Mississauga Real Estate, Homes, TREB & MLS Blog by Mark Argentino

Wednesday, July 11, 2007

Making Sense of Confusion - Questions about mortgage interest rates and the differences between prime, bank prime and mortgage rates

I received an email today with some great questions about mortgage interest rates and the differences between prime, bank prime and mortgage rates. The questions and then my answers are below.

Hello Mark,

I find your study of the history of our Canadian interest rates interesting and I appreciate the information you have on your web site. (the graphs are here)

Hopefully, you can answer two questions for me.

How do rates vary for mortgages over 15 years amortization with 20 years or 25 years. Are the rates higher, due to the loss of interest acquired by the lender over 15 year period.

When a prime rate is posted; is this just for the banks best business customers? How much difference should one expect if it is a first mortgage (therefore no major assets) and the borrower has no set income (example: works on commission, or is an artist)

I will look foreward to hearing from you.

F.

This was my email back to this person with answers to these questions.

Hello F.

Thank you for your email.

Interest rates on mortgages are the same regardless of the
amortization. Thus, shorter is better for you, longer is much better for the
bank!

Prime can be confusing. There is Bank of Canada Prime rate, which today is 4.75% The bank prime, the rate banks charge to their best customers is about 1.5% higher, RBC prime rate today is 6.25%

See RBC rates here:
http://www.royalbank.ca/rates/prime.html

TD-Canada Trust prime rates here:
http://www.tdcanadatrust.com/lending/index.jsp

Mortgage rates are set based upon the bank prime rate and bank forecasting, specials they may be offering and many other variables. Banks will base their rate upon your situation, self employed may pay slightly higher rates than a salary employee, but every situation is different. I am self employed, but have been for 20 years, so I receive same rates as a banks "A" people, this is also due to the fact that my credit rating is very high.

See the current TD-Canada Trust mortgage rates at this page: http://www.tdcanadatrust.com/mortgages/numbers.jsp

See the RBC rates here and note the "special offers":
http://www.rbcroyalbank.com/products/
mortgages/view_rates.html

Thank you,
Mark

Tuesday, July 10, 2007

Canadian National Housing prices since 1990 to 2005

MLS® Average Residential Price - Canada and Provinces 1990–2005 (dollars)

Canada Housing Observer

Now in its fourth year of publication, the Observer is a flagship CMHC publication that presents a detailed annual review of housing conditions and trends in Canada and the key factors behind them.

The 2006 edition included an enlightening chart comparing housing costs across the country over the past 15 years, a sampling of which follows:

MLS® Average Residential Price - Canada and Provinces 1990–2005 (dollars)

See Toronto and GTA average price graphs

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

What is David Dodge trying to do? Bank Rate Increases - Again!

July 10, 2007

Good Morning,

The Bank of Canada announced a rate increase this morning. The Bank increased the prime overnight rate to 4.50% (a .25% increase). This is the highest Bank rate in the last 6 years.

David Dodge (Governor of the Bank of Canada) gave strong signals the rate may go up to 4.75% with the Bank's next review on September 5th, 2007.

Today's rate increase is not expected to have a major impact on the market since the increase was anticipated and priced accordingly in recent months.

My lenders have not issued rate changes yet - the following rates are HLC's best rates currently available. If you are a potential home buyer, it's time to contact your mortgage person and get a rate lock in place.

The following table is HLC RATE UPDATE
July 10, 2007

Prime Rate………….6%
Variable Rate……….Prime less .95%
1 year closed……….5.60%
3 year closed……….5.70%
5 year closed……….5.65%*
7 year closed……….5.78%*
10 year closed……...5.85%*
25 year closed……...6.58%

* for mortgage of $500,000 or greater; slightly higher rates for lower mortgage amounts
Information subject to change without prior notice. APR.E.&O.E.

Read more about Current Mortgage Interest Rates

Monday, July 09, 2007

Should you Live with Your Parents to Save for your Downpayment?

Living with the parents while saving for a home.
A new survey might make parents nervous. A survey of potential first-time homebuyers found that 29 per cent of Canadians between the ages of 21 and 34 are living with their parents while saving for their home down payment. In cities such as Toronto and Vancouver, the numbers are significantly higher, suggesting that staying on at the old homestead is considered the fastest route to jumping onto the property ladder.

