SNAP-SHOT of my BEST RATES Principal Residence QUICK CLOSES in 30 days or less & SPECIAL OFFERS (some conditions apply) Fixed Term Specials 2.74% = 3 Year Fixed Term 3.39% = 5 Year Fixed Term (90 day rate hold) ***3.34% = Mortgage Over $300,000 - 5 Year Fixed Term Variable Term Specials 2.50% = Variable Closed is prime MINUS 0.50% (matures March 2017) 2.50% = Variable Closed is prime MINUS 0.50% (60 day rate hold) ***2.45% = Mortgage Over $300,000 - Variable Closed is prime MINUS 0.55% Other Mortgage Term Specials 100% FINANCING = 4.85% to 5.35% 5 Year Fixed Term with 5% cash back on closing STANDARD MORTGAGES AND RATES Variable Mortgages & Lines of Credit 2.70% = 3 Year Variable Closed is prime MINUS 0.30% 2.55% = 5 Year Variable Closed is prime MINUS 0.45% 3.50% = Line of Credit at Prime Plus 0.50% 3.80% = Variable 5 Year Open is prime plus 0.80% * Prime rate is currently 3.00% Fixed Term Mortgages (Four Month Rate Holds) 1 Year Fixed Term = 2.89% to 2.99% 2 Year Fixed Term = 2.79% to 2.99% 3 Year Fixed Term = 3.09% to 3.19% 4 Year Fixed Term = 3.34% to 3.39% 5 Year Fixed Term = 3.45% to 3.59% Fixed Term Mortgages (SIX Month Rate Holds) 1 Year Fixed Term = 3.09% 2 Year Fixed Term = 3.14% 3 Year Fixed Term = 3.24% 4 Year Fixed Term = 3.49% 5 Year Fixed Term = 3.74%
Friday, 6 December 2013
Fixed Vs. Variable Mortgage: A Quick Comparison
Let's take a look deeper look at the age old question my clients ask...."So, Variable or Fixed?". First, let's make some assumptions: 1) You can handle fluctuation in your mortgage payments and you will NOT loose sleep wondering if your rate will sky rocket because your parents keep telling you how they paid double digit interest rates in the 80's. 2) You qualify for a variable rate with acceptable debt-to-service ratios at the qualifying rate of 5.35% 3) Let's assume the Bank of Canada will start to raise the overnight rate by 0.25% in July and September of 2015, January and March of 2016, in July and September of 2017, and two more in July and September of 2018. 
You will notice this strategy does not save you much in interest paid, however your balance after 5 years has lowered substantially...best of all you won't even notice the extra payment. Our assumption of the rate increases by the Bank of Canada may be considered aggressive - what if rates do not rise as fast as we assumed?. But, some may rightfully say that this small saving is not worth the risk inherent in the variable rate choice. Here's a great tool that I'd like to share. One of our lenders has prepare this Fixed vs Variable Comparison Calculator. Feel free to download and let the numbers speak for themselves. At the end of the day, you need to know what your risk tolerance is. We can only make an educated guess at what will happen to mortgage rates over the next 5 years. We want you to be comfortable with your mortgage choice however in our comparison, today's variable rate would be the better option over the next five years … assuming that you can sleep at night. Mark Kupina | www.KupinaMortgage.com
Here's a summary of how a $300,000 mortgage at a five-year fixed rate at 3.35% compares to a five-year variable rate at 2.45% (prime minus 0.55%):
A great strategy for variable-rate mortgage borrowers to set their monthly payment at the 5 year fixed rate payment amount. In this case, that would mean their initial monthly variable-rate payment of $1,336 would actually be $1,474. This would equal an extra payment of $138 per month going directly towards their mortgage principal. This allows you to get 'used to paying a higher rate' while enjoying the principal pay down. As the variable rate increases throughout the term, you simply adjust the $138 extra payment down so that your total monthly payment remains constant. Here is a summary of the effects when using this strategy on our comparison.
You will notice this strategy does not save you much in interest paid, however your balance after 5 years has lowered substantially...best of all you won't even notice the extra payment. Our assumption of the rate increases by the Bank of Canada may be considered aggressive - what if rates do not rise as fast as we assumed?. But, some may rightfully say that this small saving is not worth the risk inherent in the variable rate choice. Here's a great tool that I'd like to share. One of our lenders has prepare this Fixed vs Variable Comparison Calculator. Feel free to download and let the numbers speak for themselves. At the end of the day, you need to know what your risk tolerance is. We can only make an educated guess at what will happen to mortgage rates over the next 5 years. We want you to be comfortable with your mortgage choice however in our comparison, today's variable rate would be the better option over the next five years … assuming that you can sleep at night. Mark Kupina | www.KupinaMortgage.com Thursday, 5 December 2013
Variable Rate Update
Good morning As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday December 4th, 2013, the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is fabulous news but don't forget to make the most of the low payments you still have, as the rate will increase in the future. If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account, or Retirement Savings Plan as your payments continue to remain low. The holiday season is upon us which often means our personal spending on gifts and celebrations will potentially blow our budgets as we spend more than we maybe should… let me help you get back on track with a review of your financial situation which might be a savings plan, purchasing an income property or debt consolidation to pay off high interest loans or credit cards. If you would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision: "The global economy is expanding at a modest rate, as the Bank expected. Although growth in several emerging markets has continued to ease, growth in the United States during the third quarter of 2013 was stronger than forecast. Even if some of this pickup was due to temporary factors, the data are consistent with the Bank's view of gathering momentum in the U.S. economy. In Canada, the housing sector has been stronger than expected but is consistent with updated demographic data and a pulling forward of home purchases in light of favourable financing conditions. The Bank continues to expect a soft landing in the housing market. Non-commodity exports continue to disappoint and the price of oil produced in Canada has eased further. Business investment spending is up from previous low levels, but is still recovering more slowly than anticipated. On balance, the Bank sees no reason to adjust its expectation of a gradual return to full production capacity around the end of 2015". Based on this news and continued slower level of economic activity in Canada, the Bank does not expect to increase their rate in the foreseeable future with any change most likely to occur late 2014 or even not until 2015! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates did go up but then have gone down a bit since at around 3.49 to 3.69% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is January 22nd, 2014 at which time I'll be in touch again. I wonder if I can ask a favour – this is a great time for first time home buyers who are thinking of purchasing in the New Year to start with a pre-approval plan now to get them on track and save unnecessary interest. Also if you hear a friend or family member talk about going thru a financially tough time – maybe I can help with some budgeting and debt consolidation options for them. In either of these cases, would you mind passing my contact information on to them – this is very much appreciated. Yours truly, Mark Kupina | www.kupinamortgage.com
