General Kimberly Coutts 22 Apr

Bank of Canada Holds Rates Steady, But Pares Bond-Buying Program.

By Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

Bank of Canada Scales Back Bond Buying

Today, the Bank of Canada held its target for the overnight rate at the effective lower bound of ¼ percent. The Bank is also adjusting its bond-buying program from weekly net purchases of Government of Canada (GoC) bonds of $4 billion to $3 billion. This adjustment to the amount of incremental stimulus being added each week reflects the progress made in the economic recovery.

Finally, the Bank now suggests that the remaining slack in the economy could be fully absorbed by the second have of 2022–rather than 2023, suggesting that they may begin raising overnight interest rates before the end of next year. The Bank went on to aver that this timing is more uncertain than usual, however, given the uncertainty around potential output and the highly uneven impacts of the pandemic.

The Bank of Canada now believes that first-quarter growth in Canada is considerably stronger than they were expecting back in the January Monetary Policy Report (MPR). This partly reflects a better global backdrop, particularly in the United States. The US recovery is supported by a rapid rollout of vaccines and substantial fiscal stimulus, bringing spillover benefits to Canada through higher demand for exports and stronger commodity prices.

“But the most important factor in the unexpected economic strength has been the resilience and adaptability of Canadian households and businesses. Lockdowns through the second wave had much less economic impact than they did through the first wave. The economy bounced back quickly with the eased restrictions posting substantial job gains in February and March. The third wave is a new setback, and we can expect some of these job gains to be reversed. But the performance of the economy in recent months has increased our confidence in the underlying strength in the recovery.”

The Bank went on to say, “With the vaccine rollout progressing, we are expecting strong consumption-led growth in the second half of this year. Fiscal stimulus from the federal and provincial governments will also make an important contribution to growth. Strong growth in foreign demand and higher commodity prices are expected to drive a solid rebound in exports and business investment, leading to a more broad-based recovery. Overall, we now project that the economy will expand by around 6½ percent this year, slowing to about 3¾ percent in 2022 and 3¼ percent in 2023.

Over the next few months, inflation is expected to rise temporarily to around the top of the 1-3 percent inflation-control range. This is largely the result of base-year effects—year-over-year CPI inflation is higher because prices of some goods and services fell sharply at the start of the pandemic. Also, the increase in oil prices since December has driven gasoline prices above their pre-pandemic levels. The Bank expects CPI inflation to ease back toward 2 percent over the second half of 2021 as these base-year effects diminish, and inflation is expected to ease further because of the ongoing drag from excess capacity. As slack is absorbed, inflation should return to 2 percent on a sustained basis sometime in the second half of 2022.

BANK OF CANADA “FORCED” TO TAPER

When the pandemic first hit, the BoC bought government securities, providing liquidity to assure the full functioning of the market. As liquidity conditions in the Government of Canada (GoC) bond market improved, the primary objective of central bank bond purchases shifted toward a focus on monetary stimulus. The quantitative easing (QE) purchases of bonds continue to put downward pressure on borrowing rates, supporting economic activity. QE also reinforces monetary stimulus provided by the Bank’s forward guidance. This guidance has committed to holding the policy interest rate (the overnight rate) at its effective lower bound until economic slack is absorbed, so the inflation target is sustainably achieved.

The Bank’s total ownership of GoC bonds outstanding has increased to about 42 percent. Since March 2020, the Bank has purchased more than 35 percent of total sovereign bonds outstanding, a higher percentage than other central banks (see chart below). Considering the size of Canada’s bond market and its economy, this means that the Bank has provided an extraordinary amount of stimulus. The Bank must continue to taper its purchases to ensure sufficient tradeable GoCs are available for longer-term institutional investors–such as insurance companies and pension funds–that must hold triple-A debt to offset their long-term liabilities.

