23 Jul

BULLYING ENDS HERE UPDATE FOR JULY 2019

General

Posted by: Darick Battaglia

‘Well that’s it for another school year….and what a year it was! I am full of joy writing this to you, and a little overwhelmed as well realizing just how effective our charity has become. Once again, we presented in EVERY province across Canada while also going to the US, England and Scotland.

The Scottish Government passed a motion to allow Bullying Ends Here speak in any of their school where a presentation is requested. This is HUGE because we are the first to do so. The main purpose for this was to allow the message around LGBT to be allowed with all of their students. In England, we went four times to speak to tens of thousands of students. The program is an absolute success with dozens of requests still to be actioned. The Metropolitan Police have been working hard to get our message out there and to have schools sign up. A partnership that is truly helping save many lives!

The numbers are what really shocked me. This past school year had me present to over 250,000 students. That brings our grand total to around 985,000 in only six years!!! This November is where we are on target to hit ONE MILLION. The number of emails/social media messages has remained around the 10% level and the total number of lives saved is 57. This past year also had us travel to very remote locations where residents can only be reached by flying in/out.

The information guide that we created for the start of this school year has now been included in many Government projects and school boards use it regularly. Our website had to be upgraded to handle the massive increase in traffic and we also opened the Bullying Ends Here Store. Please visit www.bullyingendshere.ca to see what we have available.

I also feel it important to share that this past school year also brought along many awards for me personally and the charity. The first being the Order of Merit. I also was honoured to receive the Sovereign Medal for Volunteers, Community Policing Award and the City of Calgary International Award. I am truly humbled by the recognition but continue to remain focused on the program and reaching as many as we can.

With the massive increase in requests for presentations and as we continue to grow, our expenses have shot up. This is where I hope you might be able to help. I am thinking a friendly challenge for all offices to partake in. We currently have a GoFundMe page setup to help raise the additional funds required to achieve historic proportions in the 2019/20 school year. The link for the page is at https://www.gofundme.com/f/bullying-ends-here-kindness-world-tour

I will put out the challenge that the office that raises the most money for Bullying Ends Here by August 15th will receive an incredible prize package including BEH wear, coffee cups and signed NHL memorabilia. Donations can be made either through the GoFundMe page, PayPal or directly through me. There are details on how to make a donation outside of GoFundMe on the BEH website on the ‘DONATIONS’ page.

We expect to reach another 300,000 youth this coming year, continue with our International efforts and strive to be one of the most effective anti-bullying program in Canada. Plans to add a primary grades presentation, online learning and a book detailing everything there is to know about bullying is all underway. Needless to say, we are walking the talk!

So, here we go. I leave this with you to do everything that you can to help the program grow and to help those that need it most. We all have a role to play. With a Cross-Canada Kindness Tour starting in Victoria in October leading me across the Country ending in Nfld. in March 2020, we can use all of the help that we can get. I have the locations listed on the website as well so feel free to reach out to book a presentation or two in your community.

As always, I’m here for any questions or thoughts that you may have. Never hesitate to message me. Please have a wonderful and safe summer season.

Your friend,
Tad

Courtesy of Tad Milmine, Founder, Bullying Ends Here.

24 May

3 THINGS YOU MAY NOT KNOW ABOUT CASH-BACK MORTGAGES

General

Posted by: Darick Battaglia

About twice a year, one of the big Canadian banks likes to run an advertising campaign for their cash back mortgages. These are mortgages usually with 5 year terms where you receive a certain percentage back in cash. The percentage varies from 1% to 5% in most cases. You can use these funds to build a fence, landscape, buy window coverings etc. The idea is to be able to pay for some things that you would not be able to as you put all your money into the down payment and closing costs and need some help to get started.

