You are reading this on Tuesday, November 2nd, otherwise known as my birthday (I’m taking the day off). This is the last newsletter for the year. And it is chock-full of housing market reports and rate information further down.

The economy is wonky. It has been wonky for a while, and with that, inflation is on the rise, causing speculation and concern. But will it continue to rise? Maybe? Who knows?

I’m an optimist and tend not to fall into the sky is falling beliefs.  I prefer to believe that once the immigration gates open up again and more people return to the workplace, we will see prices start to decline. With the return of more employees to the workplace, businesses and manufacturing can return to their full capacity. This will increase productivity and inventory that will hit the marketplace and allow supply and demand to be in balance. Which then allows inflation to return to the 2% ish average we are accustomed to in Canada.  IMHO. There are even a few economists in this mind camp as well.

However, these are uncertain times. I don’t think we can look to the past pandemics to answer the questions for our financial future? Today, people have more opportunities and overt behaviours stronger personalities. Today, we enjoy the benefits of technology and a greater sense of free will; we are self-employed and have a strong gig economy. And more educated; we move around more freely and don’t have the same loyalty to a company we once did. In short, I think our ability to bounce back quickly is certain.

Only time will tell. Personally, I’m looking forward to reading the reports in five years of how we as humans managed throughout the Covid-19 Pandemic and each province handled the rules? What did we learn?

November is also when I take stalk for the next year and start the plan for what I want my following year to look like, but before moving forward, you should look back.

As I reflect on 2021, I can smile; it’s been a good year! I’m tremendously grateful for a thriving business. I sincerely appreciate the clients who trust Keri and me with their financing. We are so fortunate to be able to choose the clients we serve. Kindness is key.

I have a wonderfully supportive family. An outstanding team and an assistant who ensures we stay on task, which allows for a balanced work and home life for both of us.

Thankfully, our home renovation is now complete, and we can move on to the next stage, paying for it. But, on the other hand, I may need to win the lotto??

And then there’s Walter. He has become my day’s purpose and taught me so many lessons, mainly being more patient.  For example, this newsletter was in its final editing when Walter jumped up and deleted the last three paragraphs’ nope; I could not hit undo. Breath in, breath out. He needed to go for a walk.

I knew owning a dog was expensive and time-consuming, but no one told me it was dangerous?? I am covered in scars from the teething period, including a finger that should have been stitched, but I used superglue instead. I have had numerous scapes on my knees and hands, and yes, two broken ribs, still healing from that incident three months ago. I have almost been hit by a car twice. People speed way too much on residential side roads. And, I may have turned into “that” lady that yells obscenities at cars driving too fast on our street, yep, that’s me. Thanks, Walter. But, when he looks at me and tilts his head in that German Shepherd way, my heart melts.

As I look back on my 2021, I smile; there have been many moments, while not humorous while I was going through them, I reflect, I smile.

Tell me your story! I am offering one year of Equifax secure monitoring to the first five people who email, call or text me their special moment in 2021, it could also be something kind you did for someone, or someone did for you. Maybe, you want to leave a Keri and me a Google review?  Share the good-vibes friends.

Walter Update

Oh my goodness, he is getting so big. 85lbs of awesomeness. I just adore him. 

Walter learning so many new tricks – He can hug – yep hug on demand. Heal is a work in progress. Come, Wait, sit and down are pretty solid. If the cat meows, he goes to his crate affectionally called “the cottage.” He loves his cottage, it’s his safe place. At his core, Walter is a bit of a mama’s boy who loves the water. 

6 Ways for Homeowners to Build Wealth

1. Speed up your mortgage pay down. 

Change your mortgage payment from monthly to bi-weekly accelerated = this shaves 2.5 years of interest. 

Put “found” money such as a pay raise, a gift or inheritance towards your RSP and use the tax refund it generates to pay down your mortgage principal. WIN-WIN

Increase your mortgage payment each year – a minor increase today goes a long way. 

2. Get a financial reset when needed. 

Too many high-interest credit card balances over a long period is a definite wealth killer. It chokes your cash flow, and having multiple bill payments can be stressful. However, if you have enough equity, you may be able to move that debt to your lower-rate mortgage, giving you one comfortable payment and thousands in interest savings.

3. Renovate using your lowest-cost funds. 

With historically low mortgage rates, homeowners with enough equity are using the opportunity to roll the cost of their renovation into their mortgage for one easy monthly payment and then using their prepayment privileges to pay the mortgage off faster. It’s a win-win when you increase the comfort and enjoyment of your home while also improving the long-term value. 

4. Apply for incentives to help pay for energy-saving investments in your home. 

The federal government recently launched a new program that offers Canadians grants of up to $5,000 to pay for energy-saving home upgrades, such as insulation, furnaces, solar panels, windows, and doors and up to $600 to help with the cost of home energy evaluations.

