Monday, December 24, 2012

Holiday Hours

In observance of Christmas, my office will be closed until December 27th 2012. I will be returning all calls and emails then. Have a safe and happy holiday!

Thursday, December 20, 2012

Top 10 Places to Raise a Family In Canada- 2012

I just happened to come across this rather old article but I was amazed at how many cities in Alberta were on this list. Out of Moneysense’s 10 best places to raise a family in Canada, 5 were in Alberta! 

Top 10 Places to Raise a Family in Canada

1. Strathcona County, Alberta (near Edmonton)
2. Burlington, Ontario
3. Calgary, Alberta
4. Red Deer, Alberta
5. St. Albert, Alberta
6. Winnipeg, Manitoba
7. Regina, Saskatchewan
8. Brandon, Manitoba
9. Ottawa, Ontario
10. Edmonton, Alberta

Tuesday, December 18, 2012

Avoiding a financial holiday hangover

The holiday season is in full swing and while this should be a time of great joy, many of us end up feeling tapped out and stressed. Here’s a great article from the National Post offering suggestions on how to avoid a holiday hangover (financially).

Article: Christmas shopping tips

Tuesday, December 4, 2012

No change to prime lending rate- Bank of Canada

How many ways can you say "Bank of Canada stands pat on interest rates"? Nevermind - we're not complaining! Today the Bank of Canada announced - yet again - that it will maintain its overnight rate at 1%. This is good news for variable rate holders, and individuals who are trying to pay down debt. The reasons for the Bank's decisions are reasons we've heard before. From a global perspective, the United States is progressing at a gradual pace but being held back by the "fiscal cliff". Europe is in a recession, and China's growth seems to be stabilizing. Canada suffered a weak third quarter thanks primarily to the energy sector. Housing activity is beginning to decline, thanks in large part to the mortgage rule changes that occurred earlier this year. At the same time, the household debt burden is still growing. The Bank warns that, at some point soon, it will have to withdraw some of its monetary policy stimulus to keep inflation in check. It promises to do so gradually, however, and many experts predict it likely won't happen until the second half of 2013 at the earliest. The Bank's next rate announcement is scheduled for January 23, 2013.

Tuesday, November 20, 2012

Credit reporting errors: don't be a victim!

On The National last night they featured a story about errors on credit reports. While this problem isn’t all that common, when it does occur it can create havoc with your life! I have come across clients with major errors on their report and it did take months to correct. In a few cases, it has delayed my client from being able to purchase a home.

Again, I’d like to emphasize that this doesn’t happen often but it’s always a good idea to check your credit report once a year just to ensure that there aren’t any inaccuracies on the report. You can get a FREE copy of your credit report by filling in and submitting this form to Equifax.

Monday, October 22, 2012

Big ambitions need savings plan to match

Shane and Sarah are in their early thirties and are just starting a family. Their dreams include a bigger house, more children and a cottage but can they afford to have it all? Here’s a sobering analysis of their finances:

Tuesday, October 2, 2012

Mortgages- Harder for the self employed?

Here’s a great article I just came across in the Globe and Mail explaining the ins and outs of getting a mortgage if you are self employed. Most mortgage brokers specialize in this type of lending and can advise you how to best approach the financing of your home...

Article: Mortgages- Harder for the Self Employed?

Wednesday, August 29, 2012

Saving up for a down payment: The young adult's struggle

In an era where rates of savings are down, it appears to be increasingly harder for first time buyers to save the necessary down payment for their first home. Many banks and financial advisers will suggest that it is best to put the largest down payment possible on your first home but, with the rates of savings so low there are some other things to consider. This article, in the Globe and Mail, explores the difficulty in saving for your first home.

I found some of the information interesting, such as, according to the article, the average home price in Canada is $295,000, the median family income is $70,000 and the average age of first time buyers is 34. I would be curious to see some stats for Alberta where the average house price is quite a bit higher than the average. I would also guess that the average family income is higher than $70,000 and that the average age of a first time buyer in Alberta is quite a bit younger than 34.
If you are struggling to get your down payment together, you may find some truth in the article.

Friday, August 17, 2012

Edmonton: A City Well Built

If you're thinking of moving to Alberta's Capital City and you're wondering what we have goin' on check out this great video showcasing the great development happening in Edmonton!

Friday, August 3, 2012

Purchasing a condo: what's the difference between titled and assigned parking?

If you’re thinking of buying a condo, one of the items you may want to consider when choosing one building over another is whether parking is assigned or titled. There is a big difference between the two! Here is a blog article written by one of my Realtor partners explaining the difference...what’sthe difference between titled and assigned parking?

Wednesday, August 1, 2012

Helping adult children with the down payment: helping or hindering?

