blog
Dear Clients,
Well I guess no news is good news for low interest rates. Prime did not move this week and the Budget is saying - we are afraid of upsetting the apple cart by making any real changes - other than to cut back on their spending. Europe is getting really shaky with Greece Bankrupting and Portugal is holding on by their finger nails. The Commercial paper which was secured and insured is coming down the chute right now and we can expect troubles in the States to continue to grow by leaps and bounds.
It seems like a lot of reporters are writing articles like crazy but most of them make absolutely no sense. If I find something this week that is of real value to your knowledge level we will send it over.
So stop reading the headlines and sit tight we are now moving well below prime. The economic situation just continues to get bleaker and dollar is staying high in the high .90's
Still absolutely not recommending any lock-ins as the rates are steadily dropping. There is nothing supporting any sustainable growth in GDP. The last 1\4 of 2009 is not continuing this quarter.
So keep on doing the RATE DANCE (thanks to one of my favorite clients for that one) you are doing a great job at saving thousands and thousands of dollars and paying down your mortgage at record speed.
If you are .60 above prime or higher please contact us about dropping your rate. If you also know of anyone who should refinance to pay out lines and cards they should do so now as we only have 3 weeks left to use the 95% financing for this.
Prime still at 2.25%
Lock in rates (not recommending lock in)
3 yr 3.45%
4 yr 3.84%
5 yr 3.89%
Have a fabulous weekend and get a tan!
Suzanne Boyce
Broker\ Owner
blog
Dear Clients,
Take your time reading the attached as you will get a lot of information on what is happening below the border and how it is going to affect us in Canada. To shorten down for you - the increase in manufacturing we have been seeing recently is being created by companies replenishing inventories that they diminished in the last year due to the uncertainties in the market. No one wanted to be paying the carrying costs on surplus merchandise. It may take some or most of this year to produce the stock needed but once that is accomplished the demand will level off. So what we are seeing right now is not sustainable.
The recovery is going to be a long and painful one which you will notice in the last few weeks. The banks are being nudged by the Bank of Canada to below prime rates as the central bank refuses to move to 0% so the banks have to lower their spread on borrowing at .25 and lending rate.
So if you have been sitting on the fence about lowering your interest rate now is the time to make a move. Give us a call at the office # below or email us back and we can work out the #s for you.
The last line says it all - that the Bank of Canada will not be able to "tighten" which means they will not be able to raise prime from .25%.
All the best, Bank prime is still at 2.25%
Lock in Rates - not recommending locking in at this time
3 year 3.55
4 year 3.89
5 year 3.99
Suzanne Boyce
blog
Dear Clients,
Welcome to the new year and a great one it is going to be. The mortgage market did not slow down over Christmas, nor in the first two weeks of the year.
Many people are listening to the advice of the government to clean up their debt outside their mortgage and the way to do that is to refinance. As many of you know this can really change your way of life when you are no longer accumulating debt and even decreasing your debt at a very rapid rate. These people come to us from all age groups and lately we have been able to reduce their monthly payments as much as $1,700.00! Which means they have removed about $1,200.00 in interest payments only per month.
This is equal to $72,000 in excess interest to the banks in 5 years alone. This can make life changing difference to a family. If you read below the urgency of moving quickly on a debt consolidation is here.
The other great news is we are growing again. I wanted to inform you, our clients, we are searching for someone to become the second assistant in the office so we will be able to meet our service commitments to our clients. If you know of anyone searching for a growth position who meets the following description please feel free to pass this along.
- Excellent organizational skills
- Excellent people skills including communication skills
- Completed courses on Microsoft Office
- Some knowledge of real estate, real property law or financing is a plus for the applicant but not a must.
- Must have strong work history and desire to succeed in a demanding and rewarding workplace.
Above is attachment from Benjamin Tal is the news of hard times ahead. If we thought Dubai going bankrupt was bad news out in the last 24 hours that China may be in the same position which could be exposed very soon. Unfortunately I really can not get a handle on the repercussions of them holding trillions in US debt. Any feed back from you on this especially with back up articles would be welcome.
All the best in the new year and keep those referrals coming!
Prime is still at 2.25%
Lock in rates
3 yr 3.55%
4 yr 3.89%
5 yr 3.99% not recommending any lock ins at this time - just variable.
Regards,
Suzanne Boyce
Broker\ Owner
blog
Dear Clients,
Now I know why the stores start so early, it would feel like they just did the decorations and now there is just a week to go!
I thought it would be good to do a recap on this year's mortgage bonus packages that most of you are on.
There are three Variable Rate categories in our firm now.
