Provided by Brian Marling, Accredited Mortgage Professional,

Neighbourhood Dominion Lending Centres, Cobourg

Have you considered leasing your business-related equipment as opposed to buying it outright? Leasing enables business owners to pay for the product as it is being used while the revenue generated by the equipment ‘pays’ for itself. Virtually any other financing demands a substantial down payment, deposit or compensating bank balance. By leasing, business owners can quickly acquire use of the required equipment without major cash outlay.

Leasing can be an especially attractive option given that lease payments can be 100% tax-deductible, which may mean a more rapid write-off for business owners. And because the lease term is generally shorter than the depreciable life of the equipment, payments can be expensed in a shorter duration.

Neighbourhood Dominion Lending Centres has a leasing division – Dominion Lending Centres Leasing – that offers leasing programs providing 100% financing and requiring minimal investment for the ‘purchase’ of the equipment. Business owners can immediately take advantage of the benefits of the new equipment without using existing capital or credit, and continue growing their businesses. As an alternate credit source, leases don’t interfere with established credit lines, which, in turn, expands available working capital. Also, through Neighbourhood DLC a lease arrangement will NOT show up on your credit bureau.

Leasing options include new equipment leasing; used equipment and vehicle leasing; customized solutions through vendor finance programs; and lease-backs – where the lender buys equipment from a business owner and the owner leases it back.

Technology, heavy equipment and trailers, furniture and hospitality equipment, and manufacturing and industrial equipment are just a few examples of leasing options available to business owners. With today’s rapidly changing technology, some equipment can become obsolete relatively quickly. Leasing frequently enables business owners to acquire the new equipment they need without having to keep costly equipment working years beyond its profitable lifespan.

Vendor finance allows equipment vendors to offer customers another financing option besides cash-on-delivery or 30-day terms. On high-ticket items, this can be a major benefit, since it may not be possible for some customers to meet immediate payment terms. By extending the financing option through Neighbourhood DLC Leasing, the vendor provides a choice that allows customers to better maintain their own cash flow.

Vendor finance is also known as vendor leasing and helps build vendor-customer relationships while improving vendor sales volume. Customers can view the vendor as a one-stop shop where they can fulfill their orders and get financing, rather than having to seek financing beforehand from a bank or other lending institution.

With access to multiple lending sources, lease professionals can cater to leasing deals for a variety of credit scenarios ranging from A to C credit quality. Leasing provides known payments over a specified period – helping take the guesswork out of budgeting.

And because Brian Marling of Neighbourhood DLC is also a licensed mortgage agent, he can offer standard equipment leases and creatively structured solutions for seasonal, new or growing companies. Working with someone who is both a lease and mortgage expert enables business owners to even use commercial and residential mortgage and property credit line products, alone or in combination with lease financing, to help achieve the best solutions for their equipment acquisition needs.

Neighbourhood DLC leasing experts can even break up large-dollar transactions into multiple leases across a number of funders to ease and simplify the approval process.

As with any licensed mortgage agent who is also a leasing professional, they work for business owners and consumers – not lenders – ensuring all efforts are made to acquire the best available products and rates with their clients’ interests front and centre.

September 2009

Provided by Brian Marling, Accredited Mortgage Professional, Neighbourhood Dominion Lending Centres, Cobourg 905.372.7222

If you are like many of my clients you have probably never had any formal (or informal for that matter) training/education in the area of Personal Financial Management. And what does that even mean?! Well, unless you were an accounting or commerce major in school, or your parents were Ward & June Cleaver (for all you Leave it to Beaver fans), you probably have arrived at your current financial state (good or bad) more or less by trial & error. And hopefully you are on the positive side of the net-worth equation.

However, the statistics would suggest that the opposite is likely true. The sad reality is that personal finances is still a “taboo” subject in most circles and unfortunately this only serves to exacerbate the problem of having large numbers of people quietly living lives of financial desperation! And the assumption by many is that no one else seems to be going thru this and therefore – shame on me. Nothing could be further from the truth. Perhaps you just haven’t had the proper coaching in the area of Personal Finance.  And as I like to say, “You don’t know what you don’t know” – or translated “Quit beating yourself up”.

It is my firm belief that financial stress is the number one cause of marital and family break-up. This is supported by the fact that Financial Difficulties, and the stress that accompanies them, are still reported as the leading cause of divorce. Nearly every marriage goes through times of  monetary trouble, but with a sound financial plan much of the stress & strain can be alleviated.

The trouble is, many couples don’t even discuss money issues, plan a budget, or set savings aside. And in this society of instant gratification, money problems can quickly escalate. I like to talk to clients about making a Spending Plan as opposed to using that B-word (above) which nobody likes!! And doesn’t a Spending Plan sound more fun than making a B…?! A Spending Plan is simply deciding how you are going to spend the money you make – as opposed to over-spending money you haven’t even earned yet. What most people do not realize is that one day they are going to be a CEO of their own life and probably their family as well and without sound advise…well, good luck with that.

