Here we go with the 4th round of Mortgage Rule changes…
First, lets recap the previous rule changes…
July of 2008
- we said goodbye to 100% financing as the minimum down payment to purchase became 5%.
- the maximum amortization was reduced to 35 years (down from 40 years)
- the minimum credit score was increased to 620 for insured mortgages (CMHC, Genworth & AIG-now Canada Guaranty)
- the TDS ratio limit was set to 45% (no exceptions)
In April of 2010
-we saw the refinance limit dropped to 90% loan-to-value
- rental properties could no longer be purchased with less than 20% as a down payment, they also became tougher to qualify from an underwriting standpoint (Max LTV 80% on rentals)
- the biggest change was adding the “qualification rate”, for high ratio mortgages (less than 20% down payment) if you wanted a variable or a 1-4 year term you would now have to qualify at the “benchmark” rate
In March of 2011
- we saw the maximum amortization again reduced, this time to 30 years on high ratio mortgages
- the limit on insured refinances was decreased to 85% from 90% LTV
-government insurance on HELOC’s was no longer offered
On July 9th 2012
This morning, the Federal Finance Minister announced further changes to Canada’s mortgage insurance rules. Four measures were announced:
1. Amortizations reduced to 25 years
2. Refinancing limited to 80%
3. Properties purchased at over $1 million no longer eligible for mortgage insurance
4. GDS and TDS set at 39% and 44%
So what do the new rules mean to someone looking to purchase…?
Here’s an example:
According to stat’s Canada the average income for a family with children, who have 2 earners (Both working) is $89,600.
The average price for a bungalow in BC is $629,300 so let’s say you have 10% down ($62,930.) Your mortgage would be $578,830.14 with a monthly payment of $2,462.37.
Now, when these new rules take effect on July 9th 2012… you would no longer be able to qualify for this purchase price and mortgage!
The purchase price that you will qualify for is $593,500 so you would still need a 10% down payment as the maximum mortgage that you would qualify for is $544,833 that carries a monthly payment of $2,603.62.
*These numbers are calculated assuming you have absolutely no other debts, or monthly payments other than heat and taxes… These new rules will severely limit your purchasing power.
What do the rules mean to someone looking to refinance…?
Here’s an example:
Let’s say you purchased in 2008 for $629,300 with a 10% down payment and went with a 35 year amortization at 5.79% (at the time this was a decent rate). Your mortgage would have been $579,962.88 and the monthly mortgage payment would be $3,199.09. You would be 4 years into your term and the balance would likely be $556,619.87.
While these numbers will likely put you above the acceptable lending ratios you will still be able to renew with your current lender as long as you do not make changes or refinance, in a sense you are grandfathered in.
My suggestion is to speak with a Mortgage Broker today and review your options now so that you have the best strategy and mortgage for your own situation! Especially if you have a mortgage renewal coming due in the next few years.
What the federal Government is attempting to do is reduce careless spending so that people are not refinancing all the equity out of their homes thereby curbing excessive household debt amounts. These “NEW RULES” are intended to lower risk for the taxpayers, I think these changes will go a long way in helping Canadians understand the importance of paying down their mortgages.
Bottom line, If you do not have a strategy for paying down your mortgage I will gladly provide you with one that will work for you!
|Article Tags :: amortization | CMHC | down payment | GDS | Genworth | mortgage | mortgage rule changes | rate | refinance | TDS|
Is it worth helping people that come to you with a sob story or are you just asking to get beat up?
It is an interesting question because I find myself falling for the routine all the time and blindly helping. Here is an interesting case study. I won’t mention the business name just yet (I might in the future to keep the story updated).
In a previous life, I designed and built web systems. In early 2008, I fell into this “please help me” trap with a website. Someone I know came to me saying her friend wanted to get this online business going but she didn’t have much money so she wanted to know if I could help and give a deal because I had experience with websites.
