What Does Brexit Mean for Canada

What Does Brexit Mean for Canada?

The decision by British voters to leave the European Union (EU) has shocked markets and will no doubt lead to continued uncertainty for an extended period. Stock markets around the world are reeling, the British pound has taken an unprecedented nosedive, commodity prices with the exception of gold are plunging and interest rates are falling sharply. Central banks, particularly the Bank of England, are vowing to do whatever it takes to provide liquidity and stem financial chaos. Mark Carney, Governor of the Bank of England and a vocal opponent to Brexit, has assured markets that the Bank will be there as a lender of last resort to cushion the blow to financial institutions. Banks and insurance companies are hardest hit, but businesses worldwide that do business in the UK or in Europe are faced with disturbing questions that could take months or years to answer. Moreover, hedge funds and other investors around the world that have been caught on the wrong side of this trade are scrambling, which likely portends a sell off in risky assets for at least a couple of days. Even with all of this, investors should not panic sell this environment. It is a buying opportunity for longer term investors. At the same time, do not try to time markets. No one can pick the bottom and market timing never works. Canadians who have some dry powder should consider buying their favourite stocks as they are sideswiped by the British vote. Politically, the vote and the subsequent resignation of the British Prime Minister, David Cameron, is a vivid indication of the global move to nationalism, isolationism and xenophobia. Populist demagogues around the world are finding a welcoming audience as the top 1 percent who have benefited from globalization and free trade have failed to share the wealth. The broad middle class in all countries have been squeezed by forces that have pushed production to cheap-labour emerging economies or have replaced their jobs by technology. In all advanced economies, income growth has stagnated for all but the richest among us, which has led to a very nasty blame game. Scapegoating immigrants, minorities, free trade and the powers that be is evident from the US to France. Donald Trump, the most vivid example of such populist demagoguery, who happens to be in Scotland today, supported Brexit and has lauded the British people for taking their country back. Elites who make light of this growing sentiment do so at their own peril. It helps to explain the populist movement in the US election campaign on both the left (Bernie Sanders) and the right (Donald Trump). Mainline economists support free trade and globalization. But mounting income inequality creates a tinder keg that is ripe for exploitation. Promises of "bringing the jobs back" and "America (Britain) First" set fire to this furor and, as we have just seen, these forces can win at the peril of financial and economic losses. For now, the most immediate impact will be lower interest rates. Not only will the Bank of England and the European Central Bank ease further, so will central banks in Switzerland and Japan. The Fed, which was widely expected to hike interest rates once again in September, will likely remain on the sidelines. The Bank of Canada will wait and see what happens. The Canadian dollar is actually holding up quite well right now, although Canadian bank stocks are taking a hit, down just over 2 percent as of this writing. Only about 4 percent of Canadian trade is with Europe and only roughly 3 percent with Britain. Investors are fleeing to the safe haven of the US dollar, US Treasuries and, to some extent, Canadian assets are safe havens too. If anything, continued very low interest rates could further boost already hot Toronto and Vancouver housing markets. Bottom Line: while this is not good for our economy, the negative impact will be relatively muted. Nevertheless, financial turmoil and uncertainty will continue for some time, which is never good for confidence and therefore, risk-taking and spending.

Dr. Sherry Cooper Chief Economist, Dominion Lending Centres drcooper@dominionlending.ca

Rent vs Buy - First Time Buyer

Today I am showcasing Street Side Developments - Cy-Becker

Currently Stacey Diederich  has a quick possession home on sale for $306 000.00 w/ condo fee of $170.00/ month and property taxes at approx. $2068.00.

Robson floorplan - click this link to see the amazing floorplan!

YOU CAN OWN THIS HOME FOR $1342/MONTH... plus property tax and condo fees

You can rent this equivalent home in this same area for $ 1650.00 per month  - see the Condo listing

Should you rent or buy????

It looks like you should Buy!

Why? Each month you have $308.00 to spend on condo fees and property taxes - so the monthly expenses are about the same, but with one you are paying off your own mortgage instead of the landlords!!!!!!!

Or look at it this way - if you pay rent to your landlord for $1650 per month - at the end of 5 years you have $0.00 in your pocket.