The key is to work together on a realistic spending plan based on your goals. Track your spending and make your dollars go further by sticking to your plan once it’s in place. A Plan offers a step-by-step formula for figuring out how to best use your hard-earned money. Although one of you may be better at spending than the other (is my wife reading this-just kidding), make sure you both offer input.

When you’re sitting down and setting your plan together, make sure you’re not going to be distracted. If you need to drop the kids off at a friend or family member’s house, then plan around that as well. Or, set some time aside after the kids are in bed. Sadly, most people spend more time programming their VCR then they do on planning their Life.

Start by listing your household income, then your household expenses, and review your spending habits. All of this can be done on a pad of paper or on a computer spreadsheet.

Keeping receipts for everything that you spend will enable you to accurately keep track of where your money is going each month so that you can review your plan on an ongoing basis. A critical analysis of your cheque book & the past 6 months credit card statements will be a revealing exercise.

Look at all the areas of your life from entertainment to the type of food you buy, where you buy your food and clothes, and how and where you travel. Also examine your spending personality and adjust if necessary. Are you a saver, a splurger, a spontaneous shopper or a hoarder? Become smarter with your money and avoid impulse buying.

If you find you’re spending a lot of money in one area, such as entertainment for instance, set aside a reasonable amount each month and prepare as a couple to stop spending money in this area once your planned spending has been exhausted.

Planning provides you with the opportunity to re-evaluate your needs and wants. Do you really need the magazine subscriptions, the gym memberships and all the other things you might be involved in as an individual? Although everyone needs some “me time” to wind down, could you not get that by taking a walk or reading a good book you borrowed from the library etc., – get creative.

Following are some tips for addressing common financial issues:

1. If you have built up equity in your home, consider refinancing your mortgage to pay off your debts and start fresh. You will feel much better starting over with a fresh slate, and your plan will help keep you debt free. As Your Mortgage Professional  I will be able to show you exactly how much you will be able to save each month by consolidating your debt. Those savings then go into the Spending Plan.Decide together how you can cut costs and pay down your debts.

1. where you can place a predetermined amount each pay period that you will not touch unless it’s absolutely necessary. This will enable you to put money aside for a rainy day, which should help ease your worries. The goal is to accumulate 6 months of living expenses.Set up a savings account

1. Don’t panic over financial stresses. Sit down together, take a deep breath, and grab a pad of paper to put the issues in writing. To ascertain your needs, visualize your situation. If your financial problems are severe, contact a professional, such as myself, a financial planner, a credit counsellor or bankruptcy trustee to consider your options. Many of these professionals will be able to point you in the right direction when it comes to clearing up your debts. The worst thing you can do is sit back while your debts spiral out of control and your credit score suffers.Contact a professional.

1. Once your financial situation is in order, start planning for the long-term, including sending your children to school and retirement.Set long-term goals.

1. As you accumulate money in your rainy-day account, you will be able to also save for specific purchases – avoiding the buy now, pay later mentality.Save up for big-ticket items.

One of the great joys in my business is assisting my clients in turning around stressful financial situations. These are the kinds of things we discuss on a daily basis with our clients – hopefully before mistakes are made. As Mortgage Professionals we care about your entire financial picture and offer expert advise designed to help you become debt-free as soon as possible and on your way to creating real wealth.

Because Neighbourhood DLC is one of Canada’s largest mortgage teams, we can offer you the absolute best products, service, advice & pricing. Call me today, Brian Marling 905-372-7222 for a Personal & Private consultation.

October 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

I had the priviledge recently of meeting Gail Vaz-Oxlade, the host of the popular Slice TV show “Till Debt Do Us Part”. She was the main speaker at a local fundraiser put on by The United Way  in support of the local Womens Shelter.  It was great to be able to chat with her after everyone else had left and simply affirm that the things we often discuss with our clients on a regular basis are the exact same issues she deals with on her television show – maybe I should get a TV show?!  Anyhow, the popularity of the show and the surprising number of male constituents just goes to prove that it has really hit a nerve in the general population. Plus the fact that the event was packed only underscores to me the tremendous need that exists for sound yet simple financial advise for the masses.

It may seem odd to some that our mandate at The Neighbourhood Mortgage Team is to help people become debt free including their mortgage.  The question I often get is,”But aren’t you in the business of selling mortgages?”.   Of course I am.  However, our ultimate goal is to see our clients become debt free including their mortgage and to begin to create true wealth in their lifetime.  Our mortgage business is primarily sustained by the referrals we receive from existing clients, friends and family.  There will always be a need for mortgages and we feel that the value we add to our clients is our passion to help people get out from under the burden of debt that seems to enslave so many.  And, frankly, it is simply not the banks mandate nor is it in their best interest to see you become debt free – quite the opposite actually.

