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December 2008
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Vol 1, Issue 3
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Greetings!
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Life is busy enough; your home financing doesn't have to be complicated. This newsletter was created to share information regarding all kinds of money matters, from understanding mortgage financing to ideas on how to save and even make more money for you and your family.
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Variety is still the spice of life - Mortgage Options
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Even with an economic shift around the world, here in Canada, our financial system is highly respected as the model by which other countries aim to achieve. This has allowed the major banks and lenders the ability to maintain a higher level of liquidity in the market, offer competitive rates and provide some flexibility to niche markets such as self-employed individuals, investors of rental properties and those with less than perfect credit.
Self Employed - there are still some stated income products available offering a slightly higher interest rate. If you can prove income you can access the best rates.
Rental Properties - many lenders still offer great products for rental purchases. The maximum amount to borrow and the calculation for rental income will vary from lender to lender as well as if the mortgage is conventional (<80% loan to value) or high ratio.
Less Than Perfect Credit - the benchmark for lenders has changed. A 600 beacon score is the defining line for most lenders. If your credit score is higher you can access better rates. If your credit score is below 600 you can still access financing for higher rates. We have a few sources of alternative funding that are providing very attractive rates - lower than we have seen in some time. |
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2009 - The Year of the Deals
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Ozzie Jurock says: "We'll be fine in 2009"
Ozzie Jurock,
British Columbia's best known real estate consultant and investor, has
seen housing and financial crashes before and he is confident B.C. will
ride out the current downturn with ease.
In 1992, Jurock notes, some 787 U.S. banks had collapsed amidst
the savings and loan crisis. At the time, Jurock was buying real estate
and urging his clients to do the same.
"It was an easy call to make," Jurock said. "Just as easy a
call to make for real estate values now, because the fact is that
values grow where people go ... and people want to live and play here
in Western Canada."
"In today's gloomy environment we must remember that urban real
estate always has a use and thus always has a strong asset value. We like all urban real estate in Western Canada from Edmonton to
Vancouver and most everything in between." No matter the short-term
gyrations, urban properties have been a spectacular investment.
Downtown used condos on Howe Street rose from $95,000 in 2001 to
$350,000 in 2008. The average house price climbed from $16,000 to
$700,000 in Vancouver over the last 40 years."But we did not get there in a straight line," he said.
In Western Canada for 2009, Jurock said he is only concerned about
Saskatchewan, "where volumes are slowing, inventory is soaring and
prices are bound to reverse sharply."
"On average for 2009 we look for prices to firm in Edmonton and go
down in Calgary by a further eight per cent, and Vancouver by 10 per
cent."
He cautions that overbuilt condo areas - he singled out downtown
Calgary and Vancouver and the Okanagan - will see sharper price decline.
"Recreational areas will not escape as they always follow - down or
up - markets in the major cities. Previous downturns have lasted from
one to three years and seen an average of some 17 per cent decline from
top to bottom. I would not be surprised to see that this time also."
However, Jurock recommends buying waterfront. He notes that there
are now 67 waterfront homes for sale on the Sunshine Coast, up tenfold
from a year ago.
From an investor's perspective, Jurock said, "we like cash-flowing
properties anywhere there is a good employment base, low vacancies,
capital investment and a good price-to-rent ratio."
His picks for such markets include Edmonton, the Kootenays and a number of smaller centres in Alberta and B.C. "From a home purchase perspective there will be some great deals in new construction [in 2009]," he added.
Jurock believes we are in the midst of the most unreported inflation
of all times, "because we print more money than ever. All that extra
cash created out of thin air will continue to compete with the money
you and I make and drive hard asset prices, like real estate,
eventually higher again."
"Don't worry," Jurock said. "The best deals come in down markets. On
the way up, risk increases every day. On the way down, it decreases
every day."
His final advice: work with a sharp realtor, do your research and make an offer.
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Great Rates!
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PRIME lending DOWN to 3.5%
Best variable closed at PRIME + .6% (4.1%)
1-year fixed at 4.35%
2-year fixed at 5.05%
3-year fixed at 4.79%
4-year fixed at 4.89%
5-year fixed at 4.99%
7-year fixed at 6.00%
10-year fixed at 6.15%
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Rates subject to change - call today for best rates and rate hold for up to 120 days.
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I hope you find this newsletter informative. If you feel it is of value, please forward to your friends and family. I welcome new subscribers and more ideas for content. By sharing strategies and tips - we can all make the most of our money.
Sincerely,
Pauline Tonkin
Your Trusted Mortgage Specialist
Elder Mortgage - The Mortgage Centre
101-566 Lougheed Highway, Coquitlam, BCV3K 3S3
P: 604 931 4719
C: 604 813 8402
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Pauline's Pick
Land Banking
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Did you know that 70% of the world's wealthiest people made it in real estate?
With instability in the stock market it is even more important than ever to share good opportunities and tips with each other! Land banking has been a profitable business for many years. Those who include it in their investment portfolio can see consistent returns - the investment is on a tangible item - land. One of my network partners is Keith Jacques of SGC Wealth. If you want to learn more about how to offset some of the risks in a declining market, give him a call at 604-313-1267 or email at keith@sgcwealth.com
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