5 things you need to know about mortgage brokers
1. A mortgage broker works with a variety of brokers to find the best mortgage and rates for your financial needs.
2. The best way to find a broker is through word of mouth.
3. Make sure your broker is flexible and works with a variety of financial companies. David Moulds, an independent financial adviser in Edmonton, says this is beneficial because not all lending institutions have the same criteria, not all financial institutions have the same products or services and everyone has different needs and wants.
4. Ask for multiple references and make sure the broker is licensed.
5. As long as you are flexible on which trust or financial company takes on your mortgage, a mortgage broker will find you the best mortgage product to fit your needs.
by Sara Ditta
4 ways to benefit from changes to the registered education savings plan
1. The annual $4,000 contribution limit has been eliminated.
2. The lifetime contribution limit has jumped from $42,000 to $50,000 per child for 2007 and subsequent years.
3. The cap for annual contributions that qualify for the 20 per cent Canada Education Savings Grant has increased from $2,000 to $2,500, resulting in an increase in the grant from $400 to $500.
4. Part-time students with at least 12 hours of class per month will be able to withdraw up to $2,500 per each 13-week semester from their RESP.
by Andrea Davis
2 ways to check your credit rating
Your credit rating is an important tool for qualifying for loans or credit and provides a picture of your financial health. Check your credit report once a year to confirm the accuracy of your personal and financial information, such as your loan payment history. It's easy to do. Here's how.
1. View your credit report online with Canada's two major credit-reporting agencies: Equifax (www.equifax.ca) and TransUnion (www.transunion.ca). Equifax charges $15.50 for the online service; TransUnion charges $14.95.
2. For a free report send in a request form by mail (the form is available online) with photocopies of two pieces of identification. You'll receive a full report in the mail in about two weeks.
If you spot any errors, contact the agency and correct the information. By doing this you can also make sure that you have not fallen victim to identity theft.
by Sara Ditta
3 ways to save on car insurance
Jean-Pierre Gagnon, director of underwriting and actuarial services at the Canadian Automobile Association (CAA) South Central Ontario, recommends the following tips to get you driving with more money in your pocket.
1. Check the cost of insurance before you buy a vehicle. High-end cars, such as sports cars and SUVs, have higher premiums because they're more likely to be stolen.
2. Choose the highest deductible you can afford. Insurance rates cost less when you choose a higher deductible. If you have an older vehicle, consider the vehicle's value versus the insurance costs. You may want to drop certain coverages, such as comprehensive and collision.
3. Take advantage of discounts by combining auto insurance with home insurance or by insuring more than one vehicle with the same company. You may also be eligible for discounts if you're a member of an automobile association, part of a professional organization, an alumni from a particular university or if
your employer has an arrangement with an insurance company.
by Sara Ditta
Page 1 of 3 - Read page two for tips on buying a new home!
10 tips for first-time home buyers
1. Start by finding a realtor. Look in the phone book or online or ask friends. Ask realtors for references, experience and success rates, and be sure you feel comfortable with the agent. Your realtor should be well-informed about every aspect of where you're looking for a home, such as the attributes of neighbourhoods, schools and community groups, and have experience negotiating deals in your price range.
2. Apply for a preapproved mortgage, which is usually good for 90 days. This will set your maximum mortgage amount and interest rates, so you can set your budget before house hunting. It also lets the seller know you are serious about buying a home.
3. Budget for extra expenses, such as moving, new appliances and utility hookups. Moving costs vary, but the average is about $500. Utility service charges for electricity and phone will total about $150 to $250. Add appraisal fees, title insurance and survey costs to your budget as well.
4. Prepare for closing fees. Andy Kloppenborg, a realtor in Winnipeg, recommends you put four per cent of the price of the house aside for closing costs, such as land transfer taxes.
5. Consider using the federal government's Home Buyers' Plan for first-time buyers to increase your down payment. It allows you to take $20,000 out of your RRSP tax-free and gives you 15 years to pay it back.
6. Buy the home you can afford. "You can't enjoy life if every cent you make is going toward paying for your first home," says Kloppenborg. While five per cent is the minimum down payment, putting more down reduces your costs. A small down payment leaves almost no equity in your home; if it's less than 20 per cent, mortgage loan insurance is often required, which leads to additional costs and higher interest rates.
7. Avoid hidden costs – and headaches – with a home inspection. It's worth the approximately $350 (though costs vary depending on house size) to get the house checked out before you make the commitment. Your real estate agent will advise you on how to make your offer conditional on the inspection. Find an inspector through an industry trade group, such as the Canadian Association of Home and Property Inspectors (www.cahpi.ca).
8. Make an offer only if you're serious. Wait to make an offer until you've seen several houses, and it should reflect current market conditions. Other factors to consider are the seller's needs, such as the closing date, and your budget.
9. Keep your emotions in check when negotiating because they can lead to impulse buying. Be prepared to walk away if a bidding war drives the house out of your price range.
10. Pay for furniture now, not later. Deferred payment plans at furniture stores are helpful only if you pay the bills before they come due. "If you don't have the money to buy furniture, don't buy it,” says Steven Westman, an account executive at the Winnipeg branch of Money Concepts, a financial planning company. "Live without it or buy used furniture until you can save up."
by Sara Ditta
Page 2 of 3 - Read page three to learn how to track your expenses in minutes!
6 ways to track your expenses in minutes
Tracking expenses helps you become more conscious of how you spend your money, but time is the biggest obstacle. Who has the extra minutes to jot down the cost of a coffee or magazine? The trick is to rearrange some of the ways you manage your finances. By taking the time to set things up right, tracking your expenses becomes a 15-minute-per-month task. Here's how.
1. Use cash as little as possible because you don't get an automatic paper trail of where you spent your money; use your credit or debit card instead. If you use your credit card wisely and always pay off the full amount by the due date, then using your credit card will avoid debit card charges. Otherwise, use your debit card. The small additional fee will be worth it if it helps you track your expenses.
2. Have fewer accounts. The fewer places you have to get your financial transactions from, the easier this process becomes.
3. Opt for the statement option with cancelled cheques on your account. This provides more information than a passbook.
4. Pay your expenses consistently the same way. It's easier to track how much you spend on food for the month, for example, if you always pay for your groceries with the same bank card.
5. Take advantage of online technology, such as paying bills. This allows you to easily retrieve your information.
6. Use accounting software, such as Quicken. You can download your financial transactions into the software. With most of your entries, all that's left to do is click and confirm the category, such as food. Print and read the report each month.
by Johanne Gauthier
You really can live on less money – here's how.
Page 3 of 3
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