Wednesday, April 26, 2017

Thank you for the last 10 years!

Today marks 10 years since I became a licensed Mortgage Broker in Alberta. April 26th 2007. The date I jumped on the roller coaster of self employment. Things were so crazy in Edmonton during that time. We were in the midst of a major housing bubble. Prices were going up month-over-month, mortgage lenders were offering all sorts of crazy mortgage products and it felt like every apartment building in the city was being converted into a condo.

I can remember being scared but excited. I felt like this was something I could excel at. I was finishing my post secondary education in Finance as a part time, evening student and I had worked full time in sales, for years.  I figured I had this in the bag. I was in for a very rude surprise. The first few years were marked with many sleepless nights and worries. The mental shift from being an employee with a regular pay check to wondering when my next deal would close was a real challenge for me to overcome mentally.  This was not as easy as I had anticipated. I kept at it, even when my instinct told me that it was too hard, to just go get a “real” job. My husband supported me throughout this challenging time, always telling me that I could do this, to just keep at it. That it would all work out.

While the last 10 years have not necessarily been easy, they have been rewarding. I have learned so much about perseverance and myself. About being too stubborn to quit even when it was my instinct to do so. It has taught me that hard work pays off and the most important path to success is consistency. This business is all about relationships. If you do good honest work, treat your customers and referral sources right, and stay disciplined with your routine your business will thrive!

I can’t believe that it’s been 10 years. I have helped hundreds of people purchase a home, or refinance one to make things easier financially. It has been a pleasure and I have learned so much along the way!

Thank you to my fabulous clients, referral sources, mentors, friends and family for being the driver of my success. I would not be here without you! Here’s to another 10! 



Wednesday, April 12, 2017

No change to key interest rate- Bank of Canada

Once again, the Bank of Canada announced that it is maintaining its target for the overnight rate at ½ percent, despite stronger-than-expected global and domestic economies.

While the global economy is exceeding the Bank's January expectations-and the US is similarly experiencing solid growth-the Bank believes there is still an element of uncertainty around the global outlook. Similarly, Canada's economic growth has been faster than predicted back in January, something the Bank attributes to a boost in spending in the oil and gas sector as will as increased consumer spending resulting from the Canada Child Benefit. While the Bank finds this increase in GDP "encouraging", it isn't prepared to declare the country on a "sustainable growth path".

With CPI inflation currently at the Bank's target of 2 percent, the Bank expects it to dip in the months ahead before returning back to 2 percent later in the year.

Because of all this-and the fact much of this good news could be "temporary"-the Bank has opted to maintain its current rate. If you have any questions regarding interest rates-or any questions regarding your mortgage at all-please feel free to drop me a line at 780-722-6287.

Wednesday, March 1, 2017

Variable rate holders- no change to your mortgage rate!

The Bank of Canada is keeping the target for the overnight rate at ½ percent. In a rather brief interest rate announcement, the Bank noted that, while there are "significant uncertainties" that could impact the outlook of the Canadian and global economies down the road, for now things are consistent with the Bank's January projections, so it's staying the course.

The Bank did note that CPI inflation rose to 2.1 percent in January-something the Bank says reflects higher energy prices due, in part, to new carbon pricing measures in two provinces. Because of this, the Bank believes the increase in inflation is temporary.

Overall, the Canadian economy performed a little above expectations in the fourth quarter of 2016-thanks in part to higher housing indicators. That said, Canadian exports continue to face strong competition and, while there was growth in employment, wages and hours work remain rather subdued. These two factors are contributing to Canada's persistent economic slack, and preventing it from keeping pace with the rebounding United States.

If you have any questions about the most recent interest rate announcement, feel free to reach out to me. Alternatively, you can view the full release here: http://www.bankofcanada.ca/2017/03/fad-press-release-2017-03-01/.

