Friday, March 28, 2008

Foreclosure Market Report - 2,203,295 foreclosure filings how can you find them?

On January 29th 2008, RealtyTrac®, the #1 online authority for foreclosures & defaulted properties, released their 2007 U.S. Foreclosure Market Report.

In their report, they mention that the 2007 foreclosures are up 75% over 2006 with a total of 2,203,295 foreclosure filings. The report also shows that more than 1 percent of all U.S. households were in some stage of foreclosure during the year, up from 0.58 percent in 2006.

Why, as a real estate buyer, should you care about foreclosures? Opportunity!

Up until now, there were very few methods of finding a foreclosure or Power of Sale (or defaulted property) in Ontario.

I tend to think a little differently than the average Real Estate Agent, which is probably why you remain part of my sphere of influence. For Power of Sale listings and foreclosures, I have created a very detailed section of my website to explain how properties end up in Power of Sale and what it means to you and how you can capitalize on buying these power of sale properties.

Read my power of sale section.

Every great adversity of the homeowner in Power of Sale brings with it a great opportunity to any buyer like you who knows where to find these properties and how to purchase them.

How?

Well, let me explain a little further...

With my POS newsletter, that alert will come to you 5 days per week showing you all the details of these power of sale properties, including the address and asking price! How can you lose?

If you are interested in receiving emails showing these new Power of Sale properties, please sign up to my POS newsletter here.

Read more about:Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Wednesday, March 26, 2008

Moving Expenses can be CRA Tax deductible

When you make a move in Canada you are sometimes allowed to deduct your moving expenses. This of course is depending upon your circumstances. This page will outline the situations where you may be able to deduct your moving expenses

Tax deductible Moving expenses

Maybe you have you recently moved to a new location? Did you know that you can often deduct certain moving expenses on your next Canadian Federal income tax return, including the costs of transportation, packing and storage costs.

Many people never realize these tax benefits because they don't know what can be deducted. If you are preparing to move, it's best to be informed beforehand so you know which receipts to keep.


You may find it worthwhile during a move to pay for various services that are tax-deductible rather than doing them yourself.

The typical move involves a number of costs including hiring a company to transport personal effects and furniture, hotel stays and meals (if the move involves driving a long distance to a new home), and service fees to disconnect and reconnect utilities. In addition, renters who leave on short notice may have to pay the cost of breaking a lease.

Homeowners will incur closing costs and commissions on the sale of their home as well as legal and other fees on the purchase of their new home. This article will enrich your information about some tax deductible moving expenses.

To be able to claim moving expenses on your Canadian Federal income tax return, your move has to meet the following conditions:

  • You moved to your new home or new apartment to start a job or a business, or to attend full-time post-secondary courses at a university, college or other educational institution.
  • Your new place of residence is at least 40 km closer to your workplace or school than your previous home.
  • You moved from one place in Canada to another place in Canada.

There are two groups are eligible to deduct a portion of their moving expenses: students moving away from home to attend school and people moving to a new area for a job or relocation by their employer.

There has been a challenge to the rules regarding eligibility for the self-employed as you'll read later in this article.

How the law applies to Students

Students must fulfill two main qualifications: the distance between your home and school must be at least 40km (by the shortest public route) and you must be a full-time student. A full-time student is defined as someone who regularly attends a college, university, or other educational institution in a program at a post-secondary school level (whether in Canada or not) and is taking at least 60% of the usual course load during each semester.

As a student, you can only deduct eligible moving expenses from award income (scholarships, fellowships, bursaries, prizes, and research grants) that you report on your return. Your moving expenses must be greater than your award in order to deduct any moving expenses. As Revenue Canada's website reads, "If your moving expenses are more than the award income you report for the year, you can deduct the unused portion of those expenses from the award."

Although many students will not earn award income and will therefore not be able to deduct moving expenses, tuition fees themselves are a tax deduction. If a student has a part-time job, tuition can reduce taxes paid on those earnings.

Students who meet the qualifications and have received award income can deduct the costs of travel, shipping and transportation of belongings, as well as items listed below under 'Expenses you can deduct'.

