While you are house hunting, please ensure to keep your credit in good standing. Any default payments or increased debt will affect your capacity to purchase.
Here is a quick checklist to help me provide prompt service:
o Income Verification: Letter from employer & recent pay stub
*If commission and overtime provide most recent 2 years consecutive
“Notice of Assessments”
o Down Payment Verification: Own source: 3 months bank statements of deposits, RRSP’s, investment
OR
Gifted: gift letter, bank statement to show funds received
o Lawyer information
o Void Cheque or Preauthorization Payment form
o Copy of Photo-identification
o Copy of Offer to Purchase (provided by Realtor)
o Copy of MLS listing (provided by Realtor)
Please call anytime if you require additional information or clarification.

Lenders and policy makers are currently in discussions to change the mortgage rules again!! They are currently debating reducing the maximum amortization period back down to 25 years. This will make mortgage payments higher and will reduce the overall amount of a mortgage you will be able to qualify for.

They are also having discussions about increasing the amount of down payment required to buy.

Both of these will have a huge impact on your ability to buy, and how much you will be paying monthly. If you are thinking of buying you should consider buying right now before these changes come into being.

Search all MLS listed homes on our website www.edmontonhomesforsale.biz or call me today 780-995-6520

One of the best things you can do to ensure you get the home you want is to arrange for financing before you go shopping. This is often referred to as getting “pre-approved”.

Getting pre-approved simply means that your lender has calculated how much of a mortgage they’re willing to offer you, depending on your down payment and current financial situation.

There are two advantages to having a pre-approved mortgage. First, you know exactly what you can afford when shopping for a new home. Second, when you make an offer, you’re likely to be taken more seriously.

To get pre-approved call “Chita” at Dominion Lending Centres – Optimum 780-932-2225 or go online for a free no-obligations pre-approval @ www.edmontonbestmortgagerates.com

With barely a month to go before the end of the year, it is time to get your house in order. Herewith, your top 10 end-of-year tax tips:

1. Tax-loss selling

This is the practice of selling investments that are in a loss position at year-end in order to offset capital gains elsewhere in your portfolio. To guarantee that a trade of public securities is settled in 2009, the trade date must be Dec. 24, 2009, or earlier. This will make sure that the settlement takes place in 2009 and that any losses realized are available to the taxpayer this year. Any trade made after Dec. 24, 2009 will not settle until 2010, so those losses would not be available until next year.

2. Fix your house

The deadline is fast approaching to qualify for the home renovation tax credit (HRTC). The HRTC is a 15% tax credit for eligible renovation expenditures made to your home or vacation property. The credit applies to any amounts spent over $1,000, up to a maximum of $10,000, producing a maximum credit of $1,350.

Although the deadline for the credit is Jan. 31, 2010, the Canada Revenue Agency (CRA) has stated that as long as any materials you purchase to be used in a renovation are acquired by this deadline, they will qualify for the credit, even if they are installed after January 2010. The same, however, does not hold true for labour expenses, as only work completed before February 2010 will qualify for the credit, even if the amount is prepaid.

3. Turning 71 in 2009?

If so, you must convert your RRSP into either a Registered Retirement Income Fund (RRIF) or a registered annuity by Dec. 31. In addition, you only have until Dec. 31 to make your last RRSP contribution — if you plan to do so. You don’t have the advantage of delaying until March 1, 2010. If, however, you have a spouse or partner who is under 72, you can continue contributing to a spousal RRSP in his or her name, provided you still have contribution room.

4. Contribute to your children’s future

If you have a child or grandchild who has never participated as a beneficiary in a Registered Education Savings Plan and who turned 15 sometime in 2009, Dec. 31 is the last chance to contribute at least $2,000 to his or her RESP to be allowed to collect the 20% Canada Education Savings Grant for 2009 and create eligibility for the grant in 2010 and 2011. If you miss the deadline, the child or grandchild will not be eligible for any grants in the future.

5. Give big

Dec. 31 is also the last day to make a donation and get a tax receipt for 2009. Keep in mind that gifting publicly-traded securities with accrued capital gains to a registered charity or a private foundation not only entitles you to a tax receipt for the fair market value of the security being donated, but eliminates any capital gains tax as well.