The parents quoted in this article have some great ideas on how you can help your children with the purchase of their first home whilst teaching them the value of money: Think before gifting the down payment on kids’ home

I'd love to hear your thoughts on parents helping adult children with the down payment on their first place. Is it a benefit or a detriment to the adult child's view on money and responsible borrowing?

Tuesday, July 10, 2012

Condo of the future?

While Toronto's high rises are typically anything but awe-inspiring, this one - due to open in 2017 - is an exception to the rule. I could see myself living here but not in the unit with only 424 square feet of living space :) Click to view this amazing new condo!

Thursday, June 21, 2012

What do the recent mortgage changes mean to your bottom line?

Here a quick calculation on the impact of the recent amortization changes on a $300,000 mortgage using an interest rate of 3.09% (the current five year fixed mortgage rate)...

Monthly payment with a 30 year amortization: $1,276.21

Monthly payment with a 25 year amortization: $1,433.63

This works out to a difference of $157.42 per month!

Want to play around with some more numbers? Go to the mortgage calculators section of my website!


June 21st 2012: In an announcement made earlier today, the Federal Government, via Jim Flaherty has clamped down on mortgage qualification rules. This is the fourth tightening in the last four years and will make it more difficult for the average consumer to buy property.

Here’s a breakdown of today’s changes:

AMORTIZATION: Finance Minister Jim Flaherty said Thursday that he will cut the maximum amortization period for government insured homes to 25 years from the current 30 years

DEBT RATIOS: The government will continue to insist that prospective buyers have the means to afford mortgage payments, property taxes and heating costs on their home. It will do so by setting cost ratios based on household income — a kind of affordability ratio — of 39 per cent for gross debt service and 44 per cent for total debt service (this is down from the current maximum gross debt service ratio of 44% for borrowers with excellent credit)

REFINANCES: Decreasing from 85% of a home’s value to 80%

LARGE MORTGAGES: the government will no longer be in the business of insuring homes that are worth more than $1 million — meaning buyers will need to put up at least a 20 per cent down payment or seek private insurance

Because these changes have just been announced I do not yet have clarification on when these changes will take place or if the two other default insurers (Genworth & Canada Guaranty) will follow suit.
More to come!


Monday, May 14, 2012

Sometimes home is sweeter when it's small

In this age of rising energy costs and increasing housing costs, more people are opting to raise their families in smaller homes. In the 1950s, the average house was approximately 900 square feet - do you think things could get that small again? Read more here...

Wednesday, April 18, 2012

A sobering reminder; can you reasonably afford the house you want?

Just because a mortgage lender (ie. me and the lenders I work with) tells you that you qualify for a mortgage doesn’t mean you should run out and buy the first house for the full amount of your pre-approval. I encourage you stop for a minute and do a few basic calculations to ensure that, should you purchase a home for the maximum amount that you are pre-approved, you will be able to comfortably make your mortgage payment and still afford to live.

The article below does a really good job of explaining how I would qualify you for a mortgage versus how you may want to qualify yourself. This article actually explains CMHC’s mortgage guidelines in a conservative way, explaining that mortgage lenders allow you to use up to 40% of your gross income for housing. The figure is actually 44% if you have excellent credit. That’s right folks. 44% of your gross (pre-tax) income. What this means in reality is that if you earn an annual salary of $60,000 a year or $5,000 a month, and you have excellent credit as well as an overall strong file (and no other debts) you can use up to 44% of your monthly income to go towards your mortgage payment, property tax and heat. 44% of $5,000/month is $2,200.

Do you think that would leave you enough to live on every month? It’s a good question to ask yourself before you start house hunting!

Please keep in mind that the above figures do not account for additional living expenses that you may have including power, car insurance, gas, food, entertainment expenses, cell phone bills, cable/internet/telephone etc.

A reality test for would-be home buyers

By Rob Carrick

From Tuesday's Globe and Mail

Published Monday, Apr. 16, 2012 6:25PM EDT

Last updated Tuesday, Apr. 17, 2012 11:32AM EDT

Never ask anyone who lends money if you can afford a house.

Lenders care about their own money. Not yours. So while you’re thinking about how you’ll manage the cost of a mortgage and all your other living expenses, lenders seek the answer to one single question: How much risk is there that this person will not repay our money on time?

Not that lenders are oppressively picky. The more they lend, the more they make in interest. So there are no high hurdles in deciding who gets a mortgage. Partly, that’s because lenders know they have human nature working for them. If a family is having trouble paying its bills, you can be sure the mortgage will come first.

There are plenty of mortgage affordability calculators online, but they use the lender’s criteria for the most part. So let’s see what we can do to develop some simple rules that will help you understand how well you can manage the cost of owning a home.

