Stephen Harper has kept one economic lynch pin, promoted two others, and brought in an untried new face — but his Conservative government’s message and policies remain the same.

The top economic minister, Jim Flaherty at Finance, was brought back to cabinet Wednesday in order to re-introduce the March 22 budget the opposition parties rejected.

Another, Tony Clement, leaves the industry portfolio where he learned to say no to Australia’s BHP Billiton in its attempt to buy Potash Corp, and moves upstairs to Treasury Board — where he will need to find $4 billion in annual savings by saying nyet to the public service.

Replacing Clement at Industry is former natural resources minister Christian Paradis, who now inherits the task of freeing up Canada’s telecom industry to foreign competition.

And Harper added a brand new player, British Columbia MP Ed Fast, to continue the job of negotiating free trade arrangements with the European Union and India, both already well on their way.

“Although a number of changes have been necessary and desirable, the new ministry is fundamentally about stability and continuity,” Harper told reporters after emerging from the swearing-in ceremony at Rideau Hall.

“I’m confident that the team that was just sworn in … will hit the ground running.”

For Canada’s business community, it’s full-speed ahead with the previously established economic agenda, with possibly a few minor delays while new ministers get caught up.

That agenda includes continuing to reduce corporate taxes, controlling government spending, and expanding trading opportunities in the U.S. and globally.

“My group will feel it’s pretty much steady as she goes,” said John Manley, president of the Canadian Council of Chief Executives, representing the country’s largest companies.

Manley, a former Liberal industry minister, said the portfolio will be an especially steep learning curve for Paradis because of the complex files dealing with a new copyright law, rules on foreign takeovers and opening up the telecommunications industry to foreign competition.

“But I don’t think there’ll be a lot of surprises,” he added. “I think the Conservatives pretty much laid out their agenda in the election campaign and the expectation is now that they are elected, they will get to work on it.”

Flaherty is the safest of bets as far as his immediate intentions. He has said he intends to introduce his budget — likely on June 7 — with only minor tweaks and keep the government on a deficit-elimination track over the next four years.

That’s one year earlier than the March budget calculated, but officials say the earlier deadline can be achieved by including savings from a new Strategic and Operating review, which they claim will cut spending by $4 billion annually.

The task of finding those savings through staffing cutbacks or even elimination of low priority programs falls on Clement, who many expect will be known as Dr. No in Ottawa.

Although not regarded as an economic portfolio, the appointment of John Baird to Foreign Affairs may be the most critical to Canada’s economic well-being, said Perrin Beatty, head of the Canadian Chamber of Commerce.

Coincidentally, Beatty said Baird was hired as a junior adviser on his staff when he was foreign affairs minister in 1993.

“I expect he’ll have more time than I did,” Beatty said of his brief stint during the short-lived Kim Campbell government.

Beatty called Baird a quick study and, importantly, someone who has the ear of the prime minister.

“We need to make real progress on issues like energy and border management and this is someone who will be seen by the Americans and other countries as someone who has the respect of the prime minister,” he said.

Neither Beatty nor Manley said they knew Fast, the new trade minister, but expressed confidence that free trade talks with Europe and India would not be disrupted. http://ca.finance.yahoo.com/news/Harper-signals-continuation-capress-3303407985.html?x=0

Canadian home prices continued their upward march in April, driven by strong investor demand in Vancouver, as cracks in the Toronto condominium market may be starting to appear.

The Canadian Real Estate Association said yesterday the average price of a home sold in April in Canada was $372,544, up 8% from a year ago. It was the third straight month that the average price rose 8% on a yea-over-year basis but the Ottawa-based group cautioned that the figure was skewed due to “surging multimillion-dollar property sales in selected areas of Greater Vancouver.”

The group also shrugged off slow April sales, which dipped 4.4% from March on a seasonally adjusted annual basis and 14.7% on an actual basis from a year earlier. The slow sales are said to have been driven by new mortgage rules that came into effect April 19 and made borrowing tougher, leading people to rush into purchases in March.

The same sort of impact was felt in April 2010. Purchases moved forward to avoid mortgage rule changes, higher interest rates were feared and the harmonized sales tax loomed in two provinces.

“This makes it difficult to compare,” said Gregory Klump, chief economist of CREA. “Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers. By contrast, higher-end homes sales in Greater Vancouver and Toronto had their best April ever.”

