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
Friday, 31 May 2013
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!
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