Eight tips you won’t get from your bank in 2019

If you’ve got a mortgage – or plan to get one this year – you probably know that it’s more complicated than it used to be just a few short years ago. That said, I have many tips and strategies that can help you get the mortgage you need, tweak the one you have, or help you plan for renewal. Here are my top eight: 

1. To get the best deal, you need options. When you go to your bank, you’re talking to one lender. Their best deal might not be THE best deal. It’s also difficult to qualify at a bank if you are self-employed, have past credit issues or finding the stress test a challenge.  Credit unions, alternative and private lenders are increasingly helping people get into new homes or refinance their mortgage.
2. Best-rate quotes are often meaningless.  Mortgage rule changes have thrown mortgage pricing up in the air. Your actual rate depends on a whole slate of factors, which is why you can only get an accurate rate quote after an in-depth assessment of your personal situation.
3. The devil is in the details. People tend to focus on rate, but you can save thousands by making sure you get a mortgage that has fair penalties, allows you to prepay, and ensures you will also be treated fairly at renewal. Don’t end up paying exorbitant fees, or be forced to take a high rate at renewal.
4. An insurable mortgage might be a smart move.  If your mortgage is “uninsured” and you want to switch to a new lender for a better rate at renewal, that lender will qualify you using a 'stress test', which may affect your ability to move your mortgage, and giving your lender no incentive to offer you the best rates. It’s possible that you can switch your mortgage to a lower-rate insurable mortgage that has more flexibility. 
5. A 30-year amortization can give you wiggle room on cash flow.  A longer amortization (20% or more in equity required) allows you to minimize your mortgage payments and free up cash flow for uses like investing, business needs, post-secondary education, maternity leave, home maintenance, or other life situations.  You can keep your payments at a shorter amortization and only use this flexibility if the need arises.
6. Monitor your credit score. The best rates go to borrowers with the best credit scores. Lenders are also paying closer attention to any warning signals that clients may have trouble paying their mortgage. If your credit slips and your lender feels your risk has increased, you may be offered a higher rate at renewal.
7. A rental suite can be a sweet mortgage helper. A home with a rental suite could help you buy a single-family home instead of a condo, get you into that neighbourhood you love, or help you offset mortgage payments in the house you’re in so you can become mortgage free sooner or have the freedom to channel money into other areas.
8. Plug your biggest money leak. If debt is choking your cash flow and you have enough equity in your home, you may be able to move that debt to your lower-rate mortgage and save thousands. Using home equity to pay down debt is one of my specialties!

New year. New chance to make sure your mortgage strategy is working for you and helping you build wealth. Get in touch for a review of your situation. 

Broker vs Banker

You want it all: the best available rate with exactly the right features you need to live comfortably with your mortgage and pay if off in record time. If you want the perfect mortgage, you need to shop around. And that’s my strength. I offer access to over 50 of Canada’s leading lenders, including major banks, credit unions, and national, regional and private lenders. I do the research for you, finding you the best mortgage across multiple lenders. 

Your bank, as great as they are with your day-to-day banking, may not be the best choice for your mortgage because they represent just one available lender. Access to lender choice is one difference between getting a mortgage from a Bank vs a Broker, here are more:

Getting a mortgage is a very significant financial event. That’s why you want someone who is highly specialized in the mortgage marketplace and focused solely on your needs. Get in touch for advice that is relevant to your situation.

Five brilliant ways to work a reverse mortgage

It’s true: a reverse mortgage - one of the best financial tools available to Canadians over 55 - can greatly assist cash-strapped seniors who need to pay off their debts and live comfortably in their family home. But reverse mortgages are also a brilliant strategy for well-heeled retirees who want to unlock the value in their homes for wealth-building strategies or to enhance their retirement.

Here are five brilliant reverse mortgage strategies:

1.  Buy a second property. Who would have thought you could pull the value out of your first home – after retirement – and use the money to pick up a little vacation home… or maybe an investment property?

2.  Start a business.  Canadians are increasingly pursuing a passion or using their professional talents to start a new business after retirement. A reverse mortgage is a great way to pull value from your home and make an investment in something you love to do.

3.  Give your children a leg up on the homebuying ladder. Tougher qualifying rules have created extra obstacles for first-time homebuyers. A reverse mortgage lets you keep enjoying your home – while giving your children some help to get into their own home.

4.  Renovate the home you love. Maybe your dream is a gourmet kitchen to hone your cooking skills. Or an outdoor entertaining area to make the most of your family time. Or maybe you’d like to renovate to make your home more accessible as your mobility decreases. A reverse mortgage can generate the funds to make it all possible.