Worries about the sustainability of the housing market could be stoked by a report from Urbanation Inc., which monitors the Toronto condominium market. The group says more than 50% of condominiums purchased in the last year were by buyers who do not intend to occupy their units and plan to rent in many instances.

Condominium rents in Toronto in the first quarter of 2011 were $2.11 per square foot compared to $2.09 a year earlier, a 0.8% increase. Condominiums being registered now and ready to be occupied are priced for sale at $450 per square foot range while newer units are going for $550 per square foot.

“What happens when these newer units hit the market?” said Ben Myers, executive vice-president of Urbanation. “At $550 per square foot a 750 square feet [condominium] is $413,000. You put 25% down and you have a mortgage of $310,000. Take a five-year variable rate mortgage at 3% with 25-year amortization and you get $1,475 a month mortgage. Your condo fee is $345, property tax is another $345 and you are up to $2,200 in carrying costs. That’s a huge [operating] loss [given the average rental rate would bring in just under $1,600/month]. People are buying these for capital appreciation.”

Don Lawby, chief executive of Century 21 Canada, says the housing market has been affected by foreign investors — notably Chinese — who have reacted to tougher tax rules in their home country by investing abroad.

“They are buying investment properties and not just in Vancouver but to some degree in Ontario and Calgary,” said Mr. Lawby, adding many of those investors are not concerned with carrying costs. “They are not afraid to offer above price and they are not afraid to get into a bidding war.”

Nevertheless, Mr. Lawby says while these investors are skewing national averages, he maintains the overall numbers are small and the impact on the larger market minimal.

Toronto-Dominion economic analyst Leslie Preston said while April numbers present a market with falling sales and rising prices, she agreed market conditions were exaggerated by some one-time issues.

“I think the effect in April was a little larger and I would expect to see a bit of bounceback in May because of the decline,” says Ms. Preston. “But we have been calling for awhile now for a mild softening in Canadian housing markets overall this year, particularly as interest rates rise.” http://business.financialpost.com/2011/05/17/home-prices-continue-climb/

Canada’s fiscal advantage will only go so far in protecting the country against a debt crisis growing in the world’s advanced nations and Asia’s emerging economic powerhouses, Bank of Canada governor Mark Carney warns.

Trying out a theme he will likely take to Washington later this week, Carney told the Canadian Club of Ottawa on Monday that the world is in the midst of a major economic power shift and governments must prepare by getting their fiscal houses in order.

Advanced economies face a protracted period of slow growth as they struggle to come out from under a mountain of debt, while emerging economies such as China will face the opposite challenge of restraining inflation.

“In this environment, domestic macro stability is paramount,” he said in notes from the speech released prior to his address.

“Sustained fiscal adjustment is now required in most advanced economies. Debt-to-GDP (gross domestic product) in G7 countries is now the highest since the Second World War. The age of austerity is not a slogan but a timetable.”

The issue of debt in Europe and increasingly in the United States has become one of the key challenges for the global economy, both in the long and short terms.

Last week, Finance Minister Jim Flaherty took his concern about the U.S. debt situation to Washington, since what happens there has direct implications for Canada on everything from exports, to interest rates to the value of the loonie.

Carney said experience suggests when debt exceeds 90 per cent of GDP, economic growth will slow, and that is a situation facing most of Canada’s major trading partners, particularly the U.S.

Canada is one of the few advanced economies that is not in that position — debt to GDP is projected to start falling as both Ottawa and the provinces move to balanced budgets. But that doesn’t mean Canada won’t be sideswiped, as it was in the 2008 recession when a financial meltdown among other countries submarined Canadian exports, Carney said.

“Fiscal slippage by some major countries may increase interest rates for all,” he said. Moreover, if growth in the U.S. and Europe is slowed, Canadian exports will again feel the pain.

The governor gave no hint about his own long-term plans for interest rates in Canada, suggesting that he will not hike the policy rate on May 31.

The transformation in the world, with three quarters of growth coming from emerging markets, does present an opportunity for Canadians, Carney added, but so far the corporate sector has not taken full advantage of it. Emerging market growth has boosted demand for commodities, leading to higher prices that have stimulated production and investment in the Canadian sector, he notes.

But the corollary is that only 10 per cent of Canada’s exports go into these fast-expanding markets and taking commodities out of the equation, Canada’s exports share into these markets has been almost halved in the last decade.

