Know what you are looking for

 First things first, you need to know exactly what cover you need. Make a list of everything you need to inquire about, and if possible, any specific things you want in an insurance policy. If you aren’t sure what you should be looking for, ask family members and friends and do some research online. Once you start reading through different policies, you’ll soon form an opinion as to the type of insurance you think best suits you.

Here’s an example; if you have an old used car, you probably don’t want to purchase the maximum cover possible.

Check out comparison websites

 Comparison websites are a great place to start when searching for your insurance policies online. They help you compare the offerings of different insurance providers covering everything from home and contents insurance to health insurance. It’s a helpful, quick way to compare the offerings and prices of different companies.

Always keep the variables the same

 It’s really important that when you are looking for insurance of any kind, you keep the variables the same. For example, you may get a quote that’s cheaper than the first but that’s only because the coverage is slightly different. Make sure you are always inputting the same data to get a genuine quote and read the policies carefully to really compare if one is cheaper than the other.

Look for a one stop shop

 It’s so much easier and simpler if you can combine all of your insurance policies with the one provider. It means that everything is in the one place, and you can inquire about all of your insurance needs at the one time. This will also make it easier when you need to make changes for any reason.

Don’t rush it

 Many people don’t bother to read through their policy in detail because, let’s face it; it’s not the most fascinating thing to read. But it really is a must. If you have any questions, make an inquiry. Because you are looking for the right insurance online, you have the luxury of taking your time in a no pressure environment to ensure the policy you are looking at is right for you.

Buying your insurance online is easy and can even save you money. Just make sure that you carefully read the policy before signing up for anything, it always pays to be cautious.

Finding the right home insurance and car insurance isn’t something that should be rushed, but the good news is you can organise everything from the comfort of your own home without the need to spend time on the phone or in queues having to fill out loads of paperwork!

Banks who own these foreclosed homes are often desperate to sell of these homes as soon as possible and therefore will accept much lower than the market rate. What you need to know is how to locate a foreclosed home. The most useful tool in locating a foreclosed home is definitely the internet. Websites such as Redfin.com help you find foreclosed homes in your vicinity. Once you know about the foreclosed homes in your locality then you can start looking at prospective homes.

Buying a foreclosed home directly from the bank or at an auction are bad ideas. A far greater idea is to buy through a broker as most banks acquire the services of brokers to sell their homes. Look for an agent who specializes in foreclosed homes so you can rely on his or her services.

Be careful about how much repairs the house will need. Bank owned houses are often the subject of neglect when it comes to care taking and therefore may need extensive repairs which will add to the overall cost of the house. Carry out a thorough inspection of the house to see if it is in livable conditions or if repairs are needed how much will they cost. Only then should you make the decision on whether or not to buy the house. If a house is priced at a price much lower than the market price then it might need a lot of repairs, so do not let low costs convince you to make a decision in haste. How long a house has been empty for is also a factor that may signify the extent of the repairs that the house may need. Houses that have been empty for more than three months often need more repairs than houses that have just been vacated.

As with other homes, do not buy the house without taking a look at the neighborhood and vicinity of the home. Look for the crime rate in the area to see if you are buying into a promising neighborhood or not. If an area has low house prices due to foreclosures all over the locality, then you may have difficulty in redeeming the cost of your house later on. Keep all these factors in consideration and carry out a thorough check of the area that the house is in.

When you have gone over all these details including the price, locality, repairs, etc only then should you arrive on a decision as to whether or not you should buy a particular foreclosed home. Do not make a hasty decision that you will regret later on. Make sure you visit the house and the neighborhood and can trust the agent through whom you are making the purchase. Before you buy a home, be sure to know take a look at the overlooked home ownership costs to make sure you can continue to afford it later on. Once you do the research you are all set to buy a foreclosed home by using all the information that you have.

So, naturally, the bank finds a way to get back into your back pocket: Reverse Mortgages.

