In this world there are many magic numbers:
(via A magic number: 833.33)
That was the interesting quandary I was in last week when I went in to talk with my bank about RESPs and such.
Normally when I make an appointment at the bank, I bring a list of things I need to get done and then a few Christmas wishes too. Typically my main wish is to get Free Banking (i.e. no bank fees, or a vacation from fees (yes I already have a PC account, as well)), however this time a co-worker gave me a different idea.
The CBC had an interesting article on how Canada is Tiptoeing Towards a Subprime debacle similar to the United States (but not exactly the same).
I was skeptical, but I was also unaware that there are so many “alternate lenders” for mortgages in Canada (and that these Mortgages are not CMHCinsured).
The banks seem to have come to their senses and are now rejecting more than 20% of Mortgage applications these days, because they cannot be CMHC insured, according to the CBC and while I think this is a good idea, folks are simply trying to contravene the system and get a loan that is not insured by the CMHC, and thus are a lot more risky.
Now that we have figured out how to track our Mortgage using this Mortgage Work Sheet with Excel , we can now start doing some interesting tricks to see what we can do with our Mortgages.
I have some dear friends who paid off the houses they lived in, very quickly each time they moved from house to house (as their family grew). They both had good paying jobs, so they set up a simple goal with their Mortgage, each Mortgage payment they made, they were going to “double up” (i.e. pay a double payment to the bank). They had chosen the type of Mortgage (so there were no penalties to make extra payments) and sure enough they paid off their houses incredibly quickly.
After last week’s “show and tell” about Mortgage worksheet calculators, the next question to ask yourself is which is more important to pay into your Retirement Fund (RRSP or 401k) or pay off your Mortgage (and debts)? Since the U.S. model has tax implications for paying off your Mortgage, and I do not wish to mention the Smith Manoeuvre for Canada, let’s just concentrate on the Canadian model.
After last week’s “show and tell” about Mortgage worksheet calculators, the next question to ask yourself is which is more important to pay into your Retirement Fund (RRSP or 401k) or pay off your Mortgage (and debts)? Since the U.S. model has tax implications for paying off your Mortgage, and I do not wish to mention the Smith Manoeuvre for Canada, let’s just concentrate on the Canadian model.
That was the interesting quandary I was in last week when I went in to talk with my bank about RESPs and such.
Normally when I make an appointment at the bank, I bring a list of things I need to get done and then a few Christmas wishes too. Typically my main wish is to get Free Banking (i.e. no bank fees, or a vacation from fees (yes I already have a PC account, as well)), however this time a co-worker gave me a different idea.
While the Bank of Canada kept interest rates lower this week, the Government decided to tackle the problem of the ever increasing consumer debt, by tightening regulations on Mortgages and Home Equity credit lines. As you can read in a few of the following posts, I think the Government got it a little wrong, since the issue of increasing debt load is not really being carried in Home Equity Credit lines, it is being carried on Credit Cards, yet there are no new rules to regulate those, or Pay Day Loan companies either. Good idea, but wrong target in my opinion.
