Source: Edmonton Journal, Friday May 15, 2015, Business Section
Garry Marr, Financial Post

Potential buyers should consider pre-approval

An increase in mortgage rates is likely just around the corner, so it may be time to get off that fence.

Five-year Government of Canada bond yields have climbed about 40 basis points in the last month. Since mortgage rates track bonds, it makes sense to try to get a rate guarantee if you are shopping for a house, Rob McLister, the founder of ratespy.com, points out.

“There is an inclination to recapture some of the spread (between bond yields and mortgage rates),” said McLister, who expects an increase on the five-year, fixed-rate mortgage of up to 15 basis points.

Consumers looking to buy a home, then, might consider getting pre-approved for a mortgage – an option that offers a guaranteed rate for as much as 180 days.

“I got an email from one lender suggesting we may see something in the coming days,” said Vince Gaetano, a principal at monstermortgage.ca. “I think it would be very prudent (to get pre-approved). The only reason people don’t is they are just lazy or don’t know when their mortgage is up for renewal.”

A rate guarantee nets you a higher rate most of the time and it rises based on how long you want a financial institution to guarantee the rate. Gaetano said 2.64 per cent can be guaranteed for 120 days on a give-year fixed-rate mortgage, which compares with today’s going rate of 2.59 per cent for the same term.

Rate hikes would be coming just as sales are dropping in Calgary and Edmonton. Meanwhile, prices have peaked in every market in the country with the exception of Vancouver and Toronto. And industry watchers say any upward movement will probably not be enough to slow those two white-hot markets or lift Alberta sales.

Doug porter, chief economist with Bank of Montreal, doesn’t think a small change will have much of an impact. “Every basis point matters, but can it single-handedly cool markets? It will take something much more serious than that,” he said. “There is very much ‘the little boy who cried wolf’ story going on here.” Porter expects bond yields to rise over the next year, and said if there is sustained pressure on rates over the long term that will change some psychology in the marketplace.

Phil Soper, chief executive of Royal LePage of Brookfield Real Estate Services Inc., said there are early signs of seasonal slowing in home sale volumes, even in Toronto and Vancouver. “The battle for mortgage market share typically eases when that happens. Bond yields have been rising without a clear improvement in the economy, so the upward pressure on mortgage rates would normally be minimal. However, the timing may be right for our trendsetting banks to ease retail rates upwards as they look to manage profit margins,” said Soper.

Ultimately, a 15-basis-point increase only means about an extra $8 per month in mortgage payments and $700 in interest per $100,000 of debt based on a five-year term and 25-year amortization. But it might spook consumers.

There is no risk to getting a pre-approval from a lender, McLister said, because the consumer can always go back to the bank and demand a lower rate or switch to another financial institution, if rates drop by the time of purchase. Only 15 per cent of pre-approvals actually close but he said banks agree to the process to generate customers. A pre-approval usually involves some sort of credit check, which an affect your credit score, but the impact is likely negligible for anyone with good credit.

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Source: Global News

What do Machu Picchu, Singapore and Edmonton have in common? They all made National Geographic’s list of the best summer trips to take in 2015.

The magazine made a list of its top 10 best summer trips – plus one reader’s choice. In its online article, National Geographic encourages its readers to “meet the world in Edmonton.”

“I think Edmonton has a really unique authenticity and a unique originality,” says Renee Williams, communications manager with Edmonton Tourism.

“I think the city has great artistic feel to it, but I think there’s also a lot of urban culture, as well.”
The magazine touts Edmonton as “Festival City” which anyone who calls the city home can attest to. It highlights Old Strathcona – including the popular Saturday farmers market – the 104 Street City Market and of course, mentions the Edmonton International Fringe Festival, one of the city’s biggest summer festivals.

“Edmonton is welcoming the world this summer. The Festival City is hosting a series of international events, including the FIFA Women’s World Cup Canada 2015 and the Edmonton Folk Music Festival. Multicultural artworks, crafts, performances, and foods representing more than 85 nations will be featured at the Edmonton Heritage Festival,” the article reads.

