Mortgage Types 101.

Get to know the important basics before you choose your mortgage.

You have to be sure you select what is most important to you – lower rates or flexibility. Before you choose a mortgage, take some time to study mortgage types:

Closed Mortgage: If you want consistency with respect to rates and the length of your mortgage agreement, a closed mortgage is best for you. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

• Predictability and consistency with respect to payment amount
• Often comes with lower interest rates
• Limited flexibility with paying down the mortgage faster
• Cannot change interest rate during the term of mortgage

Convertible Mortgage: Want the best of both worlds? Then consider a convertible mortgage. Convertible mortgages are flexible yet offer minimal risk. Often with a lower interest rate than an open mortgage, convertible mortgages provide the opportunity to switch to a longer-term closed mortgage without penalty.

• Provides an opportunity to take advantage of lower interest rates and switch to a closed rate without penalty
• Offers lower interest rates than an open mortgage

Open Mortgage: If you are looking for flexibility with regard to paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sump payments or pay off your mortgage before the term expires; however, this flexibility comes often with a higher interest rate – which can result in higher monthly payments.

• Maximum flexibility; no penalty for making lump sum payments or paying off your entire mortgage before the term expires
• Higher interest rate
• Best for those looking to pay off their mortgage as soon as possible

Still not sure which type of mortgage is best for you? Contact a DLC Mortgage Expert today!

Published by DLC Marketing Team

Fall Market Update.

As you may have heard, The Bank of Canada opted to maintain its policy rate at 5% as of September. The recent rate hikes over the spring and summer have slowed the housing and mortgage markets as potential buyers were unsurprisingly spooked by the rise in mortgage rates. More recently, fixed-rate loans have become more expensive because of the rise in longer-term interest rates. As a result, housing affordability became a bigger hurdle and led to a slight decrease in home prices by 6% in major markets over the summer.

With The Bank of Canada currently maintaining the 5% policy rate, many hope this will be the peak in overnight rate changes. If so, homeowners and potential buyers will be granted some breathing room. We will find out more with their upcoming announcement on October 25th.

As we turn the corner into Fall and start looking ahead to the coming year, analysts are forecasting stronger housing markets. The expectation is that The Bank of Canada will gradually cut interest rates by mid-year, allowing potential buyers to better navigate their affordability.

As the supply shortage continues, new listings are likely to rise and provide much-need inventory. As we move into 2024 and start to see interest rates decrease, motivated sellers will move off the sidelines and housing demand is expected to be resilient.

For anyone who is thinking about purchasing this season, it is important to get pre-approved to guarantee your interest rate for 90-120 days while you shop the market. This way, you will avoid being impacted by potential rate changes and can properly estimate your budget for mortgage costs. Plus, pre-approval will indicate to the seller that you will not have issues obtaining financing (assuming nothing changes between now and the purchase with your job, savings, etc.), which is key during the current economic landscape.

To help you make the best decision possible, download the My Mortgage Toolbox app to determine what you can afford, and what your mortgage would look like at various interest rate levels.

You can also reach out to a DLC Mortgage Expert today for unbiased advice if you have any concerns, questions or just want to get started on your pre-approval!

Published by DLC Marketing Team

What do Your Teenagers Need to Know about Money?.

As adults, we all know the critical importance of managing money wisely and the impact our financial situation has on our overall well-being. As parents we do our best, but there are plenty of life lessons we need to teach our kids, and personal finance doesn’t always top the list. We may also not be the best person for the job since around 50% of adult Canadians live paycheque-to-paycheque! So how do we choose which financial lessons, habits, and tactics to teach our children, especially if our own money management skills may be lacking?

Wants vs needs & cost vs value

Tweens and teens need to differentiate between needs and wants and how to prioritize what they spend their money on. Value and cost are two more important concepts they need to understand. A top-of-the-line iPhone or a carbon fiber mountain bike will really impress their teenage friends, but a cheaper version may perform very similarly and provide a lot more value, especially given the limited amount of funds they have. Kids are bombarded by marketing messages, and they need to learn how to avoid hype and be objective, so they can make smart financial decisions. There is a reason plenty of rich folks (even billionaires like Warren Buffett) drive basic cars – it’s all they really need.   If your teen or tween wants the latest and greatest must-have item, challenge them to explain the value beyond being new, trendy, or fashionable. When they want to buy something, encourage them to research the product, read reviews, and compare prices to make informed decisions.

