10 Money Saving Tips!

Financial Tips Jag Dhamrait 10 Jun

When it comes to saving money, there are a lot of little things you can do that add up to make a big difference!

Here are 10 of my favourite money-saving tips to help get you started today:

Automatic Savings are one of the most effective ways to save because you can’t spend what you can’t access! Instruct your employer to transfer a certain amount from your paycheck each pay period into an RRSP or savings account (or both) or set up automatic transfers in your banking account to coincide with your payday.
Consolidating Debt will result in a single monthly payment and lower interest costs! Many people don’t realize just how much money they are wasting on interest each month, especially if you have multiple loans or credit cards. Consolidating debt can help you gain control and maximize spend on the principal amounts to pay off loans faster.
Budget with Cash if you have trouble with overspending or find it too easy to use your card. After your bills are paid, take out the remaining cash (spending money) and only use that. Once the cash is gone, you’re out of money until next payday! Having physical cash in hand can also help you think twice when making purchases.
Buying in Bulk is a great way to save a bit here and a bit there when doing your regular grocery shop or purchasing other items. Know you’ll need more? Stock up at once for bulk savings, which will help you in the long run!
Before Buying there are two things you should always do. The first is to wait at least 24 hours and the second is to shop around! If you still want to buy something the next day, make sure you get the best price available!
Plan Your Meals. Most of us don’t have time to make breakfast (let alone lunch!) before we fly out the door for work. But what if I told you that getting up an hour earlier could save you over $100 a week!? Just think about how much you spend going out for breakfast AND lunch each day? Groceries are a lot cheaper and you can even prep a few days worth of meals on Sunday while you get ready for the week.
Think in Hours versus Dollars every time you are looking to make a purchase, especially large ones to help you understand the TIME value of money. A new $24 Blu-Ray = 1 hour of work. A brand-new mattress = 41.67 hours of work. Understanding the time that went into earning money for a purchase can help with reconsidering frivolous items, or encourage you to look for the best deal on necessary products.
Utility Savings can help you save each month! Don’t blast your A/C with all the doors in your house open, don’t pump the heat without sealing cracks and consider things like installing water-saving toilets and running cold-water wash cycles to save energy (and money!) every day.
Master DIY – While sometimes you can spend $120 to make a $20 item yourself, there are some things that do benefit from DIY, such installing dimmer switches, that can help save you money in the long run.
Save Windfalls and Tax Refunds for a rainy day. A good rule of thumb is to put 50% of bonuses, tax refunds or other windfalls into your savings account and put the rest against loans owing. While you might want to go on a shopping spree or plan a vacation, paying off your debt NOW will free you up in the future.

Your Gardening To-Do List!

Home Tips Jag Dhamrait 22 May

If you are looking to have a garden that is the envy of the neighbourhood, May is a great time to get started on your gardening to-do list.

I have put together some helpful tips and ideas for how to get started so your garden shines all summer long!

Plant Annuals and Perennials: This is a great time to start planting annuals and perennials in your garden. Some good choices include: cosmos, marigold, nasturtium, sunflower, sweet alyssum, and zinnia. For the best results, it is ideal to pick an overcast day for initial planting to avoid heat shock and be sure to keep all new plants well-watered until they have settled.
Start Summer Veggie Seeds: If you’re hoping to enjoy fresh veggies all summer, be sure to plant them now! Beans, corn, cucumbers and squash can all be sown directly in the soil (ideally when evening temperatures are around 10 degrees Celsius). Another great option is to plant tomatoes as they love the sun and are very hardy, but be sure to provide trellis support! Plant all veggies in a bed of compost (4” – 6” deep) to ensure a healthy start and remember to keep new sprouts moist to avoid heat damage.
Spice it Up: Now that the frost has passed, it is also a great time to plant seasonal spices. Basil, dill, rosemary, marjoram, cilantro and fennel are great options for planting this time of year. They require a bright area with 6-8 hours of sunlight per day and well-drained soil to flourish. Even better? Plant them in a container in your windowsill or on your porch so you can easily access them if you need a snip of fresh herb!
Lawn Mower Care: Lawn mowing season is just around the corner and now is the perfect time to tune up your lawn mower! Get your blades sharpened, change the oil, filter and update the spark plugs to keep you riding smooth all summer.
Lawn Maintenance Routine: Establish a lawn maintenance routine that includes watering your grass and garden, as well as weeding unwanted and unruly foliage and applying fertilizer. A helpful tip is to water your plants in the late afternoon or early evening to cut down on evaporation. This also allows your garden several hours to take up the water into their systems, without battling the sun.

