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Welcome to the September issue of the News & Rate Advisor.
Source: Bank of Canada
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Monday, 16 September 2013
September News and Rate Advisor!!
Tuesday, 27 August 2013
Solutions for Cash Stressed Seniors
(NC) For many Canadian homeowners, their house
represents the biggest portion of their net worth. Now, increasing
numbers of seniors are starting to recognize the hidden value of their
homes.
The amount saved by baby boomers, as well as their
ever lengthening retirement prospects make finding additional sources of
income more necessary than ever. Did you know that as many as 50 per
cent of all seniors surveyed (by the Investor Education Fund) said they
believe their retirement savings will be exhausted within 10 years of
leaving the workplace?
Their concern is well justified as, according to a
2012 Leger Marketing study, 58 per cent of Canadians in their 50s say
they have less than $200,000 saved for retirement. Other surveys show
that as many as 59 per cent of retirees owe money to a lender, up from
only 40 per cent just two years ago.
So modest savings combined with the increasing costs
of servicing debt is making it imperative for seniors to look for ways
to enhance their cash flow.
“The solution for remaining financially independent
doesn't have to be as drastic as downsizing, selling the house, delaying
your retirement, or going back to work,” says Arthur Krzycki, a
director with the HomEquity Bank. “If you own a home it should remain
your security for the long haul and there are a couple of sound ways to
let your house pay back while you live in it.”
Empty-nesters, says Krzycki, might want to become
landlords, a viable solution especially if you live in a prime location
and have a separate entrance to available rooms, or to a basement that
can be turned into a self-contained apartment.
“Or, if you're not comfortable with strangers in your
home,” he continues, “why not access some of the equity with a reverse
mortgage? Based on the value of your house, this option gives you a
reliable cash flow to supplement your income.”
Here's how a reverse mortgage like a CHIP Home Income Plan could work for you:
• If you have reached age 55, you may be eligible for
the CHIP Home Income Plan. It lets you convert up to 50 per cent of the
equity in your home into tax-free cash.
• Unlike other loans on the market, there are no
credit or income qualifications and you are not required to service the
interest, or repay the principal until you choose to move or sell.
• It is also guaranteed that you will never have to repay more than the fair market value of the house at the time of the sale.
“While it almost seems too good to be true, CHIP's
increasing popularity is easy to understand as soon as you talk to our
clients,” Krzycki explains. “As many as 78 per cent tell us they would
recommend this kind of reverse mortgage to others as a good source of
extra cash in retirement.” Financial advisors and mortgage brokers have
details and additional information is also available online at
www.chip.ca.
www.newscanada.com
Wednesday, 24 July 2013
How to 'nail' an affordable home reno
(NC)—Anyone who has lived in the same house for a
number of years inevitably gets the reno itch. While a gut job is
expensive, home renovations are still an affordable way to upgrade
without moving.
“It's natural that after a certain point, homeowners
start to notice the flaws in their homes,” said Farhaneh Haque, director
of mortgage advice at TD Canada Trust. “It could be that the layout is
no longer practical, the bathrooms are outdated or the exterior needs
some curb appeal. Each of these areas can increase the property value of
a house while making it more suitable to the homeowner's needs.”
Before picking up the hammer and hardwood, Haque recommends homebuyers plan for the cost of a home renovation:
• Consider upgrades that save money: Green
options, like installing insulated glass windows, may cost more
initially, but they can make sense financially in the long-run when
future energy bill savings are considered.
• Research and budget for the unexpected:
The reality is that a home renovation often costs more than planned.
Before starting any work, consult with at more than one contractor to
help accurately assess costs of materials and labour. It's also a good
idea to build a buffer into the budget for any unexpected expenses.
• Explore financing options: A home equity line of credit (HELOC) allows homeowners to use the equity
they've already built in their homes to finance upgrades at a
competitive interest rate. Consider using a HELOC to pay different
tradespeople as the work progresses to avoid paying interest on credit
that hasn't been used. With ongoing access to credit, it can be tempting
to go overboard, so remember to stick to the budget.
For further advice on financing a renovation, visit: www.tdcanadatrust.com/homeownership.
www.newscanada.com
Monday, 15 July 2013
News and Rate Advisor!
