mortgage Archives - Ellen MCKAY

May 15, 2022 Books

A Guide To Canadian Personal Finance Books – Part 3

15Today’s post will cover two books focusing on personal financial planning areas. If you’re interested in more general books on personal finance planning, then be sure to check out Part 1 and Part 2 of this series!

I’ll cover these two books:

House Poor No More
Beat The Bank

House Poor No More

House Poor No More, by Romana King, focuses on everything you need to know about home ownership in Canada. Her book covers the following:

What you need to know about buying a home in Canada.
What home improvements will give you the most bang for your buck.
How to manage your mortgage debt, so you aren’t house poor.
What kind of tax deductions and credits you may be eligible for as a homeowner.
How to reduce the monthly expenses associated with owning a home.

So whether you’re thinking of taking the plunge into home ownership or already own a home and are trying to make the most of it, House Poor No More can provide you with the guidance you need to avoid being house poor!

Beat The Bank

The full title of this book is Beat The Bank: The Canadian Guide To Simply Successful Investing, and Larry Bates writes it. Once you’ve set up a budget and paid down debt, you’re ready to start investing to save for your future – but how do you get started?

Many people are intimidated by investing, so they either avoid it and buy only “safe” investments (like bonds) or pay high fees without realizing they are doing so. And high fees can cost you thousands of dollars every year, stripping away your gains!

With Beat The Bank, Larry Bates is trying to help hard-working Canadians keep more of their money. Larry’s professional background is in banking and investments, so he knows the ins and outs of investing. With his book, he can help you:

Learn how to avoid high fees, which means you’ll lose less of your returns.
Find out all the benefits of switching to low-cost investment products.
Put together a simple approach to investing that doesn’t take hours upon end to implement.
Gain the knowledge you need to achieve long-term investing success without paying high fees.

You work hard for your money and deserve to keep your investment gains – not lose them to high fees!

Both Of These Books Are Great For Focused Financial Learning

Once you’ve got a strong base for your financial planning, you’re ready to move on to more complicated topics like investing and making the most of home ownership. Which of these topics are you more interested in? Tell me in the comments!

April 1, 2022 Lessons Learned

Building on Good Money Decisions

Question marks Today I’m going to cover a fun topic – building on good money decisions! I’ll cover:

What qualifies as a money decision.
What the best money decision I’ve ever made is.
How to build off good money decisions.

What qualifies as a good money decision?

To me, any financial decision that sets you on the path to financial success is a good money decision. These are some examples of good money decisions:

Buying a house well below the amount of mortgage you’re approved for. With house prices these days, that’s easier said than done!
Having a budget or a way to track your spending. Keeping on top of how much money you have going in and going out is always a good money decision.
Taking on a side hustle or getting a raise at work.
Sit down with your partner to discuss finances and ensure you’re on the same page regarding saving and spending.
Learning how to separate your needs from your wants.

What’s the best money decision I’ve ever made?

I’d say that I think the best money decision I’ve ever made was paying off my house as quickly as possible. I bought a house with a reasonable down payment and a modest mortgage. My husband and I were both working and had no kids, so we could focus on paying down the mortgage as quickly as possible.

I choose bi-weekly payments and then make a lump sum extra payment yearly. This is an excellent option if you’ve the self-discipline to put aside extra cash and not spend it. If you don’t have the self-discipline to put aside cash, you may prefer to look into options like accelerated mortgage payments.

This is my best decision because it gives us so much financial freedom! When we had to deal with increased expenses and a decreased income, we weren’t strapped for cash because we no longer had to pay a mortgage.

How do I build on a good money decision?

As with bad money decisions, moving forward on a good money decision is very individualized. These are just a few examples:

If you’ve paid off your house or car, resist the temptation to upgrade unless you need to.
If you’ve put aside money to invest, be sure to do your research before buying any investment.
If you’ve paid off debt, don’t run it up again!

Tell me about the best money decision you’ve ever made!

Let me know the best money decision you’ve ever made and how you accomplished it!

August 1, 2020 Mortgage, Saving money

How I paid off my mortgage in less than 5 years

A mortgage is one of the biggest debts you’ll ever take on. Unless you inherit money or win the lottery, chances are, you’ll need to take out a mortgage if you want to buy a house. For our first house, my husband and I did take on a mortgage – but we paid it off in less than 5 years! It was a huge relief for us to have it paid off. It meant we saved a lot of money we could use elsewhere that we didn’t have to spend on interest.

In this post, I’m going to talk to you about the three main things we did to help ensure we could pay off our mortgage quickly:

Buy less house than we were approved for.
Opt for bi-weekly payments.
Put down a lump sum payment every year.

1. Buy less house than we were approved for

My husband and I were both working and making decent salaries. But we were house shopping in Toronto which wasn’t cheap! I think we were approved for a mortgage of over 500,000 dollars, but the idea that much debt just made me nervous. We certainly could have bought a much nicer, bigger house if we’d used that amount. But we would have been “house poor” and it would have taken us years to pay off. In the end, we took a mortgage of 100,000 dollars and paid for the rest of the house using savings.

2. Opting for bi-weekly payments

When you have a bi-weekly mortgage payment, you are giving the bank a payment every two weeks instead of monthly. I tied it to when my paycheck came in, so we’d always have enough in the bank to cover our costs – never had to worry about overdraft charges!

With bi-weekly payments, you actually ended up making one extra payment a year, which means you are paying your mortgage off that much faster. But you aren’t making any changes to your budget or payment schedule, so it doesn’t come as a surprise to you when that “extra” payment comes out of your bank account!

3. Put down a lump-sum payment every year

Another option we took advantage of was putting down a lump-sum payment. A lump-sum payment means that you put down a certain amount towards the principal once a year. Most banks have a limit on how much of a lump-sum you can put down (it’s usually a certain percentage, such as 10%, of the total amount you borrowed in the first place). This is a great way to quickly cut down how much of the principal you still owe – and you have total control over it. Even if you can only put 500 dollars down – it’s still helping cut down your principal.

Now it’s your turn!

You’ve now learned three great ways you can pay your mortgage off quickly:

Borrow a lower amount than you are approved for
Select bi-weekly instead of monthly payments
Make a lump-sum payment each year

Some banks may charge a few for selecting a bi-weekly payment schedule or lump-sum payments, so check with your bank before you proceed with either of these options.

Happy mortgage-free living!