Are you ready for a financial reset?

Joel Olson • Dec 20, 2021

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As we come to the end of the year, a lot of people are going to take stock of their current financial situation.

Have they saved enough money this year?

Have they paid down enough debt?

Have they put themselves in a situation where they're moving forward financially?

Or, maybe they're looking forward with anticipation to the New Year...

Maybe there is a job change that's on the horizon.

Maybe there is a kid heading off to college that they have to financially prepare for.

Maybe retirement is on the horizon.

And now is the time to make sure that that can be done in a financially acceptable way.

Whatever it is, people are taking a look at their financial situation and making adjustments and changes to make sure they are in the best position possible.

Obviously, we're in a unique situation in the world where people have seen major benefits on our current world situation and major disadvantages that may have affected them as well.

Now's a great time to look at doing some type of financial reset as it relates to your mortgage and all debts.

What does a financial reset look like?

Number one, what do you have for debt right now?

If you have any debt that's involved with credit cards, that's not being paid off a monthly basis and I'm paying eight 9% or even higher at 20 to 24%...

...if you have loans, maybe there are loans that are somewhere in the eight to 10% range or even in the four to 5% range, whether they be student loans, car loans, or just personal loans, with interest rates being below 2% and in many cases mid 1%, you are going to save a ton of interest by rolling these into the mortgage.

With the vast amount of equity you would have achieved with the escalating housing market, now is a time where there's an opportunity to do so that may not have existed one year ago or even six months ago.

Now is the time to look at putting that debt into your mortgage to save interest but also to vastly improve your monthly payment.
We are seeing clients that are having their monthly cash flow go up by as much as $1500 to $2,000 a month.

How much of a difference would that make your life if you had to pay $1500 to $2,000 per month?

That's only one way of looking at it.

For some people it's just about saving the interest.

Maybe they keep their payments the same but have that loan payment be paid at a much lower interest rate, which means they will save interest and ultimately pay that loan off much much faster.

The second way so may look at a financial reset, is maybe now's the time you're going to look at updating your real estate.

What I mean by that?

Now's the time to look at renovations.

Maybe now's the time to put in those big renovations that you've been deterring because you haven't had enough money... now's the time you have equity to do so.

So if you are within a few years of improving the roof, updating your septic and sewer systems, updating your furnace, etc., now would be the time to take money out to do that.

Perhaps your home would benefit by being completely redone...

...both kitchens and bathrooms make a ton of difference to your value.

Maybe now's the time you look at adding a suite to the home, adding extra income on a monthly basis.

Now's the time where you can do that without having to put any extra cash flow in, even possibly doing an expansion of your home can also be in the cards to add extra money and the renovation, and cost of doing so would more than pay off even though you're increasing your borrowing load.

The third way you may be looking at a financial reset would be using your equity towards investment.

Now, maybe this involves buying another property.

Many people are surprised to know though the equity in their house they may buying the property and putting none of their own money in!

Maybe that involve buying a rental property.

Maybe if you're looking at your kids going into college, maybe you buy them a property that they're going to live in during college that will then become a rental property when they are finished.

In many situations like that, you could do that for as little as 5% down.

Maybe you could be looking at other investment opportunities.

With a wise strategy, you could look at investing into stocks or businesses or other types of investment opportunity that can have a greater yield than the very, very low interest rates you're going to pay on your mortgage.

All of these options are things to look at when you're looking at a financial reset.

If I can help you with any different options or just reviewing your particular situation to see if there's opportunity to do some financial reset, please do reach out.

You could literally see yourself being a completely different situation and going to the New Year in a much, much better way than you've ever seen before!

The easiest way to discuss any strategies is to schedule a time on my calendar here:

https://calendly.com/joel-20/discovery-zoom-call

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Protect Yourself with a Pre-Approval

By Joel Olson • 07 May, 2024

There is no doubt about it, buying a home can be an emotional experience. Especially in a competitive housing market where you feel compelled to bid over the asking price to have a shot at getting into the market. Buying a home is a game of balancing needs and wants while being honest with yourself about those very needs and wants. It’s hard to get it right, figuring out what’s negotiable and what isn’t, what you can live with and what you can’t live without. Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel. One of the biggest mistakes you can make when shopping for a property is to fall in love with something you can’t afford. Doing this almost certainly guarantees that nothing else will compare, and you will inevitably find yourself “settling” for something that is actually quite nice. Something that would have been perfect had you not already fallen in love with something out of your price range. So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed. Protect yourself with a mortgage pre-approval. A pre-approval does a few things It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend. It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau. It will outline the necessary supporting documentation required to get a mortgage so you can be prepared. It will secure a rate for 30 to 120 days, depending on your mortgage product. It will save your heart from the pain of falling in love with something you can’t afford. Obviously, there is nothing wrong with looking at all types of property and getting a good handle on the market; however, a pre-approval will protect you from believing you can qualify for more than you can actually afford. Get a pre-approval before you start shopping; your heart will thank you. If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Costs Associated with Buying Property

By Joel Olson • 23 Apr, 2024

When calculating if you can afford to purchase a property, don’t just figure out a rough downpayment and quickly move on from there. Several other costs need to be considered when buying a property; these are called your closing costs. Closing costs refer to the things you’ll have to pay for out of your pocket and the amount of money necessary to finalize the purchase of a property. And like most things in life, it pays to plan ahead when it comes to closing costs. Closing costs should be part of the pre-approval conversation as they are just as important as saving for your downpayment. Now, if your mortgage is high-ratio and requires mortgage default insurance, the lender will need to confirm that you have at least 1.5% of the purchase price available to close the mortgage. This is in addition to your downpayment. So if your downpayment is 10% of the purchase price, you’ll want to have at least 11.5% available to bring everything together. But of course, the more cash you have to fall back on, the better. So with that said, here is a list of the things that will cost you money when you’re buying a property. As prices vary per service, if you’d like a more accurate estimate of costs, please connect anytime, it would be a pleasure to walk through the exact numbers with you. Inspection or Appraisal A home inspection is when you hire a professional to assess the property's condition to make sure that you won’t be surprised by unexpected issues. An appraisal is when you hire a professional to compare the property's value against other properties that have recently sold in the area. The cost of a home inspection is yours, while the appraisal cost is sometimes covered by your mortgage default insurance and sometimes covered by you! Lawyer or Notary Fees To handle all the legal paperwork, you’re required to hire a legal real estate professional. They’ll be responsible for transferring the title from the seller's name into your name and make sure the lender is registered correctly on the title. Chances are, this will be one of your most significant expenses, except if you live in a province with a property transfer tax. Taxes Depending on which province you live in and the purchase price of the property you’re buying, you might have to pay a property transfer tax or land transfer tax. This cost can be high, upwards of 1-2% of the purchase price. So you’ll want to know the numbers well ahead of time. Insurance Before you can close on mortgage financing, all financial institutions want to see that you have property/home insurance in place for when you take possession. If disaster strikes and something happens to the property, your lender must be listed on your insurance policy. Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation. Moving Expenses Congratulations, you just bought a new property; now you have to get all your stuff there! Don’t underestimate the cost of moving. If you’re moving across the country, the cost of hiring a moving company is steep, while renting a moving truck is a little more reasonable; it all adds up. Hopefully, if you’re moving locally, your costs amount to gas money and pizza for friends. Utilities Hooking up new services to a property is more time-consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services. It doesn’t really make sense to buy a property if you can’t afford to turn on the power or connect the water. So there you have it; this covers most of the costs associated with buying a new property. However, this list is by no means exhaustive, but as mentioned earlier, planning for these costs is a good idea and should be part of the pre-approval process. If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!