Here comes the sucker part . . . “sure, I will help, I like to help people”. First question to the person needing the site, “do you or your business partner have experience on the internet with uploading pictures and text?”. Their answer, “Yes, my partner knows all about that stuff and we will have no problem taking care of it if you just build us a website”. With that information, a deal was struck for significantly less than half price with only a small deposit that they could afford to get the project going because they would take care of everything themselves once it was built and there was not a huge risk for me.
Thinking that was my first BIG mistake . . . I didn’t give her friend an internet IQ test but who would think they would lie about that? It turns out their experience with the internet was that they had heard the word internet and could probably spell it in a pinch and they were pretty certain it was accessible from a computer and that magic websites made people millionaires and they were next.
A simple internet IQ test would have saved me from months of aggravation and money out of pocket for my trouble. Oh the beauty of hindsight, but maybe others can learn from this.
Long story short, the website was built to their approval, logo was designed as well because they had none, at this point they had their domain name purchased on their own upon my suggestion and I helped them point it to the hosting server, a quick lesson on uploading and away you go. . . . Then the real nightmares began. “We don’t know how to do internet” “my partner has no clue, what do I do now, I can’t figure out how to upload pictures” “I thought you could take care of all this for us”. Of course, no agreements like this were ever discussed and they did say they had a clue. Was this my fault? Does a person have to prove they know how to drive fast if they buy a sports car? If you buy a computer, do you have to prove you can use it? When you get a website designed, should you get business success guarantees for the internet marketing success by default?
It turns out they felt that the internet should work like this: For a few hundred dollars (still only the deposit which was half of the agreed to price) they employed a person to take care of their entire website forever and there was no hosting or any other expenses and this would make them rich. In actuality all that was ever agreed to was a user content management website with an email account and yearly hosting fees and an interface that would allow them to upload pictures and edit text on and receive emails from. They asked if a shopping cart was available because they had heard of that and asked if it could be turned on in the hosting package and I did so even though my advice was to avoid that idea. Can’t hurt anything by having a shopping cart that is not being maintained, just looks amatuer. All documentation about 3rd party shopping carts was included in the hosting packages and they were instructed to study it if they wanted to have a working shopping cart because that was completely user managed as well where they had to enter their cradit card payment details, tax level, shipping details and rates etc. which a web person can’t have knowledge of. I advised them that a shopping cart was not going to work well for their business based on their experience level (which at that point I found was none at all), highlighting their few products on their web page with photo’s and descriptions would gain more interest than a shopping cart but it was all up to them.
After not getting paid even the few hundred above what the hosting was costing me out of pocket , I suggested to their friend that referred them to teach them and help them out because they lived close to each other and they mutually agreed to the arrangement and payments between each other. Things seemed to go well after that because they kept getting more done and seemed to be learning how to do things and they did pay the friend for some of the lessons. It turns out they never paid for a good portion of that work either, even though they were happy with her efforts and they were friends. An online business without interaction with the clients and without the desire to learn and become fluent in online marketing with, seemed an unlikely recipe for success and inevitably it must have failed because they let their Domain name expire and now someone else owns it.
Over the years, I had tried many times to communicate by email and never received any response, I reminded them of their hosting fees that I paid and never heard back from them and was never instructed to cancel the hosting. After they let their domain name expire, I assumed I was out of pocket for hundreds of dollars and a lot of time and aggravation but I still felt OK about it because giving people a helping hand is something I do out of habit.
To top off the story, Here I am never having any of the hosting I paid for paid back to me, their friend is out hundreds of dollars for her time spent teaching and now I hear that they are thinking of sueing for their failed internet business venture. Wow, sueing someone that bent over backwards to help is a bit of a pathetic and lowlife gesture. Funny how they now have a store selling the same items in real life, just like I suggested and they market on Facebook. I wonder if Facebook needs to worry?
So now the question is, do I sue for the money they still owe or do I just let it go? I was happy just letting it go as a lesson learned by me but I guess if they go ahead and start a law suit, I will have to sue right back and go after their inventory to cover their outstanding debt.
