and property manager with Coronet Realty Ltd. in Vancouver. "When you have foreign speculators buying here just to 'park' money outside of their home country, it skews the market," he says. "It's no longer a level playing field." But does this mean we're in a bubble? Likely not. Michael Drouillard, author of 'Landlording in Canada,' cites historical pricing in B.C.'s lower mainland as an example. After prices there increased rapidly and dramatically between 2003 and 2008, the pattern shifted. "If this were a classic bubble, prices would have rapidly declined afterwards, but they didn't," he says. "Prices have been stagnant for a few years and now it looks like they are slowly moving upwards once again." Drouillard says "all we need right now is something like an increase in interest rates and that could set us over the edge and cause a decline." Regional pricing trends play a significant role, too, but that still doesn't mean Canada is riding the bubble. "We feel it's business as usual in the housing market," says Terry Loney, sales representative with The Loney Group in London. "We don't feel there's a housing bubble due to the fact that the real estate market fluctuates differently in each region across Canada. Certain areas such as Vancouver and Toronto have a shortage of supply with high demand, while other cities have their own regional influences." Loney says as rates begin to rise, the market will start to slow down, with prices continuing their steady rise. Some real estate professionals, like Shannon Murree, a sales representative with RE/MAX Chay Realty Inc, Brokerage in Barrie, say the long-term trajectory of the market is clear, and speculation over whether or not we're in a bubble does little to change reality. "So long as the population is growing and people are working, house prices will go up," she says. "This is especially true in Canada with our conservative practices. And no other investment can offer the returns that real estate can." June 30, 2011 Ottawa Citizen June 25, 2011   Ottawa's modest rebound in new home sales in April turned out to be short-lived as sales were again sluggish in May, according to figures released by the Greater Ottawa Home Builders' Association. There were 336 new home sales in May compared to 396 sales in April. That's also down from the same period last year, which saw 378 new home sales, and below the five-and 10-year averages for the month of May of 412 and 414 new home sales respectively. Sales have been slower this year in general. For the first five months, there were 1,619 new home sales, a drop of 22 per cent from the same period a year ago, which saw 2,094 sales. The Canada Mortgage and Housing Corp. also reported this month that housing starts in Ottawa were down in May, bucking the national trend. Non-seasonally adjusted totals show 266 housing starts in May, down from 446 in April. May's total was also a major drop from the 709 starts of a "very robust" May 2010, CMHC said. "The latest activity is a reversal from the strength observed earlier this year, but does not yet constitute a change in the underlying trend," CMHC market analyst Daniel Benatuil said. The agency predicted only a modest drop in home starts in Ott awa in 2011. © Copyright (c) The Ottawa Citizen June 28, 2011 Ottawa - Today, Mayor Jim Watson and City Councillors Steve Desroches and Jan Harder announced that the water ban in Barrhaven, Riverside South and Manotick is over and that all water restrictions are being lifted. “We are very pleased to announce that this water ban is officially over and full water supply has been restored to these three communities,” said Mayor Jim Watson. “I would like to thank residents for their cooperation with the water restrictions, and congratulate the contractor and City staff who worked hard to get the repair work done quickly in order to ensure life got back to normal." Construction work on the Woodroffe Avenue watermain, the largest waterline in the area, is now complete and the pipe has been tested to ensure the delivery of clean, safe drinking water. Residents are able to resume their regular water uses, both indoors and out, including washing vehicles, watering plants, gardens and lawns and any outdoor cleaning. In addition, splash pads will now be open all week long, and normal sports field watering will resume. All prohibitions on commercial water use, including car washes, are also lifted. “City staff and the contractor have gone to extra lengths to get this project done ahead of schedule,” said Councillor Steve Desroches. “But most importantly they did the job to the highest professional level, which means we can rely on the Woodroffe watermain to provide a steady level of clean water from here on in." The work to repair the pipe was originally expected to be complete by early to mid-August. Recent announcements had revised the timeline to mid-July and also eased outdoor water use restrictions to allow residents to water one day per week. “This is the news that residents have been waiting to hear for the last two months,” said Councillor Jan Harder. “I’m really impressed with how this community has come together to maintain normal outdoor activities, while also respecting the outdoor water ban. This comes just in time for families to start their summer holidays and enjoy all that their yards and City parks and programs have to offer.” On April 27, the City instituted a full outdoor water ban for all residents on City water in Barrhaven, Riverside South and Manotick. The ban was necessary to reduce water demand to ensure the supply of clean, safe drinking water while the Woodroffe Avenue watermain was replaced. All the measures put in place to help residents during the ban will now end. Only appointments for pool or hot tub top ups booked for June 27 will be delivered. City staff will contact any other residents who have scheduled a top up to cancel the appointment as residents can now use City water for their pools or hot tubs. The water depots at garden centres will close as of today. June 30 will be the last day that rain barrel purchases will be eligible for a rebate up to $50. Any City resident who bought a rain barrel between April 27 and June 30 can apply for the rebate. Applications must be received by the City on or before September 15. Rebates will be processed as a credit on the water bill or as a cheque for those who do not receive a water bill. The City continues to encourage residents to practice water conservation in their daily activities, including using a rain barrel for outdoor watering, planting drought-resistant, native plants, using a pool or hot tub cover to reduce evaporation, installing a low-flow showerhead or a faucet aerator. More information on indoor and outdoor water conservation is available at ottawa.ca/waterwise . June 27, 2011 Written by Editor (stevedesrochers.ca) Monday, 27 June 2011 I am pleased to announce the Outdoor Water Ban has been lifted, effective immediately, for the residents of Barrhaven, Riverside South and Manotick.The new Woodroffe Water Main is now fully operational and has been completed 7 weeks ahead of schedule.  I would like to thank and congratulate the city officials, crews and contractors who have worked diligently to get the water back on for our communities’ outdoor use as soon as possible.As you may know, a secondary line, the 2W/2C Watermain will connect Riverside South with the Ottawa South Pump Station. Once completed, it will become the back-up feed for Barrhaven, Riverside South and Manotick. The construction of this watermain is currently ongoing along Leitrim Road and will be completed by this fall.I would like to thank all of your for your compliance and cooperation during this challenging time.  I wish you all a wonderful summer ! June 27, 2011 Garry Marr Jun 23, 2011 – 6:46 PM ET | Last Updated: Jun 24, 2011 9:34 AM ET It’s been touted as the centre of Vancouver’s so-called property bubble and now somebody has produced the data that just may back up that claim. Local firm Landcor Data Corp. says it has been tracking property tax assessment bills to pinpoint the percentage of transactions driven by foreign investors in Vancouver’s suburbs — a trend the real estate industry says has been driving up average prices in the country’s priciest city. The latest data from the Canadian Real Estate Association shows the average price of a home sold in May in Vancouver was $831,555, a 25.7% increase from a year ago. CREA has said the sale of multimillion-dollar homes has skewed the city’s average sale price and done the same nationally. Richmond and the west side of Vancouver, favourites of Chinese investors, were the focus of a first-quarter report form Landcor’s which looked at the profile of buyers from 2008 to 2010. It found buyers from the “Middle Kingdom,” as the company put it, dominated purchases. In 2008, there were 69 sales of homes priced at $3-million or more, the most expensive $10.5-million, and 46% were purchased by Chinese buyers. By 2010, there were 164 sales in the same category, the highest-priced being $17.5-million, and 74% went to Chinese buyers. “There is only one way to track this and we are as close as anybody is going to get,” said Rudy Nielsen, the president of Landcor, about the use of property assessment to track where buyers are from. It also compared names on sales contracts to names common in the People’s Republic of China, excluding people with Western first names. Mr. Nielsen acknowledged his methodology is not without flaws, given assessment notices do not necessarily have to be sent to a person’s permanent address and could be forwarded to a friend, property manager or lawyer located in B.C. “There is a lot of hype and it is hard to tell for sure what the impact of the Chinese buyers has been. He doesn’t give you a postal code. He’s not like the German buyer who gives you a German address,” Mr. Nielsen says. If anything, the impact of Chinese buyers in the market could be even greater because of the number of purchasers shielding their identity, he said. Andrew Ramlo, executive director of The Urban Futures Institute, a Vancouver research firm that worked with Landcor, says the data proves that influence of foreign investment is not a major factor in most of the Lower Mainland. His group points out of the 55,512 sales in 2010 only 195 were to people outside of Canada — 0.4% of all sales for the year. Furthermore, he says, foreign investors only own 0.5% of the total housing stock of 774,600 residential properties in the Lower Mainland. “These data contradict what seems to be largely anecdotal evidence indicating foreign investment is a significant driver to residential price increases in the Lower Mainland,” he said in a report. Benjamin Tal, deputy chief economist with CIBC World Markets, said he needs to see more data on foreign investment in individual neighbourhoods within Vancouver before he makes conclusions. “What you could have [in Richmond and west side Vancouver] is a bubble within a bubble or a bubble outside the rest of the real estate market,” says Mr. Tal, noting his concern is if prices drop in Vancouver’s luxury market will it affect the rest of the city. June 27, 2011 Garry Marr, Financial Post · Jun. 23, 2011 | Last Updated: Jun. 27, 2011 7:47 AM ET Are the banks doing an incredible job of retaining customers or are Canadians just too lazy to shop around when renewing their mortgages? One finding of a survey by Canada Mortgage and Housing Corp. released this week was that 89% of consumers renewing their mortgage stay with the same financial institution. And 68% stay when they are doing a refinancing. “They stay with the lender because of rate and they leave the lender because of service,” says Pierre Serré, vice-president, insurance product and business development, with CMHC. Consumers are more aggressive shoppers when they are seeking a mortgage to buy their first home than they are upon renewal. Only 57% of first-time buyers took out their mortgage with their existing financial institution. Rob McLister, a mortgage broker and editor of Canadian Mortgage Trends, says the banks are doing more to retain customers but there is a pretty good chance you won’t get the best deal if you renew automatically. “Most of the time people do some rudimentary research before they go back to their lender. Not so long ago people would just take the renewal letter, sign it and send it back. It still happens but not as much anymore,” he says. Mr. McLister says the banks “are not as stupid” now and when they send out renewal rates they have special offers. The posted rate on a five-year fixed closed mortgage today is 5.39% but he’ll see clients get offers in the mail as low as 4.04% in a renewal letter. The problem is a broker could probably get you 3.59% — meaning you just left 45 basis points on the table. On a $250,000 mortgage at 4.04% paid monthly and amortized over 25 years, the monthly payment would be $1,320.48, with the interest cost during a five-year term at $47,014.79. Chop the rate down to 3.59% and the monthly payment drops to $1,260.09 ,with the interest over the five years falling to $41,658.85. If you were crazy enough, or lazy enough, to take the posted rate, you would pay $1,510.01 monthly for the same mortgage and your interest cost would jump to $63,201.92. Let’s just say it pays to shop around. So why don’t more people do it? There is a perception that it’s difficult to switch banks, plus it will cost you some money to switch. Yes, it’s a hassle but for $5,000-plus, count me in. As for the costs, the bank you are switching to will often cover your legal costs. Even if it doesn’t or say you face a discharge fee of $300, that’s small price to pay upfront. Mr. McLister says if you change the terms of your mortgage and refinance, it could cost you as much $700 to switch, something you would have to do if you have a home-equity line of credit or have a collateral charge on your mortgage. Elton Ash, regional executive vice-president with Re/Max of Western Canada and a long-time realtor, says for most people if the customer service is good, they stay. “Unless the lender has really screwed up, they stay,” says Mr. Ash says. “It’s like realtors, not all of them charge the same fee. There are lots of discounters out there but it’s based on service levels more than costs and fees, if it’s relatively competitive.” The banks are more competitive these days for existing customers. Part of the reason is it can cost a financial institution up to 30 basis points to attract a new customer, so why not just spend the money on retaining existing customers? “We start calling customers in advance to remind them their mortgage is coming up,” says John Turner, director of mortgages at Bank of Montreal. “It is an increasingly competitive marketplace and customers are shopping. It’s in our interest to advise the customer of their options. That could include refinancing the mortgage overall.” Farhaneh Haque, regional manager of mobile mortgage specialists with Toronto-Dominion Bank, says her bank starts calling customers as much as 120 days before renewal to discuss options. “This all about relationships, they are not going to up and leave for a five-basis-point difference,” Ms. Haque says. She’s right. A 0.05 percentage point is not a great reason to sever your relationship. But renewal time is a great time to test your relationship with your bank and get it to show you some love — or a better rate. Financial Post gmarr@nationalpost.com June 27, 2011 Globe and Mail Update Published Friday, Jun. 24, 2011 7:43AM EDT Last updated Friday, Jun. 24, 2011 7:56AM EDT It’s not the size that matters. It’s how you use it. I’m talking about financial plans. Everybody should have one, but one size does not fit all. That’s true whether you are a DIY investor or are using a full service adviser. As the financial advice industry evolves, advisers who traditionally provided just investment advice are increasingly offering comprehensive financial planning. Even if they do not have the certified financial planner (CFP)designation, many will have access to internal financial planning support teams or outsource to external financial planners. These plans can vary in length, with some over 50 pages long. So should you feel like you’re missing out if your plan is lacking in girth? Not necessarily. If you are new to the workforce, your financial plan will not require the better part of a forest to be sacrificed. Unless you inherit a complex estate when you are young, you will likely have the same goals as everyone else: paying off student debt, saving for a mortgage, monthly budgeting, starting an investment plan and getting the right types and amounts of insurance to disaster proof your life. A plan written for a retirement date 40 years from now makes a lot of assumptions, many of which will turn out to be false simply because no one knows what the future holds. Who knows how many children you will have, let alone spouses? The focus at a young age should be on putting away as much as you can, investing prudently, getting debts under control and hoping like mad the stars align and allow you to retire early. But retirement is so far off that your confidence in a 50-page plan at this life stage is likely to be minimal. Most twentysomethings have no clue what the next ten years has in store for them, never mind the next 40. Younger investors are often better off with a plan that helps them establish good long-term habits while focusing on shorter-term goals. Fast forward a few decades and hopefully those good habits have translated into an estate that needs more expert handling. The range of possible outcomes to your life has narrowed, and as retirement approaches it becomes a priority. Your financial plan will become more detailed, and hence thicker. The process for DIY investors is the same: you start off with some rules to live by and over time, you formalize your plan on paper. As a DIYer, your early-life and later-life financial plans might be smaller than the commensurate plans of your advice-seeking counterparts. But as long as you financial plan meets your needs, it doesn't need to be the biggest on the block. Preet Banerjee is a senior vice-president with Pro-Financial Asset Management. His website is wheredoesallmymoneygo.com. June 24, 2011 June 24, 2011 By Sheryl Smolkin On average, Canadian women can expect to live over five years longer than men. Yet survey results from TD Insurance reveal when it comes to discussing family financial security,  men (60 per cent)  are more likely than women (40 per cent) to brave the taboo topic of life insurance.In fact one-third of Ontarians who have been in a relationship from one to nine years along with almost one-in-five Canadians parents have never broached the subject with their partner at all.The majority of couples surveyed said it’s because they never thought about it or they didn’t think their relationship was serious enough. But TD Insurance VP Dave Miner thinks there is more to it than that. “Unlike home or auto insurance and even health insurance to some degree, life insurance leads to an emotional conversation for many folks, because you are talking about death.”He equates discussing life insurance with other forms of planning many people never get to, like funeral pre-planning, estate planning and making a will. “Death is the catalyst for most of these events so lots of people will procrastinate or avoid dealing with them as long as they can.”Another reason why Minor thinks couples may not talk openly about life insurance is they find it confusing. “They don’t know what kind of insurance exists, how much they should have, who to trust, or where to get it.” And it doesn’t help that more than one quarter of Ontarians who have tried to talk about life insurance with their partners ended up fighting about whether it was necessary and how much it costs.How can you figure how much life insurance is enough and where to get it? There are many resources on the internet including a moneyville insurance calculator  that will help you to figure out the amount of coverage you require.  Your workplace employee benefits package typically includes some term life insurance -- often one or more times salary. Generally you can purchase optional additional coverage at reasonable rates for yourself, your spouse and your children.The main advantage of employer-provided life insurance is that a medical examination is not required for basic coverage and it is easy to sign up. However if you lose your job, you also lose your group coverage. You will have 30 days to purchase an individual policy from the group carrier, but your premiums at age 45 will be much higher than if you had purchased an individual policy at age 25.For young people starting out, Minor says term insurance is often the best bet and a combination of group and individual life insurance coverage may be optimum.So ladies, don’t be shy. Adequate life insurance for both you and you partner are an essential part of your financial plan. And scary as the thought may be, the odds are that your husband will predecease you. It’s up to you to make sure you have the right coverage in place. June 24, 2011 Garry Marr, Financial Post · Jun. 23, 2011 | Last Updated: Jun. 23, 2011 2:03 AM ET Canadians are prepared for a hike in interest rates and are budgeting accordingly, says a Canada Mortgage and Housing Corp. survey published Wednesday. The Crown corporation says 80% of Canadians follow a household budget and, when calculating that budget, 71% considered the impact higher mortgage rates would have on their finances. "We didn't ask the 20% what they did," Pierre Serré, vice-president insurance product and business development, said of Canadians who don't have a budget and perhaps are unprepared for a coming interest-rate hike. But of the group budgeting, another 69% have prepared for the impact of a loss of income and 79% have set themselves up for rising expenses. The survey also found 81% of respondents have set aside some money in their budget for additional savings. Canadians are also trying to pay down their mortgages as fast they can; 75% of respondents said it was important to pay off the debt as soon as possible. To that end, 39% of recent buyers say they set their mortgage payments higher than the minimum required while 20% have made a lumpsum payment since taking out their mortgage. CMHC says there is still plenty of opportunity to im-prove education for mortgage consumers. It reports only 23% of first-time buyers received advice on budgeting while 18% received advice on managing debt. As well, 25% of recent buyers say they are unsure where to go to get advice in case of financial difficulty. "We've been doing the survey for over 10 years now. It's not brand-new news; the trend lines are about the same," Mr. Serré says. The survey found the Internet continues to be an important tool of consumers, with 65% saying they searched online for a home. Of those using the Web, 86% used it to look at interest rates, 76% for mortgage options and 69% for a mortgage calculator. Even those using the Internet to buy a home still need to print out their information, with 56% reporting doing that. "One of things that surprised me is they love to print stuff," Mr. Serré said. "If you are printing stuff it means you must be putting together some stuff to help you manage your big decision." On average Canadians are taking about 11 months to plan the purchase of a home, with 88% indicating they had a good idea of what mortgage they could afford before they purchased. The online survey polled more than 3,500 active mortgage consumers who had conducted a mortgage transaction within the previous 12 months. gmarr@nationalpost.com June 23, 2011 Ottawa— The Canadian Press Published Wednesday, Jun. 22, 2011 9:35AM EDT Last updated Wednesday, Jun. 22, 2011 3:04PM EDT Canadian homebuyers are showing “a high level of financial literacy,” according to a new Canada Mortgage and Housing Corp. survey that found both high levels of research and a determination to pay off mortgages quickly. The survey, released Wednesday, said 75 per cent of respondents felt it “very important” to pay off their mortgages as soon as possible and that 39 per cent had set payments higher than the required minimum. As well, 20 per cent had made at least one lump sum payment since obtaining their mortgage and 39 per cent planned to reduce their amortization periods at their next renewal, CMHC said. Meanwhile, the survey found 80 per cent of respondents had researched mortgage terms and conditions, 88 per cent had a good understanding of how big a mortgage they could afford and 81 per cent have some form of savings. CMHC said areas in which mortgage and financial professionals can offer advice and guidance are long-term mortgage and financial strategies, budgeting and managing debt. It said research showed that during their mortgage research, just 23 per cent of first-time buyers received advice on budgeting and 18 per cent on managing debt. In addition, the survey found that one in four recent buyers were not sure of where to go to receive reliable advice in case of financial difficulty. CMHC conducted the online survey of 3,512 recent mortgage consumers between Feb. 25 and March 25. June 23, 2011 Garry Marr, Financial Post · Jun. 21, 2011 | Last Updated: Jun. 21, 2011 7:01 PM ET You better buy a house in this market before it’s too late.   