Reverse mortgages at a first-glance are very appealing. They have been on an upward trend in recent years, leading many more to consider it as an option later in their retirement years. While a good option for some, it really should be viewed as a last resort for most seniors. A reverse mortgage is basically a loan against your home equity, and it is primarily used by seniors and retirees who have paid off their home in full. The ‘loan’ is then paid back in full, plus interest, when the house is sold, or when the owner dies (in which case the bank sells the house for you). The difference between a normal mortgage and a reverse mortgage is that there are no monthly payments on a reverse mortgage. You receive a lump sum of money, up to 40% of your home’s value, and then the bank just adds interest each month until it comes time to pay.

For the banks it is a win-win. There is no chance you will default on the loan, as you already own your own home. The longer you stay in the house, the more you owe them. In essence, (although not legally) you are in fact giving your house back to the bank, and living off the cash you already used to pay for it the last 20 years.

A few positive things reverse mortgages might be used for are home renovations, investment opportunities, medical bills, or paying back other high interest debt. If the income or advantages gained from a reverse mortgage outweigh the value you will be losing in your home, it may be worth looking into.

For those taking out a reverse mortgage to go on vacations, buy a fancy car, a boat, or squander your money away, it would not be a wise decision. Of course, it is completely within your right to do that; they are your golden years after all, and you deserve to enjoy them. If you are set on doing that, you would be better off looking into Home Equity Line of Credit, or just selling your house outright, downsizing to a condo or a less expensive home, and taking the extra cash to do what you wish. Remember your kids and grandkids as well, as it’s nice to pass on your success to your descendants.

Another thing not often mentioned is that you never know how old you may be when you pass away. If you retire at 65, take out a reverse mortgage at 75, and stay healthy until you are 90, you will have likely lost the majority of the value of your home back to the bank in compounding interest the last 15 years. At that point, you would probably be near the end of your savings, your home equity would be dwindling, and you may continue to live up to 95 or even 100.

Always remember to plan for the long term, even in the latest years of your life. It is better to have too much, than to find yourself just scraping by the last few years of your life. A reverse mortgage should really be a short term solution. Keep your reverse mortgage a maximum of five years. Don’t forget, there are always hidden costs as well, such as bank fees, lawyer fees, and taxes.

Staz Johnson has been passionately blogging about personal finance, affording the right amount of mortgage, debt repayment and financial management. Check out her website or become a Facebook fan!

The Canada Revenue Agency (CRA) warns all Canadians to beware of telephone calls, mail, or email that claim to be from the CRA but are not.

The Canada Revenue Agency (CRA) encourages you to file your income tax and benefit return and pay on time and online using the CRA's quick, easy, and secure electronic services. You have until midnight on April 30, 2012, to file your 2011 income tax and benefit return and to pay any balance owing.

Highlights:

• The Aggregate Composite MLS® Home Price Index in March 2012 was up 5.1% year-over-year – on par with the gain in February and the smallest increase since June 2011.
• Toronto posted the largest year-over-year increase (7.3%), followed by Vancouver (5.3%), the Fraser Valley (3.3%), Calgary (2.6%), and Montreal (2.2%).
• Year-over-year gains were largest for one-and two-storey single family homes, which rose 5.4% and 6.8% respectively. Apartment prices climbed 3%, and townhouse prices were up 2.6%.

The MLS® Home Price Index rose 5.1 per cent in March 2012 compared to the same month last year. The increase was on par with February’s gain, which was the smallest since last June.

“Overall price trends show that Canada’s housing market continues to moderate,” said Wayne Moen, CREA President. “Price increases have been shrinking since last fall. While that trend paused in March, it may in part reflect an early spring in many parts of the country, resulting in increased competition among buyers. That said, headline numbers mask some important differences in price trends among local housing markets and housing types. Since all real estate is local, buyers and sellers should talk to their local REALTOR® to best understand how home price trends are shaping up where they live.”

The MLS® HPI remained above its year-ago level in all five of the markets tracked, led by Toronto (7.3%).

