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kenbeckerrealtor · 1 year

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An Experienced Real Estate Agent In Radium Hot Spring Can Find You A Scenic Home

Situated between the British Columbia Valley, the Radium Hot Spring area is one of the most beautiful and scenic places. If you love to be surrounded by nature, an experienced real estate agent in Radium Hot Spring can help you secure a property in the suburb of Columbia Valley. If you are searching for a location that will have the best view of the Columbia River along with the picturesque Rocky Mountain, then Windermere and Invermere are the places that should be on top of your priority list. Other than these places you can also choose areas like Fairmont Hot Springs, Canal Flats, and Panorama. Buying a property in these places will also secure you a gorgeous view of the valley.

Why should you hire an experienced real estate agent in Radium Hot Springs?

As you can already see these places in the Columbia Valley are extremely beautiful, and many people would want to buy a property here. Thus, these places are very high in demand. And with demand comes a high price. Trying to secure a home here alone would be very difficult, thus taking help from an experienced real estate agent in Radium Hot Springs is the best idea. They can help you choose the best property and also negotiate the best deals for you. They can also bring you many options to choose from. So, if you are dreaming of a property in the lap of mother nature, Ken Becker Realtor can be your best shot at it.

An Experienced Real Estate Agent in Radium Hot Springs Will Focus on Your Needs

When you hire an experienced real estate agent in Radium Hot Springs it becomes easier for you to find properties within your reach. Just because you love the surroundings doesn't mean you will take whatever you get. A good realtor will allow you to choose from properties that fit your budget, wants, and needs. They will make sure you get everything in your house that you wanted. Also within your budget.

Experienced Real Estate Agents in Radium Hot Springs are Aware of The Local Market

When you move into a new place, you have no idea about the area. The neighborhood, the market, the schools nearby, or the healthcare facilities. Everything is unknown to you. But when you work with an experienced real estate agent in Radium Hot Springs, they will tell you everything you need to know about the locality. Is there a school nearby for your kid, or is there any marketplace to shop for groceries from? Or what are the cultural efficacies among the people already living there? You will get all the information from your realtor. This will help you get an overview of the locality and choose accordingly.

An experienced real estate agent in Radium Hot Springs will make sure you have a smooth real estate experience

Real Estate is a hectic process. There is a lot of negotiating, talking to people, visiting different properties, and paperwork included. And an experienced real estate agent in Radium Hot Springs can ease the process out for you by taking the maximum headache for themselves. So, you do not have to worry much about the intricacies of it.

Conclusion

Choosing an experienced real estate agent is essential when it comes to making one of the most significant financial decisions of your life. Ken Becker Realtor, an experienced real estate agent in Radium Hot Springs, possesses the knowledge, expertise, and dedication to guide you through the process and help you achieve your real estate goals in Invermere, Canal Flats, Panorama, Fairmont Hot Springs, and the surrounding areas. Contact Ken Becker Realtor today for a seamless and rewarding real estate experience. So, if you want to bag a home in these areas, contact Ken Becker Realtor now!

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rebeccahpedersen · 7 years

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Household Debt vs. Mortgage Debt: The Good, The Bad, & The Ugly

TorontoRealtyBlog

After the two stories from Monday’s blog, and my obvious dislike of the new mortgage regulations implemented on January 1st, I think you all have an idea where this is going.

While not exactly about real estate, those stories did serve a purpose in the conversation about debt in Canada, which of course, is a major driver of real estate prices.

Allow me to open today’s blog with a third story, and then explain where all this is going…

Do I tell a lot of stories about my mother on TRB, or what?

Hey, I’m just like any other 37-year-old who thinks that his mom is the best mom ever.

And don’t wives just love that about their husbands?

My mother, if I could describe her in a word, would be simple.

That word could take on many meanings, but I’m using it in a sense that she’s content, uncomplicated, easy-going, happy-go-lucky, easy-to-please, and the like.

For years, she had an old-school “box” television, when just about everybody on the planet had a flat-screen.

Around 2009, I showed up at her door one day with a 42-inch flat-screen, and she looked at me like I was crazy! “I don’t need this,” she told me. But it was too late. I was already inside installing it.

Last year, on Black Friday, my Mom was grocery shopping at a Scarborough mall, and she called me upon returning home.

“David,” she asked me, “Do you think I need a new TV?”

“Do you want a new TV?” I asked her. “Does your TV work? Is it large enough?” I asked.

“Yes, yes of course. It’s not even ten years old!” she said, showing why I think she’s so content.

