Challenged with the choice of Fixed versus Variable rate. I do my best in this article to help you understand the difference and what my opinion is on what you should do. Keith Uthe - Mortgage Alliance Enrich Mortgage Group
The document discusses making financial decisions and planning for retirement. It notes that sharing more information can help people make better decisions with greater clarity and confidence. It asks if readers believe future tax rates will be higher, lower or the same. And it encourages taking advantage of opportunities to maximize wealth and minimize taxes.
Balance transfer credit cards allow cardholders to transfer existing credit card balances to a new card that offers a lower promotional interest rate for a set period of time, usually 6-12 months. The process involves applying for a new credit card with a balance transfer offer, then requesting the transfer on the application. This can save on interest charges and help pay off debt faster. It's important to avoid spending on the card after transferring the balance, as any new spending will accrue interest at the higher post-promotional rate. Cardholders should choose offers with the longest 0% period and lowest fees, and pay more than the minimum due each month to eliminate debt before the promotional rate expires.
This document discusses how life insurance strategies can help mitigate taxes and efficiently transfer wealth by moving excess capital from a taxable environment to a non-taxable one. It provides an example of a couple investing $100,000 annually for 10 years into a tax-exempt corporate owned whole life insurance policy, which would result in over $8.5 million in their total estate after tax, compared to around $1.6 million if they invested in a fixed income portfolio. The document stresses acting now given recent tax rate changes and upcoming changes to insurance legislation that will affect the tax benefits of such strategies.
This structured note offers a way to protect an investment on Disney's stock.
Although it caps your profits at 7.50% annually, it sets a barrier, that protects the investor up to a 50% downfall of the stock.
This document summarizes a guaranteed income rider that can be added to certain fixed annuities. It provides lifetime guaranteed income without losing control of your account. It ensures you will never outlive your money through guaranteed lifetime withdrawals based on your age. The rider offers two interest rate deferral options, with Option 2 typically being better. It allows flexible income withdrawals at any time after the first year as early as age 50. The percentages shown are the guaranteed percentage of your account that can be withdrawn annually for life. An index annuity with this rider is positioned as providing more guarantees than other retirement investment options like pensions, stocks, or variable annuities.
This document discusses immediate annuities, which provide a guaranteed monthly income for life in exchange for an initial deposit. It explains that the monthly payment amount is calculated based on the deposit amount and the purchaser's estimated life expectancy. While immediate annuities guarantee lifetime income, any remaining deposit is not returned upon death. The document also outlines some options for immediate annuity contracts, such as single life, joint life, period certain payouts, inflation adjustments, and remainder guarantees.
Final salary pension transfer - Time For A Re-ThinkPhil Smith
Where advice would historically have been against a final salary pension transfer times have changed. For many it is worth a re-think to decide if a pension transfer may work for them.
Will mortgage changes cause problems for home buyers(finished)RandyBett
The document discusses recent changes to Canadian mortgage regulations that may impact home buyers and owners. Specifically, it mentions that the maximum amortization period for government-insured mortgages has been reduced from 30 to 25 years. It also notes the maximum amount Canadians can borrow against their home equity has been lowered from 85% to 80%. These changes may make it more difficult for first-time home buyers to qualify for a mortgage or for existing homeowners to refinance or switch lenders. The full impact on the housing market remains uncertain.
The document discusses making financial decisions and planning for retirement. It notes that sharing more information can help people make better decisions with greater clarity and confidence. It asks if readers believe future tax rates will be higher, lower or the same. And it encourages taking advantage of opportunities to maximize wealth and minimize taxes.
Balance transfer credit cards allow cardholders to transfer existing credit card balances to a new card that offers a lower promotional interest rate for a set period of time, usually 6-12 months. The process involves applying for a new credit card with a balance transfer offer, then requesting the transfer on the application. This can save on interest charges and help pay off debt faster. It's important to avoid spending on the card after transferring the balance, as any new spending will accrue interest at the higher post-promotional rate. Cardholders should choose offers with the longest 0% period and lowest fees, and pay more than the minimum due each month to eliminate debt before the promotional rate expires.
