6 Sep

Find Your Perfect Home Type

General

Posted by: Jennifer Koop

Find Your Perfect Home Type.

When it comes to finding your perfect home, there are so many more options for potential homeowners! From a single-family dwelling to a townhouse to a modular home, the choices are seemingly endless. But, before you start widening your search, let’s take a look at what makes these home types different – and which one is perfect for you!

Single-Family Detached: These homes provide more privacy with less noise from neighbours. They also tend to be larger dwellings (complete with a yard!) which gives you the space and freedom to really make it your own. Due to the popularity of these homes, there is often high demand in them which can drive up selling prices.

Single-Family, Semi-Detached: These homes are suitable for a single family and are typically attached to another house on one side making them more affordable to both buy and maintain. With this affordability does come somewhat less privacy and protection from noise.

Duplex: These are great options for individuals looking to reduce home purchase and carrying costs – live in one unit, rent the second! This type of home also provides unique flexibility for older families, giving you the option to move adult children or aging parents into the second unit.

Townhouse or Row House: These typically have private yards but, in some cases, it may be freehold or condo-style with shared ownership rights and responsibilities. Typically more affordable to buy and maintain, however, they tend to have less privacy and noise protection as well as coming with monthly maintenance or strata fees.

Condominium: These are low- or high-rise buildings containing multiple apartment units. These units are individually owned, with shared ownership rights and responsibilities over the building and the common area. Condos are excellent starter homes for single adults, or couples, as they are affordable and require minimal maintenance. Some buildings even have shared amenities, such as a fitness center or swimming pool or party room.

Modular or Mobile Home: These types of homes are highly affordable and extremely flexible; if you relocate, you can sell the mobile home with the property or keep the home and relocate it! As these are less common and somewhat newer home types, there is less resale demand than other housing types and they are much smaller than a detached or even a condominium. If renting land in a mobile home community, there are also those costs to consider.

Finding the right home to suit your needs means considering your lifestyle and budget now, as well as where you’ll be a few years down the road. Want more information or need help deciding the best option for you? Contact Jennifer Koop, your DLC mortgage expert to learn more about your options when it comes to buying and owning a home.

Published by DLC Marketing Team

For all your mortgage needs contact us today, 705-349-0502.

16 Aug

The Two Most Costly Words in Personal Finance

General

Posted by: Jennifer Koop

The Two Most Costly Words in Personal Finance.

Most of us have experienced how YOLO (You Only Live Once) is the one word that often leads to a pile of unpaid credit card bills and more than a few regrets down the road. However, YOLO has a contender for the world’s most expensive word, and that word is procrastination.

Enriched Academy are huge believers in education, fact finding, and analysis before making any important financial decisions, but at some point, you have to act. Whether it’s opening an online brokerage account, meeting with a financial coach, or simply inputting your monthly household expenditures into a spreadsheet, you need to get moving.

There are lots of reasons why we kick financial matters down the road — not enough time? lack of knowledge? low motivation? Regardless of the reason, if you need a little inspiration, here are five examples that clearly demonstrate the cost of procrastination when it comes to managing your money.

Attacking your debt problem

If you have credit card debt, car loans, or a line of credit that you are in no hurry to eliminate, you need to look at how much it is costing you. Credit card debt has always topped the list and even the so-called “low interest” credit cards are around 10% (most charge double that rate). Paying the minimum 3% will get you nowhere fast — at the usual credit card rate of 20%, a $1000 balance will take 11 years to eliminate and cost you another $1000 in interest.

Starting your retirement planning

Too little, too late is the story for many Canadians when it comes to funding their retirement. CPP and OAS aren’t enough to save you. Did you know you have to pay into CPP for 39 years to claim the maximum amount and that the average monthly payment is currently $811? If you don’t know where to start, open a TFSA and focus on putting in as much as you can each year. Your annual contribution limit is $6500 but it carries over from year to year and you may find you have a lot of unused contribution room. Make sure to invest your TFSA funds and don’t let it sit in cash.

Analyzing expenses and budgeting

Next month is not the time to start figuring out where your money goes every month and where you could/should/need to cut back on spending. The time to get started is today, and it has never been easier with hundreds of online applications and spreadsheet software, or you can go old school with pen, paper and calculator.

