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					                             A speciAl Advertising feAture by MediA plAnet

          no.1/september 2010



                    BUILDING HOUSES,
                     CREATING HOPE
              MCAp joins forces with Habitat For Humanity to provide Canadian
                         families with more than just mortgage advice
PhOtO: McaP

fixed vs. variable             Observation          Housing trends in
Which rate is right            the food that        the gtA
for you?                       makes your           downtown fringes
                               children smart       in high demand
2 · septeMber 2010                                          A speciAl Advertising feAture by MediA plAnet


                                                                                                                                            CHOOse THe
                                                                                                                                           FeATuRes FOR              We RecOMMenD
                                                                                                                                                                                             Variable vs.
                                                                                                                                            MORTgAge                                         Fixed
                                                                                                                                                                                             doug conick
                                                                                                                                                                                              explains how to
                                                                                                                                                                                             determine which is
                                                                                                                                                                                             right for you.
                                                                                                                                                                           pAge 4

                                                                                                                                                                     “flexibility can at
                                                                                                                                                                     least be as
                                                                                                                                                                     important as

                                                                                                                                      PhOtO:haBItat FOR hUManItY

                                                                                                                                                                     Mortgage ABC’s                         p. 4
                                                                                                                                                                     Know the ins and outs of buying a home.

Canada may have avoided the worst of the mortgage crash                                                                                                              Mortgage brokers
                                                                                                                                                                     An unexpected way to look beyond the

that plagued the United States during the recession. But there
are still changes you should be aware of.
                                                                                                                                                                     1st editiOn, septeMber 2010

                                                                                                                                                                     Country Manager: gustav aspegren

the world of mortgages
                                                                                                                                                                     editorial Manager: Jackie McDermott

                                                                                                                                                                     Responsible for this issue:
                                                                                                                                                                     publisher: taebah Khan

is changing
                                                                                                                                                                     Designer: Penelope graham
                                                                                                                                                                     Contributors: Linda Belanger, scott
                                                                                                                                                                      Bergen, tim Bzowey, Doug conick,
                                                                                                                                                                     Bernice Dunsby, Jennifer hines, Jessica
                                                                                                                                                                     hume, Marjo Johne, Marcia Moffat, Jim
                                                                                                                                                                     Murphy, cathy Preston, Peter Wouters

                                                                                                                                                                     Distributed within:
                     ortgages ha-        red. Roughly 40 percent to 50 per-                                               gage; fixed or variable rate or a com-     toronto star, september 2010
                                                                                                                                                                     this section was created by Mediaplanet
                     ve received         cent of all Canadian mortgages are                                               bination of both; prepayment pri-          and did not involve the toronto star or its
                     a lot of me-        insured. Two years ago the federal                                               vileges; portability privileges (ta-       editorial Departments.

                     dia attention       government announced that insu-                                                  king your mortgage with you when
                     lately. Stories     red mortgages cannot have amor-                                                  you move). With the recent changes
                                                                                                                                                                     Mediaplanet’s business is to create new
                     on consumer         tization periods of longer than 35                                               and multi-features available it is im-     customers for our advertisers by providing
                     debt, chan-         years and also require a minimum                                                 portant that a consumer have all the       readers with high-quality content
                                                                                                                                                                     that motivates them to act.
ges to mortgage insurance rules,         down payment of five percent. For                                                information available. Part of this
interest rate decisions and the          the first time, the government also                                              is doing research on mortgages by
                                                                                   Jim Murphy, AMp
overall real estate market are only      introduced a minimum credit score.        president and ceO                      way of the internet,but also involves
some of the issues. Mortgages are of        This past spring the federal go-       canadian Association of Accredited     using the services of a mortgage pro-
                                                                                   Mortgage professionals (cAAMp)
great importance as they are             vernment made further changes to                                                 fessional.
the most important financial             mortgage insurance rules including        MY Best tIPs
commitment a consumer will make          a requirement that consumers qua-         picking a mortgage                     seek a professional opionion
in their lifetime.                       lify at the five year posted rate even    Understanding each step of the         The Accredited Mortgage Professi-
                                         though they may be taking out a va-       mortgage process is key to ensur-      onal designation (AMP) is the only
Weathering the recession                 riable mortgage or a mortgage with        ing the biggest investment of your     national designation for mortgage          PROtectIng YOUR
Canada did not suffer the same           a shorter term. Other changes inclu-      life is the right one for you. There   professionals. AMPs are required           hOMe WIth LIFe
mortgage problems that occur-            ded limiting the amount of refinan-       is no substitute for being prepared.   to pass a qualifying course and to         InsURance
red in the U.S. We did not have          cing on a property to 90 percent of       Educate yourself and get the facts     keep up to date on emerging indu-
the same percentage of subprime          the value and requiring a 20 percent      you need to make the right mort-       stry trends by taking annual con-          Buying a new home can be
mortgages, we did not have               down payment on investment pro-           gage decision and increase your        tinuing education courses. Over-           exciting, but keep in mind
exotic mortgage products with rates      perties. These changes were imple-        home buying confidence.                all, AMPs have been in the industry        that it is a key life event that
being reset higher after 18 months,      mented to ensure that Canada main-                                               longer and are more knowledgea-            requires a thorough review
and we also finance our mortga-          tains a healthy mortgage market           First steps                            ble about the market. When a con-          of your personal financial
ges differently. However, there          and does not replicate the problems       ■■Know your credit score               sumer is sitting across the table fi-      plan, including your insu-
have been changes to the Canadian        of the United States.                     ■■Save for a down payment              nalizing their most important fi-          rance needs.
mortgage market in recent years.                                                   ■■Learn key mortgage termino-          nancial commitment they should
  Chief among these changes are          Choosing your features                    logy                                   be confident that the individual is         Imagine if something unexpec-
the rules that govern mortgage in-       Mortgage insurance is just one as-        ■■Determine how much you can           well versed in all the aspects of the      ted - such as a serious illness or ac-
surance. In Canada, when dealing         pect to be aware of when taking out       afford                                 mortgage product they are recom-           cident - happened to you or your
with a financial institution and your    a mortgage. A consumer must also          ■■Get pre-qualified                    mending. For further information           spouse. Without the right insu-
down payment is 20 percent or lo-        decide on a number of other featu-        ■■Talk to a mortgage professional      on where to find an AMP near you,          rance coverage, your family may
wer, mortgage insurance is requi-        res such as: an open or closed mort-                                             visit                       not be able to afford the costs asso-
                                                                                                                                                                     ciated with owning a home.
                                                                                                                                                                        “As a new homeowner, there is
                                                                                                                                                                     no better time to review your life
                                                                                                                                                                     insurance needs and protect your

