10 Closing costs when buying a home

1. Land transfer tax.  When a home changes hands, many provinces and a few municipalities charge a property transfer tax or title transfer fee.  Rates are usually on a scale of 0.5% to 2% of the home’s value and can add thousands to your purchase price.  First-time homebuyers qualify for rebates or exemptions in some provinces.

2. Appraisal fee  Your lender may ask you to have a home appraised to confirm its market value.  Fees vary depending on a property’s value and complexity, but are typically around $250 - $400.

3. Legal fees  A lawyer or notary will help protect your interests by reviewing your purchase agreement, searching the property title, and ensuring that all documents are completed properly.  Basic legal fees start between $500 and $800, plus disbursements, with added services as needed.

4. Home inspection  An inspection can help make you aware of issues related to a house’s structure and systems, such as plumbing and electrical, and recommended or necessary for repairs.  Fees range from about $350 to $450.

5. Home/fire insurance  Your lender will require proof that the property is insured in case of fire and other damage.  Insurance costs vary, depending on the coverage needed, but budget for at least $500 a year.

6. Costs for newly constructed homes  If you’re buying a brand-new home, be prepared to settle any items not quoted in the original price, including upgrades or paving and landscaping fees.  New homes are also subject to 5% GST or 13% HST, although this is often included in your purchase price.  A federal rebate reduces the GST or the federal part of the HST to about 3.5% for homes valued at $350,000 or less.

7. Prepaid costs  If the seller has paid property taxes, water bills, or utilities in advance, you’ll need to reimburse these at closing.  This can add hundreds to your upfront costs, but means these bills will be paid for your first month in your new home.

8. Tax on mortgage insurance  If you have less then 20% down payment, your lender will require that you obtain mortgage default insurance.  You can roll the cost into your mortgage payments, but the PST is due at closing.  For example, if your mortgage insurance is $5,000 and the PST is 8%, you’ll pay $400.

9. Title insurance  Title insurance can safeguard you against fraud and problems with your property title or survey.  Fees range from $150 to $350.

10. Moving-in costs  Before the big day, budget for all those last minute things.  $100 or more to rent a van or  a few hundred for professional movers, $50 to $60 for a locksmith to rekey your locks, and cleaning supplies.  Such incidentals can easily come to $500 or more.

GET A TAX BREAK

Under the federal First-Time Home Buyers’ Tax Credit, you can receive up to $750 in tax relief to offset your closing costs.

The Mortgage Woman.

"These opinions are entirely my own and do not represent TD's position, strategies or opinions".

The Cost of Mortgage Interest

I am looking to achieve financial freedom – all debts and mortgage freedom. 

That is my goal and where my focus has been for the past two years.  I have written before about the advantages of clients increasing their monthly mortgage payments by even $50.00 a payment, to help them pay off the debt as fast as they can – but I feel that sometime people need to see the numbers. 

My husband and I have a current mortgage of $166,000 as of December 2010, plus a Home Equity Line of Credit.  Currently we have been focused on paying off the Home Equity Line of Credit, while I have been slowing increasing our Mortgage Payments almost monthly.  Often I have increased the bi-weekly payment by just $40.00, just waiting to see if my husband will notice. 

As of today, he has not even noticed that our payments are $200.00 more bi-weekly then they were last year.  My husband is a very smart man, but we have been increasing our “savings pot” in our joint account where all of our bills are debited.  All HST rebates, our grading deposit, and any extra income I bring in, goes into our joint account. 

So here are the numbers:

December 31, 2010

Principle Balance                              $166,000

Principle & Interest Payment            $400 biweekly

Total of all Principle & Interest          $34,783.12

Total Cost of Borrowing (Interest)      $19,631.94

Balance at Maturity                          $150,688.50

Amortization Period                          24 Years and 4 Weeks

May 1, 2011                  

Principle Balance                              $164,359.73

Principle & Interest Payment            $500 biweekly

Total of all Principle & Interest          $38,815.87

Total Cost of Borrowing (Interest)      $16,900.75

Balance at Maturity                          $142,444.61

Amortization Period                          17 Years and 1 Week

By increasing our payments by only $100.00 – I took 7 years off my Mortgage.  7 YEARS!!!! I also saved $3,000 in interest over the remainder of the term. 

If you are serious about living debt free it is very easy to make small increases on your mortgage, without breaking the bank. 

Review your finances, and see if you have an extra $100.00 per month to spend on your debt repayment.  It will pay you more equity into your future! 

