Liz's Reid on Money, Mortgages & Life

Should You Skip A Mortgage Payment?

2014-03-04T19:02:00.001-08:00

Lenders are advertising the option of skipping a mortgage payment more often these days – with one major bank even creating a TV ad!

But unless this is your only option, it’s not recommended that you skip a payment because, like most ads that sounds too good to be true, this option is as well.

The banks want you to think they’re advertising the option to skip a payment to do you a favour. But it’s important to realize that lenders are in the business of making money. They’re not going to create an ad that doesn’t benefit them in the long run.

And it’s not like you can simply choose to skip any payment at will when you need it most. You actually have to prepay your mortgage in order to take advantage of this mortgage vacation option.

You can miss a regular mortgage payment as long as you have already prepaid that amount by doubling up any mortgage payment, increasing your mortgage payments or making lump sum payments. It’s important to know how much you can prepay each year before making extra payments – this varies from lender to lender.

And if you’re going through the trouble of prepaying your mortgage, you want to make the savings work to your advantage by actually paying your mortgage off quicker – not diminishing those savings by taking a mortgage vacation.

The number of eligible payments covered by your payment vacation will be based on a combination of your prepaid amount and your current regular monthly mortgage payment. There is also typically a maximum payment vacation permitted per mortgage term, regardless of how much you have prepaid your mortgage.

Other considerations to think about when looking at the mortgage vacation option include:

· Interest is capitalized (ie, interest is added to your outstanding principal balance)

· Borrowers lose the benefit and interest cost savings of prepaying their mortgage once they use the mortgage vacation option

If you happen to already be in arrears on your mortgage, you can’t take advantage of this option.

It’s always important to read the fine print and ask questions when using a tool advertised by your lender. Better yet, speak to your mortgage professional – we know the ins and outs of all the bank offerings and can help advise you on your best options.

As independent, unbiased mortgage professionals, it’s our job to show transparency to ensure you have the right security, product, term and rate for your mortgage needs at the lowest overall cost, and with the most control in homeownership for the security you deserve.

As always, if you have any questions about the information above or your mortgage in general, I’m here to help!

~ Liz 604-290-4835 ~

Focusing on being thankful...

2012-10-09T12:45:00.000-07:00

Yesterday was Thanksgiving here in Canada. As families and friends gathered to share food and conversation I ventured into the realm of what it is that I am truly thankful for this year.

Outside of the regular answers I normally give, great husband, good kids, my health and the health of our parents, etc, I thought about the other things that I take for granted.

Friends - One of the reasons that I think I am such a happy person is that I know I have great friends that love me! They are the kind of people that you don't have to call every day or week, but when you do see them it is like old times all over again. We just pick up where we left off...I love this.

Great neighbors - we really do have fabulous people that live around us. Sharing their birthdays with us, bringing over Christmas baking and just general friendly waves to each other from the driveway. I think it should be criteria when buying a house to ask the current owners "How are the neighbors?" Truly they can make or break a great home.

Weather - yes, I do live in Vancouver or as some people refer to our region as "Raincouver", however it has been an amazingly wonderful August, September and start of October. We even had all our doors open cooking our turkey yesterday and it was 18 degrees Celsius! In Vancouver we rarely get snow, and mostly live in a climate that if it gets below -5 Celsius that is cold! Our trees and grass is green most of the year and my husband has actually boasted that he has gone sailing, golfed and skied (in the mountains) all in the same day. I love this city.

My home - I live in a single detached house in the Lower Mainland (just outside of Vancouver) and it is just the perfect size for our family of four with a dog. We are always under a renovation of some sort (being married to a Contractor has it's pluses and minuses), but really the house is ideal. With comfortable interior, a park across the street and great access to walking trails, we have it all here.

I guess my thought behind this blog post was to reflect on what it is that we do and see each day. Don't wait until something is gone to appreciate it.

"Be grateful for all that is in your life, for we only have but one!"

What are you grateful for?

Divorce...Through the Looking Glass

2012-09-06T12:56:00.000-07:00

So your relationship is over?

For how long have you known this...5 minutes, 5 hours, 5 days/months/years?

The reality of divorce is that it is just that...a "reality check".

I speak from experience as 10 years ago I went through a divorce. I was the instigator and the "bad guy", but I also think that I was the realist. We had grown up and apart and I was done.

My kids were 4 and 2 years old and I was 30. It was hard, stressful, scary and sickening, but in the end it was a HUGE character mirror for me. I really saw what I had done up until that point as a blur, and I was moving forward for the first time with a sense of clarity that I hadn't ever felt I had experienced. It was enlightening.

Since my experience I have talked to many other women and families about relationship breakdowns and I have found a common thread...Many of us plod through life, on the daily grind, forgetting to really stop and think.

As Melissa Carr of the Thirties Grind blog puts it..."Get up, go to work, raise kids, pay bills, sleep. Repeat".

This process can work for some people that have a solid relationship with a person who is like minded and can share in the daily duties, but if you live in a one-sided world, you may have considered, or are currently thinking about, the idea of getting out.

In the end, here is the reality check that I talked about.

Your life will change in the following ways:

Friends will disappear.
Money will become tighter more than ever before.
Kids will go through a multitude of emotions.
Parents will either help or hinder you (but there will be a strong reaction from your family one way or another).
You will see less of your kids (this may mean every other weekend or every other week).
You will have to share in the raising of your kids (new girlfriends or boyfriends will enter the picture)
You will have to deal with people who look at you differently because you are divorced (some bad reactions and some sympathetic)
You will have to advocate for yourself
You will have to learn how to: clear a plugged toilet, re-light the furnace, deal with auto mechanics and pay household bills.
You will have to put lots of "work" into things that may have been neglected (ie. your appearance, your job, moving out of your comfort zone)

In the end, the BIG lesson that I came away with is that life is really a wall of mirrors that you are forced to look at from time to time. The good, the bad and the ugly are shown and your perception of who you are is everything. Forget about what other people say and get to know yourself!

One final word of advice for parents going through a divorce: It is over for you, but your kids will live it forever, so don't talk badly of your ex-partner and learn how to get along.

Healthy kids are possible, but it is the early on lessons of who their parents are and how they treat each other is everything!

Do you know of a positive divorce experience? Please share...

Takes a Village...

2012-08-28T11:40:00.003-07:00

We all come from somewhere and today my Dad has taken my two kids (12 and 14 year old) to his hometown of Trail, BC. He goes back every year (sometimes twice a year), to see his old friends and their senior parents to "chew the fat".

I used to think it was strange to do this, but as I get older I think it is nice, kind and downright respectful to consider the people who helped raise you. Really...let's face it, it does "take a village to raise a child".

As a kid I was raised in East Vancouver and boy was it a melting pot of people. In my neighborhood there were 8 different nationalities on one block! I used to joke that it was like eating at the food fair at the mall everyday going to a friend's house, but really it was.

