Mortgage

Confused About Rented Dwelling Coverage? We Have the Answers

Confused About Rented Dwelling Coverage? We Have the Answers

When you are first starting out as a landlord, it can be difficult to navigate all the legal requirements as well as ensure your investment is fully covered from risk. Finding the right insurance for your rental property is of the utmost importance, especially since people you don’t know all that well will be staying in your property.

While rented dwelling coverage is not required by law, it is highly recommended that you take out a policy to cover your rented condo a or home. Something you should know about rented dwelling coverage going in is that most insurance companies consider rental properties to be a totally different type of risk since compared to an owner occupied dwelling. Different underwriting criteria and guidelines apply to rented dwellings.  you, the owner, are not living there full time. Getting this insurance will provide you with certain types of coverage, including:

Building Insurance covers damages to the structure on your rental property. The structure could be either a single dwelling like a house or part of a multiple dwelling such as a condominium. Some insurance providers will only cover certain types of damage to your rental property while others will provide fuller coverage.

Premises Liability provides coverage to you if someone is injured on your rental property caused due to your negligence.

Property Insurance covers your belongings that are in the rental property such as furniture, appliances, window coverings, etc. Talk to us to assist you in getting  the most comprehensive coverage provided by various insurance companies.

Rental Income Insurance

Rental income

Having a new stream of income from your rental property is a tremendous benefit to those who have secondary properties, especially if you have a mortgage to pay off. However, if your rental property gets damaged and tenants cannot occupy it, you have no way to earn this income.

Getting a rental income coverage can provide the income you would have earned in case of an insured loss.  In most cases, providers of this type of insurance will allow you to set the amount you’d like to recover if you ever need to make a claim. Getting the proper amount of rental income coverage is very important taking into account the length of time it would take to repair the damaged property.

Require Tenant Insurance

Another way to mitigate risk is to make it condition of rental agreement that the tenant has their own tenant insurance policy.  Your insurance will protect your property but not your tenants or their belongings. Another reason to require tenant insurance is that if one of your tenants causes damage to someone else’s home, you could be held responsible if they do not have their own personal liability insurance policy.

Your rental property is a huge investment. Not having it covered as fully as it could be would be a huge mistake. Getting comprehensive insurance to protect your investment will pay for itself both in peace of mind and in case of an insured loss.

About the Author

kristopher

Kristopher Parks graduated with a Bachelor’s in finance at the University of Calgary.  He has over 10 years of experience in the insurance industry as an agent/broker.  He enjoys spending his free time with his family by going to hockey games and camping.  If you’d like to contact him, you can do so at his LinkedIn.


Ways to Pay Off Your Mortgage in Advance

Lower mortgage rates often allow a homeowner to pay off mortgages in advance. However, you’ll need to determine if that’s a good idea or not. You may explore certain other alternatives like that of investing a portion of your extra income in a 401(k). You may pay off your mortgage earlier if you haven’t applied for any academic aid for kids based on your need.

Consider a few good ways for paying off your mortgage earlier:

Opt for short-term mortgage refinancing

You may consider refinancing into some 15-year or 10-year mortgage for paying off your mortgage within a short-term. Let’s assume you have a mortgage for $200,000 at a fixed rate of 4.5 per cent for 30 years. Suppose, after a period of 5 years you agree to refinance into a loan for 15 years at a rate of 4 per cent. By doing this, you’re actually paying off your mortgage some 10 years in advance and it will help you save a little over $60,000 with the exclusion of your refinance closing costs.

Compared to all 30-year term mortgages, those worth shorter terms come with interest rates between quarter and three-quarters of the percentage point. But you’ll need to bear the closing costs when it comes to a mortgage refinance. The value of monthly payments is bound to become higher when you opt for a quicker payoff. In case you don’t have adequate money to pay for your mortgage on a particular month, then you’d be locked in. You should only consider refinancing if the old interest rate is higher than the new rate.

Pay an extra amount every month

If you can afford to pay a little more every month, then you may enjoy the benefits of an advance payoff without having to worry about the additional refinance costs. You may recalculate your monthly payment by enjoying the fruits of an advance payoff without bearing any extra charges for refinancing your mortgage. The interest and the principal amount that you pay every month have to be divided by 12 and added to your monthly payment for up to 12 months. For all these 12 months, you’ll be making about 13 payments.

