29 Feb

Quick Mortgage Calculation

General

Posted by: Brad Lockey

 Every one of my clients has it installed in their heads.

20% down?
$400.00 per mo. per 100K.

Less than 20% down?
$450.00 per mo per 100K.

Keep it simple. I can fine tune to the penny when the time comes.

Brad Lockey
mortgages@bradlockey.ca
416-518-7476

 

 

23 Feb

You Can Pay Your Mortgage Faster with “The Java Factor”

General

Posted by: Brad Lockey

You Can Pay Your Mortgage Faster with “The Java Factor”

When you are searching for a mortgage, you shouldn’t only base your decision on rate. It is important to search for the “best mortgage”. A mortgage that not only provides the best interest rate, but also the one with the best terms and conditions. By understanding mortgage terms and what they mean in dollars and sense, you can save the most money and choose the term that is best suited to your specific needs.

With a closed term mortgage, you can’t pay off your mortgage before the end of the term without having to pay a penalty.

The pre-payments without penalty clause is one of the conditions that can save you a considerable amount of money in the long run. This clause allows you to make payments on the principal of your loan, or increase the amount of your periodic payments (monthly, bi-monthly, etc.) without a penalty. Each lender has different programs for pre-payments, they usually vary from 10% to 20%, i.e., you can pay any amount within the approved percentage of the original value of your mortgage or increase your periodic payments once a year without paying a penalty.

Many people don’t take advantage of this clause because it is generally difficult to save the extra money to make additional payments.

Here is an easy way to take advantage of this benefit – “The Java Factor”. This is something that is very easy to follow and can save you thousands of dollars by paying down your mortgage.

Usually everyone buys a cup of jo (coffee) or two during their work day. When you see the cost of a cup of coffee at Starbucks or any other establishment, you realize that maintaining this habit can be very costly.

Suppose that you spend at least $5 per day, 5 days a week in “coffee, donuts, chocolates, snacks, etc.”, this would amount to approximately $108 per month; if you apply them to your monthly mortgage payments, the savings can be considerable.

For example:

In a $100,000 mortgage at a rate of 3.39% and 25 years amortization, you would reduce the total payment of your mortgage by 5 years and 4 months with savings of $13,185 in interest. For this calculation, we considered that the interest rate did not change during the life of the mortgage.

This calculation would vary case by case but depending whether you have a pre-payment clause with your mortgage or not, it is important to emphasize that by making a small sacrifice you can have significant long-term savings.

So remember “The Java Factor” next time you are thinking of stopping by for a coffee on your way to work and take a cup of coffee brewed at home.

12 Feb

Reverse Mortgage vs. Home Equity Loan

General

Posted by: Brad Lockey

Reverse Mortgage vs. Home Equity Loan


More and more Canadians are going into their retirement years without a lot of money saved in the bank. It is suggested that in order to live a financially comfortable retirement, couples should have saved 50-60% of their peak pre-retirement income, which equates to roughly $42,000 to $72,000 a year or $275,000 to $1,025,000. Singles should have saved 60-70% of their peak pre-retirement income, roughly $30,000 to $50,000 per year or $350,000 to $850,000. (Assuming mortgage is paid off and children are financially independent. All amounts based on 2014 dollars).

In a 2013 survey of 1,500 Canadians over the age of 50, only 2 out of ten households said they would have more than $250,000 saved for retirement. 50% of the households surveyed felt that they would consume their retirement savings within the first 10 years of retirement.

Because of these financial woes, many Canadian homeowners in their later years have considered taking out a home-equity loan or the option of a reverse mortgage to access the equity in their home.

Home-Equity Loan

Like a primary mortgage, a home equity loan lets you convert your home equity into cash. In fact, many refer to a home equity loan as a second mortgage, where you would receive the loan as a single lump-sum payment, and then you would make regular payments to pay off the principal and interest.

Another form of home-equity loan is the home equity line of credit (HELOC). A HELOC gives you the option to borrow up to a pre-approved credit limit, on an as needed basis. Therefore, with a home-equity loan, you would pay interest on the entire loan amount, whereas with a HELOC, you pay interest only on the money you withdraw. Since a HELOC is an adjustable loan, the payment changes as the interest rates fluctuate.

It is important to keep in mind that your home acts as collateral in a home-equity loan. So if you default on the loan, you risk losing your home to foreclosure.

Reverse Mortgage

With a reverse mortgage, instead of making payments to a lender, the lender will pay you, based on a percentage of the appraised value of the home, as well as factors such as your age and the age and the condition of the house.

You will continue to hold title to your home, but as soon as you become delinquent on the property taxes and/or insurance, the condition of the home is in disrepair, you move/sell the home or you pass away, the loan is then due for repayment.

Home Equity Loans, HELOCs and Reverse Mortgages are all options, which allow you to convert the home equity into cash, however, they differ in terms of credit, income, repayment, disbursement, age and equity requirements. Before you make any decisions, find out how to tailor your needs and requirements with the best product for your situation.

For more information on a reverse mortgage loan, contact a mortgage professional at Dominion Lending Centres.

9 Feb

Why Use a Mortgage Professional?

General

Posted by: Brad Lockey

There are generally two ways to get a mortgage in Canada: From a bank, or from a licensed mortgage professional.

While a bank only offers the products from their particular institution, licensed mortgage professionals send millions of dollars in mortgage business each year to Canada’s largest banks, credit unions, and trust companies … offering their clients more choice, and access to hundreds of mortgage products!

As a result, clients benefit from the trust, confidence, and security of knowing they are getting the best mortgage for their needs.

Mortgage professionals work for you, and not the banks; therefore, they work in your best interest. From the first consultation to the signing of your mortgage, their services are free. A fee is charged only for the most challenging credit solutions, and it’s especially under those circumstances that a mortgage professional can do for you what your bank cannot.

Whether you’re purchasing a home for the first time, taking out equity from your home for investment or pleasure, or your current mortgage is simply up for renewal, it’s important that you are making an educated buying decision with professional unbiased advice.

Call me any time at 416-518-7476