“Increasing market share in emerging markets will require sustained efforts to develop trade, technical and academic partnerships,” he said. “In tandem, Canadian business needs to improve its competitiveness, source new suppliers and prepare to manage in a more volatile environment.” http://www.therecord.com/news/business/article/533033–high-debt-in-u-s-and-other-countries-will-impact-canada-as-well-says-carney

The Canadian economy is not only creating more jobs, it’s creating better jobs according to one of the country’s major banks.

CIBC’s latest employment quality index shows that 60 per cent of new jobs created over the past year would qualify as high-paying, quality jobs.

The bank says there’s been an increase in full-time and paid employment, as opposed to self-employment, over the past 12 months — helping push the employment quality index up 2.7 per cent.

The sharp improvement has come about because many of the 283,000 jobs created in the past year have been in relatively high-paying sectors, including manufacturing, finance, construction and the public service.

Previously, the new jobs created since the end of the recession in the summer of 2009 have tended to be part-time and in lower-paying service industries.

“This (quality) measure is roughly back to the pre-recession levels,” said economist Benjamin Tal. “This is a much better performance than a similar measure in the U.S., where the quality of employment index continues to soften despite some improvement in the pace of job creation.”

Canada’s employment record since the end of the recession has been among the strongest in the industrialized world with over 500,000 new jobs added since July 2009. That’s about 80,000 more than was lost during the 2008-2009 recession.

By contrast, the United States remains about six million jobs shy of its pre-crisis levels.

But despite the full rebound in the jobs market, the complaint had been that many of those new jobs were not of the same quality as the jobs that vanished. Some economists derided them as service industry McJobs, or part-time, or “forced self-employment” by those who create their own form of employment — usually lower paying — because they can’t find regular work.

Over the past 12 months, that trend has started to reverse. Almost all the new jobs have been in paid employment, not self-employment.

As well, growth in full-time jobs has outnumbered part-time by more than two-to-one, and well-paying jobs in manufacturing, construction, the financial sector and government have outnumbered low-paying jobs three-to-one.

The question is whether the new and better composition of job creation will continue. There is some evidence it might not, says Tal, noting of the 58,000 new jobs added last month, two-thirds were part-time.

“It’s clear that governments will not be hiring in the future and the housing market will not be as strong,” undercutting two of the sectors that have been producing high quality jobs, Tal explained.

However, the export sector, which tends to generate higher-paying jobs, is expected to be a leading engine of growth going forward and may be sufficiently robust to take up the slack.

The improvement in the quality of jobs has been good for the economy, the report states, since higher pay puts more money in the pockets of homeowners to spend on consumer goods.

“The impact of job creation on income growth and thus spending is currently more notable than it was in early 2010,” Tal said, which will put pressure on the Bank of Canada to hike interest rates in the second half of the year.

Canada’s economy also got a thumbs up Monday from the Organization for Economic Co-operation and Development, which forecast Canada would continue to be at the forefront of the global economic recovery.

In its May report on composite leading indicators, the OECD put Canada alongside China as countries with a “regained momentum in economic activity.”

Economies in the U.S., Germany and Russia are improving. Overall, the international think-tank says most European countries will experience a slower or stable expansion. Some, like Italy, Brazil and India are pointing to slower growth relative to their trends. http://ca.finance.yahoo.com/news/Canada-economy-creating-full-capress-867285997.html?x=0

The majority of Vancouverites who recently purchased or intend to purchase a condo say that if they had more money, they would prefer to buy a house instead.  The 2011 TD Canada Trust Condo Poll, which surveyed Canadians who are thinking of buying, or recently bought a condo, found that affordability of condos is a big attraction, especially in Vancouver (64% versus 46% nationally) and for respondents under 35-years-old (62% versus 46% for other age groups).  Vancouverites are more likely than those surveyed in other cities to say they would consider buying a condo with a friend to make purchasing more affordable. Condos seem to be viewed as a stepping stone into homeownership, with many planning to move in the not too distant future.  But, is this a good strategy?

“Especially if you are planning a joint purchase with someone, be clear about your timeline and have a plan in place for the eventual sale of the condo,” advises Barry Rathburn, Manager, Residential Mortgages, TD Canada Trust. “Further, if you are only planning to own a condo for a few short years, calculate the costs that you will incur, such as condo fees, parking fees and moving expenses and work this into your budget.  Depending on how soon you plan to move, these costs could outweigh the equity you’ll build and receive from the eventual sale of your condo. I understand the attraction of owning a property, but in some cases it can make more financial sense to continue to rent while you save for a down payment on the home you really want.” Home Sweet Home – but for how long?

