As we step into the New Year, it’s a delightful moment to reflect on the past twelve months and anticipate the trends shaping our future.

The Pantone Color of the Year isn’t merely a choice for wall paint; it’s a reflection of the times. Since 2000, the Pantone Color Institute has designated a color of the year, serving as a snapshot capturing the cultural essence of the moment. For 2024, the chosen hue is “Peach Fuzz” – a warm and comforting shade that nourishes the soul.

In the midst of post-pandemic uncertainties affecting the economy, the mortgage industry, and the housing market, the need for nurturing and comfort is more evident than ever. “Peach Fuzz” symbolizes the significance of care and community, especially as we embark on 2024.

As we turn the calendar, let Pantone inspire you to embrace the New Year with comfort, healing, and peace. With projections indicating a drop in interest rates in the latter half of 2024, stability returning to housing and job markets, and inflation gradually normalizing, there’s optimism on the horizon.

To make 2024 as comfortable as possible, consider reaching out to me, a DLC Mortgage Expert, for advice. Managing your finances can alleviate stress and free up time for more meaningful pursuits. With mortgage renewals on the rise, seize the opportunity to recalibrate your mortgage contract, review interest rates and terms, and optimize your payment schedule for improved monthly cash flow. Embrace the New Year with financial well-being in mind! Contact me today at 289-455-8801.

Mortgage Holiday Desserts

🎄✨ Indulge in Festive Delights with These Holiday Mortgage-Friendly Treats! ✨🎄

‘Tis the season for joy, tunes, dazzling lights, and of course, delectable delights! Ditch the calorie counter and dive into this list of mouthwatering holiday dessert ideas designed to sweeten your festivities.

Mortgage Gingerbread Bliss: Did you know? The oldest recorded gingerbread recipe, dating back to the 16th century, is safely tucked in the archives of the Germanic National Museum in Nuremberg! A timeless classic, gingerbread is not only a delightful treat but a perfect match for the season. Whether you’re crafting gingerbread individuals, a cozy house, or an entire village (no judgment here!), you need the perfect recipe!

🔗 CLICK HERE TO DOWNLOAD THE MORTGAGE GINGERBREAD RECIPE CARD!

Nanaimo Equity Bars: Over the years, this mouthwatering delight has worn many names. The first recipe emerged in the 1952 edition of the Women’s Auxiliary Nanaimo Hospital Cookbook, simply named “chocolate square.” Another rendition made its debut in a 1953 edition of Edith Adams’ Cookbook, adopting the name “Nanaimo Bar.” The recipe clipping still graces the Nanaimo Museum! A hassle-free dessert bar, this delectable treat boasts three layers: graham wafer crumbs and shredded coconut at the base, a custard-flavored butter icing in the middle, and a chocolate ganache on top.

🔗 CLICK HERE TO DOWNLOAD THE NANAIMO EQUITY BARS RECIPE CARD!

Peppermint Rate Fudge: With its origins tracing back to the 19th century, fudge isn’t a novel creation. However, with the multitude of flavor enhancements, it never loses its allure! This season, consider trying one of our favorites—peppermint fudge! Simple to whip up and waiting to be savored.

🔗 CLICK HERE TO DOWNLOAD THE PEPPERMINT RATE FUDGE RECIPE CARD!

Peanut Brittle Financing: Brittle is believed to be among the earliest candies ever made, with a fascinating history shrouded in mystery. Some argue it came about by chance, accidentally added to taffy by a New England woman in 1890! Another theory traces brittle back to the Celts, where it was relished as a traditional Celtic dessert, eventually making its way from Europe to America. Today, peanut brittle stands the test of time as a cherished treat.

🔗 CLICK HERE TO DOWNLOAD THE PEANUT BRITTLE FINANCING RECIPE CARD!

Indulge in these mortgage-friendly treats, and let the sweetness of the season elevate your festivities! 🏡🍬 #MortgageDelights #SweetenYourHomeownership

Winterizing Your Home!