Introduce basic investing concepts

Introduce your teens to basic investing and the concept of how to make money with money. Explain how investments can grow over time and the power of compound interest. Should you buy a stock (or an ETF, GIC, mutual fund or some other financial product) for a 14-year-old… absolutely!  There are lots of kids out there with parents who invested the time to explain shareholding and how it works at a level they can understand.

Kids are very familiar with many publicly traded companies like Disney, Roblox, Mattel and McDonalds. Holding a few shares (in an informal trust account or simply in your name) may not return enough to put them through college, but it will teach them the basics of investing, risk, and return for managing their finances in the future. It’s true that a savings mindset develops early and pays back over the course of a lifetime, but developing an investing mindset pays back HUGE over the course of a lifetime and will set your kids up for long-term financial security and wealth building. As soon as your kids turn 18, have them open a tax-free savings account (TFSA) and invest the funds, even if they can only muster $50 or $100 monthly to contribute.

Teach the bad (and good) about credit and debt

Credit is very easy to access these days and even first-year post-secondary students are often able to get a credit card. Responsible use of this first credit card can help establish a credit score and they are very convenient — almost a necessity for some online transactions. On the other hand, easy access to credit cards (with generous spending limits and 20% interest!) and a few spontaneous/poorly thought-out spending decisions can derail a future before it even gets started.

Failing to understand the impact and obligations of a student loan can also lead to a nasty surprise when it comes time to repay that money or get a car loan or mortgage down the road. Although federally issued Canada Student Loans are now interest-free, provincial loans may still carry interest. Either way, your kids need to realize that a student loan isn’t free money and that paying it back will definitely crimp their post-graduation lifestyle.

Remember that financial education is an ongoing process. Encourage openness about money and create an environment where your children feel comfortable discussing money matters with you. Starting to instill good money habits from an early age and being a supportive resource as they develop their financial skills will help your money-savvy kids grow into financially responsible, money-savvy adults.

Published by DLC Marketing Team

It’s Time to Crush Your Credit Card Blues.

Although credit cards interest rates have not been affected by the recent surge in the prime lending rate, the fact remains that credit card debt is usually the most expensive debt you can have. The average is around 20% and even the so-called ‘low interest’ cards carry a rate in excess of 10%. Expediting the demise of your credit card balance should be the number one focus for anyone looking to improve their financial situation. Here are five actions to get you started.

1. If you are carrying a balance, the first step is to put the card(s) away. Whether you put them in the food processor or just temporarily turn them off (our recommendation), you need to own up to your mistake and not add any more fuel to the fire. If it’s the case where you have no choice but to use the card (a prepayment for example) make sure to make a payment to cover that charge right away.
2. Take a minute to fully understand the consequences of a credit card balance. Search out the details of your credit card statement until your find the section that tells you exactly how many years it will take to eliminate that balance with minimum payments. While you are at it, make sure to confirm the interest charge for that month and just how little of your payment is actually going toward reducing the balance. It can be a bit shocking, but also quite motivating! The government has a simple online calculator for you to easily analyze different repayment options.
3. Plan your repayment attack. Making a few random spending sacrifices and hoping that you will have a little more left at the end of the month to pay towards your card is wishful thinking. You need to figure out ASAP the maximum amount you can throw at your credit card debt every month and chart out when you are going to be debt-free. Set up an automatic transfer from your bank account to your card every payday and make that money invisible – you can’t spend what you can’t see!
4. Investigate balance-transfer credit card options… but only if you have a plan and are confident you can pay off the balance within the prescribed period! A balance transfer card shifts your debt to a new card (for little or no fee) which offers a limited time period (usually 6 -12 months) with a very low interest rate (often 0%) to pay off the balance. This cuts your interest expense to zero and ensures that 100% of your payment goes to reducing the balance. However, you have to be very disciplined and have the income to make regular payments. The card company is literally banking on you to fail and hopes you will miss the payment deadline, because that will trigger an avalanche of penalties, fees and interest charges that will put you worse off than ever!
5. Pick up the phone and call your card company. It might be more possible and easier than you think to actually negotiate a lower interest rate on your credit card. If you have had a card for a while and have been carrying a balance and making the minimum payments, you are a valued customer! Your card issuer is very interested in keeping your business and may be willing to negotiate. You will have to get through to the right people and know what to say, but 15 or 20 minutes on the phone could save you a chunk of cash – even a few percentage points would help.