This is a sad example but may be an indication of why people are less willing to help each other now days. It turns out now that there are rumours that someone may “pay me a visit to beat me up”. Well, I guess we will see what happens, I have my lawyers on standby. Their next move will write the remainder of this story and I will keep this article updated as I get information. Assuming of course that the nasty man doesn’t come to beat me up . . . maybe I should avoid the playground at reccess.
|Article Tags :: get beat up | helping people in need | Low Life|
Integrity: to have or not to have, that is the question
I launched this Unique Business Network in 1998 that encourages small business to get together and build relationships. People like to do business with and refer business to people they know and like. Our Network has developed into this great Community for business people to grow and develop while they help others grow and develop. We have been going strong with great Chapters, fun after business events, a lot of Social Media activities including interactive seminars. We have Networking Cruises, Golf Tournaments, and even Fitness Challenges. All our events are geared towards building stronger relationships within our Network while also making a huge difference in our local communities where we support families in need as well as other local Charities. We even went so far as to launch our own Non Profit Society to help families in need.
Since I launched my Network in 1998, I have NEVER attended any other Business Network to recruit people to enhance our membership base. I simply choose to run my organization from a base of Integrity and Good Business Values, which has attracted others with those same values to join us. I DO NOT encourage our Members to go out and recruit from other Networks because it is not ethical behavior and I refuse to compromise Integrity. Over the last few years I have noticed a number of “NEW” networks sprouting up all around the area and they simply start by recruiting from every other established network. It is sad to see this trend towards bad business practice.
There is nothing at all wrong with competition, but bad business practices are simply bad business. To help understand what Integrity in Business means, start by asking yourself, if you were a Mortgage Broker, would you be happy if another Mortgage Broker dropped in to your office with brochures and chatted up your clients or even invited them over to their office to chat about their mortgage? If you were a Personal Trainer would you walk through someone elses workout facility or even join it just to gather clients? You could imagine the problems if someone walked into a Restaurant with samples from another Restaurant down the street. This is simply bad business, this is lack of integrity and this is how new Business Networks are being formed and these are the networks that are recruiting you.
Fortunately, most are pretty much Fly By Night networks that won’t last long but it sometimes even surprise me to see what pops up and how blatant they are in their recruiting practices. We actually now have a “Cash Kick Back Network” that states they are not competing networks but that they can enhance our member’s experience if we let them offer their service . . . exactly how enhancing could it be to convince our members to pass referrals based on best cash kick back rather than best fit? There are other Networks that try to recruit our members by saying that they are not networks but they teach networking . . . I have never heard as many complaints about any network as I have heard about that one, it is mind boggling. There is even a network sprouting up locally by a former Member that advertises a “Unique Network, This meeting is for small business to get together and build relationships. People like to do business with and refer business to people they know and like.” I have used those exact words for over a dozen years to describe our network and have done so at many meetings he attended, pretty unique network there.
To say the least, it is entertaining. If a few members leave because they think the grass is greener on the dark side, that is certainly their choice and I truly wish them success. My advice to them would have to be that business people that value their reputation should take a moment to think of their Integrity before jumping into something that sounds too good to be true. If the “NEW” network recruits without Integrity, they likely don’t encourage Integrity in their Business Practice. Out of curiosity, I looked up the opposite of Integrity and found: Shifty, Untrustworthy and Corrupt . . . just sayin ;0)
I have continuously told people that “ALL networking is good Networking, it all just depends on personal preference”. I may need to rethink that opinion to keep up with the times.
|Article Tags :: Bad Business | brochures | business events | business network | business practice | business practices | business values | charities | cruises | families in need | golf tournaments | good business | integrity | interactive seminars | membership base | mortgage broker | new networks | personal trainer | relationships | workout facility|
Why I prefer Facebook and Twitter over Linked-In
Being self employed for over 35 years and also founding a Professional Business Network, I have learned a thing or two about Networking and Word of Mouth Marketing. Bigger is not always better and more is many times worth much less. Just a quick thought, might Word of Mouth marketing be considered the oldest marketing method known to man? Without Word of Mouth, the wheel would have remained a well kept secret and the oldest profession in the world would never have found any clients . . . but back to the subject in the title of this post, Why I prefer Facebook and Twitter over Linked-In.