Wednesday, 27 November 2013
Your Cellphone Account can Impact whether you’ll be Approved for a Mortgage
Equifax and TransUnion are the two main credit reporting agencies in Canada. They collect all the data on your loans, lines of credit and credit cards to create your credit report and calculate your credit score. This information is then used by lenders—including mortgage lenders—to determine whether you're a good credit risk. Recently, both credit reporting agencies started including cellphone accounts in their credit reports. This means if you make a cellphone payment after the due date, it appears on your credit report and reflects negatively on your borrowing profile. Even worse, if you allow your cellphone account to go delinquent and it's sent to a collection agency, not only does this appear on your report, it can also reduce your credit score. Mortgage lenders use this information to make underwriting decisions. Therefore, having a negative record with your cellphone provider can actually impact your likelihood of being approved for a loan and increase the interest rate you'll pay. If you've recently walked away from a cellphone contract, it's a good idea to get the company to put in writing that the contract has been fulfilled and is now closed. This can help prevent any damage to your credit rating. For more information on how to preserve or improve your credit rating, call us today. Mark Kupina | www.KupinaMortgage.com
The Art of Giving: How to Cultivate Joy this Holiday Season, and Beyond!
'Tis the season for giving. But with all the marketing, financial pressure and expectations at this time of year, sometimes giving doesn't feel so good. Sometimes it feels like an obligation. Or something you can't really afford. Or something designed to make you look good. In those cases, are you really giving anything at all? This holiday season—and throughout next year—instead of giving till it hurts or to outdo everybody else or to avoid feeling guilty, give something that makes you and the recipient feel happy. As an added bonus, this kind of giving rarely costs much! Here are some suggestions:
- Give your time. Visit a loved one you don't see very often. Call a few special people on the phone—not a text or email—and spend some time finding out what's really going on in their lives.
- Give your skills. Give some lessons on social media, a couple of hours of landscaping, paint a room, or babysit.
- Give gratitude. Tell someone how much they add to your life, how they help make you a better person, how they make you smile—and thank them for it.
- Give your "Top 10" list. Make a list of all the books, stores, service providers, movies, etc. that exceeded your expectations, and pass it on. Everybody likes to go with proven choices.
- Give a giggle. Save up the stories, jokes or quotes that make you laugh and share them with loved ones. Again, use the phone so you can hear each other laugh!
- Give forgiveness or an apology. If you or someone close to you has caused pain, ask for forgiveness or grant forgiveness. There's nothing more healing and life-affirming than genuine forgiveness and reconciliation.
- Give random acts of kindness. Put money in expired parking meters, pick up litter, hold the door for somebody. The more people you help feel good, the sooner your whole world will feel great!
Wednesday, 30 October 2013
Annual Mortgage Review: How you can Benefit from a Mortgage Tune-up
Most people have regular checkups for their health, car and investment portfolio. But when's the last time you had a checkup for your mortgage? Your mortgage is likely the biggest financial transaction you'll ever make. It deserves as much—or more!—attention as all those other things. As your local mortgage professional, I'm happy to offer a no-cost annual mortgage review. It doesn't matter whether you're a current client of mine or not. This free service is offered without obligation of any kind. Why is an annual mortgage review so important? In a word, "change". Your family may be changing (new additions, kids going to university, retirement approaching), your financial situation may be changing (a raise, job loss, new investment goals, new debts), your plans may be changing (moving, getting married, starting your own business), interest rates are constantly changing, and new mortgages are constantly being introduced with potentially valuable new features. With all this change happening, it definitely makes sense to see if your existing mortgage is still working as hard as it can and providing maximum value. I'll sit down with you, review your mortgage, total debt picture, investment goals and current plans, then present you with professional advice about mortgage strategies that can help you achieve more while paying less. For more information on this free service, call me today! Kupina Mortgage Team | www.KupinaMortgage.com
Interest Rate Differential: What you need to know before Breaking your Mortgage
It's tempting to look at today's historically low mortgage rates and consider breaking out of your mortgage early to get a better rate. Certainly, if your existing rate is significantly higher than today's rates, this might make economic sense. But before you decide, consider what you might have to pay in IRD (Interest Rate Differential). An IRD is a prepayment penalty charged by a bank when you break out of your mortgage early. When a bank lends money, it borrows those funds from investors and guarantees to pay the investors a certain return over time. If you break out of your mortgage early, the interest the bank was earning is no longer coming in, so it doesn't have enough funds to continue paying investors the agreed-upon rate. To make up the difference, it charges an IRD. Current interest rates affect how much IRD you pay. If rates are rising—which means the bank can replace your mortgage with one at a higher rate—the IRD is generally lower. And if rates are dropping, the IRD is generally higher. Another consideration is that if you break out of your mortgage to go to a new lender, you usually also have to pay about $1,000 in legal fees. The way banks calculate IRDs is complicated and takes into account your existing rate, what current rates are, how big your balance is and how much time is left in your term. Some people feel that if your balance is at least $250,000 and the difference between your existing rate and the new rate is at least 0.5%, then it makes sense to break out of your mortgage, since the IRD will be lower than the interest you'll save in the future. However, the only way to know for sure if it makes sense to break your mortgage early is to have an analysis done of your specific situation. Please call me today if you'd like to take advantage of this free service. Mark Kupina - www.kupinamortgage.com