5.  Use your home to get away! A reverse mortgage can give you a cash infusion to enhance your lifestyle. Many retirees are looking forward to more travel – and a reverse mortgage can provide the funding to make it happen, without ever giving up your home!

Bet you didn’t know a reverse mortgage could be such a powerful financial tool!  You can access equity in your home – tax free -  and never make a mortgage payment on those funds. You always retain ownership of the home, and you are never required to move or to sell. It’s good to know that all those years of mortgage payments have earned you some rewards. Interested? Let’s talk!

If you are rate shopping, you’ll notice that the lowest available rate will be for a variable mortgage, which is why I’m often asked “what does variable mean and how is it different from a fixed-rate mortgage?”

With a variable mortgage, your rate will move in conjunction with your lender’s Prime lending rate, which in turn tracks the Bank of Canada’s rate, and will typically be quoted as Prime minus a specified percentage. It can be difficult to predict our economic future so you won’t know for sure what kind of rate ups and downs might be ahead of you.

With a fixed-rate mortgage, your payments are fixed for the term of the mortgage, which offers stability.  Fixed-rates are usually better suited to first-time buyers or those who haven’t owned a home for a very long period. Ask yourself these questions: Do you like or need to know exactly what your payment is going to be over a longer period of time? Do you want to avoid the need to consistently watch rates? Do you have less than 20% down? If you answered “yes” to all or most, a fixed-rate mortgage could be the better choice for you. 

A variable-rate mortgage is best suited to people who have a flexible budget and can tolerate slightly more risk. Ask yourself these questions: Do you watch market conditions? Can you handle any rate increases that could increase your payment? Do you have more than 20% equity in your home? If you answered “yes” to all or most, a variable-rate mortgage might best suit your needs. Most variables allow you to exercise an option to “lock in” a fixed rate at any time for the remaining portion of your mortgage term or longer. You can also set up your payments at what they would be if you took the higher rate, which helps you pay down your mortgage faster, and creates a financial buffer for you if rates rise later. 

If the uncertainty of a variable rate is going to give you sleepless nights, you’re in good company. Many Canadians prefer the certainty of a fixed-rate mortgage. They know exactly how much they will pay over the term of their mortgage, and they can plan accordingly… with no financial surprises. However, lower-rate variable mortgages with a strong Prime minus offer give you the potential to save a lot on interest. And, if your circumstances change and you need to get of out of your mortgage, you will appreciate the lower penalty to get out of a variable versus a fixed-rate mortgage. 

Your best option is to get professional and personalized advice. I would be happy to help you determine which option is best suited to your needs.

For many Canadians, their home is a terrific repository of wealth. Home equity can build nicely by chipping away at payments and through increasing home values. Accessing home equity through a refinance (min 20% home equity) has for years been an easy, low-cost way to get needed funds. Various new mortgage rules and “stress-testing” has made refinancing more complicated, but it’s a strategy that continues to make good financial sense for certain homeowners that qualify.

Here are five reasons why:

1. Fresh start. If you have too much high-interest debt, you may be able to roll everything into one manageable monthly payment on a low-interest mortgage. Then you get a financial re-set, and can potentially save thousands of dollars in interest.
2. Dream home. If you’ve found the perfect cottage, chalet, or the retirement home of your dreams, refinancing may be the way to make that purchase happen now if you’re not quite ready to sell your primary residence.
3. Renovate. Renovating your home is often a less expensive option than moving. And the right renovations can improve the quality of your life and increase the value of your home.
4. Wealth building. A rental property can give you a great wealth building opportunity and a source of retirement income.  Or you may want to invest in a new business venture.
5. Large expenditures. You may be able to get the funds you need for major expenses (tuition, wedding etc.): a much better strategy than loading it all onto high-interest credit cards.

I have access to dozens of lenders, including alternative lenders that are not subject to the new rules and have less stringent qualification guidelines. If you are interested, I can provide you with a personalized analysis so you can determine whether a refinance makes sense. My job is to help you pay down debt, build wealth, create financial security, and enjoy life to the fullest!

Staying home throughout retirement with a mortgage that pays

Some retirees still believe that sometime during retirement, they must leave the home they love. But it is possible to stay home and have the mortgage they’ve paid all their lives start paying them. That’s the concept of a reverse mortgage, a potential route to financial freedom. There are no payments required, and ownership of the home is always maintained. The tax-free cash received from a reverse mortgage can be taken over time or in one lump sum, which can create a financial cushion and help manage ongoing bills, or can provide the funds needed to pay off debts, purchase a second home, start a new business, fix up the home, travel, or help a loved one buy a home. If you – or someone you know – is age 55 or over and is exploring their retirement options, get in touch for more details and a personal analysis.