Like all cities in Canada, buying a new property in Calgary is a complex task. A potential home owner is faced with a multitude of important questions. What kind of real estate should they buy? How much money do they have to spend? And what part of the city do they prefer to live in?
For many homeowners location dictates lifestyle, and therefore the location of their home is one of the most important factors regarding where they choose to live. Calgary boasts some beautiful city and suburban neighborhoods, however until recently it did not have much to offer those who were seeking a downtown urban lifestyle.
Cities like New York, London, San Francisco, Vancouver, and Toronto have dense urban cores within their high-traffic downtown centers. For urbanites of these cities, living in the downtown is a convenient luxury compared with the alternative daily commute. While the same holds true for Calgarians, there had not been any true large-scale downtown residential condo developments until recently.
In mid 2009 the first building of the Waterfront Calgary condominium, a downtown Calgary condo development overlooking the Bow River, was officially completed. This building is the first step toward providing home buyers in Calgary with a new lifestyle option: urban living. The Waterfront Calgary combines a high quality design, luxurious amenities, riverfront views, with the convenience of proximity to your downtown job. This development is located within Calgary’s Chinatown district, and offers condo buyers a variety of different types of units. From one bedroom units to loft-bedroom combinations or penthouses, The Waterfront Calgary gives Calgary home buyers their first real option to live in a convenient and luxurious downtown location. If Calgary’s future is similar to other cities of its size and demographics, this living downtown is a trend that will increase with time.
According to a recent survey, one in four Canadians over the age of 50, who have at least $100,000 in assets, retired with some form of debt. Nearly 25% had a mortgage on their principal residence and 28% said they took on more debt after retirement. Scary. Today I wanted to talk about how you can own your home faster and save money in the process. Why? So you can retire debt free and focus on doing the things you want to do. No matter what type of mortgage financing you are looking for, it makes sense to speak to me first.
Strategy #1
Increase the frequency of your payments
If you’re paying your mortgage on a monthly basis, switch your payments to bi-weekly. As a result, you will actually make 26 payments a year. This will help you save money and reduce your amortization.
Strategy #2
Take advantage of increased payment options
TD Canada Trust customers can increase their payments by up to 100% of their regular payment amount at any time throughout the term of the mortgage. You may be suprised by how easy it is to adjust your lifestlye to a slight increase in your mortgage payments.
Strategy#3
Take advantage of lump sum payments
In Addition to increased payment options, TD offers you the opportunity to make lump sum payments on your mortgage for up to 15% of your original mortgage amount per year on a closed term. Annual bonuses or tax refunds provide great oppotrunities to take advantage of this option. Even an annual lump sum payment of 2% will make a huge difference.
Strategy #4
Take a shorter amortization
In addition to the strategies above, you may choose to shorten your amortization from 25 years to 10, 15 or 20 years instead. The result is a slightly higher mortgage payment but significant interest savings over time.
Strategy#5
Pay the same amount
For those of you who decide to take on a variable mortgage, adjust your monthly payments to what you would pay if you were on a fixed term mortgage. The result? Even more interest savings!
Jared Chamberlain video blogs about ways you can tell if you are “MLS Obsessed”. If you have any of these ’symptoms’ there is a good chance that your “MLS Obsessed”. So you need to check out our new MLS Search Engine for yourself…
Jared Chamberlain video blogs about ways you can tell if you are “MLS Obsessed”. If you have any of these ’symptoms’ there is a good chance that your “MLS Obsessed”.
According to a recent study, Canadian household debt has climbed to a record 145% of income, from around 95% 20 years ago, and could exceed U.S. levels in the next three years. This is an average Canadian household debt of $96100. Personal debt is obviously an increasing problem with the study showing a 50% increase in mortgages running 90 days or more in arrears and a 40% increase in credit card holders who were behind at least three months in their payments.
Amid what seems like an uncertain economy and rising interest rates, I think we all can agree that it is our responsibility to go back to the basics, and that is Budgeting. Managing a monthly budget can be difficult and frusterating, especially since money is a sensitive topic and a common cause for arguments. One of the most important aspects of controlling your budget is to determine where your money is going. By establishing a worksheet, a budget can help you determine:
Where your money comes from
Where your money goes
How much is left over for you to save
By completing a budget, you can review what expenses you currently have and perhaps how to make some small changes to free up extra savings. Please review the caluculators below to get you back on track. And remember, no matter what type of mortgage financing you are looking for, it makes sense to speak to me first.
