The Fed goes dovish

In recent days, stocks and the financial world have been abuzz with discussions surrounding recent announcements made by the Federal Reserve, particularly regarding inflation, interest rates, and economic growth projections. As a private mortgage lender serving the GTA and southern Ontario, we’re excited to break down these developments and their potential implications for our clients and the broader real estate landscape. So, let’s delve into the details and unravel what the Fed’s statements mean for Toronto homeowners and potential buyers.

Federal Reserve Chair Jay Powell’s March 21st remarks focused on the persistence of high inflation. Despite inflation remain elevated and rising gradually in the U.S., Powell emphasized that they haven’t fundamentally altered the narrative of gradual price pressure alleviation. This assertion is pivotal, indicating the Fed’s steadfast commitment to economic stability amidst inflationary pressures. For Toronto residents, this stance suggests that it will be difficult for the Bank of Canada to ease rates given the Fed will hold them at present. The Fed continues to take a cautious but proactive approach to managing monetary policies, which could influence mortgage rates and borrowing costs in the foreseeable future.

The Federal Reserve’s decision to maintain current interest rates despite U.S. inflation having increased for five consecutive months underscores its strategic stance amid evolving economic conditions. Despite initial expectations of three interest rate cuts this year, the Fed opted to uphold existing rates, signaling confidence in the economy’s resilience. This had stocks, gold, and cryptos soaring. Powell’s remarks emphasized the importance of continued caution regarding inflation and economic performance.

With ongoing discussions about inflation and interest rates, the Federal Reserve also provided updated economic growth projections. Forecasts indicate a robust outlook, with the economy poised to expand by 2.1% this year, more than previous estimates. Moreover, the unemployment rate is anticipated to remain low, hovering around 4% by the end of 2024. Tembo notes the strength of the U.S. labour market as indicative of the unlikelihood of the economy going into a recession – for now. You do not have a recession with a 4% unemployment rate. If a recession was coming, jobless numbers would be rising, this is not the case in the U.S. These positive indicators bode well for Toronto real estate, as a U.S. recession would pull Canada into one as well. This economic stability underpins continued demand for housing and strong investor confidence in the market’s resilience.

The Federal Reserve’s announcements underscore the interconnectedness of global economic factors and their impact on local real estate markets. While inflationary concerns persist, the Fed’s cautious approach to interest rate adjustments provides a measure of stability for borrowers and investors alike. However, it’s essential to remain vigilant and adaptable in navigating potential shifts in market conditions.

For prospective homebuyers and existing homeowners in Toronto, understanding the implications of the Federal Reserve’s actions is paramount. When the Fed cuts rates, the BOC usually follows. The vice versa is also true. While the current interest rate environment seems poised for cuts eventually, fluctuations in inflation and economic growth could influence mortgage rates in the medium to long term. As such, individuals seeking to purchase or refinance properties should consider consulting with Tembo Financial’s team to assess their options and develop strategies tailored to their financial objectives. Timing is critical, and real estate conditions vary across Ontario.

In light of the Federal Reserve’s announcements, prudent financial planning is essential for homeowners and investors in Toronto’s real estate market. Whether you’re contemplating a new mortgage, looking to consolidate credit, or exploring investment opportunities, it’s crucial to leverage expert guidance and market insights to make informed decisions.

The recent pronouncements from the Federal Reserve have sparked discussions and debates across the financial spectrum, with implications reaching far and wide, including Toronto’s booming real estate market. By keeping rates steady and signaling more openness to rate cuts in the coming months, the Fed has helped take equities to all time highs. As a leading mortgage lender in the region, we’re committed to providing our clients with the knowledge and resources they need to navigate these changes effectively. By staying informed, leveraging expert guidance, and adopting a strategic approach to financial planning, homeowners and investors can capitalize on opportunities and thrive in Toronto’s vibrant real estate ecosystem.

Will rates fall in 2024?

The end of 2023 saw the Bank of Canada maintaining its benchmark interest rate in the last three decisions, prompting a significant shift in market discussions from potential rate hikes to the anticipation of rate cuts. Tembo is noting that this broad discourse is present not only in Canada, but across the media spectrum in the U.S. Analysts have been closely monitoring language from the Fed in anticipation that U.S. rates will fall. This is especially timely given the interest costs on U.S. Federal Debt now exceed $1 trillion a year – a huge squeeze on U.S. finances.

Even Tiff Macklem, the Bank of Canada’s top policymaker, has recently hinted at the possibility of rate cuts this year. Despite ongoing warnings about potential rate hikes if inflation control progress falters, there seems to be a growing acknowledgment that adjustments may be needed.

The Bank of Canada’s swift increase in the policy rate, currently standing at 5.0%, up by 4.75 percentage points since March 2022, has created substantial pressure on Canadian households, businesses, and governments. This surge aims to curb inflation, leading many Canadians, especially homeowners facing mortgage renewals, to keenly monitor signs of the tightening cycle possibly coming to an end.

Economists in discussions with Global News are forecasting a policy rate decline for 2024. However, similar to Macklem and his colleagues, they approach these predictions with caution. Experts suggest that the journey back to the central bank’s two percent inflation target might encounter obstacles, potentially delaying the timeline for interest rate cuts in the coming year.