The above tips will help you get started on the road to eliminating your credit card balance. There are no shortcuts and it may require a lot of sacrifice depending on how much debt you have, but the mental burden that lifts when you see a big zero under “balance due” it will be worth it!

Published by DLC Marketing Team

Debt Reduction Key as Interest Rates Soar.

There are lots of reasons people fall into debt but only one way out — and it requires a combination of planning, discipline, and persistence. With the rise in interest rates, there is no better time to map out an action plan to reduce your debt.

Start by gathering information about all of your debts — student loans, credit cards, lines of credit, car loans, overdue bills — everything. Make a list of all the debts with the details of the amounts owed, interest rate, and minimum monthly payments. This will help you set goals, create a timeline, and prioritize your repayments.

Your first goal is to make sure everyone gets paid the minimum amount required to avoid your debts going into arrears. Overdue bills and missed payments are going to play havoc on your credit score and it can take a lot of time and effort to rebuild.

The next step is to figure out how much more you can allocate from your current income for debt repayment. One common debt pitfall is to look at your situation and conclude that more income is the solution — and immediately start looking for ways to make extra money. While more income can obviously help you reduce debt, it shouldn’t be your first step.

The most important step is to create a realistic budget. Reducing the expense side of your monthly budget is going to free money to pay off debt much faster than pumping up your income on the top line. You need to identify areas where you can reduce expenses and channel those savings to your debt repayment fund. It’s critical to start accurately tracking your expenses and get the actual data on your spending, not just a guesstimate based on your feeling.

When it comes to who to pay first, there are two commonly used strategies for prioritizing debts: the debt avalanche method and the debt snowball method. With the avalanche method, you focus on paying off the debt with the highest interest rate first while making minimum payments on other debts. The snowball method involves paying off the smallest debts first, regardless of interest rates, and then moving on to larger debts.

From a financial perspective, the avalanche method is the best way to pay off debt, especially if the interest rate differential is large. The snowball method may improve your motivation, but it makes no sense to pay off a small home equity loan at 6% if you are carrying credit card debt at 20%!

Interest rates on credit card balances haven’t been affected by Bank of Canada rate changes (unlike other loans!), but they are already so high that in almost every case they should be the starting point for your debt reduction efforts. If you have been making payments and your credit rating is not too bad, you may be eligible for a credit card balance transfer offer with a promotional 0% interest rate for a specific period. Make sure you have a realistic plan and are disciplined before you sign up for any balance transfer options or credit card consolidation loans. They are a good option for managing credit card debt as they lower or defer the interest, but you need to stay on the payment schedule. If you have any investments (TFSA?), selling them to pay off credit card debts usually makes financial sense.

Paying off debt is a long-term commitment that requires discipline — there is no quick way out. Once you get started and see some progress, your mindset will begin to shift, and a huge weight will start to lift. Becoming debt-free or at least in a position where debt stress doesn’t consume your life will do as much for your mental health as it will for your financial health.

Published by DLC Marketing Team

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 a Dominion Lending Centres mortgage expert today! They can help review the above options and assist in choosing the most effective course of action for your situation.

Published by DLC Marketing Team

Make Your Mortgage Work for You.

When it comes to mortgages, it can be easy to get overwhelmed by the sheer number of options! Fortunately, we are here to help! Below are some of the mortgage details that you should understand to ensure that you are getting the best mortgage for YOU:

Interest Rate Type

Interest rate is one of the major components to your mortgage and it is important to decide whether you want a fixed-rate, variable-rate or protected (capped) variable-rate mortgage.

A fixed-rate mortgage is ideal for new home owners or those on a fixed income who are more comfortable with a stable monthly payment.

