1 Dec

Fort McMurray plans to have new affordable housing options!

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Posted by: Jessie Lavoie

CMHC releases news that Fort McMurray plans to have new affordable housing options for seniors and local residents.

Read the attached article for more information!

http://www.cmhc.ca/en/corp/nero/nere/2014/2014-11-21-1400.cfm

As always, I can easily be reached on my cell for any questions you may have.

Thank you

Jessie Lavoie

604-836-9268

15 Oct

Kitchen updates that make an impact

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Posted by: Jessie Lavoie

Looking to do some renovations or remodelling of your home before you sell to get the highest sale price possible? Updating the kitchen is where you will get the most bang for your buck. It can get costly, but if you are smart about it, and make a lot more little changes then one big change, it can make the world of difference!

Here are some things you might want to consider updating:

Faucet

Faucets can set the tone of your kitchen. They establish the style of the kitchen instantly. Consider a lever faucet for a more sleek and modern look.

Light

Add light to your kitchen. It can be anything from pot lights, a new hanging fixture to give it that elegance or simply new efficient LED bulbs to ensure it is a bright space. Electrical work can always be costly, but it is one task that will add tremendous value.

Cabinets

Give your cabinet’s new jewelry. Instead of replacing the entire cabinet, look at simply adding a more sophisticated handle to them, even giving them a nice sanding and paint job can do the world of difference. Cabinets are one of those things, that you can seriously save some coin by taking on the task yourself and making it a fun DIY project. You will be happy you did!

Backsplash

Adding a tiled backsplash to your kitchen is the easiest to way to completely change the look of your kitchen. Whether it be a subtle textured tile, or a bright and impactful tile to make a statement, it is a sure way to spice up your kitchen.

Paint

This may seem like a no brainer, but a simple updated paint job can give it that clean sophisticated look.

Happy updating!!!

Jessie Lavoie
Dominion Lending Centres Valley Financial
604-836-9268
jessieb@dominionlending.ca

7 Oct

Avoid common mistakes when purchasing a home

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Posted by: Jessie Lavoie

Buying a home can be one of the most exciting times of your life, along with the most stressful time! Here are 5 common mistakes for you to avoid when buying a home.

1. Do not, go over budget

This may seem like a no brainer. However you would be surprised how many clients I work with that have a budget of X amount of dollars, and find something they absolutely love but just can’t afford, yet buy it anyways!! It’s like buying a new car, you never test drive a car you know you can’t afford.

10,000-20,000 extra in purchase price can make a huge difference. When you are purchasing a home you don’t tend to look at what life may throw at you. Always consider, that the reality is, life happens, and you need to be prepared for when it does. A good rule to follow is the 50/20/30 guideline. 50 % of your monthly take away income goes towards fixed costs, meaning bills that are the same and expected every month. (Phone bill, car insurance, gym membership, mortgage or rent payment, utilities etc.) 20% of your monthly take away income should be towards your financial goals. Now this is different for everyone, if you have debt you need to pay down. This should go towards that. If you have no debt, this should go directly into a savings account. And lastly, 30% of your monthly take away income goes towards flexible spending, this is spending that varies from month to month, such as groceries, gas, entertainment, meals out etc.

2. Factor in added costs when buying a home, forgetting this can be a huge mistake!

The first 6 months tend to be the hardest when moving into a new home. The reason is, you are not simply replacing your rental payment for your mortgage payment. There are initial lawyer fees, property tax, start up cable costs etc. Factor in every single cost in order to make your budget, and not simply what the mortgage payment will be.

3. Do not skip the inspection!

Yes it is an added cost, however…what could be worse, is finding out it’s a leaky condo 5 years down the road and getting a bill of 20K. Have the inspection for peace of mind and to ensure you are living in a safe and sturdy home. Keep in mind, if there are minor repairs that need to be done, you may be able to negotiate the purchase price in order to factor in repair costs.

4. Get everything in writing and read the fine print!

Again, this one may seem like a no brainer but be sure that this step is not skipped. Although you have a mortgage broker, realtor and lawyer working on your behalf, you need to be aware of the entire process, the realtor may read something and think it is not problem, where as you read it and you are not happy with it….everyone’s perception is different. You are spending too much money to not have everything on paper and the fine print read.