Macklem, in a year-end speech at the Canadian Club in Toronto, commended the significant progress made in cooling inflation. He expressed satisfaction with the outcome of the second year of monetary policy tightening, asserting that the economy is no longer overheated, alleviating inflationary pressures.

As of November, the annual inflation rate is at 3.1%, a notable decrease from the 41-year high observed in June 2022. Expectations of inflation dropping below three percent in November were surpassed, with persistent price pressures noted in groceries, shelter, and some services.

After Macklem’s speech, he stated in an interview with BNN Bloomberg that the Bank of Canada anticipates interest rates coming down at some point in 2024. Emphasizing the necessity for sustained progress in core inflation metrics before committing to rate cuts, Macklem’s counterpart in the U.S., Jerome Powell, was more straightforward, announcing the expectation of three rate cuts in 2024.

Following the November inflation data, many economists on Bay Street reiterated their predictions for rate cuts. While some forecast cuts by June, money markets indicate cuts as early as April. However, Derek Holt, Vice-President and Head of Capital Markets Economics at Scotiabank, remains unconvinced, citing potential risks that point more towards another hike than a shift to cuts.

Housing market concerns and geopolitical tensions are shared by Holt and the Bank of Canada. The governing council’s meeting minutes on Dec. 6 expressed worries about easing monetary policy prematurely, potentially triggering a rebound in housing activity. Despite the concerns, some borrowing costs have already started decreasing, with five-year fixed rates on insured mortgages falling below five percent in December.

Holt argues for the Bank of Canada to maintain its tightening bias, expressing concern that signaling an end to hikes could fuel expectations of rate cuts. Relief on mortgage rates, coupled with constrained housing supply and increased demand after a year of robust job gains and population growth, may result in a heated spring market.

Apart from real estate, potential disruptions in the inflation outlook include geopolitical tensions in the Middle East. Concerns about supply chains and global inflation due to such escalations are reminiscent of the impact of the Russian war in Ukraine.

Looking at the global stage, Holt’s attention is on the 2024 U.S. election. He suggests that a second Donald Trump presidency could present challenges, with potential geopolitical risks to trade and supply chains. If these risks materialize, the Bank of Canada might face weaker growth and persistent inflationary pressure.

Wage growth remains a point of concern for Holt, with growth in the range of four to five percent considered excessively high in relation to inflation. The Bank of Canada has flagged these pay gains and productivity declines as inconsistent with the goal of bringing inflation back to target.

The Canadian labour market added jobs in 2023, despite a rise in the unemployment rate due to a growing workforce. Signs of cooling in the data are noted, and the trajectory of Canada’s overall economy holds sway over the central bank’s rate path.

Forecasts by Holt and Pedro Antunes, Chief Economist at the Conference Board of Canada, predict the Canadian economy avoiding an outright recession. Some forecasters anticipate a short, shallow recession for late 2023 or early 2024, but not with severe job losses. Antunes notes that if growth takes a more significant hit in the new year, the Bank of Canada may need to act swiftly.

Macklem’s year-end speech suggests that 2024 will be a “year of transition,” with difficult quarters ahead as growth slows, and consumers rein in spending. Despite the challenges, Macklem remains optimistic that the conditions for achieving the two percent inflation goal are increasingly falling into place.

Macklem predicts that by the year-end speech in 2024, the economy will be growing again, and inflation will trend back towards two percent. The Bank of Canada’s latest forecasts target annual inflation hitting that target sometime in mid-2025. However, Macklem acknowledges the difficulty of predicting the future and emphasizes the need for vigilance. Even modest rate cuts could have the capacity to supercharge the market and kickoff another bull run on prices. Let’s wait and see what happens, and if inflation will stay low.

The recession we’ve been waiting for is here

The Canadian economy is facing some challenges, and recent data from Statistics Canada suggests that we might be entering a technical recession. We’ve been writing about the possibility of this for years – literally. Tembo’s position was always consistent. With interest rates having been so low for so long, the moment the Bank of Canada chose to raise rates would spell the potential for an economic slowdown. Canadians instinctively understand this reality. We benefitted from low rates, and loose monetary policy gave us economic flexibility in tough times (the 2007-8 recession, COVID, etc.) But many of us knew it couldn’t last forever, and that eventually, we’d have to adjust.

This article will explain what the latest Statscan GDP data means and why it’s happening. We’ll use simple language to break down the situation for you.

A technical recession happens when the economy experiences two consecutive quarters of negative growth. It’s a sign that things are not going well in terms of economic activity. There’s no need to be alarmed yet, it’s important to note that the declines in the economy are still relatively small.

The Current Economic Situation:

According to the latest data, the Canadian economy remains relatively subdued. The latest jobs report released on November 3rd showed very modest overall national job growth, at some 18,000 new jobs created. Ontario lost jobs overall, and manufacturing employment in Canada’s largest province also declined. The preliminary GDP estimates for the third quarter suggests a small national contraction, which could mean a technical recession. We’re not 100% sure that this is the case yet, it’s just an estimate at this point of time.

Why is This Happening?

