Monday, October 29, 2012
Show your credit worthiness!
Many people make the mistake of rushing to cancel credit cards in an effort to improve their credit score. Bad idea. High balances are the problem; your credit score is based on your balances relative to your available credit. Those cancelled cards represented "available credit" so canceling then could actually hurt your score!
Ideally, you want to have a few credit cards with reasonable interest rates that you use regularly and pay off promptly. Look at your credit card limits and calculate 30% of each card's limit. Consider that your upper spending limit and stay within it. Same goes for any lines of credit. Follow the 30% rule and stay on top of payments.
Paying down your debts to under 30 per cent is a great way to boost your credit score. If you need to carry a balance, it's better to be below the limit on more than one card, than at or over the limit on one card.
Please call me if you have a question pertaining to your mortgage or if you are looking to buy, refinance or pay out debts on your current mortgage to take advantage of the low rates.
Victor Peca - C#416-888-4934 FSCO Lic#M09001613
Tuesday, October 23, 2012
By Kimberly Palmer | U.S.News & World Report LP – Thu, 27 Sep, 2012
Living to 100 is expensive, but taking time to run through this annual checklist will help you afford it. Here are 17 steps to a more secure financial life:
-- Analyze your spending over the last month to see where your money is going and where you might be able to cut back to add more to your savings. Many banks offer free money tracking through online accounts, and money-tracking tools such as Mint.com make it easier to follow the dollars, too.
-- Calculate how much money you want to have saved before you retire (online calculators can help). For a shortcut, multiply your current annual salary by 12. Figure out how close you are to reaching that goal and what needs to change, such as working longer or saving more, to reach it.
-- Check up on the investment fees you are currently paying through your retirement accounts and consider whether it makes sense to shift into lower-fee funds.
-- Make sure you are taking advantage of all tax breaks available to you. Retirement savings accounts such as 401(k)s and IRAs (in Canada RSPs and RESPs) offer a variety of tax advantages. Check with your human resources department to see if there are any employee benefits you're not taking advantage of.
-- Balance your portfolio once a quarter to make sure it reflects your current age and ideal risk level. For a 30-something, that might mean 70 percent in stocks and 30 percent in bonds and other, more-conservative securities. For a 60-something, it might mean the reverse combination.
-- Explore lifestyle changes that could boost your personal savings rate. Does it make sense to live with other family members in a cross-generational household? Will it make sense to do so in the future?
20s and 30s:
-- Write a will, and also consider creating durable power of attorney and healthcare proxy documents.
-- Make sure you have an appropriate amount of life insurance, especially if family members depend on your income.
-- Increase your savings rate over time until you reach your goal percentage. For a 20-something without a pension, the goal percentage might be 20 percent of one's income. Automate savings through your bank accounts or paycheck.
-- Minimize the amount of debt that you carry, especially high-interest debt, such as credit card debt. If you do carry such debt, make a plan to aggressively pay it off.
40s and 50s:
-- Review the support you currently provide to family members, such as parents or adult children, and consider whether it is negatively affecting your own financial security and ability to save. If it is, consider whether it makes sense to provide such extensive support, or if there's an alternative.
-- Consider whether you should buy long-term care insurance. Those with assets worth more than $50,000 might find that long-term care insurance allows them to afford assisted living or nursing-home care, should they need it.
60s and up:
-- Investigate whether purchasing an annuity would provide extra financial security in the future. People without pensions can benefit from the steady payouts that annuities provide.
-- Develop a plan to continue working in retirement, whether it's in your current field or a new one. If you are approaching retirement, start taking steps to implement that plan, such as getting more training or certifications.
-- Maximize Social Security payments by delaying benefits until age 70, if possible.
-- Consider if you would like to donate any money to charity and if so, make plans to do so.
-- Guard yourself against scams by avoiding offers that sound too good to be true, sharing your Social Security number and other personal information online or with strangers, and reporting any suspicious charges on your bank accounts or credit cards.
Thursday, October 18, 2012
Canada housing outlook forces critical homeowner decisions
Despite disheartening figures, Canadians still have good reason to be optimistic about biggest investment of their lives.
The latest data out of Canada's housing markets suggests a sustained downward trend. With the potential for bubbles to burst from coast to coast, do Canadians see their homes as an investment or a place to live? And how is the downturn affecting buying decisions?
By the numbers
Sales of Toronto homes fell 21 percent this fall compared to a year ago, according to the Toronto Real Estate Board. In Vancouver, meanwhile, home sales dropped nearly 33 percent in September compared with a year ago.