6. Contribute to a registered disability savings plan (RDSP)

The RDSP is a tax-deferred registered savings plan open to Canadian residents eligible for the Disability Tax Credit, as well as their parents and other eligible contributors. Up to $200,000 can be invested within the plan with no annual contribution limits. While contributions are not tax deductible, all earnings and growth accrue on a tax-deferred basis. Contribute before the Dec. 31 deadline to qualify for the 2009 matching Canada Disability Savings Grant and potentially, the Canada Disability Savings Bond.

7. Splurge on office furniture

If you are self-employed or a small-business owner, consider accelerating the purchase of new business equipment or office furniture that you may have been planning to do in 2010. You are permitted to deduct under the “half-year rule,” one-half of a full year’s tax depreciation in 2009, even if you bought it on Dec. 31. For 2010, you can then proceed to claim a full year’s depreciation. For computer equipment purchased after Jan. 27, 2009 and before February 2011, you can write off 100% of the cost in the year of acquisition — with no half-year rule.

8. Consider a low, low loan

The government’s prescribed interest rate is set at the all-time low of 1% until at least Dec. 31, 2009, providing couples with a significant income-splitting opportunity. Under this strategy, the higher-income spouse loans funds to the lower-income spouse at 1%, with interest paid annually by Jan. 30 of the following year.

If the loan is made before Dec. 31 while the prescribed rate is 1%, any investment returns above the 1% rate can be taxed in the hands of the lower-income spouse. Note that even though the prescribed rate varies quarterly, you need only use the rate in effect at the time the loan was originally extended.

9. Pay investment expenses

To deduct any investment-related expenses on your 2009 tax return, the amounts must be actually paid by year-end. Such expenses include interest you paid on money borrowed for investing, investment counselling fees for non-RRSP accounts, professional accounting services for tracking rental or business income and safety deposit box rental fees.

10. Get a head start for 2010

If you routinely get a large tax refund each spring due to RRSP contributions or child-care deductions, the CRA can authorize your employer to reduce the amount of income tax withheld on your employment income. Send a completed CRA Form T1213 “Request to Reduce Tax Deductions at Source,” with all supporting documents to the Client Services Division of your local tax services office.

 Financial Post

Money tips for engaged and married couples

After starting a career, the next life-cycle stage to begin for many people is marriage. Some say it is the most important in terms of financial success. No, they don’t mean marrying someone wealthy (although this wouldn’t hurt!). What they are referring to is financial compatibility between two individuals.

“Probably my best financial move has been choosing a spouse with similar money habits and views on personal finances,” says Scott McKibbon, a do-it-yourself investor in Hamilton, Ontario. “This seems to be particularly important in this day and age as broken marriages have destroyed more personal balance sheets than poor markets.”

Here are 10 tips to help sort through the financial risks and rewards of married life.

1. It takes two to tango. As a married person, one needs to realize they are not saving and investing just for themselves. Their spouse will likely have a different tolerance for risk and that should be taken into account

York University professor Moshe Milevsky, a leading expert in financial mathematics, came to the conclusion his personal exposure to stocks should be leveraged by 300 per cent to offset the predominately bond-like nature of his personal wealth (tenured job and pension plan).

“Are you out of your mind?” was his wife’s reaction (as quoted in the November issue of the Journal of Financial Planning). And so Mr. Milevsky went with a much lower level of leverage.

2. Set compatible goals. Also realize that one’s spouse may have different financial objectives, and compromise is in order on this count as well. On Tim Stobb’s blog, Canadian Dream: Free at 45, a recent post recounts a frugal husband’s attempt to interest his wife in buying a Tumbleweed Tiny House, which range from 65 to 800 square feet in living space.

The husband thought they could live in such a tiny house since they had no plans for children. His wife responded with: “I will not live in a garden shed, no matter how cool you think it is.” The solution settled upon in the end was a thousand-square-foot townhouse.

3. Talk about money, even if it hurts. Some spouses don’t like to compromise and may hide what they are doing with the family finances. They don’t communicate and that is when money issues can really spiral toward the tragedy of separation and divorce.