We Canadians are no strangers to the chill of the winter season! As we shift into the final few months of 2023, now is a great time to check your home before the cold front hits. Below I have included a few tips that could help you save on bills, prevent future repair costs, and be more comfortable all winter long.

• Inspect Your Fireplace: There is no better time than now to have your fireplace inspected to ensure optimal efficiency and heat output. Whether you have a wood-burning, gas, or electrical fireplace, proper maintenance can go a long way for your heating bill!

• Maintain Your Furnace: While you’re having your fireplace inspected, don’t forget to maintain your furnace! If your furnace is getting up there in age, you may want to also consider replacing it as typically newer furnaces are more efficient than the previous generation, which could help save on energy costs. Either way, ensuring your furnace is in working order will guarantee top output and a cozy winter!

• Clean The Gutters: The last thing you want is your gutters to be clogged when the snow hits! Cleaning your gutters from Fall leaves and other debris will help ensure proper drainage for melting snow. For those who want to go the extra step, consider gutter guards which can help keep out unwanted objects from your gutters.

• Examine Your Roof: While you’re prepping your gutters for the winter, it is a good idea to also examine your roof. A few things to look for include broken or missing shingles, damaged flashing, staining from water leakage, and ventilation.

• Consider a Programmable Thermostat: According to experts, a degree drop in your home temperature can measure up to 1% on your heating bill. For those of us who don’t like to have cold feet all season, smart thermostats are a great way to keep warm and optimize your energy savings! Ideally, you want to set your thermostat to turn on in the morning, off when you go to work, and back on in the evening to ensure a toasty welcome.

• Insulate Windows: Always be sure to check your windows for any gaps or water leakage and get them resealed as soon as possible. If you live in a particularly cold location, consider swapping out your windows to double-paned glass for an added layer of insulation. Another tip to keep the cold from seeping in through your windows is swapping out your curtains for a heavier, thermal-lined set which can do wonders!

• Check Your Pipes: Checking pipe joints for leaks that could cause rot and damage will save you trouble in the future. Repair any cracks you find, especially those around electrical outlets and alarm system lines. You can also consider foam pipe insulation, which is fairly easy to install and could help prevent energy loss and potential water damage from frozen pipes.

• Stock Up on Supplies: There are a few things you might want to consider stocking up on ahead of time for the winter season, such as flashlights and batteries, ice melt, extra pet food and canned goods, and an emergency storm kit that includes an extra flashlight, candles, portable radio, water, and snacks.

With a little preparation, you can keep your home in good shape without needing to feel the cold bite of winter!

As Canadians approach their retirement years, many are exploring the potential of the CHIP Reverse Mortgage solution to allow them to enjoy the retirement they’ve worked so hard for. Many retirees face financial challenges with lower Canada Pension Plan payments, diminished or non-existent company pensions, inadequate retirement savings, and the ever-rising cost of living. However, there is a solution that allows your home to work for you – the CHIP Reverse Mortgage by HomeEquity Bank.

Understanding the CHIP Reverse Mortgage

The CHIP Reverse Mortgage is a financial solution specifically tailored to Canadian homeowners aged 55 and better. It is a loan secured against the appraised value of your home. This innovative approach enables you to convert up to 55% of your home’s value into tax-free cash while staying in the home you love. What sets this financial solution apart is its flexibility; you can choose how you’d like to receive your funds. Whether you prefer a lump sum or regular monthly deposits, the choice is yours. Moreover, you won’t be burdened with making regular mortgage payments or repaying the loan until you decide to move or sell your home.

Meeting Your Financial Needs

In retirement, a limited income and the escalating cost of living can cause stress. Thankfully, the CHIP Reverse Mortgage provides a lifeline by offering versatile funding options. The funds you receive can serve various purposes, such as:

• Increasing Monthly Cashflow
• Consolidating Debt
• Purchasing Another Property
• Covering Medical Expenses
• Renovating Your Home
• Fulfilling Your Dream Vacation
• And More!

