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It does matter how your mortgage gets registered – collateral or conventional

Many people are unaware that there are two basic types of mortgages: conventional and collateral. With a conventional mortgage, the amount you’re borrowing (property value minus down payment) is the amount that’s registered. But with a collateral mortgage, the amount that’s registered is 100-125% of the property value, and the lender has both a promissory note AND a lien registered against the property for the total registered amount. Most credit unions such as Vancity register their mortgages collateral while TD Canada Trust and ING Direct switched to collateral mortgages in 2010.

The advantage of a collateral mortgage is easy access to credit. Since the mortgage is already registered for a larger amount than you need to buy the house, you can access additional funds in the future without any extra steps or legal fees.

But there are also several downsides of collateral mortgages:

– Free transfers or switches to a new lender when your term is up aren’t usually available. Most other lenders don’t like the fine print and restrictions of collateral mortgages and won’t accept them unless they’re a refinance, which costs you legal and possible appraisal fees.

– You could end up paying a higher interest rate at renewal. If your collateral mortgage makes it difficult to switch lenders at renewal, you don’t have the ability to shop around for the best rate. That could end up costing you up to 1% more on your mortgage rate.

Obviously, it’s very important for you to know up front whether you’re getting into a collateral mortgage or a conventional mortgage. Unfortunately, many people don’t realize they have a collateral mortgage until it comes time to renew and they don’t have the flexibility they need. We would be more than happy to help make sure this doesn’t happen to you!

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Financial Literacy presentation for adults & the entire family (ages 12 & up)!

You are invited to a complimentary presentation on Financial Literacy for adults & the entire family (ages 12 & up)!

November is Financial Literacy month!

You don’t have to look very far to read an article in the newspaper or watch a segment in the news talking about the lack of education when it comes to teaching youth and adults the basics about Financial Literacy.

We will be hosting an educational presentation on Financial Literacy for adults and the entire family (ages 12 and up)! While the topic of Financial Literacy can be dry, dull and boring this presentation was designed to be an incredibly powerful program that will both educate and entertain. This presentation will provide some good information about the understanding of money management and investing. The presentation is based on the EnRiched Academy  program that was endorsed by Jim Treliving and Bruce Croxon from the Dragon’s Den.

We will be covering the following topics:

  • Understanding how money works and where most North Americans are financially
  • Money myths and misconceptions
  • Why some people, including high earners, never get around to saving money & how to avoid the pitfall
  • How important is to create the habit of saving money as early in life as possible
  • The power of saving 10% of what you can earn and more
  • The magic behind compounding interest and how it works
  • How to systemize your savings and where to put your money for maximum wealth building
  • How credit cards, credit score and credit card interest work
  • What happens if you only make minimum payments or neglect to pay your credit card on time
  • 6 steps to having an A+ credit score
  • What “Good Debt” and “Bad Debt” are and what makes the difference
  • Your personal brand and how it can have an impact on your future

Dates: 

Saturday, November 2nd from 10 am to noon at Collingwood Neighbourhood House located at 5288 Joyce Street, Vancouver (room A multi-purpose room on the main level).

Saturday, November 16th from 10 am to noon at the Fleetwood Community Centre located at 15996 – 84th Avenue, Surrey (room 3).

For more details and to register, please:

Email: aaragon@dominionlending.ca or jaragon@dominionlending.ca

Call: 778.893.0525 or 604.931.9000

Reserve your spot today as space is limited.

You don’t want to miss this great event!


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Free presentation on Financial Literacy for teens and young adults – May 25th from 10 am to noon

We are hosting a free presentation on Saturday, May 25th from 10 am to noon on Financial Literacy for teens and young adults (great for teens of 15 years of age and older including adults).

As you know you don’t have to look very far to read an article in the newspapers or watch a segment in the news talking about the lack of education when it comes to teaching students the basics about Financial Literacy.

While the topic of Financial Literacy can be dry, dull and boring – enRICHed ACADEMY was created to be an incredibly powerful program that will both educate and entertain. This presentation will provide some good information about the understanding of money management and investing. This program was featured and endorsed by Dragon’s Den.