Hello Everyone! Today I wanted to talk a little bit about understanding your credit score. Establishing your credit is key to ensuring long term financial health. Theres no better way to put it but your future depends on it. When it comes to credit scores, 720 or above is where you want to be. Your credit report reflects the following information:
Credit activity over time and how you manage your debt
Personal Information
Different types of accounts you have including revolving and installment accounts
Any outstanding collections
Knowing your credit score and how to improve it can save you thousands over the life of a loan. If you’re looking to purchase a home or car or just prepare for a future event that could require some sort of financing, then you may want to incorporate a few of these tips to maintain and improve your score:
1) Know your number – Credit scores range from 300 to 900. There are many ways to order your credit report, such as by phone or fax. The best way is by internet through a credit reporting agency such as Equifax or TransUnion.
2) Review your report – When you receive your credit score, its important to ensure that the information in the report is correct. If the score is lower than you would like, read it carefully to find which factors are most likely having a negative influence on the socre, and work on improving it.
3) Pay the minimums or more - Make sure that you are making your payments in full and on time. If you can’t afford to pay the entire balance, then at least pay the minimum. Set your accounts up for automatic payment to avoid being late or missing a payment.
4) Pay down your debt – Your score is also dependant on how much you owe. If you’re overextending yourself , a potential lender may look at this unfavourably. Try to find ways to also lower your interest on high interest rate cards. A debt consolidation is an option you may want to consider before applying for any other credit.
5) Don’t go over 50% of your credit limit
6) Apply for credit in moderation
7) Dont be afraid to ask for HELP - There are a few not-for-profit counselling services available for those of us looking for a plan to alleviate debt and improve credit scores. A free consultation with Credit Counseling Services of Canada Inc. or Credit Canada could help you with a specific debt repayment plan and strategies to improve your score and offer you peace of mind.
No matter what type of mortgage financing you are looking for, it makes sense to speak to me first. Thank You!
The Canadian dollar rose sharply Tuesday as the Bank of Canada warned that it will be raising interest rates.
At midday, the dollar was up 1.63 cents to 100.17 cents US.
The Bank of Canada kept its key lending rate unchanged Tuesday, but warned that its low-rate policy has a limited future.
The bank held the overnight rate at 0.25 per cent, as economists had expected.
But with the economy recovering and inflation running above the bank's two per cent target, the need for rock-bottom lending rates "is now passing," it said in a statement.
The extent and timing of any change in the key rate "will depend on the outlook for economic activity and inflation," the bank said. The bank also noted growth is "proceeding somewhat more rapidly" than it expected earlier this year, increasing the chance of a rate rise in the early summer.
"Simply put, this statement marks a dramatic change in tone by the bank, and doesn't rule out possible 50 basis point moves," said Douglas Porter, deputy chief economist with BMO Capital Markets, in a commentary.
Porter predicted a June rate hike is now "likely," adding that the central bank is clearly much more concerned about inflation than previously indicated.
The bank sets a target level for the overnight rate, which is often called the key interest rate or key policy rate because it indicates the bank's thinking about the economy.
The overnight rate is the interest rate major financial institutions charge each other for one-day loans.
The rate has been at a very low 0.25 per cent since April 2009, when it was cut from 0.50 per cent as the recession worsened. It was at a recent peak of 4.5 per cent in October 2007.
The bank's "extraordinary policy" of ultra-low rates was introduced to boost the recovery, the statement said.
The bank is forecasting growth of 3.7 per cent this year, reflecting stronger global activity, strong housing activity in Canada and the bank's conclusion that policy stimulus advanced some spending into late 2009 and early 2010.
It's forecasting that Canadian economic growth will slow to 3.1 per cent in 2011 and 1.9 per cent in 2012.
Competing pressures
Bank governor Mark Carney is juggling competing pressures: the need to control inflation with a higher rate; the need to keep the cost of loans low to encourage business and consumer borrowing; and the strong dollar.
A bank rate increase could push the dollar even higher, hurting exports and jobs. While recognizing that growth is strong, the bank warned Tuesday about economic negatives: "the persistent strength of the Canadian dollar, Canada's poor relative productivity performance and the low absolute level of U.S. demand."
Although Carney expressed concern about inflation in March, the bank said it is expecting the rate to ease slightly in the second quarter, and remain slightly above the target two per cent rate this year before easing in the second half of 2011.