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Welcome to the July issue of the News & Rate Advisor.
Source: Bank of Canada
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Friday, 5 July 2013
COSTS ASSOCIATED WITH CLOSING A HOME
Your mortgage isn’t your only expense when buying a
home. In fact, there are several closing costs that you must pay before you can
take possession of your house (to “take possession” means the home is now
legally yours). Many of these costs are listed below:
§ Appraisal Fee: This is the cost
for a professional to come to your property to assess its value. Your mortgage
lender or mortgage default insurer may require an appraisal to determine
whether the selling price is reasonable for that market.
§ GST: You must pay the
Goods and Service Tax (or Harmonized Sales Tax) on a newly constructed or
substantially renovated home. Resale homes do not require a GST payment. Some
of this can be recovered with the GST/HST rebate for new or substantially
renovated homes.
§ Home Inspection Fee: This
covers the cost of a professional inspection of your home. Hiring an inspector
is voluntary but recommended for resale homes, and usually costs $400-$600.
§ Property Insurance: Since
your lender has a large stake in your home, they will often require you to
purchase insurance against fire and weather-related damage. It is also a good
idea for you to purchase ‘contents’ insurance to protect your valuables.
§ Land Transfer Tax: This is
a tax charged to buyers in most provinces, usually based on the purchase price.
§ Legal Costs: This includes fees
charged by your lawyers or notary for services such as conducting a title
search, drafting a title deed and preparing the mortgage, and registration
fees. This will cost over $500.
§ Mortgage Default Insurance:
High-ratio mortgages (those with less than 20% down payment) generally require
mortgage default insurance. The cost is usually added to the mortgage and
ranges from 1%-3.25% depending on the amount of your down payment.
§ Mortgage Life Insurance: Special
insurance coverage to cover the cost of your mortgage in the event of death or
severe illness is available from most lenders.
§ Moving Expenses: Costs
will vary, depending on whether you do it yourself, rent a truck, or hire
professional movers.
§ Prepaid taxes, Utility Bills and Other
Charges:
Any previous owner may have prepaid some bills before the closing date, which
you will have to reimburse them for. All taxes, utility bills, and other
charges incurred after the closing date become your responsibility.
§ Utilities: Most utility
companies charge for hooking up your services and replacing any previous
owner’s names with your name on the bill.
(Source: Genworth Financial)
Wednesday, 3 July 2013
How to 'nail' an affordable home reno
(NC)—Anyone who has lived in the same house for a
number of years inevitably gets the reno itch. While a gut job is
expensive, home renovations are still an affordable way to upgrade
without moving.
“It's natural that after a certain point, homeowners
start to notice the flaws in their homes,” said Farhaneh Haque, director
of mortgage advice at TD Canada Trust. “It could be that the layout is
no longer practical, the bathrooms are outdated or the exterior needs
some curb appeal. Each of these areas can increase the property value of
a house while making it more suitable to the homeowner's needs.”
Before picking up the hammer and hardwood, Haque recommends homebuyers plan for the cost of a home renovation:
• Consider upgrades that save money: Green
options, like installing insulated glass windows, may cost more
initially, but they can make sense financially in the long-run when
future energy bill savings are considered.
• Research and budget for the unexpected:
The reality is that a home renovation often costs more than planned.
Before starting any work, consult with at more than one contractor to
help accurately assess costs of materials and labour. It's also a good
idea to build a buffer into the budget for any unexpected expenses.
• Explore financing options: A home
equity line of credit (HELOC) allows homeowners to use the equity
they've already built in their homes to finance upgrades at a
competitive interest rate. Consider using a HELOC to pay different
tradespeople as the work progresses to avoid paying interest on credit
that hasn't been used. With ongoing access to credit, it can be tempting
to go overboard, so remember to stick to the budget.
For further advice on financing a renovation, visit: www.tdcanadatrust.com/homeownership.
www.newscanada.com
www.philrom.com
Tuesday, 25 June 2013
Hamilton Real Estate: The Want List vs. The Need List
Hamilton Real Estate: The Want List vs. The Need List: One of the biggest problems I encounter with buyer's is differentiating between a 'want' and a 'need'. Too often people...
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