We are delighted to announce that THE PRICE TEAM now assists home buyers with moving expenses.* “We aim to make the home buying process as convenient as possible” says Tracy, and we love, absolutely love helping to educate first time buyers on the entire process. We will assist you in selecting service professionals by recommending a top notch realtor, home inspector and lawyer. We will also help you with home and mortgage(protection) insurance. And now, we have added another ‘value added’ service, our moooving assistance program.

The early spring housing market is warming up nicely, and fixed mortgage rates have once again come down. The newly reduced maximum amortization period of 30 years means that buyers(incomes being equal) qualify for about $30,000 less in purchase price than before i.e. $295,000 vs $325,000. But rates are still at near all-tme lows, keeping housing affordable.

If you are a first time buyer, have us pre-approve you asap. Forget the bank because you cannot rely on their pre-approval; they do not verify your income, or check your credit. If you want to avoid a nasty ‘surprise’ have us preapprove you. We are more thorough, and guarantee you success. In effect, we protect you against rate increases, and we take all the time you need to become comfortable with what to expect AND MOST IMPORTANTLY, we will save you time and money by helping you put together all the services/products you will need. Think of us ‘truly’ as your one-stop-shopping source for home buyers                                                                                   

If you plan to move in the near future, or you know someone who does, do yourself/them a favour by calling us today to learn about our wonderful home buyng services. And remember, our services are at no cost OAC

DID YOU KNOW;If you have no down payment, we still have 5% cash back mortgages, and if you have the minium 5% but lack closing costs, we have a mortgage product that includes 2% cash back to cover.

It’s insidious and it’s just plain wrong when your bank uses the guise they are helping you when in actual fact they are hurting you. When the banks are doing everything in their power to rob Canadians of their financial wealth and their interest, fees, penalties and ‘tricks’ it’s time to stop trusting the bank. We can’t sit by and watch this happen. We have to speak out for the little guy just trying to make it from paycheck to paycheck, and we are trying to make a difference.                    

Sheldon a police officer and his wife Cecilia, a stay at home mom called last week. They own a modest home, live a modest lifestyle, have excellent credit and count their pennies. In other words, very solid, responsible people. He even works part time to keep up with the bills, while Cecilia is off work. They had a mortgage and a line of credit and no other debt. Last November, the bill for the line of credit came in advisng they didn’t need to make the regular $75/mnth interest only payment. So they didn’t. December same thing, so they didn’t. When January’s bill came in, the amount payable was $545. The clients were shocked and couldn’t make the full payment so they paid half. February’s bill came in at $545 plus $272.50 from the previous month’s balance. So now $817.50 was owed which was over ten times the previous ‘regular’ payment amount. They called the branch to find out how this could happen. The bank told them that they had the right to change the payment from interest only to a full interst plus principal payment, and went on to tell the client if they could not make the payment they could borrow from their line of credit to bring the account up to date. Incurring debt to pay a debt was the bank’s advice. Now there is a good(advice)solution…Not!        

We had no difficulty combining their mortgage and line of credit into a low rate mortgage at a affordable monthly payment. Sheldon has since closed their line of credit, left the bank and took their accounts to a Credit Union. because, as he told us, We can’t trust the bank anymore”       

Consumers at large need to wake up and smell the coffee. The banks were once our friends, but it seems, not anymore. Remember when you could sit down with the branch manager directly and get a loan? Not any more with centralized authority. And remember when the banks used to go out of their way to help you, when you had an ‘issue’. Not anymore. Those days are long gone. Never mind them holding your cheque for 7 days. The federal government just passed new legislation, among other changes, reducing the banks cheque ‘hold’ practices to 4 days. Thanks a lot. Big deal. Unfortunately the Feds did Absolutely Nothing about the unconsionable bank mortgage penalties, and the complete lack of accountability that prevails today. In other words, the smoke and mirrors continues with the banks not having to reveal how they calculate the penalties. Never mind the fees, the high interest, and the high loan payments they put you under stress with. Now it appears, deceit has entered the fray on top of ‘greed’. And as we wrote about previously, the new ‘Collateral Mortgage Products’ the banks have introduced, allow them to register the mortgage at 125% of property value, and the right to increase the interest rate to Prime+ 10% ‘if they feel like it’ This gives them ‘carte blanche’ authority and control over you. Moreover, it is extremely difficult and expensive to get out of it if you need to. Do you think they’ve gone too far?                             

