It’s a brand-new year, and if you’re up for it, a chance for a brand-new version of you. No matter how you plan to start 2024, you might have a few ideas about changing things up in the months ahead. Whether you dream of fixing up your home, going on exciting trips, or getting rid of some debts, there’s a helpful option – the CHIP Reverse Mortgage! The CHIP Reverse Mortgage is designed exclusively for Canadian homeowners aged 55 and better. It enables you to convert up to 55% of your home’s value into tax-free cash, while staying in the home you love and without worrying about monthly mortgage payments. Let’s explore how the CHIP Reverse Mortgage can help you accomplish your goals in the coming year and beyond.

Debt-Free Living and Financial Freedom

One of the primary concerns for many individuals entering the new year is the burden of existing debts. The CHIP Reverse Mortgage by HomeEquity Bank presents an opportunity to take control of your financial situation by providing tax-free cash that can be used to settle outstanding debts. Imagine starting the year with a clean slate and embracing a lifestyle free from the constraints of debt.

Pursue Your Passions and Hobbies

One advantage of the CHIP Reverse Mortgage lies in its versatility, allowing you to use the unlocked home equity for activities that bring you joy. Whether you’re investing in a hobby you’ve always been passionate about, or even joining a gym to stay active and healthy, the CHIP Reverse Mortgage offers the financial flexibility to pursue your interests without compromise.

Support Loved Ones’ Aspirations

If you have family-oriented resolutions, the CHIP Reverse Mortgage provides an avenue to support your loved ones’. Whether it’s helping a child or grandchild with tuition fees or contributing to a family member’s entrepreneurial endeavors, the tax-free cash from the CHIP Reverse Mortgage can empower you and your family.

Age In Place with Home Retrofitting

As the new year prompts reflections on long-term well-being, the CHIP Reverse Mortgage offers a practical solution for retrofitting your home to age-in-place comfortably. Use the funds to make necessary modifications, ensuring that your living space evolves with your changing needs while maintaining the independence and security of your home.

The CHIP Reverse Mortgage by HomeEquity Bank is a sound financial solution that provides means to accomplish your New Year’s resolutions by tapping into the wealth you’ve built in your home. Contact your Dominion Lending Centres mortgage expert to discover how the CHIP Reverse Mortgage can unlock a year filled with possibilities and turn your dreams into­­ reality.

written by DLC Chief Economist Dr. Sherry Cooper.

As we enter the New Year, it’s always fun to reflect on the previous twelve months and take a look at what is trending as we move forward.

If you’re unfamiliar with the Pantone of the Year, it is more than just a colour to paint your walls. Since 2000, the Pantone Colour Institute has been indicating a colour of the year and, for many, this is seen as a representation of the current moment in time helping us to reflect on the culture and state of the world. Think of it like a snapshot in time!

For 2024, the Pantone color of the year is “Peach Fuzz”; which is notably a warm and cozy hue to feed and nourish the soul.

During this post-pandemic period of turmoil around the economy, mortgage industry, and housing market, many of us are currently in need of more nurturing and comfort. This colour signifies the importance of caring and community even more as we enter 2024.

As the calendar turns over, take inspiration from Pantone to make the New Year one of comfort, healing and peace for yourself and those around you. With interest rates forecasted to drop towards the later half of 2024, housing and job markets set to stabilize and inflation slowly reducing to normal, we have some stability to look forward to.

To ensure you can make 2024 as comfortable as possible, don’t hesitate to reach out to us for advice. Managing your finances can be a great way to reduce stress and leave time for more important things! Renewals are on the rise, and this can be a great opportunity for you to rebalance your mortgage contract, review your interest rate and terms, and update your payment schedule to make the most of your monthly cashflow.

Is your mortgage coming up for renewal? Do you know about all the incredible options renewing your mortgage can afford you? If not, we have all the details here on how to make your mortgage renewal work for you as we start to think about 2024.

