I have a client - let's call him Ted - who recently reached out to me to do some mortgage planning.
As you approach retirement, before relocating or downsizing, or otherwise before losing your regular predictable employment income, you may want to consider (it's smart financial planning in my opinion) to position yourself to retain access to your home equity and be aware of your lending options. Once you lose your regular employment income, your lending options are drastically reduced and your home equity may become trapped forcing you to sell or change your plans if there is an acute need for money. I always say, the best time to apply for credit is when you don't need it! Please enjoy the video (click the image) and the supplementary discussion below.
What do Bob & Kathy of Calgary and John & Betty from Ottawa both have in common? They both happened to contact my office this past week and they both were trying to figure out mortgage options to finance the purchase of a vacant parcel of land somewhere 3 or 4 hours west of their home cities. For now, the plan was to use the place as a weekend and summer getaway and God knows they could use a getaway in this crazy Covid-ridden world! Down the road, each couple will eventually build a retirement home or cottage.
"Interest rates are prices, and sometimes you get what you pay for."
One of the questions that I get asked all the time, which stumps me a little bit more than you might think it should, is "what is your best mortgage rate?". Typically when people ask this question they mean what is the lowest rate that I have access to, and while it should be easy enough to answer, the truth is that this question represents a common yet fundamental misunderstanding about mortgages and interest rates.
Before you can buy a house, you need to make sure you can afford it and that there will be financing options available to you. This is where a pre-approval comes in. As mortgage lending criteria has become more strict over the years, the pre-approval and the increased certainty and confidence that goes with it has become an essential first step for the would-be-home-buyer.