“These opinions are entirely my own and do not represent TD's position, strategies or opinions".

Is a flexible mortgage important to you?

So in the past three weeksI have done what I set out to do!  I have increased my monthly PAC with my RRSPs, I purchased a $30.00 Starbucks gift card for the month of March which is my "allowance", AND I filed my taxes.  I have decided to use my income tax in the following way: 50% to my mortgage, 30% into RRSP/TFSA and 20% to my debt repayment (Credit Card bill!).

I feel so good about what I have done in the past couple of weeks, and tonight I am going to purge my home office!  I am hoping to sleep like a baby tonight!

When you are looking for a mortgage through other banks and brokers, is a flexible mortgage something that is important to you?  Do you know that if something happened in your family life, that your current provider CARES about YOU? 

Whether it's an expected life situation such as a parental leave, going back to school or even an unplanned event, many of our customers choose to respond quickly to these situations by taking advantage of our flexible mortgage payment features that give them more choice and control over their lives when they really need it.

"Customers typically shop for their mortgage according to the rates, so I always make a point of highlighting the flexible options we offer," says Chris Smith, Manager Financial Services, TD Canada Trust. "I've been able to secure a number of appointments and sign new mortgage customers based on the fact that they see more value in the flexible features than a lower rate. It gives them comfort knowing they will have options if and when their needs change."

Here's a quick snapshot of our flexible mortgage payment features:

• Skip a payment - skip one monthly mortgage payment a year up to four regular monthly mortgage payments during the life of a mortgage.
• Payment reduction - a choice of reducing mortgage payments for up to four consecutive months based on any accelerated payments or lump sum payments made on the mortgage; or reducing a monthly mortgage payment a year up to four regular monthly mortgage payments during the life of the mortgage.
• Payment vacation - take a break from making regular monthly payments for up to four consecutive months on any accelerated payments or lump sum payments made on the mortgage.

With each of these options, you need to be aware that interest continues to accrue.
The new flexible mortgage payment feature calculator is a great tool that gives our customers an opportunity to explore scenarios and decide which option can best suit their unique situation. For more information on flexible mortgage payment features visit www.tdcanadatrust.com.

The Mortgage Woman

"These opinions are entirely my own and do not represent TD's position, strategies or opinions".

$5.00 a day for Starbucks, or $5.00 a day for Retirement?

When I imagine how I am going to spend the rest of my life, my plan does not include working until 65 or 70.  Most Canadians are not saving into their financial plans early enough in their life, and the retirement age is increasing dramatically. 

How much money do you have for retirement? 

How much do you think you will need in order to live comfortably?

Did you know that the earlier you invest in the future, the greater returns and more money you will have later in life to actually enjoy them? 

Think of what your simple pleasures in life are, and how much they cost you. Some people find pleasure in smoking cigarettes ($10.00 avg per pack), some have a tanning pleasure ($40.00 a month) and others find pleasures in gym memberships or yoga studios ($40.00 to $100.00 a month). 

Lately I have begun a love affair with a Grande, Non Fat, No Water, Tazo Chai Latte from Starbucks.  This costs me a wonderful low cost of $5.00 a day.  No matter how much money I have in my bank account, I am always able to afford my $5.00 a day for my guilty pleasure.

If YOU can find $5.00 a day for something that is a guilty pleasure, then YOU should be able to find $5.00 a day to invest in to YOUR FUTURE. 

If you have not started a RRSP contribution plan, make that your number one goal for the month of March.  It is time to start paying your self first, so set up a monthly “PAC” which is a pre-authorized contribution into a Registered Mutual Fund...it can be as little as $50.00 bi-weekly.  But as your income grows – so does your contribution amount. 

Find out if your company has a Group Plan, or a contributing Group Plan – and use it.  Set up an appointment with your HR representative, your bank, or friends and family to discuss what you should be doing. 

If you are over the age of 21, then I mean YOU!

If you have contributed into investments by the age of 25 on a yearly basis, between the ages of 45 to 55 your investments will annually be compounding the most amount of interest and you will see the savings grow.  Now if you wait until the age of 35 to start contributing – even if you put more money into your investments on a yearly basis, you still will not see the annual compound until you are 55 to 65.  On average, those who start contributing at a younger age, will make more interest over the term – and will be richer, faster. 

Finally, when you invest, you gain the benefits of tax refunds!  Who doesn’t like money back from the tax man at the end of the year?

Take that money and either INVEST or MAKE A LUMP SUM TO YOUR MORTGAGE.

