From our familes to yours, wishing you the best of the season.
From our familes to yours, wishing you the best of the season.
Last week, I participated in a webinar featuring Economist Dr. Peter Andersen. While there was a lot of information covered, today I want to focus on a couple of key areas.
I know it might seem strange to look at what financial literacy means in the second post of a financial series and not the first, but sometimes, with every step forward we need to take a step back and look at the bigger picture. This is more true in finance than anywhere. So what better way to do that than to break it down now.Continue reading “Finance Series – Part Two: Financial Literacy”
You might have seen the headline “HSBC crushes mortgage records with 0.99% variable rate”. No doubt about it, this is a great rate. However, it’s not for everybody. It is important to remember, like most deals, there are some restrictions. Among other things this offering is limited to high-ratio mortgages with a downpayment of less than 20 per cent. The reality is a higher interest rate may apply for non-owner-occupied properties, amortizations greater than 25 years and other exceptions to standard lending guidelines.Continue reading “Because not everyone fits into the same box”
If this year has taught us anything, it’s just how important an emergency fund is. An emergency fund, also known as a contingency fund, is money you set aside to pay for unexpected expenses. The reality is, most of us will likely have to deal with a financial emergency at some point in our lifetime.
Here are a few tips for getting started with an emergency fund.Continue reading “Finance Series – Part One: An emergency fund”
We’re celebrating Financial Literacy Month!
Join Senior Economist, Ted Tsiakopoulos and Mortgage Broker, Steve Garganis Thursday, Nov 12, 2020, at 1:00 PM Eastern Time for a chat about budgets, savings, debt, and more.
Register Now: https://buff.ly/3lhmUl3
In case you missed it check out the video below of our October 28th, Roundtable Discussion on Housing and Mortgage Market Insights…Continue reading “Housing And Mortgage Market Insights – Roundtable Discussion”
Did you hear the news? Or did you miss it? Last week the Bank of Canada announced they would stop buying Canada Mortgage Bonds. But it seems like nobody is talking about this.
Why should you be paying attention to this?Continue reading “What’s happening with Canada Mortgage Bonds?”
Rates are at all time lows and are expected to stay that way for a while! This means payments can’t go much lower. Let’s put interest rates and mortgage costs in perspective.
Here is what MORTGAGE PAYMENTS on a $400,000 mortgage look like with a 30 year amortization:Continue reading “Rates are at all time lows”
I recently participated in a conference call with Scotiabank’s Chief Economist & SVP, Jean-Francois Perrault and John Webster President & CEO Scotia Mortgage Corporation. It was good to hear real financial experts make sense of what has happened and what will most likely happen.
Here are of some of the highlights:Continue reading “Is the COVID-19 emergency over? An economists perspective.”
Bridge loans are short-term loans that bridge the gap between two different closing dates. More commonly used when an existing homeowner sells their home, and buys another home, with two different closing dates. But bridge loans have become a very popular way to take possession of that new home while it’s empty for 2 or 3 weeks to allow for renos. Best of all, it’s really inexpensive!
THE OLD WAY
In the past, most homebuyers would have their selling and buying dates match. It’s always been a bit of a juggling act as you have to pack your moving truck and unpack it, all in less than a day. Somehow, everyone manages to get it done… but talk about one of the most stressful days in your life, moving ranks right up there! Throw in some kids, maybe a dog, and a house full of stuff and you have a real chore on your hands.
Some years ago, I did a study on the benefits and disadvantages of online shopping. Sure, you can order food from your favourite restaurant, buy a new set of earbuds, book a hotel or flight… but can you get a mortgage online without speaking with your banker or mortgage broker?
In 2009 and 2010, for the first time ever we saw mortgage rates under 2.00%. That’s right, if you were in a variable rate mortgage, you had a rate under 2.00%. We were coming off the catastrophic US sub-prime mortgage crisis. The financial US scam that cost the world trillions of dollars in lost pensions and investments. Tens of thousands of people lost everything they had. It was horrible. While we, in Canada, were largely untouched. We weren’t smarter, we were just lucky not to be exposed to the subprime mortgages to the extent the rest of the world was. As they say, Canada is five years behind the US, and in this case, we got lucky.
That said, let’s get back to mortgage rates and fast forward to 2020.Continue reading “Navigate through these uncharted waters in 2020”
NEW HISTORICAL LOW MORTGAGE RATE MILESTONE REACHED.
Last week, we saw a 5 year fixed rate mortgage at under 2.00%. That’s right… 1.99%. If you qualified, the rate applied to purchases where the mortgage is Canada Housing and Mortgage Corporation (CMHC) insured and paid for by the client. But that rate didn’t last long and that offer is over. I know, things move fast.
