Monthly Mortgage Newsletter January 2021!

IN THIS ISSUE

Hi scott

Welcome to the January issue of my monthly newsletter!

As we ease into 2021, we have some great tips to help get you started and refresh your space. From the Pantone of the Year for 2021 to annual mortgage check-up tips and home maintenance strategies, we have you covered!

Thank you for your continued support and introductions!
I hope you have a wonderful year.

The Pantone Color Institute has published their 2021 Pantone trends, which features 10 standout colors as well as 5 core classics to help bring some extra spark to fashion and home this New Year.

This year’s Pantone offers a range of shades that combine a “level of comfort and relaxation with sparks of energy that encourage and uplift our moods” according to Leatrice Eiseman, Executive Director of the Pantone Color Institute. This year’s choices are not only bold and illustrative, but also combine our desire for flexibility and color choice that lasts year-round.

On the 2021 Pantone we have an inspiring palette composed of marigold, cerulean, rust, illuminating yellow, French blue, mint, amethyst, burnt coral and vivid raspberry! Paired with these are the core hues of inkwell, gray, buttercream, desert mist and willow beige.

To utilize this year's incredible colors, without wasting your time or money, try sprinkling them throughout your home as accents to brighten and uplift your space. Consider throw-pillows and rugs or other accent pieces such as swapping out your curtains, lampshades or even a quick reupholster on worn chairs to help liven up your space in time for the new year!

From comforting oranges and friendly yellows, to calming and restoring greens and blues, the 2021 Pantone palette is sure to infuse your year with reawakened senses and a fresh perspective!

Looking for more inspiration? Check out the Dominion Lending Centres Pinterest page.

There has never been a better time for your annual mortgage health check-up! By organizing a quick mortgage review each year, it may yield you some fruitful financial savings.

Your home loan review this year will examine the most common potential monthly savings opportunities, including high-interest credit card debt or fixed loan payments. Reviewing your mortgage terms and options annually could result in having more money left over at the end of each month - and who doesn’t want that?!

For instance, are you exercising your penalty free extra payment privileges? Do you have any? Prepayment privileges allow you the opportunity to pay up to 20% extra per month and a total of up to 20% lump sum per year - without penalty! This means that for a $300,000 mortgage on a 25-year amortization, a 20% monthly payment increase can generate $18,000 worth of savings AND help you to pay off your mortgage 5 years earlier! When you add-on the annual lump sum of $2,500, the savings are increased to just over $25,000 for the year and bumps you up to being mortgage-free 8 years earlier! You can also use the My Mortgage Toolbox app to calculate the potential savings from an extra payment.

When it comes to mortgage payments, another great question for your annual check-up is whether or not you are on the best payment frequency for your cash flow and to best optimize savings! Most lenders offer various payment frequency and an annual mortgage review can help identify the best frequency based on changing needs and cash flow situations. A monthly payment is simply a single large payment, paid once per month; this is the default that sets your amortization. A 25-year mortgage, paid monthly, will take 25 years to pay off but includes the added burden of one larger payment coming from one employment pay period. Alternatively, an accelerated bi-weekly payment pays your mortgage every two weeks. This frequency allows the mortgage payment to be split up into smaller payments vs a single, larger payment per month. This is especially ideal for households who get paid every two weeks as the reduction in cash flow is more on track with incoming income. 

These accelerated bi-weekly payments also offer interest savings, as you are actually making an extra payment each calendar year. For instance, a $300,000 mortgage on an accelerated by-weekly payment schedule will pay off your mortgage two and a half years faster and generate approx. $8,000 in savings!

That's like getting a $10,000 a year raise just by changing your payment frequency! You can use the My Mortgage Toolbox app to also calculate these payment differences. 

Another area to look at during your mortgage check-up are your penalties. Breaking your mortgage term early, and before the scheduled contract maturity date, will almost always incur a penalty. The amount depends on various factors such as how far you are into the existing term, your current interest and rate type, your existing lender, etc. However, with today's rates sitting at such a historical low, there can still be savings! Now, if you break your mortgage early and incur a penalty, you can still come out ahead. For instance, it is possible to save $20,000 with a new low rate and incur a $15,000 penalty, which still puts you $5,000 ahead! Having an annual mortgage review can look at these options and determine if it is a benefit for you to chase these historically low rates.

Beyond your current payments and interest rate, consumer debt outside of the mortgage is another important area for review. Did you know? The average Canadian has $30,000 of credit card debt, at approximately 20% interest?! Reviewing your home equity situation could yield $10,000 savings, per year, by rolling debts into your home equity loan. Contact me today to discuss this further and see if it is an option for you!

Pay more to save more, pursue lower rates even with a penalty, and debt consolidation are just three examples of the financial savings an annual mortgage check-up with your mortgage professional can do! With interest rates at historic lows, now is the time to investigate all your options and perhaps save yourself thousands of dollars per year, especially if your current interest rate is over 3%! Imagine what you could do with the savings – anything from renovating or investing to going on a much-needed vacation or putting money towards your children's education.  

Completing a straightforward annual review will keep your home financing as lean and trim as possible. In other words, you will have a clean bill of mortgage health, which is just what the doctor ordered! Contact me to set up a mortgage check-up today!