January 2010

Using Plastic or How Not To Die financially By Plastic

Have you ever noticed that if you pay your credit cards on time they just keep on increasing your limits.If you start out with a $1500.00 credit limit within 6-9 months you could have a $5000.00 credit limit if you have paid your minimum balance within the 30 day agreed period.

If you are capable of paying off large sums your credit will increase even faster.

If you start collecting cards and increasing your limits it is very easy to max out the cards.

This can cause you to be paying thousands of dollars in interest every year.

So one tip never use more than 80% of the credit on any card at one time.This will cause your credit score to drop.If you need to use a larger percentage get them to increase your line of credit first.
Tell them not to increase your line of credit if you can’t handle credit wisely.

Use only one credit card on a regular basis that way you limit yourself to one payment monthly.

Times New Roman;”>That doesn’t mean you shouldn’t get other cards and work your credit line up to a large amount if you have a good purpose for it.
Some of these credit card companies will let you use your card as a line of credit at very favourable interest rates.You can use this to fund money making schemes by freeing up other cash. Just make sure you aren’t doing this on a wing and a prayer with something that you know nothing about.

For instance I have a card with a $45,000. line of credit on it. I have never used this card for purchases.I have always called and negotiated with them for loans with very low rates of interest, then I would pay large payments on the card paying if off very quickly.

This caused them to increase it again and again and again.For the last few years I have just waited for them to call me.The minute the line of credit is no longer in use they will start calling and if I want some funds for an investment I can negotiate.
Last week they called me. The rate started higher but as I didn’t have an investment in mind I didn’t need any money. The rate quickly dropped to  2.99% for an unlimited period of time, as in forever.

They wanted a 1% upfront fee which I negotiated away. 

What did I do? Since this is 2 .3% below my mortgage rate I took 80% and used it to pay off a large chunk of my mortgage .  This allows me to make larger monthly payments on a chunk of my mortgage while saving 2.3% in interest , which turns into thousands of $ in savings over the next several years and I can get that bit of mortgage knocked off completely in the next 3years
You always have to remember that in doing something like this it is showing on your credit bureau at all times as it is a line of credit and not a mortgage.
Therefore it is imperative to be dead on time with all of your payments. You have to do it in a way that works for you not against you. Therefore be careful about cancelling cards or having your amount of credit reduced.
Cancelling can cause your credit rating or Beacon score to drop somewhat and it can take several months to pick up those extra points. 
Hope this helps.

Canadian House Prices What’s Real and What’s Not

Newspaper editorials have been overflowing lately with speculation on how rising rates may lead to a surge in mortgage defaults. In response to this issue, CIBC Economist Benjamin Tal released a report that took a closer look at the facts and determined history doesn’t support this premise. Below is a summary of Tal’s report.

House Prices – Some Overshooting
Over the past two years, the degree of volatility observed in the Canadian housing market has been unprecedented. Within this short timeframe, house prices fell by almost 13%, only to rebound by an impressive 21%.

Meanwhile, resale activity is now rising by close to 67% on a year-over-year basis after falling by close to 40% in 2008. Housing starts are presently 33% higher than in April 2009 despite dropping by more than 50% earlier in the recession.

In fact, no other segment of the economy has rebounded as fast as the housing market, making it one of the real surprises of this recession. This rapid uptick in housing activity, in the face of recessionary conditions elsewhere in the economy, raises concerns about its sustainability, and is causing some to wonder whether house prices are, in fact, rising too quickly given current economic fundamentals.

Tal estimates that the Canadian housing market as a whole is indeed beginning to overshoot its “fair value”. At just under $350,000, the current average price of a home is estimated to be roughly 7% over what would be consistent with current housing market fundamentals such as interest rates, income growth, rents and demographics.

But this modest overshooting is, far from uniform across the country. Those figures are skewed to western Canada, which has seen the most dramatic swings in house prices over the past 24 months. That market now appears to be overvalued by roughly 10-15%, suggesting that the imbalance in the rest of the country is much more modest.

