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From the Vancouver Sun
While most of the media has figured out far to late that these issues have arisen, the Vancouver sun has a good article about why interest rate isn’t the best factor to use to select a mortgage. Read the highlights below.
These reasons in part are why we encourage our clients to deal solely with big banks. While the explanations in this article are basic, we provide a much more sophisticated analysis, delving deeper into individual lenders and their specific issues, big banks included. One thing to note, there is a high likelihood that your broker will dismiss these issues, or be completely unaware of them.
Rate should never be the only thing a homebuyer looks at but it often is, said Feisal Panjwani, senior mortgage consultant with Invis — Feisal & Associates Mortgage Consulting in Cloverdale.
“There’s lots of lenders out there who may have great rates but rate is not the most important thing,” Panjwani said. “You’ve got to look at everything.”
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From the Ottawa Citizen
Thankfully at least one media outlet is trying to clarify the confusion caused by the increase in fixed interest rates. With headlines like “Era of low interest rates come to an end,” the media has completely misguided Canadians. The fact is that the Bank of Canada rate has remain unchanged. In fact, there is a good chance we will see those same fixed rates that went up last week, hedge back down slightly as banks try to compete for market share.
What I find interesting is that the competition bureau is going after the thousands of real estate brokerages for collusion, yet two banks last week colluded in a drastic increase in interest rates after sitting of their heels for the past three weeks when interest rates should have been rising gradually. It seems as though the competition commissioner has a hard on for realtors, perhaps because of her own personal experience, but is willing to turn a blind eye to the government regulated banks.
See the explanation of last weeks interest rate moves below.
The rise in mortgage rates at three of the big banks comes at a time when the Bank of Canada’s benchmark lending rates have remained unchanged since early 2009.
The Bank of Canada’s “overnight rate,” the rate at which Canada’s banks can make short-term loans to one another, was set at .25 per cent in March of 2009.
The Canadian Bankers Association said many consumers are confused by the relationship between the central bank and commercial banks. The Bank of Canada’s rates have very little to do with mortgage rates, the association says.
Mortgage rates are based on a number of variables. Banks must balance the amount they charge in interest with the amount they pay on consumer savings accounts. As the price paid on account interest rises, mortgage rates will also rise.
Banks also use other investments as yardsticks for mortgage rates. If a secure investment, such as a Canada Savings Bond, is paying three per cent annually, an investment such as a mortgage must be priced higher to cover for the risks involved and to ensure that the bank makes a profit.
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In the last week I have had over 75 phone calls and hundreds of emails from people asking whether they should lock in their mortgage. It seems that a couple banks raising fixed rates can really cause a panic, even though it shouldn’t. What panics me is the way in which the media picks up on the story and runs with a distorted understanding of the subject. If you really want to know whether you should lock in your mortgage, it is time for you to (more…)
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It appears as though the tables are turning in the media with respect to real estate and mortgage news.
Last week the media was emphasizing a strong market and price increases, this week the news is all doom and gloom. Given that the media pays such a major role in our sensitive real estate market, it is no surprise that they are reporting the news that will create a better story a couple of months down the road.
Shifts in reporting almost always mean a shift in the market, the question becomes, which direction will it go?
The Vancouver Sun reported (more…)
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“What the hell are you thinking? Your birthday is not about recieving, don’t be so self centered!” The single line that changed how I think about birthdays permanently.
A good friend said this to me on my on my 24th birthday, after I complained about the gift my girlfriend at the time had bought me. Being the superficial girlfriend that she was, she had bought me a shirt which I had explicitly told her that I did not like, but that she loved. I would later breakup with said girlfriend after she had to think about whether she wanted to attend my grandmother’s burial.
Ex-girlfriend story aside, my friend had a good point. Every year on our birthdays we celebrate “our day”. The day where everyone makes a fuss about us because we are yet another year older. Woohoo. What few people fail to consider is just how special that day is. A birthday, for most of us, is a sign that we have made it through yet another year unscathed. Most of us remain sheltered, continue to have the ability to put food on the table, and remain able bodied. My friend clued me into the fact that this celebration should come with the recognition that others may not have been so fortunate, which is why for the last three years I have given back on my birthday.
Until now I have given silently. Three years ago I made an anonymous donation to a good friends cancer treatment fund. Two years ago I sent a few dozen books overseas. Last year I took a truck full of clothing to the Mustard Seed.
This year however, I am going to give publicly. Today I will donate 10 meals worth of food to the Mustard Seed. Anthony Robbins has his Turkey Brigade, consider this my Birthday Brigade.
I am welcoming you to join me if you feel so inclined. You may either do so on your own by making an online donation to the Mustard Seed, or if you would like to use the Paypal Donate Button below, I will make the donation for you.
As an added bonus, if you use the Paypal button, you may designate in the add instructions to seller field whether you would like a copy of my books Golf Balls Don’t Float, Forget Your Mortgage, or both.
Please note that I will not keep a penny of the money to pay for the books, and you can donate any amount that you wish, these are my birthday gift to you.
Kind regards,
Nolan Matthias
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