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Urmi Desai in Leslieville, Toronto Neighbourhoods, Real Toronto
Walking to our Leslieville office this Sat, I stopped in to enjoy high tea at the Leslieville Crafternoon, a local crafts show and charity tea held at Queen East Presbyterian Church (at Queen East and Carlaw). The event was well organized by Leslieville's own boutique of handmade gems, Nathalie-Roze & Co.
Continue reading "Experienced in Leslieville: Crafternoon Tea + Holy Cow Warehouse Opening" »
David Larock in Mortgages and Finance
Borrowers who make financing flexibility their highest priority often wonder whether it is better to choose an open or a closed mortgage. This diverse group includes people who might want to sell their house, those considering a refinancing to fund a renovation before the end of their mortgage term, and anyone who plans to make large additional lump-sum payments on a regular basis. An open mortgage can be paid off in full, at any time, with no penalty, while a closed mortgage allows only limited penalty-free lump-sum payments and includes a penalty if it is repaid in full before the end of its term. For those borrowers who fear these penalties, an open mortgage is tempting. But is it the best option?
Surprisingly, in most cases a closed variable-rate mortgage is still a cheaper alternative because it comes with a much lower rate, has only small payout penalties, and will allow you to make lump-sum payments of at least 20% of your original mortgage balance each year with no penalty. In fact, using an open product, whether an open variable-rate mortgage or a line-of-credit loan, for anything other than very short-term financing will cost you a surprising amount of extra money. To illustrate, let’s look at the numbers to see why a closed-variable rate mortgage quickly becomes the cheaper option.
Continue reading "Open vs. Closed Mortgages: The Surprising Winner Is…" »
What a great time we had at Realosophy's Thank You party @ Leslieville Wanderlust last week. Thank you to our clients, neighbours, friends and gnome-hunters who visited us throughout the night.
It didn't take too many glasses of wine for our guests to grab a marker and take up our idea wall challenge: What is your wish for Toronto in 2011?
Better transit was the most desperate fervent wish for the city. There were (contradictory) calls for more bike lanes, more farmer's markets, cheaper food, gas and utilities and less dive bars. And it didn't take long for someone to want to undo the results of the recent mayoral race. A lone home buyer hoped for the housing market to correct by 30%, a sentiment greeted with disdain by everyone else. No schadenfreude here.
A couple of things struck me about the interesting and diverse crowd. One is that we are conscious. Granted it was only 6pm, but when it came to buying things, eating things and doing things, most of us were asking ourselves - why? Or at the very least, should I? Or even, do I have to? We've rejected a lot of prefab conclusions - church, state, economic truisms. In an update to what you may or may not do on a Sunday, we define ourselves largely by what we do or do not buy. It sets up a strange paradox, one that is evident in real estate and many other industries - we are more susceptible to marketing, but more discerning too.
And we are blurry again. When you scoot in and out of boxes, picking up what you like, you end up moving around, crossing sectors, changing lifestyles. I say again, as in back to the future, because historical figures have always struck me as unfocussed dilettantes gifted polymaths. Take Seneca - playwright, stock broker, civil servant, philosopher for the ages. Or Thomas Jefferson. Or Will Smith.
I left the public sector to pursue a full-time entrepreneurial vision (Realosophy!) this year and I've learned first-hand how challenging moving boxes can be. But not for the reason many assume: Aren't you going to hate focusing on making money instead of working for the greater good?
Continue reading "Realosophy Thank You Party Recap + Notes from an Entrepreneur" »
David Larock in Mortgages and Finance
If you originally secured a mortgage by going to your favourite Big Five bank for advice, then chances are very good that you signed up for a standard five-year fixed-rate mortgage (after all, it’s the banker’s favourite). Like most Canadians, when you signed your mortgage commitment you probably didn’t realize that you were also agreeing to pay a potentially huge penalty if you ever needed to break your contract early, and that’s because, at best, the customary wording is vague. Even experienced mortgage planners can only guess at what a borrower’s fixed-rate mortgage penalty will be, and like a moving target, the quoted amount often varies widely day-to-day and week-to-week. This is patently unfair to customers and (gulp!) more regulation is needed. In his March 2010 federal budget, Jim Flaherty, Canada’s Minster of Finance, promised to standardize mortgage penalties in Canada, and today’s post will explain why this issue requires his urgent attention.
To be clear, I am not against charging a penalty to borrowers who break their contract early. After all, if lenders don’t charge a penalty for early payouts, they still have to recover the extra costs and lost profitability somehow, and the only alternative is to raise interest rates for all borrowers (even those who stay until the end of their term). So it’s not the principle I object to, it’s the practice. Lenders use generic language to describe how prepayment penalties are calculated, and consequently, fixed-rate borrowers have no idea what their penalty will be until they call for a quote. The imprecise wording also gives lenders too much leeway, and since the method of calculation is not specifically disclosed when commitments are signed, borrowers have no way of comparing penalty policies between lenders. That’s a shame, because the difference in approaches used can easily translate into many thousands of dollars saved or lost.
