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Financial Outlook with Jean-Francois Perrault, Chief Economist Scotiabank

Following are the highlights from a telephone conversation with Jean-Francois Perrault, Chief Economist Scotiabank and John Webster, President and CEO Scotia Mortgage Corporation which took place on Thursday, April 9, 2020 at 4:30 p.m.

First, it’s not all bad news. While I’ll have to include some unpleasant information in order to provide a complete picture, that is not the focus.

Continue reading “Financial Outlook with Jean-Francois Perrault, Chief Economist Scotiabank”

Q and A | Jenelle Cameron of Remax Hallmark In Conversation with Steve Garganis of Mortgage Architects

Q & A | Jenelle Cameron of Remax Hallmark In Conversation with Steve Garganis of Mortgage Architects

Q&A | Jenelle Cameron In Conversation with Steve Garganis of Mortgage Architects

I participated in a Q & A with one of my good realtor friends, Jenelle Cameron of Remax. We had a chance to discuss the current impact of COVID-19 on mortgages and the real estate market in general. Find out the latest on mortgages, what’s happening with closings during this time, and more!

Continue reading “Q & A | Jenelle Cameron of Remax Hallmark In Conversation with Steve Garganis of Mortgage Architects”
Rental properties as a secure long-term investment

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…”

Getting divorced - Should I keep the family home

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?”

Honoured to be rated among Top 3 Best Mortgage Brokers in Burlington!

mortgage_brokers-burlington-2018-drk

I truly love what I do, so being recognized as a top performer is just icing on the cake for me!

I’m honoured to be named among the Top 3 Mortgage Brokers in Burlington by Three Best Rated®, which identifies a city’s top three local businesses, professionals, restaurants and health care providers.

Continue reading “Honoured to be rated among Top 3 Best Mortgage Brokers in Burlington!”

Darryl Sittler made his fortune in Real Estate… not Hockey!

RRSP home buyers plan

A few years back, I had the privilege of hearing one of my childhood idols – former Toronto Maple Leafs captain, Darryl Sittler – speak at a Real Estate Investment Network (REIN) meeting.

In case you haven’t heard of REIN, let me share some details about this group of real estate investors that gets together to network and share valuable information affecting real estate in Canada. The leader of the group is Don Campbell. His approach to buying investment properties has proven to be very sound and profitable. In fact, his “Top 10 Best Cities to Invest” lists are legendary! Continue reading “Darryl Sittler made his fortune in Real Estate… not Hockey!”

I’m getting divorced. Should I keep the family home?

Divorce Image, March 2018

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.

Having worked on 8,000+ mortgage applications at this stage in my career, I’ve witnessed my share of separations and divorces. I’m going to share what I’ve seen – a financial and personal perspective on marital splits.

Continue reading “I’m getting divorced. Should I keep the family home?”

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?”

Mortgage Awards of Excellence Marketing Campaign of the Year Finalist!

Steve Garganis Marketing Campaign of the Year Badge - Mortgage Awards of Excellence 2018

I’m honoured to be named a finalist for Marketing Campaign of the Year at the inaugural Mortgage Awards of Excellence 2018 for this news site!

Thank you to my amazing clients and loyal readers!

Winners will be announced live during the awards on May 3, 2018. Regardless of the outcome, I’m thrilled to be named a finalist for something I truly enjoy doing

This site continues to evolve because you want to learn more about the mortgage industry, and you have trusted me to offer facts and my true opinions since I started this site in 2009.

I enjoy helping educate Canadians on the value of using a mortgage broker when making among the largest purchases of your lifetime – buying real estate!

Continue reading “Mortgage Awards of Excellence Marketing Campaign of the Year Finalist!”

Rent is up, vacancy is down… rental properties make sense

Real Estate Investment Image, Feb 2018

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!

Rents have definitely gone up with inflation (or even higher, in many cases, as we have seen in urban markets like Toronto and Vancouver). This is part of what makes rental properties attractive rent rises with inflation and, in many cases, even higher. This is how you create your own pension or retirement income! Continue reading “Rent is up, vacancy is down… rental properties make sense”

Bridge loans explained… your bank hates them but they are extremely useful

bridge-loansBridge loans are short-term loans that bridge the gap between two different closing dates.  More commonly used when an existing homeowner sells their home, and buys another home, with two different closing dates.   But bridge loans have become a very popular way to take possession of that new home while it’s empty for 2 or 3 weeks to allow for renos.   Best of all, it’s really inexpensive!

