17 Jan

5 Tips for your 2014 Property Goals


Posted by: Rita Wagner

Every year I set goals at the beginning and I constantly check in on them to see where I’m at. 

So what your property goals for the year ahead?  More importantly, how are you going to achieve them? 

Maybe you are in an endless renter cycle and are looking to break out and own your first home.  Or  perhaps you are interested in establishing an investment property portfolio to enhance a better retirement lifestyle.  Or maybe your goal for 2014 is to take on that renovation project that you’ve been dreaming about.

Property goals, like all kinds of goals in life, need to be ‘SMART’ – Specific, Measureable, Achievable, Realistic and Timely.  So I’d like to share five tips I think can help you with setting and achieving them.

1.  Make a list.

List makers achieve more!  One way to gauge your progress with your property goal is to create a list(s) and cross items off as you achieve them.

You should have a list of learning things you need to do and one for actions you need to complete to get you that step closer to achieving your property goals.

2.  Create a Property Vision Board.

We all learn in different ways – we each aspire and dream in different ways too!  One tip is to create a vision board of your property goal.  It lets you literally “see” your goal.  For more visual learners and engagers in the world, having a wall of images can help to not only ‘keep your eye on the prize’; but can also help see how the goals fit in with other aspects of your life.

Vision boards are easy to make.  You just need a printer, scissors, some glue and a blank wall or roll of cardboard.  The point is to have a visual motivator of the realization of your goal.  It can be whatever you want it to be.  Just make sure that the images not only spur motivation but action as well.

3.  Get organized to make better use of your research and action time.

An important part of being successful with property goals is to be a good planner.  Savvy planners understand that in the information age; 80% or more of your research and work can be done online.  They will minimize the wasted time of constant car trips by making the most of shortlisting decisions using online tools, comparisons and efficiently filing research and discoveries in accessible places.

Make the most of digital tools and insights to research and plan efficiently and effectively.

4.  Find and meet with a Mortgage Professional.

This is a VERY important phase of the property process and likely one of the most important steps in seeing your property goal realized.  A good mortgage professional will not only help you fine tune your vision, they will assist you with setting a realistic time frame to see your goal achieved.  As well, they can provide you with support throughout the process.

Purchasing a home is a major accomplishment – paying off your mortgage as early as possible will be the best investment you can make.  Don’t only fixate on the interest rate you will receive.  A good mortgage professional will show you why the amortization period, the rate type (fixed or variable) and the flexibility of the repayment schedule can be crucial to lowering your costs as well.

5.  Have a property goal beyond just this year’s goal!

Regardless of what your property goal is for the year ahead, it is likely to involved at least one property.  If it is your first home, you need to be thinking beyond this – what is your next property step after that – perhaps it is to have your mortgage paid out in 10 years.  If your goal is an investment property for 2014, think about how you want to grow your portfolio beyond the first investment purchase. 

Property goals can and will continually change year after year.  Working with a good mortgage professional in your corner will help you see your long term vision to completion.



7 Jan

Collateral vs Standard Charge Mortgage – what is the difference?


Posted by: Rita Wagner

With some lenders moving towards collateral charge mortgages, it’s important to understand the differences between a collateral and a standard charge mortgage.

The primary difference is that a collateral charge mortgage registers the mortgage for more money than you require at closing. For instance, up to 125% of the value of the home at closing with TD Canada Trust or 100% through many credit unions, instead of the amount you need to close your transaction (as is the case with a standard charge mortgage).  In other words, ALL of the equity in your home has been given to these lenders as security regardless of the amount you actually owe.

The major downside to a collateral mortgage becomes evident at your mortgage renewal date. For borrowers who want to keep their options open at maturity and have negotiating power with their lender, this isn’t the best product feature because collateral charge mortgages are difficult to transfer from one lender to another.

In other words, if you want to change lenders in order to seek a better product or rate in the future, you have to start from the beginning and pay new legal fees, which range from $500 to $1,000. With a standard charge mortgage, in most cases, the new lender will cover the charges under a “straight switch” in order to earn your business.

In addition, with a collateral charge, it could be difficult to obtain a second mortgage or a home equity line of credit (HELOC) unless your home significantly appreciates in value.

Lenders offering collateral charge mortgages promote the benefit that it makes it easier and more cost effective to tap into your equity for such things as debt consolidation, renovations or property investment. There’s no need to visit a lawyer and pay legal fees – the money is available as your mortgage is paid down. Yet, if you read the fine print, you may still have to re-qualify at renewal.

A standard charge mortgage gives you the ability to move to another lender at renewal should you want to without incurring legal fees, and many borrowers find it more beneficial to keep their options open. If you need to borrow more with a standard charge mortgage, you have the option of a second mortgage or a HELOC, which also enables you to take money out as your mortgage is paid down.

Navigating through the mortgage process alone can be tricky. Working with a mortgage professional who has access to multiple lenders will help ensure you receive the product and rate catered to your specific needs.

As always, if you have any questions about the information above or your mortgage in general, I’m here to help!