BANK OF CANADA ASSESSMENT OF THE HOUSING MARKET

In today’s MPR, the Bank of Canada included an assessment of the drivers of the strength in Canadian housing:

  • Demand has been supported by relatively high disposable incomes and low mortgage rates.
  • While job losses have risen during the pandemic, they have been concentrated among low-wage earners who tend to rent their homes rather than buy them.
  • Remote work and more time spent at home have led to stronger demand for larger, single-family homes and housing in suburban and rural areas.
  • One implication of this shift in demand is a pickup in new housing construction in regions with fewer supply constraints, such as limited availability of land.
  • Over the past year, the pace of construction has been hampered by containment measures and shortages of materials and skilled workers. These factors are also putting upward pressure on construction costs.
  • Some potential sellers have been reluctant to show their homes during the pandemic.
  • Over time, supply is expected to adjust. A large number of building permits have been issued, with a growing share for single-family homes. Housing starts have also risen significantly in recent months, most notably in rural areas.

The Bank remains concerned about extrapolative expectations leading to overheated price increases and speculative activity (see chart below). They welcome the proposed changes to the Guideline B-20 by the Office of the Superintendent of Financial Institutions to help reduce these risks.

BOTTOM LINE

This was a significant BoC announcement, suggesting a turning point in their thinking. The worst of the pandemic is over, the economy has been remarkably resilient, and the Bank can now see the light at the end of the tunnel. That light is now expected in the second half of 2022, rather than 2023. Although the policy rate will remain at its effective lower bound until then, the central bank has already begun to pare back its GoC bond buying.

Some of the Bank’s optimism reflects the comparative strength of the US economy, which is way ahead of Canada’s vaccine distribution.* The spillover effects of that are meaningful in terms of Canadian exports. The fiscal stimulus evident in this week’s federal budget also provides a ballast for the economy. Although an estimated 425,000 people are still insufficiently employed and the third wave containment measures and vaccine rollout are unpredictable, the Bank is more confident now than any time in the past thirteen months that we will attain full-employment by late next year.

*As of April 20, nearly 25% of the US population has been fully vaccinated and 39% have received at least one vaccine. In comparison, as of April 20, only 2.5% of the Canadian population has been fully vaccinated and 25.4% have had one vaccine.

Subject Free Mortgages – When and When Not to Do It

General Kimberly Coutts 20 Apr

We are full into spring home-buying season after what was already an unusually busy 3 months, I thought I’d delve into the subject of subject free offers.

If you truly want to go in subject free because you believe it’ll be the only way to land your dream home, then please ensure that you take note of the below in addition to of course having conversations with your realtor and your mortgage broker (in this case me):

  • You have more than 20% down and I don’t mean 21%, I mean 25 – 35% down payment.
  • You have a really good understanding of what the worst-case scenario will be and that worst case scenario could be that you lose your deposit and a lawsuit ensues and you’re ok with that.
  • If you can’t get the financing through A lender, B lender or even Private Lender then perhaps you have the Bank of Mom & Dad who can give you the money to complete on the home.
  • You have at least 1.5 months till closing date so that if something does go wrong with the property then we have time to figure out a solution. It’s important to note that a lot of lenders require that all conditions be met 10 business days in advance of closing!
  • You have access to the home before you write up the offer and you order an appraisal AND an inspection which is completed in advance of you going in subject fee. Appraisals will cost anywhere from $300-$400 and look at any non-conforming issues, structural issues and economic life.  A lender won’t be lending on a property if the remaining economic life is less than 15 years.

As a broker the reason why, we stress so much that a client shouldn’t be going in subject free is most clients wouldn’t have the stomach or the means to deal with the above.  And lots of times it’s not that the lender doesn’t love you it’s cause they don’t love the property.

If you have less than 20% down don’t ever consider going subject free because really the biggest challenge is that you’ll require an insurer for your purchase and although we have lots of lenders there are only 3 insurers.  And if there’s something that they don’t like about the property and they can’t get on board you’ll be left to walk away from the contract and as mentioned above could lose your deposit or even be sued for breach of contract.

In the current environment many properties are going over asking and the insurer can ask for an appraisal and if that appraisal comes in under what the purchase price is, do you have the extra funds to make up that difference?  Most people that have less than 20% down payment have just enough to make the transaction happen not extra.

This is even more important for stratified homes such as condos/townhouses as most lenders will be reviewing the AGM Minutes and if there is a red flag that they feel uncomfortable with they won’t move forward.