Half of Vancouver respondents expect to live in their condo for three years or less (18%) or four to six years (32%).  Across cities surveyed, the number planning for a short stay is highest amongst respondents under 35.  Nearly one-quarter (22%) of respondents in this age group said they don’t plan to spend more than three years in their condo and another 45% plan to move after four to six years.

Has the tightening of mortgage rules affected the condo market?

Forty-nine percent of Vancouverites said the recent amortization change to 30 years for new mortgages had a significant impact on their decision to choose a condo over other types of homes.

Somewhat alarmingly, the poll found that more than one-quarter (26%) of those intending to buy a condo in Vancouver were not aware of the recent changes to lending rules. “Homebuyers need to have some understanding of the mortgage laws.  If you plan to buy a home, you can possibly save yourself a lot of money in the long run by understanding your options and making well informed decisions about the type of mortgage you choose and the amount of your down payment based on what you can afford,” says Rathburn.  “Familiarize yourself with different mortgage options, so you can weigh the pros and cons of each before making a decision.  There are experts at the bank who can walk you through different mortgage options and help you find the right solution for you, including a variety of flexible mortgage payment features, which can give you the choice to manage your mortgage payments, which is something that you may need in the future.”

What do Vancouverites look for in a condo?

Vancouver residents named good building security as the most important feature to look for in a condominium (98%).  Keeping with the theme of affordability, low condo fees was the second most popular answer (96%).    Eighty-four percent of Vancouver respondents said they were not willing to pay more than $400 in condo fees monthly.  These figures remain consistent with findings from a similar poll conducted by TD Canada Trust in 2010. Other important features were attractive interior design features, available parking and an energy-efficient building (all 93%).

Condos popular with downsizing pre-retirees:

Nationally, those over 50 are attracted to condos because they fit into their plans to downsize their home.  Not surprisingly, when those over 50 move into a condo, 31% don’t plan to move again.  Since they plan to stay put, many over 50 are making their condos as comfortable as possible, with 53% planning to spend more than $10,000 on upgrades (compared to only 15% of those under 35).

“Moving to a smaller, less expensive home can free up money to allow pre-retirees to make some upgrades and enjoy a bit more luxury in their space,” says Rathburn.  “It’s especially important for those who are selling their home to downsize as part of their retirement strategy to make a budget for any upgrades and stick to it. You don’t want to get carried away and spend all the extra money you earned with the sale of your previous home.”

Approximately half of Vancouver respondents are planning to make upgrades to their condo right away (48%).  One-quarter of Vancouverites say they will spend less than $5,000 on these upgrades, 51% will spend between $5,000-$10,000, 18% will spend $10,001-$15,000 and 7% will spend more than $15,000.

About the 2011 TD Canada Trust Condo Poll From March 25 to April 11, results were collected from 806 people in Vancouver, Toronto, Calgary and Montreal, through a custom online survey by Environics Research Group.  Responses were collected from 204 Vancouver residents. Respondents had either bought a condo in the past 24 months, intend to buy a condo in the next 24 months, or considered a condo when shopping for a home.

Canadians would like nothing more than to be rid of their mortgage debt, according to a new poll released by Scotiabank.

 Almost half of Canadians (46%) are saddled with mortgage debt; of those with a mortgage, a staggering 86% indicate that it is important to pay their mortgages expeditiously.

The key to reducing what for many is their largest debt, is to have a strategy in place. Stafford reminds mortgage holders to utilize methods like making bi-weekly mortgage payments instead of monthly to shorten amortization and reduce interest over time; increase payments over time, if budget allows for it, and increase payments slightly year-over-year.

Also, Stafford suggests employing a strategy not only for paying down debt- but for taking on debt as well. There is much focus on deciding how you are going to pay down debt- but it only makes sense to plan ahead when taking out debt as well. 

In doing so, the debt holder is able to only take out the debt that they need, and to contribute as efficiently as possible to paying it down quickly.

Most Canadians are already taking advantage of bi-weekly payments- 46 % choose to make payments every other week. However, there are still nearly four-in-10 (38 %) Canadians who are making mortgage payments either monthly or semi-monthly.

