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How to become mortgage-free sooner.

October 12, 2016
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Tania Grozelle - Mortgage free soonerPaying your mortgage off the traditional way takes 25 to 40 years and costs about TWICE the purchase price of your home. Here are some effective ways to pay off your mortgage sooner, build equity faster and save thousands in interest.

•    Change your payments. Simply increasing your payment frequency to bi-weekly or weekly costs nothing and can save thousands of dollars over the life of your mortgage. If you can afford to pay a little extra, consider accelerated bi-weekly or weekly payments—these are equivalent to making one extra monthly payment per year which results in substantial savings. Or you can make a lump sum payment which can realize savings several times as great over the life of your mortgage.

•    All-in-one mortgage. Instead of making extra payments, consider switching to a mortgage that pays off the principal faster without costing you anything more. All-in-one mortgages combine a line-of-credit mortgage with a chequing account to reduce interest costs and pay off your mortgage in as little as half the time, without changing your spending habits. You deposit your pay into the all-in-one account and pay bills as you normally would. While you’re not using your money, it’s used to reduce your daily loan balance. Over the life of the loan, this can save hundreds of thousands of dollars in interest!

•    Merged account mortgage. If you’d rather not refinance your existing mortgage to switch to an all-in-one mortgage, consider a merged account mortgage. This system uses your existing mortgage (any type of first mortgage will work), an advanced line-of-credit (ALOC), and specialized software that makes a connection between your bank account, ALOC and mortgage. Each time you deposit income into your account, the software automatically generates an interest cancellation on your mortgage. The result is that a 30-year mortgage can be paid off in about 8 to 11 years, with no change to your lifestyle or refinancing of your existing mortgage.

To help decide which of these options is the best way for you to become mortgage-free sooner, call me today at 403-392-5808!

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New Mortgage Rules

October 5, 2016
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Tania Grozelle - bank secretsIf you or anyone you know is thinking of buying a home, now would be the time to take action. New mortgage rules may affect your buying power effective October 17th. Our finance minister has announced that all insured mortgages must qualify using 5 year benchmark rate currently 4.64% instead of the actual interest rate currently around 2.39% for 5 year fixed. What this means is that you could potentially have a significantly lower pre-approval amount.For example: Suppose your pre-approval amount today is $450,000 purchase price. AFTER October 17th your new pre-approval amount would be closer to $360,000. That is a HUGE difference. You must be lender and insurer approved before October 17th for current guidelines to apply. Contact me to find out more.

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HOW TO PAY OFF DEBT FASTER – 25 SECRET TIPS YOUR BANKER DOESN’T WANT YOU TO KNOW