Sometimes for a detached home where there are no minutes it’s what the lender sees in the inspection report or appraisal, is there old plumbing and electrical systems?  Does it conform to today’s requirements?  If not, the lender can say no to that property.  If you have the funds to get it up to spec they might say yes, they still might say no.

And please, please ensure that if you are going to still go ahead and make an offer subject free ensure that you are fully pre-approved, and your file has been underwritten.  What does that mean?  It means that your broker (in this case me) has reviewed your paystubs, your NOAs, your down payment, your credit etc.  It means being open and up front about everything in your file so that we can limit the surprises that may or may not come up once the lender reviews your file and the subject property.

If a bank has pre-approved you and it took less than 5 minutes, don’t count on it being an actual pre-approval especially if they’ve never asked you for a single document and all they asked was for your income and multiplied it by 5 or 6.  The piece of paper they gave you is a rate hold and even that isn’t a guarantee!

In short if you can avoid going subject free I would.

As always if you have any questions, I’m here for you and if you know of anyone who might benefit from this information, feel free to share it with them or have them reach out to me.

Stay safe and healthy,

Kimberly

What does the proposed increase to 5.25% stress test really mean?

General Kimberly Coutts 11 Apr

I wanted to reach out this weekend to talk about the proposed mortgage rules tightening up on June 1st given you might have a lot of questions.  As you know the media always likes to grab onto the latest soundbite and they most definitely love negative news more than the positive.

Canada’s top banking watchdog, The Office of the Superintendent of Financial Institutions (OSFI) is taking another shot at overhauling its stress test on residential mortgages by increasing the stress test to 5.25%.

If you don’t want to read the whole article but wondering if it will fix anything just read the below 3 questions:

  • Will the qualifying rate that the government is proposing fix runaway housing prices? No.
  • Will it slow down the multiple offers and condition free craziness on offers? No.
  • Will it create a smokescreen so that politicians and bureaucrats are doing something?  Maybe.

The proposed changes only target those clients putting more than 20% down on a purchase or refinancing a property.  The overall mortgage money that the borrower would have qualified before this proposed change happens will be approximately 5% less.  Thus, restricting borrowing slightly for the most well-qualified group of borrowers and buyers. To put it into perspective when the current stress test was first enacted on January 1st, 2018 it reduced borrowing power by 35%, so in comparison this change is marginal.

If you’re a first-time home buyer who’s purchasing a property under $1million then this change won’t affect you.   Just a reminder, the minimum down payment in Canada depends on the purchase price of the home:

  • If the purchase price is less than $500,000, the minimum down payment is 5%.
  • If the purchase price is between $500,0000 and $999,999, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000.
  • If the purchase price is $1,000,000 or more, the minimum down payment is 20%.

This proposed change will not come into play for credit unions or many of the mortgage finance companies that I use as OSFI, really only hold sway primarily over the banks.  The impact of this proposed change will likely only affect those that have just enough down payment saved for their $1million+ property whose ratios are extremely tight.

Although just a theory, if you’re wondering why they’re only proposing one tweak it’s likely because the pandemic has stripped away the illusions of a housing market driven by foreign investment while the original stress test removed the illusion of over indebted Canadians who were borrowing more than they could afford.  All these distractions – foreign buyers, speculation taxes, vacant home taxes are used up and none of these have done a thing to slow down the appreciation of real estate in Canada.  Only one thing will slow it down…and that’s increased supply.

A word of caution if you’re in a pre-sale contract buying preconstruction where you barely qualify as changes like this can really jam things up 1 or 2 years down the road when it’s time to complete.

As little as this proposed change is and it’s almost certain to happen this adjustment could impact your own personal situation significantly.   But for the most part it’s a whole lotta news about nothing and will likely not slow down the madness.

On another note, I’d like to share with you all that aren’t on my social media that I have chosen to take part in the LOVE-19 campaign.  Real Estate leaders all over Canada have been challenged to purchase 19 gift cards within their local communities from those small businesses that have been affected by COVID to share with friends, family and clients.

My first LOVE-19 gift card is to Kaboodles Toy Store with 3 locations around Vancouver and given that you’re already part of my VIP Club you’ll all be entered in all 19 weekly draws.  The first GC winner will be announced next Saturday!