Additionally, you may receive a savings boost from your mortgage insurer if you paid mortgage default insurance when financing your home. If you make retrofits to improve energy efficiency, you can apply for a refund of either 15 or 25% of the default insurance premium that you paid. Applications are accepted within two years of the closing date of your mortgage. 

5. Look at your mortgage renewal as a significant opportunity. 

When your lender sends out a letter suggesting you renew your mortgage at their current offer, get in touch. Everything about your mortgage can be negotiated, allowing you to get the best possible deal for your current situation, which may be very different from when you first got your mortgage. 

6. Know your prepayment penalty. 

When choosing between fixed-rate mortgages, be sure to compare how the early payout penalty is calculated. If you ever need to terminate your mortgage early, having the right mortgage could save you thousands. If you take a lower rate mortgage with a high prepayment penalty, the benefit of that lower rate could mean nothing if you overpay on the penalty to get out of your mortgage.

Meet Keri Alain

Keri is an incredible licensed mortgage assistant. However, her credentials are just the beginning of her superpowers. It’s who she is that makes all the difference in the world for clients.

Admittedly, it doesn’t hurt that she’s ultra-organized (cleaning is officially one of her hobbies!) But more than anything else, what makes Keri so terrific is that she knows firsthand what it takes to buy and keep a home. When she first went house shopping – at just 25 years old! – Keri wasn’t even sure what a mortgage broker was, exactly. But she knew highrise living wasn’t for her and wanted a more traditional home. Like many first-time buyers, she pushed past her nerves and uncertainty to make it happen. Soon, that first home became the perfect spot to raise her son – and then another son!

Things evolved over the years. In her own words, Keri says: “Life goes on, years go by. In 2018, I sent a text to my mortgage broker and explained to her that I need help, my marriage is dissolving, and I want to keep my house on my tiny ass income. Who goes to their broker first in a situation like this? Jacquie Bushell’s clients, that’s who.”

It wasn’t long before Keri’s real-world experience with the challenges and joys of homeownership were put to good use in the office. On any given day, she’s engaged in everything from preparing major documents to what she calls the “little nitty gritties” of the home buying process. And she’s still as busy as ever in her own home, raising two boys – and occasionally escaping with some TV downtime for herself at the end of the day. Passionate about sharing food, Keri loves cooking, especially for her friends.

Originally from Jamaica, Keri says” “I migrated to Canada in April of 2010. I had no clue what to expect or where I was going.” It’s fair to say that since then, she’s mastered the art of turning a house into a home!

Rates

Rates are on the rise with the impact of inflation. Do NOT panic! We are just going back to a more normal rate environment.

5 year fixed –    insured* 2.29%

5 year fixed – –  uninsured 2.54%

5 year fixed —   insurable* 2.34%

10 year fixed – 3.09%

5 year variable  – insured*   Prime 2.45% – 1.00% = 1.45%

5 year variable –  uninsured*Prime 2.45% – 0.75% = 1.70%

5 year variable –  insurable* Prime 2.45% – 0.90% = 1.45%

Insured = Client paid CMHC/Default Insurance

Uninsured = no default insurance was paid – 20% or greater  equity or down payment

Insurable = meets the insurers guidelines but the client does not pay the premium – 35% equity/down payment or greater = build insured

There was no change to the Bank of Canada prime rate. However, BoC did indicate it may move earlier in 2022 than expected. 

I am not concerned. I still believe variable rates are the way to go when used with a fixed-rate payment strategy; This is one of the best ways to pay down the principal portion of your mortgage in an efficient manner. 

This means,” You use the variable rate mortgage, but create a payment that reflects the current fixed rate. The difference between the two payments goes directly to the principal. BAM! You now have a fixed rate payment, and the interest you were willing to pay to the bank is now going directly to your mortgage principal. 

What really happened in 2020?? 

For those who are statistics minded. Find the Residential Mortgage Industry Report for 2020. Enjoy. 

Download Report

 Canada Housing Market: Slower Price Growth

Just when you thought you heard enough about housing, here’s more. 

The housing market is now showing signs of returning to earth.  

The COVID-19 pandemic drove massive activity in the Canadian housing market. The drop in interest rates, combined with historic fiscal support, encouraged many Canadians to upgrade their lodgings. As a result, almost all indicators of housing market activity shot through the roof. The increase in borrowing, spending and investment-linked to housing helped stave off worse macroeconomic outcomes during the depths of the ensuing recession.

The housing market is now showing signs of returning to earth. House price appreciation notched its slowest pace in seven months in September. Building permits and housing starts appear to have peaked in March, with the last five months of data showing a noticeable slowdown. Further, prices for raw materials are responding to normalizing demand. The second-quarter GDP report showed a sharp drop-off in commissions and fees related to sales activity. This is consistent with Canadian Real Estate Association data showing a 15% year-over-year contraction in overall transactions. 

Download Report

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