By doing so, you’ll end up saving an amount over $18,000 in terms of interest and get your mortgage paid off in advance by about three years. In order to get your additional payments adjusted properly with your loan, you’ll need to get in touch with the mortgage servicer. Just to make sure that your payment has been adjusted properly, you ought to pay more attention to the following statement. Let your servicer know how eagerly you’re trying to repay and seek out the best repayment options.

Make an additional payment every year

It might be in your interest to bear an extra monthly payment every year instead of paying an extra amount every month. You may continue to save an amount worth 1/12th of your monthly payment each month, which you can pay once every year.



You may try doing this for the very first month after you achieve your mortgage for $200,000, which is distributed over a 30-year term with an interest rate of 4.5%. You’ll end up saving an amount worth $27,000 in terms of interest and your mortgage will be repaid by about 4 years in advance.

You may get your money directed towards the mortgage regardless of whether you’re experiencing an unforeseen windfall, some tax refund, or achieved a bonus for your performance at work. However, you must take care of your other financial needs in advance. For that, you’ll need to assess your entire financial situation and achieve a true picture.


3 Steps To Early Retirement!

The dream of retiring early for many, remains just that – a dream! Escaping from the rat race and the 9-5 drudge is a tempting thought, but unfortunately feels intangible. People do retire early though, what is their secret? Retiring early would give you the chance to enjoy life to the full whilst still in good health. You could opt to travel to the places you have always wanted to visit or learn a new sport.

There are ways of planning for an early retirement, but it must be put into action as soon as possible – today preferably! This article aims to highlight ways of saving enough money to enable you to retire early.

early retirement

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Invest any savings

If you are lucky enough to have savings, make them work for you. If you take the decision to invest your savings in stocks and shares, or participate in financial trading it could be potentially very lucrative and will be a huge boost to your retirement fund. Investing your hard earned cash is not without risk and you need to be fully aware of the process. The internet has opened up opportunities for everyone to get involved in financial trading, up until recently financial trading was the sole domain of stock brokers in the city. There are numerous trading platforms to choose from and lots of advice available. CMC Markets is a trading platform which will guide you through the process of trading using contracts for difference (CFD’s). Many trading platforms offer the option of “practicing” first before parting with your well earned money. Financial trading is not to be taken lightly, always seek professional advice.  

Create a budget

To enable you to save enough money for retirement you need to budget carefully. This will enable you to squirrel away any money saved into your retirement pot. Saving sounds a simple concept, but it needs to be managed carefully. Start today and don’t put off until a later date. Putting aside a certain amount of money every month doesn’t depend on how much you earn, getting into the habit of putting a little by every month will soon allow your retirement fund to grow. It’s worth remembering that you won’t need as much money to live on once you’re retired. You won’t have the costs associated with the daily commute and any children you have depending on you are likely to have flown the nest.

Property

Aim to have any outstanding mortgage debt paid off by the time you retire. This will reduce housing costs dramatically. You could also release the equity in your home by downsizing, also you won’t need to live close to a commute route, enabling you to move to a cheaper area.

Investing in property could be another lucrative option, you could build up a portfolio of rental properties or embark on a renovation project.

 


How to Find the Best Mortgage Rate to Buy Your First Home

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One of the first things you want to do as a first-time homebuyer is to find the best mortgage interest rate possible. Unfortunately, finding the best rate is not as easy as going into your local bank and saying “give me a mortgage with a low-interest rate.” Finding a low-interest mortgage takes time, and it involves several factors such as a good credit score, low debt-to-income ratios and making a large down payment. With that said, it is not impossible to find a low rate if you know what to do before you apply for a mortgage. Here are some tips to help you get started.

Check and Fix Your Credit

best mortgages with the lowest rates and terms are set aside for consumers with good credit. According to FICO, all your coThe mbined debt should not. If your score falls in this range, then you will qualify for the lowest interest rates by mortgage lenders. A good credit score ranges from 670 to 739, and most banks consider you a low-to-moderate risk borrower. If you have good credit, you will most likely qualify for a low rate.

