Attn: Ontario landlords… Rent control rules may not apply!

landlord-tenantDid you know that Alberta has no residential rent control?   And British Columbia landlords can increase rents by the rate of inflation PLUS 2%?   In Ontario, the Landlord and Tenant Board sets annual rent increases.   For 2014, the rent increase was a mere 0.8% and for 2015 the rents can only be increased by 1.6%.  Anyone that’s bought a rental property has probably been following these rules for years.   An increase of 2.2% over a 2 year period sounds great if you are a tenant, but somewhat unfair if you are landlord.

Now, what if I told you there’s a good chance your PROPERTY IS EXEMPT FROM ONTARIO’S RENT CONTROL RULES?  Meaning you can increase the rents as high as you like.   According to the Ontario Landlords Association, more and more properties are becoming exempt from Ontario’s rent control rules.  
Read the rest of this entry »

When this guy can’t qualify for a mortgage, you know the mortgage rules are too tight!

BernankeFORMER US FED CHAIRMAN CAN’T GET A MORTGAGE.

Anyone remember this guy?  Ben Bernanke.   He’s just the former Chairman of the US Federal Reserve Bank. He served two terms from 2006 to 2014.   Earlier this month, he revealed that he was declined for a mortgage refinance.  Now, just to put this in perspective, he used to make a nice 6 figure salary.  And today, he is paid an estimated $250,000 per speaking engagement.

How can he not qualify?  Clearly, the mortgage rules tightening process has gone waaaaaay overboard.   But this isn’t just happening in the US.   Canada’s mortgage lending rules have always been tighter than the US.  And over the past 6 years, the Canadian govt has brought in numerous changes to tighten the rules even further.  (Actually, experts agree that they went way overboard.  And we are only now seeing the effects of the rule changes.. Look out.  You’re in for a big surprise the next time you need mortgage money).

CANADIAN MORTGAGE RULES ARE EVEN TIGHTER!!

Canada’s Banking industry has been the envy of the world.  We came out of the 2008 US sub-prime mortgage crisis with no visible scars.   Read the rest of this entry »

Bi-weekly payment myth…. it won’t pay your mortgage off faster.

No Mortgage Bi-weekly payments won’t pay your mortgage off faster.  Yup, it’s true.  Around 4 yrs ago, I wrote an article showing some simple but effective math to explain this.  Recently, I’ve had several readers and clients ask me about bi-weekly payments.

I thought I’d repost that article as it seemed to get a lot of attention and answered a great many questions on what it really takes to pay your mortgage off faster.

Repost from July 2010….

Back in the mid 90’s, there was a huge marketing blitz by the Big Banks that promoted making bi-weekly payments instead of the traditional monthly payments.   The sales pitch was that you could save huge amounts of money and pay your mortgage off much faster….save 4 or 5 years off your amortization…. Sound familiar?   Well, BI-WEEKLY PAYMENTS DON’T REALLY SAVE AS MUCH AS YOU THINK!

And I’ll prove it…. here’s the straight facts! Read the rest of this entry »

RBC charges homeowner $8900 penalty, or 15 months interest charge!

RBC-BankPicture this… Your mortgage is with the biggest Canadian Bank in Canada.  You feel sBankstersafe.  You got a great rate at the time… 2.99%.   What could go wrong?  Well, for these clients, and hundreds others, plenty!

Check out the RBC Discharge stmnt oct 2014 showing an Interest Rate Differential (IRD) prepayment penalty of $8912 on a mortgage balance of $213,562.   Now, $8912 is a lot of money, but you’ve seen me expose even higher penalties in the past.   Penalties as high as $35,000 and $40,000.   But, put another way, that’s over 15 months worth of interest penalty being charged.   And that’s just ridiculous!

NEWS FLASH!  This type of inflated prepayment penalty calculation isn’t exclusive to RBC, the rest of the BIG SIX BANKS use a similar calculation.   And they’ve been getting away with these outrageous penalties for over 14 years!  (actually, this isn’t a new story.. I’ve been writing about these nightmare, or bankmare, penalties for years.)

Let me put this another way…. Read the rest of this entry »

Senior Deputy Governor says lower rates are the new normal.

Carolyn Wilkins In her first public speech as Senior Deputy Governor for the Bank of Canada, Carolyn Wilkins brought some good news to Canadians with mortgages.    Interest rates should remain low for some time….. and we can expect lower rates to be the “new normal”.

Ms. Wilkins went on to say that “the recovery has had repeated false starts and still faces considerable headwinds.”  This seems to be the new message coming from the Bank of Canada.  And I must say, it’s a refreshing change from the previous high-profile Governor, Mark Carney.

UNPOPULAR COMMENTS

Remember our previous Bank of Canada governor?  Mr. Carney earned high praise for helping Canada avoid any U.S. style recession.   But in the years leading up to his 2013 departure, his repeated warnings of pending interest rate hikes never materialized.  In fact, we now know they were way off.  Interest rates went down and have stayed down.    Looking back, Carney’s rate hike warnings sounded more like ‘the boy who cried wolf’. Read the rest of this entry »

More disclosure.. but still no standardization of Mortgage Penalties.

Olive and harper Last week, we heard some potentially good news for Canadian consumers.  Federal Finance Minister, Joe Oliver, announced Banks would have to provide consumers more disclosure on certain products, including collateral mortgages.  We welcome more disclosure.

However, before we get too excited and give the Federal govt too much credit, let’s wait to see if this latest promise really happens.   If you are wondering why I’m so skeptical, it’s with good reason.  The Federal govt has not honored their commitments before.  And I’m talking about the promise made to Canadians to charge a fair prepayment penalty…  Remember that one? Read the rest of this entry »

Federal govt finally takes action on Collateral mortgages.

handcuffsTD Almost 4 years ago, I reported that TD was about to make one of the biggest changes in mortgage history.   They were about to register all their mortgages as a collateral charge.    Consumer advocates spoke out against the collateral charge as they recognized it would limit a borrower’s future options.

A collateral charge is always used for secured lines of credit products.   The charge does not require an amortization which allows the credit balance to go up and down.   Using a collateral charge for ALL mortgage products gives the Banks more power.   It allows them to attach other unsecured debt to your mortgage…  Unsecured credit products such as loans, credit cards, unsecured lines of credit or other unsecured Bank debt.  I bet most people don’t know that?    Read the rest of this entry »

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