How many times have you heard those words? The panic thinking is driven partially by prices continuing to rise to record levels but also by the sense that near-record-low interest rates could rise at any moment.   The sense of desperation to buy now out of fear you won’t be able to get it tomorrow is probably one of the first things taught to any sales person. Create a sense of urgency. “There’s six left on the shelf, nope, it’s down to five,” jokes certified financial planner Ted Rechtshaffen, president of TriDelta Financial. “It’s an interesting phrase.”   Mr. Rechtshaffen says his clients are not uttering panic words but you have to wonder whether Mark Carney, governor of the Bank of Canada, might have been hearing them before making a speech to the Vancouver Chamber of Commerce this month.   “One cannot totally discount the possibility that some pockets of the Canadian housing market are taking on characteristics of financial asset markets, where expectations can dominate underlying forces of supply and demand,” Mr. Carney said. “The risk is that expectations become extrapolative, prompting the classic market emotions of greed and fear — greed among speculators and investors — and fear among households that getting a foot on the property ladder is a now-or-never proposition.”   It’s hard to measure desperation, but a recent survey from Toronto-Dominion Bank on first-time homebuyers might imply there is some urgency in the marketplace.   The survey found 45% of Canadians are willing to buy their home independently without a co-signer. Traditionally people wait until they are married to buy that first home but now they want to establish equity early so they can get their foot in the market.   More worrisome out of the TD report was the statistic that buyers are doing less research before jumping in. The bank said mortgage pre-approvals are down to 72% from 84% a year ago and home inspections have dropped from 85% to 67% during the same period. The report also shows declining percentages for buyers researching issues like electricity and closing costs.   It all sounds like somebody in a hurry to buy or at least in a bit more of a rush. “I think people see affordability is still there. The employment numbers are strong and rates are relatively still low,” says Farhaneh Haque, regional manager of mobile mortgage specialists with TD Canada Trust. “In part there is a sense or urgency because they are worried about rates and unsure of what the markets will do.”   Benjamin Tal, deputy chief economist at CIBC World Markets, says the Bank of Canada is partly to blame for some of the urgency in the market because of the uncertainty over rates.   “People feel the window is closing,” Mr. Tal says. “People have been talking about the Bank of Canada raising rates. They look and say rates will be one or 1.5% [percentages points higher] next year. There is some logic to it.”   He adds that if you look at trends over the past 20 years on what happens before rate announcements, you see an acceleration of activity before the announcement. “Look at the last year and half and we’ve had this sense of urgency,” says Mr. Tal, adding it has driven housing in Canada since the recession. “The real estate market has like nine lives.”   It’s easy to say wait until the market crashes in cities like Vancouver, where prices are up 25% from a year ago. But if rates go up, it could be just as expensive to carry a home.   Queen’s University professor John Andrew says it’s in the real estate industry’s interests to promote the idea prices will rise forever. But while he thinks it’s obvious in places like Vancouver there will be a price correction, it doesn’t help you if interest rates go up.   “You see a 10% price correction but if interest rates go up two [percentage points], you are not better off,” Prof. Andrew says. “Buyers are caught in this quandary that when interest rates go up, prices will come down.”   If you are sitting on the housing sidelines, it might seem like you can’t win either way.   Financial Post gmarr@nationalpost.com June 22, 2011 ROMA LUCIW Globe and Mail Blog Posted on Tuesday, June 21, 2011 1:48PM EDT Canadians have long been smug in their knowledge that although we might be borrowing more than ever to pay for massive mortgages, we are nowhere near as bad as our American neighbours. But a Statistics Canada report released Monday shows that the ratio of household credit market debt, which includes mortgages, consumer credit and loans, to disposable income reached 147.3 per cent in the first quarter of this year, surpassing the revised 146.2 per cent mark in the fourth quarter of 2010. The agency noted that mortgage debt rose, driven by stable borrowing costs as well as higher housing resale and renovation activities. The increase led Douglas Porter, deputy chief economist at BMO Nesbitt Burns, to warn that Canadian debt ratios are now “leaving their U.S. counterparts in the rear-view mirror, despite the repeated exhortations by domestic policymakers to rein in borrowing." So it seems timely that on Tuesday, the Bank of Nova Scotia released a report from Let the Saving Begin, a program that it hopes will encourage Canadians to get back on track with their saving habits. Last summer, the bank recruited television personality Valerie Pringle to embark on a cross-country tour as an ambassador for Let the Saving Begin. Her conversations led her to believe that Canadians realize they are not saving enough and that they genuinely want to do better. "Talking about money is often considered taboo...,” Ms. Pringle said, although it is one of the most important conversations Canadians should have. "Talking about our finances is the first step to making saving a reality and a priority.” In the wake of her cross-country tour, Ms. Pringle issued these mostly common-sense principles designed to help Canadians save: - Save automaticallyUse a rewards card or with each paycheque, set up an automatic transfer into a savings or investment account. - Invest for your future Establish a five-year financial plan and learn the basic language of investing. - Borrow to get ahead, not fall behind Take years off your mortgage by doing small things like changing your payment frequency or increasing your mortgage payments. Cut the interest on all your borrowing by looking at the interest rates on the things you owe. For instance, you could move your balance from a higher interest store credit card to a lower interest credit card. A growing body of evidence points to disturbingly low levels of financial literacy among Canadians, with women generally scoring lower than men. Many of the big Canadian banks have embarked on campaigns designed to improve the financial literacy skills of Canadians. Last week, a report found that Canadian household debt has hit a troubling $1.5-trillion. If household debt were distributed evenly across all Canadians, a two-child household would owe an estimated $176,461, including mortgage costs, according to the Certified General Accountants Association of Canada. June 21, 2011 John Greenwood, Financial Post · Jun. 20, 2011 | Last Updated: Jun. 20, 2011 7:01 PM ET TORONTO -- Despite worries around record consumer debt levels and an overexuberant housing market, Canada’s finance minister said he has no plans to tighten mortgage rules again. “We just took action” in March, Jim Flaherty told reporters in Toronto, adding that there has already been “moderation” in activity. The comments come a week after a strong warning from Bank of Canada governor Mark Carney that Canadians’ love affair with cheap credit has left them “highly vulnerable” to adverse economic shock. Speaking in Vancouver, home to the country’s most expensive real estate, Mr. Carney noted that growth in home construction, renovations and other residential investment has consistently outstripped overall growth in the economy for the past seven years. As a result, some pockets of the market may have become overheated, he said. On Monday, Mr. Flaherty said he continues to monitor the country’s housing market and that it remains healthy. However, the finance minister did warn that there could be “issues” for Canadian banks if the debt crisis in Europe is not resolved. In a speech to insurance industry executives, he said G7 policy makers and central bankers had held conference calls over the weekend to discuss the problem and he suggested there will be further talks over the coming days. Mr. Flaherty said he is “hopeful accommodations can be made” and that “delay is not desirable. But he declined to go into detail about potential consequences if there is no resolution. Canadian banks have minimal direct exposure to sovereign Greek bonds but they may well have plenty of indirect exposure, from holdings of securities of other institutions with direct exposure. More broadly, they are already feeling the effects through ongoing turmoil in global financial markets stirred up by fear and uncertainty around Europe. Regardless of whether Canadian banks hold Greek bonds, a failure to resolve the issue could spark a financial market collapse “that would reverberate through their operations, and that’s the major risk here, another financial crisis,” said Finn Poschmann, vice-president of research at the CD Howe Institute. The last time the financial system got into trouble in 2008 and 2009, it was the shadowy market for over-the-counter derivatives that came in for most of the blame by creating exposures and vulnerabilities that didn’t become apparent until it was too late. This time, the fear is over holdings of sovereign debt that because of a quirk of international banking rules are treated as almost risk-free. Indeed, institutions have been pledging dodgy bonds as collateral for central bank loans, further spreading it through the system. “Part of the problem is transparency as to what exposure there,” said Royal Bank of Canada chief economist Craig Wright. Because of the interconnectedness of the global financial industry, exposures tend to spread rapidly, spilling from country to country as the cost of borrowing increases. “This problem [with European debt] isn’t going to any time soon,” Mr. Wright said. Repercussions from the sovereign debt crisis are already echoing across global financial markets but experts say the best way to fix the problem is for the countries at the centre to face reality and deal directly with the situation. But given the level of popular unrest, politicians are loath to take that step just yet. Instead, they “dance around the edge of the cliff,” hoping to buy more time, said Mr. Wright. For his part, Mr. Flaherty is doing what he can to persuade policy makers in Europe to take the bull by the horns. Meanwhile, the ratio of Canadian household debt to income rose to a record 147.3% at the end of the first quarter, up from 146.1 at the end of December, according to Statistics Canada. The good news is that household net worth rose 1% on the back of higher equity markets in the first three months of the year. Financial Post June 21, 2011 By Paula McCooey, The Ottawa Citizn June 17, 2011 OTTAWA — It’s a long way from war-torn Congo to a neighbourhood in Orléans for a family of seven struggling to find a new life and appropriate housing. But thanks to Habitat for Humanity, that journey is almost complete for the Hachokake family. “You made some really tough decisions,” Habitat Habitat CEO Donna Hicks said Tuesday at a dedication ceremony for the family’s new home. “You left your homeland. And even though it was war torn, your family was there and your friends were there, and your livelihood was there. And you came to a strange land where you didn’t speak our language, where our customs were different. And even our food was different. But you had such a strong faith, you believed in yourselves, you believed in God, and you believed that there was a better life here for your children.” The Hachokakes, parents Charlotte and Christophe and their five children, who range in age from five months to 17 years old, fled the Democratic Republic of Congo and came to Canada via Zambia in 2003. Although Christophe Hachokake found steady, full-time employment at the École secondaire publique Louis-Riel in Gloucester and the family exercises tight budgeting, home ownership was a distant dream until 2009 when the Hachokakes qualified for a Habitat home. The Habitat program requires 500 hours of sweat equity from the family, which can be earned at Habitat build sites, the organization’s Restores and through other volunteer activities, in exchange for a new or retrofitted home with an interest-free mortgage. In the case of the Hachokakes, they are receiving a retrofitted Habitat home at 906 Hiawatha Park, a family-oriented neighbourhood near Jeanne d’Arc Boulevard North and Orléans Boulevard, just steps away from the Ottawa River. Standing on the front deck, anchored by two soaring pines, Hicks praised the hard work of those who helped to give the family a safe place to raise their children. She was joined by a group of 25 that included build sponsors, neighbours, volunteers and the family. “I am very, very happy to be here for this special event,” said Christophe Hachokake, an energetic and well-liked janitor. “I’m not surprised at all by the generosity that I’ve found in Canada.” The 12-year-old bungalow was once owned by another Habitat family, but the single mother’s children had grown up and moved out. So she thought it was time for another family to have the opportunity to bring up their children in a stable and secure environment. Hicks said when a family gives a home back to Habitat, they receive the money that they have invested in the home, less taxes and insurance, to give them a “nest egg” to walk away with. Most Habitat homes are new builds, but she said when they take a home back and get it ready for another family, they try to update it as much as possible so the new family will have a fresh start. In this case, they replaced everything from the furnace, roof and windows, to electrical, new hardwood flooring, and vinyl siding. But more importantly, they turned the three-bedroom, 950-square-foot home into a five-bedroom home by adding two rooms with egress windows in the basement. Sponsors like O’Reilly Brothers Ltd., which foamed the walls in the basement to ensure that it is energy efficient and warm, the Muskoka Cabinet Company, which installed the new kitchen, and Home Depot, which took the house apart so Habitat would have a fresh slate, helped to keep costs down. There were also many volunteers, including U.S. Ambassador David Jacobson and his wife, Julie, who spent two days painting in May along with about 20 embassy staff. “Charlotte (Hachokake) and I worked together most of the day painting,” Julie Jacobson said earlier. “And my understanding is that (the family) have been working very, very hard. They have come here from the Congo, and left sort of brutal conditions, and have made this wonderful new life in Ottawa, except for the fact that they have some very rough housing, and they live in a place where the kids can’t go outside and play. So they are just so excited about being in this new home.” The family will move in a few weeks once the new bathrooms and kitchen are complete. Then they look forward to settling in and enjoying summer in their new home, which will include a garden with special squash from their homeland. “One of the advantages of an older home is having lovely yards, more property,” said Hicks, who will now turn her attention to finding a property in Carleton Place for Habitat’s next project. © Copyright (c) The Ottawa Citizen   June 20, 2011 By Mark Weisleder | Wed Jun 15 2011 Most people have no idea of the power that they give to someone else when they sign a Power of Attorney. They may be confused about either “what” the power is supposed to be and especially “when” it is supposed to take effect. Most people understand why you need for a will, to make sure that your estate is distributed according to your wishes after you pass away. Most do not understand why you need a Power of Attorney. However, the consequences of signing one are dramatic. Think of it this way. If you sign a Property Power of Attorney, you are giving someone the right to write a cheque out of your bank account immediately. If you give someone a Personal Care Power of Attorney and then are in a car accident, they get to make life and death decisions about your medical treatment if you can’t make them yourself. The main reason for a Power of Attorney is to appoint someone to deal with your assets or your health care if you are still alive, but are no longer able to make these decisions. The main cause would be mental incapacity. There are 2 types of Power of Attorney you can sign. The first is a Power of Personal Care. This gives the person you designate the right to make decisions about medical treatment when a doctor provides several options, and you do not have the mental capacity to make them. The second Power of Attorney is for Property, with the intent that your appointed person can make decisions about all of your property, including selling it or mortgaging it, presumably so that they can use the money to take care of you. The problem is that if you just go to the store to buy a Power of Attorney Form, it likely is a Continuing Power of Attorney, with no limitations or restrictions. What this means is that the minute you sign, the person you appoint can immediately write cheques on your bank account, sell your property or otherwise liquidate your assets. Even though the law says that the Attorney you appoint should not profit for themselves, it may be very difficult to do anything if they just take your property and disappear. When you go to a lawyer, they will make it clear that any Power of Attorney that you sign ONLY takes effect if you are judged to be mentally incapacitated. One of the key tests that medical specialists in the area will look at in determining incapacity is whether the person has an appreciation of the total value of all of their existing assets. For example, if a person has assets of a million dollars but if you ask them directly, they think it is closer to $75,000, it is a sign that they do not have mental capacity any more. The Attorney will have to prove that you cannot act before they can exercise any power over your property. Sometimes you have a situation where a couple is selling their home and one of them is going out of the country and may not be accessible to sign an offer that is brought in. In this case, the one leaving should go to their lawyer and prepare a Power of Attorney appointing their spouse to accept the offer on their behalf for that specific property and for no other purpose. There have been unfortunate court cases where parents have given powers of attorney to one of their children, and that child has then taken an asset for themselves, leading to lawsuits from the other children. Typically the parent is no longer alive or is alive but in a home, and cannot make decisions anymore. In my opinion, you should only sign a Power of Attorney after you obtain legal advice, understand exactly what you are signing and then have your own lawyer prepare it for you and witness your signature. Note: I am a lawyer myself (Full Disclosure). Also read: Other Mark Weisleder stories Mark Weisleder is a lawyer, author and speaker to the real estate industry. If you have any questions about real estate issues, email mark at mark@markweisleder.com June 17, 2011 JEREMY TOROBIN, DAVID EBNER OTTAWA, VANCOUVER— From Thursday's Globe and Mail Published Wednesday, Jun. 15, 2011 3:42PM EDT Last updated Thursday, Jun. 16, 2011 6:15AM EDT Mr. Carney strongly suggested that the central bank continues to see narrow financial regulation, like steps taken by the Finance Department to make it harder for some Canadians to get a mortgage, as a more appropriate tool than rate hikes for taming the domestic side of the equation. Repeating warnings he has sounded for more than 18 months as Canadian borrowers binged on cheap credit, Mr. Carney said the share of households “highly vulnerable to an adverse economic shock” has risen to its highest level in nine years and urged borrowers and banks to be careful. Indeed, while the mortgage market in Canada is more conservative than in the United States, where the subprime lending collapse triggered the 2008 financial crisis and Great Recession, Mr. Carney said real estate loans now make up more than 40 per cent of Canadian banks’ assets, compared with 30 per cent a decade ago, a situation he called “unprecedented exposure.” “The central position of housing assets and liabilities on the balance sheets of both households and financial institutions means that any housing excesses could generate important vulnerabilities in the financial system,’’ Mr. Carney said. “Historically low policy rates, even if appropriate to achieve the inflation target, create their own risks.” As long as rates are so low, Canadian authorities will “need to remain as vigilant’’ and watch for financial imbalances, he said. Vancouver is Ground Zero, with prices up an astounding 25.7 per cent to $831,555 – more than 11 times the city’s average family income – from $661,745. Realtors point to immigrants from China as a major factor in neighbourhoods on the city’s west side. Although this has never been quantified with hard numbers that are publicly available, the anecdotes colour all talk of real estate in the city. When Mr. Carney was asked how policy makers know that Asian wealth is helping to fuel the biggest price gains, he responded that the central bank has access to all data on insured mortgages across the country. “The buyers who are making the market move, their appetite isn’t necessarily controlled by Mark Carney,” said broker Mike Stewart of Century 21 in Vancouver. “And he’s kind of got his hands tied, with the dollar so high.” In any case, while prices are soaring, Mr. Stewart said there isn’t the “exuberance” he remembers from the 2003 to 2006 period when the market was white hot. The number of homes sold in B.C. in May actually slipped slightly from a year ago. “Everyone realizes it can’t go up forever, but like any market there’s bears and bulls,” he said. Mr. Carney strongly suggested that the central bank continues to see narrow financial regulation, like steps taken by the Finance Department to make it harder for some Canadians to get a mortgage, as a more appropriate tool than rate hikes for taming the domestic side of the equation. Repeating warnings he has sounded for more than 18 months as Canadian borrowers binged on cheap credit, Mr. Carney said the share of households “highly vulnerable to an adverse economic shock” has risen to its highest level in nine years and urged borrowers and banks to be careful. Indeed, while the mortgage market in Canada is more conservative than in the United States, where the subprime lending collapse triggered the 2008 financial crisis and Great Recession, Mr. Carney said real estate loans now make up more than 40 per cent of Canadian banks’ assets, compared with 30 per cent a decade ago, a situation he called “unprecedented exposure.” “The central position of housing assets and liabilities on the balance sheets of both households and financial institutions means that any housing excesses could generate important vulnerabilities in the financial system,’’ Mr. Carney said. “Historically low policy rates, even if appropriate to achieve the inflation target, create their own risks.” As long as rates are so low, Canadian authorities will “need to remain as vigilant’’ and watch for financial imbalances, he said. Vancouver is Ground Zero, with prices up an astounding 25.7 per cent to $831,555 – more than 11 times the city’s average family income – from $661,745. Realtors point to immigrants from China as a major factor in neighbourhoods on the city’s west side. Although this has never been quantified with hard numbers that are publicly available, the anecdotes colour all talk of real estate in the city. When Mr. Carney was asked how policy makers know that Asian wealth is helping to fuel the biggest price gains, he responded that the central bank has access to all data on insured mortgages across the country. “The buyers who are making the market move, their appetite isn’t necessarily controlled by Mark Carney,” said broker Mike Stewart of Century 21 in Vancouver. “And he’s kind of got his hands tied, with the dollar so high.” In any case, while prices are soaring, Mr. Stewart said there isn’t the “exuberance” he remembers from the 2003 to 2006 period when the market was white hot. The number of homes sold in B.C. in May actually slipped slightly from a year ago. “Everyone realizes it can’t go up forever, but like any market there’s bears and bulls,” he said. June 16, 2011 Monica Gutschi and Dow Jones, Jonathon Rivait, National Post · Jun. 15, 2011 | Last Updated: Jun. 15, 2011 3:04 AM ET The gap between the "haves" and "have-nots" in Canada is deepening as more vulnerable households struggle to manage their rising debts, the Certified General Accountants Association of Canada found in its latest annual survey. "The haves will hold their own. The have-nots will be in peril," Rock Lefebvre, CGACanada's vice-president of research and standards, said in an interview Tuesday. Canadian household debt has now risen to a historic $1.5-trillion, or $176,461 for every family with two children, the study found. With savings rates falling, more Canadians are finding their balance sheets increasingly stretched, the association said. The CGA-Canada report found that one in 10 Canadian households couldn't handle an unexpected expense of $500. One-fifth would have trouble dealing with an unforeseen expense of $5,000. BY THE NUMBERS $176,461 Amount of household debt for every family with two children. 146.9% Current debt to income ratio. The problems are far worse among those earning less than $35,000 a year, those under 35, families with young children, single-parent families, and those close to retirement, the study found. "Some people are in trouble, that's the bottom line," Mr. Lefebvre said, noting that 57% of respondents said they were borrowing for day-to-day expenses. That makes them "vulnerable" to an increase in interest rates, he said, potentially leading to rising defaults and bankruptcies. The Bank of Canada is generally expected to raise interest rates later this year as the country's economy continues to recover from the 2009 recession. Although the rate of debt accumulation slowed as consumer credit contracted in the first few months of 2011, CGA-Canada found the key percentage of debt to income has risen to a historic 146.9%. "This is probably getting to the maximum indebtedness we should allow ourselves to have," Mr. Lefebvre said. He said Canadians appear to be using their homes as piggy-banks, in a trend similar to that seen in the United States earlier in the decade, and which led to the housing crisis there. At the end of 2010, total owner's equity was at a 10-year low of 67.7% and housing equity was at a 20-year low of 34.6%. "Houses are worth more, but we own less in them," Mr. Lefebvre said, adding that people have been withdrawing the rising equity in their homes to purchase consumer durables and incidentals. Meanwhile, savings rates have deteriorated, with 27% of non-retired Canadians committing no resources to any type of regular savings, and an additional 14% reducing their savings after the 2008/09 recession. Still, 82% of Canadians surveyed said they felt confident they can manage their debt and potentially take on more. The study warned that some households may find their ability to pay at risk, with only 42% of respondents reporting their income has risen in the past year, and half of those surveyed suggesting their finances would be hurt by a 10% drop in income. SOURCE: CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF CANADA June 15, 2011 June 13, 2011 By Peggy Mackenzie May was our month of reckoning. After letting our budget gather dust, we decided to take a look and see where we're really spending money. My husband and I both promised to write down every purchase, including those under $1. It was hard and I constantly wanted to cheat but since I’d only be cheating myself. I resisted the urge. When the kids were young and we had a big mortgage, keeping track of our spending was easy since we didn’t have much left over. After the mortgage, utilities, car and groceries our discretionary income was negligible. The kids are older and we're making more. But costs are up too. There's sports, saving for post-secondary education, and forking over never-ending school fees. We realized recently that we'd lost track of things. We have more to spend and we're spending it  When trying to lose weight, cutting empty calories are the first to go. Likewise, with household spending. The first thing we noticed was that a lot of 'one-time' expenses were actually recurring. The May down payment for our August vacation rental became a June hotel payment for the same holiday. Car maintenance happens at least twice a year, and a bill always accompanies the car home. There are vet bills for the dog and summer camp fees for the kids. The solution was to change our budget. Another thing we noticed was that we were spending more than expected to 'save.'  We had bought online coupons for restaurants and started using them. The problem was that we were going out more often than planned and so weren't  really really saving anything at all. Going out once in a while - fine. Going out three times in one month to 'save money' - bad. After looking at  gas  bills, my husband started walking to work and takes the car occasionally, where he was before the winter hit. The fifteen minute walk is refreshing for him and our car. Our daughter loves scanning the flyers and writes down where all the deals are.  We'll be reviewing sports memberships that aren't being used. Our son loved karate for years, but football is his new passion. As a family, we have to decide if we need hundreds of cable channels (I vote no). We've continued tracking our bills for the month of June and if we're smart, it will turn into a life-long exercise. The spreadsheet is started; the next steps will be to transfer it to one of the many budgeting databases. Finding the fat in our diet is making it easier for us to shed the debt. Also read Krystal Yee's post on Budgeting Tools. You can contact Peggy Mackenzie at pmackenzie@thestar.ca or follow her on Twitter: PeggyMackenzie June 14, 2011 Postmedia News June 10, 2011 Led by increases in Ottawa and Toronto, prices of new homes resumed their upward trend in April. However, the increases could slow as the year goes on, one analyst said. Statistics Canada said Thursday its new housing price index rose 0.3 per cent in April, for the fifth gain in the past six months. The index has risen 1.9 per cent since last April. Analysts had predicted new home prices would rise by 0.1 per cent after remaining flat in March. According to the Statistics Canada report, Ottawa-Gatineau and Toronto were again at the forefront of the gains, with prices in those metropolitan areas rising 1.3 per cent and 0.6 per cent, respectively. Prices in the Ottawa area are up primarily because of higher material costs, Statistics Canada said, while market conditions drove up prices in the Toronto area. In a separate report on global real estate trends released Thursday, Scotia Capital economist Adrienne Warren said Canadian real estate prices were up five per cent in the first quarter of 2011 over the same period in 2010, but pointed out that high prices paid by foreign buyers in the Greater Vancouver Area are having a distortionary effect on the national average. Excluding Vancouver, she said, average real prices were up just one per cent year-overyear. "Housing sales in Canada, while below the record-setting pace seen at the height of the boom in 2005-2007, are being supported by steady job creation and still attractive borrowing costs," Warren said. "Relatively tight supply is adding to price pressures in several cities. "Nonetheless, high home prices, the further tightening in mortgage-insurance rules effective mid-March, and the upward drift in fixed-mortgage rates this year appear to have slowed demand somewhat, most notably among first-time buyers. "We anticipate relatively flat sales volumes and average prices through the latter half of the year." Prices remained the same in April in only seven of the 21 metropolitan areas covered in the new housing price index. The most significant monthly declines were seen in Victoria (down 0.8 per cent) and the New Brunswick composite group of Saint John, Fredericton and Moncton (down 0.5 per cent), as builders in these regions lowered prices to entice buyers. Canada's housing market remains stable, and shouldn't be "much of a driver nor much of a drag on growth in 2011," BMO Capital Markets economist Robert Kavcic said in a note released earlier in the week. © Copyright (c) The Ottawa Citizen   June 13, 2011 Michele Lerner Investopedia.com Published Thursday, Jun. 09, 2011 8:49AM EDT Last updated Thursday, Jun. 09, 2011 10:02AM EDT The smartest home sellers know that holding out for a too-high price will result in a property that sits on the market for months and then, eventually sells for less than the asking price. Pricing a home appropriately for today's market is essential for a sale, but homeowners can find other ways to increase their profit margin even when selling at a reduced price. (For related reading, also take a look at Top 5 Signs of a Bad Real Estate Agent.) Rather than focusing entirely on the price, sellers should look at the bottom line: Their net profit. Home sellers typically pay the commission of the real estate agents involved on both sides of the transaction. While commissions vary by agency and location, in general they are about 5 or 6 per cent of the sale price or about $12,000 on a $200,000 home. Each real estate agent will typically earn 2.5 to 3 per cent splitting the overall commission. One of the quickest ways to keep more of the profit from a home sale is to find a way to pay lower fees. 1. Negotiate the Commission Every home seller should interview at least three real estate agents before choosing someone to list the home. As part of the interview process, don't be afraid to ask for a discount on the commission. While some sales agents will agree to the reduced commission, others won't. A lot depends on the price range of your home and how quickly and easily the agent believes it will sell. The more you know about your own market and how to price your home, the easier the agent's job will be. A Los Angeles Times article recommends "pre-staging" your home to make an agent more eager to list it, and therefore possibly more willing to reduce the commission. 2. Work with a Reduced-Fee Real Estate Agent Several discount real estate brokerages have opened in recent years, which charge reduced fees to sellers while keeping the buyer's agent commission at the standard market rate, which saves approximately 25 per cent of the overall commission fees paid by the seller. Actual fees vary by market conditions, but these companies and other discount brokerages can save sellers thousands of dollars in fees while still providing full services to their customers. 3. Flat-Fee Listings While some homeowners want to sell their home on their own and are confident they can handle showing the home and negotiating with potential buyers, they may be concerned about marketing their home to buyers and to real estate agents. Flat-fee listing services allow homeowners to have their property placed in the Multiple Listing Service (MLS) used by Realtors. Listing the home on the MLS exposes the home to real estate agents working with buyers who may be interested in the property, and will usually include placing the home on real estate websites visited by potential buyers. Other than the fee of a few hundred dollars, the sellers would only pay the commission of the buyer's agent. 4. For Sale by Owner (FSBO) Homeowners can also choose to sell their home completely on their own, creating their own marketing materials, advertising, showing the home and negotiating terms. A wide range of services are available for FSBO sellers, including flat-fee MLS listings, access to real estate agents for advice and websites with FSBO listings, all at various fees. If the buyer works with a real estate agent, the seller can negotiate the terms of the sale, but generally will need to pay the buyer's agent commission. ForSaleByOwner.com says that about 20 per cent of all home sales are direct transactions between a buyer and a seller without any real estate agent. (for more on selling your home on your own, see 9 For Sale by Owner Mistakes.) 5. Dual Agency Sales Dual agency refers to a scenario in which the same real estate agent represents both the buyer and the seller. In some states, dual agency is illegal; in others, agents must disclose this relationship with both parties. If your listing agent works with buyers and sells your home to someone he is already working with, this could be an opportunity to request a discounted commission since this one agent is earning the entire commission. But be wary of encouraging a dual agency situation, because it can be difficult for the real estate agent to fairly represent the interests of both the buyers and the sellers. In addition, a real estate agent may be less interested in showing your home to her buyers if she knows she will earn a lower commission on that transaction. It's best to discuss the possibility of dual agency when signing on with a listing agent to be sure you both understand the ramifications of this type of situation. The Bottom Line If you choose to reduce your commission fees, be aware that you may find yourself selling your home for less than you would with a traditional real estate agent. Carefully weigh the pros and cons of working with a real estate agent and evaluate your market. Make sure you have the time and ability to handle some of the home-sales tasks on your own, such as showing the property, negotiating and checking out the buyer's ability to finance the purchase before making a decision about selling on your own. (Find out why you may need help selling your home in 5 Reasons Why You Still Need A Real Estate Agent.) June 10, 2011 Amy Fontinelle - Investopedia Buying a home is a very emotional process, but if you allow those emotions to get the best of you, you may fall prey to a number of common home buyer mistakes. Since buying a home has many far-reaching implications - ranging from from where you will live to how hard it will be to make ends meet - it's important to keep your emotions in check and make the most rational decision possible. There are eight common emotional mistakes that people make when buying a home. Avoiding these pitfalls will help you find the best home-sweet-home. Mistake 1: Falling in Love With a House You Can't AffordOnce you've fallen in love with a particular home, it's hard to go back. You start dreaming about how great your life would be if you had all the wonderful things it offered - the lovely, tree-lined streets, the jetted bathtub, the spacious kitchen with professional-grade appliances. However, if you can't or won't be able to afford that house, you're just hurting yourself by imagining yourself in it. To avoid the temptation to get in over your head financially, or the disappointment of feeling like you're settling for less than you deserve, it's best to only look at homes in your price range. Start your search at the low end of your price range - if what you find there satisfies you, there's no need to go higher. Remember, when you buy another $10,000 worth of house, you're not just paying an extra $10,000 - you're paying an extra $10,000 plus interest, which might come out to double that amount or more over the life of your loan. You may be better off putting that money toward another purpose. Mistake 2: Assuming There's Nothing Better Out ThereUnless you are a high-end buyer looking at custom homes, chances are that for any home you find that you like, there are quite a few others that are nearly identical to it. Most neighborhoods have multiple homes that are the same model. Further, most neighborhoods are full of homes that were all constructed by the same builder, so even if you can't find an identical model for sale, you can probably find a house with many of the same features. If you're considering a condo or townhouse, the odds are also in your favor. Even when you have a long list of must-haves, there are probably several homes out there that can meet your needs. If there are snags with the home you've decided you like - such as major repair issues, an inflexible asking price or a difficult possession date - consider moving on. Being open to keep looking will save you from making rash decisions you might regret later. Mistake 3: Being DesperateWhen you've been looking for a while and you're not seeing anything you like - or worse, you're getting outbid on the houses you do want - it's easy to get desperate to get into your new house now. However, if you move into a house you'll end up hating, the transaction costs to get rid of it will be costly. You'll have to pay an agent's commission (up to 5-6% of the sale price) and you'll have to pay closing costs for the mortgage on your new house. You'll also deal with the hassle and expense of moving yet again. If you decide not to move but to try to make the best of what you have, remember that alterations and renovations are expensive, time-consuming and stressful. If you have time on your side, it's OK to wait until something that suits you comes along - as long as your demands are realistic for your budget, you are bound to find something you live with. Mistake 4: Overlooking Important FlawsFor any of the three reasons we just discussed, you might be tempted to ignore major problems with the house that will be difficult, expensive or impossible to change. Carefully consider your options before you make a commitment, and consider waiting until something better comes along. New houses come on the market every day.Mistake 5: Overestimating Your Handyman SkillsDon't buy a fixer-upper that's more than you can handle in terms of time, money or ability. For example, if you think you can do the work yourself then realize you can't once you get started, any repairs or upgrades you were planning to make will probably cost twice as much once you factor in the labor - and that may not be in your budget. Not to mention the costs involved to fix anything you may have started and the fees to replace the materials you wasted. Honestly evaluate your abilities, your budget and how soon you need to move before purchasing a property that isn't move-in ready. Mistake 6: Rushing to Put In an OfferIn a hot market, it may be necessary to pull the trigger very quickly if you find a home you like. However, you have to balance the need to make a quick decision with the need to make sure the home will be right for you. Don't neglect important steps like making sure the neighborhood feels safe at night as well as during the day and investigating possible noise issues like a nearby train. Ideally, you'll be able to take at least a night to sleep on the decision. How well you sleep that night and how you feel about the home in the morning will tell you a lot about whether the decision you're about to make is the right one. Taking the time to consider the decision also gives you a chance to research how much the property is really worth and offer an appropriate price. Mistake 7: Dragging Your FeetIt's a tough balancing act to make sure you make a careful decision, but don't take too long to make it. Losing out on a property that you were almost ready to make an offer on because someone beat you to it can be heartbreaking. It can also have economic consequences. Let's say you are self-employed. Perhaps for you more than anyone else, time is money. The more time and energy you have to take out of your normal activities to search for a house, the less time and energy you have available to work. Not dragging out the homebuying process unnecessarily may be the best thing for your business, and the continued success of your business will be essential to paying the mortgage. If you don't pull the trigger quickly, someone else might, and you'll have to keep looking. Don't underestimate how time-consuming and routine-disrupting house shopping can be. Mistake 8: Offering Too MuchIf there's a lot of competition in your market and you find a place you really like, it's all too easy to get sucked into a bidding war - or to try to preempt a bidding war by offering a high price in the first place. There are a couple of potential problems with this. First, if the house doesn't appraise at or above the amount of your offer, the bank won't give you the loan unless the seller reduces the price or you pay cash for the difference. If this happens, the shortfall on your bid as opposed to your mortgage will have to be paid out of pocket. Second, when you go to sell the house, if market conditions are similar to or worse than they were when you purchased, you may find yourself upside down on the mortgage and unable to sell. Make sure the purchase price for the home you buy is reasonable for both the house and the location by examining comparable sales and getting your agent's opinion before making an offer. ConclusionIt's natural for emotion to come into play in the hombe-buying process. Buying a house is a big decision, but this is exactly why you need to ensure you are making rational choices, rather than getting wrapped up in the notion of a dream home. Slow down, overcome your emotions and, ultimately, make a home-purchase decision that's good for both your feelings and your finances June 9, 2011 Nicolas Van Praet  Jun 7, 2011 – 2:38 PM ET | Last Updated: Jun 7, 2011 4:57 PM ET MONTREAL – The risk that the economic slowdown in the United States will turn into another North American recession is not high, Canada’s finance minister said Tuesday as he cautioned that too many people nevertheless remain jobless in this country. “I do not think the risk is great,” Jim Flaherty said in response to a reporter’s question at the International Economic Forum of the Americas taking place in Montreal. “There are risk indicators with respect to which we are concerned which we reviewed in the budget [Monday] and which I reviewed with the private sector economists with whom I met last week. The nature of the risks have not changed. We are concerned about debts and deficit in the United States and the need for a convincing longer term plan in the United States” to deal with those problems. Ottawa is also concerned about some evidence of continuing slowness in the U.S. real estate market which puts a damper on consumer confidence in that country, Mr. Flaherty said. As well, it is worried about the sovereign debt situation among some eurozone countries, including Greece.