Sunday, May 18, 2014

Opportunities Exist with short term mortgages

See the graph below.  The wider the gap between the 1 year mortgage interest rate and the 5 year
rate the more opportunity there is to save money!



You may wish to consider choosing a short term variable rate for your mortgage for at
least the next while since the current gap is quite large.

All the best!
Mark







For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Toronto Real Estate Board (TREB) Average Prices and GraphSpecializing 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

Friday, April 11, 2014

5 year closed mortgage or 5 year open, what's best?

Question and answer from an avid blog reader of mine.
 
Hi Mark,
 
I have been researching real estate and mortgages. Found your site and its is very informative.
In your professional opinion is 5 yr. closed mortgage better over 5 yr closed variable ?
 
It seems that banks are pushing for closed variable, why is that. I was offered a 2.7% 5 yr closed variables, after I requested a closed at 3.49%.
After some persuading I took closed variables, did I make mistake? My renewal is in June.
Your input an help will be appreciated
Best regards,
S.
 
Hi S.,
 
Thanks for your kind comments, glad you have found it helpful.
 
There is no simple or quick answer to your question.  It's completely up to your personal risk tolerance.  If you took closed variable at 2.7 this rate will likely stay about where it is for many months and possibly a year or more.  What bank are you with?
 
If you chose the 5 year variable rate, doesn't that mean you are locked in with lender and your rate will fluctuate based upon the prime rate?  If this is the case and prime stays at 3% for at least another year or possibly longer, your rate will remain fixed at 2.7%  You are .3% less than prime, so this is a reasonable discount.  When you say renewal in June, do you mean that's when you can lock in at a fixed mortgage rate?  2.7% is a reasonable rate for a 5 year variable.
 
Mortgage rates are very competitive these days and the banks are slashing rates to get your business. 
 
BMO announced today that the 5yr fixed rates just dropped to 2.99%
 
I too agonized over a renewal for our mortgage last month and was pushing for an additional .1% off the rate.  After TD agreed to the final discount, I did the calculation and it made a difference of less than $2 per month on our payments, so it was minimal.  Depending upon the size of your mortgage, small discounts in the rate have little effect on your payment.
 
The most important aspect of mortgage payments, in my opinion, is to make sure your payments are accelerated bi-weekly.  This is most critical and will allow you to pay off a 25year mortgage in less than 18 years, you save huge on interest and can start saving for retirement 7+ years sooner than you otherwise would have been able to.
 
I hope this helps.
 
Please let me know if you have more questions.
 
Thank you,
Mark
 

Thursday, April 10, 2014

Investment property purchase and rental considerations

It is great to hear that you have decided to become active in the rental investment market.

First you need to decide if you want a single family residential or a multi-residential.

In a single family residential you are likely to break even on monthly cash flow (all your expenses - mortgage, property tax etc) paid but you will not make cash flow. The money here is made on resale value and equity that the tenant pays into your home.

I would consider the best investment for this type a townhouse - they are low maintenance and easy to rent. If this is your decision, let me know and I will narrow down some good options to send.

In a multi-residential, resale value increase is not as high (depending on area) unless you somehow increase the profit of the operation (renovate to create higher rents, add in coin-op washer and dryers, implement paid parking, etc). These are great to create monthly cash flow and can often be fully paid off within ten years if you put 100% of the rents into your mortgage payments; which would leave you with net incomes ranging from $30,000-$100,000, depending what and where you invest.

The value of these are based on CAP rates. Places like Toronto and Port Credit in Mississauga will have a lower cap rate, around 3-6% max; as the resale is higher. Places like Hamilton and Brampton have lower resales, but are very hot rental markets with cap rates ranging into the 8-11% range.

Hamilton is a good area right now for investment property for a multi-res. It is the number one investment spot in Ontario for multi-family and due to low income, renters are very active.

If you want 20% or less down, we would need to stick with 5 units or under ( I believe most banks are 4 and under, but either RBC or CIBC is 5 and under

Once you review the above information to help you decide which investment strategy you would like to pursue and then we can go from there into more detailed info.