Friday, February 17, 2017

Money talk

This time of the year there is lots of chatter going on out there about investing, since the deadline to contribute to RRSP’s for the 2016 tax year is March 1st. Naturally, all of this talk about investing leads to other discussions about financial planning, in general.  Here are some of my random thoughts, ideas, and rules of thumb when it comes to money:
  • Plan ahead. It’s always best in life to hope for the best, but plan for the worst. While that may sound negative it is always best to live on less than you earn and save some money for the future. No one knows where life will take you. Having savings not only provides you with a plan B should something go wrong but, more importantly, having some money gives you options in life whether it be in making an investment or starting a business. Who knows what opportunities will come your way. Having some money in the bank gives you the option to seize them! One of the fascinating aspects of the work I do is to be able to see how my clients approach money. I have been absolutely amazed at the saving abilities of some of my clients who are in lower income brackets. Saving is their mindset and it doesn’t matter how much or little they earn, saving is just what they do. The ability to save is definitely not about how much money you do, or don’t make. It is about your habits and mindset and the conscious decision to live under your means so you have some money left over to save.
  • Investing in an RRSP or TFSA?* If your income in retirement will be similar to your income right now then it may not make sense to contribute to an RRSP. RRSP’s are great for tax shifting in the sense that any contributions you make now will lower your current taxable income. When you withdraw the funds from your RRSP, in retirement, you will be taxed at whatever your income level is at that time. So, if you are in a high tax bracket now, but will be in a lower one in retirement it makes sense to contribute to an RRSP in your higher earning years. If your current income tax bracket is not high, then it may make more sense for you to save into a TFSA. While there is no tax deduction for contributions to a TFSA, any investment gains made within your TFSA grow completely tax free and there are no tax implications for withdrawals. Speak to your financial planner for more information on retirement strategies.
  • Pay extra on your loans. On mortgages and installment loans, it’s a great idea to get into the habit of paying extra, every month. You’ll be surprised at how much faster you pay off this debt (especially on your car loan). Set up the extra payments so they come out automatically and you won’t see it as optional. If anything goes wrong in your life (sickness, job loss etc), you can always revert to your original lower payment. My rule, when it comes to cars is, if you feel like you cannot comfortably afford the payment within a 5-year term (or less) then you are buying too much car. Time to check yo’ self and look for something more affordable!
  • Create healthy money habits when you are young to set yourself up for the future!. Getting in the habit of saving and spending less than you earn when you are younger will help you immensely as you get older. If saving is a regular habit when you have little money you will not even think twice about saving as your income grows.
  • What is your relationship with money? Mindset is a game changer when it comes to finances. Consider your relationship with money. Is it a healthy one? Is it positive or negative? Our thoughts can create our reality and if you treat money as a difficulty I believe it will be one. It’s important to treat the money we have with a healthy level of respect and to save for the future but to also enjoy life sometimes too.
  • Have some fun with your money. I firmly believe that you should leave some room for fun money in your budget, regardless of your financial situation. Every week pay yourself a cash allowance, which you set based on your budget. Allow yourself the freedom to do whatever you want with it, with no guilt attached. Depending on the amount you give yourself you could use it to go to a movie, eat out, buy fancy coffees, or clothes etc. Having cash is key in this exercise because it’s tangible and once it’s gone, it’s gone. We have been doing this in my house for years and it has worked very well for us. We take our money out every Friday, without fail, and it must last the week. Once it’s gone it’s gone but we allow ourselves to have fun and enjoy whatever we spend it on. We have kept this habit up through tough financial times and abundant ones and it has always helped keep us accountable but also allowed us to have some fun at the same time. It’s a great budgeting exercise!
  • If you can’t pay for it now, you can’t afford it. Yes, there are some exceptions to this rule for big ticket items like an education, and buying houses, or cars. Consumer debt is at an all time high. Many of us are living beyond our means and it’s time to get back to basics and start paying for things the way our parents generation did, by saving for things before purchasing them. Being in debt is optional and not a given. Allow yourself the freedom of being debt free. You deserve it!
  • Buy life insurance when you are young*. The article doesn’t agree with me on this. But, here me out. You buy life insurance for the future. If you are young and single right now you may think that buying life insurance is a silly expense. My philosophy is to buy it when you are as young as possible because the premiums are usually so cheap it’s a joke! As you get older (when you naturally start thinking about buying insurance), you will find that it’s often more complicated to get due to health reasons and it’s typically much more expensive. I say “set it and forget it”. Buy as much as you can possibly afford when you are young and you won’t need to think about it again as you get older!
  • Pay off debts while saving at the same time. if you spend all of your money tackling debt you will only get into debt again if the car breaks down and you need to pay the mechanic to get it back on the road. In my mind, it makes more sense to pay down debt but to also set aside some savings, at the same time. It will help as a mental exercise in saving and getting into a healthy savings habit. You will also be able to see your bank account grow  and this will help to create a mental shift to abundant thinking, as opposed to focusing on lack.
  • Be kind to yourself when it comes to money. There are lots of things we should or shouldn’t be doing when it comes to money and it is easy to place the blame on yourself if you aren’t financially where you’d like to be. The reality is that wages don’t often keep up with the cost of living your life and raising a family. So, don’t be too tough on yourself! But, do take the time to ask as many questions as you can so you can work within your means to create a better financial future for you and your family.

