ISSUE 12 • FALL 2022
Quarterly Newsletter
KYLE GREEN’S GAB
‘22 Market outlook
INFLATION AND YOUR MORTGAGE VANCOUVER’S
Sights and Tastes
USA:
Building credit and Lending Products
BUYING AND INVESTING IN THE USA CANADIAN VS. AMERICAN M0RTGAGES
“There is something so special in the early leaves drifting from the trees–as if we are all to be allowed a chance to peel, to refresh, to start again.”
Ruth Ahmed
IN THIS ISSUE
1. 3. 5. 7. 9.
kyle green’s gab Market Outlook 2022
THE TEAM Kyle Green Owner
Max Jurock
Systems/Operations
webinars
Nitin Vats
General Manager
our latest news Client Appreciation Event with the Kelly Fry Team
vancouver’s
Sights and Tastes
spotlight
Green Mortgage Team Members
Geoff Shoji
Underwriting Manager
Shawna Gaudreau
Executive Assistant/Bookkeeper
Ami Arandi
Commercial and Private Lending Underwriter
Jason Cattermole Underwriter
11.
september’s increase Bank of Canada Raise Interest Rates
Sharon Shen Underwriter
Tasha McKenzie
14.
simplyfying mortgage
Trigger Rates and Trigger Points
Underwriter
Michael Browne Account Manager
15. 17.
how does inflation affect mortgage rates? the seven differences Between Canadian and American Mortgages
Kate Riabenka Account Manager
Alex Gattey
Account Manager
Dmitry Khokhlov Account Manager
19. 21.
canadians moving to the usa
five steps
To getting an American Credit Card
Chris Clark
Jr. Account Manager
Quinn Berry
Documents Manager
Lisa Bridal
Documents Manager
24.
usa bank accounts for canadians How, Why and Where
Lee–Ann Ong
Documents Manager
Kris McFarlane
25.
orderly housing corrections continue By Dr. Sherry Cooper
Copywriter
Jenni Loppnow Graphic Designer
Kyle Green’s Gab Market Outlook 2022
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f there’s one thing real estate buyers are focused on right now, it’s the future. Knowing where rates and prices are heading. Knowing when the best time will be to make sales, investments, and purchases. Deciding if it’s a good time to switch things up or keep what you’re comfortable in for a year longer. So with this quarter, I want to take the time to look ahead for you and let you know what to plan for—or whether there’s any point in planning at all!
Let’s dive into the current Vancouver market, alongside overall Canadian forecasts, and what they mean for you as a buyer or a seller.
Kyle Green Owner GREEN MORTGAGE
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Real Estate Prices Are Down Throughout Canada, the benchmark home price has seen a sharp drop from June to July, falling by $27,400 in just one month. Since March, prices have fallen by $86,000 on average. Southern Ontario led the biggest dollar drop, which is interesting considering they led the price increases in recent years. But, even with these declines, house prices haven’t yet returned to last year’s level, and it’ll take a long while until they do.
Vancouver’s Property Market Overview Metro Vancouver prices have accelerated in the past few months, pushing buyers to head elsewhere for a property they can afford. At the same time, condo values have dropped, creating an unwanted trend. Condos tend to be ideal first properties for buyers. When it becomes time for a buyer to upgrade from a condo to a house, they need the value of the condo to be high enough to provide a decent down payment. Right now, if the value of a condo drops far enough, prospective house buyers won’t be able to afford a bigger property. While forecasters seem to be predicting a price drop after June 2023, this isn’t guaranteed.
Where Are Prices Headed? Forecasters have provided us with a mixed bag here, which isn’t surprising when you consider the uncertainty they’re faced with. The current forecast however predicts that house prices will continue to slowly rise until next June when they will peak, and then begin to decline again. For Vancouver, while I had mentioned the price acceleration in recent months, Metro Vancouver is seeing the growth begin to slow down. The hope is that policy makers are guiding the market back toward a typical annual real estate cycle, where prices ebb and flow at different parts of the year. They should hopefully keep this in line with income growth.
New Construction Pricing We’ve seen an acceleration in the pricing of new builds since mid-2020. These prices don’t actually match the sales of existing homes, with a much more dramatic rise. The reason for this is that residents are piling into the pre-sales market for new construction because the general inventory is so low, that they can’t find a listing they genuinely want.
Supply And Demand Currently, demand is slightly above normal levels. There has been a decline in demand, with people heading back to working from offices and a more normal way of life returning, people aren’t craving the extra space they did just after the lock downs. People are also beginning to prioritize other life events again including travel.
However, supply is far below the long–term trend. This creates a picture where even with the reduced demand, there aren’t enough properties to go around. This links back to the rise in new–build prices, and the number of people jumping on pre–sale lists. If you’re looking to buy within this market, you need to look at the areas with higher inventory.
Should Investors Sell? The current short answer? Yes. However, this can change quickly. There are more changes currently happening in the market to influence a gradual decline in prices toward the back end of 2023, so now may be better than in a year or two. You should also pay attention to the recent dip in buyer demand. If this dip continues to greaten, listings could accumulate, making it harder for you to make a sale. If you want more support with what selling sooner rather than later means for your mortgage, please reach out to the Green Mortgage team.
