The Canadian Federation of Independent Business has just released a report outlining the top 100 Canadian Cities for Entrepreneurial growth. The report utilizes many different factors to achieve ranking, such as presence, growth, health, and policy environment for small businesses.
Congratulations to Woodstock for cracking the top 100 - #97! Only 4 places behind Toronto, the economic engine of the country!
For more details, check the full report, here.
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
Thursday, October 21, 2010
Friday, August 6, 2010
Globe: Mortgage breakage costs: let’s stop the nonsense
I found this article interesting and very relevant. Check it out!
Original Article
Have you ever wondered why the banks list posted mortgage rates that are ridiculously high?
One reason is that it could result in you paying $10,000 or more in extra penalties should you ever break your mortgage with them.
Here is the scenario:
Many people have, at one time or another, looked at breaking their mortgage in order to get a better rate.
With interest rates dropping to historic lows, it is more and more common for homeowners to think about the benefits of breaking their mortgage, paying a penalty, and locking in to a new lower rate mortgage.
Traditionally, the mortgage penalty on fixed rates is either 3 months interest OR something called the Interest Rate Differential (IRD) – whichever is higher. On a closed, variable rate mortgage, it is usually simply 3 months interest.
While the 3 months interest is pretty easy to understand, the IRD is a little mysterious. For help on this, I went to TD Bank's mortgage website. RBC has a similar section.
They both show the following formula:
Step 1: (A) The current interest rate under your Mortgage expressed as a decimal (for example, 6.75% = .0675)
Step 2: (B) The current interest rate that we can now charge for a mortgage term offered by us with the term closest to your remaining term. The interest rate will be our posted interest rate for the term minus the most recent discount you received
Step 3: (C) A - B = C, which is the difference between your current interest rate and the interest rate in B above (write C as a decimal)
Step 4: (D) Amount you want to prepay
Step 5: (E) Number of months for the remaining term of your Mortgage
Step 6: (F) (C x D x E) ÷ 12 = F, F is your estimated Interest Rate Differential Amount
Let’s say you have a mortgage at 4.75%, and it comes due in 2 years, and it has a current principal owing of $400,000. TD’s current 2 year posted rate is 4.1%. Let’s say that you were offered a 0.5% discount off the 2 year rate. The math would work as follows:
.0475 (A) – .0385 (B) = .009 (C)
.009 (C) * $400,000 (D) * 24 (E) / 12 = $7,200 (F)
While $7,200 seems like a lot of money, if you can lock in a 5 year mortgage today at 4%, you are benefiting from 2 years of a 4% interest rate instead of 4.75%, but you are also guaranteeing three additional years at 4%, when it is quite likely that in two years, a 5 year fixed mortgage rate will be a lot higher.
Here comes the evil part.
At many big banks, they don’t use your existing 4.75% rate. What they do is take the posted rate at the time you took out your mortgage. This is a rate that has no relevance to you, as you never paid it. In fact, it likely isn’t listed anywhere on your mortgage contract. Remember the ridiculously high mortgage rate we talked about at the beginning of this article? Now you see what it can be used for.
If we take the same IRD formula, but replace the actual rate of 4.75% with a posted rate of 6.25%, the IRD becomes:
.0625 (A) – .0385 (B) = .024 (C)
.024 (C) * $400,000 (D) * 24 (E) / 12 = $19,200 (F)
Because of this sleight of hand, you would now owe the bank an additional $12,000!
If you try and fight the calculation, you will likely face a long line of staff who don’t understand the calculation themselves. A few months of complaining through the right channels might get you your money back.
In the March budget, the federal government said it would “bring forward regulations” to standardize the calculation and disclosure of mortgage pre-payment penalties. (This applies to federally regulated lenders.) We are still waiting.
This is exactly the type of situation where a good financial advisor can help you avoid or manage. The situation on IRD calculations as it currently stands with the big banks is rotten to the core.
_____
Nice eh?
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
Original Article
Have you ever wondered why the banks list posted mortgage rates that are ridiculously high?
One reason is that it could result in you paying $10,000 or more in extra penalties should you ever break your mortgage with them.
Here is the scenario:
Many people have, at one time or another, looked at breaking their mortgage in order to get a better rate.