*While I have lots of ideas and thoughts on money, I am a Mortgage Broker, not a financial planner or life insurance agent. If you would like information on financial planning or purchasing life insurance I can refer you to some great people that would love to help you. If you have some general questions about money or budgeting or mortgages I’d be happy to chat so feel free to drop me a line! 

Monday, February 6, 2017

HOW MUCH ARE YOUR GRANDCHILDREN COSTING YOU?

Although Millennials are waiting to have children until they're a little older (and more financially secure), a new study from TD Ameritrade reveals they're still receiving quite a bit of help from their parents, both financially and otherwise.

The study reveals that, on average, grandparents spend US$2,383 per year on such things as toys (58%), clothing (55%), non-cash gifts (39%), cash gifts (42%) and school expenses (27%). On top of that, over half of Millennials said their parents provide at least one hour of child care or help running the household per week, with many saying their parents go all-out-spending 48 hours helping out per week.

The study cites stagnant Millennial incomes and exorbitant student debt as potential reasons for this trend. What do you think?

Tuesday, January 17, 2017

BREAKING: CMHC announces increase to insurance premium rates

In an announcement made earlier today, the cost of CMHC insurance will increase, starting on March 17th 2017. For buyers with the minimum 5% down payment, the premium will rise from 3.60% to 4.00% of the total loan amount. It is assumed that Canada's other two insurers, Genworth and Canada Guaranty, will likely also follow suit. If you are currently pre-approved and looking for a home, you will need to write an offer on a property prior to the March 17th deadline to avoid the premium increase.

If you have any questions, please drop me a line!



Wednesday, January 11, 2017

Resolve to pay your mortgage off faster

With the New Year just beginning, there's no better time to set some goals for the year ahead. But while health and fitness tend to be top-of-mind these days-particularly after the food-fest known as "the holidays"-it’s important to show your mortgage some resolution love as well.

One way to do this is to simply pull out that mortgage contract, blow off the dust and figure out when it's time to renew. If you're up for renewal in 2017, get the ball rolling early by locking down one of today’s low rates as early as possible-usually 120 days before your mortgage expires. 

If you're not up for renewal, there are still ways to save some money (at least, in the long run) by paying down more principal. You can do this by making a lump-sum payment, or increasing your monthly payments. These payments don’t have to break the bank! Rounding your payment up to the nearest even number-or putting a portion of your bonus towards it-can save you hundreds of dollars over the life of your mortgage.

With rates expected to increase in response to recent mortgage rule changes, chances are the low rates you're used to today-whether they’re variable or fixed-won’t last forever. To prepare yourself-and pay down some extra principal-why not set your payment to mirror today’s "stress test” rate, which is typically two percentage points higher than the posted five-year fixed rate.

There are countless other steps you can take this year to shorten the length of your mortgage. If you’d like to hear more, feel free to give me a call or send me a note.