Check out my November news letter for all your latest market/rate updates!

2012-11-13 | 14:00:54

November 2012
 
Scott Gingles
Phone: (604) 999 2864
Fax: (888) 212 5402
scott@themortgagehub.ca
www.scottgingles.ca


 
DID YOU KNOW...

Ottawa is stepping in with new rules for the largely unregulated prepaid credit card market. Finance Minister Jim Flaherty announced late last month that in the future, issuers of prepaid cards will not be able to impose expiry dates, and must be upfront about hidden fees and conditions. The move is part of the government’s expanding code of conduct measures to govern credit and debit transactions that had previously not applied to the relatively new prepaid market. Click here to read more from The Star.

HOMEOWNER TIPS

Reduce Heating Costs:

Your furnace or boiler is a large energy user. Consider:

- If health permits, keeping your thermostat at 20°C or below

- Lowering your thermostat at night and when no one’s home

- Checking the furnace filter once a month during the heating season (change or clean when dirty)

- Having a professional tune-up of your heating system at least every other year

- Replacing your older furnace with a higher efficiency model

About DLC Leasing Inc

* DLC Leasing is the leasing division within Dominion Lending Centres Inc.

* Our leasing programs provide up to 100% financing on business-related equipment.

* Leasing options include new equipment leasing; used equipment and vehicle leasing; customized solutions through vendor finance programs; and lease-backs –where the lender buys equipment from a business owner and the owner leases it back.

* Technology, heavy equipment and trailers, furniture and hospitality equipment, and manufacturing and industrial equipment are just a few examples of available leasing options.

* With access to multiple lending sources, Dominion Lending Centres’ Lease Professionals can cater to leasing deals for a variety of credit scenarios ranging from A to C credit quality.

* Because many of our Lease Professionals are also licensed mortgage agents, we can offer standard equipment leases and creatively structured solutions for seasonal, new or growing companies.

* Working with someone who is both a lease and mortgage expert enables you to even use commercial and residential mortgage and property credit line products, alone or in combination with lease financing, to help achieve the best solutions for your equipment acquisition needs.

* Our Lease Professionals can even break up large-dollar transactions into multiple leases across a number of funders to ease and simplify the approval process.

 

 
Welcome to the November issue of my monthly newsletter!

The 2012 US Presidential Election is in the books, and many Canadians want to know how Barrack Obama’s re-election will affect us at home. There are a few key issues facing the President in the immediate future that have potential spillover effects to Canada. They are:

  1. The “Fiscal Cliff”: with the White House (Democrat) and Congress (Republican) divided, a plan to cap Government spending and control the US deficit was put into place in August 2011. This plan expires December 31st, 2012. What it means is that unless Congress and Obama’s administration can strike a new agreement, US businesses and consumers will be hit with tax increases and a reduction in Government spending simultaneously which will hurt their economy’s gathering momentum (and ours).

  2. The Keystone XL Pipeline: Proposed in 2008, the project has been put on hold while environmental concerns were to be addressed, the pipeline now has a new route and will remain a central issue in Canada-US economic relations.

  3. The US Economy: Whether we like it or not, we are inextricably tied with the US as neighbor’s and trading partners. A strong US economy benefits Canada. Many hope that a second term will force the Republican controlled House and the Democratic White House to seek more compromise on issues to help spur on the US Economy.

 

MARKET SUMMARY

  • While CMHC is reporting a definite softening in the Canadian housing market (led primarily by Vancouver and Toronto), CIBC Economist Benjamin Tal reports that any fear of an American style housing crash reflects a deep misunderstanding of credit landscapes between Canada and the pre-crash environment in the US.

  • Canadian Businesses are still holding on to cash reserves with a “wait and see” attitude pending the resolution of the US “Fiscal Cliff” issue. A positive resolution there could spur business investment providing some stimulus to both economies.

  • The Bank of Canada held rates steady for the 25th consecutive month and revised its growth projection for Canada upwards to 2.2% (from 2.1%). The economy is still being held back by flagging demand of our Exports from Europe and China. Foreign demand is pegged to reach pre-recession levels by early 2014.

  • The OECD has some good news for Canadians: our country is being viewed among the world’s leading economic lights over the next 50 years. 

There are a couple new lending guidelines to report effective November 1st:

  • Low ratio mortgages are now qualified at the BOC Benchmark Rate (5.24% today) for terms less than 5 years. "Conventional" mortgages were previously qualified at the 3 year rate. 

  • No longer will cash-back from lenders be eligible to be used for down payment and some lenders will no longer accept any form of borrowed down payment.


Now more than ever, securing a mortgage can be an overwhelming experience. Without the help and guidance of a qualified individual, the process can involve hours of research and education before you make the largest financial decision of your life.  Using a mortgage broker will save you two of your most valuable resources: Time and money. 

