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Only a few months later and we’ve experienced a significant interest rate hike from the Bank of Canada. To compound matters, other lenders have followed their lead and increased their interest rates.

This hike should affect all loans and saving products sold by Canadian banks.

What Led to the Interest Rate Increase?

This was the first interest rate hike in years and the resulting fallout is complex with potentially major implications.

Part of the rate increase is due to a rebound in the economy. As oil prices rebound somewhat since its 2014 plunge and the housing market’s dip seems minimal, there are signs that the Canadian economy has bounced back from its recession.

These measures are also an attempt to curb the debt load of Canadians, to spur savings and to strengthen pensions. These all suffered when interest rates were low and people took advantage by loading up on debt.

Where are Interest Rates Headed?

As we’ve recently learned, these things are tough to predict even for financial experts. Remember, pundits called for rates to stabilize beyond 2018 but a hike hit Canadians in July 2017.

Mortgage rates might continue to climb throughout the rest of the year and into 2018 due to North America’s economic expansion. Desjardins Bank has suggested that the rate could reach 5% by 2019.

It might be best to lock into a fixed rate, if possible.

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What will Other Lenders Do?

This will most likely be a case of follow the leader. In fairness to lenders, they have also lowered rates in conjunction with the Bank of Canada when they were not required to. It would be surprising to see any lender not try to keep pace.

There’s no need to panic. As easily as rates could increase, they could also lower or stabilize. This is an opportunity to look for some value in the housing market or to save for longer or at better rates.

Having a mortgage means having options. As a mortgage approaches its expiration date, homeowners must decide whether they want to refinance their mortgage under new terms or renew under existing ones.

It’s important to know the difference between renewing and refinancing to determine the best course of action for your situation.

What is a mortgage renewal?

Renewing your mortgage is a straightforward process. If you owe money to the lender after your mortgage expires then you can simply opt to renew. Every term you negotiated and agreed to will remain in effect. All you have to do is sign on the dotted line.

What does it mean to refinance your mortgage?

If the idea of revamped mortgage terms appeal to you, then the option of refinancing is most likely a good fit. Refinancing allows you to gauge the different interest rates and amortization options that might be available to you.

Essentially, a refinanced mortgage is a completely different deal than your original mortgage. You don’t have to wait until the length of your mortgage expires. You can refinance at any time.

Refinancing can be appealing

Refinancing is a proven way to take advantage of lower interest rates. Refinancing can also be part of your strategy to pay off other debts, typically ones with higher interest rates like pay off credit cards debt.

A mortgage needs to fit into your finances and it doesn’t have to be a hindrance. One of the reasons a mortgage is fixed to a certain amount of years is to give both lenders and borrowers the flexibility to make it work.

A renewal date is an opportunity

As your renewal date approaches, you should audit your finances to review how they have changed from when you were first approved. If things are drastically different—you now earn more income, you have paid down a significant portion of your debt—than your mortgage should reflect that.

It’s all about securing the mortgage that is right for you. One that will help you maintain your lifestyle and pay off any necessary debts.

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Personal debt can weigh on a person. It can take an emotional toll and affect someone’s relationships, job or their ability to buy a home or a car. Underlying the negative impact of debt is the tanking of your credit rating.

You don’t need good credit to fix your debt problem. While every situation is equipped with its own set of challenges, debt consolidation is a solution that can help many people. It can straighten out finances, reduce monthly costs and can help someone regain control over their life.

Here are some tips for consolidating debt:

Find the root of the problem

Are you living beyond your means? Are you paying off the debt with the lowest interest rate? Do you need to downgrade your home? Most people might be surprised to learn where their debt stems from and that there might be some obvious ways that one could tackle the problem.

It takes an honest approach to understand what is fueling your debt.

Research your different options

With debt consolidation, there’s no one size fits all. You need to understand all your options. Transferring debt or securing a loan are just two of the options. In certain cases, you could even opt for a debt settlement.

Whatever option you chose, the best course of action is to create a debt management plan. This plan can be crafted by a credit counselor or debt expert or it can be an agreement between you and your creditors that outlines the repayment plan in exchange for lower interest rates.

Avoid the usual traps

Without knowledge or a plan, you could thwart your efforts for a debt-free life instead of enabling it.

Two of the more common traps are not prioritizing the debt with the highest interest rate or consolidating debt with low-interest rates with ones with higher interest rates. You don’t want to pay a credit card interest rate for your student loan.

None of this matters if you aren’t working with a true debt professional. Choose the right partner who can help you draft a realistic plan that will get you out of debt with as little disruption to your life as possible.

Whether as an investment or as a new home for your business, buying commercial real estate takes knowledge and a strategic approach to navigate through all the ins and outs of closing these deals.

While bearing some similarities to buying residential real estate, commercial properties carry additional layers and can even require more legal and financial experts. It is an expensive undertaking, one where due diligence plays an extremely important role.  

Location, location, location

The oldest adage in real estate does apply to commercial real estate and not solely because of resale value. In this case, location can determine a business’s foot traffic or tax implications. There could also be by-laws associated with certain areas and environmental issues can be regionalized.

A new set of metrics

Buying a home is engrossing and comes with its own lexicon and metrics in which to measure the worth of a home and all the associated costs. Commercial property not only uses many of the same metrics but it also has additional ones to assess value.

If you intend to buy commercial real estate, you should be comfortable with Net Operating Income (NOI) and cap rate.

A strong, thorough strategy

Part of successfully investing in commercial real estate is implementing a strategy that will minimize risks and surprises. It should reflect market trends and anticipate any potential dips. It should also contain a projection for how the investment could grow or shrink in value based on external factors.

Ask yourself the right questions

Once you’ve decided to pursue the purchase of commercial real estate, you should ask yourself the following before even visiting the first property:

• Do you want to buy or lease the property?
• Is this a business venture you want to pursue alone or as part of a group of investors?
• How much money are you willing to invest upfront?
• Can you commit the time needed to effectively run the property?
• Are you more comfortable working with a property manager or a property management company?

Buying commercial real estate comes with inherent risks but it can be very profitable and rewarding. Do your homework and partner with trusted experts who can guide you through the process.