Note, however, that overvaluation does not necessarily mean a bubble or a dramatic price correction.

Given that the current overvaluation is occurring in a context of historically low interest rates, what we are most likely witnessing is a temporary period of exuberance that is “borrowing” activity from the future, as households take advantage of lower rates and accelerate their borrowing and home purchasing activities.

To the extent that current activity is simply a redistribution of sales from the future to the present, the housing market of tomorrow may be in store for a more muted level of activity. Housing starts will also catch up with the sudden spurt in demand, with the increase in supply helping to moderate price trends. Rather than plunging, house prices are more likely to stagnate in coming years (or fall modestly in the most overheated markets) as fundamentals catch up with a market that has gotten ahead of itself.

Tax Tips For 2010

With the rush of the holiday season and New Year’s celebrations now over, many Canadians are turning their attentions to their taxes. Following are some useful tips to help simplify your 2009 tax filing process and get the most out of future returns.

While the 2009 tax filing deadline is months away, January is often the best time of year for
Canadians to evaluate their overall tax strategies, especially as time will run out to realize a variety of tax-saving opportunities early this year.

Advice for homeowners and prospective homebuyers

In 2009, significant tax changes were introduced in the federal budget to benefit homeowners, prospective homeowners and even homeowners who renovated their home, cottage or condo. These include: changes made to the RRSP Home Buyers’ Plan; eligibility for the new non-refundable First-Time Home Buyer’s Tax Credit; and the Home Renovation Tax Credit (HRTC).

A $5,000 increase to the RRSP Home Buyers’ Plan means that first-time homebuyers can now withdraw up to $25,000 from their RRSPs for a down payment – tax- and interest-free.

The First-Time Home Buyer’s Tax Credit includes a $750 tax credit for first-time homebuyers to help with closing costs, such as legal fees, disbursements and land transfer taxes.

And if you’ve been thinking about doing some home renovations, keep in mind that the 15% HRTC of up to $1,350 only applies to eligible home renovation expenses undertaken before February 1st, 2010.

RRSP Contributions

A Registered Retirement Savings Plan (RRSP) continues to be one of the best tax shelters available to the average taxpayer.

Eligible RRSP contributions are deducted directly from income reported on your tax return.
This means that you save taxes at your marginal rate, which may be up to 50%, depending on your income level and province of residence. In addition to the initial tax savings when the contributions are deducted, all income earned inside the RRSP accumulates tax-free until the money is withdrawn.

Remember that you have 60 days after the calendar year to make a contribution that qualifies for a tax deduction for that year.

RESP Contributions

Registered Education Savings Plans (RRSPs) allow people to save for the post-secondary education of children or grandchildren on a tax sheltered basis while reducing taxable income. There are, of course, other advantages to RESPs. With an RESP contribution of $2,500 per child, the federal government will contribute $500 in the form of the Canada Education Savings Grant to the RESP. If a client has prior non-contributory years, the annual grant can be as much as $1,000 in respect of a $5,000 contribution.

Do You Have a TFSA?
With the introduction of Tax-Free Savings Accounts (TFSAs) on January 1st, 2009, 26 million Canadians aged 18 and older received $5,000 in tax-free contribution room from the federal government. On January 1st, 2010, an additional $5,000 in tax-free contribution room was added to each account. Now is an excellent time to discuss your options for making the most of this new contribution room.

Remember that it’s important to review your overall tax-planning strategy with a professional to ensure you’re making the most of any opportunities available to you, especially as a result of new savings and investment vehicles, credits and policy changes that came into effect for the first time in 2009.

HOMEOWNER TIPS – Humidifier Maintenance

Whether you have a power humidifier or just a simple pan-type model, you will have to clean your humidifier on a regular basis to ensure proper operation. As water evaporates, it leaves behind mineral deposits that clog the mechanisms in the humidifier, eventually causing it to stop working. You will be able to tell when cleaning is appropriate as the mineral deposits will be noticeable to the eye and to the touch. The sponge drum in a power humidifier will be crusty and stiff instead of soft and pliable. Check at least twice a year and more often in the winter when your humidifier is likely to be working harder.

