Published by DLC Marketing team.

If you have had to declare bankruptcy, you may be wondering what is next.

Bankruptcy is not a financial death sentence. In fact, there are a few things you can do after declaring bankruptcy to help reset your financial status and get a mortgage in the future.

While there is no wait requirement to apply for a mortgage after bankruptcy, it is important to allow your credit time to heal in order to ensure approval.

The first step to rebuilding your credit is getting a secured credit card. If you are able to show that you are responsible with this credit card by paying your balance in full each month and not overspending, it will help to improve your credit score.

Once you’ve re-established your credit, you can apply for a mortgage. What type of mortgage you can apply for, and whether or not you qualify, will depend on a few factors, such as: how long ago you declared bankruptcy, the size of your down payment, your total debt-to-service ratio (how much debt you are taking on compared to your total income) and your loan-to-value ratio (loan value versus the property value).

Depending on this, you will have three options for your future mortgage loan:

Traditional or Prime-Insured Mortgage

This is a traditional mortgage, which will typically offer the best interest rates. To apply for this type of mortgage after bankruptcy the following requirements apply:

Your bankruptcy was 2 years, 1 day previous
You have one-year of re-established credit on two credit items (credit card, car lease, loan).
You have a minimum down payment of 5% for the first $500,000 and 10% for any additional amount over that
You have mortgage insurance – required for all down payments under 20%
You have a total debt-to-service ratio of 44% maximum
Your loan-to-value ratio is 95% minimum
Subprime Mortgage

This type of mortgage falls between a traditional and private mortgage, meaning you qualify for more than private but not enough for a traditional loan. To apply for this type of mortgage:

Your bankruptcy was 3 – 12 months prior
You have a total debt-to-service ratio of 50% maximum
Your loan-to-value ratio is 85% minimum
Private Mortgage

If you don’t qualify for a traditional or subprime mortgage, you have the option of looking into a private mortgage. Typically, your interest rate will be higher on a private mortgage but there is no waiting period after bankruptcy and the requirements are as follows:

You have a down payment of 15% of the purchase price
You have obtained a full appraisal
You have paid a lender commitment fee – typically 1% of the mortgage value
Your loan-to-value ratio is 80% minimum
If you have previously declared bankruptcy and are now looking to start over and apply for a mortgage, don’t hesitate to reach out to me for expert advice and to review your options today!

Published by DLC Marketing team

It’s natural to have uneasiness over the state of your retirement preparedness due to the inherent uncertainties involved:

How long will I live?
Will my health or my spouse’s health fail? and when?
How much will my current assets and investments grow in value?
How will inflation impact the next 5, 10 or 20 years?

There is no shortage of variables to consider when trying to figure out how you are going to fund your retirement dreams. There is also no magic number — often quoted numbers like $1,000,000 or formulas like six times your annual salary at age 50 have no basis in fact, especially not your facts. They have no way to know if your retirement plans include restoring a pricey vintage car or spending most nights glued to a hockey game on the TV.

A financial advisor can help crunch the numbers and offer investment alternatives, but you need to make the big decisions on the type of retirement lifestyle you envision and how much you can realistically afford to sock away along the way to fund that dream.

If you really need some kind of number for reference, 2019 Federal Government data showed the average annual spend for a household over 65 (including taxes) was $64,461. As you get closer to retirement and some of the bigger bills fade away (mortgage, kid’s education) you will have a clearer picture of your needs.

Retirement age and life expectancy are two more uncertainties to deal with. The average Canadian calls it a day just shy of 83 years, but it is on the rise. If you are 20 now, it is expected that you will have about a 50/50 chance to hit 90! The average age for retirement is 63, so simple math (83 minus 63) tells us you will most likely need at least 20 years of retirement income.

Hopefully you have been saving and investing with your RRSP and/or TFSA and have also developed some other passive income streams to supplement your government pension income. If your employer has a pension plan and you maxed out that and your CPP for 35 years, you may be able to live entirely off of your pension income and not worry about saving anything for retirement!

The key point is to confirm how much you are going to receive. The average CPP cheque is $625/month or just over half of the $1204 maximum. Makes sure you investigate any private or employer pension benefits you have as well as your CPP and OAS benefits to determine how much you will receive. A reverse mortgage may also be an option to generate cashflow.