As kids, we all got along and played together daily, and we spent time at each others homes, listening to different languages and participating in various customs. It was needless to say, educational and amazing. I know the person I am today is a direct result of the people that I was raised around, and I really am glad they were all there.

You see, in my world in the 70's and 80's you would have smelled Indian food, heard Chinese music, saw Greek flags and spoke English. I believe that because of this I am tolerant, interested, and worldly because of my childhood surroundings...and I have many people to thank for this.

So now, as an adult, living with my own family and friends, I would encourage anyone to re-visit what made you into the human being you are. I bet it was not just your parents, but your neighbors, teachers and friends parent's too!

Thank you to the following families (in no particular order): Wada's, Duncan/Wersta's, Chu's, Kardakaris', Sahota', Bauer's, Naidu's, Nixon's, McRae's, Tomei's, De'Arlieaveria's, Dosanj's...the list is endless.

Because of all of you I can cook a mean curry dish, say "poli-kala" sing a Chinese counting song, bowl, play softball, celebrate Christmas, Dhawali, Easter, etc., and show my kids the beauty of all of it in our Canadian house.

Liz XO

Job vs. Personality...Are You In Your Dream Job?

2012-06-26T21:24:00.000-07:00

Do you ever wonder if what you are doing for $$ is really your ideal job?

For many years I have worked, making good $$ along the way, and I have been fairly lucky with having jobs that I loved. When I stopped liking what I did, I changed it.

Musicians and artists often struggle with this as most of the time, what they love doesn't pay well, or is spurratic. This is not good and should be re-worked to make it a lucrative job.

Many people have re-worked a job idea to include $$ making ideas to change up the way they are paid (think music or book downloads vs vinyl/disc or paper versions). This is not only brilliant, but it will pay off in more ways than one.

An ideal job should not feel like work, but rather a welcome challenge on a task/hobby you like to do, that someone pays you for.

I urge everyone that reads this blog to assess your job:

Do you enjoy going to work most days?
Are you making enough money to warrant your working pay vs. daycare, transportation, clothing costs?
Do you go the "extra" mile if need be at work, or do you require being asked/ordered?
Are you able to express your views in the workplace?
Are you able to be creative if necessary?

There are many questionnaires on the internet that you can take to find out your best job/field for you, but it is always best to find out what type of personality you are first to determine your ideal employment. The Meyers-Briggs Test is an excellent test to take that gives you an accurate understanding of what you are good at, and where you would be best suited to work.

I recently took it myself and found that it was correct for what I enjoy to do. Now, I am considering adding to my $$ making endeavors to enhance my job and personal "loves". Always changing, guess that is the Gemini in me :-).

Keep in mind that kids born today will working in a job in 20 years that has not even been invented yet! Use your imagination, ask your friends...

I recommend that you consider at least taking the assessment. It may be a good place to start.

Get back to me with your experiences and/or thoughts. I would love to hear what ideas and employment you have chosen to spend your precious time on.

Vancouver goes Pop?

2012-06-15T13:58:00.000-07:00

So here we are again discussing the real estate market and the common question that I am often asked..."what do you think the market will do over the next year?"

My answer most of the time is "I really don't have a clue" and the reason for this is that I am realistic and don't think that anyone really knows.

The strangest things have been happening to the market in the past 5 years and I think anyone who says they have it figured out is crazy. No one can really be certain of anything today, least of all in real estate!

To list off some of the events that have affected the real estate market and for that matter, mortgage rates here are the following:

Fall 2008 - American sub-prime mortgage crisis hits with eventual US government bail out
2009 - Worldwide banks affected by US economy
March 13, 2011 - Tsunami in Japan that put a country to it's knees and eventually brought a major immediate need for lumber (hello, British Columbia?) - our natural resources in need = job stability and therefore people start buying houses.
2011 - Asian buyers love Vancouver and send the house prices in certain neighborhoods upward.
2012 - Announcement that CMHC was getting close to hitting their cap for spending allowed by the Canadian Government, therefore seriously affecting their offerings to the banks.

One of my favorite local bloggers here in Vancouver "The Thirties Grind" recently was interviewed on CBC regarding her thoughts on the market here in Vancouver as she often does blogs on the absurdity of the prices here. We definitely agree on the idea that the market is really an abnormality here in Rain City.

Anyway, my thoughts are if you need a place to live, and you can afford the payments with a half decent lifestyle, then why not.

The one solid piece of advice that I do have is DO NOT over extend yourself just to get into a house. It is NOT worth your mental and physical health breakdown if things start to go sideways with real estate.

What are your thoughts on the Vancouver market? Do you think we are in a bubble or not?

Pre-Approval or Rate Hold...what is the difference?

2012-05-24T23:09:00.000-07:00

Due to the sheer size of content in this blog I have also created a vlog that you can watch on my channel on YouTube.

Everyday I speak to people about a mortgage and usually many are confused as to the different financial terms used within the banking industry. A perfect example of this confusion is prior to purchasing a new property, the difference between getting a "pre-approval vs a rate hold". Everyone tells new home buyers that they should "get pre-approved", but what does that mean, and how are you really to do this?

The difference in terms is vast and hence why I feel it an important topic to discuss.

Here is what typically happens...you wander into your bank to do some banking activities and you remember about that "pre-approval thingy" your friends/family have told you to get. You ask the bank teller non-nonchalantly "what are your mortgage rates right now"? Immediately you are told that it would be best to speak to a bank Mortgage Specialist and well, look at that, they can see you in the next few minutes! You are escorted into an office and asked a series of questions about your income and debts (which many times most people cannot pull exact #'s from memory, or for that matter, remember their spouse's income & debts?) From the information provided, they do up a quick "rate-hold" for you so that you don't miss out on that special deal they are offering.

You think you are "pre-approved" and this is where I say to you...Uh Uh Uh, MISTAKE, you only have a rate hold!

Rate hold's essentially are a guaranteed interest rate, for a typical owner-occupied property, that the bank is willing to hold for you for anywhere between 90 and 120 days. The lender usually bases the rate hold on your total income, less your basic debts you have disclosed to the bank. Problem is, there really has been no due diligence done to ensure that you actually qualify for this rate, or that it is for applicable the type of the property you are wanting to buy. This could potentially be a real eye opener at crunch time, when you have an offer on a property and the bank is telling you, sorry, you actually you don't qualify for this low rate. WHAT?

There are many things that can cause a bank to deny your maximum mortgage amount that you thought you qualified for with a "rate hold". Some examples are:

Your debt load has increased since you last spoke to someone regarding financing
The property you want to buy does not qualify for the rate they held for you (i.e. rental property, mobile home, condo that has building envelope "issues", etc.)
The bank's lending criteria has changed and they no longer provide the type of mortgage you need (i.e. low down/0% down financing, self-employed stated income mortgages, etc.)