How CRA applies the law to Employees

If you are moving for work (e.g. a company relocation or new job), are employed and establish a home at least 40 km closer to a new job than your old home, then you qualify to deduct moving expenses. Similarly, if you are self-employed, and you establish a home at least 40km closer to your new operational business than your old home, you also qualify to deduct moving expenses.

According to Revenue Canada, you must establish your new home as the place where you and members of your household ordinarily reside. For example, you have established a new home if you have sold or rented (or advertised for sale or rent) your old home.

Employed and Working from Home: an Exception to the Rule

Until recently, employees who work from home and move have faced some restrictions regarding moving expenses. In the court decision Gary Adamson v. the Queen, Mr. Adamson had incurred moving expenses as an employee who was required to provide his own office in his home.

List of typical Personal expenses you can deduct:

  1. transportation and storage costs (such as packing, hauling, in-transit storage, and insurance) for household effects, including items such as boats and trailers;
  2. traveling expenses, including vehicle expenses, meals, and accommodation, to move you and members of your household to your new residence (you can choose to claim vehicle and meal expenses using the simplified method);
  3. costs for up to 15 days for meals and temporary accommodation near either residence for you and the members of your household (you can choose to claim meal expenses using the simplified method; and
  4. the cost of cancelling a lease for your old residence, except any rental payment for the period during which you occupied the residence.

When your old residence is sold as a result of your move, eligible moving expenses also include:

  • legal or notaries fees for the purchase of the new residence, as well as any taxes paid (other than GST/HST or property taxes) for the transfer or registration of title to the new residence, if you or your spouse or common-law partner sold the old residence, and
  • the cost of selling your old residence, including advertising, notarial or legal fees, real estate commission, and mortgage penalty when the mortgage is paid off before maturity.

This is a list of the typical Expenses that are not deductible:

  • expenses for work done to make your home more saleable;
  • any loss from the sale of your home;
  • expenses for house-hunting trips before you move;
  • the value of items movers refused to take, such as plants, frozen food, ammunition, paint, and cleaning products;
  • expenses for job hunting in another city (such as traveling expenses);
  • expenses to clean or repair a rented residence to meet the landlord's standards;
  • expenses to replace personal-use items such as tool sheds, firewood, drapes, and carpets;
  • mail-forwarding costs (such as with Canada Post);
  • costs of transformers or adaptors for household appliances; and
  • costs incurred in the sale of your old home if you delayed selling for investment purposes or until the real estate market improved.

Don't forget to keep recipient and documents supporting your claims, you do not have to include those document in you tax claim but Canada Revenue Agency may want to see them at a later date.

The tax laws are frequently modified, we recommend that you visit the Canada Revenue Agency's website for specific details about which moving expenses you can claim or consult a professional accountant to maximize your tax return. Please not that this article is for information only, you must contact your accountant or CRA to confirm that all of the above information is still applicable in your area and/or province.

Thank you and enjoy!

Mark

Good luck! Remember - many of your moving expenses can be tax deductible, so hang on to your receipts. Call CCRA Revenue Canada or visit their online site here which is an excellent resource for all the necessary tax forms! The "T1-M Moving Expenses Deduction" can be found here - form outlines who can use and claim the expenses and shows details and information on using the form.

More Moving Tips from RE/MAX

Read more about:Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Tuesday, March 25, 2008

Watch out for those Neutron Mortgage Loans!

Watch out for those Neutron Mortgage Loans

It's no wonder people in the US are in financial trouble, read this one and you will be amazed - Long-fuse mortgage bomb
ection
Americans who took out `option ARM' home loans will see monthly payments explode in coming years


New York–Joe Ripplinger took out a $184,000 (U.S.) mortgage in 2006 and makes his payments every month.

Now he owes $192,000.

The 66-year-old Minneapolis house painter has a payment-option adjustable-rate mortgage. It allows him to write a cheque for $565 a month even though he owes $1,300.

The difference is added to the mortgage, and when his total debt reaches $212,000, or after five years have passed, he said his monthly payment could jump to about $2,800, which he can't afford.

"We're barely making it right now," Ripplinger said.

The estimated one million homeowners with $500 billion of option ARMs are beyond the help of interest-rate cuts by Federal Reserve Board chair Ben Bernanke.

