Are Pre-Approvals On Their Way Out?

Posted on June 23, 2009 at 5:20 pm 
Filed Under Mortgage Planning, Real Estate | Leave a comment

An intriguing article was recently published online posing the above question.

If you understand how a mortgage pre-approval works, its probably a safe assumption that you understand that the benefit is very much in the favor of the mortgage client rather then the mortgage Lender. After all, in order for a Lender to provide an authentic pre-approval, they have to run through the same administrative process they would for a new mortgage client with a firm commitment. However, with a pre-approval the client always has the option of opting out and walking away from the deal considering there is no penalty or loss to do so.

Recently, one large bank has officially removed themself from the pre-approval market based on the internal costs incurred as a result of providing this service. In reality, less then one third of pre-approvals actually close and in the case of the major lender mentioned above, it is rumored that they had been losing $20 million in business each year before they decided to pull that service from their product shelf.

Your Take-Away: To me it seems clear that a pre-approval is really an attempt by the Lenders of the world to get their feet in the door with potential mortgage clients by offering a service that actually may or may not prove to be of any value to them from a business perspective. If that is in fact true, that implies that you as a potential client hold all the cards.

Many people feel as though they are locked in when they put a pre-approval in place or that it can somehow prove to be detrimental to their search for a mortgage. There are no penalties, nothing locking you in to any one lender, and no drawbacks to getting pre-approved. After all, if there were then the Lenders would be making money, not losing it.

My suggestion, if you are even thinking about moving or refinancing, put a pre-approval in place as soon as possible and lock in the best rate possible for the next 120 days.

Until next time, have a Terrific Tuesday.

Chris

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Susan Boyle on “Britain’s Got Talent”

Posted on April 16, 2009 at 6:29 pm 
Filed Under Personal | Leave a comment

Once in a while we see things that remind of us of the little lessons in life we so often forget.

Although this is not at all related to our regular posts on this blog, I felt it necessary to post the link below both out of respect for what Susan accomplished, and also as a reminder that we can’t be too quick to judge. I apologize in advance to anyone who didn’t expect this post on our blog, and I hope you can understand that our blog isn’t about just people’s money, it’s about the people we help with their money. And this video is very much about all of us, as people.

Watch this very short video and be inspired, be awestruck, and be reminded!

Until next time, have a Terrific Thursday!

Chris

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Couple Declined Their Mortgage Insurance Claim - The Toronto Star

Posted on April 9, 2009 at 4:00 pm 
Filed Under Financial Planning, Insurance Planning, Mortgage Planning, Personal Insurance | Leave a comment

Third party articles are always of interest to us, and this specific article in the Toronto Star is an eye opener for anyone. 

Ellen Roseman of The Toronto Star recently documented one couple’s fight to get paid on a death claim that was made through their TD Canada Trust. We’ve talked about the perils of Mortgage Insurance offered through your lender in posts before, but this story is a real life experience for one Toronto based couple and I’m sure it will make you question where you hold your insurance.

The good news is that despite the original decline of their claim, to TD’s credit they did revisit the situation once the Star became involved and later paid out the claim in full. The reality however is that had they not gone to the Star for help, they may never have received that money. And even if they would have, do you think they really wanted to have to fight for something they knew all along they were entitled too? Never mind the fact that they were also in the midst of dealing with the news of a terminal Cancer diagnosis. Perfet timing it seems?!?

Your Take-Away: The most chilling comment written by Ellen was quite poignant, and one you should seriously considering thinking through. Ellen wrote: “The lesson: Banks can issue insurance and deny coverage years later if they think there was misrepresentation on an application.”

I can’t help but think it may just be time to at least explore your other life insurance options, mainly because the underwriting is done up front, not at claim time. And after all, you’re most likely going to save some money too. Not a bad thing considering the current status of our economy!

Until next time, have a very Happy Easter!

Chris

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Prayer Vigil Tonight at Six Steps for George Koutroubis

Posted on February 20, 2009 at 4:19 pm 
Filed Under Uncategorized | Leave a comment

The search continues for our good friend and relative George Koutroubis.

We are hosting a prayer vigil TONIGHT at Six Steps Restaurant at 6:00pm. We are asking anyone to join us at 55 Colborne Street whether you pray or not, whether you know him or not, or whether you simply can be here to support those involved.

