RSS

Monthly Archives: February 2012

How Consumers Value Features & Attributes of a home

How consumers value features and attributes of a home.

#1 is location
If a home is less than 10 yrs old 26% higher value
If a home is less than 5 yrs old 24% higher value
A view…8% higher
Good school near by…6% higher
Second bathroom…8% higher
Strata that allows pets…6% higher
Strata that allows renters…5% higher
Condos that are the same square footage, but the condo with a 1 bedroom, 1 bathroom layout would be valued 8% higher than the condo with 2 bedrooms and 1 bathroom.  People prefer a more open floor plan.

Knowing what my consumers want is important when speaking to them.  It allows me to help direct clients so that they make the best decisions when buying a home or investment property.

 
Leave a comment

Posted by on February 21, 2012 in Uncategorized

 

Genworth sees opportunity in CMHC’s limit

Genworth sees opportunity in CMHC’s limit

Canada’s second-largest mortgage insurer plans to take advantage of government constraints on its Crown corporation rival, Canada Mortgage and Housing Corp.
Genworth MI Canada Inc. executives are making it clear that they see a business opportunity emerging as Ottawa hems and haws about whether to loosen CMHC’s shackles once again.
At the moment, CMHC is restricted to having $600-billion worth of mortgage insurance outstanding. Ottawa places limits on the Crown corporation because its insurance ultimately creates risks for taxpayers. It has increased the limit a number of times in the past, and raised it dramatically this decade, with the most recent move being from $450-billion to $600-billion in 2008.
The amount of insurance that CMHC had in force hit $541-billion at the end of September, meaning the Crown corporation is now bumping up towards its limit.
Finance Minister Jim Flaherty has not specifically stated that he won’t increase the limit, but he has signalled that he wants CMHC to figure out a way to operate within it for now. Given the large amount of risk that taxpayers have already assumed from mortgage insurance, many industry watchers suspect that Ottawa won’t be hiking the limit again any time soon.
“Given economic conditions and concerns around personal leverage/housing in Canada, we would be surprised to see the government increase CMHC’s limit in the near term,” TD Securities analyst Jason Bilodeau wrote in a note to clients.
Some economists have speculated that, by leaving the limit alone, Ottawa will cool the housing market. Banks must insure mortgages when a borrower owns less than 20 per cent of the property. By increasing or tightening the supply of mortgage insurance, Ottawa is able to affect the broader housing market.
But, by maintaining the current limit, Ottawa may finally be lending a hand to the private-sector mortgage insurers – namely Genworth and Canada Guaranty – which have long complained that the government has given CMHC an unfair advantage, mostly by guaranteeing a larger proportion of its insurance. (CMHC’s insurance is 100 per cent backed by the government, while private sector mortgage insurance is backed to the tune of 90 per cent).
If Ottawa keeps the limit where it is, it will serve to level the playing field a bit for the private sector competitors that have been disadvantaged.
On a conference call with analysts Friday, Genworth CEO Brian Hurley brought up CMHC’s limit, and said “I just want to clarify that our business has plenty of capacity for 2012 and beyond.”
The private sector players still have lots of room to do business before they hit the $250-billion limit that Ottawa places on them collectively. And, new legislation that’s expected to pass in the next few months will increase that limit to $300-billion.
“There is plenty of runway for both entities in the private sector to grow with multiple years of production opportunity ahead of us,” Mr. Hurley said.
http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/genworth-sees-opportunity-in-cmhcs-limit/article2328182/?utm_source=facebook.com&utm_medium=Referrer%3A+Social+Network+%2F+Media&utm_content=2328182&utm_campaign=Shared+Web+Article+

 
Leave a comment

Posted by on February 8, 2012 in Uncategorized

 

The Sting of Bank Penalties

  • Lenders like to keep you in their web as long as possible. If you’ve got a closed mortgage and try to escape, they sink their penalty fangs deep in your wallet.To the surprise of many, there are dramatic differences in how those penalties are calculated, even at the same bank.

    CIBC, for example, sells mortgages under multiple brands, with “CIBC” and “FirstLine” being the most popular.

    Recently, we did an interest rate differential (IRD) penalty calculation for a FirstLine customer who wanted to refinance. This client was fortunate to have closed his mortgage at FirstLine instead of directly with CIBC.

    Had that customer chosen a CIBC-brand mortgage instead, his penalty would have been $3,210 higher—even though it’s the same parent bank in both cases.*

    This difference in penalties is explained by each lender’s penalty formula. One uses posted rates and one uses rates that are more discounted. (See IRD Penalty Comparison Rates for more background on penalty calculations.)

    As we’ve written before, painful IRD penalties can be a serious downside to choosing a Big 6 Bank mortgage.  It’s something bank consumers rarely think about….until they need to break their mortgage (and most do before five years.)

    Major banks will rarely admit how bad their IRD penalties are relative to the competition. Fortunately, many smaller lenders offer an alternative by refusing to adopt big-bank-style calculation methods.


    * Assuming the same rate, balance, payments, etc.

Thanks to Rob McAlister for this info.

 
Leave a comment

Posted by on February 1, 2012 in Uncategorized