Enjoy the rest of the sunshine and look forward to connecting soon.

Stay safe and healthy,

Kimberly

Mortgage Transfer Case Study

General Kimberly Coutts 10 Mar

As you know, my personal newsletter isn’t mortgage focused all the time but this was too good not to share.  And if you’re wanting to go straight to the monthly draw and check it out, head to the bottom of the email.  One lucky female whether it’s you or the woman in your life will win one month of Personal FitnessTraining.

Recently I was speaking to a colleague of mine who helped a client transfer their existing mortgage from a major bank into a new mortgage with a lower interest rate AND money in their pocket!  It got me thinking that you likely know a friend or two who currently have a mortgage that is paying 3% or higher in interest rates and perhaps has one or two credit cards or a line of credit that might need to be paid off.  If this sounds familiar then I’d love to speak with them.

The cash back mortgage is right for those homeowners with mortgages up for renewal (if you’re half way through your term we can still chat); have additional high interest debt; they want more cash in their pocket at renewal time and a lower monthly payment.  If you’re planning on staying in your home for at least 5 more years then we should chat.  Wouldn’t you want 1% to 5% in cash back on your current mortgage?

See below for my Mortgage Transfer Case Study

Disclaimer:  Interest rate was 2.84% at the time of transaction however current interest rate is now 3.04% and subject to change.

Given it’s International Women’s Day today the monthly give-away goes to one of my lucky female readers!  If you’d like an opportunity to win this month’s giveaway – which is one month of beMOMSTRONG Monthly Programming from Lisa Lethbridge all you have to do is send me an email and say PICK ME in the subject header.  For the men, you can also enter the contest and win it for that wonderful woman in your life.
Lisa is a certified personal trainer and pre/post natal coach. She works with moms and women in Vancouver to help them gain/ regain their fitness postpartum.  She offers both in-person and online personalised programming.
The program is $75 per month which includes:
  • 3 x workouts per week (they are between 30-40mins long).
  • Coaching, feedback and accountability.
  • Workouts are a combination of strength and HIIT training – they are postpartum safe and also include a number of pelvic floor breath work and exercises.
  • Access to weekly zoom class – Wednesday at 11:30am (first class free for all non-members too!)
  • Facebook Community Group 
  • Content from postpartum experts
Good luck and if you’d think you might be eligible for a cash back mortgage drop me a line for a complimentary consultation.

 

Let’s talk increased interest rates

General Kimberly Coutts 28 Feb

Happy Sunday!

With the rise in interest rates in the news this week I thought it would be great to share a quick blog post to clarify as you’re likely wondering what this means to me as a home-owner or future buyer.  The news outlets as you know love to create hype.
There are 4 key points to take note of with this news.
  1. The actual cost of the interest rate increase.
  2. Does it affect me?
  3. Do I qualify for less?
  4. Which rates are moving?
The actual cost of the interest rate increase.
What’s missing from the news articles are which interest rates have increased….and that is the 5 year FIXED interest rate.  Fixed rates for example moved from 1.69% to 1.94% translates into a payment per $100K of $409 to $421 on a 25yr amortization.  $12/month/$100K.  The average mortgage in Canada is approximately $400K (which in case you’re wondering, requires $80K of pre-tax income) so on a mortgage of that size we are talking about $48/month for the average Canadian household.
Does this affect me?
If your mortgage is already in place then you don’t need to worry.
If you’re looking to renew or refinance it may matter, but that’s just a maybe.
Really the only people that this fixed interest rate increase effects are those of you that are currently shopping for a home.  If the mortgage that you’re looking at is $500K, because let’s face it our average here in the Lower Mainland is higher than that of the rest of Canada we are talking about $60/month more.  In order to qualify for that $500K you will have needed to have $100K in gross income or $6,000/month after tax.  This rate hike translates to 1% of your take home pay.  It’s something but it’s not going to break your bank – consider it one less Friday night Uber Eats delivery.
Do I qualify for less?
As you know, in Canada there is what is called the Stress Test and that Stress Test is either the posted rate of 4.79% or 2% above contract.  This stress test is put in place for this exact reason, to ensure that you can still afford the mortgage you secure should the rate ever increase to 4.79% or 2% above the contract.  So the short answer is “no” you’ll still qualify for the same mortgage you did before the rates started increasing.
Which rates are moving?
As I mentioned above, it’s the 5-year FIXED rates that are moving.  These fixed rates follow the bond market, and the bond market was knocked down flat when the pandemic started in March of 2020.  The bond market is getting back on its feet but who knows how long it will stay standing.  Variable on the other hand is tied to the Bank of Canada who has said that they will be leaving rates alone into 2022 or even 2023.  The next Bank of Canada Prime Rate announcement is on March 10th.  Variable is a great place to be as per usual.
If you’ve contemplated ever getting into the market and are wondering what you might qualify for, let’s have a 30-minute Discovery call.  You might just be surprised that you can enter the real estate market sooner rather than later.