Since your credit score is vital to qualifying for a low-interest rate, you should pull a copy of your credit report from one of the three major credit agencies in the U.S.: Transunion, Experian and Equifax. It is helpful to get your score before you start applying for a mortgage. Once you know your score going in, it can give you more leverage while you are comparing rates on different mortgages offered by lenders.

Paying Down Your Debt

Your debt-to-income ratio, which is the amount of money you owe in relation to your gross income, also plays a critical role in qualifying for a low rate. Many lenders will charge you more in fees and interest if your mortgage payment is more than 28 percent of your gross income. Additionally, all your combined debt should not exceed more than 36 percent of your gross income if you want the lowest interest rate possible.

Before you apply for a mortgage, calculate your debt-to-income ratio. If you are paying more than 36 percent of your gross income on all your debt, you should pay down some of your debt to qualify for the lowest interest rates. If possible, pay down as many of your revolving credit accounts as you can.



Big Down Payments

Almost every mortgage lender will give you a lower interest rate if you make a down payment of 20 percent or more. A bigger down payment gives lenders a little more protection in the event you default on your mortgage. As an added bonus, a bigger down payment almost guarantees you will not need to pay for private mortgage insurance. In some cases, depending on your credit score, lenders will offer a low rate if you can make a 10 percent down payment.

Other tips that will help you score a low rate include shopping around for a mortgage, exploring different loan options and learning more about a mortgage refinance. There is no rule that stipulates you must accept the first offer given to you from the first bank your visit. Remember, all banks and mortgage lenders offer different interest rates, so it can really pay off if you shop around.


Must Have Qualities for Real Estate Agents

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Real estate is a tough business to be in since you are dealing with demanding buyers with varying requirements and often tight budgets. Real estate agents are required to adapt themselves to satisfy their clients and get maximum returns on their investments. There are certain qualities that potential buyers look for in a real estate agent. Having these skills makes them sought-after as an agent.

Let’s look at some of these requirements in detail.

Getting acquainted with the purchase process- Being informed and experienced makes one a good agent. When a real estate agent offers a deep understanding of the market and shows good negotiating skills, he can easily convert a potential client into an eager buyer. Also, familiarity with any paperwork involved in closing a house deal is must-have for a real estate agent. They will have to hold the client’s hand during this process, and they must appear to be professional throughout the transaction.

Honesty and integrity- In every business a certain level of honesty is required, but in real estate, it is even more important because if clients sense even a little amount of doubt, they will seek some other professional. Thus it is essential for real estate professionals to be reasonable in their prices and be honest in their dealings.

Technological skills- Some of the advancements have changed the way we do business even in real estate. Real estate agents can use the internet and social media to serve their clients in a better way. They can promote their business through websites and keep buyers and sellers informed about the latest trends. Thus being technologically savvy adds to the qualification of a real estate professional.


The Cost of Property Around the World

A dream of owning your very own private island or small castle seems a bit far fetched when you are expected to dish out around £550,000 for a 1 bedroom, 1 bathroom, 50m2 apartments in central London.

But what if we told you that you could very well own your very own private island at about half the price of a small flat in London or even a mini castle of your own at basically the same price if you simply chose to live in a different location?

Property in the UK is incredibly expensive compared to property in other countries. There are various factors that contribute to this dramatic difference in property value such as currency differences and geographical location with regards to business centrals. These differences make it entirely a possibility for you to buy more affordable, more luxurious property in other countries.

In Andalucia in Spain, for example, you could own your very own 406m2 mill with 5 bedrooms, 2 bathrooms, a terrace and playroom for as little as £282,354. Does paying 94.79% less per square meter surprise you? Then prepare to be amazed.

In Belize in Central America, you can buy a 4070m2 private island with a jetty and pool for as little as £291,171.

These property prizes are astonishing and definitely worth considering whether you are interested in property investment or in purchasing a holiday home outside the UK.



In the following infographic, you can check out a few other fantastic property deals in different countries across the globe that will give you a much better idea of what you could get if you just think outside the box.