Housing trends in the Gta
                                                                                                                                                                     family’s financial future,” said Ca-
                                                                                                                                                                     thy Preston, vice president, Life
                                                                                                                                                                     and Health, RBC Insurance. “An
                                                                                                                                                                     insurance advisor can help you
The greater Toronto Real                 of all transactions through the year.                                            Western attraction                         determine what type of coverage
estate market continues to               Condominium apartments continue                                                  When it comes to location, Craw-           is best for you to minimize the im-
hum along at a steady pace.              to occupy the second spot, accoun-                                               ford says areas on the fringes of the      pact of unfortunate events.”
                                         ting for about a quarter of real esta-                                           downtown core continue to attract
Despite a slow summer, 2010 is still     te sales in the city, followed by semi-                                          families because of their proximi-         Here are some things to
turning out to be a good year for real   detached homes, condo townhouses                                                 ty to the city centre and easy access      consider as you review your
estate in the GTA, with total sales in   and row townhouses.                                                              to transit. He cites central Etobicoke     life insurance needs:
the first seven months of the year up      Stevie Crawford, a Toronto realtor                                             between Jane and Bloor West to Kip-
12 percent compared to the same pe-      with RE/MAX Condos Plus and mort-                                                ling, as well as the western reaches       ■■Could your family afford to keep
riod in 2009, according to the Toron-    gage agent with Argentum Mortgage                                                of Queen and King streets.                 your home with only one income?
to Real Estate Board.                    & Finance Corp, highlights a trend                                                  “As well, we cannot ignore the re-
  Overall, sales figures for the last    he’s noticed with buyers who fall in-                                            vitalization of River City east of the     ■■Could your family pay the
year show an eight percent increase      to the Baby Boomer category.                                                     Don River,” says Crawford, who wri-        mortgage and cover utilities
from the previous year.                    “We are noticing an increase in                                                tes a blog at torontorealestatetrends.     and maintenance expenses?
                                         the amount of buyers within a cer-                                               com.“We are seeing unparalleled go-
What’s in demand?                        tain age and income demographic                                                  vernment mobility here and that’s          ■■Could your family maintain
So what types of properties are fa-      opting for single-storey bungalows,”                                             very encouraging.”                         their current lifestyle and pursue
ring well in today’s market? The         he observes. “Interestingly, most of      BOunCIng BACK                                                                     future aspirations?
numbers show detached homes to           these buyers previously occupied          summer started off slow, but sales
                                                                                   are up this year 12 percent from the                                                                        caThY PresTon
be the leader in housing sales, con-     larger two-storey homes above 2,500       same period in 2009.                                            Marjo johne                 vp, life and health, rbc insurance
sistently accounting for almost half     square feet.”                                                                                   
                                                                A speciAl Advertising feAture by MediA plAnet                                                  septeMber 2010 · 3

the ins and outs of term insurance
   As the name implies, term insur-     mind that most term policies have          Term insurance can be used to       nancially dependent on their par-      different types of insurance to pro-
ance provides coverage for a specif-    a set renewal period. At the end of     cover a variety of insurance needs,    ents.                                  vide the financial security you want
ic number of years, or “term”. Tradi-   this period, you’ll need to “renew”     such as a mortgage, personal or          When considering a term poli-        for yourself and your family. This is
tional policies expire at the end of    the policy at new rates. Since age is   business loans or replacing an in-     cy, make sure it can be converted to   where an independent advisor can
the term or when the insured per-       a major factor in pricing insurance,    come after a loved one dies. Its re-   permanent coverage without hav-        help in designing a comprehensive
son reaches age 65 or 70. Today, you    the cost will most likely increase.     al benefit is in providing larger      ing to prove you are still in good     insurance program.
can find term policies that will in-    Look for a guaranteed renewable         amounts of coverage at a lower cost.   health. This convertibility feature
sure you until age 100 and beyond.      term insurance plan so that you are     This can be especially important to    can be extremely valuable if you de-                          PeTer WouTers
   The main advantage of purchas-       guaranteed the right to renew your      a family with small children where     cide you want to keep your coverage              director, tax and estate planning
ing term insurance is the low ini-      coverage even if your health has de-    there is a need to provide financial   after the term is up.                           and retail risk product Marketing
tial premium or rate. But keep in       teriorated.                             security while the children are fi-      You may require a combination of                                    empire life
4 · septeMber 2010                                           A speciAl Advertising feAture by MediA plAnet

  news                                                                                                                                        TIp

                                                                                                                                         KnOW THe
                                                                                                                                         TRenDs OF                       DOn’t MIss!

                                                                                                                                                                         Buying a
                                                                                                                                                                         home? Know
                                                                                                                                                                         your aBC’s
                                                                                                                                                                         Buying a house is a heady
                                                                                                                                                                         prospect, whether you’re
                                                                                                                                                                         a first-time purchaser or
                                                                                                                                                                         a real estate veteran. But
                                                                                                                                                                         regardless of your expe-
                                                                                                                                                                         rience, it’s important to un-
                                                                                                                                                                         derstand the financial im-
                                                                                                                                                                         plications of home owner-
                                                                                                                                                                         “The drive to own a home someti-
                                                                                                                                                                         mes overrules everything else and
                                                                                                                                                                         as a result buyers don’t look at the