Similarly, many Canadians are already taking advantage of options to make additional payments wherever possible: “The study showed that the majority of Canadians (65 %) are able to make additional payments on their mortgage and 75 % of those actually do it. One-third of Canadians (33 %) make additional payments whenever they can afford to, one-in-five (20 %) make additional payments annually and 8% make extra payments monthly.

Canadian homeowners owe $220-billion on their home equity lines of credit, according to a study on the composition of the country’s mortgage market, with most of the money going toward renovations and investments.

The Canadian Association of Accredited Mortgage Professionals found in its spring survey that 5.7 million Canadians now have a mortgage, owing a collective $860-billion. In the last year, about 200,000 people managed to pay off their housing debt completely.

While the association has tracked mortgage debt for years, it is the first time it has broken out data on home equity lines of credit, which are loans taken out against the value of a home. The study found 15 per cent of mortgage holders took out equity in their home in the past year, with the average amount estimated at $30,000. The $26-billion was used for renovations ($9.4-billion), investing ($9.4-billion), debt consolidation ($5-billion) and the rest for “purchases and other purposes.”

The government made it more difficult for Canadians to access the equity in their homes in January, as part of a package of mortgage changes meant to cool down a hot housing market, saying it would no longer provide insurance on personal credit lines secured by homes.

The loans are still available, but the interest costs could move higher as banks take on greater risk.

The report also showed that Canadians are making larger down payments when buying a new home – with the average amount paid up front at 30 per cent, up from 26 per cent two years earlier.

And as policy makers worry whether homeowners will find themselves in trouble as interest rates rise, the study found that 63 per cent have fixed-rate mortgages that won’t change until their term expires. Thirty per cent have variable rates, which are more susceptible to interest rate fluctuations.

Meanwhile, only 22 per cent of all mortgage holders have amortization periods longer than 25 years. The government also clamped down on 35-year amortization periods in January, making 30-years the longest amortization period allowed. http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/debt-on-home-equity-lines-of-credit-220-billion/article2018424/

The Canadian Real Estate Association has been adjusting its forecast for 2011 as economic circumstances warrant, and on Monday took another crack at the numbers.

Its first prediction was made in February, 2010, when it said prices would fall 1.5 per cent as sales fell 7.1 per cent.

Monday’s numbers were rosier, as stronger than expected sales across the country and high prices in B.C. caused the trade association to amend its outlook to a 1.3 per cent decline in sales and a 4 per cent gain in prices.

Here’s how it got there:

Initial forecast for 2011, February 2010

Sales: -7.1 per cent

Prices: -1.5 per cent

“Interest rate increases will contribute to weaker national sales activity in 2011.”

June, 2010 forecast for 2011

Sales: -8.5 per cent

Prices: -2.2 per cent

“While sales activity is unfolding as expected in Ontario, the decline in affordability in British Columbia impacted sales in the province during the first quarter. Additionally, changes to mortgage regulations announced in February are expected to marginally impact activity.”

July 2010 forecast for 2011

Sales: -7.3 per cent

Prices: 0.9 per cent

“Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.”

November, 2010

Sales: -9 per cent

Prices: -0.8 per cent

“Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA’s annual forecast.”

February, 2011 forecast for 2011

Sales: -1.6 per cent

Prices: 1.3 per cent                                                                                                                                                                                             “The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence.”                                                                                                                                                                                                              May 9 forecast for 2011                                                                                                                                                                          Sales: -1.3 per cent                                                                                                                                                                             Prices: 4 per cent

“Although sales activity in the first quarter of 2011 came in largely as expected, multimillion dollar property sales in Greater Vancouver have surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/how-the-home-price-forecasts-changed/article2016467/

A variety of factors can keep you from qualifying for a mortgage. The big ones include a low credit score, insufficient income for the size of the loan you want, insufficient down payment and excessive debt. All of these factors are within your control, however. Let’s take a look at your options for overcoming any liabilities you may have as a borrower

1. Repair Your Credit and Increase Your Score

To lenders, your credit score represents the likelihood that you will make your mortgage payments in full and on time every month. Therefore, with most loans, the lower your credit score, the higher your interest rate will be to compensate for the increased risk of lending you money. If your credit score is below 620, you will be considered subprime and will have difficulty getting a loan at all, let alone one with favourable terms. On the other hand, if you have a credit score above 800, you’ll easily be able to get the best interest rate available (also known as the par rate). (Find out how your borrowing activities affect your credit rating in The Importance Of Your Credit Rating.)

