Have you considered leasing your business-related equipment as opposed to buying it outright? Leasing enables business owners to pay for the product as it is being used while the revenue generated by the equipment ‘pays’ for itself. Virtually any other financing demands a substantial down payment, deposit or compensating bank balance. By leasing, business owners can quickly acquire use of the required equipment without major cash outlay.
Leasing can be an especially attractive option given that lease payments can be 100% tax-deductible, which may mean a more rapid write-off for business owners. And because the lease term is generally shorter than the depreciable life of the equipment, payments can be expensed in a shorter duration.
National mortgage brokerage firm Dominion Lending Centres has a leasing division – Dominion Lending Centres Leasing – that offers leasing programs providing 100% financing and requiring minimal investment for the ‘purchase’ of the equipment. Business owners can immediately take advantage of the benefits of the new equipment without using existing capital or credit, and continue growing their businesses. As an alternate credit source, leases don’t interfere with established credit lines, which, in turn, expands available working capital.
Leasing options include new equipment leasing; used equipment and vehicle leasing; customized solutions through vendor finance programs; and lease-backs – where the lender buys equipment from a business owner and the owner leases it back.
Technology, heavy equipment and trailers, furniture and hospitality equipment, and manufacturing and industrial equipment are just a few examples of leasing options available to business owners. With today’s rapidly changing technology, some equipment can become obsolete relatively quickly. Leasing frequently enables business owners to acquire the new equipment they need without having to keep costly equipment working years beyond its profitable lifespan.
Vendor finance allows equipment vendors to offer customers another financing option besides cash-on-delivery or 30-day terms. On high-ticket items, this can be a major benefit, since it may not be possible for some customers to meet immediate payment terms. By extending the financing option through a Dominion Lending Centres Leasing professional, the vendor provides a choice that allows customers to better maintain their own cash flow.
Vendor finance is also known as vendor leasing and helps build vendor-customer relationships while improving vendor sales volume. Customers can view the vendor as a one-stop shop where they can fulfill their orders and get financing, rather than having to seek financing beforehand from a bank or other lending institution.
With access to multiple lending sources, lease professionals can cater to leasing deals for a variety of credit scenarios ranging from A to C credit quality. Leasing provides known payments over a specified period – helping take the guesswork out of budgeting.
And because many Dominion Lending Centres Leasing experts are also licensed mortgage agents, they can offer standard equipment leases and creatively structured solutions for seasonal, new or growing companies. Working with someone who is both a lease and mortgage expert enables business owners to even use commercial and residential mortgage and property credit line products, alone or in combination with lease financing, to help achieve the best solutions for their equipment acquisition needs.
Dominion Lending Centres Leasing experts can even break up large-dollar transactions into multiple leases across a number of funders to ease and simplify the approval process.
As with any licensed mortgage agent who is also a leasing professional, they work for business owners and consumers – not lenders – ensuring all efforts are made to acquire the best available products and rates with their clients’ interests front and centre.
If you have any questions on how leasing can help your business please call Greg Barrow at 4163807.7123 or by email at gbarrow@dominionlending.ca
Have a great day!
Thursday, January 29, 2009
Wednesday, January 28, 2009
Canada's Mortgage Industry Welcomes Federal Budget Announcements
[Source CAAMP - Media Release]
On Tuesday January 27, 2009, federal Finance Minister Jim Flaherty tabled the federal budget. Several measures affect Canada's housing and mortgage industry.
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On Tuesday January 27, 2009, federal Finance Minister Jim Flaherty tabled the federal budget. Several measures affect Canada's housing and mortgage industry.
- Temporary home renovations tax credit of up to $1,350 for eligible home renovations and alterations
- Increase in the home buyers RSP plan, withdrawal limit increased to $25,000 from the current $20,000
- A new first time home buyers tax credit that will provide up to $750 in tax relief for closing costs
- Broad based personal tax reductions including an increase in the personal exemption and increases to the limits for the two lowest tax brackets
--------------------------------
Monday, January 26, 2009
Examining revenue property options
[Source - Dominion Lending Centres]
Given the current national credit-crunched lending environment and the slowing real estate market – which has shifted to a buyers’ market – coupled with lower interest rates, now is an ideal time to invest in the purchase of revenue property.