1- There are multiple lenders who have cash back mortgages. Don’t jump at the first one you see. They all have different terms and conditions.
2. You are really getting a loan on top of your mortgage. The interest rate is calculated so that by the end of the term you will have paid the lender back the money they gave you and a little bit extra. Sometimes this little bit extra may be twice as much as you got in cash back.
3 – The average cash back mortgage is a 5 year term. Most Canadians move every 30 months. Therefore when you break a cash back mortgage you have to pay a penalty as per usual but you also have to pay back a portion of the loan that they gave you. If you are 36 months into a 60 month mortgage, you have to pay them back 2 years’ worth or 40% of the cash back. Combined with the penalty this can be a hefty sum. In addition, there are some lenders who require you to pay back 100% of the cash back if you want to break the term.

Before signing for a cash back mortgage it’s better to discuss your needs with your local Dominion Lending Centres mortgage professional. They can advise you on cash backs, line of credit, Purchase plus Improvements or Flex Down mortgages which may be better for your situation.

Courtesy of David Cooke – AMP – DLC Jencor Mortgages in Calgary, AB.

9 May

SOLE PROPRIETORS

General

Posted by: Darick Battaglia

Sole proprietors are individuals who run their own business and do not have it set up as a corporation or partnership. The biggest difference between them and a corporation is that a sole proprietor does not have separation between their business and themselves. This means that when taxes are filed, all costs that are essential to the operation of the business are tax deductible on the individuals tax return. For example, an electrician who operates as a sole proprietor may earn $80,000 a year in income. However, costs such as materials, vehicle expenses, office space, or marketing (to name a few), are subtracted from the gross income- $80,000 in this case.

If those costs added up to $15,000 in a fiscal year, that sole proprietor really only earns $65,000 of income in the eyes of the lender. That is because the amount they are taxed on is the net income of $65,000 not the gross business income of $80,000. When submitting an application for a sole proprietor, you can either use a 2-year average of the net business income (income qualified) or state the income (stated files) based on history of earnings and the businesses write offs/expenses.

Majority of the time, we take the previous two years of income reported on line 236 of the T1 Generals, add them together, and divide that by two. If a business earned $80,000 of gross income and $65,000 of net income in year 1, and then $90,000 of gross income and $70,000 of net income in year 2, their income in the eyes of the lender is $67,500 ($65,000 + $70,000 = $135,000/2 = $67,500). There is an opportunity to “gross up” the 2-year average by 15%, but that requires a closer look at what the business has claimed as write offs for their business expenses. A gross up of 15% on $67,500 of income would equal $77,625.

Operating a business as a sole proprietor is a small cost when comparing it to a corporation, main reason being there is only one tax return prepared for both the business and the individual. The down side, an individual must pay income tax at the personal tax rate on the entire net income, whether they required all that income or not.

A corporation on the other hand, pays income tax at a different tax rate lower than the personal tax rate. That way, an individual only needs to take the income out of the corporation that they need, decreasing the amount of income tax they pay on their personal tax return (if money is left inside the corporation).

Courtesy of Ryan Oake – AMP -DLC Producers West Financial based in Langley, BC

7 May

CMHC CHANGES WILL HARM, NOT HELP, THE REAL ESTATE MARKET

General

Posted by: Darick Battaglia

A new program the federal government has announced to subsidize first-time homebuyers isn’t likely to help the market but more likely to harm it.

And not only is it not going to help out the market, but it’s not going to help out new homeowners.

In its recently announced budget, the government is essentially putting the weight of turning around the market on the backs of people just entering the housing market.

Part of the problem with the plan is that we only know what’s happening on the front end. People buying their first home will be eligible for a 5% top up from the from the Canada Mortgage and Housing Corporation (CMHC) to the total cost of a home. That amount increases to 10% for new constructions. To qualify, a household must have a combined income of less than $120,000, and the CMHC will only pick up a maximum of $480,000.

In exchange for this, the housing corporation gets an equity share in your home.

While we know what the government will give new homebuyers, we don’t know what it’s going to cost them down the road. Believe it or not, there’s been no announcement on what interest rates will be offered on the loans, nor what the terms of repayment would be. Complete costing isn’t expected until at least the fall, likely after the federal election.

