Medicine Hat Real Estate Blog - Terry Thom

New Regulations shouldn't be a mystery

Mon, 24 Jan 2011 04:35:02 -0700

New home buyers have a sea of regulations, rules and guidelines to wade through on their way to purchasing their dream home. Those guidelines have just gotten an adjustment as Finance Minister Jim Flaherty has tightened up mortgage guidelines. While changes have been expected, many industry professionals are relieved that the changes are relatively minor.

Which isn’t to say those changes aren’t important.

A 5‰ minimum down payment is still required.

There are ways to qualify for a mortgage without the savings in place based on clean credit histories and minimum beacon scores. Some lenders are allowing cash back programs to be used as the down payment though they will be subject to higher interest rates. Flex Down payment programs are also available to qualified buyers which will allow them to borrow the down payment from a line of credit, personal loan or credit card.

The total amortization period allowed on an insured mortgage (a mortgage over 80‰ purchase price) has been reduced from 35 years to 30 years. While this might mean you have a little less purchasing power, it is not a dramatic change and still above the 25 year amortization period which had been the norm until recently. The good news is that while it might be a hard pill to swallow up front, you’ll save a significant amount of money in interest costs.

For current owners, there are changes that you should be aware of as well.

Presently, home owners can refinance their property to 90‰ of appraised value, but as of March 18, 2011 this will be limited to 85‰ . This means that once a home owner reaches a 15‰ equity position in their property it cannot be leveraged by restructuring their mortgage.

The new regulations also limit government insurance of home equity lines of credit to 85‰ of value of the property. This is the least restrictive change for those wanting to get into the housing market and further clarification will be forthcoming from lenders and governing bodies. This change will be effective April 18, 2011.

It is highly recommended that you have an honest and open conversation with a mortgage professional who can help determine how these changes will effect your opportunity for buying or refinancing your home. As a consumer, you have a right to free consultations with a mortgage professional. At Signature Service Financial we have mortgage officers who serve Saskatchewan and Alberta. We offer customized services that are tailored around your personal goals. We’re here to help.

Business Planning

Thu, 09 Dec 2010 02:19:57 -0700

Thanksgiving has come and gone and, while there’s shopping to do and parties to attend; Christmas isn’t here yet, so you have a few weeks to really process what changes you’ll make or strategies you’ll keep for ’11.

Now is also a great time to establish your marketing plans as we all know the holidays tend to slow down business. Think of this as a two week break to reflect over the past year and consider the future of your success. Whether it’s a focused two hour time slot each morning or three full days, commit this much needed time to regroup and gear up... you’ll hit the ground in 2011 running!

Start the process with reflection. The best way to move forward is to evaluate the past.

What worked for you over the past year? Whether it was a great drip email campaign, your new blog, or commitment to social media - keep it up! If it was beneficial to your business be sure to continue putting the same time and energy into those things, and don’t be afraid to bump it up a notch!

What didn’t work for you? Did all those postcards you sent out yield any type of return or are there any websites or services you’re paying for that don’t seem to be doing anything for you? If something is not working for you; don’t be afraid to drop it. Don’t spend the time, energy or money when you could be investing more in the things that do work.

Next, consider new things! Growing in your business will often entail trying new ways of marketing or a different approach entirely!

Below are a few of the Top Digital Marketing Trends for 2011 as pointed out by HorizonWatching that will help point you in the right direction if you’re not already there! And, while this site is geared more towards marketing teams; you’ll be able to take the key elements that you can use for your strategies.

Marketing Budgets Will Continue to Shift Towards Online: Customers and prospects are increasingly going online early in the buying cycle to gather information, form relationships, and make decisions about how they will buy. As a result, marketing leaders must move marketing mix budgets to mirror where the customers and prospects are - online.

Social Media Marketing Is Maturing: Those in the marketing profession can sense that we are in the middle of an important transition to the use of social media for marketing purposes. While the past few years many marketers have been experimenting with social media tactics, in 2011, leading marketing teams will be executing social tactics that are fully integrated into the overall marketing strategy. An overall social media marketing process will emerge that has firms following a never ending cycle of

1) Research, 2) Plan, 3) Engage and 4) Measure.

Social Video As A Marketing Tool Gains Momentum: Video is an incredible way to connect with people online. Until the Internet, the only way to get your video message to a mass audience was to pay for a TV commercial. Today, social media sites and video go hand in hand. Distributing video via your social networks is a powerful way to imprint your images into the memory of your customers and prospects. Video strengthens the relationships you have with existing customers and it helps prospects get to know you better.

Search Engine Optimization Gets More Complex: Customers naturally use search engines as their primary vehicle to find information on products and services. But its not a one search engine game anymore as Google’s been joined by Bing and there are important local players like China’s Baidu and Russia’s Yandex. On top of that, social sites like Twitter, Facebook, and LinkedIn are increasingly becoming an important source for searching.

The final step is to put your plan into action! While there can be different phases to your marketing plan as you budget for 2011, the goal is to get the ball rolling. If you begin now, you won’t be scrambling after the excitement of the holidays wears off; you’ll be ready to go!

If you still aren’t quite sure where to start, we’d love to help! We offer business planning with a strong emphasis on your marketing, so that you are freed up to do the job that you need to do, and more importantly, know when it needs to be done! From enhancing your online presence, to real estate blogging, drip email campaigns, social networking, listing marketing, branding, and everything in between; we have training that will help to make 2011 your most successful year yet!

Are you prepared for next year?

