Gina Burgio, Mortgage Agent

CREATE VALUE IN YOUR HOME

VERICO Designer Mortgages Inc. — Mon, 31 May 2010 13:36:55 -0700

For investors looking to maximize their return on investment, here’s all you need to know: building an income suite is by far the most profitable homeowner reno.

How do I increase the value of my property? That’s the question on every homeowners mind. There are two key survival strategies. The first is to think long term, have a plan and stick to it. History shows that this plan of action can pay off.

The second tactic is to outperform the market. This means ensuring your property increases in value at a greater rate than those in your surrounding market. One way to do that is through renovations – but not all projects are created equal when it comes to generating a return on investment (ROI).

Here are the top five “renos for ROI”:

1. Building an income suite
Also known as a rental suite, this is by far the most profitable reno a homeowner can undertake. Income suites typically have a 150% to 250% ROI.

2. Painting
This is an inexpensive way to freshen up a property. Picking neutral tones and doing a good job are key. This simple reno project gives 100% ROI.

3. Renovating Kitchens and bathrooms
Kitchens should be bright and spacious with a smart layout. Replacing old appliances with inexpensive and more efficient newer ones also adds a lot of appeal. Bathrooms are equally important. The more you have, the better the ROI. This delivers about 75% to 100% ROI.

4. New Flooring
This has a dramatic impact and hard surfaces are the way to go. Laminate flooring is inexpensive, easy to lay, durable and looks great. With modern styles and improved design, it has become the flooring of choice for real estate investors. New flooring can generate an avg. of 70% to 90% ROI.

Light Fixtures and Door Hardware
These can reveal the true age of a property. Installing proper lighting and a few nifty fixtures in the right places, namely the kitchen and dining room, will brighten up the space and create atmosphere. With the right touch, updating light fixtures and door hardware can generate 60% to 75% ROI.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Going Green in Your Home

VERICO Designer Mortgages Inc. — Thu, 27 May 2010 10:51:35 -0700

Going green! Tips for homeowners to make their home more eco-friendly.

Interest in the environment and green building has moved beyond installing energy efficient appliances and swapping out incandescent light bulbs for compact fluorescents. With luxury condos touting eco-friendly features like rain water recycling and construction companies incorporating energy saving features into new homes, it's no wonder real estate professionals say more and more potential home buyers are asking about "green homes."

With demand for environmentally friendly homes blossoming across the country, one way to make a home stand out in a stalled real estate market is to retro-fit it to green standards. Below are some tips from the professionals at Coldwell Banker Real Estate Corporation on how to make your home sustainable, energy- and cost-efficient now, to appeal to eco-conscious homebuyers later.

Replace hardwood floors with renewable materials. While hardwood has been the flooring of choice for the past several years, bamboo floors are much more eco-friendly because bamboo grows quickly and can be easily replaced. In the kitchen, linoleum floors, made from solidified linseed oil, wood flour or cork dust over a burlap or canvas backing, is very eco-friendly compared to modern floor coverings made from polyvinyl chloride.

Don't flush away your money. Consider replacing existing commodes with low-flow toilets which use approximately 20 percent less water per flush, or dual-flush toilets with two buttons to give home owners the choice of flushing with a half- or full tank.

A ray of light. In many neighborhoods, owning a home on the north side of the street has always been more desirable than ones on the south side. South-facing windows provide more natural daylight, making a home more bright and cheery. More importantly, natural daylight helps keep indoor climate comfortable during the winter months, allowing a homeowner to lower the thermostat. Alternatively, drawing shades during key daylight hours during the summer can help cut down on air conditioning needs.

Green gardening. Sustainable landscaping is becoming all the rage to eco-conscious home owners. Planting native plants, vegetation and shade trees strategically around a home will keep it cool during the summer and block cold winds during the winter. Native vegetation thrives in its preferred environment and won’t require excess water. In addition, concrete driveways and patios can be replaced with permeable paving materials, allowing water to pass through to the ground, in turn reducing runoff that erodes soil and causes flooding of sewer systems.

Switch to green power. The use of renewable energy in a home, such as solar, wind, water or geothermal, greatly helps reduce pollution. However, installing solar panels or wind generators can be enormously expensive. Today, many utility companies in the U.S. are offering home owners an option to purchase a form of renewable energy that does not cost much more than conventional energy. The government also offers many financial incentives to home owners who install renewable-energy systems.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Ten Spring Organizing Tips

VERICO Designer Mortgages Inc. — Thu, 20 May 2010 11:22:10 -0700

Here are some tips to help you with your spring cleaning.

1. Open the windows and turn on some music. Studies show listening to an upbeat tune while working can actually increase productivity and lower your stress levels.

2. Gather up the clutter and move it to an appropriate location. Everything should have its home.

3. Start your organization of rooms one by one. Taking on more than one room at a time can be overwhelming and unproductive as you may lose your momentum. Don’t allow yourself to be distracted by phone calls, TV or family.

4. If you do not already have a filing cabinet, this is an investment that you should not overlook. File away all important papers from your car insurance to your monthly bills.

5. When organizing your closet, remove all fall/winter clothes and put into piles. One pile of clothes that will be worn next year, next a pile of clothes you wish to donate/sell and finally a pile of clothes that need to be mended or dry-cleaned before storing. Use plastic containers for storage as the glue in cardboard can attract insects.

