Financial comfort and joy!

It’s the most wonderful time of the year! And, it’s also the busiest. It can be difficult to get through the holiday season without at least some level of increased stress.  If financial stress is something you are concerned about, then add something new to your holiday to-do list this year - a holiday debt-check!

Why think about debt just when you’re getting excited about the holidays? Well… that excitement is the reason you want to have a cool, intelligent appraisal of your financial situation. It’s tempting to overspend at this time of year. That’s why so many Canadians suffer from “plastic shock” when their credit card bills arrive in January.

Do a quick assessment. Are you carrying too much credit card or other high interest debt that is eating up too much cash flow? If the answer is “yes,” it’s worth having a conversation about streamlining your finances. You don’t have to wait until your January bills arrive, you can do a debt check before the holidays are fully upon us.

I have access to some great rates and can help set you up with a smart plan with sensible payments, and smooth sailing through the hectic holidays and into the new year.

Worried that your locked-in mortgage means your options are limited? I can do an assessment to determine if the savings each month will far outweigh any penalties. Here’s one client example:

Joe’s and Gina’s mortgage, car loan and credit cards totalled $300,000. Since they had enough equity in their home (minimum 20% required), I helped them roll that debt into a new $304,000 mortgage. Even though they paid a fee to break the existing mortgage, the payoff was considerable:

                                                                        Current                           NEW

                                          Today        Monthly Payments*     Monthly Payment*

Mortgage                         $250,000                $1,195                             $1,453

Car loan                           $  25,000                $   495                             $       0

All credit cards                $  25,000                $   655                             $       0

Total                                                               $2,345                             $1,453

That’s $892 less each month - a huge improvement in cash flow! Joe and Gina are planning to put tax returns and holiday bonuses against their mortgage principal – and they’ll be out of debt well before their original timeline – with some real peace of mind about their finances.

While refinancing is not an option for everyone, I have access to other financing options that can help. If you can benefit from this kind of financial restructuring, get in touch. I love to help at this time of year. Financial comfort and joy: that could be one of your best gifts!

  *3.09% current and new mortgage, 25 year am. Credit cards 19.5% and car loan 7%, both at 5 year am. OAC. Subject to change. For illustration purposes only.

Thank you for your support during 2019!

It’s been a phenomenal year of learning, growth and accomplishments. I have so enjoyed working with my fabulous clients, and meeting many new friends thanks to your referrals.  Looking forward to another successful year in 2020! Thank you for your confidence and trust.

Climate change and your mortgage

Buying or building an energy-efficient home or making energy-saving renovations to your existing one can give you a more comfortable and healthier living space, while also reducing greenhouse gas emissions. And investing in energy efficiency will lower your costs for
years to come!

If you paid mortgage default insurance when financing your home, you can also get a big savings boost thanks to special energy efficiency programs available from Canadian mortgage insurers. Mortgage default insurance is required when your downpayment is less than 20% and is only applicable to homes priced below $1,000,000.

Homeowners building or purchasing a qualifying energy-efficient home are eligible for either a 15% or 25% mortgage default insurance premium refund depending on the level of energy efficiency achieved. Savings can be quite substantial!

Existing homeowners who make retrofits to improve energy efficiency can also apply for this refund by contacting the mortgage insurer that insured their mortgage. You’ll be required to complete an NRCan energy assessment evaluation pre and post retrofit, and you’ll need to improve your home’s energy efficiency by the required amount.

Applications are accepted from the borrower within 2 years of the closing date of the mortgage and supporting documentation must be no more than 5 years old.

Having an energy efficient home is a win for your lifestyle, the environment, and your pocketbook! If you have questions, please get in touch at any time.

Negative interest rates – really!?

Negative rates are an interesting trend in Europe and Japan right now. How is it possible that anyone would hand over their money only to end up with less at maturity? Does that make sense?  Similar to how you pay the bank to rent a safety deposit box or pay your investment advisor a fee, with negative rates, savers are in effect paying to have their wealth stored with an institution they trust. These savers want to safeguard their wealth with certainty instead of investing in their current uncertain and slow-growth economies. On the flip side, for borrowers, it means that they will pay back less than the amount they borrowed, which will fuel more borrowing. Here in Canada, the central Bank is holding rates based on a much stronger Canadian economy. Without a crystal ball, we don’t know for sure where rates are heading, but remember that I have your back and will always stay up-to-date on the current environment and how it may impact you.