Wednesday, 23 October 2013
Today's Bank of Canada Announcement
Good morning, As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday October 23, 2013, the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is fabulous news but don't forget, to make the most of the low payments you still have as the rate will increase in the future. If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account, or Retirement Savings Plan as your payments continue to remain low. Maybe you are thinking of saving for a special occasion or expect a large expenditure in the near future (car, college/university, cottage or investment property purchase), and would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision: "The global economy is expected to expand modestly in 2013, although its near-term dynamic has changed and the composition of growth is now slightly less favourable for Canada. The U.S. economy is softer than expected but as fiscal headwinds dissipate and household deleveraging ends, growth should accelerate through 2014 and 2015. Overall, the global economy is projected to grow by 2.8 per cent in 2013 and accelerate to 3.4 per cent in 2014 and 3.6 per cent in 2015. In Canada, uncertain global and domestic economic conditions are delaying the pick-up in exports and business investment, leaving the level of economic activity lower than the Bank had been expecting. The Bank expects that the economy will return gradually to full production capacity, around the end of 2015". Based on this news and slower level of economic activity in Canada, the Bank does not expect to increase their rate in the foreseeable future with any change most likely to occur well into 2014 or even 2015! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates did go up but then have gone down a bit since at around 3.59% to 3.79% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is December 4th, 2013 at which time I'll be in touch again. I wonder if I can ask a favour – this is a great time for home owners that have significant high interest credit card or other debt to consider their options for refinancing. If you know of someone that is looking for advice on their mortgage options and strategies on how to save unnecessary interest, would you mind passing my contact information on to them – this is very much appreciated. Mark Kupina | Kupina Mortgage Team www.KupinaMortgage.com
Friday, 27 September 2013
Retirement got you SPOOKED?
Find out how you can retire with peace of mind – at an enviable age – using a safe, secure investment plan! With almost another year behind us, this is a perfect time to starting thinking about creating a retirement plan or reassessing the one you already have. Are you certain that you're on track to reach your retirement financial goals? Do you have a plan in place? These are the kinds of questions you need to be asking yourself now before it's too late. Most people spend more time planning their next holiday than they do in planning their financial future. Sad but true. As the old saying goes, "Most people don't plan to fail, they simply fail to plan." Don't let that happen to you. With the right plan and the right advisors, you can position yourself, and your family, on the path to financial freedom. If you're not already working with a financial planner, or if you're not happy with the one you're using, I have a top-notch financial planner that I'd be happy to recommend. They can provide you with a free, no obligation consultation to help you analyze your current situation and map out a solid plan to help you achieve your financial goals. Whether you're looking to plan for retirement, reduce your taxes or increase and protect the wealth in your current plan, here's your chance to consult with a trusted financial advisor at no cost. For more info, call us today! Kupina Mortgage Team | www.kupinamortgage.com
Dividend Tax Credit: a Legal Way to cut your Taxes
When you're building savings for a long-term goal like retirement or education, keep in mind the tax implications of your investment. If you're earning bank interest, you pay income tax on that interest. But if you invest in stocks that pay a dividend, you can reduce taxes and keep more money for financial goals. Dividends are payments made by corporations to their shareholders. Since dividends are paid out of the corporations' after-tax profits, the government recognizes that those dividends shouldn't be taxed again when a shareholder earns them. To avoid double taxation, the federal government subjects dividends to a gross-up, which is then offset by federal and provincial non-refundable dividend tax credits. As a result, dividends end up receiving about the same preferential tax treatment as capital gains. In some cases, you can end up with enough tax credits left over from your dividends to apply to tax from other sources. It's important to remember that the gross-up and dividend tax credits don't apply to RRSPs. All the dividends earned within your RRSP are taxed as income when withdrawn, so it doesn't make sense to invest registered funds in dividend stocks. If you'd like some easy-to-understand advice about benefiting from the dividend tax credit, I'd be happy to introduce you to one of my trusted financial planner partners. Kupina Mortgage Team | www.kupinamortgage.com
Collateral Mortgages: the Devil is in the Details.
Many people are unaware that there are two basic types of mortgages: conventional and collateral. With a conventional mortgage, the amount you're borrowing (property value minus down payment) is the amount that's registered. But with a collateral mortgage, the amount that's registered is 100-125% of the property value, and the lender has both a promissory note AND a lien registered against the property for the total registered amount. TD Canada Trust switched to collateral mortgages in 2010, followed by ING DIRECT in 2011. The advantage of a collateral mortgage is easy access to credit. Since the mortgage is already registered for a larger amount than you need to buy the house, you can access additional funds in the future without any extra steps or legal fees. But there are also several downsides of collateral mortgages:
- *Free transfers or switches to a new lender when your term is up aren't usually available. Most other lenders don't like the fine print and restrictions of collateral mortgages and won't accept them unless they're a refinance, which costs you legal and appraisal fees.
