Tag Archives: home ownership

BBC StoryWorks #2: The case for staying with variable rate mortgages at today’s interest rates

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The second article of six planned to appear on the BBC StoryWorks website in Canada has now been published. You can find it by clicking on the highlighted headline here: Strategies for a Low-Interest World.

As explained in the first instalment, the articles (written by me) looks at Covid-19 and the impact on the real estate and mortgage industry. The articles will appear every week and run into November.  Later articles will look at the case for locking in to fixed-rate mortgages, the investing experience following Covid, optimum strategies going forward and close with retirement strategies in the age of Covid.

The second article just posted looks at why variable-rate mortgages may still be the optimum route for homeowners to go, seeing as interest rates seem destined to remain “lower for longer.” Mortgage rates are as low as anyone could reasonably have hoped to see in their lifetimes, but rock-bottom rates are also putting upward pressure on home prices. As noted in the first article, even prices of suburban and rural properties are rising, as the pandemic changes the supply/demand dynamics of where we work and live.

Rates are unlikely to spike upwards as long as the pandemic is a factor. Based on recent statements by central Banks around the world, it’s reasonable to expect interest rates will remain “lower for longer,” if not indefinitely at least for the foreseeable future. In mid-September the US federal reserve said rates won’t be raised before 2023.

Both fixed and variable rate mortgages are under 2%

In Canada, fixed and variable rate mortgages are being offered at less than 2%.   Continue Reading…

The Ups and Downs of passing your Home down to Family

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By Holly Welles

Special to the Financial Independence Hub

You’ve recently encountered an important decision. Should you pass down your home to your family? Many people make this choice before weighing a few pros and cons. It’s essential to examine this situation from every angle. Otherwise, you may create an unnecessary and unwelcome problem for you and your loved ones.

Here’s a look at whether you should pass down your property:

1. )You could redistribute your Wealth

Here’s a central reason why individuals decide to pursue this process. While houses themselves don’t always appreciate, your land has likely accrued value over time: and your family can benefit as a result. That occurs because land as a commodity isn’t readily available. Many homeowners don’t own any assets more expensive than their houses. You can ensure your family gains more wealth by giving them your residence.

They’ll likely thrive financially if they take specific actions. For instance, they could sell your home to create a monetary cushion. They may even want to move from their current residence to reduce their expenses. In some cases, it’s smart to pass down your house so you can assist them in managing finances.

2.) You may cause issues between Heirs

It’s not guaranteed whether your heirs will find a way to manage this transaction. Various concerns may arise between them. It could create jealousy if you trust your home to one sibling or child. But if you divide your home amongst multiple heirs, disagreements over ownership can still happen. You may cause more problems than you originally anticipated.

You’ll also want to consider what may occur if you’re alive while this process takes place. You may have to face a few different scenarios that create difficulties for you personally. Make sure to choose a method that protects you. It’s always best to think about your interests, too. If you move forward with this transaction, take steps to resolve issues that may occur after you pass.

3.) You can downsize to a smaller place

As you age, it’s often harder to care for a large home. That’s why many older adults tend to downsize into a rental community. They don’t have to deal with the costly maintenance that tends to come with more expansive space. It may also be a more immediate experience for some families:  if you have unexpected health issues that don’t allow you to climb steps, it’s likely time to find a home without an upstairs level. Continue Reading…

Renting out your Home: Here’s what you need to remember

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By Rebecca L. Clower

Special to the Financial Independence Hub

There are many valid reasons why a house is to be rented. Maybe you don’t have to sell to buy one, and you could like to maintain it as a property for your investment. If they purchased the property, the rental of the house could have been your plan.

Other homeowners may still have to rent because they’ve got to move and can’t sell yet. Perhaps they were transferred by an employer and realize that they can’t sell their house because the present market is only not suitable for home sales. Sellers of submarine homes would prefer not to sell in the short term and could choose instead to ride the marke

There is, in all cases, a correct and incorrect way to lease your property. Although some errors may be minor, others may be much more serious. At Tamarindo Real Estate | Costa Rica Real Estate and Rentals, any errors are corrected to provide the best experience.

How to prepare your Home for Rentals

On the downstream market, the rental of the house is probably not going to get away. The tenants at these times are more careful and more selective because of the increased availability and the expectations of rentals.

Make sure the equipment works and is in good health for your new tenant, by thoroughly cleaning your home. You can secure this area from the rest of your home if you have decided to rent a room or a place in your house.

When the house is straightened out, develop a list that describes what it is attractive to put on the market. Take note of the features you want commonly such as washing and drying facilities, air conditioning,g and garage. To “sell” the property, use the rental conditions.