A variable-rate mortgage is ideal for individuals who have room in their budget and want to take advantage of potential interest rate drops – keep in mind, with this mortgage you pay more if the rates go up!

Lastly, the protected (capped) variable-rate mortgage operates similarly to variable-rate, except with a maximum (or capped) rate allowing you to take advantage of interest rate decreases while never paying above a set amount should the rates rise.

Amortization

This is the life of your mortgage and is typically a 25-years period whereby you would pay off the entirety of the loan. You can choose a shorter term, which would result in higher payments but allow you to pay less interest over the lifetime of your mortgage and be mortgage-free faster! Or, you can opt for a longer amortization period, which allows for smaller monthly payments.

Payment Schedule

This is the frequency that you make mortgage payments and ranges from monthly to bi-monthly, bi-weekly, accelerated bi-weekly or even weekly payments. There are many great calculators on My Mortgage Toolbox app (available through Google Play and the iStore) that can help you calculate and compare these payment schedules to see what works best for you.

Mortgage Term

The standard mortgage term is 5-years and refers to the length of time for which options are chosen and agreed upon, such as the interest rate. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.

Open vs. Closed

Open mortgages give you the option to increase mortgage payments or make lump sum deposits on your loan. A closed mortgage does not allow additional payments without penalties.

High Ratio vs. Conventional

A conventional mortgage is where you put the standard 20% down on your home. However, as not everyone is able to do this, many buyers will end up with a high-ratio mortgage product. High-ratio mortgages need to be insured due to financial institutions only being allowed to lend up to 80 percent of the homes purchase price WITHOUT mortgage default insurance. Therefore, if you choose a high-ratio mortgages over a conventional one, you will pay a monthly insurance premium.

Contact a DLC mortgage expert today to get started on your homebuying journey with expert advice and solutions to suit YOUR unique needs!

Published by DLC Marketing Team

Selling Your Home in the Spring.

Are you looking to sell your home? We have a few tips to help you make the most of the spring season!

1. Hire an Experienced Realtor: Before preparing your home for the Spring market, you will want to hire an experienced realtor! A good realtor will serve as your guide through the entire sales process, helping you get your home ready for listing, showing potential buyers and finalizing the eventual sale. This is even more important given the changing landscape in relation to additional safety protocols with viewings and even virtual viewing options. Now, more than ever, the expertise of a realtor will help you navigate the sales process.
2. Prioritize Repairs and Improvements: Before listing your home, it is important to go through room-by-room and address any issues such as chipped paint, small holes in the wall, broken fixtures, old appliances, etc. Correcting these minor issues will help your home truly shine when buyers walk through.
3. Clean and Stage Your Home: Now that you have made the necessary minor repairs, you can start staging your home! Start with the exterior of your home and ensure you tidy up the yard, remove any junk and wash your windows! When it comes to the interior of your home, you will want to declutter and do a deep clean (a professional cleaning service can come in handy for this!). Once your home is decluttered and clean, your real estate agent can help you stage it so that it appears spacious and inviting.
4. Consider a Pre-Listing Inspection: Once you are ready to list your home, it can be a good idea to consider a pre-listing inspection. The inspector would conduct a complete visual inspection of all interior and exterior elements (including HVAC systems, wiring, ceiling, chimneys, gutters, etc.), which would help put prospective buyers at ease.
5. Organize The Paperwork: There is a lot of paperwork when it comes to selling your home. Having all of these documents organized and together for potential buyers will help to speed up the process and allow them to address any questions before the deal is finalized. Permits, renovation or repair receipts, warranties, rental agreements and copies of your utility bills are all good records for potential buyers.

Whether you are looking to buy or sell, it is important to work with a trusted real estate and Dominion Lending Centres mortgage expert to ensure the best outcome for you and your family!

Published by DLC Marketing Team

Come Along for the Walk!

CNOY is a moment each year when tens of thousands of Canadians step outside the warmth and comfort of home to shine a light of welcome and compassion in their communities. Since 2011, the Coldest Night of the Year has raised over $57,000,000 across Canada in 166 communities – 100% of net proceeds stay local to support our CNOY charity partners. Learn more about our history.

