Elias Kellendonk, Author at SuperBrokers

How to Calculate Mortgage Penalties

There are numerous good reasons as to why mid-term you may be considering the option of breaking your mortgage. You may have found yourself in need of extra finances, have located a much better rate, are aiming to consolidate high interest debts, are interested in early renewal or are paying out the balance of your home loan early.

Before you make your decision, you will need discuss the option with your mortgage broker and weigh the mortgage penalty fee against your potential future savings.

The Mortgage Penalty Calculator is a helpful resource Canadian Mortgage Trends has supplied to Canadian mortgage holders amid these important considerations. The calculator can provide you with an estimation of what your penalty fee will look like as you determine your best financial route. Continue reading “How to Calculate Mortgage Penalties”

Building up your Retirement Emergency Fund

According to an Ipsos Reid Retirement Risk survey conducted earlier this year, roughly 72 per cent of Canadians approaching retirement are concerned over how they will maintain a comfortable standard of living through their retirement years. Most Canadians are additionally anxious that their savings will not be sufficient in covering needed health care expenses.

Sun Life Financial spoke to two experts in the finance field – Jim Yih, author of 10 Things I Wish Someone Had Told Me About Retirement and Gail Bebee, author of No Hype – The Straight Goods on Investing Your Money – who recommended the following tips on building, and maintaining, your emergency retirement fund. Continue reading “Building up your Retirement Emergency Fund”

Canada Housing Prices Predicted to Fall Up to 25%: Capital Economics

Firm Declares Property Values no longer Sustainable

The independent research firm Capital Economics has warned Canadians that housing prices are on the verge of a weighty fall, as stated in an article that appeared yesterday in the Financial Post.

The firm’s report announced that property prices have “lost touch with fundamentals”. Coupled with record household debts, Capital says Canada’s housing market is over-inflated and ready to pop.

“Relative to disposable income per capita, our calculations suggest that housing is around 25% overvalued, which is approaching the level of excess that the U.S. market reached at its peak in 2006,” the firm said. “House prices have been growing rapidly for nearly a decade now and it has reached the point where housing is so overvalued relative to incomes that a downward correction seems unavoidable.” Continue reading “Canada Housing Prices Predicted to Fall Up to 25%: Capital Economics”

The Benefits of Early Mortgage Renewal

Too often is the case that Canadians fail to review the terms of their mortgage contract, and contrast them with what is currently available on the market. Early renewal, and renewal in general, give you, the homeowner, an excellent opportunity to negotiate a lower rate for your next term. It also allows you to capitalize on today’s rates before they rise, if that is indeed the path they are headed.

An early renewal generally means that you will be breaking the terms of your current mortgage to enter into a new term, at a more desirable rate. Breaking a contract will generally result in a prepayment penalty of either three months interest at your current interest rate or the interest rate differential (IRD). Continue reading “The Benefits of Early Mortgage Renewal”

Financial Dos and Don'ts for Couples

Common Mistakes Couples Make when Dealing with Money

“I work all night, I work all day, to pay the bills I have to pay,” sings Abba in their famed hit Money, Money, Money – it’s a rich man’s world. For the majority of couples who didn’t find their “wealthy man”, money is a weighty issue, especially between partners who find themselves working and working yet surrounded by debts.

Talking about money is important, but surveys have found that roughly 70 per cent of couples do just that and yet they are still at war when it comes to funds. Why is that? Mary Claire Allvine, financial planner, told SmartMoney.com she believes this is because couples don’t know how to discuss their finances appropriately.

“People tend to be emotional and reactive about money, not strategic,” she says. And this is what leads them to make large financial mistakes. Continue reading “Financial Dos and Don'ts for Couples”

Montreal, Toronto, Vancouver Top Out National Poverty Rates: Statscan

New national data garnered by Statistics Canada has revealed that poverty rates in the major urban areas of Toronto, Vancouver and Montreal are well above national averages. The agency used income reports taken from 2009 to acquire its prospective.

More positively, data also seems to indicate that mid-sized cities are improving their poverty statistics despite the recession. Both Quebec City and Victoria have shown a decline in low income residents over the last ten years.

Overall, however, the national rate for low income earners rose in 2009, for the second year in a row, up from 9.2 to 9.6 per cent. This means that roughly 3.2 million Canadians, over 630,000 of those being children, live in poverty. Continue reading “Montreal, Toronto, Vancouver Top Out National Poverty Rates: Statscan”

The Blended Mortgage: A Way to Access Equity without Penalty

“Mortgage penalty can be a shocker,” stated Ellen Roseman in her blog, On Your Side. She reminds readers that the interest rate differential (IRD) prepayment penalty charged by lenders to borrowers who break their terms early can amount to thousands of dollars.

One broker commented that this penalty amounted to $28,000 for his client whose mortgage totaled $500,000.

The blended mortgage is one way to gain needed financing without having to break your current mortgage. With blended financing, the new amount borrowed is fused to your current mortgage loan, giving you a blended interest rate and saving you from shelling out any penalty fees.

Continue reading “The Blended Mortgage: A Way to Access Equity without Penalty”

Should you Sacrifice Pre-Payment Options for a Lower Mortgage Rate?

Taking a Look at the No Frills Mortgage

If you knew there was virtually no chance of your amassing a pre-payment, moving, or needing to refinance for the next five years, would you give up all of your mortgage options for the lowest rate possible? That is what the No Frills Mortgage offers to home purchasers: the lowest rate available, with no bells or whistles.

The No Frills Mortgage is only offered by select brokers in Canada. The product boasts a wholesale, rock bottom, five-year fixed rate, but very limited flexibility. The No Frills would not allow for large pre-payments without penalty, though it does allow for an annual payment increase option – usually up to 10 per cent per year – and is attainable with as little as five per cent down.

The No Frills can even be bumped up to an accelerated weekly or bi-weekly payment option, meaning you can pay down your mortgage faster with more payment contribution being applied toward principle.

Continue reading “Should you Sacrifice Pre-Payment Options for a Lower Mortgage Rate?”

The Benefits of a Cash Back Mortgage

Often is the case that upon move-in the homebuyer finds themselves short of the cash needed to cover instant home-related expenditures. These most often include legal closing fees, urgent renovations or repairs, and even home furnishings.

The cash back mortgage is one solution a homebuyer may want to consider, especially if it means the difference of making the property livable and/or profitable.

This type of mortgage will be attributed a slightly higher interest rate than would a standard residential mortgage, but it can also grant the purchaser up to five per cent of the value of the home in cash up front. If these funds are being applied to home costs that could see the market value of the property rise quite quickly, thereby increasing the amount of equity the owner has built in that home or making it ready for a lucrative flip, the difference in interest rate can be more than made up for.

Continue reading “The Benefits of a Cash Back Mortgage”

Should Debt Halt your Plans for Wedded Bliss?

Money can’t buy you love, but a large shortfall of it sure seems to have an effect in destroying it. Money troubles are consistently one of the chief factors associated with divorce and the number one reason couples state they bicker.

That said, is it a good idea to openly enter into a marriage contract knowing that you or your partner are bringing to it a fair sized bundle of funds owing?

According to David Weliver, writer for Money Under 30, it really depends on the type of debt. He states that while he would be comfortable entering into marriage with student loans or even vehicle debt – since the purpose for which those two debts were, or are, being incurred are viewed by society as beneficial toward intents of the future – he would not do so with personal or credit debt.

Continue reading “Should Debt Halt your Plans for Wedded Bliss?”