Trevor Hickey, B.A. - Calgary Mortgage Brokers | Mortgage Brokers Calgary | Calgary 2nd Mortgages

Which should you invest in – stocks or mortgages?

I’ll tell you a short story:

John had some extra cash he wanted to invest. 

SCENARIO 1:  John went and invested his money in stocks, which promptly dropped in value.  Frustrated, John went to his stock broker and asked for his money back.  His broker informed him that he was unable to get his money back.

SCENARIO 2: John went and invested his money in a mortgage, which the borrower promptly did not pay.  Frustrated John went to court, sold the house that the mortgage was secured against and got his money back. 

Ideally none of us would lose money but if we do – which scenario would you rather be in?

If you would like to lend money in the form of a mortgage, give me a call. 

Thanks!

Trevor Hickey, B.A.

Mortgage Associate

Concord Mortgage Group Ltd.

#107 – 1905 Centre Street NW

Calgary, Alberta

T2E 2S7

Bus: (403) 290-1990

Cell: (403) 860-8738

Fax: 1-888-587-1426

Email: trevor@concordmortgage.ca

Popularity: 3% [?]

This article is geared towards those with a little extra cash in their pockets.  If you have $25k, $50k, $100k or more – you could do yourself a favour and make some money with your money.  It is quite common to lend money out in the form of mortgages for about 10%.  I have arranged many mortgages for individuals who lend to other individuals for 10% (or more).  Why would anyone pay 10%+?  There are many reasons:

1) Less hassle (dealing with a person who is lending the money directly instead of a bank eliminates a lot of bureaucracy, and policy and rules that normally make it more difficult to borrow money.

2) Faster – quite often, with less hassle and less bureaucracy the clients can get money faster (and the lenders can make money faster). 

So, lets say you have some money that you would like to lend out:

Below is a chart of how much money you can make each year (at an interest rate of 10%) if you have $25k, $50k, $75k, or $100k (at interest only payments).

Principal Needed	Money made in 1 year at 10% (interest only)	Money made in 1 month at 10% (interest only)
$25,000	$2,500	$208.33
$50,000	$5,000	$416.67
$75,000	$7,500	$625.00
$100,000	$10,000	$833.33

 

Could you use an extra $208.33, $416.67, $625.00, or $833.33 every month – I bet it would get you a little closer to stop punching the clock.  If you want to lend out some money – let me know. 

Thanks!

Trevor Hickey, B.A.

Mortgage Associate

Concord Mortgage Group Ltd.

#107 – 1905 Centre Street NW

Calgary, Alberta

T2E 2S7

Bus: (403) 290-1990

Cell: (403) 860-8738

Fax: 1-888-587-1426

Email: trevor@concordmortgage.ca

Popularity: 2% [?]

The Bank of Canada recently declared that they will keep rates stable in the near future. This is good news right?  Well…maybe.  There are always two sides to a coin – the good news is that rates are going to be remaining low for right now.  The bad news is that there is a reason they are staying low.  The below is advice from Calgary Mortgage Brokers.

The theory behind interest rates:

The more it costs to borrow money, the less people will borrow.  This then curves inflation because there are fewer people purchasing items and therefore prices drop to try and encourage others to buy too (and vice-versa).

So, if the economy is picking up (and consequently, so will inflation) then the government will increase interest rates to ensure that people who have low or fixed incomes can still afford to buy things.

And, if the economy is slowing down or is predicted to be slow or remain slow then the government will leave rates low.

So, what does it mean when the government is keeping rates low? It means that they are predicting slow times ahead – So, if you can afford it.  Now is the time to buy because rates are low and so are prices.  But don’t go out and spend money on luxuries that you don’t need (if you have to borrow money to get them), because chances are high that you won’t be making money “hand over fist” in 2011.

Trevor Hickey, B.A.

Mortgage Associate

Concord Mortgage Group Ltd.

#107 – 1905 Centre Street NW

Calgary, Alberta

T2E 2S7

Bus: (403) 290-1990

Cell: (403) 860-8738

Fax: 1-888-587-1426

Email: trevor@concordmortgage.ca

Website: www.mortgagebrokercalgary.info 

Trevor Hickey, B.A.

Mortgage Associate

Concord Mortgage Group Ltd.

#107 – 1905 Centre Street NW

Calgary, Alberta

T2E 2S7

Bus: (403) 290-1990

Cell: (403) 860-8738

Fax: 1-888-587-1426

Email: trevor@concordmortgage.ca

 Website: www.mortgagebrokercalgary.info

Popularity: 5% [?]