If you buy at $1342.00 per month in five years your have an asset that was $306 000.00 purchase price and is now valued at approx $317648.00  based on annual Estimated appreciation rate of .75%.  In addition you will have an outstanding mortgage balance of $253741.38

You now have $63 906.62 in an asset over a 5 year term vs renting and having $0.00 left at the end of a five year term!

Call Amy Wilson today, to get the best rate and a quick mortgage pre approval - I can also set you up with a New home professional or if you are looking for a mature home - fantastic realtors!

How Mortgage Insurance Benefits You

HOW MORTGAGE INSURANCE BENEFITS YOU With a direct impact on your ability to purchase or refinance a home, mortgage insurance is one of the most cost-effective solutions for Canadian homebuyers. It allows borrowers to take advantage of more flexible financing options, including lower down payments. Each year, more Canadians are benefiting from the choices mortgage insurance offers, including: The ability to purchase a home without having to save for a 20 per cent down payment. A comprehensive product suite designed to meet your unique financial and homeownership needs. Greater flexibility through affordable premiums and lower down payment options. The ability to port or transfer your mortgage insurance from one home to another, anywhere in Canada. The opportunity to refinance and take advantage of available equity to effectively use funds to pay down debt or make sensible financial investments

Rent or Buy -

 I can show you how to save $60k in 5 years

 

 Example one:  I have outlined a rental property listing versus a new home listing below and a comparable on which way is better for you!

I have taken a current listing from Rent Edmonton  to show you the difference between renting versus buying your home.

Bedrooms: 3 | Bathrooms: 1.5 | Area: 0 Sq Feet | Rent: $1,595 per month
Your new home is waiting and ready for you to move in! This cute-as-a-button duplex is the perfect spot for you and your family to settle down! Located in the budding community of Silverberry in SE Edmonton, your new home really does have it all. On the main floor you will find your open concept living, kitchen and dining rooms with gorgeous laminate flooring throughout. A gas fireplace is the perfect place to cozy up to on those chilly winter nights. You will fall in love with your kitchen - all black appliance 

Monthly Payment for Rent - $1595.00 

OR

Renew - Contact Lorna Fraser or Curtis Frew with Daytona Homes

Renew by Daytona Homes - Approx. selling price starts at $300 000.00
3 bedroom, 2 1/2 bath
• Premium exterior siding
• Front attached garage with automatic opener
• Fully landscaped • Covered rear deck
• Open floor plan
• Pendant lighting in kitchen
• Hunter Douglas blinds
• Laminate flooring
• 9 ft. main floor ceiling
• 50 us. gallon electric hot water tank
• 4 piece black kitchen appliances
• Full tile backsplash in kitchen
• Maintenance free exteriors

Monthly payment for Mortgage - $ 1335.00

No down payment, no problem - I can help you get your down payment

You Should Buy!

It looks like you should Buy!

Why? Each month you have $260.00 to spend on condo fees or home maintenance or insurance or just put into savings.

Or look at it this way - if you pay rent to your landlord for $1595.00 per month - at the end of 5 years you have $0.00 in your pocket.

If you buy at $1335.00 per month in five years your have an asset that was $300 000.00 purchase price and is now valued at approx $311 420.00  based on Estimated appreciation rate of .75%.  In addition you will have an outstanding mortgage balance of $249 890.09.

You now have $61 529.91 in an asset over a 5 year term vs renting and having $0.00 left at the end of a five year term!

For new home information on the RENEW product contact either people listed below:

 

Lorna Fraser
Curtis Frew

Take the guess work out of Mortgage Paperwork

Paperwork your mortgage professional needs to finance your home purchase!

 

 

Salaried or full time hourly employee w/ no overtime

1. Letter of employment dated within the last 30 days on company letterhead, signed with a contact name and number.  You must include date of hire, wage and permanent position.

2. Most recent pay stub

3. 90 day banking his troy to verify your down payment - it can be a online baking statement but we require the name and account number.  ( any lump sum deposit over $1000.00 will need an explanation and paperwork to back it up)

4. Void cheque

5. Picture ID

Contractor, union, overtime income

1. all of the above and......

