Tips on How to Reduce your Heating Cost this Winter

General Pulkit Narang 30 Dec

With winters right around the corner, here are some of the tips to help lower your heating cost and have an enjoyable “stress-free” winters ☃️

• Inspect your heat source
• Check your fireplace
• Manage your thermostat
• Close the door
• Be mindful of drafts

Please read below article to help reduce heating costs this year by following simple steps:

5 Tips to Reduce Heating Costs.

When it comes to the winter season, it can be easy to go overboard when it comes to heating – but there is a better way! With a little awareness – and the right preparation – heating your home this winter won’t have to cost you a fortune. To help you save, we have put together a few helpful tips to reduce heating costs:

  1. Inspect Your Heat Sources – Regardless of whether you rely on a fireplace, gas or baseboard heating, it is always a good idea to have all heat sources inspected for efficiency.
  1. Check Your Fireplace – It is recommended to keep your fireplace damper closed, unless there is a fire burning. Otherwise, it is the same as having your window wide-open during the winter! For those of you with a fireplace you never use, now might be a good time to plug and seal the chimney to keep warm air from escaping.
  1. Manage Your Thermostat – As tempting as it is to turn your heat all the way up in the winter, proper thermostat management will help you save costs in the long run. A thermostat with a timer is a great option to help you save this winter. Turn it on earlier so the room heats up in time for use, instead of cranking the heat when you need to get warm quickly and have it turn off 30 minutes before bed or before leaving the home. If you find you are chilly at night, a safely positioned space heater and closed door is a far more inexpensive choice.
  1. Close The Door – To keep your heating system from working too hard, close doors when rooms are not in use. This prevents heat transfer in and out of vacant rooms, and will ensure the space you’re currently using remains warm and cozy.
  1. Be Mindful of Drafts – Checking for drafts is another important way to reduce heating costs. If you notice any issues, using a weatherstrip or caulking to seal doors and windows is a relatively inexpensive fix that can have a huge savings impact on your heating bill.

Written by our DLC Marketing Team

Let’s Get You Pre-Approved Today!!!

General Pulkit Narang 23 Dec

Pre-Approvals 🤩

Here are 3 advantages of getting yourself pre-approved, before searching for your dream home 🏘

✅ It confirms the maximum amount you can afford to spend
✅ It can secure you an interest rate for 90-120 days while you shop for your new home
✅ It lets the seller know that securing financing should not be an issue
Please read below article to learn more about Advantages of getting a Pre-Approval:
Written by our DLC Marketing Team

Want to sell your Home in Winter?

General Pulkit Narang 19 Dec

Thinking of selling your home in Winters 🥶 – Here are couple of important things to consider to make your selling experience “fun” 🏘
✅ Curb Appeal
✅ Keep it Cosy
✅ Lighting and Inviting
✅ Declutter
✅ Define Business Boundaries
Do read the below article to find out more:

While you might think selling your home in winter is harder, with the right considerations it doesn’t have to be! When selling your home during warmer months, the focus is typically on curb appeal and gardening, as well as having bright colors and patterns to draw out different rooms.

While curb appeal should not be forgotten in winter months, the focus should be centered on creating a warm, comfortable and welcoming space. You can do this through the following:

  1. Curb Appeal – If you live in an area that receives high amounts of snow, be diligent about keeping your sidewalk and driveways clear for visitors, and to keep your home looking clean for viewing. Always make sure to sweep any fallen leaves or debris.
  2. Keep it Cozy – Ensuring your home is sufficiently heated during showings will also go a long way to making it feel more comfortable; a steady 20 to 22 degrees Celsius during showings is ideal.
  3. Light and Inviting – With days being shorter and darker during winter, ensuring your home is light and inviting can make a big difference. In some cases, you may consider repainting the walls before listing your property.
  4. Declutter – When selling, it is important to declutter your home so that it looks its best and gives room for people to imagine their own belongings in your space.
  5. Define Property Boundaries – If you are showing your home in the middle of snow season, be sure to mark the four corners of your property so that potential buyers can see exactly what they are getting.

While there is some extra work with selling your home in the winter due to the weather conditions, it can pay off! Buyers tend to be highly motivated and often there is less competition for sales during this time giving more focus to your home.

 

Written by our DLC Marketing Team

Can Higher Interest Rates be Sometimes Better? Yes, it can!!

General Pulkit Narang 9 Dec

When it comes to getting a mortgage 🏠, there is a common misperception that a low rate is the most important factor. However, while your rate does matter for your mortgage, it is not the only component to consider.

If you’re looking to get a mortgage or renew an existing one, these are some other important factors that you should look at beyond simply the interest rate:
✅ Term of your mortgage
✅ Amortization
✅ Payment Schedule
✅ Portability
✅ Pre-Payment Options
✅ Penalty Calculations
✅ Variable v/s Fixed
✅ Open v/s Closed
Please read below article to learn more about how high interest rates can be sometimes better:

When it comes to getting a mortgage, there is a common misperception that a low rate is the most important factor. However, while your rate does matter for your mortgage, it is not the only component to consider.

