e55 - Assess, Address, & Strategize: Making Sense of BC Assessments & Mortgage Statements

[00:00:01] I want to see like a big clapboard that says, action. You've landed on the Mortgage Life Podcast where we strive to bring you mortgage related info that's easy to understand. We have conversations with market experts to bring you timely updates because there's one certainty in this industry, things change.

[00:00:30] I'm Mindy Baudlin. And I'm Pete Salamose. Welcome to the Mortgage Life Podcast. Welcome to the Mortgage Life Podcast. Yes. Welcome to 2025. Yes. And it's that time of year, which is cold and flu season, which I'm suffering from.

[00:00:59] So Pete will hopefully do most of the talking so you guys don't have to hear me coughing. But also what other time of year is it, Pete? Well, it's my favorite time of year, which is BC Assessment and Mortgage Statement time of year. Yeah. Okay. Maybe I made that up. It's not my favorite time of year. It kind of is because of ski season. That's one of my passions.

[00:01:21] But yeah, it happens to coincide with the time that BC Assessment and your mortgage statement come out. So BC Assessment is, it almost virtually comes out on the 1st of January. So if you actually log on to the website, bcassessment.ca, you will find your BC Assessment right there, right on the very first of the year.

[00:01:46] And we wanted to review these two things because we always get a lot of questions on the assessment and whether it's an appraisal. We also get questions on your mortgage statement. Why do I need it?

[00:01:59] And we thought we'd review this, but I want to take a quick note back that when we started this whole adventure down podcasting in the mortgage life, the very first episode was our BC Assessment episode with Amanda Wilms from BC Assessment. So go back and have a listen to episode one, because it's actually pretty informative and it's not necessarily time bound. It's a lot of stuff is still relevant to today.

[00:02:27] Absolutely. Amanda goes into a lot of detail about what it is that BC Assessment does to obtain those valuations. So definitely interesting. Right. And then the second thing that we want to chat about today is also the mortgage statements. And I was going back in our episode list and I was looking back to see exactly when we did this one. And it happened to be the second episode. So episode two, if you follow along from episode one to episode two, you'll actually find that we discussed the mortgage statements.

[00:02:56] And exactly what you might find on those mortgage statements. Today, what we're going to do is we're going to talk about those two things and just review why they're important and what you really need to do with them this time of year. I will get right into it because I know I don't want to make Mindy cough here. Now she will. Okay, so let's get into it.

[00:03:19] If you go back and listen to Amanda in our episode one talking about BC Assessment, she does go over a lot of really cool stuff like how do they determine values? What exactly are those values used for? And when we had that conversation three and a bit years ago, we had seen property values very steadily increase over many, many years. So we were of the mindset that, gosh, we're in BC, we're never going to see property values go down.

[00:03:46] So we kind of always talked about how this is you're going to probably see it go up. Well, interesting. After that, that episode, we had a very, very rocky next few years. And so we actually did see some property values go down. I think they actually went up, spiked quite a bit, and then they came down. And now they've normalized for the last year or so. It is interesting, though, just as somebody who gets a few property notices, property tax assessment, sorry.

[00:04:16] Even in the same municipality, the different property types will adjust depending on, you know, a condo will change differently than a single detached house differently than a place in one neighborhood over another neighborhood. So, again, it just it shows you that there's more going on behind the scenes with BC assessment. There's a lot of different factors that play into these valuations, even more so than the broader economic conditions. That's right. And those are really interesting points.

[00:04:45] And again, one of the big questions that we have is about that assessment and whether it portrays the proper value of the property. The reality is that the BC assessment, it looks backwards. It goes back and says, hey, what was the general assessed value or the kind of relative value of your property on July 1st of the prior year?

[00:05:09] So the assessments that we would have just received in January of 2025 reference the value of your property on July 1st of 2024. So they are kind of a little bit dated, but the whole point of those assessments is to create an entire role of assessments for a municipality, various areas. And those roles end up forming the basis for the municipal taxes that are charged in that area.

[00:05:38] So this is the kind of main point that I wanted to get across is check your assessment to ensure that you think your value is appropriate, whether it's gone up, whether it's gone down, whether it's stayed level. So that's a good point.

[00:06:02] So that's a good point. So that's a good point. So that's a good point. That's a good point. If you think about that, if you're going to be taking place in the city or not, whether it's gone up, whether it's gone down or not, or not, or not.