This document discusses how life insurance strategies can help mitigate taxes and efficiently transfer wealth by moving excess capital from a taxable environment to a non-taxable one. It provides an example of a couple investing $100,000 annually for 10 years into a tax-exempt corporate owned whole life insurance policy, which would result in over $8.5 million in their total estate after tax, compared to around $1.6 million if they invested in a fixed income portfolio. The document stresses acting now given recent tax rate changes and upcoming changes to insurance legislation that will affect the tax benefits of such strategies.
This structured note offers a way to protect an investment on Disney's stock.
Although it caps your profits at 7.50% annually, it sets a barrier, that protects the investor up to a 50% downfall of the stock.
This document summarizes a guaranteed income rider that can be added to certain fixed annuities. It provides lifetime guaranteed income without losing control of your account. It ensures you will never outlive your money through guaranteed lifetime withdrawals based on your age. The rider offers two interest rate deferral options, with Option 2 typically being better. It allows flexible income withdrawals at any time after the first year as early as age 50. The percentages shown are the guaranteed percentage of your account that can be withdrawn annually for life. An index annuity with this rider is positioned as providing more guarantees than other retirement investment options like pensions, stocks, or variable annuities.
This document discusses immediate annuities, which provide a guaranteed monthly income for life in exchange for an initial deposit. It explains that the monthly payment amount is calculated based on the deposit amount and the purchaser's estimated life expectancy. While immediate annuities guarantee lifetime income, any remaining deposit is not returned upon death. The document also outlines some options for immediate annuity contracts, such as single life, joint life, period certain payouts, inflation adjustments, and remainder guarantees.
Final salary pension transfer - Time For A Re-ThinkPhil Smith
Where advice would historically have been against a final salary pension transfer times have changed. For many it is worth a re-think to decide if a pension transfer may work for them.
Will mortgage changes cause problems for home buyers(finished)RandyBett
The document discusses recent changes to Canadian mortgage regulations that may impact home buyers and owners. Specifically, it mentions that the maximum amortization period for government-insured mortgages has been reduced from 30 to 25 years. It also notes the maximum amount Canadians can borrow against their home equity has been lowered from 85% to 80%. These changes may make it more difficult for first-time home buyers to qualify for a mortgage or for existing homeowners to refinance or switch lenders. The full impact on the housing market remains uncertain.
A critique of treasury whitepapeer on corporate bond spot curve for pension d...Pim Piepers
1) The document critiques a Treasury White Paper proposing to use a corporate bond spot yield curve to discount pension liabilities, arguing this is not accurate.
2) While a spot yield curve in theory matches rates to payment dates, corporate zero-coupon bonds do not exist in meaningful quantities and have credit risk, requiring instead use of risk-free Treasury rates.
3) Averaging rates over 90 days, as proposed, still does not provide accurate current information given interest rate volatility, and smoothing rates compromises accuracy of liability measurement and contribution requirements.
1) Effective cash flow management involves measuring and projecting cash flows, managing receivables to encourage timely payments from customers, and prudent timing of purchases.
2) Preparing regular cash flow projections and monitoring actual performance against projections is important to identify potential shortfalls.
3) Even profitable businesses can face cash flow problems if costs are incurred before payment is received, so it may be necessary to delay large orders or request deposits from customers.
At RL360° we love to make life simple for advisers. It’s not
always an easy task, but with the Quantum, Paragon, Oracle
and LifePlan fund range we believe we have.
This document provides information about obtaining a mortgage as a contractor. It discusses the types of mortgages available, including repayment and interest-only options. It also covers how much borrowers can typically get, the deposit needed, and fees involved in the mortgage process. Additionally, it addresses some of the hurdles contractors may face and how a specialist broker can help overcome them by presenting documentation correctly to secure appropriate financing.
Several scam websites have been suspended that were misleading people about accessing their pension funds before age 55. The National Crime Agency has suspended around 18 pension scam websites as well as those using text messages and cold calls. Normally people cannot access pensions before 55 unless seriously ill, but scammers were enticing people to access funds early against the rules. Managing frozen pension plans still requires active management and planning like active plans, reviewing strategies for funding, investments, benefits and finances. Pension plans may be frozen to minimize total obligations, and companies will need plans for covering shortfalls if underfunded and making lump sum payouts.