It also held above year-ago levels in all housing categories tracked, led by two-storey single family homes (6.8%).

The MLS® HPI rose 1.3 per cent from to February to March 2012.

“The index typically experiences these types of month-over-month gains in the spring, which coincides with when the balance of supply to demand is tightest,” said Gregory Klump, CREA’s Chief Economist. “With that in mind, it’s important to look at month-to-month movements in the context of how they compare to the same period in previous years. While the overall monthly price increase was on par with last year’s figure, it masks slowing price momentum in the Lower Mainland area of British Columbia. Slower price gains there were offset in March by a modest acceleration of price gains in Calgary, Toronto, and Montreal.”

Interactive tables and charts for MLS® Home Price Index data on Composite, Single family homes (including separate indices for one- and two-storey homes), Townhouse/row units, and Apartment units are available at www.homepriceindex.ca/hpi_tool_en.html.

Data table available to media upon request, for purposes of reprinting only.  

In focus: Some of the trends underlying the overall MLS® HPI

Momentum in the overall MLS® HPI held steady between February and March 2012, with equal year-over-year gains of 5.1 per cent. However, because the MLS® HPI is composed of four Benchmark housing types and more than 1,600 sub-areas spread among five housing markets, the overall index can mask price trend variations among Benchmark housing categories within a single housing market and between different parts of the country.

Price gains for two-storey single family homes have surpassed this in other housing categories since the beginning of the economic recovery. Despite a recent deceleration in gains, two-storey single family homes posted the strongest year-over-year price gains in March. By contrast, price gains for one-storey single family homes picked up in March, which was driven mainly by increases in Montreal and Toronto.

Price growth remains much stronger for one-and two-storey single family homes compared to multi-family units, with price gains for single family homes (6.4%) running roughly double that for townhouse units (2.6%) or apartment units (3.0%). Even so, there are significant differences between housing markets.

In Montreal, townhouse unit prices are rising faster than prices for other housing types. This likely reflects the desirability of their location, since townhouse units are predominantly centrally located while single family homes are often located further from Montreal’s city centre.

Price gains have remained strongest in Toronto since mid-2011. The rise in Toronto’s Composite MLS® HPI was a full two per cent above the year-over-year increase in Vancouver’s composite index. This represents the largest spread for price growth between these two markets in more than a year. This gap may widen further, since the Vancouver market is showing signs of coming off the boil while a lack of available supply relative to demand keeps Toronto’s housing market in seller’s market territory.

For additional information, including interactive tables, please go to: www.homepriceindex.ca.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further statistical information can be found at http://crea.ca/statistics.

The Canada Revenue Agency (CRA) recently concluded its review and has determined that refunds or rebates will not be withheld from tax-exempt incorporated municipalities, universities, schools, hospitals (MUSH), non-profit organizations (NPOs), federal crown corporations, and Indian band councils when they have outstanding T2 returns.

Expense Accounts

The number one way to easily waste business funds is through unnecessary spending on expense accounts. Business expense accounts should only be used for necessary purchases, and while this may sometimes mean a dinner with or a thank you gift for a client, going overboard with your expense account spending is an easy way to reduce your profits. Make sure your staff know what they can and can’t use company money for, and consider auditing your expense accounts regularly to eliminate the temptation for them to charge an inappropriate expense. The better your asset tracking, the less likely you will have any issues with inappropriate usage.

Marketing

It is easy to get carried away when it comes to marketing, and often money is used for no real benefit. Make sure that you have a solid idea of what it is you are trying to do with your marketing, and keep your marketing plan simple at least until your business is stable and successful. Once you have a more solid footing and a little more financial backing, then gimmicky marketing techniques may be worth investing in. So, until you have money to spare, keep your marketing simple rather than wasting it on expensive methods that are no guarantee for success.