THE OLD WAY

In the past, most homebuyers would have their selling and buying dates match.   It’s always been a bit of a juggling act as you have to pack your moving truck and unpack it, all in less than a day.   Somehow, everyone manages to get it done… but you talk about one of the most stressful days in your life….moving ranks right up there!   Throw in some kids, maybe a dog, and a house full of stuff and you have a real chore on your hands….

THE NEW WAY… Continue reading “Bridge loans explained… your bank hates them but they are extremely useful”

Darryl Sittler made his fortune in real estate, not hockey.

RRSP home buyers planLast week, I had the privilege of attending REIN’s (Real Estate Investment Network) monthly workshop.  One of my childhood idols was a guest speaker.  I’m talking about Darryl Sittler, the former captain of the Toronto Maple Leafs.   In case you haven’t heard of REIN, let me share some details about this group of professionals.

REIN is a group of real estate investors that get together to network and share valuable information that affects real estate in Canada.   The leader of the group is Don Campbell.   If you haven’t heard of him, you should.  His approach to buying investment properties has proven to be very sound and profitable.  His “top ten best cities to invest” is legendary. Continue reading “Darryl Sittler made his fortune in real estate, not hockey.”

Credit counselling, Consumer proposal or Bankruptcy? I only like one of these options.

debt aminationA couple, in their 30’s, contacts me for a mortgage.  They want to buy a new home.  She is a teacher, he is a Manager at a computer firm.  Incomes are good.  I check their credit.  Let’s stop here for a minute..   If they had good credit, an approval is simple and we would provide the clients with several mortgage options.

But let’s assume that this couple ran into some debt and credit issues 3 years ago… and they made 3 different choices about how to resolve those credit problems.  Credit counselling, Consumer Proposal and Bankruptcy.  And I’ll bet the results will surprise you…I want to take you through each scenario and show you how long each of these 3 options affect your ability to finance a home.. Continue reading “Credit counselling, Consumer proposal or Bankruptcy? I only like one of these options.”

Baby Boomers 10 yr real estate retirement plan

Last week, I was asked to comment on BMO’s Retirement Report  which pointed out that more Canadian Baby Boomers are using their home as their retirement fund.  The BMO study shows the baby boomer generation were not downsizing like many experts were thinking.  But instead, they are buying bigger, more expensive homes.   The thinking is that the higher priced homes will grow their retirement fund more quickly and more securely.

Several Financial Experts commented on this study…. mostly offering negative reviews about this retirement strategy….. including BMO… you know, eggs in one basket, diversification, that sort of thing…  there is merit in the statements but I really don’t agree with the negative spin….. Here’s a link to my quotes about the “10 year plan” in The Star.

The 10 year plan has grown in popularity over the last 5 years as we’ve seen the value of our RRSPs or other investment drop in value.   It’s capitalizing on real estate values going up over the long-term.    It’s really simple to understand….

THE 10 YEAR RETIREMENT PLAN

Here’s an example of what one couple did….Let’s say you’re between the ages of 35 and 55.

  • You own a home worth $500k.
  • You have a $300k mortgage., but you can afford to buy a $700k home.
  • Your new mortgage is $500k.
  • You are committed to keeping that home for 10 years….and you can afford the payments..
  • In that 10 years, the goal is to pay down your mortgage by at least half, if not more. (a realistic goal considering the average Canadian pays off their home in 12 to 17 years).
  • if your home goes up by 5% each year, on average (and this is probably a realistic number looking back at historical values), then your home should be worth $1.14million.  
  • the 10 year timeframe is critical… we want to give enough time to live through any up or down real estate market…

Using the example above, in 1o years you should have a mortgage of $350k or less and house worth $1.14millon… that’s $790,000 of equity in your home.   Oh, and it’s all Capital Gains Tax Free….

