With the holidays just around the corner, many of us are already starting to fill up our social calendars and think about the coming month.

To help make your holidays even more special, and ensure you have the best party on the block, I have some tips:

1. Make a List: While you might not be hosting for 50 people this year, that doesn’t mean that preparations go out the window! The mark of a good holiday celebration is planning, planning, planning! Ideally, you will want to make a list of everything you need before you get started. From food to drinks to decor, having an idea of what you need in advance will make it much easier to get everything in one go.
    
2. Manage the Mood: To help create a cozy, holiday mood you might consider turning off your overheads and using candles to give off a warm glow and cozy scent. Music is another important factor; try mixing traditional holiday tunes with modern favourites to create the perfect feel.
    
3. Sweet and Simple Decor: When it comes to the holidays, there are endless options for decor. From traditional red and green to silver and gold or silver and blue, the best choice is one that fits your tastes. Even if you cannot host your entire neighbourhood, that doesn’t mean you can’t enjoy that holiday feeling! A few key pieces here and there, such as a large wreath and centrepiece for the table can go a long way.
    
4. Prep Food in Advance: When it comes to food, simple is best and whatever you can prep in advance is better. With a smaller invitee list, you can easily get away with simple finger foods. From shrimp or tuna rolls to spinach dip and bread to veggie trays or cheese and crackers, the options are endless and there are many options that don’t require hours and hours of prep time.
5. Send Out Invitations: If you are hosting a virtual gathering, make sure to send out invitations as soon as possible. This can be a simple e-mail to friends or family with a link to join in or a fun e-card!

This article is from the DLC December Newsletter

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Another Month, Another Dip In Housing

Statistics released today by the Canadian Real Estate Association (CREA) show home sales edged down in November. National home sales fell 3.3% between October and November, continuing the moderating sales trend that began last February on the precipice of unprecedented monetary policy tightening. Sales are down a whopping 39% from a year ago. The Bank of Canada has hiked their overnight policy rate by 400 bps, from 25 bps to 4.25%, triggering a whopping rise in mortgage rates. 

About 60% of all local markets saw lower sales in November, led by Greater Vancouver and the Fraser Valley, Edmonton, the Greater Toronto Area (GTA) and Montreal.

The actual (not seasonally adjusted) number of transactions in November 2022 came in 38.9% below a near-record for that month last year. It stood about 13% below the pre-COVID-19 10-year average for November sales (see chart below).

New Listings

Sellers remain on the sidelines as the number of newly listed homes edged down last month by 1.3%, declining 6.1% from a year ago. Most sellers are waiting for interest rates to fall, either because they expect a rebound in sellers or are unwilling to buy new properties themselves with mortgage rates so high.

While sales have swung wildly, new listing flows have remained relatively steady through the recent turbulence and are very much in line with pre-COVID norms. There’s still not a lot of forced selling, which can exacerbate a price correction.

New listings fell in slightly more than half of the local markets. Among the larger markets in Canada, month-over-month movements in new supply were generally small, the only exception being some more significant declines in the B.C. Lower Mainland and Okanagan regions.

In terms of monthly new supply, the bigger picture is listings are not flooding the market. With the one exception of 2019, November 2022 saw the fewest new listings for that month in 17 years.

With sales down month-over-month by a little more than new listings in November, the sales-to-new listings ratio fell to 49.9% compared to 50.9% in October. The ratio has remained close to around 50% since May. The long-term average for this measure is 55.1%.

Based on a comparison of the current sales-to-new listings ratio with long-term averages, about 70% of local markets are currently in balanced market territory.

There were 4.2 months of inventory on a national basis at the end of November 2022. This is close to where this measure was in the months leading up to the initial COVID-19 lockdowns and still nearly a full month below its long-term average.

Home Prices

The Aggregate Composite MLS® Home Price Index (HPI) edged down 1.4% month-over-month in November 2022, continuing the trend that began in the spring.

The Aggregate Composite MLS® HPI now sits about 11.5% below its peak level. Breaking that down regionally, the general trend is prices are down somewhat more than they are nationally in Ontario and parts of B.C. and down by less elsewhere. While prices have softened to some degree almost everywhere, Calgary, Regina and Saskatoon stand out as markets where home prices are barely off their peaks at all.

