Provided by Brian Marling, Accredited Mortgage Professional,Neighbourhood Dominion Lending Centres, Cobourg
Those are fairly ominous words, and as I like to say…Never Say Never! However, when they come from someone like Benjamin Tal, senior economist with CIBC World Markets, we ought to listen. This past Monday afternoon Deborah & I had the privilege of attending a luncheon in Toronto where Benjamin Tal was the keynote speaker. The question is, ‘What was he referring to?’
Well, among other things, he was specifically talking about the unbelievable opportunity that presents itself right now with regard to current interest rates and real estate values. It seems as though all the cosmic forces have aligned themselves at just the right time in order to present an unprecedented opportunity. As far as real estate prices go he made the point that we are in no way experiencing the kind of free-fall in prices that has been witnessed south of the border. The decline in housing prices the past 8-12 months is nothing more than a direct response to the recession we find ourselves in. In other words it is a typical cyclical correction (say that 3 times fast!). In fact, according to Benjamin Tal the decline in the housing market has begun to stabilize. Therefore, there is no good reason to delay purchasing a home. Could prices fall further? Sure they may, but the combination of current lower prices and historic low interest rates will not last forever.
Lets talk about interest rates. He calls these rates “Emergency Rates”, and stresses that they are somewhat of an anomaly! With respect to the recession he feels that we are in the 7th-8th inning of this ball game and that the worst is definitely behind us. He noted that last fall the world came within inches of a total economic collapse and that the central banks of the world absolutely did the right things in pumping all the monies into their respective economies that they did. When we start to pull out of this recession, which he believes will be later this year or early next year, we will see with that a rise in both inflation and interest rates.
So where does all this leave us? As with many things in life … snooze & you loose! When a window of opportunity presents itself you must first realize that at some point the window will be shut. When that happens there will be a number of responses: first of all there will be those who never knew the window was even open – thanks for coming; then there will be those who knew, but procrastinated, and only heard the sound of the window closing on their sluggish behind; and then there will be those who take advantage of this unique situation and benefit for years to come!! Which one are you?
I have been telling my clients for the past number of months that this may be a great time to consolidate debt, purchase an income property or buy that first home. One client, by re-structuring their debt actually created an $1800 per month cash flow while eliminating all debt except for the mortgage. Wow – better than playing the lottery for sure! Another client has saved over $120,000 in interest costs thru our restructuring plan. There are many other examples I could share of how my clients have taken advantage of this great opportunity.
For those of you who have not checked into this yet, do not miss this opportunity to see if you can save some money. Please call me any time at Neighbourhood Dominion Lending Centre 905-372-7222 for a free analysis. I hope to hear from you soon.