There are numerous reasons why homeowners choose to refinance their mortgages – everything from debt consolidation to freeing up money for their child’s education to using their home equity to buy another property. But the most popular reason for refinancing at this time of year is for holiday gift buying and entertainment.

Planning ahead really can save you money down the road. And with the high-cost holiday gift-buying and entertaining season quickly approaching, this may be the perfect time to refinance your mortgage and free up some money instead of relying on high-interest unsecured credit such as credit cards and lines of credit.

You may find that taking equity out of your home will help bring joy back into your holiday season – and start the New Year off on a debt-free note, as you may also be able to use some of the equity in your home to pay off high-interest debt such as your credit card and/or line of credit balances. This will enable you to put more money in your bank account each month.

And since interest rates continue to hover near historic lows, switching to a lower rate may save you a lot of money – possibly thousands of dollars per year.

There are penalties for paying your mortgage loan out prior to renewal, but these could be offset by the lower rates and extra money you could acquire through a refinance. I can sit down with you and work through all of the equations to ensure this is the right move for you.

With access to more money, you’ll be better able to manage both your holiday spending and existing debt.

Paying your mortgage down faster
By refinancing, you may extend the time it will take to pay off your mortgage, but there are many ways to pay down your mortgage sooner to save you thousands of dollars in interest payments. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

You can also increase the frequency of your mortgage payments by opting for accelerated bi-weekly payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage.

By refinancing now – before the holiday season is in full swing – and planning ahead, you can put yourself and your family in a better financial position.

As always, if you have any questions about refinancing, reducing debt or paying down your mortgage quicker, I’m here to help!

Angela Calla Mortgage Team

604-802-3983 callateam@dominionlending.ca

A major TV news program calls out TD Canada Trust’s collateral mortgage.  CBC Marketplace aired an episode called ‘Busting the Banks’ on January 25th.  If you want to skip to the video link, just click here and scroll to the 8:00 min mark.

During the program, CBC took a hidden camera into a TD branch….the reporter posed as a potential mortgage borrower….   Only when questioned for the 4th time did the TD banker disclose their mortgage was a collateral charge….  but they didn’t seem to explain the difference between a conventional mortgage and a collateral mortgage… The Banker only agreed that the collateral charge was a disadvantage.

The CBC reporter also produced TD mortgage documents obtained at the branch.   After a thorough search, they couldn’t find the word ‘collateral’ anywhere.   The only place they could find the word ‘collateral’ was in one document sent to the lawyer during mortgage registration.   Of course, the big problem here is that most lawyer’s get mortgage instructions from Banks around one to two weeks before closing….  A bit too late to start shopping for a new mortgage.  Leaving the consumer with no option but to proceed with the TD collateral mortgage.

WHAT’S A COLLATERAL MORTGAGE?

Collateral mortgages are more commonly used when obtaining a secured line of credit…. or a product that has revolving credit with no set amortization.  There are several other differences that affect what your current and future options will be (more on this later).  A collateral mortgage has it’s place but for the vast majority of us, I believe it’s just not the right product. The biggest problem I have is that most borrowers are unaware of what they are getting into.

Back in October 2010, TD quietly announced they would begin registering all their mortgages as collateral mortgages.   http://www.angelacalla.ca/blog_post?id=8190  the differences between collateral and conventional mortgages….  Does anyone remember this?  At the time, this was a huge story….  and yet, there was hardly no coverage…. Maybe the hundreds of millions that the BIG SIX BANKS spend in advertising each year has something to do with the lack of coverage.?

I could be wrong but my feeling is that since October 2010, the majority of TD clients have no idea their mortgage is registered as a collateral charge…..they will only find out once they go to refinance, renew or make a change with their mortgage…

I applaud CBC Marketplace for taking on the BIG SIX BANKS…..and my advice is to anyone needing a mortgage is to speak to an unbiased advisor.

TD is not the only lender doing this, they just happened to be the lender CBC showcased. It is common for the credit unions as well as sometimes with aby of the big banks HSBC, CIBC, RBC, Scotia, BMO. It’s an option for some cases without question; its just very importnat for there to be transperency in the products you select and to be aware of all the the pro’s and cons.