We will be covering the following topics:

  • Understanding how money works and where most North Americans are financially
  • Money myths and misconceptions
  • Why some people, including high earners, never get around to saving money & how to avoid the pitfall
  • The power of saving 10% of what you can earn and more
  • The magic behind compounding interest and how it works
  • How to systemize your savings and where to put your money for maximum wealth building
  • Understanding how the stock market works and how to get started investing
  • Understanding how to purchase your first rental property
  • How credit cards, credit score and credit card interest work
  • What happens if you only make minimum payments or neglect to pay your credit card on time
  • 6 steps to having an A+ credit score
  • What “Good Debt” and “Bad Debt” are and what makes the difference

Details:

Saturday, May 25th from 10 am to noon

Pinetree Community Centre, Room 8 located at 1260 Pinetree Way, Coquitlam

(next to the Douglas College, David Lam Campus)

Please register via:

Email: aaragon@dominionlending.ca or jaragon@dominionlending.ca

Call: 778.893.0525 or 604.931.9000

It would be great if you want to join us and please feel free to pass on to anyone that you think would enjoy attending this unique event.

Register today s space is limited!


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Building your homeownership budget

Making the transition from renter to homeowner is likely one of the biggest decisions you’ll make throughout your lifetime. It can also be a stressful experience if you don’t plan ahead by building a budget and saving prior to embarking upon homeownership.

Budgeting is a core ingredient that helps alleviate the stress associated with money issues that can sometimes arise if you purchase a home without knowing all of the associated costs – including down payment, closing costs, ongoing maintenance, taxes and utilities.

The trouble is, many first-time homeowners fail to carefully think about their finances, plan a budget or set savings aside. And in this society of instant gratification, money problems can quickly escalate.

The key is to create a realistic budget based on your goals. Track your spending and make your dollars go further by sticking to your budget once it’s in place. Budgeting offers a step-by-step formula for figuring out how to best save your hard-earned money to invest in homeownership.

Following are three top tips to help you prepare for the purchase of your first home:

  1. Set up a savings account. You can deposit a predetermined amount into this account each pay period that you won’t touch unless it’s absolutely necessary. This will enable you to put money aside for a down payment and cover closing costs, as well as address ongoing homeownership expenses such as maintenance, taxes and utilities.
  2. Save up for big-ticket items. As you accumulate money in your savings account, you will be able to also save for specific purchases to help furnish your home – avoiding the buy now, pay later mentality, which can have a negative impact on your credit when you’re seeking mortgage financing.
  3. Surround yourself with a team of professionals. When you’re getting ready to make your first home purchase, enlist the service of a Licensed Mortgage Expert such as myself  and find a trusted real estate agent. Experts are invaluable as you set out on the road to homeownership because we help first-time buyers through the home purchase and financing processes every day. Experts can answer all of your questions and set your mind at ease. We have access to multiple lenders, and can help you get pre-approved for a mortgage so you know exactly what you can afford to spend on a home before you head out house hunting, while a real estate agent will be able to match your needs with a house you can afford. Both parties will negotiate on your behalf to ensure you get the best bang for your buck. And, best of all, these services are typically free. Experts will also be able to refer you to other reputable professionals you may need for your home purchase, including a real estate lawyer, home appraiser and a home inspector.


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Be aware of your credit report

A mistake on your credit report can cost you money. It can increase the interest you pay on loans, prevent you from getting a mortgage, buying a car or getting a job.

A new 8 year American Government study was released today and indicates as many as 40 million Americans have a mistake on their credit report. Twenty million have significant mistakes.

In Canada is not different, mistakes are made every single day. There a 2 Credit Bureaus in Canada, Equifax and TransUnion. We always recommend our clients to review their credit report on a regular basis (every six months to a year) and not just for mistakes, but for potential identity theft, which could be financial devastated for an individual.

Both Credit Bureaus have free service, when you ask to a report mail to you. If you want to download your report, you have to pay for it.

Don’t risk your credit health and review your credit report often.

For more information regarding this problem read Credit reporting error costing Canadians.