Is This a Good Time To Buy? You can look at this question in different ways. Yes, prices are rising. This does increase the cost you’ll pay overall, which would make it seem like you should wait to see if they decrease in a year. BUT. Interest rates are projected to keep on rising too, which will increase ownership costs and affect your monthly payments, making it worthwhile to secure a lower rate now. If you were to buy in the not–so–distant future, I’d be sure to drive a hard bargain and get as much as a discount as you can, so you don’t lose value in the future. And be prepared that your rates may change in the future too, so make sure you don’t put everything into those monthly payments right now. Give yourself leeway. If you’re looking for a forever home, then the risks of buying are low. If you’re looking as a first-time buyer, things are looking harder–but that doesn’t mean you should stay renting either. There are plenty of things out there to help you secure your first home. Contact the GM team for further mortgage advice.
What You Need To Know When there are uncertain times ahead, I think it’s a good idea to evaluate where you are right now instead. Are you financially in a secure place to invest? Do you need more space to work or raise your family? Is it frustrating that your landlord just keeps on raising your rent? The real estate market will always be changing, and to a certain extent, we can never predict everything. But you can look at what you need in the here and now. I still believe that owning a property will always remain a positive thing. If you’re looking to buy or sell and need advice on your mortgage, the GM team are here to offer you advice and support. The team are true experts in their fields, and together they’ve really made Green Mortgage the award–winning brokerage it is.
WEBINARS:
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WE’LL BRING THE REAL ESTATE KNOWLEDGE AND ACTION; YOU’LL BRING THE EXTRA QUESTIONS AND POPCORN
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WEBINARS 2022 WITH KYLE GREEN
DON’T MISS THESE TRENDING TOPICS! First Wednesday of the Month at 7pm.
On–Demand Or Listen Live
Webinars are limited to 500 attendees. Don’t Miss These Trending Topics
Please register in advance by clicking on each webinar below. Every month we listen to your biggest questions and dive into a different real estate topic. December 7th Reverse Mortgages here to register Held by our resident king Click of real estate and the owner of Green Mortgage—Kyle Green. Open for Q and A, it’s not every day you get to hear top advice from industry leading experts.
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Plus…you’re guaranteed a Utilizing front–row seat you signinup. January 4th the ifEquity Your Spaces are always limited Home for these exclusive events, to Invest in Real Estate so make sure you keep our calendar Click here to handy. register
YEARLY WE LOOK AT: • Using The Smith Manoeuvre • Real Estate Investing Explained • First-time Home Buyers Bootcamp • Short-term Rentals: Pros and Cons • The Hidden Power of Home Equity • Buying Investment Properties 1 to 5 • Buying Investment Properties 5 to 10 • Construction Financing Explained • Everything Commercial Lending • Private Lending: Using and Investing • The Secret Power of Refinancing • Reverse Mortgages: Pros and Cons
CLIENT APPRECIATION EVENT GLASS HOUSE WINERY Back at the end of August we partnered up with the Kelly Fry Team and held a client appreciation event at the gorgeous Glass House Winery. Kelly Fry and her team are a top–rated real estate agent team throughout Metro Vancouver and the Fraser Valley. They’ve helped so many of our own clients to make incredible investments over the years. Together, they provide the properties, and we provide the mortgages! We wanted an ideal opportunity to end the summer with an event to give back to our clients and provide them with an enjoyable afternoon where they could talk more about investing alongside making connections. It was the ideal opportunity we needed to celebrate the hard work put in by both teams and thank the people who trust us most. Without our clients, we wouldn’t be able to provide the service we do. We do our work because we want to help people gain confidence and knowledge on real estate, so they can reach all of their property–based goals and grow wealth.
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The Glass House Winery is a family run vineyard based along the beautiful Campbell Valley Wine Route in south Langley. We all enjoyed the gorgeous vinos offered, alongside delicious bites. If you were there, you’ll have spotted Kyle himself enjoying a glass or two, alongside the legendary Ozzie Jurock, and the Fraser Valley’s queen of real estate Kelly Fry.
