 | ||||
 | ||||
The deadline to make contributions eligible for deductions on your 2011 income tax is February 29, 2012
The RRSP was introduced by the government to encourage Canadians to save for their retirement. The contributions are tax deductible and the growth is tax deferred, you will pay taxes when you withdraw at retirement.
RRSP contribution limit is the lower of 18% of your earned income or $22,450
IF you are Buying there are a few things that you need to remember to do. Here is a short list of some of those things:
Remember to schedule a “pre-closing” visit to conduct a final run through inspection of your new home. This is done to ensure that the home is in the same condition as it was upon signing the offer. You may also want to look into conditions of the offer that you may have added such as replacing window, screens, fixing cracks etc.
Remember to speak to your lawyer a few days before closing to avoid any surprises. Ask your lawyer about the Statement of Adjustments if there is one. Ask about Title Insurance as well. Your lawyer can order title insurance for you. This is important to protect your property against any title defects, survey issues, work orders and fraud when you own the home.
Remember to arrange for Fire Insurance. This is important to have for the full replacement cost of the home. If you are buying a condominium unit you will need contents and liability insurance.
Remember to call your cable, phone and internet providers a few weeks before closing to ensure that you have booked a date to install your services that meets your needs.
Remember to call the utility company as well. Ensure that they read the meter on the day of closing. That way you are only responsible for any charges after you move in.
Are you moving to a condo unit? If so have you remembered to book the moving elevator? You will have to call property management a few weeks before the move in date to ensure that you get the date that you want.
Closing day can be stressful enough without having to worry about the surprises that may come with it. This list should help you feel more prepared and ready to close and enjoy the purchase of a lifetime !! Contact me today for a full moving checklist or for more information about your closing day!!
If you want to know how to pay off your mortgage sooner…..you are not alone! Clients ask all the time, what would you suggest to help me become mortgage free sooner?
Here are some great ideas:
1) Always Compare Rates and Mortgage Products
According to CAAMP, only 10% of people get 4 or more quotes before getting a mortgage. On the other hand, some people get so absorbed with getting the lowest rate they end up with a no frills mortgage that has very little flexibility in the way of privileges. By getting a trusted mortgage professional on your team, you will have access to all of the lenders products and rates available. This allows you to get many quotes with only 1 credit check which is an important reason to work with a good mortgage broker.
Finding a low mortgage rate with full privileges will save you thousands over the course of your mortgage.
Here is an example: Based on a 300,000 mortgage
Bank Rate 5 year fixed ( 25 year Amortization) 4.24% – Total interest $ 185,201
Broker Rate 5 year Fixed ( 25 year Amortization) 3.52% – Total interest $ 150,294
Total Savings: over $ 34,000
2) Adjust Your Payment Schedule
Switch from Monthly payments to Bi-weekly accelerated payments!!! Instead of making 12 monthly payments you will have made 26 bi-weekly payments at the end of each year. This is the equivalent of 1 extra payment per year!!
3) Make Lump Sum Payments
This is an easy one that many people forget to take advantage of. Think about this if you make 1 Lump Sum payment of $1000 each year of the life of your mortgage you will save over $10,000 in interest. Keep in mind that when you make a lump sum payment, the money goes directly onto your principal amount, helping you pay off your mortgage sooner.
4) Stop…Don’t Sign That Renewal Letter
Yes it might be easier and more convenient at the time, but your renewal letter does not always offer you the best rate. By shopping around again or getting assistance from a good mortgage broker who will do this for, you will go back to Step 1 and get a great rate with a great product. If you want to learn more please click on this link to read my blog post on Renewal letters.
So now that you know the steps, contact me today to learn how I can assist you in finding the right mortgage product and the right rate for you to save you thousands and help you become mortgage free sooner!!
Have you ever heard of the term “Debt Fatigue” ? This term is used when someone in debt stops making payments on his or her debts and starts spending again after being overwhelmed by the amount of debt already incurred. This is a feeling of complete overwhelm by the amount of debt incurred and a feeling that he or she will never be able to pay it off. Here is the kicker……Debt fatigue commonly leads to a declaration of bankruptcy.
