Further to the basic concept of not over leveraging yourself, many first home buyers or investors forget to keep in mind that interest rates will likely be higher in 5 years. Please keep this in mind when making your next real estate purchase. We have been blessed over the past few years as a Vancouver mortgage broker being able to offer such low rates. Everyone including you the client are winning with the low rates but we must remember that they will probably increase in the coming years. Be prepared for an increase of 3-5% on top of your existing rate. Yes your outstanding balance will lower but only slightly if you have chosen a 35 or 40 year amortization period. Check out my primary mortgage broker website at http://www.jessijohnson.ca and feel free to comment below. I love to hear your thoughts.

First home buyer? Refinancing or purchasing for investment and can’t decide on a fixed or VRM (variable rate mortgage)? In my opinion there are two things you should think about: 1. How well do you sleep at night? 2. Can you afford a rate increase of 3-5%? If you can afford such an increase, you might want to consider the VRM because historically it is the better way to go.

Feel free to take a few minutes by checking out my primary website at www.jessijohnson.ca. As a Vancouver mortgage broker, my goal is to leave you educated and entertained.

The concept of HST scares many people and I am asked about this all the time. That being said I put together a simplified version of how this will affect you. HST (Harmonized Sales Tax) is a new tax being introduced next year (2010) that will greatly affect real estate. Previously we were charged 5% GST on new construction, plus property transfer tax (if applicable), starting July 1st,2010 we must pay 12% (5% GST & 7% PST), plus property transfer tax (if applicable). Find this disturbing? I certainly do. Not a big surprise, the public doesn’t agree with HST on real estate and all of the sudden a rebate system pops up. Was this planned the entire time? Maybe, maybe not. Purchasers of new homes will be eligible for a rebate of up to 71.43%. Where this magical number came from is beyond me. That’s right folks, at best the government will be keeping another 28.57% of the previously provincial 7% tax. The new (as of November 18, 2009) HST threshold is now $525,000. When you exceed this number and purchase a mediocre downtown condo, the government feels you can afford more and maxes out your rebate at $26,250. What does this mean to you?

Let’s do some math:

$500,000 Purchase price
+$60,000              HST
+$8,000                Property transfer tax
-$20,000               HST rebate
+$2,000                Closing costs (lawyer, etc)
=$550,000            Final cost

You are essentially paying $50,000 over the value of the home. Now don’t get me wrong, a good realtor will add that in the purchase contract but that only masks the tax. Thinking twice about purchasing new real estate now? I am. The old system would have cost you $15,000 less in this equation. If you purchase (close on your transaction) before July 1, 2010 you will not be affected by HST. Sales of new properties under written agreements before November 18, 2009 will generally not be affected by HST. This does not apply to the re-sale homes, however costs associated with the purchase will be also affected. Cost to sell is also affected because realtors must soon charge HST on commissions

CLICK HERE FOR PRE-DONE HST CALCULATIONS
*Please note this is based on the previous threshold of $400,000 with a maximum rebate of $20,000. The calculations have not been updated since the November 18th change.

To many the concept of HST is an unknown subject, however it is not really that complicated. I recorded this video on an early morning in December the day I received my first road sign If you can get past the fact that I am half awake, a simple explanation for HST is there. Please also check out this easy to read article I wrote simplifying HST at: http://www.jessijohnson.ca/mortgage-broker/vancouver-news/2009/11/hst-harmonized-sales-tax-how-it-works-the-simplified-version/

Here is your current mortgage interest rate update. Anyone sitting with a VRM (variable rate mortgage) or floating rate with Prime will find this useful. Otherwise those looking at a fixed rate will benefit with this basic information. The Bank of Canada is meeting this Tuesday December 8th, 2009. Most of us in the industry don’t expect the overnight lending rate to go anywhere for at least another 3-6 months. Inflation essentially control’s the overnight lending rate. If the rate of inflation comes near or exceeds the 2% benchmark, then interest rates are raised to curb inflation. As for fixed rates, these are simply dictated by the bond yield. The bond yield goes up and fixed rates usually follow. What causes the bond yield to increase you ask? Many factors but the definitive factor in this recent increase was the good economic news from the 79,000 jobs created in the month of November. For more details on me, please go to http://www.jessijohnson.ca

If you need to look up contact details for someone online, check out www.123people.com. Here you can punch in someones first and last name, then it shows you any publicly available contact information. I filmed this while rehearsing my lines for the feature film Ecstasy. For details on the feature film Ecstasy, go to http://www.dolcecielo.com/ecstasy-feature-film. This movie is by Dolce Cielo Productions. For more details on Jessi Johnson  … http://www.jessijohnson.ca

For some reason the majority of people continue to go to realtors first and brokers or the bank after. This is old-school thinking and it should be the other way around. Smart realtors these days won’t spend much time with a client until they are properly qualified. From the clients perspective, why would you go shopping without know how much money is in your wallet. On top of that as a broker we provide 120 rate holds that don’t cost you a penny and are there for your protection. This could save you thousands in interest cost by simply planning ahead. Here is a good recap of the steps:

• Contact your broker first (hopefully Jessi Johnson)
• Get pre-approved and make sure your credit good
• Send in your documents now, not later to get checked by your broker.
• THEN contact your realtor and have fun home shopping.

This way when you have an accepted offer, your potential problems are minimized. Remember to own your life and check me out at http://www.jessijohnson.ca/

I met Vince Hartmann somewhere in the realm of social media this year and wanted to give him a should out. Vince has an organization geared towards sobriety awareness. Check out http://nationaldayofsobriety.ca when you have few seconds. Recently Vince road his bike across Canada to raise awareness for addiction and he certainly deserves some attention for his accomplishment.

While giving you a tour of the backyard of my Cloverdale house and accidental rated R puppy perversion, I briefly described the TSFA. The TSFA is a Tax Free Savings Account. Essentially any money you put into this account grows tax free. So when I first heard about this I thought, big deal, who cares about the whopping 0.3% you earn on your bank account. However when I looked further into this I learned that there are many uses for the TFSA. For example, I use my TFSA for stocks. One would only hope that eventually I would make a few good investments and make significant large gains. All the gains are tax free. My plan is to drop in about $5,000 each year, half will go to secure investments like Gold, etc. The rest will go to more riskier stuff or penny stocks. This way if I hit the jackpot I keep the gains, all of them. Remember to own your life and check me out at http://www.jessijohnson.ca/

While attending a wedding in Dallas Texas, we decided to go to Speed Zone and go drag racing. While in the car I felt compelled to briefly explain the key indicator predicting a change in the VRM (Variable Rate Mortgage). If you are curious, I came in second place. To give you a quick breakdown, the main key indicator of where the VRM is going would be inflation. A comfortable percentage for inflation is 2 percent. Once inflation exceeds this number the government will very commonly increase the over night lending rate (which effects the Prime rate) to curb inflation. If you have loans dictated by Prime, I would certainly pay attention to inflation. To find the current inflation rate, go to www.jessijohnson.ca and the rates are always posted there. As an alternative, you can navigate to the Bank of Canada’s website here: http://www.bankofcanada.ca/en/index.html