But let’s get back to current rate offers. We are in uncharted waters, again. 11 years ago, we were coming out of the US sub-prime mortgage crisis… does anyone remember that? Back then, the stock markets crashed, just like this year, they recovered, just like this year, but interest rates remained low for many years. In fact, they remained at or near 3.00% for the next 11 years.
The message here is this…. there will be small moments in time when interest rates will be extra low… this is one of those times. If you have a mortgage, get a review done! Find out if it makes sense to refinance or early renew or to break your current mortgage, pay a penalty and lock into today’s low rates. Speak with an UNBIASED PROFESSIONAL. Speak with an experienced mortgage broker. You have nothing to lose and everything to gain.
Here are some examples of people that paid a penalty and still saved between $9k and $26k.
Steve Garganis: 416-224-0114; firstname.lastname@example.org
Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.
I originally posted a breakdown of how mortgage penalties are calculated by different lenders on January 4, 2011.
A recent article outlining how TD Bank charged a $30,000 mortgage penalty to a woman forced to sell her home due to the Covid-19 pandemic shows how this remains relevant today.
WE TOOK THE MYSTERY OUT OF HOW PENALTIES ARE CALCULATED
We decided this needed a more detailed explanation… but a strange thing happened when we started to answer these questions. We made a startling discovery. We caution you – the results could get your blood boiling if you’ve had to pay a penalty!
We found that the banks have shrunk or reduced the spreads between their Posted and Discounted rates on shorter-term mortgages over the past few years… and this has had a huge impact on Interest Rate Differential (IRD) penalty calculations. Continue reading “Beware of Mortgage Penalties”
As a follow-up to my previous post on Cash Flow, I wanted to dig deeper into how we can help, as well as the good and bad around some of the relief programs being offered.
First, How can we help? We are finding that many of our clients are able to save by refinancing their debts into one low payment.Continue reading “How can we help?”
Positive Cash flow is when you have more money coming in than goes out each month. Simple to understand but for many of us, this just isn’t happening right now.Continue reading “It’s all about cash flow.”
Another great Q & A between myself and Jenelle Cameron of Remax. We had a chance to discuss what’s happening with mortgages, interest rates and the real estate market in general.Continue reading “Mortgage and Real Estate Q & A | April 23 2020”
Following are the highlights from a telephone conversation with Jean-Francois Perrault, Chief Economist Scotiabank and John Webster, President and CEO Scotia Mortgage Corporation which took place on Thursday, April 9, 2020 at 4:30 p.m.
First, it’s not all bad news. While I’ll have to include some unpleasant information in order to provide a complete picture, that is not the focus.
Hope this update finds you well. First, let’s make sure you are okay. We will get through this. I guarantee it! I’ve been through the 2008-09 US subprime mortgage crisis, the SARS 2002 crisis, and the 1990 real estate collapse. We recovered from all of those terrible times and we will recover from this. I am here to help you in any way possible. Don’t hesitate to call on me for assistance.
The government has been announcing new programs to provide financial assistance almost daily. And there have been just as many amendments to those programs as they work to fine tune the programs.
I want to make sure you are informed with accurate info. There’s been so much junk articles posted in the mainstream and social media outlets. Let’s block out that junk and focus on reality.Continue reading “How are things?”
I participated in a Q & A with one of my good realtor friends, Jenelle Cameron of Remax. We had a chance to discuss the current impact of COVID-19 on mortgages and the real estate market in general. Find out the latest on mortgages, what’s happening with closings during this time, and more!Continue reading “Q & A | Jenelle Cameron of Remax Hallmark In Conversation with Steve Garganis of Mortgage Architects”
With government announcements coming daily it can be hard to keep up. Here is a quick summary of what we know so far and what is still being clarified.Continue reading “Government programs for support during COVID-19 – what we know so far”
We’ve all heard about the 6 month deferred mortgage payment option. It was thrown out there by the government in an attempt to help property owners. We now have some more info that I’d like to share.
I’m getting a little sick and tired of the media being so negative and pessimistic. The banks and other financial institutions are offering to defer mortgage payments for 6 months. This is GOOD news. While it might not seem that way if you read some of the media posts, let’s clear things up:
The Business Development Bank of Canada (BDC) is devoted exclusively to entrepreneurs.
Here is a quick outline of some BDC Financing Options
If you require more than $100,000, there is another program being offered by BDC which the details have yet to come out. Rumor has it will be based on completion of (a) statement of personal affairs form by each shareholder (b) application for financing and (c) last 2 years of financials prepared by a CPA
Support for entrepreneurs impacted by the coronavirus COVID-19
Effective March 18, 2020, new relief measures for qualified businesses include:
As always, I welcome your comments, calls and questions.
