Why you might want to buy real estate sooner than later.

Nicole works for you, not the lenders.

Warning: Ottawa may be planning to make it harder for you to get a mortgage.

Thanks to historically low interest rates and a recovering economy, Canadians are buying homes at a record pace. According to the Canadian Real Estate Association, home resales hit an all-time high in December, up 72% from December 2008! Of course, this is great news for the housing industry and overall economy, but the federal government is sending signals that it would like Canadians to proceed with caution.

The Bank of Canada has already announced that it will likely start raising interest rates by mid 2010. Within a couple of years, mortgage rates could be as much as one or two percentage points higher. What worries the government is that some of today's homebuyers are taking on mortgages they can just barely afford, and when rates start rising, payments may be unmanageable.

To encourage buyers not to get in over their heads, the government is hinting that it may take steps to cool down the housing market, if necessary. Possible actions being discussed include increasing the size of the down payment (currently at 5%) and/or reducing the maximum allowed amortization (currently at 35 years). Both of these steps could potentially cut many home buyers out of the market.

If you're considering buying in the next year, you may want to act sooner rather than later. Buying now means taking advantage of record low interest rates, a manageable down payment and a more flexible amortization. If you wait too long, all of these advantages may be lost and homeownership could suddenly be out of reach.

As your mortgage advisor, I'd be happy to analyze your needs and present you with an affordable plan, whether you're buying for the first time, renewing or refinancing. Please talk to us today before Ottawa closes the door!

BMO Puts More Weight Behind Fixed Rates

*Article from BMO website

BMO issued a release last week reiterating how variable-rate mortgages have outperformed fixed mortgages 82% of the time in the last 30 years.
BMO then went on to suggest that we may be in one of those infrequent periods where a fixed rate could win out. It said:

"Canada has been in a long-term declining rate environment since the early 1980s."

"The Bank of Canada's overnight rate is now as low as it can go, so there is no further downside for variable rates. The surprises can only be to the high side from here."

"Fixed rates were advantageous during only two recent periods - through the late 1970s and in the late 1980s; in both cases ahead of a period of rising interest rates, as is the case now."

After qualifying its position with the risks of going fixed, BMO ends by saying, "BMO Economics' view is that variable rates will climb only moderately, but by enough to tilt the balance in favour of current fixed rates."

So it appears BMO's scale has now tipped to the other side because its October rate analysis gave the edge to variable mortgage rates.

This is an interesting shift by a major player.

Current Best Mortgage Rates

The Mortgage Centre Rate Update - February 8th, 2010

		Closed	Quick Close Specials
First Mortgages Second Mortgages Also Available	6 month	3.85%
	1 year	2.25%
	2 Year	2.90%
	3 Year	3.25%
	4 Year	3.79%
	5 Year	3.79%	3.69%
	7 Year	4.45%
	10 Year	5.30%
	Variable	2.00%	3.05% (open)
	Prime @ 2.25%

These rates are are subject to change at any time without notice. Please contact my office for up to the minute rates.

Financial Tip of the Month:
The Pros and Cons of Dividend Stocks

When a corporation earns a profit, that money can either be re-invested in the business or paid to shareholders as a dividend. Many corporations keep a portion of their earnings and pay the rest as a dividend. Since dividend stocks offer regular dividends as well as long-term equity growth, are they a better investment? Like so many questions related to investing, the answer is "yes" and "no". Here are some factors to consider:

Every dividend you receive reduces the risk of the investment and contributes to long-term return.
Some companies raise their dividend to distract investors from the fact that their shares are underperforming.
Dividends contribute to shareholder loyalty, which can make companies less susceptible to market volatility, so the share value may be more stable.
Some studies indicate that companies that pay high dividends also have high earnings growth over the long term.
When a company reduces or suspends dividends-even if it's a constructive move to help build value-negative media reports can impact share prices.
Some companies pay dividends because they lack the ingenuity to invest their money in ways that could help the company grow more strongly.

If you're considering investing in dividend stocks, I can suggest a trusted local financial planner who can help you make an informed decision based on your specific goals and needs. Call me today for more info. 604-562-5055

Creative, Romantic Valentine's Ideas

Valentine's Day is just around the corner, and as usual, most men are starting to panic. Why is it that women always seem to know how to make the day special, but men don't have a clue? Well, relax! Whether you're a man or a woman, here's how to make your honey happy.

Luxurious bed sheets.Buy a new set of 600-thread count Egyptian cotton sheets. And while you're at it, sprinkle your bed with rose petals.

Certificate for Romantic Time. When's the last time you scheduled some quality time together? Make a homemade card and include a certificate for a theatre performance, weekend getaway, spa treatments, drive in the country, etc.
Valentine's breakfast. Get up early and make heart-shaped pancakes topped with sliced strawberries and whipped cream.
Love notes. Write a dozen little notes, each with a different reason why you love him/her. Then plant them where they'll be discovered throughout the day: underwear drawer, medicine cabinet, lunch bag, briefcase, car windshield, TV remote, etc.
Relive your first date. Surprise her/him by recreating the moment you fell in love. Go to the same restaurant, rent the same movie, go dancing at the same club, etc.

Love songs. Record a CD on your computer of all the songs the two of you have loved listening to over the years.