The survey, conducted by Decima Research, polled 1,205 young adults aged 21 to 34 from Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver who had aspirations to purchase a home in the ‘near’ future. According to the survey, almost one in three are living with their parents while they prepare to make the transition to home ownership. While it is no surprise that Canadians under the age of 30 are staying home longer, whether to attend school or save for a home purchase, what is surprising is the number of Canadians in the 31 to 34 years old category who are also still at home.

The survey says the Greater Toronto Area (GTA), Halifax and Calgary have the highest percentage of ‘stay-at-homes’ who are older than 31 years of age (22 per cent in the GTA and 17 per cent in both Halifax and Calgary). A red hot real estate market and rising home prices have likely contributed to this trend. But these factors may also contribute to a sense of urgency amongst young first-time homebuyers who feel they don’t have the requisite finances and may have to scramble to cobble together a down payment. Some of this anxiety may be avoidable by developing a financial plan early that sets realistic short-term and long-term financial goals.

The survey found a considerable gap between potential first-time buyers’ expectations and their realities when it came to planning and saving to buy a home. Although most young Canadians would like to purchase a home within the next few years, most do not have a practical plan to get there.

According to the survey, Canadians between the ages 21 and 34, on average, have been saving for their down payment for only 1.6 years, yet expect to take only a total of 3.8 years to save enough to commit to a purchase.

On average, young Canadians say they expect to be able to amass a down payment representing 15.4 per cent of the cost of a new home by the time they are ready to make a purchase. These expectations are unrealistically high given their low savings rate and the increasing cost of housing in markets across the country.

Other findings include:
- Thirty per cent of all those with home ownership aspirations intend to take advantage of the First Time Home Buyers RRSP Plan as a major source of funding for the down payment.
- Sixty per cent intend to rely primarily on savings or investments to make the purchase.
- The average reported savings rate (as a percentage of pre-tax income) of young Canadians polled breaks down as follows:
Across Canada, 12.5 per cent. In Toronto, 14.3 per cent. In Vancouver, 13.3 per cent. In Halifax and Winnipeg, 8.8 per cent. Those who live at home with their parents, 16.6 per cent. Those who are currently renting, 11.0 per cent. If the study reinforces one thing it is that more young Canadians need to sit down with a financial planning professional to develop a realistic game plan, if they are going to shorten their stay with their parents and make their home ownership dreams a reality.

There are a number of steps that young Canadians should take in order to reach their home ownership goal sooner. First of all they should consult a financial professional as early as possible to put together a financial plan that addresses both their short and long-term goals. This plan should address steps such as how to pay off debt sooner in order to free up more cash flow for their home down payment and developing a working monthly budget. Article is courtesy of R.Paul Chadwick from TD CT

More information on how to save money in real estate

Sunday, July 08, 2007

Choosing the right School for your Children

Choosing the Right School for Your Children

For many families, a move to a new state or community means making difficult choices. Choosing from among the wide array of options of appropriate day care for younger children or schools for the older ones can be a complex and time-consuming chore. Parents need to examine their own basic values, their child-rearing and educational philosophies, and each child's needs when making decisions that will affect their child's future.

For many parents, choosing the best schools for their children determines other life choices. Newcomers usually investigate the public school systems thoroughly before selecting an area in which to settle. Each school district determines its own curriculum, requirements, and special programs. However, individual schools within a district can differ because of variations in student bodies, individual principals and teachers, and parental involvement. Neighborhoods with higher income levels and percentage of parents with college educations generally have schools with better test scores and a larger percentage of students going on to college. Real Estate agents are a good source of information in this area.