Helping us out is Jeff Schwartz, executive director of the non-profit Consolidated Credit Counseling Services of Canada. His agency helps people overwhelmed by their debts, and he knows how problems start. “We see the remnants of people who haven’t kept their financial house in order.”

Where lenders base their analysis on gross income, Mr. Schwartz suggested using take-home pay because it corresponds to what people actually have to spend.

His basic guideline: The monthly cost of your mortgage and property taxes, plus the monthly portion of your annual home insurance bill, should not eat up more than 25 to 30 per cent of your monthly net pay.

Sure, you could push it higher. In fact, Mr. Schwartz said some clients of his agency have housing costs as high as 50 per cent of their take-home pay. “That means they’re eating Kraft Dinner to be able to afford the house they’re living in. They’re making sacrifices somewhere else.”

Capping housing costs at 30 per cent will keep some people out of the housing market, which is fine. They can rent and keep saving to build a bigger down payment. In the housing market, fools rush in.

Those who follow this guideline in buying a home will enjoy three major benefits, the first being that they’ll have room to save for retirement and for their kids’ post-secondary education. Mr. Schwartz figures a goal of saving 10 per cent of your take-home pay is realistic if you cap your housing costs at 30 per cent.

Another benefit of the 30-per-cent ceiling for housing is that it gives you enough financial slack to absorb higher costs in the future. Higher interest rates could push up the cost of your mortgage on renewal, for example. Mr. Schwartz said rising household utility bills are also an issue.

A final benefit of the 30-per-cent rule is that it leaves you with enough money to cover all the usual living costs, as well as a reasonable level of additional debt.

For some perspective on the 30-per-cent rule, let’s check with David Larock, a banker turned mortgage broker. He found this a tough standard and notes that young adults buying homes should find the costs more manageable as time passes and they move into their peak earning years.

Mr. Larock also said that people who buy a smaller, more affordable home may find they have to move in a few years. “Moving is bloody expensive – you have to pay real-estate commissions and land-transfer taxes, you’ve got to move everything. Being ultra-conservative can sometimes end up causing more harm than good.”

The problem with buying a larger home is that it will cost you more, and that means you’ll either have to save a larger down payment or stretch yourself and pay more in mortgage costs. Very likely, lenders will accommodate you on that.

The lender’s key metric for deciding how much you can borrow is the total debt service ratio, which measures your pre-tax pay against the cost of your mortgage, property taxes, heating and any other debts you have. The maximum mortgage payment is supposed to take up to 40 per cent of your gross pay, but Mr. Larock said people with solid but not outstanding credit scores may be allowed to go up to 42 or even 44 per cent.

The first casualty of being over-mortgaged is savings. “Your lender doesn’t care if you have enough money to save for retirement,” Mr. Larock said. “That doesn’t enter their thinking.”


Can You Afford To Buy A House?

Let's say a young couple want to buy a house in a community where the average price of a detached home is $400,000. Here's how they might assess their ability to carry the cost of buying a home. This analysis was done using guidelines suggested by Jeff Schwartz, executive director of Consolidated Credit Counselling Services of Canada. To keep things simple, it's assumed here that both spouses have cleared all their debts in preparation to buy a home.

After-tax-income (using Ontario rates) *

One spouse makes $50,000 $41,113

The other spouse makes $40,000 $34,038

Total household income $75,151

Household after-tax income per month $6,263
The recommended ceiling for spending on a house is 25 to 30 per cent of net household income (covers mortgage + property taxes + insurance)


x 30%


Monthly payment on a $400,000 home bought with a 5% downpayment $1,706 five-year fixed mortage rate of 3.29%, 30-year amortization, includes mortgage insurance costs

Estimated monthly house insurance cost $66 based on a $800 annual premium

Estimated monthly property tax bill $333 based on a $4,000 annual bill

$2,105 Total monthly housing cost

Verdict: Unaffordable

Suggestion: Save a larger downpayment and borrow less, or find a cheaper home

The Bank's View On Mortgage Lending

Banks use the total debt service ratio, which says the cost of housing plus carrying costs for other debts should not exceed 40% of your pre-tax income
Gross monthly household income for the couple in our example $7,500 ($90,000/12)

x 40%

Maximum a lender would let them spend on a house per month, assuming no other debts. $3,000

* Source: Ernst & Young 2012 personal tax calculator (


Further budgeting guidelines for first-time home buyers

Assumption: Family of four

(Data supplied by Consolidated Credit Counseling Services of Canada)

If you borrowed as much as the bank would lend you ($) If you stuck to the 30% ceiling on housing costs ($)

Net monthly income 6,263.00 6,263.00

Monthly expenses
Mortgage 3,000.00 1,706.00

Home insurance 66.00 66.00

Property Taxes 333.00 333.00
Savings 626.00 626.00 10% of net income - a suggested guideline

