Population Booming

Unless you have been living under a rock, you should know that Canada’s population is booming. In fact for the first time ever Canada’s population hit 40 million people as of June 16th. We are growing at a rate of 2.7% which matches the rate of some of the developing nations, and last year alone we added a million people to our population. This makes us the fastest growing industrialized nation, and a place that I am proud to call home.

All this growth has improved the labour pool helping fill the labour shortages but it also puts pressure on consumption and the already hot housing market. All these new people have helped us diversify or economy from mostly finical services and energy to boosting growth in technology and industries.

Diversification is our strength, with 95.6% of the growth coming from external immigration. While other countries have more of a closed door approach to immigration by calling new people to their country undocumented or unwanted. Canada on the other hand is much more welcoming and appears to be a breath of fresh air. It is this mindset and approach that is helping fuel the growth that we are seeing all across the country.

Today I am thankful for all the new people coming here who have needed my services to help them finance a home, a long weekend and another reason to celebrate our great country.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Credit building tips

I am often asked for ways to build your credit if you are new to Canada or just starting out and would like to soon purchase a home of your own. These tips also apply to those who have had some credit issues in the past and need to focus on improving their credit. So here are some tips that I give my clients.

  • Apply for a credit card with at least a $1,500 limit. Use it and make that it is paid on time and in full.
  • Apply for a small personal loan of a similar amount and make sure that your payments are made on time and in full
  • Keep the balances of your existing cards well below their limits.
  • Fixing mistakes on your credit report. Sign up for one of the free credit monitoring services out there and if you discover any problems then report them right away to Equifax or Trans Union to have them corrected.
  • Keep your credit inquiries to a minimum. This is one of the advantages of using a broker as we pull it once and then have access to multiple sources of financing.
  • Contact the credit agencies and make sure that your cellphone and rent are reporting regularly.

Last but not least you should know how your credit score is determined so you have more control of it in the future. Your score is a three digit number ranging from 300-900. The higher the score the better the credit and the lower the score the more of a risk to any potential lenders. AAA Mortgage lenders are typically looking for a score of 680 and up to qualify for the best rates and terms.

  • 35% of your score is based upon your payment history. This is why it is necessary for you to pay your bills on time.
  • 30% of your score is based upon your total debt utilization. The higher your balances are in relation to your limits then the lower your score could be.
  • 15% of your score is based upon your credit history. The longer that you have had good credit then the better chance you have of having an excellent score.
  • 10% of your score is based upon public records. This could be past bankruptcy’s, collection issues or other derogatory public records.
  • 10% of your score is based on recent inquiries. Anytime you apply for credit that request is logged with the credit agencies. The more you keep applying then it could appear that you are in financial distress.

Note if you are new to Canada then remember that it may take a few months before these items start to appear on your credit file. Be patient and follow the steps and soon you will be well on your way to developing and keeping an outstanding credit file.

Today I am thankful for the fellow drivers that waved to me this morning with all of their fingers, the sudden downpour during my workout this morning and a daughter who shares my love for reading.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Clickbait headlines

You see these headlines all the time on tabloids in the checkout line, on entertainment websites and most recently on a national newspaper talking about mortgages. The article in question has the headline of “lenders now seeing 60,70 or even up to 90 year mortgages as Canadian’s struggle with rocketing interest rates”. If you have only read the headline like a certain political leader then you are missing the whole story behind this.

The thing is that many Canadians opted for a variable or adjustable rate mortgage ( based on prime rate) when they either purchased their new home recently or renewed or refinanced their mortgage. Those on a variable rather than an adjustable rate mortgage and have their mortgage with one of major Canadian banks, then they have had their payment set for the term of the mortgage at the start.

While this was an attractive option just over two years ago when prime rate was 2.45% and most lenders were offering steep discounts on the prime rate up to -1% to 1.25%. If you did not adjust your payment when the prime rate changed (8 times last year) and a few this year, then you are most likely now only paying interest. Thus this is reason for the above headline as it would now take you much much longer to pay off your current mortgage if you did not re adjust your payment.

