3 Apr


Debt Consolidation

Posted by: Tracy Luciani Price

Think you own your home free and clear and without a mortgage? If you have a Secured Line of Credit (SLOC) also known as a Home Equity Line of Credit (HELOC), think again. SLOCs/HELOCs are registered against your property, just like a mortgage. However, unlike a standard mortgage, you’re typically only required to pay the interest every month, and thus the principal never decreases.

Rates on HELOCs are always variable rates at a minimum of Prime + 0.50% and often Prime + 1.00% + (4.45% as of today). If you know you are going to max out your line of credit or carry a balance long-term, you are doing yourself a disservice. A Variable Rate Mortgage (VRM) can be as low as Prime – 0.95% (2.5% as of today). We can look at transferring your HELOC to a VRM, saving you oodles of money and paying it down faster. Contact us today for a consultation.

We see it often. Young homebuyers are forced to need co-signers due to stringent qualification rules. They often turn to parents who are happy to help, only to find out a high-balance HELOC prevents them from doing so.

First time homebuyers Joanne and Jordan had diligently saved 20% for the down payment on their first home (this used to be the magic number for max borrowing power). However with the new qualification rules, they needed a co-signer to afford the home they wanted. Jordan’s parents seemed to be ideal co-signers but it turned out they had a $200,000 HELOC. Their minimum required interest-only monthly payments were only $652.98 however mortgage qualification rules force us to input a payment of $2500/month (1.25% of the balance). This meant they could not co-sign. We were able to switch them into a mortgage at 0.95% below Prime with a reasonable monthly payment, enabling them to co-sign and pay down this debt much more quickly.

We also see retired people on fixed income thinking they’re mortgage free, but saddled with large balance HELOCs, barely able to keep up with monthly payments. Contact us about the possibility of a reverse mortgage. You could be free and clear of payments for the rest of your life!

To re-cap, here are the pitfalls of a Line of Credit secured against your property:

  1. Higher Variable interest rates than standard mortgages
  2. Interest-only payments, never paying down principal
  3. Maxed out balances hurt credit scores
  4. Restricts ability to co-sign and to purchase other properties
  5. Rates and terms can change at any time *always read the fine print

We are consumer advocates and advise the best solutions for your individual needs. Contact us today, we can help.


Written by Jennifer Price

24 May


Success Stories

Posted by: Tracy Luciani Price

Cottage season has finally arrived and the appetite of wishful cottage owners is hot. We recently helped a couple turn their dream of owning a cottage into a reality, and then some.

Long-term clients Al and Lydia approached us a few months ago with their desire to buy a cottage. They had seen our signage stating “Buy a Cottage for 5% Down”, deemed a second home. They had been working hard over the past couple of years to save an extra $16,000 for 5% down payment and closing costs for the purchase of their dream cottage. They were excited about an affordable $250,000 waterfront property they had found, which was being sold privately.

We sat down, ran some numbers and the initial appointment resulted in some disappointing news. Despite their strong incomes, they couldn’t qualify for the second home purchase because they had two sizeable mortgages in their names. Their primary residence, and, they had also co-signed for their son’s first matrimonial home a couple of years ago. With the new ‘stress test’ in effect, they had to qualify at 4.64% and the ratios just didn’t work.

However, we found a way to make it work… that’s what we do! As it turned out, their son and daughter-in-law now had enough work history and high enough incomes to qualify for their own mortgage. We were able to refinance John and Sally’s house and remove Al and Lydia from title, freeing up enough room in their debt service ratios to enable them to afford the cottage with a high-ratio mortgage. Success #1!!

John and Sally were pleasantly surprised by the appraised value of their home and we were able to get them enough money to finally finish their basement and backyard. This saved them from having to put these expenses on a high-interest Line of Credit. Success #2!!

Given the massive increase in property values in Centre Wellington lately, we took a look at what else we might be able to do for Al and Lydia. They had always wanted to own a property that they can earn income from, but they didn’t know how they would ever be able to do that. Turns out, their property value had appreciated very nicely and it made sense for them to refinance their principle residence as well. We were able to get them enough money to purchase an additional cottage for $300K with 20% down, which they will be renting out starting this summer. Success #3!!

They were able to debt-service the three mortgages and are thrilled about achieving this type of property ownership, which will play a large part in their retirement security as they approach their golden years.