Equipment

Having equipment that works well and is appropriate for the work that your business does is a great start on the road to success, but be sure to choose your equipment carefully so that it isn’t wasting your business’ money. Buying unnecessary gear is a huge waste of precious resources, as is buying equipment that is of poor quality and that will need replacing frequently. If you don’t want to waste your business’ money, buy equipment specific to your needs and make sure you get something that is likely to last.

Parties

While it is a good idea to throw a party every now and again – whether to boost staff morale or thank loyal clients – be careful that you don’t go overboard with your fancy celebrations. Having a party is one thing, but super expensive ego-boosting wine and caviar parties are taking things a little too far. If your business is successful and you no longer need to stay on a tight budget, then extravagant parties can be a lot of fun, but if you are still starting out and don’t have endless amounts of money to spend, show off a little less and have fancy parties less often.

One way is with a home-equity loan. The second is with a home equity line of credit – also known as a HELOC.

The equity you have in your home is the current value of your home minus what you owe in mortgage debt and any other liens against your property. Within the mortgage with a bank, lending company or credit union, this equity isn’t liquid, meaning it can’t be sold as a commodity.

But banks and other institutions will lend money against that equity as long as you agree to put your house up as collateral for the loan. The more equity you have established in your home – the amount of your original down payment, plus any mortgage principal you have paid, plus the amount your property may have appreciated over time – the more money you can borrow.

In some ways, the home-equity loan and the HELOC are similar:

• They both offer a way to finance a variety of purposes – college tuition, home renovation, debt consolidation, etc. – using your home as security.
• They both offer reasonably low interest rates.
• They both require that you have good credit as well as home equity.
• And they both impose the same costs as a primary mortgage or re-finance, including a property appraisal, title search and insurance fees, as well as all other customary charges.

Here’s how they differ: a home equity loan, sometimes called a second mortgage, is a one-time, lump sum loan that is paid off over a set amount of time. It has a definite number of payments and usually a fixed rate of interest.

As a form of closed-end credit, it provides a specific amount of money to finance a specific purpose for a specific period of time. Funds borrowed from a traditional home equity loan begin accruing interest immediately after they are disbursed.

A HELOC, on the other hand, is a form of open-end credit. It is much like a regular line of credit, with one big exception: it is secured by your home.

A HELOC is a store of available money that you can draw on as needed, during what is known as the HELOC’s draw period. You can access the money by writing a check or by charging a credit or debit card.

One major advantage of a HELOC over a home-equity loan is that you pay interest only on the money you actually borrow.

One potential disadvantage of a HELOC is that its interest rate is generally variable. That means your monthly payments will vary, and monthly payments on the same balance will be higher if interest rates creep up or jump up.

At the end of the draw period, you can no longer borrow money and you must pay back any outstanding balance.

Also, unlike a home equity loan, a HELOC is subject to periodic review and can be reduced or eliminated by a lender for various reasons.

Reading a shaky market

It’s a truism to say that the property market provides opportunities at both the high and low ends of its cycles. Prices are never really static. Basic commerce devolves on profit and loss. Some people sell into falling markets to minimize losses. Others may buy into rising markets to “ride the waves”. These moves seem a bit strange in many cases, but there’s good logic to them, and things to be learned.

In an iffy market, these reactions to risk are good business for those able to take advantage of them. The motives for buying and selling aren’t necessarily obvious, which makes the market a bit harder to read, but if you check out the logic, you’ll find some useful information to help you predict moves and assess investment options.

For example:

Selling into a falling market- This can be both good business and a housekeeping exercise. Selling before the market bottoms means getting a better return, obviously. Selling at all means getting the investment off the books at a profit, and having capital available to take advantage of lower prices.

Buying into a rising market- Not as naïve as it might seem, even in a very iffy market. The buyer is positioning at a premium, but hoping to make more, and locking in a good asset. These buyers aren’t looking for an excuse to pay interest. They usually have the capital, can buy outright, and can get good bargains on that basis. They can also negotiate more easily, because the seller will be making money anyway in a rising market. In this case, “ride the waves” means taking advantage of market upward inertia, an effortless approach.

