Monday, October 31, 2011

Appraisals Vs. Home Inspections

Appraisals Vs. Home Inspections – Do You Know the Difference? 
A home is one of life's most important purchases.  Before committing to a purchase it makes sense to learn as much as possible about any property you wish to acquire.  Understanding the important differences between an appraisal and a home inspection will help you to obtain detailed information about the home's value and condition.
  
An Appraisal 
An appraisal allows the lending institution to determine if the property being purchased is suitable as security for a mortgage. For conventional mortgages, a lender will in most cases require that a professional third party assess the property to ascertain its current market value.  In the case of a "high-ratio" mortgage (with a down payment of less than 20 per cent), the mortgage insurer will go through its own internal appraisal process.  In particular, lenders and insurers are concerned that the property (in terms of its age, condition, and remaining economic life) constitutes a good match with the borrower and their ability to repay the mortgage.  An appraisal does not usually include a detailed property inspection.

A Home Inspection 
A home inspection is not used to determine property value, but will provide an assessment of the physical condition of a property.  A well-trained home inspector will perform a comprehensive visual inspection to determine the condition of the building and all of its major systems (for example the roof, structural, heating, plumbing and electrical systems).  While an appraisal is intended to provide the lender with sufficient information to decide on mortgage financing, a home inspection will hopefully reveal to a potential homebuyer whether the building and its systems are in sound working order.  If there are outstanding issues, a good inspector will provide the potential purchaser with a schedule outlining the estimated costs and when  these repairs will need to be completed.  

Monday, October 24, 2011

Market Focus

Canada's inflation rate moves a notch higher.
Despite ongoing concerns about the strength of the economy, consumer prices continued to rise in September. The Bank of Canada's core inflation rate climbed 0.5% during the month, sufficient to produce a 2.2% annual advance. This was the first time since December 2008 that the core rate was above the mid-point of the central bank's 1% to 3% target range. Five of the eight major consumer price index sub-groups recorded monthly gains with clothing and footwear (+4.9%) posting the largest advance. At the same time, continued downward pressure on global oil prices produced only a modest 0.3% decline in gasoline prices. Despite greater price pressure, analysts expect the Bank of Canada's October 25 announcement will leave interest rates unchanged.
U.S. manufacturing continues to expand
Further recovery in the U.S. automotive industry led manufacturing production higher again in September as supply chains continue to normalize in the wake of Japan's earthquake and tsunami earlier in the year. Overall industrial production climbed at an annualized 5.1% pace in the third quarter of 2011, a dramatic improvement over the 0.5% pace recorded in the second quarter of this year. At the same time, overall capacity utilization rose to 77.4%. While this is clearly not a concern from an inflationary perspective, it is the highest rate of plant use since August 2008. It is expected that continued growth in manufacturing output will be reflected in an increase in hiring in this sector as annual job growth stood at a modest 1.7% in September.
U.K. inflation rises to match record high
The most recent data from the Office for National Statistics revealed that U.K. consumer prices had accelerated to a 5.2% pace in September from 4.5% in August. The new inflation rate matches the record high reported in September 2008. Inflation in the U.K. has been above the central bank's 2.0% goal since December 2009 and has exceeded the 3.0% upper limit since March 2010. Nevertheless, Bank of England Governor Mervyn King has indicated that inflation is expected to slow significantly in 2012, and with considerable uncertainty over economic growth, no tightening of monetary policy is anticipated.


Stock markets

 
Index    Friday Close        Week    Month  YTD        1 year    2010       2009       2008
Canada(TSX)      11,949   -1.1%     0.0%      -12.5%  -5.4%     14.4%    30.7%    -35.0%
US (S&P500)       1,238     -1.2%     5.8%      -1.6%     4.7%      25.0%    23.6%    -38.6%


What You Earn
                                                 30 Day   1 yr         2 yr         5 yr         10 yr
Government of Canada                0.87        0.97        1.08        1.62        2.37
Corporate Bonds                        1.16        2.06        2.14        2.83        4.42
GIC - (Avg. Bank rate)               0.33        0.75        1.10        1.76       
GIC - (Non Bank Rates)             0.90        2.25        2.60        3.50       
Savings Account               1.75        Daily Interest Savings, Chequeing Privledges, $1,000 min Deposit
Benchmarks