Fixed vs. variable:
                                                                                                                                                                         bigger financial picture,” says Ted
                                                                                                                                                                         Rechtshaffen, a certified financial
                                                                                                                                                                         planner who is president and CEO
                                                                                                                                                                         of TriDelta Financial in Toronto.
                                                                                                                                                                            Sometimes, homebuyers simp-

which rate is right?
                                                                                                                                                                         ly don’t know enough to ask the
                                                                                                                                                                         right questions and review the re-
                                                                                                                                                                         levant factors.But it’s never too la-
                                                                                                                                                                         te to learn, Rechtshaffen says.
                                                                                                                                                                            As a starting point, prospective
                                                                                                                                                                         buyers should get a good grasp of
                                                                                                                                                                         how much they’ll need to save to

 shOWcase                                                                          “flexibility can at                     of those surveyed indicated they’d
                                                                                                                           have difficulty making their regu-
                                                                                                                                                                         avoid being burdened by a large
                                                                                                                                                                         mortgage. In addition to the down
■■Question: Are you caught                                                         least be as                             lar mortgage payment within three             payment, there are other first-
between the cost certainty of a
fixed rate mortgage and a                                                           important as rate.”                     months if the primary income ear-
                                                                                                                           ner lost their job.
                                                                                                                                                                         year expenses such as land trans-
                                                                                                                                                                         fer taxes, renovations, moving
 variable rage?                                                                                                                                                          costs and furniture.
■■Answer: evaluate the trends                                                                                              The future of banking
in your financial circumstances                                                                                             Increasingly, Canadians are reali-            Which rate?
before you decide.                                                                 Doug Conick
                                                                                                                           zing that they can no longer look             Knowing how interest rates work
                                                                                   president and ceO, Manulife bank of     at their mortgage in isolation. In-           will also help home buyers decide
Historically, most Canadian ho-                                                    canada                                  stead, they’re looking for more in-           whether they should sign up for a
meowners were happy to pay a              ners whose financial circumstan-         made any extra mortgage pay-            tegrated banking products that al-            fixed-rate or variable mortgage, or
slightly higher rate in exchange for      ces change, for better or worse.         ments in the past year; however,        low them to quickly and comfor-               a combination of both.
the cost-certainty associated with a         Flexibility can be at least as im-    nearly half indicated they’d be ve-     tably adapt to changing financial                Financial literacy should inclu-
fixed rate mortgage. More recently,       portant as rate.                         ry likely to do so if they were able    circumstances.                                de understanding the legal impli-
some Canadians have shifted to va-           Most homeowners experience            to easily access that money again         A new generation of “all-in-                cations of home ownership, says
riable rate mortgages, partially in re-   fluctuations in income and expen-        if their needs changed. They pas-       one” banking products, pro-                   Ray Leclair, a real estate lawyer
sponse to research showing that va-       ses not only from year to year, but      sed up the opportunity to reduce        vide this flexibility by giving               and vice-president of the Title-
riable rate mortgages often cost less     from month to month.                     their debt–not because they didn’t      homeowners the ability to:                    PLUS program at Lawyers’ Profes-
over the long term.                          A recent survey of Canadian ho-       have the money–but because their                                                      sional Indemnity Company in To-
                                          meowners found that, while most          mortgages lacked the flexibility        ■■Adjust their payments as their              ronto.
Different, but the same                   consider being debt-free a high fi-      they desired.                           needs change, as long as they re-                “People don’t realize that the
Despite their differences, most           nancial priority, almost half fai-          Traditional fixed and variable ra-   main within their borrowing li-               title to their home can be sto-
traditional fixed and variable-ra-        led to reduce their debt at all in the   te mortgages can also quickly put       mit                                           len,” says Leclair, whose compa-
te mortgages share three key              preceding 12 months.                     homeowners in a precarious po-          ■■Repay their variable-rate debt              ny sells title insurance to protect
similarities:                                Digging deeper, almost two-           sition if their finances take a turn    as quickly as they want, without              homeowners against this risk.
                                          thirds indicated that they hadn’t        for the worse. Forty three percent      penalty                                       “That’s why it’s important to have
■■They require regular, inflexible                                                                                         ■■Re-borrow any money they’ve                 an in-depth discussion with a real
payments                                                                                                                   already used to repay their debt,             estate lawyer.
■■They charge penalties for repay-        ■■ 69% of homeowners consider being      permanently lose access to that money   up to their borrowing limit
ing the debt too quickly            debt-free among their highest financial         ■■ 43% would have difficulty making      ■■Divide their debt between va-                                      Marjo johne
■■Once a payment has been made,     priorities                                     their regular mortgage payment with-    riable and fixed interest rates                   
that money cannot be easily re-bor- ■■ 46% have as much or more debt than          in three months if the primary income
rowed                               they did a year ago                            earner lost their job                   In a world of ever-changing finan-            paying off your
                                    ■■ 64% failed to make any extra mort-
In other words, traditional fixed gage payments in the past 12 months
                                                                                   ■■ Source: Manulife Bank survey of
                                                                                   1,000 Canadian homeowners, con-
                                                                                                                           cial circumstances, the question
                                                                                                                           for homeowners is no longer “fix-             mortgage
and variable-rate mortgages pro- ■■ 46% would be very likely to make ex-           ducted by Research House July/August    ed vs. variable” but “flexible vs. in-
vide little flexibility for homeow- tra mortgage payments if they didn’t           2010.                                   flexible”.                                    There are ways you can reduce the
                                                                                                                                                                         length of your mortgage, it will al-
                                                                                                                                                                         so help you in minimizing cost of

                                                                                                                                                                         ■■Increase your frequency of pay-

Buying your first home: down payment
                                                                                                                                                                         ment: it will save you hundreds of
                                                                                                                                                                         dollars in annual interest costs.
                                                                                                                                                                         ■■Prepayments and anniversary