How to Pay Off Your Mortgage Faster

Mortgage Tips Jag Dhamrait 10 May

When it comes to homeownership, many of us dream of the day we will be mortgage-free.

While most mortgages operate on a 25-year amortization schedule, there are some ways you can pay off your mortgage quicker!

Review Your Payment Schedule: Taking a look at your payment schedule can be an easy way to start paying down your mortgage faster, such as moving to an accelerated bi-weekly payment schedule. While this will lead to slightly higher monthly payments, the overall result is approximately one extra payment on your mortgage per calendar year. This can reduce the total amortization by multiple years, which is an effective way to whittle down your amortization faster.
Increase Your Mortgage Payments*: This is another fairly simple change you can execute today to start having more of an impact on your mortgage. Most lenders offer some sort of pre-payment privledge that allows you to increase your payment amount without penalty. This payment increase allowance can range from 10% to 20% payment increase from the original payment amount. If you earned a raise at work, or have come into some money, consider putting those funds right into your mortgage to help reduce your mortgage balance without you feeling like you are having to change your spending habits.
Make Extra Payments*: For those of you who have pre-payment privileges on your mortgage, this is a great option for paying it down faster. The extra payment option allows you to do an annual lump-sum payment of 15-20% of the original loan amount to help clear out some of your loan! Some mortgages will allow you to increase your payment by this pre-payment privilege percentage amount as well. This is another great way to utilize any extra money you may have earned, such as from a bonus at work or an inheritance.
Negotiate a Better Rate: Depending on whether you have a variable or a fixed mortgage, you may want to consider looking into getting a better rate to reduce your overall mortgage payments and money to interest. This is ideally done when your mortgage term is up for renewal and with rates starting to come back down, it could be a great opportunity to adjust your mortgage and save! This may be done with your existing lender OR moving to a new lender who is offering a lower rate (known as a switch and transfer).
Refinance to a Shorter Amortization Period: Lastly, consider the term of your mortgage. If you’re mortgage is coming up for renewal, this is a great time to look at refinancing to a shorter amortization period. While this will lead to higher monthly payments, you will be paying less interest over the life of the loan. Knowing what you can afford and how quickly you want to be mortgage-free can help you determine the best new amortization schedule.

*These options are only available for some mortgage products. Check your mortgage package or reach out to me to ensure these options are available to you and avoid any potential penalties.

If you’re looking to pay your mortgage off quicker, don’t hesitate to reach out to me at 647-883-7790 or by email at jag@dlcchoice.ca! I can help review the above options and assist in choosing the most effective course of action for your situation.

Choosing Your Ideal Payment Frequency

Mortgage Tips Jag Dhamrait 26 Apr

Your payment schedule is the frequency that you make mortgage payments and ranges from monthly to bi-monthly, bi-weekly, accelerated bi-weekly or even weekly payments.

Below is a quick overview of what each of these payment frequencies mean:

Monthly Payments: A monthly payment is simply a single large payment, paid once per month; this is the default that sets your amortization. A 25-year mortgage, paid monthly, will take 25 years to pay off but includes the added burden of one larger payment coming from one employment pay period. With this payment frequency, you make 12 payments per year.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have a monthly payment of $4,156.19. No term savings; no amortization savings.

Bi-Weekly Payments: A bi-weekly mortgage payment is a total of 26 payments per year, calculated by multiplying your monthly mortgage payment by 12 months and divided by the 26 pay periods.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have a bi-weekly payment of $1,915.98 with term savings of $177 and total amortization savings of $1,769.

Accelerated Bi-Weekly Payments: An accelerated bi-weekly mortgage payment is also 26 payments per year, but the payment amount is higher than a regular bi-weekly payment frequency. Opting for an accelerated bi-weekly payment will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. This frequency also allows the mortgage payment to be split up into smaller payments vs a single, larger payment per month. This is especially ideal for households who get paid every two weeks as the reduction in cash flow is more on track with incoming income.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have accelerated bi-weekly payments of $2,078.10 with term savings of $1,217 and total amortization savings of $145,184. Plus, you would save 4 years, 12 months of payments by reducing scheduled amortization.

Weekly Payments: Similar to monthly payments, your weekly mortgage payment frequency is calculated by multiplying your monthly mortgage payment by 12 months and dividing by 52 weeks in a year. In this case, you would make 52 payments a year on your mortgage.

Example: $750k mortgage, 3-year fixed rate, 5.34%, 30-year amortization you would have weekly payments of $957.50 with term savings of $253 and total amortization savings of $2,526. You can move to accelerated weekly payments to save even more!