So how do you combat “debt fatigue” before it even starts……..
Tip 1 – What is Your Total Debt? Figure it out.. what is your total debt owing? Add up all of your statements and interest rates for each and total it up. Look at that number, as hard as that might be and own up to it!
Tip 2- Plan to Fix it- Change Your Mindset. Think about what getting out of debt means to you. How committed are you to getting out of debt? Is this something you really want to do and if the answer is yes… You can do it!
Tip 3- Have a Goal- Now that you have owned up to your debt and resolved to make a change, you need to make a goal. I want to be out of debt so that I can ………. What is it that you want to be able to do? Buy a home, go on vacation, save money, contribute to RRSP etc…
Tip 4- Get down to it! – A good rule of thumb according to many experts is Do not take longer than 3 years to pay off your debt. This is where debt fatigue begins to set in. Do try and base your repayment plan on a 36 month timeline or less.
Now…….How to Start Paying Down Your Debt:
1) Set Your Budget and Stick to it. – Now that you know what all of your debts amount to, you will know exactly how much you owe to each creditor. You now have to look at your spending habits (yes all of them) and cut them down and cut them down again.
Ask yourself if your current income is enough or if you need to make some extra money? If the honest answer is I need to earn some extra money, consider a part time job. Even 2 nights a week can bring in an extra 100-120 dollars a week. That amount to $400 at the end of the month for bill repayments. If you do not think that is an option consider other avenues such as having a garage sale, walking some dogs in the area, babysitting, etc…
2) Get Your Interest Rates Lowered … Sound impossible, its not. If your credit card debt is $5000 and you are paying 21% interest, it will take you a long time to pay off that debt and you will pay tons in interest alone. Consider moving that debt onto a line of credit where you are more likely to be paying 6%. This alone will save you hundreds.
3) Decide what you will Pay off each Month. – And stick to it!! Instead of paying the minimum balance for the next 5 years try deciding on a larger amount to pay monthly and chip away at the higher interest debts first. Add an extra $25 dollars a week into your bill repayment and you will see the difference it makes in paying down your debt sooner.
4) Don’t Forget to Reward Yourself for Sticking to the Plan- Check your progress every single month, mark down each day that you made a payment with a star on your fridge… you will feel so much better! Go ahead and treat yourself to something small every ^ months to keep yourself motivated.
Remember…. You Can Do it!! With a little sacrifice and determination you will get out of debt and feel so much better.
Best of Luck on your journey to financial freedom!
As you may have heard a record number of condos have been sold over the last 12 months. More condominium projects are being launched everyday all across the Greater Toronto Area.
Here are some of the latest numbers:
Very interesting numbers!!
Contact me today for more information on applying for a mortgage for your new condo purchase.
It is that time of year when many Canadians are finding time to escape to cottage country every chance they get. Have you ever considered buying a cottage in Ontario? There are many reasons to get your financing in place before you start shopping.
If you are at the stage of seriously considering purchasing a cottage or a vacation property…there are some things that you should know about financing a vacation home in Ontario.
Cottage financing and mortgages are looked at differently then primary owner occupied mortgages!!!
Financing Recreational Properties in Ontario:
There are generally 2 types of cottage properties:
Type A is generally year round with central heating and road access. Type A properties are zoned as residential, seasonal or rural. Type A can be financed up to 95% of the property.
Type B properties are homes that are generally seasonal and central heating is not required. Seasonal road access is also permitted. Type B can usually be financed up to 75% of the value of the property.
If you are considering building your dream cottage or buying the cottage of your dreams, I have access to dozens of lenders that specialize in cottage financing with low rates to make your dream a reality.
Contact me today for more information and make your dream a reality!!
