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78 per cent of actively managed mutual funds under-perform the general stock market index.
A recent study conducted in the United States, tracking the largest cap stocks in the U.S. market, found that 78 per cent of actively managed mutual funds under-perform the general stock market index.
The reasons being, some investment experts say, are two key structural issues:
12 per cent of Canadian mortgage holders opt to lock in to terms longer than five years; is the stability worth the added cost?
Earlier this year the Government of Canada made it easier for Canadians to qualify for a mortgage if they locked into a fixed-rate, five-year mortgage term. The five-year, locked-in, fixed-rate mortgage is, most commonly, the mortgage of choice among Canadians. Regardless of rising inflation or other economic influences, the locked-in five-year term means your monthly payments will not fluctuate for a decent chunk of time.
The Canadian Association of Accredited Mortgage Professionals, however, has found that 12 per cent of Canadian mortgage holders opt to lock into even longer terms. About 8 per cent of Canadians choose seven-year terms while four per cent take on 10-year mortgage terms. These longer terms are attributed higher interest rates than what are available now in the market for five-year fixed, but will they prove beneficial in the future? Why are a significant portion of Canadians choosing these longer terms?
Continue reading “Is the security afforded by a long-term mortgage worth the added cost?”
The purchaser will be paying interest on every dollar of the home’s value, as opposed to nicking off a good chunk, interest free, with a down payment.
The option to own your own home with 100 per cent financing, or even more in some cases, seems like a great deal. There is no need to accumulate the standard minimum five per cent down because that too can be financed. If the rules on qualification are stringent, including proof of solid credit rating and significant income, why are some banking professionals claiming “dismay” at the rising issue of no money down mortgage products?
For starters, some feel that the increased availability of home ownership to a pool of buyers that have not saved to put down equity into their home purchase will contribute to bubbling housing issues and inflation.
Canadian renewable energy trusts are one of the many green investment options available to both Canadian and US investors.
Canadian renewable energy trusts are one of the many green investment options available to both Canadian and US investors. Similar to renewable energy cooperatives, wherein a group of investors pool funds to erect a renewable energy power source, investors invest in a renewable energy trust based on existing renewable energy projects. Profits generated from the projects within these funds are distributed to the investors according to their investment level. Many renewable energy trusts distribute these profits monthly.
Renewable energy projects can include ethanol plants, wind turbines, and hydroelectric power plants. Canadian renewable energy trusts can see gains of anywhere from three to 35 per cent annually, with individual renewable energy companies, on extreme occasion, seeing more than 100 per cent gains overnight.
Continue reading “Investing in Renewable Energy and other Green Initiatives”
Foreign lenders, outside of large banks and insurance companies, are upping the commercial financing available for non-prime commercial borrowers.
The Canadian commercial lending market continues to see change in the way it functions. In 2009 commercial lending saw a dip, which appears to be recovering this year due, in part, to a renaissance of securitization.
Though, according to the Globe Investor, Canada’s securitization market continues to see issuance levels lower than before the 1930s, issuance is improving. Foreign lenders, outside of large banks and insurance companies, are upping the commercial financing available for non-prime commercial borrowers, which means the outlook for the Canadian commercial mortgage market looks apt to see growth.
Continue reading “Commercial Mortgages Seeing Increased Funding Outside of Banks”
Your credit score is one of the weightier elements used by lenders to determine your eligibility to receive financing and to decide the rate they will charge for your mortgage.
Your credit score, also referred to as a Beacon or FICO score, is one of the weightier elements used by lenders to determine your eligibility to receive financing and to decide the rate they feel justified in charging you on your mortgage. Beacon scores tend to range from 300 to 900; 900 being perfect and very uncommon.
The average Canadian scores around the 700 mark. This grade, or greater, will secure you the best mortgage rates in Canada. For every ten points below 700 you are basically looking at a hike of one or two basis points, or 0.01-0.02 per cent, on the rate you are offered, down to 600 points. Below 600, down to 500, rates start spiking one to three full percentage points above the best rate available and qualification becomes more difficult, though not impossible.
The study, ordered by the Financial Planning Standards Council (FPSC), found that of the 20 per cent, or less, Canadians who actually employ a financial planning strategy, virtually all state that doing so has affected an increased ability to save, and an improved sense of security and lifestyle comfort.
Research conducted recently in Canada lends evidence that utilizing a financial planner to aid in the development and enactment of your financial plan does yield substantive benefit.
The study, ordered by the Financial Planning Standards Council (FPSC), found that of the 20 per cent, or less, Canadians who actually employ a financial planning strategy, virtually all state that doing so has affected an increased ability to save, and an improved sense of security and lifestyle comfort.
“Those with comprehensive financial plans are saving more proactively for the things that matter to them,” Cary List, president and CEO of FPSC, says. “[Planners] are reporting much higher levels of confidence in dealing with life’s uncertainties and in reaching their financial and life goals.”
Continue reading “Canadian Study Finds Having a Financial Plan Yields Greater Savings and Security”
If you have no investments but want to start investing, you need a budget to determine how much you can safely afford to invest each month.
The most overlooked aspect of a person’s financial situation is their actual monthly budget. A budget is easy to create and stick to, so long as you devise a budget based on priority. The essentials are tracking your income, your expenses and your investments.
If you have no investments but want to start investing, you need a budget to determine how much you can safely afford to invest each month. The portion of your monthly income that you invest should be a reasonable amount that you can safely part with each month. Your expenses like mortgage or rent, credit cards, loans, utilities, and so on are obviously a priority and should be calculated first.
Find out how credit rating affects your mortgage rates and eligibility for most mortgage products.
Credit worthiness and the availability of money are always of interest to the mortgage shopper. We will discuss, in brief, just how important your credit rating is.
The old saying “Cash is King” rings true when it comes to purchasing power. When banks and mortgage companies talk about borrowing power, the adage changes. Now “Credit is King”.
Your credit history plays an integral part in the underwriting process of a mortgage application. Consider credit an indication of the risk level associated with the application. If credit is poor, risk goes up. If credit is good, the lender will view the application with much less hesitation. This often directly correlates to what mortgage rates they will offer.
Continue reading “When is the Last Time You Checked Your Credit History?”