One of the major factors contributing to this economic slowdown is the rise in interest rates. When interest rates go up, it can discourage people from spending money, especially on high-cost assets. Higher interest rates mean that borrowing money becomes more expensive. Credit card expenses rise, people pull back on eating out, they invest less, they generally will save more and focus on paying down their debt. For those reading who have multiple debt products and lines of credit, consider a Tembo debt consolidation loan to turn several debt payments into one, and many debt products into one centralized, convenient loan. Clearing high interest debt products could raise your credit score.

Andrew Grantham, an expert from CIBC, believes that the Bank of Canada is unlikely to raise interest rates further because of the weak economy. This can be seen as a sign that policymakers are trying to prevent the situation from getting worse. Tembo agrees with this sentiment, and it’s our hope that the Bank of Canada does not continue to raise rates – the economy has slowed considerably, and inflationary pressures are stabilizing (but still not idea, obviously).

What to Expect:

If a recession does happen, it’s usually accompanied by layoffs and higher unemployment rates. However, this time it’s a bit different. Some sectors are experiencing layoffs, while others are trying to hire more people. This means that the quality of employment might change, with higher-paying industries letting people go while lower-paying sectors are still looking for workers. There are still a huge number of job vacancies across the country.

The unemployment rate, at 6.2%, is historically low. High immigration targets by the federal government show a desire to continue plugging those skills gaps and job vacancies with new workers from abroad, as our capacity to train new talent is insufficient. So, the labour market remains relatively strong and healthy, for the time being. There aren’t mass layoffs. Employers are generally looking for workers, not firing them. Not only that, but wages are increasing. Wage growth in October was at 5%. While this is inflationary, it shows how robust the employment situation is.

The Impact of Natural Disasters:

We should also keep the impact of natural disasters on the economy in mind. Forest fires and drought conditions are causing supply disruptions, which can lead to inflation. So, even though these events are slowing down economic activity, they might actually contribute to higher prices for goods and services.

Consumer Spending Affected:

One clear effect of rising interest rates is that consumer spending is taking a hit. Sectors like retail are feeling the pinch, even as the population continues to grow. This suggests that higher interest rates are influencing how people spend their money. Ontario lost almost 30,000 retail and wholesale trade jobs in October.

What’s Next:

The Bank of Canada has decided to keep the key interest rate steady to help the economy. The expectation is that high interest rates will continue to slow down economic growth, especially as more households renew their mortgages at these higher rates.

The Canadian economy is facing some challenges, and the possibility of a technical recession is a concern. Rising interest rates and other factors like natural disasters are contributing to this situation. It’s important to keep an eye on these developments and stay informed about the economy, as it can affect our daily lives, from job opportunities to the cost of living. The next GDP figures will confirm whether the downward estimates panned out. If we do enter an official, technical recession, it will be interesting to see what policies and direction cash strapped governments across Canada take.

Consider a private 1st private mortgage or a credit consolidation loan with Tembo

Tembo Financial has long been the trusted name for countless clients throughout Ontario, specializing in second and third private mortgages. Over the years, we’ve been able to provide our a clients with their 2nd and 3rd mortgage funds extremely quickly – often in as little as 48 hours. Tembo’s approach has always been marked by innovative and considerate solutions tailored to our clients’ diverse needs, all delivered with unwavering dedication to exceptional customer service. But now Tembo provides even more solutions to their clients: 1st private mortgages. Our private 1st mortgages are designed to empower individuals to realize their dreams of homeownership. We continue to provide competitive pricing and rates, rapid service, streamlined approval processes, and, as always, outstanding customer support. In a high interest rate era marked by 20 year high big bank mortgage rates, drawn out bank mortgage approvals and requirements, and the demand for flexibility, Tembo stands ready to assist you.

Additional advantages of a private 1st mortgage with Tembo include:

Customized Loan Terms: We can offer more tailored loan terms to meet your specific needs. This can include flexible repayment schedules, quick closings, dynamic term lengths.

Private Negotiation: When working with us, we can negotiate the terms directly with clients, potentially leading to more flexible conditions for your mortgage.

Investment Opportunities: We also finance investment properties and flip projects, which can be a valuable opportunity for real estate investors.

Opportunity for Credit Improvement: If you have credit issues and cannot qualify for a traditional mortgage, Tembo can assist you in improving your credit score while offering 1st mortgage solutions to buyers with bruised credit scores. For debt consolidation information continue reading below.

Flexibility in Eligibility Criteria: We are typically more flexible in our eligibility requirements, making it easier for individuals with unique or non-traditional financial situations to qualify for a mortgage. This can include self-employed individuals, those with lower credit scores, or those with non-standard income sources.

More and more prospective home buyers are being rejected at the big banks. Their incomes aren’t high enough, their credit scores aren’t high enough, or they simply can’t qualify at the big bank rates. CMHC data has been confirming this growing trend for some time now. If you’ve faced disappointment with a big bank mortgage application and feel that you’ve exhausted your options, don’t hesitate to reach out to us and consider a 1st private mortgage with Tembo. Inflation is still stubborn, and for now, it looks like the U.S. Fed will continue raising rates, so it’s highly likely that Canadian rates could go up again too. In this environment, explore your options, and right now, Tembo is your ideal choice for your first mortgage.

Credit consolidation loans

If one of the reasons you can’t get a private first mortgage is because you’re carrying too much debt, and your credit score isn’t good, consider our credit consolidation loan services. Credit card debt has hit an all time high in Canada at $107.4 billion in Q2 of 2023. Total consumer debt is at over $2.4 trillion, a sum larger than our entire annual economic output.