- The Old Timers: those of you who have below prime mortgages from before the "Collapse". Congratulations to those who took our advice and stayed put even during the 6.25% prime rate. It certainly has paid off. Now almost 2\3rds of your payment is directly against principal. You can send a couple of thanks to your favorite deity this holiday season.
- The Collapse Clients: who financed during and shortly after the "Collapse" who are above prime. Prime has been moving down from 3.5% since the first of January 2009. You have dropped about 1.25%.
- Newbies : those who have come in recently and we are now edging to just below prime.
Congratulations to the Old Timers as it looks like you are going to reap the benefits for the next year or two. Also if your renewal is coming up in the next couple of years you will still be below prime!
Watching closely for Collapse Clients. Yes those of you well above prime like +.80% to +1.25% over prime it is definitely time to pay the penalty and drop into the low prime rate. For those at +.60% over I would like to see another .10% drop in the variable rate to make the penalty pay. Those under +.60% over just sit for now.
Newbies- hopefully you are going to make it to the Old Timers Category!
You are hearing a lot of hullabaloo in the news about the danger of low interest rates and you may have seen a couple of interviews on CHCH that I did last week concerning this.
Unfortunately people are not getting more than a 30 second clip and the point is either lost or misinterpreted.
Here at The Personal Mortgage Group we do look into the future of our clients and prepare you for the unexpected by building in the flexibility you need to stay safe in the event of change in circumstance or interest rates. We are also contacting you regularly to make sure you understand the risks of developing or maintaining debt outside your mortgage. This is what the Bank of Canada was warning about and will continue to do so. For those who still do not want to listen they could pay dearly.
In the above article they are noting that because of the high dollar along with a high unemployment rate recovery will be well into 2011. When unemployment stays below 8% we may see things start to change.
Again, one of the best Christmas gifts you can give someone in your circle of Family and Friends is share with them your good fortune of resetting your financing to save you thousands or making the right financial decisions when buying your home.
Lock in Rates (not suggesting locking in at this time)
Prime still at 2.25%
3 yr. 3.55%
4 yr. 3.89%
5 yr 3.99%
All the best!
Suzanne Boyce
blog
Dear Clients,
Sorry, I guess our interview on CHCH was aired one hour earlier than expected for those of you watching for it.
Below is an article about prime staying at .25% (Bank of Canada overnight rate) until June 2010 so no change there.
Inflation is really the only thing that can budge the rate up and the experts are predicting possibly the second half of 2011.
Above attachment is on GDP in major Canadian cities. You will find the charts most interesting but note: the index is momentum based so if there has been a major swing in the factor you will be seeing this in the chart not changes in the oval economic activity so READ CAREFULLY.
I guess Christmas is now looming! I think it is going to be one of the best yet. People are gradually going back to what is most important.
LOVE not CREDIT!
Cheers
Suzanne
LOCK In Rates
3 yr 3.55%
4 yr 4.00%
5 yr 4.09%
Prime 2.25%
We are not recommending locking in at this time
Economic recovery is 'solidly entrenched': BoC
Paul Vieira, Financial Post
OTTAWA -- After months of uncertainty, the economic recovery now appears to be "solidly entrenched," the Bank of Canada said Tuesday, indicating its forecast for growth should unfold as envisaged.
Still, in its latest interest rate announcement, the central bank reiterated, as expected, its conditional commitment to keep its key policy rate at a record low 0.25% until June 2010 as inflation is still not expected to hit its preferred 2% target until the second half of 2011.
Recent data - from retail sales to a stunningly strong jobs report for November -- have painted a mostly cheer picture of the Canadian economy, analysts say, even though third-quarter GDP growth of 0.4% annualized came in well below the central bank's 2% expectation.
Since the central bank's latest economic forecast in October, "global economic developments have been slightly more positive and the global outlook has improved modestly," the bank's governing council said in its statement, adding though that "significant fragilities" remain.
The central bank said the composition of economic growth is unfolding as expected, highlighted by a shift toward stronger domestic demand and less reliance on exports.
"The main drivers and the profile of the projected recovery in Canada remain consistent with the bank's [outlook]," it added. "The bank continues to expect economic growth to become more solidly entrenched over the projection period and inflation to return to the 2% target in the second half of 2011."
According to the central bank's outlook, Canada is expected to grow 3.3% this quarter, followed by expansion of 3% next year and 3.3% in 2011. Predictions for strong growth gained steam late last week when data indicated the Canadian economy added 79,000 jobs in November.
Further, the central bank on Tuesday played down the impact of the stronger dollar, even though it acknowledged it remained a key risk to its forecast, and "could act as a significant further drag" on growth and inflation. The stronger loonie, which has advanced as much as 25% this year against its U.S. counterpart, led to a surge in imports in the third quarter - resulting in net exports acting as a drag on the economy of roughly 5.3 percentage points.