“So then why are you asking, Mom?” I inquired.

“Well,” she told me, “I was at Metro today, and there’s an big-box store next door. There were all kinds of people streaming out of the front door with massive TV’s! All these people, wheeling out 60-inch Sony’s and Panasonic’s in grocery carts and loading them into their cars!”

“So what does this have to do with you?” I asked.

“It just got me thinking,” she explained, “All these people are buying these massive TV’s on their credit cards! I even went inside and watched them! Then they come out and put them in their beat-up old cars. I just sort of thought, well, if they can afford a new TV, then should I get a new one too?”

I love my mother dearly. She’s just so cute, so simple, so well-intentioned.

And she couldn’t help being susceptible, seeing other people absorbing all that consumerism has to offer, and she was wondering if she should follow suit.

“Mom, you’re almost 70-years-old,” I told her. “You’ve been working since you were nineteen. You have an RRSP, and a pension, and your monthly expenditures are minimal. You can afford a new TV, but do you want one?” I asked.

There was a long pause, and she said, “No…not really,” and laughed. “Nevermind,” she said. “It was just a thought.”

Just a thought, there, in that moment.

But I can’t tell you how many times she and I have come back to that story, and how many times we’ve talked about this in the context of consumer debt.

Back in May of 2017, the International Monetary Fund (IMF) issued a warning to Canada regarding both housing, and household debt.

In response, Finance Minister, Bill Morneau, said the following:

“What the IMF has said is … that there’s a level of household indebtedness in Canada that is significant, something for us to watch. The housing market, of course, is something we’re paying close attention to.”

In September of 2017, Equifax Canada reported that non-mortgage debt rose 3.3% in the second quarter of 2017, to an average of $22,595 per person.

In November of 2017, The Organization for Economic Co-operation and Development (OECD) warned against the rising level of household debt in Canada, which was among the leaders in the world. They noted that consumer debt topped 100% of Gross Domestic Product in Canada.

In December of 2017, Statistics Canada announced that debt as a proportion of household disposable income increased to 171.1% in Canada, which represented an all-time high.

There is, without a doubt, no question that Canadians are taking on too much debt.

But what kind of debt they’re taking on, what kind of debt they should scale back on, and what kind of debt is acceptable based on an individual’s circumstance, isn’t something the government seems to be interested in.

As I alluded to in Monday’s blog, I believe that there is “good” debt, and I believe that there is “bad” debt. And if you want a simpler and more agreeable way of looking at it, let’s just say that there is better and worse debt.

While you might be quick to suggest that if I were to claim that mortgage debt is “good debt,” it’s only because I sell houses for a living. If that’s your assertion, then you haven’t been reading TRB for long. But if you need more convincing, then let me explain.

What I was talking about on Monday had more to do with “financial literacy” than it did with debt, since I was identifying that most people in society today aren’t competent enough to run their own personal finances.

So if the government – and it’s an “if” depending on how you view the government, and their role, is going to tackle household debt, then where do they start?

When I look at debt, I look at several features prominently:

1) Interest rate 2) Amount 3) Security 4) Purpose 5) Term

When we think of debt, some of us look at the purpose first, ie. mortgage debt, credit card debt, student loan, construction loan, refinancing, etc.

But then some of us consider the interest rate first and foremost, since that’s really what debt is all about.

What about the term, ie. how long you have to pay it back? And what about the conditions associated with the payback, and penalties?

And is the debt secured? Like a mortgage, is there a hard asset to which you can tie this debt?

Do you care about the amount? Will you suggest that taking on a $500,000 mortgage at 2.99%, for a $650,000 purchase, is more or less threatening than putting $10,000 on your VISA at a 29.99% rate?

And it’s that latter question where many of us would begin to disagree.

Everybody has his or her own idea of the purpose of debt, as well as a risk tolerance, and that “I need to be able to sleep at night” sanity-check, that really separates people in the example of the $500,000 mortgage versus the credit card balance.

You already know how I feel about the implementation of the “stress-test” in the mortgage market.

But let me tell you why.

Debt has always existed in society, and always will. And while debt exists, it’s affected by both rules that governments enact, as well as the desires of individuals borrowing.

The desires of individuals, can be affected by the rules that government enact.

And therefore the end result is the ability of individuals to borrow, in certain amounts, with certain terms.

While I’m not a huge fan of the government intervening in free markets, I think that if they have a mandate, it has to make sense.

The banking system in Canada has never been safer, and the lending space in which banks lend, has never been as tight.