We are here to protect you, isn’t it time to choose The Price Team, as your trusted financial advisor. We get you off the path to debt and into the plan for wealth. We’re just a phone call away(we will answer our phone, Live)or stop by our office on Tower Street South across from the old high school in Fergus. You’ll see our spokesman Don Cherry in the doorway. Hate or like him Don Cherry shoots from the hip(tells it like it is) just like us. By the way, our services to you are free OAC.

Many Canadians dream of owning rural property(including farms) with lots of land AND low taxes. For decades mortgage lending on rural properties with ‘acreage’ has been restricted to the value of the house and 1 to 5 acres maximum, depending on the lender. This meant that purchasers were required to bridge the gap with their own money, that is, equal to the value of any excess acreage that was not valued for mortgage purposes. The reality was that unless you had a very large down payment and/or you were willing to take on a higher interest second mortgage, it was not feasible to purchase such a property. Our new ‘breakthrough’ financing program changes all that with prime residential rates on properties with up to 200 acres. Eligible properties must be owner occupied, principal or secondary residences anfd have residential, rural or agricultural zoning. This can include hobby farms and year round recreational(cottage) property with large acreage as well. Rental properties and vacant land do not qualify.

John and Jacqueline Pelletier from Burlington were one of the first to benefit from this new program. They recently bought a 100 acre property at a purchase price of $1175,000. We were able to get them a $905,000 first mortgae at 2.25%/35 year amortization. The full purchase price was accepted as value and the required down payment was 270,000. In the past, lending value would have been limited to the house and 5 acres and the maximum loan would have been approximately $550,000 requiring a whopping down payment of $625,000 or $355,000 more than double required now. Without question it is considerably easier to finance such a property under this new program.

Refinancing is allowed, however certain other restrictions apply.

Should you currently own such a property(want to refinance)or are looking to purchase one, call us today for more details, and take advantage of 35 year amortizations before they disappear on March 18th.

Call us first, and have 25 years experience working for you

That’s the Taco Bell slogan. It’s meant to remind us that fast food doesn’t end with hamburgers. In the world of mortgages, the closest equivalent to “the bun” is the 5 year fixed mortgage. It has been the most popular mortgage/term in Canada for decades. Why? Because Canadians are(generally speaking) ‘risk averse’ and so we pay a hefty premium for ‘safety’ and ‘peace of mind’ by choosing a fixed rate versus a (lower) rate tied to prime.

Like the weather we seem to constantly talk about ‘rates’. by the way, the last place you should ask about where rates are headed is the bank, who last week predicted a two per cent hike in the next two years. OK. Here’s a tip, they are likely to be wrong again. Two years ago they said the same thing. We thought the era of ultra low rates was ending. Wrong. Has the party ended for good, or will rates increase for a year only to decline again? Folks, nobody really knows, and predictions have proven to be highly inaccurate. So don’t ask the bank their opinion about rates because their response will likely be short sighted.

So why does it seem the banks(like the media) always try to put fear into us. And why do the banks always tell us to ‘lock in’ to a fixed rate if we have a variable? The answer is to make us act(panic) from fear, so they will make more profit. Did you know, that over 70 per cent of 5 year fixed rate mortgages are redone every 3.5 years. What this means is that the banks also get a ‘penalty’, usually thousands of dollars from fixed rate mortgages. If you were in a variable or 3 year fixed term mortgage, you would have little or no penalty AND you would also save thousands in interest. Factor the penalty into the ‘effective’ interest rate and you are paying a fixed rate even higher than you think.

We always say “Pay yourself the spread, not the bank. “This is how you will “REALLY get ahead. For example, a 3 year fixed 3.35% $300,000 mortgage with a 25 year amortization will save you approximately $4,676 over 3 years, and 7,795 interest savings(that’s no chump change) over 5 years currently at 4.14%. And get this, if you were to make the equivalent of the 5 year fixed payment(1,600.91)versus the required payment($1,474) of your 3 year mortgage, you will pay your mortgage down much faster saving thousands more. Choose a variable mortgage tied to prime, currently .75% below prime or 2.25%, your interest savings over 3 years is around $10,590, and $17,650 versus choosing a 5 year fixed rate mortgage. That’s a lot of money!