Prepayment Privileges: In addition to fine-tuning your payment schedule, most mortgage products include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This can help reduce your amortization period (the length of your mortgage).

By exercising your prepayment privileges, you can take time off your mortgage. For instance:

Extra $50 bi-weekly is $32,883 total savings and an additional 1 year, 2 months time saved
Extra $100 bi-weekly is $62,100 in total savings and an additional 2 years, 3 months time saved on your mortgage
Extra $200 bi-weekly is $111,850 in total savings and an additional 4 years, 1 month of time saved on your mortgage.

Understanding the different payment frequencies can be key in managing your monthly cash flow. If you’re struggling to meet a large payment, breaking it up can be effective; while the same can be true of the opposite. Individuals struggling to make a weekly or bi-weekly payment, may benefit from one monthly sum where they have time to collect the funds.

Consider getting in touch with me today at: 647-883-7790 to determine what payment frequency is best for you OR you can download my app and calculate them for yourself!

Economic Insights from Dr. Sherry Cooper – April 2023

Mortgage Tips Jag Dhamrait 4 Apr

In March, the global economy was focused on systemic risk in the banking sector.

Following three bank failures in the U.S., markets were roiled again by the forced sale of Credit Suisse to UBS.

Interest rates have plummeted as demand for the haven of government bonds has increased sharply. Consequently, five-year fixed mortgage rates have fallen roughly 30 basis points as the Fed pondered its next move.

Inevitably, failed banks and fears of additional losses have led many financial institutions to tighten their provision of credit. Although interest rates have fallen worldwide, more cautious lending will slow economic activity, particularly in the U.S. and Europe, ground zero for bank failures.

For that reason, many expected the Fed to pause to assess the situation further. The Fed raised its overnight policy rate 25 bps to a range of 4.75% to 5.0%, now above the overnight rate in Canada.

Just over two weeks ago, Fed Chair Jerome Powell testified to Congress that inflation pressures warranted higher-than-expected interest rates. With the bank failures, the Fed suggests that the target level might be only one or two moves away. However, even with that, the U.S. central bank reasserted that interest rates determined by the Fed will not be reduced until next year.

Market-determined yields have fallen sharply, especially at the short end of the yield curve—increasing the inversion in the yield curve. An inverted yield curve portends a more aggressive economic slowdown, reflected in the fall in oil and gas prices.

Canada’s yield curve moved almost as much as in the U.S. Good news on the inflation front affirmed the Bank of Canada’s decision to pause. Consumer price inflation fell last month from 5.9% to 5.2%. The Bank will likely pause again at its next meeting in April.

Canadian bank stocks fell quite a bit, mirroring global trends. Our banks are in no danger of failing. Like the 2008 Financial Crisis, Canadian banks have proven to be very soundly regulated.

Lower mortgage rates are great news for the coming Spring season. While it won’t measure up to the 2021 boom, a rebound in sales and new listings will be great for the industry.

Spring Cleaning Tips

Home Tips Jag Dhamrait 2 Apr

As the sun starts coming back around, it is a great time to scrub those windows and deep clean your home!

Here are some tips for a successful Spring clean:

Create a Playlist: Everything is more fun with a great playlist! Not only is music great therapy but it can make the cleaning process go by quicker and make it more enjoyable.
Clean One Room at a Time: While we all like seeing our homes sparkly and fresh, it can sometimes be an overwhelming process to get to that point. To help minimize the stress, work one room at a time! Start with the smaller rooms, or those that need the least amount of cleaning, and work your way up to the larger, project rooms. Another option is to tackle one or two rooms each weekend for the month and by the time May comes, you’ll be ready!
Declutter as You Go: Spring cleaning isn’t just about shining up the brass on the door and dusting. It is just as important to declutter your space! Before you start cleaning the room, it is a good idea to pinpoint items that can be discarded, such as old magazines and papers, as well as to go through closets and cupboards for anything that you can donate (like that sweater you bought and never wore). This will clear up space for new clothing and items and will make you feel that much more accomplished!
Think Green: Spring cleaning allows us to start the season off on a fresh, clean note. Don’t muddy that up with harsh chemical cleaners. In today’s eco-friendly environment, there are many safe alternatives to regular cleaners. Vinegar is a great substitute in the bathroom or kitchen as well as combining vinegar, baking soda and water as a deep clean alternative. You can also opt for a steam cleaner to manage tile, hardwood floors, appliances and even outdoor areas as they only use hot water and vapor.
Work From Top to Bottom: Starting from the ceiling and working your way down just makes sense! This will force debris downward and save you having to re-clean your space. Dusting first will prevent a headache later too!
Don’t Forget The Fridge & Freezer: The best time to clean out your fridge and freezer is right before you do your grocery shop, so they will be at their most empty. Take everything out and dispose of anything that is past its expiration date and any almost-empty items you won’t use. Before you restock be sure to wipe down the interior of the fridge with disinfectant and a damp cloth. The same can be done for the freezer but you’ll have to defrost it first!
Clean Air Reduces Allergies: Replacing furnace and HVAC filters is one of the most overlooked parts of Spring cleaning. Going as far as replacing your standard filter with a more robust one with a higher rating will help keep you even healthier this year as they catch smaller particles to ensure your home is void of allergen triggers, chemicals and even odors.