Get a Better Rate

Are you aware that when you receive notice that your mortgage is coming up for renewal, this is the best time to shop around for a more favourable interest rate? At renewal time, it is easy to shop around or switch lenders for a preferable interest rate as it doesn’t break your mortgage. With interest rates expected to come down as we move into the New Year, taking some time to reach out to me and shopping the market could help save you money!

Consolidate Debt

Renewal time is also a great time to take a look at your existing debt and determine whether or not you want to consolidate it onto your mortgage. For some, this means consolidating your holiday credit card debt into your mortgage, for others it could be car loans, education, etc. Regardless of the type of debt, consolidating into your mortgage allows for one easy payment instead of juggling multiple loans. Plus, in most cases, the interest rate on your mortgage is less than you would be charged with credit card companies.

Start on that Reno

Do you have projects around the house you’ve been dying to get started on? Renewal time is a great opportunity for you to look at utilizing some of your home equity to help with home renovations so you can finally have that dream kitchen, updated bathroom, OR you can even utilize it to purchase a vacation property!

Change Your Mortgage Product

Are you not happy with your existing mortgage product? Perhaps you’re finding that your variable-rate or adjustable-rate mortgages are fluctuating too much and you want to lock in! Alternatively, maybe you want to switch to variable as interest rates start to level out. You can also utilize your renewal time to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

Change Your Lender

Not happy with your current lender? Perhaps a different bank has a lower rate or a mortgage product with terms that better suit your needs. A mortgage renewal is a great time to switch to a different bank or credit union to ensure that you are getting the value you want out of your mortgage if you are finding that your needs are not currently being met.

Regardless of how you feel about your current mortgage and what changes you may want to make, if your mortgage is coming up for renewal or is ready for renewal, please don’t hesitate to reach out to a DLC Mortgage Expert today! We’d be happy to discuss your situation and review any changes that would be beneficial for you to reach your goals; from shopping for new rates or utilizing that equity! Plus, we can help you find the best option for where you are at in your life now and help you to ensure future financial success.

written by DLC Chief Economist Dr. Sherry Cooper.

We Canadians are no strangers to the chill of the winter season! As we shift into the final few months of 2023, now is a great time to check your home before the cold front hits. Below I have included a few tips that could help you save on bills, prevent future repair costs, and be more comfortable all winter long.

• Inspect Your Fireplace: There is no better time than now to have your fireplace inspected to ensure optimal efficiency and heat output. Whether you have a wood-burning, gas, or electrical fireplace, proper maintenance can go a long way for your heating bill!

• Maintain Your Furnace: While you’re having your fireplace inspected, don’t forget to maintain your furnace! If your furnace is getting up there in age, you may want to also consider replacing it as typically newer furnaces are more efficient than the previous generation, which could help save on energy costs. Either way, ensuring your furnace is in working order will guarantee top output and a cozy winter!

• Clean The Gutters: The last thing you want is your gutters to be clogged when the snow hits! Cleaning your gutters from Fall leaves and other debris will help ensure proper drainage for melting snow. For those who want to go the extra step, consider gutter guards which can help keep out unwanted objects from your gutters.

• Examine Your Roof: While you’re prepping your gutters for the winter, it is a good idea to also examine your roof. A few things to look for include broken or missing shingles, damaged flashing, staining from water leakage, and ventilation.

• Consider a Programmable Thermostat: According to experts, a degree drop in your home temperature can measure up to 1% on your heating bill. For those of us who don’t like to have cold feet all season, smart thermostats are a great way to keep warm and optimize your energy savings! Ideally, you want to set your thermostat to turn on in the morning, off when you go to work, and back on in the evening to ensure a toasty welcome.

• Insulate Windows: Always be sure to check your windows for any gaps or water leakage and get them resealed as soon as possible. If you live in a particularly cold location, consider swapping out your windows to double-paned glass for an added layer of insulation. Another tip to keep the cold from seeping in through your windows is swapping out your curtains for a heavier, thermal-lined set which can do wonders!