Tax letter overlooked strategy - transfer policy ownershipontario lifeline
relates to Fair Market Valuation of individual life policies in Canada either for transfer to individual's professional or business corporation or donation to a charity
The document proposes a financial guarantee program for commercial and mixed-use real estate mortgages in Pennsylvania, whereby a borrower can obtain a mortgage for 100% of a property's value by purchasing a guarantee at around 3% of the purchase price to cover the down payment, allowing lenders to make loans with only their usual 60-80% risk while stimulating the real estate market.
The document provides information about recent changes to mortgage and finance regulations in Australia. The Australian Prudential Regulatory Authority (APRA) has influenced lenders to be more prudent, which will impact the property market. The state budget removed the $3,000 First Home Owners Grant for established homes, though stamp duty concessions remain. The document also provides contact information for a finance broker and answers a question about how credit scores are calculated based on credit history, applications, and accounts.
This document discusses four important financial issues for retirees: generating sufficient retirement income, maintaining affordable health coverage, maintaining independence at advanced ages, and best leaving assets to heirs. It provides information on investing retirement funds for higher returns than savings accounts to cover health and long-term care costs if needed. The document also discusses Medicare options and the importance of supplemental coverage, as well as factors to consider regarding annuities and long-term care insurance due to the high likelihood of needing long-term care services.
This document discusses annuities as safe money products that can help preserve wealth and provide financial growth and secure retirement. It provides information on different types of annuities including fixed annuities, which offer guaranteed minimum interest rates and tax advantages, and variable annuities, which carry investment risk. The document outlines benefits such as tax deferral, death benefits, and guarantees as well as factors to consider like fees, liquidity, and maturity dates when evaluating annuities.
Financial Guarantee 1[1] Music [Recovered] 5 01 09BPANGEL13
The document proposes a financial guarantee program for commercial and mixed-use real estate mortgages in Pennsylvania. It would provide down payment guarantees through surety bonds or policies, allowing borrowers to obtain full financing from lenders rather than pay a large down payment themselves. The program would benefit borrowers by avoiding draining their cash, lenders by enabling full loans with minimal added risk, insurers through premiums, and the state via increased real estate transactions stimulating the economy.
This document discusses strategies for using a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, in retirement planning. It summarizes that tapping home equity through a HECM can help offset inflation risks and stabilize retirement portfolios. It then presents three scenarios comparing a retiree's outcomes with and without a HECM: 1) No HECM used, 2) Refinancing existing mortgage into a HECM line of credit, and 3) Paying off mortgage and establishing a HECM line of credit. A Monte Carlo analysis shows that using a HECM through either strategy 2 or 3 increases the probability of meeting retirement goals and maintains a higher level of available wealth over 30 years
A great presentation on HECM mortgage products for consumers, realtors and financial planners. Baby boomers need alternatives and they need them now. Call me to discuss if you are in Miami Florida
This document provides answers to the top 10 questions for buy-to-let borrowers from St Georges Finance. It addresses questions about obtaining financing for new builds, flats above commercial units, HMO properties, limited companies, borrowers with income below £25k, ex-local authority properties, properties requiring refurbishment, how much can be borrowed based on loan-to-value and interest coverage ratios, typical timeframes to obtain funds, differences between interest rates, and how to ensure getting the best mortgage deal. St Georges Finance is an independent specialist that can access the entire mortgage market to find clients the best options.
This document provides information about income protection insurance, including:
- Income protection insurance provides a monthly income if you are unable to work due to illness or injury, to help pay bills until you can return to work or retire.
- Statutory sick pay only lasts 28 weeks and is usually much less than full earnings. Income protection can help cover lost income after statutory sick pay ends.
- Coverage amounts for income protection are usually 50-65% of pre-tax earnings to replace lost income while adjusting for any state benefits received.
The document provides information on retirement planning and debt optimization strategies. It discusses developing a realistic picture of retirement income and expenses, estimating sources like Social Security and pensions and factoring in healthcare costs. It suggests living for 6 months on projected retirement income to determine if it's realistic. It also outlines strategies to pay off debt, like paying more than minimums, focusing on highest interest rates first, or consolidating with a lower rate loan. While the strategies make sense theoretically, it can be difficult to implement them fully in practice due to competing financial needs.
