3 things that help when you're buying a house

We know that buying a house can be crazy stressful and there are so many moving parts that it can feel like you're spinning! We put together a few of our top tips to making the house-buying process a little less stressful.

1. Find a good mortgage broker and get pre-approved

Find a good mortgage broker and get pre approved prior to looking for a house so you know how much you can afford.

Go through your new monthly cash flow "with house" and make sure you feel comfortable and are aware of your new monthly expenses like mortgage payment, life insurance for your mortgage, property taxes, hydro, strata, house insurance, house maintenance, water bill, rsp home buyers repayment plan, etc.

2. Find a great realtor with experience

Find a great realtor that will help you find what you are looking for and then taking you through the emotional rollercoaster of making an offer for the house you love.

You make an offer, a counter offer is made, you accept or counter the seller's counter. A lot of back and forth. Finally you and the seller agree on a price and conditions.

Once there is an agreement in place for a price--now the work begins.

You have only so many days to provide a deposit down for the house, need to schedule a house inspector-- make sure the house has good bones, need to get details on the house so you can get a house insurance quote, if there is a wood stove-does it have to be inspected for house insurance purposes?

If there is septic-does it have to be pumped out and inspected?

Do you have financing in place?

Have you looked into life insurance for your mortgage amount?

Have you picked a lawyer to sign the final mortgage papers?

3. Understand the REAL costs

Understand what the closing the costs are/will be. Prepaid property taxes or utilities, whether or not there will be property transfer tax, legal fees, inspection fee, house insurance, moving costs and on top of that you need your down payment.

4 things you need to know before you buy mortgage insurance

Mortgage insurance can seem like a tiny insignificant decision because you choose mortgage insurance at a time when you’re making some of the biggest decisions of your life.

So, you just get some insurance to cover your mortgage.

What’s the big deal, right?

Wrong.

Choosing your mortgage insurance and insurer carefully can be AS important as which mortgage you choose and what house you buy.

In addition to choosing the amount and type of insurance, you usually have to decide between owning your insurance individually or getting insurance through your bank.

If you end up needing your mortgage insurance, there are 4 seemingly small details that can have a big impact when the going gets tough.

All mortgage insurance is NOT created equal.

At Amrosa Financial, our job is to make sure you know the pros and cons of every financial decision upfront so that you can make educated decisions about your future.

So, we thought we’d help you get up to speed quickly on the things you need to know about mortgage insurance.

We break down the main differences between buying insurance through your mortgage provider or buying an independent policy through one of many insurance companies that Amrosa Financial works with.

1. You want to be able to designate your own beneficiary

 

Insurance policy through the bank

Typically, when you buy your insurance through the bank, the bank is the sole beneficiary - no matter what your circumstance. If you pass away, the bank gets the death benefit and your mortgage is paid off, there is no option for funds to go to your loved ones.

 

Independent insurance policy

However, with individual life insurance policies you can designate your own beneficiaries, add, delete and change as like.

You can also designate more than one beneficiary so that you can control how the funds are paid out at the source.

AND your beneficiaries will receive the death benefit tax free and they can decide whether to pay the mortgage off in full or pay a portion, or use the funds for something else.

2. If your insurance coverage declines, so should your premium

 

Insurance policy through the bank

When you buy insurance from the financial institution that issued your mortgage, the insurance is tied to your mortgage so as your mortgage balance declines, your premiums don’t!

So, with banks over time you pay the same premiums for less and less coverage.

 

Independent insurance policy

However, insurance purchased through one of the many companies Amrosa Financial works with - you pay premiums based on your current age and those premiums are set for the entire term of the policy.

Your insurance coverage doesn’t decline just because your mortgage balance does.

3. You don’t want your insurance tied to your mortgage

 

Insurance policy through the bank

When your insurance is tied to your mortgage, that means that if you change your mortgage to lower your rate, refinance, or get better terms, you have to reapply for mortgage insurance (and re-qualify) meaning that the rates can go up, particularly if there has been a change to your health.

 

Independent insurance policy

An independent policy allows you to not only keep and own your policy independent of your mortgage, but it can be arranged in any amount to include all your insurance needs. (Want to add some additional insurance to cover final expenses? no problem).

You can change your mortgage without impacting your insurance at all.

4. You want your insurance to be customized based on your whole financial picture

Sure, you need mortgage insurance but do you need insurance to cover any other areas of your life?

In many cases the cost of additional insurance independently can be far less than the cost of mortgage insurance through the bank - particularly as the coverage declines with the mortgage balance.

 

Insurance policy through the bank

Policies through the bank only cover the balance of your mortgage and that coverage declines with the balance of your mortgage. If you need insurance for anything else, you have to apply separately.

 

Independent insurance policy

If you do need insurance to cover other debts or for final expenses, your independent policy can be customized to solve all of your insurance needs - not just your mortgage.

Not to mention you are underwritten at the time of coverage which really helps if a claim is submitted.

 

In Summary…
 

We’re not saying that you should never buy mortgage insurance through the bank but these are definitely things to keep in mind as you’re deciding what’s best for you and your whole financial picture.

At Amrosa Financial we take the time to sit down with you, look at your entire financial picture as well as your financial goals and design solutions just for you.