• Check Your Pipes: Checking pipe joints for leaks that could cause rot and damage will save you trouble in the future. Repair any cracks you find, especially those around electrical outlets and alarm system lines. You can also consider foam pipe insulation, which is fairly easy to install and could help prevent energy loss and potential water damage from frozen pipes.

• Stock Up on Supplies: There are a few things you might want to consider stocking up on ahead of time for the winter season, such as flashlights and batteries, ice melt, extra pet food and canned goods, and an emergency storm kit that includes an extra flashlight, candles, portable radio, water, and snacks.

With a little preparation, you can keep your home in good shape without needing to feel the cold bite of winter!

written by DLC Chief Economist Dr. Sherry Cooper.

Building a new home is a super exciting endeavor as you opt to create the perfect space for you and your family. However, building a home is not without its costs and potential surprises… to mitigate bumps on your homebuilding journey and avoid costly mistakes, consider the following tips:

Set a Realistic Budget

When building your own home, it is vital to be realistic about your budget and what you can afford. Making a list of wants versus needs can be a good way to determine what is required, and where you can spend extra money should your budget allow for it. When constructing your budget, don’t forget to include construction costs from materials to labour, as well as permits, inspections, landscaping and unforeseen contingencies. The contingency fund should be approximately 10-15% of your budget put aside to cover unforeseen issues or changes.

Hire Reputable Individuals

From your architect and your contractor to your landscaper and inspector, it is vital to have the right people in the right positions. This will ensure that you not only get the best advice, but experienced individuals will also help to steer you through the process and mitigate potential issues. Be sure to do your research, ask for references and ensure the individual(s) you hire are licensed and insured.

While you’re researching individuals, it can also be a good idea to get multiple quotes. While you may have a contractor you like, reaching out to other individuals can help ensure you’re getting the best rate.

Review Contracts Carefully

Read and understand all contracts and agreements thoroughly between your contractor and yourself, your designer, your home inspector, etc. Ensure that everything is in writing and that you and your builder are on the same page regarding expectations, timelines, and costs.

Make and Follow Your Plan

Once you have your budget and the right people on the project, it is time to make a plan. You must work with an architect or designer to ensure that your new home aligns with your needs, lifestyle and budget. This should also include future plans – do you want to have children? Plan on adopting a pet or two? Possibly need space for an older family member in a few years? Getting this right from the beginning will help to avoid potential changes to the plan down the line, which will reduce expansions to cost and timelines.

Choose Your Materials Carefully

Choosing to invest in energy-efficient features and materials can help you to reduce long-term utility costs. While initially these installations may be more costly, they will work to save you money in the long run. Whenever possible, make sure these materials are also as durable as possible to ensure longevity and low maintenance requirements.

Secure the Necessary Permits

Ensure that you obtain all required permits and approvals before starting construction. One of the most important reasons to do this is to ensure that the work being done is safe, but having permits and inspections is also vital to ensure you can get insurance on your new build. Non-permitted renovations or build additions, changes, etc. can result in trouble securing insurance, on top of fines and other potentially costly issues.

Invest in Inspections

Having inspections done throughout the process of building your home can save you issues down the line by ensuring that all the installations are done correctly and safely and that your house meets the proper codes for electrical, plumbing, etc.

By taking proper steps and being proactive throughout the home-building process, you can minimize the risk of costly mistakes and ensure that your new home meets your expectations while staying within your budget.

written by DLC Chief Economist Dr. Sherry Cooper.

Get to know the important basics before you choose your mortgage.

You have to be sure you select what is most important to you – lower rates or flexibility. Before you choose a mortgage, take some time to study mortgage types:

Closed Mortgage: If you want consistency with respect to rates and the length of your mortgage agreement, a closed mortgage is best for you. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

• Predictability and consistency with respect to payment amount
• Often comes with lower interest rates
• Limited flexibility with paying down the mortgage faster
• Cannot change interest rate during the term of mortgage

Convertible Mortgage: Want the best of both worlds? Then consider a convertible mortgage. Convertible mortgages are flexible yet offer minimal risk. Often with a lower interest rate than an open mortgage, convertible mortgages provide the opportunity to switch to a longer-term closed mortgage without penalty.