Embrace a Richer Retirement with the CHIP Reverse Mortgage

When your home has the potential to unlock financial security, it can help you live the retirement of your dreams. To tap into the power of your home’s equity and enhance your retirement, contact me today! (Danny Benjamin – 289-455-8801)

Get to know the important basics before you choose your mortgage.

You have to be sure you select what is most important to you – lower rates or flexibility. Before you choose a mortgage, take some time to study mortgage types:

Closed Mortgage: If you want consistency with respect to rates and the length of your mortgage agreement, a closed mortgage is best for you. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

• Predictability and consistency with respect to payment amount
• Often comes with lower interest rates
• Limited flexibility with paying down the mortgage faster
• Cannot change interest rate during the term of mortgage

Convertible Mortgage: Want the best of both worlds? Then consider a convertible mortgage. Convertible mortgages are flexible yet offer minimal risk. Often with a lower interest rate than an open mortgage, convertible mortgages provide the opportunity to switch to a longer-term closed mortgage without penalty.

• Provides an opportunity to take advantage of lower interest rates and switch to a closed rate without penalty
• Offers lower interest rates than an open mortgage

Open Mortgage: If you are looking for flexibility with regard to paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sump payments or pay off your mortgage before the term expires; however, this flexibility comes often with a higher interest rate – which can result in higher monthly payments.

• Maximum flexibility; no penalty for making lump sum payments or paying off your entire mortgage before the term expires
• Higher interest rate
• Best for those looking to pay off their mortgage as soon as possible

Still not sure which type of mortgage is best for you? Contact me today! (Danny Benjamin – 289-455-8801)

Rate hikes are definitely off the table

The Canadian economy weakened surprisingly more in the second quarter than the market and the Bank of Canada expected. Real GDP edged downward by a 0.2% annual rate in Q2. The consensus was looking for a 1.2% rise. The modest decline followed a downwardly revised 2.6% growth pace in Q1. (Originally, Q1 growth was posted at 3.1%.) According to the latest monthly data, growth dipped by 0.2% in June, and the advance estimate for economic growth in July was essentially unchanged. This implies that the third quarter got off to a weak start.

The Bank of Canada forecasted growth of 1.5% in Q2 and Q3 in its latest Monetary Policy Report released in July. The central bank is now justified in pausing interest rate hikes when it meets again on September 6th. Today’s report is consistent with the recent rise in unemployment. It suggests that excess demand is diminishing, even when accounting for such special dampening factors as the expansive wildfires and the BC port strike.

Some details of Q2 Growth

Housing investment fell 2.1% in Q2, the fifth consecutive quarterly decline, led by a sharp drop in new construction and renovations. No surprise, given the higher borrowing costs and lower demand for mortgage funds, as the BoC raised the overnight rate to 4.75% in Q2. Despite higher mortgage rates, home resale activity rose in Q2, posting the first increase since the last quarter of 2021.

Significantly, the growth in consumer spending slowed appreciably in Q2 and was revised downward in Q1.

Bottom Line

The weakness in today’s data release may be a harbinger of the peak in interest rates. Inflation is still an issue, but the 5% policy rate should be high enough to return inflation to its 2% target in the next year or so. As annual mortgage renewals peak in 2026, the increase in monthly payments will further slow economic activity and break the back of inflation.

The Bank of Canada will be slow to ease monetary policy, cutting rates only gradually–likely beginning in the middle of next year. In the meantime, the central bank will continue to assert its determination to do whatever it takes to achieve sustained disinflationary forces.

Today’s release of the US jobs report for August supports the view that the Canadian overnight rate has peaked at 5%. (The Canadian jobs report is due next Friday). Though the headline number of job gains in the US came in at a higher-than-expected 187,000, the unemployment rate rose to 3.8% as labour force participation picked up, growth in hourly wages was modest, and job gains in June and July were revised downward.

In Canada, 5-year bond yields have fallen to 3.83%, well below their recent peak shown in the chart below.