In comparing school districts and individual schools within each district, the following general questions should be asked:

Is the physical location of the school adequate and secure?
What is the school's teacher/student ratio?
What teaching methods (traditional, open classroom, team-teaching, etc.) are used?
Observe classes if possible.
What arts programs are offered?
What are the special education facilities and programs in each school/jurisdiction?
Is homework given and, if so, how much each night?
Is there an adequate sports program?
What extracurricular clubs and interest groups exist?
Parents of elementary school children should ask other questions:

Can a young child walk to school safely without crossing main roads?
Is transportation available?
Is there sufficient space for recreation and adequate playground supervision?
Are there after-school and extended day programs? Parents can use school profiles and interviews with principals or counselors to answer the following questions:
Does the school have a good orientation program for new students?
What courses are included in the basic curriculum?
What elective courses are available?
What Advanced Placement courses are offered?
Is there vocational education for those students wishing to take a trade, skill or career course?
How have students scored recently on standardized tests (such as the S.A.T.)?
What percentage of high school students go to college? How are college and career counseling handled?
Private schooling is another option to be considered Classes are usually smaller, children may receive more individual attention, and college-bound students are given more personalized counseling. Schools sponsored by religious organizations are often less costly than other independent schools, but their classes tend to be larger.

Students interested in private schools should begin the application process early as the most competitive schools have February deadlines. Since many of the most selective schools require interviews, families should consider scheduling interviews before a formal application is made. It is unwise to apply to only one school. Because of space limitations, many bright children are denied entrance to the more popular schools. Some Catholic schools give priority to families that are members of the parish. Applying to four or five schools should prevent disappointment.

Home Playground Safety Checklist

To make sure your home playground is a safe place to play:

Install and maintain a shock-absorbing surface around the play equipment. Use at least 9 inches of wood chips, mulch, or shredded rubber for play equipment up to 7 feet high.
Install protective surfacing at least 6 feet in all directions from play equipment.
Never attach - or allow children to attach - ropes, jump ropes, clotheslines, or pet leashes to play equipment; children can strangle on these.
Check hardware for open "S" hooks or protruding bolt ends, which can be hazardous.
Check for spaces that could trap children, such as openings in guardrails or between ladder rungs; these spaces should measure less than 3.5 inches or more than 9 inches.
Make sure platforms and ramps have guardrails to prevent falls.
Check for sharp points or edges in equipment.
Remove tripping hazards, like exposed concrete footings, tree stumps, and rocks.
Regularly check play equipment and surfacing to make sure both are in good condition.
Carefully supervise children on play equipment to make sure they are safe.

More about schools in Mississaug and the GTA

Monday, July 02, 2007

Backyard Fireworks Safety Considerations

When planning a backyard fireworks display, follow these safety guidelines:

While children are an ideal audience, never allow them to light any fireworks. Only responsible adults should handle all materials while all spectators watch from a safe distance.

Only one person should be in charge of igniting fireworks. With the exception of sparklers, fireworks are not meant to be handheld.

Carefully read the instructions and precautions that accompany the fireworks. Before they are used, store them in there original package to avoid sparks.

Fireworks should be buried to at least half their length in a bucket of sand or earth before they are ignited. If portable firing bases are not available, plant them directly in the ground, making sure that each is firmly supported before igniting.

Always have a garden hose ready to douse any fireworks that continue smouldering after discharging.

Light fireworks at arm's length, standing back and keeping your face away. Don't relight fireworks that fail to ignite, wait for several minutes and then soak them with water.

Sparklers should also be doused with water, or allowed to cool in a safe place away from children. The ends of sparklers continue to stay hot for some time, and will easily burn a child's skin, clothing, or any nearby combustible material. Only use sparklers outdoors.

Always keep fireworks and sparklers out of reach of children, preferably in a locked cupboard or drawer. Make sure that children are unable to access these materials to avoid a tragedy. For example. after the 1998 July 1st holiday, Toronto Firefighters responded to a blaze that was accidentally started by children playing with sparklers. Consequently, a four-year-old child died in the fire.

Fireworks are only permitted on designated holidays. After the holiday, return all unused fireworks to where you bought them.

-In case of fire or an emergency, call 9-1-1. Courtesy Toronto Fire Services

Sunday, July 01, 2007

Click your way to a better mortgage

Click your way to a better mortgage
Photo courtesy of www.metrocreativegraphics.com(NC)-The next time your mortgage is coming up for renewal, get yourself to the nearest computer. When it comes to researching mortgage options there's no better way to go than the convenience and speed of the Internet. While many customers still prefer to complete their loan transaction in a face-to-face environment, the inception and success of the "virtual bank" in Canada has quickly started to change consumer perception about how and where to get a mortgage.