• Provides an opportunity to take advantage of lower interest rates and switch to a closed rate without penalty
• Offers lower interest rates than an open mortgage

Open Mortgage: If you are looking for flexibility with regard to paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sump payments or pay off your mortgage before the term expires; however, this flexibility comes often with a higher interest rate – which can result in higher monthly payments.

• Maximum flexibility; no penalty for making lump sum payments or paying off your entire mortgage before the term expires
• Higher interest rate
• Best for those looking to pay off their mortgage as soon as possible

Still not sure which type of mortgage is best for you? Contact a DLC Mortgage Expert today!

written by DLC Chief Economist Dr. Sherry Cooper.

November is Financial Literacy Month and we have the tips to ensure your financial game is on point this Fall as we head into the New Year!

Nail Down Your Budget
Understanding the basics of budgeting and tracking your income versus spending is a fundamental part of financial literacy and control. Building a budget can help you define your spending habits, and determine where there is room for adjustments, and this gives you a chance to review your cash flow situation to ensure it aligns with your financial goals.

Ideally, your budget will fall close to the range of the following:

• 32% of your income for housing, including property taxes, maintenance, utilities, etc.
• 26% of your income for life, including groceries, medical, childcare, vacations, fun, etc.
• 16% of your income for transit, including car payments, bus passes, gas, etc.
• 16% of your income for debt, including credit cards, lines of credit, loans, etc.
• 10% of your income for savings, including long-term planning, retirement, etc.

DOWNLOAD OUR FIRST HOME BUDGET TEMPLATE!

Dedicate Your Savings

Many individuals will have a savings account that is connected to their chequing account. This can be a bad habit, as it becomes too easy to use your savings account as a second account versus as a dedicated account for emergencies, vacation planning, or more. Ideally, you are putting 10% of your monthly income into savings whenever possible.

Live Within Your Means

This one seems simple, but it is surprisingly difficult to do – especially if you don’t have a proper budget! By putting together a budget as mentioned above, you can see where you are spending your income and how it compares to what you are bringing in. Ideally, you are adjusting your spending to ensure that you are not going over the cash flow available to you with priority expenses first, followed by leisure.

Understand Your Banking Options and Interest Rates

Having a loan with a 16% interest rate, a credit card that you’re barely making payments on, or a savings account that doesn’t give much back are all areas for consideration when it comes to truly understanding your options. Sometimes a different bank, account type, or loan type can make a big difference to your financial position. There are plenty of options, especially at mortgage renewal time, for consolidating your debt, changing your mortgage, getting a better interest rate, and more!

LEARN MORE ABOUT CONSOLIDATING DEBT!

TIPS TO PAY OFF YOUR MORTGAGE FASTER!

Check Your Credit

An annual review of your credit score and credit report is a huge part of financial literacy as this plays a key role in your overall financial status. Your credit score affects your loans, credit cards, mortgages and the interest rate you can qualify for so be sure to understand where you fall on the scale.

GET HELP UNDERSTANDING YOUR CREDIT SCORE!

Plan for Big Expenses

Are you looking to replace your car? Planning a family vacation? Need to renovate your kitchen or replace some furniture? These are all typically larger expenses that should be planned for in advance. While sometimes an appliance will break and need to be replaced, the goal is to have funds in your budget (or savings) for when things come up unexpectedly but also to plan out spending before large purchases or bookings. This ensures that when you get on that plane or drive off that car lot, you know you’re already paid!

Review Your Financial Progress

A lot of people set up a budget but then they don’t update it! Ideally, if any of your expenses change, such as an increase to your streaming services bill or utilities go up, you are updating your budget in real-time to ensure that you are keenly aware of what is coming into your account and going out. Generally, an annual review is a good idea for an overall clean-up of your budget but keeping it maintained all year long will help you get the best picture of your financial situation.