I’m calling anyone we know to join us tonight and lift our thoughts and concerns to our God. Please…if you can be here then do just that. It’s time put aside anything other then our friend and relative George Koutroubis and ask that God will provide wisdom, strength and clarity to those involved.

Thank you in advance for your continued prayers and support.

Chris & Elisseos

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Help Find GEORGE KOUTROUBIS

Posted on February 19, 2009 at 1:15 pm 
Filed Under Personal | Leave a comment

Although this is not a typical post for us, we are calling on all of you for your help and support.

A good friend of ours has been missing since Tuesday. He was last spoken too around 4:00pm and last seen around 7:30am that same morning. I have attached the press release below and a link to the official report on www.cp24.com can be found here with a picture as well: http://www.cp24.com/servlet/an/local/CTVNews/20090218/090218_missing_man/20090218/?hub=CP24Home

MISSING PERSONS REPORT: 

The family and friends of a missing Toronto restaurant owner have launched a massive online and in-person search for the missing man.

George Koutroubis, owner of Six Steps Restaurant on Colbourne Street, was last seen on Tuesday at 7:30 a.m. near Front Street and Blue Jays Way, police say.

However, friends of the missing man say they have received reports he contacted someone from his cellphone later that day while driving in Whitby.

The 36-year-old is described as white, five foot eleven and 230 pounds with brown eyes and short, black, receding hair. He was last seen driving a black, 2008 BMW X5 with Ontario licence plate BCSS 209.

Police say they are concerned for his safety, and his friends have organized a search in areas of Toronto and Whitby. They are posting up-to-date information on Twitter in hopes that the site’s users will have information on his whereabouts.

According to the Twitter posts, Koutroubis’ vehicle also remains missing. It is reportedly decorated with a Pittsburgh Steelers license plate border.

Six Steps is an upscale Italian restaurant located near Yonge and King Streets. It has been open since 2007.

Anyone with information is asked to contact Crime Stoppers anonymously at 416−222−TIPS (8477).

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Canadian Fund Managers Outperform

Posted on February 4, 2009 at 7:06 pm 
Filed Under Financial Markets, Financial Planning, Investment Planning, Mutual Funds | Leave a comment

Does it really pay to invest in mutual funds? Apparently, it does.

According to a recent report, Canadian Fund Managers outperformed the S&P/TSX in the final quarter of 2008. That is especially important considering it was one of the worst three month periods in market history. Although the difference was small, specifically a -22.71% return for the index versus a -21.67% return for active Managers, the news is still quite positive. In fact, over 50% of active Managers were in this category of “outperformers”, while in previous periods that number was as low as 11.2% to 22.0%.

Your Take-Away: There is no question that you are probably thinking that this news is not overwhelmingly positive considering that the markets still fell quite steeply and that it is the first time in a long time that so many Managers beat the index. I agree.

That said, what I do think is important is that although the majority of Fund Managers may not have beaten the index in the past, there are still many that do. What that says to me is that the Managers you choose to invest with need to be well researched and have some form of proven track record. If in fact you happen to find one of these great Manager’s, you can unquestionably justify that there are times when Mutual Fund’s are worth their price tag.

One great place to start in terms of researching both the fund you are being recommended as well as the Manager who is responsible for it is www.morningstar.ca. I have used that many times myself and I’m confident that you will find this resource quite useful for your own due diligence.

Until next time, have a Wonderful Wednesday!

Chris

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The TFSA: Should I Invest in My RRSP or TFSA (Part 4 of 4)

Posted on January 21, 2009 at 4:08 pm 
Filed Under Financial Planning, Investment Planning, Retirement Planning | Leave a comment

With the recent development of this latest CRA initiative, the biggest question most are asking is “Should I invest in my RRSP or my new TFSA?”. Truth is, that’s a very fair and personal question all at the same time.

It’s personal mainly because of the fact that each person’s situation is very unique and that means that there really is no easy answer or one size fits all solution, except one. That one exception is based on whether or not you contribute the annual maximum towards your RRSP every year, because if so, your new TFSA is by far the next best place to put your additional retirement savings.