With interest rates dropping to historic lows, it is more and more common for homeowners to think about the benefits of breaking their mortgage, paying a penalty, and locking in to a new lower rate mortgage.
Traditionally, the mortgage penalty on fixed rates is either 3 months interest OR something called the Interest Rate Differential (IRD) – whichever is higher. On a closed, variable rate mortgage, it is usually simply 3 months interest.
While the 3 months interest is pretty easy to understand, the IRD is a little mysterious. For help on this, I went to TD Bank's mortgage website. RBC has a similar section.
They both show the following formula:
Step 1: (A) The current interest rate under your Mortgage expressed as a decimal (for example, 6.75% = .0675)
Step 2: (B) The current interest rate that we can now charge for a mortgage term offered by us with the term closest to your remaining term. The interest rate will be our posted interest rate for the term minus the most recent discount you received
Step 3: (C) A - B = C, which is the difference between your current interest rate and the interest rate in B above (write C as a decimal)
Step 4: (D) Amount you want to prepay
Step 5: (E) Number of months for the remaining term of your Mortgage
Step 6: (F) (C x D x E) ÷ 12 = F, F is your estimated Interest Rate Differential Amount
Let’s say you have a mortgage at 4.75%, and it comes due in 2 years, and it has a current principal owing of $400,000. TD’s current 2 year posted rate is 4.1%. Let’s say that you were offered a 0.5% discount off the 2 year rate. The math would work as follows:
.0475 (A) – .0385 (B) = .009 (C)
.009 (C) * $400,000 (D) * 24 (E) / 12 = $7,200 (F)
While $7,200 seems like a lot of money, if you can lock in a 5 year mortgage today at 4%, you are benefiting from 2 years of a 4% interest rate instead of 4.75%, but you are also guaranteeing three additional years at 4%, when it is quite likely that in two years, a 5 year fixed mortgage rate will be a lot higher.
Here comes the evil part.
At many big banks, they don’t use your existing 4.75% rate. What they do is take the posted rate at the time you took out your mortgage. This is a rate that has no relevance to you, as you never paid it. In fact, it likely isn’t listed anywhere on your mortgage contract. Remember the ridiculously high mortgage rate we talked about at the beginning of this article? Now you see what it can be used for.
If we take the same IRD formula, but replace the actual rate of 4.75% with a posted rate of 6.25%, the IRD becomes:
.0625 (A) – .0385 (B) = .024 (C)
.024 (C) * $400,000 (D) * 24 (E) / 12 = $19,200 (F)
Because of this sleight of hand, you would now owe the bank an additional $12,000!
If you try and fight the calculation, you will likely face a long line of staff who don’t understand the calculation themselves. A few months of complaining through the right channels might get you your money back.
In the March budget, the federal government said it would “bring forward regulations” to standardize the calculation and disclosure of mortgage pre-payment penalties. (This applies to federally regulated lenders.) We are still waiting.
This is exactly the type of situation where a good financial advisor can help you avoid or manage. The situation on IRD calculations as it currently stands with the big banks is rotten to the core.
_____
Nice eh?
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
Wednesday, August 4, 2010
Chicken Little and Media...
If you're anything like me, you're a compulsive news reader. I have a love-hate relationship with news-media. I feel it is very important to be in touch with the world around me, as it impacts my business on a day-to-day basis, as well as shaping the future of my marketing avenues, and business planning, however, it can be very difficult to overcome the overwhelming, and CONSTANT negativity in the news.
At this time I am in a position, thanks to some wonderful Realtors and Industry analysts, to repeat a prediction that I encountered recently. Brace yourself for it - THERE WILL BE NEGATIVE MEDIA regarding the Real Estate market, very shortly. Yes, I know, this is a shocking revelation!
My goal today is to soften the impact of this sensationalist media by preparing you. By arming you with the facts.
Most of this content is "borrowed" from a gentleman named Doug Hannan, who is a Broker/Manager for RE/MAX West on Bloor st in Toronto (Another universe in Real Estate land, but nevertheless, seemingly the sole focus of real estate media in Ontario).
