Did you know that RRSP time is a great time to get a mortgage? Banks are eager to get your RRSP money so rates are typically at an annual low. Many attractive offers out there right now. So this is the time to get a Mortgage Check Up. See if you can take advantage of the low rates so you too can pay less for your home while you live in it. I find that many clients are able to save thousands in interest costs even with paying the penalty. Never let that amount deter you. Always compare the outstanding balance of your mortgage at the end of the term and the interest costs to your existing mortgage. An Accredited Mortgage Professional can do this for you for free. Even more important is that she should give you independent professional advice that is in your best interest. This is a legal and ethical obligation for all those with an AMP designation. Quite the opposite with bank employees who must represent their employers, the bank.

Relax the interest rate for your Variable Rate Mortgage and line of credit stays the same. As widely expected the Bank of Canada left the overnight lending rate unchanged for the third consecutive meeting. Most likely will be July when next hike coming however then next meeting is March 1st and that is when we can probably expect to hear more where the Bank is headed.

Well it is now offical. Good-bye 35 year amortization and hello to the 30 year amortization. Effective March 18, 2011 mortgage applicants will have to qualify based upon the 30 year amortization. Does this make a difference? You tell me.

For a mortgage of $300,000 with a 35 year AM the monthly payment is $1321 with a 30 year AM it is $1425.  The difference is $104/month. What would you do with $104/month? RRSP contribution, save for prepayment priviledge? Or pay for your kids soccer and dance classes? 

How will this affect buyers? Well for someone earning $40,000/year for example, with a 35 year amortization they can get a $210,000mortgage. With a 30 year amortization the same applicant will only get $194,000. This is based upon a five year rate of 3.99% (includes heat and property tax per guidelines).

Home owners will only be able to refinance up to 85% of the value of the home. So if you want to renovate, buy RRSP, do a debt consolidation or make investments you will only be allowed to use 85% of the value of the home. CMHC will no longer insure the popular Home Equity Line of Credits either.

Remember that these changes are only applicable for buyers who have less than 20% for a down payment or home owners with less than 20% equity in their home.

Happy 2011! So the party is over and you are considering what you would like to change this year. The top resolutions include weight loss, physical fitness, health and quitting smoking.  The one that gets overlooked or shuffled to the bottom of the list is personal finances. 

Do you know where your money goes every month? What are your short and long term goals? What are your needs and wants? Even if you are only 20 you can choose what you want out of life.  A car, a house, an annual vacation, $0 credit card debt or enough money to live on when you retire. Review where your cash goes every month and then make a plan and stick to it. I know I made it sound easy but you I guarantee you won’t loose a thing by trying and you might actually enjoy it. There is a sense of satisfaction received when you see your plans come to fruition. Money in the bank is a good thing!  

And home owners especially make sure you get an Annual Mortgage Check Up. Don’t leave your mortgage until it is up for renewal. Banks love people who ignore their mortgage. Remember they make money on interest. A refinance or early renewal could free up cash every month and save you thousands in interest costs. Don’t get scared off by the penalty to get out of the existing mortgage. An Accredited Mortgage Professional can do a personalized analysis to see if it makes sense for you. Just think, it could give you the money you want for an RRSP, an annual vacation or finally buy the car that your family needs.

It’s the start of a new year. Make it the best. Get financially fit!