After all, although the real estate market slowdown has seen prices drop and interest rates dip, rental income has not wavered – making now an optimal time to start building your revenue property portfolio or continue adding to your existing list of properties.
In order to take advantage of this opportunity, the key is to work with a mortgage broker who is an expert in this niche and can provide you with a wealth of knowledge and ongoing information that will help you make informed investment decisions and feel at ease throughout each purchase.
Mortgage brokers offer an invaluable service to real estate investors because, if the mortgages on your investment properties are not set up properly from the on-set of each venture, you will not be able to get future financing – a necessity for continuing to build your portfolio of revenue properties.
Mortgage brokers who are experts in dealing with real estate investors know that a portfolio approach must be taken to ensure future financing for those looking to purchase revenue properties. An experienced mortgage broker will ask you in detail about your specific property investment goals and develop a game plan for the next five or 10 years based on these goals.
Your mortgage broker can work with you in order to determine where you currently stand in terms of your real estate goals, where you need to be to meet those goals and the steps involved to get you there.
Keep in mind, however, that your plan should be revisited with your mortgage broker at least annually to ensure you’re still on track.
A team of experts
A mortgage broker who specializes in helping clients acquire revenue property is also likely to partner with other investment property experts, including real estate agents, lawyers, accountants, insurance agents and contractors, to name a few, which enables your broker to provide valuable information to you through this knowledge network they have created.
By forming ties with other trusted experts, your mortgage broker is able to provide you with a one-stop shop for meeting all of your real estate investment needs.
Your mortgage broker can also help direct you to other organizations that will offer you further insight into your real estate investment needs. If you join groups such as the Real Estate Investment Network (REIN) or even a local Rental Owners and Managers Society (ROMS), for instance, you can receive a wealth of added knowledge catered to your revenue property needs.
While REIN can provide market insight and investing tips through years of experience, ROMS helps with credit checks for potential tenants, keeps you abreast of changes to the Residential Tenancy Act and other topics/concerns often faced by landlords.
So before you begin building your revenue property portfolio, ask your mortgage broker what they can do to cater to all your real estate investment needs.
Given the current national credit-crunched lending environment and the slowing real estate market – which has shifted to a buyers’ market – coupled with lower interest rates, now is an ideal time to invest in the purchase of revenue property.
After all, although the real estate market slowdown has seen prices drop and interest rates dip, rental income has not wavered – making now an optimal time to start building your revenue property portfolio or continue adding to your existing list of properties.
In order to take advantage of this opportunity, the key is to work with a mortgage broker who is an expert in this niche and can provide you with a wealth of knowledge and ongoing information that will help you make informed investment decisions and feel at ease throughout each purchase.
Mortgage brokers offer an invaluable service to real estate investors because, if the mortgages on your investment properties are not set up properly from the on-set of each venture, you will not be able to get future financing – a necessity for continuing to build your portfolio of revenue properties.
Mortgage brokers who are experts in dealing with real estate investors know that a portfolio approach must be taken to ensure future financing for those looking to purchase revenue properties. An experienced mortgage broker will ask you in detail about your specific property investment goals and develop a game plan for the next five or 10 years based on these goals.
Your mortgage broker can work with you in order to determine where you currently stand in terms of your real estate goals, where you need to be to meet those goals and the steps involved to get you there.
Keep in mind, however, that your plan should be revisited with your mortgage broker at least annually to ensure you’re still on track.
A team of experts
A mortgage broker who specializes in helping clients acquire revenue property is also likely to partner with other investment property experts, including real estate agents, lawyers, accountants, insurance agents and contractors, to name a few, which enables your broker to provide valuable information to you through this knowledge network they have created.
By forming ties with other trusted experts, your mortgage broker is able to provide you with a one-stop shop for meeting all of your real estate investment needs.
Your mortgage broker can also help direct you to other organizations that will offer you further insight into your real estate investment needs. If you join groups such as the Real Estate Investment Network (REIN) or even a local Rental Owners and Managers Society (ROMS), for instance, you can receive a wealth of added knowledge catered to your revenue property needs.
