Finance – Ten Reason’s to talk to a Mortgage Broker, #1 of 10

A home is the biggest purchase most of us will ever make. And a mortgage can be a powerful financial tool. No suprise, then, that a growing number of Canadians have started to ask some smart questions about their mortgage. In fact, more than 30% of all Canadian mortgages are now arranged through mortgage brokers. Why? here is #1 of 10 great reasons:

Choice

A broker has access to mortgages from a huge range of lenders – so their clients have by far the best choice of rates and mortgage options. With partnerships in a vast network of over 50 lending institutions, including banks, credit unions, trusts, national and regional lenders, and non-traditional lenders, your broker can help design the perfect mortgage for you.

When looking for a home do your homework don’t always settle for the 1st Mortgage available to you….

 

 Catherine Wong-Bourbeau PFP  

 

Source… Mortgage Architects, Rob Paterson

Finance – Interest Rates

Interest Rates

The “Fed” has held back again, but how much longer can they postpone the inevitable? Rates must rise to quell inflation. Was the the lesson of the early 70’s not learned when inflation was rampant during the last oil crisis? Well, I remember the last real inflationary cycle, and interest rates rose to heights never seen before just imagine re-negotiating your mortgage for say 18 percent! Well this was not that long ago…

These are not the 70’s and this Oil shock has been compounded by the additional headache of the Sub Prime lending issue that is going to perpetuate throughout the economy for sometime to come. Regardless of what we are told, this cycle could last for 5 years like the term on a mortgage. It all depends on how long the financial companies were lending to not so “credit worthy” clients and then repackaging these same mortgages for sale on the stock market. When did this cycle stop?

Anyways, the real reason the fed did not increase rates is because they are hamstrung by the local economy. Wouldn’t they look great by raising rates and exposing more homeowners to the loss of thier homes.

One must wonder how are the foreign investors who are holding American bonds are feeling about the rate issue. Rates are going to rise as Inflation will have to be tamed. Investors holding these bonds will have to be satisfied or they will go elsewhere and attracting new investors will become increasingly difficult with lower rates.

The real crisis is coming when rates rise as there will be a huge impact and not just on homeowners. When rates rise, the financial companies who started this mess will feel the brunt with lower stock prices and larger write downs, all while holding a large real estate portfolio of properties that presently are not selling.

My personal opinion is: rates will rise, and this will impact the economy. The government will have to involve itself more to avoid a catastrophe as most of our society are now overextended, and the increase in rates will be felt by all. Our cycle or culture of spend has now just about come to an end, with the greying of the population savings is now more important.

A correction is needed just like the early 80’s after a steep rise in interest rates and a taming of inflation our society was positioned for an extended growth period. The growth period this time will be much less than before, as the generations after the baby boom have been smaller and therefore, will have less spending impact on the economy.

Source…….Rob Paterson

Neighbourhoods – Understanding Market Timing

Understanding Market Timing

Timing in Real Estate is very important when is the best time to enter the market?

If you are selling a home remember the Real Estate market does not have seasons unlike what many believe. When you have made up your mind and know the date you wish to move by your home should realistically be put on the market 90-120 days prior to that move date.  

If you wish to move by spring you should list your home early in the new year. There are benefits to this as your home will have less competition due to most homes being listed in late spring. 

If you are buying a home the same rule holds true 90-120 days, a January 1 purchase willl have you moved in by (spring) April/May. Purchase your home by May and your children are set for school in September and so it goes remember use a 3-4 month rule or 90-120days this is usually the negotiated time period for closing.

Source…. Rob Paterson

Ask the Agent – When should i lower my Listing Price

Lowering the asking price for your home is an issue that is hard to deal with as a homeowner. If there has been no one through to see your property then you will have to ask yourself a few questions

1. Is my home priced at Market Value
2. Why are no prospects coming through  
3. Is my home being marketed properly

A Realtor should be able to answer all of these questions and give you suggestions that may improve the previous results, 

A reduction in your home price is really the last thing you should do unless it was priced above market  value! 

