Mii Mortgage Group

The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding but remains uneven, balancing strong activity in emerging market economies with weak growth in some advanced economies. In the United States, the recovery in private demand is being held back by high unemployment and recent indicators suggest a more muted recovery in the near term.

Economic activity in Canada was slightly softer in the second quarter than the Bank had expected, although consumption and investment have evolved largely as anticipated.  Going forward, consumption growth is expected to remain solid and business investment to rise strongly. Both are being supported by accommodative credit conditions, which have eased in recent weeks mainly owing to sharp declines in global bond yields.

The Bank now expects the economic recovery in Canada to be slightly more gradual than it had projected in its July Monetary Policy Report (MPR), largely reflecting a weaker profile for U.S. activity. Inflation in Canada has been broadly in line with the Bank’s expectations and its dynamics are essentially unchanged.

Against this backdrop, the Bank decided to increase its target for the overnight rate to 1 per cent. As a result of monetary policy measures taken since April, financial conditions in Canada have tightened modestly but remain exceptionally stimulative. This is consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.

Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.

Information note:
The next scheduled date for announcing the overnight rate target is 19 October 2010. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 October 2010.

If you’re looking to increase the value of your home through a renovation project, it can often be overwhelming finding a place to start.

Since very few homeowners have unlimited funds to play with, it’s important to start with the projects will give you the most bang for your buck. Below are the top three areas you should focus on, according to the Appraisal Institute of Canada:
1. Painting and interior decor

Most prospective buyers can’t help but fall in love with a well-staged home. Investing the time to add a coat of paint to the walls and either buy or rent some fashionable furniture will go a long way in getting a ‘sold’ sign on your front yard.

2. A chef’s kitchen

While a kitchen renovation can often be the most pricey, you’re virtually guaranteed a return on your investment. New buyers love new appliances, fancy counter-tops and plenty of storage space.

3. A bathroom fit for a king

They don’t call it the ‘throne room’ for nothin’. A bright, clean bathroom – with nice fixtures and tiling – will make prospective buyers feel at home.

A recent article in the Financial Post has stirred up the fixed vs. variable rate once again – hinting that the variable rate’s reign may soon be coming to an end.

Historically, variable rate mortgages have saved homeowners money, averaging a lower rate than the typical five-year fixed-rate mortgage. With the Bank of Canada’s widely-known decision to raise the Prime rate over the next few years, and the bond market bringing fixed rates back to record lows, the tides may be turning.

When it comes to deciding which product is right for you, it’s best to ignore historic trends and focus on your particular situation. If you’re on a tight budget with no room to move, a variable rate isn’t right for you because it has the potential to increase up to ten times per year. If you find the qualifying rate uncomfortable – the current posted five-year fixed rate – then again, it’s likely not right for you.

If you’ve determined that you can handle the fluctuations of a variable rate, it might be in your best interest to choose that route but pay it at the current posted five-year fixed rate. The extra payments will allow you to drastically cut into your principle, and your budget won’t be affected for quite some time – at least until variable rates hit the 5% mark.

Another option is the hybrid mortgage – which allows you to split your mortgage into a variable and fixed component, thus taking advantage of the best of both worlds.

To truly determine the option that’s best for you, however, why not give me a call? There’s no obligation to sign on the dotted line, and I’d be happy to uncover the best mortgage for your needs.

Mii Mortgage Group is very excited about our partnership with Regina’s fastest growing real estate firm! In less than three years Exit Realty Fusion has gone from 6 agents to 35 agents. They have shown a 700% increase in sales from year one to year two and they have attained a 15% share of the Regina market. With 15 new agents in training it appears the sky is the limit for this firm.

In yet another innovative move by Canada’s most innovative real estate firm, Exit Realty Fusion is rewarding its clients by sending them on a FREE cruise for two on the Carnival Line of cruise ships. They are among the world’s best cruise ship lines and they stop at nothing to make sure your trip is the trip of your dreams. You’ll have a choice of cruising Mexico or the Bahamas. How do you get a FREE cruise you ask, do one of the following:

1. Buy a home through an Exit Agent
2. List your home with an Exit Agent
3. Refer a friend to an Exit Agent

Contact a broker at Mii Mortgage Group or any agent at Exit Realty Fusion for more information about the FREE cruise! Also visit our websites for more information:

http://www.miimortgagegroup.com/cruise_promotion.html

http://www.exitrealtyfusion.com/referral.html

While virtually every other bill you can think of can now be paid online, high credit card costs force many landlords to continue to rely on paper cheques for their payments. While this likely worked in the past, today’s renter is used to the convenience of online payments.