And yet in society today, exist many individuals who take on far more debt, at far higher rates, than the paltry 2.99% that Joe Average pays down, secured against his home, with his 20% down payment.

Consumer debt is the worst kind of debt. It is the “bad” debt I speak of.

Take the average Canadian, and hand them a VISA with a $5,000 limit. What they do with that $5,000 in front of them will be affected by their level of financial literacy, and their level of self-control.

People don’t need new flat-screen televisions to replace their slightly-older, slightly-smaller flat-screen televisions. But with low levels of both financial literacy, and self-control, they seem to be buying these things in droves!

Should the government monitor the purchase of flat-screen televisions? Of course not.

But should the government be more involved with how credit card companies operate, how they lend, what their lending criteria is, and so forth?

Ordinarily, I’d say “no.” I really don’t care what other people do with their money.

But here’s my issue, folks. If the government is going to make it more difficult for buyers of real estate who have saved a 20% down payment, after paying taxes, to qualify for a loan, then why aren’t they heavily involved in all the other areas of consumer debt, that have far higher rates of interest, and far lighter lending standards?

Have you ever gone to a Leafs game, and seen the table and the banner for MBNA Mastercard, where signing up for a credit card gets you a free t-shirt? Ironically, one that you’ll probably never wear, because it has advertising on it?

Who’s fault is it when somebody signs up: the person offering the card and the t-shirt, or the person signing up?

If you said the latter, then I agree, whole-heartedly.

But what about when these companies set up shop on university campuses, targeting 18-year-olds with no financial literacy? Is it a different situation then?

What if a credit-card company specifically targeted the poorest, and least-sophisticated members of society, demographically and/or geographically, and set up shop right there, wherever “there” is? Is that a different situation?

Or is this all business as usual, whereby the government need-not take notice?

Have you ever heard those annoying radio ads for a credit agency where the voice on the radio keeps saying, “Approved”? It’s annoying, but catchy, and I’ve heard it so many times, that I know it’s for Alpine Credit.

They advertise that you’re automatically approved so long as you own your own home.

How many of the people listening understand the concept of “equity,” and that a $100,000 in cash sitting on your kitchen table, and a $500,000 house with a $400,000 mortgage, both represent the same thing?

How many people are going to Alpine Credit to accept worse lending terms than what is provided by their bank?

And who believes that if the bank won’t qualify you for a home equity loan, that a company advertising on the radio is going to do anything but rake you over the coals for that “loan for college tuition, or to start a business,” as their website advertises?

How regulated are those companies with their loan criteria? Where’s the upheaval over that?

What are the rates of interest, and the loan-to-value ratios, charged outside the “normal” lending sphere?

Sure, a bank might only loan 95% LTV. But other lenders will loan 100%. Or 120%. Or 150%.

Somewhere, there’s a guy selling used jewelry, who also loans money that is secured against your home, for an amount well above the property’s value – at absurd rates of interest.

Are you familiar with usury?

It’s the practice of making immoral monetary loans, often unethical, that are absurdly in favour of the lender, and seek to exploit the borrower.

Many countries have their own usury laws, and Canada is one of them.

Section 347 of the Canadian Criminal Code makes it a criminal offence to charge more than 60% interest per annum.

That’s absurd, right?

60%?

We were just talking about a 2.99% mortgage, and a 30% rate on a credit-card.

Now we’re talking about 60%?

Short-term loans have skirted the usury rules in Canada since their inception, and the government, while implementing new legislation in both 2006, and 2018, has really yet to do anything tangible about this problem.

“Problem,” if you see it that way, of course.

But if we’re going to call putting 20% down on a condo purchase without qualifying at a rate that’s 2% higher than the contract rate, a “problem,” then so is 14,000% effective annual interest.

Money Mart, Payday Loans, Cash Money – all of these cheque-cashing and short-term loan operations are charging criminal rates of interest, that are beyond comprehension.

The interest rate doesn’t surpass the 60% usury threshold.

But if you consider the additional fees, and annualize the amounts, we’re getting into the thousands of percent range.

And just think: before 2006 in Canada, there was nothing in the Canadian Criminal Code about the short-term loan industry!

In 2006, a class-action lawsuit against a short-term loan operator made it all the way to a provincial supreme court. Take a look at this:

On August 14, 2006, the Supreme Court of British Columbia issued its decision in a class action lawsuit against A OK Payday Loans. A OK charged its customers 21% interest, as well as a “processing” fee of C$9.50 for every $50.00 borrowed. In addition a “deferral” fee of $25.00 for every $100.00 was charged if a customer wanted to delay payment. The judge ruled that the processing and deferral fees were interest, and that A OK was charging its customers a criminal rate of interest. (Wikipedia)

That case caused each individual province to enact their own legislation dealing with short-term loans.