[00:06:29] But the assessment has gone up more than the average price of those properties in your area, you'll most likely see a larger increase. if your tax value why do i want to say tax value your assessed value has has gone that's what the tax is based on i know right it's part of the formula if your assessed value has gone down compared to what everything else has done in your municipality then most likely you'll either

[00:06:53] see a lower tax increase or you might even see your taxes decrease so hopefully you're able to wade through that and it is interesting to look at the assess especially when you've just bought a home if you purchase the home for say 500 000 and the tax assessed value is you know 600 you can go to bc assessment and have them do a sort of side assessment of your property you can you can contest

[00:07:23] the valuation and you might say well why would i do that you know now they're saying my house is worth 600 and i only paid five just remember it's not an appraisal it is what bc assessment uses as the taxation value of your home so if you're if your home is valued taxation wise higher than what the market says well bring it back down to the market level because you'll save yourself an you know

[00:07:48] excess amount in property taxes i've actually done that in the past with one of the properties i bought in the interior and sure enough we contested the tax value they brought it down to market value and it saved us a lot of money in property taxes absolutely that's a really good point um and if you go back to that episode with amanda she talks about how they come to the valuations um but part of that valuation process is the feedback from the homeowners so if you don't feel that the valuation

[00:08:17] properly reflects the value of the property you do have a period to dispute it typically that's january 1st to january 31st but um yeah check with them they may they may be able to do something for you in terms of that property value the uh the only other last thing that i want to talk about on bc assessment is if you check out their website bcassessment.ca the the basic information that they

[00:08:43] provide so you just have to enter your address they'll provide you with the property value this year they'll compare it to the value last year and that's kind of it um but you'll see a little spot at the at the top of the screen that says log in click that and create an account it's absolutely free it just gives you access to more information so if you log in you're now going to get five years of

[00:09:11] history and so that just gives you a better uh background as to where the properties come from where it's going gives you a little bit more detail about the municipalities and and what their average valuation is over that period of time as well so you can get a little bit more detail if you do log in good to know yep uh one last thing maybe i already said last thing so this is the

[00:09:34] second this is the pps the very last thing uh if you do scroll down on your bc assessment page right to the bottom you'll actually see three tabs one shows the neighboring properties uh one will also one of those tabs shows you recent sales so if you want to see what properties around your home have sold for in the last little bit you'll be able to click on that and see what those properties are

[00:10:02] selling for compared to their actual assessed value again it's a nice little data point if you're looking to sell or if you're trying to see whether or not your property is actually valued correctly wow it's like free access to mls that's right we don't have free access but this is almost as good yeah almost as good anything else you want to add mindy no i think uh i think we've covered it but i guess the

[00:10:28] big point here is just it's not just a useless piece of paper that you're sent in the mail the bc assessment is full of information and really important to ensure that it is accurate because it does end up translating directly to your pocketbook so that's right and speaking of non-useless pieces of information and papers that you might get at this time of year the second thing you might see at

[00:10:52] this time of year is a letter from your lender and if you get this letter from your lender most likely at this time of year it will be your mortgage statement so that mortgage statement will contain a bunch of information and again if you want to hear our take on the mortgage statement go back to episode two where we talk more thoroughly about exactly what you'll see in that mortgage statement

[00:11:15] but essentially it gives you all the details of what happened in the past year on your mortgage so it'll tell you how much you made in payments it will tell you what your interest rate is it will tell you how much interest was actually paid as part of those payments so it gives you a whole ton of information and i wanted to go through why that's really important so one of the big things that you want

[00:11:42] to look at that for again very much like the bc assessment is just checking to ensure accuracy because often we we kind of assume that lenders are absolutely brilliant and they'll never make a mistake but sometimes every once in a while especially in our industry i've seen it where we see an error on that statement so the interest rate might have changed for whatever reason um i can think of a whole bunch of reasons why the interest rate might have changed if you have

[00:12:12] a variable or an adjustable rate mortgage you'll have seen rate changes um but that's that's the kind of thing that you want to check so check your mortgage balance check the interest rate and uh check to see that everything is accurate on there another important piece for accuracy is just checking the name making sure that it is your legal name on there not a shortened version or a nickname or something because when we're our mortgage brokers you know so you've gotten a mortgage and we're asking you for

