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Thursday, March 21, 2013

Tips on how to reduce your mortgage and save for the long term.


Tips on how to reduce your mortgage and save for the long term.

  1. Always go biweekly on your mortgage payments and NOT monthly. Monthly payments will work out to 12 installments and biweekly will end up to be 13 monthly payments a year.

  1. Always try to exercise your pre-payment privilege each year. Most banks you can put 10-20% on the original mortgage towards the principal. So when you have extra money, your tax refund or vacation pay, put it towards the mortgage principal.

  1. Go variable but make your mortgage payments based on the fixed. This way you will be throwing more principal towards your mortgage

4.   Sometime’s it not only the mortgage that people have to pay. It is also the other debt such as car loans and credit cards. It is best to refinance the mortgage plus the debt and make one payment and that way you are able to save money and be more aggressive on your mortgage payment



That is why is important to speak to the mortgage broker to teach you all the options you can exercise.



Thursday, March 14, 2013

Buy A New House or Sell Your Old House First - Chicken Or The Egg ?


Buy A New House or Sell Your Old House First - Chicken Or The Egg ?

The huge question looms: does one buy the new house first? Or sell the old one?

The second-or third-time buyer will need to consider the matter of an existing house, ongoing mortgage payments, and the cash needed for the down payment required to close on the new house. You have the money of course, there is real equity in your current home, but until that home is sold that cash is locked up securely in your current mortgage bank's vault.

So, what comes first, the chicken or the egg? Sell first, and, particularly in a sellers market, risk becoming homeless, or perhaps worse, moving in with the in-laws while the furniture is in storage

Or, in a buyers market, find the perfect house but you are unable to make an offer because your house might take a while to find a buyer.


What are my options?
  • Do your homework. Get pre-approved for a mortgage
  • If you decide to own two homes, look into a refinance of your existing house which will give you the funds for the down payment of the new house.
  • Arrange for a home equity line of credit. However, you must put that line of credit in place before listing your house. The bank will send out an appraiser and he will probably notice and report the sign on your front lawn.
  • Arrange a bridge loan. However, a firm sale and purchase must exist.
Always be an informed client. 








Thursday, March 7, 2013

What is a line of credit?


What is a line of credit?

A Line of Credit is type of revolving loan with pre-approved credit limit. The line of credit gives the borrower flexible access to funds, whenever they need it.

All major Canadian banks offer lines of credit to their customers. The funds available in the line of credit can be withdrawn and used at any time. The borrower can withdraw part or all available funds from his line of credit and they can also repay the funds back at any time.

A line of credit is very similar to a credit card because as soon as you repay your balance in part or in full you can use the funds again. That's why the lines of credit are considered revolving credit. A line of credit can be unsecured or secured by the home owned by the borrower up to 80% of the value.  

With most banks you can access the funds in your line of credit by writing a cheque, using your bank card, and via telephone or online banking. Usually the bank you have opened the line of credit with, will require a minimum monthly payment of interest only on  the amount you have borrowed.

One of the major benefits of credit lines is the fact that they have lower interest rates compared to most credit cards. Using a line of credit is very convenient and in effect is no different than using your bank checking account.
Another great benefit is that you can be flexible repaying your loan. If you have the funds you can repay everything borrowed on the credit line at once without a penalty. All in one a line of credit is a great way to have access to funds whenever you need it.

Lastly a secured line of credit is a great way to protect you from fraud. No one can register a mortgage on your property without discharging the existing line of credit.
Always be an informed client.