You can make a lump sum payment on your mortgage every year up to 15% (check with your financial institutions %) of the original amount of your mortgage.  Or you can make smaller payments in the min. amount of $100.00.

So here are my goals:

1. I am going to increase my PAC tomorrow with my Advisor and set up a meeting to review my “financial life plan”
2. I am going to put $30.00 on a Starbucks gift card, and that is my allowance for the month.  I will be limiting myself to 6 Grande Non Fat Non Water Tazo Chai Lattes each month
3. My 2010 tax refund will go directly onto my Mortgage this year

I wrote it, so I am doing it. 

I will stop investing in my Starbucks guilty pleasure, and start investing into my financial future that will actually pay me back at retirement.

What is your plan?  Do you have $5.00 or even better $10.00 a day to invest into your future?

 
"These opinions are entirely my own and do not represent TD's position, strategies or opinions".

The Happiness Project

I recently started reading “The Happiness Project” by Gretchen Rubin, and realized that the last two years of my own life I have been experimenting with the pursuit of happiness. 

If you met me two years ago, you would have seen a woman who was sleeping through her own life, watching it completely pass her by.  I was taught to go to University, get a good job, get a promotion, buy a house, get married, have children, and these are the necessary steps to take in living a “good life”.  However, these steps made me miserable, unhappy, and literally panicked with where my life wasn’t going. 

I was at the point in my life where I was dragging myself out of bed at 6am, and racing to beat the clock.  I was always worried to be in trouble if I was late, or I would be judged by others that I wasn’t at my desk 15 minutes early.  I would sit in my little cubicle, stuffing my face with toxic food and watching my waste line grow, while I would listen to employees complain about their job, the company, the boss and everything and anything.  By 5pm I was defeated and once again running to beat the clock and the Go Train home. 

Every day was the same tired business or working for a “good life”.  At the end of the day I would be so exhausted from accomplishing nothing that matter to me that I would resort to my lululemons, carbohydrates and my big comfy couch.  My motivation to do anything outside of my job was completely gone, and my attitude showed it.  And then the clock would hit 6am and it was time to do it all over again.

I finally said enough was enough.

Now I work for myself as Mortgage Specialist, actually making a difference in people’s life.  I can see how my work is actively affecting others, and I receive my own gratification on a daily basis.  I finally woke up from my life, and stopped watching it pass me by – it is such a small change but has made the most profound impact on my life and the relationships I share with others.  I have the time and energy to focus a part of my life to my passions, like coaching figure skating and synchronized skating teams.  I do not feel badly for taking time out of my day to give back and volunteer for great causes in my community like the Joseph Brant Memorial Hospital, Party in Pink and Burlington City Rep Hockey.

When you discover what you are passionate about, you will find that your life will be much more successful in the pursuit of happiness.  

In my Happiness Project, it wasn’t about how much money I earned, it was about finding that “work – life balance” that you hear people talk about.  In following my passions and by taking the risk of giving up my corporate

Bay St

job, I have become richer in motivation then I could have ever imagined. I just have a life balance.

The following are a couple of things in the Happiness Project book by Gretchen Rubin that she decides to follow each month in order to create her own Happiness.  I decided that I would follow them as well. 

  

January

-         Go to sleep earlier

-         Exercise better

-         Toss, restore, organize

-         Tackle a nagging task

-         Act more energetic

Going to sleep earlier is something I am still working on, however toss, restore, and organize was an absolutely amazing cleansing for the soul activity.  As Spring approaches, I encourage everyone to take a Sunday to tackle your office, your bedroom or any room that has been piling up!

February

-         Quit nagging

-         Don’t expect praise or appreciation

-         Fight Right

-         No dumping

-         Give proofs of love

As a woman, to quit nagging is like asking me to go out in public without my make up on.  However, I focused a lot of my energy on thinking about “how I said things”, rather then just blurting out comments.  This has also helped me in the fight right task too!

March

-         Launch a blog

-         Enjoy the fun of failure

-         Ask for help

-         Work smart

-         Enjoy now

Well if you are reading this, then you know I have launched a Blog!  I am trying to spend each day working smarter, and asking for help when I need it.  I tend to try and believe I am superwoman who can get the household duties completed, life duties, family duties and work duties all done in one day.  I have realized my husband does like helping me, and he feels good about taking care of me.  So asking for help once and a while is good for both of us!

What is your Happiness Project? 