Next, post a home ad on renowned websites and in local journals. Furthermore, some real estate agents will help owners rent out their homes, though if the agent finds you a renter, he or she will make a commission.

Alternatively, you can employ a property management firm, but you have to pay for them. You have to rent a house. The costs vary by company but often vary between 8% and 10% of the monthly rent, and additional charges may apply.

It may seem like a simple task to transform your home into residential property. Still, it is important that you talk to real estate lawyers and accountants to see to it that you comply with tax law, zoning regulations, and local property rules.

Know what costs are tax deductible

It is essential to know exactly what costs are deductible. You can qualify for taxation deductions. Also, there are limitations as to how much you can deduct annually and how much you can deduct may differ from the rental activity in your tax return. Continue Reading…

Want to save money on Energy Bills? Go Solar

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By Gary Bordeaux

Special to the Financial Independence Hub

Most people are well aware that solar power is better for the environment, but did you know it can have a positive impact on your wallet, too? Start saving today by converting your home to solar.

Affordability

Year after year the cost of installing a solar panel system has been decreasing dramatically. In the last decade alone costs have dropped nearly 70 per cent, putting solar energy well within the financial reach of most homeowners. More options for ownership have also become available, and you can now finance or lease a system. That means you can see immediate savings on your energy bill with lower upfront costs. Contact the most trusted Colorado solar provider to learn how you can affordably convert to solar today.

Reduced utility bills

It’s almost a given that when you rely on a traditional energy source your bill will increase each year. What if instead of paying more and more you could watch that payment decrease instead? With a well-designed solar installation, your utility bills will shrink: potentially even down to zero if your system generates all of the energy your home requires.

No dynamic pricing

What is dynamic pricing? It’s when a service provider raises rates at peak times, and it’s becoming the norm in the energy industry. Instead of one flat rate for energy usage throughout the day, utility companies increase pricing when the demand is highest. Most home energy consumption occurs from 4 p.m. to 9 p.m. on weekdays, so utility companies raise the cost of electricity during that time period. It’s meant to discourage use during high-demand hours, but what it really does is drive up the total you see on your bill.

When you’re off the grid, you aren’t subject to paying more during peak periods. You’ve generated your own abundant supply of solar energy that is 100 per cent free to use, regardless of when you choose to use it.

Usage rebates

Savings are provided to solar owners through a process called net metering, which makes it possible for you to profit from the energy made by your panels. Continue Reading…

Financial tips and tricks for savvy Home Buyers

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Image courtesy of Rawpixel

By Jim McKinley

Special to the Financial Independence Hub

Purchasing a house is a major investment, and finding one you can afford can feel like quite a puzzle. However, there are some smart, money-stretching strategies you might not know, but that can make all the difference in your financial situation. Read on for tips and tricks to help you land the home you’re dreaming about.

Dealing with Down Payments

One of the big hurdles for home buyers is gathering funds for a down payment. Lenders traditionally require 20 per cent down, which calculates to tens of thousands of dollars that many people don’t have sitting in their bank accounts. There are strategies for gathering those funds, like paying off credit cards and saving your cash, taking on a second job, or selling belongings.

Bear in mind that lenders will look at your bank statements to examine where your funds came from, and if anything looks fishy, such as a sudden large deposit, they might hold it against you. Mortgage lenders want to see financial stability, so big fluctuations, bounced checks, and irregular activity could damage your chances for a loan.

For home buyers struggling to come up with a down payment, there is good news. There are FHA loans available that permit as little as 3.5 per cent money down (in the United States). On top of that, you might be able to use gifted funds, which most lenders do not allow.

A couple other opportunities for special mortgages are available. Veterans can aim for a home loan through the VA, and for low-income applicants in rural areas, the USDA offers 100 per cent financing through Rural Housing loans.

Squeaky clean Credit

No matter where you apply for a loan, the lender will examine your credit history. Chances are you know if you’ve made some mistakes, but sometimes credit reports have clerical errors on them. Thankfully, there are ways you can clean up your credit score, but it can take a little time, so if you plan to apply for a loan, get started early.

Start by requesting a free credit report and give it a thorough once-over. If you find errors, you will need to dispute them with the reporting agency, explaining the problem and documenting the error. After that, there will be a time period in which the error can be substantiated by the appropriate credit institution, and if they fail to do so, it is then removed from your credit report.

It can also help to pay down your debts because lenders will examine your debt-to-income ratio. As InCharge points out, you will generally need a result no higher than 43 percent of your income. Keep in mind the lender will include your potential mortgage payment in that calculation.

Rethink your Search

House hunters often search traditional home listings in hopes of finding the home of their dreams. However, thinking outside the box can mean broadening your search. For example, foreclosures can be a bargain under the right circumstances, but you should weigh the pros and cons carefully. Continue Reading…