Archive for March, 2010

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Fast-tracking to Mortgage-free

Wednesday, March 31st, 2010

Just imagine as you’re going through your favourite coffee drive-thru this week that a well-dressed gentleman stops and offers you $11,000 for your medium double double. Who would hesitate? We’d take the cash. It’s not so far-fetched. In fact, if you take that coffee budget and apply it to your monthly mortgage payment a mere $30 extra per month -you could save yourself about $11,000 over the life of your mortgage.

Most of us can accept the idea that we must borrow money to purchase a home. We look for the best mortgage, and then just keep doling out the money for as long as it takes to pay it off. Most Canadians choose to amortize their mortgage over 25 years. That’s a long financial commitment, and it could more than double the cost of your home. But with good planning and a few smart tactics you should be able to enjoy your mortgage-burning party much earlier.

Here are a few strategies for fast-tracking your mortgage:

1. Increase your monthly payments. Rather than choosing your amortization period first, ask yourself how much you can afford each month. For example, you may feel that you can afford $1,000 per month. You’re delighted when your $125,000 mortgage only demands an $800/month payment (at a 6% interest). But make a monthly payment of $1,000 instead, and you’ll shave 8.75 years and almost $46,000 off your total interest cost.

2. Take advantage of lower rates. In addition to reducing the overall interest component of your mortgage, you can take the opportunity to pay down more principal faster simply by maintaining your original payment. You should even increase your payment if you can, to reap the benefits of the cheapest mortgage money in memory. Again, you could take years and thousands of dollarsoff your ontario mortgage.

3. Tie mortgage payments to your pay schedule. Many Canadians are paid on a bi-weekly schedule. If you accelerate your payments to bi-weekly instead of monthly, you could improve your own cash flow and fit in an extra payment each year. That means that you’re paying off principal faster leaving you with less interest to pay overall. It doesn’t seem like much but like putting your coffee budget to work the bi-weekly strategy can have you mortgage free four years sooner, with almost $22,000 in savings.

4. Use any bonuses, tax refunds or “found money” to pay down principal. This is especially valuable in the early years of your mortgage. If you receive an annual bonus or other lump-sum compensation, see if you can put it against the principal. An extra $1,000 per year is a great way to fast-track to mortgage-free!

5. Consolidate your loans into a new mortgage and use the savings to boost your payments. If you’re a homeowner with some equity, you can use your mortgage to consolidate your other loans: student loans, car loans, etc. Add the money you’ve been spending on loan payments to your mortgage payments, and you could see big savings in overall interest.

With ontario mortgage rates at historic lows, you should take the opportunity to get an expert mortgage analysis from an independent mortgage broker with access to mortgages from a wide spectrum of lenders. You’ve got a great opportunity to put some fast-track tactics in place. You’ll remember what a good decision you made at your mortgage-burning party.

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Protect Your Deposit When Buying Real Estate

Tuesday, March 30th, 2010

When you start the process of buying a home or any type of real estate, you’ll no doubt hear the term “earnest money deposit” (EMD). So what exactly is an EMD?
An EMD becomes relevant when you are ready to make an offer on a property. In most states, your Real Estate Agent prepares the offer on your behalf. The offer usually takes the form of a written contract that is submitted to the seller by way of their agent.
In addition to the offer document, sellers typically expect an EMD. An EMD is a monetary deposit submitted via check to demonstrate to the seller that you are a serious buyer. In some regions of the country, only a photocopy of the check is submitted with the offer, and the original check is delivered to the appropriate entity if the offer is accepted. Ask your Real Estate Agent to clarify how deposits are handled in your region of the country.
The check is usually made out to an independent third- party such as a Title Company, Escrow Company, Real Estate Attorney or your Real Estate Broker. Ask your Real Estate Agent to clarify who will hold the EMD.
The amount of the EMD sellers expect varies by region. The EMD amount is based on the customs and practices for a region, but is generally from 1% to 2% of the purchase price. In a competitive market place where demand exceeds the supply of homes, some buyers may offer a higher EMD than expected to impress the seller of their intent. In determining the amount of your EMD, consult your Real Estate Agent and balance the need to demonstrate your serious intent, against the good business practice of minimizing the deposit amount.
The amount of the EMD is usually applied to reduce the purchase price of the property or to cover closing costs, as you dictate. For example, if you are purchasing a $300,000 property and you give an EMD of $3000, then the remaining balance owned at closing is $297,000 (plus closing costs). Alternatively, you may direct that the EMD be applied toward the closing costs.
Once a valid contract for purchase is created, an independent third-party usually holds the EMD until the purchase is either completed or cancelled. At this point, the money belongs jointly to both the seller and the buyer.
In cases where you make an offer that is accepted but later decide to cancel the offer, the terms specified in the contract (or state law) will dictate if, and under what circumstances, the EMD is returned to you. Be aware that you could loose your deposit if you do not not comply with the terms of your contract. Your Real Estate Agent can provide you information about how EMDs are dealt with if a contract is cancelled.
Since state law varies by region and practices can differ even within the same state, be sure to consult your Real Estate agent about the rules that apply to EMDs in your region of the country. You should also be aware that the EMD is not related to any down payment that you make toward your home loan.