With some creative thinking, passion and dedication, we were able to help these two families achieve their dreams and beyond! Contact us to see how we can help you achieve your aspirations of cottage and/or rental property ownership. We love what we do, and it shows!

9 Apr



Posted by: Tracy Luciani Price

With both the resale (it’s a crazy sellers market) and new home inventory for sale in CW so extremely low thus far this year, area residents are turning to refinancing their homes with great zest.

Everyone knows that the value of their home has gone up considerably over the last couple of years in particular, but are shocked to find out just how much.

There are so many reasons to refinance. Growing pains/space needs, updating kitchens and bathrooms, basement apartments, windows, roofs, decks/patios, driveways, landscaping around the home. Other common reasons are to pay off high interest consumer debt, often combined with a much needed vacation to get away from it all, helping our kids with, well so many things including post secondary education, first cars and the list goes on.

The fact of the matter is that with rates still at all time lows, combined with significant new equity resulting from a sustained market ‘lift’, means that now is an ideal time to do what you’ve been dreaming of doing, to wrestle down and eliminate bad, high interest debt for good, to reduce and eliminate financial stress, and to invest in your future.

We are not concerned about rates rising in any significant way for some time. But there is a big black cloud on the horizon which is more federal regulations coming this spring which will make it even more difficult to qualify for a mortgage.

In short, today’s opportunity may well diminish or disappear in the not to distant future.

Did you know that a typical mortgage refinance can reduce your total monthly debt payments by more the 50%? Some as much as 66%, yup it’s true. Believe it or not, the net result of the vast majority of refinances we do, eliminates all debt and improves cash flow, even leaving extra funds for a rainy day.

This spells RELIEF for most people. Remove the financial stress you can’t seem to shake off.

We are also seeing a disturbing trend of older folks who have tons of equity, but who are living with severe cash flow contraints and stress, when it does not need to be that way at all.

So if you have debt that is weighing you down, or you are thinking of doing a major renovation, addition or buying a second home or cottage or rental property, do it now PLEASE!

Never in my thirty five years in this business have I seen conditions this favourable for refinancing.

Please call our professional team today to explore all options available to you.

17 Feb



Posted by: Tracy Luciani Price

We all know the saying, “ignorance is bliss”. Sometimes it is, until it bites you badly.

We see it all too often, especially with couples. One is more of a spender than the other. One is more of an earner than the other. One is more in touch with finances with the other. They both get into debt together. Whether they stay together or split up, that joint debt bounds you more together than marital vows ever could.

Mark and Terri have been long time clients of ours. They first came to us 12 years ago when they bought their first home. Long-standing clients of a major bank, the bank had told they were pre-approved for a healthy-sized mortgage only to be denied once they found a home to buy.

The bank hadn’t done the vital work upfront and the pre-approval wasn’t underwritten. (Call us and we’ll be happy to explain more about that.) They came to see us about options. It took a lot of work and determination but we swiftly found a solution and got them into their home against all odds.

Today, Mark and Terri have found themselves living paycheck to paycheck. Why?

Terri applies for appealing credit products, easily qualifies and maxes it up. Mark is oblivious to how finances work. His parents never used credit so it feels overwhelming to him. Terri knows more and he trusts his wife to take care of it. He earns, that’s his role. They put two kids through college and helped one of them out with a car loan. They both feel good about that. For Mark, financial ignorance has been bliss.

Today, he feels more stress than ever. Somehow they are bleeding at the seams. They have a small mortgage compared to most neighbours. They only owe $190,000 on their home but they somehow owe $95,000 in consumer debt. Their mortgage payment is $1100/month and 50% of that goes to principle. They pay at least $2000/month to multiple credit sources averaging 18% interest, and that’s just the minimum payment. That only covers interest.

Deflated, tired and less than a decade away from retirement, Mark believes that they will never own their home. This is a mindset that can change.

The mortgage is not the problem. The problem is consumer debt by way of credit cards, unsecured lines of credit at astronomical interest rates and vehicle loans. All of these are EASY to obtain. Too easy. It’s affecting their health and marriage.

While we were able to help Mark and Terri with a refinance for a fresh start this time (they have equity in their home, decent income and credit) they need to change their spending habits. Ignorance is not bliss. Be informed, be active in your financial life.