If you didn’t make it, don’t worry. We have more events happening soon. Make sure you’re following us on our socials where we post events, giveaways, and more! 5
VANCOUVER: SIGHTS AND TASTE The Top Five Attractions in Vancouver Whether you’re planning a long weekend or a lengthy two–week holiday, Vancouver is a hub of activity, with enough to do to fill up every single day! With so much to do and never enough time, we’ve done the debating for you. Grouse Mountain No matter the time of year you visit, Grouse Mountain has a wonderful array of outdoor activities and exploration. In the summer months, you can hike, zip–line, or take a trip on the gondola up Grouse Grind. In winter there’s ice skating, skiing, and snowshoeing. Richmond Night Market Build up an appetite and head over to the largest night market in North America. Based around Asia’s night markets, you can find impressive food to eat and trinkets to take home with you. There are also games, live music, and entertainment to enjoy. Granville Island Granville Island is an overhauled former industrial site. Now home to a public market, plenty of foodie spots, galleries, and green spaces, it’s a must–visit for a chilled afternoon stroll or a picnic—make sure you take an aquabus to get there too. The Museum Of Anthropology Get back to the routes of Vancouver and learn about the history of the Lower Mainland. This museum features art by Indigenous peoples from Canada, telling a story that promotes awareness of diverse cultures and artistic diversity. Vancouver Whale Watch BC has an incredible array of marine life, including humpbacks, orcas, dolphins, and more. A conservation—minded whale watch tour is a must. Learn about whale migration, and marine conservation, and get up close to the beauty of Vancouver’s waters. What You Need To Know Vancouver is unlike any other city on the planet, and we know you’ll find so much to love here as you explore. Don’t be put off by the rain (it adds to the experience), and make sure you wear your comfiest shoes as you adventure. 7
RESTAURANTS IN NO PART ICULAR ORDER. Miku If you want to hit up a sushi spot on your trip, Miku presents an exciting culinary experience with sustainable seafood and incredible views of the mountains around Vancouver. Fun fact—Beyonce and Jay Z dined here. Joe Fortes Seafood and Chop House With 35 years of culinary expertise, Joe Fortes has gained a legendary status in Vancouver. Here you’ll find a San Fran inspired seafood grill alongside steaks and chops, and over 300 wines to choose from too! If you want to dine where the locals go, head for this spot. Ask For Luigi Is Italian your thing? Ask for Luigi is a casual Italian restaurant known for exceptional service. The pasta is handmade, and there’s a whole host of family–style dishes that would be criminal not to share! Bao Bei There’s plenty to choose from if you’re looking for traditional Chinese restaurants, but Bao Bei is top of our list. You’ve got a lively atmosphere and the chance to share a feast of inventive or traditional small plates. Hawkesworth We couldn’t end our list without offering up a bit of glamour, which you’ll find plenty of at Hawkesworth. Think a mix of contemporary Canadian cuisine with a touch of Asian influence. Our recommendation – the tasting menu!
The Five Best Restaurants in Vancouver If you’re visiting Vancouver as a foodie who wants to know the best of the best—rejoice! We’ve got five of the best right here for you to add to your list. Because Vancouver is such a culturally diverse place, you’ll find incredible food from all over the world—alongside a creative cocktail culture. Keep reading to learn our top picks.
8 | Green Mortgage
What You Need To Know Whatever your taste buds crave, you’ll find in Vancouver. From brunch to dinner to midnight snacks, this city is packed full of a foodie scene you won’t want to leave.
Newsletter |
Issue 12 Fall 2022
Alex Gattey
Account Manager
This month, we would like to shine a spotlight on a few more members of our Green Mortgage team! Without each and every person, our team wouldn’t be as wonderful, and we wouldn’t offer you all that we do. While many of you know Kyle as the face of Green Mortgage, there’s a big team behind him all working incredibly hard, and they’re the reason why GM is in the top 0.1% of Canadian brokerages.
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oes your dream day involve friends, a campfire, and a cold Peroni? If so, you’d probably get on incredibly well with Alex! As our charismatic account manager, Alex loves helping people with their mortgages and financing. He understands that the mortgage process is (let’s face it) stressful. That’s exactly why his main goal is to make the process easy and painless. As someone who helps our customers directly, we can guarantee that Alex is easy to talk to and will offer you genuine help with your queries. When asked why Green Mortgage is different from other mortgage brokers, here’s what Alex had to say: “We are experienced and diverse in our abilities. Whether you are purchasing your 1st or 15th property, Green Mortgage has the tools to help make it happen.” Talk to Alex, or other members of our team, to get started on your mortgage now!
Kate Riabenka
Account Manager
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s an account manager, Kate is dedicated. She loves taking the weight off her client’s shoulders and supporting them to get their properties financed. Here’s her response when asked why GM is different from other mortgage brokers: “Green Mortgage is one of the most experienced brokerages in Canada. What sets us apart? 80% of our clients are real estate investors, so the complexity of our clients’ files stands out. We work with planning their portfolios and setting them up for long-term success. Green Mortgage is a Trusted partner for Keyspire, REIN, REAG, and many other investment communities.” Kate knows that real estate is one of the best financial investments you can make, short or long term. With her love for the industry, you’ll find yourself enjoying the mortgage process (if not enjoying, at least tolerating) in no time at all! Here’s her final note on our company’s owner, Kyle Green himself: “Kyle Green always takes his time to make sure that his team has the knowledge and training to help the clients on a top-notch level. I really appreciate being a part of Green Mortgage!” When not found walking her dog or riding one of her many bikes you’ll find enjoying the company of her friends and family.
SEPTEMBER’S INCREASE Bank of Canada Raises Rates With a Target Rate of 3.25% In September the Bank of Canada (BoC) announced they were raising rates by 75 basis points, from 2.5% to 3.25%. The BoC continues to target inflation, and forecasts rates would need to rise further to get inflation to the Bank’s target of 2%. Rate Forecast Given the BoC’s history throughout Q1 – Q3 of ’22 and their bullish statements, you should expect further rate hikes in ’22 and ’23. Variable–Rate Mortgages If you have a variable rate mortgage or a home equity line of credit (HELOC), expect your rates and payments to rise accordingly, and budget for more rate hikes over the next 12 months. Fixed–Rate Mortgages If you have a fixed–rate mortgage, you won’t see a change in your monthly payment until your mortgage is up for renewal, make sure you are budgeting for higher payments. What You Need To Know We’re recommending that you buy sooner rather than later. Alongside increasing rates comes increase in demand across the housing market, and you’re probably better off if you can buy in ’22 rather than ’23. Get in touch with our team today to discuss your options and get your game plan on before rates increase again!
