Tag Archives: Home Ownership

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

Makes Cents to Me!

 

Today I wanted to talk to you about “odds”.  Not the opposite to “even”, but what are the odds of an event happening.  It amazes me the amount of people who always seem to be in front of me at the variety store either checking their lottery numbers or dropping $50 bucks to get the numbers for the next draw.  Just imagine.  Yes, just imagine that the odds of hitting it big with the lottery are about 13 million to one.  Did you know that you have a better chance of being struck by lightning or to do the math you would have to be struck by lighting 22 times to equal the odds of winning big in the lottery.  I find it intriguing that most people still spend billions of dollars each year for the chance to hit the “big one” but don’t spend their money to protect themselves and their families with events that can happen much more often.  Did you know the chances of getting cancer today are about 3 to 1?  That means that out of every 3 people you know, one of you will be diagnosed with cancer in your lifetime.  Yet, how many of us have purchased critical illness insurance?  Sure you won’t get millions from your insurance company but $50000-$100000 or more would certainly help their family in this time of need. Did you know that a 20 year old will have a 3 in 10 chance to de disabled for 90 days or greater in their lifetime?  Do you have coverage’s in place that will take care of your family if you can’t work? 

Did you know that 1 in 3 of us will die from heart disease?  What steps have you taken to ensure that your family will be taken care of in your absence?

 I know that you’ll lose the anticipation and excitement of the chances you will actually win the lottery and the dreams of how you’ll spend this “win fall”, but you can surely find some peace and solace in knowing that in the event of an unforeseen illness or injury that, financially, things will still be okay.

 I like most people play the odds every day.  Do I get a higher deductible on my car insurance to lower my premiums taking a chance I won’t get in too many accidents?  It’s a choice we all have to make day in and day out but please take my advice and put your money where it will help you and your family the most. 

Use the odds in your favour, start today and plan for a long and healthy tomorrow. It makes cents to me.

Will Carey from Family Lending Financial

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