 


Guide for Canadians to the new mortgage rules in 2018 – A rulebook to follow

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From 1st January, 2018, the Canadians who are getting a mortgage, or renewing their old one or refinancing their mortgage may require proving that they have enough ability to cope with the rising rates which are considerably higher than their contract rate. The new rules were announced by the federal financial regulator of Canada during October and this means that the borrowers who can even pay down 20% will now have to go through a stress test as it has been since 2017, January, particularly for the borrowers who have smaller down payments.

The state of Ottawa has already started taking steps to make the rules stronger and stricter around the mortgage market with a series of regulatory changes which are aimed at controlling the total amount of debt that the Canadians and the institutions take on. This turn taken on the Canadians can have a huge impact. Read on to know how these new guidelines will set an impact on you.

If you plan to purchase a house with 20% down payment in 2018

Having to qualify for the stress test clearly means that the banks will vet your application for mortgage by utilizing a qualifying rate that’s equal to the greater of the Bank of Canada or their contractual rate. So, if you’re going out for house-hunting in the coming year, you might have to settle down for a less amount home than what you could buy today. Or you would have to wait and save more for making a bigger down payment.

If you’re renewing your home loan in 2018

The lenders don’t require applying the stress test on the clients who are renewing their already existing mortgage loan. This clearly means that in case you don’t qualify the stress test, you will get stuck while renewing your loan with the current bank without being allowed to shop for a better rate. There are some cases where renewing borrowers will be forced to take the unreasonable rates from the present lenders.

If you’re refinancing your mortgage

In case you’re planning on refinancing your home loan, you will require qualifying according to the high stress state rates rather than the current contractual mortgage rate. Today, your lender would ensure that you can take out the best possible loan amount at the most comfortable rate.

All about credit unions

The OSFI or the Office of the Superintendent of Financial Institutions rules usually apply only to the financial institutions that are regulated by the federal government. This means that the Canadians should be able to continue borrowing money without taking a stress test if they take resort to credit unions that are provincially regulated.

Therefore if you’re a prospective mortgage borrower in 2018, you should make sure you have saved enough money for making the required down payment so that you can qualify through the stress test and end up with the loan of your choice.

 


Millennials are shaping the new housing market – A look into the details

home buyers

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As millennials are gradually getting older and grabbing jobs, they are beginning to book their new homes. Though entering the housing market seems to be delayed for few of them, yet as per reports from Zillow, the millennials are currently the leading generation of homebuyers. There are many who hold a false opinion about the millennials. If you take them collectively, they are considered as later bloomers as compared to their previous generations. People perceive that this generation is not much interested in settling down on their own and owning things. The millennials are purchasing homes and the millennial homebuyers are helping to power the present real estate market throughout the nation.

Millennials are the biggest group of home buyers

As per a recent study that was published by NAR and the Home Buyer and Seller Generational Trends of 2017 show that millennials are currently the biggest group of buyers who are booking their new homes and they constitute almost 35% of the entire market. Baby boomers represent 28% and hence millennials have surpassed the baby boomers as well. You’ll be surprised to know that this is the 4th consecutive year where millennials are being counted as the generation of most active buyers. The trend will continue soaring when this generation keeps growing, settling down and buying new homes .

The chief economist of NAR or National Association of Realtors reported that the millennials have been extremely slow in entering the market but off late, there is an uptick in the number of buyers who belong to the millennial generation. This is indeed a positive sign for the economy as with the rise in home values, there should be a larger number of people who should take part in the housing recovery process. Polls by NAH or National Association of Home-builders reveal that 90% of the millennials wish to buy a home some say.

What are driving the numbers?

It’s clear that this generation is taking quick action as they are the ones who see the values of homes rising and the interest rates getting lowered down. They are reaping the benefits of the opportunity to purchase their first-ever home with a mortgage loan which they can afford. One more natural thing is that the other end of the millennial generation is reaching that stage where it is natural to buy real estate. People are in their early 30s and late 20s and they’re settling down with their careers in starting off with their families.

One of the biggest concerns for the first-time home buyers is the burden of monthly payments. They might not afford to pay enough money down and for them the VA and FHA loans could help with better and reasonable rates.
It is great to see people buying their first homes and it is pretty good to know that millennials are acting faster. This is not only helping the country to continue with the recovery of the housing market, it will also power the real estate market.