Getting started with investing

Getting a late start makes it very difficult to catch up because you seriously reduce the effect of compound investment returns. Investing $500 monthly at 5% starting at age 25 versus age 35 will cost you an extra $60K, but it will add over $325K to your retirement fund by age 65. You don’t need to be an investing genius to get going, there are lots of low-cost, low-maintenance and relatively simple ways to manage your own investing these days.

Creating an emergency cash reserve and a will

If the pandemic taught us anything, it was to prepare for the worst. Your income could unexpectedly and very easily disappear for a number of reasons, so you need to have enough cash on hand to tide you over for a few months. As for a will, they are lots of options (including online) these days and there isn’t any valid excuse for not having one, especially compared to the mess it leaves behind for your loved ones if you die without one.

A YOLO attitude and procrastination sound harmless enough, but they can seriously derail your finances. Make sure to keep them at bay or your financial goals will continue to be elusive.

Published by DLC Marketing Team

Contact Jennifer Koop, your Cottage Country Mortgage Agent, today for all your mortgage needs, 705-349-0502

15 Aug

Second Mortgages: What You Need to Know

General

Posted by: Jennifer Koop

Second Mortgages: What You Need to Know.

One of the biggest benefits to purchasing your own home is the ability to build equity in your property. This equity can come in handy down the line for refinancing, renovations, or taking out additional loans – such as a second mortgage.

What is a second mortgage?

First things first, a second mortgage refers to an additional or secondary loan taken out on a property for which you already have a mortgage. This is not the same as purchasing a second home or property and taking out a separate mortgage for that. A second mortgage is a very different product from a traditional mortgage as you are using your existing home equity to qualify for the loan and put up in case of default. Similar to a traditional mortgage, a second mortgage will also come with its own interest rate, monthly payments, set terms, closing costs and more.

Second mortgages versus refinancing

As both refinancing your existing mortgage and taking out a second mortgage can take advantage of existing home equity, it is a good idea to look at the differences between them. Firstly, a refinance is typically only done when you’re at the end of your current mortgage term so as to avoid any penalties with refinancing the mortgage.

The purpose of refinancing is often to take advantage of a lower interest rate, change your mortgage terms or, in some cases, borrow against your home equity.

When you get a second mortgage, you are able to borrow a lump sum against the equity in your current home and can use that money for whatever purpose you see fit. You can even choose to borrow in installments through a credit line and refinance your second mortgage in the future.

What are the advantages of a second mortgage?

There are several advantages when it comes to taking out a second mortgage, including:

  • The ability to access a large loan sum (in some cases, up to 90% of your home equity) which is more than you can typically borrow on other traditional loans.
  • Better interest rate than a credit card as they are a ‘secured’ form of debt.
  • You can use the money however you see fit without any caveats.

What are the disadvantages of a second mortgage?

As always, when it comes to taking out an additional loan, there are a few things to consider:

  • Interest rates tend to be higher on a second mortgage than refinancing your mortgage.
  • Additional financial pressure from carrying a second loan and another set of monthly bills.

Before looking into any additional loans, such as a secondary mortgage (or even refinancing), be sure to speak to Jennifer Koop, your DLC Mortgage Expert! Regardless of why you are considering a second mortgage, it is a good idea to get a review of your current financial situation and determine if this is the best solution before proceeding.

Contact us today for all your mortgage needs, 705-349-0202

Published by DLC Marketing Team

8 Aug

After You Buy – Closing Tips

General

Posted by: Jennifer Koop

After You Buy – Closing Tips.

Now that you have finished signing your mortgage paperwork and getting the keys to your first home, there are a few things to keep in mind after you buy to protect your investment and ensure future financial success!

  1. Maintaining your home and protecting your investment: Becoming a homeowner is a major responsibility. It’s up to you to take care of your home and protect what is likely your biggest investment.
  2. Make your mortgage payments on time: There are many options when it comes to mortgage payment frequency. Whichever schedule you choose, always make your payments on time. Late or missed payments may result in charges or penalties, and they can negatively affect your credit rating. If you’re having trouble making payments, please contact your mortgage broker as soon as possible.
  3. Plan for the costs of operating a home: You will have several ongoing costs besides your mortgage, property taxes and insurance. Maintenance and repair costs are at the top of the list, along with expenses for security monitoring, snow removal and gardening. If you own a condominium, some of these costs may be included in your monthly fees.
  4. Live within your budget: Prepare a monthly budget and stick to it. Take a few minutes every month to check your spending and see if you’re meeting your financial goals. If you spend more than you earn, find new ways to earn more or spend less.
  5. Save for emergencies: Your home will need some major repairs as it ages. Set aside an emergency fund of about 5% of your income every year so you’ll be prepared to deal with unexpected expenses.