How to Participate

Select one of two fun ways to participate in 2023:

•  Main Event: All CNOY locations will host an organized, in-person main event – complete with 2km + 5km signed routes, rest stops, volunteers, and snacks at the end.

•  Offsite Walk: All CNOY locations will welcome offsite fundraisers who self-organize either with friends or individually, walking any day in February on a route they choose.

More Details

•  Date: Saturday, February 25, 2023

•  Where: Chances are there is a CNOY location quite near you! If not, you can still walk and fundraise for your local charity offsite in your own community, wherever you are.

•  What: Participants register to walk 2km + 5km, whether at a main event, or offsite with their team.

•  Who: Everyone is welcome! CNOY is family-friendly – participants range in age from toddlers (with parents of course) to active seniors.

•  How: Participants register online to set up their personal Fundhub page. It’s easy to set your goal, add your photo message, and thank donors via email. Donors who give online are receipted within minutes of their secure gift of $20 or more.

•  No Registration Fee: CNOY is 100% free to join! Everyone is welcome to come and fundraise for their local CNOY charity.

•  Impact: By walking in the cold, you’ll feel a hint of the challenge faced by those experiencing homelessness during winter. By fundraising, you’ll be contributing much-needed money to a charity in your town that is bringing hope and help to people in your community who need support.

Join the Team!

This year, the walk is extra special for us, because our daughter will be turning one years old on February 25th 2023!  The same day as the CNOY 2023 walk! We are asking that those who would like to give a gift, instead of doing so, donate in her name instead.

See our video here!

CNOY is quickly approaching, with just over 10 days left, as of todays date. Which, by the way, Happy Valentine’s Day! So show some love and help donate to the cause!

I am proud to be supporting such a wonderful cause, as a Team Captain for Wolfpack Mortgage Solutions – Kingston! However, I am looking for support from YOU! Please assist me in this cause by joining my team. There are multiple ways to support. You can join my team and gather donations of your own! Walk along side us on February 25th 2023. Or simply donate to the cause. Even $5 can help to go a long way! If you are super motivated, you can even do all of the above! Looking forward to seeing you all out there!

Join the team and/or donate here: Wolfpack Mortgage Solutions – Kingston

Source Material by https://cnoy.org/home

#cnoy23

Published by Kristopher Reaves

The Coldest Night of the Year is a moment when tens of thousands of Canadians step outside the warmth and comfort of home and shine a light of welcome and inclusion.

Together, we’re collecting donations that fund critical services at a local charity partner who serves and supports vulnerable families and individuals in our CNOY community.

•  We walk through the cold and dark on February 25, 2023 to declare our concern for people who have no home and take shelter in nooks and crannies.

•  We walk for those whose days are a battle to house and feed their families and whose nights are filled with fear and frustration.

•  We walk for those driven from home by violence and abuse. And we walk for people overwhelmed by isolation, guilt, and despair.

•  We walk humbly, realizing that anyone can lose their footing and then lose everything else.

Each step we take brings someone closer to safety, health and home, as together, we raise funds for organizations whose commitment and work transforms peoples’ lives.

CNOY Charity Partners

Our Coldest Night of the Year charity partners:

•  Welcome people experiencing homelessness, providing respite from constant wandering, wondering, and watching one’s back.

•  Nourish body and soul with food for all who need it and provided in a welcoming and dignified manner.

•  Foster healing through counselling, mental health assistance and other connections.

•  Support families at great risk of losing their housing, to prevent that downward descent.

•  Provide safe shelter and support to women, children, and youth fleeing violence at home.

•  Help people find pathways to permanent housing, employment, and futures.

I am proud to be supporting such a wonderful cause, as a Team Captain for Wolfpack Mortgage Solutions – Kingston! However, I am looking for support from YOU! Please assist me in this cause by joining my team. There are multiple ways to support. You can join my team and gather donations of your own! Walk along side us on February 25th 2023. Or simply donate to the cause. Even $5 can help to go a long way! If you are super motivated, you can even do all of the above! Looking forward to seeing you all out there!

Join the team and/or donate here: Wolfpack Mortgage Solutions – Kingston

Source Material by https://cnoy.org/home

#cnoy23

Published by Kristopher Reaves