6. Spring is in the air and so are garage sales. Now is the time to take a good look at items in the house that you have not used and will most likely not use again. Turn those unused items into cash or donate to a Goodwill location near you.

7. Garage clean up. Always make sure to wear a protective mask when cleaning in a garage so you do not have to inhale dust and other lurking allergens. Garage shelving is essential for maintaining organizational order!

8. In the kitchen take note of the cooking items that you have no used in the past year. Chances are if you have not used them- you can get rid of these unnecessary items cluttering your kitchen.

9. Set a time schedule for organizing each day.

10. Reward yourself after for a job well done.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Taking Care of Your Home

VERICO Designer Mortgages Inc. — Tue, 18 May 2010 08:39:08 -0700

Proper maintenance protects the value of your home, keeps it in great condition and means less work and fewer costly repairs in the long term.

- On the pre-possession inspection tour, the builder will explain how to operate and maintain heating, cooling and electrical water systems. You will want to know basic procedures – how to turn the systems on and off and change the settings if required, when to schedule maintenance and who to contact.

- Before establishing a regular housekeeping routine, take a few minutes to read through the product literature provided by your builder. Follow the directions from the manufacturers to preserve the beauty of your home.

- Place furniture away from heating and cooling vents. Keep non-carpeted floors in great shape by using easy-to-apply protectors on legs of chairs, tables and sofas.

- Clean the eaves troughs each fall to prevent build-up of leaves and again in the spring to ensure proper waterflow. Rinsing the siding with water or washing gently with soap once a year will keep it looking great and in tiptop shape.

Ask your builder for more great tips on preserving the beauty and quality of your brand new home.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Golden Rules of Renovation

VERICO Designer Mortgages Inc. — Thu, 13 May 2010 11:30:49 -0700

The Canadian Renovator’s Council of the Canadian Home Builders’ Association offers a number of golden rules to help renovating homeowners achieve their goals.

- Know what you want. Take the time you need to explore the possibilities for your home and develop a firm plan. Begins with the fundamentals-what do you need and how you want your “new” home to look, feel and work for you and your family.

- Set a realistic budget. Decide as early as possible how much money you want to spend-this allows you and your renovator to focus on the work that is doable within that budget. Experienced renovators can provide sound cost advice.

- Plan for the long term. Thinking ahead avoids short-term renovations that may need to be redone in the future. Discuss your short- and long-term goals openly with your renovator. Professional renovators can conduct a thorough inspection of your home and offer suggestions for the most effective sequencing of work over a period of time.

- Don’t jeopardize the quality of your renovation by compromising on the quality of products or materials. If it’s worth doing, it’s worth doing well, and that means using products that offer the right combination of performance, durability and aesthetics.

- Don’t choose a renovator on price alone. While it is always tempting to go for the lowest price, you need to consider the implications of doing so. Does the renovator understand what’s involved in your project and have the necessary experience? Will the renovator offer a warranty on the work? Will the renovator still be in business if you need to call back?

- Protect yourself. Dealing with a professional renovator is your greatest protection against an incompetent or unfinished job. A written contract spells out the arrangements between you and your renovator and describes your renovation in detail. Professional renovators also carry Worker’s Compensation, liability insurance and any licenses required by your province.

- And don’t buy from a door to door salesperson without carefully checking out the company. Before you enter into any kind of agreement, talk with friends and family. Contact your local Home Builders’ Association to see if the company is a member. Also check with the Better Business Bureau to see if anyone has lodged a complaint against the company.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Tips to Consider Before Buying a Home

VERICO Designer Mortgages Inc. — Thu, 06 May 2010 11:04:55 -0700

You’re about to invest in your most valuable asset. Below are our top 8 recommendations to make you more confident as you start your home buying journey.

1. Your Credit Rating
Getting your finances in order is probably the most important step you should take. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.

2. Understanding How Mortgages Work
Get familiar with the mortgage laws, structure and options. That way, you will be able to decide on the right loan and lender – crucial to your home buying success. It’s up to you to determine which lender is best for your needs, and it’s always a good idea to have at least a bit of background about the loan process before you talk to a lender.

3. Getting a Mortgage Pre-Approval
Do you know how much house you can afford? Probably not, unless you’ve talked to a lender. Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first?

4. Sorting Out Your Needs and Wants
Buying a home isn’t as difficult as you might think, even if you’re short on funds. But the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.

5. Preparing to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both. It’s essential to understand agent duties and loyalties before you make that first phone call.

6. The Great Home Search
The Internet is a great tool – you can spend endless hours searching the public version of the Multiple Listing Service website. You can also pick up House For Sale magazines and read classified ads in your local newspapers. You might even plan an afternoon drive to preview neighbourhoods. These are all excellent ways to see what’s available out there.

7. Pre-Offer Investigation
Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase. Appoint a professional to conduct the home inspection. Study what kind of house it is and consider its market value.

8. Making the Offer
There’s no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout, so its important to meet with your agent, attorney or advisor to fine-tune your offer and take care of all the contractual considerations.

(Source: HGTV.ca / http://www.hgtv.ca/articles/articledetails.aspx?ContentId=1916&cat=3&by=1)

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Prepping Your Garden for Spring!

VERICO Designer Mortgages Inc. — Wed, 05 May 2010 12:44:31 -0700

Spring can’t come soon enough for a gardener. After months of deprivation, it’s finally time to get back out there. Your garden has gone through a tough few months; this is your chance to help its transition out of dormancy go as smoothly as possible. Get your garden growing again with these handy tips.