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Newsletter |
Issue 12 Fall 2022
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SIMPLIFYING MORTGAGE TRIGGER RATES AND TRIGGER POINTS What is a trigger rate, does it affect me, and should I care? If you have a variable rate mortgage or know someone with one, you’ll want to care. What’s Happening? If you stay up to date with our emails and content (make sure you’re following us on IG too!), then you’ll be well aware of the interest rate changes that have been made by the Bank of Canada (BoC). At Green Mortgage, we want to make sure you feel confident and up to date with future changes too. Which is why we’re going to give you some guidance today on a few Real Estate terms you might be hearing more about soon, if you haven’t already. The terms you’ll hear in the not–so–distant-future are trigger rates and trigger points, alongside variable and adjustable–rate mortgages. What Should I Know? Variable Rate Mortgages (VRM)—If the prime changes, the rates change to reflect it. Interest rate changes don’t typically change your mortgage payment. Adjustable–Rate Mortgage (ARM)—If the prime changes, the rates change to reflect it. The difference is that your mortgage payment will change as interest rates change. Trigger Rate—If interest rates rise to the point that your agreed interest and principal rates won’t cover the added charge, interest is deferred, and the total cost of your mortgage (principal balance) can increase until it hits the trigger point. Trigger Point—f the total cost of your mortgage (including deferred interest) exceeds the original agreed amount, then your lender will inform you and ask you to do one of three things. 1:
Make a lump sum payment.
2:
Increase the agreed principal and interest.
3:
Convert to a fixed rate mortgage.
What Borrowers Are Affected? Around 15% of the variable rate mortgages in Canada (taken between March 2020–March 2022) are in a group that will likely hit their trigger rates this fall, and possibly see payment increases. This is thanks to a mixture of two things. The recent interest rate increases by the BoC combined with the prime rate drops of March 2020. These drops have provided people with lower mortgage payments and lower trigger rates over the past couple of years. However, it’s also meant that this group has quickly reached their trigger rate now too. What Should I Do Next? If you’re reading this and think you might be in this group, don’t panic. Instead, contact Green Mortgage for support. We can advise you on the best options to take, before your mortgage payment has the chance to increase. If you have questions, we have answers. Green Mortgage’s main priority in uncertain times is to continue supporting you as you navigated your mortgage.
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Issue 12 Fall 2022
HOW DOES INFLATION AFFECT MORTGAGE RATES?
How Does Inflation Affect Mortgage Rates? For real estate in Canada to stop anything like the above from happening, the Bank of Canada (BoC) has a mandate to keep inflation at 2% per year. This is achieved through targets that control the amount it costs for banks to borrow from each other over the course of just one night. By monitoring these overnight rates, banks can raise or lower interest rates to match and cover costs. In theory, higher interest rates stop people from borrowing money, slows their spending, and makes them more likely to save. The results should slow inflation. How Are Variable and Fixed Rate Mortgages Affected? Variable Rate As interest rates raise, variable rate mortgages are directly impacted because their rates shift up and down as their banks prime rate does. So, the higher the BoC raises their interest rates, the higher your mortgage rate would go immediately. If you currently have a variable rate mortgage, you might have already noticed a raise in your monthly payments.
If the last couple of years hadn’t dealt us enough curve balls to manage—now we’ve got inflation to contend with too! From gas prices that leave us wincing at the pump, to our weekly grocery shop (heck, we can’t even enjoy a basic bottle of vino!), Everything is raising in price. For those of you who are also planning to get on the property ladder, know that inflation will affect your mortgage too. How your mortgage will be affected by inflation, and what you can do to lessen the blow!
Fixed Rate With a fixed rate mortgage, you’ve your rate locked in, and it won’t be affected when rates go up or down until your renewal period. If you’re planning on getting a fixed rate mortgage in the future or renewal is approaching, know that the interest is likely to raise up slowly in future months to match rising prime rates.
What Is Inflation? Let’s get something clear: inflation isn’t inherently a bad thing. Some inflation is a sign of a healthy economy. It’s when inflation rises too steeply that things get out of hand. As everything raises in price to keep up, the value of the dollar drops. If it drops too far, we enter a recession. I’m sure over the years you’ve seen other countries face a situation where their currency has dramatically fluctuated and almost become completely worthless; with Argentina, Indonesia, and Turkey leading that race.
What Mortgage Type Is Right for Me? In terms of choosing a variable or fixed rate mortgage facing the current economy, fixed rate will always bring you more stability. Once you lock that rate in, that’s it, and you won’t need to worry about your payments going up for the next few years. However, the gap between fixed and variable mortgage rates is 1.5% right now, and it would take significant growth (0.75%+ for 5 years) for a variable not to be worthwhile.
