Monday, June 29, 2009

Why aren't interest rates moving back down ?

We have continued to see a retraction in the 5 year bond which is now 15 bps (basis points) lower than a week ago. Bank spreads (profit margin) over bond have increased to 2% yet there has been little to no movement in the 5 year rate.

Why is that ?

With the number of mortgage deals closing today and tomorrow, it is unlikely that rates will change before Thursday - if at all. If a bank changed their rate downwards today, they would open themselves up to having to reduce rates on all deals closing today and tomorrow which would effect service levels (this is the busiest time of the year for mortgage closings) by requiring a flood of emails & phone calls requesting changes to documentation and also effect profits (lower rates on all those deals means less income for the lender).

Remember that the banks will be closed Wednesday for the Canada Day

Why have a home inspection ?

A home inspection is one of the most important steps in the home purchase process. Hiring a certified home inspector is essential to ensure the inspection is conducted to a recognized standard, providing the buyer with valuable information about the condition of the home. The goal of the inspection is to identify any MAJOR problems that are apparent on a visual inspection of the property. A listing of minor building flaws or minor repairs and maintenance items may be provided as a courtesy, at the inspector’s discretion.

Selecting your Home Inspector

Your home inspector should have proper training and experience. Today several companies offer home inspection training. When selecting your home inspector ask if they as a member of a professional home inspection organization such as; American Society of Home Inspectors (ASHI), NACHI (National Association of Certified Home Inspectors), National Association of Home Inspectors (NAHI), Canadian Association of Home and Property Inspectors (CAHPI) as well as having E&O (error & omission) and liability insurance. An inspector that has worked in the building trades and has thorough know of home construction may provided added value to the inspection.

The cheapest isn't always the best
Every home inspection may have different problems. The more certifications/qualifications your home inspector has the more likely he will be able to address the issue during the initial inspection. These added services may increase the home inspection costs slightly however in the long run it will save the home buyer thousands in undetected deficiencies not found.


As a minimum your inspector should be:

* Certified/Register Home Inspector - member of professional home inspection organization
* Certified mold inspector - inspection and testing tools. There are over 270 species of mold identified as living in Canadian homes. When mold is permitted to grow and multiply indoors, health problems can occur and building materials, goods and furnishings may be damaged.
* Infrared thermal imaging (Thermographer) - infrared camera Thermal imaging serve as an additional method of verifying defects suspected or found by other means, thus better proving the existence of the defect. (water intrusion and insulation voids) When an home inspector is also a certified mold inspector and infrared thermographer he greatly reduces the home buyer’s risk of water infiltration which cannot be seen or detected in a typical home inspection.

Additional Inspector services include; radon & asbestos testing, WETT and Septic.

Courtesy of Garry D. Heard Greater Durham home Inspections who can be reached by phone at
905-831-4887 or on the web

Monday, June 22, 2009

A note from a home inspector

What makes molds grow?

Molds will grow if we provide them with moisture and nutrients. If we keep things dry, molds do not grow

● Moisture ● Nutrients ● Suitable place to grow
High moisture levels can be the result of water coming in from the outside, through the floor, walls or roof; plumbing leaks moisture produced by the people living in the home, through daily activities like bathing, washing clothes or cooking. Water enters the building when there is a weakness or failure in the structure. Moisture accumulates within the home when there is not enough ventilation to expel that moisture.
Molds are undesirable when they grow where we don’t want them, such as in homes. Over 270 species of mold have been identified as living in Canadian homes. Molds that grow inside may be different from the ones found outdoors.

Prior to its close in 1990, much of the world’s supply of vermiculite came from a mine near Libby, Montana. This mine had a natural deposit of asbestos which resulted in the vermiculite being contaminated with asbestos. Attic insulation produced using vermiculite ore, particularly ore that originated from the Libby mine, may contain asbestos fibers. Today, vermiculite is mined at three US Facilities and in other countries which have low levels of contamination in the finished material.
Home inspectors should recognize vermiculite attic insulation (especially in homes build before 1991), assume it contains asbestos, not disturb it during the inspection, note its presence in the inspection report, and note its presence as a restriction to the inspection.

What Is Asbestos?

Asbestos is a mineral fiber. It can be positively identified only with a special type of microscope. There are several types of asbestos fibers. In the past, asbestos was added to a variety of products to strengthen them and to provide heat insulation and fire resistance.