Be Well Equipped

Review your gardening tools. Clean off any debris from last year and check hinges on pruners to ensure they are properly lubricated and that the cutting action is still smooth. Also check out your tools for any rust and remove it wherever possible.

Also check your lawnmower. Blades should be clean. Rotary mowers should have a smooth spinning action. Electric and gas mowers should be given a thorough servicing.

Once the ground has started to dry out, get out in your garden for a garbage pick up. Strong winter winds can blow all sorts of papers and other debris into the garden. Get rid of any dead plants you didn’t get around to removing last year; spring is the time to replace them.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Canada’s Dollar Appreciates as Crude Oil Rises, Equities Gain

VERICO Designer Mortgages Inc. — Tue, 04 May 2010 08:50:35 -0700

On May 3 Canada’s dollar rose versus the greenback as U.S. stocks climbed, crude oil reached $87 a barrel and gold touched the highest level since December.

The currency has been the second-best performer this year among the U.S. dollar’s 16 most-traded counterparts, trailing Mexico’s peso, on speculation Canada’s central bank will raise borrowing costs either at its next policy meeting on June 1 or the following one in July.

The currency appreciated 0.7 percent to C$1.0107 per U.S. dollar at 4:12 p.m. in Toronto, extending its gain in 2010 to 4.2 percent. It closed at C$1.0179 on April 30. One Canadian dollar buys 98.95 U.S. cents.

Canadian government bonds were little changed, with the 10- year yield down less than 1 basis point, or 0.01 percentage point, to 3.65 percent. The price of the 3.5 percent security maturing in June 2020 increased 3 cents to C$98.76.

The loonie, as Canada’s currency is sometimes known because of the image of the aquatic bird on the C$1 coin, decreased last week on speculation gains on potential increases in interest rates were overdone. It reached parity with the greenback on April 6 for the first time in almost two years.

Crude-Oil Gain

Crude oil for June delivery climbed today as much as 1.2 percent to $87.15 a barrel on the New York Mercantile Exchange. Gold for immediate delivery advanced as much as 0.7 percent to $1,187.80 an ounce, the highest level since Dec. 4. Canada gets about half its export revenue from raw materials.

The euro fell for the first time in four days against the U.S. dollar today, dropping 0.8 percent to $1.3192 on concern the European Union and International Monetary Fund’s 110 billion euro ($145 billion) bailout package for Greece will fail to win support from some of the region’s governments.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Canadian Dollar at par with US Dollar

VERICO Designer Mortgages Inc. — Tue, 06 Apr 2010 12:11:28 -0700

It seems like yesterday when the Canadian Dollar was at par with the US Dollar. It took less than 2 years for the exchange rate to equalize again. But what does this mean for the Canadian economy?

Generally, the lower the value of the Canadian dollar, the more Canada was trading. When the dollar was at par in July 2008 it reflected a weakening economy in Canada. But is that still the case? More than ever Canada's economy is strong in comparison to markets with which we are trading.

In terms of trade a strong dollar weakens Canada's selling points, but could a strong economy within Canada compensate for a loss in trade? We already have a booming real estate market and interest rates haven't been lower in years. Perhaps the way Canada will benefit is through an increase in foreign investment for future gains.

I suppose only time will tell.

What are your thoughts?

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Will the tighter mortgage rules lead to excessive cheating?

VERICO Designer Mortgages Inc. — Wed, 31 Mar 2010 23:05:59 -0700

In response to the recent Financial Post article (link below), do you feel like the tighter mortgage rules will show a great deal more cheating?

I'm torn because I know that a 20% downpayment from an investor is difficult, though not "impossible" as this article states, to find for some investors. But I have to wonder if it is not exactly what we need to protect the market from people who really shouldn't be investing in some cases. Speaking from personal experience, it takes a good deal of credit and/or liquid assets to manage a property properly and not be hanging on by your fingertips. After all, if the mortgage payment is reliant on rental income there has to be some kind of padding for carryover for at least a few months in a tenant-less or "worst case" scenario.

What are your thoughts?

Original Article:

Tighter mortgage rules may lead to more cheating

By Andy Holloway, Financial Post

Mortgage fraud may not be the most serious crime in the grand scheme of things, but it's not something the government should be helping. But that's exactly what real estate professionals say is a likely result of the new mortgage rules being put into place on April 19.

"There's going to be a dramatic increase in mortgage fraud again," says Don Campbell, president of the Real Estate Investing Network, a Calgary-based association of investors who collectively own more than $3 billion in property. "You watch this thing start to take off."

The reason? It's virtually impossible for investors to buy a third rental property without putting 20% down because the new Canada Mortgage and Housing Corp. rules use a 50% add-back policy instead of an 80% offset for rental income. Essentially, that means investors get less mileage from the rent that is typically used to pay off the mortgage.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

It's finally happening, mortgage rates starting to rise in Canada

VERICO Designer Mortgages Inc. — Wed, 31 Mar 2010 11:22:51 -0700

We all expected to see this but I'm surprised to see it happening so soon. Undoubtedly rates will now only continue to rise.

Banks bump up mortgage rates

Other banks expected to follow suit

www.cbc.ca

Mortgage rates have begun to rise from their record lows, with news Monday that several Canadian banks are increasing several fixed mortgage rates by up to 6/10ths of a percentage point.

