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Archive for February, 2012

SOLD www.2302-1048Broadview.com … Spectacular Luxury Corner Suite

SOLD … Large Luxury Skyy-Line Condo … South, East, West, Lake Exposure

Suite 2302-1048 Broadview is a one of a kind 1599 sq ft corner home in the Skyy … with 2 bedrooms, 2 en-suites, a powder room, den, very large living / dining room with surround floor to ceiling windows, upgraded kitchen with island, granite & designer cupboards … includes a huge panorama south view balcony. This suite also includes an owned prime parking space and locker. Spectacular Condo & Value!

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James Metcalfe’s Real Estate Update February 2012 … in #OurHomeToronto

Here is our February Real Estate Update for Our Home Toronto: You will note January prices were up 9% over last year, an interesting article on Personal Finances, some Legal Insights, and the ever popular Pearls of Wisdom … Enjoy and do let us know if you would like to receive this update by email.

For loads of Listings and free information on buying or selling  Visit OurHomeToronto 

View more documents from James Metcalfe.

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Celebrate Valentine’s Day in Rosedale & Yorkville … Time to fall in love!

old fashion love

This Valentine’s Day you may want to treat your special someone with a casual meal at one of Rosedale’s long standing restaurants, the Rosedale Diner.  Centrally located, they offer a “Bohemian style” and a delicious menu.  For a more formal dining experience, the 180Panorama restaurant in Yorkville at the Manulife Center is offering a special Valentine’s Day dinner for two, for only $195.00.  Wherever you take your Valentine, don’t forget to pick up flowers at Blossoms Rosedale.   And nothing spells love like a gift from Tiffany’s.  Stop in at their Yorkville location on Bloor Street West, to find that perfect way of saying “I love you” … in OurHomeToronto

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Why it’s a good time to buy a home …

Mark Weisleder Good time to Buy

Mark Weisleder … Lawyer, Author, Lecturer, Key Note Speaker … wrote this terrific article on why now is a perfect time to buy a home. This blog, website and social media extensions are all resources to help you know who are the perfect Realtors to assist you in your home searches and sales.Visit http://www.OurHomeToronto.com for lots of new listing choices and free tutorials on buying or selling your home.  We Specialize in homes & condos in OurHomeRosedale.com, OurHomeYorkville.com, OurHomeAnnex.com, OurHomeCabbagetown.com, OurHomeMoorePark.com


By Mark Weisleder
Paul Lachine illustration

I believe there has never been a better time to buy a home. I’ve been in the industry for 28 years as a lawyer and I haven’t seen so many positive signs for housing, whether you are thinking or buying or locking in a mortgage.

Here’s why:

Mortgage rates at historic lows: They can’t get any lower. Four to five-year fixed mortgages at 3 per cent are unheard of. It is lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, either later this year or next. If you are paying a variable interest rate, lock in now.

Canada’s appeal: This country has everything going for it — a stable banking and political environment, steady real estate market, the natural resources people want and few social tensions. That makes us a safe haven in a volatile world.

Our immigrant draw: Because of the above, we’re a draw for immigrants, often wealthy ones. When they get here, they need a home. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.

Mortgage defaults: According to CMHC, over 99 per cent of Canadians pay their mortgages on time. It quite a different picture in the U.S. where 7 million homes are in foreclosure and perhaps another 7 million homeowners are under water. This represents almost 15 per cent of all homes. So while the American housing market will likely be weak for the next few years, this should not occur in Canada. Our banks are not dumping homes onto the market, so there is no downward pressure on prices.

Also read: 6 ways to ensure you don’t buy the wrong house 

Recourse Mortgages: In many U.S. states, if you can’t pay your mortgage, the only thing the bank can do is foreclose; they cannot sue you for any shortfall. So when homes go under water, owners give the keys back to the  bank. In Canada, loans are almost all Recourse, meaning if you don’t pay and there is a shortfall, the lender can sue you for the difference. This is another reason why, in my opinion, even if times do get tough, Canadian homeowners will find a way to make the payments until things improve.

Income-to-price ratio: Another misleading statistic is that in major markets, like Toronto, the average price of a home is now 4.6 times the income of the average Canadian. This same statistic was found just before the U.S. and UK markets went into the tank. However, if you look at median incomes of Canadians against the median cost of homes, this average comes down to around 3.5, which is not dangerous. Using averages are wrong. A person receiving social assistance will not buy a home, and should not be included in any relevant statistic.