Are you ready for your first home?

General Kimberly Coutts 26 Feb

To buy or not to buy.  There are so many factors that go into purchasing a home but if you’re currently a renter who is contemplating getting into the market here are some factors to think about on whether to make that move into home-ownership.  Remember it doesn’t have to be your forever home just an opportunity to be part of the Lower Mainland real estate market.  And let’s face it, if I knew what I know now….I probably would have done everything I could have 20 years ago to save & scrimp so I could have set myself up with my first condo back then and subsequently used that equity to keep moving up.  Hindsight is 20/20.   Still grateful though for purchasing our condo back in 2010 because since that time our investment has doubled and we’re fortunate to live in the heart of Vancouver where we can walk to school, work and the shops.

Here’s a few easy questions to ask yourself:

  1. Have you saved enough for at least a 5%-6.5% down payment & closing costs towards your first home? This can be in cash savings, RRSPs, TFSAs, Employee Stock options or even a gifted deposit from the Bank of Mom & Dad.   Download my Mortgage Toolbox app to figure out what those costs might be.
  2. Do you have a stable, regular income source whether you’re salaried or self-employed?  Lenders will review your income average over the last two years and whether you are in a full-time permanent role or earnings as a self-employed have been regular.
  3. Do you have a credit history?  It may seem counterintuitive but make sure to have at least one credit card and use it regularly and pay it off every month. Having another bill such as a phone or internet bill also helps establish credit.
  4. Do you have a healthy credit score?  Check your credit score by getting in touch with Equifax or Transunion by phone or mail every once in a while.  It’s a good idea to check it to ensure it’s up-to-date and accurate.  You can also use a service like Credit Karma.
  5. Have you got a handle on your consumer debt? This goes hand in hand with the above.  Do you have lines of credit, balances on your credit card or other sources of debt such as student loans.
  6. Do you know how much you can afford? A 30-minute Discovery call with The Mortgage Maven aka me can help answer this one.
  7. Are you familiar with the real estate market in your preferred neighbourhood? Once you’ve figured out what you can afford, you can then work with a Real Estate Professional to help find your first home to get your foot into the real estate market.  I’m happy to refer you to one of my trusted partners.

Vancouver will continue to be a top best city to live in the world so if you’ve answered yes to the first five questions then let’s book a time together to see what you can afford.  I think you’ll be surprised.

Ultimate Checklist for Selling Your Home

General Kimberly Coutts 27 Jan

Who knew that the first few weeks of January would have the real estate industry in Vancouver hopping.  The common discussion among those in the industry is the lack of inventory for the number of buyers looking to purchase a detached home.  So, if you’ve ever contemplated downsizing and moving into a condo or townhouse, now might be the perfect time to make the move and sell.  We need more houses on the market for those families looking for more space and a backyard as the pandemic continues.

If you’re wondering where to start, check out the below checklist for selling your home.

Ultimate Checklist for Selling Your Home.

Selling your home can be an extremely stressful experience. Between thinking about moving logistics and financials, it’s easy to miss the small details in between the process.

With that in mind, we’ve built this checklist for selling your home to help you keep track of the things that will get a potential buyer interested. Turns out, it’s not as simple as just fluffing pillows or doing a light dusting. “Put your buyer’s hat on and walk through your home like it is the first time,” Marilou Young, an Accredited Staging Professional and an Associate Broker with Virtual Properties Realty in the metropolitan Atlanta area, told Forbes.