This is where people are shocked by the process and sometimes feel trapped into just taking whatever will work in order to not lose the house they have fallen in love with.

Now a true "pre-approval" is one where you sit down with a Mortgage Broker or bank Mortgage Specialist, with all your income paperwork proof (i.e. 2 year's recent tax returns or notice of assessment summaries, all your current debt information - car payments, credit card bills, etc) and you sign a consent form allowing the Broker to pull your credit report.

From this total package that is made up for you, the Broker can determine your credit worthiness. This is so much more advanced for serious buyers, so that if you are actively looking to buy in the next 3 to 6 months, you know where you stand with your financing.

Many Brokers will also provide you with a written letter for your Realtor to see so that they know exactly what you can afford. These pre-approval letters are time-sensitive (rates change all the time so the letter will typically have an expiration date on it).

Now some people ask, "why should I allow the Broker to pull your credit now"? Well this is simple, really you don't want any surprises when it comes time to having the financing go through and it also offers you the ability to know if you need to clean up some of your debts before purchasing.

I have many times pulled people's credit reports to find that there are things on there that they were not aware of on their credit report (i.e. outstanding child support payments, utility bills from 4 years prior, etc). I have found that if you face things head on as soon as you are aware of them, you have a far better chance of improving your credit score to qualify for the best rate possible.

A BIG side note I would like to offer you regarding credit...if you go to the bank and have them pull your credit report it is called a "hard pull" or, in effect, will lower your credit score by as much as 5 points for up to 6 months. If you go to multiple banks yourself to shop rates, and give each bank the permission to pull your credit score, you can substantially reduce your credit score and therefore mess up your good credit. Many people do not realize this.

If you go to a Mortgage Broker we do what is called a "soft pull" or a basic credit check that does not affect your score. We can then use this credit score to share with multiple lenders OR to coach you on the best way to improve your rating. In effect, a Mortgage Broker does offer you a far better way to shop for the best rates, without ruining your score and potentially your interest rate savings.

There are so many things to think about when buying, but having the proper information from the start with little to no surprises during the purchase process, can make everyone's life so much easier.

Let's face it, no one wants to have a last minute fiasco happen on one of the largest purchases you will ever make. Spend the time to make sure you are prepared when the time comes and you find the perfect home!

Happy house hunting!

Liz

Rentals...mortgage helper or headache?

2012-05-11T15:24:00.000-07:00

Everyone loves to make $$ or save $$ and recently I had an interesting conversation with a lady in regards to putting in a rental suite in her basement.

She retired last year and now is down to her pension and investment dividends as her income and quite frankly is worried if that is enough income. She has been kicking around the "income suite" idea for a few years now, but has thought it not the best idea having a "stranger" living under her.

Problem is, her basement is HUGE and totally unfinished. It is 1,500 sq/ft of prime real estate and if she doesn't put in a suite, she figures she should at least finish it to increase her property value.

Big issue is the $$ needed to finish this area and hence her phone call to me.

She currently does not have a mortgage and dreads the idea of getting one. This is where I came in with some financial tax facts that she never was aware of that may make this idea far more appealing than initially thought.

Mortgage interest is not tax deductible on a principal residence property in Canada, however if you have a rental unit within your principal residence, you can claim the expenses related to the rental part of the building. Canada Revenue Agency has a Rental Income Guide that explains the formula used under "Personal Portion".

Canada Revenue Agency will also allow you to write off 100% of the repairs and maintenance of the rental, so this is excellent in her case as she can update the suite and write off the entire renovation costs (check with your Accountant for more specifics).

For her taxes next year her Accountant will calculate her rental income collected together with her total income claimed, BUT they will now be able to offset her income with allowable rental expenses (i.e. a portion of property taxes, any maintenance costs, portion of property insurance, etc.).

This makes the rental suite option far more appealing as it offers a way of reducing her income tax payable with the expenses she can claim.

Also, rental suites:

Increase property value as a "mortgage helper" as most buyers are savvy to the idea of offsetting their housing costs with a renter.
Create a source of income from your home.
Help to offset your monthly housing costs.

Really this is an excellent way to use the extra space you have in your home that you would otherwise just have to pay for entirely out of your after tax dollars!

Trick is to get a good solid renter who is respectful and trustworthy. That is totally another blog on how to screen potential renters, but you get the idea.

As I always say, when needing to increase your income, look around first and think about what you already have. You never know, it may be something as simple as renting a room to a student.

Until next blog...

Liz

Another Day, Another Dollar!

2012-03-28T13:01:00.000-07:00

Yesterday I started cleaning around my house and I kept finding change...dime, here, quarter there...you get the picture.

I kept putting it in my pocket with the intention of placing it in our change sorter after I was done. Now you did read this right that we have a change sorter...you know, one of those machines that when switched on magically takes a pile of money and places it into individual paper tubes to create a $$ stack (MY FAVORITE)!

First and foremost, if you have someone in your family, specifically a male, who is almost impossible to buy gifts for, this is an excellent one! Thanks Mom again for this useful gadget.

My husband comes home each and every day, and dumps his pockets out on the bedside table, and it accumulates fast! The little cup that he puts it all in, overflows within a week and then the mess starts. Unless it is placed in the sorter, it ends up on the floor and in slippers, etc. You get the picture!

Anyway, I took all the change I found (including the $$ from the laundry area which is another place that seems to make $$) and placed it in the sorter. After 15 minutes I had stacks of neatly bound cylinders that when counted totaled over $225!

Now at first I thought this could not be right and I re-counted it, but the reality is that in Canada, with our loonies and twonies...the change adds up, and fast!

I bet you that if you went around your home and checked pockets, drawers, piggy banks, etc, you could easily have a paid for night out and then some with just the found $$ that you didn't know you had! Gotta love that.

So my suggestion to you is to do a spring clean, and invest in a money sorter that pays for it self in time saved by you not having to hand sort your change. In the end, you will be pleasantly surprised at the fun you have and the extra moola you have "found".

Happy hunting!

Liz

P.S. As a side, get your kids involved in the $$ hunt...makes it fun for them and also teaches the value of a nickel!

Making $$ With Nontraditional Methods

2012-02-17T12:49:00.000-08:00

With my Brokering Career, I often have to go over people's financials with them and oftentimes, the problem is there is more month than $$ left in the end.

Unless you are independently wealthy, or have married someone who is, you probably have at one time or another run into $$ issues. All kidding aside (I couldn't resist the pic above), this is a serious and sometimes marriage ending BIG problem.

I myself have experienced this same problem and it is daunting to think of options that work:

Get a part-time job
Ask for a raise at your existing job
Sell items from your home

One option that is always a thought is to start a business based on your "hobby".

But what if you don't have a "hobby" that is profitable?

What if you can't think of a way to add income, because you already have too much on your plate (kids, job, husband/wife, ailing parent, etc.)?

I suggest that you look to what you do everyday.

