Insider mortgage secrets…..

Twenty-five or thirty years can sound like an impossibly long time to service a loan – and for many of us, it is. If you are looking to pay off your mortgage faster, here are some tried-and-true tactics to get you to financial freedom that much sooner!

1. Make a Double Mortgage Payment: A double payment once a year can shave over four years off the total life of the mortgage! Better yet, if your mortgage allows for double-up payments, another option is paying an extra $100 into your mortgage – per month. This can save you over $26,000 in interest on a 5.5% fixed-rate, 25-year amortized mortgage.
2. Increase Your Payment Frequency: Changing your mortgage from monthly to bi-weekly accelerated payments can shave over three years off your mortgage. At $2,000 a month, three years of no payments is worth $72,000 (not to mention the interest saved!).
3. Increase Your Payment: Did you know? A one-time 10% increase can shave four years off the mortgage. That’s $96,000 in savings! Imagine if you bumped the payment 10% every year from the get-go. You would be mortgage-free in 13 years—start to finish! Can’t do it? How about 5% every year? You would be mortgage-free in 18 years! You can also consider increasing the payment by the amount of your annual raise.
4. Lump Sum Payments: This is another option to become mortgage-free even faster! Even just one extra payment a year equivalent to one monthly payment will give you similar results as #2 above. Annual work bonuses or other extra-income is a great option for this.
5. Renegotiate When Rates Drop: Revisiting your mortgage is a good idea when rates drop. However, it is always best to get expert advice from a mortgage broker to ensure it makes sense for you. If so, the benefits can be huge! For instance, a 1% reduction on a $300,000 mortgage will save $250 a month—times five years, that’s $15,000.
6. Maintain a High Credit Rating: Even if you have already qualified for the mortgage you want, don’t let your credit rating slip. Pay your bills on time and keep balances low in relation to limits on credit cards, lines of credit, etc. Ideally, using 30% or less of your available credit will garner the highest results (assuming you pay the balances in full every month). Even if you’re filling your card to its credit limit max and paying it off in full each month, it will look like you are maxing out your credit limit and your credit score will drop accordingly.
7. Increase Your Mortgage: Increasing your mortgage for the purpose of debt consolidation can be helpful for paying off credit card debt, line of credits, car loan and so on for a better rate and a set payment plan.
8. Make an RRSP Contribution: By making an RRSP contribution, you can then use your income tax refund to pay down your mortgage!
9. Switch to a Variable Rate: Switching your mortgage to variable-rate while keeping your payments the same as if on fixed can help you pay your mortgage faster. Since variable rates are typically lower, you will be paying more to your principal loan versus the interest.
   • Caution: Variable rates are not for everyone. Always be sure to seek the help of a mortgage broker to find out if variable-rates are the best choice for you.
10. Take Your Mortgage With You: When you move, switch your old mortgage to the new property to avoid a penalty or higher rate on a new mortgage. This is called “porting”, however not all mortgages have this feature so be sure to ask! It is not widely known but could save you a ton of money.
11. Set Up Automatic Savings: Even setting aside $10 per paycheck can help! When your extra savings reaches the amount of one mortgage payment, apply it to the mortgage! This concept goes nicely with #4.
12. Unhook From The Money Drip: Stop paying with your fancy points credit or debit card. These make it way too easy to overspend. Go old school, go off the grid and pay cash. It works and can help you stay on track!
13. Don’t Buy on Layaway: You know, those don’t-pay-for-six-month “deals”, well a lot can change in six-months and you’ll still be on the hook. If you cannot afford it now, don’t buy it. Wait until you are financially able to make the investment.
14. Downsize Your House: Are you living in a 5-bedroom family home but your kids are grown up and moved out? Consider downsizing to a smaller house. It will save you money on your mortgage payments and maintenance fees in the long run!
15. Rent Out the Basement: Not ready to move? Consider converting spare rooms to rental and use the income to pay down debt.
16. Make Your Mortgage Tax-Deductible: If you are self-employed, own rental property or have investments, this is likely possible. Check with your Dominion Lending Centres mortgage broker to see if this option is right for you!
17. Prioritize Your Payments: Define your various debts by category. This can help you see where you spend your money and also help you pay off your debt faster.
18. Start With the Highest-Interest Rate: Pay off loans with the highest interest rates first, as these are the ones eating into your extra income!
19. Leave Tax-Deductible Until Last: Pay the non-tax deductible loans first and fastest and leave tax-deductible debt to the end.
20. Focus on Ugly Debt First: Debt such as credit card balances are the worst on your credit rating. Pay these off first.
21. Pay Off Bad Debt Next: Debt for items that depreciate in value, such as car or boat loans, should be the next on your priority list.
22. Clear Good Debt Last: Loans such as mortgages or investments for assets that should appreciate in value are the least harmful to your net worth and can be paid out last.
23. Buy a New Car – Outright! Finance it if you have to but don’t lease, unless you are self-employed in which case leasing makes more sense.
24. Use Your Secret Stash: If you have $20,000 in a bank account for a rainy-day or vacation and yet owe $20,000 on a line of credit, you need to reconsider. The bank account is paying you next to no interest (which is taxable income) and the line of credit rate is way higher (and not tax deductible). You know what to do. You can keep the line of credit open and on standby for a rainy day. Make it the secret line of credit that you have but never use.
25. Give your Banker More Money: No, really. Keep enough in your chequing account to meet the minimum requirement to waive your service charges. Some banks charge a fee for transactions and nothing, zero, zilch, zip if you keep $2,500 in the account. Let’s see, $10 x 12 is $120 a year to pay off debt. I’d have to earn 5% with the $2,500 in my savings account to come out ahead. No-brainer here. Oh yeah, if you need more than 25 transactions a month, see #12 above.