National Geographic also outlines where to stay, what to eat and what to buy. It also leaves readers with this fun fact about Alberta’s capital city:

“Year-round, Edmonton is one of Canada’s sunniest cities, with about 2,300 total hours of sunshine annually. The lightest and brightest days typically are in June when the sun rises at 5:30 a.m. and doesn’t set until around 10 p.m.”

The following areas round out National Geographic’s top 10:

Singapore
Bermuda
Philadelphia, Pennsylvania
Victoria, Australia
Machu Picchu, Peru
Arizona
Konstanz, Germany
Athens, Greece
England

The readers’ choice best summer trip of 2015 is Jeju Island, South Korea.

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Source: www.albertandp.ca

Hopefully Notley keeps her promise of cancelling the PC’s Mortgage Tax hike!

“Families are worried about their jobs and paying for their mortgage,” said Notley. “But Jim Prentice is barging ahead with his plan to hike the Mortgage Tax by 600 percent, putting a new hurdle in the path to homeownership. Jim Prentice’s Mortgage Tax hike is the worst kind of housewarming gift for homebuyers.”

The PC budget increases the variable Mortgage Tax and Land Transfer fees from $1 to $6 for every $5,000 of property value, as of July 1, 2015. It also increases the fixed fees for mortgages, land transfers, and land title registry searches.

Today, Notley announced that the NDP will cancel the PCs’ tax hikes on mortgages and land titles, allowing new homebuyers to keep hundreds of dollars in their own pockets.

“Jim Prentice is protecting corporate tax giveaways for the PCs’ wealthy friends while making it more expensive for families to buy a home. Clearly, the PCs have the wrong priorities,” said Notley. “The NDP will stop Jim Prentice’s tax hike on mortgages and land titles. Unlike the PCs, the NDP plan will make life more affordable for families and focus on protecting what matters most to Albertans.”
MORTGAGE TAX
Rachel Notley’s NDP will make homes more affordable for families by cancelling the PC plan to increase Mortgage and Land Title taxes.

Our Plan:

• The NDP will cancel Jim Prentice’s plan to increase Alberta’s variable taxes for mortgages and land titles by 600 percent, and reverse increases to fixed fees.
• At a time when families are worried about their jobs and paying their mortgage, the government should not be forcing families to pay more to buy a new home.

Background:

• Fees for mortgages and land titles are based on a combined flat and variable fee. These fees are paid when acquiring a new property and new mortgage.
• Under the PC budget, the flat fee for mortgages and land titles will increase by $25. The variable fee for mortgages and land titles will increase from $1 to $6 for every $5,000 of property value.
• The following fees will be effective July 1, 2015:
  • Mortgages – Flat fee: Increasing from $50 to $75
  • Mortgages – Variable fee: Increasing from $1 per $5,000 property value increments to $6 per increment. This is a 600 percent increase.
  • Land Title Transfer / Title creation – Flat Fee: Increasing from $50 to $75
  • Land Title Transfer / Title creation – Variable fee: Increasing from $1 per $5,000 property value increments to $6 per increment. This is a 600 percent increase.
• Increases to these fees will only hurt Albertans who are purchasing property and make life less affordable for homebuyers. The impact will be as follows:
  • On a house value of $450,000, total land transfer and mortgage fees will increase from $262 to $1,122.
  • On a house value of $650,000, total land transfer and mortgage fees will increase from $334 to $1,554.
• The PCs are also increasing the cost of searching the land titles registry from $10 to $15.

Details:

• The NDP will cancel the PCs’ increases to variable and fixed mortgage and land transfer taxes. The NDP will retain the 2014/15 rates.
• We will also cancel the increase to the fee for searching the land titles registry.
• The total cost of reversing these tax increases will be $160 million this year.

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