While subprime borrowers face an average increase of 8 per cent or less when their adjustable-rate mortgages reset, option ARM homeowners may see their monthly payments double after their adjustments kick in.

"We call them neutron loans because they're like a neutron bomb," said Brock Davis, a broker with U.S. Express Mortgage Corp. in Las Vegas. "Three years later the house is still there and the people are gone."

Once option ARM borrowers' loan balances reach a predetermined limit, called a negative amortization cap, usually 110 per cent to 120 per cent of the mortgage amount, their payment rates immediately increase. They also automatically shoot up after five years.

Otherwise, increases typically are capped at 7.5 per cent of a borrower's initial payment per year.

"These could be called long-fuse, exploding ARMs," said Kathleen Keest, former assistant Iowa attorney general and now senior policy counsel at the Center for Responsible Lending in Durham, N.C.

"I've heard people say they are the most complicated product ever offered to consumers. They are the real liar loans."

The loans accounted for 8.9 per cent of the almost $3 trillion in U.S. home loans made in 2006, up from 8.3 per cent in 2005, according to an estimate by industry newsletter Inside Mortgage Finance.

Originations of option ARMs fell 50 per cent during the first nine months of last year, the newsletter says.

"The problem is, you can refinance an option ARM to a 30- year conventional loan at a 5.5 per cent interest rate, and you're still looking at your payment going up 150 per cent," said Andrew Laperriere, managing director of New York-based research firm International Strategy & Investment Group.

"That's pretty ugly."

About $460 billion of adjustable-rate mortgages are scheduled to reset this year, with the next spike in resets coming in 2011, when $420 billion in mortgages will adjust to new interest rates for the first time, according to New York-based analysts at Citigroup Inc.

That's the year that Joe Ripplinger's payment will jump, provided he doesn't reach his negative amortization cap before then.


Read more about:Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Sunday, March 23, 2008

CMHC Update clients can now purchase rental properties (up to 4 units) with as little down as 5%

CMHC Update on investment property purchase

CMHC has just released an update where clients can now purchase rental properties (up to 4 units) with as little down as 5%.
And mortgage lenders are now allowed to use 80% rental income offset which makes it much easier for you to qualify! Let me know if you require more details and I will put you in touch with my mortgage people.
http://www.mississauga4sale.com/Investment-Property-Purchase.htm
Thank you and all the best!
Mark

read more about:Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Friday, March 21, 2008

Have you heard of the new 50 Year Mortgage?

You've no doubt seen 30 year and even the 40 year mortgage in the past year or so. But now, a Canadian mortgage and credit company is offering a 50 year amortization mortgage. Yes, you heard it right, 50 years!

The company is called Centum and they say they offer mortgage financing, home equity loans and debt consolidation especially designed for first time buyers and those with good, bad or marginal credit. Their site is labuick .com

It will likely not be too long before the other major lenders follow the lead!

Does this mean that you need to buy your first home at 15 years old to have it paid off by retirement? ;-))

http://www.mississauga4sale.com/bestrate.htm

Read more about:Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Thursday, March 20, 2008

More Canadian Tax Planning Tips






Tax Planning Tips

A Bigger Tax Refund is Yours for the Asking

No matter your age or income level, there are steps you can take to reduce the taxes you pay. It may be a matter of claiming all of the credits and deductions you are entitled to. Or it may involve splitting income with your spouse to reduce your family's total tax burden.

Under Canada's graduated tax system, the more you earn, the higher your tax rate. The rate of tax you pay on the last dollar you earn is known as your marginal tax rate (your tax bracket). It's an important concept because it tells you how much you would save by reducing your taxable income. For instance, if your marginal tax rate is 25% and you contributed $1,000 to your RRSP, you would save $250 in taxes.


Ready to get started? Explore the links below for some timely reminders to help you generate tax savings this year, as well as information on longer-term strategies.




Reduce Your Taxes Now: Maximize Your Credits and Deductions


Here are some tips to help you take advantage of available tax credits and deductions when filing your next tax return. For a more comprehensive list of credits and deductions, or specific strategies related to your situation, consult a financial or tax advisor. Not that details on credits and deductions may change from year to year. Visit the Canada Revenue Agency (CRA) website for specific amounts.