Steve Garganis 416 224 0114 email@example.com
Your best interest is my only interest.
There’s a document floating around the internet from Goldman Sachs. Have you seen it? It’s a private client summary regarding the coronavirus. 1,500 companies dialed in to this call.
For the record, Goldman Sachs has said the summary text was not authorized by them and it contains erroneous information which was not used during the call. Still, there seems to be a consistent message here. I wanted to share this with everyone because I do believe in much of what is being said. Have a read. It’s a summary but a bit lengthy. I strongly recommend reading the entire summary as the message in the end is positive and is in line with historically recovery patterns.Continue reading “Update from Goldman Sachs”
Welcome to today’s update.
Canada and the banks announced a six month deferral of mortgage payments. I have been fielding many calls on how this works and the answer is different for each financial institution. I will be posting updates as they become available. Some of the financial institutions have not yet come out and said they will give a full six months of deferred payments, while others have. It’s still early but I will keep you informed as the details roll out.
Another update on the rates. Fixed rates are up again slightly. Variable rate pricing for new applications has increased as well. Most financial institutions are now offering variable rates at prime (Prime: 2.95%) or just minus .05%. No surprise as stock market jitters is spooking everyone.
This will pass and we will come out okay on the other side of this. That’s my message. We’re all in this together and we will come out of it together. Call or message me if you need anything. My team and I are here to help.
Steve Garganis 416 224 0114 firstname.lastname@example.org
There have been many changes lately and there will be many more to come. As this is a critical and fast-moving situation, I wanted to get these updates out and will be updating you regularly as we all work through this.
We’ve all heard about the Bank of Canada rate cuts. Two one-half percent rate cuts in less than two weeks. Unprecedented. And while common logic would dictate that mortgage rates would fall, that’s not exactly happening.Continue reading “Important Mortgage Updates 03-18-2020”
Stop… don’t sign any mortgage renewal, refinance or other mortgage offer from your banker. It is important to remember that they are not your friend. They are employees of a huge corporation paid to push you into the most profitable product for the bank.
Here’s what you need to know…Continue reading “Beware of those so-called 'SPECIAL OFFERS' from your Banker or Mortgage Lender”
As the dust starts to settle on yesterday’s Bank of Canada rate cut, here’s some clarification on what happens next.
To all my pending clients or clients with something on the go, your rates will be automatically adjusted downward.
For new clients, prospective purchasers, or people that want to take advantage of these falling rates, don’t hesitate to reach out to my office today. I am happy to discuss how you can take advantage of this.
Your best interest is my only interest.
As always, I welcome your comments, calls and questions.
Steve Garganis 416 224 0114 email@example.com
After years of seeing countless articles and posts about interest rates, housing affordability issues, mortgage stress tests disqualifying some people from being able to buy, higher personal debt levels, does it still make sense to buy a home?
Yes! There is positive news. You can still buy a home. And you can still qualify for a mortgage.
In case you missed it, Finance Minister Bill Morneau announced this week that adjustments to the “Stress Test” are coming on April 6th. While the government says the change will make the stress test qualifying rate more responsive to market conditions, what does that really look like?
On the bright side, this new qualifying rate will probably be lower by around 0.30%. This will increase the amount of a house one can buy by around 5%.
Example… $500k increases to $525k.
On the dark side, this isn’t really making a whole lot of difference. I don’t want to sound pessimistic, but I’d like to point out the shortcomings of his announcement. It’s purely political. They said they would do something and I guess, technically they did. But it really has no significant impact.Continue reading “Adjustments to the “Stress Test” don’t go far enough”
Some great stats just came out in Genworth’s regional risk reports. Here are a few of the highlights.
As expected, Ontario’s housing market has been very healthy and active and has been picking up steam over the last 2 years.
Alberta’s economy has been hit hard over the past 3 years due to the inability to bring its biggest resource, oil and gas, to the market. We’ve all read and heard about the pipeline debacle. However, the housing market is rebounding as is shown in the stats. Let’s hope action is taken to get our western Canadians some positive changes.Continue reading “Genworth Regional Risk Report”
For years, we’ve been told to pay our mortgage bi-weekly. Magically, it will pay your mortgage off faster. Hmm, let’s put that to the test.
(SPOILER ALERT!) Around 10 years ago, I wrote an article showing some simple but effective math to explain this. I’m constantly getting emails from my readers asking me what they should do. Obviously, a topic worth taking another look at.
Let me also say, there is merit to paying bi-weekly… I’ll explain further on.
