Friday, July 29, 2011

Possible No Rate Hike In Fall

Canadian GDP was weaker than forecast in May leading some to believe that the Bank of Canada may not touch interest rates until next spring, a far cry from the predictions of early rate increases that were floating around until fairly recently.

Now I know of 2 jobs where you can be wrong 80% of the time and not get fired! Weather person and Economists!

Thursday, July 28, 2011

How To Improve Credit Scores

1)Order a copy of the credit report, review it carefully and correct any significant errors.
2)Pay bills on time.
3)If there is a questionable credit history, they could open a few new accounts and use them responsibly, paying them off on time.
4)Avoid opening accounts without intention of using them. Having five or six of the same credit card type (e.g., Visa), is not favourable.
5)Having a credit card or instalment loan can help boost a credit score, as long as the balance is not too high.
6)Keep balance low in relation to available credit. If the credit limit is $10,000, keeping the balance below $2,500 (or 25 per cent of the limit) will improve the score. Balances of more than $7,500 (or 75 per cent of the limit) will decrease the score. Going over the limit has an even more negative effect.
7)Pay off credit card debt instead of moving it around to lower rate cards. Moving balances to other credit cards (i.e., “balance transfer”) and closing an old account can hurt the score.

Thursday, July 21, 2011

Bang for your reno buck

Canadians wisely focus on kitchens and baths
Adding a new kitchen or installing a fancy bathroom tops the list of Canadians' planned renovations, and they're also likely to be the most profitable projects, according to a new report.
Canadians are expected to spend more than $45 billion on doing up their homes in 2011, up slightly from $44.6 billion in 2010, according to BMO Economics.
The vast majority of that money will be put to jobs inside the house, with 48% saying it will go to a new kitchen and 46% planning to upgrade their bathrooms, the BMO poll found.
"If you're undergoing a renovation in order to increase the value of your home, it's important to understand that not all projects will deliver the same return on your investment," said Katie Archdekin, head of mortgage products, BMO Bank of Montreal.
Bathroom and kitchen upgrades are the most profitable of home renos, according to the Appraisal Institute of Canada. Property owners can recoup between 75% and 100% of the cost upon resale, compared with 50% to 100% for a paint job and just zero to 25% for additions such as a swimming pool.
Canada's property market continues to march ahead despite warnings prices may have peaked and may even be set for a fall. The average house price rose 8.6% in May from the same month last year, according to a recent report by real estate giant Royal LePage.
The BMO poll also found that Canadians may be heeding official warnings on debt and not borrowing to upgrade their homes.
About 57% of poll respondents said they preferred to rely on savings to pay for their upgrades, compared with 19% who said they would take out a loan. Only 5% said they would use a credit card, which tends to be the most expensive form of borrowing.
Other popular home improvements include landscaping, with 39% of homeowners saying they planned changes to the outside of their homes. Thirty-eight percent planned to improve their basements, while 25% are turning their attention to the bedroom.
The least popular home reno projects included installing a swimming pool and adding an extension, the poll found.
The survey was conducted by Leger Marketing using its online panel, LegerWeb, with a sample of 1,508 Canadian homeowners 25-45 years old.

sharon singelton - source: BMO

Tuesday, July 19, 2011

Bank Of Canada Announcement - Rates to Hold, for Now

Although this is something Canadians are getting very familiar with, there is a distinctly different flavour with Mark Carney’s latest decision this morning to hold rates again- for the seventh consecutive time.

In a press release this morning, they said: “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.”While this is not entirely unexpected, it is somewhat of a surprise as well- as there was wildly varying predictions this time around as to what direction rates were going to go- if any.
The real difference with this rate hold is that Carney is giving indication that while rates are steady today,their run near the bottom is nearly over.

Many expected rates to stay put, including many economists and several of the major banks, because of global financial unrest, and also because of rising inflation and consumer prices.