So folks you can see what a ‘huge’ premium you are paying when you take a 5 year fixed rate. If you are a first time buyer, or you have a large mortgage(little equity) and consumer debt, it makes complete sense for to go with a fixed rate. Otherwise there is great merit in considering several other options which we will discuss next week.

Call us first, and have 25 years experience working for you.

Awe the call to the land…the open space, fresh air, low taxes. it could be the fond memories of driving the tractor with dad as a kid, or weekends at grandpa’s farm. It could even be finding a plac when the neighbour can look into your kitchen. We hear it lots. We want to buy a farm. many people have a desire to buy a farm. “they ain’t makin more land,” is the adage.

The issue has always been the land. You see lenders won’t give value to the land or the barns unless you are a commercial farmer.(that’s a whole different kettle of fish) suffice to say, higher rates than residential mortgages, financial statements, costly appraisals and the bank would limit the amount of equity you could mortgage to 65%. And still encumber everything including all the machinery, equipment, and the last I heard your first born child. Well not many of us can make a living being a farmer these days but some do want to play farmer in their free time.

and that’s why we are pleased to announce, “you can now buy a farm.” Show this article immediately to your wife! We have a lender who has decided to get into the hobby farm business and ou can ow put as little as 20% down. Now here’s the kicker. They will take into account the value of all of the land up to 200 acres. Most lenders today will do house and five acres when they value a farm. And the mortgage rate can be as low as 2.4% variable and up to 35 years amortization.

“It’s about time, said a local appraiser. We just had a client who works as a teacher in guelph purchase a 70 acre farm in Bruce County with a beautiful home for $419,000. His payment with 20% down is less than $1,200. Finally buying a farm is no longer an impossible dream. Call the Price Team today!

The federal government’s deadline is coming up fast. As of March 18th Canadians will no longer be able to refinance up to 90% of the value of their homes. It is being reduced to 85%, meaning that 15% of your home equity will become ‘untouchable’. In addition, the maximum amortization on ‘all’ mortgages will be reduced to 30 from 35, further tightening the housing affordability index.

On a $300,000 property this will mean $15,000 less available to payoff consumer debt. If your current mortgage equals 85% of value, then you will no longer qualify for a refi.

Effectively, only those with conventional loans 80% or below can refinance. The move comes at a bad time, since property values have levelled off, and may not increase much in the next 5 years or so. So this is your last chance to pay off that consumer debt.

We certainly hope that the government does not move to make the minimum down payment 10% instead of 5% because it is totally unnecessary, but it could happen. A very popular move would be for them to legislate lower interest rates and fees on credit cards, giving people a better chance to pay down high interest debt.

So those of you contemplating buying a home and want to take advantage of the maximum amortization giving you the minimum payment, then you should buy a home before March 18th.

The prospect of increased interest rates now appears all but certain this year so once again, take advantage by acting now while it is a ‘buyers market’, and make the best deal you can. Call us today, and we will get you the lowest rate possible. 

About a year ago, the bank arbitrarily sent a letter to Cindy and Len telling them they were raising their line of credit which was collaterized against their Guelph home from prime, to prime plus one per cent. We have written about this before; clients have no protection on these collateral mortgages as the bank can in its power, raise their rates. Well, when you think you have an agreement people don’t take too kindly to the rules changing but Cindy and Len thought, oh well, we still have a pretty good rate.

But then Cindy went in for a RV loan. The bank said no problem and came back with a rate of 9% with payments of $1300 per month. When Cindy reacted negatively, the bank came back and said okay we have “good news for you” we can do it for 7%. Now Cindy reads us faithfully and remembered how we wrote that the bank will try to sell you a product at the highest rate. And with their line of credit with available balance, Cindy suggested to the bank that she could put the purchase of the RV on her line of credit. “yes, we can do that for you”. the bank agreed. Hmm”, thought Cindy, my bank of 20 years does not act in my best interests. Well that’s when Cindy called us.