High consumer debt: The warnings about rising debt ratios must be examined carefully. The Governor of the Bank of Canada is worried that the average personal debt ratio is now 156 per cent in Canada. This means a household making $100,000 per year, owes $156,000, two-thirds of which is mortgage debt. Why is this so bad? At an interest rate of 3 or even 5 per cent, the amount needed to service the debt is manageable. Most people do not pay off their mortgages in one year. Still, this is another good reason to consolidate your debt now, at these low interest rates, and lock in.

No guarantees: Nobody can predict the future and there’s always the possibility of a major economic shock. Yet, in a U.S. presidential election year, politicians will do whatever is necessary to prevent it. If the economy goes into the tank, so do re-election chances. The U.S. is already showing signs of economic recovery.

Also read: 20 things to look for in a home inspection

No matter what, do not take on a monthly payment higher than what you can afford. Meet with your lender or mortgage broker in advance to figure out what you can afford before you start looking for a home. It may be the best time to buy, but you need to buy smart.

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$$ Pay Down your Mortgage or Grow your RRSP $$

My Chartered Accountant Robert Gold and his firm Bennett Gold LLP put out a very useful monthly Business Bulletin. From time to time we will offer his findings and wisdom as it applies to your financial management.  More can be learned at their website http://www.bennettgold.ca/

If you are considering refinancing to renovate or you are Up-Sizing or Down-Sizing please give us a call and visit our informative website http://www.OurHomeToronto.com  … We are at your service!     James Metcalfe  REALTOR® BROKER 

RRSP season is heading into full swing and many Canadians are going through the annual angst trying to decide if it is better to contribute to their Registered Retirement Savings Plan by the February 29 deadline – and get the tax deduction — or apply the money to help pay down their mortgage.

A Few More Tips

Here are a few strategies to consider if you have contribution room left for your 2011 RRSP:
   1. If you received a retiring allowance last year but didn’t use the special RRSP contribution allowance, you have until the February deadline to make it to your own RRSP but not to a spousal plan. This special contribution does not affect your normal contribution room. But the word special does have significant meaning. You lose it unless you use it by the deadline.
   2. You can make an in-kind contribution, claiming as a 2011 deduction the fair market value of the security at the time of transfer. The in-kind transfer amounts to a disposition that can generate a capital gain or loss.
   A gain is taxable, but you won’t have to pay the tax until you file your return next year. Meantime, you get the deduction on your 2011 return.
If there is a loss on the transfer, you cannot claim it. However, you can sell the security for cash that you contribute to your RRSP and report the loss on your tax return.
   3. Consider contributing as much as possible to your RRSP as early in the year as you can to get the most from compounding. Consult with your accountant about estimating your maximum  contribution, as you aren’t likely to have all the information needed to calculate the amount this early in the year.
   The 2011 RRSP contribution dollar limit is $22,970. The tax deduction is limited to 18 per cent of 2011 earned income up to the contribution maximum, minus your pension adjustment. Remaining contribution room after your 2011 contributions may also be considered.

The dilemma is particularly vexing these days. The ratio of household debt to disposable annual income is at an all-time high of 153 per cent and Bank of Canada Governor Mark Carney has said he expects it to increase. So it may be no surprise that a recently published poll showed that paying down debt is the top financial priority among Canadians. Managing day-to-day spending and retirement planning took second and third place, respectively.

However, age played a major role in those results. The survey, conducted for CIBC, found that debt repayment was a particular priority for respondents between the ages of 25 and 44, who tend to have more debt and less money to save.

But as we get older, priorities change and it becomes more important to work toward ensuring a comfortable retirement. Respondents between the ages of 45 and 64 put retirement planning at the top of their list.

When it comes to debt, it is often a mortgage that is our largest burden. And unlike our neighbors in the United States, we cannot take a tax deduction for mortgage interest. Thus the rush here to pay down mortgages as quickly as possible. On its face, that plan seems to make financial sense.

For example, on a 6.5 per cent, $100,000 mortgage amortized over 30 years you’re going to pay approximately $126,000 in interest. That makes it tempting to pay down the debt and forsake the RRSP — at least for a while. And, of course, every year you are in debt, real cash is being drained from your savings account.