All the best!
Mark

Tuesday, April 08, 2014

TREB reported March 2014 single family residential home sales in Toronto and the GTA Sales and Average Price Up in March

TREB reported March 2014 single family residential home sales in Toronto and the GTA
 
last months highlights were:
 
  • average prices up 8.5% to $557,684
  • sales volumes were up 7.2% to 8,081
 
See graphs and information at this link:
 
http://www.mississauga4sale.com/TREBprice.htm
 
See the full report below,
Mark
 
 
Sales and Average Price Up in March
 
TORONTO, April 3, 2014 – Toronto Real Estate Board President Dianne Usher announced that Greater Toronto Area REALTORS® reported strong year-over-year increases in TorontoMLS home sales and the average selling price in March 2014. Home ownership affordability, backstopped by low borrowing costs, continued to be a key factor underlying this growth.
 
A total of 8,081 sales were reported in March 2014 – up by 7.2 per cent in comparison to March 2013. Sales growth was much stronger in March compared to the first two months of the first quarter. Sales for Q1 as a whole were up by three per cent compared to the first three months of 2013.
 
“Sales activity in the GTA accelerated last month. Compared to last year, a greater number of buyers found affordable home ownership options, as evidenced by sales growth for all major home types. Against this backdrop, however, overall inventory at the end of March remained lower than last year. This means competition between buyers increased, which is why the average selling price continued to climb,” said Ms. Usher.
 
The average selling price for March 2014 sales was $557,684 – an increase of almost eight per cent compared to the average reported for March 2013. The average price for the first quarter of 2014 was up by 8.5 per cent year-over-year.
 
“With borrowing costs remaining low, and in fact declining, strong home ownership demand will continue to butt up against a constrained supply of listings. Strong price growth will be the result for the remainder of 2014. If the pace of price growth experienced in the first quarter is sustained, TREB may revise its outlook for the average selling price,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
 
 
I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino

P. Eng. Broker
Specializing in Residential & Investment Real Estate

 

 

RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

 

 

BUS 905-828-3434

 

FAX 905-828-2829  CELL 416-520-1577

mark@mississauga4sale.com
 
Mississauga4Sale.com

 
  • Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
    www.mississauga4sale.com/internet-evaluation.htm
     
  • Power of Sales and Foreclosures
     
    www.mississauga4sale.com/Power-Sales-Bank-Sales-Alert-Request.htm
  • If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
    www.mississauga4sale.com/popupquestion.htm
     
  • See seasonal housing patterns
     
    www.mississauga4sale.com/TREBprice.htm
  • Would you like me to send you a desk or wall Calendar?
    www.mississauga4sale.com/Calendar-Order-Form.htm
     
 
 

Wednesday, March 26, 2014

Real Estate fluctuations Cyclical and Seasonal Price Trends and Graphs in Toronto and Mississauga

Question from a reader:
One question regarding the cyclical pricing.. it looks from your graph http://www.mississauga4sale.com/avgprice1995todate.jpg that the peak is typically in the April or May months. Can you tell me whether that represents closing date, conditional sale date, listing date or something else? Trying to strategize our sale timing since we're a bit flexible.

Answer:

The peak of the market price is typically between the months of April and May of each year. This represents the sale price reported on TREB for that particular month. It does not account for conditional sales or the closing date, only the firm sale price that occurred during that particular month.

If, for example, a conditional sale was put together on April 5 and firmed up April 12th, the sale price would go towards April average.

 If a conditional sale was put together on April 25 and firmed up May 3rd, the sale price would go towards May average.

Best time to list is typically a week or two after the March break, then it takes 1-3 weeks to sell and you would sell at or near maximum and close typically about 3 months later. Most people like to close end of June or end of July due to children finishing school, and since most closings are between 60-90 days, this is another major reason that contributes to the March, April and May peak selling period.

Beware of the current cycle and where we currently are:

http://www.mississauga4sale.com/Market-Emotions-Cycle.htm

Please let me know if you have other questions.

Thank you,

Mark


Tuesday, March 25, 2014

Mid-month report from TREB regarding residential real estate sales in GTA and Toronto

this is the mid month report from Toronto Real Estate Board regarding sale snad prices for mid month in the GTA
Enjoy!
Mark

GREATER TORONTO REALTORS® REPORT LATEST MID-MONTH RESALE MARKET FIGURES

TORONTO, March 19, 2014 – Toronto Real Estate Board President Dianne Usher announced that Greater Toronto Area REALTORS® reported 3,459 transactions through the TorontoMLS system during the first two weeks of March 2014. This result for the TREB market area as a whole was virtually unchanged in comparison to 3,464 transactions completed during the same period in 2013.