Savings are drying up and there’s a growing reliance for Canadian households. Inflation is not only impacting wallets but also denting consumer confidence. Equifax’s data reveals that 53% of Canadians express significant anxiety about their debt levels, and only half feel secure about their personal economic outlook, a decline from 61% in the previous year.

The recent surge in gas prices and consistently high food prices are adding to the financial strain on people. Unfortunately, these credit card balances are expected to continue increasing. Interest rates are poised to keep rising, and while the exact number of future rate hikes remains uncertain, it is evident that inflation rates persist stubbornly high. Elevated interest rates translate to higher borrowing costs for banks and lenders, which subsequently leads to increased interest rates on debt products.

For those wrestling with concerns about their credit card balances, it’s crucial to recognize that there’s a way to alleviate anxiety, reduce high interest expenses, and protect your credit score. The solution lies in a debt consolidation loan from Tembo Financial.

A Tembo debt consolidation loan is an excellent choice if you have multiple outstanding debt products such as unsecure lines of credit, credit cards, payday loans, and more. It allows you to consolidate numerous payments and products into a single, straightforward, and convenient payment. This will not only enhance your credit score but can also result in savings on interest payments, particularly as interest rates continue to climb.

It’s not only credit card debt that is on the rise; HELOC (Home Equity Line of Credit) balances are also increasing. HELOC debt across Canada is now well over $170 billion threshold. While HELOC debt had previously peaked in early 2013 at $200 billion, Canadians have been diligently reducing their HELOC balances. However, these amounts are now climbing again. A Tembo debt consolidation loan is a viable solution to clear both your credit card and Line of credit balances in one go.

For students with multiple debt products a Tembo debt consolidation loan can be a great option to consolidate everything into one payment and sometimes lower monthly payments. Call Tembo Financial today to learn more!

Consider a private 1st private mortgage or a credit consolidation loan with Tembo

Tembo Financial has long been the trusted name for countless clients throughout Ontario, specializing in second and third private mortgages. Over the years, we’ve been able to provide our a clients with their 2nd and 3rd mortgage funds extremely quickly – often in as little as 48 hours. Tembo’s approach has always been marked by innovative and considerate solutions tailored to our clients’ diverse needs, all delivered with unwavering dedication to exceptional customer service. But now Tembo provides even more solutions to their clients: 1st private mortgages. Our private 1st mortgages are designed to empower individuals to realize their dreams of homeownership. We continue to provide competitive pricing and rates, rapid service, streamlined approval processes, and, as always, outstanding customer support. In a high interest rate era marked by 20 year high big bank mortgage rates, drawn out bank mortgage approvals and requirements, and the demand for flexibility, Tembo stands ready to assist you.

Additional advantages of a private 1st mortgage with Tembo include:

Customized Loan Terms: We can offer more tailored loan terms to meet your specific needs. This can include flexible repayment schedules, quick closings, dynamic term lengths.

Private Negotiation: When working with us, we can negotiate the terms directly with clients, potentially leading to more flexible conditions for your mortgage.

Investment Opportunities: We also finance investment properties and flip projects, which can be a valuable opportunity for real estate investors.

Opportunity for Credit Improvement: If you have credit issues and cannot qualify for a traditional mortgage, Tembo can assist you in improving your credit score while offering 1st mortgage solutions to buyers with bruised credit scores. For debt consolidation information continue reading below.

Flexibility in Eligibility Criteria: We are typically more flexible in our eligibility requirements, making it easier for individuals with unique or non-traditional financial situations to qualify for a mortgage. This can include self-employed individuals, those with lower credit scores, or those with non-standard income sources.

More and more prospective home buyers are being rejected at the big banks. Their incomes aren’t high enough, their credit scores aren’t high enough, or they simply can’t qualify at the big bank rates. CMHC data has been confirming this growing trend for some time now. If you’ve faced disappointment with a big bank mortgage application and feel that you’ve exhausted your options, don’t hesitate to reach out to us and consider a 1st private mortgage with Tembo. Inflation is still stubborn, and for now, it looks like the U.S. Fed will continue raising rates, so it’s highly likely that Canadian rates could go up again too. In this environment, explore your options, and right now, Tembo is your ideal choice for your first mortgage.

Credit consolidation loans

If one of the reasons you can’t get a private first mortgage is because you’re carrying too much debt, and your credit score isn’t good, consider our credit consolidation loan services. Credit card debt has hit an all time high in Canada at $107.4 billion in Q2 of 2023. Total consumer debt is at over $2.4 trillion, a sum larger than our entire annual economic output.

Savings are drying up and there’s a growing reliance for Canadian households. Inflation is not only impacting wallets but also denting consumer confidence. Equifax’s data reveals that 53% of Canadians express significant anxiety about their debt levels, and only half feel secure about their personal economic outlook, a decline from 61% in the previous year.

The recent surge in gas prices and consistently high food prices are adding to the financial strain on people. Unfortunately, these credit card balances are expected to continue increasing. Interest rates are poised to keep rising, and while the exact number of future rate hikes remains uncertain, it is evident that inflation rates persist stubbornly high. Elevated interest rates translate to higher borrowing costs for banks and lenders, which subsequently leads to increased interest rates on debt products.

