Road vs. water access - Almost all cottage buyers want road access, but prices can be significantly lower for a water-access cottage. Find out if the road you need to take is public or private, and if a legal agreement exists for you to use it.
Water - The main sources of water to cottages are wells and lakes. If the water is drawn from a lake, you will need a filtration system. If it’s from a well, find out whether it sits on higher ground than the sewage system, how fast it reaches the cottage and if it has ever run dry.
Septic systems - It is vital to make sure there is a current certificate of approval, a permit to use the system, and that the system works.
Municipal regulations - Ask about local laws concerning hunters, snowmobilers and others crossing private property, motorized watercraft, water exclusivity and rights of way for utility companies and neighbours. Also, check the zoning - some cottages may not allow for year-round residency.
Municipal services - Check to see if the road to your cottage is maintained by the municipality including snow removal in the winter and if there is garbage pick-up or if you must drop it off at a designated dumpsite.

If you dream of your very own place in the country the good news is just how aggressive lenders will be to get your mortgage business.
Here are some tips on entering the vacation property market:

Explore getting a mortgage with less than the traditional 25% down.
Buy a property that can be rented out easily when you are not using it.
Become informed about possible seasonal slumps in real estate prices in recreational areas.
Buy a property with other families and share its use.
Look at more distant places. Typically, the longer the journey from a major city the lower the price.

Linda Renaud is an Accredited Mortgage Professional and can be reached in Kelowna at 878-670.

How can you possibly know you were offered the best possible fit for you? The employee knows the services/plans/products offered by her employer, but is not expected to know nor recommend what the competition has to offer. We obviously can’t expect them to send you to their competitor for better service and/or product – it just wouldn’t make any sense, would it?

On the other hand, when you sit with a mortgage broker, you are sitting with 50 different lenders at the same time. Your broker has access to all these Lenders, and knows where to find you the best possible deal according to what you need, and not to what their employer has to offer. They can offer anything available on the market, and their role is to guide you towards the best possible lender to suit your particular situation. It’s like having your own personal negotiator looking out for you.

The beauty of it all is that it’s free in most cases. The broker gets paid by the financial institution, and not by the client. Why not work with a professional who has only your best interest in mind? Why not using their expertise and knowledge for free, and benefit from it?

Each one of us has their own expertise, and a mortgage professional knows mortgages in and out. Most people will be dealing with mortgage financing only a few times in the course of their life, while the broker is working with it on a daily basis, so let them do the research and the recommendation according to their knowledge and expertise.

There are a few ways to find a mortgage broker, and the best one is to get a warm recommendation from your friend and/or family. Mortgage brokers are regulated by Financial Institutions Commission of B.C. (www.fic.gov.bc.ca), so you can look on that internet site to verify your broker is a member, and doesn’t have any complaint filed against them. Another good resource is the Canadian Institute of Mortgage Brokers and Lenders (www.cimbl.ca), and the Mortgage Brokers Association of B.C. (www.mba.bc.ca). If your broker is listed on these three sites, it’s already a good start.

You can also look for their Accredited Mortgage Professional designation. This AMP designation is obtained from CIMBL, and this guarantees your broker adheres to a strict Code of Ethics, and is dedicated to finding the right mortgage solution for their clients. You will find the list of brokers with their AMP designation on the CIMBL site.

However, just like with any other professionals, the best way to find a good mortgage broker is to get a warm referral from a friend or family. Linda Renaud is an Accredited Mortgage Professional and can be reached in Kelowna at 878-6706

Let‚s say you have a $125,000 mortgage at six per cent interest amortized over 25 years:

1.    Increase your monthly payments. If you can afford $1,000 per month but your mortgage only demands $800 per month, make a payment of $1,000 instead. You‚ll shave 8.75 years and almost $46,000 off your total interest costs.
2.    Take advantage of lower rates. In addition to reducing the overall interest component of your mortgage, you can pay the principal down faster.
3.    Accelerate to bi-weekly payments. With more frequent payments you can fit in an extra payment each year and be mortgage free four years sooner with almost $22,000 in savings.
4.    Use any bonuses, tax refunds or „found money‰ to pay down principal. This is especially valuable in the early years of your mortgage. If you receive an annual bonus or other lump-sum compensation, see if you can put it against the principal.
5.    Consolidate your loans into a new mortgage and use the savings to boost your payments. If you‚re a homeowner with some equity, use your mortgage to consolidate your other loans. Add the money you‚ve been spending on loan payments to your mortgage payments to see big savings in overall interest.

More information on how to fast-track your mortgage is available by calling Linda Renaud in Kelowna at 878-6706.

Property assessments have arrived, and by now, we know we have more equity in our home than we had last year, and that’s a good thing.

Many now have the option of re-financing their existing mortgage – and taking a higher mortgage based on the increased value of their home. In most cases, you can borrow up to 90% of the value of your home for debt consolidation purposes*.