Source….. Rob Paterson

Ask The Agent – Market Correction

Market Correction

With this correction house price increase will stabilize and rise closer to the rate of inflation.

Multiple bidding on a house will become rarer, the market will transition itself from a Seller’s Market into a Buyer’s Market

In a Buyer’s Market the supply of homes exceeds the demand for homes. Characteristics of a buyers market are longer durations a home will remain on the market unsold and a larger inventory of homes for sales compared to buyer’s looking to purchase.

in a Seller’s Market, the number of buyers wanting homes exceeds the supply of homes. This type of market is characterized by homes that sell quickly rising prices and less inventory of homes available for sale.   

Let’s face it in Toronto it was a nice run what 7-10 years of rising prices. Well this will continue although with more moderate increase in price the double digit increase are gone for now…..

Source…. Rob Paterson 

Do you have a question you would like answered contact me Robert-Paterson@coldwellBanker.ca 

Green – Cutting Back Hydro Use = Dollar Savings

Hydro Use

Cutting back on your electricity can be easier than you think just look around your house and see where you can unplug a lamp VCR or other electrical devices that you no longer use. These appliances still use a constant flow of electricity even though they are not turned on this hydro adds up over time.

If you have a pool use a timer for you filter instead of having it run all night program it to come on early morning and shut off mid evening. The pool will not be any dirtier for this although a considerable amount of money and electricity will be saved over the summer.

Hydro Saving Tips

Source…… Rob Paterson, Toronto Hydro

Neighbourhood – Picking the Area Before Buying

 Getting to know your Area

Before you buy, May i suggest that you walk through the neighbourhood you are considering on the weekend and in the evening when everyone is home this will give you a better feel for the area. What could be more important than finding out about the area you are about to make the biggest investment of your life in.

 If you can get to know some of the neighbours ask them about the area and how it has changed over the years. Remember  these people have the best knowledge of the area better than any realtor after all they live there.

 What to look for in any area

1. Proximity to school’s/recreation centre’s
2. Shopping and Parks
3. Places of Worship and Transit

Once you have found your area and are considering a move if you have no Realtor feel free to contact me  Robert-Paterson@ColdwellBanker.ca for any realty service that you may require.

Source…. Rob Paterson

 

Ask The Agent – Staging Companies should i ?

Staging companies

There are benefits to using this kind of service especially if your home is empty  or requires a more modern look to enhance its sales appeal.

I would interview a couple of these companies and see if there service would suit your needs. Ask for recommendations and question there price scale in the event your home does not sell.

Homes that have used this service generally sell for more than homes that are empty….

Staging company  Staging company

Source…. Rob Paterson

Finance – Interest Rates

The bank of Canada did what most analysts expected and that was hold the line on rate reductions. This could well be the end of low rates as we currently know them. The Central rates are certainly poised to rise as inflation is rearing its ugly head as seen in the prices of commodities.

The rate today currently stands at 3% . Will this move by the Bank of Canada be what the finanacial companies in Canada are looking for to raise the rates charged on loans to offset some of the losses due to the subprime fiasco south of the border? Lets hope not as our savings are slim and a slight increase could push those over leveraged into bankruptcy. 

Source…. Bank of Canada, Rob Paterson 

Neighbourhoods – Oil Price and Real Estate

Oil Price & Real Estate

With oil prices at a premium how does this impact your real estate?

Well this all depends on location. In the next few years there will certainly be a migration back to the cities and an accompanying rise in prices, as i write people are thinking and doing.

It’s anyones guess as to how much the regions surrounding the cities will be impacted. The farther you are from a major centre the more the impact.

My personal opinion is oil will have to reach $200.00 a barrel before there is a noticeable impact. Can you imagine $2.00 a litre?

Source… Rob Paterson