“Despite the poor weather conditions experienced during the first half of March, an abundance of willing buyers were actively searching for a home to purchase. However, many of these people continued to be affected by the enduring shortage of single-detached, semi-detached and townhouse listings, which means that in some cases they could not find a home on which to make an offer, or they were facing stiff competition from other buyers,” said Ms. Usher.

For all home types combined in the GTA, the average selling price was $560,948 - up by almost six per cent in comparison to the average price for the same time frame in 2013. The semi-detached market segment in the City of Toronto led the way in terms of price growth during the first 14 days of March, with a year-over-year increase of more than ten per cent.

"Semi-detached houses represent a more affordable ownership option for some households. Because of this, some semi-detached listings have attracted many interested buyers. This competition has served to exert strong upward pressure on the average selling price," said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“The average single-detached price was down slightly in the City of Toronto year over year because of a smaller share of luxury deals this year compared to last. Tight market conditions will continue to drive strong detached price growth in 2014,” added Mercer.




Toronto Real Estate Board (TREB) Average Prices and Graph

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

Tuesday, March 11, 2014

CMHC Premiums for home purchase will rise as of May 1

Hello!
 
Part of my job as your realtor is to keep you informed and help you make the best decisions for yourself.
 
Of course, saving money is paramount, so….
 
I wanted you to know about changes that will make it more expensive for anyone buying a home with less than 20% down payment.
In Canada, lenders typically require Buyers with less than a 20% downpayment to pay for mortgage insurance, offered by the Canada Mortgage and Housing Corporation (CMHC).  
The size of the premium is calculated as a percentage of the mortgage and based on the amount of the downpayment - the higher the downpayment, the lower the premium.
On Friday February 28th, CMHC announced that they are increasing CMHC premiums as of May 1st, 2014.
Since most people add the cost of CMHC insurance to their mortgage and pay it over 25 years, the net impact of this increase is estimated to be $5 a month for the average Buyer, however it is important to look at the real-dollar impact of the CMHC increase:
  • For a $250,000 mortgage, a Buyer with 5% down will now be paying an additional $1,000.
  • For a $450,000 mortgage, a Buyer with 5% down will now be paying an additional $$1,800.
  • For a $250,000 mortgage, a Buyer with 15% down will be paying an additional $125.
If you like math, here's the formula for how CMHC Insurance premiums are calculated:

What the Premium Increase Means to the Average Toronto Buyer:

  • The higher your downpayment, the less CMHC insurance premium you will have to pay.
  • To avoid the increased fee, make sure that your lender submits a request for CMHC insurance for you prior to May 1, 2014.
  • The closing date on your new home is irrelevant, but you'll need to have an Agreement of Purchase and Sale in place and have your mortgage in process by May 1, 2014.
What am I really saying?  If you have a 5% downpayment and want to save a couple of thousand dollars, buy a home before May 1st. 
I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
mark@mississauga4sale.comMississauga4Sale.com
  • Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
    www.mississauga4sale.com/internet-evaluation.htm
  • Power of Sales and Foreclosureswww.mississauga4sale.com/Power-Sales-Bank-Sales-Alert-Request.htm
  • If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
    www.mississauga4sale.com/popupquestion.htm
  • See seasonal housing patternswww.mississauga4sale.com/TREBprice.htm
  • Would you like me to send you a desk or wall Calendar?
    www.mississauga4sale.com/Calendar-Order-Form.htm
 
 

Monday, March 10, 2014

Landlord and Tenant Property Insurance Reminder

This is a reminder for Tenant Property Insurance
 
Hello!
 
If you are an owner of a condominium townhouse or a high-rise condominium, you too want to make sure that your insurance on your investment property is active.  The reason you need insurance is because the tenants package only covers the tenants contents and the condo insurance typically only covers to middle of the exterior walls.  As an owner, you need insurance to cover your appliances, flooring, walls, drywall, cabinets, bathrooms etc. in the event of a loss.
 
Also, if your loss in your unit or property creates a loss in other units adjacent to your unit then you need insurance for that too.  This can get very expensive. 
 
If you are a tenant, you need to read this below! 
 
I recently heard that a small fire this past New Years' Eve in the bedroom of a condominium townhouse created a huge personal and financial loss for the tenant living in the property.  The reason for the loss was the tenants insurance policy had expired and the tenant did not renew the insurance for another year because the tenant wanted to save about $225. 
 