options and pre-approvals
                                                                                                                                                                         payments: Mortgage providers al-
                                                                                                                                                                         low you to make up to 20% of the
                                                                                                                                                                         entire mortgage once a year. Tax
                                                                                                                                                                         refunds or annual bonus help with
                                            This also allows you to lock in your   west carrying costs because they        include the insurance premium.                these payments.
 QUestIOns & ansWeRs                      interest rate with a 90 day guarantee    do not have to be insured against                                                     ■■ Make lump sum payments.
                                          which is a great feature in a rising     default. So while it may take long-     using Your RRsp as a Down                     ■■ Whenever possible double your
As a first-time home buyer, you pro-      interest rate period.                    er to accumulate this type of down      payment                                       payments
bably have many questions, in-              Homebuyers will generally need         payment, it will also save on mort-     Under the federal government’s Ho-            ■■Shorten length of time to repay
cluding the right down payment            to have an appraisal of the property     gage costs over the long run.           me Buyer’s Plan,first-time home buy-          your loan: Ask your mortgage pro-
amount and whether you’ll be              they are purchasing in order to ob-                                              ers are eligible to use up to $25,000 in      vider to show you how you can se-
approved for a mortgage.                  tain a firm approval of their purcha-    Low Down payment Insured                RRSP savings per person ($50,000 for          lect 20 years amortization period
  One of the first steps in buying        se.                                      Mortgage                                couples) for a down payment on a ho-          instead of 25 years.
your home is obtaining a pre-appro-         When it comes to deciding on the       Most lenders now offer insured          me. The withdrawal is not taxable as          ■■If interest rates have dropped
ved mortgage.A preapproval will de-       right down payment amount, there         mortgages for both new and re-          long as you repay it within a 15-year         when you renegotiate your next
monstrate to sellers and real estate      are a number of options to consider:     sale homes with lower down pay-         period.To qualify, the RRSP funds you         term, keep your mortgage pay-
agents that you are a serious buyer,                                               ment requirements than conven-          plan to use must have been in your RR-        ments the same. More money will
which can help in your negotiations.      Conventional Mortgage                    tional mortgages-as low as 5%. Low      SP for at least 90 days.                      go directly to paying down the
  Another advantage of having a           A conventional mortgage requi-           down payment mortgages must be                                                        principal.
preapproval is that you will know         res a down payment of at least 20%       insured to cover potential default
how much you can realistically af-        and is offered on both a fixed or va-    of payment; as a result, their car-                             Bernice DunsBY
ford and what your payments will be       riable interest rate mortgage. Con-      rying costs are higher than a con-                    director, Home financing, rbc                           TaeBah Khan
before you start looking at homes.        ventional mortgages have the lo-         ventional mortgage because they                        
                                                              A speciAl Advertising feAture by MediA plAnet                                                   septeMber 2010 · 5

    DOn’t MIss!

ensure your home insurance is updated
According to a recent RBC In-         tal value of all of their contents for   they have the right amount of co-     pes of losses, such as theft, not for   These types of additions can be
surance / Ipsos Reid survey,          any type of loss, but there can be       verage.”                              unexplained losses such as the di-      purchased at any time and usu-
only 38 per cent of those Ca-         limits,” said Francois Boulanger,          For example, an average ho-         amond falling out of a ring.            ally do not require a deductible
nadians who bought or acqu-           president and CEO of RBC Gene-           me insurance policy provides up           To ensure valuable jewelry is       amount to be paid.
ired something of value, such         ral Insurance Company. “It’s im-         to $5,000 in coverage for jewelry;    fully insured, policy holders can
as jewelry, updated their ho-         portant for Canadians to regularly       however, a diamond ring alone         purchase additional coverage,
me insurance coverage.                assess their belongings, including       can easily exceed that amount. In     known as a “rider”, on individu-                                   TiM BZoWeY
“Most people assume their home        jewelry, and then check with their       fact, that same policy may only co-   al items to recover the full repla-      vp, property and casualty, rbc insurance
insurance policy will cover the to-   insurance advisor to determine if        ver the replacement of certain ty-    cement cost, for any type of loss.           
6 · septeMber 2010                                                                                           A speciAl Advertising feAture by MediA plAnet


Is refinancing a                                                                                                                                                                                                                                                                                                  Facts

good idea?
Question: Are you ready for a big purchase, but unsure how                                                                                                                                                                                                                                                        Make the
to allocate your funds?                                                                                                                                                                                                                                                                                           grade with
Answer: Crunch your numbers first to determine your                                                                                                                                                                                                                                                               your credit
payment strategy.                                                                                                                                                                                                                                                                                                 score
                                                                                                                                                                                                                                                                                                                    Want to improve your
                                                                          with another bank,” says Meaghan                                            ge,” she says. “If you’re only going to                                      you pay on your mortgage.”                                                     credit score? Here are some
Maybe you’re in the market
                                                                          Hutchings, a Toronto-based mortga-                                          be saving a little,then maybe it’s bet-                                         Whatever your reason for wan-                                               steps to take you in the right
for a new car or finally ready
to redo your tired-looking kit-                                           ge agent with The Mortgage Coach,                                           ter to just be aggressive about pay-                                         ting to refinance your mortgage, the                                           direction:
chen. Or perhaps you want to                                              part of the Invis network of mortga-                                        ing off your credit card debt.”                                              experts say it’s a good idea to talk to
take everything you owe and                                               ge brokers. “So you have to consider                                           Given today’s relatively low inte-                                        your banker or mortgage professio-                                             ■■ Get the picture. To ensure credi-
combine them into a single                                                all the costs–including the penalty                                         rest rates, many Canadian with fix-                                          nal before making a final decision.                                            tors have accurate information about
debt. Is it a good idea to refi-                                          amount, your existing mortgage ra-                                          ed-rate mortgages are also looking                                              “The bottom line result for this                                            you, get a copy of your credit report
nance your mortgage to pay                                                te, appraisal fees and lawyer fees–                                         at moving their mortgage to another                                          decision should be for you to better                                           through Equifax Canada (www.equi-
for these expenses?                                                       and figure out if the cost savings                                          bank as a way of reducing their hou-                                         off in the short and long term,” says                                 or TransUnion (www.tran-
                                                                          from a lower interest rate will actu-                                       sing costs. CIBC is responding to this                                       Hutchings at The Mortgage Coach.                                     
Next to cash, breaking your existing                                      ally offset these costs.”                                                   increasingly popular refinancing                                             “If the savings on lower interest ra-
mortgage and then taking out a big-                                          While refinancing your mortga-                                           strategy with its Mortgage Switch                                            tes are not going to outweigh the                                              ■■ Stay below your limit. Avoid go-
ger one is generally the cheapest way                                     ge to consolidate multiple high-in-                                         offer, which gives customers cash                                            penalty and other related costs, then                                          ing over your credit card limits, since
to finance big expenditures, say the                                      terest is a good strategy, it requires                                      back on their new CIBC mortgage.                                             it makes no sense to refinance.”                                               higher balances have a negative im-
mortgage and money experts. Mort-                                         commitment and discipline, says                                                The cash, which is paid out up-                                              Hutching adds that even if you’re                                           pact on credit scores.
gages tend to have lower interest ra-                                     Anjel Van Damme, director, home                                             front, helps mitigate any prepay-                                            not actively considering refinancing,
tes than credit cards, bank loans and                                     equity financing products at RBC.                                           ment charges of breakage costs that                                          it’s a good idea to talk to your mortgage                                      ■■ Pay your bills regularly and on
credit lines. And payments can be                                            “It’s important to be disciplined                                        may be charged by the current len-                                           professional at least once a year to re-                                       time. At least cover the minimum
spread out over a longer period.                                          about not racking up debt again and                                         der.                                                                         view your mortgage and see if it is still                                      monthly payments.
  But before rushing out to speak                                         to be committed to paying it down,”                                            “Our message is that you don’t                                            the best option for you.
to your bank or mortgage broker, it’s                                     she says.                                                                   need to wait until your mortgage is                                             “Think of it as an annual checkup to                                        ■■ Go easy on those credit applica-
important to crunch the numbers                                              For those with only a few thou-                                          up for renewal to get advice about                                           make sure you’re still in the best mort-                                       tions. Every refusal shows negatively
and know all the facts, say the ex-                                       sand dollars in debt, consolidation                                         your options,” says Colette Delaney,                                         gage situation possible,” she says.                                            on your credit score, so avoid apply-
perts.                                                                    may not be the best route to take,                                          senior vice president,mortgages and                                                                                                                         ing for every zero-interest credit card
  “Many financial institutions char-                                      says Van Damme.                                                             lending at CIBC. “You can talk to an                                                                                                                        offer.
ge a penalty for breaking a mortga-                                          “Sometimes there are costs to refi-                                      advisor today to review options that                                                                                   Marjo johne
ge, particularly if you’re refinancing                                    nancing or adding on to the mortga-                                         could help you reduce the interest                                                          

