Newsletter June 2021

Happy Canada Day!!!

We wish you good health, financial success and we will always do our best to help you.

1. STRESS TEST has changed starting June for all mortgages.
What about Prime Rate? When can we expect a change?

2. What financial decisions can we assist you with?

1. How to achieve a reliable 6% – 10% return on your investments? Is this possible?
2. All MORTGAGE related questions you may likely have.
3. Insurance – various options and plans, including home and auto insurance. Full list below.
4. Approaching retirement age, strategies on how to prepare for your retirement.
   How not to lose your pension contributions and increase it?
5. RRSP, TFSA, RESP, investments. Check below on who we work with.

Look through the headings, chose what is of most interest to you and read that section in more details.

1. STRESS TEST has changed starting June for all mortgages.

What about Prime Rate? When can we expect a change?
As expected, Stress Test has increased to 5.25%, this unfortunately includes insured mortgages (when the down payment is below 20% of the property value).
I would like to remind you that our office works with various financial institutions (Lender A, B, credit unions, private lending), and we are able to offer mortgages in different situations. For example, there is an option to not go through stress test at all, which allows for receiving a larger amount of mortgage loan with a reasonable interest.
Today the interest on mortgages obtained through Lender B, where there is no income verification through CRA, and only gross income as self-employed or business owner is considered, has decreased so much that it is almost same as the usual bank Lender A category.
Call us, we are always available to assist.
Regarding Prime Rate:
In the article “BoC to Break Sequence of Lower Rates” published in “Financial Post” on June 22nd, 2021 it states that, The Central Bank of Canada may begin increasing overnight lending rates starting second half of year 2022. Federal Reserve Fund of America was planning to begin increasing rates in year 2023. We will see what happens, there is still a lot of time.

2. What financial decisions can we assist you with?

We are really capable to assist in many ways and are always ready to help. Sometimes people are not aware that our office works with many different segments. Please take a look at what services we can be of help to you:

1. How to achieve a reliable 6% – 10% return on your investments? Is this possible?

With the recent inability to travel, many people have seen an increase in their savings.
Additionally, due to increase in Real Estate values, many have larger net worth but they are not able to use the available wealth. I am talking about equity in your property and how it does not bring any dividends to you, the owner of the property.
Many also have available credit lines with property as collateral that are not being utilized, but can actually work for you…
We can assist with that.
I mean in a form of investing in private mortgages that are processed through two lawyers.
Property that is used as collateral to obtain a mortgage gets registered as a Lien against it, meaning the owner cannot sell of refinance the home without paying out the owed amount first. Your investments can be in a form of a first mortgage with 6%-7% or a second mortgage with 9%-10%.
Most importantly, our office is always responsible that you never have a problem with the monthly payments and the return of your principal.
All expenses associated with borrowing such loan are the responsibility of the party that borrows the funds.
In regards to available line-of-credit, the interest is approximately 3%, and the return on private loan is around 9%, difference of 6% on a large amount can be a very significant supplement for a household.
In life, there are often situations when somebody requires financial assistance for a short period of time. If that person has a property and equity in the property, it is possible to take the necessary amount for a short period of time with a reasonable interest rate. We are very likely able to help.

2. All MORTGAGE related questions you may likely have.

If you require a mortgage – purchase, refinancing or simply renewing, we will assist in processing the loan in various situations. We work with major and smaller banks, credit unions, Lender A and B. We offer really good interest rates on the mortgages for each specific situations.
Are you planning to buy your first property and you do not have enough funds for the down payment?
Talk to me and I will most likely find an option on how to get through this situation and help you buy property sooner.
Debt consolidation – refinancing property, why not if it is beneficial? Very often we have to stop paying the banks high interest rates on borrowings on credit cards and lines-of-credit. It is possible to consolidate all the loans under one lower interest rate. We can help you calculate the benefits of such transaction.
Are you looking for a combination of line-of-credit and a mortgage?
We will help process the HELOC program and the line-of-credit can serve as the reserve fund.
If you are nearing the end of term on your mortgage, we can offer better conditions than the bank. New bank will take on expenses of lawyer and appraisal. Pay attention to why contacting our office in advance can help you save money over the next few years – Manage Your Mortgage | totrov.com Those that register on our website, also enter a draw to win one of five prizes every 3 months.