This excerpt from a recent Globe & Mail publication highlights the debt problem Canadians are facing… Carney warns on debts

Bank of Canada Governor Mark Carney warned Canadians today to curb their enthusiasm for debt. Using particularly strong language, Mr. Carney said in a midday speech that the ratio of household debt to disposable income hit 146 per cent in the first quarter of the year, a record and a level that is closing in on that of the U.S.

Canadian consumer confidence sags

“This cannot continue,” the central bank chief warned, adding that while the net worth of Canadians is about six times the level of average disposable income, asset prices rise and fall but “debt endures.” And despite the “buoyancy” of the real estatemarket, the debt-to-asset ratio among Canadian households is at its highest in more than two decades.

“With Canadians working, but not as much as they would like, they have been borrowing,” Mr. Carney said. “Real household credit expanded rapidly throughout the recession, in contrast to previous downturns, and has continued to grow through the recovery. Canadian households have now collectively run a net financial deficit for 37 consecutive quarters. That is, their investment in housing has outstripped their total savings for over nine straight years. In effect, households are demanding funds from the rest of the economy, rather than providing them, as had been the case through the 1960s, 1970s, 1980s and 1990s.” Household balance sheets are growing “increasingly stretched,” and it’s possible Canadians are beginning to address the issue.

One way that we are trying to help & address the debt issues with our clients is thru our Financial Fitness Seminars. At our most recent one it was evident once again that there are scores of people who need some help to get out of the ‘Debt Rat-Race’.  The problem for many is that they simply do not know where to even begin let alone who to talk to. For some there is a sense of shame and/or embarrassment that goes with their debt. We understand all of these things having gone thru our own financial difficulties in years gone by which is why we feel deeply about the need to genuinely help others. And when you combine our mandate with record low mortgage rates there has never been a better opportunity for us to help you then right now.  Don’t wait another day, or certainly not until rates go up again, before you give us a call. We’ll be glad to help.

Here at Neighbourhood not only do we provide Award Winning Service and the best selection of mortgage products in the country, but we also offer our Free Financial Fitness Seminars and have added Personal Financial Coaching for those who truly desire a change but would like some assistance along the way. If you don’t change something then don’t expect different results.  As always you can call us anytime to discuss how we may be able to help you.

At Neighbourhood, & the home of the Brian Marling Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients and their friends & families and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom.  If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited.

October 2009

Provided by Brian Marling, Accredited Mortgage Professional, Neighbourhood Dominion Lending Centres, Cobourg 905.372.7222 

“Are we moral cowards or mathematical illiterates? Shouldn’t we accept delayed gratification as a virtue and not a punishment? Using bad debt to take the waiting out of wanting eventually leaves you wanting.” – Jon Hanson

 “The lovely toy so fiercely sought hath lost its charm by being caught” – Lord Byron

 By the time you read this article we will have already digested the piles of mashed potatoes, turkey, stuffing and all the other wonderful additions that make up our Thanksgiving celebrations. And as much as I personally love this time of year I want to ask you if you took the time to reflect on all the blessings in your life and the numerous people & things you have to be thankful for?  The reason this is such a critical exercise for all of us (and not just at ‘Thanksgiving’), is because for the rest of the 364 days of the year we are bombarded with the message thousands of times daily that “we can have it all now”!

What does this message really produce? As our culture has bought into it the result is an entire nation that has embraced a “consumer entitlement mentality”. Why wait until you can actually afford it when you can have it all now. Sounds good until you wake up one day & realize the prison you have created for yourself. Not to mention the fact that you have likely  ransomed your future. The progression goes something like this…from awe, to I’d like to have that, to I must have that, and finally to I am entitled to that! Where entitlements are perceived, neither common sense nor actual need is considered.

I guess the problem with delayed gratification is that it isn’t a very exciting or sexy notion. As a political platform the promotion would go something like this – Delayed Gratification; spend less than you make; provide for your own future; put back more than you take; continue your own self-education; maintain personal responsibility and self-government.  But what is the alternative…get it all now; spend more than you make; rely on government and company benefits for your future; take more than you put back; do not maintain personal responsibility for anything. Hmmm, maybe our parents and grandparents were right after all when they said things like, “If you don’t have the cash to pay for it then you can’t afford it”.

Isn’t this where the concept of Thanksgiving comes in? Shouldn’t our focus be on our daily blessings and the things we do have, as opposed to always wanting more. If we fall into the entitlement trap when is enough ever enough? And before we start feeling too sorry for ourselves economist Thomas Sowell points out, “Most Americans (I think Canadians too) living below the official poverty line have air-conditioning, microwaves and VCRs. About half have a car or truck.”.

