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Dear ,
When it comes to writing this newsletter for you every month, there never seems to be a shortage of good information that is pertinent to your current or future mortgage. This month is no different. With the tax season now behind us, we think that this is a good time to discuss the Tax Deductible Mortgage Plan (TDMP).
You are probably thinking this is crazy-talk but it is actually true! Together with a certified financial advisor, we help you set up your mortgage properly. You will then be able to write-off the interest on the line of credit portion of your mortgage and pay down the fixed part of your mortgage twice as fast. See if the TDMP is right for you after reading the article below and taking the online test.
Have you heard that the Vancouver real-estate market may be softening? Media reports seem to be leaning in that direction. What about the mortgage market? Typically the two go hand-in-hand, however, when it comes to qualifying, the changes in the mortgage rules from April 19th have thrown a wrench into some borrowers plans.
Buyers that want a variable-rate mortgage at prime minus .60 (currently 1.65 floating) are being forced to take a fixed rate simply because it is easier to qualify for. Up until April 18th , a variable-rate mortgage required you to prove you could afford payments based on a 3-year discounted rate, for example; 3.75%. Now, the government requires variable-rate applicants to prove they can afford payments at the Big 5 banks' posted rate (6.10% today). This makes it substantially harder to keep your debt-servicing ratios within lender limits. The fixed rate qualifier is the rate you receive. Basically, if you are getting today's best rate of 4.35%, this is the rate you would have to qualify at.
The most important point here is that you can't change lenders at renewal (the end of your current term) without re-qualifying. Therefore, if you don't have 20% equity at maturity you could be stuck in another 5-year fixed mortgage (possibly at your existing lender's posted rate, otherwise known as the "rack rate"). If you instead want to switch to a variable or 1-4 year fixed term, your debt-servicing ratios will have to fit under the much stricter government guidelines.
Of course, those guidelines will get even tougher if fixed rates rise. Check current rates here.
As always, if you have ANY questions about getting a mortgage, renewing or refinancing, we are here to assist you.
Sincerely,
Mike Averbach and Justin Blacklock
PS ... We've been getting some fabulous reviews on YELP, We'd love to see yours there too!
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The Tax Deductible Mortgage Plan
What is a Tax Deductible Mortgage?
In the United States, tax deductible mortgages are the norm.
In Canada,
tax deductible mortgages have always been available to the
financially
affluent ... until now.
Now, you too are able to convert your
mortgage
from a "liability" into an "investment." Not only
will your home become an investment, you will also be able to
pay it
off MUCH, MUCH sooner.
Here's how a Tax Deductible Mortgage Works:
The Tax
Deductible Mortgage Plan (TDMP) allows you to convert
your
mortgage into a tax-deductible loan. In turn, you convert the
interest
into a tax deduction, which for many people will generate a Tax
Refund.
By converting your mortgage into a tax-deductible loan, you
are turning
the interest into a tax deduction. When you subtract that
deduction
from your income, you get a tax refund. That refund is Free
money.
You do not have to invest any of your own income or increase
your debt
to get the tax refund. Conversely, the refund you receive from
investing
in RRSPs is not free money. You pay for your RRSP by using
your own
after-tax income to buy the tax refund.
View our online video tutorial to see exactly how it is done.
Do You Qualify?
 The best way to know if TDMP is right for you is to complete the TDMP Test and get your Free Benefits Analysis Report. Once this
is complete,
we will contact you to let you know if you qualify for the
plan.
Here are a few basic guidelines:
First off, you should currently own a home and have built up
at least
20% equity. It is possible for new buyers to qualify, but this
will
require a consultation with an Averbach Mortgages TDMP
specialist. Your outstanding mortgage balance should be at least $100K
and you
should be employed (or self-employed) with good credit.
Your Team:
Just like with a regular mortgage, you need a team of
professionals
that will help you set-up and run your Tax Deductible Mortgage
Plan.
Your team of advisors includes:
.
As your Mortgage Advisors, we will help you set up a Tax
Deductible Mortgage and introduce you to the other
necessary members of your team.
Please call Justin Blacklock 604-736-1855 for more
information about
the TDMP.
Mike Averbach, AMP Mortgage Planner
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Averbach Mortgages
604-736-1855
We save you time. We save you money. We get you the you the best mortgage terms at the best interest rates possible.
If you are:
- purchasing your first home
- refinancing
- renewing an existing mortgage
- investing in real estate
- consolidating your debts
- experiencing current or past credit issues
We have the solutions that work for you.
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Mike Averbach
Averbach Mortgages |
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