I recently was shown a business by my girlfriend that I thought was genius! The business model is based on a the simple strategy of referral advertising. For me this was perfect as I am time strapped and frankly out of ideas. With my new P/T business all I do is switch some of my grocery budget to a different store online. Then, if I like the products, (which I do), I just refer others to the store too and I am given a profit share from the company!

I wish Tide, Colgate and Kellogg's had given me this option years ago...I would be a millionaire!

Anyway, in the end it works for me, and my family loves the products! Best part is that most of the products are less than what I pay for them in the local grocery store AND they have better ingredients...BONUS!

If you are interested in learning what I do P/T, send me an email and we can chat. No pressure, just friendly conversation about alternatives for $$. lizreid362@gmail.com

If you are reading this and needing some extra income remember..."Coincidence is God's way of remaining anonymous"

Until next blog...

Liz ;-)

The Rate Roller Coaster...Do You Care?

2012-02-09T20:58:00.000-08:00

Do you ever really care about the mortgage rates dropping and climbing as they do?

Should you really pay attention or is there too much in a day to really notice?

Recently BMO blazed a path that has never been seen before...a 4 year fixed interest rate that was below prime! 2.99%

OMG, this was BIG as there has not been this type of fixed rate discount in recent memory. Other banks followed with rate discounts and there was a flurry of activity. Busy, busy.

Having said this, it didn't last very long...2 weeks to be exact! Like a puff of smoke it was over and now we are headed back to rates above prime.

Now first and foremost, it was hard to qualify for the 2.99%, because in order to get the lower rate, you needed to qualify at the higher floor rate (this is a whole other blog). Let this be a lesson in keeping your credit clean and your down payment as large as you can possibly afford....but I digress.

What I am getting at is for the people that did qualify, this meant HUGE savings in 4 years.

One example I personally saw was a client that I have who saved a whopping $9,996.41 just by locking in at the 2.99% vs 3.29% (the new "low" rate)! Not to mention that in doing this, they are able to pay down their mortgage faster with the $$ that they would have otherwise put away to interest. At the end of the day, they were ahead way more than $9,996...but almost $33,000! Crazy what a day makes..and for that matter how amortizations and interest works.

What is the moral of this story, if you are planning on renewing your mortgage in the near future, or have thought of refinancing, it is best to call your local Mortgage Broker a.s.a.p. and have them do the legwork for you to find you the best deal available. (I am always available for a phone call...OK, this is a shameless plug.)

Remember, the Broker is FREE to you and only gets paid when you fund your mortgage with the bank, and not before. They have a real reason for doing what makes you happy and that is many times, saving you $$!

Until next blog...

Liz

Refinancing or Renewing? What is the difference?

2012-01-13T12:44:00.000-08:00

The other day I had a client call me looking to renew his existing mortgage that was coming up to it's expiry date. We started talking about the particulars of his mortgage and the question came up...do you need any extra $$ for debt consolidation?

I explained that now really is the time to do this if he wanted to he would not incur a penalty because the mortgage was already expiring. He thought for a moment and then said "no" but was curious about the process if he did need cash.

This is when I realized that many people do not think of their mortgage as something they can adjust in the event they need $$.

Here is the lowdown in Canada right now. Say you have an existing mortgage that is coming up for renewal.

To be clear, a renewal is when your existing mortgage term is expiring with your bank and you need to do one of three things:

Renew with the bank you have your mortgage at by calling and having them roll you over into another term & rate.
Call your local Mortgage Broker to inquire about rates available at other lending institutions.
Pay off your mortgage all together

Now of the above three options, most people select option #1 because it is convenient and easy at the time. BUT many times it can cost you BIG $$ in the long term.

Why?

Because banks do not always offer you the best renewal rate when you are rolling over from one term to the next.

If you are not paying attention, they can put you into a term that is too long, or worse, give you a rate that is way higher than what is currently available from other banks.

They know and hope that you DO NOT do your homework to see if they are being competitive.

This is more common than you know and a serious argument for people to really do their due diligence!

Now with Option #2, this is usually the best way to ensure that you are receiving the best rate and time of term for you.

I know I am biased when it comes to Mortgage Brokers, but really Independent Brokers spend the time to ensure that you don't get into a long mortgage term that requires a penalty to break...AND they ensure that you are getting the best rate available for your specific circumstance.

ALSO, the best part is that the Broker is FREE to you as the new bank pays them when the mortgage funds! Really a win win situation!

Now with Option #3, unless you have recently won the lottery or have come into some major $$ through an inheritance or other windfall, most people do not have this as an option at all. But in fairness, it is an option so I had to include it.

Now once you have selected your option of what you would want to do, you need to consider if you need more $$.

This could be for a variety of reasons:

Pay off debt
Renovations
Tuition for school
Investments in a business or the stock market
Buy another property

If you choose to refinance (add more to your mortgage) there are a few things that you will have to do regardless of whether you change banks or not.

You will need an appraisal to determine the current value of your property (unfortunately, most times the property assessment is not good enough)
Lawyer or Notary to re-register the new $$ amount on your property title

Both of the above do cost you a bit of $$, of which you can guesstimate the costs and add it into the refinance amount if necessary (your mortgage Broker can help you with this too).

In the end, a renewal is a simple switch into a new property and is worth the effort to investigate your options.

Don't go to all the trouble of getting the best deal on purchasing a property, finding the best rate once purchased, and then drop the ball 5 years later because it was easy.

Really, if you don't fight for the best use of your money, who will?

Until next blog...

Liz

Enjoying the Moment

2011-12-13T10:20:00.000-08:00

This morning I spoke to my Mom on my drive back home from dropping the kids off at school. This is something I do most weekday mornings for the 25 minute drive as I enjoy speaking to people on my hands free phone while driving. To me this is better than listening to the news or flipping radio stations and it keeps me connected to the ones I love.

Today the converstation was about family and the trip to our house for the holidays that she will make. We laughed about stupid things that have happened in the last 24 hours and I also filled her in about the various bad drivers cutting in and around me! Argh! Another blog altogether.

What got me thinking about blogging about my daily phone conversation was I realized how much I enjoy the banter back and forth every A.M. Funny how when my Mom was away on holidays and I couldn't call her as frequently I missed that. I think that in our world today we tend to rush around so much in a fog that we forget to pay attention to the little things until they are gone...then we notice.

We hop in the car and drive kids to school then off to work we go. Busy, busy...then later in the day we rush to the store, rush around shopping, drive home, pick up kids, drive them to soccer or dance or whatever. All the while we are thinking about dinner, birthday gifts, laundry...you get the picture. It is a crazy gerbil wheel that keeps us running all day, everyday.

Women are amazing multi-taskers but do we really enjoy it?

Is there any satisfaction experienced from doing so many things in one day?

My personal answer is NO!

Many times I ask myself at the end of the day...where did the time go?

What did I do again today?

It is all a fog and yet it all seems so important to do fast and efficiently...is that even possible?

