Welcome to our latest installment of Dear urbaneer, where we address housing questions that are troubling some of our clients. This time around, we're helping an industrious client tackle his New Year’s Resolutions with the help of our guest panel John Filice and Militsa Fiuza from Invis.ca.
Lots of people curse the deep, dark days of January, but I love them. To me, January marks the beginning off a new something every year. I’m one of those folks who watches the ball drop on New Year’s Eve and is ready to embrace the new task, skill or habit that I’ve laid out for myself to acquire in the coming year. Last year, I pledged to become physically fit (mission accomplished!). Now, I want to extend my “fitness” into other areas of my life. 2015, then, will be my year of financial fitness.
As a homeowner, I wonder about my mortgage? What steps can I take to make sure that my mortgage is in “optimal shape”?
Seeking Financial Fitness
Here's our response:
Dear Financial Fitness:
Well done with your enthusiastic embrace of all the possibilities that a new year brings! We asked Mortgage Brokers John Filice and Militsa Fiuza what steps to take to get your mortgage finances in order or how to make a move towards more financial prudence They compiled a list of Top 10 Mortgage Tips for a Smart 2015. This list covers a number of different bases in the mortgage department, and will help you get your home owning finances in tip-top shape!
1) Get a mortgage checkup. That’s right. Every year- no matter what point you’re at in your mortgage. You get a checkup for your car to keep it running smoothly for the long-term. Your financial future deserves the same kind of scheduled attention. Getting a checkup means looking at your short, medium and long term goals, and making sure that your current strategy is in step with them.
2) Deal with the holiday hangover. Many Canadians can go a little overboard financially during the holiday season. If your credit card balance is more than you can pay off in the next few months – and especially if you have other loans – then do yourself a favour and come in to chat. The right debt consolidation strategy could save you thousands and put you on the right financial path. It’s all about taking action today.
3) Speed up your mortgage pay down. Commit to finding a way to use your prepayment privileges at least once. Think of things like a tax refund, financial gift, small inheritance… or just a little extra disciplined saving. Every single payment you make after that will go further. Also, instead of paying your mortgage monthly, pay weekly or bi-weekly. That small change can save you thousands.
4) Renew with your eyes open. When your lender sends out a letter suggesting you renew your mortgage at their current offer, get advice and be fully informed about your options. Don’t renew with your eyes closed! This is your opportunity to negotiate the best possible deal!
5) Cramped? You could renovate, not relocate. Maybe you think this is the year you need to move up the property ladder. Remember though that the right renovation – an addition, a new family room, a fresh kitchen – might be all it takes to turn the house you’re in into the home of your dreams. It is almost always less expensive to renovate than to relocate. We have great renovation financing options if that’s what’s in your future this year!
6) Take care of your credit. It’s so important to have good credit behaviours to ensure that you always qualify for the best mortgage rate. Pay your bills on time. Don’t let your credit accounts exceed 30% of the credit available. Before you cancel any credit cards, get advice. And don’t apply for a store card just to save on your purchase that day!
7) Choose low-interest debt. Whatever your need might be – funding education, a large purchase, investments, renovations, or paying down debt, your mortgage might be your most cost-effective financing option. It’s well worth your time to investigate.
8) Don’t leave money on the table if you bought last year. If you bought your first home in 2014, you may be able to take advantage of the $5,000 non-refundable Home Buyer Tax Credit amount, which provides up to $750 in federal tax relief. Not sure if you qualify, ask!
9) Talk to us if you are going through a separation or divorce. Your home can be the asset that gives you both a fresh start. And if one of you wants to keep the marital home, we have some great mortgage options!
10) Build a financial cushion. Your high-interest credit card should not be your emergency fund. This year, build a financial cushion: get in the habit of putting a small sum from every pay cheque into a special emergency fund. This is the kind of habit that can become seamless and essential towards keeping ahead and on track with your finances.
Have more questions? Here's a link to John and Militsa –> YourTorontoMortgageTeam
At urbaneer.com. we are by your side, before, after (and during) your homeowner experience. We are not about a transaction, but rather are about the relationship that comes with the long-term nature of homeownership. If you, or someone you love, has specific real estate needs, wishes and desires, and would enjoy the personalized service of a Top Producing boutique real estate outfit who subscribe to a pressure-free approach, please know we're here to help at urbaneer.com.
~ Steven and the urbaneer team
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