Roman and Christine are a charming family full of financial contradictions. By day, Roman manages cash and balances budgets. But, when it comes to their own finances, the more they make, the more they spend. They would like to be able to help their kids to purchase their first homes, as their parents did for them – but, at the rate they spend, they will have nothing but receipts to leave as their legacy.

That’s the scenario for the first episode of the recently broadcast TV series “Burn My Mortgage“, that attempts to show homeowners how to reduce their mortgage burden by doing small sacrifices that will eventually lead to a substantial decrease in the number of payment years and to savings of tens of thousands of dollars off their mortgages.

In this first episode the family is spending $17,000 a year on sports equipment and events, plus $12,000 a year dining out, ordering in and entertaining friends, and another $17,000 a year on things like vacations, housekeeping, landscaping and dry cleaning.

By the end of the show, the family learns that by cutting spending on those unneeded luxuries by half, they can pay their mortgage off much sooner and save a big chunk of money in interest. The message is that ignorance and a little sacrifice is preventing many families from reaching a mortgage-free life. For example, in this first episode,  Roman and Christine’s mortgage details before entering the program are:

• Mortgage Amount: $450,000
• Amortization: 25
• Interest cost: $130,000
• Actual Cost of Mortgage: $580,000

and after some common sense corrections it becomes:

• Mortgage Amount: $450,000
• Amortization: 11
• Interest cost: $55,000
• Actual Cost of Mortgage:  $505,000

You can watch the full first episode of “Burn My Mortgage” online at the following link:
http://www.wnetwork.com/

According to the recent TD Canada Trust 2010 Repeat Home Buyers Report, as well as packing up their worldly goods, one-third of home buyers also take their mortgage with them when they move house.

Before deciding if it is a good idea to port your existing interest rate and terms and conditions to the new place, mortgage advisors say, check rates and penalties and ask yourself how long you plan to stay in your new home.

“If you’re going to live there for the remaining term of your existing mortgage then it makes sense [to port] because you save yourself the penalties,” says Farhaneh Haque, mobile mortgage specialist, TD Canada Trust, Toronto. “You want to consider the cost of the penalty in real dollars versus the savings on the interest rate on the new property if the rate [you would get on a new mortgage] is lower. If you save more than the penalty that you pay today, then financially it makes sense for you to bite the bullet now and move into the new mortgage taking it at the current rate.”

Next question is how much equity do you have, and will you need more than your current mortgage to buy the new residence. Advisors say check the details of your mortgage but that many lenders will do what is known as “blend and extend.”

“Say, today you have a $250,000 mortgage at 3.59% over 35 years, you’re going to be able to maintain that portion of your mortgage,” says Karen Blomquist, mortgage specialist with Mortgage Intelligence in Calgary. “Let’s say rates go up to 7%. Rather than renegotiating a brand new mortgage of say $350,000 at 7% … they’ll take the $250,000 at the 3.59% that you are enjoying today and then they’ll take the additional $100,000 and put it at the new rate and do a combination rate overall.”

The bottom line is that although most prime mortgages are portable nowadays, you must make sure to read the small print to understand the possible restrictions, as well as being aware of any fees attached to the porting of the mortgage.

Please do not hesitate to contact us if you need assistance to evaluate the available options.

Read more:
http://www.nationalpost.com/

As the cost of energy becomes a substantial burden in our budget, it is comforting to know that by exercising some care and common sense, there are simple ways to use less energy, spend less money, and reduce your carbon footprint, all while keeping all home utilities functioning.

By using less energy you are contributing to helping preserve the environment. Many power plants are fueled by oil, coal and natural gas, so the less energy we use, there is less pollution in the air, less risks to our health, less smog and acid rain and more of a brake on the pernicious effects of climate change.

To help Canadian homeowners reduce energy and save money the October issue of Consumer Reports Canada offers these quick and practical energy-saving tips:

1. Program your thermostat. By reducing your energy use at night or when you’re not home, you can save up to 20 per cent on yearly heating and cooling bills.
2. Unplug when not in use. According to the magazine, between “five and 10 per cent of residential electricity goes to devices that draw power when they’re off or in standby mode.” Time to unplug the video games, kids.
3. Stop pre-rinsing. Running dirty dishes under the tap before throwing them in the dishwasher wastes close to 30,000 litres of water a year — and that doesn’t include the cost of heating the water.
4. Cold water works. Several laundry soap manufacturers offer cold-wash detergent designed to remove stubborn stains and dirt without having to use scalding hot water. To further reduce costs, switch to off-peak hours and only wash/dry full loads.
5. Fix leaky ducts. Seal and insulate heating and cooling ducts throughout your house to prevent energy loss. It could save you hundreds of dollars a year.

For more energy-saving tips, please visit these helpful websites:

• everykilowattcounts.ca
• www.hydroone.com
• www.mei.gov.on.ca
• www.sustainableabc.com