Monthly Archives: January 2014

fixed vs variable interest rates

Fixed vs. Variable Interest Rates

Finding The Perfect Interest Rate For You

As a homebuyer and mortgage shopper one of your first decisions will be to choose either a fixed or a variable interest rate. Both types of rates have their benefits and downfalls, your selection should depend on what works for your personal situation. Qualifying for either will depend on your income, credit score and comfort level with fluctuating interest.

Take a look at our chart below and see where you fit in.

Fixed-Rate Interest

Variable-Rate interest

How your Mortgage Payment works: Your monthly payments stay the same for the entire mortgage term. Your monthly payments may change throughout the term.If rates go up significantly, your mortgage lender will notify you of the increase to your payment.
How the Interest works: Your interest rate stays the same for your mortgage term. Your interest rate fluctuates with changes in the Prime Rate that is set by the Bank of Canada.A variable rate will be quoted as Prime +/- a specified amount, such as Prime – 0.40%. Although the Prime rate can change, the relationship to prime will stay constant over your term.
Ideal for those who:
    • Follow a personal budget and enjoy predictability

 

    • Plan to pay out the mortgage over a longer term

 

    • Secure a low interest rate and want to keep it for the entire loan term.

 

    • Expect interest rates to increase in the near future

 

    • Plan to payout their mortgage over a short period of time

 

    • Their budget allows for an increase in housing costs

 

    • Are confident that lower rates will be available down the road

 

Key Benefits:
    • It’s clear how much of your payment goes towards principal and interest

 

  • You’ll know how long it will take to pay off your mortgage
  • Generally offers the lowest mortgage rate available

  • Could save you thousands in interest costs over the life of your mortgage

For more information on fixed vs. variable interest rates, or for advice on your personal situation Call our experts at 1-866-963-CMGC (2642).

CONTACT A CMGC REPRESENTATIVE

 

Verification

7 Myths of Bankruptcy – Busting Misconceptions for Smarter Money Management

Facts obliterate the myths! The same is true about the financial industry’s nightmare – Bankruptcy. Canadians experiencing financial stress often dread at the very talk of going bankrupt. However, some people take it in stride and jump on the bandwagon even when they have no idea about bankruptcy’s deep repercussions. The myths associated with going bankrupt often overshadow the desire for smarter money management.

Ignorance about financial matters further compounds the already grave situation. Our mortgage experts in Mississauga are often asked about the bankruptcy option with a load of misconceptions and myths attached to it. Let’s hear the top 7 myths related to bankruptcy and their solutions to make smart financial choices.

  1. Myth No. 1 – Going Bankrupt is as Easy as Pie

    Most people think declaring bankruptcy is simple way out of the financial mess. That this is the easier route to sort out your financial problems is the biggest misconception. In reality, the bankruptcy filing remains on the credit bureau report for a period of 6 years. Your credit score will have marks of bankruptcy for 6 years during which it will extremely difficult to secure credit. Not to mention the emotional baggage that includes guilt and shame that remains even longer.

  2. Myth No. 2 – Everyone is Eligible for Filing Bankruptcy

    General public seems to believe that every ‘Joe’ can easily go bankrupt with the support of government. Though most people can, there are severe consequences where going bankrupt is not the ideal solution. The exact factors include assets, collateral and future income levels. For some people, resolving financial mess is a better option than losing the match willingly.

  3. Myth No. 3 – There is No Other Option

    Totally untrue! There are several alternatives to this nightmare including debt management, debt consolidation, Formal and Informal consumer settlements, refinancing your mortgage and more. Every case is unique and depends on individual’s financial situation. Bankruptcy alternatives are best discussed with a credit counselor.

  4. Myth No. 4 – Bankruptcy will Cover All My Debts

    Remember, bankruptcy is not an elixir that will cure all your problems. There are myriad types of debts that it does not cover. For example, car loans or mortgages are often not covered. Student loans are also debatable since some students take long leaves from study and misuse the purpose of loan. Moreover, divorce debts and joint debts are debatable as well.

  5. Myth No. 5 – There Won’t Be a Single Penny Left in Your Pockets

    Going bankrupt does not mean you will lose everything. Most provincial laws ensure that you are not devoid of your life’s basic amenities like clothing and furniture etc provided their value is within set limits. Health and medical equipment are also not taken away. In some cases, homes without equity can be kept as well. Equity represents the market value of your home after deducting the amount owed by you against the home. If you are a worker, tools/machines related to your livelihood are not collected if their value is below set limits. In Canada, you will not face mortgage foreclosure.