However, there are many indications that the economy is doing very well, including the recent release of jobs data- that would suggest that the ability to sustain a rate hike is emerging, if not already established.
This time around though, Carney pointed to global threats and weaker exports as the main drivers for reasons to hold rates, as well as rising consumer prices:

“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.”

“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.”

Carney too, gave indications today that there is expectation of increases in corporate and household spending, and that net exports are set to increase as well. Similarly, although they recognize the threat of a debt crisis in Europe, they believe that it is generally well contained.

 These are all factors suggesting that a rate hike should not be far around the corner- perhaps as soon early this fall.

As Leslie Penney, Vice President - Business Development, APlus Mortgage Group/Mortgage Alliance told, despite the varying predictions, the outcome is not overly surprising:"It didn't come to much of a surprise that Carney held the overnight rate at 1%. There is just too much concern over the sovereign debt crisis in Europe and the current issue in the United States regarding the country's debt ceiling and whether or not the country will default on its debt. With only two weeks left until the deadline, the US is close to defaulting, which could possibly spiral the global economy into another crisis. Chances of this happening are slim, but it's a hot topic right now. With all of this, it's no surprise Carney stood on the sidelines this time around."

"If it's not the last meeting that Carney holds rates, it's close to it. The key takeaway is that Carney signaled that any government stimulus 'will' be withdrawn, rather than 'eventually' withdrawn. That means he's close to pulling the plug. We are looking at growth and employment numbers for the second half of the year and if it remains strong, we may see rates move before year end."

Buying a cottage and keeping the peace

Joint ownership can work… if you prep beforehand
As summer approaches thoughts start turning to lapping waves, crackling campfires and tranquil forests. It’s the time of year when cottage, cabin or beach house fever starts to take hold.  
But the sunny dream of owning a vacation home may be dampened by the reality of property prices in many of Canada’s popular vacation destinations, plus the usual homeownership expenses such as a mortgage, utilities, and taxes.  Sharing these costs, along with joint ownership, can be ways for families or friends to buy a place that still feels like their own.
However, before making the leap into co-ownership of a vacation property, buyers must be sure that they really understand the ins-and-outs of sharing a vacation property.
“Before deciding to split the purchase with relatives or friends, having the right mix of personalities is key to a long-lasting arrangement,” cautions Victor Peca, mortgage professional with Mortgage Intelligence in Maple.  “You and the other owners will have to decide jointly on everything, from when maintenance or urgent repairs need to get done, to shopping for common supplies.”
Peca suggests considering the following questions as a group before moving forward:
Does owning a vacation property fit your lifestyle? In addition to the fun and leisure aspects of a vacation home it is important to factor in the time and cost involved in year-round upkeep. How will the property be used? If your dream is to own a ready-to-live-in relaxing hideaway while your co-owners dream of a northern DIY project, you may not see eye-to-eye when it comes to how you will be spending your weekends.
It’s important to think carefully about how much time you and your co-owners plan to spend at the vacation property. Will you be vacationing as a group, or do you want to trade off on weekends? Will one use the property more than the other? Will it be a 50/50 split?
Have you thought about what’s involved before you put it up for rent? While most Canadians buy a second home for recreational use, growing numbers are also buying for investment purposes. Determine in advance how you will split, and claim, the rental income. In the case of a vacation property that you intend to rent out most of the time, the lender may deduct the rental income from your total monthly debt payments when qualifying you for a mortgage. It is important to be aware that not all lenders will take rental income into account – a mortgage broker can advise you on this.
Can you afford the financing?While it certainly helps to go in with a co-purchaser, you want to be sure that your waterfront property isn’t putting you underwater. Seek independent advice on what size of mortgage you can reasonably handle – a mortgage broker can arrange a mortgage pre-approval, which will give you a clear price range. 
“The bottom line is that emotion shouldn’t trump common sense when it comes to buying vacation property,” Peca suggests.  “Buyers need to do their mortgage homework, and the advice of a mortgage broker can help them get the most for their vacation home dollar.”

Thursday, July 14, 2011

More Rate Reductions?

