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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 2 Comments on How’s my rate? 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?”

Rental properties as a secure long-term investment
Posted Real Estate news

Real estate may not be sexy, but…

Rental properties as a secure long-term investment

Rental properties are a secure long-term investment. Note the emphasis on “long-term”.

Check out any seven-year period over the past 50 years (anyone who has read this news site knows that I always recommend buying and holding for at least seven years). Property values have almost always risen.

Sure, the last five or 10 years have seen fantastic appreciation in almost every part of Canada. But, let’s leave capital appreciation out of the equation for now.

Why aren’t we talking about rental income? Or, how about the equity growth through your mortgage being paid down each year?

RENTAL INCOME IS UP, UP, UP!

Part of what makes rental properties attractive is that rent rises with inflation (or even higher, in many cases, as we have seen in urban markets like Toronto and Vancouver). This is how you create your own pension or retirement income! Continue reading “Real estate may not be sexy, but…”

When Second Mortgages Make Sense
Posted Mortgage Products

When a Second Mortgage makes good financial sense.

When Second Mortgages Make Sense

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 sorts 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 “When a Second Mortgage makes good financial sense.”

Consolidate debt pay less interest
Posted 1 Comment on Want to pay off debt? Pay less interest! Consumer Debt

Want to pay off debt? Pay less interest!

Consolidate debt pay less interest

It’s not a new concept but it is one that is worth remembering and so I will repeat it. If you want to pay off debt, start by paying less interest.

January is usually a tough financial month for most of us.  Holiday bill payments, rrsp contributions, property tax bills and if you are self-employed, you probably have to make some sort of business tax or corporate tax payment.  If December is the Holiday Season, then January feels like a hangover!

Banks and Credit Card companies love this time of year because this is when we will normally carry a balance and have to pay those crazy interest rates that range from 9% to 25%.  Wait, before you get too depressed, there could be a better option.  There’s a less expensive way to manage your debt. Continue reading “Want to pay off debt? Pay less interest!”