I have seen it time and time again, your mortgage is coming up for renewal this year and you start to think about what you want to do. No one really wants to think about their mortgage as it is a huge financial obligation. So you are probably looking for a quick solution to renew your mortgage and forget about it for another term. As you are thinking about your options, you get a “Renewal Letter” in the mail from your lender/bank. So many people just think it’s easier to sign it and send it back which gives them a mortgage for another 5 years. Are we really that opposed to shopping around?
Big Mistake!!! Let me tell you why. Odds are that even though it may be a good rate- it may not be the BEST rate that you can get. Banks are known for making themselves seem like the best thing around. Here is a breakdown of the famous Renewal Letter. It starts off by thanking you for your business, then it tells you about their posted rate, something like 5.69% . But since you are such a great customer, we are offering you an amazing rate of 4.04% if you reply in the next 10 days. Sound familiar?
Sounds like a good deal doesn’t it? And it is a good deal, but it is not the best deal. Don’t you deserve the best rate you can get? Recently a client of mine, received this letter in the mail, using those exact figures. The best part of this story is that as they showed me this letter they got, I was handing them a commitment for a rate of 3.69% with a different lender and all of the same privileges as their original bank was offering them. The only difference is that my rate saves them thousands of dollars in interest over the term of their mortgage and has a smaller monthly payment.
Moral of the story: it pays to shop around!
I do all of the shopping around for you. I have access to dozens of lenders all fighting for your business. Allow me to get you the mortgage rate that you deserve. It will be simple and painless!
What exactly is a Tax-Free Savings Account?
The Tax Free Savings Account is a way for Canadians to set money aside Tax Free throughout your lifetime. Contributions to a TFSA are not deductible for income tax purposes. The initial amount contributed as well as the income earned in the account (ie: investment income and capital gains) is Tax Free even when it’s withdrawn.
What you need to know about TFSA’s
1) Tax Freedom
Just as the name says- this account stays tax free forever, so you can invest in interest bearing options like GIC’s and bonds and use the account to shelter investments that would otherwise be taxed at a higher rate.
2) Savings, Savings and more Savings
The TFSA allows you to contribute $5000 annually. Should you not use up the entire $5000, you can carry it forward into the next year and add the remainder onto your next years contribution allowance.
3) Be Careful Not to Over-contribute
There are penalties if you over-contribute. According to the CRA:
You cannot contribute more than your TFSA contribution room in a given year even if you make withdrawals from the account during the year. Withdrawals from the account in the year will be added to your contribution room in the following year. If you over-contribute you will be subject to a tax equal to 1% of the highest excess TFSA amount in each month, for each month you are in excess contribution position.
4) TFSA Contribution Room
TFSA contribution room accumulates every year so long as you are 18 years of age and a resident of Canada. So if you are 18 years old in 2010 but you do not have to file taxes until 2012, you would be considered to have accumulated TFSA contribution room for each year starting in 2010, so long as you lived in Canada for those years.
5) Withdrawals
Depending on the type of investment held in your TFSA, you can generally withdraw any amount at any time with no tax consequences. The trick is when you put it back in. Ensure that it is not exceeding your yearly limit in the same calender year. Go to the CRA website for more information or speak to your bank that issued your TFSA account for more details.
It is not often that the Canadian government gives us something to be happy about when it comes tax time, but this one is all smiles. Although a TFSA may not be right for everyone, I urge all of my clients to look into it as a method of savings. It has the power to save you thousands over the course of your lifetime.
Please take a look at this great article by Tom Drake at CanadianFinanceBlog.ca
Why its so important to build an emergency fund for your future……
http://canadianfinanceblog.com/how-to-build-an-emergency-fund/
Thanks Tom
Toronto Home prices are up 9%
MAY 2011 Real Estate Update
According to TREB (Toronto Real Estate Board) Toronto home prices were up 9% in May 2011 !
The average Toronto home sold for $485, 520 which was up 9% from last year.
A total of 10,046 sales in May 2011 which was up 6% from May 2010.
It is also interesting to note that new listings were down close to 15% from this time last year.