Contact us and we will help assess where you are and where you want to be.

7 Feb


Debt Consolidation

Posted by: Tracy Luciani Price

With some pride when we do the initial analysis client announces I only have $120,000 mortgage. With a house worth $450,000, the client is almost giddy with excitement that their mortgage is almost gone. But hey wait a minute, with credit pulled the client also owes $90,000 on a line of credit and it’s maxed. This line of credit is a 2nd mortgage against the property.

Oh and there is a $30,000 Visa, also maxed. Guess what? Under the terms of their bank collateral mortgage this is also now all secured. They thought it was unsecured because the bank (not surprisingly) never told them. Yep even the car loan for $35,000 with the same bank also now secured.

So you see the clients have actually not paid down a cent over the past five years because they actually increased the amount owed in both secured and unsecured debt. This is all an illusion made for Canadians to believe ‘they are paying their mortgage off faster’.

Now, of course, the mortgage was originally negotiated at a decent rate, so the homeowners are under the impression they are actually got an amazing deal. But on further examination, the mortgage is at 2.79%, the line of credit is at 3.2%, the Visa is at 18% and the car loan is at 12%. So that mortgage is actually costing around 6%. But worse yet all disposable income is gone with payments.

Now with all eggs in one bank basket, unsecured debt is now secured under the terms of the mortgage, so the visa is now technically part of the mortgage debt. The bank registered 125% of the property value as a mortgage against your home.

Remember it’s the bank’s goal to have you take 5 credit avenues; a mortgage, line of credit, 2 visas and a car loan in order to get you in just enough debt that you are just treading above water and most of your pay cheque is eaten by payments and interest. The bank extends just enough rope so you are dangling but not dead. Dying is not good but choking is okay. And now they have full control over you and your life. Remember they love professional and high income earners because there is more potential for profit. We see this happen time and time again to all income levels.

Time to get wise to the bank tactics that keep you in perpetual debt. If you have a mortgage for heaven sakes pay it down for good, but not at the expense of having higher interest debt. That’s completely counter productive. Don’t believe you have a $120,000 mortgage when actually owe $275,000 and it’s all with a major bank.

Get a ‘get out of jail’ free card from us. We have shown hundreds of clients how to get out of debt forever and actually pay off their mortgage. Even if you have screwed up before, you can still win the debt game with our helpful advice. Real freedom comes when you don’t owe the bank a cent.

30 Sep



Posted by: Tracy Luciani Price

30 year-old Antonio came to us, tired of being forced by landlords to move every year with his young family. He was paying rent of $1500 per month and with every move, the rent increased. He was struggling and hitting cash stores to help make ends meet.

Unfortunately, although his income could support a new mortgage, his credit was damaged.  These days, one requires a credit score of 600+ to qualify for a prime mortgage with a minimum 5% down payment. So, we suggested he find a co-signer.

Silvia loved her son dearly and said she would do anything to help him. After all, it was upsetting that her two wee grandchildren were living in an apartment without any stability. Silvia had a good job with high income and excellent credit. At first glance, she appeared to be a perfect co-signer.

The problem was, she had a very high debt load with multiple credit lines, which meant she would not qualify as her debt service ratios were too high.

We suggested she refinance her house, pay off her debt and then she would be able to co-sign (and, she would save herself tens of thousands of dollars in interest!). An ideal solution all around.

When we told Silvia she needed to refinance, she said she preferred to deal with her bank.  So, we waited, expecting that she would refi with the bank and hoped we would still arrange her son’s mortgage with her as a co-signer.

Silvia called us a week later, shocked and absolutely mortified that her bank turned her down! We were puzzled. It seemed like a cut and dry deal.  But not only that, the banker tried to talk her out of helping her son. WTF?

Why would the bank turn down a long-term client like Silvia for a refinance? Ah Ha! Since her multiple lines of credit, credit cards and high-interest loans were all with her bank, they would stand to lose huge profit if she refinanced to pay off that debt. They wanted to keep her in ‘bank interest jail’.

We were easily able to refinance Silvia with a new bank at a better rate.  The best news is Antonio and his young family were able to purchase a house. In a few years, once his credit has rebounded we will be able to remove Silvia from her son’s mortgage and he will be standing on his own two feet.