                                                                                                                                                                                                                                                                                                                                                            Marjo johne

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                                                                 A speciAl Advertising feAture by MediA plAnet                                                        septeMber 2010 · 7

a line of credit provides
flexible funding
     DOn’t MIss!
Over the past two decades,              source of financing for big ticket ex-    but can be accessed multiple times.      segments.                                Trust, also offer credit lines that can
lines of credit have emerged
                                        penses such as a home renovation or       Another advantage to having a line         “So you could set up a segment for     be split up so that a portion is paid
as the preferred form of con-
sumer credit amongst Cana-              furniture purchases. Credit lines ty-     of credit? Unlike a mortgage, a line     your mortgage, another segment           according to a set schedule with set
dians, eclipsing credit cards           pically come with higher borrowing        of credit can be paid off without in-    for the purchase of a car, another for   amounts, just like a bank loan but at
and bank loans in popularity.           limits and lower interest rates than      curring penalties.                       investments and another for your         the interest rate of a credit line.
Today, credit lines account             credit cards. Tying a line of credit to     As they’ve grown in popularity, li-    child’s education,” explains Anjel
for about 60 percent of over-           your home’s equity can further re-        nes of credit have also evolved to of-   Van Damme, director, Home Equity
all consumer credit issued              duce your rate and give you the op-       fer consumers more options and be-       Financing Products at RBC. “Some
by the country’s chartered              tion of paying only the interest          nefits. For example, RBC Royal Bank      people find this convenient for tax
banks.                                  when cash flow is tight.                  offers a Homeline plan, essentially a    purposes, plus it makes it easier to
For homeowners,a line of credit pro-      Unlike a bank loan, a line of credit    home equity credit line, which can       track expenses.”                                                  Marjo johne
vides access to a convenient,flexible   requires only a one-time application      be set up in as many as five different     Some banks, such as TD Canada                
8 · septeMber 2010                                          A speciAl Advertising feAture by MediA plAnet


 Question: Did you know 1.3 million Canadians must choose
 between paying their rent or for their life’s necessities?
 Answer: Habitat For Humanity is helping these families in
 need by engaging Canadians in the fight for affordable housing.

 MCap gives families
 the key to hope
hOW We DID It                                   ment which MCAP will then match and          PROFILe             nity.                                   2000. In that time, the organiza-
                                                donate to Habitat for Humanity Canada.                              ”With 1.3 million Canadian fa-       tion has generated over $1.9 mil-
                                                  ”MCAP firmly believes in the work of Ha-   MCAp                milies having to choose between         lion in charitable donations. The
Most Canadians dream of ho-                     bitat for Humanity Canada, and we are al-                        paying their rent or paying for         goal of Key to Hope is to raise at
meownership. unfortunately for                  ways looking for new ways to engage our      ■■ MCAp is one      life’s other necessities, Habitat for   least an additional $1 million for
many, that’s all it will ever remain.           employees and customers in the cause,”       of Canada’s larg-   Humanity Canada is always loo-          Habitat over the next five years so
MCAP, one of Canada’s leading indepen-          says Ron Swift, President of MCAP. ”By al-   est independent     king for new ways to engage Ca-         that even more families will expe-
dent mortgage companies, is working to          lowing our customers to donate to Habitat    mortgage com-       nadians in the fight for decent, af-    rience the benefits of owning a de-
change that via a unique partnership with       through their mortgage payments, we are      panies, spanning    fordable housing,” says Stewart         cent and affordable home which
Habitat for Humanity Canada that taps in-       providing them with a simple and effecti-    from Vancouver      Hardacre, President and COO of          include improved health and a
to the mindset of today’s “Generation G”        ve way to support Habitat.”                  to Halifax          Habitat for Humanity Canada. ”By        stronger connection to the com-
consumer. The “G” stands for “generosity”                                                    ■■ HFH Canada is    allowing Canadians to add on any        munity.
as more and more Canadians are looking          Donating advice and time                     a national, non-    donation amount to their mortga-           By making it so easy for home-
for ways to make a positive difference in       People traditionally look to mortgage        profit organi-      ge payments, Key to Hope allows         buyers to participate in the pro-
the lives of others.                            brokers for advice and to help them un-      zation promot-      homeowners to share the joy of          gram, this goal should easily beco-
  The Key to Hope Program provides ho-          derstand their choices in order to make      ing affordable      homeownership with fellow Ca-           me a reality.
mebuyers with an easy and convenient            the best decisions when it comes to ho-      homeownership       nadians in need.”
way to help build a home for a family in        meownership. The option to participa-        as a way to break
need. The first of its kind, this program al-   te in this program is yet another service    the cycle of        A decade of aid
lows borrowers to simply add a specified        mortgage brokers can offer to consume-       poverty.            MCAP has been a partner of Ha-                                 Marjo johne
donation amount to each mortgage pay-           rs, one that benefits the larger commu-                          bitat for Humanity Canada since             
                                                                 A speciAl Advertising feAture by MediA plAnet                                                      septeMber 2010 · 9