What Should Be Done About Asbestos In The Home?
If you think asbestos may be in your home, don't panic, usually the best thing is to leave asbestos material that is in good condition alone. Generally, material in good condition will not release asbestos fibers. There is no danger unless fibers are released and inhaled into the lungs. Check material regularly if you suspect it may contain asbestos. Don't touch it, but look for signs of wear or damage such as tears, abrasions, or water damage. Damaged material may release asbestos fibers. This is particularly true if you often disturb it by hitting, rubbing, or handling it, or if it is exposed to extreme vibration or air flow. Sometimes, the best way to deal with slightly damaged material is to limit access to the area and not touch or disturb it.

What is Radon?
Radon is a gas produced by the radioactive decay of the element radium. Radioactive decay is a natural, spontaneous process in which an atom of one element decays or breaks down to form another element by losing atomic particles (protons, neutrons or electrons). When solid radium decays to form radon gas, it loses two protons and two neutrons. These two protons and two neutrons are called an alpha particle, which is a type of radiation. The elements that produce radiation are referred to as radioactive. Radon itself is radioactive because it also decays, losing an alpha particle and forming the element polonium.

We thank Garry D. Heard of Greater Durham Home Inspectors who can be reached at 905-831-4887 or on the web

Tuesday, June 16, 2009

More pressure on interest rates ?

Recently we noted that the favourite 5 year fixed term interest rates had jumped from historic lows - close to 3.5% - back up over the 4% mark. As you may know, fixed rate mortgages are priced from the bond market.

Here's a little more potentially unsettling news for you ...

The bond crept up 1 basis point and the Bankers Acceptance (BA) was up 2 basis points. It makes us wonder if the Bank od Canada will be able stay its course until next summer as was indicated.

Also, the spread between the 5 year bond and the average 5 year rate is much better than it has been. I hope that we will see some rate specials - like 30 day quick closing deals - over the next week or so.

Have a great day !

Monday, June 15, 2009

Interest rate increases got you down ?

I recently saw a chart showing the average interest rate for the month of June each year since 1951.

The average of all these rates is 9.08% up to 2008. The low rates we recently experienced were not the norm and I think that some people who sat on the fence have learned that inaction can be worse than the wrong action.

So if you are balking at the recent rate increases (3.54% turned into 4.24% pretty quickly didn't it?), this is great information to remember:

1) Gather your team of professionals and listen to their advice. Friends and family members are great for giving advice but they all have day jobs which have absolutely nothing to do with mortgages, real estate etc.

2) Low interest rates are not a birthright, nor do they happen on a regular basis. Since getting into this industry 28 years ago, I and everyone I know has never seen anything like this and may never again.

3) The best time to get preapproved for a mortgage is TODAY.

4) The best way to get preapproved for a mortgage is to use the services of a licensed mortgage broker who will shop the market for you, saving you time, energy and money.

Sunday, June 14, 2009

Canada's Economy one of the first to recover according to OECD


But it's too early to say whether a turning point has been identified in global economies, economic group's report says

Canada's economy is in good shape, and it should be one of the first in the world to come out of recession, says the head of the Organization for Economic Co-operation and Development.

"Effectively, Canada will be one of the first to come out of the recession," secretary-general Angel Gurria told business leaders and policy makers Monday at the Conférence de Montréal. His comments follow a report by the organization, one of the world's leading economic groups, signalling a possible "trough" in Canada's recession

Mr. Gurria's assessment backs up a claim of Prime Minister Stephen Harper - that Canada was one of the last countries to fall into recession, and will be one of the first to recover.

The OECD said tentative signs of a trough are also evident in other economies after months of a brutal downturn that has gripped the world.

The OECD report was the second bit of positive news, coming just before Canada Mortgage and Housing Corp. reported that housing starts rose more than 9% last month.

The group said it is still too soon to determine whether a turning point it has identified in several countries is temporary or sustainable, but that its composite leading indicators for April "point to a reduced pace of deterioration in most of the OECD economies."

The organization cited "stronger signals of a possible trough" in Canada, France, Italy and Britain.

"The signals remain tentative but they are present in the majority of the [composite leading indicators] series for these countries," the OECD said.

"Compared to last month, positive signals are also emerging in Germany, Japan and the United States," it said. "However, major non-OECD economies still face deteriorating conditions, with the exception of China and India, where tentative signs of a trough have also emerged."