For those wrestling with concerns about their credit card balances, it’s crucial to recognize that there’s a way to alleviate anxiety, reduce high interest expenses, and protect your credit score. The solution lies in a debt consolidation loan from Tembo Financial.

A Tembo debt consolidation loan is an excellent choice if you have multiple outstanding debt products such as unsecure lines of credit, credit cards, payday loans, and more. It allows you to consolidate numerous payments and products into a single, straightforward, and convenient payment. This will not only enhance your credit score but can also result in savings on interest payments, particularly as interest rates continue to climb.

It’s not only credit card debt that is on the rise; HELOC (Home Equity Line of Credit) balances are also increasing. HELOC debt across Canada is now well over $170 billion threshold. While HELOC debt had previously peaked in early 2013 at $200 billion, Canadians have been diligently reducing their HELOC balances. However, these amounts are now climbing again. A Tembo debt consolidation loan is a viable solution to clear both your credit card and Line of credit balances in one go.

For students with multiple debt products a Tembo debt consolidation loan can be a great option to consolidate everything into one payment and sometimes lower monthly payments. Call Tembo Financial today to learn more!

Beating the Banks: Why Tembo Financial is your best bet in Ontario

If you’re a homebuyer in Ontario, you’re no stranger to the challenges that come with securing a mortgage. The decision to opt for a fixed or variable-rate mortgage is always a pivotal one. As is the reality of getting mortgage approval with a big bank – it’s not as easy as it used to be. Self-employed professionals, and people with lots of different credit products understand this full well. Banks are more conservative than ever, and they are stringent in qualifying people, especially with interest rates at 20-year highs.

In this uncertain financial landscape, private mortgage lenders in Ontario are emerging as the underdogs who can help you beat the big banks. Think of a private mortgage lender like Tembo Financial as another option in your toolkit. If you want financial expertise, real estate professionals, silky smooth customer service, tailored solutions to your financial challenges, and money fast, call us. We routinely deposit funds into our clients’ accounts often within 48 hours of approval. No one can beat Tembo Financial in providing funds to their clients quickly, period.

In this blog, we will discuss why exploring the services of a private mortgage lender like Tembo Financial is an excellent choice for Ontario homeowners.

Why Are Private Mortgage Lenders a Good Choice for Ontario Homebuyers?

Private mortgage lenders in Ontario offer a compelling alternative to traditional banks, particularly given the current state of the mortgage market. As variable-rate mortgages have become less favorable due to Bank of Canada interest rate hikes, the cost of fixed-rate mortgages has also climbed from their pandemic lows. This has created a unique scenario where borrowers are looking for a stable and flexible solution to their mortgage needs.

One of the primary reasons why private mortgage lenders are gaining popularity is their ability to offer more flexible terms. Borrowers who are struggling with the potential of rising interest rates are exploring private mortgage lending options. We understand that a one-size-fits-all approach doesn’t work for everyone, and we are willing to tailor mortgage solutions to suit individual needs. Do you need to renovate a home to increase its value for a sale? We can help you with a second or third mortgage for that. Do you want to access funds for a deposit on an investment property, or a condo for your kids, without tapping into your savings and assets? We can help. Do you want to consolidate a line of credit and several credit cards into one consolidated payment for ease and convenience? We can help – and that can potentially boost your credit score!

3 Benefits of Private Mortgage Lending in Ontario

Flexible Mortgage Terms: Private mortgage lenders in Ontario are known for their flexibility. Unlike traditional banks, which often have strict lending criteria, private lenders like Tembo can work with borrowers on a case-by-case basis. This means that even if you’ve been turned down by the banks due to your unique financial situation, we may still be able to help you secure a mortgage. We consider factors beyond just credit scores, such as the value of the property and your ability to make mortgage payments.

If you’re facing a power of sale scenario, keep in mind that big bank has one goal in mind: liquidate the property ASAP! They aren’t often interested in exploring other solutions. We can help you get more time, and more options to increase value, and to better your outcomes once the banks put your house in a Power Of Sale. This is a huge opportunity that Tembo helps clients with every day.

Quick Approval Process: Private mortgage lenders typically have faster approval processes than traditional banks. This can be especially beneficial for homebuyers who need to secure financing quickly. In a competitive real estate market like Toronto, being able to move swiftly can make all the difference in securing your dream home or taking out equity on an existing one. No one in the business gets you your money faster than Tembo. We help our customers receive funds from application to funding often in 48 hours!

Customized Solutions: Private mortgage lenders understand that every borrower is unique, and we are willing to create customized solutions to meet your needs. Whether you’re looking for a short-term mortgage or a more long-term commitment, we can tailor the terms to fit your situation. We are here to listen and to support you, no matter your circumstances. If we can help you, we will.

If you’re in Ontario looking for a mortgage, private mortgage lenders like Tembo Financial are an attractive alternative to the big banks. Our flexibility, quick approval process, and ability to provide customized solutions can make your journey to homeownership and financial freedom more accessible and less stressful.

In a time where interest rates are volatile, having the right loan for your unique situation is crucial. Don’t hesitate to seek out personalized advice from financial professionals to help you make the right choice for your specific needs and goals. With the support of private mortgage lenders, you can beat the banks and secure the financing you need to make your financial dreams a reality in Ontario. Call us today!

