I haven’t talked much about my involvement with my local Business Improvement Area on The Danforth. In January 2011 I was elected by my fellow business counter parts on The Danforth to sit on the Board of Directors as Treasurer for the BIA and most recently I have also assumed the roll as Co-Chair. A Business Improvement Area (BIA) is an association of business people within a specified district who join together, with official approval of the City, in a self-help program aimed at stimulating local business. BIAs serve as an economic and social anchor for the surrounding neighbourhood and help to stabilize and add vitality to the local community.

As part of our role in the local community we have initiated a series of events called The Danforth Experience which are aimed at showing Toronto that there is more to The Danforth than the monolithic Taste Of The Danforth event held every August.  The next event is our exciting Holiday Cheer Event being held this Saturday, December the 3rd from 2pm-5:30pm. Our Holiday Cheer event is designed to encourage visitors to come to our area for an afternoon of holiday shopping, eating, and sampling wines in each of our participating businesses.  The Danforth BIA will sell Holiday Cheer passports for the low price of $5.00.  Each passport allows our guests to sample a variety of Churchill Cellars wines being offered at each location. Yours truly will be stationed at the passport booth so come say hello! The booth will be located under the canopy of the newly renovated historic Danforth Music Hall which is also opening its doors for the first time this Saturday.

Looking forward to seeing you all on the Danforth!

The $5.00 All Access ticket allows shoppers to enjoy a glass of holiday cheer and festive nibbles while wrapping up their gift lists at the following Danforth Experience Toast to the Holidays businesses:

La Di Da, 128 Danforth Ave.
The Danforth Music Hall, 147 Danforth Ave (special open house from 2pm to 3pm)
Dough Bakeshop, 173 Danforth Ave.
FRESH Floral Creations, 175 B Danforth Ave.
Factory Girl Restaurant, 193 Danforth Ave.
Fermentations, 201 Danforth Ave.
The Friendly Butcher, 207 Danforth Ave.
Parade, 261 Danforth Ave.
The Clay Room, 279 Danforth Ave.
Fab Baby Gear, 286 Danforth Ave.
Social Butterfly, 315 Danforth Ave.
The Second Cup, 355 Danforth Ave. – Specially for the Kids with Riverdale Share Concert carolers, hot chocolate samples and a visit with Santa.

For more than 20 years our office has been located on the Danforth, an area of the city best known for it’s Greek cuisine and culture.  Although the Greek influence in the neighbourhood has started to fade in recent years, some old Greek families and businesses hold on to the traditions of a homeland that is now the epicenter of a global economic earthquake whose tremors are being felt the world around.

Events in Europe are unfolding like any great drama with twists and turns in the plot. The story began in Greece and the first twist came when  Greek prime minister Papandreou put forward a referendum on proposed austerity measures. Without skipping a beat the plot thickened in Italy with the resignation of Mr. Bunga Bunga himself Berlusconi. Just this morning I heard of Portugal’s largest union going on strike over austerity measures in that country.

As a mortgage broker I often see things as a question of borrowers and lenders. Countries much like individuals can borrow money and incur debt. Typically we express the total debt of a country as a percentage of national GDP as one way of looking at borrowing levels within the context of a country’s ability to repay their debt. Canada’s Debt to GDP ratio is currently 83%. The United States of America’s ratio is 98% and according the ECB Greece’s debt represents  156% of their GDP. (Wikipedia) To put this into context when applying for a mortgage a bank will approve a maximum loan amount using 44% of a borrower’s gross annual income to cover payments associated with housing(taxes, mortgage, condo fees etc) and all other debts and obligations, such as car loans and credit cards.

Obviously it is ridiculous to compare a country’s sovereign debt with personal debt but it’s interesting to observe that the fall out of spending more than one earns whether its on a national or personal level leads to a crash.  On a personal level living beyond your means for an extended period of time will eventually lead to some form of crisis whether it’s bankruptcy, marital breakup or any other forms of self destruction. In the case of national debt we observe massive demonstrations, riots, strikes and political fallouts which are unproductive and can cause long periods of recession.

So if Greece walked in to my office located on the Danforth (seems like the most logical place for Greece to go shopping for a mortgage) what would I tell her? Obviously she wouldn’t get far with a mortgage application but what advice could be given? In our consumption driven society where credit is so readily available how does one avoid living beyond their means? Perhaps the best remedy is to learn to live in a place of sufficiency. We are so often driven by the need to fill the void of something that is lacking in our lives, more money,  more cars, more clothes, more electronics, more toys, more vacations, more stuff we don’t really need. But if we were to stop to appreciate what we already have, we may discover life provides us with an abundance of what we really need to live within our means.

Here is a little video that I find hilarious regarding the Greek bailout. Enjoy!

Click here to view the embedded video.

Mortgage interest rates have increased this week over last week due to an increase in bond yields. While mortgage rates have jumped about 20 points they still remain at all time lows. Contact a Toronto mortgage broker like myself to get yourself the best rates available.

Click here to view the embedded video.

2.65% – 1 Year Fixed

3.49% – 3 Year Fixed

3.59% – 5 Year Fixed (quick close Dec 31sh)

3.69% – 5 Year Fixed (120 day ratehold)

P-.75   3 Year Variable (2.25%)

P-.75   5 Year Variable (2.25%)

Prime Rate is currently 3.00%.