The document provides information about a debt settlement training program from Simplified Debt Solutions. It outlines the training and support provided to affiliates to help consumers eliminate debt through negotiated settlements. It also addresses frequently asked questions about the debt settlement process and alternatives like bankruptcy, debt consolidation, and credit counseling that clients should reconsider.
Businesses may prefer debt financing over equity financing for several reasons:
1) Debt financing allows businesses to maintain full ownership over their company and avoid giving up partial ownership to investors.
2) Debt financing provides tax benefits as principal and interest payments are tax deductible business expenses.
3) After accounting for tax deductions, the effective interest rate of debt financing can be lower than the stated interest rate from lenders.
4) Debt financing is more accessible than equity financing, with over 99% of businesses using debt in the form of loans and lines of credit to obtain capital.
I love when I am able to be there to support my clients and in cases like this pick up the pieces and put them all together to solve their financing puzzle.
Calvert Home Mortgage Real Estate & Economic Report December 2015Keith Uthe
Calvert Home Mortgage provides a simplified breakdown of statistics and and information from the Calgary and Edmonton real estate markets and how they are affecting current home prices. You will also find the most recent statistics available for key Economic Fundamentals that influence the lending industry and real estate markets in Alberta.
A critique of treasury whitepapeer on corporate bond spot curve for pension d...Pim Piepers
1) The document critiques a Treasury White Paper proposing to use a corporate bond spot yield curve to discount pension liabilities, arguing this is not accurate.
2) While a spot yield curve in theory matches rates to payment dates, corporate zero-coupon bonds do not exist in meaningful quantities and have credit risk, requiring instead use of risk-free Treasury rates.
3) Averaging rates over 90 days, as proposed, still does not provide accurate current information given interest rate volatility, and smoothing rates compromises accuracy of liability measurement and contribution requirements.
1) Effective cash flow management involves measuring and projecting cash flows, managing receivables to encourage timely payments from customers, and prudent timing of purchases.
2) Preparing regular cash flow projections and monitoring actual performance against projections is important to identify potential shortfalls.
3) Even profitable businesses can face cash flow problems if costs are incurred before payment is received, so it may be necessary to delay large orders or request deposits from customers.
At RL360° we love to make life simple for advisers. It’s not
always an easy task, but with the Quantum, Paragon, Oracle
and LifePlan fund range we believe we have.
This document provides information about obtaining a mortgage as a contractor. It discusses the types of mortgages available, including repayment and interest-only options. It also covers how much borrowers can typically get, the deposit needed, and fees involved in the mortgage process. Additionally, it addresses some of the hurdles contractors may face and how a specialist broker can help overcome them by presenting documentation correctly to secure appropriate financing.
Several scam websites have been suspended that were misleading people about accessing their pension funds before age 55. The National Crime Agency has suspended around 18 pension scam websites as well as those using text messages and cold calls. Normally people cannot access pensions before 55 unless seriously ill, but scammers were enticing people to access funds early against the rules. Managing frozen pension plans still requires active management and planning like active plans, reviewing strategies for funding, investments, benefits and finances. Pension plans may be frozen to minimize total obligations, and companies will need plans for covering shortfalls if underfunded and making lump sum payouts.
Tax letter overlooked strategy - transfer policy ownershipontario lifeline
relates to Fair Market Valuation of individual life policies in Canada either for transfer to individual's professional or business corporation or donation to a charity
The document proposes a financial guarantee program for commercial and mixed-use real estate mortgages in Pennsylvania, whereby a borrower can obtain a mortgage for 100% of a property's value by purchasing a guarantee at around 3% of the purchase price to cover the down payment, allowing lenders to make loans with only their usual 60-80% risk while stimulating the real estate market.
The document provides information about recent changes to mortgage and finance regulations in Australia. The Australian Prudential Regulatory Authority (APRA) has influenced lenders to be more prudent, which will impact the property market. The state budget removed the $3,000 First Home Owners Grant for established homes, though stamp duty concessions remain. The document also provides contact information for a finance broker and answers a question about how credit scores are calculated based on credit history, applications, and accounts.