While REIN can provide market insight and investing tips through years of experience, ROMS helps with credit checks for potential tenants, keeps you abreast of changes to the Residential Tenancy Act and other topics/concerns often faced by landlords.
So before you begin building your revenue property portfolio, ask your mortgage broker what they can do to cater to all your real estate investment needs.
Friday, January 23, 2009
Homebuyers urged to beware mortgage policy tied to secure line of credit
[Published: Thursday, January 22, 2009 3:23 PM ET - Canadian Press NewsItem / NewsComponent / NewsLines / ByLine]
Homebuyers are being urged to read the fine print and to recognize the potential consequences of tying their mortgage to a grossly inflated secure line of credit - an increasingly common practice that's only now raising eyebrows as people review their finances in tough economic times.
Homebuyers are being urged to read the fine print and to recognize the potential consequences of tying their mortgage to a grossly inflated secure line of credit - an increasingly common practice that's only now raising eyebrows as people review their finances in tough economic times.
Recently divorced and just two days away from closing on her new home, Sherryl Nickel was shocked when she arrived at her credit union to sign the paperwork and realized the institution had registered a home equity line of credit worth $750,000 when she'd requested and been approved for $200,000.
"They just said, 'It's complete. It's done. We're doing this as a service to you' when I questioned it," said the Vancouver retiree, noting the home was worth only $535,000.
"You don't have time to say, 'Whoa, whoa, whoa, send this back to your head office and get the paperwork redone.' You just don't have that opportunity."
Her lawyer later told her the practice is common and is billed as a boon for consumers who won't have to go through the process of hiring a lawyer again should they need additional credit down the road.
But the practice is also raising questions about the impact it might have on one's creditworthiness and ability to shop around with other lending institutions.
Read Entire Article Here: http://www.cbc.ca/cp/Money/090122/J012204AU.html
Thursday, January 22, 2009
Dominion Lending Centres Mortgage Industry News
The following are a collection of highlights from last weeks top Canadian News stories pertaining to our mortgage industry. [News highlights selected and edited by Dominion Lending Centres Head Office Team]
The Bank of Canada chopped its key interest rate by another half percentage point to its lowest level ever yesterday, and warned that the Canadian economy will contract by 1.2% this year.
The central bank’s target for the overnight lending rate now stands at 1% – lower than in 1958, when the most-watched policy rate was 1.12%.
“The outlook for the global economy has deteriorated since the bank’s December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity,” the bank said in a statement. – Globe and Mail
“While the economy is likely to look a lot worse in 2009 than it did in 2008, the dramatic decline staged by the stock market last year is unlikely to be repeated this year,” says Scotia Economics. And despite the 50 basis points drop in prime yesterday – bringing it to 3% – Scotia Economics has already reiterated its stance that the Bank will be forced to cut another 50 basis points in March.
Consumers pinched by the credit crunch are getting some relief as lenders lower their rates on both fixed and variable mortgages.
Lenders including RBC, BMO, Scotiabank, TD Canada Trust and CIBC sliced mortgage rates shortly after the Bank of Canada cut its key lending rate.
The banks quickly followed suit, passing on the full central bank cut. Previously, the banks had failed to pass on the full benefit of rate cuts made by the central bank late last year to consumers.
Their quick move to follow the Bank of Canada yesterday could be a sign of pressure from the government and customers, and also that borrowing costs may be easing a bit. – Globe and Mail
The 17-month agony of the Canadian non-bank ABCP market has ended, with the implementation of a court-administered restructuring of $32 billion worth of notes. – Globe and Mail
The government bought $8 billion of mortgages from banks last week as part of a program to buy as much as $75 billion of the securities and ensure that higher borrowing costs don’t crimp lending.
CMHC announced the purchase last week on its website. The transaction is aimed at helping banks fund new loans to consumers and businesses.
The $8 billion agreement is for five years and the government will earn an average yield of 2.62% – greater than its cost of borrowing money for five years. This latest instalment brings the total amount the government has purchased to $33 billion. – Bloomberg.com
The Canadian economy should emerge from recession during the second half of the year as stimulus measures take effect, setting the stage for interest rate hikes in a year, a Reuters poll showed today.