Homeowner Tips – Hiring A Snow Removal Contractor

Following are some questions to ask when choosing a snow removal contractor:
1. Does the company have insurance (general liability insurance specifically covering snow removal operations)?
2. Is the organization registered with the Better Business Bureau?
3. Are the employees of the company covered by workplace health and safety insurance?
4. How long has the firm been operating?
5. Does the company have solid references in your area?
6. What type of equipment will be used?
7. How will the company communicate with you

CBC Expose of Toronto Area Condo Builders

Buying a New Condo In Toronto

If you would like representation with builders please contact us and we can explain how our service works. Our service costs you nothing. Aeriol Nicols at (416)-465-4545

Question With regards to Condo & Loft Maintenance Fees

I was wondering if there any way you can send me a listing of Lofts that are for sale in the GTA which don’t have any maintenance fees.

Thank you for your help and I look forward to your reply.

Paola Z.

No, there is no such thing Paola. Lofts come under the category of condominiums which means there are common areas with shared hallways, heating systems, roofing systems, plumbing, underground parking spots etc etc. you get the picture. Common expenses pay for the maintenance of these many items. Plus each common expense has a portion called Reserve Fund. The reserve fund is a percentage that is designated by Law which must be put aside for long term repairs. If you are in the price range you may consider free hold townhomes instead

Keller Williams – Our Charitable Good Deed Event

At Keller Williams we have a charity called Keller Williams Cares. We do good deeds for our own charity and for others around Toronto. Last night we had a jam packed theatre at the Papermill at Todmorden Mills 67 Pottery Road. This year T3 productions put on a very professional production or the musical Annie. Although last night was our charity event with wine and cheese afterwards the musical was fantastic and runs to the 28th with matinees on both Sat and Sunday at 2 p.m. It would be well worth your investment of $25.00 per ticket to see it or to take the kids.

Here’s another little taste.

5 “End of The Year” Tax Tips

5 “End of the Year” Tax Tips

1. Fix up the house. The deadline for the home renovation tax credit (HRTC) is coming up quickly. It’s a 15 percent tax credit and applies to purchases between $1,000-$10,000 for a maximum of $1,350. Materials must be purchased in 2009 but can be installed in 2010, but only labor completed in 2009 may be counted.
    
2. 2.Contribute to your children’s education. If your child or grandchild doesn’t have a Registered Education Savings Plan (RESP) and they turned 15 in 2009, the last chance for them to get in is December 31, 2009. By contributing at least $2,000 this year, they will be able to collect a 20 percent Canada Education Savings Grant for 2009 and be eligible for 2010 and 2011. Missing this year’s deadline will make them ineligible for the next two years as well.
3. Donate. Donations must be made by December 31 in order to get a tax receipt for 2009.
4. Contribute to a registered disability savings plan. This tax-deferred plan is open to residents that are eligible for the Disability Tax Credit, their parents, and other eligible contributors. A maximum of $200,000 can be deposited and there are no annual limits.  Contributions in 2009 may be eligible for the 2009 Canada Disability Savings Grant and the Canada Disability Savings Bond.
5. Splurge on office furniture. Even if you purchase at the end of the year, you can still take half a year’s depreciation on new office equipment and furniture for small business owners and self-employed. Computer equipment purchased between January 27, 2009 and January 30, 2011, can be written off 100% in the year it is purchased.

Credit Card Guidelines

 

Finance Minister Jim Flaherty has issued a new, voluntary code of conduct for credit and debit card companies. If not widely adopted, the code may become government regulations.

The initiative intends to promote fair business practices by creating transparency for merchants and consumers to clearly understand the costs and benefits of the cards. The fees credit card companies charge merchants can vary widely, and this announcement now comes after years of consumer groups and businesses voicing concerns that the disparity of fees can cause unpredictable harm to the bottom line.

The code will be on a sixty-day consultation period where credit card companies and businesses alike will have the opportunity to provide feedback before the code goes into effect.

Source: The Toronto Sun