On the other hand, regular contributions to your RRSP provide tax-deferred compounding and a tax deduction that gets you a refund. Of course that refund helps create a future tax liability because when you retire you will have to pay tax on the withdrawals of your contributions and the money they earned while in the RRSP.

Nevertheless, you can still take advantage of the refund now by putting it in an account where it will compound tax free. That could be either your RRSP or a Tax-Free Savings Account, where you could keep it as a reserve to help pay those later taxes. The refund can also be applied to your mortgage.

When it comes to your mortgage, do the math and consider these three options:

1. Pay off your mortgage and then start contributing to your RRSP. In this scenario, paying off the mortgage provides a guaranteed tax-free return but you will forgo years of tax-free compounding within your RRSP. At the current low mortgage rates, the RRSP returns will more than likely beat out your mortgage rate. This option is particularly attractive to individuals in lower tax brackets.
2. Maximize your RRSP while paying your mortgage regularly. If your goal is to retire debt free, this may be the best choice when you have more years left on your mortgage than you have before you plan to retire. This strategy requires you to be in a high tax bracket.
3. Apply your refund to your mortgage and maximize your RRSP. This is potentially the best of both worlds.


But there or other possibilities: If paying down your mortgage quickly is a priority, consider bi-weekly payments. You will make 26 payments rather than 12. As a result, you’ll make one additional payment each year that is applied to the principal of the loan. You save thousands of dollars in interest costs and shorten your amortization period.

To calculate the benefits, divide your monthly payment by two and multiply it by 26 (or divide the monthly payments by four if you want to make weekly payments, then multiply by 52.) If your monthly mortgage payment is $800, or $9,600 a year, your bimonthly payment would be $400 every two weeks and $10,400 annually. The following chart illustrates how you can save more than $20,000 with bi-weekly payments:

Accelerated Bi-weekly vs. Monthly Payments1
$100,000 mortgage at 6.5% interest compounded semi-annually
Payment Frequency Number of Payments Interest Costs ($) Principal Payments ($)
Monthly/$670  300
25 years
 100,956  100,000
Bi-weekly/$335  538
20 years, 9 months
 80,354  100,000
Amount Saved   20,602  

Accelerated mortgage payments notwithstanding, there is another way to pay down your mortgage while building up your RRSP.

Consider that same 25-year mortgage with the $670-a-month payment, and let’s assume that you:

  • Are in a 40 per cent tax bracket;
  • Have $500 a month left after paying all your budgeted items and putting money aside for emergencies;
  • Have $5,000 to use as a lump-sum contribution to your RRSP or apply to your mortgage; and
  • Are trying to decide whether to put the extra money into your RRSP, with 6.5 per cent assumed annual earnings, or apply it to your mortgage.

Using an RRSP vs. mortgage calculator that you can find online, you will discover that the $5,000 lump sum and the extra $550 a month payment would produce these results:

  • The amount of the mortgage and interest would drop by $79,436.42 and your amortization period would drop to 8.83 years.
  • Investing in the RRSP would generate the same amount of money over the same period plus tax savings of about $23,200.
  • Using the tax savings to pay down your mortgage would lower the amount of the home loan with interest by $60,143.12 and your mortgage amortization period would decline to about 14.25 years.

In this specific scenario, you would get the best of both worlds: On top of the after-tax value of your RRSP, you would save in mortgage interest costs and reduce the term of the loan.

The decision between paying down a mortgage and investing in an RRSP is very personal and should be made with the help of your accountant, taking into consideration all of your other financial needs and goals.

1 Source: Mortgage Wise Booklet, Canadian Bankers Association through Bennett Gold Chartered Accountants LLP

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Six Surprising Sustainability Facts … By Jim Harris

Thank You to Jim Harris:  
Jim is an internationally renowned business and environmental speaker.
Jim Harris
1. Fuel efficient cars would eliminate North American Oil Imports
If every car in North America got the same fuel efficiency as my Toyota Prius there’d be no need to import any oil into North America and there’d be no need to drill for oil in the Gulf of Mexico or the Arctic!

More than a century ago, Henry Ford’s original Model T got 25 mile per gallon (mpg). Fast forwarding through a 100 years of head spinning, relentless technological progress and today the average SUV in North America gets 17 mpg. So we’ve been going aggressively backwards into the future!