Please Note: The source of this article is from SherryCooper.com/category/articles/

Although credit cards interest rates have not been affected by the recent surge in the prime lending rate, the fact remains that credit card debt is usually the most expensive debt you can have. The average is around 20% and even the so-called ‘low interest’ cards carry a rate in excess of 10%. Expediting the demise of your credit card balance should be the number one focus for anyone looking to improve their financial situation. Here are five actions to get you started.

1. If you are carrying a balance, the first step is to put the card(s) away. Whether you put them in the food processor or just temporarily turn them off (our recommendation), you need to own up to your mistake and not add any more fuel to the fire. If it’s the case where you have no choice but to use the card (a prepayment for example) make sure to make a payment to cover that charge right away.
2. Take a minute to fully understand the consequences of a credit card balance. Search out the details of your credit card statement until your find the section that tells you exactly how many years it will take to eliminate that balance with minimum payments. While you are at it, make sure to confirm the interest charge for that month and just how little of your payment is actually going toward reducing the balance. It can be a bit shocking, but also quite motivating! The government has a simple online calculator for you to easily analyze different repayment options.
3. Plan your repayment attack. Making a few random spending sacrifices and hoping that you will have a little more left at the end of the month to pay towards your card is wishful thinking. You need to figure out ASAP the maximum amount you can throw at your credit card debt every month and chart out when you are going to be debt-free. Set up an automatic transfer from your bank account to your card every payday and make that money invisible – you can’t spend what you can’t see!
4. Investigate balance-transfer credit card options… but only if you have a plan and are confident you can pay off the balance within the prescribed period! A balance transfer card shifts your debt to a new card (for little or no fee) which offers a limited time period (usually 6 -12 months) with a very low interest rate (often 0%) to pay off the balance. This cuts your interest expense to zero and ensures that 100% of your payment goes to reducing the balance. However, you have to be very disciplined and have the income to make regular payments. The card company is literally banking on you to fail and hopes you will miss the payment deadline, because that will trigger an avalanche of penalties, fees and interest charges that will put you worse off than ever!
5. Pick up the phone and call your card company. It might be more possible and easier than you think to actually negotiate a lower interest rate on your credit card. If you have had a card for a while and have been carrying a balance and making the minimum payments, you are a valued customer! Your card issuer is very interested in keeping your business and may be willing to negotiate. You will have to get through to the right people and know what to say, but 15 or 20 minutes on the phone could save you a chunk of cash – even a few percentage points would help.

The above tips will help you get started on the road to eliminating your credit card balance. There are no shortcuts and it may require a lot of sacrifice depending on how much debt you have, but the mental burden that lifts when you see a big zero under “balance due” it will be worth it!

Market Beware: Subject Free Offers.

When it comes to purchasing a home, most offers include conditions or subjects, which are requirements or criteria to be met before the sale can be finalized and the property is transferred. Some of the most common subjects include:

• Financing approval
• Home inspection
• Fire/home insurance protection
• Strata document review if appliable

The purpose of these subjects is to protect the buyer from making a poor investment and ensure that there are no hidden surprises when it comes to financing, insurance, or the state of the property.

These conditions are written up in the purchase offer with a date of removal. This is agreed to by the seller before the sale is finalized. Assuming the subjects are lifted by the date of removal, the sale can go through. If the subjects are not lifted (perhaps financing falls through or something is revealed during the home inspection), the buyer can waive the offer and the purchase becomes void.

However recently, especially in heightened housing markets, there has been an emergence of subject-free (or condition-free) offers. These are purchase offers that are submitted without any criteria required! Essentially, what you see is what you get.

Below we have outlined the impact of subject-free offers on both buyers and sellers to help you better understand the risks and outcomes:

Pros of Subject-Free Offers

• Buyers: The main benefit of a subject-free offer for a buyer is the ability to “beat the competition” in a heated market. However, it is not without risks.
• Sellers: Typically, a subject-free offer will include a competitive price, willingness to work with the dates the seller prefers, and evidence that the buyer has already done as much research as possible. If time is sensitive for the seller because they are trying to purchase another home or want to move as soon as possible, they may also choose your offer over subject offers to expedite the process.

