CategoryMoney saving tips

Posted November 7, 2016 Consumer Debt

Marital splits… woman seem to be at higher risk when it comes to finances.

They say about half of all marriages end up in divorce. In Canada, it’s around 48%. In the U.S., it’s around 53% according to Stats Canada. You’ve probably heard these stats before.

But what happens when a couple splits and all the financial matters were being handled by just one spouse? In most cases (but not all), it’s the woman who is left with no knowledge of money matters. Over the years, I’ve seen hundreds of marital splits and in an overwhelming majority of cases, the woman is left in the dark when it comes to finances (that trend is changing as today’s women are becoming more financially astute.. good for them.. let’s continue that trend).

There is HOPE and HELP. Here are some things you can do to take charge of your finances before or after a marital split: Continue reading “Marital splits… woman seem to be at higher risk when it comes to finances.”

Posted September 1, 20161 Comment Consumer Debt

Tax Free Savings Accounts should be 2nd on your list

There are over 10million TFSA accounts in Canada according to this article in the Financial Post. Wow, it’s great to see that level of savings….

But hold on…..is this the right strategy for those of us with a mortgage? Well, if you have a mortgage on your principal residence and the interest is not tax-deductible, then I think it’s NOT the right strategy.

For most of us, the interest on a residential mortgage is not tax deductible (I say for most of us because if you rent out part of the home or use it for your business then you may be able to claim a tax deduction).

Take those after-tax $$dollars and pay your mortgage first before putting them into a TFSA… reduce the amount of non-deductible debt and then focus on a TFSA…. If you own an investment property, then this strategy may vary slightly…. but for most of us, let’s get rid of that mortgage first…

And yeah, for those higher income earners looking to diversify, then sure.. A TFSA makes sense. But for most Canadians, I would suggest getting rid of the mortgage is a better strategy.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted June 1, 20161 Comment Money saving tips

Short term fixed products are still in…

SHORT TERM RATES ARE STILL IN

A few months ago, I said Variable was out, Fixed rates were in. I recommended going with a short-term fixed rate products. The reasons are simple:

You can get the same or better in a 2 and 3 yr fixed rate term. That eliminates the Variable rate for me.
2 yr is 2.19% and 3 yr is 2.29%.
Variable is 2.30% today. Why choose a fluctuating rate when you can get a guaranteed better rate for the next few years?
I also don’t like the current Variable rate pricing that’s out there.
Prime less 0.40% isn’t good enough.. I like to see Prime less 0.50% or better.

Historically, we’ve always done better by choosing short-term rates. And that’s what Variable rates are…A mortgage product priced from short-term funds. The only difference today, is that it makes more sense to lock into 2 or 3 yr fixed term vs choosing a Variable rate.

WARNING

( you’ll see lower rates advertised.. but be careful. There are so many NO FRILLS products or products that carry inflated penalty calculations, limited repayment options and other hidden fees.. stay away from those)

MORTGAGE TIP

Hey, want to know which Mortgage Advisor to use? Check out their historical recommendations and forecasts. That should tell you all you need to know about that advisor. And if you can’t readily find those historical forecasts, then walk away and look elsewhere.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted May 26, 2016 Debt

I have 2.39% for 5 yrs fixed available…but I wont sell it.

It’s true. I have access to this great rate. It’s around 0.20% lower than the best rate today. And you won’t see me recommending it to my clients.

That’s right, I’m recommending they don’t take it.

Why? It’s simple. No, I don’t want my clients paying more on their mortgage. I want to see them PAY LESS to own their homes. This is one of those products that carries an inflated prepayment penalty. Should the homeowner need to get out of their mortgage early, they will be hammered with a ridiculous exit cost. We’re talking 10, 12, even 16 months worth of interest penalty.

Statistics clearly show we are paying or changing our mortgages every 3 years. So, chances are, you will have to pay this penalty. On a $300,000 mortgage, your penalty could be $9,000 or more. Compared with $1,943. That’s a $7,000 difference.

That 0.20% savings on the rate equals $600 per year.. You still think that 2.39% rate is great??

The next time you hear or see something that sounds too good to be true, it probably is. If you aren’t sure, call me or an experienced Mortgage Broker for unbiased advice.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted April 25, 20162 Comments Money saving tips

Mortgage penalty calculations.. More important than the interest rate.

WHY ISN’T ANYONE TALKING ABOUT THIS?

You bought a home… you need a mortgage.. what’s the first question you ask your Banker? “what’s your best interest rate?”. And the second question is usually, “what product should I choose?”.

Almost no one asks about Mortgage Penalties or how they are calculated. After all, how often does anyone have to pay a penalty, right? WRONG! $10,000, $20,000, $30,000 and higher. This is how much penalties can add up to… these are real numbers. And guess what? This isn’t some unknown bank or small lender.. These are coming from the BIG SIX BANKS.!!

Here’s a little known stat…. “Canadians change their mortgage every 3 years, on average”. Ask anyone that’s owned a home before. Chances are, they’ve had to deal with a mortgage penalty at some point.. and for most of them, it’s an embarrassing subject. After all, who wants to admit to being the victim? Check out the stats… Continue reading “Mortgage penalty calculations.. More important than the interest rate.”