When my mortgage was last up for renewal, my credit score was in the low 600s and I had $43K in consumer debt and owed $20K to the CRA. I decided to stick to my existing lender since I figured nobody would give me a good rate. My rate was 4.1% for a 3 year term. This is horrible considering the Prime Rate was the lowest it had been in years.
Fast forward three years and a credit score in the high 700s (Equifax) and low 800s (TransUnion). My credit report doesn’t even reflect that I’m debt free yet but that didn’t matter. I was ready to find a new lender to renew my mortgage with and give the double finger to my existing one.
The first step was to gather all my documents which consisted of:
● Two years of Notice of Assessments
● Property Assessment & proof that Property Taxes are up to date
● Condo docs (Bylaws and two years of Meeting Minutes)
● Recent pay stubs
● Letter of Employment
I met with my mortgage broker who is wonderful and handed off the documents. Our family has dealt with her mom and her for years.. I told her I was looking for a 3 or 4 year term. She said she would, of course, look for the best rate for me.
In the meantime, I received my mortgage renewal notice from my existing lender and laughed my ass off! The rates were atrocious:
6 month open: 7.00%
1 year closed: 5.99%
3 year closed: 4.99%
5 year closed: 3.74%
I also noticed my TransUnion credit score went down 15 points. I get weekly updates through my Capital One credit card. I didn’t panic since I knew she’d be taking a hard credit check as opposed to a soft one.
Within one week, my broker contacted me and said she secured a 4 year term at 2.99%. Yay! I met with her the following day to sign my mortgage commitment which basically states the conditions of the mortgage and that they’d pay out my existing lender. I also had to gather a few more documents for her, one of which I had to pay $199 for. Grr. She also got me to sign a document that I was aware that she will make about $1500 from the lender for going through her. Of course, that was fine with me.
My mortgage payment will be dropping to $880.75 per month which frees up more than $100 per month for saving. I highly recommend using a mortgage broker when buying a house or renewing your mortgage. Don’t blindly agree to what your existing lender offers you unless you have no choice. Mortgage brokers will get the best rate for you and take the stress off of buying a house or renewing a mortgage.
I moved out of my parents’ home when I was 25 into The Ex’s home that was technically owned by his mother. From what I understood, she lived upstairs and he lived downstairs. He had owned the house at one time before tragic circumstances occurred. His mom bought the house from The Ex afterwards and then spent the proceeds of the sale on material things and trips. That should have been a huge red flag but hindsight is 20/20. Everyone has a story and this is mine.
When things went to shit after his mental breakdown, I found myself packing my stuff into my tiny hatchback and driving 1.5 hours home; home to my parents where I was always welcome with loving arms. Although I knew my parents disapproved of my relationship, they let me live my life. When things went to shit, they were there to pick up the pieces. They were my parents after all. It’s not like I was expecting them to fix me but it was an unspoken pact that we had.
The thing with Asian families is that we don’t show our emotions. I don’t hug my parents regularly (only on their birthdays) and we never say I love you. All of this is implied, just like the fact that I was welcomed back after leaving The Ex. There was no judgment; only love.
The Ex was jealous of this fact. He told me he had told his friends that I had run home to mommy and daddy. Yes, I did. So what? I was a grown ass woman who had been emotionally abused and manipulated. I was raised in a loving home. What else were my parents and I supposed to do? He threw it in my face so many times but I had failed to remember that his own mother had bailed him out of the mortgage he’d be saddled with after his wife was murdered. He refused to hold a full-time job since the tragedy so it’s a good thing his mother saved his house. Why was he taking out his frustrations on me?
I lived in my old room, sleeping on a foam mattress on the floor for about four months before I moved back into my condo that I owned. My tenants had moved out. I lived in my condo for about 3 months before a devastating fire forced me to move back into my parents’ home… again. And there was The Ex yammering away about me running home to mommy and daddy. Let me put it in perspective for you. I live two minutes by car from my parents. I had my dog and my purse when I walked out of the fire. Where else was I supposed to go if not my parents’? I walked to my parents’ home and I’m grateful for that. I put all the insurance cheques from the fire towards my debt. It helped put a dent in my debt.
Do I regret moving back to my parents’ home? No, I don’t. My parents don’t either. They loved having me home just like the old times. I even snuck home a couple times after some late nights out. Haha! I feel no shame in doing moving home and I’m so grateful that my parents welcomed me back.