In Jonathan Chevreau’s financial novel, Findependence Day , the central character, Jamie, decides to borrow $60,000 – without telling his wife – to invest in stocks. But after taking the plunge, the market crashes hard. When his wife finds out about the losses, she tells her husband: “I can’t believe you’d be so stupid. That is the last straw.” A while later, Jamie receives an envelope from his wife’s lawyers requesting a split.

4. Two heads are better than one. But marriage, of course, is not all sacrifice and strife. A team working together can accomplish more than the individual members separately. “The other huge success I’ve had is finding a partner who enjoys taking part in our financial decisions,” declares Brad Ferris, the author of the blog: Triaging My Way to Financial Success.

He illustrates with an example. “As I mentioned in a post a while ago about investing in the stock of Reitmans Canada, my partner’s shopping experience and insights into their products … helped me see a different side of the fundamentals than what any analyst could pass on.”

5. No ‘I do’s’ without a financial chat first. It is no revelation that money issues are a leading cause of martial discord and dissolution. So head them off before getting married (if one is still at the stage of clubbing around). Don’t be blinded by those beefy biceps and a twinkle in the eye. Look for extremes in financial behaviour before saying “I do.” For a guide, check out the “lighthearted” Valentine quiz from the Australian Securities & Investments Commission.

Here’s a sampling on what to look for: Is your prospective partner up most the night trading oil futures on margin or do they keep “banknotes in the freezer, some gold bullion in the underwear drawer, and regard bank deposits as high-risk?” Do moths fly out of their wallet on the rare occasion they are forced to open it or “have they already spent more than the gross domestic product of a small nation?”

6. Get educated. For Emil Saumier, divorce was the worse thing that happened to him financially. He never paid much attention to the intricacies of family law in his province or realized how much marriage breakdown could devastate one’s financial situation. “I really think I would have been better prepared if I had been better educated in finance,” says Mr. Saumier, the owner of a martial-arts school in Ottawa.

Christine Van Cauwenberghe, director of tax and estate planning with Investors Group in Winnipeg, would likely agree. She observes that family law can indeed hold some surprises. For example, “In a few provinces the marital home is shareable even if acquired prior to the time of marriage.” Her book, Wealth Planning Strategies for Canadians: 2010 , points out other surprises that lurk in family legislation.

7. Know thy spouse-to-be. “It is surprising how many couples have never discussed finances before their wedding,” notes Brenda MacDonald, an independent financial counsellor living in Victoria. In the June, 2009, issue of Canadian MoneySaver, she offers a comprehensive checklist of topics that engaged couples should discuss before walking down the aisle. They include: financial goals (and how to reach them), where to invest savings, and debts brought into the marriage.

She also recommends comparing credit scores. If both persons have similar scores, above 750, shout “Hurray for us!” If one or both score lower than 650, the caution flag is waving. Not only could it signal an irresponsible personality but it may diminish the couple’s ability to borrow for a house, car and other items.

8. Use your spousal status as a benefit. Marriage presents many opportunities to protect assets and enhance after-tax income. An entrepreneur can protect the family house from creditors by putting it in the other spouse’s name. And they can split income by employing a spouse. Other income-splitting moves include contributions to a spousal registered retirement savings plan (RRSP).

The higher income spouse should pay household expenses while the lower income spouse uses their income for investing. If he or she doesn’t have enough funds, a loan from the higher income spouse (at “prescribed” loan rates) can be invested without attribution back to them. As well, contributions can be made to the other spouse’s tax-free savings plan (TFSA) without attribution.

9. A prenup shouldn’t be such a dirty word. Second and blended marriages raise additional considerations. Notably, one or both parties in such unions may be bringing substantial assets to the marriage. A properly executed prenuptial agreement can provide protection (family law may have grey areas and can be changed). And in blended families (both spouses have kids from previous marriages), prenups and other arrangements may be necessary for ensuring an estate is left behind for one’s children from the previous relationship.

10. Those who save together, stay together. A study, Fatal (Fiscal) Attraction: Spendthrifts and Tightwads in Marriage, conducted by researchers at Wharton Business School and Northwestern University, found that spendthrifts and tightwads tended to marry each other. Go figure. Anyway, that was not a good thing, the study said, because the greater the difference on the spending continuum, the more likely the marriage would encounter turbulence.

This martial tendency is all the more reason for engaged and married couples to zero in on the financial aspect of their relationship. One step often recommended for resolving disputes is to have separate and joint chequing accounts. But, above all, communication is the crucial factor.