This can be a good strategy if you have outside debts with high interest rates. As per the Credit Counselling Society, the average Canadian family carries over $35,000 in revolving credit and the average credit card interest rate is 17%. It makes so much more sense to payoff a debt with a 17% interest rate and replace it with a mortgage at 5% - what incredible savings!

You can payoff all your debts and still have a lower payments, which would dramatically improve your cashflow position. Once you’ve paid off your debts, then you can tackle the task of paying down your mortgage with the extra cash you’ve generated.

Obviously, such a strategy does not apply to every situation and there are many factors to consider, like the terms of your existing mortgage and the fees involved. For instance, many lenders would offer you a blended rate on your re-finance and this would mean you wouldn’t have a payout penalty on your existing mortgage. However, in some cases, you may be better off to pay a payout penalty to your existing lender and get a more attractive rate with a different lender. Also, if your mortgage is high ratio (over 75% financing), in most cases you only have to pay an additional mortgage premium on the new money you are borrowing today as long as you keep your amortization as per the original application.

I would be pleased to work out some numbers for you based on your particular situation today. Together, we can establish if you would be better off with a higher mortgage and no other outside debts or if you would be better off just leaving it as is for now or getting a new line of credit instead, or possibly a second mortgage. Each situation differs according to your own individual situation.

I’m a strong believer in consolidation of debts though mortgage financing as long as you set out a plan to paydown your mortgage based on the savings from interest rates. You can still put money in your pocket and have only one monthly payment to make and tackle it as much as you can afford to without having to be miserable about it.

The key is to not go on using your credit cards (or taking out other loans) in a way that means you can’t pay them off in full on a monthly basis. If your budget is realistic, you should be able to meet your financial obligations monthly. I like to offer as long an amortization as possible to my clients and then you can exercise your pre-payment privileges. If something happens and you have a set back for whatever reason (accident, loss of job, etc.), then you can revert to your original lower payment easily until you’re back on your feet.

Linda Renaud is an Accredited Mortgage Professional with Invis and can be reached in Kelowna at 878-6706 or via e-mail at lindarenaud@invis.ca at any time to discuss your mortgage financing.

As any self-employed person will tell you, building a business can mean making some significant personal trade-offs.

A September 2007 Mortgage Intelligence survey of self-employed Canadians indicated that 49% of those interviewed have postponed real estate purchases. Another 57% have little to no retirement savings, while 51% take fewer vacations than they would like.

Even with these trade-offs, Canadians who are in business for themselves still deal with stress that is keeping them up at night. The survey revealed that 37% of the self-employed are being kept awake at night by business finance issues, followed closely by administrative matters at 32%.

The good news is that when it comes to securing a mortgage – whether to purchase a home or leverage home equity – the self-employed can now rest easy, thanks to new mortgage options that are now available to this important segment of the Canadian workforce.

Bringing it Home

When asked by Mortgage Intelligence what real estate purchases they are planning in the next three years, self-employed respondents indicated that 26% plan to buy or refinance a primary residence. Another 12% plan to purchase an income property and 10% plan to purchase a vacation property.

The good news for self-employed borrowers is that many lenders now offer a wide range of flexible mortgage solutions that don’t require detailed financial statements or income verification, instead basing approvals on personal credit history and work experience.
As well, many lenders offer a variety of flexible terms, such as longer amortization periods, accelerated payment schedules and up to 90% stated income mortgages.

While mortgage interest rates are still an important variable for the self-employed, these flexible terms are critical to reducing mortgage-related stress for entrepreneurs with an unpredictable income flow. Opting for an open mortgage with a 40-year amortization period not only lowers the amount required for monthly mortgage payments, it also enables the borrower to accelerate payments when business is strong.

As well, many self-employed people are negotiating mortgages to lower monthly payments through debt consolidation, establish a home equity line of credit for their business, renovate their home or build the ideal home office.

Work for Yourself, but Not by Yourself

If you are self-employed, you may want to consider working with a mortgage consultant to help navigate through your options and select the right mortgage for you. Today about 30 per cent of all residential mortgages are placed through mortgage brokers, up from 8 per cent in 1998, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP).

As a mortgage consultant, I am your agent working for YOU, not an institution. I will alleviate the burden of many time-consuming and frustrating tasks associated with securing a mortgage, which lets you stay focused on your business.

As someone also in business for myself, I understand that your schedule can be unpredictable, so I will work with you to establish convenient times to meet. I will strive to understand your personal and professional goals and will identify competitive mortgage solutions based on your unique profile. And, in most cases, my service is provided free of charge since I am compensated by the lender you select.

Most entrepreneurs would agree that the best business decisions are made based on a solid understanding of all the available options. By working with a mortgage broker, self-employed Canadians can gain a better understanding of how these new mortgage offerings can translate into lower monthly payments, increased financial flexibility and fewer trade-offs in pursuit of your personal and professional goals.