“These are all risk factors but they are known risk factors,” Mr. Flaherty said, adding that to address the risk in the latest budget, federal finance officials discounted private sector growth assumptions by $10-billion in nominal GDP each year, equalling a revenue markdown of $1.5-billion annually. The U.S. economy grew at a 1.8% annual rate in the first quarter but job growth remains anemic, prompting U.S. Federal Reserve Chairman Ben Bernanke to say Tuesday that the central bank should maintain monetary stimulus to boost a “frustratingly slow” recovery. U.S. employers hired 54,000 more people in April, well below the 165,000 expected by economists. “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” Mr. Bernanke said in a speech in Altanta. The U.S. economy is growing above “stall speed,” Deutsche Bank AG foreign exchange analyst Alan Ruskin told Bloomberg in an interview Tuesday. “A lot of people say that if the U.S. economy slows below 2% in year-over-year gross domestic product historically, we’ve slipped in to recession. The key is that we stay above that line, otherwise that is perceived as stall speed and other issues kick in.” The pace of economic recovery in the United States is crucial for Canada because America is Canada’s largest trading partner, buying 75% of all Canadian exports like oil, wood and cars. Any major slowdown would hurt Canadian businesses and force layoffs here. Mr. Flaherty maintained that unemployment in Canada also remains too high, even as his government initiates targeted hiring investments. The country’s unemployment rate stood at 7.6% in April as the economy added 58,000 mostly part-time jobs. Employment has grown by 1.7% in the last year. Asked if the Canadian government has picked a preferred candidate to lead the International Monetary Fund, Mr. Flaherty said not yet. Former IMF chief Dominique Strauss-Kahn resigned last month amid allegations he sexually assaulted a New York City hotel worker. Agustín Carstens, the head of the Mexican central bank, and Christine Lagarde, France’s finance minister, are vying for the job. In a speech to conference delegates, Mr. Flaherty stressed the importance of sound fiscal management for an elected government, noting no one truly foresaw the credit crisis in the fall of 2008 and subsequent recession. He said “it’s unpredictable” when the next shock might come. The finance minister on Monday delivered a budget that included a pledge to bring the federal government back into surplus position by 2014-2015. He said he will do that through a combination of $4-billion in annual spending cuts and closing tax loopholes to generate another $4.1-billion. The cuts mark the most intense attempt to rein in public sector spending in more than a decade. The government is conducting an operational review of the federal service and some departments have begun laying off staff. Opposition against the cuts is expected to grow in the months ahead. Canadian Auto Workers union president Ken Lewenza said Monday the government’s  spending will wipe out thousands of jobs and hurt service delivery. “With the economic rebound being so uncertain and anemic private sector investment growth, these billion-dollar cuts are the last thing Canada needs,” Mr. Lewenza said. But compared to what a private company would do to trim spending, the government’s $4-billion plan is not very ambitious, Mr. Flaherty argued. Mr. Flaherty’s savings target represents 5% of Ottawa’s $80-billion in annual discretionary spending. The government won’t book the savings until it achieves them and has not provided any details of which programs and departments will be affected. June 8, 2011 Globe and Mail Update Published Wednesday, Jun. 08, 2011 8:42AM EDT Last updated Wednesday, Jun. 08, 2011 8:44AM EDT Construction activity picked up slightly in May, boosted by multiple dwellings such as condos, Canada Mortgage and Housing Corp. said today. Housing starts rose to a seasonally adjusted annual rate of 183,600 from 178,700 in April, the federal agency reported. “Housing starts increased modestly in May due to an increase in multiple construction in most provinces and in rural starts,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre. “The increase in multiples and rural starts was partly offset by a decrease in single starts.” The numbers were juiced by a 33.3-per-cent increase in British Columbia and, to a lesser extent, a 13.5-per-cent gain in Quebec. Starts increased 11 per cent in the eastern provinces and 10 per cent on the Prairies. Ontario starts fell 22.9 per cent. “Note that housing starts and building permits reached a cycle peak of around 200,000 back in Q1 of last year and since then the trend has been a slowly declining one, despite a low interest rate environment,” said economist Krishen Rangasamy of CIBC World Markets. “And with a recent softening in the pace of existing home sales, the listing to sales ratio rose to a 7-month high in April. So, we may see some softness ahead for housing. We expect housing starts to continue to soften (i.e. a 10 per cent or so drop in starts compared to last year) as home prices stagnate in light of higher interest rates in the second half of the year.” June 8, 2011 SHELLEY WHITE Globe and Mail Blog Posted on Monday, June 6, 2011 9:52AM EDT For most people, a decision to sell their home is followed by a call to a real estate agent. But according to a recent poll, many Canadians aren't thrilled about making that call. Nearly three-quarters of the 1002 Canadians polled by Harris-Decima said they think real estate commissions are too high. (Real estate agent fees usually equal five or six per cent of a the sale price, so roughly $15,000 for a $300,000 home.) And 64 per cent said they were open to considering an alternative to using a real estate agent in order to sell their home. The company that commissioned the study, PropertyGuys.com, certainly has a vested interest in the results. It's one of many new websites springing up where people can list a home sale privately (in this case, for a flat fee of $399). “High-fee real estate agents are a relic of a different world, a different economic reality and a different home owner,” says Walter Melanson, director of partnerships with PropertyGuys.com. With Netflix making video stores a thing of the past and Expedia overtaking the traditional terrain of travel agents, it does raise the question of whether real estate agents are also vulnerable. When they decided to sell their home in Barrie, Ont., Murray and Tiiu Hamblin had no qualms about doing so privately. Ms. Hamblin's parents had sold several houses privately over the years and it seemed like an easy and profitable way to go. “I remember my Mom saying you don't need a real estate agent to sell your house, all you need is a lawyer,” Ms. Hamblin says. On her mother's advice, Ms. Hamblin had a customized “for sale” sign made for $65 to put in front of the house. She also paid $200 to put ads in the two Barrie newspapers. The couple started getting calls immediately and set up appointments with interested buyers. They staged and showed their home themselves. “I showed the inside of the house, Murray showed the outside,” says Ms. Hamblin. “It only took us two weeks and we never had to have an open house.” Once they found a buyer, Ms. Hamblin typed up a simple agreement of purchase detailing the home's address, the price, the enclosures (like the dishwasher), the closing date and other details. The buyer took the document to his lawyer, who reworked it with all the proper legal language and made four copies: for the buyer, the Hamblins and both lawyers. He brought the documents back to the Hamblins with a deposit cheque. And that was pretty much it. In this case, the buyer was also not using an agent. If he had been, the Hamblins would have added that agent’s fee into the sale price of the house. Ms. Hamblin said it was a positive experience and one that she'd definitely do again. They figure they saved about $10,000 in agent fees. “It's all so easy,” she says. “Why do you need someone else to sell it?” The other added bonus? “Because you know you aren't going to have to shell out that extra money for an agent, you can lower your price,” she says. “[The buyer is] saving money too, because he knows with the bells and whistles of an agent, a house would cost more.” Ms. Hamblin admits that they were lucky because their buyer had been hoping to get on their street for years. And the Hamblins were comfortable showing people through their home and handling the transaction themselves, something not every homeowner would want to do. They also didn't run into any problems with the buyer's financing or the inspection of their home, things that might have complicated their experience. Getsmarteraboutmoney.ca (a consumer information website funded by the Ontario Securities Commission) advises homeowners considering selling a home themselves to ask the following questions: 1.Will you do at least as well on price as an agent? This isn't a question easily answered. Canadian data in this area is scarce, and the numbers from U.S. sources are contradictory. For example, a 2010 survey by the National Association of Realtors (NAR) found that the median price for homes sold with the help of a real estate agent was more than those sold by an owner. But a 2009 study by economists at Northwestern University found the opposite. 2. How much will you save in commissions? Though many companies that support private sellers claim you won’t have to pay any sales commissions to agents, buyers often use an agent even for a private sale. So you may still, as the seller, be expected to pay that agent's fee. 3. How quickly will you be able to sell your own home? The Northwestern study found that houses sold through an agent using MLS (Multiple Listing Service) were more likely to sell faster, but the reasons why are unclear. On the one hand, private sellers may be more willing to wait for a better price. Or perhaps real estate agents have more expertise and a better network to help them sell a home more quickly. In the end, it may be about how much effort you are willing to put into your own home sale. As Getsmarteraboutmoney.com puts it, “Are you really ready and able to do the same job (as an agent) – if not better?” June 7, 2011 The Canadian Press, On Monday June 6, 2011, 5:11 pm EDT By The Canadian Press OTTAWA - Construction activity is expected to remain healthy this summer even after the value of building permits fell 21 per cent in April as the decline followed a particularly strong March, economists say. Statistics Canada reported Monday that building permits fell to $5.3 billion after increases in February and March on a slide was in both the non-residential and residential sectors. Economists had expected an average seven per cent drop. The disappointing April figures followed a March that saw municipalities issue $6.8 billion in building permits, the highest figure since June 2007. The value of non-residential permits fell 33.2 per cent to $1.9 billion in April after permits were issued for a number of big projects in March. Residential permits came in at $3.5 billion, down 12.6 per cent. Building permits are a signal of contractors' intentions and foretell trends in the housing and construction markets. But the monthly data is volatile and must be examined on a longer-term basis to draw any conclusion about the underlying trend, said Capital Markets economist David Madani. "We can expect fairly active construction activity in both non-residential and residential sectors over the summer," he said. "When you consider the work that's under construction now and the permits that are in the pipeline, we can expect pretty active construction activity in the summer — I think that's pretty much in the bag." But Madani said he does see trouble down the road because Canadian home prices are substantially overvalued. "We're of the opinion that we've simply built too many homes," Madani said. The housing market has been slowing in many parts of Canada and in some cities, an over built condominium sector — especially in big cities like Toronto and Vancouver — has also started to weigh down the market. CIBC World Markets analyst Emanuel la Enenajor emphasized the weakness in the report. "In particular, the softness in residential permits continues to suggest homebuilding activity will ramp down this year, with roughly a 10 per cent drop in housing starts for 2011 from the prior year," Enenajor wrote in a note. BMO Capital Markets senior economist Sal Guatieri said one month of permits doesn't make a trend. "We are not seeing — at least in most regions — overbuilding of housing units," he said in an interview. "So, that's good, because if demand does fall off in response to higher interest rates, we won't see a glut of unsold homes sitting on the market depressing prices," he added. However, he noted the data suggested non-residential construction is cooling off after activity soared 14.4 per cent in the first quarter of the year. June 7, 2011 Money Crashers, On Wednesday June 1, 2011, 4:24 pm EDT Selling your house can be a huge headache--especially when you're selling it in today's buyer's real estate market. One of the most challenging aspects to deal with is determining your home's value. When it comes to fixing a fair price, homeowners always shoot high. After all, you love your house and you know how much work you've put into it. Won't someone else appreciate it as much as you do? [See 50 Best Funds for the Everyday Investor] The short answer is no. An experienced real estate agent will take the emotional factor out of the equation and help you come up with a realistic market value for your house. But if you want to sell your house yourself without a realtor--or you just want to be prepared for the number they advise--here are five factors that can heavily skew the asking price of your home. 1. Location We've all heard how important "location, location, location" is, and with good reason. A great house in a bad location can knock as much as 50 percent off the value. If you have the nicest, most expensive house in your average neighborhood, then the value is also going to be much lower than it would be if you had the least expensive house in a nice neighborhood. Other factors, like freeways, proximity to a landfill or sewage treatment center, and train tracks, can knock 10 to 15 percent or more off the value of your home. This is why it's so important to shop location first when you're buying a house; you can always add home improvements, but moving it to another neighborhood isn't going to happen. 2. Outdated Rooms If your fridge is more than 15 years old and your oven isn't black or stainless steel, then count on listing your house lower than you'd be able to if you had a fully updated kitchen. With the influx of homes on the market right now, people can easily get a home that doesn't need any updating, so why would they choose one that does? If you don't want to update your home in order to sell it, know that outdated rooms can affect the value of your home by up to 10 percent. 3. Renters Many people don't want to own a home surrounded by rental properties. Although it's a stereotype, tenants often don't keep up the property like an owner would. In this case, the value of your house can go down as much as 15 percent, depending on how many rentals are in close proximity to your home. 4. Major Upgrades In this market, don't count on getting more for your home if you just upgraded the plumbing, bought a new furnace, or replaced your roof. However, if your home does need those upgrades and you haven't done them, then it's going to knock as much as 20 percent off the value of your home, depending on how severe the upgrade is. Buyers simply don't want to shell out for major upgrades - especially when there is a large pool of other properties to choose from. [See the best personal finance stories from around the Web at the U.S. News My Money blog.] 5. Fencing Most people looking to buy a house have kids or pets. If your home doesn't have a fenced backyard, you're going to alienate a huge portion of the market since fenced backyards are essential for keeping kids and pets safe and contained. Not having a fence can knock up to 10 percent off your home's value. Final Thoughts Although many of these factors, like location and proximity to renters, are out of your hands, there are plenty of things you can do to increase the value and appeal of your home. For instance, buyers almost always choose light and airy homes over dark ones. Therefore, it's beneficial to do whatever you can to bring a sense of light and space into your home. Other factors, such as fresh paint and a tidy lawn, make a great first impression as well. The important thing is to be realistic when deciding on a price for your home so that you can move it off the market as quickly as possible. If you've sold your home before, what are some of the biggest factors that impacted the final selling price? June 7, 2011 KEVIN CARMICHAEL WASHINGTON— From Saturday's Globe and Mail Published Friday, Jun. 03, 2011 8:39AM EDT Last updated Friday, Jun. 03, 2011 11:31PM EDT Whatever momentum the U.S. economy had earlier this year is gone, snuffed out by higher fuel prices and the disruption of global trade caused by the Japanese earthquake. American employers added a mere 54,000 jobs in May, the weakest showing since a string of four consecutive monthly declines in hiring ended in October, 2010, according to government data released Friday. The unemployment rate rose to 9.1 per cent, the second monthly increase after the jobless rate had dropped one percentage point over four months, to 8.8 per cent in March. The increase in payrolls was well below the 165,000 jobs projected by Wall Street, a forecast that was itself considerably lower than even a couple of weeks ago, as analysts made last-minute corrections to their outlooks after a run of negative data this week. The Dow Jones industrial average and the Standard & Poor’s 500-stock index slumped to their lowest levels since March, as analysts variously described the labour report as “bleak,” “terrible,” and “very weak.” The U.S. dollar fell against a basket of currencies, and Treasury yields declined as investors sought the relative security of U.S. debt. The most recent U.S. data describe an economy bereft of confidence, suggesting economic growth will remain slow because companies are unwilling to take the risks that would drive a faster expansion. As a result, the seven million people who have lost work since the start of 2008 will continue to languish. Companies added workers for an eighth month, the longest stretch of uninterrupted monthly jobs growth since 2006. Yet the gains are unspectacular by historical standards, and there is little indication that employers are willing to push through headwinds such as higher energy prices. Productivity rates in the United States are at high levels, an indication that bosses would rather squeeze more out of existing workers than commit to new salaries and benefits. In May, businesses reduced temporary workers, a bad omen because the addition of short-term workers tends to precede sustained hiring of full-time employees. “I’m gun shy,” said Peter Bredlau, president of Quality Services Associates Inc., a small construction company based in Roselle Park, N.J., that these days is making most of its money from servicing heating and air conditioning systems. A little more than a year ago, Mr. Bredlau said he had to write off debt owed to him of about $30,000 (U.S.), a significant sum for a company that employs fewer than 20 people. “My wounds are still a bit raw,” said Mr. Bredlau, who no longer accepts work without a significant down payment. “History is telling me I have to be careful.” Coaxing people like Mr. Bredlau to take a leap of faith is not only an economic problem, but a political one, especially for U.S. President Barack Obama. No president has won a second