Cons of Subject-Free Offers

• Buyers: As a buyer submitting a subject-free offer, you are assuming a great deal of risk in several areas including financing, inspection, and insurance:
  • Financing: While buyers may feel that they have a pre-approval and so they don’t require a subject to financing, it is important to recognize that a pre-approval is not a guarantee of financing. If you are submitting a subject-free purchase based on a pre-approval, buyer beware. The financing is subject to the lender approving the property and the sale; from the price and location to type of property or other variables the lender deems important. By submitting a subject-free offer without a financing guarantee (or an inspection, title check, etc.), there is a risk that the deal can fall through. Even when you do not include subjects on the offer, you still are required to finance your purchase. In addition, as deals are submitted typically with a deposit, there is a risk that if the subject-free offer falls through the buyer will lose their deposit. This amount can range vary in the thousands and is typically a percentage of the purchase price or down payment.
  • Inspection & Insurance: If a buyer is also opting to skip the home inspection and home insurance protection subjects to have the offer accepted, then they assume huge risk as they do not know what they are getting and whether or not the property is up to code for insurance.
  • Due Diligence: With subject-free offers, there is no opportunity for due diligence after the offer has been made. This requires the buyer to do all their research before their initial bid. Because it is firm and binding, a buyer who decides to back out will likely be met with serious legal ramifications. Submitting an offer without subjects is not due diligence and it is at the buyer’s behest.
• For Sellers: When it comes to the individual selling the property, there is less risk with subject-free offers but not zero. While the benefit is essentially there is no wait to accept the offer on the seller’s side, they do not know for sure if financing will come through.

Financing Around Subject-Free Offers

When submitting a subject-free offer, it is essentially up to the buyer to do as much due diligence as possible before submitting. They will need to identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their very best to secure financing beforehand.

Contractual Obligations

Be mindful when it comes to purchasing offers versus purchase agreements. While your purchase offer is a written proposal to purchase, the purchase agreement is a full contract between the buyer and seller. The purchase offer acts as a letter of intent, setting the terms you propose to buy the home. If financing falls through, for example, then the contract is breached and this is where the buyer may lose the deposit.

It is also important to be aware of a breach of contract in the event that a seller chooses to take action. For example, if you submit a subject-free offer of $500,000 and cannot secure financing for that offer and the seller turns around and is only able to get a $400,000 deal with another buyer, they could potentially sue the initial buyer for the difference due to breach of contract.

Preparing a Subject-Free Offer

If you have decided to go ahead with a subject-free offer, regardless of the risks, there are some things you can do to mitigate potential issues, including:

• Get Pre-Approved: Again, this is not a guarantee of financing when you do make an offer, but it can help you determine whether you would be approved or not.
• Financing Review: Identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their very best to secure financing beforehand.
• Do Your Due Diligence: Look into the property and determine if there have been major renovations or a history of damage. This could come in the form of a Property Disclosure Statement. While this statement cannot substitute a proper inspection, it can help identify potential issues or areas of concern. If possible, conduct an inspection before submitting your bid/offer.
• Get Legal Advice: This can help you determine your potential risk and ramifications of the offer should it be accepted, or otherwise.
• Title Review: Be sure to review the title of the property.
• Insurance: Confirm that you are able to purchase insurance for the home. Keep in mind, an inspection may be required for this but in some cases, you can substitute for a depreciation report if it is recent.
• Strata Documents (if applicable): Thoroughly review strata meeting minutes and any related documents to determine areas of concern.

While there are things that can be done to help with subject-free offers, it is still risky. Ultimately submitting an offer with subjects gives you the time and ability to gather information on the above, as well as access to the property or home for inspections.

If you are intent on submitting a subject-free offer, be sure to discuss it with your real estate agent as they can determine if a subject-free offer is necessary, or if perhaps a short closing window would suffice to seal the deal. A good realtor will keep you informed of potential interest and other bids during the process as well. Their goal should be to maximize your opportunity and minimize your risk. In addition, before making any offers, be sure to contact me to discuss your mortgage and financing so you can make the best decision.