When oil hit $US147 a barrel in 2008, the US was transferring $700 billion a year to the Middle East for oil imports, the greatest voluntary, unnecessary transfer of wealth in human history.

2. Oil Subsidies Globally total $US700 Billion a year
$700 billion a year is spent subsidizing oil and gas companies worldwide. Of the top 20 most profitable companies worldwide in 2009, seven were oil companies and their cumulative profit was equal to the profit of the other 13 companies combined.

Why are government subsiding the most profitable industry in the world? The most profitable companies in the world? With the global debt crisis, why are governments still handing out oil and gas subsidies?

The $700 billion a year of oil subsidies does not include the $100 billion a year the US spends defending Persian Gulf shipping lanes to ensure the flow of oil to the US, nor the cost of the Iraq war, which Nobel economist Joesph Stiglitz estimates to be $US2.7 to $6 trillion in total (not an annual figure).

3. Cutting Carbon is Profitable
A study by McKinsey & Company shows that cutting carbon is highly profitable: 40% of North American carbon cuts required to meet the Kyoto Protocol targets would generate a profit and, if that profit was reinvested in the next least-cost options, we’d get all the way to the Kyoto goals at no cost to society.

Business leaders should take note, this isn’t a radical environmental group, it’s the pre-eminent management consulting firm worldwide. This categorically dispels the myth that going green is expensive because cutting emissions increases the efficiency of businesses, of homes and society as a whole thus providing a huge economic benefit to the economy. The study shows that there’s no single silver bullet; instead there’s silver buckshot  – made up of very highly profitable energy efficiency solutions.

Investing $2 trillion from now till 2020 – would provide an Internal Rate of Return (IRR) of 17%, according to The Case for Investing in Energy Productivity, a separate McKinsey & Co study. This rate of return is better than the historical return for investing in property and stock market over the long term!

4. Efficiency of North American electricity generation could be tripled
A staggering two-thirds of the energy from coal, gas and nuclear power generation in North America is wasted in the form of heat that’s vented up smoke stacks and cooling towers. By contrast, combined heat and power (CHP) or co-generation, increases the system efficiency from 33% to 90% by using the “waste” heat used to heat buildings, homes or stored at high temperature underground. Denmark obtains 55% of its energy from cogeneration and waste heat recovery, the highest installation of CHP worldwide.

5. Going Green Great for the Bottom Line
GE launched its ecomagination initiative in 2005 and by 2011 had sold $70 billion of green products and services; $25 billion of that in 2010 alone. GE has committed to doubling its investment in its green offerings to $2 billion a year for the next five years.

Walmart is investing aggressively in energy and fuel efficiency. The $500 million it’s investing in sustainability projects have a payback of four years or less and has become an incredible profit engine for the corporation. Walmart embarked on this initiative in 2005 and is now saving more than $500 million a year – all of which is driven to the bottom line.

Walmart works on 3% net profits so to make another $500 million of profit the corporation would have to sell an additional $16.7 billion in goods! Even for the largest retailer in the world in the midst of a recession, this would be a challenge.

6. Turning PCs off at night saving Dell $1.8M/year
A staggering 50% of North America’s 108 million corporate PCs and monitors are left on overnight and on weekends wasting up to $4 billion of electricity a year. Many IT departments instruct users to leave PCs on 24 hours so that patches and upgrades can be pushed out overnight. But new power management software from companies like 1E, Verdiem and Faronics allows IT departments to put PCs to sleep at the end of the day or when they’re unused. IT professionals can easily wake up computers at 3 am to centrally push out patches, upgrades and new virus definitions, then put all computers back to sleep before waking them up again at 7 am before employees arrive. Dell Computers is now saving $1,8 million a year having implemented this for its’ 50,000 computers. This approach offers paybacks on average of six to 12 months.

Going Green is highly profitable
Going green is highly profitable for three reasons: it cuts costs, reduces risk against rising energy and electricity prices and can increase revenue because a large segment of consumers want to buy products and services from green companies.

Jim Harris is an internationally renowned business speaker and environmental speaker. He is the author of Blindsided, a #1 international bestseller published in 80 countries worldwide. He speaks at 40 conferences a year around the world. You can reach him through Linkedin.com or follow him on Twitter @jimharris

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