VERICO Designer Mortgages

Many economists expect that the Bank of Canada will cut interest rates to a record low next week on January 20th to stimulate the economy. Its expected that the Bank of Canada will cut its rate by 0.50% to a record low of 1.00%. The Canadian Banks are expected to follow with a cut to their prime rates, which are currently sitting at 3.50%.

European Central Bank to cut its trendsetting interest rate to two per cent on Thursday.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Deadline March 2, 2009: Post Courtesy of Carolyn Moshtagh

As part of your financial security plan, a registered retirement savings plan (RRSP) loan can help you maximize your annual contribution or catch-up on unused RRSP contribution room. The loan:

• Reduces this year’s tax bill through an income deduction equal to the amount of your allowable RRSP contribution

• Gives you more money earlier to help grow your investment

• Potentially creates a larger nest egg down the road

An RRSP loan means more money works now towards your future retirement. With a convenient Solutions Banking™ loan, the process is easy.

Contact me today for details.

Carolyn Moshtagh
Financial Security Advisor
905-332-3400, ext. 245 office
416-500-9195 cell
Fax: 905-332-3999
carolyn.moshtagh@f55f.com

Freedom 55 Financial and design are trademarks of London Life Insurance Company.

TM Solutions Banking products and services are distributed by Freedom 55 Financial, a division of London Life Insurance Company and is a registered trademark of Power Financial Corporation. National Bank of Canada is a licensed user of these trademarks. Solutions Banking products and services are provided by National Bank of Canada.

The Bank of Canada on Tuesday cut its key lending rate by 75 basis points to 1.50%, more than many economists had expected. This is the lowest since 1958.

Lower interest rates, if passed on by the commercial banks, encourage businesses and households to borrow and spend for expansion and consumer goods, thereby stimulating economic activity.

The interest rate cut today by the Bank of Canada was this biggest cut since October 2001.

The record low for Canada’s key rate was 1.12 percent in 1958, a time when it was based on treasury yields rather than actions by policy makers.

The bank’s next scheduled date for setting interest rates is Jan. 20.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada is expected to lower interest rates this Tuesday… many economists are forecasting a half-point chop to their bank rate to 1.75 per cent, the lowest since 1960.

Interbank funding spreads have narrowed by more than half since mid-October. This is making it possible for banks to pass on the central bank rate cut to customers in the form of lower prime rates.

Prime rates are the rates for loans to banks’ best corporate borrowers and are the base for lending on everything from mortgages, lines of credit, consumer loans and car loans.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada governor Mark Carney said in a speech recently that the Canadian economy has deteriorated more quickly than he had anticipated, hinting strongly he will cut interest rates at the next meeting on December 9.

This is also the first time that the Bank of Canada has conceded that the Canadian economy could be headed for a recession. “Starting from flat growth in the first quarter of 2009 and the second quarter of 2009 … recession is a possibility for Canada,” commented Carney.

The technical definition of a recession is two or more consecutive quarters of negative economic growth. The Canadian economy contracted in the third quarter ended and is expected to contract again in the current quarter ended Dec. 31.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Finance Minister Jim Flaherty pledged today to triple the amount of mortgages the government can buy from banks to as much as C$75 billion.

The Canadian Gov’t, using its crown corporation, the Canadian Mortgage and Housing Corp. (CMHC), purchased $25 billion in mortgages last month.

Allow me to explain in simply terms what the government is in fact doing…

The gov’t via CMHC has insured many mortgages for the banks. In other words, CMHC has sold the banks default insurance on mortgages that the banks have provided to their clients, which guarantees that CMHC will cover any shortfall realized by the banks in the event of default by their clients. The banks issues these mortgages to their clients using their own money, and the bank waits for repayment based on the terms of the mortgage, as with any other typical mortgage.

As a result of the recent program announced by the Cdn Gov’t to purchase mortgages, CMHC is in essence purchasing mortgages from the banks that they have previously insured…. in other words, purchasing mortgages from the banks that they were already on the hook for. These purchases allow the banks to cash in these mortgages now (so that they can free up cash to ideally put towards lending to clients interested in new mortgages), while CMHC and the Cdn gov’t takes on no greater risk exposure for these mortgages since they were previously insured by them.

 Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada has hinted that they may cut interest rates again.

Early today in Toronto, Bank of Canada Senior Deputy Governor Paul Jenkins stated, “Some further monetary stimulus will likely be required to achieve our 2 percent inflation target over the medium term.”

The Cdn Central Bank cut its benchmark overnight lending rate to 2.25 percent on Oct. 21.

Some economists expect that the Bank of Canada will cut their overnight rate a half point to 1.75 percent on Dec. 9. This would be the lowest since 1960.

 Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.