Claim all your credits
Tax credits reduce your taxes directly — a $100 credit reduces your taxes payable by $100. Deductions, on the other hand, reduce your taxable income — the higher your marginal tax rate, the more a deduction is worth to you.


Medical expenses
The medical expense tax credit is one of the most under-used tax breaks. It's available on medical expenses that exceed a prescribed amount or a certain percentage, whichever is less. Provincial tax credits also apply, but will vary according to the province of residence.






Education expenses
Post-secondary students are eligible for education and tuition tax credits. Visit the CRA Website for details. Provincial tax credits also apply, but will vary according to province of residence.






Charitable donations
Charitable giving is a great way to support the causes you care about and help your community. Your donations are eligible for a federal tax credit that increases once donations exceed $200 for the year. As with medical expenses, married or common-law couples can pool their donations to generate even greater savings.






Age and pension credits
All taxpayers over age 65 can claim the age credit but the credit available will depend on your income. You are also entitled to claim a non-refundable tax credit on up to $2,000 of qualified pension income, which includes payments from registered or pension plans but does not include CPP or QPP benefits.


Take your deductions


Think back over the past year. Are there new or one-time expenses you can deduct? You're probably most familiar with the tax deduction for your Registered Retirement Savings Plan (RRSP) contribution, but there are many others you can use to reduce your taxable income.


Moving expenses
If you moved at least 40 km to take a new job or to attend a post-secondary institution full time, you are allowed to deduct certain moving expenses. These include van rentals, the costs of hiring movers, furniture storage, and legal fees and real estate commissions involved in selling your home, among others. The amount is deductible only from income earned at the new job location or from a scholarship or research grant income.


Childcare expenses
The costs of raising a child — including daycare expenses and boarding school fees — can be deducted when both spouses are working or going to school full time. Generally, the lower-income spouse must use the deductions.


Deductions for the self-employed
If you run a home-based business, there are numerous deductions available to you. Let's say your home office takes up 25% of your total floor space. You can deduct 25% of your utilities, home insurance, mortgage interest, and maintenance costs, for example. Expenses directly related to the business, such as supplies and your business phone line, are also deductible. It's a good idea to speak to your accountant or tax advisor, and to keep accurate records.


Act Now to Save on Next Year's Taxes: Use Your Refund Wisely


You've taken advantage of available tax credits and deductions and are expecting a refund. Although it may be tempting to spend your tax refund right away, carefully reinvesting that money can generate even greater tax savings - and investment growth - for you and your family. Here are some ideas to consider:


Maximize RRSP contributions
Your RRSP remains one of your most powerful tax breaks. Not only do you receive a deduction for the contribution you make, the earnings in your plan compound tax-free. Contributing your refund to your RRSP will allow you to capitalize on up to a year's worth of investment growth. To get the most out of your RRSP on an ongoing basis, consider "paying yourself first" by setting up a regular investment plan. This will help you maximize your refund for next year.


Set up and contribute to an RESP
Saving for a child's education? If so, consider using your tax refund to set up a Registered Education Savings Plan (RESP). Although there's no immediate tax deduction, the money in the plan compounds tax-free. When the funds are withdrawn to cover education costs, they're taxable in your child's hands, not yours.






Pay down debt
If you took out an RRSP catch-up loan, consider using your tax refund to pay back the loan. This will reduce your interest costs and free up cash.


Make Tax Savings a Year-round Priority


Once you've wrapped up this year's taxes and put your refund to good use, you can start planning to reduce your taxes for next year and beyond. Here are some planning strategies to consider. You financial advisor can help you get the most out of these strategies.


Income-splitting opportunities
Because of Canada's graduated tax system, the more you earn, the higher your tax rate. If you are married or living common-law and one spouse earns more than the other, splitting income can reduce your family's overall tax bill.


Saving and investing
When both spouses are working, the higher-income earner should pay the bills and household expenses and the lower-income spouse should save and invest. Income earned on these non-registered investments may be subject to tax at a lesser rate. Be sure to keep good records and separate bank accounts if you employ this strategy.


