HSBC Offering 5 year Closed at 3.99%

HSBC has through select brokers offered a segment shattering 3.99% on a five year fixed product that has (as expected) a limited time offer. This is quite a drastic rate and most lenders and brokers including INVIS’s own ‘best rate’ site have left this off the charts as it is not offered to every broker. Has anybody been into the branch to get this rate? Last limited time offer that HSBC put on the 5 year term it was not avalible to the branch.

Having clients go outside for your best rates seams like a poor business model to me, I feel very lucky that TD allow us to offer the most competitive rates in the marketplace without all the strings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With current market conditions, I have been seeing a steady flow of clients that have to pay IRD penalties after they locked into rates only a year or so ago… take a VIRM rate; even if it is a closed VIRM you can fix your mortgage at current discounted rates at any time.

Get a Total Cost Analysis of your current mortgage and see if changing refinancing is a smart option send me an email at david.hudson@td.com

Total Cost Analysis

Total Cost Analysis Report *Sample*

“This Weeks Report” – Budget changes will make home ownership and renovations more attractive

Patrick Weeks of RE/MAX Select Properties recently sent out a fantastic article about the great opportunities in the current market. Patrick Weeks is a top producing medallion club member and the recognized expert in Vancouver’s character homes. Mr. Weeks also has the distinction of setting price records in multiple areas of Greater Vancouver. Patrick Weeks can be reached at his website at www.patrickweeks.ca or by email at Patrick@partickweeks.ca

 

 

“federal government is proposing changes in its 2009 budget that will make home ownership more attractive financially for first-time home buyers, and encourage those who already own a home to make renovations over the next 12 months.

“Clearly this budget has some very special incentives for homeowners,” says Jamie Golombek, managing director of tax and estate planning with CIBC Private Wealth Management in Toronto, “whether existing homeowners who want to renovate, or non-home owners who are considering entering the home market for the very first time.”

These incentives include an increase of $5,000 in the home buyers’ plan (HBP) limit, a $5,000 non-refundable tax credit for first-time home buyers toward the closing costs of an eligible home, and a 15% tax credit on up to $9,000 eligible home renovations made by the end of January next year.

In making these changes, particularly the tax-credit incentive for existing homeowners to make renovations, Ottawa is attempting to provide immediate stimulus to a stumbling economy by encouraging Canadians to open their wallets to buy or upgrade a home.

“The government is trying to get people spending to boost the economy,” Golombek says, “encouraging individuals to spend their money now.”

The Home Renovation Tax Credit (HRTC) will provide a 15% income tax credit on eligible home renovation expenditures for work performed, or goods bought, after Jan. 27, 2009, but before Feb. 1, 2010. The credit can be claimed for the 2009 tax year on eligible renovation expenditures more than $1,000 but not more than $10,000. Eligible renovations include expenditures such as renovating a bathroom or kitchen, installing new carpet or replacing a furnace. Ineligible expenditures would include the purchase of new furniture, carpet cleaning or regular maintenance of a functioning appliance.

A married or common-law couple can claim a credit of up to the maximum allowable amount of $9,000 between them. Eligible dwellings for the HRTC can be any home used for personal purposes, although it doesn’t have to be the primary residence. Renovations can be done on more than one home, but the total amount a couple can claim remains $9,000. If two or more Canadians who are not married or common-law jointly own a home, they each can claim up to $9,000 on eligible renovations expenditures.

For Canadians looking to buy a new home, the government proposes increasing the HBP withdrawal limit to $25,000 from $20,000. The existing rules governing the HBP remain the same. The program allows an individual to withdraw money from his or her RRSP without having to include that money in taxable income, for the purpose of buying a first home. The money then has to be repaid over a 15-year period starting the year after the year of withdrawal. If the funds are not repaid, they must be included in income.

The government is also proposing the First-Time Home Buyers’ Tax Credit to help first-time home buyers with “closing” costs associated with buying a home, including legal fees, disbursements and land-transfer taxes. The $5,000 non-refundable income tax credit amount will apply to a qualifying home bought after Jan. 27, 2009. The credit will provide up to $750 in tax relief starting in 2009.”

 

As of yesterday March 4th 2009 the Vancouver Sun reported that home sales for the Greater Vancouver Area were up 94% over January. With rates at unprecidented levels and the strong Federal support – now is the time!

 

 

Lynchism Gem: Ignore the headlines

Famed Money Manager Peter Lynch is perhaps best known for his timeless wisdom that you can beat the pros by focusing on stocks of companies where you either work or shop or have some other edge. But a more relevant Lynchism today is this gem: Ignore the headlines.

It’s not that easy thing to do, every water cooler and dinner table has endless chatter on recession, housing, subprime woes, the credit crunch, Overpaid CEO’s and soaring energy costs.

Makes you want to sit on your thumbs and wait it all out before making any big moves. But what exactly are you waiting for???

Rarely has there been a moment in time that you couldn’t scare yourself into doing nothing. And yet, as Lynch observed nearly 20 years ago, “in spite of all the great and minor calamities that have occurred…all the thousands of reasons that the world might be coming to and end-owning stocks has continued to be twice as rewarding as owing bonds” The top reason not to buy stocks, in Lynch’s view, is if you don’t already own a home-in which case, that should be your first investment. An owner occupied home is nearly always profitable.

Warren Buffet the Oracle of Omaha has recently been quoted to be actively perusing US Stock and companies with his personal account. “Be Fearful when others are Greedy, and be greedy when others are fearful.”