Let’s face it, your financial future will not get any brighter if you continue to run deficits forever. Unlike a bank or big company, you won’t get a bailout! Stop procrastinating and take charge of your own finances with the above tips!

If you are looking for expert advice about your mortgage and how to pay it down faster, contact a Dominion Lending Centres professional to discuss YOUR situation and options.

BORROWER BEWARE:

It is always important to take things with a grain of salt. This is especially important when it comes to too-good-to-be-true, ultra-low-rate mortgages. These “no frills” mortgages are often loaded with restrictions such as pre-payment limitations, fully-closed terms, stripped-out features or unusual penalties. If you’re not looking at what you’re giving up, you may regret it in the future. These hidden terms alone could prevent you from taking advantage of tips #1, 2, 3, 4, 5, 7, 8, 9, 10, 14, 16 and 22!

– written by DLC team

As your mortgage broker, I am always here to answer questions and help you get on the BEST path- Shelley

Are you looking for TIPS to Pay Your Mortgage Faster? This is a great video for you to watch.

As your expert mortgage broker, I am always here to answer questions and help you get on the BEST path- Shelley

-video created by DLC team

Spending more time at home than we ever have, you may find yourself looking around thinking, “gosh, I would love to give this house a facelift!”. Well…

Here are SIX important questions to ask when thinking of a big Home Renovation?

So you want to make a major home renovation. Congratulations! Now, you’ve got to find the right contractor for the job. While doing a thorough online search or asking family and friends is an important first step, once you find a potential contractor, it’s time to start treating the process like a job interview. Being prepared with the right questions protects you from future headaches, but also ensures that you’re happy with the end result.

Hiring a contractor for your big home reno? Ask these important questions to make sure you’re picking the right contractor.

1. What is your experience in home renovation?

This question can help you determine how long the contractor has been in the business, whether they’ve worked with similar challenges as those in your home and how they ensure that projects are completed on time. With this question, you get full insight into their methodology.

You can also find contractors in your area that might have positive Yelp reviews or other social media to see if others are happy with their work.

2. Do you have a contracting license?

Depending on where you live, there are different requirements for what type of license a contractor has to hold. Check the laws in your region to see what might apply, and ask potential contractors directly whether they hold those licenses.

3. Do you carry the appropriate insurance?

According to the Canadian Homeowner’s Association, hiring people without the proper insurance could put you at legal and financial risk should something happen in your home. Protect yourself (and the workers improving your home) by checking off this box in the beginning, and ensure they have both liability insurance and worker’s compensation.

4. Will we get a written contract?

This should be a given if you’re working with a contractor because if the answer is no, don’t even bother moving forward with the interview. The CHBA says contracts should cover the description of the work, the materials used and the price of the job. You should also take this as an opportunity to figure out your payment schedule, as the Better Business Bureau in the U.S. says that you should never pay the full price of the job upfront, and the specific timeline for completing your project.

