Make Money Count

This episode does not constitute as financial advice. Past performance is not indicative of future results. See Offering Memorandum for details and risks. As of February 15, 2023, average return is 8.14% annualized since inception with DRIP and loan to value ratio is 52.3%.

The global economy is facing an unprecedented crisis, one that combines the worst aspects of both the 1970s-style stagflation and the 2008 debt crisis. This new phenomenon, known as the stagflationary crisis, is characterized by a combination of high inflation and low economic growth. In this article, we will discuss what a stagflationary crisis is and how it combines aspects of both.

We will also examine the potential responses of the Federal Reserve and the Bank of Canada to the crisis, as well as provide advice for investors on how to protect themselves against a potential recession, debt crisis, and out-of-control inflation. Finally, we will take a closer look at how rising mortgage rates have impacted housing affordability in Canada and what steps the bank is taking to monitor and proactively reach out to clients at higher risk of financial stress.

A stagflationary crisis is a unique economic phenomenon that combines the characteristics of both stagflation and a debt crisis. Stagflation is a situation where an economy experiences stagnant economic growth and high inflation. In contrast, a debt crisis occurs when many borrowers default on their debts, causing widespread financial instability. The stagflationary crisis combines these two problems. The result is a situation where the economy experiences high inflation and low growth, while simultaneously facing a debt crisis.

Historically, the Bank of Canada might respond to a potential debt crisis, stock market crash, or explosion in debt defaults by implementing a series of monetary policies. These policies may include lowering interest rates, purchasing government bonds, and providing liquidity to financial institutions. The ultimate goal of these policies would be to stimulate economic growth while keeping inflation under control. However, with inflation at its current levels, this may not be an option for the Bank of Canada for some time.

As an investor, there are several steps you can take to protect yourself against the potential recession, debt crisis, and out-of-control inflation. One strategy is to diversify your investment portfolio to minimize risk. Another approach is to invest in assets that tend to perform well during times of economic crisis. An investment like gold, or in mortgage investment funds, such as the Cannect MIC.

The actions of the Federal Reserve and the Bank of Canada during the crisis have been similar in many respects, with both central banks implementing a variety of monetary policies to stabilize the economy. However, there have been some key differences between the two banks, such as the Fed's preoccupation with contemporaneous and lagging economic indicators, which carries risks.

The rising interest rate has had a significant impact on variable-rate mortgage holders, with many experiencing higher monthly payments. However, the percentage of Canadians with variable rates is relatively low, with most opting for fixed-rate mortgages instead. But are banks taking steps to monitor and proactively reach out to clients at higher risk of financial stress? That is yet to be seen.

The potential risks of recession, debt crisis, and inflation are on the minds of many investors and economists today. However, by remaining disciplined, diversified, and focused on long-term goals, investors may be better positioned to weather short-term market volatility. Additionally, it is worth monitoring the impact of rising mortgage rates on the Canadian housing market and considering the actions and approaches of central banks like the Fed and the Bank of Canada.

Finally, investment opportunities such as the Cannect MIC thrive during times like these as property owners look for ways to access equity and get them through this economic time.

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0:00 - Intro

Welcome back to Make Money Count, hosted by the best mortgage brokers in the GTA, Cannect!

If your mortgage is up for renewal soon, you may be feeling anxious about the possibility of renewing your mortgage in a high interest rate environment. While it's true that interest rates have risen over the past year, there are still ways you can secure a mortgage with a low interest rate. In this blog post, we'll share some tips on how to renew your mortgage in a high interest rate environment.

First, it's important to shop around for the best mortgage rate. Don't simply accept the renewal rate offered by your current lender without doing some research first. By shopping around and comparing rates from different lenders, you can find a better deal that will save you money in the long run.

Second, consider getting a shorter mortgage term. While a longer term may seem more appealing, a shorter term can actually help you save money in the long run. A shorter term means you'll pay off your mortgage sooner and will likely have a lower interest rate.

Finally, consider speaking to a mortgage agent to discuss your options. At Cannect, we offer a range of mortgage solutions that can help you save money on your mortgage. In our recent podcast, we discussed some of these solutions in more detail, so be sure to check it out.

Additionally, we also want to remind our readers to contribute to their RRSP before March 1st. By contributing to your RRSP, you can reduce your taxable income and save money on your taxes. This can be especially helpful if you're worried about your mortgage payments in a high interest rate environment.

Renewing your mortgage in a high interest rate environment can be stressful, but by following these tips and consulting with a mortgage agent, you can find a mortgage solution that works for you. Don't forget to check out our podcast for more information and to contribute to your RRSP before March 1st to save money on your taxes.

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Toronto's best mortgage brokers are back with another episode of the Make Money Count Podcast. In this episode Marcus and Justin give an update to the economic responses of 2022. The topics of discussion: Inflation Surges, Interest Rates Rise, and the Housing Market Correction.

Overall, 2022 was a year of rapid tightening and inflation, with the economy remaining strong but certain indicators pointing towards a potential recession. The housing market also saw a correction, with affordability challenges leading to a rising outflow of residents from Toronto.