Measures you can take to improve your credit score relatively quickly include paying down revolving consumer debts, such as credit cards or auto loans, using your debit card instead of your credit cards for future purchases, paying your bills on time every month and correcting any errors on your credit report. However, some flaws, like seriously late payments, collections, charge-offs, bankruptcy and foreclosure, will only be healed with time. (Read How To Dispute Errors On Your Credit Report to find out how to address reporting mistakes.)

In addition to managing your existing credit responsibly, don’t open any new credit accounts. Applying for new credit temporarily lowers your credit score, and having too much available credit is also considered a warning sign. Lenders may be afraid that if you have a lot of available credit, you’ll take advantage of it one day and adversely affect your ability to make your mortgage payments. (For more tips and techniques to help you rebuild your ruined credit rating, read Five Keys To Unlocking A Better Credit Score.)

2. Get a Higher-Paying Job

If lenders say your income isn’t high enough, ask them (or your mortgage broker) how much more you need to earn to qualify for the loan amount you want. Then try to find a new job in your existing line of work where you’ll be able to earn that much money.

Because lenders like to see a steady employment history, you’ll have to stay in the same line of work for this strategy to be successful. This can be disappointing news for borrowers, as switching professions entirely might offer the best chances for a salary increase. However, switching companies can also be a good way to get a significant boost in income. Significant raises from existing employers aren’t that common, but a new employer knows he’ll have to offer something special to get you to make the switch. (Read Negotiating For Employment Perks for tips on reaching an agreement with your boss.)

If switching companies right now won’t be enough to get the raise you need, think about things you can do relatively quickly to make yourself more valuable to employers. Is there a continuing education program that you could complete? If you’re a legal secretary, could you become a paralegal? If you’re a receptionist, could you become a secretary? A career counselor or headhunter might be able to give you some guidance specific to your situation about how to improve your marketability and how to reach your income goals. (Read Six Steps To Successfully Switching Financial Careers to learn how to make adjustments without starting over.)

Unfortunately, getting a part-time job on top of your full-time job may not provide what lenders consider qualifying income. The part-time job may be viewed as temporary, and since it will probably take you at least 15 years to pay off your mortgage, lenders are looking for you to have long-term income stability. (Increase Your Disposable Income gives you ideas on how to make more money now, which can make a big difference down the line.)

3. Save Like Crazy

The larger your down payment, the smaller the loan you’ll need. In addition, the lower your loan-to-value ratio (LTV ratio), the less risky lenders will consider you. Both of these factors will make you more likely to qualify for a loan. Be aware that you may have to reach a certain down payment threshold, like 10 per cent or 20 per cent (with 20 per cent being the most conventional), before a larger down payment will help you qualify for a loan. (Learn more in Mortgages: How Much Can You Afford?)

4. Don’t Pay More Than the Bank’s Appraised Value

The bank will not want to lend more than the house is worth because they could be on the losing end of the deal, should you foreclose and owe more than the bank could get for it. A 20 per cent down payment also becomes much less valuable if the house is worth 20 per cent less than the purchase price. Collateral value is important to lenders, so it should be kept in mind when making an offer to purchase a property. (Read 10 Tips For Getting A Fair Price On A Home and learn how to make sure your house is worth the price you pay.)

5. Reduce Your Debt

To a lender, what constitutes excessive debt is not a set number – it’s a total monthly debt payment that is too high for you to be able to afford the monthly mortgage payment you’re asking for. When deciding how much loan you qualify for, lenders will look at what’s called the front-end ratio, or the percentage of your gross monthly income that will be taken up by your house payment (principal, interest, property tax and homeowners insurance), and the back-end ratio, or the percentage of your gross monthly income that will be taken up by the house payment plus your other monthly obligations, such as student loans, credit cards and car payments.

The more debt you’re required to pay off each month, whether it’s “good debt” like a student loan or “bad debt” like a high-interest credit card, the lower the monthly housing payment lenders will decide you can afford, and the lower the purchase price you’ll be able to afford. Decreasing your debt is one of the fastest and most effective ways to increase the size of loan you’re eligible for. (Learn what to watch for before you find yourself drowning in debt in Five Signs That You’re Living Beyond Your Means.)

