Enhance eSignature Legitimacy for Home Loan in Canada

How to eSign a document: eSignature legitimacy for Home Loan in Canada

being canadian is awesome except when it comes to writing off the interest that we pay on our mortgages every year there is a legal hack that we can use in order to write off the interest on our mortgages which allows us to pay down our loans faster and build our net worth quickly in this video i sit down with robinson smith and he walks us through the smith maneuver and how we can use it as real estate investors stick around until the end of the video where robinson shares what kind of results his clients are seeing using the smith maneuver hey what's up daryn voros here my mission is to help you reduce your real estate investing education time from months to minutes subscribe not to miss what's coming walk us through the maneuver how it worked and how it benefits canadians from like you say being able to take this product that is not tax deductible and make it a tax-deductible product okay so we'll just dive into it there's a lot to cover if if this is new for someone they're not going to fully understand but hopefully it'll give them the flavor that there is an opportunity to to help them out i'll go i'll go through it relatively quickly basically i like to start off by making it clear what everybody already knows we canadians do not have it easy we got high taxes inadequate pensions we've got high mortgage expense braces and summer camp and tuition for the kids inflation on and on it goes we don't have it easy here in canada and so therefore we have to take action make a change and it can be scary but no one else is going to make that change for us and one of the scariest things here is figuring out what your mortgage really costs you know i know rates are lower these days but a four hundred thousand dollar mortgage for four and a half percent twenty five year m if you're 38 marginal tax rate how much do you have to earn to pay that mortgage back well first off we know we have to pay back that 400 000 secondly we have to pay the interest that that accrues thirdly we have to make these mortgage p i payments with after tax dollars we pay tax before we can make this payment so in this scenario we've gotta earn over one million dollars to pay off that four hundred thousand dollar mortgage terribly expensive over that twenty five years twenty five years yeah so and we canadians typically have two progressing financial goals we want this mortgage gone because it's so bloody expensive but we also want to save for our retirement many of us don't have a choice of which we attack first because if we don't contribute to our pension nobody cares but if we don't pay our mortgage someone's going to come knocking on our door right so by concentrating on making our mortgage payments and not having a whole lot of jig left over at the end of the month we're foregoing 25 30 40 years of compound growth potential because we're necessarily not investing as we're making our mortgage paid out we have to take care of ourselves how can we do that reduce our tax bill eliminate costly expenses as fast as we can such as the mortgage and invest for our future as early on and as often as possible i won't talk too much about debt but there's two types of debt as you and your listeners will be very clear on there's non-deductible debt which destroys wealth and tax deductible debt which creates wealth in order to generate these tax deductions which do great things for our tax bill we must necessarily be buying assets which are going to increase in value over time and again your viewers will understand if you put debt to work for you you're going to have a better outcome than if you avoid debt in its entirety so use your equity in your assets and that includes your house this isn't going to be for everybody some people are of the mindset i was told all my life i need to be mortgage-free by the time you retire and that's their goal that's where they're going to go but we know that if i've got 800 dollars in equity sitting in my house doing nothing for me it's earning no less than zero due to inflation so put it to work your mortgage can be one of your biggest investment opportunities so with the smith maneuver what you're gonna see is you're gonna convert your 100 non-tax deductible mortgage into a 100 tax deductible investment loan each month you're going to generate valuable and increasing tax deductions you're going to be able to eliminate your mortgage in record time and each month you're able to invest money that otherwise you wouldn't have available this is new money and there's no change required you don't have to go and earn more money you don't have to earn cash flow from your investments this is new money that's available to you strictly by restructuring your personal finances it all happens now simultaneously and needs no extra cash you know my parents are in their late 70s uh both of them still working and they were taught to pay off their mortgage free and they did that in their in their mid 40s but you know the thing that they didn't plan for was loss of jobs and different things that happened to them through their life now you know by no means are are they are they suffering in a way that they're they're struggling but every month they're trying to to get by and make make ends meet in in a way you know and uh i think that this is a perfect example of somebody that you could have used something like this years back and changed some strategies and might have ended up in a slightly different position like your parents and maybe yourself a lot of people have been growing up they've grown up with people older and wiser than them saying pay off your mortgage as fast as you can and so it's this inertia so i find that the older a person is the more susceptible they are