In 2016, the average payday loan in Ontario was $435 over 16 days.

It’s absolutely predatory, and the government, apparently, has set it straight.

Ontario enacted the Payday Loans Act in 2008, to limit the fees charged in loans in Ontario to $21 borrowed for a period of two weeks. The effective annual interest rate was 14,299%.

Effective January 1, 2017, the maximum total cost of borrowing for a payday loan was reduced to $18 per $100 advanced (7,383%).

Effective January 1, 2018, the maximum total cost of borrowing was again reduced to $15 per $100, or 3,724%.

So while you might suggest, “David, the government is doing something about these predatory lending practices,” I still point to the 3,724% rate, and compare it to the 2.99% rate on a 5-year mortgage – the latter of which the government has sought to make more difficult to obtain!

And the irony is, the very people in society today that the government is trying to help, are often the ones most taken advantage of.

My wife is a social worker, and many of her tenants receive government cheques every month for assistance. The problem is: many of the tenants don’t have bank accounts, as they are either turned down by the banks, don’t have the requisite identification, are mentally incapacitated and incapable of opening and operating an account, or in some cases, are just too goddam lazy.

So where do these people go to turn their government cheques into dollar bills?

You guessed it. Money Mart, Payday Loans, and Cash Money.

You would think if the government were giving away our tax dollars, they might do a better job ensuring it arrives, in whole, at its intended destination. But no. Every time a cheque is issued to one of these poor folks, 15% of it immediately goes to a cheque-cashing boutique.

So after discussing credit cards companies, private lenders, home-loan experts, short-term loan operators, what is my point?

Blog reader Ralph Cramdown wrote on Monday’s blog:

Here’s David, who plays a swashbuckling free marketeer whose government is too big and too intrusive 364 days a year. And today he says the government’s role is to serve and protect the people from those dastardly forces of supply and demand of consumer credit?

Totally fair.

I’m not a fan of big government, and I’m not a fan over over-regulating. I’m really not interested in any of this government intervention.

But my point is that if the government wants to do something about debt, then stepping into the safest, least-vulnerable space in the market – those with a 20% down payment, and making it harder for them to obtain a mortgage is not the way to go about it.

Remember the quote from Bill Morneau:

So where is Mr. Morneau “watching the level of household indebtedness?”

Blog reader Libertarian wrote on Monday’s blog:

Sadly, I believe that financial literacy will get even worse because Trudeau and Wynne have made it their mission to take care of every one. “Don’t worry about earning income, we’ll increase minimum wage. Don’t save for retirement, we’re expanding CPP. The gov’t will take care you at every step along the way. Just sit back and relax.” Yikes!!

It’s as though the words came directly from my mouth.

This government, at both levels, seems to be completely unwilling to rock any boats, to address any problems when they arise, but rather want to patch them up once they spiral out of control. In most cases, that means raising taxes, creating new taxes out of thin air, and refusing to earmark tax dollars for long-term projects that voters won’t “feel” during a given politician’s tenure (ie. a 25-year transit plan).

Don’t even get me started on the public education system in Canada, specifically Ontario, which I believe has become a race-to-the-bottom, placating the lowest common denominator, in attempts to provide a forced equality that goes against human nature. But, I will say that I have no idea why there isn’t a mandatory, province-wide Grade 12 course called “Personal Finance.” Probably because the people who set the curriculum don’t understand their own personal finances, and are too busy bubble-wrapping the playground.

I believe that if the government is going to tighten the safest lending space there is, then they should simultaneously be looking at predatory lending among recognized credit card companies, seriously consider instituting true usury laws for short-term loan providers like Quebec did, and making financial literacy the cornerstone of today’s high school education.

Otherwise, they’re guilty of selectively creating legislation, in part to show voters they’re “doing something” about a perceived problem (that they can’t fix), but primarily because it’s the lowest-hanging fruit.

Okay, you guys have heard enough from me on this.

And while this is a real estate blog, I pride myself on providing important, timely, and thought-provoking content, and this is exactly that.

On Friday, I’m going to sit down with my mortgage broker to get his thoughts on the matter. If you’re interested, email me with direct questions and we’ll have them answered.

The post Household Debt vs. Mortgage Debt: The Good, The Bad, & The Ugly appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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