Home Equity Financing Options

HELOC vs. HEL 

or 

"How are we going to pay for this new bathroom?"

If you were like me two years ago, when someone mentioned the term HELOC you probably assumed they were talking about some new super-villain that the Spider-Man movie franchise was going to bring out of obscurity to appease the comic fanboys.

In actual fact, it's an acronym used in mortgage financing. HELOC actually stands for Home Equity Line of Credit, which is quite different than it's other, equally popular cousin, HEL, or the Home Equity Loan option.

"Well, hey now", you might be saying, "that may sound relevant to my needs. Tell me more."

How I feel when someone introduces me as a mortgage broker...

And that's what I'm here for...

The Variable Rate Advantage

                     or To Fix or Not to Fix (your mortgage rate)

One has a fixed rate mortgage, the other is Matt Damon.

Throughout the years, most people have fallen into two groups; those that understand mortgages and those that let their banker figure it out for them.

Okay, there's also that group that just does what their parents tell them to do. 

Then there's that other group that have no idea what mortgage is and what it entails (let's call them 'kids today'). 

So, four groups but I digress.

Let's focus on the first two. 

Nowadays, thanks to the internet and the continuing increase of personal debt, people are doing more research into how they can make their dollar stretch farther. Ironically tv shows, websites, travelling circuses have been set up to help people take control of their debt in between advertisements for flat screen TVs, mobile phones and 0% down brand new cars and limited edition paperback do-it-yourself manuals.

The Art of A Barely-Done Deal

TL;NGTR (too long Not going to read) SUMMARY

Perspective after the fact

Get Everything In Writing. Seriously. No matter who's buying or selling it. 


Recently I had the dubious honor of completing a mortgage deal for a private real estate deal. I have since talked with the new owners and felt that there were some mighty fine lessons to be learned from their experience and why in all real estate deals, you should get EVERYTHING in writing and take your time in purchasing. This isn't a bike you are talking about here, this is a home worth potentially hundreds of thousands of dollars. Don't commit it if you don't have it.

#1 RULE: Don't let the sellers' needs take precedence over your own.

Now I've already talked about some of the concerns regarding attempting to sell your home privately in this post here, this time I will talk about actually completing a privately sold deal and the aftermath.

In this instance the buyers were a young, professional woman with two children and her father-in-law. The sellers had a close relationship with the buyers, being neighbours and also being their child's day care. The children go to the same school, are in the same class and consider themselves best friends.

The sellers were also looking to purchase and any offer they made was subject to their house being sold. They were anxious to sell as twice they have lost out on a purchase due to the above-mentioned subject.

They agreed to a price for the home and that's where I come in.

First, the 5 C's of the buyers.

The Art of Selling Privately or Not

The Art of a Nearly Non-Deal

I think this is the one...

Perhaps you found someone looking to sell their house privately, someone who wants to avoid the thousands of dollars of commission a Realtor would make for doing nothing more than getting someone to sign some papers from a Real Estate For Dummies handbook. Perhaps this sounds like a great idea in the short term – maybe it’s family, maybe it’s an acquaintance you've known for years. 

Perhaps you should rethink that idea before everyone gets too excited and starts planning renovations or Mexican holidays.

Now I’m not advocating entirely for one way or the other – there are thousands of private sales that go through without a hitch. There might be a few small hiccups along the way, but as long as everyone is negotiating in good faith, happy is as happy does. Unfortunately there are also thousands of Realtors out there with more than a few that push potential clients into a house that they may not be happy with in order to receive that juicy commission. Like everyone else, when looking for a Realtor, ask for referrals. There are plenty of good Realtors out there and there are bad ones which gives the others a bad name and is why private sales or Do-It-Yourself companies like The Property Guys have become such a popular option in recent years. 

That said, here’s some warning signs that you should be wary of when attempting to purchase privately and trying to shave a few thousand dollars from your mortgage by using a do it yourself kit. If you step back and remind yourself that this is a deal worth perhaps hundreds of thousands of dollars, when and if a delay happens everyone can continue to work diligently to making the deal happen. That said, the most stressful factors in attempting a private sale (from my own personal experience);

What is Success and How do I Get Some?

"Nothing Gives the Illusion of Success Like a Boat" - Arrested Development

Success is one of the most subjective words in the English dictionary and follows shortly after it in the dictionary as well. It's a great word in getting rid of your S's in Scrabble and also a great word to attempt to spell without Spellcheck. It's the opposite of failure, which is generally acknowledged in most catchy quotes about success as being necessary to define actual success.



Yet it remains an elusive concept, an ever-changing ideal that is rarely ever fully achieved by most people. It's an abstract term that means different things to every person on the planet. It's the attainment of a personal goal on one hand, it's the acknowledgement of that goal by strangers on the other.