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What Can I Do Now? Renew Early If you’re fixed rate, see if you can renew early without a penalty —it’s possible! You might end up with a higher monthly price overall, but it’ll reduce the chances of you being even more shocked later as rates raise. Fixed vs Variable Leading on from the above, if you’re fixed rate it may even be better for you to swap to variable at renewal. I know you like knowing what your payment will be each month, but variable rates are still significantly lower than fixed. Make Extra Payments Can you afford to make extra mortgage payments? If you can—do! This way you can reduce your interest and your overall term. Be Prepared Accept the unavoidable. This is a little more tough lovin’ on our part, but mortgages are going to be more expensive no matter what you do. If you accept this, prepare, and go with the flow, it might make you less stressed. The plus side? We’ll let you know when we find one! What You Need To Know These raising rates aren’t going anywhere for the foreseeable. But we don’t believe that this should stop you from getting on the housing ladder or investing in properties. If you go into this with clear eyes, up-to-date knowledge, and a clear vision, you can easily ride the waves of inflation. If you know you need support on this one—contact Green Mortgage now. We’re used to navigating choppy waters and can find a lender who’ll float your boat and give you the best rates possible in these uncertain times.
This is a little more tough lovin’ on our part, but mortgages are going to be more expensive no matter what you do. The plus side? We’ll let you know when we find one!
THE SEVEN DIFFERENCES BETWEEN CANADIAN AND AMERICAN MORTGAGES If you’re setting your sights stateside and planning on bringing your lacrosse stick, canoe, and maple syrup across the border to new horizons, you’ll need to know more about what an American mortgage looks like!
APPLICATION REQUIREMENTS This factor is actually pretty similar, with both Canada and the US wanting to know more about your income, assets, liabilities, investments, the type of property you’re buying, and proof of employment. One main difference with the US is that they also want to see your country of residence. PROCESSING TIME Here’s a pretty big difference for you, and something you’ll need to factor into your move. In Canada, the average processing time is 5-10 days, which is pretty darn fast! In the US, you’re looking at 40-45 days – you read that right! So, if you were planning on getting things through in a week or two, best to expand your timeline. REQUIRED DOCUMENTATION You’ll be happy to know that there isn’t much difference between the documentation you’ll need for Canada and for your move to the US. MORTGAGE INTEREST In Canada, your current norm will be that your interest isn’t tax deductible. However, when you go to the States, you might find that it is deductible against your income tax – a nice bonus if so! DOWN PAYMENTS In Canada, they dramatically range, 5 – 20% plus based on purchase price, for your conventional mortgage – the same as it is the in the US! In both countries you can also find differing loan programs, both requiring 5% as the lowest down payment. The biggest difference in the US, they won’t qualify your purchasing power based off a mortgage stress test. CLOSING COSTS The typical range in Canada is 1.5% - 4% of your purchase price, with 2.5% as the average. This is driven by your land transfer tax and the legal fees you pay. In the US, the typical range is 3% - 6%, with 4% as the average. PORTABLE LOANS While both neighbouring countries have portable mortgages, the major advantage south of the border is the mortgage term length. While a 3- or 5-year fixed-rate mortgage might be considered long in Canada, a 25- or 30-year fixed-rate mortgage can be the norm in the US. WHAT YOU NEED TO KNOW If you already own a home or two in Canada, you shouldn’t find the mortgage process that much different when you come to climb the US property ladder.
For any further advice on your US mortgage – contact our team! We might be on a different side of the border, but we’ll happily support you as you head stateside.
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CANADIANS MOVING TO THE USA: Wanting to make your move across the border as rewarding as possible financially? You’ll want to take a look at how you can build your credit score there! With a decent credit score, doors are opened, banks smile as you approach them, and it’s easier to purchase properties and invest there.
If you can’t transfer your score, you’ll need to get a secured credit card—the kind that helps people with minimal credit history. This kind of card does require you to put down a cash deposit, and your spending limit will depend on how high that deposit is. Only choose a supplier who reports your payment history to Equifax, Experian, or TransUnion. If this doesn’t happen, your credit card won’t build your US credit score. Get A Co–Signer If you’re struggling to get a credit card or credit–based product, applying with a co–signer who already has credit in the USA could give you a leg up, as you benefit from their good history. Just make sure you don’t choose your sibling or in–law who never seems to buy their round of drinks! Remember, that is someone co–signs they’re responsible for your debt if you can’t pay it.
FIVE SIMPLE STRATEGIES TO BUILDING CREDIT IN THE USA. Transfer Your Credit Score To The USA We’re not saving the best until last here—this is the biggie, and something you should definitely place on your priority list. Being able to transfer your existing credit over gives you a big leg up in every other financial goal you might have planned. Once you’ve got everything moved over, that’s when you can begin to build credit history with a bank.
Have Patience And Pay Up If you want to prove that you’re good with your dollar dollar bills y’all, our top rule for you is paying on time! Make your payments when you need to, and you’ll build a good credit score. Be sure to use your credit card and pay it every month too—don’t just pretend like the bill was sent to the wrong address.