It’s never too late to get started with retirement savings and investing, but you have to realize that catching up will be harder than it sounds, even as your income rises. If you have unused TFSA or RRSP contribution limits (you can easily check by looking at your latest income tax assessment), by all means, start playing catch-up as soon as you are able.

Another problem with starting late is that you miss out on the magic of compound returns. Maxing out your TFSA every year from age 25 to 65 with an index fund at 5% would yield $725,000. Starting at age 40 would leave you with only $287,000. You could try and compensate for a late start by taking on riskier investments with higher returns, but that doesn’t always end up well!

If you are planning to rely on a side hustle, spouse and/or inheritance to get you through retirement, just be aware that those options can be easily derailed. If your spouse dies, your survivor’s pension could be considerably lower. Side hustles are great, but your health may fail or maybe you can’t find a job – only 10 to 20% of retirees report doing some sort of work. As for inheritance, your parents may live to be a 100, they may make some bad investments, or they may even get remarried.

Anxiety is a natural by-product of retirement planning, and the cure is having the knowledge and facts you need to make your own judgement on how much is enough.

Published by HomeEquity Bank.

According to a recent study by Angus Reid, Seven-in-Ten Canadians say money is a source of stress.You may feel the pressure of the current economic circumstances, such as rising inflation, which makes it more challenging to maintain your standard of living. More Canadians are becoming stressed about their financial situation, from increasing expenses such as out-of-pocket health care and home retrofitting costs to higher grocery and electricity bills.

At times like this, you might be looking for advice and guidance on how you can navigate the uncertain economic climate to maintain your standard of living. The good news is that if you are a Canadian 55+, the CHIP Reverse Mortgage by HomeEquity Bank is a solution for today.

Here are 5 benefits of the CHIP Reverse Mortgage:

A Reverse Mortgage allows you to leverage your most valuable asset- your home. You could access up to 55% of the equity in your home, tax-free, with no required monthly mortgage payments, and no negative impact on your cash flow.
A survey found that 92% of Canadians 45+ are keen on aging in place, but finances are a barrier*. With a Reverse Mortgage, you can stay in the home and community you love. You can release more equity in the future, if you choose not to take the full amount or if the value of your home rises. Additionally, you will still be able to benefit from future home price appreciation.
With a Reverse Mortgage, there is no restriction on how you spend the money you receive. You can use a Reverse Mortgage to relieve financial pressure, increase your cashflow, buy the vacation property you always dreamed of, cover health care expenses, finally renovate or make home improvements, and more!
Because you are tapping into your home equity, the funds are not added to your taxable income, nor do they affect government benefits such as Old Age Security (OAS) and Canada Pension Plan (CPP). Also, unlocking part of your home’s equity allows a larger portion of your registered investments to continue growing on a tax-free basis- potentially providing more assets to leave your heirs.
A critical safeguard in today’s economic climate is HomeEquity Bank’s No Negative Equity Guarantee, meaning you will never owe more than your home is worth when you decide to move or sell. This feature ensures that if your home depreciates below the mortgage amount owing, HomeEquity Bank will cover the difference**. You can stay in the home you love while you wait for the housing market to recover. As an added protection, HomeEquity Bank’s process includes independent legal advice for your lawyer to review the mortgage contract to ensure you understand all the features of the contract.
Contact your DLC mortgage broker to find out how the CHIP Reverse Mortgage by HomeEquity Bank can be a viable option to help you live your best retirement!

1source: Falling Behind: 53% of Canadians say they can’t keep up with the cost of living – Angus Reid Institute

*Survey Methodology: Survey conducted by Ipsos, on behalf of HomeEquity Bank from April 13-16, 2022, polled 1001 Canadians 45+ to assess public opinion on the role and contributions of Personal Support Workers and financial barriers to access.

**As long as you keep your property in good maintenance, pay your property taxes and property insurance and your property is not in default. The guarantee excludes administrative expenses and interest that has accumulated after the due date.

Published by DLC Marketing Team

Interest rates on savings accounts and GICs are climbing but they are having a hard time matching the rapid increase in inflation which is now over 8% — you are actually losing money by holding cash. Investing in financial markets can provide higher returns, but there are no guarantees and as we have seen lately, they can be volatile. As someone who is new to investing, you may be asking yourself:

• What do I invest in?