Linda Renaud is a Mortgage Consultant with Mortgage Intelligence in Kelowna. Linda can be reached anytime for a free consultation on the phone: 250.878.6706 or via e.mail: lindarenaud@shaw.ca Also, please do not hesitate to go to our web site for more information at: www.mortgageintelligence.ca.

Given Canada’s ongoing housing boom, many clients might be saving money outside of their RRSPs, in anticipation of the moment when they too jump on the real estate bandwagon to lock in before interest rates rise again.

First time homebuyers have a unique opportunity to use that money more efficiently by making an RRSP contribution with the lump sum they intend to use for a down payment, then withdrawing the money after the 90 day waiting period under the Home Buyers’ Plan and combining those funds with their tax return moneys to make an even larger down payment.

First-time home buyers are not the only ones considering RRSP and mortgage concepts. With interest rates rising, those with larger registered plans might be considering alternatives like holding mortgages inside their self-directed RRSPs. For the most part the strategy hasn’t been popular in recent years since the low interest rates have considerably limited returns on this type of investment. With more favorable conditions however, clients holding mortgages in their RRSP can reasonably predict the rate of return those assets would earn, as long as they can afford to make payments. The strategy, though, is not without a significant number or rules, risks and fees.

Linda Renaud is an Accredited Mortgage Professional (AMP) with Invis and can be reached in Kelowna at 878-6706 or via e-mail at lindarenaud@invis.ca at any time to discuss your mortgage financing.

*OAC, E&OE

With so many mortgage holders wondering if they should go with a variable-rate or a fixed-rate strategy, the subject of interest rate trends is unavoidable. I won’t fall into the trap of predicting interest rates simply because I would “ along with all the so-called financial experts“ have about a 50% chance of being correct.

However, it’s pretty safe to assume that the prime rate is not going to jump up very much and certainly not so fast, although rates are definitively headed upwards. If you have a variable-rate mortgage, you may be considering locking in your mortgage, although there is, at present, no sense of urgency to do so.

Another important fact is that fixed rates are most probably not going down. We have had a long run of relatively low interest rates, which may well have reached a bottom.

Here is what I suggest you do: simply contact your current mortgage lender to find out what your conversion rate and mortgage payment would be today if you were to convert your term to a fixed rate. Make sure you consult your favorite mortgage consultant to find out if you are offered the best possible deal on the market.

Then compare this fixed mortgage payment to what you are currently paying on your variable term. Now consider this amount as the premium you are willing to pay (or not) in order to get the security of knowing what your payments will be for the next five years.

If you are comfortable with variable rate terms and are optimistic about the future, just stay with a variable as so many experts will advise you to do. However, if your heart jumps every time the prime rate moves up and prefer a sense of stability, then lock your mortgage in. It’s all a matter of personal preference and lifestyle.

As for me, I’m sorry to say that I was in the business in 1982 and I still remember interest rates over 20%. Since 9/11, I don’t take anything for granted and I don’t listen much to predictions as I believe anything is possible. In fact, I locked in my term last week for peace of mind, but my co-workers are calling me “Chicken Little.” Now I can concentrate my worries on the price of gas and other utilities.

Currently, the carrying costs of variable-rate and five-year fixed-rate mortgages are the same. A competitive variable rate mortgage can be obtained for a rate as low as 5.10 per cent. On a $200,000 mortgage with a standard 25-year amortization, this means a monthly payment of $1,175. By comparison, we can get a competitive five-year fixed mortgage at the exact same rate today.

Then, what do we based our decision on? Two things – the first being the future interest rates – what do you think the prime rate will do over the next five years? If you think your average prime rate will be lower than 6% - you’re better off with the variable rate.

The second fact to consider is your ability to handle rate fluctuation. Are you jumping every time you hear the prime rate may go up or the economy might slow down? If your mortgage payments increase, will it affect your life style much? Will it keep you up at night, wondering how high the rate may go in the future? If so, you’re better off with the fixed rate.

I see the fixed rate as an insurance fee – you won’t get the benefits of possible lower rate in the future but you are rest assured of your payments and rate for the next five years.

Current conditions in the mortgage market are favourable for consumers. At the same time some rates have been cooling, a host of new mortgage innovations have been introduced in Canada, including 100% financing options and mortgages with a 40-year amortization and interest-only periods.

While these new mortgages can improve monthly cash flow, they can result in more interest being paid over the life of the loan. These options are best for individuals who expect their income to grow. As it does, they can increase their mortgage payment and effectively reduce the life of their mortgage.

When looking at all the options available today, it is more important than ever to get professional advice. Linda Renaud is an Accredited Mortgage Professional in Kelowna and can be reached at 878-6706.