Get On Board With A Bank Before you go choosing any bank though, consider what you want from it. Do you prioritize friendly staff and decent online support over anything else? Will you be needing access to cash at 3am from an accessible ATM (the less we know there, the better)? What’s your stance on the fees you’ll pay? Think about all of this and then make your decision. Whichever bank you choose, having an account will build a local credit history and help you get credit cards, mortgages, and loans when you need them.
After this, it’s all a matter of waiting for those numbers to build up. Being honest, it can take years to get you back to where you were originally if you aren’t able to transfer anything, but with perseverance, support, and the right information you’ll get there! What You Need To Know More than anything, building credit in the USA is about spending first! If you don’t spend any money or take out any form of credit or loan—how will a bank or a lender know you can be trusted in the future? Don’t be afraid to get yourself a credit card, somewhere to rent, or even a co–signer. If you show you make those payments on time, and you’re dedicated to building history, you’ll build a good credit score.
Apply For A Credit Card Whether or not you’re a credit card lover, there’s no denying that they’re a decent way to prove your creditworthiness and build your score up. If you’re able to transfer your credit score over and your original score is decent, you shouldn’t have issue with banks. Use your card to help you deck your new digs or buy you a work-drobe for your fancy new job, and then prove you can pay it. You’ll build credit in no time!
Want more financial support on your move from Canada to the US? Green Mortgage can help! Although we don’t know how you’ll live without your double–doubles, we do know how to help you make your finances work just south of the friendliest country in the world!
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FIVE STEPS TO GETTING AN AMERICAN CREDIT CARD
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Open A US Bank Account You don’t necessarily need a US bank account to apply for a credit card as a Canadian citizen but having one can make dealing with your finances much easier. You don’t need to worry about currency conversion fees, and it makes it easier for managing your salary, savings, and payments. Establish Your Address To apply for a credit card, you don’t need to have a US address, but it does make things easier. If you’re still not sure what your abode will look like, you can try applying with your Canadian address. However, even if you’re living in the US somewhere temporarily, it’s better using a US address, you can always change your addresses as you move. Obtain Your Numbers Namely your Individual Taxpayer Identification Number or Social Security Number. These will be used to verify your identity and credit history – the building blocks to getting approved for a credit card. No credit history means less trust factor for providers! Check Your Credit Report and Score Your credit score is given the most weight when making credit decisions, so it makes sense that you check your credit score to know where you’ll stand with different providers. You’ll then know whether you can go for providers who distinguish cards between scores. With your credit report you’ll also be able to look for any inaccuracies or errors that could negatively impact your score. Find The Card You Want To Apply For There’s plenty to research and compare between the variety of US cards out there. To make the best choice you need to factor in things like: • What you’ll use the card for—day–to–day, big purchases, travel? • How you’ll pay off the card—will it be maintained month–to–month or big one-off payments. •
What kind of annual fee are you willing to pay?
• Do you want any benefits like rewards, points, or low interest on specific purchases? Through this, you can scale down your choice.
What You Can Do If You Face Rejection From Providers There’s always the chance a lender or two won’t give you the approval you need. If so, you can wrack your brain to figure out why, or you can get confident and contact the provider directly. You might have the opportunity to get the provider to reconsider, but you’ll have to show just why you’re a strong candidate. What You Need To Know If you’re all set to move and know your address, know you’ve a healthy credit score and history, and have looked up which providers you’d like to go with – congrats! You’re all ready to apply for a US credit card. What will you use the credit for? Improvements at your local Lowes…treating the kids to a day out in your new town…the US is now your oyster!
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USA Bank Account for Canadians: How, Why, and Where Whether you’re making a move stateside, or you’re planning to do some cross–border banking, you’ll need to learn more about US banks. Opening an account will bring a multitude of benefits, because as you’ll know with our favourite Canadian specific stores, sports, and traditions, they’re just not the same south of the border! How To Open Your US Bank Account Policies will vary from bank to bank, but all you really need to open a bank account is valid ID (passport, driving license, etc.), alongside your usual deets and your employment info. If you’re opening from a Canadian address, note that while you’ll be able to get an account, you might not gain every service, like online or mobile banking. That’s because you’d need a valid US social security number. Why Would You Open A US Bank Account? Aside from the simple “I work there,” or “I’m moving there,” lets dig a little deeper! You work within or own a business within the US: having a bank account within the US means that you can easily deposit cheques and make withdrawals without the issues of time and fees. You travel to the US frequently: If you find yourself enjoying time in the States a lot, having an account there means that you avoid having to convert from Canadian dollars to US and paying transaction fees. You can also make it easier to access your money. You own real estate in the States: Owning a bank account within the states will give you the ability to apply for US loans—which is much easier than navigating cross–border. Paying your mortgage is much easier too. You want to build a financial history within the US: If you’re planning on eventually moving to the US or you know you’ll need to try and get a loan there, taking the time to build a financial history is 100% beneficial. Where Can You Open Your US Bank Account? If you plan to open a US account while you live in Canada, here are your best options for great cross–border banking with benefits! TD Bank:
They’re partnered with TD Canada Trust.