Whether it’s mortgage insurance, tax and estate planning, or investment advice - we take it all into account with a holistic approach.

We’re happy to help you figure out what route is best for you and your situation.

Book a free no strings attached consultation to help you determine the best path for you and your family.

On the call, we'll discuss your current needs along with your future goals to determine if an independent mortgage insurance is the best solution for you.

If going through the bank is the best fit, we’ll tell you that too. But at least you’ll know that you’re making the best choice for you.

Who is Amrosa Financial anyway?

Great question.

We’re two women who have collectively over 40 years of experience in Financial Services and realized that we can help people in a different way.

Transparency, honesty, and service above all else hold us together like glue.

Both of us do this work because nothing feels better than helping families protect themselves for when the going gets tough.

Read more about us here.

How to create more disposable income

We can all use a little more money in our pocket to spend how we want, am I right?

Here are 5 quick ways to create more disposable income.

Pay your insurance annually

Whether it be life insurance, car insurance, disability insurance, house insurance—if you pay monthly most times there is a built-in fee or interest rate that is applicable. You could save yourself up to 8% per year.

Example: Say you were paying $52.10/month on a life insurance policy—on the anniversary date change to annual paymentsà you pay $582.36 that will cover you for the year. That’s a total savings of $42.84 (or 6.85%) over the entire year. Now imagine if you do that with all your insurance policies…..it adds up.

Call your utility companies annually

What deals does your internet/telephone/cable provider have available? Could you bundle with one company and save each month? Check out what other companies are offering and see if your current provider can match.

Save on groceries

Plan your meals around what is on sale- check through the grocery store flyers or if you want an app check out Flipp.

Make a list, stick to the list and know what you can spend. Shop for the entire week if you can. The less frequent trips to the grocery store the less temptations there are. Use Coupons—Checkout 51 is another helpful app that can be used for online coupons.

Save on your credit card interest fees

Try calling the 1-800 number on the back of your card to speak to a representative about lower interest rate options. Sometime there is an annual fee but if you have to pay $50/year to save on 7-8% per month, it might be worth it.

Review your bank account package and service fees

Do you have the right bank account plan for your needs? An example might be if you are on a “Pay as you go” type plan and are charge .50 cents per transaction and you use your debit card for everything….you may be overpaying and might qualify for a better account package that suits your needs and save yourself some money there each month.

Another example might be you hold a high balance in an account that does not pay any interest to you or very little…..are there options to have a high interest savings account?  Be careful to watch for additional service charges though.

4 things you can do to improve your credit

Credit scores are used by Financial Institutions and businesses to measure the risk of someone’s ability and desire to repay their debt obligations and provide insight to their overall level of responsibility.

Credit scores are based on an individual’s history and are used as a guideline to predict their future likelihood of being financially responsible.

Employers and landlords will most likely conduct a credit bureau on potential employees and renters to ensure their stability and overall character to determine if they are the right ‘fit’.

Maintaining a good credit history is easier than trying to rebuild a bad one.

Even insurance companies and others will question your previous history as it applies to bankruptcies to determine your overall risk.

Your credit score is driven by a few key factors including:

1. The number of inquiries (hits) that are completed on your credit score – the fewer the better. The more hits you have portrays that you are a ‘credit seeker,’ the more hits you have. Every hit reduces your score by approximately 5 points – so the fewer, the better.

2. How much you use of your overall credit. For example, if you have one credit card and are at your maximum limit your usage is 100%. It is better to have a lower percentage of utilization.

3. The length of time you have been reported on the credit bureau. If you have a credit card for a long time and it is paid as agreed this helps to increase your score.

4. Insuring you make your payments on time is key – ratings range from 1-9’s with the lower being better. Bankruptcies and consumer proposals will lower your score.

5. Avoid any collections and deal with them as soon as possible, even if it is a dispute

Here are a few pointers to consider:

• Ensure any debt obligations are paid as agreed – setting up an automatic payment and maintaining extra funds in your bank account to cover is a good idea.

• Many companies will accept an automatic payment from your credit card or bank account.

• When using your credit card consider making a payment to cover your purchases on a regular basis so it doesn’t add up.

• Pay all bills on time including utilities as small collections on your bureau are annoying and have to be paid for when applying for credit.

• If you have a dispute over a credit issue it is best to deal with it right away – you can get in touch with Equifax to learn more about your personal credit rating.

• If paying bills online make sure you make a payment a few days prior to its due date as it does take a few days to settle. Consider setting up the bill payment as soon as you get the bill.

• If rate shopping for a mortgage it is a good idea to use a mortgage broker as they only do your credit bureau once. If you go to various Financial Institutions they might each pull a credit bureau and this lowers your credit score as you appear to be a credit seeker.

• Credit cards in joint names are only reported on the ‘primary’ card holder. It is important to ensure payments are all made as agreed even when life happens and you are in transition.

• It's important that you have your own credit card to build your own credit – for instance, it often happens that one spouse is the secondary card holder and doesn’t build their own credit history

It is important to be aware of your credit rating and keep track of all of your credit cards and Banking facilities.

In this day and age more and more often we are at risk of identity theft and keeping track of your transactions can help to avoid or minimize these risks.

You can also set-up credit alerts through various companies to be notified if someone has pulled your credit bureau.

Cheers to a good credit rating and financial health!