Category Archives: Investment Property

How to Build a Better Budget

There are many challenges when it comes to creating a solid financial plan. Whether you’re saving to buy your first home or hoping to invest in some property updates, now’s the time to focus on balancing your budget. The sooner you develop a realistic budget, the easier it will be to stick to, and the sooner you’ll be able to realize your financial goals.

Are Your Ready for An Emergency?

When building your budget, it’s absolutely crucial that you set aside an emergency fund of money. Ideally, everyone should have at least one or two months’ wages set aside in a money market account in case of an unexpected surprise. If you don’t have enough money to set aside right now, that’s ok. Set a six month savings schedule that allows you to set a little bit aside every month in order to meet your emergency fund goal. The key is to build your emergency fund quickly, without straining your every day budget. The mortgage brokers at FamilyLending.ca recommend devoting a certain percentage of each pay cheque to your emergency fund until you’re comfortable with the amount you’ve saved.

What is an Emergency Fund For?

You should only withdraw money from your emergency fund when faced with an unexpected expense. (And no, a sale at your favourite store doesn’t count!). Things like major car repairs or an unexpected furnace malfunction are good examples of emergency expenses. If ever you’re forced to dip into your  fund, make sure you remember to reinvest the following month so that you’re always prepared for the unexpected.

Should You Make More Or Spend Less?

Now that you have a buffer in place to help you deal with life’s unexpected emergencies, it’s time to focus on your daily spending. This can be tackled in one of two ways. Either you can make more money in order to cover your expenses, or you can decrease your spending. The mortgage brokers at FamilyLending.ca recommend focusing your efforts on downsizing first as this is the easiest option. Before you start eliminating little luxuries, try thinking of more affordable substitutions. For example, if you buy your lunch at a trendy bistro every afternoon, you could just as easily make yourself a delicious sandwich to take with you to work. These small changes will help you cut your expenses quickly and help you save more money over the long term.

Think About What You’re Gaining

Budgeting shouldn’t be just about sacrifice. It should also be about rewards. If you’re having trouble sticking to your investment and saving strategy, the mortgage brokers at FamilyLending.ca recommend setting a mixture of long- and short-term goals in order to increase you motivation. Saving  for a downpayment on a home is a great long-term goal, whereas paying off your credit card could be a great short-term focus. It’s much easier to save for something when you know what it is, so try and decide on a number of important milestone purchases when working on your budget plan.

Increase Your Income Potential
Simply increasing your income isn’t enough to help you get out of debt or save for the future. You need to have a budget in place in order to handle the extra cash properly. Once you have a well-thought-out budget in place, you can start making changes that will enable you to make more income and improve your investments.

Build yourself a better budget, one dollar at a time. For more help with financial planning and investment advice, contact the mortgage brokers at FamilyLending.ca.

Also please contact one of Financial Advisors at FamilyLendingFinancial.ca

Chantielle Kennedy writer for FamilyLending.ca

Saving Strategies for Canadian Homeowners

Save Smart: How to Manage Money and a Mortgage

According to a recent Canadian Payroll Association survey, nearly 60% of Canadians don’t have enough money in the bank to cover even one month’s worth of necessary expenses. Too many homeowners are living on the edge of financial disaster, spending money that they should be saving. If you’re finding it difficult to save, now’s the perfect time to reassess your financial strategy, curb your spending, and improve your investment portfolio. Keep more of your money with these saving tips from the mortgage brokers at FamilyLending.ca.  

Saving Strategies for Canadian Homeowners

Saving is easier than you think. All it takes is a little financial knowledge and foresight.

  • Saving Tip #1 – Pay Yourself Saving is simple when you don’t have to think about it. The mortgage brokers at FamilyLending.ca recommend setting up a savings or investment plan that automatically transfers money from your paycheque into your savings account. Not sure how much you should be saving? Start with 10% of your gross income. Whatever amount you choose, make sure you don’t spread yourself too thin.
  • Saving Tip #2 – Get Rid Of Debt Carrying consumer debt can really hurt your ability to improve your savings. Let’s pretend that you’re carrying a credit card charge of $1,000 plus 18% simple annual interest. Every year, you’re paying an additional $180 in interest charges. Pay off that debt and you’ve saved $180. That’s the same as investing $1,000 in something that earns an 18% return after tax. The more debt you carry, the more money you waste paying off high interest charges. Eliminate debt and you’ll automatically save more money.