5. Do not put down a nominal down payment

Now this one is different for each person. Yes it is in your best interest to put the most money down you can in order to save on insurance premiums and have your best chance at getting the best mortgage product and interest rate. However, I know that is not the case for everyone. If you are not capable, that is no problem. But if you are, a big mistake is clients will have 50K saved in the bank and only put 15K down. The problem with that, is you are now paying possibly 10k or even more on insurance premiums, so you are better off using that 50K and putting it straight into your biggest investment….your home!!!

11 Oct

Tips for Buying Your First Home!

General

Posted by: Jessie Lavoie

Owning a home to call your own is on the top of Canadians priority’s list. There are however a lot of factors to consider when buying your first property because it is one of the biggest financial decisions you will ever make.

Like any decision that involves a large chunk of money there are good and bad decisions you can make, that’s why you need to always do your research so you can feel comfortable and confident when making that big decision.

Here are some tips for setting your foot in the market for the very first time:

Choosing a home

-Avoid making an emotional decision as best you can, stick to logistics and math.
-Research the neighborhood well. Spend time there during the day and at night to make sure it is the kind of living you are looking for. Spend time at the local coffee shops, shopping centres and restaurants to be sure it is the neighborhood you want to start off in when purchasing a home.
-Have a professional check the property to make sure there are no issues and it is structurally sound.

-Pay close attention to additional costs when buying a home. Such as legal fees, appraisals, inspection fees and property insurance. Also make sure that you are including in your budge strata fees, property taxes etc.

-Consider starting small so you do not put yourself in a bad situation where you are “house poor”. Strata fees and property taxes are also always higher in more expensive properties. Start small then you can build your equity and after living there for a few years you can upgrade with the equity in your home

Mortgages and Interest

-Possibly one of the most import things when consider your mortgage and finance when buying a home is to save as much as you possibly can. If you make the decision to buy a house well before you actually are going to make the move then do whatever you can to save everything. The more you save the less you are paying in interest and the cheaper your monthly payments will be. You need to have a minimum of 5% down payment but if you have time and can save and aim for 20% you also save in insurance premiums.

-Use a mortgage broker so they can shop around for the best interest rate for you. Going to a bank they only have one option for you, whereas using a mortgage broker they do the shopping for you to get you the best rate and product for you.

-Pay attention to the fine print because not all mortgages are the same and you need to make sure the mortgage you are getting is the best product for you. Talk to a mortgage broker to get a professionals advice-their services are free.

-Play around with mortgage calculators. Don’t assume that a 25 year amortization is the best term for you just because your payments are lower. The longer the amortization is, the more you are paying in interest. However, you also need your payments low enough where you can survive.

-Stick to what you can afford. Mortgage repayments should not account for any more than 40 per cent of your monthly income, preferably less. Anything more is considered “mortgage stress” because it leaves your with little, if any, leftover once other home ownership cost and living expenses are accounted for.

Please call me if you have any questions. I am always available to help!
Thank you

Jessie Beausoleil
Dominion Lending Centres
604-836-9268
jessieb@dominionlending.ca

26 Sep

How to decide on fixed or variable mortgage? Make an educated decision

General

Posted by: Jessie Lavoie

Mortgage rates are doing things that few people expected one year ago. Variable discounts have been sliced in half and those cunning banks are persuading us to pay disproportionately high fixed rates despite near-record-low funding costs.

Looking forward…

Some say rates have only one way to go from here (up). Some say rates will stay flat for two years. Some say rates will drop again soon.

Mortgage shoppers trying to pick a term might find all this uncertainty paralyzing. So what do you do when you don’t know what to do? You take your best educated guess.

There is never enough data to make perfectly optimal mortgage decisions. You’d need a really powerful time machine for that. But understanding the true risks of each term can improve your lot substantially.

On that note, we’ve compiled a fairly comprehensive list of pro-variable-rate and pro-fixed-rate arguments below. At the very bottom, we try to boil it all down.

Why Go Variable?