Doug obviously follows the Toronto Real Estate Market very closely. He has noted that in the month of July. TREB's (Toronto Real Estate Board) sales numbers were slightly lower than expected. He also noted that inventory had dropped a proportional amount, indicating balance in the market. Sales for the month were 6,566 units, down 1,900 from June of the same year (a typical seasonal drop - Vacation time!!). New listings this month are down 3,000 units to 21,096. It is to be noted that RE/MAX Realtors have been predicting a decrease in inventory since late 2009.
Where the media sensationalists will galvanize, is in the Year over Year numbers. It stands to reason that a July 2009 vs. July 2010 drop in sales of 35% would yield some alarm bells, but I am predicting that the media will have a decidedly un-elephant-like memory. They will fail to note (as they have previously failed to note) that July of 2009 was an absolutely ABNORMAL month, even in an extremely hot year. July 2009 Sales set a record at 9,967 sales (up 28% from July 2008). Benchmarking against the best July of ALL TIME is an unfair method of assessing the health of our market. The media won't mention this, save for a tiny disclaimer at the end of their "Real Estate Bubble is HERE, the sky is falling, depreciation is just around the corner, thousands to be left over-leveraged on inflated prices" reports.
The Sky is not falling, friends. Balance and sustainable growth will be the cornerstone of the immediate Real Estate market.
Thanks Doug - for the insight!
To Reach Doug Hannan of Re/Max West, try this:
doug.hannan@sympatico.ca
Thanks for reading!
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
At this time I am in a position, thanks to some wonderful Realtors and Industry analysts, to repeat a prediction that I encountered recently. Brace yourself for it - THERE WILL BE NEGATIVE MEDIA regarding the Real Estate market, very shortly. Yes, I know, this is a shocking revelation!
My goal today is to soften the impact of this sensationalist media by preparing you. By arming you with the facts.
Most of this content is "borrowed" from a gentleman named Doug Hannan, who is a Broker/Manager for RE/MAX West on Bloor st in Toronto (Another universe in Real Estate land, but nevertheless, seemingly the sole focus of real estate media in Ontario).
Doug obviously follows the Toronto Real Estate Market very closely. He has noted that in the month of July. TREB's (Toronto Real Estate Board) sales numbers were slightly lower than expected. He also noted that inventory had dropped a proportional amount, indicating balance in the market. Sales for the month were 6,566 units, down 1,900 from June of the same year (a typical seasonal drop - Vacation time!!). New listings this month are down 3,000 units to 21,096. It is to be noted that RE/MAX Realtors have been predicting a decrease in inventory since late 2009.
Where the media sensationalists will galvanize, is in the Year over Year numbers. It stands to reason that a July 2009 vs. July 2010 drop in sales of 35% would yield some alarm bells, but I am predicting that the media will have a decidedly un-elephant-like memory. They will fail to note (as they have previously failed to note) that July of 2009 was an absolutely ABNORMAL month, even in an extremely hot year. July 2009 Sales set a record at 9,967 sales (up 28% from July 2008). Benchmarking against the best July of ALL TIME is an unfair method of assessing the health of our market. The media won't mention this, save for a tiny disclaimer at the end of their "Real Estate Bubble is HERE, the sky is falling, depreciation is just around the corner, thousands to be left over-leveraged on inflated prices" reports.
The Sky is not falling, friends. Balance and sustainable growth will be the cornerstone of the immediate Real Estate market.
Thanks Doug - for the insight!
To Reach Doug Hannan of Re/Max West, try this:
doug.hannan@sympatico.ca
Thanks for reading!
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
Saturday, July 3, 2010
Reason #67 to use a Realtor to list
... Happy Canada Day weekend everyone... As a point of interest, I've been trying to find information about a home for sale in Otterville for 27 minutes and counting.
The home is posted for sale on www.propertyguys.com, and the site hasn't managed to be able to handle my search request yet... It appears to not understand what "otterville, Ontario" means.
Don't put a potential buyer through this!!!
When you hire me to list your home, you won't simply get a listing on Realtor.ca. I put your listing information in so many places, even if Realtor.ca happens to be down, a quick google search (or my trusty personal website) will get you more information than you can possibly imagine.
