Happy Home Hunting Tips for Canadians

Home hunting tips

Finding the right home for you and your loved ones really comes down to three chief factors:

  1. Affordability: Does the home fit into your budget? Have you determined the financing you can qualify for through a mortgage pre-approval? Have you factored in mortgage insurance, utilities and heating expenses, association fees and taxes?
  2. Lifestyle: Is the home located in an area within the proximity of the amenities you and your family require? Is the lot large enough for your pet(s)? Will owning this home impede you from doing the things you love doing? Are you close enough to work, family and friends?
  3. Future Needs: Are kids a possibility in the future? Is the home large enough for a family? Is the basement developed? Are there schools nearby? Or, if you are close to retirement, is the home too large? Are there too many stairs and floors in the home to negotiate?

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Types of Commercial Mortgages

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Most Canadians are familiar with residential mortgages. After all, homeownership is something most people aspire to, so the ins and outs of home loans and mortgage rates tend to reveal themselves to consumers as they take their first steps toward purchasing a property. However, unless an individual is a business owner or investor, they might not understand the intricacies of commercial mortgages.

What is a commercial mortgage?
Put simply, a commercial mortgage is a loan for real estate that is used for business. Whereas a person's house or condominium may require a residential mortgage, commercial mortgages are used for properties that are used for office space, retail, manufacturing and other non-residential services. Continue reading

The future of Canadian home prices revealed

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When you take away housing your family and the joys (or headaches) of repair and decoration, the most important aspects of buying a house concern price. How much is buying a home going to cost you? How much will your home be worth as the market changes? Buying a house is an investment, and you want to make sure that your investment pays off.

With the amount of speculation regarding Canada’s housing market showing no signs of shrinking, it’s easy to see why some homeowners are nervous about their purchase. Real estate prices are near all-time highs, yet sales are declining. After a significant boom in the market, government officials are determined to cool things down. Many homeowners are asking themselves how all this fluctuation will affect the price of their homes. Perhaps the better question is: How will the price of their homes protect them in the future?

Writing for Canadian Business, Larry MacDonald insinuated that inflation is a likely possibility for Canada’s future, and owning a home is a smart way to protect yourself. Continue reading

Change places! Canadians swap apartments – while they can

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Residents of Montreal could be forgiven for thinking they were in attendance at the Hatter's mad tea party recently. On July 1, tens of thousands of apartment dwellers seemed to heed his call to "change places," swapping living quarters across the city, according to the CBC.

This year, it is estimated that about 100,000 Montrealers traded their apartments on Canada Day, the CBC reported. But while finding an apartment isn't too difficult now, the city's landlords see a squeeze on the horizon.

Low mortgage rates have driven most Canadians toward homeownership in the last few years, leaving the city's apartment vacancy rate to climb slowly but steadily to 4 percent, according to the source. But with the new rules on home loans set to take effect, that trend is likely to reverse, and not just in Montreal. According to the Quebec Landlords Association, there will be a "major problem in the coming years" as far as the housing market is concerned. Continue reading

BMO: Time is right for Canadians to buy US properties

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Spring is in the air, and Mother Nature isn't the only one showing signs of recovery after a long winter. Many sectors of the U.S. economy, most notably its housing market, have begun to blossom and grow. But what does this mean for Canadian investors?

As home prices south of the border stabilize, the 16 percent of Canadians who recently told BMO Financial Group they would consider buying a property in America might want to accelerate their search. While prices are still low across the United States, BMO, in its new survey, suggests prices will begin to climb starting in 2013. For now, sales of single-family homes are still 8 percent below their 20-year average, but would-be buyers should note that prices did rise 6 percent over 2011 during the first quarter of this year.

"While there's little urgency, now is likely a good time to buy U.S. real estate in regions with relatively low foreclosure rates, as conditions should improve enough to put a floor under prices this year," said Sal Guatieri, senior economist with BMO Capital Markets. "The inventory overhang has ebbed, prices are low, and some pent-up demand exists. However, patience is a virtue for bargain hunters in areas saddled with distressed properties." Continue reading

Using a mortgage to lower taxes

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With tax day around the corner, many Canadians are thinking about ways to save money on their yearly filings. While interest payments on home loans aren't exactly tax deductible, there are a couple ways to potentially turn a mortgage into a tax-saving tool.

For Canadians with sizeable investments, one way to use a mortgage for a tax advantage is through an asset swap. With this technique, a homeowner can essentially trade home mortgage debt, which isn't tax deductible, for investment debt, which is. Homeowners can execute a full or partial swap.

Full swap: Under this scenario, a homeowner has, say,  $200,000 worth of investments in stocks, bonds or other fluid assets. He or she also has a $200,000 mortgage. The homeowner would first sell the investments and use the money to pay off the mortgage. Once the transaction is complete, the homeowner would then take out a $200,000 home equity mortgage and buy back investments. Because the loan is now being used to fund investments, rather than a home purchase, the interest payments are tax deductible. Continue reading

Canadians turn to RRSPs for safe investment option

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Amid global financial turmoil, many Canadians are seeking the calm certainty of conservative long-term investments, a new survey reveals.

Canadians are still investing despite the tumult in places like the United States, Greece, Spain or Italy, and they're doing it at twice the rate of a year ago, according to a review from Royal Bank of Canada Branch Investments. But rather than seeking more bang for their buck, Canadians are diversifying into longer term mutual funds, guaranteed investment certificates and investment savings accounts.

Tax free savings accounts and registered retirement savings plans are getting more attention from Canadians as they return to investing basics, according to RBC. Traditionally, Canadians have poured money into their RRSPs during a seasonal two-month period, but lately they have been making regular contributions throughout the year, notes Michael Walker, vice-president and head of Branch Investments.
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Nearly half of Canadians say they’re not prepared for retirement

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As global economic uncertainty, unstable stock markets and a potential housing slowdown continue to make headlines, many Canadians are unsure if they are financially prepared for retirement.

According to a recent CIBC study, 44 percent of all Canadians believe they don't have adequate retirement funds, while nearly one-third of baby boomers share that view.

"Planning for retirement is something almost every Canadian thinks about at this time of year, and our poll results show that many would like to be further ahead when it comes to their retirement plans," said Christina Kramer of CIBC. "Regardless of what stage of life you're currently in, you can benefit from having a discussion with a financial advisor." Continue reading

Investing for Young People Part 3: Differentiating Mutual Funds

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Perhaps jumping into the stock market has turned out to be more of a chore than you and your child anticipated. If savings bonds and GICs are not offering the rates of return you and your child would like to see their savings yielding, mutual funds are a promising alternative.

At current Canadians have well over 1,200 different mutual funds to select from. How do you know which is right for you? Here is some general information on the various types of mutual funds available in Canada.

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Investing for Young People Part 2: The Difference Between Stocks, Bonds and Mutual Funds

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How to Pick your Stocks

Now that your child is proficiently handling their chequing account, making debits and deposits responsibly, and has assessed their risk tolerance, it is time to locate an investment vehicle that will see their savings dollars grow.

While an allowance and monetary birthday/holiday gifts might line the accounts, authoress Katherine R. Bateman, in her book The Young Investor, suggests that your child make a list of the things he or she is good at, or likes doing, and from that list derive ways in which they can earn money from those activities themselves. Continue reading