The biggest jump is attached to the popular five-year fixed closed rate, which moves from 5.25 per cent to 5.85 per cent at Royal Bank, TD Canada Trust, and Laurentian Bank. That's the posted rate, which is routinely discounted by the big banks.

RBC's new discounted rate for the five-year term also rises 6/10ths of a percentage point to 4.59 per cent. TD's rises the same amount to 4.55 per cent. The discounted rate at Laurentian moves up to 4.54 per cent.

How much difference will that make? A $200,000 mortgage amortized over 25 years costs $1,051 a month at a rate of 3.99 per cent. At 4.59 per cent, that jumps $66 a month to $1,117.

The banks also raised their three-year and four-year fixed closed rates. The posted three-year rate at Royal Bank and Laurentian climbs one-fifth of a percentage point to 4.35 per cent, while the posted rate at TD jumps 4/10ths of a point to 4.70 per cent.

The posted four-year rate at all three banks jumps 4/10ths of a percentage point to 5.34 per cent.

Other banks are expected to follow suit. The new rates, effective Tuesday, represent the first hike in Canadian mortgage rates since last October. The posted five-year rate is now back to where it was for much of last summer.

New mortgage rules that go into effect next month require borrowers to qualify at the five-year rate, rather than the old three-year standard, even if they are applying for a variable rate mortgage.

Variable rates expected to rise soon

Variable mortgage rates, which rise in tandem with the Bank of Canada's key overnight lending rate, are not affected by Monday's announcement. But they are likely to be heading up soon too.

Bank of Canada governor Mark Carney warned last week that inflation was higher than expected. That had some market watchers forecasting that the central bank could move to raise its key lending rate as early as June. The possibility of an earlier rate hike sent bond yields up, and that appears to have prompted Monday's mortgage increase. Fixed mortgage rates tend to move higher when long-term bond yields rise.

The key rate has been at a rock-bottom 0.25 per cent since April 2009 to help the economy recover.

A report out Monday from CIBC World Markets said rising rates shouldn't be enough to derail the stock market rally - pointing out that the market is historically strong six months before and after rate increases.

A survey released last week by RBC found almost two-thirds of respondents expected the cost of servicing a mortgage to rise this year.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

International investors snap up $1.6-billion in Canadian mortgage bonds

VERICO Designer Mortgages Inc. — Tue, 23 Mar 2010 07:22:26 -0700

Canada Housing Trust, the financing arm of the nation's housing agency, sold 27% of its debt offering this week to investors outside Canada, suggesting growing international appetite for Canadian debt. Canada Housing sold $6-billion of five-year, 2.95% bonds maturing in March 2015 with a price to yield 18 basis points above Canada's 2.5% bonds maturing in June 2015. That's the tightest spread in more than two years, according to Mark Chamie, Canada Mortgage and Housing's treasurer in Ottawa. "Canadian fundamentals are very strong relative to other global economies," said Mr. Chamie, adding that foreign purchases of Canada mortgage bonds averaged 23% of each offering last year. The fundamentals are "allowing us to price at the tightest level since September 2007." In total, foreigners acquired about $1.59-billion of the issue. Canada Housing Trust has about $175-billion of debt outstanding.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

US News: Why Canada Avoided a Mortgage Meltdown

VERICO Designer Mortgages Inc. — Fri, 19 Mar 2010 09:14:22 -0700

By ALEX J. POLLOCK

Suppose we agree that we would like our society to have widespread home ownership and a property-owning citizenry. Does it take government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac with implied taxpayer guarantees, tax advantages for the interest paid on home mortgages, and government pressure for "creative" mortgage lending to achieve this?

The Canadian experience shows that it doesn't.

Canada makes a useful comparison for the U.S. Both countries are rich, advanced, stable, have sophisticated financial systems and pioneer histories, and stretch from Atlantic to Pacific. But Canada has no housing GSEs. Mortgage interest is not tax deductible. It does not have 30-year fixed rate, freely prepayable mortgage loans. Mortgage lending is more conservative and much more creditor-friendly.

Canadian mortgage lenders have full recourse to the mortgage borrower's other assets and income, in addition to having the house as collateral. This means there is little incentive for borrowers to "walk away" from their mortgage. The absence of a tax deduction for mortgage interest probably increases the incentive to pay down debt. Most Canadian mortgage payments are made through automatic debit of the borrower's checking account-a technical but important point. Canadian fixed-rate mortgages typically have prepayment penalties to protect the lender and the interest rate on the loan is fixed for only up to five years.

This relative creditor conservatism has meant that Canada and Canadian banks have so far come through the international financial crisis in much better shape than their U.S. counterparts. Canada didn't avoid the recession, but mortgage delinquencies have so far remained much lower than in the U.S., with the percentage of loans delinquent 90 days or more at approximately one-tenth of the U.S. level.

What about the home ownership rate-the percentage of all households owning their own home? Isn't there a home ownership price to pay for this Canadian credit conservatism? No.

Here's the home ownership rate in Canada: 68%. In the U.S. it's 67%. The U.S. rate peaked at the top of the housing bubble at 69%. In other words, two very different housing finance systems, one much riskier than the other, produced virtually the same home ownership rate.

This must cause us to call into question longstanding U.S. beliefs about the relationship of government-subsidized housing finance to home ownership.