But the real problem at the heart of this is the measures won’t do anything to help the affordability of homes. It’s not going to decrease the price of housing, and it’s just going to put the burden of propping up the market on the backs of new entrants.

In RBC’s most recent housing affordability report, released in March, the bank said a softer housing market was making houses slightly more affordable, as their national affordability index dropped 0.7 percentage points to 51.9%. (The lower the score, the more affordable homes are.)

“The fourth-quarter relief barely made a dent in Vancouver and Toronto where affordability remains at crisis levels. Owning a home in both of these markets, as well as in Victoria and increasingly Montreal, is a huge stretch for ordinary buyers,” RBC said in a press release.

In Montreal, the bank’s score is 44.5%, and RBC said the situation is not critical just yet.

“Housing affordability is eroding gradually to levels that could potentially pinch buyers—though so far they haven’t shown any sign of balking,” they said.

But with this new CMHC policy, that gradual erosion is likely to turn critical when this new wave of homebuyers crashes into the market.

One of the potential risks with this scenario is called overhang. Essentially, because a new policy has been announced, but hasn’t come into force yet, many Canadians who are likely to qualify are going to decide to put off their purchases. For now, un-bought supply will build up. But as soon as this policy goes into effect, these first-time buyers are going to suck up huge swathes of the housing market, and prices are going to skyrocket.

The new federal program is designed to lower the monthly mortgage payments of new homeowners by what amounts to a few hundred dollars a month. That can make a huge difference in the budget of a young family, but to do this, the government is putting their hands in the pockets of new homeowners for an unspecified amount, while at the same time risking further unaffordability in the housing market.

They could have had the same effect—lowering monthly payments—by re-introducing 30-year amortizations. Instead, they’ve kept the limit for CMHC-insured mortgages set to 25 years.

The shorter amortizations coupled with the continuation of the strict stress-testing rules, covered extensively in recent North East Mortgages blog posts, puts pressure on people on the lower end of the market. The stress test makes sure you can’t just handle the rate you’re signing on for, but makes sure you can handle an additional 2 percentage on top of it.

The rules the government has passed in the last few years have made it more difficult for new buyers and established buyers alike. They’ve also made it hard for people to refinance their more toxic debt, putting them into situations far riskier than the relative rarity of mortgage default.

Adjusting those rules would have a wider effect and give more people the step up they need to enter the housing market.

If the government really wanted to help with the affordability of homes, they have plenty of better options. This narrow measure is going to end up causing more harm than good.

Courtesy of Terry Kilako – AMP – North East Mortgages based in Ville Ste-Laurent, QC

24 Apr

STOP THE AGEIST STEREOTYPE

General

Posted by: Darick Battaglia

As a society, we are continually evolving in our acceptance of past stigmas. But while we are evolving, why is ageism still so prominent and accepted. And what can we do to shine a light on this issue?

Overrepresentation of an underrepresented cohort

A recent research study with Brainsights reveals that many of us don’t know how to properly address the Canadian 55+ demographic. In fact, since only 6% of the advertising workforce is 50+, this cohort is highly misinterpreted causing many people to completely miss the mark when advertising or communicating with them. But why is this important? Firstly, this demographic is continuing to grow and is now the largest demographic in Canada (with 11 million Canadians falling into this segment), secondly a Yale University research found that older people with positive perceptions of aging lived seven-and-a-half years longer than those with negative perceptions. Knowing how to properly engage with Canadians 55+ not only make us feel better about aging ourselves, it can also help us live longer.

We’ve heard you loud and clear

Brainsights, in partnership with HomeEquity Bank, analyzed the brain activity of more than 300 Canadians, with an equal split between Canadians under 55 and over 55. These individuals were then showed 117 pieces of video content, including ads targeted at Canadians 55+, news clips, movie trailers etc. Their brain waves were recorded, measuring levels of attention, emotional resonance, connection and encoding.
This research reveals four key actions we can all take to bust the age bias.

