4 Ways to Take Control of Your Finances in 2021
Trish Pritchard • January 5, 2021
The beginning of a new year is an ideal time to review your finances. Hopefully, with the wild ride of 2020 behind us, 2021 is a time we can all move forward. Regardless of where you’re at financially or your financial goals, here are four areas to consider as you take control of your finances in 2021.
Take control of your spending.
If you really want to get ahead, you’ll want to take control of how you spend your money. You do this by getting clarity around how much money you have to spend (income), what you’re required to spend it on (expenses), and then everything else (discretionary spending).
Track your spending and come up with a budget using a spreadsheet. If that seems daunting, consider one of the many financial programs available online. If you’re looking for a little more direction, there are many independent Fee-Only Financial Planners in Canada who can provide you with personalized financial advice for a small fee. Any steps you take here will be better than not taking any steps at all.
Take control of your debt.
If you have debt, you’ll want a plan to get rid of that debt. Start by making a comprehensive list of all the money you owe, the amounts, interest rates, and payment schedules. The key to taking control of your debt is to know exactly how much debt you have.
Make the minimum payments on all your debts while focusing on zeroing the highest interest rate debt first. Once that has been paid off, don’t let up, roll all your payments into the next debt, and so on, until you’re debt-free. Once you’re debt-free, consider rolling all the payments you’ve been making to pay out your debt into your savings account!
Take control of your credit.
How you manage your existing credit determines the credit you’ll be extended in the future. If your goal is to purchase a property, you’ll want to make sure your credit score reflects a history of payments being made as agreed.
Now, even if you’ve made all your payments on time, your credit report might not reflect that, especially if you’ve deferred any payments due to COVID-19. Estimates show that at least 20% of credit reports contain errors. By regularly reviewing your Equifax and Transunion credit bureaus, you can ensure your credit reports don’t have any errors or contain information that might hinder you from getting credit in the future. It's always a good idea to get out ahead of problems before they become problems.
Take control of your mortgage.
If you’re like most Canadians, paying off your mortgage will be your single biggest expense in life, while at the same time, those payments will help build your greatest asset; home equity. Ensuring your mortgage is working for you (and not the bank) is a crucial part of your financial health.
Take control of your mortgage by working with an independent mortgage professional to review your current mortgage and compare it to what is available on the market. If there is money to be saved, it should be saved. The goal of any mortgage should be to lower the overall cost of borrowing over the life of the mortgage. Annual reviews help you accomplish this.
In fact, with all the economic uncertainty caused by COVID-19, mortgage interest rates are currently very low. Now might be a great time to renegotiate the terms of your mortgage, especially if you haven’t done that within the last year. There is no cost to review your mortgage. I would love to outline all your options!
If you’d like to discuss any of this, please don’t hesitate to contact me anytime.
Why the Property Matters When You’re Qualifying for a Mortgage When qualifying for a mortgage, lenders typically look at four core areas: Income Credit Down payment or equity The property itself Most buyers focus heavily on income, credit, and savings—and for good reason. But even if those boxes are checked, the property can still determine whether a mortgage is approved. Why Lenders Care About the Property From a lender’s perspective, the property is the collateral for the mortgage. In the unlikely event of default, they need to know the home can be sold quickly and at fair market value to recover their funds. Because of this, lenders are careful about the condition, value, and marketability of any property they finance. Homes that are in poor repair, unconventional, or overpriced can raise red flags—even when the borrower is well qualified. Appraisals Are Always Part of the Process Every mortgage requires an appraisal to confirm value. Insured mortgages (through CMHC, Sagen, or Canada Guaranty) often use an automated valuation model completed online. Conventional mortgages typically require a full, on-site appraisal by a certified appraiser. This appraisal is not optional and happens after an offer is accepted—not at the pre-approval stage. Why Pre-Approvals Aren’t a Guarantee A pre-approval is a great first step, but it only assesses you, not the property. Once you’ve made an offer, the lender must approve the specific home you’re buying. Understanding this upfront helps avoid surprises and confusion later in the process. The Risk of Buying Without a Financing Condition In competitive markets, buyers sometimes remove financing conditions to strengthen their offer. However, this comes with risk. If the appraisal comes back low—or the lender is concerned about the property’s condition—you could be denied financing after the offer is firm. In that scenario, your deposit may be at risk. Buying a Home That Needs Work If you’re considering a property that isn’t in perfect condition, there are solutions. A purchase plus improvements program allows you to buy a home and include renovation costs in your mortgage. The process is structured and requires planning, but it can be an excellent way to turn a fixer-upper into a great long-term investment. Final Thoughts Mortgage approval isn’t based solely on your finances—the property matters just as much. Knowing this ahead of time helps you make smarter offers, reduce risk, and plan more effectively. If you’re buying a property that needs work or want clarity on how a lender may view a specific home, feel free to reach out. I’d be happy to walk you through your options and help you plan with confidence.
If the title of this article caught your attention, chances are your family is growing. Congratulations. If you’re thinking now is the right time to move into a home that better fits your growing family—but you’re unsure how parental leave affects your ability to qualify for a mortgage—you’re in the right place. Here’s the good news. Qualifying for a mortgage while on parental leave is possible when it’s done correctly. When you work with an independent mortgage professional, lenders can often qualify you based on your return-to-work income , as long as you can provide documentation confirming you have guaranteed employment waiting for you. A word of caution If you walk into a bank branch and disclose that you’re currently on parental leave, there’s a chance the bank will only allow you to qualify using your parental leave income. That can significantly reduce your borrowing power. Parental leave income is typically limited to 55% of your previous earnings, up to a weekly maximum. Qualifying on that amount alone can restrict your options and impact the type of home you can purchase. Why lender choice matters One of the biggest advantages of working with an independent mortgage professional is choice . You’re not limited to one lender’s rules or products. Some lenders will allow you to qualify using 100% of your confirmed return-to-work income , which can make a meaningful difference in your approval amount and overall options. What you’ll need to qualify Most lenders will require an employment letter that includes: Employer name (preferably on company letterhead) Your job title Original start date (to confirm probation has been completed) Confirmed return-to-work date Guaranteed salary upon return Lenders want reassurance that your income will resume once parental leave ends. You may also be asked to provide income history from the past couple of years, which is standard for most mortgage applications. One important note Whether or not you actually return to work after parental leave is entirely your decision. From a mortgage perspective, qualification is based on having a confirmed position available to you at the time of approval. If you have questions about qualifying for a mortgage while on parental leave—or anything mortgage-related—please connect anytime. I’d be happy to walk you through your options and help you plan with confidence.
Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen: 1. Switch to Accelerated Payments One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget. 2. Increase Your Regular Payments Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance. 3. Make Lump-Sum Payments Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term. 4. Review Your Mortgage Annually It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you. The Bottom Line Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster. If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.