Stay Informed

When it comes to financial literacy, knowledge is power. With so many resources by your side from your mortgage broker to our Enriched Tips, Economic Insights and more it is easy to keep your finger on the pulse and be mindful of current economic changes, as well as new products or opportunities such as 40-year amortization mortgages!

Whether you’re new to financial literacy and budgeting, or simply want a refresh, taking control of your finances and better understanding your spending, cash flow and options will help you get the most out of your income!

written by DLC Chief Economist Dr. Sherry Cooper.

If you have a basement suite or rental property and you are currently looking for a tenant, there are some things to know! Whether this is your first tenant or you have other rental properties, it is a good idea to familiarize yourself with the specifics to ensure a harmonious tenancy.

As always, your responsibility as the landlord is to keep your rental properties in good condition and ensure they meet health, safety, and housing standards. However, as a landlord, you also have additional responsibilities around the rental agreement and tenant regulations.

Tenancy Agreement

Landlords are required to prepare a written agreement for every tenancy. Bear in mind, if this agreement is not prepared the standard terms for your province will still apply, especially if a security deposit is paid. This agreement should clearly outline the following:

• Who the agreement is between
• The length of the tenancy
• Rent amount and due date
• Required deposits (if any)
• Pet restrictions (if any)
• Additional terms (smoking or non-smoking, etc)

The tenancy agreement should also outline if there is the ability to add a roommate, and whether or not utilities, parking, storage, laundry, etc. are included.

Deposits

Typically, a security or damage deposit is requested by the landlord to establish tenancy and cover any unexpected issues that may arise. The deposit can be no more than half of the first month’s rent.

If you are charging a pet deposit fee, note that guide or service pets are exempt from any damage deposits. In addition, you cannot charge fees beyond the pet damage deposit.

Move In

To ensure the move-in goes smoothly, tenants and landlords should schedule a move-in time that works for everyone. At the beginning of the tenancy, you may also consider an inspection before the new tenant has moved in to ensure everyone is on the same page and the condition of the unit is clear in regard to any potential damages or fixes needed.

As a landlord, you are also responsible for changing the locks (at your cost) should the new tenant request it.

Additional Considerations

As a landlord, you will want to assess the suitability of any new tenant before signing the agreement. There are a few things you can do to ensure a smooth process and the right choice of tenant:

• Ask for proof of identity
• Thoroughly check all references
• Contact previous landlords to ask about rental and payment history
• Conduct a credit check to confirm income and financial suitability
• Get the names of all persons to be living in the rental unit

Once you have reviewed the above, you will be in a good position to determine if the potential tenant is a good fit for the rental space.

However, keep in mind that you cannot refuse to rent to a tenant based on any discriminatory aspects such as race, gender, sexual orientation, religion, etc. In addition, you cannot refuse to rent to individuals on income assistance.

While it can seem like a lot, with the proper preparation and understanding of tenant laws and regulations in your area, you can ensure a smooth and successful rental process!

written by DLC Chief Economist Dr. Sherry Cooper.

Let’s talk about escrow! While this arrangement may not necessarily impact your mortgage, it can be helpful to understand should anything come up throughout your term.

What is Escrow

Starting with the basics, what IS escrow exactly?

Escrow refers to a financial agreement where assets or finances are held by a third party on behalf of two other parties (such as a homeowner and bank). The escrow party is a neutral entity that holds funds during the transaction process.

Homebuyer’s Escrow

Most of you will likely be familiar with this from a real estate and notary perspective, which is known as a homebuyer escrow. This is when you sell or purchase a home, your money is transferred to the notary for processing property transfer taxes, existing overdue payments, real estate fees, etc. Once they have processed it and the transaction is completed, the remaining funds then get deposited to you and your mortgage begins.