- *You could end up paying a higher interest rate at renewal. If your collateral mortgage makes it difficult to switch lenders at renewal, you don't have the ability to shop around for the best rate. That could end up costing you up to 1% more on your mortgage rate.
- *Your home may be harder to sell. When buyers see the 100-125% lien that collateral mortgages put on your house, they may not be as motivated to buy.
Friday, 13 September 2013
More Mortgage Legislation Changes Impacting Home Buyers
Rising Rates and Stricter Qualifying Guidelines May Make it Harder for you to Qualify for a Mortgage and Lower your Purchasing Power Even Further (to be in effect by December 31, 2013) Rising Rates and More Emphasis on Debt May Impact Borrowers and their Mortgage Options When purchasing a home, the key areas that impact whether you qualify for a mortgage at all and for how much, are based on your income, credit and debts including your new mortgage payments and available down payment. In July 2012 there were some significant mortgage legislation changes that impacted qualifying for a mortgage including using a higher interest rate to qualify depending on the term you select, more income verification and down payment for the self-employed as well as lowering the amortization to 25 years. All these changes impacted mostly those that have less than 20% down payment and therefore require default insurance (CMHC, Genworth or Canada Guaranty). Unfortunately, there is more to come that has already taken effect with some lenders now, and others by December 31st, 2013. All these changes are intended to curb consumer debt accumulation over and above income levels and to reinforce the importance of ensuring that borrowers do not over extend themselves financially with more debt than they can handle. Overall, these changes are a good thing to ensure consumers don't overspend and become "house rich and cash poor"; meaning being a home owner but living pay cheque to pay cheque with so much debt (including credit cards, loans, lines of credit etc.) that there is no extra cash for savings to build a financial cushion should there be an income loss in the future. The downside is that these changes are impacting the ability for many to qualify to purchase a home, especially impacting first time home buyers who are struggling to find an affordable property that they qualify for close to where they live and work. So what are the new changes coming into effect by December 31st, 2013 and how will they affect your borrowing and purchasing power? The changes fall into three categories which are focused on your debt to income ratios and this will determine how much of a mortgage you qualify for; 1. Debt: The payment that must be considered when calculating how much you qualify for is now a minimum of 3% of the outstanding balance on all unsecured lines of credit and credit cards that you have. Even if you have a lower minimum monthly payment required by the creditor, this will no longer be used. For secured lines of credit that are registered against real estate, a minimum monthly payment that is to be factored into your qualifying is now the outstanding balance calculated over a 25 year amortization using either the benchmark rate (5.34% as of Sept 12th, 2013) , or the actual interest you are paying. Even though your secured line of credit might only have a minimum payment of interest only, you now have to qualify using a much higher payment. Some lenders are taking this one step further and using the "credit limit" instead of the outstanding balance. How to overcome this challenge; if you pay your entire balance off each month, and can provide confirmation of this, then you will not be impacted by this change. Work with me on your personal household budget so we can create a plan to pay down your existing debt to a point where you qualify for the mortgage you require 2. Guarantors: if you can't qualify for a mortgage on your own, often a guarantor can be added to your application. The guarantor is not on title but is on the mortgage and typically doesn't live in the property with you. The new changes mean that you can no longer use the income of the guarantor to help qualify for the mortgage unless they will be living in the property with you. You will now be required to prove you can afford the property without using your guarantors income as well. How to overcome this challenge: Ensure that you purchase a home and obtain a mortgage that you can actually afford to pay back on your own without any financial contribution from a guarantor. You may have to adjust your wish list a bit, or purchase a more affordable home to get you onto the property ladder. 3. Heating Costs; using about $75 to $100 per month to calculate the cost of heat in your qualifying has been the norm til now. Changes now require that a higher amount than this be used as determined by the lender and will be based on the the purchase price, size of the property and location. How to overcome this challenge: The reality is you are most likely going to be paying more than $100 per month on heat and utilities anyway so ensuring you can afford these bills is a good thing before you buy the home. When you find a property you want to buy, ask the existing home owners for copies of the utility bills over the last twelve months so you can see what it will actually cost to heat your home thru the entire year. Of course, your usage might change from the existing home owners but at least you will have an idea. Again, ensuring you can actually afford to pay the utility bills before you purchase the home is good. These changes, along with recent rising interest rates, are impacting the amount borrowers qualify for which in turn determines the purchase price of a home. So what happens next? Firstly, don't panic as these changes may not impact your particular situation at all. If you are considering either moving and purchasing a bigger home or purchasing your first home, call me for a free consultation to see exactly how these changes may impact your qualifying for a mortgage. There are many strategies we can discuss together to make your dreams of home ownership an affordable reality. Be prepared for these changes so you we can create a clear plan and path to home ownership for you. Kupina Mortgage Team | www.kupinamortgage.com
Wednesday, 4 September 2013
Today's Bank of Canada Announcement
As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday September 4th, 2013, the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%... a recurring theme as you can tell. This of course is fabulous news but as always, I like to remind you to make the most of the low payments you still have as the rate will increase in the future. If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account, or Retirement Savings Plan as your payments continue to remain low. Maybe you are thinking of saving for a special occasion or expect a large expenditure in the near future (car, college/university, cottage or investment property purchase), and would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision: "The global economy continues to expand broadly as expected, but its dynamic has moderated. In the US, the process of normalization of long-term interest rates has begun in the context of stronger private domestic demand. Recent data, however, point to slightly less momentum overall than anticipated. In Europe, there are early signs of a recovery, and Japan's situation remains promising. In a number of emerging market economies, financial volatility has increased, adding uncertainty to growth prospects, although China continues to grow at a solid pace. Commodity prices have been relatively stable, with geopolitical stresses putting some upward pressure on global oil prices. Uncertain global economic conditions appear to be delaying the anticipated rotation of demand in Canada towards exports and investment. While the housing sector has been slightly stronger than anticipated, household credit growth has continued to slow and mortgage interest rates are higher" Based on this news and the continued subdued inflation, the Bank does not expect to increase their rate in the foreseeable future with any change most likely to occur well into 2014! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates have gone as the bond market has rallied over the last few weeks, at around 3.49% to 3.69% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is October 23rd, 2013 at which time I'll be in touch again. I wonder if I can ask a favour – despite rates going up a little, they are still very low and it is a great time for home owners that have significant high interest credit card or other debt to consider their options for refinancing. If you know of someone that is looking for advice on their mortgage options and strategies on how to save unnecessary interest, would you mind passing my contact information on to them – this is very much appreciated. Kupina Mortgage Team | www.kupinamortgage.com
Wednesday, 28 August 2013
Tax Advantages of being Self-Employed
If you're looking for a way to accelerate your savings so you can achieve financial independence more quickly, consider self-employment. The safest way to start is by earning self-employed income on the side while keeping your current full-time job. But regardless of whether you're self-employed part-time or full-time, you can benefit from many tax-deductible business expenses:
- *Home Office. Calculate the portion of your home that you use for self-employed income, then deduct that percentage of rent or mortgage payments, utilities, home insurance, property tax and home maintenance.