                                                                                                                                                                               HOusIng HOpe
                                                                                                                                                                               The nguyens are just one
                                                                                                                                                                               of the 1800 families HFH
                                                                                                                                                                               has helped since 1985.
                                                                                                                                                                               Photo: habitat for humanity

Question: Thinking about taking the plunge and buying, but                                                                                                          City dwelling
                                                                                                                                                                    gaining popularity
wary of impeing mortgage responsibilities?                                                                                                                          The debate between downtown

Answer: If you’re looking for a long-term living situation, buy-                                                                                                    dwelling and the suburban lifest-
                                                                                                                                                                    yle is a polarizing issue, and a To-

ing may be best.                                                                                                                                                    ronto real estate broker says she
                                                                                                                                                                    is seeing commuting woes dissu-
                                                                                                                                                                    ading potential homebuyers from
                                                                                                                                                                    purchasing in low density areas.

renting or owning:
                                                                                                                                                                       Deirdre Kutasi, who works at
                                                                                                                                                                    Coldwell Banker Terrequity Real-
                                                                                                                                                                    ty, says 98 percent of her business
                                                                                                                                                                    comes from people seeking down-
                                                                                                                                                                    town homes. Even though the ci-
                                                                                                                                                                    ty is more expensive, she says she

which is best?
                                                                                                                                                                    is seeing more people opting for
                                                                                                                                                                    gritty downtown than spacious li-
                                                                                                                                                                    ving in Toronto’s outer areas.

                                                                                                                                                                    Big homes, big lots, big
                                                                                                                                                                    The appeal of suburban lifestyle
To those in the housing mar-             gage and the property usually ap-       achieved by owning over a long pe-       the homeowner pays for that. They         is obvious–large homes on large
ket unable to decide between             preciates over time,” she explains.     riod of time. For those not expecting    also have to pay property taxes or        lots, plenty of parking and priva-
buying or renting, a Toronto             “When you rent, you’re paying so-       to stay in one place longer than a few   condo fees,” she says. “Renters           cy from the neighbours.Many pe-
real estate broker has some              meone else’s mortgage.”                 years, Duong says renting likely ma-     pay first and last month’s rent up        ople who work and run busines-
firm advice: Buy the home.                 Duong says choosing to purcha-        kes more financial sense.                front, maybe a security deposit or        ses from home prefer the space
                                         se a home should depend on seve-          One of the worst mistakes buy-         a maintenance fee and then rent           suburban living affords them,Ku-
In reality the decision to rent or buy   ral factors, of which the market        ers can make is to be ill-equipped       every month. And if something             tasi explains.
is not so simple, admits Joanna Du-      isn’t of paramount importance.          to handle unexpected but inevita-        breaks, they can call the landlord.”         But with that space comes dis-
ong, who works at Coldwell Ban-            “The market changes. Your per-        ble costs. In addition to the down-        Dollar for dollar, homeowners’          tance and the task of driving
ker Terrequity Realty. It has been       sonal situation matters more,”          payment–usually a minimum fi-            costs outweigh those of renters–          which deters many from purcha-
shown that people who invest in ho-      she says. “You need to ask yourself     ve percent–and moving costs, the         initially, annually and over time.        sing homes outside the down-
me ownership over long periods of        whether you are financially prepa-      buyer has at least two months of           “But all that goes towards              town core.
time accumulate more wealth than         red and psychologically, whether        mortgage payments saved in or-           equity. It’s security and it’s an            “The main reason people don’t
those who rent over the same time.       you’re ready for the commitment.”       der to be what Duong considers “fi-      investment.”                              want to live in the suburbs is the
   “When you purchase a ho-                                                      nancially prepared.”                                                               commute,” Kutasi says. Now with
me, this is something that is go-        Benefits of buying best when              “Homeowners pay for all main-                                                    current construction projects,she
ing towards savings. You make a          owning over time                        tenance, all electrical, utilities out                        jessica huMe         says the drive is even worse. But
down payment, you pay the mort-          The benefits of home ownership are      of pocket. All renovations, a leak;             the cost of suburban living for
                                                                                                                                                                    those who work downtown goes
                                                                                                                                                                    beyond time spent commuting,

Design your dream
                                                                                                                                                                    she says. Vehicle payments, insu-
                                                                                                                                                                    rance and gas costs add up.
                                                                                                                                                                       “People understand that living
                                                                                                                                                                    downtown you save that hour

