What are you going to do with all that equity?

Joel Olson • January 20, 2022

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Valuations are in for 2022, but what can you do with it?

What are you gonna do with all that Equity from your recent home assessment? 


There is no question that more and more people have been asking us about the surprise on a huge gains on their personal assessment. 


First off, a lot of people misunderstand how these assessors are covered in the first place. 


That assessment is based on the “sight unseen” value of your home from July of the previous year. 


That means a system takes comparable sales in the area and determines the value based on July of last year in your marketplace. 


It doesn't take into consideration any recent repairs you may have done, or any updates you've done to the property since its last sold.


The most recent data normally an assessment has on hand is the MLS data from the last time the house sold, so for instance, if your house has had major upgrades since you've last sold it or you've owned it for quite a long time, it is assuming that it's in original condition and that depreciation has been taken into consideration on your Property Assessment. 


This makes the vast increase on your property assessments even more surprising, knowing that logically it means that assessments are much lower than what true values are. 


Nobody will question the fact that between July and December of last year, values went up in nearly every market across Canada. 


Now it, by no means, means that it is accurate… the system may have made errors. 


The system may have used data that was incorrect. 


It doesn't mean that your house is worth what is on the assessed value. 


In fact, it doesn't mean it's accurate at all. 


It certainly doesn't mean, as we hear from clients all the time, that your house has already went up 40% in value … and it doesn't mean your house automatically 30% of value is just a barometer of value based on a system last year. 


It also definitely means you shouldn't try to appeal it to get that a little bit higher so you can pay more taxes.


Anyway, what it does mean and what is an unquestionable truth these days is that houses across Canada, and for that matter,

North America, are up in value. 


And it means you have more equity in your house simply because houses have gone up in value vs a year ago… and by no other reason, whether you've done repairs, whether you've done anything to your house.


What you have to think about are just a few things. 


First of all, a lot of people may look at this market and go, “is now the time to sell?” 


“Maybe I should cash out and take that money.”


This could be a useful strategy, especially if you're thinking about downsizing or you're thinking about moving to a market that may be less expensive.


However, remember the market’s up everywhere. 


So, even though you will sell high you will also buy high, so many of the gains that you will have achieved, you'll also see that when buying and so you'll more or less transfer your equity.


It doesn't mean it's a bad idea, but that it’s a worthy consideration. 


In fact, this is the same logic that I would say to somebody that's selling a home feeling the market is depressed. 


They're selling low but they're buying low as well. 


Now, the worthy conversation is whether or not the equity in your home needs to be put to work. 


We put up blogs and videos on this all the time. 


But now is the time to review your equity options. 


If you haven't already, even if you look at doing a refinance or did a refinance in spring or summer of last year, it may be time to relook at that again. 


The first thing you ought to look at is if now is the time to do renovations. 


If you are up for major renovations such as your roof, such as your siding, or things that are big ticket items, now's the time to get that cash at a very very low cost to you. 


Down the road, it might be more difficult to finance those repairs that you inevitably have to do. 


Of course, now it's also time to think we're updating that flooring, that painting, that floor plan, all that type of thing in your home.

 
But you can look at more unconventional ideas as well: Is now the time to add an addition? 


Is now the time to add an extra suite? 


All of those things will achieve extra income in your house that could more than pay for the nominal $50 $100 extra you're paying on your mortgage payment. 


If we move off of renos, now's the time to look at any high interest debt that you might be carrying. 


Maybe it's credit cards, maybe it's car loans, maybe it's student loans…


Now's the time to roll those into the mortgage at a lower rate. 


Now you'll hear people say that this can be a problem in doing so. 


As you don't really pay off the debt, you just move it. 


Now a more higher level strategy on something like this is to say I'm going to continue to pay the same amount of money but have that money applied to my mortgage. 


So I'm paying it off at a much more aggressive rate, meaning I'm going to pay it off faster and cheaper, paying less interest over time.


After that, you ought to look at the fact that there could be some opportunity to leverage your equity for other investments. 


Certainly business investment can make sense. 


Certainly there could be some investment you could be making in all types of things. 


These ideas, with the help of a good qualified professional, may make sense for you. 


But in particular, now may be the time to look at other real estate investments. 


Maybe you're thinking about buying a piece of land.


You could maybe buy that piece of land with cash from taking the equity out of your home. 


Maybe you're thinking about buying that second home, which might be a condo for kids to live in during the time they go to college. 


Or maybe it's a home that your elderly parents will live in for a while. 


Or maybe it's a second home you're going to be using for a recreational basis. 


Maybe that's a beach home or maybe that's a ski home. 


All of these things are options that you could utilize the equity without tapping into your hard earned savings or other investments you might have that could cause you very dearly when it comes to taxes. 


It's a good idea for you to get a hold of us so we can review all your equity options and make sure that you are doing things that may make a lot of sense in order to achieve your wealth goals in the next coming year. 


Don't wait until you've missed out on further market gains. 


Let's make sure we go through some options today and see what makes sense for you. 


Now of course, you may also decide that now's the time to take advantage of low interest rates and aggressively pay off your mortgage to be mortgage free faster. 


That of course is an option too, but again this is why it makes sense to schedule a time so we can go through some great options and see what works best for you.


Schedule your call today!