This document discusses four important financial issues for retirees: generating sufficient retirement income, maintaining affordable health coverage, maintaining independence at advanced ages, and best leaving assets to heirs. It provides information on investing retirement funds for higher returns than savings accounts to cover health and long-term care costs if needed. The document also discusses Medicare options and the importance of supplemental coverage, as well as factors to consider regarding annuities and long-term care insurance due to the high likelihood of needing long-term care services.
This document discusses annuities as safe money products that can help preserve wealth and provide financial growth and secure retirement. It provides information on different types of annuities including fixed annuities, which offer guaranteed minimum interest rates and tax advantages, and variable annuities, which carry investment risk. The document outlines benefits such as tax deferral, death benefits, and guarantees as well as factors to consider like fees, liquidity, and maturity dates when evaluating annuities.
Financial Guarantee 1[1] Music [Recovered] 5 01 09BPANGEL13
The document proposes a financial guarantee program for commercial and mixed-use real estate mortgages in Pennsylvania. It would provide down payment guarantees through surety bonds or policies, allowing borrowers to obtain full financing from lenders rather than pay a large down payment themselves. The program would benefit borrowers by avoiding draining their cash, lenders by enabling full loans with minimal added risk, insurers through premiums, and the state via increased real estate transactions stimulating the economy.
This document discusses strategies for using a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, in retirement planning. It summarizes that tapping home equity through a HECM can help offset inflation risks and stabilize retirement portfolios. It then presents three scenarios comparing a retiree's outcomes with and without a HECM: 1) No HECM used, 2) Refinancing existing mortgage into a HECM line of credit, and 3) Paying off mortgage and establishing a HECM line of credit. A Monte Carlo analysis shows that using a HECM through either strategy 2 or 3 increases the probability of meeting retirement goals and maintains a higher level of available wealth over 30 years
A great presentation on HECM mortgage products for consumers, realtors and financial planners. Baby boomers need alternatives and they need them now. Call me to discuss if you are in Miami Florida
This document provides answers to the top 10 questions for buy-to-let borrowers from St Georges Finance. It addresses questions about obtaining financing for new builds, flats above commercial units, HMO properties, limited companies, borrowers with income below £25k, ex-local authority properties, properties requiring refurbishment, how much can be borrowed based on loan-to-value and interest coverage ratios, typical timeframes to obtain funds, differences between interest rates, and how to ensure getting the best mortgage deal. St Georges Finance is an independent specialist that can access the entire mortgage market to find clients the best options.
This document provides information about income protection insurance, including:
- Income protection insurance provides a monthly income if you are unable to work due to illness or injury, to help pay bills until you can return to work or retire.
- Statutory sick pay only lasts 28 weeks and is usually much less than full earnings. Income protection can help cover lost income after statutory sick pay ends.
- Coverage amounts for income protection are usually 50-65% of pre-tax earnings to replace lost income while adjusting for any state benefits received.
The document provides information on retirement planning and debt optimization strategies. It discusses developing a realistic picture of retirement income and expenses, estimating sources like Social Security and pensions and factoring in healthcare costs. It suggests living for 6 months on projected retirement income to determine if it's realistic. It also outlines strategies to pay off debt, like paying more than minimums, focusing on highest interest rates first, or consolidating with a lower rate loan. While the strategies make sense theoretically, it can be difficult to implement them fully in practice due to competing financial needs.
The document provides information about a debt settlement training program from Simplified Debt Solutions. It outlines the training and support provided to affiliates to help consumers eliminate debt through negotiated settlements. It also addresses frequently asked questions about the debt settlement process and alternatives like bankruptcy, debt consolidation, and credit counseling that clients should reconsider.
Businesses may prefer debt financing over equity financing for several reasons:
1) Debt financing allows businesses to maintain full ownership over their company and avoid giving up partial ownership to investors.
2) Debt financing provides tax benefits as principal and interest payments are tax deductible business expenses.
3) After accounting for tax deductions, the effective interest rate of debt financing can be lower than the stated interest rate from lenders.
4) Debt financing is more accessible than equity financing, with over 99% of businesses using debt in the form of loans and lines of credit to obtain capital.
Similar to Fixed vs Variable? What Should You Do? (20)
I love when I am able to be there to support my clients and in cases like this pick up the pieces and put them all together to solve their financing puzzle.