Mortgage Brokers can SAVE you Money

Wed, 24 Nov 2010 11:39:52 -0700

Choosing the right mortgage can be overwhelming. Although going to your bank might be the logical move, you don’t know if this will net you the best mortgage plan for your budget, lifestyle and prospects. And searching by yourself can give you the feeling that there is just too much to know.

That’s why mortgage brokers seem to have become an increasingly popular channel for consumers to find the right mortgage for them. According to the Canadian Association of Accredited Mortgage Professionals Fall 2009 Canadian Mortgage Industry Snapshot, 23% oall mortgages in 2009 were handled by a mortgage broker, including 32% oall new mortgages.

Albertans lead the trend, with 34% oall mortgages in that province being handled by brokers. Most Ontarians and those living in the Atlantic Provinces prefer going through one of the Big Five Banks. And Credit Unions/Caisses Popularies are strongest in French Canada and the Prairies.

It appears that young people are the ones driving the success of mortgage brokers. In 2009, 28% omortgages amongst 18-34 year-olds were through a broker, while only 17% oCanadians older than 55 used one. This is likely because young people are more uncertain about how to choose the right mortgage and because brokers are still relatively new to Canadians.

The most important finding from the research is that Canadians use brokers for new mortgages, but they tend to neglect them for their renegotiations. This could be a mistake. The data in this report shows that brokers can be an effective way to get lower interest rates. Those Canadians who renegotiated their mortgage through a broker reduced their interest rate by 125 points compared to the 114 point reductions consumers got when they went through a Bank or Credit Union.

Rob Daniel, the Managing Director of Maritz Research Canada (the group that conducted the research), had this to say: “The Broker channel has done a good job marketing the effectiveness of its service for originations, but Canadians are defaulting to their lender or Banks when it comes time to renegotiate. Brokers need to let their customers know that their services are very useful – and financially beneficial – during the renegotiation process as well.”

Of course, using a broker may not always be in your best interest, particularly if you have a good relationship with your bank, and are confident you are getting the best rates. But if you have any doubts, getting a mortgage broker might be one of the best ways to save you money in the long term.

Contact Signature Service Financial today for more information.

www.signatureservicefinancial.com

Image: Stefano Valle / FreeDigitalPhotos.net

Five ways to achieve financial stability towards home ownership

Wed, 24 Nov 2010 11:36:22 -0700

Although many Canadians feel comfortable taking on debt, household debt has doubled in the last 20 years, to a record of $1.41 trillion. That means, on average based on everyone living in Canada, each person would have about $41,740 worth of debt.

It is important that each household works towards maintaining a plan, so that one day owning a home can be attainable, and not just a dream. The first most significant step towards home ownership is to achieve financial stability.
Here are five ways to achieve financial stability towards home ownership:

1. Start your own personal budget plan:

Regardless of whether you are looking to buy a home, planning to save for retirement, or just looking to balance your finances, it is important to create a personal budget. In an average month, those without budgets would probably have great difficulty in being able to estimate how much they spend on various amenities. For a one month period, create a household budget which not only will categorize spending, but show actual figures of what your household spends money on.

Once that month is over, it is important to take a look at the finances and see what is being spent and where. Seeing these numbers written down is typically more effective because you can begin to allocate money to different sources if need be. For example, if you find that your household is eating out too much, allocate some money towards monthly groceries, and the other money can be used towards saving up for a down payment on a home, or perhaps paying down existing debts.

Creating a personal budget is crucial in order to be able to effectively save up for a down payment and afford a home. If you need help creating your budget plan you can email: info@ssfi.ca for a complimentary sample budget plan.

2. Examine your current debt:

It is important to be aware and fully understand the current debts that you have. Take a look at not only the type of debt, but how likely it is that these debts can be paid off and how quickly.

In terms of credit cards, only use them if you know you can afford the payments on them. You should also be aware of payment dates, as missing payments will adversely affect your credit score. Having a lower credit score makes it more difficult when obtaining mortgage financing, auto financing, or even future credit card financing.

3. Determine your financial goals:

Find out exactly what you want to achieve financially. Without a goal in mind, it makes it much harder to follow through with saving up and paying down debts. If you want to own your own home, own a car, or save up enough for a trip, it is important to visualize what you want.

If you’re just looking to become more financially stable, consider a target budget that you can slowly work towards. It is also important to look at your income compared to your debts to see if there is any room for improvement.

4. Eliminate higher interest account balances:

High interest account balances can really hinder plans for home ownership. Credit cards promoted through various companies that typically offer “No interest” or “Don’t pay for 90 days!” also come with a hefty price tag. Big box stores that have in-house financing also typically have the highest interest rates for credit cards.

If you are trying to pay down debts, focus on paying off those with higher interest rates first before moving on to the other accounts. Another tip would be to contact your credit card company and ask for an interest rate decrease. Individuals who have good repayment history and have been with the credit card company for a significant amount of time can sometimes successfully receive a lower interest rate just by asking.

It is important to keep two active trade lines in order to maintain a strong credit score. This can be two credit cards, a credit card and line of credit, etc. Typically, having too many credit cards makes it difficult to keep track and could potentially cause missed payments.

5. Find out your best mortgage financing options:

Shopping around for a mortgage is no easy task. There are many mortgage products available currently, and it is important to speak with an accredited mortgage professional to see what the best option for you is.

Many mortgage brokerages offer their services for free. Many also receive discounts from top lenders therefore are able to offer more competitive rates compared to going with a traditional lending institution, such as a bank.