CategoryDebt

Posted October 28, 20148 Comments Consumer Debt

When this guy can’t qualify for a mortgage, you know the mortgage rules are too tight!

FORMER US FED CHAIRMAN CAN’T GET A MORTGAGE.

Anyone remember this guy? Ben Bernanke. He’s just the former Chairman of the US Federal Reserve Bank. He served two terms from 2006 to 2014. Earlier this month, he revealed that he was declined for a mortgage refinance. Now, just to put this in perspective, he used to make a nice 6 figure salary. And today, he is paid an estimated $250,000 per speaking engagement.

How can he not qualify? Clearly, the mortgage rules tightening process has gone waaaaaay overboard. But this isn’t just happening in the US. Canada’s mortgage lending rules have always been tighter than the US. And over the past 6 years, the Canadian govt has brought in numerous changes to tighten the rules even further. (Actually, experts agree that they went way overboard. And we are only now seeing the effects of the rule changes.. Look out. You’re in for a big surprise the next time you need mortgage money).

CANADIAN MORTGAGE RULES ARE EVEN TIGHTER!!

Canada’s Banking industry has been the envy of the world. We came out of the 2008 US sub-prime mortgage crisis with no visible scars. Continue reading “When this guy can’t qualify for a mortgage, you know the mortgage rules are too tight!”

Posted September 4, 2014 Consumer Debt

News stats..Higher debt, but lower defaults

Saw this article today about higher consumer debt levels BUT lower defaults. Equifax Canada is quoted as saying that consumer debt rose by 7.2% in the second quarter 2014 to $1.45 trillion ,compared with $1.35 trillion from a year ago. This includes credit cards, loans, lines of credits and mortgages.

The average Canadian now has $20,759 in personal debt, excluding mortgages. That’s a 1.5% increase since last year. So that means mortgage debt has risen by around 7%. Here’s a heads up… you will see and hear articles sounding the panic alarm… again.

Well, before we hit that panic button, there was one more stat that we should pay attention to. DEFAULTS. Defaults are at their lowest level since 2008. If higher consumer debt levels and lower defaults sound strange to you, it shouldn’t. I’ll explain… Continue reading “News stats..Higher debt, but lower defaults”

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 June 10, 2014 Debt

Your credit score is more important than ever.

What is your credit score?

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 –

Payment history

The single biggest factor in your credit score is having a timely bill payment history. Recent late payments are factored more heavily than old ones so start today and never let a bill get past due. Continue reading “Your credit score is more important than ever.”

Posted April 15, 2014 Consumer Debt

Slow credit or poor credit? There’s a mortgage solution.

Life doesn’t always go according to plan. You’ve heard that saying before. When you have financial trouble, it can affect your credit score. Today, that makes qualifying for a loan or mortgage very difficult….. but not impossible.

With all the new mortgage rule changes over the past 5 years, its made borrowing at reasonable rates almost impossible. Many of us have been forced to borrowing on our high interest credit cards or finance loan companies. These credit facilities carry huge interest rates and short amortization periods resulting in very high monthly payments. (by the way, isn’t it ironic that the Federal Govt has tightened mortgage rules every year for the past 5 yrs but they haven’t touched the higher interest credit card companies and finance companies! Who owns the credit card companies and finance companies? That’s right.. the BANKS! Who’s interest are they looking out for?)
Continue reading “Slow credit or poor credit? There’s a mortgage solution.”