Family Day Ideas

Home Tips Jag Dhamrait 17 Feb

Mother with her daughter and son baking Family Day treats while father looks on For those who celebrate Family Day, I thought I would highlight some ideas for special things you can do this weekend and on Family Day with your loved ones, and remind them how much you care!

From crafts and cooking to volunteer work or exercise classes, below are a few ways you can celebrate Family Day this year:

Cook a Meal Together: From making mini personalized pizzas to cooking up a brand-new recipe or baking something delicious, the kitchen is a great space for family time and making fun memories!
Get Crafty: Time to break out the glitter, glue and fun! Set up a craft station at your house this Family Day to entertain younger children – and reawaken your inner child! Don’t be afraid to get messy and create something fabulous.
Volunteer: A great way to make an impact (and bond with your family while you’re at it) is to volunteer your time together! Consider reaching out to a local organization or finding an event, such as a park clean-up, to participate in.
Try an Exercise Class: Want to enjoy your family and get a little exercise while you’re at it? Try joining a ZUMBA workout or an online exercise class! Not only is this a fun activity you can do with your kids from home, but it is a great way to teach them about health and start setting up healthy habits for life.
Record a Message: Sometimes, the entire family isn’t able to get together but recording a message together and sending it to those aunts, uncles and grandparents who live elsewhere is a great way to celebrate your family no matter where they are in the world.

No matter how you spend it, I hope you have a wonderful Family Day and I wish you and yours the best to come.

Understanding Reverse Mortgages

Mortgage Tips Jag Dhamrait 18 Jan

senior couple hugging and laughing at home

Did you know? Reverse mortgages are continuing to gain popularity for older homeowners in Canada! For many Canadians who are looking to retire but currently facing high debt load and ongoing expenses, as well as reduced income, it can be a challenge. This is where the reverse mortgage can help!

This product is also a great option for anyone wanting to assist their elderly parents. Instead of selling the home and moving them to a care home or assisted living, a reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for in-home and ongoing care costs.

The goal of the reverse mortgage is to allow Canadians over 55 years to tap into the equity of their home, which assists in comfortable financial living. With a reverse mortgage, however, borrowers are not required to make regular payments. This allows them a considerable inflow of cash, without having to pay off what they owe! The only time payment will be required is when you sell or move out of your home.

Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts.

Beyond being able to cash in on your home’s equity, a reverse mortgage also has:

No monthly mortgage payments
No income or credit qualifications
Very low / little paperwork required
Title and ownership of property remain in homeowner’s name
Flexible options to break term early if needed
Penalty waived in the event of death or care home placement to preserve the estate

If you are struggling financially, or want to have a little extra equity on hand to pay off existing debts, gift money to family, expand your quality of life or simply increase your investment portfolio, contact me today! I would be happy to discuss the possibility of a reverse mortgage in further detail with you and ensure it is the best product to suit your needs.

Post-Holiday Debt Consolidation

Mortgage Tips Jag Dhamrait 10 Jan

Couple sitting in kitchen looking at bills The holidays are a season of giving and often times, households can often find themselves carrying some extra debt as we enter the New Year.

If you happen to be someone currently struggling with some post-holiday debt, that’s okay! Whether you’ve accumulated multiple points of debt from credit cards or are dealing with other loans (such as car loans, personal loans, etc.), you are likely looking for a way to simplify your payments – and reduce them.

Rolling them into your mortgage could be the perfect solution. In fact, consolidating other forms of debt into your mortgage has multiple benefits, including:

Helping you pay off your loans over a longer period of time
Allowing for reduced interest rates when compared to a credit card
Being easier to track with one single payment per month
Reduce your total monthly outlay of debt repayments

If you’re still not sure if this is the right solution for you, here is an example… if you have $30,000 of credit card debt, you are probably paying approximately $600 per month and $500 per month of that is likely going directly to interest. If you let me help you to roll that debt into your home equity and monthly mortgage, your payment for this $30,000 portion would drop down around $175 per month, with interest charges closer to $140 per month. That is huge savings!