Thursday, June 3, 2010
Fanshawe College’s Woodstock Campus expansion hits funding setback
(Woodstock, Ontario) A major expansion project at Fanshawe College’s Campus in Woodstock has been denied funding through the Government of Canada’s Community Adjustment Fund (CAF).
Fanshawe applied for $11 million in CAF funding to help offset the costs of a proposed $14 million campus expansion to accommodate increasing demand in Woodstock and area.
“This is a huge disappointment for Fanshawe and for our partners in Oxford County,” said Fanshawe President Howard Rundle. “We are committed to providing training opportunities for students in this region, but we cannot do that as effectively as we want to without significant expansion to our Woodstock Campus. The demand is there. We need the support.”
The CAF was created as part of the federal government’s economic stimulus plan. It has earmarked $1 billion to support projects that create jobs and maintain employment in communities that have experienced significant job losses due to the global recession and lack of alternative employment opportunities. It is administered locally by the Federal Economic Development Agency for Southern Ontario. In 2010/2011, the CAF is providing $127.8 million for renovations in southern Ontario selected through an intake process.
Fanshawe, established in Woodstock in 1967, has identified campus expansion there as a key priority in its capital planning. The campus is running at full capacity, with enrolment at 300 full-time and 3,300 part-time students in recent years. Initial construction plans call for a first phase expansion of 65,000 square feet, with a second phase addition of 26,000 square feet, comprising new labs, classrooms, flexible teaching facilities, and workshops.
Fanshawe College and the City of Woodstock have each pledged $1 million in funding for the project; in addition, the City has contributed $1.25 million in property and facilities.
“Attracting investment to the region is dependent upon a highly skilled workforce,” said Woodstock Mayor Michael Harding. “Fanshawe is an important partner. We support the College’s efforts to grow, to offer more programs, and to help us continue to build an educated workforce in Oxford. Our commitment remains unchanged.”
President Rundle said that while the funding denial is a setback, Fanshawe will continue to investigate other ways to fund the project.
“Community colleges are more important than ever as Ontario moves toward a knowledge-based economy,” President Rundle said. “We know that tomorrow’s jobs will require technical skills and specific training, and we are still working with our partners to make that training available in Oxford County. We are optimistic that the project will eventually go ahead as planned.”
For more information, please contact:
Donna Derer
Chair, Woodstock Campus
Fanshawe College
519.421.0144 ext. 222
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
Monday, March 22, 2010
HST and its impact on Real Estate - Scotiabank Update
Hello all,
This morning I got an update from Heather Degraaf at Scotiabank regarding HST and it's impact on Real Estate Sales. This has clarified a few issues and questions for me, so hopefully it will be helpful for you:
_________
What is HST?
The merging of the current Provincial Sales Tax (PST) with the Federal Goods and Service Tax (GST) into one new tax.
Who does it Affect?
The New HST affects Ontario and British Columbia
Nova Scotia, New Brunswick, and Newfoundland have already implemented a Harmonized Tax while Saskatchewan, Manitoba, Quebec, and Prince Edward Island all collect separate PST or QST (Quebec)
How much is it?
In Ontario, it will be 13% (5% GST + 8% PST)
When will it be implemented?
Beginning July 1, 2010
How does it affect the sale of my current owner occupied principal residence (resale)?
The sale of housing that has been previously occupied by an individual as a place of residence and that was exempt from GST would also be exempt from HST
When does the HST apply to the sale of a new construction home or new rental property?
Builders sales of newly constructed or substantially renovated homes would be subject to HST when both ownership and possession of the home are transferred after June 30, 2010.
The provincial portion of HST would not apply to builders sales of newly constructed or substantially renovated homes that are taxable under the GST where, under a written agreement of purchase and sale, ownership or possession of the home is transferred before July 1, 2010.
The HST would not apply if either the ownership or possession of the complex is transferred, under a written agreement of purchase and sale, to the purchaser, before July 1, 2010 or if the sale was entered into on or before June 18, 2009 in Ontario and November 18, 2009 in British Columbia, regardless of the ownership or possession date.
Is there a Housing Rebate?
