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New report Reveals the Biggest Obstacles to Creating Wealth While Paying Down a Mortgage.
In 1965 the average home price was $13,600 and the average income was $6,450.00 which meant the average income to debt ratio was approximately 1:2. Fast forward to today and it is quite common to have families apply for a mortgage 4 to 5 times their annual income. In 1965 income to debt ratios were smaller and income taxes were less, today those ratios are completely different. Two very big factors changed yet everyone seems to be stuck in the same method of paying off their mortgage. If part of a mathematical formula changes the outcome will be different, that’s simple math. Why are Canadians still paying off their mortgage the way their parents did?
The shift in income to debt ratios from the 1960’s to today has had a dramatic impact on Canadians savings rate. In the early 1980’s the average Canadian saved 20% of their annual family income. Today the savings rate is below 4%, yet interest rates are at historic lows. I started to study my own clients to see if I had anyone was still saving 20% of their income, and I found a small group that were. Collectively this small group of mortgage clients were doing several things differently than everyone else. I started to do some research on these clients. All of them independently seemed to follow certain formulas and strategies that allowed them to create more wealth and at a quicker pace. One of the striking details was they weren’t doing biweekly payments. Many of them were investing as much as 20% of their income, most of them had a TDS (total debt servicing) of less than 20% and most of them never owed more than 2.5 to 3 times their annual salary.
I named this small group of mortgagee clients the Super Savers. From this research 3 things emerged, a Free Report titled “Why You Need to Stop doing Biweekly Mortgage Payments”, a free 90 minute class where I show all the strategies that Super Savers are doing, and a mortgage I call the Cash Flow Advantage Mortgage.
Please Join us for an Educational Evening with Industry Leaders and Special Guest Speakers.
In partnership with our network of Certified Financial Planners we are pleased to present a Seminar outlining the benefits of our Equity Mortgage and our Financial Advantage programs on April 8th at the Fort Langley Golf Course and April 10th at the Newlands Golf Course.
Spring Clean your Finances…
Spring Clean your Finances…
Maintaining financial privacy has been an obstacle for many who wish to obtain a mortgage. Lenders generally base their lending decisions on income information, so if that information is not available or withheld, the customer might be overlooked. Many lenders have realized they are missing out on a large consumer base, so they have come up with a special loan that is not based solely on proof of income.