The former savings-and-loan industry justified its special tax and regulatory privileges, including its right to pay more interest on deposits than commercial banks were then allowed to, by appealing to its role in home ownership. Then came the savings and loan collapse of the 1980s.

Fannie Mae and Freddie Mac took over the home ownership mantra. In the vast risk expansion of their arrogant days, with very high rates of profitability made possible by government-granted privileges, they justified these privileges by appealing to home ownership. It was often said by their supporters that the GSE-dominated U.S. housing finance system generated the highest home ownership rates in the world, which was false, and that this system was the "envy of the world," which was also false. Fannie Mae's annual reports regularly featured a house with an American flag flying.

Now it is clear to everyone that Fannie and Freddie, having done so much to help inflate the bubble and having been dragged into insolvency by its deflation, are wards of the government. The taxpayer bailout of these GSEs is likely to cost much more than the bailout of the saving and loans did a generation ago. The U.S. Treasury has unilaterally signed the taxpayers up for unlimited support of these bankrupt purveyors of government-advantaged mortgage finance.

So the widespread previous beliefs about the desirability of having GSEs were wildly mistaken. It ought to be clear by now that an entity can be a private company with market discipline, or it can be a government body with governmental discipline, but it can't be both.

In this context, it is important to recognize that Canada does have a government body to promote housing finance: the Canada Mortgage and Housing Corporation, which is the dominant credit insurer of mortgages in the country. Whether or not you like the idea of such a government financing operation, at least its status is perfectly clear and honest. The Canadian government owns 100% of its stock. Its guaranty from the government is explicit. It provides housing subsidies which are on budget and must be appropriated.

Let's remember that the original sin of making Fannie a GSE in 1968 was to get it off the federal budget so the deficit looked smaller. Canada in this respect looks superior to the U.S. in candor as well as credit performance.

Mr. Pollock is a resident fellow at the American Enterprise Institute in Washington, D.C. He was president and CEO of the Federal Home Loan Bank of Chicago from 1991 to 2004

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

New Mortgage Rules Leave Homebuyers Confused: Insured buyers must show 'ability to pay'

VERICO Designer Mortgages Inc. — Thu, 18 Mar 2010 09:49:56 -0700

Frank and Susan Williams bought a house near Hamilton, Ont., this month, they followed a time-honoured tradition of using leveraged financing.

With mortgage insurance they only had to put down 5% of the $270,000 purchase price. They went with a closed variable rate at 2.25% and amortized the loan over 35 years. The deal was initiated with a mortgage broker, with Bank of Nova Scotia providing the financing.

"It's a three-bedroom bungalow. That was attractive to us. We have a dog and we like to do things in the backyard. We did not have the type of money we thought we'd have to put into a house. We said let's just bite the bullet and get this over with," Ms. Williams says.

And getting it over with was probably a good idea. First, they were in a rent-to-own arrangement and had to exercise their option to buy before August 2010. And second, based on pending federal rules for government-backed insured mortgages that come into effect on April 19, the Williams (not their real name) would probably not have qualified for the variable-rate mortgage. In fact, as recent arrivals from the United States and its housing crisis, their credit history might not have passed any stress test.

"We really came from the United States with nothing. Everything we had disappeared with the housing crisis. In areas that had bad loans all the houses just hit bottom. We were expecting US$250,000 out of our house but we got nothing," Ms. Williams says. They walked away from the whole mess.

But while the Williams might have had good reasons for leveraging to get their dream home -- they are firsttime buyers in Canada -- the new federal rules governing mortgages have been widely misunderstood. In fact, the biggest fear among the young and house-less is fear itself.

"There are a lot of rules that changed. But they weren't communicated very well," says Robert McLister, the editor of Vancouver-based Canadian Mortgage Trends (www.CanadianMortgageTrends.com).

Margo Wynhofen, of Grimsby, Ont.-based Verico One Mortgage Corp. ( www.mymortgageadvisor.ca) and vice-president of the Independent Mortgage Brokers Association of Ontario, says she has had to spend considerable time explaining federal Finance Minister Jim Flaherty's statement of Feb. 16.

"I had a lot of people misunderstand the announcement. So I had a lot of clients call me for clarification. There was an overwhelming sigh of relief," Ms. Wynhofen says.

Under current mortgage-lending rules, buyers with a down payment of less than 20% of the purchase price must purchase mortgage insurance, with the most common source being Canadian Housing and Mortgage Corp. The new rules affect only customers that are required to purchase the insurance.

Under the new rules, all buyers requiring mortgage insurance will have to meet the "ability to pay" for a higher, more expensive five-year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and a shorter term.

"It's not just first-time homebuyers who are affected. It's anyone who wants a variable mortgage rate now who doesn't have one already, they now have to qualify at a higher interest rate. Some of them won't qualify. And that's fine so they'll just take a fixed rate. It's not the end of the world," Ms. Wynhofen says.

Bernice Dunsby, director of home equity financing at the Royal Bank, says the new rules might even help save first-time buyers from themselves.

"We believe the new measures will have a small impact on mortgage growth, if any. First-time buyers should not be any more concerned about these changes. In fact, I believe the changes will actually help first-time homebuyers to ensure that not only can they afford their home today but in the future, especially if interest rates rise," says Ms. Dunsby.