If you have any additional questions about closing, or your mortgage upkeep, please don’t hesitate to reach out to Jennifer Koop, your DLC Mortgage expert today! 705-349-0502

Published by DLC Marketing Team

2 Aug

In Search of Financial Wellness?

General

Posted by: Jennifer Koop

In Search of Financial Wellness?

Financial wellness is fast becoming the latest buzzword as soaring inflation and interest rates pile the pressure on Canadians. There is a strong connection between mental health and financial health, and financial stress is taking a heavy toll. So, what exactly does it mean to be “financially well”?

Financial wellness is described as a state of well-being where an individual or a household has achieved financial stability and is able to meet their current and future financial obligations without undue stress. Financial wellness is not about being rich, having a certain amount of net worth, nor achieving a specific financial goal. Rather, it is about having a sense of security and confidence in your financial capability and being able to manage financial issues, challenges and opportunities as they arise over time.

Financial wellbeing is a function of many different factors. Income is obviously a critical element, but it also depends heavily on how well we are able to manage our money. These tasks include budgeting, managing debt, and investing and planning our retirement. The degree to which we are able to handle these tasks successfully depends on our level of personal financial literacy and our ability to make informed decisions, solve financial problems, and manage financial risk.

The heightened stress and anxiety cause by poor financial wellness has significant effects on many aspects of our life including poor job performance and relationship issues.

How do you measure financial wellness?

Financial wellness can be measured in a number of ways, but it is often a feeling rather than some sort of tangible number. A financial health assessment is a comprehensive evaluation that involves reviewing income, expenses, debt, savings, investments, insurance coverage, and other financial assets and liabilities. It identifies areas of strength and weakness and provide insights into how to improve overall financial well-being.

A financial stress tests involve evaluating an individual’s or household’s ability to withstand financial shocks or unexpected events, such as a job loss or medical emergency. Financial stress tests can help identify potential vulnerabilities in one’s financial situation and provide insights into how to build financial resilience.

Financial behavior analysis involves examining an individual’s or household’s financial behavior and decision-making processes. It can help identify patterns of behavior that may be contributing to financial stress or instability, such as overspending or not saving enough.

Overall, measuring financial wellness is a complex process that requires taking into account multiple factors and indicators. Different methods may be appropriate for different individuals or households, depending on their specific financial circumstances and goals.

How can I improve my financial wellness?

There are plenty of options for improving your financial wellness and most of them revolve around bettering your financial literacy skills to effectively tackle expenses, use credit wisely, manage debt, save money, and build long-term wealth and security through investing. Working with a financial coach or financial planner can also provide the knowledge and support needed to achieve your financial goals.

In addition to individual actions, there are also broader solutions that can support financial wellness at the societal level. These may include policies that promote income equality, affordable housing, and access to financial services, as well as financial education in schools and employee financial wellness programs.

2023 is shaping up to be another tough year financially for Canadians and financial wellness will continue to be elusive, especially if your financial literacy is lacking. The good news is there are a lot of resources available and many of them are free or low-cost. The largest hurdle for most of us is willpower and maintaining our motivation — achieving financial wellness is not a sprint. It can be a time-consuming, slow process and you may not see the results from your efforts until many months or many years down the road!

Published by DLC Marketing Team

Contact us today for all your mortgage needs 705-349-0502

6 Jul

10 Questions to Ask Your Home Inspector

General

Posted by: Jennifer Koop

10 Questions to Ask Your Home Inspector.

While home inspections might not be the most exciting part of your home buying journey, they are extremely important and can save you money and a major headache in the long run.

In a competitive housing market, there can sometimes be pressure to make an offer right away without conditions. However, no matter how competitive a market may be, you should never skip out on things designed for buyer protection – such as a home inspection.

You may have a good eye for décor and love the layout of your potential new home, but what is under the surface is typically where headaches can lie. We have all heard the expression “don’t judge a book by its cover” so why would you make the most important purchase in your life without checking it out?