“During marriage, I think one of the most important things that spouses need to do in dealing with financial issues is to communicate,” advises Ms. Van Cauwenberghe. “If the couple is experiencing financial difficulty, there are usually ways of resolving those issues, but many couples simply choose to ignore them and allow [problems like] debt to pile up. In many cases the solution is to speak to a neutral third party. A financial adviser is often able to state the obvious things that spouses don’t want to admit to each other.”

Source: Larry MacDonald from the Globe and Mail

Gross domestic product sees first gain in a year in Q3, signals recession’s end

OTTAWA – Canada’s real gross domestic product grew 0.1 per cent in the third quarter, the first quarterly gain since the third quarter of 2008 and a signal – if a feeble one – that the recession has ended.

Statistics Canada reported Monday that the economy expanded at an annualized rate of 0.4 per cent in the third quarter, compared with a 2.8 per cent increase for the U.S. economy.

The first overall economic growth in a year marks an end to the recession, which is defined as at least two back-to-back quarters of contraction.

While it is the first indication Canada’s economy is again beginning to grow after begin battered alongside the rest of the world during the economic meltdown that saw the failure of U.S. banks, ravaged corporate profits and lengthened unemployment lines, it is “not exactly a clanging endorsement of the ‘end of recession’ story,” said Douglas Porter, Bank of Montreal’s deputy economist.

“While the quarterly gain for the third quarter was a bit of a damp squib, this doesn’t alter the bigger picture that the Canadian economy is erratically grinding out of recession, led by broad-based gains in domestic spending,” Porter wrote in a note to clients.

“With the solid hand-off from the sturdy September result and mounting signs that the U.S. recovery is taking root, look for much more convincing evidence that the recession is over in fourth-quarter GDP results. Still, the broader picture of a relatively muted recovery remains the dominant theme.”

The agency says final domestic demand advanced 1.2 per cent, as capital investment and personal expenditures both increased.

Real GDP was up 0.4 per cent in September, as most major industrial sectors increased their production.

Final domestic demand was bolstered by a second consecutive quarterly gain in personal expenditures and the first expansion in business capital expenditure since the fourth quarter of 2007.

Export and import volumes both increased after many quarters of decline.

The output of services-producing industries increased 0.6 per cent, with the wholesale and retail trade sectors and real-estate agents and brokers leading the way.

Goods-producing industries slipped 1.4 per cent, continuing a downward trend that started in the third quarter of 2007.

Mining and oil-and-gas extraction contributed the most to the decrease as a result of temporary shutdowns.

Source: THE CANADIAN PRESS, cp.org, Updated: November 30, 2009 9:20 AM

Weekly rate minder provided by: Souchita Rattanarasy Dominion Lending Centres Optimum 780-932-2225. Explore Mortgage Scenarios with Helpful Calculators on http://www.souchita.com/

New in Canada’s Economic Action Plan

Through Canada’s Economic Action Plan, the federal government will introduce a First-Time Home Buyers’ Tax Credit (HBTC) to help with the purchase of a first home. This measure is expected to cost $30 million in 2008-2009, $175 million in 2009-2010 and $180 million in 2010-2011. 

About the Initiative

The HBTC will assist first-time homebuyers with the costs associated with the purchase of a home, such as legal fees, disbursements and land transfer taxes, which are a particular burden for first-time homebuyers, who must also save for a down payment.

The $5,000 non-refundable HBTC amount will apply to qualifying homes acquired after January 27, 2009, and will provide up to $750 in federal tax relief.

A qualifying home is generally considered to be a housing unit located in Canada that the individual or individual’s spouse or common-law partner intends to occupy as the principal place of residence no later than one year after its acquisition.

Any unused portion of an individual’s HBTC may be claimed by the individual’s spouse or common-law partner. When two or more eligible individuals jointly purchase a home, the credit may be shared but the total credit amount claimed cannot exceed $5,000.

How It Works

First-time homebuyers purchasing a home will be able to claim the HBTC on their income tax returns, starting in 2009. Claimants should ensure that documentation supporting the purchase transaction is available if requested by the Canada Revenue Agency. Claimants are also responsible for making sure that all applicable eligibility conditions are met. 