home on the cheap
                                                                                                                                                                       Besides, what city folk lose in
                                                                                                                                                                    space they make up for in cultu-
                                                                                                                                                                    re, restaurants and variety, Kutasi
                                                                                                                                                                       “There’s more to do downtown–
Canadians have a high pro-               For those wanting to redesign on a      of more space, if placed well.           size matters, but neither lar-            more arts, more culture. Neigh-
pensity for living in homes              budget, three things to remember                                                 ge nor small is better                    bourhoods are closer and you ac-
they don’t love as much as               are paint, art and fabric.              Think beyond the big box                 Dispelling any delusions that de-         tually get to know your neigh-
they could, a Toronto interior             Painting–from one wall to all         store                                    signing for small spaces is more          bour.”
designer says.                           walls and even floors–can change        Changing small appliances such           difficult than large, Schnitter ex-          Because downtown property
Even if ideas for change are enter-      the feel of any space with as dra-      as lights and lamps can be done ea-      plains that less spaces can result        is limited, the investments gene-
tained, following through with the       matic or subtle an effect as desired.   sily and cheaply by staying on top       in better design: having a limited        rally have greater returns as the
project can seem an overwhelming         Further savings can be achieved by      of auctions, flea markets, street sa-    area “forces you to think more spe-       resale values increase, along with
and sometimes expensive endea-           doing the labour oneself.               les and online opportunities. That       cifically.”                               demand.That said,the land trans-
vour says Jeff Schnitter, partner at       Art work can contribute a sense       said, Schnitter advises to hold off on     Perhaps mostly importantly,             fer tax, imposed in 2007 by Mayor
Seven Haus Designs.                      of authenticity and style. Depen-       the purchasing of smaller items for      Schnitter urges that we stray from        David Miller, means city dwellers
  “People will live in a place for fi-   ding on size, colour and mood, stra-    a room until the main components         our design-comfort zones.                 pay a fee of one- to two-percent of
ve, 10 years and they’re never hap-      tegically placed art can enrich the     of the redesign are completed. Pro-        “People can fall into patterns          the purchasing price on top of all
py with it,” Schnitter says, explain-    space or be a focal point.              blems, he says, can arise when inspi-    and it can be difficult to break out      other closing costs.
ing that regardless of the space be-       Rather than buying new furni-         ration for redecoration comes from       of them,” he says, adding that ex-           Like many others choosing to
ing considered for redesign, some        ture, existing items can be updated     one object.                              posing oneself to a multitude of          live inner city, Kutasi moved from
basic questions need to be answe-        or completely made over simply.            Rather than using specific and po-    styles and options can be a good          Mississauga to her High Park area
red first. “We’re figuring out how       Replacing new fabric on couches         tentially arcane items–art works, a      way of breaking from tradition.           home recently and says the mobi-
to best use a space, so you need to      and chairs with new upholstery          piece of furniture or clothing–as the    “Trust me, it’s a lot more fun if         lity the location offered was key.
know what that space is, what you        can save money and create a diffe-      inspiration for the look of the room,    you go beyond what you originally            “I live a five-minute walk from
want to do there, what you like. You     rent aesthetic.                         Schnitter suggests taking a broader      thought was possible.”                    the subway. In the suburbs you
need to understand the opportuni-          In addition to reupholstering,        approach and developing a big pic-                                                 have to drive everywhere.”
ties in any given space as well as       painting old furniture or removing      ture vision for the space.
the challenges it presents.”             paint can bring pieces back to life.       “First figure out what you’re going
                                           Mirrors can open up a room, pro-      to do with the space, then arrange                               jessica huMe                             jessica huMe

Designing on a budget                    viding more light and the illusion      the room.Add the details in layers.”              
10 · septeMber 2010                                        A speciAl Advertising feAture by MediA plAnet


                                                                                              YOu DOn’T
                                                                                            neeD TO Be In
                                                                                             pOOR FInAn-                       eVent aLeRt
                                                                                            CIAL sTAnDIng
                                                                                               TO seeK
                                                                                                                              tweens achieve
                                                                                                                              “celebrity status” by
                                                                                                                              giving back
Mortgage brokers dish out
                                                                                                                              Celebrities make headli-              ■■Holding a door open for so-
                                                                                                                              nes daily for their philan-           meone
                                                                                                                              thropic work urging oth-              ■■Recycling
                                                                                                                              ers to get involved and do            ■■Baking cookies and bringing
Banks often come to mind                 counted for only 33 percent of real      has more than 1,700 mortgage pro-           their part. The tween gene-           them to a local firehall or police
right away when people think             estate financing in Canada.              fessionals across Canada, also have         ration is a segment that is           station
about mortgages.                                                                  proprietary low interest rate product       easily inspired by famous
But these days, a growing number of      what are the benefits of                 lines negotiated exclusively with           people. Tween role models             A chance to win, a way to
Canadians are looking beyond them        using a mortgage broker?                 the various lending institutions.           such as Justin Bieber and             help
and turning to mortgage brokers for      Respondents to the latest CMHC                                                       Miley Cyrus are no excep-             Another way is to enter a contest
help in financing their home or refi-    survey said mortgage brokers saved       Debunking misconceptions                    tion when it comes to hel-            that helps make a difference. For
nancing an existing mortgage.            them time and helped them get the        But despite the growing popularity of       ping their communities and            example, from October 4th to No-
   “What a mortgage broker does es-      best deal on their mortgage. About       mortgage brokers, a few misconcep-          giving back. Although busy            vember 12th, Genworth Financial
sentially is shop the market for the     80 percent of respondents also said      tions persist, Rawson says. One falla-      with their careers, these             Canada and Habitat for Humani-
best rates on behalf of their client,”   the broker they dealt with took the      cy is the belief that mortgage brokers      young stars still make time           ty are offering students in grade
explains Jim Rawson, regional ma-        time to fully understand their finan-    deal only with people who have low          to volunteer and support              four, five and six the opportuni-
nager for Invis, a mortgage broker-      cial situation and mortgage needs.       incomes or tarnished credit histories.      charities.                            ty to share their thoughts about
age with more than 800 consultants         “The broker is really working for         Then there are the people who                                                  “what they love most about their
across Canada. “We’re just like an       your benefit,” Rawson explains.          think using a mortgage broker will re-      Tweens–children aged 9-12–are         home”. By entering the Meaning
insurance broker, except we deal in      “And unlike the person at the bank       sult in additional fees. In fact, Rawson    often unaware of the opportuni-       of Home Contest, students ha-
mortgages.”                              who may also deal with other pro-        says, banks and other lending institu-      ties available to them and how        ve the chance to help funds go
   From being fringe players in past     ducts such as RRSPs and GICs, the        tions pay mortgage brokers a finder’s       easy it is to volunteer and get in-   towards the building of a home
decades, mortgage brokers today          mortgage broker is really a specialist   fee for sending business their way.         volved in charitable work. Pa-        for someone deserving in their
have established themselves as im-       in only one field–we live and breathe       “You as a consumer don’t need to         rents can help their kids get in-     community. They will also en-
portant resource for real estate con-    mortgages, it’s what we do all day       pay your mortgage broker a fee,” he         volved by finding them initiati-      joy ‘celebrity status’ by hosting a
sumers. Close to 40 percent of all       long.”                                   says.                                       ves that they can participate in. A   pizza party for their entire school.
home purchases and refinanced              Rawson is quick to point out that         For homebuyers who aren’t sure           good start for tweens could be vo-    Encourage your kids to enter the
mortgages in the past year were do-      mortgage brokers work with banks         whether to deal with a bank or mort-        lunteering at a local community       contest by logging on to www.
ne through a mortgage broker, ac-        as partners. But whereas banks sell      gage broker,Rawson offers this advice:      centre or food bank, taking part and having
cording to survey results released       only their own products, mortga-         have a talk with both parties.              in a park clean up or playing with    them write about what they love
this year by the Canada Mortgage         ge brokers have access to the vari-         “Sit down with both and ask them         pets at a local animal shelter.Oth-   most about their home.
and Housing Corporation, a govern-       ous institutions that lend money         the questions you need answered,” he        er ideas include:                       Volunteering is a great way for
ment-owned agency that provides          for mortgages, including banks, cre-     says.“It’s an important decision so you                                           kids to learn that helping others
mortgage loan insurance, mortga-         dit unions,trust companies,pension       need to take the time to make sure you      ■■Helping to cook or serve a meal     can make you feel like a star.
ge-backed securities, housing po-        funds, insurance companies, finan-       have all the facts.”                        at a homeless shelter
licy and programs, and housing re-       ce companies and even individual                                                     ■■Adopting a senior citizen
search.                                  lenders.                                                                             “grandfriend” and writing him or
                                                                                                                                                                                        LinDa BeLanGer
   By comparison, the CMHC’s 2006          Some mortgage brokers, such as                                  Marjo johne        her letters and visiting
                                                                                                                                                                       community leader, genworth financial
survey found mortgage brokers ac-        Dominion Lending Centres, which                
                                           A speciAl Advertising feAture by MediA plAnet                                              septeMber 2010 · 11