term when the unemployment rate was higher than 7.2 per cent since Franklin Delano Roosevelt. To win in November, 2012, Mr. Obama almost certainly will have to test history. Matt McDonald, a partner at Washington-based consultancy Hamilton Place Strategies and a former White House staffer, argues that Mr. Obama’s chances of success would be bolstered considerably if the unemployment rate were to dip below 8 per cent by election day. Such a reading would squelch criticism that the President’s policies are hurting the economy, and show up as considerable improvement from the 10.1-per-cent peak in October, 2009. The latest numbers put Mr. Obama well off the Hamilton Place target. Before Friday’s report, Mr. McDonald calculated the economy needed to generate an average of 209,000 a month to drop the jobless rate below 8 per cent by November, 2012. Over the eight months of employment growth through May, employers created an average of 150,000 jobs. Manufacturing employment fell 5,000 in May, compared with an average gain of 27,000 over the previous six months, suggesting the destruction of factories in Japan is forcing U.S. facilities to curb production because of a lack of Japanese components. State and local governments shed 30,000 workers, a trend that is likely to continue as politicians cut spending to shrink inflated budget deficits. Private-sector service providers added 80,000 positions in May, compared with an average increase of 152,000 over the previous six months, according to Kevin Logan, chief U.S. economist at HSBC in New York. “Today’s weak report raises more concerns about the underlying strength of the economy,” Mr. Logan said in a note to his clients. Previous releases this week showed that home prices, factory production and consumer confidence all deteriorated in May. Economists at Barclays Capital in New York cut their forecast for economic growth in the second quarter to a 2-per-cent annual rate from a previous estimate of 3.5 per cent. Many analysts said the weaker economic data would force the U.S. Federal Reserve Board to refrain from raising borrowing costs for longer than previously anticipated. There was one positive in the May labour market report: Average hourly earnings rose 0.3 per cent to $22.98 in May. It also is important to note that monthly jobs figures are volatile. In 2004, when the U.S. economy was strong, employers added fewer than 50,000 jobs in a month on two occasions. Tom Porcelli, chief U.S. economist at Royal Bank of Canada in New York, argued that the disappointment with the May jobs data is the result of too many analysts believing the U.S. economy was stronger than it is. That also is Mr. Bredlau’s perspective. Nothing much changed for him in May. In fact, he’s just added an employee to help keep up with increased demand for his ventilation services, which is the result of some competitors going out of business. “I hear we are heading back into recession mode,” he said. “I don’t believe we ever left.” June 6, 2011 Angie Mohr Investopedia.com Published Friday, Jun. 03, 2011 7:11AM EDT Homeowner's insurance is one of the most common types of insurance and one of the least understood. Many homeowners believe that their policies will cover them for practically any damage sustained to the house or contents. The reality is that homeowner's policies contain many exclusions and restrictions on coverage that can leave you with a coverage gap. Here are five common myths about homeowner's insurance. (For related reading, also take a look at The Beginner's Guide To Homeowners' Insurance.) 1. Loss-of-Use Coverage If you have damage to your home severe enough that you cannot live in it while it is repaired, you likely expect that the insurance company will put you up in a hotel while the work is being done. However, that is not necessarily true. Not all policies include a loss-of-use provision. If you have to pay for a hotel, meals and other services out of pocket, it can add up quickly and put you at financial risk. If loss-of-use is covered, it will be stated explicitly in your policy, along with any limits of coverage. For example, your policy may state a maximum per diem amount or restrict the length of time the expenses will be paid for. 2. Replacement Cost Replacement cost in a homeowner's policy refers to valuing the loss at the amount it will cost to replace the item. For example, if your four-year-old computer is lost in a fire, replacement cost coverage would allow you to purchase a new one with similar features. Most homeowners believe that is what will happen if they have a claim, however, the bulk of policies do not carry this clause. If not included, losses will be valued at what they were worth in their condition before the calamity. The four-year-old computer might be valued at $250 - not enough to purchase a new one. Replacement cost clauses are a valuable inclusion in a homeowner's policy. 3. Flood Coverage Almost all homeowner's policies exclude flood coverage, along with earthquakes and other natural disasters. Floods can occur from a number of causes, such as a hurricane, burst pipes or sewer backup. A flood is one of the most common causes of home damage and the destruction of contents. There are companies that specialize in flood coverage, and, if you live in a susceptible area, look into having a separate flood policy. Your mortgage company may require this additional coverage as well. (For more information, see Understanding Lender-Required Flood Insurance.) 4. Termites Termites live all over North America but are most destructive in southern climates, where their lifecycles are not affected by cold weather. Termites eat wood - lots of it - and can eat the supports in your house as easily as fallen leaves in the forest. They live in large colonies and, collectively, can destroy the structure of your home. Repairing termite damage and eradicating them can cost thousands of dollars. Most policies exclude termites and other pest damage. If you live in a susceptible area, the best insurance is to have the house regularly checked and sprayed by a professional. 5. Valuation of Loss When you have a house insurance claim, the insurance company will send out an appraiser to determine the extent of the damage and the best way to fix it. The appraiser will assess a value to the loss which will be the minimum the insurance company can pay in order to meet their contractual obligations. However, you do not have to take that value as final. If you can prove your loss should be valued higher, you can negotiate the settlement with the company. Keeping receipts and pictures of valuable items will help you back up your claim. The Bottom Line To really know what is in your homeowner's policy, you should read it thoroughly. Look for exclusions to coverage and decide how you will cover those risks. In some cases, your insurance company will have separate add-ons that they can attach to your policy or you can get specialized insurance from another company. For those risks that cannot be insured, analyze how you will financially cover those risks if they should happen. (For additional reading, also see Insurance Tips For Homeowners.) June 6, 2011 Postmedia News · Jun. 4, 2011 | Last Updated: Jun. 4, 2011 4:14 AM ET Most of Canada's banks lowered mortgage rates for the second time in a week on Friday, by another 0.1% in most cases. Royal Bank of Canada started off the announcements on Friday, soon followed by TD Canada Trust. The smaller Laurentian Bank and Desjardins Group joined the parade late in the afternoon, before Bank of Nova Scotia and Bank of Montreal threw in at the end of the day. "Interest rates are near historic lows, and prospects for the Bank of Canada to raise interest rates is being pushed back to later this year," said Michael Gregory, senior economist at BMO Capital Markets. All of the changes are effective June 4 except Desjardins Group, whose new rates take effect on June 6. While most of the banks took 0.1% off their rates, TD and BMO both discounted certain rates by 0.2%. With the changes, the five-year closed mortgage rate at all six banks drops to 5.39%. June 6, 2011   By Benjamin Tal, Deputy Chief Economist, CIBC    Recently both the U.S. Federal Reserve (the Fed) and the Bank of Canada described the economic picture as “unusually uncertain.” And this was before the unrest in the Middle East and Africa and before the devastating development in Japan. Add to this scenario the recent downgrading of Spain and Portugal by Moody’s, and you have a world that is even more uncertain than “unusually uncertain.”   If the real measure of intelligence is what you do when you don’t know what to do, then the next few months will test the economic IQ of both the Fed and the Bank of Canada. Given the increased uncertainty, it is reasonable to assume that both banks will be extremely conservative when it comes to monetary policy.   While short-term volatility will continue to influence markets in the near term, the focus should be on the big picture, which is much more predictable. And this big picture is changing. The great recession gave birth to a dramatic shift in the engines of economic growth in North America, and any successful investment strategy must incorporate this information.   The near 3% growth rate projected for gross domestic product (GDP) in 2011 masks the dynamics of powerful economic forces pulling in different directions. A vibrant business sector will gradually take over an exhausted consumer and restrained government.   Government spending was a buffer for economic activity during the downturn, but with ongoing gains in business activity, the coming years should see the government hand the reins of growth back to the private sector. Significant reductions in spending will come by late 2011, when infrastructure stimulus projects wrap up. Additional cuts to program spending should see compensation expenses drop on wage restraint, employment attrition and select job cuts.   On the other side of the scale, corporate Canada is doing much better. By any measure, the current recovery in capital spending is impressive. The rate of return on capital employed is back to its mid-2008 level, and despite the surge in investment, corporate Canada’s cash position is at a record high (in relation to both equity and sales). Large corporations can still raise funds relatively cheaply, and cash-starved small- and mid-sized firms can now borrow more easily, with overall credit outstanding to this sector starting to show signs of life after being in negative territory for the past two years.   In fact, the manufacturing sector is already positioned to start expanding — with its current capacity utilization reading of 81%, it stands above its long-term average and a record six points above that of the rest of the economy. The last time the utilization gap approached this level was in 1995, and manufacturing investment advanced by an average annual rate of more than 10% for the following three years. With relatively elevated capacity use and rates of return on capital employed in the manufacturing sector approaching a 10-year high, look for business investment in manufacturing to rise strongly in 2011, joining the upswing in western oil sands projects.   While current economic uncertainty will continue to influence markets and lead to sharp swings in commodity prices and related equities, the new mix clearly suggests that investors should focus on the improving the conditions of corporate Canada, in general, and the manufacturing sector, in particular. With supply-chain opportunities arising south of the border as a result of the U.S. manufacturing sector’s increased exposure to emerging markets, look for growing opportunities for high-end Canadian exporters in the coming years with positive implications for their valuations.   Another opportunity in this environment is the dividend-paying segment of the market. The recent increase in risk aversion will benefit this sector directly, as it tends to attract conservative money, and indirectly as increased uncertainty will limit any potential upward pressure on interest rates.                       June 3, 2011 By Dana Flavelle | Wed Jun 1 2011 More Canadians are living closer to the edge as consumer debt loads continued to climb in the first three months of the year, a study shows. Already at record levels, Canadians now owe just under $26,000 on average on their lines of credit, credit cards and auto loans, according to credit rating agency, TransUnion. That’s an increase of 4.5 per cent, or another $1,000, over the same period last year. The report comes a day after Bank of Canada Governor Mark Carney warned consumers to curb their spending, saying record low interest rates aren’t going to last forever.   The fear is that higher rates could push more consumers beyond their ability to repay their loans. “There are going to be a lot of people in the market who are near the edge,” TransUnion vice-president Thomas Higgins said in an interview. “If there’s a drastic change in interest rages or unforeseen unemployment or some other shock from the U.S. or the European Union that throws off a province, or a region, or an industry, the people on the edge have no buffer.” The news is not all bad. Debt growth in Canada is slowing from the double-digit pace seen before the recession, Higgins said. And total borrowing, including mortgages, typically the biggest household loan, is slowing, major Canadian banks said recently in their quarterly reports. TransUnions’ figures don’t include mortgages, which typically make up two-thirds of a household’s debt. Finance Minister Jim Flaherty said Tuesday he’s not concerned about a slowdown in consumer spending, as it suggests Canadians are heeding official warnings about spending beyond one’s means. However, TransUnion said the fact that consumers’ debt load is still rising is a worry. The Bank of Canada’s trend-setting overnight lending rate is just 1 per cent. But with inflation running at 3.3 per cent, above the central bank’s ideal range, Carney is under pressure to start raising lending rates to dampen demand. Analysts predict a rate hike could come later this year barring unforeseen circumstances. Total debt per consumer increased to $25,597 in the first three months of this year, Trans Union said. Among types of loans, TransUnion said credit card debt, usually the most expensive to carry, barely budged from a year ago, falling $25 to an average of $3,539. In a sign some borrowers may already be struggling, the national credit card delinquency rate rose 11 per cent. The rate measures the ratio of consumers who take 90 days or more to pay their bill. The average line of credit, the most popular loans for their low cost and high flexibility, rose 5.9 per cent to $33,762 compared to last year. However, total line of credit debt declined for the first time in five quarters. One noticeable shift was the decreased use of lines of credit, Higgins said. The category is the largest among consumer loans, making up 41 per cent of the total, and even more in Ontario, at 57 per cent. But consumers are moving way from these highly flexible, low-cost products in favour of more rigid installment type loans, perhaps in a bid to force themselves to make regular payments, he said. The average auto loan rose 12.4 per cent to $16,181 compared to a year ago. Total auto debt declined slightly to $45.8 billion. The study found debt loads rose in all provinces, led by Quebec and Newfoundland and Labrador. British Columbians had the highest load at $36,649. The average borrower debt on auto loans was also up in the quarter — by 12.4 per cent to $16,189 from $14,402 in the first quarter of 2010. The delinquency rate on auto loans fell slightly to 0.1 per cent from 0.13 per cent a year ago. Lines of credit are the most popular form of consumer debt, excluding mortgages, accounting for more than 41 per cent of outstanding debt at the end of the first quarter. Debt on lines of credit stood at an average $33,981, up 5.9 per cent from $31,867 in the first quarter of 2010. The report is based on anonymous credit files of all credit-active Canadians.Also read: June 3, 2011 On Monday May 30, 2011, 10:32 am EDT   Sometimes a parent decides to buy a place for their children while they hit the books in university or college. It can be a good alternative to paying thousands of dollars toward residence fees or rent. Just look at the math: Student rent of $500 a month = $6,000 a year = $24,000 over 4 years of school. That money could go to your mortgage instead as an investment for you. In Ottawa, for example, you can buy an older one-bedroom condo for about $195,000. Or, buy a 2-bedroom for $240,000 and let your child's roommate help cover the mortgage by paying rent. Let's assume you pay 20 per cent down. Here's an example of what your monthly costs could total when morgage rates are low: Cost 1-bedroom 2-bedroom Mortgage payment $800 $1,000 Condo fees $350 $450 Property taxes, maintenance $300 $400 Total: $1,450 $1,850 Think about it: if your child rents a place, your money is helping the landlord pay his or her mortgage and other costs. If you buy a place instead and rent it to them, you have a real estate investment with a guaranteed tenant: your child. If the investment goes up in value, you will make money. Just remember that those gains will be taxed. Also remember, mortgage rates and other costs change, and these changes will impact the numbers and your decision. Things to consider before you decide: You can buy the property in your name, in your child's name, or both. If you buy the property in your name, you should consider: The rental income you charge can pay a lot of your costs. Just remember you have to declare that income on your tax return. As a landlord, you can also claim many of your expenses, including mortgage interest. Assess your costs carefully before you buy. They will vary with the local real estate market, mortgage rates and other factors. Plan for some vacancies. Your child (or their roommate) may not stay in the condo over the summer break. Are you really going to ask them to pay rent if they are living somewhere else for a few months? Remember that you will own a greater share of the equity as you pay off the mortgage. And, the value of the condo may rise over time. This can offset your costs. But whether you do more than break even depends on what happens to housing prices in the area. There are other benefits, too. Your child won't need to look for a different place to live each year. They also won't have to worry about subletting every summer. And their furniture won't be coming back with them if they live at home over the summer break. Not a bad deal. Remember: you may not make money if you buy a student condo.But there are other reasons you may decide to go ahead. At the very least, you can provide your child with a nice place to live in a good neighbourhood while they go to school. June 3, 2011 U.S. single-family home prices dropped in March, dipping below their 2009 low, as the housing market remained bogged down by inventory and weak demand, a closely watched survey said Tuesday.     The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in March from February on a seasonally adjusted basis, in line with economists' expectations. The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak     demand have kept the housing market on the ropes even as other areas of the economy start to recover. The 20-city composite index was at 138.16, falling below the 2009 low of 139.26. "This month's report is marked by the confirmation of a double-dip in home prices across much of the nation," David Blitzer, chairman of the index committee at S&P Indices, said in a statement. "Home prices continue on their downward spiral with no relief in sight."   