Playing to Win

Qualifying for a mortgage isn’t always easy. Lenders require all applicants to meet certain financial tests and guidelines and allow a limited amount of flexibility within those rules. If you want to score a mortgage, you’ll have to learn how to play the game, and you’re likely to win if you take the steps outlined here http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/five-steps-to-scoring-a-mortgage/article1925218/page2/

Hiring surged at North American companies in April, reminding investors the economic recovery continues to build underneath the wild swings in commodity markets.

Canada added 58,000 jobs in April, bringing the unemployment rate down 0.1 percentage point to 7.6% and returning fulltime employment to the level of October 2008 for the first time, Statistics Canada said Friday.

Perhaps more encouraging were figures from the United States. Employers there added 244,000 workers to their payrolls, the biggest increase in 11 months and trouncing expectations for a rise of 186,000. Private-sector hiring led the charge, as companies created 268,000 new jobs, the most in five years.

“The U.S. labour market continues to strengthen, greatly allaying recent concerns about a slowing economic recovery,” said Sal Guatieri, senior economist at BMO Capital Markets.

It was a relief after a volatile week that had the price of oil plunge 12%, silver collapse 27%, copper fall 6% and gold slide 4.5%.

Markets stabilized on Friday, with the S&P/TSX rising 111 points to 13,567 and the Dow Jones industrial average up 55 at 12,639.

The ongoing improvement in the Canadian labour market means the Bank of Canada is still likely to resume raising interest rates in the second half of the year barring a commodity drop so sharp it destabilizes the global outlook, economists said.

“I would say that on balance the employment numbers would have a bigger effect on the bank’s decisionmaking,” said Douglas Porter, deputy chief economist with BMO Capital Markets. “They can’t be whipsawed by weekto-week news in commodity prices.”

He added while commodity prices are not as high as they were just a short week ago, they are still up in general this year, and oil prices at around US$100 a barrel are still quite encouraging for most Canadian oil companies.

It would take a serious and ongoing dip in the commodity market to influence Canada’s central bank, Mr. Porter said.

“If the deep downdraft is being driven by real concerns about the United States and the global outlook, then I think the bank would deeply reconsider the need for any further rate moves,” he said. “I guess if we drop back below where we were at the start of the year, the bank would probably take that into account, and we were around US$90 [per barrel] at the start of the year,” Mr. Porter said with respect to oil prices.

On the other hand, Derek Holt, an economist with Scotia Capital Markets, said while the jobs numbers are solid, the recent correction in the commodities market may already be enough to influence the bank.

“I think that gets bigger weighting,” he said, adding “I think [the bank’s] on hold for quite some time. Our call remains that they’re on hold until October -so, later than the consensus.”

But Dawn Desjardins, assistant chief economist for RBC Economics, agreed with Mr. Porter that only a drop in commodity prices that destablized the outlook for the global economy would influence the Bank’s reasoning and she does not see the recent “gyrations” as sufficient.

“From the Bank’s perspective, I think they try to look though the noise, as we all do,” she said.

Ms. Desjardins expects to see the interest rate hiked 0.25 of a percentage point in July and said the employment report substantiates the view that the trend is toward growth.

Thursday’s job numbers were also noteworthy for the fact that 41,000 of the new jobs were part-time and the total number of hours worked remained 0.6% below the October 2008 level.

“There’s been a less than handy recovery in hours worked, which is to say there’s greater slack in the economy than that represented by the number of jobs,” said Stewart Hall, economist at HSBC Securities, who nonetheless still expects a rate hike of 25 basis points in July.

Other notable numbers from Friday’s labour force survey:

– The part-time trend was reflected in Ontario, which posted a gain of 55,000 jobs, 46,000 of which were part-time.

– Newfoundland and Labrador was the only other province to show a significant gain, picking up 3,100 jobs.

– Meanwhile, employment dropped in Nova Scotia and Manitoba -down 5,500 and 3,300 jobs, respectively -and the rest of the provinces avoided significant drops or gains.

– Compared with April 2010, Canada’s employment increased by 283,000, a gain of 1.7%.

– The service sector led the way with the creation of 36,000 new jobs while employment in both construction and manufacturing held steady in April.

– The statistics agency also noted that women aged 55 and over picked up 29,000 jobs last month while there was little change in other demographics. http://www.financialpost.com/news/jobs/4743688/story.html