- *Business Entertainment. Deduct 50% of the cost of meals or events that involve business discussions.
- *Communications. Calculate the portion of phone, cellphone and Internet that are for business, then deduct that percentage of monthly bills.
- *Transportation. Keep track of how much of your vehicle's mileage relates to business, then deduct that percentage of costs for gas, maintenance, insurance, etc.
- *Subscriptions. Deduct the cost of magazines, newspapers, websites and cable channels related to your business.
- *Travel. Deduct business travel costs such as airfare, subway tickets, hotels and en route meals.
- *Continuing Education. Deduct the cost of courses that make you more effective in your business.
How recent CMHC changes affect Canadians
Over the past few years, the Canadian government has been taking several steps to encourage Canadians to reduce their outstanding debt. The main way the government's been doing this is by restricting mortgage availability and making mortgages more expensive. In August, CMHC announced a new policy which reflects the government's goal to reduce household debt. Unfortunately, this latest change may cause mortgage rates to rise yet again. Here's how this change came about. Earlier this year, Ottawa announced it was limiting the amount of mortgage-backed securities it would guarantee in 2013 to $85 billion. Mortgage-backed securities are pools of mortgages that lenders sell to investors. Since mortgage-backed securities are insured by CMHC, investors are willing to accept a lower rate of return, and lenders can pass on this lower rate to consumers in the form of lower mortgage rates. Canadians are so hungry for low mortgage rates, by the end of July lenders had already used up $66 billion of the $85 billion annual limit on mortgage-backed securities. This means lenders have to get through the rest of the year on a much reduced volume of low-cost lending funds. To make sure the remaining funds are shared equitably, CMHC is limiting each lender to $350 million worth of mortgage-backed securities per month. This means lenders suddenly have far less low-cost mortgage funds available to pass on to consumers. The good news for Canadians is that taxpayers are guaranteeing fewer mortgages and therefore exposed to less risk. But the bad news for homebuyers and people refinancing their mortgages is that longer-term mortgage rates are likely to start creeping up. If you're in the market for a mortgage or refinancing, give me a call. As a mortgage broker, I have access to lenders who are less likely to be affected by this latest change (such as credit unions), and I can provide you with professional advice to help make sure you and your family enjoy the most affordable financing possible. Kupina Mortgage Team | www.kupinamortgage.com
Friday, 2 August 2013
Psycho-Cybernetics: How your Subconscious "Set Point" Determines your Financial Future
Psycho-Cybernetics is a way to define our self-concept so we can attain personal goals. Many of the training methods used for elite athletes are based on this proven concept—and it can also help us reach financial goals. Each of us has a blueprint or "set point" that guides our experience. Studies show that regardless of how much they win, lottery winners usually return to their original financial circumstances. Similarly, self-made millionaires who lose their money usually earn it back quickly. In both cases, they're simply returning to their natural set point. So how do we change our set point? By changing our attitude! To achieve a positive outer goal we have to set a positive inner goal. Lack of money isn't the problem—it's a symptom of underlying attitude. To change that attitude, start by visualizing and really FEELING what it's like to be a millionaire, who your friends would be, what you'd do each day. Then move on to affirmations that declare your intention and send a powerful message to your subconscious. Here's an example, "I release my non-supportive money experiences from the past and create a new and rich future." For best results repeat out loud morning and night in front of a mirror. Gradually, you'll begin to shift your set point and start to achieve your goals faster and easier than ever before! Kupina Mortgage Team | www.kupinamortgage.com
Stricter Debt Ratio Standards on the Way
When CMHC tightened mortgage rules last year, among the changes were stricter debt ratios and income confirmations. For typical borrowers, these are key factors in determining whether or not you'll get a mortgage. If you're close to the line on debt and income, last year's changes have made it more difficult for you to qualify. And unfortunately, things are about to get even more difficult! On June 27, 2013, CMHC issued new guidelines for calculating debt ratios and confirming income documents. While most lenders have already been following these rules, CMHC is now closing the "loopholes" that allowed some lenders to offer easier approval for borrowers with tight debt ratios. Here are some of the rules that have been clarified:
- *If you have variable income from things like bonuses, tips and investment income, lenders must use an amount not exceeding the average income of the past two years.