The Fundamentals of the economy especially in British Columbia are very strong. If you are needing to retire and have lived your whole like in Winnipeg and have enough to live well in BC would you not leave the winter behind, if you want to use your RRSP’s and the Canadian Medicare then your California of Canada is right here in the Lower Mainland!

 

Here is a great article in the Vancouver Sun echoing these ideals

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B.C. in better position than most to weather financial storm

Derrick Penner

Vancouver Sun

Monday, October 20, 2008

 

VANCOUVER — On the bright side, British Columbia is heading into a period of economic uncertainty with a provincial budget that is in good shape and an economy that is performing well, according to the  Institute of Chartered Accountants in B.C. (ICABC).

However, the B.C. economy is not doing so well when it comes to the competitiveness and productivity of its workforce, the ICABC said in its annual Check Up B.C. report, an assessment of provincial economic performance. B.C.’s labour-force productivity increased by 1.3 per cent between 2002 and 2007, the report said, which lagged the national average of 4.5 per cent.

“At this time of uncertainty, it is imperative that government continues to be conservative in their economic forecasts and considers all policy tools at its disposal to stimulate investment, boost productivity and maintain sound fiscal management,” Richard Rees, CEO of the ICABC.

Rees added that the no one knows what the impact of the current financial crisis will be, and while “many British Columbians stand to lose a great deal,” the province’s economy is “in a better position than many of our competitors to weather some of the challenges.”

The Check Up report measures factors in three general areas: quality of life, work and investment, mostly how these factors performed over 2007.

On the work side, the ICABC noted that B.C. reported a record low unemployment rate of 4.2 per cent in 2007, a year that saw 70,800 new jobs created.

However, in 2008 the job market has softened, the ICABC added, with only 500 net new jobs created in August and an unemployment rate that has risen to 4.6 per cent.

“Already many resource-dependent communities are feeling the effects of reduced consumer demand and lagging commodities markets, and our forest industry continues to stagnate,” Rees said.

“But we are fortunate in B.C. that the provincial government has done a good job creating a sound economic environment.”

© Vancouver Sun 2008

How a lender looks at a Mortgage Application

Everyone always seems to be quite curious when it comes to the mortgage application, how do the Blue power suits come up with what a ‘good’ application is? and were does my application stack up to this standard?
Just think about how you would feel if someone was to ask you for a loan. You would consider how long you have known them, are they punctual, do they move around a lot -good with there obligations, do they live within there means….. What you are doing is creating a picture of how likely you will see your hard earned money again! Lenders call this the Five C’s of credit. Today I would like to talk about what each of these components mean and how it is my job to position your application in the best of light to the lenders.

 

Character is the general impression you make on the potential lender. Imagine if you were lending money to a friend, how well you think that they will be willing to repay the loan thinks like your educational background and experience in business will be reviewed. The length of time at your current employment and your current residence will be considered. The longer you have been at both, the higher you will score on the character scale. One important thing to note is that with the large percentage of Lower Mainland residents that are now self employed, if you worked in the same business for several years as an employee and now you are business for self, Genworth and CMHC have programs that will look at your previous employment background, as most traditional institutions require 2-3 years as business for self.

 

Collateral is what the loan is secured upon; Mortgages are a part of the banks Real Estate Secured Lending department. In real estate transactions this generally means the property that you are looking to purchase or a property you are using as collateral (such as a Home Equity Line Of Credit). If for some reason, you cannot repay the mortgage, the bank wants to know that the real estate the mortgage was taken out for is good and marketable real estate. A real estate appraisal will determine the value for the property in today’s market. The appraisal will also indicate to the lender the type of property being financed and any deficiencies that may affect the ability to re-sell, in case of default. A property that is located in a North Vancouver is considered a better risk than a farm in rural parts of the Province. Simply, there are more buyers for the home in the city than for a rural farm and therefore is easier to re-sell.
Capital is the money you personally have invested in the purchase, otherwise known as your down payment. The more of your own money you invest as a down payment, the more likely that you will do all you can to maintain your payment obligations. Banks want to see a vested interest in the property that you are acquiring; this is why rates and insurance premiums are generally higher for a rental property as it is not occupied by the purchaser who is comfortably living in another location. Capital is also reflected by your ability and willingness to save money and accumulate assets. The higher your net worth, the more you have as a cushion for repayment in the event you run into a financial set-back.
Credit is the evaluation of your habits in performing credit obligations. The information about your credit history is stored at the “credit bureau” and indicates how well you paid your bills over the last 6 years. All major credit cards, auto loans, leases etc. are reported to the credit bureau. A lender will evaluate your ability to maintain your obligations and try and determine how well you live within your means. Some individuals make the mistake of not paying the minimum monthly obligations on loans and credit cards with the expectation of making a larger payment the following month. These missed payments appear on their credit report branding them as chronic “late-payers” for the next 6 years. In Canada we use an empirical system of your score which is called the Beacon score, in the US it is referred to as a FICO score, they are on a scale from 400-900 the higher your score the more favorable your application will be.  

Capacity to repay the loan is probably the most critical of the five factors. The lender will want to know exactly how you intend to repay the loan. The lender will consider your income as it relates to the loan that you are applying for. Does the monthly carrying costs of the loan represent less than or equal to 32% of your total monthly income? If it is, the probability of you successfully repaying the loan is fairly high. Prospective lenders will also want to know about any other sources of income you may have to repay the loan, if your steady income stream is interrupted. Some of the institutions such as TD Canada Trust allow you to use rental income to offset this obligation, either directly or as supplemental income, please send me a email if you have any questions regarding this policy, it is a important tool that can make or break a transaction.