Below is the ultimate checklist for selling your home.

GET FAMILIAR WITH THE PAPERWORK

For home buyers interested in the history of the house, make sure you’ve got all the information handy; this can include paperwork on renovations, property tax receipts, deeds and transferable warranties.

GETTING THE PRICE RIGHT

According to HGTV, it can be helpful to do some market research on what homes in your area are selling for- then shave 15 to 20 percent off that. This way, you attract multiple buyers who can end up outbidding each other and bringing up the price. While that can seem like a risky move, it could work in the competitive markets of big Canadian cities.

DEPERSONALIZE AND DECLUTTER

You want potential buyers to see themselves in the space, which is hard to do if you have family photos on the wall or personal items around. This would be a good time to start putting items in storage or try to keep your personal items out of sight. At the same time, you’re also ensuring that you’re keeping your house tidy—a must if you want to make your home sellable. Check around the house for dirt, stains or small cracks you might be able to fix. And if you have pets, make sure their litter boxes and play areas are also clean and odour-free.

FIND A QUALIFIED REALTOR

Realtors can be helpful to take some of the processes off your plate, including marketing your home and arranging open houses. If you do go this route, none of this list will matter if you decide to work with a realtor that doesn’t know the market inside out. You can search their name on the Real Estate Institute of Canada to ensure that they’re qualified, and meet with them to see if you mesh and understand how they price your unit. At Proptalk, we also have this handy guide for more details. (Feel free to reach out to me directly as well as I work with an awesome team of realtors and happy to match you up with the right personality that fits your needs.)

Published by FCT.

 

Intentions over Goals

General Kimberly Coutts 20 Jan

I hope this finds you well and you’re having a great start to 2021 despite the continued restrictions and lockdowns.  I count my blessings every day that we live on the West Coast because although we’ve been pummeled with torrential rain the last few weeks…I do see the tulips & daffodils starting to bud.  Signs of spring have already started which I’m grateful for and today is sunny so that’s a bonus!  

January is usually a month of new resolutions and goals however strangely enough this year rather than being super specific and having 3-4 goals in each facet of my life I’ve decided to simplify things and have 5 intentions instead.  I still have big lofty goals however fewer so I can put more focus and energy into them.

  • Spend more quality time with the family without a phone in my face.
  • Get outside for a walk for at least 30 minutes a day.  Once a week with a friend or the family.
  • Prepare 1-2 vegetarian meals per week. (If you have any recipes you’d love to share please do.)
  • Help 10 individuals/family with their home financing needs per month. (This one I’ll need your help to make those recommendations to friends/family & colleagues.)
  • Read one book every 2 weeks. (I’ve already completed one book this month already!)

This month’s draw to a local business will be for a $40 Gift Card to Book Warehouse.  In order to qualify for the draw, I’d love to hear the book(s) that are on your own must read list.  

Below are my top 10 favorite books that I’ve read in no particular order.

  1. A Fine Balance by Rohinton Mistery
  2. The Book of Negroes by Lawrence Hill
  3. The Kite Runner by Khaled Hosseini
  4. Angels and Demons & The Da Vinci Code by Dan Brown
  5. Becoming by Michelle Obama
  6. Lean In: Women, Work, and the Will to Lead by Sheryl Sandberg
  7. Onward: How Starbucks Fought for Its Life without Losing Its Soul by Howard Schultz
  8. Limitless: Core Techniques to Improve Performance, Productivity, and Focus by Jim Kwik
  9. The Big Leap: Conquer Your Hidden Fear and Take Life to the Next Level by Gay Hendricks
  10. Think and Grow Rich by Napoleon Hill

Below are my top 10 books I’d like to read in 2021.  If you see a book that is on your list I’d love to know so that perhaps we can exchange ideas after reading it.  Virtual book club?!  