Yes, new housing rebates would apply when HST is charged and the purchaser would have qualified for a GST rebate
Please visit http://www.rev.gov.on.ca/en/taxchange/index.html and http://www.gov.bc.ca/hst for more information on the rebate.
Are other closing costs subject to HST?
Yes, other costs associated with the purchase of you rnew house, including legal fees, home inspection fees, appraisal fees, and real estate agent commission fees will be subject to HST.
This information was provided by Heather Degraaf, Mortgage Development Manager, and Heather can be reached at 519-421-5260
For more information, feel free to contact Heather, or myself!
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
This morning I got an update from Heather Degraaf at Scotiabank regarding HST and it's impact on Real Estate Sales. This has clarified a few issues and questions for me, so hopefully it will be helpful for you:
_________
What is HST?
The merging of the current Provincial Sales Tax (PST) with the Federal Goods and Service Tax (GST) into one new tax.
Who does it Affect?
The New HST affects Ontario and British Columbia
Nova Scotia, New Brunswick, and Newfoundland have already implemented a Harmonized Tax while Saskatchewan, Manitoba, Quebec, and Prince Edward Island all collect separate PST or QST (Quebec)
How much is it?
In Ontario, it will be 13% (5% GST + 8% PST)
When will it be implemented?
Beginning July 1, 2010
How does it affect the sale of my current owner occupied principal residence (resale)?
The sale of housing that has been previously occupied by an individual as a place of residence and that was exempt from GST would also be exempt from HST
When does the HST apply to the sale of a new construction home or new rental property?
Builders sales of newly constructed or substantially renovated homes would be subject to HST when both ownership and possession of the home are transferred after June 30, 2010.
The provincial portion of HST would not apply to builders sales of newly constructed or substantially renovated homes that are taxable under the GST where, under a written agreement of purchase and sale, ownership or possession of the home is transferred before July 1, 2010.
The HST would not apply if either the ownership or possession of the complex is transferred, under a written agreement of purchase and sale, to the purchaser, before July 1, 2010 or if the sale was entered into on or before June 18, 2009 in Ontario and November 18, 2009 in British Columbia, regardless of the ownership or possession date.
Is there a Housing Rebate?
Yes, new housing rebates would apply when HST is charged and the purchaser would have qualified for a GST rebate
Please visit http://www.rev.gov.on.ca/en/taxchange/index.html and http://www.gov.bc.ca/hst for more information on the rebate.
Are other closing costs subject to HST?
Yes, other costs associated with the purchase of you rnew house, including legal fees, home inspection fees, appraisal fees, and real estate agent commission fees will be subject to HST.
This information was provided by Heather Degraaf, Mortgage Development Manager, and Heather can be reached at 519-421-5260
For more information, feel free to contact Heather, or myself!
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
Thursday, March 11, 2010
Ontario set to outpace the rest of the country in 2010!
Reprinted from CBC NEWS
Ontario's economy is expected to outpace the national average with 3.3 per cent growth this year and 4.1 per cent growth in 2011.
RBC Economics says increased housing activity and greater vehicle production spurred a return to positive growth in late 2009.
The bank forecast says Ontario's construction sector should see a rise in activity in 2010, fuelled by higher capital spending.
It also says high demand for real estate should extend to new homes, with housing starts likely to hit 64,200 units this year — 14,100 more than in 2009.
But, the report says, "this recovery will not be evenly felt across economic sectors. For instance, the province’s hard-hit manufacturers will continue to face many obstacles. Top on the list of impediments will be the continued strength in the Canadian dollar ... which will dampen the beneficial effect of improving demand south of the border."
RBC notes that a strong Canadian dollar limits U.S. demand for Ontario exports and the auto sector is susceptible to more turbulence.
The forecast also predicts the introduction of the new harmonized sales tax [HST] in Ontario on July 1, will be 'possibly the biggest policy event to occur in 2010 ..."
"Although the HST will result in certain currently exempt products and services being taxed, moving to a value-added tax structure will make the tax system more economically efficient and will improve the competitiveness of Ontario businesses by lowering the cost of doing business in the province. The benefits of such a tax system will accrue over the medium to longer term."
The report says the Ontario economy should improve this year and next as more industries move into recovery mode.
Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON
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