Bank of Canada Qualifying rate 5.44%

NOTE: Rates are subject to change without warning at the lender’s discretion.

Last week I went to one of my favorite local coffee shops, Si Espresso Bar on Broadview at Danforth. My friend and owner Egidio (“Edge” for short) served me up one of his authentic Italian espresso shots to kick start my day as the warm morning sun shone through the large front windows and the sounds of the Danforth coming to life on a hot August morning drifted through the door.

As I was chatting with Edge about futbol and the after math of the World Cup, two suits walked in from the local bank branch one of which was the mortgage/investment/insurance/retirement/analyst specialist. Jack of many trades.  The conversation naturally evolved into a chat about rates and business.

As we continued I realized that subtly he was selling me on switching banks. I began to acutely pay attention to what this gentleman was saying and offering.

The gist of his spiel was “switch to our bank and I’ll offer you a credit card with a $20,000 limit and  x thousand travel reward miles and zero interest for the first 6 months.” For an instant his banter was appealing. Then, I snapped out of it and realized what he was actually offering. An opportunity and the temptation to put myself $20,000 in debt and enslave myself to the bank. Thanks but no thanks.

After politely declining his offer I went back to my office thinking of the irony.  Canadians love and trust their banks, and in all fairness they have served our country well as we keep on getting reminded in the media when comparing Canada to our neighbours down south. However, on a personal finance level your banker isn’t there to help you attain financial freedom. That would be bad for bank business. They are there always dangling that carrot of more credit for a society that is addicted to credit as shown by our national saving rate.

I meet borrowers everyday who are over their heads with consumer debt. Take this as a caveat the next time your banker leans in a little closer and wants to make you a special offer.

All signs are pointing to lower fixed rate mortgages again for the 3rd time this year. Bond yields are low and as a result we are seeing fixed rate mortgage prices dropping just a little bit further this week. The Bank of Canada has also dropped its benchmark qualifying rate for high ratio mortgages by 0.10%.

As a mortgage broker I get paid a steady finders fee from the lender. It doesn’t matter which lender we go to, the fees are similar so there is no incentive to take you to one lender over another. The only incentive I have is to give you honest open advice to make sure that you tell your friends and family about your positive experience. Send me a quick e-mail to get the ball rolling!

2.70% – 1 Year Fixed

3.49% – 3 Year Fixed

4.09% – 5 Year Fixed

3.13% – Merix 50/50 Mortgage (Fixed/Variable hybrid)

P-.65   3 Year Variable

P-.60   5 Year Variable

Prime Rate is currently 2.50%.

Bench Mark Qualifying rate is 5.89% (Used to qualify high ratio mortgages)

NOTE: Rates are subject to change without warning at the lender’s discretion.

Click here to view the embedded video.

I’ve recently picked up the classic novel The Foutainhead by Ayn Rand (1943). Reading it this afternoon I came across an unusually insightful quote by one of the lesser characters in the book; Kent Lansing.

“When facing society, the person most concerned, the person who is to do the most and contribute the most, has the least to say. It’s taken for granted that they have no voice and reasons they could offer are rejected in advance as prejudiced – since no speech is ever considered , but only the speaker. It’s so much easier to pass judgment on a person than on an idea. “

The context of the quote was to express how Lansing was going to sell his conservative board of directors on selecting the protagonist of the novel Howard Roark as the architect for their mega Manhattan hotel.  Roark is a very risque, non traditional architect who is a rebel and individualist.

The quote got me thinking on how business decisions are made and specifically decisions to select a mortgage broker over the bank. Could it be that not everyone uses a mortgage broker over their bank because its easier to pass judgment on the individual rather than the idea of the bank as an institution? A good mortgage broker is better educated, has only your interest to serve, is highly specialized in his or her area, can offer better guidance, and the service doesn’t cost a borrower anything and yet approximately only 35% of mortgages in Canada are serviced by brokers.

Highly philosophical question for a mortgage blog! Especially for a Saturday… but feel free to add your 2 cents! If not at the very least add the Fountainhead to your to read list.

In a complete U-turn from the attitude and expectations of last week, one of our lender partners Merix Financial has announced a slew of competitive rate cuts. The mortgage interest rates have come down and I am happy to be able to offer you the following:

-Fixed 5 year 3.75% (for closings before Feb 23rd, 2010 only)**

-3 year variable rate Prime minus 0.30 (1.95% effective rate)**(must close within 30 days)

This will no doubt give the market legs and it will be interesting to see how the winter will play itself out. If you are in the market and would like to explore what options are available for you and if you qualify for these rates please feel free to contact me.

Chris Molder – Son Of A Broker

Licensed by the Financial Services Commission of Ontario under Lic#M08010066

**Rates are subject to change without notice and are subject to borrower’s qualifications.

Its not always about boring interest rates and mortgage stuff! Meet my neighbours downstairs. Dough Bakery opened autumn 2009 and ever since then the smell of freshly baked bread has filled my office driving me crazy when I’m hungry. Co-owner Benita talks about the concept, the menu and their amazing refurbished authentic espresso machine.

Click here to view the embedded video.