Follow along on the charts by visiting the episode page.

If you are in need of a home equity loan, Cannect should be your first contact.

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Welcome to another episode of Make Money Count, the podcast from the best mortgage brokers in the GTA.

As mortgage professionals, we know that this industry can be highly competitive and fast-paced. That's why it's important to have a strong team by your side, whether it's a group of brokers working together or a business partner you can rely on.

In this episode of our podcast, we were joined by Ben Ferguson, a top real estate agent with Matt & Ben Toronto Real Estate Team. A good friend who has been in the industry for over 20 years. As we reminisced about our careers, we realized that our friendship and mutual trust have been integral to Cannect's success in the mortgage industry.

Working with someone you enjoy being around and who you trust can make all the difference in the daily challenges and long-term goals of any industry. When you have a supportive team, it's easier to navigate the complex world of mortgage lending and take advantage of opportunities to grow your business.

But strong business partnerships aren't just about having someone to share the workload with. A mentor or someone to bounce ideas off of can also be invaluable in the mortgage industry. In our experience, good communication and collaboration are key to building a successful mortgage brokerage, or real estate team.

Ultimately, building strong, supportive relationships is essential in the real estate and mortgage industries. Whether it's a team of brokers or a long-term business partner, having a group of people you trust and enjoy working with can lead to long-term success and make the journey more enjoyable.

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Welcome to our episode on Canada's down payment assistance program and current pre-construction home prices! Cannect, Toronto's best mortgage brokerage, are here to provide you with all the information you need to make the best decision for your financial future. Whether you're considering a pre-construction home or looking for assistance with your down payment, we're here to help. With our expertise and knowledge of the Canadian mortgage market, we help you navigate the process and find the best solution for your needs.

Canada's Down Payment Assistance Program is a government-funded program designed to help Canadians purchase their first home. The program provides a grant of up to 5% of the purchase price of a home, or up to $25,000, whichever is less. The grant is available to first-time home-buyers with a household income of less than $120,000 per year. The grant is intended to help cover the cost of a down payment, closing costs, and other expenses associated with purchasing a home. The program is administered by the Canada Mortgage and Housing Corporation (CMHC). We cover it all in detail in the episode.

Further on the show we discuss if it's a good time to buy a pre-construction home. The uncertainty in the real estate market has people questioning. Pre-construction homes are often sold with a lot of assumptions. Therefore, some projections may not be that accurate in the current market. Additionally, the process of buying a pre-construction home can be complex and lengthy. It may be difficult to get financing. Finally, the value of the home may not appreciate as quickly as anticipated, leaving you with a property that is worth less than what you paid for it.

We invite you to listen to the podcast, where we discuss the ins and outs of down payment assistance programs. With the right knowledge, you can make the best decision for your home-buying journey.

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The best mortgage brokers in Toronto return! This week Marcus & Justin debate renting vs buying a home in this current market. With how much housing prices have declined and how much rental rates have risen, we have a question. Is it now cheaper to buy a property and build equity rather than paying all-time high rent prices? No matter the market, it is essential to examine these opportunities on a case by case basis. Have a listen to the episode to learn the math to help make the decision easier.

The team looks at an example in downtown Toronto where the monthly rent is $3000 and the purchase price is listed at $489,000. After putting 5% down as a first time buyer; a 5 year fixed rate of 4.8%; $1,292 in property taxes; and maintenance fees of $329 a month: you arrive at a monthly average cost of $3,192 a month. This is not much more than the $3,000 rent and you build equity at the same time.

We also discuss the over-reactions of the central banks when it came to stimulating the economy during COVID. They are now over correcting it with rapid rate hikes. This is what has put real estate prices in a difficult position. They rose to unattainable levels and now are falling back to earth. This will have tough consequences for those who purchased at all time highs and now are servicing the debt at unaffordable levels. Only once inflation slows down will the central banks pause these rate hikes and then pivot in the other direction.

Whether you're new to the city or you've been here for years, this video is a must-watch! We'll be discussing the latest trends in the Toronto housing market, and giving you advice on how to make the most of your investment.

Make sure to watch to the end to find out which option is best for you!

0:00 - Intro

Document: Buying Vs Renting In Toronto - Nov 2022

Transcript: Make Money Count 052 Transcript

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Toronto's best mortgage brokerage, Cannect Home Financing, returns with episode 051 of Make Money Count. This week, Marcus and Justin outline four reasons to buy a home during a recession. It may seem scary to take the completely opposite path of everyone else, but it can prove to be a great decision in the long run. Have a listen to this episode to hear these great reasons.

Over the last two years, interest rates have gone up drastically, which has made it much less affordable to buy real estate and service the debt on it. However, if the purchase price drops enough to counter this rate increase, you'll find that the math could balance it out. If you were willing to purchase a property when the 5-year fixed rate was 2.5%, how far does the price have to drop for you to still want to purchase when the 5-year fixed rate goes up to 5.5%?