The quarterly economic survey of 20 economists was conducted in the days before the Bank of Canada made an expected rate cut of a half-percentage point. – Financial Post
CREA is asking Ottawa to raise the limit on RRSP withdrawals by first-time homebuyers by $5,000 – to $25,000 – and extend the program to anyone buying a home. – Globe and Mail
A new poll suggests most Canadians want the government to avoid major tax and spending initiatives, and instead focus on keeping inflation and interest rates low.
The Canadian Press Harris-Decima survey asked what the best approach for the economy would be as the federal government prepares a budget for January 27th: tax cuts; investment in infrastructure; or working to keep interest rates and inflation down?
Overall, 43% preferred the last option. That choice would put most of the onus on the Bank of Canada. Of course, lower interest rates also tend to feed inflation by encouraging spending. – Chronicle Herald
The federal government has pumped $350 million into the Business Development Bank of Canada (BDC) to allow the bank to offer $1.5 billion in new financing to help small- and medium-sized business, Industry Minister Tony Clement said Monday.
“Current market developments have resulted in increased demand for BDC financing and services, and the government has taken this action to enable the BDC to help counter the effects of the credit crunch,” Clement said. – Globe and Mail
The Bank of Canada chopped its key interest rate by another half percentage point to its lowest level ever yesterday, and warned that the Canadian economy will contract by 1.2% this year.
The central bank’s target for the overnight lending rate now stands at 1% – lower than in 1958, when the most-watched policy rate was 1.12%.
“The outlook for the global economy has deteriorated since the bank’s December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity,” the bank said in a statement. – Globe and Mail
“While the economy is likely to look a lot worse in 2009 than it did in 2008, the dramatic decline staged by the stock market last year is unlikely to be repeated this year,” says Scotia Economics. And despite the 50 basis points drop in prime yesterday – bringing it to 3% – Scotia Economics has already reiterated its stance that the Bank will be forced to cut another 50 basis points in March.
Consumers pinched by the credit crunch are getting some relief as lenders lower their rates on both fixed and variable mortgages.
Lenders including RBC, BMO, Scotiabank, TD Canada Trust and CIBC sliced mortgage rates shortly after the Bank of Canada cut its key lending rate.
The banks quickly followed suit, passing on the full central bank cut. Previously, the banks had failed to pass on the full benefit of rate cuts made by the central bank late last year to consumers.
Their quick move to follow the Bank of Canada yesterday could be a sign of pressure from the government and customers, and also that borrowing costs may be easing a bit. – Globe and Mail
The 17-month agony of the Canadian non-bank ABCP market has ended, with the implementation of a court-administered restructuring of $32 billion worth of notes. – Globe and Mail
The government bought $8 billion of mortgages from banks last week as part of a program to buy as much as $75 billion of the securities and ensure that higher borrowing costs don’t crimp lending.
CMHC announced the purchase last week on its website. The transaction is aimed at helping banks fund new loans to consumers and businesses.
The $8 billion agreement is for five years and the government will earn an average yield of 2.62% – greater than its cost of borrowing money for five years. This latest instalment brings the total amount the government has purchased to $33 billion. – Bloomberg.com
The Canadian economy should emerge from recession during the second half of the year as stimulus measures take effect, setting the stage for interest rate hikes in a year, a Reuters poll showed today.
The quarterly economic survey of 20 economists was conducted in the days before the Bank of Canada made an expected rate cut of a half-percentage point. – Financial Post
CREA is asking Ottawa to raise the limit on RRSP withdrawals by first-time homebuyers by $5,000 – to $25,000 – and extend the program to anyone buying a home. – Globe and Mail
A new poll suggests most Canadians want the government to avoid major tax and spending initiatives, and instead focus on keeping inflation and interest rates low.
The Canadian Press Harris-Decima survey asked what the best approach for the economy would be as the federal government prepares a budget for January 27th: tax cuts; investment in infrastructure; or working to keep interest rates and inflation down?