Five Incentives for First-Time Buyers

When buying your first home, don’t leave money on the table! Take advantage of the programs and incentives offered by the federal government that can help you achieve your new home.

1. First-Time Home Buyer Incentive

This shared equity program provides 5% of the cost of an existing home, or 10% of a new home for first-time buyers with the minimum 5% down for an insured mortgage. With the maximum allowable household income of $120,000, the top purchase price would be approximately $505,000 with 5% down. You are required to pay the incentive back after 25 years or when you sell the home based on the property’s fair market value, whether it has increased or decreased in value.

Assumes 25 yr am, 5 yrs, 2.69%

2. RRSP Home Buyer’s Plan

First-time buyers can withdraw from their RRSPs up to $35,000 per person tax free to buy or build a qualifying home, which can be a big boost to your overall downpayment, and may help you reach the 20% down needed to avoid mortgage default insurance premiums. You are required to repay the withdrawn funds on a 15-year repayment plan that begins the second calendar year after withdrawal.

3. First-Time Home Buyer Tax Credit

Qualifying first-time buyers can claim a portion of their home purchase on their personal tax return for the year of purchase, which will help to offset your closings costs such as legal fees. The $5,000 non-refundable tax credit provides up to $750 in federal tax relief.

4. GST/HST New Housing Rebate

If you are purchasing a new construction home or performing substantial renovations to an existing home, you can recover some of the tax that you paid if all eligibility conditions are met. Canada Revenue Agency’s Guide RC4028 – GST/HST New Housing Rebate – has all of the specifics.  Submit the form applicable to you along with your personal income taxes within two years of the actual closing date.

5. Green House Program

Homeowners purchasing a qualifying energy-efficient home with an insured mortgage are eligible for up to a 25% mortgage insurance premium refund, which can be a substantial savings! If you buy a home and renovate it to make it more energy-efficient you can also apply for this refund.

Have questions? Without a doubt the mortgage and homebuying world is a complex one! Getting expert advice early is a key part of the homebuying process. Get in touch at any time for a review of your situation and important money-saving advice!

How to get a mortgage if you have bad credit

Sometimes, a difficult past is standing in the way of a bright future. Bad credit can do that to you. After all, credit history is an integral part of the mortgage approval process.

If you’re running into roadblocks or don’t think you can get mortgage financing, don’t give up. It is possible to get a mortgage with bad credit! And it can be a very important step in getting you back on track financially should you need to pay off a significant amount of debt.  

One of the primary advantages of working with a mortgage broker is the access you get to a wide range of lenders, including institutional and private lenders that specialize in bad credit mortgages. While the guidelines are different for each, these lenders look at your overall situation and entire credit history, and some will consider your application even after a consumer proposal or bankruptcy. For certain areas of the country, primarily large metropolitan areas, there are lenders that will lend just based on the equity in a home.

Keep in mind that even though you will have a higher interest rate and may pay additional fees, bad credit mortgages are typically short term i.e. 1 year term. During this time, we can work together to improve your score and then look to move you to a better rate longer-term mortgage.  

If you don’t have an immediate financing need, or your situation is such that you don’t qualify with one of these lenders, there are ways you can make up for bad credit, which include:

1. Increasing your downpayment to 20 per cent or more.
2. Asking a trusted friend or family member to be a co-signer. Your co-signer will need a good credit score and have the capacity to be responsible for the mortgage if you are unable to handle the payments. 
3. Or consider taking the time needed to repair your credit first. A much improved credit situation can save you the cost of a higher interest rate and less favourable terms.

If your past is standing in the way of your future… get in touch today and let’s chart a course to get you where you want to go.

Easy ways to boost your credit score!

1.  A secured credit card will allow you to establish or re-establish a solid credit rating. These cards require a deposit so the cardholder can never be in default.
2. Check your credit report and make sure it is accurate. If there are discrepancies, get in touch with the credit agency.
3. The single biggest factor in your credit score is having a timely bill payment history.  Don’t let a bill get past due, and never let a bill go to collections.
4. Your score is based on your credit balance relative to your available credit. Try not to use more than 30 per cent. If your limit is $10,000, don’t let your balance go higher than $3,000.