The table below shows the decline in MLS-HPI benchmark home prices in Canada and selected cities since prices peaked in March when the Bank of Canada began hiking interest rates. More details follow in the second table below. The most significant price dips are in the GTA and the GVA, where the price gains were spectacular during the COVID-shutdown.

Bottom Line
OSFI announced this morning that the minimum qualifying rate for uninsured mortgages at federally regulated financial institutions would remain unchanged. They will review Guideline B-20 next month, but don’t hold your breath for an easing of the stress test.

In other news, housing starts were little changed last month at 264,600 annualized units. This is a strong level of new construction; the year-to-date average is roughly 265,000 units. Combined with the record 275,000 new units started last year, we are in line for the most significant two-year wave of housing starts on record. On a per-capita basis, we’re starting 2023 with an unprecedented construction boom despite higher costs, labour shortages and much higher interest rates. 

Outlook   

The Bank of Canada is likely to raise the policy rate a couple of times by 25 bps in the first half of next year, pausing between rate hikes. They will not cut rates in 2023 even though the economy will post at least a mild contraction. 

2024 will be a recovery year but don’t expect the overnight rate to return to the pre-Covid level of 1.75%. Indeed, the new cycle low will likely be more like 2.5% assuming inflation continues to trend downward. Price growth will be much more subdued than during the rocking ten-year period before the pandemic. Still, the underlying fundamentals of rapid population growth, mainly from immigration, bode well for sustained growth going forward.

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Purpose

The purpose of this Advisory is to inform regulated entities of the federal government’s newly enacted Prohibition on the Purchase of Residential Property by Non-Canadians Act (“the Act”), which is set to come into force on January 1, 2023.

Overview of Changes

The Act prohibits individuals who are not Canadian citizens or permanent residents of Canada (collectively, “non-Canadians”) from purchasing residential property in Canada for a period of two years. The prohibition also applies to corporations that are not incorporated in Canada or are controlled by non-Canadians.

Additional details regarding the prohibition will be addressed in supporting regulations from the federal government, which are expected to be issued before January 1, 2023.

While the Act does not directly impact the provision of real estate services or mortgage lending, it does introduce restrictions to future agreements of purchase and sale of residential property that regulated entities should be aware of. The Act:

• Prohibits non-Canadians from directly or indirectly purchasing residential property in Canada for a period of two years, which includes purchases made through corporations, trusts, or other legal entities;
• Applies to residential property, which includes detached homes or similar buildings of one to three dwelling units as well as parts of buildings such as semi-detached houses, strata units, or other similar premises;
• Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in contravening the prohibition;
• Establishes that a contravention of the prohibition could result in a court-ordered sale of the residential property, which would result in the non-Canadian receiving no more than the purchase price paid for the property; and
• Sets out exemptions for certain classes of people such as: refugees, individuals who purchase residential property with their spouse or common-law partner (provided the spouse or common-law partner is eligible to purchase residential property), temporary residents in Canada who satisfy the prescribed conditions in the regulations, and other classes of persons set out in the regulations.

Considerations For Regulated Entities

Regulated entities should review the Act to ensure they are aware of who the prohibition applies to and how residential property is defined so they are able to advise and inform potential clients of the new restrictions on residential property sales. Regulated entities should be aware that once the Act is in force, any person or entity that “counsels, induces, aids or abets” a non-Canadian to purchase directly or indirectly any residential property, is guilty of an offence and is liable on summary conviction to a fine of not more than $10,000. Therefore, regulated entities should consider making reasonable inquiries to determine whether a buyer is a non-Canadian for the purposes of the Act before assisting with a transaction for residential property.

If regulated entities are unsure if a client, property, or transaction is captured by the Act, they should advise their client to seek legal advice before continuing to provide their services. Regulated entities that utilize standard-form contracts of purchase and sale may want to consider changing them to contain assurances from buyers that they are not a non-Canadian within the meaning of the Act.

Regulated entities should also review the supporting regulations once released to ensure they understand the exemptions, as well as the full scope and application of the prohibition.

Additional Information

To learn more, please refer to:

• The Prohibition on the Purchase of Residential Property by Non-Canadians Act;
• The Department of Finance Canada’s news release; and

 Canada Mortgage and Housing Corporation’s news release and FAQ.

This notice is courtesy of the BCFSA

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

What can homeowners expect to see as far as mortgage rates go in 2023?