In the age of the Internet, things have not changed much in the networking arena even though they may appear to have changed. Some people mistakenly think that the more people they appear to be connected to, the more credible they will appear. This could be due in part to so many people or websites teaching “how to network” when they should be calling the lessons “how to game networks”. The most effective long term, sustainable Networking advice I could give will not cost you a dime or time for a seminar and you don’t have to download my eBook or give me your email address so I can spam you.
Are you ready for it? Be Honest, Be Credible, Be Dedicated, Be helpful, Give without expectation, ONLY pass qualified referrals and DO NOT expect others to shower you with referrals if you are not willing to shower them with referrals first.
I find myself drawn to those online tools that I think are most conducive to relationship based networking where individuals help the people they know, like and trust. Outside of my Face to Face Business Network, the online tools I am drawn to can be gamed just as easily with larege numbers of connections as those I am not drawn to, but those excessive connections are meaningless if they are not active and visible so large numbers really do not mean anything at all. I actually never look at how many friends or followers people have before I pay attention to the interesting things they have to say.
My two favorite online Electronic Networking Tools:
- Twitter to help with introductions to like minded individuals that maintain an active prescence on their account with interesting things to say and who’s opinions I find credible. I actually block those that spam and advertise and I laugh out loud at those that schedule their tweets and think others can’t tell. I also use Twitter to stay up to date with those people that I regularly connect with face to face, if a trusted connection on one of the lists I created posts a link or a request, I am there. I never click on random links of people I do not know and trust and DO NOT EVER read privete Direct Messages (DM’s) because they are 99% spam and advertising.
- I prefer Facebook for nurturing relationships with people I already know well or those I want to get to know because they catch my attention with things they talk about, teach or comment on. Of course Facebook is also not your typical place to advertise on or spam efficiently and that makes it even more inviting in my opinion, there is less crap to wade through to get to useful information. Most of us have conditioned ourselves to ignore the advertising (I can’t remember the last time I actually noticed an ad on Facebook) and the spam like posts and annoying games are easy to block and ignore. In extreme cases with people that just don’t know any better, I simply unsubscribe to the things they have to say and check back every once in a while to see if they have changed their ways. What they say has no affect on my timeline if I unsubscribe.
The ultimate goal in any networking is of course to meet face to face and actually get to know the people you may deal with and confidently refer to your network of valuable connections. I feel that a person cannot know thousands upon thousands of people well enough to confidently bring them together with the true trusted connections that have been nurtured over years. Just becasue I was handed someones card or was added as a connection does not mean I would refer them. Of course that would then ask the question, who is being referred to these thousands of people and how succesful are the results? Is there a layer of casual aquaintences that get refered to people we do not know well enough for our most valuable connections? I have received so many communications like “so and so suggested I talk to you, tell me a little more about what you do”. Really? If so and so referred me, why do you not know what I do?
This brings me to my many years on Linked-In which I always considered to be more of a directory where I could stream a copy of my Twitter comments to look like I am active on my account. I know a significant number of people do the same thing so last night I decided to wade through and clean up the random mess. For my prefered relationship based method of networking, this listing method just does not cut it. Seriously, why do I want to be in someones network when I DO NOT know the credebility of the people adding me and why would I want to add them? I do not have a fringe list of casual aquaintences that I can toss at unknown people as recommendations and I would not want a list like that simply because a bad referral reflects more poorly on the person passing the bad referral than it does on the person doing the bad job.