We gave her our best rate on a mortgage on the phone without hesitation and she asked to come in and speak with us. We discussed various options, variable vs fixed, short vs longer amortization and prepayments of the various lenders with the Guelph couple. Len was still not sold. He was not sure of “mortgage brokers” and told Cindy he wasn’t doing a thing unless he talked to the accountant he had for 30 years. His trusted accountant told him he had the same distrust of mortgage brokers but thought when he bought a condo last year he would give them a try. He told Len, he got a better rate and a better expereience than when he had dealt with the bank and recommended he go with us. With the accountant’s blessing, Len and Cindy got a new variable rate mortgage at 2.3 % from us with the RV and their home included at a new mortgage payment of $650. They are RV’ing to Florida next week, and are very happy campers.

Jill from Fergus called after being referred by a good friend who had a pleasant experience dealing with us. “if anyone can help you, these guys can,” she told Jill. Jill is a single grandmother who worked in a local factory until one day she could not lift her arms. Long story short, she was put on Workmen’s Compensation at her current wage at the factory and offered retraining. The training program ‘was a joke’ in her words. Jill was a retrained as an office worker and most of her duties involved typing which, of course, she could not do with her bad arms.. So she was trained on a program which enabled her to voice activate the keyboard.  When she finished the training she tried in in vain to find a job. “No companies have this type of technology,: Jill said. So when she couldn’t find a job in that field, Workmen’s Compensation cut her wages from $700 per week to $300 per week. That’s when Jill spiralled downward into a depression. She didn’t know where to turn. She quickly depleted all her resources and was living from hand to mouth while raising her granddaughter. Well thank goodness Jill called us. She had lots of equity in her home but it wasn’t doing her absolutely no good when it came to meeting everyday expenses. After all, you can’t eat Equity! We went right to work to find her a lender who would approve her for a mortgage at 65% of the value of her $220,000 home. She had maintained good credit and we were able to pay off her current mortgage of $65,000, her line of credit of $20,000 and the new mortgage we arranged for her at $150,000 gives her $50,000 to live on until she can work again or she can invest the money to earn extra income. It will also give her funds to hire a lawyer to help her fight Workmen’s Compensation. You see Jill really wants to work and she is too young to retire. She just needed us to give her a little “kick in the butt” to get her chutzpah back. Now that she has some money she will take on Workmen’s Compensation. Her mortgage rate has gone down a half a percent to 2.3 per cent and even with all the new money her mortgage payment is only $550 per month.

When we first met Jill she was pretty much beaten down by her circumstances. Now she is stronger and ready to fight. Jill, just needed someone to listen, to care and help her get control of her life again. And she doesn’t want to sit at home. She really wants to work at a job she can do! Doesn’t that kind of person deserve our help? A resounding ‘Yes” from the Price Team!

By the way, if you tossed out the paper by mistake and would like a previous article…We are blogging now. You can see our past articles on www.ronandtracy.ca or www.tracyluciani.ca.

Mark Carney, governor of the bank of Canada this week issued a broad warning that the economic crisis is far from over, that consumers need to ‘rein in’ their appetite for cheap money. Carney said that household debt is too high(increased 7% in 2010 vs. a 3.5% decline in the U.S.) and that ‘inevitably’ there will be a ‘Day of Reckoning’.

This rather ominous warning along with the suggestion of the need for higher cost money, leaves us not only a little bit ‘miffed’ but quite frankly, ‘suspicious’ of Carney’s motives as well. Firstly, the Bank of Canada sets the prime rate based on ‘inflation’, which continues to remain very low. Secondly, the B of C is handcuffed in that if they increase rates, the loonie will very likely soar, hurting an already weak export market further, thereby increasing unemployment etc., further weakening the Canadian economy which he has made it clear, is struggling more than expected. Thirdly, the U.S. federal reserve interest rate policy is for no increases in prime, until at least 2012. Fourthly, the U.S. economy remains extremely weak, and is expected to take several years before it truly recovers. Unemployment there is now considered ‘structural’ meaning that unemployment will continue high even after the economic recovery occurs, perhaps stay high permanently. Many see any real U.S. recovery as being years away, perhaps 4 to 5 years away, and since Canada is inextricably tied to the health of the U.S. economy, growth here should remain sluggish for years to come. These are the primary reasons that prevent Carney from increasing the prime rate, although he would clearly ‘like’ to.

