Your New Year's Resolution: Pay Down That Mortgage Faster!

Among the top resolves on many peoples' list of New Year's resolutions involves their budget – saving money, cutting back on expenses, paying off debts, etc. If one of your resolutions is to try and pay down your mortgage faster, call today to see if any of these options might work for you.

1. Change your payment frequency. If you currently pay your mortgage monthly, here's a way to make an extra month's worth of payments each year without too much hardship: Take your monthly payment and split it in half. Now, pay that amount every two weeks. By the end of the year you'll end up making 26 half-payments, or the equivalent of 13 full payments instead of 12!

2. Reduce your amortization period. The less time you stretch your mortgage over, the less you'll pay in total interest. Ask how a shortened amortization could affect the amount of your monthly or bi-weekly payments, and how much you could potentially save on total interest.

3. Increase your payments. If you received an end-ofyear bonus or a recent pay raise at work, consider applying it toward your outstanding mortgage debt. Even a little extra payment on a regular basis can shave years off your mortgage and save you thousands in interest charges!

Please call today for more tips on how to meet your 2014 financial resolutions!

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A New Year, A New Approach

Today's homebuyer is recognizing that in order to have an edge in the real estate market, they must have a complete financial plan in place before even starting their home search.

A professional financial advisor will get you on the right track, giving you suggestions on how to clean up your personal finances and organize your current debts. You'll also want to run a credit check on yourself and verify that the information shown in your file is correct. There are two national credit bureaus in Canada: Equifax Canada (www.equifax.ca) and TransUnion Canada (www.transunion.ca) - check with both of them. You can get a copy of your credit file mailed to you for free or, if you prefer to see it immediately, you can request it online for a nominal fee. Note that while your mailed credit report is available to you for free, there is no free service to access your actual credit score.

Once you have an idea of your current financial status and therefore the general price range you'd like to stay within, we'll sit down together and begin the process of searching for your ideal home. You may even want to talk to your loan provider about a pre-approved mortgage, as having this in-hand can often give you the edge over another bidder when making a competing offer on a house.

Thinking of moving in 2014? Please call today for the latest updates on today's real estate market, especially local conditions in your area of interest.

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Hold That Rate!

You've probably seen the news and heard recent rumblings about how Canadian mortgage rates are going up. You'd like to take advantage of today's low interest rates, but aren't quite ready to buy right now. What should you do? Call your mortgage broker today to ask about a rate hold!

Mortgage rates have dropped to historically low levels over the past few years, lulling buyers into a sense of complacency. It's important to remember that mortgage rates are cyclical, however, and as such what has been down will eventually rise again. While we can't control how high rates will go, what we can do for our clients is make sure you don't pay more than today's level, by guaranteeing you the current mortgage rate for a set period of time – regardless of how much higher the rate rises after today.

When you call, we'll explain in more detail how lenders define a rate hold, and how it will allow you to budget for your next home with a more precise idea of your long-term financial obligations. You'll also want to hear how you can ensure a better chance of landing your dream home by securing a pre-approved mortgage – something that will give you the edge over another bidder who may have a "subject to financing" clause in his or her offer.

Please call to ask what today's interest rates are, what a preapproved mortgage entails and how long lenders will guarantee their best rates for you through a rate hold.

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Round Up, Pay Down

There are a few tips you can follow to pay down your mortgage debt sooner that sound so simple, you'll wonder why everyone doesn't follow them.

One tip is to round up an uneven monthly mortgage payment to an even amount, and watch how even a small increase can make a big difference. For example, call and ask how adding just $50 a month to your mortgage payment can allow you to pay off your mortgage sooner, and slash thousands off your interest payments.

Where can you find an extra $50, $100 or more "extra" money a month? As any financial advisor will tell you, it's in the little things – brewing your own coffee before you leave home, reading the news online instead of subscribing to a daily newspaper, packing a lunch and reducing your restaurant or fast-food lunches to a once-a-week treat instead of a daily habit are just some suggestions.

Another tip, if you get paid bi-weekly, is to pay your mortgage on the same schedule. Paying bi-weekly as opposed to monthly is another way to pay off your mortgage faster without even noticing. Again, you can save thousands in interest payments with this little change too!

Please call for more ways to make paying off your mortgage faster, more efficient and cheaper!

Down With Debt

A survey resulting in a 2013 Household Debt Report* was recently conducted to measure how much debt Canadian households are carrying, and how that debt is being managed. Highlights of the survey are as follows:

• 83 percent of Canadians have some form of debt, up from 74 percent in 2012.

• The average monthly debt payment made by Canadians has declined, dropping from $1,138 in 2012 to $986 in 2013.

• 44 percent of respondents said their household debt level has decreased over the past five years, while 28 percent said it has increased.

• 34 percent of respondents cited their mortgage as their largest source of debt, followed by car loans (19 percent of respondents) and education funding (14 percent of respondents).

The report indicated that 58 percent of the respondents expect to be debt-free within five years. For respondents who hold a current mortgage, 33 percent expect to be debt-free within five years, while 56 percent expect to be debt-free within 10 years. Of those with other types of debt, 29 percent expect to be debt-free within the next year.

Have you taken the time to evaluate your current debt situation? Today's continued low interest rates make it a great time to review your financial obligations to see if there's a way you can pay down your debt faster. For example, choosing a shorter amortization period for your mortgage will not only allow you to become mortgage-free sooner, but also save you thousands of dollars over the life of your mortgage.

Please call for a no-obligation analysis of your current mortgage loan and to find out if there's a way you can eliminate your debt faster!

* The BMO 2013 Household Debt Report was conducted by Pollara using an online survey of 1,005 Canadians fielded by Pollara between July 12th and 16th, 2013. A probability sample of this size would be accurate to +/- 3.1 percent, 19 times out of 20.

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Your Mortgage Question Checklist

Have you ever gone to the doctor with a list full of questions in your head, only to draw a blank when you finally sit down with the doctor? It's sometimes the same with your mortgage broker, so to make it easier to remember all your questions, tick off the applicable topics on the list below and have it handy!

• How much can I afford to pay for my new home?

• How much do I need for a down payment?

• What other costs should I budget for?

• What are the different types of mortgages, and different types of interest rates?

• What are my payment options, and can changing my payment frequency make a difference to my mortgage balance and term?

• What's the difference between mortgage prequalification and mortgage pre-approval?

• How can I check my credit rating? How does it affect my mortgage rate?

• Does it make sense for me to refinance at this time?

• Am I able to renew my mortgage early?

• How can I pay off my mortgage sooner?

• How can a mortgage broker help me find the right financing?

• How long does the mortgage processing or transaction take?

• Can I get a mortgage to renovate my property, or to pay off other debts?

• I'm self-employed – how will this affect my mortgage application?

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Questions?   Call Thomas Parrish 604-512-8526 or Wanda Holmes 604-512-8527 or email us at info@thomaswanda.com

Please call today with all your questions!

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