Sharing government pension benefits
If you will soon be applying for Canada/Quebec Pension plan benefits, there is an opportunity to split income in retirement. If only one of you is entitled to benefits, or if one spouse's benefits will be significantly larger than the other's, apply to pool the benefits and have 50% paid to each of you. This can help put more money into the hands of the lower-income spouse.


Tax-smart investing outside of your RSP
Inside your RSP, all investment income accumulates tax-free. Outside your plan, the different types of investment income - interest, dividends, and capital gains - are taxed differently. Interest income, from your savings account for example, is taxed at your marginal rate, while dividends and capital gains receive preferential tax treatment. If you plan to build a non-registered portfolio, equity mutual funds are a tax-smart way to begin.








Read more about:Homes for Sale



Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,


Mark


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com


Homes for Sale

Wednesday, March 19, 2008

Interest Rate cut by 3/4 of a Point United States Federal Government


Fed Cuts Key Interest Rate by 3/4 of a Point


WASHINGTON The Federal Reserve reduced short-term interest rates for the sixth time in six months on Tuesday March 18th, capping an extraordinary series of measures it has taken to stabilize financial markets. The cut was smaller than investors had been expecting, though, and exposed some signs of a split among policy makers.

Rescue Tests the Fed's Credibility (March 18, 2008) The central bank lowered its federal funds rate the rate it charges banks for overnight loans by three-quarters of a percentage point, to 2.25 percent, and left the door open to additional rate cuts in the months ahead.
Though it was one of the biggest one-day rate cuts in decades, investors had been betting heavily that the Fed would cut its key rate a full percentage point in response to strong evidence that a recession has begun and to the deepening crisis on Wall Street.
But two members of the Fed's policy-making committee dissented, saying they favoured an even smaller rate cut, and the policy group as a whole expressed new worries about inflation a possible argument against any future cuts।


"Inflation has been elevated, and some indicators of inflation expectations have risen," the Fed said in a statement that accompanied the rate decision. "It will be necessary to continue to monitor developments carefully."

Some saw the cut of three-quarters of a point as a compromise to appease those who wanted less. Others surmised that the Fed may have been reluctant to cut rates further immediately in part because as the rates inch closer to their floor of zero, the Fed leaves itself less room to manoeuvre in case of further financial shocks. From The New York Times
Read about Canadian Interest Rates


Read more about:Homes for Sale



Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,


Mark


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com


Homes for Sale

Tuesday, March 18, 2008

Canadian Housing Market Update


Canadian Housing Market Update?

The Canadian housing market continues to lose momentum after a prolonged show of strength. Today's February existing home sales data from the Canadian Real Estate Association show that resale activity fell 6.4% from the prior month and 9.6% from a year ago. While this year's wicked winter weather has no doubt played a role, the 8.9% y/y drop in sales in the first two months of 2008 is a big turnaround from last year's 7.6% rise in overall sales.


As Canadian sales have lost steam, we are finally seeing some signs of cooler price gains as well: Average home prices were up 5.3% from year-ago levels in February, less than half of last year's average increase of 11%, and one of the smallest gains since the boom got rolling in 2002. The yearly price rise is still skewed by the mammoth 55% and 41% jumps in Regina and Saskatoon (respectively), although 7 cities reported double-digit gains last month.

The previously steaming hot Alberta markets are fully back down to room temperature, and continue to drag heavily on the overall sales figures. Sales in Calgary (-35.4% y/y) and Edmonton (-31.8% y/y) fell steeply from a year ago, while new listings continue to rise sharply. That's a nasty omen for the local markets, and both have seen price increases dip to around the 5% range.


The Bottom Line: With the further slide in February, Canadian home sales are now firmly below year-ago levels, another sign that the Great White North's housing boom is grinding to a finish. Dismal weather (unless you're a polar bear) may have exaggerated the weakness in the opening months of the year, but there are more durable factors to suggest that the bloom is off the boom. Sagging affordability and the likelihood of increased consumer caution point to calmer housing market conditions through the rest of 2008.