We find it ‘suspicious’ of him to make such statements on the one hand, while on the other he is now ‘encouraging’ our banks to “tighten lending requirements, even in a low inflation environment, to discourage risky behaviour”. Funny how the government wants us to spend to sustain tax revenues which we now have the dubious distinction of being the ‘highest in the world’, while at the same time wants us to reduce spending without incurring debt, when most Canadians cannot save because of excessive taxation, and excessively high credit card interest rates. The big banks profits continue to boggle the mind, yet Carney is now asking them to charge more on loans to curb lending and spending which in turn will make them more profits. We have to wonder if the banks have him on their payroll? We would like to suggest to Mr Carney that it is high credit card rates that are getting Canadians into trouble more than anything else, and that in fact, it is these rates that should be reduced instead. He should be attacking the banks who can borrow at 1% from the B of C, and turn around and charge between 18 and 29 per cent on credit cards. The government wants us to spend but only with savinbgs, which few can because we have a hard time saving with excessive taxation of every description, and ‘usurious’ interest rates charged on credit cards.

It is our opinion that ‘overall’ that the B of C cannot and will not increase prime, much if any, and worst case only 1% in 2011. Even in the long term ‘prime’ should remain low, relative to historical rates. So today’s low interest rate environment will continue for several years yet; except for ‘fixed’ rates, that is, which just increased due to recent pressure from the North American bond market where the banks raise funds to finance mortgage loans to consumers, as investors dump bonds and rotate cash into the rising stock market(for better returns). This has forced the banks to pay higher rates on bonds to win investors; hence fixed mortgage rates went up this past week.

Bottom line folks is this. It is an opportune time to get your financial ‘house’ in order; to eliminate high interest debt, by using ‘home equity’ to pay off credit card debt by replacing it with ‘good’ low interest debt. Debt is debt, yet we meet many people who ‘think’ they have equity in their house that they want to preserve, yet while paying ‘insane’ rate on consumer debt which they cannot get rid of. In doing so, your future purchases can be made out of ‘savings’ instead of incurring high interset debt, which is inherently evil and sinister by nature. After all, this is what Mr Carney would like you to do.

Why not call us today for a professional review of your finances, and some invaluable guidance on how to manage your credit. We will help you save, and we will help you with budgeting(as required) with the goal of helping you become financially stable, secure, and to build ‘wealth for your retirement. as you can see, we are much more than mortgage ‘arrangers’.

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“I feel like a kid again” said Joe when we told him the news. After making payments of 2400 on his 300,000 mortgage at a 9% interest rate for the past four years, a simple phone call to us changed his life. It was his wife Lynn who suggested Joe give us a call after reading us for years in the Wellington Advertiser.

The couple were in a private mortgage mainly because Joe had no credit. After having some financial trouble years ago, he paid everyone off and cut up his credit cards, vowing never to use credit cards again.  While it was good Joe paid his responsibilities, failing to re-establish credit was keeping this couple in a high rate mortgage. We found a lender(we have 47 to choose from including all the major banks and credit unions) who would understand that Joe was a person who always paid his mortgage on time and had tried to re-establish credit but had difficulty finding a lender who would give him a credit card.

Well the new mortgage we arranged for Joe and his family are in his words ‘life changing’. We helped him reduce his monthly payment from 2400 to 1100 a month. His private mortgage was interest only and now he’s actually paying off principal. Wow! This is a savings of an incredible 54% They will be taking the lessons of not living above their means and being vigilant about credit from this day forward.

Now they can start saving and also start  paying down their mortgage with ease, saving them thousands more in future. As soon as the mortgage closes, we will help Joe re-establish his credit expecting that we can help him elevate his credit score very quickly, such that he will never look back again.

The point of this article is that we got Joe and his wife a prime institutional mortgage at a great rate, despite him having no credit. It’s a good day for us when we can help people change their lives for the better.