July 19, 2016
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  1. Tania Grozelle - bank secrets Make a double mortgage payment whenever you can. Doing this once a year can shave over 4 years off the mortgage! Sometimes you can skip a payment later on too…if you really, really need to. Try not to. If your payment is $2,000 a month, four years of no payments is $96,000!!
  2. Increase frequency of payment. For Example going from monthly to bi-weekly accelerated can shave over three years off your mortgage! $2,000, three years of no payments is $72,000!!
  3. Increase your payment. For example a one-time 10% increase can shave 4 years off the mortgage. That’s $96,000! Imagine if you bumped the payment 10% every year from the get go!!! You would be mortgage free in 13 years! Start to finish! Can’t do it? How about 5% every year….you would be mortgage free in 18 years! How about increasing the payment by the amount of your annual raise?
  4. Lump sum payments…same idea…mortgage is gone way faster! Even just one payment a year equivalent to 1 monthly payment will give you similar results as #2 above! How about using your annual work bonus?
  5. Renegotiate whenever rates drop to save interest and pay mortgage faster! Generally a good idea however *Caution* get independent professional advice (a cost benefit analysis) to make sure it makes sense for you at that time. I can help. A 1% reduction on a $300,000 mortgage will save $250 a month…times 5 years…that’s $15,000!!
  6. Keep your credit rating high for best rate. Always pay on time. Never let payments slip past their due date. Always keep balances low in relation to credit limits on credit cards, lines of credit, etc. 50% or less is best even if you pay the balances in full every month. What generally reports to the credit bureau is the statement balance each month. So if your credit limit is $3000 and you are running $3000 a month through the card each month (to collect all those points you never spend or can’t use in blackout periods) and paying in full, it will look like you are maxing out your credit limit and your credit score will drop accordingly.
  7. Increase your mortgage! Yeah I know sounds backwards! Do it to roll in your credit cards, line of credit, car loan etc for a better rate and a set payment plan. Oh you say you don’t want to extend the repayment period of that stuff by rolling it into your mortgage or you have a low or promo rate credit card (those never end well) I agree! Then keep the total payment amount the same but pay it in one neat monthly payment to the increased mortgage.
  8. Make an RRSP contribution and use the refund to pay down your mortgage.
  9. Go variable rate with your mortgage but keep payments as if fixed rate. Variable rates usually win out over fixed rates. By paying a higher payment you will pay off the mortgage faster. It’s also a buffer in case the rate rises above the fixed rate for short periods of time. *Caution* variable rates are not for everyone. Get independent professional advice to find out what is best for you. I can help!
  10. Take your mortgage with you when you change properties to avoid penalty or higher rate on a new mortgage. This is called “porting”. Make sure that your mortgage has this feature. It is not widely known and could save you a ton of dough.
  11. Set up auto savings every paycheque, even $10, when it reaches the amount of one mortgage payment, apply it to the mortgage. This concept goes nicely with #4 above.
  12. Unhook from the money drip…stop paying with your fancy points credit or debit card. Way too easy to overspend! Go old school, go off the grid…PAY CASH, it works!
  13. Don’t ever buy on layaway, you know, six months don’t pay schemes. You think…No problem I’ll just pay it in six months, it will be okay. Yeah right!
  14. Downsize your house. Two good friends and clients of mine, having followed many of the tips here, are in great shape except they have a six bedroom house! Two people, six bed house – go figure! They are nearly debt free so no biggy, but can you say the same? Circumstances change, make the adjustments along the way!
  15. Don’t want to move? Convert the basement/rooms to rental and use the income to pay down debt.
  16. Convert your mortgage to tax deductible. If you are self-employed, own rental property or have investments, this is likely possible. I won’t go into details here, just ask me how.
  17. Have a payment priority.
  18. Pay off the highest interest rate first.
  19. If you have tax deductible loans, pay them off last, slowest. Pay the non-tax deductible loans first and fastest.
  20. Pay off ugly debt first. Stuff like credit card purchases.
  21. Payoff bad debt next. Stuff like car loans, boat loans. Things that depreciate in value.
  22. Pay off good debt (or shall I say “not so bad debt”) last. Stuff like mortgages, investment loans. Things that hopefully appreciate in value.
  23. Buying a car? Finance it if you have to, don’t lease! *Exception* If you are self-employed it might make sense.
  24. You have $20,000 in a secret bank account for a rainy day fund and $20,000 owing on a line of credit. Seriously? The bank account is paying you next to nothing (which is taxable income to boot) and the line of credit rate is way higher (and not tax deductible). You know what to do. You can keep the line of credit open and on standby for rainy day funds. Make it the secret line of credit that you have but never use.
  25. Give your Banker more money. No really. Keep enough in your chequing account to meet the minimum requirement to waive your service charges. My bank charges $10 a month for 25 transactions and nothing, zero, zilch, zip if I keep $2,500 in the account. Let’s see $10 x 12 is $120 a year to pay off debt. I’d have to earn 5% with the $2,500 in my savings account to come out ahead. No brainer here. Oh yeah, if you need more than 25 transactions a month…see #12 above.
  26. #26? BONUS TIP and MOST IMPORTANT. Let’s face it, you’re not the Government and you’re not a Bank, you can’t run deficits forever and you won’t get a bailout….stop procrastinating already! See 1 through 24 above and take action now!
    Sidenote: *Caution* beware of some too good to be true ultra-low rate mortgages. These “no frills” mortgages are often loaded with restrictions like pre-payment limitations, fully-closed terms, stripped-out features, or unusual penalties. You really need to compare product to product. If you’re not looking at what you’re giving up, you may regret it in the future. This alone could prevent you from taking advantage of tips #1, 2, 3, 4, 5, 7, 8, 9, 10, 14, 16 and 22!
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5 Ways To Avoid Student Loan Debt

July 5, 2016
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Ok, today we’re going to talk about how to keep your kids’ out of debt. The last time I checked, the average student’s debt is currently almost $30,000, and it’ll be even higher by the time your kids graduate! Tania Grozelle - Mortgage Broker Red DeerThe truth is most young people—and often their parents—can’t afford that kind of debt, so it ends up damaging their credit rating and ability to buy a house and raise a family. Of course, the best way to prevent such problems is to avoid massive student debt in the first place. Here are 5 tips to avoid student loan debt… https://www.youtube.com/embed/lTIwlwqojWs?rel=0%3Bautoplay

 

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Real Estate vs Mutual Funds – Which is Better?

May 30, 2016
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Tania Grozelle Red Deer Mortgage BrokerI’m not a financial advisor, nor am I an expert in investing, but in these turbulent economic times it’s more important than ever to discuss this important and controversial topic…

Even today, both mutual funds and real estate still offer
investment potential.

Wondering which is better?

Here are a few things to consider….

Your trusted mortgage broker for life!

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Now Offering Manulife One!

May 13, 2016
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Manulife One ImageNow Offering Manulife One!

We do offer options and one of these options is something that is now offered with Sky Financial Corporation The Mortgage Centre.  It is called Manulife One.

Manulife One is an innovative all-in-one banking account that puts all your money to work all the time in order to outsmart your debt. Click here to see how it works. Then contact me today for more information.

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