US-based WilliamPaid.com positions itself as a solution to that problem. The company promotes itself as an online resource for renters and roommates, that provides flexible rent payment options, including the ability to pay rent with a credit or debit card. It also allows users to build their credit rating by reporting their payments to the credit bureau.

While this service, or a similar one, isn’t yet available in Canada, landlords aren’t tied to paper cheques. More and more financial institutions - and bank account holders - are turning to email money transfers to pay their bills. To receive money via email, all a landlord would need is a valid email account. It might be something to think about when dealing with less-than-prompt tenants.

The Bank of Canada today released its 2011 schedule of eight dates for announcing decisions on its key policy interest rate and confirmed the announcement dates for the remainder of this year.

The announcement dates from September 2010 through December 2011 are:

Wednesday, 8 September 2010
Tuesday, 19 October 2010
Tuesday, 7 December 2010

Tuesday, 18 January 2011
Tuesday, 1 March 2011
Tuesday, 12 April 2011
Tuesday, 31 May 2011
Tuesday, 19 July 2011
Wednesday, 7 September 2011
Tuesday, 25 October 2011
Tuesday, 6 December 2011

All announcements will continue to be made at 09:00 (ET).

Over the past couple weeks we have seen interest rates start to pull back slightly. There are some great rate specials available today, take a look:

5 Year Fixed – No Frills – 3.89%

This product has reduced pre-payment privileges but offers the best rate. Great for clients who don’t expect to make any extra or lump sum payments on their mortgage.

5 Year Fixed – Quick Close – 3.99%

This product must close within 45 days of your application. It provides full pre-payment privileges.

5 Year Fixed – 4.09%

The regular 5 year fixed mortgage is available for a 120 day rate hold guarantee, great for pre-approvals!

5 Year Variable – Prime – .60% = 2.15%

The variable product floats with the prime lending rate and provides full pre-payment privileges.

Take advantage of these great low rates because as the economy in Canada starts to recover the interest rates will be rising. We have already seen the Bank of Canada move the prime lending rate from 2.25% to 2.75% in the past couple months. Fixed rates are sure to rise throughout the remainder of 2010.

Apply Online at http://miimortgagegroup.com/mortgage_application.html

Your credit score is probably the most important component of your mortgage application because it’s the primary factor that banks and lenders use to determine your creditworthiness. It tells lenders how likely you are to pay your bills on time, because it reflects every credit card, loan payment and late payment you’ve ever made – and every bankruptcy or credit problem you’ve undergone. With so much weighing on this tiny little number, it’s important to understand what it is, how it’s calculated and what you can do to manage it.

1. What is a Credit Score?

Canada’s two credit bureaus, Equifax and TransUnion, are independent companies that make their money from collecting information about your credit history.

Other businesses that utilize the services of these bureaus meaning, they report to and collect information from them include virtually every credit card company, loan entity (student or otherwise), car leasing company, utility company, collection agencies and pretty much anyone else you pay money to on a regular basis – with the exception of your mortgage. For some reason, mortgages aren’t reflected on your credit report.

The bureaus monitor the activity on a regular basis (typically monthly) and assign a credit score to you. This number ranges from 300 to 900, although anything in the 700s is considered to be good. To qualify for credit, you typically don’t want to be lower than 620, and definitely not lower than 600.

In general, the higher your score, the lower the probability that you will become delinquent on credit extended to you. And while many lenders use bureau scores to help them make lending decisions, each lender will base its decision on more than just the score.

2. What is used to calculate my Score?

While each credit bureau is different, both rely on similar algorithms to determine an individual score. Below is an approximate breakdown.

Payment History (35%): Your credit score will be higher if you pay your bills on time, as opposed to submitting late payments, or worse, not pay outstanding debts at all.

Current Debt (30%): Just because you’ve been approved for a $10,000 credit limit doesn’t mean you should use it all! The more credit you use, the lower your score will drop. TransUnion recommends keeping your credit card balance below 50% of your allotted limit, and ideally around 30%. With this in mind, if you’re someone who relies on a credit card a lot, it might be better to implement some spending discipline rather than asking your credit card company to drop that $10,000 limit to $500.

Length of Credit History (15%): The longer you’ve been proving yourself as a reliable borrower, the higher your score will be. Someone without a lengthy track record of paying back debts is likely to have a reduced credit score.

New Credit (10%): If you have a lot of companies viewing your credit report in a short period of time

Types of Credit (10%): Your credit score is partly calculated based on the types of credit and loans you have – such as credit cards, retail accounts, installment loans, mortgages, and consumer finance accounts. A healthy mix of all of these types will boost your score.

