11 Jul

Financial Advice that Never Gets Old.

General

Posted by: Jennifer Koop

Financial Advice that Never Gets Old.

It’s difficult to find timeless advice in the ever-changing world of personal finance but these five are about as close as you can get.

1. Start small and start early with investing
Only around 5% of Canadians under 25 have a TFSA, which means 95% have already missed out on 7 years of compounded returns. Starting small could be as little as $100 month… and starting early means now! Invest what you can and don’t think a $100 monthly will never amount to anything.

Investing $100 month at 5% for 47 years (age 18 to 65) will give you $68,754 more than someone who did the same starting from age 25. Time really is money when it comes to compounded returns, so get started as soon as possible.

2. Make more or spend less?
Our advice is to do both, but there are limits on how much income you can generate and cutting back on expenses has a bigger impact on your bottom line. If you’re lucky, you may find some expenses you could easily do without, like that lightly used gym membership or seldom watched 200-channel cable package.

A part-time job or side hustle isn’t a bad idea, but you will spend more time working and less time enjoying life. Don’t forget that any extra income is fully taxable — you might need to earn $10 in order to get the same result as a $7 spending cut.

3. Re-evaluate your wants and needs.
A 1200 sq ft bungalow was the standard for most families in the early 1970’s. These days, houses are now over 2000 square feet on average and come with plenty of high-end finishes. Lifestyle creep is not limited to our housing needs and now influences what we drive, how often we eat out, and where we go for vacation. Being able to satisfy your wants later in life will only come from making smart spending decisions on your needs earlier in life and freeing up the cash to start saving and investing.

4. Understand credit and debt.
131 months! That’s how long it takes to pay off a $1000 credit balance paying the minimum amount — and it will cost you almost $1000 more in interest charges! Many people carry a credit card balance and are blissfully unaware of just how much it is costing them each month. Car loans are another area where the financing costs add up to a lot more than most people realize.

The key is to be knowledgeable about your debt. Track what you owe and how much that debt is costing you as well as any alternatives that may lower that cost. For example, refinancing your mortgage or drawing on home equity to pay off higher interest loans or credit cards.

5. Get financially literate.
Managing your money has become more difficult as we have a lot more spending, saving, and investing options, but we also have access to a lot more information and tools to help us. For example, diving into the real impact of those investment fees on your mutual funds (it’s a lot!) can easily be investigated online in just a few minutes.

For powerful personal finance education and training with immediate results, check out the complimentary livestreams each week from Enriched Academy. View the schedule and sign up for upcoming sessions on their events page.

Published by the DLC Marketing Team

5 Jul

Choosing Your Mortgage Broker

General

Posted by: Jennifer Koop

Choosing Your Mortgage Broker.

There is a little doubt that the biggest purchase of your life will be your home. When embarking on your homeownership journey, having the right support and information will make all the difference. Fortunately, a mortgage broker can help!

With access to more than 230 lending institutions including big banks, credit unions and trust companies, mortgage brokers are experts in mortgages. These connections allow them familiarity with a vast array of available mortgage products, and also ensures that the advice they offer is unbiased. Unlike banks focused on signing you for profit reasons, a mortgage broker is a third-party service who gets paid no matter which bank they sign you with. This means they can provide the best rate AND unbiased advice because they are focused on helping you achieve your dream.

It is estimated there are nearly 20,000 mortgage professionals in Canada. With so many choices, it is important to find a mortgage broker who works best FOR you.

With so much information at your fingertips on any given broker, it is easier to help narrow down the search. Especially with tools like the Dominion Lending Centres exclusive My Mortgage Toolbox app. Available on Google Play and the iStore, My Mortgage Toolbox makes it easy for potential homeowners to find a mortgage broker nearest them!

“The idea behind My Mortgage Toolbox was to make it simple for Canadians to manage the mortgage process by putting all the information they need into the palm of their hand,” noted Gary Mauris, Founder and CEO of Dominion Lending Centres.

Some features available through this application include a variety of calculators to help clients determine:

  1. What they can afford
  2. The minimum down payment required
  3. Closing cost estimates
  4. Total monthly ownership costs

Click here to download the app today!

While online tools and apps can give you pretty good insight into a potential broker, there are a few other things you might also want to consider to help make that decision a little easier.

While it is never a bad idea to go with an established professional with an abundance of clients and years of experience, you should also open to considering newer, hungrier brokers who are striving to make their mark in the mortgage space. At a busy firm, it is easy for you to feel like a small fish in a big pond, especially with a smaller portfolio, whereas a smaller brokerage can likely provide you more attention.

While brokers spend a lot of their time neck-deep in mortgages and tend to use industry jargon, a professional broker will understand if you are a first time homebuyer and will do their best to explain the terms and the process to you. Understanding is vital in your homeownership journey  so make sure to seek out a broker who is going to keep it simple for you and be honest, allowing you to understand exactly what you’re getting in your mortgage.

Ultimately, it comes down to the mortgage product but don’t be blinded by interest rates. It is important that your broker explains everything to you from term conditions to penalties, as well as why you qualified for the rate you need. It is also important to use caution if a broker is selling you on a rate and making promises to pay for fee; this is a red flag. If they say they’re going to pay for everything, they’re desperate for anything.

Of course, the rate matters, but the characteristics of your mortgage matter more and could end up costing you in the long run. You want a broker who’s going to listen to you and ask you about your needs and future goals. What are your plans five or ten years from now? Why are they so important to you as an individual? When looking at any mortgage product, consider that nearly 70 percent of mortgages are broken within three years. Even if you’re sure of today, life happens and tomorrow could be different. Therefore, you must consider the penalties for ducking out of your mortgage earlier and you should know if it is portable.

The best mortgage brokers in the business will make sure all of your bases are covered, and you’re fully aware of what you’re signing onto. The right broker will make the process easier for you, whether it’s buying your first home, shopping for a better rate, or even jumping into investment properties. No matter what stage of life you are in, we’ve got a mortgage product – and an agent, Jennifer Koop – for that!

 

Published by DLC Marketing Team