Overall, 43% preferred the last option. That choice would put most of the onus on the Bank of Canada. Of course, lower interest rates also tend to feed inflation by encouraging spending. – Chronicle Herald
The federal government has pumped $350 million into the Business Development Bank of Canada (BDC) to allow the bank to offer $1.5 billion in new financing to help small- and medium-sized business, Industry Minister Tony Clement said Monday.
“Current market developments have resulted in increased demand for BDC financing and services, and the government has taken this action to enable the BDC to help counter the effects of the credit crunch,” Clement said. – Globe and Mail
Tuesday, January 20, 2009
Bank of Canada lowers overnight rate target by 1/2 percentage point to 1 per cent
[Source - Bank of Canada - Press Release - January 20, 2009]
OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of a percentage point to 1 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 1/4 per cent.
The outlook for the global economy has deteriorated since the Bank's December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity. Heightened uncertainty is undermining business and household confidence worldwide and further eroding domestic demand. Major advanced economies, including Canada's, are now in recession and emerging-market economies are increasingly affected. Energy prices have fallen as a result of substantially weaker global demand.
Stabilization of the global financial system is a precondition for economic recovery. To that end, governments and central banks are taking bold and concerted policy actions. There are signs that these extraordinary measures are starting to gain traction, although it will take some time for financial conditions to normalize. In addition, considerable monetary and fiscal policy stimulus is being provided worldwide.
Canadian exports are down sharply, and domestic demand is shrinking as a result of declines in real income, household wealth, and consumer and business confidence. Canada's economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis. As policy actions begin to take hold in Canada and globally, and with support from the past depreciation of the Canadian dollar, real GDP is expected to rebound, growing by 3.8 per cent in 2010.
A wider output gap through 2009 and modest decreases in housing prices should cause core CPI inflation to ease, bottoming at 1.1 per cent in the fourth quarter. Total CPI inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. With inflation expectations well-anchored, total and core inflation should return to the 2 per cent target in the first half of 2011 as the economy returns to potential.
Against this background, the Bank today lowered its policy rate by 50 basis points, bringing the cumulative monetary policy easing to 350 basis points since December 2007. Guided by Canada's inflation-targeting framework, the Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. Low, stable, and predictable inflation is the best contribution monetary policy can make to long-term economic growth and financial stability.
-------------------------------------------------------
BMO, TD, RBC, BNS, CIBC have all matched the 1/2 point lowering their prime to 3.0% which is welcome news to borrowers.
Their respective press releases can be found here: http://www.newswire.ca/en/
OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of a percentage point to 1 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 1/4 per cent.
The outlook for the global economy has deteriorated since the Bank's December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity. Heightened uncertainty is undermining business and household confidence worldwide and further eroding domestic demand. Major advanced economies, including Canada's, are now in recession and emerging-market economies are increasingly affected. Energy prices have fallen as a result of substantially weaker global demand.
Stabilization of the global financial system is a precondition for economic recovery. To that end, governments and central banks are taking bold and concerted policy actions. There are signs that these extraordinary measures are starting to gain traction, although it will take some time for financial conditions to normalize. In addition, considerable monetary and fiscal policy stimulus is being provided worldwide.
Canadian exports are down sharply, and domestic demand is shrinking as a result of declines in real income, household wealth, and consumer and business confidence. Canada's economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis. As policy actions begin to take hold in Canada and globally, and with support from the past depreciation of the Canadian dollar, real GDP is expected to rebound, growing by 3.8 per cent in 2010.
A wider output gap through 2009 and modest decreases in housing prices should cause core CPI inflation to ease, bottoming at 1.1 per cent in the fourth quarter. Total CPI inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. With inflation expectations well-anchored, total and core inflation should return to the 2 per cent target in the first half of 2011 as the economy returns to potential.
Against this background, the Bank today lowered its policy rate by 50 basis points, bringing the cumulative monetary policy easing to 350 basis points since December 2007. Guided by Canada's inflation-targeting framework, the Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. Low, stable, and predictable inflation is the best contribution monetary policy can make to long-term economic growth and financial stability.
-------------------------------------------------------
BMO, TD, RBC, BNS, CIBC have all matched the 1/2 point lowering their prime to 3.0% which is welcome news to borrowers.