1) Old Age Stereotypes alienate Canadians 55+
The media portrays Canadians 55+ as frail and helpless. The reality is, Canadians are living longer and healthier lives than ever before, and Canadians over the age of 55 are just as lively and adventurous as someone in their 30s. We all need to start viewing this cohort as vibrant, educated and enthusiastic.
2) Don’t underestimate the power of nostalgia
Many of the communications targeted at the Canadian 55+ demographic tend to focus on what lies ahead. But research shows that nostalgia can be very powerful especially for Canadians 55+. In fact, ads tagged with nostalgia as a theme worked well overall for the 55+ segment, driving 11% greater attention, 9% greater emotional connection, and was 13% more memorable than the average. Canadians 55+ may be experiencing anxiety or stress of not knowing what lies ahead, but nostalgia can give a sense of comfort by providing certainty and familiarity.
3) Positive recollection
Canadians 55+ have an inherent desire to leave the world in a better place, and they do so through the transfer of knowledge to their children. Leaving a legacy for future generations leads to a 27% increase in attention, 42% increase in connection and 31% increase in encoding. Canadians 55+ like to feel like they made a difference in the world and specifically in the knowledge they leave behind to their children. It’s this type of content that they connect best with.
4) Digestible chunks can go a long way

Science proves that as we age, we require more cognitive resources to process information. So, while the 55+ group likes information, it needs to be presented in smaller chunks. This may require multiple conversations or giving older Canadians time to digest what they heard. Sometimes written in an email can be better than spoken on the phone, since it provides time to review and digest the message.

In summary
By measuring the brain waves of both Canadians over and under 55, we now understand how we can all improve the way we communicate. Through this research study, HomeEquity Bank has also raised awareness to emphasize the prevalence of ageism and that Canadians are not just looking to retire in silence, but rather, retirement is a time to live a vibrant and active lifestyle in the home they love!

Why this matters to us
HomeEquity Bank is a proud partner of Dominion Lending Centres. As a 100% Canadian company working for aging Canadians, HomeEquity Bank has been in business for over 30 years as advocates for the Canadian 55+ demographic. They have been working to not only help empower the 55+ demographic, but they are always at the forefront of pushing back against stereotypes of aging. They are passionate about our aging demographic and what is needed in order to live a well-deserved retirement. It is through this, that they commissioned this research with Brainsights to further understand our aging demographic.
HomeEquity Bank is a proud partner of CARP, a non-profit organization that advocates on behalf of Canadians as we age. Under this partnership, HomeEquity Bank is now officially endorsed and recommended by CARP as a trusted financial solution during your retirement years. As a special offer, CARP members can receive a cash rebate of up to $250 on a home appraisal. Contact your DLC mortgage broker to find out more about this special offer.

Courtesy of Sue Pimento
HomeEquity Bank – Vice President, Referred Sales, Eastern Canada

18 Apr

SPRING IS HERE, MAKE SURE YOU’RE COVERED BY FLOOD INSURANCE

General

Posted by: Darick Battaglia

The sun is coming out, and the snow is disappearing. You know what that means: it’s flood season.

And because flood season is upon us, it’s time to make sure you’re covered.

What you need to do is ask specific questions. When you call your insurance company, you should say ‘I want to know, do I have flood insurance, yes or no?’ And if the answer is yes, then ask ‘To what am I covered? How much am I covered?

It’s also important for you to ask for details on what is covered by your insurance plan. Things like whether acts of God or sewer backups are covered are important to know. Otherwise, you’re going to end up in a situation where a flood—knock on wood—and you’re not going to be covered.

There are also online resources that can give you an idea not just of what to do if there’s a flood, but where in your area may be prone to flooding.
You can look at provincial government websites, there’s a whole bunch of different places where you can go and get information about flood zones, and what you can do, and how to better prepare yourself and get yourself educated.
These government website often also offers advice on what to do to prepare yourself for flooding, as well as what to do once a flood has arrived.

