Peak Inflation

The US inflation numbers came out yesterday and it showed that inflation has started to come back from it’s high of 9.1% in June to 8.5% in July. So this has many of us hoping that we have hit peak inflation. Most of the reduction stems from gas prices coming back from their highs in June. The month over month prices of good and services were flat with a 0% change from June to July and this is after hitting a 17 year high in June.

So while this is positive news, the true indication will be where the numbers go for next month. Will this report be just a fluke or a true indication that inflation has started to reseed from it’s highs. If this is the case will bond yields come back down and bring the fixed rates with it? This has already started as rates are now about 1% off of their June highs but is there still more room for them to come back down. How will all of this effect the central banker stance on the over night interest rates?

So let’s take the good news out of the US with a grain of salt for now and see how the Canadian numbers look when they are announced next week. However the true test may be when the Bank of Canada meets on September 7th to discuss the overnight lending rate, which if you remember the last time they met in July it went up by one full percentage point.

Today I am thankful for the fact that the repair work on my office is almost complete, my girls are getting excited to start their university education next month and that the humidity has left us for the time being.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

Compliance

compliancekəm-plī′əns

noun

  1. The act of complying with a wish, request, or demand; acquiescence.
  2. Willingness to follow a prescribed course of treatment.
  3. A disposition or tendency to yield to the will of others.

In the mortgage industry compliance is a necessary part of business. On one side it is about doing what is right for your clients and on the other side it is about adhering to the rules and standards as set forth by our local licensing body. It’s not just a cool song by Muse.

I see my role with clients similarly to how a fiduciary would act in the financial planning field. That means I work for the clients to help them secure the financing that makes the most sense to them and as a result of a job well done I receive compensation as a result. Those who put clients in products or services as they will receive more commission are not acting in the clients best interest.

Full disclosure for me with clients means they know the details about the products, if it I a fit and my potential compensation. Yes this is a business, but by working for the client the commission only comes as a result of a job well done.

Today I am thankful for a great conversation with an old friend, some new financial advice from my investment advisor and lunch with my son today.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

Economic Data Q2

The national GDP numbers just came out and our economy grew by .8%, which was well below the forecasted growth of 1.4%. This was our weakest performance in three quarters due to a sharp drop in international exports and lower government spending.

The United States who just recently published their economic data and it showed that they now have two consecutive quarters of negative which is the definition of a recession. While we here in Canada have not had as high of inflation as the US nor the current lows of their GDP, there are still predictions that we will have two consecutive quarters of negative GDP data very soon as well.

While personally there is not much we can do as individuals to influence the overall financial health of the country, there are actions that we can take to prevent our own economic downfall. Do things like pay off or down your unsecured debt, make sure that you have a 90 day reserve fund and live well within your means. Doing these things will make sure that you personally will be fine during any economic downturn.

Today I am thankful for the well deserved rain that we received today, helping my teenaged daughter discover music from my generation and that she actually likes it.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

Setting new records

New records are being set almost every day. Most recently with heat waves in Europe and in North America due to climate change ( yes it’s a real thing), and now today with Canada’s new CPI ( consumer price index) numbers. The CPI for the month of June here in Canada was at 8.1% up from 7.7% in May but still off the predicted high expected of 8.4%. Thankfully much lower than the American inflation rate of 9.1%.

We are at the highest level since January of 1983. Prices of almost everything are up from gas, groceries, housing and consumer staples. The one silver lining if there is one is that the CPI rate for June came in lower than expected for the 1st time in months. If this is the indication that we have hit our peak inflation rate then that would be a huge relief. Fingers crossed to see what the numbers look like for July this time next month.

Today I am thankful for clients who quickly sign and return their mortgage commitments, the sounds of the birds in the morning while reading on the back deck and another beautiful stage of the Tour de France today.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

What does it mean?

Yesterday for the first time a very long time ( 26 years in-fact) the Bank of Canada raised the key overnight lending rate by 100 basis points or 1 full percentage point. As a result the bank prime lending rate is now 4.7%.

Many of us are now waking up this morning asking what does this all mean and how will it impact me. Firstly if you have a variable rate mortgage your payment has now increased. Those with lines of credit their payments have also increased. Basically if you are looking to borrow money it has now become more expensive. The days of cheap/free money are now officially over.

The Bank of Canada has made these moves in an effort to bring inflation which is now at 40 year highs under control. In-fact just prior to the BOC making the policy announcement yesterday the American CPI numbers were released and they hit 9.1%, which is another 40 year high. Inflation has been driven up by the Russian invasion of Ukraine, consistent supply chain issues and continued Chinese lockdowns.

What the BOC is looking for is for consumers to spend less, thus driving down demand. However if the spending stops too quickly it will just drive us into another recession. Only time will tell how this will all work out but with these rapid increases of rates things may come to a halt pretty quickly.

Today I am thankful for appraisals coming in just in time, the arrival of the warmth of summer and Alpe D’Huez stage of the Tour de France today.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

BOC Rate Announcement

The Bank of Canada meets today and will publish their latest policy on interest rates. Most economists are widely expecting a 75 basis points increase similar to what the Federal Reserve did in the US just recently. If this does happen it will be the largest rate increase in over 26 years. Which many believe is required to finely bring our sky high inflation under control.