I find the most satisfaction I seem to get is the simple stuff...like finding a great book and having the time to read it without interruptions...OR having a delicious coffee and being able to sit and savour it...OR talking with my Mom on the phone about nothing.

These are my little things that make my day better. I think we all worry about so many little things that the BIG ones are lost in the "things to do" list.

So to my Mom, thanks for being a good start to my morning...even if the conversation is all over the map. It helps me clear my head and get caught up all at the same time. God knows I need a little clarity sometimes in this crazy world we live in.

I think we all need to remember that we can only do so much...now where is my list again?...;-)

Liz

Holiday Shopping - Online or In Person?

2011-12-08T11:22:00.000-08:00

Holiday shopping...yes I said it...the dreaded swear words of the season! Argh! Why does it have to involve strategic timing in and out of the mall with secret service style planning to find a parking space?

I recently decided to try to do as much shopping online to save my sanity and time and was pleasantly surprised at the deals to be had and the ease of finding what I needed.
The only worry I now face, is will things show up on time?

Anything ordered from the U.S. for us Canadians can be sketchy as to receiving the parcel in a timely fashion. By this I mean it is s...l...o...w!

This is also coming from a girl who refuses to pay for "expedited parcel delivery"...my thoughts are why should I when it eventually gets here? This did backfire for me a couple of years ago when I ordered something from the U.S. for a Christmas gift on Nov. 28 and did not see it on my doorstep until Jan. 5 of the following year! Whoops! Sorry kids, that was not expected at all.

Getting back to the online shopping, I found one great tidbit that I would like to share and that is the "coupon" box at the checkout. ALWAYS check for the coupon savings. I was pleasantly surprised that all you need to do is to open a new window, type into Google search "coupon code for ___" (insert the name of the website you are shopping on) and then it should come up with various coupon codes for you to insert for additional savings. As an example, I saved the shipping costs on an item I bought (saving me $14.00) over and above the savings I already received from shopping direct online! The lesson in this is NEVER PASS BY THE COUPON BOX WHEN SHOPPING ONLINE...it is there for a reason.

Another thing is check online pricing with 3 or 4 different sites to verify you are paying the lowest price for your item. This can be done by again doing a Google search for the item wanted and mark down the various prices from the different sites. Make sure you give specifics in your search so that you are comparing apples to apples.

As I said, I am thinking the online shopping is an excellent option...you just need to plan ahead a little in order to make sure your items arrive on time.

Happy holidays!

Liz

Honestly, do you need that?

2011-11-28T09:34:00.000-08:00

So here we are again...the end of another year and we are faced with a holliday season fast approaching. YIKES! I can see the credit and debt cards smoking as we speak.

Unfortunately the holidays have become so commercially driven that when the commercials start airing in October (I know, I too have a hard time with this super early airing), we are lead to believe that we "better get our shopping started".

So the real question is...how to keep up with life and all the expenses that come along with living in today's world?

There are several answers and here are some of what I have personally witnessed people do:

Option #1 - Cut back on expenses by being frugal. If your income only allows you to spend "X" then don't go overboard. Really, the question in the end is "Who are you trying to impress anyway?"

Option #2 - Get another source of income. Now I don't suggest doing anything illegal or immoral, but there are options to make extra $$. Most people prefer to work a regular 9 to 5 job, however if this is not cutting it in the income department, then look for a part-time job you can do...say from home perhaps?

Option #3 - Get rid of the expensive items around your home that are killing you in maintenance.

Old furnace - replace it with a high-efficiency one (check with your local utility company for any incentives they may have for energy efficient options).

Vehicles - if your car is old and costly in repairs or a gas guzzler, think about replacing it with a less expensive fuel-efficient option.

Toys - Not the kid type, but the adult vehicles (parked in the driveway for 10 + months/year) that only cost a fortune to insure and run for the short little blasts of use they get. Sell them and free up space and $$. Consider that it may be cheaper overall to just rent when you would like a "fun" weekend on the lake or ocean.

The main thing is to look around your home and be honest with yourself. Why do you need/want this stuff taking over your life?

As a friend of mine once said to me "there are no luggage racks on a hearse"! Ain't that the truth.

Until the next blog...happy holidays!

Liz

Personalizing Your Space...where to start?

2011-10-20T13:46:00.000-07:00

Home renovations...for some people it is the last thought on their mind as they can take over your life for a time, however for others, it can be a time for you to put your style "stamp" on your personal living space to make it "your own".

Recently I was part of the BC Home and Design Show with my husband, showcasing his construction business and in talking to people, I realized that many people don't have a clue where to start!

Here are the basic first 6 steps to consider:

Step #1 - Consult with an Architect or Draftsman to create a design style for your home. This may not be necessary if what you are doing is just paint and floor covering replacement, BUT if you are completing a MAJOR renovation with additions, etc, you will definitely want a plan. Also consider that you will need a design plan to ensure that what you want to do is conveyed to the Contractor and the city permit department.

Some cities require you to follow along with a "street scape" design plan for the community you live in, while others will allow you build any style, as long as it fits onto your allowable lot footprint. This is where it is best to consult your local building permit department for the the details. (A good contractor will do this for you)

Now what if you don't get permits for your renovation? This is something that many people do hoping that they don't get caught. However, you do run the risk of being served with a "stop work order" or even worse, forced to tear down a new structure if it does not meet the allowable guidelines.

The permit process may be long and tedious, but in the end, you have peace of mind knowing that you followed the rules. Also, something to consider if you wanted to sell your property after the renovation, you can declare that all "improvements" were completed with full permission from your local municipal planning department. This shows a potential buyer that you did things properly on the property, therefore conveying a sense of security for them too!

Step #2 - Find a reputable Contractor to get a projected budget based on your plans from the Architect. This can be done by first consulting with your local Builder's Association (in the Lower Mainland of BC it is the Greater Vancouver Homebuilder's Association) They can offer you a list of Contractors based on your needs. From here you will have to do your due diligence with checking websites, meeting with Project Managers, and following up with references.

Step # 3 - Get a budget that works for you. Plan for more than the budget...always. Unfortunately there is always cost over-runs. From a nicer faucet in the bathroom to upgrading flooring, it all adds up and the Contractor generally will offer you a middle-of-the-road estimate, to base costs on. A good Contractor will inform you when you are going over your budget and suggest ways of making it up elsewhere (if possible).

Step #4 - Contact your Mortgage Broker or bank to see about the financing based on the budget. Most lenders that do construction mortgages will require plans and a budget to base their lending amounts on, so again, you will need these in place BEFORE heading to the bank.

Step #5 - Finding an alternate place to live while the work is being done. Believe me, you do not want to live in the house, through a major renovation. This is not smart. Think about it, power and water disruptions, lack of privacy, major drafts from open spaces...the list can go on. Save your marriage and your sanity and move out.

