Did your lender talk to you about Mortgage Insurance?

Protect what matters most, not just your house

When you buy a home, you need a way to help protect yourself and your family financially, no matter what happens.

Your bank/lending institution probably talked to you about mortgage insurance (also called creditor insurance) when you bought your house. It means if you die, your mortgage is paid off.

Mortgage Insurance vs. Individual Life Insurance:

But is mortgage insurance the best option for you?

If you want to protect more than just your home, individual insurance may better suit your needs. Individual insurance generally provides more control, options and benefits to help you financially protect what matters most.

By comparing mortgage and individual life insurance, you ensure you’re giving yourself and your family the type of insurance protection that meets your needs.

I’m a trusted professional who can help you build a financial security plan to help protect your mortgage and what matters most in your life.

Top tips for preparing to sell your home – on a budget

Getting ready to sell your house can be an exciting process, but it isn’t without its stresses – and its expenses. There are ways you can make your home easier to sell and they don’t have to cost a lot. In fact, a big renovation might not always get you the return on your investment you were hoping for. Here are some budget-friendly tips to consider when preparing to sell your home.

Improve your curb appeal

You can’t change someone’s first impression of your home, so make sure it’s positive. This starts before potential Sell Your Homebuyers even walk through your front door. Make sure you cut the grass, rake leaves or shovel the drive, depending on the season. Consider planting flowers or hanging a wreath to make your entryway more inviting. Make sure your porch light works, paint your front door or railing if you haven’t updated recently, and install new hardware on your door to create a strong statement.

Get a new perspective

It can be easy to miss imperfections that you’ve come to accept as part of your home. A friend, real estate agent or professional stager can bring a fresh eye to your house and spot something you might not notice. That statement wall you love might be off-putting to potential buyers. A fresh coat of a more neutral colour may make your home easier to sell.

De-clutter your home

You want to create a blank canvas for people so they can imagine themselves in your space. Since you’re going to have to pack up to move, get started on the process early. Put personal items like pictures or keepsakes in storage, and where possible, try to take about half of the items out of your closets to make them appear larger. People are always looking for more storage, so it’s in your best interest to make it seem like your house has lots of options.

You can’t change someone’s first impression of your home, so make sure it’s positive.

Quick and easy upgrades

When you’re getting ready to sell, it doesn’t necessarily make sense to complete a total overhaul of an outdated room, such as the kitchen or bath, since you won’t always get a good return on your investment. If the rooms needing updating aren’t in bad shape, you may also consider reducing the price of your home to give buyers the option to renovate to meet their needs.

This is where little fixes can have a big impact. Make your house move-in ready by fixing chipped floors, patching cracks or nail holes in the wall, updating hardware on cabinets and doors, cleaning grout, and fixing leaky faucets. Make sure doors and windows are on track and open and close easily. A little TLC goes a long way towards making your house enticing to buyers. They are more likely to want to purchase your house if they don’t have a long list of things to fix when they move in.

Always be ready to show your house

It may be hard for your realtor to sell your house if it doesn’t show well. Having your house in show-ready condition at all times increases the opportunities for your agent to bring potential buyers through. Dust frequently, don’t leave dishes in the sink or dishwasher and make sure your bathroom is in tip-top shape.

Getting your house ready to sell can be an expensive process, but it doesn’t have to be. These tips can help you get the most for your home without spending a lot of money.

Should I Rent or Buy?

It’s one of the most important questions you’ll ever answer – should I rent or buy? The choice you make could have a long-term impact on your financial situation.

Keeping up with friends who’ve decided to purchase a home should not play a role in your decision. Ultimately, it’s about timing and what works best for your unique situation.

Why there’s no rush to buy a home

First, let’s shatter the myth that says you should jump into the real estate market as soon as possible. Home ownership does not automatically offer the highest returns, especially now that the market has risen so strongly over the past decade. Your decision about buying should be based on affordability and need, not expected short-term investment gains.

  • Should I rent or buy? The choice you make could have a long-term impact on your financial situation.

Some personal finance writers have debated whether you’d be better to rent for your entire life and invest the extra money you pay each month for owning a home – that includes mortgage interest, on-going maintenance and everything else. The Ontario Securities Commission funds an investor education website that includes a calculator to test out various scenarios.