Calvert Home Mortgage Real Estate & Economic Report December 2015Keith Uthe
Calvert Home Mortgage provides a simplified breakdown of statistics and and information from the Calgary and Edmonton real estate markets and how they are affecting current home prices. You will also find the most recent statistics available for key Economic Fundamentals that influence the lending industry and real estate markets in Alberta.
Calvert Home Mortgage Real Estate and Economic Report for November 2015Keith Uthe
Calvert Home Mortgage provides a simplified breakdown of statistics and and information from the Calgary and Edmonton real estate markets and how they are affecting current home prices. You will also find the most recent statistics available for key Economic Fundamentals that influence the lending industry and real estate markets in Alberta.
Calvert Home Mortgage Economic Report for October 2015Keith Uthe
Calvert Home Mortgage provides a simplified breakdown of statistics and and information from the Calgary and Edmonton real estate markets and how they are affecting current home prices. You will also find the most recent statistics available for key Economic Fundamentals that influence the lending industry and real estate markets in Alberta.
Calvert Home Mortgage Real Estate and Economic Report for September 2015Keith Uthe
Calvert Home Mortgage provides a simplified breakdown of statistics and and information from the Calgary and Edmonton real estate markets and how they are affecting current home prices. You will also find the most recent statistics available for key Economic Fundamentals that influence the lending industry and real estate markets in Alberta.
Calvert Home Mortgage Real Estate and Economic Report for September 2015Keith Uthe
This document summarizes real estate market conditions in Calgary and Edmonton in August 2015. In Calgary, average single-family home prices dropped below $545,000 and sales decreased most for homes priced between $200,000-$400,000. New listings growth slowed which helped support prices. In Edmonton, the number of days on market increased to 54 days. Mortgage arrears in Alberta remain lower than the previous 4 years despite a small rise in May-June. The Alberta and Canadian economies experienced modest growth, while oil prices and production decreased.
Calvert Home Mortgage Economic Report May 31 2015Keith Uthe
Calvert Home Mortgage provides a simplified breakdown of statistics and and information from the Calgary and Edmonton real estate markets and how they are affecting current home prices. You will also find the most recent statistics available for key Economic Fundamentals that influence the lending industry and real estate markets in Alberta.
Calculation of compliance cost: Veterinary and sanitary control of aquatic bi...Alexander Belyaev
Calculation of compliance cost in the fishing industry of Russia after extended SCM model (Veterinary and sanitary control of aquatic biological resources (ABR) - Preparation of documents, passing expertise)
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
What Lessons Can New Investors Learn from Newman Leech’s Success?Newman Leech
Newman Leech's success in the real estate industry is based on key lessons and principles, offering practical advice for new investors and serving as a blueprint for building a successful career.
5 Compelling Reasons to Invest in Cryptocurrency NowDaniel
In recent years, cryptocurrencies have emerged as more than just a niche fascination; they have become a transformative force in global finance and technology. Initially propelled by the enigmatic Bitcoin, cryptocurrencies have evolved into a diverse ecosystem of digital assets with the potential to reshape how we perceive and interact with money.
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
1. FixedVsVariable - ToLock In or Not?
Thisinformationapplies100%if you are takinga new mortgage,whetherapurchase,refinance,or
renewal. Due tocurrentrate discountsthe variable isthe bestchoice.
But whatabout all the economistsandmedia sayingif youare ina variable rate mortgage currentlythen
'lock in'? You should lookat whotheyworkfor andask what isin itfor theircompanyif youfollowtheir
advice andlock in.
Many of those 'economists'are employedbyprofitdrivenshareholderowned bankingandfinancial
institutionsthatdirectlybenefitfromyoulocking-in. Theirprofits increase immediately byinstantly
havingyoulockin at a rate higherthanyour variable rate forhigher profitmargins forthem. Theyalso
lockyou intomassivelyhigher(upto900% higher) prepaymentpenaltiesthat2/3 mortgage holderswill
trigger. That’sright 66% of mortgage holderswill breaktheirmortgage term.
Yes theyare a bitbiasedasthere issomethinghuge initforthemand theircompany. PROFITS!
They alsotendto be generalists,andnotspecialists. Aseconomicgeneralists,theyare typicallyunaware
of manynuancesof mortgage products.