HISTORY OF BI-WEEKLY PAYMENTS
Back in the mid-’90s, there was a huge marketing blitz by the Big Banks that promoted making bi-weekly payments instead of the traditional monthly payments. The sales pitch was that you could save huge amounts of money and pay your mortgage off much faster, shaving 4 or 5 years off your amortization. Sound familiar? While offering some benefit, BI-WEEKLY PAYMENTS DON’T SAVE AS MUCH AS YOU MIGHT THINK!
And I’ll prove it… Here are the straight facts!
You’re two years into your mortgage term. You’ve got a great rate, or so you thought? But now you aren’t sure. With so much talk about record low interest rates, you begin to question. Maybe there’s a better deal out there? Did you choose the right product and lender? Has your mortgage advisor or broker contacted you during those two years? Does this sound familiar?
We’ve all heard of buyer’s remorse. That’s when you make a purchase, only to regret spending the money days or weeks later. I’m seeing a lot of people second-guessing their mortgage decision recently. And I have news for you… RELAX! There is a way to check to and see if you made the right choice, and better still, there is a way to see if you can do better today.
Rental properties are a secure long-term investment. Note the emphasis on “long-term”.
Check out any seven-year period over the past 50 years (anyone who has read this news site knows that I always recommend buying and holding for at least seven years). Property values have almost always risen.
Sure, the last five or 10 years have seen fantastic appreciation in almost every part of Canada. But, let’s leave capital appreciation out of the equation for now.
Why aren’t we talking about rental income? Or, how about the equity growth through your mortgage being paid down each year?
RENTAL INCOME IS UP, UP, UP!
Part of what makes rental properties attractive is that rent rises with inflation (or even higher, in many cases, as we have seen in urban markets like Toronto and Vancouver). This is how you create your own pension or retirement income! Continue reading “Real estate may not be sexy, but…”
Quick, what’s the first thing that comes to mind when you think of “second mortgages”? For some, it could be that shady-looking character in a smoke-filled pool hall… guys with gold chains and a baseball bat nearby. Maybe you’re thinking of someone in financial trouble? Or, perhaps it’s just someone who doesn’t want to pay outrageous costs and penalties to refinance their existing mortgage.
The mere mention of second mortgages conjures up all sorts of images. Most of them, negative. For many, a second mortgage can be a last-resort solution during a financial crisis. For several others, it can be an opportunity to save money. That’s right, to save money.
Sure, second mortgages carry a higher interest rate than first mortgages, but they can also serve a purpose. One of those purposes can be to save you money. Yup, I said it again. There are some new trends emerging with today’s new mortgage products that are forcing consumers to seek other options. Two of these trends are INFLATED PREPAYMENT PENALTIES and NO FRILLS MORTGAGES! Continue reading “When a Second Mortgage makes good financial sense.”
It’s not a new concept but it is one that is worth remembering and so I will repeat it. If you want to pay off debt, start by paying less interest.
January is usually a tough financial month for most of us. Holiday bill payments, rrsp contributions, property tax bills and if you are self-employed, you probably have to make some sort of business tax or corporate tax payment. If December is the Holiday Season, then January feels like a hangover!
Banks and Credit Card companies love this time of year because this is when we will normally carry a balance and have to pay those crazy interest rates that range from 9% to 25%. Wait, before you get too depressed, there could be a better option. There’s a less expensive way to manage your debt. Continue reading “Want to pay off debt? Pay less interest!”
New year, new home? It’s a good time to take another look at the Home Buyers’ Plan (HBP).
If you’re planning to buy your first home anytime soon, you may be able to take advantage of a helpful federal government program. This enables you to withdraw money you’ve already contributed to your registered retirement savings plan (RRSP) and use it towards anything related to your home purchase, including your down payment, closing costs or real estate fees.
But, the key is that the funds must be in your account at least 90 days before you can withdraw them under the Home Buyers’ Plan (HBP).
You can withdraw up to $35,000 ($70,000 per couple) from your RRSPs tax- and interest-free to buy or build a qualifying home for yourself or a related person with a disability.
Having worked on 8,000+ mortgage applications at this stage in my career, I’ve witnessed my share of separations and divorces. While I have shared a financial and personal perspective on marital splits in the past, it is always worth revisiting for those out there that are going through these life changes now or in the future.
You’ve heard the stats: 1 out of every 2 marriages fails. Actually, I think the number of failed marriages is even higher now. Wait, let me rephrase that. A marital split is not a failure. I think that’s old-world thinking. A marital split is usually a positive move for all parties involved – for the spouses who are no longer in love and the kids who don’t have to see an unhappy married couple.