As always we are here to help callateam@dominionlending.ca 604-802-3983

The Bank of Canada has kept interest rates low for 3 years now and while rates are low, reading between the lines make the following the top 3 take aways

1. The forcast is downgraded. This means they intend to keep there rate low, longer.

2. The variable rate mortgage will continue to be a great option for borrowers.

3. They may consider a decrease in future, as they removed the increase warning.

To ensure you have the best possible mortgage contact the Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca

To read more about the Bank of Canada this week see the link http://www.theglobeandmail.com/report-on-business/economy/do-not-post/article15015655/ 

We have seen a significant number of first time homebuyers reviewing their options to purchase a home, market confidence remains high.

http://www.theglobeandmail.com/news/british-columbia/bc-housing-rally-expected-to-continue-through-2014/article14979458/

Questions on the best plan for the lowest cost of home ownership? Contact the Angela Calla Mortgage Team today 604-802-3983 callateam@dominionlending.ca

Some 65% of Canadian homeowners are planning renovations in the next 12 months and expect to spend an average of $8,992 according to the recent Scotiabank Home Renovations Poll.

 Among the provinces, homeowners in Manitoba and Saskatchewan are the most likely to renovate (74%) in the next year and plan to spend the most with an average spend of $12,920. The province least likely to renovate in the next 12 months is British Columbia (55%), with homeowners planning to spend the least at $5,700.

For those planning renovations in the next 12 months, the most popular method to pay for their project is cash savings (73%), followed by a line of credit (25%) and credit cards (16%).

Men are more likely than women to use cash savings (77% vs 68%), with home owners in Atlantic Canada (81%) and Saskatchewan and Manitoba (80%) being the highest among the provinces to choose this payment method.

Interestingly, one in four (25%) homeowners planning to renovate in the next 12 months indicate they do not have a renovation budget.

Click here to read the full Scotiabank press release.

Questions on financing your renovations?

Angela Calla

Dominion Lending Centres

callateam@dominionlending.ca 604-802-3983

Hear how The Angela Calla Mortgage Team saved Monica of Surrey BC $1100 a month by restructuring their mortgage live on CKNW Click Here to Listen!

Could there be savings in your mortgage?

Contact us directly to see if we can help you callateam@dominionlending.ca 604-802-3983

Thanks for visiting,

I am honoured to be named one of the Canadian mortgage brokering industry’s most influential women by CMP Magazine!

I truly love what I do and thoroughly enjoy ensuring my clients have the best mortgages catered to their unique needs!

This article is a great read as it boils down to:

1. Real estate now and always will be about the fundementals of affordability for your personal circumstances.

2. You can’t time the market.

3. The more you try to predict it the more complex it becomes.

Several other great points and resources from the BOC are included as well

Enjoy

The Angela Calla Mortgage Team is here to help with your mortgage 604-802-3983 callateam@dominionlending.ca

http://business.financialpost.com/2013/09/04/canada-housing-doomsayers/

When bond markets move quickly lenders scramble to offer lower terms – 1-4 years in efforts to lure clients in with lower rates that can correspond.

But, it’s important to remember that the lowest rate does not always guarantee the lowest cost for your mortgage over time!

Here’s why:

1. Ottawa says they don’t want the low fixed rates we have seen to return and various economists agree.

Poloz: “..expect that short-term interest rates, as is normal, will be above inflation” http://t.co/3l8DLVuYwM (ie. > 2%. We’re at 1% today)

2. As a result, we have already seen fixed rates increase more than 1% in a matter of weeks.

3. Why would you want to be up for renewal sooner, when that means your interest rate will increase sooner? It’s our goal to keep your payments as low as possible for as long as we can.

4. If you renew sooner and your rate increases as a result, you may have to have more income to qualify for a mortgage you have already been paying.

This is the time to go long or risk the cost of homeownership going up.

Simply put, this is not the time to go “short term” even if you think you’re moving.  It’s unlikely the date of renewal will match so, therefore, your best option is to go variable.

If your mortgage provider isn’t explaining the correlation between the bond market, government news, history of rates, or a plan to protect you from future payment shock, chances are you’re working with someone who isn’t protecting your best interests!

We’d be happy to explore your best options with you!

Angela Calla, AMP

Dominion Lending Centres-Angela Calla

Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980 Phone :

604-802-3983 Fax: 604-939-8795

Email: acalla@dominionlending.ca

www.angelacalla.ca