77% of the time, variable wins—historically speaking. That’s according to the usual widely-quoted . (This conclusion is based on fully discounted rates.) BMO variables have been cheaper 83% of the time, but we’re not sure what assumptions they used.Statistics, Statistics:mortgage research says
Lower Penalties: People often break their mortgages early, for various reasons (including refinancing, selling, divorce, moving to a mortgage with a better rate/more flexibility, etc.). The average duration of a 5-year variable is about 3.3 years according to bank sources. Most variables let you escape your contract with a 3-month interest penalty, whereas fixed rates can hit you hard with interest rate differential (IRD)—even if rates stay relatively flat (many people don’t know that). “Everyone I know that’s mad about their mortgage attributes it to IRD,” says Peter Majthenyi, one of Canada’s highest volume brokers.
Less Rate Risk: Compared to prior economic recoveries, economists believe that it won’t take as many rate hikes to cool Canada’s overleveraged slow-growth economy this time around. A 3% policy rate may do the trick today, whereas it’s taken a 4.20%+ rate (on average) to bring the economy and inflation to equilibrium in the past (see: neutral policy rate). If true, a 3% key lending rate implies a 5% prime rate over the next five years. That’s a quite tolerable 2% higher than today.
Slower Rate Hikes: CIBC economist Benjamin Tal says: “We know the five-year (fixed) rate is attractive, but we also know short-term rates are not [rising].” The U.S. Fed has pledged to remain on hold till 2013. Moreover, TD says: “The Bank of Canada has repeatedly noted that there are limits to how much Canadian short-term rates can diverge from those in the United States.” Here’s an associated factoid: Since 1996, when the BoC started adjusting rates in 25 bps increments, rate-increase campaigns have lasted an average of 14.6 months, during which time rates increased an average of 170 bps. Of course, by definition, each rate-increase cycle was followed by a plateau, and then a rate decrease cycle.
A Free Option: Variables let you lock in anytime for free. Majthenyi is a big proponent of variables largely for this reason. “If you have huge vacillations in rates and you want to take advantage of those (i.e., lock in if rates drop further, or lock in if rates look like they’ll blast off), you can do it for free in VRM…but not in a fixed.” Being able to renegotiate sooner appeals to Majthenyi, and he applies that logic to shorter fixed terms as well. Even if a 4-year fixed had the same rate as a 2-year fixed for example, he says: “I’d rather come up for renewal sooner so I’d take the 2-year over the 4-year hands down.”
Fixed Payments: Some lenders let you fix your payments so that they don’t move when prime rate moves. Fixed payments, therefore, provide some peace of mind when rates start climbing. The exception is if prime skyrockets and your “trigger rate” is hit (i.e., rates jump so high that you’re not covering all your monthly interest). In that case, your payments will generally be adjusted higher.
Payment Matching: When variable rates are lower than fixed rates, you can increase your variable payments to match a 5-year fixed payment. That whittles down principal faster and cuts your interest paid (not interest rate) by perhaps three-quarters of one percent over five years. For example, if you pay $50,000 of interest over five years on a $300,000 mortgage, this strategy might save you something like $350-$400 in a slow rising rate environment. It’s not as much savings as some advocates of this strategy make it sound, but it’s definitely something. (Note: The precise savings depends on your mortgage terms, rate trends, etc. We’ve made certain assumptions including: a 25-year amortization, a prime – 0.50% rate vs a 2.99% four-year fixed, 100 bps of rate hikes starting Dec. 2012, 100 bps more starting Dec. 2013.)
Timing is Futile: Even if you had the ability to predict rates one year ahead of time, it wouldn’t help. That’s what Prof. Moshe Milevsky found in a 2008 study (See “Locking In” on page seven of this.) The problem is, knowing short-term rates doesn’t help you predict long-term rates, and the majority of mortgages are 3+ years. In the past, short-term rates have often surged, only to fall back within 18-24 months. People who lock in on the way up frequently lose out as a result. Associated fact: In the four previous rate cycles, rates reversed lower within 4 months (on average) from the last rate hike.

Why Go Fixed?