2. Last two years T-1 Generals ( Yes, all the pages, usually the accountant can send them direct)

3. Notice of Assessments from the last two years with prof of any amounts due paid in full

Self - Employed

 1.Proof of business ownership - Articles of incorporation or business license

2. in some cases - business financials from the last two years

Own additional property rental or second home

1. Copy of the mortgage statements for any properties owned

2. Copy of the property tax assessments for any properties owned.

Improve or maintain your Credit Score

  Credit scores are like report cards for grown‐ups.

The score you get ranges from 300 to 900. Your score indicates your creditworthiness to potential lenders, banks, landlords, insurance companies, and even to some employers. The higher your score the better.

1. Get a Copy of Your Credit Report

Make an inquiry once a year, twice is much better. If you are planning on purchasing anything that requires a credit check, keep track of your credit. This is something that is 100% in your control. As a consumer you have ability to make a soft/consumer inquiry to Equifax as many times as you want without it affecting your score. Here is a link to Equifax. If something doesn’t look right, contact the creditor immediately. Don’t wait to report an incorrect or fraudulent transaction. Is there an outstanding collection? If so, deal with it immediately, and by that I mean pay it. Then argue to get your money back. Do not leave this on your credit report hoping that it will disappear. No matter what, the collection will not be removed until it’s paid unless taken to litigation. Once dealt with, it will still take months to recover the points lost and 6 years to fall off your credit report.

2. NEVER Miss a Minimum Payment

Because this attributes to 35% of your overall score, delinquencies have the biggest negative effect on your credit score. If you have overdue bills, make the necessary arrangements with your creditors. They would much rather work with you than file collections against you. If you can’t pay it all back, it’s better to pay some.

3. Don’t Close Unused Credit Card Accounts

Got a credit card that you have had ten years and hardly use? Keep it. It takes 12 years of history with the same specific card in good standing to crack 800 and enter that top 2% tier of quality credit. Cancelling a card can actually lower your score. Keep the old cards and only use them occasionally so the issuer doesn’t stop reporting your information to the credit bureaus. Having a long credit history helps increase your score. Don’t jump around to credit providers. Most ‘large’ providers have several different products. There is likely one that will fit your needs.

4. Never Max Out Your Credit Cards

A good rule of thumb when considering building your credit is to keep the balance at or below 30% of the limit. Furthermore, a balance of 50% of the limit will maintain existing levels and over 75% will start to decrease it. NEVER exceed the limit, by even a $1.

5. Don’t Look For More Credit

Don’t shop around for credit or open several credit accounts in a short period of time. It raises alarms at credit bureaus and financial institutions, especially when you don’t have a long‐established credit history. Work with your existing creditors, as there is more relevant history. They are more likely to work with you, especially if you are looking to resolve some credit hardship(s). Always ensure you give your permission before allowing a credit check.

6. Rule of 2

Ideally, you want to have 2 sources of credit solely in your own name for a minimum of 2 years with at least a $2,500 credit limit. This would be either 2 credit cards or one credit card and a line of credit. Ensure this is in addition to any joint accounts. Joint credit is only reported to the primary credit holders credit bureau and will not have any positive effect on the co-account holder.
If you ever have questions about your financial situation or want to discuss your credit score, please contact Amy Wilson today.

Mortgage Options

Mortgage Options let you tailor the mortgage to fit your personal needs and circumstances. Open or closed mortgages, pre-payment options, fixed or variable rates or portable mortgages are just a few of the most commonly available options.


Open vs. Closed:

Open, describes the option to prepay without penalty allowing a borrower to make large lump sum payments or pay off the entire mortgage without incurring extra fees. This option generally comes with higher interest rates and shorter terms. This is a good option if you plan on selling your home soon, or need a short period of time to weigh your options before locking into a closed mortgage.

Closed, may set a limit on the amount or frequency at which lump sum payments are allowed. Should you choose to pay off your mortgage before the end of term you will most likely be charged a penalty. As such they are not a good option if you plan on moving in the near future. They do however involve fixed payments allowing a homeowner to adjust to a new budget that now includes regular mortgage payments. Also, terms are normally set for longer periods allowing for greater certainty when planning for the future.