Where I see this in my business is when clients who could otherwise afford to purchase their own home are restricted from doing so because they have made poor financial decisions in the past. Most of those decisions involve the purchasing of STUFF that could have been delayed if only they understood the consequences. A young couple in my office recently, who understand delayed gratification, were commenting with wonderment at why anyone would spend $X per week for a television they are renting when they could simply save the same amount of money for a few months and pay cash and own it. I think they get it!

“We derail the very success we seek when we step off the path to pretend that we have arrived. The inability of the Consumerati (pretenders) to delay gratification keeps the cash drawers of our merchants overflowing. The very essence of delayed gratification is to stay the course until we meet with success uncommon to those who cannot delay their desires.” – Jon Hanson

At Neighbourhood we care more about you than we do about the ‘deal’. That is why our clients have come to trust us and recommend us to family and friends. That is also why the people of this great community have made us the Readers Choice Award Winners on more than one occasion. Our mission is to continue to earn your trust as we continue to care.  

 I am thankful to Jon Hanson author of ‘Good Debt, Bad Debt” for some of the inspiration behind this article.

May 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

We continue to benefit from one of the best mortgage environments in history. Take a look at the interest rates on mortgages these days. Now look at what you’re paying on your credit cards and other debts. You can actually power down your debt load faster by pulling together your credit cards, car loans or any other high-interest debt and rolling everything into a new or existing mortgage. This can be a great money-saving strategy (see illustration below).  The benefits of pooling your debt are immediate and long-lasting: improved cash flow; fewer payments; a brighter credit picture; and big savings on your overall interest costs. If you have equity in your home, there is no reason to be holding large amounts of high-interest debt. The right refinancing package can help put an end to the monthly squeeze of too much credit card debt or too many loans.

Unfortunately, the stress that can be created from debt in a marriage, or family, ends far too often in relationship break-up. Allow an expert like myself to evaluate your situation before it is too late.  I can assess your situation if you are worried about penalties associated with breaking your current mortgage. The savings each month often far outweigh any penalties. You can either use these savings to ease your monthly cash flow or apply some of it to hammer down your debts faster than you thought possible. For instance, if you put $450 of that cash flow into your mortgage payment, you’ll reduce your amortization from 25 to 15 years!  As always, I’m just an e-mail or phone call away if you want to discuss debt management or anything else!

W hat can you do if the relationship is already in the process of dissolving?  We all know that marriage isn’t always forever. And when a separation occurs, a home is often involved. Since most couples have a joint mortgage – one where both names are on the mortgage and title of the home – when separation or divorce proceedings occur, many wonder what will happen with the home. When the marriage comes to an end, there are two obvious options concerning the home: 1) sell the property and split the proceeds according to your agreement and go your separate ways; or 2) one person buys the other party out of the mortgage and the title of the property.  The first option is a straight-forward transaction where you put the house up for sale, sell and split the proceeds. The second option, however, is slightly more complicated.

The decision between the options is a personal one borne out of the specific circumstances of the parties involved. Perhaps there are young kids involved that need to stay in the house, the market is down and there will be a loss on the property that neither party can afford, one party can afford to buy the other party out, etc.

Once the decision is made, how do you go about buying the other person out of a mortgage?  Well, essentially, you are refinancing your mortgage using a single income (the person who is buying the other party out of the house) and qualification, versus the original purchase, which was based on joint income and qualification. 

If you are the one buying your partner out, the first step is to ensure that you can afford the mortgage payments. This is imperative because the lender will ask for proof that you are capable of covering the mortgage in order for you to apply on your own. In addition to covering the mortgage amount, you will have to come up with whatever dollar amount you have agreed on to buy the other partner out. This may come out of the equity in your home if it’s sufficient.

In essence, if you can afford the mortgage on your own, the most common means of buying out your partner post-separation and transferring title out of the joint name and into your name, is to refinance. I can help you through each step of this process. If you are not in a financial position to buy your ex-partner out of the house, and you agree to both stay on title and have payment arrangements, there is one warning to be taken very seriously. Just because one person is responsible for the payments (even with a court order), if the mortgage goes into default, both parties on the mortgage will be affected.

The most important piece of advice when dealing with a mortgage during a separation is to become informed. Know your options, talk to professionals about your options, and make an informed decision regarding your home and mortgage.

Here at Neighbourhood, & the home of the Brian Marling Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients and their friends & families and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom. If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited.