We do more than just mortgages. We have a team that gets you from start to finish when purchasing your home—and this includes insurance.

Courtesy of Terry Kilakos – AMP – North East Mortgages based in Ville Ste-Laurent, QC

17 Apr

FLAT YIELD CURVE. BEST NEWS, OR BORROWER BEWARE?

General

Posted by: Darick Battaglia

A Flat Yield Curve
In our post entitled A Flat Yield Curve, we discussed the implications of a flat yield curve. At the time of the post, early summer 2018, rates were rising. The reverse seems now to be true, with rates recently softening, however the results are similar, a flat yield curve.

Typically a yield curve (returns one could expect on Government debt instruments) is positively sloped. That is to say that longer term yields, and by extension interest rates, are higher than shorter term yields and rates.

Why is this so?
Why? In simple terms, investors tying up their funds for an extended period, take on an extra element of risk, vs. short term investors. The risk is the uncertainty facing an investor. Economic conditions, namely monetary policy, inflation, and the general state of both the global and national economy, are difficult to predict in the short term, let alone for a period of years into the future. The result is a higher yield typically available to an investor for a longer term. Hence, a positive sloping yield curve.

At times over the past decade, the gap between short and long term yields have pushed as high as four percentage points, or 400 basis points in investment speak. Earlier this week, the difference was hovering around 10 basis points. Flat as a pancake.

What are the implications?
What are the implications of a flat yield curve, or even an inverted one (where long term yields dip below short term yields)? Quite possibly nothing at all, however inverted yield curves have historically occurred right before every single North American economic recession. Do they predict recessions, or do they simply accompany recessions? The jury is still out on that.

What are the implications for borrowers? Again, it likely depends on your investment strategy. If you are a buy and hold investor, perhaps consider going long with your debt. In absolute terms, rates are low by historical measures. You will not be penalized at today’s rate levels, for seeking a longer term for your debt.

Courtesy of Allan Jensen – AMP – DLC The Mortgage Source based in Ottawa, ON.

5 Apr

SOURCE OF FUNDS

General

Posted by: Darick Battaglia

Over the past several years, investigators have been working on an ongoing investigation relating to criminal money laundering in Canada. Looking at B.C. alone, billions of dollars have been laundered through B.C. casinos by criminal organizations and parked in high end B.C. real estate over the past decade or more.

With government citing limited resources and a lack of funds available to conduct a proper investigation, criminals have been able to manipulate and take advantage of the Canadian and B.C. legal system for years and it is now finally coming to light the impact it has had on our economy, most notably our real estate market.

One of the measures the government implemented several years ago to help crack down on this was sourcing the funds people were using for the down payment on their home purchases. Lenders are required by the federal and provincial government to collect a minimum of 30 days of transaction history for every bank account where money comes from to help complete a purchase on real estate. Most lenders are still requiring 90 days and they are also required, by the government, to source any large deposits above $1,000 that are unrelated to employment income.

If you have e-transfers and transfers between your own accounts within the 90 day period, the lender will require a 90 day history of the account in which funds were deposited from. That means, if you have a savings account reserved just for a down payment, but you put $1,000 a month in there from your chequing account, brought in $5,000 from a TFSA, and put in $3,000 in cash all before you wrote an offer on a home, a lender is going to want to see 90 day history of your savings, your chequing, and your TFSA account as well as an explanation on where the $3,000 cash came from.

Most people find this frustrating and rightfully so, you are handing over personal information over a long period of time. However, due to the extreme affect money laundering has had on our economy, these rules are likely not going anywhere. When preparing your down payment, be prepared that the lender will be required to collect a 90 day history of every account you have where money is coming from to help cover your down payment. This is not because the lender feels like it, this is because the government regulators who review the loans the banks give out need to see that the lender verified the money was legitimate.