There are may options with variable or adjustable rate mortgages. Although the biggest which was the cost which has disappeared, you still have greater flexibility to lock into a fixed rate at any time and traditionally penalties have been less if an when you had to break your contract, but those may be gone now too with the higher interest rates.

The point is if you are on a variable rate mortgage with a lender who had not increased your payment as prime has changed, then it certainly time to contact them and increase it. This is so you are paying more than just interest .Otherwise you will be in for a big surprise once your term is up and you have received your renewal notice with a much higher payment.

Today I am thankful for the fact that I have been proactive in increasing our mortgage payments as prime has increased, that my favourite Peloton instructor got a good report on her health and the sound of the rain this morning.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

CPI update for June 23

Well the CPI ( Consumer price index) numbers are out for the month and it has been reported that inflation for May has gone down a full percentage point from 4.4% to 3.4%. This has been the biggest monthly change since the inflation hit the peak of 8.1% in June of 2022, and the lowest rate since June of 2021. So it now give me some confidence that we will soon hit that 2% target.

The slowing of inflation in May, led by a significant drop in gasoline prices, according to Statistics Canada. The deceleration was down from 4.4% last month, with gasoline prices being the key factor in the data. Removing gasoline, the inflation rate was 4.4%. Despite the slowdown, many facets of living costs are still increasing sharply, such as grocery prices, which rose almost 9% in May, and the cost of housing, with mortgage interest costs skyrocketing to a record 29.9% increase. Shelter costs rose 4.7%, and rent increased by 5.6% in the past year.

The decline was largely due to base year effects from the impact of Russia’s invasion of Ukraine on international energy prices. The result was in line with the Bank of Canada’s baseline scenario, which expects inflation to slow to 3% by summer. The slowdown was attributed to a decline in energy prices, particularly gasoline, and eased supply chain bottlenecks for durable goods. However, mortgage interest costs saw the sharpest hike in history, driven by the high interest of the Bank of Canada. The core inflation rate also slowed more than expected to 3.7%. On a monthly basis, the CPI rose 0.4%.

The next up in this economic chess match will be the Bank of Canada’s next policy meeting on July 12th. Despite the decrease, some economists are warning that the Bank of Canada may still raise interest rates again in July. While the cooling in inflation may ease the pressure on the bank, more information is needed to determine the effect of inflation, with June’s job data and the Bank’s own business outlook survey among the metrics to be considered. Let’s take today’s good news with a grain of salt.

Today I am thankful for some pleasing economic news, a great early morning run and a new book discovered hidden away in my house.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Stormy Weather

Canadians with variable rate mortgages are anxiously awaiting a week of data that could determine whether the Bank of Canada will raise interest rates. The latest inflation numbers, consumer mood and economic performance data should set policy decisions that dictate the rest of the year. Analysts expect inflation numbers to show a sharp deceleration, but economists say the bank needs to see economic growth slow further as evidence of the kind of progress the bank is looking for.

All this talk means that economists are predicting another 25 basis points increase when the Bank of Canada meets next on July 12th. While the amount and the size of the increases have slowed recently, we really need the economic data to show sharp declines in inflation and economic growth before these are going to stop.

We all need to do our part and cut back our spending. The only live once attitude will only get you further in debt and prolong the inevitable economic downturn that all the economists have been predicting. Living for today is great in so many ways except for properly planning for your financial future and that of the economy as a whole.

Today I am thankful for the cooler night after a very hot day, saving today so that we can have a much brighter tomorrow and clients who call first thing on Monday morning.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

More rate hikes???

We find out next week if our stubbornly high inflation which went against consensus and actually increased by .1% last month did finally come back down again. As a result of inflation still being so sticky the Bank of Canada decided in their infinite wisdom to increase the overall lending rate by 25 basis points or .25% at their last meeting.

