Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

7 tips for speeding up the day you burn your mortgage

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By Barry White

Special to the Financial Independence Hub

Mortgage payments can be a huge drain on your budget, particularly if it accounts for a significant part of your income. Apart from the interest you will be paying on the principal, mortgage repayments can be a hindrance to your other long-term financial goals. Not only can paying off a home mortgage early help you save thousands of dollars but it will also help you to gain your financial freedom earlier. If you have made up your mind and eager to pay off your mortgage early, here are seven helpful tips you can implement.

1.) Pay extra on your repayment each month

Making extra payments each month is the easiest way to help lower your debt on the property. Whenever you make your monthly mortgage repayment, most lenders allow borrowers to make an extra payment and mark it as “principal only.”  This implies that the extra payment pays down only the principal instead of both the mortgage principal and the loan interest.

Assuming you have a monthly loan repayment amount of $1,346, you can decide to round it up to $1,400. The extra $54 is dedicated as a repayment on the principal. This simple act of extra payment can save you lots of interest charges as well as helping you clear your loan ahead of schedule (since the principal payments will add up faster than you’d think). Therefore, plan to add as much as possible to these payments to help with the principal plus lower the amount of total payments owed. Looking for ways to find extra cash to put on your mortgage? You can use bonuses or apply raises from your job.

2.) Pay more than Monthly, bi-weekly

A bi-weekly mortgage is when you make a payment that equals exactly half of the total monthly repayment every two weeks. This consequently shortens the time to pay off. For instance, if your normal mortgage repayment per month is $1,000, you would instead pay $500 every two weeks. This has almost a similar impact on your budget as one monthly payment. But with the 52 weeks in one year, a bi-weekly payment schedule will bring about a grand total of 13 full monthly payments each year instead of the usual 12. You’ll conveniently be making an extra payment yearly without scrounging around for the extra money.

3.) Make one big extra payment each year

Another great way to repay your mortgage early is to deliberately make an extra payment in a month every year. This helps you settle your mortgage faster, and chances are you wouldn’t miss it.  You can schedule the payment for a month when you hardly have any larger expenses, like during holidays. Of course, this technique requires extra discipline from you since you will need to save that payment. To be on the safe side, you can automatically transfer a little amount every month into a dedicated account for an extra mortgage payment.

4.) Divert “free” money towards your mortgage

Did you receive a tax refund or Christmas bonus from work? Divert that extra money that cannot be accounted for in your budget to your mortgage pay-off fund. Continue Reading…

How Property Investment can help you reach Findependence (Financial Independence)

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By Rebecca Lee

Special to the Financial Independence Hub

Financial Freedom is a way for anyone to escape the grind of the 9-5 work life to live the life they desire without relying on anyone else for money. Almost all of us trade our time for money to pay our bills, eat, travel and live in general. Without trading our time, it would be impossible to pay for the things we need and want. Many of us are stuck doing this until we have just enough to retire late in life.

Those who find financial freedom, AKA Findependence, do so by acquiring assets that generate wealth on their own. As the saying goes, “don’t work for your money, make it work for you.” One of the most popular types of these assets is real estate. Here’s how you can achieve financial freedom through real estate investment.

Have a strategy

Financial freedom, what it is and how to achieve it is different for everyone. Everybody has their own needs and wants and will require a different amount of cash flow to live on. Therefore, you must have a personalised strategy based on your income, savings and liabilities.

Without a plan, you won’t know what opportunities to take advantage of and what ones to pass up on. A strategy that’s designed for you will help take the emotions out of your decisions, avoid making mistakes and minimise risk.

Get the mindset

Wealth creation and investing requires a certain mindset to be successful. A lot of people are selling “Get rich quick” schemes but unless you get super lucky, this is not a realistic approach. Real estate in particular is a long-term investment game.

Real estate investors understand that their wealth will grow not overnight, but over years of gradual growth. Understanding this and knowing yourself enough to be able to commit to such a long-term plan is key to reaching financial independence. Investing in real estate isn’t as simple as buying property and waiting for its value to grow. Continue Reading…

Could the First-time Home Buyer Incentive be used in Canada’s largest markets?

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

When the federal government announced in March that it would be wading into the shared equity mortgage market in efforts to improve home buyer affordability, it stirred up some controversy.

The program, called the First-Time Home Buyer Incentive (FTHBI), was teased in the budget as a ground-breaking approach to helping buyers get into the market by providing interest-free down payment loans of 5% for resale homes, and up to 10% on brand-new builds.