In Canada’s major cities – including Vancouver, Calgary and Toronto – rental prices are not keeping pace with property prices, meaning many renters are living in neighbourhoods where they could not afford to buy a home.

Rent or Buy?

The advantages and disadvantages of “forced savings”

For most people, owning a home is both a lifestyle and a long-term investment decision. The numbers support this decision, as two in three Canadians own their homes. The reason is simple: people put a great deal of intrinsic value in owning the roof over their heads and paying down a mortgage forces them to build financial assets.

Over the years, this “forced savings” approach becomes easier as wages increase and the share of income earmarked for a mortgage steadily declines. However, during the early stages of a mortgage these financial pressures can strain lifestyles and even relationships.

Why delaying a home purchase could be a very wise move

Delaying a home purchase may be a sound option for many people because it allows you to build a larger down payment. This allows for the potential to reduce your monthly mortgage payments. And if you manage to put 20 per cent down, you avoid mortgage insurance – which can cost as much as 3.35 per cent of the value of the mortgage.

A larger down payment also puts you in a much stronger position if housing prices take a short-term drop. With a 20 per cent down payment, a 10 per cent drop in your house value would still leave you with significant equity. With only five per cent down, you’d be in negative territory.

Try out the cash flow test run

Delaying a home purchase not only creates the opportunity to build a bigger down payment, it allows you to get a feel for how your monthly cash flow will change once you’ve bought a house. At minimum, you should save the difference between rent and your expected monthly mortgage payment. Take it to the next level by adding up and banking all non-mortgage costs, including property taxes, insurance, heating and other utilities. Condo buyers also have to factor in strata/maintenance fees.

The longer you maintain this “cash flow test run,” the bigger your down payment will be. Plus, putting your estimated budget for home ownership to the test will help you establish a financial comfort zone, helping you avoid becoming “house poor” – or being unable to afford anything other than your basic living expenses. After all, your goal is to own a great home and still have enough money to enjoy the rest of your life.

Expect the unexpected

When you work out a budget for the costs of buying versus renting, mortgage payments and other ongoing expenses are easier to estimate. The big unknowns are unforeseen repairs. A common rule of thumb is to budget for one per cent of the purchase price of the home for regular maintenance.

From a renter’s perspective, squirrels are a cute feature of city living, while a sudden thundershower is a perfect way to water trees and plants. But a homeowner may feel differently after discovering a squirrel has chewed a hole in their roof, causing rainwater to flow down walls and across ceilings, eventually flooding the basement.

The Canada Mortgage and Housing Corporation (CMHC) urges homeowners to put five per cent of take-home earnings in a special fund to cover emergencies, such as major house repairs or the loss of a job. Even if you can afford to buy a brand new home in your ideal neighbourhood, you need to account for repairs and upkeep as well.

Buying can help you create your own living space

Wanting to own a home isn’t just about money – it’s also about creating a truly unique living space that fits your personality. Renters, on the other hand, have few incentives to invest anything into customizing their home and they could be forced to move if the building is sold.

If you’re planning to have children, the stability of staying in one neighbourhood for an extended period may be important. As your family grows, the math behind the buy versus rent calculations may point to a purchase.

Why buying a “starter home” may not be right for you

For many, the next step is purchasing a “starter home.” Consider, though, that buying a less expensive home with the intention of eventually trading it in for a larger one in a nicer area involves major costs – including real estate agent commissions for selling the starter home, one-time taxes on the new home, closing costs and moving expenses. Added up, they could easily overtake any increase in your starter home’s value.

Owning for a relatively short time also increases the risk that the home’s value may decrease and not have time to recover. While house prices tend to rise over time, there may be short-term dips in the market. Renting in the short term avoids these risks and could actually get you into your dream home sooner.

Go big and go home

Delaying your home purchase may give you the ability to avoid going the starter home route, opening up the opportunity to buy the “forever home” that will serve you and your family for many years.

Buying a more spacious house before starting a family allows you to grow into it. Meanwhile, you can follow the lead of many first-time homebuyers and rent a part of the house to generate extra income. Then, once your family grows, you can convert the apartment into bedrooms and bathrooms for your kids.

Buying a home can be immensely rewarding and a wise financial decision. Prudent financial security planning, which may include renting a little while longer, can help ensure you achieve your goals while also keeping your finances in great shape.