With the market conditions softening and mortgage products tightening, it may be your last chance to access record low rates and consolidate your high interest unsecured debt. Call on me today to discuss any one of the incredible savings opportunities listed below:

 
RATE SUMMARY
*rates subject to change without notice
 
 
5 year variable 2.65% (Prime-.35%)
2 year fixed   2.69%
5 year fixed 2.99%
10 year fixed 3.89% 
 
 
Visit www.scottgingles.ca to get started on an application today!
 
The remainder of this month’s edition compares collateral and standard charge mortgages, as well as offers some handy maintenance tips for the fall and winter seasons. Please let me know if you have any questions or feedback regarding anything outlined below.
 
  

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Thanks again for your continued support and referrals!

 

 

Since an increasing number of lenders are moving towards collateral charge mortgages these days, it has never been more important to understand the differences between a collateral and standard charge mortgage.

The primary difference is that a collateral charge mortgage registers the mortgage for more money than you require at closing. For instance, up to 125% of the value of the home at closing with TD Canada Trust or 100% through ING Direct and many credit unions, instead of the amount you need to close your transaction (as is the case with a standard charge mortgage).

The major downside to a collateral mortgage becomes evident at your mortgage renewal date. For borrowers who want to keep their options open at maturity and have negotiating power with their lender, this isn’t the best product feature because collateral charge mortgages are difficult to transfer from one lender to another.

In other words, if you want to change lenders in order to seek a better product or rate in the future, you have to start from the beginning and pay new legal fees, which range from $500 to $1,000. With a standard charge mortgage, in most cases, the new lender will cover the charges under a “straight switch” in order to earn your business.

 

In addition, with a collateral charge, it could be difficult to obtain a second mortgage or a home equity line of credit (HELOC) unless your home significantly appreciates in value.

Lenders offering collateral charge mortgages promote the benefit that it makes it easier and more cost effective to tap into your equity for such things as debt consolidation, renovations or property investment. There’s no need to visit a lawyer and pay legal fees – the money is available as your mortgage is paid down. Yet, if you read the fine print, you may still have to re-qualify at renewal.

A standard charge mortgage gives you the ability to move to another lender at renewal should you want to without incurring legal fees, and many borrowers find it more beneficial to keep their options open. If you need to borrow more with a standard charge mortgage, you have the option of a second mortgage or a HELOC, which also enables you to take money out as your mortgage is paid down.

Navigating through the mortgage process alone can be tricky. Working with a mortgage professional who has access to multiple lenders will help ensure you receive the product and rate catered to your specific needs.

As always, if you have any questions about the information above or your mortgage in general, I’m here to help!

 

Fall is the perfect time to get your home ready for the coming winter, which can be the most gruelling season for your home. During winter months, it’s important to follow routine maintenance procedures, by checking your home carefully for any problems that may arise and taking corrective action as soon as possible.

Fall

  • Check fireplace and chimney; service or clean if needed
  • Clean range hood filter
  • Clean leaves out of eavestroughs
  • Check roofing and flashing for signs of wear or damage
  • Close outside hose connection
  • Close windows, skylights
  • Check weather-stripping around doors and windows
  • Clean and reactivate heat recovery ventilator, if it was turned off
  • Winterize landscaping
  • Test space heating system
  • Close vents to crawl spaces
  • Test your smoke alarms; change the batteries at least once a year

Winter

  • Clean or replace furnace filter
  • Check/clean heat recovery ventilator; wash or replace filter
  • Clean humidifier and turn it on if needed
 
  • Check exhaust fans
  • Ensure that air intake, exhausts and meters are clear of snow
  • Clean range hood filter
  • Check basement floor drain
  • Do safety checks: fire escape routes; fire extinguishers; door and window locks
  • Ensure gas valve is clear of ice and snow

Annually

  • Dust or vacuum electric baseboards
  • Vacuum ducts behind warm air and return air grilles
  • Test plumbing shut-off valves to ensure they’re working
  • Test pressure relief valve on hot water tank; drain water from tank
  • Check and, if needed, oil door hinges
  • Lubricate garage door motor, chain, etc
  • Check attic for signs of moisture in summer or fall
  • Check septic system; clean if needed (usually about every three years)

Every Two to Five Years

  • Check and repair driveway cracks
  • Check and repair the chimney cap and the caulking between the cap and chimney, re-caulk as necessary
  • Refinish wood surfaces, including window frames and doors

For other great home maintenance tips, visit:www.cmhc.ca.

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  • We have more than 2,000 Mortgage Professionals from more than 350 locations across the country!
  • Our Mortgage Professionals are Experts in their field and many are ranked among the best nationally.
  • We work for you, not the lenders, so your best interests will always be our number one priority.
  • We have more than 100 mortgage programs, making it easy to choose the best fit for your unique situation.
  • We close loans in all 10 provinces and 3 territories.
  • We can process your mortgage in as few as 7 days.
  • We are the preferred mortgage lender for several of Canada’s top companies.
  • Dominion Lending Centres’ Mortgage Professionals are available anytime, anywhere, evenings and weekends – and we’ll even come to you!