Wednesday, February 23, 2011

Purchasing property when you're going through a divorce...

I came across a great article written by a fellow Axiom Member, Marcy Berg. Marcy owns Mortgages4Women operating out of Ontario. During my last 4 years as a mortgage broker, I’ve come across many clients who are in the process of getting a divorce and are alarmed when I explain that they will need a separation agreement in order to purchase new property. Please read on for more information on purchasing property if you are currently going through a divorce.
Going through a divorce can be a very scary and emotional time for a lot of people. The best thing you can do is to keep up with all of your payments (don’t assume your soon-to-be-ex is paying your credit card or vehicle loan for you). I have seen a lot of good credit ratings get pummelled because of assumptions such as these. Keep your paperwork organized and stay positive!
Last week I had a conversation with Gail Walker, a Divorce Consultant with Moving Forward Consulting. I refer clients to her if they need assistance with their divorce and don’t know where to start. She is in the business of listening to your story and directing you towards services that can help. Feel free to contact her if you just don’t know how to get started!
If you require more detailed information on your specific situation, please email or phone me anytime!

Thursday, February 3, 2011
The Business of Divorce
The first firm and legal binding contract most of us will ever sign is the day we get married. Thank goodness for all the happiness that comes with a marriage or most of us would never consider it. Oh wait - we don't. Who amongst us buys an hour of a lawyer's time to review the ins and outs of family law? The second biggest firm and legal binding contract most of us will ever sign is when we buy a home.

January is the time when I see a lot of people who made it through the holidays and now want out of the marriage. The assets will be split and they want to buy a home of their own. But wait - there's the business of Divorce that needs attention.

If you were legally married you are married until the court recognizes otherwise. To undo a legal contract you need another legal contract that recognizes your intent. Without this separation agreement or divorce you are married. If you are married and you buy a home you need your spouses permission. As Draconian as that sounds it's the law. Don't believe me? Check the deed of your home. You will see on the front page you made a declaration that you are or are not a spouse. If you are a spouse your spouse also needs to sign the deed acknowledging you own property.

For this reason a lender requires a copy of your separation agreement before they can lend you money for a mortgage. It's for no other reason than family and property law. I can't tell you how many times I see people in my office shocked to find this out. Yes there are options but after you've said or heard "Honey I'm leaving" it's not a great time for a collaborative conversation.

If you're thinking that your marriage is coming to an end please do your homework. Working with a Divorce Financial Analyst is one way to plan ahead. I have seen very good results with this service. If having a home of your own is part of your plan make sure you consider the following:
1. Value of your home - this asset will most likely be split with your spouse but the formula for the division of assets is clearly set out by the courts.
2. Penalties - call your lender and see what the penalty is to get out of your mortgage. If your taking a spouse off title you will need to redo your contract with your lender and you will need to qualify.
3. Real Estate Fees - what will it cost you to sell the house? Don't forget to add the cost of the lawyer.
4. Pre-Qualify - what will you be able to afford on a new mortgage? What income are you planning to use to qualify for the mortgage? (If using alimony or child support most lenders would like to see a minimum three to six months of payments deposited to your bank account before they will consider them).

-Marcy Berg

Tuesday, February 22, 2011

Sneaky debt collectors

This article in Thicken My Wallet does a great job of highlighting some sneaky tactics used by debt collectors. Worth a read!

Wednesday, February 16, 2011

The Rolls-Royce of financial calculators

I just happened to come across an amazing website dedicated to all sorts of financial calculators.

Curious about how much home equity you should end up with after a certain time period? Thinking about renting out your basement? Considering purchasing an investment property? Want to compare a few different mortgage options? Trying to figure out if you should purchase RSP’s? Wondering how much income tax you’ll have to pay?

Ultimate calculators is for you! Ultimate Calculators is a collection of free financial calculators designed for home owners, investors, tax payers, students, professors, professionals and small business owners.

Monday, February 14, 2011

Steps to Financial Fitness

In the 2009 Federal Budget the government assigned a Task Force on Financial Literacy to come up with an action plan to increase financial literacy levels in Canada. Last week, the much-awaited report was released. You can read it here:

If you're looking to improve your own personal financial literacy level, below are a few tips to get you started:

1. Establish your goals.
When it comes to financial literacy, where do you want to improve? Do you want to start investing? Saving? Learning more about certain financial topics that currently intimidate you?
2. Immerse yourself in the online community.
There are a plethora of blogs and Twitter accounts out there designed to offer tips and tricks for individuals who are looking to improve their financial literacy. Canadian Capitalist, Million Dollar Journey and Thicken My Wallet are three good places to start.
3. Start reading the business section.
And more specifically stories that relate to personal finance. Many newspaper articles and columns will address complicated financial topics in a simplified manner. They'll also talk about new government programs and rebates as they arise.
4. Talk to people.
If you have a friend who is an investing wiz, talk to him or her! They'll probably be able to point you in the direction of interesting books, trusted professionals or other resources that can help you along your journey.
-Article courtesy of Axiom Mortgage Partners

Thursday, February 10, 2011

A few words of advice from my good friend, Julia

Julia Krause is a very reputable mortgage broker based out of Kelowna, BC. She taught a fantastic mortgage course that I attended during my first year mortgage brokering. She has a vast knowledge of the mortgage business along with many words of wisdom and I trust her opinions.
That being said, here is a great article she wrote regarding the current interest rate climate:

As they say in the UK...
by J. Krause Mortgage Services on Thursday, 10 February 2011 at 12:49

Interest rates, interest rates, interest rates!! OK, here's how it works:

If you're in a variable rate mortgage, changes in prime are what affect you. Prime changes based on the economy in general. Things like unemployment figures, inflation, the dollar, exports, stuff like that. Prime only changes on specific, pre-scheduled dates. It doesn't change unexpectedly. When it does change, it changes by a quarter or maybe a half of a percent at a time.

Longer-term mortgage rates (5 year, 7 year, 10 year) are affected by the bond market. The bond market is where money for these longer-term mortgages comes from. And the bond market is affected by the stock market. When the stock market is doing well, investors leave the safety and modest returns earned in the bond market and try their luck in the stock market. Less money in the bond market means interest rates on longer-term mortgages go UP. When the stock market is not doing well, investors go back to the security of the bond market. More money in the bond market available for mortgages means interest rates on longer term mortgage go DOWN. Basically, this is supply & demand. When lenders have to pay more for this money, they raise the rate they charge you for it. That's what happened yesterday. Longer term rates went up a little. It's normal. And they can just as easily go down again.

Mortgage rates have been low for a very long time now. Actually, they have been at historical lows. To ask an economist or a bank CEO or even the Finance Minister, 'where are interest rates headed?' of course the answer is 'up'. They can't go any lower! The question is WHEN. And there's no way to know when. It all depends on the things mentioned above... the economy in general, and the bond market. In the meantime, I'm going to enjoy paying the least amount of interest possible on my mortgage. And you should, too.

As they say in the UK...

My nifty new site!

New Website! I've recently launched a new, fresher version of my website! Please take a moment to browse it's contents for up-to-date mortgage information.

Tuesday, February 8, 2011

A voice of reason...

Finally, someone with a bit of perspective! No, the sky isn't's just real estate. Things go up and down. It's called life.
Please watch this video featuring the Realtor Association’s former President, Larry Westergard. He has some great points to make about the local real estate market in Edmonton and offers his perspective on today’s rate increase.
I am honestly not sure why the media is making such a big deal about today’s increase. A .20% increase in interest rates is normal! Rates fluctuate up and down. This is nothing new!

Click here view this video!