Their respective press releases can be found here: http://www.newswire.ca/en/
Monday, January 19, 2009
Renting vs Buying
At some point in their lives, most Canadians have probably asked themselves whether it is better to buy or rent a home. And purchasing a home is one of the biggest decisions most people ever make in their lives.
Ultimately, the decision is a personal choice, but it helps to look at the pros and cons of buying to determine whether home ownership is right for you.
Some advantages of buying a home
Owning a home is generally considered to be a sound, long-term investment that can provide satisfaction and security for you and your family.
Each month when you make your mortgage payment, you are building equity in your home.
Equity is the portion of the property that you actually build through your monthly payment versus the portion that you still owe the lender.
At the beginning of your mortgage, more of your payments go toward paying off the interest and less toward paying off the principal. But the longer you stay in your home and the more mortgage payments you make, the more principal you pay off and the more equity you accumulate.
Most mortgages also offer you the option of making additional monthly or annual payments to reduce your principal faster. Some prepayment privileges, for instance, enable you to pay up to 20% of the principal per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.
There is also a tax advantage. If your home is your principal residence, any profit you make when you sell it is tax-free. A home can appreciate – or increase in value – as time passes, building more equity. As you build up equity, it’s usually easier to upgrade to a more expensive home in the future thanks to the profit you’ll make when selling your current home.
As an owner, you can also decorate and improve your home any way you like. Ownership tends to give you a sense of pride and can offer you and your family stronger ties to the community.
If you do decide that home ownership is right for you, it’s important to choose a home you can afford. If you can’t afford to buy your dream home, purchasing a more modest home can be a great place to start building equity that one day may allow you to buy the home of your dreams.
Since we’re currently in a buyer’s real estate market and interest rates have been dropping, now may be an ideal time to enter into home ownership for the first time.
Some disadvantages of buying a home
Since it’s easy to get caught up in the excitement of buying a home, it’s important to remember that home ownership has some additional responsibilities as well.
For one thing, a home can be expensive. Chances are, your monthly payments will be more than what you are currently paying in rent when you factor in such things as your mortgage, property taxes, repairs and general maintenance.
Owning a home ties up some of your cash and is likely to reduce your flexibility to move to a new location or change jobs.
While your home might increase in value as time goes by, don’t expect to get a big return quickly. There are no guarantees that your home will increase in value, particularly during the first few years. In the beginning, you could actually lose money if you sell because your home may not have appreciated enough to cover the real estate fees, and moving, renovation and other selling costs.
Real estate is, however, usually considered a good investment over the long term.
When making the decision about whether to buy or rent, it’s important to carefully choose a home you can afford, and then weigh the pros and cons. Millions of people enjoy the rewards of home ownership but, ultimately, it’s a personal decision based on your own priorities.
As always if you would like to discuss your options with a Mortgage Expert, please contact Greg Barrow, Dominion Lending Centres Perfect Mortgages, at 416 807 7123 or by email, click here.
Have a great day!
Ultimately, the decision is a personal choice, but it helps to look at the pros and cons of buying to determine whether home ownership is right for you.
Some advantages of buying a home
Owning a home is generally considered to be a sound, long-term investment that can provide satisfaction and security for you and your family.
Each month when you make your mortgage payment, you are building equity in your home.
Equity is the portion of the property that you actually build through your monthly payment versus the portion that you still owe the lender.
At the beginning of your mortgage, more of your payments go toward paying off the interest and less toward paying off the principal. But the longer you stay in your home and the more mortgage payments you make, the more principal you pay off and the more equity you accumulate.
Most mortgages also offer you the option of making additional monthly or annual payments to reduce your principal faster. Some prepayment privileges, for instance, enable you to pay up to 20% of the principal per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.
There is also a tax advantage. If your home is your principal residence, any profit you make when you sell it is tax-free. A home can appreciate – or increase in value – as time passes, building more equity. As you build up equity, it’s usually easier to upgrade to a more expensive home in the future thanks to the profit you’ll make when selling your current home.