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Ways To Remodel Your Garage

Monday, March 29th, 2010

The most important thing to consider when remodeling your garage is how you are going to use it. Garage remodeling is when you transform that almost neglected part of your house that your wife and children do not even dare to enter. Remodeling of garage is more efficient today because of recently developed garage organizing and storage systems. Remodeling of your garage is very important aspect of the home remodeling. It is probably the quickest way to add much needed space to your home.
If you are considering any sort of home repair this may just be the one that should be first on your list, because it is often the most visible exterior element of a home. Its no wonder that garage remodeling is getting a closer looks from homeowners. How to deal with a cluttered garage is an issue faced by every family at some point and garage remodeling and organization are among the most popular solutions. Therefore, the first important step in garage remodeling is to empty out the garage completely of its contents.
The garage door is beginning to get more attention from todays homeowners as garage remodeling is becoming more important to them. To give you some idea of what you might be looking at, a new garage door usually costs somewhere around $1,000, and a garage storage system is another $1,000. For garage door tips, consider changing your old garage door. Newer garage doors are more secure and make better use of technology for safety and security.
An old door and opener could be a real threat for your children playing near the garage. The door needs to be maintained every now and then to ensure its continued safe use. When a door and opener gets really old, periodic maintenance gets even more expensive as some worn out parts would have to be replaced. The best way to go is to replace that old door and opener with a new one. Aside from looking better and saving on maintenance costs, these doors and openers contain better technology than the old one you have right now.
Nevertheless, a home survey found that the garage door is now the most used exterior door when entering the home for both men 44 percent and women 42 percent. The front door was close behind as the second most used exterior door. Wood composite garage doors can also be embellished with stylish details such as unique trim designs, beautiful woodgrain patterns, decorative hardware, multi planked grooves and a variety of window inserts to help bring more natural light into the garage.
However, for more extensive and lasting renovations that include insulation, flooring, soundproofing, electrical wiring and plumbing, you will probably need to hire a general contractor who can plan and oversee your garage renovation. Garages are notorious for being functional, yet unattractive, dull concrete floors, rough looking exposed beams and a general lack of organization are often the culprits. Some careful storage planning, a little drywall and may be a bit of epoxy floor covering can truly make a less than incredible garage into something worth showing off. As part of your garage remodeling process you may wish to give attention to the garage floor.
Generally speaking, these floors are made from concrete and often detract from the appearance of the garage due to various stains. However, there are a number of methods that can be utilized to give attention to the garage floor. One of these methods can be the application of paint to the garage floor. Another method of sprucing up a garage floor is through the use of a durable garage flooring product. It is strongly suggested that if utilizing this method of refinishing the garage floor that professional installers be contracted with.
While garages main use is to store the car, you can also use the garage as a storage area. If you are thinking about expanding your garage area by diminishing the garden area, then this idea works for you. If a potential home buyer has always wanted their own work space, your garage remodel could be the thing that sells your home. The nature of your work space will determine what renovations are needed. Be sure to build a play space, whether it is a poker table, pool table, ping pong table or football table, a remodeled garage can be a mecca of home entertainment. Whether you need to de clutter the garage itself or want to use the space to transfer items out of the main part of your home, the garage is a common place for home storage.
Your garage is not only the place to keep your car, but if proper care and arrangements are made, you can make over the garage into a new place in your home. When thinking about home remodeling, we make out remodeling plans, choose proper plans and take care of basic remodeling accessories in the home. So, you need to be very careful while selecting door for your garage or your flooring materials.
While kitchen and bathroom remodeling continue to lead the way in home improvement projects, garage remodeling is beginning to come its own as more and more homeowners decide to use their garages for more than just storing their vehicles. Garage remodeling can be a home improvement strategy that provides many benefits to homeowners.
They can be remodeled into a new store place where you can make out some place for storing other homely accessories. Garages are very important part of the house and have equal importance such as the other sections of the house. Garage remodeling is probably the quickest way to add much needed space to your home. Garage remodels do not average the same rate of return, although they do certainly increase the value of your home.

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