In some cases, the rules might be outdated before they are fully implemented. A growing number of homebuyers are forgoing the conventional mortgage and using alternative financial products. Take the case of London, Ont., accountant and recent homebuyer Phil Parkinson. Three years ago, he bought his first home with a fully secured line of credit offered through Manulife Financial Corp.

The Manulife One product provides up to 80% of the appraised value of your home. It can be used to pay off the balance of your existing mortgage, personal lines of credit and any other outstanding debts you might have.

"These operate on a variable rate. It's just like one big bank account. You can have your money deposited into the account, you can pay your bills. [As you deposit] you can knock your account down and lower your interest calculation. Theoretically, you don't have to pay anything expect the interest," Mr. Parkinson says.

Other highlights of the rules don't directly affect firsttime buyers. For example, the maximum amount Canadians can withdraw in refinancing their mortgages has dropped to 90% from 95% of the value of their homes. rule has created a mini-stampede.

"There is a bit of urgency now to get [a refinancing] done before April 19. People are chronically refinancing. I have clients that refinance every two to three years to take the equity out of their home to pay off credit-card debt. The home has become an ATM machine," Ms. Wynhofen says.

A January 2007 Statistics Canada study of personal debt concluded that "increasing mortgage debt for refinancing purposes or taking out home-equity loans implies that homeowners in both [Canada and the United States] are using their homes as a source of cash to finance their spending rather than as an investment."

And in an effort to contain the risks of real-estate speculation, as of April 19 the minimum down payment for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation rises from 5% to 20%.

As for ex-patriot Americans Frank and Susan Williams, they're pretty relieved about their fresh start with a new house.

"It's very different to get a mortgage here. It's a lot less hassle than in the United States," Ms. Williams says.

And because the Williams are not particularly worried about the new mortgage rules, they are already thinking about their next purchase.

"We might be able to buy a little place that's larger when we can leverage this up a bit -- maybe get something cheaper than this with more room,' Ms. Williams says.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

The History of St. Patrick's Day

VERICO Designer Mortgages Inc. — Wed, 17 Mar 2010 08:29:01 -0700

Via Vic Steele (Valet Real Estate Services):

Half the office has plans to go partying tonight...okay, more than half the office! In the wee hours of the morning, I caught myself wondering what is the origin of St. Patrick's Day and why is it celebrated on March 17th?

It turns out that today is the anniversary of St. Patrick's death around 460 A.D. He was born in Britain and had an adventerous youth (this isn't a bio, it's a snapshot) He had a vision from an angel in a dream to go to Ireland as a missionary. He studied and was ordained as a priest. He spent his adult life sheperding Christians in Ireland and helping the Irish find The Lord.

St. Patrick's death was during lent. I'm not exactly sure why, but the holiday evolved to the provisions of Lent being waived on March 17th. That allowed Christians to eat meat for a day! The cynic in me has figured out why they didn't make his birth...or his ordination date the holiday!!!!! Imagine going several days with no meat then being offered corned beef...mmmmm...party!

So whether you are attending a parade, a party or pub-hopping today; know that you are celebrating the death of a priest who has given people a reason to take a day off from Lent for over 15 centuries!

I can't explain the leprachaun, but whoever knew a leprachaun that couldn't find a party!?!

Raise your tankard of green ale or Guiness and say, "God Bless St. Patrick! Where's the Beef?"

A referral is sending someone you care about to someone you trust!

Vic Steele, Broker, CA DRE License No. 01349863

Valet Real Estate Services

571 N. Poplar, Suite H, Orange, CA 92868

Vic@SteeleGroup.net

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

National News: Loonie rises to highest level since July 2008

VERICO Designer Mortgages Inc. — Wed, 17 Mar 2010 08:23:14 -0700

TORONTO -- The Canadian dollar rose to its highest level since July 2008 on Tuesday after the U.S. Federal Reserve held benchmark interest rates near zero, as expected, and renewed its promise to keep them exceptionally low for an extended period.

Building on momentum from firmer oil and equities prices and stronger-than-expected domestic economic data, the Canadian dollar rose as high as $1.0135 to the U.S. dollar, or 98.67 U.S. cents, after the U.S. central bank's decision.

Tuesday's rise marked the resumption of the currency's upward march after pausing on Monday as investors took a break after an 11-day stretch of gains.

The Canadian dollar ended at $1.0140 to the U.S. dollar, or 98.62 U.S. cents, up from Monday's close at $1.0197 to the U.S. dollar, or 98.07 U.S. cents.

The outcome of the U.S. interest rate decision was widely expected, though the U.S. central bank also pointed to increased momentum in the economy's recovery.

"I'd say we've had a minimal reaction to the Fed release. There was very little changes from the FOMC," said Camilla Sutton, currency strategist at Scotia Capital.

"It was a risk-on day where the U.S. dollar was generally weaker across the board and most risk assets are doing well. If we see that continue I think that just pushes the Canadian dollar one step closer to parity."

The day's domestic data also provided more proof the Canadian economy is moving to a surer footing as figures showed January manufacturing sales higher than expected and labor productivity rising for the first time in more than a year.

"Certainly it's pointing to solid growth being sustained," said Paul Ferley, assistant chief economist at Royal Bank of Canada. "At the moment, we're still of the view that we'll see some moderation from the 5% (gross domestic product) gain in the fourth quarter."

He said the data was consistent with his forecast that first-quarter growth would be just under 4%, although it could be higher if statistics continue to come in very firm.