More rate reductions take effect today as the Canadian bond market is coming back for us while Europe struggles and the US government plays politics with their debt ceiling.

Gold has been up recently on currency concerns as Ben Bernanke is hinting that the US Fed may start printing money again if the economy remains slow. Some analysts fear a rating downgrade of US debt if their budget impasse is not resolved and investors in Asia sold stocks overnight on concerns about...all of the above I guess. As if that isn't enough.

Enjoy your Thursday.

Exciting News


Victor Peca – A New Member of the
Mortgage Intelligence Team

Hello Everyone,

I hope this letter finds you all well. 

I am pleased to announce that my team and I have joined Mortgage Intelligence. By partnering with MI, part of Canada’s largest independent mortgage brokerage firm, we are able to offer you a wider range of mortgage options, along with extremely competitive rates.  With this new endeavour, I will build on my 17 years of experience in the financial services industry.  My commitment to offering my clients outstanding service remains the same. 

I appreciate your past business and look forward to an ongoing relationship in the future. Whether you are looking to consolidate consumer debt (credit cards, department store cards, car loans, etc.), renew your mortgage, set up a secured line of credit, or wish to make some long-awaited home renovations, don’t hesitate to give me a call to learn about all your mortgage options. 

Please call me anytime, I would enjoy hearing from you just to say “Hi!” and I look forward to assisting you in the future - should you have any family or friends who are looking for a new mortgage or are thinking about renewing or refinancing a mortgage,I will gladly extend them a warm welcome!

Best Regards,

Wednesday, July 13, 2011

Strategy Even More Important....
July 12, 2011
By: Heather Wright

Despite their best intentions, Canadians are finding the cost of living their lives day to day often interfere with the widely popular goal of becoming mortgage free faster.
“When it comes to putting your mortgage on the fast track a little can go a long way,” says Victor Peca, mortgage broker with Mortgage Intelligence in Mississauga. “But while Canadians have good intentions about hitting the accelerator on the steady race to lower their mortgage balance, they may also need a bit of guidance on how best to reach the finish line.”
The best way to bridge the gap between intention and action, is to map out and include a strategy as Karen Blomquist, Mortgage Broker, Mortgage Intelligence told “If you don’t set things up initially, they generally won’t happen.  I always recommend to my clients bi-weekly payments, if they are able. This works much better than just hoping!”
“Also, I recommend for them to set up a separate bank account, to have automatic savings deposited into.  I also recommend that they try to use these funds to put down on their mortgage each year.”
In this environment of conflicting reports with positive economic data, and soaring consumer prices, whether or not interest rates will go up is really anybody’s guess.  This uncertainty too, though makes due diligence even more important then ever.
Blomquist suggests sitting down with clients as a matter of course and doing a full budget analysis in a spreadsheet. Also, with this period of rate uncertainty, she suggests, as she does to her clients, that the best strategy is to get pre-approved. “Rate holds are good for 120 days. You should find out what you qualify for- and then we can run appropriate due diligence and risk management.”
In addition to suggesting tools like reduced amortization, adjusting payments, and accelerating payments, Blomquist suggests that one of the best things a mortgage professional can do for their clients, beyond the required due diligence- is to communicate, and to be a partner in helping to identify their mortgage and borrowing goals.
“I like to figure out goals and long term strategy. I like to figure out what they want to accomplish, and where they are going, in the short term and in the long term too.”

Monday, July 11, 2011

Help us Celebrate our 500,000 Mortgage Client...

Victor Peca invites you to enter for a chance to win $25,000! To enter, fill out the form below and click  Link below.

Forward to your friends and family and get extra ballot.