                            Friday Close    Weekly Change
Gold (NY)            1656.4               -1.6%
Oil (NY)                 87.82                2.0%
CRB Commodity Index 312.78      -0.7%
30 yr Can. Bond    2.98%               0.7%
30 yr U.S. Bond    3.21%               0.6%
Can$ to US$        0.993                 0.7%

Mortgage Rates

5 year closed – 3.39%
4 year closed – 3.19%
1 year closed – 2.65%

Variable Rate prime minus .20%

Wednesday, October 19, 2011

When it’s worth refinancing your mortgage


Many homeowners wished they had asked more questions when they took out their mortgage. They assume there’s nothing they can do until the mortgage matures. Not so. A mortgage professional can review your mortgage at any time and offer tips on how to save you money.
Typically, we think of a fixed-term mortgage as a non-negotiable contract. And, it’s true that there are financial penalties to re-negotiate. Many homeowners ask mortgage professionals for a mortgage analysis – a detailed look at the penalties versus the payoffs to determine whether it’s worth refinancing to get a lower rate, finance a renovation or roll other debt into the new mortgage. Like many Canadian homeowners, you may find that refinancing makes sense.
There are two approaches to refinancing: you can simply pay out the penalty on your existing mortgage and start fresh with a new mortgage or you can opt for what is termed a “blend and extend.”
Firstly, understand that you won’t reap immediate rewards when you refinance; it will take time to see the savings, since you’ll have some up-front penalties.
So if you’re going to be selling your home in the next year, you’re unlikely to benefit from refinancing now. Your mortgage professional can help you assess your “payback” period: the length of time required to see any savings, based on the penalties you will incur and the difference between your existing rate and your new one.
Speaking of penalties, what does it cost to get out of your existing mortgage? Generally, you can expect to pay out the greater of either a) three months’ interest, or b) the interest-rate differential.* The interest rate differential can be high; in effect, your mortgage lender will expect you to pay them the equivalent of what they will lose by releasing you from your mortgage and lending the money at current rates. If you are early in your mortgage arrangement, the penalties may be high, so you should check with your mortgage professional. Don’t be put off by what looks like a big penalty: it’s only one factor in your analysis.
So is it worth it? Only your mortgage professional can tell you for sure, but many homeowners experience significant savings – even with rate differentials of two points (or possibly more). Also factor in whether you can roll other high-interest debt into your new mortgage, slashing your overall interest costs. It’s also important to consider whether your long-term goals become more attainable.
Start with a visit to a mortgage professional, who has access to rate information from a broad selection of lending institutions – and who can provide you with the kind of detailed analysis you’ll need to assess your options.

Monday, October 17, 2011

Strong Third Quarter Confirmed

The Toronto Real Estate Board (TREB) has announced a strong finish to the fall season, and in fact, to the first three quarters of 2011.
Greater Toronto Area REALTORS® reported 7,658 transactions through the Toronto Multiple Listing Service® in September 2011 – a 25 percent increase over September 2010 sales. Overall, sales during the first three quarters of 2011 amounted to a total of 70,588 – a 2.6 percent increase compared to the same period in 2010.
"We have experienced strong growth in sales so far this year, with a much more active summer compared to 2010. However, while sales have been strong, we have continued to experience a shortage of listings, resulting in more competition between home buyers," said TREB President Richard Silver. "Over the past few months, the listing situation has started to improve, so we expect homebuyers will have more homes to choose from in the months ahead."
Because of supply and demand, market conditions have become tighter, resulting in a growth of close to 10 percent in the average selling price on a year-over-year basis.
"Strong price growth through the first nine months of the year was mitigated to a great degree by low interest rates and rising incomes," said TREB's Senior Manager of Market Analysis Jason Mercer. He explained, "As buyers continue to take advantage of the affordable home ownership options in the GTA, we remain on pace for the second best year for sales under the current TREB market area."

Thursday, October 13, 2011

Facebook and Twitter Friend Referral Promo

Hello Friends,

I hope  this post finds you all in good spirits and health. I just want to remind you of this Program that I am offering to you all in time for the Christmas Holidays and how it works....