Eight cities fell 1 percent or more in March, while Washington was the only city where prices increased on both a monthly and yearly basis. Prices in the 20 cities fell 3.6 percent year over year, topping expectations for a decline of 3.3 percent. "The declines sustained in the last 12 months have almost erased the gains of the previous 12 months. The housing market is treading backward, but not drowning," said Cary Leahey, economist and managing director at Decision Economics in New York. In the first quarter, the national index fell 1.9 percent on a seasonally adjusted basis, compared to a decline of 1.8 percent in the previous quarter. On a non-adjusted basis, they fell by 4.2 percent in the quarter. Nationally, home prices are back to their mid-2002 levels, the report said. Blitzer told CNBC that the decline in prices, though fairly widespread, has become more prevalent in geographic pockets—the Southwest and Southeast as well as the Michigan and Ohio manufacturing regions. "What we've seen over the last few months despite the decline in prices is we've gone back to the old 'location, location, location' story instead of everything going down at once," he said. "California has clearly broken out of the pattern it was in, which is a big plus." Though there had been hopes in the industry that prices were troughing and ready to turn higher, the latest trends show little hope in sight until later this year or early in 2012, he added. "Everybody's now keeping their fingers crossed for 2012 and wondering whether people just don't want to own homes anymore," he said. On a non-adjusted basis, they fell by 4.2 percent in the quarter. June 2, 2011 Yolander Prinzel Investopedia.com Published Wednesday, Jun. 01, 2011 6:19AM EDT Identity thieves are nothing if not creative; they can take the most seemingly innocent item and turn it into the keys to unlocking your financial fortress. The more technology encroaches into our daily lives, the more access we give them to our personal information. (There are many different ways to be victimized through home ownership - learn how to identify and avoid these crimes. Check out Mortgage Fraud: Understanding And Avoiding It.) Social Networks Exactly how much information do you share on social networks? When you complete your profile or account information for a social networking site, they ask for personal information such as your date of birth, address, phone number and even your hometown or place of birth. While giving all of this information to a social networking site might enhance your ability to connect with other users, it also puts very important information out for potential thieves to use. Make their job harder by leaving these sections blank. And it's not just about the information you give in your profile - you also need to consider what you say within your profile. For example, many financial websites like to use your mother's maiden name as a failsafe for identifying you when you log on or forget your password. But what happens if you happen to mention your mother's maiden name in a social network status update? Don't just watch what you put in your profile, watch what you mention in passing too - potential identity thieves certainly will. Unsecured Websites When you input information onto a website and submit it - let's say to the seller of an item in an online store - the data that you enter into the required fields must be transmitted to the receiving company. In between your computer (the data entry point) and the final recipient's, the data can be redirected to an identity thief unless the website is secured against such an action. It's easy to tell the difference between a secured and unsecured website when you are entering personal information or credit card numbers into a site. The first is to look at the website's address in your address bar. A site that begins with "http://www" is not secure. When you see an "s" after http (as in, https://www), then you know the site is secure. Another way to find out if you are entering data into a secured site is to look at the bottom right or left side of your browser for a little padlock icon. This icon also indicates that the website transmission is secure. (Follow this sound advice and plan for a comfortable future. See 10 Tips For Achieving Financial Security.) Cell Phones As phones get "smarter," we leave more and more important information on them that enables thieves to easily steal our private financial data when we sell or donate old phones after an upgrade. If you use your phone to log in to your bank, billing or social networking accounts, then you need to erase any stored data before you let your cell phone leave your possession. Potential Fraud We've all heard the horror story of identity theft and how thieves have hacked into bank accounts and credit cards - or opened new bank accounts and credit cards in the names of those they've stolen from. But there are other ways in which thieves can apply your identity and steal from your good name, and that includes utilities fraud. Utilities fraud involves the creation of utility company accounts in the name of the victim. This could include power, cable and other accounts. This type of fraud may not show up when you monitor your credit report, and you may not get bills for the service alerting you of the problem, so it is important to guard your information carefully in order to avoid becoming a victim. The Bottom Line One of the most important (and most basic) things you can protect is your identity. Because not only does this bleed into your financial life and situation, it also affects your reputation, credit report and ability to get certain employment positions. Take the necessary steps to fend off identity thieves before they get your information in their sights. (Make sure there are no errors holding you back from obtaining a loan. Check out Check Your Credit Report.) June 1, 2011 For immediate release 31 May 2011 Contact: Jeremy Harrison 613 782-8782 Ottawa - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economic recovery is proceeding broadly as expected in the Bank’s April Monetary Policy Report (MPR). The U.S. economy continues to grow at a modest pace, limited by the consolidation of household balance sheets. Growth in Europe is maintaining momentum, although the risks related to peripheral economies have increased. The disasters that struck Japan in March are severely affecting its economic activity and causing temporary supply chain disruptions in advanced economies. Commodity prices have declined recently but are expected to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets. These high prices, combined with persistent excess demand conditions in major emerging-market economies, are contributing to broader global inflationary pressures.  Despite the challenges that weigh on the global outlook, financial conditions remain very stimulative.  In Canada, the economic expansion is proceeding largely as expected in the April MPR. The economy grew at an annual rate of 3.9 per cent in the first quarter, reflecting continued strong business investment, smaller contributions from household and government spending, and a modest drag from net exports. Although temporary supply chain disruptions are expected to restrain growth sharply in the current quarter, this is expected to be unwound in subsequent quarters. While underlying inflation is relatively subdued, the Bank expects that high energy prices and changes in provincial indirect taxes will keep total CPI inflation above 3 per cent in the short term. Total CPI inflation is expected to converge with core inflation at 2 per cent by the middle of 2012 as excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored. The possibility of greater momentum in household borrowing and spending in Canada represents an upside risk to inflation. On the other hand, the persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered.  Information note: The next scheduled date for announcing the overnight rate target is 19 July 2011.A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 July 2011 May 31, 2011 MoneySense Staff, On Thursday May 26, 2011, 12:22 pm EDT   1. Moncton, N.B. For the second year running, Moncton tops our list as the best place in Canada to buy real estate. Not only are houses here very affordable — with an average price of $163,000 — but household incomes average a respectable $72,093. This year, it was the only city out of 35 that got an A+ in our value ranking, meaning that homes are well within reach for local residents who make a typical salary. In fact, it takes only 2.26 years worth of the average family's annual household income to buy (before taxes and other expenses). With a population of 126,400 — and growing — the city has a wide range of housing. Jobs abound in this diversified bilingual town, with UPS, FedEx, Purolator, Royal Bank and ExxonMobil all calling Moncton their regional home. 2. Regina, Sask. Four years ago, Regina had the country's hottest housing market. This year, the city nabbed the No. 2 spot on our list, mainly because its economy is on fire. Sectors such as oil, potash, uranium, diamonds and farming are all booming, and Regina has the lowest unemployment rate of all the cities we ranked, at 4.6 per cent. Much of the growth is due to healthy immigration into the province, which reached a record 3,400 people in 2010. Although housing prices have more than doubled over the past four years, the average cost is still a reasonable $260,000. GDP expected to grow by 3.4 per cent this year, and a large grocery warehousing and distribution firm recently opened a one-million-square-foot facility for trucks to drop off and transfer goods, making Regina a new Asia-Pacific gateway for trade and adding 800 new jobs in the city. 3. Fredericton, N.B. Overall, the province of New Brunswick did well in our ranking. While Moncton topped the chart at No. 1, the provincial capital of Fredericton was right on its heels at No. 3—up from the No. 4 spot it held last year. What accounted for the rise? Its value score jumped up to an A and its momentum score was boosted to B+. The data shows a cheap average house price of $174,000, coupled with a respectable average household income of $76,659 annually. That may not sound like a lot of money to people who live in big cities, but in Fredericton, an average worker's buying power is huge. It takes only 2.27 years worth of that annual household income (before taxes and expenses) to buy a home—a close second to Moncton in our measure of affordability. But though house prices are low, they still made healthy gains of 4.5 per cent over the past year, the second largest increase on our list. Then there's Fredericton's rock-bottom unemployment rate, which stands at just 5.6 per cent. 4. Winnipeg, Man. From manufacturing and government to agriculture and education, Winnipeg boasts a diverse economy that has weathered the recession well. The city of 642,000 people has an average house price of $239,183, an average annual household income of $80,859, and an attractive affordability rating. The south side of the city has traditionally been the most popular, particularly with families. Neighbourhoods like River Park South, Linden Woods, Whyte Ridge, Island Lakes and Sage Creek all boast top schools and facilities—as well as resale value. There has been demand for condos in the downtown for a while, and many older factory buildings have been renovated into loft-style condos along the waterfront and are gaining popularity. Downtown revitalization remains an ongoing process with a new baseball stadium, the Forks and the MTS Centre providing a solid base for further development. 5. Saint John, N.B. Saint John is the largest city in New Brunswick, situated in a scenic spot at the mouth of the St. John River. Though house prices here have risen by 27 per cent over the last four years, demand is forecast to stay strong well into 2011. That's because the average home costs just $179,000, while unemployment is a super-low 6.4 per cent and projected to keep falling. While known primarily as an industry town that is home to thousands of refined petroleum, manufacturing and transportation jobs, Saint John has also quietly developed a diverse and vibrant arts scene. The Imperial Theatre, built in 1913 and restored in the 1990s, has been designated a National Historic Site. It plays to packed houses year-round and is home to the city's symphony, opera, ballet and theatre. 6. Saskatoon, Sask. Saskatoon made our list mainly because of one thing: its hot economy. The city ranked No. 6 overall and received the highest marks for its growing industry and rock-bottom unemployment rate. Aside from being the world's largest producer of potash, and home to one of the globe's largest publicly-traded uranium companies (Cameco), Hub City has gradually evolved into a destination for young people in the technology and health sciences industries. Housing prices have grown by 27 per cent in the past four years and the average is now about $296,000. For entry-level housing, the west side is your best bet. Though communities such as Stonebridge in the south and Willowgrove in the north are newly established, developers project a high demand and are responding accordingly. 7. Gatineau, Que. Often obscured by Ottawa's long shadow, Gatineau — just across the Ottawa River in Quebec — has all the benefits of the capital's steady economy plus a much more affordable real estate market. It has several massive office towers for government workers, and the unemployment rate is expected to fall in the years to come. Gatineau earned a high grade for value, with the average house costing just $220,500 — about $14,000 less than in Ottawa. The former city of Alymer is now a suburb of Gatineau where many anglophones are taking advantage of the hot market for new homes—as well as its golf courses, spas, and bicycle paths. The former city of Hull, across the Gatineau River, is also a safe bet. 8. Charlottetown, P.E.I. No longer known for just lobster and potatoes, Charlottetown has many of the attractions of a larger city — but with less crime and a close-knit community. It received a value grade of A for its extremely low average home price of $175,000. Over the past four years, 65 per cent of all homes listed were sold, making Charlottetown one of the healthiest resale markets in Canada. The unemployment rate is still high at 9.2 per cent, but it's projected to dip below 8 per cent by the end of 2011. When scouting out real estate buys, look for gorgeous historical homes in the downtown core that have been completely renovated, or consider a condo at Patterson Terrace. A two-bedroom unit near the ocean starts at $150,000. Second-home buyers will also not be disappointed. 9. St. John's, N.L. St. John's tied with first-place Moncton for the highest score in momentum this year. Its biggest resource is the ocean, which now provides Newfoundland with an offshore oil industry attracting scores of newcomers in search of work. Last year, the economy in St. John's grew by 5.8 per cent and the area saw the emergence of a new metal mining sector, with construction already underway on a nickel processing plant near Long Harbour, about an hour west of the city. Although house prices have gone up by almost 36 per cent over the past four years, the average house still goes for just $255,000. May 31, 2011 By Julian Beltrame OTTAWA – Canada’s economy expanded an impressive 3.9 per cent in the first three months of this year, but there was little cheering in markets with the performance. Not only was the number slightly below the four per cent consensus expectation, but the elements of growth clearly signalled a sharp braking in the economy ahead. The most encouraging news in the much-awaited Statistics Canada report Monday is that the last month of the quarter — March — saw a gross domestic pick-up of 0.3 per cent, slightly above consensus. “Its not just the headline that matters. It’s the composition of (first quarter) growth that is disconcerting,” said Derek Holt, vice president of economics with Scotiabank. The composition included a heavy dose of production placed in storage awaiting future sales, with inventory build-up accounting for three quarters of the growth. Meanwhile, consumers were in hibernation, contributing only 0.1 percentage points to growth, and net trade was a drag, with the solid 1.6 per cent rise in exports from the previous quarter swamped by a 2.2 per cent gain in imports. The bright spots were in business investment, manufacturing and housing. Statistics Canada also made several revisions Monday, upgrading 2010 growth a notch to 3.2 per cent, but downgrading 2009 three ticks to a loss of 2.8 per cent, making it the second worst year for the Canadian economy in half a century. As well, the agency trimmed growth in the fourth quarter of 2010 to 3.1 per cent from 3.3. Markets reacted negatively to the report initially, shaving one-tenth of a point off the loonie to 102.35 cents US. The Canadian quarter was still much better than the U.S.’s 1.8 per cent advance, but it was below the Bank of Canada’s call for a 4.2 per cent pick-up. The central bank expects the second quarter, which ends on June 30, to slow to two per cent, but analysts said it could come in lower given the headwinds building in the world economy. For the Bank of Canada, the report largely removes any question that governor Mark Carney will do anything but stand pat for another interest rate setting Tuesday, leaving the policy rate at one per cent. Last week, several Canadian banks trimmed mortgage rates in another signal that the cost of borrowing will likely remain at very attractive levels for some time. Bank of Montreal economist Douglas Porter said the omens are pointing a slower momentum for the economy than the central bank had projected in the spring, which should give Carney reason to remain inactive. “A couple of weeks ago we pushed back our forecast on the first rate increase to September, and if anything, the risks are that the bank may wait even longer than that,” Porter said. Holt believes the bank may stay interest rate hikes until the end of the year. Economists have also sounded a mild alarm on the global economy due to the aftershock of the Japan natural and nuclear disaster, the dampening impact of high oil prices and renewed concerns over government debt in Europe and the U.S. The expectation is that Canadians likely saw the best the economy has to offer in the first quarter, although as yet no reputable economist is predicting an outright contraction. In the first three months, all major industrial sectors, except for retail trade and arts, entertainment and recreation, increased their output. Goods production rose 1.8 per cent from the previous quarter while service-producing industries increased 0.7. Manufacturing as well as mining and oil-and-gas extraction were the largest contributors to growth. Construction, transportation and wholesale trade also recorded notable increases. The Canadian Press   May 31, 2011 By Mark Weisleder Buying a house in the city or suburbs can be complicated enough, but buying a cottage or vacation property outside of town requires even more due diligence. In town, you probably wouldn’t ask if the water coming out of the tap is drinkable. Nor would you wonder if the plumbing was hooked up to the sanitary sewer. But these are exactly the sorts of questions you should ask when buying a cottage, plus a few more. 1. Get an inspection: Cottages are usually occasional residences and so may not be as properly maintained as they should be. This is why every purchase should be conditional a satisfactory professional home inspection. If the cottage has a wood-burning stove or fireplace, then a certificate must be requested from a Wood Energy Technical Transfer specialist, to confirm that the system was installed and is operating correctly. 2. Is the water drinkable? There are two areas of potential concern when it comes to water – the quantity and quality. Is there enough to satisfy family needs and is it good enough to pass the local health department requirements. Ask the sellers for these things: • A potability certificate from the local health authority, confirming the water is safe to drink; • Confirmation that the well, the pump and related equipment have performed adequately during the Seller’s occupancy; • Confirmation that there is an adequate rate of flow for normal household use; • Provision of a well driller’s certificate, if available; and • The location of the well. A separate inspection may be needed by a well specialist. If nothing else it gives you an idea of what it would cost to replace the well if it fails. 3. How’s the septic system? Septic systems present their own difficulties because it is usually difficult to tell during an inspection how long the system may last. The replacement cost can be up to $20,000, especially if there are stringent environmental regulations in effect in your area. Buyers should ask for confirmation that: • The system was installed with all necessary permits; • The system has been adequately maintained; • The seller is not aware of any malfunctions; • The seller will provide copies of any inspection or approval reports in their possession; • The seller agrees to pump out the tank at their expense prior to closing; and • There are no work orders on file with the Ministry of the Environment or the local municipality. The buyer should arrange for their own separate inspection of the system itself. 4. What’s the road allowance? Even if your cottage fronts on water, this does not give you ownership of the land up to the lake. The first 66 feet fronting onto the lake is typically owned by the local municipality and is referred to as the shore road allowance. Although you have access to the water, you can’t stop others from using it. Nor can you build anything on that 66-foot piece of land. Many cottagers have found out afterwards that either all or part of their cottage was built on land that they do not own. You may be able to buy the land from the municipality, but it is a process. If you can get an up to date survey from the seller, this should answer your questions. Also inquire to make sure that any required permits were obtained to build a dock or boathouse, as there is no automatic right to do this. In all cases, make sure you have title insurance, which should assist with most of these types of issues. 5. Access to the cottage: If you do not have year round access by a city road, then you must ask how you get from the road to your property. If it is a private right of way over a neighbour’s land, you must understand the terms of this agreement to ensure it is year round access and it is clear who is responsible for maintaining the road. If there is no registered right of way, it can be a nightmare, with owners fighting over who has the right of way and who owns it. For all of these reasons, it is recommended that buyers work with a local real estate agent who should be familiar not only with each of these issues, but more importantly, will be able to recommend the professional inspectors and town officials who can satisfy a buyer’s concerns. By being properly prepared before buying a cottage, you will avoid unwelcome surprises after closing. May 31, 2011 John Shmuel, Financial Post · May 31, 2011 | Last Updated: May 31, 2011 2:04 AM ET Canadian housing starts will slow this year and existing-home sales will grow as housing falls more in line with "demographic fundamentals," according to the latest housing outlook from Canadian Mortgage and Housing Corp. The Crown agency said it expects housing starts will range between 166,600 and 192,200 units in 2011, with a point forecast of 179,500. That's a slight dip from 2010 numbers, when Canada had 189,930 housing starts. "Modest economic growth, in conjunction with relatively low mortgage rates, will continue to support demand for new homes in 2011 and 2012," said Bob Dugan, CMHC's chief economist. "Nonetheless, we are expecting new and existing housing markets to fall in line with demographic fundamentals as changes to mortgage rules take hold." CMHC expects housing starts to grow again in 2012, with a forecast of 163,200 to 207,000 starts, and a point forecast of 185,300 units. May 31, 2011 DIANNE NICE Globe and Mail Update Published Monday, May. 30, 2011 5:25AM EDT Last updated Monday, May. 30, 2011 7:42AM EDT When Robert McLister and his wife, Melanie, were shopping for their first home, a Toronto condo, in 2003, they were totally unprepared. “We weren’t in the business back then and didn’t really know what questions to ask,” says Mr. McLister, a Vancouver-based mortgage planner and editor of the Canadian Mortgage Trends blog. “I would have done things entirely differently if we had the knowledge we have today.” Most first-time buyers don’t know how the system works. If they did, they’d receive much better rates and terms, Mr. McLister says. “Banks price off a discretionary model. They do not give their best rate to everyone and they will not quote their lowest rate up front.” Being a loyal customer doesn’t guarantee you’ll get the best rate from your bank. The only way to be sure is to do some comparison shopping. Mortgage brokers can compare rates from all lenders and can often offer volume discounts at no cost to the borrower because the brokers receive a commission or incentive from the lender. Before signing with a broker, be sure to ask how much of their business goes to their top lenders, Mr. McLister says. “If you’re dealing with a broker that sends two-thirds of their business to one or two lenders, then you have to ask why. You want to make sure that the reason is to benefit you.” Another way to compare rates is to call your bank’s mobile mortgage specialist. These agents work on commission with low overhead costs, and often offer a better rate than the bank staff, Mr. McLister says. But don’t fixate on the mortgage with the lowest interest rate without determining whether other options, such as a flexible payment schedule, fit your needs well. Here are some other mortgage shopping pointers from Mr. McLister: 1. Find good advice Rising rates and penalties can make it hard to escape a poorly planned mortgage. Make sure you’re getting recommendations based on projected amortization comparisons, historical research and your personal needs. Try to find a mortgage professional who has at least two years of experience. If you’re dealing with a broker, look for someone who has closed $10-million in the last 12 months and is on the “status” lists of several major lenders (for better pricing). 