Read more about:Homes for Sale



Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,


Mark


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com


Homes for Sale

Monday, March 17, 2008

Bank of Canada to cut by another 50 bps in April so thinks TD/CT

Insights and highlights from TD/CT

U.S. weakness takes bite out of Canadian growth and Bank of Canada to cut by another 50 bps in April

Canada cannot escape the fallout from the U.S. economic slump was the message that rang loudly in the Bank of Canada's decision to pull the trigger on a 50 basis point cut to its overnight rate on Tuesday. In fact, in light of the increasingly "dovish" tone in the communiqué that accompanied the rate move and this week's spate of soft economic data, another rate cut in April appears a very good bet. The only question is: how much? Despite today's unexpectedly robust job report, the risks still are tilted towards another bold half-point reduction by the central bank, taking the overnight rate down to 3.00%.


Canadian growth prospects waning

This week's economic news highlighted the growing dent being placed on Canada's growth prospects from softening U.S. demand. A whopping 8.5% drop in exports was the key culprit dragging down Canadian real GDP growth to a six-year low of 0.8% (annualized) in the fourth quarter from 3% in the prior period. Offsetting the export plunge was a surge in domestic spending (+7%), spearheaded by the consumer. So, while the bite of weakening manufacturing exports to the United States is becoming more evident, domestic resilience continues to drive overall expansion – some good news there.

These trends were echoed in this morning's employment numbers – in spades! More than 40,000 net new jobs were created in Canada in February on the heels of an equally impressive gain in January and leaving the jobless rate at a 33-year low of 5.8%. Some 24,000 jobs in the export-heavy manufacturing sector were lost in the month, bringing the total losses since November to 50,000. Yet, service sector job creation powered ahead by 56,000 positions, with increases spread across public and private sectors. On a year-over-year basis, jobs in the public sector have increased at three times the pace (+6.6%) of the overall economy (+2.2%).

The blockbuster employment increase raises the question how much longer the job market can remain "decoupled" from the production side (i.e., GDP). Historical experience in Canada would argue that this divergence won't last very long. As export output and employment remain under significant pressure – which as we discuss below is very likely – there will be increasing knock-on effects to construction and services, and employment will ultimately follow suit. Governments will also respond to slower revenue growth by softening the pace of new hiring. In the meantime, the robust job market conditions continue to mitigate the risk of recession in Canada.

U.S. problems continue

With the U.S. problems leaving an increasing footprint on the Canadian landscape, this week's U.S. indicators did not provide much comfort. After being served up earlier this week with news that housing foreclosures jumped to a new high in the fourth quarter, investors received word that households are facing a rapidly-eroding employment picture. Non-farm payrolls dropped by 63,000 positions in February, chalking up the second straight monthly loss. Other indicators weren't much more heartwarming. The ISM survey of manufacturing activity slipped below 50 – the growth-contraction threshold – for the second time in the three months. On a brighter note, the export sub-index remained well above 50, indicating that a weak U.S. dollar continues to provide a boost to economic growth. The ISM non-manufacturing index rose from its depressed level of 44.6 in December, but at 49.3, remained slightly below 50.

It is the export sector – along with the stimulus from the Bush plan and Fed rate cuts – that will continue to provide key offsets to the headwinds brewing on other fronts going forward. At the same time, however, commodity prices, and notably crude oil (which rose to a new record of U$105 on Thursday) continue to rise on the back of U.S. dollar weakness. And with these elevated prices representing a tax on many U.S. consumers and businesses as well as raising inflation fears, some of the growth benefits of the currency-related weakness be increasingly eroded. In addition, the Fed will have less room to lower interest rates than otherwise would be case. Lastly, as we discuss in special report this week entitled U.S. Homeowners Not Getting Much of a Break on Mortgage Rates, the power of central banks to boost growth by rate cuts is lessened significantly when credit markets are in distress. Despite 225 basis points in Fed rate cuts, U.S. mortgage rates have barely budged.

Bank of Canada likely to go 50 again

Putting it all together, while the brisk job growth will not be lost on the Bank of Canada, we still feel that another aggressive half-point rate cut will be in the offing at the central bank's next fixed announcement date in April. By then, it will remain clear that the U.S. problems are not getting better, that the slowdown in Canada continues to broaden to the services side, and that Canada's overall economy will be hard pressed to record growth in the first quarter. Soft core inflation trends also provide credence to our call. Lastly – and importantly – we assume that the March reading on employment will better reflect the softening underlying momentum in the Canadian economy.