No one is escaping the pain of higher interest rates. If you were in a fixed or variable mortgage and up for renewal, it will be at higher rates than you are used to paying. I feel there will still be interest rate hikes in 2023 and there are different options and strategies depending on the life stage and mortgage cycle. Lenders are working to look at new offerings to help Canadians. You are not in this alone.

The highest on the stress scale are those who are up for Mortgage Renewal this year. If you have a renewal upcoming, it’s critical to start the process early. If you have a renewal in the next 6-12 months, start consulting with an independent mortgage broker that can take your whole finances into consideration NOT just the mortgage. If you have debt outside your mortgage refinancing instead of renewing can save you hundreds or even thousands of dollars a month, and every 500/month in outside debt that you get rid of opens up qualification room (if you ever wish to move up the property ladder) increases monthly cashflow for you.

How Does This Increase Affect My Mortgage?

Anyone with a variable-rate mortgage, home equity line of credit (HELOC), or looking to renew their mortgage will immediately see their mortgage payments increase.

On a $500,000 mortgage amortized over 25 years, your monthly payments would be:

• An interest rate of 5.5% = $2,908.02/month
• An interest rate of 6.0% = $3109.33/month
• An interest rate of 6.5% = $3,349.12/month

It’s important to ensure that the lender you select moving forward (provided you qualify) does not have posted rates that will be used against you in IRD calculation when the market shifts and rates decline in upcoming years. If you are like 7/10 Canadians that will have a family change (divorce, new child, bonding families) we don’t have to look back far in history for “penalty woes” (penalties charged by big banks that financially disable borrowers to move forward with plans, and in some cases or eats their equity) because Canadians were unaware, they could have qualified for a better option. 

Remember any representative at any particular lender is a salesperson of their own product and has that bias when they are advising you. Canadians can not afford to make the costly mistake of looking only at the rate or being sold with a bias during these times.  

If the homeowner is over 55, they may want to consider a reverse mortgage, this is a mortgage that allows equity to make the payments (not stress tested like traditional mortgages) so it won’t impact their current cash flow. This can also clean the slate of any outside debts that have accumulated during these trying times. This solution can help parents gift funds to children who may need a lump sum if they hit their trigger rate within their mortgage and need to make a prepayment to assist with affordability. Parents are seeing it as an early inheritance while still keeping their assets and not impacting cash flow. The reverse mortgage is also another way parents are gifting down payments for those wanting to get into the market without impacting their cash flow.

Do you have any mortgage rate advice for buyers or sellers?

Sellers

If you will need a mortgage for your next move, don’t assume your mortgage is portable or just because you had or have an existing mortgage before that it will be easy to requalify for one.

It is a complete requalification based on your current credit and income. Qualifying rates are up to 7.5%-8% on average right now with this last hike in December and are expected to go higher with inflation nowhere near the 2% target. We have a long way to go from its current 6.9%. Meaning you need approx. 30-35k in annual income to qualify for 100k in the mortgage amount. With the spreads between fixed and variable right now, you qualify for the most with a fixed rate, whereas previously you qualified for more with a variable. The factors that contribute you your financial well-being are always changing so be prepared to adapt your strategy based on the current market. When you do sell and take some capital in hand, ensure you have every single penny working to your best advantage – i.e., setting up an emergency fund, TFSA, and RRSP if that benefits you.

Buyers

You do have opportunities as grim as the news may seem. Savings rates are at an all-time high, the highest they have been in decades, so if you are starting to make a plan to buy for say 500k in the next few years and you start a savings plan for 4 years setting aside $520/month for a down payment, today’s savings rates can accelerate that to reduce the amount of time in your plan. There is also a new FTHB account for 2023 that may help with this. 

You can also take advantage of a product called purchase plus improvements that in previous markets with everything moving so fast you simply did not have time to pursue. This is a mortgage where you get the home renovation money at the time of the mortgage that required pre-planning during the offer and subject removal period. This means buyers get more of what is on their wish list within 120 days of purchase. Those still living at home or that don’t need to be out of their rental can really benefit from this.

Purchasing with a reverse mortgage can give you the chance to buy while prices are lower and keep your home until the market picks back up and you are ready to sell it, you can even combine this with a presale purchase for some longer planning as well. Good for people who want to move and want to do so in the most strategic way to build and protect wealth.

