Comments on: This and That # 100 http://www.canadiancapitalist.com/this-and-that-100/ Helping you invest and prosper Sat, 11 Feb 2012 18:51:59 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: pqrst http://www.canadiancapitalist.com/this-and-that-100/#comment-145772 pqrst Fri, 01 Aug 2008 02:32:49 +0000 http://www.canadiancapitalist.com/?p=991#comment-145772 We have a 0 down, 40 year mortgage to keep our payments low for now. As our earning power increases we will decrease the amortization or do lump sum payments. My fiance and I make a combined $150k per year, have no debt outside of our car loan, and we bought a $340k house, so no one can argue that we took a 40 year mortgage because we can't afford a house. It simply makes sense for us right now. I resent people saying that 40 year mortgages are for people who cannot afford to buy. You actually have to have a lower debt to income ratio and a higher credit score to qualify for a 0 down, 40 year mortgage than to qualify for a regular 25 year. We have a 0 down, 40 year mortgage to keep our payments low for now. As our earning power increases we will decrease the amortization or do lump sum payments. My fiance and I make a combined $150k per year, have no debt outside of our car loan, and we bought a $340k house, so no one can argue that we took a 40 year mortgage because we can’t afford a house. It simply makes sense for us right now.

I resent people saying that 40 year mortgages are for people who cannot afford to buy. You actually have to have a lower debt to income ratio and a higher credit score to qualify for a 0 down, 40 year mortgage than to qualify for a regular 25 year.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/this-and-that-100/#comment-142759 Canadian Capitalist Tue, 15 Jul 2008 14:42:53 +0000 http://www.canadiancapitalist.com/?p=991#comment-142759 DAvid: I look at the government guarantee of mortgage obligations as similar to CDIC coverage. The government provides this guarantee for the smooth functioning of the mortgage market. When a private mortgage insurance provider makes a loss, the government won't step in and assume their losses. Only if a provider defaults and can't meet their obligations to lenders will the government step in. My understanding is government backing for mortgages is provided in other major economies as well. DAvid: I look at the government guarantee of mortgage obligations as similar to CDIC coverage. The government provides this guarantee for the smooth functioning of the mortgage market. When a private mortgage insurance provider makes a loss, the government won’t step in and assume their losses. Only if a provider defaults and can’t meet their obligations to lenders will the government step in. My understanding is government backing for mortgages is provided in other major economies as well.

]]> By: DAvid http://www.canadiancapitalist.com/this-and-that-100/#comment-142660 DAvid Tue, 15 Jul 2008 01:47:13 +0000 http://www.canadiancapitalist.com/?p=991#comment-142660 CC: The Government pays 90% of GE Financial's insured losses. I consider that a subsidy! It also explains why the government (rightly) sets the rules, to protect the taxpayer, as you point out. DAvid CC: The Government pays 90% of GE Financial’s insured losses. I consider that a subsidy! It also explains why the government (rightly) sets the rules, to protect the taxpayer, as you point out.

DAvid

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/this-and-that-100/#comment-142641 Canadian Capitalist Mon, 14 Jul 2008 22:29:18 +0000 http://www.canadiancapitalist.com/?p=991#comment-142641 DAvid: I don't think it is a subsidy. The government backs mortgages and if default rates skyrocket the taxpayer is on hook. That's why finance sets out conditions under which it will back mortgages (i.e. require mortgage insurance for high loan-to-value mortgages, minimum downpayment, maximum amortization etc.). 72offsuit: Good point. VTI's MER has dropped by half over 5 years -- from 0.15% in 2003 to 0.07% now. But, the most popular ETFs these days are the fancy ones that charge higher MERs (fundamental indexes, bear market ETFs etc.). Eric: I'm not sure that there is anything we can do. They still offer free chequing and unlimited transactions. As long as the core offering stays free, PC Financial will be a very good choice. DAvid: I don’t think it is a subsidy. The government backs mortgages and if default rates skyrocket the taxpayer is on hook. That’s why finance sets out conditions under which it will back mortgages (i.e. require mortgage insurance for high loan-to-value mortgages, minimum downpayment, maximum amortization etc.).

72offsuit: Good point. VTI’s MER has dropped by half over 5 years — from 0.15% in 2003 to 0.07% now. But, the most popular ETFs these days are the fancy ones that charge higher MERs (fundamental indexes, bear market ETFs etc.).

Eric: I’m not sure that there is anything we can do. They still offer free chequing and unlimited transactions. As long as the core offering stays free, PC Financial will be a very good choice.