Earlier, Finance Minister Jim Flaherty appeared more relaxed with the Canadian dollar's sharp appreciation as he said the currency's recent rally in part reflects the country's healthy fiscal position, and does not suggest extraordinary volatility.

BONDS FIRM AFTER FED ANNOUNCEMENT

Canadian bond prices were mildly firmer Tuesday after the Fed repeated it plans to keep interest rates low for an extended period.

"I don't think it caught any one by surprise. But there were some expectations that there could be a word change," said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment.

"It's much more of a relief rally than anything else, coupled with thin trading conditions."

The two-year government bond was up 4 Canadian cents at $99.92 to yield 1.541%, while the 10-year bond gained 40 Canadian cents to $102.41 to yield 3.442%.

Canadian bonds were mixed against their U.S. counterparts. The difference between 10-year yields widened 0.8 of a basis point to 21.1 basis points.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Great article on Gail Vaz-Oxlade

VERICO Designer Mortgages Inc. — Tue, 16 Mar 2010 10:01:08 -0700

Great story today on Gail Vaz-Oxlade. I love her show and I think she is doing wonders to educate Canadians on debt and knowing their financial situation.

Don't just fall into a debt hole

Roma Luciw

From Monday's Globe and Mail Published on Monday, Mar. 15, 2010 12:00AM EDT Last updated on Monday, Mar. 15, 2010 12:26PM EDT

If you want to make Gail Vaz-Oxlade's blood boil, just mention debt.

"People have no idea how much money they are earning or how much money they are spending. They are clueless. I am stunned at their willingness to just fall into a debt hole," the brash and blunt Canadian personal-finance maven said in an interview.

The host of the financial makeover television show Til Debt Do Us Part and author of the Canadian bestseller Debt-Free Forever believes easy access to cheap credit, along with a reluctance to take control of their financial situations, are most people's downfall in the IOU department.

"Whenever I tell people to add up their debt, they practically faint in front of me. People do not know how deep their shit is and if it scares you to death, you need to start paying attention to it."

With interest rates likely to rise in the coming months and credit set to get more expensive, things will only get tougher for debt-laden Canadians, Ms. Vaz-Oxlade said. "All those people who got into homes and are barely making ends meet with a mortgage rate that is a gift will be severely squeezed when they need to renew their mortgages."

Rates on lines of credit will also jump, she said, forcing people to make tough choices such as cutting out the expensive weekly restaurant meals in favour of eating at home. Those who are willing to change their behaviour, however, can get out of debt by following these steps:

1 Take stock of your debt situation. Make a list of all the places to which you owe money, except for your mortgage, unless you've consolidated consumer debt in your mortgage. If so, add the amount you consolidated to your list.

2 Prioritize your debt. List what you owe by interest rate, with the most expensive (the highest rate) at the top. This is the order in which you'll pay off the debt.

3 Calculate the minimum payment on each debt. That's what you have to pay to keep current and not hurt your credit history. Write the minimum payment beside each debt and add them up. That's the least you can put toward your debt every month.

4 Figure out how much to repay to get out of the hole. If you owe $2,500 on your credit card at 18 per cent, it's going to cost you $37.50 a month in interest. But if you want to get that credit card paid off in six months, you're going to have to slap about $417 a month against the principal to make it go away. That's a total of $454.50 a month. Once you've paid off the credit card, you can use that $454.50 for your next most expensive debt. That's called snowballing.

5 Decide where you're going to get the money. If you want to be debt free, you have to find the money to pay off the debt. It may mean going over your budget with a paring knife. It may mean finding a way to make more money. Do whatever it takes.

6 Make your debt repayments automatic. Set up an automatic payment for each debt, taking the guess work out of it, and making a firm commitment to the process. On your most expensive debt, auto pay the amount you came up with to have the debt gone by your Debt Freedom Day.

7 Chart your progress. Create a chart that shows how much you owe. Each time your auto pay goes through, colour in one of your boxes, or move your marker up the thermometer so you can see the progress you're making.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Canadian Mortgage Rates Expected to Rise 2-3% Over Next Two Years

VERICO Designer Mortgages Inc. — Fri, 12 Mar 2010 02:43:15 -0800

I heard an interesting fact today about the financial state of first time homebuyers: According to reports, 75% of 18-34 year old first time homebuyers would be in trouble if their paycheck was delayed one week.

That's huge. Mortgages are expected to rise up to 3 percent over the next two years. Will we be faced with an influx of foreclosures when mortgage rates rebound?

I certainly hope not and there are changes currently being introduced to avoid such an issue. One such change is documented in a recent news article:

"Mortgage loans will be income-tested against the five-year posted interest rate, as opposed to the three-year rate currently used. According to TD Financial, the current five-year closed variable rate is 2.25 per cent, but people must have enough income to pay the three-year fixed rate of 4.3 per cent, to prove they will be able to handle future rate increases. Under the new rules, you will need to make enough income to pay the five-year rate of roughly 5.5 per cent. With the TD example, you will need annual household income of $68,838 rather than $59,626 to get a mortgage on a $337,000 home." (Toronto Real Estate News)

Another change is the reduction of refinancing from 95% of house value to 90%. This is where I feel the aforementioned group of financially unstable new homebuyers will have trouble. That extra 5% of equity when even a single paycheck is a setback could prove to be the straw that breaks many a camel's back, so-to-speak.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Looking forward to an exciting spring market

VERICO Designer Mortgages Inc. — Thu, 11 Mar 2010 08:30:57 -0800

I can forsee this spring in Canada being huge for mortgages and real estate. With an already booming real estate market and incredible mortgage rates business looks like it will be great. I can imagine a big push on sales before the HST comes into play. And with spring already being the prime season for the industry I'm prepping myself for some late nights and long weekends working. And very excited to do so, if I may say so!