2. Work your bank If you deal with a bank directly, never accept the first offer. Always come prepared with research on competitors’ rates, which are easily found online. Ask a mortgage broker to run a comparison, even if only for a second opinion. 3. Assess your needs People hate penalties and love open mortgages, but they are often poor value, unless you break your mortgage within 180 days, Mr. McLister says. Closed variable-rate mortgages have much lower rates, and even when you factor in the three-month interest penalty for early termination, closed variables are cheaper when held for at least six months. 4. Forgo needless frills Lump-sum prepayment privileges often come with higher rates. That’s wasted money for the 82 per cent of Canadians who don’t make lump-sum prepayments in a given year. If you’re not going to maximize your annual prepayment allowance, ask if cheaper mortgages exist with less generous options. 5. Don’t be a fibber Never lie about the rate you’ve been quoted. You’ll often be called on it by bankers and brokers who study and know the competitive landscape. Moreover, when a mortgage professional senses you’re lying, it’ll become a defensive relationship that doesn’t serve your best interests. May 30, 2011 Canadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction, says the chief executive of Bank of Montreal. Consumers "have certainly had plenty of opportunity to think about it," Bill Downe said in an interview. "The governor of the central bank [Mark Carney] has done a good job of sending out cautionary notes and we've put a lot of effort into trying to help people make better decisions." The good news is that BMO customers are starting to take heed "on the margins" by paying down more on their credit cards. However, growth in the overall home loan market "is continuing to be more robust," Mr. Downe said, adding that BMO's portfolio is growing more slowly than the overall market. Canada's fourth-largest lender on Wednesday kicked off second-quarter bank earnings season with a 7.5% increase in profit on the back of lower provisions for bad loans. For the three months ended April 30, BMO had net income of $800-million, or $1.34 a share, up from $745-million ($1.26) in the same period last year. The bank set aside $145million in provisions for credit losses, down $104-million as more customers repaid their loans. Since the financial crisis, Canadian banks have been consistently cutting back on credit provisioning, which has helped boost results, and at BMO they're now close to where they were in the latter half of 2007 before the turmoil hit. "We would characterize this as a solid quarter for BMO," said John Aiken, an analyst at Barclays Capital, who added that earnings quality was "quite high." The biggest surprise was a $47-million after-tax loss from exposure to the earthquakes in New Zealand and Japan, resulting in net income in the insurance business of just $1million, compared to $43-million in the same period last year. On a conference call with analysts, BMO executives said natural disasters of such magnitude are rare events and the losses are unlikely to be repeated anytime soon. The domestic personal and commercial operation, BMO's biggest driver, had a profit of $401-million, up $7-million as strong loan volume growth mostly offset rising expenses. There is evidence that consumer credit-card balances are declining as bank customers start to heed warnings about taking on too much debt. On the residential mortgage side, Mr. Downe said he expects to see growth start to "soften" in the coming months. Mr. Carney has warned several times over the past 12 months that record household debt levels have left this country vulnerable to economic shocks. The struggling U.S. operation posted net income of $43-million, down $2-million, as the bank set aside higher provisions for bad loans. Analysts anticipate the Canadian banks will report a slight increase in profit for the quarter as they contend with the impact of declining consumer borrowing, moderating capital markets activity and other headwinds. With domestic household debt levels hovering close to where they were in the United States prior to the financial crisis, many observers are warning that Canadians need to start paying down debt if the economy is remain on level footing. jgreenwood@nationalpost.com May 26, 2011 Rachel Mendleson Special to Globe and Mail Update Published Wednesday, May. 25, 2011 6:21AM EDT Last updated Wednesday, May. 25, 2011 6:48AM EDT Lauren Chender likes to shop around. So when she and her husband were trying to figure out what kind of mortgage to get on their first home, she took to the Internet and began comparing the interest rates posted on various bank websites. But as the Toronto resident did more research, she discovered that it might be possible to get even lower rates through an independent mortgage broker, or by speaking with a financial institution’s mortgage department directly. Even when she found a good rate, she discovered that the tough decisions just kept coming. Should she go with a variable or fixed rate? What about the amortization period? “It’s overwhelming,” says Chender, who wound up using a broker to secure the mortgage on her semi-detached Victorian. “There was a lot to know.” Chender is hardly alone. Despite the fact that how you finance your home will have a significant impact on everything from what you can afford to how long you’ll be in debt, the complexity of mortgages can make it difficult to arrive at an informed decision. But by understanding what’s at stake, you can cut through the jargon and weigh the options to find a mortgage that’s right for you. Perhaps the most important thing to consider when thinking about how to finance your home is what taking out a mortgage really means. As Rob McLister, editor of Canadian Mortgage Trends, explains, “Mortgages are definitely among the cheapest money you can borrow, simply because they are secured by quality assets.” But they are also a tremendous responsibility, and something that can greatly increase what you end up paying for your home. While an interest rate of 4 per cent on a $200,000 loan may not seem like a lot today, that changes dramatically when you consider that repayment will likely be spread over decades. With that in mind, the first step to choosing the right mortgage is identifying the lender whose terms work best for you. While prospective home buyers often begin with their financial institution, your search shouldn’t stop there. As Sarah Daniels, a Vancouver-area realtor, points out, “The lenders are in competition for you.” She advises using a mortgage broker, who will “shop you around” to all the lenders, free of charge. (Mortgage brokers are paid a finder’s fee by the lender. There’s no charge to the home buyer for a pre-approval and no obligation.) And whether you opt for a broker or not, a second opinion never hurts. “It always helps to get one or two other quotes to keep everyone honest,” says McLister. It’s a good idea to get pre-approved for a mortgage before you start house hunting. That way, you can get a sense of your budget, and avoid falling in love with a property you can’t afford. To give you a pre-approval, lenders factor in your income, type of job and credit history. They also take into account how much you have to put toward a down payment, and any other debts you may have. The amount you are pre-approved for is the upper limit of what the lender will allow you to borrow. Add that to your down payment, and you’ve got the total amount you have to put toward a home. If you have bad credit, are self-employed or want to borrow more than what a bank or credit union will approve, you may want to consider using an alternative lender. But while second- or third-tier lenders (examples include Equitable Trust and Aaron Acceptance Corp.) have looser requirements, the mortgages they issue come with higher interest rates (sometimes much higher), so they are not generally recommended for first-time buyers. The specifics of the mortgage you select will depend on what makes the most financial sense, as well as your personal preference. One important decision is whether to go with a fixed rate of interest, which is locked in for the entire term of the mortgage (usually five years), or a variable rate, which can change depending on market forces. In today’s low interest rate environment, “variable rates are initially cheaper upfront,” says McLister. The risk is that they could rise far above the fixed rate later in the term, increasing your monthly payments. You’ll also have to set the amortization period, which is the theoretical length of time you have to pay off your mortgage in full, assuming you never move. Bear in mind that while a longer amortization (as of March 2011, the maximum for an insured mortgage in Canada is 30 years) may give you a bigger mortgage or lower monthly payments, it’ll also mean paying more interest in the long run. If you want the flexibility to make additional lump-sum payments outside of your scheduled monthly (or bimonthly) payments, this must be stipulated in your mortgage. And beware that if you break your mortgage before the term is up, you’ll have to pay a penalty–usually three months’ interest for variable-rate mortgages, more for fixed-rate mortgages. (This doesn’t apply for open mortgages, which are mainly for homeowners who plan to sell within a few months.) Mortgage insurance is one of the extra costs to buying a home that can be easy to overlook. But if you are putting less than 20 per cent down, your lender will require that you purchase an insurance policy to protect them in case you don’t hold up your end of the deal. Calculated on a percentage of the total mortgage, your insurance premium will depend on how well qualified a borrower you are, and can amount to thousands of dollars. As Daniels observes in her book, for a $450,000 mortgage, even the most qualified borrower who gets the lowest rate (which she sets at 1.5 per cent) would be on the hook for an additional $6,750 in insurance. If you’re lucky, your family may offer to help with financing. But it’s important to understand how the contribution factors in. A family gift is considered a traditional source of down payment, which is ideal. It will increase the size of the mortgage you can get or allow you to pay for a greater proportion of your home up front. But if the family help is a loan, your down payment is considered to be non-traditional, which, if you’re putting down less than 20 per cent, will result in slightly higher insurance premiums. When your mortgage is up for renewal, it may be tempting to simply sign on the dotted line, and accept whatever package your lender offers you. However, not shopping around can cost you. “The bank relies on people just to sign the renewal agreement at posted rates. As soon as you do that, you’ve lost thousands of dollars by not negotiating,” advises Vancouver mortgage broker Alma Pasic. Don’t be surprised if you need a refresher course. “It’s like you’re doing it for the first time, because everything has changed,” she says. “It’s hard to keep up–even for us.” RACHEL MENDLESON Sidebar: Cost Cutter If you can live with the uncertainty, a variable-rate mortgage has historically saved home buyers money over a term of five years or more. A 2008 study led by Moshe Milevsky, a professor at York University’s Schulich School of Business, found that variable rates would have saved Canadian borrowers money on a five-year term more than 77 per cent of the time between 1950 and 2007, and chopped a year off the amortization period. By taking on a more predictable, fixed-rate mortgage, you are offloading risk to the lender, and that comes at a price. You might sleep easier, though. Excerpted from MoneySense Guide to Buying and Selling Your Home (Rogers Publishing Limited, $9.95). The book is available at bookstores and newsstands or online at http://moneysense.ca/myhouse May 25, 2011 OTTAWA – May 17th, 2011 – Statistics released today by The Canadian Real Estate Association (CREA), reveal that national resale housing activity softened in April when compared to March 2011. The decline in April sales activity reflects changes to mortgage regulations that came into effect previously. As anticipated, the changes pulled forward some sales activity that would have otherwise occurred at a later date. Seasonally adjusted national home sales activity was down 4.4 per cent in April 2011 compared to the previous month. As expected, declines were largest in some of Canada’s more expensive and active markets, including Toronto, Vancouver, and the Fraser Valley. Changes to mortgage regulations and other transitory factors also boosted transactions in April last year at the expense of activity in subsequent months. This also contributed to a broadly based decline in sales activity in April 2011 compared to year-ago levels. Actual (not seasonally adjusted) activity was down 14.7 per cent from levels reported last April. “Although down nationally, sales activity in April this year compared to April last year was up in a number of local housing markets,” said Gary Morse, CREA’s President. “Housing market trends often evolve and diverge from national trends due to local factors, so buyers and sellers should consult their local REALTOR® to understand how the housing market is shaping up where they live.” “Last April, several transitory factors artificially boosted sales.  This included the impending tightening of mortgage rules, speculation about higher interest rates and the looming introduction of the HST in some provinces.  This year, additional measures to tighten mortgage rules were implemented in March and the other transitory factors were absent,” said Gregory Klump, CREA’s Chief Economist. “This makes it difficult to compare the two months in order to reliably gauge the impact of the latest round of mortgage rule changes.” The number of newly listed homes edged up 1.3 per cent in April from the previous month on a seasonally adjusted basis, but remained well below levels in January and February, when impending changes to mortgage regulations were announced. With fewer sales and an increase in newly listed homes, the national housing market moved further into balanced territory in April. The national sales-to-new listings ratio, a measure of market balance, stood at 52.5 per cent in April, down from 55.7 in March. More than two-thirds of local markets in Canada were balanced in April. Almost half of the remainder could be classified as sellers’ markets based on a ratio of sales to new listings above 60 per cent. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at six months at the end of April on a national basis, up from 5.7 months in the previous month. The national average price for homes sold in April 2011 was $372,544, up eight per cent from the same month last year. April marked the third consecutive month in which the national average price was up by eight per cent from year-ago levels. The national average price has been skewed in recent months due to surging multi-million dollar property sales in selected areas of Greater Vancouver. Demand for these properties moderated in April from the previous month. A reduction in this source of upward skewing for the national average price was offset by fewer sales of lower priced properties. “Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers,” said Klump. “By contrast, higher end home sales in Greater Vancouver and Toronto had their best April ever.” May 24, 2011 Angie Mohr Investopedia.com Published Friday, May. 20, 2011 6:17AM EDT When purchasing a house, most buyers have to finance the majority of the purchase price with a mortgage. The amount of money you put down upfront determines the size of the mortgage. Knowing how much of a down payment to save up for can be a tough decision. The larger the down payment, the longer you'll have to wait to own a home. However, there are several benefits to waiting to purchase until you have a substantial down payment. 1. Reduced Mortgage Payments The more you put down on your home upfront, the smaller the monthly mortgage payments will be. That will help out with your monthly budget but, more importantly, you will save thousands of dollars of interest over the life of the mortgage. For example, on a 30-year mortgage at 5 per cent interest, putting an extra $10,000 into the down payment will save you a total of $9,325 in interest payments. (For more see, Choose Your Monthly Mortgage Payments.) 2. Lower Interest Rate Banks and other mortgage lenders often offer better interest rates when your loan-to-value ratio is lower. An increase in your down payment lowers the ratio and also lowers the risk to the lender. Lower interest rates can also save you significant amounts of money over the life of the mortgage. The interest savings from going from 6 per cent to 4.5 per cent on a $200,000 mortgage over five years is $66,863. 3. No Mortgage Insurance Fees A conventional mortgage usually requires a down payment of 20 per cent of the purchase price of the house. If you want to contribute a smaller down payment, lenders require that you take out mortgage insurance. This insurance protects the lender in case you become unable to pay your mortgage. Mortgage insurance can be expensive, up to 2.75 per cent of the house price. 4. Less Risk When Selling The real estate market can move up or down after you purchase your house. If the market is in a downswing and you have to sell your house, you may find that your mortgage balance is higher than the value of your home (known as being “upside down” on your mortgage). This situation gives you less flexibility in accepting offers and may make it difficult to sell your home and pay out your mortgage. If you made a substantial down payment when you bought your house, you are less likely to be upside down on the mortgage. 5. Ability to Ride out Financial Crises No one can ever predict with certainty what will happen in the future. You may encounter a personal financial crisis such as job loss or illness that can impair your ability to pay your bills, including your mortgage. If you have equity in your home due to making a large down payment, you can better weather a financial storm. The mortgage payment will be smaller and you may be able to borrow against the equity if you need to. If you borrowed the maximum possible based on two incomes, you leave yourself open for financial stress and perhaps even foreclosure. (For more, see Too Much Debt For A Mortgage?) The Bottom Line Taking the time to save up money to use as a down payment on your home is a solid investment. It can save you thousands of dollars over the course of the mortgage and can put you on more solid financial footing. May 20, 2011 By Kathryn Greenaway May 19, 2011 3:30 PM   The wife is pouring herself a cup of coffee. The husband is sitting at the kitchen table, reading the morning paper. As she sits, he lowers the paper, pauses, and drops the bomb. “I want a divorce.” Those four words have turned many people’s lives upside down. A marriage can often dissolve suddenly, after five, 15, 30 years. Whether or not the spouse saw it coming, divorce can be overwhelming, especially for women who have stayed at home to run the household or raise the children. They are afraid: What will happen to me? Where will I live? How will I pay the bills? Marilyn Rackover is no stranger to divorce. Her husband asked for one almost eight years ago after 37 years together. But at least hers had not been a nightmare. And soon, she found herself in new social circles. “I was single and suddenly I was meeting a lot of newly single women,” Rackover said. “They would chat about their divorce settlements and I would ask them questions. Inevitably, they would say ‘I wish I’d known you before we negotiated.’ ” It took Rackover a few years of living as a single woman to acknowledge she had something she could offer other women facing divorce. So she became a divorce coach. She helps people prepare for the first stage of the transition from being wedded to single. Her business is called The Divorce Coach, and her motto is “New beginning. Strong start.” Since she started coaching two years ago, all of Rackover’s clients have been women, but her service is open to both men and women. Rackover has a degree in psychology along with an extra helping of common sense. She is not a lawyer, a therapist or a mediator. She is a practical voice in the emotional maelstrom. Practical does not mean uncaring. Rackover does keep a box of tissues on her desk. “I give them a little emotional time. I’ve been there,” Rackover said. “I ask them if they are seeing a therapist and recommend that they do. “A lot of women never find out why the husband left. They berate themselves. It’s good to see a therapist, because you need all your strength. I’m there to take the emotion out of the equation. They have to sit down and think practically.” One woman, whom we’ll call Sandra since she is still in divorce negotiations, heard about Rackover through a friend. Sandra’s marriage had broken up after 41 years. “I was an emotional wreck,” Sandra said. “We had dinner. We talked. I cried. It was like that. I had been living a very sheltered life. (Marilyn) really set me straight.” Sandra had been a stay-at-home mom, an enthusiastic volunteer and did not have to work. She lived in a privileged world where money was not a problem. Anything to do with investments and bills she left to her husband. Rackover’s first order of business for wives: get familiar with the family finances. Each client is given a 12-page spread sheet listing dozens of possible living expenses. The more receipts, documents and answers the client can dig up the better her understanding will be of the real costs of her living situation. “I am constantly amazed at how little women know about the family finances,” Rackover said. “It blows me away.” Rackover said many women don’t have a clue what is included in the investment portfolio or how much the family pays in taxes. They don’t know how much the mortgage is or how much it costs to pay for utilities. And so the 12 pages cover everything from how much the rent or mortgage costs per month to how much has been saved in joint RRSPs to how much the dental insurance costs per month. How much debt is the couple carrying on the credit cards? What is spent every year on the family pet’s veterinarian visits? How much will it cost to replace the clunky dishwasher or pay for the children’s school pictures? Even the smallest expenses are included on the list. “You go out for lunch with a friend or buy a package of chewing gum,” Rackover said. “Most of us aren’t aware of how much we spend in a day. I ask my clients to keep a careful tab of daily expenses.” Sandra took Rackover’s advice to heart and did her homework. “I didn’t know where I was going. Because of that work, when I went to the lawyer, I was able to think more logically and not with my emotions. And because I was prepared, I spent less time with my lawyer.” The one fear Rackover’s clients share is losing the family home. “The woman wants the house,” she said. “I try to make them understand how much it costs to run a home. What if the roof needs to be replaced? Who is going to pay for it? Relocating is scary, but sometimes you just don’t have the choice. “I was at home for 25 years raising the children. After the divorce, it wasn’t the structure of the house that meant something to me, it was the possessions that came with me that represented my life. “After a divorce, your lifestyle changes. So you have to start training right from the beginning to start living differently. I tell my clients to create their own financial identity. Get their own credit card and build up their own credit rating.” Rackover’s clients range in age from mid-40s to 65. Many have never had their own credit card or even opened a bank account. “Women in the age range of mid-50s and up tend to know less about the family finances,” Rackover said. “Younger women tend to know more, if they are working, although (the finances) are not always discussed between spouses. These discussions should be an important aspect of any marriage.” Said Sandra: “I think the most important lesson Marilyn taught me was to stick to a budget. I’d never had to pay a bill. I was so protected. “I hadn’t worked all my married life and suddenly I had to find a full- time job. It took a long time and a lot of courage to do it all. “Am I sticking to the budget? I’m not in debt. Let’s put it that way. But I’ve learned to set priorities. I never had to do that before.” Not all divorces are civil and not all husbands will be forthcoming with financial details, but the more information a wife can gather, the better prepared she will be for negotiations and to move forward with her life. Rackover lets clients know what their rights are. Her ideal scenario is for everyone to have developed a “financial intimacy” before getting married — to understand and recognize what each other’s spending habits are and to discuss what the financial priorities of the relationship are. Unfortunately, that ideal scenario is not common practice. Along with meeting with clients, Rackover is developing a workshop for people who want to become more familiar with family finances. She is busy and she is happy. “I’m loving life now,” Rackover said. “I’m out there dancing. You have to allow yourself to do that. You do yourself a disservice not to move on.” © Copyright (c) The Ottawa Citizen May 19, 2011 Rachel Mendleson Special to Globe and Mail Update Published Wednesday, May. 18, 2011 6:15AM EDT Last updated Wednesday, May. 18, 2011 10:34AM EDT What can you afford? When Jennifer Ballard and Mike Tusche started hunting for their first home–a two-bedroom condominium in downtown Toronto–they knew that what they could afford would depend on more than just the listing price. Besides the down payment, the young couple was also expecting to shell out extra for condo fees and a parking space. What they weren’t anticipating were closing costs, which, at about 2 per cent of the final selling price, can easily exceed $10,000. “We were hoping to put that toward the down payment, but that’s now going to lawyers’ fees, city tax” and so on, says Ballard. “That really changes things.” For first-time home buyers and experienced homeowners alike, figuring out what you can afford is no simple task. That’s because there is no single answer, but rather many possible scenarios that depend on both your financial situation and the lifestyle you want. But by understanding the basic costs of buying and how all the hidden extras add up, you can get a realistic picture of your purchasing power before you start perusing the listings. As Ballard and Tusche discovered, when you buy a home, the purchase price is just the beginning of the costs you’ll incur. In most jurisdictions, buyers must pay a land transfer tax, which can amount to several thousand dollars. If you are buying a home that includes “chattels”–moveable personal property such as appliances–you may have to pay provincial sales tax on the value of those items. For those buying newly constructed homes, you’ll have to pay 5 per cent GST (though depending on the purchase price, you may be eligible for a rebate). Other one-time costs include legal and inspection fees. (Realtor commissions come out of the seller’s take.) In addition to a monthly mortgage payment, owning a home means you also have to shoulder various ongoing costs, including annual property taxes (rates vary by municipality), utilities and maintenance. When you buy a condo or townhouse, maintenance is included in monthly strata fees. If you buy a house, you have keep in mind that you will be responsible for any necessary fixes that crop up along the way. Though some repairs are fairly inexpensive, others can put a big dent in your bank account. “These are all the kinds of bills that you have to factor into the decision,” says Sarah Daniels, a Vancouver-area real estate agent and author of Welcome Home: Insider Secrets for Buying or Selling Your Property. By far the most significant upfront cost is the down payment. The minimum down payment you need to get an insured mortgage is 5 per cent of the purchase price, but if you can put 20 per cent or more down, you don’t need to be insured, and therefore won’t have to pay the premium. If you’re a new homeowner, your down payment will come from your savings and investments or, if you’re lucky, a family gift. Experienced buyers, meanwhile, can rely on the equity from their previous property. Unless you’ve got deep pockets, the budget for your first home will depend primarily on how much financial institutions are willing to lend you–and on what terms. The size of the mortgage for which you can get pre-approved is the maximum amount you can reasonably be expected to repay with interest over a set period of up to 30 years. According to Canadian Mortgage Trends editor Rob McLister, based on current interest rates, someone with an annual income of $50,000, who puts down 12.5 per cent and has about $25,000 in household debt could theoretically be approved for a $194,000 home and monthly mortgage payments of about $820. But estimates such as these, which you can come up with on your own by plugging a few numbers into one of many online mortgage calculators, are very general, and don’t account for crucial determinants like credit history. (For our purposes, McLister assumed a 3.94 per cent fixed rate for five years, property taxes of 1 per cent, $100 in monthly heating, no condo fees and a good credit score.) “There are an endless number of exceptions. That’s why it’s best to have a professional do it,” says McLister, who recommends consulting a mortgage broker or a bank’s mortgage specialist. Just because you are pre-approved for a certain amount doesn’t mean you should plan on spending it all, though. When a financial institution calculates the amount it’s willing to lend you, it does so based on what it thinks offers a comfortable ratio between income and expenses. But while lenders will let this number–called the debt service ratio–reach higher than 40 per cent, McLister says you might want to think about giving yourself an even bigger cushion. “You’ve got to ask yourself, ‘If something bad happens, do I really want to be in a 44 per cent total debt service ratio?” Another important consideration is that the interest rate you negotiate when you first buy your house isn’t set in stone. When your mortgage is up for renewal–typically after five years, though the length of the term varies–you may find that interest rates have increased substantially. That means that if you don’t leave yourself enough breathing room, you could wind up in a very tight spot. You don’t want to be forced to sell your home in a rising interest rate environment, when housing prices are trending down. As McLister sees it, “You have to take these things into account and project into the future, and determine the worst-case scenario.” As any mortgage broker will tell you, there are plenty of ways to play around with the numbers and secure financing for the home that you want. But no matter what the calculator says, you have to be honest with yourself. Beyond the incidental costs associated with owning and maintaining a home, don’t forget to think about your lifestyle, and how much you’re willing to sacrifice. While you may be able to technically afford the house of your dreams, will buying it mean that you can no longer go to the movies or take vacations? “You have to make sure that you can still live a normal life,” says Daniels. “Nobody wants to live in a great place but only be able to afford Kraft Dinner.” May 18, 2011 Canadian home sales edge down in April OTTAWA – May 17th, 2011 – Statistics released today by The Canadian Real Estate Association (CREA), reveal that national resale housing activity softened in April when compared to March 2011. The decline in April sales activity reflects changes to mortgage regulations that came into effect previously. As anticipated, the changes pulled forward some sales activity that would have otherwise occurred at a later date. Seasonally adjusted national home sales activity was down 4.4 per cent in April 2011 compared to the previous month. As expected, declines were largest in some of Canada’s more expensive and active markets, including Toronto, Vancouver, and the Fraser Valley. Changes to mortgage regulations and other transitory factors also boosted transactions in April last year at the expense of activity in subsequent months. This also contributed to a broadly based decline in sales activity in April 2011 compared to year-ago levels. Actual (not seasonally adjusted) activity was down 14.7 per cent from levels reported last April. “Although down nationally, sales activity in April this year compared to April last year was up in a number of local housing markets,” said Gary Morse, CREA’s President. “Housing market trends often evolve and diverge from national trends due to local factors, so buyers and sellers should consult their local REALTOR® to understand how the housing market is shaping up where they live.” “Last April, several transitory factors artificially boosted sales.  This included the impending tightening of mortgage rules, speculation about higher interest rates and the looming introduction of the HST in some provinces.  This year, additional measures to tighten mortgage rules were implemented in March and the other transitory factors were absent,” said Gregory Klump, CREA’s Chief Economist. “This makes it difficult to compare the two months in order to reliably gauge the impact of the latest round of mortgage rule changes.” The number of newly listed homes edged up 1.3 per cent in April from the previous month on a seasonally adjusted basis, but remained well below levels in January and February, when impending changes to mortgage regulations were announced. With fewer sales and an increase in newly listed homes, the national housing market moved further into balanced territory in April. The national sales-to-new listings ratio, a measure of market balance, stood at 52.5 per cent in April, down from 55.7 in March. More than two-thirds of local markets in Canada were balanced in April. Almost half of the remainder could be classified as sellers’ markets based on a ratio of sales to new listings above 60 per cent. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at six months at the end of April on a national basis, up from 5.7 months in the previous month. The national average price for homes sold in April 2011 was $372,544, up eight per cent from the same month last year. April marked the third consecutive month in which the national average price was up by eight per cent from year-ago levels. The national average price has been skewed in recent months due to surging multi-million dollar property sales in selected areas of Greater Vancouver. Demand for these properties moderated in April from the previous month. A reduction in this source of upward skewing for the national average price was offset by fewer sales of lower priced properties. “Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers,” said Klump. “By contrast, higher end home sales in Greater Vancouver and Toronto had their best April ever.”         PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations. May 17, 2011 Steve Ladurantaye Globe and Mail Update Published Tuesday, Apr. 26, 2011 3:50PM EDT Last updated Tuesday, Apr. 26, 2011 3:55PM EDT Anyone looking to buy a house in Canada this spring can now use a BlackBerry to search the Canadian Real Estate Association’s popular listings service – and to connect directly to a real estate agent anxious to close the sale. The trade association, which represents the country’s 100,000 agents and maintains the Multiple Listing Service, said Tuesday that the BlackBerry application allows users to take advantage of the smartphone’s ability to determine a user’s geographic location. It’s another way in which the association is trying to differentiate itself from a host of for-sale-by-owner companies that have aggressively entered the market this spring. Using the built-in GPS, the app can point users to nearby homes that are for sale, show new listings in a neighbourhood and direct users to nearby open houses. An iPhone version of the app was rolled out earlier this year, and has been downloaded 117,608 times. The app comes a few weeks after the association launched its annual spring ad campaign, which was geared toward consumers who may be considering selling their homes. In it, “The Old Lady Who Lives In A Shoe” explains how a licenced real estate agent helped her find the perfect home for her and all of her children. The ads and the apps come as the industry enters its critical spring market, a time when the majority of homes in Canada are usually bought and sold. This spring, however, the country's professional agents face new threats because of a deal with the federal Competition Bureau that has made it easier for homeowners to conduct their own sales. Previously, sellers needed to hire an agent to handle the whole sale process if they wanted a listing on the Multiple Listing Service, which is owned by CREA and is the main source of home sales in Canada. After the October settlement with the bureau, a seller can now have her house listed by an agent for a fee and then handle the rest of the sale herself. For-sale-by-owner companies have sprung up to offer assistance to home sellers who want to save money on fees. Sellers paid billions of dollars in commissions to agents last year. There were 447,010 sales on the MLS system in 2010, at an average price of $339,030. Commission rates tend to hover around 5 per cent, which implies nearly $9-billion in real estate commissions paid last year, though each agent is able to charge whatever she can command, and many consumers try to negotiate a lower rate. The most recent sales data from CREA was released on April 15, with home prices up 8.9 per cent from a year ago. However, most of that growth came from the hot Vancouver market. Without Vancouver, prices gained 4.3 per cent. Inventory could be a problem through the spring. Seasonally adjusted unsold inventory on the market stood at 5.6 months at the end of March on a national basis. That was unchanged from the previous month. About half of all local markets saw inventory shrink compared with the previous month. May 17, 2011 Garry Marr, Financial Post · May 14, 2011 | Last Updated: May 14, 2011 3:17 AM ET We are a cocky lot in Canada about our wealth with millionaires apparently abounding everywhere. Our confidence probably got another boost with a report from the Deloitte Center for Financial Services saying there were 1,745,000 households in Canada with more than $1-million in assets in 2011. Not bad, but should some of these people really think of themselves as millionaires when an inordinate amount of their wealth is concentrated in an asset they have little intention of selling? Even among the top 1% of millionaire Canadian households, the Deloitte study found 21% of their wealth was tied up in their home. The percentage isn't broken out but you have to wonder how much wealth the bottom 1% of Canadian millionaire households have tied up in their homes. If you listen to the naysayers in the Canadian housing industry, this wealth is fleeting -though they've been saying this for about two years and have missed a lot of price appreciation sitting on the sidelines. Still, you have to wonder how Canadians would be feeling about their wealth today if we had suffered the same fate as the Americans. A new report seems to indicate the worst may not be over for the U.S. housing industry, with real estate website Zillow.com saying 28.4% of households have negative equity -mortgages worth less than the value of a home. Prices in the U.S. peaked in June 2006 and on average are now down 29.5% from that high. Say the same thing had happened in Canada. How would that make you feel about your wealth? The Canadian Real Estate Association says it expects house prices to climb another 4% this year to an average of $352,500. But let's lay out a different scenario. You bought your home in 2006 when the average price of a home in Canada was $277,211. Now it's worth 29.5% less or $81,777. Add that figure together with the lost appreciation since 2006 and your average Canadian homeowner's net worth drops $157,066. I have a feeling a few millionaires would drop off the Deloitte list. "You are only a millionaire when you capture your equity and put your house up for sale," says Jim Murphy, chief executive of the Canadian Association of Accredited Mortgage Professionals (CAAMP). "Your home is the biggest part of your financial plan and a lot of people feel they have a lot of equity in their home." The latest statistics from CAAMP show Canadians have not been shy about drawing on their home wealth -with $26-billion in equity takeouts in the last year or about $30,000 per household. Not all of it is reckless spending with 36% of households using their equity for renovations and repair. But the survey also found another 19% are using their equity for debt consolidation and repayment, meaning they could be cov-ering up spending elsewhere. David Rosenberg, chief economist with Gluskin Sheff & Associates, says when he thinks of true millionaires, he tends just to consider their liquid assets. "Housing has an unusual split personality between being an investment but also being a consumption good," Mr. Rosenberg says. He says that feeling about being wealthy because of the value of your home is not unusual and people will spend based on that perception. "There is nothing that dominates consumer spending more than employment and income, but you can get into other layers that affect consumer spending and confidence and the wealth effect is pretty important," says Mr. Rosenberg, noting 20% of Canadians own stock but 70% own a home. "On the household balance sheet, the house is the bedrock. Seeing your house price go up, believing -true or not -that you are wealthier will trigger the subconscious decision to reduce your savings rate." Interestingly enough, the savings rate in Canada in 2011 is down to 3.51%, according to the Deloitte study. The U.S. savings rate climbed to 6.26%. Edmonton-based certified financial planner Al Nagy, of Investors Group, says he doesn't consider the value of a home as part of a retirement plan. "It's part of the net worth, but ultimately, the home is a roof over your head and typically it is not used as source of funding," Mr. Nagy says. "I still include the house when I calculate net worth because people really want to know what their tangible net worth is." It's one thing to know what your net worth is, but if it's tied up in your house and you don't ever plan to sell, even if the Canadian housing market doesn't fall apart, what's it worth to you? gmarr@nationalpost.com May 16, 2011 Matthew Cenzon Investopedia.com Published Friday, May. 13, 2011 7:04AM EDT You've finally decided it's time to start that big landscaping project for your home. You've got the dimensions of your yard, you know the local zoning rules, you've found your inspiration from various magazines and books, and now it's time to call a landscape professional to determine how much it's all going to cost. Here's a heads-up: it is going to hurt, a lot. The landscaping bill for materials and labour can be quite staggering, especially if you've allocated most for your income toward your mortgage and other home expenses. However, with a little bit of creativity, resourcefulness and ingenuity, you can maximize your home's curb appeal without spending a fortune. Set a Budget When setting a budget for your home landscaping, the general rule is to set aside 10 per cent of your home's value. That amount of money may be a little hard to come by for most people, so it's important to determine your overall costs. Talk to friends and neighbours to see how much they have spent on their landscaping. Decide what you can afford to scrimp and save on, and what you need to purchase no matter what the price is. You can also talk to professionals and ask for estimates to get an idea of how much you would need to spend to accomplish your goals. With all this information, you can determine a budget for your landscaping project. Make a Plan You know your budget for your landscaping project, now it's time to make a plan for how you're going to accomplish your goals without stretching that budget. Split your yard into sections, and prioritize which sections are the most important. Completing your landscaping project in phases will allow you to work at a pace that is suitable for your budgetary needs. Oftentimes, money is wasted on poorly planned landscaping projects and overextending resources. If your budget can barely meet the needs of building a covered patio, you should probably hold off on repaving the driveway until the patio has been completed. Plus, there is always the possibility of an unexpected expense occurring in the middle of a project. Having multiple, unfinished sections of your yard can leave your home looking like a disaster, and might pressure you into making poor decisions that will drastically affect your budget. A solid plan for your landscaping project will help you avoid costly mistakes. Reuse and Restore A quick scan of your yard tells you that your old garden furniture needs to go. Before you decide to throw out that decrepit picnic table or rusted set of lawn chairs, think of ways you can restore your furniture rather than replace it. Vibrant paint colors can bring new life to old garden furniture, and by using the same paint on your pots, doors and fences, you can create an entirely new look for your garden without having to spend money to replace anything. Refresh your old lawn chairs and patio sofas with new fabrics around the cushions, and cover an old patio table with a new tablecloth. Look for clearances at fabric sto