I am beginning to get a lot of questions on “do I lock my mortgage in or not”? While some of you may want to just stay in variable ALL THE TIME…we have reached a point with interest rates that at least makes it worth considering! The topic of breaking a mortgage early also continues to be strong!
I thought I would share two articles from today’s Globe that might help you with your thought process…or if you are asked by friends, family, colleagues, clients etc… what your thoughts are on mortgages these days, this might help you form an opinion!
Enjoy:

http://www.theglobeandmail.com/globe-investor/investment-ideas/personal-finance/have-you-missed-the-great-canadian-mortgage-sale/article1180187/

http://www.theglobeandmail.com/globe-investor/investment-ideas/personal-finance/is-it-time-to-lock-in-your-mortgage/article1182905/

Courtesy of Victor Zamin, mortgage specialist, RBC Royal Bank
T. 519-240-0645 | F. 519-880-8329 | E. victor.zamin@rbc.com

The legendary editor of The New Republic, Michael Kinsley, once held a “Boring Headline Contest” and decided that the winner was “Worthwhile Canadian Initiative.” Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada’s virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it’s Canada. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn’t grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1

KITCHENER, ON (February 4, 2009)

OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by three-quarters of a percentage point to 1 1/2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 3/4 per cent.

The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated. Global financial markets remain severely strained. Measures taken by major governments are beginning to encourage credit flows, although it will take some time before conditions in financial markets normalize. In addition, a series of recently announced monetary and fiscal policy actions will also support global economic growth.

While Canada’s economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity. The recent declines in terms of trade, real income growth, and confidence are prompting more cautious behaviour by households and businesses.

(more…)

The most common question I

Just about everyone selling their Waterloo home asks how much effort and cost they should sink into their home to get the best selling price.

Well, of course it depends on the condition of your home. But most real estate experts agree that it doesn’t matter how good or bad your home is, basic cosmetic changes will make your house sell faster and for a slightly higher amount. But they also agree you are not nearly as likely to recover the costs of doing major renovations.

Let’s take a closer look at this. First, you have to realize that the price of your home is largely set by your location. That price is arrived at by comparing similar homes in your neighborhood and the prices assigned to other homes with similar features. That means that a beautiful home in a lower priced area in Waterloo or Kitchener will not get the same kind of offers as it would in a more upscale neighborhood in the same town. Yes, you can try to increase the value of your home by building in high-priced amenities, but it doesn’t usually work.

Just think about it for a minute. Say you were on the other side of the transaction and you had a choice of buying two homes with roughly the same features, with the only difference being the neighborhood. Same price, same features, different neighborhood. Most of us would choose the one in the more expensive neighborhood?

Even just a little bit of research shows that’s what most people do and that’s why you should not count on significantly increasing the resale value of your home by building in high-priced features. And it’s also why expensive renovating of things like kitchens and bathrooms may not be worth doing – because the value of your home will tend to be pre-determined by its location.

Instead, focus on improvements that will increase your home’s curb appeal and give the impression that you have taken care of your home, while keeping it fresh and clean – things like painting, cleaning and landscaping. When considering higher priced improvements think of them in terms of your own enjoyment.

But you have to weigh this against the high cost of doing those renovations. You’ll probably find you will not recover the full cost, and you might be better advised to simply sell for a bit lower and let the buyers do the renovations themselves.

Source – Real Estate Webs