Archive | October, 2011

What is “Prime Rate”?

October 31, 2011

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The Prime Lending Rate in Canada (like in many other countries) is a reference interest rate charged by banks and lenders to their most “creditworthy” customers. In reality we find that most banks and lenders in Canada base their best interest rate (usually in the form of a variable interest rate) on the prime lending rate, plus or minus a certain percentage. This is why you hear rates like “prime -.5%” and “prime + 3.25%” etc. While all banks and lenders base their rates on the prime lending rate, rates do different from lender to lender (so Lender A could have a variable rate of “prime -.2%” while Lender B could have a rate of “prime +.15%”). This model allows lenders to remain competitive while still adhering to the fluctuating prime interest rate (so if the prime rate goes up or down, all the interest rates go up or down by the same amount).

The Bank of Canada meets every once in a while (eight times per year), and based on a variety of factors (primarily on Canadian economic conditions and the state of the global economy) decides if the prime rate should stay where it is, or be moved higher or lower. They make this change in the prime lending rate when they decide it is necessary to boost the economy (lower the lending rate) or slow it down (raise the lending rate). They met for the 2nd-to-last time in 2011 last week, and as expected, kept the prime lending rate at 3.00% (where it’s been for over a year).

The next Bank of Canada meeting (and the last of 2011) is set for December 6th. That being said, most agree that the prime lending rate isn’t going to move again until at least mid-2012.  If you have (or are thinking about getting) a mortgage with a variable interest rate, your current rate (and therefore payment amounts) should be stable for the time being.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Leasing Residential Property

October 27, 2011

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I’ve realized that very few people know that real estate agents are also qualified to help individuals when they are looking for a home or apartment to rent -or- when they have a house or apartment that you would like to rent out to tenants

As you might know, there is even a section on REALTOR.ca for properties that are being offered for lease so that potential tenants can search by geographic region, budget, etc. This is a great location to publicly display a rental property with a national audience, especially seeing as a number of corporations, government agencies, etc only transfer staff to areas for short periods of time; and as a result, rental is the preferred method of housing.

Your real estate agent can be your eyes and ears in the local rental marketplace and assist you with things like negotiating rent, drafting leases, tenant screening, etc that will help you make informed decisions so before you hit Kijiji and start calling the  numbers in local newspaper ads, give a local real estate agent a call and see which properties are available for rent in the organized real estate community.

Brendan

Brendan Clemmens of Royal LePage First Contact Realty is a residential real estate agent in Barrie that provides value added service to all of his clients. Brendan can help you with all of your real estate needs but has a specific focus on helpin g young families and investors.

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Buying tenants

October 26, 2011

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If you are purchasing a home that is currently rented out (or has an apartment that is currently rented out), there are extra precautions that you should take to ensure that the closing will go smoothly, whether you want to buy the house empty or want to keep the tenants.

If you are buying a house that is rented and intend to live there yourself, you need to be certain that the vendor has given proper notice to the tenants to ensure that they will leave on closing. If you want to keep the tenants, you will need tenant acknowledgements of the change in ownership and will want to review the tenancy agreements to be sure that you are content with the way the agreement has been set up. If you intend to keep the tenants for a time but will want to move in yourself eventually, you will also want to review the timelines in the Ontario Residential Tenancies Act so that you give proper notice. You will also want to generally review the Act to make sure that you are keeping to the obligations of a residential landlord.

Having tenants can be cost-effective, particularly for first-time buyers, but you should always ensure that you are prepared to work within the rules and obligations of being a landlord.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she's not online, she can usually be found in her garden.

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New Shalom Park in Barrie

October 25, 2011

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For all you Barrie residents, you know that Barrie’s South End experienced a significant boom in a very short period of time. Businesses have continued to grow, and new homes are popping up all the time. Public infrastructure has been lagging in the South End, like libraries and community centres. Our city understands the increasing need for this type of family-oriented activity space, and behold a new park has been constructed!

 

Near the intersection of Huronia and Lockhart you will find a few golf courses among other industrial parks, and now it’s a family- and kid-friendly area that will now service the surrounding residences with almost 1000 people.

 

 

Watch our mayor, Jeff Lehman, discuss the new park and its benefits to this South End neighbourhood and Barrie overall.

Mayor Jeff Lehman – Shalom Park Video

This is one of four new parks to be constructed this year, so keep your eyes and ears open for new developments 🙂

Laura

Laura Keller of Century 21 B.J. Roth Realty is a real estate agent with a business philosophy of nurturing relationships with her clients. She will walk you through the process of buying, selling, or investing step-by-step so there are no surprises at the end of your transaction.

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How Much Do Mortgage Brokers Cost?

October 24, 2011

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Back in the “old days,” people would usually only go to a mortgage broker when they weren’t able to find a mortgage on their own (self-employed, past bankruptcy, bad credit, insufficient income, etc) – they had usually been turned down by a bank, and needed the help of a mortgage broker to obtain financing.  The mortgage broker would arrange financing through an alternative lender or private investor, and would then charge the client a brokerage fee for his/her services.

A couple of decades ago, many of the major financials institutions realized it was much cheaper to pay someone to bring them qualified mortgage clients rather than having a branch on every corner, with costly overhead (not to mention the high expense of training and maintaining staff).  So many banks and lenders started paying finders’ fees to mortgage brokers for qualified mortgage applications.

Today, many mortgage brokers do not charge their clients many (if any!) fees for a standard mortgage transaction, and instead rely solely on finders’ fees for their source of compensation.  It’s never a bad idea to ask a mortgage broker up front how much they charge – but in most cases, the advice and the help from a mortgage broker will usually cost you, the client, absolutely nothing (and, in many cases, will probably save you thousands of dollars!!!).

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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