Fixed vs. Variable vs. Adjustable:

Fixed, describes an interest rate which will not change over the term of the mortgage. This is a good option when interest rates are low and are expected to rise in the near future. It also gives a first time homeowner time to adjust to any change in budget that making mortgage payments may have caused.

Variable, means that the interest rate being charged is changing based on the interest rate set by the Bank of Canada. This rate fluctuates based on market conditions. Your payments will, with few exceptions, continue to stay the same however the amount you are paying will be distributed to the interest and principal in different amounts. If interest rates rise you will be paying off less of the original borrowed sum as more of your payment goes to interest. The opposite being true should interest rates drop. If you have a fair bit of flexibility in your budget this may be a good option as variable rates over the life of your mortgage often result in lower interest charged.

Adjustable, as with the variable option above, interest rates will change with market conditions however any change in interest rate will result in an increase or decrease in payment. This option should be considered with great care as an increase in rates could results in payments outside you budgetary limits. Amy Wilson, Your mortgage professional can help you decide which option is best for you by talking to you about current market conditions and expectations on future rate changes, as well as the risk you are willing to assume within your personal budget.

Portability:
Many lenders offer products which will allow you to carry your current mortgage to a new home should you decide to move. The options vary by lender so please consult Amy Wilson if this is something you may be planning in the near future.

Pre-payment:
Regardless of the type of loan (fixed/variable, term, amortization) most lenders will have guidelines that will allow you t o pre-pay a portion or percentage of your mortgage in advance of the end of the term. Such conditions often include an option to double up a payment or pay an extra 10-20% each year on the amount of principle borrowed. These conditions should be considered with care.

Mortgage Terms

One of the first steps in buying a new home is to take a realistic look at what you can afford and how you are going to pay for it. If you are like most people, you will probably have to finance your home purchase with a mortgage loan. What follows is an explanation of terms and options to understand when considering what mortgage is right for you.


What is a mortgage?
A mortgage is a loan that uses the home you buy as security. This loan is registered as a legal document against the title of your property. Here’s a quick overview of some of the most common aspects of a mortgage that you need to understand.

MORTGAGE TERMS
• Principal
• Interest
• Amortization period
• Term
• Maturity date
• Payment schedule

The principal is the amount of the loan, or the cash actually borrowed. The interest is the amount the lender Charges for the use of funds, or principal. Interest rates vary according to many factors, including terms and conditions of the mortgage as well as a borrower’s credit history. Mortgage payments are usually applied toward both principal and interest.

The amortization period is the actual number of years that it will take to repay the entire mortgage loan in full. This normally ranges from 15 to 25 years but can be extended in certain circumstances. A longer amortization period will result in lower payments but it will take that much longer to pay off your mortgage which in turn means you will pay more interest. You should select the shortest period you can afford.

The term is the length of time for which a mortgage agreement exists between you and your lender. Typically, terms range between six months and ten years. A longer term means you will keep the interest rate agreed upon for that longer length of time. Rates vary with the term and the difference in payments and interest costs can be calculated by your mortgage professional. Once your term is up you are able to reevaluate your financial situation and consider new term and amortization periods.

The maturity date marks the end of the term, when you can either repay the balance of the principal or renegotiate the mortgage at interest rates in effect at
that time. If you should choose to repay the balance or renegotiate the mortgage before this date, penalties may be charged.

Payment schedule is the frequency at which you will make your mortgage payments. These can occur monthly, semi-monthly (twice a month), biweekly (every other week), or weekly. Generally, more frequent payments can result in lower interest costs over the life of your mortgage.










Check back to my site on Thursday for information on some mortgage options:

Mortgage Down Payment Options - Edmonton, AB and area

 Mortgage Down Payment Options:

In Canada, thanks to the three mortgage insurers, CMHC, Genworth or Canada Guarantee you have the option to a high ratio or low down payment for a little as 5% of the purchase price of the home.

