Published by DLC Marketing team.

Financial wellness is fast becoming the latest buzzword as soaring inflation and interest rates pile the pressure on Canadians. There is a strong connection between mental health and financial health, and financial stress is taking a heavy toll. So, what exactly does it mean to be “financially well”?

Financial wellness is described as a state of well-being where an individual or a household has achieved financial stability and is able to meet their current and future financial obligations without undue stress. Financial wellness is not about being rich, having a certain amount of net worth, nor achieving a specific financial goal. Rather, it is about having a sense of security and confidence in your financial capability and being able to manage financial issues, challenges and opportunities as they arise over time.

Financial wellbeing is a function of many different factors. Income is obviously a critical element, but it also depends heavily on how well we are able to manage our money. These tasks include budgeting, managing debt, and investing and planning our retirement. The degree to which we are able to handle these tasks successfully depends on our level of personal financial literacy and our ability to make informed decisions, solve financial problems, and manage financial risk.

The heightened stress and anxiety cause by poor financial wellness has significant effects on many aspects of our life including poor job performance and relationship issues.

How do you measure financial wellness?

Financial wellness can be measured in a number of ways, but it is often a feeling rather than some sort of tangible number. A financial health assessment is a comprehensive evaluation that involves reviewing income, expenses, debt, savings, investments, insurance coverage, and other financial assets and liabilities. It identifies areas of strength and weakness and provide insights into how to improve overall financial well-being.

A financial stress tests involve evaluating an individual’s or household’s ability to withstand financial shocks or unexpected events, such as a job loss or medical emergency. Financial stress tests can help identify potential vulnerabilities in one’s financial situation and provide insights into how to build financial resilience.

Financial behavior analysis involves examining an individual’s or household’s financial behavior and decision-making processes. It can help identify patterns of behavior that may be contributing to financial stress or instability, such as overspending or not saving enough.

Overall, measuring financial wellness is a complex process that requires taking into account multiple factors and indicators. Different methods may be appropriate for different individuals or households, depending on their specific financial circumstances and goals.

How can I improve my financial wellness?

There are plenty of options for improving your financial wellness and most of them revolve around bettering your financial literacy skills to effectively tackle expenses, use credit wisely, manage debt, save money, and build long-term wealth and security through investing. Working with a financial coach or financial planner can also provide the knowledge and support needed to achieve your financial goals.

In addition to individual actions, there are also broader solutions that can support financial wellness at the societal level. These may include policies that promote income equality, affordable housing, and access to financial services, as well as financial education in schools and employee financial wellness programs.

2023 is shaping up to be another tough year financially for Canadians and financial wellness will continue to be elusive, especially if your financial literacy is lacking. The good news is there are a lot of resources available and many of them are free or low-cost. The largest hurdle for most of us is willpower and maintaining our motivation — achieving financial wellness is not a sprint. It can be a time-consuming, slow process and you may not see the results from your efforts until many months or many years down the road!

Published by DLC Marketing Team.

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free as well as how much interest you pay over the lifetime of your mortgage (longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments).

Let’s start by looking at the mortgage industry benchmark amortization period. This is typically a 25-year period and is the standard that is used by majority of lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators.

While this is the standard, it is not the only option when it comes to your mortgage amortization. In fact, mortgage amortizations can be as short as 5-years and as long as 35-years!

As mentioned,  opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time-frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

When it comes to choosing a longer amortization period, there are definitely still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period of time, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Your mortgage professional will be able to help you choose the amortization that best suits your unique requirements and ensures you have adequate cash flow. However, it is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You are able to shorten or lengthen your amortization, as well as consider making extra payments on your mortgage (if you set up pre-payment options), at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5 or 10 years depending on your mortgage product). During renewal is a great time to review your amortization and payment schedules or make changes if they are no longer working for you.

If you have any questions or are looking to get started on purchasing a home, don’t hesitate to reach out to a DLC mortgage professional for expert advice!