This tenant is now out of pocket over $25000, had to move somewhere temporary for 3 months which cost additional money and the tenant lost all her belongings and furniture due to this oversight!
 
This email is not meant to scare you, it's a friendly reminder for you. 
 
If you are a tenant you must confirm that your insurance policy is currently active and keep your tenants package for your personal property and legal liability insurance policy in full force and active.
 
If there is a fire or flood and you lose some or all of your belongings you need your own insurance coverage and policy.  Also, if you cause the fire or flood and if this loss creates damage or a loss in other units or properties adjacent to your unit or property then you need insurance for that too.  This can get very expensive. 
 
Please verify your insurance policy is active and that you have a tenants insurance package that covers your contents and at least $1million liability insurance that is current and active. 
 
Thank you, 
Mark
 
 

Saturday, March 08, 2014

Clocks Spring Ahead this weekend - Reminder to test Smoke Alarms

Hello!
 
This weekend we change our clocks and move them ahead one hour this Saturday after midnight.
 
This is also a reminder for everyone to replace the battery in any battery operated CO or smoke/CO2 detector where you live and to check the proper operation of all detectors and operate as they should.
 
You are supposed to be doing this on a monthly basis, but this is a good time to test if you have not been doing this monthly testing.
                                                                                                                                                                                      
Please test each CO and smoke/CO2 detectors and make sure it works properly when you press the test button.
 
Also, please check the date on the CO detectors and the smoke/CO2 detectors manufacture date.  Most are good for 7 years, some for 10.  If any of the detectors are expired you should replace them with a new detector, this is very important for your safety.
 
Also, please don't forget to change your air filter for the furnace.  This will not only improve your air quality in the house, but also reduce your gas and electricity bills by allowing the air to circulate more freely.
 
Thank you,
Mark
 

Wednesday, March 05, 2014

GTA and Mississauga real estate market Toronto Real Estate Board for sale figures from last month

Hello from Beautiful Mississauga!
 
Below is the latest report from the Toronto Real Estate Board for sale figures from last month
 
Summary:
 
  • prices in February 2014 were up 8.6% to $553,193 compared to same month last year
  • volume of sales were up 2.1% compared to the same period last year
 
See the full report below and more figures and graphs at this page of my site:
 
http://www.mississauga4sale.com/TREBprice.htm
 
All the best!
Mark
 
 
 
GREATER TORONTO REALTORS® REPORT LATEST MONTLY RESALE HOUSING MARKET FIGURES
 
TORONTO, March 5, 2014 – Toronto Real Estate Board President Dianne Usher announced that February 2014 home sales reported by Greater Toronto Area REALTORS® were up by 2.1 per cent compared to the same period last year. Total February sales amounted to 5,731 compared to 5,613 last year.
 
“Despite the continuation of inclement weather in February, we did see a moderate uptick in sales activity last month. The sales increase was largely driven by resale condominium apartments. New listings of resale condominium apartments were up on a year-over-year basis, giving buyers ample choice. This is in contrast to the listings situation for singles, semis and townhomes, where supply continued to be constrained. Some would-be buyers had difficulty finding a home that met their needs,” said Ms. Usher.
 
“If we see renewed growth in listings for low-rise home types, the pace of sales growth will accelerate as we move through the year,” Ms. Usher continued.
 
The average selling price for February 2014 sales was up by 8.6 per cent to $553,193, compared to the average of $509,396 reported for February 2013. The MLS® Home Price Index (HPI) Composite Benchmark was up by 7.3 per cent year-over-year.
 
“While the strong price growth experienced over the last year should prompt an improvement in the supply of listings, sellers’ market conditions will continue to prevail this year. Home prices, on average, will trend upwards at a pace well-above the rate of inflation. The impact of strong price growth on affordability will be mitigated by low borrowing costs,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
 
I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
mark@mississauga4sale.comMississauga4Sale.com
  • Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
    www.mississauga4sale.com/internet-evaluation.htm
  • Power of Sales and Foreclosureswww.mississauga4sale.com/Power-Sales-Bank-Sales-Alert-Request.htm
  • If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
    www.mississauga4sale.com/popupquestion.htm
  • See seasonal housing patternswww.mississauga4sale.com/TREBprice.htm
  • Would you like me to send you a desk or wall Calendar?
    www.mississauga4sale.com/Calendar-Order-Form.htm