Below are a few key questions you can ask your home inspector to ensure that you are getting a complete and thorough inspection:

  1. Can I see your licence/professional credentials and proof of insurance?
  2. How many years of experience do you have as a home inspector?
    • Note: Make sure they’re talking specifically about home inspection and not just how much experience they have in a single trade.
  3. How many inspections have you personally completed?
  4. What qualifications and training do you have? Are you a member of a professional organization? What’s your background – construction, engineering, plumbing, etc?
  5. Can I see some references?
    • Note: Don’t just ask for references, be sure to follow up with them. Ask the clients how they felt about the home inspection, did any issues crop up down the line that they were not made aware of, etc.
  6. What kind of report do you provide? Do you take photos of the house and specific problem areas (if any) and include them in your report?
  7. What kind of tools do you use during your inspection?
  8. Can you give me an idea of what kind of repairs the house may need?
    • Note: Be hesitant if they offer to fix the issue themselves or are willing to recommend someone cheap. Home renovations and repairs are one area you should never skimp on.
  9. When do you typically do the inspections?
    • Note: Ideally you want a home inspector operating full-time and can view the house during the day to inspect all areas, especially the roof.
  10. How long do your inspections usually take?

While hiring a home inspector may seem daunting, it will be the best few hundred dollars you ever spend. There is no price on peace of mind!

Published by DLC Marketing Team

Contact us today for all your mortgage needs, 705-349-0502

28 Jun

Don’t Be House Poor

General

Posted by: Jennifer Koop

Don’t Be House Poor.

Having the biggest and best home on the block sounds great – but not if it is at the expense of your life and monthly finances! Be smart about your budget and avoid buying a home at the very top of your pre-approval value, which might lead to cash flow issues and being “house poor” down the line.

Home Expenses

When it comes to your home, it is more than just your purchase price and mortgage cost. While you might be able to afford to buy a $800,000 home, can you also afford the maintenance, property taxes, utilities and more?

When it comes to your home expenses and overall monthly budget, the goal is that the costs to maintain your home do not exceed 35% of your total monthly income.

Monthly Budget

To help you keep track of your finances, consider breaking up your monthly budget into the following categories:

  • Housing – mortgage payments, property taxes, utilities, etc.
  • Transit – car payments or transit passes, gas, maintenance, etc.
  • Debt – payments to credit cards, lines of credit, etc.
  • Savings – your long-term savings for retirement, etc.
  • Life – food, vacations, fun, medical, childcare, etc.

From there, you would want to look at how much you spend on each category. The below is a good rule of thumb:

  • Housing – 35% of your monthly income
  • Transit – 15% of your monthly income.
  • Debt – 15% of your monthly income
  • Savings – 10% of your monthly income
  • Life – 25% of your monthly income

By spending too much on housing, you are forced to sacrifice in other areas of spending such as your life or savings, but it is better to be life RICH than house POOR.

If you’re not sure what you should budget for your new home, or have questions about making your home costs more affordable (such as changing your mortgage payments), please don’t hesitate to reach out to Jennifer Koop, your Dominion Lending Centres expert today!

Published by DLC Marketing Team

For all your mortgage needs contact us today, 705-349-0502.

27 Jun

Self-Employed and Seeking a Mortgage

General

Posted by: Jennifer Koop

Self-Employed and Seeking a Mortgage.

Approximately 20% of Canadians are self-employed, making this an important segment in the mortgage and financing space. When it comes to self-employed individuals seeking a mortgage, there are some key things to note as this process can differ from the standard mortgage.

Qualifying for a Mortgage

In order to obtain a mortgage as a self-employed individual, most lenders require personal tax Notices of Assessment and respective T1 generals be included with the mortgage application for the previous two years. Typically, individuals who can provide this proof of income – and with acceptable income levels – have little issue obtaining a mortgage product and rates available to the traditional borrower.

Self-Employed Categories

  1. For those self-employed individuals who cannot provide the Revenue Canada documents, you will be required to put down 20% and may have higher interest rates.
  2. If you can provide the tax documents and don’t have enough stated income, due to write-offs, then you have to do a minimum of 10% down with standard interest rates.
    1. If you are able to put down less than 20% down payment when relying on stated income, the default insurance premiums are higher.
  3. If you can provide the tax documents, and you have high enough income, then there are no restrictions.

Documentation Requirements

For those individuals who are self-employed, you must provide the following, in addition to your standard documentation:

  • For incorporated businesses – two years of accountant prepared financial statements (Income Statement and Balance Sheet)
  • Two most recent years of Personal NOAs (Notice of Assessments) and tax returns
  • Potentially 6-12 months of business bank statements
  • Confirmation that HST/Source Deductions are current

Calculating Income

When it comes to calculating income for a self-employed application, lenders will either take an average of two years’ income or your most recent annual income if it’s lower.