  1. A Promised Land by Barack Obama (Thanks to hubby for my Christmas Gift)
  2. The Whole-Brain Child: 12 Revolutionary Strategies to Nurture Your Child’s Developing Mind, Survive Everyday Parenting Struggles, and Help Your Family Thrive by Daniel J. Siegel
  3. Sapiens: A Brief History of Humankind by Yuval Noah Harari
  4. Any Known Blood by Lawrence Hill
  5. Cutting for Stone by Abraham Verghese
  6. American Dirt by Jeanine Cummins
  7. How to Raise a Wild Child by Scott D. Sampson (A Vancouver Paleontologist who grew up exploring the UBC Endowment Lands and is best known for being the Presenter on Dinosaur Train for those of you with children.)
  8. Peak:  Secrets from the New Science of Expertise by Anders Ericsson and Robert Pool
  9. The Truths We Hold: An American Journey by Kamala Harris
  10. Man’s Search for Meaning by Victor E. Frankl

Looking forward to hearing about your favorite book and if you’re on Goodreads let me know so I can check out your library. There’s nothing like a steaming cup of hot tea, a cozy blanket and a good book while we wait for the longer days to arrive.

Have a great week,

Kimberly

Happy Clients of the Month:  Kim was excellent to work with. It was our first home and she was incredibly patient and informative. She helped us find a great mortgage rate with a lender that suited our preferences. Something I love about Kim is that she is always accessible and picks up on the first ring. She helps you when you need it. We needed a very quick turnaround and she jumped in head first and turned things around extremely quickly. We appreciated her guidance and hard work and would recommend her to anyone!  ~Jordan & Anna

Giving Tuesday Ideas

General Kimberly Coutts 15 Dec

2020 has been a strange year for many of us. It has affected all of us in unique ways. The impact of COVID-19 has been devastating for some industries while others are having a banner year. I feel fortunate and blessed that my family, friends and colleagues are healthy, safe and for the most part doing ok. It’s my hope that you are doing ok or better than ok – physically, financially, spiritually and mentally. This month, I’ll take a break from my Monthly Giveaway and instead be making a donation towards The  Marc Lalonde Memorial Foundation  which was set up this week on behalf of a fellow colleague in the mortgage industry who lost his life. Although I didn’t know him personally, he was a mentor and a leader in our industry who impacted many, many lives.

It’s with this in mind, on Giving Tuesday I wanted to highlight the ways we can give back to support our community and celebrate generosity. It is a sentiment that is even more important this year. Of course there are so many charitable organizations who could use our monetary donations, so by all means pick one that is close to your heart however these are a few ideas which don’t necessarily involve straight monetary donations.

1. Support Local – If you’re going to purchase gifts or gift cards, support an independent restaurant Cold Tea, La Bodega or The Parlour  are a few favorites, a start-up bakery (Best Kind Bakeshop), a local artist (Nima Stoneware, Englebert Romero or Draw Me Mollie), a local attraction (Capilano Suspension Bridge or a local shop (Presidio). Think Local!

2. Holiday Meal Help – If you’re looking to take a break from cooking over the holidays, but still want something festive, check out local caterers The Pacific Yacht or Emelle’s Catering who are providing turkey dinners without all the work. Want to add some fun libations – check out The Bar Cart who can deliver creative cocktails to your door.

3. Stocking Stuffers for Seniors – The holidays can be an extremely lonely time for seniors who live alone, why not brighten someone’s day by visiting a London Drugs location near you and picking up a gift tag for a senior who could use some cheer. Details can be found here.

4. Lower Mainland Christmas Bureau – Given that many of their drives have been cancelled this year and the number of people who are unemployed, I imagine there will be a large number of families who will be reaching out to them. They typically have a high need for gifts for tweens and teenagers. As an individual who was a recipient of a Christmas Hamper as a young child when my own dad was laid off I remember the day we received the hamper filled with food and presents. I remember sitting on our stairs unpacking the box of goodies and presents and how happy it made my sisters and I.

5. Donate Blood – This one doesn’t cost you a dime and the need for blood is constant so book an appointment before the holidays!

6. Bring a smile to a neighbour – Deliver home-made cookies and a Christmas Card to a senior or Individual that you know lives alone in your building/neighbourhood. Bonus points for those of you that have children and can have the kids draw a picture. You can bring so much joy and a smile to someone with this small gesture, especially if they have been in isolation for months and months.