In Canada, the group said, the indicator rose by 0.4 of a point in April, although was still 7.6 points below where it was a year earlier.

Also in Montreal Monday, Finance Minister Jim Flaherty expressed "cautious optimism that a global economic recovery may not be far behind" the signs already emerging that the credit crunch is easing.

Friday, June 12, 2009

Construction is on the rise

Courtesy, GLOBE & MAIL

Housing starts are 'first sign that a bottom might be forming in
Canadian home building activity,' economist says, although conditions still harsh in B.C.

Residential construction in Canada increased in May, yet another positive development for the housing market.

Housing starts across the country rose more than 9% in May to 128,400, seasonally adjusted and at an annual rate, from 117,600 in April, Canada Mortgage and Housing Corporation said Monday.

"This morning's housing starts data for May from CMHC provided us with the first sign that a bottom might be forming in Canadian home building activity," said Toronto-Dominion Bank economist Pascal Gauthier.

The increase was broad-based, including both single homes and multiple units such as condominiums, and was better than economists had projected.

Housing starts surged in Ontario and the Prairies, and rose more modestly elsewhere, although construction declined in British Columbia, New Brunswick and Newfoundland and Labrador.

BMO Nesbitt Burns economist Robert Kavcic pointed out that in British Columbia, housing starts on an annualized basis are near the record lows seen in the early 1980s and early 1990s, meaning the province has "the distinction of having arguably the nastiest residential construction recession this cycle."

In urban areas across Canada, construction rose 11.1%.

The broad-based nature of the rebound was an encouraging sign, TD Securities said in a research note, although it cautioned the market would remain soft.

"Indeed, after plunging precipitously since late 2007, and appearing to be in freefall in recent months, this rebound may be an indication that the sector is perhaps stabilizing," said economics strategist Millan Mulraine. "Nevertheless, with the Canadian labour market continuing to weaken and the overall economy remaining quite soft, we expect residential building activity to remain the current depressed range for some time."

Mr. Kavcic also suggested that the slump in residential construction might be finding its bottom.

"However, the weak activity has only begun to chip away at the overbuilding seen during the latest boom, and the recovery in starts will therefore likely be tepid," he said.

Wednesday, June 10, 2009

How about a Spring business clean-up ?

Spring’s here! The birds are chirping, the frogs are croaking, the garden is sprouting and we, as business owners are - doing our thing, as usual! Are we missing an opportunity to shake things up and put a bit of spring fever into our work? Housework phobics everywhere look at the spring season as a time to clean our homes, swooshing out the dust and staleness of the long winter season. Even those grimy windows get a shine – so why don’t we apply this to our business? We could use the spring as a time to Regroup, Recycle, Renew and Remodel our business.

We can Regroup by deciding what is important to our business and what we can do without. If we look at areas such as marketing and networking, we can decide what works and change what doesn’t. There are hundreds of networking groups out there and not all are going to work for your business. Some will be long term and will evolve with you and others may be useful for a little while and then no longer. Be ruthless – if it isn’t working change it! Review your marketing plan in the spring, looking at last year as a comparison. For new business owners, at first you may have to work on instinct, advice and other peoples’ experiences. Don’t be afraid to ask advice – most business owners are happy to share what works for them. We’ve all been newbies!

Recycling is a big green issue and you can apply this to your business by repeating what works for your business. We know that if we are diligent in our accounting, consistently go over the odds with our customer service and regularly return messages, our business will probably continue to prosper and grow. Look for other areas where you can improve and then maintain that improvement.

We all deserve a little pampering and can use this to Renew. It may be something as simple as coffee with a friend during the working day or a pedicure on Friday afternoon. Whatever works for you, if it helps you to relax and take some quality time off, it will Renew your energy and commitment to your business. At the end of the working week try sitting down in a quiet place with a notepad and recording what you accomplished that week and what your plans are for the next week. Sir Richard Branson, Chairman of the Virgin Group, does this with his key staff every week and if it works for him – well, he seems to be doing okay!

Remodeling is an ongoing thing. A business is an evolving organism and change is a constant, but change without focus and a clear route is not necessarily a good thing. Planning, organization and clear goals are needed to make sure that we stay on the right track

So how about it? Is it time for a clean up?

Submitted by Christine Raynor, President of Home or Away Property Services, taking care of empty residential properties. Christine can be contacted at 905-448-0808,