In exchange for the upfront funds, which are designed to reduce the overall size of the mortgage and monthly payments, the Canada Mortgage and Housing Corporation (CMHC) will take an equity percentage the homes’ value, which must be paid off when either the mortgage matures, or the home is sold.

This paid-back amount fluctuates along with appreciation and depreciation in the market. For example, let’s say the CMHC provides a 5% loan of $25,000 for a home purchase of $500,000. The homeowner sells the home several years later, and its value has increased to $550,000. The homeowner would then need to pay the CMHC back $27,500 to reflect 5% of the increased value of the home.

Critics say FTHBI too restrictive to be effective

Mortgage analysts have called the effectiveness of this equity sharing program into question, as the total amount owed to the government could be significantly more than what was loaned in the first place, especially in a market that experiences rapid price growth.

However, the most contested features of the FTHBI are its mortgage and purchase price restrictions, which critics say render the program useless in markets like Toronto and Vancouver where home buyers arguably need the most help. Continue Reading…

New Millennial parents need to prepare for the future

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By Donna Johnson

Special to the Financial Independence Hub

One of the most exciting events in most people’s lives is becoming a parent. Those who are currently bringing new kids into the world tend to fall into the Millennial generation, which includes people born between 1981 and 1996. These parents need to be prepared for many things they may not be ready for. Having a home security system is a good idea, but there are also many other financial considerations to take into account.

Kids are expensive

The cost of raising a kid is now estimated to be around US$233,000. That’s just until they are 18. Therefore, Millennial parents can expect to pay more than $12,000 per year for their little bundles of joy. Of course, there are ways to avoid some of these costs, like skipping out on day care costs by having one parent stay home until the child goes to school and buying clothes at thrift stores. Additionally, family members like grandparents might be willing to watch kids for a reduced fee, if they charge anything at all. Regardless, there are costs that come with having a child, and new parents should be prepared for them.

It’s important to get your documents together

Many parents fail to adequately prepare for the future. No one wants to die before their kids reach adulthood. However, there is always that possibility. Therefore, taking out a solid life insurance policy is a good idea. Also, setting up a will that indicates where the kids should go in the event that both parents die or become incapacitated will help ensure that the children stay out of the foster system.

College is coming up

Those who have a child this year will likely have between 18 and 19 years to get ready for college expenses. As of 2018, a year at a public four-year school at the in-state tuition rate averaged US$20,770, while a year at a private school costs just under US$47,000. Continue Reading…

Social Isolation: a growing epidemic

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By Candace Hartman

Special to the Financial Independence Hub

There is a growing surge of isolation and loneliness in our communities.

Social isolation affects all ages, in every level of society, and results in serious health consequences. Last year the British Parliament appointed Tracey Crouch to address the issue in their country and in our city, Vancouver released its year long study on the problem shortly afterwards.

These events caught the attention of the public and resulted in a minor media storm which eventually faded away.

And what has changed? Urbanization, immigration, the impact of technology, economic factors, securalism, an aging society with mobility and health challenges – the causes of isolation and loneliness are multi-faceted and complex. These are not issues easily addressed by government.

Isolation and Loneliness are social issues needing a response

Isolation and loneliness are social issues needing personal response within our own individual communities.

The past year in Vancouver has seen the exponential growth of Beyond the Conversation, a non profit agency creating connections among hundreds of seniors, new immigrants, refugees, international students, and youth who have joined their groups.

The South Granville Seniors Centre are enthusiastically embarking on a year long outreach project to contact isolated seniors within their community; Knox United Church are coordinating meetings among support organizations to facilitate networking, as well as promoting social connection within their community through a number of creative initiatives

Intergenerational housing – such as Happipad’s Igen project – is growing in Canada, organizations which pairs students in need of housing with seniors seeking companionship.

This spring, in southwest England, a community group hosted a “Make Someone Welcome” event where neighbours and locals came to learn the skills to better respond to the climbing loneliness of residents in their town.

These are just a very few of the endeavors I’ve had the honour of discovering over the past year, there are countless caring, compassionate and enthusiastic individuals and organizations reaching out worldwide.

The power of community.

Candace Hartman is a writer and social advocate who can be contacted at QuadraGranvilleSeniors.com. This blog was originally published on the organization’s blog on April 14, 2019 and is republished on the Hub with permission.