If you don’t fall into the small percentage of Canadians who max out their RRSP contributions every year, we need to make a couple of assumptions and look forward to the day you begin to redeem money from either account. In other words, your retirement. Take a look at a couple of the different scenarios below:

Your Take-Away: As I mentioned above, there is definitely no one size fits all answer to the question we are addressing today. My suggestion is that you take an overall look at your entire portfolio, revisit and maybe even redefine your goals, and then decide which account is better for you in your specific situation.

In the end, your best bet is to try and take maximum advantage of both your RRSP and your TFSA. If you’re like most and do not have that luxury, why not invest in your RRSP and then put your tax refund back into your TFSA? Just a thought.

Until next time, have a Wonderful Wednesday!

Chris

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The TFSA: Why Does it Make Sense for You (Part 3 of 4)

Posted on January 17, 2009 at 2:48 pm 
Filed Under Financial Planning, Investment Planning | Leave a comment

As I sit here on my couch writing this post, I realize how personal this question really is.

We have discussed what the Tax Free Savings Account (TFSA) actually is and how it works, and now we need to look at why it may in fact make sense for you. The reality is that this type of account can work for just about everyone, but it is essential that you know why you want to take advantage of this new investment vehicle.

That said, there are multiple reasons and ways that you can make this account work for you. In order to keep this post short and to the point, I’ve chosen to try and put some examples together in the form of bullet points. Some of the reasons this could make sense for you could be:

Your Take-Away: By no means is the list above exhaustive in nature. There are multiple reasons for a Canadian to invest in the new TFSA, but it is very difficult to specify which one will make the most sense for you. The only question you need to ask yourself is “do you want to eliminate the taxes you currently pay on your investment growth?” If so, looking at the TFSA is a complete no brainer and something that certainly deserves a small investment of your time.

A couple of more posts to come on the new TFSA, but until then, have a Wonderful Weekend.

Chris

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The TFSA: How Does It Work (Part 2 of 4)

Posted on January 13, 2009 at 4:13 pm 
Filed Under Financial Planning, Investment Planning | Leave a comment

As discussed in yesterday’s post, today I will be explaining the basics of how the new TFSA actually works.

According to the official definition as stated by Canada Revenue Agency, the TFSA is “a new way for residents of Canada to set money aside tax free througout their lifetimes.” They go on to say that “contributions are not tax deductible for income tax purposes and the income earned inside the account is tax free, even when it is withdrawn.”

Because there are a number of rules surrounding this amazing new account, I have chosen to use a point form format to better explain what they are: 

Your Take-Away: As I’ve mentioned previously, this is a tremendous new investment vehicle and it is well worth your time to look into this further. Learning how to properly incorporate this new account within the rest of your financial plan appears to be one the largest challenges that most will face, which is why understanding how it works is so essential.

If you would like to read more detailed information about the TFSA and how it works, please see the attached CRA document entitled “The TFSA Explained by CRA“.  

Until next time, have a Terrific Tuesday.

Chris

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The TFSA: Introduction (Part 1 of 4)

Posted on January 12, 2009 at 7:37 pm 
Filed Under Canadian Taxes, Financial Planning, Investment Planning | Leave a comment

The Tax Free Savings Account (TFSA) is one of the hottest topics in the Canadian investment world today, and for great reason.

Like everyone else, I believe the TFSA is an incredibly useful savings vehicle for anyone currently living in Canada. In fact, I am exceptionally grateful that the Canadian Government decided to bless an iniative of this nature.

Over the course of the next few days, I plan on providing you with a very simple explanation of what the TFSA is. This is not an overly complicated account or tax vehicle, but it is one that needs to be understood properly in order to take full advantage of its full potential.

Your Take-Away: Because the TFSA is so new to the Canadian market, in fact January of 2009 is the first time that one could open an account, I plan on providing you with an explanation of a number of different questions and topics relating to this new account. Together we will cover the following topics specific to the TFSA:

  1. How does it work?
  2. Why does it make sense for me?
  3. Is it better to invest in my RRSP or my new TFSA?

I am very excited about this series and hope that by the time you are finished reading our posts you will have a much clearer understanding of what this TFSA is really all about and better yet, how you can make it work most effectively for you and your family.

Until next time, have a Magnificent Monday!

Chris

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