RBC Bank: They’re partnered with RBC Royal Bank, and you can open an account online and immediately use your US address. CIBC US: They’re partnered with CIBC, and you can create the account with your US address. BMO Harris: They’re partnered with the Bank of Montreal. You can open an account over the phone, and easily change it to a US address. What You Need To Know The bank you choose to open a US account will depend on what you’re looking for most. Most of the time it’s best to go with your primary Canadian bank and use their US partner, but once you’re set up, you can switch. Some banks will offer better customer service, others offer great fees on wire transfers. Be sure to do further research, know all your options, and remember Green Mortgage is here if you decide to buy stateside.
ORDERLY HOUSING CORRECTION CONTINUES T
DR. SHERRY COOPER
here are many unusual aspects to the current housing correction, but fundamentally the most noteworthy is how orderly and non–chaotic it has been. Home sales have slowed, but so have new listings, so the price declines are more muted than we might have expected. This is not a housing collapse. It is a housing correction. We’ve seen little distressed selling, as most would–be sellers have lots of home equity and low mortgage rates—not anxious to buy new properties immediately. Moreover, with rents surging, most potential down-sizers aren’t keen to make that trade-off.
Chief Economist, Dominion Lending Centres Sherry is an award–winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.
The full effects of the most recent rate hikes have not yet manifested. Statistics released today by the Canadian Real Estate Association (CREA) show that the slowdown that began in March in response to higher interest rates continued in September. Home sales recorded over Canadian MLS® Systems fell by 3.9% between August and September 2022. From May through August, month-over-month declines have been progressively smaller. The September result marked a slight increase in the current sales slowdown that began with the Bank of Canada’s first rate hike back in March. While about 60% of all local markets saw sales fall from August to September, the national number was pulled lower by the fact markets with declines included Greater Vancouver, Calgary, the Greater Toronto Area (GTA) and Montreal. The actual (not seasonally adjusted) number of transactions in September 2022 came in 32.2% below that same month last year. It stood about 12% below the pre–pandemic 10–year average for that month
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“September was another month of lower sales activity, although, with many sellers also opting to play the waiting game, the market remains on the tighter side of balanced market territory,” said Jill Oudil, Chair of CREA. “It makes for an interesting dynamic, one that doesn’t really have many historical precedents. The market has changed so much in the last year, and the adjustment to higher borrowing costs is still underway.” “Up until recently, higher borrowing costs had disproportionally affected the fixed-rate space, with buyers able to qualify more easily if they went with a variable rate mortgage,” said Shaun Cathcart, CREA’s Senior Economist. “The Bank of Canada’s most recent rate hike in early September finally closed that door, so it was not a big surprise to see additional softness on the sales side. The important thing to remember is we’re still in the middle of a period of rapid adjustment, with buyers and sellers trying to feel each other out while a lot of people have had to take their home search plans back to the drawing board. As such, resale markets may remain on the quiet side for some time yet, with the flip–side of that coin being even more pressure on rental markets.” New Listings The supply of homes is still historically low. The number of newly listed homes edged back a further 0.8% on a month–over–month basis in September. This built on the 6.1% and 4.9% declines recorded in July and August, respectively, as some sellers appear content to stay on the sidelines until more buyers are ready to get back into the market. It was an even split between markets where new supply was down in September and those where it increased, with the most significant declines in the GTA offsetting the largest gains in British Columbia’s Lower Mainland. Unusually, new listings would be so listless during a housing slowdown. However, the CREA data only go back 42 years, when interest rates trended sharply downward. Sellers today typically have mortgages at far lower than current rates, which no doubt dampens their enthusiasm to sell. Distressed sellers apparently listed their homes earlier this cycle, with the rest remaining on the sidelines for now. That could change if interest rates rise substantially further, although the incentives to stay in place continue high. With sales down and new listings seeing a minor change in September, the sales–to–new listings ratio eased to 52% compared to 53.6% in August. The September 2022 reading for the national sales–to–new listings ratio was back on par with those in June and July and slightly below its long-term average of 55.1%. There were 3.7 months of inventory on a national basis at the end of September 2022, up slightly from 3.5 months at the end of August. While the number of months of inventory is still well below the long–term average of about five months, it’s also up quite a bit from the all–time low of 1.7 months set at the beginning of 2022. 26 | Green Mortgage
Home Prices The Aggregate Composite MLS® Home Price Index (HPI) edged down 1.6% on a month-over-month basis in August 2022, not a small decline historically, but smaller than in June and July. Breaking it down regionally, most of the monthly declines in recent months have been in markets across Ontario and, to a lesser extent, in British Columbia; however, in August, Ontario markets contributed most to the overall national decline. Looking across the Prairies, prices in Alberta appear to have peaked. Prices still rise slightly in Saskatchewan, while Manitoba recorded the only decline. In Quebec, prices have dipped somewhat in the last couple of months. On the East coast, the softening of prices confined to Halifax–Dartmouth is now also appearing in New Brunswick, Newfoundland and Labrador. By contrast, prices in PEI continue to edge ahead on a month–over–month basis. The non-seasonally adjusted Aggregate Composite MLS® HPI was still up by 7.1% on a year–over–year basis in August. This was the first single–digit increase in almost two years, as yea–over–year comparisons have been winding down at a brisk pace from the near-30% record year–over–year gains logged just six months ago. The Aggregate Composite MLS® HPI edged down 1.4% on a month–over–month basis in September 2022, not a small decline historically, but smaller than in June, July and August. Breaking it down regionally, most of the recent monthly declines had been in markets across Ontario and, to a lesser extent, in B.C. The standout trend in August and September was that quite a few of those Ontario markets saw monthly price declines get stopped in their tracks, mainly in the Greater Golden Horseshoe. In a few markets prices even popped up a bit between August and September. Looking across the Prairies, prices in Edmonton and Winnipeg are down a bit from their peaks, while prices are sliding sideways in Calgary, Regina, and Saskatoon. Similarly in Quebec, prices have dipped in Montreal but are mostly flat in Quebec City. On the East Coast, price softness that had been confined to the Halifax-Dartmouth area appears to now be showing up in parts of New Brunswick and Newfoundland and Labrador, while prices in Prince Edward Island have flattened out in recent months but have not yet moved any lower. The non–seasonally adjusted Aggregate Composite MLS® HPI was still up by 3.3% on a year–over–year basis in September, a far cry from the near-30% record year–over–year gains logged in early 2022.
