While waiting at my chiropractor's office yesterday, I watched Jim Rohn, talk about his "Ant Philosophy". Jim Rohn is kind-of-like a preacher for business people and entrepeneurs. The Ant Philosophy is based on the habits of a common ant. In the summer, ants work hard, and persistantly to gather up as much as they can for the winter. In the winter they sit back and enjoy the fruits of their labour.
Many people who work in real estate, do the exact opposit of the common an. It's natural to work hard during the spring real estate market and then do little in the summer. That's where I see real estate professionals, be it realtors, other mortgage professionals, home inspectors run into financial difficulty.
The Ant Philosophy is similar to Warren Buffet's mantra of doing the exact opposit of what others do. If you've ever tried this in your own life, you'll see how challenging it can be. Peer pressure is intense.
How does this relate to real estate and mortgages? For example, if you have a variable-rate mortgage with an amazing rate of under 3%, instead of riding out the mortgage because everyone is complementing you on the rate, look at locking in before rates go up...try the ant philosophy.
If you'd like to discuss your mortgage (or the Ant Philosophy), please call me at The Mortgage Centre 519-763-3900 ext.1001 or e-mail at lastovic.s@mortgagecentre.com.
Showing posts with label homes in guelph. Show all posts
Showing posts with label homes in guelph. Show all posts
Friday, July 27, 2012
Thursday, April 19, 2012
Here's one way to pay-off your mortgage if you have rental properties
This week I met Sam who has been an astute real estate investor over the last 7 years. He's been strategic about his real estate purchases, focusing on good locations and positive cash flow.
Although he's retired, Sam still has a significant mortgage of $250,000 on his primary residence and carries a secured-line-of credit (SLOC) of $70,000. Don't be surprised at this debt level, because more and more baby boomers are not paying-off their mortgages before they retire. In this case, Sam went through a divorce almost 10 years ago where his assets where divided, which is the main reason he still carries a mortgage.
The great thing about Sam's situation is that he has a stable teacher's pension and he's done a good job at managing his real estate investments. He has enough equity in his real estate investments to pay-off his secured line-of-credit. This SLOC could be an issue in the future, given that rates on SLOC's show a 10-year historic average rate of about 6%.
Sam's meeting with his accountant this week to determine how to minimize the tax implications of this restructuring. But I'm a big believer of using the equity in your real estate to help your personal finances, while still maintaining a positive cash flow on the properties.
Here's a good link from a recent story in the Financial Post on how to manage SLOC debt.
Although he's retired, Sam still has a significant mortgage of $250,000 on his primary residence and carries a secured-line-of credit (SLOC) of $70,000. Don't be surprised at this debt level, because more and more baby boomers are not paying-off their mortgages before they retire. In this case, Sam went through a divorce almost 10 years ago where his assets where divided, which is the main reason he still carries a mortgage.
The great thing about Sam's situation is that he has a stable teacher's pension and he's done a good job at managing his real estate investments. He has enough equity in his real estate investments to pay-off his secured line-of-credit. This SLOC could be an issue in the future, given that rates on SLOC's show a 10-year historic average rate of about 6%.
Sam's meeting with his accountant this week to determine how to minimize the tax implications of this restructuring. But I'm a big believer of using the equity in your real estate to help your personal finances, while still maintaining a positive cash flow on the properties.
Here's a good link from a recent story in the Financial Post on how to manage SLOC debt.
Friday, June 3, 2011
Should you buy a house even if you have consumer debt or student loans to pay?
In the last week, I've see three clients in similar situations. All three clients had good paying jobs, where in their late 30's and had over $20,000 of consumer debt outside of traditional car loans. Should they be considering buying a home? Here's my opinion...if you have any comments on this topic, please share them on my blog!
A home is one of the only appreciating assets you'll own. The trouble with these particular clients is that they have kept waiting to pay off their debt and are now almost 40 years old and still do not own a home. My recommendation would be to review their family budget with them and find a monthly mortgage payment that will help them get into a house, while also developing a plan to pay down their debt.
If they had savings to put as a down payment they could also look at paying their debt down with their savings and getting a cashback mortgage, which gives them the money for the down payment. Remember that you can withdraw up to $25,000 from an RRSP the year you buy a home under the RRSP Home Buyer's Plan. That money does not need to go to the down payment, it could go to paying off debt. Now that's a good idea!
A home is one of the only appreciating assets you'll own. The trouble with these particular clients is that they have kept waiting to pay off their debt and are now almost 40 years old and still do not own a home. My recommendation would be to review their family budget with them and find a monthly mortgage payment that will help them get into a house, while also developing a plan to pay down their debt.
If they had savings to put as a down payment they could also look at paying their debt down with their savings and getting a cashback mortgage, which gives them the money for the down payment. Remember that you can withdraw up to $25,000 from an RRSP the year you buy a home under the RRSP Home Buyer's Plan. That money does not need to go to the down payment, it could go to paying off debt. Now that's a good idea!
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