To Buy or to Rent? That’s The Question

As we embark on our careers and start a family, many young adults choose to invest their hard-earned money by buying their very first home. It’s an exciting period with a lot of learning involved; from finding the right place to buy, to getting the right kind of insurance, and selling it again a few years later.


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In the meantime, however, you’ll see the same generation choosing to rent instead of buying – and they claim to have made the right decision.

While we can’t make a choice for you, we can show you the pros and cons of both options, so that you can find the one that works best for your lifestyle and finances.

Buy to build equity over time

Die-hard tenants can talk about the benefits of renting all they like, but they still won’t be able to build the kind of equity over time that homeowners can. You can always find another way to invest the money you would have spent on a home, though, and those who choose to buy are not joining some sort of exclusive investment club.

By renting, you’ll be paying down on someone else’s mortgage which is exactly why many people choose to buy instead.

Keep in mind that equity does not equal automatic profit, and the area you’ve chosen to invest in may very well take a dip in value over time. Renting your home may not build equity, but there’s also no risk involved as you can pack up and move when the street turns student-friendly.

Relocation is easier for tenants

Those who love the freedom of simply giving a few weeks notice before packing up their stuff and head to Thailand to work for a year or so, would never consider buying a place. Sure, you can become a landlord and find tenants – but it’s tricky to maintain a place when you’d like to trot the globe instead.

Not only can you stay flexible and volatile when it’s time to head abroad, but you can easily upgrade to one of those fancy city apartments without having to go through the hassle of selling first.

Responsibility for maintenance

While owning your own home gives a lot of creative freedom as you may decorate and spruce it up as you please, you’ll also be the one in charge of taking care of whatever repairs and maintenance your home needs.

This can be quite expensive; it’s estimated that you’ll spend about 1 % of its total value each year on repairs.

The furniture in your home may also be yours to keep, but you can include the cost of keeping this up to date as well. Most rentals come furnished and, while you have to take reasonably good care of it, the wear and tear of living there won’t come off your paycheck.

Small families and those who plan on staying put for the next couple of years can really benefit from buying instead of renting. You’ll be involved in the community and feel that sense of belonging that is so important for small families; until then, don’t worry.


Which Qualities Most Affect The Value Of Your Property?

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If you are investing in real estate, it goes without saying that you want to earn as much as you can from it. This, in essence, is the primary goal, and it can be surprisingly challenging making it happen as well as you would like. However, the more you understand about the whole process, the better, and that is where this comes in. One of the main things you need to comprehend well is what it is exactly that increases or decreases a property’s value. This will help you to understand better when to buy, sell and when to just sit still. Let’s have a look at a few of the most important qualities in this regard.

Location

This first one is often referred to as one of the basic tenets of real estate. If you are happy with the location of the property, you can be fairly confident that it will have a good value. But knowing what constitutes a popular location is another matter altogether, and is generally the kind of thing that you come to appreciate through trial and error and a little bit of patience. But something that hardly ever changes is that an exotic location can really help boost the value. You are more likely to be able to charge more for a waterfront property than a suburban one, for example, so it is worth bearing those kinds of considerations in mind as well as possible.

Fixtures

The quality of your fixtures and fittings, as well as what kind of ones your property has, will make a huge difference to the value – much more even than the building material of the property itself. You should endeavor to keep your fixtures and fittings in the best possible state for as long as possible, as that is the number one way to ensure that your property retains its value as much as it can. Of course, a certain degree of wear and tear is expected, but you should still try to minimize this as much as you can if you care about retaining some of the property’s inherent value. Fortunately, this is the kind of thing that can be easily fixed, should it come to that.

Crime

If you were wondering whether the neighbourhood affects the value, the answer is yes. But there is one factor in particular which has an enormous influence, and it is the crime level in the local area. If you find that local crime increases, this will absolutely have an impact on the value of your home. Of course, this is the kind of thing that you cannot control, so it is merely something to consider as you are purchasing a property. But the more you know about how your property’s value is affected, the better equipped you are to try and make the most of what you have got.

The more factors you are aware of, the easier you will find it to make the most of your properties, so keep an eye on as much as you can and you should find that beneficial in the long run.

 


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