CategoryCase study

Posted November 12, 2014 Case study

Attn: Ontario landlords… Rent control rules may not apply!

Did you know that Alberta has no residential rent control? And British Columbia landlords can increase rents by the rate of inflation PLUS 2%? In Ontario, the Landlord and Tenant Board sets annual rent increases. For 2014, the rent increase was a mere 0.8% and for 2015 the rents can only be increased by 1.6%. Anyone that’s bought a rental property has probably been following these rules for years. An increase of 2.2% over a 2 year period sounds great if you are a tenant, but somewhat unfair if you are landlord.

Now, what if I told you there’s a good chance your PROPERTY IS EXEMPT FROM ONTARIO’S RENT CONTROL RULES? Meaning you can increase the rents as high as you like. According to the Ontario Landlords Association, more and more properties are becoming exempt from Ontario’s rent control rules.
Continue reading “Attn: Ontario landlords… Rent control rules may not apply!”

Posted June 18, 2014 Case study

Use your mortgage to pull debt together and save for retirement.

Perhaps too much debt has made your monthly cash flow tight, putting you under some financial pressure and making it almost impossible to save for retirement. With the right plan in place, it may be possible to simplify your debt, reduce interest costs, and save for retirement, all without earning more or cutting your spending.

If you have enough equity in your home (you can’t refinance a mortgage above an 80 per cent loan to value), we can show you how to use that equity to roll your high-interest debt into a low-rate mortgage and make a large RRSP contribution if you have contribution room.

Here’s an example – mortgage, car loan and credit cards total $225,000. If you have enough equity, you can roll that debt into a new $233,000 mortgage, including a fee to break the existing mortgage, and look at the payoff. Continue reading “Use your mortgage to pull debt together and save for retirement.”

Posted April 4, 20142 Comments Case study

Is your banker giving you their best rate?

EVEN THE BANK OF CANADA SAYS MORTGAGE BROKERS WILL GET YOU A LOWER RATE.

The Bank of Canada did a study a few years ago called Competition in the Canadian Mortgage Market. The study concluded that consumers get a lower interest rate through brokers. They also said that higher income earners were actually paying higher rates because they are less likely to spend the time to shop around for lower rates.

Last week, I did an interview for the news media about what a broker does. They also interviewed one of my clients. This client owns more than one property, he’s an experienced real estate investor and a senior manager for a major corporation. He uses my service because I save him time and money. He trusts my advice. It’s that simple. Here’s a link to the article.

IS YOUR BANKER GIVING THE BEST RATE?

A simple question. How many of us can truly answer, yes? You walk into your branch, you see a posted rate. Then your banker shows you the “special rate” or “discounted rate”. And then maybe they tell you they can do a little better. But how much better? And why aren’t they giving this up front? Don’t loyal customers deserve the best? Does this game sound familiar?

Continue reading “Is your banker giving you their best rate?”

Posted February 3, 2014 Case study

Lower rate = Lower payment and a Lower balance in 5 years!

We all know that a lower interest means a lower monthly payment. But did you know that a lower interest rate means you will also owe less when your mortgage comes up for renewal? This has been overlooked by consumers and experts alike. I haven’t seen any articles covering this. And it should change how you choose your next mortgage product.

It all has to do with the effects of compounding interest. Let’s take a look at 2 borrowers, each with a $400k mortgage. Borrower 1 is Mary. Borrower 2 is Dave. Mary has today’s 5 yr fixed rate of 3.29%. Dave has the more normal rate of 5.50% (the rate most experts think we will see in the next 3 to 5 yrs). We’ll amortize both mortgage over a 25 yr term.

Dave’s mortgage has monthly payments of $2441 and a balance owing of $356,749 at the end of 5 years. Mary’s mortgage has monthly payments of $1953 and a balance owing of $343,728 at the end of the first 5 years. Notice the difference in the balance owing after 5 years. We are talking about a $13,021 difference. That’s the effects of compounding interest. Continue reading “Lower rate = Lower payment and a Lower balance in 5 years!”

Posted January 20, 2014 Case study

Buy now or wait for house prices to fall? The results may surprise you…

Should I buy now with interest rates still hovering at record lows, or wait for prices to fall? When will house prices fall? … and by how much? What will the interest rate be in the future when house prices fall?

These are the questions most Canadians asking themselves these days. It’s no secret that Real Estate values are at an all time high in most parts of the country. The calls for a housing correction, crash, or bubble have been going on for almost 10 years now but it hasn’t materialized.

I won’t get into the discussion here about whether house values will drop or crash or when that could happen.. because I don’t think it should be part of the buying decision. That’s not a typo. Market timing is a dangerous thing. Stock advisors will tell you this. Buy now, if you are able to commit to the plan. Read on to see why I believe this to be true. Continue reading “Buy now or wait for house prices to fall? The results may surprise you…”