Often people confuse success as being based on material possessions. We see celebrities and are conditioned to think that they define success; fame, wealth, the amount of magazine covers they are on. We see someone driving a more expensive car than us and think that person is more successful. Someone has a bigger house than us and that person automatically is deemed more successful, despite us having no idea how they got that house or that car. Perhaps they inherited it, perhaps they are a mechanic taking it for a test drive. We don't truly know most people's level of success but we project it on them. We automatically equate what we see and judge as a measurement of success without any true evidence.

Our society has tended to forget that success is not just about wealth or about fame. It's about achieving something desired or attempted. The confusion lands mainly in that for most people success does not come until it is acknowledged by external sources, such as their bank account or the publicity they receive.

As car fires go, this was a great success. 

Take writing a book. It's a huge task that involves hours of isolation by a committed person. It involves a knowledge of basic story structure, plot, spelling and punctuation. To complete a book is a major accomplishment, Yes. But does that make it or the writer a success? Not particularly.

Yet, if that writer is published, does that make them a success? Maybe.

What about if that writer wrote a book and it was purchased for $2 million even before it was published? Does that make the writer a success?

Most would say 'Hellz Yeah! $2 Million for a book? Where's the paragraph key?'

But what if it doesn't sell anything? What if it is ridiculed by their peers? Is the writer still a success then?

Devin Townsend's career arc never went higher.

Depends on their own personal definition of what ultimately is success. It's a term that can keep moving. You can say it's an accomplishment of a goal. Simple, elegant. You accomplish that goal and then you can say 'hey, I've succeeded.'

But then what?

Most businesses/people who have accomplished their goal aren't satisfied, so their goals are continually adjusted. It's why businesses are never satisfied with just profit, it has to be record profit. People are never satisfied with what they have, it's why Christmas was invented and why China is a superpower.

Most people believe that happiness lies once they have achieved their goals but study after study has shown that is not true. There is no goal line to cross to achieve happiness. It's an ever-changing goal that is never satisfied. That is humanity's view of success. Unattainable.

The guy with 12 rings just laughed.

We live for that temporary success that comes from achieving a set goal. It comes from your own personal valuation of achieving that goal. It comes from not looking outside yourself for valuation but from within. Nobody is the best at anything. Society is set up in a way so that the 'winners' are always changing. Records are made to be broken. Money is made to be moved around. Most sporting events, where winning is the only definition of success, only grant that acknowledgement for a few months before the cycle begins again to determine success.

But that is a success that is defined by the second, more popular definition, that with success comes fame, wealth and prosperity. People's names are etched forever in history or until someone comes along and is more successful.

There's a certain mythology around success. That with hard work and determination success will follow. That's utter bullshit. The world is full of athletes, poets, politicians, farmers, suicides, Pauly Shore, students, etc. etc. that have worked hard and tried their best but ultimately have failed at achieving that distinction in which society has judged them to be successful.

Bill Gates didn't become world-famous because he worked hard and was determined to create the personal computer. He became world-famous because he was born at the right time in history, had wealthy, influential parents that supported his curiosity and actively encouraged it, he went to a university that allowed him unlimited access to it's relatively new computer labs and was able to meet people with the same interests (such as Steve Jobs) that he was able to relate to and discuss abstract ideas and concepts that otherwise would never have happened. He didn't have to work to pay his rent, tuition, etc. He had a vast amount of free time that he dedicated to his hobby and he took that passion to the next level and created one of the most life-changing inventions in history.

There has been much said about the 10,000 hours concept; where for a person to truly excel at anything, a certain dedicated devotion must occur. Michael Jordan was an exceptionally gifted athlete, with good genetics, access to basketball courts and coaches but also an ability to spend an exceptional amount of time practicing basketball. That is what elevated him above others. This is the same of most professional athletes today. Hockey parents invest a lot of money in their child's hockey time as it has been proven that those with the most 'practice' hours have the best chance of hockey success.

One guy's definition of enough success was to just have this
picture taken as a Beatle...

The Beatles became one of the biggest names in the world through music because it was the right time in history, they were young and had an opportunity to practice for 8-12 hours a day in German pubs before they were considered a success. They came along at the same time as the medium of television, which created an incredibly vast audience for them across the world. And, they were talented, musically-gifted kids who decided to play music instead of join the army.

Success is a personal definition that each individual has to decide for themselves. Is it the amount of people who know who they are? Is it the type of car they drive or the size of their home? Or is it something else, like how you treat strangers you never met? Or how polite your kids are? Is it the amount of DVDs you own or is the amount of DVD's you have given away?

Ultimately, success comes from the attainment of goals set by the individual and the willingness for that person to see they have achieved that goal and take happiness or pleasure from it.

And a boat.