Since the last rate announcement, however, the dollar has on average traded a couple of cents below the central bank's working assumption of a US96¢ loonie.
Most analysts were looking for any change in nuance in the bank's statement - in particular a hint or two that it might move before its conditional pledge to keep rates at a record low until June 2010 given the surge in domestic consumption as households take advantage of record low borrowing costs.
Instead, the central bank reiterated that its target rate of 0.25% "can be expected" to remain intact until the end of the second quarter of next year. The pledge is conditional on inflation hitting the 2% target in the third quarter of 2011, as the bank expects.
The last time the bank raised its key policy rate, to 4.5%, was in July of 2007 - and shortly afterward the first signs of the credit crisis emerged.
Some economists, such as Ryan Brecht of Action Economics, expect the central bank to begin hiking its policy rate, and aggressively, starting in the second half of next year.
In a note released Tuesday morning, Mr. Brecht, the firm's senior North American economist, said he envisaged the Bank of Canada raising its target rate by 175 basis points before December of 2010, for a policy rate of 2%, or "more normal levels." Still, that would be below the 3% level in September of 2008, when Lehman Bros. collapsed, or the 4.5% peak hit more than two years ago.
Financial Post
Suzanne Boyce
blog
Hello everyone and Happy "One Month Before Christmas"!!
Yes, we all have exactly one month to get ready. Isn't this great service? Not only do we remind you when to lock in...we remind you when to start your Christmas shopping. We hope that you have a wonderful holiday season getting together with friends and family.
We'd like to begin our newsletter by taking some time to thank all of our clients who work in health services. We realize how hard you have been working during this H1N1 crisis and appreciate your efforts out there on the front lines. Thank you.
News from the CAAMP Conference
We recently attended the CAAMP Conference in Toronto where thousands of mortgage professionals and lenders gathered to exchange information and attend workshops to keep up to date on trends in the industry and educate ourselves on new tools and opportunities available for us to assist you in creating your mortgage solutions.
It was a very exciting event and lots of fun meeting with the top executives on the 56th floor of the CIBC building overlooking the lights of Toronto. The following is the latest news from one of those top executives , economist Benjamin Tal.
Mr. Tal basically supported what we have been saying in our previous emails. That Prime will stay low well into the end of 2010. Below are some key quotes and observations that he shared with the crowd....
The Credit Crisis
- The TED spread - which is the key indicator of credit market liquidity - is back to a healthy 25 basis points, after hitting 500 last fall.
- " This recession is over...period...but we will pay heavily for what the U.S. Fed is doing." ( this means that interest rates will rise and deficits will drag on Canada's economy so we will have to be prudent and ready for rates to rise)
- There will be another rate of mortgage "resets" in the U.S. but there will be much less of a rate shock as the new rates will be closer to the teaser rates that the owners are paying now.
- Fewer of these loans are securitized than in the subprime crisis.
- Consumers will slow their spending AND borrowing.
- U.S. monetary policy is dictating Canadian policy.
- The Bank of Canada will have not choice but to raise rates until the U.S. does. Otherwise our dollar would rise and threaten Canada's export economy.
- Ben predicts that Canadian rates will not rise as much as in the U.S.
Real Estate
- In terms of real estate, Mr. Tal mentioned, " We should not be in a seller's market in the 9th inning of a recession" BUT there is no information indicating that there will be a real estate bubble.
- Expect a 2% to 3% increase in rates, starting no earlier than Q3 of 2010 and rates usually go up faster than they come down.
Canada Stronger than our Neighbours to the South
- duration of unemployment in Canada ( which is as important as unemployment rates) is much lower than in U.S.
- This means that Canadians can more easily find new jobs and continue to pay their mortgages.
- Canadians have three times more cash savings than Americans per capita and this cash is waiting to be redeployed.
- Income and consumer confidence is rising twice as fast in Canada as in the U.S. and it is all about consumer confidence
- Canada will outperform all other G7 countries in GDP growth in 2010.
All in all Mr. Tal's news was relatively positive for Canadians. We will continue to recommend the Variable Prime mortgages and keep a close eye on any shifts in rates. Continue to read your Variable Rate newsletters and pass them on to friends and family and we'll keep you posted on where things are going.
Prime rate is the same at 2.25%
Lock in Rates (lock in not recommended at this time for those at + .80% and over can contact the office to review advantages of dropping to Prime at the time)
3 yr 3.55%
4 yr 4.00%
5 yr 4.09%
Suzanne Boyce