3. What can I do to improve my Credit Score?

Keeping the above information in mind, below are the most important things you can do to improve your credit score:

Pay your bills on time. If possible, set up automatic payments for all of your regular bills. Many credit card companies also have a service that allows you to automatically pay your minimum balance every month.

Don’t max out your credit cards. If you have a big purchase to make, consider applying for a lower–interest line of credit, or home equity line of credit (if you already own a home).

Choose your credit wisely. While it may be tempting to receive a new iPod – or 100,000 Air Miles – for applying for a new credit card, it’s not worth the havoc unnecessary credit can reek on your credit score. Try to limit all new credit applications to those you genuinely need.

Keep an eye on your credit profile. Make sure there are no erroneous charges – and no fraudsters taking over your identity. Both Equifax (www.equifax.ca) and TransUnion (www.TransUnion.ca) allow you to order your credit profile for free on an annual basis. It’s wise to order one from each company, since they feature different information.

Be patient. Unfortunately, it can take awhile to see the fruits of your credit–improving labors. If you follow the above steps on a consistent basis, however, you’ll be qualifying for that stellar mortgage rate in no time!

The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.

The global economic recovery is proceeding but is not yet self-sustaining. Greater emphasis on balance sheet repair by households, banks, and governments in a number of advanced economies is expected to temper the pace of global growth relative to the Bank’s outlook in its April Monetary Policy Report (MPR). While the policy response to the European sovereign debt crisis has reduced the risk of an adverse outcome and increased the prospect of sustainable long term growth, it is expected to slow the global recovery over the projection horizon. In the United States, private demand is picking up but remains uneven.

Economic activity in Canada is unfolding largely as expected, led by government and consumer spending. Housing activity is declining markedly from high levels, consistent with the Bank’s view that policy stimulus resulted in household expenditures being brought forward into late 2009 and early 2010. While employment growth has resumed, business investment appears to be held back by global uncertainties and has yet to recover from its sharp contraction during the recession.

The Bank expects the economic recovery in Canada to be more gradual than it had projected in its April MPR, with growth of 3.5 per cent in 2010, 2.9 per cent in 2011, and 2.2 per cent in 2012. This revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.

Inflation in Canada has been broadly in line with the Bank’s April projection. While the Bank now expects the economy to return to full capacity at the end of 2011, two quarters later than had been anticipated in April, the underlying dynamics for inflation are little changed. Both total CPI and core inflation are expected to remain near 2 per cent throughout the projection period. The Bank will look through the transitory effects on inflation of changes to provincial indirect taxes.

Reflecting all of these factors, the Bank has decided to raise the target for the overnight rate to 3/4 per cent. This decision leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending, and the uneven global recovery.

Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.

The next scheduled date for announcing the overnight rate target is September 8, 2010.

Things to consider

Variable rate and fixed rate mortgages both have their advantages and disadvantages!! Historically speaking, homeowners tend to pay lower rates with variable mortgages, but these mortgages are also vulnerable to fluctuations because they’re tied to the Bank of Canada’s prime rate (which is announced eight times per year). Fixed rates, on the other hand, are typically higher than variable rates, but their rate is consistent throughout the term of the mortgage. Below are a few questions to help you determine which type of mortgage is right for you:

1. Can I afford to take a variable rate mortgage?

There is some risk associated with variable rate mortgages, so if you go this route, you must be able to mitigate the risk if rates do rise. One method of protecting yourself involves setting your payment to a fixed amount that’s higher than the minimum requirement. For example, setting your payments based on the current five year fixed rate will allow you to provide a buyer in the event that rates rise and, because you’re paying more than the minimum amount, you’ll be paying more of your principal as well. Opting for a 35-year amortization but paying the 25-year amortization-sized payment is another way to protect yourself from increasing rates. If they ever get too high for comfort, you can go down to the lower 35-year amortization payment until rates decrease again.

2. What type of variable rate mortgage should I choose?

Once you have decided you can afford a variable rate mortgage, the next thing to assess is whether a variable rate mortgage fits your personality, lifestyle and comfort zone. If you’re the type of person that can’t sleep at night knowing that your rate may change by 0.25%, then a variable rate mortgage may not be the best option for you.

3. Does a variable rate mortgage fit my risk profile?

There are three main factors to consider when choosing a variable rate mortgage:

1. Payment frequency – Make sure you are aware of the options available before deciding. Some lenders may not allow certain variations of payment frequency (i.e. accelerated biweekly or weekly payments).

2. Rate changes – Some lender change their variable rates in line with the Bank of Canada – eight times per year – while others adjust them quarterly.

3. Conversion to fixed rate – Does the lender allow the mortgage to be converted to a fixed rate mortgage at any time? If so, what rate are you guaranteed on conversion – the best-discounted rate or the posted rate?