[00:12:42] your current mortgage statement there's been quite a few instances where the name on the statement is actually different than what is on title um so just that that's one of those accuracy pieces that i've noticed um in my practice but i i must say that the mortgage statement is got to be one of my favorite documents as a mortgage broker um it's just so chock full of information uh for us um additionally

[00:13:09] uh as a real estate investor or even a small business owner that interest expense that's on there that is that is gold again that's a direct translation to tax savings and and money back in your pocket um pete do you want to explain a little bit more right so as part of that statement you'll find that it will indicate how much interest you paid over the year if you're either one of those things that

[00:13:35] mindy mentioned so if you're having uh real estate investment so you've got a rental whether it's a basement suite or it's a separate rental you'll really want to make note of what interest you paid because as part of your tax filings for that year your personal taxes uh you're going to be creating a statement of real estate rentals and on that statement of real estate rentals it will actually ask for how much interest was paid over the year for the mortgage so that's part of the

[00:14:05] calculation and um not to get too deep into the accounting side but those uh and any interest expense that you've um spent is deductible from the revenues that you've earned so it essentially reduces the amount of tax you pay big deal it's a huge deal yeah for sure and also a very similar thing if you operate a home-based business that part of that home-based business is the business use of home

[00:14:33] expense and again that interest expense will flow into the statement of business activities for your home-based business lots of fun stuff there and this kind of opens the door to a broader look at this and so this isn't something that we would have touched on when we first introduced um tax assessments and um or sorry bc assessments why we always want to talk about taxes it must be

[00:14:59] tax season um and mortgage statements is is this financial planning piece and so some of the like sort of the tips and nuances that we've mentioned really come it what it's called is financial planning you know we we're always thinking about right now and and how expensive life is or inflation or my gosh look at the price of bananas but it's really important to to get ahead of that and and to be a

[00:15:24] smart financial planner to be in control of what you're doing um with your finances totally and part of that um kind of look at the finances the the cash cash flow planning the financial planning is taking a look back at what happened in the past year whether that was expenses that you uh took in uh for christmas shopping if you spent a little bit too much on your credit card

[00:15:50] whether it was purely looking at exactly what your current mortgage is or even looking forward to what it potentially will be at renewal if your renewal is coming up you can look at the cash flow aspects and say hey i'm spending you know x dollars on my credit card to make sure it's paid every month i'm also spending on my mortgage like is there a way to make this work in terms of cash flow that's a bit more

[00:16:20] advantageous for me and that's where a good conversation with your mortgage broker mindy or i we are happy to go through and run through what that might look like whether we're doing a refinance to bundle in a bunch of debts or simply re-amortizing your existing mortgage to push out that amortization to lower those monthly cash flow payments those are all things that are really worthwhile at this time of year when you're looking back kind of at what you did and looking forward to

[00:16:48] what can be absolutely and we've seen you know a decline in rates um from from two years ago and uh as i've been running the numbers um for the past few months there's many cases where there is a significant um cash flow savings um and again it's just it's just grabbing a hold of that that piece and and realizing that you know if if things are uncomfortable it's difficult you know what there

[00:17:17] is a way there is a way to use these tools uh to help yourself get forward so absolutely and and i do want to finish on one final thing which is if you're worried about what things will look like as your mortgage comes up for renewal in the next year or so and your current rate is maybe it's really phenomenal maybe you got it back in you know 2020 2021 2022 when rates were down in the ones and twos

[00:17:44] if you have a fixed rate and you're worried that by going up to a rate that's in the fours that your payment might double because the rate's doubling well have that conversation because that's actually not how it works your your your payment doesn't necessarily double with the rate doubling because things are amortized over a longer period of time there is a much more gradual effect to that increased rate but it's certainly worth gaming out a few different scenarios looking at what

[00:18:13] is right now what could be and whether it's a refi or it's a re-amortization all sorts of options that are worth considering and using as part of your financial plan especially with external debts if you've accumulated external debts and you have that low mortgage rate i can almost guarantee you that

[00:18:37] bundling that all together actually does end up being um much more comfortable cash flow wise and we're seeing it time and time again yeah so have that conversation um tis the season for documents which is our favorite time of season and also a really good time to just be curious about what could be this is the mortgage life we look forward to continuing the conversation so come back and listen