As an owner, you can also decorate and improve your home any way you like. Ownership tends to give you a sense of pride and can offer you and your family stronger ties to the community.
If you do decide that home ownership is right for you, it’s important to choose a home you can afford. If you can’t afford to buy your dream home, purchasing a more modest home can be a great place to start building equity that one day may allow you to buy the home of your dreams.
Since we’re currently in a buyer’s real estate market and interest rates have been dropping, now may be an ideal time to enter into home ownership for the first time.
Some disadvantages of buying a home
Since it’s easy to get caught up in the excitement of buying a home, it’s important to remember that home ownership has some additional responsibilities as well.
For one thing, a home can be expensive. Chances are, your monthly payments will be more than what you are currently paying in rent when you factor in such things as your mortgage, property taxes, repairs and general maintenance.
Owning a home ties up some of your cash and is likely to reduce your flexibility to move to a new location or change jobs.
While your home might increase in value as time goes by, don’t expect to get a big return quickly. There are no guarantees that your home will increase in value, particularly during the first few years. In the beginning, you could actually lose money if you sell because your home may not have appreciated enough to cover the real estate fees, and moving, renovation and other selling costs.
Real estate is, however, usually considered a good investment over the long term.
When making the decision about whether to buy or rent, it’s important to carefully choose a home you can afford, and then weigh the pros and cons. Millions of people enjoy the rewards of home ownership but, ultimately, it’s a personal decision based on your own priorities.
As always if you would like to discuss your options with a Mortgage Expert, please contact Greg Barrow, Dominion Lending Centres Perfect Mortgages, at 416 807 7123 or by email, click here.
Have a great day!
Saturday, January 17, 2009
Monday, January 12, 2009
Have you considered refinancing your mortgage?
If you’re trying to determine if now’s a good time to refinance your mortgage and free up some extra money, speak with a qualified mortgage expert. They will help you determine if refinancing is the right option for you and your family.
If you’re looking to reduce your costs and lower your monthly mortgage payment, then now may be a great time to do just that. Mortgage rates are currently low and switching to a lower rate may save you a lot of money – possibly thousands of dollars per year. There are penalties for paying your mortgage loan out prior to renewal, but these could be offset by the extra money you could acquire through a refinance.
If you’re able to lower your fixed-rate mortgage, or change from a fixed-rate to variable-rate mortgage, you could be putting more money in the bank each month. Make sure you speak with a mortgage broker about variable-rate mortgages, however, as this product adjusts with the bank rate and can fluctuate up or down.
With access to more money, you will be better able to manage your debt. Refinancing your first mortgage and taking some existing equity out could also help you pay off some of your high-interest rate credit card debts. You could also take some extra money out to invest, go on vacation, do some renovations or even invest in your children’s education. Refinancing your first mortgage is typically more cost effective than taking out a second mortgage.
Don’t forget that by refinancing you are extending the time to pay off your mortgage. That being said, there are many ways to pay down your mortgage sooner. Most mortgage products have prepayment privileges that allow you to pay up to 20% of the principal per calendar year. You may not be able to use any extra money you have now to take advantage of these extra payments but, once you are in a position to do so, it is highly recommended to try and make some additional payments to reduce your principal (the true value of your mortgage minus the interest payments) and the amortization period (length of your mortgage).
If homeowners fail to take the time to thoroughly research their options and simply sign the renewal offers they receive from their bank, credit union or other lender, they could end up paying thousands of dollars more per year in interest.
In the current credit-crunched lending environment, now more than ever it’s important to take the time to contact a mortgage agent to find out your options.
By refinancing now and paying off some debt, you can put yourself and your family in a better financial position. It’s very important to not rack up your credit cards after refinancing, however, so set your goals and budgets, and stick to them!
[Source-Dominion Lending Centres]
If you’re looking to reduce your costs and lower your monthly mortgage payment, then now may be a great time to do just that. Mortgage rates are currently low and switching to a lower rate may save you a lot of money – possibly thousands of dollars per year. There are penalties for paying your mortgage loan out prior to renewal, but these could be offset by the extra money you could acquire through a refinance.