There’s a negative stigma surrounding boomerang kids. Yes, some of them do take advantage of their parents but many of them, myself included, just wanted to get back on their feet again and our parents were willing to help. If/when I have kids, I plan to do the same for them should they need a helping hand.
I have developed a tight knit group of friends over the past 10 years. I met most of them during my time as a bank teller. We were all the same age and things clicked instantly. Despite our background in the finance industry, it wasn’t until recently that we started talking about money.
My friends knew I was in debt because of The Ex. I started off by telling them how happy I was with getting my pension lump sum payout and knocking down a huge portion of my debt. Friend A said she was in debt too mainly because of home renovations but was working hard to pay it off. Then she told me she’s on track for early retirement at 55! I was shocked. I had no idea that she was on an aggressive track to retire early. I told her that was awesome. I was so proud of her because she also had some difficulties with her ex early in life that left her as a young, single mother. I felt so lucky to have her as my friend.
I had another conversation with Friend B. She works a Monday to Friday full-time job in addition to a part-time job after she’s finished her hours at her full-time job. I seriously don’t know how she does it but she’s been doing it for years. I asked her if she needed the part-time job to get by and she said yes. Cue sad face from me. She also said her mortgage is now less than $170K. My eyes shot open and the sad face transformed into one of joy. She had bought a house maybe 7 years ago on her own that she paid about $420K. So she didn’t need the part-time job just to get by. She wanted it so she could pay off her house early.
I met Friend C through Friend A. She recently completed her MBA and is obsessively paying it off. I can relate to her because the debt can consume you especially if you are inherently debt averse. She hates debt and is also on an accelerated mortgage payoff schedule and will have her house paid off in the next 9 years. She told me she’ll have her school debt paid off in 2 years. We talk about money all the time and keep each other in check when one of us has an itching to spend cash on something frivolous or unnecessary.
Why am I telling you about Friends A, B and C? Well, I wouldn’t have known about their financial situations had I not opened up about my own. They are all doing something that I want for myself. I want an early retirement. I want to pay off the house we will eventually buy in X amount of years. I’m lucky I don’t have to look far for financial role models. Start talking to your friends about money!
Ace interview for health care program I’m interested in. Will tell you more about this if I get into the program. Fingers crossed!
There is one goal that I know I won’t be hitting this month and it’s sticking to my Restaurant budget. There will be a week where restaurants downtown offer 3 course dinners for a decent price so I’ll be checking out a few places.
Ugh is all I have to say. After paying off over $20K of my CRA debt, I thought I’d never owe them again. Wrong! When I switched over to my boss’ private company, the incompetent business manager deducted the wrong amount for federal and provincial taxes for about 10 bi-weekly pay cheques before he noticed. He never gave me a pay stub which my friend pointed out that I am entitled to my pay stub for every pay cheque.
I calculated how much I’d have to contribute to RRSPs to offset the amount owing. Turns out I left out one entire monthly pay cheque from my old position and when I entered my numbers into the tax program, it said I owed $815. Ahh!!!!I know it’s not entirely the business manager’s fault. I should have known never to rely on people for everything but I assumed he’d get it right since it is part of his job. But it’s also my job to be aware of everything that is going on. I’ve double checked my pay cheque for this year’s tax calculations and he is deducting the correct amount from my pay cheques.
I’m not going to file my taxes until this amount owing is paid off. I don’t want it to show up on my notice of assessment because I need to renew my mortgage in the summer. This amount isn’t the biggest in the world but it’s a little discouraging considering I had just paid off the amount owing to the CRA. Oh well, another lesson learned!
Today was payday and I made the last payment on my CRA debt. I owed upwards of over $20,890 one year ago. Why? Because I listened to my money moron boyfriend at the time. He pressured me into opening up a trade name where we could write off expenses as “business expenses”. I knew it was wrong but did it anyway because I felt like I had no choice and I was being manipulated and emotionally abused. You can read more of the backstory here.
Of course, I got audited and put off paying off the debt for years and consequently, interest accrued at 5%. I made interest only payments for years and the balance remained the same. It wasn’t until I got a threatening letter from CRA that my ears perked up. I called my case manager and expected to be berated but she was the most lovely person to deal with. I wish I had called her sooner to deal with my problem head on instead of being an ostrich. I told her my absolute maximum I could contribute per month which at the time was $1300 but I put an average of $1667 per month onto the debt.
I feel somewhat free now. Now I can re-direct money that would have gone to the CRA debt onto my consumer debt.