Consider these three reasons to click your way to your next mortgage:

1. Online prices are up-to-date and easy-to-find. Mortgage rates are relatively easy to find, and easy to compare to the quotes on other sites. Rates are usually updated just as soon as they change so there's little fear of receiving out-of-date information.

2. The best rates are often posted online. Because online vendors don't have to carry the costs of maintaining retail lending facilities (branches), including the commissions paid to loan officers, the cost savings are generally passed on to borrowers.

3. 24/7 access. You can make inquiries or do mortgage research online anytime, day or night. So if you work full time, you can do your mortgage homework in the evening (when an actual mortgage office or bank branch would be closed). For an up-to-date, reliable mortgage quote go to myCTFS.com or call 1-866-606-2837.

Credit: www.newscanada.com

Read more about how to find the best mortgage rates here

Wednesday, June 27, 2007

Safe Kids Canada's water safety advice for parents

Safe Kids Canada's water safety advice for parents: "Layers of protection are the best way to prevent your children from drowning"
(NC)-Each year, an estimated 58 children under the age of 14 will drown and another 140 children will be hospitalized as a result of a near-drowning incident. Safe Kids Canada strongly recommends parents use all of these "layers of protection" to keep their children safe when in, on or around water.

1. Actively Supervise: 42 per cent of all children under the age of 14 who drowned in the past 10 years did not have an adult watching them. Whether it's a bathtub, a home pool, a lake or a river make sure you stay within sight and reach of children at all times. Avoid talking on the phone or reading a book when your children are in, on or around water. Even children who can swim need adult supervision. Children can drown quickly and silently in inches of water and in just a few seconds.

2. Get Trained: Know how to react in an emergency situation. Learn to swim or have an experienced adult swimmer supervise children in, on or around water. Weak swimmers should take swimming lessons, and caregivers should learn First Aid and CPR before assuming the role of supervisor.

3. Create Barriers: Children should not be able to get to the pool directly from the house. Using a four-sided pool fence with a self-closing, self-latching gate can prevent up to seven out of 10 drownings in children under the age of five. Installing a 1.2 m (4 ft) high four-sided fence with self-closing, self-latching gate around the pool can keep young children safely away from the pool. If a property has natural water hazards (lakes, ponds, streams, rivers etc.) or even decorative water features, a separate play space for children should be fenced off to keep them safely away from the water.

4. Use Lifejackets: Put young children and weak swimmers in lifejackets when in, on or around water. Children should never be left without adult supervision even if they are wearing a lifejacket.

5. Teach Kids To Swim: Parent and tot swimming classes are fun for the family, and they help educate parents on how to keep toddlers safe around water. By age five, children are ready to be enrolled in swimming lessons. But remember, swimming lessons alone are not enough. You need to put in place all of these layers of protection to keep your child safe in, on or around water.

These tips are part of the 2007 Safe Kids Week campaign - Splash into Safety - running from May 28 - June 3 and sponsored by Johnson & Johnson. To learn more about drowning prevention, call Safe Kids Canada at 1-888-SAFE-TIPS (723-3847) or visit www.safekidscanada.ca.

Credit: www.newscanada.com

Read more about home inspection issues around your house

Tuesday, June 26, 2007

New Housing Costs rise Substantially in April

The cost of new housing rose substantially in April, rising 0.8 per cent from the previous month.

Contractors' selling prices were up 8.9 per cent from a year earlier as 12 of 21 metropolitan areas surveyed registered increases.

Edmonton led all monthly increases, at 4.4 per cent, as well as annual increases, at 40.5 per cent.

Regina (up 2.2 per cent), Saskatoon (2.1) and Calgary (2) followed as monthly price advances were mostly attributable to materials and labour; noteworthy gains were also recorded in Halifax, Greater Sudbury and ThunderBay, Ont., and Vancouver.

Five metropolitan areas registered no monthly change. Victoria (-0.9%) recorded the largest decrease due to a moderating market. Prices in St.John's, Saint John, Fredericton and Moncton, and Charlottetown also declined.

Land prices rose in only five of 12 metropolitan areas surveyed.