Who Is Eligible

First-time homebuyers are eligible. An individual is considered a first-time homebuyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of the home purchase or in any of the four preceding calendar years. Special rules apply for the purchase of homes that are more accessible or better suited to the personal needs and care of an individual who is eligible for the Disability Tax Credit. In these situations, the HBTC can be claimed, even if the first-time homebuyer requirement is not met. 

How to Find Out More

For more information, please visit the Department of Finance Canada website or the Canada Revenue Agency website.

CANADIAN PRESS

April 20, 2009

OTTAWA – After more than a year of cutting borrowing costs to boost the slumping economy, the Bank of Canada may hold the line on interest rates when it announces its rate decision Tuesday.

But there are other things the central bank is expected to do to boost the supply of money into financial and credit markets.

Economists seem split on whether another cut is needed, with some saying it would stimulate more borrowing if implemented with other credit-enhancing moves by the Canadian central bank and others dismissing the effectiveness of rate cuts alone.

With the trend setting overnight bank rate at half a point, Bank of Canada governor Mark Carney “has exhausted conventional remedies,” says Avery Shenfeld, chief economist at CIBC World Markets.

“A further cut to a quarter-point overnight rate would be futile on its own, and would squeeze margins in the banking system, and we therefore expect Carney to hold the target at 0.5 per cent.

“More effective would be simply to remind markets, again and again, that short rates will be staying low for the foreseeable future, likely right through 2010 if the real GDP recovery speed is seen at two per cent or less.”

Michael Gregory, senior economist at BMO Capital Markets, said “it’s better than even odds” there will be a quarter-point cut Tuesday.

“The market is not sure. I think they will cut but they will have to do something else with it as well.”

Gregory says the central bank may alter some of its other relations with the country’s big banks and other financial companies – something he calls settlement balances – to encourage them to lend more to consumers and businesses or buy securities, helping to loosen up the credit crunch that has been a large hurdle to economic recovery in corporate Canada.

As well, the central bank “can buy assets and then pay for them by printing money or creating money,” says Gregory.

“We can buy assets, maybe asset-backed commercial paper, and we will pay for it by printing money. Well, guess what, all that money we print has a potential for circulating in the economy to further expand the monetary supply.”

While observers will be watching Tuesday’s bank rate, all eyes will be on the Bank of Canada’s latest economic outlook that will be released Thursday.

The bank’s Monetary Policy Report will give us the Bank of Canada’s view of how deep the recession will be and when economic recovery is expected.

The January report predicted recovery will be strong next year, but Shenfeld believes this week’s assessment will offer “a more sobering outlook”on Canada’s economic prospects than the January update.”

Some economists predict the eight per cent jobless rate will surpass 10 per cent by the end of the year and about 600,000 additional jobs will be lost in the economy. Reduced trade with the United States, weak financial markets, the credit crunch, falling commodity prices and the restructuring of the manufacturing sector are all taking their toll on the economy.

“Expect governor Carney and his team to say, in effect, ‘never mind’ about what they said about a brisk economic rebound in 2010,” Shenfeld said. “That was based on a too-rosy reading of the external environment, and on both the Canadian and global economies responding to monetary stimulus in the way that macro models predict.”

“Historically, deep interest rate cuts would spark a wave of borrowing and spending, and the bank’s economic model captures such impacts. But in a shock caused by excess leverage (global debt), it’s going to take a long time before we see a releveraging of the household and business sectors. Growth is likely to stay below Canada’s non-inflationary potential through 2010 as a result.”

The market is changing fast… very similar to what we saw when the market had it’s down turn back in May 2007.

As of this morning there were 2,521 residential listings in Edmonton proper.  In the last 30 days there were 684 listins sold which again is an increase over last week.  That would give us a listing to sales ratio of 3.56:1.  Again that is a drop from last week.

For those of you who have been following this blog you will remember that historically in Edmonton we need a listings to sales ratio of 4:1 for a neutral or balanced market.  Now for 2 weeks in a row we have been below that market which supports my comments lasts week that we have probably seen the bottom of valuations.

I wouldn’t be surprised at all if we were to start seeing valuations start to rise again soon.  So if you were thinkg of buying then the sooner the better as they say.