Step #6 - Happy renovation! With a good Contractor, you should have a fairly smooth process.

If you don't like how things are, change it! You're not a tree. ~Jim Rohn

Liz

Oh what a difference 3 years make!

2011-09-27T14:04:00.000-07:00

Today is my wedding anniversary and I woke up this morning thinking about how different things were 3 years ago vs. what they are today.

You see, in September 2008 we were really all still living in a state of optimism, financially wise.

The economy was going well (so we thought), people were looking to the future with great expectations (or at least with a sense of purpose).

No one really saw what was happening until it was too late...no one that is but the BIG banks and some government officials who tried to keep things under wrap until it was no longer able to be hidden.

Then it all went to hell in a hand basket. I went away on my honeymoon and came home to utter financial chaos. Banks closing, major financial firms looking for financial protection from imploding...SCARY STUFF!

What have we learned 3 years later? I think quite a bit.

Trust of the BIG banks has gone out the window by the consumer and due dilligence is the name of the game.

Think about it...getting finances in order is at the top of the media mantra that we are fed every night in one form or another.

Credit card interest rates, mortgage rates, bank fees, financial scams...they are all at the top of the news feed each and every night.

This is a good thing as from what I can see, consumers are far more aware of what is going on with their own finances as they are reminded daily of the pending doom if we are not. We are forced to look at our own reality.

The new question being raised lately, at least here in Canada, is are we headed for another round of the recession hit?

I believe that we will see a slow slide downwards as it is apparent how much the world economy impacts our Canadian one. We are all in this together, whether we like it or not and it is obvious that we have created a global economy that cannot be fixed by one government or type of bailout.

Where does this leave all of us?

I believe better off, as how do we are humans learn? By mistakes of course. If you don't make a mistake, you never learn a lesson.

As I have said before, and I will say it again:

Stay on top of your finances
Pay your debt down as fast as you can
Save for a rainy day

Hold on for the financial roller coaster and ride it out as best as you can.

We will come out better in the end, maybe I am an optimist but I just know it.

Liz

Grade 8...GULP!

2011-09-12T22:33:00.000-07:00

So school went back in last week and it was a BIG year for my son. Grade 8 is here and it was hard for me to have him get out of the car at the High School by himself to start a new chapter in his life.

Having said this I think it was more my "stuff" than his.

You see, Grade 8 was the worst year for me. It seemed that everything in my life went sideways...parent's separated, friends went wild, I was bullied, you get the picture. It was not one of my best year's.

Funny though, when I think back, it was not all bad.

I really dove into my schoolwork and for the year, had one of my best years for marks...virtually all A's and B's across the board. I also played on the school softball team and made some friend's (finally towards the end of the year), but generally I remember it as being one of the toughest times in my life.

I really believe, that what doesn't kill us, will certainly make us stronger.

When I think back to 1985-86, I remember that one of the big things that I did was focus on what I could control...my marks, my health and my internal voice. I never doubted that what I chose to do, would happen for me with a little effort.

I believed in me.

This was something that I lost later in years, but I am getting it back again.

In struggle, weather it be with family or friends, body weight or shape issues or in money problems...If you believe you can do it, you will.

Remember: It ain't what they call you, it's what you answer to. ~W.C. Fields

Liz

Investments & Deferred Sales Charges - What are they anyway?

2011-08-18T14:19:00.000-07:00

Doing your due diligence with purchasing investments is a must! Know what you are signing up for, before it becomes an issue.

Things such as "deferred sales charges" or DSC's can sometimes lure financial advisors to place you in those funds as they get paid more $$. Also, the client is forced to stay within the fund for a set term period (usually between 5 and 7 years), so this typically keeps the client with the advisor for a longer period (this is good if you are happy with the person, but not so if you are dissatisfied).

If you are bad with $$ and want someone to police where and when you remove the $$ then the incentive to not pay a penalty may help you leave the money alone...otherwise it can tie up your funds if you have an emergency or would otherwise like to move your money elsewhere.

Think about it, most people would like to have control of their money. Being as liquid as possible can be a good thing. You never know what life has in store for you (i.e. illness, job loss, etc). Also, what if the funds you have invested in start to nose dive, would you not want to move your $$ so as not to lose any more than what is already gone?

Don't get me wrong, you can move funds that are in a DSC account, but they charge you, and it is BIG. Typically it is a sliding scale...year one 5 to 6%, year two 5 to 4% down to year 5 at 1%, but this is still $$ that comes out of your profit (if there even is one).

In essence, you are putting your money in the hands of the fund manager and trusting that in the next 5 to 7 years they are watching it and making sure that all is well.

What I worry about is that who EVER has met a fund manager personally? Most of the time we meet our financial advisor, but never the person that is physically calling the shots on the funds you are invested in. This is a really scary thought when you consider that if you invest with "conditions on the investment" you may end up taking a larger loss than expected (because of penalties).

I guess the best thing to do is to ask your advisor the particulars of the funds you are getting into and if they have deferred sales charges. Advisors have to get paid somehow, but the question is, how do you want to pay them, when you really need the $$ and are forced to pay a penalty to do so, or on the front side. I think this should be a conversation that is more frequent with clients and financial planners than it currently is.

What you know, may save you hundreds if not thousands of $$.

Knowledge is power.

Until the next post,

Liz

Investments are down, but so are mortgage rates...

2011-08-09T13:26:00.000-07:00

So the news is out, and the sky is falling (so to speak). The stock markets are crashing and it appears that some people are panicking....again.

Why?

Well, really in Canada, the only reason you should be worried is if all your money is in stocks and you need to be liquid very soon (code for cashing out).

Is this 2008 relived? Maybe, but it may be the chance of a lifetime to make some serious moola!

Obviously this whole thing is a mess if you live off of your dividends from your investments as most of them are going pear shaped. However, if you are smart and have some extra $$ floating around, it may be the best time to pick up a great deal on some stocks.

Having said this, DO YOUR HOMEWORK and don't just buy what your friends are telling you is a good deal.

Warren Buffett, one of the most successful investors in the world, buys at times such as these...and he '"buys what he knows". What this means is he buys stocks, and for that matter, companies too (let's face it, he's rich), that he himself uses everyday.

I think this is very smart.

Think about it, if you yourself are buying an Apple computer, how many others are also doing the same? It makes sense to support companies that offer quality and staying power (for at least sometime anyway). Why not invest in the back end too?

Now the next question to answer is how to invest? Really there are many options, from talking to an Investment Advisor to opening your own self directed stock trading account. Here is a link to a Canadian Money Blogger that compares the different stock trading accounts available.

Don't overextend yourself, but realistically put in what you don't expect to get back right away and see what happens.

As for mortgage rates, the fixed rates are based on the bond market (falling with the stocks). There is an expectation that the 5 year fixed rates, will drop below the 3% range (it has NEVER been this low).

This will be excellent for home buyers looking to save the most amount of $$ on interest.