1) If you refinance or renew your Mortgage, I will give you a $250 gift card to a store of your choice for every $100,000 mtg your fund with me through one of our Lenders ( CIBC, Scotia Bank, TD Bank, Resmor Trust or Home Trust ) i.e. $250,000 = $625 in gift cards.

2) Refer me a friend or family member that funds through me and receive the same in gift cards.

My current rates that I am offering are as follows:
5 year closed - 3.39% ( cost per $50,000 = $221.00 )
4 year closed - 2.99% ( cost per $50,000 = $211.00 )
5 year variable rate - prime minus.20%

Allow my 17 years and over 1700 mortgage fundings help you secure a low rate and help you pay off your mortgage quicker.  I will save you a minimum of $750/ month if you currently have loans and credit card bills in excess of $25,000. Let me show you how?

Call me today and start saving!

Mortgage Intelligence
Victor Peca 416*888*4934
FSCO#M09001613
www.ratedepot.ca

Self-Employed, Get Credit for Experience

We’ve all heard the old stories. A successful, self-employed Canadian who can work wonders in his or her professional life can’t manage to secure a decent mortgage for a home. It strikes us as both ridiculous and unfair – given that nearly one Canadian worker in six is now self-employed. After all, these are some of the most independent and ambitious people in the country. Thank goodness that times have changed for the self employed!
These days, self-employed homebuyers have the same access to mortgages as their salaried counterparts. It doesn’t matter what the nature of your income structure: whether you work on contract, whether your work is seasonal, or whether you’re a small business owner or an independent professional. And, newly self-employed Canadians can also get credit for their past work experience. If you have two years experience in your field of expertise – whether you were salaried or self-employed – you can meet CMHC insurance standards. This greatly helps self-employed Canadians who have extensive experience in their chosen field, but who are newly in business for themselves in that field. For example, maybe you’ve been building cabinets for years in a salaried workplace, and have decided to step out on your own. Now you can get credit for your experience. The CMHC guidelines specify that you should be “performing essentially the same function with the same skill requirements” for your past experience to qualify. The CMHC guidelines apply to any mortgage insured by CMHC… from any institution.


It’s worth noting, of course, that some lending institutions are friendlier to the self-employed than others. Many lenders are still most comfortable with the traditional parameters for verifying employment and income. A steady stream of pay stubs is the simplest method of assessing your ability to service the mortgage debt. If you’ve been self-employed for a few years, your lender may want to see detailed financial statements for the most recent years. That can be a problem. An astute business owner with a good accountant will be working hard to minimize taxable income for the business: a smart financial strategy. But according to traditional lending formulas – that business strategy could flag you as a high-risk borrower. The most flexible and innovative lenders have discarded the old formulas for their self-employed clients. You could qualify for your mortgage simply on your own good credit and employment history. If you’re self-employed, or considering taking the plunge into business for yourself, you’ll find that it’s a new mortgage world.


Check out your options…
and get the credit you deserve.



Tuesday, October 11, 2011

Choosing the right home for you

Some important questions to ask 
Before you start shopping, know what you're looking for in a home. Consider what you want now, and what you might want in the future.

· Size requirements: Do you need several bedrooms, more than one bathroom, or a garage?

· Special features: Do you want air conditioning, storage or hobby space, a fireplace or a swimming pool?  Do you have family members with special needs?

· Lifestyles and stages: Do you plan to have children?  Do you have teenagers who will be moving away soon?  Are you close to retirement?

· Setting: Do you want to live in a city, the suburbs or a rural environment?

· Work: Are you willing to take on a long commute every morning?

· School: Where will your children go to school and how will they get there?

· Family and friends: How important is it to live close to them?

Source: Canada Mortgage and Housing Corporation


How much home can you afford to buy? 

When searching for a home, it makes sense to get a mortgage pre-approval – you'll get a clear-cut sense of how much money you will be eligible to borrow.  You'll also be assured of a locked-in mortgage rate for a set period of time. 
Talk to me for more information on the ins and outs of pre-approvals as well as get you an extremely competitive interest rate and length of rate hold.  You'll soon be on track to finding the home that's ideal for you and your family.

Thursday, October 6, 2011


“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.”

John Fitzgerald Kennedy





I would like to take this opportunity to Thank You all for your support and wish you and your family a wonderful and gracious Thanksgiving weekend.