When navigating the mortgage market, it’s essential you take the time to find the right professional to assist you. Here are some key strategies to help you identify a reliable and trustworthy mortgage broker:

1. Conduct Thorough Research: Take the time to research different mortgage brokers in your area. Look for their credentials, experience, and any reviews or testimonials from past clients. This information can provide insights into their professionalism and track record.
2. Seek Recommendations: Ask friends, family, or colleagues who have recently obtained a mortgage for recommendations. Personal referrals can be valuable as they come from trusted sources who have firsthand experience with a particular mortgage broker.
3. Evaluate Their Expertise: Assess the broker’s knowledge and expertise in the mortgage industry. Look for brokers who stay updated on market trends, mortgage products, and relevant regulations. This expertise ensures they can provide you with accurate and up-to-date advice.
4. Consider Their Range of Lenders: A reputable mortgage broker should have access to a wide range of lenders. This allows them to offer you multiple options and find the best mortgage product that suits your specific needs and financial situation.
5. Transparent Communication: Look for a broker who communicates clearly and transparently. They should be willing to explain complex mortgage terms and conditions in a way that you understand. Avoid brokers who use high-pressure sales tactics or make unrealistic promises.
6. Ask Questions: Don’t hesitate to ask questions to gauge a broker’s knowledge and responsiveness. A trustworthy broker will take the time to understand your needs, answer your questions, and provide personalized advice.
7. Check for Licensing and Associations: Ensure that the mortgage broker is licensed and registered with the appropriate regulatory body in your province or territory. Membership in professional associations, such as the Canadian Mortgage Brokers Association (CMBA), can also be a positive sign of credibility.
8. Trust Your Instincts: Ultimately, trust your instincts when choosing a mortgage broker. If something feels off or you’re uncomfortable with the broker’s approach, it’s better to seek alternatives.

By following these strategies and investing time in your research, you can see through mortgage marketing tactics and find a reputable mortgage broker who will guide you through the process with integrity, professionalism, and your best interests in mind.

Introduction: In the Canadian mortgage market, borrowers have various options to choose from, including variable mortgages. A variable mortgage, also known as a variable rate mortgage (VRM), offers flexibility and the potential for cost savings. In this blog post, we’ll explore the different types of variable mortgages available in Canada, giving you a better understanding of the options at your disposal.

1. Prime Rate-Based Variable Mortgage: The most common type of variable mortgage in Canada is tied to the lender’s prime rate. The interest rate on these mortgages fluctuates based on changes in the prime rate, which is influenced by the Bank of Canada’s overnight lending rate. Borrowers typically pay a discount or premium to the prime rate, such as prime minus 0.50%.
2. Adjustable Rate Mortgage (ARM): An adjustable rate mortgage, similar to a prime rate-based variable mortgage, is tied to the lender’s prime rate. However, instead of a fixed discount or premium, the interest rate adjusts periodically based on market conditions. This adjustment can occur annually, semi-annually, or even monthly, depending on the terms of the mortgage.
3. Adjustable Payment Mortgage: In an adjustable payment mortgage, the interest rate remains variable, but the payment amount stays fixed for a specified period. This allows borrowers to have consistent monthly payments, providing them with stability during that period. However, the outstanding interest may vary, resulting in adjustments to the principal portion of the payment.

Conclusion: Variable mortgages offer borrowers flexibility and the potential for cost savings in a changing interest rate environment. Whether you opt for a prime rate-based variable mortgage, an adjustable rate mortgage, an adjustable payment mortgage, or a collateral charge mortgage, it’s important to carefully consider your financial goals, risk tolerance, and future plans. Consult with a mortgage professional to explore these options in more detail and determine which type of variable mortgage aligns best with your needs. Remember, each individual’s circumstances are unique, so it’s crucial to choose a mortgage that suits your specific requirements.

Written by Chat-GPT