Rates will come down, RENT THE RATE, not the house! This is why we say lender choice is so important. Rates will go down it’s just a matter of when. While real estate prices are down, that not might be the case for too long with nearly 1.5 million people expected to be immigrating to Canada over the next 3 years. 

How can Canadians prepare for next year regarding mortgage rates? 

Start early and get unbiased advice from an independent mortgage broker.

Review your budget frequently. Understand your payments will be based on current rates and budget accordingly. Take whichever rate and product suit your family. The answer of fixed or variable will be unique to your profile. Use a mortgage calculator frequently to ensure you understand what your payment would be on current rates this will help you hedge against inflation with your mortgage and decide if you are going to put money in savings short term to earn more to help your pre-payment go further to pre-pay your mortgage. Consider if an RRSP contribution will result in a tax refund to further help you pay down your mortgage to get ahead and use every resource out there to get ahead financially – have your dollar stretch for maximum financial benefit.

Choose a 5-year fixed-rate mortgage (with the right lender) – If you think inflation is going to be sticking around for a while or if your finances are tight, this would be the best choice.

Choose a 5-year variable rate mortgage – If you think that the BoC is finished raising their rates and that they might even go down sometime in 2023 or 2024, then this would be a good choice.

Why do we say this? 

Rate decisions are data-dependent and are based on circumstances as they happen. We have all already made decisions based on when Tiff Macklem came out in 2020 saying “rates will be low for a long time”, while this is the first time in history the BOC has lost money. The question then becomes: how long will they allow themselves to lose this much money?

It’s easy to see why you have to look inward and go with what works for you. While we can advise on different options, you as the borrower will have to make the final decision.

Lenders are in transition right now, they are being acquired and consolidated, some mortgages are insured behind the scenes and will allow you to stretch out the amortization to help with lower payments. Lenders are reviewing their book of business and redesigning solutions and products.

Ensure the provider you are working with can answer these simple questions for you to know you are aligned correctly to be best assisted, not only when you get a mortgage, but for the entire life cycle of having one.

What are mortgage rates based on and why?

The bond market and Bank of Canada. If they are not watching these items, understand their timings and correlation on how they impact rates, how can they possibly advise you?

What commitment do you have to manage my mortgage?

What if their internal review process helps you take advantage of changing markets? What is the trigger point for that? If there is no formal process here, run the other way or hang up the phone.

Will I be protected if I take a fixed rate? 

What inflation hedge strategy do they recommend and how frequently and how do they advise you on these items? Every time there is an increase or decrease in bonds or BoC or product change, you should be notified of the impact.

What strategy do you recommend and why?

Your strategy will have to change as change is constant. What is relevant today and what past experiences will you utilize to help me adapt to the current market? 

Different examples of why you select specific lenders over others and how you are proactive to reduce financial venerability with a plan that is personalized for you.

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Interest rates are headed up once again. The Bank of Canada announced it is hiking its trend-setting rate to 4.25 per cent — a rate that was just 0.25 per cent at the beginning of the year. As Emily Lazatin explains, this could have big impacts on any loans you may have.

Check out our interview on Global News to speak on this week’s Bank of Canada Announcement!

This article is courtesy of Global News.

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

The would-be buyer of a nearly $3 million home on Vancouver’s west side, who backed out of the purchase after learning B.C.’s foreign buyers tax would apply to her, has been ordered to forfeit her deposit.

Hongxia Zhang agreed to purchase the home on West 4th Avenue in Vancouver’s West Point Grey neighbourhood in March 2021, according to a B.C. Supreme Court decision issued Friday and posted online Monday.

The completion date for the purchase was scheduled for April 26, 2021, but a few days before then, Zhang’s lawyer asked to delay the sale until the buyer “became a permanent resident of Canada,” wrote Justice Carla L. Forth in her summary of the facts.

The seller declined to extend the completion date, and asked – through her lawyer – to recover the $150,000 deposit Zhang had paid in trust to her realtor, YVR International Realty.

Lawyers for the seller, Anne Nijola Ambroziewicz, made two more demands for the deposit before filing a civil lawsuit to recover it on Oct. 13, 2021.

In her defence, Zhang argued that she had been misled by her realtor and believed that the foreign buyers tax would not apply to her if she had been granted a Confirmation of Permanent Residence by Immigration, Refugees and Citizenship Canada.