A significant number of people consider it a good thing to have hundreds or thousands of people list them because it is an online directory where a bit of luck might generate a lead. I actually deleted many users that had thousands of connections with massive networks of people they recommend to everyone regardless of actually knowing the credebility of either party. Because of my connection to the Networking Industry, I look at Networking with a different point of view, if I have never met the people in my network and have never had the opportunity to get to know them and decide if I want to refer them, I will NEVER recommend them to my very credible network and I do not want the association by random connection.
This of course is simply the opinion of someone that Networks Face to Face on a daily basis, and this post explains why I personally prefer Facebook and Twitter over Linked-In when using online methods.
|Article Tags :: 35 years | ebook | expectation | followers | large numbers | networking advice | networking arena | oldest profession | online tools | professional business network | referrals | relationship | wheel | word of mouth | word of mouth marketing|
What’s Your Relationship with BC Gaming?
If you are like me, you visit a casino once or twice a year or you take a short holiday in Reno or Las Vegas.
Have you thought about where your lost gaming dollars go to? Does your chapter’s charity receive BC gaming funds?
In 1999 the BC government signed a Memorandum of Agreement with BC charities promising them 33% of the net profits in return for supporting gaming in BC.
Since 2002 that percentage has been going down to the point that in 2008 funds were cut so drastically that many non-profits or charities disappeared or were severely hampered in carrying out their mission.
There was such a hue and cry that the BC government restored some of the funding. Environmental and animal welfare groups were denied funding altogether.
In 2011, Premier Clark restored some funding but not to the level of 2008 and she hired Skip Triplett, former head of Kwantlen Polytechnic to do a gaming review.
The review came out last week, January 11th, the Premier announced that environmental and animal welfare organizations were reinstated and that funding would stay the same for 2012 as 2011.
I recommend that you get a copy of Skip’s report. Skip does not address the issue of whether or not the 1999 Memorandum of Agreement is legal and binding or not. That is because Skip lacked the legal expertise to do so.
The $135 million is only 12.27% of last year’s net gaming proceeds, not 33%. If you accept the argument that the Memorandum of Agreement does not cover lotteries and only casinos and bingo hall, it is only 16% of last year’s net proceeds.
Where did some of the gaming funds that should go to BC’s non-profits go over the last few years? Some of it went to the for-profit private casinos to improve their facilities. This was at a time when non-profits had the $100,000.00 capital grant eliminated.
If you are involved with a non-profit you know how careful and wisely they spend their money. You also know how charities especially are held to account for how they spend their money. One report I read stated that for every dollor spent by a non-profit or charity they give back the value of $4.00!
It makes you think doesn’t it?
|Article Tags :: animal welfare groups | animal welfare organizations | bc government | bingo | casinos | charities | charity | gaming dollars | gaming funds | hue and cry | kwantlen | las vegas | legal expertise | lotteries | memorandum of agreement | Money | net profits | non-profits | polytechnic | reno|
Negative Comments about the Economy
WE keep hearing dire comments about the economy and if we listen to them, it will affect how we do business.
People in the non-profit world are reminded that yes, there may be 6-8% unemployment but there are also 92-94% of the people employed. They are our target audience and they need to be the target audience of for profit companies as well.
There are a number of companies that are thriving in our jittery economy. How are they doing it?
There are a number of ways. They look at people’s needs. They look at how they are doing business and either make changes or focus on the aspects of doing business that are succeeding.
One company in the USA sells blenders–I don’t remember the name. The owner prides himself on making a blender that will “blend anything!”
One day one of his employees caught him trying to blend a “2×4″! The employee asked him what he was doing. The reply was, “we tell people we can blend anything. I’m trying to prove it.” The employee did a video of his boss blending a 2×4. He put it on Youtube and it went viral. The upshot. The owner has been on several talk shows and his business is booming. I watched one demonstration where it looked like he was blending a Blackberry!
What can you blend?
|Article Tags :: 2x4 | blackberry | blender | blenders | boss | demonstration | doing business | economy | profit companies | profit world | reply | target audience | unemployment | upshot|