3. Insurance – various options and plans, including home and auto insurance.

Insuring life in Canada is an undeniable important part of our lives. – All financial institutions offer insurance on issuing mortgages, lines-of-credits and credit cards, even at work you are offered to buy additional insurance. We can offer options that are much better with better premiums. The amount of premiums is not a problem – there are coverages starting at just a few dollars a month. Most important, as an expert with 24 years of experience, I can appropriately choose the coverage that best suits your needs and capabilities. You can check the premiums on various insurance programs using our calculator Insurance Price Calculator | totrov.com.
Unique insurance program for serious illnesses, that also allows accumulation of savings for retirement. If a person does not use the coverage, then after a certain period of time that person will be able to receive back all the premiums paid.
Medical Insurance for visitors and new immigrants, as well as insurance required for obtaining “Super Visa”. Insure your visitors prior to their arrival and they will be insured during the flight. If you decide to, existing health conditions can also be included in coverage.
If you do not have benefits at work than travel insurance is a necessity. And I hope we can travel soon.
The insurance premium is only $41.01 per week for a family of 5, where both parents are under the age of 54, which will cover any medical expenses for the whole family for the duration of the trip. If you are aware of how the coverage works and you are under 60 years of age, you can process the coverage yourself on our website: Travel Insurance | totrov.com.
If you are self-employed or own your own business, it is reasonable to consider coverage that is similar to the one offered to “full time” employees. Just imagine what would happen if a self-employed individual sustains even a minor injury and is unable to return to work for some time. Disability insurance reimburses income, if you are unable to return to work for medical reasons and your “net income” is not important, there are coverages that do not require income verification.
We have an agreement to service our clients with questions regarding insuring auto, home and belongings with Michael Totrov, insurance broker, in possession of proper licenses. He works with a large brokerage Sound Insurance, in the market since year 1940. Larger number of contracts at the brokerage means there is a higher chance that Michael would be able to find reasonable premium for your situation. His e-mail miket@soundinsurance.ca
Phone: Bus. 416-987-7230, Cell. 416-302-3306, hours of operation 1 p.m. to 9 p.m. (M-F)

4. Approaching retirement age, strategies on how to prepare for your retirement.

How to receive full pension with all supplements in the first few years after leaving work at the age 65, if the government has refused it referencing previous year’s income.
How to increase your income in retirement, if you own a property?
We have to be appreciative of the fact the real estate prices in Canada are increasing, rapid or slow, but it is growing. Let’s view increase in value of property as our pension reserve fund.
Ideal scenario for retirement age is also explained on our website Reverse Mortgage | totrov.com.
There are many myth and rumors regarding Reverse Mortgage. At the above mentioned link you can find comparison of two financial products: Reverse Mortgage and collateral line-of-credit Home Equity Line of Credit. Which one is better in what situation can be review in detail on our website.

5. RRSP, TFSA, RESP, investments. Check below on who we work with.

I can break down on how beneficial RRSP program would be for you, will this plan get in the way of obtaining social assistance at retirement age and in general, what can you expect when you decide to retire? Of course, we can open RRSP accounts in a variety of financial situations.
Government of Canada assists families that think about the future education of their children.
On your, even small contributions, the government can add up to 40% of your contribution (depending on the contribution amount and household income). There is a company that will, in addition to government grant, add 15% bonus on your contribution depending on the age of the child.
On our website at www.TotrovRESP.com you can compare all the existing RESP options.
Many people are under the impression that there is only one such program out there – no, there are many and they are all different. As I hold multiple licenses, I can offer various options of educational programs. I prefer a plan that has no requirements on continuing education, that has no specification on the what profession the child choses and when the child decides to go begin, as long as the child has studied at least 3 months before 35 years of opening the plan.
Investments, large amounts and smaller, for long term (TFSA, RRSP, LIRA – this is a plan upon leaving your job) or not. We can assist you in this segment.

We are waiting for your call and to see you in person.
Our office is open from 9 a.m. to 9 p.m. and on Saturdays by appointments.

Serguei Totrov
Financial Advisor, CFP, CLU, EPC
Mortgage Broker, AMP
416-222-0533
www.totrov.com

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