I don’t know how much more of this people can actually take before they comprehend that they have to cut back on their spending. Just to illustrate the point about this regarding non necessary spending effecting overall inflationary numbers. There was recently a concert by Beyonce in Stockholm Sweden over the 10th and 11th of May. So concert goers paid for tickets, meals out on the town and accommodation for those who traveled to see her show. This resulted in a .3 % increase in their overall inflationary rate because of all the spending that was happening directly linked to this concert.

What this all means is that our individual actions make a difference towards the overall economy. When too many people are opening up their wallets instead of sitting on them, then we will all continue to suffer with higher inflation. Now don’t get me wrong I love music, movies and eating out, however something has to give for us to see inflation coming steadily back down to 2%. Let’s all do our part and end the relentless rate increases.

Today I am thankful for fun trivia games that I get to play with my daughter in traffic, learning to spend a little less so we can bring an end to inflation and Friday night movie night at home with the family.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Jobless rate update

Canada’s economy added 41,000 jobs in April, but most of the new positions were part-time, according to data from Statistics Canada. Ontario was the province with the highest number of new jobs, adding 33,000, while Prince Edward Island added 2,200. Manitoba lost 4,000 jobs. Full-time work and self-employment remained flat. The average hourly wage was $33.38, an increase of $1.66, or 5.2%, compared with a year ago. Despite the increase in jobs, the jobless rate remained steady at 5%, as more people entered the job market.

US job growth exceeded expectations in April, remaining strong despite the Federal Reserve’s indicators that it would soon put an end to its cycle of rising interest rates. The US added 253,000 non-farm jobs in April, according to the Bureau of Labor Statistics, had been expected to slow. Market watchers had hypothesised that higher interest rates could be slowing down the US’s economic growth and contributing to a decline in inflation. However, the data has caused some investors to backtrack their predictions that the central bank will cut rates and brace for possible further rate rises.

Statistics Canada said the wholesale and retail trade industry led job gains, while the biggest losses were in business, building and other support services. Full-time employment held steady, while average hourly wages rose 5.2% year-over-year, outstripping inflation. The Bank of Canada has warned that a tight labour market could push up wages and prices, making it difficult to reach its 2% inflation target.

So while interest rates have been steadily increasing over the past year, there seems to be little or no effect on the overall job market for the time being. If the economy keeps adding jobs and wages keep increasing, then we may be facing another Bank of Canada rate hike. 

Today I am thankful for the end of another hectic week as all my kids are now home, the stress relief that I get from my morning workouts and being persistent enough to find options for clients in a tough spot.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

It’s NOT always about the rate!

Marketing people are clever. They know that we will be attracted by the shiny object, the sexy supermodel or the fancy headline. This is why car companies still market cars based on their 0-60 times or their range for the electric vehicles. When all that really should matter is their reliability, safety and that there is a robust charging network for the electric vehicles. 

People use to sell office photocopiers based on speeds and feeds. Computers used to be advertised based on the gigahertz of the processor. When all that really mattered was that it printed or faxed your documents and ran your necessary programs to get your work done.

Mortgates are no different. Watching a few minutes of the Leaf’s hockey game last night I saw an advertisement for one of the new national players in the mortgage space and it was just based on rate. While we all have access to similar low rates, the sad part is that not everyone qualifies for the lowest advertised rate.

The things that impact your rate will be but are not limited to your credit, type of income, size of down payment, amortization, type and location of property and debt service ratio’s. If you have had credit issues in the past and all you see online or on the TV are the lowest advertised rates, then you may end up being disappointed when it comes time to apply for a mortgage.

Sometimes getting your mortgage approved and funded so that you have a roof over your head is more important than the actual rate. As someone who has been a broker for over 21 years now, I never sell or market on rate but always try to get the most competitive rate and terms for each client. 