Historical research clearly establishes that variable rates have had an edge, but past performance does not foretell the future. Rates have fallen steadily since 1981. By definition, variable mortgages can’t help but outperform with that kind of trend.Research Bias:
Cheap Insurance: The difference between today’s variable rates (prime – 0.45% on the street) and good fixed rates (e.g., 2.99% for a 4-year) is remarkably tight at 44 basis points. That “safety premium” is the equivalent of less than two Bank of Canada rate hikes. Knowing that you won’t get skewered by escalating rates is worth something.
Economic Lows: It’s somewhat debatable, but one could assume that we’re somewhere near the bottom of an economic cycle. If so, rates will ascend as the economy makes a comeback. RBC writes: “Our assessment is that the market has become too pessimistic on the growth outlook and that the economy will re-accelerate, resulting in steadily rising rates during 2012.” Adds BMO: “Considering the likely upward trend in interest rates, this may be one of those rare periods when a fixed rate turns out to be the superior choice.” (If you think banks have a fixed-rate bias and that statement makes you cynical, we can’t blame you.)
Abnormally Low Yields: Fixed rates are at generational lows, largely for temporary reasons (like the safe-haven bond buying that’s driving down yields). Remember, bond yields lead fixed mortgage rates. Could yields go lower? Yes. Will they stay that low? Many think not. 1.40%-1.50% is a meagre reward for loaning the government money for five years—however safe it may be. Mind you, people said the same thing about Japanese bonds (exceptions to economic “rules” never cease).
Certainty: Not having to monitor and time the market means one less thing to worry about in life. If you intend on locking in your variable down the road, you’ll need to be exceptionally accurate with your timing. People who are that prescient may be better off quitting their jobs to manage a hedge fund.
Fixed Demand: When the BoC starts tightening next, some think fixed mortgage rates could shoot up faster than normal. According to John Bordignon of Paradigm Quest, there is as much as $350 billion worth of variable-rate mortgages at the moment. “This is probably the highest level (of outstanding VRMs) we have seen in the Canadian mortgage market.” If there were a flood of variable-to-fixed conversions in any given quarter, and demand for fixed rates doubled in that quarter, “There is just not enough 5-year money out there,” he says. June 2010 provided a small taste of what could happen. “Fixed-rate cost spiked 60 basis points. Merix (a prominent non-bank lender) experienced four times the number of conversions as normal. People panic.” This, of course, increases the risk of locking at a bad rate.
Qualification: High-ratio borrowers cannot always qualify for a variable rate. That’s because lenders approve you based on your ability to make much higher payments (See: qualification rate). But don’t despair, you can always get a fixed-rate today and then go variable at renewal. In fact, when you renew you may not even have to qualify at a higher rate. (Default insurers don’t require requalification on renewal, assuming you’ve paid your mortgage as agreed. That is subject to your lender’s own policies of course.)
Costly Conversion: Variables are sold with the benefit of being able to convert to a fixed rate anytime. But that entails “slippage.” In other words, the fixed rate you’ll get when converting is worse than the rate you may expect. Some banks’ conversion rates are as high as posted – 1%. Meanwhile, those same banks give new customers posted – 1.50%. Never expect a great rate when locking in a variable to a fixed. You’ll get an okay rate, even a decent rate if you’re really lucky, but never a great rate. That slippage multiplied by several months can boost borrowing cost materially.
Assumptions Favour Fixed:When making decisions in uncertainty, you’re forced to make assumptions. If you’re a bearish mortgage analyst, you might assume:
- Prime rate will stay as is until April 2013 (near when the U.S. Fed’s conditional rate-hold pledge expires)
- Rates will then rise 150+ bps in the next 1.5 years.
In this scenario, a 2.99% four-year fixed costs less than a variable over five years, other things being equal (including payment matching for equal monthly payments).

(Click chart to enlarge)

Parting thoughts…

Term selection relies on so many things:

fixed/variable suitability factors
the probability of breaking the mortgage early (and needing to pay a penalty)
the chance you’ll want/need to lock in
interest rates (present and future),
etc. etc.

The above conclusions and five years of research have convinced us of one thing. It’s a Vegas-style gamble to select a variable-rate mortgage with intentions of locking in “at the right time.”

You’re better off either:

a) Going variable and staying variable (barring a personal/financial crisis that would necessitate locking in).

b) Going fixed and staying fixed (assuming you find an unusually good fixed rate).

c) Going half fixed and half variable (In that case, you’ll never be more than half wrong.)

Keep in mind, there are lots of fixed terms besides the age-old 5-year. The sweet spot today—assuming economist rate forecasts are remotely accurate—is a 4-year fixed under 3%. You’ll find this through approved Street Capital and Industrial Alliance brokers, among other places (no telling how long that rate will last).

