Category Archives: Refinancing my Property

CAAMP Report Finds Canadian Consumers Believe They Have Too Much Debt

The seventh annual State of the Residential Mortgage Market report, conducted by CAAMP (the Canadian Association of Accredited Mortgage Professionals) has found that consumers are worried about debt. The report, which included survey data from 2,000 Canadians (half of which were homeowners), asked participants to what extent they agree with various statements based on a 10-point scale: a response of 10 indicated complete agreement. The statement, “as a whole, Canadians have too much debt,” received the the highest degree of agreement, scoring an average rating of 7.98 out of 10.

While debt remains a major cause of concern, there is a widespread opinion that Canadian real estate is a good long term investment. Consumers still feel that a mortgage is a “good debt” and very few regret taking on the size of mortgage that they did. However, there is still a very big perception that Canadian homeowners are largely unprepared for the financial obligations of purchasing a home. Continue reading →

Consumers paying more for home insurance but mortgage interest costs decreased in Aug

The Consumer Price Index (CPI) rose 3.1% in the 12 months to August, mainly as a result of higher prices for gasoline and food purchased from stores. This follows increases of 2.7% in July and 3.1% in June. On a seasonally adjusted monthly basis, consumer prices rose 0.3% in August.

The 0.4 percentage point difference between the year-over-year increases posted in August and July was mainly the result of price increases for the purchase of passenger vehicles, electricity, homeowners’ home and mortgage insurance, telephone services and jewellery. Continue reading →

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

Mortgage Rates Stay Low – But For How Long?

 

Bank of Canada Governor, Mark Carney, confirmed on Wednesday that he has no immediate intentions to raise mortgage rates; however, Carney did confirm that “some” of the stimulus currently bolstering the system would be “eventually withdrawn.”

 Carney made these statements following the release of fresh data from the Canadian Real Estate Association stating that some of Canada’s urban housing markets are grossly overvalued. Even though the pace of Canadian home sales is currently in line with the 10 year-average, prices are continuing to escalate, rising a staggering 8.6% nationally during the month of May. Home prices are surging in cities like Vancouver, Toronto, and Montreal, which has Carney worried about unfounded excess.

 Factors Affecting the Surge

While Carney has been careful to avoid referring to the current housing market as a bubble, the signs all point to impending problems. Elevated levels of ‘multiples’ inventories, increased development, and heavy investor demand are three of the factors currently driving housing and condo prices through the roof. Unfortunately, information from Statistics Canada doesn’t support the current spike in demand. Recent stats show that the average Canadian families’ income (including earnings, investments, and private pensions) fell 3.2% in 2009, making it the first significant drop in market income since the early 1990’s. So who exactly is driving the demand for investment properties? Realtors point to an influx of foreign investment interest, specifically from Asian nations.

 Finding the Silver Lining

While many potential home buyers see the rise in home prices as an impediment to homeownership, it isn’t all bad news. Even though home prices are skyrocketing, mortgage rates have remained at historic lows… for now, at least. These lows can’t last forever, and if Carney’s comments are any indication of future increases, home buyers can expect hikes to come fast and furious once they hit. As long as mortgage rates stay low, Carney warns that Canadian financial authorities will remain vigilant and ready to move at the first sign of any imbalance.

 How to Take Advantage of Low Mortgage Rates

Borrowers with strong credit and stable jobs are in a prime position to save big by refinancing their mortgage in order to take advantage of record lows. While the low rates have sparked a surge in refinancing activity, many homeowners are oblivious to the fact that they could be saving more money on their mortgage. Homeowners throughout the country can begin their journey to lower mortgage payments online by answering a quick and easy mortgage pre-approval questionnaire. If you’re a first-time home buyer looking to purchase your first piece of real estate, don’t wait to secure your mortgage rate. The rate you see tomorrow could be three times higher than the current offer.

 As with any market, it pays to act fast. Now’s the time to review the up-to-date rates and refinance your mortgage.

 Chantielle Kennedy writer for FamilyLending.ca