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Joel Olson
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Mortgage Approval 101: GDS & TDS Explained

By Joel Olson • December 30, 2025
Can You Afford That Mortgage? Let’s Talk About Debt Service Ratios One of the biggest factors lenders look at when deciding whether you qualify for a mortgage is something called your debt service ratios. It’s a financial check-up to make sure you can handle the payments—not just for your new home, but for everything else you owe as well. If you’d rather skip the math and have someone walk through this with you, that’s what I’m here for. But if you like to understand how things work behind the scenes, keep reading. We’re going to break down what these ratios are, how to calculate them, and why they matter when it comes to getting approved. What Are Debt Service Ratios? Debt service ratios measure your ability to manage your financial obligations based on your income. There are two key ratios lenders care about: Gross Debt Service (GDS) This looks at the percentage of your income that would go toward housing expenses only. 2. Total Debt Service (TDS) This includes your housing costs plus all other debt payments—car loans, credit cards, student loans, support payments, etc. How to Calculate GDS and TDS Let’s break down the formulas. GDS Formula: (P + I + T + H + Condo Fees*) ÷ Gross Monthly Income Where: P = Principal I = Interest T = Property Taxes H = Heat Condo fees are usually calculated at 50% of the total amount TDS Formula: (GDS + Monthly Debt Payments) ÷ Gross Monthly Income These ratios tell lenders if your budget is already stretched too thin—or if you’ve got room to safely take on a mortgage. How High Is Too High? Most lenders follow maximum thresholds, especially for insured (high-ratio) mortgages. As of now, those limits are typically: GDS: Max 39% TDS: Max 44% Go above those numbers and your application could be declined, regardless of how confident you feel about your ability to manage the payments. Real-World Example Let’s say you’re earning $90,000 a year, or $7,500 a month. You find a home you love, and the monthly housing costs (mortgage payment, property tax, heat) total $1,700/month. GDS = $1,700 ÷ $7,500 = 22.7% You’re well under the 39% cap—so far, so good. Now factor in your other monthly obligations: Car loan: $300 Child support: $500 Credit card/line of credit payments: $700 Total other debt = $1,500/month Now add that to the $1,700 in housing costs: TDS = $3,200 ÷ $7,500 = 42.7% Uh oh. Even though your GDS looks great, your TDS is just over the 42% limit. That could put your mortgage approval at risk—even if you’re paying similar or higher rent now. What Can You Do? In cases like this, small adjustments can make a big difference: Consolidate or restructure your debts to lower monthly payments Reallocate part of your down payment to reduce high-interest debt Add a co-applicant to increase qualifying income Wait and build savings or credit strength before applying This is where working with an experienced mortgage professional pays off. We can look at your entire financial picture and help you make strategic moves to qualify confidently. Don’t Leave It to Chance Everyone’s situation is different, and debt service ratios aren’t something you want to guess at. The earlier you start the conversation, the more time you’ll have to improve your numbers and boost your chances of approval. If you're wondering how much home you can afford—or want help analyzing your own GDS and TDS—let’s connect. I’d be happy to walk through your numbers and help you build a solid mortgage strategy.

Wait! Are You Really Ready to Buy That Home?

By Joel Olson • December 23, 2025
So, you’re thinking about buying a home. You’ve got Pinterest boards full of kitchen inspo, you’re casually scrolling listings at midnight, and your friends are talking about interest rates like they’re the weather. But before you dive headfirst into house hunting— wait . Let’s talk about what “ready” really means when it comes to one of the biggest purchases of your life. Because being ready to own a home is about way more than just having a down payment (although that’s part of it). Here are the real signs you're ready—or not quite yet—to take the plunge into homeownership: 1. You're Financially Stable (and Not Just on Payday) Homeownership isn’t a one-time cost. Sure, there’s the down payment, but don’t forget about: Closing costs Property taxes Maintenance & repairs Insurance Monthly mortgage payments If your budget is stretched thin every month or you don’t have an emergency fund, pressing pause might be smart. Owning a home can be more expensive than renting in the short term—and those unexpected costs will show up. 2. You’ve Got a Steady Income and Job Security Lenders like to see consistency. That doesn’t mean you need to be at the same job forever—but a reliable, documented income (ideally for at least 2 years) goes a long way in qualifying for a mortgage. Thinking of switching jobs or going self-employed? That might affect your eligibility, so timing is everything. 3. You Know Your Credit Score—and You’ve Worked On It Your credit score tells lenders how risky (or trustworthy) you are. A higher score opens more doors (literally), while a lower score may mean higher rates—or a declined application. Pro tip: Pull your credit report before applying. Fix errors, pay down balances, and avoid taking on new debt if you’re planning to buy soon. 4. You’re Ready to Stay Put (At Least for a Bit) Buying a home isn’t just a financial decision—it’s a lifestyle one. If you’re still figuring out your long-term plans, buying might not make sense just yet. Generally, staying in your home for at least 3–5 years helps balance the upfront costs and gives your investment time to grow. If you’re more of a “see where life takes me” person right now, that’s totally fine—renting can offer the flexibility you need. 5. You’re Not Just Buying Because Everyone Else Is This one’s big. You’re not behind. You’re not failing. And buying a home just because it seems like the “adult” thing to do is a fast way to end up with buyer’s remorse. Are you buying because it fits your goals? Because you’re ready to settle, invest in your future, and take care of a space that’s all yours? If the answer is yes—you’re in the right headspace. So… Are You Ready? If you’re nodding along to most of these, amazing! You might be more ready than you think. If you’re realizing there are a few things to get in order, that’s okay too. It’s way better to prepare well than to rush into something you're not ready for. Wherever you’re at, I’d love to help you take the next step—whether that’s getting pre-approved, making a plan, or just asking questions without pressure. Let’s make sure your homebuying journey starts strong. Connect anytime—I’m here when you’re ready.