Posted on 16. February 2010 01:54 by qjimmessner
Calgary, Alberta
Well here we are its half way through February 2010 and we survived the year 2009 much better than most doom sayers predicted! We are still alive and most of us still have groceries and homes to live in. But what is coming for the furture?
As of today they are predicating the Feds will bring in new borrowing rules for CMHC to try and cool the market. They feel we are booming too fast again! The FIRST TIME BUYERS are going to get hurt the most. They say one in 10 home owners cant afford a spike in interest rates and we know those will be coming; likely by mid summer!
The new rules although not announced yet are rumored to be some sort of test to see if Buyers can really be safe in buying and lowering the amoritization period from 35 to 30 years making monthly payments higher. There was talk of raising down payments from 5% to 7.5 or even 10% but I dont think that will happen. At least I hope not!
So what is happening and why are they doing this?
Well it seems that many Canadians dont feel they are in a recession and if it is over we are much too confident in our spending according to our government who is trying to protect us from us! They feel we are over our heads in many cases and in no doubt IM sure thats true in some cases. Again we all get painted with the same brush and the banks get richer! People will always buy homes, anyway they can! After all its the best way for the average "Joe" like you and I to build a "Nest Egg." Add to that its tax free wealth when we make a profit and pray they don't take that one away!
We are lucky to be Canadian no doubt. We do need to be protected from ourselves. Without rules many of us would own 10 rental properties when we can barely pay our own mortgage and raise a family. Real Estate is not for the faint of heart nor for someone who took a "weekend expert's course" or read a book! In the USA the American Dream crumbled. Too many people owed too much money! Too many Bankers (or their Brokers) lent too much money to too many people who couldnt afford the payments or the change in interest rates which all knew was coming but chose to ignore.
It brought down giants! It brought down crooks (yeah!!!!) but it almost collapsed the economy of the western world! Thats the bad part. The economy has too few rules and needs to be watched. Too many things were happening and no one agency or person was watching. No one knew what was coming.
The funny or should I say the sad part is that we all knew something was going to happen. We knew with Baby Boomers aging and downsizing that change was coming. Many were buying second homes and maxing out their equity on toys and beach properties in Mexico! We didnt know about the other problems that were hiding behind it all.
So whats the purpose of this BLOG?
BE SMART! DO NOT overextend yourself, even if the bank says it is ok to borrow it! That doesnt make it right. Even in todays tighter rules. Be careful. Think ahead. What would happen if you got hurt, lost your job, got sick, spouse died etc. Do you have it all looked after in each and every imaginable case? Most of us do not! What if we go back into double digit interest rates like the bad old days! Can you live through that without losing your home and going bankrupt? Can you make all your payments?
Too many people today worry only about the monthly payment. They do not think about the total debt or potetial change in interest rates and they will change!
At Jim Messner & Associates we look at a lot more than just buying or selling a home. We want to help you look at the big picture if you will let us. We have good Lenders on board our Team that will do the same. We have people that will help you budget and plan - do you need help with that? Most of us do from time to time. When is the last time you looked at or even compiled a family budget? Run it like its a business! That's my advice!
We have all been there. We have all made mistakes and thats good. We dont learn without mistakes but in particualr we do not learn unless we stop and look back at our mistakes and then devise a plan to correct our path for the future. Make a plan, make a path, review monthly and adjust. If you do not do this and if you do not write it down you are on a course for issues down the road. I can promise you that!
Stay in touch. We can offer you and your friends free advice and free direction. We manage several business networks as well so have plenty of good contacts if you need to speak with someone in a particualr area. We want to be your "one stop shopping housing Team." Not just Realtors. We can even help with furnaces!
Take care and thank you!
Jim Messner
Jim Messner & Associates
CIR REALTY
E-Mail: Homes@Teus.net
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