Other Debt 626.00 626.00 10% of net income - a suggested ceiling

Utilities 313.15 313.15 5% of net income

Food 626.30 626.30 10% of net income

Transportation 1,565.75 1,565.75 25% of net income (auto payments, auto insurance, gas, maintenance, licensing, parking)

Clothing 125.26 125.26 2% of net income

Dining Out/Personal/Pets/Smoking/Misc 313.15 313.15 5% of net income
 Total Expenses: 7,594.61 6,300.61

Surplus/Deficit -1,331.61 -37.61 based on monthly takehome pay of $6,263

Verdict Unaffordable Affordable with modest adjustments, like cutting non-mortgage debt

Tuesday, April 17, 2012

I'm starting to sound like a broken record!

In today’s announcement by the Bank of Canada, the key interest rate has remained unchanged at 1%. This means no change to the prime lending rate charged by financial institutions (and consequently no changes for variable or Home Equity Line of Credit borrowers). The next interest rate announcement is scheduled for June 5th 2012.

Here is an excerpt from the Bank of Canada’s release:

Ottawa, Ontario -
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The profile for global economic growth has improved since the Bank released its January Monetary Policy Report (MPR). Europe is expected to emerge slowly from recession in the second half of 2012, although the risks around this outlook remain high. The profile for U.S. growth is slightly stronger, reflecting the balance of somewhat improved labour markets, financial conditions and confidence on the one hand, and emerging fiscal consolidation and ongoing household deleveraging on the other. Economic activity in emerging-market economies is expected to moderate to a still-robust pace over the projection horizon, supported by an easing of macroeconomic policies. Improved global economic prospects, supply disruptions and geopolitical risks have kept commodity prices elevated. In particular, the international price of oil has risen further and is now considerably higher than that received by Canadian producers. If sustained, these oil price developments could dampen the improvement in economic momentum.
Overall, economic momentum in Canada is slightly firmer than the Bank had expected in January. The external headwinds facing Canada have abated somewhat, with the U.S. recovery more resilient and financial conditions more supportive than previously anticipated. As a result, business and household confidence are improving faster than forecast in January. The Bank projects that private domestic demand will account for almost all of Canada’s economic growth over the projection horizon. Household spending is expected to remain high relative to GDP as households add to their debt burden, which remains the biggest domestic risk. Business investment is projected to remain robust, reflecting solid balance sheets, very favourable credit conditions, continuing strong terms of trade and heightened competitive pressures. The contribution of government spending to growth is expected to be quite modest over the projection horizon, in line with recent federal and provincial budgets. The recovery in net exports is likely to remain weak in light of modest external demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.
The Bank projects that the economy will grow by 2.4 per cent in both 2012 and 2013 before moderating to 2.2 per cent in 2014. The degree of economic slack has been somewhat smaller than the Bank had anticipated in January, and the economy is now expected to return to full capacity in the first half of 2013.
As a result of this reduced slack and higher gasoline prices, the profile for inflation is expected to be somewhat firmer than anticipated in January. After moderating this quarter, total CPI inflation is expected, along with core inflation, to be around 2 per cent over the balance of the projection horizon as the economy reaches its production potential, the growth of labour compensation remains moderate, and inflation expectations stay well-anchored.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term. The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.
Information note:
A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 18 April 2012. The next scheduled date for announcing the overnight rate target is 5 June 2012.

Tuesday, March 20, 2012

An important reminder: Don’t assume a pre-approval is set-in-stone

Bidding wars have become commonplace in hot markets across the country - and so have "clean" offers, or those that are free from all conditions. While forgoing something like an inspection is risky enough, at least buyers know what they're getting into. The most dangerous waived condition, in our opinion, is the condition of financing - primarily because many buyers assume that they're safe with merely a preapproval.

While a preapproval provides you with a rough estimate of how much money a bank would be willing to loan you, it's based solely on your income and level of debt. Since preapprovals are usually requested before a property is bid upon, the bank has no way of taking the property into account - so the financing offer isn't etched in stone.
A bank wants to know that the money it's investing is tied to a good property - one that is being purchased for fair market value and is in good condition. If you get caught up in a bidding war and end up submitting a condition-free offer, it's quite possible that the bank may not come through with the financing it tentatively promised - even if the price falls within the range of your preapproval. After all, if the bank thinks you drastically overpaid for the property, it's not going to give you a mortgage that might be worth more than the value of the home.

In addition, mortgage underwriting departments don’t review your supporting documentation (employment letters, paystubs, down payment confirmation) until you have written an offer on a home. In addition, banks will not submit your file to the mortgage insurer (CMHC, Genworth etc) until you have an offer on the table. If there are any issues with your paperwork or the mortgage insurer declines your file you may not get the mortgage.