Continue reading "Fixed-rate Mortgage Penalties: Paging Mr. Flaherty" »
Realosophy Team in Realosophy News
You're invited to Realosophy's thank you party @ Leslieville's Wanderlust holiday festival!
We've had a wonderful first 6 months on Queen East and we'd like to thank our clients, friends, family and neighbours.
Please join us this Thursday November 18th from 6pm to 10pm and enjoy festive drinks, food and good cheer as you explore our unique office space (and share your New Year hopes for Toronto on our idea wall). Our office is located at 1152 Queen Street East, just west of Jones.
And remember, it's a neighbourhood-wide evening of fun. Our friends at Parts Gallery next door will be featuring a new artist exhibition and there are plenty of exciting eats and treats throughout Leslieville's Wanderlust festival (click here for all Wanderlust info).
Come and see why Leslieville is the Toronto neighbourhood everyone is talking about!
Realosophy Realty Inc. Brokerage focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions. Email Realosophy
Urmi Desai in Real Toronto, Toronto Neighbourhoods
Who knew that the wonderful summer we enjoyed would lead to an extremely bitter fall? According to prominent voices in one of the most depressing Toronto mayoral races ever, we must live somewhere between the USSR and New Orleans.
Toronto does have problems - uninspiring leadership at all levels of government, the free fall that is the TTC, persistent issues of poverty and social isolation, violent quarrels re strollers in public places, the suspicious feeling that the organic greens you are overpaying for have been picked out of a Markham ditch and potential racial unrest due to a) the domination of overachievers at university and b) the threat of Lake Shore the reality show.
But we have been spared the complete jobs collapse the Americans are suffering through, along with severe austerity measures in Europe, we continue to be fairly peaceful for one of the most pluralistic cities on earth and a lot of our neigbourhoods are getting tastier while remaining artfully dodgy mixed (disclaimer: I think like this because I live in Leslieville).
To wit, the BBC/Lonely Planet travel website is featuring Toronto's diverse, neighbourhood-centric charms - see "This is Toronto Week". Speaking of pleasantly gritty Kensington, a gallant friend treated me to one last birthday dinner at the soon-to-be-gone neighbourhood gem, La Palette - a true Toronto original. And I discovered that at least one downtown hotel, Hotel Le Germain on Mercer, hasn't been completely airlifted in, thanks to their "Made in Toronto" tapas. Call it kitsch, but I love it.
Being furiously bitter need not keep you from being irrationally proud of your city - witness a New Yorker at the office water cooler to see this principle in action (I for one think the wrong George ran against Ford). So this winter, let's a) join one organization tackling a Toronto problem and work hard at it (a good way to mark the sacrifices we remember on Remembrance Day - be inspired by this Toronto example), b) remember that it's way worse in most other places on earth, c) be horrified at the idea of living anywhere else and d) get out and eat something tasty at whatever price point you can muster. May I suggest inexpensive Indian sweets at this most auspicious time of year?
Happy Diwali and Sal Mubarak!
Urmi Desai is editor of the Move Smartly blog and is responsible for Realosophy’s business development and marketing. Realosophy Realty Inc. Brokerage focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions. Email Urmi
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David Larock in Mortgages and Finance
Our fears of a Canadian housing bubble are understandably exacerbated by the US housing debacle that continues to unfold. We are inundated with daily headlines about frothy Canadian house prices, and these pronouncements seem to almost merge into one story with the grim reports emanating from south of the border. But are our worst bubble fears warranted? From my perspective, no. The US housing bubble was caused, and subsequently fueled, by lending conditions and practices that have been largely absent from Canada. Today’s post takes a closer look at the fundamental differences in the way our two countries have loaned mortgage money and attempts to explain why America’s bubble coincided with Canada’s mere blip.
Housing bubbles require a combination of several factors to form, but a large surplus of cheap and available capital is a fundamental ingredient. During the period from 2000 to 2006, America was flooded with capital as foreign direct investment was ploughed into the country, increasing from $1.1 trillion in 1999 to $2.2 trillion by 2006. At the same time, short-term interest rates dropped precipitously as the Federal funds rate fell from approximately 6% to 1% (whereas the Bank of Canada’s comparable overnight rate decreased only from 4.75% to 4.25% over the same period). These combined conditions lowered the yields on most investments and forced investors to take on more risk to maintain the returns to which they had become accustomed. Wall Street saw an opportunity to profit by putting this free-flowing capital into the hands of lenders (who had never enjoyed such low funding costs) and the only problem, it seemed, was finding enough borrowers for the money. By comparison, Canada also saw a substantial increase in foreign direct investment over the same period, but our interest rates were much more stable.
Continue reading "How the US Lent Its Way to a Housing Bubble and Why It Didn't Happen Here" »