“She claims she did not learn until after she paid the deposit, but before the completion date, that she needed to be in Canada before the completion date to avoid the foreign buyer tax,” Forth wrote in her decision.

“Ms. Zhang explained that since she was in Hong Kong, she had to apply for a travel exemption, which was refused by Immigration, Refugees and Citizenship Canada. As a result, she was not able to be in Canada at the time of the completion date.”

The would-be buyer argued that this constituted “force majeure,” a legal term referring to “an extraordinary event or circumstance beyond the control of the parties.” Essentially, she argued that the fact that she was not allowed to come to Canada made it impossible for her to complete the contract without an extension.

Forth rejected this argument, however, noting that there was no force majeure clause in the contract. The judge also noted that Zhang’s alternative argument – that the contract was “frustrated” by her inability to move to Canada – did not hold up.

For the legal principle of frustration to come into play, Forth wrote, “there must be a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for.”

“The application of the foreign buyer tax to the transaction did not alter the ‘nature or purpose’ of Ms. Zhang’s contractual obligation,” the judge wrote. “While it did make the contract more expensive for Ms. Zhang, it did not render the contract ‘radically different’ from what it would have been had the tax not applied.”

Forth ordered Zhang to forfeit her deposit and ordered YVR International Realty to pay it, and the interest it has accrued while being held in trust, to Ambroziewicz. The judge also ordered Zhang to pay the plaintiff’s legal costs.

The loss of the $150,000 deposit still amounts to substantially less than Zhang would have owed under the foreign buyers tax had she completed her purchase. Homes purchased by foreigners in Metro Vancouver are subject to an additional 20 per cent property transfer tax, which would have amounted to $590,000 in Zhang’s case.

This article is courtesy of CTV News

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

The Bank of Canada Hiked Rates The Full 50 BPS

The Governing Council of the Bank of Canada raised its target for the overnight policy rate by 50 basis points today to 4.25% and signalled that the Council would “consider whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target.” This is more dovish language than in earlier actions where they asserted that rates would need to rise further. Some have interpreted this new press release to imply that the Bank of Canada will now pause or pivot. I disagree.

I expect there will be additional rate hikes next year, but they will be more measured and not on every decision date. I also feel that the Bank will refrain from cutting the policy rate until 2024.

The Bank told us today that the “longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.”  CPI inflation remained at 6.9% in October, “with many of the goods and services Canadians regularly buy showing large price increases. Measures of core inflation remain around 5%. Three-month rates of change in core inflation have come down, an early indicator that price pressures may be losing momentum. However, inflation is still too high, and short-term inflation expectations remain elevated.”

The economy remains in excess demand, and the labour market is very tight. The jobless rate in November fell to 5.1%, and job vacancies increased in September. Wage inflation came in at 5.6% y/y in November for the second consecutive month, marking six straight months of wage inflation above 5%. While headline and core inflation have moderated from their recent peaks, they exceed the 2% target by a large measure. 

The Bank will monitor incoming data, especially regarding the overheated labour market where the jobless rate is at historic lows. Housing has slowed sharply in recent months, but as long as labour markets are tight, a slowdown in other sectors will be muted. The Bank now says it expects the economy “to stall” in the current quarter and the first half of next year.

Bottom Line

This will likely be the last oversized rate hike this cycle. The Governing Council next meets on January 25. Whether they raise rates will be data-dependent. If they do, it will likely be by 25 bps. Even if they pause at that meeting, it does not rule out additional moves later in the year if excess demand persists. I expect further monetary tightening, the continued bear market in equities, and a further correction in house prices. 

Canadian benchmark home prices are already down nearly 10% nationwide. Several chartered banks told us this week that more than 25% of the remaining amortizations for their residential mortgages are 35 years and more. At renewal, these institutions expect to grant mortgages amortized at 25 years, which implies a substantial rise in monthly payments. That may well be three or four years away, but clearly, many households could be pinched unless mortgage rates plunge in the interim. I do not see the policy rate falling to its pre-Covid level of 1.75% over that period because inflation back then was less than 2%, an improbable circumstance as we advance. Although supply constraints may be easing, globalization has peaked. Semiconductors produced in the US will not be as cheap, and many rents, prices, and wages will be very sticky

This article is courtesy of the Sherry Cooper Assoc.