Toronto’s Shifting Real Estate Landscape: A Buyer’s Market Emerges

Toronto is officially once again entering a buyer’s market. However, a puzzling question arises: Where are all the buyers? Despite an influx of new listings, many properties are languishing on the market. Why is this happening?

According to the Toronto Regional Real Estate Board, the sales-to-new-listings ratio for September stood at 35.8 percent, the lowest it’s been since the fourth quarter of 2008. When this ratio falls below 40 percent, it signifies a buyer’s market, granting buyers more options and negotiation power. This shift has ushered in a rare period where prospective buyers need not fear making conditional offers. They now have the luxury of time to conduct thorough home inspections and back out if things don’t align as expected.

The driving force behind this shift can be attributed to interest rate hikes. Potential buyers are now required to qualify for mortgages at interest rates approaching nine percent, dampening their motivation to purchase.

Seller’s Dilemma

For sellers, this change in the market dynamic has been particularly challenging. Some are left with no choice but to list their properties, even if it means receiving offers at or below the asking price. While certain homes in coveted neighborhoods do receive multiple offers, bidding wars are no longer the norm.

Sellers are discovering that today’s buyers are less willing to engage in bidding wars, and they often submit their best offer upfront. There’s a sense of assurance among buyers that if they don’t secure a particular property, there are plenty of other options available. The fear of missing out that once fueled the market has waned.

John Pasalis, president of Realosophy, points out that while bidding wars have tapered off, over 50 percent of lowrise houses sell within the first two weeks of hitting the market, which is still relatively quick.

Challenges in the Condo Market

The condo market in Toronto faces its own set of challenges. Investors looking to offload multiple properties have inundated the market, leading to a surplus of options but a shortage of buyers. Condo sales have slowed down considerably, making it a less than ideal time for condo owners to sell.

Real estate professionals are having candid conversations with sellers, urging them to consider whether it’s the right time to sell. The prevalence of conditional offers, where buyers request numerous conditions, is a key factor in these discussions. In many cases, it’s in the seller’s best interest to hold off and sell when market conditions are more favorable.

The Surge in New Listings

One of the standout features of the current market is the surge in new real estate listings. In September, there were 16,258 new listings, a 44 percent increase compared to the same period last year. This influx of listings can be attributed to several factors, including high-interest rates, inflation, and uncertainty about the Bank of Canada’s future decisions.

Investors in the condo market have played a significant role in driving up the number of new listings. Additionally, homeowners in lowrise houses, facing the burden of high-interest rates, have opted to list their properties.

Ron Butler, a mortgage broker, emphasizes that these sellers aren’t distressed; they simply can’t afford to hold onto their properties anymore due to rising mortgage rates. They haven’t missed any payments but have made the difficult decision to sell.

Potential for Power of Sales

As the economy grapples with mounting household debt and job losses, there’s a possibility that power of sales—when a homeowner misses payments, forcing the lender to sell the property—could become more common. This scenario could unfold if household debt continues to rise, and job losses accumulate.

Tony Stillo, the Director of Canada Economics at Oxford Economics, warns that the housing correction is far from over. High mortgages, coupled with record unaffordability due to falling prices and high-interest rates, are causes for concern. Stillo predicts that Toronto’s home prices could fall by as much as 25 percent from their peak in February 2022 to mid-2024. This would bring the average home price in Toronto down to around $997,500 from its peak of $1.33 million. In September, the average home price in the city was $1.12 million.

While Canada isn’t currently facing a financial crisis on the scale of 2008, there are undeniable similarities, including high-interest rates and mounting household debt, which are causing apprehension among Canadians.

Toronto’s real estate market has undergone a significant transformation, transitioning from a seller’s market to a buyer’s market. The cooling effect can be attributed to rising interest rates, inflation, and a surge in new listings, particularly in the condo market. Sellers are facing the challenge of accepting offers at or below asking prices, while buyers now enjoy greater choice and negotiating power.

As we move forward in this evolving landscape, it’s essential for both buyers and sellers to carefully assess their options and seek advice from experienced real estate professionals. That’s where Tembo can lend a helpful hand! Call us today!

A Tembo debt consolidation loan can help boost your credit score

With interest rates at 20 year highs, consider combining high interest debt products into a single debt consolidation loan with Tembo. This can generate a substantial boost to your credit score by eliminating higher interest debt payments altogether, saving you monthly payments, offering you convenience and peace of mind. As a direct private mortgage lender located in Toronto, we understand the financial pressures that life can bring. After dealing with various expenses and financial obligations, many individuals often find themselves grappling with a pile of debts. This situation can become quite overwhelming, especially when combined with the rising costs of living in an uncertain economic environment. Credit card debt is at all-time highs as people manage the high cost of living, and rising interest bills. There is no better time to consolidate high unsecured debt, multiple credit cards, and other debt products into one, simple, convenient loan.

