28 Feb

CAN YOU RETIRE BY AGE 65?

General

Posted by: Tracy Price

 

According to a recent poll conducted by Sun Life Financial Inc., most Canadians are being forced to rethink traditional plans to retire at age 65, with only 30% now thinking they can retire at 65.

Debt is playing a big role in this change, as 61% are worried about the amount of debt they will carry into retirement.  Longer life expectancy and lack of planning are also major factors behind this shift towards working beyond the ‘official’ retirement age.

From our perspective, we see many folks trying to pay down/off their mortgages while carrying lines of credit (LOC’s and credit cards. This is completely counter-productive. Most people believe they can pay off LOC’s but for whatever the reasons it does not happen. Curiously most do not see an LOC as real estate related debt when in fact it is. One couple recently told us they had no mortgage but had a $150,000 LOC which they did not think was secured. when it is. Many have substantial equity and approach or enter retirement with minimal income and therefore end up living ‘poor’ instead of enjoying their lives without financial stress. And these are the fortunate ones. Others carry high mortgages as well as other high interest debt and with the prospect of declining income, they will end up renters.

For those of you who have good equity in your homes we suggest that the key is to make your equity work for you to create a second income stream for later years. A couple of options are to purchase an investment property. Another is to invest in private mortgages. We have many clients who have done this and within five to ten years have generated significant income and asset wealth.

In effect, they now have not just one (income) basket but several that will allow them to work less and/or retire sooner than they otherwise would, because they have realized that a house with no mortgage no longer works well in our world, and in fact robs them of a more carefree lifestyle.

Call us today to discuss your future and to determine what better financial options are available to you.

28 Feb

ATTENTION BUSINESS OWNERS:

General

Posted by: Tracy Price

 

If you have a business loan or a line of credit and a mortgage and you are not able to pay them down, please call us now.  We will give you a financial plan to reduce interest costs such that you can use the savings to pay down your debt much faster.

Often business lines of credit are at prime plus one-two or three per cent or more and we have seen many cases where they are secured against the home without the knowledge of the borrower, effectively making it a 2nd mortgage.  Why pay these high rates when you can refinance at rates are hovering around prime or 3% for 5 year mortgages or 10 year fixed rates at an unbelievable 3.99%.  We can get you more cost effective financing with another lender, while you maintain your business and savings accounts at your bank without any consequence.

Getting your money at the lowest rate at the best terms makes financial sense.

We recently helped a Fergus business owner  who was paying  5.79% on his mortgage of $310,000 and prime plus 1 on a $100K business line of credit. He also had credit cards of $30,000 with total payments in excess of $5,000 per month. 

By reviewing his financial situation, we found that a new five year fixed rate mortgage at 3% (prime) could reduce his payments to less  than half and save him thousands of dollars in interest every year.

Interest chews away at your income so you have less to operate your business.  Now John can take the savings and start working at improving his operation while paying his debt off sooner.    He doesn’t have to change banks for day to day banking;  the new lender is using a void cheque from their account for the new mortgage. 

We are business owners just like you, so we understand completely what you are up against, especially if your business is still fledgling. Call us today for a consultation. We look forward to meeting you.

 

28 Feb

RENEWING THIS YEAR? TIME FOR A CHECKUP!

General

Posted by: Tracy Price

 

Everyone with mortgages renewing this year out of five year fixed rate mortgages will be getting a pleasant surprise.  Their new mortgage rate will be cut in half.  The problem for most of these homeowners has been they couldn’t’ get out (pay out) these mortgages earlier because of stiff penalties.  Some of the major banks are charging the difference between the posted and discounted rates meaning the penalties didn’t make sense to pay out even though we were in a unprecedented time in our history when rates have been declining every year. 

The time is now to contact us about  getting a locked rate for the next 120 days to protect yourself in case rates rise in the spring.  It’s surprising how many people don’t take a few minutes to get a mortgage check up prior to renewal. We like to start about six months prior.  If there is something negative reported on the credit bureau we help you get things cleaned before your mortgage renews.  

This is exactly what we are doing for our client Dulcey.  We called her to see how things we going because her  5.79% five year mortgage (the best rate at the time) renews in May.  Unfortunately, she had a setback  when her hours were cut to a four day work share during the recession and as a single wage earner, she fell behind on some of her credit cards.  The credit card companies didn’t have much sympathy for her position and they put her into collection on her cards.  Dulcey is back to full time hours but she can’t get ahead enough to pay her debts off.  So we arranged a private second mortgage (no bank will touch you when you are in this position)  to clean up her $20,000 in credit cards.  She can easily afford the monthly payment of $233. per month and over the next six months her credit will steadily improve.  Now when her mortgage matures we will be able to refinance her 1st mortgage and her 2nd mortgage together and with the new five year fixed and variable rates hovering around 3 %, Dulcey’s new mortgage payment will be be less than she is paying now and with zero credit c