That's why it's so important to include that condition of financing in your offer - or at least consult with your mortgage agent before opting to leave it out. While bidding wars are stressful experiences to say the least - especially if you've been through a few of them - so is being locked into a home offer you can't afford. Not only will it leave you scrambling for financing at the last minute (and potentially paying a way higher interest rate than you anticipated) but, if you can't find any financing, you could end up losing your deposit and potentially being subject to a law suit.

In your opinion, which scenario's worse?

-Axiom Mortgage Partners

Thursday, March 15, 2012

A great new service for the Edmonton area...

I heard this company on the radio this morning and thought it was such a great idea! I’m actually pretty surprised no one else has thought of it up until now.

We all know what a pain it is to organize all of your bottles and cans, heave them in your car and head down to the bottle depot only to wait in line. The process wastes your precious weekend. Thankfully, this company makes recycling easy! They will pick your bottles up at your door and leave you with cash! Contact them directly for more information or to arrange a pick up. I have a feeling they are going to be VERY busy...

"We are proud to be Edmonton's first company to offer bottle pickup services to both the residential and commercial markets. The Bottle Depot at Your Door is now expanding to serve the greater surrounding areas of the capital city as well.

We offer ultimate convenience for you to recycle your bottles and cans and receive cash without visiting a bottle depot."

No Lines. No Hassle. No Contracts. No Fees.

Bottle Depot at your Door

Monday, March 12, 2012

Demystifying mortgage prepayment penalties

When signing a new mortgage, it's easy to get caught up with things like rate and monthly payments, and overlook the features we may need down the road - like prepayment privileges. It doesn't help that, up until recently, financial institutions have been allowed to glaze over the details regarding prepayments - and their penalties.

Thanks to a new Code of Conduct created by the federal government and the Canadian Bankers' Association, however, the details of prepayments must now be front and centre on any mortgage document. In addition, should you decide to go ahead with a prepayment - or close or refinance your mortgage before your term is up - your financial institution has to clearly explain how much it's going to cost you, and show you their calculations for coming up with that number.

In a nutshell, here are some of the details of the new code - which must be adopted by all federally regulated financial institutions within the next six to twelve months:

Part 1: Information Provided Annually
This section of the code basically requires financial institutions to offer you regular updates on your loan. Every year, your bank must:
- outline what prepayment privileges are available to you, as well as the dollar amount you can safely prepay on your mortgage in the given year.
- outline how it will calculate your prepayment penalty, should you opt to go over your allotted amount.
- offer a customized portion of the annual update that will outline information on your particular loan (such as amount left on it, the mortgage interest rate, the remaining term, how the bank calculates the Interest Rate Differential, and where you can find the comparison rate) that will allow you to estimate the costs of paying it off early.

Part 2: Prepayment charge information
Should you opt to go ahead with a prepayment that is more than your annual allotted amount, your bank must:
- clearly outline the prepayment charge
- explain its calculations for coming up with that prepayment charge
- any other charges that may accompany the prepayment charge

Part 3: Enhancing borrower awareness
Financial institutions must also clearly explain - either on their websites or elsewhere - details about your mortgage, including:
- the difference between fixed versus variable
- the difference between open versus closed
- how to pay off your mortgage faster
- how to avoid prepayment penalties

The new code also requires banks to have a toll-free number that mortgage borrowers can call should they have questions about their prepayment penalties. If you would like to learn more about the new Code, feel free to view it on the Canadian Bankers' Association website, or give me a call!

For more information on the announcement click HERE!

Thursday, March 8, 2012

Variable rate mortgage holders rejoice!

In an announcement earlier today, the Bank of Canada has held steady on its key interest rate making this the 12th announcement with no changes...the next scheduled interest rate announcement is April 17th 2012.

Article: Bank of Canada rate holds steady for 12th time

Monday, March 5, 2012

Wary of catastrophe, experts provide tips for future condo buyers

In light of the recent news regarding several condominium complexes in Alberta that have had major issues with the construction of the buildings here is a great article on purchasing a condo! If you are considering buying a condominium this is a great story explaining what background research you should do before signing on the dotted line.

Article: Wary of catastrophe, experts provide tips for future condo buyers

Friday, February 24, 2012

Sun and sand!!!

I will be away on vacation until Monday, March 5th! If you require assistance in my absence please contact Roberta Hardern at 780-909-2265 or email me at (my emails are automatically forwarded to her).

Have a great week!

Thursday, February 23, 2012

Unhappiness & the Fear of Not Fitting In

In light of Mark Carney’s latest warning about the high levels of consumer debt I offer you a sobering article from Gail Vaz-Oxlade about what we really need in life and why we buy so much stuff...