Also, with your T4’s and Notice of Assessments usually going into lenders, if you are just starting a new job and were making $20,000 a year while in school and now have $150,000 in savings for your down payment a year out of school, the lender is allowed to ask for a full year history because your income does not justify the savings you have.

Be prepared! Lenders are required to source down payment funds and with more and more news coming out every month on money laundering, the rules may only get more rigid.

Courtesy of Ryan Oake – AMP – DLC Producers West Financial based in Langley, BC

2 Apr

WE’RE NOT JUST A MORTGAGE COMPANY

General

Posted by: Darick Battaglia

Well, it finally happened. I was meeting with a financial advisor today and they looked at my business card and asked “Why does it say Dominion Lending Centres and not Dominion Mortgage Company?”

I have been waiting 7 years to hear this question. I had an answer all ready for today. I said “that’s because we are not just a mortgage company, we’re a lending company. This provided me with a segue into a conversation about how we do equipment leasing, factoring and cash advances.

I meet plenty of small business owners who are trying to build their business and also buy a home. In one case, the business owner had opened a machine shop. He bought $100,000 or more of equipment. As he did not have a long established business, lenders insisted that he put the loans in his own name. As a result, he had lots of business loans outstanding and was still showing little income. As he had incorporated, we were able to free up his credit by having DLC Leasing purchase the equipment and he leased it back. This provided a good tax break his accountant liked and it freed up his personal credit, which I liked.

Long story short , Dominion Lending Centres is a small/ medium business owners best friend.
We can help you get into a house where other companies see obstacles. If you are in a situation like this, contact your local Dominion Lending Centres mortgage professional and get some help.

Courtesy of David Cooke – AMP – DLC Jencor Mortgages in Calgary, AB.

27 Mar

A BANK THAT MAY NOT BE FAMILIAR TO YOU

General

Posted by: Darick Battaglia

Quiz time! Who is the largest non-bank mortgage originator in Canada with over $100 billion dollars in mortgages under administration? Answer – First National Financial Corporation. If you’ve never heard of them before, don’t feel bad. The only way to get a First National mortgage is through the broker channel. They do not have any branches anywhere in Canada. How did First National become #1?
Service – First National are fast. They will accept your application, underwrite it and if approved you will get a response within 4 hours. The industry average is 24 hours. Mortgage brokers use First National for clients who have very good credit salaried income and need an approval or pre-approval quickly.

Another nice feature of First National is that they will provide pre-approvals. Many lenders do not want to spend the time and money to provide these but First Nat have always provided pre-approval that are underwritten. What this means is that an underwriter has reviewed your application and if everything in it is straight forward they foresee no problems with an approval for the specified amount of money.

Additionally, if the home you are purchasing is 5 years old or older, a First National mortgage may be for you. They offer Echelon Home System Warranty Program. This is a warranty on your electrical, heating and cooling systems as well as your plumbing. Most hot water tanks have a 6 year warranty. After that it can cost you $20 a month for a warranty program with your utility company. Echelon is free for the first 12 months and then it costs you only $17 a month. Any calls you make for repair work have a $50 call fee but everything else is covered by the warranty. Imagine your hot water tank breaking down on Sunday afternoon. In addition to paying a service call fee of probably $100 you would be paying time and a half for weekends. The tank alone could be $800+. It’s worth it.

Finally, First National introduced something new in fall 2018, a second mortgage. If you have a need for funds for renovations or something else substantial and you are part way through your First National mortgage term you can now obtain a second mortgage. No need to break your mortgage and incur penalties. When your first mortgage term ends, the second mortgage is rolled over into your first mortgage so you don’t have two different expiration dates for your mortgage. This is unheard of for a non-bank to do.
Remember, you can only get First National through the broker channel. Be sure to ask your Dominion Lending Centres mortgage professional if this would be a good mortgage for you.

Courtesy of David Cooke – AMP – DLC Jencor Mortgages in Calgary, AB.