The savvy homeowner should also consider a refinance once the lower rates come in. The savings of a lower interest rate could be substantial compared to what their current interest rate is.

Also, re-negotiating your mortgage can offer a way of paying your mortgage off faster. By budgeting a higher mortgage payment (based on a regular interest rate of 4% or more) and then having that extra $$ go directly onto the principal equity. This can really be painless if you are already used to paying a mortgage payment based on your current higher interest rate.

If you have questions about possibly re-negotiating early on your mortgage, or would like to be put on my "Weekly Rate Minder" email, please drop me a line at: lizreid362@gmail.com and I will add you.

Happy investing!

Liz

Lessons from Mistakes...again!

2011-08-06T13:07:00.000-07:00

Mistakes. I seem to talk a lot about them, but really the reason why I mention them is because we all make them and we can all do something really profound once we realize that they have happened...we can LEARN.

Learning as described in Wikipedia, is acquiring new or modifying existing knowledge, behaviors, skills, values, or preferences and may involve synthesizing different types of information.

When a mistake happens, as a result of our actions or someone else s, we automatically tend to look for ways to blame or detract from it and in doing so, we tend to miss the big gift that is being given, the LESSON.

Wether in money, mortgages or life (as my blog is titled), mistakes can be valuable and even priceless!

So, why do we hate making mistakes? Well, I believe that when you make a mistake, it tends to cause harm in some way, whether physically or psychologically. This is why we shy away from it as it is usually painful.

BUT, what if we stopped for a moment after we have realized that a mistake is made and really looked at why it happened, and what we could learn from it.

Would we not improve on a bad situation?

Would we not change our views or possibly other's views as well?

Does it not show that we are trying something new, and not every time does it work perfectly right out of the gate?

Einstein believed in making mistakes daily.

I think we all need to appreciate mistakes for what they are and take into account that not all things that are initially painful are bad.

No pain, no gain.

"Forget mistakes. Forget failures. Forget everything except what you're going to do now, and do it. Today is your lucky day." - Will Durant

All the beast...I mean "best" for a great weekend!

Liz

Life Liberation

2011-07-15T16:03:00.000-07:00

Yesterday I watched a video called the "Gifts of Imperfection" by Dr. Brene Brown and it opened my eyes to, as she puts it, "the idea of living with courage, compassion and connection".

As a chronic "over-achiever" and "perfectionist", it was a rough thing to have to listen to, but at the same time very liberating. I have been wondering for some time now, when I could get off the wheel and start to care less about the little things and more about the BIG stuff. You see, I feel, and so does Dr. Brown for this matter, that our society dwells too much on how our exterior is set up (i.e. clean home, kids over scheduled and how our body shape looks to the discerning eye) that we miss the great stuff that life has to offer (i.e. going on the sunny destination trip with our spouse even if we are not the perfect bikini body).

I so relate to this as I am always worried about what other people think. If I don't look good all the time (God forbid I tear off to the market and get caught by someone with no makeup on) OR act a certain way (happy all the time...heck, this is my trademark) that people will think that something is awry with me.

I don't know about you, but I certainly don't have a great day, everyday...but believe me, you would never know it. I always have my game face on and many times it is exhausting!

So after watching this video, (which by the way my beautiful Mom sent me...thanks Mom!) I realized that I need to sit down and do some serious internal housekeeping.

I have always loved to write lists at the beginning of the year for things that I would like to achieve for the year (can you say type-A personality), however these lists usually end up complicating things further. So this time around my list will be about the important stuff that is not geared around things, but more around experiences and family. I am sure that the two lists will be completely different and most likely life altering.

Think about it...how different would your life be if you did things out of pleasure vs. shame or guilt? Does it take some major illness to realize that we need to live from a place of happiness? I hope not.

Go out, have fun, and don't sweat the small stuff.

As my old neighbor Reg used to say..."Who is gonna care in 100 years anyway?"

Have a great weekend!

Liz

Promoting the Bottom Line

2011-07-12T18:21:00.000-07:00

Doing business with someone, or referring business to other entrepreneurs is different more than ever.

Case in point is the picture above. Funny as it may seem, it is a reminder of the reasons why people should always get to know their business associates before referring a client.

Getting to know someone is important for so many reasons and just because the business card was cool or the website flashy, does not mean that the person is professional and knowledgeable in their line of work.

The problem is that we are well past the days of knowing the local butcher or hairstylist and referring people to them. Even small town Canada/USA has gone big time with the internet and professional marketing programs. It is really hard to know who to trust.

We live in a very transient, and for that matter, solitary world. Many people work well away from home and usually don't know their neighbours very well. I can imagine that if you asked your friends about their neighbours, not very many of them would know what it is that they do for work...let alone refer them business/work.

Unless you drive around in a vehicle plastered with your company logo and contact info (guilty as charged), I think most “casual” acquaintances wouldn't have a clue what you do to make $$.

Is this really important? My answer to this would be ABSOLUTELY!

Your business/job is a large part of your family life. If your income is down because business is slow, this impacts more than just you. Your kids and spouse feel it too with the smaller paycheque at the end of the month.

I don't mean to be obnoxious and in someone's face about your product or service, but a gentle reminder now and again is never a bad thing.

Also, whether you own a business or not, getting to know people that surround you on a daily basis can be rewarding and also enlightening.

Consider this, “networking” with your acquaintances can be an excellent way to market yourself and your professionalism to an audience that is not just the person you are speaking with, but to all their contacts too. This is the power of compounding.

Just like the “Six Degrees of Separation” theory that refers to the idea that everyone is on average approximately six steps away from any other person on Earth. The thought is that a chain of, "friend of a friend” statements can be made, on average, to connect any two people in six steps or fewer.

Think about breaking out of your comfort mold and introducing yourself to the local barista or cashier at the grocery store. You may find that a simple conversation can lead to more than just idle chatter.

The in the movie Stand By Me, the adult character played by Richard Dryfuss said it best... "I never had better friends than the friends I had when I was twelve. Jesus, does anyone?" I think the observation is made because as we get older we become jaded and less trusting to learn more about someone. Maybe we need to go back to that place that is curious and adventurous in all of us? It may just pay off.

Liz

Summer Imagination...Fun in the Sun!

2011-07-05T15:38:00.000-07:00

As the summer has now finally come upon us, we wonder what there is to do for kids to stay busy.

My two are 11 and 13 and this is particularly difficult as they are "too cool" for some things and yet are not old enough too work to keep themselves out of trouble.

A big thing I am doing this summer is keeping them from sitting in front of the TV for hours or worse, playing video games non stop from morning until evening. It is one of the things that has happened to our world that is quite sad...we kept our kids inside for fear of "strangers" only to have them become sedentary and otherwise hermits in their own homes.

For my family I have decided that this summer is going to be full of games, crafts and lots of outside fun.