But whatabout independentreal estate experts?
While these real estate expertsmayhave theirfingeronthe pulse of manyfacetsof the economyand
real estate market,manyremaintotallyunaware of how exactlymortgage prepaymentpenaltiesare
calculated,andhowlikelyyouare totriggerthem before yourmortgage termisup. You deserve to
knowthe full consequencesif youlock-in.
So whydoesitmatter to me?
My visionisthat'Everyone Shall Live aLife of Abundance'andI hope thatthisinformationhelpsyou
achieve this. I don't profitfromyourlockingin,or fromyour stayingvariable withyourcurrent
mortgage. If however, afterreadingthisyoudecide youneedme tohelpyouwithyourmortgage thenI
getcompensatedbythe lenderforbringingthembusiness.
I'm a Mortgage Agentoffering myopinion.Anopinionthatreflectsmypersonal policy,basedonmy
yearsof experience andknowledge asareal estate investorandmortgage agent.
2. I've seena fewthings,mortgage specificthingsthatyououghtto know.
Yes 2/3's of youwill breakyourmortgagesandtriggerpenalties.Almosteverysingle one of themasmall
and relativelypainlesspenaltythankstostayingvariable.Whataboutpenaltiesonfixedrates? Well
fixedratesare subjecttoInterestRate differential (IRD) penalties. The bigbanksuse a discountedrate
formulatocalculate thisthat endsupcostingyou thousandsinpenalties. Checkoutthe storyon‘CBC
Market Place’onthisverytopic.
What happenswhenwe have these risingrates?
If you are currentlyina Prime -.65%to Prime -1.00% variable thentolock-inwouldbe toinflictan
immediate rate hike onyourself. Basedonstatementsfromthe governmentitself mighttake them
another12-18 monthsto make those increase at.25% at a time...if theydoinfact do it. Soyou would
immediatelybe payingmore interestandfeedingthe profitsof the lenderbylockinginnow andlosing
all of the advantagesof the lowervariable rate.
There are twokeyreasonto stay variable.
#1) InterestExposure
You endup payingmore interestimmediatelyandtake awayanyadvantage of payingdownyour
mortgage quickerif youlock-in. If youare concernedaboutyour monthlybudgetyoushouldconsider
settingyourpaymentequal towhatthe fixedpaymentwouldbe andkeepthe variable rate. Thisway
youwon't feel the increasesonyourbudget. Irecommendthistoall myvariable client's.
#2) InterestRate Differential PenaltyExposure
You have likelyseenthe storiesabouttheseoutrageouspenaltiesinthe 10's of thousandsof dollarson
showssuchas CBC Market Place. The bankscharge outrageouspenaltiestothose thatdecide tobreak
theirfixedmortgage usingacalculationthatinvolvesamortgage rate discountthattheyofferedyouat
the beginningfromtheirinflatedpostedrate. Atthe time of breakingthe mortgage theynow use this
discountagainstyou. Thisdoesnot happenwithavariable rate.
3. If you are ina Prime -.50% or shallowermortgage,we shoulddiscussrestructuringthatintoat leasta
Prime -1.00% mortgage andreducingyourrate by .50% or more. The resultwill be lowerpayments,less
interestpaidandmore foryou fromeach paycheque.
If the national GDPand inflationsupportitthenyes,perhapsanothertwoorthree 0.25% hikesthrough
2019, butat that pointthe oddsfavour(heavily) aneconomiccontractionthatwill inturntriggera
correspondingreductionininterestrates. We alsohave a federal electionwhichalsotendstoputthe
brakeson interestrate hikes.
It ismy belief,andthatof otherswiththeirfingeronthe economicpulse of Canadamore thanI,that the
fedmay be pushingratesupaggressivelyaheadof aneconomiccontraction,sothattheyhave the tool
of 'reducinginterestrates'backintheirtoolbox whenthe rainydayscome.We are overdue forstormy
economictimesandAlbertahasnotcome out of ityetsince 2014/15.
In short,moneyinyourpocketis betterthanmoneyinthe bankspocket. Stay variable - andkeepitin
yours.
Thank you.
KeithUthe
Mortgage Agent
Mortgage Alliance EnrichMortgage Group.
keith@enrichmortgage.ca