At Robert Floris’ Mortgage Architect’s Office, we take great pride in providing the best in mortgage service. More importantly we now provide sage financial advice to help clients enjoy a better life when entering into a house agreement.
My thoughts on improving my mortgage service come back to me when reflecting on what worked for past clients and friends. I was born in Hamilton, Ontario though my parents were Italian immigrants. Living in little Italy in Hamilton provided some valuable insight. How did these immigrants with a grade 3 to grade 8 education retire with money? Well simply, they did not incur debt; they paid cash for everything (except their houses). They did not incur debt like today’s Canadians do.
The second important life lesson was during the last recession. When the economy went down people were scrambling to survive. What did these clients do, they went to credit items such as credit cards and lines of credit and it affected their cash flow.
These two past learning experiences helped me think of a better way to help mortgage holders how to live. The best part is that it is very beneficial to the clients and not the banks. When entering into a mortgage agreement these should be your priorities:
Your current relationship
Most people will be surprised that we mentioned your relationship. I know what you’re saying, what does this have to do with mortgages. Couples must be on the same page in regards to finances. You cannot have a spender and a saver; this will tear apart your family needs. The couples must have goals of what they want from life, how fast they want to pay the house off, how they choose to spend their disposable income and how to save.
In terms of having a mortgage, this is the most important item. When you save money, you have choices. When you have choices you are not subject to other credit items. When you are not subject to other credit items, you have better cash choices and you’re not subject to any economic shocks. If you save money and do not have an emergency such as a new furnace, then you have cash to go on a holiday. I cannot stress this enough, when you save money, you are not vulnerable to the bank trying to control your cash flow. Your savings go up and the mortgage goes down. Both these items are positive for the clients.
Now for the mortgage, can you spend ten minutes a year on reviewing your biggest debt item? This is a simple trick of which only 6% of Canadians adapt. Can you increase your payments by $50 to $100 per month per year? Why? The key to a mortgage is amortization by increasing your payments; you take away years on the mortgage. For example if your monthly P + I payments are $1,029.34 and you have a $225,000 mortgage over 25 years. If you increase the payment to $1092.44, a $63.10 increase you save two years. Now a two year savings amounts to a savings to approximately $25,000. NOW GO FOR IT!