June 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

Blondin was a world famous tight-rope walker in the early 20^th Century. One of his more famous feats was a walk across Niagara Falls. When he arrived at the other side, as the story goes, the crowd naturally went wild with cheers and applause as they chanted his name, “Blondin! Blondin! Blondin!”.   Blondin, being a great showman, played to the crowd as he asked them , “Do you believe I can make it back across to the other side?”  The crowd went nuts and yelled “Yes,Yes”. “This time”, he said, “I am going to carry someone on my back. Do you believe I can do it?”.  At this point the crowd went into a frenzy with their positive affirmations as they couldn’t wait to see it.  Blondin then shouted to the crowd, “And who will be that person?”.  Of course the crowd became uncomfortably quiet.

Not many of us can walk a tight-rope, certainly not across Niagara Falls. However, when it comes to our finances it seems that many have risen to the occasion and quite enjoy performing the High-Wire Act. In fact, recent statistics have indicated that Canadians on average have a debt-to-disposable income ratio of 1:145. This means that for every $1.00 of disposable income we are spending $1.45. How is that even possible!! Enter the wonderful & mysterious world of banking, credit cards, buy now pay later, you deserve it all, blah,blah,blah.  Now that we are in this mess, how does one get out.?

At the risk of sounding repetitive, which is necessary until one ‘gets it’, there are a few simple secrets that I will share with you now.  From a philosophical viewpoint, which is a necessary starting point, I borrow from one of our Ancient scripts which says that the starting point is to be content with what you have. What a simple yet powerful thought.  Perhaps easier said than done especially in a culture which constantly tries to make us feel inferior if we do not have the latest, greatest, fastest, bestest whatever!  However, regardless of whatever the cultural message is, it is a choice we make to be satisfied or not. So then the starting point must be Contentment. Which is not to say that we shouldn’t strive for a better quality of life or that it’s somehow wrong to desire nicer things in life, but if we aren’t first of all content & happy where we are then it is unlikely that more will make us so. This point was driven home to me once again when I went down to Victoria Park earlier this week to watch the Watoto African Children’s Choir. What an inspirational display of the wonder of the human spirit. Here is a group of orphaned children whose parents mostly died of AIDS displaying the most amazing joy I have seen in a long time. What a tremendous personification of peace and contentment I witnessed. Yet who could have more reason to be discouraged, dismayed or disillusioned with life. Clearly they have chosen a different path and have obviously learned the first secret of contentment, while at the same time striving for  a better life. Not only did I find it inspirational but it also helped me to gain perspective once again.   

Next is to be aware that how much we earn is not as important as what we do with it. That is why the 70/30 Principle works no matter what your income is. What is the 70/30 Principle?  It is the next secret to successful living. The 70/30 principle goes like this: divide your after tax income into 2 parts – 70% in one pool and 30% in another. There are 3 parts to the 30% pool:  10% must go into savings, 10% must go into some kind of investment, and 10% must be given back to your church or favorite charity.  The 70% pool is for everything else – rent/mortgage, food, clothing, insurance, etc.  If you commit to this plan you will create real wealth in your lifetime. The challenge is deciding to live differently than you have been unless of course you have already arrived.

“But I’m barely paying my bills now and almost always run out of money before the end of the month.”, you say.  My response – how is that working for you? Perhaps now is the time that you decide to live differently. The concepts I have shared above are simple to follow. But I never said it would be easy. If you want what most people have then continue to do what most people do. But if you truly desire change then it must start with you. 

Here at Neighbourhood not only do we provide Award Winning Service and the best selection of mortgage products in the country, but we also provide our Free Financial Fitness Seminars and have also added Personal Financial Coaching for those who truly desire a change but would like some assistance along the way. If you don’t change something then don’t expect different results.  As always you can call us anytime to discuss how we may be able to help you.

Here at Neighbourhood, & the home of the Neighbourhood Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients and their friends & families and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom. If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited.

July 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

Last month I shared with you an historic opportunity to better your personal finances, and predictably there are many who could have taken advantage but haven’t  yet. Although interest rates have started to creep up in recent weeks, rates and property prices remain on the low side, making now an ideal time to purchase a home, vacation or rental property, or refinance your mortgage to access equity in your current home to do some renovations, consolidate debt or put towards your children’s education.

To give you an idea of the savings you could capitalize on in the current market, following is an example of a home that cost $250,000 in November 2008 (just months ago) and what it’s worth now, as well as the average change in interest rates, and total savings based on a 25-year amortization:

Using the above example, you would have saved $113,000 in interest payments alone over 25 years. Imagine the comparison using a higher-end home as an example.

When does it pay to break your mortgage?

If you’re considering refinancing your current mortgage to take advantage of lower rates, your mortgage professional can determine if this will benefit you long term. In some cases, the penalty can be quite substantial if you aren’t very far into your mortgage term.

