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First Rate
E-Newsletter
for September 2007
Dear Homebuyer,
If you are a homeowner, potential
homeowner or a real estate investor, you know that your
mortgage is the single largest expense you'll ever have.
Keeping abreast of interest trends, mortgage innovations and
credit strategies will help lower your mortgage costs and
possibly build wealth for you and your family.
I have a unique approach to the mortgage business and that is,
to provide my customers with the most comprehensive
information and options available so they can make the best
mortgage and home buying decision. I don't use any slick
sales techniques or negotiation strategies. It's all
about providing the right information and letting you make the
decision- My job is done when you know your options.
Events
Please note that due to the
Vancouver civic strike, our first time home buyer seminar at
Riley Community Centre for September 19 may not push through.
Please feel free to attend other seminars in Ladner, Port
Moody, Delta and Coquitlam. Click here
to view our list of upcoming seminars.
In this issue:
- Limited time offers
- Market commentary &
interest rate trend
- Capital gains tax rules for
principal residences
- Tips on minimizing taxes on
your investment property purchase?
- Top 5 credit mistakes
Limited time offers
as of Sept 5,
2007
- Open Mortgage - Prime less
0.75%
- Closed variable - Prime less
0.95%
- Hi-Ratio Mortgages > $1M
@ 5.65%
- High-Ratio $500K - $999K @
5.74%
- "No Frills"
Mortgages- 5.64% (closing in 30 days - not for
pre-approvals)
Rates subject to change
without notice, certain conditions may apply, OAC, E&OE
Market commentary & Interest
rate trends
As expected, the Bank of Canada (BoC)
held off raising interest rates today citing a possible
slowdown in the US economy. The Canadian economy
continues to be robust as indicated by a strong labour market
and higher than expected increases in home sales and prices.
CIBC World Markets is anticipating
rates to stay at its current levels until Dec 2008. If
you are currently in a variable rate mortgage, we believe that
there is no compelling reason to lock-in at this time.
The best variable rate of 5.35% (prime less 0.90) is still
better than the 5 year rate of 5.79%, despite the narrowing of
the gap during the past months.
Rates and Charts
Prime @ 6.25%
(next announcement on Oct 16, 2007)
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Term
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Jul
27
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Aug
3
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Aug
10
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Aug
17
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Aug
24
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Aug
31
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Today
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3
year
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5.70%
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5.70%
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5.70%
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5.70%
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5.70%
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5.70%
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5.70%
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5
year
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5.79%
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5.79%
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5.79%
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5.79%
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5.79%
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5.79%
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5.79%
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10
year
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6.15%
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6.15%
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6.15%
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6.15%
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6.15%
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6.15%
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6.15%
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Table shows the discounted
residential mortgage rates for 3, 5 and 10 yr closed fixed
rate mortgages
For a longer term
view, click
here to see the 3, 5 & 10 year best
residential rate since September 2003 (updated
monthly)
Click to view other
relevant graphs
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Capital gains
tax rules for principal residences
Many home owners
are aware that the gain on sale of a principal residence is
tax free. Many are not aware, however, of the tax
implications of renting out the principal residence. In
this situation, the property would have deemed to be sold at
market value. If the property has increased in value,
there would be a gain on sale which could be subject to tax.
It is useful to know, however, that there is a provision in
the Income Tax act that allows the home owner to keep their
principal residence status for a period of 4 years after
renting out the property. To apply for this, the home
owner must include a letter in their tax return stating their
intentions.
This information is provided as general information. If
you are planning to rent out your principal residence, you
should consult your accountant or lawyer.
Tips on
minimizing taxes on your investment property purchase?
1) Consider getting a cashback on
your mortgage - We generally don't encourage our customers to
use cashback programs since they can be expensive.
However, there is one situation where you may want to consider
obtaining a cashback. This is when you are purchasing an
rental property. When you get a cashback mortgage, the
interest rate on the mortgage is increased to compensate for
the cashback. A tax advantage is generated because the
increased interest on the mortgage is tax deductible while the
cashback is tax free.
2) Make your current mortgage tax deductible - Many
individuals have some cash available for a down payment on an
investment property. While you may think it wise to use
the funds as a down payment on an investment property, you
would be better off to pay down your home mortgage. You
then re-borrow the funds (on your home mortgage) for the down
payment on your rental property. By doing this simple
strategy, you are able to make a portion of your home mortgage
tax deductible.
The Top 5 Credit Misconceptions
(From Transunion's September 2007
newsletter - To read the complete article click here
)
#5: Closing old accounts will
improve your credit score
#4: Co-signing a loan doesn't make you responsible for the
account
#3: Paying off a negative record will get it removed from your
credit report
#2: Paying off a debt will make your credit score jump up 50
points right away
#1: Checking your credit reports will lower your credit score
Relevant Links
REFERRALS ALWAYS
WELCOME....
The highest compliment I can
receive is a referral from a friend...Thank you!
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CONTACT
INFO:
Tel
(604) 506-0397
Email:
johnso@bcmortgage.ca
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