Unhappiness & the Fear of Not Fitting In

by Gail Vaz-Oxlade

Social pressure to conform isn't in your imagination. It’s real.

If it’s such common sense to only spend what you can afford, why do so many people spend money they don’t have – use credit, in other words – to buy things they want?

Think about it for a minute? Why did you whip out your credit card and pay for that meal in a restaurant, pair of new shoes, or groceries? Why did you buy that big screen TV on a buy-now-pay-later program? Why did you use your line of credit to pay off your credit card? Be honest. Why?

People want to maintain lifestyles they can’t afford. Whether it is the social pressure to conform, our own sense of entitlement, or a disregard for the potential risk we place ourselves in when we use credit to buy STUFF, we’re delusional.

There are actually people out there who believe that using credit is “normal”, that it’s what they should be doing. After all, their parents did it, their brother’s doing it, so is their best friend. In fact, most of the people they know are doing it.

It’s as if people are afraid to just be. They have to drive the right car, go on an annual cruise, have new leather furniture, watch a high-definition, big-screen television, eat out three or four times a week, drink the best Scotch, or consume store-bought coffee every day. And they’re willing to exchange hours, days, months, years of peace of mind for the momentary high that comes with the new acquisition. Whazzup with that?

Social pressure to conform isn't in your imagination. It’s real. But if you submit, if you’re willing to live a life of smoke and mirrors, if you want it ALL right NOW, then you need to accept that you’re creating a miserable life for yourself. It’s only a matter of time before the piper comes a’knocking.

One way to gain some perspective is to ask yourself (and your partner) what it is you really want in life. If you only had six months left on this sweet earth, what would you want to be doing? Would you be shopping for new furniture? Would the kind of car you drive really make a difference? How about the handbag you’re carrying?

I often talk to my daughter, Alex, about how important it is to live a worthwhile life: A life that brings challenge and love, that allows you to share, to laugh, and to be happy.

So, what are the things that make your life worthwhile? And what are you doing to put more of the things that make you happy into your life?

Want a great book to read on happiness. Read The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom by Jonathan Haidt, Associate Professor of Psychology University of Virginia. Terrific book. Lots of great ideas on what makes us happy and what you can do to be happier.

If you love your life (as opposed to your stuff), relish the time you spend working, look forward to seeing the people you share your space with, and feel as if you’re making a difference, I don’t think the kind of car you drive, whether you have a big-screen TV, or how often you eat in a fancy restaurant will mean much. If you can focus on creating the life you want, taking small steps to achieve your goals and finding a way to laugh while you’re doing it, I’m willing to bet you won’t even miss your credit cards.

As Jonathan Haidt’s website ( says, "Happiness is not the shallow state of feeling pleased and chipper all the time. Happiness is the state of a human being that has achieved cross-level coherence within herself, and between herself and the people, challenges, and institutions around her. Happiness comes from between."

Friday, February 10, 2012

Mortgage rates still lower-than-ever!

The big banks may have cancelled their 4 year rate promo at 2.99% early but the lenders I work with haven’t!!! If you want great rates and professional service deal with a reputable Mortgage Broker!

Article: Big Banks cancel rate promotions early

Last Updated: Feb 10, 2012

1 YR FIXED TERM 2.75 %
2 YR FIXED TERM 3.25 %
3 YR FIXED TERM 2.89 %
4 YR FIXED TERM 2.99 %
5 YR FIXED- Standard 3.29 %
5 YR FIXED- Value Mortgage 3.19 %
5 YR FIXED- 5% Cash Back 5.29 %
VARIABLE- 5 Year Term 2.90 %
7 YR FIXED TERM 3.99 %
10 YR FIXED TERM 3.99 %

Mortgage Success broker rates represent the typical discounted rate available to borrowers with strong credit, qualifying income and assets, on conventional real property that meets lending value requirements. This data is for information purposes only and should not be relied upon without verification by contacting your Mortgage Associate or the indicated financial institution. Rates are subject to change without notice, are compounded semi-annually and not in advance. In unusual circumstances lender or broker fees may apply.

Monday, January 30, 2012

HBP vs TFSA to buy your first Home

When it comes to scrounging up a down payment for a first home, many homebuyers take money where they can find it. If they've been socking away money in their RRSP for the last few years - and reaping the rewards of tax savings on the money - chances are there isn't a lot of money saved in other places. It seems logical, then, to take advantage of the government's Home Buyers' Plan and dip into those retirement savings, use them as a down payment, and repay the money over the next 15 years. After all, retirement is still most likely quite a ways away, right?

This article in the Financial Post questions whether it's really wise to sacrifice the growth of your retirement savings in favour of buying a home today.