]]> By: Eric http://www.canadiancapitalist.com/this-and-that-100/#comment-142554 Eric Mon, 14 Jul 2008 13:21:09 +0000 http://www.canadiancapitalist.com/?p=991#comment-142554 Something should be done about the PC thing. I have an account with them and when I got it I remember asking about the fees thinking that it was just a bait tactic and in a few years that would start up with the fees "to serve me better". But they insisted, "no fees, EVER". It would be nice to refuse those fees and simply show them there original marketing material as justification. Something should be done about the PC thing. I have an account with them and when I got it I remember asking about the fees thinking that it was just a bait tactic and in a few years that would start up with the fees “to serve me better”. But they insisted, “no fees, EVER”.

It would be nice to refuse those fees and simply show them there original marketing material as justification.

]]> By: Jon202 http://www.canadiancapitalist.com/this-and-that-100/#comment-142128 Jon202 Fri, 11 Jul 2008 23:46:10 +0000 http://www.canadiancapitalist.com/?p=991#comment-142128 David, think regulated opposed to subsidized. Fortunately the gov't is doing the right thing in this case by ensuring those who can afford homes can buy a home w/o breaking the market. 72, it's true, the headline makes it sound like overall there are increases, but they do state it's the "average." But actually reading article only takes until the 6th line where they state the VTI is only .07%. David, think regulated opposed to subsidized. Fortunately the gov’t is doing the right thing in this case by ensuring those who can afford homes can buy a home w/o breaking the market.

72, it’s true, the headline makes it sound like overall there are increases, but they do state it’s the “average.” But actually reading article only takes until the 6th line where they state the VTI is only .07%.

]]> By: 72offsuit http://www.canadiancapitalist.com/this-and-that-100/#comment-142063 72offsuit Fri, 11 Jul 2008 20:31:13 +0000 http://www.canadiancapitalist.com/?p=991#comment-142063 I thought the article on higher ETF fees was potentially misleading. There were lot of new specialty ETFs in specific sectors, or double-long/double-short type funds, which have higher fees. It's not that individual ETFs are raising their fees, which the headline could easily lead one to believe. I thought the article on higher ETF fees was potentially misleading. There were lot of new specialty ETFs in specific sectors, or double-long/double-short type funds, which have higher fees. It’s not that individual ETFs are raising their fees, which the headline could easily lead one to believe.

]]> By: DAvid http://www.canadiancapitalist.com/this-and-that-100/#comment-142057 DAvid Fri, 11 Jul 2008 19:45:54 +0000 http://www.canadiancapitalist.com/?p=991#comment-142057 I stand corrected! Thanks for the info, as I did not realize the gov't was subsidizing the private mortgage insurance industry. DAvid I stand corrected!

Thanks for the info, as I did not realize the gov’t was subsidizing the private mortgage insurance industry.

DAvid

]]> By: Jon202 http://www.canadiancapitalist.com/this-and-that-100/#comment-142050 Jon202 Fri, 11 Jul 2008 19:11:24 +0000 http://www.canadiancapitalist.com/?p=991#comment-142050 The background paper for the mortgage insurance coverage says "Government-Backed Mortgages" but stipulates CMHC or private insurance. So no bank is going to lend money for a high-ratio mort. if it can't be insured: http://www.fin.gc.ca/news08/data/08-051_1e.html "... (whether issued by CMHC or private insurers) for high-ratio mortgages.." PC has slowly been adjusting their fees over the years, for items such as drafts, statements, transfers, etc.... but I think it would be suicide if they ever changed a monthly fee. The background paper for the mortgage insurance coverage says “Government-Backed Mortgages” but stipulates CMHC or private insurance. So no bank is going to lend money for a high-ratio mort. if it can’t be insured:
http://www.fin.gc.ca/news08/data/08-051_1e.html
“… (whether issued by CMHC or private insurers) for high-ratio mortgages..”

PC has slowly been adjusting their fees over the years, for items such as drafts, statements, transfers, etc…. but I think it would be suicide if they ever changed a monthly fee.

]]> By: ThickenMyWallet http://www.canadiancapitalist.com/this-and-that-100/#comment-142041 ThickenMyWallet Fri, 11 Jul 2008 18:05:51 +0000 http://www.canadiancapitalist.com/?p=991#comment-142041 Too bad about PC financial. Considering it is linked with CIBC, guess we are seeing the fall-out of all these decisions banks made on subprime and ABCP which also shows it takes 6-12 months for the banking mishaps to work through the system. Too bad about PC financial. Considering it is linked with CIBC, guess we are seeing the fall-out of all these decisions banks made on subprime and ABCP which also shows it takes 6-12 months for the banking mishaps to work through the system.

]]>