Presently, there’s a concern about the possibility of job losses due to economic fluctuations. It’s not ideal to carry multiple forms of debt, especially at today’s high interest rates, in such unpredictable times. Experts have been calling for a recession for some time. We don’t know how badly the economy will manage the weight of high interest rates, and we don’t know how long and well our economic and trading partners will fare. We are living through an uncertain environment. Nobody knows what could come next. Here’s where Tembo steps in with a solution. We believe that private mortgages can act as a useful tool for those seeking to consolidate their debts and enhance their financial stability.

The concept is simple but effective. By consolidating different high-interest debts into one convenient and flexible loan, you simplify your financial responsibilities. This also means you can also pay less in interest every month. As a result, more of your money can go toward paying off the actual amount you owe, reducing your overall debt. This positive action is likely to have a beneficial impact on your credit score all while providing peace of mind!.

One of the most significant benefits of utilizing a private mortgage for debt consolidation is how it can rapidly improve your credit score. When you put your various debts into a single loan, the interest you need to pay decreases. This helps you repay the main amount you owe more quickly. Paying off your main debt faster, alongside making timely payments, works in your favour by decreasing your total outstanding debt. Your creditors will see you wiping out your debts favourably, and as a sign of responsibility. This reduction, combined with regular payments, can give your credit score a positive nudge. Many of our clients have seen substantial restoration of their credit scores. In some cases. A better credit score can give you more financing options in the future.. This, in turn, makes it easier for you to qualify for loans from major banks in the future, like refinancing your mortgage.

We have assisted clients who’ve reported impressive and swift enhancements in their credit scores after utilizing a private Tembo debt consolidation loan to clear their debts. Moreover, improving your credit score through consolidating your debts could also open the door to lower interest rates or even help you access more of your home’s equity. For many individuals, refinancing their mortgage can free up funds, decrease their monthly payments, or expedite their debt repayment. By consolidating your debts and boosting your credit score through a private mortgage, you make the prospect of refinancing a more feasible choice for your financial road ahead.

Our team of seasoned mortgage professionals is at your service to help you identify the most suitable path for your financial requirements. We understand that every person’s situation is unique, and we’re committed to offering tailored advice and guidance that empowers you to make informed decisions about your finances. Whether you’re wrestling with debts or simply aiming to refine your financial standing, our goal is to help. Our approach is characterized by flexibility, creativity, and speed and transparency. Tembo’s promptness and exceptional customer service continues to serve our clients exceptionally well, earning us awards and recognition.

In conclusion, if you’re facing debt-related challenges, it’s worth exploring the potential benefits of a private mortgage designed for debt consolidation. By merging your debts into a single manageable payment, you can streamline your financial life, often reducing monthly interest payments, and can elevate your credit score. Reach out to us today to discover more about how a private mortgage could work in your favour. Whether your aspirations involve mortgage refinancing or enhancing your financial stability, our commitment remains unwavering in helping you make the best choices for your financial journey.

Home bidding is still on steroids despite warnings of a slowdown

The bustling spring buying spree in Canada’s real estate market appears to have tapered off, with sellers still holding the upper hand in many cities. Robert Hogue, assistant chief economist at Royal Bank of Canada, highlights that the slower pace of sales growth signals a shift in the Canadian housing market’s recovery. Although national sales experienced a slight uptick of 1.5% in June compared to May, Ontario witnessed a 1.3% dip during the same period.

Hogue attributes the waning enthusiasm among buyers to two key factors: the Bank of Canada’s resumption of its rate hike campaign and unexpectedly robust price gains in certain markets during the spring. New listings in Canada grew faster than sales for the second consecutive month in June. However, a significant increase in supply is necessary to bolster historically low inventories, allowing buyers more options.

Despite the current scarcity of housing options in most markets, prices continue to appreciate rapidly. Hogue points out a 2% surge in the aggregate composite MLS home price index in June from the previous month. However, he expects this pace to moderate throughout the remainder of 2023, as higher interest rates begin to constrain buyers’ purchasing budgets.

Faisal Susiwala, a broker at Re/Max Twin City, observes that buyers in Ontario’s Kitchener-Waterloo and Cambridge regions are showing hesitation. Uncertainty surrounding rate hikes and the typical slowdown in market activity during July contribute to this caution.

In regions like Guelph, Ont., the market feels less frenzied due to a rise in supply and extended days on market. Aimee Puthon, a real estate agent with Coldwell Banker Neumann Real Estate, notes that some buyers are making offers contingent on selling their existing properties. She advises sellers to remain patient, as midsummer is typically a quiet period in the market.

However, Mr. Susiwala highlights a growing concern about homeowners who are struggling to cope with higher interest rates. He strongly advises those facing financial difficulties to work with their lenders to find a solution before reaching foreclosure. Homeowners who purchased properties in 2018 with a five-year mortgage term may face challenges when renewing their mortgages at significantly higher interest rates, leading to potential distress and an increase in property listings.

An additional pressure arises as homeowners forced to sell move into the rental market, causing rental prices to surge. Mr. Susiwala encourages homeowners to weather the storm and explore options such as borrowing from family members if possible, rather than panicking and selling at a loss.

As we move towards September, the Canadian real estate market faces new dynamics and challenges. The impact of interest rate hikes, changing buyer behavior, and the financial struggles of certain homeowners are likely to shape the market’s trajectory in the coming months.