Hi Everyone! The new federal mortgage rules implemented two months ago starts today. Heres a quick run down of the key points…
Qualifying Rate
All borrowers must meet the standards for a five-year, fixed-rate mortgage, even if they choose a variable mortgage with a lower rate or a shorter term. What does that mean from TD’s standpoint? Home Equity Lines of Credits, Fixed Rate Mortgages of terms less than 5 years and all Variable Interest Rate Mortgages will be adjudicated based on the greater of the 5 Year Bank of Canada Benchmark Rate, or the actual customer rate (inclusive of customer discretion). So if you qualified for a $250,000 variable rate mortgage with a qualifying rate of 3.84% and today the qualifying rate has changed to 5.85%, this means that your income needs to be roughly 25% higher today than it was before. The 5 year Bank of Canada Benchmark rate is defined at the chartered bank – conventional mortgage 5 year mortgage rate, published by the Bank of Canada each Monday. To find the 5 year bank of Canada benchmark rate, click here.
Refinances The maximum Canadians can withdraw when refinancing their mortgages drops to 90 per cent of the value of their home, from 95 per cent. Second homes now qualify for high-ratio insured financing if they have no more than one unit.
Rental Properties
Buyers must make now a minimum 20 per cent down payment, up from five percent, to qualify for CMHC insurance for non-owner occupied properties purchased as an investment.
Key Interest rates (April 19, 2010)
Qualifying rate = 5.85%
TD Prime = 2.25%
Next BOC meeting = April 20, 2010
No matter what type of mortgage financing you are looking for, it makes sense to speak to me first. I am available outside of normal banking hours, weekends and evenings to suit your schedule. Thank you!
The Bank of Canada should keep the overnight interest rate as is in April, but aim for a target interest rate of 1.25 per cent by October and 2.50 per cent by April 2011, the C.D. Howe Institute's Monetary Policy Council recommended.
Nine of the ten members of the Council - which provides an independent assessment of the Bank of Canada's strategy to reach a two per cent inflation target - recommended the Bank keep the key interest rate at 0.25 per cent for the time being.
But for the next announcement in June, the council was split on how the central bank should proceed. Six recommended the rate still be held at 0.25 per cent, while the four remaining members were split between wanting a 0.5 per cent and 0.75 per cent target rate. The Council's formal recommendations to the Bank of Canada are based on the group's median votes on rate changes.
In a report, the Council said members who favoured the Bank stay with its commitment tended to "highlight the role of emergency stimulus and inventory swings in recent growth numbers" while noting that the disappearance of one-time factors affecting prices will cause year-over-year inflation to moderate.
In contrast, members who wanted the Bank to raise the policy rate sooner and more steadily said domestic demand and inflation are running ahead of what was expected when the Bank's commitment to keep rates low was made, adding the yield curve and money growth rates are "consistent with continued expansion."
"In general, the strongest sentiment was that credibility in controlling inflation should be the Bank of Canada's paramount consideration," the report said. "There was strong sentiment in favour of the Bank's signaling clearly that monetary policy is likely to become much less accommodative as it exits its emergency stance."
I wanted to shed some light on what is happening in the market place. Some of you may have seen this Calgary Herald article today about the number of listings in Calgary are higher by 43.3% than last year. Now granted last year Calgary was in a strong recovery mode with the rest of the world. After what happened in fall of 2008, and the US banking and mortgage system imploding, we were all in recovery mode. So with this stat of the number of listings increased by 43% shouldn’t mean much right?
Let’s look at it this way. Last year over Christmas there was nearly 12 months worth of inventory on the market and in March, Calgary was down to just under 6 months. As of March this year, we are under 4 months. In Calgary, a balanced market is between 2.5 months and 4 months worth of inventory. This is called the absorption rate. Anything above 4 months is a buyers market and anything below 2.5 months is a sellers market. So currently we are in a balanced market in Calgary, however if your looking to buy a home in Calgary, then there is plenty to pick from.
So we have a lower absorption rate than last year in March, however we now have an increase of 43.3% of listings than this time last year. Reason that the absorption rate is still low and hovering around the top of a balanced market and what makes the big difference is that there are sales happening. Compared to March last year there is an increase of 27.3% in the number of completed sales.
So why would I say that not everyone’s home value is increasing?
With the increase in the new listings over the past month or so, this has created some crazy competition for certain price points in Calgary. These price points typically sold very quickly and for good value in the past. However with the flood of properties in these ranges, if your wanting or needing to sell your home in Calgary, you are needing to stand out from the crowded dance floor.
The Chamberlain Group is a full time real estate team working at Royal LePage Foothills in Calgary Alberta. There are many contributors or 'Experts' apart of this blog, and each one makes up a vital part of our, and your real estate team if you work with us to sell your home in Calgary. All views and opinions written within these pages are simply that, views and opinions. We look forward to helping you in any way with your next real estate transaction. Click here to find out more about The Chamberlain Group.
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