Newsletter |
Issue 11 Summer 2022
US Inflation Surprises on the High Side in September In other news, US CPI data, released yesterday for September, show inflation remains stubbornly high, assuring another 75 bps increase in the US overnight policy rate when the Fed meets again on November 3. A closely watched measure of US consumer prices rose by more than forecast to a 40–year high last month, pressuring the Federal Reserve to raise interest rates even more aggressively. The core consumer price index, which excludes food and energy, increased 6.6% from a year ago, the highest level since 1982. From a month earlier, the core CPI climbed 0.6%. On the heels of a solid jobs report last week and record–low unemployment, the inflation data likely cement an additional 75-basis point interest rate hike at the Fed’s November policy meeting. Even more noteworthy, however, is that immediately following the release of the inflation report, the market assessment of the maximum overnight rate rose from 4.6% to 4.85% for March of next year, substantially above the current overnight rate of 3.25%. Bottom Line The Bank of Canada’s next policy announcement date is October 26, when we will likely see another hike in the overnight policy target of at least 50 bps to 3.75%. Much will depend on next week’s release of the September CPI report for Canada on Wednesday, October 19. All eyes will be on the Bank’s measures of core inflation, which have been stubbornly sticky at above 5% on average. If the data disappoint on the high side, we can’t rule out a 75–bps rate hike the following week. I believe both the Bank of Canada and the Fed will hike overnight rates further later this year and into next year. They are also not likely to begin to reverse these rate hikes until 2024. Dr. Sherry Cooper Chief Economist, Dominion Lending Centres drsherrycooper@dominionlending.ca
28 | Green Mortgage
Newsletter |
Issue 12 Fall 2022
credits in this issue
COVER
FIVE STEPS TO GETTING AN AMERICAN CREDIT CARD
Image: Monument Valley—Arizona USA—Bruce Loppnow.
PAGE: 21/22 Image: Close up of Credit Cards Item ID: PMVHNQK, Envato Elements License Code: E23LK96WBX Author Username: Rawpixel
IN THIS ISSUE Image: Pexels—Taryn Elliot.
Image: USA Flag—Unsplash—Lucas Sankey
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OUR LATEST NEWS PAGE: 5 Image: Images: Nojan Zandesh
PAGE: 6 Image: Unsplash—Anna Kaminova
VANCOUVER SIGHTS AND TASTES PAGE: 7 Image: Pexels—Brayden Law
USA BANK ACCOUNT FOR CANADIANS: HOW, WHY, AND WHERE PAGE: 23 Image: Map of USA with pinned travel destinations Item ID: BWGVMKX, Envato Elements License Code: XW5F673DHZ Author Username: Elisall PAGE: 27 & 28 Image: Cleveland, Ohio—Bruce Loppnow
PAGE: 6 Image: Unsplash—Jirayu koontholjinda
BACK COVER: Image: Unsplash—Micah Hallahan
SEPTEMBER’S INCREASE PAGES: 11 & 12 Image: Unsplash—Cole Keister SIMPLIFYING MORTGAGE TRIGGER RATES AND TRIGGER POINTS PAGE: 13 Image: Fingo—Business Credit Loan Item ID: 4A4LHXL, Envato Elements License Code: NRDULE8242 Author Username: Kerismaker HOW DOES INFLATION AFFECT MORTGAGE RATES? PAGE: 16 Image: Retro Scales ID: TNDNGQ, Envato Elements License Code: 3C9YAGM52N Author Username: iatsun THE SEVEN DIFFERENCES BETWEEN CANADIAN AND AMERICAN MORTGAGES Page: 18 Images: Pexels—Etan Tu and Unsplash–Nik Guiney CANADIANS MOVING TO THE USA PAGE: 2O Image: Unsplash—Jake Blucker
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Newsletter |
Issue 12 Fall 2022
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