I'm interested to know your take on the situation? Do you think it will be a lot of hype?

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bloomberg Update on Canadian Dollar Trades

VERICO Designer Mortgages Inc. — Thu, 11 Mar 2010 08:21:42 -0800

Canada Dollar Trades Near Five-Month High on Growth Outlook

Canada's dollar traded near its strongest level in almost five months as investors bet the nation's economy will be among the strongest during the recovery...

With trade data out tomorrow ahead of Friday's employment data, a lot of players may be in ‘wait and see' mode given much of this dollar-Canada move has been on more bullish Bank of Canada rate expectations," Sacha Tihanyi, a currency strategist at Bank of Nova Scotia in Toronto, wrote in an e-mail. "A very good employment print will push these expectations and help drive dollar-Canada even lower."

Bloomberg
Read More

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Choose mortgage words carefully

VERICO Designer Mortgages Inc. — Wed, 10 Mar 2010 09:13:32 -0800

Many consumers fail to understand meaning of terms

By GARRY MARR, Financial PostMarch 10, 2010

When it comes to your mortgage contract, watch your language.

Most consumers only look at their mortgage contract -- one of the most important documents they will ever sign -- just before they are about to close on a house, says Toronto real-estate lawyer Steve Brett.

"It's very rare they come to me [first].

In residential transactions, they usually strike the deal first," he says. "The mortgage commitment comes shortly prior to closing. I'll talk to people over the phone and they'll say, 'These are the terms of the deal -- is that the way it should be?' " For about $200, Mr. Brett says a consumer could run a pre-approved mortgage by him before buying a house. "But in 35 years, I've never had that happen.

I sometimes might get asked [to look at a mortgage contract] on refinancing." Even the most basic mortgage contract terms, such as what constitutes the "prime rate" on a variable-rate mortgage, can create confusion.

"There can be different meanings to things like the prime rate or the base rate," Mr. Brett says. "They could have prime rate of 2%, but the base rate for residential mortgages might be prime plus one [percentage point], so their prime rate becomes 3%. Clients could get into difficulty thinking they are getting a heavily advertised prime rate but they are not." He had a customer come in recently with an offer of financing from a mortgage broker that said he was getting the "prime rate" from a specific company. "I pointed out that [their version] of prime rate might not be the same as the banks'.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Canada due for "boring is beautiful" budget

VERICO Designer Mortgages Inc. — Tue, 02 Mar 2010 09:51:38 -0800

This year's budget is not expected to be overly exciting and that seems to be a good thing for the current economic state. With all the major changes to the market, including changes to the Mortgage rules, being released ahead of time; or as this article states, "Finance Minister Jim Flaherty and his officials have spent weeks diligently stealing their own thunder"; the resulting budget should surprise few of us.

The expected result is that Canada will fare far better than all other G7 nations, forecasting the lowest GDP deficit.

Link below for more details:

http ://www.reuters.com/article/idUSN2611003320100301?type=usDollarRpt

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada Cuts Rate to 0.50%

VERICO Designer Mortgages Inc. — Tue, 03 Mar 2009 12:31:14 -0800

The Bank of Canada cut its lending rate today by half point to 0.50%, the lowest level ever. The decrease was inline with most economists expectations.

Various Canadian Banks followed this announcement by cutting their Prime Rate by 0.50% to 2.50%.

The Bank of Canada also stated that its latest projections for the Canadian economy now look optimistic in the light of the latest economic data.

Gina Burgio, Mortgage Agent
FSCO Lic. No. M08008590
VERICO Designer Mortgages Inc.
FSCO Lic. No. 10194
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada cuts Interest Rate to 1.00%

VERICO Designer Mortgages Inc. — Tue, 20 Jan 2009 09:04:28 -0800

Bank of Canada cut its overnight lending rate by 0.50% to 1.00%, the lowest since the central bank was formed in 1934. The decrease was inline with most economists expectations.

The previous lowest rate level set by the Bank of Canada was last seen at 1.12% in 1958.

In the past few days leading up to this morning’s announcement by the Bank of Canada, a few lenders began cutting some of their fixed term mortgage rates. It is expected that the various Canadian Banks will announce cuts to their Prime Rate either this afternoon or tomorrow.

Gina Burgio, Mortgage Agent
FSCO Lic. No. M08008590
VERICO Designer Mortgages Inc.
FSCO Lic. No. 10194
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Interest Rate Expected to Reach Record Low

VERICO Designer Mortgages Inc. — Fri, 16 Jan 2009 01:43:53 -0800

Many economists expect that the Bank of Canada will cut interest rates to a record low next week on January 20th to stimulate the economy. Its expected that the Bank of Canada will cut its rate by 0.50% to a record low of 1.00%. The Canadian Banks are expected to follow with a cut to their prime rates, which are currently sitting at 3.50%.

European Central Bank to cut its trendsetting interest rate to two per cent on Thursday.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.