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

With the recent inflation and rising prices occurring across the country, it is time to take control of your finances. One of the quickest ways to understand where your money is going and where you can make changes, is to create a monthly budget.

This will help you get a snapshot of your income compared to your spending, and provides an avenue to review all of your outgoing costs and helps you make changes to increase your monthly cashflow – or just feel less stressed!

Step 1: Calculate Your Income
The very first step to creating any budget is determining your income – knowing exactly how much money you bring in is important to understanding what you have available to spend. Remember to focus on NET INCOME versus gross salary, as budgeting for more than you can afford will lead to overspending.

Step 2: Track Your Spending
Once you have determined your income, you will want to take a look at your spending. Reviewing and categorizing all your monthly bills can help you breakdown exactly where your money goes and make some priorities to mark where changes can be made. To start, first list out your fixed expenses – these are things like car payments, loans, rent or mortgage costs that do not change on a monthly basis. Next, you will want to take a look at your variable expenses – things like groceries, gas, entertainment, etc. and determine your average spend. This is typically the area where people are able to cut back.

Step 3: Set Realistic Goals
Realistic goals are vital for long-lasting financial health. It is important to determine what you cannot live without and where you can cut costs or scale back on spending. Ideally, when it comes to your monthly budget, you want to consider the 50/30/20 rule, which applies the following:

• 50% of your spending is for NEEDS such as rent or mortgage payments, car payments, utilities and groceries
• 30% of your income goes to WANTS such as shopping, vacations, streaming services, etc.
• 20% of your income goes to SAVINGS OR DEBT such as emergency funds, retirement, child’s education and/or credit card payments

Step 4: Make a Plan
Once you have your goals set, you can now make a plan to tackle your financial position and ensure a healthy cashflow each month. For some, setting realistic spending limits for each category works well. For others, taking a look at the importance of their expenses and re-prioritizing can free up funds.

Step 5: Adjust Your Spending
Now that you have determined how much money you bring in per month and what you spend it on, you can take a look at adjusting your spending to ensure you remain on budget. Taking a realistic look at your wants is a great place to cut out frivolous spending beyond a reasonable amount. This is also a great time to review your fixed expenses. Perhaps you can save money by getting a better interest rate on your mortgage or changing the payment schedule for your loan. Be sure to connect with a me before making any changes to your mortgage!

Step 6: Stay on Track
Tracking your budget on a monthly basis is important to catch any changes in your spending habits. As well, it is a good idea to conduct an annual review and take into account any increase in expenses or wages that may require shifts in your overall plan.

As well, our team has associates that can sit down and help you with a budget analysis. If you would like an introduction, feel free to reach out to our team at angela@countoncalla.ca.

Remember: A healthy budget is key to financial freedom and comfort.

This article is from the DLC December newsletter.

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

TORONTO–(BUSINESS WIRE)–Home Capital Group Inc. (“Home Capital” or the “Company”) (TSX: HCG) today announced that it has entered into a definitive agreement (the “Arrangement Agreement”) to be acquired by a wholly-owned subsidiary (the “Purchaser”) of Smith Financial Corporation (“SFC”), a company controlled by Stephen Smith. Under the terms of the Arrangement Agreement, subject to shareholder and other customary approvals, the Purchaser will acquire the issued and outstanding common shares of Home Capital that SFC does not already own for $44.00 in cash per share (the “Purchase Price”), subject to increase as described below (the “Transaction”).

The Purchase Price represents a 63% premium to the closing price, and a 72% premium to the volume weighted average trading price for the 20 days ending, on November 18, 2022 on the Toronto Stock Exchange. The Transaction values the equity of the Company at approximately $1.7 billion.

Alan Hibben, Chair of the Board of Directors of Home Capital, commented “The Board, together with our financial and legal advisors, conducted a thorough review of the proposal from SFC and concluded that the Transaction is in the best interests of the Company and fair, from a financial point of view, to shareholders. We are pleased to have reached an agreement that provides shareholders with compelling and certain value in the form of an all-cash offer.”

Yousry Bissada, President and CEO of the Company, added, “This Transaction represents tangible recognition of the value and strength of our organization. We look forward to this exciting new chapter for Home Capital.”