- *If you own other non-owner-occupied rental properties, the principal, interest, property taxes and heat on those properties must be deducted from gross rent revenue or included in "other debt obligations" when Total Debt Service ratio is calculated.
- *For unsecured credit lines and credit cards, no less than 3% of the outstanding balance must be included in monthly debt payments.
- *For secured lines of credit, lenders must factor in "the equivalent" of a payment that's based on "the outstanding balance amortized over 25 years."
- *For heating costs, lenders must obtain the actual heating cost records of a property or use a set heating cost formula. This can double or triple the cost factored into debt ratios on larger properties, and reduce it on smaller ones.
Tuesday, 2 July 2013
How the Rich use their Minds to Attract Wealth
Yes, it's possible to think and grow rich. That's what wealthy people have been doing for generations. By developing the right mindset, they attract abundance into their lives—and a key form of abundance is wealth! Here's how to do it:
- *Envision that you're already rich. Picture it. Feel it. Behave as though you've already accomplished it. Give thanks for having received such wealth. Once you've thoroughly conditioned your mind to this new reality, you will eventually achieve it.
- *Focus on openness and possibility, not need and obligation. Instead of working because you have to and taking courses because you're required to, allow yourself to be attracted by opportunities that offer obvious rewards. It's a lot easier to engage in wealth-generating activities when you really want to do them!
- *Trust your intuition. Your subconscious mind is constantly collecting data and noticing signs. If you're unexpectedly drawn to an opportunity, explore it and check out the potential. Maybe your intuition knows more about getting rich than your conscious mind.
- *BUT remember, getting rich also requires more than thinking—it requires action. Don't just wait for it to happen. Set goals, make a plan, talk to mentors, reduce debt, only make major purchases that deliver a return on investment. By changing your thinking and taking action, you WILL become rich!
Slow, Steady Economic Growth, with No Rise in Bank of Canada Rate until Next Year
There's still lots of turbulence in the global economy, with Europe in recession, the US growing at a modest pace, and China's demand for commodities slowing. But in Canada, there's reason to be modestly optimistic. After slowing in the second half of 2012, our economy recovered somewhat in the first quarter of 2013, and the Bank of Canada is forecasting growth of 1.5% for the year as a whole. We added 95,000 jobs in May, retail sales rose strongly in February, housing starts jumped 13.8% in May, and core inflation has remained at the low end of the Bank of Canada's target range for the past nine months. Of course, the stock market took a beating in June, but that's actually the result of a good news story. What triggered investors to sell was the US Federal Reserve suggesting that it may soon stop adding stimulus to the economy since the US is beginning to show more signs of growth. Investors took that as a signal that interest rates may soon start rising, which would raise the cost of money. The fact that the US economy is growing in spite of the massive government cuts that were triggered in March (known as the sequestration) is remarkable. This demonstrates that there's underlying strength south of the border, which is always good news for Canada. However, our economic growth is likely to lag behind the US. It's unlikely that our inflation rate will rise beyond Bank of Canada targets until late 2014 or early 2015. Also, thanks to tighter mortgage rules, growth in mortgage and consumer credit has slowed significantly. These factors give the Bank room to maintain the current overnight rate of 1.0% for the rest of this year, with rates unlikely to start creeping up until the second half of 2014. If you'd like a free analysis of how these forecasts might affect your mortgage, please feel free to call me today. Kupina Mortgage Team | www.kmortgage.ca
Friday, 31 May 2013
Here's a great way to ENHANCE your Employee Benefits
Let's face it, employee benefits are hard to come by nowadays. In today's tough economy, companies are cutting their spending on "non-essentials" and are looking for low-cost ways to increase employee moral, retention and productivity. Here's how you can help your current employer do exactly that... Does the company you work for have 25-700 employees? If so, how would you like it if your company could provide you with an exclusive benefits program that allowed you to $AVE BIG when buying, selling and refinancing your home? Introducing our new voluntary Employee Mortgage Benefit Program! With this exclusive program, you and your fellow co-workers can save TIME, ENERGY and MONEY when buying, selling and refinancing. If that sounds good to you so far (and it definitely should), let me ask you this... Would you be open to helping us "get a foot in the door" at your company? All we need is the contact info for the key decision maker and we'll take care of the rest! If you'd like us to send your company a FREE "Discovery Package" with more information about our Employee Mortgage Benefits Program, call us today! Kupina Mortgage Team | www.kmortgage.ca
How to Become Mortgage-Free Faster without Breaking the Bank
To pay off your mortgage sooner, you need a plan right from the start. Here are some important steps in that plan.
- Be realistic about mortgage size. Don't talk yourself into paying more than you can comfortably afford, or you'll end up being "house poor".
- Reprioritize your budget. Analyze where all your money is going. Cut back on things that lose value immediately (like that big screen TV!) and invest in your mortgage instead.
- If you get a raise, increase your payments by the same percentage.
- If you get a bonus, make a lump sum payment.
- Make accelerated bi-weekly payments. This is a fairly painless way to make an extra payment every year.
- Put aside savings for annual lump sum payments. These can have a HUGE impact on total interest paid.
- Round up your payments. Take a number like $1,437.93 and round it up to $1,450. Even that tiny amount has a big impact over time.
