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Posted 4 Comments on Credit counselling, Consumer proposal or Bankruptcy… Which option is most favourable? Case study

Credit counselling, Consumer proposal or Bankruptcy… Which option is most favourable?

Debt Image, March 2018

A couple in their 30s contacts me for a mortgage. They want to buy a new home. She’s a high school teacher and he’s a computer firm manager. Incomes are good. I check their credit.

Let’s stop here for a minute… If they have good credit, an approval is simple and we can provide the clients with several mortgage options.

But let’s assume that this couple ran into some debt and credit issues three years ago… and they made three different choices about how to resolve those credit problems: 1) Credit Counselling; 2) Consumer Proposal; or 3) Bankruptcy. I want to take you through each scenario and show you how long each of these three options affects your ability to finance a home. I bet the results will surprise you! Continue reading “Credit counselling, Consumer proposal or Bankruptcy… Which option is most favourable?”

Posted Consumer Debt

Considering a Second Mortgage? It can save you money!

Home Finances

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 sort 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 “Considering a Second Mortgage? It can save you money!”

Posted Consumer Debt

World Debt clock comparison… How’s Canada doing compared with the world?

Debt.  It’s a popular topic.  Personal debt. Govt debt. Corporate debt.  Back in 2013, I published an article comparing Canada’s debt with the rest of the world.  Back then, like today, there was so much negative news being written about our so-called high personal debt level.   I thought I’d turn the tables on the govt and see how they were doing.

Here we are, 2018 and  five years later.  We’re supposedly experiencing fantastic economic times.  Lowest unemployment in 40 years according to the Dec 2017 job report.  Things are so good that we can increase minimum wage by over 30% in Ontario and other Provinces.  We must really be doing great, right? Scorecard time…

The logical conclusion, or the simple math equation is with GOOD TIMES OR A STRONG PROSPEROUS ECONOMY = LOWER NATIONAL DEBT…. Consumers are expected to lower their personal debt levels.  Isn’t the govt supposed to lower or work on eliminating our national debt?  One would think so. Let’s find out… Continue reading “World Debt clock comparison… How’s Canada doing compared with the world?”

Posted 2 Comments on Rates are going up… for now… is this the end of low rates? Consumer Debt

Rates are going up… for now… is this the end of low rates?

 Next Wednesday will be the first Bank of Canada meeting date to set the Target rate, which directly affects Bank Prime rate and Variable rate mortgages. It’s almost a certainty that the Bank of Canada Governor, Stephen Poloz, will raise the rates.

POSITIVE DATA MEANS HIGHER RATES

There’s been too much positive economic data lately. Low unemployment levels (5.7%, the lowest since the ’70s), higher spending by consumers, slightly higher inflation (2.1%), record level stock market. We’ve also seen some comments and posturing by the Bank of Canada Govr that suggests we should expect a 0.25% increase.

Bond yields have also been moving steadily upward. Yup, we should expect a rate hike. And depending on how the market reacts to this, we could possibly see another rate hike at the next Bank of Canada meeting on March 7th.

BUT WAIT, IS THIS THE END OF MORTGAGE RATES IN THE 3.00%’s?

Continue reading “Rates are going up… for now… is this the end of low rates?”

Posted 4 Comments on Review your mortgage NOW! Next year may be too late. Consumer Debt

Review your mortgage NOW! Next year may be too late.

It’s begun.  The message is starting to sink in.  The new mortgage rules could eliminate 15% of Canadians from qualifying for a mortgage after January 1st, 2018.  The mad rush has started as mortgage inquiries are up significantly.

WHO WILL BE AFFECTED?

  • Anyone that has a mortgage renewal in next 12 to 20 months.
  • Anyone thinking of buying in the next 12 months.
  • Anyone that is needs or is thinking of refinancing their mortgage in the next 12 months.
  • Rental property owners.  Yes, you too.
  • Future retirees with lots of home equity (newsflash..the new rules don’t take into consideration how much equity you have in your home.. your net worth is also irrelevant… it’s all about how much income you earn and declare…)

All of these borrowers will be affected.  If you’re not getting the message, anyone with a mortgage should be getting a review done NOW.  Don’t wait until next year.  You may not qualify for a mortgage.

EXPECT HOME SALES TO SPIKE UP TEMPORARILY Continue reading “Review your mortgage NOW! Next year may be too late.”