paneL oF eXperts
                                 scott Bergen                                 Marcia Moffat                                        Jim Murphy, AMp
                                 Director of Marketing and                    Vice President                                       ceO and President,
                                 Product Development                          home equity Financing, RBc                           caaMP
                                 Manulife Bank of canada

Question 1:                      There are certain cases where a              When applying for a mortgage to                   Yes, there are mortgages designed
                                 homeowner with limited income can            purchase a home or refinance a current            for borrowers like the self employed and
Can one qualify for a mortgage   qualify for a mortgage. For example,         home, there is generally a requirement            new Canadians. However lenders do
if they are unable to confirm     small business owners often reinvest         for the lender to confirm annual income           not want to take on unreasonable risks
their income?                    much of their income back into their bu-     to ensure the mortgage is affordable. Ho-         so they look to factors other than in-
                                 siness and may have little income to dec-    wever, programs that have been develo-            come confirmation as evidence of the
                                 lare at tax-time. However,if the business    ped to assist homebuyers who may not              borrower’s capacity to make payments.
                                 is established and the client has a good     be able to meet these qualifications or do        For example, they may require evidence
                                 credit rating, they could qualify.           not have the ability to provide income            that the borrower has a good credit sco-
                                 Another example is retirees who have         confirmation. For example, homebuy-               re and can manage credit well, or requi-
                                 significant assets but limited income.       ers that are new to Canada and may not            re evidence that the borrower has signi-
                                 Again, with a good credit history, they      have history here may qualify, as well            ficant net worth. Lenders also typically
                                 could qualify for a mortgage.                as the newly self-employed, and home              require a larger down payment.
                                                                              buyers who have put a significant down
                                                                              payment toward their purcahse or
                                                                              equity in their homes.

Question 2:                      This can help because borrowers are          Most people think of a mortgage pay-              The key to saving money is to switch
                                 making a couple of extra payments each       ment as a monthly payment – however if            to accelerated bi-weekly payments. If
Does paying a mortgage           year. An even more effective strategy is     you take that monthly payment and split           a person had a monthly mortgage pay-
bi-weekly really save money or   to take full advantage of prepayment pri-    it into a bi-weekly accelerated payment,          ment of $1000 they make payments of
reduce amortization?             vileges, which most types of mortgages       you will be paying your mortgage off fas-         $12,000 over a year. If they switched to
                                 allow. Some people hesitate to make ex-      ter – the equivalent of 12 months in 24 pay-      non- accelerated bi-weekly they would
                                 tra payments because they don’t want to      ments, giving you the opportunity to pay          pay $461.54 every two weeks or $12,000.
                                 lose access to that money in case their      off your principal faster. For example, if        However if they switch to accelerated bi-
                                 needs change. However more flexible          you have a $100, 000 mortgage. And your           weekly,they pay $500 every two weeks or
                                 mortgages, such as Manulife One, allow       interest rate is five percent, your mortga-       26 payments per year or a total $13,000
                                 clients to re-borrow that money if their     ge payment would be $581.61. Changing to          over a year. It is the increased total year-
                                 needs change in the future.                  a bi-weekly accelerated payement equates          ly payment that reduces amortization.
                                                                              to $290.81 every two weeks and saves you
                                                                              over $12,500 in interest costs during the
                                                                              life of your mortgage, cutting down your
                                                                              amortization period from 25 years to just
                                                                              over 21 years.

Question 3:                      The primary differnence between              With a fixed rate mortgage,your interest          Fixed interest mortgages have the
                                 fixed-rate and variable-rate mortgages       rate and payment will not increase during         rate set at the beginning of the term. So a
Fixed vs. variable, what’s the   is whether or not the rate is locked in.     the term you have selected.But remember,          five year mortgage may have the rate set
di erence?                       With fixed rate mortgages, clients ty-       you won’t be able to take advantage of any        at 3.99% and it remains constant over the
                                 pically pay a slightly higher rate in ex-    decline in rates that may occur until the         five years. Variable rate mortgages have
                                 change for payment stability. With vari-     end of your fixed rate term.                      rates that can change up or down over
                                 able rate mortgages, clients typically pay   A variable rate mortgage fluctuates with          time because the rate is tied to a bench-
                                 a slightly lower initial rate but the in-    the prime rate.The advantage of a variab-         mark rate that can fluctuate. Many vari-
                                 terest rate and required payments may        le rate is that it is usually one of the lowest   able rate mortgages allow the borrower
                                 fluctuate up or down.                        mortgage rates offered–meaning you may            to convert to fixed rate if they fear rates
                                 A third option is an “all-in-one” account    save money now. Keep in mind that if pri-         are about to rise.
                                 that allows clients to combine fixed and     me rate rises,your mortgage payment may
                                 variable rates and offers some flexibili-    not change, but your interest rate will rise,
                                 ty for clients to adjust their payments as   possibly increase your interest costs over
                                 their needs change.                          the life of your mortgage and lengthen the
                                                                              amortization of your mortgage.

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