In the end, it’s not about the rate. It’s about finding a mortgage that fits your unique situation and allows you to achieve your goals, whether that be owning a home or investing in real estate. So, don’t be fooled by shiny advertisements or low rates that may not apply to you. Work with a mortgage broker who will take the time to understand your needs and find the best solution for you.

Today I am thankful for finding options for clients when sources that we wanted to go with said no, that the conversation about rate is always an opportunity to discover what is most important to the client and that variety of clients realy is the spice of life.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Another one bites the dust

As the great Queen song goes, “another one’s gone, another one bites the dust”. I woke up to the news that another bank has failed today. This time it was another troubled California lender, First Republic Bank. 

Regulators seized their assets early this morning and most of it’s assets and all of it’s deposits were sold to JP Morgan Chase in a bid to stabilize the banking sector. This was the 3rd large US bank to fail this year, 4th large banking failure if we include Credit Suisse who had to be reluctanly taken over by UBS.

What causes this you may ask? Well it all starts with a run on deposits when large sums of money are withdrawn from the bank as people hear rumours that their money won’t be safe. Basically it is an evaportion of confidance that they will be able to protect the money that you have on deposit with them. When the confidance is lost then the bank will quickly fail if enough of the deposits are withdrawn.

Can a bank fail here in Canada? While possible, it is highly unlikely. Since the Canadian Deposit Insurance Corporation was established in 1967 there have been 43 bank failures. However in the US there have been more than 500 since the year 2000. For instance the Canadian banking sector is made up mostly of the big 5 well capitalized banks whereby the US have smaller or mid-sized regional banks spread across the country. 

How do you protect yourself? Make sure that your bank is a member of CIDC. This means that your deposits of up to 100,000 are fully protected. This covers your chequing and savings accounts, TFSA’s, tax free home savings accounts, RESP’s, RRSP’s, Disability savings plans, RRIF’s and trust deposits. There are also calls to increase the coverage as the US FDIC covers up to 250K US or 330K CDN.

It is important to also do your own research on the stability and financial health of the bank you choose to do business with. Check their credit ratings and financial statements to ensure they are not at risk of failing. Diversifying your investments and keeping some cash on hand can also provide some protection in case of a banking crisis. Overall, while bank failures may be a rare occurrence in Canada, it is still important to take precautions and stay informed about the stability of your financial institution.

Today I am thankful that I finely have all my kids home, that my girls has a great 1st year at university and that I made it though running every day in April.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

In the news

Many news outlets have published stories recently about the vast increase in the amount of private mortgages that Canadian’s are taking out in an effort to complete their real estate transactions or stay in their residences, increasing by 72% between 2019 and 2021. Many factors led to the increase in those taking out private mortgages, the boom in the housing market during the pandemic, the implementation of the stress test causing borrowers to have to qualify at much higher rates and not being able to qualify with traditional lenders due to credit or income.

While this is in the news, people have to realize that private mortgages are NOT long term financial solutions. They are short term bridge loans, meant to take you from point A to point B as quickly as possible. That’s it! If advised property and taken with the correct amount of caution then private mortgages are sometimes an ideal solution to help you get to where you want to go.

I have had clients use private mortgages to help them complete multi unit apartment buildings that were under construction, allow them to purchase a home as their current residence had not closed yet and also because their income did not allow them to qualify for traditional bank financing. They are a financial tool and when used wisely will allow people to reach their objectives. However they are not a one sized fits all solution. They are expensive and you are only paying interest payments on the mortgage. Ask lots of questions and know what you are signing up for, and most importantly plan your exit as to how you will pay off the loan in 12 months time.

It pays to have the right advice so contact me when considering whether taking a private mortgage is the right thing for you to do, and don’t forget to have your exit plan ready too.

Today I am thankful for a cool crisp run this morning to wake me up, another opportunity to sign up and do my annual ride for Cancer and private lenders who are trustworthy and provide a valuable service to my clients.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here