Here are some of the activities we have come up with:

Painting - this one is my Mom's favorite. We went to the dollar store and bought inexpensive acrylic paints ($1.00/color), brushes ($3.00 for a multi-pack set) and canvases ($2.00 and up) to paint on. We could have used paper too, but at the older ages, I find that they like the adventure of painting on something that is more permanent and cool. Why not have them create a gallery for their rooms to show off to their friends?
Shooting a Video/Movie - We have friends who's daughters are amazing at this. Have your kids write a script, prepare the props/costumes and then shoot with the video on a camera. They can then download and edit the videos with the home computer (Mac has a great software program called iMovie that is easy to use).
Board Games - There are so many board games that can go on for hours and this can really help the day go by. Here are some ideas by type - for the adventurous: Settlers of Catan, or for helping with math and learning about purchasing property: Monopoly, or for expanding your English vocabulary knowledge: Apples to Apples.
Reading a Novel - this is a great time of the year to catch up on your novels that you were unable to finish or just have never had the time to start.
Swimming - Cool off from the heat at the local pool or beach and enjoy the exercise that comes with playing in the water for the day. Don't forget your sunscreen if you go to the beach!
Lemon Aid Stand - Home based marketing at it's best! At first I thought my daughter was nuts to do this, but she got together with the neighborhood kids and at .50 cents/cup (they had BIG cups) they made $23.00 for the day! Not bad considering we do not live on a main street.
Play an Outdoor Game - This was my entertainment as a kid...get outside and figure it out yourself. We did though, and the great thing was we made up different games with our imaginations! WOW, remember those? We played "War" with pine cones as grenades, and sticks as guns. If you got "hit" you had to lie down and count to 20 before you could participate again. We also played street hockey, baseball, tennis, basketball, etc. Those were the days when I never worried about what I ate, because I was always running, playing, etc. We need more of this nowadays.
Bake and Cook - This is good to do on cloudy/rainy days that do not really make for great "outing" days. Look up an old recipe from Grandma's cookbook or try something "gourmet" to serve for dinner. Create a "theme dinner" for the whole family to enjoy the fruits of your labour. Just be careful of the stove and oven and ask for help if needed.
Build a Fort/Clubhouse - This is great to have kids do in an area that they can leave it up to decorate and play in...(Rec Room, Back Yard, etc)
Create a Garden - Start a vegetable garden from scratch in a planter on the porch or in a small plot of yard space. Try to grow things that you can eat and use in your new "recipes" that you can serve proudly to your family for snacks or meals.

There are so many things, outside of structured camps and activities, that you can do without having to watch TV. Use your imagination and the sky is the limit. Just be safe and ask for help when you need it.

I am enough of an artist to draw freely upon my imagination. - Albert Einstein

Happy summer everyone,

Liz

Closing Costs...HUH?

2011-06-22T18:01:00.000-07:00

"Closing costs...what the heck are they?"

As an Accredited Mortgage Professional I get asked this all the time when I am explaining to home buyers about costs involved with purchasing a property in the province of B.C.

Many people are ill prepared for the "extra" money they need to come up with in order to buy a house. Here are some of the key things to remember to include in the $$ savings budget so that you have enough to complete the transaction.

Property Purchase Transfer Tax
If you are a 1st time home buyer and are buying a home that is $425,000 or less, this does not apply to you as you are exempt. Also, if you are getting divorced, and have been legally married (or common law) for 2 years or longer and have a separation agreement in place, you are also exempt*. (*Always a good idea to check with your Lawyer for current details.)

For those who do not, this is a BIG $$ cost as it is one of the largest expenses at closing. The British Columbia provincial government currently imposes a Property Transfer Tax or PPT which must be paid on closing when a property is legally transferred to a new owner. This also applies if you are buying out a partner in property, that is not your legal spouse of 2 years +.

PPT is calculated as follows:

1% on the 1st $200,000
and 2% on the balance of anything over the $200,000

If we do the math, this can equate to substantial $$ cost. As an example, on a house costing $500,000, the PPT will cost $8,000.! If you were not expecting it, this can be a HUGE surprise that is not a good one.

Harmonized Sales Tax or HST
If you are purchasing a newly built home in B.C., you may be subject to 12% HST on the purchase price. (Subject to change to a lower tax % if the BC HST referendum passes)
NOTE: Sometimes Builders will build it into their pricing so check to ensure that the HST is not over and above.

Legal Fees
In B.C. only a Notary or a Lawyer can transfer real estate ownership and act on your behalf during the completion of your home purchase. Solicitor fees usually start anywhere from $850 an up.

Appraisals
When you purchase a home, most banks want to ensure that you are paying the "market value" and therefore require an appraisal, which is done by a Licensed Appraiser. Approximate cost is $300 and up.

Appraisals can be waived if you are applying for a "high ratio" mortgage or have less than 20% down payment. Only then, the "default mortgage insurer" (ie. Canada Mortgage and Housing Corporation or Genworth) will do their own "in house" appraisal and you will not pay for this.

Property Tax Adjustment
If you purchase a property that the current owners have already paid the full year's property tax to the municipality, you will have to reimburse the sellers for your share of the year's taxes. Your Solicitor should be able to give you this figure before closing.

Home Inspection
Not required by any banks but smart if you are not a professional tradesman, etc, a Professional Home Inspector can come out and go over all the fine details that you may have missed in your initial "walk through viewings" (ie. checking the roof and inspecting the plumbing, heating, etc). This can run up to $400 +, depending on the size of the property, etc.

Survey Fee
On a detached house, most banks require a survey certificate to show that the home and buildings on the property you are buying is compliant with local bylaws (strata properties are exempt). If the seller has a property survey that is still current you can use this existing supplied survey. However, if the property has had new buildings placed on it, or has changed existing buildings (ie. done renovations, etc.) then a new survey must be done. This can cost roughly $330 and up.

Fire Insurance
All lenders insist that you have fire insurance in place to cover the replacement of the structure and it's contents. This will have to be arranged so that it is in effect immediately upon your possession of the property. Check with your insurance agent for pricing.

Moving Expenses and Utilities
If you are renting trucks or organizing for professional movers to come in, you must budget for these costs. Keep in mind that the end of the month costs more to move as they are "peak" times where movers can charge more $$.

Utility companies typically charge hook up fees to start a new service or transfer and existing. Remember to call all the various companies to switch the service into your name and cancel any existing.

Miscellaneous Costs & Upgrades
There are always things we forget that come up at the last minute. Best to consider that you may have to paint, replace window coverings, replace appliances, etc. Ideally you should always budget to have a $1,000 or more for just incidentals.

The above is a lot to remember and I suggest that you print off this blog or write it down and make notes as you complete each item to track your $$ spending.

Organizing yourself for the expected costs can allow you to prepare for more exciting things like making your new house a home.

Remember...WD-40 makes it run and duct tape makes it stop! LOL, gotta love Red Green.

Liz