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Attainable Mortgages For The Self Employed

11/25/2014

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Entrepreneurs are by definition independent.  However, sometimes that independence can become a barrier when trying to achieve certain personal goals, such as becoming a Home Owner.  Anita Lemke with Mortgage Architects recommends 3 simple steps to overcoming those barriers:

1. Know your Credit Score.  People often think that they shouldn’t check their own credit score as it can adversely affect their rating.  However when you check your own score it’s called a “Soft Hit” and does not show up in your credit history.  It’s only when another lender checks your score that you see their inquiries – the more you have the more detrimental it can be for a mortgage application.  (Only give permission for credit checks if you are fully committed to financing your purchase, whatever it may be.)  You can check your personal credit score for free at Equifax Canada.  It ranges from 300-900.  A score above 680 is considered excellent, and a score below 620 is considered challenging.

2. Financial Discipline.  Something as simple as just paying your bills on time can dramatically increase your credit score and begins to build trust with possible lenders.  Being consistent when managing both your personal and business financials, along with filing your income taxes with future buying power in mind; can be worth more than your actual numbers.

3. Documentation.  When applying for a mortgage, make sure to have ALL your documentation ready.  If your record management and bookkeeping are well organized you will have a clear picture of your financials and so will your lender.   If your documentation has gaps in it, this creates confusion and can result in either disqualification or a less than favourable rate.

Knowing upfront the extra requirements a self employed individual will need to obtain a mortgage; can smooth an otherwise daunting process.  A qualified mortgage planner with Mortgage Architects can definitely help and will come highly recommended. 

-They have access to a broad network of lenders.  They will work to pair you with the right type of lender based on your financials with the best possible lending product.  When you go into a bank you only have access to one.
- They do one credit check which is then used to approach only the right lenders.  Going to several banks results in several credit checks.
- They know what documents are required for any type of financial situation and can help make sure your application is complete.
- They know when to submit your approval documents based on the current real estate market activity. 


All this and more, at no cost to you!  Yes that’s right.  FREE!!!  Mortgage Brokers are paid on a commission basis by the lender.  So why not take advantage of all these tools, resources and experience?  If you are self employed and ready to achieve your goals, contact Anita Lemke.  She can certainly help pave the way for your success.

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Group RRSP...Should I?

6/22/2014

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Did you know that if you had saved $5000 a year from the age of 20-25 and put it in an RRSP each year, you wouldn’t have to put another cent towards your retirement and at the age of 65 you would be a millionaire!!!  (Don’t worry we checked the math and it’s true.)  Are you thinking what I’m thinking?  Why the hell didn’t I do that?!!!  Especially before kids, and a mortgage and the rest of life’s financial responsibilities. 

Even if you’re past the age of 25 don’t worry, it’s not too late.  RRSP’s are still a great way to create that proverbial nest egg, and Group RRSP’s are an even easier way to get started.

We all know that saving is a good thing, and there are all kinds of benefits for the individual doing the saving but why would an employer bother to start a Group RRSP? 

Offering a Group RRSP Plan definitely helps attract potential employees.  The benefits of an RRSP are substantial.  Lower taxable income, Investment Control, Portability, Flexible Contributions..ect.  However with the employer’s ability to set timelines for accessibility to these investments it also encourages the employees to stay.  For ex) You can set a minimum of 2 yrs before the Employee can have access to their funds.  This is a GREAT RETENTION STRATEGY. 

Employer Contributions are a DEDUCTIBLE EXPENSE.  Not only that but you can choose what those contributions will be.  You have control over your level of involvement and this can be adjusted at any time.

There is NO INITIAL COST for setting up a Group RRSP.  There is however a small redemption fee that is charged for early redemption; and that fee is the responsibility of the Employee.  For an employer this equals all the benefits without any cost other than the contributions. 

Why not just set up individual RRSP’s for everyone instead of in a group?  If a person brings $500 to the table they will certainly get more attention than 5 individuals bringing $100 to the table.  Bringing a larger sum to the table via a Group RRSP is what results in a lower redemption fee relative to other deferred sales charges.  However the money (while it may be pooled together initially) is always invested according to each individual’s requirements.  Older employees would obviously have different investment strategies than say younger ones.

Are your eyes glazing over?  Does the thought of handling financial decisions like that cause you to break out in a cold sweat?  Are you thinking deep down that yeah it sounds great and all, but I would never be able to explain that to someone else much less try to set it up? ...Drum roll please!

Keith Wilkinson with Investors Group not only understands and remembers all this stuff but he can answer ANY questions you might have about it.  He is your one stop shop for information, set up and management of a Group RRSP.  Check out his website or contact him at keith.wilkinson@investorsgroup.com and he would be more than happy to hear from you.

"It is far better to be informed than opinionated."


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