People often assume the penalty for breaking a mortgage amounts to three months’ interest payments so, when they crunch the numbers, it doesn’t seem so bad. In most cases, however, the penalty is the greater of three months’ interest or the interest rate differential (IRD).

The IRD is the difference between the interest rate on your mortgage contract and today’s rate, which is the rate at which the lender can relend the money. And with rates so low these days, the IRD tends to be greater than three months’ interest. Because this is a way for banks to recuperate any losses, for some people, breaking and renegotiating at a lower rate without careful planning can mean they come out no further ahead.

While breaking a mortgage and paying penalties based on the IRD can result in a break-even proposition in the short term, if you look at the big picture, you’ll see that the true savings are long term – as we know that rates will be higher in the years to come. Your current goal is to secure a long-term rate commitment before it’s too late, and here lies the significant future savings.

By refinancing now and paying off your debt, you can put yourself and your family in a better financial position.

Paying your mortgage off faster

It’s important to also keep in mind that by refinancing you may extend the time it will take to pay off your mortgage. That said, there are many ways to pay down your mortgage sooner. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

You can also change the way you make your payments by opting for accelerated bi-weekly mortgage payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage.

If, for instance, you have a $100,000 mortgage, an interest rate of 5% and an amortization period of 25 years, your monthly mortgage payment would be $581.60 and your total payments for a year would be $6,979.20 ($581.60 x 12).

To understand the savings accelerated bi-weekly mortgage payments can make, take the monthly mortgage payment of $581.60 and divide it by two ($581.60 ÷ 2 = $290.80).  Next, take that payment and multiple it by 26 to arrive at your total payments for the year ($290.80 x 26 = $7,560.80).

As you can see, by using the monthly mortgage payment plan, you’ve made payments totalling $6,979.20 for the year, while using the accelerated bi-weekly mortgage plan you’ve made payments totalling $7,560.80 – a difference of $581.60. 

Using this example, you would reduce the amortization on your $100,000 mortgage from 25 years to just over 21 years and your total savings on interest over the life of the mortgage would be just over $12,000.

Here at Neighbourhood not only do we provide Award Winning Service and the best selection of mortgage products in the country, but we also provide our Free Financial Fitness Seminars and have also added Personal Financial Coaching for those who truly desire a change but would like some assistance along the way. If you don’t change something then don’t expect different results.  As always you can call us anytime to discuss how we may be able to help you.

Here at Neighbourhood, & the home of the Brian Marling Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients and their friends & families and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom. If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited.

January 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

With the high cost of holiday gift-buying and entertaining now behind you, this may be the perfect time to get the New Year off on a positive note by refinancing your mortgage and freeing up some money to pay off that high-interest credit card debt.

It’s amazing how many people still do not understand the relationship between their various financial obligations and how important it is to have them structured properly. Interest (especially compounding interest) is a very powerful force that is either working for you or against you – which is it for you?? An analysis of your overall financial picture including all assets and liabilities can tell quite a tale in most cases, and often my clients are amazed at the immediate positive difference a restructuring of their debt can have on their monthly bill payments and overall financial health.  Just this week we had another great ending to a client consultation where we were able to restructure a clients finances with the net result being a positive monthly increase in cash of $1,500, all high interest debt eliminated and on the road to paying off their mortgage sooner!!

Sound too good to be true?  Not at all…it’s just about the numbers.  In most cases there will be a penalty to break your current mortgage, but don’t get hung up on that. If it makes sense financially then guess what – It’s All About The Numbers – and the numbers don’t lie! The amount of the penalty is absolutely irrelevant as long as the end result is a better over-all financial position. 

One of the great things about taking advantage of an independent Mortgage Professional, like myself,  is that we do not work for the lender but for you. Therefore, if I can restructure your finances and place your mortgage with a different more favourable lender what difference does it make who the lender is?  Loyalty is one thing, but mis-placed loyalty is another. In other words, no one should be more concerned about your financial well being then you are, which means at the end of the day it shouldn’t matter to you who is holding your mortgage as long as it is benefitting you financially. Another area for comparison, and in order to make my point, is the whole topic of buying gas for your car. Don’t most of us buy it where we can get the best deal since it is the same product everywhere?  But what if I told you that you could buy it for 8-10 cents cheaper per litre than the lowest price available every time you filled up, and it wouldn’t mean spending any more than you already spend. Call me & I’ll tell you how.  The point is, once again, that you ought to be the person most concerned about your own financial well being. Your loyalty should lie with what’s best for you & your family.

You may find that taking equity out of your home to pay off high-interest debt associated with credit card balances can put more money in your bank account each month.

And since interest rates are at “emergency” levels – low rates never before seen by your parents and even your grandparents – switching to a lower rate may save you a lot of money, possibly thousands of dollars per year.