  6. Myth No. 6 – Bankruptcy is Limited to Only Poor People

    People from every strata of society are affected by financial problems. From middle class to lower class and even the rich, all face monetary problems. Everyone seeks specific solutions to tackle debt. Bankruptcy is applicable to everyone who fails to pay their obligations.

  7. Myth No. 7 – Exhaust Every Credit Card and Just File for Bankruptcy

    Don’t think that you can shop around endlessly before declaring bankruptcy. It will only create problems and jeopardize your relation with the creditors. They can oppose your bankruptcy application and foil your entire plan. Remember, trustees are vital to secure discharge from financial obligations.

What Made you End up on this Road

While bankruptcy is an option as a last resort, it does not actually address the core problem. The issues at the very heart of the problem can be addressed once you ask yourself how you ended up in this mess. How did you pile on enormous debt? For once, sit down and think why you are struggling with debt? Ask yourself:

  • Are your incomes and expenses managed as per a planned monthly budget?
  • Do you save money for mortgages, emergencies or annual expenses?
  • Are there any specific long-term financial goals you are faltering with?
  • Do you suffer from non-financial or emotional issues that worsen your situation?

There are Other Options As Well – Explore Them First

Most people have never learned smarter money management skills. It sounds strange, but no school/college teaches children credit management skills or inculcates habits that promote sound financial health. Credit is a temporary fix. Handling deeper issues takes discipline. Mastering financial skills puts you in charge of your destiny. Explore mortgage refinancing, debt consolidation, renewal at better interest rates, credit counseling before opting for bankruptcy. For professional help, consult a good non-profit credit counseling agency or a local credit counselor in Mississauga.

Credit Counselling Vs. Debt Consolidation Loans

Debt consolidation and credit counselling are probably the best options a person can have in order to get out of his/her debt. However, people often end confusing both these terms. When struggling with debt, you need to calculate every possible calculation and determine every possible scenario so as to decide which debt relief option is the good for you. Once you arrive at a decision, you will certainly get monetary relief.

Why Choose Debt Consolidation?

Generally, debt consolidation is considered a very broad term. It works by combining all your debts into one but a manageable payment. People who have little or no understanding of the concept of debt relief end up thinking that debt consolidation is actually a big loan to pay other loans and therefore immediately jump on a conclusion. Although this is right but there are other options too which can help you equally well, like credit counselling.

Credit counselling is just a form of debt consolidation because it also follows the idea of consolidating of payments into one. One can get him/herself enrolled with a credit counselling program with a mortgage company. You will be required to send your payments to this company who will further distribute them for you.

What’s noteworthy is that both these debt relief options require a steady income in the absence of which debt consolidation loans are not possible. This is because without an income, you will not be able to pay the lender from which you have taken the consolidation loan. For credit counselling too, no counsellor will come forward to assist you. Without a fixed salary, all you can get is advice, but even that won’t help if you have no means to repay your loan.

Credit Counselling and Debt Consolidation

Usually, credit counselling companies are affiliated with creditors. They associate with these non-profit agencies so as to minimize the losses by giving free help and advice to those who are struggling to make payments. This help seems angel like when you are in dire need of help. Unlike credit counselling, debt consolidation does not necessarily involves a company connected with creditors. In fact, the lenders in this case don’t really care as to how you will use this money. They are only interested in how you will repay it. These factors are also same for commercial mortgage Mississauga.

Another major difference between credit counselling and debt consolidation is that you don’t really have to possess an impressive credit score for the former, while the latter depends a lot on it. In case of a counselling, if you can’t pay the monthly payments, then a debt management plan will help you out and you shall be fine. On the other hand, for a debt consolidation, a good credit score will help you gain maximum benefits of the loan that you have acquired to pay your debts. For instance, a good credit score can help you cut a deal with the best interest rates, while a bad one can cost you a lot through high interest rates.

Ultimately, the choice you make of a debt relief option will solely depend on how much load your finances can take. You need to be sure regarding your financial standing as this is the only way to get out of the debt-zone. Once, you have done all the essential analysis, step forward to choose the debt relief plan that will suit you best. We, at CanadaMGC, are debt consolidation Mississauga experts providing effective mortgage solutions. With our strategic debt relief plans, we have benefited hundreds of people. Visit us sometime to know more about the mortgage plan you think suits you best.