TD Economics releases Global Markets

This week, TD Economic released its latest installment of Global Markets, which presents quarterly forecasts for North American bond yields and international currencies. Despite the string of soft U.S. news, we still feel that too much pessimism has been priced into U.S. government debt markets, with yields likely to head moderately higher from current ultra-low levels and for the overall curve to flatten over the remaining three quarters. Canadian yields are also forecast to rise, albeit to a much lesser extent. Another key takeaway is that the US greenback will eventually find a bottom, likely by mid-year, although low U.S. rates will limit the extent of the bounce. In contrast, the Canadian dollar is likely to gravitate towards 95 US cents by year end.

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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Saturday, March 15, 2008

Mortgage, Debt and strategies to receive Tax Benefits

Many of us have been busy shopping, baking, visiting with friends and family and now starting to make some New Years Resolutions as well. One might be to start the New Year off with some strong Financial Planning. Perhaps looking for ways to pay off some debts, contribute to your RRSP's or maybe even taking that long wanted vacation or the home renovations that have been sitting on the back burner.

Ø Is your mortgage Tax Deductible?

Ø When should you consolidate your debt?

Ø What are the Benefits to you?

Ø Would you receive a Tax Benefit?

Make 2008 your best year ever!

Most people have more than one debt. You may have high interest credit cards, loans and mortgages. To pay off one debt you may need to borrow from someone else, creating yet another debt. The solution to this problem is debt consolidation. If you own a home, you can get a debt consolidation, home equity loan. With a debt consolidation loan you will have to consolidate each of your high interest credit cards, as well as your consumer loans, into one inexpensive and affordable monthly payment with low interest.

Tax deduction and home equity loan consolidation

Another possible advantage is that interest you pay on your equity debt consolidation loan may be tax deductible. Normally, if you add your first mortgage to a new debt consolidation loan, and the total does not exceed 100% of the appraised value of your property, the interest you pay will be fully deductible. Your tax consultant can advise you on the matter, and it's always a good idea to check with him or her. A yes to any one of these questions is a red flag. A yes to more than one indicates that you're probably a strong candidate for debt consolidation. Don't let your stress level get any higher.

Ø Have you hit the maximum limits on all your credit cards?

Ø Do you charge more than you can pay off each month?

Ø Are you unable to pay more than the minimum payments?

Ø Do you accept every credit offer you receive?

Ø Are you transferring balances to avoid paying them off?

Ø Are creditors calling you directly to ask about payment?

Ø Are you incurring fees for missed payments?

Ø Are any of your credit accounts in default?

Why should I refinance?

If you bought your home a few years back when annual interest rates were 12 percent, refinancing now can save you a great deal of money over the term of the mortgage. Or you might be able to switch from a 30-year mortgage to a 15-year, so you can pay off your loan in half the time with roughly the same monthly payments.

There are several reasons to refinance your home:

1. Lower the interest rate on your mortgage, reducing your monthly payments, and overall cost;
2. Reduce the term or length of your loan, doing so can save you thousands of dollars in interest;
3. to provide a means of consolidating your debt;

4. Contributing to your RRSP's and take advantage of the tax benefits.
5. To draw on the equity built up in the house to get cash for a major purchase or for children's education;
6. Have an adjustable-rate mortgage (ARM) and want a fixed-rate loan to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.


It is better to refinance if you can get an interest rate at least two percentage points lower than what you are currently paying. However, every situation is different. Some lenders are offering reduced fees or no points. Asking yourself a few questions may help you determine if you can save money:

1. How much can I lower my current monthly payment?

2. How much will I pay in refinancing costs?

3. How much will I still owe on the house?

4. How much am I currently paying each month?

5. How much did I initially pay for the house?

There are other considerations, too, such as how long you plan to stay in the house. Most sources say that it takes at least three years to realize fully the savings from a lower interest rate, given the costs of the refinancing. Itemize all the expenses of the refinance and estimate your new monthly payments. Answering these questions can help you to decide if you should refinance.

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com