With the announcement today that the US CPI numbers just hit 9.1% for June which is a 40 year high, it is almost assured that we will have an oversized rate increase.

Well the BOC just exceeded everyone’s expectation by increasing the overnight lending rate by 100 basis points to 2.5%. This as a result will increase the prime lending rate from 3.7% to 4.7%. So those with variable rate mortgages or lines of credit will have their payments increased for the next month. In the policy announcement they BOC stated that CPI has remained high ( in the 8% range) due to the war in Ukraine &supply chain issues that have yet to be resolved.

In the published announcement BOC indicated that this may not be the last of the rate increases and it will depend on the state of the over all economy and how inflation reacts to these changes. The next scheduled meeting is September 7th.

Today I am thankful for my daily motivational quotes my friend Shane sends me on a daily basis, a hill run when I didn’t want do it and date night with my wife last night.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

Counting the days

Big events in your life often have you counting down the days till they happen. It could be a wedding, birth of your first child, graduation or a long awaited trip. For the most part the people I am working with are counting down the days till closing on their new homes. So while you are in the final count down, make sure that you keep a few things in min.

  • Call to switch all the services ( phone, power, water & cable)
  • Book a locksmith to re key all the locks
  • Do the final walk through with your Realtor
  • Have your mover’s ready to go
  • Sign all the documents with the lawyer’s office well in advance
  • Do NOT finance anything between when your mortgage has been approved and you get the keys to your new place.
  • Make sure to get your new home insured
  • Pick up the keys from the lawyer on closing day

Today I am thankful for the mood improving benefits of intense exercise, clients who are excited to close and my daughter who was exhausted from camping all weekend.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

Fiscal Cliff

The Bank of Canada meets next Wednesday July 13th and it’s widely expected that we will have another rate increase. However the worry is now that the increase will be too large and start to push us into a recessionary environment. Yes still have sky high inflation with the prices of gas and consumer staples still at record levels. However economists are coming out saying that with the recent retreat of the price of oil that other prices will start to recede as well.

So this brings us back to the next potential rate increase. The US federal reserve increased their over night lending rate by 75 basis points just a few weeks ago and since then the expectation has been that the BOC would follow with the same level of rate change. However the hot real estate market has already started to slow down even though we still have a housing shortage. So any over sized rate increase like the Fed did recently will put us that much closer to falling off a fiscal cliff into a recession.

The objective has always been to increase rates enough to allow for a soft landing of the economy. However with CPI figures remaining stubbornly high has forced the BOC and other central banks to be more aggressive in their approach to increasing rates to tackle inflation. This aggressive stance is pushing us ever closer to the edge of a cliff where we fall into a recession.

It’s a balancing act and one false move could be the one that pushes us off the cliff.

Today I am thankful for the rain overnight, my daughter who has cut my hair since the start of the pandemic and active recovery today so training can resume stronger tomorrow.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

Reputation Risk

As a brokers we deal with a wide variety of clients, from those seeking A bank lenders, alternative lenders, private mortgages or commercial. Because of this mix, clients come to me with an expansive and diverse background. Occasionally I come across clients who have had less than stellar pasts. I know this because we Google them as well. As a result things that they may not be proud of come up as a result of the search.

While I do this business for the money and because I enjoy it, I also keep a sharp eye my reputation from my lending parters. I will never take on a file of a questionable nature just to get a commission. Life is way too short for that. I also disclose any findings of my background checks on my clients to my lending parters as any potential issues or concerns are best dealt with upfront as apposed to the day of funding.

Clients and lending opportunities come and go on a daily basis and I am not going to throw away my 20 years of doing this and my reputation with my lending partners on a client who wants me to turn a blind eye and just get the deal done. I will disclose fully and honestly the nature of the situation and if the lender is still comfortable with the file then we move toward funding other wise it is on to another file.

Today I am thankful for my relationships with my lending partners, opportunities that exist because of being open and honest and a neighbour willing to join me for a run.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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

May Inflation Rate

The May inflation rate has just set a record that we have not seen since 1983, which was a rate of 7.7%. Up almost a full percentage point since last month when it was 6.8%. Yes we expected it to be above 7% but not by this much.

The biggest contributor to the increase was the price of gas, which was up 48% compared to a year ago. Increased fuel costs put upward pressure on so many things from food, flights, lumber and any other product that gets shipped is now up as a result.

The next step to help cool the sky high inflation is for the Bank of Canada to increase the rates again. The next meeting is in July and this what I fully expect them to do. The US federal reserve recently announced an oversized rate increase of 75 basis points and this is not out of the realm of possibility for the Bank of Canada at the next meeting.

So what do you do if you are still on a variable rate mortgage. Well the fixed rates have now risen to a point well above the current variable rate and the rate for a 5 year terms is now above 5%, starting at 5.09%. With prime currently at 3.70 and most people at prime -1%, so even if prime increases by 75 basis points the smart at math say to just ride it out and that is what I am going to do. You may decide differently that that is up to you.

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 (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

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