Money Matters Toronto

It is a relief to see that our city is embracing Green technology and incorporating environmentally friendly building practices in our new buildings. Three new office towers; the RBC Centre, Bay Adelaide Centre & and Telus Tower are each a showpiece of environmental design and energy efficiency. This article in the Globe & Mail by Angela Kryhul,  features the new technology being used in the RBC Centre. The new building will harvest daylight, collect rainwater and use Deep Lake Water air conditioning.

It is an encouraging sign when some of our most established business institutions are voting with their dollars to build green with the future in mind.

Last night while browsing through the news channels I came across an interview George Stroumboulopoulos did with author, economist, modern philosopher Richard Florida, last March on The Hour.

I share his view that our current recession is not cyclical but really represents a shift in paradigm into a new economy, one that he predicts will be driven by “the creative class” & not traditional industry. He also has some interesting views on real estate which I don’t share but none the less a very interesting interview.

Click here to view.

Recently I have been getting a lot of questions and interest regarding the Merix 50/50 mortgage available for financing in Toronto. This product is only available through select mortgage brokers in Canada. The current effective rate for this mortgage is 3.37% for 5 years… an amazing deal!

The Merix 50/50 Wise Mortgage is a closed mortgage that lets borrowers take advantage of low fixed rate and low adjustable rate products all in one mortgage. 50% of the mortgage is in a 5 year fixed rate and 50% of the mortgage is in a 5 year Adjustable rate. The Adjustable rate can be locked in at any time to a fixed rate for the remainder of the term of the mortgage.

If you would like to find out more about this product and how you can use it, please call Christopher Molder, Toronto Mortgage Broker at 416.461.0204ext2.

Fixed rates are like one bullet.

Have you been burnt with a variable rate mortgage in Toronto in the past? Don’t think of variable rate mortgages as a long term strategy. There is a feature built into variable rate mortgages which allows you to lock into a fixed rate mortgage with no penalty and no extra cost.

Think about fixed rate mortgages like having one bullet in a gun. The moment you fire that bullet you forfeit the ability to lock in at any other rate. If you lock in off the get go, yes you are protected from rising rates but you also lose the ability to lock in at a lower rate… so lets look at the trend. At the beginning of July the fixed 5 year rate was 4.49%, at end of July the fixed 5 year interest rate was 4.39%, by the time August rolled around the rate was 4.29%, today most banks are posting a rate of 4.19%, today I can get you an approval  at 4.09%, and some banks are comfortable enough to sell you 3.99%… what does that tell you? Rates are coming down… so much so that the bank is comfortable enough to sell you 3.99% because they know that by the time you close your mortgage 3.99% is going to be the new norm.

If you had closed at any point during the last 2 months you would have forfeited the ability to lock in at a lower rate today or tomorrow.

Talk to me about our fantastic 3 year variable special 2.40%! Christopher Molder 416.461.0204ext2

U or W?

As a Toronto Mortgage broker, my clients rely on my advice not only while they are making their financing decisions but also in the years after making the decision to determine whether they are still on the right road and on track.

As such, I pay attention to the economy. One of my favorite areas of interest is determining what shape (literally) our recovery will take.

Will it be a sharp quick recovery? Usually described as a ‘V’ or will it be a long drawn out recovery with an extended low trough, described as a ‘U’. Or will the recovery take place as a ‘W’ with two very distinct drops. We’ve already had one drop. It seems that we are on the road to recovery with Toronto real estate prices remaining firm, however, I suspect that we haven’t seen the end of the recession. I’m anticipating a second drop.

If you’d like to read more, check out Nouriel Roubini who wrote an insightful article in the Opinions section of today’s Globe & Mail, entitled “Double Dip Recession Threat“.

If you’d like to talk about your mortgage and determine how best to position yourself please don’t hesitate to give me a call. Christopher Molder, Toronto Mortgage Specialist 416.461.0204ext2

As a mortgage broker in Toronto, it’s important for me to keep on top of significant economic data. This data is useful to me as it helps me to advise my clients on decisions about interest rates and predicting opportunities and pitfalls in regards to their mortgage financing and real estate options.

The Globe & Mail reports an increase in the unemployment rate in their article “Jobless Rate Inches Up To 8.6%”. The article suggests that while the unemployment rate increase to 8.6% from 8.4% in May, the numbers are better than expected.

The Globe site hosts two interactive maps which break up the unemployment numbers by region, province, and city.
Map 1
Map 2
Continue reading Unemployment Numbers: Effect On Mortgage Interest Rates

This Past Wednesday’s Financial Post featured an article by writer Alia McMullen commenting specifically about the variance of statistics coming from the Canadian housing market. Are we up or are we down… What do you think?

Is Canada’s housing market tanking or taking off?

Recently, Terrance Belford of the Globe & Mail published an article entitled Condo resales are on a roll . The article had a very upbeat feel to it, spewing out positive sales data, interviewing the likes of Brad Lamb and the general under lying tone of the article is that the good times of real estate are back in Toronto and especially in the Condo market. The article generated some very colorful commentary from readers… an entertaining read for anyone with the time.

Don’t get me wrong, my fate is tied to a healthy economy. When people are buying houses that is good for my mortgage business however at the same time we need to be realistic and call things the way they are with some perspective. One client who is currently in the market for a condo picked up on the buzz coming from the realtor community and expressed some fear that she has missed the boat. To which I replied “Non Sense!”. Lets face it… you know we are in a recession when CBC is airing stories entitle “Wedding Bills” about how brides are cutting back on their wedding due to tough economic times!

In previous posts I talk about the conflicting sound bites coming from the media regarding the economy and the Globe article I mention at the beginning is a case in point.

I am not trying to dispute the great sales numbers from the past month ( i think it was an unexpected and delightful surprise to the real estate community who are trying to get as much leverage out it as possible) and I am not a doomsday sayer but with my back ground in economics and simple observation I am making a case for caution.

I did plenty of reading this weekend and let me present some of the tastiest bits for your reading pleasure:
Continue reading Recession and Real Estate: Looking Forward