What can happen to your mortgage if tragedy strikes

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Nobody wants to think about tragedy striking an otherwise charmed life, especially if it entails a family member getting sick, injured or even passing away. Life's unforeseen circumstances add an element of risk to just about everything, but they're not reason enough to avoid getting a mortgage. In fact, changes in any family dynamic – adding someone, losing a member and anything else you can think of – have the potential to throw a wrench in mortgage plans. The most serious, however, is dealing with a mortgage when tragedy strikes.

Is it scary to think about? Sure. Is it sad to even consider? Of course. Here are ways Canadians can prepare their mortgages and finances in the case that tragedy strikes:

When something happens to the breadwinner
It's archaic to say that most Canadian households are indeed provided for primarily from one person's income – the breadwinner. Having financial security like life insurance, medical coverage and emergency savings accounts can certainly help ease the pain and distress a family may feel if medical problems or death affect a mortgage-holding household, but such protection is not always in place when it's needed. Continue reading

Don’t forget about life insurance coverage when saving for your dream home

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Young, first-time homebuyers who are saving up for their dream home and brushing up on mortgage terminology may be easily sidetracked by the latest and greatest home projects Pinterest has to offer. Sure, images of lush, budget-friendly gardens and $50 room renovation before-and-after pictures can be lovely to gawk at, but there are more important matters at hand.

Like actually securing a mortgage. And creating a budget. Then getting sufficient life insurance.

"But I'm young and healthy with plenty of home renovations in my future! Why do I need life insurance right now?" first-time buyers may ask.

Actually, the reason is quite simple. Life insurance can offer a cushion of protection for people who aren't lucky enough to die of natural causes at a very old age, according to the Winnipeg Free Press. Regardless of medical advances and disease prevention tips experts constantly promote, the unfortunate fact is that not everyone has their finances in order when they die – ripe old age or otherwise. Continue reading

BMO Finanical Group on Canadians and retirement

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BMO Financial Group recently released a report advising Canadians on retirement and downsizing and if they should make their move.

With the first wave of Canada's 9 million baby boomers becoming eligible for retirement last year alone, many are having to make the decision on what to do in terms of their finances.

The report found 54 percent of respondents citing financial reasons as why they will relocate after they retire.

"Even if downsizing may be years away, it's important not only to think about all of the factors that can affect your decision, but to maintain an open dialogue with your loved ones," said Dr. Amy D'Aprix, BMO Life Transition Expert. "Being proactive will help you remain in control, rather than having to deal with an unexpected move when you're not prepared." Continue reading

TD poll examines Canadians’ retirement misconceptions

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A recent TD poll reveals that Canadians have many surprising misconceptions about retirement and the planning that is required for one's golden years.

With the Registered Retirement Savings Plan deadline set for February 29, 2012, the poll shows that many Canadians don't know when they should start saving for retirement or the exact amount they need in which to retire comfortably.

"While planning and saving for retirement is different for everyone, there are some basic fundamentals to keep in mind with respect to things like when to start saving, how much you need to save and weathering the stormy markets," said Crystal Wong, senior regional manager, TD Waterhouse Financial Planning. "An important starting point is to determine what your ideal retirement lifestyle is like, then set financial goals and work with an advisor to develop a comprehensive plan to help you attain those goals." Continue reading

Life insurance needed when financial issues could arise

For many new families, the topic of life insurance is a new subject. However, as financial experts told the Globe and Mail, it can be an important one to discuss.

While the source says a decent general rule is to get a policy for between five to seven times a person's annual income, they should also keep any significant financial liabilities in mind.

"Even though you're paying for a mortgage or you’re paying for your children's education, you've got all these other outstanding liabilities, you would want to think about the fact that you need – if something should happen to you – to cover those liabilities for your family," said Wendy Hope, of Canadian Life and Health Insurance Association. Continue reading

Online resources can improve financial literacy

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While some Canadians have relatively poor financial knowledge, there are a number of resources which can help them earn a greater grasp on their own financial questions.

Among the many online resources which can assist people in improving their financial knowledge is The City, created by the Financial Consumer Agency of Canada and the British Columbia Securities Commission, The Globe and Mail reports. Continue reading

Life insurance can reduce estate tax liabilities

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For those examining their estate planning strategy, some financial experts say that a life insurance policy can serve an important function of helping to reduce estate taxes.

When a person passes away, all of their assets are then evaluated by Canada Revenue Agency to determine what value they had on the day the person died, and what taxes may be applicable to the person's estate.

If the person has a spouse, those assets can pass to them, but the taxes will still eventually need to be paid when they die or otherwise sell off those properties. Continue reading

Significant number of Canadians suffering from large household debt

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A recent report from the Certified General Accountants Association of Canada discovered that, despite the lower amount of consumer spending during the first quarter of 2011, a significant number of households are suffering from increased totals of debt.

The report revealed that household debt reached an all-time high of $1.5 trillion. Furthermore, the report relayed that, for those suffering from debt currently and beginning to reach financial limits, the situation is becoming more dire.

"The debt of a typical household is rising," said Rock Lefebvre, CGA-Canada’s vice president of research and standards and co-author of the report. "And the financial situation of certain groups of households is much worse than average and continues to deteriorate. This is concealed if you focus only on the national or aggregate picture."
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