Understanding Mortgage Insurances

There are a number of misconceptions in the world of mortgages when it comes to the word “insurance” let’s cover the various meanings off.  High Ratio Insurance: Also known as CMHC, mortgage default insurance, Portfolio Insurance In Canada, all Banks must have this insurance on any mortgage they lend on with less than 20% down payment.  It is a one-time premium paid by the borrower (normally included into the mortgage)to the insurance company that insures the lender if the borrower ever defaults on the mortgage, the lender gets all of their money back. Three companies in Canada offer this insurance, CMHC which is owned by the Government, as well as Genworth and Canada Guaranty.  CMHC insurance is backed 100% by the Canadian Government, the other two are 95% backed by the Government.  This has been a source of discussion recently as CMHC has neared it’s legal insurable portfolio limit of $600 billion in mortgages. If your mortgage is insured, what does that mean for you?  Very little unfortunately…the benefit is to the lender, though as long as you pay your mortgage, that insurance will never need to be used.  The one benefit to having a insured mortgage is that it […]

How To Deal With A Shopping Addiction?

Confessions Of A Shopaholic………………………….My name is Erika and this is my story. Maybe I Should Be Called a Shopaholic Online? You know, I’m not really sure when I came to terms with being a “shopaholic,” but after looking back at the last few years of my life, it’s easy to diagnose myself now that I have taken a step back and fully understand how the addiction was affecting me. I have to admit…I think the world of online shopping was a catalyst in sparking this addiction. For some reason, when I buy anything online, it doesn’t really feel like spending money. When I’m at the store, I can touch different fabrics and really feel the quality of what I am spending my money on. Since I can see and touch things physically, it makes me not want to spend my hard-earned money even more since I have to pass over my card or cash. The actual ACT of shopping is still not something I partake in as often as I shop online. Why is Online Shopping So Enticing? For one, everything online just looks so perfect. The lighting is just right, the item is shown in that perfect angle, and look…your […]

RESP Investing In Your Child’s Education-The Basics

Registered Education Savings Plan : The Basics What is an RESP? Being concerned about how to afford a college education for my son, I made some enquiries about a Registered Education Savings Plan, or RESP.  This is a special savings account that makes provision for post-secondary education costs. If you are like me savings and investing are very important to my family. Those who subscribe to a RESP are also entitled to receive the government’s Canada Learning Bond (CLB) if they qualify, and the Canada Education Savings Grant (CESG) which, as I found out, can provide a welcome boost to the funds. Who is it for? An RESP is set up to provide financial support for those aged 17 years and over, and who are undertaking eligible courses of study.  Contributors to a RESP are normally parents or guardians; however, a grandparent, other relative or even a family friend can also make contributions. How do you get one? A simple two-step process helped me to get things underway.  First of all I checked out my Social Insurance Number (SIN), and then I chose an RESP provider.  My SIN gave me access to government benefits and programs and, when I began to […]

The In’s and Out’s Of A Debt Reduction Plan!

Photo Credit According to Statistics Canada the ratio of household debt to personal disposable income in 2011 was 150% up from 66% in 1980. Did you know that in 2009 two-thirds of Canadian households had outstanding debt that averaged $114,400. Is a debt repayment plan right for you? Do you need to think about credit card debt consolidation? If you have debt, then the answer is YES to a debt repayment plan more importantly if you are struggling to pay back debt to potentially consolidate. If you are struggling it is very important to let the people you owe money to know that you are working on paying them back. Let them know you have  a plan of action. Creditors want to know they will get their money so communicate with them and tell them. If you don’t they may sell your debt to another company who may charge you a bigger interest rate. Some creditors would rather make something than nothing but the third-party will stop at nothing to get it out of you. It’s also a good time to mention that at least once a year you should order your free Canadian credit report so you have it in front of […]

Top 3 First Time Home Buyer Mistakes!

Top 3 First Time Home Buyer Mistakes Everyone who has bought a home has been through it, the scary, nervous time of learning a new language, relying on strangers you don’t know and making massive decisions you are sure will ruin your life.  All this while getting opinions from everyone you have every known whether you want them or not! Despite all this there is an upside…you also get to have you own home! In the hope of helping those who have not gone through this “rite of passage” to home ownership, I want to share with you some of the most common mistakes people make and how to avoid those yourself. #1.  Most people don’t work out what their budget is. You are on reading this here on Canadian Budget Binder, so I am sure you have done one by now, but you would be shocked how many people are not even aware of what they can afford, let alone what their plan is, other than wanting a home.  A detailed budget and plan of potential costs is a must to start this journey.  Staying with it is a key to living happily ever after! #2.  Little or no […]

Canadian Credit Cards Can Provide Some Great Perks! What’s your cup of Tea?

Is there any mystery as to why some people were not meant to own a credit card? When I talk to most people about debt they tell me that it’s the fault of the credit card they carry in tucked in their wallet. They fail to recognize that the card isn’t doing the shopping, it’s them. It’s reality that a credit card is sometimes a necessity to book a hotel, rent a car  or use paypal and other on-line frequencies. If you don’t have one the consumer hears , you are not privy to use our services or we don’t know if we can trust you.  It’s like a gold ticket for these retailers, you mess up, they have your number. If you credit score isn’t up to snuff you might find yourself  lagging your mates who are able to capitalize on all the perks a credit can offer. What is a Credit Score? According to Industry Canada a credit score is a judgement about your financial health at a specific point in time. You can check your credit score for free once per year.  You are rated on a scale of 1-9 where a 1 means you pay your bills within 30 days […]

Canadian Students College or University Bound Prepare Your Finances NOW!

I remember when I was a young bloke and on my way to University the world was in the palm of my hands (so I thought).  I truly believe I had my head on straight back then and today given the way I continue to pay myself first. That doesn’t’ ring true for most of my school mates, at least what I witnessed even here in Canada. I went back to school for 5 years and learned that debt is debt no matter  what country you live in. Most of my mates who did work while attending University simply blew the money on pints of beer down at the pub and buying crap they didn’t need. I was a simple guy who just wanted an education and a good career. Before cutting the umbilical cord from me mum and dad to start what would be a journey of reality I set some clear goals for myself. I knew I didn’t want to come out of school with any debt. I was young when I started to learn about the value of money so this was a must. I worked on weekends and in the evening to save money for University. I […]

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