Reading the market

The one rock solid certainty about investment property prices is that they will move, at whatever speed, up or down. You can rely on a combination of “market sentiment” and industry hype to blur the issues quite effectively, but the basic moves are up or down.

Before you read in meanings which aren’t there into the market-

Find the good property investment advice sites- These are sites which provide useful services like core data for prices, industry statistics, professional market analyses, and similar information about investment properties. This information isn’t available in the retail market. It also provides a very different picture of the real market to the hype-based sales pitches.

Any professional property investor will tell you in no uncertain language that property investing is about facts and nothing but facts. Reading the market is about knowing where to find the facts you need to make accurate judgments. The rest is easy.

Did you know? Home owners may benefit from certain non-refundable tax credits when filing their income tax and benefit return.

Did you know? The volunteer firefighters tax credit (VFTC) is a non-refundable tax credit available to any volunteer firefighter who completed at least 200 hours of eligible volunteer firefighting services with one or more fire departments in the year.

 Here’s how the Rent-to-Own Program works:

• The tenant/buyer puts a small down payment on the property which is used toward the purchase price of the property
• The tenant/buyer makes monthly payments of which a portion goes toward the down payment
• The tenant/buyer works to build, repair, or re-establish credit to build trust and become less of a risk in the eyes of mortgage lenders
• At the end of the Rent-to-Own program the tenant/buyer then applies for traditional financing through a mortgage lender
• With a pre-approved mortgage and a cumulative down payment the tenant/buyer can now purchase the home and become a homeowner

It is important to understand that the initial down payment made will later be used toward the buy-out price of the purchase. Also, as you continue to make your monthly payments a portion of each payment is directly added to your down payment. This monthly addition will steadily increase the value of your down payment, which ultimately goes toward the purchase price of the property. The accumulated down payment is a strong asset to have when it is finally time to apply for the mortgage that will give you ownership of the home. This step is the conclusion of the Rent-to-Own program and the goal to work towards as you go through the process.

Essentially, the Rent-to-Own program is renting with the end option to purchase the property. The tenant/buyer will have the option to purchase the property at a given price and within a given period of time. This program is only for those who are serious about owning a property and already have a homeowner mindset. The ideal client for the Rent-to-Own program is someone who:

• Wants to work toward becoming a homeowner as soon as possible
• Takes pride in ownership of the home
• Understands that Real Estate is a great way to build wealth
• Has had trouble receiving financing or has been declined by a mortgage lender before

The built-in benefits of the system are designed to increase to the tenant/buyer’s credit rating and the amount of their down payment. When mortgage lenders analyze applications for financing one of the largest determining factors is the size of the down payment. If the borrower is committed to a sizable down payment then it gives the lender an added layer of security. See, the lender wants to make sure that the loan will not default so the down payment must be at least 20% to have a good chance of approval.

The Rent-to-Own program revolves around slowly accumulating a percentage of the tenant/buyer’s monthly payment to build up the down payment. Also, as the monthly payments are made the tenant/buyer’s credit rating will continue to increase until it is time to buy the home. Combining a strong down payment, a recent history of paying debt, and a good credit rating your application for financing is sure to be accepted.

Mortgages Canada is proud to have this program in place to give those with poor credit a chance to be a homeowner. We are often able to get applications approved after the bank has already said no. This program gives our customers the ability to make payments that actually go toward the ownership of the property. Now, there are many benefits of the Rent-to-Own, here are just a few:

• Repair, re-establish, or build your credit rating
• Dodge the expensive closing costs on the property
• Acquire equity in the property through building improvements
• Use a smaller down payment

The Rent-to-Own program gives you the ability to begin investing in owning a home today and avoiding the cash pit of rent. This program will help you to be more financially responsible, stay on track and go through the necessary steps to build the equity and credit rating required to qualify for a mortgage. The Rent-to-Own program will put you well on your way to becoming a homeowner in no time, and you also receive the added benefits of a stronger credit rating and real equity in your property.