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.

2. 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.

3. 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.

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. 

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.

Which is better, renting or buying?

Which is better, renting or buying?

In most cases, it's better to buy a home than to rent.  You've probably heard statements like:

“If you rent, you’re throwing away your money.”


“Owning your own home is a forced savings plan.” And “Home ownership is an excellent path to build wealth.”

Such sentiments are common in any discussion that involves home-buying and personal finances. It’s common knowledge that buying a home is a better financial move than renting. After all, you’re building equity instead of throwing away your money, right? Well, maybe not quite. Renting makes more sense if:

1. You have a lot credit card debt and have yet to save a down payment.
2. You envision moving very soon
3. Your calculations show that the cost of renting is a better deal than the cost of buying.
4. You don't really want the responsibilities and risks associated with being a homeowner. 

There's absolutely no rule that says you must own. 

Whatever feels right to you is the right move—as long as you can afford it.

Become an informed client.

For more information call your Toronto Mortgage Broker at 416-920-9930

Or Visit us online at www.eddiemac.ca

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.

2. 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.

3. 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.

Should I refinance my mortgage?

Should I refinance my mortgage?

The answer is “yes”.

WE should learn to make life easier by adding all the debts into one.

So if you have a mortgage and line of credit payments, car payments and credit card debts it would make sense to combine all into one. Canadians always complain we work a lot but in the end of the month, there are never enough funds to cover everything.

Some people often say that a car payment with zero percent doesn't make sense to add onto the mortgage. But I disagree. If a client is sick, they will have to make the mortgage payment and the car payment regardless. However, if they have one payment on the mortgage and things are financially tight, they can reduce the mortgage payments.

Remember, banks when they give you credit they know statistically the odds are against you. You could loose your job, get sick, go through a separation or loose your marbles and eventually will have several payments and it will be difficult to pay every off at once.

So my advice is to make things simple. Make one payment without the headaches.

Be an informed client.

What is a bridge loan?

Sometimes when you buy a home, the closing date for the home you are selling does not match the closing date of the house you are buying.    Some of the typical reasons for a difference in closing dates might be:   you want to get some renovations completed on the home being purchased before moving into it or perhaps you could not get the seller to give you the closing date that you really wanted.   So if the closing date of the home you are buying is before the closing date of the home you have sold, you will need a bridge loan.

The bridge loan amount is really your total down payment, less your deposit because the lender is advancing the rest of the mortgage money on the closing date for the home you are purchasing.



For a Bridge Loan, the lender will sometimes ask that the bridge loan be secured on the property being sold.   Some lenders will also charge a bridge loan “set-up fee”.  Also, remember that a property sale must be firm before a lender will arrange a bridge loan for the borrower(s).  And finally, lenders will not advance more than 90% of the value of the property being sold.



Always become an informed buyer.

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