“After losing more than 30% of my investment portfolio in 2009, my bank offered no other advice other than to leave my money where it was or transfer it to GIC. Thankfully I was referred to Casey who showed me some other amazing investment options that were not available through my bank, that would give me the potential to make up for my losses while also providing some guarantees.  I’m extremely happy that I listened to Casey’s advice and not my banks, as I’ve now managed to regain all of the money I lost and can now retire the way that I was planning on.  Thank you so much Casey you’ve made a huge difference to my life and I will continue to refer  anyone that I know to you with pleasure!”

 

Becky Cezar-Redublo, Toronto, Ontario


 

“My wife and I have been clients for several years now, and in that time, we’ve conducted numerous transactions with both Casey and Wayne from mortgage refinancing to life insurance to managing our investments. These individuals have demonstrated that they have superior knowledge of their respective products and are able to deliver them with exceptional customer service. I have found that this combination is a rarity these days, and as such, I whole heartedly recommend their service to both friends and family with confidence.”

 

Clifton Sookdeo & Shelly Sharma, Caledon, Ontario


 

“I have nothing but amazing things to say about F1RST CHO1CE Financial Group. Not only are Casey & Wayne extremely helpful and patient, but they’ve always taken the time to explain all my available options and make recommendation that would help me best attain my goals. I would recommend F1RST CHO1CE to anyone looking to plan for their future.”

 

Wilfido Rodriguez, Brampton, Ontario


 

“Honesty, integrity, and professionalism are the three words that come to my mind when I hear Casey’s name. He has provided my clients over the years with the highest level of service and they always thank me for introducing them to him. Casey truly goes above and beyond.”

 

Deborah Robinson, Real Estate Agent – Royal Lepage


 

“Purchasing our first home was a little nerve racking at first, but after speaking with Casey we felt completely at ease as we new we were in good hands.  Unlike our bank who took more than 2 days to call us back, Casey was always available to answer our questions and concerns no matter when we tried to reach him. Casey you made our first home purchasing experience a very pleasant one, and we really appreciated your advice regarding our life insurance options as well.  Thanks for everything…you saved us a lot of time and stress!”

 

John & Allison Botero, Mississauga, Ontario


 

“Working with Casey was an absolute pleasure from the beginning to the end.  Not only did he secure us a much better mortgage rate than the bank we’ve been with for over 15years, but he also helped us create a financial plan to help us to pay off our mortgage faster while creating wealth at the same time.  We’re very excited about working with Casey in the future and look forward to referring him to all of our friends and family.”

 

Peter & Lorraine Verners-Rufh, Oakville, Ontario




 Know Your Options When

Breaking a Mortgage:

 

As a whole most people are not nearly as proactive as they should be in the monitoring and management of their mortgage debt.  By not effectively negotiating or re-evaluating your current mortgage when the market changes you could be wasting thousands of after tax dollars that can never be regained.

Here is what you need to know if you are breaking, or looking at breaking an existing mortgage. If you are paying off a closed mortgage before the contract end most lending institutions are going to charge you the greater penalty amount of three months’ or interest rate differential.

Three Months Interest Penalty – to determine the three month interest penalty your current outstanding mortgage balance is multiplied by your current face interest rate (unless otherwise specified) and divided by 4. This is the equivalent of the interest cost for your mortgage over a three month period without factoring in any principal repayment.

For example: If your mortgage had a balance of $250,000 at 6% and we wanted to find out the three month interest penalty then we would simply multiply $250,000 x 6% = $15,000 and then divide this by four to arrive at $3,750.

Interest Rate Differential Penalty– in this case the bank is trying to recover the lost interest revenue as a result of you paying out your mortgage. This usually means the difference between the interest rate on your mortgage contract compared to the rate at which the lending institution can re-lend the money today based on a comparable term. By comparable term the bank is referring to the rate on the product which most closely matches your period of time outstanding on the initial mortgage agreement. As an example, if you were two years into a five year fixed rate mortgage then they would compare your face rate of interest with the rate of interest they would get today on a three year fixed rate mortgage because there are three years remaining in your existing contract with the bank. The goal is for the bank to subtract the rate of the comparable term from the rate of your current mortgage and then calculate the lost interest to them when the contract is broken.

As above, at a balance of $250,000 at 6% and you have 2 years in your current mortgage agreement left then they would compare this to the current 2 year mortgage rate. If this rate was 4% then the lending institution can charge you – $250,000 X 2 years X 2% (6% – 4%) or $10,000. In this example the bank would use the interest rate differential cost as this amount exceeds the cost of a three month interest penalty. While this amount is significant there are a few ways you can work to avoid or minimize it to some extent.

At a minimum, to save money you should try to find a way to come up with the amount of money that you are allowed to pay off without penalty as part of your pre-payment privileges in your contract. If this was 20% of the original balance then you would save a minimum of 20% off the penalty amount. If you were selling this home and not buying another then this may be one of the only ways to reduce the amount payable. If you were getting another home then you could look into porting the mortgage to the new property, and if increasing the mortgage amount ask to have your old rate blended with the new lower rate. If you are refinancing then the strategy above could be used in combination with the promise of keeping the mortgage with the current lender may be something to consider.

What is most important in the final course of action is the accurate and thorough review of the real cost to you to stay with the current lender, done by yourself or a trusted third party, as compared to the savings of any other mortgage option from the hundreds of mortgage providers in the market. As a point of principal I suggest you leave any lender that was unwilling to make some concession on the penalty cost as they are not showing any commitment to you. In the interest of saving your after tax dollars, the decision to leave that bank, port the current mortgage, blend the current rate with the new, or refinance (there or elsewhere) is a decision that should be based on what saves you the most amount of money. By taking the time to objectively evaluate the availability and cost of all the options you will end up with the outcome that benefits the most important shareholder of all – you!

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