Wednesday, 29 May 2013
Today's Bank of Canada Announcement
As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and, as promised, here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday May 29th, 2013, the Bank of Canada again did what we expected them to do… they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This of course is fabulous news but as always, I like to remind you to make the most of the low payments you still have as the rate will increase in the future. If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account or Retirement Savings Plan as your payments continue to remain low. Maybe you are thinking of saving for a special occasion or expect a large expenditure in the near future (car, college/university, cottage or investment property purchase), and would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision: "In the United States, the economic expansion is progressing at a modest pace, with continued strengthening in private demand partly offset by fiscal consolidation. Japan's economy is beginning to respond to significant policy stimulus. Europe, in contrast, remains in recession. Growth in China has continued to ease from very strong rates, weighing somewhat on global commodity prices. In Canada, recent economic indicators suggest that growth in the first quarter was stronger than the Bank projected in April. For the year as a whole, growth is expected to remain broadly in line with the Bank's forecast. Over the projection horizon, consumer spending is expected to grow at a moderate pace, business investment to grow solidly, and residential investment to decline further from historically high levels. Growth in total household credit is slowing and the Bank continues to expect that the household debt-to-income ratio will stabilize near current levels. Exports are projected to continue to recover, but to be restrained by subdued foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar." Based on this news and still the ongoing slack in the Canadian economy and the muted outlook for inflation, the Bank does not expect to increase their rate in the foreseeable future with any change most likely to occur possibly as late as late 2013 to early 2014! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates haven't changed at all since the last announcement, at around 2.89% to 3.09% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is July 17th, 2013 at which time I'll be in touch again. I wonder if I can ask a favour – rates are still so low right now and we are well into the Spring market and it is a great time for first time home buyers and those planning their University or college accommodation to start considering their options. Do you have a friend, family member or colleague that is looking at University College for their son and daughter and might want to chat about purchasing a property rather than renting with as little as 5% down payment? It is a perfect time to work with me to not only hold rates for up to four months while they go house hunting but also work on their action plan to make dreams of homeownership a reality! If you know of someone that is looking for advice on their mortgage options, with no obligation, would you mind passing my contact information on to them – this is very much appreciated. Yours truly, Kupina Mortgage Team | www.kmortgage.ca
Monday, 29 April 2013
Nominal vs. Effective Interest Rate: What's the Difference?
It's important to know what type of interest you're paying when you take out a mortgage. There are basically two types, but each of them is sometimes known by more than one name.
- Nominal Interest Rate. Also known as simple interest rate. Nominal interest is calculated on the original principal only. If you borrow $100,000 for one year at 7%, you end up paying back $107,000.
- Effective Interest Rate. Also known as compound interest. With effective interest, the interest rate is applied to the original principal AND all the accumulated interest. If you borrow $100,000 for one year at 7% and the interest is compounded semi-annually, you end up paying back $107,122.50. Therefore, the effective interest rate is actually 7.1225%. In Canada, this is known as the Annual Percentage Rate (APR) and it's the rate that Canadian mortgage lenders are required to quote.
Yes, You Can Achieve Debt Freedom!
Chances are, your mortgage payment is your single, biggest after-tax expense. Unfortunately, thanks to the way lenders calculate interest, most of your payments go to interest instead of principal. Which is why, if you ever actually pay off your mortgage, you end up paying two to three TIMES the value of your home. No wonder 70% of homeowners never live long enough to own their home free and clear! Historically, the fastest way to pay off your mortgage and reduce interest payments was to increase your income, reduce expenses and make extra lump sum payments on your mortgage. The problem is, most people cringe at the idea of sacrificing short-term pleasures for long-term treasures. But there IS a way to eliminate all your debts—credit card, car loan, even your mortgage—two to three times faster, thus saving you tens of thousands of dollars in interest, WITHOUT affecting your household budget! Imagine how great it would feel to be completely debt-free, giving you the cash flow and freedom to provide for your family, save for retirement and even go on vacation. With our new debt-elimination system, you can:
- *Save tens of thousands in interest payments
- *Pay off your mortgage in half the time (or less!)
- *Eliminate all your debts, including credit cards, car loans, etc.
- *See the impact of financial decisions in advance
- *Plan, maintain and track your monthly budget
- *Accelerate your progress to financial freedom!
Sunday, 7 April 2013
5 Proven Ways to Legally Reduce Your Taxes
If these tips are appropriate for you, you can save taxes, increase your savings and build financial security.
- Ask your employer to contribute some of your compensation directly to your RRSP. This means tax doesn't have to be withheld on the amount paid, so you get a larger RRSP contribution — plus your interest will compound faster.
- If you have a mortgage and substantial non-registered investments, consider liquidating some investments, use the funds to pay down your mortgage, then extract equity to purchase new investments. Borrowing money from your home to make investments makes your mortgage interest tax deductible.
- Start doing some work from home so you can deduct certain home expenses. If you regularly work at home or host client meetings, ask your employer to formalize the arrangement in writing.
- Since some investments are taxed at higher rates than others, make sure to put your highly-taxed investments—such as GICs and bonds—into RRSPs and Tax Free Savings Accounts. Stock dividends are taxed at a lower rate, so they should go in your non-registered account.
- If you're expecting a big tax refund this year, request a reduction in the taxes deducted from your pay. This means you get the refund you're expecting earlier.
Life After Bankruptcy: Yes, You Can Get a Mortgage!
Sometimes bad financial situations happen to good people and bankruptcy is the only way out. But it's not all doom and gloom! It's possible to put your credit back on track and qualify for a mortgage, even after bankruptcy. Here's how:
- Find the right lender. Unlike mainstream lenders, non-conforming lenders will usually provide financing after a bankruptcy, if you can demonstrate that you're now a good credit risk and have sufficient income.
- Wait a couple of years. Most lenders won't approve a mortgage until two years after bankruptcy.
- Have a good reason. If bankruptcy was due to factors beyond your control, you're more likely to get a mortgage. Reasons such as poor money management and excessive debt aren't looked at favorably.
- Save a down payment. Most lenders will consider a 10% down payment (your own funds, not borrowed or a gift), or even 5% in some instances. However, the higher your down payment, the lower your interest rate will be.
- Re-establish good credit. Get a copy of your credit report from Equifax or TransUnion, and work on building a recent record of on-time payments on major bank or credit cards. Missing a payment at this stage could lead lenders to decline you. By rebuilding your creditworthiness, you can raise your credit score, which will lower the rate you'll end up paying.
- Work to keep your rate low. Most lenders charge a higher rate for previous bankruptcies, and some charge extra fees. You can keep your rate as low as possible by waiting for two years after discharge, re-establishing good credit, raising your credit score, saving your own down payment, maintaining good debt servicing ratios, and demonstrating a long term history of job stability.
- Don't do it alone. As your mortgage professional, I can coach you on how to improve your credit score over time and help you source an affordable mortgage despite bruised credit. If you—or someone you know—would like a free, no obligation consultation, call me today!
Wednesday, 6 February 2013
Mortgage Rate Minder
February 6, 2013: This edition of the Mortgage Rate Minder has the latest, best rates for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the mortgage that suits your needs. Best of all — our service is free.* It's the selected lender that pays us and YOU get the best rate. Please note that rates shown are subject to change without notice. The rates shown are posted rates and the actual rate you receive may be different, depending upon your personal financial situation. Check with us for full details and to determine what rate will be available for you.*(O.A.C., E.&O.E.) Explore Mortgage Scenarios with Helpful Calculators at http://www.KupinaMortgage.com
Rates are subject to change without notice. *OAC E&OE Prime Rate is 3.00% Variable rate mortgage from as low as Prime - 0.35%
Current Mortgage Rates
| Term | Bank rates | Our Rates |
| 6 Month | 4.00% | 3.95% |
| 1 YEAR | 3.00% | 2.74% |
| 2 YEARS | 3.14% | 2.69% |
| 3 YEARS | 3.70% | 2.69% |
| 4 YEARS | 4.70% | 2.99% |
| 5 YEARS | 5.24% | 2.94% |
| 7 YEARS | 6.35% | 3.59% |
| 10 YEARS | 6.75% | 3.79% |
Monday, 7 January 2013
New Homebuyer Calculator & Mobile App
Canada Mortgage and Housing Corporation (CMHC) recently introduced two new tools to help Canadian homebuyers make informed and responsible home-buying decisions – including a calculator and mobile app. CMHC's new Debt Service Calculator allows homebuyers to evaluate their financial situation and understand how much they can comfortably afford to spend on a mortgage. The easy-to-use calculator allows users to quickly estimate their gross debt-service ratio (GDS) and total debt-service ratio (TDS) – both important measures in assessing their financial readiness for homeownership. The Debt Service Calculator can be accessed by visiting: www.cmhc-schl.gc.ca/en/co/
Does Breaking Your Mortgage Make Sense?
With mortgage rates still hovering at historic lows, chances are you've considered breaking your current mortgage and renewing now before rates begin to rise. Perhaps you want to free up cash for such things as renovations, travel or putting towards your children's education? Or maybe you want to pay down debt or pay your mortgage off faster? If you've thought about breaking your mortgage and taking advantage of these historically low rates, feel free to give me a call or send me an email to discuss your options. In some cases, the penalty can be quite substantial if you aren't very far into your mortgage term, but we can determine if breaking your mortgage now will benefit you long term. People often assume the penalty for breaking a mortgage amounts to three months' interest payments so, when they crunch the numbers, it doesn't seem so bad. In most cases, however, the penalty is the greater of three months' interest or the interest rate differential (IRD). The IRD is the difference between the interest rate on your mortgage contract and today's rate, which is the rate at which the lender can relend the money. And with rates so low these days, the IRD tends to be greater than three months' interest. Because this is a way for banks to recuperate any losses, for some people, breaking and renegotiating at a lower rate without careful planning can mean they come out no further ahead. Keep in mind, however, that penalties vary from lender to lender and there are different penalties for different types of mortgages. In addition, the size of your down payment and whether you opted for a "cash back" mortgage can influence penalties. While breaking a mortgage and paying penalties based on the IRD can result in a break-even proposition in the short term, if you look at the big picture, you'll see that the true savings are long term – as we know that rates will be higher in the years to come. Your current goal is to secure a long-term rate commitment before it's too late, and here lies the significant future savings. As always, if you have questions about breaking your mortgage to secure a lower rate, or general mortgage questions, I'm here to help! Kupina Mortgage Team | www.kupinamortgage.com
Saturday, 5 January 2013
Mortgage Rate Minder
January 5, 2012: This edition of the Mortgage Rate Minder has the latest, best rates for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the mortgage that suits your needs. Best of all — our service is free.* It's the selected lender that pays us and YOU get the best rate. Please note that rates shown are subject to change without notice. The rates shown are posted rates and the actual rate you receive may be different, depending upon your personal financial situation. Check with us for full details and to determine what rate will be available for you.*(O.A.C., E.&O.E.) Explore Mortgage Scenarios with Helpful Calculators at http://www.KupinaMortgage.com
Rates are subject to change without notice. *OAC E&OE Prime Rate is 3.00% Variable rate mortgage from as low as Prime - 0.30%
Current Mortgage Rates
| Term | Bank rates | Our Rates |
| 6 Month | 4.00% | 3.95% |
| 1 YEAR | 3.00% | 2.74% |
| 2 YEARS | 3.14% | 2.69% |
| 3 YEARS | 3.70% | 2.75% |
| 4 YEARS | 4.70% | 2.89% |
| 5 YEARS | 5.24% | 2.99% |
| 7 YEARS | 6.35% | 3.69% |
| 10 YEARS | 6.75% | 3.79% |
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