Escrow is also the instance where you put a deposit down on a property and the cheque or deposit is held until the transaction is completed.

Homeowner’s Escrow

There is also another escrow known as homeowner escrow. This is slightly different from your homebuyer’s escrow whereby the agreement ends when the sale is closed. For homeowner escrow, the account is designed as a holding area for funds to pay off various property-related costs, such as:

• Homeowners insurance premiums
• Private mortgage insurance (PMI) premiums
• Flood or wildfire insurance premiums
• Property taxes

Homeowners may choose to have their funds in escrow for these expenses to avoid missing any payments. Lenders would generally collect these expenses as part of the borrower’s monthly mortgage payment.

Benefits of Escrow

There are a variety of different benefits for using an escrow depending on whether you are a buyer, seller or lender including:

• Buyers:
  • Buyer may get their earnest money back if a sale falls through.
  • Earnest money is often applied to down payment or closing costs.
  • Mortgage escrows break insurance premiums and property taxes into monthly payments.
  • A lender manages the mortgage escrow account on the homeowner’s behalf.
• Sellers:
  • Escrow ensures that a property doesn’t change hands before the sale is complete.
  • If the buyer doesn’t uphold the purchase agreement, the seller could keep the earnest money.
• Lenders:
  • Can ensure payments are made on time and reduce lending risks.
  • Managing the account can help avoid late fees or liens against the property.

Drawbacks of Escrow

As with any potential agreement, there can be drawbacks to escrow that are important to consider and understand before you jump in. These disadvantages include:

• Setting up your escrow account may require an upfront deposit.
• You may be charged additional fees for escrow services.
• Insurance premiums or property tax increases could affect monthly mortgage payments.
• Moving your money into escrow can limit the amount of cash flow on hand.

If you are looking at buying or selling in the future, don’t hesitate to reach out to a DLC mortgage expert to determine how escrow could affect the process and your mortgage agreement! They would be happy to review your situation and recommend the best course of action before you move ahead.

written by DLC Chief Economist Dr. Sherry Cooper.

Are you thinking about co-signing on a loan? If you’re looking to help out a family member or loved one, this is a great way to do that as a co-signer can help overcome stress testing and borrowing limits.

However, it is important to be aware of the implications when co-signing on any loan.

1. Credit History: If you are acting as a co-signor or guarantor on any loan, you essentially allow them access to your credit history. This means, if the borrower is late on the payments or there are issues with the loan, it will affect your credit score as well as theirs.
2. Legal Implications: Always be sure to understand the taxes, legal and estate situations that go along with co-signing, should the borrower fail to pay. A lawyer can help you review the loan agreement and advise of any items you may need to take note of.
3. Timeline: Understanding how many years the co-signer agreement will be in place and what your options are for making changes will help you determine the scope of the loan and if you are able to make changes at any point should the borrower become able to assume the entirety of the mortgage on their own in the future.
4. Personal Income Tax: Depending on the loan, you may have an obligation to pay capital gains taxes so it is a good idea to review your personal tax situation with an accountant prior to signing off on the co-borrower agreement to ensure no surprises.
5. Relationship with Borrower: This is a vital consideration for going in on any loan. Do you trust the individual? Are you aware of their financial situation? Are you willing to potentially put yourself at risk to assist them? These are all important questions as many of us may want to help out family or loved ones, but it is important to ensure that the individual is reliable.
6. Future Finances: Lastly, consider your future finances and if you had any plans in the future that could be impacted by an additional loan. How much flexibility do you need for yourself and your family? If you have plans to refinance for a renovation or make changes to your own mortgage, being a co-signor could affect your options.

Co-signing for a loan always requires careful consideration as it is a large responsibility. However, when done correctly and with people you trust, it can be a great way to assist family members or loved ones with their goal of homeownership. If you are considering co-signing on a loan and have any questions or would like more clarity, please don’t hesitate to reach out to a DLC Mortgage Expert today!

written by DLC Chief Economist Dr. Sherry Cooper.