It gives the example of a 30-year-old individual with RRSPs valued at $30,000, earning 8% per annum on average. If there were no HBP withdrawal, the RRSP would grow to $139,829 by age 50 and $301,880 by age 60. But take $20,000 out and repay it over 15 years and the RRSP would be worth $92,215 at age 50 and $199,805 at 60.
Instead, the article suggests taking advantage of a TFSA and drawing a down payment out of this newer investment vehicle. While there are definite pros to using a TFSA, in most cases the government's Home Buyers Plan is just the more logical option. Here's why:

1) Tax savings when you need them.
Let's face it - most people purchase their first home relatively early in their working life. When you're not earning a lot, you're not saving a lot either. Socking money away in an RRSP is great primarily because of the tax return you receive every spring - money you can either put back into your RRSP, or spend elsewhere. Either way, it's a great incentive - and great motivation to choose the RRSP over the TFSA.

2) You can only save so much.
To go with the above point, early in your career, there's only so much money to go around - and you can only save so much. While the article suggests using $20,000 from a TFSA and combining it with $25,000 in the HBP to put towards a new home, realistically most people just don't have this type of cash.

3) Retirement is still a ways off.
While you will lose some of the advantages of compound interest by dipping into your retirement savings, there is nothing stopping you from increasing your RRSP contributions down the road to make up for the loss. You also aren't obligated to take the full 15 years to pay back the funds you borrowed under the HBP. The quicker you pay it back, the quicker you can start saving again.

4) A home is an investment, too.
Yes, dipping into your RRSP to purchase a home will cost you in accumulated growth. But by using that money to purchase a home, you're essentially diversifying your retirement nest egg. If your home is a good investment - that will either increase in value or, at the very least, keep its value over time - you're in a good place. Come retirement, you'll likely be mortgage free with a nice piece of equity on your hands.

Pulling your down payment from an RRSP versus a TFSA also has a lot to do with your personal financial situation. In many cases, a TFSA makes more sense. To find out what's right for you, give us a call and we'll be happy to help.

Thursday, January 12, 2012

A glimpse into the future: The 2012 Realtors Housing Forecast Seminar

Yesterday I had the pleasure of attending the annual conference at the Northlands Expo Centre. I love attending this annual event because it gives me a quick overview of what’s been happening in the real estate market in the last year and also gives me some educated opinions on what to expect in the coming years.
Here’s are some highlights from the forecast:

Speaker 1: Edmonton’s Strength, Peter Howard, President and CEO of the Canadian Energy Research Institute

-nothing really new here. Alberta has oil. This translates to jobs and money. Lots of both!
-Peter explained some of the projects currently in the works as well as projects slated for future development. The amount of money and the size of these projects is staggering.
- Here’s an excerpt from one of the presentation slides: If further development of the oil sands continues, the economic impacts of the existing and currently under construction projects would continue into the future
• Generating $4.7 trillion of GDP Growth
• Direct employment would grow from 132,000 to 533,000 jobs by 2035
• Royalties to the Alberta Government would grow from $3.5 billion to $60 billion per year by 2020. This is based on the assumption that crude oil prices will continue to rise

Speaker 2: Edmonton’s Economic Outlook in the Alberta Context, John Rose, Chief Economist, City of Edmonton

-Canadian domestic conditions remain good, Alberta continues to outperform the national average
-Slower US expansion will slow growth, particularly in Eastern Canada
-2011 has been a solid year for GDP growth & outstanding employment growth in Edmonton
-Alberta’s labour market is beginning to tighten. Unemployment rates that go significantly below 5% will trigger wage increases and higher inflation. Most of the jobs lost in 2008 & 2009 have now been recovered

Speaker 3: Gary Klassen, General Manager of Sustainable Development, City of Edmonton

This was one of my favourite presentations as I really love to learn about the new and exciting projects the City has on its radar. Listening to this presentation made me realize how lucky we are to live in a place with such prosperity and development. John spoke about a few cities in the United States which have decreasing populations and the problems that come with it.
We are experiencing the complete opposite in Edmonton, and we have money to spend on a variety of exciting projects such as:

