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CategoryMortgage News

bi-weekly-and-accelerated-payments
Posted Mortgage News

How much do you save with bi-weekly payments?

bi-weekly-and-accelerated-payments

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!

Continue reading “How much do you save with bi-weekly payments?”

Time to review your mortgage
Posted Money saving tips

How’s my rate?

Time to review your mortgageYou’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.

Continue reading “How’s my rate?”

New year new home - Learn About the Home Buyers Plan
Posted Money saving tips

Home Buying Goals? A New Year’s Resolution to Keep.

New year new home - Learn About the Home Buyers Plan

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.

Continue reading “Home Buying Goals? A New Year’s Resolution to Keep.”

Getting divorced - Should I keep the family home
Posted Mortgage News

Getting divorced? What about the family home?

Getting divorced - Should I keep the family home

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.

Continue reading “Getting divorced? What about the family home?”

You will never see a U-Haul following a hearse
Posted Mortgage News

I’ll say it again. You’ll never see a U-Haul following a hearse!

You will never see a U-Haul following a hearseThat’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?

Continue reading “I’ll say it again. You’ll never see a U-Haul following a hearse!”

The State of Homebuying in Canada 2019 CMHC Mortgage Consumer Survey
Posted Mortgage News

Significant decrease in first time home buyers in 2019

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”
Get a secured line of credit while you can qualify.
Posted Mortgage News

My advice is simple: Over 50? Get a secured line of credit while you can qualify.

Get a secured line of credit while you can qualify.

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.

Continue reading “My advice is simple: Over 50? Get a secured line of credit while you can qualify.”

Online shopping for Stocks, Vacations and Mortgages.
Posted Case study

Online shopping …. Stocks, Vacations and Mortgages. What’s the difference?

Online shopping for Stocks, Vacations and Mortgages.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?”

Important week for mortgage rates
Posted Interest rates

Important week for mortgage rates could cost or save you thousands.

Important week for mortgage rates

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.”

Information vs Advice
Posted Mortgage News

Information vs advice. Why is it free?

Information vs Advice

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?”

Only two things in life are certain Death and Taxes
Posted Money saving tips

Death, taxes and interest payments. Part 2 of 2.

Only two things in life are certain Death and Taxes

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.

Continue reading “Death, taxes and interest payments. Part 2 of 2.”

Only two things in life are certain Death and Taxes
Posted Money saving tips

Death, taxes and interest payments! Part 1 of 2.

Only two things in life are certain Death and TaxesDeath and taxes, the only two things that are certain in life. You’ve heard this one before.  I think there is a third thing that can be just as stressful, ‘interest payments’ (before this article becomes too depressing, I’m going to share some things that will help to reduce our interest costs and minimize our taxes).  Continue reading “Death, taxes and interest payments! Part 1 of 2.”

Stop Mortgage Fraud
Posted Mortgage News

Beware of mortgage fraudsters….

Stop Mortgage Fraud

I wrote that back in 2006.  Since then we have seen some provincial governments step in with laws to help protect unsuspecting homeowners.  You can also purchase Title insurance or an alternative method of protection.

A couple of years ago, Toronto police said a woman used fake ID to get a $300,000 mortgage.  The unsuspecting homeowner only discovered a mortgage had been fraudulently registered on their home when they received mortgage documents in the mail.

This is not a new scam. It’s happened many times in the past. Here’s a big one from 2010 that involved $140million and hundreds of people.  This one was huge.  Most are not this big or elaborate.  It’s the smaller ones, like the recent one for $300,000, that are more common place.

HOW IT’S DONE

Continue reading “Beware of mortgage fraudsters….”

A beautiful gift wrapped box - When it comes to mortgages are you looking at the packaging or what is actually inside.
Posted Mortgage News

Are you looking at the beautiful box or what’s inside?

A beautiful gift wrapped box -

If I gave the option of choosing between two cell phones, which would you choose?   Both phones had similar specs and were identical in almost every way… except PHONE one came in a nicely gift wrapped box with a bow on it.   PHONE two came in a brown paper bag but was less expensive and also had slightly better options.

Most of us would choose PHONE two right?  Wrong!   When it comes to mortgages, most of us are focusing too much on the beautiful gift box and not paying enough attention to the contents.  They say around 47% of all mortgages go through a BANK and 39% go through a Mortgage Broker.   Broker share is up, but not enough in my opinion.

When it comes to mortgages, historically the BIG SIX BANKS have been charging higher rates than what can be had from MORTGAGE BROKERS. (see Bank of Canada study ‘competition in the Canadian mortgage market). And their inflated prepayment penalty calculations are now infamous (typical BIG SIX BANK penalties are around 4 times higher than other lenders).
Continue reading “Are you looking at the beautiful box or what’s inside?”

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