Once again I would like to stress, as I have been doing this past year, that these “Emergency Rates” will not last forever. Now is the time to take action and avail yourself of an opportunity that you probably will never see again. If your current mortgage interest rate is anywhere near 5% or higher then you need to call me before your opportunity is gone. The question is not if rates are going to rise, but when.

With access to more money, you will be better able to manage your debt. Refinancing your mortgage and taking some existing equity out could also enable you to make investments, go on vacation, do some renovations to take advantage of the Home Renovation Tax Credit that expires February 1^st or even invest in your children’s education.

If homeowners fail to take the time to thoroughly research their options through a mortgage professional and, instead, simply sign renewal offers received from their bank, credit union or other lender, they could end up paying thousands of dollars more per year in interest. Simply by shopping your mortgage with a qualified mortgage professional, you can access the banks as well as other lenders that you may not have considered, but which can often offer interest rate specials or other attractive terms.

By refinancing now while rates are still low and paying off your debt, you can put yourself and your family in a better financial position. Hopefully, if we have learned anything in the past year and a half as far as our finances is concerned, it is that nothing is for certain. Please take the time to call me and I will make sure that our time spent together is profitable.  And don’t forget to ask me about our Cheap Money Strategy that we are employing with many of our clients right now.

February 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

Question: What do the following have in common: driving a vehicle worth more than your annual gross income; paying 20% or more on credit card balances while the cash to pay them off sits in a “savings” account paying you next to nothing; buying a home which requires both incomes to service and which also puts you at the maximum as far as debt ratios go; etc, etc, etc.??  Answer: DUMB financial decisions.

I’m not trying to intentionally insult the reader of this article, but if the shoe fits…  It only takes a little superficial observation to figure out that there are a boatload of people making and being enticed to make poor financial decisions all the time. Have you seen the number of payday loan type operations popping up everywhere? These are places that basically sell you your future-not-yet-earned income and charge you a hefty fee to do it. And the ones who are partaking seem to be the ones who can least afford to do so. If you are already struggling to make ends meet, then how does this help?  Or what about those You-deserve-it-now-why-wait establishments that will happily let you pay several times what an item is worth so long as you have a pulse and can sign on the dotted line? I could go on with a myriad of examples in the same venue but I believe I have made my point.

And the point is this: in a consumption based economy you will always be tempted to overspend and be made to feel good while you are doing it.

Part of the problem, in my opinion, is that it is extremely difficult to wait for almost anything in a culture which measures time in nano seconds! Combine that with the easy availability of credit (i.e. they will give you just enough to hang yourself) and it’s no wonder that people are in the financial mess that they are in. I often share with my clients a simple illustration to make the point that debt can become a life-long slave master… I show them that a small credit card balance of $500 with an 18% interest rate will take over 7 years to pay off if only minimum payments are being made!! It doesn’t take a rocket scientist to then figure out that you will likely never get out of debt if your debt load is more significant and in the neighbourhood of $15, 20 or 30 thousand dollars of consumer debt and making only minimum payments.

So what is at the root of our bad financial decisions? Unfortunately, this article alone could not begin to address the long list of possible culprits which could include everything from greed to ignorance. Not to mention that we really have never had any sound teaching in our schools on a subject so important as personal financial management. But why not? We’re not all going to be Dr’s, or Engineers, or whatever… but we will all be the CEO’s of our own families and required to make important financial decisions. So if we’re not taught in school or our parents didn’t do a good job in this area, then how do we manage? My answer – not very well. Especially when you realize the current Canadian statistic which tells us that average Canadians have a 1.40 debt to disposable income ratio. Meaning that for every dollar of disposable income that we have, we have $1.40 worth of debt. What’s wrong with this picture?! When will we end the insanity?

As referenced many times in past articles our parents & grandparents didn’t seem to have the same debt issues. Primarily, I believe, because they did not ransom their futures for temporary pleasures which they couldn’t afford. Also, credit in the form of plastic just wasn’t as available, or not available at all. Therefore they lived by different creeds such as, “Save until you can afford it”, “Live within your means”, and other such foreign concepts. And the results of such archaic concepts? Well take my parents for example: never earned much more than $45K per year combined but currently live in a mortgage free home, drive a payment free new van, have investments in the bank and do not need to rely on government or anyone else. All on $45K per year – cudos Mom & Dad. And thanks for the example.

Here at Neighbourhood, & the home of the Brian Marling Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients and their friends & families and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom. If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited.  Together we can turn Uncommon Cents into common sense and begin to head down the path of financial well being.

August 2010

This article is provided by Brian Marling of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

The answer to the question of whether to use any excess cash for investments or debt repayment seems to go back & forth on a regular basis. However, the scale seems to be tipping in one direction since the financial crises hit in the fall of ’08.

