How does this work?

First, we need to access as much of the bank’s money for the lowest required repayment by using the equity currently “sitting around and doing nothing” in your house. In essence we are kicking your house out to get a job!!

The Lifestyle mortgage is custom fit to each individuals needs and goals to achieve the end result (being mortgage-FREE) in the shortest possible time.....without changing your current lifestyle!!

Some of terms we are demanding from the banks are: “best rates” (although this is our goal...banks rates are not crucial to the plan!), payment frequency, Pre-payment options, amortization, etc.

Second, we need to determine if there is any “non productive debt”...generally this includes accounts that have high interest charges, or accounts that have a high monthly payment in comparison to the remaining balance...

In most cases, at this point we have reduced the amount required to be paid monthly and have two options...1) reach our goal of Mortgage FREE sooner OR 2) add in an extra cash flow to your lifestyle to attain some of the goals that are on the back burner!!

The Equity portion is then placed in an asset backed investment....which is safer than your house...especially in today market...where it will produce an average return of 15%. This can be left to compound and grow OR cover any increased costs OR can provide a monthly income to add to your lifestyle!!

As this equity grows at average 15%, and you are paying the low rates provided by your Lifestyle Mortgage, it is only a matter of time for your mortgage to be “PAID IN FULL”

Get Out of the Mortgage Box

Sample Situation

Let’s say you purchased a house for $300,000 five years ago.
You put 5% ($15K) down payment.
This leaves you with a mortgage of $285,000, and the rate was 6%, over 25 yrs amortization
If you chose a bi-weekly payment you would be paying $911.72/bi-weekly
For comparison purposes lets convert to a monthly payment....
$911.72 X 26 payments divided by 12 months = $1,975.39/month

Lifestyle Mortgage

House value 5 years ago was $300,000.
Assuming 4% increase per year would give the house a value of $365,000 today
Current mortgage balance after 5 years is $245,500
If we access $80,000 of the almost $120,000 in equity.....How would that help??
Lifestyle mortgage of $325,500 at 5%* for 35 yrs equals a $1,632.12 per month
That is $343.27/m less than the current payment!!!!

Fast Pay Plan

The Lifestyle plan, using the $80,000..... plus adding the $340 every month....... at return of 15%.....What happens????
The Lifestyle plan grows to $293,700 in 7 years and 9 months, which will be enough to pay out
the mortgage balance of $292,733.00......leaving a few extra dollars in your pocket!!! ($967)

OR

After 20 years .....which is the same time it would take you to pay off the mortgage if you remain with the original plan....you would be Mortgage Free AND your Lifestyle plan grows to......$1,760,527.90

Cash Flow Plan

The Lifestyle plan, using just the $80,000 and using the $340 every month as extra cash flow to increase your lifestyle.........this option could pay out the mortgage in 9 years and 2 months, at which point you owe $285,266.72......leaving a few extra dollars in your pocket!!! ($2,795)

OR

After 20 years .....which is the same time it would take you to pay off the mortgage if you remain with the original plan....you would be Mortgage Free AND your Lifestyle plan would have grown to......$1,309,322.99

* Sample rate only, best rates upon O.A.C.
** Information contained herein is based on certain assumptions and is for illustration purposes only. While care is taken in the preparation of this document, no warranty is made as to the accuracy or applicability in any particular case. There has been no account for the taxation of growth on these assets, please seek independent accounting advice.

LIFESTYLE RRSP - Registered Funds – RSP, RIF, RESP, TFSA

Obviously, the first question is, “What will it cost?” Great question! The fees charged by the current fund holder is beyond our control, but usually is a none factor when you calculate the lack of earnings....OR in many cases the steady losses! As for the costs we can control, it usually costs approx $500 to initially move the funds, with yearly account maintenance of $125. Other costs for moving funds around would apply, but since these investments are steady growth, there is little to no need to move funds!

The Lifestyle RRSP program was designed as a way to bring life to an under-producing investment and is not a product we consistently use and feed into as we believe there are better way to create income and reduce taxes!

What about minimums? With asset backed investments there are qualifications to ensure that you are able to handle the minimum, calculated risks. Actual amounts of $1,000 or greater are able to be moved but this needs to be in conjunction with other funds as well. We deal with amounts of $30,000.00 or greater and typically are working with investments of $100-150K. Outside of these guidelines we would need to assess on a case by case basis.

These Real Estate investments are secure since your investment is backed by an asset with a real value, not an inflated value as we see in most of the regular stock market. Many of these provide more security than your own home, since the method for determining, holding and increasing their value are not as easily influenced as the retail residential market.

Funds can be moved from many different sources, such as savings, other liquid investments, registered funds (RSP, RESP, RIF, TFSA, LIRA). You can place these in investments that meet your personal risk and return needs. You can also choose to receive monthly cash flow or fast pay programs.

STAY TUNED!!