to being entrenched in this no mortgage mindset the younger people people like you and me you know a lot of younger people say oh okay you're asking me to maintain my debt balance although convert it from bad debt to good debt but you're asking me to maintain debt rather than pay it off yes i am oh okay they've already resigned themselves to the fact that they're going to die with debt right but we've got a solution where we can turn that bad debt into good debt and do lots of good things for them how does it work you're going to continue to make your monthly mortgage payment as you would if you're not doing the smith movement each month with appropriate financing whatever is reduced on principal is able to be reborrowed back via the secured line of credit on a re-advanceable mortgage and so if you don't have one that's what this requires getting into a re-advanceable mortgage and then you're set but whatever goes down on that non-deductible mortgage balance is able to be rebored when that limit on the line of credit increases to get invested so we're talking about home equity line of credit essentially assigned to our principal yeah you know we got to be careful that you know we're not just slapping a heloc in second position beside an existing first because then it's not going to re-advance and when we borrow that out each month we get it invested we do this each and every month and because we're boring to invest we get tax deductions and they're growing on a monthly basis an annual basis and when that tax refund arrives each year you take that money which otherwise you wouldn't have received and you make a prepayment against that mortgage re-borrow and then invest that amount as well so on a monthly basis and once annually base case scenario you're getting invested each and every month and each and every year with that refund so here's a typical mortgage i get a down payment together let's say a hundred grand i go borrow four hundred thousand from the bank and i spend 25 years paying this off this is what the re-advanceable mortgage looks like and a lot of your usb viewers will be uh you know don't understand what this mortgage is but it's that same loan portion amortizing over 25 years or 30 years whatever it is but it's got that line of credit which is attached to it hence this little umbrella here because it's one mortgage with two facilities so the use of the board funds on a monthly basis is critical here we need to borrow to invest so if we look at a mortgage payment of twenty two hundred dollars but out of that twenty two hundred that fourteen seventy goes to interest to the bank but 730 reduces the principal on that four hundred thousand dollar mortgage therefore this line of credit limit opens up by the same 730. i borrow that out and i invest month one month two month three month four on and on we go until the day arrives that i have zero non-deductible mortgage left i've got a 100 tax deductible line of credit against my house and because it's tax deductible i've received those tax refunds so this they and they increase year on year it's a very significant reduction of our tax bill over the amortization period and because i've got these refunds i can prepay once a year that means i'm out of that non-deductible debt faster making less non-deductible interest payments and because i'm investing on a monthly and annual basis with those refunds i'm taking advantage of compound growth now so i mentioned that this requires no new cash from the homeowner once we restructure into that re-advanceable mortgage common misconception and there's tons of misinformation out there so do not look for information on the smith maneuver on the internet right .smithman.net send an email whatever you want to do get the information from the source but when i don't do the smith maneuver i'm making that regular payment with my mortgage payment in this case 22 22.14 a month but when i am doing the smith maneuver i still have that mortgage payment but i got an increasing balance on that line of credit and the interest has to be served there so if no cash is required out of my pocket where is that coming from and the answer lies in the increasing efficiency of the mortgage payment that very first 2214 payment i make the very first one a whole bunch goes to interest and some goes to principal 728 so our very first month i borrow that 728 out and i get it invested the next month that interest rate is being calculated against a lower balance and so out of the same mortgage payment of 2214 a little bit less goes to interest a little bit more goes to principal now i have 730 i can pull out i still only invest 728 and the two dollars that's left in my my smith mover checking account is available to service the interest on the first month's borrowing of 728 and this keeps on occurring so at this point in time month four i'm re-borrowing 736 i'm still only investing 728 and the difference is available to service the interest on the first three months borrowing and this continues so what's it worth we're seeing results uh several hundred thousand dollars three hundred four hundred five hundred thousand dollars just the the plain jane smith maneuver which we just went through there wow did you get all that if you didn't you can watch the full interview that i did with robinson in this video right here and make sure you check back next tuesday for the second part of this interview where robinson goes through the mortgage accelerators and how you can use those if you have questions for me you can leave those in the comment section below you can also follow me on facebook and instagram where i post regularly if you haven't already checked it out my new and improved real estate investing master class is now live on my website at devonboros.com thanks so much for watching and i'll see you next tuesday