Hopefully if we learned anything from the past couple of years it is this – there is no such thing as a sure thing when it comes to investments.  So, what to do? Invest or repay debt? Perhaps this excerpt from a recent Toronto Star Article will help shed some light for you…

Canadians are learning to save more, invest more conservatively and de-risk their retirement account. So, despite what your personal conclusion might have been last time you thought about the smack-down between RRSPs vs. mortgages, the economic equation has recently tilted in favor of paying down debts vs. building up assets, but only for those of you with low tolerance for any investment risk.

As you probably noticed, despite recent moves by Mark Carney and the Bank of Canada to nudge the numbers upward, the interest rate being earned from GICs, term deposits and government bonds remains pathetically low.

For those risk-averse savers who abhor the volatility of the stock market, money is earning 3 per cent – if they are willing to lock in for a few years—and less than 1 per cent on demand deposits and savings accounts. Hey, did you ever hear of the rule of 72? Guess how long it takes money to double if your retirement’s nest egg is earning 1 per cent per year? Yes. You guessed it. 72 years.

Do the math. If you are paying 6 per cent, 5 per cent or even 4 per cent on your mortgage – which is on the liability side of your personal balance sheet – but your financial assets are (only) earning 1%, 2% or 3%, then you are effectively destroying wealth. It’s the debt equivalent of constantly buying high and then selling low in the stock market. Once you think about for just a few seconds, you realize it’s dumb.

Here is how to think about the tradeoff between paying down your mortgage versus saving in your RRSP or TFSA. If your mortgage is costing you 5 per cent, then every dollar you don’t invest but instead use the money to pay-down debt will earn the said 5 per cent. If the debt clock is ticking at 10 per cent or 15 per cent like many credit cards, the argument for raiding your retirement accounts to eliminate the debt is even stronger.

Of course, if your investments – RRSPs and the like – are invested aggressively under the hope and expectation that they will earn more than mortgage rate you are paying or current bond yields, then you can justify not paying down your mortgage. After all, borrowing at 5 per cent makes sense if you expect to earn much more.

However, you have to be able to look yourself in the mirror and say: “Yes, I think my assets will earn more than my liabilities are costing me.” Remember, even the most delusionary deflationary pundit doesn’t forecast a 5 per cent gain on your Government bond, or GIC or cash that is only earning 3 per cent per year interest.

Don’t take my word for this. A recent article by two economists at the University of California at Berkeley made the same point, albeit with reference to a U.S. audience. They examined more than 15,000 household financial records and determined that over a quarter of those households should completely abandon equity market participation or stock ownership because of the high interest rates they are paying on their large portfolio of debts.

To quote their words in a scholarly journal called the Review of Financial Studies, “Households with high interest debt have a reduced benefit to equity participation and in many cases should not own any stocks…repayment of outstanding debt almost always yields a higher rate of return than many of the safe (investment) assets.”

This might be quite obvious to some – pay down your credit card debts, duh! – but the fact 25 per cent of their sample isn’t doing it right is downright shocking. Yet I suspect the percentages of sub-optimal behaviors might even be higher in Canada.

Many Canadians might be better-off forgoing the immediate tax deduction from the RRSP contrinution – which will eventually have to be paid back – and instead pay down their high interest debt. An even stronger case can be made against TFSA contribution, again, if your debts are ticking at high rates but you assets are growing (or even shrinking) at low rates.

Ok. Here’s the bottom line. It’s time to look at both sides of your personal balance sheet at the same time. Add up all your debts and compare the interest cost of all your liabilities against the interest you will be earning on your retirement investments, based on your current asset allocation mix between stocks and bonds.

If the former is greater than the latter, it’s time to pay down some debt and forgo the investment plan contribution. Oddly enough, not contributing to your RRSP or TFSA might make you wealthier in the long run. …

In light of the above article, and combined with current low mortgage rates, there has never been a better time to consolidate your debt and finally get on track for the future!

Here at Neighbourhood not only do we provide Award Winning Service and the best selection of mortgage products in the country, but we also provide our Free Financial Fitness Seminars and have also added Personal Financial Coaching for those who truly desire a change but would like some assistance along the way. If you don’t change something then don’t expect different results.  As always you can call us anytime to discuss how we may be able to help you.

Here at Neighbourhood, & the home of the Brian Marling Mortgage Team, we are concerned for the total well-being of our clients. That’s why we are taking the years of experience from our award winning office and offering a series of  FREE Seminars to our clients, their friends & families, and to the public at large. The seminars, entitled ‘Financial Fitness’, will be offered free of charge and will cover all the secrets of successful personal financial freedom. If interested please call our office at 905.372.7222 to reserve your spot as seating will be limited. The next Financial Fitness Seminar will be Sept 28/10.