Ask yourself how do you measure success?  Is it to be rich with money, or rich in life?

"These opinions are entirely my own and do not represent TD's position, strategies or opinions".

Live for Today - Live in the Now!!!

In the last 8 months of my own personal life, I have been hit with some tremendous life experience and the realization that I am getting older. 

• 15 years ago today, I lost my father to a heart attack.  I have already lived half my life without him, and it still feels like yesterday he was picking me up from the skating arena. 
• In March 2010 my mother suffered a stroke while on vacation in Palm Springs, California.  This shocked my family’s whole world and turned it upside down.
• In November 2010 one of my brothers’s was admitted to the Hospital and told that my family had a genetic disorder that increased the risk of heart disease.  Two weeks later my brother was recovering from a quintuple bypass surgery.

All of these horrible situations have one thing in common – were their loved ones protected?  Did they have life insurance, or mortgage insurance? Was a Will in place?

I hear many people my age say, well I am young and I have tons of time to do that.  As each year passes, we are constantly pushing major things off with the statement “next year we will get to that”.

Well I am here to tell you to Live in the Now – Get Protected. 

When my husband and I got our first Mortgage, we took Mortgage Insurance.  There are many critics out there who are against Mortgage Insurance through the banks, based on it’s a sliding scale.  However, at the age of 25 I was able to know I was covered with my $20/month if anything happened, whether I died, or even worse – If I lived and was critically injured. Mortgage Insurance is set up so that if you die, or if you are Critically Ill, the bank will pay off your Mortgage for you or for your remaining loved ones. 

I do not sell Life Insurance, nor do I set up Wills – but I am here to tell you this is essential to your life plan. 

My father was in between benefits and insurance coverage at work when he suddenly passed.  He had actually cancelled his coverage in Canada as our family was moving to the U.S. However, in those brief weeks prior to the move, he had a sudden massive heart attack.  My mother went on her trip to Palm Springs with no Travel Insurance.  The first time in her whole entire life, and in the end it cost her thousands of dollars to receive treatment.  My brother is 36 years old, with no life insurance and no mortgage insurance.  If their life plan included mortgage insurance, during his recovering process his family could focus all of their efforts on health and not have to worry about making an income to pay bills. 

Ask your self these questions:

• If something were to happen to me tomorrow, would my loved ones be protected?
• Could my spouse afford to live in our current home without my income?
• Do I currently have Life Insurance or Critical Illness through my employer?  How much does it cover?
• Do I have any assets to pass on to my spouse or children to keep them protected?
• If I become Critically Ill, do I have enough savings to pay my mortgage and bills when I am unable to work?
• If I do become Critically Ill, and cannot afford my Mortgage, where will I live?

At the age of 29 years old I finally realize what it means to protect and care for our loved ones.  I have always understood that we need to invest in TFSA accounts, RRSPs, and take care of our health.  But now I know that we need Mortgage Insurance, we need Life Insurance and we need a Will.  As we get older, these things will start to cost more – so stop waiting. 

Stop thinking you don’t need it.

Live for today - Live in the Now

"These opinions are entirely my own and do not represent TD's position, strategies or opinions".

Who is the Mortgage Woman?

Welcome to the MortgageWoman blog!

How many people in the world can say that they absolutely love what they do? I get the joy every day to help people, to teach them how to save money, and to be involved in the number one most important purchase of their lives - their mortgage on a Dream Home! My number one goal is to show my clients how to pay down their mortgage faster, and become financially free.  Many people go in to the bank, get a mortgage, and never think about it again.  They make their monthly payments, review their yearly statement, and file it away with the rest of their paperwork.  Ask your self these questions: What if you switched your payments from Monthly to Bi-Weekly? What if you increased your Bi-Weekly payment by $50.00? What if you used your tax refund every year to make a lump sum on your Mortgage? What if you changed your current Amortization to a less amount? What if you broke your current interest rate, paid the penalty, and renewed at a lower interest rate???? (Don't be scared of this option!) You could be saving thousands in interest over the term of your mortgage and earn more equity in your home!  Why pay more in interest, when you could be mortgage free faster? Every year make it a point to revisit your Mortgage, just like your Insurance, Taxes, Investments.  It is the largest Investment you have ever made, why would you not make sure you are on the right track to pay it off?  Let's repeat - Your mortgage is the single largest investment of your life! My goal with this blog is to inspire and motivate you to pay it off faster! The MortgageWoman "These opinions are entirely my own and do not represent TD's position, strategies or opinions".