Qualified borrowers should also consider Scotia’s 2-year special. It has a tantalizing fixed rate of 2.49%, which is below most variables on the market.

Whatever you pick, the good news is this. The cost of choosing the wrong term has probably never been lower. Fixed-variable spreads are tight as a vice, money is almost as cheap as ever, and expectations are that long-term rates will stay “lower for longer.” (Economists seem to love that buzzphrase.)

As a result, if you screw up and select the wrong term, it should be a lot less costly than it would have been in years like 1980-81, 1989-90, and 1999-2000

Please call me should you have any questions!
I am always available to help:)
Thank you

Jessie Beausoleil

Source: http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/09/the-fixed-or-variable-mortgage-conundrum.html

19 Sep

Housing market correction appears to be under way!

General

Posted by: Jessie Lavoie

Good afternoon everyone!

Looks like the housing market correction appears to be under way. Financial experts are telling Canadian’s that this will be a manageable correction for most. It is expected to happen gradually over the next 3 to 4 years. See the article below for more information.

http://www.theglobeandmail.com/report-on-business/top-business-stories/housing-market-correction-appears-to-be-under-way/article4550688/?cmpid=rss1

Jessie Beausoleil
Mortgage Professional
604-836-9268
jessieb@dominionlending.ca

17 Sep

10 great reasons to use a mortgage broker!

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Posted by: Jessie Lavoie

Good afternoon,

Welcome to my first blog entry! My name is Jessie Beausoleil and I am a mortgage professional with Dominion Lending Centres. I will be posting the inside scoop here on the industry. You will be able to find industry news, tips and trends here.

10 great reasons to use a mortgage broker!

1. Get independent advice on your financial options. As independent mortgage brokers we’re not tied to any one lender or range of products. Our goal is to help you successfully finance your home or property. We’ll start by getting to know you and your homeownership goals. We’ll make a recommendation, drawing from available mortgage products that match your needs, and we will decide together on what’s right for you.

2. Save time with one-stop shopping. It could take weeks for you to organize appointments with competing mortgage lenders – and we know you’d probably rather spend your time house-hunting! We work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. It makes comparison-shopping fast, easy, and convenient.

3. We negotiate on your behalf. Many people are uncertain or uncomfortable negotiating mortgages directly with their bank. Brokers negotiate mortgages each and every day on behalf of Canadian homebuyers. You can count on our market knowledge to secure competitive rates and terms that benefit you.

4. More choice means more competitive rates. We have access to a network of major lenders in Canada, so your options are extensive. In addition to traditional lenders, we also know what’s being offered by credit unions, trust companies, and other sources. And we can help you take care of other requirements before your closing date, such as sourcing mortgage default insurance if your down payment is less than 20% of the purchase price

5. Ensure that you’re getting the best rates and terms. Even if you’ve already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping! Let us investigate to see if there is an alternative to better suit your needs.

6. Get access to special deals and add-ons. Many financial institutions would love to have you as a client, which is why they often offer incentives to attract creditworthy customers. These can include retail points programs, discounts on appliances, shopping clubs, and more. We do the math on which offers might be worth your attention when it comes to financing or mortgage insurance – so you get the perks you deserve.

7. Things move quickly! Our job isn’t done until your closing date goes smoothly. We’ll help ensure your mortgage transaction takes place on time and to your satisfaction.

8. Get expert advice. When it comes to mortgages, rates, and the housing market, we’ll speak to you in plain language. We can explain the various mortgage terms and conditions so you can choose confidently.

9. No cost to you. There’s absolutely no charge for our services on typical residential mortgage transactions. How can we afford to do that? Like many other professional services such as insurance, mortgage brokers are generally paid a finder’s fee when we introduce trustworthy, dependable customers to a financial institution. These fees are quite standard nearly industry-wide so that the focus remains on you, the customer.

10. Ongoing support and consultation Even once your mortgage is signed and paperwork is complete, we are here if you need any advice on closing details or even future referral needs. We are happy to be of assistance when you need it.

If you have any questions please do not hesitate to contact me as I am always available:)
Jessie Beausoleil 604-836-9268 jessieb@dominionlending.ca