Well, on a $500K mortgage, this extra 3% of interest is equal to $15K per year. Over the 5-year term, that is $75K, or 15% of the mortgage amount. This means that if you can purchase the property for 15% less than you were willing to pay for it a few years ago, it would negate the cost of the interest rate increase.

You make money when you buy something, not when you sell it. If you make a purchase when prices are lower, you are likely to set yourself up well for the future when others buy it from you. Over the long-term, property values trend upwards. So similarly to stock purchases, "buying on the dip" will set you up for success.

During a recession, the supply of housing available tends to exceed the demand. This means you don't have to settle for the wrong house because there aren't enough affordable options available. When supply exceeds demand, it means that there is more to choose from. Conversely, this leads to a lack of bidding wars and gets you much better price. No more buying a house next to the train station because it was the only affordable place you could find with a spacious backyard. During a recession, you'll be able to get that corner house you've always been dreaming of.

When the housing market is strong, it's actually a tough time to be a buyer. People line up to place offers on home, they sell in the blink of an eye, and they end up going way above asking price. During a recession, the tables turn. Agents are begging prospective buyers to check out an open house. The visits are on your schedule, not theirs. You can also take your time submitting an offer without fearing the home will be sold before you even leave the open house. If you can handle the stress of market uncertainty, the tradeoff will be much less stress in the home buying process.

It won't be easy to buy real estate in a recession, but was it easy to buy before the recession either? Buying a home has to be done when the time is right and a recession should not scare you away.

Episode Transcript: Make Money Count 051 Transcript - 4 Reasons To Buy A Home During A Recession

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It's the 50th episode of your favorite podcast Make Money Count! Toronto's best mortgage brokerage, Cannect Home Financing, outlines 5 ways you can make money during a recession. Investing during uncertain times can be scary, but when done properly and with the right research, there are still opportunities to make money. Always make sure you carefully evaluate the options and think about your specific goals and time horizon. Have a listen to the semi-centennial episode to hear them!

A lot of stocks have taken a beating over the last year, but some of these companies are still very profitable and will come out of this recession strong. Even some of the bigger names like Amazon and Meta are down over 50% from their all-time highs. This is one of the most fundamental rules of investing: buy low, sell high!

If you can handle the increased carrying costs facing real estate investors today and have a long term time horizon, similarly to buying good stocks, this is a good time to buy that property you've been eying at a discounted price.

Cannect Mortgage Investment Corporation has been preparing for tough times like this since inception. We motivationally align borrowers and investors by lending to good borrowers at a conservative LTV that have a probable and reliable exit strategy from the loan. This has resulted in a consistent return for our investors over the last ten years.

Market prices and dividends have historically yielded a positive return, but if you own stocks, real estate, or other market-correlated assets, shorting the market using puts or other investment methods can act as a hedge for your overall market exposure. It is also just a good way to make bets on short-term market downturns.

A lot of it comes down to the idea, startup costs, and execution, but starting the foundations of a new business during a recession can allow it to thrive when the economy turns around again.

Marcus also goes into the importance of investing in yourself. Whether it is going to school or starting a business, a recession is a great time to make an investment in yourself. It's one that will always pay dividends.

As stated in the episode, Cannect is not a financial advisory firm and the topics discussed do not constitute financial advice.

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Toronto's best mortgage brokers return for another episode of Make Money Count. They discuss how certain factors like delinquencies and rental rates may assist in stabilizing values with increased interest rates. They then dive into how the Cannect Mortgage Investment Corporation (MIC) has been prepared for economic conditions like these for a while due to conservative loan-to-values and prioritization of exit strategies. Have a listen to learn more about the current state of our mortgage fund.

It's the tough times like these that show how prudently MICs have been lending. Many are currently unable to lend because their funds are tied up into deals with no exit strategy. When the only exit is default, it is very difficult for not only the borrower, but the lender too. When deciding which MIC to invest in, give them a call and ask the tough questions like how often do they stress test for LTVs; how do they arrive at property values for their loans? If these answers don't satisfy you, the cloudy days will be extra cloudy for these funds.

Past performance does not guarantee future results. Prospective investors should rely solely on the Fund’s Offering Memorandum, which outlines the risk factors in making a decision to invest. Cannect MIC shares are sold through our exempt market dealer, Meadowbank Asset Management Inc. Not CDIC insured.

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Cannect MIC Investment Stats

Make Money Count 049 Transcript

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The best mortgage brokers in Canada, Cannect Home Financing returns with Make Money Count episode 048!

In this episode, we'll discuss the Bank of Canada's decision to raise interest rates again, and what this means for you as a consumer. We'll also discuss how you can make money count in the current economy by using smart financial planning strategies.

As a listener, you may be wondering what this means for the economy as a whole. The Bank of Canada has raised interest rates again, indicating that they are somewhat concerned about the inflation rate in Canada. This may mean higher prices for you as a consumer in the short term, but it also means that you should be aware of financial planning strategies that can help you make money count in the current economy.

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