See more statistics for resale homes at this page

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Monday, June 25, 2007

Advantages of New Home and Resale Home purchase

The Advantages of a New Home

Tips and discussion

NEW: If you purchased your new home prior to July 1, 2006 and will be taking possession after July 1, 2006 click here for transitional GST information and rebate form from the Canada Revenue Agency (Posted June 2006)

If a home comes up for sale in a mature neighbourhood where there’s an established sense of community and a history of strong property values, buying a resale home can be a good choice. However, there are several reasons why buying a new home is often the wiser choice.

We just don’t build homes the way they used to – and that’s a good thing! Today’s homes are built with state-of-the-art technology using lowmaintenance and durable building materials, to save you time and money.

From vinyl-clad windows to aluminum soffits to clay brick, a modern home requires far less upkeep than a resale home, even a fairly modern one. Advanced wiring and Internet-ready cabling means you can work out of your new home about as efficiently as you can in many office buildings.

Modern home design is lightyears ahead of older homes. Indeed, light is one of the main design features of today’s homes. Windows are bigger and better and they’re everywhere. They flood the interior with natural light without letting in the cold or letting out the heat.

Today’s homes also offer floorplans that are very functional, accommodatingyour needs, not the lifestyle of some mythical family from bygone generations. Open concept plans give modern homes a light and airy feeling, yet they can be informal or formal, casual or elegant.

Moreover, you can get exactly what you want, because many builders will customize the model you choose, allowing you to create rooms or styles that meet your personal needs. Options and upgrades provide further flexibility. Modern designs are also very clever when it comes to providing storage space, the lack of which is one of the biggest drawbacks of older homes.

Better insulation, higher efficiency heating systems, better windows and doors, overall tight construction and improved ventilation are hallmarks of homes built in the last few years. That means lower energy costs and a more comfortable home all year round.

With the purchase of a new home also comes peace of mind. Every new home sold in Ontario is covered by one-, two- and seven-year warranties, described in detail later. Safety is also improved, with features such as smoke detectors wired into the home’s electrical system; or video surveillance in condos.

Finally, many new homes are built in new communities, where there is consistent design among the homes and careful attention paid to public elements such as landscaping and street lighting. New home communities generally offer parks, schools, shopping and recreational amenities close at hand.

Advantages of a Resale Home

The major advantage of buying a resale home is that you are moving into an established neighborhood. Your lawn is green, your shrubs are growing, your driveway is paved and your trees are well enough established to give your street a feeling of permanence. Often, most extras are already present, such as appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

In terms of investment, a resale home will often give you far more value than a brand new home. Many owners put tens of thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement or any of the items above. Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home. A $35,000 swimming pool or a $15,000 finished basement or even $5,000 worth of landscaping may make the home very attractive. However these additional costs incurred may not necessarily increase the market value of a home, especially if you have to sell it at a time of year where these major items add little or no perceived value. The buyer gets the home at its real fair market value, which is based on comparable homes for sale or sold in the neighborhood. All those expensive extras may be included in the home with benefit to the buyer at little or no extra cost. This can be a substantial savings over buying a new home.

With a resale, the vendor's asking price is almost always negotiable downwards unlike the builders list price which is usually firm. Any extras or changes are added to the list price of a new home and add up quickly.

Read an indepth article about buying new or resale home

Mississauga Real Estate, Homes, TREB & MLS Blog by Mark Argentino

Wednesday, July 11, 2007

Making Sense of Confusion - Questions about mortgage interest rates and the differences between prime, bank prime and mortgage rates

Tuesday, July 10, 2007

Canadian National Housing prices since 1990 to 2005

What is David Dodge trying to do? Bank Rate Increases - Again!

Monday, July 09, 2007

Should you Live with Your Parents to Save for your Downpayment?

Sunday, July 08, 2007

Choosing the right School for your Children

Monday, July 02, 2007

Backyard Fireworks Safety Considerations

Sunday, July 01, 2007

Click your way to a better mortgage

Wednesday, June 27, 2007

Safe Kids Canada's water safety advice for parents

Tuesday, June 26, 2007

New Housing Costs rise Substantially in April

Monday, June 25, 2007

Advantages of New Home and Resale Home purchase

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