• How do I evaluate and manage my risk?

• Should I consult a financial advisor?

These are all great questions and we have compiled some basic advice below to help you get started.

DIY isn’t just for home repairs
There are lots of online options to invest in financial markets on your own without anyone required to facilitate the transaction. You can easily open a trading account and buy and sell individual stocks and various other investments (ETFs for example). This approach has become widespread because it is the cheapest investing option available and is very convenient, but only if you have the time and motivation to learn or a trusted mentor to help you get started.

Seek professional help?
You could choose to consult with a financial advisor. Many of them have professional accreditation and offer advice and can make transactions on your behalf. Make sure you understand how they will be paid as seemingly small annual fees can have a huge effect on how fast your investment grows over the years. Some investment advisors also require a substantial minimum investment before they will work with you, and they may offer only a limited range of investment products.

Rely on Technology?
A robo-advisor is an online investing platform that falls between the DIY approach and a financial advisor in terms of user-friendliness. Most banks and online investment firms offer this service. Robo-advisors use a live interview or online questionnaire to create, and then continuously manage a portfolio based on the information and risk preferences you provide. They require little sophistication on the user’s part, they have a small or no minimum amount to get started, and the fees are reasonable —usually around 0.5%.

Fees can take a real bite
We have mentioned fees for all three options above (DIY, financial advisor, robo-advisor) because most people don’t understand how a seemingly small annual fee can rob your investment fund over the years. A $100,000 in a mutual fund with a 2% annual fee (MER on a mutual fund for example) earning a 5% return will grow to $209,378 in 25 years. That same $100,000 invested in an ETF with a 0.2% annual fee earning a 5% return for 25 years will grow to $322,873. Mutual funds are a popular option for TFSAs & RRSPs, but you should investigate the fees and whether the returns they are providing justify their cost.

There are many options when it comes to investing in the markets and the choice is entirely up to you — make sure to do your homework and make informed decisions.

For powerful personal finance education and training with immediate results, check out the complimentary livestreams each week from Enriched Academy. View the schedule and sign up for upcoming sessions on their events page.

Published by DLC Marketing team.

One of the biggest benefits to purchasing your own home is the ability to build equity in your property. This equity can come in handy down the line for refinancing, renovations, or taking out additional loans – such as a second mortgage.

What is a second mortgage?

First things first, a second mortgage refers to an additional or secondary loan taken out on a property for which you already have a mortgage. This is not the same as purchasing a second home or property and taking out a separate mortgage for that. A second mortgage is a very different product from a traditional mortgage as you are using your existing home equity to qualify for the loan and put up in case of default. Similar to a traditional mortgage, a second mortgage will also come with its own interest rate, monthly payments, set terms, closing costs and more.

Second mortgages versus refinancing

As both refinancing your existing mortgage and taking out a second mortgage can take advantage of existing home equity, it is a good idea to look at the differences between them. Firstly, a refinance is typically only done when you’re at the end of your current mortgage term so as to avoid any penalties with refinancing the mortgage.

The purpose of refinancing is often to take advantage of a lower interest rate, change your mortgage terms or, in some cases, borrow against your home equity.

When you get a second mortgage, you are able to borrow a lump sum against the equity in your current home and can use that money for whatever purpose you see fit. You can even choose to borrow in installments through a credit line and refinance your second mortgage in the future.

What are the advantages of a second mortgage?

There are several advantages when it comes to taking out a second mortgage, including:

• The ability to access a large loan sum (in some cases, up to 90% of your home equity) which is more than you can typically borrow on other traditional loans.
• Better interest rate than a credit card as they are a ‘secured’ form of debt.
• You can use the money however you see fit without any caveats.

What are the disadvantages of a second mortgage?

As always, when it comes to taking out an additional loan, there are a few things to consider:

• Interest rates tend to be higher on a second mortgage than refinancing your mortgage.
• Additional financial pressure from carrying a second loan and another set of monthly bills.

Before looking into any additional loans, such as a secondary mortgage (or even refinancing), be sure to speak to your DLC Mortgage Expert! Regardless of why you are considering a second mortgage, it is a good idea to get a review of your current financial situation and determine if this is the best solution before proceeding.