Demand is still in the game and ironclad:

Now Tembo will prodile a townhome in the Queensway that sold over $360,000 over asking in April. In search of affordable options around The Queensway, first-time buyers found themselves drawn to a 25-year-old townhouse, meticulously prepared by realtors Ken and Jaime Ramsay. To ensure an appealing reception, the Ramsays embarked on a week-long makeover, including new lighting, fresh paint, and staging, which resulted in an impressive 96 visitors over seven days.

Recognizing the significance of positioning their listing against new construction options, Ms. Ramsay emphasized the goal of refreshing the property with a modern color palette. The team ensured that every detail was immaculate, instilling confidence in potential buyers that the townhouse was move-in ready, requiring no additional work. The efforts paid off tremendously, attracting a remarkable 23 offers and ultimately achieving a record sale price of $1.265 million – the highest ever recorded for a two-bedroom condo in the complex’s history.

In comparing their sale to a neighboring property’s transaction, it became evident that the Ramsays’ attention to detail and thoughtful presentation made a significant difference. Despite the other property being larger, with three bedrooms and an ensuite washroom, it sold in January for $1.2 million, making the Ramsays’ sale all the more impressive.

The success of this townhouse sale serves as a testament to the power of thoughtful enhancements and strategic marketing in the real estate market. It demonstrates how a well-executed makeover and an appealing presentation can captivate buyers, leading to exceptional results even in the face of strong competition. For first-time buyers and sellers alike, this story provides valuable insights into maximizing property value and achieving success in today’s dynamic real estate landscape.

Stop Power of Sale scenarios with Tembo Financial

In this article, we’ll explore the possibility of stopping power of sale default situations through a private mortgage loan with Tembo Financial. We’ll also discuss “stigma equity,” a Tembo Financial term, and what it is. In addition, we’ll outline why Tembo can help offer the option of not yielding to a big bank and settling for the first possible offer (what big banks generally prefer). Additionally, we’ll explore how we can collaborate with our clients to weather challenges, optimize market terms, and unlock hidden value.

Understanding Stop Power of Sale/Default

One of the standout features of a Tembo private mortgages is the ability to exercise stop power of sale/default provisions. Unlike traditional lending institutions, Tembo Financial specializes in providing the flexibility to work closely with our clients and borrowers facing financial hardships. When a borrower encounters difficulties in meeting their mortgage obligations, Tembo can offer alternatives such as paying out the bank, offer more flexible terms, extending the loan tenure, and ultimately provide a better market outcome. This approach helps our clients retain their property and avoid a big bank or big lender simply exercising power and sale and locking in the first possible transaction. There is zero flexibility in this option, and it severely limits the debtholder. Tembo’s solution lets the homeowner control their sale and maximize the sale price.

Unveiling “Stigma Equity”

“Stigma equity” is a Tembo Financial term gaining prominence in the private real estate lending landscape. It refers to the difference between the listing price for a home that is listed under power of sale price (often lower due to negative perceptions and the thought that the buyer can get a deal) and its true market value. Tembo specializes in working with our clients to harness stigma equity to their advantage. By collaborating with clients and offering tailored solutions, Tembo Financial can help revive, increase, or enhance the property’s value, bridging the gap between distressed value and its actual potential. We’ve helped countless clients use financing to payout the banks, reno their properties to increase value and allow the homeowner to control their sale despite being in financial hardship.

Rethinking Power of Sale for Banks

In conventional banking scenarios, the power of sale process can lead to rushed sales and lower prices to recover dues quickly. Tembo Financial, however, can navigate this differently. Instead of rushing into a sale, we can opt for more a deliberate and strategic approach aimed at maximizing value and allowing the homeowner to sell on their terms and not the banks!. We’ll get the banks off your back, and work with you to find the best option. Paying off the bank to extend their position and gain the necessary time to position the property more favourably in the market is our approach. This approach can result in a higher selling price.

Managing Power of Sale and Default

The ability to handle power of sale and default situations effectively is a hallmark of private mortgage lending. Tembo Financial has a personalized approach which allows us to engage in open dialogue with our clients. This enables us to craft solutions that align with the client’s circumstances.

Securing Better Market Terms

We often have a unique advantage when it comes to negotiating market terms. With a focus on individual property evaluations and a willingness to consider unconventional properties, we can provide tailored financing solutions that cater to a broader range of properties than traditional lenders.

Going Beyond the First Offer

Unlike traditional bank lenders, Tembo Financial has the luxury of time on our side. This means we can help clients avoid the trap of settling for the first offer that comes along during a power of sale situation. A big bank just wants to conclude the power of sale as soon as possible. They look at these transactions as numbers on a ledger. We are in the business of maximizing value for our client by allowing them to control the sale of their home.  By taking a strategic approach and assessing the property’s true potential, we can payout the bank and provide a short term loan so the client can sell quickly and alleviate the stress of a power of sale proceeding. This patient approach, coupled with the ability to offer creative financing solutions, sets us apart in the real estate landscape.

Tembo Financial and our private power of sale lending solutions can provide an alternative avenue for us to collaborate with our clients in a way that goes beyond the constraints of the big banks. The ability to exercise stop power of sale/default, diminish stigma equity, strategically manage power of sale all while helping the homeowner secure a favourable home across Ontario!.

The real estate market continues to evolve, and Tembo understands how to harness these advantages to help our clients during difficult times