Despite those disheartening figures, Canadians still have good reason to be optimistic about what so many call the biggest investment of their lives.
"I believe Vancouverites, at least, definitely view their homes as an investment, not just a place to call their own. It's hard not to with the rise in real-estate values in the Lower Mainland over the past 20 years," says mortgage broker Karen Gibbard, principal at Gibbard Hoffart Financial Group.
Gibbard attended governor of the Bank of Canada Mark Carney's speech to the Vancouver Board of Trade in 2011 and quotes him as saying: "In recent years, housing has proved a very good investment indeed. The value of residential real estate holdings in Canada has climbed more than 250 per cent in the past 20 years."
Whisperings about a downward trend in the housing market have made some first-time buyers more cautious about buying at this moment.
"A very common question I'm asked is, 'Is now a good time to buy?'" Gibbard says. "My answer is always that if you're buying for your own home -- for shelter--then yes, buy. The interest rates are at near historical lows and if you're buying for your own shelter, with a long-term strategy in mind, I personally believe it's a good strategy.
"Why wait a year to buy in hopes that the values have dropped when in the meantime, you've wasted 12 months' rent, and if interest rates have increased, you've negated your potential savings by waiting to buy and paying a higher interest rate for the next five to 10 years?"
"If a homeowner was thinking of selling to either upgrade or downsize, they tend to remain in the same home and renovate to make it fit their changing needs rather than sell at a less than profitable price in a downturn," says Burnaby certified financial planner Satpal Rai.
"The general public and my clients for that matter do not purchase a primary residence only to sell it within five to 10 years," she adds. "They generally purchase a starter home to get into the market and then upgrade when necessary or feasible. Generally clients are living in their principle residences for at least a decade if not 15 years."
"When clients come to see me about their first purchase, it's mostly always a stepping stone to get them onto the property ladder," Gibbard says. "With today's high [property] values, it makes it difficult to buy your dream home on the first go. You need to take a stepping-stone approach and reach for the stars as you build up equity."
And although the stepping-stone approach may be mandatory, it can also be costly, Gibbard cautions. Think legal fees, property-transfer taxes, realtors' commissions, moving expenses, setting up utilities, plus a potential penalty for repaying a mortgage early... It all adds up.
The fallout of flipping
Sure, those who have the means (and the guts) to buy a home, fix it up, and put it back on the market within a year or two stand to make a windfall of cash—if everything happens to fall into place.
"This would not be feasible for everyone with their principle residence," Rai says. "The disadvantages entail moving frequently and constantly working even after your 'regular' job is done so you can finish renovations to put the home back on the market. In a downward market, you would need to be able to maintain the home and its finances to wait out the downturn."http://ca.finance.yahoo.com/blogs/insight/depressing-canada-housing-outlook-forces-critical-homeowner-decisions-140353331.html
Monday, October 15, 2012
PAY THE BILLS ON TIME: You'll need a fool-proof system
The single biggest factor behind a strong credit score is having a timely bill payment history. Credit agencies keep track of every late payment. And each one impacts your score. The good news is that recent late payments are factored more heavily than old ones: so you can start today with a commitment to NEVER let a bill get past due. In as little as six months, you'll look more creditworthy to a lender. The longer your "good" history is, the higher your score.
The hardest hits on your credit score are bankruptcies or accounts that have been sent to collections. Even for a small amount – and even if it is in dispute – being "sent to collections" will create a serious, long-term stain on your credit reputation. Don't let it happen.
Develop a fool-proof system for bill paying. It doesn't have to be elaborate. Put your bills on an automatic payment plan. Or take an inexpensive monthly calendar and make it your "bill tracker". As bills come in, mark the amounts and due dates on the calendar. Be sure to pay at least the minimum required amount (more or all if you can!) a few days ahead of time – as it can take time to process payments!
Very important point to note with payment for your bills that will save your credit score. On the bottom of your bill that says due date for minimum payment example October 31st, if you miss the payment for that date, YOU ARE NOT LATE, as long as you are still with in the 30 day period of the due date, you are still good and not behind on your payment so hurry and make the minimum payment. You must be 30 days late from the minimum payment due date for it to reflect your CREDIT as 30 days late!
Please feel free to call and discuss your credit issues for free and if you have a mortgage coming up for renewal, wanna refinance or have purchased a home, please contact me to use my service, they are free of charge. email@example.com