Does it sound too easy or too good to be true?   It’s really not… take any 10 year period in history…  work out your own stats… This is reality…

By the way, the couple I’m referring to are real… they are actual clients of mine.   They bought their home in 2007 for $850k… They have paid down their mortgage to $300k…this is way ahead of schedule…(the low interest rates have helped)….  The value of their home today is approximately $1.5million.  They have $1.2million in equity today.  They estimate the home will be worth $2million in 5 years…  but even if it isn’t, even if the property is only worth $1.2million 5 years from now, I’d say they’ve done pretty well, wouldn’t you agree?

And for those that prefer stocks and bonds, then stick with those investments…  There isn’t one good strategy…  This plan is less exciting and probably a little boring…  but I like boring when it comes to my money and my retirement…

This plan isn’t for everyone.  You need to be comfortable with debt and understand real estate…. and you need to commit to owning real estate for 10 yrs (it doesn’t have to be the same house.. you can move)…

If you need help with this plan or just want more info to help understand it, give me a call anytime.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Bridge Loans…your bank hates them but they can be a great financial tool when buying….

Bridge loans are short-term loans that bridge the gap between two different closing dates.  More commonly used when an existing homeowner sells their home, and buys another home, with two different closing dates.   But bridge loans have become a very popular way to take possession of that new home while it’s empty for 2 or 3 weeks to allow for renos.   Best of all, it’s really inexpensive!

In the past, most homebuyers would have their selling and buying dates match.   It’s always been a bit of a juggling act as you have to pack your moving truck and unpack it, all in less than a day.   Somehow, everyone manages to get it done… but you talk about one of the most stressful days in your life….moving ranks right up there!   Throw in some kids, maybe a dog, and a house full of stuff and you have a real chore on your hands….

More buyers are taking a more relaxed approach.   Bridge Loans are gaining in popularity.. It allows for a more relaxed move over a 2 or 3 day period… or in the case of renos, maybe 2 or 3 weeks.    It’s certainly less stressful and could even save you money if you are doing a bigger reno…(contractors could end up charging you a little more if they have to deal with a family living in the house during renos).

Let’s take a look at one example on how much Bridge Financing works and what it costs…

In this example we’ll use a couple that sold for $400k.   Closing is November 1.   There is an existing mortgage of $250k.    They bought another house for $600k.   Closing is November 22.  They will spend $50k in renos for a new kitchen and bathroom.   They want a $450k mortgage to cover renos, closing costs and take out some money for personal use.   Here’s how the Bridge loan works:

  • Bridge loan amount would be $150k… we calculate this by taking the Purchase price ($600k) less the new mortgage amount ($450k).
  • Rate of interest will vary but it’s around Prime plus 2.00% (today’s prime rate is 3.00%).
  • Lender admin fees range from $250 to $500.
  • Legal fees vary depending on Lender and Lawyer… $200 to $400.
  • Interest costs are $20.55 per day.  Total interest would be $287.70.
  • Overall total cost of the Bridge Loan would be between $737 and $1200 depending on your lawyer’s legal fees and Lender admin fees.

Some qualification, limitations and risks when getting a Bridge Loan.

  • Bridge Loans are only offered by the mortgage provider for your new home.  It’s a product most Banks don’t like to offer as there is really no profit for them.  They get nervous about the possibility of your existing home not closing.   There is some exposure and risk to the Bank… it’s limited but it’s there.
  • Your lawyer will be required to provide an undertaking to register a mortgage if the sale of your existing home collapses (that’s not a common occurrence but it can happen).
  • Speaking of sales… you must have entered into a firm sale on your current home to qualify for a Bridge Loan.
  • Lenders will only offer a Bridge Loan equal to the down payment required for your new home.  This amount cannot be greater than the equity remaining in your current home.
  • There is also the option of obtaining Private Lender bridge financing but this is more expensive and should only be considered as a last alternative.

Standing back and looking at the big picture, I think most of us would be happy to pay $700 to $2,000 for sake of being able to have an empty house for 2 to 4 weeks to do a clean up or reno, etc.

If you need more info on how Bridge loans work or need help with a situation, call me anytime.  Always happy to help.

Steve Garganis

steve@mortgagenow.ca

416 224 0114

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