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.

5 mistakes people make buying Term Insurance

Posted By |

By Jane Rupert

Special to the Financial Independence Hub

An essential component of planning for the future involves planning your finances. After all, when your career finally falls into place, your funds need to be managed appropriately too. How you save, invest, spend and leverage your income can help with deciding how secure (or not secure) your finances for the coming years will be. In times like these, when the avenues and options are aplenty, it shouldn’t be too difficult to choose the right options for yourself. You can also do research on finding recommended independent agents who can help you get the right insurance policy for your need.

However, making mistakes when you try to work things out on your own is only human, and that’s why we’re here to throw light on some mistakes that you can avoid.

When we say mistakes, we’re talking particularly about Term Life Insurance. Term Life Insurance involves selecting the term or duration for which you will be paying your premium and also allowing your policy to mature and grow in monetary value. Needless to say, the longer you let it mature, the larger your policy amount is going to be when you decide to cash it in or pass it on to your family. That being said, it’s a given that we believe in the importance of taking up a life insurance policy. So, let’s also throw some light on mistakes that you should avoid making when you decide to invest in one.

1.) Being hasty

There are tons of policies and financial companies that you can choose from, so why be hasty about it? A common mistake some people make is to go for the first policy that is presented to them, without doing their own research and weighing out the alternatives in the market. Now, this could lead to you overpaying for your policy or taking up too many riders, without deriving any actual, significant benefit from it. Hence, step one is to always check out multiple, get instant term life insurance quotes, make a proper comparison and then decide which policy best suits your requirement.  

2.) Buying small

For some of us, an insurance policy is a way to make up for deficit income. Whether it’s because of disability or unemployment, it’s important to have something as a backup to help you out in times of financial crisis. However, a common mistake people make is to take a policy that is only just enough to make up for their income, without considering the long-term repercussions of it. Taking a small policy amount also means that it won’t last you too long, and if a sudden medical emergency arises, for example, you might burn through that amount in no time. Taking a larger policy amount is a smart move because it ensures that you have a broader net to fall on if times get rough. Continue Reading…

Pros and Cons of Vacation Timeshares  

Posted By |

By Becky Williams

(Sponsored Content)

If you are like nearly everyone, the time that you spend on vacation represents some of the most pleasant and days of the year. You may spend a good deal of time trying to decide what will be the most amazing type of vacation you can take. One option you may want to focus on is obtaining a vacation timeshare. There are a number of significant benefits associated with a vacation timeshare.

A timeshare may not be for everyone and there are some factors that may make this type of vacation property not the perfect choice for you. However, by weighing and balancing the pros and cons of timeshare ownership, you will be able to make an informed, educated decision as to whether this type of vacation property makes the most sense for you. You will be able to find a vacation timeshare that is perfect for you today and into the future as well.

Guaranteed, reliable vacation

A primary benefit associated with a timeshare is that you have a guaranteed, reliable location to spend your precious vacation days. You do not have to spend an inordinate amount of time trying to find an ideal place to spend a vacation. You need only undertake that task one time when you select a vacation timeshare property the first time.

With a vacation timeshare, you know precisely what to expect. You will never again face a situation in which you are uncertain about what your vacation destination and lodgings really will be like. The reality is that this type of uncertainty, which is completely eliminated with a timeshare, has been a major reason why so many people have experienced vacation disasters.

An ideal location for you

Another key benefit of going the timeshare route when it comes to a vacation property is that you will have a destination and location that is ideally suited to you. There is a significant array of different vacation timeshare options in many, many locations across the United States and around the world.

On a related note, you can enjoy another benefit of getting a vacation timeshare. Many timeshare companies offer you the ability to swap your timeshare location for a particular year. In other words, you can trade your timeshare location with someone else at a different location. This provides you with both reliability and consistency as well as a degree of flexibility should you elect to try something different one year.

Entertaining family, friends, and colleagues

Although your main purpose in purchasing a timeshare is to be able to have a set vacation location for yourself and your immediate family, other people in your life can benefit from the timeshare experience as well.

For example, you may not have the need to use your timeshare for a particular period of time set aside to you. As a result, you can offer your timeshare to extended family members, to friends, and to work or other types of colleagues. Often, the owner of a timeshare will donate a stay to a charitable organization. The stay is auctioned off to raise money for the organization. In short, there really is a tremendous amount you can do with a timeshare, not only for yourself and your immediate family but for a broad spectrum of other people who may be important in your life as well. Continue Reading…

How does Real Estate ROI compare to other investments?

Posted By |

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

If you ask a long-term homeowner whether they feel their home purchase has turned out to be a worthy investment, chances are they’ll say it was; real estate continues to be considered a safe and effective way to grow your money, according to 68% of homeowners who’ve owned a home for 10 years or longer, according to data collected by Zoocasa.

However, the Canadian housing market is coming off of an admittedly quieter year, with steep declines in sales activity recorded in some of the nation’s largest markets: The Greater Toronto Area, Greater Vancouver, and Calgary have all seen the number of homes changing hands plunge by double digit percentages, mainly due to the impact of tougher federal mortgage rules.

That has subsequently trickled down into home values, with the west coast markets posting year-over-year price declines, while the GTA experienced only moderate, single-digit growth.

So, does the old adage of real estate being among the wisest of investments still hold true? To find out, Zoocasa.com compared average year-over-year price performance to that of three popular investments:

  • The S&P / TSX Composite Index (-11.6%)
  • The S&P Canada Aggregate Bond Index (+1.5% y-o-y)
  • And a high-interest savings account (+1.1%)

Let’s take a look at how real estate price gains (or lack thereof) compared to the returns on these investments in the adjacent infographic.

