Everyday we hear about our national debts, personal debts and just debt in general and I thought it would be a great idea if we could delve into debt a little more and understand how it affects us in our everyday lives.

GDS and TDS are your debt ratios. Why are they important? Lenders look at these two ratios amongst other variables, when making their decisions on whether to approve a loan or not.

Many borrowers think that their credit bureau scores are the most important factor when being considered for a loan – this is only an indicator and cannot tell your whole story!ID-100213554-1

GDS stands for Gross Debt Service ratio and it is the percentage of the borrower’s income that is needed to pay all required monthly housing costs (mortgage payment, property taxes, heat and 50% of condo fees). The acceptable ratio is 32%.

TDS stands for Total Debt Service ratio and it is the percentage of the borrower’s income that is needed to cover housing costs (GDS) plus any other monthly obligations that a borrower has, such as credit card payments and car loan payments. The acceptable ratio is 40%. Continue reading

ID-100234582A few weeks ago I met a woman who is considering a divorce and is currently separated from her spouse after 12 years of marriage. She was so lost and my heart went out to her. I realized that there are probably a lot of people in the same boat as her and they like her, don’t know where to turn when separation or divorce happens.

Emotions are very high in these situations and like any emotional situation, you don’t want to make hasty decisions that can impact the rest of your life or that of your children. I advised her that there were a lot of things she would need to consider in relation to her present and future as well as current mortgage. Continue reading

ID-100144154Every year around this time, people are frantically putting money into their RRSP’s and getting their receipts organized for the annual income tax return – it is a dreaded chore for many but can pay off huge if you take care to do it right!

What do I mean by doing it right? Well if you are employed, that means knowing all of your expenses that concur with your employment – ie. if you are a salesperson, you can claim expenses such as meals (50% of the expenses), mileage and gas and in some cases entertainment, although CRA has really limited the amounts you can claim. If you are self-employed and work from home, you can claim much more than that – it is best to get advice from a tax or accounting professional.

This article has more to do with how to benefit from one’s tax return and how to best spend your tax return. Whether it’s credit card bills, car loans or line’s of credit, many of us are carrying debt and trying to get control of our finances. A recently released report shows that the average Canadian’s debt (not including their mortgage) is rising and continues to rise. The average debt per person is $26,768 – and it is the highest debt level since the credit bureau started tracking debt levels in 2004. Continue reading

As a Real-Estate investor, I attend a lot of networking groups to meet like-minded investors, make new connections and of course learn something new that will help me improve or increase my portfolio.

As a mortgage agent, I have been researching how to help myself and others get access to 2nd mortgages but most people don’t know that you can use any of your registered accounts (RRSP, RESP, RIF, TFSA, etc) to invest in an arm’s length mortgage.

The distinction is arm’s length – which simply means that you cannot invest in your own mortgage or somebody that is related to you by blood. An arm’s length mortgage is one where you invest in another investor, a friend, a colleague, etc. Continue reading

I first started my real estate “career” as a home stager – it was from that experience that I was exposed to real estate investing and took the plunge to become an investor in Rent-To-Own single family homes, as I really wanted to help others become homeowners. After the last year or so, I thought by becoming a mortgage agent, I could also help people, who were not interested in Rent-To-Own because not everyone will qualify for a Rent-to-Own property and or be interested in this mode of homeownership.

I have been asked by people how do I ethically serve my clients by being both a mortgage agent and an investor? I am not pushing one way or another but preferably looking at a person’s overall debt picture. I will first interview my clients about their goals and aspirations as it applies to homeownership; I then gather all of their income and debt numbers and then finally look at their credit bureau. Continue reading

I had a great meeting last week with a prospective client.  They wanted to know how to pay off their 25 year mortgage in 10 years.  It was a huge focus for them as they wanted to take the money left over after paying off their mortgage and put it towards their retirement savings.  They are both in their 40’s and want to be debt free by their early 50’s.

They like many of us did not take savings seriously and so now in their 40’s find themselves with a hefty mortgage and not much in the way of savings.  I assured them that to do so would mean making sacrifices, such as less traveling, which they both love to do and eating at home instead of eating out, which they also love doing.  They assured me they were committed.  Of course there were many more sacrifices they would have to make but these were two of the biggest in their particular scenario. Continue reading