7. YMCA Holiday Giving Programs – Sponsor a family through Presents of Peace or make a donation to Simplify the Season.

8. Christmas Backpack Program with Covenant House – Participate in their Christmas Backpack program so that homeless youth can receive a backpack full of gifts for the holidays. To make it easy, Covenant House has a Wishlist on Amazon where you can purchase the much needed items which will then be shipped directly to the organization for distribution.

9. Reduce, Recycle & Reuse – If you’re refreshing your home and need to dispose of your furniture, donate it to Homestart who help people re-establish a home.

10. Connect with a friend/colleague/family member. As we move through the 2nd phase of COVID and we are in various stages of lockdown across the country, a phone call, a text message or a Facetime to say Hi could be the thing that someone needs most at that moment. I always have a hesitation about picking up the phone as I don’t want to disrupt someone’s day however when a friend calls me out of the blue it makes me feel awesome to connect. As most of us continue to work from home sometimes you need a friendly voice to break up the monotony of Groundhog Day that we have been living in for the last 9 months.

On that note, although it’s early and only December 1st let me be the first to wish you the Happiest of Holidays during this very interesting year. From my family to yours we wish you a healthy, happy and safe Holiday Season and that 2021 will be a better year than the last. If ever you want to connect via a phone call, text or Facetime for a chat, don’t hesitate to reach out. Rest assured in the weeks/months to come I’ll be connecting with you to do just that – check in, say hi and offer help in any way I can.

I would love to hear from you about how you have been able to give back to your community.

Kindest regards,
Kimberly

 

What is a HELOC?

General Kimberly Coutts 15 Dec

In its simplest form, a HELOC works somewhat like a credit card. You can borrow money up to a certain credit limit set by your lender and then pay back the borrowed amounts along with interest. This option can offer more flexibility — you can even withdraw and make payments on a daily or weekly basis, if necessary.

What determines a HELOC’s credit limit?
A HELOC’s credit limit depends on a number of factors, including your credit and unpaid debts, but it’s determined largely by the market value of your home and the amount you owe on your mortgage. For instance, if you own a home valued at $700,000 and still owe $480,000 on your first mortgage, then your home equity stands at $220,000. Lenders typically limit the amount you can borrow to no more than 80% of the appraised value of your home minus what you owe on your mortgage.

In this case, the maximum amount you’d be able to borrow is $80,000. Here’s how that’s calculated, assuming there are no other liens on your home.
Home’s market value:                          $700,000
80% of home’s value:                           $560,000
Minus mortgage balance:                   $560,000 – $480,000
Potential line of credit:                       $80,000

Benefits of a HELOC?
A HELOC is an open mortgage and can be paid back at any time with no prepayment penalty. There is no cost to use a HELOC unless you have a balance on it. The minimum payments each month are interest only. Ie. $25,000 HELOC balance, Prime +.50% interest rate currently is 2.95%. $25,000 X .0295/ 12 months = $61.45/mth.

What’s the length of a HELOC term?
The length is tied into your mortgage term. If you renew with your lender then the HELOC can be renewed as well. If you change lenders at any time, you can look to have another HELOC attached to your property.

What does it cost to set up a HELOC?
Setting up your HELOC could cost you hundreds of dollars as typically an appraisal and a legal component come into play. Some mortgages are already set up for a HELOC and there might not be a cost. It is on a case by case basis depending on your lender.

How to use a HELOC?
There are numerous ways to take advantage of a HELOC. – Transferring higher interest credit balances. HELOCs will have a very low interest rate compared to unsecured credit (credit cards, LOC, loans, etc). You can still make the same monthly payment you were making but more will be applied to the principle of the debt. This means the debt is paid off quicker. Other uses are:

  • Emergency fund for loss of job, health reasons, etc.
  • Repairs or maintenance on your home.
  • Renovations on your home.
  • Buy investments, property, etc.

What’s next?
Before you decide to take out a HELOC, consider what you’ll need it for. If you’re planning to use a HELOC for home improvements, investments, debt consolidation, etc, it might make more sense to do an actual refinance considering the low rates in the market today.

If you’d like me to outline all of your options, please let me know and drop me an email at kimberly@mawest.ca

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