GTA only market to outpace investment comparison

The GTA (Toronto) housing market ended the year on a positive note, posting an increase of 2.1% for the average home price of $750,180, and the only market to outpace all three investment types.

However, the market lost a considerable bit of steam over the course of the year, unable to hold onto the 9.9% gains achieved at the market peak in June, when prices hit an average of $807,871. Year-over-year December sales clocked in 16% lower than in 2017, which the Toronto Real Estate Board attributes to the federal mortgage stress test. This hurdle, introduced last January, requires borrowers to qualify at a higher rate than their actual contract rate, resulting in a smaller mortgage amount and squeezing affordability in an already expensive market.

“Higher borrowing costs coupled with the new mortgage stress test certainly prompted some households to temporarily move to the sidelines to reassess their housing options,” said TREB President Garry Bhaura, in the board’s December report.

Vancouver values fall from last year

It has been an especially painful year for the Greater Vancouver MLS, as sales have dipped a whopping 31.6% from December 2017: the lowest level of activity since the year 2000. That’s translated into an average price decline of 1.7% to $1,032,400. Continue Reading…

5 tips for new parents wanting to own their own home

Posted By |

By Ernesto Mar Domingo

(Sponsored Content)

Owning a house may sound daunting. It can be an instant switch that can make you feel excited, nervous and really conflicted.

Although home ownership is a trial and error thing, it is a possible goal if you aim for it. One thing that can help you with this journey is a solid house-buying battle plan.

Like any other major purchases, you need help, research, and a strong resolve, but as a parent, you may be more motivated on this goal. After all, there is nothing greater than getting your own roof for your family.

Ready to embark on this ride to successful homeownership? Here are five tips to get you on your way.

1.) Know what you and your family need

We all have a certain dream house. While we may rather live in a castle or a glass house, we have our family to account for.

It is crucial that you choose with your brain and not your heart. To do this, you need to acknowledge what your family needs. You need to think of your lifestyle and look for a home that perfectly fits this kind of living.

Knowing what you need in a home is the first step in owning one. There are many kinds of houses: apartment, single-family home, condominium space or even a cottage in the countryside.

Aside from this, you also need to write down how many rooms, bathrooms, kitchens, and other utilities you need. Do you need a garden? A large garage? Balconies facing the sunsets? You should take all of this into consideration.

However, be realistic. You can’t exactly buy the best and grandest home you can imagine. Unfortunately, we have what we call a budget. In the end, choosing a house will still go down on how much you can afford.

2.) Save. Save. Save.

The biggest question in owning a home is glaringly challenging: how much can you afford?

But do not let this keep you down. With a grueling but fruitful savings regime and iron-clad perseverance, you can save up enough money for your dream home.

How?

You can:

  1. Create a budget plan.
  2. Give your savings a time frame to move things up.
  3. Cut down any unnecessary bills and payment.
  4. Earn larger amount money.

3.) Stick to your budget

The idea of maximizing all your income and savings sounds reasonable enough, right? Unfortunately,  it is not practical. Continue Reading…

Is your neighbourhood in a Sellers’ Market for homes?

Posted By |

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

Deciding whether or not to get into the real estate market? While budget, location, and home type will be among your top considerations, there’s another metric that can help inform your move: the buyers’ conditions in your desired neighbourhood.

Understanding whether you’ll be dealing with a sellers’, buyers’, or balanced market is key to crafting your offer or listing strategy. Those trying to buy a home amid tight sellers’ conditions will need to be ready to participate in bidding wars, for example, make aggressive bids, and be prepared to drop offer conditions to be competitive. Entering a buyers’ market indicates more real estate inventory and choice for buyers, and often the room to negotiate.

Sellers are also wise to take these conditions into account as listing during a relaxed market may mean adjusting pricing expectations; it could be a better idea to wait for the market to firm up before trying to sell your home.

What is a Sellers’ Market?

But what actually classifies a market as buyers’, sellers’, or balanced? A common misconception is price. However, while prolonged conditions will eventually influence home values, a buyers’ market doesn’t also indicate better affordability, and vice versa. Rather, these conditions are determined by a metric called the sales-to-new-listings ratio (SNLR).

The SNLR is calculated by dividing the number of sales by the number of new listings within a specific housing market over a period of time. It reveals how many of the homes listed for sale are selling within that time frame, and sheds insight into how competitive the market is for buyers and sellers. According to the Canadian Real Estate Association (CREA), an SNLR between 40  to 60% is considered a balanced market, with below and above that threshold indicating buyers’ and sellers’ conditions, respectively.

Getting the Bigger Picture

A great thing about looking at SNLR is you can get as local as you need to with your market assessment; a buyer or seller can understand what’s happening at the neighbourhood level, whether they’re looking for condos for sale in downtown Toronto, or Etobicoke homes for sale.

The SNLR can also be used to measure activity over larger geographic areas. At a provincial level, Ontario’s housing market remains in balanced territory, with an SNLR of 56%. However, this ranges quite widely throughout the province with some surprising results, according to recent data compiled by Zoocasa; a look at October sales and new listings numbers reveals Ontario’s most affordable markets are actually among the tightest in terms of sellers’ conditions.

Sellers’ conditions in Ontario’s most affordable markets

In markets where homes sell for less than $500,000, 10 of 12 municipalities could be considered sellers’ markets. Continue Reading…