While debt consolidation through refinancing will increase your mortgage, the benefits can be well worth it when it comes to interest savings, time and stress. Keep in mind, you’ll need a minimum of 20 percent equity in your home to qualify for this adjustment.

If you are looking for a way to simplify (or get out of) debt, reach out to me today! I would be happy to take a look at your current mortgage and walk you through the debt consolidation process, or help you come up with an alternative option that may help suit your needs.

Time to Check-In with your Mortgage!

General Jag Dhamrait 19 Jan

There has never been a better time for your annual mortgage health check-up! By organizing a quick mortgage review each year, it may yield you some fruitful financial savings.

Your home loan review this year will examine the most common potential monthly savings opportunities, including high-interest credit card debt or fixed loan payments. Reviewing your mortgage terms and options annually could result in having more money left over at the end of each month – and who doesn’t want that?!

For instance, are you exercising your penalty free extra payment privileges? Do you have any? Prepayment privileges allow you the opportunity to pay up to 20% extra per month and a total of up to 20% lump sum per year – without penalty! This means that for a $300,000 mortgage on a 25-year amortization, a 20% monthly payment increase can generate $18,000 worth of savings AND help you to pay off your mortgage 5 years earlier! When you add-on the annual lump sum of $2,500, the savings are increased to just over $25,000 for the year and bumps you up to being mortgage-free 8 years earlier! You can also use My Mortgage Toolbox app to calculate the potential savings from an extra payment.

When it comes to mortgage payments, another great question for your annual check-up is whether or not you are on the best payment frequency for your cash flow and to best optimize savings! Most lenders offer various payment frequency and an annual mortgage review can help identify the best frequency based on changing needs and cash flow situations. A monthly payment is simply a single large payment, paid once per month; this is the default that sets your amortization. A 25-year mortgage, paid monthly, will take 25 years to pay off but includes the added burden of one larger payment coming from one employment pay period. Alternatively, an accelerated bi-weekly payment pays your mortgage every two weeks. This frequency allows the mortgage payment to be split up into smaller payments vs a single, larger payment per month. This is especially ideal for households who get paid every two weeks as the reduction in cash flow is more on track with incoming income.

These accelerated bi-weekly payments also offer interest savings, as you are actually making an extra payment each calendar year. For instance, a $300,000 mortgage on an accelerated by-weekly payment schedule will pay off your mortgage two and a half years faster and generate approx. $8,000 in savings!

That’s like getting a $10,000 a year raise just by changing your payment frequency! You can use My Mortgage Toolbox app to also calculate these payment differences.

Another area to look at during your mortgage check-up are your penalties. Breaking your mortgage term early, and before the scheduled contract maturity date, will almost always incur a penalty. The amount depends on various factors such as how far you are into the existing term, your current interest and rate type, your existing lender, etc. However, with today’s rates sitting at such a historical low, there can still be savings! Now, if you break your mortgage early and incur a penalty, you can still come out ahead. For instance, it is possible to save $20,000 with a new low rate and incur a $15,000 penalty, which still puts you $5,000 ahead! Having an annual mortgage review can look at these options and determine if it is a benefit for you to chase these historically low rates.

Beyond your current payments and interest rate, consumer debt outside of the mortgage is another important area for review. Did you know? The average Canadian has $30,000 of credit card debt, at approximately 20% interest?! Reviewing your home equity situation could yield $10,000 savings, per year, by rolling debts into your home equity loan. Contact me today to discuss this further and see if it is an option for you!

Pay more to save more, pursue lower rates even with a penalty, and debt consolidation are just three examples of the financial savings an annual mortgage check-up with your mortgage professional can do! With interest rates at historic lows, now is the time to investigate all your options and perhaps save yourself thousands of dollars per year, especially if your current interest rate is over 3%! Imagine what you could do with the savings – anything from renovating or investing to going on a much-needed vacation or putting money towards your children’s education.

Completing a straightforward annual review will keep your home financing as lean and trim as possible. In other words, you will have a clean bill of mortgage health, which is just what the doctor ordered!

Contact me, your mortgage agent to set up a mortgage check-up today!

Jag Dhamrait
T: 647-883-7790
E: jag@dlccastle.ca

Apply now!

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Jag Dhamrait, Reverse Mortgage Specialist

Mortgage Agent Level 2

General