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Weekend Reading - July 11, 2008
Another week has blown by which means that it’s time to review some news and articles around the web.
Lets start with the news:
The Canadian government has changed the CMHC rules! 40 year mortgages have been reduced to 35 along with a minimum down payment of 5% instead of 0%. I guess they are trying to prevent real estate speculation and avoid what’s going on in the U.S right now.
I’ve written about the iPhone 3G before and even included their disgustingly expensive monthly plans. Rogers has bowed to consumer pressure and have added value to the data package. For a limited time, consumers can now get 6GB of data/month (alot!) for $30 which can be added onto any existing voice plan. This is MUCH better than the original 400MB offered.
Onto the Blogosphere:
WhereDoesAllMyMoneyGo explains the difference between American Options versus European Options.
My Dollar Plan lists 10 Important Tasks for Your Mid Year Checkup.
Consumerism Commentary tells us the correct way to pay off personal debt with “The Debt Avalanche.” Flexo’s method of paying off debt is also the method that I used to get rid of $40k worth of student loan debt in ~ 2.5 years.
Lazy Man and Money explains Finance 101: Good Debt vs. Bad Debt.
Canadian Capitalist explains the difference between the two Canadian index ETF’s XIU and XIC.
The Digerati Life gives us tips on how to Remodel Your Bathroom! Try 3 New Ideas To Freshen Up Your Bathroom.
The Sun’s Financial Diary asks Dow and S&P in Bear Market?.
Money Smart Life goes back to the basics in explaining how the stock market works.
Generation X Finance writes about Investors Selling Stocks in Favor of Fixed Accounts
Brip Blap encourages us to learn to think bigger.
Canadian Dream has some green ideas for his house in the article “The Eco House Project.”
7 Comments, Comment or Ping
1. WhereDoesAllMyMoneyGo.com
Thanks for the link FT - have a great weekend!
Jul 11th, 2008 @ 10:15 am
2. Chuck
One thing I’m curious to know about the iPhone. Did rogers shut off the iPhone’s ability to use free wifi or even the wifi in my house?
I’m totally in favour of the changes that CMHC made. Longer amortizations help prop up houseing prices. If standard 25 yr mortgages were the only product out there housing prices here (Toronto) would be much more in control.
Jul 11th, 2008 @ 10:51 am
3. FrugalTrader
Chuck, afaik, the WIFI functionality will remain intact. Which means that you can get free data providing that you are in any (open) wifi hot spot.
I’m with you on the CMHC changes. I wonder if these new rules will cool the real estate market even further.
Jul 11th, 2008 @ 10:56 am
4. Canadian Capitalist
Thanks for the link. Cheers!
Jul 11th, 2008 @ 11:08 am
5. newbie
I’ve been a little out of the world concentrating on working from home and my new family, so I have to ask what is going on in the housing market in the states ? Excuse my ignorance. (Other than lack of time I avoid the news because I have a hard time distancing myself, and gave up on CNN after Bush got in the last time. ) I think I heard something about a lot of foreclosures and a cross border shopping for houses.
It’s also the first I’ve heard about less than five percent down.. so I guess I didn’t miss much there. (-:
Jul 11th, 2008 @ 6:23 pm
6. FrugalTrader
newbie, basically a bunch of people bought expensive houses with teaser rate mortgages. As the mortgage rates correct back to normal, those homeowners are finding that they can’t afford the new payment. Thus, a bunch of houses are going for sale/forced sale creating a major buyers market with few buyers.
Jul 11th, 2008 @ 7:08 pm
7. AndyBuck
The real kicker with US mortgages is that they were allowed to include the estimated appreciation in your home’s value as part of the formula for the mortgage. At least, this is what I understand from what I have read and heard. This allowed lenders to lend money to people that otherwise would not have been able to afford a home in a certain area. As soon as the bubble burst though, and home prices sunk, suddenly no one could afford their mortgage anymore because this significant chunk of the asset had been removed.
Also, lenders were not required to verify income or assets of the applicants.
Thankfully, the mortgage industry is more tightly controlled in Canada. I, for one, am very happy that they have increased the requirements for a mortgage in Canada. I feel this will begin to make things reasonable again. I would love for them to reduce it to a minimum 10% down and maximum 25 year amortization. Who wants to mortgage 35 or 40 years of their life away? That puts you in your 60’s (if you purchase in your 20’s) before you have any hope of getting out of debt. Just brutal.
Jul 14th, 2008 @ 11:56 am
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