1. City Centre Redevelopment: there is a 15 month master plan process currently underway to revitalize Edmonton’s downtown. There is a lot of money and time being spent on a variety of projects in our downtown core. These include:

a. the LRT expansion which is currently underway which includes a 30 year plan to extend the LRT in six different directions within the city. The new look and feel of the expansions will be more European in style and feel which will include LRT tracks that weave through communities using low-floor technology instead of the old style where the tracks cut communities in half

b. Proposed Sports & Entertainment District: new arena project: this project has been hotly debated in the last few years but now has the go-ahead

c. The Quarter’s downtown: I actually heard this new project being discussed on CBC radio this morning. It is a city initiative to revitalize the area east of Jasper Avenue & 97th street. Apparently when the Hudson’s Bay Company moved out of this area in the early 1900’s the neighbourhood became rundown and has been so ever since. The City has spent a lot of money purchasing the land in this area and are upgrading the service lines within the area to get it ready for the future. The plan for this area includes a community housing around 20,000 people in a mixed use area including mostly pedestrian streets and mixed use homes including artist live-work spaces. I am really excited about this project! It’s about time something promising happened to this prime land in the heart of our city

d. West Rossdale: the former power plant (and historic building) will be transformed into a “diverse, sustainable neighbourhood with a broad range of commercial, retail, public parks and other amenities”

e. Other notable projects include: the new, soon-to-be-built, museum downtown and the re-development of the old city airport to a new sustainable neighbourhood

On a side note, I also heard on the radio this morning that the developers that built the Icon Towers on 104th Street have just purchased a surface parking lot on 104th street and 102nd avenue to build another high-rise mixed-use building. 104 Street is one of my favourite places to be on a Saturday morning in the summer...looking forward to seeing this new project break ground. It’s already a great street, sounds like it’s going to be even better!

I am so excited about all of these amazing projects! It’s exciting to live in a place that is growing and improving!

Speaker 4: Economic and Financial Trends, Mike Drotar, VP Treasury, Servus Credit Union

Mike’s main points regarding Canada’s economy were:

-economic growth forecast 2012 +2.3%, 2013 +3.0%
-Inflation at manageable levels 2.1%, midpoint of target range 2012/2013
-Bank of Canada held steady on rates since September 2010. Next move likely in 2012/2013.
-Household debt levels closely monitored and many are at risk in a rising rate environment
His thoughts on the global economy?
-USA faces considerable challenges to regain its influence
-American banking system is stabilizing, a requirement for full recovery
-European banks under tremendous stress, painful austerity measures necessary
-Oil prices expected to remain elevated, average in the triple digits

Speaker 5: Edmonton Housing Analysis, Richard Goatcher, Senior Market Analyst, Canada Mortgage and Housing Corporation

• Full time employment grew rapidly in 2011- expect the housing market to follow in 24-48 months. The average weekly earnings remain on an upward trend, Alberta’s net migration was up in 2011 (still below peak levels).

• Edmonton’s Resale Home Market: ownership costs remain below the peak levels seen in 2007 & 2008 (this makes sense as prices and interest rates are lower than during 07 & 08). The current market still favours the buyer meaning price gains will remain modest in the short term.
• Edmonton’s New Home Market: prices to edge upward in 2012 but to remain below peak levels

• Edmonton’s New Home Market (Multi-Family): 2012 to remain close to 2012 levels, units under construction up 12% yr/yr in November, complete and unabsorbed unts edging downward in 2011 Q4

• Edmonton’s Rental Market: activity levels of rental housing starts have rebounded in 2011 and are higher than in 2007. Improved demand for rental properties have helped vacancy rates come down, as vacancies decrease rents will move upward.

Speaker 6: MLS® System Market Forecast, Doug Singleton President, Realtors ® Association of Edmonton

Forecast (Commercial):
• Industrial and commercial development plus refurbished properties create churn
• Increasing population creates more “Mom & Pop” business start-ups and warehouse condos
• Realtors® continue to serve investors, entrepreneurs

Forecast (Residential Sales, Single Family Dwellings):
• New home construction continues to provide opportunities at the outer edges of the community
• Strong demand for home renovation materials
• Strng preference for a “home of their own” with increased privacy, independence and the “joys” of home ownership
• Labour shortage in Alberta will create in-migration and maintain the demand for home sales

Forecast (Residential Sales, Condos):
• Condo purchase – a lifestyle decision
• Singles, young couples, empty nesters, first time buyers
• Families prefer their own yard and independence

Presentation Summary:
• Housing market- stable with normal patterns (seasonal)
• Prices- fluctuate in narrow range but trending up
• Sales- steady in harmony with seasonal trends
• Average days on market may drop t0 45 days if inventory drops

My two cents: as you can tell from the above, this was a very positive forecast for 2012. All signs indicate that Alberta is a great place to live and work. Interest rates remain at low levels, the real estate market is healthy, and the economy is robust. The future of this city looks bright!

Thursday, January 5, 2012

Interest Rates down again!

Hope you’ve all had a great Christmas and are having a very Happy New Year so far! Wanted to let you all know that the five year interest rate has come down yet again, we are now sitting at 3.29% for a five year, fixed, closed rate!!! I have NEVER seen five year rates this low- if you are considering buying or refinancing now might be the best time to do it!

Link: interest rates