If you’re self-employed and looking to qualify for a mortgage, or simply have, reach out to Jennifer Koop, your Dominion Lending Centres mortgage professional today! We can work with you to ensure you have the necessary documentation, talk about your options and obtain a pre-approval to help you understand how much you qualify for.

Published by DLC Marketing Team

Contact us today for all your mortgage needs, 705-349-0502.

9 Jun

What You Should Know About Mortgage Amortization

General

Posted by: Jennifer Koop

What You Should Know About Mortgage Amortization.

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free as well as how much interest you pay over the lifetime of your mortgage (longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments).

Let’s start by looking at the mortgage industry benchmark amortization period. This is typically a 25-year period and is the standard that is used by majority of lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators.

While this is the standard, it is not the only option when it comes to your mortgage amortization. In fact, mortgage amortizations can be as short as 5-years and as long as 35-years!

As mentioned,  opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time-frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

When it comes to choosing a longer amortization period, there are definitely still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period of time, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Your mortgage professional will be able to help you choose the amortization that best suits your unique requirements and ensures you have adequate cash flow. However, it is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You are able to shorten or lengthen your amortization, as well as consider making extra payments on your mortgage (if you set up pre-payment options), at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5 or 10 years depending on your mortgage product). During renewal is a great time to review your amortization and payment schedules or make changes if they are no longer working for you.

If you have any questions or are looking to get started on purchasing a home, don’t hesitate to reach out to Jennifer Koop, your DLC mortgage professional for expert advice!

Contact us today 705-349-0502

Published by the DLC Marketing Team

5 Jun

How to Pay Off Your Mortgage Faster

General

Posted by: Jennifer Koop

How to Pay Off Your Mortgage Faster.

When it comes to homeownership, many of us dream of the day we will be mortgage-free. While most mortgages operate on a 25-year amortization schedule, there are some ways you can pay off your mortgage quicker!

1. Review Your Payment Schedule: Taking a look at your payment schedule can be an easy way to start paying down your mortgage faster, such as moving to an accelerated bi-weekly payment schedule. While this will lead to slightly higher monthly payments, the overall result is approximately one extra payment on your mortgage per calendar year. This can reduce the total amortization by multiple years, which is an effective way to whittle down your amortization faster.

2. Increase Your Mortgage Payments*: This is another fairly simple change you can execute today to start having more of an impact on your mortgage. Most lenders offer some sort of pre-payment privledge that allows you to increase your payment amount without penalty. This payment increase allowance can range from 10% to 20% payment increase from the original payment amount. If you earned a raise at work, or have come into some money, consider putting those funds right into your mortgage to help reduce your mortgage balance without you feeling like you are having to change your spending habits.

3. Make Extra Payments*: For those of you who have pre-payment privileges on your mortgage, this is a great option for paying it down faster. The extra payment option allows you to do an annual lump-sum payment of 15-20% of the original loan amount to help clear out some of your loan! Some mortgages will allow you to increase your payment by this pre-payment privilege percentage amount as well. This is another great way to utilize any extra money you may have earned, such as from a bonus at work or an inheritance.

4. Negotiate a Better Rate: Depending on whether you have a variable or a fixed mortgage, you may want to consider looking into getting a better rate to reduce your overall mortgage payments and money to interest. This is ideally done when your mortgage term is up for renewal and with rates starting to come back down, it could be a great opportunity to adjust your mortgage and save! This may be done with your existing lender OR moving to a new lender who is offering a lower rate (known as a switch and transfer).

5. Refinance to a Shorter Amortization Period: Lastly, consider the term of your mortgage. If you’re mortgage is coming up for renewal, this is a great time to look at refinancing to a shorter amortization period. While this will lead to higher monthly payments, you will be paying less interest over the life of the loan. Knowing what you can afford and how quickly you want to be mortgage-free can help you determine the best new amortization schedule.

*These options are only available for some mortgage products. Check your mortgage package or reach out to me to ensure these options are available to you and avoid any potential penalties.

If you’re looking to pay your mortgage off quicker, don’t hesitate to reach out Jennifer Koop, your Dominion Lending Centres mortgage expert today! She can help review the above options and assist in choosing the most effective course of action for your situation.

Contact us today 705-349-0502

Published by DLC Marketing Team