“With its talented workforce, diversified presence across Canada, trusted positions as a lender and deposit-taker and 36-year operating history, Home Capital is a strategic asset,” said Mr. Smith. “Having followed the development of the business for three decades, I can attest to Home Capital’s strong partnerships with mortgage brokers and great customer relationships. I’m also impressed with the direction the Company has taken to build quality assets and enduring advantages in its chosen industry segments. I look forward to owning another business with a bright future.”

Transaction Details

The Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of 66 2/3% of the votes cast by Home Capital shareholders at a special meeting. In addition, the Transaction is subject to the receipt of court approval, regulatory approvals and other customary closing conditions for transactions of this nature. The Transaction is not subject to a financing condition and SFC, which currently owns approximately 9.1% of the issued and outstanding common shares of the Company, has provided a full and unconditional guarantee in favor of Home Capital with respect to the obligations of the Purchaser under the Arrangement Agreement.

The Arrangement Agreement includes a go-shop period extending until December 30, 2022 (the “Go-Shop Period”), during which Home Capital, with the assistance of its financial advisors, will be permitted to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring the Company. Following expiry of the Go-Shop Period, the Company will be subject to customary non-solicitation covenants with “fiduciary out” provisions. If, subject to a “right to match” in favour of the Purchaser, the Company terminates the Arrangement Agreement to accept a Superior Proposal (as defined in the Arrangement Agreement) during, or within five business days following the expiry of, the Go-Shop Period, a $25 million termination fee is payable by the Company to the Purchaser. If, subject to a “right to match” in favour of the Purchaser, the Company terminates the Arrangement Agreement to accept a Superior Proposal more than five business days after the expiry of the Go-Shop Period, a $50 million termination fee is payable by the Company to the Purchaser. There can be no assurance that a Superior Proposal will be made as a result of the go-shop process or otherwise.

The Transaction is subject to the receipt of regulatory approvals under the Bank Act (Canada), the Trust and Loan Companies Act (Canada) and the Competition Act (Canada). A reverse termination fee of $60 million is payable by the Purchaser to the Company if the required regulatory approvals are not obtained on or before the outside date specified in the Arrangement Agreement, currently November 20, 2023, but which may be extended by up to an additional 90 days in certain circumstances.

The Transaction is expected to close in mid-2023. If the Transaction closes on or after May 20, 2023, the Purchase Price will be increased by an amount equal to $0.00273973 per share in cash per day up to and including the day prior to the closing of the Arrangement (equivalent to approximately $0.25 per share for every three-month delay beyond May 20, 2023).

Home Capital intends to continue paying its regular quarterly cash dividends of $0.15 per share in the ordinary course.

The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be filed on SEDAR at www.sedar.com. Home Capital will mail a management information circular to its shareholders in connection with the special meeting to consider and vote on the Transaction, a copy of which will also be filed on SEDAR at www.sedar.com.

Board Recommendation and Fairness Opinions

Home Capital’s board of directors unanimously approved the Arrangement Agreement and, in consultation with its financial and legal advisors, has determined that the Transaction is in the best interest of Home Capital and is fair to its shareholders. The board unanimously recommends that Home Capital shareholders vote in favour of the Transaction. Home Capital’s directors and senior officers have entered into voting support agreements with the Purchaser pursuant to which, among other things, they have agreed to vote all of the common shares owned or controlled by them in favour of the Transaction.

Each of BMO Capital Markets, TD Securities and Deloitte LLP has provided an opinion to the board that, as of the date thereof and subject to the various assumptions, limitations and qualifications set forth therein, the consideration to be received by the shareholders of Home Capital, other than the Purchaser and its affiliates, pursuant to the Transaction is fair, from a financial point of view, to such shareholders.

Advisors

BMO Capital Markets and TD Securities are acting as Home Capital’s financial advisors and Deloitte LLP, as independent financial advisor, has provided a fairness opinion to Home Capital’s board of directors. Home Capital’s legal advisors are Torys LLP.

RBC Capital Markets is acting as financial advisor to SFC and the Purchaser and their legal advisors are Stikeman Elliott LLP.

This article is courtesy of Business Wire

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

In an increasingly complex world, the Financial Post should be the first place you look for answers. Our FP Answers initiative puts readers in the driver’s seat: you submit questions and our reporters find answers not just for you, but for all our readers. Today, we answer a question about the Bank of Canada‘s balance sheet.

Watch the entire segment on the Financial Post

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog.