For the detailed report, please click RBC Housing Affordability Report!

The Bank maintained its forecast that stronger growth will likely be reported for the final quarter of 2009, after a disappointing third-quarter performance, with the economy forecasted to build momentum throughout 2010. Most experts maintain that 2010 will see stronger growth including an improved employment outlook, increase in investment in machinery and equipment, and large gains in the leading indicators index.

However, the strengthening in the Canadian dollar and weak  U.S. demand may cause a slight risk to Canada’s recovery. Last week’s reiteration that overall risks are “tilted slightly to the downside” as a result of policy operating at the lower bound indicates that the bank’s policy plan remains intact and it is unlikely that there will be a change in the overnight rate before the end of the second quarter of this year. However, this cannot be written in stone.  Huge employment gains and strong 2009 fourth quarter numbers could change the timing of the rate increase.

Many forecasters are still expecting Canada’s economy to gain strength; perhaps though, more slowly than earlier recoveries.  This may in turn likely delay raising the overnight rate until the summer of 2010.

There are a couple of main points that have to be looked at when first inquiring as to whether you can use your mortgage to help your credit crunch.  First, what is the penalty to break your current mortgage and refinance your debts into your mortgage.  Typically lenders charge a penalty to break a current closed mortgage; however call your lender and inquire.  They may allow you to increase the amount of your mortgage, free of penalty as long as you stay with your current lender.  If switching lenders, it is important to weigh the costs and benefits to paying the penalty.

The second point is whether you have an adequate amount of equity in your home to draw out and pay your other debts.  This will be assessed by an appraisal of your current home versus the mortgage amount you will need to pay-out your current debts.

If you find yourself looking at high-interest credit charges, rolling your debt into your mortgage and taking advantage of the low mortgage rates may just be the leg up that you need!  Talk to your mortgage advisor for more information!

It is our hope at Silverman Mortgage Group that everyone enjoyed a great holiday season and you are all ready for an amazing 2010!

We are starting the new year off with historically low interest rates. This being said, with the loonie rising to the highest level since October and the spread between today’s low interest rates and the bond yields, rates will be trending upwards in the near future.

If you or anyone you know are in the market to purchase a new home, refinance your current mortgage, renew your current mortgage or pull some equity from your current home now is the time!!

If you are actively in the market, get your pre approval’s in ASAP as you can hold today’s rates for up to 180 days.

Click on the rate  link to see today’s rates.

For a close friend of more than 40 years, Christmas is coming Oct. 1.

That’s when, a day before his 65th birthday, he retires after 49 years of working life, most of it spent in journalism.

“I’m like a kid looking forward to Christmas,” he says. “In fact, this will be better than Christmas.”

His will be a good retirement, with seven different pensions adding up nicely to ease the way in what should be his golden years. (He will have the OAS, CPP, a small British government pension and four modest defined-benefit pensions from various employers over the years.)

He will do some travelling with his wife, who has already retired, spending two weeks in the south of France, a place they adore, to start his retirement with a Gallic flourish. But he will be toweringly unambitious in retirement, spending much time listening to opera, reading crime fiction and histories, cooking, having a few beers, looking after his five cats and looking out the window — when he has the time.

And yet, if the right opportunity presented itself, he just might think about working a day or two a week for some extra spending money. It would have to be tailored precisely to his needs and wants.

But for many people of my friend’s vintage and a bit younger, Baby Boomers who have been blindsided by the Great Recession, coming out of retirement or working deeper into tarnished golden years are not options, but necessities.

The problem is that the Great Recession has pushed unemployment to decades-high levels, so jobs are simply not there for the taking, as my friend will no doubt discover if he some day summons up the energy to go looking.

A U.S. study published last week by financial retirement firm Longevity Alliance shows that almost half of American retirees have thought about getting a job, but now is simply not the right time. Though circumstances are somewhat different in the United States for retirees, we can roughly conclude that the numbers and sentiment in Canada will be similar.

Among other things, the study found that:

* Among retirees, 43% “seriously considered the possibility of some day going back to work” when they first retired.

* Only 16% of retirees say they are currently considering leaving retirement.

* “Changes in personal finance” is a major consideration that would force a retiree to think about going back to work, with 42% of retirees citing it as a factor.

Though some economists and authorities have declared the recession over (prematurely, in my view) the recovery, when it comes, is likely to be of the “jobless” variety in the United States, Canada and much of the rest of the world.

It is reckoned that 15 million U.S. jobs will have to be created to get the country back to employment levels that match those before the recession and also to make up for the subsequent rise in population. For Canada, the number is likely to be more than one million jobs.

As a result, my friend, if he chooses, and millions of other retirees should not expect to have jobs thrust at them any time soon, even if they are skilled and reliable workers.

The answer, then, to finding a comfort level in retirement for many people is saving solidly for retirement and probably cutting back on some things in retirement.

As Longevity Alliance notes: “Retirees are very cautious right now, but not panicked. Their reluctance to rejoin the workforce only underscores the need for them to plan very carefully for the rest of their retirement.”

Amen to that. As I’ve noted over the past few years, another thing retirees can do is reinforce the themes of saving and planning to their children and grandchildren. If they work hard and save hard, but not to the exclusion of enjoying life, they will more likely be able to enjoy a good, long life.

They will almost certainly not have seven different pension sources like my friend, who also has a decent-sized RRSP that was not invested in stocks at the time of the crash. But they can work toward making their personal savings and investments add up to their own defined-benefit plans.

So they, like my friend, will be able to look forward to their own personal Christmases, to retirements that may include work, but not the necessity of work. whanley@nationalpost.com

August 17th – Canadian 5 yr bond yields -.03bps to 2.58. The spread, based on 5 yr rate of 4.29% is 1.71.

August 13th – Canadian 5 yr bond yields -.05bps to 2.61. The spread, based on 5 yr rate of 4.29% is 1.68.

What does this mean?  Essentially, the yield, or rate of return on a bond, can be read through a yield curve: a pattern of yields on bonds.  The increase in bond yields is what experts watch.  If the bond yield continues to increase, the spread will continue to shrink and this could be a trigger for interest rates to rise.  Typically, lenders are looking for a new spread between 1.80 and 2.00.

]]> http://themortgageblog.ca/2009/08/canadian-bond-yields-may-signify-an-increase-in-interest-rates/feed/ 0 http://themortgageblog.ca/2009/08/financing-for-leaky-condos-now-what/ http://themortgageblog.ca/2009/08/financing-for-leaky-condos-now-what/#comments Sat, 08 Aug 2009 23:55:21 +0000 Zach Silverman http://themortgageblog.ca/?p=367 As many of you have heard, the BC government has announced the cancellation of interest-free loans for people responsible for fixing their leaky condos.

This has left thousands of people wondering how they will financing the repairs to their condos, if and when they are necessary.  With many, many buildings still not assessed for damages, the cancellation of the Reconstruction-loan program may lead to thousands of condo-owners needing financing for home repairs.

Although there are still options the standard financing options for people who can qualify for standard home loans, the people this strands are those that cannot qualify for conventional loans.  Especially with the falling property appraisal values, many people do not have the equity in their home to draw from.  Compound that with the tight economy and many job losses, many people are having difficulty qualifying for loans.  Hence, the need for the government-assisted, interest-free reconstruction-loan program.

Think for a minute about those who will receive an assessment of repair for $50,000 (although many repair bills come in as high as $80,000 per unit) without any idea where the funds are going to come from.  Unfortunately, many experts foresee a large number of these units going into foreclosure with their owners declaring bankruptcy because of a lack of funding options.

If you are in this position, information and action is key. There may be options still available.  Please consult your financial institution or mortgage advisor for possible options and information.

Activity in the month of June marked the fifth consecutive month of rising sales and the highest level of activity since January 2008, on a seasonally adjusted basis.

“Housing markets around BC continued to post higher sales in June, fuelled by attractive mortgage rates and lower prices,” said Bryan Yu, BCREA Economist.

“The larger urban regions of Greater Vancouver and Victoria exhibited balanced market conditions in June, while others have recorded improved market stability. Stronger demand and a decline in home listings are stabilizing home prices in many BC markets.”

Year-to-date, MLS® residential sales dollar volume was down 20 per cent to $16.3 billion over the same period last year. A total of 36,329 units were sold in the first six months of 2009, down 15 per cent from 2008, while the average MLS® price declined 5 per cent to $448,381.

Most Canadian homeowners are not only unaware they’re eligible for a federal tax credit, but they’re probably already spending money they could be claiming on their next return, a recent study has shown.

The Home Renovation Tax Credit was announced in January’s federal budget as an incentive to boost spending and stimulate the economy. Canadians renovating their homes and cottages can claim between $1,000 and $10,000 per family and receive a 15 per cent credit on their tax return.

“People are not used to this kind of credit, where it’s so encompassing that they’re missing out,” says Doug Northrup, master tax specialist at H&R Block in Moncton. “They don’t understand exactly what it is or how extensive it can be.

“It covers things like kitchens and bathrooms, windows and doors, but it can also do things like putting in a new well or home-security system, putting a new driveway in or doing some landscaping as well.”

A recent Angus Reid poll showed most people do not realize the full scope of the credit. Most Atlantic Canadians scored lower than 50 per cent on a quiz of what projects qualify and 95 per cent said they knew “little or nothing” about the program.

Robert Hunter, president of Avalon Developments renovation and contracting company, says the main thing stopping people from taking advantage of the program is concern about the economy.

“I think it’s been well-communicated,” he said. “I think they’re maybe a little more hesitant with their dollars. After all, you do have to spend a lot of money to get anything back.

“If I were to guess, I’d say people would probably take advantage of it a little later on (in the summer). Maybe it will pick up when they see the economy has stabilized or if they get some more positive news. It’s hard to read.”

Northrup says the program includes several simple improvements around the house that many people don’t expect to be able to claim.

“It’s not something you have to have a contractor come in and do. You can turn around and do it yourself, you just have to have all your receipts,” Northrup says, adding Revenue Canada’s website contains information detailing what work qualifies, as well as forms to help people file their returns.

For example, a fresh coat of paint on the inside or outside of the house, building a new deck or even planting new perennial flowers and shrubs are all do-it-yourself projects that qualify for the credit.

“I’m sure 90 per cent of the people who go to garden centres and buy perennials have no idea to keep the receipts for those,” Northrup says.

“When people think home renovations, they don’t think it extends to the garden as well.”

In addition, projects that also qualify under the government’s energy efficiency retrofit plan can be claimed twice.
Northrup noted, however, that some things don’t qualify, such as furniture, tools or cleaning up from construction.

“Other than that, there’s not much on the list that isn’t eligible,” he says.

In order to qualify for the credit, work must be paid for before Feb. 1, 2010.

The Angus Reid Strategies poll was conducted from June 5 to 11, 2009. It surveyed 1,398 randomly selected Canadian homeowners, with a margin of error of plus or minus 2.6 per cent, 19 times out of 20.

*This article was featured in the Times & Transcript and from Rita Singh, First National