Mortgage Penalties

Or ... How much will I really save? Like, really? 

It's been a crazy millennium so far for mortgages. Long gone are the olden days of what at the time seemed reasonable 6-10% interest rates pre Y2K (remember that fun?). Instead we have had a steady mantra of 'rates won't go lower' and yet they continue to do so - just months ago the industry-shocking rate of below 3% was announced and experts were all like 'WTF!!! That's insane.'

Then this monthin Canada, another mortgage lender announced a 1.99% interest rate and industry experts heads exploded.

DO NOT PRESS PLAY IF YOU DO NOT WANT TO WATCH SOMEONE'S HEAD EXPLODE:

ah...science.

Moving on...now keep in mind that the interest rate in it's essence is the amount that a lender charges you for lending you money. If I lend you $100 and then get you to fill out a bunch of forms that legally say you will be paying me back $110 in six months then I am charging you a flat 10% interest fee.

Pretty simple at it's core. But nothing is simple in banking finances. There are a lot of little tricks to hide that true number, as consumers all love a deal. You got a weed whacker for $129 at Canadian Tire? I bought one at Sears for only $125! Sucker! Banks charge you a semi-annual interest rate, meaning that 10% isn't actually 10% but rather 5% charged to your amount owing 2x a year. And that's just the tip of the iceberg and also maybe for another column.

Investing In Real Estate? Or How Many Mortgages Make a Mortgage Mortgage?

Too Much Money, Not Enough Mortgages...

There are many variables to consider when/if you decide to jump into real estate investment. Like...how do I do it? Can I afford it? Do I even want to do it? Before you jump into looking for your first investment property, here are some important considerations to make.

So much money to burn...

Investable Funds Sit down with your financial adviser (first step; get a financial adviser). Talk with them about how much can you actually afford to invest? 

What are your expenses? How much do you have set aside for emergency funds? Real estate investment will tie up your funds for some time and if you need to liquefy your assets quickly, this could become an issue. You may need to consider a moderate initial investment amount and strategize accordingly - investing in smaller deals, partnering with others or investing in assets that you can readily exit from or all the above.