Marital splits can be a very emotional and difficult time in one’s life – especially when there are kids involved. There’s always one parent who wants to keep the house because the kids grew up there or have friends there or it’s just more familiar to them.
That’s right, I’ve said this before, and will say it again.
Our lifecycle goes something like this… Go to school. Find a job (and work hard for 40 years). Fall in love. Get married. Save money. Buy a house. Start a family. Retire on enough pension or savings. Enjoy the results of your hard work. Live in your house until death. Leave the house for your kids.
This is how most of us envision a normal lifecycle. But how often does this really happen? How many people really live happily ever after? What’s the big deal about tapping into home equity to fully enjoy life?
What is your credit score?
A credit score is an important part of your financial picture. Credit scores can range from 300 to 900 and are used by lenders to determine what kind of a risk you are likely to be as a borrower. Your score is based on several attributes. Continue reading “The making of a credit score and why it matters.”
Canada Mortgage and Housing Corporation released The State of Homebuying in Canada report on November 15, 2019, with a few key findings, including this headline.
The annual State of Homebuying in Canada report noted that 56% of all purchasers were first time buyers in 2018. This dropped to 47% in 2019.
The tightening of mortgage rules which has been taking place over the last 4 years is certainly having an effect. The never ending rule changes were intended to slow home sales and prices. But like most government interventions, its had the opposite effect.Continue reading “Significant decrease in first time home buyers in 2019”
I’d like to think the Total Net Worth Program reintroduced by a lender recently is an indication of what’s to come!
I’m excited about this program. It allows borrowers with good net worth to gain access to money. This is old-school lending – nothing new – but it’s a comeback worth celebrating!
Contrary to media reports about our ‘record personal debt levels’, it’s extremely prudent to ensure you have access to emergency money.
The line of credit popularity that took place in the ’90s wasn’t a bad thing. It allowed us to borrow at low rates to invest or spend as needed. Many successful investors have been doing this for decades. Borrowing to invest makes smart financial success. Don’t let anyone tell you differently.
We’re seeing more reasons for Canadians to get a secured line of credit now: Age; Income; and Qualification.
Is choosing a mortgage as easy as booking a trip or trading a stock? Let’s find out!
Sure, you can book a flight online or buy a stock through the web. But, can you really choose the right mortgage product on your own? Can you really find the absolutely lowest cost mortgage financing option? I’ll bet some consumers can. I’ll also bet the vast majority cannot. There’s a steady stream of horror stories, on this news site and others, that show just how costly and financially dangerous it is to be in the wrong mortgage product, with the wrong lender.
I’ve shared dozens of those experiences on this site. Consumers who were directed into the wrong mortgage by their Banker or by some web site claiming to offer ‘the lowest rate’. I empathize with these consumers as I believe they were just trying to save some money but instead ended up paying far more than they had to. Continue reading “Online shopping …. Stocks, Vacations and Mortgages. What’s the difference?”
Mortgage rates fell by about 1% since January of this year. That rate drop has created a surge in real estate sales across Canada, with September and October seeing a greater than average number of real estate transactions. We also saw consumers taking advantage of these low rates by refinancing their mortgages early.
The Five-Year Government of Canada bond yields have been going up and down like a yo-yo over the last three months, with a low point being 1.13% and a high of 1.58% just this past week. This uncertainty/volatility forced financial institutions to raise their interest rate by about .2% to .3%. Having said that, interest rates are still very low. In my discussions with the major lenders, they are all telling me that it’s busier than usual for home purchases and refinance purposes. Continue reading “Important week for mortgage rates could cost or save you thousands.”
I saw this article from earlier this year about Good debt and Bad debt. Canadian Personal debt levels have now surpassed $2.21 trillion. That’s a big number, should we be concerned? I started to wonder how much of this is Bad debt? Let’s take a closer look at these stats. Continue reading “Good debt and Bad debt…. do we Canadians recognize the difference?”
The internet is great for researching information, ratings and even advice. With so much available data, it’s hard to decide which is accurate, reliable or even truthful.
Take this site for example. If this is your first visit then you may not be aware of all my credentials nor how accurate my information or recommendations are.
You’re probably making a decision right now. That’s how fast we decide today. I’ve either got your attention or I don’t. Hello to those that continue, or farewell and thanks for stopping by to those that are leaving. (By the way, stick around, you may find this useful). Continue reading “Information vs advice. Why is it free?”
Part 2 of 2…. In Part 1, we examined rental properties and how they can be a great way to reduce your taxes, build net worth and create an income stream. Part 2 looks at Interest payments. Interest payments are a big part of our personal expenses. Here are a few suggestions on how to reduce your interest costs.