Contractors should also always offer a warranty in writing that informs you of what is covered and for how long.

5. Can we get in touch with your past clients?

A contractor should be proud of their past work. Take this as an opportunity to figure out how contractors approach their work, whether they have effectively handled disputes and fact-check what contractors tell you about their working style.

6. Will you be responsible for building permits?

If there is a chance that your building requires permits, you want to make sure that your contractor is prepared in this area. Square One Insurance says you should try to be present for a contractor’s home inspection to ensure that you fully understand their feedback, and anticipate if any changes in your home need to happen.

– DLC media team

Once you set the foundation for what you want, and need, we can work together making  your dream home renovations come to life! –Shelley

Have you ever wondered, “what is a Rate Hold”?

Rates are going up, so let me take a few minutes to explain it to you, and what it means.

If you shopping for a home, or have worked with a mortgage professional in the past, you’ve most likely heard of rate holds before. If not, it is something that every potential homeowner should be aware of. This is especially true for the application process as it has some great benefits for active shoppers.

If you are not familiar with the term, a ‘rate hold’ refers to locking in a specific mortgage rate for a limited period of time. This is offered through most lenders, assuming you are a potential client looking to purchase a home and need a mortgage. They are not eligible for individuals that are refinancing their mortgage, or looking to transfer it to another lender.

If you qualify for a rate hold, there are a few things you should know – from restrictions to benefits! The first and most important is that rate holds are typically only offered for a period of 90-120 days. So, once you have created your mortgage application with a broker and submitted it at the interest rate that best suits you, that rate will be protected for 90-120 days while you shop.

A rate hold is not a commitment. It does not force you to work with that lender, or the mortgage broker who submitted it. It also does not affect your future chances of receiving approval down the road. Instead, it simply guarantees that rate for you, if you find a home you want to purchase and sign the mortgage agreement before the rate hold is up.

This can be truly beneficial in volatile markets or those with high competition. If you submit your application to a lender for a fixed rate of 2.49% on a five year term, but while you are searching for your perfect home that rate moves up to 2.99%, the rate hold will protect you and allow you to still sign at 2.49%. This can mean huge savings!

For instance, if you are looking for a standard $500,000 mortgage (25 years amortization, fixed-rate, 5-year term), your monthly payments would be $2,237.35 at 2.49% interest. This would jump up to $2,363.67 per month at 2.99 percent. This is a difference of $126.32 per month or $1,515.84 annually; which can really add up on a 25-year mortgage!

Another benefit is that, if the rates go down, it does not stop you from taking advantage of the lower offer. Instead, it protects you from rate increases after you’ve determined your budget and are in the process of purchasing a home.

It is also important to note that, once the rate hold expires after 90-120 days, there is nothing stopping you from submitting another rate hold. It will just be subject to the interest rates as they stand on the day of submission.

Reaching out to a mortgage professional can help you better understand the current rates and benefits of a rate hold. In addition, they can help you find the best option to suit your needs thanks to their connections with hundreds of lenders!

-DLC media team

Why wait? Contact me anytime and we can get a rate hold for you –Shelley

Hello,

for those of you who don’t know me, my name is Shelley. I could talk about being a certified, licensed, award winning mortgage broker for over 25 years, but you can read all that fun stuff in my bio. Instead, I would love to use this blog for you to get to know me a bit more. I am a proud mama of two grown kids and grandma to the world’s cutest grandbabies (I might be a bit bias he he). I have a family of Bengal cats (a mom, dad, son and daughter) who drive me nuts but are also the best co-workers keeping me company in the office while I work. My husband and I’s favorite getaway is Sproat Lake where we enjoy boating, water sports, nature and most of all the beautiful sunshine.

Why do I share all this with you, you might ask!? Well, I want you to know, I am a real person just like you. I want my clients to know I see the humanity in each deal I do. I take the time to understand what people really need, then I create personalized plans because I genuinely care about what is best for my clients long-term. I am so proud to say that my success truly comes from the strong connections I build with people.

I am going to start blogging more, making an effort to post every Friday. I am hoping blogging will present an opportunity for me to not only connect with you more but also allows me to share valuable information that can help answer your mortgage related questions; and ultimately, SAVE you MONEY.

Shelley