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Issue No. 1                "Representing Your Best Interest!!" January  11, 2010
Happy New Year!!! 
 Fixed Rates going up This Week?

Bond yields are still hovering around the 1.20% still leaving us well below the banks comfort zone of 1.60-1.70%...

We have been put on alert by the lenders that rates will move soon, they were awaiting the jobless report, which came in low, but are waiting  to see what effect that will have on the markets and yields, and if no change, FIXED rates will move up at least .25% .
 On a positive note, Variable Closed products are now available at PRIME -.20%!!! as discounting of those prepare us for that increase in the near future.
**Please note, we only advertise full service rates, not quick close products as we do not want to mislead those relying on our rate sheets.
Call us today!! 
Rod Minnes
Managing Broker

Rates as of Jan 11, 2010
Fixed Rate Mortgages    
6 month convertible            4.60%
1 year open                           6.50%
1 year closed                        2.35%
2 year closed                        2.95%
3 year closed                        3.50%
4 year closed                        3.99%
5 year closed                        3.89% 

Variable Rate Mortgages    
5 year closed - Prime* - .20%  ****
5 year open   - Prime* + .80%

Home Equity Line Of Credit

Please call for product availability and rates.

Information from sources deemed to be reliable. Product availability and borrower qualification apply.
*Prime = 2.25%
Rod Minnes
Global West Mortgage

Housing sales across Canada set to reach new highs

Garry Marr, Financial Post  Published: Thursday, December 03, 2009

 Reuters Toronto Real Estate Board said it had its best November on record.

TORONTO - November housing sales across the country are set to reach new highs based on fresh data from the country's two most expensive markets.

The national numbers from the Ottawa-based Canadian Real Estate Association are not due out until mid-December but the Toronto Real Estate Board said yesterday it had its best November on record. Toronto's news came on the heals of a Wednesday release from the Real Estate Board of Greater Vancouver that said sales activity in the city rocketed up 252.7% in November from a year ago.

What the latest numbers will likely mean is an improvement in the national average sale price, which was up 20% in October from a year ago - the largest such increase in two decades. The two cities tend to skew the national average price up or down, based on levels of sales activity.

"You are going to see a very strong national number. It will be another double-digit increase for sure," said Benjamin Tal, senior economist at CIBC World Markets. "You have to remember you are comparing all this against a very low base. Last year at this time we were talking about 1929. This was a dead market."

In November 2008, the greater Vancouver area had a meagre 874 sales. This November that figure was up to 3,083. But there are some indications the temperature in the red-hot housing market is dropping; Vancouver November sales were down 16.8% from October, although the numbers are not seasonally adjusted.

Toronto has a similar story to Vancouver. Canada's largest market had 7,446 sales last month, almost double the number from a year ago, but down from the 8,476 in October.

Despite the lack of listings in the housing market, prices eased last month. The average sale price in Toronto last month was $418,460, a 14% jump from a year ago, but a drop from therecord high of $423,559 reached in October.

In Vancouver, the average price of a home reached $557,384 last month, a 12.4% increase from a year ago. But at that level, prices in Vancouver are actually down 1.9% from the peak reached in May 2008.

Re/Max, one of the country's largest real-estate companies, issued its housing outlook for 2010 and though it still sees a strong market, both housing sales and prices are not expected to maintain their torrid pace. Re/Max says sales next year will climb by 2% while the average sale price across the country will rise to $325,000 for a 2% increase.

"There is a ton of business being done but nothing was being done in November [2008]. The whole world stopped last fall, not just the real-estate world," said Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. "We should expect a very good year with a continued high number of sales. We don't expect significant changes in interest rate levels."

Record low interest rate levels have partially fuelled the market and prices, but so have low inventory levels. In Toronto, inventory levels remain 49% down from a year ago with November 2009 new listings the same as a year ago. In Vancouver, the total number of listings is still down 39% from a year ago.

As for the interest-rate part of the puzzle, the Canadian Association of Accredited Mortgage Professionals latest statistics show consumers could find themselves exposed. In the past 12 months, only 20% of consumers opted for a variable-rate product but the overall numbers show 27% of Canadians still have mortgage tied to prime. "There is no questions rates and affordability have contributed to the market," said Jim Murphy, president of CAAMP.

What is the Best Way to Pay Your Property Taxes?
Over the course of every year, I receive many questions regarding the payment of one's property taxes. Should one be paying your property taxes as a part of your mortgage or on your own with the Municipality or City? The truth is, it does not really matter. You are not better-off or worse-off by doing it either way.

You are probably familiar with the option of paying your property taxes directly to your local municipality. You would either obtain your tax bill in the mail and pay it when it is due, or you would arrange the tax payment to be directly taken from your bank account on a frequency that suits you best.

Paying your property taxes as a part of your mortgage payment can be classified as a convenience for some people, a requirement for other, or both.

On one hand, it is convenient for some people to have their taxes paid as a part of their mortgage. If you are making monthly mortgage payments, your payment would be increased by 1/12th of your annual tax bill. For example, if your annual taxes are $2,400, your monthly mortgage payment would be increased by $200. The municipality would annually send the tax bill directly to the bank, and the bank would amend your tax payments as they increase year after year. You will have a piece of mind knowing that the taxes are paid, and will not have to think about it anymore.

On another hand, some borrowers are "required" to make their tax installments as a part of their mortgage payments. This is usually the case with insured mortgages, especially those with 5%, and 10% down payment. With the low down payment, these mortgages are classified as higher risk to the bank and the mortgage insurance company. In case you ever defaulted on your mortgage and the bank had to sell your property, there is a higher possibility that the bank will not be able to recover enough money from the property sale to pay off their mortgage. And if there was an outstanding property tax balance, the municipality would be paid off before any money from the sale would be used to pay off the mortgage. In cases like this, the bank would prefer to know that your taxes are up-to-date, and what better way to do it than to control the payment of your property taxes.

The payment of your property taxes as a part of your mortgage is set up in the following way. The bank creates a tax account which becomes a part of your mortgage. Every time you make a mortgage payment, the tax portion of the payment is re-directed to that account. Your tax account would grow, payment after payment, and when the time to pay taxes arrives, the municipality would simply debit your tax account for the amount that is due. It is the bank's responsibility to ensure that there is enough money in your tax account at the time when the taxes are due.
In order to do this, the bank would usually increase your tax payment in the first year of your mortgage, typically up to 50%. After one year, or however long it takes for the balance to be built up, the tax portion of your mortgage payment would decrease to the original 1/12th amount, in our case $200.

It is important to note that not all financial institutions offer the option to pay your property taxes as a part of your mortgage. Some of the financial institutions simply don't have the infrastructure to handle the process, while others don't offer it with certain mortgage products, such as Home Equity Lines of Credit.

If you are not paying your property taxes as a part of your mortgage, but are interested in doing it, talk to your bank. It might be one more thing that you can take off your plate.
PREDICTION - By early new year there will hints that rates are on the move up, and by the end of 2010 we will see a 1% increase in fixed and variable rates! In the meantime housing prices seem destined to climb by at least 10% as well nationally! The combination of these factors will mean affordability right now will not be matched in the years coming! Inflation will the target word for 2010-2011 and on!