Save Money on Your Mortgage

Are you paying more than you have to on your mortgage? Refinancing your mortgage could save you thousands of dollars. The mortgage brokers at FamilyLending.ca recommend refinancing your mortgage if:

  • Your mortgage rate is more than 2% higher than current rates, and you have less than 2 years until maturity. Remember to always check with your mortgage holder to determine if there’s a penalty for getting out of your current arrangement.
  • You’ve built up enough equity in your home. The more equity you have, the more likely you’ll be able to refinance and tolerate a floating or variable rate mortgage. This type of mortgage is known for offering lower interest rates, but unpredictable monthly payment requirements. Speak with your FamilyLending.ca mortgage broker to determine if this is an option for you.

Expect Ups and Downs When Investing

It’s no secret that too much risk can hurt your investment portfolio’s growth rate, but so can sticking to ultra-safe investments that pay one percent or less. When reassessing your investments, make sure that:

  • You’re in it for the long haul. Don’t chase every market fad in hopes of making a quick buck. Studies have shown that it’s long-term discipline that provides the highest average returns.
  • You diversify with a healthy mix of stocks and bonds. A good rule of thumb to stick to: the fixed-income holdings in your portfolio should equal your age. This is because as you get older you’ll want to be more conservative in your approach.
  • Know when to sell. The financial experts at FamilyLendingFinancial.ca recommend that no holding should make up more than 5-6% of your portfolio.

Need more help making senses of your money? Then contact the mortgage brokers at FamilyLending.ca. Or our financial gurus at Family Lending Financial are here to help you save.

 

Chantielle Kennedy writer for FamilyLending.ca

Home Buyers Demand Smarter Designs

 

The results of Better Homes and Gardens magazine’s Next Home Survey are in, and buyers have spoken.

Prospective new home buyers list energy-efficiency, organization and comfort as their top priorities in considering their next move. Demand for traditional McMansions appears to be waning as more and more people come to value intelligent design over wow factor.

“We continue to see a ‘cents and sensibilities’ approach when it comes to buying or improving a home,” said Eliot Nusbaum, Better Homes and Gardens‘ executive editor for home design. “Today’s homeowner is also looking for a home that fits the entire family?from a multi-tasking home office, to expanded storage space, to a living room that can adapt to advancements in home entertainment and technology.”

The results of this survey may influence upcoming new home designs that will go into production later in 2010 and beyond.

Other interesting findings include:

  • 36% of buyers expect that their next home will be “somewhat smaller” or “much smaller” than their current home.
  • 87% plan to have high-efficiency heating and cooling in their next home and 86% plan to have high-efficiency appliances. 24.6% want geothermal heat.
  • 48% say that green building materials and practices will be “more important” when selecting their next home.
  • 59% are interested in floor plans that incorporate space for a home office and 85% want a separate laundry room.
  • 68% want an outdoor grilling and living area.
  • A kitchen with an eating area is a priority for 67% of respondents and 62% consider comfortable family gathering space a top priority.
  • Despite an overall emphasis on downsizing, 37% are looking for a three-car or larger garage, up from 29% in 2008


 

Home Inspection Checklist for Canada

 

  • A home inspection by a qualified inspector is a vital step when buying any home. Before committing to a purchase, the homebuyer should hire a home inspector to ensure the home is in proper condition. Except in British Columbia, where licensing is required, home inspectors are not regulated in Canada. If for no other reason than that, it’s important that the homebuyer understands what she should expect from a proper home inspection.

Exterior

  • According to Griffin Home Inspection Services Inc., a Canadian home inspection company, homebuyers can expect a complete inspection of the exterior of the home and its functions. This includes the roof, exterior wall cladding, flashings and trims. It also includes anything else on the outside of a home, including doors, decks, balconies, rain gutters, retaining walls, driveways, patios, walkways, railings and steps. The final written home inspection report to the homebuyer should detail the condition of each of these things. The home inspector should inspect the roof by getting up on it—not from the ground.