The May inflation data, released this morning by Statistics Canada, bore no surprises. The year-over-year (y/y) inflation measured by the Consumer Price Index (CPI) at 3.4% was just as expected–down a full percentage point from the April reading. This is the smallest increase since June 2021. Economists hit this one on the head because we knew dropping the April 2022 figure from the y/y calculation would considerably lower May inflation.

By May of last year, y/y  inflation had already risen sharply to 7.7%, mainly due to dramatic energy price increases reflecting the impact of the Russian invasion of Ukraine. Inflation peaked at 8.1% in June ’22, suggesting low inflation next month as well. This is why the Bank of Canada predicted that inflation would fall to 3% by this summer.

Taking inflation down to 3% will likely be easier than the drop from 3% to 2% because the low-hanging fruit has already been harvested. Many service prices are a lot stickier than the price of commodities and durable goods.

The May inflation slowdown was primarily driven by the 18.3% y/y plunge in gasoline prices resulting from the base-year effect. Excluding gasoline, the CPI rose 4.4% in May, following a 4.9% increase in April. A drop in natural gas prices (-3.5%) also contributed to the energy price deceleration.

Prices for durable goods grew at a slower pace year over year in May, rising 1.0% after increasing 2.2% in April. The increase in May is the smallest since May 2020 and coincided with easing supply chain pressures compared with a year ago. This was reflected in furniture prices (-2.9%), which fell by the largest amount since June 2020, and passenger vehicle prices (+3.2%), which showed the smallest increase since February 2021.

Grocery prices remain elevated–up 9.0% y/y–down only one tick from April. Prices for food purchased from restaurants rose slightly faster year-over-year in May (+6.8%) than in April (+6.4%), amid ongoing elevated labour shortages, input costs and expenses, which Stats Can data show job vacancies can disproportionately affect these businesses.

Rising interest rates also boost inflation. This is because mortgage costs are just over 3% of the CPI. They are a part of the most significant component of the index–shelter–which represents almost 30% of the index. The mortgage interest cost index rose by a whopping 29.9% in May, following a 28.5% increase in April. This was the largest increase on record for the third consecutive month, as Canadians continued to renew and initiate mortgages at higher interest rates. And, of course, this does not include the effects of the policy rate hike in June.

It takes time for the full effect of interest rate hikes entirely feed into the CPI. Mortgage interest costs will continue to rise as higher interest rates flow gradually through to household mortgage payments with a lag as contracts are renewed. And home-buying related expenses ticked higher in May, with higher home resale prices increasing realtor and broker commissions.

Bottom Line

Achieving the 2% inflation target will take some effort. The Bank of Canada continues to be concerned that the Canadian economy remains too hot. Although unemployment relative to job vacancies has recently started to rise, the Bank remains troubled that excess demand will continue to push some prices upward. This is the cyclical component of inflation–inversely correlated with the unemployment rate–a version the Fed calls ‘supercore’ inflation. Supercore includes household services such as haircuts, personal care, babysitting, restaurant meals, travel, accommodation, recreation and entertainment.

It is roughly the CPI-trim (which filters out extreme price movements that might be caused by severe weather and other temporary factors) minus the price of food, shelter and energy. This measure has fallen less than the other core measures. Supercore inflation is about 5.5% y/y, compared to CPI-trim at 3.8%,CPI- median at 3.9% (see the chart below).

Looking at the recent monthly trends on a three-month annualized basis, CPI-trim was at 3.8% in May, down from 3.9%, and CPI-median was at 3.6%, down from 3.8% in April.

This is why the Bank of Canada emphasizes labour market data and overall spending measures. We will get two more important Statistics Canada releases before the July 12th BoC decision: the June 30th  monthly GDP number for April and the all-important Labour Force Survey on July 7th. Unless these data show a meaningful economic slowdown or a rise in unemployment, the odds of another BoC rate hike are about 60%.