If you’re able to lower your fixed-rate mortgage, or change from a fixed-rate to variable-rate mortgage, you could be putting more money in the bank each month. Make sure you speak with a mortgage broker about variable-rate mortgages, however, as this product adjusts with the bank rate and can fluctuate up or down.
With access to more money, you will be better able to manage your debt. Refinancing your first mortgage and taking some existing equity out could also help you pay off some of your high-interest rate credit card debts. You could also take some extra money out to invest, go on vacation, do some renovations or even invest in your children’s education. Refinancing your first mortgage is typically more cost effective than taking out a second mortgage.
Don’t forget that by refinancing you are extending the time to pay off your mortgage. That being said, there are many ways to pay down your mortgage sooner. Most mortgage products have prepayment privileges that allow you to pay up to 20% of the principal per calendar year. You may not be able to use any extra money you have now to take advantage of these extra payments but, once you are in a position to do so, it is highly recommended to try and make some additional payments to reduce your principal (the true value of your mortgage minus the interest payments) and the amortization period (length of your mortgage).
If homeowners fail to take the time to thoroughly research their options and simply sign the renewal offers they receive from their bank, credit union or other lender, they could end up paying thousands of dollars more per year in interest.
In the current credit-crunched lending environment, now more than ever it’s important to take the time to contact a mortgage agent to find out your options.
By refinancing now and paying off some debt, you can put yourself and your family in a better financial position. It’s very important to not rack up your credit cards after refinancing, however, so set your goals and budgets, and stick to them!
[Source-Dominion Lending Centres]
Friday, January 9, 2009
Mortgage brokers offer choice
The next time you’re looking for a mortgage for that new house or you’re up for renewal on your existing mortgage, think about using a mortgage broker – their services are free and they offer you an abundance of choices the banks simply can’t compete with.
Mortgage brokers have access to a vast array of lenders – up to 90+ institutions, including some of the big banks – which enables these professionals to negotiate the best possible mortgage products and rates on your behalf. In comparison, if you approach your bank with a mortgage request, they can only offer you a narrow choice – namely, their own products.
Mortgage brokers do their homework on available mortgage products and keep themselves abreast of any new products, or changes to existing products, to ensure they find the best mortgage to fit your specific needs.
Unlike the banks, mortgage brokers can also cater to self-employed borrowers as well as those who have suffered credit blemishes due to life experiences such as divorce or illness. Brokers will listen to your story, whereas the banks have a very narrow view of what fits into their financing box – and this is nonnegotiable.
Top Reasons for Using a Broker:
1. Choice – access to multiple financial institutions
2. Costs – using a broker is free and they can negotiate lower rates for you
3. Knowledge – brokers stay up-to-date on available products and services
4. Flexibility – mortgage products are even available for the self-employed or those who have credit blemishes
Please call (416.807.7123) or email me any time.
[Source-Dominion Lending Centres]
Monday, January 5, 2009
Pay attention when renewing mortgage
[Source - JOEY FITZPATRICK, The Chronicle Herald - January 5, 2009]
For most of us, a mortgage is the largest single financial responsibility we will ever take on.
While the mortgage market outlook is more positive in Canada than in the U.S., a recent survey suggests Canadians should pay closer attention when it comes time to renew a mortgage. It indicated that homeowners renewing in the past year obtained, on average, fewer than two quotes (1.85) before signing on the dotted line.
"Lenders don’t always offer the same incentives to renewal clients as they do for new business clients," says Peter Veselinovich, vice-president of banking and mortgage operations with Investors Group. "So you really need to be aware of what’s available in the marketplace."
Read Full Article Here
For most of us, a mortgage is the largest single financial responsibility we will ever take on.
While the mortgage market outlook is more positive in Canada than in the U.S., a recent survey suggests Canadians should pay closer attention when it comes time to renew a mortgage. It indicated that homeowners renewing in the past year obtained, on average, fewer than two quotes (1.85) before signing on the dotted line.
"Lenders don’t always offer the same incentives to renewal clients as they do for new business clients," says Peter Veselinovich, vice-president of banking and mortgage operations with Investors Group. "So you really need to be aware of what’s available in the marketplace."
Read Full Article Here
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