Interior

  • The interior of the home, including floors, walls, ceilings, stairs, railings, the garage, countertops, cabinets, doors and windows will be inspected by the home inspector, and the conditions of each should be accurately detailed in the written report. The total time to complete a thorough home inspection is approximately two to three hours, and most of this time will be devoted to the interior and the systems of a home.

Systems

  • Homes are systems, not just walls and a roof. They have intricate components that keep them functioning, safe and healthy for the occupants. Systems examined during a home inspection include mechanical ventilation systems, air conditioning, heating, electrical systems and plumbing systems. If there’s a fireplace in the home, the chimney and flue must be inspected, as well as components of any gas fireplace or wood stove. The conditions of these systems will be detailed on the home inspection report.

Support

  • The support systems of the home will be inspected. This includes both the foundation and the framing of the home.

Repairs

  • The final written home inspection report should explain what repairs need to be made to the home, if any. Home inspectors will not perform repairs themselves. Be wary if a Canadian home inspector recommends a company to perform the repairs. This is forbidden by the Canadian Association of Home and Property Inspectors. An appearance of conflict of interest can place the credibility of the home inspector in question.

Mold

  • Home inspectors in Canada are not required to test for mold. Mold is a frequent problem in homes, and unsuspecting homebuyers risk buying homes that pose serious health risks because of toxic mold lurking in the walls. Most home inspectors in Canada will not pull back carpeting or drywall to check for mold. A 2010 Canadian Broadcasting Corporation investigative report said the company hired five home inspectors to inspect a home infested with mold, and no inspector found it.

Homebuyers wishing to be certain the home they are considering is not infested with toxic mold may need to hire a qualified mold inspector in addition to the home inspector.
Contact FamilyLending.ca for more information.

Home Inspection Checklist for Canada | eHow.com


Home Prices Rise for Second Consecutive Month: Teranet

 

According to the latest numbers the correction of housing prices late in 2010 seems to have been a short-lived phenomenon, as for the second consecutive month prices increased overall in four of six Canadian metropolitan markets. 

Canadian home prices in January were up 0.4 per cent from the previous month, according to the Teranet–National Bank National Composite House Price Index. It was the second consecutive monthly rise, following on three consecutive monthly declines. January prices were up from the previous month in four of the six metropolitan markets surveyed: 0.9 per cent in Vancouver, 0.5 per cent in Toronto, 0.4 per cent in Halifax and 0.3 per cent in Montreal. Prices were down 0.6 per cent in Ottawa, a fifth straight monthly decline, and one per cent in Calgary, a fifth decline in six months.

 

“January’s price increase confirms that the correction experienced towards the end of 2010 was short-lived,” said Marc Pinsonneault, senior economist with National Bank Financial Group. “In fact, market correction is now a local phenomenon (Ottawa and Calgary). At the national level, January’s prices were still one per cent below those in August 2010, but they were 5.5 per cent above their pre-recession peak.”

 

The 12-month gain in the composite index slowed to 3.9 per cent in January, the seventh consecutive month of deceleration. The largest 12-month rise was 8.2 per cent in Halifax. The 12-month increase was 6.4 per cent in Montreal, 5.3 per cent in Ottawa, 5.1 per cent in Vancouver and 3.9 per cent in Toronto. Only in Calgary were prices down from a year earlier, by 3.4 per cent.

 

Data for February from the Canadian Real Estate Association show generally balanced conditions in major urban markets. Relative to the average, conditions in Calgary were better for buyers and conditions in Vancouver better for sellers, a finding consistent with the movement of the Teranet–National Bank indices for these markets. The Toronto market is no longer tightening. Between January 17, when the federal minister of finance announced that the maximum amortization period for an insured mortgage would be reduced to 30 years from 35 years, and March 18, the announced effective date, the resale market may have been influenced by the prospect of this change.

 

According to Pinsonneault, market conditions are currently balanced in Canada. However the situation differs among regions. Conditions look somewhat tight in Vancouver and Toronto, while they are still favourable to buyers in Calgary. While house prices are high relative to income and rents, and a reduction in the maximum amortization period for insured mortgages from 35 to 30 years took effect recently, “there is no perspective of a sudden and severe price correction in Canada, given the fact that employment is well into expansion territory,” said Pinsonneault.

Source MortgageBrokerNews.ca   
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