We were anxious to read some of her mortgage suggestions, of which there are many. Here are a few such examples:
“…Fictitious posted (mortgage) rates can come back to haunt you if you make an early exit from a closed mortgage in order to sell or refinance. Banks often calculate the penalty using the higher rate you didn’t have to pay, rather than the discounted rate you actually did pay.”
“…If you break your mortgage, the penalty you pay will be tax-deductible if you move at least 40 kilometres away to get a job, start a business or study full-time at college or university.”
To minimize penalties: “If the sale of [your] property coincides closely with the anniversary date of the mortgage, consider delaying the closing of the sale until after the anniversary. Then, you can exercise the annual prepayment twice (to reduce your penalty) — once before the anniversary and once immediately after.”
When refinancing, “Ask about ‘blend and extend.’ Can you increase your balance and mortgage term, instead of breaking the mortgage and paying a penalty?”
Roseman also advises how to get around clauses in your mortgage contract. Not surprisingly, virtually all lenders will disagree with this part of the book. Lenders believe they write iron-clad agreements and ignorance of contract terms is generally not a defence.
Roseman is no stranger to offering financial advice. She writes a three-times weekly column in the Toronto Star and has a very popular blog, EllenRoseman.com. She is also the author of seven previous books and teaches investing and personal finance at the University of Toronto and Ryerson University.
Aside from money-saving tips, the book also includes cautionary advice and real-life stories from her faithful readers. The book is pretty inexpensive (especially in eBook format), so the odds are good you’ll find at least one tip out of 81 that will offset the price.
Steve Huebl and Robert McLister, CMT
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