10 Tips on Obtaining a Mortgage After Bankruptcy

When Bad Things Happen to Good People: 10 Tips on Obtaining a Mortgage After Bankruptcy

Many Canadians find themselves bogged down with a bad credit rating for the wrong reason – illness, losing a job, or simply not understanding consumer credit.  Sometimes bad financial situations happen to good people and bankruptcy is the only way out.  But it’s not all doom and gloom – there are a number of strategies for putting one’s credit back on track and getting approved for a mortgage, even after bankruptcy. 
“Going from one financial institution to the next, only to be declined again and again can be very frustrating,” says Gary Siegle, regional business manager in Calgary with Invis, Canada’s largest mortgage brokerage firm.  “This is where an experienced mortgage consultant on your side can make all the difference.”
Here are some points to consider:
  1. Locating the right lender: Some lenders will not approve a mortgage if a bankruptcy shows up on a credit report, however so-called non-conforming lenders may consider doing so, provided the borrower can demonstrate that he or she has the income to support the payments and is now a good credit risk. 
  2. Length of time since bankruptcy discharge: Different lenders have different criteria regarding the length of time since a bankruptcy after which they will grant a mortgage – typically two years along with proof of re-established credit.  Some lenders may consider applicants with a more recent bankruptcy – a mortgage consultant can advise on the regulations of various lenders.  
  3. Reasons for bankruptcy: If a bankruptcy was due to factors beyond your control, this is more acceptable to the lender than if the bankruptcy was the result of poor money management and excessive debt, which can affect the terms of an applicant’s mortgage approval.   
  4. Size of down payment: With a past bankruptcy, most lenders will consider a minimum 10% down payment consisting of one’s own funds, not borrowed or from a gift.  On a case by case basis, a down payment of 5% or less may be permitted.   
  5. The type of property: Some lenders will only lend on houses or row townhouses.  Very few will consider apartments or stacked townhouses, which may involve stringent criteria to qualify.
  6. Credit report: A detailed history of how consistently one’s financial obligations are met, a credit report provides a picture of financial health based on past behaviour.  You can obtain a copy of your credit report free from Equifax (1-800-465-7166) and Trans Union (1-800-663-9980).  A link to the Equifax online form is available at
  7. Credit score: A credit score is an objective summary that translates personal information from a credit report and other sources into a three-digit number representing overall credit-worthiness. A borrower’s credit score may determine the rate of the mortgage — the higher one’s credit score, the better the rate which can be negotiated.  Some lenders have minimum credit score requirements for those with a bankruptcy.
  8. Rate considerations: Most lenders charge a higher interest rate and even some extra fees to those with a bankruptcy.  A lender may grant a better rate if certain lending criteria have been met, such as: two years since bankruptcy discharge, good re-established credit, minimum beacon scores, saved down payment, good debt servicing ratios, and a long term history of job stability.
  9. Re-established credit: Re-established credit shows the lender that a prospective borrower has new credit and has managed it well since bankruptcy.  Typically, re-established credit should involve a recent record of on-time payments on major bank or credit cards.  Those re-building their credit need to be aware that a missed payment at this stage could be mentioned on one’s credit report for the next six years, and could be grounds for some lenders to decline a mortgage application. 
  10. Don’t do it alone:  Explore the benefits offered by mortgage brokers: For those with bad credit and/or bankruptcy, a mortgage consultant can coach you on how to improve your credit score over time.  While you work on bettering your score, a mortgage consultant can advise on how to get a mortgage despite bruised credit. Invis ( mortgage consultants work with prospective homeowners across Canada to provide valuable advice before and during the home buying process. You can speak to an Invis mortgage consultant directly by calling 1-866-84-INVIS. 

Monday, July 4, 2011

Possible Rate Hikes

Hope everyone had a great long weekend.

Canada bond yields were up sharply last week so watch the interest rates, there could be some more increases beyond the couple we have already seen. Perhaps the end of the US Fed's QE II program at the end of June has bond investors nervous, or perhaps Mars in is the evening quadrant again, but whatever the reason investors have been selling Canada bonds recently and it may soon  be enough to affect mortgage rates.

Current Rates:

5 yr VRM    – 2.25%
1 yr closed – 2.64%
3 yr closed – 3.89%
5 yr closed – 3.59% No Frills with Frills
5 yr closed – 3.69% 30 day quick close fully loaded options

Call me to get pre approved or visit my website to apply