If you’re looking to get a mortgage, these are some other important factors that you should look at beyond simply the interest rate:

Term: The length of time that the options and interest rate you choose are in effect. A shorter term (5 years) allows you to make changes to your mortgage sooner, without penalties.

Amortization: The length of time you agree to take to pay off your mortgage (usually 25 years). This determines how the interest is amortized over time.

Payment Schedule: How often you make your mortgage payments. It can be weekly, every two weeks or once a month and will affect your monthly cashflow differently depending on your choice.

Portability: An option that lets you transfer or switch your mortgage to another home with little or no penalty when you sell your existing home. Mortgage loan insurance can also be transferred to the new home.

Pre-Payment Options: The ability to make extra payments, increase your payments or pay off your mortgage early without incurring a penalty.

Penalty Calculations: Where variable rates typically charge three-months interest, a fixed rate mortgage uses an Interest Rate Differential (IRD) calculation. This can add up quite quickly! In fact, in some cases, penalties for breaking a fixed mortgage can sometimes be two or three times higher than that of a variable-rate.

Variable versus Fixed: For fixed-rate mortgages, the interest rate does not fluctuate over time. For variable-rate mortgages the interest rate fluctuates with market rates, which can be great when rates drop but not so great when rates are rising.

Open versus Closed: An open mortgage is similar to pre-payment options, allowing you to pay off your mortgage at any time with no penalties. A closed mortgage, on the other hand, offers limited to no options to pay off your interest in full despite often having lower interest rates.

When considering your mortgage, the above components all have a part to play in your overall mortgage as well as your homeownership experience.

It is easy to think that a low-interest rate is good enough, sign on the dotted line… but you may be overlooking important options such as portability, which allows you to switch your mortgage to another property should you choose to move. Or pre-payment options, which give you the choice to make additional payments to your mortgage. Without looking deeper at your mortgage, you may find yourself being forced to pay penalties in the future because you wanted to make a payment or a change to your mortgage structure. In some cases, agreeing to a higher rate to have more options and flexibility is better in the long run than the savings received from a lower rate.

Before agreeing to any mortgage, it is best to talk to your Dominion Lending Centres mortgage expert about the contract, as well as your future goals and any potential concerns you have to ensure that you get the best mortgage product for YOU.

 

Written by our DLC Marketing Team

Bank of Canada Hikes Overnight Rate 50 bps to 4.25%

Bank of Canada Interest Rate Pulkit Narang 9 Dec

Bank of Canada hikes interest rate yet again, 7th time this year, with 50 basis point as expected. As of Dec. 7th 2022, BOC policy rate set at 4.25% & Prime Rate now sitting at 6.45%. This impacts people with Variable Interest Rate, however, Fixed Interest Rates are super low today as bond markets cool down. Check out below the below article for more details :

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.

 

Written by our DLC Chief Economist : Dr. Sherry Cooper

“Credit Score” – 10 Must Know Facts About Them

General Pulkit Narang 9 Dec

Everyone talks about “Credit Score” but do you know some fun facts about them? Please read below to learn more about what a credit score is and how to keep it healthy !

If you are in the market for a home or a new car, you are probably very familiar with your credit score. Lenders are one of the primary users of credit scores and it can have a huge impact on whether you get approved for a loan and just how much interest it is going to cost you. What isn’t well known about credit scores is where they come from, what makes them go up (or down!) and who else besides potential lenders uses them to make decisions? Your credit score is going to be with you for life, so why not take a couple of minutes to get the facts.

  1. There are two credit-reporting agencies in Canada: Equifax and TransUnion. Your credit score may vary between the two. Lenders may check one or both agencies when you apply for credit.
  2. Your credit score is actually derived from the data in your credit report — which can be had for free once per year from Equifax and TransUnion. Some banks, credit unions, and other financial services companies provide your credit score for free as part of their services.
  3. Credit scores range between 300 and 900 with the Canadian average being 650.
  4. Your credit score is used for a lot more than just borrowing money; insurance companies, mobile phone providers, car leasing companies, landlords and employers may all require your credit score to make decisions.
  5. Five factors affect your credit score: length of credit history, credit utilization or how much of your limit you have used, the mix/types of credit you hold, the frequency you apply for credit, your payment history.
  6. Mistakes and omissions are not uncommon and is a good idea to check the details of your credit report. Both agencies have a process to report errors and get them corrected.
  7. Credit scores of 700+ are considered “good” and offer a higher chance of loan approval, greater borrowing limits, and lower or “preferred” interest rates and insurance premiums.
  8. Credit scores are continuously evaluated and adjusted. If you have “errored” in your past, the damage is not permanent! Your score can be raised/rebuilt by using credit responsibly (see #10).
  9. Checking your credit score regularly is a good idea and will help detect errors, monitor improvements, and identify fraud. This is a “soft” enquiry and will not affect your score.
  10. To increase your credit score: make payments on time, pay the full amount owing, use 35% or less of your available credit, hold a variety of credit types, apply for new credit sparingly.

Don’t make the mistake of ignoring your credit score. Even if you aren’t looking to borrow money anytime soon, there are a lot of reasons to keep an eye on it.

 

Written by my DLC Marketing Team