So if you have come to me and have been pre-approved to purchase a home for $400 000.00 you will need a min. down payment of 5% which is $20 000.00.  The home must be owner occupied to qualify for the minimum 5% down payment amount.  The 5% can come from a number of different resources:

1. RSP - you can use a RSP for your down payment - if you are a first time home buyer, you have access to the full RSP up to $25 000.00 tax free or if you have purchased a home before you can use your RSP less approx 35% that must be paid in tax on it (tax brackets range so ask your RSP provider how much money you will be taxed)

2. The money can come from your savings or cheqing account or a Tax Free Savings account - we will need to see a 90 day banking history to verify any lump sums in the account before we can confirm the funds can be used.

3. you can have the funds gifted from an immediate family member.  I will provide a gift letter for your family member to sign and get proof of the funds deposited into your account for verification.

4. Borrowed Down Payment or Flex Down - Subject to qualification rules -( call me, 780-919-0475,  if this is something you would like to qualify for) 

5.  Any number of scenarios can be accepted for your 5% down, 

contact Amy Wilson - Yourmortgagegirl, 

The same options also apply for a second home purchase, rental properties or vacation properties but the down payment rules change in most cases to being a minimum of 20% down - contact me to determine what down payment you will required to have for your next home purchase.

 

Newest bird house in my collection! A tiny blue bird is just peaking at me in this picture!

Inspiration

 This Quote was taken direct from Darren Hardy's Daily Mentoring that I have been following every morning.  He has some fantastic views and advice and I wanted to share one with you today.

"This isn’t a new phenomenon.
You’ve heard me multiple times stress that in order to achieve BIG SUCCESS…
you have to be willing to go for BIG FAILURES.
But are you really doing it?
Let me remind you…
Walt Disney was fired from the Kansas City Star because his editor felt he “lacked imagination and had no good ideas.”
Oprah Winfrey was publicly fired from her first television job as an anchor in Baltimore for getting “too emotionally invested in her stories.”
Steven Spielberg was rejected by the University of Southern California School of Cinematic Arts multiple times.
In one of Fred Astaire‘s first screen tests, an executive wrote: “Can’t sing. Can’t act. Slightly balding. Can dance a little.”
Vera Wang failed to make the 1968 US Olympic figure-skating team. Then she became an editor at Vogue, but was passed over for the editor-in-chief position.
Theodor Seuss Geisel, better known as Dr. Seuss, had his first book rejected by 27 different publishers.
R.H. Macy had a series of failed retail ventures throughout his early career before he finally launched Macy and Co., today known as Macy’s.
Each person above went on and grew to #BeTheException*
And so can you!"

To find more Darren Hardy - click here Darren Hardy

Draw and Completion Mortgages

If you are considering building a new home, then you need to be educated on the difference between construction draw and completion mortgages. When you meet with a builder, there is tons of terminology and information you should be aware of so you are properly covered.

Completion mortgage means that the builder does not expect any funds until you take possession of your new home. Before the building process begins, you will have to go to your mortgage professional to get your application verified for the build to start. The benefits of this option are that you don’t have to put down any payments before you take possession, you can add upgrades to the mortgage, and the lender doesn’t require all final information from you until 30 days before you take possession. During this build process you will want to take extra care of your finances to ensure nothing changes, which could put your initial approval in jeopardy. Any changes that could possibly change your financial position and your credit should be discussed with your mortgage professional. This can include things like switching jobs, buying a car, and taking out any new loan.

A construction draw mortgage is preferred by home builders because it allows them to receive portions of funds during predetermined stages of the build process. To obtain a draw mortgage, the beginning process is the same and you will have to go to your lender to be verified for the build to begin. The benefits of this option are that the builder is able to manage their cash flow, inspectors are sent to verify stages of development are met, and funds sent to the builder are handled through a lawyer. There are some extra costs associated with this option though. Inspections will incur a cost upon each stage met and interest payments may be incurred as well. You also do not have the option to add upgrades throughout the build process with a draw mortgage as the first advance sets the loan in stone.
As always, if you would like to discuss draw and completion mortgages in preparation for your new build contact  Amy Wilson at Brokers For Life Inc. Dominion Lending Centres! We are happy to help you figure out your financial future.


Thanks,
Amy Wilson
780-919-0475