Debt Restructuring – It Pays to Have a Plan

Many of us are carrying consumer debt from several sources – credit cards, car loans, personal loans, student loans – and are paying much more in interest costs than we should be. 

An option available to homeowners is paying off higher interest debts with a refinanced mortgage that has a lower interest rate. 

This is worth considering if you are paying a lot of interest for your other debts.  Debt restructuring can help lower your overall monthly payments, giving you financial breathing room rather than living paycheck to paycheck.  

Just as importantly, a well thought-out debt restructuring plan can set you up for success, because at the end of the amortization period, your total debt is zero.  With revolving credit – such as credit cards – you may be paying a lot in interest without ever attacking the principal. 

Let me know if you would like my help in reviewing your financial needs.  I can advise you on how to use the equity in your home to reduce the interest paid on your other debts.  We may be able to arrive at a solution that gives you more control over your interest costs, and leaves you with more money at the end of the month. 

Photo credit: [c] Adrian Van Leen for openphoto.net

Our first house

I was talking to several people this week about their plans to buy their first home and I think I was getting almost as excited as they were.

So I got to thinking about my first childhood home, and how thrilled we were, as new immigrants to Canada, to be buying a house.  We'd never had so much space before - and the back yard with its stand of mature lilacs was heavenly!

Here's a snapshot from our basement rec room on Mccrie Street in Sarnia.  I had friends over for my birthday.  Don't you love the panelling?

What are your favourite memories of your first home?

10 Tips for First Time Homebuyers

If you're starting to think about buying your first home, there's lots to know.   This article from Moneyville.ca is a great starting point to help get you focused. 




Photo credit: [c] Miroslav Vajdic for openphoto.net

April 15, 16, and 17 - Mississauga Lifestyle Home Show and Cottagefest

I will have a booth at the upcoming Mississauga Lifestyle Home Show.  If you would like a free pass, please let me know and I would be happy to forward one (or several).

The featured speaker is Mark Cullen, "Canada's Best Known Gardener".  Come and see what's new for spring, including new eco initiatives on "Green Street."


Hours of the show:
Friday, April 15th from 1 p.m. to 9 p.m.
Saturday, April 16th from 10 a.m. to 6 p.m.
Sunday, April 17th from 10 a.m. to 5 p.m.

Location:
Hershey Centre, 5500 Rose Cherry Place, Mississauga

I look forward to seeing you there!

Rates bouncing down - then up - then down - so what should you do?

Should you lock in your mortgage rate or stay variable? 

An insightful article on the Canadian Mortgage Trends site discusses the pitfalls of trying to pin down market factors and interest rate changes over both the short and long-term.   The reality is that while we all wish we had that proverbial "crystal ball", it simply doesn't exist. 

As mortgage brokers, we are constantly being asked to predict the unpredictable.  Forecasts, especially long-term forecasts, should be taken into account, but with one caveat: the farther out the forecast, the less likely it is to be accurate. 

It is important to remember that, in any economic times, YOUR long-term financial goals are the most important factor.  From this, you can structure your mortgage term, and mortgage features, to best position yourself to achieve those goals.

Photo credit: [c] Adrian Van Leen for openphoto.net

Spring Into Great Home Renovations

If your spring home renovation plans involve larger projects, it can make sense to refinance your mortgage, which allows you to get the very best borrowing rates by using the equity in your home.  A mortgage refinance will allow you to spread your payments over a longer period of time than with a line of credit.  You may also be able to consolidate a range of higher interest borrowings (credit cards and car payments, for example) at the time of your mortgage refinancing.  I can look carefully at your financing needs and advise on how best to secure additional mortgage funding. 

If you take the time now to establish a clear idea of the improvements to your home and how you will pay for them, you could be putting those plans into action by the time warmer weather finally arrives.  Ideally, a well-planned renovation can boost both your enjoyment of your home and its equity. 

Photo credit: [c] James Jones for openphoto.net

Why use a mortgage broker?

You're ready to buy that home.  Your next step is to go to your local branch of one of the big banks, right?  Or do you just apply for a mortgage online to get the best deal?

The answer is: neither.  That is, unless you have lots of time and expertise to comparison shop and negotiate the best terms and rate for you.  For most of us, a mortgage is the single biggest debt we will ever take on.  Whether you're borrowing for the first time, or refinancing an existing mortgage, studies show that negotiating and shopping around can save thousands of dollars over the life of your mortgage.

So what can a mortgage broker do for you?

Here are seven ways we can help:

1.  We have negotiating power
Brokers deal with multiple competing lenders and can often access exclusive rates. We also have the power to negotiate rate discounts from lenders, which we pass on to our clients.

2.  We give you choices and knowledgeable advice
You don't need to become a mortgage expert.  Brokers offer consultative service, advice and solutions that are customized to each client’s needs. And unlike banks, we work for you.

3.  We save you time
We will work around your schedule to make the transaction as quick and easy as possible.

4.  We save you money
In most cases, our professional advice and assistance is free! We're paid by the lender for placing you with their products.

5.  We pre-qualify you
Whether you're shopping for a new home, or refinancing your existing mortgage, we can help you obtain a pre-approved mortgage, often with up to a 120-day interest rate guarantee, to protect you from rising rates.

6.  Preserve your credit rating
When you shop for a mortgage, there is an accumulation of lender inquiries on your credit bureau report, possibly affecting your credit rating and, ultimately, the rate and terms of your mortgage. This isn’t the case with a mortgage broker, who only does one inquiry yet can still get many competing lenders to quote on your business.

7.  Peace of mind

The Canadian Association of Accredited Mortgage Professionals has a stringent Code of Ethics that members are required to adhere to in order to retain membership.

If you have any questions or comments for me, I would love to hear from you! 


Photo credit: [c] Michael Jastremski for openphoto.net

Thinking of picking up a little condo in Florida?

With Canadian real estate prices potentially cooling off, quite a few of us are looking south of the border for a vacation or investment property.  Not everyone is aware that there may be U.S. tax issues (income tax, state tax, and /or estate tax) to consider, however.  This Globe and Mail article touches on a few of these at a high level, but if you're serious, talking to a cross-border tax specialist is vital.

Stress Test Your Own Debt

Worried about Canadians' sensitivity to a rise in interest rates?  A great article by the popular Globe and Mail columnist Rob Carrick reviews how you can test your own financial vulnerability, together with some solutions if you're getting into the trouble zone.  One solution Rob missed: if you have equity in your home, and have unsecured debt with high monthly payments, you may be able to significantly ease your cash crunch by consolidating the debt into a mortgage or home equity line of credit.   Then, you can focus on paying down the mortgage with any extra cash.  As Rob Carrick says, "Less debt gives you more immunity to higher interest rates."